To hear the likes of Electronic Arts and Gameloft tell it, premium apps are all but a relic of the past, the obsolete progenitor to mobile’s free-to-play future. But some smaller developers have found that future isn’t all it’s made out to be, and have been finding more success back on the premium side of the fence.
Kitfox Games and Double Stallion, two Montreal studios from Jason Della Rocca’s Execution Labs incubator, launched Shattered Planet and Big Action Mega Fight, respectively, on mobile in the last year. However, both titles struggled to rake in revenue, and the studios have since released more successful premium versions of the two. Kitfox’s Tanya X. Short and Double Stallion’s Nicolas Barrière-Kucharski spoke with GamesIndustry International this week to discuss their forays into free-to-play, and why more traditional business models worked better for them.
In Double Stallion’s case, part of the problem was that Big Action Mega Fight proved an awkward fit for the free-to-play format.
“We picked a genre, fighting, that was very content-driven,” Barrière-Kucharski said. “It was really very arduous to keep up and engage the audience with new levels, new enemies, and new types of content. We couldn’t compete at our size and budget with other, more established free-to-play studios and games.”
Beyond that, the genre may have been a poor fit for the audience. Barrière-Kucharski said that the people who would appreciate Big Action Mega Fight’s skill-based gameplay and faithful take on the beat-’em-up genre simply weren’t the same people interested in free-to-play games.
“I think the overlap between audiences was just too small to sustain a thriving community around the game,” Barrière-Kucharski said.
With Shattered Planet, Short said genre wasn’t a problem. She thinks the games-as-a-service model is actually a perfect fit for roguelikes like Shattered Planet, where a few new items and systems can exponentially increase the potential content for players to experience. However, Shattered Planet still didn’t fit the free-to-play mold for a few reasons.
“Free-to-play is not always suitable to single-player games,” Short said. “I think it’s best suited to multiplayer games in which it being free is actually of value to players because they can have more people to play with. That’s one philosophy we’ve developed, that if we ever do free-to-play again, we would only do it for multiplayer.”
On top of that, Shattered Planet was designed to be a tough game for players. But Short said in the free-to-play business model, difficulty can be “a dangerous thing.”
“We made a difficult game, and the fact that it was free made people suspicious, and rightfully so,” Short said. “I think they had every right to be a little bit paranoid about why the game was difficult. And in a business model where difficulty generally does often make people spend more, I think a designer’s hands are tied as to how and when a game can be difficult and when it’s ethical. So we felt a lot more comfortable about making a premium game, and me as the designer, I was happier because we could say sincerely that it’s exactly as difficult as we wanted it to be and you can’t say it was greedy or whatever.
Both games have found more success since they were released as premium versions. Big Action Mega Fight was re-launched last month as a $3 app ($2 during a first-week sale); those who downloaded the free-to-play version received the upgrade to the premium version as a free title update. Even though the free version of the game was downloaded about 400,000 times, Barrière-Kucharski said the revenues from Big Action Mega Fight’s first week as a paid app topped the total lifetime income from the free-to-play version since its November debut. To date the company has sold about 3,600 copies of Big Action Mega Fight on iOS, Android, Amazon Fire, and Ouya.
Kitfox took a different approach to premium the switch, continuing to run the free-to-play Shattered Planet mobile app alone, but also releasing a premium PC version on Steam with a $15 price tag and no monetization beyond that. The results were similarly positive, as Short said the studio made as much on Steam in one day as it had on mobile in two months. In its first week, Shattered Planet sold 2,500 copies on Steam. Short is happy to see the game bringing in more money, but she confessed to being a little bit torn on the trade-off it required.
“It really was great seeing that we had 300,000 downloads on mobile,” Short said. “We had 300,000 people play Shattered Planet on iOS and Android, and that’s amazing. Sure, it looks like we’re going to make two to five to 10 times more money on Steam, but it’s only going to be 1 percent of the amount of people that could see it if we tried to release it free, in theory… It’s a little bit sad that you monetize better with fewer people. When you’re trying to get your brand and your name out there, it is sad we couldn’t have another few hundred thousand people.”
Beyond the trade-off of settling for a smaller but more supportive audience, Kitfox has encountered some negative effects of releasing Shattered Planet as a free-to-play mobile title and then as a PC premium game.
“For us, a lot of people remained skeptical of the quality of the game if they knew the mobile version existed,” Short said. “I don’t think that really has that much to do with free-to-play and more to do with platform snobbery. It’s just kind of a general feeling of console and PC gamers that if a game was ever on mobile, it couldn’t possibly be as feature-rich or as deep, as strategic or anything like that.”
On top of that, there was some customer confusion over the game and its business model. Short said the game’s forums on Steam had some angry users saying they wouldn’t buy the game because it had in-app purchases (which it didn’t). Although the developers were able to post in the threads and clear things up, that sort of inconsistency has convinced them that if they ever do return to mobile platforms, they will stick to a free demo or companion app rather than something monetized.
“It’s just so dominated by giant players,” Short said of the mobile scene. “It’s such a completely different market that I think you really have to focus on it, and that’s not my team’s expertise. For us, we’re definitely going to be focus on PC and console; I think that’s where our talents are.”
Barrière-Kucharski agreed, saying that even if a niche audience is willing to pay for a certain experience, there just aren’t good ways for developers to connect to that audience.
“It’s really hard to be found or be discovered by players,” Barrière-Kucharski said. “I’m really looking forward to all the curation issues that are going to be tackled in the next year or so on iOS 8 and the Steam Greenlight update.”
