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GameStop Fires A C-Suite Executive

February 19, 2018 by  
Filed under Gaming

GameStop COO Tony Bartel and EVP Michael Hogan have been let go by the games retail giant.

The news follows the imminent departure of former GameStop CEO Paul Raines, who is stepping down due to a recurring brain tumor, and the appointment of new CEO Mike Mauler – who has been part of the GameStop business for 16 years.

Bartel is one of GameStop’s longest-serving employees, having worked in various senior roles, including president between 2010 and 2015, and COO ever since.

Hogan has been with the firm for 10 years, and was EVP of the firm’s strategic business and brand development. He’s been responsible for the firm’s marketing strategy, pre-owned business and online presence.

Both were terminated without cause, which means they will receive full payments and benefits as stipulated in their contracts.

No replacements have been named.

Courtesy-GI.biz

Microsoft Gaming Division Growing

February 12, 2018 by  
Filed under Gaming

Microsoft today reported its quarterly earnings, giving a glimpse into the health of its gaming business in the process.

Over the final three months of 2017, Microsoft’s gaming business brought in $3.92 billion, up 8% year-over-year. Much of that growth was driven by sales of the Xbox One X, which launched during the quarter at a premium price point of $500. Microsoft said hardware revenues for the quarter were up 14% year-over-year.

Microsoft’s gaming software and services revenues were also up, but not as sharply. The company saw a 4% rise year-over-year, with continuing growth in digital distribution helping offset first-party AAA revenues that were down compared to the previous holiday season. Microsoft’s 2016 holiday lineup included Gears of War 4 and Forza Horizon 3, while the 2017 slate relied on Forza Motorsport 7.

As for Xbox Live, Microsoft reported 59 million active users on the service during the last three months of the year, up 7% year-over-year.

Courtesy-GI.biz

Microsoft Makes A Bold Move With Xbox Game Pass

February 2, 2018 by  
Filed under Gaming

Microsoft has significantly improved its Xbox Game Pass subscription service.

The service was launched in June last year, and initially offered gamers access to 100 Xbox One games for a monthly subscription fee. Most of the games were older, catalogue titles.

Now the firm has made a significant improvement to the service, by offering all Xbox first-party games onto the service. That includes new releases such as the upcoming Sea of Thieves, Crackdown 3 and State of Decay 2.

Xbox head Phil Spencer also wrote in a blog post that the firm is teaming up with GameStop and other retailers to offer a 6-month Xbox Game Pass subscription card. He says that he believes the new business model could create major opportunities for developers and publishers.

“This plan to bring new games timed with their global release into Xbox Game Pass not only includes announced titles like Sea of Thieves, State of Decay 2, and Crackdown 3 but future unannounced games from Microsoft Studios including new iterations of our biggest Xbox One exclusive franchises such as Halo, Forza and Gears of War, on the same day they launch,” Spencer wrote.

“Our fans have also asked for more choice in the subscription offerings available for Xbox Game Pass. As part of today’s library expansion, we are also pleased to announce that we are working closely with our retail partners, such as GameStop, to offer a 6-month Xbox Game Pass subscription card for those fans who look for a variety of ways to purchase and enjoy new games and services. The 6-month Xbox Game Pass subscription card will be available at select retail partners for $59.99 beginning March 20. By working closely with retail partners, Xbox Game Pass will have valuable ambassadors in popular destinations for gamers to discover new and exciting games and enjoy community.

“With the addition of more great games, new blockbuster releases and a new subscription offer, we are giving fans more choice and value in how they discover and enjoy games – purchase games for their permanent library or play through Xbox Game Pass for one low price.

“We’ve only scratched the surface of the opportunity this new model brings to the industry and what we can deliver to our fans. We firmly believe Xbox Game Pass will be a catalyst to create new opportunities for game developers and publishers to innovate in the way games are developed and delivered, leading to entirely new ways to play.

“We’re truly humbled by the incredible response we’ve received to date for Xbox Game Pass, and we look forward to offering an unprecedented choice and value with Xbox Game Pass this spring and beyond.”

Courtesy-GI.biz

U.S. Video Games Industry Jumped To 36 Billion Last Year

January 30, 2018 by  
Filed under Gaming

US games revenue spiked to a record total of $36.4 billion in 2017, according to the Entertainment Software Association.

The report, jointly released by market research firm The NPD Group, shows an 18% growth in revenue generated by the games industry in 2017 over the year prior.

The figure combines hardware revenue, including peripherals, and software revenue from physical and digital sales, including in-game purchases and subscriptions.

Hardware revenue was up by 19% from $5.8 billion to $6.9 billion, while software revenue rose 18% from $24.6 billion to $29.1 billion.

US mobile spend data, which includes paid downloads and in-game purchases for mobile through the App Store and Google Play, was collected from App Annie.

“The spectacular growth of our industry in 2017 proves video game developers, artists, and storytellers are the brightest lights in the US economy, finding more ways to delight the world’s 2.6 billion gamers each year,” said Michael D. Gallagher, president and CEO of ESA.

“Congratulations to our industry’s brilliant creators on delivering another record year of remarkable entertainment that inspired the passion of gamers everywhere.”

Courtesy-GI.biz

With Digital Downloads Rising, Is It Game Over For Video Game Retailers

January 8, 2018 by  
Filed under Gaming

2017 ended up as a solid year for games retailers.

It got hairy at times. Earlier in the year, GAME issued a profit warning and its share price plunged to a worrying level – before a surprise intervention from Sports Direct arrested the slide (the sports retailer bought up a chunk of GAME’s shares).

Over in the US, GameStop’s profit was hit by lagging Xbox One sales – results that would have been worse had it not been for the sale of Kongregate, which added $7.3m to its bottom line.

