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Square Enix Is Giving IO Interactive The Boot

May 23, 2017 by  
Filed under Gaming

Square Enix is dropping IO Interactive, the Danish studio behind the long-running Hitman franchise.

In a statement released today, the Japanese publisher said the decision was part of a strategy to “focus our resources and energies on key franchises and studios.”

The withdrawal was in effect as of the end of the last financial year, on March 31, 2017, and resulted in a ¥4.9 billion ($43 million) extraordinary loss on the company’s balance sheet.

Square Enix has already started discussion with potential new investors, the company said. “Whilst there can be no guarantees that the negotiations will be concluded successfully, they are being explored since this is in the best interests of our shareholders, the studio and the industry as a whole.”

IO Interactive was acquired by Eidos in 2003, just before it launched Hitman: Contracts, the third game in what was already its signature franchise. Eidos was acquired by Square Enix in 2009, and it has launched four games in the time since: Mini Ninjas, Kane & Lynch 2: Dog Days, Hitman: Absolution, and Hitman, last year’s episodic take on its most celebrated IP.

The bold new structure implemented in Hitman saw the game’s missions being separately on digital platforms, with various live events and challenges taking place between the release of each one. Square Enix originally planned to give the entire series a boxed retail release, but that never materialised. It has never disclosed official numbers regarding the sales figures for Hitman, either as a series or for individual episodes.

However, the series’ ámbition was widely appreciated within the games press – it was named 11th best game of 2016 by Eurogamer, for example, and was Giant Bomb’s overall Game of the Year. When we talked to IO studio head Hannes Seifert last year, he described the pride his team felt at the “new feeling” the game created, and made it clear that plans for Hitman extended far beyond a single season of epsiodes.

“When we say an ever expanding world of assassination, it means we don’t have to take everything that’s out there, throw it away and make a new game,” he said. “We can actually build on that. Just imagine after two or three seasons, you enter at that point in time, the amount of content will just blow your mind. That’s where we want to be.”

Seifert stepped down as IO’s studio head in February this year. He was replaced by Hakan Abrak, IO’s former studio production director.

Courtesy-GI.biz

Will Digital Video Game Sales Grow This Year

May 18, 2017 by  
Filed under Gaming

The growth of full game downloads in the console space has surprised EA, the firm says.

The company told investors during its Q&A – as transcribed by Seeking Alpha – that full game downloads accounted for 33% of unit sales. That’s considerably ahead of the firm’s previous estimate of 29%, and 9% higher than the figure it posted last year.

The firm says the chief driver was “the continuing evolution of consumer behavior. but some of the out-performance was driven by the shift from Star Wars Battlefront to Battlefield 1, as well as the digital performance of our catalog.”

It expects full game downloads will account for 38% of its console unit sales during 2017.

However, EA’s CFO Blake Jorgensen anticipates that for the whole industry the figure will be even higher – around 40%. This is because EA’s big titles, such as FIFA, often perform strongly in markets with slower digital uptake.

“In terms of full-game downloads, the number surprised us because we had thought that it’d be around the 5% year-over-year growth,” he said. “Some of that may simply be the consumer is shifting faster than we know or we expected. The trends can sometimes jump in dramatic ways and maybe we’re starting to see that overall shift. And some of it could be product-related. We do think the industry will end calendar year 2017 probably above 40%. We will most likely lag that as we have historically because FIFA is such a large product and it is so global that we are operating in markets where either the ability to purchase digitally, or the ability to download based on bandwidth speeds, are compromised and thus we tend to skew a little lower on FIFA than we do on the rest of our portfolio. So we’ve always lagged the industry slightly, but we are excited about the potential that you’re seeing the consumer possibly shift quicker to digital than we’d originally anticipated.”

EA remains optimistic about the console space. It says that at the end of last year the install base for both PS4 and Xbox One was 79m, and that it would grow to 105m by the end of 2017. This figure does not include Nintendo Switch, although EA is bullish about Nintendo, too.

“We have a tremendous relationship with Nintendo and have done for many, many years and are excited by the fact that they have come out very strong and are bringing in a whole new player base into the ecosystem,” said EA CEO Andrew Wilson. “We continue to be bullish on it and are looking at other titles that we might bring to the Switch. Our console number that we quoted does not include the Switch at this point, so anything that Nintendo does is additive to that number.”

There were a few additional takeaway points from EA’s financials. The publisher said that the traditional DLC mode is becoming “less important” as it moves further into live services. We’ve already seen EA evolve its DLC model with Titanfall 2, which is giving away all of its DLC for free.

EA also revealed that its new EA Motive studio in Montreal has 100 staff, and the publisher expects that number will grow to 150.

Courtesy-GI-biz

Can The PS4 Pro Stop The Falling Sells Of The PS4?

May 4, 2017 by  
Filed under Gaming

Sony Interactive Entertainment sold 20 million units of its PlayStation 4 console in the last fiscal year, boosting revenue by 6% and operating income by more than 50%.

In the 12-month period ended March 31 2017, SIE’s Game & Network Services division earned $14.7 billion in revenue, a 6% increase over the year before. Operating income for the division was $1.2 billion, a more significant 53% increase over the prior year, largely due to cost reductions on PS4 hardware and rising software sales.

Guerrilla Games’ Horizon: Zero Dawn will have been a major contributor to software revenue, becoming the fastest-selling new IP of the PS4 era after moving 2.6 million units in the two weeks following its late-February release. Uncharted 4: A Thief’s End also launched in the accounting period; Naughty Dog’s widely acclaimed title sold 8.6 million copies by the end of calendar 2016.

Across the entire year, 20 million units of the PS4 were shipped, 13% more than the 17.7 million units in the previous fiscal year. Given that the PS4 had 40 million confirmed sales in May 2016, that puts the total PS4 installed base somewhere around 60 million – possibly just below, but certainly not very far away.

Sony offered no details on the specific performance of the PS4 Pro, and no further information on PSVR sales beyond the 915,000 unit figure revealed in February. Both devices launched at the end of calendar 2016.