But even if those initiatives follow through on their promises of improving discoverability, Barrière-Kucharski worries that the problem could still get worse as the gains made won’t be enough to offset the flood of new developers entering the field. Short also saw discoverability as a key problem facing developers right now, but stressed that finding a solution is in the best interests of the platform holders.
“Whatever platform figures out discoverability first will have a huge advantage because there are these thousands of developers that as soon as they hear there is any discoverability, that’s where they’re going to flood for sure,” Short said. “So it is almost a race at the moment between Steam and Apple and Google.”
Named the Mediatek MT6795, the chip is designed for use by high-end device makers for upcoming Android 64-bit mobile operating systems like the recently announced Android L, with support for 2K display up to 2560×1600 resolution.
The chip also features a clock speed of up to 2.2GHz along with Corepilot, which refers to Mediatek’s technology that aims to deliver higher performance per Watt to save power, thus increasing battery life on mobile devices while not sacrificing performance and bringing on board the power of eight cores.
The SoC also provides 4G LTE support, Mediatek said, as well as dual-channel LPDDR3 clocked at 933MHz for “top-end memory bandwidth” in a smartphone.
Mediatek VP and GM for Europe Siegmund Redl told The INQUIRER in a media briefing that the announcement is in line with the industry’s growth in the smartphone arena.
“There has been a discussion about ‘how many cores do you really need’ and what is the benefit [of octo-core],” Redl said. “Quad-core is pretty much mainstream today and application developers are exploiting the fact they can do multithreading and pipelining and parallel computing with handheld devices.
“This will not change with octa-core. When we started to introduce the first octa-core we were showing off a game with very intense graphics and processing that needed the support of multiple cores and again this is the way the industry is going; you bring out the hardware and the software development follows that and takes advantage of it and the user experience is a smoother one.”
The firm claims that the SoC features multimedia subsystems that support many technologies “never before possible or seen in a smartphone”, including support for 120Hz displays.
“With multimedia we raised the bar in terms of recording frames per second, such as slow motion replay with 480 frames per second, for much better user experience,” Redl added.
Multi-mode wireless charging is also supported by the SoC’s companion multi-mode wireless power receiver chip.
The Mediatek MT6795, dubbed the chip for “power users”, joins the firm’s MT6752 SoC for mainstream users and MT6732 SoC for entry level users. It’s the 64-bit version of the 32-bit MT6595 SoC that was launched at Mobile World Congress earlier this year, which features four ARM Cortex A17 cores and four Cortex A7 cores as well as Imagination Technologies PowerVR Series6 GPU for “high-performance graphics”.
Redl said that existing customers that use the MT6595 today for devices that are soon to be hitting the market can reuse the designs they have for the older chip as “they have a pin compatible drop-in with a 64-bit architecture”.
Redl said Mediatek will make the MT6795 chip commercially available by the end of the year, for commercial devices coming in early January or February.
Panasonic and Intel have just announced that they will start making its SoC chips using Intel’s 14nm process.
Panasonic is joining Altera , Achronix Semiconductor, Tabula, Netronome and Microsemi on an ever growing list of Intel foundry clients. We expect that the list to expand over time. There have been some rumours that Cisco is planning to make its chips at Intel, too.
Keep the fabs busy
In our recent conversation with a few industry insiders we learned that Intel wants to keep its fabs busy and occupied. This is rather obvious and makes perfect sense as investing in a transition to a new manufacturing node cost a few billion dollars on a good day.
Intel has announced its Core M Broadwell processors that are coming in the latter part of this year and this will be just a fraction of what Intel plans to manufacture in its new 14nm fabs. Intel Airmont, Morganfield as well as Cherryview and Willowview Atoms, all 14nm designs, will also try to keep the fabs busy.
Lower power with 14nm SoC
Panasonic is planning to make 14nm next-generation SoCs that will target audio-visual equipment markets and will enable higher levels of performance, power and viewing experience for consumers.
The 14nm low power process technology with second generation Tri-Gate transistors will help Panasonic to decrease overall power consumption of the device. We expect that these SoCs to be used for future 4K TVs as well as the set-top boxes and possibly upscaling in Blu-ray players.
TSMC will start making 20nm chips later this year and Nvidia might be among the first clients to use it for its upcoming Maxwell 20nm GPUs. Other players will follow as Qualcomm has started making modems in 20nm and will soon move some of its SoC production to this new manufacturing node. Of course, AMD’s 20nm GPUs are in the works, too.
Intel’s 14nm is still significantly more power optimised than the 20nm process offered by TSMC and the Global Foundries – Samsung alliance, but Intel is probably not offering its services for pennies either.
Intel is known as a high margin company and we don’t see this changing over night. One of Intel’s biggest challenges in 2015 and beyond is to keep the fabs busy at all time. It will try to win more mobile phone business and it is really pushing to win its spot in the wearable technology market as phone market seems oversaturated.
Wearables offer a clean start for Intel, but first steps in any new markets are usually hard. Android Wear ARM based watches that just hit the market will complement or replace wearable wristbands like the Fitbit, based on an ARM Core M3. Intel wants to make shirts with chips inside and the more success it has in bringing cheap SoCs into our lives, the more chips it can sell. Panasonic will just help keep the fabs busy until Intel manages to fill them with its own chips.
ARM has announced two programs to assist Android’s ascent into the 64-bit architecture market.
The first of those is Linaro, a port of the Android Open Source Project to the 64-bit ARMv8-A architecture. ARM said the port was done on a development board codenamed “Juno”, which is the second initiative to help Android reach the 64-bit market.
