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Quick Thoughts: What Do New Gaming Console “Iterations” Need to be Successful?

Xbox One PS4

 

Quick Thoughts: Now that major gaming hardware manufacturers have hinted at iterating on their existing consoles rather than using the “traditional” model of 6-8 year generations, what do you think a new version would need in order to be successful? What features should be required in order to cater to both existing and new owners? Should console makers even take this route at all?

With a recent report from The Wall Street Journal, in addition to earlier articles by gaming-focused media including Kotaku and Polygon, rumors are solidifying that both Sony Corp (6758) and Microsoft Corporation (MSFT) will be iterating on their existing gaming consoles, the PlayStation 4 and Xbox One respectively, to release more “powerful” versions rather than waiting out the traditional console cycle period which can be anywhere from 6 to 8 years approximately. I’m not going to speculate on what the specs will be or when they will be released, but rather I want to ask how can these be successful when gamers are used to the traditional longer-term cycle?

Consumer sentiment around these rumors has been mixed leaning mostly towards the negative, especially existing owners that are worried they might be “left behind” if the newer console iteration offers much better graphics or software that isn’t playable on the older machines. To put these concerns in perspective, estimates for current user base for the three major gaming consoles are below which indicates the risk of alienating these bases if manufacturers don’t approach these iterations properly.

 

Estimated Console Install Base

 

So, what’s the right approach? I think it comes down to three factors, in no particular order:

Transparency: Of course this is quite general, but it’s still essential. Console makers need to be explicit in their communication on what these iterations are, how they will be done and honestly they need to do it soon. Are the iterations going to now support 4K output or VR capabilities let’s say, or will they involve more significant upgrades to hardware that will noticeably impact how games and videos perform and look? Will there be software that’s only available on the newer version a la Nintendo’s New 3DS handheld? Which leads me into my next two points..

Forwards Compatibility: There’s been a lot of talk about backwards compatibility this generation, but if these companies start iterating on existing consoles then they need to assure existing players that they can still play their favorite games on the latest version. I think this is less of a concern with the first iteration, and more with the second or third down the line. Similar to how mobile phones are constantly updated on an annual basis these days, if consoles are upgraded every couple of years, at what point does newer software outpace the specs of the original machine?

Upgrade Path for Existing Owners: This goes hand-in-hand with the previous point. To alleviate worries of current users, there needs to be a specific path by which these users can upgrade to the newest boxes and carry-over content and apps that they have paid for using hard-earned dollars. If this means charging them the difference in price between the original version and new iteration, that might suffice. However as a show of goodwill, I think manufacturers should go further and offer some sort of bonus or free content to those loyal customers that bought their earlier product version.

Sony LogoMicrosoft Logo

 

 

 

 

 

 

 

 

 

 

It will be interesting to see how and when both Sony and Microsoft communicate the future of their console businesses. Microsoft has been moving towards unifying its platform under the Windows brand, and executives including Phil Spencer have hinted that hardware upgrades are likely incoming for the Xbox One in the article I linked above, so it’s imperative that they form a more concrete message for the marketplace to digest. Sony has less of a structure in place at present. All in all, gamers like us will have to play the waiting game until we hear what the future of this console generation will be.

Sources: Sony Corp, Microsoft Corporation, Nintendo Co., Ltd., The Wall Street Journal, Kotaku, Polygon

-Dom

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Bottom Line: Gaming Journalists & Crowd-Funding: Cool or Conflict?

Bottom Line: It’s a simple question, more about ethics than about statistics. Is it acceptable for journalists that cover the games industry to contribute to crowd-funding campaigns for video games? Or does it create the appearance of a conflict of interest that their outlet will then provide favorable coverage to said game? My thoughts below.

Crowd-funding is still a big deal in the world of video game development, and overall it’s a good way to both gauge public interest in a title and a way to raise funds to aid in producing it especially for smaller teams or experimental projects. But with the popularity comes responsibility on behalf of the media, and in my opinion I think gaming journalists should abstain themselves from participating in crowd-funding games.

