Facebook Inc is currently negotiating with Major League Baseball to live stream one game per week during the upcoming season, which could be a key win as the social media platform works to offer more live sports, according to two people familiar with the situation.
Facebook has pushed to sign deals with owners of sports rights to live stream their games, going after an audience that competitor Twitter Inc is also trying to capture, according to sports media consultants.
For social media platforms like Facebook and Twitter, live streaming sports is key to attracting people since sports is one of the few types of content that people still watch live.
“Facebook is aggressively going after sports content and they are now one of a number of competitors to traditional media outlets that are going after sports programming,” said sports media consultant Lee Berke. “It makes perfect sense that they would be going after name brand properties like the MLB.”
The companies were in advanced talks, according to one source. It was unclear which games MLB would live stream on Facebook. A representative for Facebook and MLB declined to comment.
By partnering with Facebook, MLB would get access to a young audience at a massive scale, consultants said.
The size of Facebook’s reach was a big reason Univision Communications Inc decided to use Facebook Live to live stream Mexican soccer matches in English, said Tonia O’Connor, chief commercial officer and president of content distribution at Univision.
Under that deal, Facebook will live stream 46 matches by Mexican soccer league Liga MX in 2017. Terms were not disclosed.
Over the past few months, Facebook has live streamed global basketball and soccer matches and table tennis.
Never more than a stopgap that was hugely inadequate to the gap in question, Steam Greenlight is finally set to disappear entirely later this Spring. The service has been around for almost five years, and while it was largely greeted with enthusiasm, the reality has never justified that optimism. The amassing of community votes for game approval turned out to be no barrier to all manner of grafters who launched unfinished, amateurish games (even using stolen assets in some cases) on the service, but enough of a barrier to be frustrating and annoying for many genuine indie developers. As an attempt to figure out how to prevent a storefront from drowning in the torrent of rubbish that has flooded the likes of the App Store and Google Play, it was a worthy experiment, but not one that ought to have persisted for five years, really.
Moreover, Greenlight isn’t disappearing because Valve has solved this problem to its satisfaction. The replacement, Direct, is in some regards a step backwards; it’ll see developers being able to publish directly on the system simply by confirming their identity (company or personal) through submission of business documents and paying a fee for each game they submit. The fee in question hasn’t been decided yet, but Valve says it’s thinking about everything from $100 to $5000.
The impact of Direct is going to depend heavily on what that fee ends up being. It’s worth noting that developers for iOS, for example, already pay around $100 a year to be part of Apple’s developer programme, and trawling through the oceans of unloved and unwanted apps released on the App Store every day shows just how little that $100 price does to dissuade the worst kind of shovelware. At $5000, meanwhile, quite a lot of indie developers will find themselves priced out of Steam, especially those at the more arthouse end of the scene, or new creators getting started out. Ironically, though, the chances are that many of the cynical types behind borderline-scam games with ripped off assets and design will calculate that $5000 is a small price to pay for a shot at sales on Steam, especially if the high fees are thinning out the number of titles launching.
It’s worth noting that, for the majority of Steam’s consumers, the loss of arthouse indie games and fringe titles from new creators won’t be of huge concern. Steam, like all storefronts, sells huge numbers at the top end and that falls off rapidly as you come down the charts; the number of consumers who are actively engaging with smaller niche titles on the service is pretty small. However, that doesn’t mean that locking out those creators wouldn’t be damaging – both creatively and commercially.
Plenty of creators are actually making a living at the low end of the market; they’re not making fortunes or buying gigantic mansions to hang around being miserable in, but they’re making enough money from their games to sustain themselves and keep up their output. Often, they’re working in niches that have small audiences of devoted fans, and locking them out of Steam with high submission costs would both rob them of their income (there are quite a few creators out there for whom $5000 represents a large proportion of their average revenue from a game) and rob audiences of their output, or at least force them to look elsewhere.
Sometimes, a game from a creator like that becomes a break-out hit, the game the whole world is talking about for months on end – sometimes, but not very often. It’s tempting to argue that Steam should be careful about its “low-end” indies (a term I use in the commercial sense, not as any judgement of quality; there’s great, great stuff lurking around the bottom of the charts) because otherwise it risks missing the Next Big Thing, but that’s not really a good reason. Steam is just about too big to ignore, and the Next Big Thing will almost certainly end up on the platform anyway.
Rather, the question is over what Valve wants Steam to be. If it’s a platform for distributing big games to mainstream consumers, okay; it is what it is. If they’re serious about it being a broad church, though, an all-encompassing platform where you can flick seamlessly between AAA titles with budgets in the tens of millions and arthouse, niche games made as a labour of love by part-timers or indie dreamers, then Direct as described still doesn’t solve the essential conflict in that vision.
In replacing publishers with a storefront through which creators can directly launch products to consumers, Valve and other store operators have asserted the value of pure market forces over curation – the fine but flawed notion of greatness rising to the top while bad quality products sink to the bottom simply through the actions of consumers making buying choices. This, of course, doesn’t work in practice, partially because in the real world free markets are enormously constrained and distorted by factors like the paucity of information (a handful of screenshots and a trailer video doth not a perfectly informed and rational purchasing decision make), and more importantly because free markets can’t actually make effective assessments of something as subjective as the quality of a game.
Thus, even as their stores have become more and more inundated with tides of low quality titles – perhaps even to the extent of snuffing out genuinely good quality games – store operators have tried to apply algorithmic wizardry to shore up marketplaces they’ve created. Users can vote, and rate things; elements of old-fashioned curation have even been attempted, with rather limited success. Tweaks have been applied to the submission process at one end and the discovery process at the other. Nothing, as yet, presents a very satisfying solution.
One interesting possibility is that we’re going to see the pendulum start to swing back a little – from the extreme position of believing that Steam and its ilk would make publishers obsolete, to the as yet untested notion that digital storefronts will ultimately do a better job of democratising publishing than they have done of democratising development. We’ve already seen the rise of a handful of “boutique” publishers who specialise in working with indie developers to get their games onto digital platforms with the appropriate degree of PR and marketing support; if platforms like Steam start to put up barriers to entry, we can expect a lot more companies like that to spring up to act as middlemen.
Like the indie developers themselves, some will cater to specific niches, while others will be more mainstream, but ultimately they will all serve a kind of curation role; their value will lie not just in PR, marketing and finance, but also in the ability to say to platforms and consumers that somewhere along the line, a human being has looked at a game in depth and said “yes, this is a good game and we’re willing to take a risk on it.” There’s a value to that simple function that’s been all too readily dismissed in the excitement over Steam, the App Store and so on, and as issues of discovery and quality continue to plague those storefronts, that value is only becoming greater.
Whatever Valve ultimately decides to do with Direct – whether it sets a low price that essentially opens the floodgates, or a high one that leaves some developers unable to afford the cost of entry – it will not provide a panacea to Steam’s issues. It might, however, lay the ground for a fresh restructuring of the industry, one that returns emphasis to the publishing functions that were trampled underfoot in the initial indie gold-rush and, into the bargain, helps to provide consumers with clearer assurances of quality. A new breed of publisher may be the only answer to the problems created by storefronts we were once told were going to make publishers extinct.