The Juno hardware development platform includes a system on chip (SoC) powered by a quad-core ARM Cortex-A53 CPU and dual-core ARM Cortex-A57 CPU in an ARM big.little processing configuration.
Juno is said to be an “open, vendor neutral ARMv8 development platform” that will also feature an ARM Mali-T624 graphics processor.
Alongside the news of the 64-bit initiatives, ARM also announced that Actions Semiconductor of China signed a license agreement for the 64-bit ARM Cortex-A50 processor family.
“Actions provides SoC solutions for portable consumer electronics,” ARM said. “With this IP license, Actions will develop 64-bit SoC solutions targeting the tablet and over-the-counter (OTT) set top box markets.”
The announcements from ARM come at an appropriate time, as it was only last week that Google announced the latest version of its Android mobile operating system, Android L, which comes with support for 64-bit processors. ARM’s latest developments mean that Android developers are likely to take advantage of them in the push to take Android to the 64-bit market.
Despite speculation that it would launch as Android 5.0 Lollipop, Google outed its next software iteration on Wednesday last week as simply Android L, touting the oddly-named iteration as “the largest update to the operating system yet”.
Intel has disclosed more details about its next generation Xeon Phi processor for high-performance computing (HPC), codenamed Knights Landing.
Knights Landing chips are due to be available in the second half of 2015, along with a new interconnect fabric known as Intel Omni Scale.
The chipmaker showed off the updates to its Xeon Phi many integrated core (MIC) platform at the International Supercomputing Conference (ISC) 2014 conference in Leipzig, Germany.
Intel announced Knights Landing at last year’s event, but gave away few details other than that the chip will be a 14nm part, will be able to operate as a standalone CPU rather than a co-processor, and will have integrated on-package memory.
Now, Intel has disclosed that this chip will be based on a version of the Silvermont core used in Intel’s Atom processors, with HPC enhancements including a low-latency mesh for inter-core communication. The first commercial systems with it are likely to ship in the second half of 2015.
Knights Landing will also have “at least as many compute cores” as the existing Xeon Phi products, according to Charles Wuischpard, VP for Workstations and HPC in Intel’s Data Centre Group. This means at least 61 cores, while rumours have already indicated it may in fact be a 72-core chip.
The first Knights Landing chips will have up to 16GB of on-package memory, which offers five times the bandwidth of DDR4 memory, but this is expected to be in addition to DDR4 memory on the motherboard, not replacing it.
“One of the choke points in many applications used today is I/O and memory bandwidth, and this is specifically designed to remove that bottleneck,” Wuischpard explained.
Knights Landing will in fact offer three times the performance of the current Knights Corner Xeon Phi product, offering over three teraflops in a single processor socket, Intel claimed.
However, with the Silvermont Atom cores it also continues Intel’s approach to HPC, which is to keep as much compatibility as possible between its Xeon Phi architecture and its existing x86 chips with their huge installed base of software.
Knights Landing will also feature a new interconnect fabric that will be integrated onto the chip, and which Intel is referring to as Omni Scale. This will be the fabric used in future Xeon Phi chips, according to Wuischpard.
Intel is not giving away too much detail on Omni Scale yet, but said it is different from the current True Scale fabric in Knights Corner, which is based on quad data rate (QDR) InfiniBand technology, while maintaining software compatibility.
It will use Intel’s Silicon Photonics fibre-optic technology, and will encompass a full suite of offerings including PCI Express adapters and switch hardware. Intel will provide an upgrade path from True Scale to Omni Scale, Wuischpard said.
AMD is planning to bring its new Mantle API to Linux in the near future. Although Linux is not a big gaming platform at the moment, SteamOS could change all that starting next year.
AMD’s Richard Huddy says the decision was prompted by requests from developers who would like to see Mantle on Linux. However, he stopped short of specifying a launch date. Huddy confirmed that AMD plans to dedicate resources to bringing Mantle to Linux, but other than that we don’t have much to go on.
Mantle on SteamOS makes a lot of sense
Mantle is designed to cut CPU overhead and offer potentially significant performance improvements on certain hardware configurations. This basically means gamers can save a few pennies on their CPU and use them towards a better GCN-based graphics card.
However, aside from enthusiasts who build their own gaming rigs, the world of PC gaming is also getting a lot of attention from vendors specialising in out-of-the box gaming PCs and laptops. Many of them have already announced plans to jump the SteamOS bandwagon with Steam Machines of their own.
Should Mantle become available on Linux and SteamOS, it would give AMD a slight competitive edge, namely in the value department. In theory vendors should be able to select a relatively affordable APU and discrete GPU combo for their Steam boxes.
AMD already tends to provide good value in the CPU department. The prospect of using mainstream APUs backed by cheap discrete Radeons (or even Dual Graphics systems) sounds interesting.
It will take a while but the potential is there
Huddy told PC World that Mantle has some clear advantages over DirectX. Microsoft’s new DirectX 12 API has already been announced, but the first games to support it won’t arrive until late 2015.
“It (Mantle) could provide some advantages on Steam boxes,” said Huddy. “We are getting requests to deliver this high-performance layer.”
While DirectX 12 will be very relevant in the PC space, the same obviously cannot be said of Linux and SteamOS. Therefore Mantle on Linux makes a lot of sense. However, it all depends on AMD’s timetable.
Last month Valve announced Steam Machines would be pushed back to 2015. They were originally supposed to launch this summer and the first announcements were made months ago. The first designs were based on Intel and Nvidia silicon, but support for AMD hardware was added just a bit later.
When Valve announced the delay we argued that it could have a silver lining for AMD. It simply gives AMD more time to improve its drivers or add Mantle support, something Nvidia and Intel do not have to worry about.
