Familiar Franchises & New Hardware Lift U.S. Games Industry to a Record January

It’s the first U.S. monthly sales report of the new year, featuring formidable familiar faces topping the charts on the way to a record January for domestic games industry spending.

Call of Duty, Assassin’s Creed and Marvel’s Spider-Man among others drove a solid double-digit increase in content and software sales, while Nintendo Switch alongside PlayStation 5 combined to push hardware results to more than double the amount of this time last year. Even accessories increased over 70% year-on-year in January, bolstered by Sony’s most recent innovative controller.

It’s clear even with vaccine distribution thankfully happening around the globe, the video games industry is a primary beneficiary of continued shelter in place and quarantine orders. Even devoid of flagship releases charting on the software side, inventory constraints on the hardware front and following a major holiday season, January achieved a record.

This proves the strategy of many publishers in the current era providing ongoing content, seasonal events and cosmetic drops to engage an audience that wants to stick around longer than in prior generations. People love a reason to play the games they own, whether solo or with others, and this modern model certainly fulfills that.

Before I dig into the numbers and document my reactions, I want to again eternally thank the front-line, healthcare and retail workers for all the effort during an impossibly difficult time. I hope you are able to find some downtime and enjoy these games as a much-needed distraction.

United States Games Industry Sales (January 3rd, 2021 – January 30th, 2021):

Straight from NPD Group itself, plain and simple: January 2021 was a record January across its tracking history.

Consumer spend in the U.S. during the month reached over $4.71 billion, an increase of 42% since January 2019. Every single category of Content, Hardware and Accessories saw at least double-digit growth year-on-year.

Starting with the biggest contributor, Video Game Content sales exceeded $4.17 billion, comprising nearly 89% of monthly spend. This figure is up 36% when compared to early last year. Big results from Call of Duty: Black Ops Cold War, the resilience of Assassin’s Creed Valhalla plus a plethora of strong catalog titles from Nintendo highlight this category’s continued momentum.

As anticipated, Video Game Hardware saw the strongest movement: a staggering 144% gain over the same month in 2019, to upwards of $319 million. This time last year marked the last hurrah of the prior console generation, so naturally 2021 will bring about sizeable increases. I argue it’s slightly more impressive considering the public supply constraint issues admitted by both Sony and Microsoft.

As a knock-on effect of console launches plus Sony’s popular DualSense controller revision, Video Game Accessories bumped up 73% year-over-year to a spending amount of $222 million. A rising tide lifts all boats in this case, as displayed by all sub-categories here reaching all-time January highs last month.

Software is the leading category, which means it’s up first.

Call of Duty: Black Ops Cold War once again led the charge on the overall rankings, a spot its held each month since launching in November. It’s also the best-selling title over the past year. Not only that, the military shooter from Activision broke into the Top 20 best-selling games *of all time* in January, right at that #20 spot.

NPD Analyst Mat Piscatella called it “incredible” and said this particular statistic “made his jaw drop.”

2019’s Call of Duty: Modern Warfare is even in the Top 10. Activision Blizzard shared recently that both sales and engagement increased in the quarter ending December, namely how net bookings from the Call of Duty franchise rose over 50% in the quarter. Black Ops Cold War itself drove monthly active franchise users to increase around 70%. Lifetime spending across series history reached $27 billion in 2020, plus it entered this year with its largest user base to date.

In a similar success, Assassin’s Creed Valhalla ranked #2 on January 2021’s chart. It’s now the second fastest-selling game in the open world franchise from Ubisoft Entertainment, as measured by first three months U.S. dollar sales, behind only 2012’s Assassin’s Creed III.

As part of a quarterly report this week from Ubisoft where the company achieved record net bookings of over €1 billion ($1.21 billion), the French publisher noted how Valhalla generated record revenue within the long-running series.

Rounding out the Top 3 was PlayStation exclusive Marvel’s Spider-Man: Miles Morales. It’s also the 10th best-selling title of the last 12 months. Insomniac Games’ super hero action game achieved global unit shipments of 4.1 million since launch in November alongside the PlayStation 5, no doubt accelerated by Sony’s willingness to put out games simultaneously across both console generations. Smartly capitalizing on the 115 million PlayStation 4 consoles in the wild.

Another observation when perusing the list is again the sheer number of games from Nintendo even without digital sales reported, snagging 4 of the Top 9 spots. Animal Crossing: New Horizons returned to the Top 5 for the first time since July 2020, after surpassing the 30 million copies sold worldwide milestone. And Ring Fit Adventure among them at 7th overall, a further example of a clever bet from the Japanese company within the fitness sub-genre. Ubisoft’s Immortals Fenyx Rising, a late year gem, maintained a Top 15 finish after its Top 10 showing last month.

You might be wondering about the precipitous drop for CD Projekt’s Cyberpunk 2077 from second to 18th, barely making the Top 20. Or perhaps the notable absence of Hitman 3 after excellent reviews from IO Interactive’s latest? Well, it’s the same reason why Grand Theft Auto V and Red Dead Redemption 2 are no longer staples of the charts: No digital sales. While NPD Group has expanded its coverage of publishers sharing downloaded data, there are still a number that opt out.

Top-Selling Games of January 2021, U.S. (Physical & Digital Dollar Sales):

  1. Call of Duty: Black Ops Cold War
  2. Assassin’s Creed Valhalla
  3. Marvel’s Spider-Man: Miles Morales
  4. Madden NFL 21
  5. Animal Crossing: New Horizons*
  6. Mario Kart 8: Deluxe*
  7. Ring Fit Adventure
  8. Call of Duty: Modern Warfare
  9. Super Smash Bros. Ultimate*
  10. NBA 2K21*
  11. Super Mario 3D All-Stars*
  12. FIFA 21
  13. Immortals Fenyx Rising
  14. Mortal Kombat 11
  15. Just Dance 2021
  16. The Legend of Zelda: Breath of the Wild*
  17. Minecraft: PlayStation 4 Edition
  18. Cyberpunk 2077*
  19. Super Mario Party*
  20. UFC 4

Top-Selling Games, 12 Months Ending January 2021, U.S. (Physical & Digital Dollar Sales):

  1. Call of Duty: Black Ops Cold War
  2. Call of Duty: Modern Warfare
  3. Animal Crossing: New Horizons*
  4. Madden NFL 21
  5. Assassin’s Creed Valhalla
  6. The Last of Us Part II
  7. Ghost of Tsushima
  8. Mario Kart 8 Deluxe*
  9. Super Mario 3D All-Stars*
  10. Marvel’s Spider-Man: Miles Morales

Flipping over to Hardware, both Nintendo Switch and PlayStation 5 lifted category sales to well more than double the amount recorded this time last year.

Switch was the leading platform in terms of unit sales during January. This marks the 26th consecutive month atop the rankings by this measure, a record in the history of tracking dating back to the 90s. Switch unit sales reached the best result for a January month since 2010, back when even grandparents purchased the Nintendo Wii at the height of its popularity.

Last week, Nintendo updated its financials and it’s staggering stuff. Switch is approaching 80 million units on market, 79.87 million to be exact, exceeding the almost 76 million of Nintendo 3DS as of December. This means Nintendo exceeded its initial full year target for Switch shipments with a quarter to spare. Shoot, the Switch Lite model alone is approaching the lifetime sales of its predecessor the Wii U, at 13.53 million compared to 13.56 million respectively.

In terms of dollar sales domestically during January 2021, PlayStation 5 once again led hardware. Same as it did last month, when I wrote about how it achieved the best result for PlayStation consoles thru each platform’s first December. Sony said last week that PlayStation 5 shipped 4.5 million units in its first quarter on sale, a number that’s a bit higher now taking into account January sales.

There’s not much in the report about Microsoft’s Xbox Series X|S, so it’s hard to know where it lies in relation to its competitors. On a global scale, friend of the site and Niko Partners Analyst Daniel Ahmad estimated the family at around 3.3 to 3.5 million globally to date. Just hard to know how it did in January here in the States.

Lastly, here’s even more records when moving onto the final segment of Accessories. Not only did the category itself jump over 70% to achieve a January historical high on dollar sales, each of its sub-segments did as well. Game pads, headsets and headphones plus steering wheels. January month records for all!

Among the products themselves, Sony’s PlayStation 5 DualSense Wireless Controller (seen above) topped everything to be the best-selling accessory of the month. Another one of Sony’s offerings, the Pulse 3D Wireless Headset, topped headset/headphones.

Taken as a whole, January echoed the ongoing story of games industry sales, reaching a record January month on the back of catalog titles plus new hardware shipments. Individual software franchises from Activision Blizzard and Ubisoft plus both hardware and accessories from Sony were the winners, though many more boasted great results to start 2021.

Highly recommend checking out Twitter accounts for NPD Group and Piscatella for even more general commentary and data within platform rankings. Definitely worth it if you’ve made it this far!

Thanks to all for reading. Let’s regroup in February for more sales talk. Be safe.

*Digital Sales Not Included

Sources: Activision Blizzard, Nintendo, NPD Group, Ubisoft.

-Dom

Seven Major Games Industry Predictions For 2021

Well, it might be a bit late. Yet it’s finally time to look ahead.

So what’s in store during 2021 for the games industry? A whole lot, plus some surprises. It should be another big one for Nintendo, with Zelda’s 35th anniversary plus the potential for a new Switch model on the horizon. In what I’m dubbing the Year of the Delay, better or worse I expect a number of dates to be pushed back amidst the usual challenges of game development compounded by the ongoing impact of a pandemic and remote work scenarios. After Microsoft snagged merger and acquisition headlines last year, my guess is that Sony ramps up its purchasing. Meanwhile, Tencent will continue its takeover.

What about size and spending in the market? I’m calling for double-digit growth both globally and domestically, driven by new consoles, a continued high digital share across the board and steady mobile performance. In a bit of a risk, I’m guessing we see a major collaboration between Marvel and Capcom to rejuvenate the latter’s fighting game history, then I bet we see what Rockstar has been working on besides the online versions of its biggest titles. And it might surprise you!

Finally, we can’t talk modern games without cloud streaming. After making the easiest prediction on the list, I’ll up the stakes by picking which of the major providers could be the winner this year. As long as it executes on a smart business model and expands to new territories.

Where will 2021 take us? For now, it has taken you here. Reading about the future. And a few minutes from now, you’ll know.

Pro Model & Zelda’s 35th Power Switch to Best-Selling Console of 2021

While we’ll get new figures next week, as of right now Nintendo has shipped over 68 million Switch hybrid consoles since its debut in 2017. This year, I not only expect this excellent momentum and the company’s best financial results in a decade to continue, both will actually accelerate with the introduction of a new, higher-powered model. How it manifests, what features it will have and what it will be called is anyone’s guess. (I say go all out. The New Nintendo Switch Pro Plus.) Four years after the original feels like the right time, especially now that other platform holders Microsoft and Sony launched their respective consoles last year.

