It’s going to be another big year for games, as Newzoo is projecting that 2015 will see global gaming revenues jump 9.4 percent year-over-year to $91.5 billion. The future looks bright as well, with the research firm’s upcoming Global Games Market Report projecting worldwide revenues to reach $107 billion in 2017.
As the overall market grows, the distribution of where that money is coming from will also shift. Newzoo’s projections for this year have a surging Chinese market narrowly overtaking the US as the single biggest revenue contributor, bringing in $22.2 billion (up 23 percent) compared to the American market’s $22 billion (up 3 percent). As far as regions go, Asia-Pacific is far and away the largest source of gaming revenue, accounting for $43.1 billion (up 15 percent). Latin America is the smallest of the four major markets with just $4 billion in revenues, but it is also growing the quickest, up 18 percent year-over-year.
The platforms on which people spend money gaming are also in flux. Tablet revenues are expected to be up 27 percent year-over-year to $9.4 billion, with smartphone and watch revenues jumping 21 percent to $20.6 billion. However, PCs are the most popular platform for games, bringing in $27.1 billion (up 8 percent) from standard titles and MMOs, while casual webgames will draw an additional $6.6 billion (up 2 percent). Newzoo grouped TV, consoles, and VR devices into their own category, projecting them to bring in $25.1 billion (up 2 percent) in game revenues. The only market segment not seeing growth at the moment is the dedicated handheld, which Newzoo expects to bring in $2.7 billion in revenue this year (down 16 percent).
While the firm’s grouping of VR and smartwatch revenues in other categories may be unusual, it said both segments are too small to report for now.
“Short- to medium-term VR revenues will be limited and largely cannibalize on current console and PC game spending as a share of game enthusiasts invest in the latest technology and richest experience that VR offers,” Newzoo said. “Smartwatches will be a success but not add significant ‘new’ revenues to the $20.6 billion spent on smartphones this year.”
Sony Corp on Monday announced a new high-end Xperia smartphone featuring an aluminium frame and a 5.2-inch screen, showing it is still in the phone race even as it scales down its struggling mobile operations.
The launch of the new flagship model comes amid a painful restructuring at the Japanese consumer electronics giant which has thrown the future of its smartphone division into doubt, with top executives saying an exit cannot be ruled out.
But as the company focuses on cutting costs rather than growing its mobile market, the division still needs investment in new products and marketing to maintain Sony’s brand and hold off a more rapid deterioration.
Sony said the Xperia Z4 would be available in Japan around the middle of the year, though it did not provide a launch date, details on carrier partners or price. The handset would be available in four colours and was slightly thinner than the previous Z3.
Hiroki Totoki, who was appointed last year to turn around the mobile unit, said Sony was targeting the upper end of the market where rivals such as Samsung Electronics Co Ltd and Apple Inc dominate.
“There’s a broad variety in the prices of smartphones, from around $100 to $1,400 at the upper end,” he told a news conference. “We want to focus in the upper half of that.”
Sony’s mobile division has fallen far behind high-end rivals such as Samsung and Apple, while at the low end it is battling pricing pressure from Asian manufacturers such as China’s Xiaomi Inc.
The company whose Walkman and Trinitron TV once played a critical role in the global entertainment industry has struggled in recent years to come up with trend-setting gadgets.
Sony announced in February that it would scale down its weaker operations such as TVs and mobile phones to focus instead on more successful products such as video games and camera sensors.
EA is shuttering four high-profile free-to-play games, all of them allied to popular IP like Battlefield and FIFA.
Battlefield Heroes, Battlefield Play4Free, Need for Speed World and FIFA World will all continue for another 90 days, at which point they will be taken offline for good. Further development on the games has stopped already.
“In more than five years since most of these titles launched, how we play games has changed dramatically,” said Patrick Soderlund, EVP of EA Games, in a statement. “These were pioneering experiences, and we’re humbled that, over the years, so many of you joined us to enjoy the games and the community.”
In terms of EA’s growing interest in free-to-play models, the real pioneer among that group is Battlefield Heroes, which was pitched at “frustrated, restricted” gamers back in 2008. Need for Speed World and Battlefield Play4Free followed, launching over the second half of 2010.
By the start of 2012, EA was reporting a combined total of 25 million players across the six games in its “Play4Free” initiative, with Battlefield Heroes and Need for Speed World contributing 10 million players each.
However, FIFA World is by no means a forerunner. It only reaching open beta late in 2013, and so it is being shuttered after substantially less than two years of public availability. This wouldn’t imply a slow decline in interest, but a lack of interest in the first place.
That’s in stark contrast to FIFA Online, the free-to-play version of the game made specifically for markets in Asia. In 2012, EA’s Andrew Wilson claimed that FIFA Online was making $100 million a year in revenue. A year later, FIFA Online 3, the most recent iteration, was the leading online sports game in both traffic and revenue in Korea.
One thing is certain, take these four titles away from EA’s free-to-play games on Origin, and you’re left with only Command & Conquer: Tiberium Alliances and Star Wars: The Old Republic – in his statement, Soderlund stressed the latter’s “enthusiastic and growing” community, and reiterated EA’s commitment to providing new content.
The remainder of the company’s free-to-play catalog is composed of games like Outernauts, The Simpsons: Tapped Out and Bejeweled Blitz. Casual, social, call them what you will, but they are intended for a very different audience to Need for Speed World and Battlefield Play4Free, and that audience has just lost two-thirds of the games EA had made to satisfy its needs.
During a presentation at the Game Developers Conference earlier this month, Boss Fight Entertainment’s Damion Schubert suggested the industry to drop the term “whales,” calling it disrespectful to the heavy spenders that make the free-to-play business model possible. As an alternative, he proposed calling them “patrons,” as their largesse allows the masses to enjoy these works that otherwise could not be made and maintained.
After his talk, Schubert spoke with GamesIndustry.biz about his own experiences with heavy spending customers. During his stint at BioWare Austin, Schubert was a lead designer on Star Wars: The Old Republic as it transitioned from its original subscription-based business model to a free-to-play format.
