According to Newzoo’s 2016 Global eSports Market Report, this year is expected to be a “pivotal” one for the eSports sector. The firm said that last year’s tally for worldwide eSports revenues came to $325 million, and this year the full eSports economy should grow 43 percent to $463 million; Newzoo said this correlates with an audience of 131 million eSports enthusiasts and another 125 million “occasional viewers who tune in mainly for the big international events.” Overall, Newzoo’s report states that global and local eSports markets should jointly generate $1.1 billion in 2019.
Looking a bit deeper, Newzoo found that investment into and advertising associated with eSports continue to grow at a rapid clip. “This year has been dominated by the amount of investors getting involved in eSports. An increasing amount of traditional media companies have become aware of the value of the eSports sphere and have launched their first eSports initiatives. With these parties getting involved, there will be an increased focus on content and media rights. All major publishers have increased their investment into the space, realizing that convergence of video, live events and the game itself are providing consumers the cross-screen entertainment they desire from their favorite franchises,” Newzoo commented.
Online advertising in particular is the fastest growing revenue segment within eSports, jumping up 99.6 percent on a global scale compared to 2014. North America is expected to lead the charge worldwide.
“In 2016, North America will strengthen its lead in terms of revenues with an anticipated $175 million generated through merchandise, event tickets, sponsorships, online advertising and media rights. A significant part of these revenues flows back to the game publisher, but across all publishers, more money is invested into the eSports economy than is directly recouped by their eSports activities,” said Newzoo’s eSports Analyst, Pieter van den Heuvel.
“China and Korea together will represent 23 percent of global esports revenues, totalling $106 million in 2016. Audience-wise, the situation is different, with Asia contributing 44 percent of global eSports enthusiasts. Growth in this region is, for a large part, fuelled by an explosive uptake in Southeast Asia.”
While eSports is certainly on a good path for growth, game companies would be wise to not get too caught up by the hype. The average annual revenue per eSports enthusiast was $2.83 in 2015 and is expected to grow to $3.53 this year, Newzoo said, but that’s still a factor four lower than a mainstream sport such as basketball, which generates revenues of $15 per fan per year.
Peter Warman, CEO at Newzoo added, “The initial buzz will settle down and the way forward on several key factors, such as regulations, content rights and involvement of traditional media, will become more clear. The collapse of MLG was a reminder that this market still has a long road to maturity and we need to be realistic about the opportunities it provides. In that respect, it is in nobody’s interest that current market estimates differ so strongly. Luckily, when zooming in on the highest market estimates of more than $700 million, the difference is explainable by an in-depth look. This estimate only differs in the revenues generated in Asia (Korea in particular), and by taking betting revenues into account. At Newzoo, we believe betting on eSports should not be mixed into direct eSports revenues as the money does not flow into the eSports economy. Similarly, sports betting is not reported in sports market reports.”
Altair, based in Israel, is a developer of modem chip technology and software relating to the LTE (Long Term Evolution) 4G cellular standard for mobile phones and data terminals. Sony aims to combine Altair’s work with its sensing technologies such as GNSS (Global Navigation Satellite System) and image sensors to develop new cellular-connected, sensing devices.
Sony expects LTE, which is already used in data communication for mobile phones, to play a key role in IoT as more small devices or “things” are expected to be equipped with cellular chipsets and access network services that take advantage of cloud computing.
LTE is increasingly seen as a cellular technology that could be relevant for IoT, and carriers are preparing to offer it. Verizon announced last year the U.S. availability of chipsets for IoT devices that can connect to its LTE network at speeds up to 10Mbps.
Sony said in October it was acquiring Softkinetic Systems, a developer in Brussels of range image sensor technology that uses the time-of-flight (ToF) range method for arriving at the distance of an object. Sony said it would use the technology not only in the field of imaging but for broader sensing-related applications as well.
Altair claims on its website that its chipset already powers millions of LTE-connected devices worldwide. The company’s LTE chipsets provide varying speeds, standby current of microamps to milliamps, and package sizes ranging from small footprint modules to miniature, low-profile SiPs (system in package), the company said.
Sony expects to close the deal early next month. The consumer electronics company has been increasingly focusing on its components business, including a deal announced in December to acquire Toshiba’s CMOS image sensors and memory controller fabrication facility in Oita Prefecture in Japan.
On February 16, Street Fighter V will launch on PlayStation 4 and PC. It will not be launching to Xbox One thanks to an exclusivity deal signed with Sony. And as Capcom director of brand marketing and eSports Matt Dahlgren told GamesIndustry.biz recently, there are a few reasons for that.
Dahlgren called the deal “the largest strategic partnership that fighting games have ever seen,” and said it addressed several problems the publisher has had surrounding its fighting games for years.
“Basically every SKU of a game we released had its own segmented community,” he said. “No one was really able to play together and online leaderboards were always segmented, so it was very difficult to find out who would be the best online and compare everybody across the board.”
Street Fighter V should alleviate that problem as it’s only on two platforms, and gamers on each will be able to play with those on the other. Dahlgren said it will also help salt away problems that stemmed from differences between platforms. For example, the Xbox 360 version of Street Fighter IV had less input lag than the PS3 version. That fraction of a second difference between button press and action on-screen might have been unnoticeable to most casual players, but it was felt by high-level players who know the game down to the last frame of animation.
“There were varying degrees of input lag, so when those players ended up playing each other, it wasn’t necessarily on an equal playing field,” Dahlgren said. “This time around, by standardizing the platform and making everyone play together, there will be a tournament standard and everyone is on an equal playing field.”
Finally, Dahlgren said the deal with Sony will help take Street Fighter to the next level when it comes to eSports. In some ways, it’s a wonder it’s not there already.
“I think fighting games are one of the purest forms of 1v1 competition,” Dahlgren said. “A lot of the other eSports games out there are team-based, and while there’s an appeal to those, there’s something about having a single champion and having that 1v1 showdown that’s just inherently easy for people to understand.”
Street Fighter has a competitive gaming legacy longer than League of Legends or DOTA, but isn’t mentioned in the same breath as those hits on the eSports scene. In some ways, that legacy might have stymied the franchise’s growth in eSports.
“A lot of our community was really built by the fans themselves,” Dahlgren said. “Our tournament scene was built by grassroots tournament organizers, really without the help of Capcom throughout the years. And I would say a lot of those fans have been somewhat defensive [about expanding the game's appeal to new audiences]. It hasn’t been as inclusive as it could have been. With that said, I do definitely feel a shift in our community. There’s always been a talking point with our hardcore fans as to whether or not Street Fighter is an eSport, and what eSports could do for the scene. Could it potentially hurt it? There’s been all this controversy behind it.”
Even Capcom has shifted stances on how to handle Street Fighter as an eSport.