If you’re someone who makes a living from videogames – as most readers of this site are – then political developments around the world at the moment should deeply concern you. I’m sure, of course, that a great many of you are concerned about things ranging from President Trump’s Muslim travel ban to the UK Parliament’s vote for “Hard Brexit” or the looming elections in Holland and France simply on the basis of being politically aware and engaged. However, there’s a much more practical and direct way in which these developments and the direction of travel which they imply will impact upon us. Regardless of personal ideology or beliefs, there’s no denying that the environment that seems to be forming is one that’s bad for the medium, bad for the industry, and will ultimately be bad for the incomes and job security of everyone who works in this sector.
Video games thrive in broadly the same conditions as any other artistic or creative medium, and those conditions are well known and largely undisputed. Creative mediums benefit from diversity; a wide range of voices, views and backgrounds being represented within a creative industry feeds directly into a diversity of creative output, which in turn allows an industry to grow by addressing new groups of consumers. Moreover, creative mediums benefit from economic stability, because when people’s incomes are low or uncertain, entertainment purchases are often among the first to fall.
Once upon a time, games had such strong underlying growth that they were “recession proof,” but this is no longer the case. Indeed, it was never entirely an accurate reading anyway, since broader recessions undoubtedly did slow down – though not reverse – the industry’s growth. Finally, as a consequence of the industry’s broad demographic reach, expansion overseas is now the industry’s best path to future growth, and that demands continued economic progress in the developing world to open up new markets for game hardware and software.
What is now happening on a global basis threatens all of those conditions, and therefore poses a major commercial threat to the games business. That threat must be taken especially seriously given that many companies and creators are already struggling with the enormous challenges that have been thrown up by the messy and uneven transition towards smart devices, and the increasing need to find new revenue streams to support AAA titles whose audience has remained largely unchanged even as development budgets have risen. Even if the global economic system looked stable and conditions were ideal for creative industries, this would be a tough time for games; the prospect of restrictions on trade and hiring, and the likelihood of yet another deep global recession and a slow-down in the advances being made by developing economies, make this situation outright hazardous.
Consider the UK development industry. Since well over a decade ago, if you asked just about any senior figure in the UK industry what the most pressing problem they faced was, they’d give you the same answer: skills shortages. Hiring talented staff is tough in any industry, but game development demands highly skilled people from across a range of fields, and assembling that kind of talent isn’t cheap or easy – even when you have access to the entire European Union as a hiring base, as UK companies did. Now UK companies face having to fill their positions with a much smaller pool of talent to draw from, and hiring from abroad will be expensive, complex and, in many cases, simply impossible.
The US, too, looks like it may tighten visa regulations for skilled hires from overseas, which will have a hugely negative impact on game development there. There are, of course, many skilled creatives who work within the borders of their own country, but the industry has been built on labour flows; centres of excellence in game development, like the UK and parts of the US, are sustained and bolstered by their ability to attract talent from overseas. Any restriction on that will impact the ability of companies to create world-class games – it will make them poorer creatively and throw hiring roadblocks in the path of timely, well-polished releases.
Then there’s the question of trade barriers; not only tariffs, which seem likely to make a comeback in many places, but non-tariff barriers in terms of diverse regulations and standards that will make it harder for companies to operate across national borders. The vast majority of games are multinational efforts; assets, code, and technology are created in different parts of the world and brought together to create the final product. Sometimes this is because of outsourcing, other times it’s because of staff who work remotely, and very often it’s simply because a certain piece of technology is licensed from a company overseas.
If countries become more hostile to free trade, all of that will become more complex and expensive. And that’s even before we start to think about what happens to game hardware, from consoles that source components from across Asia before assembly in China or Japan, to PC and smart device parts that flow out of China, Korea, Taiwan and, increasingly, from developing nations in South-East Asia. If tariff barriers are raised, all of those things will get a lot more expensive, limiting the industry’s consumer base at the most damaging time possible.
Such trade barriers – be they tariff barriers or non-tarriff barriers – would disproportionately impact developing countries. Free trade and globalisation have had negative externalities, unquestionably, but by and large they have contributed to an extraordinary period of prosperity around the world, with enormous populations of people being lifted out of poverty in recent decades and many developing countries showing clear signs of a large emerging middle class. Those are the markets game companies desperately want to target in the coming decade or so. In order for the industry to continue to grow and prosper, the emerging middle class in countries like India, Brazil and Indonesia needs to cultivated as a new wave of game consumers, just as many markets in Central and Eastern Europe were a decade ago.
The current political attacks on the existing order of world trade threaten to cut those economies off from the system that has allowed them to grow and develop so quickly, potentially hurling them into deep recession before they have an opportunity to cement stable, sustainable long-term economic prosperity. That’s an awful prospect on many levels, of course (it goes without saying that many of the things under discussion threaten human misery and catastrophe that far outweighs the impact on the games business), but one consequence will likely be a hard stop to the games industry’s capacity to grow in the coming years.
It’s not just developing economies whose consumers are at risk from a rise of protectionism and anti-trade sentiments, however. If we learned anything from the 2008 crash and the recession that followed, it should be that the global economy largely runs not on cash, but on confidence. The entire edifice is built on a set of rules and standards that are designed to give investors confidence; the structure changes over time, of course, but only slowly, because stability is required to allow people to invest and to build businesses with confidence that the rug won’t be tugged out from underneath them tomorrow. From the rhetoric of Donald Trump to the hardline Brexit approach of the UK, let alone the extremist ideas of politicians like Marine le Pen and Geert Wilders, the current political movement deeply threatens that confidence. Only too recently we’ve seen what happens to ordinary consumers’ job security and incomes when confidence disappears from the global economy; a repeat performance now seems almost inevitable.
Of course, the games industry isn’t in a position to do anything about these political changes – not alone, at least. The same calculations, however, apply to a wide variety of industries, and they’re all having the same conversations. Creative industries are at the forefront for the simple reason that they will be the first to suffer should the business environment upon which they rely turn negative, but in opposing those changes, creative businesses will find allies across a wide range of industries and sectors.
Any business leader that wants to throw their weight behind opposing these changes on moral or ethical grounds is more than welcome to, of course – that’s a laudable stance – but regardless of personal ideology, the whole industry should be making its voice heard. The livelihoods of everyone working in this industry may depend on the willingness of the industry as a whole to identify these commercial threats and respond to them clearly and powerfully.
Physical retailers are calling for a change in how video game pre-orders are conducted.
They are speaking to publishers and platform holders over the possibility of selling games before the release date. Consumers can pick up the disc 1 to 3 weeks before launch, but it will remain ‘locked’ until launch day.
The whole concept stems from the pre-loading service available in the digital space. Today, consumers can download a game via Steam, Xbox Live and PSN before it’s out, and the game becomes unlocked at midnight on launch day for immediate play (after the obligatory day one patch).
It makes sense to roll this out to other distribution channels. The idea of going into a shop to order a game, and then returning a month later to buy it, always seemed frankly antiquated.
Yet it’s not only consumer friendly, it’s potentially retailer and publisher friendly, too.
For online retailers, the need to hit an embargo is costly – games need to be turned around rapidly to get it into consumers’ hands on day one.
For mainstream retailers, it would clear up a lot of confusion. These stores are not naturally built for pre-ordering product, with staff that are more used to selling bananas than issuing pre-order receipts. The fact you can immediately take the disc home would help – it could even boost impulse sales.
Meanwhile, specialist retailers will be able to make a longer ‘event’ of the game coming out, and avoid the situation of consumers cancelling pre-orders or simply not picking up the game.