To go along with a fancy new Switch iteration, I anticipate Nintendo will lean heavily into the 35th anniversary of its The Legend of Zelda franchise. This means I’m calling the launch of the sequel to Breath of the Wild simultaneous with its new Switch, periodic re-releases of classic games in the series throughout the year including Ocarina of Time and Majora’s Mask plus at least one off-the-wall, patently Nintendo idea. Like a toy Master Sword that somehow interacts with the Switch. It won’t be a surprise when Nintendo dominates headlines and its fiscal guidance again in 2021.

No Game Can Escape The Year of the Delay

While the games industry undoubtedly felt the impact of a global pandemic last year, 2021 will be even trickier when it comes to development challenges and hitting deadlines. It’s going to be like that in many businesses, especially as new projects start during a post-COVID era. We’ve already seen multiple games moved, Outriders and Returnal among them. Additionally, CD Projekt Red’s botched launch of the industry’s biggest game last year in Cyberpunk 2077 shows publishers that it’s better to move a title than risk all built up goodwill with a launch that’s lackluster at best, broken at worst.

What it means here is no game is safe from a delay, and I fully expect almost every single major title to have some sort of release date push, with some even slipping to 2022. And many of those without dates being next year or beyond. Think of a game, and I’m skeptical it meets its initial timeline. Ratchet & Clank: Rift Apart. Horizon Forbidden West. God of War Ragnarok. Resident Evil Village. Far Cry 6. Gotham Knights. Dying Light 2. Hollow Knight: Silksong. Overwatch 2. Elden Ring. Starfield. Bayonetta 3. Metroid Prime 4. Shoot, even something that’s slated for the Fall like Halo Infinite isn’t immune. The only guarantee in 2021 is that teams are going to take their time, and I really can’t blame them.

Sony & Tencent Highlight Another Year of Acquisitions

Mergers, acquisitions, investments and public offerings across the games industry totaled $20.5 billion thru the first three quarters of 2020. Deals like Microsoft’s $7.5 billion acquisition of ZeniMax, Tencent’s purchase of Leyou Technologies for $1.4 billion plus Embracer Group’s buy of Saber Interactive among many others headlined a busy year of consolidation. 2021 will be no different, as I believe we’ll see more purchases. Especially at the top-end. And I’m foreseeing a couple major moves from Sony and Tencent, in particular.

I bet Sony invests in at least two development studios to bolster its portfolio, one of them being long time collaborator Bluepoint Games who was responsible for PlayStation 5 launch game Demon’s Souls. When it comes to Tencent, the recent rumor is it may be targeting a major Western or South Korean gaming company. Unlike some, I don’t think publishers like Electronic Arts or even Take-Two Interactive are on the table. I’m putting my money on the latter, like a Pearl Abyss or Smilegate based in Asia. Either of which would still be major news. Otherwise, I think Microsoft solidifies a deal for Moon Studios, the team behind the Ori series, and of course Embracer Group expands its subsidiaries considerably again in 2021 as it continues the path of quantity over anything else.

Double-Digital Consumer Spending Increase Led By 90% Digital

During a time when people stayed at home and played a ton of games together virtually, the games industry expanded nearly 20% to a total $175 billion in consumer spending according to Newzoo. Within the U.S. alone, sales expanded 27% to almost $57 billion per NPD Group as I wrote recently. Not only that, digital accounted for 91% of worldwide spending and 72% of the console market. Sony even reported that more than half of software sales on PlayStation 4 were digital each of the past four fiscal quarters, averaging nearly two-thirds from downloads. In reality, stay-at-home guidelines accelerated a trend that’s been building for years.

With supply issues easing in 2021 for new generation hardware, the potential introduction of a Switch Pro, the continued appeal of mobile even at home on devices like tablets plus the almost guaranteed surprise of another break-out hit like Among Us, I’m betting that both of these figures rise at least double-digits. That would bring global spending to at least $192 billion, with the U.S. generating $63 billion. And digital will account for roughly 90% again. Similar to all the games companies benefiting from this increased spending: take it to the bank.

Capcom Announces Blockbuster Marvel Universe Fighting Game

This is admittedly pure and utter speculation. Let’s have some fun! Marvel Games has already displayed a renewed appetite for video game collaborations. Sony with Spider-Man, Epic Games and Fortnite, Square Enix and Avengers among others. Capcom hasn’t released a fighting game in five years, since the underwhelming Street Fighter V. The brands have assembled in the past for Marvel vs Capcom projects. See where I’m going?

This time, I’m thinking both companies reveal a brand new fighting game this year set in the Marvel universe. One where it starts with a base of characters and villains from the cinematic universe then works over time to include almost everyone it can on its varied roster. It’s the type of game that could rival Capcom’s Monster Hunter series in terms of live offering, establishing an ongoing platform that can evolve, expand and, importantly, earn a steady stream of revenue through cosmetics and micro-transactions. If implemented correctly, a blend of great mechanics and a famous character roster, Capcom could revive its fighting game legacy. With the help of the world’s most recognizable entertainment brand, of course.

Rockstar Reveals Its Next Project, And It Isn’t Grand Theft Auto VI

Ready for another wild one? During 2021, I think we’ll finally know what Rockstar has been working on in between new content drops for the everlasting Grand Theft Auto Online and Red Dead Online. For that reason plus the fact it’s still shipping upwards of 5 million copies per quarter of Grand Theft Auto V nearly eight years after its initial release, not to mention how there’s a next gen version of the open world crime game slated for 2021 already, I don’t know if this next one is another Grand Theft Auto game.

If not, then what could it be? A sequel to Bully? L.A. Noire 2? Agent? More Table Tennis?! How about none of the above, and instead a new IP from one of the most talented and detail-oriented studios in the business. That’s not to say its older franchises aren’t valuable, it’s just I’d love to see them flex their muscles on something else. Imagine what Rockstar could accomplish with its near unlimited budget and time allowance from parent company Take-Two Interactive. The downside is, knowing its culture, staff could be in for even more crunch trying to create something from scratch as opposed to leveraging the familiarity of established brands. If its management could find a balance and ensure the mental and physical health of its employees, I’d always prefer to witness something we’ve never seen before.

Amazon Luna Flies High Above The Clouds

In terms of a general prediction, saying that cloud streaming and related services within the games industry will grow in 2021 is a cop out. That’s a given. It’s currently a small portion of the overall market, there are seemingly new services every other quarter and no one has found the right business model to make a substantial dent when it comes to spending or active players. We know nothing about engagement stats for Google Stadia. Microsoft’s Cloud Gaming is still in beta and leans on its bundling with Xbox Game Pass Ultimate. NVIDIA’s GeForce Now is a genius idea, yet faces pressure from publishers that don’t want to participate. Sony’s PlayStation Now had 2.2 million subscribers at last count, a decent start yet nowhere near the market’s potential.

A bolder call is trying to guess which player will win. And I love Amazon Luna’s business model, even if it’s from a company that has yet to successfully break into the behemoth that is the games industry. Announced back in September, Luna uses in-house Amazon Web Services, immediately reducing costs. It boasts over a hundred titles, plus starts at an affordable 6 bucks a month. Not only that, Luna has the easiest path to integration with the most popular game streaming platform Twitch. Because Amazon owns that too. And my favorite feature is publisher “channels,” which is similar to buying HBO for a cable package. Ubisoft Entertainment is already on board, where Luna will boast a channel on which Ubisoft games will release simultaneously as other platforms for an additional per-month fee. It has a long way to go, it’s still in early access and only available in the States, yet I see Luna with the best upside and the most practical of models.

Thus concludes my major predictions for the upcoming year. Am I out of my mind? What about you? Have any predictions of your own? Feel free to drop a line here or Twitter, and we’ll look back a year from now to know just how well we did. Thanks for reading.

Sources: Company Investor Relations/Media Sites, InvestGame, Newzoo, NPD Group.

-Dom

Earnings Calendar Jan & Feb 2021: Gaming, Media & Tech Companies

The first big season of 2021 is now underway.

No, not Winter. (Or Summer, depending on when you are in the world.) Not the NFL playoffs. Not even WandaVision. It’s earnings season!

That fun quarterly time when we get to talk more about companies and their underlying businesses, how their performance rolls up to industries at large. With a focus here on various gaming, tech and media stocks, naturally.

First is the calendar image, as you’ll see above. Coverage is approaching 80 companies in total. Easy for pulling up as a quick reference on the schedule. I keep it open all season. I’ll also update it periodically, since some companies haven’t announced yet.

Then there’s the link below, a Google Doc with this same information and easily accessible links to each website. Very handy.

It’s a busy one, so let’s get right to it. Bookmark that calendar, check the doc and then read about a few companies on my radar in the upcoming weeks. Thanks for reading!

Working Casual Earnings Calendar Jan & Feb 2021: Gaming, Media & Tech Companies

Sony Corp (SNE): Wed, February 3rd

When Sony shares its fiscal third quarter numbers next week for the period ending December, it will be the first that includes revenue from sales of the PlayStation 5 after its November launch. The Japanese consumer tech leader already said its next generation console had the biggest global commercial start of any PlayStation box in its history, a sentiment echoed by December’s U.S. monthly report from NPD Group which I wrote about previously. Despite tight supply and limited inventories, I expect a strong showing in shipments that translate to yet another stellar quarter for its gaming division. Upwards of 4.5 to 5 million, slightly above the 4.5 million of PlayStation 4. The PS5 will also benefit from software copies sold, with the stronger launch lineup compared with its main competitor in Microsoft’s Xbox Series X|S. Hardware and game sales will be impressive, as will its digital ratio which I expect to be around 50%.

Huya Inc (HUYA) & DouYu International Holdings (DYOU): Mid Feb & March, Respectively.

Back in October, these two Chinese powerhouses in game streaming and esports announced the intention to merge effective sometime in 2021. A deal worth an impressive $6 billion, with Tencent of course steering the merger resulting in a healthy share of the new entity. Lately, local officials are taking a closer look at the potential for creating a monopoly in the space, perhaps delaying its completion or even disintegrating the partnership entirely. Neither company has announced a date for their respective financial report plus the latest we heard was that the deal is in its regulatory phase. I anticipate a firm update in the next couple weeks, and I’m betting that China’s government ends up deeming it fine to proceed.

GameStop (GME): March.