It still remains to be seen whether Steam Machines can make a big dent on the gaming market. PC gaming is going through a renaissance, but the latest consoles are doing well, too (apart from the Wii U). The concept is very attractive on more than one level, but it is very difficult to make any predictions yet, since we are still about 15 months away from launch.
The transition to 20nm has been anything but fast and much of the industry has been stuck at 28nm for a while, but the first 20nm products are coming as we speak.
TSMC’s 20nm process is almost ready for prime time, but volume production is still a couple of months away. However, some outfits do not need great yields and huge volumes and one maker if bitcoin mining ASICs says it will become the first outfit to ship 20nm products this week. Sweden-based KnCMiner received the first batch of 20nm Neptune ASICs earlier this week and it says it should start shipping finalized mining rigs by the end of the week.
Most ARM-based SoCs and practically every GPU on the market today are 28nm designs. The first 20nm SoCs should arrive by the end of the year, courtesy of Qualcomm and possibly Apple. Nvidia and AMD were expected to introduce 20nm GPUs sometime in the second half of 2014, but it is becoming increasingly apparent that we won’t see them until a bit later, with volume production slated for 2015.
The KnCMiner Neptune is a relatively big chip, with 1440 cores in a 55x55mm package, but there is no word on die size. The miner will use five chips and churn out 3TH/s while consuming 2.1KW. Although KnCMiner does not talk about the foundry, it appears that we are looking at TSMC silicon. However, this does not mean we will see mainstream chips manufactured on the new node anytime soon.
Cryptocurrency mining is a relatively small niche and many miners are willing to take big risks and pay through the nose for the latest kit in an effort to gain an upper hand in the mining hardware arms race. Mining ASICs don’t require great yields or big volumes, as the designers can operate with much higher margins than consumer chip outfits.
It is a risky space that has already seen a number of spectacular flops, but the promise of quick cash and downright ridiculous ROI is still attracting a lot of (greedy) risk takers. As a result there is a lot of demand and pre-orders are the norm.
Regardless of the controversy surrounding this very risky industry, it is hard not to be impressed by KnC’s feat, as the company states it has managed to beat big chipmakers to 20nm – and it has, albeit in a very tight niche.
The Core i7-4790K is a quad-core chip based on the Haswell microarchitecture. It draws 88 watts of power and has 8MB of cache, integrated graphics, memory controllers and support for the latest I/O technologies. It also supports multithreading and allow cores to process two tasks at one time.
The chip, now Intel’s flagship PC processor, is mainly for gaming and enthusiast desktops.
It’s Intel’s first chip capable of running at over 4GHz under normal conditions. It can be overclocked to 5GHz in air-cooled systems, said Renee James, president of Intel, during a keynote speech at the Computex trade show in Taipei.
Intel’s not the first chip company to reach 5GHz though: Advanced Micro Devices offers FX chips for gamers with clock speeds of up to 5GHz.
Chip makers moved away from cranking up chip clock speeds in favor of adding cores as a way to boost performance about a decade ago. Bumping up clock speeds generated more heat and consumed more electricity. Performance improvements over time have also come by shrinking chips and integrating more components such as graphics cores.
But AMD and Intel haven’t given up on clock speed altogether: They continue the battle on their flagship chips with the aim of capturing the performance crown.
Fireproof Games’s Barry Meade has issued a blunt jeremiad to what he sees as a mobile gaming industry hurtling towards creative irrelevance due to its reliance on data.
In an article published on Polygon, Meade lamented the reality that Fireproof’s The Room franchise is an extremely rare exception in mobile gaming: standalone experiences that earn good revenue from paid downloads.
“In a market as huge as mobile how the fuck are Fireproof among the only makers of premium games that saw this kind of success?” Meade asked, citing data indicating low levels of engagement (66 per cent of mobile games are not played beyond the first 24 hours) and incredibly small numbers of paying customers (two to three per cent) as evidence that the dominant free-to-play model is not providing quality entertainment to the market
“This is a statistically insignificant amount of happy gamers and nothing that gives you a basis to make claims about ‘what people want’. I think it just as likely that mobile’s orgy of casual titles is due to simple bandwagon-ism or, in other words, not knowing what people want.
“This is a statistically insignificant amount of happy gamers and nothing that gives you a basis to make claims about ‘what people want’”
“So it bothers me to hear game developers talking as if casual games are the new paradigm on mobile when so very few developers are actually happy with the games as they are, and mobile gamers clearly seem to “care” least of all. Free-to-play and casual titles should be a part of a greater gaming ecosystem, but right now they are the entirety of it on mobile.”
For further evidence, Meade pointed towards the top-ten grossing charts, which are dominated by an unchanging crop of huge titles that do little more than trade their relative positions of dominance. To the public, however, these “ten cute grinding games that are clones of each other” seem like the best the industry has to offer, and continue to reap the vast majority of the rewards.
“The free-to-play model itself serves a million uses to developers and gamers, I’ve chucked lots of time and money into World of Tanks, Warhammer Quest and many others myself – the model is not the problem,” Meade continued.
“The problem is more general, that taken as a whole the games industry is making mobile games that nobody cares about available to millions of players for nothing. Free-to-play producers chime that quality levels are obviously fine, ‘If it’s making money it’s objectively good, see?’
“Well no, not quite, shit sells by the ton every day. In the real world Burger King doesn’t get three Michelin stars. Burger King gets to be happy with its revenue not its reviews, and our industry’s inability to see the difference will only pull us further into our creative vacuum.”