Yet when retail association ERA approached some companies about the prospect of doing this, it struggled to find much interest from the publishing community. So what’s the problem?
There are a few challenges.
There are simple logistical obstacles. Games often go Gold just a few weeks before they’re launched, and then it’s over to the disc manufacturers, the printers, the box makers and the distributors to get that completed code onto store shelves. This process can take two weeks in itself. Take the recent Nioh. That game was available to pre-download just a few days before launch – so how difficult would it be to get that into a box, onto a lorry and into a retailer in advance of release?
It also benefits some retailers more than others – particularly online ones, and those with strong distribution channels.
For big games, there’s a potential challenge when it comes to bandwidth. If those that pre-ordered Call of Duty all go online straight away at 12:01, that would put a lot of pressure on servers.
Piracy may also be an issue, because it makes the code available ahead of launch.
The end of the midnight launch may be happening anyway, but not for all games. If consumers can get their game without standing in the cold for 2 hours, then they will. And those lovely marketable pictures of snaking queues will be a thing of the past.
None of these obstacles are insurmountable. Getting the game finished earlier before launch is something that most big games publishers are trying to do, and this mechanism will help force that issue. Of course, the disc doesn’t actually have to contain a game at all. It can be an unlock mechanism for a download, which will allow the discs to be ready far in advance of launch. That strategy is significantly riskier, especially considering the consumer reaction to the same model proposed by Xbox back in 2013.
As for midnight events, there are still ways to generate that big launch ‘moment’. Capcom released Resident Evil 7 with an experiential haunted house experience that generated lots of media attention and attracted a significant number of fans. Pokémon last year ran a big fan event for Sun and Moon, complete with a shop, activities, signing opportunities and the chance to download Mew.
So there are other ways of creating launch theatre than inviting consumers to wait outside a shop. If anything, having the game available in advance of launch will enable these theatrical marketing events to last longer. And coupled with influencer activity, it would actually drive pre-release sales – not just pre-release demand.
However, the reality is this will work for some games and not for others, and here lies the heart of the challenge.
Pre-ordering is already a relatively complex matter, so imagine what it’ll be like if some games can be taken home in advance and others can’t? How many instances can we expect of people complaining that ‘their disc doesn’t work’?
If this is going to work, it needs cross-industry support, which isn’t going to happen. This is a business that can’t even agree on a digital chart, don’t forget.
What we may well see is someone giving this concept a go. Perhaps a digital native publisher, like Blizzard or Valve, who can make it part of their PR activity.
Because if someone like that can make the idea work, then others will follow.
Facebook is closing around 200 of its 500 Oculus Rift virtual-reality demo stations at Best Buy locations across the US.
Apparently the move is because of poor “store performance” which is spin for the fact that few people are even trying the technology out.
Business Insider claims it is common for them to go days without giving a single demonstration.
Oculus spokeswoman Andrea Schubert insisted that the closings were due to “seasonal changes”.
“You can still request Rift demos at hundreds of Best Buy stores in the US and Canada. We still believe the best way to learn about VR is through a live demo,” she enthused.
Best Buy said stores that no longer offer demos will continue to sell the Oculus Rift headset and accompanying touch controllers. But it apparently interests in the headsets dried up after Christmas.
Another worker from California said that Oculus software bugs would often render his demo headsets unusable.
Take-Two today reported its financial results for the three months ended December 31, and they paint a mixed picture of the company’s performance for the holiday season.
Speaking with GamesIndustry.biz, Take-Two chairman and CEO Strauss Zelnick touted the company’s holiday slate of releases, mostly updating numbers revealed around Take-Two’s last earnings report. Mafia III has now sold-in approximately 5 million copies, while Civilization VI has surpassed 1.5 million units sold-in. NBA 2K17 has sold-in nearly 7 million units (up about 10% year-over-year), while Grand Theft Auto V continues to move copies, with sell-in now topping 75 million. Its recurrent consumer spending business (virtual currency, microtransactions, and DLC)has also done well, Zelnick said, noting that Grand Theft Auto Online posted a record number of players in December.
Despite some of those gaudy numbers, the quarter was not an unqualified success. The publisher reported GAAP net revenues of $476.5 million, up 15% year-over-year but near the low end of its $475 million to $525 million guidance. Additionally, Take-Two’s guidance called for a net income of $17 million to $30 million, but it ultimately posted a net loss of $29.9 million for the quarter.
“I know it’s a bit clouded by GAAP reporting, which requires us to defer revenues, and requires us to accelerate costs related to those deferred revenues, so we have a mismatch,” Zelnick explained. “It can look like, from a GAAP point of view, that we’re not doing as well as we’re doing from a bookings and cash flow point of view.”
Total bookings for the quarter did indeed jump 51% year-over-year to $719 million, with the aforementioned titles and WWE 2K17 serving as the largest contributors to that number. Bookings from recurrent consumer spending did particularly well, growing 55% year-over-year and making up 23% of the company’s total bookings.
The holiday quarter also saw the release of Take-Two’s first VR efforts, Carnival Games VR and NBA2K VR Experience. The company didn’t provide any performance metrics for those titles, but it’s clear Zelnick wasn’t counting on them to contribute too much.
“We were happy to bring the titles to market because it was a reflection of the fact we have the R&D abilities to address video games in a VR format if and when that’s a meaningful part of the business,” he said. “I have expressed skepticism in the past, and I think that’s been borne out by the fact that the market for VR in video games remains quite small.”
Zelnick also addressed the company’s $250 million acquisition of Social Point, the Barcelona-based mobile developer of Dragon City and Monster Legends. As for how the new studio will be integrated into the company, Zelnick said the goal was more to support them to continue doing what they’ve already been successful doing, while being mindful not to mess with what works.
“What we like about Social Point is they have multiplicity, it’s not just one [hit] and that distinguishes them from a lot of people in this space,” Zelnick said. “And they know how to monetize those hits and interact with their audience. I’m hoping we can help them grow even faster, but minimally, we want to be supportive so they can keep doing what brought them to this place in the first place… the way we tend to integrate new creative acquisitions is we want those companies to retain their identity and their independence, and to continue to do what works in the market.”
That’s not to say the company is abandoning all hope of synergy. Zelnick said he hopes Take-Two can help lend its experience in Asian markets to help Social Point find success in those territories, while acknowledging that Take-Two can probably learn a few things about monetizing in a free-to-play environment that could be brought to bear on titles like NBA 2K Online and WWE Supercard.
Nintendo, is finally getting around to embracing third party development tools including the Unreal Engine.
Nintendo has always had trouble getting third-party developers to make games for its consoles, but the Switch is supposed to show off a new image for the former playing card maker.
Game designer Shigeru Miyamoto has announced that Nintendo engineers have been learning how to use third-party apps and especially the Unreal Engine.
The Switch, like the Wii U, supports the Unreal Engine but has not been particularly enthusiastic about it.
Nintendo’s Shinya Takahashi said Nintendo now wants to develop an environment where “a variety of different third-party developers are able to easily develop compatible software”.
Miyamoto also suggested that Japanese developers no longer are behind their western counterparts when it comes to third-party engines. He added that his engineers’ skill set can “now be compared with those of Western developers”.
While Nintendo will stick to using its own development tools when building games for its new hardware, its engineers are apparently trying to understand one of the most commonly-used game development engines.
