Activision Blizzard reported its financial results for the quarter ended June 30 today, revealing an unprecedented reliance on digital revenues.
The publisher reported revenues of $970 million in sales on a GAAP basis, 49 percent of which came from digital channels. On a non-GAAP basis (excluding the impact of changes in deferred revenues), the digital percentage was actually 73 percent of the company’s $658 million in sales. Activision attributed the digital strength to Blizzard’s lineup of titles (World of Warcraft, Hearthstone, and Diablo III), combined with digital sales for Call of Duty.
However, not all of those digital sales drivers posted strong numbers for the quarter. World of Warcraft in particular lost about 800,000 subscribers over the period, and as of the end of June was down to a paying player base of 6.8 million gamers. However, Activision Blizzard characterized this decline as a “seasonal” dip in advance of the next expansion, Warlords of Draenor, which is set to launch later this year. The publisher likened the downturn to the subscriber losses that happened in 2012 ahead of the Mists of Panderia launch.
On a GAAP basis, Activision Blizzard revenues were down nearly 8 percent, with net income down 37 percent to $204 million. However, the publisher still beat its previous guidance. On a non-GAAP basis, revenues were up about 10 percent to $658 million, while non-GAAP net income was reported at $45 million, down 50 percent year-over-year.
The quarter’s performance gave Activision Blizzard enough confidence to update its previous guidance for the full year. For calendar year 2014, the publisher had previously forecast total GAAP revenues of $4.22 billion, but moved that up to $4.24 billion today. The company also projected earnings per share of $0.91, up from $0.89.
Whether you think it’s a fad or the next big thing, there’s no denying that the return of virtual reality, this time backed up by competent technology and plausible price-points, has caught the imagination of developers and their customers alike. Projects for Sony’s Morpheus and the Oculus Rift are popping up everywhere, from the modest to the monumental.
As of yet, though, none of the major publishers have publicly committed much to the new platforms, leaving it to smaller studios to test the waters of what could potentially form an entirely new frontier for games. Many of those smaller studios are changing their models and work-methods entirely to focus on the new technology, preparing to hit the ground running once consumers are finally able to get their hands on the headsets.
One of those studios is Patrick O’Luanaigh’s nDreams. A studio which has always enjoyed a broad remit, nDreams now has “around five [VR] projects on the go”, including forthcoming title The Assembly: a 3D VR adventure game which will see players investigating a ground-breaking scientific organisation which has started to push some ethical boundaries.
“We decided that an adventure game would make sense because we don’t have the budget to draw tons of environments that you run through at top speed,” Patrick tells me. “Adventure games work well because we’ve found that, when people play with VR, they want to really look around and explore. They want to examine the walls, everything, in a way you might not in a FPS.
“The game is split into sections of about 10-15 minutes long, which we thought makes sense for VR. We still don’t know what the final consumer versions will be like, but 10-15 minutes seems sensible. People can either do a chapter then take a break, or they can play through the entire game.
“We spent around six months prototyping lots of experiments with VR. What happens when your avatar wears glasses? What would it be like if it’s cold and you have frosty breath? What about different sized characters? That tested really nicely – Madeline is 5’1″ and Joel is 6 foot and you really notice that. You notice the breathing, the speed they walk at, the perspective. It’s all very different. You feel like you’re playing those roles.
“We’ve also got lots of specific things for VR, microscopes, binoculars, night vision goggles, things like that. They work really well. We’ve also got plenty of puzzles and other bits like vertigo and fear sections that we think are great for VR, so it’s a real medley.”
The Assembly is a definite step up for the developer in terms of scope and ambition, so I ask O’Luanaigh if the resource costs were pushed up even further by the technology they’re working with. In short, is making a VR game more expensive?
“I don’t know, honestly,” he admits. “It’s probably slightly more for VR, but there’s not a lot of difference. We’ve kind of picked our battle here and chosen a game we think would be great for VR, but one that we can also afford to make. This seemed like the right genre and approach. We’re taking influence from games like Gone Home and Dear Esther – with more puzzles, but still about exploring a great environment. I guess if we’d just done it as a Steam game it might have been a bit cheaper, but not a big difference.
The Shahid Effect: Sony’s indie push & VR
Being PC-based, the Oculus Rift has a clear advantage in attracting indie developers: working on an open platform with little or no restriction. That said, Sony has made a very strong argument to small studios this generation, something it will need to continue if it wants to recruit the most exciting VR ideas. O’Luanaigh agrees, and says that there’s no need for concern on that front.
“Sony has been fantastic,” he says, enthusiastically. “We’re very lucky in that we’ve been working on Home for a number of years, so we have a good relationship with Sony. Our account manager happens to be the evangelist for Morpheus as well, so they’ve been great. They’ve been very supportive.
“We saw the Morpheus very early, it was one of the things that persuaded us to pivot away from what we were doing and spend so much time and money on VR. They’ve been really open, really helpful. I’ve got nothing but positive things to say about Sony. I can’t wait to see the final hardware that’s going to launch to consumers.”
“It’s more about the design, doing things the right way. There are a lot of ways you can mess up VR really easily. We’ve figured out what works and what doesn’t and designed the game with that in mind. It’s working really nicely.”
The Assembly is due for release on both the Oculus Rift and Sony’s Morpheus headset, currently the two mindshare leaders of virtual reality tech. Whilst neither is likely to admit it, each has a vested interest in the success of the other – a reason which was floated to explain Valve passing on some of its own VR research to Oculus last year: if the tech is to succeed it needs to attract developers. To do that, a rough ‘gold standard’ needs to be established, giving developers a technological target to aim at for cross-platform games. Having used both the Oculus and Morpheus and found them to be roughly equivalent, I’m interested to know if O’Luanaigh sees parity in the two visors.
“They are very, very similar, technology-wise,” he confirms. “Obviously with Oculus being on PC it’s a lot more open, there’s more freedom to mess around, but it’s also easier for people to just stick stuff out, to make bad VR. That’s one of the big risks – it’s very easy make people feel ill. You have to have good software as well as hardware. I think it’s easier for Sony to control that, because it’s a closed platform. They can say, do this, do that; to make sure people don’t do stupid stuff. I suspect that Oculus will do something similar, but obviously it’s open, so people can put what they want up online.
“In terms of specs, though, they’re really very similar. We’re creating this game for both and there’s not a big difference. There are a few little things involved in supporting the PS4: the Dualshock and some of the ways that PSN works, but by and large they’re very similar.”
Moving away from comfortable ground is an essential part of growing almost any company, but when you’re relying on a third party, such as a platform holder, for your success, there’s an additional risk. nDreams must be confident about the future of virtual reality to put such stake in it, so I ask Patrick if there’s a sales point when they’ll breathe a little more easily.
“We’ve kind of come at it the other way,” he counters. “We believe it will work. We’ve got financial models and projections but it’s all a bit finger-in-the-air, it’s very hard to know. We’re committed to doing it though, we’ve got a lot of launch titles and we’re going to be pushing and growing those. We’re lucky in that we’re financially secure enough to do that without too much stress.
