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.
Nintendo’s Shigeru Miyamoto doesn’t want to make games for “passive” people; the attitude that games ought to be to be a roller-coaster ride, to entertain without challenge, is, to his mind, “pathetic”. That was the message from the legendary game designer in an E3 interview with Edge magazine, published in this month’s edition; it’s been presented by other news outlets as a sign of a Nintendo U-turn, moving away from the casual market it sought with the Wii and the DS in favour of re-engaging core gamers.
That’s exactly the sort of message that most of the games media wants to hear, of course. The media, after all, speaks exclusively to core gamers; casual players generally don’t bother with specialist media. “Nintendo has seen the error of its ways and realised that the only people worth making games for are you, my dear brethren!” is a crowd-pleaser of a message; but it’s also a pretty big leap to make from the comments Miyamoto actually made.
First, the context. Edge had just challenged Miyamoto over the fact that his prototype games at E3 were all somewhat difficult to play. They used the Wii U GamePad in new ways which it took a while to get accustomed to; the question implied in the text of Edge’s interview isn’t about casual games at all, but about the difficulty level of the prototypes. Miyamoto’s response does make clear a mental distinction between different types of game consumer and a preference for those who enjoy some challenge in their entertainment, but to extrapolate that into a U-turn in Nintendo’s development priorities is an overreach.
In fact, Miyamoto’s comments – equating passivity with “the sort of people who, for example, might want to watch a movie. They might want to go to Disneyland. Their attitude is ‘OK, I am the customer; you are supposed to entertain me’” – are punching in a number of directions at once. Certainly, he’s frustrated by people who play games without ever really engaging with them as a challenge; I doubt he’s a fan of free-to-play systems that allow you to pay money to bypass challenges. Equally, though, those comments are an attack on some approaches to AAA game design; barren technological wonders which serve as little more than on-rails galleries for artwork and pale narrative. Miyamoto isn’t saying “casuals have ruined the market”; far from it. He’s saying that there are consumers who demand spoon-fed entertainment at all points of the spectrum from core to casual, and that he doesn’t want to make games for any of them. (It’s also worth noting that he’s not really blowing his top over this; “pathetic” doesn’t carry the same kind of stinging indictment in Japanese that it does in translation.)
Later in the Edge interview, Miyamoto veers back to similar territory when he talks about the proliferation of mainstream game-capable platforms like iOS and Android devices. While adamant that Nintendo needs to continue to make hardware as well as software, he’s delighted that these new platforms exist, because they provide an “on-ramp” for consumers who haven’t engaged with games before. Nintendo previously saw itself holding a responsibility to try to open up new demographics for the games industry; now it seems that we’ve reached a tipping point, technologically and culturally, where that’s happening by itself.
Edge speculates that this means Miyamoto (and hence Nintendo) believes that the window has shut on making games for entry-level gamers. Titles like Brain Training, which opened up the DS to a huge audience of people who had rarely if ever played games before, may now be pointless; the consumers they ought to target are all playing games on their phones and tablets, so there isn’t an addressable market remaining there for dedicated hardware and more expensive (non-F2P) games. This is fair analysis, and indeed, it probably features in Nintendo’s thinking; let iOS serve as the entry level for new gamers and then hope that those who enjoy the experience will ultimately upgrade to the superior offerings available on a dedicated console.
At the same time, though, Nintendo itself has a conception of “casual” and “core” that probably isn’t shared by the majority of sites reporting Miyamoto’s comments. Miyamoto talks not about themes but about enjoyment of challenge as the distinction between the two groups. To him, a supposedly “adult” game full of blood and ripe language could be utterly casual if it spoon-feeds players with dull, linear gameplay. Meanwhile, a brightly coloured Mushroom Kingdom epic could qualify as “core” if it challenges players in the right way. Consequently, Nintendo’s family-friendly IP and the broad appeal of its themes is entirely compatible with a focus on “core games”, to Miyamoto’s mind. What he’s talking about changing is something at the root of design, not the thematic wallpaper of the company’s games; he wants to challenge people, not to force Nintendo’s artists to remove all the primary colours from their Photoshop palettes.
Viewed in this light, Miyamoto’s comments are an earnest and down-to-earth appraisal of Nintendo’s present situation; still recovering from the heady days of the Wii and figuring out how much of that flash-in-the-pan market is really sustainable, but knuckling down to the challenge of entertaining and delighting (and of course, selling to) those within the audience who really enjoyed games rather than latching onto the platform as a fad. Contrary to the more excitable reportage on his comments, Miyamoto is promising no major changes to Nintendo’s approach; rather, he’s re-committing himself and the company to the same course of action which delivered games like Mario Kart 8, a title firmly within the family-friendly Nintendo tradition and absolutely celebratory of challenge and good design.
