It would appear that the trend of big publishers hosting their own events will continue in 2017. Last year’s E3 show floor was missing booths from the likes of Electronic Arts, Activision Blizzard, Disney and Wargaming. For its part, EA decided it could better serve the fans by hosting its own event next door to E3, and now the publisher has confirmed that EA Play will be making a return for the second year in a row, but it won’t be as close to the Los Angeles Convention Center.
EA Play will be held from June 10-12 at the Hollywood Palladium, which is around seven miles away. “Whether in person or online, EA Play 2017 will connect fans around the world to EA’s biggest new games through live broadcasts, community content, competitions and more. Those that can attend in Hollywood will experience hands-on gameplay, live entertainment and much more. For anyone joining digitally around the world, EA Play will feature livestreams, deeper looks into EA’s upcoming games and experiences, and content from some of the best creators in the community,” the company stated in a press release.
Furthermore, a spokesperson confirmed to GamesIndustry.biz that EA will indeed be skipping out on having a major E3 presence. “EA Play was such a powerful platform for us last year to connect with our player community. We learned a ton, and we wanted to build on everything we loved about last year’s event to make EA Play 2017 even better,” EA corporate communications VP John Reseburg said.
“So after an extensive search, we’ve selected the Hollywood Palladium as a place where we can bring our vision of creativity, content and storytelling to life, and build an even more powerful experience to connect with players, community leaders, media and partners. EA Play 2017 will originate from Hollywood, with more ways for players around the world to connect and experience the excitement.”
It’ll be interesting to see what the other major publishers do about E3 this year. We’ll be sure to keep you posted.
As with many game cancellations, it’s likely we’ll never know exactly why Platinum Games’ Xbox One exclusive Scalebound has been dropped by Microsoft. For a game that’s been in development for several years at a top-flight studio, helmed by one of the most accomplished directors working in the industry today, to be cancelled outright is a pretty big deal. Even acknowledging that most of the cost of launching a game lies in marketing budgets, not development costs, this still represents writing off a fairly huge financial investment – not to mention the hard-to-quantify costs to the image and reputation of the Xbox brand. This isn’t the kind of decision that’s made rapidly or taken lightly – and though the reasons remain obscure, we can guess that a mix of factors was considered.
For one thing, it’s fairly likely that the game wasn’t living up to expectations. Scalebound was ambitious, combining unusual RPG aspects with a style of action Platinum Games (usually masters of the action genre) hadn’t attempted before, and throwing four-player co-op into the mix as well. There are a lot of things in that mix that could go wrong; plenty of fundamental elements that just might not gel well, that might look good on paper but ultimately fail to provide the kind of compelling, absorbing experience a AAA console exclusive needs. These things happen, even to the most talented of creative teams and directors.
For another thing, though, it’s equally likely that Microsoft’s decision stems in part from some issues internal to the publisher. Since Scalebound went into development in 2013, the Xbox division has been on a long, strange journey, and has ended up in a very different place to the one it anticipated when it inked its deal with Platinum three years ago. When Microsoft signed on to publish Scalebound, it was gearing up to launch an ambitious successor to the hugely successful Xbox 360 which would, it believed, expand upon the 360’s audience by being an all-purpose entertainment box, a motion-controlled device as much media hub and high-tech TV viewing system as game console.
By the time Scalebound was cancelled this week, much of that ambition had been scrapped, PS4 had soared off into the sunset leaving Microsoft trailing in a very distant second place, and Xbox One has become instead one link in a longer chain, a single component of an Xbox and Xbox Live brand and platform that extends across the Windows 10 ecosystem and which will, later this year, also encompass a vastly upgraded console in the form of Scorpio.
It only stands to reason that the logic which led to the signing of a game before this upheaval would no longer apply in the present environment. While quality issues around Scalebound cannot be dismissed – if Microsoft felt that it had a truly great game on its hands, it would have proceeded with it regardless of any strategic calculation – the implications of Scalebound’s cancellation for the broader Xbox strategy are worthy of some thought. Actually, it’s not so much Scalebound itself – which is just one game, albeit a very high profile one – as the situation in which its cancellation leaves the Xbox in 2017, and the dramatic defocusing of exclusive software which the removal of Scalebound from the release list throws into sharp relief.
A quick glance down 2017’s release calendar suggests that there remain only two major Xbox One exclusive titles due to launch this year – Halo Wars 2 and Crackdown 3. The console remains well supported with cross-platform releases, of course, but in terms of reasons for a player to choose Xbox One over the more successful PS4, or indeed for an existing PS4 owner to invest in an Xbox One as a second console (a vital and often overlooked factor in growing the install base mid-cycle), things are very sparse. By contrast, the PS4 has a high profile exclusive coming out just about every few weeks – many of them from Sony’s first-party studios, but plenty of others coming from third parties. Platinum Games’ fans will note, no doubt, that Sony’s console will be getting a new title from the studio – NieR: Automata – only a few months after Scalebound’s cancellation.
The proliferation of multiplatform games means that Xbox One owners won’t be starved of software – this is no Wii U situation. Existing owners, and those who bought into the platform after the launch of the Xbox One S last year, will probably be quite happy with their system, but the fact remains that with the exception of the two titles mentioned above and a handful of indie games (some of which do look good), the Xbox One this year is going to get by on a subset of the PS4’s release schedule.
That’s not healthy for the future of the platform. The strong impression is that third parties have largely abandoned Xbox One as a platform worth launching exclusive games on, and unlike Sony during the PS3’s catch-up era, Microsoft’s own studios and publishing deals have not come forward to take up the slack in its console’s release schedule. This isn’t all down to Scalebound, of course; Scalebound is just the straw that breaks the camel’s back, making this situation impossible to ignore.
Why have things ended up this way? There are two possible answers, and the reality is probably a little from column A and a little from column B. The first answer is that Microsoft’s strategy for Xbox has changed in a way which makes high-profile (and high-cost) exclusive software less justifiable within the company. That’s especially true of high-profile games that won’t be on Windows 10 as well as Xbox One; one of the ways in which the Xbox division has secured its future within Microsoft in the wake of the company’s reorganisation under CEO Satya Nadella is by positioning itself as a key part of the Windows 10 ecosystem.
Pushing Xbox One exclusive software flies in the face of that strategic positioning; new titles Microsoft lines up for the future will be cross-platform between Windows and Xbox, and that changes publishing priorities. It’s also worth noting that the last attempt Microsoft made to plug the gap in its exclusive software line-up didn’t go down so well and hasn’t been repeated; paying for a 12-month exclusivity window for the sequel to the (multiplatform) Tomb Raider reboot just seems to have annoyed people and didn’t sell a notable number of Xbox Ones.