The first half of 2017 was concerning, and it was following a disappointing Christmas 2016, which suffered significantly from the under-performance of key titles, in particular Call of Duty: Infinite Warfare.

Then things took a turn for the better.

Nintendo Switch was the hero the market needed. Strong launch sales were set back by stock shortages, but that was quickly rectified in time for Christmas. Switch has been a dream for the High Street. The lack of space on the machine’s internal hard-drive means that it has become a very physical-friendly product (IHS estimate that only 20% of Switch game sales are digital), and the variety of accessories has created a plethora of add-on products for retailers to sell.

Then came Call of Duty: WWII, which is on track to be the most successful Call of Duty of the generation.

Those two, combined with continued strong sales of PS4 hardware and software, meant that 2017 was a solid year for the market. In the UK, where physical sales had been declining, overall sales of physical software was flat compared with the year before.

Furthermore, 2017 saw an increase in downloading across the board. This was particularly notable in the AAA console space, where anecdotal reports stated that between 30 – 45% of AAA game sales were now being made via Xbox Live and PSN.

This trend is only likely to accelerate. We are already seeing publishers behave more aggressively in pushing digital retailers alongside physical ones, and we can expect that to increase.

2018 is also likely to see a decline in PS4 sales. We are now into the fourth year of PS4 and Xbox One, and Xbox (physical) sales have already begun to slide. PS4 will likely follow as this generation starts to show its age.

Talk of PS5 and Xbox ‘Two’ is already beginning to surface – with some developers already working on next generation specs – but even the most optimistic of analysts do not expect to see anything before late 2019.

So with digital adoption accelerating, the current generation showing its age and with no major hardware launches on the horizon, 2018 can look bleak for the physical retail market.

It is worth observing that physical games retailers are not oblivious to the market trends. Most major retailers have been transitioning their business models and diversifying, whether that is through events, esports, digital, content, accessories, technology and so on.

Therefore, retailers like GAME and GameStop don’t necessarily need to sell as many games or consoles in 2018 as they did in 2017 to enjoy a strong year.

However, physical game sales remain the bedrock of these businesses, and any significant downturn will have a negative effect. GAME, for one, is aware of this, which is why it has repeatedly told its shareholders of its short store leases, allowing the firm to reduce its store base rapidly if needed.

So what can games retailers bank on in 2018 to keep sales buoyant?

The most obvious product is Nintendo Switch.

The console will be heading into its second year, where sales will likely accelerate (Nintendo anticipates 20 million shipments over its 2018/2019 financial year, bringing the total to more than 36 million consoles in the market by April 2019). This creates a big audience for retailers to capitalise on.

However, there are some lingering concerns. Last year’s sales performance was boosted, globally, but Zelda, Mario Kart 8, Splatoon 2 and Super Mario Odyssey. These were the four major system sellers for the console during the year. 2018 currently lacks a killer app for Switch (with the exception of Pokémon, which only has a tentative 2018 date and may arrive in 2019). It’s common for Nintendo to limit the window between announcing a product and releasing it, and the firm is planning one of its ‘Direct’ video presentations later this month. Yet, as it stands, there is uncertainty over what software will drive Switch sales during the first part of the year.

The other key product is Red Dead Redemption 2. This is a major launch for Spring 2018 and may well be the biggest game of the year. The last Red Dead Redemption (2010) sold 15 million units globally, yet that was in an age before GTA V. GTA V has shifted more than 86 million games worldwide (by comparison, GTA IV – which came out in 2008 – sold around 30 million). It’s very unlikely Red Dead Redemption 2 will get close to GTA V’s massive figure, but even half-way will be a major, major boost to the market, and anticipation for Rockstar’s next open world epic is enormous.

Of course, there will likely be a strong download element to Red Dead this time around – especially as Rockstar has spent the last five years training its audience to download things through its Grand Theft Auto Online mode (a similar phenomena happened last year around Destiny 2, which performed very strongly over Xbox Live and PSN).

It’s also worth noting that the Red Dead and Rockstar names alone do not guarantee success. As we have seen with Star Wars: Battlefront II and Call of Duty: Infinite Warfare, if gamers are unhappy for whatever reason, they will vote with their wallets irrespective of the brand name attached to the product. Red Dead Redemption 2 has the ingredients to be a major hit, but nothing is certain in this business.

Beyond Nintendo Switch and Red Dead Redemption 2, Ubisoft’s big March game is Far Cry 5, Xbox has a slightly stronger slate with Crackdown 3 and Sea of Thieves, and Sony is expected to launch Spider-Man and God of War. Yet little is known about the back half of the year at this stage. Companies such as Take-Two, Ubisoft and Square Enix have teased some special projects for the year, but what they are remains a mystery.

As a result, 2018 will likely remain a difficult year for games retailers. GAME and GameStop’s new growth areas are showing signs of life, and both companies are on solid financial footing. Yet any significant downturn in physical game sales will take a heavy toll, and the market will be relying – once again – on just a handful of products to see them through.

Courtesy-GI.biz

Were Physical Games Sales Flat In The UK In 2017

January 5, 2018 by  
Filed under Gaming

23.7 million physical video games were sold in the UK during 2017, the latest data from GfK reveals.

It is pretty much identical to last year’s number of 23.8m – a decline of 0.4%.

In terms of revenue, the amount of money made by physical games has risen slightly by 2.1%. This is due to an increase in game pricing over 2017, driven partially by the higher priced Nintendo Switch games. In total, £792m was made from physical software sales in 2017.

We have requested additional sales figures for UK hardware and accessories from GfK, which will likely show some growth for the UK physical retail market overall.

The best-selling game of the two weeks over Christmas and New Year was Call of Duty: WWII, which has now scored nine consecutive weeks at the top of the charts. It equals the number of consecutive weeks Modern Warfare 2 spent at the top of the charts, and if it gets two more weeks, it will match Call of Duty: Black Ops III as the most No.1s overall for a Call of Duty game.

