Business Archives - Page 1
May 19, 2008
With the recent departure of LucasArts from the ESA and E3, as well as the more notable withdrawal of Activision-Blizzard, some problems are starting to appear in the now slightly fragmented industry.
The story goes like this: the Game Critics Awards, a voluntary organization made up of independent game journalists, has shown its intent to include games not only shown "in" E3, but those "around" E3 as nominees for its "Best of E3" awards. This has of course infuriated the ESA which wants only those companies who are actually involved in E3 to be eligible. A response to the ESA from Geoff Knightly, co-chair of the GCA:
"The fact that Activision is not a registered exhibitor for E3 has brought to light the issue of how to determine the eligibility of games... A precedent has been set that in the past, judges have voted on games that have been presented off the show floor at hotel suites and across the street from E3. It would be a shame for me if the best game of E3 didn't win the Best of Show award because it was demoed across the street from the show floor...
A sound argument can be seen on both sides: on one hand, what is a "Best of E3" award if it's not only for actual E3 members? Then again, is it really fair to game developers that their games are excluded from one of the few notable awards because their game was simply across the street? I personally don't think an independent awards organization should have to listen to an industry association, but it is ESA's show, so it will be interesting to see how they react.
May 2, 2008
In their first big move since they became the biggest publisher in gamerdom, Activision-Blizzard have officially left the ESA and will not be attending this year's E3.
From the ESA's senior VP of communication and research, Rich Taylor:
"While the Entertainment Software Association remains the preeminent voice for U.S. computer and video game publishers, we can confirm that Activision and Vivendi Games opted to discontinue their membership. The ESA remains dedicated to advancing our industry's objectives such as protecting intellectual property, preserving First Amendment rights, and fostering a beneficial environment for the entire industry. Our high level of service and value to members and the larger industry remains unchanged."
What does this mean for gamers? Well, for starters, none of Vivendi's developers will be "in" E3 (most will have a presence "around" E3, separated from the official show) including Activision-Blizzard, Sierra, Atlus, Majesco, NCsoft, and WBIE. Vivendi will also have to start defending themselves in cases of government interference and copyright infringement, both areas the ESA helped game companies when defending these interests.
The ESA, like many industry organizations, probably had some rules and perhaps fees that Vivendi just didn't agree with but it's unclear the reason for the departure at this time. Whatever the reason this is something which will probably have significant long term repercussions for the industry in general.
April 2, 2008
I wish I could say I’m shocked, but I’m not.
Yesterday on his blog, EA’s Peter Moore confirmed that Madden 09 will not be released on the PC, because … well, because making games solely for the console is a more efficient way to back the old Brinks truck up to EA’s corporate headquarters, I guess. Officially, it’s being called “serious business challenges in the sports category”.
On one hand, there’s a certain inevitable logic to the numbers. Sales from the console versions of Madden 08 (NPD, August 07) clocked in around 2 million units, almost 900,000 of that on the 360 alone.
Madden on the PC … well, I couldn’t even find firm figures, but Bioshock was the top-selling PC game at around 77,000, so Madden’s PC sales had to be fewer than that. When you’re talking about a platform that doesn’t break 5% of your sales ... if I’m running a business, I’m probably making that same call.
That said, if you look at the history of the franchise, it’s hard not to feel like EA’s got the blinders on a little, and are missing a bigger problem that could bite them in the ass down the road. The fact is, they’ve been charging full-game prices for expansion-pack content for years now – open a new Madden each year, and you get new rosters, some cosmetic upgrades, and one or two minor gameplay tweaks.
Even as they’re doing that, other aspects of the game remain unfixed, enshrined forever in EA’s Canton of Half-Assed Coding. And buying up the exclusive NFL license and effectively driving competition out of the market hasn’t been the best thing for public relations, even if it was the NFL who approached them.
In the console space, none of this has been a problem … yet … because new hardware has driven software sales as people switched to a new platform, and EA’s been able to shed blame for bugs and incomplete features by blaming it on the challenges of developing for the new hardware. In the PC marketplace, the customers have seen the emperor’s new clothes for a while now – they’ve watched as EA put all the development efforts into next-gen while handing PC gamers the same game as last year with a different splash screen.
And now, figuratively and literally, they’ve taken their ball and gone home. Which may be fine on a balance sheet, but ignores a larger customer satisfaction issue – what’s EA going to do when there isn’t a new console to prop up sales and they have to rely solely on the quality of their product? The PC sales figures aren’t just a blip on the radar, they’re Jacob Marley warning Scrooge that those chains itch something fierce.
