Review: Deathloop Is Made of Great Parts That Could Be Excellent Next Time Around

“If I’m not dead, then what the bleep am I?”

Well if it’s 2021, then probably caught in a time loop.

Expanding on a mechanic seemingly at peak popularity, Deathloop is the latest time-bending title to be set in a never-ending cycle that resets upon ending. And it’s a seriously good one, even if its punchy gameplay, clever level design and crafty progression aspects mask its fatal flaws such as lack of variety, uneven ability usefulness plus an unsatisfying story arc. Moments of excellence only highlight its potential for greatness, as it doesn’t quite reach the lofty heights it so stylishly attempts to grasp.

I adore so much about Arkane Lyon’s creation, which doesn’t fit neatly into current genre conventions. It’s a first-person action game with shooting, exploration, puzzle, stealth and run-based elements that presents as a sandbox immersive sim then really ends up being more linear and restrictive than it initially promises. Its timeline is out of order, a nifty way for the team to tell a narrative primarily by slowly dispensing information then allowing the player to manipulate outcomes within this overall framework.

The tricky part with a game as ambitious as Deathloop is certain parts feel lesser when compared to superior ones, like a full course meal where the main dish is exquisite yet the appetizer and dessert are unfulfilling.

That mysterious, quick-witted woman is Julianna Blake who acts as the main antagonist. While mercilessly heckling Colt via the radio, her goal is maintaining the loop’s integrity. Which means hunting Colt as he tries to kill seven other fellow Visionaries. She can invade mid-run, controlled by either AI or a person online. This sort of multiplayer is a novel concept where it’s much more fun to be Julianna of course, busting up a run as opposed to losing. Visionaries themselves have key roles in the history and management of Blackreef, and the loop ends only if they are taken out in a single day.

This place is meant to be a utopia for most inhabitants dubbed “Eternalists” as they are experiencing a form of amortality, effectively being unable to die. To Colt, it’s a suffocating trap from which he must be freed. He and Julianna retain knowledge across loops, an important distinction compared to most everyone else who are experiencing the “First Day” indefinitely. 

During a tutorial that’s a contender for longest ever because it takes a couple hours to get one’s bearings, the game spills its general structure and gameplay tips. There are four different areas across Blackreef: Fristad Rock, Karl’s Bay, Updaam and The Complex. Each can be accessed via a menu at four times of day: Morning, Noon, Afternoon or Night. Time doesn’t move forward while at these locations, only in the menu between them. And order doesn’t matter, Colt can wait until a later time of day if needed. It’s a smart way to allow players to take time devouring each map, learning the intricacies without the pressure of a ticking clock. Once nighttime is over, or Colt perishes, the loop resets back to dawn.

Which means there are 16 different combinations, all of which take place on the same base area yet showcase a variety of scenarios. Places look fresh in the early sunrise while everyone is waking up, possibilities supposedly endless to all. By sundown, the worst are battered or blown up. The best are ready for a snazzy masquerade ball or big environmental puzzle. It’s through these mechanisms that Colt influences the world to precisely line up his kills. The player’s main goal is to figure out how to either manipulate characters or leverage their movements across areas to achieve an “ultimate” run where every single one doesn’t survive.

Objectives in Deathloop are organized using a system of leads: One is a set of Visionary storylines, mapping out where each individual starts and the most relevant information learned to bring about their demise. What’s curious about these is they don’t actually end the first time Colt kills a given Visionary. He has to do it the correct way for the lead to “complete”, which means it’s then ready to be a part of his master plan.

For instance, the first big lead during the tutorial phase is Doctor Wenjie Evans at The Complex. She’s actually the one responsible for the loop, her hope was to have an eternity to learn about it and while studying she realizes she comes to the same conclusions each day. Thus realizing she forgets each night. Her major contributions are related to upgrades I’ll discuss later. Her main ability is duplication, pulling in copies of herself from other timelines. While one way to kill her is taking out each of her copies, that might not be the optimal outcome.

The other objective type is a set of Arsenal Leads. These aid in learning how to acquire Slabs, unique powers from most Visionaries, plus select elite level weapons. Slab acquisition happens naturally while targeting the Visionary Leads, then high-level weapons act as a sort of side quest within the guidelines of each run. This is essential in my opinion, especially given the game’s limited arsenal.

There are also menu options for Discoveries and Documents. The former shows action items that build up over time as the player explores. The latter is anything related to character journals or audio logs. Some are essential to move the narrative forward, others reward with bits of lore and help round out what the heck is going on while some explain minor systems. All of this is a lot to take in and was overwhelming for a while.

From this menu navigation to moving around the world and engaging in combat, Arkane has made a core experience where almost everything has such a great feel. Controls are snappy and always responsive. There’s this tangible feedback, partially due to technology in the DualSense controller, that bolsters immersion even in the most basic of interactions. 

Gameplay for the most part is predictable for a first-person game, especially in the Arkane lineage of Dishonored and Prey. There’s walking, traversal, climbing, shooting and grenade tossing. Stealth is viable and I’d argue essential in the first half of the game’s 20 to 30 hours. A “focus” button can mark and examine a certain number of enemies, which is helpful when gauging the layout of a new area. Then there’s hacking of sensors and turrets via the Hackamajig, an on-the-nose gadget which somehow also acts as a radio.

Weapons fall into traditional archetypes: pistols, shotguns, submachine guns and rifles. There really aren’t that many different options. Long range is particularly lacking. And early on, rarity is low. Colt finds a base level gun early to practice target shooting. Every other piece of gear is picked up from defeated enemies. Visionaries and Arsenal Leads having the highest quality. Crappy weapons can even jam, “because they are old” the game argues, which is quite literally the opposite of fun. I wish it was never greenlit. It’s the type of system clearly added to encourage stealth in the early parts, even though the player’s low health and minimal ability suite already does that. Luckily, the best weapons won’t jam which leads me to wonder why have it in the first place.

Each Visionary has a role to play, a distinct personality, individual relationships and most even have fancy powers to steal. These are called Slabs. They offer up core abilities, which will be familiar to fans of Arkane’s earlier works. The first of which is Reprise, a slab intrinsic to Cole’s loadout which can revive him twice. There are five others: The teleporting Shift from Charlie Montague. Aether from Egor Serling offers invisibility. Nexus links foes together so hurting one does the same to everyone else, held by Harriet Morse. Fia Zborowska has Havoc, basically an enrage cheat code. Then there’s Aleksis Dorsey’s Karnesis, a form of telekinesis that can throw enemies around. Julianna can actually use any of these abilities, so she’s another source. Using these takes a regenerating resource called Power.

A nice system around these slabs is upgrading them. The first time a Visionary is killed, Colt earns the base slab. Each time after that, he can collect an upgrade linked to their particular ability. It’s an incentive to finish out portions of a run or to take down Julianna when she invades. For example there are slam and area-of-effect options for Karnesis, while Shift can reach further or hover in mid-air. Very much welcome, especially the latter for rapid traversal.

Enhancing Colt and his gear are items called Trinkets, customization options that have a notable impact. These are pieces “imbued with Blackreef’s temporal anomaly” and can either be made in certain locations or picked up from enemy drops. Character trinkets are general buffs like boosted health, more power, faster movement and the like. Weapon trinkets can improve accuracy, damage, rate of fire or reload speed. Combining these helps beef up Colt to take on a more run-and-gun approach, or spec towards stealth with more silent alternatives.

So, how does the player retain things other than knowledge across runs? A mechanic called Infusion, originally discovered by the aforementioned Dr. Wenjie. Using Residuum, a resource collected from items throughout the world or by killing bosses, the player can carry over weapons, slabs and trinkets from one run to the next. Anything in one’s current inventory can also be sacrificed for a select amount of Residuum, which means duplicates or unused items can be useful. Especially because Residuum itself can’t be carried over at the end of a night and is lost upon death, so it’s essential to hang onto it and allocate towards becoming more powerful.

Regrettably the rules of Infusion are confusing. Presentation in the menu is messy. It takes a while to understand what carries over and why, resulting in missed infusions or precious lost items. The best approach is to infuse anything and everything because there’s a risk of dying and losing everything that isn’t locked in. There’s filtering options which can help a bit, it’s still not the most intuitive upgrading path.

The ultimate problem here, and it’s one of my major gripes with Deathloop, is the limitation of its loadout system. Having three weapon slots is perfectly fine. That works. It’s the slab and character trinket options that hurt. Colt can only have two slabs equipped at once. Shift alone is almost an essential power, therefore always taking up a slot and making it so that there’s one spot for four other slabs. If Colt can have all these slabs at once, why can’t he use them? I mean Blackreef is this special temporal location where time is clearly special. Isn’t there a lore workaround that would allow him to alternate between more than two slabs?

Similarly character trinkets are limited to four. Double jump is classified as a trinket rather than an inherent skill. So it’s really three slots as far as I’m concerned. Double-jump is a ridiculous video game thing that most characters have by default. Colt should too. I assume Arkane wanted to streamline these systems so as to not confuse players, since their prior games had a ton of different skills. So then let us pay Residuum to unlock additional slots as we get to know the game. It could focus attention during the early portion then add to character growth later on, and by the end both Colt and the player would understand how to leverage them together.

The tricky part with a game as ambitious and feature-packed as Deathloop is certain parts feel lesser when compared to superior ones, like a full course meal where the main dish is exquisite yet the appetizer and dessert are unfulfilling.

Setting up these loadout setups and character systems is well and good. I’m surprised to report that the best moments happen when it all goes to crap. Which is often in Deathloop. At least for me. It’s the exact opposite of something like Dishonored in that regard, where I never had any success with combat. Shooting hits hard here, and it’s the most enjoyable and effective strategy other than the first few times through each level. Assuming the player has powered up. Downside is stealth is much more of a slog than arousing the sort of tense dread that’s key for such sequences. I just didn’t feel as compelled to take my time when the alternative felt that much better.

Tying into the location mechanic mentioned earlier, a most genius move from the development team is its take on progression. The player chooses where and when to start a given go, whether it’s for key information gathering, targeting a Visionary’s unique power or focusing on an individual weapon lead. It’s the type of rewarding feedback loop that makes a player feel smart and more enabled, both from a knowledge standpoint plus actual in-game capabilities. Colt as a character is growing as he’s remembering why the heck he’s on Blackreef.

There’s also progression baked into levels. Certain collectibles talk about the player’s prior actions. Enemy placement also changes based on time of day. Some denizens are drunk and easy to kill. Others have geared up so they are much stronger. Visionaries can move around and be manipulated. The most glaring instance here is a big party thrown by Visionary Aleksis Dorsey taking place at his mansion in Updaam. It’s really the biggest singular event during the loop. Depending on what Colt does during earlier phases of the day, major characters will attend the event which makes it easier to take them out in succession.

Contributing to a sense of place and aesthetic, Blackreef has its own distinct look plus history to discover. Aesthetic does a ton of heavy lifting in Deathloop. Style is uber slick, a 60’s jazz-spy vibe complete with war-torn trappings, scientific experiments, pop art decor, a soundtrack full of piano chords with blaring horns and even animated sequences straight out of a noir cartoon thriller. This is totally enhanced by ongoing banter between Colt, his inner voice and Julianna’s constant poking fun.

The famed Arkane level design and environmental expertise is solid in this sort of setting. Cold War era industrial buildings allow for labyrinthian corridors and subterranean passageways. The Complex is Blackreef’s research center, where Dr. Wenjie and Egor Serling conduct unconventional tests in sterile laboratories plus outdoor satellite arrays. Fristad Rock houses an intricate upscale dance club and mysterious underground bunker. All locations have various locked doors and un-powered levers, clearly indicating the need for further information. What’s cool is most access codes are randomized, meaning they change for different players and even across loops. It’s a crafty way to change things up.

Updaam houses a handful of its most stellar areas, mainly because that’s where gamemaker and Visionary Charlie Montague operates plus Aleksis hosts the aforementioned mansion party. Montague has built these live-action games scattered throughout different maps which he calls “Charlie Challenges.” The Moxie is a set of laser and pressure plate challenge rooms. Condition Detachment is the name of his space invader type of game, which houses his personal lair and one of the main areas where he’s vulnerable. There’s also Charlie’s robot called 2-Bit, made from half of his brain and one of the few sentient beings that remembers things across loops. It’s crucial to explore these areas.

This is all to say one of the things Deathloop does best is make Blackreef as memorable for its character as its practicality, namely in offering alternate route options for Colt. It’s a bizarre place where intriguing scientific questions are asked and not many answers are needed by most.

The run-based nature here and neat side activities lends itself well to quick sessions as much as marathons. Someone can play strictly for the purpose of gathering information. Others are used to take out Visionaries. Even get in on some invading. Within the industrial shore town of Karl’s Bay, there’s an unconventional way to make trinkets. An amatuer science team sets up a failed experiment to harness Blackreef’s temporal power. There’s a machine that exposes the area to “visitors” from other timelines, which Colt has to kill quickly in order to collect enough Residuum. There’s plenty of individual tasks to complete, even if some aren’t necessarily as rewarding.

Speaking of rewarding optional content, I have to give a special shout out to Heritage Gun. It’s a top-level Arsenal lead reward from arguably the best side event in the game which spans an entire map. While technically a shotgun, it has a slug round mode with incredible range. Fans of The Chaperone in Destiny will agree.

I mentioned the feedback and general feel before. A major component is sound design in Deathloop. It’s straight up mean. Pure. Colt’s boots crunch across the hard cement. Julianna’s radio chatter emanates from the DualSense controller speaker. Announcements from Visionaries blare through the streets. And the kill sound when using a weapon is up there with the best shooters of all time, crunchy and violent. It’s especially satisfying when using a rifle.

Tying in with the audio design is how voice acting, dialogue and writing is top-notch. Especially the two main characters. It’s amazing to see black leading characters and actors in a triple-A game of this caliber, both of which are exceptional performances. Jason E. Kelley plays Colt and Ozioma Akagha features as Julianna, each getting the best out of the other. It helps that their writing is savvy, and I looked forward to hearing their quick antagonizing at the start of each sequence.

Unfortunately, the distinction within Deathloop for its most fatal of flaws is rigidity of effective play styles and lack of variety hidden beneath the veil. Weapon archetypes are restricted to just the handful I mentioned before. And there’s at most a couple within a given type. Especially long-range. Other than a sniper hidden behind an Arsenal Lead, there’s a single rifle to find. Some of its best top-end gear is locked behind the Deluxe Edition.

The decisions around loadout options are most restrictive and unfortunate. Certain powers feel essential, like Shift allowing teleporting and quick movement especially vertically. Others are flat out inferior or hyper-specific for more hardcore fans. Like Nexus, the one that can tether enemies together, is fiddly and unreliable.

I was hoping Arkane kept with its tradition of giving players more credit in our understanding of how abilities can synergize. I know Deathloop leans into action elements more than its predecessors. The beauty of an immersive sim or sandbox game is still flexibility of choice. Limiting the use of various hard-earned powers feels like an unnecessary constraint. Hand the player tools then let them decide, rather than forcing them to pick.