“I think the issue with whales is that most developers don’t actually psychologically get into the head of whales,” Schubert said. “And as a result, they don’t actually empathize with those players, because most developers aren’t the kind of person that would shell out $30,000 to get a cool speeder bike or whatnot… I think your average developer feels way more empathy for the free players and the light spenders than the whales because the whales are kind of exotic creatures if you think about them. They’re really unusual.”
Schubert said whales, at least those he saw on The Old Republic, don’t have uniform behavior patterns. They weren’t necessarily heavy raiders, or big into player-vs-player competition. They were just a different class of customer, with the only common attribute being that they apparently liked to spend money. Some free-to-play games have producers whose entire job is to try to understand those customers, Schubert said, setting up special message boards for that sub-community of player, or letting them vote on what content should be added to a game next.
“When you start working with these [customers], there’s a lot of concern that they are people who have gambling problems, or kids who have no idea of the concept of money,” Schubert said.
But from his experience on The Old Republic, Schubert came to understand that most of that heavy spending population is simply people who are legitimately rich and don’t have a problem with devoting money to something they see as a hobby. Schubert said The Old Republic team was particular mindful of free-to-play abuse, and had spending limits placed to protect people from credit card fraud or kids racking up unauthorized charges. If someone wanted to be a heavy spender on the game, they had to call up customer service and specifically ask for those limits to be removed.
“If you think about it, they wanted to spend money so much that they were willing to endure what was probably a really annoying customer service call so they could spend money,” Schubert said.
The Old Republic’s transition from a subscription-based model to free-to-play followed a wider shift in the massively multiplayer online genre. Schubert expects many of the traditional PC and console gaming genres like fighting games and first-person shooters to follow suit, one at a time. That said, free-to-play is not the business model of the future. Not the only one, at least.
“I think the only constant in the industry is change,” Schubert said when asked if the current free-to-play model will eventually fall out of favor. “So yeah, it will shift. And it will always shift because people find a more effective billing model. And the thing to keep in mind is that a more effective billing model will come from customers finding something they like better… I think there is always someone waiting in the wings with a new way of how you monetize it. But I do think that anything we’re going to see in the short term, at least, is probably going to start with a great free experience. It’s just so hard to catch fire; there are too many competitive options that are free right now.”
Two upstart business models Schubert is not yet sold on are crowdfunding and alpha-funding. As a consumer, he has reservations about both.
“The Wild West right now is the Kickstarter stuff, which is a whole bunch of companies that are making their best guess about what they can do,” Schubert said. “Many of them are doing it very, very poorly, because it turns out project management in games is something the big boys don’t do very well, much less these guys making their first game and trying to do it on a shoestring budget. I think that’s a place where there’s a lot more caveat emptor going on.”
Schubert’s golden rule for anyone thinking of supporting a Kickstarter is to only pledge an amount of money you would be OK losing forever with nothing to show for it.
“At the end of the day, you’re investing on a hope and a dream, and by definition, a lot of those are just going to fail or stall,” Schubert said. “Game development is by definition R&D. Every single game that gets developed is trying to find a core game loop, trying to find the magic, trying to find the thing that will make it stand out from the 100 other games that are in that same genre. And a lot of them fail. You’ve played 1,000 crappy games. Teams didn’t get out to make crappy games; they just got there and they couldn’t find the ‘there’ there.”
He wasn’t much kinder to the idea of charging people for games still in an early stage of development.
“I’m not a huge fan of Early Access, although ironically, I think the MMO genre invented it,” Schubert said. “But on the MMOs, we needed it because there are things on an MMO that you cannot test without a population. You cannot test a 40-man raid internally. You cannot test large-scale political systems. You cannot test login servers with real problems from different countries, server load and things like that. Early Access actually started in my opinion, with MMOs, with the brightest of hopes and completely and totally clean ideals.”
Schubert has funded a few projects in Early Access, but said he wound up getting unfinished games in return. Considering he works on unfinished games for a living, he doesn’t have much patience for them in his spare time, and has since refrained from supporting games in Early Access.
“I genuinely think there are very few people in either Kickstarter or Early Access that are trying to screw customers,” Schubert said. “I think people in both those spaces are doing it because they love games and want to be part of it, and it’s hard for me to find fault in that at the end of the day.”
Japanese electronics giant Panasonic Corp said it is gearing up to spend 1 trillion yen ($8.4 billion) on acquisitions over the next four years, bolstered by a stronger profit outlook for its automotive and housing technology businesses.
Chief Executive Kazuhiro Tsuga said at a briefing on Thursday that Panasonic doesn’t have specific acquisition targets in mind for now. But he said the firm will spend around 200 billion yen on M&A in the fiscal year that kicks off in April alone, and pledged to improve on Panasonic’s patchy track record on big deals.
“With strategic investments, if there’s an opportunity to accelerate growth, you need funds. That’s the idea behind the 1 trillion yen figure,” he said. Tsuga has spearheaded a radical restructuring at the Osaka-based company that has made it one of the strongest turnaround stories in Japan’s embattled technology sector.
Tsuga previously told Reuters that company was interested in M&A deals in the European white goods market, a sector where Panasonic has comparatively low brand recognition.
The firm said on Thursday it’s targeting operating profit of 430 billion yen in the next fiscal year, up nearly 25 percent from the 350 billion yen it expects for the year ending March 31.
Panasonic’s earnings have been bolstered by moving faster than peers like Sony Corp and Sharp Corp to overhaul business models squeezed by competition from cheaper Asian rivals and caught flat-footed in a smartphone race led by Apple Inc and Samsung Electronics. Out has gone reliance on mass consumer goods like TVs and smartphones, and in has come a focus on areas like automotive technology and energy-efficient home appliances.
Tsuga also sought to ease concerns that an expensive acquisition could set back its finances, which took years to recover from the deal agreed in 2008 to buy cross-town rival Sanyo for a sum equal to about $9 billion at the time.