“In the past, we were actually against partnering up with any sort of corporations or companies out there that were treating eSports more like a business,” Dahlgren said. “And that has to do out of respect for some of our long-term tournament organizers… Our fear was that if we go out and partner up with companies concerned more about making a profit off the scene instead of the values that drive the community, then it could end up stomping out all these tournament organizers who are very passionate and have done so much for our franchise.”
“In the past, we were actually against partnering up with any sort of corporations or companies out there that were treating eSports more like a business.”
So instead of teaming with the MLGs or ESLs of the world, Capcom teamed with Twitch and formed its own Pro Tour in 2014. Local tournament organizers handle the logistics of the shows and retain the rights to their brands, while Capcom provides marketing support and helps with production values.
“I can’t say Capcom wouldn’t partner up with some of the other, more established eSports leagues out there,” Dahlgren said. “I do think there’s a way to make both of them exist, but our priority in the beginning was paying homage to our hardcore fans that helped build the scene, protecting them and allowing them to still have the entrepreneurial spirit to grow their own events. That comes first, before partnering with larger organizations.”
Just as Capcom’s stance toward tournaments has changed to better suit Street Fighter’s growth as an eSport, so too has the business model behind the game. The company has clearly looked at the success of many free-to-play eSports favorites and incorporated elements of them (except the whole “free-to-play” thing) into Street Fighter V. Previously, Capcom would release a core Street Fighter game, followed by annual or bi-annual updates with a handful of new fighters and balancing tweaks. Street Fighter V will have no such “Super” versions, with all new content and tweaks made to the game on a rolling basis.
“We are treating the game now more as a platform and a service, and are going to be continually adding new content post-launch,” Dahlgren said. “This is the first time we’re actually having our own in-game economy and in-game currency. So the more you play the game online, you’re going to generate fight money, and then you can use that fight money to earn DLC content post-launch free of charge, which is a first in our franchise. So essentially we’re looking at an approach that takes the best of both worlds. It’s not too far away from what our players really expect from a SF game, yet we get some of the benefits of continually releasing content post-launch and giving fans more of what they want to increase engagement long-term.”
Even if it’s not quite free-to-play, Street Fighter V may at least be cheaper to play. Dahlgren said that pricey arcade stick peripherals are not as essential for dedicated players as they might have seemed in the past.
“Since Street Fighter comes from an arcade heritage, a lot of people have this general belief that arcade sticks are the premier way of playing,” Dahlgren said. “I think now that the platform choice has moved more towards consoles, pad play has definitely become much more prevalent. I would believe that at launch you’re probably going to have more pad players than you actually have stick players. And in the competitive scene, we’ve seen the rise of a lot of very impressive pad players, which has pretty much shown that Street Fighter is a game that’s not necessarily dictated by the controller you play with; it’s the strategies and tactics you employ. And both of them are essentially on equal playing ground.”
In the early 70s and continuing into the 1980s, many children and parents growing up in the era of economic upheaval and the early dawning of globalization remember a time when Video Home Cassette (VHS) tapes rapidly became a common household item for their ease of use as a television recording and playback method. This time was not without competition between two major standards – namely Sony’s Betamax and JVCs Video Home System (VHS), the latter which eventually won the first format war despite being introduced one year after its rival and having less sophistication in terms of recording quality.
During the timeframe between 1982 when Philips and Sony commercialized the Compact Disc (CD) format to the mid-1990s when personal computer manufacturers and software developers began massive adoption of the CD-ROM standard for data storage, the CE industry was looking for a way to distribute digital video over an effective disc format to replace VHS that would serve two major purposes – being more cost-effective than LaserDiscs, and containing the ability to prevent unauthorized recordings (unlike Video CDs).
After several years of research in the early 1990s and the industry’s promise of avoiding another format war between two new optical disc formats – the Multimedia Compact Disc (MMCD) and the Super Density (SD) disc, the Digital Versatile Disc (DVD) standard was agreed upon. The DVD format went on sale in Japan in 1995, in the United States in 1997, in Europe in 1998 and in Australia in 1999.
The format enjoys a 1x playback speed of 10.5 Mbit/s and was originally offered in a 4.7GB single-layer capacity. In 2003, the double-layer format was launched and doubled capacity to 8.5GB.
Roughly ten years later, the first Blu-ray Disc titles were released on June 20, 2006 and included 50 First Dates, The Fifth Element, Hitch, House of Flying Daggers, Twister, Underworld: Evolution, xXx and The Terminator. The new 1080p Full HD format’s initial launch was predominantly helped by the launch of Sony’s PlayStation 3 in November 2006, selling just over 6 million console units worldwide in its first year on the market. The format wasn’t without competition, however, sparking the beginning of a second format war for the first time in three decades, this time between Blu-ray Disc and High Definition (HD) DVD. It was in February 2008 that one of HD-DVD’s main partners, Toshiba, announced that it would stop the development of HD-DVD players. This factor, along with a heavy lift in market share from PS3 sales, ultimately conceded the war to the Blu-ray disc format.
The Blu-ray Disc format originally launched with 25GB single-layer and 50GB dual-layer disc capacities, later upgrading to 100GB and 128GB with the BDXL format in June 2010. The PS3 features a 2x BD-ROM Blu-ray read speed at just 72Mbit/s. The 2x read speed was most likely chosen by Sony to save on console production costs, as the minimum required data transfer rate for Blu-ray disc movie playback is 54Mbit/s.
Once again, ten years after the launch of the 1080p Blu-ray Disc format we now have the 2160p Ultra HD Blu-ray Disc format in its place. On May 12, 2015, the Blu-ray Disc Association announced completed specifications and the official Ultra HD Blu-ray logo.
The initial 4K Blu-ray specification allows for three size densities – 50GB single layer, 66GB dual-layer and 100GB triple-layer each with 82Mbit/s, 108Mbit/s and 128Mbit/s data read speeds, respectively.
The new UHD 4K Blu-ray specification also moves from H.264 / AVC compression technology to the newer H.265 / HEVC (High Efficiency Video Coding) technology, allowing for noticeably more efficient data compression – about 25 percent to 35 percent lower bit rates – without any loss in image quality across a given data transfer speed.
The attack won’t hit the voting system and may not involve the presidential election, but the temptation for hackers is too great, even in state and local races, said Schneier, a computer security pioneer and longtime commentator.
“There are going to be hacks that affect politics in the United States,” Schneier said. Attackers may break into candidates’ websites, e-mail or social media accounts to uncover material the campaigns don’t want public, he said.
Schneier gave the prediction Thursday on a webcast from incident response company Resilient Systems, where he is chief technology officer.
He sees data security and privacy increasingly entering the political realm, both in terms of hackers’ targets and motives and in growing policy differences across borders.
He includes attacks like the massive capture and leak of internal Sony e-mails, which the U.S. government has linked to North Korea, and the revelation this year that Saudi Arabia’s foreign affairs ministry had been a target in attacks blamed on Iranian hackers. Those kinds of crimes have turned a corner as attackers see the impact they can have, Schneier said.