Elsewhere there’s superfluous features that didn’t jive with so many other smart decisions. There’s a sort of cosmetic outfit system for Colt and Julianna, which doesn’t mean much when everything is first person. These are mostly earned by protecting the loop as Julianna, which I guess is some incentive to play as her. Then there’s dual wielding weapons, a setup that’s against the very framework of having a weapon in one hand then a power or hacking device in the other. The only time I used it was with one of the special weapons that transforms from dual pistols to a submachine gun, because there’s a damage boost associated with doing so.

In terms of opposition to Colt’s bloodbath, most enemies are flat-out dumb. The main challenge comes from overwhelming numbers rather than savvy tactics. Difficulty levels in this context would be very much welcome. It’s so easy to trick or lose Eternalists. At least it can be hilarious!

For the most part, Deathloop avoids the deathtrap of most time loop games: Repetition. That is until the endgame, when there’s little else to figure out or discover. When the targets are all lined up. There’s really only one way to finish the game properly. So it comes down to execution. It’s demoralizing to be invaded or make one mistake busting that final run. Losing time towards the finale is what hurts most, not materials or upgrades because the player is swimming in them by that point.

Arkane shows its more level-based roots here in guiding toward the optimal run, less akin to moving chess pieces on a board and more like finally seeing the solution in a board game with a predefined path. No matter what one has done before, conforming to the “right way” is the only option. Which is why I consider Deathloop to be ultimately a linear narrative jumbled up to make it seem otherwise, which is excellent during the discovery phase then traditional once the picture clears up.

I will say its final gauntlet of ripping through the Visionaries was admittedly intense the first time I did it. Like a boss rush. It was amplified because Julianna showed up at night during the last push. I wonder if the game’s programmed to do that. If so, kudos to the team for ramping up that adrenaline. Subsequent tries are much less so, because the player already knows what to do. It’s the problem of knowing a solution before being able to finish a puzzle, leading to an anticlimactic situation.

Quality of life features and various options are a mixed bag. The tutorial menu is exceptional. All of the game’s mechanics and systems are organized in a single spot, which is convenient. Heads-up display has a ton of flexibility. There’s not much in the way of dedicated accessibility options beyond text size. No colorblind considerations or detailed controller mapping. There’s no actual map or waypoint system, which could be helpful even considering all the hand-holding it does documenting everything the player finds. Plus there’s no photo mode, for those that might be curious.

Visual options on console are more varied. All of them have dynamic 4K scaling. One mode favors resolution, a second is where performance prioritizes a steady 60 frames-per-second then a raytracing mode. Naturally I played in performance mode, which was flawless. I have read about certain challenges on PC, which Arkane is addressing.

Sad to report I did experience certain technical issues on PlayStation 5. The game hard-crashed twice, causing me to lose progress since it saves only at the start of a given area. I had one instance where the menu overlay froze and wouldn’t leave the user interface, making the game unplayable without restarting. The most weird of all was on the controller side, losing control of the character, dropping inputs and not being responsive. I’ve never had that happen with any other PlayStation 5 game since its launch. I even updated the game pad to the latest software, it continued to happen occasionally.

Ultimately Deathloop feels like the foundation of an incredible game most notably in its structure, systems and level design. Its style is impeccable, which only carries it so far.

Here’s the toughest part of Deathloop. Maybe this is personal, though I bet I’m not the only one. It can be tiring playing a game where you have to be “on” all the time. When everything is out to kill you. It would be ideal if there were ways to guard against being seen. If cosmetics actually acted as disguises or deception came into play. Maybe more eavesdropping and investigation. Learning information by pretending to be an Eternalist. Using a mask to mingle at Alex’s party then isolate a target. The “sneak around until caught then murder anything that moves” mentality is much more basic than comparable assassin simulators like Hitman. It can feel just as badass to execute a clinical misdirection, and it’s often more efficient.

To act within the constraints of Deathloop takes a lot of experimentation, patience and time. One early tool-tip pops up to say “don’t just shoot everything.” Once Colt is powered up, it’s quite literally a feasible option, if not the best path, to do exactly that. Why slow and steady when there’s a much more effective strategy? There can be fun in experimentation I guess, though is that a good enough motivator for most players? Not those like me.

Up until this point, I haven’t included much about its narrative. It’s tricky to avoid spoilers in the context of a time loop game, and honestly the story isn’t anywhere near a highlight. There’s random tidbits of history and lore told via collectibles. Julianna drip-feeds certain points of Colt’s past during dialogue. I think the story itself is less important than the manner in which it’s told here. There’s also the ending, of which there are multiple versions, all of which are disappointing and ambiguous. I’m alright with open-ended conclusions. This just isn’t a partially good one of those.

Ultimately Deathloop feels like the foundation of an incredible game most notably in its structure, systems and level design. Its style is impeccable, which only carries it so far. It’s truly a more constrained, even linear experience disguised as something with more options and possibilities. Story is jumbled by its nature then even when it’s mapped out, it’s mostly middling.

It claims to offer a lot, then limits how the player uses its tools. This makes it tricky to describe Deathloop at its core. First person action? Puzzle murder sim? Run-based shooter? Semi-sandbox stealth? If this were a test, the only answer would be “it wants to be all of the above which means it ends up being something else.”

Some of these make it amazing. It’s a heck of a lot of fun in the heat of battle, hip-firing shotguns and clearing baddies on the way to a boss room. Then slows to a snooze, walking the same looking rooms for crumpled papers or recorded logs. There’s rewarding side content, then optional exploration that just isn’t worthwhile except for the most diehard of lore fanatics.

It’s a conundrum. In some ways more ambitious than predecessors in Arkane’s heritage, yet the result is just as focused. Jumbling the timeline is a clever presentation style. Like a murderous Memento or even more bloody Pulp Fiction. The journey of getting there is where true genius is revealed, because the final revelation is much more pedestrian than it could have been.

It’s presented as having freedom and creativity mixed within a loop concept. It ends up being closer to a linear shooter campaign with a handful of powers and select hacking capabilities all jumbled up a la Source Code, where the goal is to figure out how to execute the right outcome rather than an outcome of one’s choosing. There’s fun in getting there, it’s a fantastic game. There’s just a handful of elements that miss the mark, enough not to dub it a masterpiece.

Title: Deathloop

Release Date: September 14th, 2021

Developer: Arkane Lyon

Publisher: Bethesda Softworks

Platforms: PlayStation 5 (Timed Console Exclusive), PC.

Recommendation: It’s an odd one from a platform standpoint, the rare PlayStation 5 console exclusive published by a company now owned by Microsoft. Deathloop itself is up there with Arkane’s prior releases, especially better on the action side. Definitely a must-play for PS5 and PC owners specifically those that prefer shooters as opposed to pure stealth games. Don’t expect it to say much thematically or in the way of a riveting narrative. It’s purely a fun time figuring out puzzles, select side content and blasting through maps full of enemy fodder. Worth it!

Sources: Bethesda Softworks.

-Dom

Madden & Mobile Score Big in Record August Report for U.S. Games Industry Sales

Yes, it’s football season again in America which means autumn is on the way. And a new Madden NFL game is atop the charts.

The world is returning to its natural order.

Jokes aside, I first want to say I hope everyone is well in this challenging portion of the pandemic. Which is still going on, despite what some might have you believe. I wish you and your families all the best during this still difficult time. Hang in there.

Hopefully for a quick distraction, industry tracking firm NPD Group reported its monthly U.S. games spending report for August 2021. It’s a huge one. As in almost $4.4 billion in spending, which marks an August record for overall sales across the industry’s history.

Within the Video Game Content category, which saw monthly sales growth of 5%, the aforementioned Madden NFL 2022 led the total software chart. This is a feat the Electronic Arts-published franchise has accomplished now for a staggering 22 straight years during its launch month! The last time a Madden NFL title wasn’t the best-seller in its first month was August 1999 when wrestling game WWF Attitude outpaced the start of Madden NFL 2000. Granted, this was a time when the latter of which had a limited amount of days during that measured period.

Mobile continues its climb notably as more people open up their commutes and traveling, accounting for over $2 billion or roughly 45% of the domestic spending total. Led by Candy Crush Saga, Garena Free Fire and Roblox among others, this segment is a driving force behind the record August performance.

Swapping to the console side, Nintendo Switch, Sony’s PlayStation 5 and even Xbox Series X|S continue solid trends leading Video Game Hardware category spending to a 45% increase and an August dollar total that hadn’t been reached since 2008. Nintendo Switch was the best-selling in August by unit sales, thus retaining its spot as the top-seller for 2021 so far. This unit sales lead is the 33rd consecutive month for the hybrid console, which I expect to continue thru next month and beyond with the launch of its new OLED model.

PlayStation 5’s first year momentum marches on despite widespread supply shortages. It was August’s highest-selling platform by dollar sales, a metric by which it also leads for the year to date.

The literally massive PlayStation 5 has been on sale for 10 months now. During that time, it’s the fastest-selling PlayStation brand platform in tracked history. As I noted last month in July, NPD Group reported it was the fastest-selling hardware ever thru nine months at the time. Now that its comparison has reached the Nintendo Switch’s holiday season, the PlayStation 5 no longer holds the top spot. Still an impressive run given constraints on the inventory side. It could even return to being the quickest seller, depending where production goes.

Now that I’ve hit the highlights, it’s time to move into the full August figures.

United States Games Industry Sales (August 1st, 2021 – August 28th, 2021):

As detailed in the above gallery, overall consumer spending rose 7% to $4.37 billion during August 2021. Spurred mainly by Madden, mobile, subscriptions plus both older and newer hardware growth despite semi-conductor concerns, this is an August month record across NPD Group’s tracking history. Full-on proof the games industry keeps on moving as the most popular entertainment vertical.

Expanding to annual figures, total consumer spend on gaming year-to-date hit nearly $38 billion. This is 13% higher than the first eight months of 2020. All of the three major categories saw double-digit growth during this time, showcasing the stickiness of demand, general fan retention and even audience expansion.

Video Game Content i.e. everything from software, mobile and related sales made up the bulk of these monthly totals, reaching $3.88 billion in August. Or around 89% of overall spend. Which is 5% better than the same time last year. Underlying this is the sixth month in a row where mobile alone generated $2 billion, something that only happened three times all of last year.

As NPD Group reports have shown recently, the strength of 2021 to date sales continues with Content alone moving up 11% to $33.33 billion in aggregate during this time-frame.

Digging into individual title performance during August, I mentioned before how Madden NFL 2022 led the chart during its first month on sale and maintained an historic streak going back more than two decades. As a result of.. kicking off this initial performance, the game is immediately the fourth best-selling title of 2021 so far.

Football wasn’t the only big story of the software list. Open world samurai slasher Ghost of Tsushima, which came out on PlayStation 4 back in July 2020, saw a resurgence in August due to the start of its Director’s Cut version including an upgrade path to PlayStation 5 alongside a new expansion. Sony’s PlayStation exclusive was ranked 110th in July. Talk about making moves!

Rounding out the Top 3 was, of course, Call of Duty: Black Ops Cold War as it entered its latest Season 5 of ongoing content. The military shooter is published by Activision Blizzard, a company that’s still under a lawsuit due to reported workplace toxicity and a culture of abuse towards women and marginalized people. I’m behind the employees fighting back against executives.

Right after this was the 4th best-selling title of the month in turn-based strategy game Humankind. Published by Sega and made by Amplitude Studios, it was the top-selling PC game during August. It’s already 5th on the 2021 to date chart for PC as a platform. An exceptional start, especially for a game without a console release just yet. (I guess it did launch on Google Stadia.. hah.)

Otherwise, the top monthly rankings were about as expected. Business as usual for a couple Nintendo games among the ten best-sellers: the ever-present Mario Kart 8 then The Legend of Zelda: Skyward Sword HD moving to 7th from its top spot in July. The publisher has a number more in the Top 20, as always.

Minecraft in there like usual. Assassin’s Creed Valhalla did show a nice move back into the Top 10 from #20 in July, likely due to ongoing support via Ubisoft’s downloadable content. In terms of new releases, No More Heroes 3 from Grasshopper Manufacture started at #42. Tough to contend in August as a Switch exclusive and with only a few days in the tracking period.

Below are the software ranks across all measured platforms for August plus year-to-date.

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

  1. Madden NFL 2022
  2. Ghost of Tsushima
  3. Call of Duty: Black Ops Cold War
  4. Humankind
  5. Marvel’s Spider-Man: Miles Morales
  6. Mario Kart 8*
  7. The Legend of Zelda: Skyward Sword HD*
  8. Minecraft
  9. Assassin’s Creed Valhalla
  10. MLB The Show 21^
  11. Super Smash Bros. Ultimate*
  12. Call of Duty: Modern Warfare 2019
  13. Ratchet & Clank: Rift Apart
  14. Animal Crossing: New Horizons*
  15. Pokémon Sword & Shield*
  16. Mortal Kombat 11
  17. Super Mario 3D World + Bowser’s Fury*
  18. The Legend of Zelda: Breath of the Wild*
  19. Mario: Golf: Super Rush*
  20. Super Mario Party*

Top-Selling Games, 2021 To Date, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. Call of Duty: Black Ops Cold War
  2. MLB The Show 21^
  3. Resident Evil: Village
  4. Madden NFL 22
  5. Super Mario 3D World + Bowser’s Fury*
  6. Marvel’s Spider-Man: Miles Morales
  7. Mario Kart 8*
  8. Monster Hunter Rise
  9. Minecraft
  10. Assassin’s Creed: Valhalla

Video Game Hardware remained the biggest monthly grower shared by NPD Group, jumping 45% to $329 million in total spend last month. This is the single best August result for the category since $395 million back in August 2008.

“Were enough units available to actually satiate consumer demand this year, I have little doubt this record would have been absolutely smashed,” said NPD Group’s Mat Piscatella after sharing the report.

And I concur. We’ll never know the ceiling for hardware sales during these recent months with a dire chip situation for everything from automobiles to consumer tech to appliances and beyond. The unfortunate part is how this is expected to continue in the near-term, so this category’s true potential during this latest generation of platforms won’t be revealed until years to come.

Within these constraints, I mentioned before how Nintendo Switch retained the top spot in August and 2021 by unit sales thus increasing its incredible streak of monthly wins. Since November 2019! This begs the question of how long can it go? Based on a potential pricing move for the base model and demand from enthusiasts for Nintendo Switch OLED, launching worldwide October 8th, my guess is unit sales thru the holiday season will be led by Nintendo’s hybrid console.

Dollar sales leader for both August and year-to-date PlayStation 5 is faring well, even if no longer the fastest-selling platform in history. Both Game Boy Advance and Nintendo Switch are now ahead of PlayStation 5 during each platform’s respective first 10 months on market. Within Sony’s storied gaming history, it’s still top dog. Between that and leading recent months by revenue, partially bolstered by a higher price point than Switch, the PlayStation brand is as ubiquitous as ever.

Similar to recent months, there wasn’t much in the way of details on Microsoft’s Xbox platform sales. NPD Group did reiterate how Microsoft is selling-thru to buyers as many Xbox Series X|S boxes as it can produce in the States. It’s just seemingly not as many as its competitors. I’m curious about these production dynamics, in particular the gap between platform performance. I didn’t see a comparison or any granularity past these general comments.

We’ll have to live for now knowing that all three major manufacturers are performing consistently in the domestic market, just a matter of how well!