The biggest gaming retailer in the U.S. has been in the news a lot, for a variety of reasons. Earlier this month, it announced a shake-up in its Board of Directors, resulting from a major investment from Chewy.com founder Ryan Cohen later last year. And as recently as last week, its shares began surging due to a wild scenario of a Reddit forum full of traders fighting short-sellers (investors bet on a stock’s price going down) in one of the most bizarre stories you’ll read about Wall Street all year. Thing is, its underlying fundamentals haven’t changed. Partly due to the pandemic and mostly because of mismanagement, it’s closing a thousand stores in the first quarter of 2021 alone. Holiday sales were mixed, even with the new generation of consoles. It will stay in business in the short term, perhaps with a better direction with the new look of its Board. But there’s a limited upside to brick-and-mortar retailers that aren’t able to adapt in the digital age.

Sources: CNBC, Company Investor Relations Websites, NPD Group, Pan Daily (Image Credit).

-Dom

2020 Year-in-Review: Dom’s Top 10 Games of the Year

It’s here! The final post of Year-in-Review. Then we can finally, officially and thankfully say goodbye to 2020.

Good riddance, for the most part. Except for gaming. Last year welcomed among the best and most memorable of the waning console generation, while Nintendo kept consistent in its first party output as did indie teams on a variety of platforms.

In my opinion, plenty of great titles were contenders for the list overall and top spot. Quality across the whole industry, which is even more incredible given that a global pandemic hit in many major markets before the first quarter ended.

Props to all the teams that released games in 2020, and especially to those that made this prestigious list. Here we have my Top 10 Games of the Year and five Honorable Mentions. Enjoy!

10. Spiritfarer (Thunder Lotus Games)

Platforms: PlayStation 4, Xbox One, Nintendo Switch, Google Stadia, PC, Linux, Mac.

Sales: Between 200K and 500K owners on SteamSpy. No official figures from the publisher.

What starts as a cozy 2D management simulator featuring anthropomorphic spirits ends as one of the most powerful gaming experiences touching on the temporary nature of humanity, getting the most of our relationships and the journey towards life-after-death. Spiritfarer is a true gem. While it overstays its welcome a bit because of the sheer amount of management mechanics and goals needed to shepherd each character to the afterlife, helping them confront their mortality amid a gorgeous painterly, pastel aesthetic makes for a plethora of memorable personal narratives and individual moments. Just don’t forget to bring the tissues.

9. Cyberpunk 2077 (CD Projekt RED)

Platforms: PlayStation 5, PlayStation 4, Xbox Series X|S, Xbox One, Google Stadia, PC.

Sales: 13 million units sold within 10 days. (I’d imagine many since, even with returns.)

It would take more than one graph during year-end awards to fully analyze Cyberpunk, a first-person, action role-playing game with a launch that was equal parts super anticipated and completely botched. It makes the list because of an intriguing narrative around the future of consciousness and humans melding with machine, rich character relationships, exceptional weapon designs and depth of skill customization. Unfortunately, it’s not ranked any higher because of a myriad of bugs, performance hiccups, silly AI, stability issues and a world that breaks apart at the seams when delving deeper than the surface level. It’s totally worth a play after all these years of waiting, notably for RPG or hacking enthusiasts, though was clearly rushed and won’t be a truly good game until maybe six months of patches and a next generation update at least.

8. Astro’s Playroom (Japan Studio/Asobi Team, Sony Interactive Entertainment)

Platforms: PlayStation 5.

Sales: It’s a pack-in game with the console, so we’ll know when Sony reports them. Could be upwards of 3.4 million units in four weeks, unofficially.

Astro’s Playroom is quite simply the biggest and most joyful surprise out of all the games I played in 2020. It comes pre-installed on every PS5, and is so much more than a tutorial on the new DualSense controller’s functionality. Asobi Team crafted a smooth, capable 3D platformer that’s a complete love letter to everything PlayStation, fit with clever collectibles, stages and characters all centered on the brand and its nostalgia. There’s a wild amount of Easter eggs and secrets to find, nooks and crannies to explore and even speed-running levels to test one’s prowess against friends. It’s essential playing for the PlayStation 5, and should be the first game everyone old and young tries on their shiny new consoles. Guaranteed fun and memories all in one.

7. Paper Mario: The Origami King (Intelligent Systems, Nintendo)

Platforms: Nintendo Switch.

Sales: Fastest-selling game in the franchise at 2.82 million units during its first quarter, outpacing Super Paper Mario (2007).

My goodness, what an unexpected, pleasantly amazing game. Paper: Mario: The Origami King is the first release on Switch for the divisive Paper Mario series, which has undergone somewhat of an identity crisis before. And happy to report this one is way better than the critics say. It’s really an homage to everything in the Mario universe, creatively wrapped in a charming adventure game with heavy puzzle and exploration elements. Characters are quirky and excellent, in particular a Bob-omb named Bobby, environments are artfully designed and dialogue is genuinely and consistently hilarious. While its combat is a tad simplistic, boss fights are an epic clash of rapid riddles and movement tech plus the game sneaks in heartbreaking subject matter behind the cheerful appearance. Believe me, it’s anything but thin!

6. Final Fantasy 7 Remake (Square Enix)

Platforms: PlayStation 4.

Sales: Over 5 million units shipped + downloaded digitally.

Personally, I lack any sort of attachment to the Final Fantasy history. Which means I came into Final Fantasy 7 Remake as a first-timer, all knowledge second-hand thru the years and expectations set by modern standards. Happy to say, I wasn’t disappointed. It’s an excellent modern action role-playing game, with a combination of active and time-stop combat options plus a great party system with a variety of customization. Where it really shines is its characters and world-building, bringing its Midgard realm to life. I was enthralled to learn about the likes Cloud, Tifa, Barret and Aerith, personalities so woven into the fabric of gaming history, then to explore areas that make up the famed in-game universe. Enemy encounters range from focused to monumental, it’s totally worth doing side missions and set pieces are incredible, such as the Honeybee Inn. While its story is convoluted for a newcomer, I’m now invested to where I’m eager to play future iterations.

5. Assassin’s Creed: Valhalla (Ubisoft Montreal, Ubisoft Entertainment)

Platforms: PlayStation 5, PlayStation 4, Xbox Series X|S, Xbox One, Google Stadia, PC.

Sales: Fastest-selling title in the series. So above 3.5 million units in a week as it beat the former record holder, 2012’s Assassin’s Creed III.

I’m one of those lonely, long-time Assassin’s Creed fans that adores its modern direction whereby the stealth-action series deliberately leans into RPG elements in vast worlds inspired by historical settings. Valhalla places players in Norway and England during the 870s AD, amidst the rise of Viking plundering. It’s one of the most beautiful and well-realized open worlds ever. Playing as Eivor, the player must build up a settlement in Britain by gaining allies in the fight against the country’s shady rulers. It encourages exploration and lightly guides players towards areas and stories. Its main narratives center on forming alliances, the Hidden Ones (it’s the Assassin’s) taking out The Order of the Ancients (and The Templars) alongside a robust settlement building setup. Then its best parts are world events and collectibles. There are only a handful of traditional side quests here, a major one venturing into Norse mythology is a must-see, instead opting for a more emergent design of scattering waypoints across the landscape. Many funny, plenty rewarding and some just plain gut-wrenching. And while it’s probably too long of a game overall, almost all of it is worth seeing.

4. Ghost of Tsushima (Sucker Punch Productions, Sony Interactive Entertainment)

Platforms: PlayStation 4.

Sales: Quickest-selling first party original game on the platform at 5 million units at last count.

As I wrote extensively in my review, Ghost of Tsushima is breathtaking. Even if its inspirations are obvious. Set in feudal Japan, the third-person action game takes place in a gorgeous open world and follows Jin Sakai as the last samurai on his island fighting against the Mongolian invasion. It’s a brilliantly vibrant locale carefully crafted by Sucker Punch, providing a stunning backdrop for Jin’s vengeance. There’s the traditional conflict, fighting back against a stubborn Mongolian warlord, yet the underlying theme revolves around the struggle to maintain one’s honor against the reality of needing new tactics like stealth and trickery to wage war as the underdog. Its cast of characters is notable, featuring a father figure lord, cunning thief, former samurai great and a matriarch to a fallen house, with deep individual quest lines a la Mass Effect. Combat is visceral, a word overused in gaming yet one that happens to apply here, with a cornerstone of intense duels and gory sword battles. Movement and traversal is smooth. Bonus points as the only game on the list with a grappling hook! Despite too many mundane collectibles and repetitive side content, Ghost of Tsushima is a cut above most competitors.

3. Ori and the Will of the Wisps (Moon Studios, Xbox Game Studios/Iam8bit)

Platforms: Xbox Series X|S, Xbox Series X, Nintendo Switch, PC.

Sales: 2.8 million players, which isn’t equivalent to sales yet it’s all that the studio has shared.

I’ve said it before in my review, I’ll write it briefly again: Ori and the Will of the Wisps sets the bar for what a sequel should be, as it both continues the narrative of its predecessor plus improves on the already solid underlying mechanics and overall structure. The artful 2D platforming series made by Moon Studios should already be considered a modern classic, as Will of the Wisps introduces new combat abilities, features a slotting ability system, maintains the same traversal momentum and even has a hub world area that can be built out as a home base. Complete with fun characters, side quests and a true emotional payoff, Will of the Wisps deserves to be celebrated for all of its accomplishments.

2. The Last of Us Part II (Naughty Dog, Sony Interactive Entertainment)

Platforms: PlayStation 4.

Sales: Fastset-selling PS4 exclusive at 4 million units in a weekend back in June. Though, no official word since then.

It was an excellent year for Sony exclusives as the PlayStation 4 cycle came to a close. The best of those was Naughty Dog’s latest narrative survival horror masterpiece The Last of Us Part II, which I reviewed in June and reaches the second spot in these illustrious rankings. The original game is heralded as one of the best stories ever told in gaming. Its follow-up continues that tradition by following well-known characters like Joel, Ellie and Tommy plus new ones like Dina, Jesse, Abby, Owen, Yara and Lev, expertly leveraging flashbacks to tie both games together and provide the foundation for the events depicted here. It’s relentlessly brutal and sparingly beautiful. A story of violence and humanity and the often futile goal of vengeance. Mechanics are familiar, third person stealth and combat impactful as ever. New enemy and friendly factions expand the scope of Part II, as it’s the narrative and relationships within the cold-hearted future of Seattle that drives the experience.

Naughty Dog’s work here with accessibility is especially noteworthy, setting a standard for the amount of options it allows in various categories like hard-of-hearing, colorblind and general control mapping. One disappointing part of development is the rumors of long-hours, crunch culture and a difficult setting for employees. I want to celebrate the team’s work, especially on exceptionally detailed character models, environment design and incorporating some of the best acting in games to date. Yet I can’t ignore decisions by management, and desperately hope it improves if true. While the final act drags and there are select pacing problems, The Last of Us Part II is the fruit of this intense labor, an instant triumph in game design and narrative mastery.