Ever since Nintendo’s shares rocketed after the launch of Pokémon Go – and despite the worldwide phenomenon not being a Nintendo product – and the surprise announcement of Super Mario Run, all eyes have been on the platform holder’s mobile strategy need to be free.
Analysts and even the mainstream media have been quick to comment on the potential for traditional games brands in the mobile space, but in all the excitement some people seem to have forgotten several publishers have already made their mark on smart devices with their best-selling IP.
Square Enix, in particular, has a very healthy mobile business thanks to ports of Final Fantasy, Tomb Raider and Dragon Quest games, new IP such as Heavenstrike Rivals, and the acclaimed Go series that has so far offered new takes on the Hitman, Lara Croft and Deus Ex series. The Go games are developed by the mobile team at Square Enix Montreal, led by head of studio Patrick Naud, who tells GamesIndustry.biz that Nintendo’s determined push into mobile further validates what the Japanese publisher has already been doing for more than half a decade now.
Naud goes on to observe that Nintendo’s efforts also illustrate what Square Enix has long since been exploring with its biggest properties: that these brands can help encourage more core players to investigate the gaming possibilities afforded by smart devices.
“Games like Mario will open the road for other big console IPs and get more core players to give mobile a chance,” he says. “Sadly, mobile doesn’t have the best image for some gamers – and I understand why. I’m one of those guys who plays both console and mobile, but you need to find positives that bring you to mobile and ideally open up your mind to playing more mobile games.
“I hope that Mario did this. It’s sad to see so much negative press around it, particularly around the business model because I feel it’s a clever way to have people try the game first.”
“It’s sad to see so much negative press around Super Mario Run, particularly around the business model because I feel it’s a clever way to have people try the game first”
The backlash against Super Mario Run’s £7.99 price point, prompting scores of one-star reviews when the game launched, seemed baffling to many in the industry – myself included. While it’s undeniably more expensive than most premium games on the App Store, Square Enix had charged more than double that for mobile games. A casual glance through the firm’s catalogue shows ports of the early Final Fantasy games to range from £7.99 for FFII to a whopping £20.49 for FFIX. And its mobile business certainly doesn’t seem to have suffered. Why shouldn’t Nintendo charge that amount for its most valuable of IP?
Naud agrees, adding: “And I’d argue they’ve crafted a new epic Nintendo-like experience specifically for mobile. It’s Mario, and yes it’s inspired by the old Mario games, but there are new rules, new ways to play. In terms of level design and the way you play the game, it’s completely different to anything you’ve seen. You’ve got all the brains at Nintendo finding a way to play a Mario game on a phone, and it works, and it’s deep, it has the depth of all the Mario games. So yeah, it’s potentially worth more than what we usually pay.”
Now deep withing the rabbit hole of mobile pricing, the conversation turns to questioning why so many mobile users are less than keen on investing in quality games for their device. As Naud points out, people have been accustomed to paying £40 or more for new console game for decades, and yet they remain reluctant to spend far less on a mobile game? Why?
“When you go on your phone and you buy a game, you go to the app store, not the games store. They’re presented to people as an app. Apps are free”
“One key thing is mindset,” he suggests. “When you go on your phone and you buy a game, you go to the app store, not the games store. People who are willing to pay £15 for a game on Steam are struggling to pay a couple of quid for on mobile, sometimes for the same game. But what’s the difference? It’s because they’re presented to people as an app. Apps are free.
“We still need great games to push other great games. Whenever you have really good mobile titles, people go back to playing on their phones and realise there is some quality content on there. It’s a self-fulfilling prophecy. We’re going to keep making great games, hoping that it encourages other studios to celebrate doing the same. If people start demanding better experiences, or raising their standards of what they expect to play, the market can evolve and we’ll have more premium games.”
That’s no small challenge to overcome. In addition to difficulties convincing players to actually pay for their mobile games, there is then the increasingly common expectation that games will be updated and supported for months, if not years to come – and for free. British indie Ustwo Games faced backlash of its own when it dared to charge £1.49 for the expansion to Monument Valley – a high-quality add-on that essentially doubled the game’s content.
But is kowtowing to this attitude, lowering prices to what mobile users expect rather than what publishers would rather charge actually harmful? The Go games Naud and his team have produced are all critical smash hits, so does selling them for less than a fiver not undervalue the work that goes into them?
“The exercise of distilling a brand down to its core essence and making a minimalist game out of it – that’s our big challenge”
“Yeah,” Naud acknowledges. “We could sell it higher, but if the market’s not ready for it… we need to be clever about it, crafting the proper experience and the proper amount of content for the price.
“There’s room for high-quality mobile games and they don’t need to be free-to-play.”
It’s easy to argue that this is why Square Enix, or indeed any other company, turns to ports of earlier releases or scaled-back takes on gameplay such as the Go series when bringing their big console IPs to mobile. Developing more comprehensive titles in the face of such resistance to invest must seem daunting and highly impractical. Square has, of course, dabbled in this with the release of Deus Ex: The Fall – a four to five-hour title that offers almost an identical experience to Human Revolution – but Naud says it is more to do with discerning between what console players think they want on mobile, and what they would actually enjoy.
“I’d argue that people do want to play console games on the go, but they won’t play the same type of experience,” he says. “People that are playing console games or even PC games are seated in their living room, with their nice couch, 7.1 surround sound, 60-inch TV – they’re going to play in a different way than if they were just going to play a five-minute session. So they might not play exactly the same game. That’s why I love the Switch, because it might be the middle ground that finally solves that.
“I assume most of the console players right now are also playing on mobile, but they’re really not playing the same type of experience because they’re not playing it at the same time. If you were to go from playing a first-person shooter on your TV – with that perfect set-up and your super-reactive controllers – to playing a similar game with a thumbstick on a touch screen… it will never be the same experience. Hence why we’re trying to craft experiences that are very much dedicated for mobile audiences and mobile phones.”
Instead, Naud says the key is to “create an experience specifically crafted for mobile” taking into account how smartphone owners interact with their device, their play habits, their usage and so on. In addition to his earlier example of Super Mario Run – offering the depth of a core Mario platformer with a one-touch control system designed for smart devices – he offers Hitman as further proof of how console IP can be re-appropriated for mobile.
Deus Ex Go is the third example of Square Enix Montreal taking a console franchise and distilling its core elements to a mobile-appropriate experience
So far, Square Enix Montreal has taken two approaches with IO Interactive’s flagship IP. Hitman Go focuses on the slow, strategic aspect of planning your kills and utilising any opportunities that present themselves. Hitman Sniper, meanwhile, takes the sniping element along with the sense of puppeteering, manipulating events from afar to set up better kills.
While the latter was partly borne from the popularity of the Hitman: Sniper Challenge digital title that preceded Absolution, Naud reveals the concept also stemmed from the desire to create a new entry in the series “without the constraints of moving in the world”.
“Half the players on Hitman Go, Lara Croft Go and Deus Ex Go discovered the game through the App Store”
“The biggest challenge when playing on your phone is navigation,” he says. “For Hitman, this was by far the smartest way to do it. And we’re still working on Sniper, we’re still updating the game on a regular basis and it’s been a – maybe not as big a critical success as the Go series, but on the financial side it’s been very successful.”