Last category on the docket before closing up shop is Video Game Accessories. It’s the only one of the three that didn’t experience growth during August, coming in exactly flat at $164 million in contribution.

This was Microsoft’s category to shine last month. The team’s Xbox Elite Series 2 Wireless Controller achieved best-selling status out of all accessories, implying that even though many people can’t buy consoles, the high-end game pad is attractive. Mainly because of its compatibility with various generations and devices, including Bluetooth capability for use with cloud gaming.

When looking at the year as a whole, the result for Accessories stays much more positive. Its annual figure to date is up 12% compared to last year, reaching nearly $1.59 billion. Sony’s PlayStation 5 DualSense Controller white variant kept its position as the year’s highest-selling accessory. No doubt mapping in parallel to its underlying console trajectory, as folks opt to purchase additional game pads for co-op or multiplayer use.

Another month in the books. While it wasn’t the most eventful, there’s still plenty of news, indicators and trends to follow.

Yet another record for overall spending, this time an August month, and hardware growth leading to the best category result in 13 years. A set of impressive streaks for Nintendo and Electronic Arts, while Sony’s latest platform trajectory remaining the best it’s ever been.

Companies selling out of console stock, trying desperately to make enough to keep up with intense demand. Big movers and shakers on the software side, plus mobile’s steady presence for content spending alongside subscription services increasing in popularity.

Top-end game pads propping up an accessories segment that often moves as hardware does early in a cycle.

September marks the last month of the third quarter already! It’s a busy one, even in a year with noticeably less output at the triple-A level. Perennial seller NBA 2K from Take-Two Interactive has a new annual entry. Nintendo’s silly party game WarioWare: Get It Together is out. Then there’s Deathloop, the unusual Xbox Game Studios title exclusive to PlayStation 5 that I predict will outperform. Life is Strange: True Colors, Lost Judgment, Diablo II: Resurrected and I imagine a surprise or two will be featured in stories upcoming.

Not to mention the biggest topic in hardware next month as Switch’s OLED model hit shelves. How will it fare given the environment, and will PlayStation 5 keep pace? Can Microsoft boost Xbox output to compete in the rankings?

We’ll know more then. Thanks everyone for stopping by this month and hope to see you again soon!

*Digital Sales Not Included, ^Xbox Digital Sales Not Included

Comparisons are year-over-year unless otherwise noted.

Sources: Electronic Arts, Neil Gardose (Photo Credit), The NPD Group, Sensor Tower.

-Dom

Review: Psychonauts 2 is an Incredible Sequel That Doesn’t Mind Being Weird & Wholesome

“Oh, you think the human mind is safe? That’s cute!”

It’s difficult to be genuinely funny. Always walking a line between upbeat and morose, corny and original, hilarity and outright bombing. Even trickier to make media that’s consistently humorous, especially a video game spanning over multiple hours. Near impossible to find the right balance between that humor and hitting impactful subject matter plus layering an entertaining gameplay loop on top of everything.

Psychonauts 2 is that near impossible outcome.

It’s a unique, comical and even thought-provoking third-person adventure game that combines exquisite humor, witty references, well-written characters, productive exploration, trippy environments and satisfying mechanics. It’s that full course meal with no filler, unlike any other series in the industry and a worthy follow-up within a franchise that stands out for mostly the right reasons. The weird ones, too.

Psychonauts 2 is clearly a labor of love from developer Double Fine Productions, made mostly prior to the studio becoming part of Xbox Game Studios. The sequel to 2005’s cult classic Psychonauts is the culmination of many years, assisted by a crowd-funding campaign. The team obviously used that time to maximize the belly laughs, detailed world-building and genius general direction that makes it so good.

It’s fun. And funny. Granted, occasionally dark. Then has the courage to ask big questions surrounding mental health, self-reflection and human consciousness. It’s a psychology lesson and philosophy debate layered within third-person action platforming. A total trip, and well worth the wait.

Studio founder Tim Schafer and team start Psychonauts 2 with a great cutscene intro, summarizing both the first release and virtual reality game Psychonauts in the Rhombus of Ruin. This allows a quick refresher for fans then an entry point for everyone else. The recap shows how 10-year old physic Razputin “Raz” Aquato fled from the family circus, was found by a spy agency called the Psychonauts, fought off a rogue summer camp counselor with the help of fellow campers, learned about his psychic powers in the original then rescued Psychonauts leader Truman Zanotto in the VR spin-off.

A few days later, the sequel begins.

Back at Psychonauts “Motherlobe” headquarters, self-proclaimed dentist and amateur brain surgeon Dr. Loboto is being interrogated because of his involvement in Zanotto’s kidnapping. By diving into his brain, a common tactic used by the squad, agents Sasha Nein and Milla Vodello along with the player controlling Raz learn that someone internally is feeding information to an outside evil mastermind. Turns out Loboto is merely a puppet. The boss’ name is Maligula. Allegedly deceased long ago, her “Deluginist” followers are attempting to bring her back with necromancy, an area the Psychonauts have suspiciously been funding recently. That doesn’t sound good. It means there’s a mole! The sequence acts as both story setup and an introduction to action mechanics, namely platforming in 3D realms and light melee combat with ranged capabilities.

The Motherlobe acts as a home base where Raz learns he’s actually an intern. It’s an awesome hub, more expansive than Whispering Rock summer camp. Agents scatter the halls. A mural of “The Psychic Six” founders looms over the common area. There’s a mail room, barber shop and even a bowling alley. Raz meets the other interns, a scenario reminiscent of his fellow campers in the prior game.

Considering it takes place in both the physical and mental planes, Psychonauts 2 is all about its cast of characters with the interns, agents, foes and even Raz’s family playing huge parts. Many of them are quite literally the levels or “dungeons” as these places exist only inside their minds and are cleverly intertwined. It’s fun getting to know the Aquatos in particular and how certain folks from the original are related to new characters. It makes for a feeling of familiarity and togetherness, like the player is part of something bigger where everyone still has plenty of quirks.

The main campaign revolves around figuring out who is snitching within the organization. Which means chatting with people and using a Psychic (PSI) Portal of course, where Raz’s astral projection jumps into select minds to gather information and learn about their motivations. Way cool, I know! Dialogue options are smart and quirky even if they have no effect on the core narrative. Character interactions make the Motherlobe and surrounding areas feel alive, enticing all sorts of exploration that’s immensely rewarding. Figuring out the mysteries of someone’s thoughts. And gathering up the best kinds of collectibles.

As is evident with the description of the plot and character names, Double Fine is among the best in the industry at references, puns and double entendre use. This really is a highlight as little details go a long way to add up to something immeasurable. It’s hard not to stop everywhere and admire what the designers crammed into these locales. Design decisions like these make its world simultaneously bizarre and uniquely endearing. Double Fine can play with so much using these settings that blend the real with imaginary worlds.

For instance, health is called Mental Energy. Censors are brawler enemies that stamp out unwanted thoughts. Regrets are dangerous flying bugs carrying heavy kettlebells because they weigh people down. It features aptly named collectibles like physical manifestations of that person’s thoughts called Figments, Emotional Baggage that requires Raz to find a tag to comfort it or cute Half-a-Mind brains which need two lobes to make a whole. Instead of a fingerprint, one’s Thinkerprint is used for accessing areas.

It’s very fun noticing a small touch or chuckling at an enemy description, partly because it’s relatable. Double Fine lightly pokes fun while simultaneously acknowledging the seriousness of mental health. There’s a stylized feel throughout the entire project, like it’s tuned to feel uncanny yet familiar. The player uses an intern’s manual as a journal to track quests, skills or inventory. There’s so much care in Psychonauts 2, whether obvious or hidden, and it all contributes to the cohesiveness of its tone.

Mission structure is standard, then has multi-layered objectives within each story quest. There’s the main campaign trying to uncover the mole with its own set of requirements around that investigation. This takes Raz to mind locations such as the casino hospital of Hollis Forsythe, interim leader of the Psychonauts, and agent Compton Boole’s mental cook-off among others.

Then there’s optional tasks opened by talking with certain characters. A conniving intern convinces the player to take on a scavenger hunt, claiming it’s important agency business (hint: it kinda isn’t). Lili, Raz’s girlfriend and Zanotto’s daughter, asks for help in trying to help her father bounce back from his captivity. A set of interns need help boosting the signal of their pirate radio station. Then there’s the Aquato family side quests, a personal favorite because it shows more about Raz’s past. His father Augustus played a role late in Psychonauts, now we meet the full crew including his precious Nona who keeps reminding him of the family’s curse that they will die in water. Most end up tying back into the narrative in exciting ways.

All of these are really a great way to flex an improved movement system. Raz is a child acrobat by trade meaning he’s already an expert double jumper, ledge grabber and wall bouncer. Then there’s the Levitation power, which lifts Raz on top of a ball for him to move more quickly and get to greater heights. It’s floaty and a bit unwieldy, used as a psuedo-sprint button since there’s no dedicated button for speed. Platforming is generally solid, though I’d like a more controlled sprint mechanic. It can occasionally be difficult to know where Raz is landing when leaping, the sort of situation where an indicator could help. Especially among higher level challenges.

Even so, one of the highest compliments I can pay Psychonauts 2 is it’s more fun to move around and take the scenic route than use fast travel (which is a nice option to have here of course). There’s always something to collect or a character to find. A fun area to explore. This sort of love for traversal is a staple of the genre’s best experiences.

It wouldn’t be a video game about psychics without powers, of course! Certain “PSI-Powers” are carryovers from the original: The aforementioned Levitation technique. Telekinesis, the ability to throw objects. PSI Blast is a projectile energy beam. Pyrokinesis is, naturally, a big old fireball. And Clairvoyance allows Raz to see from another being’s perspective. This materializes what they think of him, and changes based on the person. Or animal. It can be quite amusing.

As he’s grown a few days since last game, Raz learns a handful of new abilities. Mental Connection is used to connect ideas, essentially grapple points, and pull the player towards them. Primarily a movement mechanic that allows for more vertical exploration plus a combat tactic where Raz to zip around, pull enemies or snag objects in mid-air. There’s also Time Bubble slowing anything in its path. Helpful during platforming to new places or fighting against quick opponents. Lastly there’s Projection where the player creates a separate paper version of Raz. This copy can open secret areas or serve as a much-needed distraction during battle. He’s also a master of one-liners.

Double Fine shows off clear innovation and creativity baked into environment and level design along the way. There’s four main open areas in Psychonauts 2 plus more than a dozen individual minds to tour. Almost all of them are memorable, especially in how they bend themes or blend them together. As Raz starts to learn his new powers in the second act, exploration really opens up. Notably into more vertical spaces. For example in the physical world, The Questionable Area is a bootleg theme park and natural attraction outside the Motherlobe which houses deposits of “Psitanium,” the game’s fictional element and main currency. It’s also where Raz’s family sets up shop. There’s a later game open area that ties into the game’s lore, featuring some of the earliest Psychonaut technology.

Jumping into a human consciousness is really where the artwork, color palette and innovation pick up. These are just big enough to enjoy collectible gathering and power experimentation, then have focused objectives to get done in order to progress the story. Without digging into spoilers, I’d like to highlight two of these mental environments to prove what makes this game so special.

As mentioned before, a woman named Forsythe is temporarily leading the Psychonauts while Zanotto is recovering. She’s also the intern coordinator, so Raz has to start his bureau education within her mental classroom. The other leaders are setting up a big casino mission, which Forsythe forbids any interns from joining. These savvy kids get the idea to, quite literally, “change her mind” by urging Raz to use Mental Connection. The player ends up tricking her into associating risk with success. Now she wants to gamble with the agency’s finances.

Forsythe was a medical professional before joining the Psychonauts, so her mental space starts as a run-of-the-mill hospital. Through collectibles, Raz learns that her mentor stole her seminal work. Once Raz changes her mind, her worldview shifts to a hospital casino hybrid where neon signs and bright lights take the place of a traditional sterilized look. The player has to unlock a high roller suite by figuring out puzzles and fighting their way through her psyche, which will stop her from gambling everything away. A roulette wheel accompanies the maternity ward. “Pillenko” is a pachislot machine with a pharmacy twist.

It’s an exceptional aesthetic with only a tinge of dark humor. Like when a snarky playing card says to Raz: “Sorry, I don’t talk to jokers.” The scenario also presents a myriad of questions: Is it smart to convince people to change their minds? What are the consequences? Will that impact who they are? Forever?

Separately, my favorite mind palace is called PSI King’s Sensorium. It’s a sensory overload of color and sensation set amidst the psychedelic backdrop of a music festival. It’s fully color-shaded, even Raz himself looks different. A truly bursting rainbow of shades and sounds galore. During the associated mission, the player has to work with a ball of light to set up an epic concert. A Feast of the Senses.

Problem is, the band and instruments are all missing. Each member represents one of the five senses, so the player drives a hippy van around an over-world map looking for the missing mates. At one point, the ball of light says some characters “like to get high.” Raz points to a mountaintop. “Oh you mean they go way up there?” And there’s long lines of people waiting for food in the world where the nose band member is located. Tongue-in-cheek references like this abound in Psychonauts 2, tickling the funny bone.

There’s mechanical and symbolic significance here amidst all this natural (and potentially chemical) beauty. First it’s the introduction of the Time Bubble power, representing how people should slow down and enjoy their surroundings. PSI King also suffers from Panic Attacks that manifest as especially brutal enemies. These ugly creatures are super fast, disorienting and downright ugly. And, of course, the culmination of Raz’s effort during this sequence has massive story implications. Part of the payoff is hearing the game’s best song.

For those that have played Psychonauts, PSI King’s Sensorium is definitely the Milkman Conspiracy of the sequel. Both of these minds show Double Fine’s genius, melding extraordinary location design with relevant themes, artwork and gameplay. This blissful concoction couldn’t happen anywhere except video games.

Psychonauts 2 occupies this open space in the industry as a fantastic action platformer not based on a furry mascot, cartoon character or Italian plumber. Its content is much more nuanced than standard adventure games, its environments more daring and jokes hit that much harder.

Now, I have to address combat. The best way to describe it is serviceable, leaning towards solid. It’s certainly not the game’s strongest aspect, more a means to an end than a great time in the moment. Raz uses a psychic hand to slap enemies around, which can be upgraded for further combos or beefed up damage. There’s the PSI Blast ranged attack, perfect for defeating aerial opponents. That also has boosts to create additional projectiles or reduce cooldown. The player can dodge out of the way, even counter attack, though I found this whole process slightly slower than I’d like.

Then his other powers come into play, such as tethering with Mental Connection or burning an area with Pyrokinesis. The latter is a specialty of mine because it causes enemies to break off their current path and run around on fire. Problem is that hit feedback and damage indication are weak, plus the melee moves in particular lack a certain oomph present in better action games. I didn’t mind fighting, though at a certain point in the story I started to avoid conflict when in free roam spots.

Boss fights are far superior to individual combat encounters with fodder enemies. These were always surprising and had mechanics specific to a given area. One would require flinging objects at certain targets with Telekinesis, another asked the player to grapple around the arena in order to output damage. A couple were anticlimactic in the end. Which happens when there are this many, I suppose.

