Double Fine has warned indies of the dangers of devaluing their products, citing its new publishing initiative as a way of protecting against that outcome.
In an interview with USgamer, COO Justin Bailey expressed concern over the harmful side-effects of low price-points and deep discounting for indie games. By giving away too much for too little, he warned, indie developers could reach a similar situation as that found in the casual market.
“I think what indies really need to watch out for is not becoming the new casual games,” he said. “I don’t think that’s a problem from the development side. Indies are approaching it as an artform and they’re trying to be innovative, but what’s happening in the marketplace is indies are being pushed more and more to have a lower price or have a bunch of games bundled together.”
Double Fine is publishing MagicalTimeBean’s Escape Goat 2, the first occasion it has assisted another developer in that way, and it won’t be the last. According to Bailey, what seems to be a purely business decision on the surface has a strong altruistic undercurrent.
“Double Fine wants to keep indies premium. You see that in our own games and how we’re positioning them. We fight the urge to just completely drop the price. That’s one of the things we want to encourage in this program. Getting people to stick to a premium price point and to the platforms that allow you to do that.”
“We’re not looking to replace… we’re trying to augment the system,” he replies. “We’re making small strides right now. Costume Quest 2 is a high-budget game. It’s one that I thought it was best to have a publishing partner who can also spend some marketing funds around it.”
Double Fine is not the first developer to express concern over the tendency among indies to drastically lower prices.
In January, Jason Rohrer published an article imploring developers to consider the loyal fans who buy their games full-price only to see them on sale at a huge discount just a few weeks or months later. Last month, Positech Games’ Cliff Harris went further, suggesting that low price-points actually change the way players see and interact with the games they purchase.
Thanks to Silicon Valley, there’s no shortage of tech companies hosting meetings or conferences in the Bay Area, but when it comes specifically to the business of games, there are few conferences in San Francisco that can rival the annual Game Developers Conference. For most in the industry (or those looking to enter the industry) it’s one of the few must attend events each year. And you can bet the city of San Francisco is happy to host GDC, as the financial benefit to local businesses is substantial.
“GDC is the highlight of March for the San Francisco hospitality community – everyone knows when GDC is here judging from the packed bars, restaurants, and streets. I love that turning any given corner in or near the convention center, one will hear an international language spoken. Their current financial impact is estimated at over $46 million,” Leonie Patrick, senior director for Moscone Expansion Sales at the San Francisco Travel Association.
“Although San Francisco is fortunate to have several large conventions, the demographic of GDC is unique and high energy. GDC is a valued, annual group and we do our best to assist with their success every year. When they thrive, we thrive,” she continued.
While GDC used to take place in San Jose, the conference quite simply outgrew the city, and San Francisco became its new home, offering more convention space and hotel accommodations. The conference has been consistently growing along with the industry itself, and it’s definitely been a boon to San Francisco.
“GDC has been with us since 2005, with the exception of 2006. They have demonstrated tremendous growth. They started off with 10,000 people crammed into Moscone West, and they have more than doubled their attendance in 8 years,” Patrick said. “GDC has also had extreme room growth, starting at 1,900 on peak to almost quadrupling that number.”
While some locals have resented the impact that highly-paid tech sector employees have had on San Francisco’s cost of living, San Francisco Travel Association isn’t concerned that GDC will be affected by any of this sentiment. “We have no concerns about how the GDC attendees will be received by San Francisco. San Franciscans know that tourism is our number one industry and conventions are a different issue from residency issues. We welcome GDC happily each year,” Patrick added.
Indeed, tourism is a wonderful thing for the great city of San Francisco. From the sights and sounds to the places to eat, there’s plenty to enjoy for GDC attendees who might want to nip out of Moscone for some downtime as well.
“Many attendees have been here repeated times so they want more than the typical icons. They may want to explore the more offbeat neighborhoods like the Castro, Union & Fillmore Streets, eat a great meal in the Mission, or walk around Noe Valley. For the first and second timers, they should see the Golden Gate Bridge, Coit Tower, ride a cable car, go down Lombard Street, sit in a café in North Beach, walk along the Wharf, visit the Ferry Building, or window shop in the Haight,” Patrick recommended. “And I can’t forget about Golden Gate Park, or maybe see the Pacific Ocean if they have not before. And if they really have time visit one of the many neighboring cities. Sausalito, Tiburon, Monterey/Carmel, Lake Tahoe… the list goes on.”
And even if you don’t have a car, it’s thankfully not too difficult to get around San Francisco (unlike Los Angeles, for example).
“Luckily, San Francisco is a large city contained in a small footprint. It is an extremely easy city for walking. Despite its reputation for having many hills, which it does, take a walk along the waterfront in order to get you from the convention center to the Wharf – you will avoid them all,” Patrick noted. “We also have great public transportation that can take you to outlying areas of San Francisco as well as outlying cities very economically.”
While it’s a bit late now, her advice for future GDC attendees should definitely be heeded: “Use the hotels that the event staff at GDC recommends since they are all vetted and reviewed by the GDC staff. And try not to book your hotel too late since rates are likely to get higher closer to the event date.”
Intel has released details about its new Xeon E7 v2 chipset. The Xeon processor E7 8800/4800/2800 v2 product family is designed to support up to 32-socket servers with configurations of up to 15 processing cores and up to 1.5 terabytes of memory per socket.
The chip is designed for the big data end of the Internet of Things movement, which the processor maker projected will grow to consist of at least 30 billion devices by 2020. Beyond two times better performance power, Intel is promising a few other upgrades with the next generation of this data-focused chipset, including triple the memory capacity, four times the I/O bandwidth and the potential to reduce total cost of ownership by up to 80 percent.
The 15-core variants with the largest thermal envelope (155W) run at 2.8GHz with 37.5MB of cache and 8 GT/s QuickPath connectivity. The lowest-power models in the list have 105W TDPs and run at 2.3GHz with 24MB of cache and 7.2 GT/s of QuickPath bandwidth. There was also talk of 40W, 1.4GHz models at ISSCC but they have not been announced yet.