The dominance of the free-to-play model in mobile continues to be divisive, and there are certainly counterpoints to Meade’s take on the matter – most notably from Ben Cousins, who has argued the relative merits of free-to-play both at conferences and in the press. However, Meade is far from alone in his doubt, and that includes developers who have spent years working with the free-to-play model.
At Casual Connect Europe this year, The Workshop’s Laralyn McWilliams gave a talk in which she warned the industry about mistaking data for an emotional connection. “There’s no measuring spoon for love. You can’t quantify it,” she said. “Retention is not the same as happiness.”
Meeting with GamesIndustry International after her talk, McWilliams expressed very real concern that the amount of money being made is masking the negative connections created by free-to-play games, and the possible long-term damage that could result from that relationship.
“The moment that you monetise in Candy Crush you’re probably extremely frustrated. You want to get past this level you’ve failed to complete 40 or 50 times, and that’s the moment you spend. But mixed into that moment where you spend is that frustration. It’s building a bad connection. I’m not monetising at a positive moment.”
Meade concludes his argument with perhaps the most salient point of all: “The audience knows better than all of us and if our mobile public truly does signal ‘I care’ through purchasing, I don’t think its radical for the industry to start listening to the 98 per cent of mobile gamers out there saying ‘I don’t care’.”
The full version of the article is over on Polygon, and it’s well worth your time.
Deep Silver has a pretty deep portfolio these days with Dead Island, Saints Row, Metro, as well as a couple of other franchises that they are now handling the distribution for.
What we already know that Metro” Redux is coming for the Xbox One and PlayStation 4, so if the company announced both a new Saints Row and Dead Island game that would fill the two unannounced title slots that the company is talking about. Sources tell us a new Saints Row game is in development, but it is unknown if it will be ready to be announced at E3.
According to the Taiwan Economic Daily, the chipmaker will supply SoCs for upcoming Amazon tablets. Details are sketchy and it is unclear whether MediaTek has landed an order for all Kindle Fire SKUs or just one of them. The paper claims MediaTek will start shipping the chips later this year, but we have no way of confirming or denying the report.
The chip in question appears to be the MT8135. It is a mid-range big.LITTLE part announced last year and it features two Cortex A15 and two Cortex A7 CPU cores. The GPU comes from Imagination and it’s the relatively fresh PowerVR G6200. The GPU is capable of churning out 83.2 GFLOPS at 650MHz, depending on the configuration of course.
It sounds like a decent all-round SoC, with a substantially faster GPU than previous MediaTek offerings in the same segment, which were powered by venerable SGX 54x and Mali 400/450 GPUs.
Information is limited and we can’t say for sure whether or not MediaTek actually landed the deal, or whether the deal includes more than a single Kindle Fire SKU. If true, it is a big coup for the Taiwan-based chipmaker, as Amazon ships up to two million Kindle tablets each quarter.
It would also help MediaTek’s ambitious tablet plans. The company hopes to double shipments of tablet-centric SoC products this year.
The IDC is preparing to publish its latest console forecast and the research firm has given GamesIndustry International an exclusive preview of the report. There are several key takeaways to note, including Sony’s dominance of the new console cycle, Microsoft’s need to unbundle Kinect, and a general decline in the physical retail side of the games business.
IDC predicts that Sony’s PlayStation 4 will have the single biggest share of the market in 2016 with 51 million sold globally. Microsoft hasn’t been faring quite as well, but IDC believes Xbox One will make a serious comeback, particularly in North America where it’s forecasted to take the lead. This will be spurred on by unbundling Kinect, IDC said.
“The presumed unbundling of Kinect and Xbox One, which should facilitate rough price parity between it and the PS4, should lead to a spike in Xbox One sales; assuming the console and sensor are unbundled in 2015, IDC expects Xbox One to recover and emerge with the largest installed base of any console in North America by the end of 2016,” the firm explained.
Meanwhile, Nintendo’s Wii U is expected to finally receive “the equivalent of a $50 price cut worldwide in late 2014 or early 2015,” but it won’t make a serious dent in the installed base gap between Wii U and the competition.
Looking at the bigger picture, the retail component of the video game business is expected to see continued declines, IDC said. IDC’s forecast states that, together, eighth generation consoles will generate about 10 percent less retail revenue from console hardware and disc-based games than seventh generation (Xbox 360, PS3, Wii) consoles did combined through their first six years on the market.
That being said, total eighth generation console hardware revenue actually is projected to come in above the comparable seventh generation total thanks to higher average selling prices (ASPs). It’s a different story, however, for the physical disc business, which IDC forecasts will see 45 percent fewer discs sold to retailers in the first six years compared to the seventh generation physical games sales.
It’s clear that more and more games are being purchased digitally, and the good news is that digital sales will keep the industry healthy. “Given current trends, more than 50 percent of total game and direct app/service spending across all consoles will come through digital channels by 2019 (just over the edge of our forecast window),” said Lewis Ward, IDC research manager. “Microsoft and Sony will get there faster than Nintendo; the projection mixes all game/service spending on big 3 OEM platforms.”
In order for the industry to match the sales of the seventh generation, digital will have to continue to grow – and it appears that it will. “If digital games and related online console revenue streams are included in the picture… the outlook for eighth generation consoles improves substantially. The inclusion of digital console game spending, subscription revenue and other content/service/app purchases billed through online eighth generation console stores pushes total revenue up to within a few percent of the seventh gen total through the first six years of availability,” noted IDC. “Rising digital revenue is forecast to nearly offset the fall in disc-based revenue.”