On the mechanical side, a key aspect to balance out platforming and combat is the inclusion of puzzles. They mainly integrate with movement to manifest in environmental puzzles, requiring the player to pilot Raz around areas to complete mini-goals before progressing. Connection thought clouds within a subject’s mind is a popular one. Back in PSI King’s Sensorium, connecting spotlights to prisms in order to make rainbow bridges. Another mind has the player riding a bowling ball around ramps and overpasses. There’s even an entire cooking competition sequence during which Raz is prepping the correct ingredients while being timed, hoping to craft that perfect dish.

Its smart combination of spacial and traditional puzzles are essential to making Psychonauts 2 so effective, many of them reflecting the current hardships or confusion within someone’s brain. It’s less about patching up issues and more about understanding. Winning little battles, then trying to at least continue on after conceding that solving doesn’t necessarily mean fixing.

Beyond its overall presentation technique, Easter Eggs and callbacks are icing on the cake. Which makes sense. The game is set mere days after the last one, as agents make sure characters such as Coach Oleander (a protagonist previously) and Dr. Loboto know when claiming they are changed people. Similar to something like Waterloo World in Psychonauts, there are over-worlds within certain mental spaces that connect to individual levels. The fast travel friend Oatmeal aka “Little Buddy” is present as well.

For those games that offer it, progression is an increasingly important system because it’s a primary reward loop. Good games are rewarding. The best ones respect a player’s time commitment. This is one area where Psychonauts is traditionally cumbersome, which is still the case in the sequel. Even more so with the introduction of a Pin customization system.

Overall, Raz has a Rank. This isn’t increased by experience points. Rather, it can move up a few different ways. The easiest is to collect 100 Figments or what’s called a PSI Challenge Marker, the latter of which is more hidden in harder-to-reach places. Each of those earns a single rank. The other way is by using a vending machine to combine two different items together: Nine PSI Cards, another collectible that’s easier to find, with one PSI Core that can be purchased with currency. That process creates a PSI Challenge Marker, which again bumps up the rank. Got all that?

I understand the desire to make collecting items meaningful. It’s just the whole combining process isn’t intuitive or streamlined. When the game has to constantly remind the player how to rank up, that tells me there’s one too many steps involved.

Then there’s Intern Credits used to upgrade individual PSI Powers. These are earned by completing tasks, ranking up or snagging certain items across the world. A very useful system that allows four powerful upgrades for each power. I maximized Levitation in order to vary my movement capabilities plus Pyrokinesis because, well, fire is always useful!

Adding even more complexity, flexibility and even pizazz are what’s called Pins, personalized options purchased strictly via collected Psitanium nuggets. Raz can have three equipped at any time. They are haphazardly categorized, a messy presentation that screams it was good in theory though thrown together in execution. The pins themselves are quite fun and malleable. It’s a smorgasbord of different choices. Some are cosmetic, like a classic dance for Raz’s idle animation. Many are practical including a ground pound for Levitation or gaining Mental Energy when grappling. Then there’s those that completely change how the game plays. Glass Cannon increases both incoming and outgoing damage. Time Warp makes a Time Bubble speed up instead of slow down.

There’s even a pin to gain the ability to pet animals. Why that isn’t on by default, I’ll never know!

This is all coordinated by agent Otto Mentallis, master engineer and gadget guy. He’s the brains of the team when it comes to tinkering and experimenting with mechanical objects. His Otto Matic vending machine sells all of these cores, items and pins. He even lets Raz borrow two gadgets: Thought Tuner offers access to new areas by finding “stray thought” grapple points. Otto-Shot Camera is a basic, effective photo mode. His lab also has a nice touch with the Hall of Brains, showing off the title’s myriad of financial backers. Like one big brain gumball machine, another perfect choice in any number of presentation decisions by Double Fine.

Looking at other options, namely those of the quality of life and accessibility variety, the studio thankfully puts a focus on these features. There’s a suggested control scheme that can be fully customized. A number of assist features from subtitle size, text clarity, colorblind considerations, no fall damage, invincibility and narrative combat mode which makes the player super powerful when fighting. There’s a content warning and mental health disclaimer after booting it up. Similar to the original, the Collective Unconscious allows access to prior mental locations then there’s a fast travel mechanic whether in big open spaces or within minds when revisiting them. You can tell Double Fine cares about its players, no matter their abilities.

Performance is consistent on current generation, noting that I played on Xbox Series X. Based on a chart shared by Double Fine ahead of launch, older consoles will run at 30 frames-per-second. Loading time is impressively fast which helps a ton during travel and post-game. It’s the type of game that lets its art and color carry it visually as opposed to outright resolution. Both high dynamic range (HDR) and variable refresh rate (VRR) are available on Xbox Series X|S while PlayStation 5 doesn’t offer these more advanced options. I’d say it will look and run well enough even last generation for most players other than the most picky, which probably have the new boxes or a gaming PC already.

I’d be remiss not to mention its soundtrack, full of jazzy tunes, punk anthems, background beats and even rock operas. The music is highlighted by Jack Black’s incredible psychedelic power ballad shown in a 2020 trailer here. There’s also expert use of sound effects, changing the sound of walking on different surfaces, blaring casino machines, bouncy boings as Raz levitates around plus squishy noises when poking throughout a brain world. Yet another example of the heightened attention to detail, this time on the sound engineering side.

Because it’s a character story, there’s a notable quality in its voice acting prowess. Richard Steven Horvitz shines as Raz. Nick Jameson doubles as Oleander and Loboto. Roger Craig Smith, Yuri Lowenthal and even Elijah Wood were recruited for select roles. Then of course, a Double Fine favorite, Jack Black himself makes his presence felt. This is a small sampling of the talented actors that make dialogue so engaging and deliver on the writing team’s intended humor.

I did have reservations about certain choices from Double Fine, as much as I adored the whole package of Psychonauts 2. Many might be considered nitpicks. There’s random two-dimensional platforming segments that seem to be there more for visual flare than mechanical enjoyment. This 2D angle pops up in a couple different minds, I could take it or leave it mainly because the mechanics are much more limited than anywhere else making Raz feel notably heavy.

While it offers certain features, I think it could do even more from both a cosmetic and game mode standpoint. There’s so much the team could do with outfits and areas. The player can pick which color ball is under Raz as he levitates, but can’t choose his look! There’s an Aquato circus area that’s way underutilized. It’s ripe for time trials, acrobatic challenges or even survival modes. I see big upside for an expansion even, especially adding new spots based on different people’s minds.

The game walks a fine line between helpful and distracting when it comes to text pop-ups and reminders. I counted a few times where two or three overlays littered the user interface, which was unexpected from a game this sleek. I know it’s trying to convey helpful information. This just isn’t as welcome in the middle of a tricky platforming section.

It’s hard not to stop everywhere and admire what the designers crammed into these locales. Design decisions like these make its world simultaneously bizarre and uniquely endearing. Double Fine can play with so much using these settings that blend the real with imaginary worlds.

Many games claim it, yet few of them succeed: There really is no experience quite like Psychonauts 2 out there. A masterful and refined sequel that builds on the original’s formula, it’s expanded to include an even richer cast of characters and the amazing areas within their respective minds. There’s not many complaints throughout and a whole lot of laughs until the end.

What surprised me most is where its story went, how well it includes so many special characters then comments on mental health without being heavy-handed. There are twists. Serious revelations. I felt for characters, especially when others try to make decisions for them. It’s a genuine, even if somewhat convoluted, narrative about family, relationships, what people do to try to help one another, the consequences of choice and how everyone has their own inner demons.

Psychonauts 2 occupies this open space in the industry as a fantastic action platformer not based on a furry mascot, cartoon character or Italian plumber. Its content is much more nuanced than standard adventure games, its environments more daring and jokes hit that much harder.

World detail is magnificent. Even when visiting places multiple times, which can be done during the campaign or end-game clean-up. In fact, I’d highly recommend sticking around after the finale because things change in reaction to what’s happened. Even after around 25 hours deep into my play-thru when I hit the ending, I didn’t want to stop playing. After the credits rolled I jumped back into levels multiple times, surprised to see they had changed and reacted to the state of its world.

Double Fine are masters of their craft, this is exactly where they should be and I’m thankful for it. They specialize in dual meaning, character modelling, hybrid themes and exceptional references. It’s easy to miss how much they pack into these areas which makes it that much more pleasing to revisit them. I adore so much about Psychonauts 2 that I’ll probably keep exploring well after this review, which is a testament to the high level of talent on display and the superb polish that makes this game shine.

Title: Psychonauts 2

Release Date: August 25th, 2021

Developer: Double Fine Productions

Publisher: Xbox Game Studios

Platforms: PlayStation 4, PlayStation 5 (Backwards Compatible), Xbox Series X|S, Xbox One. Xbox Game Pass (Cloud, Console & PC). PC.

Recommendation: 100% recommended. An amazing modern adventure game boasting plenty of charm, a bit of darkness and wacky locations to explore. It keeps players entertained as they traverse through various minds to uncover mysteries surrounding the agency’s history, its enemies and Raz’s family dynamic. Essential playing as one of the best 3D platformers in the last couple generations.

Sources: Double Fine Productions Media Kit, Microsoft, Screenshots via Xbox Series X.

Disclaimer: Review code provided courtesy of Microsoft/Xbox for coverage ahead of launch.

-Dom

Hardware & Zelda Propel U.S. Games Industry Spending to Record High July

The domestic games industry is rolling with the excessive wave of warm weather hitting the States lately in that it’s heating up during these Summer months, as consumer spending in July 2021 reaching a record high for any July in history.

Industry tracking firm The NPD Group shared its latest U.S. monthly sales report this morning. In which, all signs point to continued momentum especially within hardware, even considering tight supply conditions limiting inventories in the market for next generation consoles from Sony and Microsoft. This and content spending increases notably for mobile, subscriptions and post-launch are likely bolstered by returning mandates hitting the country as variants of coronavirus spread.

Despite what a bad opinion piece from a major media outlet that I won’t link here might say, people are most certainly still enjoying games. And buying new devices on which to play them, for longer than ever.

Overall consumer spending across Content, Hardware and Accessories totaled nearly $4.6 billion in July. That’s a solid increase of 10% since this same time last year and a record amount for a July month across tracked history, dethroning last year’s $4.2 billion.

In terms of dollar sales, Content continues as the largest contributor though it was the only category of the three not to experience double-digit growth. Hardware gains proved resilient, nearly doubling year-on-year spend driven by another unit sales lead for Nintendo and PlayStation 5 continuing its historically quick start. Accessories wouldn’t be left out of the party as it actually set a July sales record of its own, influenced by a new product offering from Nintendo.

Software charts boasted two new games in the Top 3, both from storied franchises created by Japanese publishers Nintendo and Capcom. Activision Blizzard’s Call of Duty franchise had another month where two of its games ended up in the general Top 10. The real story there is how the American publisher should be called out for reports of its toxic workplace every time its games are mentioned now.

It’s time for the numbers behind an exceptional July for broad U.S. games industry spending.

United States Games Industry Sales (July 4th, 2021 – July 31st, 2021):

As I mentioned above, it was a record July month for overall monthly domestic spending on games at $4.6 billion. When expanding to 2021 as a whole, total video game sales rose 14% to $33.5 billion across the first seven months. Gaming is still the preeminent entertainment experience, especially as platform holders delve more into the subscription side appealing to folks with both traditional and on-the-go devices.

Within the largest sub-category of Content i.e. software etc, it was mobile, subscription and post-launch spending boosting sales during July to just under $4.1 billion. That’s a moderate 6% increase. Year-to-date Content currently totals $29.4 billion, moving up 12%.

The Switch Effect remains in full effect here on the overall monthly software chart. Nintendo’s hybrid platform claimed four of the Top 6 spots as console or outright exclusives, three of which are published by Nintendo and don’t even count the digital portion of their sales!

The Legend of Zelda: Skyward Sword HD took home top honors in July. I didn’t see much in the way of context here within the report, and I’d love to know how this remaster compares to the original game launching on Wii back in November 2011. All I can say is the first game debuted at #9, so I assume there’s a sizeable difference here. Will update if I hear anything.

Next at #2 is chart mainstay Call of Duty: Black Ops Cold War from Activision Blizzard, the American publisher that’s under a lawsuit because it reportedly doesn’t treat its employees well at all and fosters a “frat boy” workplace culture. The game’s latest season launched today, and I give props to every single employee working hard to keep up with its ongoing content roadmap amidst this difficult environment. Worth noting that 2019’s Call of Duty: Modern Warfare is back in the Top 10 this past month, at the ninth spot.

Capcom’s Monster Hunter Stories 2: Wings of Ruin landed third on the total rankings. The Switch title that’s also available on PC already generated triple the *lifetime* sales of the original Monster Hunter Stories 2017 release on Nintendo 3DS. Wow. NPD Group Analyst Mat Piscatella called this biggest surprise of the month, and can’t argue there. Monster Hunter as a whole gained a more global appeal since Monster Hunter: World in 2018, seemingly now to the point where even console exclusive spin-offs are gaining heavy traction.

Moving down the list, I have to point out Mario Kart 8 and MLB The Show 21. First off, who keeps buying Mario Kart? Well it’s probably anyone purchasing a Switch, right. Which is plenty of people right now. I’ve pushed back my expectations for a Mario Kart 9 every time I see it achieve a Top 5 month or reach a new milestone on global sales, which are now at over 37 million units.

Then there’s MLB The Show 21 at #7 in July, allowing it to set a new year-to-date sales record within the franchise. Not only that: Lifetime dollar sales of the game have already beat out last year’s entry to become the best ever for any MLB The Show game, a series which dates back to 2006. This is only its fourth month on sale! The multi-platform move and Xbox Game Pass decision by Major League Baseball made this game a mega hit.

The last of the new releases within the Top 20 was Neo: The World Ends With You debuting at #16. Launch month dollar sales of the Square Enix-published release started at more than double that of The World Ends With You for Nintendo DS in July 2007.

Finally, Capcom also launched The Great Ace Attorney Chronicles in July, a compilation of adventure games within the Ace Attorney series which started at the 22nd spot on the total chart.

Here’s a full look at two of the main software lists, first for the month then the year as a whole as of July.

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

  1. The Legend of Zelda: Skyward Sword HD*
  2. Call of Duty: Black Ops Cold War
  3. Monster Hunter Stories 2: Wings of Ruin
  4. Mario Kart 8*
  5. Minecraft
  6. Mario Golf: Super Rush*
  7. MLB The Show 21^
  8. Marvel’s Spider-Man: Miles Morales
  9. Call of Duty: Modern Warfare 2019
  10. Super Smash Bros. Ultimate*
  11. Ratchet & Clank: Rift Apart
  12. Animal Crossing: New Horizons*
  13. Tony Hawk’s Pro Skater 1+2
  14. Super Mario 3D World + Bowser’s Fury*
  15. Mortal Kombat 11
  16. Neo: The World Ends With You
  17. The Legend of Zelda: Breath of the Wild*
  18. Pokémon Sword & Shield*
  19. Resident Evil: Village
  20. Assassin’s Creed: Valhalla

Top-Selling Games, 2021 To Date, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. Call of Duty: Black Ops Cold War
  2. MLB The Show 21^
  3. Resident Evil: Village
  4. Super Mario 3D World + Bowser’s Fury*
  5. Marvel’s Spider-Man: Miles Morales
  6. Monster Hunter: Rise
  7. Mario Kart 8*
  8. Minecraft
  9. Assassin’s Creed: Valhalla
  10. Animal Crossing: New Horizons*

Now, talk about explosive growth.

