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.
Nintendo has formed a comprehensive new alliance with DeNA that will make every one of the company’s famous IPs available for mobile development.
The bedrock of the deal is a dual stock purchase, with each company buying ¥22 billion ($181 million) of the other’s treasury shares. That’s equivalent to 10 per cent of DeNA’s stock, and 1.24 per cent of Nintendo. The payments will complete on April 2, 2015.
What this will ultimately mean for the consumer is Nintendo IP on mobile, “extending Nintendo’s reach into the vast market of smart device users worldwide.” There will be no ports of existing Nintendo games, according to information released today, but, “all Nintendo IP will be eligible for development and exploration by the alliance.” That includes the “iconic characters” that the company has guarded for so long.
No details on the business model that these games and apps will be released under were offered, though Nintendo may well be reluctant to adopt free-to-play at first. The information provided to the press emphasised the “premium” experiences Nintendo currently offers on platforms like Wii U and 3DS. Admittedly, that could be interpreted in either direction.
However, Nintendo and DeNA are planning an online membership service that will span Nintendo consoles, PC and smart devices. That will launch in the autumn this year.
This marks a significant change in strategy for Nintendo, which has been the subject of reports about plans to take its famous IPs to mobile for at least a year. Indeed, the company has denied the suggestion on several occasions, even as it indicated that it did have plans to make mobile a part of its core strategy in other ways.
Analysts have been offering their reflections on the deal, with the response from most being largely positive.
“Nintendo’s decision to partner with DeNA is a recognition of the importance of the games app audience to the future of its business,” said IHS head of gaming Piers Harding-Rolls. “Not only is there significant revenue to be made directly from smartphone and tablet consumers for Nintendo, app ecosystems are also very important in reaching new customers to make them aware of the Nintendo brand and to drive a new and broader audience to its dedicated console business. Last year IHS data shows that games apps were worth $26 billion in consumer spending globally, with handheld console games worth only 13 per cent of that total at $3.3 billion.
“The Nintendo-DeNA alliance is a good fit and offers up a number of important synergies for two companies that are no longer leaders in their respective segments.
“DeNA remains one of the leading mobile games company’s in Japan and, we believe, shares cultural similarities with Nintendo, especially across its most popular big-brand content. The alliance gives Nintendo access to a large audience in its home market, which remains very important to its overall financial performance. Japanese consumers spend significantly more per capita on mobile games than in any other country and it remains the biggest market for both smartphone and handheld gaming. While the partnership gives Nintendo immediate potential to grow its domestic revenues through this audience, gaining access to DeNA’s mobile expertise is important too to realise this potential.
“This alliance makes commercial sense on many levels – the main challenge will be knitting together the cultures of both companies and aligning the speed of development and iteration that is needed in the mobile space with Nintendo’s more patient and systematic approach to games content production. How the new games are monetised may also provide a challenge considering the general differences in models used in retail for Nintendo and through in-app purchases for DeNA.”
In a livestreamed press conference regarding the DeNA deal, Nintendo’s Satoru Iwata reassured those in attendance that the company was still committed to “dedicated video game systems” as its core business. To do that, he confirmed that the company was working on a new console, codenamed “NX”.
“As proof that Nintendo maintains strong enthusiasm for the dedicated game system business let me confirm that Nintendo is currently developing a dedicated game platform with a brand new concept under the development codename NX,” he said.
“It is too early to elaborate on the details of this project but we hope to share more information with you next year.”
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.
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.
The security of the employees of Phantom Dust developer Darkside Game Studios is in doubt, after Microsoft decided to sever all professional ties to the studio.
Phantom Dust is a remake of an Xbox game from 2004, which was designed by Yukio Futatsugi, the creator of Panzer Dragoon. Darkside’s project was unveiled at E3 last year as an exclusive title for the Xbox One, but whatever agreement existed between the studio and Microsoft has been terminated.
Here’s the official line: “Microsoft partnered with Darkside Game Studios in the development of Phantom Dust, but our working relationship has now ended. We have great respect for their studio and their work in the industry.
“While we do not have anything new to share on Phantom Dust at this time, we can confirm that development of the title continues. We look forward to sharing more details on the game as we get closer to release.”
Darkside, which is based in Florida, has contributed to the development of a host of major releases, including a couple of Xbox exclusives: Sunset Overdrive, Gears of War: Judgment, the Borderlands franchise, the Bioshock franchise; it’s a solid track record, albeit entirely composed of contract work, and Phantom Dust was to be its first solo project.
However, the “respect” Microsoft has for that track record is now the subject of suspicion, with several sources from within Darkside claiming that the company has been forced to layoff its entire staff – around 50 people.
“The executives who saw it were impressed and as late as this morning gave our team every indication that the project was on solid ground,” one of the sources said to Kotaku. “Yet we got the phone call today that someone up on high who in all likelihood wasn’t even aware of the game in detail shut it down.”
The notion that the alleged termination of Darkside’s working relationship with Microsoft was sudden is reinforced by the studio’s recruitment page, which advertised six open positions as recently as the start of January. Among the perks listed there, one stands out: “Working with major publishers.”
