Nintendo’s Annual Results Decline Slightly Amidst Hardware Shortages During The Company’s Best Year Ever for First Party Software Sales

Everyone that’s seen my latest earnings calendar knows the deal!

Nintendo is up next for this usual series of earnings recap and reaction articles for major gaming companies, this time focused on its annual results for the fiscal period ending March 2022.

While Switch hardware momentum slowed a bit, software is as strong as ever. In fact, stronger than ever.

As part of its report Tuesday, the Kyoto-based video game developer and publisher shared a variety of statistics around its yearly results. Software shipments from a units standpoint rose 2% last year. The firm even reported its highest level of first party software sell-through to consumers for a single platform.

And it’s had a lot of platforms since it entered the games business way back in the 1980s!

Its most recent in the Switch has been a commercial darling since launching in March 2022, spurring growth after the dark days of its failed Wii U console. While it didn’t see as much hardware success as fiscal 2021, it still achieved management’s latest shipment estimate plus had the second highest annual sell-through since it hit market outside of that first year.

Nintendo’s results, which saw dollar sales slow in the single digits and operating profit remain virtually the same, fits the industry theme of reverting to more normalized spending habits. Even if down from highs of last year, this was still its second best annual financial performance in more than a decade.

“Regarding Nintendo Switch, we will continue to convey the appeal of all three hardware models to maintain a high level of sales momentum and expand the install base,” the company wrote in its report. “Other software publishers also plan to release a wide variety of titles, and we will work to strengthen sales through the combination of existing popular titles and a continuous stream of new titles.”

Before moving into the full report, I want to highlight a recent article on Nintendo from friend of the site Kat Bailey at IGN. Entitled “Inside the Growing Discontent Behind Nintendo’s Fun Facade,” this investigative piece digs into the company’s culture and workplace conditions, notably its treatment of contract workers. It’s a rare peek behind the curtain, as relevant as ever considering how well the company is doing. Once you get done here, I highly recommend reading Kat’s fantastic coverage.

It’s time to dig into the nitty gritty.

On the financial side, Nintendo shared that net sales declined 3% to $15 billion. Operating profit lowered ever-so-slightly to almost $5.3 billion. Both of these were the second best amount respectively since fiscal 2010, came in above forecast and fit with the general theme of mean reversion.

These two metrics are displayed over time in the charts above, showing a slight contraction for both from highs a year back.

Splitting out by region, Americas was the leading contributor at 43%. That’s down slightly from 42% last year. Europe’s allocation remained consistent at 25% while Japan moved down from 23% to 21%. The remainder of countries outside these regions made up 10% of 2022’s total.

Nintendo shared insights into product category mix as well. Software sales contributed 52% of dedicated video game platform sales, while hardware made up the remaining 48%. That’s flip-flopped versus last year, when software was 47% and hardware comprised 53%. This shows the balance of Nintendo’s business exposure, plus a lean towards games in a time where console shipments lagged on the supply side.

Similar to my article on Microsoft’s latest financial report, here’s a rundown of how Nintendo stacks up to industry peers when it comes to the latest annual results. Tencent reports later this month, though most recently had an industry best $27 billion from gaming. Microsoft’s Xbox division posted $16.5 billion. Factoring the pending Activision Blizzard deal, it could be upwards of $23 billion to $24 billion depending on cost savings, etc. Unfortunately, both of these companies don’t break out profit from games. On the other hand, Sony also reported results today featuring $24.4 billion in revenue then $3 billion in operating profit. Thus, while Nintendo’s overall sales aren’t as much as these others, it’s currently more profitable than the PlayStation brand.

Digging into the aforementioned softening hardware sales, the Switch sold 4.11 million units during January to March which amounted to an annual total of 23.06 million. While that’s down 20% from the 28.83 million of fiscal 2021, it’s still the second best 12 months on record and exactly in-line with the company’s most recent guidance of 23 million. It’s worth noting this was revised downward twice from an original call of 25.5 million, signaling extended supply challenges.

Lifetime Switch console sales now stand at 107.65 million. An annual dip was expected given both the life cycle timing and global semiconductor shortage, it was just a question of how much. Tending to lean conservative, Nintendo’s initial guidance for the year ending March 2023 is an even lower amount of 21 million. That’s effectively returning to the amount of fiscal 2020, its third full year on sale.

Now that there’s three Switch models, Nintendo shares performance for all of them individually. The standard model is still the most popular of course, contributing 13.56 million to the year’s total. That’s down 33%, mainly due to the introduction of the OLED version which shipped 5.8 million boxes since hitting retail in October 2021. Finally, Switch Lite declined 57% to 3.7 million units in fiscal 2022.

Shifting into the Switch software category, Nintendo sold 235 million Switch games in the year ending March 2022. This is 2% higher than the almost 231 million of a year ago. First party games made up almost 80% of the platform’s annual software sales. Which essentially means 4 out of every 5 titles sold on Switch is published by Nintendo.

This sort of increased performance, happening as hardware sales slip, mainly proves how new and existing console owners keep buying games at a higher rate than even last year’s peaks. Which makes sense for a company known for its quality of output.

This annual growth led to lifetime software sales on the platform hitting 822.18 million. It was at 587.12 million back in March 2021.

Nintendo Switch ended fiscal 2022 with 39 “million-selling” titles during the fiscal year alone. This was at just 29 last quarter! For the year, 26 were published by Nintendo while 13 came from third-parties. Last year, Switch experienced 36 million-sellers: 22 from Nintendo, then 14 from external partners. A clear sign of catalog strength and what I call the “Switch Effect” on new titles in franchises normally considered as niche.

A couple headline releases during the latest quarter helped drive this consistency on the exclusive software side.

January’s Pokémon: Legends Arceus was the highest profile of the bunch, moving 12.64 million copies so far. That’s the third best start for a Pokémon game on Switch behind only 2019’s Pokémon Sword & Shield at 16 million and the nearly 14 million of Pokémon Brilliant Diamond & Shining Pearl last November. Truly an excellent beginning for Legends Arceus, which sold-through 11.4 million of those shipments, considering it’s a single release in a franchise that historically puts out two titles at a time.

Kirby and the Forgotten Land released towards the end of this period, rounding out the company’s first party slate for the fiscal year ending in March. It hit 2.65 million units shipped in those handful of days alone. Not only that, the cute 3D platformer sold-through over 2.1 million copies to buyers. This is undoubtedly the fastest-selling mainline Kirby in history; it will almost certainly pass the franchise’s best-seller of 1992’s Kirby’s Dream Land at 5.13 million last count.

Expanding to earlier catalog launches, Mario Kart 8 Deluxe naturally maintains the top spot on the all-time Switch best-sellers list. Bolstered by new downloadable content, the game originally out in 2013 shipped nearly 2 million in January to March alone! That pushes it above 45 million copies lifetime, 45.33 million to be exact, as one of only a few games ever to hit this milestone.

Animal Crossing: New Horizons moved an additional million copies in the quarter, no biggie, to continue as the second best-selling Switch title with 38.64 million to date. Super Smash Bros. Ultimate stays in third, selling 770K units to fight past 28.17 million in aggregate.

Since launching at that nearly 14 million copies mark in November 2021, Pokémon Brilliant Diamond & Shining Pearl extended to 14.65 million as of March. That makes it the 8th best-selling Switch game and 2nd best-selling Pokémon title on the hybrid platform. Exercise experience Ring Fit Adventure raced past the 14 million milestone to date, legging out an additional half million units and rounding out the Top 10 Switch best-sellers.

Speaking of milestones, Metroid Dread is already the top-selling Metroid game of all time. While it only shipped 160K units during January to March, combining that with the massive start last October puts it at 2.9 million copies or just above the 2.84 million of 2002’s Metroid Prime. Talk about having a ball!

Elsewhere, Mario Party Superstars shipped 1.45 million in the quarter, ending it at 6.88 million. The Legend of Zelda: Skyward Sword HD pushed another milly, now at 4.22 million lifetime. Both of these contributed to that ever-expanding million-seller list for this past fiscal period.

Wrapping up various miscellaneous indicators and tidbits of information, Nintendo indicated digital dollar sales rose 4.5% to $320 million. Downloads accounted for 43% of software sales for the year, same as during 2021. Its digital contribution is lagging the wider industry standard, which has been around 50% or more depending on the publisher or manufacturer, however that’s always been the case for Nintendo. It’s much more reliant on traditional retail sales than others.

In a bit of bad news for analysts, Nintendo still doesn’t report many player engagement statistics. The company has made up this statistics dubbed “Annual Playing Users” which really just means the number of accounts that logged into a Switch during a given year. Last year, this figure reached 87 million. It recently achieved management’s goal of passing 100 million by March 2022, ending at 102 million.

You’ll notice this isn’t the most descriptive of metrics. It’s very much a parallel to the number of Switch hardware units out there. It doesn’t reveal too much. I’d much prefer to know more about monthly active users or revenue per user. Wishful thinking in this context.

Another area with a distinct lack of information was Nintendo Switch Online, the company’s somewhat rudimentary online offering. There’s no update on subscribers, a figure that hit 32 million back in September 2021. All management said was sales of add-on content for Animal Crossing: New Horizon and Mario Kart 8 Deluxe “grew” this past year.

With Nintendo, I’ll take what I can get.

As Nintendo closes the books on another year, it’s clear there’s currently limited downside on financial performance because it keeps fans purchasing software even when hardware is taking a hit from international semiconductor shortages, limited part availability and higher cost to produce consumer technology. This is the sixth fiscal year for Switch after all, as it will end the 2023 period just after celebrating its 7th birthday.

Looking ahead, the company’s forecast is conservative. I think rightfully so, even with a slate of anticipated titles in successful franchises.

In fact, the forward looking guidance is quite familiar. It’s literally the same exact numbers as last year. Nintendo expects revenue to decline 6% to $14.2 billion, while operating profit should dip 16% to $4.45 billion. As displayed by my earlier charts, these will still be healthy numbers in the perspective of the last decade or more.

“If COVID-19 interferes with production or transportation in the future, this might impact the supply of products. Other unpredictable risks to the development and marketing of products and services also continue to exist,” the company’s press release read. “In addition, the production of products might be affected by obstacles to the procurement of parts, such as the increase in global demand for semiconductor components. The consolidated earnings forecast is based on the premise that we will be able to secure the parts needed for the manufacture of products in line with our sales plans.”

Starting with that hardware guidance for the 12 months ending March 2023 of 21 million, I believe it’s a reasonable expectation. It would be down 2 million from the 23 million achieved this year. Right now, based on chipmaker leaders globally and experts saying shortages may last until even 2024, I’m targeting 20 million to 21 million Switch shipments in my models.

The elephant in the room is: What about new hardware? Will there be an update? Could the company produce yet another revision?

Well, Nintendo’s upper management has made a slight yet important tonal shift on that topic. As recently as last quarter, President Shuntaro Furukawa hinted how there’s no successor in sight because the current Switch is mid-way in its life cycle. Today, during a question and answer session after the earnings press release, he declined to even comment on Nintendo’s next hardware.

Personally, as has been the case for a while, I’m not a believer in a Switch Pro or even any upgrade until the successor which I expect to be a “Switch Part 2” with the same fundamental features and various improvements. I believe Nintendo’s strategy will lean on new releases, catalog software and online packs for at least the next two years. Supply conditions alone mean console generations will be longer than ever, so my current forecast is January to March 2024 for the company’s next hardware.

I’m much more upbeat on the software slate and monetary contribution from this business segment going forward, as Switch owners keep proving they want to buy games. Especially given Nintendo’s track record of mostly quality titles, then partnering with others to enhance its platform especially via independent games. From a unit standpoint during the year ending March 2023, it expects software sales to decline 11% to 210 million. I believe it will be higher.

So, what are the flagship upcoming games that will drive this resilience?

First, those with dates. Nintendo Switch Sports kicked off a couple weeks back. Mario Strikers Battle League and Fire Emblem Warriors Three Hopes are scheduled for June, while Xenoblade Chronicles 3 moved up to July. Splatoon 3 is the latest with an actual date attached, launching in September. These all seem locked in, I’d be surprised if they shift.

Pokémon Scarlet & Violet don’t have a date, but rather “Late 2022” as the window. I’ll assume November, and GameFreak will certainly hit that given the franchise’s usual cadence. Bayonetta 3 is much more in flux with a nebulous 2022 window. I’d be surprised if that doesn’t slip to calendar 2023.

In what’s currently the biggest pending Switch game, and the most annoying to write, The Sequel to The Legend of Zelda: Breath of the Wild was recently delayed to Spring 2023. Could that make this fiscal year? I’m betting March 2023.

Then there’s the curious case of Advanced Wars 1+2: Re-Boot Camp, which was supposed to be out by now yet pushed back in light of the ongoing Russian invasion of Ukraine. That and Metroid Prime 4 are listed as “TBA” in Nintendo’s reporting. I expect the former might launch sooner than latter, while the latter won’t be for a while more and thus won’t contribute to the upcoming fiscal period.

There’s also how Shigeru Miyamoto told everyone on Twitter how the Mario movie was also delayed out of holiday season. Was the plan to have a counterpart mainline Mario release to coincide with the film’s marketing? If so, will that also be moved?

I’m wagering there’s definitely a surprise or two that no one knows about, except those working on them. I am betting on that new Mario title, likely 2D, plus a rejuvenated franchise that no one is expecting.

Well, that’s the rundown on Nintendo’s most recent fiscal year. It’s a lot to cover during an eventful time for the company. What stood out the most? Were you surprised by the results or any of its forecasts? What might management be hiding from us as part of its fiscal 2023 lineup? Is this the year it reveals the Switch’s successor?

I’m always available here and social media for discussion. Be well, and stay safe all!

Note: Comparisons are year-over-year unless otherwise mentioned. Exchange rate is based on reported conversion: US $1 to ¥112.34.

Sources: Company Investor Relations Websites, IGN, The NPD Group, Nikkei Asia (Image Credit).

-Dom

Xbox Hardware Market Share Gain Propels Microsoft Gaming Revenue to Best Non-Holiday Quarter in Company History

The ongoing Activision Blizzard deal isn’t the only thing making major headlines for Xbox lately.

Microsoft was the first of the “big three” console makers to report this earnings season, which I outline in my latest calendar post, this time sharing its fiscal year 2022 third quarter results covering the period between January and March.

During this time, gaming achieved its best non-holiday sales total ever. While certain parts of the industry cool off, Xbox is at least keeping the fire alive.

Driven by new generation hardware gaining market share plus growth in Xbox content and services, Microsoft generated $3.74 billion in quarterly revenue from gaming, up 6% since last year. That means Microsoft’s Xbox division secured its best revenue ever for a quarter that wasn’t October to December. The prior non-holiday record holder was $3.71 billion back in April to June 2021, a few months after the November 2020 launch of Xbox Series X|S.