The second answer, unsurprisingly, revolves around Scorpio. It’s not unusual for a console to suffer a software drought before its successor appears on the market, so with Scorpio presumably being unveiled at E3 this year, the Xbox One release list could be expected to dry up. The wrinkle in this cloth is that Scorpio isn’t meant to be an Xbox One replacement. What little information Microsoft has provided about the console thus far has been careful to position it as an evolution of the Xbox One platform, not a new system. What that means in practice, though, hasn’t been explained or explored. Microsoft’s messaging on Scorpio is similar to the positioning of PS4 Pro – an evolutionary upgrade whose arrival made no difference to software release schedules – but at the same time suggests a vastly more powerful system, one whose capabilities will far outstrip those of Xbox One to an extent more reminiscent of a generational leap than an evolutionary upgrade.
The question is whether Microsoft’s anaemic slate of exclusive releases is down, in part, to a focus on getting big titles ready for Scorpio’s launch window. If so, it feels awfully like confirmation that Scorpio – though no doubt sharing Xbox One’s architecture and thus offering perfect backwards compatibility – is really a new console with new exclusive software to match. If it’s not the case, however, then along with clearing up the details of Scorpio, this year’s E3 will have to answer another big question for Microsoft; where is all your software?
2017 needs to just be a temporary dip in the company’s output, or all its efforts on Scorpio will be for naught. Seamus Blackley, Ed Fries, Kevin Bachus and the rest of the original Xbox launch team understood something crucial all the way back in the late nineties when they were preparing to enter Microsoft into the console business; software sells hardware. If you don’t have the games, nothing else matters. Whatever the reasons for 2017’s weak offering from Xbox, we must firmly hope that that lesson hasn’t been forgotten in the corridors of Redmond.
According to the provided details, the new HDMI v2.1 specification will be backward compatible with earlier versions and in addition to higher video resolution and refresh rates, including 8K@60Hz and 4K@120Hz, it will also bring support for Dynamic HDR, Game Mode variable refresh rate (VRR), eARC support for advanced audio formats and the new 48G cable that will provide 48Gbps of bandwidth which is a key for 8K HDR support.
The full list of resolutions and refresh rates start with 4K at 50/60Hz and 100/120Hz and climbs all the way up to 10K resolution at both 50/60Hz and 100/120Hz.
The big surprise is the new Game Mode VRR, which is similar with AMD FreeSync and Nvidia G-Sync, and meant to provide stutter-, tearing- and lag-free gaming, on both consoles and the PC.
Another big novelty is the all new 48G cable, which will provide enough bandwidth for higher resolutions with HDR. The old cables will be compatible with some of the new features, but for 8K/10K with HDR, you will need the new HDMI v2.1 cable.
According to HDMI Forum, the new HDMI v2.1 specification will be available to all HDMI 2.0 Adopters which will be notified when it is released in early Q2 2017.
With the exception of the last generation of consoles, which saw a roughly eight-year run on the market, the traditional console cycle has averaged around five to six years. This time around, however, perhaps influenced by the wave of high-end graphics cards necessitated by VR, both Microsoft and Sony are testing the market with so-called mid-cycle upgrades. The PS4 Pro and next year’s Scorpio offer gamers the chance to play in 4K – a resolution that until recently was only possible in the realm of PC gaming. Perhaps more importantly, the inclusion of HDR gaming offers a new level of visual fidelity that brings a much wider color gamut to players.
Factoring in the recent release of the Xbox One S, and the PS4 Slim model as well, we’ve never seen this many new consoles launched to the market so near to the start of a new console cycle – both PS4 and Xbox One released only three years ago – which begs the question: is the traditional console cycle now dead?
2016 and 2017 with Scorpio will certainly prove to be an interesting test for the market. It’s far too early to judge the reception to PS4 Pro, but Xbox One S has been selling moderately well, even allowing Xbox One to outsell PS4 for a few months.
NPD analyst Mat Piscatella, who joined the data firm with years of publishing experience at Activision and WBIE, commented, “I think I’d call it more ‘evolved’ than ‘died’… Nintendo seems to have already been there for years, at least in the portable space. We have to wait and see what they will do with the Switch. But the iterative model certainly will be tested over the next 12-18 months.”
“Nintendo’s past approach in the portable space has proven that the iterative model can be successful,” he continued. “However, the PS4 Pro and Scorpio (we assume) will bring much more significant performance upgrades at higher upfront costs to the consumer.
“Adding iterative hardware into a cycle also creates the need for a much more demanding set of go to market strategies while making successful execution of those strategies more critical than ever before. Balancing game development resources, the hardware R&D challenges surrounding an iterative launch, the detailed planning that will be necessary to properly align the supply chain from production to retail to ensure the proper mix and stock volumes in channel, ensuring the pricing and price promotion programs are right, all while communicating marketing messages that speak to the different customer sets effectively… this will certainly be an ongoing challenge.”
While some have speculated that we’ll now see new consoles literally every year, mimicking the lightspeed pace at which smartphones get upgraded, the market dynamics for consoles and the impact of new hardware on developers makes that a much more difficult proposition.
Consequently, Piscatella doesn’t think we’ll see more than one new console iteration per cycle. “I don’t see a more rapid deployment as feasible due primarily to development challenges. Making video games is hard, and ensuring a game is optimized for two versions of a console is challenging enough. Getting to 3 or 4 versions of the game for the same console base seems to me as though it would bring diminishing returns,” he explained.
SuperData’s Joost van Dreunen believes that the typical console cycle will remain intact, but unlike Piscatella, he sees the platform holders iterating continuously.
The constant technical upgrades that we see in mobile have effectively changed consumer expectations and the broader market for interactive entertainment, he noted. “So as Sony and Microsoft are pursuing their respective long-term VR/AR agendas, they now also have to keep in touch with what’s happening outside of their secret labs. This means we’re probably looking at the release of a new hardware architecture every 5-7 years, and allowing for annual iterations of key components throughout the lifecycle,” he said.
“This blend of internally developing proprietary hardware and adopting externally emerging trends that are popular with consumers is a powerful mix, and has allowed console gaming to thrive when many wrote it off. And given the current success of both platforms, and the imminent arrival of Nintendo’s bid, I don’t expect the console gaming market to soften any time soon.”
While the longstanding five-plus year console cycle was a boon for developers to work with and optimize for a set specification, the iterative approach that we’re likely to see in hardware moving forward brings advantages as well. As Piscatella explained, introducing console iterations can help to reduce cycle stagnation and boost consoles’ cycle tail, while also “encouraging pubs/devs to invest in scalable development environments, to hopefully avoid the dramatic steps up in development costs seen previously with new hardware deployment.”
Furthermore, by offering multiple configurations that still adhere to the same architecture (Xbox One, One S, Scorpio), there’s an opportunity for “price/benefit ratios appealing to both enthusiast and mass market audiences. Marketing approaches no longer have to take a one-size-fits-all approach,” Piscatella said.