Microsoft offered no comment on the situation at Darkside, but we are pursuing the studio’s management for clarification.
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.
Nintendo is heading back to black, with the company’s financial announcements this week revealing that it’s expecting to post a fairly reasonable profit for the full year. For a company that’s largely been mired in red ink since the end of the glory days of the Wii, that looks like pretty fantastic news; but since I was one of the people who repeatedly pointed out in the past when Nintendo’s quarterly losses were driven by currency fluctuations, not sales failures, it’s only fair that I now point out that quite the reverse is true. The Yen has fallen dramatically against the Dollar and the Euro in recent months, making Nintendo’s overseas assets and sales much more valuable in its end-of-year results – and this time, that’s covering over the fact that the company has missed its hardware sales targets for both the 3DS and the Wii U.
In short, all those “Nintendo back in profit” headlines aren’t really worth anything more than the “Nintendo makes shock loss” headlines were back when the Yen was soaring to all-time highs a few years ago. The company is still facing the same tough times this week that it was last week; the Wii U is still struggling to break 10 million units and the 3DS is seeing a major year-on-year decline in its sales, having faltered significantly after hitting the 50 million installed base mark.
In hardware terms, then, Nintendo deserves all the furrowed brows and concerned looks it’s getting right now. Part of the problem is comparisons with past successes, of course; the Wii shipped over a million units and the DS, an absolute monster of a console, managed over 150 million. In reality, while the Wii U is having a seriously hard time in spite of its almost universally acclaimed 2014 software line-up, the 3DS isn’t doing badly at all; but it can’t escape comparison with its record-breaking older sibling, naturally enough.
Plenty of commentators reckon they know the answer to Nintendo’s woes, and they’ve all got the same answer; the company needs to ditch hardware and start selling its games on other platforms. Pokemon on iOS! Smash Bros on PlayStation! Mario Kart on Xbox! Freed from the limited installed base of Nintendo’s own hardware – and presumably, in the case of handheld titles, freed to experiment with new business models like F2P – the company’s games would reach their full potential, the expensive hardware division could be shut down and everyone at Nintendo could spend the rest of their lives blowing their noses on ¥10,000 notes.
I’m being flippant, yes, but there’s honestly not a lot more depth than that to the remedies so often proposed for Nintendo. I can’t help but find myself deeply unconvinced. For a start, let’s think about “Nintendo’s woes”, and what exactly is meant by the doom and gloom narrative that has surrounded the company in recent years. That the Wii U isn’t selling well is absolutely true; it’s doing better than the Dreamcast did, to pick an ominous example, but unless there’s a major change of pace the console is unlikely ever to exceed the installed base of the GameCube. Indeed, if you treat the Wii as a “black swan” in Nintendo’s home console history, a flare of success that the company never quite figured out how to bottle and repeat, then the Wii U starts to look like a continuation of a slow and steady decline that started with the Nintendo 64 (a little over thirty million consoles sold in total) and continued with the GameCube (a little over twenty million). That the 3DS is struggling to match the pace and momentum of the DS is also absolutely true; it’s captured a big, healthy swathe of the core Nintendo market but hasn’t broken out to the mass market in the way that the DS did with games like Brain Training.
Yet here’s a thing; in spite of the doom and gloom around downward-revised forecasts for hardware, Nintendo was still able to pull out a list of this year’s million-plus selling software that would put any other publisher in the industry to shame. The latest Pokemon games on 3DS have done nearly 10 million units; Super Smash Bros has done 6.2 million on 3DS and 3.4 million on the Wii U. Mario Kart 8 has done almost five million units, on a console that’s yet to sell 10 million. Also selling over a million units in the last nine months of 2014 on 3DS we find Tomodachi Life, Mario Kart 7 (which has topped 11 million units, life to date), Pokemon X and Y (nearly 14 million units to date), New Super Mario Bros 2 (over 9 million), Animal Crossing: New Leaf (nearly 9 million) and Kirby: Triple Deluxe. The Wii U, in addition to Mario Kart 8 and Super Smash Bros, had million-plus sellers in Super Mario 3D World and Nintendo Land.
That’s 12 software titles from a single publisher managing to sell over a million units in the first three quarters of a financial year – a pretty bloody fantastic result that only gets better if you add in the context that Nintendo is also 2014′s highest-rated publisher in terms of critical acclaim. Plus, Nintendo also gets a nice cut of any third-party software sold on its consoles; granted, that probably doesn’t sum up to much on the Wii U, where third-party games generally seem to have bombed, but on the 3DS it means that the company is enjoying a nice chunk of change from the enormous success of Yokai Watch, various versions of which occupied several slots in the Japanese software top ten for 2014, among other successful 3DS third-party games.
Aha, say the advocates of a third-party publisher approach for Nintendo, that’s exactly our point! The company’s software is amazing! It would do so much better if it weren’t restrained by only being released on consoles that aren’t all that popular! Imagine how Nintendo’s home console games would perform on the vastly faster-selling PS4 (and imagine how great they’d look, intones the occasional graphics-obsessive); imagine how something like Tomodachi Life or Super Smash Bros would do if it was opened up to the countless millions of people with iOS or Android phones!
