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.
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.
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.”
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.
The traditional sports ecosystem is dominated by three models of organisation. The most decentralised sports, like the PGA Tour or NASCAR, consist of largely independently organised competitions, which are sanctioned and governed by an administrative body and are open to any qualifying athlete. From there, we have typical leagues like the NBA or Premiership, which have a set number of recurring teams and players, and are extensively managed by a league front office that’s owned by each team.
eSports are quite different. If you choose to race without NASCAR or play basketball without the NBA, there’s nothing – and no official body – that can prevent you from replicating the experience. No one ‘owns’ racing or basketball, but someone does own Overwatch, and if you want to play you essentially have to go through that company. If you wanted to create your own eSports league, your ability to market or represent it would be entirely dependent on the legal team of the game’s publisher. Furthermore, the core experience is fully controlled by that publisher.
“No one ‘owns’ racing or basketball, but someone does own Overwatch, and if you want to play you essentially have to go through that company”
Leagues that are operated or endorsed by publishers can do unique things – e.g. item drops, exclusive/first-release capabilities, bundled original content – and offer unique monetisation opportunities. Three months before The International, the annual world championship for Dota 2, Valve sells interactive in-game items that directly contribute to the tournament prize pool. This model has been so successful that, in 2016, the prize pool reached $19.17 million.
Most tier-one publishers also handicap the data streams that the public can leverage. Whereas in traditional sports there are multiple providers of a firehose of sports data, game publishers offer barebones APIs that allow access to little more than character information and select match data. Valve offers an open API but, as events this year have demonstrated, it can shut off access and change policy at any time. On the platform side, Twitch is miles ahead of its competitors in terms of creating an external ecosystem thanks to its two year head-start and passionate developer community, but it maintains an ever more precarious balance between build vs. buy.
Because of these walled gardens, the investible opportunities within eSports often end up being features not products, which set them and their investors up for more of an acquihire than a Twitch-esque exit. There’s a strong argument to be made to publishers that working with third-party developers will lead to a stronger overall bottom line, foster innovation and provide defensibility.
It’s no secret that being a top publisher is a lucrative business. Activision reported $1.57 billion in revenue for Q2 of 2016 and EA $1.271 billion. It’s rumoured that Valve’s 2015 revenues reached $3.5 billion in 2015, and Riot Games’ over $1.6 billion. It’s not hard to see why partnerships with third parties and external API infrastructure aren’t a priority with so much money flowing, but that’s shortsighted. As publishers start thinking about how to monetise beyond game licenses and IAP, every moment not spent developing the ecosystem is a wasted one.
This isn’t unparalleled, and we can see examples of where large platforms in other verticals have made the decision to invest in their future, often early on in their company lifecycle. Salesforce, an enterprise software company, has a market cap of $50 billion. A report last year by IDC put the opportunity front and center: the AppExchange currently generates 2.8x the revenue of Salesforce itself and is expected to grow to 3.7x the size of Salesforce.
“As publishers start thinking about how to monetise beyond game licenses and IAP, every moment not spent developing the ecosystem is a wasted one”
Slack, the enterprise collaboration tool darling, also gets it. Even before raising money in April 2016, at a $3.8 billion valuation and boasting over 1.25 million paying users, they announced the Slack fund in December 2015 - an $80 million investment into supporting new integrations. Slack and Salesforce could have gone the closed route and developed these integrations and products internally, but they understood that the immediate revenue trade-off was well worth the ability to focus on creating the best core product possible, in addition to leveraging minimal company resources.
Now to everyone’s favourite eSports comparison : traditional sports. During the height of the daily fantasy sports craze in 2014/15, the NBA entered a multi-year partnership with FanDuel that gave it an ownership stake. The NFL expanded its partnership with Providence Equity in 2013, investing $300 million to participate in, “media and technology deals where it believes the league could help play a strategic role.” And these are just a few examples. Partnering with and investing in new properties allows older, larger establishments to participate in the upside of nascent industries quickly and cheaply.
Publishers are thinking about the shelf-life of games. The NFL and NBA will both be around in 25 years, but what about League of Legends or Counter-Strike? Opening up the ecosystem not only benefits players and fans by allowing them an outlet to interact with their favorite IPs, but ultimately enhances the core value of those IPs and gives publishers an opportunity for additional exposure through revenue share, API fees and strategic investments.
In addition to commercial benefits, let’s look at network effects. Valve is the publisher of both Counter-Strike: Global Offensive (25 million+ copies sold, 8.2 million+ players in the last two weeks), and Dota 2 (87 million+ times downloaded, 11 million+ active players in the last two weeks.) While the titles have richer histories than virtually any other competitive esport, Valve’s open API, developer tools and hands-off approach has contributed to their sustained success and status as two of the top eSports titles.
ELeague, FaceIt Esports Championship Series and Gfinity, ESL One and IEM. These streams of revenue have contributed to a high demand for professional CS:GO players, leading to lucrative contracts and opportunities.
3: The most lucrative has been the in-game skins economy, which allows players to purchase crates that contain different cosmetic versions of CS:GO weapons or Dota 2 items. During major tournaments, Valve has offered exclusive stickers that generate up to high six-figures for qualified teams. Valve has also allowed free reign on opening up use cases within this skins economy, which led to wagering, gambling and marketplaces (Bloomberg estimated yearly transaction volume to be >$7 billion.) Variations of this model have since been followed very conservatively by multiple franchises, including Call of Duty, Halo, H1Z1 and Overwatch.