The iterative release schedule would appear to make sense for the console manufacturers, enabling them to maximize returns and keep average pricing elevated, and so long as the ecosystem and gaming experiences are kept consistent across the numerous variations of the consoles, Sony and Microsoft don’t really care which version of their hardware a player owns – so long as that player remains invested in Xbox Live or PlayStation Network, that’s a win for Microsoft or Sony. The platform is less important than the digital ecosystem nowadays, especially with digital sales rising rapidly.
“The console market is at its heart a consumer electronics market,” van Dreunen remarked. “But increasingly it is incorporating tactics from the fashion industry, where we see an accelerated adoption of trends that emerged outside of the ateliers and studios of salaried designers. Console manufacturers have been actively pursuing digital distribution and free-to-play, both of which first gained traction on PC and mobile. Full game downloads now represent about 27% of holiday sales, up from just 5% in 2012, adding just under $7 billion a year to the console market. Titles like FIFA, GTA Online, and Call of Duty, do really well in terms of digital sales, and have managed to improve margins and player base longevity. Further facilitating this trend will be as important as making the hardware better.”
With the digital ecosystem taking precedence, it’s no surprise that Sony has made PlayStation Now streaming titles work for Windows PCs, and with the remote play feature, customers can enjoy PS4 titles on a PC or Mac as well. Microsoft, of course, which has a deep investment in the PC space with Windows 10 has extended the Xbox ecosystem across devices with Xbox Play Anywhere, enabling certain titles to be played with progress intact on a PC or Xbox console.
Whether you’re playing on Windows 10 or Xbox One doesn’t matter to Xbox boss Phil Spencer. In fact, he’s not even concerned about whether you upgrade to Scorpio next year.
“For us in the console [industry], the business is not selling the console,” Spencer told me back at E3. “The business is more of an attached business to the console install base. So if you’re an Xbox One customer and you bought that console 3 years ago, I think you’re a great customer. You’re still using the device. That’s why we focus on monthly active users. That’s actually the health of our ecosystem because it’s really you want this large install base of people that are active in your network buying games, playing games… So our model’s not really built around selling you a new console every one or two years. The model is almost the exact opposite. If I can keep you with the console you have, keep you engaged in buying and playing games, that’s a good business.”
If frequent hardware iteration is indeed the new reality for the console market, publishers couldn’t be happier. “I actually see it…as an incredibly positive evolution of the business strategy for players and for our industry and definitely for EA. The idea that we would potentially not have an end of cycle and a beginning of cycle I think is a positive place for our industry to be and for all of the commercial partners as well as players,” EA global publishing chief Laura Miele said during the company’s EA Play conference.
Take-Two CEO Strauss Zelnick agreed, “It would be a very good thing for us,” not to have to worry about hardware and who owns which console. He likened it to TV. “When you make a television show you don’t ask yourself ‘what monitor is this going to play on?’ It could play on a 1964 color television or it could play on a brand-new 4K television, but you’re still going to make a good television show.”
“We will get to the point where the hardware becomes a backdrop,” he said. That may very well be true. At the point when high fidelity games are playable literally anywhere and on any device, will we even have consoles? Much like Netflix, the networks and content providers/curators will live on, but hardware may not matter.
And as happy as publishers appear to be about the new world of console iteration, NPD’s Piscatella did point to a possible cause for concern. “Here’s the real question. If consumers are purchasing multiple iterations of the same console over the course of a generation, does this potentially increase or decrease the amount of money that consumer will spend on software and associated content?” he asked.
“And I think this is an open question… will they spend more because they’ve reinvested in the ecosystems? Or will they spend less because they’ve just output more money on to the iterative hardware? We’ll see how the market answers that question over the next 12-18 months.”
Dean Hall, CEO of RocketWerkz and previously lead designer of DayZ, has spoken openly on Reddit about the harsh financial realities of VR development, explaining that without the subsidies provided by platform exclusives and other mechanisms, the medium would currently be largely unviable.
In an extended post which has garnered over 200 comments, Hall proclaimed that there was simply “no money” in VR game development, explaining that even though his VR title Out of Ammo had sold better than expected, it remained unprofitable.
Hall believes that many consumer expectations from the mature and well-supported PC market have carried over to VR, with customers not fully comprehending the challenges involved with producing content for such a small install base.
“From our standpoint, Out of Ammo has exceeded our sales predictions and achieved our internal objectives,” Hall explained. “However, it has been very unprofitable. It is extremely unlikely that it will ever be profitable. We are comfortable with this, and approached it as such. We expected to lose money and we had the funding internally to handle this. Consider then that Out of Ammo has sold unusually well compared to many other VR games.”
Pointing out that making cross-platform VR to ameliorate that small install base is not as simple as cross platform console development, Hall went on to talk about the realities of funding VR games, and what that meant for the studios involved.
“Where do you get money to develop your games? How do you keep paying people? The only people who might be profitable will be microteams of one or two people with very popular games. The traditional approach has been to partner with platform developers for several reasons:
“The most common examples of this are the consoles. At launch, they actually have very few customers and the initial games release for them, if not bundled and/or with (timed or otherwise) exclusivity deals – the console would not have the games it does. Developers have relied on this funding in order to make games.
“How are the people who are against timed exclusives proposing that development studios pay for the development of the games?
“There is no money in it. I don’t mean ‘money to go buy a Ferrari’. I mean ‘money to make payroll’. People talk about developers who have taken Oculus/Facebook/Intel money like they’ve sold out and gone off to buy an island somewhere. The reality is these developers made these deals because it is the only way their games could come out.
“Here is an example. We considered doing some timed exclusivity for Out of Ammo, because it was uneconomical to continue development. We decided not to because the money available would just help cover costs. The amount of money was not going to make anyone wealthy. Frankly, I applaud Oculus for fronting up and giving real money out with really very little expectations in return other than some timed-exclusivity. Without this subsidization there is no way a studio can break even, let alone make a profit.
“Some will point to GabeN’s email about fronting costs for developers, however I’ve yet to know anyone who’s got that, has been told about it, or knows how to apply for this. It also means you need to get to a point you can access this. Additionally, HTC’s “accelerator” requires you to set up your studio in specific places – and these specific places are incredibly expensive areas to live and run a studio. I think Valve/HTC’s no subsidy/exclusive approach is good for the consumer in the short term – but terrible for studios.
“As I result I think we will see more and more microprojects, and then more and more criticism that there are not more games with more content.”
In addition to the financial burdens, Hall says that there are other pressures too. For example, in his experience VR development burns people out very quickly indeed, with the enthusiasm of most, including himself, waning after a single project.
