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.
Video game maker Nintendo Co Ltd will develop a device to monitor a user’s fatigue and map their sleep, Chief Executive Satoru Iwata said on Thursday, the first offering from the company’s newly created healthcare division.
The device will be co-created with U.S. firm ResMed Inc, which currently makes products to treat sleep disorders, and will be available in the financial year ending March 2016.
“By using our know-how in gaming… to analyse sleep and fatigue, we can create something fun,” Iwata said.
Nintendo, better known for its Mario video game franchise and Wii and Wii U consoles, has said it expects its healthcare division to turn a profit in 2015/2016. The company already offers fitness games on its Wii console, played with a motion sensor controller.
According to an image Iwata shared at a media conference, the device will be about the size of a hand and can be placed on a user’s bedside table. It will use microwave transmission sensors to track sleep, with the data collected used to help users cultivate healthy sleeping habits.
Iwata refused to discuss the company’s sales expectations for the new device beyond saying that it may be offered via a subscription service rather than a one-off purchase.
“We only start something new if we think we will be able to create a big market, but as I’m not able to discuss pricing plans and other details today I don’t think there’s much point in giving a figure for our projected scale,” he said.
The device was launched a day after Nintendo reported an unexpected quarterly profit, after hit games gave a boost to sales of its Wii U console.
The game might be inspired by a lot of games, but the basic idea is that you are the leader of a Stone Age tribe and you have guide your tribe through civilization and human history. The ability exists for you to form alliances, trade with friends, and raid your enemies.
Reynolds has not said what is next for the new Big Huge Games, but if DomiNations is successful, it could fund more complex projects for console or PC according to our sources.
November Xbox One update, explaining that it will throw a bucketful of new features into the console.
The firm polishes the console experience on a monthly basis and this month sees it swathe the device in tweaks and social networking positives.
Whether you use the console to browse the internet, talk to people, do social networking, watch television, or even play games, you will see some sort of improvement, according to spokeschap Major Nelson.
“We’re bringing you new and exciting ways to watch TV and interact with the Xbox Live gaming community in this month’s Xbox One system update preview. Today, we will begin rolling out a ton of new features to members of the Xbox One preview programme,” said Nelson in a blog that also introduces an excited video walkthrough.
Cosmetic features include the ability to change the background on your Xbox One, and even use achievements from games in your wallpaper.
Braggish players will be able to add their best clips to their profile page and generally swagger around the place, while people who like to crow on a range of platforms will be able to tweet clips from games.
Users can also share their location in their biography pages, and through the Smartglass app can see when anyone has checked out their profile.
Smartglass users can also check out their friends’ activities on the Xbox One, and can line up downloads of content, for example the free titles provided to Gold level subscribers.
The Xbox One store has been improved and Microsoft said that this would make it “easier to find and download apps for your Xbox One”.
The November update is out will be out, unsurprisingly, next month.
PS4 is going gangbusters, 3DS continues to impress, Steam and Kickstarter have between them overseen an extraordinary revitalisation of PC gaming, and mobile gaming goes from strength to strength; yet it’s absolutely clear where the eager eyes of most gamers are turned right now. Virtual reality headsets are, not for the first time, the single most exciting thing in interactive entertainment. At the Tokyo Game Show and its surrounding events, the strongest contrast to the huge number of mobile titles on display was the seemingly boundless enthusiasm for Sony’s Morpheus and Oculus’ Rift headsets; at Oculus’ own conference in California the same week, developers were entranced by the hardware and its promise.
VR is coming; this time, it’s for real. Decades of false starts, disappointments and dodgy Hollywood depictions will finally be left behind. The tech and the know-how have finally caught up with the dreams. Immersion and realism are almost within touching distance, a deep, involved experience that will fulfil the childhood wishes of just about every gamer and SF aficionado while also putting clear blue water between core games and more casual entertainment. The graphical fidelity of mobile devices may be rapidly catching up to consoles, but the sheer gulf between a VR experience and a mobile experience will be unmistakeable.