Intel has signed on nearly two dozen hardware partners to support the platform, including Asus, Cisco, Dell, EMC, and Lenovo. On the software end, Microsoft, SAP, Teradata, Splunk, and Pivotal also already support the new Xeon family. IBM and Oracle are among the few that support Xeon E7 v2 on both sides of the spectrum.
It’s pretty hard to figure out exactly where the new generation of consoles stand in terms of sales right now, but the general picture is clear. PS4, still supply constrained in many markets, leads Xbox One by at least a million consoles sold, possibly as much as two million – so the oft-cited ratio of 1.5:1 seems to be holding. Assuming little else changes, that ratio will tip even further in Sony’s favour in the coming weeks, with the PS4 finally launching in Japan, a market where it can expect to sell very strongly – although I wouldn’t expect to see the dominant 3DS removed from the top of the hardware charts for too many weeks. Meanwhile, Nintendo’s rather less successful console, the Wii U, continues to lose ground to both of the newcomers and will likely be surpassed in overall sales by Sony sometime this month (if it has not been so already) and by Microsoft within the next quarter.
It’s important to put this in some context – the Xbox One would look like a pretty successful console launch if it wasn’t stacked up against the PS4, but eyebrows would still be raised over the slackness in demand for what would be expected to be a fully supply constrained launch. Meanwhile, Wii U’s performance wouldn’t look great in any reality, but certainly wouldn’t be attracting the current degree of fainting and pearl-grasping were it not being compared to the extraordinary success of its own predecessor, the Wii.
“I’d argue that the real problem with these innovative pieces of kit isn’t that they’re inflating the price – the real problem is that they are, so far, utterly pointless”
The only console among them which resists any attempt at contextual negativity is the PS4, which is performing incredibly well. Hardly anyone has a bad word to say about the PS4, other than “I can’t find one to buy” – the hardware has turned out to be very solid; the online services (PS Plus in particular) are well-liked; and Sony’s approach of wooing key indie developers to the console for launch period has helped to stock the console with early adopter friendly titles which generate plenty of goodwill as the wider market waits for big AAA hits to filter through. Giving several of these games away on PS Plus, especially while new owners are in their freebie period, has also been a great move.
It’s hard to argue against a surface reading of this situation which says that Sony has executed superbly on its product while Microsoft and Nintendo have stumbled. Nintendo dropped the ball on Wii U software for its first year, arguably at least, and made a mess of marketing its new console – just as it initially did with the 3DS, which makes me wonder exactly what compromising pictures of Iwata the firm’s amazingly still-not-fired marketing bosses are keeping in a concrete bunker somewhere. Microsoft lost the trust and goodwill of a huge swathe of the early adopter audience, especially outside the USA, when it announced the Xbox One as a TV-watching box, compounded its error with a horribly anti-consumer policy on used software, then changed its mind on the latter (a good thing, but much damage was already done) and botched the execution of the former. Now it’s got a mountain to climb to restore goodwill, a console that’s $100 more expensive than its well-liked rival and a fresh salvo of unflattering technical comparisons between the systems emerging each week – a tough position, to say the least.
I think that beyond that surface reading, there’s something more fundamental at work – a level on which both Nintendo and Microsoft made the same mistake. Sony’s PS4 isn’t just superbly executed, it’s also conservative. It’s a powerful console with great engineering behind it, a great OS and network services, and a superb messaging strategy in which Mark Cerny and Shuhei Yoshida, who are actually at the coalface of developing the system and its software, have been allowed to take very public roles and to speak openly and honestly. That’s all fantastic, but PS4 is also very clearly an evolution of what came before. In architectural terms it’s vastly different from PS3, of course, but from a consumer standpoint – here’s a black box that you stick discs into and then play them with a Dual Shock pad. You can play with your friends online, and even buy games online, but arguably the only real departures from the traditional console model lie with the online services – PS Plus (which existed on PS3 as well, of course) and video streaming.
Xbox One and Wii U are less conservative, because both of them make some effort to change the interface and context of videogames. Xbox One includes a vastly updated and improved Kinect motion sensor, which shoulders the brunt of the blame for the console’s inflated price tag. The sensor, like its predecessor, is designed to map and understand the movement of human bodies around the room in front of it – unlike its predecessor, it actually appears to be capable of doing so very well. The Wii U, meanwhile, includes the GamePad, a touchscreen controller that lets you play games even while others are watching something else on TV, but more interestingly, also creates a second screen for gameplay and has potential uses in asymmetric multiplayer, wherein one player uses the screen to set up a game while others use Wii Remotes to tackle the challenges being created.
Both of these things are interesting. Both of these things, inevitably, inflate the price of the console to which they’re attached. Both Wii U and Xbox One could seriously do with being $100 cheaper than they are right now – such a price cut wouldn’t be the end of their woes, especially in the case of Wii U, but it would level the playing field and make everything much more interesting. Yet I’d argue that the real problem with these innovative pieces of kit isn’t that they’re inflating the price – the real problem is that they are, so far, utterly pointless. Not only have both Microsoft and Nintendo failed to create software that effectively capitalises on the potential of Kinect or the GamePad, both firms have also completely failed to explain the devices to consumers in a way that stands any hope of making them excited about such potential. The very fact that the first reaction of many consumers and commentators to weak sales from these consoles is “get rid of Kinect / the GamePad!” is a demonstration of just how badly communication, explanation and demonstration of these features has failed.