Looking ahead, Sony expects PS4 shipments to decline to 18 million next year. However, it expects the GNS division to improve in general, with a 14.6% increase in revenue and a 34% increase in operating income.

Overall, Sony Corp. earned $67.9 billion in revenue in the last fiscal year, down 6%, and a $654 million net profit, a more dramatic 50% decline.

Courtesy-GI.biz

nVidia Shows Off GameWorks Technology

May 1, 2017 by  
Filed under Gaming

Nvidia has revealed a few more details about its GameWorks Flow technology, which should provide fluid effects for realistic combustible fluid, fire and smoke simulation.

Following in the footsteps of Nvidia Turbulence and FlameWorks technologies, the new GameWorks Flow library provides both DirectX 11 and DirectX 12 implementations and can run on any recent DirectX 11- and DirectX 12-capable GPUs.

The GameWorks Flow uses an adaptive sparse voxel grid which should provide both maximum flexibility as well as the least memory impact. It is also optimized for use of Volume Tiled Resources, which allows volume textures to be used as three-dimensional tiled resources.

Nvidia has released a neat simulation video of the GameWorks Flow implementation in DirectX 12, which shows the fire and the combustion process with an adaptive sparse voxel grid used in both the fire and to compute self-shadowing on the smoke, increasing both the realism and visual effects.

Hopefully, game developers will manage to implement Nvidia’s GameWorks Flow without a significant impact on the performance.

Courtesy-Fud

Is The AAA Game Model Sustainable?

April 28, 2017 by  
Filed under Gaming

The AAA model in increasingly developing into a market in which only the biggest companies can survive – and even then the design of these titles will become more stagnant.

That’s according to Boss Key Productions founder and Gears of War creator Cliff Bleszinski. Speaking to attendees at Reboot Develop today, the veteran games developer discussed the “really, really weird spot” blockbuster games have found themselves in, and pondered potential solutions.

“AAA is starting to feel like the American restaurant scene,” he said, referring to how increasing globalisation means every major city usually has the exact same chains and franchises when you’re looking for a place to eat. “They’re not bad, they’re not great, they’re just there.”

It’s the same with AAA, which he says has become a “category of eight games that are getting repeated over and over again”. He brought up a slide depicting best-sellers such as Uncharted 4 and the Call of Duty games, stressing that these are “great games” but cost hundreds of millions of dollars to produce and market.

He added that it doesn’t help most consumers view many blockbuster franchises as “the name you know” and are “too scared to take the risk on new IP”.

“$60 is still a lot of money to ask people for,” he said. “And to ask them to make that bet multiple times per year? Gamers are picky, they’re smart.

“This is a nearly unsustainable model, unless you’re an Activision, 2K or a Sony.”

His advice to developers still looking to make their mark is to aim for what he referred to as “Double A”, which he considers to be “games that look and play great but pick their battles in terms of budget and marketing”. Examples he offered included Warframe, Rocket League and Rust, with Bleszinski noting that most successful ‘Double A’ games are digital and/or free-to-play.

In terms of finding funding for such games, he pointed out that “there’s a lot of money in Asia” – his own studio, Boss Key Productions, has partnered with Nexon for its debut game, LawBreakers. This title is also designed to be ‘Double A’, and won’t have a full $60 price tag.

Bleszinski also warned that developers only have one shot to make a new IP, referring to the team at Raven Software: “They made a great game in Singularity, but it ultimately didn’t do well because of the marketing, even though the ratings were great. And now they’re one of the multi-headed hydras behind the Call of Duty series.”

He recognised that the collaborative model used to create titles like Call of Duty and many Ubisoft games, combining the efforts of teams from around the world, is effective but not one he’d ever want to be a part of.

His talk later branched into virtual reality, which he likened to lucid dreaming – something he has apparently spent years trying to master. In fact, VR has helped him hone this elusive skill: “I’m a better lucid dreamer when I wear a sleep mask because I think I’m wearing a headset.”

He stressed that high-quality graphics are the key to immersion in VR, adding that “the best VR looking experiences I’ve had are built in Unreal Engine 4”.

“I’ve not paid to say that by my former employers,” he laughed. “Unity is a good engine but when it comes down to it, you can’t beat Unreal for visual fidelity.”

The issue, as he puts it, is great graphics cost money. Bleszinski is currently pitching a VR project but struggling to get the investment required to make the finished product look as good as it needs to. He observed that shareholders are “only giving out a little money”, which is why the industry is seeing a lot of tech demos coming from the VR space.

He also likened the current trend of wave-based shooting games – such as Raw Data and Robo Recall – as the equivalent of ’80s arcade games such as Galaga and Robotron, adding that he’s confident VR will expand beyond this just as the arcades did.

Bleszinski acknowledged that there are plenty of barriers to overcome before virtual reality is adopted by the masses. Complicated setups, especially for room-scale VR, are particularly off-putting. He referred to his parents that didn’t even set the clock on their VCR – they just wired it into the TV and plugged it in – adding: “Why would they set up VR?”

He continued: “If I were Oculus, Facebook or Vive, I would have kiosks at every major retail location, and a tech team that comes round to set it all up properly”.

“But like all technologies, it’s get better, it’ll get faster. But give it a little bit of time.”

Courtesy-GI.biz

Blizzard Entertainment Wins Cheating Lawsuit

April 14, 2017 by  
Filed under Gaming

Blizzard Entertainment has asked for $8.5 million in damages from Bossland, a German company that makes and sells cheats and hacks for its most popular games.

This is the latest and probably final step in a legal complaint Blizzard filed in July 2016, which accused Bossland of copyright infringement and millions of dollars in lost sales, among other charges. Cheat software like Bossland’s Honorbuddy and Demonbuddy, Blizzard argued, ruins the experience of its products for other players.

According to Torrent Freak, Bossland’s attempt to have the case dismissed due to a lack of jurisdiction failed, after which it became unresponsive. It also failed to respond to a 24-hour ultimatum to respond from the court, and so Blizzard has filed a motion for default judgement.

