Electronic Arts may be through with the Wii U. According to a Kotaku report, EA has confirmed that it is no longer working on Nintendo’s new console.
“We have no games in development for the Wii U currently,” EA’s Jeff Brown is quoted as saying. Brown did not indicate if EA would resume development on the system in the future
Earlier this month, EA confirmed it would not be bringing this year’s Madden NFL 25 to the Wii U. At the time, a representative said, “We have a strong partnership with Nintendo and will continue to evaluate opportunities for delivering additional Madden NFL products for Nintendo fans in the future.”
EA has released four games for the Wii U to date. The first three (Mass Effect 3, Madden NFL 13, and FIFA Soccer 13) were system-launch-day ports of titles that had shipped earlier on other platforms. The fourth game, Need for Speed Most Wanted, hit stores in March, months after that game debuted for Xbox 360, PlayStation 3, and PC.
The brief duration of support for the Wii U is surprising given EA’s vocal endorsement of the system at Nintendo’s 2011 Electronic Entertainment Expo media briefing. To cap off the event, then-EA CEO John Riccitiello promised the publisher’s support for the system. Brown told Kotaku that the quartet of titles already released represented EA making good on that promise.
Nintendo representatives did not immediately return requests for comment.
Games publisher EA believes things will turn around for the company next year. This year has been pretty unpleasant for the company after its trusted DRM sunk its flagship SimCity release.
But Electronic Arts seems to think that is all behind it and has forecast fiscal 2014 earnings above Wall Street’s expectations. EA has been cutting staff and reorganizing studios in recent months to embrace new game platforms. It is preparing a new batch of games including the latest installment of its “Battlefield” shooter game franchise.
Digital revenue, from mobile games, online offerings and other newer sales channels, rose 45 percent year-over-year to $618 million, larger than EA’s packaged goods business in the fourth quarter ended on March 31. It thinks that consumers have held back from buying hardware and software as they await new versions of Sony’s PlayStation and Microsoft Xbox expected later this year.
The video game maker forecast revenue of $4 billion, in line with Wall Street’s expectations. Weakness in the packaged games market dented revenue, but EA recognized $120 million of deferred payments from its “Battlefield Premium” service in the fourth quarter.
For the latest quarter, total revenue declined to $1.2 billion from $1.37 billion a year ago. Adjusted revenue rose 6.4 percent to $1.04 billion over the same period, barely beating analysts’ average estimate of $1.03 billion.
Net income fell to $323 million from $400 million last year.
It appears that the Ouya is going to be a bit delayed.
This is good news though, as it is being delayed because the console developers have more cash to spend on it, $15m more to be precise.
Ouya already raised around $7m on Kickstarter, and now, when it should be taking its last steps towards completion, it has had almost twice as much more injected into it by lovely venture capitalists.
We were expecting the console in early June, but that has slid back to 25 June. The time and money will in part be used to solve an issue with sticky buttons, something that usually only happens once consumers have taken some hardware home with them.
The money comes from venture capital firms and other companies including Kleiner Perkins Caufield & Byers (KPCB), Nvidia, Shasta Ventures, and Occam Partners. KPCB’s general partner Bing Gordon will join the Ouya board of directors as a result.
“We want Ouya to be here for a long time to come,” said Julie Uhrman, Ouya founder and CEO.
“The message is clear: people want Ouya. We first heard this from Kickstarter backers who provided more than $8 million to help us build Ouya, then from over 12,000 developers who have registered to make an Ouya game, next from retailers who are carrying Ouya online and soon on store shelves, and now from top pioneering investors.”
Gordon is in charge of digital investments at KPCB and is a veteran of the games industry, having started at Electronic Arts in 1982.
“Ouya’s open source platform creates a new world of opportunity for established and emerging independent game creators and gamers alike,” he said.
“There are some types of games that can only be experienced on a TV, and Ouya is squarely focused on bringing back the living room gaming experience. Ouya will allow game developers to unleash their most creative ideas and satisfy gamers craving a new kind of experience.”
Ouya consoles should start arriving in living rooms on 25 June. If you want one, you are going to have to come up with around $100 dollars, plus another $50 dollars if you want two controllers.
Some well-known industry analysts are suggesting that Microsoft could be behind as much as six months on software development for the Xbox Next. According to these sources, a combination of events have put Microsoft in this position, but it seems that some titles that were being developed internally have been canned. The situation led to Microsoft seeking to secure exclusives from 3rd party sources to fill in the gaps.
We first suggested a link between EA and Microsoft on some sort of an exclusive deal back when they were not a part of the Sony press conference earlier this year. Now, we find that they have a deal of some sort for the new Respawn title, which will apparently be exclusive to the Xbox 360 and Xbox Next. That’s not all, as it is expected that Microsoft has more exclusives to announce. What the question is really about is whether these are true exclusives or are just timed exclusives that we will see on the PS3/PS4 at some point in the future.
Even if Microsoft’s internal exclusives lack for the Xbox Next at launch, we expect them to catch up; we don’t see a big gap developing, but we know that Microsoft has solid properties to use on the Xbox Next and they will get those titles developed and out. No worries: it is going to be similar to all console launches where the software lacks when the system is released.
As anyone who has accidentally walked into a room full of children can tell you, they’re good at asking the kinds of questions that just keep drilling down. “Why is the sky blue? So why does blue light get scattered more? Then why is the sky red at sunset? Where are you going?”
And although I don’t recommend it, if you were to sit one of these little buggers down with a quarterly earnings reports from EA or Activision, they might soon start asking “Why are violent video games so much more popular than other games?” It’s a tricky question to answer without falling down the why hole. Because shooting stuff is fun. Why is it fun? Because people like military themes where they can be the hero. Okay, but why is that? Because players like feeling ridiculously powerful and enormous guns let them do that. But why is that appealing? Why, why, why?