But it’s the Go series that, for Naud, really demonstrates the benefit of bringing blockbuster console IP to mobile devices: introducing the brands to a new audience.
“Half the players on Hitman Go, Lara Croft Go and Deus Ex Go discovered the game through the App Store,” he said. “Regardless of whether they were already fans or not, that’s how they discovered them. They got to them because they were recommended by Apple, or their friends. We actually have way more mainstream players for the Go games than Hitman players.
“Any time we do a Go game, it needs to be a different take [on the series], it needs to feel like the original, big console IP but with its own personality. All the critical acclaim made it clear that we’ve succeeded for a third consecutive time.
“The art direction of all three games is completely different and yet the gameplay is somewhat similar. You understand the rules, you don’t need big tutorials, it’s not that complex. For us, the exercise of distilling a brand down to its core essence and making a minimalist game out of it – that’s our big challenge.”
To date, Square Enix Montreal has only been granted access to Western and former Eidos franchises: Hitman, Tomb Raider, Deus Ex. With Final Fantasy, Dragon Quest and even Kingdom Hearts already establishing a foothold on mobile, could we see these Eastern IP receive the Go treatment?
“We’ll see,” says Naud. “Even if anything was in development, I couldn’t say anything – you know that. But we’re constantly thinking about what we could do next, what kind of projects we can work on, what we’ve learned from the Go games that can potentially take us in a new direction.”
The global semiconductor industry had a record breaking 2016 according to the Semiconductor Industry Association (SIA).
While semiconductor sales for 2016 saw a slight increase of 1.1 per cent rise compared to the 2015 total, 2015 was good too.
The global semiconductor industry posted sales of $31 billion in December 2016, flat on month but 12.3 per cent higher than year-ago levels. Sales for the fourth quarter of 2016 came were $93 billion, rising 12.3 per cent on year and 5.4 per cent on quarter, the Association wrote.
Association president and CEO John Neuffer said that 2016 began poorly but the global semiconductor market picked up steam mid-year and never looked back reaching nearly $340 billion in sales.
“Market growth was driven by macroeconomic factors, industry trends, and the ever-increasing amount of semiconductor technology in devices the world depends on for working, communicating, manufacturing, treating illness, and countless other applications. We expect modest growth to continue in 2017 and beyond,” he said.
Logic was the largest semiconductor category by sales with $91.5 billion or 27 per cent of the total semiconductor market. Memory chips made $76.8 billion and micro-ICs $60.6 billion.
Sensors and actuators was the fastest growing segment, increasing by 22.7 per cent. Other product segments that posted increased sales in 2016 include NAND flash memory, which reached $32 billion in sales or a 11 per cent annual increase.
Digital signal processors sold 2.9 billion or a 12.5 per cent, diodes sold $2.5 billion or an 8.7 per cent increase. Small signal transistors sold $1.9 billion or a 7.3 per cent while analogue chips sold $47.8 billion or a 5.8 per cent increase.
You know a company has had a rough set of results when its CEO needs to publicly state that they represent the lowest extent of a slump, with a bounce surely to follow; this being essentially the line that Nintendo boss Tatsumi Kimishima attempted to soothe worried investors with this week. It didn’t exactly work; Nintendo shares, which had been trading at their highest levels in five years, dropped back below the 23,000 Yen mark for the first time since last September. The figures reveal sentiment; investors aren’t sold on the Switch, don’t really know what to make of Super Mario Run, and while they’re generally more positive on Nintendo than they were a couple of years ago, they’re feeling jittery and nervous about the firm’s prospects.
As well they should. In fact, 2017 is likely to be a rollercoaster of a year for Nintendo investors, and those nerves are likely going to get more and more jangled as the year rolls on. The reason for that is simple; Nintendo is taking risks, and they’re not the kind of risks that it’s easy to calculate an over-under on. That makes them into the kind of risks that investors love and hate at the same time – but mostly hate. If Nintendo’s risk-taking pays off, it might soar, but there’s also a strong chance it’ll all come crashing down, and the worst part is, nobody can accurately assess what the risk of either of those scenarios, or anything in between, may be.
There are essentially two major risks Nintendo is taking on. The first, of course, is Switch. The company is hoping for Wii-like sales of the device; almost anything would be an improvement over the Wii U, of course, but in reality it probably needs to hit 40 or 50 million to be considered a genuine success, while anything below 20 million would be enough of a disappointment to cast a pall over the company’s entire future in the home console business. Switch is a high-concept device, quite unlike anything else on the market; from the control system it affords to the mixed-mode portable/home console design of the system, it’s a genuinely unusual piece of kit (far more so than the Wii U was) and that alone will undoubtedly inspire a lot of early adopters to pick one up out of sheer curiosity. It could ignite the imagination of a wide swathe of consumers and become a must-have entertainment device, like the Wii before it. It could equally prove attractive only to Nintendo’s fanbase and sink into much-loved but commercially disastrous obscurity like the Wii U.
My personal guess is that it’ll do far better than the Wii U, but come nowhere close to the success of the Wii, but I’m at pains to call that a guess and nothing more. Anyone demanding that their forecast of the device’s performance is of more worth than mere guesswork is, bluntly, a bit of a charlatan. Not only is the market into which Switch is launching extremely poorly understood at the moment (find me a single soul who predicted pre-launch that PS4, at this point in its lifespan, would be outselling the mighty PS2?), with vast new differences emerging between different global markets and demographic groups, the device itself also has no clear analogues to which we might look for guidance. The strength of the Switch is that it’s Nintendo doing something genuinely different and distinctive from its competition – a metric on which the Wii U, ultimately, failed. The weakness of Switch is that that means success or failure, though clearly influenced greatly by traditional factors like software support, is impossible to pin down with a probability calculation.
Having one big, risky venture on the go would be enough to make investors jumpy, but Nintendo has another one running in parallel. The company has been told for years by its investors that it should be involved in the smartphone market, and indeed its recently relatively buoyant share price is largely the result of its initial announcement of a partnership to do just that with DeNA in 2015, and the launch of Pokemon Go last summer. As the company’s titles roll out, though, things are getting a little more grounded and sober, and investors are perhaps recalling that the market they’ve told Nintendo to dive into is one of the riskiest in the business. The first game title created under the Nintendo-DeNA partnership (discounting Miitomo, which wasn’t considered a game, and Pokemon Go, which was simply Nintendo IP licensed out to a different developer, Niantic) was Super Mario Run, which has been largely well-received critically but hasn’t set the world on fire otherwise. Eschewing the F2P business model and the various hooks and enticements it offers for player retention was taken as reassuring by the company’s vocal core fans, but has seen Super Mario Run fade rapidly from consumer consciousness. After a backlash over its $10 price, which laid out just how uphill the struggle for premium-priced mobile games is, Mario Run has managed around a 5% conversion rate and $53 million in revenue so far.
To be clear – that’s not bad, it’s just unremarkable, and not really what investors had hoped for when they pushed Nintendo towards mobile. The company’s next launch, Fire Emblem Heroes, arrived this week and uses the more established business model for mobile titles; a few months down the line we’ll also have an Animal Crossing title on mobile. The thing is that despite the popularity of these franchises and the pedigree of their development teams, their success simply isn’t assured – even the very best mobile developers have had trouble replicating their greatest successes or even being consistently successful with their titles. Many of the world’s biggest mobile game companies are essentially sustained by one huge, evergreen game, and show no evidence of knowing how to bottle that lightning; the reality is that it’s a hugely fickle, difficult market where, even if you produce a brilliant game, external factors (including a pretty big dose of luck) play an inordinately large role in success. Nobody should doubt the quality of the games Nintendo will launch on smartphones, but nobody should consider a gigantic commercial hit to be a sure thing, either.
