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.
It’s ancient history now, but once upon a time, if you wanted to play the most recent and most interesting games, you had to get up, leave the house and make your way to an arcade. Games consoles and home computers lived further down the food chain, their owners waiting for often sub-par versions of glorious arcade hits to be released on home systems. The real experience happened in an arcade.
Even to those who experienced that era, it’s a little hard to believe when you look at the sad remnants of their former glory which remain. Even in supposedly arcade-mad Japan, games generally find themselves wedged ignominiously in between gambling machines occupied by middle-aged chain-smokers and UFO Catcher booths promising, but rarely delivering, stuffed toys and sweets for bored teens on dates. In western countries, sad, lonely fighting game machines are just stuffed in where “arcade” owners ran out of fruit machines to install.
The reasons for this change are fundamentally technological. Arcade machines are big, bulky and expensive to move or replace. Once, that meant that they were vastly more powerful than home systems – but the accelerating pace of technological progress turned the size and expense of arcade machines into a liability rather than an advantage. Cheap, rapidly updated computers and consoles (and eventually even phones) first matched and then far outstripped the processing capabilities of big arcade cabinets. Rapid updates in graphics, processing, storage, networking, controls and screen resolutions were comfortably adopted by the home market, the costs buffered by cheap, cheerful hardware and absorbed by the wallets of millions of consumers. Arcade operators, faced with replacing large numbers of huge, expensive systems in order to keep track of such changes, fell behind completely.
Social factors either exacerbated or softened this blow, but these were highly region dependent. In Japan, where small family living spaces have engendered a culture in which many social activities are carried out external to the home, arcades persisted as date spots, as places to hang out with friends and – perhaps most importantly – as a venue for games too large, too noisy or too intrusive to be played in a small family home. In parts of the West, though, social factors intervened to hasten the decline, with a perception of arcades as “seedy” venues (in the grand tradition of pool halls and their ilk) discouraging many potential players, while regions with legalised gambling were quick to drop videogames in favour of more profitable slot machines.
Over the years, there has been talk of an “arcade renaissance” on several occasions, yet each time has ended in disappointment. Even as living spaces in many Western countries (the UK is a particularly notable example) have shrunk dramatically in terms of average size, Western consumers have demonstrated a continued willingness to engage with loud, bulky games. Rock Band and Guitar Hero were hugely successful as home games in the West, where their Japanese equivalents, Konami’s Guitar Freaks or Drum Mania, have acted as sustaining lifeblood for arcade venues. It’s also notable that even as Japanese arcades have innovated and invested, launching extraordinary new games which leverage all sorts of new technologies, from the company’s ultra high-speed broadband networks through to the possibilities of RFID enabled cards, the arcade sector’s health has still declined – a drop-off in footfall, revenue and floor space that’s been slower than in the West, but still isn’t exactly the rude health you might have come to believe from fawning articles about amazing Japanese arcades in the western media.
As such, it’s important to be cautious about any notion of an arcade recovery. Yet if we were to envisage any potential uplift in the fortunes of the out-of-home gaming sector, we can easily say what one key factor would be – just as in the heyday of the arcade, these venues would need to provide games which you simply cannot experience at home. This won’t come about, this time around, through more powerful graphics or processing – the trends in those areas are focused on miniaturisation and cost-efficiency, targeting the ability to put high-end 3D into phones rather than building pricey, bulky, ultra high-end systems. Instead, the focus would have to be on experiences that don’t work at home for reasons of space, budget, intrusiveness – or preferably, a combination of all of the above.
The reason I raise this issue now is because in the past few weeks, most of us will have seen videos or demonstrations of technologies which, although their creators purport to be focused on the home market, clearly fall into these categories. One is Microsoft’s Illumiroom system, which uses Kinect to map a 3D space and then projects imagery matched to that 3D map. It’s a great piece of technology with extraordinary gaming potential. It’s also abjectly unsuited to an ever-increasing number of living rooms around the world. Kinect alone is an impossibility for many players due to the space and room layout it demands; Illumiroom, demanding similar space if not more and intrusively taking over the entire room such that nobody else will be able to use it concurrently with the game being played, is simply not going to work for most people and most homes. Outside the home, though, in a dedicated venue? The potential of the technology is extraordinary, the experiences it could create serving to create a destination for gamers to experience something that just won’t work at home.