Let’s take those arguments one at a time, because they’re actually very different. Firstly, home consoles – a sector in which there’s no doubt that Nintendo is struggling. The PS4 has got around twice the installed base of the Wii U after only half the time on the market; it’s clear where the momentum and enthusiasm lies. Still, Super Smash Bros and Mario Kart 8 managed to sell several million copies apiece on Wii U; in the case of Mario Kart 8, around half of Wii U owners bought a copy. Bearing in mind that Nintendo makes way more profit per unit from selling software on its own systems than it would from selling it on third-party consoles (where it would, remember, be paying a licensing fee to Sony or Microsoft), here’s the core question; could it sell more copies of Mario Kart 8 on other people’s consoles than it managed on its own?
If you think the answer to that is “yes”, here’s what you’re essentially claiming; that there’s a large pent-up demand among PlayStation owners for Mario Kart games. Is there really? Can you prove that, through means other than dredging up a handful of Reddit posts from anonymous people saying “I’d play Nintendo games if they were 1080p/60fps on my PS4″? To me, that seems like quite a big claim. It’s an especially big claim when you consider the hyper-competitive environment in which Nintendo would be operating on the PS4 (or Xbox One, or both).
Right now, a big Nintendo game launching on a Nintendo console is a major event for owners of that console. I think Nintendo launches would still be a big event on any console, but there’s no doubt that the company would lose focus as a third-party publisher – sure, the new Smash Bros is out, but competing for attention, pocket money and free time against plenty of other software. It’s not that I don’t think Nintendo games could hold their own in a competitive market, I merely don’t wish to underestimate the focus that Nintendo acquires by having a devoted console all of their own underneath the TVs of millions of consumers – even if its not quite the number of millions they’d like.
How about the other side of the argument, then – the mobile games aspect? Nintendo’s position in handheld consoles may not be what it used to be, but the 3DS has roundly trounced the PlayStation Vita in sales terms. Sure, iPhones and high-end Android devices have much bigger installed bases (Apple shifted around 75 million iPhones in the last quarter, while the lifetime sales of the 3DS are only just over 50 million), but that comparison isn’t necessarily a very useful one. All 50 million 3DS owners bought an expensive device solely to play games, and the lifetime spend on game software of each 3DS owner runs into hundreds of dollars. The “average revenue per user” calculation for Pokemon on the 3DS is easy; everyone paid substantial money for the game up front.
By comparison, lots and lots of iOS and Android users never play games at all, and many of those who play games never pay for them. That’s fine; that’s the very basis of the F2P model, and games using that model effectively can still make plenty of money while continuing to entertain a large number (perhaps even a majority) of players who pay nothing. Still, the claim that moving to smartphones is a “no-brainer” for Nintendo is a pretty huge one, taken in this context. The market for premium, expensive software on smartphones is very limited and deeply undermined by F2P; the move to F2P for Nintendo titles would be creatively difficult for many games, and even for ones that are a relatively natural fit (such as Pokemon), it would be an enormous commercial risk. There’s a chance Nintendo could get it right and end up with a Puzzle & Dragons sized hit on its hands (which is what it would take to exceed the half a billion dollars or so the company makes from each iteration of Pokemon on 3DS); there’s also an enormous risk that the company could get it wrong, attracting criticism and controversy around poor decisions or misjudged sales techniques, and badly damage the precious Pokemon brand itself.
In short, while I’m constantly aware that the market seems to be changing faster than Nintendo is prepared to keep up with, I’m not convinced that any of the company’s critics actually have a better plan right now than Satoru Iwata’s “stay the course” approach. If you believe that PlayStation fans will flock to buy Nintendo software on their console, you may think differently; if you think that the risk and reward profile of the global iOS market is a better bet than the 50-odd million people who have locked themselves in to Nintendo’s 3DS platform and shown a willingness to pay high software prices there, then similarly, you’ll probably think differently. Certainly, there’s some merit to the idea that Nintendo ought to be willing to disrupt its own business in order to avoid being disrupted by others – yet there’s a difference between self-disruption and just hurling yourself headlong into disaster in the name of “not standing still”.
There’s a great deal that needs to be fixed at Nintendo; its marketing and branding remains a bit of a disaster, its relationships with third-party studios and publishers are deeply questionable and its entire approach to online services is incoherent at best. Yet this most fundamental question, “should Nintendo stay in the hardware business”, remains a hell of a lot tougher than the company’s critics seem to believe. For now, beleaguered though he may seem, Iwata still seems to be articulating the most convincing vision for the future of the industry’s most iconic company.
While we can’t get a real handle on when Microsoft might reveal the VR headset that they have had in development, we have learned from our sources that it is well into development and some selected developers already have developmental prototypes.
It is hard to say when Microsoft might actually reveal the new VR headset and technology, but it would seem that GDC or E3 would be the likely events to see it introduced. We do know that Microsoft is targeting 2015 to move the VR headset into mass production and it is thought that we will see versions for both the Xbox One and PC. Though we expect the PC version to come a little after the Xbox One version.