Call of Duty: WWII has already well passed Infinite Warfare’s lifetime sales, and was the UK’s second best-selling game of 2017. The best-selling game was FIFA 18, which was the No.2 over Christmas and New Year. FIFA 18 has been on sale for five weeks longer than Call of Duty: WWII.

Physical sales of FIFA are actually down quite notably compared with the 2017 edition. The number of FIFA 18 units sold in the UK is 16.2% down compared with FIFA 17, however, digital sales have not been taken into account.

Indeed, it wasn’t an especially happy Christmas for EA. Take Star Wars: Battlefront II, the company’s big Christmas shooter is down 51% compared with sales of last year’s Battlefield 1 (which was on sale for four weeks longer by the end of the year) and 49% compared with the first Star Wars Battlefront (the first EA one, anyway).

Sales of the new Need for Speed is also down 11% compared with its 2016 predecessor. Although, once again, digital numbers will likely have made up for some of this decline (if not all of it).

It may have been a tough few months for EA, but it was a strong end of the year for Ubisoft. Assassin’s Creed Origins is up 32% in sales compared with last year’s Watch Dogs 2, and 13% up compared with Assassin’s Creed Syndicate (which was on sale for a week longer back in 2016). Nintendo also had a strong end to the year, with Super Mario Odyssey, Mario Kart 8: Deluxe and The Legend of Zelda: Breath of the Wild all in the Top Ten come New Year. All three games sold over 300,000 copies a piece so far, with Mario Kart 8 ending the year as the No.1 Switch title (just narrowly ahead of Super Mario Odyssey).

The late release of the year, PlayerUnknown’s Battlegrounds, performed strongly. The boxed version didn’t feature a disc (it’s just a code in a box), but still debuted at No.4, dropping to No.8 and ending the year at No.11. It is likely that digital will have made up the bulk of sales, but it still performed well as a Christmas gift.

Here is the GfK/UKIE Top Ten for the Week Ending December 30th.

Courtesy-GI.biz

Are Video Games Contributing To Inflation In Great Britan

December 19, 2017 by  
Filed under Gaming

The price of video games has been highlighted as a key factor in the latest rise in UK inflation, a report claims.

Figures released by the Office for National Statistics show that the Consumer Prices Index has risen by 3.1% in the twelve months ending November 2017. This is an increase on the 3.0% recorded in October and the highest since March 2012.

While the largest contribution to this increase was identified as air fares, the ONS notes that: “Rising prices for a range of recreational and cultural goods and services, most notably computer games, also had an upward effect.”

The increase in prices for video games, toys and other hobbies between October and November was much sharper than in 2016, with the ONS adding: “This effect came from computer games whose prices are heavily dependent on the composition of bestseller charts, often resulting in large overall price changes from month to month.”

This is no doubt partially down to the sheer number of new releases over the past couple of months, traditionally the busiest time for the games industry’s release slate.

It’s also worth noting that while the biggest new releases have often been heavily discounted within a few weeks of launch in the past, there seems to have been less significant price cuts in 2017. Certainly, Black Friday appeared to have less of an impact when it comes to titles less than a month old dropping from £50 to around the £20 to £30 mark.

That said, the ONS’ declaration that computer game prices have risen to the point where they can be singled out as a contributing factor to UK inflation is somewhat frustrating.

By and large, video game prices have remained relatively static over the past decade, with new releases almost always around the £50 price point – despite the rising cost of development. This is something developers commented on when discussing the increasing need for monetisation mechanics like loot boxes, controversial though they may be.

Similarly, publishers have previously seen a backlash when trying to adjust prices to account for economic shifts. Most notably, Paradox Interactive attempted to raise the cost of its games earlier this year and was immediately met with consumer complaints – to the extent where the publisher was compelled to retain its previous price points and offer refunds to those affected.

Time will tell whether the impact on UK inflation further deters publishers and retailers from increasing the cost of games.

Courtesy-GI.bz

Can EA Learn From Rainbow Six Siege With 25 Million Players

December 12, 2017 by  
Filed under Gaming

Ubisoft has announced that two years after launch, Rainbow Six Siege has over 25 million registered players.

Now entering its third year, Ubisoft has lined-up more content to prolong the life of the game for another season, proving that games-as-a-service can be done properly in the AAA space.

When Siege launched at the tail end of 2015, critics took the game to task over its threadbare offerings, which featured a single PvP mode, no campaign, and only a handful of maps, not to mention a litany of bugs.

Since then, however, many of the criticisms have been dealt with and Siege has held a regular spot in the UK top 20.

What’s especially interesting about the success of Siege is how quiet it’s been. With each competitor that shambles onto the market, whether that be Star Wars Battlefront II or the latest addition to the monolithic Call of Duty franchise, Siege has rarely attracted the same level of controversy, despite employing the most common games-as-as-service monetization techniques.

With games-as-a-service reportedly having tripled the value of the industry, and EA looking to replace annual sports games with live services, has Ubisoft laid out the framework for how to do it right?

“Player investment has been core to the success of the game with longevity being always very important to us. As the game progressed, we continued to develop it with the community in mind,” said Alexandre Remy, Rainbow Six Siege brand director in a statement.

A community-centric approach is the obvious answer to increasing the longevity of any game. Over recent months, we’ve seen a great deal of discussion around finding the “sweet spot” for monetization techniques, and we’ve also seen the fallout of what happens when communities feel disrespected. Loot boxes and season pass DLC can work, Siege has demonstrated that, but striking that delicate balance is something publishers have long struggled with, and continue to do so.