Microsoft’s Xbox division is in a much healthier state today than it was a year ago. It’s had a tough time of it; forced to reinvent itself in an excruciating, public way as the original design philosophy and marketing message for the Xbox One transpired to be about as popular as breaking wind in a crowded lift, resulting in executive reshuffles and a tricky refocus of the variety that would ordinarily be carried out pre-launch and behind closed doors. Even now, Xbox One remains lumbered with the fossilised detritus of its abortive original vision; Kinect 2.0 has been shed, freeing up system resources and marking a clear departure for the console, but other legacy items like the expensive hardware required for HDMI input and TV processing are stuck right there in the system’s hardware and cannot be extracted until the inevitable redesign of the box rolls around.
All the same, under Phil Spencer’s tenure as Xbox boss, the console has achieved a better turnaround than any of us would have dared to expect – but that, perhaps, speaks to the low expectations everyone had. In truth, despite the sterling efforts of Spencer and his team, Xbox One is still a console in trouble. A great holiday sales season was widely reported, but actually only happened in one territory (the USA, home turf that was utterly dominated by Xbox in the previous generation), was largely predicated on a temporary price-cut and was somewhat marred by serious technical issues that dogged the console’s headline title for the season, the Master Chief Collection.
Since the start of 2015, things have settled down to a more familiar pattern once more; PS4 consistently outsells Xbox One, even in the USA, generally racking up more than double the sales of its competitor in global terms. Xbox One sells better month-on-month than the Wii U, but that’s cold comfort indeed given that Nintendo’s console is widely seen as an outright commercial failure, and Nintendo has all but confirmed that it will receive an early bath, with a replacement in the form of Nintendo NX set to be announced in 2016. Microsoft isn’t anywhere near that level of crisis, but nor are its sales in 2015 thus far outside the realms of comparison with Wii U – and their installed bases are nigh-on identical.
The odd thing about all of this, and the really positive thing that Microsoft and its collaborators like to focus on, is that while the Xbox One looks like it’s struggling, it’s actually doing markedly better than the Xbox 360 was at the same point in its lifespan – by my rough calculations, Xbox One is about 2.5 million units north of the installed base of Xbox 360 at the same point. Oddly, that makes it more comparable with PS3, which was, in spite of its controversy-dogged early years, a much faster seller out the door than Microsoft’s console. The point stands, though, that in simple commercial terms Xbox One is doing better than Xbox 360 did – it just happens that PS4 is doing better than any console has ever done, and casting a long shadow over Microsoft’s efforts in the process.
The problem with this is that I don’t think very many people are under the impression that Microsoft, whose primary businesses lie in the sale of office and enterprise software, cloud services and operating systems, is in the videogames business just in order to turn a little profit. Ever since the departure of Steve Ballmer and the appointment of the much more business-focused Satya Nadella as CEO, Xbox has looked increasingly out of place at Microsoft, especially as projects like Surface and Windows Phone have been de-emphasised. If Xbox still has an important role, it’s as the flag-bearer for Microsoft’s brand in the consumer space; but even at that, the “beach-head in the living room” is far less important now that Sony no longer really looks like a competitor to Microsoft, the two companies having streamlined themselves to a point where they don’t really focus on the same things any more. Besides, Xbox One is being left behind in PS4′s dust; even if Microsoft felt like it needed a beach-head in the living room, Xbox wouldn’t exactly be doing the job any more.
But wait, we’ve been here before, right? All those rumours about Microsoft talking to Amazon about unloading the Xbox division came to nothing only a few short months ago, after all. GDC saw all manner of talk about Xbox One’s place in the Windows 10 ecosystem; Spencer repeatedly mentioned the division having Nadella’s backing, and then there’s the recent acquisition of Minecraft, which surely seems like an odd thing to take place if the position of Xbox within the Microsoft family is still up in the air. Isn’t this all settled now?
Perhaps not, because the rumours just won’t stop swirling that Microsoft had quietly put Xbox on the market and is actively hunting for a buyer. During GDC and ever since, the question of who will come to own Xbox has been posed and speculated upon endlessly. The console’s interactions with Windows 10, including the eventual transition of its own internal OS to the Windows 10 kernel; the supposed backing of Nadella; the acquisition of Minecraft; none of these things have really deterred the talk that Microsoft doesn’t see Xbox as a core part of its business any more and would be happy to see it gone. The peculiar shake-up of the firm’s executive team recently, with Phil Harrison quietly departing and Kudo Tsunoda stepping up to share management of some of Microsoft Game Studios’ teams with Phil Spencer, has added fuel to the fire; if you hold it up at a certain angle to the light, this decision could look like it’s creating an internal dividing line that would make a possible divestment easier.
Could it happen? Well, yes, it could – if Microsoft is really determined to sell Xbox and can find a suitable bidder, it could all go far more smoothly than you may imagine. Xbox One would continue to be a part of the Windows 10 vision to some extent, and would probably get its upgrade to the Windows 10 kernel as well, but would no longer be Microsoft hardware – not an unfamiliar situation for a company whose existence has mostly been predicated on selling operating systems for other people’s hardware. Nobody would buy Xbox without getting Halo, Forza and various other titles into the bargain, but Microsoft’s newly rediscovered enthusiasm for Windows gaming would suggest a complex deal wherein certain franchises (probably including Minecraft) remain with Microsoft, while others went off with the Xbox division. HoloLens would remain a Microsoft project; it’s not an Xbox project right now and has never really been pushed as an Xbox One add-on, despite the immediate comparisons it prompted with Sony’s Morpheus. Xbox games would still keep working with the Azure cloud services (Microsoft will happily sell access to that to anyone, on any platform), on which framework Xbox Live would continue to operate. So yes, Xbox could be divorced from Microsoft, maintaining a close and amiable relationship with the requisite parts of the company while taking up residence in another firm’s stable – a firm with a business that’s much more in line with the objectives of Xbox than Microsoft now finds itself to be.
“None of Xbox’ rivals would be in the market to buy such a large division, and no game company would wish to lumber itself with a platform holder business. Neither Apple nor Google make the slightest sense as a new home for Xbox either”
This, I think, is the stumbling block. I’m actually quite convinced that Microsoft would like to sell the Xbox division and has held exploratory talks to that end; I’m somewhat less convinced, but prepared to believe, that those talks are continuing even now. However, I’m struggling to imagine a buyer. None of Xbox’ rivals would be in the market to buy such a large division, and no game company would wish to lumber itself with a platform holder business. Neither Apple nor Google make the slightest sense as a new home for Xbox either; the whole product is distinctly “un-Apple” in its ethos and approach, while Google is broadly wary of hardware and almost entirely disinterested in games.
