Washington D.C. intends to become the home of eSports in the United States, with a strategy that includes sponsorship of the NRG Esports team and the construction of a $65 million stadium.
The city’s plans, which were revealed to Mashable, will be executed by Events D.C., the District of Columbia’s convention and sports authority. The deal with NRG Esports is among the first instances of a city sponsoring a pro gaming organisation, and Washington D.C. will now have its logo and branding on NRG teams’ uniforms, livestreams and websites.
NRG, which has teams competing in Overwatch, Counter-Strike: GO, Hearthstone and Rocket League, has roots in the world of traditional sports. It was founded by Andy Miller and Mark Mastrov, the co-owners of the NBA’s Sacramento Kings, and counts the basketball player Shaquille O’Neal and the baseball stars Alex Rodriguez and Jimmy Rollins among its investors.
“This is just another prong in our strategic approach to continue to make D.C. a great place to live and work and play,” Events D.C. chairman Max Brown told Mashable, highlighting the number of students attending the city’s many universities.
“There are lots of younger kids who are here and are coming here every year through our universities, so we think it makes a lot of sense for us as a city to plant a flag [for eSports], and ultimately be the capital of eSports like we’re the capital of the United States.”
There are other “prongs” to the city’s strategy, the most notable being the construction of a new stadium. The arena will be used by the WNBA team the Washington Mystics, as well as other events, but it is being built “with eSports in mind.”
“A $65 million 4,200-seat, state-of-the-art arena,” Brown added. “[It will] come online in late-2018, early-2019. Fully tailored and wired for esports.”
According to details provided over at EA’s Origin site, those looking to play the new Mass Effect game will need at least an Intel Core i5-3570 or AMD FX-6350 CPU, 8GB of RAM and Nvidia Geforce GTX 660 2GB or AMD Radeon HD 7850 2GB graphics card.
The recommended system requirements rise up to an Intel Core i7-4790 or AMD FX-8350 CPU, 16GB of RAM and either an Nvidia GTX 1060 3GB or AMD RX 480 4GB graphics card.
Both minimum and recommended system requirements include at least 55GB of storage space as well as a 64-bit version of Windows 7, Windows 8.1 or Windows 10 OS.
The official release for the game is set for March 21st in the US and March 23rd in Europe and it will be coming to PC, Playstation 4 and Xbox One. Those with EA Access and Origin Access should get the game five days earlier.
The traditional sports ecosystem is dominated by three models of organisation. The most decentralised sports, like the PGA Tour or NASCAR, consist of largely independently organised competitions, which are sanctioned and governed by an administrative body and are open to any qualifying athlete. From there, we have typical leagues like the NBA or Premiership, which have a set number of recurring teams and players, and are extensively managed by a league front office that’s owned by each team.
eSports are quite different. If you choose to race without NASCAR or play basketball without the NBA, there’s nothing – and no official body – that can prevent you from replicating the experience. No one ‘owns’ racing or basketball, but someone does own Overwatch, and if you want to play you essentially have to go through that company. If you wanted to create your own eSports league, your ability to market or represent it would be entirely dependent on the legal team of the game’s publisher. Furthermore, the core experience is fully controlled by that publisher.
“No one ‘owns’ racing or basketball, but someone does own Overwatch, and if you want to play you essentially have to go through that company”
Leagues that are operated or endorsed by publishers can do unique things – e.g. item drops, exclusive/first-release capabilities, bundled original content – and offer unique monetisation opportunities. Three months before The International, the annual world championship for Dota 2, Valve sells interactive in-game items that directly contribute to the tournament prize pool. This model has been so successful that, in 2016, the prize pool reached $19.17 million.
Most tier-one publishers also handicap the data streams that the public can leverage. Whereas in traditional sports there are multiple providers of a firehose of sports data, game publishers offer barebones APIs that allow access to little more than character information and select match data. Valve offers an open API but, as events this year have demonstrated, it can shut off access and change policy at any time. On the platform side, Twitch is miles ahead of its competitors in terms of creating an external ecosystem thanks to its two year head-start and passionate developer community, but it maintains an ever more precarious balance between build vs. buy.
Because of these walled gardens, the investible opportunities within eSports often end up being features not products, which set them and their investors up for more of an acquihire than a Twitch-esque exit. There’s a strong argument to be made to publishers that working with third-party developers will lead to a stronger overall bottom line, foster innovation and provide defensibility.
It’s no secret that being a top publisher is a lucrative business. Activision reported $1.57 billion in revenue for Q2 of 2016 and EA $1.271 billion. It’s rumoured that Valve’s 2015 revenues reached $3.5 billion in 2015, and Riot Games’ over $1.6 billion. It’s not hard to see why partnerships with third parties and external API infrastructure aren’t a priority with so much money flowing, but that’s shortsighted. As publishers start thinking about how to monetise beyond game licenses and IAP, every moment not spent developing the ecosystem is a wasted one.
This isn’t unparalleled, and we can see examples of where large platforms in other verticals have made the decision to invest in their future, often early on in their company lifecycle. Salesforce, an enterprise software company, has a market cap of $50 billion. A report last year by IDC put the opportunity front and center: the AppExchange currently generates 2.8x the revenue of Salesforce itself and is expected to grow to 3.7x the size of Salesforce.
“As publishers start thinking about how to monetise beyond game licenses and IAP, every moment not spent developing the ecosystem is a wasted one”
Slack, the enterprise collaboration tool darling, also gets it. Even before raising money in April 2016, at a $3.8 billion valuation and boasting over 1.25 million paying users, they announced the Slack fund in December 2015 - an $80 million investment into supporting new integrations. Slack and Salesforce could have gone the closed route and developed these integrations and products internally, but they understood that the immediate revenue trade-off was well worth the ability to focus on creating the best core product possible, in addition to leveraging minimal company resources.
Now to everyone’s favourite eSports comparison : traditional sports. During the height of the daily fantasy sports craze in 2014/15, the NBA entered a multi-year partnership with FanDuel that gave it an ownership stake. The NFL expanded its partnership with Providence Equity in 2013, investing $300 million to participate in, “media and technology deals where it believes the league could help play a strategic role.” And these are just a few examples. Partnering with and investing in new properties allows older, larger establishments to participate in the upside of nascent industries quickly and cheaply.