This strength bolstered trailing annual sales to reach $16.5 billion for the first time since reporting began. That’s after a record holiday pushed it past $16 billion just last quarter as I wrote about then.

It’s even more impressive considering last year’s stricter pandemic restrictions leading to a strong comparable. According to its report, Xbox Content & Services moved up 4% while Xbox Hardware boosted 14%. Gaming as a whole rose due to growth in Xbox Game Pass subscriptions, first party software (like Halo Infinite and Forza Horizon 5) and Xbox console hardware revenue growth. Third party content was really the sole area of weakness, exhibiting declines year-on-year. What this says is the ongoing Xbox ecosystem play is paying off, supplemented by better inventories at retail.

CEO Satya Nadella even provided a more macro view for hardware right now. “With our Xbox Series S and X consoles, we have taken share globally for two quarters in a row,” Nadella said on the company’s conference call. “We are the market leader this quarter among next gen consoles in the U.S., Canada, U.K., and Western Europe.”

Based on supply driving the cycle due to a global semiconductor shortage, this sort of strength in hardware and market share implies Microsoft was able to secure more components than Sony producing its PlayStation 5. Note that Nintendo Switch was not a part of this statistic, since Nadella’s comments specifically cite the newest console generation.

While the numbers point mostly positive, I have to bring up the usual caveat that Microsoft unfortunately doesn’t share individual profit metrics for its Xbox division. That means purchasing those inputs to produce more retail units could very well have undercut profitability due to higher margins. I’ll shed more light on profit dynamics below the fold.

It’s now time to chart a course towards a more detailed analysis.

As the slides show, Microsoft’s gaming revenue increased 6% to that $3.74 billion during the quarter which was in-line with the company’s forecast. This quarterly result implies nearly $16.5 billion in trailing annual sales, an all-time high, shown via my chart in the above gallery. If combined with Activision Blizzard’s $8.3 billion annual sales and reduced by say $1 billion in double-counting and synergies, it would be between $23 billion to $24 billion.

To provide context, how does this latest top-line result compare to peers? I usually cite Tencent, Sony and Nintendo for these sections, all of which are reporting later in May so I’ll use the latest annualized figures for now. Tencent’s 2021 revenue exceeded $27 billion, maintaining its spot as largest gaming company in the world. Sony’s at $24 billion, suggesting its standing is probably just above Microsoft plus Activision Blizzard’s operations. Finally, Nintendo generated $15 billion.

The largest sub-segment for Microsoft’s gaming business was Xbox Content & Services, which improved a modest 4% to $3 billion in fiscal Q3. That means sales from Xbox Game Pass, software, cloud and any sort of add-on content via its digital storefront account for over 80% of quarterly gaming sales. This was just the second time ever it’s crossed the $3 billion threshold.

While Xbox Content & Services slightly missed the internal growth estimate of “mid to high single digits,” it’s still a success to grow versus a great result last year. I see it as a sign the Xbox brand strategy is stimulating a paying audience.

Disappointingly, Microsoft didn’t share an update on the exact number of Xbox Game Pass subscribers. The latest figure is 25 million from back in January. I’d imagine this was due to seasonality, where it picked up after the holiday and has grown only incrementally since then. Especially given a lack of major exclusives or even third party partnerships launching into the service other than Ubisoft’s Rainbow Six Extraction.

Instead, Microsoft highlighted new information specifically on cloud gaming usage. Nadella said 10 million people have streamed games remotely since the feature kicked off in beta during November 2019 then was formally introduced to Xbox Game Pass Ultimate subs in September 2020. While cloud is still niche in the scheme of things, hitting this sort of milestone shows there’s at least some level of growing interest.

“Our Game Pass library now includes hundreds of titles across PC and console, including more games from third party publishers than ever before.” Nadella noted. “Billions of hours have been played by subscribers over the past 12 months, up 45 percent.”

Lastly, he said Azure gaming revenue increased 66% during the current fiscal year to date. These sorts of statistics on service, cloud, streaming and the like fit with the company’s gaming mantra of allowing people to play on various devices. It eases the burden on hardware shipments, which I’ll cover next.

The second sub-segment within gaming is Xbox Hardware, which exhibited the better growth during January to March. Sales here moved up 14% to $728 million. That’s the second best non-holiday result since the company began reporting splits. Microsoft didn’t previously share internal guidance for hardware, yet CFO Amy Hood said on the call that it exceeded expectations.

Company slides highlight continued demand for Xbox Series X|S underlying this change, however clearly it’s capped by supply conditions. Based on evidence from both regional tracking firms and retail channel checks, Xbox Series S in particular is showing better availability at least.

Of course, the question on everyone’s mind is: how many units of Xbox Series X|S has Microsoft shipped now during its fifth full quarter on market? Last quarter, I mentioned the estimate from Daniel Ahmad, Senior Analyst at Niko Partners, being above 12 million. While revenue growth doesn’t directly translate to unit sales trajectory, I’d guesstimate the family at upwards of 14 to 14.5 million globally. As a reference, last count for Sony’s PlayStation 5 was 17.3 million.

We’d know for sure if Microsoft was more transparent. (Wishful thinking!)

Fitting with the theme of market share gains and increased inventories was The NPD Group’s recent monthly report on U.S. games industry spending. As I covered in my article, Xbox Series X|S was the leading console for both March and the first quarter domestically by dollar sales. It’s certainly attracting buyers, when there’s stock on hand.

“Coming to the end of a good week,” wrote CEO of Gaming Phil Spencer on Twitter. “Microsoft earnings were a nice moment for Xbox, it’s always great to hear Amy [Hood] and Satya talk about the progress.”

Now, here’s yet another important caveat related to profitability. We don’t know if Microsoft is making a profit on either model right now. In fact, last year during the Epic v. Apple trial, Head of Xbox Development Lori Wright specifically said the firm sells hardware at a loss. Which is consistent with historical data and anecdotes across the industry, as consoles are known as a loss leader and a means to have people spend on software, and now subscriptions or other content.

Comparatively, Sony said it’s now turning a profit on each PlayStation 5 standard edition it ships. Without a better indication of cost impact, it’s difficult to make a direct comparison.

Stepping back to briefly touch on Microsoft’s general results, the company generated over $49 billion in quarterly sales which is 18% higher than last year. Operating income exceeded $20 billion, up 19%. Both top-line and earnings-per-share came in above analyst estimates.

Intelligent Cloud as a segment showed the most growth, jumping 24% in Q3. Microsoft Cloud revenue improved 32% to over $23 billion. Office Commercial products and cloud moved up 12%, while LinkedIn sales rose 34%.

Gaming is part of the More Personal Computing business for Microsoft, which rose 11% to $14.5 billion. This means Xbox comprised 26% of quarterly segment sales, down from 31% during the holiday quarter between October and December 2021.

In terms of a glimpse into profitability for this segment, gross margin percentage declined “slightly” last period. That’s because of a 17% increase in operating expenses, attributed to gaming, search, news advertising and Windows marketing costs.

Essentially, gaming is less profitable than other areas when investing heavily in console manufacturing and external deals. This also reflects the broader trend of inflation, impacting input pricing. The more it takes to make a product, the lower its margins. Right now, the implication is there’s higher cost in both producing consoles and making the types of deals required for Xbox Game Pass. Without exact data on how much profit is made per retail unit sold or for gaming as a whole, I have to make these kinds of inferences.

Considering gaming sales rose 50% this time last year, beating total growth estimates in the latest quarter was a great showing on the revenue side. That $3 billion figure for Xbox Content & Services in particular supports the brand’s reinvigorated move towards keeping players in a more accessible ecosystem as opposed to a singular piece of hardware. There are still indications that profitability is being hit by input availability and cost, so that’s worth keeping in mind especially moving into the second full calendar year of Xbox Series X|S.

Looking ahead, next time Microsoft will report fourth quarter and annual results for fiscal 2022.

When it comes to gaming, CFO Amy Hood laid out somewhat bearish internal guidance for April to June as the company anticipates lower sales, echoing a trend seen industry wide as a reversion towards more normalized spending habits.

“We expect revenue to decline in the mid-to-high single digits driven by lower engagement hours year-over-year as well as constrained console supply,” Hood said. “We expect Xbox Content & Services revenue to decline mid-single digits though engagement hours are expected to remain higher than pre-pandemic levels.”

Note: She didn’t provide formal guidance on hardware results.

Digging into that first estimate, let’s assume an 8% decline. This would lead to fourth quarter gaming revenue of $3.4 billion versus the prior amount of $3.7 billion. When aggregating for the full year, it would still be an increase from $15.4 billion to $16.2 billion. That implies we’ll see a fiscal year sales record for Xbox despite anticipated weakness in the final quarter.

Then, if Xbox Content & Services dips say 5%, it would generated $2.8 billion in the fourth quarter which would be the lowest result since the pandemic began.

We’ll have to see how it plays out for Xbox over a three month span where it’s going to reveal a lot more about future titles than actually launch many on the first party side. On June 12th, Xbox & Bethesda will host its annual summer showcase where I expect to see more about Starfield, Redfall, Senua’s Saga: Hellblade II, Avowed and hopefully the Indiana Jones project.

Thanks everyone for stopping by and making it this far. Be safe and well!

Comparisons are year-over-year unless otherwise noted.

Sources: Company Investor Relations Sites, The NPD Group, Xbox Wire, Yahoo Canada (Image Credit).

-Dom

Earnings Calendar Apr & May 2022: Gaming, Media & Tech Companies

It’s April, which means a lot of things. The weather is feeling nicer here in the States, Uncle Sam has looked over our tax bills, many celebrated Easter, plus Ramadan is still underway. Way more important than any of those, naturally, is another earnings season!

As is tradition here, we’ll be celebrating the season with another list of earnings dates across gaming, media and technology sector companies. I like to think it’s the most comprehensive list on the internet covering these sectors, now featuring over 100 public companies.

It’s still best efforts of course, and certain exact dates aren’t known yet. I’ve marked those accordingly with general windows based on historical timing.

April to May is always a busy one because a number of fiscal years end in March, in which case we hear both fourth quarter and full-year results. Either that or it’s the first quarter of a brand new fiscal year, giving an indication of where a company is trending.

Read below the fold for a handy Google Sheets document and three major companies to watch in the next few weeks. I’ll be covering certain results here at the site, and even more on social media.

Have a great season all, be safe and well!

Working Casual Earnings Calendar Apr & May 2022: Gaming, Media & Tech Companies

Sony Corp: Tuesday, May 10th

In a couple weeks, Sony Corp will report its full year 2021 results. On the radar for me is the Japanese tech conglomerate reporting updated PlayStation segment financials, PlayStation 5 hardware shipments, subscription numbers for its services plus engagement statistics. At present, PlayStation 5 global shipments total 17.2 million which is lagging its predecessor at this point in the life cycle. Based on regional data this quarter, I expect hardware shipments for Sony have been impacted most by supply constraints among the “big three” console makers. The big news lately is the rebranding of its PlayStation Plus subscription, which begins in June. I’d like to hear anything from executives on that topic, then a long shot of management mentioning more on their PC strategy for its published software titles.

Ubisoft Entertainment: Wednesday, May 11th

Major third party publisher Ubisoft also posts annual results in mid-May, and it’s an important one. With consolidation in the games industry ramping up, the French company is one many “insiders” claim as an acquisition target, even after fending off Vivendi a couple years back. Now, “deal talks” are constant in business especially for private equity firms. That’s the sole purpose of their existence. So I don’t know if there’s any fire under that smoke, yet anything is possible these days. There’s also the past reports of rampant misconduct and harassment, which has been somewhat overshadowed by Activision Blizzard’s woes and lawsuits. While Ubisoft has moved to fire certain bad actors and improve conditions, Yves Guillemot is still top dog and these things happened under his watch. I want to hear more about steps in making it a better place to work. On the financial side, it should present on Tom Clancy’s Rainbow Six Extraction (which has been quiet and I wonder if it under-performed), catalog title impact notably Assassin’s Creed and Far Cry. Plus, expect the usual update on its pending slate of releases which include Mario + Rabbids Sparks of Hope, Avatar: Frontiers of Pandora and, allegedly, Skull & Bones.

NVIDIA Corporation: Wednesday, May 25th

Last on my list here of stocks to watch is NVIDIA, one of the later companies to report during May. This will be its fiscal 2023 first quarter offering. The chip maker and gaming processor provider is often referenced as a bellwether for semiconductor progress and availability across gaming and related industries. Last quarter, it showed massive growth in revenue and profit, the latter nearly doubled year-on-year, and analysts are anticipated over 40% top-line improvement for January to March results. It’s benefiting tremendously from the global semiconductor shortage because it’s scooping up as many as it can, there’s pent up demand for its graphics processing units (GPUs) and enterprise products plus PC buying is still high. It’s almost less about what NVIDIA has done and more where it expects to go with its forecasts. Many experts expect the chip shortage to continue in the foreseeable future through next year! Not to mention this is the first quarterly report since NVIDIA stepped away from its $40 billion bid for Arm Holdings in February due to “regulatory challenges,” which means it’s flushed with capital for investment both organic and external.

Sources: Company Investor Relations Websites.

-Dom

Xbox Series X|S & Elden Ring Show Strength in March 2022 During Another Month of U.S. Game Sales Declines

That’s another first quarter in the books. Congratulations, all. You made it!

In celebration, industry tracking firm The NPD Group gave everyone an early present this week as its March U.S. games spending report was originally slated for release on Tuesday. It was a Monday surprise! I’m a bit late in covering it because WordPress Issues, but I’m here now and ready to rock. And since it’s a March month, that means we have a whole quarter of data to peruse.

Now, the headline seems drearier than it is. Yes, domestic consumer spending on video games declined in March, marking the fifth straight month of lower sales. All three categories saw double-digit dips. Do you remember where spending was at this time last year? All-time highs for a March month, that’s where.

According to this latest report, consumer spending across Video Game Content, Hardware and Accessories declined 15% in March to just under $4.9 billion. That’s down from a record-breaking March of $5.69 billion in 2021. Essentially, this past month was in-line with the first phase of the pandemic. To help with context in gaming, that’s when everyone was playing Animal Crossing: New Horizons.

Everything in context!

While all categories moved down in March, the broadest of Content (software, mobile, add-ons, subscriptions etc) showed the most resilience down only 13%. This is partially due to a lower mobile contribution. Within premium software, the beast that is Elden Ring beat out a slew of new titles to snag its second straight monthly win atop the overall chart. Launches of Gran Turismo 7, Kirby and the Forgotten Land, MLB The Show 22, WWE 2K22 and Stranger of Paradise: Final Fantasy Origin all sold well enough to be in the Top 10 last month.

Hardware as a segment experienced the most precipitous decline on a percentage basis, down 24%. Xbox Series X|S secured its spot as best-selling console of March measured by dollars. Why? Well, because it was more available to buy. Especially the entry level Series S design is popping up more frequently at retail. Not only was the family of devices the month’s top seller, it also generated the highest dollar sales of any console during the first quarter.