On the platform side, Twitch’s dominance in livestreaming can largely be credited to going all-in on eSports first, but Twitch also has numerous native or platform exclusive features for its users. Diving deeper, this experience is powered by a blend of features that were built in-house or created by third parties. Examples include:
Bits, preceded by Streamlabs and StreamTip: direct donations from viewers are one of the foundations of a streamer’s income.
Clips, preceded by Oddshot, Plays.tv and Forge: allows viewers and creators to efficiently capture highlights and share to different social media channels.
Subscriptions / Partner Program and 3rd-party services (Revlo, Gamewisp and Curse/Discord integrations): subscriptions are another big source of income for streamers, and the third-party services all add further value to a sub and reduce churn.
TwitchPlays: what started out as a fun social experiment (TwitchPlaysPokemon) is now its own category to interact with potential customers for publishers.
Chatbots (Moobot, Nightbot and Xanbot): automated assistants that help moderate chat to prevent spamming and inappropriate behaviour.
Stream+ currency: Twitch’s new currency announced at TwitchCon 2016, which will allow developers to integrate monetisation options directly into games.
Facebook Live has launched to much fanfare, and given the massive distribution channel it will always be a huge threat. However, until it can get to feature parity Facebook Live will need to rely on traditional media partnerships or viral hits to create consistent content. These types of partnerships don’t scale when we’re talking about the individual streamers and professional players that have played a large part in getting Twitch to 100m+ MAUs, although the signing of G2 and Heroes of the Dorm is a good first step. YouTube Gaming is farther along and is doing a great job of starting to launch some analogous features.
How, then, should publishers look to partner with entrepreneurs and third parties? I’d like to see publishers create a vehicle, individually or collectively, in the model of Disney Accelerator, to offer mentorship, funding and support to kick-start the next generation of eSports businesses. Publishers should be developing their games as platforms, not individual entities - tons of data are being generated and archived and there is a treasure trove of use cases for them.
I’m confident that we’re slowly moving in the right direction. One day we’ll see a truly open ecosystem with publishers and third parties living in harmony.
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.
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.
Last week, over three and a half years after its initial release, Digital Extremes’ free-to-play shooter Warframe broke its concurrent player record with expansion The War Within, hitting Steam’s top three on the weekend of release, recording a maximum of 68,530 players online at once and logging an incredible 1.2 million hours of playtime in a single day. Across PC and the more recent Xbox One and PS4 versions of the game, over 1 million of the 26 million players who have registered since the game’s 2013 launch had played by November’s halfway point, beating all previous monthly unique records with a fortnight to go.
Those are impressive numbers, especially for a game at a point in its lifecycle where it could certainly be forgiven for slowing down – and it’s no anomalous bump. Instead, a quick glance at SteamSpy’s graphs for the game show a steadily increasing number of players for the game, as well as a very healthy schedule of updates, patches and big content drops. Rather than leeching users to other games as it ages, Warframe is going from strength to strength.
Meridith Braun, VP Publishing at Digital Extremes, says that it’s been a tight compromise of strategies – resulting in a success which far exceeds the expectations of a game which was initially seen as something of a make or break exercise. Key to that, she says, has been a careful acquisition process, but not one which has come at the cost of long term curation and engagement of existing players.
“It’s definitely a balancing act between catering development to new players and veterans of the game,” Braun explains, “but after 3.5 years, the core of the game has grown so much that for new players there are literally hundreds of hours of missions, quests, customising and exploring game systems before they catch up to where veteran players are.
“Whilst many of our updates focus on adding new content and improving game systems that our veterans are most interested in, earlier this year we took a fresh look at the new player experience and released an update that refined some of the tutorials, updated the UI, tied quests together to help the lore flow better, and revamped the market for easier functionality. It was not our most played update, like The Second Dream or The War Within, but it served a long-tail purpose of making Warframe more inviting and easier to understand for new players. It helps them navigate to the really intricate depths of the game with the intent to retain them long-term.”
“We spend very little compared to other free-to-play games that focus a large amount of their budgets on acquisition”
Polishing the tip of the spear is a tried and tested acquisition technique, but it’s not usually a way of sidestepping the vast costs which many companies associate with gathering new players. Warframe’s marketing, though, was forged in a crucible of necessity, at a time when budgets were almost non-existent. As a result, the studio has learned to maximise the gain from channels which deliver users without draining revenue, although the financial success of the game has also enabled them to operate in areas previously well beyond their price range.
“We spend very little compared to other free-to-play games that focus a large amount of their budgets on acquisition,” says Braun. “Warframe was a passion project – the studio’s ‘Hail Mary’ pass, if you will. There was barely budget to buy an account server for the game, let alone to spend on marketing at the time. We turned to viral everything to get the word out: live streaming, social media, Reddit, forums, PR, knocking on partner’s doors for promotional opportunities. Once we launched in open beta and more players got a taste of the game, it was clear we had something unique on our hands. Since then our acquisition strategy has focused primarily on our update schedule and community involvement.