That’s the promise, anyway. There’s no question that it’s a promise which feels closer to fulfilment than ever before. Even in the absence of a final consumer product or even a release date, let alone a killer app, the prototypes and demos we’ve seen thus far are closer to “true” virtual reality than many of us had dared to hope. Some concerns remain; how mainstream can a product that relies on strapping on a headset to the exclusion of the real world actually become? (I wouldn’t care to guess on this front, but would note that we already use technology in countless ways that would have seemed alien, anti-social or downright weird to people only a generation ago.) Won’t an appreciable portion of people get motion sickness? (Perhaps; only widespread adoption will show us how widespread this problem really is.) There’s plenty to ponder even as the technology marches inexorably closer.
One thing I found myself pondering around TGS and Oculus Connect was the slightly worrying divergence in the strategies of Sony and Oculus. A year or even six months ago, it felt like these companies, although rivals, were broadly marching in lock step. Morpheus and Rift felt like very similar devices – Rift was more “hobbyist” yet a little more technically impressive, while Morpheus was more clearly the product of an experienced consumer products company, but in essence they shared much of the same DNA.
Now, however, there’s a clear divergence in strategy, and it’s something of a concern. Shuhei Yoshida says that Morpheus is 85% complete (although anyone who has worked in product development knows that the last 10% can take a hell of a lot more than 10% of the effort to get right); Sony is seemingly feeling reasonably confident about its device and has worked out various cunning approaches to make it cost effective, from using mobile phone components through to repurposing PlayStation Move as a surprisingly effective VR control mechanism.
By contrast, Oculus Connect showed off a new prototype of Rift which is still clearly in a process of evolution. The new hardware is lighter and more comfortable – closer to being a final product, in short – but it’s also still adding new features and functionality to the basic unit. Oculus, unlike Sony, still doesn’t feel like a company that’s anywhere close to having a consumer product ready to launch. It’s still hunting for the “right” level of hardware capabilities and functionality to make VR really work.
I could be wrong; Oculus could be within a year of shipping something to consumers, but if so, they’ve got a damned funny way of showing it. Based on the tone of Oculus Connect, the firm’s hugely impressive technology is still in a process of evolution and development. It barely feels any closer to being a consumer product this year than it did last year, and its increasingly complex functionality implies a product which, when it finally arrives, will command a premium price point. This is still a tech company in a process of iteration, discovering the product they actually want to launch; for Luckey, Carmack and the rest of the dream team assembled at Oculus, their VR just isn’t good enough yet, even though it’s moving in the right direction fast.
Sony, by contrast, now feels like it’s about to try something disruptive. It’s seemingly pretty happy with where Morpheus stands as a VR device; now the challenge is getting the design and software right, and pushing the price down to a consumer friendly level by doing market-disruptive things like repurposing components from its (actually pretty impressive) smartphones. Again, it’s possible that the mood music from both companies is misleading, but right now it feels like Sony is going to launch a reasonably cost-effective VR headset while Oculus is still in the prototyping phase.
These are two very different strategic approaches to the market. The worrying thing is that they can’t both be right. If Oculus is correct and VR still needs a lot of fine-tuning, prototyping and figuring out before it’s ready for the market, then Sony is rushing in too quickly and risks seriously damaging the market potential of VR as a whole with an underwhelming product. This risk can’t be overstated; if Morpheus launches first and it makes everyone seasick, or is uncomfortable to use for more than a short period of time, or simply doesn’t impress people with its fidelity and immersion, then it could see VR being written off for another decade in spite of Oculus’ best efforts. The public are fickle and VR has cried wolf too many times already.
If, on the other hand, Sony is correct and “good enough” VR tech is pretty much ready to go, then that’s great for VR and for PS4, but potentially very worrying for Oculus, who risk their careful, evolutionary, prototype after prototype approach being upended by an unusually nimble and disruptive challenge from Sony. If this is the case (and I’ve heard little but good things about Morpheus, which suggests Sony’s gamble may indeed pay off) then the Facebook deal could be either a blessing or a curse. A blessing, if it allows Oculus to continue to work on evolving and developing VR tech, shielding them from the impact of losing first-mover advantage to Sony; a curse, if that failure to score a clear win in the first round spooks Facebook’s management and investors and causes them to pull the plug. That’s one that could go either way; given the quality of the innovative work Oculus is doing, even if Sony’s approach proves victorious, everyone should hope that the Oculus team gets an opportunity to keep plugging away.