Publishers are thinking about the shelf-life of games. The NFL and NBA will both be around in 25 years, but what about League of Legends or Counter-Strike? Opening up the ecosystem not only benefits players and fans by allowing them an outlet to interact with their favorite IPs, but ultimately enhances the core value of those IPs and gives publishers an opportunity for additional exposure through revenue share, API fees and strategic investments.
In addition to commercial benefits, let’s look at network effects. Valve is the publisher of both Counter-Strike: Global Offensive (25 million+ copies sold, 8.2 million+ players in the last two weeks), and Dota 2 (87 million+ times downloaded, 11 million+ active players in the last two weeks.) While the titles have richer histories than virtually any other competitive esport, Valve’s open API, developer tools and hands-off approach has contributed to their sustained success and status as two of the top eSports titles.
ELeague, FaceIt Esports Championship Series and Gfinity, ESL One and IEM. These streams of revenue have contributed to a high demand for professional CS:GO players, leading to lucrative contracts and opportunities.
3: The most lucrative has been the in-game skins economy, which allows players to purchase crates that contain different cosmetic versions of CS:GO weapons or Dota 2 items. During major tournaments, Valve has offered exclusive stickers that generate up to high six-figures for qualified teams. Valve has also allowed free reign on opening up use cases within this skins economy, which led to wagering, gambling and marketplaces (Bloomberg estimated yearly transaction volume to be >$7 billion.) Variations of this model have since been followed very conservatively by multiple franchises, including Call of Duty, Halo, H1Z1 and Overwatch.
On the platform side, Twitch’s dominance in livestreaming can largely be credited to going all-in on eSports first, but Twitch also has numerous native or platform exclusive features for its users. Diving deeper, this experience is powered by a blend of features that were built in-house or created by third parties. Examples include:
Bits, preceded by Streamlabs and StreamTip: direct donations from viewers are one of the foundations of a streamer’s income.
Clips, preceded by Oddshot, Plays.tv and Forge: allows viewers and creators to efficiently capture highlights and share to different social media channels.
Subscriptions / Partner Program and 3rd-party services (Revlo, Gamewisp and Curse/Discord integrations): subscriptions are another big source of income for streamers, and the third-party services all add further value to a sub and reduce churn.
TwitchPlays: what started out as a fun social experiment (TwitchPlaysPokemon) is now its own category to interact with potential customers for publishers.
Chatbots (Moobot, Nightbot and Xanbot): automated assistants that help moderate chat to prevent spamming and inappropriate behaviour.
Stream+ currency: Twitch’s new currency announced at TwitchCon 2016, which will allow developers to integrate monetisation options directly into games.
Facebook Live has launched to much fanfare, and given the massive distribution channel it will always be a huge threat. However, until it can get to feature parity Facebook Live will need to rely on traditional media partnerships or viral hits to create consistent content. These types of partnerships don’t scale when we’re talking about the individual streamers and professional players that have played a large part in getting Twitch to 100m+ MAUs, although the signing of G2 and Heroes of the Dorm is a good first step. YouTube Gaming is farther along and is doing a great job of starting to launch some analogous features.
How, then, should publishers look to partner with entrepreneurs and third parties? I’d like to see publishers create a vehicle, individually or collectively, in the model of Disney Accelerator, to offer mentorship, funding and support to kick-start the next generation of eSports businesses. Publishers should be developing their games as platforms, not individual entities - tons of data are being generated and archived and there is a treasure trove of use cases for them.
I’m confident that we’re slowly moving in the right direction. One day we’ll see a truly open ecosystem with publishers and third parties living in harmony.
Games generated $91 billion worldwide in 2016, according to a report from beancounters at SuperData Research who have been adding up some numbers on Christmas Party napkins.
Most of the cash was made in the mobile game segment some $41 billion (up 18 percent), followed by $26 billion for retail games and $19 billion for free-to-play online games.
Beancountrs at SuperData said that the new categories such as virtual reality, esports, and gaming video content were small in size, but they are growing fast and holding promise for next year. Hardware firms like Sony and HTC to take the lead in 2017. Still,
VR grew to $2.7 billion in 2016. Gaming video reached $4.4 billion, up 34 percent.
Mobile gaming was driven by Pokémon Go and Clash Royale. The mobile games market has started to mature and now more closely resembles traditional games publishing, requiring ever higher production values and marketing spend. Monster Strike was the top mobile game, with $1.3 billion in revenue.
The esports market generated $892 million (up 19 percent) in revenue. A string of investments in pursuit of connecting to a new generation of media consumers has built the segment’s momentum, as major publishers like Activision, Riot Games, and EA are exploring new revenue streams for selling media rights, according to the report.
Consumers increasingly download games directly to their consoles, spending $6.6 billion on digital downloads in 2016 which has helped improve margins.
PC gaming continues to do well, earning $34 billion (up 6.7 percent) and driven largely by free-to-play online titles and downloadable games. League of Legends together with newcomers like Overwatch are driving the growth in PC games.
PC gamers also saw a big improvement with the release of a new generation of graphics cards.
Last week, over three and a half years after its initial release, Digital Extremes’ free-to-play shooter Warframe broke its concurrent player record with expansion The War Within, hitting Steam’s top three on the weekend of release, recording a maximum of 68,530 players online at once and logging an incredible 1.2 million hours of playtime in a single day. Across PC and the more recent Xbox One and PS4 versions of the game, over 1 million of the 26 million players who have registered since the game’s 2013 launch had played by November’s halfway point, beating all previous monthly unique records with a fortnight to go.
Those are impressive numbers, especially for a game at a point in its lifecycle where it could certainly be forgiven for slowing down – and it’s no anomalous bump. Instead, a quick glance at SteamSpy’s graphs for the game show a steadily increasing number of players for the game, as well as a very healthy schedule of updates, patches and big content drops. Rather than leeching users to other games as it ages, Warframe is going from strength to strength.