Well, some psychologists are trying to tease apart the reasons why violence sells without throwing their hands up and shouting “Just because! And I’m not even your real dad!” Researchers Scott Rigby and Richard Ryan describe how they think that the design of violent games – especially shooters – naturally does a pretty good job of satisfying some very basic psychological needs. But not in the way you may be thinking.
In their book, Glued to Games: How Video Games Draw Us In and Hold Us Spellbound, Rigby and Ryan describe “self-determination theory,” a fairly well established framework that aims to describe why people pursue certain voluntary activities. In part, self-determination theory says that people are motivated to engage in activities to the extent that they satisfy three psychological needs:
- 1. Competence – progressing in skill and power.
- 2. Autonomy – being able to choose from multiple, meaningful options.
- 3. Relatedness – feeling important to others.
What does this have to do with violent shooters? Rigby, Ryan, and their colleagues argue that many of the design principles of good shooters also happen to follow well worn paths to satisfying these three psychological needs. Let’s take a closer look.
Competence is communicated by immediate and unambiguous positive feedback in response to your actions – you see opponents stagger, see blood fly off them, and ultimately see them collapse. The beloved headshot is particularly effective in this regard. Scott Rigby notes, “I’ll often put up a slide with a great screenshot of a headshot, and it always elicits smiles. The smiles here aren’t because everyone is sadistic – they are because this is a moment of mastery satisfaction that all gamers can relate to. The blood may not be the value component, but really is just a traditional way dense informational feedback on mastery is provided.” Information about competence in shooters is also thrown at you in the form of scoreboards, rankings, weapon unlocks, and eventually the outcome of every (relatively short) match.
Autonomy, the second motivator in self-determination theory, is also well served by the design of most popular shooters. Having the option to choose many different paths through a level satisfies autonomy, as does choosing between different classes, different loadouts, or different tactics. In a lot of games you can even choose between different modes, modifiers, or maps, allowing you to satisfy the need to play a game how you please. And if that’s not enough, custom character or weapon skins or models also fit in here.
Finally, relatedness is most obviously important in multiplayer games where you can feel like part of a successful (or, perhaps more likely of pickup games, incompetent) team bound together by opposition to a common foe. To the extent that shooters communicate your contributions in the forms of scores, points, server-wide notifications, or MVP awards, relatedness will be satisfied – to say nothing of what you can get out of text and voice chat. But even most modern shooters have single player campaigns that somewhat mimic this and put you in the role of someone important to those around you.
Of course, none of these motivators is unique to shooters. They show up in good game design across all genres and themes. But violent shooters usually hit on all three, and Rigby and Ryan believe that’s there’s a big overlap between what makes an effective shooter and what satisfies multiple facets of all three of these psychological needs. So while RPGs might nail autonomy, platformers may demand competence, and MMOs may allow the most relatedness, violent shooters fire on all three cylinders.
“[Violent games] are fun not because of the blood and gore,” write Rigby and Ryan, “but because games of war and combat offer so many opportunities to feel autonomy, competence, and the relatedness of camaraderie rolled up into an epic heroic experience.” But, that all said, do shooters satisfy all these motivators so well because they’re violent?
It’s an important question, and Ryan, Rigby, and their colleague Andrew Przybylski published a 2009 study in the Personality and Social Psychology Bulletin that addresses it. Part of their research involved a clever experiment where they modified Half-Life 2 to create a high-violence version of the game’s multiplayer and a low-violence version. The high violence version is pretty much what you’d expect. The low violence one, though, was created by changing the bullet-spewing guns into “tag” tools that players would use to zap opponents. Once tagged, foes would freeze and float up into the air for a second before being harmlessly teleported to a “penalty box” where they would wait to respawn into the game. So the main difference – arguably the only difference – between the two groups was how much violence there was in the game. Everything else was the same: the level layouts, the controls, and all the other stuff that satisfied competence and autonomy (unfortunately they didn’t examine relatedness). Only the violence was teased out of the equation
What did they find? Well, a lot of things. But one interesting finding was that the games in either condition were found enjoyable and both games satisfied the basic psychological needs of competence and autonomy. Even whether or not a person was naturally aggressive and normally enjoyed violent games didn’t matter once you accounted for competence and autonomy.
To me, this is vastly interesting and argues for alternatives to the go-to trope of violence and gore if you’re looking to draw people to games. It’s not the bloodshed as much as it is feeling like you’re able to make what you want happen on-screen. It’s not fetishising guns and explosions as much as it is the ability to use tactics and choose among meaningful options on the road to victory. It’s not the military themes as much as it is feeling like you’re an important part of a team.
Sure, war and military heroism are themes and experiences worthy of exploration, but there are other options that can be just as effective. Gamers may be happy to just keep buying the same game over and over again without understanding a thing about self determination theory, and publishers may only want to greenlight games that look like smash hits from the past without caring about mechanisms for satisfying psychological needs, but developers who think about these things and play around with them can definitely do something both great and different.
Ouya, the open Android-based console designed by Yves Behar, is being shipped to its Kickstarter backers today, and the company officially announced this week at GDC that it will hit retailers in the US, UK and Canada on June 4. Ouya is promising “hundreds” of titles for the June 4 release and the $99 console will be available at Amazon, Best Buy, GAME, GameStop, Target, and the store on OUYA.tv. Additional controllers will be sold for $49.99. And for digital purchases, consumers will be able to get pre-paid cards with redeemable codes at retail if they wish.