It could be, of course, that the features themselves just aren’t much good. I think the potential of the GamePad remains to be tapped, but have some sympathy with the argument that Kinect, even in its vastly upgraded Xbox One incarnation, is a solution for which no readily apparent problem can be found. Certainly its present function, as an utterly sub-par way of controlling the console’s menu functions and an occasional shoehorned annoyance in games, does little to explain why this expensive piece of hardware is a mandatory part of Xbox One – yet I know that there are plenty of enthusiastic and intelligent games people at Microsoft, and there must be a genuine belief that Kinect 2 can deliver unique and worthwhile experiences that won’t be possible on other consoles. The problem is that, just as with the thus-far largely meaningless GamePad, Microsoft has failed to demonstrate or articulate just what those experiences will be.
In short, I think consumers are confused about what exactly Nintendo and Microsoft want to sell them. Sony’s proposition is clear – it’s a much-upgraded and improved successor to the PS3, which was a much-upgraded and improved successor to the PS2, and so on. Nintendo and Microsoft make claim to be something more than that, then mumble incoherently when asked what exactly they mean, or what precisely they’re proposing to achieve.
It feels like both companies want to bottle some of the magic which fuelled the Wii to such great heights in the last generation, but they’ve forgotten that the real magic of the Wii wasn’t actually the Wiimote – it was Wii Sports. In one superbly crafted game, bundled free with the console in many territories, Nintendo explained exactly what the Wii was for. A few minutes with Wii Sports showed anyone and everyone what the Wiimote was designed to do and how it would change the game experience. Moreover, it set out a clear agenda for the console as a whole – a social machine, a family machine, an accessible machine. Wii Sports wasn’t just a game, it was a powerful demonstration, a mission statement and perhaps the greatest piece of marketing anyone in the games industry has ever crafted.
The Xbox One and the Wii U both have their Wiimote, but neither has their Wii Sports. One of Satoru Iwata’s big pledges in his mea culpa speech after Nintendo’s projections were downgraded was that the firm would double down on the GamePad, creating software and marketing that would explain the controller better to the public. If that means finding the Wii U’s Wii Sports, it will absolutely be a worthwhile effort – it doesn’t have to mean establishing the Wii U in the same market as the Wii, but making a clear mission statement for the console would definitely help. Microsoft, too, needs some of that focus. Right now, Kinect 2 is not differentiating Xbox One in the marketplace – it’s just hanging around the console’s neck like a deadweight. Unless Microsoft can find the software and the messaging required to make Kinect into a real system-seller, its mandatory inclusion may go down as one of the worst self-inflicted wounds of any console battle in history.
In a new Wedbush report that spans nearly 170 pages, providing a comprehensive overview of the past, present and future of the video game marketplace, the firm discusses why the next generation “will be as big as ever” and how the industry’s growth actually makes it more appealing to investors than other entertainment businesses.
While analyst Michael Pachter acknowledged that the current console transition is “one of the most difficult” for publishers, he ultimately sees the new consoles spurring big growth for the industry as software sales take off in the next several years. Combined U.S. and European software markets are forecast to grow at a 9 percent CAGR over the 2014 – 2016 period, totaling console software sales of $12 billion in 2014, growing to $14 billion in 2015 and to $15 billion in 2016. Handheld software sales (DS, 3DS and PS Vita) are expected to remain flat at approximately $1.6 billion per year over the three-year period.
The continued growth of the business is another reflection of a maturing industry and a maturing audience that’s growing older, earning more and spending more on games.
“Several demographic trends and market drivers should fuel rapid growth of interactive entertainment software sales. We believe the most compelling of these trends is the expanding age demographic of the interactive game consumer, accompanied by an increasing level of disposable income and the propensity to spend that income on entertainment,” noted Pachter.
Importantly, many of these people are choosing to spend on games above other entertainment, and that’s something investors should pay attention to. “We believe that the interactive entertainment industry offers secular dynamics that will provide extended and sustainable growth. We believe several publishers stand poised to capitalize on this growth, providing investors with an opportunity to participate,” Pachter said.
“Both Sony and Microsoft should deliver substantial profits from their gaming businesses over the next several years”
“Console, handheld and PC video games comprise a significant portion of overall entertainment industry sales, we believe comparing favorably with other mainstream entertainment products such as movies, books, and music. With comparable size and growth at a faster rate than these competing forms of entertainment, we expect the interactive entertainment software sector to present a compelling investment opportunity over the next three to five years.”
Wedbush believes interactive entertainment software sales will grow around four percent annually in the next three years, and the firm expects interactive entertainment to grow faster than other U.S. entertainment sectors over the next five years. Wedbush is modeling growth of just zero to two percent for other entertainment products sales over the same time period.
“Using our projected growth rates, we forecast that the U.S. interactive entertainment industry in 2016 will continue to be larger than books, box office and music… It is important to consider video game software purchases in the context of all entertainment spending. When books, music, movies and video games are added together, total U.S. spending on entertainment content totaled over $65 billion in 2013. The portion spent on video game software, at around 11 percent of the total, has the potential to grow at a faster rate than any of the other entertainment categories for many years to come,” Pachter explained.
For the current year, Wedbush expects PS4 to sell another 12 million units, Xbox One to sell 9 million, and Wii U to sell 3 million. More important than who “wins the console wars,” however, is which companies can maintain profitability. Pachter noted that Microsoft and Sony should do well on that front compared to a struggling Nintendo.
“Given its very slow console sales, Nintendo appears destined to see its console software sales and royalty stream markedly lower than in the last cycle, and we are skeptical that it will make a profit from its console business during the next generation,” he said. “At our projected sell-through rate, we expect both Sony and Microsoft to be very profitable in the next generation. Notwithstanding their relative projected market shares, we expect both companies’ console penetration to substantially exceed their penetration in the current generation console cycle, primarily due to market share gains from Nintendo.”