“Core gamer” is a phrase that’s picked up a strong whiff of soi-disant elitism and exclusion over the past few years; the phrase “as a core gamer…” in a forum post or comment thread is this odd little corner of society’s equivalent of “I’m not a racist, but…”, indicating a post that’s probably going to brim with self-important awfulness. The bête noire of the core gamer is the “casual”, and just as any move by a game creator or publisher to cater to “casuals” is despised and derided, any prodigal son who declares their abandonment of the casual market and return to the core is greeted with an I-told-you-so roar of delight. This is a thin sliver of the market overall, of course, but a noisy one; as such, it’s worth reiterating that what Miyamoto absolutely did not say is that Nintendo is resetting its course to please these people. Nintendo, for many years to come, will still be a company defined by games that are broadly appealing, generally family-friendly and enormously accessible. Under Miyamoto’s watchful eye, they’ll also be challenging and engaging; but anyone taking his comments on “passivity” as near-confirmation that we’ll see Grand Theft Mario down the line is utterly misreading the situation.
Along with publishing some rather good games, Ubisoft has quietly been developing another important role over the past few years. Thanks to the outspoken nature of CEO Yves Guillemot and the company’s careful balancing of enthusiasm for new technologies and platforms with a decent degree of financial and management conservatism, Ubisoft has become a bellwether for the publishing industry. Perhaps a difference between French and American business culture plays a role, perhaps not; either way, where other firms equivocate and fall back on meaningless corporate double-speak, Ubisoft and its executives have developed a reputation for speaking openly and giving us an insight into what the publishing industry at large is actually thinking.
When Guillemot pronounces, then, that his company is no longer going to launch “mature” titles on Wii U – Watch_Dogs will be their last such effort, following the disappointing performance of Assassin’s Creed on the platform – you can safely bet that it’s not acting in isolation. What Ubisoft says in the open is almost certainly precisely the strategy being pursued by other publishers as well; they’re just more likely to try and veil it with empty platitudes about what a great partner Nintendo is and how important it is to the industry, effusive corporate praise which, once picked apart, actually carries no commitment of substance to the Wii U platform.
Nor should any such commitment be forthcoming. If mature cross-platform titles aren’t selling on the Wii U, which they are not, then publishers should feel no obligation to continue to develop them for that platform. If this were a two-horse race between rival platform holders, some publishers might be tempted to continue support for the lagging console just in order to keep the front-runner on its toes, but with three strong companies competing, that branch of thought no longer produces fruit. Wii U is on its own, in this regard. Just as Ubisoft will continue to publish Just Dance titles and their ilk on the platform, where they do very well, other publishers will also find casual or kids’ games in their line-ups which suit the Wii U – but support for “mature” or “core” games will disappear in short order. I wouldn’t expect to see many multi-platform core titles on Wii U from 2015 onwards.
This will cause wailing and gnashing of teeth, because wailing and gnashing of teeth is essentially what the games media and the fanboy frenzy is set up to provide. The death knell! The final nail in the coffin! Vultures circle overhead! Once the core-game supply for Wii U completely dries up and other publishers admit to pursuing exactly the same policy as Ubisoft, headline writers will fall over themselves to drag out death-related imagery that would make a teenage goth poet blush. We know this, because it has happened before. Every Nintendo console since the SNES, in fact, has seen its third-party support fall off a cliff at some point in its life cycle. On each occasion, Nintendo’s failure to woo third-parties has been presented as a sign of inevitable doom.
Let’s lay it out, then; Nintendo’s home console platforms are terrible for third parties. They’ve been that way for twenty years and they’re not going to stop being that way any time soon. Honestly, it wouldn’t matter a tuppenny damn if Nintendo unveiled a PS4-beating HD console tomorrow; the business model, the branding and the market for Nintendo consoles is simply poison to the cross-platform “mature” mega-hit franchises like Call of Duty, GTA or Assassin’s Creed.