The company said that over 8,000 game developers worldwide are currently developing games, including both up-and-comers and more well known game makers like Square Enix, Double Fine Productions, Tripwire Interactive, Vlambeer, Phil Fish’s Polytron Corporation, and Kim Swift’s Airtight Games. “The majority of devs so far are experienced devs who’ve never built an Android game before. About 1 out of 5 have never even built a game before,” Ouya CEO Julie Uhrman said that at the GDC unveiling. She boasted that Ouya “already has more titles a couple months before launch than any console has ever launched with.”
The Ouya hardware itself is even smaller than we had previously thought (think Rubik’s Cube or smaller), and its sleek design and brushed aluminum is pleasing to the eye. Uhrman, however, stressed the controller more than anything else. “What we spent the most amount of time on is the controller. We really want this to be our love letter to gamers,” she said, adding that Ouya focused on the ergonomics, the weight, the feel, and wanted it to be a precise, accurate controller. “This is one of the pieces of Ouya that evolved a lot based on early supporter feedback,” she continued.
Apparently, the feedback led to numerous changes on the controller in terms of button placement, and the style of d-pad. The team found out that many preferred a cross-style d-pad than a disc because it’s superior for fighting games. Also, the engineers retooled the tension of the analogs and the design of shoulder buttons. And Ouya even made the responsiveness and speed of the center touch pad customizable. In this journalist’s hands, it felt comfortable and familiar while playing a few titles.
After showing off the hardware, Uhrman dived into the user interface of Ouya. The whole UI is incredibly streamlined, with four categories and an apps-like layout. The four categories are Play, Discover, Make, and Manage (which is for settings). Play is simply where anything you’ve downloaded – games or music or video apps – will be placed. Discover is the store, and it’s been designed to encourage people to “find the best games.” For example, sub-selections in Discover include featured channels like Go Retro, Hear Me, Genres, and Sandbox. The plan is to offer more descriptive names for games within genres.
“The way games get exposed in the genre list is based on what we call the O-rank, which is our fun algorithm. It’s how we rank great games. A lot of app platforms today use downloads as a metric or they use revenue as a metric and we don’t think that’s a good way to say if it’s a good game,” Uhrman said. “You could download a game and never play it again. And with the free-to-try model, revenue isn’t necessarily the best model either. What is [a good metric] is what proves that the game is fun, and that’s engagement. So things like how long you have played a game, how many times you’ve played that game over a certain period of time. How quickly from the time you boot up Ouya, which is an always-on device, do you play that game… It’s those types of engagement metrics that we think prove it’s a fun game.”
Another interesting area within Discover is Sandbox, which offers developers an opportunity to put builds up and ask people to thumb it up. The idea is for great games to get out of the Sandbox and be searchable and merchandized. It encourages developers to market their games and promote them to fans. Once you get out of Sandbox you know the people next to you have great quality games, Uhrman explained.
The Make channel is an area that appears to still be in flux. Uhrman said the goal is to serve two audiences, gamers and developers, equally. While Make is a place where a developer can upload early builds, over time it’ll be a place for devs to communicate with fans. “We also can grow it to be, what if you want to make a game, here’s how to market a game, etc. We’ll look to devs and gamers for feedback on how to evolve the section,” Uhrman said.
A console that’s as open as Ouya should have a fairly simple submission process for developers right? Uhrman confirmed that it’s not overly complicated and should be something most can complete within an hour. “It’s something we thought a lot about given that we’re an open platform… but we wanted to make sure that there are good quality games, at least to the extent that it was optimized to the television and for the controller. So the guidelines isn’t necessarily a quality review, but it checks if there’s malware, does it break or freeze often, does it use our controller schema in the right way, we need to make sure there’s no IP infringement, no pornography, does it elicit real-world violence, you are who you say you are kind of thing – that’s the review. We try to keep it under an hour. Developers can choose to go live immediately or they can choose a certain time,” she detailed.
Curiously, there’s been no partnership reached with the ESRB to rate the games in North America. Right now, the games will be self-rated by devs and community reviewed. Given that Ouya is being sold in mainstream retail, however, we do have to wonder if this will pose potential problems for the company in an atmosphere where some people are still pointing fingers at violent video games. “We’ll take it as it comes; right now we want to expose great content from any type of developer and we do have the thumbs-up/like feature or the report if this is abuse on the system,” responded Uhrman, adding that “We basically say that we can change the rules at any time and we can reject the game for any reason that doesn’t fit our content guidelines – we want everybody on Ouya to have a great experience.”
Ratings aside, one of the big questions surrounding Ouya is whether or not it can truly carve out a market for itself in the console space as industry veterans Sony and Microsoft prepare to launch their respective next-generation systems. The games we saw on Ouya are not graphically intense and are very indie in nature. Can Ouya handle high fidelity triple-A releases? Or does it even need to in order to get noticed?
Ouya does has a partnership with OnLive, so that’s one way to get triple-A games. “That’s one solution. We also support 1080p, hi-def… and we have a USB port so someone can add an external hard drive, so for games that are heavy you could absolutely use that. We have a max download size of 1.2GB for the first download, but as a developer if you want to add and send additional content from your servers you can,” Uhrman said.
“Traditional games take longer to develop, and we have some of those in development that we’re really excited about. Ouya is not about the number of polygons on the screen,” Uhrman acknowledged. “That’s not where we went. We wanted to have innovative and creative exclusive content, and we’re already starting to see that.”
Exclusive content plus a very appealing $99 price point is what could make the system an easy impulse buy for many gamers Uhrman believes. Moreover, Uhrman noted that most core gamers tend to purchase more than one console, so Ouya is likely to be something they’ll want to buy even if they are getting a PS4.