IDC’s 73-page report, Worldwide Video Game and Entertainment Console Hardware and Packaged Software 2014-2018 Forecast, will be available this week.
When the Xbox One finally rolls out in Asian territories this September, almost a year after its western debut, all eyes will be on its performance in one key territory. Not Japan, where expectations for the console’s performance are about as close to absolute zero as you can imagine, but rather China; a late, and somewhat surprising, addition to Microsoft’s launch plans.
You’d think that China, the world’s most populous nation and second-largest economy, would be an obvious and attractive target for a console platform holder. Indeed, China is on track to be the world’s top economy within the coming years (perhaps even next year, according to recent projections in the Financial Times); corporations around the globe are eyeing the nation’s rapid growth and swelling middle class as a huge opportunity. Games on PC and mobile phones are already big business in China; why shouldn’t console platform holders take a piece of that pie?
Yet in September, when Microsoft introduces Xbox One to the Chinese market, it will be the first platform holder to attempt such a launch for many years. Neither Nintendo nor Sony has shown any indication that they intend to bring their present home console platforms to China, and despite the apparent potential of the market, you’d struggle to find any serious analyst who expects Xbox One’s performance there to be anything more than an interesting experiment. Chinese news site QQ reports that Microsoft is only planning to ship 100,000 units of the console in the region; Microsoft denies that rumour, but only does so in pointless newspeak. It’s “a figure which does not reflect Microsoft’s vision,” apparently, which translates into actual human language as “we can’t deny it, we just don’t want you to say it out loud”.
“Chinese gamers have mostly grown up without consoles and are used to mobiles and PCs as their gaming platforms, so the level of demand is questionable”
So what’s the problem with China? Why isn’t the world’s largest economy in waiting an open goal for console manufacturers? The problems are actually summed up quite well by the very circumstances which have allowed Microsoft to launch Xbox One in the market – namely the partial repeal of a rule dating back to 2000 which quite simply banned the sale of any foreign-made games console in China. Sony tried to flout the rule by marketing the PS2 as a more generalised home entertainment device, but even after trying to accommodate the thoroughly unimpressed Chinese authorities, found itself subject to a ban. Nintendo had a little more success, creating a joint venture called iQue which marketed a heavily modified N64 (the iQue Player) with a very limited range of software, but since since 2003 has focused solely on handheld consoles.
The recent expansion of the Shanghai Free Trade Zone has brought with it a change to this rule, along with many other liberalisations of trade within a specific zone around Shanghai. This has allowed Microsoft to establish a partnership with local firm BesTV – not just for Xbox One, but a more broad partnership aimed at extending Microsoft’s media interests into China.
Note two things about the above narrative. Firstly, for all its rapid growth and development as a marketplace, China was as recently as 2000 and beyond still establishing strict new rules prohibiting overseas countries from bringing consoles and games to the country. These rules were justified largely on cultural grounds; the authorities were apparently concerned that console games were bad for the development of children and would violate the cultural norms which the country’s censors wish to enforce. Concerns for childhood development, however, seemed not to apply to the country’s homegrown games industry, which has boomed in recent years. China now has a huge market for mobile and PC games, largely served by domestic companies, with only occasional success stories for western companies who manage to navigate the nation’s tough regulatory environment; Blizzard being the obvious example.
I don’t doubt that Chinese concern over the cultural aspects of games was real. The Chinese authorities believe strongly in the power of media and communication to impact upon their populace, and have a particularly deep-seated fear of external influences which might loosen their grasp on power within the country. Console games, a creative industry dominated by America and Japan – nations seen as rivals at best, as enemies at worst – would certainly appear suspect to those authorities, and a belief that games are bad for children’s development, albeit unsupported by research, does seem commonplace among Chinese parents. The justifications weren’t untrue, then; they were just very, very convenient, since they allowed the authorities to enact trade rules that very effectively protected a burgeoning local industry from international rivalry. This kind of protectionism is not unique to China, nor is it necessarily a bad thing, but the government’s willingness to wield this weapon in its economic battles around the media industries is a major concern for any new player in the marketplace.
This is far from being the only protectionist measure with which console manufacturers – Microsoft included – must contend. The second thing that’s notable about the narrative is that Microsoft is to launch the Xbox One in China not by itself, but in partnership with a local company, BesTV. This is not because of any particular desire to tap into local knowledge and experience, but rather because of legal requirement; doing business in China requires a local partner. Blizzard’s World of Warcraft, a rare foreign success story in the market, is presently operated in China by local firm NetEase, and as mentioned, Nintendo’s foray into the market also takes the form of a joint venture.
This naturally reduces both the profitability of any operation in China, since the overseas parent company simply receives a royalty payment rather than the full profits of its operations, and also reduces control over Chinese operations in a potentially frustrating manner. Blizzard notably ran into major difficulties with the launch of World of Warcraft expansion packs in China, with the nation’s censors objecting to large swathes of content; the launch of Wrath of the Lich King in particular seems to have been delayed far, far longer than the company would have wished as a consequence of switching Chinese partners (from The9 to NetEase) during the negotiation process with the authorities.
“None of this is to say that console success in China is impossible; merely that it is very, very unlikely”
Such problems are, of course, surmountable, especially if the pot of gold at the end of the rainbow is big enough. Certainly, there is some audience for consoles in China; grey imports from Hong Kong are openly sold in Chinese stores, albeit at pretty high prices which are only appealing to the most devoted of enthusiasts. However, Chinese gamers have mostly grown up without consoles and are used to mobiles and PCs as their gaming platforms, so the level of demand is questionable. Moreover, those platforms are where Chinese game developers publish their work, tailor-made for their own audience. Software in a market like this is chicken-and-egg; no console platform will succeed without software that appeals to the local audience, yet no local developer will work on a new platform without a decent installed base. Microsoft’s dollars could intervene to help, but that would require a very major financial commitment to a market in which success is a very, very slim possibility.