“Consumers [are] returning to experiential spending, and perhaps even pressures from higher prices in other areas, may now be impacting video games,” wrote The NPD Group’s Mat Piscatella on Twitter. “Continued supply constraints in hardware aren’t helping.”

Manufacturers and suppliers on the hardware side are doing as much as they can to produce as many boxes as possible, given those constraints. Though it’s still not enough to satiate demand at this stage. Software publishers are seeing the impact of more normalized, plus less discretionary, spending in this inflationary environment. Notably within mobile. So, a lack of growth isn’t a doomsday indicator. It’s more a reversion, dampened by higher prices for companies and individuals.

Moving into the fun stuff. The numbers, of course!

United States Games Industry Sales (February 27th, 2022 – April 2nd, 2022)

Beginning with the overall figure I referenced earlier, total consumer spending on the games industry declined 15% to $4.85 billion during March. When expanding to the first three months of 2022, it’s $13.92 billion or 8% lower than the corresponding period before.

I’ll cover Video Game Content first. During March, spend on Content dipped 13% to $4.11 billion. Which means this category currently makes up around 85% of monthly spending.

There’s clear downward pressure from mobile, which saw 12% lower spending last month than in March 2021. This includes a 25% decline in Google Play games revenue, whereas Apple’s App Store purchasing came down only slightly. Even considering this impact from March, mobile spending declined less than 10% for the quarter. Top earners for mobile in the month were Candy Crush Saga, Roblox, Coin Master, Garena Free Fire and Genshin Impact.

“U.S. mobile game spending continues to considerably outpace our pre-pandemic projections,” noted the report. “Although signs of the space cooling off as consumers return to in-person occupations and spend more time on other pursuits outside the home are showing.”

When it came to premium software, the story was new games hitting market before fiscal year end for many publishers. It was a busy month where seven of the Top 12 sellers on the combined chart were brand new games. Three of those were among the Top 5.

March’s best earner Elden Ring is technically not one of those new releases since it had all of two days in February’s report. Those alone propelled FromSoftware’s latest to first at the time. Now a double-digit sales increase during March helped it secure the win again. The soulslike open world was the highest seller on all its available platforms, it’s still the best-selling of 2022 to date and second to only Call of Duty: Vanguard over the last 12 months. The Tarnished may be “maidenless,” yet they are certainly makin’ more.

Finishing in second place during March was PlayStation exclusive Gran Turismo 7. The racing sim entry from Sony’s Polyphony Digital accelerated to the best launch month in Gran Turismo franchise history when measured by dollar sales. (I have a note out to NPD Group to confirm the prior record.) It’s also immediately fourth on 2022’s top sellers so far. As a quick comparison, its predecessor didn’t chart. With the caveat it was a holiday release in December 2013.

Quite literally rounding out the Top 3 was Kirby and the Forgotten Land. Keep in mind Nintendo doesn’t include digital portion for its Switch games. While NPD Group didn’t share much in the way of comparison to prior Kirby games, I would wager it had the best launch month ever. I ran some quick checks on rankings. Switch title Kirby Star Allies debuted at #4 in March 2018 while Nintendo 3DS entry Kirby: Planet Robobot didn’t hit the Top 10 during June 2016. When Nintendo reports its annual earnings in a couple weeks, I fully expect the Switch effect to boost Kirby and the Forgotten Land to fastest-selling in the franchise. Sorry if that was a mouthful!

Fourth place in March was the curious case of MLB The Show 22. I say that because looks can be deceiving. Last year’s entry was the top-selling of April 2021, setting an all-time franchise record after becoming a multi-platform release also available day one on Xbox Game Pass. Now, this year’s initial rank only accounts for certain special editions offering an early access phase. Next month’s report will tell the full story; I expect it to be a good one.

Wrapping up other new releases, 2K Games’ WWE 2K22 wrestled to #7 after taking a year off. Stranger of Paradise: Final Fantasy Origin, Tiny Tina’s Wonderlands and Ghostwire Tokyo secured 10th through 12th place respectively. Lastly, Triangle Strategy landed just outside the Top 15. Note some of these also have the “no digital” caveat. The list below has specifics.

My final observation on the software side from March is how four games outsold Call of Duty: Vanguard in the first quarter of 2022. It’s another indicator of lagging premium Call of Duty sales, echoed in this week’s quarterly financials from Activision Blizzard which I covered on social media.

Here goes the full software charts for March and Q1 2022.

Top-Selling Games of March 2022, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. Elden Ring
  2. Gran Turismo 7
  3. Kirby and the Forgotten Land*
  4. MLB The Show 22#
  5. Horizon Forbidden West
  6. Pokémon Legends Arceus*
  7. WWE 2K22*
  8. Mario Kart 8*
  9. Call of Duty: Vanguard
  10. Stranger of Paradise: Final Fantasy Origin
  11. Tiny Tina’s Wonderlands*
  12. Ghostwire Tokyo
  13. FIFA 22
  14. Minecraft
  15. Madden NFL 22
  16. Triangle Strategy*
  17. Mario Party Superstars*
  18. Super Smash Bros. Ultimate*
  19. Animal Crossing: New Horizons*
  20. Assassin’s Creed Valhalla

Top-Selling Games of Q1 2022, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. Elden Ring
  2. Pokémon Legends Arceus*
  3. Horizon Forbidden West
  4. Gran Turismo 7
  5. Call of Duty: Vanguard
  6. Madden NFL 22
  7. Kirby and the Forgotten Land*
  8. Mario Kart 8*
  9. Dying Light 2 Stay Human*
  10. FIFA 22
  11. MLB The Show 22#
  12. Monster Hunter Rise
  13. Marvel’s Spider-Man: Miles Morales
  14. Minecraft
  15. Mario Party Superstars*
  16. God of War 2018
  17. Total War: Warhammer III
  18. Animal Crossing: New Horizons*
  19. WWE 2K22*
  20. Super Smash Bros. Ultimate*

Shifting focus to Video Game Hardware, this segment saw $515 million in spending within March. That’s 24% lower than the record-breaking $680 million last year, which was the highest March hardware result since way back in 2008. You know, the time of the Nintendo Wii.

Again, context!

When looking at the first quarter, hardware sales dipped 15% to exactly $1.2 billion. It’s solid compared to last year’s highs, and not too shabby considering it was under $800 million back in Q1 2020 towards the end of last generation of course.

During March, Xbox Series X|S achieved that top-selling status within hardware using dollars generated as the metric. Microsoft’s current devices experienced the best March monthly sales in the tracked history of the Xbox brand, by both units and dollars spent. Prior to this, March 2011 and March 2014 were all-time bests for units and dollars, respectively.

This monthly win in March bolstered Xbox Series X|S to becoming the best-selling platform during the first three months of 2022.

It’s worth nothing that when accounting for units sold as the measure, Nintendo Switch led for March and Q1.

Want proof that whichever console maker can produce the most will win a given month? When using dollar sales, each month of 2022 so far has been led by a different platform. PlayStation 5 secured January, Nintendo Switch topped February and now Xbox Series X|S won out in March. This says, as much as anything, that supply is fluctuating month to month or even week to week. Whoever pushes the most inventory will likely be crowned victor. Temporarily, of course.

Still, it’s unclear that even with recent supply spurts, hardware output isn’t matching ongoing demand from consumers.

“Xbox had a big month due to having supply that could help meet some of the demand,” said Piscatella. “Supply [is] still an issue in hardware.”

The last category of March’s monthly report is Video Game Accessories. This paralleled almost perfectly with Hardware as consumer spending declined 23% to $227 million. This same month last year, the $300 million generated on accessories was a March record. Effectively, this particular segment is back to March 2020 levels.

When taking into account the first three months of 2022, sales on accessories moved down 16% to $592 million.

As it has all year, Microsoft’s Xbox Elite Series 2 controller was the heavy hitter. This top-end game pad was March’s best-selling accessory, making it the top seller for Q1 as well. There’s not much more color digging into this particular segment from March’s data.

As I alluded before, March spending declines aren’t doom and gloom. At all. It’s a natural movement back towards more normalized amounts, especially for something like mobile. There’s also the impact of rampant inflation causing more essential spending to take precedent for many households.

A monthly report like this really displays the impact of mobile within Content. First quarter premium releases are doing quite well at least alongside historical counterparts, illustrated by the likes of Elden Ring, Horizon Forbidden West, Pokémon Legends Arceus plus that wide swath of March launches stacking up the charts.

It sounds like a broken record, I know. Gaming hardware goes as inventories do, seeing as there are plenty of buyers when consoles do hit stores or online channels. The upside is clearly limited in the foreseeable future. Each moth a different platform shines, though Xbox did so brightly enough in March to push past the others when aggregating Q1.

Then, what about this month of April?

Well, it’s certainly not going to be as eventful as this report on the premium software side. There are fewer blockbuster games in April’s slate. Nintendo Switch Sports is a headliner that will be massive on Switch, even if it’s out very late in the month. I’m incredibly upbeat on Lego Star Wars: The Skywalker Saga after Warner Bros. Games revealed it’s already shipped 3.2 million copies globally.

I expect various games from first quarter to compete in April, notably Elden Ring yet again and MLB The Show 22 after the strength of a full launch. I’ll predict here that Lego Star Wars: The Skywalker Saga takes it home and Nintendo Switch Sports scores a Top 3 finish.

Hardware is, again, anyone’s guess. Personally, my best guess is Nintendo Switch on both dollars and units mainly due to that sports boost. Folks will be partying like granny and the fam playing Wii Sports bowling back in ’06!

We’ll have to wait and see. Until then, I recommend reading Piscatella’s thread for details directly form the source. Thanks for stopping by the site, be safe and well. Take care for now!

*Digital Sales Not Included, ^Xbox Digital Sales Note Included, #Includes on the MVP Edition and Digital Deluxe Edition

Comparisons are year-over-year unless otherwise noted.

Sources: The NPD Group, Newsweek (Image Credit), NY Times (Image Credit), Warner Bros. Games.

-Dom

Elden Ring’s Huge February 2022 Debut Isn’t Enough to Offset Fourth Straight Month of Declines for U.S. Game Sales

Everyone truly is playing Elden Ring, it seems. At least that’s what the data says!

Still, despite FromSoftware’s latest masterpiece plus a variety of major releases, consumer spending on the U.S. games market declined during February 2022 according to the latest report from The NPD Group. That’s the fourth straight month of lower sales, attributed to supply pressure on the hardware front and slowing mobile momentum in the content segment.

Total consumer spending dipped 6% to $4.4 billion during February. Which checks out and really isn’t as bad as it sounds, considering this same period last year achieved a record result for a February month. A single-digit decline from all-time highs is quite a solid showing in the current environment of uncertainty.

The Video Game Content segment fell 4% since last year. This includes lower mobile spending, the first time mobile device spend has declined in a February since the pandemic started in 2020. There were a slew of newer premium titles charting like the aforementioned Elden Ring alongside Horizon Forbidden West, Dying Light 2 Stay Human and Total War: Warhammer III which all shared the Top 5 with January’s major launch in Pokémon Legends Arceus.

Nintendo Switch returned to its place as top earner within Video Game Hardware, the category with the most pronounced decline in February of nearly 30% year-on-year. Clearly semiconductor shortages and elevated input costs were a factor, which they will be this year and likely even further in to the future.

Content often goes as mobile and premium titles do, so seeing a dip means spending on recent launches couldn’t outpace mobile’s contribution. When it comes to hardware, and to an extent Video Game Accessories as the third major segment, inventory and availability is dictating results and who leads from report to report.

Not only were monthly sales lower than last February, the number for year-to-date is presently trending downward after January followed a similar decline. For the first couple months of the year, consumer spend reached $9.1 billion or 4% lower than the same time frame in 2021.

“Definitely seeing signs of a move away from the pandemic-fueled gaming surge that had been a part of the market since April 2020,” wrote The NPD Group’s Mat Piscatella on Twitter. “[The] question is where things settle in, and how many of the players added over the past 2 years stick around, and how engagement hours/spend change.”

Before I dive deep into the numbers, I want to say I stand with the people of Ukraine in their fight against Russia’s attempted takeover of their country and freedom. Everyone who has been displaced is in my thoughts. If you are interested in donating to relief efforts, here is a pretty robust list of charities.

Also, I hope everyone is safe and well as you start to return to workplaces, conferences and more in-person events. Even if it’s a small semblance of normalcy, it’s a welcome change. You’ll always have these recaps to keep you occupied whether at home or out and about!

It’s time to talk shop. Bring on the charts and figures.

United States Games Industry Sales (January 30th, 2022 – February 26th, 2022)

As I alluded earlier, The NPD Group reported February gaming sales in the States totaled $4.384 billion which is down 6% since last year’s (record) $4.671 billion. This was dragged down the most by hardware, though the other categories also saw notable declines.

Expanding to 2022 so far, total spending reached nearly $9.1 billion. That’s 4% lower than the first two months of last year. It’s a situation many of us expected, given the surge of domestic spending on games we’ve seen over recent history.

Video Game Content contributed 89% of all games industry spending in February, or $3.9 billion in dollar value which represents a 4% decline. Looking at this same category over the year to date, it’s at $8 billion and that’s also 4% off its 2021 highs. Leading all mobile titles by revenue were Candy Crush Saga, Roblox, Coin Master, Genshin Impact and Pokémon GO.

I mentioned briefly how mobile momentum is slowing. This sub-segment dipped almost 3% during February, the first February decline in a couple years. I’d say this is natural given where we are with things slowly opening back up, though I expect it to continue leading the Content category as people have access to mobile devices wherever they go.

When it comes to premium titles, Elden Ring earned the crown for both February and 2022 to date. Bandai Namco and FromSoftware’s latest open world action role-playing game is having the biggest launch in the developer’s storied history. For this domestic report, it had the best start of any game in the past year besides the behemoth that was Call of Duty: Vanguard. It’s already the 5th best-selling title of the last 12 months. And with just two days on sale during this period! Incredible.

Expanding globally, the companies announced just last night how the soulslike sold a staggering 12 million units worldwide since late February. I was way bullish on Elden Ring as one of the most anticipated titles ever across the industry. But I don’t know if anyone expected this, as it’s officially turned into much more of a mainstream success. And has done anything but Tarnish the developer’s rep. (Those playing will know!)

Second place in the month went to another open world title in Horizon Forbidden West, the sequel to 2017’s robo-dinosaur hunt Horizon Zero Dawn. The PlayStation 5 version of this exclusive made by Guerilla Games set a brand new first month record for titles on PlayStation 5 when measured by dollar sales, I believe outpacing Marvel’s Spider-Man: Miles Morales. It’s also the 3rd best-seller of 2022 right now. The original game hit upwards of 20 million copies lifetime, and I’m way optimistic on the prospects here over time. Even if it continues the trend of launching around an all-time great: Elden Ring now and The Legend of Zelda: Breath of the Wild previously.