That said, it’s important to consider the particular niche that Siege operates in. Yes, it’s a competitive online shooter, but unlike many of its contemporaries, it’s a much more strategic and team-focused affair. While there is definitely a crossover between Call of Duty players and Siege players, the latter has a niche appeal the former cannot possibly hope to replicate without disenfranchising its mainstream audience.

The likes of Activision and EA can certainly learn from Ubisoft’s approach to games-as-a-service. With no immediate Siege sequel on the horizon, a further cash investment into the game is a relatively easy thing for consumers to justify.

However, when players know that the life of a game will be artificially shortened by an annual release, rather than extended by DLC, it becomes difficult to rationalize spending anything above the $60 entry price, especially when the monetization techniques are perceived to be so aggressive.

Ubisoft is not the only publisher to have successfully implemented these techniques with minimal backlash. Blizzard, for example, kept its hands relatively clean with Overwatch and only recently got caught-up in the Belgian Gambling Commission’s investigation which mainly cast its attention towards Star Wars Battlefront II.

But with Siege, Ubisoft has employed the delicate and reasoned approach that’s been missing from the industry’s clumsy, heavy-handed adoption of the games-as-a-service model. As a result, the two-year-old game boasts a large, dedicated community that numbers in the millions and is willing to spend.

Courtesy-GI.biz

Is EA Screwing Up The Planned Move To Games As A Service

December 8, 2017 by  
Filed under Gaming

Every now and then, a major publisher goes through a bit of a rough patch in PR terms; the hits just seem to keep on coming, with company execs and representatives seemingly incapable of opening their mouths without shoving their feet right inside, and every decision being either poorly communicated or simply wrongheaded to begin with. At present it’s EA that can’t seem to put a foot right, from Battlefront 2’s microtransactions to lingering bad feeling over the closure of Visceral; every major company in the industry, though, has had its fair share of turns in the barrel.

These cycles come around for a couple of reasons. Part of it is just down to narrative; once something goes wrong for a company, they are scrutinised more closely for a while, and statements that might have slipped under the radar usually are blown up by the attention. Another part of it, though, is genuinely down to phases that companies go through; common enough periods in which the balance between the two audiences a major company must serve, its consumers and its investors, is not being managed and maintained expertly enough.

Most companies encounter this difficulty from time to time, because the demands and desires of shareholders are often damned near diametrically opposed to those of customers. The biggest problems arise, however, when a firm ends up having to take a Janus-faced approach, presenting a different picture in financial calls and investor conferences to the one it tries to convey in its customer-facing PR and marketing efforts.

That’s broadly speaking the situation EA has found itself in once again; forced to be conciliatory and diplomatic in talking to customers about everything from loot boxes to its commitment (or lack of same) to single-player experiences, while simultaneously being bullish with investors who want to see clear signs of progress in the shift towards a set of business paradigms core consumers volubly dislike.

CFO Blake Jorgensen’s comments at Credit Suisse’s conference earlier this week are archetypal of this genre of corporate communication; from a blunt denial that the company’s microtransaction strategy on Battlefront 2 is changing overall to a throwaway comment about Visceral’s closure being related to declining popularity (by which, being a CFO, he meant revenue) of linear game experiences, Jorgensen spoke to investors in a way that was quite markedly different from how the rest of the company has addressed its actual customers on these issues.

You can argue quite reasonably that this approach is dishonest in spirit if not in substance; even if the words of each statement are chosen carefully so the investor messages don’t technically contradict the consumer messages, the intent is so clearly tangential that consumers have every right to feel rather miffed. I think it’s worthwhile, however, to look beyond that to the motivation and strategy behind this – not just in terms of EA’s month of bad PR, but looking beyond that to the industry as a whole, because pretty much every major publisher is undertaking a similar strategic shift in a direction they know perfectly well is going to annoy many of their core customers, and they’re all going to have their own turn in the barrel as a consequence.

At the heart of this issue lies the fact that for many investors and executives, the business model that has sustained the games industry for decades has started to look frustratingly quaint and backwards. “Games as a Product”, whereby a game is made and sold, perhaps followed up by a handful of add-ons that are also made and sold (essentially smaller add-on products in their own right), is a model beloved of core consumers – but business people point out, not entirely unfairly, that it has many glaring flaws.

Some of those flaws are very real – the product model creates a high barrier to entry (you can’t attract new customers without convincing them through expensive marketing to spend $50 to $60 on trying out your game), hence limiting audience growth, and has not scaled effectively with the rising costs of AAA development. More controversially, they dislike the fact that the product model creates a relatively low cap on spending – after buying a game, there’s only so much money a consumer can spend on DLC packs (each of which has its own associated development costs) before they hit a hard limit on their purchases.

Hence the pressure to move to a “Games as a Service” model, which neatly – if not uncontroversially – solves each of these issues. The service model can be priced as low as zero to create a minimal barrier to entry, though for major titles with a big brand attached publishers still show a preference for having their cake and eating it, charging full AAA pricing for entry to an essentially freemium-style experience. An individual player’s spending may be theoretically limitless, as purchases of cosmetic or consumable items could run to many thousands of dollars in some cases – hence also allowing the game’s revenue to scale up to match the huge AAA development and marketing budgets that went into its creation.

You can “blame” mobile games for this if you wish, but in a sense they were merely the canary in the coalmine; the speed with which the mobile gaming market converged on the F2P model and the aggression with which it was pursued was a clear sign that the rest of the industry would eventually try to move in a similar direction. The reality is that mobile games shone a light on something a few industry types had been saying for years; that there was a massive, largely untapped audience for games out there, who would never climb over the barriers to entry to the traditional market but who could potentially be immensely valuable customers of games with lower barriers to entry.

The correct height for those barriers turned out to be “free games for devices you already own”, and yet this market did turn out to be enormously valuable; and now much of the industry is eyeing up the model that works on smartphones, looking at their own rising costs and shrinking slice of the pie, and wondering how to get from over here to over there.