1. Hades (Supergiant Games)

Platforms: Nintendo Switch, PC, Mac.

Sales: Achieved 1 million unit milestone within three days of launch, accounting for 700K copies sold during Early Access.

Believe me, I never saw this coming. I first picked up Hades around October, and at first bounced off the isometric roguelike action game. There’s a barrier to entry up front, it’s difficult and frustrating, especially when dying in the middle of what seemed like a great run, having to reset back to the halls of Hades to start anew. When I game it another try late in the year, it clicked and slowly became a standout, important gaming experience.

Thing is, Hades handles progression like no other run-based game in history. Its story of Zagreus, the ruler of the Underworld’s son, trying to escape his home world, seemingly climb Mount Olympus and figure out revelations of his past. Supergiant’s magnum opus slowly reveals its true genius over time as the player improves and learns more about its world, story and characters. It’s a common backdrop, ancient mythology with gods and Olympians, yet it’s a wholly unique take complete with amazing dialogue and a bespoke story suited solely for gaming as a medium.

Its hack-and-slash combat is snappy and responsive, crunchy and severe, as Zagreus ascends through realms of Tartatus, Asphodel and Elysium towards the surface. Tough enemies and bosses present a strategic challenge, even after facing them countless times. Gifts or boons from the likes of the major deities of Greek mythology like Zeus, Poseidon and Aphrodite make each run unique, providing combinations of skills that create builds of varying effectiveness. And after beating the final fight for the first time, it’s nowhere near over. Supergiant sets up a “heat” system where the player decides on adjustments to the challenge, like new boss mechanics or number of foes, earning bounties along the way to seeing the story thru to credits and an epic epilogue.

It came to the point where failure didn’t hurt anymore, because this led to interactions with core characters in the House of Hades like the God of the Dead himself Hades, Achilles, Nyx, Medusa and of course, being able to pet Cerberus whenever you want. It’s fully voice-acted, with a staggering amount of dialogue. In my at least 50 hours with the game, I don’t think I heard a repeat line. The team’s excellent writing and plot development made discussions among characters as memorable as the action itself. Plus, there are accessibility features such as God Mode for those players that would like the focus to be on story.

Hades is my Game of the Year that shouldn’t have been, based on my taste and history. I rarely play run-based games or “dungeon crawlers” because losing progress makes it feel like time wasted. This here is the opposite, almost rewarding death where it recognizes the player’s efforts by filling in the narrative after failed attempts. This particular structure made succeeding that much more satisfying, while following along with what ends up being a grounded story of family and finding one’s legacy.

Top Five Honorable Mentions (Alphabetical):

Animal Crossing: New Horizons (Nintendo)

Platforms: Nintendo Switch

Sales: Second top-selling Switch game ever at 26 million copies. And that’s as of September. It’s a lot more after the holiday season.

Immortals Fenyx Rising (Ubisoft Quebec, Ubisoft Entertainment)

Platforms: PlayStation 5, PlayStation 4, Xbox Series X|S, Xbox One, Nintendo Switch, Google Stadia, PC.

Sales: Unknown for now.

Kentucky Route Zero (Cardboard Computer, Annapurna Interactive)

Platforms: PlayStation 4, Xbox One, Nintendo Switch, PC, Linux, Mac.

Sales: Between 200K and 500K owners on SteamSpy. No official figures from the publisher.

Marvel’s Spider-Man: Miles Morales (Insomniac Games, Sony Interactive Entertainment)

Platforms: PlayStation 5, PlayStation 4.

Sales: Unknown for now. Should be quite impressive.

Nioh 2 (Team Ninja, Koei Tecmo/Sony Interactive Entertainment)

Platforms: PlayStation 4.

Sales: At least 1.2 million copies shipped + downloaded as of October.

And with that, thus concludes my 2020 Year-in-Review! Thank you *so* much to everyone who stopped by to read this coverage or throughout the year. It was a historic one for Working Casual, with both views and visitors nearly doubling since 2019. I’m honored that so many people would take the time to read my site or chat with me about the topics I love.

What were your favorite games? Biggest surprises? Double back to the megathread for all coverage of this year’s awards, then feel free to drop a comment here or on social media on your reactions. Have a great new year!

Sources: Company Websites, Press Kits, Twitter & Investor Relations.

Disclaimer: Codes were provided by publishers for Assassin’s Creed: Valhalla, Immortals Fenyx Rising and Ori and the Will of the Wisps.

-Dom

2020 Year-in-Review: Independent Studios of the Year

This is one of my favorite articles to write in recent years, showcasing the very best of independent gaming and the people behind the projects.

When covering games and tech, there tends to be a focus on the bigger players. Especially here when I analyze the business side. Yet the industry is so much more these days, with many of the most amazing experiences coming from smaller teams that aren’t owned by major publishers. Some of them even self-publish, a risky and admirable venture in today’s landscape.

This is their much-deserved moment, on the most prestigious list of all if I may. Congrats to everyone, on the list and otherwise, who worked hard to produce and publish their indie titles amidst everything the year tried to stop it. You are among the best, most talented creators and it’s a honor to play your games.

Here goes, in descending order until we arrive at Studio of the Year!

Kinetic Games

Out of all the teams on this most distinguished of lists, Kinetic Games is unique. It’s really just one person: Daniel aka Dknighter. From what I gather, he’s a 24-year old solo dev from the United Kingdom. I don’t even know if there’s a logo or branding. He released his first game into Early Access on Steam this year. That would be Phasmophobia, a four-player co-op ghost hunting jaunt into the dark corners of horror locales such as a creepy houses, deserted hospitals and abandoned prisons. Think the show Ghost Hunters, except way more immersive. And scary.

There’s a lot of super innovative ideas in Phasmophobia. It’s less about jump scares and more the overall aesthetic and environment that’s spooky. It uses a sanity meter, where the wrong choices can result in zero sanity where spirits become aggressive. Its ghosts are procedural, meaning they don’t have a set shape, form or characteristics. Each run is unique. There’s detective work involved, where even talking to your fellow hunters on the microphone or interacting with the environment can trigger a reaction from apparitions. There’s a more “hands off” role for people who aren’t keen on going hunting yet still want to assist their friends. Plus, it supports virtual reality. Why anyone would want to play a horror game in VR is beyond me, but it’s possible. It’s nowhere near the typical horror game, combining a ton of clever systems, which is the reason for its rise to popularity in 2020.

Asobo Studio

I didn’t think it was possible for France’s Asobo Studio to repeat on this annual list of the best indie teams. Then they made Microsoft Flight Simulator. In a stark contrast to their 2019 original game A Plague Tale: Innocence, the classic flight sim is a return for the franchise that had its start way back in 1982. I mean, that predates Windows OS itself. It used to be a pillar of the PC gaming community for decades and hadn’t seen a new release since 2006!

The technology, design acumen and scope of the latest Microsoft Flight Simulator is astounding. It’s a gorgeous 4K resolution. It leverages Microsoft’s Azure to render 3D representations. Pulls in from Bing Maps to create in-game assets, which means it reacts to the world and how different locales change. 37 thousand airports. A couple million cities. At least 20 different aircraft. Realistic piloting mechanics. Asobo even recently introduced a virtual reality mode. Attracting over a million players within weeks of release in August, it’s the fastest-selling game in the series and ended up as a safe way to get one’s travel fix during the pandemic.

Thunder Lotus Games

Based in Montreal, Thunder Lotus made one of the most emotional indies I played all year in Spiritfarer, a management simulator about spending time with loved ones, facing death and moving into the afterlife. As the player takes the role as the new ferry-master to the great beyond, the game blends painterly artwork, traditional simulation mechanics like building up a boat, harvesting, growing, feeding and crafting with a narrative about spirits one must shepherd towards their ultimate passing. Every interaction feels meaningful, and each map location ties into a story of one of the animal spirits met along the way.

Past projects from the team of around two dozen employees include Sundered and Jotun, yet Spiritfarer is their true breakout. Mainly because of its subject matter and intense sense of togetherness in a year where that was near impossible in real life. Something as simple as a hug between two characters felt like a momentous occasion, and I haven’t encountered a mix of bittersweet joy and sadness as much as the final moments alongside a character meeting their maker. It’s exceptional.

Young Horses Games

Bunger Bunger Bunger Bunger. What the heck am I talking about, you say? Bugsnax, of course! A hilarious collectathon puzzler about part-bug part-snack creatures. Made by Young Horses, a team of less than a dozen folks based out of Chicago, it was the most eye-catching and innovative of all PlayStation 5 launch titles. Led by CEO Phil Tibitoski, the studio previously known for Octodad: Dadliest Catch has now solidified itself as the maker of humorous, puzzle-based games with a ton of heart.

Funny thing is, Bugsnax may look cartoonish and light, which it is at times, yet there’s an underlying unease and tension as the player learns more about the inhabitants of Snaktooth Island both character and snack. What stuck with me as much as the clever creature designs, such as the aforementioned burger-beetle named Bunger, was the realistic depiction of relationships between islanders in the community. These folks have histories and dramas, current or lost loves, and it culminates in one of the most unexpected finales of the year. I imagine we’ll be talkin’ Bugsnax as an indie darling throughout this entire console generation.

Moon Studios

Fully remote indie developer Moon Studios followed up its 2015 instant indie classic Ori and the Blind Forest with yet another amazing game last year, the sequel Ori and the Will of the Wisps. It’s not often that the follow-up to a great project can both continue its story and mechanics well then improve on them in almost every single way. That’s what Moon did with 2D action metroidvania Will of the Wisps, as I wrote extensively in my review, one of the top games of 2020.

Its backdrop is a similar dreamlike aesthetic of the Forest, the art team really outdid themselves again, with the similar main character Ori and even higher stakes this time. Platforming is as smooth and pinpoint as ever, while combat is overhauled for the better with a variety of new abilities plus a slotting system of different traits to tailor one’s playstyle. There’s a new quest approach, opening up the map to possibilities and side content. Minus a somewhat tropey main villain, Will of the Wisps defines what a sequel should be and made for a most memorable of adventures.

Mediatonic

Flash back to August 2020. Couldn’t go a day without everyone talking about the latest phenomenon of the battle royale genre, this little old game with a clever twist. Fall Guys: Ultimate Knockout immediately dominated headlines for the entire month when it launched on PlayStation 4, via PlayStation Plus, and Windows PC. The competitive, physics-based platformer royale from Mediatonic, a London-based team with a history of making flash games and Murder by Numbers, found its groove with Fall Guys, hitting the 10 million units sold mark on Steam alone within a couple months.