Hardware experienced the biggest increase of the three segments during July 2021 as sales nearly doubled year-on-year to $323 million. Up 98%, to be exact. It’s the best individual July month since upwards of $447 million back in 2008. Sounds like all three major competitors in Nintendo Switch, PlayStation 5 and Xbox Series X|S experienced increases naturally, just depends on how many boxes they can ship honestly.

Switch maintained its staggering streak of now 32 consecutive months atop the console ranks in July as measured by units sold. It’s also the year’s top-seller, by both units and dollars. Those new software title launches plus evergreens like the aforementioned Mario Kart continue to attract, and I’m very curious to see demand impact for the OLED model that hits market in October.

However, PlayStation 5 led console spending by dollar sales in July implying a higher average selling price and consistent retail demand for its supply-constrained platform. Sony’s latest generation box is still the fastest-selling home console as measured by dollar sales during its first 9 months on market. For now. It’s worth noting that next month will be the 10th for PlayStation 5, which corresponds to Switch’s first December. Even with demand as strong as it is, I don’t know if Sony can keep this streak alive given this timing and external sources limiting output.

On the Xbox side, the report didn’t shed too much light. Piscatella noted that Xbox console sales are “significantly higher” than one year back, albeit that was very late in the Xbox One life cycle.

For 2021 in aggregate, spending on Hardware jumped 50% to $2.7 billion. That’s again the best growth in the tracked sub-categories of Content, Hardware and Accessories. As we’ve seen all year, Nintendo’s Switch console is 2021’s best-selling so far. This time measured by both units and dollars. While not a shocking result, it’s certainly noteworthy for a platform starting off its fourth year on sale versus others in their early stages.

It’s time to accessorize, as July 2021 proved to be a historic month for Accessories as well.

Not to be outdone by its counterparts, spending on Accessories just set a new July record. Last year, July 2020 dollar spend was around $170 million. This year, July sales reached its brand new all-time high of $189 million.

And yes, there’s a theme. The Legend of Zelda: Skyward Sword HD Edition Joy Con debuted as the month’s top-selling accessory, no surprise really. So Nintendo’s latest launch in the Zelda franchise, even as a remaster, was responsible for the month’s best-selling game plus top accessory.

The white version of PlayStation 5’s DualSense Wireless Controller still holds the crown for now as 2021’s best-seller, driving category spending over the year so far to $1.4 billion. That’s 13% higher than the same period in 2020, almost mirroring Content spending growth.

Viewing July’s trend-lines in terms of growth within domestic games spending shows that ever since declines in the months prior to April 2021, monthly spending is now back on the rise. A July record nearly solidifies it. Spending across the industry right now reveals a blend of new audience members plus ongoing spending from casual and core players.

New software releases are helping of course, as is supply for new generation platforms. There’s consistency in both mobile and ongoing spending on the content side, and companies are selling-thru to consumers as many pieces of hardware that suppliers can push out.

It’s also the accretive nature of those people trying gaming for the first time or returning that’s defining this time over a year into the pandemic. Combined with an enthusiast audience still gobbling up Nintendo games plus pumping demand for PlayStation and Xbox, I’m not surprised by ongoing growth.

August marks what I like to consider the first major commercial push of the back half, marked by the launch of perennial seller Madden NFL from Electronic Arts. This year’s Madden NFL 2022 football franchise release kicks off on August 20th. Fully expect it to be the best-seller. August also has a couple notable updates to existing titles in Marvel’s Avengers: War for Wakanda expansion on August 17th plus August 20th’s Ghost of Tsushima Directors Cut. Even with Nintendo bereft of a major first party title and chip shortages ongoing, I’m leaning bullish on the month.

Thanks for reading, be safe and see you next time!

*Digital Sales Not Included, ^Xbox Digital Sales Not Included

Comparisons are year-over-year unless otherwise noted.

Sources: Alvaro Reyes (Photo Credit), Bloomberg, The NPD Group, Reuters (Photo Credit).

-Dom

Nintendo Reports Second Best First Quarter Results Since 2009

The last of the three major gaming console manufacturers to report this season is Nintendo, as it enters a new fiscal year starting this April to June.

And it was a very good one, as has been the trend for the company lately in this latest generation. Even if not quite as good as its ridiculously impressive highs during last year’s corresponding period.

The Japanese hardware designer and software developer reported first quarter net sales around $2.91 billion, 10% lower than last year’s Q1. Operating profit reached $1.08 billion, a decline of around 17% leading to a lower margin as well.

Sure, both of these are technically down. Expanding to a historical context shows it’s actually exceptional performance in the scheme of things. Other than the unprecedented time last year, it’s Nintendo’s best first financial quarter in just over a decade. Operating income in particular effectively matches the level of fiscal 2009 Q1. Nintendo is proving resilient, especially on the hardware side, as Switch sales are translating to software performance for both new and catalog titles.

When it comes to Switch hardware it remains, quite simply, on fire. The console sold-in 4.45 million Switch units in Q1, a dip of roughly 22% year-on-year though twice as much as the same period in fiscal 2020. Lifetime shipments of the hybrid console now total 89.04 million. This means it’s past yet another milestone in the industry, moving past the 87.4 million at last count for Sony’s PlayStation 3 since its launch back in 2006.

Lately Nintendo has also reported sell-through to consumers, which represents actual ownership in households. As of June, Switch family sell-thru hit 85 million consoles. This is up from 81 million in the quarter ending March 2021. That means upwards of 96% of all shipments have been purchased at retail to date.

The most attractive part of owning Nintendo’s hardware is, of course, to play games that aren’t available anywhere else. Nintendo reported both overall sales movement plus shipments for three main first party releases during the quarter. New Pokémon Snap, a spin-off in the series that’s all about photographing the famed pocket monsters, reached 2.07 million after launching in late April. (Note: This does not include sales from Japan, where it’s published by The Pokémon Company.) In comparison, its 1999 predecessor Pokémon Snap hit 1.5 million units by the end of its first year on sale and is estimated at 3.63 million lifetime.

Separately, the latest sports entry Mario Golf: Super Rush released on June 25th so it had less than a week on market by the end of this reporting period. Shipments over that time hit 1.34 million copies. Going way back, the original Mario Golf on Nintendo 64 is estimated at 1.47 million during its entire product life. Basically, Mario Golf: Super Rush is estimated to already be the second-best seller in franchise history. It’s a lower result for a mainline Mario game, though notably great within this particular spin-off series. That’s the power of the Switch right now, with the caveat that it’s difficult to track exact sales for older titles.

The last new launch of the first quarter was the role-playing game Miitopia on May 21st. The remastered version of the 2017 3DS game of the same name barely crossed the million mark, reaching 1.04 million. This is almost as much as the original scored during its first three years at 1.18 million, another rough estimate of course.

I’ll note that there was no word on June’s Game Builder Garage game creation software. Since it didn’t make the million seller list, have to assume it’s currently below that milestone.

Now, read on below for much more analysis behind the numbers plus forecasts going forward. It’s totally worth it. I wouldn’t lie to you. Plus, who doesn’t love charts!

Whew. I know it’s a lot of data. Let’s break it down.

First, broadening the time frame helps put the aforementioned $2.91 billion in net sales and $1.08 billion profit from operations during Q1 into perspective. Taking a peek at the quarterly revenue chart, this illustrates how it’s the second best 1st quarter since the $3.82 billion generated in April to June in 2008. Around the height of the Nintendo Wii’s popularity, a common trend we’ve seen before the darker days of the Wii U era starting in 2012.

Expanding the revenue chart using trailing 12-months smooths out performance and exhibits a familiar sort of trajectory. That’s $15.56 billion in aggregate sales during the last four quarters. This particular figure hasn’t been above $15 billion during a first quarter for Nintendo since fiscal 2010.

Flipping to profitability, it’s even more impressive how Nintendo is managing costs lately. Quarterly operating profit is nearly the best it’s been in a decade. Other than last year’s peak during the pandemic, the last time operating income reached $1 billion in a Q1 period was that Wii era of fiscal 2009. Trailing 12-month profit hit $5.56 billion or so during June, and this time that’s the best first quarter since the same time during 2009.

On regional splits, the Americas hit nearly 44% of overall dollars sales for Nintendo. Europe up next at 24%, then Japan around 22%. Which means the proportion of sales outside of Japan is upwards of 78%. This is a notable shift towards the Americas, which itself made up 38% last year.

For a quick quarterly comparison amongst its peers, Nintendo had the lowest revenue during Q1 under that $3 billion mark yet is more profitable than its Japanese counterpart in Sony. The PlayStation brand achieved $5.62 billion in revenue while Microsoft generated $3.74 billion. Still, Sony’s gaming profit of $760 million is notably lower than Nintendo’s. Which makes sense, since Sony is starting off a new console cycle with the PlayStation 5 while Switch is further along, has lower marketing spend and production costs.

Underlying this latest success is Switch hardware momentum, however what in particular is driving it? It’s actually the base model’s popularity.

Out of the 4.45 million consoles shipped during Q1, a figure down 22% as I noted earlier, 3.31 million were that standard edition. This is notable because it’s actually above the high comparable period last year when this figure was 3.05 million. Worth mentioning this model was more supply-constrained back then, according to comments from executives. Switch Lite is behind the overall decline, dipping to 1.14 million from 2.62 million. That’s a serious 57% drop, no doubt impacted by many portable buyers last year attracted to Animal Crossing: New Horizons on the go.

Even more than four years after its launch, Switch hardware sales are still just as much dictated by supply because audience demand is consistent.

Oh. Here’s a pretty wild stat I thought would be fun. Nintendo is, of course, the top-selling hardware manufacturer ever globally. It passed an absolutely wild margin this past quarter: 800 million console units sold since debuting the Nintendo Entertainment System (NES) in 1983. This of course includes handhelds, otherwise Sony’s PlayStation brand would be outpacing when using home consoles only. It’s still a fun big fact after this latest success!

Diving into updated software sales, Nintendo said 45.29 million copies sold on Switch during Q1 as compared to 50.43 million last year. Around a 10% decline, primarily due to the overwhelming success of the new mainline Animal Crossing a year ago.

Nintendo shared that nine games sold a million or more copies on Switch during April to June alone, seven of them first party exclusives. That overall figure is the same number as this time last year.

Apparently everyone can’t stop buying Mario Kart 8 Deluxe as it remains the top-selling Switch game ever, moving up almost 1.7 million to 37.08 million units lifetime. It’s like Nintendo’s Grand Theft Auto, except without the theft part. Animal Crossing: New Horizons retained the second spot, reaching 33.89 million units after selling 1.26 million in the quarter. Rounding out the Top 3 is still Super Smash Bros. Ultimate at 24.77 million to date after moving just under a million in Q1.

One major mover on the legacy side has been Ring Fit Adventure, originally out in October 2019. Last quarter, it joined the 10 million sold club. It has since moved 1.15 million more, pushing up to the 10th spot on Nintendo’s Switch best-sellers list at 11.26 million units. People are certainly exercising their right to spend!

Nintendo doesn’t often share much on the third-party side. Management noted that “sales of titles from other software publishers continued to grow steadily” without much context. Based on anecdotes around the industry, there’s certainly a Switch effect especially for independent publishers.

What about digital contribution, an area where Nintendo has lagged the broader industry? Well, it’s down 25% to $685 million, equating to roughly 24% of total quarterly dollar sales. Nintendo’s proportion of digital sales on the software side was 47% in Q1, meaning just under half of total dedicated platform software units were downloaded. Compare this to 56% last year, a somewhat inflated figure by retail store closures, buy-at-home convenience plus Animal Crossing: New Horizons skewing results.

“Although sales declined for downloadable versions of packaged software on Nintendo Switch, sales remained steady for download-only software, including indie titles,” said the leadership team. “In addition, Nintendo Switch Online sales also increased.” Though the company didn’t share any more specifics on the Nintendo Switch Online service. The last paid subscriber count was 26 million around September 2020.

Taking a look ahead, Nintendo reiterated its forecast for the current year when it comes to financial performance, consoles sold and software units. As often happens during its first quarter, especially as this management team leans towards a conservative nature.

During fiscal 2022, net annual sales are still expected to be $14.4 billion while operating profit will be at $4.5 billion. These would be down 9% and 22% respectively, yet still a major result looking back many years. Switch hardware guidance is flat at 25.5 million for the year, implying that Nintendo needs to ship just over 21 million more during the next three quarters.

So where would that put Switch lifetime compared to other consoles? Well, Nintendo Wii is next up. There’s a notable gap right now, the Switch’s 89 million compared to nearly 102 million for Wii. If Nintendo hits this year’s forecast, it will clear that milestone easily by the holiday quarter. And I fully expect that to happen, boosted by easing supply considerations plus the Nintendo Switch OLED Model iteration. In fact, I believe Nintendo’s hardware guidance is conservative and expect executives to move it up next quarter. I’ll stick to my 28 to 29 million estimate for the year ending March 2022, which I established a few months back.

Nintendo currently expects to ship 190 million software units on Switch this year, down from 231 million in the year ending March 2021. Again, that will be beat. Software slate in the near-term is a bit light, driven by last month’s The Legend of Zelda: Skyward Sword HD then WarioWare: Get it Together! in September. Then fan favorite Metroid Dread and party game compilation Mario Party Superstars are scheduled to kick off the holiday quarter in October plus two Pokémon remakes in Brilliant Diamond and Shining Pearl will bolster the schedule in November.

The company lists Splatoon 3 and the sequel to The Legend of Zelda: Breath of the Wild for calendar 2022, one of which could be January to March. Well, probably not Zelda if I’m being honest.

Regardless, it’s going to be another quite incredible year for the company’s bottom line and console sales in particular, unless some sort of unforeseen disruption hits on the production side. Even without the existence of that “Switch Pro XL” model, a rumor that’s been going on for what feels like years now. Maybe the “insiders” will be right eventually. Me? Catch me here, looking at the numbers.

Thanks as always for reading and be safe everyone!

Note: Comparisons are year-over-year unless otherwise mentioned. Exchange rate is based on reported conversion: US $1 to ¥ 110.74.

Sources: Aishah Mulkey (Photo Credit), Celene on ResetERA, Microsoft Corp, Nintendo Co Ltd, Sony Corp.

-Dom

Sony Reports Biggest First Quarter Ever for PlayStation Revenue

The latest gaming manufacturer to report earnings is Sony Corp, this time sharing fiscal 2021 first quarter results. During which the Japanese company revealed its PlayStation division recorded its highest first quarter sales ever even as PlayStation 5 shipments slightly lag its predecessor. Though sell-through to consumers for this latest generation of hardware is still going at a faster pace, driving gaming segment results for the consumer tech conglomerate.

This is the first full quarter that’s compared against highs set during the height of stay-at-home requirements, so the impact of a global pandemic on gaming and consumer spending is coming into focus. A record Q1 for Sony’s gaming department shows that audience demand is resilient, especially on the console side, even if software spend is descending from a very tall peak.

Suffice to say, PlayStation is making history even considering supply challenges facing the industry alongside easing pandemic restrictions.