“Ouya offers something different; every gamer has a different expectation depending upon the platform and we believe we’re going to have innovative, creative games and exclusive games to Ouya… And the barrier to entry at just $99 where every game is free-to-try, I think opens up the opportunity for a number of gamers, even core gamers. Core gamers on average own more than one console. We don’t really think it’s an either/or situation. We’re offering something different – I think they’re going to want Ouya too,” she said.
A number of traditional consoles in the past have launched selling at a loss. Since Ouya is built with off the shelf components, it may be easier to contain costs, but Uhrman wouldn’t confirm that each unit is sold at a profit. “We’re really comfortable with our business model,” is all she would say.
That said, if things go the way Uhrman would like, this is only the beginning. Ouya will continue to evolve its software and hardware, and the hardware is likely to get refreshed quickly.
“We’re like any other software platform that iterates and grows over time, and we’ll have a hardware refresh rate more similar to a mobile refresh rate than a console refresh rate because we want to take advantage of the best chips out there and falling commodity prices. We will certainly make sure that there’s enough content that’s optimized for that chip and we don’t push on higher prices to the consumer,” she said.
Does that mean some Ouyas in future will not be compatible with certain games? Uhrman is looking to avoid that scenario. “We have a plan where all content will be compatible with future Ouya systems; we don’t want to fragment our own market for developers, and we always want gamers to have a great experience,” she commented.
Ouya will be interesting to watch. It’s a bold move for the industry and everything we’ve seen so far is completely unconventional. Whether or not that will pay dividends in the long-run is hard to judge at this point in time. “The market is calling us the ‘un-console’ and we like doing things the ‘un-way’,” Uhrman remarked.
When Crytek opened its new Crytek USA studio, it picked up a number of the staff from Vigil when THQ hit bottom. Now, it looks like those former Vigil studio members might be lucky enough to see Crytek acquire the Darksiders franchise that these folks poured their hearts and souls into.
Crytek is apparently looking to buy the rights to the Darksiders franchise. This is not to make a new Darksiders game, but is in the spirit that the people who created the game might as well own the IP if someone if going to get it.
Former Vigil boss, David Adams, now the head of Crytek USA, went to Twitter to announce the news that Crytek would be bidding to acquire the franchise because the IP belongs at home with is creators, according to the Twitter posting.
While it is far from assured that Crytek will acquire it, the courts and the legal wrangling will determine how it shakes out. Still, it is nice thing to see that some of the former Vigil crew could end up with the IP being under the roof where they work again. It does not get anywhere close to a new Darksiders game, but it would be nice for the Vigil folks to have something good come their way.
The recent launch of SimCity was a troubled one for Electronic Arts, as the company struggled to get its servers fully functional. Ordinarily, this wouldn’t be good for any game’s launch, but when a title is designed to be always online, and countless players therefore can’t even play the game they just purchased, the situation quickly escalates. EA moved as fast as it could to rectify the situation, but some players felt EA’s real intent was to force DRM on its customers. Maxis head Lucy Bradshaw’s blog post seemed to only stir the pot, but EA Labels president Frank Gibeau now insists that DRM had absolutely nothing to do with the game’s design whatsoever.
Speaking at GDC this week, Gibeau commented, “That’s not the reality; I was involved in all the meetings. DRM was never even brought up once. You don’t build an MMO because you’re thinking of DRM – you’re building a massively multiplayer experience, that’s what you’re building.”
Not only was DRM not a topic of internal discussion at EA, Gibeau said, but the executive also made it very clear that DRM is simply not an option for publishers anymore.
“At no point in time did anybody say ‘you must make this online’. It was the creative people on the team that thought it was best to create a multiplayer collaborative experience”
“DRM is a failed dead-end strategy; it’s not a viable strategy for the gaming business. So what we tried to do creatively is build an online service in the SimCity universe and that’s what we sought to achieve. For the folks who have conspiracy theories about evil suits at EA forcing DRM down the throats of Maxis, that’s not the case at all,” he said with a laugh.
For EA and Maxis, Gibeau said it really was a case of building a completely connected world with an MMO-like infrastructure.
“It started with the team at Maxis that had a creative vision for a multiplayer, connected, collaborative SimCity experience where your city and my city and others’ were [working together]; for better or for worse, and for right or for wrong, the lead designers and the producers and the programmers felt like they wanted to tell us a multiplayer, cooperative city story around SimCity. We had built a bunch of these and you could’ve gone deeper and deeper into your plumbing and managing toilets and electrical posts, but we felt there was a bigger story to tell and a bigger opportunity to chase with an always-on connected experience built around that concept. That’s what we set out to design and that’s what Maxis created and brought forward into the marketplace,” Gibeau explained.
“At no point in time did anybody say ‘you must make this online’. It was the creative people on the team that thought it was best to create a multiplayer collaborative experience and when you’re building entertainment… you don’t always know what the customer is going to want. You have to innovate and try new things and surprise people and in this particular case that’s what we sought to achieve. If you play an MMO, you don’t demand an offline mode, you just don’t. And in fact, SimCity started out and felt like an MMO more than anything else and it plays like an MMO,” he continued.
Gibeau acknowledged that EA probably should have done a better job in its messaging with the community, making sure that they understand the MMO nature of the title and the need to be always connected.
“I’m disappointed that we didn’t do a better job communicating that upfront. I’m disappointed that we had a rough first couple of days in terms of underestimating how people were going to play the game and how the server infrastructure was going to hold up, but we responded the best we could, we got people to fix it as fast as we could,” he said. “We had a majority of people come through who had a good experience and a bunch of people that didn’t and that’s not acceptable, but at the same time we tried to do make-goods with free games, we’ve been fixing and constantly tinkering with the experience and it’s an experience that we want to continue to evolve over time. It has to be an online experience like an MMO where you bring out new events, new kits, new places to go, and that’s more the vision for where SimCity is going.”