He continued, “If our estimates are close to the mark, both Sony and Microsoft will likely be profitable on each console sold, and their respective games divisions will at worst break even. More importantly, Sony and ￼￼Microsoft earn royalties on every game sold for their respective consoles; our forecast calls for 294 million cumulative PS4 software units and 227 million cumulative Xbox One software units sold by the end of 2016, with an average of $8 – 10 in profit for each unit booked by each company. Both their multiplayer networks and their royalty businesses will provide a recurring revenue stream at a very high dollar margin (the respective networks require a high level of capital and support spending, while the royalty businesses bear little cost), meaning that both Sony and Microsoft should deliver substantial profits from their gaming businesses over the next several years.”
There’s plenty more in the full report at the link above. It’s an interesting read if you have the time.
AMD is in a bit of legal hot water and it is coming in the form of a class action suit filed by investors, alleging that AMD knowingly misled them into believing Llano APUs would do well in the market.
The suit was filed in California by investors who purchased stock between October 27 2011 and October 18 2012, reports Tom’s Hardware. The lawsuit alleges that AMD misrepresented Llano at the time of launch, claiming that the chips were going to sell well in emerging markets. In April 2012 AMD announced demand for Llano products was higher than expected and that its desktop business would rebound.
However, just three months later AMD revealed that demand for Llano desktop chips was in fact weak. AMD then reported lower than expected revenue and the price of AMD stock tumbled nearly 25 percent on the news.
In addition, investors claim AMD dismissed concerns about high inventory levels and their impact on gross margins. Eventually AMD was forced to take a $100 million inventory write-down for heaps of unsold Llano chips. This caused the stock to drop 17 percent.
However, the lawsuit is not what we would call bulletproof. The plaintiffs will have to prove AMD knowingly violated the Securities Exchange Act and took a conscious decision to misinform investors, which won’t be easy and it might prove impossible in a court of law. In addition, the slump in PC sales roughly coincided with the Llano launch and it might be nothing short of a trump card for AMD lawyers.
Perhaps investors should read a few tech sites before they choose to invest in a tech firm.
Valve is looking to halt its Steam Greenlight process, Gabe Newell revealed today during in an introductory address at Steam Dev Days. Attendees at the developer-only event have been tweeting out bits of news, with Hot Blooded Games CFO Dave Oshry among those sharing updates with the outside world.
“Our goal is to make Greenlight go away,” Oshry quoted Newell as saying. “Not because it’s not useful, but because we’re evolving.”
Oshry said the Valve head had been talking about how he wanted to give developers more control over Steam and how they use it to promote their games. The Greenlight process lets developers post pages for their games on Steam and lets the community give input on whether or not they look like something worth purchasing.
While details about the how and why of Greenlight’s eventual disappearance aren’t known yet, they’ve already been speculated upon. Earlier this week, PC Gamer reported on a translated GameKings.tv interview with Vlambeer’s Rami Ismail in which the Ridiculous Fishing developer guessed that Valve would soon be killing Greenlight.
“I’m thinking that because they’ve been clearing the queue at such a rapid rate,” Ismail said. “They’ve been clearing 100 games every month. . .You don’t do that because there are 100 good games on Greenlight every month. You do that because you want to get rid of everything that isn’t greenlit before you kill it, so you don’t upset developers.”
Ismail then guessed that Valve would replace the program by letting any developer put their game up on Steam and relying on a peer-to-peer recommendation system to solve the issue of content discoverability.
Coinciding with the beginning of Steam Dev Days, Valve also announced that its digital storefront had passed a new milestone with 75 million active users, a 15 percent jump from the 65 million total announced in October. The company also released a geographic breakdown of its sales, with North America and Western Europe accounting for most of its business (41 percent and 40 percent, respectively), but noting that Russia and Brazil have shown tremendous growth in the last year (125 percent and 75 percent, respectively).
Brendan Iribe, CEO of Oculus, notes that – as a hardware manufacturer – his business has no say in what software companies will charge for Oculus-enhanced games, but admits he would not be surprised to see them come at a premium price.
“It’s going to be up to the developers,” he says. “There will be some who make casual, simpler experiences – maybe bite sized. There are going to be Indie developers that make bigger experiences. And there are going to be bigger teams that make really big experiences. … And some that we’ve seen early prototypes of… Well, we’ve seen some that, boy, would I pay a lot to get that experience in virtual reality.”
Aaron Davies, director of developer relations at Oculus, agrees.
“In VR, suddenly objects have value – and scale and size and depth and I think there will be opportunities for developers to monetize them,” he says.
Noticeably higher retail prices for software could be one of the few things to derail current gamer excitement about VR. Consumers are still smarting from the industry’s move from $50 to $60 in 2005 – and EA incurred player wrath last February by suggesting they might jump to $70 with the launch of the Xbox One and PlayStation 4.
“They’d better deliver if they’re going to charge more than $50 or $60 for a game”
Iribe noted that pricing in the game industry tends to swing. Prices spiked with the launch of the last generation consoles, then swung to the other end of the pendulum with the rise of mobile gaming. He sees the rise of virtual reality as not an extension of PC gaming, but something different – which opens the door for them to move back in the opposite direction.
“VR is a fundamentally different experience,” he says. “This is the next generation of computing in a very big way. … This is something that’s going to change so many things.”
However, he notes, raising prices also raises risk for developers.
“They’d better deliver if they’re going to charge more than $50 or $60 for a game,” he says.
Davies notes that the higher prices – if they come at all – may not be done in a clumsy fashion, such as hiking the initial retail price. Instead, he points to the free-to-play model, where microtransactions make it less painful to pay (and the customer may not realize they’re paying more until much later).
“The whole concept of charging a premium is somewhat outdated,” he says. “It’s not to say it’s going to be upfront. It could be this is going to be an experience you get dialed into. We’ll see how it monetizes. … If you create content or an experience that someone is passionate about, you’re creating a lifestyle for them. And they’ll pay for that.”
“If people are willing to spend a lot of money on VR games, it obviously means we’re doing something right,” says Iribe.
Davies and Iribe note that they’re speaking in hypotheticals. At present, the company still isn’t even willing to talk about the Rift as a commercially available product. It’s still in the R&D phase, says Iribe, who won’t even commit to a 2014 release for the product.