January’s best-selling game Pokémon Legends Arceus captured the third spot in February, now with a number of weeks on market. Those there pocket monsters selling well, what else is new? Then, Techland’s Dying Light 2 Stay Human fought to #4, which is down compared to the original game that led the January 2015 monthly ranks. Still, it was enough for the zombie parkour experience to reach 6th for year-to-date. It’s worth noting both Pokémon and Dying Light 2 Stay Human do not include digital downloads. I don’t expect that would have made a difference for the latter. Maybe for the former.

Finishing up the Top 5 is Total War: Warhammer III mainly due to its strong PC push and Xbox Game Pass word-of-mouth boost. The strategy tactics game is also currently #8 on 2022’s list. I couldn’t find its predecessor anywhere on the chart during its September 2017 start, though I’m not sure if this is a record for the sub-franchise within the broader Total War saga.

All other games within February’s Top 20 were releases from prior months or even years. One that stood out to me was Grand Theft Auto: The Trilogy – The Definitive Edition, taking the 16th spot overall. That’s up from 57th in January. The now infamous remastered version of three Grand Theft Auto games seemed to have a boost in February at retail, since Take-Two Interactive is another publisher that excludes digital.

See below for premium software rankings for both February 2022 and the year so far.

Top-Selling Games of February 2022, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. Elden Ring
  2. Horizon Forbidden West
  3. Pokémon Legends Arceus*
  4. Dying Light 2: Stay Human*
  5. Total War: Warhammer III
  6. Call of Duty: Vanguard
  7. Madden NFL 22
  8. Mario Kart 8*
  9. FIFA 22
  10. Minecraft
  11. Marvel’s Spider-Man: Miles Morales
  12. Mario Party Superstars*
  13. Animal Crossing: New Horizons*
  14. Super Smash Bros. Ultimate*
  15. Call of Duty: Black Ops Cold War
  16. Grand Theft Auto: The Trilogy – The Definitive Edition*
  17. NBA 2K22*
  18. Pokémon Brilliant Diamond & Shining Pearl*
  19. Far Cry 6
  20. The Legend of Zelda: Breath of the Wild

Top-Selling Games of 2022 To Date, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. Elden Ring
  2. Pokémon Legends Arceus*
  3. Horizon Forbidden West
  4. Call of Duty: Vanguard
  5. Madden NFL 22
  6. Dying Light 2: Stay Human*
  7. Monster Hunter Rise
  8. Total War: Warhammer III
  9. God of War (2018)
  10. Marvel’s Spider-Man: Miles Morales
  11. Mario Kart 8*
  12. FIFA 22
  13. Minecraft
  14. Mario Party Superstars*
  15. Animal Crossing: New Horizons*
  16. Pokémon Brilliant Diamond & Shining Pearl*
  17. Far Cry 6
  18. NBA 2K22*
  19. Super Smash Bros. Ultimate*
  20. Battlefield 2042

Last month, Video Game Hardware saw the most precipitous dip of the three primary categories as it declined 27% to $295 million. For perspective, console spend was above $400 million back in February 2021. The decline for 2022 so far is less severe, down 5% in the first two months to $685 million in aggregate. It certainly reiterates how difficult it is to find hardware, especially the top-end PlayStation 5 and Xbox Series X.

After PlayStation 5 took home January, Nintendo Switch was back as the leading platform by both dollars and units during February 2022. Microsoft’s Xbox Series X|S family of consoles secured the second spot, benefiting from the dual SKU approach since the entry level Xbox Series S is easier to find lately.

This flip-flopping of monthly winners on the console side is going to continue, because it’s all about who can come up with the most stock for a given time frame. Nintendo had a blow out holiday and inventories for Switch seem to be bouncing back after a slow January. Xbox Series S could push Microsoft to a win here and there. I’m still mostly impressed with Nintendo Switch entering its sixth year and still consistently putting up the best stats.

When taking the first two months of 2022 into account, it’s PlayStation 5 that leads all hardware by revenue however Nintendo Switch tops on unit sales. PlayStation 5’s strong post-holiday month was enough to hold off its competitors for the time being on dollar sales, benefiting from that premium price tag.

Really it’s just a matter of how long the supply situation lasts, and which company can secure its pipeline enough to keep consistent product on shelves. Nintendo held that title for February in a down month for domestic hardware spend overall, signaling we still have a long way to go in the everlasting semiconductor shortage.

Similar to its counterparts, the final segment of Video Game Accessories cooled during the month of February. Spending here was 7% lower than February 2021, reaching $180 million. It’s also the only category with a double-digit decline for 2022 to date, off 11% to $365 million.

This again isn’t as bad as it sounds because of where it was last year. At that time, various sub-categories within accessories saw their best February on record. That included Game Pads, Headset/Headphone and Steering Wheels. It’s tough to keep up to the best ever, especially when console sales aren’t picking up.

Out of all accessories sold, Microsoft’s Xbox Elite Series 2 controller topped the month. It’s also the best-selling accessory of 2022 at present.

One thing to keep an eye on here is the pace at which accessory spend is declining is currently worse than hardware. Another bystander of supply, and that’s even more pronounced when people aren’t purchasing many new consoles.

In certain recent reports, The NPD Group has shared some insights into virtual reality which is included in the accessories portion. I didn’t see any this time, likely because that’s more of a story during the holiday season or major product launches.

After a slower than usual start to the year, February welcomed a number of new premium games to market. It was a busy time for gamers looking to spend wisely because of just how many hit within weeks of one another. The biggest of those in Elden Ring is having a historic start, while others are certainly doing well in their own rights especially the Horizon and Total War series.

The unfortunate part is many of those same people also want to buy a fancy new console, yet probably can’t at legitimate retail. Nintendo was able to restock well in February, plus Microsoft’s Xbox Series S is propping up that particular family even if it doesn’t generate as many dollars because of its more affordable pricing. There’s certainly demand that’s going unfulfilled.

Even so, seeing single-digit declines from a record high February 2021 isn’t that concerning. In the context of recent years and even going back further, spending on the games industry is healthy.

“The last two years of significant growth have introduced gaming to new and returning audiences, have expanded the ways people engage with gaming, and have solidified gaming as a social gathering place for family & friends,” Piscatella said.

Shifting focus towards March, the last month of first quarter, and we see an equally busy calendar though I would argue less upside on the triple-A segment and spending as a whole. Square Enix boasts a number of titles: Babylon’s Fall, Triangle Strategy and Stranger of Paradise Final Fantasy Origin and I’m hesitant on all of them.

PlayStation’s flagship racing sim Gran Turismo 7 launched a couple weeks back, and has a legitimate chance at a Top 3 finish. Take-Two Interactive sports a heavy load: WWE 2K22, Tiny Tina’s Wonderlands plus yet another version of Grand Theft Auto V, this time for the current console generation.

Nintendo’s big game of the mouth, I mean month, is Kirby and the Forgotten Land. Plus the publisher has downloadable content for Mario Kart 8 Deluxe, both of which will perform well. I expect Kirby in particular to set records within the franchise, benefiting greatly from that Switch Effect.

For my quick set of predictions, I’m actually leaning towards Elden Ring repeating in March based on the number of weeks on sale plus its momentum isn’t going anywhere. I’m thinking Kirby secures Top 4 position, while Mario Kart 8 should move back into the Top 5 somewhere.

What console will lead March? Your guess is as good as mine. I like Nintendo Switch always, so I’ll say it wins March by both dollar and unit metrics. I’ve learned to not bet against Nintendo, even when I’m wholly unsure.

Did anything else stand out to you with February’s report? What do you foresee in March? Do you have any questions or comments? Feel free to reach out on social media. I also highly recommend checking out Piscatella’s thread on Twitter. Be safe and take care!

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

Comparisons are year-over-year unless otherwise noted.

Sources: Bandai Namco, The NPD Group, Xbox Twitter (Image Credit).

-Dom

Review: Witch Queen is Destiny’s Most Complete Campaign & Bungie at its Very Best

It’s still early days in Witch Queen, the latest expansion for shared world loot shooter Destiny that initially launched in 2014 then saw a sequel in 2017. Even so, my initial impressions are super positive. It’s been utterly fantastic, surpassing even high expectations.

This update is simultaneously a great entry point for new or returning players and satisfying for those who have been around since early days of what I believe to be one of the more innovative titles in recent memory. Destiny feels as great as ever in Witch Queen, enhanced by various tweaks and improvements plus rewards galore.

Admittedly it’s tricky to critique an expansion for a franchise going on eight years. There’s preconceived notions and a whole lot that’s already transpired. I can’t possibly dig into the nitty gritty of build specifics or historical lore here. Instead, I’ll focus on Destiny’s sixth main expansion in Witch Queen and, to a lesser extent, Season of the Risen as the title’s 16th season. I’ll assume a base knowledge of the series and will be using terms accordingly. We play as Guardians, whether Hunter, Titan or Warlock as a class. Guardians are wielders of the Traveler’s Light, humanity’s primary defense against a universe of powerful foes and an existential threat called The Darkness.

The groundwork of science-fiction first person shooter with weapons and abilities is bolstered here by better mission structure and crafting experimentation. Continuing the theme of adventures spanning the universe, Destiny doubles as a multiplayer game that plays well solo. It’s the beauty of the franchise. Witch Queen is the current culmination of rich world-building, incredible art direction and spectacular mechanics. It builds on a strong foundation to highlight the game’s foremost features while adding new ones that boost the enjoyment and, most importantly, generously rewards a player’s time.

These days during new expansion releases, Bungie launches a new campaign plus starts a brand new season of ongoing content. The first part here is Witch Queen, the latter is Season of the Risen. It’s difficult to parse one from another as they operate in lockstep, and both contribute to this update’s greatness. More on the seasonal aspects later.

Drilling down into Witch Queen as its own release within the broader context, it stands alone as the best Destiny campaign to date. There’s a fantastic, self-contained storyline fighting the Hive, one of the game’s many alien races, led by their trickster goddess Savathûn who has seemingly stolen The Light. There’s the improved quest structure, making missions feel like mini dungeons. A void subclass reworking results in enhancing already top-notch mechanics. There’s plenty of new loot to find, activities to complete and crafting to experiment. Post campaign, Witch Queen lays the groundwork for future installments in this expansive universe.

As for story setup, the deceitful Hive leader Savathûn has been lurking in the shadows since our Ghost found us Guardians back in 2014. She’s the sister of Oryx, whom players slayed in 2015’s Taken King expansion which many regard as the franchise’s best. Until now. She’s found a way to use the same Light as Guardians. That spells trouble, naturally. Warlock Vanguard leader Ikora Ray takes center stage in this pursuit, collaborating with Eris Morn, Titan commander Zavala and an unlikely ally of Fynch, a Hive Ghost that has broken ranks from Savathûn’s army.

Witch Queen proceeds as an investigation into Savathûn’s intentions of using Light abilities to her own ends. It’s Bungie at its best when it comes to core design philosophies, environmental beauty and narrative prowess. It’s the perfect recipe for an ongoing loot game: Immediately and constantly rewarding while always hinting at more to chase, wrapped in a narrative that expands its lore.

Brand new Hive enemy types and encounters highlight missions and go-between exploration, one of Bungie’s most clever additions in series history. The Lucent Brood are dynamic Light wielders that leverage the same abilities as Guardians. It’s a classic doppelganger setup, like fighting oneself. There is an Acolyte with solar abilities, a Wizard wielding arc and, the most dangerous of all, a massive Titan who chucks void shields and lays down barricades. In another twist, these “Hive Guardians” will resurrect if their Ghosts aren’t smashed to bits via a finisher. It makes every high level activity that much more tense, requiring strategy and coordination.

Players step into Savathûn’s Throne World as the new patrol zone and backdrop for battle against her forces. There’s a foreboding charm to Bungie’s art direction in this space, partly because it actually exists in the Ascendant Realm which means it’s a physical manifestation of Savathûn’s mind. It features twists on the usual gothic vibe of the Hive across massive buildings, misty swamps and underground caverns.

As has been a series staple, these environments are phenomenally gorgeous. The Hive aesthetic is artistry in the mysterious. There’s spiky architecture alongside flowery gardens. Misty swamps and creeping corruption. Tombs embalming fallen Hive, temples dedicated to gods, a spacious apothecary used for unsanctioned experiments. Centering it all is Savathûn’s terrifyingly beautiful palace, threatening in its aura. From top to bottom, those alluring sky boxes to dimly lit caves, Bungie’s art team shows why it’s one of the industry’s premier outfits. Witch Queen is a visual marvel, a showpiece of magical enchantment and visual mysticism.

There’s something here for everyone. It’s an access point for the curious, an ideal framework for a returning audience plus an excellent continuation of Destiny’s content model and power grind for diehards.

When it comes to hour count and content density, Witch Queen is a chunky experience. The first campaign playthru can reach upwards of six to ten hours depending on difficulty, because Bungie has introduced one of its most genius ideas yet: a Legendary campaign setting. This option caps any level advantages and introduces a variety of modifiers to make it more challenging, including no radar, beefy shields and enemies that produce fire upon death. There’s still a more casual version, of course. Legendary offers more difficulty, and increased rewards. It’s a worthwhile tradeoff.

The most noticeable campaign improvement in Witch Queen is the team’s focus on mission structure and enhanced mechanics. Each mission now has checkpoints. Most of them boast puzzles, platforming or bespoke features. Plus there are generous rewards after major encounters, rather than just boss fights, supplementing loot that drops from enemy kills. While this isn’t revolutionary, it’s a step towards making Destiny much more dynamic compared to earlier days.

Puzzles adorn most missions, often accessed via a new physic capability called Deepsight which pulls in invisible objects like platforms or statues. Sometimes it reveals new pathways or runes one must shoot to progress through an area. There’s swords that open locks, portals that zip between areas, mirrors that transport Guardians into the unknown and symbol combinations used to proceed through certain doors.

These parallel with more robust combat requirements, as Witch Queen is the most mechanics heavy offering in Destiny history. It’s a campaign leaning more towards dungeon or raid qualities, like solving riddles on the fly or methodically targeting menacing opponents. Yet they don’t act as an encumbrance. It’s a welcome addition to a formula that’s been working well for years, working to keep it fresh and change up gameplay from its usual, sometimes predictable, cadence.

And, similar to the original game, there’s a weekly rotation of story missions. Not only that, all Witch Queen missions are now replayable via an in-game selection. This level of accessibility and repeatability fits perfectly with Destiny’s ongoing nature. Pick up and play, at one’s leisure or when preparing for a higher level challenge.

When not delving into a story quest, there’s side objectives, reworked activity playlists and Throne World exploration that can easily distract and help level up the odd piece of gear lagging behind. Especially helpful when going for that juicy Legendary story completion. Within the new area, the rogue Hive Ghost named Fynch is the point of contact complete with his own reputation system.