Even with its problems, however, the game did quite well, selling over 1.1 million copies in its first two weeks, which Gibeau noted makes it “the fastest-selling and biggest SimCity we’ve ever built.” Gibeau believes that part of the problem is the entire situation snowballed when the media started covering it.
“Some customers have had problems, and you’re in the media; you know how some things can snowball, and unfortunately that’s what happened here. We did the best we could in order to respond to that and made adjustments to the service but the game is continuing to sell through at a much higher expectation than we thought. The servers are now at 100 percent and there’s plenty of capacity… and we’re not the first or the last company [to have a problem like this] – Activision Blizzard, Steam, Ubisoft…everybody’s had this problem and it was our turn I guess,” he said.
Warhammer 40K owner Games Workshop has confirmed a new licensing deal with Roadhouse Interactive to develop new titles for mobile space based on the franchise. The developer, who is based in Vancouver, describes the new Warhammer title as a side screening action game.
While Roadhouse confirms that the game is in development, the end mobile platforms that will see the released version of the game are still up in the air at the moment; but more information is sure to be coming in the months ahead, according to the studio.
The Warhammer 40K has had others attempts to capture the tabletop war game in video form before. These Warhammer offerings have met with mixed reviews, but this new title from Roadhouse will be a first for Warhammer 40K in the mobile space.
The Disney acquisition of LucasFilm last October included all of the company’s subsidiaries, including Industrial Light & Magic, Skywalker Sound, and veteran game developer LucasArts. While news since the acquisition has been mostly focused – and justifiably so – on an announcement of a new Star Wars movie in production, what does the future hold for LucasArts?
Here’s what’s known about Disney’s plans for Lucasfilm and its subsidiaries. Disney’s official press release on the acquisition stated that “Lucasfilm, headquartered in San Francisco, operates under the names Lucasfilm Ltd., LucasArts, Industrial Light & Magic, and Skywalker Sound, and the present intent is for Lucasfilm employees to remain in their current locations.”
Subsequently, Disney has announced the beginning of production on Star Wars Episode VII, to be directed by noted director JJ Abrams; the cancellation of the acclaimed animated series The Clone Wars after 100 episodes; and Seth Green’s planned Star Wars: Detours comedy has been shelved for now. The speculation among Hollywood insiders is that Disney wants to focus efforts on the new movie, and wants to remove possible distractions (other licensed Star Wars shows) from the entertainment landscape.
The picture regarding LucasArts’ future is much less clear. The company began in 1982 producing games for Atari consoles, and later produced computer games including a series of popular adventure games (like The Secret of Monkey Island), military simulations (like Battlehawks 1942) and first-person shooters (Star Wars: Dark Forces). Subsequently, after the turn of the millennium LucasArts changed focus, working with other publishers and focusing mostly on titles based on Lucasfilm properties.
The last few years have been turbulent for LucasArts, with a series of executive changes and downsizings. Jim Ward headed up the company from 2004 to 2008; he was followed by Howard Roffman as interim until Darrell Rodriguez took over and was replaced by Paul Meegan in 2010; Meegan left in 2012, and the studio has not yet chosen a permanent president.
The game slate for LucasArts has been pared down to only one that’s promoted on its web site: Star Wars 1313. The game is a third-person adventure game, seemingly similar to a BioWare game, and it caused quite a positive buzz at E3 last year. Kotaku has reported that the three different sources told them the game was put on hold since the acquisition, but LucasArts denied this, saying that “Star Wars 1313 continues production.” Kotaku also reported that Star Wars: First Assault, a multiplayer shooter, may never be released given the uncertainty about the future of LucasArts and its direction.
According to BusinessWeek’s article on the Disney acquisition of Lucasfilm, LucasArts brought in $150 million in revenue in 2012, with operating income of about $90 million. Those numbers may seem high given the languid pace of LucasArts releases (Kinect Star Wars being the only release in 2012, and Lego Star Wars III in 2011), but LucasArts also has licensed game revenue from titles like Star Wars: The Old Republic.
Now, sources have indicated that since the acquisition LucasArts hiring has been frozen, and other rumors passed along to us questioned the future of the studio itself. LucasArts, when reached for a statement, said it’s “one hundred percent not true” that LucasArts was headed for a shutdown, and that “everything is moving ahead.” Speculation will doubtless continue in the absence of hard information about release dates and future products.
The studio’s performance in recent years has not impressed former LucasArts employees. One ex-LucasArts employee had this to say: “The ‘business’ has been on life-support since the Star Wars license and subsequent development for their best title went to Bioware/EA. I’m frankly amazed that they’ve stayed in business this long. No stomach for truly original product, and slender means to produce their previous cash cows – Indy and Star Wars.”
Disney has many things to consider when looking at the future of LucasArts. The studio has had a spotty record of product releases, but perhaps some of that may be due to the unfocused nature of the Star Wars franchise in the last few years. Disney has had its own difficulties in determining a strong interactive strategy, shutting down Junction Point Studios and recently slipping the ship date for Disney Infinity. Many of Disney’s best intellectual properties (like the many Marvel characters) are licensed out rather than developed in-house.
The relaunch of the Star Wars movie franchise with Episode VII is clearly a major event that Disney will want to exploit to the fullest. Either LucasArts should be revitalized to produce games worthy of a major media event, or Disney may decide to just give up in-house production of cutting-edge game titles and license the property out. Either way, Disney needs to decide soon which way to go; AAA games take years to develop properly, and time is passing swiftly.