The Crystal Cove prototype (which won Best in Show at this year’s CES Awards) does give a few hints as to what we can expect when this thing finally does hit its release milestone, though.
The unit being shown at this year’s CES relied on a camera attached in front of the user to work. And Iribe said barring an unforeseen technological miracle, that’s not likely to change.
“While we’re not talking about the consumer unit, if it does [require the camera], we’ll bundle that in,” he says.
To date, Oculus has shipped more than 50,000 developer kits for the Rift, says Iribe. The company has gone from 7 employees a year ago to more than 70 today. The past year has also brought about several improvements to the unit.
The Crystal Cove prototype, as has been widely reported, offers positional tracking (thanks to that camera), giving users six degrees of visual freedom. And it has significantly reduced motion blur.
Latency has been improved as well. The developer kits in people’s hands have a latency of about 50-60 milliseconds. Crystal Cove got that down to between 30-40 milliseconds. The goal for launch, says Iribe, is 20 – with the hopes of further reducing that in later models.
“We’re not going to ship until we have a version that delivers a highly immersive, comfortable experience at a low price,” says Iribe. “I don’t mean just the foam padding and things like that. The experience of virtual reality has to be comfortable. VR has never been close to comfortable. We’re confident we will deliver a very comfortable experience for version one. It’s my belief that the age of 2D monitors has run its course.”
Steve Jobs was in the habit of describing the Apple TV – the real Apple TV, that is, not the hypothetical uber-device that’s been stalking the imagination of tech pundits and the nightmares of TV manufacturers for years – as the company’s “hobby”. It sells a few million units here and there, but it’s no iPad, no iPhone, not even a Mac. It’s a casually dangled toe in the water of a new market whose primary purpose is to extend the functionality of iTunes and iOS devices, rather than being a significant product category in its own right. “Hobby” summed it up; lots of noise and light around the topic accompanied all of Jobs’ later keynote events, but really, Apple was just dabbling.
Steam Machines, then, are Valve’s hobby. Admittedly, Valve is a company with a lot of hobbies, but Steam Machines fit a similar profile to Apple TV in this regard. The rest of the world, or its more credulous denizens, are waiting with bated breath for Valve to sally forth with a device that’s going to cut a swathe through the games market – yet for all the world, everything Valve does looks like little more than casual dabbling. They’re mucking around with a custom version of Linux (saying “SteamOS” sounds really impressive until you realise that most people’s family pets have their own custom version of Linux at this stage) and experimenting with an intriguing controller design, both of which are fine hobbies – but the much vaunted Steam Machines themselves, thus far, are little more than an underwhelming branding exercise.
Of course, Valve’s not about to get into hardware manufacture any time soon. It’s not what they do and it wouldn’t make sense. However, the company has a deep interest in ensuring that the gaming PC, as a platform, is in robust health. The name “Steam Machine” is a giveaway, if one were required; Valve needs lots of machines out there for Steam to run on. It has, as I’ve argued before, become the de facto champion and caretaker of the PC gaming sector, a role long since abandoned by Microsoft. Steam itself is the biggest pillar of Valve’s support for the PC, and Steam alone has done a great deal to ensure the continued flourishing of this market. The company’s gamepad efforts are an interesting sideline, its dabbling with SteamOS little more than tinkering for now; the Steam Machines, though, we earnestly expected to take a rather more dramatic form when they emerged at CES this week.
In the end, Valve managed scarcely a handful of minutes on stage to introduce the dozen “Steam Machine” manufacturers, each of which is producing its own versions of the system. Gabe Newell deflected all questions to the device manufacturers. Despite carrying the Steam name, it’s almost like Valve isn’t entirely happy to be associated with the project right now – perhaps wincing at the heavy responsibilities which being seen as a platform holder will inevitably bring. Perhaps the Apple TV comparison isn’t fair after all; Apple TV always felt like an under performing but beloved hobby. Not much feels beloved about Steam Machines. Not yet, anyway.
It’s not hard to see why the Steam Machines might be unloved, though. They’re an ugly and rather ramshackle lot. Their prices range from a console-matching $499 up to an eye-watering $5000, while their case designs range from the functionally ugly through to the kind of howlingly awful rig that inspires mass eye-rolling even at LAN parties. The specifications of the devices, which one might have expected to conform to some kind of standard, or a number of standard “steps” at different price points, cover the whole spectrum of PC performance. This is perhaps the most disappointing aspect of the announced devices – if these were actually meant to attract less hardcore gamers (most core gamers will still build their own systems, of course), then by doing nothing to reduce the mind-numbing complexity of figuring out specifications and component codenames, they have already failed in their most basic task.
If I sound disappointed, it’s because I am. I’m disappointed on an entirely personal level, I confess. 2014 was going to be the year I got myself a gaming PC again. I’ve missed too many games and experiences through not owning one, and I’d love a reasonably small, low-profile box with enough grunt to play PC titles comfortably. I haven’t followed PC specifications and components for about a decade and I’d rather perform my own open-heart surgery than build another of the damned things myself, so a Steam Machine looked perfect; yet after this week’s CES reveal, it appears that the actual advantages of such a system in terms of reducing complexity (let alone cost, which was always unlikely to be a major factor) are negligible. I’m left wondering who exactly these boxes are for – the core audience will ignore them and build their own systems, while the more casual audience who are eager to engage with PC gaming won’t find any advantage in a “Steam Machine” that doesn’t exist at any other pre-built PC box-shifter.
Valve may have reason to wish that it was taking this hobby a bit more seriously. In spite of the robust health of the PC games market right now, there are structural issues with the PC market as a whole which present a major challenge to its continued growth and success in the coming years – structural issues which only Valve is likely to be in a position to solve, and for which a Steam Machine style venture may well be necessary. To wit, a primary advantage of the PC platform, namely its sheer ubiquity, is winding down. It used to be the case that nearly everyone owned a PC and thus, nearly everyone could play games, at least to some extent. In recent years, the PC benefitted even more as a gaming platform from the inverse of that argument. Gaming PC purchases were justified in part by the prowess of the system as a multi-function device. A gaming PC was expensive, but also served as the user’s primary computer.