Legal and public-relations risks are making some enterprises rethink the value of data itself, Schneier said. It’s now starting to be called a “toxic asset,” bringing headaches like compliance with a patchwork of privacy laws and protections against breaches. Some companies are deciding it’s better not to have some data in the first place.
“A little bit of data about your customers is useful, and a lot more just doesn’t help you at all,” he said.
Still, at least one thing is improving. More data is getting encrypted, invisibly to the user, one connection at a time. For example, it helps to have Gmail traffic encrypted from the user’s device to Google servers and separately between Google’s and other companies’ data centers, Schneier said.
“That’s much more powerful than trying and failing to get end-to-end again and again,” he said. There are ways to break the encryption, but not all attackers can carry them out everywhere, all the time. “We get a lot of security because of this.”
Electronic Arts is the latest publisher to add a dedicated eSports group to its business, as CEO Andrew Wilson today announced the formation of the EA Competitive Gaming Division.
“As the latest step in our journey to put our players first, this group will enable global eSports competitions in our biggest franchises including FIFA, Madden NFL, Battlefield and more,” Wilson said, adding, “EA’s CGD will seek to build a best-in-class program to centralize our efforts with new events, as well as the infrastructure to bring you the world’s preeminent EA competitive experiences.”
Wilson said the CGD will foster competition and community around EA’s games, creating official tournaments and live broadcasts to entertain millions.
Leading up the new CGD will be Peter Moore, who will step down from his role as chief operating officer of EA at the end of the fiscal year to assume a new role as executive vice president and chief competition officer. Moore is well acquainted with EA’s key competitive gaming franchises like FIFA and Madden; prior to assuming his current role in 2011, Moore spent almost four years as president of EA Sports. An EA representative said the company has not yet announced a successor to Moore in the COO position, with details on those plans to come in the weeks and months ahead.
Moore seems excited to lead a burgeoning field for EA. “As a longtime champion of competitive gaming, bringing this to life at EA is a once-in-a-lifetime opportunity for me,” he said in a tweet. He also told IGN that this is something that EA has been thinking about for some time.
“We’re already very engaged with our development teams around the world to make sure our games have got modes that lend themselves very well to competitive gaming, built-in from the get-go. Not as something that’s put in as an add-on mode or a last-minute afterthought,” he explained.
“Prior to the formation of this division, conversations have been had, not just within the last few weeks but in the last couple years, about how we’ve got games that are coming to market in FY17, FY18, and FY19, and making darn sure that if you’re in a genre that lends itself to competitive gaming, you better have those modes built in.”
Wilson also named Todd Sitrin as the division’s senior vice president and general manager. Sitrin started with the company 14 years ago, leading product marketing at EA Tiburon for projects like Madden NFL and NASCAR Racing. Over the next decade, he worked his way up to senior vice president of marketing for all EA Sports, and has spent the last few years overseeing global marketing and product marketing for EA as a whole.
EA is by no means the only traditional publisher to identify an opportunity in the eSports market. In October, Activision Blizzard established its own eSports division. Unlike EA, Activision Blizzard looked outside its own walls for leadership of the group, tapping former ESPN CEO Steve Bornstein and MLG co-founder Mike Sepso to handle the new division.
Given the soaraway success of the PlayStation 4, the none-too-shabby success of the Xbox One (eclipsed by the PS4, sure, but doing fine by its own rights) and the continued meteoric rise of mobile and digital game revenues, it probably won’t surprise you that this has been a banner year for videogame stocks. The success hasn’t been evenly spread around – and there have been some notable failures this year, too – but as the end of 2015 approaches, several videogame companies are trading at prices they haven’t seen in almost a decade, and others are exploring historic highs in their valuations. It’s not unreasonable to say that for the first time in a while, videogames are back to being investors’ darlings.
For this year-end round up of stocks in recognition of the extremely large number of publicly listed Japanese game companies, we’ve divided them off into a feature of their own; the trials and tribulations of the Tokyo Stock Exchange in 2015 were very different from those of American or European markets, so it makes more sense to analyse those stocks separately (that’ll be in Part 2 later this week). In this feature, you’ll find a round-up of all the major stocks from the US and Europe throughout 2015 to date, so without further ado, to the charts.
Our first chart gives you a quick overview of just how great this year has been for the major publishers. The black line is the NASDAQ index, representing the average performance of US tech stocks during 2015; as you can see, it’s been a reasonably torpid year overall, which puts the excellent performance of the game publisher stocks in sharp relief. Take-Two, absent a major GTA release in the year, is the weakest of the bunch, but even at that it’s almost doubled the NASDAQ’s gains since the start of January – while at the top of the chart, Electronic Arts and Activision have soared, with Activision in particular up almost 90 percent for the year, setting brand new heights for its share price. The company’s expansion of its business, especially the acquisition of King, is undoubtedly responsible for some of the late gains – but its investors have clearly been taken with its overall performance over the year as a whole, including the entrenchment of Destiny as a major franchise and the marked excitement over the new Call of Duty (though we’re still waiting to see if its sales have halted the series’ slow decline).
Looking a little more deeply at the contest between Activision and EA, the very early lead which EA took in January was down to a fantastic earnings report and bullish new guidance from the company; but Activision reported its own excellent earnings in August, beating its guidance and reassuring investors with a move towards digital revenues, which allowed it to catch up with and eventually outpace EA’s growth. As the year ended, Activision announced a bevy of strategic moves (the acquisition of King, filling a major hole in its product portfolio, being a major one) which boosted its growth towards a spectacular year-end. Depending on how sales figures for Call of Duty hold up in December, it’s not impossible that the company will finish 2015 with double the valuation it had at the start of the year – but EA, with nearly 50 percent price growth, is far from shabby.
On the other side of the Atlantic, the only major publicly listed “traditional” publisher is Ubisoft on the Paris Exchange – and here we can see that while, again, the exchange wasn’t a dramatic performer for the year (up around 20 percent overall), Ubisoft’s value increase since September has been incredibly dramatic. Why? It’s not that Ubisoft has anything particularly dramatic on the market right now – Assassin’s Creed Syndicate, its biggest game for this autumn, is doing fine but hardly driving the kind of business that would see stock prices leap so high. No, that valuation leap has everything to do with corporate machinations, specifically the acquisition of shares in the firm by Vivendi – a move that was greeted with anger by Ubisoft boss Yves Guillemot, who views Vivendi as a predatory firm whose potential takeover is far from welcome. His shareholders, apparently, do not agree; interest from Vivendi (which also owned a majority stake in Activision Blizzard until the subsidiary bought out the bulk of its own shares in 2013) sent prices rocketing.