The $8.5 million payment was calculated based on Blizzard’s sales projections for the infringing products. Bossland had previously admitted to selling 118,939 products to people in the United States since July 2013, of which Blizzard believes a minimum of 36% related to its games.

“In this case, Blizzard is only seeking the minimum statutory damages of $200 per infringement, for a total of $8,563,600.00,” the motion document stated. “While Blizzard would surely be entitled to seek a larger amount, Blizzard seeks only minimum statutory damages.

“Notably, $200 approximates the cost of a one-year license for the Bossland Hacks. So, it is very likely that Bossland actually received far more than $8 million in connection with its sale of the Bossland Hacks.”

Update: The court has granted Blizzard’s motion for default judgement, ordering Bossland to pay $8.56 million in damages.

That number was calculated based on 42,818 sales of Bossland’s products in the US. The court ruled that the German company should not be allowed to sell Honornuddy, Demonbuddy, Stormbuddy, Hearthbuddy and Watchover Tyrant in the country from now on, as well as any future products that exploit Blizzard’s games. Bossland will also have to pay $174,872 in attorneys’ fees.

Courtesy-GI.biz

Can Microsoft Make Game Pass Profitable?

March 29, 2017 by  
Filed under Gaming

Of all the various innovations we’ve seen in this console generation, it may be the business model changes that have the most lasting impact on the games industry. Though originally introduced in the back half of the previous generation, the notion of giving consumers “free” games on a monthly basis for continuing their subscription to console online services has become a standard part of the model in this hardware generation.

The degree to which this is expected, and to which the perceived quality of each month’s offerings is hotly debated, is a clear signal of how the value relationship between consumers and game software is changing. Now, within the next few months, both Microsoft and Sony will evolve that relationship even further, with services which aim to give consumers access to current-gen game software through a very different transaction model.

Microsoft was first out of the blocks with its announcement, revealing at the end of last month that a large library of software for the Xbox One will be made available for a $9.99 recurring monthly subscription. Sony’s version of the concept is similar in business terms, if dramatically different technologically; it’s going to start adding PS4 titles to PS Now, a game-streaming service which currently offers a huge library of PS3 games for a $20 recurring subscription (or $45 for three months, which gets it a little closer to Microsoft’s pricing).

The goal being pursued by both firms is fairly obvious; paying monthly rather than buying titles outright is the model which has become dominant for both music and video, so it stands to reason that games will follow down the same path, at least to some extent. There’s certainly some appeal to the idea of a “Netflix / Spotify For Games”. From a business perspective, getting $120 (or $180) from consumers in flat monthly fees for games is probably actually a revenue boost if the service is primarily picked up by the kind of consumers who don’t buy a lot of new games – either predominantly buying pre-owned, waiting for titles to hit bargain basement prices, or borrowing games from friends, for example.

On the other hand, there’s an abundance of consumers out there who buy far, far more than the two new games a year that you’d get for that $120 fee – so any of those who stop buying new games in favour of a subscription service will represent a major revenue loss to the industry. Many people will be worried about that possibility, no doubt, but the reality is that there’s plenty of precedent to suggest that a subscription service won’t harm sales of new games.

New titles won’t go directly onto a subscription service; there’ll undoubtedly be a lengthy exclusivity period for people who pay for a physical or digital copy of the game, with titles only appearing for subscribers once their revenue potential in direct sales is already all-but exhausted. Subscription revenue therefore becomes a second bite at the cherry – a way of boosting the industry’s often rather ratty-looking “long tail”.

From a consumer perspective, that’s actually not all that different from the way things are now. If you’re not bothered about playing a game in its first few months on the market, then you’re probably going to end up buying a second-hand copy – or getting it from the bargain bin, or borrowing it from a friend, or perhaps even just waiting for it to pop up on PlayStation Plus at some point.

Game software generally loses value dramatically after the first few months on the market; lots of options exist for picking it up cheap, but decades of experience shows that this doesn’t dissuade fans from buying new games they really care about. Games are a “zeitgeisty” medium; people want to be playing the game everyone else is playing right now (as anyone who’s had to put up with their social media feeds being filled to the brim with Zelda chat while every electronics store in the city remains out of stock of Switch can tell you – not that I’m bitter, of course).

For the industry, however, most of these options aren’t very appealing. Second-hand software sales enrich GameStop, and just about nobody else; there’s an argument that second-hand sales boost new software sales by providing trade-in value, but it’s hard to balance the effects of that against the simple revenue loss game creators suffer from the repeated recycling of second-hand stock through stores that often deliberately push consumers towards used games instead of new ones. Borrowing the game from a friend is arguably preferable to the industry; no money is changing hands at all, so at least potential revenue hasn’t been sucked out by a third party.

Given, then, that we’re already talking about consumers who have a range of options for accessing software which provide no revenue to game creators, something like a Netflix-esque subscription service starts to make a lot of sense. How the revenue works in the back-end will, no doubt, be subject to endless negotiation and dispute, but the point is that at least the revenue exists; games on the service will continue to generate cash for their creators as long as they’re being played, and every cent they receive is a cent they’d never have seen in the currently dominant second-hand models. Moreover, the existence of subscription services could be a net boost for the games industry as a whole; the ability to access a large library of software for an affordable monthly subscription fee is something that will appeal to a lot of consumers, potentially bringing them into the console ecosystem.

If the business case for these services is very clear, however, the question of which technical approach will succeed is rather less so. For now, I think that Microsoft’s model – allowing consumers to download and play locally the software on its subscription service – is comfortably superior to the PS Now streaming system.

Game streaming over the Internet remains a technology that’s arguably ahead of its time; there are question marks over the business case (since the provider needs to pay for racks and racks of hardware which every consumer using the service already possesses in their own home, a duplication of functionality that makes little sense, especially since PS Now recently dropped support for “thin client” platforms like Bravia TVs), but more importantly, a huge number of consumers simply won’t be able to make use of the service because their broadband connections are not up to the standard required for high-quality, real-time gameplay. The demands of real-time game streaming are very different from the demands of watching live streams of video, because you can’t buffer a real-time game stream; when it works, it’s impressive, but the reality is that for a great many consumers it either doesn’t work at all or only works at time when the network isn’t congested.