“Core gamers buy a Nintendo console as a second device because they want access to Nintendo exclusive titles, primarily first-party games”
Purchasers of Nintendo home consoles fall broadly into two categories. You’ve got core gamers who buy a Nintendo console alongside another gaming device – either a Sony or Microsoft console, or a PC; and you’ve got “casual” gamers, including the family and child segments, who buy a Nintendo device because they trust the brand. Neither of those groups is actually all that keen to buy the latest Call of Duty on a Nintendo platform. Core gamers buy a Nintendo console as a second device because they want access to Nintendo exclusive titles, primarily first-party games, but migrate back to their “primary” console to play mature cross-platform titles. Casual gamers don’t want to play mature cross-platform titles anyway. In both cases, they bought a Nintendo device to play Nintendo exclusives.
That’s exactly how Nintendo likes it. Nintendo consoles maintain pretty strong tie ratios – even the Wii, supposedly the dust-gatherer of the last generation, had a healthy software tie ratio – and the lion’s share of the games sold are Nintendo first-party games. It’s not that Nintendo “accidentally” builds consoles like the Wii and Wii U which are underpowered and “weird” compared with the other consoles of their era, then wrings its hands and wonders why third-parties aren’t launching loads of cross-platform games. Nintendo does this deliberately, building consoles that are custom-made to play Nintendo first-party games and which don’t risk being overrun by Call of Duty and its ilk and thus damaging or polluting the brand image which the company has carefully constructed over the past few decades. For Nintendo, the fact that Assassin’s Creed doesn’t sell too well on Wii U is a feature, not a bug, because it means that the company’s own first-party titles remain solidly in the spotlight and the brand image of the console remains Nintendo’s to control.
Of course, that approach begins to look a little less wise when the console in question fails to sell very well, leaving Nintendo’s first-party titles with only a limited audience to address – which is exactly what’s happened with the Wii U. Yet the solution isn’t to throw in the towel and simply copy what Sony does – an enterprise in which Nintendo would almost certainly be doomed to fail. Nintendo needs to find a solution to its current woes which actually suits Nintendo; something which leverages all the things the company is good at and rescues its market position without simply becoming a clone of its rivals or, worse, just another software publisher jostling for attention on the App Store.
The solution, perhaps unsurprisingly for a company with such a long history, may lie in the past. Nintendo doesn’t need or want a swathe of third-party multi-platform manshooters on the Wii U, and that’s absolutely fine. It does, however, need more breadth if not more depth in the Wii U’s software catalogue. The first-party games on the system are excellent, but it needs more of them, addressing more niches; maintaining Nintendo’s excellent quality standards while also exploring more genres, more aesthetics and more audiences.
Once upon a time, Nintendo used to do almost exactly that. It operated “second-party” studios within and outside Japan, most famously Britain’s Rare, which were independent but nestled under the wing of the platform holder, given access to Nintendo’s expertise, assets and finance in return for accepting creative guidance from Kyoto and publishing exclusively on Nintendo platforms. It also built relationships with publishers, mostly in Japan, which guaranteed exclusive titles to Nintendo systems on similar terms.
Some legacies of the second-party system remain. Bayonetta 2, which no other publisher or platform holder would fund, is a compelling Nintendo exclusive now; Hyrule Warriors, released in Japan last week, is a cross-publisher collaboration of a sort which the company should pursue more regularly. Yet these are mere echoes of a system which once guaranteed a strong flow of exclusive, high-quality titles to Nintendo platforms – titles which were different from the offerings on rival platforms, but compelling enough to ensure that gamers felt that they really, really needed a Nintendo console under the TV as well.
A resurrection and reinvigoration of second-party would make enormous sense for Nintendo today. It would look quite different to the system of the past in some regards; indie developers would have to form a big part of it, for example, although one could argue that Sony has already stolen a march on Nintendo in this regard with its policy of working closely with selected indie developers on PS4 and Vita. The scope would have to be as big as it once was if not bigger, though; studios around the globe, not just in Japan, with oversight from Kyoto but also enjoying the trust required both to build excellent new IP and to experiment with old properties. Rebuilding this system would require opening the Nintendo warchest, of course; and it would take time and patience, although both of those are qualities Nintendo has never lacked for. It would, however, do more that just giving Wii U a shot in the arm; it would set Nintendo up with a supply of IP and games that would sustain its platforms for generations to come.
Sources are suggesting that Activision is planning to launch an entertainment division that would be responsible for creating movies and TV shows based on Activision intellectual properties. The move might leave many scratching their heads if true since so many others have failed at trying to turn video game IP into gold.