Scattered across the Throne World are the usual cooperative activities like Patrol missions and Public Events, the latest being an escort situation reminiscent of Overwatch. It features three new Lost Sectors. There’s also plenty hidden under the surface, a reason to return and poke around corners. Deepsight points will reveal secrets or timed chests. Altar of Reflection is the name of a quick side quest. Because of Fynch’s reputation rank, every single action is working towards a goal.

Witch Queen offers two additional strikes, Destiny’s classic three-person fireteam missions. Birthplace of the Vile tasks Guardians with fighting Scorn in the underground Dark City, while The Lightblade asks players to hop on a ferry then traverse deadly swamps in order to retrieve a relic guarded by a familiar foe. Then there’s Wellspring as a separate match-made activity where six Guardians battle together in the Throne World, capturing plates and burning down bosses.

There’s another new area I haven’t mentioned, that’s the Enclave which is Ikora Ray’s base on Mars which is back from the vault apparently. This houses the Relic crafting area plus an Evidence Board that provides post-game content, returning to areas from the campaign and digging into the mysteries of this latest Hive threat. Right now there are time-gated portions. It gives a reason for people to come back, after all.

The main enemy factions featured across this new content are Hive, naturally, plus Scorn and certain Cabal rebelling against the command of their Empress Caiatl, shaky ally of humanity’s Vanguard management team. Another element of fighting Hive are Light-bearing moths that boost even the most minor archetypes like Thrall. These nuisances will bounce from enemy to enemy if they aren’t shot out of the sky, adding another layer of depth to Destiny’s firefights.

Adjacent to Witch Queen is Season of the Risen, where Vanguard summons Caiatl for assistance in an ongoing, unsteady alliance. We have been killing members of her military space rhino Cabal race for years now, after all. After completing a couple missions in Witch Queen, the seasonal content begins with our Vanguard convening a war council.

Essentially, we need the Cabal’s “Light-suppressing technology” to wage war against Hive lieutenants and projections of Savathûn. This is done via a new playlist called PsiOps Battlegrounds, which will rotate across different destinations throughout the season. Caiatl offers her Psions, masters of psychological warfare, and what’s called a Synaptic Spear to remove thoughts of Savathûn from their minds. It’s pretty cool from a lore standpoint, plus a good change of pace from more demanding objectives. This part of the season will evolve over time as the storyline moves along, which has been a strength of Destiny in recent months.

It’s been long enough. Time to talk gear, progression and ability tuning.

After all, Destiny is primarily a loot game intertwined with a treadmill of progression. I’ve said this to anyone who would listen since the jump. Starting with this latest expansion, all players begin at Power (or Light for us long-timers) Level of 1350. This goes steadily up to a soft cap of 1500, then a powerful limit of 1550. Beyond that point, there are pinnacle drops from specific endgame type content that will push players to the maximum level of 1560. While there are plenty of no-lifers that grind these levels early in an expansion, primarily to reach an amount that’s fitting for demanding PvE stuff like raids or dungeons, casual playing will allow for a high enough level to see most of the new content.

In one of Bungie’s most genius moves to date, players are awarded a set of 1520 gear after finishing the Legendary Witch Queen campaign. It’s a dual benefit. There’s a major reason to see the newest content plus it helps tremendously to limit the usual power grind. It’s always fun to see the numbers go up. Having that happen while also enjoying a great narrative is the best of all worlds. It eliminates the tedium of lower levels plus offers a major incentive to run main missions. This is probably the team’s smartest decision yet from a time versus reward standpoint.

Combined with power boosts from the seasonal artifact, the aforementioned Synaptic Spear, and infusing gear, this lessens the need to spend every waking hour devising a plan to maximize efficiency. At the time of this writing, I have three characters at or above 1555. I’ve been mostly playing campaign and seasonal content as opposed to grinding legacy sources of powerful gear. Which is ideal.

While leveling, there’s at least 40 new legendary weapons to earn in Witch Queen. Not all of them can be crafted, and certain ones are still locked behind time-gated activities. There’s eight new exotic guns, the highest tier and hyper specialized to encourage different play styles. On the armor side, there’s six new exotic pieces: two for each class. After finishing the Legendary campaign, players can pick one exotic piece of armor. The unfortunate part is the stats on these exotic pieces are lacking, though of course they can be rewarded from playing Lost Sectors in the future.

Supplementing the usual random loot drops is weapon crafting in Witch Queen, which Bungie introduces by having players “shape” an entire new weapon archetype in the Glaive. This is a hybrid melee and ranged weapon with shield capabilities as well, a pretty flexible offering that’s more useful for casual play than endgame content unless it has specific perks.

Within the Enclave on Mars, there’s The Relic which is where guns can be made. Right now, crafting is limited to those from Throne World, Season of the Risen and the upcoming Vow of the Disciple raid. Each weapon requires unlocking a pattern before crafting it, which is gained by finding that weapon in the world then using it for kills to fill up what’s called Deepsight Resonance. Get enough kills, receive the pattern and gain access to shaping that particular gun.

Making or updating guns requires various materials, naturally. Including new ones called Elements, of which there are six, each corresponding to a different set of traits. There’s Resonant Alloy, gained from dismantling items. And the top tier Ascendant Alloy, an exceedingly rare material for exotic crafting, catalysts and the most enhanced traits. Once crafted, a gun is pretty basic to start. It must be ranked up before unlocking most perks, which means a serious time and material investment.

Got all that? I know, there’s a lot to it. It’s the type of system that’s overwhelming at first, introducing all these new items and an entire process of creating or changing weapons. It’s not clear at first how to find patterns. Right now at least it’s limited to weapons from those select sources, more an experiment than an essential aspect of playing Destiny. I’ve made the required glaive and a couple other pieces, relying mostly on drops or infusion for my current arsenal.

That’s partially because philosophically, I’ve been torn on weapon crafting since Bungie revealed its addition during this expansion. The reason why I, and many people, play a loot game is for the chase of getting that perfect drop. Or the allure of seeing what perks combine with others to result in synergies not initially apparent. It’s that rush of seeing an item on the ground, picking it up and discovering if it’s awesome or a dud. Sure, it can result in disappointment. There’s also moments of pure elation. Crafting shifts that towards a creation factor, which can be fun in its own right though doesn’t offer the high of finding that perfect item.

From a quality standpoint in the early going, Witch Queen has some solid gear with a few highlights. Osteo Striga is the exotic submachine gun in vogue right now, available via crafting and complete with poison rounds. Syncopation 53 is my go-to Pulse Rifle, a Suros build with great stability and a smooth firing rate. Likely Suspect is a hard-hitting Fusion Rifle, while Dead Messenger and Parasite exotic grenade launchers offer fun variations on their standard archetypes. The former leaves three trails of elemental fire on the ground while the latter shoots explosive Hive worms. Yes, it’s a worm gun!

Another new twist Bungie applied in Witch Queen is how different weapon manufacturers or activities have intrinsic perks called Origin Traits. These exist in a separate column from others, and apply to all guns of that particular source. Veist Stinger may reload a weapon automatically and Vanguard Vindication recovers health with each kill. Then there’s new perks available solely on the latest gear. Chill Clip applies frozen rounds to the first half of a magazine, while Compulsive Reloader is perfect for me because it increases reload speed when a magazine is nearly full.

It’s way early in the latest meta, so older guns like Glacioclasm, Outbreak Prime or long-time favorite Gjallarhorn are still desirable for higher level content. Yet a lot of new attributes combined with the Origin Traits are going to offer great rolls that the community will discover over time. There’s a ton of great potential, we’re only scratching the surface this first week.

Witch Queen is the current culmination of rich world-building, incredible art direction and spectacular mechanics. It builds on a strong foundation to highlight the game’s foremost features while adding new ones that boost the enjoyment and, most importantly, generously rewards a player’s time.

While Witch Queen doesn’t establish any new ability classes to supplement the four currently available, Bungie did substantially rework the void subclass in what’s dubbed the “Void 3.0” update. The void subclass now has a similar structure to Stasis, a freezing Darkness subclass introduced in 2020’s Beyond Light expansion. There’s a lot more customization now via Aspects and Fragments, plus there’s interoperability even across classes so they share grenades and attributes.

Bungie is laser focused lately on establishing “verbs” within ability setups. For void, akin to gravity magic or shifting spacetime, these fit into one of six areas: suppressing, weakening, vanishing, shielding, restoring health and, most exceptionally, exploding aka volatile. It’s all very familiar, many of these existed before, yet there’s much more in the way of flexibility.

For instance, Hunters can now use suppression grenades, sneak around while invisible then cause targets to explode all at the same time. Titans can generate shields from various sources, including an awesome shield melee throw, and plug in a Fragment that extends duration to become the universe’s most survivable tank. Warlocks can weaken targets then kill them quickly to trigger devour, which effectively steals life away. And most of these verbs can be done by all classes.

What makes Void 3.0 even more useful is pairing it with armor mods. Especially those centered on Elemental Wells, an underutilized category that produces collectable “wells” granting temporary buffs, plus seasonal artifact mods. That latter group lowers the cost of certain traditional mods and introduces high-powered, high-cost ones that synergize with these void verbs. There’s Volatile Flow, which grants explosive rounds to void weapons, then Suppressive Darkness which weakens targets when suppressed.

This subclass reinvigoration is nearly my favorite part of Witch Queen, because of how incredibly fun it is to find coordination both within a subclass and when playing alongside a team of Guardians.

When it comes to the flip side, to my complaints, I’ll always have them. It’s Destiny, after all. Though when focused on strictly Witch Queen and the latest season during its first week, glaring issues are more limited than usual. Shoot, servers even worked from very early so I can’t make jokes about waiting in line on launch day!

As expected, weapon crafting is obtuse and intimidating. Destiny is notorious for having meager tutorials, and this new functionality is no different. It’s the type of thing the community will figure out, partially because Bungie doesn’t do a great job of explaining it. There’s a cacophony of new materials to learn including the various Elements plus precious Ascendant Alloys required for better crafting offerings. I made the mistake of spending one on a side quest because I missed how expensive it was to reshape my glaive.

This might be a bit in the weeds, but moving Orb of Power generation away from individual guns to a helmet mod slot is a painful change. I know why Bungie did it, to encourage other styles of play and possibilities other than those strictly focused on orbs. Charged with Light is much less effective, which is why I’ve shifted to Elemental Wells. So I guess it’s working the way Bungie intended, even if it’s fixing a problem that didn’t exist.

So I’ve mentioned strikes and more cooperative content, what about Gambit and Crucible? Well, these are most certainly not the focus of Witch Queen what with the massive campaign, ability changes and Vow of the Disciple raid in queue. Bungie lightly tweaked the rules and workings of Gambit, it’s still similar at its core. And on the Crucible side the biggest change is two returning maps in Vostok and Eternity. Many players will point out how there haven’t been any new Crucible maps in years. How the modes other than Trials feel stale. These are true, and it’s a disappointment even for players like me who don’t often play competitively.

Moving down the list, Eververse always falls into the category of complaints. This is Destiny’s extensive cosmetic store, which accepts two currencies: Silver, that people can buy, and Bright Dust which is sprinkled while actually playing. The problem is there are items exclusively available for Silver, including an awesome set of Void ornaments starting this expansion. It means those items, right now, can’t actually be earned by playing Destiny. I am fine with Bungie making money. It’s that I don’t like this setup and prefer all items to have a Bright Dust alternative. Even if it’s expensive. Looking cool is a major appeal of any ongoing loot game. Players should be able to earn every cosmetic if they are willing to put in the time. Period.

Then there’s content vaulting. It’s Destiny’s elephant in the room, lurking behind every positive moment like an ominous cloud raining on our parade.

With Witch Queen, the campaign of Forsaken along with its Tangled Shore location enter the vault. They are no longer playable, now maintained in the annals of YouTube and nostalgia of Destiny vets worldwide. Bungie’s explanation surrounds the technical limitations of keeping years old content in a game as massive, or bloated, as this one. It pains me to lose paid content. Yet if it means the game can thrive in the future with amazing campaigns like Witch Queen, I understand the unfortunate tradeoff.

Lastly, there’s still a substantial grind. That avenue to increase one’s level. And boost up factions or individual vendors like the Gunsmith or Throne World rank. The numbers must increase! It’s both painful and blissful. Frustrating and fruitful. This is a situation reserved for the most hardcore, of course. It’s also essential for anyone wishing to delve into top tier content like raids, Nightfall strikes or “Master” difficulty missions. I wouldn’t call it as much a complaint as a necessary evil, one that Destiny fans tend to even enjoy.

Destiny as a franchise is a roller coaster, in more ways than one. It has its ups and downs, both from a content standpoint plus the cadence of new updates. There’s peaks and valleys, excitement and lulls.

These last few months have been slower, mainly because of Bungie delaying Witch Queen from its original time-frame into this new year. I believe that has made all the difference, resulting in the strongest offering in perhaps the development studio’s entire existence going back to the original Destiny and even Halo. Right now is the height of the team’s creative vision.

The best part is Destiny can be a lot of different things, and Witch Queen reflects that sentiment especially when talking cooperative play. There’s the chill casual parts, like running the base campaign or hanging in the Throne World looking for alien heads to pop. More advanced players will tune their armaments, seek out exotic quests and face off against Savathûn and her goons in that tougher Legendary setting.

Even the second and third time around, the campaign holds up. Each mission has memorable moments. Whenever a Lucent Brood activates the same super ability I’ve used countless times, I feel my muscles tense and I sit up, locked and ready. There’s fun platforming puzzles and serious boss battles. That’s not to mention the lore ramifications across the entire Destiny universe as the final cinematic sets up what we will Witness in 2023’s Lightfall expansion.

I wrote this review before the Vow of the Disciple raid launches in early March. Plus there’s more seasonal content, quests and events unfolding in Season of the Risen over the next three months. If Witch Queen is an indication of the future, both immediate and longer term, then Bungie is steering the spaceship in the right direction. Narrative points are hitting. Mechanics are expanding. Structure is getting more intricate. And, surprisingly, I believe a newcomer can jump in right now and get their time and money’s worth with this update.

Even as it stands right at launch, Witch Queen surpasses both Taken King and Forsaken to achieve the best campaign in Destiny history. It presents a perfect intersection of appeal for long-time, lapsed and new players. There’s something here for everyone. It’s an access point for the curious, an ideal framework for a returning audience plus an excellent continuation of Destiny’s content model and power grind for diehards.

I can’t recommend it enough, whether as a standalone campaign experience, a loot-filled time to chat with friends or push towards serious prep ahead of challenges to come in the future. Quite plainly, Witch Queen is Bungie at the pinnacle of its game.