Given the limitations of PS Now (and I think the dropping of support on Bravia TVs, mobile phones and so on is an ominous sign for the future of the service), Microsoft’s native software approach seems far more likely to be a hit with its consumers – indeed, the company may be hoping to recapture some of the magic of the Xbox 360 era, when its enormous advantage over Sony in online services helped it to maintain a lead over the PS3 for several years.

For Sony’s part, the desire to try to boost PS Now may be its undoing, at least in the short term; but an enhanced version of PS Plus (PS Plus… Plus?) with a library subscription built-in seems like a no-brainer in the medium term. It’s a win-win situation for platform holders and game creators alike. The only really big loser in all of this will be heavily pre-owned reliant retailers like GameStop; if game subscription services truly take off this year, they’ll have to scramble to find a new model before it’s too late.

Courtesy-GI.biz

Can Washington D.C. Become The Center Of eSports?

March 22, 2017 by  
Filed under Gaming

Washington D.C. intends to become the home of eSports in the United States, with a strategy that includes sponsorship of the NRG Esports team and the construction of a $65 million stadium.

The city’s plans, which were revealed to Mashable, will be executed by Events D.C., the District of Columbia’s convention and sports authority. The deal with NRG Esports is among the first instances of a city sponsoring a pro gaming organisation, and Washington D.C. will now have its logo and branding on NRG teams’ uniforms, livestreams and websites.

NRG, which has teams competing in Overwatch, Counter-Strike: GO, Hearthstone and Rocket League, has roots in the world of traditional sports. It was founded by Andy Miller and Mark Mastrov, the co-owners of the NBA’s Sacramento Kings, and counts the basketball player Shaquille O’Neal and the baseball stars Alex Rodriguez and Jimmy Rollins among its investors.

“This is just another prong in our strategic approach to continue to make D.C. a great place to live and work and play,” Events D.C. chairman Max Brown told Mashable, highlighting the number of students attending the city’s many universities.

“There are lots of younger kids who are here and are coming here every year through our universities, so we think it makes a lot of sense for us as a city to plant a flag [for eSports], and ultimately be the capital of eSports like we’re the capital of the United States.”

There are other “prongs” to the city’s strategy, the most notable being the construction of a new stadium. The arena will be used by the WNBA team the Washington Mystics, as well as other events, but it is being built “with eSports in mind.”

“A $65 million 4,200-seat, state-of-the-art arena,” Brown added. “[It will] come online in late-2018, early-2019. Fully tailored and wired for esports.”

Courtesy-GI.biz

Mass Effect: Andromeda PC Specs Revealed

March 6, 2017 by  
Filed under Gaming

EA and Bioware have released official PC system requirements for its upcoming Mass Effect: Andromeda game that has gone gold and will be launching on March 21st.

According to details provided over at EA’s Origin site, those looking to play the new Mass Effect game will need at least an Intel Core i5-3570 or AMD FX-6350 CPU, 8GB of RAM and Nvidia Geforce GTX 660 2GB or AMD Radeon HD 7850 2GB graphics card.

The recommended system requirements rise up to an Intel Core i7-4790 or AMD FX-8350 CPU, 16GB of RAM and either an Nvidia GTX 1060 3GB or AMD RX 480 4GB graphics card.

Both minimum and recommended system requirements include at least 55GB of storage space as well as a 64-bit version of Windows 7, Windows 8.1 or Windows 10 OS.

The official release for the game is set for March 21st in the US and March 23rd in Europe and it will be coming to PC, Playstation 4 and Xbox One. Those with EA Access and Origin Access should get the game five days earlier.

Courtesy-Fud

Take-Two Goes Up But Misses The Mark

February 14, 2017 by  
Filed under Gaming

Take-Two today reported its financial results for the three months ended December 31, and they paint a mixed picture of the company’s performance for the holiday season.

Speaking with GamesIndustry.biz, Take-Two chairman and CEO Strauss Zelnick touted the company’s holiday slate of releases, mostly updating numbers revealed around Take-Two’s last earnings report. Mafia III has now sold-in approximately 5 million copies, while Civilization VI has surpassed 1.5 million units sold-in. NBA 2K17 has sold-in nearly 7 million units (up about 10% year-over-year), while Grand Theft Auto V continues to move copies, with sell-in now topping 75 million. Its recurrent consumer spending business (virtual currency, microtransactions, and DLC)has also done well, Zelnick said, noting that Grand Theft Auto Online posted a record number of players in December.

Despite some of those gaudy numbers, the quarter was not an unqualified success. The publisher reported GAAP net revenues of $476.5 million, up 15% year-over-year but near the low end of its $475 million to $525 million guidance. Additionally, Take-Two’s guidance called for a net income of $17 million to $30 million, but it ultimately posted a net loss of $29.9 million for the quarter.

“I know it’s a bit clouded by GAAP reporting, which requires us to defer revenues, and requires us to accelerate costs related to those deferred revenues, so we have a mismatch,” Zelnick explained. “It can look like, from a GAAP point of view, that we’re not doing as well as we’re doing from a bookings and cash flow point of view.”

Total bookings for the quarter did indeed jump 51% year-over-year to $719 million, with the aforementioned titles and WWE 2K17 serving as the largest contributors to that number. Bookings from recurrent consumer spending did particularly well, growing 55% year-over-year and making up 23% of the company’s total bookings.

The holiday quarter also saw the release of Take-Two’s first VR efforts, Carnival Games VR and NBA2K VR Experience. The company didn’t provide any performance metrics for those titles, but it’s clear Zelnick wasn’t counting on them to contribute too much.

“We were happy to bring the titles to market because it was a reflection of the fact we have the R&D abilities to address video games in a VR format if and when that’s a meaningful part of the business,” he said. “I have expressed skepticism in the past, and I think that’s been borne out by the fact that the market for VR in video games remains quite small.”