While it didn’t necessarily have the longest of legs, mainly due to the next entry on this list, its moment was massive. Gameplay is simple, random and somehow elegant at the same time, effectively a fierce party game with its variety of stages and game modes. It provides a sense of progression via a free battle pass and its round-based approach. Plus there’s nothing quite like grabbing that crown to become the winner. Mediatonic proved there’s room for new ideas, and hilarious hijinks, in an over-saturated genre.

InnerSloth

Three Developers! One Communications Director! That’s the team behind Among Us, only one of the biggest multiplayer movements out right now. And it’s not even a 2020 game, technically. Forest Willard, Marcus Bromander (totally dope name), Amy Liu and Victoria Tran are responsible for one of gaming’s wildest stories in 2020, the resurgence of a 2D co-op/competitive spy game from 2018 about shipmates trying to get stuff done while some members are undercover imposters intent on wiping out the crew. (Like, you know your game is big when politicians are playing it online!)

Its gameplay is straightforward enough, centered around movement and completing tasks via puzzles. Genius arises in the interaction between people, making decisions on how to deceive or reveal the truth, convincing others that you aren’t the killer when you really are, that makes it special most notably in the streaming community. InnerSloth’s creation won best multiplayer game at The Game Awards recently, beating out the likes of Animal Crossing and Call of Duty, plus the much-deserved recognition here for the team’s brilliant idea and sound execution. These folks aren’t sus at all.

Supergiant Games

And finally, the indie Studio of the Year is none other than Supergiant Games. It’s impossible to talk the year in gaming without mentioning Hades. Honestly, a game about continually trying to escape Hell defines 2020. It’s simply one of the best roguelike, dungeon crawlers ever made. Want to know how I’m so sure? Because I love it, and I’m notorious for being sour on these genres.

Part of what makes Hades special is its journey. How it began in Early Access, transformed with feedback from the community and launched in peak form in September. Players take the role of Hades’ son Zagreus in his attempts to fight out of the underworld in order to learn more about his family legacy. Its action combat is exquisite. Weapon variety is great. All the mythical gods and personalities are here, many offering assistance in the form of boons that change how each run plays out. Then there’s the most important part, and that’s the persistent story progression. It’s self-referential, acknowledging Zagreus’ continued struggles when characters talk and react to the player’s actions. I’ll gush more about it during my Game of the Year article, suffice to say it’s a must-see of 2020.

Lastly, a special shout out to Supergiant for its company culture. Based on interviews, there isn’t a lot of turnover on the team. Many of the same people have been there throughout its release of critical standouts Bastion (way back in 2011), Transistor and Pyre. There’s zero crunch. Instead of mandatory overtime, there’s mandated vacations. Everyone checks out of work communication for the weekend on Friday afternoon. This is the type of studio environment I want to reward in this setting, not to mention how the result is an incredible game like Hades. It’s a model for studios everywhere, no matter the size.

There’s another list of awards complete. Thanks again for taking the time to stop by as I shout out the best of the indie space in 2020. Plenty more back at the Year-in-Review megathread, including the upcoming, historic Game of the Year awards. Until then!

Sources: AIAS Game Maker’s Notebook Podcast, Company Websites, Press Kits & Twitter, Xbox Wire.

-Dom

2020 Year-in-Review: Five Most Impressive Gaming Companies

Behind all the numbers and corporate speak, companies are people. And it’s those people that worked hard to design, create, polish, quality check, publish and distribute hardware, games, products and services during a tumultuous year that was 2020.

This category is meant to celebrate the teams of hard-working folks at companies with the most impressive lineups or multitude of successes. Later categories will focus on smaller, indie studios and publishers. This is reserved for the stand-out performers, often publicly-traded. We’ll hit all segments of the industry with the Year-in-Review.

No time to waste, right into the awards!

Activision Blizzard, Inc (United States)

While I don’t always agree with its business practices or monetization strategies, there’s no denying the sheer output of Activision Blizzard during 2020. Between new ventures in owned franchises, integration across Call of Duty titles plus the reintroduction of beloved catalog titles, its teams delivered multiple launches amidst the work-from-home demand of the coronavirus pandemic.

The internal teams Treyarch Studios and Infinity Ward collaborating to integrate last year’s excellent Call of Duty: Modern Warfare and Warzone free-to-play battle royale with November’s Call of Duty: Black Ops Cold War was a massive, if not ludicrous, undertaking. Then, put out continuous free updates with its seasonal content model, delivering new maps, weapons and a battle pass every few months. As of now, there’s both cross-play and cross-progression across these titles, nearly everything accessible to players on various platforms. The franchise overall reached $3 billion in net bookings during the 12 months ending December, proving upside of this adjusted business model.

Not to mention, finally, its Activision unit dug into the vaults of its storied IP library to produce Tony Hawk’s Pro Skater 1+2, a remade collection of two skating classics by Vicarious Visions, then a new entry in a long-running series: Toys for Bob’s Crash Bandicoot 4: It’s About Time. Fans have been calling for the company to leverage its back catalog for a long time, so these decisions should satisfy.

Blizzard’s output has been notably lower the past couple years, with Overwatch 2 and Diablo IV in the pipeline. Yet it still released a new expansion in the World of Warcraft legacy called Shadowlands, a release that moved 3.7 million copies in a single day to briefly achieved the fastest-selling PC launch ever back in late November (before CD Projekt’s Cyberpunk 2077 broke its record shortly after). Blizzard’s even received positive early impressions for mobile game Diablo Immortal!

Oh, speaking of mobile. There’s King, one of the most consistent labels within the field. It was mainly about consistent output this year across all three sub-divisions of the American publisher, and its teams deserve a shout out for delivering on these tight deadlines.

Microsoft Corp (United States)

As you’ll see here and a bit later, it’s time to celebrate the people behind the start of a new generation. That’s the main reason why Microsoft and its Xbox staff members easily make the cut. Those who worked through a pandemic to design, engineer, produce, market and ultimately distribute the Xbox Series X|S family.

Project Scarlett, as it was once dubbed, had a formal reveal late in 2019 as the Xbox Series X, and then 2020 happened. Team Xbox had to shift to a more virtual campaign for rolling out, plus deal with the delay of its flagship title Halo: Infinite. They successfully completed this effort in November at the launch of not only the higher-end Series X but the entry level, digital-only Series S as well.

Even without something at the scope of Halo, Xbox platforms saw plenty of worthwhile games and allowed smaller projects to shine. Ori and the Will of the Wisps from Moon Studios is one of the year’s most exceptional. Obsidian Entertainment’s Grounded attracted 5 million players to date and introduced clever new ideas in accessibility. Microsoft Flight Simulator from Asobo Studio reinvigorated a beloved, dormant franchise. It was one of the highest-rated games of 2020, just recently surpassing 2 million players.

Gears Tactics, Call of the Sea, Battletoads, Tell Me Why and Wasteland 3 rounded out the year’s lineup of games on Xbox. Shoot, Microsoft even somehow nabbed the local console launch of Phantasy Star Online 2. While perhaps lacking in triple-A experiences, there was plenty to enjoy.

Shortly before the new consoles, it updated the Project xCloud branding to Xbox Cloud Gaming and launched a formal beta alongside Xbox Game Pass Ultimate in September. It’s now available across 22 countries, with at least four more planned in the future. It’s a compliment to the traditional delivery model, meant to propagate the idea of ecosystem and connection. And it’s a damn fine service from personal experience.

Then there’s the continued growth and appeal of Xbox Game Pass, which snagged a partnership with Electronic Arts’ EA Play membership service as a way to expand its catalog. Recent rumors point to the potential inclusion of Ubisoft games, too. At last count, Game Pass had 15 million paid subscribers, up from 10 million earlier in 2020.

Lastly, in perhaps the biggest news drop of the year for the company and even gaming overall, Microsoft announced the purchase of ZeniMax in September for $7.5 billion. This is the parent company of the historic Bethesda Softworks, home to a number of development teams behind long-running franchises like Fallout, DOOM, Elder Scrolls, Wolfenstein, Dishonored among others. The upside of these games being exclusive to Xbox platforms, or at least having content exclusive to them, is massive. Like, industry-changing massive.

Microsoft’s annual gaming revenue exceeded $12 billion for the first time ever as of its quarter ending in September. While 2020 was light in the major exclusive department, it did feature two new consoles, a major studio acquisition and an expansion of its services. It’s laying the foundation for the upcoming decade, heavily investing in ecosystem in a more holistic approach than competitors.

Nintendo Co Ltd (Japan)

Yep. Nintendo is back on the annual list. During a year where its flagship game ended up being an Animal Crossing, not necessarily the biggest of sellers historically, and competitors debuted shiny new consoles, the Japanese developer and publisher was consistent in sales, output and quirky innovation, leading to its Switch hybrid hitting multiple milestones as the year’s most sought after hardware.

Steadfastness and fun, that’s Nintendo.

Animal Crossing: New Horizons was the headline-grabber here in 2020. The cute, animated life simulator’s launch in March coincided with the start of quarantine, a somewhat bittersweet serendipity that led to it achieving the fastest-selling launch ever for a Switch title at 11 million copies in under two weeks. It exceeded the *lifetime* sales of all other games in the series within 11 days. Then 13 million in 6 weeks.

Since then, it’s moved over a staggering 26 million units to date, already making it the second best seller on Switch behind only Mario Kart 8 Deluxe (a game in itself that saw exceptional momentum last year). Beyond the sales stats, it’s the single Nintendo-published game that served as a virtual safe haven for people to meet and hang out while the pandemic kept them physically distant.

It wasn’t the only notable software from Nintendo during 2020, even if the schedule was lighter than past years on big exclusives. Paper Mario: The Origami King is one of the most joyful and heartfelt games of the year, even if overlooked by general consensus. Its Hyrule Warriors: Age of Calamity collaboration with Koei Tecmo was a surprise critical darling, a musou prequel to The Legend of Zelda: Breath of the Wild. Remakes of older titles like Pokémon Mystery Dungeon: Rescue Team DX and Pikmin 3 Deluxe strengthened its annual lineup.

Then there’s the celebration of Mario’s 35th anniversary, where Nintendo launched a bevy of products related to the plumber’s birthday. Super Mario 3D All-Stars brought three prior gen games to Switch, even if underwhelming in their lack of modernization. Free to download Super Mario Bros. 35 pitted almost three dozen players at a time in a sort of Mario Royale competition. Mario Kart Live: Home Circuit continues in the company’s tradition of innovation, as a live version of the cart-racer. Game & Watch: Super Mario Bros. was the next entry in the collectible type of physical consoles. While I don’t like how some of these are only available for a limited time where the end happens to coincide with Nintendo’s fiscal year end, seeing them acknowledge the anniversary with such fervor was welcome in a difficult year.