Amazon was the previously mentioned suitor, and to my mind, remains the most likely purchaser – but it’s seemingly decided to pursue its own strategy for living room devices for now, albeit with quite limited success. I could see Amazon still “exploring options” in this regard with Microsoft, but if that deal was going to happen, I would have expected it to happen last year. Who else is out there, then? Netflix, perhaps, is an interesting outside possibility – the company’s branching out into creating original TV content as well as being a platform for third-party content would be a reasonably good cultural match for the Game Studios aspect of Xbox, but it’s hard to imagine a company that has worked so hard to divorce itself from the entire physical product market suddenly leaping back into it with a large, expensive piece of hardware.
This, I think, is what ultimately convinces me that Xbox is staying at Microsoft – for better or worse. It might be much better for Xbox if it was a centrepiece project for a company whose business objectives matched its strengths; but I don’t think any such company exists to take the division off Microsoft’s hands. Instead, Spencer and his talented team will have to fight to ensure that Xbox remains relevant and important within Microsoft. Building its recognition as a Windows 10 platform is a good start; figuring out other ways in which Xbox can continue to be a great game platform while also bringing value to the other things that Microsoft does is the next challenge. Having turned around public perception of the console to a remarkable degree, the next big task for the Xbox team will be to change perceptions within Microsoft itself and within the investor community – if Xbox is stuck at Microsoft for the long haul, it needs to carve itself a new niche within a business vision that isn’t really about the living room any more.
There’s not a lot to argue with the consensus view that Valve had the biggest and most exciting announcement of GDC this year, in the form of the Vive VR headset it’s producing with hardware partner HTC. It may not be the ultimate “winner” of the battle between VR technologies, but it’s done more than most to push the whole field forwards – and it clearly sparked the imaginations of both developers and media in San Francisco earlier this month. Few of those who attended GDC seem particularly keen to talk about anything other than Vive.
From Valve’s perspective, that might be just as well – the incredibly strong buzz around Vive meant that it eclipsed Valve’s other hardware-related announcement at GDC, the unveiling of new details of the Steam Machines initiative. Ordinarily, it might be an annoying (albeit very high-quality) problem to have one of your announcements completely dampen enthusiasm for the other; in this instance, it’s probably welcome, because what trickled out of GDC regarding Steam Machines is making this look like a very stunted, unloved and disappointing project indeed.
To recap briefly; Steam Machines is Valve’s attempt to create a range of attractive, small-form-factor PC hardware from top manufacturers carrying Valve’s seal of approval (hence being called “Steam Machines” and quite distinctly not “PCs”), running Valve’s own gaming-friendly flavour of the Linux OS, set up to connect to your living room TV and controlled with Valve’s custom joypad device. From a consumer standpoint, they’re Steam consoles; a way to access the enormous library of Steam content (at least the Linux-friendly parts of it) through a device that’s easy to buy, set up and control, and designed from the ground up for the living room.
That’s a really great idea, but one which requires careful execution. Most of all, if it’s going to work, it needs a fairly careful degree of control; Valve isn’t building the machines itself, but since it’s putting its seal of approval on them (allowing them to use the Steam trademark and promoting them through the Steam service), it ought to have the power to enforce various standards related to specification and performance, ensuring that buyers of Steam Machines get a clear, simple, transparent way to understand the calibre of machine they’re purchasing and the gaming performance they can expect as a result.
Since the announcement of the Steam Machines initiative, various ways of implementing this have been imagined; perhaps a numeric score assigned to each Machine allowing buyers to easily understand the price to performance ratio on offer? Perhaps a few distinct “levels” of Steam Machine, with some wiggle room for manufacturers to distinguish themselves, but essentially giving buyers a “Good – Better – Best” set of options that can be followed easily? Any such rating system could be tied in to the Steam store itself, so you could easily cross-reference and find out which system is most appropriate for the kind of games you actually want to play.
In the final analysis, it would appear that Valve’s decision on the myriad possibilities available to it in this regard is the worst possible cop-out, from a consumer standpoint; the company’s decided to do absolutely none of them. The Steam Machines page launched on the Steam website during GDC lists 15 manufacturers building the boxes; many of those manufacturers are offering three models or more at different price and performance levels. There is absolutely no way to compare or even understand performance across the different Steam Machines on offer, short of cross-referencing the graphics cards, processors, memory types and capacities and drive types and capacities used in each one – and if you’ve got the up-to-date technical knowledge to accurately balance those specifications across a few dozen different machines and figure out which one is the best, then you’re quite blatantly going to be the sort of person who saves money by buying the components separately and wouldn’t buy a Steam Machine in a lifetime.
“Valve seems to have copped out entirely from the idea of using its new systems to make the process of buying a gaming PC easier or more welcoming for consumers”
In short, unless there’s a pretty big rabbit that’s going to be pulled out of a hat between now and the launch of the first Steam Machines in the autumn, Valve seems to have copped out entirely from the idea of using its new systems to make the process of buying a gaming PC easier or more welcoming for consumers – and in the process, appears to have removed pretty much the entire raison d’etre of Steam Machines. The opportunity for the PC market to be grown significantly by becoming more “console-like” isn’t to do with shoving PC components into smaller boxes; that’s been happening for years, occasionally with pretty impressive results. Nor is it necessarily about reducing the price, which has also been happening for some years (and which was never going to happen with Steam Machines anyway, as Valve is of no mind to step in and become a loss-leading platform holder).
Rather, it’s about lowering the bar to entry, which remains dizzyingly high for PC gaming – not financially, but in knowledge terms. A combination of relatively high-end technical knowledge and of deliberate and cynical marketing-led obfuscation of technical terminology and product numbering has meant that the actual process of figuring out what you need to buy in order to play the games you want at a degree of quality that’s acceptable is no mean feat for an outsider wanting to engage (or re-engage) with PC games; it’s in this area, the simplicity and confidence of buying a system that you know will play all the games marketed for it, that consoles have an enormous advantage over the daunting task of becoming a PC gamer.