The same thought process applies, to some extent, to the Oculus Rift. It’s not that the superb VR headset hardware won’t work at home – of course it will, and it’ll probably only be a few hardware generations before the compromises presently being made in the name of cost are ironed out by technological progress. However, the “full” VR experience – with a custom controller (a gun, perhaps, or full-body motion sensing suite), a multi- directional treadmill, and so on, is simply going to be too expensive for most users – and even if prices collapsed, it’s too big and unwieldy to live in most people’s apartments. Yet the entertainment potential of such a fully-functional setup, running in parallel with a dozen other such suites so that a group of friends can explore a virtual world together, is enormous – and from a commercial perspective, not even all that space-consuming.
Of course, technology is just one factor. Technologies such as these (and I’m sure that others exist which also fall into the trap of “amazing, but it won’t work in my house”) can give a compelling reason for people to engage with out-of-home gaming – but the social factors also have to be right if an arcade renaissance is to be possible. Social factors are trickier, in many ways, than getting the hardware and the software right. Losing the seedy, unwelcoming image of the arcade in some regions will be tough; in others, where arcades have died entirely, the marketing of an entirely new social pursuit would present a major challenge. Getting people to try out something like this might be easy; getting them to see a trip to the VR centre with friends as an entertainment option on par with a trip to the cinema is likely to be much harder.
All the same, the entertainment possibilities opened up by technologies of this kind, which are now reaching a mature, usable stage in their development, ought to create an optimism around arcades and out-of-home gaming that hasn’t been seen for some time. Social or commercial aspects could still pull the rug out from any hope of recovery or renaissance – but the potential certainly exists for new kinds of gaming and interactive entertainment to take their place as key social out-of-home experiences in the coming years.
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.
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.
Mac owners will get to play the upcoming release of BioShock Infinite, thanks to Aspyr Media. Aspyr will be handling the Mac conversion, as well as the marketing of the Mac version of the game.
While the Xbox 360, PlayStation 3, and PC versions of BioShock Infinite will arrive on March 26th, the Mac conversion does not have a specific release date beyond its planned arrival at some point this summer.
The news really isn’t that surprising, as BioShock Infinite looks to be one of the biggest titles to be released this year; and, of course, Aspyr should do well with a Mac conversion of the game.
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.
Several Sony stores in the US have discounted the 3G PlayStation Vita by $100, with some branches asserting that it’s because the 3G machine is due to be discontinued.
A news story at Joystiq discovered the price cut, which extends to many but not all of the Sony stores in the US. Wi-Fi only models have not been discounted.
Sony employees from Denver, Las Vegas and New Jersey told Joystiq that the model is being taken off the market, but others were uncertain. Nobody was able to say whether the model would be replaced by a 4G machine or if we’d only see Wi-Fi only Vitas in the future.
The 3G package, which includes an 8GB memory card and a PSN voucher now costs $199.97 and comes with a data plan contract – which would seem to run contrary to any discontinuation rumours. However, if a 4G Vita is in the works, continuing data plan deals with networks would make more sense.
Sony has been contacted for clarification on the story and whether any price cut will become global.
Sony announced its Playstation 4 console last month, with most of the firm’s event devoted to the AMD accelerated processing unit (APU) that will drive the console. Now Nvidia has said that despite its chips not powering Sony’s next generation games console, games developers programming for the console can use its Physx technology.
Nvidia’s Physx technology is a physics library that works on PCs and current generation consoles. It’s no longer limited to the firm’s own GPUs, meaning that AMD’s APU can execute Physx code properly, though perhaps Nvidia would argue slower than its own chips.
Aside from Nvidia’s Physx software, the firm’s Apex SDK also boasts support for the Playstation 4. Nvidia’s Apex is a set of tools that allows games designers to rapidly develop models and interactive game content. Mike Skolones, product manager for Physx at Nvidia said, “Great physics technology is essential for delivering a better gaming experience and multiplatform support is critical for developers. With Physx and Apex support for Playstation 4, customers can look forward to better games.”
Nvidia still wants games developers to use its tools despite not being in at least two of the three next generation games consoles, because it gives the firm a chance for its desktop graphics cards to win benchmarks when games are ported to the PC.
Since Sony decided to keep it simple and talk about games and everything except the actual hardware inside the Playstation 4, AMD’s John Taylor not only decided to write a blog post and elaborate on it, but also gave quite a good hint on what we can expect in the near future.
First of all, we noticed that John Taylor, previously working as Director of GBU Marketing has now become the Vice President of Global Communications and Industry Marketing at AMD, so we are quite sure that we will see quite a few interesting things from him down the road. In case you missed it, John Taylor was leading the product communications at AMD from 2006, before joining the GBU marketing team.
Although he does not reveal any precise details regarding the APU itself, John did shed some light calling it a semi-custom APU. As you already know, an APU is a single chip that combines the CPU And GPU with various system elements including memory controllers, specialized video decoders, display outputs and similar things. What makes it interesting is the actual level of customization that can be done for customers that have a very specific demands.