Meridith Braun, VP Publishing at Digital Extremes, says that it’s been a tight compromise of strategies – resulting in a success which far exceeds the expectations of a game which was initially seen as something of a make or break exercise. Key to that, she says, has been a careful acquisition process, but not one which has come at the cost of long term curation and engagement of existing players.
“It’s definitely a balancing act between catering development to new players and veterans of the game,” Braun explains, “but after 3.5 years, the core of the game has grown so much that for new players there are literally hundreds of hours of missions, quests, customising and exploring game systems before they catch up to where veteran players are.
“Whilst many of our updates focus on adding new content and improving game systems that our veterans are most interested in, earlier this year we took a fresh look at the new player experience and released an update that refined some of the tutorials, updated the UI, tied quests together to help the lore flow better, and revamped the market for easier functionality. It was not our most played update, like The Second Dream or The War Within, but it served a long-tail purpose of making Warframe more inviting and easier to understand for new players. It helps them navigate to the really intricate depths of the game with the intent to retain them long-term.”
“We spend very little compared to other free-to-play games that focus a large amount of their budgets on acquisition”
Polishing the tip of the spear is a tried and tested acquisition technique, but it’s not usually a way of sidestepping the vast costs which many companies associate with gathering new players. Warframe’s marketing, though, was forged in a crucible of necessity, at a time when budgets were almost non-existent. As a result, the studio has learned to maximise the gain from channels which deliver users without draining revenue, although the financial success of the game has also enabled them to operate in areas previously well beyond their price range.
“We spend very little compared to other free-to-play games that focus a large amount of their budgets on acquisition,” says Braun. “Warframe was a passion project – the studio’s ‘Hail Mary’ pass, if you will. There was barely budget to buy an account server for the game, let alone to spend on marketing at the time. We turned to viral everything to get the word out: live streaming, social media, Reddit, forums, PR, knocking on partner’s doors for promotional opportunities. Once we launched in open beta and more players got a taste of the game, it was clear we had something unique on our hands. Since then our acquisition strategy has focused primarily on our update schedule and community involvement.
“We discovered early on that frequent significant updates – updates that added dramatic gameplay changes, enhancements and content, and transparency with our community, brought in droves of new players. Now that we have more wiggle room in our coffers, we work the usual acquisition channels – online CPA-focused advertising, social media, streaming, etc. – but nothing beats age old word-of-mouth between players telling their friends to join in on a game that only gets better and better over time.”
What’s perhaps even more unusual about the current high that Warframe finds itself riding upon is that it comes at a time when the AAA shooter market is crowded with a wide spread of very high quality competitors – many of which are under-performing at retail. The game’s peak numbers come at a point when there are brand new Battlefield and Call of Duty games at market, as well as extremely well reviewed releases like the Titanfall and Dishonored sequels.
“Warframe was a passion project – the studio’s ‘Hail Mary’ pass, if you will. There was barely budget to buy an account server for the game, let alone to spend on marketing at the time”
Braun very much sees free-to-play as playing a significant part in the difficulties which Warframe’s boxed rivals are experiencing.
“I think we’re seeing the F2P model disrupting the standard retail model for larger budget games,” she says. “The continued rise of AAA-quality, free-to-play games coming to market – and their ability to fill the long gaps between large IP releases – is taking a bite out of the big game market. Just this year it was great to see F2P titles like Paragon and Paladins launch to great fanfare and numbers, I’m sure they both had some effect on the big budget FPS games alongside Warframe.
“It’s hard to compete with free. Sure, we want people to eventually pay for the entertainment they’re receiving – but when you have the ability to try out a game for free for as long as you want, a game with equally great production value, and then decide if it’s a game that deserves your money, that’s pretty stiff competition. The larger games also aren’t built to be as agile and reactive to the market after they ship. Free games at their core are made to continually update and improve, offering incredible value and entertainment over a longer period of time.”
Blizzard probably has a few things to say about the notion that free-to-play games offer the best long-term player engagement and responsive improvement, and Braun freely admits that games like Overwatch share that strategy of player curation. Warframe, she says, also offers something else, though. Because it wasn’t a Blizzard game, born almost fully-fledged and slickly functional, early adopters have had the joy of watching it smooth out its rougher edges.
“When Warframe first launched it was a shell of the size of game it has become, and our players have stayed with our growth throughout its life-span. They enjoy taking the ride with us, being a part of the evolution, experiencing game development from the front seat. If you’re not thinking about long-term engagement and game service at the heart of your game design as a good part of the future of gaming, you may have yet to come to grips with the dwindling projections of one-and-done games.”
Whether it is the return of X-Files and Twin Peaks, or Shenmue and Pokémon, bringing back classic IP has become a safe way to secure headlines and generate copious amounts of hype.
Yet it’s not just brands that are tapping into our love for the familiar. Take this summer’s smash Netflix show Stranger Things, which plays homage to both ’80s Spielberg and classic horror. Or indeed the millions of dollars that the likes of Yooka-Laylee and Bloodstained have raised on Kickstarter – the former riffing on 1990s platformers like Banjo-Kazooie (and made by many of the same team members), with the latter acting as the spiritual successor to Castlevania (from former producer Koji Igarashi).
Ron Gilbert is another person looking to recreate those ’90s feelings. The adventure game maker behind the likes of Maniac Mansion and Monkey Island is creating a new one called Thimbleweed Park, a point-and-click adventure with retro 8-bit visuals that raised $626,250 via Kickstarter.
“I think a lot of the nostalgia that is around right now comes from a desire to go back to a simpler time,” suggest Gilbert, speaking to Gamesindustry.biz shortly after appearing at Melbourne International Games Week in Australia.
“Back then games were a little bit simpler and seeping with charm. A lot of people that love the 8-bit games today might not have even been alive back then, but they still identify with that era because it was so interesting and charming.
“It is really one of the reasons we did Thimbleweed Park. We were looking at and asking why was Monkey Island and Maniac Mansion so appealing? What is it about modern adventure games, although they’re interesting and have great stories, that means they lack the charm those games from that era had? Can we recreate that old feeling today?”
Point-and-click adventure games are enjoying a small renaissance, thanks in part to the rise of indie developers – as indeed are platformers, Metroidvania games and a whole host of other genres long thought dead.