“We’ve been looking at things like previous install bases of hardware on consoles. If you look at the Kinect install base, which was amazing, really – something like 35-40 per cent on the 360 – we’ve made projections on a conservative install base over time. I actually think that it’s going to be better than that, given the excitement around VR and the customer reaction when they see it, but we’re being fairly conservative. With Oculus they’ve spoken about trying to sell a million, by a set point. We’ve been working along those lines. Again, we think it’s going to do really well.
“There’s going to be other headsets out there as well, that haven’t been announced, we think those are going to be very exciting. There’s not going to just be two headsets, there’ll be a number of things over the next few years. We’re going to try and work out as best we can what we think they can sell, but we want to be there at launch with products so we can build and learn what people like and don’t like.
“It’s definitely going to be more of a core audience at launch, but I think Facebook’s acquisition of Oculus means that it’s going to be a bit cheaper than it would have been. I think they can afford to give it away at cost, which is brilliant. But it’s really hard to put a finger on how much that market is going to be worth. We think it’s going to be a couple of billion within two years, but we’ll see. We may be massively over-egging, or hugely under-estimating it. What’s clear is that there’s massive potential here, it could really explode. When you get a great VR experience it’s really special.
“I was at E3 playing Alien Isolation on Oculus and, although I’m slightly embarrassed to admit it, when it came to the end I ripped my headset off because I was so scared. You really feel like the Alien is there and actually attacking you. I’ve never done that with Dead Space or Resident Evil or anything. It really heightens your emotions.”
I can attest to just how absorbing that experience can be, having lost myself in the Morpheus demo at GDC in March. Even surrounded by other gawking journalists and nervous PR, dropping that helmet on was, in many sense, completely akin to teleportation. That demonstration wasn’t exactly a road-test, though. These were first-party, highly polished demonstrations designed to show off the potential for the new technology in a short, well-controlled session. Had my first experience been a shoddy, half-finished or poorly-executed demo instead, I might never have been interested at all. For O’Luanaigh, the responsibility for audience growth is firmly on the shoulders of developers.
“For me, it’s really important,” he tells me when I ask whether VR needs to get it right this time around. “I’m utterly convinced that VR is now a technology that’s caught up to an amazing idea and can make it work. The only thing that can ruin that is dreadful games. It’s easy to make a rubbish VR game with a bad framerate that takes control of the camera and does stupid things. That’s the worst thing that could happen, and I think that both Oculus and Sony get that. I think everyone entering the VR space gets it, but we just need to keep an eye on it.
“At least one or two of the projects we’re working on are non-traditional games, it’s definitely quite different. You’ll see VR spread into different areas over the next few years”
“I hope that the press plays its part as well and makes sure that, if there’s one rogue VR game that’s snuck out and it’s dreadful, that they won’t use that to argue that VR is awful.”
Good games might be the things that get people queuing in the shops, or, more likely, clicking online, but there are clear possibilities for virtual reality which fall well outside our sphere, particularly for Oculus’ Rift. Will nDreams being dipping a toe in those waters?
“At least one or two of the projects we’re working on are non-traditional games, it’s definitely quite different. You’ll see VR spread into different areas over the next few years, although it’ll definitely start with games. Oculus aren’t showing off Facebook social pop-up sims, they’re showing off great games.
“I don’t think Facebook has changed that but I think you’ll notice them start to add stuff in over the next few years. You might see spaces where people can hang out with their friends, stuff like that. If you’ve ever read Snowcrash, I think that sort of thing is why Facebook bought Oculus. They’ve got more money now, but it’s the same people with the same values. It’s very cool to be rude about Facebook, but I think a lot of the people who were being rude about Facebook when it bought Oculus were doing it on Facebook, which is pretty ironic.”
The new generation of consoles and booming category of free-to-play PC games won’t be enough to keep the market growing indefinitely. According to a Juniper Research report, the market will soon turn south, falling from $46.5 billion worldwide this year to $41 billion in 2019.
Despite that 12 percent drop, the PC and console segment will still account for more than half of all gaming revenues through 2019. Additionally, Juniper said software sales on PC and console “will remain relatively healthy,” with PC revenues topping those of its console counterparts.
The PC & Console Games: Trends, Opportunities, and Vendor Strategies 2014-2019 report also predicts the console cycle to continue as in generations past. That means the new systems will spark sales in the short-term, with growth slowing and then turning negative as the new platforms age. Juniper also expects another generation of consoles likely arriving around 2019, with the new platforms having a similar lifespan to the their predecessors.
Dedicated gaming handhelds will continue to play a part in the industry, with Juniper penciling them in for about $2.2 billion in revenues in 2019. (Handhelds were not included in the console/PC figures above.) And while cloud gaming is going to receive a boost this year with the launch of PlayStation Now, it won’t upend the status quo just yet. Juniper expects the cloud gaming market to rise from $281 million this year to $1 billion by 2019.
Quantum Break is said to feature television segments that will be part of the main game with players unlocking new segments at the end of some gameplay segments. The live action television segments can we watched right away or they can be viewed later on mobile devices such as a smart phone or tablet.
The run here is that originally we assumed that these live action segments to be integrated with the game were being produced by Remedy, but word is now that this may not actually be the case and that the Microsoft Xbox Entertainment Studios division might actually be responsible for delivering this content.
So far, no one at Microsoft or Remedy will confirm what if any the impact of closing Xbox Entertainment Studios may have on the Quantum Break project if any. Sources we have spoken with seem to think that the recording of all of this live action segments is already done and finished. So there is nothing to worry about, but other think that it will be difficult to scrap Quantum Break this far into the development, but a redesign that does not use the television segments might be likely.
To hear the likes of Electronic Arts and Gameloft tell it, premium apps are all but a relic of the past, the obsolete progenitor to mobile’s free-to-play future. But some smaller developers have found that future isn’t all it’s made out to be, and have been finding more success back on the premium side of the fence.
Kitfox Games and Double Stallion, two Montreal studios from Jason Della Rocca’s Execution Labs incubator, launched Shattered Planet and Big Action Mega Fight, respectively, on mobile in the last year. However, both titles struggled to rake in revenue, and the studios have since released more successful premium versions of the two. Kitfox’s Tanya X. Short and Double Stallion’s Nicolas Barrière-Kucharski spoke with GamesIndustry International this week to discuss their forays into free-to-play, and why more traditional business models worked better for them.
In Double Stallion’s case, part of the problem was that Big Action Mega Fight proved an awkward fit for the free-to-play format.
“We picked a genre, fighting, that was very content-driven,” Barrière-Kucharski said. “It was really very arduous to keep up and engage the audience with new levels, new enemies, and new types of content. We couldn’t compete at our size and budget with other, more established free-to-play studios and games.”
Beyond that, the genre may have been a poor fit for the audience. Barrière-Kucharski said that the people who would appreciate Big Action Mega Fight’s skill-based gameplay and faithful take on the beat-’em-up genre simply weren’t the same people interested in free-to-play games.