“I laugh now when people say or tweet me things like ‘I can’t wait to see what your next VR game will be!’ Honestly, I don’t think I want to make any more VR games. Our staff who work on VR games all want to rotate off after their work is done. Privately, developers have been talking about this but nobody seems to feel comfortable talking about it publicly – which I think will ultimately be bad.”
“For us it became clear that the rise of VR would be gradual rather than explosive when in 2015, it was revealed that the Oculus Rift and HTC Vive would be released in 2016 and that the gold rush would be on hold”
Sam Watts, Make Real
It’s not a universal opinion among VR developers, however: there was opposition to Hall’s points both within and beyond the thread. Sam Watts, Operations Lead at Make Real had the following to say.
“I think the reality of that thread is a direct result of a perceived gold rush by developers of all sizes to a degree, since analyst predictions around sales volumes of units were far higher than the reality towards the end of the year. There have been waves of gold rush perceptions with VR over the past few years, mostly around each release of new hardware expecting the next boom to take the technology into the mainstream, which has mostly failed to materialise.
“For us it became clear that the rise of VR would be gradual rather than explosive when in 2015, it was revealed that the Oculus Rift and HTC Vive would be released in 2016 and that the gold rush would be on hold.”
Watts also sees a healthier VR ecosystem on the way, one where big publishers might be more willing to invest in the sort of budgets which console games are used to.
“Whilst typical AAA budgets aren’t yet being spent on VR (to our knowledge) it doesn’t mean AAA isn’t dipping their toe in the water. The main leader being Ubisoft who created a small VR R&D team that eventually became the Eagle Flight devs. They have avoided what many early VR developers were worried about AAA approach to VR by prototyping, iterating on design, making mistakes, learning from them and working out what does and doesn’t work in VR, even creating a now widely popular comfort option of the reduced peripheral vision black tunnel effect. They didn’t just storm in late to the party, throwing AAA megabucks around at the problem, assuming money would make great games.
“I know Oculus, Steam, Sony and Razer are still funding games titles for development in 2017, I would hope to see this continue beyond to ensure the continued steady adoption and rise of VR as a new gaming platform moving forwards. This will help continue to improve the quality of content offering on the platforms to ensure full gaming experiences that gamers want to buy and return to, rather than just a series of short tech demos, are available, helping establish the medium and widen the net.”
The upcoming titles will free up some of Sony’s popular gaming franchises, such as Everybody’s Golf, from PlayStation consoles to make them available on Apple Inc’s iOS and Google’s Android mobile platforms.
An aggressive push into the rapidly growing segment is seen as a necessity for Sony as its games unit has emerged as the group’s largest profit contributor following an overhaul of the group’s consumer electronics business.
They will be available initially in Japan and eventually in other Asian countries, Tomoki Kawaguchi, executive director of Sony’s mobile gaming unit, told reporters.
The announcement comes before Nintendo debuts its game franchise Super Mario Bros on Apple’s iPhone next week.
While disappointing sales of Wii U consoles helped push Nintendo into mobile gaming, Sony has been a decisive winner in console gaming with over 40 million PlayStation 4 sales, almost double the sales of Microsoft Corp’s XBox One.
But Sony is facing the increasing threat from mobile in countries such as Japan, the world’s third largest game market where mobile gaming accounts for more than half of the $12.4 billion market, according to games research firm Newzoo.
Sony has launched some games for smartphones through its music entertainment unit but failed to fully introduce mobile gaming to its PlayStation business.
Analysts doubt Sony’s chances of major success in mobile gaming, citing a lack of powerful characters like Nintendo’s Super Mario and Donkey Kong, which have achieved widespread appeal globally.
The number of games on Steam continues to rise at a daunting rate. According to new data from Steam Spy, the number of full games released on the store this year rose 40% over 2015.
Steam Spy founder Sergey Galyonkin published a chart on Twitter that indicated a total of 4207 games launched on Steam in 2016, up from 2964 last year. If accurate, that means 38% of all games on Steam were released within the last 12 months – a sobering thought for any developer trading on Valve’s market leading platform.
Of course, the notion that Steam is crowded with product is hardly new, but Steam Spy’s chart – republished above – clearly illustrates the pace at which the trend is playing out.
The only small consolation is that the 40% rise over last year is actually lower than the 67% increase in new games between 2014 and 2015. Galyonkin noted that the chart doesn’t include movies and non-game software, but it also filters out relevant content like DLC packs and “games without owner data.”
Valve is certainly cognisant of the issues that Steam’s teeming inventory has created for both developers and consumers. It has responded with two “Discovery Updates” that gave more control over the experience to both groups, the first in 2014 and the second little more than a month ago.
Following the second Discovery Update, GamesIndustry.biz talked to developers about the “huge impact” of the changes.
As the numbers from Black Friday and Thanksgiving weekend continue to trickle in, many analysts are examining how the holiday sales picture is coming together this year. While The NPD Group is not ready to give its full assessment just yet, the firm did note to GamesIndustry.biz that digital promotions on PlayStation Network and Xbox Live were much more aggressive this year and may have impacted the retail channel. Digital aside, the sector that seemed to struggle the most is virtual reality, according to SuperData, which said VR has been the “biggest loser.”
Thanks to “notably fewer units sold than expected due to a relatively fragmented title line-up and modest marketing effort,” VR headsets are now expected to sell even fewer than previously thought. SuperData’s revised forecast for 2016 calls for under 750k PlayStation VR units sold (their previous estimate was 2.6 million) with Google’s Daydream selling just 261k (down from 450k). Previous estimates for HTC Vive, Oculus Rift and Gear VR remain unchanged at 450k, 355k and 2.3 million, respectively.
As you can see, expectations for PSVR have seen the most dramatic shift. Stephanie Llamas, director of research and insights at SuperData, explained to us, “PSVR had the best opportunity to benefit from the holidays but their supply inconsistencies and lack of marketing have put them behind their potential. They did not offer any first-party deals this weekend, restock bundles or market the device, pushing instead for the PS 4 Pro. They have also pointed out that VR looks even better on a Pro than a standard or slim PS 4, so the message to most gamers is: Get the Pro now, then the PSVR later. As a result, we won’t see them break 1M shipments until well into the new year.”
Llamas added that Sony may be deliberately limiting PSVR supply until it can do a better job with supporting the platform. “Had Sony pushed the PSVR the way they’ve been pushing their other new hardware, the demand would have certainly fulfilled a supply of over 2 million. However, given its quiet release it’s clear they’re being cautious before fully investing in the tech. Without the ‘killer app’ and the slow, steady release of AAA content, they will release less than 1 million devices until they have content they feel confident will bring in the praise they want. They can afford to take it slow since they have no competition for now, so their supply and sales will rise steadily into 2017 as opposed to riding the seasonal wave,” she said.