“I don’t know exactly why adventure games faded away,” Gilbert continues.
“I do feel that somewhere around the mid-90s, point-and-click adventures sort of ran off the rails. A lot of really – for want of a better word – stupid puzzles were being made. I think what happened was that people looked at this, and went: ‘Wait a minute, you’re asking me to do completely ridiculous and random things to get through these games.’ Some players just checked out at that point.
“You also had games like Doom that came along and were first person and were more action orientated, and those games attracted a very different audience into games. So I don’t know if adventure games necessarily fell, but they certainly didn’t grow with the rest of the industry. But now we are seeing this place where we are attracting a much broader audience, and a little bit of that is due to mobile games being so ubiquitous. There are just so many more people playing games these days, and with adventure games being very story and character focused, they are able to attract that broader audience.”
He continues: “You have games that have always been niche markets. Now, because of digital distribution and the way the democratization of development tools is working, niche markets can be viable markets.”
Gilbert is enjoying the current state of indie development and the ability to make decent games with relatively small teams. It speaks to his days making titles in the ’80s and ’90s. Maniac Mansion was made with three people, Monkey Island had five full time members of staff, which increased to seven for its sequel.
Thimbleweed Park is also being made by just a handful of creators, with input from the game’s plentiful Kickstarter supporters. But this desire to go back to those early days is not just about how the visuals looked or how small the teams were, Gilbert also wants to head back to a period when developers didn’t take themselves quite so seriously.
“When we were making games back then, it was all kind of new,” Gilbert remembers. “We didn’t have anything to go from, so it was a more innocent time. Games today, although I love modern adventure games like Firewatch or Kentucky Route Zero, they are very deep and thoughtful. They require a lot from me as a player, or the viewer, because there are very interesting, deep messages that I am gleaming from this stuff. And that’s largely just the advancement of the art form. The games of the ’80s and early ’90s, they were just more innocent, and simple and therefore more charming.
“Adventure games have certainly improved. Visually, games like Firewatch are much more advanced. But I think they’ve advanced in some ways and they’ve actually de-evolved in others. I think they’re more advanced because they are trying to tell more meaningful stories, stories that are truly about something interesting or important.
“But in other ways, they haven’t moved forward. Games like Kentucky Route Zero… although I enjoyed that game quite a bit, I sort of jokingly call it the ‘press A to continue game’, because I didn’t feel like I was making a lot of choices. I was just kind of pressing the A button to get to the next piece of dialogue, and it was greatly written dialogue and it was a captivating world, which made it ok. In Firewatch, you are spending a lot of time walking around and exploring this world, and it is a very fascinating world and a very beautiful place, so I was utterly enthralled with it, but there’s not actually a lot to do. The old school adventure games really required you to work. It was a case of: ‘here is a load of puzzles and here is a bunch of story, and you have to solve all these puzzles, which should lead to uncovering the next part of the mystery’. The classic adventure games were more sophisticated in that sense.”
Like Yooka-Laylee with Banjo-Kazooie and Bloodstained with Castlevania, Thimbleweed Park is a game that could easily have had the words ‘Maniac Mansion’ or ‘Monkey Island’ plastered on the artwork. Gilbert does hope his new IP can be successful enough to become a series, but he also, quite publicly, wants to revisit those classic franchises that made his name. Both Maniac Mansion and Monkey Island were created at LucasArts, so the rights to them currently reside in the vaults somewhere at Disney’s HQ.
Disney has largely moved on from video games, and Gilbert has asked the media giant on Twitter to let him buy back the rights to his old franchises. To no avail, so far.
We ended our conversation by asking Gilbert if he had considered returning to Kickstarter to raise the funds he might need to acquire those 1990s brands.
“Buying the rights back for those games… it’s not a matter of money, it is a matter of Disney being willing to sell them,” Gilbert concludes. “If Disney came to me and said: ‘Hey, we’ll sell you Monkey Island’. I will go get the money. No amount of crowd-funding is going to make this happen, it’s just a case of Disney agreeing to sell them.
“I’ve not managed to talk to anyone at Disney who is high enough up the ladder to make that decision. I fear that the people who would make that decision have no idea what Monkey Island is.”
Call of Duty: Infinite Warfare was the No.1 boxed game in the UK this week, but Week One sales were down 48.4 percent compared with the same period for last year’s Black Ops III.
It’s the fiercest drop the franchise has suffered since it became one of the world’s most popular entertainment properties following the success of Call of Duty: Modern Warfare in 2007.
There was no PS3 or Xbox 360 version this year, however even just comparing the PS4 and Xbox One figures shows a sales drop of 43.6 percent.
Activision has changed its strategy a little with the series, and has put an increased emphasis on generating more revenue from its fans via DLC, special editions and microtransactions, as opposed to growing user numbers. Nevertheless, such a steep fall will come as a big disappointment to the firm and to UK retailers.
This was still the second biggest UK game launch of the year after FIFA 17. However, Call of Duty now finds itself playing catch-up with its biggest rival, Battlefield 1, which has already passed over half a million sales in the UK – the game has been on sale for two weeks longer.
It is important to note that all of these statistics do not factors in sales made via Steam, PSN, Xbox Live or EA Origin.
Call of Duty’s performance follows the disappointing launch of Titanfall 2. That EA game suffered a relatively mild 41 per cent week-on-week drop in its second week, but it is still selling well below what would have been expected for the IP.
It once again calls into question the logic of launching three huge first person shooter games within such close proximity.
There was one other new entry in the physical retail charts this week, Football Manager 2016 at No.6. The PC game almost certainly would have performed far better than this once you consider digital sales.
It wasn’t all bad news for Activision, Skylanders Imaginators has returned to the Top Ten following recent TV advertising, with sales rising 131 percent week-on-week.
All figures are courtesy of UK physical games tracker GfK and UKIE.
The second fiscal quarter is historically the quietest stretch for Electronic Arts, but the three months ended September 30 gave the publisher reason for optimism heading into the crucial holiday season. The company today released its second quarter results, beating its net income guidance and showing strong growth in its EA Sports Ultimate Team efforts.