Essentially, if Disney doesn’t decide what to do with LucasArts soon the decision will effectively be made for it. Employees who have no clear picture of their future will be looking for work elsewhere, and typically the most talented employees are among the first to leave. If Disney waits too long, it won’t be able to have AAA games available around the launch of the new movie, and the talent pool may be lower than it was. May the Force be with them.
EA games has been caught out making bogus claims about its SimCity claiming it needs a server to function. The outfit has been responding to requests from users that it abandon its DRM and allow for a version of the game that does not need to log onto a server. EA insists that it needs the servers to work and that it would take the company ages to reprogram the game so that it can work independently.
Maxis’ studio head, Lucy Bradshaw went on record saying that the software offloads a significant amount of the calculations to EA servers, and that it would take “a significant amount of engineering work from our team to rewrite the game” for single player. But that is complete rubbish according to a SimCity developer who has got in touch with RPS to tell us that at least the first of these statements is not true. He claimed that the server is not handling calculations for non-social aspects of running the game, and that engineering a single-player mode would be a doddle.
He told Rocketpapershotgun.com that the servers were not handling any of the computation done to simulate the city you are playing. They are still acting as servers, doing some amount of computation to route messages of various types between both players and cities and doing cloud storage of save games, interfacing with Origin, but doing nothing for the game itself.
Kotaku said that the game was happy for 20 minutes before it realized it wasn’t syncing to the servers and the DRM kicked in. Game play can’t be using the servers at all. For some reason EA is determined to keep its DRM up and running even if it means killing the game completely.
I haven’t played any of the Dead Space games, so I can’t comment on the criticisms that Dead Space 3 sold poorly because of game content or the way in which it dumbed down the gameplay experience to appeal to a broader audience. I can talk about how I see the microtransaction and other changes that vocal fans derided fit in with Electronic Arts’ broader strategy.
The games market is polarizing. The big are getting bigger (see Grand Theft Auto and Call of Duty beating first week sales records year after year) while the niche is becoming more viable (see every indie game on Steam) while the middle is getting squeezed (see THQ, Eurocom and dozens of other midsize developers). The emergence of digital distribution has brought along a bigger change than many people realized, driven by two different properties:
- It is cheaper than ever before to distribute content
- It is possible to have unique, personal, one-to-one relationships with every customer
The strategies that EA are putting in place reflect this reality.
The variable demand curve
The past 30 years were about putting games in boxes, shoving them in shops and trying to sell as many as possible. The price was basically fixed at around £30-40, so the only way you could make more money was to do more volume, i.e. sell more copies. You could also try to maintain the price for as long as possible by restricting price reductions and limiting trade-ins. What you couldn’t do was to connect with your fans in any meaningful way.
We no longer live in that world, except perhaps for the very biggest blockbusters. We live in the world where there is a bewildering choice and variety of games available to us. At the same time, development costs for AAA games are enormous and rising, while the market is not getting bigger. In fact, that subset of the market is shrinking as players are distracted by the many different ways, times and devices they can play games on.
There is only one solution. It is to find a way to use the initial launch of AAA game as a starting point in your relationship with fans. It is to start the long process of turning games from one-off purchases to long-term relationships. It is about using games to engage with and retain players, to convert some of those players into fans and to convert some of those fans into superfans. In the process, niche AAA games that are not viable using the blockbuster, fixed-price-massive-volume model can become successful long-term businesses.
Viewed through that lens, everything that EA is doing makes sense. It is trying to use its games as the starting point of the relationship. Sometimes those games are free (as in most of its mobile, tablet and online strategy). Sometimes they are paid (as in its console strategy). What they are trying to achieve is a revenue model which means that those people who love their games, who keep playing, who are vocal and demanding, are given an opportunity to spend lots of money on the products that they love. It is the only way for niche AAA games to survive.
I don’t know why Dead Space 3 didn’t do well. I don’t know if it was about poor design decisions, a change of focus or gamers voting with their wallets and not supporting a game with microtransactions on principle (EA will have data on how many users engaged with microtransactions. Answering the other questions will be harder).
But I don’t think gamers should view any rumored cancellations of blockbuster projects as a victory against microtransactions. Finding a way for the biggest fans to pay lots of money to get things they truly value is the only way to support niche AAA games (and by niche, I mean anything outside the top 4 or 5 games released every year). EA may not have got the exact model right yet, but they are experimenting. The failure of the experiment does not mean that EA will abandon microtransactions: it means that it will abandon anything other than blockbuster games and tablet games.
Is that what you really want?
Nicholas Lovell is director at GAMESbrief, a blog about the business of games. He provides business advice on free-to-play and paymium design. He will be giving a masterclass on how to make money from free-to-play games in San Francisco on Sunday March 24, just before GDC. You can also book one-to-one surgeries.
With the PlayStation 4 unveiled and rumors swirling that Microsoft is preparing to announce a new Xbox in April, next-gen is all the buzz right now. These are massive investments from the respective platform holders, and under the old “razor and blades” model the hope is to make back much of the money on software. And since some of that software is going to cost a good deal more to develop (although not as much as some think, says Hermen Hulst) should consumers be worried that $69.99 will become the new standard AAA game price?
The consensus seems to be that $59.99 should be able to hold, but some big budget titles like Call of Duty and others could get away with higher.
Sony Computer Entertainment America boss Jack Tretton told AllThingsD that PS4 will support a variety of prices from $0.99 to the $60 range (of course, “range” could imply $69.99). But the bottom line is that in this digital era, a variety of content will lead to all kinds of pricing. And as EEDAR’s Jesse Divnich pointed out to us, publishers can maintain the $59.99 price but bring in much more revenue with additional DLC.