“We discovered early on that frequent significant updates – updates that added dramatic gameplay changes, enhancements and content, and transparency with our community, brought in droves of new players. Now that we have more wiggle room in our coffers, we work the usual acquisition channels – online CPA-focused advertising, social media, streaming, etc. – but nothing beats age old word-of-mouth between players telling their friends to join in on a game that only gets better and better over time.”
What’s perhaps even more unusual about the current high that Warframe finds itself riding upon is that it comes at a time when the AAA shooter market is crowded with a wide spread of very high quality competitors – many of which are under-performing at retail. The game’s peak numbers come at a point when there are brand new Battlefield and Call of Duty games at market, as well as extremely well reviewed releases like the Titanfall and Dishonored sequels.
“Warframe was a passion project – the studio’s ‘Hail Mary’ pass, if you will. There was barely budget to buy an account server for the game, let alone to spend on marketing at the time”
Braun very much sees free-to-play as playing a significant part in the difficulties which Warframe’s boxed rivals are experiencing.
“I think we’re seeing the F2P model disrupting the standard retail model for larger budget games,” she says. “The continued rise of AAA-quality, free-to-play games coming to market – and their ability to fill the long gaps between large IP releases – is taking a bite out of the big game market. Just this year it was great to see F2P titles like Paragon and Paladins launch to great fanfare and numbers, I’m sure they both had some effect on the big budget FPS games alongside Warframe.
“It’s hard to compete with free. Sure, we want people to eventually pay for the entertainment they’re receiving – but when you have the ability to try out a game for free for as long as you want, a game with equally great production value, and then decide if it’s a game that deserves your money, that’s pretty stiff competition. The larger games also aren’t built to be as agile and reactive to the market after they ship. Free games at their core are made to continually update and improve, offering incredible value and entertainment over a longer period of time.”
Blizzard probably has a few things to say about the notion that free-to-play games offer the best long-term player engagement and responsive improvement, and Braun freely admits that games like Overwatch share that strategy of player curation. Warframe, she says, also offers something else, though. Because it wasn’t a Blizzard game, born almost fully-fledged and slickly functional, early adopters have had the joy of watching it smooth out its rougher edges.
“When Warframe first launched it was a shell of the size of game it has become, and our players have stayed with our growth throughout its life-span. They enjoy taking the ride with us, being a part of the evolution, experiencing game development from the front seat. If you’re not thinking about long-term engagement and game service at the heart of your game design as a good part of the future of gaming, you may have yet to come to grips with the dwindling projections of one-and-done games.”
Whether it is the return of X-Files and Twin Peaks, or Shenmue and Pokémon, bringing back classic IP has become a safe way to secure headlines and generate copious amounts of hype.
Yet it’s not just brands that are tapping into our love for the familiar. Take this summer’s smash Netflix show Stranger Things, which plays homage to both ’80s Spielberg and classic horror. Or indeed the millions of dollars that the likes of Yooka-Laylee and Bloodstained have raised on Kickstarter – the former riffing on 1990s platformers like Banjo-Kazooie (and made by many of the same team members), with the latter acting as the spiritual successor to Castlevania (from former producer Koji Igarashi).
Ron Gilbert is another person looking to recreate those ’90s feelings. The adventure game maker behind the likes of Maniac Mansion and Monkey Island is creating a new one called Thimbleweed Park, a point-and-click adventure with retro 8-bit visuals that raised $626,250 via Kickstarter.
“I think a lot of the nostalgia that is around right now comes from a desire to go back to a simpler time,” suggest Gilbert, speaking to Gamesindustry.biz shortly after appearing at Melbourne International Games Week in Australia.
“Back then games were a little bit simpler and seeping with charm. A lot of people that love the 8-bit games today might not have even been alive back then, but they still identify with that era because it was so interesting and charming.
“It is really one of the reasons we did Thimbleweed Park. We were looking at and asking why was Monkey Island and Maniac Mansion so appealing? What is it about modern adventure games, although they’re interesting and have great stories, that means they lack the charm those games from that era had? Can we recreate that old feeling today?”
Point-and-click adventure games are enjoying a small renaissance, thanks in part to the rise of indie developers – as indeed are platformers, Metroidvania games and a whole host of other genres long thought dead.
“I don’t know exactly why adventure games faded away,” Gilbert continues.
“I do feel that somewhere around the mid-90s, point-and-click adventures sort of ran off the rails. A lot of really – for want of a better word – stupid puzzles were being made. I think what happened was that people looked at this, and went: ‘Wait a minute, you’re asking me to do completely ridiculous and random things to get through these games.’ Some players just checked out at that point.
“You also had games like Doom that came along and were first person and were more action orientated, and those games attracted a very different audience into games. So I don’t know if adventure games necessarily fell, but they certainly didn’t grow with the rest of the industry. But now we are seeing this place where we are attracting a much broader audience, and a little bit of that is due to mobile games being so ubiquitous. There are just so many more people playing games these days, and with adventure games being very story and character focused, they are able to attract that broader audience.”
He continues: “You have games that have always been niche markets. Now, because of digital distribution and the way the democratization of development tools is working, niche markets can be viable markets.”
Gilbert is enjoying the current state of indie development and the ability to make decent games with relatively small teams. It speaks to his days making titles in the ’80s and ’90s. Maniac Mansion was made with three people, Monkey Island had five full time members of staff, which increased to seven for its sequel.