Title: Destiny 2: The Witch Queen

Release Date: February 22, 2022

Developer: Bungie

Publisher: Bungie

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

Final Score: 9/10

Recommendation: Witch Queen is an absolute must-play for anyone even remotely interested in Destiny, first-person shooters or cooperative multiplayer experiences. It’s the ideal time to try, and there’s something for everyone whether casual or core.

Sources: Bungie.net, Screenshots from Xbox Series X.

-Dom

PlayStation 5 & Pokémon Legends Arceus Headline Third Straight Month of Declines for U.S. Games Industry Sales

In the first monthly sales report for the U.S. games industry in 2022, Sony’s PlayStation 5 and Nintendo’s Pokémon Legends Arceus headlined a month slightly down from the record result of early last year. It was the third straight month of year-on-year declines, after 1% in December and 10% during November before that.

Industry tracking firm The NPD Group shared its January 2022 U.S. games industry spending report, announcing how total consumer spend dipped a modest 2% to $4.68 billion. Compare that to last year’s all-time high of $4.8 billion. While hardware as a category saw double-digit growth even amidst a challenging supply situation, it wasn’t enough to outpace slower content and peripheral spending.

It seems there was a post-holiday hangover within two of those three major categories.

For Video Game Content, weaker mobile spending and fewer new games led to a single-digit monthly decline. Even a major Pokémon launch and PC re-releases of popular franchises like Monster Hunter and God of War couldn’t push the software category over the edge. This also signaled potentially lower ongoing spending on microtransactions (MTX) and additional content.

Video Game Hardware repeated as big gainer from a growth standpoint, boosting more than 20% versus January 2021’s amount. Sony’s PlayStation 5 took center stage, as it often must strictly based on its size, leading January’s console market by both units sold and dollars generated. This is the first time since September 2021 where Nintendo Switch didn’t lead on units sold. In fact, Microsoft’s Xbox Series X|S beat out Switch for second place.

Now, the key is this early in a generation, especially this one because of chip shortages, this is nearly all dictated by supply in the market. Like an animal going into hibernation, Nintendo stocked up during the holidays. It’s clear PlayStation, and to a lesser extend Xbox, recovered in the early part of the new year.

Last month, Hardware actually boasted the single best dollar spending during a January month in over a decade. And there’s a chance it could have been even higher, if only there was enough inventory!

“Hardware availability is still constrained, so we don’t know how high ‘high’ actually is when it comes to the console market,” NPD Group’s Mat Piscatella told GameDaily. “Several factors continue to impact the market that are difficult to predict. Things are still a bit chaotic. But when new titles are released, and when new hardware is available the market is responding positively.”

Note that year-to-date figures currently match the monthly, so January’s report features a smaller data set than usual. Everyone knows I like putting numbers in perspective. There won’t be any annual or trailing 12-month figures until maybe next month.

That said, let’s look into the numbers we do have.

United States Games Industry Sales (January 2nd, 2022 – January 29th, 2022)

In total, consumers spent close to $4.7 billion during the first month of 2022 which is 2% lower than last year. It’s still a quite good result, it just shows a reversion towards more normalized spending after long periods of stay-at-home restrictions. People are certainly still stimulating the games industry economy, mostly by buying new consoles, just not as much as they were during a record time in early 2021.

Within the broadest segment of Video Game Content, which accounts for mobile, software and related sources, sales hit $4.2 billion or 88% of the total. That dollar figure is 4% lower than last year, when it was $4.26 billion. (I’m not sure if that was a record at the time, it’s a possibility.)

The bellwether sub-segment here is mobile, which saw a decline of almost 7% during January. No dollar amount was given. This is expected weakening after the incredible growth of the last two years. It’s showing somewhat of a return to the “before times,” which seem so very far away. Main sales contributors during the month include Candy Crush Saga, Roblox, Coin Master, Genshin Impact plus Garena Free Fire.

Before diving into traditional software, I wanted to point out a relevant statistic. This is via The NPD Group’s Q4 2021 Games Market Dynamics report.

“Downloadable content (DLC), microtransactions and subscriptions accounted for just shy of 60% of non-mobile video game content spending in the U.S. in 2021. In 2016 this figure was well under half.” Piscatella shared on Twitter. What this implies is that 6 out of every 10 dollars spent in the U.S. within the Content category is ongoing purchasing rather than new premium releases. So often we focus on the latest and greatest, it’s actually the old that’s defining Content movement!

It’s still fun to call out new titles, of course. This was a quieter January than usual, bucking the recent trend of publishers kicking off the season with a leading release.

The early year’s flagship game launch was Pokémon Legends Arceus on Nintendo Switch. Even without digital sales, because Nintendo doesn’t report them. Other than its launch month spending not being a record, there’s not much historical context available in the report. So I looked back to see where each Pokémon Switch game ranked during their respective first months. Warning: It’s confusing.

During 2018, Let’s Go Pikachu and Let’s Go Eevee released during a much more hectic schedule in November and took 5th and 6th place, respectively. At the time, Let’s Go Pickachu recorded the second best launch month in series history for a single release behind only 2000’s Pokémon Stadium.

Sword & Shield debuted a year later in November 2019, with the former hitting #3 and latter at #5. Not only that, its double-pack was smack in the middle at fourth place. Combined together, Sword & Shield had the best U.S. launch ever for Pokémon, above 2016’s Sun & Moon.

Then there was Brilliant Diamond & Shining Pearl which launched only two months ago in November 2021 when it started at third place. It also landed just outside the Top 10 in this January, at #11. All this to say that it’s difficult to compare historically, and sounds like Sword & Shield still maintain the crown on Switch.

Back to last month, Activision Blizzard’s Call of Duty: Vanguard fell to number two ahead of its second season. Monster Hunter Rise from Capcom bounced way back to third place after a very lucrative PC launch.

Similarly, God of War (2018) received the PC boost as well with its fifth place finish, up from 146th in December. Yes, it does in fact pay to release games on multiple platforms! Elsewhere in the Sony camp, Marvel’s Spider-Man Miles Morales was up next in sixth place. With this latest finish, it’s now third in lifetime spending within Sony-published titles behind only 2018’s Marvel’s Spider-Man and the aforementioned God of War (2018).

The only new game to chart besides Pokémon Legends Arceus was Ubisoft’s Tom Clancy’s Rainbow Six Extraction, sneaking into the Top 10 at number nine. As a reminder, this first-person tactical co-op shooter also launched into Xbox Game Pass. The NPD Group didn’t provide any historical context for Rainbow Six titles. Tom Clancy’s Rainbow Six Siege started at #7 back in December 2015, competing against the year’s biggest hitters during a holiday season. So it sounds like Extraction didn’t fare as well.

In terms of other storylines, I’d say the absence of Grand Theft Auto The Trilogy – The Definitive Edition is worth noting though not without good reason. Its physical release was mid-December, except for Nintendo Switch which is actually out today. Just like how NBA 2K could be higher plus Grand Theft Auto and Red Dead Redemption no longer appear much on the charts, I attribute this to Take-Two Interactive not sharing any digital data. It’s difficult to infer anything in this context.

Here’s a look at the Top 20 premium software sellers for January 2022.

Top-Selling Games of January 2022, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. Pokémon Legends Arceus*
  2. Call of Duty: Vanguard
  3. Monster Hunter Rise
  4. Madden NFL 22
  5. God of War (2018)
  6. Marvel’s Spider-Man Miles Morales
  7. FIFA 22
  8. Mario Kart 8*
  9. Tom Clancy’s Rainbow Six Extraction
  10. Battlefield 2042
  11. Pokémon Brilliant Diamond & Shining Pearl*
  12. Far Cry 6
  13. Minecraft
  14. NBA 2K22*
  15. Mario Party Superstars*
  16. Animal Crossing: New Horizons*
  17. Forza Horizon 5
  18. Halo Infinite
  19. Super Smash Bros. Ultimate*
  20. Call of Duty: Black Ops Cold War

Turning to Video Game Hardware, this segment experienced the only increase during January 2022. And it was a solid increase. Monthly consumer spend on consoles rose 22% to $390 million, compared to under $320 million last year. That’s the best January hardware dollar sales since $447 million earned in January 2009.

Naturally on the growth trajectory, because of where the industry is at from a generational standpoint. Nintendo Switch is still going strong five years later, plus PlayStation 5 and Xbox Series X|S are only in their 15th month on market.

Though I was genuinely surprised by the rankings last month.

Namely how PlayStation 5 took home the top spot by both units and dollar sales. A definite upset! The last time it led was before the holidays, in September. It’s not that I don’t believe in Sony’s latest console, it’s just I underestimated how many they could produce. (I wasn’t the only one.)

In fairness, it’s difficult to gauge where supply shifts from month to month right now. I expected Nintendo Switch to keep inventories going post holiday, and Sony’s recent report of slowing PlayStation 5 global shipments had me nervous.

Another unexpected outcome was Xbox Series X|S being runner-up. Which means Switch is third place. Maybe Nintendo shipped too many in the holiday quarter so Switch could pass Wii lifetime numbers, huh?

It seems there’s a sign of life within next generation console supply. Or perhaps it’s temporary? That’s the big question! Whichever company has its suppliers making more consoles, that’s the one winning here in the domestic report. Demand is certainly here, and consistently.

Our final segment is Video Game Accessories, which saw the most substantial decline during last month’s announcement.

Buyer spending declined 15% on Accessories to $185 million. It was $218 million in January 2021, which was a record January at the time. Not only that, all of its sub-segments established all-time January month highs this time last year. It’s the true definition of a difficult comparable. A decline like this is exacerbated by a strong prior period.

Leading the pack within accessories was Microsoft’s Xbox Elite Series 2 Wireless Controller as the best-seller. No doubt bolstered by that second place hardware finish for the Xbox Series X|S, plus I’d wager demand on the PC side. A hefty price tag doesn’t hurt, since these are based on dollars generated.

That’s the end of a quickie U.S. games industry sales article, focused strictly on the single month of January rather than expanding to 12-month figures. My apologies!

There’s still plenty to learn from an early year report like this. Content spending is ever so slightly down, which I see more as a movement impacted by mobile weakness than anything alarming on the premium side. If anything, a major Nintendo release like Pokémon props it up. Combine that with the large ongoing sales portion with DLC, add-on content and the like, the software category is holding pace.

February 2022 is a much busier time for releases, two months before many fiscal year ends. Dying Light 2 Stay Human already has 3 million players according to Techland. PlayStation exclusive Horizon Forbidden West and FromSoftware’s Elden Ring are launching as two of the most-anticipated games of the year.

I expect significant carry-on sales during the second month of Pokémon Legends Arceus. There’s also a good chance Destiny 2 pops back onto the list after launching its big Witch Queen expansion. I’m leaning towards Pokémon retaining the top spot, yet both Dying Light 2 Stay Human and Horizon Forbidden West have a legitimate chance. These three should make up the Top 3.

Hardware will be supply and supply will be Hardware, a segment at the mercy of chip manufacturers and parts suppliers in this inflationary situation. Piscatella seems to agree.

“We continue to be in a supply constrained environment,” Piscatella said to GameDaily. “The question is when that might change, and predictions are all over the place on that one. Is it later this year? Will it be 2023? Who knows? We’ve got a ways to go before anyone should expect to walk into a store and pick up a console of their choice off the shelf.”

Well, I will try to predict as best I can. I’m leaning towards PlayStation 5 repeating, then Nintendo Switch in second and Xbox Series X|S in third by a slim margin. It’s anyone’s guess!

Please check out Piscatella’s detailed thread here on Twitter and give it a like. See you next time in February, it’s sure to be a wild one.

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

Comparisons are year-over-year unless otherwise noted.

Sources: GameDaily.biz, The NPD Group, Tom’s Guide (Image Credit).

-Dom

Review: The Unbalanced Sifu Demands Perfection & That’s Precisely One of its Many Pitfalls

In kung fu and many forms of martial arts, balance is key. It’s really the same with video games. Without the delicate give and take, experiences can be exceedingly frustrating and outright obnoxious. Sifu is one such game that has promising mechanics yet suffers from major balancing problems that prove to be its ultimate downfall.

It’s supremely challenging and much less often rewarding. Overall there’s definite highlights, when a combat sequence works it’s a thing of beauty. Though a predictable narrative, humdrum visuals and uneven systems detract from the experience. Sifu is alright at what it does. It just doesn’t do too much.

Developer Sloclap’s sophomore effort after Absolver is most certainly not a game for everyone. Or really most people. Especially not anyone without quick reflexes, dexterous digits and a whole lot of patience and time. The intention, better or worse, is mastery of its levels, systems, encounters and boss fights to complete the ultimate run towards vengeance.

Sifu is openly, unabashedly, a classic revenge tale. There’s very little else to its story, barring quaint mysteries and underlying motivations. Set in a solitary, nondescript Chinese city, it’s way more third-person brawler than flashy action game. It’s all single player. A highly demanding solo dance. An in-your-face combat riddle where one wrong move results in failure.

In a clever twist, the first section is played as the primary antagonist named Yang. Rushing a house with four henchman, Yang murders the father of our playable character who I don’t think has a name so I’ll just call them the protagonist. The player can choose to be a male or female, then steps out of the shadows as a child with false bravery. One of Yang’s lieutenants, the machete-wielding mute Fajar, attempts to kill the playable character yet we resurrect because of a special talisman called The Pendant.

This Pendant is special. Although not quite enough to grant true immortality. The player starts at age twenty. Whenever their health runs out, The Pendant can resurrect. Here’s the rub. It tallies up a Death Counter after each revival, taking that number and adding to the current age. If one has died five times in the same area at age 30, suddenly they are 35. Once hitting the maximum age “group” of 70, the next death is literally a run killer.

If it sounds punishing, that’s because it is. Player damage output increases with age, since older is wiser, though health declines as the body ages which is represented visually with wrinkles and grayer hair. The entire thing is risk-reward. Deaths add up very quickly. Luckily there’s ways to remove them, via beating certain enemies or using experience points for a fresh start. The Death Counter also carries over between levels. This system has so much potential, yet combined with the mechanical challenge, is painful.

The structure of Sifu is the player begins a quest for vengeance in a safe-house preparing to take on five targets: The Botanist, The Fighter, The Artist, The CEO and then Yang as The Leader. Each target has its own dedicated level, really a series of fights that culminate in a boss encounter. The protagonist has a detective board where they map out collected intelligence, forming connections between characters as certain keys will unlock rooms in other levels. There’s also a training area plus a literal Skill Tree, the latter of which is pretty amazing.

Vengeance commences by infiltrating The Squats, a drug-infested slum inhabited by goons and junkies. It stinks of death and flies. Later areas include The Club, a classic martial arts backdrop with neon lights and blaring subwoofers, then The Museum which is the most striking from a visual standpoint. These environments range in quality, from stylish to sterile. There’s an inconsistency in the artwork that takes away from that martial arts movie feel. They are more practical, notably to facilitate frantic group battles, than pleasing to the eye.