As a general rule we don’t put stock prices from different indices alongside one another, as the fundamentals of the markets are very different and the comparisons unfair, but with both the NASDAQ and the CAC-40 index of Parisian shares rolling along at a low, steady rate this year, Ubisoft’s performance is actually broadly comparable with the US publishers – so here’s a quick graph showing where the French firm now sits in context, in the wake of rumours of aggressive take-over. Yves Guillemot may not like it, but rumours of a takeover have propelled his firm into second place among the traditional publishers for 2015 share price growth.
How about Microsoft, the US’ console platform holder? In truth, there’s not much to be gleaned about Microsoft’s gaming business from its share price movements; the company’s expansive businesses in operating systems, office software and cloud computing are far more relevant to its share price than the Xbox. Apple, on the other hand, finds its share price almost directly wired to the iPhone, or at least to sentiment around the iPhone; this year its share price hasn’t moved much, despite setting new records with the iPhone division, suggesting that as with Microsoft, there’s not really a whole lot of connection between the parts of the business relevant to videogames in any way, and the share price itself. In Apple’s case, there’s a compelling case that the share price isn’t really wired to anything real or sensible whatsoever, seemingly jolting around on whims, rumours and idiocy – but for the sake of completeness, we’ve included a graph of the two “platform holders”, so feast your eyes before we move on to the mobile space.
If 2015 has been a great year for traditional publishers, it’s been – once again – an unassuming year at best for mobile-first companies. The biggest mover is Gameloft, which also belongs to the Guillemot family and is essentially a sister company to Ubisoft. There’s a theory that in the event of a genuinely hostile takeover effort, Ubisoft could quickly merge with Gameloft and thus dilute its shares and boost the Guillemots’ control – a strategy called a “poison pill” approach, although that may be neutered by Vivendi’s decision to buy large tranches of shares in both companies at the same time.
Aside from Gameloft, the biggest performer is King – which plateaus in early November with the announcement of Activision’s buyout, and will of course not feature in any charts for the coming year. The premium Activision is paying for the company means that its shares, moribund for most of the year, will end up doubling the gains of the NASDAQ in 2015; a nice bonus for its long-suffering shareholders, though if you’d held on to your shares since the IPO, you’d still be making a loss. Zynga, a company struggling to retain its once-held lustre, underperformed again this year, losing money both in dollar terms and against the NASDAQ index, while Glu Mobile, last year’s top mobile performer off the back of its success with the Kim Kardashian brand, had a very bumpy year. Its growth in 2014 carried on to the middle of 2015, with new celebrity licensing deals and good financials helping to nudge the stock price ever higher, but the market soured on Glu in August after a double whammy of reality check – poor quarterly earnings and weaker than expected projections perhaps reminded investors of what Glu’s management will have known all along – that the Kardashian success might not be as easy to replicate as simply sticking Britney Spears’ or Nicki Minaj’s face on the loading screen and rolling in the money all over again. Turning celebrity mobile games into a sustainable business is a tough ask, and fears over the risks involved saw the firm’s shares cancelling out their 2015 gains, and then some, in the back half of the year.
With the removal of King from the charts, that leaves only Gameloft, Glu and Zynga as publicly traded mobile publishers in the west – and while the huge number of Japanese mobile publishers on the Tokyo exchange do make up the numbers, the absence in the stock markets of top mobile players like Game of War publisher Machine Zone is very notable. Of course, to some degree that’s due to the blurring of the lines with traditional publishers; buying King makes Activision a major mobile publisher overnight, while Electronic Arts has also consistently done pretty well in mobile. Incidentally, it’s not just mobile which lacks some major players on the markets – Bethesda, one of 2015′s biggest publishers in traditional gaming, is a subsidiary of the privately held ZeniMax.
Contrasting the performance of mobile with traditional publishers suggests that in the US, at least, there’s little sign of the “biggest names in gaming” changing any time soon; mobile threats have been met or absorbed by the dominant publishers, and they’ve come out of a tough transition looking more healthy, and certainly more valuable, than ever before. That’s a very different story from the other side of the Pacific, as we’ll see when we get around to tackling Japan’s stocks later this week.
Benchmarks for Valve’s Steam machines are out and it does not look like the Linux powered OS is stacking up well against Windows.
According to Ars Technica the SteamOS gaming comes with a significant performance hit on a number of benchmarks.
The OS was put through Geekbench 3 which has a Linux version. The magazine used some mid-to-late-2014 releases that had SteamOS ports suitable for tests including Middle-Earth: Shadow of Mordor and Metro: Last Light Redux.
Both were intensive 3D games with built-in benchmarking tools and a variety of quality sliders to play with (including six handy presets in Shadow of Mordor’s case).
On SteamOS both games had a sizable frame rate hit. We are talking about 21- to 58-percent fewer frames per second, depending on the graphical settings. On our hardware running Shadow of Mordor at Ultra settings and HD resolution, the OS change alone was the difference between a playable 34.5 fps average on Windows and a 14.6 fps mess on SteamOS.
You would think that Valve’s own games wouldn’t have this problem, but Portal, Team Fortress 2, and DOTA 2 all took massive frame rate dips on SteamOS compared to their Windows counterparts.
Left 4 Dead 2 showed comparable performance between the two operating systems but nothing like what Steam thought it would have a couple of years ago.
Samsung has sold a large LCD display operation in order to concentrate full time on OLED-based products.
A report in Business Korea says that the facility in Cheonan, South Chungcheong Province, has shut down its L5 line, the fifth generation of LCD displays, and begun selling the equipment to other manufacturers.
The age of the equipment meant it was only suitable for notebook and small monitor displays. With OLED now rolling out in phones such as the recent Samsung Galaxy S6 Edge, and big-screen TVs, it seems that the company has decided to make a break with the past.
The Korean manufacturer sold off its fourth generation production line to a Chinese company last year. A spokesman for Samsung Display confirmed: “The company shut down the L5 line last month and is seeking companies that are willing to acquire idle equipment.”
Although the equipment and the products it produces may seem outdated, there is still a huge market for this stuff in lower end electronics. Some analysts believe that there are tens of billions of Korean Won in any sale. Ten billion Won is about £5.6m, which doesn’t sound nearly as much but is still better than poke in the eye.
The Cheonan factory is likely to be converted to make OLED products, with talk of deals for AMOLED phone displays for Huawei and even an acceleration of its on-again-off-again Ernie and Bert relationship with Apple said to be at the heart of the decision to ramp up production.
Samsung still operates three LCD production lines, but analysts question if this is the beginning of a move to OLED production only, and if so, what effect that will have on the company as demand for cheaper LCD screens continues to grow, with production ramping up in China.
Samsung has lost market share in the end user market with recent Galaxy products failing to sell as well as their predecessors. As such these component deals are the lifeblood of the business, with a contract to produce high-end screens for Apple alone worth billions.