Thimbleweed Park is also being made by just a handful of creators, with input from the game’s plentiful Kickstarter supporters. But this desire to go back to those early days is not just about how the visuals looked or how small the teams were, Gilbert also wants to head back to a period when developers didn’t take themselves quite so seriously.
“When we were making games back then, it was all kind of new,” Gilbert remembers. “We didn’t have anything to go from, so it was a more innocent time. Games today, although I love modern adventure games like Firewatch or Kentucky Route Zero, they are very deep and thoughtful. They require a lot from me as a player, or the viewer, because there are very interesting, deep messages that I am gleaming from this stuff. And that’s largely just the advancement of the art form. The games of the ’80s and early ’90s, they were just more innocent, and simple and therefore more charming.
“Adventure games have certainly improved. Visually, games like Firewatch are much more advanced. But I think they’ve advanced in some ways and they’ve actually de-evolved in others. I think they’re more advanced because they are trying to tell more meaningful stories, stories that are truly about something interesting or important.
“But in other ways, they haven’t moved forward. Games like Kentucky Route Zero… although I enjoyed that game quite a bit, I sort of jokingly call it the ‘press A to continue game’, because I didn’t feel like I was making a lot of choices. I was just kind of pressing the A button to get to the next piece of dialogue, and it was greatly written dialogue and it was a captivating world, which made it ok. In Firewatch, you are spending a lot of time walking around and exploring this world, and it is a very fascinating world and a very beautiful place, so I was utterly enthralled with it, but there’s not actually a lot to do. The old school adventure games really required you to work. It was a case of: ‘here is a load of puzzles and here is a bunch of story, and you have to solve all these puzzles, which should lead to uncovering the next part of the mystery’. The classic adventure games were more sophisticated in that sense.”
Like Yooka-Laylee with Banjo-Kazooie and Bloodstained with Castlevania, Thimbleweed Park is a game that could easily have had the words ‘Maniac Mansion’ or ‘Monkey Island’ plastered on the artwork. Gilbert does hope his new IP can be successful enough to become a series, but he also, quite publicly, wants to revisit those classic franchises that made his name. Both Maniac Mansion and Monkey Island were created at LucasArts, so the rights to them currently reside in the vaults somewhere at Disney’s HQ.
Disney has largely moved on from video games, and Gilbert has asked the media giant on Twitter to let him buy back the rights to his old franchises. To no avail, so far.
We ended our conversation by asking Gilbert if he had considered returning to Kickstarter to raise the funds he might need to acquire those 1990s brands.
“Buying the rights back for those games… it’s not a matter of money, it is a matter of Disney being willing to sell them,” Gilbert concludes. “If Disney came to me and said: ‘Hey, we’ll sell you Monkey Island’. I will go get the money. No amount of crowd-funding is going to make this happen, it’s just a case of Disney agreeing to sell them.
“I’ve not managed to talk to anyone at Disney who is high enough up the ladder to make that decision. I fear that the people who would make that decision have no idea what Monkey Island is.”
The second fiscal quarter is historically the quietest stretch for Electronic Arts, but the three months ended September 30 gave the publisher reason for optimism heading into the crucial holiday season. The company today released its second quarter results, beating its net income guidance and showing strong growth in its EA Sports Ultimate Team efforts.
“Q2 was an excellent quarter for Electronic Arts, led by breakthrough new EA Sports titles engaging players across console and mobile,” CEO Andrew Wilson said. “We are in an outstanding position for the quarter ahead, with two of the highest-rated games of this console generation in Battlefield 1 and Titanfall 2, global competitive gaming tournaments underway, and our first virtual reality experiences coming soon. Across all platforms, this holiday season will be a fantastic time to play.”
While Battlefield 1 and Titanfall 2 launched after the second quarter, EA used the report to tout the games’ early achievements. For Battlefield 1, the company said the total player base during the first week of release nearly doubled that of 2013’s Battlefield 4. As for Titanfall 2, which just launched last Friday, the company said dozens of press outlets had given review scores the equivalent of a 90 out of 100 or above.
As for the releases actually covered by EA’s second quarter results, they would include EA Sports mainstays Madden 17 and FIFA 17. The company said “20% more players were engaged” in FIFA 17 during its first week than in the first week of FIFA 16, but made no mention of specific performance for Madden. However, the EA Sports Ultimate Team game modes appear to be healthy, as EA said Ultimate Team’s net sales between the FIFA, Madden, and NHL series are up 15% year-over-year on a trailing 12-month basis.
For the second quarter, EA reported net revenues of $898 million, up 10% from last year, but short of the $915 million it had given as guidance. However, the company’s net loss for the quarter of $38 million was a significant improvement on the previous second quarter’s net loss of $140 million, and better than the projected $51 million net loss.
EA gave the early performance of FIFA 17 and the holiday slate of releases as reason enough to adjust its full-year expectations, with the company now expecting net revenue for the year ending March 31, 2017 to be $4.775 billion, up from $4.75 billion. Net income for the year is also projected to reach $848 million, compared to the previous guidance of $809 million.