Lacking any guarantee of performance or simple way of understanding what sort of system you’re buying, the Steam Machines as they stand don’t do anything to make that process easier. Personally, I ought to be slap bang in the middle of the market for a Steam Machine; I’m a lapsed PC gamer with a decent disposable income who is really keen to engage with some of the games coming out in the coming year (especially some of the Kickstarted titles which hark back to RPGs I used to absolutely adore), but I’m totally out of touch with what the various specifications and numbers mean. A Steam Machine that I could buy with the confidence that it would play the games I want at decent quality would be a really easy purchase to justify; yet after an hour flicking over and back between the Steam Machines page launched during GDC and various tech websites (most of which assume a baseline of knowledge which, in my case, is a good seven or eight years out of date), I am no closer to understanding which machine I would need or what kind of price point is likely to be right for me. Balls to it; browser window full of tabs looking at tech spec mumbo-jumbo closed, PS4 booted up. Sale lost.
This would be merely a disappointment – a missed opportunity to lower the fence and let a lot more people enjoy PC gaming – were it not for the extra frisson of difficulty posed by none other than Valve’s more successful GDC announcement, the Vive VR headset. You see, one of the things that’s coming across really clearly from all the VR technology arriving on the market is that frame-rate – silky-smooth frame-rate, at least 60FPS and preferably more if the tech can manage it – is utterly vital to the VR experience, making the difference between a nauseating, headache-inducing mess and a Holodeck wet dream. Suddenly, the question of PC specifications has become even more important than before, because PCs incapable of delivering content of sufficient quality simply won’t work for VR. One of the appealing things about a Steam Machine ought to be the guarantee that I’ll be able to plug in a Vive headset and enjoy Valve’s VR, if not this year then at some point down the line; yet lacking any kind of certification that says “yes, this machine is going to be A-OK for VR experiences for now”, the risk of an expensive screw-up in the choice of machine to buy seems greater than ever before.
I may be giving Steam Machines a hard time unfairly; it may be that Valve is actually going to slap the manufacturers into line and impose a clear, transparent way of measuring and certifying performance on the devices, giving consumers confidence in their purchases and lowering the bar to entry to PC gaming. I hope so; this is something that only Valve is in a position to accomplish and that is more important than ever with VR on the horizon and approaching fast. The lack of any such system in the details announced thus far is bitterly disappointing, though. Without it, Steam Machines are nothing more than a handful of small form-factor PCs running a slightly off-kilter OS; of no interest to hobbyists, inaccessible to anyone else, and completely lacking a compelling reason to exist.
The future for the CIA is cyber espionage, and the agency wants to make sure that it has the means, the men, and the measures to take a role in that party.
Brennan gave the team a briefing at the end of last week, and the CIA has released an unclassified version of an internal communication.
The document outlines the agency’s future, its threats and what in the name of heck the CIA is going to do about it.
The future will include a special digital division, called the Directorate of Digital Innovation, which will host highly trained and skilled staffers and take the whip hand in internal and external agency technology moves.
“Digital technology holds great promise for mission excellence, while posing serious threats to the security of our operations and information, as well as to US interests more broadly,” said Brennan.
“We must place our activities and operations in the digital domain at the very center of all our mission endeavors. To that end, we will establish a senior leadership position to oversee the acceleration of digital and cyber integration across all of our mission areas.
“The new Directorate will be responsible for overseeing the career development of our digital experts as well as the standards of our digital tradecraft.”
Brennan said, and let’s all agree to noticing this, that cyber threats are increasing, and that the changes will help policymakers and the CIA tackle the “unprecedented pace and impact of technological advances”.
He went further in a briefing with journalists, explaining that the change is needed to fill gaps in skills coverage at the agency and put an end to problems where one part of an agency may not know what another is doing.
A report in The Washington Post quoted Brennan as saying that the reorganization will allow the CIA to “cover the entire universe regionally and functionally so that something going on in the world falls into one of those buckets”.
Virtual reality is being viewed as the next big thing, and not just for gaming. Facebook has talked about how VR headsets will let friends communicate as if they’re together in the same room.
A team of engineers at Google is building a version of Android for virtual reality applications, the Wall Street Journal reported Friday, citing two people familiar with the project. “Tens of engineers” and other staff are said to be working on the project.
The OS would be freely distributed, the report said, mirroring the strategy that made Android the most popular OS for smartphones. The report didn’t provide any launch plans, and Google didn’t immediately respond to a request for comment.
With rivals investing heavily in VR, it would make sense for Google to build its own OS. Facebook has referred to VR as the next big platform after mobile, and it bought headset maker Oculus VR last year for US$2 billion.
They see VR as the future because it provides an immersive experience for gaming, entertainment, communications, and perhaps other applications not thought of yet. It’s still a way from mass adoption, though, and some people report getting nausea from VR systems, or just don’t want a big display strapped to their head.
Still, there are lots of players in the space. Samsung has Gear VR, Sony has Project Morpheus, and Microsoft has HoloLens.
Google, clearly, doesn’t want to be left behind.
Leading the Android VR effort are veterans Clay Bavor and Jeremy Doig, the Wall Street Journal said. Bavor helped to create Google Cardboard, the company’s low-tech virtual reality viewer that attracted attention at last year’s Google I/O conference.
Free to play has an image problem. It’s the most influential and arguably important development in the business of games in decades, a stratospherically successful innovation which has enabled the opening up of games to a wider audience than ever before. Implemented well, with clear understanding of its principles and proper respect afforded to players and creativity alike, it’s more fair and even, in a sense, democratic than old-fashioned models of up-front payment; in theory, players pay in proportion to their enjoyment, handing over money in small transactions for a continued or deepened relationship with a game they already love, rather than giving a large amount of cash up-front for a game they’ve only ever seen in (possibly doctored) screenshots and videos.
While that is a fair description, I think, of the potential of free-to-play, it’s quite clearly not the image that the business model bears right now. You probably scoffed about half a dozen times reading the above paragraph – it may be a fair description of free-to-play at its hypothetical best, but it’s almost certainly at odds with your perceptions.