“I think the overlap between audiences was just too small to sustain a thriving community around the game,” Barrière-Kucharski said.
With Shattered Planet, Short said genre wasn’t a problem. She thinks the games-as-a-service model is actually a perfect fit for roguelikes like Shattered Planet, where a few new items and systems can exponentially increase the potential content for players to experience. However, Shattered Planet still didn’t fit the free-to-play mold for a few reasons.
“Free-to-play is not always suitable to single-player games,” Short said. “I think it’s best suited to multiplayer games in which it being free is actually of value to players because they can have more people to play with. That’s one philosophy we’ve developed, that if we ever do free-to-play again, we would only do it for multiplayer.”
On top of that, Shattered Planet was designed to be a tough game for players. But Short said in the free-to-play business model, difficulty can be “a dangerous thing.”
“We made a difficult game, and the fact that it was free made people suspicious, and rightfully so,” Short said. “I think they had every right to be a little bit paranoid about why the game was difficult. And in a business model where difficulty generally does often make people spend more, I think a designer’s hands are tied as to how and when a game can be difficult and when it’s ethical. So we felt a lot more comfortable about making a premium game, and me as the designer, I was happier because we could say sincerely that it’s exactly as difficult as we wanted it to be and you can’t say it was greedy or whatever.
Both games have found more success since they were released as premium versions. Big Action Mega Fight was re-launched last month as a $3 app ($2 during a first-week sale); those who downloaded the free-to-play version received the upgrade to the premium version as a free title update. Even though the free version of the game was downloaded about 400,000 times, Barrière-Kucharski said the revenues from Big Action Mega Fight’s first week as a paid app topped the total lifetime income from the free-to-play version since its November debut. To date the company has sold about 3,600 copies of Big Action Mega Fight on iOS, Android, Amazon Fire, and Ouya.
Kitfox took a different approach to premium the switch, continuing to run the free-to-play Shattered Planet mobile app alone, but also releasing a premium PC version on Steam with a $15 price tag and no monetization beyond that. The results were similarly positive, as Short said the studio made as much on Steam in one day as it had on mobile in two months. In its first week, Shattered Planet sold 2,500 copies on Steam. Short is happy to see the game bringing in more money, but she confessed to being a little bit torn on the trade-off it required.
“It really was great seeing that we had 300,000 downloads on mobile,” Short said. “We had 300,000 people play Shattered Planet on iOS and Android, and that’s amazing. Sure, it looks like we’re going to make two to five to 10 times more money on Steam, but it’s only going to be 1 percent of the amount of people that could see it if we tried to release it free, in theory… It’s a little bit sad that you monetize better with fewer people. When you’re trying to get your brand and your name out there, it is sad we couldn’t have another few hundred thousand people.”
Beyond the trade-off of settling for a smaller but more supportive audience, Kitfox has encountered some negative effects of releasing Shattered Planet as a free-to-play mobile title and then as a PC premium game.
“For us, a lot of people remained skeptical of the quality of the game if they knew the mobile version existed,” Short said. “I don’t think that really has that much to do with free-to-play and more to do with platform snobbery. It’s just kind of a general feeling of console and PC gamers that if a game was ever on mobile, it couldn’t possibly be as feature-rich or as deep, as strategic or anything like that.”
On top of that, there was some customer confusion over the game and its business model. Short said the game’s forums on Steam had some angry users saying they wouldn’t buy the game because it had in-app purchases (which it didn’t). Although the developers were able to post in the threads and clear things up, that sort of inconsistency has convinced them that if they ever do return to mobile platforms, they will stick to a free demo or companion app rather than something monetized.
“It’s just so dominated by giant players,” Short said of the mobile scene. “It’s such a completely different market that I think you really have to focus on it, and that’s not my team’s expertise. For us, we’re definitely going to be focus on PC and console; I think that’s where our talents are.”
Barrière-Kucharski agreed, saying that even if a niche audience is willing to pay for a certain experience, there just aren’t good ways for developers to connect to that audience.
“It’s really hard to be found or be discovered by players,” Barrière-Kucharski said. “I’m really looking forward to all the curation issues that are going to be tackled in the next year or so on iOS 8 and the Steam Greenlight update.”
But even if those initiatives follow through on their promises of improving discoverability, Barrière-Kucharski worries that the problem could still get worse as the gains made won’t be enough to offset the flood of new developers entering the field. Short also saw discoverability as a key problem facing developers right now, but stressed that finding a solution is in the best interests of the platform holders.
“Whatever platform figures out discoverability first will have a huge advantage because there are these thousands of developers that as soon as they hear there is any discoverability, that’s where they’re going to flood for sure,” Short said. “So it is almost a race at the moment between Steam and Apple and Google.”
There’s a popular narrative about Japan’s game development industry: it’s an industry in trouble, lagging behind the West and running out of ideas. If any Japanese developer wants to get themselves splashed into the headlines, all they need do is trot out a soundbite disparaging their own industry; in a world of click bait headlines, the fall of Japanese development is a sure-fire winner. The apparent decline of Japan’s game developers is linked to a secondary narrative as well, namely the decline of Japan’s internal market for videogames. Once the undisputed gaming capital of the world, Japan seems to be falling out of love with the pastime – at least on consoles, and at least according to some rather unusual readings of the data.
There’s a nugget of truth to both of these stories; just enough to make them worth considering, yet certainly not enough to prevent the majority of reporting and discussion on them from being a torrent of absolute nonsense. Japanese game development is somewhat troubled, but it’s troubled by exactly the same factors that are giving sleepless nights to Western game developers – skyrocketing AAA budgets, new business models, a diversification of platforms and the globalisation of the audience. Japanese development studios remain perfectly capable of making superb games that delight their fans; their problem, just as everywhere else, is figuring out how to make money from those games in a new world where profitability escapes everything but the million-selling megahit.
That links back to the second narrative; Japan is falling out of love with games. On the surface, it’s hard to see this alleged decline. The country’s arcades may not be what they once were, but they’re still far more numerous and spacious, not to mention well-attended, than any such establishments in the west. Dedicated videogame stores remain a fixture of shopping districts, while every large electronics store (and there are plenty of those, dominating most city centre areas) has a large videogames section – a stark contrast with, for example, central London, where actually going out and buying a videogame in a shop is an increasingly difficult task. Food courts and fast-food joints still play host to groups of children and teenagers engaged in the likes of Pokemon and Monster Hunter, and a trip outside in an urban area with a 3DS in your pocket will bag a full complement of Street Pass hits in no time flat.
Where’s the decline, then? Well, as figures released earlier this week by Japanese magazine publisher and industry data agency Enterbrain confirm, it’s not actually a decline so much as a stagnation. Enterbrain’s report, widely reported online after being translated in part by Kantan Games’ boss Serkan Toto on the company’s blog, showed that combined hardware and software sales in the first half of 2014 were almost exactly the same as the first half of 2013 – showing growth of just 0.1%. Toto’s entirely reasonable point was that this is much, much lower growth than Japan’s booming smartphone game market, yet this seems to have been picked up by many outlets as further confirmation of a Japanese gaming decline and specifically of a failure to ignite interest in the PS4.