“Q2 was an excellent quarter for Electronic Arts, led by breakthrough new EA Sports titles engaging players across console and mobile,” CEO Andrew Wilson said. “We are in an outstanding position for the quarter ahead, with two of the highest-rated games of this console generation in Battlefield 1 and Titanfall 2, global competitive gaming tournaments underway, and our first virtual reality experiences coming soon. Across all platforms, this holiday season will be a fantastic time to play.”
While Battlefield 1 and Titanfall 2 launched after the second quarter, EA used the report to tout the games’ early achievements. For Battlefield 1, the company said the total player base during the first week of release nearly doubled that of 2013’s Battlefield 4. As for Titanfall 2, which just launched last Friday, the company said dozens of press outlets had given review scores the equivalent of a 90 out of 100 or above.
As for the releases actually covered by EA’s second quarter results, they would include EA Sports mainstays Madden 17 and FIFA 17. The company said “20% more players were engaged” in FIFA 17 during its first week than in the first week of FIFA 16, but made no mention of specific performance for Madden. However, the EA Sports Ultimate Team game modes appear to be healthy, as EA said Ultimate Team’s net sales between the FIFA, Madden, and NHL series are up 15% year-over-year on a trailing 12-month basis.
For the second quarter, EA reported net revenues of $898 million, up 10% from last year, but short of the $915 million it had given as guidance. However, the company’s net loss for the quarter of $38 million was a significant improvement on the previous second quarter’s net loss of $140 million, and better than the projected $51 million net loss.
EA gave the early performance of FIFA 17 and the holiday slate of releases as reason enough to adjust its full-year expectations, with the company now expecting net revenue for the year ending March 31, 2017 to be $4.775 billion, up from $4.75 billion. Net income for the year is also projected to reach $848 million, compared to the previous guidance of $809 million.
Update: On the earnings call, EA CFO Blake Jorgensen addressed the early feedback on Battlefield 1 and Titanfall 2, noting that it’s too early to update any sales projections but that there’s “incredible excitement” around both and the company is “very optimistic” not just for this holiday season but for the longer term. Citing the fact that “quite a few players” were still playing Battlefield 4 years after it released, Jorgensen said he expects similar long-term interest in both titles. More generally, looking at EA’s business, Jorgensen is also encouraged by the opportunity that this generation’s consoles and the mid-cycle upgrades affords a big publisher like EA since the console installed base is already up 33% in the West compared to the previous generation, he said.
Interestingly, when asked about one of EA’s big upcoming titles, Mass Effect: Andromeda, Jorgensen effectively said that EA is not afraid to push the title back yet again (it was originally scheduled for 2016 but is now loosely slated for Q4, which ends next March). While that shouldn’t be read as a sign of trouble – Jorgensen said Mass Effect is “tracking extremely well” – it appears EA wants to be 100% sure that the game does not need any additional time before it commits more fully to a release date.
For game critics, loving Gears of War has been problematic since the very beginning. The rippling, testosterone drenched surface of Epic’s franchise served as a distraction from its abundant qualities. Looking back, it’s clear that the first game, released in 2006, provided the Xbox 360/PlayStation 3 era with the kind of moment that arguably still hasn’t arrived for the current generation. It was a new visual benchmark, its sense of weight and physical force was entirely distinct, and – a year before the launch of Call of Duty 4: Modern Warfare – it introduced the most credible new multiplayer experience since Halo. For those who based their professional integrity on distinguishing good games from bad, to notice and appreciate any of this was to miss the square-jaws and lumpen dialogue that comprised its story.
Looking back now, it’s clear that Gears of War was one of the defining series of the last console generation, influencing the creative direction of a large proportion of action games, driving the development community towards the Unreal Engine in droves, and with Horde mode in Gears of War 2, introducing a multiplayer concept that would be adopted by everything from Uncharted to Mass Effect. Even its marketing was influential: Gears of War’s popular “Mad World” trailer might well be the origin of action games using pained, acoustic covers of popular songs to score their artfully spliced carnage.
Despite this estimable legacy, however, the reviews of Gears of War 4 are shot through with an almost apologetic tone; a need to address the (arguably misplaced) perception of Gears as nothing more than a dude-bro power fantasy. Polygon, which awards the game an impressive 9 out of 10, spends a full third of its review on story and characterisation, opening with a declaration that, “Gears of War 4 is about home and family.”
“Gears of War as a series has dealt with accusations of hyper-masculine excess and an emphasis on gore and violence since it was first announced more than ten years ago. And it’s not that those observations are wrong, exactly – the characters have always been larger than life, the men in particular wide and heavy, and the violence of the series has always been extreme and enthusiastic. But beneath or even in parallel to that aspect, there’s always been consistent themes of friendship, of relationships of support and camaraderie that would seem corny in most other games but, somehow, work in Gears of War for a passionate fanbase.”
This protagonist of this reboot – which was developed by Microsoft’s The Coalition – is J. D. Fenix, the son of the original series’ central character, Marcus Fenix. Both father and son play pivotal roles in the game’s story, which Polygon describes as, “more focused, less sprawling story than the last few entries… A lot of time is spent exploring the strained relationship between Marcus and his son, with a lot of perspective on both sides of the equation.” The game’s various other key characters all have their own emotional journeys, largely relating to those themes of family and friendship. Gears of War 4’s story and character time works as well as it does for several reasons,” Polygon says. “The writing is matter-of-fact, avoiding over-stoicism and also overwrought fluff for the most part.”
If this is an area of weakness that The Coalition sought to address, then the abiding sense from the game’s reviews is that it has made a significant improvement. Whether that’s what the vast majority of Gears of War’s players care about is another matter, of course, but The Coalition hasn’t dropped the ball with the series’ core strengths, either. Polygon praises Gears of War 4 as “simply a joy to play,” and that sentiment echoes throughout the critical discourse.