Word is that CEO Bobby Kotick is taking to folks in an effort to secure the right talent to make this happen. Kotick has to be aware that this has not gone well for its competitors, but he apparently thinks that Activision IP is different and they will have no problem giving the people want they want.
Our take on this is that we will wait and see what happens, but it will not be easy to be successful, regardless of the IP that you have in your stable. The bigger question might be is it really worth the money and effort to try and make it work?
Activision Blizzard reported its financial results for the quarter ended June 30 today, revealing an unprecedented reliance on digital revenues.
The publisher reported revenues of $970 million in sales on a GAAP basis, 49 percent of which came from digital channels. On a non-GAAP basis (excluding the impact of changes in deferred revenues), the digital percentage was actually 73 percent of the company’s $658 million in sales. Activision attributed the digital strength to Blizzard’s lineup of titles (World of Warcraft, Hearthstone, and Diablo III), combined with digital sales for Call of Duty.
However, not all of those digital sales drivers posted strong numbers for the quarter. World of Warcraft in particular lost about 800,000 subscribers over the period, and as of the end of June was down to a paying player base of 6.8 million gamers. However, Activision Blizzard characterized this decline as a “seasonal” dip in advance of the next expansion, Warlords of Draenor, which is set to launch later this year. The publisher likened the downturn to the subscriber losses that happened in 2012 ahead of the Mists of Panderia launch.
On a GAAP basis, Activision Blizzard revenues were down nearly 8 percent, with net income down 37 percent to $204 million. However, the publisher still beat its previous guidance. On a non-GAAP basis, revenues were up about 10 percent to $658 million, while non-GAAP net income was reported at $45 million, down 50 percent year-over-year.
The quarter’s performance gave Activision Blizzard enough confidence to update its previous guidance for the full year. For calendar year 2014, the publisher had previously forecast total GAAP revenues of $4.22 billion, but moved that up to $4.24 billion today. The company also projected earnings per share of $0.91, up from $0.89.
Whether you think it’s a fad or the next big thing, there’s no denying that the return of virtual reality, this time backed up by competent technology and plausible price-points, has caught the imagination of developers and their customers alike. Projects for Sony’s Morpheus and the Oculus Rift are popping up everywhere, from the modest to the monumental.
As of yet, though, none of the major publishers have publicly committed much to the new platforms, leaving it to smaller studios to test the waters of what could potentially form an entirely new frontier for games. Many of those smaller studios are changing their models and work-methods entirely to focus on the new technology, preparing to hit the ground running once consumers are finally able to get their hands on the headsets.
One of those studios is Patrick O’Luanaigh’s nDreams. A studio which has always enjoyed a broad remit, nDreams now has “around five [VR] projects on the go”, including forthcoming title The Assembly: a 3D VR adventure game which will see players investigating a ground-breaking scientific organisation which has started to push some ethical boundaries.
“We decided that an adventure game would make sense because we don’t have the budget to draw tons of environments that you run through at top speed,” Patrick tells me. “Adventure games work well because we’ve found that, when people play with VR, they want to really look around and explore. They want to examine the walls, everything, in a way you might not in a FPS.
“The game is split into sections of about 10-15 minutes long, which we thought makes sense for VR. We still don’t know what the final consumer versions will be like, but 10-15 minutes seems sensible. People can either do a chapter then take a break, or they can play through the entire game.
“We spent around six months prototyping lots of experiments with VR. What happens when your avatar wears glasses? What would it be like if it’s cold and you have frosty breath? What about different sized characters? That tested really nicely – Madeline is 5’1″ and Joel is 6 foot and you really notice that. You notice the breathing, the speed they walk at, the perspective. It’s all very different. You feel like you’re playing those roles.
“We’ve also got lots of specific things for VR, microscopes, binoculars, night vision goggles, things like that. They work really well. We’ve also got plenty of puzzles and other bits like vertigo and fear sections that we think are great for VR, so it’s a real medley.”
The Assembly is a definite step up for the developer in terms of scope and ambition, so I ask O’Luanaigh if the resource costs were pushed up even further by the technology they’re working with. In short, is making a VR game more expensive?
“I don’t know, honestly,” he admits. “It’s probably slightly more for VR, but there’s not a lot of difference. We’ve kind of picked our battle here and chosen a game we think would be great for VR, but one that we can also afford to make. This seemed like the right genre and approach. We’re taking influence from games like Gone Home and Dear Esther – with more puzzles, but still about exploring a great environment. I guess if we’d just done it as a Steam game it might have been a bit cheaper, but not a big difference.