How, then, might we describe the perception of F2P? Greedy, exploitative, unfair, cheating… Once these adjectives start rolling, it’s hard to get them to stop. The negative view of F2P is that it’s a series of cheap psychological tricks designed to get people to spend money compulsively without ever realising quite how much cash they’re wasting on what is ultimately a very shallow and cynical game experience.
I don’t think it’s entirely unsurprising or unexpected that this perception should be held by “core” gamers or those enamoured of existing styles of game. Although F2P has proven very successful for games like MMOs and MOBAs, it’s by no means universally applicable, either across game types or across audience types; some blundering attempts by publishers to add micro-transactions to premium console and PC titles, combined with deep misgivings over the complete domination of F2P in the mobile game market, have left plenty of more traditional gamers with a very negative and extremely defensive attitude regarding the new business model. That’s fine, though; F2P isn’t for that audience (though it’s a little more complex than that in reality; many players will happily tap away at an F2P mobile game while waiting for matchmaking in a premium console game).
What’s increasingly clear, however, is that there’s an image problem for F2P right in the midst of the audience at whom it’s actually aimed. The negative perception of F2P is becoming increasingly mainstream. It gets mass-media coverage on occasion; recently, it spurred Apple to create a promotion specifically pointing App Store customers to games with no in-app purchases. I happen to think that’s a great idea personally, but what does it say about the feedback from Apple’s customers regarding F2P games, that promotion of non-F2P titles was even a consideration?
Even some of the most successful F2P developers now seem to want to distance themselves from the business model; this week’s interview with Crossy Road developers Hipster Whale saw the team performing linguistic somersaults to avoid labelling their free-to-play game as being free-to-play. Crossy Road is a brilliant, fun, interesting F2P game that hits pretty much all of the positive notes I laid out up in the first paragraph; that even its own developers seem to view “free-to-play” as an overtly negative phrase is deeply concerning.
The problem is that the negativity has a fair basis; there’s a lot of absolute guff out there, with the App Store utterly teeming with F2P games that genuinely are exploitative and unfair; worst of all, the bad games tend to be stupid, mean-spirited and grasping, attempting to suck money out of easily tricked customers (and let’s be blunt here: we’re talking, in no small measure, about kids) rather than undertaking the harder but vastly more rewarding task of actually entertaining and enthralling people until they feel perfectly happy with parting with a little cash to see more, do more or just to deepen their connection to the game.
Such awfulness, though, is not universal by any measure. There are tons of good F2P games out there; games that are creative and interesting (albeit often within a template of sorts; F2P was quick to split off into slowly evolving genre-types, though nobody who’s played PC or console games for very long can reasonably criticise that particular development), games that give you weeks or months of enjoyment without ever forcing a penny from your pocket unless you’re actually deeply engaged enough to want to pay up to get something more. Most of F2P’s bone fide hits fit into this category, in fact; games like Supercell’s Clash of Clans or Hay Day, GungHo’s Puzzle & Dragons and, yes, even King’s Candy Crush Saga, which is held aloft unfairly as an example of F2P scurrilousness, yet has never extracted a penny from 70 percent of the people who have finished (finished!) the game. That’s an absolutely enormous amount of shiny candy-matching enjoyment (while I don’t like the game personally, I don’t question that it’s enjoyment for those who play it so devotedly) for free.
Unfortunately, the negative image that has been built up by free-to-play threatens not just the nasty, exploitative games, but all the perfectly decent ones as well – from billion-grossing phenomena like Puzzle & Dragons to indie wunderkind like Crossy Road. If free-to-play as a “brand” becomes irreparably damaged, the consequences may be far-reaching.
A year ago, I’d have envisaged that the most dangerous consequence on the horizon was heavy-handed legislation – with the EU, or perhaps the USA, clamping down on F2P mechanisms in a half-understood way that ended up damaging perfectly honest developers along with two-bit scam merchants. I still think that’s possible; companies have ducked and dived around small bits of legislation (or the threat of small bits of legislation) in territories including Japan and the EU, but the hammer could still fall in this regard. However, I no longer consider that the largest threat. No, the largest threat is Apple; the company which did more than any other to establish F2P as a viable market remains the company that could pull the carpet out from underneath it entirely, and while I doubt that’s on the cards right now, the wind is certainly turning in that direction.
Apple’s decision to promote non-F2P titles on its store may simply be an editor’s preference; but given the growing negativity around F2P, it may also be a sign that customer anger over F2P titles on iOS is reaching receptive ears at Apple. Apple originally permitted free apps (with IAP or otherwise) for the simple reason that having a huge library of free software available to customers was a brilliant selling point for the iPhone and iPad. At present, that remains the case; but if the negativity around the perception of F2P games were ever to start to outweigh the positive benefits of all that free software, do not doubt that Apple would reverse course fast enough to make your head spin. Reckon that its 30 percent share of all those Puzzle & Dragons and Candy Crush Saga revenues would be enough to make it think twice? Reckon again; App Store revenue is a drop in the ocean for Apple, and if abusive F2P ever starts to significantly damage the public perception of Apple’s devices, it will ban the model (in part, at least) without a second thought to revenue.
Some of you, those who fully buy into the negative image of F2P, might think that would be a thing to celebrate; ding, dong, the witch is dead! That’s a remarkably short-sighted view, however. In truth, F2P has been the saviour of a huge number of game development jobs and studios that would otherwise have been lost entirely in the implosion of smaller publishers and developers over the past five years; it’s provided a path into the industry for a great many talented creative people, grown the audience for games unimaginably and has provided a boost not only to mobile and casual titles, but to core games as well – especially in territories like East Asia. Wishing harm on F2P is wishing harm on many thousands of industry jobs; so don’t wish F2P harm. Wish that it would be better; that way, everyone wins.
Chinese PC and mobile phone maker Lenovo Group Ltd acknowledged that its website was hacked, its second security blemish days after the U.S. government advised consumers to remove software called “Superfish” pre-installed on its laptops.
Hacking group Lizard Squad claimed credit for the attacks on microblogging service Twitter. Lenovo said attackers breached the domain name system associated with Lenovo and redirected visitors to lenovo.com to another address, while also intercepting internal company emails.