Update: On the earnings call, EA CFO Blake Jorgensen addressed the early feedback on Battlefield 1 and Titanfall 2, noting that it’s too early to update any sales projections but that there’s “incredible excitement” around both and the company is “very optimistic” not just for this holiday season but for the longer term. Citing the fact that “quite a few players” were still playing Battlefield 4 years after it released, Jorgensen said he expects similar long-term interest in both titles. More generally, looking at EA’s business, Jorgensen is also encouraged by the opportunity that this generation’s consoles and the mid-cycle upgrades affords a big publisher like EA since the console installed base is already up 33% in the West compared to the previous generation, he said.
Interestingly, when asked about one of EA’s big upcoming titles, Mass Effect: Andromeda, Jorgensen effectively said that EA is not afraid to push the title back yet again (it was originally scheduled for 2016 but is now loosely slated for Q4, which ends next March). While that shouldn’t be read as a sign of trouble – Jorgensen said Mass Effect is “tracking extremely well” – it appears EA wants to be 100% sure that the game does not need any additional time before it commits more fully to a release date.
A little bit of clarity can go a long way. A few weeks ago at the reveal of the PS4 Pro, in a staff roundtable I questioned whether Sony’s new console would hurt Microsoft’s chances with the more powerful Scorpio. I also gave Sony an edge because of its HDR rollout to all PS4s. As it turns out, the HDR update is practically useless (no games supported yet and no video streaming) and the PS4 Pro itself will see most games upscaled, according to Sony Interactive boss Andrew House.
While PS4 architect Mark Cerny did make it clear during the conference that the Pro does not render games in true 4K resolution, many fans had no doubt assumed it would and likely glossed over his technical explanation of the Pro’s “streamlined rendering techniques” and “temporal and spatial anti-aliasing.” It’s hard to say how much consumers will care when the Pro goes on sale in November, but Microsoft wasted no time in puffing up its chest to declare its superiority with a console that won’t ship for many, many months.
Microsoft Studios Publishing general manager Shannon Loftis told USA Today, “Any games we’re making that we’re launching in the Scorpio time frame, we’re making sure they can natively render at 4K.” Moreover, Albert Penello, senior director of product management and planning at Xbox, hammered home the point with our sister site Eurogamer, commenting, “I think there are a lot of caveats they’re giving customers right now around 4K. They’re talking about checkerboard rendering and up-scaling and things like that. There are just a lot of asterisks in their marketing around 4K, which is interesting because when we thought about what spec we wanted for Scorpio, we were very clear we wanted developers to take their Xbox One engines and render them in native, true 4K. That was why we picked the number, that’s why we have the memory bandwidth we have, that’s why we have the teraflops we have, because it’s what we heard from game developers was required to achieve native 4K.”
That’s a punch to the gut in true console war fashion, and one that Microsoft is no doubt happy to get in during a console cycle which has seen PS4 dominate. It may not seem like a big deal right now, as 4K TV sales are still relatively minor, but the prices are falling and interest in 4K and HDR is picking up, not only with consumers, but also with game developers and content providers for streaming services like Netflix. This could be a decent holiday for the 4K TV market, and by the time Scorpio actually does launch there will be that many more 4K TV owners to target with the only console that renders 4K natively. That’s a nice feather in Microsoft’s cap.
This week we also featured an interesting writeup on VR and AR from DICE Europe. While VR proponents like Unity’s Clive Downie said there will be over a billion people using VR in the next 10 years, others such as Niantic’s John Hanke and Apple boss Tim Cook cast doubt on the long-term appeal and commerical success of VR. Of course, this isn’t the first time that people have wondered whether VR will ever move beyond a niche category – and indeed, our Rob Fahey talks about the over-investment in the space in his column today – but the idea that VR is merely an intermediary step before AR comes into its own is the wrong way to think about these technologies in my view.
Just because they both offer altered realities and utilize headsets does not mean they should be lumped together. The use cases and experiences are vastly different for VR and AR, and while I agree that AR likely is the better bet from a commercial standpoint, I don’t underestimate VR for one second. I’ve had way too many fun game sessions using the tech already, and it’s early days. Beyond that, serious movie makers are starting to leverage the great potential of the medium. Jon Favreau (Iron Man, The Jungle Book), for example, is working on a VR film called Gnomes and Goblins and he’s even brought on veteran game designer Doug Church (System Shock, Thief) to fine tune the VR interactions.
The fact is VR has enormous storytelling potential and can immerse its users in ways that we’ve never experienced before. “As I work in film, so much has been done,” Favreau commented. “There are technological breakthroughs but there is less and less up in the air. You’re really writing a song in the same format that has been going on for at least a hundred years. And what’s interesting about VR is that, although I really don’t know where it’s going or if it’s going to catch on in a significant way culturally, I do know that there is a lot of unexplored territory and a lot of fun things as a storyteller for me to experiment with. It’s exciting to have so much fresh snow that nobody has walked through yet. There’s been no medium that I’ve felt that way since I’ve come into the business, where it feels like you can really be a pioneer.”
AR will be tremendously exciting in its own right, and I can’t wait for Magic Leap, HoloLens and castAR, but to think that VR will be cast aside to make way for AR’s ascendancy is totally off base.