The Shahid Effect: Sony’s indie push & VR
Being PC-based, the Oculus Rift has a clear advantage in attracting indie developers: working on an open platform with little or no restriction. That said, Sony has made a very strong argument to small studios this generation, something it will need to continue if it wants to recruit the most exciting VR ideas. O’Luanaigh agrees, and says that there’s no need for concern on that front.
“Sony has been fantastic,” he says, enthusiastically. “We’re very lucky in that we’ve been working on Home for a number of years, so we have a good relationship with Sony. Our account manager happens to be the evangelist for Morpheus as well, so they’ve been great. They’ve been very supportive.
“We saw the Morpheus very early, it was one of the things that persuaded us to pivot away from what we were doing and spend so much time and money on VR. They’ve been really open, really helpful. I’ve got nothing but positive things to say about Sony. I can’t wait to see the final hardware that’s going to launch to consumers.”
“It’s more about the design, doing things the right way. There are a lot of ways you can mess up VR really easily. We’ve figured out what works and what doesn’t and designed the game with that in mind. It’s working really nicely.”
The Assembly is due for release on both the Oculus Rift and Sony’s Morpheus headset, currently the two mindshare leaders of virtual reality tech. Whilst neither is likely to admit it, each has a vested interest in the success of the other – a reason which was floated to explain Valve passing on some of its own VR research to Oculus last year: if the tech is to succeed it needs to attract developers. To do that, a rough ‘gold standard’ needs to be established, giving developers a technological target to aim at for cross-platform games. Having used both the Oculus and Morpheus and found them to be roughly equivalent, I’m interested to know if O’Luanaigh sees parity in the two visors.
“They are very, very similar, technology-wise,” he confirms. “Obviously with Oculus being on PC it’s a lot more open, there’s more freedom to mess around, but it’s also easier for people to just stick stuff out, to make bad VR. That’s one of the big risks – it’s very easy make people feel ill. You have to have good software as well as hardware. I think it’s easier for Sony to control that, because it’s a closed platform. They can say, do this, do that; to make sure people don’t do stupid stuff. I suspect that Oculus will do something similar, but obviously it’s open, so people can put what they want up online.
“In terms of specs, though, they’re really very similar. We’re creating this game for both and there’s not a big difference. There are a few little things involved in supporting the PS4: the Dualshock and some of the ways that PSN works, but by and large they’re very similar.”
Moving away from comfortable ground is an essential part of growing almost any company, but when you’re relying on a third party, such as a platform holder, for your success, there’s an additional risk. nDreams must be confident about the future of virtual reality to put such stake in it, so I ask Patrick if there’s a sales point when they’ll breathe a little more easily.
“We’ve kind of come at it the other way,” he counters. “We believe it will work. We’ve got financial models and projections but it’s all a bit finger-in-the-air, it’s very hard to know. We’re committed to doing it though, we’ve got a lot of launch titles and we’re going to be pushing and growing those. We’re lucky in that we’re financially secure enough to do that without too much stress.
“We’ve been looking at things like previous install bases of hardware on consoles. If you look at the Kinect install base, which was amazing, really – something like 35-40 per cent on the 360 – we’ve made projections on a conservative install base over time. I actually think that it’s going to be better than that, given the excitement around VR and the customer reaction when they see it, but we’re being fairly conservative. With Oculus they’ve spoken about trying to sell a million, by a set point. We’ve been working along those lines. Again, we think it’s going to do really well.
“There’s going to be other headsets out there as well, that haven’t been announced, we think those are going to be very exciting. There’s not going to just be two headsets, there’ll be a number of things over the next few years. We’re going to try and work out as best we can what we think they can sell, but we want to be there at launch with products so we can build and learn what people like and don’t like.
“It’s definitely going to be more of a core audience at launch, but I think Facebook’s acquisition of Oculus means that it’s going to be a bit cheaper than it would have been. I think they can afford to give it away at cost, which is brilliant. But it’s really hard to put a finger on how much that market is going to be worth. We think it’s going to be a couple of billion within two years, but we’ll see. We may be massively over-egging, or hugely under-estimating it. What’s clear is that there’s massive potential here, it could really explode. When you get a great VR experience it’s really special.
“I was at E3 playing Alien Isolation on Oculus and, although I’m slightly embarrassed to admit it, when it came to the end I ripped my headset off because I was so scared. You really feel like the Alien is there and actually attacking you. I’ve never done that with Dead Space or Resident Evil or anything. It really heightens your emotions.”