The problem is that making that crossing – from being a successful creator or publisher of core games to being a successful company in a smartphone-style paradigm – is damned tricky to do when the business model you (and your investors!) want to have is anathema to many of the customers you actually have right now. Not all of them, by any means – plenty of core gamers are actually pretty relaxed about these models, for the most part – but enough of them to make a lot of noise and to potentially put a major dent in the bottom line of a company that genuinely manages to drive them away.

Hence, much of the approach we’ve seen in 2017 (and prior) has really been akin to the parable about putting a frog in cold water and gradually raising the heat; companies have slowly, softly been adding service-style features and approaches to their games, hoping that the slowly warming water won’t startle its occupants too much.

When things spill over as they have done for EA in the past month, it tends to indicate that someone got impatient; that investors were too demanding or executives pushed too hard, and the water started to heat up too rapidly. The course will be corrected, but the destination remains the same. Short of a really major pushback and some serious revenue damage across the board from these approaches – which bluntly seems unlikely to materialise – the move towards games as a service is inexorable, and 2018 will bring far, far more of the same. Whether you view that as the industry’s salvation or its ruin is really a matter of personal perspective, but it’s a new reality for AAA titles that we’re all going to have to make some kind of peace with.

Courtesy-GI.biz

As Microsoft Gaming Division Revenue Has A Slight Revenue Increase

November 7, 2017 by  
Filed under Gaming

Microsoft’s gaming revenue has stalled according to the latest quarterly report.

While overall Microsoft revenue reached $24.5 billion, a year-on-year increase of 12%, gaming revenue was up by only 1% (0% in constant currency).

Gaming revenue for the quarter ending September 30, 2017 reached $1.89 billion, edging up slightly from $1.88 billion over the same period last year.

Xbox software and services revenue grew up 21% (20% CC) driven by continued momentum in digital distribution and strong game title performance, but offset by a lower hardware revenue.

The number of Xbox Live active users sits at 53 million, meaning a year-on-year increase of 13%. However, the number has not grown from the previous quarter and remains lower than it was during the three-month period ending December 31, 2016 where it reached 55 million.

Looking forward to the next quarter, Microsoft CFO Amy Hood said: “We expect revenue growth from the launch of the Xbox One X console and continued healthy growth of software and services revenue. In Q2, the higher mix of gaming hardware revenue will significantly impact both the segment and company gross margin percentages.”

Company-wide net income was $6.6 billion, a year-on-year increase of 16%.

Microsoft CEO Satya Nadella said: “Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform.”

Courtesy-GI.biz

Are Optical Audio Options Dying

November 2, 2017 by  
Filed under Around The Net

Optical cable, which was the digital audio transfer method of choice for decades, is starting to die out as Toslink is replaced by HDMI.

Through the ’90s and 2000s, the optical cable was near ubiquitous with it being the best way to get Dolby Digital and DTS from your cable/satellite box, TiVo, or DVD player. But now it is starting to disappear from hardware.

The latest Roku and Apple TV 4K, don’t bother and you can’t find it on many TVs. Chromecast Audio uses an optical connection because of space constraints any technical reason. The Chromecast Audio uses the mini-Toslink variant which fits inside a 3.5mm
analog jack.

This is mostly because it has been eclipsed by HDMI with ARC, even if in theory the optical has more bandwidth. However, as CNET points out, the optical audio connection is far more limited. It can’t transmit the high-resolution audio formats that came out with Blu-ray more than a decade ago, such as Dolby TrueHD and DTS Master Audio.

HDMI has expanded its capabilities significantly over the brief time it’s been available and since no-one could be bothered upgrading optical because HDMI received greater acceptance the tech was toast.

Fibre technology will still be around as the backbone of the world wide wibble, but chances are you will not see it in your home in a few years.

Courtesy-Fud

Is The Olympic Committee Beginning To Take eSports Seriously

October 31, 2017 by  
Filed under Gaming

Esports’ battle for mainstream acceptability has yet another endorsement, this time from the International Olympic Committee.

In a statement following a summit of the IOC, it was announced that esports “could be considered a sporting activity.”

According to the IOC, “the players involved prepare and train with an intensity which may be comparable to athletes in traditional sports.”

While acceptance comes with certain caveats – esports must not “infringe on the Olympic values” and there must be “an organization guaranteeing compliance with the rules and regulations of the Olympic Movement” – the announcement is a huge coup for the rapidly expanding industry.

The decision by the IOC is the latest in what is slowly becoming the prevailing consensus. The first major development came in July 2013 when the US State Department recognized professional League of Legends players as athletes, with a number of other nations following their lead including Finland and the Philippines.

Additionally, the 2022 Asian Games in Hangzhou, China will recognise esports as a medal event, and the Paris bid for the 2024 Olympics is considering a program of esports.

From here the IOC will work alongside the Global Association of International Sports Federations “in a dialogue with the gaming industry and players to explore this area further and to come back to the Olympic Movement stakeholders in due course.”

While the IOC has conceded that there is room for esports in the Olympics, there is a notable apathy toward the idea from esports fans.

According to a recent report from Nielsen, only 53% of fans from the four largest markets (UK, France, Germany, and US) consider esports to be an actual sport, and only 28% felt that esports should be included in the Olympics.

Courtesy-GI.biz

Are Loot Boxes Good For Video Games

October 24, 2017 by  
Filed under Gaming

The loot box debate rages on, but very few members of the industry have joined in the discussion.

As games sites become awash with reports and opinion pieces on each blockbuster’s new monetization system, picking apart the model with which publishers are attempting to retain and monetize players through this Q4’s biggest releases, the consensus seems to be that loot boxes are another attempt to nickel and dime the unassuming consumer.