Halfway through Sony’s announcement event for its new consoles – the redesigned, slimmer PS4 and the new, more powerful PS4 Pro – I found myself thinking about the optics of these events. I’ve seen the announcement events for every console since the PS2, and of them all, this was by far the most muted. The lack of bombast and braggadocio could speak to a quietly understated confidence, or to uncertainty, depending on where you’re standing. I suspect that the truth lies somewhere in the middle – Sony, achieving success it hasn’t seen since the PS2’s halcyon days, is certainly confident, but is also walking out onto uncertain territory with the PS4 Pro. The ground underfoot is no longer familiar.
The slim PS4, of course – perhaps the worst-kept secret in the history of the industry, given the appearance of functioning models on auction websites prior to the announcement – is nothing unexpected. Three years into the PS4’s lifespan, a slimmed down redesign was inevitable; it joins the (arguably rather more attractive) Xbox One S on the shelves as a sleeker model whose launch is somewhat overshadowed by impending obsolescence. Xbox One S, at least, has a year to run before the hugely more powerful Scorpio appears on the market. The new PS4 suffered the ignominy of being quickly announced and forgotten just moments before the unveiling of PS4 Pro, the device destined to replace it.
PS4 Pro, though, is a curious beast. It’ll run you $100 more than the slim PS4, it plays the same games and connects to the same online services. Sony has bent over backwards to avoid fragmenting their playerbase, and in theory, PS4 Pro is really designed only for the small minority of consumers with 4K displays in their living rooms. Yet the company must know the psychology of its consumers; it must know that for a large proportion of them, playing a game on a regular PS4 in the knowledge that an upgrade would make it that little bit sharper, that little bit smoother, is like Chinese water torture. That will only be exacerbated by the “Pro” moniker; so much of the market will feel an involuntary twitch of consumer desire at the very notion of their existing hardware being “amateur” or, god help us all, “noob”.
Ultimately, though, Sony’s cautious approach seems to be pitched just right. Those who will find themselves discombobulated by the notion of a needlessly dropped frame or a disappointingly undetailed hair strand, or quietly fuming at being branded a non-Pro, are precisely the audience expected to upgrade anyway. The benefits of PS4 Pro will be sufficient to keep them satisfied; while for pretty much everyone else, for the enormous audience of more casual consumers that Sony must access in the coming years in order to maintain the PS4’s sales trajectory, the benefits of the Pro seem minor enough not to bother with. The stroke of genius, perhaps, is that every upgrading gamer will release a second-hand PS4 into the market – handed off to a younger sibling or cousin, perhaps, or sold to a late upgrader from the last generation. That ought to do wonders to kick-start the PS4’s demographic expansion.
That’s not an easy balance to strike, and while it feels like it’s been skilfully done, only time and market data will tell. Sony enters Winter 2016 in a position of almost unprecedented strength; Nintendo’s NX won’t launch until next spring (and nobody really knows what it is), while Microsoft’s lovely Xbox One S is overshadowed by the plan to entirely outclass it with Scorpio next year. Both PS4 and PS4 Pro will do great guns this year (while PSVR, about which more in a moment, will undoubtedly be supply constrained). That’s not the real test; the test is how this line-up can fare against 2017’s launches, NX and Scorpio. Sony’s cards are now on the table for the next couple of years of the console war.
The other test, of course, is how this evolves. Much has been made of PS4 Pro representing the end of the console model; a final nail in the coffin of the five, seven or even ten year hardware cycle which has defined game consoles since the 1980s. Incremental updates like the PS4 Pro, maintaining compatibility and continuity while keeping pace with hardware advancements, are the future.
Well, perhaps they’re part of the future. Scorpio, with its dramatic upgrade over the Xbox One – so dramatic that the notion of Xbox One remaining fully capable of playing Scorpio titles seems ridiculous – suggests a somewhat different future. Equally, the muted nature of this week’s launch is suggestive of somewhat different thinking. Sony didn’t want to come out all guns blazing, shouting in triumph about its new hardware, because it cannot afford to alienate the 40 million existing owners of PS4 by implying that their consoles are obsolete. That’s a radical difference from console launches of old precisely because the whole purpose of those launches was to declare everything which came before obsolete. “Here, here is the new thing! All singing, all dancing, making the singing and dancing your existing console is capable of look merely like painful hopping and wheezing! Buy the new thing!” You can’t do that with an incremental upgrade; you can’t alienate your existing market in that way. Even smartphone makers have more freedom in their messaging, knowing that their hardware is expected to run on an 18 to 24 month upgrade cycle; consoles, though, you expect to remain “current” for four years, five years or more.
Incremental upgrades, then, lock us to a much more muted kind of message about new hardware. Does anyone really believe, though, that there’s no PS5 in the works? No grand, sweeping upgrade, that will be unveiled with bombast, and fireworks, and promises of walking on water and improbable feats of catering involving bread and fish? Of course that’s in the works. If PS4 Pro points us at something, it’s at the possibility of compatibility across generations in the very broad sense – perhaps, at last, we have entered a generation of consoles whose games will remain playable pretty much forever, or at least for as long as the capricious DRM gods smile upon us. The reverse, however, cannot remain true forever. Console generations will continue to roll past; it’s just that now, perhaps, there will be more mezzanines and landings between the floors.
Notably absent from Sony’s quiet little event was PlayStation VR. Oh, there was a logo, and there were a few words said, but you’d hardly imagine that this was a massive product launch that’s happening in just a few months’ time. Perhaps that’s because the aspect of PS4 Pro Sony is most anxious about is what impact it’s going to have on PSVR, and vice versa. Ever since the first leaks about PS4 Neo, as then was, hit the wild, there’s been a widespread assumption that part of the raison d’être for the new hardware was to drive PSVR headsets – with the existing PS4 simply being underpowered as a VR device.