As for Oculus, Llamas believes they’ve taken a risk by possibly splitting their own user base. “The Rift’s Touch controllers are an opportunity for Oculus to penetrate, but not many headsets have moved, especially with their round-about deal where purchasers earned $100 Oculus credit rather than just getting $100 off. Oculus’s hardware release strategy has also slowed them down and split their user base, so developers are having to make some choices around whether they should develop for both Touch and non-Touch users. This means development has slowed and is becoming another barrier to growth,” she remarked.
Looking at the non-VR games market, Nintendo may actually prove to be the biggest winner, thanks to updates both to Pokémon GO and selling out of its NES mini. “On mobile we recorded a spike in earnings as players made the most of the Thanksgiving special for Pokémon GO. The game’s ability to stay in the forefront of people’s minds as we approach the release date for Super Mario Run may prove beneficial for Nintendo, which has yet to make a convincing claim on the $38 billion mobile games market,” said Joost van Dreunen.
Overall digital game sales this holiday are down 2% from 2015 so far, but the impact of digital has grown tremendously in just a few years. “In 2012 full game downloads accounted for only 6% of total unit sales around the Thanksgiving holiday in the United States. For 2016E that number was four times higher at 24%,” van Dreunen said.
The other big contributor to the slow holiday start has been big discounting, according to Wedbush Securities’ Michael Pachter. “We saw greater discounting of high-profile new video games this Black Friday compared to last year. Last year’s top sellers, Activision Blizzard’s Call of Duty: Black Ops III , Bethesda Softworks’ Fallout 4, and EA’s Star Wars Battlefront, saw sticky pricing on Black Friday, with the $60 price point remaining largely intact. While discounting of sports games happens each year, many other titles that maintain pricing on Black Friday were listed at discounts of 40% or more this weekend,” he observed.
“For example, Walmart had EA’s Battlefield 1 and Titanfall 2 at $27, and Microsoft’s Gears of War 4 and Take-Two’s Mafia III at $35. Walmart also had Activision Blizzard’s Call of Duty: Infinite Warfare Legacy Edition, which includes Modern Warfare Remastered , for $57, a $23 discount. Discounting of Call of Duty: Infinite Warfare began earlier in the week, with widespread discounts of roughly $20 for the different versions of the game. Hardware discounting for the PS4 and Xbox One was largely consistent with 2015, as $50 discounts were commonplace.”
Pachter also agreed that the “pace of the mix shift to digital full game downloads continues to be brisk,” but we probably won’t know whether digital sales fully made up for retail declines until we get the complete NPD report for 2016 sometime in January.
The announcement of Red Dead Redemption 2 has gamers and Take-Two investors alike eagerly anticipating the game’s release next fall, but the company’s been giving both camps reasons to pay attention in the meantime. Take-Two today announced its results for the quarter ended September 30, meeting (and in the case of bookings, exceeding) guidance and touting some record-breaking recent releases.
September’s NBA 2K17 and Mafia III (which launched in the current quarter) set new records, with the former selling in more units at release than any previous title in the franchise, and the latter selling in more units than any previous game on the 2K label (which includes BioShock and Borderlands, but not Rockstar series like Grand Theft Auto or Red Dead Redemption). The company also noted that NBA 2K17 posted the highest Metacritic scores that series has seen to date, as well as the best scores of any annualized sports game this console generation. (As of this writing, NBA 2K17 has a Metacritic average of 90, which the series has previously surpassed, but not since Take-Two acquired it from Sega in 2005.)
Speaking with GamesIndustry.biz, Take-Two chairman and CEO Strauss Zelnick acknowledged Mafia III’s reviews were not quite as record-setting as its sales. At the moment, they range from 62 to 69, depending on the platform. However, he characterized its overall reception as “phenomenal.”
“I think the scores have been a bit disappointing because there were some scores much lower than we expected,” Zelnick said. “But the reviews, especially from those who matter, have been phenomenal. And consumers absolutely love it; it’s selling really well.”
While it has been years since the NBA 2K series has been pushed by a strong competitor (Sony stopped making its own basketball series and EA has been struggling to return NBA Live to its former standing for years), Zelnick said the developers don’t take their success for granted.
“This was record first-week sell-in and we’re excited about that; virtual currency sales are up 160% year-over-year,” Zelnick said. “But if you sat with our creative team, they could give you a long list of things they feel we should be doing better, and we’re focused on all of them. Every year we aim to delight consumers, every year we make progress, and every year we fall short a bit from our own point of view. So I think we have plenty of motivation to delight the consumer, internally.”
But as games continue posting bigger and better numbers, so too do the expectations around them rise in lockstep. Zelnick said the return on investment for what constitutes a successful AAA game has only risen over time.
“For our successful titles, the ROI is very strong and getting stronger,” Zelnick said. “And I think that’s attributable to the fact that a few years ago, we’d make a title, market it, sell units, then sell catalog. And today, we offer opportunities for the consumer to engage after that release. And in many instances, we offer an opportunity to spend money after that release.”
He added that has “unquestionably” made the industry more hit-driven.
“I said in 2008 or 2009 that good is the new bad. Standards are going up, and that’s why our strategy always has been to be the most creative, innovative, and efficient company in the business,” Zelnick said. “And more often than not, we are. Sometimes we fall short.”
Take-Two met its expectations for the second quarter, posting net revenues up 21% to $420.2 million with net income of $36.4 million, down from $54.7 million in the year-ago quarter. The company also reported bookings up 28% to $452.8 million (well above the $400 million top-end range of its guidance) and non-GAAP net income of $50.7 million, down from $56.2 million the year before.
At a Microsoft event to showcase its Windows 10 Creators Update coming next year, the software giant made it absolutely clear that it has big plans for VR, not just AR and HoloLens. By partnering with HP, Dell, Lenovo, Acer and Asus to offer a range of VR headsets that are priced at $299 and feature inside-out tracking, the company has taken an important step towards democratizing VR for the masses. But what’s the larger play here? How will VR headsets like these impact Project Scorpio next year and the Xbox business moving forward?
Tim Merel, founder of Digi-Capital and CEO of Eyetouch Reality, believes the VR news from Microsoft is a true “game changer” and he speculates that the company will look to make Scorpio an even more enticing proposition for gamers by bundling in VR. “The greatest potential for the Microsoft VR headset could come from bundling it with Xbox One Project Scorpio, which Microsoft has already highlighted as supporting next generation VR. With an Xbox One installed base over 20 million users, this might be Microsoft’s silver bullet for both VR specifically and the console market more generally. So Microsoft could be using its new VR headset to leapfrog competitors in two markets at the same time, leveraging for VR some of the great work already done by Phil Spencer, Alex Kipman and Kudo Tsunoda with Windows 10 and HoloLens in the adjacent AR market,” he says.