All that being said, the point here isn’t that Nintendo is going in the wrong direction; it’s that it’s facing a risky, bumpy year ahead, and that’s going to play merry hell with the firm’s relationship with its investors. Since, unfortunately, the media remains convinced that stock markets are magically possessed of grand insights unattainable to mere humans, like a modern-day Oracle of Delphi – where the reality is that stock markets, in their short-term motions at least, are just the sum total of a load of largely not terribly well informed people charging around in blind mob panics – we’re going to see a lot of context-free stories this year about Nintendo’s share price plunging or recovering as the balance of risk seems to sway one way or the other. The reality behind that is that at least in the next few months, the actual nature of that risk profile is going to be utterly obscure to everyone – even to Nintendo itself.
Right now, the wrong direction for Nintendo would be the direction it was headed in two years ago; competing head-to-head with Sony and Microsoft with a home console that was poorly differentiated from the competition; pretending smartphones hadn’t upended its market; making some of the best software in its history for some of the least-played hardware on the market. The right direction is one that changes that path, and change means risk – especially when the only avenues of change available to you involve innovation, untested ideas, and a tough, poorly understood market.
Buried in Nintendo’s statements this week is cause for great optimism; the success of Pokemon Sun/Moon, which are already among the best-selling installments in the series, was built upon the use of Pokemon Go as a marketing and awareness vehicle, allowing Nintendo to reactivate older consumers of the franchise and change the demographic profile of its audience. As a test run for its future strategy of building struts of mutual support between mobile and console titles, it’s been damned near flawless; sure, it got lucky with a timely implementation of AR tech and a lovely marriage of IP to gameplay, but the underlying business strategy has also played out as well as could be hoped. These are the things to watch for in the next year. Ignore the markets; with any company as highly exposed to risk as Nintendo is right now, share price movements will be exaggerated and hypersensitive, even to rumour and falsehood. Watch, instead, for evidence that Nintendo’s actual plans – the things it wants to sell, the consumers it wants to cultivate and the ways it wants to link together its IPs across platforms and approaches – are coming together or falling apart. Only that will tell us whether Nintendo is really going to bounce back, or if Kimishima’s certainty that it’s already hit rock bottom is going to be tested.
Virtual reality will be coming to the Nintendo Switch – just as soon as the company is convinced people can play it for longer periods of time.
The news comes from an interview between Nintendo president Tatsumi Kimishima and Nikkei, as translated by Dr Serkan Toto, CEO of Tokyo-based consultancy Kantan Games. According to Toto’s tweets, Kimishima said Nintendo is studying VR now but will hold off until users can “play for hours on end without problems”.
Nintendo has been extremely cautious about virtual reality, partly due to ongoing reports of nausea and headaches among early adopters. The platform holder’s US president Reggie Fils-Aime also said the technology is “not fun” and “not social”.
However, patents emerged back in December for a virtual reality accessory designed to be used with the Nintendo Switch, suggesting the platform holder is at least preparing to make its new console VR-enabled.
Meanwhile, Kimishima has also detailed prices for Switch’s paid online service, suggesting Nintendo plans to ask for 2,000 to 3,000 yen per year.
3) Nintendo plans to introduce yearly and monthly paid plans for the online service. Again, price range is 2-3,000 yen/year (.70-.50).
— Dr. Serkan Toto (@serkantoto) February 2, 2017
As Toto observes, that translates to between $17.70 and $26.50, or £13.95 and £20.89 for the UK.
Little is know about the paid service yet, save that it will be required for online multiplayer titles and that subscribers will receive a free NES or SNES game every month. Some of the latter will also have online multiplayer added.
While the price point makes Switch’s paid service cheaper than those of PlayStation and Xbox, it will be interesting to see whether consumers deem there to be enough value to signing up. Both PlayStation and Xbox also offer free games every month, often major AAA releases from the past year, and thanks to strong third-party support the number of online multiplayer titles subscribers gain access to is much higher.
The Nintendo Switch launches worldwide on March 3rd, and VG247 reports that Kimishima is confident it will reverse the platform holder’s recent fortunes, with the president claiming Nintendo’s fiscal performance will only improve from here.
He said the Switch’s unique features mean it could sell as well as the Wii – which means Nintendo is targeting sales of around 100m. Regardless of whether or not it reaches that, hopes are high that it beats Wii U’s disappointing lifetime sales of 13.5m.
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.
Former playing card maker Nintendo has managed to make its first profit in four quarters thanks to its mobile gaming division.
For those who came in late, like Nintendo, the game maker did not want to touch mobile gaming with a 10-foot barge pole because it would cannibalise its portable console market. However it looks like it was wrong.
However it warned that there might be trouble ahead as there are lower game downloads for its consoles.
Operating profit reached $284 million in October-December, which is 3.7 percent lower than the same period a year earlier but better than the cocaine nose-jobs of Wall Street expected.
For the year ending March, Nintendo cut its operating profit forecast by a third due to lower game software downloads for its consoles.
Nevertheless, projected income from investments and a weaker yen allowed it to almost double its net profit forecast.
In the nine months through December, the games maker said it earned $93,903,200 from mobile gaming, accessories and related merchandise, including from its first Nintendo-branded mobile game, Super Mario Run. The figure was up from $ 36 million in the same period a year earlier.
Super Mario Run, featuring the princess-rescuing Italian plumber, has reached about 78 million downloads since 15 December, Nintendo said.
But the game has also received a high number of reviews from users complaining mainly about its $9.99 one-time cost, with less than 10 percent of users paying to unlock all features. Most mobile games are free to play and charge small payments for special features.
Nintendo has said it plans to release around 3 mobile games a year, with two titles – Animal Crossing and Fire Emblem – planned for the coming months.
Still, it continues to regard mobile gaming primarily as a means of luring players to its mainstay consoles. Nintendo’s president, Tatsumi Kimishima, said at a news briefing on Tuesday that the games maker plans to move up production plans to meet orders.
The positive reviews pouring in from all corners for Capcom’s Resident Evil 7 are a welcome validation of the firm’s decision to go in quite a radically new direction with the series, but Capcom isn’t the only company that will be happy (and perhaps a little relieved) by the response to the game. A positive reaction to RE7 is also hugely important for Sony, because this is the first real attempt at proving that PSVR is a worthy platform for full-scale, AAA games, and much of the credibility of the nascent VR platform rests on RE7.
Although some of the sentiment in reviews of the game suggests that the VR mode is interesting but somewhat flawed, and several reviewers have expressed a preference for playing on a normal screen, the game’s VR aspect undoubtedly fascinates consumers and seems to be implemented well enough to justify their interest. In the process, it also justifies Sony’s investment in the title – the company did a deal that secured a year-long VR exclusivity window for PSVR – and Capcom’s own faith in the burgeoning medium, which undoubtedly played a large role in the decision to switch the entire game over to a first-person perspective.