If that’s not the case, Sony could have done a better job of pointing it out. Throwaway comments about the PS4 Pro yielding better frame rates for VR software sit uncomfortably with the company’s earlier pronouncements about 120Hz rendering for PSVR. Everything we’ve seen and learned about VR thus far suggests that this tech is all about framerate; if you can’t hit a consistent, high frame rate, users start to get severe motion sickness. If it’s the case that PS4 can hit those frame rates consistently, but PS4 Pro allows more visual finesse at the same frame rate, that’s great. If, on the other hand, PS4 is struggling with frame rate and PS4 Pro smoothes things out, that’s a big problem. PSVR cannot afford to be a poor experience on the existing PS4 installed base; if it is to be a success, it needs to work superbly on the 40 million PS4s already in the wild, not just on the fraction of the installed base which will be PS4 Pro.
Perhaps it does. Certainly, the demos of PSVR to date – all presumably running on PS4 standard hardware – have been fine, for the most part. Again, though, the optics are problematic; if you’re launching a VR headset within weeks of launching more powerful hardware, people are going to assume, not unreasonably, that they’re meant to complement each other. If that translates into users of the headset on stock PS4s getting physically ill where users on PS4 Pro do not, that’s a very big problem – and if that’s absolutely not the case, and there are procedures in place to prevent it, Sony needs to be discussing those things candidly and openly. (If it is the case, they might have been best served by doing something radical like only taking PSVR pre-orders alongside PS4 Pro pre-orders; let VR be the USP of PS4 Pro, and avoid the possibility of backlash from underpowered VR entirely.)
With the cards on the table, now we see how the hand plays. PS4 Pro is undoubtedly a shake-up to how the console business works. It’s one step closer to a world where console hardware is essentially a fixed-spec PC in a nice box that’s updated every few years – but we’re not in that world yet, and whether we ever arrive there will be determined by how Sony and its rivals fare in the coming 18 months.
Electronic Arts has one of the deepest back catalogs in the industry, but to date it has steered clear of mining it for new revenue through remastered and HD editions. That’s likely to change soon, according to a Game Informer interview with EA Studios executive VP Patrick Soderlund from last week at Gamescom. When asked if anything in EA’s stance on remasters had evolved in the last year, Soderlund tipped the publisher’s hand.
“What’s changed is that there is proof in the market that people want it, maybe more than there was when we spoke [previously],” Soderlund said. “There were some that did it before, but I think there is even more clear evidence that this is something that people really want. The honest answer is that we are absolutely actively looking at it. I can’t announce anything today, but you can expect us most likely to follow our fellow partners in Activision and other companies that have done this successfully.”
Soderlund added that if EA were to remaster games, it would “have to be careful in choosing the right brands for the right reasons at the right time.” Part of that would be ensuring the company handles the remasters properly instead of just selling quick and dirty ports.
That attitude is a pretty clear pivot from where the company’s thinking was just a year ago. Last October, Peter Moore said EA wasn’t interested in remakes and remasters because “it feels like pushing stuff out because you’ve run out of ideas,” adding, “I don’t know where we find the time to do remakes. We’re a company that just likes to push forward.”
While EA hasn’t been especially aggressive with remastered games, it has produced HD versions of older games like American McGee’s Alice and Crysis, primarily as preorder incentives for sequels in those series.
It’s been more than five years since The NPD Group said it would start including digital data in its monthly reports on the US video game business. In those five years, not only has digital grown, but publishers, analysts, press and more have all thrown shade at NPD, questioning the relevancy of a service that only offers physical sales data in an increasingly digital era. Today, NPD is finally taking that first step to offer a more complete picture of the entire games market as it’s unveiled its digital point-of-sale (POS) sourced service, tracking SKU-level sales data on digital games.
“Following several years of beta testing, the Digital Games Tracking Service will allow participating clients to understand the size and growth of the digital market, and analyze attach rates and other important metrics. Combined with physical data available by NPD, these clients can gain a better understanding of the interplay between the physical and digital sales channels,” the firm explained in a press statement.
“As has been experienced across a wide variety of industries, digital has made a big impact on the overall gaming market, and we’ve risen to meet the demand for a reporting mechanism that tracks those sales in a timely and accurate way,” said Joanne Hageman, President, U.S. Toys & Games, The NPD Group. “With the participation and support of leading publishers – whose cooperation makes this possible – we are excited to launch an industry-first service that addresses a long-standing need.”
The usual report on physical sales data will now be combined with digital sales data and issued on July 21 instead of July 14; it’s expected to follow that cadence (the third data Thursday of the month) moving forward. Initially, NPD has gained the support of major publishers like EA, Activision, Ubisoft, Capcom, Square Enix, Take-Two, Deep Silver and Warner Bros. There are notable exceptions, however, like Bethesda as well as first-party publishers like Microsoft, Sony and Nintendo, but NPD analyst Liam Callahan promised that more publishers would be signing on as the service evolves.