Wedbush Securities’ Michael Pachter agrees with Merel, telling GamesIndustry.biz, “Tim is spot on. A standalone headset without a CPU/GPU makes no sense, and if it requires the purchase of a high end PC, it’s not clear that anyone will buy it instead of Oculus/Vive/PSVR. However, if it works with Scorpio, it’s a formidable competitor for PSVR (albeit with a starting installed base of zero). I think that’s probably the plan, and am curious if software for Oculus and Vive will work with the Microsoft headset.”
Other analysts are more skeptical of Microsoft’s chances in VR, however. Stephanie Llamas, Director of Research and Insights at SuperData, still thinks HoloLens and augmented or mixed reality will be more impactful for the company.
“A VR device will not be a silver bullet for any market for a very long time,” she cautions. “First off, Microsoft is banking on consumers they don’t even have yet: Xbox One will not support the line of devices, so they are actually starting from a user base of zero that they hope will buy the Xbox One Project Scorpio. Early VR adopters already bought their PSVR, Vive or Oculus — inside-out tracking alone isn’t going to entice them to spend on another VR device this early in the market’s lifecycle. This product is going to be secondary to a purchaser’s decision to buy Project Scorpio, not the other way around.
“Second, this is just a MS-compatible line of headsets. So Microsoft will have to tout a third-party accessory with a first-party device, which definitely complicates their marketing and potential for bundling. Microsoft should have done this a year ago, or at least given us more promise than including their controller with the Oculus Rift, but they are already too far behind. Where they should continue to focus, and where they have shown a unique value proposition, is with the HoloLens’s potential for augmented and mixed reality.”
EEDAR’s Patrick Walker, on the other hand, is confident that a pivot towards VR is a smart move for Microsoft at this juncture. “While many technology thinkers are significantly more excited about the potential of AR long-term, VR is much closer to reaching a mainstream market,” he remarks. “It is also becoming more and more clear that the line between VR and AR will likely be blurred. Microsoft’s VR initiatives on the Xbox One portfolio also make a lot of sense considering the console’s position in the market. The PS4 has had a much more successful launch than the Xbox One so it is in Microsoft’s interest to push technology initiatives that disrupt the console generation, including the VR headsets and the merger of PC and console gaming.
“The increased VR capability of the Scorpio could provide a compelling reason for PS4 gamers to jump into the Xbox One platform. This creates a nice short term strategy of regaining console share, a mid-term strategy of generating VR revenue across PC and console, and a continued long-term strategy of developing for the future of AR.”
DFC Intelligence’s David Cole falls more in the skeptic’s camp. “The big issue in the VR market is that there needs to be a clear market driver that can package up the experience for the mass consumer. Right now the only one with that solution is PlayStation VR, which has a clear price point and an easy to use solution that is getting out to the masses,” he says. “The problem with the other VR devices is not having that clear distribution or message. Just having a product available doesn’t push it to consumers and that is the big problem Microsoft faces…who is going to communicate that message to consumers? This is still a pitch to the tech elite. There is also going to be a great deal of consumer confusion with multiple devices.
“VR is a new form of entertainment that needs to be introduced as such. The issue is many of these headset manufacturers are not strong at consumer marketing so who is going to get the message out? Right now for 2017 we see PSVR as being far and away the leading high-end VR device. I don’t think these products are launching until later in 2017 so we see a lot of announcements coming in this space.”
Inside-out tracking is important because it means you don’t need sensors all over your room to track your headset and controller motions, but as long as players are tethered to a device the experience will feel somewhat limited. “Losing the wire will be bigger. VR is still in its infancy and we expect even more price reductions and innovation to drive the market,” Cole continues.
“Microsoft has pretty much indicated that they plan for Project Scorpio to work with multiple VR headsets. The real issue will be Project Scorpio is too little, too late. Project Scorpio will actually be starting from a zero install base, not 20 million, so I think Windows VR should move the needle more than Project Scorpio.”
Merel remains more positive, though, and unlike Llamas, does not think that offering third-party VR hardware is a downside. “Microsoft’s new VR headset is the next stage of VR going mass consumer. For consumers, inside-out tracking without the need to buy or set up external sensors in a dedicated VR playroom is huge. The $299 price point is much less expensive than other PC based VR products. Launching with partners HP, Dell, Lenovo, Asus, and Acer gives Microsoft an accelerated hardware platform and also spreads its market risk,” he notes.
Microsoft has been making some headway in the generation eight console battle, with the Xbox One celebrating a third month running as the best-selling console in the US. The combined sales of the original One and the new S model also put it at the head of the pack in the UK in September.
US figures come from the NPD group and UK numbers from GfK, although no actual unit values were given. The full US sales report from NPD is due next week.
It’s likely that some of that recent lead is a result of a dip in PS4 sales thanks to the imminent launch of the PlayStation Pro, but the One has also been building momentum too, with sales up across many territories.
“Xbox One was the only gen eight console to see year-over-year growth in September in the U.S., Australia, the U.K and many other countries worldwide,” said corporate VP of Xbox marketing Mike Nichols. “This success was driven by our fans and their support for Xbox One S, which is the only console available this holiday with built-in UHD 4K Blu-ray, 4K video streaming and HDR for gaming and video.”
Since it did not come with some of the latest AMD Radeon Software Crimson Edition driver packages, the guys over at Wccftech.com contacted AMD which gave them an official response that since September 12th, AMD is no longer bundling the AMD Gaming Evolved App by Raptr with its Radeon Software and will not provide any official support for it, including compatibility testing, install support or general technical support.
Those that still want to use it can get the Gaming Evolved App directly from Raptr or with previous builds of Radeon Software drivers package.
AMD is either making a new in-house app that will replace the one from Raptr or is simply now focusing on hardware and drivers. Unfortunately, this leaves it without any competition for the Nvidia’s Geforce Experience app which recently got completely overhauled and looks quite good.
In a week’s time, what is arguably the first truly great commercial experiment of the new VR age will begin. For the first time, consumers will be able to go out and buy a VR headset that’s (relatively) inexpensive, that doesn’t require a costly hobbyist PC to operate, and that provides a “good enough” VR experience for gaming and other applications. If there’s to be a sweet spot in the virtual reality market, Sony will be planting its flag firmly in it next Thursday.
Reviews of the device have started to appear and are pretty much what you’d expect. It’s good; we’ve known that from the countless demos and trade show appearances PSVR has made this year. It’s not as technically accomplished as the HTC Vive or the Oculus Rift, but it’s a far more comfortable, well-designed piece of hardware, and its technical shortfalls are far fewer and less noticeable than you’d expect from such a cheap device running on such comparatively low-powered hardware. It’s certainly an entirely different class of experience than any of the “toy” VR experiences currently offered by mobile tech like Samsung’s Gear VR, a situation which Google’s newly announced Daydream headset seems unlikely to change.