Rumor has it that the same development team that worked on the Surface tablet are the team that has taken on this project as well.
Recently, my smartphone started acting up. I think the battery is on the way out; it does bizarre things, like shutting itself off entirely when I try to take a picture on 60per cent battery, or suddenly dropping from fully charged to giving me “10per cent remaining, plug me in or else” warnings for no reason at all. I can get it fixed free of charge, but it’s an incredibly frustrating, bothersome thing, especially given how much money I’ve paid for this phone. Most of us have probably had an experience like this with a piece of hardware; a shoddy washing machine that mangled your favorite shirt, a shiny new LCD screen with an intensely irritating dead pixel, an Xbox 360 whose Red Ring of Death demanded a lengthy trip back to the service center. There are few of us who can’t identify with the utter frustration of having a consumer product that you’ve paid good money for simply fail to do its job properly. Sure, it’s a #FirstWorldProblem for the most part (unless it’s something like a faulty airbag in your Honda, obviously), but it’s intensely annoying and certainly makes you less likely to buy anything from that manufacturer again.
Given that we could all probably agree that a piece of hardware being faulty is utterly unacceptable, I’m not sure why software seems to get a free pass sometimes. Sure, there are lots of consumers who complain bitterly about buggy games, but by and large games with awful quality control problems tend to get slapped with labels like “flawed but great”, or have their enormous faults explained in a review only to see the final score reflect none of those problems. It’s not just the media that does this (and for what it’s worth, I don’t think this is corruption so much as an ill-considered aspect of media culture itself); for every broken game, there are a host of consumers out there ready to defend it to the hilt, for whatever reason.
I raise this problem because, while buggy games have always been with us – often hilariously, especially back in the early days of the PlayStation – the past year or so has seen a spate of high-profile, problematic games being launched, suggesting that even some of the industry’s AAA titles are no longer free from truly enormous technical issues. The technical problems that have become increasingly prevalent in recent years are causing genuine damage to the industry; from the botched online launches of games like Driveclub and Battlefield through to the horrendous graphical problems that plague some players of Assassin’s Creed Unity, they are giving consumers terrible experiences of what should be high points for the medium, creating a loud and outspoken group of disgruntled players who act to discourage others, and helping to drive a huge wedge between media (who, understandably, want to talk about the experience and context of a game rather than its technical details) and consumers (who consider a failure to address glaring bugs to be a sign of collusion between media and publishers, and a failure on the part of the media to serve their audience).
We can all guess why this is happening. I don’t wish in any way to underplay how complex and difficult it is to develop bug-free software; I write software tools to assist in my research work, and given how often those simple tools, developed by two or three people at most, have me tearing my hair out at 3am as I search for the single misplaced character that’s causing the whole project to behave oddly, I am absolutely the last person in the world who is going to dismiss the difficulty involved in debugging something as enormous and complex as a modern videogame. Debugging games has inevitably become harder as team sizes and technical complexity has grown; that’s to be expected.
However, just because something is harder doesn’t mean it shouldn’t be happening, and that’s the second part of this problem. Games are developed to incredibly tight schedules, sometimes even tighter today (given the culture of annual updates to core franchises) than they were in the past. Enormous marketing budgets are preallocated and planned out to support a specific release date. The game can’t miss that date; if there are show-stopping bugs, the game will just have to ship with those in place, and with a bit of luck they’ll be able to fix them in time to issue a day-one digital patch (and if your console isn’t online, tough luck).
Yet this situation is artificial in itself. It’s entirely possible to structure your company’s various divisions around the notion that a game will launch when it’s actually ready, and ensure that you only turn out high-quality software; Nintendo, in particular, manages this admirably. Certainly, some people criticise the company for delaying software and it does open up gaps in the release schedule, but compared to the enormous opprobrium which would be heaped upon the company if it turned out a Mario Kart game where players kept falling through the track, or a Legend of Zelda where Link’s face kept disappearing, leaving only eyes and teeth floating ghoulishly in negative space (sleep well, kids!), an occasional delay is a corporate cultural decision that makes absolute sense – not only for Nintendo, but for game companies in general.
It doesn’t even have to go as far as delaying games on a regular basis. There is a strong sense that some of the worst offenders in terms of buggy games simply aren’t taking QA seriously, which is something that absolutely needs to be fixed – and if not, deserves significant punishment from consumers and critics alike. Quality control has a bit of an image problem; there’s a standard stereotype of a load of pizza-fuelled youngsters in their late teens testing games for a few years as they try to break into a “real” games industry job. The image doesn’t come from thin air; for some companies, this is absolutely a reality. It is, however, utterly false to think that every company sees its QA in those terms. For companies that take QA seriously, it’s a division that’s respected and well-treated, with its own career progression tracks, all founded on the basic understanding that a truly good QA engineer is worth his or her weight in gold.