“This has been several years of beta testing and we’ve been doing this in partnership with publishers, shaping the product, encoding the data the way the industry wants to see it. It’s really at the behest of or on the behalf of the publishers that we’re moving forward with this announcement… Really the goal is to bring a new level of transparency never before seen, at least in the US market. This is really the first step. We recognize that there’s still a ways to go, we want more publishers to join, we want to be able to project for people who are not participating. It’s an evolution, it’s something that takes time and our philosophy was really to start – if we waited to have every publisher in the world to sign up it would take forever. We’ll be improving this as time goes on,” he said.
Importantly, NPD will notate next to game titles on the chart that do not include digital data. Callahan wants the service, which is being produced with the assistance of EEDAR, to ultimately be able to project data even for non-participants but NPD isn’t starting with that ability just yet. Instead, it’ll focus on tracking revenue from full-game downloads across Xbox Live, PlayStation Network and Steam. Services like Battle.net and Uplay won’t be included at this point.
“EEDAR is excited to be part of this initiative with NPD and the participating publishers. Tracked digital revenues have seen annual growth of over 100% each year since 2012. In 2016, we’ve already tracked more digital revenue than we saw in 2012 and 2013 combined. This initiative is a great milestone for the industry which will allow publishers to make better business decisions with a broader data set,” added EEDAR CEO Rob Liguori.
Add-on content like DLC and microtransactions will be tracked as well, but that data will only be released to participants, not the media and public. “We’re waiting until that’s a little more fully baked for us to roll that out to the media. We’re doing things in stages,” Callahan said.
It may be frustrating for the media to not have a granular breakdown at the SKU level to see what portion of a game’s sales are digital versus physical, but NPD anticipates more openness as the service evolves.
NPD communications chief David Riley commented, “This is a closed service, the detailed data is only available to participants so if you’re a non-participating publisher you cannot see the data. The fact that we’re allowed to go out with something for the media is a huge step in the right direction. I think as the service matures and as the publishers get used to it and we get more on board, we have more history, we do some benchmarking, we can provide that, but what we wanted to do for multiple reasons, including appeasing the publishers was to combine full-game physical with full-game digital, keep away from the DLC, keep PC games separate because that’s a whole different ball of wax. It’s not comprehensive, but it’s the most comprehensive, we’re the first in the market to track this and we’re sort of very cautious.”
He added, “I expect a good old slamming from the industry press because of the limitations here but what we don’t want to do is open ourselves up by separating it at this time. We’ve just opened the gates right now. Just as you’ve seen a withdrawal [of data] on the physical side – we used to give units – this is sort of going to be the reverse I’m hoping and we can provide more over time.”
Working with the publishers is great, but there are numerous digitally released titles from indies which make up a growing piece of the industry pie. Will the service grow to track those titles too? “Indies are a big part of the industry in terms of their innovation and I think when I talk about our projection methodology and assets at NPD, that is part of how we can track everything, not just for publishers, including indie games and everything that’s outside the panel right now,” Callahan said.
“Some of those smaller games are published through a publisher or first-party so there are ways to get some of those with our publisher-sourced methodology, and otherwise we’re approaching it with developing a robust projection methodology. That’s certainly part of our plan, we’re not going to ignore the indie piece.”
In our previous conversations with NPD, the firm had hinted at possibly working towards the goal of global digital reports. That’s not off the table, but it’s not a focus at the moment. “US is our core competency… our vision is to expand this as much as we can in a way that makes sense for our partners. If that’s global that may be what we pursue. But we also want to do the best job that we can in projecting for the market and recruiting as many publishers as we can,” Callahan concluded.
While some publishers establish their own eSports divisions and appoint chief competition officers, Take-Two is approaching the competitive gaming trend with a bit more caution. Speaking with GamesIndustry.biz in advance of the company’s financial earnings report today, CEO and chairman Strauss Zelnick said the field was promising, but still unproven.
“eSports we find very interesting,” Zelnick said. “It is, however, still more a promotional tool than anything else. And most people see eSports as an opportunity to increase consumer engagement in their titles, and depending on the title, to increase consumer spending within the title.”
To date, Take-Two’s biggest eSports endeavor has been an NBA 2K tournament with 92,000 teams competing for a $250,000 prize. The final 16 teams are set to compete in a single-elimination tournament this weekend, with the finals taking place during the NBA Finals next month.
“It’s just the beginning for us,” Zelnick said of the tournament. “It’s very gratifying so far, but we have yet to see it as a stand-alone profitable business. We see it more as an adjunct to consumer engagement in our titles.”
Zelnick also addressed the company’s digital revenues, which for the first time made up more than half of its revenues for the year. While the industry has shifted heavily toward digital in recent years, Zelnick doesn’t see this as some sort of tipping point or a harbinger that physical goods are in for declines from here on out.
“This year was a little different because we had a very significant portion of this year’s revenue through digital distribution,” Zelnick said. “And that’s a reflection of the power of titles like Grand Theft Auto Online as well as PC titles, 90 percent of which are digitally delivered. With frontline console releases, your numbers are more like 20 percent from digital distribution. So physical distribution remains the lion’s share of our revenue.”
While Zelnick acknowledged the growth of digital distribution is a good thing for Take-Two, he specified that it wasn’t a strategy for the company because it’s ultimately out of his hands.
“We want to be where the consumer is, and we’re not really the ones who vote,” Zelnick said.