So yes, this is the sweet spot, if such a thing exists. Good enough to actually want to use, unlike current mobile VR devices, cheap enough to be accessible to a wider audience of gamers and enthusiasts, and with common sense (if occasionally frustrating) trade offs between complexity of setup and physical arrangement, and accuracy of control. If a VR headset is to rescue this putative Year of VR from the somewhat disappointing launches of HTC and Oculus’ consumer devices – both of which saw interest plateau in the post-launch period – then it’s going to be PlayStation VR.
Is that what Sony has in mind, though? One peculiarity of the PSVR launch is that beyond the specialist press, it’s something of a non-event. Marketing support for the launch is minimal; there’s far less hype and visibility around the product than there would be around, for example, the launch of a major game. Here in Japan, PSVR barely warrants a mention in Sony’s current barrage of advertising, which is promoting PlayStation 4 with TV and streaming site commercials that highlight the launch of games like Persona 5 and Yakuza 6, the arrival of new console hardware, and oh yeah, PSVR is a thing too.
One could argue that Sony would be foolish to push PSVR too hard given that pretty much the entirety of its early shipments are spoken for by pre-orders. We still don’t know how many units of PSVR will ship for launch, or how many are projected to ship by year-end, but every indication is that the numbers are relatively small, at least by comparison with the PS4’s installed base. It’s not unreasonable to expect that PSVR will be for all intents and purposes supply-constrained through into early 2017, making it comfortably the most commercially successful of the tethered VR platforms – regardless of whether the company spends a single cent on further marketing.
However, the slightest glance back over the history of hardware launches in the games business and beyond would demonstrate that companies generally do not row back their marketing budgets just because of being supply-constrained; if anything, this encourages them to redouble their efforts. That’s because supply constraints act as a multiplier on marketing budgets. When demand is outstripping supply, every extra notch that you can ratchet up that demand through your marketing efforts guarantees more media coverage, more word of mouth and more visibility for your product, creating a halo of desirability around the platform which can give a long-term boost to sales that lasts for months or even years after the initial supply constraints are lifted.
That Sony has seemingly decided to eschew that strategy for PSVR is interesting, but probably speaks to a confluence of a number of different factors. For a start, it’s rare for a platform holder to be putting not one but two major new pieces of hardware on the market at once, which is what Sony is doing with PSVR in October and PS4 Pro in November. A huge marketing push, widespread coverage of shortages and the resulting desirability halo that would build around PSVR would be great for the VR headset, but might negatively impact the now overshadowed PS4 Pro. That would hurt all the more if, as is likely, PS4 Pro is not supply constrained while PSVR is. That’s definitely a factor playing into Sony’s decision making here.
There’s something else in play too, though. Lots of software is on the way for PSVR, and there’s actually a pretty respectable line-up at the outset – but reviews of the system are fairly blunt about the extent to which much of it feels more like it’s demoing the hardware, and the concept of VR itself, rather than being a proper, full-strength VR game experience. The games aren’t just short, they expose kinks in the PS Move control system (which may be fixable or may be an innate problem PSVR just has to work around forever) and sidestep major issues instead of tackling them – for example, the Batman VR title’s decision to make the player jump from location to location, rather than walking between them, to avoid motion sickness.
In short, while there’s interesting and even accomplished stuff in there, it all sounds rather like the kind of thing that you play to show off a new system’s capabilities, rather than the kind of thing that makes you say, “you’ve got to go out and get PSVR so you can play this game”. The enthusiasts and the VR faithful don’t need a killer app – they just need enough of a taster to convince themselves that the killer apps will come, given time – but the general public absolutely does. It’s easy for enthusiasts – a category which, if you’re reading this, probably encompasses you – to underestimate the psychological barrier VR needs to overcome. For many consumers, the prospect of strapping on a headset that looks like a Daft Punk cosplay prop, isolating themselves from the world around them and potentially looking like a complete tool as they flail around with objects nobody else in the room can see is a pretty big ask.
A great killer app game that gets the world gushing will overcome that barrier. That may be on the way; all eyes are on January’s Resident Evil 7, which could potentially be VR’s first truly huge AAA title. Until that kind of game is available, though, Sony may be well advised to focus on the VR faithful and keep its marketing powder dry. That’s certainly what seems to have happened so far; this is entirely anecdotal, but I’ve been surprised at just how few people have asked whether I’m getting a PSVR (and if they can bring an offering of beer around in order to have a go on it). Far fewer people have asked me about PSVR than have asked about PS4 Pro, or even Xbox One S. Enthusiasts know about it; the average gamer simply doesn’t seem to care yet.
Given the hurdles facing mainstream VR adoption, that may be for the best. It’s important that when the majority of consumers start to experience VR, their experience of it is fantastic, not just a demo or a proof of concept but a game that makes them want to own this technology right now. Saving the marketing blitz and letting PSVR’s software library mature first could be the best way to prevent the so-called Year of VR from ending with the Winter of VR Discontent.
Oculus CEO Brendan Iribe has emphasized the freedom that Oculus VR allows its employees to support their personal views, a freedom he said also applied to Palmer Luckey.
In a post on his Facebook page, Iribe spoke about Luckey’s regret at the negative impact the situation had created for “the company, our partners, and the industry.” However, he offered a measure of support for Oculus VR’s founder, citing Luckey’s right to independent political beliefs.
“Everyone at Oculus is free to support the issues or causes that matter to them, whether or not we agree with those views,” he said. “It is important to remember that Palmer acted independently in a personal capacity, and was in no way representing the company.”
Original Story: After numerous publications (GamesIndustry.biz included) no doubt flooded Oculus with requests for comment on Friday, when the story broke that Palmer Luckey allegedly had been funding a pro-Trump “shitposting” group, the man himself took to Facebook (which owns Oculus) to apologize for his actions.
“I am deeply sorry that my actions are negatively impacting the perception of Oculus and its partners.The recent news stories about me do not accurately represent my views,” he wrote. “Here’s more background: I contributed $10,000 to Nimble America because I thought the organization had fresh ideas on how to communicate with young voters through the use of several billboards. I am a libertarian who has publicly supported Ron Paul and Gary Johnson in the past, and I plan on voting for Gary in this election as well.”
Luckey went on to deny that he was the author behind the ‘NimbleRichMan’ posts on Reddit and the vice president of Nimble America: “I am committed to the principles of fair play and equal treatment. I did not write the ‘NimbleRichMan’ posts, nor did I delete the account. Reports that I am a founder or employee of Nimble America are false. I don’t have any plans to donate beyond what I have already given to Nimble America. Still, my actions were my own and do not represent Oculus. I’m sorry for the impact my actions are having on the community.”