Activision Blizzard has bought King Digital Entertainment for $5.9 billion, marking not only one of the largest acquisitions in videogame history but one of the largest deals ever made in the entertainment business. Comparing this to previous entertainment deals highlights just how extraordinary the figures involved are; the purchase price values King at significantly more than Marvel Entertainment (acquired by Disney for $4.2 billion), Star Wars owner Lucasfilm (Disney again, for $4.1 billion) and movie studio Metro-Goldwyn-Mayer (acquired by Sony for almost $5 billion). The price dwarfs the $1.5 billion paid by Japanese network SoftBank and mobile publisher GungHo for Supercell back in 2013 – though it’s not quite on the same scale as the $7.4 billion price tag Disney paid for Pixar, or in the same ballpark as the $18 billion-odd involved in the merger that originally created Activision Blizzard itself.
How is $5.9 billion justified? Well, it’s a fairly reasonable premium of 20% over the company’s share price – though if you’ve been holding on to King shares since its IPO in 2014, you’ll still be disappointed, as it’s far short of the $22.50 IPO price, or even the $20.50 that the shares traded at on their first day on the open market. The company’s share price has been more or less stable this year, but Activision’s offer still doesn’t make up for the various tumbles shares took through 2014.
A better justification, perhaps, lies in the scale of King’s mobile game business. The company is a little off its peak at the moment. Candy Crush Saga, its biggest title, is on a slow decline from an extraordinary peak of success, and other titles aren’t growing fast enough to make up for that decline, but it still recorded over half a billion monthly active users (MAUs) in its recently reported second quarter figures. In terms of paying users, the company had 7.6 million paying users each month – more than Blizzard’s cash cow, World of Warcraft, and moreover, the average revenue from each of those users was $23.26, far more than a World of Warcraft subscriber pays. King took in $529 million in bookings during the quarter, 81 per cent of it from mobile devices – a seriously appealing set of figures for a company like Activision, which struggles to get even 10 per cent of its revenues from mobile despite its constant lip-service to the platform.
In buying King, Activision instantly makes itself into one of the biggest players in the mobile space, albeit simply by absorbing the company that is presently at the top of the heap. It diversifies its bottom line in a way that investors and analysts have been crying out for it to do, reducing its reliance on console (still damn near half of its revenues) and on the remarkable-but-fading World of Warcraft, and bulking up its anaemic mobile revenues to the point of respectability. On paper, this deal turns Activision into a much more broad-based company that’s far more in line with the present trajectory of the market at large, and should assuage the fears of those who think Activision’s over-reliance on a small number of core franchises leaves it far more vulnerable than rivals like Electronic Arts.
That’s on paper. In practice, though, what has Activision just bought for $5.9 billion? That’s a slightly trickier question. The company is, unquestionably, now the proud owner of one of the most talented and accomplished creators and operators of mobile games in the world. King’s experience of developing, marketing and, crucially, running mobile games at enormous scale, and the team that accomplished all of that, is undoubtedly valuable in its own right. Those are talents that Activision didn’t have yesterday, but will have tomorrow. Are those talents worth $5.9 billion, though? Without wishing for a moment to cast doubt on the skills of those who work at King, no, they’re not. $5.9 billion isn’t “acquihire” money, and when that’s the kind of cash involved we simply can’t think of this as an “acquihire” deal. Activision didn’t pay that kind of money in order to get access to the talent and experience assembled at King. It paid for King itself, for its ongoing businesses and its IP.
Open the shopping bag, and you might struggle to understand how the contents reach $5.9 billion at the till. King has one remarkable, breakthrough, enormously successful IP – Candy Crush Saga, which still accounts (not including heavily marketed spin-off title Candy Crush Soda Saga) for 39 per cent of the company’s gross bookings. No doubt deeply aware of the danger of being over-reliant on revenues from this single title, King has worked incredibly hard to find success for other games in its portfolio. But even its great efforts in this regard have failed to compensate for falling revenues from Candy Crush, and it’s notable that a fair amount of the “non-Candy Crush Saga” revenue that the company boasts actually comes from Candy Crush Soda Saga. Other titles like Farm Heroes Saga and Pet Rescue Saga are no doubt profitable and successful in their own right, and King would be a sustainable business even without Candy Crush. But it would be a much, much smaller business, and certainly not a $5.9 billion business.
Despite being generally bullish about King’s prospects, then, it’s hard to avoid the feeling that the company has done incredibly well out of this acquisition. The undoubted talent and experience of its teams aside, this is, realistically, a company with one IP worth paying for, and unlike Star Wars or the Avengers, Candy Crush is a very new IP whose longevity is entirely untested and whose potential for merchandising or cross-media ventures is dubious at best. King has done better than most of its rivals in the mobile space at applying some of the lessons of its biggest hit to subsequent games and making them successful, but it shares with every other mobile developer the same fundamental problem: none of them has ever worked out how to bottle the lightning that creates a mega-hit and repeat the success down the line. Absent of another Candy Crush game, the odds are that King’s business would slowly deflate as the air escaped from the Candy Crush bubble, until the company’s sustainable (and undoubtedly profitable) core was what was left. Selling up to Activision at a healthy premium while the company is still “inflated” by the likely unrepeatable success of Candy Crush is a fantastic move for the company’s management and investors, but rather less so for Activision.
Perhaps, though, the whole might be more than the sum of its parts? Couldn’t Activision, holders of some of the world’s favourite console and PC game IP, work with King to leverage that IP and the firm’s reach in traditional games, creating new business at the interaction of their respective specialisations? That’s a big part of what made Pixar so valuable to Disney, for example; the match between their businesses was of vital importance to that deal, and the same can broadly be said for Disney’s other huge acquisitions, Lucasfilm and Marvel. (SoftBank’s purchase of Supercell, by comparison, was rather more of a straightforward market-share land grab.) What could this new hybrid, Activision Blizzard King, hope to achieve in terms of overlap that enhances the value of its various component parts?
Certainly, Activision has some properties that could work on mobile (I’m thinking specifically of Skylanders here, though others may also fit); some Blizzard properties could also probably work on mobile, though I very much doubt that Blizzard (which retains a strong degree of independence within the group) is a good cultural fit for King, and is deeply unlikely to work with it in any manner which gives up the slightest creative control over its properties. King’s properties, meanwhile, don’t look terribly enticing as console or PC games, and conversions done this way would almost certainly defeat the entire purpose of the deal anyway, since the objective is to bolster Activision’s mobile business. The prospect of a mobile game based on Call of Duty or another major console IP may seem superficially interesting, but we’ve been down this road before and it didn’t lead anywhere impressive. Sure, core gamers are on mobile too, but they’ve by and large been nonplussed at best and outraged at worst by the notion of engaging with mobile versions of their console favourites. It’s genuinely hard to piece together the various IPs and franchises owned by King and Activision and see how there’s any winning interaction between them on the table.