Attempts to sell in-game items through full-price titles such as Middle-Earth: Shadow of War, Star Wars Battlefront 2, Forza Motorsport 7 and Destiny 2 have triggered discussions as to whether AAA gaming has become akin to gambling, and driven thousands of people to sign government petitions as they demand that action be taken.

While ratings boards have agreed the use of loot boxes does not technically class as gambling, it’s easy to understand the upset that surrounds them. Having already paid $60/£60 for a AAA title, consumers are indignant at the idea of having to spend more money in order to fully enjoy their purchase. Implementation varies between each game, with some examples – such as the Star Wars Battlefront 2 beta’s implication that multiplayer progression will be locked behind loot boxes – prompting more ire than others.

Getting an official response as to why these systems are becoming more prevalent is nigh on impossible – GamesIndustry.biz received a polite ‘no comment’ from Activision, Warner Bros, Microsoft, Electronic Arts and several other publishers we asked to weigh in on the subject – but those who do point the finger of blame squarely in one direction: the rising costs of both development and marketing.

This is something we already discussed at length last week, and it seems to ring true for developers across the industry. In the case of Battlefront, this has dramatically increased since EA decided to forego the usual Season Pass model and provide maps and extra content for free, but it still needs to fund development.

But according to one studio director – who wished to remain anonymous – it’s not just that costs are increasing, but that the disparity between how much publishers are charging and what consumers are spending is also growing.

“Development costs of AAA titles are five to ten times the price they were in the ’90s,” the person told us. “As technology moves forward, costs go up and teams get larger. Salaries also go up in that time both for starters and people employed for those periods of time.

“But sales and prices have remained pretty static – especially given the ‘sale culture’ nowadays.”

Ben Cousins, CEO of The Outsiders and a former EA and DICE exec, agrees: “The number of full-priced games console gamers are buying a year is dropping and the cost of developing games is increasing, while the actual audience for console games remains static. They need to find ways for full-priced games to continue to be profitable. Big publishers have been working on plans like this for over a decade.”

In recent weeks, UK sales of Shadow of War, Destiny 2, FIFA 18, Forza 7 and The Evil Within 2 are all trending below their predecessors, and this is likely to be the case in other markets. Digital downloads may be making up for some of that shortfall, but not all of it – and there’s certainly no sign of significant growth in terms of audience’.

Meanwhile the ‘sale culture’ is also likely to be impacting revenues. Last year’s Black Friday promotions saw sales of recent releases soar once available for £30 or less, many of which had been at full price just a few weeks before – and no doubt this will be repeated with this year’s Q4 hits next month.

Jason Kingsley, co-founder and CEO of Rebellion, emphasises that loot boxes don’t even need to convert every player into a payer in order to help offset those costs.

“Some big games are just not selling enough copies to make the development and marketing costs viable,” he says. “Loot boxes mean more revenue from those who are interested.

“For the biggest games that are made by thousands of staff, then yes the simple boxed copy sales may not be enough to make the economics work.”

Larger teams and more advanced technology aren’t the only things driving this increase. Hidden Path’s Jeff Pobst, who previously discussed this subject with us, says the audience has contributed to escalating costs.

“What players may not realize is their expectation that each game in a series gets bigger and better and has more content and looks more modern than before… means it is likely going to cost more to make. The creators are going to want to find a way to cover those new costs as well.”

Then there are the sales expectations of the publishers bringing each game to market. Just yesterday, in the wake of Visceral Games’ closure, former Dead Space level designer Zach Wilson tweeted that the second game in the series cost $60 million to make, and another $60 million to market. The title sold a seemingly respectable 4 million copies, but Wilson reports that “wasn’t enough.”

Again, this emphasizes the damage the aforementioned ‘sales culture’ can have; if all 4 million copies had sold at the full price of $60, EA would have received $240 million. While this may seem to be double the combined marketing and development cost, once you take into account the retailer’s share, distribution and manufacturing costs, plus tax, the publisher’s share actually diminishes (In the comments below, analyst Nicholas Lovell estimates closer to $150m than $240m). The lower the sales price, thanks to promotional discounts and so forth, the lower the publisher’s take.

Still, the dominant element of the loot box debate seems to be the consumer outrage and the notion that greedy publishers are simply trying to extract every last penny from customers already paying for their products. Naturally the most extreme reactions are amplified by social media, but are they in fact the minority? Does the very presence of microtransactions in full-price games really affect that many people, especially when so many publishers stress that they are optional?

“I don’t know the numbers, but my experience tells me this is probably the case,” says Cousins.

He continues: “Until we have hard data that the presence of loot boxes in a given title is negatively affecting sales and profitability, rather than just being a thing people talk about on the internet, we should not worry about messaging issues.”

Kingsley adds: “That’s hard to quantify but it’s clearly an issue as it’s getting coverage. Whether it’s an issue for most or even the majority is not as relevant as it being a big issue for some I suppose.

“The reactions to them seem to be based largely on how they are handled and whether the contents are game changing or just cosmetic.”

Pobst suggests that the source of the anger is not, in fact, the transactions themselves. Instead, it stems from the changing perception of the game: initially purchased as a piece of entertainment, but starkly highlighted as a commercial product by the immersion-breaking call to spend real-world money.

“Personally, I’m not sure that individual game mechanics or features such as loot boxes are themselves the driving issue for players when you see outcry or concern about the fairness of a game, its feature set, or its monetisation,” Pobst explains. “Typically if you go looking, one can find examples of where those same features or mechanics are used in other games and the players there are happy and enjoying themselves. 

“I think the underlying issue is really about the relationship between the product and the players, and how the expectations are set by the people making and marketing the product: the “promise” to the player by the product, as Gearbox President Randy Pitchford likes to say.”