Let’s be clear – the Japanese smartphone game market is in extraordinarily rude health. Revenues from mobile games, by some measures, surpassed packaged game revenue about three years ago and haven’t looked back since. For every person you see playing a 3DS or a Vita (the latter, I note, becoming vastly more commonplace on trains in recent months), you see dozens engrossed in mobile games. Puzzle & Dragons remains the clear favourite, but a trip on a busy Tokyo commuter line will turn up any number of different games gracing the ubiquitous smartphones. The industry’s revenues are clear to see, too; the vast majority of expensive marketing campaigns for games here are for mobile games, not console titles. Only last week I walked onto a train carriage on the phenomenally busy Yamanote loop line in central Tokyo to find that every advertising space in the carriage was full of Clash of Clans marketing; the huge billboard near my apartment, meanwhile, alternates fortnightly between ads for hopeful Puzzle & Dragons clones and ads for new singles by terrible boybands. There’s a huge amount of cash flowing through mobile games in Japan right now, and from a business perspective, that makes it a more interesting (if vastly more challenging) space than the console market.
Yet that doesn’t change the slowdown of Japan’s console market into a “decline” or a “crisis”. We all know that Japan has been ahead of the curve in terms of the adoption of videogames since the 1980s. 30 years down the line, is it surprising that it has hit a plateau? Gaming as a whole – including mobile, browser and online gaming – continues to grow at a massive rate, but in Japan at least, the console space has reached a point where there simply isn’t much new market to conquer. That may change in future as new devices open up new audiences, but console games as they stand don’t seem to have much further to go in Japan. That doesn’t make them a bad business. It means that if you want to make huge bucks and impress shareholders with your growth figures, you probably want to place your investments elsewhere – but if you want to make great games and make money selling them, a mature, stable market is no worse a place to do that than a growing one.
Moreover, when you consider the underlying factors in Japan’s economy, maintaining a steady market size is actually quite impressive. Japan’s population peaked in 2008 and has slowly declined since then; the most rapid decline being the proportion of young people (the most avid consumers of videogames). So this is a market with less “core” consumers of videogames than before; moreover, a series of ill-targeted reforms and a few decades of economic slump have meant that a very large proportion of those young people are trapped in low-paying work with no job security. Furthermore, Japan’s prices have been in slow but steady decline since the early 1990s. Yes, unlike most western economies, Japanese prices aren’t slowly rising due to inflation – rather, they’re falling due to deflation. This has supposedly been reversed in the past 12 months or so, with tiny inflation figures finally showing up, but most of the change so far has been down to a sharp rise in energy costs (a consequence of expensive imported fuels replacing Japan’s still-offline nuclear power plants) and it generally hasn’t been reflected in consumer goods.
One other economic factor has been mentioned by a handful of writers this week. They pointed out that Japan’s consumption tax went up from 5 per cent to 8 per cent in April, in the middle of this reporting period; if that 3 per cent hike were included in Enterbrain’s figures, it would mean industry revenues actually fell. However, to my knowledge Enterbrain’s numbers are based on pre-tax figures, much as US market data is, and thus the consumption tax rise isn’t a factor – except in that it would have been expected to push videogame sales down, thus making the rise slightly more impressive.
In short – Japan has less consumers for games and it’s charging less for things than it used to. Under those circumstances, a market which was performing precisely as well this year as it did last year would be expected to show a modest decline. Just staying still would mean you’d actually grown by a few percent in relative to offset the underlying audience decline and price deflation. Growing by 0.1% in Japan is comparable to growing by a couple of percent in the USA or much of Europe, where population is still generally growing and prices are being inflated, not deflated.
These factors don’t combine to mean that Japan is magically showing strong growth in defiance of the figures, but they are important to understanding what the figures mean. Japan’s “decline” is more like stagnation, and in the past year, even that stagnation has showed a positive trend. The market for consoles and games remains big and pretty healthy even as the market for smartphone games shoots through the roof; both of them clearly have an important place in the future of the country’s games industry.
As for the supposedly “disappointing” impact of the PlayStation 4? There’s no doubt that the performance of the console has slowed down significantly since a very strong launch, but it’s worth noting that sales of hardware were actually up nearly 7% year-on-year, with the PS4 and the resurgent Vita picking up slack from slower sales of the 3DS. PS4′s software line-up in Japan is still largely composed of western titles with limited appeal to the local audience, and the console probably won’t pick up significantly until more local software is available later this year – it’s notable that the PS Vita’s success in the first half of 2014 is largely attributable to the sudden arrival of software titles that match local tastes, and not (as some commentators would have it) to an upsurge of interest in PS4 Remote Play functionality. Overall, PS4 in Japan continues to perform as you’d expect for a new console with limited software – a great launch, followed by slow but steady sales while it awaits new software to spark purchases from new audiences. It’s done well, but it hasn’t “rescued” the Japanese market; but then again, if you take the time to understand the figures, it should be pretty clear that the Japanese market doesn’t actually need rescuing.
Late last year, Frank Gibeau switched roles at Electronic Arts, moving from president of the PC and console-focused EA Labels to be the executive vice president of EA Mobile. Speaking with GamesIndustry International at E3 last month, Gibeau said he was enticed by the vast opportunity for growth in the mobile world, and the chance to shape the publisher’s efforts in the space.
“One of the things I enjoy doing is building new groups, new teams and taking on cool missions,” Gibeau said. “The idea was that EA is known as a console company, and for our PC business. We’re not particularly well known for our mobile efforts, and I thought it would be an awesome challenge to go in and marshal all the talent and assets of EA and, frankly, build a mobile game company.”
It might sound a little odd to hear Gibeau speaking of building a mobile game company at EA. After all, he described EA as “the king of the premium business model” in the mobile world not too long ago, when the company was topping charts with $7 apps like The Sims 3 or raking it in with paid offerings like Tetris, Monopoly, or Scrabble.
“Two years ago, we were number one on feature phones with the premium business model,” Gibeau said. “Smart devices come in, freemium comes in, and we’re rebuilding our business. I think we’ve successfully gotten back into position and we see a lot of opportunity to grow the business going forward, but if you had talked to me about two years ago and tried to speculate there would be a company called Supercell with that much share and that many games, we wouldn’t even have come close.”
Gibeau expects that pace of upheaval to continue in the mobile market, but some things seem set in stone. For example, Gibeau is so convinced that the days of premium apps are done, he has EA Mobile working exclusively on freemium these days.
“If you look at how Asia operates, premium just doesn’t exist as a business model for interactive games, whether it’s on PC or mobile devices. If you look at the opportunity set, if you’re thinking globally, you want to go freemium so you can capture the widest possible audience in Japan, Korea, China, and so on… With premium games, you just don’t get the downloads you do with a free game. It’s better to get as many people into your experience and trying it. If they connect with it, that’s great, then you can carry them for very long periods of time. With premium, given that there are so many free offerings out there, it’s very difficult to break through.”