It’s exciting and interesting to see Sony taking this kind of risk. These gambles don’t always pay off, of course – the company placed bets on 3D TV in the PS3 era which never came to fruition, for example – but that’s the nature of innovation and we should never criticise a company for attempting something truly interesting, innovative and even disruptive, as long as it passes the most basic of Devil’s Advocate tests. Sony has desperately needed a Devil’s Advocate in the past – Rolly, anyone? UMD? – but Morpheus is a clear pass, an interesting and exciting product with the potential to truly turn around the company’s fortunes.
I just hope that in the company’s enthusiasm, it understands the absolute importance of getting this right, not just being first. This is a quality Sony was famed for in the past; rather than trying to be first to market in new sectors, it would ensure that it had by far the best product when it launched. This is one of the things which Steve Jobs, a huge fan of Sony, copied from the company when he created the philosophies which still guide Apple (a company that rarely innovates first, but almost always leapfrogs the competition in quality and usability when it does adopt new technology and features). For an experience as intimate as VR – complete immersion in a headset, screens mere centimetres from your eyes – that’s a philosophy which must be followed. When these headsets reach the market, what will be most important isn’t who is first; it isn’t even who is cheapest. The consumer’s first experience must be excellent – nothing less will do. Oculus seems to get that. Sony, in its enthusiasm to disrupt, must not lose sight of the same goal.
When Titan first came to light in 2007, most people assumed it would be Blizzard’s next big thing, ultimately taking the place of World of Warcraft which was likely to see further declines in the years ahead. Fast forward seven years, WoW clearly has been fading (down to 6.8 million subs as of June 30) but Blizzard has no MMO lined up to replace it, and that fact was really hammered home today with the surprise cancellation of Titan. In fact, the developer stressed that it didn’t want to be known as an MMO company and one may not be in its future. Cancelling the project this late in the game may have cost Blizzard several tens of millions of dollars, analysts told GamesIndustry.biz.
“Development costs for Titan may have amounted to tens of millions, perhaps $50 million or more. This is not an unusual event, however. Blizzard has cancelled several games in various stages of development in the past. Costs for unreleased games can be significant, but launching substandard games can harm the reputation of a successful publisher such as Blizzard. Expenses for development can be considered R&D, and benefits can include invaluable training, IP and technology that can be applied to other games,” explained independent analyst Billy Pidgeon.
Wedbush Securities’ Michael Pachter estimated an even higher amount lost: “My guess is 100 – 200 people at $100,000 per year, so $70 – 140 million sunk cost. It’s pretty sad that it took so long to figure out how bad the game was. I expect them to go back to the drawing board.”
Indeed, the market has changed considerably in the last seven years, and while MMOs like EA’s Star Wars: The Old Republic struggle to find a large audience, free-to-play games and tablet games like Blizzard’s own Hearthstone are finding success. Blizzard has no doubt been keenly aware of the market realities too.
“As far back as 2013, they had already stated Titan was not likely to be a subscription-based MMORPG. This is consistent with a market that is increasingly dominated by multiplayer games that are either free to play or are an expected feature included with triple-A games such as Call of Duty. Titanfall and Destiny sold as standalone games supplemented by paid downloadable add-ons. Blizzard maintains very high standards of quality, so expectations will be steep for new franchises as well as for sequels,” Pidgeon continued.
DFC Intelligence’s David Cole agreed, noting that after seven years of development in an industry where trends and technologies change at a rapid pace, Blizzard simply had to pull the plug on Titan.
“They realized that unless a big MMO is out-of-this-world unbelievable it won’t work in today’s market where it competes against a bunch of low cost options. If they felt that it just wasn’t getting to that point it makes sense to cut your losses,” he noted. “Also, you see games like League of Legends and their own Hearthstone which are doing very well on a much lower budget.”