There is, of course, an appetite for content from overseas within China, which could help to drive uptake of consoles like the Xbox One. In this, however, the hand of China’s censors remains a serious issue. Although the Shanghai Free Trade Zone regulations finally permit the sale of consoles, they do not free platform holders and publishers from the onerous requirement of passing their software under the watchful eye of the censorious authorities before release. In the past, the changes to software demanded by those authorities have been very significant; even small graphical elements which are seen as running counter to traditional Chinese culture in some manner are forbidden in many cases (although they pass without mention in locally developed software), while any game with an overtly political message will simply never be released. You may not think that terribly many games have an overtly political message, but then again, you’re (presumably) not a member of any of China’s censorship authorities, who have a penchant for seeing threats to the nation’s civil order around every corner.
None of this is to say that console success in China is impossible; merely that it is very, very unlikely. I haven’t even mentioned the issue of piracy, which remains rampant in the country, and means that many game consumers have become accustomed to paying incredibly low prices for software, while games companies have largely switched to business models like subscriptions and F2P for their wares. This is just another problem sitting in Microsoft’s way; adding pricing and business model to a list which already contains major cultural, legal and censorship hurdles.
It’s easy to see, I think, why Microsoft is alone in taking advantage of the newly liberalised Shanghai Free Trade Zone; why Sony is holding back from further engagement with the nation (although it does a fine trade in Hong Kong) while Nintendo is keeping its engagement low-level through its existing iQue partnership. Both firms actually have major business interests in China; like Microsoft, they manufacture their consoles there. Yet neither is keen to throw good money after bad in the hostile and difficult Chinese market. No doubt, they will watch Microsoft’s experiment carefully – they would be foolish not to – but nobody should hold out serious hope for consoles in China. There are new markets to be tapped all around the world for videogames and consoles, but for all its growing wealth and success, China is about as far from being low-hanging fruit as you can imagine.
Last week, Virtuix announced a $3 million round of seed funding to complete its flagship product, the Omni virtual reality treadmill. While a far cry from Facebook’s $2 billion acquisition of Oculus, the Virtuix investment is yet another indication that investors believe in the potential of virtual reality.
Speaking with GamesIndustry International after the funding was announced, Virtuix CEO Jan Goetgeluk stopped short of crediting the Facebook deal with drumming up investor interest, but nevertheless called it an exciting endorsement for the entire VR field.
“Haptics are fairly complicated; it’s very difficult to make it work in a way that’s affordable for consumers and accessible for a mass market.”
“It certainly validated the message that we’ve been presenting to investors when fundraising, which is that VR is set to become a mass market new medium, with applications that stretch way beyond gaming,” Goetgeluk said. “Social activites, health care, fitness, you name it…VR is not set to stay a niche; it’s set to be a mainstream platform.”
Facebook isn’t the only company trying to turn VR into a mainstream platform. Last month’s Game Developers Conference was a coming out party for a number of VR headsets, including Sony’s Project Morpheus.
“I think investors now believe and see that given all these headsets coming to market, and given how compelling the experience is–not just for the headsets but the Omni–the bottom line is it’s an excellent experience, and it’s here to stay,” Goetgeluk said. “It’s not a fad. It’s not just a fun thing to try out. It’s an incredible experience and a new medium that will impact various aspects of our daily lives. And investors that tried the experience were convinced, and that’s why they invested.”
Even with the rush of companies looking to stake their claim in the VR field, the preponderance of activity seems to be in the headset market, with fewer companies looking to tackle the haptic part of the VR equation. Goetgeluk suggested two main reasons for that.
“One, the visual aspect of VR is certainly a crucial part,” he said. “If there’s no visual element of the VR system, then there’s no virtual reality at all. It’s also a problem that is easier to solve than haptics. Haptics are fairly complicated; it’s very difficult to make it work in a way that’s affordable for consumers and accessible for a mass market. The visual problem is an easier nut to crack, and certainly with immediate applications.”
Of course, the Omni only addresses one element of that haptic problem. But when asked if Virtuix had plans to tackle other elements to complete the illusion of VR for players, Goetgeluk said the company had more pressing concerns in simply getting Omni to market.
“That’s our focus right now; we don’t have the resources to do much beyond that at this point,” Goetgeluk said, adding, “The pressure is on to deliver a top quality product in a timely manner.”
The Omni is set for a release this summer, which poses a potential problem. Virtuix is creating a $500 VR peripheral that is largely reliant on the user having a VR headset as well, but the two biggest names in the field, Sony and Oculus, have yet to even announce commercial release windows for their VR headsets. The idea of being a product “ahead of its time” doesn’t really bother Goetgeluk.
“In tech, you’re either early or you’re late. So we’re certainly early, but that’s not necessarily a bad place to be,” he said.
Given Virtuix’s production capacities, showing up to the party early might not be the worst course of action. Virtuix has already sold 3,000 Omni treadmills, and new preorders placed through the company’s site aren’t estimated to ship until September. The company might not mind arriving a little earlier than the VR headsets, but it definitely needs them to arrive.
“We’re a VR product and if VR doesn’t take off, then we’ll stay a niche product, and that’s not the intention.”