Zelnick also addressed the company’s $250 million acquisition of Social Point, the Barcelona-based mobile developer of Dragon City and Monster Legends. As for how the new studio will be integrated into the company, Zelnick said the goal was more to support them to continue doing what they’ve already been successful doing, while being mindful not to mess with what works.

“What we like about Social Point is they have multiplicity, it’s not just one [hit] and that distinguishes them from a lot of people in this space,” Zelnick said. “And they know how to monetize those hits and interact with their audience. I’m hoping we can help them grow even faster, but minimally, we want to be supportive so they can keep doing what brought them to this place in the first place… the way we tend to integrate new creative acquisitions is we want those companies to retain their identity and their independence, and to continue to do what works in the market.”

That’s not to say the company is abandoning all hope of synergy. Zelnick said he hopes Take-Two can help lend its experience in Asian markets to help Social Point find success in those territories, while acknowledging that Take-Two can probably learn a few things about monetizing in a free-to-play environment that could be brought to bear on titles like NBA 2K Online and WWE Supercard.

Courtesy-GI.biz

Are Publishers Missing The Billion Dollar Opportunity Of eSports?

February 6, 2017 by  
Filed under Gaming

The traditional sports ecosystem is dominated by three models of organisation. The most decentralised sports, like the PGA Tour or NASCAR, consist of largely independently organised competitions, which are sanctioned and governed by an administrative body and are open to any qualifying athlete. From there, we have typical leagues like the NBA or Premiership, which have a set number of recurring teams and players, and are extensively managed by a league front office that’s owned by each team.

eSports are quite different. If you choose to race without NASCAR or play basketball without the NBA, there’s nothing – and no official body – that can prevent you from replicating the experience. No one ‘owns’ racing or basketball, but someone does own Overwatch, and if you want to play you essentially have to go through that company. If you wanted to create your own eSports league, your ability to market or represent it would be entirely dependent on the legal team of the game’s publisher. Furthermore, the core experience is fully controlled by that publisher.

“No one ‘owns’ racing or basketball, but someone does own Overwatch, and if you want to play you essentially have to go through that company”

Leagues that are operated or endorsed by publishers can do unique things – e.g. item drops, exclusive/first-release capabilities, bundled original content – and offer unique monetisation opportunities. Three months before The International, the annual world championship for Dota 2, Valve sells interactive in-game items that directly contribute to the tournament prize pool. This model has been so successful that, in 2016, the prize pool reached $19.17 million.

Most tier-one publishers also handicap the data streams that the public can leverage. Whereas in traditional sports there are multiple providers of a firehose of sports data, game publishers offer barebones APIs that allow access to little more than character information and select match data. Valve offers an open API but, as events this year have demonstrated, it can shut off access and change policy at any time. On the platform side, Twitch is miles ahead of its competitors in terms of creating an external ecosystem thanks to its two year head-start and passionate developer community, but it maintains an ever more precarious balance between build vs. buy.

Because of these walled gardens, the investible opportunities within eSports often end up being features not products, which set them and their investors up for more of an acquihire than a Twitch-esque exit. There’s a strong argument to be made to publishers that working with third-party developers will lead to a stronger overall bottom line, foster innovation and provide defensibility.

Economics 201

It’s no secret that being a top publisher is a lucrative business. Activision reported $1.57 billion in revenue for Q2 of 2016 and EA $1.271 billion. It’s rumoured that Valve’s 2015 revenues reached $3.5 billion in 2015, and Riot Games’ over $1.6 billion. It’s not hard to see why partnerships with third parties and external API infrastructure aren’t a priority with so much money flowing, but that’s shortsighted. As publishers start thinking about how to monetise beyond game licenses and IAP, every moment not spent developing the ecosystem is a wasted one.

This isn’t unparalleled, and we can see examples of where large platforms in other verticals have made the decision to invest in their future, often early on in their company lifecycle. Salesforce, an enterprise software company, has a market cap of $50 billion. A report last year by IDC put the opportunity front and center: the AppExchange currently generates 2.8x the revenue of Salesforce itself and is expected to grow to 3.7x the size of Salesforce.

“As publishers start thinking about how to monetise beyond game licenses and IAP, every moment not spent developing the ecosystem is a wasted one”

Slack, the enterprise collaboration tool darling, also gets it. Even before raising money in April 2016, at a $3.8 billion valuation and boasting over 1.25 million paying users, they announced the Slack fund in December 2015 - an $80 million investment into supporting new integrations. Slack and Salesforce could have gone the closed route and developed these integrations and products internally, but they understood that the immediate revenue trade-off was well worth the ability to focus on creating the best core product possible, in addition to leveraging minimal company resources.

Now to everyone’s favourite eSports comparison : traditional sports. During the height of the daily fantasy sports craze in 2014/15, the NBA entered a multi-year partnership with FanDuel that gave it an ownership stake. The NFL expanded its partnership with Providence Equity in 2013, investing $300 million to participate in, “media and technology deals where it believes the league could help play a strategic role.” And these are just a few examples. Partnering with and investing in new properties allows older, larger establishments to participate in the upside of nascent industries quickly and cheaply.

Publishers are thinking about the shelf-life of games.  The NFL and NBA will both be around in 25 years, but what about League of Legends or Counter-Strike? Opening up the ecosystem not only benefits players and fans by allowing them an outlet to interact with their favorite IPs, but ultimately enhances the core value of those IPs and gives publishers an opportunity for additional exposure through revenue share, API fees and strategic investments.

In addition to commercial benefits, let’s look at network effects. Valve is the publisher of both Counter-Strike: Global Offensive (25 million+ copies sold, 8.2 million+ players in the last two weeks), and Dota 2 (87 million+ times downloaded, 11 million+ active players in the last two weeks.) While the titles have richer histories than virtually any other competitive esport, Valve’s open API, developer tools and hands-off approach has contributed to their sustained success and status as two of the top eSports titles.

ELeague, FaceIt Esports Championship Series and Gfinity, ESL One and IEM. These streams of revenue have contributed to a high demand for professional CS:GO players, leading to lucrative contracts and opportunities.