The critical success of RE7, and the likely commercial success that will follow, comes at a crucial juncture for PSVR. Although the hardware was well-reviewed at launch and remains more or less supply-constrained at retail – you certainly can’t get your hands on one without paying a hefty re-seller premium in Japan at the moment, and believe me I’ve tried – there’s an emerging narrative about the VR headset that’s distinctly negative and pessimistic. Plenty of op-eds and videos have popped up in recent weeks comparing PSVR to previous Sony peripheral launches like PlayStation Eye and PlayStation Move; hardware that was launched with a lot of heavy marketing support but which the giant company rapidly seemed to lose interest in, condemning it to a few years of token, declining software support before being quietly shelved altogether.
It’s worth noting, of course, that neither Eye nor Move actually died off entirely – in fact, both of these technologies have made their way into PSVR itself, with the headset essentially being an evolution of a number of previous Sony technologies that have finally found a decent application in VR. However, there’s no question but that Sony has a bad track record with peripherals, and those interested in the future of PSVR should absolutely be keeping a close eye on the company to see if there are any signs of it repeating its past behaviour patterns.
Most of what’s being written now, however, feels premature. PSVR had a pretty solid launch line-up, with good support from across the industry; just this week it got its first truly big third-party AAA title, which is receiving excellent reviews, and later in the year it’s got some big launches like GT Sport on the way. The pace of software releases slumped after the launch window, but that’s not unusual for any platform. There’s nothing about PSVR that you can point to right now and declare as evidence of Sony’s focus shifting away; it feels like editorials claiming this are doing so purely on the basis of Sony’s track record, not the facts as they exist now.
If you really want to know how PSVR is shaping up, there are two key things to watch out for in the near future. The first will be any data that’s released regarding the performance of RE7’s VR mode; is it popular? Is it being played widely? Does it become a part of the broad conversation about the game? Much of this latter aspect is down to Sony and Capcom’s marketing of course; there’s an opportunity to push the VR aspect of RE7 as a genuinely unique experience with appeal even beyond the usual gaming audience, and if that can be capitalised upon, it will likely secure PSVR’s future to a large degree. What’s crucial, though, is that every other company in the industry will be watching RE7 like hawks; if proper, well-integrated PSVR support seems to be a major selling factor or a popular feature, you can be guaranteed that other publishers will start to look at their major franchises with a view to identifying which of them would suit a similar “traditional display plus optional VR” approach.
The other thing to watch for, unsurprisingly, is what Sony does at E3 and other major gaming events this spring. This is really where we’ll see the proof of the company’s focus – or lack of same. There’s still plenty of time to announce VR titles for the back half of this year, which is likely to be the crucial point for PSVR; by the time we slip into the second half of 2017, the hardware will no longer be supply constrained and the early adopters buying for novelty will be all but exhausted. That’s the point in time where PSVR’s software line-up really needs to come together coherently, to convince the next wave of potential purchasers that this is a platform worth investing in. If it fails that test, PSVR will join Move and Eye in the graveyard of Sony’s failed peripherals; success will turn it into a cornerstone of the PS4 for the coming years.
So keep a close eye on E3. Part of this is just down to optics; how much time and focus does the firm devote to PSVR on stage at its conference? If it’s not very much, if the PSVR section feels rushed or underemphasised, that will send a strong message that Sony is back to its old bad habits and has lost interest in its latest peripheral already. A strong, confident PSVR segment would convince consumers and the industry alike that the headset isn’t just another easily abandoned gimmick; better yet if this is backed up by plenty of the big games being announced having PSVR functionality built into them, so the device can be referred back to repeatedly during the conference rather than being confined to its own short segment.
It’s more than just optics though; the reality is that PSVR, like any platform, needs software, and Sony needs to lead the way by showing that it’s truly devoted to its own hardware. It may seem a little unfair that people are already keen to declare PSVR to be stumbling due to lack of attention, and well, it is a little unfair – but nobody should be surprised that people are seeing a pattern here that Sony itself clearly established with its behaviour towards previous peripherals. That’s the reputation the firm has, unfortunately, created for itself; that makes it all the more important that it should convince the world of its commitment to PSVR when the time comes.
In the summer of Pokémon Go Mania, it is easy to forget that there was a different obsession gripping fans of another iconic 1990s franchise. The Resident Evil 7 demo (released during E3 last June) was a creepy experience where you had to escape a dilapidated house owned by a murderous family. It went down well with horror fans; so well in fact, that when players stumbled upon a seemingly useless item – a mannequin finger – it turned into an obsession. Twitch streamers would play the demo for hours on end in an effort to uncover its mystery, theories would pop up on forum threads that would go on for hundreds and thousands of pages, and my inbox was full of friends – as if I had some insider knowledge – asking me: ‘What does the finger do? Will it get me out of the house?’
“We were really surprised by all that,” says Resident Evil 7 producer Masachika Kawata “We were planning to update the demo, but also leave a few loose threads, imply bigger things and just have odds and ends for you to discover, and one of those just so happened to be a mannequin finger. But the fact that it became such a focus of people’s attention, that was something that took us quite by surprise.”
Game director Koshi Nakanishi adds: “It certainly put a lot of pressure on us to put out the next update to the demo. We went faster on that than we had originally planned because of the explosive buzz around the finger. We didn’t want people to wait too long. This was the summer of last year, so we were working on a demo update while we were also in the middle of the development of the main game. Doing those things in parallel was certainly difficult for us.”
The Resident Evil 7 demo was a strategy that certainly seemed to work for Capcom. The concept was borrowed almost wholesale from Konami, which announced its horror game Silent Hills via the demo PT. Silent Hills was cancelled soon after and PT was removed from the PlayStation Store, disappointing horror game fans the world over. Capcom capitalised on that, although Nakanishi and Kawata insist its decision to do a demo was more about educating fans than anything else.
“With the launch announcement trailer for Resident Evil 7, we made a promise that we were going back to horror,” Nakanishi explains. “So we wanted to have a horror-focused demo that told gamers that they can trust us when we say: ‘Resident Evil is a horror game once more’. At the same time, it wasn’t the right moment to tell everybody about everything that is in the game in terms of gameplay. We wanted to get them on-board with the horror aspect first, and then the rest of the dominoes could fall. That’s why we decided to have a demo featuring just horror and no combat. Yet as the campaign progressed, and people accepted the new direction, we started to announce more details about characters and combat, and we could update the demo.”
Resident Evil 7’s reviews have just started to emerge, and the reception from critics is that Capcom has managed to rejuvenate its biggest IP after a couple of disappointing releases.
In particular the last game. Resident Evil 6, released in 2012, sold well but received a kicking from the consumer press. The game was bloated and more an action blockbuster than a horror game. However, although critics – and die-hard fans – were disappointed by the direction the series had been heading in, the franchise’s popularity had never been higher. Resident Evil 6 is the second most successful game Capcom has ever released, just behind the equally action-orientated Resident Evil 5.
“From a business perspective, Resident Evil 6 was a success,” acknowledges Kawata “But we had pushed that style of Resident Evil gameplay, with the big storyline and the hero characters, pretty much as far as we could. It was a blockbuster scale of game. That almost left us with no choice but to change the series in order to keep it alive, because where do you go after that size and scale of game?”