The game is its combat and combat is the game. Its camera presses super tight behind the shoulder, limiting one’s view to force tactical movement. Benjamin Culos, a Pak Mei kung fu master, consulted on this choreography of carnage and Sifu prides itself on authenticity. To a fault. Clearly its fighting mechanics were the bulk of development effort, because it lacks so much in other areas. Boasting over 150 attacks, the face buttons control punches and combos while the shoulder buttons offer dodges, blocks and parries. Advanced combinations can be unlocked, such as roundhouse kicks and, my personal favorite, the ability to trip opponents then ground pound.

It’s snappy and crunchy, highlighted by audio claps and DualSense vibrations, yet inputs aren’t nearly as responsive as I’d like. Especially dodging and parrying. It’s continuous pressure. From a mechanical standpoint, there’s really not much else to Sifu besides challenging, constant combat. Which can be grating when it’s this punishing, even soul-draining when inputs don’t do exactly what they should.

Every person in the game has health and structure gauges. Landing hits and successful blocks will eventually break an enemy’s structure, opening them up to a powerful finishing move. These contextual take-down animations are on point, plus gain back some much-needed health. It’s the most satisfying part of combat plus offers a brief respite for the fingers. Of course, there’s a counter. Enemies can execute random reversals and in the process get more powerful like they are going super saiyan. While incredibly annoying, I understand the rationale. Otherwise it’s effectively a win button.

Sifu also features a focus meter, which builds mainly during dodging. Pressing the left trigger will slow down time and offer certain special moves with names like Eye Strike or Strong Sweep. Leveraging these opportunities is absolutely crucial. Later focus abilities will stagger and even apply mortal wounds.

If it’s not obvious already, there’s a steep learning curve combining all of these capabilities together to be fluid and effective. Especially trying to execute multi-hit combos. Some require pausing, others simultaneous button presses. Luckily they are all in the menu for easy access, a smart offering from the development team. It’s also hard to know when the timing is right for parrying or nailing the more advanced combos. Sifu is going for a realistic feel as a choice at the risk of cutting off a portion of its potential player base.

Button mashing is not an option. There is no easy path to victory other than the most basic of one-on-one duels. A major skill gap exists between regular enemies compared to crowds and bosses. Every one of its five bosses has multiple phases, the second will transform an arena to showcase the game’s best environment work. It’s impossible to proceed without intense pattern recognition. It’s brutal when that just isn’t clicking and there’s really nothing else to do.

I admit there can be magic in the “ah ha” moment of recognizing a series of fast-paced moves, executing a defense then fortuitously counter-attacking. It’s just how long the game takes to teach that results in frustration all along the way. And it’s not soulslike in nature, where there’s interesting tidbits to see along the way, elaborate locales to explore or mysterious lore to find. It’s one fight to the next. It’s unseasoned meat and plain potatoes.

One tool that helps drastically is a small arsenal of available weapons. Starting after the first level, these are absolutely critical. Game-changing. There’s throwables like bottles and bricks, capable of stunning or creating distance. Machetes, bo staffs, pipes and even broomsticks are placed strategically and necessary for survival. The downside, naturally, is enemies will pick them up and become even more devastating. Luckily they can be disarmed. Except for bosses, most of which have a unique weapon and corresponding move sets.

All the usual enemy archetypes are represented in Sifu, from common fodder and towering Juggernauts to strongmen with haymakers and, my ultimate nemesis, the lightning-quick female assassins. Certain attacks can’t be blocked, indicated by an orange glow. Juggernauts will grab the protagonist or stomp them to bits. There’s mini-bosses falling in these categories and more which drop access codes or keys upon defeat. Sifu’s most devastating encounters, both for the protagonist and my spirit, throw all these types at once while mixing in weapons and throwables for good measure. Tight spaces prove to be the most annoying of all.

Set in a solitary, nondescript Chinese city, it’s way more third-person brawler than flashy action game. It’s all single player. A highly demanding solo dance. An in-your-face combat riddle where one wrong move results in failure.

The best way to describe its core challenge is solving rapid-fire puzzles in real-time. Akin to turning up the gravity in Tetris except with martial arts instead of falling blocks. It escalates quickly, oftentimes for the worse and at the player’s expense.

An irony of Sifu is how long it takes to master its mechanics yet it’s not anywhere near the type of game I’d want to marathon. The repetition of redoing levels with the same enemy spawns, their predictable gimmicks and dialogue that rarely changes, gets tedious over longer sessions.

One way it alleviates that monotony is offering alternate paths and shortcuts, a true godsend from the designers. Certain items up can open areas in other levels. Having a key in one’s inventory will even open a room in the same level when replaying it, offering opportunities to skip areas. These sorts of shortcuts are absolutely essential to actually completing the revenge cycle. It avoids entire fights, with the tradeoff being less experience both in-game and building up the player’s skills.

As I mentioned before, there’s a literal Skill Tree that works based on experience points (XP). It provides rewards for completing encounters or levels, accumulating throughout a given playthru but lost upon reset or that game over. There’s a few different times to unlock skills: at the safe-house, during mid-level shrines or when given the chance to resurrect after a death. These skills are always first unlocked temporarily. Then there’s the option to invest more XP towards permanently unlocking them for five times the price of the initial cost. Basically it’s a way to “bank” XP across and maintain skills for future attempts.

As with many parts of Sifu, this is defined by its risk-reward profile. There’s a level score that builds with a multiplier while fighting, almost like a fighting game or Devil May Cry however it’s nowhere near fully baked. Certain unlocks at shrines, often after difficult areas, are locked behind having a high score. Such buffs only apply during that particular run, such as more focus or structure from dodging. There’s also age-based upgrades at these shrines that phase out as the player gets older, from increasing one’s structure gauge to gaining more health during finishers. I found myself tending towards weapon durability and health regeneration, and away from using XP on these one-time benefits.

Within these various upgrade systems reveals another place where the balancing is plain off. Skills are mightily expensive, and it’s not very clear where to invest. Everything can, and will, be gone in one lousy sequence of combat losses. There’s no way to regain it other than to try, try again.

When it comes to narrative, this is the weakest part of Sifu. The storytelling “method” is via minor context clues and environmental pick-ups as opposed to cut scenes or meaningful conversations. There’s dialogue “choices” that didn’t seem to matter at all. hardly any character development or major twists and turns. It presents a small bit of intrigue around Yang and his motivations, centering on “miracle healing” and how he runs a sanctuary. This ties into The Pendant. The real narrative arc is fighting literally everyone the player sees until finding Yang.

Collectibles fill out the detective board and draw lines between characters, yet it’s all very surface level. The only part in Sifu with any real depth is its combat. Every boss victory opens a new area of the hub area, but they are lifeless. There’s no collectibles or lore items. It doesn’t fill out backstory or even hint at anything. A remarkable waste of opportunity. As is the ending, anticlimactic and unsatisfying. I only learned there’s a hidden reason to play after finishing by reading PlayStation trophies. The storytelling itself and general presentation are quite lackluster.

Sloclap does apply select nice touches when it comes to certain details, even if much of the broader game is lacking in meaningful themes and points. The protagonist will comment on taking alternate routes when they already have the key. Boss environments reflect certain personality traits of that particular foe. The visual flair of The Museum with its flowing exhibits and grandiose installations is a good break from the lower quality other levels.

If there’s a standout other than combat complexity, it’s audio, sound and music elements. Sounds are crunchy and nasty. Just how it should be in a brawler setting where everything is close quarters. Major hits echo through the DualSense speaker, a fantastic decision. The original soundtrack from Howie Lee escalates the hype, especially during hallway sequences or dance floor skirmishes. The more chaotic the scene, the better the music.

On the other hand, character barks are comical. In a hilariously bad way. And there are times of quiet while fighting, which always felt oddly out of place when it happened. Plus, I wish there was an option for Chinese dialogue with English subtitles right from the start. The English vocals in a Chinese setting kill any sort of immersion. The voice acting is pretty mediocre. There will be an update sometime after launch to include Chinese voice over, a vast improvement over characters speaking English, sometimes even with random British accents.

Sifu unfortunately lacks the sort of options and accessibility features that I’d like to see in modern games, even indies. The best is how it offers custom input remapping, total flexibility on that front. Beyond that, it’s limited to the usual camera and subtitle opacity basics. It doesn’t offer text size changes. I didn’t see colorblind features. It’s also a third-person game where there’s no ability to swap the camera shoulder location, which would be useful.

The natural progression here is to dive into its lack of difficulty options. While I always prefer different levels of difficulty, I respect designer intent and understand the desire to make things challenging. These days even without an “easy” mode, there are ways to make it more fun and forgiving. Time dilation. Clear prompts. Auto combos. Button holding instead of repeatedly tapping. Sifu is an exceedingly difficult title that could be more approachable even without traditional difficulty assignments.

I’m happy to report that performance was near perfect. I had minimal complaints, which is reassuring since this is a crucial part of any game that operates at these speeds. Sifu runs at 60 frames-per-second on PlayStation 5 and PlayStation 4, similar to PC of course, and even outputs 4K resolution on PlayStation 5 which is where I played it.

From a mechanical standpoint, there’s really not much else to Sifu besides challenging, constant combat. Which can be grating when it’s this punishing, even soul-draining when inputs don’t do exactly what they should.

Sifu is one of those games where I can point to exactly what it does well. It’s a straightforward beat-em-up with arguably too much adrenaline and not much besides its never-ending fighting. The promise of becoming a deadly kung fu artist in this stylish, slick setting is there. The execution isn’t.

I started to sour in the second chapter, within its nightclub region when working my way towards facing the game’s second boss. I didn’t have any real skills unlocked because I hit a roadblock. I racked up a serious amount of deaths, kept losing XP and had to reset multiple times in order to progress. I found it unforgiving and brutally difficult in the way that makes the player feel bad rather than badass. Every death felt like a personal affront.

It was clear what I had to do: Keep playing the same part of Sifu to get better. Even if I didn’t really want to at that moment. I couldn’t even distract myself with collectibles, side activities or audio logs. There was nothing else but facing the same enemies in a row and getting used to what the game wanted from me.

As one would imagine, I turned on the game pretty quickly. Its aging mechanic and game over function feel a relic of inferior arcade game models designed to eat quarters. Except here it just eats precious time, and my will to persevere.

Then, my critique was solidified in one of the final areas. There’s a gauntlet of the game’s toughest enemies right before a major encounter. Like a mob boss throwing all available underlings at the player so that they are too tired to care if they live or die. This technique is a cheap one to me, and kills any momentum it built until then.

Sifu wishes it made the player feel like Keanu Reeves in the first Matrix film. Duking it out with Morpheus as he slowly and surely realizes he knows kung fu. It ends up feeling like Chris Farley’s character in Beverly Hills Ninja, stumbling and bumbling while ultimately pretending to have a clue.

There’s similar critiques here from me for many run-based games. Except Sifu is much less dynamic, riveting or intriguing from a narrative standpoint and has much less going for it. It’s a revenge tale straight out of a B-movie, in its most distilled form without much substance to back it up.

I swear, I do like individual elements. There are moments of genius, of exhilarating flow state gameplay. Then it’s another slog through multiple deaths just to find out what’s behind the next door when I already know. I wanted more out of Sifu. I wish it was better. And sure, I eventually beat the game. But it had beaten me long before that.

Title: Sifu

Release Date: February 8, 2022

Developer: Sloclap

Publisher: Sloclap

Platforms: PlayStation 5, PlayStation 4, PC.

Final Score: 6.5/10

Recommendation: Maybe to those itching for a no-nonsense, level-based revenge tale where the martial arts is unforgiving, the time investment is too draining and the resolution doesn’t pay off. There’s enjoyment in Sifu, mainly for masochists.

Disclaimer: Advanced review code provided by the publisher.

Sources: Publisher Press Kit, Certain Screenshots from PlayStation 5.

-Dom

Nintendo Switch Ships Over 100 Million Lifetime Units, Passing Wii & PlayStation During Nintendo’s Best Holiday Quarter Since 2009

While it didn’t announce any blockbuster deals or major investments like certain industry peers, Nintendo did just have a heck of a holiday.

That’s based on its fiscal third quarter announcement shared today out of Japan, where it passed a major milestone for its Switch hybrid console plus achieved its best Q3 results in over a decade.

A couple quick reminders. Nintendo’s filing is for the nine months between April and December 2021. Though I’ll dig into quarterly and trailing annual figures later in this piece. Then there’s the difference between sell-in versus sell-thru metrics. The former is shipment to retailers, while the latter is how many consumers ended up buying. Most of the talk here is shipments, unless specifically noted.

With those ground rules established, the big headline is how Nintendo Switch has officially passed 100 million units sold-in lifetime, now totaling 103.54 million. Fewer than five years after launch, this figure already exceeds the lifetime sales of both Nintendo Wii at 101.63 million and the 102.49 million of the original Sony PlayStation. Which is above all but the most bullish of analyst predictions, including mine. As upbeat as I was on Switch in 2017, I didn’t think it could attain Wii status.

Well, it has. Which means Switch is now Nintendo’s best-selling home console of all time. (Even if it’s also a handheld. Is that cheating?)

Considering this environment, moving 10.67 million Switch in the holiday quarter is an accomplishment and reflects demand for the latest OLED iteration. Still, Nintendo did revise its annual hardware forecast downward a bit. The company now expects 23 million in the year ending March 2022, off from 24 million last quarter which was already lower than original guidance of 25.5 million. Certainly reflects where production is at from an input availability and pricing angle. This guidance implies just over 4 million will ship in this current quarter.

On the first party software side, Nintendo had three major software releases with early success especially in a historical context.

Starting in early October, Metroid Dread has.. rocketed to 2.74 million units in just under three months. This is an incredible mark within the franchise, traditionally more a critical darling than commercial mover. For context, that’s almost equivalent to lifetime sales of the best-selling Metroid game in 2002’s Metroid Prime, at last count hit 2.84 million. It’s already above the original, which debuted on Nintendo Entertainment System in 1986 and accumulated 2.73 million lifetime.

Infamous party game and relationship killer Mario Party Superstars released in late October, reaching 5.34 million copies in its debut quarter. That’s slightly above Super Mario Party, which started at 5.3 million back in 2018. Prior to that, 2012’s mainline Mario Party 9 on Nintendo Wii hit 2.24 million in a couple quarters.

The biggest seller of Nintendo’s holiday period was, predictably, Pokémon Brilliant Diamond & Shining Pearl. The latest remake in the popular monster catching series amassed shipments of 13.97 million since November, immediately becoming the 9th best-selling title on Switch to date. Its launch quarter fell between two other Pokémon titles on Switch: Sword & Shield at 16.06 million in 2019 and the 10 million of 2018’s Let’s Go Pikachu & Eevee.

For a quick financial overview, Nintendo reported single-digit sales and operating income declines since the highs of last year’s same nine-month time frame. Net sales in the last three quarters dipped 6% to $11.89 billion, while operating profit lowered 9% to $4.26 billion. For perspective, that first number is actually the third best Q3 reported in company history from a sales standpoint.