OK, so why does any of this matter to you? You guys are mostly here for Spore, and the international readers probably don’t give a damn about American football. Points taken.
But consider the broader implications – Madden is one of the 800-lb gorillas of the gaming scene: it’s consistently one of the biggest releases of the year, it has its own TV show (albeit a really stupid one), it’s a game that’s “safe” for gamers to admit they like, it even mainstreamed the concept of the “Maddenoliday”.
Other game companies will be watching this move, and possibly base their own future decisions on how well this turns out for EA. So even if you don’t care specifically about the hand-wringing across Madden Nation, it should at least give you pause as a disturbing sign of possibilities to come.
March 17, 2008
The Official February NPD numbers have been released, and they make for highly interested reading. It was a great month for everyone, but there was an unexpected high inflation of PS2 sales, even though hardly anything was released for it in February. Here is the complete list:
These numbers are massive for this time of year, increasing on the sales of this time last year. The DS and Wii are having a wonderful time at retail, and Nintendo must be delighted that the DS sold over half a million units in a fairly quiet month for the handheld.
However, it is the PS2 that is the big news this time, as it emerged from nowhere to sell over 350,000 units. Some attribute this to Best Buy's $99 PS2 deal, and it will be intriguing to see where it ends up next month. If Sony reduced the price of the aging little machine to $99 itself, it will definitely sell more than these large numbers. The PS3 has beaten the 360 again this month, but Microsoft has continuously stated that the system is supply constrained. However, if it performs this poorly again next month, they're going to have to invent a new excuse.
Looking at the figures, hardware unit sales were up 19% from this time last year, to over 2.1 million systems sold combined, and the software total was $668.7M, which is an increase of 47% over this time last year. Not to bad for a non-November/December month.
Here is the software top-ten:
Call of Duty 4 continues it's dominance at the top of the list on 360, but the PS3 version has dropped out of the top 10. The thing I find most bizarre in this list is that Devil May Cry 4 sold more on the 360 than on the PS3, even though the brand has a rich heritage on the PS2, and it's fair to say that the game is orientated more towards the hardcore PlayStation audience. The other surprise hits are Lost Odyssey and Turok, which both did really well given their low-key launches. Furthermore, it's nice to see Rock Band holding on, but EA and Harmonix need to work on getting the game out in Europe.
March 5, 2008
The publisher in charge of such well known gaming magazines as Electronic Gaming Monthly and website 1up.com, has filed for chapter 11 bankruptcy in an attempt to lower the companies debt. Ziff Davis has reportedly had money problems for a while now, with nearly 400 million dollars worth of debt.
Ziff Davis hopes to restructure the company in order to lighten the debt and hopefully not create any more. It is expected that the gaming websites/magazines won't be affected during the transition, though it's well known that Ziff Davis is perhaps still looking to sell its gaming division.
I really enjoy listening to both the 1up Yours and GFW Radio podcasts, and can tell some really passionate gamers work for these companies. Hopefully everything works out for as far as their concerned.
February 24, 2008
Earlier it reported that EA's John Riccitiello contacted Take-Two in the hope of purchasing the publisher in a $2 Billion deal. Take-Two released a statement and rejected the deal as inadequate.
The main complaint over the alleged deal from Take-Two is that EA only wishes to purchase them to take advantage of the upcoming release of Grand Theft Auto IV, and quoting their press release; it was "highly opportunistic". Also, the press release stated that "the offer values the company at a significant discount to its public peers and does not compensate Take-Two for its intrinsic value and the substantial synergies that the proposed combination would create".
Strauss Zelnick, Executive Chairman of the Board of Take-Two stated,
"Electronic Arts' proposal provides insufficient value to our shareholders and comes at absolutely the wrong time given the crucial initiatives underway at the Company. Thanks to the extraordinary efforts of our creative and business teams, Take-Two has made enormous strides in the past 10 months toward our common goal of being the most creative, innovative and efficient company in our industry. We're extremely proud of our unique portfolio of game franchises, exceptional creative talent and loyal consumer following. Our Board believes that we will build greater value for our stakeholders by remaining relentlessly focused on our strategy and delivering on our mission of making the highest quality interactive entertainment."
Personally, I'm really happy to see Take-Two fighting back and showing that they are the ones with all the cards. This news should also be a cause for relief amongst fans too, who had a meltdown earlier following the unveiling of the EA proposal. The options for EA are now fairly limited, with the unconfirmed key prospect of them now going for a hostile takeover of the company.