If you read between the lines, it is quite clear that the APU inside the Playstation 4 will not be the last custom part will see. It pretty much all but confirms that AMD has scored the Xbox Next win as well completing the “Holy Trinity” of consoles. The customization might be an interesting deal as it also means that Xbox Next APU might be a bit different than the one found in the PS4. Of course, it could still end up with the same AMD Jaguar CPU cores that are the main part of the PS4 APU probably the similar GPU part but with such a level of customization, anything is possible.
AMD’s VP of Global Communciations ans Industry Marketing, John Taylor, finished its blog post with quite an interesting line stating that this is going to be a very exciting year for gamers, especially for those with AMD hardware in their PCs and consoles as AMD has even more game-changing announcements still to come.
Nevada has become the first U.S. state to interstate online poker legal and allow state-to-state gaming agreements, beating New Jersey to the punch and putting in place a potential nationwide framework for Internet wagering.
Republican Governor Brian Sandoval signed the landmark bipartisan bill into law last Thursday, authorizing his office to enter into agreements with other states that will in effect allow Nevada-based companies to host interactive gambling for residents of other states.
A number of companies have already been granted Nevada licenses for online poker, but were prepared to be limited to serving Nevada residents. Applicants include social gaming leader Zynga Inc. Shares in Zynga leapt as much as 7.4 percent on Friday.
With the bill, Nevada – home to Las Vegas, the world’s second-largest gambling hub – wants to pave the way for national Internet wagering even though efforts at federal regulation have stalled. Established companies including MGM Resorts and Wynn Resorts hope they can add new customers and pitch online players to come to Vegas.
“This bill is critical to our state’s economy and ensures that we will continue to be the gold standard for gaming regulation,” Sandoval said in a statement after signing the bill on Thursday.
The bill removes a provision requiring federal legislation or Department of Justice approval before online gaming licenses are made active, according to Nevada’s statement.
Nevada’s legislation comes as New Jersey – home to Atlantic City – considers a similar move to legalize online gambling. Republican Governor Chris Christie rejected a measure earlier this month that would have allowed Internet gambling, but has said he would consider approving such a law if it was framed properly.
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…
According to a series of tweets from a representative for Distressed Debt Investing, present during court hearings, Sam Greene of bankers Centerview has said that there are five buyers in active due diligence, with interests in individual THQ games.
However, Clearlake Capital, which has offered $60 million in a stalking horse bid to buy the company and have the deal completed by January 10, has said it will not allow the business and its intellectual property to be split up.
But trustees and creditors of THQ are taking issue with the quick sale, arguing the 30 day window for other bidders is too short to allow parties to fully participate in proceedings.
They also want the option of buying individual assets from the company, rather than being forced to buy the business as a whole. A banker for THQ bondholders is arguing that the proposed sale to Clearlake doesn’t give enough information to value individual titles in the publisher’s portfolio.
The judge overseeing the case does not approve of the current bidding procedures and has told all parties to talk to one another over the weekend and try to work out issues. The court will reconvene on Monday.
Warner Bros was one of the companies that swooped for individual titles when Midway went bust, picking up Spy Hunter and Mortal Kombat franchises.
French publisher Ubisoft has also expressed an interest in THQ, with CEO Yves Guillemot telling GamesIndustry International that he was interested in the company’s brands.
Sources are saying that based on a recommendation of Epic’s former Production Director, Rod Fergusson, Ken Levine says that BioShock Infinite could benefit from another three or four weeks of development. Fergusson fell in love with Infinite and is reportedly living in a hotel in the Boston area as he continues to work on the game.
So, yet again, BioShock Infinite has been delayed from the original release date. If there is anything good about the news it seems that March 26th is set in stone; and we will see it release for Xbox 360, PlayStation 3, and PC when it arrives.
Perhaps the best news is that the release isn’t being rushed to make a release date; and instead, Levine wants to get it right, rather than just get it out. While we have not seen much of the actual game since the announcement, more should be revealed in next month or so as we inch closer to the release of the game.
It appears that Activision, too, is suffering from a leak before its planned release. The Xbox 360 version of Call of Duty: Black Ops 2 has started showing up in all of the usual places in advance of the title’s upcoming official release. The title’s leak onto the Internet is similar to what we saw with Halo 4; and once again, we can expect Microsoft to come down hard on those who are playing the game early.
As with Halo 4, we are also seeing live streams of Black Ops 2. While Activision isn’t talking, sources tell us that the company is actively engaged in seeking out who might have been responsible for the leak. In addition, word of early sales of the game has also been talked about, with consumers saying they have been able to purchase the game ahead of its release in Slovakia.