3: The most lucrative has been the in-game skins economy, which allows players to purchase crates that contain different cosmetic versions of CS:GO weapons or Dota 2 items. During major tournaments, Valve has offered exclusive stickers that generate up to high six-figures for qualified teams. Valve has also allowed free reign on opening up use cases within this skins economy, which led to wagering, gambling and marketplaces (Bloomberg estimated yearly transaction volume to be >$7 billion.) Variations of this model have since been followed very conservatively by multiple franchises, including Call of Duty, Halo, H1Z1 and Overwatch.

On the platform side, Twitch’s dominance in livestreaming can largely be credited to going all-in on eSports first, but Twitch also has numerous native or platform exclusive features for its users. Diving deeper, this experience is powered by a blend of features that were built in-house or created by third parties. Examples include:

Bits, preceded by Streamlabs and StreamTip: direct donations from viewers are one of the foundations of a streamer’s income.

Clips, preceded by Oddshot, Plays.tv and Forge: allows viewers and creators to efficiently capture highlights and share to different social media channels.

Subscriptions / Partner Program and 3rd-party services (Revlo, Gamewisp and Curse/Discord integrations): subscriptions are another big source of income for streamers, and the third-party services all add further value to a sub and reduce churn.

TwitchPlays: what started out as a fun social experiment (TwitchPlaysPokemon) is now its own category to interact with potential customers for publishers.

Chatbots (Moobot, Nightbot and Xanbot): automated assistants that help moderate chat to prevent spamming and inappropriate behaviour.

Stream+ currency: Twitch’s new currency announced at TwitchCon 2016, which will allow developers to integrate monetisation options directly into games.

Facebook Live has launched to much fanfare, and given the massive distribution channel it will always be a huge threat. However, until it can get to feature parity Facebook Live will need to rely on traditional media partnerships or viral hits to create consistent content. These types of partnerships don’t scale when we’re talking about the individual streamers and professional players that have played a large part in getting Twitch to 100m+ MAUs, although the signing of G2 and Heroes of the Dorm is a good first step. YouTube Gaming is farther along and is doing a great job of starting to launch some analogous features.

How, then, should publishers look to partner with entrepreneurs and third parties? I’d like to see publishers create a vehicle, individually or collectively, in the model of Disney Accelerator, to offer mentorship, funding and support to kick-start the next generation of eSports businesses. Publishers should be developing their games as platforms, not individual entities - tons of data are being generated and archived and there is a treasure trove of use cases for them.

I’m confident that we’re slowly moving in the right direction. One day we’ll see a truly open ecosystem with publishers and third parties living in harmony.

Courtesy-GI.biz

Is Resident Evil 7 Any Good?

January 26, 2017 by  
Filed under Gaming

In the summer of Pokémon Go Mania, it is easy to forget that there was a different obsession gripping fans of another iconic 1990s franchise. The Resident Evil 7 demo (released during E3 last June) was a creepy experience where you had to escape a dilapidated house owned by a murderous family. It went down well with horror fans; so well in fact, that when players stumbled upon a seemingly useless item – a mannequin finger – it turned into an obsession. Twitch streamers would play the demo for hours on end in an effort to uncover its mystery, theories would pop up on forum threads that would go on for hundreds and thousands of pages, and my inbox was full of friends – as if I had some insider knowledge – asking me: ‘What does the finger do? Will it get me out of the house?’

“We were really surprised by all that,” says Resident Evil 7 producer Masachika Kawata “We were planning to update the demo, but also leave a few loose threads, imply bigger things and just have odds and ends for you to discover, and one of those just so happened to be a mannequin finger. But the fact that it became such a focus of people’s attention, that was something that took us quite by surprise.”

Game director Koshi Nakanishi adds: “It certainly put a lot of pressure on us to put out the next update to the demo. We went faster on that than we had originally planned because of the explosive buzz around the finger. We didn’t want people to wait too long. This was the summer of last year, so we were working on a demo update while we were also in the middle of the development of the main game. Doing those things in parallel was certainly difficult for us.”

The Resident Evil 7 demo was a strategy that certainly seemed to work for Capcom. The concept was borrowed almost wholesale from Konami, which announced its horror game Silent Hills via the demo PT. Silent Hills was cancelled soon after and PT was removed from the PlayStation Store, disappointing horror game fans the world over. Capcom capitalised on that, although Nakanishi and Kawata insist its decision to do a demo was more about educating fans than anything else.

“With the launch announcement trailer for Resident Evil 7, we made a promise that we were going back to horror,” Nakanishi explains. “So we wanted to have a horror-focused demo that told gamers that they can trust us when we say: ‘Resident Evil is a horror game once more’. At the same time, it wasn’t the right moment to tell everybody about everything that is in the game in terms of gameplay. We wanted to get them on-board with the horror aspect first, and then the rest of the dominoes could fall. That’s why we decided to have a demo featuring just horror and no combat. Yet as the campaign progressed, and people accepted the new direction, we started to announce more details about characters and combat, and we could update the demo.”

Resident Evil 7’s reviews have just started to emerge, and the reception from critics is that Capcom has managed to rejuvenate its biggest IP after a couple of disappointing releases.

In particular the last game. Resident Evil 6, released in 2012, sold well but received a kicking from the consumer press. The game was bloated and more an action blockbuster than a horror game. However, although critics – and die-hard fans – were disappointed by the direction the series had been heading in, the franchise’s popularity had never been higher. Resident Evil 6 is the second most successful game Capcom has ever released, just behind the equally action-orientated Resident Evil 5.

“From a business perspective, Resident Evil 6 was a success,” acknowledges Kawata “But we had pushed that style of Resident Evil gameplay, with the big storyline and the hero characters, pretty much as far as we could. It was a blockbuster scale of game. That almost left us with no choice but to change the series in order to keep it alive, because where do you go after that size and scale of game?”