Unfortunately for EA, its prior expertise is only so relevant in the new mobile marketplace. Its decades of work on PCs and consoles translated well to premium apps that didn’t require constant updating, but Gibeau said running live services is a very different task – one EA needs to get better at.
“Our challenge frankly is just mastering the freemium live service component of what’s happening in mobile,” Gibeau said. “That’s where we’re spending a lot of our time right now. We think we have the right IP. We have the right talent. We’ve got great production values. Our scores from users are pretty high. It’s really about being able to be as good as Supercell, King, Gungho, or some of these other companies at sustained live services for long periods of time. We have a couple games that are doing really well on that front, like The Simpsons, Sims Freeplay, and Real Racing, but in general I think that’s where we need to spend most of our time.”
As Gibeau mentioned, EA has already had some successes on that front, but its record isn’t exactly unblemished. The company launched a freemium reboot of Dungeon Keeper earlier this year and the game was heavily criticized for its aggressive monetization approach. In May, EA shuttered original developer Mythic.
“Dungeon Keeper suffered from a few things,” Gibeau said. “I don’t think we did a particularly good job marketing it or talking to fans about their expectations for what Dungeon Keeper was going to be or ultimately should be. Brands ultimately have a certain amount of permission that you can make changes to, and I think we might have innovated too much or tried some different things that people just weren’t ready for. Or, frankly, were not in tune with what the brand would have allowed us to do. We like the idea that you can bring back a brand at EA and express it in a new way. We’ve had some successes on that front, but in the case of Dungeon Keeper, that just didn’t connect with an audience for a variety of reasons.”
The Dungeon Keeper reboot wasn’t successful, but EA continues to keep the game up and running, having passed the live service responsibilities to another studio. It’s not because the company is hoping for a turnaround story so much as it’s just one more adaptation to running games with a live service model.
“If you watch some of the things we’ve been doing over the last eight or nine months, we’ve made a commitment to players,” Gibeau said. “We’re sincere and committed to that. So when you bring in a group of people to Dungeon Keeper and you serve them, create a live service, a relationship and a connection, you just can’t pull the rug out from under them. That’s just not fair. We can sustain the Dungeon Keeper business at its level for a very long time. We have a committed group of people who are playing the game and enjoying it. So our view is going to be that we’ll keep Dungeon Keeper going as long as there’s a committed and connected audience to that game. Are we going to sequel it? Probably not. [Laughs] But we don’t want to just shut stuff off and walk away. You can’t do that in a live service environment.”
Much like EA’s institutional experience, there’s only so much of Gibeau’s past in the console and PC core gaming world that is directly relevant to today’s mobile space. But as the segment grows out of what he calls the “two guys in a garage” stage, EA’s organizational expertise will be increasingly beneficial.
“These teams are starting to become fairly sizeable,” Gibeau said, “and the teams and investment going into these games is starting to become much greater. Now they’re much, much less than you see on the console side, but there’s a certain rigor and discipline in approach from a technology and talent standpoint that’s very applicable… If you look at these devices, they will refresh their hardware and their computing power multiple times before you see a PlayStation 5. And as you see that hardware get increasing power and capability on GPU and CPU levels, our technology that we set up for gen 4 will be very applicable there. We’re going to be building technologies like Frostbite that operate on mobile devices so we can create richer, more immersive experiences on mobile.”
Even if mobile blockbusters like Candy Crush Saga aren’t exactly pushing the hardware, Gibeau said there’s still a need for all that extra horsepower. With the increased capabilities of multitasking on phones, he sees plenty of room for improvement before the industry runs up against diminishing returns on the CPU and GPU front. He likens today’s mobile titles to late-generation PS2 games, with PS3 and Xbox 360-level games just around the corner.
“As it relates to games, this is like black and white movies with no sound at this point, in terms of the type of games we’ve created,” Gibeau said. “We’re just starting to break through on the really big ideas is my personal view. If you look at games like Clash of Clans, Real Racing, even Candy Crush, they’re breaking through in new ways and spawning all types of new products that are opening up creativity and opportunities here. So I think computing power is just something we’ll continue to leverage.”
The best part for Gibeau is that the hard work of convincing people to buy these more powerful devices isn’t falling solely on the shoulders of game developers.
“The beauty of it is it’s not a single-use device,” Gibeau said, “so people will be upgrading them for a better camera, better video capability, different form factor, different user inputs, as a wearable… I think there’s so much pressure from an innovation standpoint between Samsung, Apple, Google, and Windows coming in, that they’ll continue to one up each other and there will be a very vibrant refresh cycle for a very long period of time. The screens get better, the computing power gets better, and I don’t have to worry about just games doing it like we were in the console business. Those were pretty much just games consoles; these are multi-use devices. And the beauty of it is there will be lots of different types of applications coming in and pushing that upgrade path.”
Gran Turismo 7 had been rumored to already have been in development, but now Kazunori Yamauchi, CEO of Polyphony Digital has now confirmed officially that this is the case. Yamauchi revealed to Eurogamer that “we are working on the title, but added that he doesn’t think it will make it this year.”
In addition we learned that Gran Turismo 7 will not be getting a Prologue release this time around with the development team instead focusing on the full release. PS2 ear cars are likely to be included with Gran Turismo 7, but they may be upgraded to Premium, highly detailed models for this release. It is unlikely that they will be getting rid of any of the standard cars because each car has its own fans.
Sony has not officially announced Gran Turismo 7, but Yamauchi already had told fans back in September to expect a Gran Turismo release on the PlayStation 4 in a year or two.
Support for a union among game developers has grown, according to survey results released today by the International Game Developers Association. The group today announced the result of its Developers Satisfaction Survey from earlier this year, which found that more than half of respondents were in favor of unionization.
Of the more than 2,200 developers surveyed, 56 percent said yes when asked if they would vote to form a national union of game developers in their own countries today. That’s up from the group’s 2009 Quality of Life Survey, where just 35 percent of more than 3,300 developers said they would vote in favor of unionizing at that time.
As for whether the IGDA was considering a move in that direction, the group’s executive director Kate Edwards dismissed the notion.
“For the IGDA, we will always be a professional association,” Edwards told GamesIndustry International. “That’s what we exist for, and what we’ll always be. But if we are seeing that developers feel unionization is what they perceive to be a solution, then that’s something we’re going to pay attention to and see where it goes for them.”
“When we asked people how many jobs they’d had in the last five years and the average number was four, that was pretty eye-opening for us.”
IGDA head Kate Edwards
The survey also yielded new findings on gender diversity. While the group determined that men still “dominate” the industry, it isn’t to the same degree as before. The IGDA found 22 percent of respondents identified as female, up from 11.5 percent in 2009. Additionally, the 2009 survey only included “male” and “female” designations; this year’s poll found 2 percent of respondents identifying as male-to-female transgender, male-to female transgender or “other.”