He continues: “Certainly if you compare the sales of Resident Evil 1, 2 and 3 as a unit [the more traditional horror games], and compare it to Resident Evil 4, 5 and 6 [which are more action-orientated], the sales were a lot higher on the more recent titles. But that’s not just because of the types of content, we have got better at selling our games. The market has got bigger as well. So just because we are going back to horror, I don’t expect we will see a drop to historical levels. The whole company is behind this title and the horror approach, and I’m confident that we are going to do well with this one.
“We also take a look at lifetime sales, and not just day one. Because some fans might be on the fence a bit, and be unsure about the new direction. So whether or not that has an effect on our initial out-of-the-gate sales, I am not sure yet. But over the lifetime of the product, I’m sure we will be able to hit our targets.”
“Although the situation with horror games is not the same as it was the last time we released a mainline title, we do still feel we can appeal to a lot of people, including hardcore horror fans.
Masachika Kawata, Capcom
The survival horror genre has had an interesting few years. Via the indie scene, it’s enjoyed somewhat of a renaissance via the likes of Slender Man and Outlast. However, the results have been mixed in the triple-A space. In 2014, Sega released Alien: Isolation, while just a few weeks later Bethesda launched The Evil Within (which was from the original creator of Resident Evil). Both titles were well received by critics, but commercially they failed to dissuade the theory that the survival horror genre was past its prime.
“The market for horror games has changed over the years, I suppose,” Kawata adds. “But Resident Evil has always been a series that keeps up, it isn’t afraid to change the style of gameplay. We have evolved a lot over the years in order to meet the needs of the market and our fans. So although the situation with horror games is not the same as it was the last time we released a mainline title, we do still feel we can appeal to a lot of people, including hardcore horror fans.
“And the fact that we have rival titles in the horror space is not a bad thing, because it only increases the market for horror games as a whole. And we will do the same when we release this game. There will be a further hunger for more horror games in general, and that can only be a good thing for us in the long term.”
Mr Baker is not someone to be trifled with
Resident Evil 7 brings back many of the classic components of past games in the series, including item management and save rooms. There’s also a huge mansion to explore, which evokes memories of the very first title in the franchise. It still feels distinctly like a Resident Evil game, but the developer has made a number of major changes, particularly in terms of the perspective. Whereas all the mainline Resident Evil games have adopted a third-person view, Resident Evil 7 has gone first-person – and for the first time since the Gun Survivor/Dead Aim light gun series on PlayStation 1 and 2. It follows in the footsteps of Outlast, Slender Man and Alien: Isolation, which also used a first-person view.
“The first-person perspective is one way to make any kind of game, it is an option that you have at any time,” Nakanishi says. “And as Kawata-san says, after Resident Evil 6 we had to reflect upon what the series was and where it was going. Some fans had said that Resident Evil 6 had lacked focus, and I wouldn’t disagree, and it was certainly one of my concerns in terms of how far we were going in that direction. So bearing that in mind, having a more focused, scarier, intimate Resident Evil was needed. We wanted to be able to not only do that, but also bring this more focused and scary experience to players in a very fresh and novel way that hadn’t been seen before in a Resident Evil.
“Some fans had said that Resident Evil 6 had lacked focus, and I wouldn’t disagree.”
Koshi Nakanishi, Capcom
“If you have a mission in mind to make a very immersive, atmospheric survival horror game, first-person is a good way to achieve that. The first-person viewpoint was more an obvious answer in terms of how to achieve our goals for Resident Evil 7, than being particularly inspired by any other external influences in the horror genre.”
That first-person perspective also enabled Capcom to capitalise on another new trend in the games sector – virtual reality.
“Going back about two and a half years, when we decided on the first-person perspective, it was obvious to say: ‘Oh you could do VR because first-person is the typical VR experience’,” he explains. “But it was just a vague idea at that point, and it wasn’t until later in development that we actually implemented VR. It was something that was relatively easy to do since we were at a stage where we had an atmospheric first-person experience in place.”
Nothing was cut from the game to better fit VR, but there were a few tweaks, including measures to reduce camera shaking in order to “make VR more comfortable”. Yet one thing the studio was a little concerned about is how scary the experience can be. The game is obviously meant to be frightening, but as anyone that played the demo at E3 will tell you, being completely immersed in that house can be quite an overwhelming experience. At E3, Capcom reps were recounting stories to me about how several journalists had asked to have the headset removed.
“When people are playing the game in VR for the first time, you do find yourself telling them not to push themselves and respect their own personal limits when it comes to intensity of experience in VR,” Nakanishi says.
Kawata adds: “I would almost recommend that if people are not sure, or think VR is too much for them – even if you have a PSVR at home – there’s no pressure to use it when you play the game for the very first time. Play the game normally first, see how you like it, see how scary it is for you on the TV, and then consider whether you want to jump into the VR mode. As it is so easy to change into VR as well, you can just take it at your own pace.
VR and first-person aside, some of the other changes Capcom made was in terms of development approach. As well as building a new engine (aptly titled the RE Engine) the team also adopted photogrammetry when putting items and even actors in the game. Capcom would fully scan the subject and simply place it in the game, with no need for additional drawing. The firm hopes this had improved the realism of the experience, although it wasn’t without its challenges.
“With photogrammetry, the actors needed to be in costume, they needed to be wearing movie-style make-up so that they look exactly like we want for the final game.”
Koshi Nakanishi, Capcom
Nakanishi concurs: “You get quick results, although the preparation takes a lot more work. Actors were difficult. Whenever you scan an actor, what I would prefer to do – and have done in the past – is take that scan and touch it up, but with this it tends to head into unrealistic territory. It doesn’t look good if you have a scan and start fiddling with it. So you have to get it really right at the scan stage. So the actors need to be in costume, they need to be wearing movie-style make-up so that they look exactly like we want for the final game. That way, once the scan is done, then you pretty much have the final result. That sort of preparation was a lot more difficult than with other processes.”
There’s also been a significant change when it came to writing. Resident Evil has a reputation for terrible dialogue, and fans would argue that’s part of its B-movie charm (although it’s probably more to do with bad translation). It’s never easy for a Japanese studio to try and build a convincing game set in a Western environment, and so the team hired Texan writer Richard Pearsey (best known for FEAR and Spec Ops: The Line) to help them Westernise its latest effort.
“The reason we hired Richard was for cultralisation, really,” Nakanishi explains. “The series is famous – especially the first titles – for having weird, cheesy english dialogue. Things like: ‘You were almost a Jill Sandwich’… it’s well known by now. It’s been part of the fun of the series in many ways, but you certainly couldn’t say the old lines were especially naturalistic. Coming to the modern day, although we love that classic stuff, if you want to make a serious horror game, you need to have a natural dialogue. It has to feel right and can’t be something that’s been translated badly from Japanese, or whatever.
“So at Capcom, we worked on the flow of the game from start to finish, and put in place the general storyline. And then Richard made the dialogue make sense, polished it up for us and made suggestions on how to make things stick together better. So that when the player plays it, it feels like almost natively Western.”
There’s still a level of uncertainty over whether the game will be successful. There are question marks over the genre, the impact of previous disappointing Resident Evil games and the fact it’s coming out in January – a month not known for high game sales. You could also argue that in today’s uncertain political and economic environment, we could probably do without a horror game.
Even so, this is the most impressive Resident Evil title since the groundbreaking Resident Evil 4 in 2005. And it’s been backed by a major PR and marketing campaign – including some inventive live-action experiences and those expansive demos. Capcom has given it its best shot, now it’s a case of seeing whether the market responds.