I can attest to just how absorbing that experience can be, having lost myself in the Morpheus demo at GDC in March. Even surrounded by other gawking journalists and nervous PR, dropping that helmet on was, in many sense, completely akin to teleportation. That demonstration wasn’t exactly a road-test, though. These were first-party, highly polished demonstrations designed to show off the potential for the new technology in a short, well-controlled session. Had my first experience been a shoddy, half-finished or poorly-executed demo instead, I might never have been interested at all. For O’Luanaigh, the responsibility for audience growth is firmly on the shoulders of developers.
“For me, it’s really important,” he tells me when I ask whether VR needs to get it right this time around. “I’m utterly convinced that VR is now a technology that’s caught up to an amazing idea and can make it work. The only thing that can ruin that is dreadful games. It’s easy to make a rubbish VR game with a bad framerate that takes control of the camera and does stupid things. That’s the worst thing that could happen, and I think that both Oculus and Sony get that. I think everyone entering the VR space gets it, but we just need to keep an eye on it.
“At least one or two of the projects we’re working on are non-traditional games, it’s definitely quite different. You’ll see VR spread into different areas over the next few years”
“I hope that the press plays its part as well and makes sure that, if there’s one rogue VR game that’s snuck out and it’s dreadful, that they won’t use that to argue that VR is awful.”
Good games might be the things that get people queuing in the shops, or, more likely, clicking online, but there are clear possibilities for virtual reality which fall well outside our sphere, particularly for Oculus’ Rift. Will nDreams being dipping a toe in those waters?
“At least one or two of the projects we’re working on are non-traditional games, it’s definitely quite different. You’ll see VR spread into different areas over the next few years, although it’ll definitely start with games. Oculus aren’t showing off Facebook social pop-up sims, they’re showing off great games.
“I don’t think Facebook has changed that but I think you’ll notice them start to add stuff in over the next few years. You might see spaces where people can hang out with their friends, stuff like that. If you’ve ever read Snowcrash, I think that sort of thing is why Facebook bought Oculus. They’ve got more money now, but it’s the same people with the same values. It’s very cool to be rude about Facebook, but I think a lot of the people who were being rude about Facebook when it bought Oculus were doing it on Facebook, which is pretty ironic.”
A new survey commissioned by IHS in partnership with Gamer Network has shown that E3 gave a huge boost to the number of people interested in buying a Wii U, with purchasing intent growing by 50 per cent over the course of the event.
Around one thousand core gamers were surveyed on various purchase intentions before and after the LA show, revealing that, whilst Nintendo’s platform started out with the lowest number of people looking at buying it, it saw the biggest benefit from the show’s exposure. 20 per cent of respondents now intend to buy the machine, equal to those who are looking at an Xbox One, which saw a seven per cent increase in popularity.
Sony’s PS4, a clear leader going in to E3, lost ground to its competitors, sinking below 30 per cent of respondents.
In terms of anticipated games, consumers are champing at the bit for 2015′s third-party releases, with Warner’s Arkham Knight leading the charge with an incredible 60 per cent of those surveyed intending to buy the game for at least one platform. Gamers are slightly less excited for 2014′s titles, but Activision’s Destiny is the narrow leader for this year, edging out AC: Unity and GTA V with just under 50 per cent. Both Battlefield Hardline and CoD: Advanced Warfare are lagging behind slightly.
As might be expected, purchasing intent is higher amongst first-party exclusives for current platform owners. On PS4, Uncharted 4 was the most popular game both before and after E3 with 76 per cent of PS4 owners expected to buy it. On Xbox One, it’s Halo which pays the piper, garnering support from 77 per cent of One owners. Over on the Wii U and amazing 89 per cent of owners expect to buy the new Zelda game when it’s released. None of these platform-exclusive heavy hitters will land until 2015 at the earliest, which IHS predicts will increase pre-Christmas reliance on multi-platform games for Microsoft, Sony and, to a lesser extent, Nintendo.
“Although there are other exclusive titles coming in 2014 or already available,” the report reads, “none hold the influence that these leading titles have in terms of selling console hardware, with the exception of Mario Kart 8 for Wii U. As a result, the success of console sales this holiday shopping season will depend more heavily on the total value and content proposition including exclusive content offered by multi-platform games rather than a single, very influential system-selling exclusive. This factor will impact the marketing strategies of the platform holders as we move into 2014′s main shopping season.”