“For Blizzard, I am expecting to see them continue to focus on high quality products but also focus on products with shorter development cycles and less cost. The market is just not in a place where you can have games with 7+ year development. It is changing too fast.”
For most developers, junking a seven-year long project would instantly spell turmoil, but thankfully for Blizzard, it’s part of the Activision Blizzard behemoth, which has a market cap of over $15 billion and, as of June 30, cash and cash equivalents of over $4 billion on hand. It’s a nice luxury to have.
We attended the first ever Oculus Connect conference, the beats and chatter of a cocktail reception just next door, Max Cohen is being brutally honest about the company’s mobile-based virtual reality headset.
“I can spend ten minutes talking about the problems with this device. We’re not afraid of them,” the VP of mobile says with a smile.
“It overheats if you run it too long. It is 60 Hertz low persistence, which means some people will notice flicker. The graphical quality is obviously a lot less than the PC. Battery life is a concern. There’s no positional tracking.
“We could try to say this is the be-all end-all of VR. We’d be lying. That’s a bad thing. We would hurt where we can get to the be-all end-all of VR. Everyone, Samsung, Facebook, Oculus, we’re all aligned with making a damn good product that we put out in the market and then working on improving it. Really soon, maybe even sooner than you think, we’ll get to that amazing VR experience for everyone.”
“Samsung, Facebook, Oculus, we’re all aligned with making a damn good product”
Cohen’s talking about the Gear VR, the Samsung backed headset that offers a more portable and accessible entry into the virtual reality world for developers and users alike. It’s John Carmack’s passion project at the company and clearly it’s Cohen’s too.
“The first thing they did was to put me in the HD prototype with the Tuscany demo. I was floored, of course,” he remembers.
“Then I got to see the Valve room and then he showed me this mobile project. It was running on a Galaxy S4 at the time. It crashed a little bit. There were a lot of problems with it, but I just thought this was so amazing. I went back and was talking to a friend of mine who’s an entrepreneur. He said it’s rare that you have the opportunity to work on transformational hardware, and that’s really what this was.”
The story of the Gear VR is a simple one; Oculus went to the Korean company hoping to work with them on screens for the PC-based Rift and found Samsung had been working on a headset you could simply slide a Samsung Galaxy phone into to experience virtual reality. Now the companies are working together on both devices, with Samsung fielding calls from Carmack on a regular basis.
“It’s a collaboration. It’s not we tell them what to do or they tell us what to do,” Cohen continues. “We’re the software platform, so when you put that on, you’re in Oculus, but that wouldn’t be possible without maximizing the hardware. Carmack and our team works very closely with their engineering team. They make suggestions about UI as well. We’re working together to make the best possible experience. If it wasn’t collaborative, this thing just honestly wouldn’t function because this is really hard to do.”
The focus of Oculus Connect isn’t the media or sales or even recruitment, but developers. Supporting them, showing them the technology, offering them advice on the new territory that is virtual reality. Cohen, like everyone else I speak to at the weekend, believes developers and their content is absolutely key to the success of the hardware.
“At the end of the day, we want to make the developers’ lives as easy as possible so they can make cool content.”
“Facebook invested in the platform. They didn’t buy it. What they did is they’re also committing money to make sure it’s successful on an ongoing basis”
That content will be supported by an app store, and Cohen wants it to be a place where developers can make a living, rather than just a showcase of free demos. Jason Holtman, former director of business development at Valve, is overseeing its creation.
“We’re going to launch initially with a free store, but maybe a month later, follow along with commerce,” says Cohen.
“At the end of the day, as great as doing the art for free and sharing that is, we will have a hundred times more content when people can actually monetize it. This is a business. There’s nothing wrong with that. People need to be able to feed themselves. Our job is to make the platform as friendly for developers as we can so that it’s painless. You don’t have to worry about a bunch of overhead.”