The original Daily Beast article, however, confirmed that Luckey was indeed the man behind “NimbleRichMan” and author Gideon Resnick reiterated that fact on his Twitter account today.
Here is where I sought that clarification from him and what he said. pic.twitter.com/pPfLKUX5Cg
— Gideon Resnick (@GideonResnick) September 24, 2016
One more email: Luckey clearly states in here that the NimbleRichMan account represents him. pic.twitter.com/RC4mXPFDkM
— Gideon Resnick (@GideonResnick) September 24, 2016
So it’s essentially Resnick’s word against Luckey’s, but Oculus Head of Content Jason Rubin urged people to take Luckey at his word. “I wanted to give @PalmerLuckey a chance to respond before I posted… knowing Palmer, I take him at his word,” Rubin tweeted, adding, “30 years in the Game business I would not work in a place that I thought condoned or spread hate. Nor would I remain silent if I saw it.”
Denials from Luckey and support from Oculus colleagues aside, the development community is already reacting, and some are pulling support for the Rift. Polytron, which is making a VR game called SuperHyperCube, noted on Twitter that it will not be supporting Oculus now. Scruta Games took it one step further, asking that Luckey leave the company he founded: “Until @PalmerLuckey steps down from his position at @oculus, we will be cancelling Oculus support for our games,” the developer said. Tomorrow Today Labs issued a similar sentiment: “Hey @oculus, @PalmerLuckey’s actions are unacceptable. NewtonVR will not be supporting the Oculus Touch as long as he is employed there.”
Edge of Nowhere developer Insomniac Games said it “condemns all forms of hate speech” and issued the following statement to Polygon as well: “While everyone has a right to express his or her political opinion, the behavior and sentiments reported do not reflect the values of our company. We are also confident that this behavior and sentiment does not reflect the values of the many Oculus employees we work with on a daily basis.”
Not all developers are punishing Oculus for Luckey’s actions, however. James Green, co-founder of VR developer Carbon Games, commented to Motherboard, “This backlash is nonsense. I absolutely support him doing whatever he wants politically if it’s legal. To take any other position is against American values.”
Oculus has had a number of obstacles to overcome on its path to retail, with Rift headsets not making it out to Kickstarter backers for months after launch and some consumers feeling that they had been misled on what the actual price of the unit would be. Luckey admitted that he “handled the messaging poorly” back in January, and now just as manufacturing of the headset has finally improved and the flow of software has started to increase as the company prepares to launch its Oculus Touch controllers, this PR storm and accusations that its founder is vice president of a racist, pro-Trump organization could represent a significant setback. It’s going to be interesting to see how this all plays out in the next few weeks and as we head into the holiday shopping season.
A little bit of clarity can go a long way. A few weeks ago at the reveal of the PS4 Pro, in a staff roundtable I questioned whether Sony’s new console would hurt Microsoft’s chances with the more powerful Scorpio. I also gave Sony an edge because of its HDR rollout to all PS4s. As it turns out, the HDR update is practically useless (no games supported yet and no video streaming) and the PS4 Pro itself will see most games upscaled, according to Sony Interactive boss Andrew House.
While PS4 architect Mark Cerny did make it clear during the conference that the Pro does not render games in true 4K resolution, many fans had no doubt assumed it would and likely glossed over his technical explanation of the Pro’s “streamlined rendering techniques” and “temporal and spatial anti-aliasing.” It’s hard to say how much consumers will care when the Pro goes on sale in November, but Microsoft wasted no time in puffing up its chest to declare its superiority with a console that won’t ship for many, many months.
Microsoft Studios Publishing general manager Shannon Loftis told USA Today, “Any games we’re making that we’re launching in the Scorpio time frame, we’re making sure they can natively render at 4K.” Moreover, Albert Penello, senior director of product management and planning at Xbox, hammered home the point with our sister site Eurogamer, commenting, “I think there are a lot of caveats they’re giving customers right now around 4K. They’re talking about checkerboard rendering and up-scaling and things like that. There are just a lot of asterisks in their marketing around 4K, which is interesting because when we thought about what spec we wanted for Scorpio, we were very clear we wanted developers to take their Xbox One engines and render them in native, true 4K. That was why we picked the number, that’s why we have the memory bandwidth we have, that’s why we have the teraflops we have, because it’s what we heard from game developers was required to achieve native 4K.”
That’s a punch to the gut in true console war fashion, and one that Microsoft is no doubt happy to get in during a console cycle which has seen PS4 dominate. It may not seem like a big deal right now, as 4K TV sales are still relatively minor, but the prices are falling and interest in 4K and HDR is picking up, not only with consumers, but also with game developers and content providers for streaming services like Netflix. This could be a decent holiday for the 4K TV market, and by the time Scorpio actually does launch there will be that many more 4K TV owners to target with the only console that renders 4K natively. That’s a nice feather in Microsoft’s cap.
This week we also featured an interesting writeup on VR and AR from DICE Europe. While VR proponents like Unity’s Clive Downie said there will be over a billion people using VR in the next 10 years, others such as Niantic’s John Hanke and Apple boss Tim Cook cast doubt on the long-term appeal and commerical success of VR. Of course, this isn’t the first time that people have wondered whether VR will ever move beyond a niche category – and indeed, our Rob Fahey talks about the over-investment in the space in his column today – but the idea that VR is merely an intermediary step before AR comes into its own is the wrong way to think about these technologies in my view.
Just because they both offer altered realities and utilize headsets does not mean they should be lumped together. The use cases and experiences are vastly different for VR and AR, and while I agree that AR likely is the better bet from a commercial standpoint, I don’t underestimate VR for one second. I’ve had way too many fun game sessions using the tech already, and it’s early days. Beyond that, serious movie makers are starting to leverage the great potential of the medium. Jon Favreau (Iron Man, The Jungle Book), for example, is working on a VR film called Gnomes and Goblins and he’s even brought on veteran game designer Doug Church (System Shock, Thief) to fine tune the VR interactions.
The fact is VR has enormous storytelling potential and can immerse its users in ways that we’ve never experienced before. “As I work in film, so much has been done,” Favreau commented. “There are technological breakthroughs but there is less and less up in the air. You’re really writing a song in the same format that has been going on for at least a hundred years. And what’s interesting about VR is that, although I really don’t know where it’s going or if it’s going to catch on in a significant way culturally, I do know that there is a lot of unexplored territory and a lot of fun things as a storyteller for me to experiment with. It’s exciting to have so much fresh snow that nobody has walked through yet. There’s been no medium that I’ve felt that way since I’ve come into the business, where it feels like you can really be a pioneer.”
AR will be tremendously exciting in its own right, and I can’t wait for Magic Leap, HoloLens and castAR, but to think that VR will be cast aside to make way for AR’s ascendancy is totally off base.