February 24, 2008
On Sunday, EA announced that it has proposed to purchase Take-Two for $26 per share in cash, which is equal to approximately $2.0 billion and an 64% percent premium on the going rate for the stock over the last 30 days. The move is bound to give the publisher near-complete dominance in the gaming world, giving them complete control of some of the best IPs in the industry. EA have cheekily set up a takeover website, eatake2.com, which outlines the takeover details.
"Our all-cash proposal is a unique opportunity for Take-Two shareholders to realize immediate value at a substantial premium, while creating long-term value for EA shareholders," said John Riccitiello, CEO of EA. "Take-Two's game designers would also benefit from EA's financial resources, stable, game-focused management team, and strong global publishing capabilities."
However, this is not going to be pretty for us gamers, with EA's current strategy of releasing sequels every year not only hurting the pockets of gamers, but also perhaps the quality of it's games. Hopefully, EA can see that some of the best titles in the industry are those which have been given a reasonable amount of time to ferment.
Also, we must remember this is just a proposal, and Take-Two recently dismissed a $25 per share merger from EA, so perhaps it might not happen, if we're lucky. If it does happen though, it raises a huge question for the future of the industry, with less competition and too many "super-publishers", could creativity be throttled in favor of regular yearly sequels?
February 19, 2008
Without the need of those goofy mo-cap ping pong balls, motion capture company Mova is bringing near photo realistic quality motion capture to the most popular current generation graphics engine. Using an array of cameras, powerful software maps 100,000 polygons in real time to create highly life like facial expressions. Mova founder Steve Perlman had this to say in Joystiq's scoop:
"This pushes Unreal Engine 3 to its very limit ... it's about as photo-real as you can get in real time. People have never had this kind of data available before in a game context ... their heads are spinning. What you're seeing right there is the result of, having time to wrap our heads around this thing and see how we're going to use it, and yes, we can in fact get a face that looks almost photo-real – you know, not quite, but almost photo-real – running in a game engine today."
This technology could save thousands of dollars and time. With the traditional mo-cap of the day, game makers get blocky, skeletal motion that they then have to turn into a convincing character. Mova's technology makes a near perfect face almost immediately after a shoot and seems to actually avoid the uncanny valley. Combining this with the extensive technologies already found in the Unreal Engine III, we games can hope for developers to spend more time on gameplay and story, and less time trying to get the tech right.
February 19, 2008
The high-def format race is finally over. Toshiba announced today it will no longer develop, make, or market HD DVD players and recorders.
"We concluded that a swift decision would be best," Toshiba President Atsutoshi Nishida told reporters in Tokyo after making the announcement.
To some this may be a surprise, and to HD DVD owners possibly even a huge letdown, but to others it's simply understandable as to why Toshiba has discontinued the HD DVD player. Blu-ray was winning the format wars and it seemed that Blu-ray finally got to a tipping point where it was inevitable they were going to win in the long run.
Perhaps it was the inclusion within the PlayStation 3, perhaps it was superior format, perhaps it was millions in back-door bribes. Whatever the end reason, Blu-ray has won and HD DVD is now officially dead.
This holiday season Sony's Blu-ray had a much more appealing marketing and management plan, dealing a massive blow to HD DVD's sales and ultimately leading to their demise.
Fortunately for XBox 360 owners the HD DVD is not an allowed format for video games on the console, but anyone who bought the extra accessory to enjoy the high-definition quality DVD's on their system are going to have to consider other outlets. Not to worry though; at CES 2008 Microsoft stated that if the consumers demanded Blu-ray over HD-DVD, they would certainly begin supporting it.
Sorry to see you go HD DVD. You had a nice run.
February 19, 2008
Yesterday a GamePro editor created quite the stir by speculating that Microsoft may be acquiring Epic Games for approximately $1 billion. While Microsoft would certainly be interested in Gears of War and Unreal Tournament, the majority of the buyout would certainly be for the Unreal Engine 3.
Of course this is all purely speculation – however, Microsoft is holding a briefing tomorrow (February 19) where they are expected to make a couple announcements, and Epic is having theirs on Thursday (February 20). Coincidence ... or the announcement of a big acquisition?
It's become quite a task in this industry to find out when a large company will be buying another, and most of the time any false accusations are almost immediately shot down by the smaller company. This is not the case in this incident, however. Epic Vice President Mark Rein told GamePro that if they wanted speculation, they should start out at least $2 billion as Epic wasn't going to be cheap.
What does this mean for gamers? Besides the fact that Microsoft would have a powerful engine licensed for all their future games (Unreal Engine 3) and Gears of War 2 and Unreal Tournament would certainly become Xbox 360 and PC exclusive. Or this could just be a crazy rumor and nothing more. Find out later this week.