Sony’s Gaming & Network Services (G&NS) i.e. PlayStation brand revenue rose just under 2% to a Q1 record of $5.62 billion. Higher than even last year’s impressive result of $5.5 billion, this performance was mainly driven by PlayStation 5 demand and exchange rate changes despite lower 3rd party software and add-on content sub-categories.

Essentially for Sony at this stage three quarters into a new generation of gaming consoles, hardware is selling out though its audience spend on games is slowing.

On the profit side, G&NS segment quarterly operating income dropped 33% to roughly $760 million on higher costs associated with making and marketing a new console cycle. More so, that lower third-party software and add-on spending relative to last year. Still when taking a broader perspective, this is actually fantastic output. It’s the third best operating profit performance in a first quarter in the history of breaking out the gaming segment.

Speaking of PlayStation hardware sales, Sony shared updated shipment figures for both of its latest boxes. PlayStation 5 shipped 2.3 million units in the quarter ending June, bringing lifetime to 10.1 million. This is notable for a couple reasons. First, it’s about 500K lower than PlayStation 4 did in the same quarter during April to June 2014. So its pace of shipment is slowing compared to its predecessor, no doubt impacted by a global chip shortage that’s adversely affecting everything from automobile to graphics processor output.

However, shipments can’t tell the whole story when there’s more information available. Sony Interactive Entertainment said recently PlayStation 5 sell-thru to its audience hit the 10 million milestone as of July 18th. That’s 3 weeks faster than PlayStation 4 took to reach that same amount. Which means the number of PlayStation 5 consoles getting to consumers (or perhaps scalpers, I know) at this stage in the cycle is higher than any other in the brand’s history.

There’s also the underlying profitability dynamics for these PlayStation 5’s moving through to households. According to executives on the earnings call, its standard disc edition is actually now profitable per unit after the tradition of being sold at a loss during initial quarters. I’ll note the version without a disc drive is not yet breaking even.

As expected this late in the PlayStation 4 life cycle, quarterly shipments dipped below the million unit mark for the first time since launch back in November 2013. This brings its lifetime mark to roughly 116.5 million. I expect this slowing to continue, and wouldn’t be surprised if Sony’s reporting tops out around the 120 million mark.

Well then. It’s time to get into the nitty gritty for a bit, then end with forecasts and predictions!

The above gallery above shows relevant slides and a handful of charts I compiled to illustrate where the PlayStation division is starting out this new fiscal year. I know it’s a lot of data. But it’s goods stuff, I swear!

Expanding broadly, Sony overall saw sales rise 15% in Q1 to $20.6 billion. Growth in both Electronics Products & Solutions (EP&S) plus its Music category outpaced all other categories, although gaming is still the main contributor from a dollar (or really yen) standpoint.

Quarterly operating profit for the company topped $2.56 billion, up 26%. Driven by that same EP&S category, dragged down by higher expenses within PlayStation.

I mentioned the record quarterly sales and lowering operating profit for G&NS before, so let’s see how these compare when expanding over time to smooth out the results. This helps put quarterly performance into context.

When looking at trailing 12-month gaming revenue accounting for this latest quarter, it’s again at another record high of $24.35 billion. That trend-line is impressive, no doubt bolstered by people trying to get their hands on the coveted new console. Trailing annual operating profit hit $2.75 billion, with the dip in the latest time period. Still, it’s higher than this same time last year. As the company gets more efficient in making PlayStation 5’s plus sees component costs potentially lower, I expect it to bounce back again.

You’ll also see a chart above drilling into category sales results within gaming. Of course, Hardware is the biggest gainer as it’s more than double the amount last year for obvious reasons. Consistent with earlier comments, both Physical and Digital Software decreased in the double-digits as did Add-On Content. Sony attributed that to 3rd party declines. Network Services is proving resilient, moving up compared to last year. The final category Others encompasses peripherals, PlayStation VR and first-party software on non-PlayStation platforms almost doubled, I imagine boosted by DualSense game pad demand.

On the software and engagement side, Sony shared new figures for game sales, PlayStation Plus subscriptions plus Monthly Active Users (MAUs) in its supplementary filing, the last of which is the estimated number of unique accounts that uses PlayStation Network during June 2021.

Full-game software sales totaled 63.6 million across PlayStation 5 and PlayStation 4 during the quarter, substantially lower than the 91.4 million during Q1 last year. Within this, 10.5 million were first party exclusives, down from 18.7 million.

Thing is, this is more a reversion to the average than a decline. There’s also how last year saw the massive launch of The Last of Us Part II. Executives said every new release during April to June 2021 exceeding internal expectations. Ratchet & Clank: Rift Apart is at 1.1 million units since June 11th. MLB The Show 21 hit market on April 16th and has since sold 2 million units while attracting 4 million players, certainly benefiting from a simultaneous Xbox Game Pass launch. Returnal also released in April, reaching 560K copies in the interim.

There’s also a specific shout out to PC versions of Horizon Zero Dawn and Days Gone as Sony opens up its legacy first-party catalog to a brand new audience.

Paid PlayStation Plus subscriptions reached 46.3 million from an even 45 million last year, while MAUs were down to 104 million from 114 million. This movement shows a bit lower average engagement, though it looks like new console owners are signing up for the PlayStation Plus service that allows online multiplayer and provides access to certain games each month.

The leadership team provided a bit more color on these stats, saying that total gameplay time of PlayStation users declined 32% from the highs of quarantine impact. It’s up 18% compared to the same quarter of 2019 fiscal year, a more normalized period even if well into PlayStation 4’s lifetime.

Now, how does Sony’s $5.62 billion revenue and $760 million operating income quarter compare to recent results from peers in the industry? As I covered in my piece on Microsoft’s latest financial year last week, the Xbox division generated $3.74 billion in sales during the same time frame. And Microsoft unfortunately doesn’t report Xbox’s profit. Hardware was the driver again, though it’s clear that PlayStation is outpacing Xbox in that department early in this generation based on expert unit estimates and these dollar sales.

Separately for the other major Japanese games manufacturer in Nintendo, it reports first quarter results tomorrow. So we’ll have a better picture then. Last year during the height of stay-at-home, Nintendo generated roughly $3.27 billion in sales and $1.3 billion in operating profit, implying a much higher margin with Switch towards the middle of its life span so we’ll see where it lands this year.

Edit on August 5th: Nintendo’s Q1 revenue totaled $2.91 billion while operating income reached nearly $1.1 billion. Consistent with it being the more profitable of the two, at least right now.

Back to Sony and looking ahead, the company provided updated 2021 fiscal year forecasts for its overall and segment operations. Sales guidance remained unchanged for the company overall at $89 billion, though it did boost operating profit by 5% to upwards of $9 billion. Within gaming, it confirmed annual guidance of $26.5 billion in revenue and $3 billion in profit. The former would be a record and the latter I believe the second best in its history, revealing just how bullish the Sony team is on the modern PlayStation brand.

Leadership also reiterated that it still expects to ship 14.8 million PlayStation 5 consoles during the financial year ending March 2022, which would be the same as PlayStation 4. This implies lifetime PlayStation 5 consoles would be 22.6 million after its first six quarters, slightly outpacing the 22.4 million of PlayStation 4.

Broadly speaking on the topic of looking forward, there were slides and additional comments related to general strategy that stood out from management too, consistent with recent trends of company spending and approach.

“PlayStation Studios, which oversees our first-party software production on a global basis, is accelerating investment to strengthen its production capabilities” said the team. They cited the purchase of Housemarque in June then Nixxes in July, two notable acquisitions for the PlayStation portfolio in this quarter alone. This sort of investment activity this year is even more than I anticipated from Sony when I wrote about broader predictions back in January. I expect another announcement in the back half of this fiscal year, this time of Bluepoint Games based in Texas.

Backing this up, executives shared more about future potential. “Going forward, we intend to continue to proactively make strategic investments with the aim of developing new IP, supporting our multi-platform strategy, and strengthening our service offerings including through add-on content.”

What this all means to me is Sony remains supremely confident in the PlayStation business and how the PlayStation 5 will continue as the fastest-selling console in its history. I’m doubling down on my original estimate for this fiscal year of 15 million hardware shipments, which I established in last quarter’s piece.

On the financial side, I believe Sony will match or exceed its guidance. A record year is in sight for gaming revenue. It’s selling as many consoles as its suppliers can make, cost of general marketing will flatten and segments like network services will prop up if software doesn’t keep pace with last year’s explosive growth.

Major questions still swirl around supply of components and the global semiconductor environment, which has limited the number of new consoles these manufacturers can produce. Imagine if that weren’t the case! Record numbers could be even higher. Then, can new hardware sales translate into player engagement remaining near recent highs? There are audience members that either started playing or returned to games sticking around, the pie is growing. It just depends on how much.

If this quarter is any indication, Sony is certainly having its fair share of slices.

Thanks for reading everyone. Check back to my earnings calendar for more dates, and there will be even more coverage here and on social media in the coming days. Be safe!

Note: Comparisons are year-over-year unless otherwise mentioned. Exchange rate is based on the reported conversion: US $1 to ¥ 109.5.

Sources: Charles Sims (Photo Credit), Insomniac Games (Image Credit), Microsoft Corp, Nintendo Co Ltd, Sony Corp.

-Dom

It’s No Myth: The Forgotten City Will Be Remembered as Narrative Gold

Certain games transcend their genre, executing so well on a single vision that they cement a lasting legacy within the broader medium. Roman murder mystery The Forgotten City should be one such title, a masterclass in cause-and-effect storytelling, dialogue writing, time loop manipulation, artistic vision and rewarding player decision-making.

It’s a genius, hidden gem. Or more appropriately, a shiny piece of gold.

Developed by the aptly-named Modern Storyteller, a small team out of Australia, it has an intriguing backstory of its own. The title began as founder Nick Pearce’s mod for The Elder Scrolls V: Skyrim, a high quality quest-line in its own right that received a national Writers’ Guild award and attracted over 3 million downloads at the time.

Pearce and team have since crafted a full-blown release, the result being a crafty first-person narrative adventure driven by choice around themes of history, morality, mythology, philosophy and societal norms.

Right from the start, it’s enchanting and mysterious. The player character wakes up in present day along the River Tiber in Italy. Memory fuzzy, greeted solely by a non-playable character (NPC) at a campfire. This random woman hands you a flashlight, mentions nearby ruins then requests you search within for an explorer named Al Worth.

The Forgotten City is all about choice. The first is picking one of four “classes,” each with a bespoke attribute. Archaeologist is undoubtedly the strongest, a knowledgeable role that offers unique decision-making opportunities. Soldier has a gun, handy for brute force styles since weapons are banned in the city. Fugitive can move around more quickly while Amnesiac is heartier in cases of falling or taking damage.

It’s time to enter a rundown version of a long-lost underground civilization. There are no people, other than Roman statues encased in gold. Mostly just crumbled remains of deceased architecture. Al’s hanging corpse is dangling next to a letter in which he bemoans his time here, saying he relived the same day over and over until he went mad.

Then, like most good time travel stories, the handy wormhole appears. Yes, as a looping game, it’s certainly a popular trope in the space. Except here it’s one of the best implementations across the history of games. Shooting the player 2,000 years in the past, this is when things really picks up.

Its location is an exquisite underground Roman locale filled with a towering temple, arching aqueducts, various shops, downtrodden slums and murky caverns. Those familiar shimmering golden statues adorn the streets, marble columns dot the landscape, green vines snake up structures and gleaming villas stand tall in the blinding sunlight. Art direction is the real standout, successfully capturing an ancient backdrop straight out of history books.

Players are introduced to the general plot via character discussions upon entering this timeline. Local farmer Galerius introduces The Golden Rule, a single law dictating everyone’s existence here: If someone commits a crime, everyone dies. “The many shall suffer for the sins of the one.”

Leader and Magistrate Sentius then outlines the reason for the player’s visit. Someone is about to break this rule, which would quite literally devastate the community. He secretly explains how you got here: His reciting of a prayer to Proserpina, goddess of spring and renewal, created the wormhole. It has to be solved quickly. Resolving the crisis will create a time paradox to save the people here and leave the past behind for the player out of time.

Of course, deep down there’s a lot more to it. Suffice to say there’s important information hidden beneath the surface from a story standpoint plus physical locations with significant ramifications.

At its heart, The Forgotten City is a narrative puzzle game combined with robust lessons in history, mythology and philosophy. While there are light action sequences and environmental traversal elements, conversations are the true puzzles. The player must navigate relationships, deduce from clues, make key decisions then live or die with the consequences.

The fun part is how Modern Storyteller gets creative with the time mechanic towards this end, as the player retains inventory. Knowledge gleaned from prior visits carries over to future loops. Clues can be used to manipulate outcomes. It’s not forced, instead it feels organic which means it’s that much more rewarding.

The Forgotten City smartly eases the player into the world, learning tidbits from every dialogue choice then returning to characters to get even more after finding information elsewhere.

Narrative strength arises from well-written characters, intertwined relationships, events that trigger story beats plus mini-quests that tie back to the main campaign. There’s an important election taking place. The Magistrate’s daughter is missing. A local woman is poisoned, while a man wishes to commit suicide. There’s an armed intruder in the baths. A merchant is being harassed for his sexuality. One character is acting very strangely plus another is locked behind bars.

What caused these events? When did they happen, and can they be influenced? Which one of these will break The Golden Rule to trigger the god’s wrath? What counts as a sin in this older society that might not in modern times, or vice versa? These and more are the questions asked in The Forgotten City, and most times the player has a say in how they turn out.

It’s especially great how the setting and mystery setup allow for philosophizing on important topics like societal elements, general morality and who determines right versus wrong. It’s like a history lesson or mythology class. Except, unlike high school, learning here is disguised as fun because it supplements key narrative points. Learning what breaks The Golden Rule is as important as knowing how to walk a fine line around it.

Honestly, like any good media with philosophy as a theme, it presents as many questions as there are answers. There’s even a character that lives to debate who will help the player if they engage in spirited discussions on some of life’s biggest questions. Is there a way to judge people’s actions separate of the time and place in which they live? Are there sins that are always off limits? What about varying degrees of transgression, or cases of self-defense? The game presents questions around whether or not humanity is inherently good or evil to the core.

Around the mythological portions, Roman is the dominant variety of course. Yet there’s also a Greek and Egyptian character respectively, so each of these is represented. There’s discourse on how civilizations build on one another across history. Even though stories are adapted or names are changed, there’s a thru-line. What type of god imposes The Golden Rule? Can it be exposed for inherent contradictions, and will that help the player break the cycle? The Forgotten City decides these in its own way, especially for the most persistent of players.

While there are light action sequences and environmental traversal elements, conversations are the true puzzles. The player must navigate relationships, deduce from clues, make key decisions then live or die with the consequences.

In terms of structure, the handful of main quests are interconnected with side stories. Information from a mini-quest is often used towards achieving goals within the overarching narrative. Exploratory dialogue is recommended if not necessary. Figuring out the bigger picture. Finding common threads takes getting to know every character, their routine and underlying motivations. There are certain characters that help towards these ends. The aforementioned farmer Galerius can be sent on tasks. The kind hearted Vestal Priestess Equitia has a feeling about the true nature of this slightly off world, and asks the player to assist in uncovering its mystery.