There’s a sense that the Facebook money, that headline-grabbing $2 billion, has given the team the luxury of time and the chance to recruit the people they need to make sure this time virtual reality lives up to its promises. Other than that, Facebook seems to be letting Oculus just get on with it.
“That’s the thing… a lot of people, with the Facebook acquisition, asked how that would impact us and the answer is it hasn’t, in terms of our culture, and Facebook’s actually supportive of the way Oculus is because we know that content makes or breaks a platform,” says Cohen.
“They invested in the platform. They didn’t buy it. What they did is they’re also committing money to make sure it’s successful on an ongoing basis. We could have continued to raise a lot of venture capital. It would have been very expensive to do it right. Now we have replaced our board of directors with Facebook, but that’s completely fine. They are helping us. They are accelerating our efforts.”
No one at Oculus is talking about release dates for consumer units yet, and Cohen is no different. It’s clear that he and the team are hungry for progress as he talks about skipping minor updates and making major advances. He talks about “awesome” ideas that he’s desperate to get to, and pushing the envelope, but what matters most is getting it right.
“I think everyone understands that with a little bit more magic, VR can be ubiquitous. Everyone needs it. I think a lot of people understand what we need to do to get there, but it takes hard work to actually solve those things. Oculus and Facebook have lined up the right team to do it, but I want us to actually have time to do that,” says Cohen.
“We’re not trying to sell millions now. We’re trying to get people and early adopters, tech enthusiasts and all that interested in it.”
In July, Gamasutra’s annual developer salary survey reported that the best compensated job for hands-on game creators wasn’t programmer or producer, but audio professional. That didn’t sound right to the organizers of audio conference GameSoundCon, so they conducted their own survey aimed squarely at audio specialists in the gaming industry, the results of which they released today.
Gamasutra acknowledged its own numbers on audio professionals were likely skewed by a few factors. They only had 33 respondents, they only counted full-time professionals even though audio work is frequently done on a freelance basis, and their survey base of Game Developer Conference attendees was likely skewed to more senior people, as developers might not invest in sending fresh recruits to the show. GameSoundCon’s survey drew 514 responses, and as might be expected, painted a less lucrative picture of the field.
“Most game audio jobs, whether they are composers or sound designers, are freelance,” said GameSoundCon executive director Brian Schmidt. “Game audio is increasingly an outsourced industry.”
According to the survey, the average salaried audio professional position in the game industry pays $70,532. However, only 37 percent of those who took the survey were salaried employees. About 12 percent of respondents said they were paid by the hour, day, or week.
For freelance work, the average project fee was $28,091. However, that number was skewed significantly by big-budget games, where per-project fees could come in greater than $250,000. For indie or casual games, the average project fee dropped to just $9,830. For projects where the audio contractor retained rights to their work, the average fee dipped still lower, to $4,481, with as many projects paying $1,500 or less as there were paying more.
“There does seem to be a good ‘career path’ in game audio,” Schmidt added. “You can start out as a composer for indie games, and end up with a 6-figure salary as an audio director. Being able to get technical definitely gives you a leg up; more than 60 percent of responders say they provided audio content as well as technical services for implementation of the audio.”
The survey also underscored some rarities in the field. Gender diversity is lacking among audio professionals, as 96 percent of respondents were male. Royalties are also rare, with only 2 percent of composers per-unit payments for big-budget titles. Royalties were somewhat more common among indie and casual projects, with 17 percent reporting per-unit payments.
Soundtrack sales also didn’t do much to pad composers’ pockets, as 5 percent of large-budget games included a clause paying out for soundtrack sales. However, that number increased to 18 percent for indie or casual titles.
While we would not call Alan Wake from developer Remedy Entertainment a disappointment, we would say that it took a long time to make, cost a lot of money, and didn’t quite live up to what everyone though it would be in the end.
The one thing about Alan Wake has been however, that over time it has perhaps gained a bit of a following. Creative director Sam Lake from Remedy has been quoted as saying that, “while the sequel for Alan Wake didn’t work out at this point, but we are definitely are looking for opportunities to do more with Alan Wake when the time is right.”