“We’re a VR product and if VR doesn’t take off, then we’ll stay a niche product, and that’s not the intention,” Goetgeluk said. “I think VR is an incredible experience, the technology is here, and I think VR is here to stay this time.”
That’s not the only potential concern critics of the Omni may have. When asked about the difficulty for players to find room to keep a VR treadmill next to their PCs, Goetgeluk said he expects people to be surprised by the final production version of the Omni. The company has made a number of changes to the hardware from what they’ve been carting along to trade shows.
“That’s our prototype, which is made of wood and certainly looks a bit big and clunky,” Goetgeluk said. “The final product will be a tad smaller and certainly sleeker looking, smaller than a regular treadmill, and also easy to disassemble and store away. It’s not a small product, but I don’t think size is necessarily an issue.”
Additionally, Goetgeluk brushed aside concerns about developer support for the device. It acts as a plug-and-play substitute for a gamepad or keyboard, and developers who choose to actively support the Omni can access more advanced features, such as mapping travel speed in the game with the player’s speed on the Omni, or to decouple the walking direction from the looking direction. Virtuix is also creating its own demo, TRAVR, to showcase how the Omni could be integrated with traditional first-person shooter and horror games.
Finally, Virtuix needs to figure out how to get people to experience gaming with Omni first-hand. Appearances at trade shows have been a good first step and one Virtuix will continue pursuing, but the company is also considering placing Omni demos in certain retail stores or malls.
“We certainly want to make it as feasible as possible for people to try out, because it’s a device where when you try it, that’s when you realize its potential,” Goetgeluk said.
ARM announced its first 64-bit cores a while ago and SoC makers have already rolled out several 64-bit designs. However, apart from Apple nobody has consumer oriented 64-bit ARM devices on the market just yet. They are slowly starting to show up and ARM says the transition to 64-bit parts is accelerating. However, the first wave of 64-bit ARM parts is not going after the high-end market.
Is 64-bit support on entry-level SoCs just a gimmick?
This trend raises a rather obvious question – are low end ARMv8 parts just a marketing gimmick, or do they really offer a significant performance gain? There is no straight answer at this point. It will depend on Google and chipmakers themselves, as well as phonemakers.
Qualcomm announced its first 64-bit part late last year. The Snapdragon 410 won’t turn many heads. It is going after $150 phones and it is based on Cortex A53 cores. It also has LTE, which makes it rather interesting.
MediaTek is taking a similar approach. Its quad-core MT6732 and octa-core MT6752 parts are Cortex A53 designs, too. Both sport LTE connectivity.
Qualcomm and MediaTek appear to be going after the same market – $100 to $150 phones with LTE and quad-core 64-bit stickers on the box. Marketers should like the idea, as they’re getting a few good buzzwords for entry-level gear.
However, we still don’t know much about their real-world performance. Don’t expect anything spectacular. The Cortex A53 is basically the 64-bit successor to the frugal Cortex A7. The A53 has a bit more cache, 40-bit physical addresses and it ends up a bit faster than the A7, but not by much. ARM says the A7 delivers 1.9DMIPS/MHz per core, while the A53 churns out 2.3DMIPS/MHz. That puts it in the ballpark of the good old Cortex A9. The first consumer oriented quad-core Cortex A9 part was Nvidia’s Tegra 3, so in theory a Cortex A53 quad-core could be as fast as a Tegra 3 clock-for-clock, but at 28nm we should see somewhat higher clocks, along with better graphics.
That’s not bad for $100 to $150 devices. LTE support is just the icing on the cake. Keep in mind that the Cortex A7 is ARM’s most efficient 32-bit core, hence we expect nothing less from the Cortex A53.
The Cortex A57 conundrum
Speaking to CNET’s Brooke Crothers, ARM executive vice president of corporate strategy Tom Lantzsch said the company was surprised by strong demand for 64-bit designs.
“Certainly, we’ve had big uptick in demand for mobile 64-bit products. We’ve seen this with our [Cortex] A53, a high-performance 64-bit mobile processor,” Lantzch told CNET.
He said ARM has been surprised by the pace of 64-bit adoption, with mobile parts coming from Qualcomm, MediaTek and Marvell. He said he hopes to see 64-bit phones by Christmas, although we suspect the first entry-level products will appear much sooner.
Lantzsch points out that even 32-bit code will run more efficiently on 64-bit ARMv8 parts. As software support improves, the performance gains will become more evident.
But where does this leave the Cortex A57? It is supposed to replace the Cortex A15, which had a few teething problems. Like the A15 it is a relatively big core. The A15 was simply too big and impractical on the 32nm node. On 28nm it’s better, but not perfect. It is still a huge core and its market success has been limited.
As a result, it’s highly unlikely that we will see any 28nm Cortex A57 parts. Qualcomm’s upcoming Snapdragon 810 is the first consumer oriented A57 SoC. It is a 20nm design and it is coming later this year, just in time for Christmas as ARM puts it. However, although the Snapdragon 810 will be ready by the end of the year, the first phones based on the new chip are expected to ship in early 2015.
While we will be able to buy 64-bit Android (and possibly Windows Phone) devices before Christmas, most if not all of them will be based on the A53. That’s not necessarily a bad thing. Consumers won’t have to spend $500 to get a 64-bit ARM device, so the user base could start growing long before high-end parts start shipping, thus forcing developers and Google to speed up 64-bit development.
If rumours are to be believed, Google is doing just that and it is not shying away from small 64-bit cores. The search giant is reportedly developing a $100 Nexus phone for emerging markets. It is said to be based on MediaTek’s MT6732 clocked at 1.5GHz. Sounds interesting, provided the rumour turns out to be true.