Lizard Squad posted an email exchange between Lenovo employees discussing Superfish. The software was at the center of public uproar in the United States last week when security researchers said they found it allowed hackers to impersonate banking websites and steal users’ credit card information.
In a statement issued in the United States on Wednesday night, Lenovo, the world’s biggest maker of personal computers, said it had restored its site to normal operations after several hours.
“We regret any inconvenience that our users may have if they are not able to access parts of our site at this time,” the company said. “We are actively reviewing our network security and will take appropriate steps to bolster our site and to protect the integrity of our users’ information.”
Lizard Squad has taken credit for several high-profile outages, including attacks that took down Sony Corp’s PlayStation Network and Microsoft Corp’s Xbox Live network last month. Members of the group have not been identified.
Starting 4 p.m. ET on Wednesday, visitors to the Lenovo website saw a slideshow of young people looking into webcams and the song “Breaking Free” from the movie “High School Musical” playing in the background, according to technology publication The Verge, which first reported the breach.
Although consumer data was not likely compromised by the Lizard Squad attack, the breach was the second security-related black eye for Lenovo in a matter of days.
Nearly half of all security breaches come from vulnerabilities that are between two and four years old, according to this year’s HP Cyber Risk Report entitled The Past Is Prologue.
The annual report found that the most prevalent problems came as a result of server misconfiguration, and that the primary causes of commonly exploited software vulnerabilities are defects, bugs and logic flaws.
But perhaps most disturbing of all was the news that Internet of Things (IoT) devices and mobile malware have introduced a significant extra security risk.
The entire top 10 vulnerabilities exposed in 2014 came from code written years, and in some cases decades, previously.
The news comes in the same week that HP took a swipe at rival Lenovo for knowingly putting Superfish adware into its machines.
“Many of the biggest security risks are issues we’ve known about for decades, leaving organisations unnecessarily exposed,” said Art Gilliland, senior vice president and general manager for enterprise security products at HP.
“We can’t lose sight of defending against these known vulnerabilities by entrusting security to the next silver bullet technology. Rather, organisations must employ fundamental security tactics to address known vulnerabilities and, in turn, eliminate significant amounts of risk.”
The main recommendations of report are that network administrators should employ a comprehensive and timely patching strategy, perform regular penetration testing and variation of configurations, keep equipment up to date to mitigate risk, share collaboration and threat intelligence, and use complementary protection strategies.
The threat to security from the IoT is already well documented by HP, which released a study last summer revealing that 90 percent of IoT devices take at least one item of personal data and 60 percent are vulnerable to common security breaches.
Sony Corp hopes to increase operating profit 25-fold within three years by growing its camera sensors and PlayStation units, its chief executive said, laying out a strategy that could see the company exit the ultra competitive TV and smartphone markets.
CEO Kazuo Hirai said on Wednesday the Japanese consumer electronics firm would no longer pursue sales growth in areas such as smartphones where its has suffered competition from cheaper Asian rivals as well as industry leaders like Apple Inc and Samsung Electronics.
Sony would instead focus its spending on more profitable businesses such as camera sensors, videogames and entertainment as it seeks to return to growth after forecasting for this financial year its sixth net loss in seven years.
“The strategy starting from the next business year will be about generating profit and investing for growth,” Hirai told a briefing, adding that Sony’s units would be given greater autonomy to make their own business decisions.
Asked about the TV and mobile phone units, Hirai said he would not “rule out considering an exit strategy”, Sony’s clearest statement to date about the possibility of selling or finding partners for these struggling units.
Sony is in the midst of a restructuring that has so far seen it sell off its personal computer division and spin off the TV business. It has also axed thousands of jobs.
Sony shares have risen more than 80 percent over the past year as investors applauded the restructuring, which accelerated since Hirai appointed Kenichiro Yoshida as his chief strategy officer in late 2013.
The struggling Japanese manufacturer said it will release its Android-compatible smart glasses for $840 in early March, targeting developers and industrial applications ahead of a commercial release in 2016.
That price is just over half of the $1,500 that Google was asking from early adopters of Glass before it shut down commercial sales of the wearable display last month.
“As a hands-free device, SmartEyeglass can be a promising product with many practical uses,” a Sony spokeswoman said via email when asked about the release in the wake of Google’s move. “But since we recognize the need to explore applications at this stage, we’re releasing this developer edition.”
Sony is also upgrading an SDK (software development kit) that it first released last September, and has posted detailed specs on the device’s website as well as application suggestions for workplace uses. They include construction or maintenance workers being able to view schematics while laboring hands-free or security guards being informed of a threat, with relevant data displayed on the lenses.
The Internet-connected SmartEyeglass can display low-resolution monochrome imagery and text such as SMS messages on the lenses, overlaying the information on the user’s field of view. The 3mm-thick lenses have an 85 percent light transmittance rate and objects are highly visible, according to Sony.
In contrast to Google Glass, information on the Sony display is easy to see but it must be manipulated with a separate, wired controller unit that houses a microphone, speakers and an NFC module. Weighing 77 grams, the smart glasses have Wi-Fi and Bluetooth connectivity and can obtain GPS data by linking with a smartphone. They also feature a 3-megapixel camera and sensors such as an accelerometer and gyroscope.
The SmartEyeglass Developer Edition SED-E1 will be released in Japan, the U.S. and Europe on March 10 and will be sold through the Sony Developer World website.
A year or two ago, it seemed that doom and gloom reigned over the prospects for “core” gaming. With smartphones and tablets becoming this decade’s ubiquitous gaming devices, casual and social games ascendant and free-to-play established as just about the only effective way to make money from the teeming masses swarming to gaming for the first time, dire predictions abounded about the death of game consoles, the decline of paid-for games and the dwindling importance of “core” gamers to the games industry at large.
This week’s headlines speak of a different narrative – one that’s become increasingly strong as we’ve delved into what 2015 has to offer. Sony’s financial figures look pretty good, buoyed partially by the weakness of the Yen but notably also by the incredible success of the PlayStation 4 – a console which more aggressive commentators were reading funeral rites for before it was even announced. Both of the PS4′s competitors, incidentally, ended 2014 (and began 2015) in a stronger sales position than they were in 12 months previously, with next-gen home consoles overall heading for the 40 million sales mark in pretty much record time.