This is what makes me keep returning to those other mega-deals – to Star Wars, to Marvel, to Pixar – and finding the contrast between them and Activision / King so extraordinary. Each of those multi-billion dollar deals was carried out by Disney with a very specific, long-term plan in mind that would leverage the abilities of both acquirer and acquired to create something far more than the sum of its parts. Each of those deals had a very clear raison d’être beyond simply “it’ll make us bigger.” Each of those companies fitted with the new parent like a piece of a puzzle. King’s only role in Activision’s “puzzle” is that they do mobile, and Activision sucks at mobile; there’s no sense of any grand plan that will play out.
In all likelihood, Activision has just paid a huge premium for a company which is past the peak of its greatest hit title and into a period of managed decline, not to mention a company with which its core businesses simply don’t fit in any meaningful way. King’s a great company in many respects, but its acquisition isn’t going to go down as a great deal for Activision – and we can expect to see plenty of that $5.9 billion being frittered away in goodwill write-downs over the coming few years.
In the mobile gaming space, change occurs quickly and often. In the seven years since the App Store revitalised a previously disjointed and granular market, almost every important aspect of production, distribution, marketing and consumption has been upturned several times. Smart developers learned to move quickly, primed for instant response and rapid iteration, in order to keep pace with a constantly shifting environment.
For mobile’s biggest companies, Kabam’s Aaron Loeb says, this way of thinking no longer suits the marketplace. “Five years ago mobile could best be characterised as a market where the best attribute you could have as a developer was speed. Today, the best attribute you can have as a developer is reliability. That requires different studios, that requires different leadership, and that requires different ways of thinking about steering development.”
Loeb left a senior position at Electronic Arts for Kabam in June 2014, the first in a run of major hires that also saw Zynga’s Mike Verdu and EA’s Nick Earl arrive at the company. Kevin Chou, Kabam’s CEO, had steered the company from a dependence on Facebook to its own web platform, Kabam.com, and then from there to mobile, the company emerging stronger and more successful each time. Loeb, Verdu and Early were hired in a conscious attempt to pivot once again, preparation for what Chou believed soon become a more settled and predictable place to do business.
Broader product strategies used to work, Loeb says, echoing an idea he expressed in a talk that proved to be the highlight of DICE Europe last month. Ever since the first games with in-app purchases appeared on the App Store in North America and Europe five years ago, the collective confusion over what constituted a ‘good’ product encouraged a “throw spaghetti against the wall and see what sticks” culture. Player taste and behaviour has changed, Loeb says, and the companies with the will – and the resources – to monitor and understand those factors have a clearer idea about the qualities necessary for success in mobile.
A company like Kabam can now place its bets with greater confidence than ever before. Those bets will be fewer, bolder and bigger, and they will ultimately lead to what Loeb has called – on his Linkedin profile, no less – “the next generation of free-to-play games.”
“Players are demanding games with more compelling loops, a richer sense of gameplay satisfaction,” he says. “The historical notion of what that means – from the console industry – is deep immersion, 80-hours of gameplay, you can disappear into your man or woman cave and never come up for air. That is not great mobile gameplay.
“Games that are purely versions of Solitaire – minimal attention, brain-clearing exercises – will always have their place in mobile, but more sophisticated mobile consumers want games they can have meaningful relationships with. So characters they care about, and other players they can care about, in ways both good and ill.
“The other thing that will be really prevalent will be an emerging and changing sense of what people will pay for, and what works in free-to-play… I can’t give you an exact answer to [what that will be], and not because I secretly know the answer and won’t tell you. It’s because it’s happening right now, and it is one of the most interesting things happening right now.”
Certain aspects of the answer can be found in two Kabam releases from the recent past: Marvel Contest of Champions, which is still among the top-grossing iOS games almost a year after launch, and Spirit Lords, which launched to considerable fanfare in May this year. Spirit Lords, in particular, displayed an uncommon degree of ambition: a new IP with lavish production values, an all-star development team, and no pre-existing brand awareness to use as a crutch.
“The point is that we’re taking the best design elements of those traditional games that our team members have been building for years – Diablo, Dragon Age, real classics – and bring them truly into mobile,” Loeb says. “We’re not trying to recreate your love of Diablo in the Nineties. We’re trying to create a new language of games for mobile.”
Such things don’t come cheap, of course, and that kind of investment demands a successful launch. Only two or three years ago, I heard very smart people advise mobile developers to launch a minimum viable product; to use the live, reactive nature of the App Store to shape what those games would become. With a game like Spirit Lords, however, there isn’t even a hint of uncertainty, no optimistic air of ‘we’ll see how it goes.’ To use Loeb’s own comparison, Kabam wasn’t throwing spaghetti at the wall with this one.
“That’s 100 per cent accurate. Kabam has engaged in a significant shift, and I believe that the whole industry will engage in that shift,” he says. “It is these launches that set the trajectory of a title. The launch is a big deal in mobile now, in a way that it wasn’t a few years ago. You had the sense then that you could build a business over two years. You still can do that, by the way, but you don’t get two chances to make a first impression.
“We are certainly thinking about how to make a very compelling, very satisfying experience at launch, which then continues to grow after launch… We don’t agree with [MVP strategy] any more. We believe we can look at the market now, and see the tastes of the customer and the player, and we can determine at some root level what is a good game and what is a bad game. That doesn’t mean that if you release a good game it will succeed – it’s still an incredibly competitive market – but at the very least you can have more influence on the outcome than treating it all like a coin toss.”
This kind of thinking is now commonplace among the big mobile developers. Earlier this month, Machine Zone’s Gabriel Leydon predicted that the most successful companies would soon be releasing just one or two games a year, with more and more money coming from an ever decreasing slate of products. The market remains crowded and chaotic, but the way Kabam, Machine Zone and others like them are setting up for the future will impose a kind of order – one not dissimilar to that which arose due to the rocketing costs of AAA console development, when many so studios discovered that they could no longer compete on such an uneven field of play.
“The launch is a big deal in mobile now, in a way that it wasn’t a few years ago”
“It is too early to say it’s gonna be the exact same phenomenon as console, and the economic factors of the industry are different enough that I don’t think it will be the exact same,” Loeb says. “In part, the middle fell out of console because the consumer for small and mid-sized games left to go to mobile and free-to-play. That was a pretty big part of that phenomenon.”
Whether those developers left through choice or necessity is a crucial distinction, of course. As is the question of where, exactly, those developers will turn if this age of “fewer, bigger and bolder games” has a similar fallout to the consolidation of high-end development in the last console generation. Loeb certainly doesn’t dismiss it as a possibility, and he admits that the companies worst affected by the shift will be further down the chain. With console, the middle of the market dropped away. With this next phase of mobile, it will be the little guys.
“The way that mobile and free-to-play as they currently stand will be disrupted is not completely clear,” he says. “The very low end of mobile game development seems likely to go away, or it will truly become like hoping to get hit by lightning. The developer who spends $20,000 throwing something on the marketplace really ought to put that $20,000 in a mutual fund. That’s just not very likely to produce any outcome.
“There’s so much competition, and so much quality product being created, that it will be very, very hard for those games. Harder than it has ever been.”