“The $59.99 price point in the United States for next-generation games are unlikely to change. As we’ve seen through the years, however, revenue per game has increased gradually as publishers have been able to capitalize on additional in-game and digital content,” he said. “With publishers focusing on fewer, yet bigger and longer lasting titles, I’d expect publishers to keep the $59.99 price point intact, but expand on their digital offerings with more in-game content and expansion packs.”
He added, “And I don’t think this is a scenario where publishers ship a ‘base’ product and gauge on digital offerings. We believe these digital offerings, like they are today, will expand upon the player experience and offer even more value than they do today.”
David Cole of DFC Intelligence agrees. While he thinks the “super AAA” games may test out the $70 price, most content will come in much lower than that. “I think we will see an incredibly wide range of prices. Premium games command premium prices. Think Skylanders, Collector’s editions, Guitar Hero and Wii Fit in their day. What gets squeezed is the stuff in the middle that must compete with high-end development on one hand and low cost/low price games on the other,” he pointed out. “So you have fewer big budget titles but those will have even bigger budgets and that will be cost passed on to the consumer. Of course, very few games will be able to do this.”
Even if there is a slight bump on AAA game pricing, the average selling price (ASP) will beging coming down as the cycle advances, according to IDC Research manager Lewis Ward.
“While there will always be collector’s and limited edition console game discs that cost $80 or more, I’m not projecting that the PS4 or next-gen Xbox will raise the typical ‘AAA’ game disc to $70. 7th gen disc ASPs have trended down a couple dollars per year since 2006-2007. 8th generation discs will come in closer to $60 – which we’re already seeing with Wii U – and then start trending down a few dollars per year. So there will probably be a ~$10 gap in pricing between 7th and 8th gen discs, but due to ASP slippage over time, the overall console discs ASP through 2016 should remain in the low to mid-$40s range,” Ward explained.
An ASP in the mid-$40s is palatable for many hardcore gamers, but the console business is still going to have to face the fact that mobile, tablets, and free-to-play are changing the gaming landscape and the business of games. With PS4 supposedly being more open than any console before it, hopefully developers will being able to offer more free-to-play games and titles at more attractive prices.
It was a better than expected quarter that capped off a record year for Activision. The fourth quarter brought in $2.6 billion in revenue, compared to analyst estimates of $2.44 billion. The company came within spitting distance of $5 billion in revenue for the year ($4.987 billion, to be precise), which is amazing for a company that’s not manufacturing console hardware. The downside of this performance: Activision is already telling us it won’t happen again in 2013, with the company projecting results substantially lower for this year (at $4.175 billion). Will the company see growth again, or was 2012 the highest point it will ever reach?
CEO Bobby Kotick praised the company’s performance: “We achieved record fourth quarter and annual results. And in 2012, on a non-GAAP basis, we generated approximately $5 billion in revenues, a 34 per cent operating margin and EPS growth of 27 per cent over the prior year. We increased our operating cash flow by 41 percent.” It’s extremely impressive; Activision continues to manage its properties well in a horrible retail environment.
Kotick also provided some other info to show Activision’s dominance. “In the US and Europe, we were the #1 video game publisher at retail, we’re the #1 title overall, the #1 console title and the #1 PC title.” Kotick also threw in the following: “We’re also the #1 independent Western Digital game publisher and had the #1 subscription-based MMORPG.”
Notice the exceptionally careful phrasing here, to conveniently exclude Chinese, Korean and Japanese publishers, as well as Russia’s Wargaming.net. And being the #1 subscription-based MMORPG isn’t saying much, given that almost every other MMORPG these days is free-to-play. The lily is already pretty damn impressive; there’s really no need to add gilding.
The rapid growth of Skylanders was given some special attention. “Skylanders, our newest franchise, which is both toys and video games, has life-to-date sold in excess of $100 million toys and generated revenues of approximately $1 billion. This week, Activision Publishing revealed the third game in the Skylanders franchise for holiday 2013. And while there are new entrants in the category and challenges from slower than expected adoption of the Wii U, we remain enthusiastic about Skylanders’ future prospects.”
First we had EA’s CEO saying the Wii U wasn’t a next-generation console, and now Activision’s CEO is calling out the Wii U for slow sales. Nintendo doesn’t appear to be getting much love from third-party publishers in the West.
Kotick then sounded a cautionary note: “We recognized that 2013 is a transition year, as we enter the ninth year of the current generation of console video game systems. We encounter new threats from unproven business models, and we compete against new category entrants. We aren’t immune to unfavorable market dynamics, but we have navigated through the transitions many times before, and we are well prepared to do so again.”
If a business model is unproven, how is it a threat exactly? Isn’t it a threat if it’s doing really well, which in some sense proves that it (or at least that instantiation) works, doesn’t it? Perhaps what Kotick is saying is that there are business models (like free-to-play) which are working damnably well, but unfortunately Activision hasn’t used those models, so they (to Activision’s experience) are unproven. Let’s simplify this: If it’s working well enough to be a threat, shouldn’t Activision at least be experimenting with it?
CFO Dennis Durkin looked ahead to this year’s prospects: “Our product lineup is expected to be anchored by 4 of our top franchises: Call of Duty, Skylanders, World of Warcraft and StarCraft. It will also be a year of significant continued investment in several new properties with long-term potential that are not factored into our 2013 financial outlook, including Activision Publishing’s new Bungie universe, Call of Duty Online for China and the new Blizzard MMO.” That could mean none of those new titles will ship this year. Or perhaps one or more might ship, but Activision isn’t sure, and doesn’t want to count revenue that may not materialize.
Durkin went on to say: “For the full year 2012, Diablo III contributed more than $0.20 of EPS on a standalone basis. This year, our outlook for Blizzard includes the release of the StarCraft II expansion pack, Heart of the Swarm, in March and one additional title. For Call of Duty, consistent with our past practices, we are planning for the mainline release in Q4 to be down versus 2012.”