He continues: “Certainly if you compare the sales of Resident Evil 1, 2 and 3 as a unit [the more traditional horror games], and compare it to Resident Evil 4, 5 and 6 [which are more action-orientated], the sales were a lot higher on the more recent titles. But that’s not just because of the types of content, we have got better at selling our games. The market has got bigger as well. So just because we are going back to horror, I don’t expect we will see a drop to historical levels. The whole company is behind this title and the horror approach, and I’m confident that we are going to do well with this one.

“We also take a look at lifetime sales, and not just day one. Because some fans might be on the fence a bit, and be unsure about the new direction. So whether or not that has an effect on our initial out-of-the-gate sales, I am not sure yet. But over the lifetime of the product, I’m sure we will be able to hit our targets.”

“Although the situation with horror games is not the same as it was the last time we released a mainline title, we do still feel we can appeal to a lot of people, including hardcore horror fans.

Masachika Kawata, Capcom

The survival horror genre has had an interesting few years. Via the indie scene, it’s enjoyed somewhat of a renaissance via the likes of Slender Man and Outlast. However, the results have been mixed in the triple-A space. In 2014, Sega released Alien: Isolation, while just a few weeks later Bethesda launched The Evil Within (which was from the original creator of Resident Evil). Both titles were well received by critics, but commercially they failed to dissuade the theory that the survival horror genre was past its prime.

“The market for horror games has changed over the years, I suppose,” Kawata adds. “But Resident Evil has always been a series that keeps up, it isn’t afraid to change the style of gameplay. We have evolved a lot over the years in order to meet the needs of the market and our fans. So although the situation with horror games is not the same as it was the last time we released a mainline title, we do still feel we can appeal to a lot of people, including hardcore horror fans.

“And the fact that we have rival titles in the horror space is not a bad thing, because it only increases the market for horror games as a whole. And we will do the same when we release this game. There will be a further hunger for more horror games in general, and that can only be a good thing for us in the long term.”

 

Mr Baker is not someone to be trifled with

Resident Evil 7 brings back many of the classic components of past games in the series, including item management and save rooms. There’s also a huge mansion to explore, which evokes memories of the very first title in the franchise. It still feels distinctly like a Resident Evil game, but the developer has made a number of major changes, particularly in terms of the perspective. Whereas all the mainline Resident Evil games have adopted a third-person view, Resident Evil 7 has gone first-person – and for the first time since the Gun Survivor/Dead Aim light gun series on PlayStation 1 and 2. It follows in the footsteps of Outlast, Slender Man and Alien: Isolation, which also used a first-person view.

“The first-person perspective is one way to make any kind of game, it is an option that you have at any time,” Nakanishi says. “And as Kawata-san says, after Resident Evil 6 we had to reflect upon what the series was and where it was going. Some fans had said that Resident Evil 6 had lacked focus, and I wouldn’t disagree, and it was certainly one of my concerns in terms of how far we were going in that direction. So bearing that in mind, having a more focused, scarier, intimate Resident Evil was needed. We wanted to be able to not only do that, but also bring this more focused and scary experience to players in a very fresh and novel way that hadn’t been seen before in a Resident Evil.

“Some fans had said that Resident Evil 6 had lacked focus, and I wouldn’t disagree.”

Koshi Nakanishi, Capcom

“If you have a mission in mind to make a very immersive, atmospheric survival horror game, first-person is a good way to achieve that. The first-person viewpoint was more an obvious answer in terms of how to achieve our goals for Resident Evil 7, than being particularly inspired by any other external influences in the horror genre.”

That first-person perspective also enabled Capcom to capitalise on another new trend in the games sector – virtual reality.

“Going back about two and a half years, when we decided on the first-person perspective, it was obvious to say: ‘Oh you could do VR because first-person is the typical VR experience’,” he explains. “But it was just a vague idea at that point, and it wasn’t until later in development that we actually implemented VR. It was something that was relatively easy to do since we were at a stage where we had an atmospheric first-person experience in place.”

Nothing was cut from the game to better fit VR, but there were a few tweaks, including measures to reduce camera shaking in order to “make VR more comfortable”. Yet one thing the studio was a little concerned about is how scary the experience can be. The game is obviously meant to be frightening, but as anyone that played the demo at E3 will tell you, being completely immersed in that house can be quite an overwhelming experience. At E3, Capcom reps were recounting stories to me about how several journalists had asked to have the headset removed.

“When people are playing the game in VR for the first time, you do find yourself telling them not to push themselves and respect their own personal limits when it comes to intensity of experience in VR,” Nakanishi says.

Kawata adds: “I would almost recommend that if people are not sure, or think VR is too much for them – even if you have a PSVR at home – there’s no pressure to use it when you play the game for the very first time. Play the game normally first, see how you like it, see how scary it is for you on the TV, and then consider whether you want to jump into the VR mode. As it is so easy to change into VR as well, you can just take it at your own pace.

VR and first-person aside, some of the other changes Capcom made was in terms of development approach. As well as building a new engine (aptly titled the RE Engine) the team also adopted photogrammetry when putting items and even actors in the game. Capcom would fully scan the subject and simply place it in the game, with no need for additional drawing. The firm hopes this had improved the realism of the experience, although it wasn’t without its challenges.

“With photogrammetry, the actors needed to be in costume, they needed to be wearing movie-style make-up so that they look exactly like we want for the final game.”

Koshi Nakanishi, Capcom

Nakanishi concurs: “You get quick results, although the preparation takes a lot more work. Actors were difficult. Whenever you scan an actor, what I would prefer to do – and have done in the past – is take that scan and touch it up, but with this it tends to head into unrealistic territory. It doesn’t look good if you have a scan and start fiddling with it. So you have to get it really right at the scan stage. So the actors need to be in costume, they need to be wearing movie-style make-up so that they look exactly like we want for the final game. That way, once the scan is done, then you pretty much have the final result. That sort of preparation was a lot more difficult than with other processes.”

There’s also been a significant change when it came to writing. Resident Evil has a reputation for terrible dialogue, and fans would argue that’s part of its B-movie charm (although it’s probably more to do with bad translation). It’s never easy for a Japanese studio to try and build a convincing game set in a Western environment, and so the team hired Texan writer Richard Pearsey (best known for FEAR and Spec Ops: The Line) to help them Westernise its latest effort.