Edwards also found responses on the lack of job security in the industry notable, if not exactly surprising.
“When we asked people how many jobs they’d had in the last five years and the average number was four, that was pretty eye-opening for us,” Edwards said. “But I do think it basically confirms what a lot of us have sort of known and have been hearing anecdotally for a while now.”
The Developers Satisfaction Survey also polled people on their salary, and found that nearly half of developers earn less than $50,000 annually. That stands in stark contrast to the Gamasutra annual Game Developer Salary Survey, which found that last year the average developer made more than $84,000, with QA being the only discipline with a sub-$50,000 average salary (and even that was a little shy of $49,000). Edwards chalked the difference up to a high percentage of the IGDA survey respondents who identified themselves as independent developers, saying they were likely working in freelance or start-up capacities.
A little less than two-thirds of respondents (61 percent) said they planned to work in games indefinitely. Of those who saw themselves leaving at some point, the most frequently given reason (39 percent) was a desire for a better quality of life.
The IGDA will release a summary report of the survey next month, followed up by reports focusing on specific topics within the survey, like diversity, quality of life, and employment practices. The group has said it will use the findings to help identify what its members care about and prioritize its initiatives and advocacy efforts around those subjects. To keep up with members’ needs as they change, the IGDA is planning the Developer Satisfaction Survey as an annual exercise.
Those who have been eagerly waiting for October to experience the latest adventures of Batman from developer Rocksteady, are going to be very disappointed to learn that the game will not make its originally announced October release.
Instead developer Rocksteady has confirmed that the game will be released in 2015. An exact release date has not yet been decided upon. We are hearing however, that as spring release for Arkham Knight is very likely.
While the exact reasons behind the delay were not announced, but the game is much bigger than previous Batman titles that Rocksteady has done and it is the first all next-generation title that the developer has done which also might be contributing to the delay. The game is still scheduled for release only on the Xbox One, PlayStation 4, and PC so the next generation status of the game has not changed.
In the Far Cry games, fire is a wonderful tool. It spreads dynamically, opening up a wealth of creative and strategic possibilities for players to achieve their goals. However, it also gets out of control in a hurry, potentially coming back to hurt the player in sometimes unpredictable ways.
It’s an appropriate metaphor for the series’ approach to controversial subject matter. Last week, Ubisoft announced the development of Far Cry 4, showing off some key art in the process. The picture depicts a blonde light-skinned man in a shiny pink suit against the backdrop of the Himalayas, smirking as he uses a defaced statue as a throne. His right hand rests on the head of a darker skinned man who is kneeling before him, clutching a grenade with the pin pulled. Though we know very little about the characters depicted, their backgrounds, or their motivations, the art got people talking (and tweeting). Some were concerned about racism. Others were worried about homophobia. Many saw neither. At the same time, details about the game are so scant that it’s entirely possible the problematic elements here are properly addressed within the context of the game itself.
But at the moment, we don’t have that context. It’s promotional art, so to a certain extent, it’s designed to exist out of context, to catch the eye of someone on a store shelf, even if they’ve never heard of the series before. And while we lack the context the actual game would provide, there’s no such thing as “without context.” Here, the context we have is that this is a Far Cry game, the latest entry in a series that has been earning a reputation for boldly storming into narrative territory where other games fear to tread (often with good reason).
Like the fire propagation mechanic, this narrative ambition was introduced to the series with Far Cry 2. What had previously been just another shooter (albeit one in a tropical setting more attractive than most) became a series that embedded its stories within thorny issues. Far Cry 2 cast players as a mercenary in a fictitious African country’s prolonged civil unrest, using blood diamonds, malaria, and Western imperialism as texture in a story emphasizing the moral vacuum of war. Far Cry 3 took things a step further, with players controlling a spoiled rich white kid on a tropical island vacation who suddenly must deal with nefariously swarthy pirates and intentionally stereotypical natives. And just in case that didn’t stir up any controversy, the story also weaves in rape, sex, drugs, and torture. In both cases, some critics and players felt the games offensively trivialized important or tragic subjects.
Given this history, it’s not surprising that Far Cry 4 would not universally receive the benefit of the doubt. Much more surprising (to me, at least) is that Ubisoft is continuing down this path with the franchise. Far Cry 3 sold a staggering 9 million units, putting it in the same class of blockbuster as Assassin’s Creed (last year’s version of which sold 11 million units). However, the publisher’s narrative approach to the two games could not be more different.
Assassin’s Creed is a fascinating case study for dealing with touchy subjects in AAA video games. It wasn’t long after the US invaded Afghanistan and Iraq that work on the first Assassin’s Creed started. You know, the one set in the middle of a holy war between Christians and Muslims. Assassin’s Creed II had players attempt to assassinate the pope. Assassin’s Creed III put players in control of a Native American protagonist during the Revolutionary War. Assassin’s Creed IV: Freedom Cry saw the gamification of emancipation.
The Assassin’s Creed franchise draws some criticism from time to time for its handling of these subjects, but the series has rarely found itself at the flashpoint of controversy. Part of the reason for that is the Assassin’s Creed developers research their subjects thoroughly. They understand what the concerns surrounding the sensitive topics are, and by virtue of the games’ historical settings, they can point to factual evidence of certain people’s actions, or common situations of each era.
When it comes to dealing with controversy, Assassin’s Creed is much like its stealthy protagonists are imagined to be: quiet, cautious, and efficient. Far Cry, on the other hand, deals with these topics more like the way Assassin’s Creed protagonists behave when I play them: recklessly uncoordinated and endlessly destructive. Even when it’s clear Far Cry’s developers have put plenty of thought into what they’re saying, it’s not always clear they’ve put much thought into what people will hear them saying through their games.
It speaks volumes about how Ubisoft perceives the long-term value of the two series. Assassin’s Creed is the company’s biggest and most adaptable blockbuster, an annual gaming event based on a premise that can be mined and iterated on endlessly in almost any medium, a recurring revenue stream to be nurtured over time. Far Cry, this key art release suggests, is just another first-person shooter, a brand defined primarily by how hard it works to shock people, perhaps because the company doesn’t have faith that it can sell on its other merits. One of them is the kind of project you make a Michael Fassbender film around. The other might be more of an Uwe Boll joint.
I’m not saying that Far Cry should avoid these subjects. I actually love to see games of all sizes attempting to tackle topics and themes often ignored by the industry. But the right to explore those subjects should come with a responsibility to do so with care. These are legitimately painful subjects for many people. If developers want to force players to confront them, they should have a good reason for it that goes beyond pushing people’s buttons, exploiting tragedy for shock value and an early preorder campaign. In video games, we don’t push buttons for the sake of pushing buttons. We push them to do things.