Sites like Kickstarter, Indiegogo and recently Fig (which offers an equity ownership option as opposed to strictly donations) are popular platforms for developers to use for these crowd-funding efforts. For perspective, the following shows video game projects last year that raised over $20K. Note that Kickstarter is obviously still the most popular of these platforms based on stats from ICO Partners:

 

GamesIndustryBiz

 

And from a games perspective overall, the following are the most contributed games ever based on stats from both providers:

 

Top Crowd-Funded Games

 

Knowing that many smaller or “indie” games wouldn’t be made otherwise if it wasn’t for donations from supporters, it’s tempting for journalists covering the medium to turn into a fan and donate. But that presents a conflict of interest in my opinion, where it gives the appearance that their outlet *could* provide critical coverage that is more favorable than usual. I understand gaming journalism is inherently flawed; it walks a fine line between unbiased coverage and being occupied by downright fans of the industry its covering, but either way it needs to recognize potential conflicts in this age of moneyhatting and pay-for-play YouTubing.

I think that all such cases of journalists donating need to be explicitly stated to the market and fully transparent. And it’s the responsibility of the outlet to acknowledge this and separate the individual from any and all coverage of the title in question. It’s similar to an employee donating to a presidential campaign, which companies require them to report and distinguish the individual’s opinions from that of the firm.

I’ve heard various cases of members of the gaming media donating to fund-raising campaigns, but not much discussion on the conflict that this presents. I believe the journalist should not donate overall, and if they do, their outlet needs to be transparent and remove them from any coverage of the particular title. Do you think I’m overreacting, as games are normally covered by fans that are a part of the media? Or should journalists in general not financially support the companies, items or services that they are covering?

Sources: CrowdFunding.com, GoFundMe.com. Kickstarter, Fig, ICO Partners, GamesIndustryBiz

-Dom

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Quick Thoughts: Can The Division Replicate Destiny’s Success as a Shared-World Shooter?

Quick Thoughts: Simply put, can Tom Clancy’s The Division become as successful as its competitor Destiny, which made a record $500 million during its initial launch and was reported by Activision Blizzard Inc (ATVI) to be the top-selling new IP in North America and Europe in 2014?

 

Tom_Clancy's_The_Division

 

As noted in my previous article, publisher Ubisoft Entertainment SA (UBI) is releasing its biggest title of the year, Tom Clancy’s The Division, soon on March 8th. The shared-world, online shooter with RPG elements set in a frigid Manhattan is the firm’s biggest bet this year as it’s a brand new IP for which the firm expects it to “be one of the largest launches of a new brand in the history of the video game industry,” per CEO Yves Guillemot. And without an Assasin’s Creed title this year, and Watch Dogs 2 yet to be confirmed, The Division is the premier part of UBI’s calendar year portfolio.

Which leads me to my comparison to Activision Blizzard Inc (ATVI)’s hugely-popular online shooter Destiny. Stats from the firm’s reporting show the aforementioned record launch and even over a year later, the game has over 25 million registered users which have around 3 billion hours. It has yet to be seen if this success can be sustained through the decade-long plan that ATVI is rumored to have for the franchise, but with net revenues increasing last year to $4.6 billion (compared with $4.4 prior year), Destiny is a main contributing factor to the firm’s continued success as one of the world’s largest publishers.

 

ATVI 2015 Revenues

 

Going back to The Division, UBI hasn’t divulged their internal sales forecasts for the title in particular however they have released guidance of increased sales during final quarter of 2015-16 and relatively healthy full-year sales in 2016-17. From a consumer perspective, the game will scratch the same itch as Destiny from an RPG loot and leveling perspective however the key is its mechanics and narrative content, the latter of which was the main knock on Destiny when it first came out.

Based on this, it’s a fresh new IP that’s quite ambitious, so my personal take is if it delivers enough content between its story missions, side quests and “Dark Zone” PvP concept (which is an area many have compared to survival games where players can decide to either work together or fight against one another to collect the game’s best gear), I think that The Division can certainly compete with Destiny and even steal a portion of the games user base as ATVI hasn’t released new content since September 2015’s Taken King expansion. And ATVI announced that a sequel to Destiny won’t be out this year, which leaves the door open even further.

Whether it will generate $500 million in day-one sales or achieve 25 million users in its first year, that has yet to be seen, but the game is one of the year’s most intriguing releases.

 

Destiny Cover

Sources: Activision Blizzard Inc 4th Quarter & Full Year Financial Results 2015, Ubisoft 3rd Quarter 2015-16 Earnings, Xbox One UK.com

-Dom