Gameplay is standard first person walking, running or traversing when possible. There are times of light action, notably when equipped with a flashlight or bow. Thing is, the gameplay doesn’t have to be anything more than it already is. Simplicity works. It serves the overall concept well without being overly complicated. Very friendly to players of all skill or ability levels, accessible to many.

Exploration on foot is nearly always rewarded. Finding new information, written notes, spare denarii (money at the time) or environmental clues. Certain areas that might be accessed, either at that time or later in the game. There’s even zip-lines for added mobility! Perhaps not the most realistic world feature of that era, yet it helps with moving quickly when time is of the essence.

The minimal action elements revolve around the Golden Bow of Diana, which is more a means of movement than weapon as it can “gild” parts of surrounding areas, making them solid enough to support one’s weight. It’s the single item that drastically opens up a play-thru, offering access to areas only seen until that point. Like being able to scale a wall or walk on algae at the surface of water. Acquiring it requires witty decisions then a spectacular quest, the most action-heavy of all, taking place through an off limits part of the world. The feeling of freedom is breathtaking when returning to the open map, one of the best moments in a game full of memories.

On the weapon side, there are “enemies” in The Forgotten City. Nontraditional and sparse as they are. Like many things, they actually serve an important story purpose. Especially as it relates to one character. Shooting is pretty average. Using the reticle is essential. It gets the job done, albeit clumsily at times. There’s also a kicking mechanic during action sections that helps a bunch.

Now, nuance and creativity are the game’s major strengths. It first presents as a standard whodunit: Figure out who will commit the crime, report it and supposedly that’s all there is to it. Of course it isn’t, yet the way it reveals that and progresses its story is quite clever.

Certain games claim that choice matters when in practice outcomes are really limited. The Forgotten City is the real deal. Here, decisions are what determine everything. There are multiple ways to figure out its problems or traverse its world. Characters will refuse to talk if they are offended. Dialogue opens up if they are impressed. They even realize when people are playing them, turning on an instant. There’s differences depending on the order of events. People start to figure out what’s going on, like old Livia who speaks in code or former doctor Naevia in her locked away palace.

Within the pattern of speech, the game can even suggest lying. Certain circumstances benefit from it, even if playing a virtuous role because there are scoundrels that will take advantage of a passive player. Still, there’s always the downside that any single lie might cause one’s death thus forcing the god’s wrath.

There’s an ingenious hint system in the form of gossip via tavern owner Aurelia. Pay ten coin, hear rumblings within the community. This could trigger a new idea or reveal a side quest opportunity without even knowing it, rather than having to actively seek out discussions or written clues.

One significant downside of games relying on time loops is repetition. Can a developer make it so the player doesn’t have to do the same thing every time? Modern Storyteller offers a great solution. Right at the beginning of each loop, Galerius greets the player. For the sake of time, he can assist with completing tasks already figured out in previous loops. For instance, he’ll run to the local healer with the remedy for a certain affliction impacting a fellow resident. When there’s a time constraint, an NPC offering this kind of assistance is downright essential.

Speaking of that, the time loop system itself is flexible and inventive. There’s different ways to trigger it. Any crime committed, even by the player, will cause certain golden statues to come alive and wield arrows that take down the civilization. Separately, the default election result will automatically break The Golden Rule. Good news is the player can influence the outcome, thus extending a given cycle. What’s also nice is technically there’s no true failure state. The game even pops up a tip when trying to reload a save after making certain decisions, saying that it’s often beneficial to let things play out because of how the time loop operates. And I agree with that sentiment.

One subtle aspect that truly impressed was sound design. There are audio queues or dialogue hints when certain events happen around the map that help keep the timeline straight. A place of worship crumbles to the ground. A man leaps to his death. The god is angered by a sin, triggering a narrow escape to the wormhole to dive into the next loop. Characters talk with each other about random topics to the point where overhearing them can trigger a quest.

While often serious, there’s plenty of humor too. Sometimes dark, yet comedy nonetheless. Despite its ancient timeframe, the team sneaks in modern day trappings and language evolution which allows for creative jokes. Since the woman at the campfire is named Karen, there’s mention of memes. The player character can bring up surviving a pandemic in one chat. Having someone from the 21st century dropped into a situation like this allows writers to flex some really comical fourth-wall breaking.

The Forgotten City cleverly scatters breadcrumbs and leverages its cycle-based time mechanic to great effect, a masterful display of how words always have impact and characters will react, often strongly, to affectations.

Even the best of games like The Forgotten City aren’t without fault. Thing is, my main critiques are mostly at the fringes. General performance on current generation was steady at 60 frames-per-second as confirmed by tech analysis online, though it sounds like PlayStation 4 and Xbox One consoles have inconsistencies in this department. It can hitch slightly for a second or two when loading between areas, even on Xbox Series X (and I assume PlayStation 5, haven’t tested). Artwork carries its look more than anything else in the visual department.

Like many games from smaller studios, unfortunately there are limited options in the settings menu. On the video side, there’s motion blur, gamma and thankfully field-of-view. No option for performance versus resolution, which is becoming more popular these days and I bet would be welcome on last generation consoles in particular.

It needs more accessibility features, period. Subtitles, text size and language changes are really the only in this category. Controller bindings are locked which means there’s no game pad button mapping options. It feels like an adventure game fit into the first-person controls, with odd bindings like jump as B and inventory on Y on an Xbox pad. Even having a couple different control setups would be fine. Full customization is preferred.

Animations can be jerky, especially when say chatting with a character or climbing up vines. Aiming the bow is flimsy, kind of expected for a title that isn’t focused on mechanical prowess. There’s a minimal bug that prevents equipping items without opening the inventory or menu, a minor annoyance especially during one of its sparse action sequences.

The city itself is a small enough area once learned that not having a map isn’t a major concern, though I could see some players asking for one. More importantly I wish it had better quest marker implementation. Maybe allow the player to set beacons or waypoints to remind of important action items. Highlighting a quest will sometimes place a static waypoint, it’s just not very flexible. Like I said, not major complaints.

With a lean towards choices and a variety of ways to figure out its biggest mysteries, all efforts in Modern Storyteller’s project lead to one of four different endings. The biggest of which is a true “canon” outcome, which happens after an intense finale amidst staggering revelations. There’s a major payoff to all the investigating and decision-making, culminating in an exceptional epilogue. The true nature of this underground locale pays off, and is wholly believable.

I love when games make the player feel smart, it’s one of the most satisfying parts of a well-made experience. Like they are clever enough to make sense of jumbled clues, misdirection and hidden intent. Especially when it comes to uncovering truths in a foreign setting. The Forgotten City cleverly scatters breadcrumbs and leverages its cycle-based time mechanic to great effect, a masterful display of how words always have impact and characters will react, often strongly, to affectations.
Authenticity and intent matters in these circumstances.

Emblematic of how rewarding it can be are the multiple times I thought a conversation was going nowhere so I stepped aside to search around or chat with other inhabitants then returned only to determine exactly what I needed to proceed where I wanted to go. It was up to me to break the cycle, to figure out what’s a sin under The Golden Rule and prevent people from being their own worst enemies.

An informal yet indicative measure of quality I’ll use is how many “wow” moments a game produces, especially narrative titles with more straightforward mechanics. The Forgotten City offered a few of those and then some, flooring me with its exquisite craft and impressing me with its constant ingenuity.

Title: The Forgotten City

Release Date: July 28th, 2021

Developer: Modern Storyteller

Publisher: Dear Villager

Platforms: PlayStation 4, PlayStation 5, Xbox Series X|S, Xbox One, PC. (Nintendo Switch in Q3 2021.)

Recommendation: Highly recommended, even for those that aren’t history buffs, mythology aficionados or narrative game lovers. Especially so for folks that are. Everyone should play it, as soon as possible. It’s truly gold.

Sources: Dear Villager, Screenshots from Xbox Series X.

-Dom

Microsoft’s Xbox Division Sets New Annual Sales Record in 2021

During Microsoft’s fiscal fourth quarter results presentation yesterday for the period ending June 2021, the massive American technology conglomerate shared how its gaming division is faring amidst the global pandemic and early in this latest console cycle. This presentation revealed how the Xbox team achieved a handful of impressive records.

First, Microsoft’s gaming revenue for the trailing 12-month period back from Q4 is its highest in reported history. The Xbox division generated nearly $15.4 billion in annual sales. That’s 33% higher than the same 12-month period this time last year, when it was almost $11.6 billion.

That makes this the second quarter in a row that annual gaming sales were above the $15 billion threshold for Microsoft, showcasing how both hardware momentum and subscription expansion are boosting results even as third-party software contributions slow from highs in 2020.

In terms of the new generation of Xbox Series X|S platforms that launched late last year, Chief Executive Officer (CEO) Satya Nadella said on the earnings conference call they are the fastest-selling boxes in the 20-year history of the Xbox brand. These have “more consoles sold life-to-date than any previous generation” according to Nadella. This led to Xbox Hardware growth of 172% during Q4, with the caveat being of course this compares to a low point at the end of a prior generation.

Which is notable especially in terms of the current hardware supply environment for all manufacturers. Xbox is selling every single box its suppliers can make, as consumer interest far exceeds production capabilities right now. I anticipate this will continue for the foreseeable future, at least through the next fiscal year ending in mid-2022.

Parallel to the hardware performance is that of gaming software and related services, represented by the Xbox Content & Services sub-segment. This is the one notable lackluster portion of the report, with a fourth quarter decline of 4%. Increases in Xbox Game Pass and first-party releases couldn’t outpace declines in third-party.

Speaking of the Xbox Game Pass service, unfortunately Microsoft executives didn’t share updated figures for its paid subscriber base. Last count it was officially 18 million as of 2020 year-end, though more recent media reports have estimated the figure at upwards of 23 million as of April. My current estimate is 25 million, though I imagine Microsoft would share that milestone so it might be just below it for now.

Knowing these records and high level performance, I’ll now dig a bit into underlying numbers and executive comments.

If you pop open these gallery images above, you’ll see a.. number of insights.

First, the annual revenue figures for Xbox based on reported growth. Overall, gaming revenue for Microsoft rose 11% in Q4 bolstered by a major contribution from hardware and subscriptions. Based on historical sales figures, this equates to roughly $3.74 billion in quarterly revenue. That’s the highest sales ever for Xbox during a fiscal fourth quarter i.e. April to June.

Aggregating this quarterly figure into annual results and you’ll see the trend line for 12-month revenue is at that record $15.4 billion level. Even if slowing its growth trajectory, there’s no denying Microsoft’s combination of hardware launch and ecosystem play are at least pumping up Xbox’s top-line.

One note. Technically the quarterly result for gaming revenue is currently an estimate based on growth figures reported in Microsoft’s earnings slides. The company hasn’t formally filed its 10K with the Securities & Exchange Commission (SEC) where it reveals exact gaming revenue figures. It should be very close.

(Update: Microsoft posted its annual filing on July 29th. 12-month gaming revenue reached $15.37 billion, essentially spot-on.)

For context here, how does this compare to peers in the industry?

Well, since I know you checked out my July to August 2021 earnings calendar, you’ll see both Sony and Nintendo report their respective first quarter results next week. So using recent annual figures from March 2021, Sony’s Gaming & Network Services segment reached over $24 billion while Nintendo’s overall sales totaled roughly $12 billion at the time. Essentially, Microsoft sits between the two other hardware manufacturers. And all of them are doing very well lately.

Unlike its competitors, Microsoft doesn’t reveal profit metrics for its Xbox segment. That doesn’t mean we can’t infer from what it does share. Might get technical here, bear with me. The broader More Personal Computing business unit, of which Xbox is a part, saw operating income of $4.87 billion in Q4, up from $4.09 billion. However, gross margin percentage declined 1% since last year due to a shift to gaming. Margin as a metric basically accounts for expenses deducted from total sales.

Now there’s a variety of factors impacting profitability within this segment. Suffice to say that a slight dip in margin percentage caused by this shift means gaming was a bit less profitable than others here which are Windows, Devices and Search Advertising. It’s impossible to back into exact numbers, unfortunately.

Xbox is selling every single box its suppliers can make, as consumer interest far exceeds production capabilities right now. I anticipate this will continue for the foreseeable future, at least through the next fiscal year ending in mid-2022.

When it came to growth during Microsoft’s latest Q4, Xbox Series X|S hardware was certainly the star.

The aforementioned 172% growth for Xbox Hardware is the result of simply high demand meeting limited supply. It’s effectively the best it can be right now, as Xbox consoles are consistently selling out.

With Xbox Series X|S being the fastest-selling in the company’s history, how does that translate to unit sales? Well, we don’t exactly know formally because Microsoft stopped sharing these a while back.

Still, there are estimates out there. Friend of the site and analyst at Niko Partners Daniel Ahmad attempts to estimate units shipped for Xbox Series X|S at roughly 6.5 million since November 2020. Aligned with Nadella’s comments, this figure would outpace the prior record holder of Xbox 360 at 5.7 million starting in 2005 plus 2013’s Xbox One with roughly 5 million shipments across the same 6-month span.

Which makes sense, especially given recent performance in its largest market of the United States. The Xbox platform had its best June month ever according to The NPD Group, as I wrote about recently. Definitely check out that piece to see more specifics.

The other sub-segment within gaming is Xbox Content & Services, which saw somehwat mixed results during the fourth quarter.

Revenue here was 4% lower than this time last year, mainly because of software published by third parties available on the Microsoft store or retailers. This makes sense because the prior four quarters all experienced growth above 30%. It was bound to revert from those prior peaks.

Amidst this decline, executive comments still indicate expansion in services and player interest in particular. Chief Financial Officer (CFO) Amy Hood noted the team saw “strong engagement across the platform” during Q4.

The management team said Xbox Game Pass is “growing rapidly” while referencing certain statistics, similar to those we’ve heard in the past about how subscribers play and spend more than their non-member counterparts.

There was specific mention of cloud gaming this time, a service that Xbox has embedded within its top-tier Xbox Game Pass Ultimate and expanded to more countries in recent months. While not specific, Microsoft said that “millions” are streaming to their various devices.

What this mix of results and comments around Xbox Content & Services tells me is that last year was really fantastic during the height of pandemic quarantine orders, the audience base is still there yet spending less than that time especially on software. Subscriptions are propping it up, which is exactly what the team wants from pushing ecosystem and its robust Xbox Game Pass library.

Growth could slow a bit near-term for the Xbox division. I do think the baseline has been reset by newer audience members plus lapsed gamers sticking around and spending lately, which will help comparing growth against those high points last year.

Taking a step back to the company overall, Microsoft posts some staggering results in the scheme of things. Over $46 billion in fourth quarter revenue, an increase of 21% and well ahead of analyst estimate of $44.2 billion. Operating profit of $19.1 billion is 42% higher than this time in 2020, leading to an earnings-per-share figure above consensus as well.

Then what’s next after this record year for Xbox? Beyond healthy guidance for the firm overall, gaming is expected to grow into the first quarter of fiscal 2022.

“We expect revenue growth in the low double-digits,” said Hood in reference to gaming. “Console growth will again be constrained by supply. And on a strong prior year comparable, Xbox content and services revenue should grow low single digits.”