Of course there’s the story of how Switch hardware continued to sell gangbusters and set records along the way. It reached 68.3 million units in September, vaulting past Super NES, Xbox One and the original Nintendo Entertainment System (NES) all during 2020. It was the best-selling in the U.S. by units during the coveted November time slot at 1.3 million units, outpacing the shorter supply of the PlayStation 5 and Xbox Series X|S. This marked a record 24 straight months atop the monthly hardware chart by retail unit sales.

All of this led to another stellar year for Nintendo, commercially and generally critically. Its financial situation hasn’t been this solid since 2009, measured by both revenue and operating profit. While it didn’t reveal much in the way of titles like the sequel to The Legend of Zelda: Breath of the Wild, Metroid Prime 4 or Bayonetta 3 last year, as long as Switch is in supply and the team consistently produces quality releases in its own special way, it will likely be a repeat in 2021.

NVIDIA Corporation (United States)

As far as higher-end PC gaming goes, NVIDIA was the backbone of 2020.

Its recognition here stems from the introduction of its latest line of graphics cards, the GeForce RTX 3000 series, plus continued success of its GeForce Now streaming service and a monumental acquisition deal.

The difference in its RTX 3000 card series compared to prior generations is real-time ray-tracing, a fancy way of saying “really cool lighting” techniques that happen while playing which make light sources, reflections and shadows pop when implemented correctly.

I won’t get bogged down in the tech nitty gritty here, there are other sites for that. Suffice to say these graphics cards built on its new Ampere architecture set the standard for performance across the mid and top end of the market. The beefy RTX 3090 and 3080 GPUs debuted in September, then RTX 3070 started in October. December brought the more affordable RTX 3060 Ti.

Critical consensus during reviews was outstanding. The series was lauded for advancements in 4K resolution, Deep Learning Super Sampling (DLSS) to boost frame rate performance and general ray-tracing capabilities. The tough part unfortunately was supply to the market, no doubt impacted by manufacturer yield issues, availability of parts and the pandemic at large. Even with the staggered schedule, scalpers and bots were usually first to order leaving regular consumers either without cards or resorting to secondary sources. Good news is sky-high demand. The tough part is the company said stock will increase next year, though it may take a few months, and scalpers will still be there.

In another major launch for NVIDIA, it formally kicked off its public beta for game streaming service GeForce Now back in February across North America and Europe. It’s really cool tech from the sound of things, though I haven’t tried it myself. Supports cloud gaming on laptop, PC, Mac, SHIELD TV and even Android phones or tablets. What’s nice is it connects to existing library on certain storefronts, although certain publishers have blocked using it with their games. Once NVIDIA figures out incentive to get publishers on board and launch in more territories, it could very well be the ideal option for cloud gaming.

Beyond its latest set of graphics cards and streaming offering, NVIDIA’s RTX technology suite is pushing audio, recording and streaming advancements too. Its RTX Voice feature beta started in April 2020, a module used to improve sound quality when using one’s PC for calls. This was then replaced by Broadcast app during the Fall, which featured new functionality for noise removal and virtual background while streaming.

Oh. There’s also the groundbreaking deal where NVIDIA announced its intention to purchase ARM from SoftBank for $40 billion in cash and stock. ARM is a major player in processors and intelligent computing, which would lead to a combined entity pushing research into artificial intelligence and super-computing. It’s expected to close within the next year or so, though certain investors have speculated it might be blocked by regulators in the United Kingdom. If it does go through, it’s a significant deal within the tech and computing industries.

Back in September, NVIDIA said it set records for quarterly revenue and profits. Sales jumped 57% year-on-year. Its share price reflects the ongoing financial success, more than doubling in 2020. If the American graphics card and chip maker can ensure supply of its latest product suite and close on its ARM deal, 2021 could be another historic year.

Sony Corp (Japan)

Our final entry in the list of impressive companies in 2020 is none other than Sony. Of course. PlayStation 4 achieved new sales records. PlayStation 5 became a huge (quite literally), landmark tech product. Its laundry list of exciting new games offerings both book-ended a generation and set the stage for this future one, with advancements in narrative, performance and accessibility options. The gaming teams at Sony continue to set the industry benchmark for both hardware and software, and deserve recognition for doing all of this during one of the most difficult times in modern history.

The Japanese consumer tech conglomerate started the year with the reveal of the PlayStation 5 logo, then dove into more about its new generation box and its brand new DualSense controller throughout the year.

At the same time, PlayStation 4 continued its commercial success. The second best-selling home console ever maintained decent enough momentum in its final year, reaching nearly 114 million in units shipped as of October. Bolstered by third-party exclusives like Final Fantasy 7 Remake, Persona 5 Royal and Nioh 2 in addition to flagship first-party titles like The Last of Us Part II and Ghost of Tsushima alike. Many of which are mainstays on year-end award lists and, more importantly, internal teams like Naughty Dog worked to set a new gold standard for accessibility features.

Then comes November, the PlayStation 5 launch. It was a big one, literally and figuratively. Sony’s approach is more towards defining the new generation with a new form factor, revamped controller and select games solely for the latest box as opposed to the fully backwards compatible strategy of its main competitor. Admittedly Sony acknowledges that it can’t ignore the millions and millions of PS4 owners, so there are plenty of cross-gen games. Even if its messaging was murky.

Headlined by Insomniac Games’ Marvel’s Spider-Man: Miles Morales and Demon’s Souls from Bluepoint Games/Japan Studio, the PS5 launch lineup was smartly supplemented by joyful surprises like Asobi Team’s Astro’s Playroom and The Pathless by Giant Squid. As part of Sony’s shift towards cross-generational consistency, it also offered a suite of legacy games via the PlayStation Plus Collection to PS5 buyers.

This dedication to exclusive software and new feature sets plus a competitive price led to PS5 being the fastest-selling global launch in brand history, beating out its predecessor. Sony didn’t said by how much at the time. A recent report suggests that the first four weeks reached 3.4 million consoles shipped. (Unofficial for the time being.) Domestically in the States, NPD Group said PS5 achieved the highest launch sales of any console in tracked history during November as measured by both units and dollars, again besting the PS4.

While services like PlayStation Now are somewhat lagging and the future of its virtual reality program is up in the air, Sony’s late PS4 support and movement into the new generation with PS5 marked a transitional year during which it consistently delivered memorable experiences and solid sales results. Out of the five companies on the list, it probably has the most upside for 2021.

Here we are at the end of yet another 2020 Year-in-Review piece. Check back to the megapost for more. Be safe, all!

Sources: Company Investor & Media Sites, Digitimes, NPD Group.

-Dom

2020 Year-in-Review: Biggest Trends in Gaming, Tech & Media

Year-in-Review is here!

Across gaming, technology and media, 2020 both continued major trends from last year and introduced select new ones, most notably around how people consume entertainment and work together during a global pandemic.

Some are common across all, such as digital distribution, streaming platforms and direct-to-home content delivery systems gaining steam this year. Consolidation continued with mergers and acquisitions both big and small, changing the way these industries look. Mobile gaming reached new records, plus targeted a more core audience via traditional genres and gameplay systems.

Then there’s the new or unique, in a year during which two major video game console manufacturers somehow launched new products. Game developers worked in even more difficult circumstances to finish projects in time for ship date. Similarly, 2020 brought ongoing reports of difficult workplace conditions, whether due to sexual harassment or “crunch” culture.

On the media side, topics of political policy, privacy matters and general regulation for social media platforms. Within technology, remote work and virtual collaboration redefined how people work, likely forever.

Let’s now dig into the biggest trends of 2020!

Digital, On-Demand, Streaming & Cloud Everywhere

The transition to digital as the primary distribution platform, whether in gaming or otherwise, is essentially complete with the surge of online storefronts and streaming services that deliver entertainment direct to folks in their homes or wherever on their devices. This was inevitable in my opinion, comparable to the music industry, though perhaps accelerated by the coronavirus pandemic quarantining millions upon millions of (often bored) people.

In particular, 2020 will be remembered as the time where film distributors embraced the direct-to-home model, with major releases such as Universal Pictures’ Trolls World Tour, Disney’s Mulan and WB’s Wonder Woman 1984 all hitting on-demand services simultaneously as their theatrical debuts. This is a tectonic shift within an industry historically reluctant to move away from its traditions.

Comparatively, this model is now solidified within gaming. Xbox Game Pass is the best value around, now with beta access to its Cloud Streaming in select areas. Sony supplemented its PlayStation Plus and PS Now offering with a PlayStation 5 PlayStation Plus Collection catalog. Google Stadia, while not the most popular, is still active and attempting to attract an audience. Amazon introduced Luna, an intriguing new cloud player that will support “gaming channels” with Ubisoft already on board. NVIDIA’s GeForce Now is a go-to cloud technology for PC gamers. Steam and GOG, to name a few, are well-established online storefronts.

The games industry generated at least $175 billion in sales during 2020 according to Newzoo, an increase of 20% year-on-year. A staggering 91% of this is digital sources. It’s to the point where every major media or gaming company seemingly has or supports digital platforms, cloud streaming services or a combination of both. Taking advantage of the ability to reach people on whatever device they want to use. Oh, and the ongoing subscription revenue doesn’t hurt either.

The Next Game Console Generation Begins

Even as I write this, more than a month out from release, I’m still shocked that teams at both Microsoft and Sony were able to successfully launch new gaming consoles in the year that was 2020.

But that’s just what they did. And they deserve eternal kudos for it, considering the type of year it was. The Xbox Series X|S and PlayStation 5 debuted during the same week in November, each with its own distinct strategy to entice people to upgrade to the newest generation of gaming hardware.

Microsoft has expanded its Xbox brand to encompass all of its gaming ventures across console, computers and mobile, so it pushed a multi-tiered product launch with Xbox Series X at the upper end then the entry level-priced Xbox Series S to hit both ends of the market. Xbox overall is now about ecosystem, with its push towards a library of games via Xbox Game Pass and backwards compatibility across software and accessories. Even without a major exclusive like the delayed Halo: Infinite, Xbox Series X|S still boasted the most successful commercial launch in brand history.

Sony’s bread and butter is the core audience, thus its more traditional approach with a bevy of new software titles coinciding with the PlayStation 5’s start. Even if one of them was a shorter “expandalone” in Marvel’s Spider-Man: Miles Morales and another was a remake in Demon’s Souls, Sony fans (and scalpers alike, unfortunately) came out in droves to scoop up the new hardware. Sony said demand for PS5 was “unprecedented,” resulting in the fastest-selling global console launch in history. It also set a new record domestically for launch month dollar and unit sales, outpacing its predecessor in both instances.

This is really just the start for both boxes, notably in short supply during this holiday season. While production will ramp up in 2021, software offerings will as well. It’s an exciting time to be a console owner, or someone that covers the industry to see where sales and consensus go in the future.