Apparenlty, the total gaming hardware marker in 2014 was more than $24,936 billion in 2014 and it slightly declined in 2015 to $24,684 billion. However, in 2016 it looks like that the gaming hardware market will increase to $26.118 billion and it will reach $28.253 billion in 2017.
However the record year for gaming hardware will be three years from now as in 2018 JPR believes that the gaming hardware market is set to grow to $30.092. Of course by then we will have forgotten that Mr Peddie made his prediction so if he gets it wrong no one will remember.
|PC Gaming Hardware Market||2014||2015||2016||2017||2018|
|Total – numbers in millions||$24,936||$24,684||$26,118||$28,253||$30,092|
In his report, Ted Pollak, Senior Analyst at JPR wrote
“This cycle, unlike any for the past 15 years, will inspire gamers to upgrade their displays. 27 inch and larger 4K/UHD displays are reaching mass market pricing levels and produce an incredible experience allowing much wider field of view and greater detail. The financial outlay for these display upgrades alone is billions of dollars over the coming years”.
Jon Peddie, President of JPR adds
“In addition to the cost of the new display technology, gamers are going to need the computing muscle to drive Triple A game engines at over 60 frames per second, and that horsepower comes at a premium”. Sixty frames per second is considered the gold standard in PC gaming and many prefer even faster speeds, at least twice that number if VR is involved. ”
It is interesting to note that the PC gaming peripherals market is projected to make $3.6 billion in 2015. These are cheaper and easier to change and gamers wear out mice, keyboards and headset much faster than other components.
JPR believes that mainstream gaming notebook and desktop will have to fight with TV gaming optimised PCs including the ones from Alienware iBuyPower and a few others. We do agree that many gamers will be changing their monitors to at least 25×14 or the full 4K experience. To run high end triple A games at 4K you would need a lot of gaming power and a card such as Greenland with HBM 2 from AMD or Pascal high end class from Nvidia. Both of these will arrive in 2016. Gamers who want over 60 FPS in current high end titles might want to get two of the Geforce GTX 980 or higher end cards or a dual Fury from AMD.
If you want the VR glasses in 2016 you will need double the power but we will have to see the adoption rate of these gaming devices before we think that will take off. VR gaming will become significant segment eventually but definitely not overnight.
Toshiba Corp is offload its image sensor business to Sony Corp for around 20 billion yen ($164.68 million) as part of a restructuring plan laid out earlier this year, sources with knowledge of the deal said on Saturday.
Toshiba, whose businesses range from laptops to nuclear power, is undergoing a restructuring after revelations this year that it overstated earnings by $1.3 billion going back to fiscal 2008/09.
Image sensors, which are used in digital cameras and smartphones, are part of Toshiba’s system LSI semiconductor business. Toshiba plans to sell its image sensor manufacturing plant in Oita, southern Japan, and pull out of the sensor business altogether, said the sources, who declined to be identified.
The sale is likely to be finalized soon, the sources said.
Toshiba is considering several options for its system LSI semiconductor business and its discrete semiconductor business and that debate is ongoing, a Toshiba official said when contacted.
An official from Sony declined to comment.
Masashi Muromachi, who became Toshiba’s CEO following the accounting scandal, has promised to restructure lower-margin businesses.
The deal for the image sensor business would be the beginning of the restructuring, Nikkei reported earlier on Saturday.
Sony is already a dominant player in the image sensor market, with its products used in phones made by China’s Xiaomi and India’s Micromax Informatix Ltd.
Hideo Kojima has left the building. The New Yorker has confirmed that the famous game creator’s last day at Konami has come and gone, with a farewell party attended by colleagues from within and without the country – but not, notably, by Konami’s top brass. Only a couple of months after his latest game, Metal Gear Solid V: The Phantom Pain, clocked up the most commercially successful opening day’s sales of any media product in 2015, Kojima has left a studio facing shutdown – its extraordinary technology effectively abandoned, its talent scattered, seemingly unwanted, by a company whose abusive and aggressive treatment of its staff has now entered the annals of industry legend.
It’s not exaggerating to say that an era came to a close as Kojima walked out the door of the studio that bore his name for the last time. For all of Konami’s the-lady-doth-protest-too-much claims that it’s not abandoning the console market, actions matter far more than PR-moderated words, and shutting down your most famous studio, severing ties with your most successful creator in the process, is an action that shouts from the rooftops. Still, there’s some truth to Konami’s statements; it’s unlikely to abandon the console versions of Winning Eleven / Pro Evolution Soccer, or of Power Pro Baseball, any time soon, though more and more of the firm’s focus will be on the mobile incarnations of those franchises. The big, expensive, risky and crowd-pleasing AAA titles, though? Those are dead in the water. Metal Gear Solid, Silent Hill (whose reincarnation, with acclaimed horror director Guillermo del Toro teaming up with Kojima at the helm, is a casualty of this change of focus), Suikoden, Castlevania, Contra… Any AAA title in those franchises from now on will almost certainly be the result of a licensing deal, not a Konami game.
One can criticise the company endlessly for how this transition has been handled; Konami has shown nigh-on endless disrespect and contempt for its creative staff and, Kojima himself aside, for talented, loyal workers who have stuck by the firm for years if not decades. It richly deserves every brickbat it’s getting for how unprofessionally and unpleasantly it’s dealt with the present situation. It’s much, much harder to criticise the company for the broader strokes of the decisions being made. Mobile games based on F2P models are enormous in Japan, not just with casual players but with the core audience that used to consume console games. The transition to the “mid-core” that mobile companies talk about in western territories is a reality in Japan, and has been for years; impressively deep, complex and involved games boast startling player numbers and vastly higher revenue-per-user figures than most western mobile games could even dream of. Konami, like a lot of other companies, probably expects that western markets will follow the same path, and sees a focus on Japan’s mobile space today as a reasonable long-term strategy that will position it well for tomorrow’s mobile space in the west.
Mobile is the right business to be in if you’re a major publisher in Japan right now. It’s where the audience has gone, it’s where the revenues are coming from, and almost all of the cost of a mobile hit is marketing, not development. Look at this from a business perspective; if you want to develop a game on the scale of Metal Gear Solid V, you have to sink tens of millions of dollars (the oft-cited figure for MGSV is $80 million) into it before it’s even ready to be promoted and sold to consumers. That’s an enormous, terrifying risk profile; while the studio next door is working on mobile games that cost a fraction of that money to get ready for launch, with the bulk of the spend being in marketing and post-launch development, which can be stemmed rapidly if the game is underperforming badly. Sure, mobile games are risky as all hell and nobody really knows what the parameters for success and failure are just yet, but with the time and money taken to make a Metal Gear Solid, you can throw ten, twenty or thirty mobile games at the wall and see which one sticks. The logic is compelling, whether you like the outcome or not.