The Daily Telegraph, which awards four stars, applauds the “muscular and endlessly gratifying thrill” of the gunplay, which carries the game through a slow start that serves, “as an elongated (re)introduction to that well-oiled Gears combat, flashing between cover-to-cover, switching between shotgun and rifle and familiarising yourself with the rattle of an emptying clip and the satisfaction of a well-timed, power-boosting active reload.” There are two new enemy races to fight in place of the original series’ Locust, and “weaponry…as exotic as the bestiary” with which to fight them. The need to switch between distinct weapons to fight equally distinct weapon types has always been central to Gears of War’s appeal. Here, again, The Coalition has honoured its heritage.
The same is true of Gears of War 4 as a spectacle. You won’t find a single review that doesn’t proclaim it to be one of the very best looking games on either Xbox One or PlayStation 4, and the same is true is the PC version. Indeed, PCGamesN calls it “a visual and technical tour de force,” maintaining “searing frame-rates on ‘ultra’ settings during some of the most mind-blowing – if cheesy – set-pieces I’ve seen in games, while also inviting me to appreciate the vivid redness of sycamore leaves lazily billowing on a cracked yellow wall in a medieval town square on some parallel-to-Earth planet.”
That last observation is crucial, because the beauty of Gears 4 goes beyond polygons, framerates and animations, and extends to art direction. “This certainly ain’t the grey-brown Gears of old,” PCGamesN says, before adding, “the diversity of what it shows is stunning… This is a far cry from the game that single-handedly started the stereotype of the ‘murky brown war shooter’, taking us instead on a historical tour of the vestiges of a world parallel to ours, yet still different enough to be mysterious; I almost felt guilty as I stomped around a scenic town as a giant mech, casually calling in airstrikes to smash my way through buildings. Almost.”
Words like “jawdropping,” “stunning,” “incredible” and “breathtaking” are scattered throughout this and many other reviews, to the point where the handful of scores that fall below 8 out of 10 demand close attention. For Jimquisition, the website started by ex-Destructoid personality Jim Sterling, “there’s nothing quite like Gears on the market. The sense of weight, the meaty impact of combat, the gruesomely satisfying way heads pop and bodies burst, any given Gears game has a baseline quality even at its worst thanks to its undeniably unique style.” However, Gears of War 4 relies on that “baseline quality” a little too much, The Coalition happy to make the improvements necessary to maintain relative standards but, “doing very little to rock the boat and making minor improvements and evolving where needed.”
“Such a tactic provides a game that’s decent just because it’s Gears of War, relying on the groundwork established across four older games to maintain the baseline. And that’s most certainly what Gears 4 is. A maintenance of the series as opposed to an injection of fresh blood.”
In a sense, then, the game’s most ardent supporters and most vocal critics are in full agreement: Gears of War 4 absolutely meets the standard set by its forebears, which is either something to praise or lament depending on the individual. One suspects, though, that in the absence of new Gears, the public will be more than happy to settle for more Gears.
Halfway through Sony’s announcement event for its new consoles – the redesigned, slimmer PS4 and the new, more powerful PS4 Pro – I found myself thinking about the optics of these events. I’ve seen the announcement events for every console since the PS2, and of them all, this was by far the most muted. The lack of bombast and braggadocio could speak to a quietly understated confidence, or to uncertainty, depending on where you’re standing. I suspect that the truth lies somewhere in the middle – Sony, achieving success it hasn’t seen since the PS2’s halcyon days, is certainly confident, but is also walking out onto uncertain territory with the PS4 Pro. The ground underfoot is no longer familiar.
The slim PS4, of course – perhaps the worst-kept secret in the history of the industry, given the appearance of functioning models on auction websites prior to the announcement – is nothing unexpected. Three years into the PS4’s lifespan, a slimmed down redesign was inevitable; it joins the (arguably rather more attractive) Xbox One S on the shelves as a sleeker model whose launch is somewhat overshadowed by impending obsolescence. Xbox One S, at least, has a year to run before the hugely more powerful Scorpio appears on the market. The new PS4 suffered the ignominy of being quickly announced and forgotten just moments before the unveiling of PS4 Pro, the device destined to replace it.
PS4 Pro, though, is a curious beast. It’ll run you $100 more than the slim PS4, it plays the same games and connects to the same online services. Sony has bent over backwards to avoid fragmenting their playerbase, and in theory, PS4 Pro is really designed only for the small minority of consumers with 4K displays in their living rooms. Yet the company must know the psychology of its consumers; it must know that for a large proportion of them, playing a game on a regular PS4 in the knowledge that an upgrade would make it that little bit sharper, that little bit smoother, is like Chinese water torture. That will only be exacerbated by the “Pro” moniker; so much of the market will feel an involuntary twitch of consumer desire at the very notion of their existing hardware being “amateur” or, god help us all, “noob”.
Ultimately, though, Sony’s cautious approach seems to be pitched just right. Those who will find themselves discombobulated by the notion of a needlessly dropped frame or a disappointingly undetailed hair strand, or quietly fuming at being branded a non-Pro, are precisely the audience expected to upgrade anyway. The benefits of PS4 Pro will be sufficient to keep them satisfied; while for pretty much everyone else, for the enormous audience of more casual consumers that Sony must access in the coming years in order to maintain the PS4’s sales trajectory, the benefits of the Pro seem minor enough not to bother with. The stroke of genius, perhaps, is that every upgrading gamer will release a second-hand PS4 into the market – handed off to a younger sibling or cousin, perhaps, or sold to a late upgrader from the last generation. That ought to do wonders to kick-start the PS4’s demographic expansion.
That’s not an easy balance to strike, and while it feels like it’s been skilfully done, only time and market data will tell. Sony enters Winter 2016 in a position of almost unprecedented strength; Nintendo’s NX won’t launch until next spring (and nobody really knows what it is), while Microsoft’s lovely Xbox One S is overshadowed by the plan to entirely outclass it with Scorpio next year. Both PS4 and PS4 Pro will do great guns this year (while PSVR, about which more in a moment, will undoubtedly be supply constrained). That’s not the real test; the test is how this line-up can fare against 2017’s launches, NX and Scorpio. Sony’s cards are now on the table for the next couple of years of the console war.
The other test, of course, is how this evolves. Much has been made of PS4 Pro representing the end of the console model; a final nail in the coffin of the five, seven or even ten year hardware cycle which has defined game consoles since the 1980s. Incremental updates like the PS4 Pro, maintaining compatibility and continuity while keeping pace with hardware advancements, are the future.