Toxic Workplace Environments & Crunch Culture

This important and timely topic deserves an article unto itself, and it’s a trend I hope will ease in the future. It’s not exclusive to gaming by any means, though 2020 brought with it several high profile releases from some of the industry’s most notoriously difficult workplaces, which is why it’s currently front-of-mind. (As it really should be always.)

“Crunch” culture is a part of game development, like many other workplaces. Where people labor for long hours, even weekends, leading up to the completion of a project. It’s the type of tricky situation that impacts both physical and mental well-being yet is hard to avoid for many, since it’s so embedded, so the trend of reporting on this from media outlets is welcome. Places like Take-Two’s Rockstar Games, Sony’s Naughty Dog, Ubisoft and CD Projekt Red plastered the headlines as current and former employees spoke about what it’s like to work under these kinds of conditions.

The latest of these is CD Projekt Red and its downright ugly release of Cyberpunk 2077 this month, a game that was clearly rushed to meet financial deadlines as I posited in my recent piece. This was after executives said there wouldn’t be mandatory crunch. Management held an internal Q&A session shortly after launch, proving that it should have opened feedback loops well before then for its employees. (I’ll note that CD Projekt is fairly compensating employees for their hard work. Rightfully so.)

Similarly, Ubisoft was in the spotlight due to accusations of sexual harassment and general misconduct at certain of its global studios. Back during the summer, multiple people at the company raised abuse or harassment allegations towards fellow employees or even management. One of these resulted in the removal of former Chief Creative Office Serge Hascoët, another the firing of Assassin’s Creed: Valhalla original director Ashraf Ismail. Since then, CEO Yves Guillemot outlined a plan to address this sort of workplace toxicity. It’s yet to be seen if anything major will come of this, however getting rid of the worst offenders is a good start.

Record-Breaking Mobile Game Revenue

Mobile remained the hottest category in its industry last year, as it accounted for nearly half of the yearly global games market at a staggering $86 billion. An increase of almost 26% since 2019.

Leading the charge was a set of five titles each with more than $1 billion in sales, which is a record number for a single year. Two games published by Chinese tech and social media conglomerate Tencent topped the list, with PUBG Mobile at $2.6 billion then Honor of Kings eclipsing $2.5 billion.

Former cultural phenomenon Pokémon GO is still at it, clearing over $1.2 billion in sales. This makes 2020 its best year ever, bolstered by changes made to accommodate stay-at-home restrictions. Rounding out the billion-makers are Coin Master and Roblox, each with an impressive $1.1 billion.

In addition to these big money-makers, 2020 marked a time where mobile publishers continued to combine the model with more traditional gameplay mechanics. The highest profile of these was Genshin Impact, an open world action RPG from China’s miHoYo that’s generated almost $400 million within only two months of launch. Ubisoft’s Tom Clancy’s Elite Squad followed in the steps of Call of Duty: Mobile when it launched back in August, offering a first-person shooter experience comparable to console play on the go. There’s big money in mobile, especially if it can appeal to both casual and console/PC type audiences.

Push for Accessibility Features in Games

As someone who plays with inverted camera controls and often leverages subtitles, this trend is an especially important one. I’m thankful that creators are moving in a direction toward accessibility and inclusion, to where the industry and media at large are celebrating it.

This is a multi-step effort, one driven intrinsically by developers making games easier to play for people of all types, especially those that may have disabilities or other challenges. Flexible settings, camera controls, button mapping or even custom controllers, deaf/hard of hearing considerations, choices for those lacking motor skills, blind/low vision/colorblind filters. Basically, the more varied and considerable the options, the better.

Then, the industry overall is finally signal-boosting accessibility more by rewarding projects with the best options. This culminates in efforts like AbleGamers, Can I Play That, Steve Saylor (Blind Gamer) and award ceremonies specifically dedicated to these extremely important, I’d argue essential, features.

AbleGamers hosted its first annual Video Game Accessibility Awards in 2020. Both The Game Awards and entertainment outlets like IGN highlighted games like The Last of Us II, Grounded (boasting a genius filter to combat arachnophobia), Ghost of Tsushima, Fuser, Watch Dogs: Legion and HyperDot, all of which are setting the bar. One that I hope all creators hope to achieve.

Consolidation, Mergers & Acquisitions

It’s an ongoing move within a variety of spaces, though some of the biggest acquisition deals in gaming and technology took place during the last twelve months. And it’s not just the top-end, massive deals. Many smaller teams were picked up by the mid-tier of publishers, in particular the likes of Embracer Group, Zynga and Enad Global 7 (EG7).

Within technology, the big news makers were of course NVIDIA, AMD and Salesforce. NVIDIA’s purchase of Arm hit a whopping $40 billion in deal value, the biggest in the tech industry this year. Just behind that was AMD grabbing fellow semi-conductor manufacturer Xilinx for $35 billion, while Salesforce’s purchase of communication software firm Slack Technologies hit upwards of nearly $28 billion.

Within gaming, the hottest deal was Microsoft’s $7.5 billion acquisition of Bethesda parent company ZeniMax. It’s an industry-shaking event, where future Bethesda output like Starfield and the next Elder Scrolls project could very well end up exclusive to Xbox platforms. Within China’s local streaming scene, Huya and DouYu have a $6 billion merger planned for mid-2021 (where the resulting entity will naturally be majority owned by Tencent). Then there’s Electronic Arts making a $1.2 billion offer for racing developer Codemasters, outbidding fellow American publisher Take-Two Interactive.

Swedish publisher EG7 announced the purchase of a few notable teams including Daybreak, Zynga is taking over smaller mobile developers plus Embracer Group (THQ Nordic) is buying.. well, literally dozens of development studios or smaller independent companies.

After a super active 2020, will the pace slow down next year? Will Sony or Nintendo partake? Let’s just say I don’t see consolidation going anywhere, anytime soon.

Social Media Politics & Government Regulation

It was an election year in the U.S., one of the most significant in recent history I’d say. Which means social media took center stage in terms of discourse and advertising. This led lead players like Facebook and Twitter in attempts to both earn integrity and stop the spread of misinformation by instituting practices such as removing bad accounts, moderating posts and comments plus flagging threads that had questionable claims. Others like YouTube took a less proactive approach, opting to react to political outcomes after the fact.

Then there’s the similar theme around the U.S. government’s Federal Communications Commission (FCC) and Section 230 law, which in the past has allowed social media and modern tech companies to essentially avoid accountability when it comes to the content produced on their platforms. This stemmed from Facebook and Twitter restricting a NY Post story on now President-Elect Joe Biden.

Now the question becomes, where will Section 230 and responsibility of social media companies go under a new administration? It sounds like Biden opposes the law, though it isn’t clear what will happen if it’s adjusted or even repealed. Would self-regulation be better? I don’t know if that’s an effective option, since it wholly depends on media companies acting against their own self-interest of maintaining freedom of speech and keeping active users. Yet there’s also the responsibility to keep platforms clean of lies. There may not be a perfect outcome.

Remote Work & Virtual Collaboration in Technology

In terms of general technology trends this past year, the ramp-ups in remote working, artificial intelligence and the movement towards automation all defined 2020. These are all areas expedited by how companies operate during a global pandemic, which challenged the traditional model of office work and manual processes.

For those companies with the capabilities, remote work increased during the early days of the pandemic in March and April. For those without, they had to put them in place. Quickly. There’s the initial challenge of getting basic tech to workers, maintaining security at home, collaborating virtually and balancing family life outside of the office.

Flexibility in workspace proved to be a key topic across the tech landscape. Back in July, Google made a major decision on virtual working: Employees have the option to work from home until July 2021. During October, Microsoft announced that employees with the option to do so can stay home permanently, as part of its focus on both location and workweek hours.

Among many other things that 2020 changed, where and how people work is one of the most significant. You might even be reading this while working in your home office or bedroom, getting ready for a video call or virtual meeting. It’s my thought that this will become the norm, the pandemic was merely a catalyst.

There we have it: The biggest trends of 2020 completed. Which ones caught your eye? Any others you’d point out? Check back to the megathread for more Year-in-Review content. Thanks for stopping by!

Sources: Andrew Neel (Photo), Bloomberg, GamesIndustry.Biz, Kotaku, Microsoft Blog, Newzoo, NPD Group, Sam Pak (Photo), Sensor Tower, Sony Interactive Entertainment, Ubisoft Entertainment, Xbox Wire.

-Dom

2020 Year-in-Review Megapost Is Finally Here

It’s almost over.

The year unlike any other that was 2020 is, finally, coming to an end. To say it’s been a challenging, newsworthy one is an understatement.

While a tragic global pandemic, the voice of Black Lives Matter supporters and a major presidential election in the United States made headlines broadly, the games industry, modern media and new technology served as a much-needed distraction from the often disaster that was daily life.

And it turned out to be a historic one, especially for the games industry. A brand new console generation, Nintendo’s commercial success, the continued rise of digital distribution, cloud and streaming services, visibility of independent creators, questions around workplace culture and underdeveloped projects plus continued advancement in mobile titles blurring the line between tradition and future defined a tumultuous yet successful year for many.

This mega-thread will serve as the nexus for Working Casual’s year-end coverage across these various industries and topics. Over the course of the next week, I’ll be tackling the biggest 2020 has to offer. Trends, companies, indie teams and, of course, the best video games of 2020.

Here are the categories:

Working Casual 2020 Year-in-Review:

Biggest Trends in Gaming, Tech & Media

Five Most Impressive Gaming Companies

Independent Studios of the Year

Dom’s Top 10 Games of the Year

Check back often to see the links to new posts, and feel free to comment here or on social media once they are up. Wishing a safe and healthy holiday season to all, especially those on the frontline of the pandemic, and an incredibly Happy New Year!

-Dom

CD Projekt Didn’t Have To Rush Cyberpunk To Meet Fiscal Demands, But Did Anyway

CD Projekt Group’s fiscal year ends in December.

Cyberpunk 2077 happened to be delayed three times then released in December.

Coincidence? Unfortunately, no.

Though it didn’t have to be this way, with a now historic launch debacle that began with complaints of rampant issues especially in PlayStation 4 and Xbox One versions then accelerated to various online stores and retailers offering full refunds plus, the cherry on top, PlayStation pulling it from its digital store in an unprecedented move within the games industry.

To understand why the company would have been fine, even benefited from, pushing out the launch of its new IP and latest flagship game past its fiscal year end, we have to look back at its general timeline and financial standing leading up to now. Plus, consider the reports brought forth by media like Bloomberg and others on difficult labor conditions and “crunch culture.”

Essentially: CD Projekt could have easily weathered a Cyberpunk 2077 release date in first quarter of 2021 financially, even if that coveted pre-order revenue smoothed out over time. The company boasted early on that pre-orders alone exceeded 8 million copies. The question becomes how many of those are being refunded or returned. And how many people will refuse to purchase it because of the company’s approach during a shaky launch.