“The reason we hired Richard was for cultralisation, really,” Nakanishi explains. “The series is famous – especially the first titles – for having weird, cheesy english dialogue. Things like: ‘You were almost a Jill Sandwich’… it’s well known by now. It’s been part of the fun of the series in many ways, but you certainly couldn’t say the old lines were especially naturalistic. Coming to the modern day, although we love that classic stuff, if you want to make a serious horror game, you need to have a natural dialogue. It has to feel right and can’t be something that’s been translated badly from Japanese, or whatever.

“So at Capcom, we worked on the flow of the game from start to finish, and put in place the general storyline. And then Richard made the dialogue make sense, polished it up for us and made suggestions on how to make things stick together better. So that when the player plays it, it feels like almost natively Western.”

There’s still a level of uncertainty over whether the game will be successful. There are question marks over the genre, the impact of previous disappointing Resident Evil games and the fact it’s coming out in January – a month not known for high game sales. You could also argue that in today’s uncertain political and economic environment, we could probably do without a horror game.

Even so, this is the most impressive Resident Evil title since the groundbreaking Resident Evil 4 in 2005. And it’s been backed by a major PR and marketing campaign – including some inventive live-action experiences and those expansive demos. Capcom has given it its best shot, now it’s a case of seeing whether the market responds.

Courtesy-GI.biz

Is EA Slowing Moving Away From Appearing At E3

January 20, 2017 by  
Filed under Gaming

It would appear that the trend of big publishers hosting their own events will continue in 2017. Last year’s E3 show floor was missing booths from the likes of Electronic Arts, Activision Blizzard, Disney and Wargaming. For its part, EA decided it could better serve the fans by hosting its own event next door to E3, and now the publisher has confirmed that EA Play will be making a return for the second year in a row, but it won’t be as close to the Los Angeles Convention Center.

EA Play will be held from June 10-12 at the Hollywood Palladium, which is around seven miles away. “Whether in person or online, EA Play 2017 will connect fans around the world to EA’s biggest new games through live broadcasts, community content, competitions and more. Those that can attend in Hollywood will experience hands-on gameplay, live entertainment and much more. For anyone joining digitally around the world, EA Play will feature livestreams, deeper looks into EA’s upcoming games and experiences, and content from some of the best creators in the community,” the company stated in a press release.

Furthermore, a spokesperson confirmed to GamesIndustry.biz that EA will indeed be skipping out on having a major E3 presence. “EA Play was such a powerful platform for us last year to connect with our player community. We learned a ton, and we wanted to build on everything we loved about last year’s event to make EA Play 2017 even better,” EA corporate communications VP John Reseburg said.

“So after an extensive search, we’ve selected the Hollywood Palladium as a place where we can bring our vision of creativity, content and storytelling to life, and build an even more powerful experience to connect with players, community leaders, media and partners. EA Play 2017 will originate from Hollywood, with more ways for players around the world to connect and experience the excitement.”

It’ll be interesting to see what the other major publishers do about E3 this year. We’ll be sure to keep you posted.

Courtesy-Fud

It Appears That The Video Games Market Had A Bang-Up Year

December 30, 2016 by  
Filed under Gaming

Games generated $91 billion worldwide in 2016, according to a report from beancounters at SuperData Research who have been adding up some numbers on Christmas Party napkins.

Most of the cash was made in the mobile game segment some $41 billion (up 18 percent), followed by $26 billion for retail games and $19 billion for free-to-play online games.

Beancountrs at SuperData said that the new categories such as virtual reality, esports, and gaming video content were small in size, but they are growing fast and holding promise for next year. Hardware firms like Sony and HTC to take the lead in 2017. Still,

VR grew to $2.7 billion in 2016. Gaming video reached $4.4 billion, up 34 percent.

Mobile gaming was driven by Pokémon Go and Clash Royale. The mobile games market has started to mature and now more closely resembles traditional games publishing, requiring ever higher production values and marketing spend. Monster Strike was the top mobile game, with $1.3 billion in revenue.

The esports market generated $892 million (up 19 percent) in revenue. A string of investments in pursuit of connecting to a new generation of media consumers has built the segment’s momentum, as major publishers like Activision, Riot Games, and EA are exploring new revenue streams for selling media rights, according to the report.

Consumers increasingly download games directly to their consoles, spending $6.6 billion on digital downloads in 2016 which has helped improve margins.

PC gaming continues to do well, earning $34 billion (up 6.7 percent) and driven largely by free-to-play online titles and downloadable games. League of Legends together with newcomers like Overwatch are driving the growth in PC games.

PC gamers also saw a big improvement with the release of a new generation of graphics cards.

Courtesy-Fud

Does Nintendo’s 3DS Have Security Issues?

December 12, 2016 by  
Filed under Gaming

Nintendo is offering cash rewards for hackers that can expose security weaknesses in its 3DS family of consoles.

Upwards of $20,000 will be made available to successful hackers who can help address the weaknesses in Nintendo’s portable machine. The offer does not extend to Wii U.

It’s part of a program the firm is working on with HackerOne.

The offer is Nintendo’s renewed efforts to reduce piracy (including game application dumping and game copying execution), cheating (which includes game modification and save data modification) and the spreading of inappropriate content to children.

It suggests that Nintendo is true to its statement that it wants to maintain its 3DS business, even after the launch of its Switch console in March. Switch, which doubles as both a home and portable console, is seen as the natural successor to the 3DS, although Nintendo has stated it will continue to release games for the hardware. Over 60m 3DS consoles have been sold worldwide since the machine launched in 2011.

The ‘reward’ for finding vulnerabilities in the 3DS hardware will range from $100 to $20,000, and the amount will be at Nintendo’s discretion. Vulnerabilities that are already known will not be counted. The level of the reward will depend on the importance of information, quality of report and the severity of the vulnerability. Nintendo is looking for reports that include a proof of concept or functional exploit of code.

Courtesy-Fud

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