Well, perhaps they’re part of the future. Scorpio, with its dramatic upgrade over the Xbox One – so dramatic that the notion of Xbox One remaining fully capable of playing Scorpio titles seems ridiculous – suggests a somewhat different future. Equally, the muted nature of this week’s launch is suggestive of somewhat different thinking. Sony didn’t want to come out all guns blazing, shouting in triumph about its new hardware, because it cannot afford to alienate the 40 million existing owners of PS4 by implying that their consoles are obsolete. That’s a radical difference from console launches of old precisely because the whole purpose of those launches was to declare everything which came before obsolete. “Here, here is the new thing! All singing, all dancing, making the singing and dancing your existing console is capable of look merely like painful hopping and wheezing! Buy the new thing!” You can’t do that with an incremental upgrade; you can’t alienate your existing market in that way. Even smartphone makers have more freedom in their messaging, knowing that their hardware is expected to run on an 18 to 24 month upgrade cycle; consoles, though, you expect to remain “current” for four years, five years or more.
Incremental upgrades, then, lock us to a much more muted kind of message about new hardware. Does anyone really believe, though, that there’s no PS5 in the works? No grand, sweeping upgrade, that will be unveiled with bombast, and fireworks, and promises of walking on water and improbable feats of catering involving bread and fish? Of course that’s in the works. If PS4 Pro points us at something, it’s at the possibility of compatibility across generations in the very broad sense – perhaps, at last, we have entered a generation of consoles whose games will remain playable pretty much forever, or at least for as long as the capricious DRM gods smile upon us. The reverse, however, cannot remain true forever. Console generations will continue to roll past; it’s just that now, perhaps, there will be more mezzanines and landings between the floors.
Notably absent from Sony’s quiet little event was PlayStation VR. Oh, there was a logo, and there were a few words said, but you’d hardly imagine that this was a massive product launch that’s happening in just a few months’ time. Perhaps that’s because the aspect of PS4 Pro Sony is most anxious about is what impact it’s going to have on PSVR, and vice versa. Ever since the first leaks about PS4 Neo, as then was, hit the wild, there’s been a widespread assumption that part of the raison d’être for the new hardware was to drive PSVR headsets – with the existing PS4 simply being underpowered as a VR device.
If that’s not the case, Sony could have done a better job of pointing it out. Throwaway comments about the PS4 Pro yielding better frame rates for VR software sit uncomfortably with the company’s earlier pronouncements about 120Hz rendering for PSVR. Everything we’ve seen and learned about VR thus far suggests that this tech is all about framerate; if you can’t hit a consistent, high frame rate, users start to get severe motion sickness. If it’s the case that PS4 can hit those frame rates consistently, but PS4 Pro allows more visual finesse at the same frame rate, that’s great. If, on the other hand, PS4 is struggling with frame rate and PS4 Pro smoothes things out, that’s a big problem. PSVR cannot afford to be a poor experience on the existing PS4 installed base; if it is to be a success, it needs to work superbly on the 40 million PS4s already in the wild, not just on the fraction of the installed base which will be PS4 Pro.
Perhaps it does. Certainly, the demos of PSVR to date – all presumably running on PS4 standard hardware – have been fine, for the most part. Again, though, the optics are problematic; if you’re launching a VR headset within weeks of launching more powerful hardware, people are going to assume, not unreasonably, that they’re meant to complement each other. If that translates into users of the headset on stock PS4s getting physically ill where users on PS4 Pro do not, that’s a very big problem – and if that’s absolutely not the case, and there are procedures in place to prevent it, Sony needs to be discussing those things candidly and openly. (If it is the case, they might have been best served by doing something radical like only taking PSVR pre-orders alongside PS4 Pro pre-orders; let VR be the USP of PS4 Pro, and avoid the possibility of backlash from underpowered VR entirely.)
With the cards on the table, now we see how the hand plays. PS4 Pro is undoubtedly a shake-up to how the console business works. It’s one step closer to a world where console hardware is essentially a fixed-spec PC in a nice box that’s updated every few years – but we’re not in that world yet, and whether we ever arrive there will be determined by how Sony and its rivals fare in the coming 18 months.
Electronic Arts has one of the deepest back catalogs in the industry, but to date it has steered clear of mining it for new revenue through remastered and HD editions. That’s likely to change soon, according to a Game Informer interview with EA Studios executive VP Patrick Soderlund from last week at Gamescom. When asked if anything in EA’s stance on remasters had evolved in the last year, Soderlund tipped the publisher’s hand.
“What’s changed is that there is proof in the market that people want it, maybe more than there was when we spoke [previously],” Soderlund said. “There were some that did it before, but I think there is even more clear evidence that this is something that people really want. The honest answer is that we are absolutely actively looking at it. I can’t announce anything today, but you can expect us most likely to follow our fellow partners in Activision and other companies that have done this successfully.”
Soderlund added that if EA were to remaster games, it would “have to be careful in choosing the right brands for the right reasons at the right time.” Part of that would be ensuring the company handles the remasters properly instead of just selling quick and dirty ports.
That attitude is a pretty clear pivot from where the company’s thinking was just a year ago. Last October, Peter Moore said EA wasn’t interested in remakes and remasters because “it feels like pushing stuff out because you’ve run out of ideas,” adding, “I don’t know where we find the time to do remakes. We’re a company that just likes to push forward.”
While EA hasn’t been especially aggressive with remastered games, it has produced HD versions of older games like American McGee’s Alice and Crysis, primarily as preorder incentives for sequels in those series.
While some publishers establish their own eSports divisions and appoint chief competition officers, Take-Two is approaching the competitive gaming trend with a bit more caution. Speaking with GamesIndustry.biz in advance of the company’s financial earnings report today, CEO and chairman Strauss Zelnick said the field was promising, but still unproven.
“eSports we find very interesting,” Zelnick said. “It is, however, still more a promotional tool than anything else. And most people see eSports as an opportunity to increase consumer engagement in their titles, and depending on the title, to increase consumer spending within the title.”