It was the best of times, it was the worst of times; while I hesitate to apply Dickens’ immortal words to something as fleetingly temporal as Sony’s financial woes, it’s a quote I couldn’t quite shake as I digested this week’s results statement. Here is a company that has just launched one of its most important products in years, the PlayStation 4, to almost universal fanfare and massive sales; whose reputation has risen remarkably in its core markets and whose overseas sales are, finally, being buoyed once more by a sensibly-priced Yen. The best of times! And yet; here is a company whose computer entertainment division can’t turn a profit, a company posting huge losses against all expectations, a company whose already-interminable restructuring is set to last another year. The worst of times.
Sony lost over $1.2 billion last year. Revenues were up, though; over $75 billion poured through the company during the year, a 14.3% increase on the previous year. That’s important context for the scale of the loss, but it doesn’t make the loss itself any smaller. Market analysts expected a small profit. Instead, they got not only a loss overall, but a loss in the videogames division specifically, whose seemingly stellar performance recently could not plug the $78 million gap in its finances.
To add to the company’s woes, its new CFO – the commendably straight-talking Yoshida Kenichiro – says that next year will be another loss. There’s more restructuring ahead, he told analysts at a briefing this week, and it’s going to hit the company’s balance sheet hard in the next 12 months. Yoshida simultaneously promises light at the end of the tunnel, and a rocky road ahead; a travel-related mixed metaphor that probably doesn’t fill any veteran Sony-watchers with confidence.
It’s worth digging a little deeper into Sony’s results to try and understand what’s actually happening here. For all that it has trimmed its operations over the past decade, Sony remains a pretty enormous sprawl of a company, with interests that extend far beyond the consumer electronics for which western consumers recognise the firm. Sony Music and Sony Pictures, of course, are major parts of the business; Sony Computer Entertainment we all know and love; cameras and TVs we understand; but how about Sony’s life insurance businesses, or its banking efforts? How about its semiconductor operations, or its sidelines in making camera components for other firms’ smartphones? How about its fabrication plants for CDs, DVDs and Blu-Ray discs, responsible for a huge proportion of the discs on sale around the world today?
The challenge in interpreting Sony results lies in trying to understand the full scale of those business interests and then in trying to figure out where negative results really stem from. We know, for instance, that Sony is taking on major costs in winding down disc fabrication plants in some parts of the world. We know that the television division has been in trouble for years thanks to competition (some of it state-backed) from Asian rivals, and will finally be spun off and left to sink or swim in a major swathe of restructuring this year. That won’t be without its own costs, of course. Other costs or profits may be harder to discern. Clients for component businesses are generally somewhat anonymous; it’s considered an open secret that Sony provides the camera for recent iPhones, but few component contracts are quite so well-known, and thus, their bottom line impact is harder to discern.
What I’m saying is that Sony (and to an even greater extent, its rival Microsoft) is a bloody hard business to read and understand on the basis of financial reports. Companies like Nintendo, Electronic Arts and Activision Blizzard really just do videogames, so when their results are poor, it’s easy to discern what’s going on. We know their products, we know their markets and we can usually quite easily discern the weaknesses causing difficulties (although seeing the difficulty and suggesting an effective prescription are two very different talents). Sony, however, is big, complex and obfuscated to no small degree. We get broad outlines; a big loss is a big loss; but the fine detail is hard to get a grasp upon.
None of which is to say we shouldn’t try. Sony is one of the most important companies in the games business; with the success of the PS4 over the past six months, it’s arguably the most important company in the business right now. Hence, yes, it’s a concern that it’s making big losses. It’s doubly concerning that some of those losses are coming out of the seemingly successful computer entertainment division, but we can make some educated guesses at what’s happening here. Firstly, the extremely high sales of the PS4 in its early months are actually a short-term negative to the company’s figures. Sony’s console business is a razor-and-razorblades model, selling hardware at a loss initially but recouping this money through software sales and, ultimately, through more profitable hardware sales down the line when manufacturing costs have fallen. Thus, the more units PS4 sold in its launch period, the more money Sony would lose – but this lost money is really more of an investment, since the firm is betting on getting it back in software sales down the line.
High early sales also contribute to losses in other ways. Sony’s launch plans for PS4 were hugely ambitious in terms of the number of units shipped to each territory; the company did end up somewhat supply-constrained, but it aimed to avoid such constraints where possible with enormous shipments and rapid resupply of inventory. This strategy may have been partially aimed at capitalising on Microsoft’s launch weakness before strategic changes could be made to the Xbox One’s product or pricing, but I’m sure that a wider goal was also in mind. Rapid sales of a new home console would silence some critics expecting tablets and smartphones to destroy this market sector entirely; such rapid sales would require a good supply chain, and those don’t come cheap. The exceptional ramp-up of Sony’s PS4 manufacturing capabilities won’t have been cheap, an expense compounded by the loss the firm will have registered on manufacturing every PS4 shipped to date.
In the short term, that means a loss for SCE; but CFO Yoshida seemed pretty blase about that, and rightly so. In the medium term, it’s a good investment. Sony has a great track record of strong attach rates for its consoles, meaning it will get its money back with interest. Moreover, it has a truly fantastic track record of cost-cutting on console manufacture, even managing to get the tricky Cell-based PS3 into a vastly smaller and cheaper casing in the end. The faster the installed base grows, the faster the bulk discounts to manufacturing costs can be realised; with PS4 selling far faster than PS3 or Xbox 360 did before it, Sony can expect its new console to be in the black well ahead of schedule.
As for the rest of the company; I reiterate my position that Kaz Hirai’s job is not an enviable one. It was said of John Riccitiello’s tenure at EA that he faced the task of trying to explain to shareholders why his company was in the fifth year of a three-year restructuring that was going to take seven years. Hirai’s task is even more tricky, in some regards. He’s only been in the top job for two years, so if his ambitious restructuring can truly be completed by next year (as Yoshida claims, with some authority) then it will actually have been a rather fast turnaround. However, Sony is already restructure-weary; seven years of turmoil under former CEO Howard Stringer left the company and its commentators skeptical of any claims regarding light at the end of the restructuring tunnel. Stringer did many good things and helped to move Sony’s culture to a point where Hirai’s ideas could find fertile soil, but he also permitted (or felt that he could not fight) all manner of poor strategy in core divisions, most notably television, where Sony has stumbled from disastrous strategy to doubly disastrous strategy on a near-annual basis for the past decade.
Hirai, at least, appears to have the confidence and the clout to make his plans work where Stringer’s did not. Separating the almost certainly doomed TV business from the rest of Sony is a good plan, but one that required extraordinary political capital within the firm. Having the respected Yoshida as CFO is also a good move, since it’s given Hirai the cover he needs to bring all of the financial pain of his restructuring plans into the current year and the following year. The temptation would have been to spread things out, but the markets seem to respect Hirai and Yoshida’s honesty in front-loading the costs, anticipating a return to profitability in two years’ time.