As for when the time might be right, that is really hard to say. We know right now that the studio is hard at work on Quantum Break which is on track for a 2015 release, so we don’t think we are going to see a squeal anytime soon. The good news for fans is that it does seem that there is at least interest in a squeal.
Mike Hickey, an equity researcher for the Benchmark Company, penned a note which fuelled the trading, claiming that the two companies were engaged on an “emerging romance”.
“For Activision, acquiring Take-Two Interactive would be a no-brainer, in our view, circling some of the strongest development talent and owned IP in the world, within a company that has nearly $1 billion in cash and trades at a comparably lower multiple,” Hickey’s report reads. “With the acquisition of Take-Two Interactive, Activision would have arguably the three strongest development studios in the world with Rockstar Games, Bungie and Blizzard.”
By acquiring Take Two’s portfolio, Hickey believes that Activision could offer a rolling catalogue of massively high-profile AAA console titles, capitalising massively on the tremendous performance of the current generation of new machines.
Mike Hickey, Equity Researcher, The Benchmark Company LLC
“While Activision has historically managed their performance profile around franchises they can annualize, their $500 million investment in Bungie seems to be a departure from that philosophy, as we suspect the venture will prove difficult to annualize. The opportunity for Activision to intelligently layer future releases from Rockstar, Bungie and Blizzard, could in-part enable Activision to annualize future performance from what today is arguably a less linear performance profile.
“We would also note that Activision’s mega performance foundation with World of Warcraft is trapped within a life cycle decline, their Skylanders franchise will face considerable pressure from Disney and Call of Duty is vulnerable to franchise fatigue from consistent annual iterations. Therefore, acquiring GTA, Red Dead, Borderlands, NBA 2K, BioShock… etc. Along with the potential performance opportunity from a new MMO and movie adoption of GTA from Rockstar Games… Acquiring Take-Two Interactive would seem like a very smart move for Activision.”
Hickey doesn’t see the potential deal being motivated entirely by a desire for direct growth, however. He points to shared cinematic ambitions as the key factor in any merger. Activision has close ties to Hollywood, and its attention, as evinced by the recruitment of superstar Kevin Spacey for the latest Call of Duty title. Take Two is rumoured, not for the first time, to be shopping around for a potential film adaptation of Grand Theft Auto, something which Activision’s capital and connections could make a great deal easier.
Piers Harding-Rolls, Director, Head of Games, IHS
“We suspect that Activision’s strategic alignment into the movie business, could in-part be related to an emerging romance wrinkle between the two companies and the Houser’s, leading toward a possible Take-Two acquisition,” Hickey continues.
Some other analysts are more cautious, however. Piers Harding-Rolls, head of games at major analyst IHS, doesn’t necessarily see the move making sense for the larger company.
“I would file this rumour under unlikely at this point,” he told GamesIndustry.biz in an exclusive statement. “Activision’s MO is relatively anti-risk and it has a calculated long-term growth strategy based on establishing and developing billion dollar franchises that unlock large amounts of value for the company. Activision is well placed to deliver that once again following the Skylanders success with Destiny and I don’t believe acquiring Take Two and its stable of IP fits with this strategy.
“Having said that, Activision is likely to be looking for further growth opportunities – it has yet to build a substantial games apps business and a number of its franchises are longer in the tooth or more competitively challenged than before. As such, I think we can expect Activision to be more rigorously examining adjacent markets – the movie opportunity makes sense in this context – as well as planning for the development of new franchises within its portfolio.”
True or not, the note was enough to light a fire under the imaginations of traders. Take Two’s stock actually reached a six year high on July 28, at 23.67, but dropped soon after. Friday’s news pushed it up 4.67 per cent, with Activision’s stock also rising 0.81 per cent to 23.54.
Were Kotick and Hirshberg to take the plunge, they’d have to put a more convincing offer on the table than EA managed in 2008, the last time a public offer was made for Take Two. Then, a deal worth $2 billion wasn’t enough to convince Take Two shareholders, who felt that the company was being undervalued, rejecting the offer.