To date, Take-Two’s biggest eSports endeavor has been an NBA 2K tournament with 92,000 teams competing for a $250,000 prize. The final 16 teams are set to compete in a single-elimination tournament this weekend, with the finals taking place during the NBA Finals next month.
“It’s just the beginning for us,” Zelnick said of the tournament. “It’s very gratifying so far, but we have yet to see it as a stand-alone profitable business. We see it more as an adjunct to consumer engagement in our titles.”
Zelnick also addressed the company’s digital revenues, which for the first time made up more than half of its revenues for the year. While the industry has shifted heavily toward digital in recent years, Zelnick doesn’t see this as some sort of tipping point or a harbinger that physical goods are in for declines from here on out.
“This year was a little different because we had a very significant portion of this year’s revenue through digital distribution,” Zelnick said. “And that’s a reflection of the power of titles like Grand Theft Auto Online as well as PC titles, 90 percent of which are digitally delivered. With frontline console releases, your numbers are more like 20 percent from digital distribution. So physical distribution remains the lion’s share of our revenue.”
While Zelnick acknowledged the growth of digital distribution is a good thing for Take-Two, he specified that it wasn’t a strategy for the company because it’s ultimately out of his hands.
“We want to be where the consumer is, and we’re not really the ones who vote,” Zelnick said.
EA is telling the world that it wants into the third-person action market with an open world game, but it does not appear to be happening any time soon.
EA Studios VP Patrick Söderlund told us in 2015 that EA wanted to expand its portfolio into gigantic action games like Assassin’s Creed or Batman or GTA and CFO Blake Jorgensen said something similar.
“We feel like there’s a huge opportunity for us to continue to invest in new areas of the business like the action genre where we haven’t competed historically. There’s a very ripe opportunity for us to invest in and we’ve been able to bring great talent in to build out that part of the business.”
But according to Game Radar it is not going to happen any time soon. Blake is quoted as saying that the outfit was building an action genre product that’s probably will appear in three or four years.
We can expect something new from EA next year which has not been announced, Blake said. But this will not be anything like the big games which have captured popular attention.
The next installment of first-person shoot-and-crouch game Call of Duty will take place in space, according to reports, and will not be a direct sequel to Ghosts.
Reports from as far and wide as Eurogamer and Shinobi have this as a pretty sure thing, and we do not consider it an unbelievable proposition.
There have been a few Call of Duty games so far and they have all been terrestrial. The canon has strayed into the near future, but has not yet gone the extra mile into the far future.
Going into space opens Call of Duty to aliens and lasers, and could make the game much more like Halo or any other popular punch-space-aliens-in-the-face games.
Call of Duty developer Infinity Ward is mute, and Activision declined to comment when Eurogamer called at its door. The last time we considered Activision was when the firm was expanding his horizons, and its coffers, by acquiring pastel coloured smartphone crack maker King Digital Entertainment, and taking on Candy Crush and mobile gaming to increase its roster.
The internet has taken the space story and run with it. Twitter is the scene of a lot of Buzz Lightyear memes already, while some people just hope that the incoming title has a bit of the charm and playability of earlier titles like Modern Warfare.
Let us all hope that, at the very least, players will not be charged with shooting and securing garish candies in a nightmare pastel world for the sake of the galaxy. Oh, and let’s also hope that Call of Duty retains the dog feature that everyone liked in the last one.
According to Newzoo’s 2016 Global eSports Market Report, this year is expected to be a “pivotal” one for the eSports sector. The firm said that last year’s tally for worldwide eSports revenues came to $325 million, and this year the full eSports economy should grow 43 percent to $463 million; Newzoo said this correlates with an audience of 131 million eSports enthusiasts and another 125 million “occasional viewers who tune in mainly for the big international events.” Overall, Newzoo’s report states that global and local eSports markets should jointly generate $1.1 billion in 2019.
Looking a bit deeper, Newzoo found that investment into and advertising associated with eSports continue to grow at a rapid clip. “This year has been dominated by the amount of investors getting involved in eSports. An increasing amount of traditional media companies have become aware of the value of the eSports sphere and have launched their first eSports initiatives. With these parties getting involved, there will be an increased focus on content and media rights. All major publishers have increased their investment into the space, realizing that convergence of video, live events and the game itself are providing consumers the cross-screen entertainment they desire from their favorite franchises,” Newzoo commented.
Online advertising in particular is the fastest growing revenue segment within eSports, jumping up 99.6 percent on a global scale compared to 2014. North America is expected to lead the charge worldwide.
“In 2016, North America will strengthen its lead in terms of revenues with an anticipated $175 million generated through merchandise, event tickets, sponsorships, online advertising and media rights. A significant part of these revenues flows back to the game publisher, but across all publishers, more money is invested into the eSports economy than is directly recouped by their eSports activities,” said Newzoo’s eSports Analyst, Pieter van den Heuvel.
“China and Korea together will represent 23 percent of global esports revenues, totalling $106 million in 2016. Audience-wise, the situation is different, with Asia contributing 44 percent of global eSports enthusiasts. Growth in this region is, for a large part, fuelled by an explosive uptake in Southeast Asia.”
While eSports is certainly on a good path for growth, game companies would be wise to not get too caught up by the hype. The average annual revenue per eSports enthusiast was $2.83 in 2015 and is expected to grow to $3.53 this year, Newzoo said, but that’s still a factor four lower than a mainstream sport such as basketball, which generates revenues of $15 per fan per year.
Peter Warman, CEO at Newzoo added, “The initial buzz will settle down and the way forward on several key factors, such as regulations, content rights and involvement of traditional media, will become more clear. The collapse of MLG was a reminder that this market still has a long road to maturity and we need to be realistic about the opportunities it provides. In that respect, it is in nobody’s interest that current market estimates differ so strongly. Luckily, when zooming in on the highest market estimates of more than $700 million, the difference is explainable by an in-depth look. This estimate only differs in the revenues generated in Asia (Korea in particular), and by taking betting revenues into account. At Newzoo, we believe betting on eSports should not be mixed into direct eSports revenues as the money does not flow into the eSports economy. Similarly, sports betting is not reported in sports market reports.”