Today, the desktop computer is an increasingly rare beast. A great many households only have laptops; a great many more are supplementing laptops with tablet computers that perform much of the functionality that once belonged to PCs. Laptops, too, have changed. Apple’s Macbook Air and Google’s Chromebook, followed by a steady parade of Ultrabooks and wafer-thin, solid-state imitators, have refocused the desires of buyers away from power and towards size, weight and battery life. When I bought my last laptop, the ultra-thin one with 10 hours of battery life put forward a case that simply couldn’t be answered by any hankering for a powerful gaming system. Sales figures suggest that I’m far from alone in making this choice. The resulting device can run some games (it’s fine for lots of indie stuff, and Civilization V just about works) but it’s certainly not a gaming system. I’ve never even bothered installing Steam.
I am not, in any sense, predicting the “death of the PC” – to do so would be nonsensical – but there’s no doubt that this switch away from desktops and towards tablets and Ultrabooks presents a challenge to the existing PC market. I believe that gaming PCs will increasingly have to make a case for themselves as gaming devices alone; a subtle but important change from “here’s your next PC, and it’s great at games” to “here’s your next gaming device, and it can do PC stuff too if you want, which you probably don’t”. Core gamers won’t change their outlook at all, of course, but beyond that group there’s a vast hinterland that was once the domain of PC gaming and which now risks disappearing as the technological landscape shifts.
Steam Machines ought to be at the vanguard in terms of counteracting that shift – accessible, attractive, easy to understand gateways to PC gaming designed perfectly to fit into the lives of “lapsed” PC gamers using Ultrabooks, or console gamers looking to branch out, or former core gamers who want to stay in touch but don’t have the time or money any more to be deeply involved. Valve, as the operators of essentially the only PC game software distribution platform that matters a damn, ought to be leading that movement. On the strength of this week, Valve knows it ought to be doing something, but doesn’t have the stomach for doing much of anything – while left to their own devices, it seems, PC manufacturers aren’t capable of seeing beyond their own narrow world of hilariously arcane specifications and desperately ugly boxes. There’s an enormous opportunity waiting here to be grasped; so far, Steam Machines have only fumbled.
In case those who committed to becoming an early adopter of either the Xbox One or PlayStation 4 have not noticed, there isn’t much new content coming for your new console to play till early February. That’s right; if you get sick of playing the games that have already been released for the two consoles and the limited amount of downloadable titles, you are out of luck.
It always takes a while for developers and publishers to crank up production for the new systems, but the unprecedented lack of titles being released till February has many owners of the new consoles shaking their heads. Not that the number of games released around the launch of the two consoles was small, but December and January didn’t offer much in the way of new games to play.
When February rolls around it will see the new LEGO Movie game, Plants vs Zombies Garden Warfare, Rayman legends, and Thief all get released; as long as none of them end up being delayed. March looks much better, with release (of course) of Titanfall for the Xbox One and Xbox 360, as well as Metal Gear Solid V: Ground Zeroes and LEGO The Hobbit already slated to drop. PS4 fans can to look forward to Driveclub and iNFAMOU Second in March, as well as exclusives to that platform. We are not sure if those two titles will address the disappointment of not getting Titanfall on the PS4, but it can’t hurt.
One very interesting offering coming at the end of January is Tomb Raider – The Definitive Edition, which could end up being an excellent seller just by virtue of its release date. The Definitive Edition which will be available for both the Xbox One and PlayStation 4 is said to be re-mastered to deliver a next-generation gaming experience on both platforms. It will deliver 1080p graphics, enhanced physics, all of the previously released DLC content, as well as a number of subtle improvements over the original release. The reboot of the franchise was very good, and the re-release for the Xbox One and PlayStation 4 looks to be a worthy pickup if you didn’t play it first time around.
For those wondering what the future really holds, you are going to have to wait till E3 in June when the publishers and developers let us in on their schedule for releases for the rest of the year. While we expect the number of releases overall this year for both platforms to be rather thin, we do think that both companies have a number of surprises in the pipeline; but it is doubtful that we are going to hear much about them for a while.
After stretches in which Nintendo and Microsoft dominated the console market, Sony is in position to reclaim the sales throne in the coming years, according to Michael Pachter. Over the holiday break, the Wedbush analyst released his industry forecast for the next three years, saying, “we expect Sony’s PS4 to ‘win’ the next console generation,” while noting the PS4 and Xbox One should both thrive through the end of 2016.
Pachter projects the PS4 to post cumulative worldwide sales of 37.7 million systems by the end of 2016, 30 percent higher than his expectation of 29 million Xbox One’s sold. Bringing up the rear will be the Nintendo Wii U, for which Pachter projected worldwide sales of 20 million units through 2016. He said a “disproportionately high percentage of Nintendo customers play more casual games,” which leaves the company vulnerable to competition from mobile and tablet games.
Pachter’s projections included a few assumptions about the retail prices of the consoles, specifically that they will experience only modest cuts over the next three years. Pachter expects the Wii U to drop 50 percent to $150 by the end of 2016, but acknowledges a possibility of Nintendo discontinuing production on the console entirely if sales lag. Meanwhile, Pachter expects the PS4 to drop $100 to $299 over the next three years, with Microsoft narrowing the cost gap of the consoles by dropping the Xbox One $150 to $349 over the same period. While Pachter has the PS4 “winning” the console generation (putting quotes around all uses of the word), aggressive pricing from Microsoft could throw a wrench into that prediction.