Not prioritising your QA department – not ensuring that it’s a division that’s filling up with talented, devoted people who see QA as potentially being a real career and not just a stepping stone – is exactly the same thing as not prioritising your consumers. Not building time for proper QA into your schedules, or failing to enact processes which ensure that QA is being properly listened to and involved, is nothing short of a middle finger raised to your entire consumer base – and you only get to do that so many times before your consumers start giving the gesture right back to you and your precious franchises.
Media does absolutely have a role to play in this – one to which it has, by and large, not lived up. Games with serious QA problems do not deserve critical acclaim. I understand fully that reviewers want to engage with more interesting topics than technical issues, but I think it’s worth thinking about how film reviewers would treat a movie with unfinished special effects or audio mixed such that voices can’t be heard; or perhaps how music reviewers would treat an album with a nasty recording hiss in the background, or with certain tracks accidentally dropping out or skipping. Regardless of the good intentions of the creative people involved in these projects, the resulting product would be slammed, and rightly so. It’s perhaps the very knowledge of the drubbing that they would receive that means that such awful movies and albums almost never see the light of day (and when they do, they become legendary in their awfulness; consider the unfinished CGI at the end of “The Scorpion King”, which remains a watchword for terrible special effects many years later).
Game companies, by contrast, seem to feel unpleasantly comfortable with releasing games that don’t work and aren’t properly tested. Certain technical aspects probably contribute to this; journalists may be wary of slamming a game for bugs that may be fixed in a day-one patch, for instance. Yet it seems that there’s little choice but to make the criteria stricter in this regard. If media and consumers alike do not take to punishing companies severely for failing to pay proper respect to QA procedures for their games, this problem will only worsen as firms realize that they they can get away with launching unfinished software.
We all want a world where technical issues are nothing but a footnote in the discussion of games; that will be the ultimate triumph of game technology, when it truly becomes transparent. We do not, however, live in that time yet, and the regular launches of games that don’t live up to even the most basic standards of quality is something nobody should be asked to tolerate. The move by some websites to stop reviewing online games until the servers are live and populated with real players is a good start; but the overall tolerance for bugs and willingness to forgive publishers for such transgressions (“we know the last game was a buggy mess, but we’re still going to publish half a dozen puff pieces that will push our readers to pre-order the sequel!”) needs to be fixed. If we want to talk about the things that are important about games (and we do!), it’s essential that we fix the culture that ignores QA and technical issues first.
It’s already been widely reported that Microsoft is working on game-streaming technology, long enough that the company has apparently started over at least once. According to a new ZDNet report, Microsoft halted work on one such project called “Rio,” and has since begun building a new streaming service code-named “Arcadia.”
ZDNet’s Mary Jo Foley cites sources within Microsoft with the news that Arcadia is being worked on by a new team in the company’s Operating Systems Group. A job listing for the team says it will be working “to bring premium and unique experiences to Microsoft’s core platforms.”
Arcadia is said to run on Microsoft’s Azure cloud technology, and will let users stream apps as well as games. While there was talk of having Arcadia stream Android apps and games to Windows devices, Foley reported that particular feature has been tabled for the moment.
Sources are sighting a rating seen on the Australian classifications that seem to point to an upcoming Remastered Edition of Borderlands is coming for Xbox One and PlayStation 4. So far this has remained unconfirmed by publisher 2K and franchise developer Gearbox.
The new remastered version is expected to be simply called “Borderlands Remastered Edition”, but with no confirmation from 2K and Gearbox it is difficult to say what all it might contain or if it is simply a converted and compiled version of the first three games for the Xbox One and PlayStation 4.
Bottom line if it is in fact a complied remastered release of the first three games, the reality is that this could actually be a good thing for those that own the new consoles.
Detractors of free-to-play have been having a good few weeks, on the surface at least. There’s been a steady drip-feed of articles and statements implying that premium-priced games are gaining ground on mobile and tablet devices, with parents in particular increasingly wary of F2P game mechanics; a suggestion from SuperData CEO Joost van Dreunen that the F2P audience has reached its limits; and, to top it off, a move by Apple to replace the word “Free” with a button labelled “Get” in the App Store, a response to EU criticism of the word Free being applied to games with in-app purchases.
Taken individually, each of these things may well be true. Premium-priced games may indeed be doing better on mobile devices than before; parents may indeed be demonstrating a more advanced understanding of the costs of “free” games, and reacting negatively to them. Van Dreunen’s assertion that the audience for F2P has plateaued may well be correct, in some sense; and of course, the EU’s action and Apple’s reaction is unquestionable. Yet to collect these together, as some have attempted, and present them as evidence of a turning tide in the “battle” between premium and free games, is little more than twisting the facts to suit a narrative in which you desperately want to believe.
Here’s another much-reported incident which upsets the apple cart; the launch of an add-on level pack for ustwo’s beautiful, critically acclaimed and much-loved mobile game Monument Valley. The game is a premium title, and its level pack, which added almost as much content as the original game again, cost $2. This charge unleashed a tide of furious one-star reviews slamming the developers for their greed and hubris in daring to charge $2 for a pack of painstakingly crafted levels.