I can see that, consistent with its release schedule and hardware inventory limitations. There’s no flagship first party launches until Halo Infinite, and even that has a nebulous holiday release at present. There’s higher profile third party multi-platforms like Madden NFL 2022 from Electronic Arts in August and NBA 2K22 in September, which will contribute on the content side. There’s also a slew of new versions, smaller or indie titles in the coming months. The Ascent. 12 Minutes. Psychonauts 2. Hades and Microsoft Flight Simulator on console.

It might be tricky for Xbox to match the sales highs of the last 12 months, given the previous global stay-at-home situations and leading into a new console generation. Growth could slow a bit near-term for the Xbox division. I do think the baseline has been reset by newer audience members plus lapsed gamers sticking around and spending lately, which will help comparing growth against those high points last year.

Xbox Hardware will be strong, even if supply increases at a slower rate than originally anticipated. I believe subscriptions will keep pace, though am tapering expectations on content and software spend until the quarter ending December.

All in all it’s big results for 2021, like we’re seeing most places in the games industry. The question becomes where will it go from here.

Feel free to reach out here in the comments or on social media with your reactions or questions. Thanks for visiting!

Sources: Microsoft Investor Relations, The NPD Group, Wu Yi (Photo Credit).

-Dom

Earnings Calendar Jul & Aug 2021: Gaming, Media & Tech Companies

It’s the first month in the back half of 2021. Which means the days are scorching here in the Northern hemisphere, the Olympics have started up and, naturally the most importantly of all, earnings season is kicking off!

I know it’s been another challenging year for many. Adjusting to a world where certain governments are opening up economies while others are reverting back to lock-downs under threat of new coronavirus variants. It’s still not ideal to travel or see family members. So I hope my coverage of gaming, media and technology companies here and on social media can be a much-needed distraction while also being informative.

And it’s been a busy one in these sectors. Consolidation, regulation, streaming, work-from-home, automation, extremely important discussions on workplace culture and other macro trends are all impacting these businesses this year. Especially in the games industry, which has seen its audience base grow over the past year and continues to grow rather than stagnating.

As usual, my handy calendar will keep everyone organized during a busy season of numbers, graphs and business chatter. It’s slowly approaching a hundred companies, and you’ll notice a brand new feature this time around: a field showing which fiscal quarter is being reported!

I figured that would help, as companies have different financial calendars so it’s easy to lose track of when the year ends. Let me know what you think, and if it was a good idea.

So save down the above image above for safe keeping, use the link below to a Google Doc with all this information for easy access to investors site then check further down for three companies on my radar in July and August. Thanks for hanging out, be safe all!

Working Casual Earnings Calendar Jul & Aug 2021: Gaming, Media & Tech Companies

Microsoft Corporation: FY 2021 Q4, Tuesday, July 27th.

After a rousing showing during the Electronic Entertainment Experience (E3) and a record-breaking June 2021 in the domestic hardware market, Microsoft and Xbox are back reporting full fiscal year results shortly. Overall Microsoft is a juggernaut in both cloud and enterprise software, so I expect beats all around. When it comes to gaming revenue specifically, it should see double-digit annual growth and eclipse $15 billion in sales. I’m also hoping to hear from CEO Satya Nadella on updated Xbox Game Pass subscriptions. At last count, the company itself said this figure was 18 million way back around December 2020. Although media reports have pegged it upwards of 22 million as recently as April. I think there could be 25 million or more paying subs right now, driving the division’s ecosystem play and steady hardware results for the tech conglomerate.

Activision Blizzard, Inc: FY 2021 Q2, Tuesday, August 3rd.

Honestly, I didn’t want to list Activision Blizzard here. I’m not sure I’ll even cover the company this quarter. Its financials interest me a whole lot less when its executives and leadership team have been in the news for all the wrong reasons lately, and it’s quite sickening. The State of California’s Department of Fair Employment and Housing is suing the company after a multi-year long investigation into harassment, mistreatment, abuse and even assault of women and minority staff members at the American publisher. Leaked internal emails have shown mixed messages from management, including a tone deaf note from Executive VP of Corporate Affairs Fran Townsend claiming the lawsuit “presented a distorted and untrue picture of our company.” Over 2,000 brave employees have signed a petition against leadership’s responses and many Blizzard folks are staging a walkout this week. Analysts and investors need to press the top brass on what they intend to do to change the company’s “boys club” culture. Perhaps even call for resignations. Sales growth and profit margins don’t mean anything if people aren’t safe and supported in their careers.

CD Projekt SA: FY 2021 Q2, Thursday, August 26th.

Another company that has occupied the wrong type of headlines for a while now is Polish developer and publisher CD Projekt, mainly for its bungled launch of Cyberpunk 2077 to hit financial deadlines and executives making promises that weren’t kept. I’ve been following it from a distance because I wanted to see results instead of listening to how management claimed they would fix the broken game, and after a number of updates, it’s apparently in a good enough state for Sony to allow it back onto its PlayStation store. Kudos to all the hard-working employees that worked on a game that was already released, even if the PlayStation 4 and Xbox One versions are still not up to par. In Witcher news, the company held WitcherCon in early July. As part of this digital fan experience, the company announced a second season of Netflix’s The Witcher series and that The Witcher 3’s next generation update will, allegedly, be out this year. I’m eager to see the impact of Cyberpunk’s relisting on its bottom line, though I don’t expect its financial performance to suffer nearly as much as its reputation.

Sources: Bloomberg, Company Investor Relations Websites, Netflix (Image Credit), The NPD Group.

-Dom

Xbox & Ratchet & Clank Set Records in June 2021 U.S. Games Industry Sales Report

I know it feels like 2020 never ended. Yet somehow, the front half of 2021 is now in the books. It was another challenging one for a variety of reasons, yet one of the bright spots continues to be video game sales which I hope has provided some much-needed joy and respite for everyone.

And with that, we have.. numbers, of course!

Recently, industry tracking firm The NPD Group dropped both a monthly and second quarter 2021 report on the domestic games market. With it, sharing some notable records in the process and showing how spending on all categories this year is trending upwards.

In terms of growth, overall monthly consumer spending on games in the U.S. rose a steady 5% against a high comparable last year, set in the middle of stricter quarantine guidelines. Led by a Hardware category that more than doubled its level this same time in 2020. Within that, Microsoft’s Xbox Series X|S topped dollar sales. Even setting a new June record within the Xbox platform’s 20-year history. Separately, Nintendo Switch maintains a staggering streak when it comes to leading on unit sales, which it did again in June, as it has every month for 31 consecutive months! Both of these impressive feats occurred amidst a global chip shortage, signaling a boost in otherwise limited stock lately.

Content i.e. software, subscriptions and add-on sales moved up slightly, propped by usual suspects like Call of Duty and MLB The Show plus three new releases in the Top 5 on the general chart: Sony’s Ratchet & Clank: Rift Apart, Nintendo’s Mario Golf: Super Rush and Scarlet Nexus from Bandai Namco. Accessories was the only segment showing a decline in June 2021, though only 1% as PlayStation’s DualSense continues its consistency there.

Expanding to second quarter, total spend inched up 2% compared to the same three month period last year. However for the full first half of 2021, total sales climbed a solid 15% as all categories exhibited double-digit bumps. Spending on games isn’t slowing down compared to the height of the pandemic, proving new audience members are sticking around and core players are keeping up the hobby.

It’s time to delve deeper into each segment individually, including a close look at the software charts for both June and 2021 to date!

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

During June 2021, overall consumer spending in the domestic games market reached $4.93 billion, rising 5% compared to the same time last year. That’s now two consecutive months of year-on-year growth after a dip back in April.

While Content remained the leading segment by spending, it was Hardware making the biggest splash as production slowly yet surely ramps up. The last category of Accessories dipped slightly in June, cooling off a bit in the hot summer months domestically.

“Hardware was the obvious big story of June,” said The NPD Group’s Mat Piscatella. “Xbox Series was the star of the month, but all major platforms showed double or triple digit dollar sales growth vs year ago. Demand is nowhere near satiated, supply is still a massive challenge.”

Across the second quarter between April to June, total spend in the U.S. hit $14 billion. That’s up 2% since the same time in 2020. The NPD Group reported Q2 growth across a variety of sub-groups: personal computer (PC), cloud, non-console virtual reality, mobile, subscriptions plus, of course, gaming consoles.

“Consumer spending has not only maintained the elevated levels reached a year ago, but exceeded them in key areas such as hardware, mobile and subscription spending,” said Piscatella in the Q2 report at the firm’s website.

This trend is illustrated even more when looking at the entire first half of 2021. The total for consumer spend jumped 15% to $28.94 billion during the six month span ending June, driven by console growth in particular. Demand for new consoles still outstripped inventories, though manufacturers proved resilient with production even as it’s difficult to source certain parts in the supply chain.

When focusing on Content alone, sales in June reached $4.32 billion. Up a modest 1% year-on-year. Looking at second quarter, this major category saw $12.6 billion in sales, growing 2%. Notably driven by subscription spend, showing double-digit growth in Q2 (although the firm wasn’t specific in that figure). Across the time frame from January to June, Content bumped upwards of $25.36 billion, 13% higher than first half of 2020.

New releases wrote the narrative here for June. Sony published Ratchet & Clank: Rift Apart, the month’s top-selling software title. The latest mainline Ratchet & Clank action-adventure platformer achieved the best dollar sales ever in franchise history, a staple within the broad portfolio of developer Insomniac Games. The prior record holder for the series was April 2016’s Ratchet & Clank, a counterpart to a movie launched that same month.

Right behind chart mainstay Call of Duty: Black Ops Cold War, which ranked #2, was Nintendo’s latest sports offering in Mario Golf: Super Rush. Within the States, this title set a new Mario Golf record for first month dollar spend, outpacing that of GameCube’s Mario Golf: Toadstool Tour way back in 2003. Nintendo hasn’t yet shared global unit shipments for its latest Switch exclusive sports game, though I expect a similarly solid start when it does on August 5th.

June’s biggest surprise to me was Scarlet Nexus fighting to the five spot on the combined platform chart. An action Japanese Role-Playing Game (JRPG) from Bandai Namco is the latest in splendid starts for Japanese titles expanding overseas during simultaneous global launches, echoing examples like Square Enix’s NieR: Replicant at #5 in April 2021, Capcom’s Monster Hunter Rise in the second spot during March 2021 plus Dragon Ball Z: Kakarot also from Bandai Namco, the best-selling title in January 2020.

Through the first half of 2021, chart composition is familiar. Call of Duty: Black Ops Cold War was the best-seller with Resident Evil: Village and MLB The Show 21 right behind it at #2 and #3, respectively. One notable position is the 9th-ranked Outriders from Square Enix, a quietly consistent seller during the first half even if it lost some ground compared to May.

It’s time for the lists themselves, both monthly and first six months of the year.

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

  1. Ratchet & Clank: Rift Apart
  2. Call of Duty: Black Ops Cold War
  3. Mario Golf: Super Rush*
  4. MLB The Show 21^
  5. Scarlet Nexus
  6. Resident Evil: Village
  7. Mario Kart 8*
  8. Minecraft
  9. Marvel’s Spider-Man Miles Morales
  10. Mortal Kombat 11
  11. Animal Crossing: New Horizons*
  12. Call of Duty: Modern Warfare 2019
  13. Super Smash Bros. Ultimate*
  14. Assassin’s Creed Valhalla
  15. Super Mario 3D World + Bowser’s Fury*
  16. Mass Effect: Legendary Edition
  17. Tony Hawk’s Pro Skater 1+2
  18. The Legend of Zelda: Breath of the Wild*
  19. Pokémon Sword & Shield*
  20. Sea of Thieves

Top-Selling Games, 1st Half 2021, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. Call of Duty: Black Ops Cold War
  2. Resident Evil: Village
  3. MLB The Show 21^
  4. Super Mario 3D World + Bowser’s Fury*
  5. Marvel’s Spider-Man: Miles Morales
  6. Monster Hunter Rise
  7. Mario Kart 8*
  8. Assassin’s Creed Valhalla
  9. Outriders
  10. Minecraft

Moving onto gaming consoles during June 2021, the Hardware category saw gains across all three major platforms in PlayStation, Xbox and Nintendo, driving exceptional growth of 112% to $401 million. That’s the top June sales amount for Hardware since June 2009’s $617 million.

I mentioned before the great, record-breaking month for Xbox where Series X|S led by dollar sales. That’s the first time since its launch in November 2020. It recorded the best June month ever for an Xbox platform, beating out June 2011. No doubt driven by new content for console exclusive Sea of Thieves, continued pace from MLB The Show 21 plus the allure of Xbox Game Pass as the best value proposition in games.

Microsoft wasn’t the only manufacturer with an exciting month. Nintendo Switch led by unit sales in June 2021, as it has every month for years now during its wild run of success. PlayStation 5 continues its extremely quick start. Sony’s new generation (big ol’) box is still the fastest-selling home platform in tracked history, as measured by unit sales during the first 8 months on market. Note this statistic excludes handhelds, since Game Boy Advance is still the fastest-seller overall.

Stretching the time frame to second quarter, console spending moved up 12%. Then between January and June, this Hardware category earned $2.35 billion. That’s a fantastic 45% increase, even if compared to a time that was later in the console cycle last year.

It’s worth repeating that numbers during the early portion of a new platform generation are driven by supply rather than demand, more now than ever given the inventory environment. Essentially, Xbox produced enough Xbox Series X|S units to lead by dollar sales during June. Demand is for all platforms is stellar, even Nintendo Switch four years after its debut. This contrasts a chip shortage expected to block higher production output for a year or two, at least.

The only mildly disappointing category during both June and second quarter was Accessories, unable to keep pace with its counterparts. Understandable given the strength of spending this time last year. Although it did exhibit growth when looking at the aggregate during the first half of 2021, an encouraging sign.

Monthly spending on this category comprised of game pads, headsets etc declined 1% to $207 million in June and was 12% lower than last year when looking at the second quarter. Still, it saw 14% growth during the first six months of 2021, rising to $1.23 billion.

Sony is the consistent leader here. The PlayStation 5’s DualSense Controller Midnight Black edition topped this accessory group during June. Out of the four best sellers last month, three of those were DualSense game pads. Similarly, DualSense’s base White variant led the segment for the year so far.

It appears additional spending on these pieces of ancillary hardware is slowing in the early summer months, so will see where it goes leading into the back half.

The domestic games market saw many bright spots during June, especially for platform holders. Each of them had bragging rights in their own way, and all of them are doing well despite production challenges.

Individual software titles, subscriptions and mobile are keeping up consistency in spending, proving how the industry was not just able to grow its audience during the last year or so, but keep it around to maintain commercial momentum and interest in the medium.

Which makes sense to those tracking closely. Gaming is somehow both the most massive entertainment segment in the world and the quietest, a trend that last week’s reporting clearly shows especially when considering double-digit gains across each category since the year’s start.

I hope everyone stays well until next month when July marks the start of 2021’s second half, always an exciting time for those of us that love to follow. Feel free to drop a comment here or on social media. Be safe and thanks for reading!

*Digital Sales Not Included, ^Xbox Digital Sales Not Included

Sources: Billy Freeman (Photo Credit), The NPD Group, PlayStation Press Center.

-Dom