“We think ‘winning’ is important to both companies,” Pachter said, “and it is possible that Microsoft will reduce Xbox One pricing far faster than we have forecasted. Should hardware prices come down faster than we have modeled, it is likely that hardware and software sales will grow faster.”
Regardless, Pachter paints a brighter picture of industry software sales than seen in some time. In the US and Europe, Pachter believes gaming software sales will jump 10 percent this year, 7 percent next year, and 6 percent in 2016. Microsoft and Sony platforms will account for much of that growth, with Pachter expecting the two companies’ various platforms to grow by a combined 50 percent in the next three years. As a result, the real winners may not just be Sony and Microsoft, but core gaming publishers as well. Pachter noted that the highest-rated stocks in Wedbush’s gaming coverage–Electronic Arts, Activision, Take-Two, Ubisoft, and GameStop–all focus on core gamer audiences.
What’s the most exciting thing that has happened to games during 2013? There are lots of candidates, all of them equally valid depending on your perspective and personal interests. The launch of new console hardware, perhaps; or the continuing meteoric rise of tablet and smartphone gaming. The deluge of microconsoles perhaps, none terribly successful but their very profusion pointing the way to the future ubiquity of game hardware (maybe). Oculus Rift, the really rather effective realisation of so many virtual reality fantasies; perhaps even Google Glass, which could open a doorway to new kinds of play if it doesn’t fall victim to a social backlash before it even gets off the ground.
For myself, forced to pick a single thing, I’d probably go with the bedding in of crowd funding as “part of the furniture” of the games business – indeed, of creative businesses in general. 2012 may have been the year when crowdfunding captured all the headlines, but in 2013 we started to see the wheels turning – projects completed, projects underway, projects stalled, projects failing.
After the initial hype, the reality of what it means for a wide group of interested individuals to fund a creative endeavour has bedded in. There has been disappointment, certainly, and some even bigger disappointments will probably follow down the line – but this is a learning process for creators and funders alike, and the lessons being learned are incredibly valuable. Why is crowdfunding still so exciting, despite all the hiccups? Because, quite simply, it removes one of the most infuriating and ridiculous barriers in the creative industry – the financial middlemen who must be convinced of the market value of a creative idea before they will fund it to completion.
In theory, this is not a terrible idea, even acting as a useful filter of quality in some instances – and in practice, it will continue to be how a great deal of creative work is funded. However, these gatekeepers have also slammed down the door on a vast, uncounted number of perfectly valid projects – labours of love or wonderful ideas which have been rejected because they don’t conform to a financier’s specific notion of what’s popular in the market, or because their commercial potential, while significant, is overshadowed by another more overtly commercial project.
In this way, we’ve lost not only countless games but entire genres. Adventure games are the most often lamented, having disappeared almost entirely in the 1990s, though I’d contend that the best features of the adventure genre were moulded into other game genres, survival horror being a key one, while the worst features of adventures really ought to stay dead – but I know the genre has plenty of hardcore fans who would probably do something awful to me for such blasphemy, perhaps even something as awful as making me play a load of old adventure games. Other genres, too, have declined to a huge degree, while whole swathes of game themes or approaches are simply deemed non-commercial and will never be funded by a major publisher.
Crowdfunding changes the rules, and in doing so, may help to rescue the creative and artistic continuity of the games medium. By allowing a creator to run up a flag and say “I’m going to make this; who’s up for it?”, it shares the enormous risk of creation around a vast audience, while empowering them directly to make choices about what gets made. It’s no accident that many of the most funded Kickstarter games are adventure games – after years of lamenting the lack of new titles in the genre, its fans were finally given a chance to prove the commercial viability of adventure games by putting their money where their mouths were, and they responded admirably.
As crowd funding moves into its next wave, I think that an audience of more savvy and slightly more cynical funders will interact with a group of very switched-on creators to start doing more and more interesting things. Up to now, crowd funding has been an orgy of nostalgia – long-dead genres, dusty old franchises, half-forgotten characters and worlds, all wiped down for Kickstarter in anticipation of fistfuls of dollars from men wearing the world’s rosiest spectacles. Some of the resulting games will probably be excellent (Wasteland 2 is a particular favourite at the moment) and it is certainly nice to see much-loved older genres and titles being treated with care and respect, mostly by their original creators. However, I submit that crowd funding can, and must, achieve so much more than this.
Crowd funding is about tapping into the collective power of a minority audience. The majority of the game purchasing audience don’t know or care about Double Fine, or Wasteland, or Leisure Suit Larry, or any of the other crowd funded titles to date – arguably the most “commercial” of which is the now incredibly well funded Star Citizen, and even that is a space simulation game, a genre which effectively breathed its last many years ago. These are all minority audience games, their success a testament to the fact that in the age of the internet, even the smallest niche can turn out to be a commercially viable audience. At a time when commercially backed games need to find some way to “prove” that they’ll be of interest to an audience of millions, crowd funded games need only gain the interest and affection of an audience of a few thousand to make them into viable, funded projects. So far, those minority audiences have largely been exactly what you’d expect from early adopters. They’ve been, by and large, people like me – proudly geeky guys in their thirties and forties who have some games and genres from the past they absolutely love, and who have a decent amount of disposable income in their pockets that they’re willing to delve into for the sake of nostalgia.
There’s not a damn thing wrong with that, and long may it last. However, it should be immediately apparent that there’s a much wider range of minority audiences who are deeply involved with, indeed, deeply in love with, video games. They’re largely not addressed by existing commercial games. The depiction of women in games isn’t great to begin with, but once you get into the realms of racial or sexual minorities, depictions of disability or mental illness and a whole host of other issues, games either don’t deal with them at all – or, when they do, you really, really wish they hadn’t. If you’re rolling your eyes right now, grow the hell up. Every medium invented by humanity is used by minority groups as a way of exploring and sharing their life experiences, and every medium in which this has occurred has benefited hugely from this process, the creative exploration of minorities at the margins feeding back into the mainstream and advancing the artistry and possibilities for everyone.