This is a timely and sobering reminder of just how deeply ingrained the “content is free” ethos has become on mobile and tablet and platforms. To remind you; Monument Valley was a premium game. The furious consumers who viewed charging for additional content as a heinous act of money-grubbing were people who had already paid money for the game, and thus belong to the minority of mobile app customers willing to pay for stuff up front; yet even within this group the scope of their willingness to countenance paying for content is extremely limited (and their ire at being forced to do so is extraordinary).
Is this right? Are these consumers desperately wrong? It doesn’t matter, to be honest; it’s reality, and every amateur philosopher who fancies himself the Internet’s Immanuel Kant can talk about their theories of “right” pricing and value in comment threads all day long without making a whit of difference to the reality. Mobile consumers (and increasingly, consumers on other platforms) are used to the idea that they get content for free, through fair means or foul. We could argue the piece about whether this is an economic inevitability in an era of almost-zero reproduction and distribution costs, as some commentators believe, but the ultimate outcome is no longer in question. Consumers, the majority of them at least, expect content to be free.
F2P, for all that its practitioners have misjudged and overstepped on many occasions, is a fumbling attempt to answer an absolutely essential question that arises from that reality; if consumers expect content to be free, what will they pay for? The answer, it transpires, is quite a lot of things. Among the customers who wouldn’t pay $2 for a level pack are probably a small but significant number who wouldn’t have blinked an eye at dropping $100 on in-game currency to speed up their ability to access and complete much the same levels, and a much more significant percentage who would certainly have spent roughly that $2 or more on various in-game purchases which didn’t unlock content, per se, but rather smoothed a progression curve that allowed access to that content. Still others might have paid for customisation or for merchandise, digital or physical, confirming their status as a fan of the game.
I’m not saying necessarily that ustwo should have done any of those things; their approach to their game is undoubtedly grounded in an understanding of their market and their customers, and I hope that the expansion was ultimately successful despite all the griping. What I am saying is that this episode shows that the problem F2P seeks to solve is real, and the notion that F2P itself is creating the problem is naive; if games can be distributed for free, of course someone will work out a way to leverage that in order to build audience, and of course consumers will become accustomed to the idea that paying up front is a mugs’ game.
If some audiences are tiring of F2P’s present approach, that doesn’t actually remove the problem; it simply means that we need new solutions, better ways to make money from free games. Talking to developers of applications and games aimed at kids reveals that while there’s a sense that parents are indeed becoming very wary of F2P – both negative media coverage and strong anti-F2P word of mouth among parents seem to be major contributing factors – they have not, as some commentators suggest, responded by wanting to buy premium software. Instead, they want free games without any in-app purchases; they don’t buy premium games and either avoid or complain bitterly about in-app purchases. Is this reasonable? Again, it barely matters; in a business sense, what matters is figuring out how to make money from this audience, not questioning their philosophy of value.
Free has changed everything, yet that’s not to argue with the continued importance of premium software either. I agree with SuperData’s van Dreunen that there’s a growing cleavage between premium and free markets, although I suspect that the audience itself overlaps significantly. I don’t think, however, that purchasers of premium games are buying quite the same thing they once were. Free has changed this as well; the emergence and rapid rise of “free” as the default price point has meant that choosing to pay for software is an action that exists in the context of abundant free alternatives.
On a practical level, those who buy games are paying for content; in reality, though, that’s not why they choose to pay. There are lots of psychological reasons why people buy media (often it’s to do with self-image and self-presentation to peers), and now there’s a new one; by buying a game, I’m consciously choosing to pay for the privilege of not being subjected to free software monetisation techniques. If I pay $5 for a game, a big part of the motivation for that transaction is the knowledge that I’ll get to enjoy it without F2P mechanisms popping up. Thus, even the absence of F2P has changed the market.
This is the paradigm that developers at all levels of the industry need to come to terms with. Charging people for content is an easy model to understand, but it’s a mistaken one; people don’t really buy access to content. People buy all sorts of other things that are wrapped up, psychologically, in a content purchase, but are remarkably resistant to simply buying content itself.
“I think there’s a bright future for charging premium prices for games – even on platforms where Free otherwise dominates, although it will always be niche there”
There’s so much of it out there for free – sure, only some through legitimate means, but again, this barely matters. The act of purchase is a complex net of emotions, from convenience (I could pirate this but buying it is easier) and perceived risk (what if I get caught pirating? What if it’s got a virus?), through to self-identity (I buy this because this is the kind of game people like me play) and broadcast identity (I buy this because I want people to know I play this kind of game), through to peer group membership (I buy this because it’s in my friends’ Steam libraries and I want to fit in) or community loyalty (I buy this because I’m involved with a community around the developer and wish to support it); and yes, avoidance of free-game monetisation strategies is a new arrow in that quiver. Again, actually accessing content is low on the list, if it’s even there at all, because even if that specific content isn’t available for free somewhere (which it probably is), there’s so much other free content out there that anyone could be entertained endlessly without spending a cent.