Activision reached peak sales of Call of Duty two years ago, and expects this year to be lower once again than last year. When you’re coming out with a new version of the game every year, it’s hard to keep posting record numbers. New consoles might help, but they will probably be too late in the year to matter much even if Activision does have a version of Call of Duty ready for them.
Why won’t new consoles matter much for 2013? Let’s look at the numbers. Assuming a new console ships in November, it’s unlikely to sell more than a couple of million units by the end of the year; let’s say it’s an amazing success and sells 5 million. Selling a game to half of those buyers would be incredible; that would be 2.5 million units. When a Call of Duty title can sell nearly ten times that amount, you can see why it’s not reasonable to expect new consoles to help Activision’s numbers significantly. Sure, they might, if absolutely everything goes well. But companies like to be a little conservative on their projections to give themselves a good chance to beat the numbers. Investors like it when companies beat their numbers.
Blizzard CEO Mike Morhaime then gave some color on his products: “World of Warcraft added more than 9.6 million players, down slightly from the previous quarter. The majority of the decline came from China, while subscribership in the West was relatively more stable.” Later, Morhaime added: “With respect to China, in spite of the decline in subscribership, it is important to note that the engagement levels of the core items did increase with the launch of the expansions and I think that, that suggests increased engagement by our core players.”
So WoW subscriber numbers are shrinking, but the remaining players are more engaged. To some extent, this is acceptable if overall revenue can remain constant or even rise if virtual goods sales are high enough among the remaining players, and they stay subscribed longer. At some point, though, if subscriber numbers keep falling overall revenue will drop. The key information here is that World of Warcraft has apparently already burned through the boost it got from Mists of Pandaria, and is back to losing subscribers (at least in China), but the rate of erosion isn’t too alarming. Yet.
One of the analysts asked whether development costs will rise for titles destined for next-gen consoles. Kotick was straightforward: “This is my 22nd year doing this, and in every single console transition, we’ve seen an increase in development costs.” Margin improvement for next-gen titles is going to depend on selling more DLC, not on reducing development costs. Until next-gen consoles are in tens of millions of households, revenue from next-gen titles will be lower than current-gen titles – and development costs will be higher. That’s not a good combination.
Activision’s stock has mostly hovered between $10.50 and $12.50 for the past several years, though after yesterday’s report it’s shot up to $13.41, a gain of over 11 per cent. Wedbush analyst Michael Pachter has a long-term target of $19 for Activision stock, which is above the stock’s high point five years ago. It’s difficult to see how the stock gets there unless gaming stocks in general become more well-received by investors. Perhaps if new consoles launch strongly, and Bungie’s new game is a smash hit, and everything goes well…
Meanwhile the general message of this earnings report is that Activision is being careful with major strategy moves. Activision is still merely dabbling in mobile games, and doesn’t expect them to be a significant contribution to the company in the coming year. So far, the company is resisting moving World of Warcraft over to a free-to-play model; that may be wise given that such a changeover doesn’t always work well. Where’s the chance for major growth? Bungie’s new title, the new Blizzard MMO, and Call of Duty in China, that’s where. There are questions about all of them, of course. Will Bungie’s title pull in a significantly different audience than Call of Duty, or will it cannibalize that game’s players? Will Blizzard’s MMO merely move players over from World of Warcraft, or will it attract a significant new audience? Will Chinese players really turn out in big numbers for Call of Duty Online?
Looming over all of these questions is the long-term viability of the console market, and whether the new consoles coming from Sony and Microsoft will revive the console game business to the heights of 2008. Activision is in great shape right now, with billions of dollars in cash and four great brands that generate amazing sales. Of those four brands, three are getting pretty long in the tooth; can they perform at their current levels, or will they continue to decline slowly? The success of new consoles may be critical to Activision’s future. The company may choose to diversify with acquisitions, or it may keep the cash tucked away for a rainy day or a larger strategic acqusition.
Activision’s had a great 2012, and 2013 looks pretty good. The company’s longer-term picture depends mostly on how the console market continues, and how the MMOG market evolves along with Activision’s products in that area. Mobile doesn’t appear to have big potential for Activision yet. The other potential big mover for Activision is a major acquisition, like, say, Take-Two. Activision has enough cash to make such a purchase, or some other large strategic move. We’ll have to keep watching to see how that strategy game might play out.
For now, at least, Activision expects to have sales lower than last year’s level. Growth is only going to happen in 2014 and beyond if Activision’s new projects can do well, and new consoles do well, and existing brands don’t fade too quickly. When you’re at the top of the mountain, climbing higher is difficult. Perhaps the Skylands offer a path higher…
Crytek chief executive officer Cevat Yerli has told Digital Spy that Crysis 3 won’t be coming to the Nintendo Wii U because there’s no “business drive” between Electronic Arts and Nintendo.
“There have been discussions between Nintendo and EA and Crytek, but the bottom line is that there is that there’s not enough business drive in it,” Yerli told Digital Spy.
“I’d love to see it on Wii U, but what I love to see and what gets done at the end of the day are two different things. Even so, I could initiate it but someone has to sell it, right?” said Yerli. “It’s a business decision between EA and Nintendo. If that business decision doesn’t make sense, or seems to not make sense for them, it’s… not possible for us to make it. We can’t publish ourselves, and that’s the bottom line.”
Crysis 3 will be coming Xbox 360, PlayStation 3, and PC on February 19 in North America and February 22 in Europe. Electronic Arts has released the Unreal Engine 3-powered Mass Effect 3 and versions of EA Sports’ Madden NFL 13 and FIFA 13 on Nintendo’s new console.