Here’s what nobody, honestly, wants to hear – that logic isn’t just compelling for Konami. Other Japanese publishers are perhaps being more circumspect about their transitions, but don’t kid yourself; those transitions are happening, and Konami will not be the last of the famous old publishers to excuse itself and slip away from the console market entirely. When Square Enix surveys the tortured, vastly expensive and time-consuming development process of its still-unfinished white elephant Final Fantasy XV, and then looks at the startling success it’s enjoyed with games like Final Fantasy Record Keeper or Heavenstrike Rivals on mobile, what thoughts do you think run through the heads of its executives and managers? Do you think Sega hasn’t noticed that its classic franchises are mostly critically eviscerated when they turn up as AAA console releases, but perform very solidly as mobile titles? Has Namco Bandai, a firm increasingly tightly focused on delivering tie-in videogames for Bandai’s media franchises, not noticed the disparity between costs and earnings on its console games as against its mobile titles? And haven’t all of these, and others besides, looked across from their TGS stands to see the gigantic, expensive, airship-adorned stands of games like mobile RPG GranBlue Fantasy and thought, “we’re in the wrong line of work”?
Kojima isn’t the first significant Japanese developer to walk out of a publisher that no longer wants his kind of game – but he’s the most significant thus far, and he’s certainly not going to be the last. The change that’s sweeping through the Japanese industry now is accelerating as traditional game companies react to the emergence of upstarts grabbing huge slices of market share; DeNA and Gree were only the first wave, followed now by the likes of GungHo, CyGames, Mixi and Colopl. If you’re an executive at a Japanese publisher right now, you probably feel like your company is already behind the curve. You’ve studied plenty of cases in business school in which dominant companies who appeared unassailable ended up disappearing entirely as newcomers took the lion’s share of an emerging market whose importance wasn’t recognised by the old firms until it was too late. You go home every evening (probably around midnight – it’s a Japanese company, after all) and eat your microwave dinner in front of TV shows whose ad breaks are packed with expensive commercials for mobile games from companies that hadn’t even appeared on your radar until a year or two ago, and none from the companies you’d always considered the “key players” in the industry. You’re more than a little bit scared, and you really, really want your company to be up to speed in mobile, like, yesterday – even if that means bulldozing what you’re doing on console in the process.
This is not entirely a bleak picture for fans of console-style games. Japanese mobile games really are pushing more and more towards mid-core and even hardcore experiences which, though the monetisation model may be a little uncomfortable, are very satisfying for most gamers; the evolution of those kinds of games in the coming years will be interesting to watch. Still, it will be a very long time before there’s a mobile Metal Gear Solid or a mobile Silent Hill; some experiences just don’t make sense in the context of mobile gaming, and there is a great deal of justification to the fears of gamers that this kind of game is threatened by the transition we’re seeing right now.
I would offer up two potential silver linings. The first is that not all companies are in a position to break away from console (and PC) development quite as dramatically as Konami has done. Sega, for example, is tied to those markets not least by its significant (and very successful) investments in overseas development studios, many of which have come about under the auspices of the firm’s overseas offices. Square Enix is in a similar position due to its ownership of the old Eidos studios and franchises, along with other western properties. Besides, despite the seemingly permanent state of crisis surrounding Final Fantasy XV, the firm likely recognises that the Final Fantasy franchise requires occasional major, high-profile console releases to keep it relevant, even if much of its profit is found in nostalgic retreads of past glories. Capcom, meanwhile, is deeply wedded to console development – it’s a much smaller company than the others and perhaps more content to stick to what it knows and does well, even if console ends up as a (large) niche market. (Having said that, if a mobile version of Monster Hunter springs to the top of the App Store charts, all bets are probably off.)
“Hideo Kojima left Konami because he wants to make a style of game that doesn’t fit on mobile F2P – and that’s, in the long run, probably a good thing”
The other silver lining is perhaps more substantial and less like cold comfort. Hideo Kojima left Konami because he wants to make a style of game that doesn’t fit on mobile F2P – and that’s, in the long run, probably a good thing. He joins a slow but steady exodus of talent from major Japanese studios over the past five years or more. The kind of games which people like Kojima – deeply involved with and influenced by literature, film and critical theory – want to make don’t fit with publishers terribly well any more, but that doesn’t mean those people have to stop making those games. It just means they have to find a new place to make them and a new way to fund them. Kojima’s non-compete with Konami supposedly ends in a few months and then I suspect we’ll hear more about what he plans; but plenty of former star developers from publishers’ internal studios have ended up creating their own independent studios and funding themselves either through publisher deals or, more recently, through crowdfunding. Konami’s never likely to make another game like Castlevania: Symphony of the Night, but that doesn’t stop Koji Igarashi from putting Bloodstained: Ritual of the Night on Kickstarter. Sega knocked Shenmue on the head, but a combination of Sony and Kickstarter has sent Yu Suzuki back to work on the franchise. Keiji Inafune also combined crowdfunding money with publisher funding for Mighty No. 9. Perhaps the most famous and successful of all breakaways from the traditional publishing world, though, is of a very different kind; Platinum Games, which has worked with many of the world’s top publishers in recent years while retaining its independence, is largely made up of veterans of Capcom’s internal studios.
Whichever of those avenues Kojima ends up following – the project-funding style approach of combining crowdfunding and publisher investment, or the Platinum Games approach of founding a studio and working for multiple publishers – there is no question of him walking away from making the kind of games he loves. Not every developer has his sway, of course, and many will probably end up working on mobile titles regardless of personal preference – but the creation of Japanese-style console and PC games isn’t about to end just because publishers are falling over themselves to transition to mobile. As long as the creators want to make this kind of game, and enough consumers are willing to pay for them (or even to fund their development), there’s a market and its demands will be filled. The words “A Hideo Kojima Game” will never appear on the front of a Konami title again; but they’ll appear somewhere, and that’s what’s truly important in the final analysis.
After years of losses, Chief Executive Kazuo Hirai has engineered a successful restructuring drive at Sony, with recent results showing improvement thanks to cost cuts, an exit from weak businesses such as PCs, as well as strong sales of image sensors and videogames. But its smartphone business has been slow to turn around.
“We will continue with the business as long as we are on track with the scenario of breaking even next year onwards,” Hirai told a group of reporters on Wednesday. “Otherwise, we haven’t eliminated the consideration of alternative options.”
Sony and other Japanese electronics makers have struggled to compete with cheaper Asian rivals as well as the likes of Apple Inc and Samsung Electronics.
Sony phones including its Xperia-branded smartphones held only 17.5 percent of the market in Japan and less than 1 percent in the North America, according to company data last year.
The electronics giant in July lowered its forecast for its mobile communications unit to an operating loss of 60 billion yen in the current fiscal year from an earlier estimate of a 39 billion yen loss.
“I do have a feeling that a turnaround in our electronics business has shown progress. The result of three years of restructuring are starting to show,” he said. “But we still need to carry out restructuring in smartphones.”