So here’s where I see crowd funding going in 2014 – a trend whose origins, tiny, hopeful green shoots, we can see in 2013. Crowd funding of nostalgia projects and well-loved developers breaking out of the publisher model will continue, of course. Some high profile projects will be released and people will love them. Some will be released and they’ll suck, others will fail, and there’ll be fresh bursts of enthusiasm and cynicism which will eventually start to look like a standing wave, a background pattern that’s actually stable when you look at it for long enough. Crowdfunding will be part of the furniture – and around its margins, amazing things will be occurring. Powerful voices will be tapping into the collective power of minority groups and using their input and their resources to make new kinds of games that would never, ever, in a million years, make sense to a game financier in a suit behind a boardroom table, but which engage small yet powerful niche audiences in fresh and wonderful ways.
In some regards, we can view the entire course of video game creativity over the past few years as being a process of learning how not to ask permission. It used to be that you had to ask permission from a whole lot of people before you could make a video game. Today, anyone can sit down with a copy of Unity, some time, some talent and a lot of coffee and make a video game; but of course, apart from the occasional lone genius, the investment of time and money required to make something on a large scale is still denied to those who cannot receive permission to create. Crowd funding succeeded in 2013 and will continue to succeed in the coming years because it changes the terms of that conversation. Once, creators had to find a grim-looking man with a fat wallet and say “please sir, may I be allowed to create?”; our future is a world where a creator instead stands up in a crowd and says “here’s what I’m going to create; who’s with me?”. This is no utopian vision, because the judgment of the crowd will often be as harsh and unforgiving as the besuited financier ever would be – but there are many, many crowds, and they ultimately offer a chance for a lot more voices to be heard in a medium that has all too often spoken in monotone.
The Samsung Gamepad is compatible with all Android phones running Android 4.1 Jelly Bean and above, though Samsung said that it is specifically optimized for Android 4.3 Jelly Bean and above. It features an eight-way D-Pad, two analogue sticks, four action buttons, two trigger buttons, a Select button and a Play button.
The Play button is a link to the Samsung App Store selling console optimized games at “reasonable prices”. The Gamepad uses Bluetooth 3.0, but can also pair via NFC and even cast gaming onto the big screen using Samsung Allshare. Although there are a number of Chinese imports available, this is the first time a major player has brought an Android game controller to the table.
Samsung said 35 games are available through the Play button at launch with more to come in 2014. Launch titles include Need for Speed: Most Wanted, Asphalt 8, Modern Combat 4, Virtua Tennis Challenge, and Prince of Persia. These are in addition to existing games from Google Play.
Samsung is keen to tout this new device as an alternative to buying a more expensive console such as an Xbox One or Playstation 4 (PS4), and while we’re not really sure if it can match them, we can certainly see the advantages of a device like this over Android game consoles such as the Ouya or Gamestick.
The device is already available for pre-order at Expansys for $125.99. At present there is no date attached to it, and Samsung is only committing to “the coming weeks” as the time-frame for availability.
As it’s a device with a steel casing, Samsung clearly is not aiming this at the budget market, and if its functionality matches its specifications, it could be one to watch in 2014.
Rockstar has teased some updates for Grand Theft Auto, its carjacking, torture, bank heist and crime simulatiion game franchise.
Content updates for GTA Online are coming, including a Deathmatch option, and a race creation tool. Further away, and hinted at by Rockstar are even more mysterious updates that it does not intend to talk about at the moment.
“This week, we will give you the first chance to build your own content in GTA Online (and play content others have made) with the release of the Deathmatch & Race Creators Beta. With access to some of the same tools as our own game design and development team, you can craft your own custom blood-soaked gunfights, high-octane street races, screaming jet dogfights and more,” it said about its upcoming update due out later this week.
“You’ll also be able to publish your original Deathmatches and Races via the Rockstar Games Social Club for the whole community to discover, download, play, rate and share. The Deathmatch and Race Creators will come to you via a free update, and you’ll need to have a Social Club account that is linked to your Xbox Live Gamertag or Playstation Network ID to use them.”
The firm added that these will be in beta for now, so they might include flaws. GTA gamers should perhaps be used to that sort of thing. The beta should be released tomorrow.
Later this month the firm will bring in team based games including a variation on capture the flag.
Flags are not the target in these so-called Capture games, but contraband and vehicles are. These are likely to be highly tactical games and come under four game types called Raid, Contend, Hold and GTA.
The long expected Heists feature is still to come, as Rockstar said that it is still working on getting this right. It also promised story updates for Michael, Trevor and Franklin. These are expected in 2014.
Take-Two Interactive Software has repurchased all of the Icahn Group’s stock, a deal worth $203.5 million and involving 12.02 million shares.
“This share repurchase reflects our confidence in the Company’s outlook for record results in fiscal 2014 and continued Non-GAAP profitability every year for the foreseeable future,” said Take-Two CEO Strauss Zelnick.
“With our ample cash and strong expected cash flow, we are able to pursue a variety of investment opportunities, including repurchasing our Company’s stock. On behalf of our board and management team, I would like to thank Brett, James and Sung for their support, dedication and service to our organisation. They leave Take-Two better positioned than ever for continued success.”
The move was funded by cash and cash equivalents on hand and Take-Two explained the move is “part of an ongoing strategy to buy back its shares.”
Take-Two and Icahn gave no reason for the sale of the shares, but as previously agreed, Icahn’s Brett Icahn, Jim Nelson, and SungHwan Cho and have resigned from the Take-Two board.
The Icahn Group is overseen by activist investor Carl Icahn and this year Forbes named him one of its 40 Highest-Earning hedge fund managers. In the past he’s tried to acquire Dell, Marvel Comics and owns a ten percent stake in Netflix.
[UPDATE]: Investors did not greet the news warmly, as Take-Two shares traded at twice their average volume and ended the trading day down 5.49 percent to $16.