The problem most often comes, Pobst posits, when firms add monetisation mechanics to a title or series where they were previously absent. Certainly this was the case with Bungie’s Destiny 2 – the earliest example in the recent wave of microtransaction controversies – where shaders that were previously reusable became one-time consumables, with the game offering to sell more to players in exchange for real money.

“Sometimes publishers and developers don’t recognize that changing the monetization can be a more significant impact in changing the promise of the game to the player than they may expect,” Pobst continues. “The gameplay and content promises are still there, but the monetization part of the promise has changed in that case. And depending on the game and the monetization changes, players may or may not feel like the promise they are excited about is being maintained.”

Equally, some consumers seem to have an entirely different view on how the relationship between themselves and the publisher or developer works. Fundamentally they seem to forget that while games are indeed provided as both art and entertainment, they are also commercial products and subject to inherent pressures.

“Regardless of development costs, developers and publishers are going to attempt to make money – it’s a business,” says Niles Sankey, developer of first-person psychological thriller Asemblance. Sankey previously spent ten years working at Bungie on both Halo and Destiny, although he stresses that he was not involved in monetization.

“Developers have retirement to save for and families to feed… If people don’t like loot crates and microtransactions, they shouldn’t support the game by purchasing them. And I’d suggest not buying games made by companies that have previously demonstrated insincere business practices.

“I stopped developing investment heavy games and I no longer play them. In my opinion, there are better ways to spend your time and life. There are so many great non-addictive/investment games to play.. and there’s so much more to life than video games.”

This is also a message that sometimes gets lost in the outrage: in most cases, microtransactions in full-price games are entirely optional. Following the initial outburst, Shadow of War design director Bob Roberts told our sister site Eurogamer that the team had developed the entire game without the loot boxes activated in order to ensure balance.

Our anonymous developer has no qualms declaring that he has spent money on such items, adding: “It’s normally to accelerate my progress. I don’t have as much time to play now as I did 20 years ago.”

Emphasising that loot boxes are optional seem to do little to assuage consumer concerns. Common arguments range from accusations that developers have slowed normal in-game progress in order to sell boosters, or that the very presence of microtransactions psychologically draws players into what Cousins refers to as the “compulsion loop”.

There is also an inconsistency to player reactions, albeit driven by the different implementations of monetization. For all the flack Electronic Arts has received over the proposed monetization system shown in the Battlefront 2 beta, it still generates $800 million per year with FIFA’s Ultimate Team mode – a prime example of successfully monetizing a full-price game in the long term.

Similarly, while Shadow of War and Forza 7 have been virtually crucified on Twitter, titles such as Rainbow Six Siege and Overwatch escape unscathed, despite the presence of loot boxes – although Cousins says, “Blizzard get a free pass on pretty much everything, as do Valve. Never try to get learnings from them, as they are outliers.”

The consumer reaction (particularly in the run-up to launch) has the potential to be highly damaging, further preventing publishers from recouping costs and exploring new methods of monetisation. Our anonymous developer pointed to one particular practice that has hindered the debate around loot boxes.

“Review bombing exaggerates issues and causes damage to everyone,” they say. “Which is why most won’t talk about it as they don’t want to be targeted unfairly next.”

And, ultimately, such tactics are a fruitless endeavour. Despite the controversy around recent titles and their microtransactions, publishers will inevitably continue to experiment with new business models. Especially as a recent report proves that games-as-a-service systems have tripled the industry’s value.

Just today, Activision was granted a patent for a matchmaking system designed to encourage more consumer spending; a system the publisher stressed has not been implemented in any game, but is something it may well consider in future. And experimentation is fine – it’s essential the evolution of any industry – but as our own Rob Fahey warns, publishers need to be careful to cross the line, no matter how poorly defined that line may be.

 

Courtesy-GI.biz

Did The Latest Final Fantasy Save Franchise

October 16, 2017 by  
Filed under Gaming

Square Enix’ Final Fantasy franchise is arguably in the rudest health it’s ever been right now. The main series latest title, FFXV, launched to critical and commercial success and is being supported by a string of fine content updates; the MMO, FFXIV, is closing in on the peak players record set by World of Warcraft; and across mobile and other platforms, the franchise is enjoying success both with entirely new titles (such as Final Fantasy Brave Exvius on mobile) and with those tapping into nostalgia for the series’ past (mobile and console re-releases of classic games, or remixes like the mobile title Final Fantasy Record Keeper). The public’s appetite for the venerable franchise seems limitless, and Square Enix’ capacity to meet that demand is firing on all cylinders.

It wasn’t always like this. In fact, the state of Final Fantasy right now represents one of the most dramatic turnarounds by a major franchise in the history of the industry. Turn the clock back five years and the whole brand looked like it was bound for disaster. Final Fantasy XV was deep in development hell with no end in sight, and few held much hope for whatever game would eventually crawl out of the car crash. Final Fantasy XIV had endured almost two years of critical lashings and subscriber discontent, and was on the verge of shutting down. The franchise’s mobile efforts, too, were underwhelming, largely made up of ports of old games and re-developed titles from Japan’s long-in-the-tooth, pre-smartphone iMode service.

Had anyone at that point stood up to predict that Final Fantasy XIV and XV would both be not only immensely successful in their own right, but tentpole titles for one of the most commercially successful console generations ever, the most likely reaction would have been laughter. The sheer depth and breadth of Final Fantasy’s legacy meant that few would have been confident in writing off the series’ capacity for reinvention or resurrection; but for the franchise’s current iterations to be turned around so utterly would have been dismissed as impossible.

Such a feat bears closer scrutiny; not just because Final Fantasy is a beloved franchise whose resuscitation is interesting in its own right, but because it holds important lessons for other franchises that hit rocky patches. It’s worth noting also that the decline hadn’t started with the issues with instalments XIV and XV; rather, it dates back right to the outset of the PlayStation 3 era, when an ambitious plan to expand the franchise ended up delivering, instead, the poorly received FFXIII games and the eternally locked in development hell FFXV, originally planned as a companion piece to, rather than a distant successor for, the thirteenth game.