My belief is that executives absolutely should have moved the date again to at least Q1, primarily to allow more time for developers to polish and ensure that previous generation versions were ready to go. The current debacle alone is proof that no flashy marketing push or early financial benefit is worth the dangerous publicity and loss of goodwill caused by a botched launch.

Until recently, Polish developer and publisher CD Projekt Red (the core games business of CD Projekt Group) was a one franchise studio with The Witcher fantasy games. The enormous success of 2015’s The Witcher 3: Wild Hunt and its subsequent support from the studio cemented it as one of the world’s preeminent action role-playing designers, and set the stage for exceedingly high expectations going into its next project.

In the time between then and present day, CD Projekt established itself as one of the largest and most financially successful publishers across all of Europe. It’s achieved at or above $100 million in sales each year since 2015, at times much more than that. At one point back in May, it even surpassed Ubisoft Entertainment as the region’s largest video game company by market valuation at over $9 billion in capitalization.

So, what happened?

The current debacle alone is proof that no flashy marketing push or early financial benefit is worth the dangerous publicity and loss of goodwill caused by a botched launch.

CD Projekt Red transitioned to a two-franchise studio as part of its mid-term strategy starting in 2016 when it kicked off pre-production on Cyberpunk 2077, a project that was actually announced a full generation ago way back in 2012. As its development continued and the company began to show the futuristic, first-person role-playing experience both privately and publicly, culminating with an appearance from Keanu Reeves, its legend grew to where it became one of the most anticipated games of the decade if not ever.

During this same time, the team continued support of the 28-million unit seller The Witcher 3 with two expansions in late 2015 and mid-2016, the introduction of a standalone version of its strategy card game GWENT, plus a Nintendo Switch version as recently as last year. While development costs along with marketing spend certainly ramped for Cyberpunk 2077 into this year, sales of these products bolstered its financial well-being throughout as its dedicated fan base showed support.

CD Projekt Major Product Launches:

  • The Witcher 3: Wild Hunt: FY15 Q2
  • Hearts of Stone: FY15 Q4
  • Blood & Wine: FY16 Q2
  • GWENT: FY18 Q4
  • The Witcher 3 Switch: FY19 Q4
  • Cyberpunk 2077: FY20 Q4

Overall, CD Projekt Group generated $140 million and just under $100 million in annual revenue during 2019 and 2018, respectively. Operating income hit nearly $50 million last year, over $30 million the year prior. That’s *growth* right smack between major titles, trending upward into a product launch even prior to the deluge of pre-orders. Does this happen without a level of trust built up over years of ongoing support and quality craftsmanship? Sure, The Witcher 3 had its issues at launch in 2015. But the whole reason CD Projekt garnered so much trust is its consumer-facing practices of constant improvement, support and attention to its audience.

At least, that’s how it used to be.

It’s clear to see when checking the charts in conjunction with its timeline of events. Even before pre-order dollars accumulated in recent quarters, CD Projekt had a stable revenue stream from the work its developers had already done and the goodwill it built with a sizeable base. Expenses will rise into a major, AAA release especially in the final push. It’s not always reinforced financially by work the team had already done on prior projects, like with the beloved Witcher series.

Subsequently, running parallel to its game development business was its GOG.com digital distribution platform. It sells a variety of PC games, and has become a notable supplement to the group’s structure in the lead-up to a big launch from its sister subsidiary. GOG.com has proven a reliable venture, contributing upwards of 40% to total sales at times over the past couple years.

While it seems at face value that CD Projekt goes as its major game franchises do, its distribution business offers a separate revenue stream even if some of that success is inevitably tied to its internally-published products. Producing games isn’t the sole driver of its direction, and this sort of supplementary source could have propped up the company into next fiscal year.

Now of course, another pressure point when talking about the timing of launches is investor sentiment. From all indicators, shareholders bought into the downright outrageous hype cycle of Cyberpunk 2077, which initially had a launch date of April 2020 (Can you imagine?). It was pushed to September. Then November. And after that, to December. A convenient timing right before its financial calendar turned to 2021.

Notably after the first delay, CD Projekt’s share price rose. And kept going, reaching a peak around September. After a brief dip in November during the last delay announcement, it bounced right up again showing the ever-present appetite of investors for that juicy Cyberpunk 2077 profit. Would it have declined again if it was delayed to 1st quarter next year? Sure. But I doubt it would have experienced the precipitous drop since launch day, December 10th, which has eliminated over $2 billion in market value in just over a week.

The stock is now trading below where it started the year. And it was all avoidable.

My hope is there’s a lesson here: a general change towards optimal quality over financial gain, transparency over secrecy, giving people time to complete quality work rather than setting a date to meet a deadline that wasn’t realistic in the first place.

Briefly on the development side, it’s now obvious even December ended up being an unrealistic deadline based on the results and reporting around its challenging launch timeline. In addition to media reports of long hours and tough work as far back as over a year ago, another Bloomberg story today shares that management held a question and answer session on Thursday with employees. Luckily, they were able to vocalize their frustrations and press executives on various topics related to Cyberpunk 2077’s development cycle.

A “developer asked whether CD Projekt’s directors felt it was hypocritical to make a game about corporate exploitation while expecting that their employees work overtime,” the story’s author Jason Schreier writes, revealing a frustration bubbling up within the very people who are now tasked with fixing the game.

(Word is that all employees will be receiving their intended bonuses regardless of where critical reception ends up. Which is how it should be. People should be compensated commensurate with their labor. I won’t overly celebrate management paying their workers acceptable wages.)

The elephant in the room, of course, is the impact of a global pandemic. One which hit right during the final part of the project’s timeline. The coronavirus effect, which is difficult to quantify and impossible to ignore. CD Projekt employs a workforce of over 1,100 people, the majority of which transitioned to remote working for 2020 according to its mid-year filing. As if crunching for a major product launch and dealing with an impractical deadline wasn’t enough, these folks also had to adjust to a new working situation and team dynamics outside of the office.

What now, then?

Well, it’s time to rebuild. And more importantly, regain trust. I firmly believe that the loss of goodwill and faith in the management team wasn’t worth the short-term financial boon of launching right before the 2020 financial calendar ended. What a quarterly table or chart doesn’t show is the longer term effect of losing credibility as an executive team, or having a set of employees still working to the bone on a game that should have been delayed to a more reasonable schedule.

Management needs to be held accountable, by all parties: employees, media and consumers alike. They should have been more open to feedback from their teams ahead of time, not after the fact. I doubt CD Projekt will ever reveal how many of the millions upon millions of copies sold were actually refunded, but revenue numbers won’t lie when that time comes.

This is the type of industry-shaking event that doesn’t happen often. My hope is there’s a lesson here: a general change towards optimal quality over financial gain, transparency over secrecy, giving people time to complete quality work rather than setting a date to meet a deadline that wasn’t realistic in the first place.

CD Projekt can bounce back from the launch of Cyberpunk 2077. In three to six months, the game could very well be in solid shape and people will be more confident in management’s decision-making. Its employees may return to more stable hours and have an improved feedback loop with higher-ups. Over the next couple years, it could (and likely will) go on to sell tens of millions of copies and people will forgive management for their hasty decisions back in 2020.

But it didn’t have to be this way from the start.

Sources: Bloomberg, CD Projekt Investor Relations, Sony Interactive Entertainment.

-Dom

Earnings Calendar Oct & Nov 2020: Gaming, Media & Tech Companies

First off, no jokes. I hope everyone is safe right now, especially here in the States. I know the pandemic is impossibly tough and puts a strain on everyone’s physical well-being and mental health. But it’s still bad out there, and it will only get worse if we don’t keep up with the same precautions. Please be patient and wear a mask.

The upside is that right now, we can spend even more time playing and discussing games, media and technology. And it’s as good a time as any, with a new earnings season underway and new tech products right around the corner!

Which brings us to this: The Internet’s single biggest compiled list of of earnings dates for the most important companies in these sectors. Now covering over 75 stocks, including those from numerous markets worldwide plus a handful of newer listings this time around.

Check out the calendar above to save as a handy image or click on the Google Doc below, which has links to company websites with more information. It’s the only resource you’ll ever need to track these dates.

I’ll periodically update as others are firmed up, so set up that bookmark and check back often. Now on to the calendar and highlighting three companies to watch closely this season.

Working Casual Earnings Calendar Oct & Nov 2020: Gaming, Media & Tech Companies

Activision Blizzard, Inc (ATVI): Thursday, October 29

On one of the busiest days this quarter, domestic gaming juggernaut Activision Blizzard reports its third quarter results. I expect the ongoing momentum of Call of Duty: Modern Warfare, mostly attributed to its Warzone battle royale mode and constant stream of seasonal updates, to drive an impressive suite of figures. We’ll also hear about attribution from mid-September’s Tony Hawk’s Pro Skater 1+2, a critical darling, plus perhaps an indication of early sales for Crash Bandicoot 4: It’s About Time after its launch in early October. As for forecasting, I expect Activision Blizzard to maintain or even raise guidance with Call of Duty: Black Ops Cold War debuting in November, which I fully expect to be the best-selling console game of 2020.

Square Enix (9684): Early November

Square Enix will publish its second quarter report in early November, and it’s the most important in a long while. Mainly because this is the first period after the Japanese publisher’s flagship Marvel’s Avengers released in September, to both mixed reviews and an uncertain market reaction. As I wrote recently, it was the best-selling title in the U.S. during September according to The NPD Group. Industry tracking firm SuperData recently estimated it was the third best-seller of the month globally measured by digital sales on consoles, moving an approximate 2.2 million copies. This would be the company’s second best digital start ever behind April’s Final Fantasy 7 Remake. Square Enix has consistently reiterated very positive guidance leading into this fiscal, yet hasn’t shared global unit sales statistics for its second major title of 2020. Makes it tricky to know which way it will go.

Corsair Gaming Inc (CRSR), Unity Software (U): TBD

The games industry saw some notable initial public offerings during September in Corsair Gaming and Unity Software, the former a headset and accessory designer while the latter is a software provider boasting one of the world’s most popular gaming engines. Corsair shares declined right after listing, though have since rose over 70% to give the company a valuation over $2.2 billion. Unity Software has been hot from the start, its stock gaining 46% since first trading. This makes its market valuation a staggering $26 billion, at or ahead of the most established of publishers and software providers. This will be the first time these companies report publicly outside of their respective prospectuses, so we’ll see how underlying financials align with market sentiment once we know the exact dates.

Thanks for stopping by and hope to see you again soon!

Sources: Company Investor Relations Websites, NPD Group, SuperData.

-Dom