Then there’s the software story of the week; the startling sales of Grand Theft Auto V, which thanks to ten million sales of the PS4 and Xbox One versions of the game, have now topped 45 million units. That’s an incredible figure, one which suggests that this single game has generated well over $2 billion in revenue thus far; the GTA franchise as a whole must, at this point, be one of the most valuable entertainment franchises in existence, comparable in revenue terms to the likes of Star Wars or the Marvel Cinematic Universe.
Look, this is basically feel-good stuff for the games business; “hey guys, we’re doing great, our biggest franchise is right up there with Hollywood’s finest and these console sales are a promise of a solid future”. Stories like this used to turn up all the time back when games were genuinely struggling to be recognised as a valid and important industry alongside TV, music and film. Nowadays, that struggle has been internalised; it’s worth stepping back every now and then from the sheer enormity of figures like Apple and Samsung’s smartphone sales, or Puzzle & Dragons’ revenue (comparable to GTAV’s, but whether that means the game can birth a successful franchise or sustain itself long-term is another question entirely), or the number of players engaged with top F2P games, to remind ourselves that there’s still huge success happening in the “traditional” end of the market.
The take-away, perhaps, is that this isn’t a zero-sum game. The great success of casual and social games, first on Facebook and now on smartphones, isn’t that they’ve replaced core games, cannibalising the existing high-value market; it’s that they’ve acquired a whole new audience for themselves. Sure, there’s overlap, but there’s little evidence to suggest that this overlap results in people engaging less with core games; I, for one, have discovered that many smartphone F2P games have a core loop that fits nicely into the match-making and loading delays for Destiny’s Crucible.
That’s not to say that changes to the wider business haven’t resonated back through the “core” games space. The massive success of a game like GTAV has a dark side; it reflects the increasing polarisation of the high-end games market, in which successful games win bigger than ever, but games which fail to become enormous hits find themselves failing utterly. There’s no mid-market any more; you’re either a complete hit or a total miss. Developers have lamented the loss of the “AA” market (as distinct from the “AAA” space) for some time; that loss is becoming increasingly keenly felt as enormous budgets, production values and financial pressures come to bear on a smaller and smaller line-up of top-tier titles. Several factors drove the death of AA, with production costs and team sizes being major issues, but the rise of casual games and even of increasingly high-quality indie titles undoubtedly played a role – creating whole new market sectors that cost far less to consumers than AA titles had done.
It’s not just success that’s been polarised by this process; it’s also risk. At the high-end of the market, risk is simply unacceptable, such are the enormous financial figures at play. Thus it’s largely left to the low-end – the indie scene, the flood of titles appearing on the App Store, on Steam and even on the likes of PlayStation Vita – to take interesting risks and challenge gaming conventions. Along the way, some of the talented creators involved in these scenes are either trying to engage new audiences, or to engage existing audiences in new ways; sometimes experimenting with gameplay and interactive, sometimes with narrative and art style, sometimes with business model or distribution.
All of which leads me to explain why I keep writing “core” games, with inverted commas around “core”; because honestly, I’m increasingly uncertain what this term means. It used to refer to specific genres, largely speaking those considered to have special resonance for geeky guys; gory science fiction FPS games, high fantasy RPGs, complex beat-’em-ups and shoot-’em-ups, graphic survival horror titles, war-torn action games. Then, for a while, the rise of F2P seemed to make the definition of “core” shimmer and reform itself; now it meant “games people pay for up front, and the kind of people who pay for those games”.
Now? Now, who knows what “core” really means? League of Legends is certainly something you have to be pretty damn deeply involved with to enjoy, but it’s free-to-play; so is Hearthstone, which is arguably not quite so “core” but still demands a lot of attention and focus. There are great games on consoles – systems whose owners paid hundreds of dollars for a devoted gaming machine – which are free-to-play. There are games on mobile phones that cost money up front and are intricate and engrossing. There are games you can download for free on your PC, or pick up for a few dollars on Steam, that explore all sorts of interesting and complex niches of narrative, of human experience and of the far-flung corners of what it means to play a “game”. Someone who sits down for hours unravelling the strands of a text adventure written in Twine; are they “core”? Someone who treats retro gaming like a history project, travelling back through the medium’s tropes and concepts to find their origin points; are they “core”? How about Frank Underwood in House of Cards, largely disinterested in games but picking up a violent shooter to work out frustrations on his Xbox in the evenings; is he a “core gamer”?
Don’t get me wrong; this fuzzing of the lines around the concept of “core” is, to my mind, a vital step in the evolution of our medium. That the so-called “battle” between traditional business models and F2P, between AAA studios and indies, between casual and core, was not a zero-sum game and could result in the expansion of the entire industry, not the destruction of one side or another, has been obvious from the outset. What was less obvious and took a little more time to come to pass was that not only would each of those sides not detract from the others; they would actually learn from one another and help to fuel one another’s development. New creative outlooks, new approaches to interactivity, new thoughts on social and community aspects of gaming, new ideas about business models and monetisation; these all mingle with one another and help to make up for the creative drought at the top of the AAA industry (and increasingly, at the top of the F2P industry, too) by providing a steady feed of new concepts and ideas from below.
It’s fantastic and very positive that the next-gen consoles are doing well and that GTAV has sold so many copies (dark thoughts regarding the polarisation of AAA success aside); but it’s wrong, I think, to just look at this as being “hey, core gaming is doing fine”. Games aren’t made up of opposed factions, casual at war with core; it’s a spectrum, attracting relevant audiences from across the board. Rather than pitting GTAV against Puzzle and Dragons, I’d rather look at the enormous success of both games as being a sign of how well games are doing overall; rather than stacking sales of next-gen consoles against sales of smartphones and reheating old arguments about dedicated game devices vs multi-purpose devices, I’d rather think about the enormous addressable audience that represents overall. As the arguments about casual or F2P gaming “destroying” core games start to fade out, let’s take this opportunity to rid ourselves of some of our more meaningless distinctions and categories for good.