This is a franchise, then, whose development and critical reception really hadn’t been on solid ground since the PlayStation 2 era, and arguably one in much more trouble (though with a far deeper wellspring of goodwill and nostalgia at its disposal) than recently indisposed franchises like Mass Effect.

How Square Enix approached turning the entire franchise around is a lesson in bold steps and confidence. It took the unprecedented step of shutting down FFXIV and launching an entirely revamped version with a new creative boss at the helm; A Realm Reborn, the relaunched game, carries on from the story of the original (there was actually a creatively fascinating in-game narrative event wherein the shutdown of the old servers was accompanied by the actual destruction of the world, with the new game’s story commencing five years after those events) but is in almost every other respect a new game.

Consider the extraordinary effort Blizzard undertook to rework and modernise all of its original World of Warcraft content when it released the Cataclysm expansion at the peak of the game’s popularity; now consider that Square Enix took the decision to do precisely that with a game which was loathed critically and drooping commercially. That such a wild gambit has succeeded is a testament to the talent and vision of Yoshida Naoki and his team; that it was taken at all speaks to a confidence and willingness to take risks that is to the credit of Square Enix’ executive team.

What happened to FFXIV happened in public, of necessity; the original game had already launched when it became clear that it needed to be reworked from the ground up. Yet it is apparent that no less dramatic a transformation happened to FFXV as it finally hit the home stretch in its development (a home stretch, incidentally, longer than the entire development process of many other major titles).

The FFXV that eventually launched is a game that’s easy to like, but also a curious beast, one that clearly bears the marks and scars of dramatic surgery during its development. It’s a game whose sprawling scope belies a remarkably tight and stripped down core. There are moments where strange scars across the game’s design speaks to the excising of huge, ambitious ideas, or where the game’s systems curiously seem to try to flex phantom limbs; ideas and mechanisms amputated years ago in favour of a mostly streamlined story of four boys on a road-trip at the end of the world.

That the process of killing FFXV’s darlings happened behind closed doors does not make it any less dramatic than what happened to FFXIV in public; and while the creative teams responsible for the decisions were different, the solutions they hit upon are quite similar. Both teams found ways to use what had gone before, balancing a willingness to discard even very expensively developed content that just wasn’t working with a deft hand at ensuring the baby stayed firmly in place while disposing of the bathwater.

Often in the games industry, there’s a kind of masochistic satisfaction taken in talking firmly about how good a company is at throwing out ideas that aren’t working, or how quick they are to can games that don’t look like they’re up to scratch. That’s absolutely an important skill, but while vital in fast-moving and still (relatively) cheap fields like mobile, it’s one that’s increasingly irrelevant to AAA development. There, it’s been superceded by the more economically sensible task of actually figuring out how expensively developed assets, code and systems can be recycled into things that actually work.

That’s obviously a much tougher and more skilled job than simply canning something and tossing a casual reference to “sunk cost fallacy” over your shoulder as you walk away from the ensuing explosion. As development costs soar, however, the kind of highly skilled salvage work Square Enix has demonstrated on both FFXV and FFXIV is already becoming economically essential. There comes a point where so much money has gone bad that figuring out how to strategically, intelligently throw good money after it to claw back some value becomes a vital survival skill for a studio or publisher.

That Square Enix has become so proficient at this task is very much to its credit. It had little choice, in ways; allowing Final Fantasy games to fail in succession would have been an indelible stain on the company’s most valuable IP, after all. Still, it has achieved what few other companies have managed – bringing games back from the brink of disaster to become enormous hit titles, and charting a future course for a major franchise in the process.

The stature of Final Fantasy may be unique, but the challenges Square Enix faced in bringing about its resurgence were not. What those studios did, and what they do next, should be watched closely by anyone in the industry with an interest in how to sustain a major franchise or turn around a troubled game.

Courtesy-GI.biz

Will Atari’s New AtariBox Console Succeed

October 5, 2017 by  
Filed under Gaming

Atari has revealed more juicy details about its upcoming Ataribox console, due for release in 2018.

The Ataribox will be based on PC tech, and as such won’t be tied to any one ecosystem. Now, usually this would send us screaming for the hills, but we know this one is going to get funded, so we’re not sweating about sharing some more info.

Thanks to a report in VentureBeat including an interview with Feargal Mac, the creator of the device and reviver of the company, we now know it’ll be an Indiegogo job, which means there’s less of the “all or nothing” fear attached with Kickstarter.

“I was blown away when a 12-year-old knew every single game Atari had published. That’s brand magic. We’re coming in like a startup with a legacy,” Mac said. “We’ve attracted a lot of interest, and AMD showed a lot of interest in supporting us and working with us. With Indiegogo, we also have a strong partnership.”

It should ship in Spring 2018, if all goes well, and will come with a custom AMD processor, with AMD Radeon Graphics. The Linux operating system will be customizable and will run not only Atari emulators, but potentially other app portals such as Steam.

Here’s the return of the Mac: “We wanted to create a killer TV product where people can game, stream and browse with as much freedom as possible, including accessing pre-owned games from other content providers.”

Projected price is $250-$300 but as we all know, when it comes to crowd-funding, timescales can slip and prices can rise.

The important thing is that this is more than just another retro console. It will boast a customized Linux interface for TV, and users will be able to do as much tinkering about under the bonnet as they like.

We’re not looking at a gaming powerhouse, but it should be able to stand shoulder to shoulder with a good, non-game-specific PC.

The big draw, of course is that looks-wise, it is a sleek, more refined version of the classic Atari 2600, walnut wood finish and all.

Courtesy-TheInq

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