In this context, I think there’s a bright future for charging premium prices for games – even on platforms where Free otherwise dominates, although it will always be niche there – but to harness this, developers should try to understand what actually motivates people to buy and recognise the disconnect between what the developer sees as value (“this took me ages to make, that’s why it’s got a price tag on it”) and what the consumer actually values – which could be anything from the above list, or a host of other things, but almost certainly won’t be the developer’s sweat and tears.
That might be tough to accept; but like the inexorable rise of free games and the continuing development of better ways to monetise them, it’s a commercial reality that defies amateur philosophising. You may not like the audience’s attitude to the value of content and unwillingness to pay for things you consider to be valuable – but between a developer that accepts reality and finds a way to make money from the audience they actually have, and the developer who instead ploughs ahead complaining bitterly about the lack of the ideal, grateful audience they dream of, I know which is going to be able to pay the bills at the end of the month.
Mozilla is continuing its 10th birthday celebrations with the launch of a virtual reality (VR) website.
MozVR will be a portal to sites compatible with the Oculus Rift VR helmet, accessible by a VR-enabled version of the Firefox browser.
The site is designed to act as a sharing platform for VR web experiences as well as a place where developers can get hold of resources to help create their own.
MozVR has been built to be a “native VR” site and navigating around from site to site is completely immersive, described by the developers as like being teleported from place to place.
All the tools to create VR websites are open source, as you would expect from Mozilla, and have been posted to Github, including the full source code, a collection of tools and a range of tutorials.
Mozilla has contributed its own experience to the site in the form of Talk Chat Show Thing, the world’s first VR talk show, presented from the roof of Mozilla’s offices in San Francisco.
MozVR will also render correctly in VR versions of Chromium, the open source version of Google Chrome, giving Mozilla a significant foothold in a burgeoning early-adopter market.
In March of this year, Facebook purchased Oculus Rift maker Oculus VR, which continues to be run as a separate subsidiary.
The move caused animosity between developers and early adopters who felt that Facebook was an inappropriate home for the cutting edge device which had been originally crowdfunded through Kickstarter.
Phil Spencer was on the defense again, this time about the fact that the Xbox One only comes standard with a 500GB hard drive. Spencer in a Twitter exchange says that he does understand the need for bigger hard drives, but he reminded everyone that you can use external USB hard drives to add additional storage. (Depending on which one you buy it might even be faster than the 500GB internal storage in the Xbox One from our own testing!)
In addition Spencer acknowledged the fact that Microsoft shipped the Advanced Warfare console with a 1TB hard drive, so he says they acknowledge the need for bigger hard drives. Still so far the Advanced Warfare console was announced as “Limited Edition” and there has been no word so far on a permeant 1TB Xbox One offering, but we have to think it is coming at some point soon.
With install sizes continuing to grow, it will have to happen, but our sources tell us that other than the Advanced Warfare console, there are no plans to do anything more about it this year. The standard go to answer will be to recommend external USB storage for the time being. It is not a perfect solution, but with the performance in many cases better than the internal drive, it is something that a lot of us are willing to live with.
By almost any measure you care to apply, Bungie’s Destiny is a phenomenally successful game. It had one of the strongest launches of any game in history, sold many millions of units and many hundreds of thousands of new-gen consoles and, despite a mixed critical reaction, has inspired immense devotion from a huge audience of fans, with millions logging in each day to play the game. Criticisms of Destiny do abound, and many are very reasonable; the game is particularly weak as an MMO, with a paper-thin world and forgettable characters, not to mention a paucity of content at the high end which has led to deep disappointment for some players who expected something more like the holy grail of a marriage between the best aspects of World of Warcraft and the best aspects of Halo. That’s not what we got in the end; but what we did get is hugely compelling and entertaining, at least for many millions of players, myself included.
There’s just one problem. Destiny isn’t just a standalone game, like Halo was; this is a game which is designed from the outset to have a long tail, many months if not years of continuing evolution in its world and continuing progress for players’ characters. In that much, it is structured like an MMO, yet its business model is very different to WoW; there is no monthly subscription to keep the servers switched on and the content teams at work. Activision and Bungie need a different revenue stream to keep Destiny going; for that, they have turned to DLC.
The first DLC pack for Destiny will appear in December, costing $19.99 (or, in a fairly blatant bit of gouging, £19.99 for UK customers; over three times the price hike which would be justified by the UK’s sales taxes). Another is planned for early in the new year, with the same price tag. It’s unclear what’s planned after that, but it seems likely that Bungie will continue to make these DLC expansions until the law of diminishing returns renders them untenable, or the studio has to ramp up on its next full-release title (Destiny 2, or whatever it may be).
“Subscriptions generally get paid automatically every month and the player has to make a decision to terminate them; Destiny’s DLC, by contrast, requires the player to make a decision every two months or so to stay on the treadmill”
In a very basic sense, this pricing isn’t dissimilar to other MMOs. My most recent MMO addiction was Final Fantasy XIV: A Realm Reborn, which costs about $10 a month to play; roughly every two months, the team releases a new content update for the game which generally adds some new dungeons to play through, a few new quest chains to complete and so on. In theory, one could simply say “you’re no longer paying $10 a month for access to the game, instead you’re paying $20 every two months for the content patches”, and nothing ought to change; the same money for the same service.