That, perhaps, is the big difference between Sony and Nintendo – two companies that have been compared heavily in discussion over their recent financial results. Both have some very profitable divisions (3DS does well for Nintendo, while movies and finance, in particular, are solid performers for Sony), but both have just recorded financial results well below expectations and triggered alarm among market commentators. Nintendo, though, can only suggest vague directions it might take to exit its current situation; it will take a major new product announcement to see whether the company can get back on track, and that’s not likely for a couple of years. Until then, Nintendo’s financial health is largely a matter of faith.
Sony, on the other hand, has a plan. It’s a tough plan, but a solid one; the divestment of loss-making businesses, the refocus on core pillars that actually make money, and more specifically to our industry, the tried-and-tested approach to bringing the PS4 into profitability as rapidly as possible. A CFO like Yoshida can speak plainly about how Sony is going to change, what it’s going to cost and when it’s going to start making money; Nintendo, relying on products still under wraps to give it a relevant future, lacks the ability to be so blunt and straightforward about how it will build future success.
Even the rather tolerant Japanese stock market and its very patient institutional investors have limits, and Sony could yet reach those limits. The company’s restructuring to date would try the patience of even someone playing a very long game; but Yoshida is a credible figure, Hirai seemingly retains the ability to carry out the reforms he plans, and the company’s generally profitable divisions, including games, are still in good shape. Even if another year of pain does loom for Sony, the end might finally be in sight; in 12 months time we can hope to hear of a leaner, tighter and more focused Sony, with black ink finally starting to crop up on its accounts.
Ubisoft announced that Watch Dogs is setting pre-order records for the publisher. The company said that it’s the most pre-ordered new IP in Ubisoft’s history, the second-highest pre-ordered Ubisoft game ever, and the most pre-ordered new IP in the industry this year. Moreover, retailer GameStop confirmed that Watch Dogs is the most pre-ordered next-gen game to date.
All that said, Ubisoft actually did not disclose how many units were pre-ordered. GamesIndustry International pinged Ubisoft to ask for a pre-sales figure and we’ll be sure to let you know if we get one.
[Update: On the company's earnings conference call, executives said that they fully expect Watch Dogs to perform better than the first Assassin's Creed, meaning it should exceed 6.3 million in lifetime sales. "We expect it to become a major heavyweight of the industry," said CEO Yves Guillemot.]
“These strong pre-orders are a clear indication of players’ anticipation and excitement for Watch Dogs,” said Geoffroy Sardin, Senior VP Sales and Marketing at Ubisoft. “The teams have worked tirelessly to ensure that players will enjoy a top quality game with enormous scope, and we can’t wait to get the game into their hands.”
“We are seeing tremendous excitement for the new Watch Dogs game… It is on track to be one of the top selling video games across all consoles in 2014,” added Michael van den Berg, vice president of Merchandising at GameStop International.
Watch Dogs development is being led by Ubisoft Montreal, but similar to other massive AAA projects in the industry it’s been a collaborative effort with assistance from teams at Ubisoft Bucharest, Ubisoft Paris, Ubisoft Quebec and Reflections. The game will release on May 27 for current-gen and next-gen consoles, PC and it’s coming to Wii U “at a later date.”
Fireproof Games’s Barry Meade has issued a blunt jeremiad to what he sees as a mobile gaming industry hurtling towards creative irrelevance due to its reliance on data.
In an article published on Polygon, Meade lamented the reality that Fireproof’s The Room franchise is an extremely rare exception in mobile gaming: standalone experiences that earn good revenue from paid downloads.
“In a market as huge as mobile how the fuck are Fireproof among the only makers of premium games that saw this kind of success?” Meade asked, citing data indicating low levels of engagement (66 per cent of mobile games are not played beyond the first 24 hours) and incredibly small numbers of paying customers (two to three per cent) as evidence that the dominant free-to-play model is not providing quality entertainment to the market
“This is a statistically insignificant amount of happy gamers and nothing that gives you a basis to make claims about ‘what people want’. I think it just as likely that mobile’s orgy of casual titles is due to simple bandwagon-ism or, in other words, not knowing what people want.
“This is a statistically insignificant amount of happy gamers and nothing that gives you a basis to make claims about ‘what people want’”
“So it bothers me to hear game developers talking as if casual games are the new paradigm on mobile when so very few developers are actually happy with the games as they are, and mobile gamers clearly seem to “care” least of all. Free-to-play and casual titles should be a part of a greater gaming ecosystem, but right now they are the entirety of it on mobile.”
For further evidence, Meade pointed towards the top-ten grossing charts, which are dominated by an unchanging crop of huge titles that do little more than trade their relative positions of dominance. To the public, however, these “ten cute grinding games that are clones of each other” seem like the best the industry has to offer, and continue to reap the vast majority of the rewards.
“The free-to-play model itself serves a million uses to developers and gamers, I’ve chucked lots of time and money into World of Tanks, Warhammer Quest and many others myself – the model is not the problem,” Meade continued.
“The problem is more general, that taken as a whole the games industry is making mobile games that nobody cares about available to millions of players for nothing. Free-to-play producers chime that quality levels are obviously fine, ‘If it’s making money it’s objectively good, see?’
“Well no, not quite, shit sells by the ton every day. In the real world Burger King doesn’t get three Michelin stars. Burger King gets to be happy with its revenue not its reviews, and our industry’s inability to see the difference will only pull us further into our creative vacuum.”
The dominance of the free-to-play model in mobile continues to be divisive, and there are certainly counterpoints to Meade’s take on the matter – most notably from Ben Cousins, who has argued the relative merits of free-to-play both at conferences and in the press. However, Meade is far from alone in his doubt, and that includes developers who have spent years working with the free-to-play model.
At Casual Connect Europe this year, The Workshop’s Laralyn McWilliams gave a talk in which she warned the industry about mistaking data for an emotional connection. “There’s no measuring spoon for love. You can’t quantify it,” she said. “Retention is not the same as happiness.”
Meeting with GamesIndustry International after her talk, McWilliams expressed very real concern that the amount of money being made is masking the negative connections created by free-to-play games, and the possible long-term damage that could result from that relationship.
“The moment that you monetise in Candy Crush you’re probably extremely frustrated. You want to get past this level you’ve failed to complete 40 or 50 times, and that’s the moment you spend. But mixed into that moment where you spend is that frustration. It’s building a bad connection. I’m not monetising at a positive moment.”
Meade concludes his argument with perhaps the most salient point of all: “The audience knows better than all of us and if our mobile public truly does signal ‘I care’ through purchasing, I don’t think its radical for the industry to start listening to the 98 per cent of mobile gamers out there saying ‘I don’t care’.”
The full version of the article is over on Polygon, and it’s well worth your time.
Deep Silver has a pretty deep portfolio these days with Dead Island, Saints Row, Metro, as well as a couple of other franchises that they are now handling the distribution for.
What we already know that Metro” Redux is coming for the Xbox One and PlayStation 4, so if the company announced both a new Saints Row and Dead Island game that would fill the two unannounced title slots that the company is talking about. Sources tell us a new Saints Row game is in development, but it is unknown if it will be ready to be announced at E3.