I suspect that some logic of that description has been applied in pricing discussions at Activision and Bungie. Destiny may fail (somewhat miserably) as an MMO title right now, but it’s been designed from the outset as something along those lines. That’s not a surprise; Activision’s experience with the vast cash-generating prowess of World of Warcraft, along with its annual Call of Duty cash cows, has meant that an FPS game that can deliver WoW-like subscription revenue has been the dream for the publisher for a long time. Attempts to turn Call of Duty into a subscription service collapsed, so Destiny is the next real attempt to make this work; albeit with a business model that looks superficially different.
In truth, though, this is more than a superficial difference. $20 every two months for DLC may look the same in an accountant’s spreadsheet to $10 every month for a subscription, but the difference to a customer is immense. Candidly, if Square Enix turned around to me every two months and said “here’s what’s in the next FFXIV patch, will you pay $20 for it?”, I’d probably say no. The patches are great, with lots of interesting new stuff to do, but forced to consider whether they were worth $20, I would look around at all the other things I could buy for $20 and quickly decide it was better spent elsewhere. By contrast, with the subscription model, I feel like I’m paying for access to the game, and when the patches arrive loaded with content, I actually feel good about the game because there’s a sense (as illogical as it may be!) that the developers have just given us more “free” content.
Contrast that with the backlash Activision and Bungie have received this week in the wake of revealing details of the first Destiny DLC. Xbox One players, who will only be able to play one of the two new Strike dungeons but will have to pay the same amount of money for the DLC, are feeling particularly hard done by, but even PS4 players are finding the value proposition hard to stomach. The new DLC will add one or two more Strikes (short three-man dungeons), a new Raid (a lengthy six-man dungeon, although the requirement for a six-man team of your friends to enter these dungeons means they’re effectively locked away from many more casual players) and some more missions and equipment; it’s not a bad amount of content, but it’s very hard to come up with any acceptable bill of goods with that content above the line and “twenty bucks” written underneath the line.
Moreover, since this is DLC and not a subscription, players are going to have to make this decision every single time a new DLC pack comes out. Subscriptions generally get paid automatically every month and the player has to make a decision to terminate them; Destiny’s DLC, by contrast, requires the player to make a decision every two months or so to stay on the treadmill. “Yes, I still play and love this game enough to fork out again”; there’s a certain honesty to asking your players that question every couple of months, but it’s fairly clear that it will result in a very rapid drop-off in returns from each subsequent DLC pack.
“If Destiny is to have a long enough tail to truly be a new ‘pillar’ for Activision’s business, it may need some serious surgery on its business plan”
I do understand how Activision ended up in this situation. Launching a game with a subscription model is a risky proposition; it can put people off trying out the game in the first place, for one thing. Destiny would never have achieved those opening weekend sales if people were expected to pay a subscription fee. It would also have created very different expectations of the game, whose MMO components, end-game content and storytelling would need to be vastly, vastly more compelling in order to justify a monthly fee. Arguably the only way to really push Destiny as a subscription business would have been to change the game significantly (not the excellent shooting, but the weak metagame) and launch it as a free or damn-near free game, achieving huge initial uptake and hoping to convert as much of those early players as possible into subscribers. It would have been risky.
It might have been a risk worth taking. Keen to avoid that, Activision looked at other business models. Free-to-play was probably the wrong fit for this kind of game (you could make it work, and I wonder if the preponderance of cosmetic items serving no gameplay purpose suggests that F2P was considered at some point in development, but the game’s audience is pretty much as core-gamer as it gets and F2P would have been an extraordinary risk). Thus, the DLC model was arrived at; but I can’t help the feeling that in avoiding the risk of other models, Activision has chosen the worst of all worlds, a business model that practically demands overpriced content packs and guarantees a rapid drop-off in DLC sales due to the doomed strategy of demanding that customers make a proactive choice to pay every few months.
I could be mistaken; perhaps Activision and Bungie never planned to have more than a handful of content updates for Destiny, and won’t be unhappy at all if customer numbers drop off rapidly with each subsequent DLC pack; perhaps there was never any intention to keep releasing DLC packs after the middle of next year, with the intention of ramping up on Destiny 2 at that point instead. I hope that isn’t the case, though, because that would feel very much like a fatal error for the burgeoning franchise. Many players are currently very forgiving of the flaws in Destiny’s weak MMO content, its metagame and its poorly fleshed out storytelling and world-building, simply because they are used to the idea that MMOs are flawed at launch and gradually build themselves into something much more in-depth and interesting.
If it transpires that Activision’s actual plan for Destiny is to launch a handful of new dungeons and missions, filling in few if any of these gaps, and then move on to a brand new game in the franchise, it’s going to do something no new franchise can afford to do; it’s going to deeply disappoint and anger the people who are presently its most enthusiastic evangelists. Yet looking at the business model, I’m not sure I can see this panning out any differently, even if Activision and Bungie presently harbour a more optimistic plan. If Destiny is to have a long enough tail to truly be a new “pillar” for Activision’s business, it may need some serious surgery on its business plan.