Alongside this, the company upped annual net sales guidance 3% and operating profit by almost 8% for the year ending March 2022. That positivity reflects this stellar holiday quarter plus a more optimistic software forecast, both of which I’ll recap soon.

“Switch is just in the middle of its lifecycle and the momentum going into this year is good,” said Nintendo President Shuntaro Furukawa on the firm’s conference call. “The Switch is ready to break a pattern of our past consoles that saw momentum weakening in their sixth year on the market and grow further.”

I’ve got a lot to cover. Get cozy and read on!

Based on Nintendo’s reporting of the year so far, we can back into quarterly figures. During the three months ending December 2021, revenue reached $6.27 billion or 10% higher than prior year. Quarterly operating profit grew 10% as well, to $2.27 billion. One of the charts above shows these tracked over time. This was the best quarterly sales since $6.3 billion in 2009. Operating profit hasn’t been this high since the $2.66 billion back in 2008. We’re talking exceptional figures during the holiday period, all the more impressive given input scarcity on the hardware side.

The other two charts above show trailing 12-months i.e. the year ending in December going back in time. As of this latest update, Nintendo’s annual revenue closed in on $15.1 billion. That’s down less than a percent. Taking expenses into account, operating profit for the last year declined 3% to $5.33 billion. This is really more indicative of strength earlier during 2020 when Animal Crossing: New Horizons was everywhere rather than recent weakness.

In terms of regional split, Nintendo’s figures showed 43% from The Americas which was up from 41%. Europe accounted for almost 27% and Japan contributed 21%, versus last year when these were 26% and 22% respectively.

On the product category front, Hardware contributed more than half of sales at 53% of the total. Retail software was up next at 29%, while digital software comprised 9% of the pie. Subscriptions and Add-on Content then Mobile and IP Licensing filled in the remainder, at 7% and 2% respectively. Really this shows the continued importance of retail, both hardware and software, for Nintendo in particular as digital remains a much lower portion of its business than certain peers.

Speaking of, now that all of the “big three” have reported this season, it’s time for a final comparison. This time around, we’re also throwing in Tencent in recognition of its massive significance as the world’s largest gaming firm by revenue. As a reminder, Nintendo’s latest annual sales totaled $15 billion. This is very close to Microsoft at $16.28 billion, which was a record for Xbox. (Note this increases drastically when accounting for a $8.8 billion contribution from the pending Activision Blizzard acquisition.) Sony’s PlayStation division generated $26.66 billion and Tencent’s latest number, albeit back from September, was the highest at $27.3 billion. And it will be higher soon. Essentially, Nintendo’s annual sales are still the lowest of these however it’s actually much more profitable than PlayStation at least. Unfortunately, Microsoft doesn’t disclose profit from gaming.

Focusing on Nintendo’s major hardware segment, shipments were down 21% in the nine months ending December to 18.95 million. Within that, 11.79 million were base Switch while 3.17 million were Switch Lite. The new Switch OLED Model racked up 3.99 million sales in its debut quarter. Compare that to base model in 2017 of 2.74 million and Switch Lite’s 2 million in 2019. Technically both the original and Lite launched later in the quarter, so it’s not a perfect alignment. What this does indicate is the impact of newer iterations on ongoing sales, and buyers doubling up with multiple Switches per household.

As shown in one of the gallery slides above, Nintendo also shared statistics around sell-thru to consumers with Nintendo Switch moving past 100 million to date. Which means most of its shipments are going to buyers. This fiscal year is shaping up to be its second best ever, down only from the highs of last year during more restrictive quarantines.

“The outlook for semiconductors and other components has remained uncertain since the start of this fiscal year and distribution delays remain unresolved, so production and logistics continue to be impacted.” said Furukawa. “But even though product shortages in North America have continued, particularly since Black Friday, total global sell-through for April through December reached its second-highest level ever.”

This consistency of hardware purchasing is reflected in Nintendo Switch being the best-selling console of 2021 in the United States, United Kingdom and Japan according to local industry tracking firms. That’s during a battle with the initial year of a new console lineup for its competitors in Xbox and PlayStation, which are certainly feeling the sting of supply plus have higher price points on average.

Flipping over to Switch software, which made up that 38% of Nintendo’s dollar sales, the company said units shipped in the nine months ending December grew 2% since last year to 179.29 million. 85.41 million of that happened in the holiday quarter alone. Lifetime, software for Switch is at 766.41 million. Comments from the earnings call imply around half of software sales right now are catalog titles from prior periods.

From a shipment standpoint, there’s currently 29 “million-selling” software titles on Switch during this current fiscal year. That’s the number of titles shipping more than a million copies in this time frame. 22 of those are Nintendo first party, while 7 are from third party publishers. This time last year had the same number overall at 29, with 20 of them from Nintendo and the rest by external teams.

At the top end, Mario Kart 8 Deluxe is still the best-selling Switch title ever by a wide margin and driving those catalog stats. It actually just had its best holiday, shipping 4.61 million units towards a staggering lifetime figure of 43.35 million. This is a game that originally launched on Wii U almost eight years ago! With this sort of momentum, and still being bundled with Switch, unfortunately I don’t see a new Mario Kart until the next full-blown Nintendo console.

Animal Crossing: New Horizons maintains second place for Switch best-sellers at 37.62 million. That’s literally more than every prior Animal Crossing game has done combined. Nintendo said this includes 10 million units in Japan alone, beating out the 6.81 million units of the classic Super Mario Bros. to take the crown as the country’s top-selling video game to date.

Rounding out the Top 3 is The Legend of Zelda: Breath of the Wild selling 4.37 million this past holiday to pass 28.5 million. Another mover and shaker included Ring Fit Adventure stepping firmly into the Top 10 on Switch at 13.53 million units, flexing its muscle by shipping 1.32 million in the quarter.

Luigi’s Mansion 3 has now surpassed the 11 million threshold, settling at 11.04 million. Both September’s WarioWare: Get it Together! and Big Brain Academy: Brain vs Brain, a remake released in December, passed the million mark at 1.24 million and 1.28 million respectively. Finally, June’s Game Builder Garage snuck onto the million sellers list at 1.01 million to date.

As for copies getting to consumers, Nintendo said October to December 2021 was the single best quarter for first party global sell-thru since 2017’s Switch launch. Putting it plainly, both new titles like Pokémon and evergreen experiences like Mario Kart and Animal Crossing tag-teamed Switch’s best software holiday in its five years on market. Sounds like a happy holiday for the publisher and its employees, indeed.

Before I go, I’ll clean up some additional flavor text and chat about the near-term future in the context of Nintendo’s latest filing.

Within software, Nintendo said digital sales were effectively flat year-over-year at roughly $230 million during the first nine months of this fiscal year. Digital accounted for just over 40% of software sales for its dedicated platforms. For the holiday quarter, digital actually rose 31% to $100 million. This was attributed to an increase in downloadable versions of its titles, naturally!

One area Nintendo doesn’t share a lot is engagement statistics, skewing more towards the traditional unit sales metric. That said, it’s intriguing to see the figure of 98 million “annual playing users” for Switch in the calendar year 2021. That’s up from 80 million in 2020. Executives said the goal is to expand past 100 million users in the upcoming fiscal year.

This represents the number of users who play Switch software at least once during the calendar year, using data from Nintendo accounts. It’s certainly trending alongside the hardware trajectory, though it does show that the people buying them are at least turning them on. I’d like to know how many hours they are playing, and even further what the average revenue is per user. (Wishful thinking.)

There was minimal mention of its Nintendo Switch Online service, which at last count had 32 million paying subscribers. While it didn’t reveal a new user base figure, executives did say the following alluding to some sort of digital record:

“Sales grew steadily for Nintendo Switch Online, which launched a new paid membership service last October, add-on content like Animal Crossing: New Horizons Happy Home Paradise and download-only titles, with digital sales for the same period reaching a record quarterly high.”

Peeking ahead into this January to March 2022 quarter, the final period of Nintendo’s fiscal year, the company is upbeat on its dollar sales, profitability and software momentum as it increased guidance for all of these.

The most aggressive forecast raise was a 10% upward revision for Switch software unit sales. In stark contrast to its lower hardware forecast, Nintendo thinks Switch unit sales will end at 220 million for the year, up from 200 million.

Part of that is Pokémon Legends Arceus, which launched in late January to solid critical acclaim. And, even more importantly for the bottom line, early commercial success. Even if that’s based on somewhat vague language from executives on the conference call. I mean, it’s a brand new Pokémon game with a fresh take on the formula. It’s going to do extremely well. The only wildcard is how it’s a single title as opposed to the dual release model used often by the franchise.

Rounding out the fiscal year for first party will be Kirby and the Forgotten Land in late March. While it won’t be the commercial juggernaut of Nintendo’s more popular brands, I could see it following Animal Crossing: New Horizons as a breakout seller in its respective series. Just not nearly to the magnitude of New Horizons, of course.

Nintendo’s only area of bearish guidance was Switch hardware, down that 4% to 23 million units. My prior estimate was 25 million, which I’m formally reducing to 23.5 million after monitoring the impact of both part availability and input cost. I really do see the firm beating on all counts here, especially operating profit above $5 billion which I believe would be its second best annual figure outside of last year’s high.

When asked about industry consolidation and potential acquisitions, Nintendo gave the answer one would expect given that it’s not nearly as aggressive as competitors. “Our brand was built upon products crafted with dedication by our employees,” said Furukawa. “And having a large number of people who don’t possess Nintendo DNA in our group would not be a plus.”

Intriguingly, management’s reply to a query around the Metaverse left open the possibility for Nintendo to be more forward-thinking than usual. According to a report collated by VGC, executives have interest and see potential however wonder what kind of “joy” Nintendo can provide.

Well, I’d say Nintendo’s solid holiday quarter results are indicative of where it’s at within the broader industry in how there’s uncertainty around hardware that’s being offset by growth in software and legacy titles. Generating its best fiscal Q3 in a number of years while facing headwinds from supply proves the resilience of its formula combining memorable experiences and high-quality IP.

What Nintendo lacks in online capability and ongoing service it makes up for with games that never go out of style and appeal to a huge audience of all ages. Throw in content here and there for Animal Crossing. Toss Mario Kart in every bundle. Launch collections of Mario Party and WarioWare mini-games. Remix the same Pokémon that people have always loved. Sprinkle in the fastest-selling Metroid of all time.

This, along with innovative hardware that supports multiple ways to play especially on the go and prompts people to purchase more than one version, is a recipe for Nintendo’s incredible success during the Switch generation. Which, apparently, is far from over.

What stood out for you in Nintendo’s latest report? Anything I might have missed? Any questions on the numbers? Give me a shout here or social media.

Until next time, thanks very much for reading and be safe all!

Note: Comparisons are year-over-year unless otherwise mentioned. Exchange rate is based on reported conversion: US $1 to ¥111.06.

Sources: Company Investor Relations Website, Famitsu, GSD, The NPD Group, Video Game Chronicle.

-Dom

PlayStation 5 Shipments Reach 17.3 Million as Sony Reports Best Third Quarter PlayStation Operating Profit Ever & Lowers Hardware Forecast

In what’s continuing as the busiest year in gaming news ever, Sony is back after announcing its $3.6 billion acquisition of Bungie to this time reporting its fiscal year 2021 Q3 earnings results.

An eventful one, it was.

In addition to providing updated figures on PlayStation hardware, software and engagement, Sony’s results showed that the gaming division recorded its second best quarter ever for top-line sales. Quarterly revenue exceeded $7.15 billion, which is second only to last year’s $7.77 billion.

Even further, operating profit rose 15% to $817 million in PlayStation’s single best operating profit for a third fiscal quarter. This is the coveted holiday period between October and December, which is most significant for consumer tech companies because of peak demand in various parts of the world. This record profit result and strong growth happened against a high comparable last year around the launch of PlayStation 5.

Right now, and in the immediate future, we know it’s availability dictating a lot of where the business is going. So these results are wholly impressive given this environment, which is continuously supply-constrained and facing delays on the software front. Behind the resilience is add-on content, an expansion in PlayStation Plus memberships plus a shift towards digital software.

On the hardware side, lifetime PlayStation 5 console shipments since launch are now 17.3 million after moving 3.9 million in this latest quarter. When compared to PlayStation 4, the brand’s fastest-selling console, that was at 20.2 million by this point. Its second holiday quarter was a strong 6.4 million, which is 2.5 million above PlayStation 5. It’s clear the current generation is starting to lag in a historical sense, facing various outward pressures amidst the semi-conductor crisis.

Oh, I guess this also means PlayStation 5 has officially passed the 13.56 million units that Nintendo’s Wii U reached across its lifetime. Add it to the list.

Because of supply concerns, Sony reduced its full year annual hardware guidance for PlayStation 5 to 11.5 million units. Previously it expected in-line with PlayStation 4 at upwards of 14.8 million. This implies only 2 million more PlayStation 5’s shipped in this quarter ending March 2022, which would also be below PlayStation 4’s 2.3 million in the corresponding period.

“Limitations on the supply of components are expected to continue going forward, but we are continuing to exert every effort to meet the strong demand for PlayStation 5,” said Sony’s Chief Financial Officer (CFO) Hiroki Totoki.

Here’s a full breakdown of the overall results plus PlayStation business segment, then the various supplementary statistics Sony shared. There’s even more color around the Bungie acquisition later in the article. Numbers, charts and more below!

For the company as a whole, both sales and profit metrics experienced double-digit gains and set new all-time highs for a fiscal third quarter.

Revenue increased 13% to $26.66 billion, while operating profit rose an impressive 32% to nearly $4.1 billion. Major growth in Pictures and Imaging & Sensing Solutions business segments boosted these historic results.

Drilling into Game & Network Services (G&NS), aka the PlayStation business, this is still Sony’s leading category by revenue at nearly twice as much as the next contributor in Financial Services. The PlayStation brand accounts for 27% of Sony’s sales and 20% of aggregate profit.

I’ve already mentioned the $7.15 billion in revenue, down 8% since last year, and $817 million in operating income during third quarter for G&NS. Slides from the company’s presentation cite declines in hardware, peripherals, first and third party software overtaking the impact of exchange rates on the sales side. Alternatively, lower expenses and better margins for PlayStation 5 spurred profit growth.

Those that have read my recap articles know what’s coming. Let’s frame these quarterly figures in context. There’s charts in the above gallery displaying trailing 12-month time frames for each of these.

Over the last four fiscal quarters, which is also calendar year 2021, PlayStation sits at almost exactly $24 billion in revenue. While down from the all-time high of $24.67 billion three months ago, it’s still the second best on record. Not too shabby. For operating profit, the most recent annual number is $2.56 billion and a slight increase over last quarter’s $2.45 billion.

The dip in trailing revenue makes sense, given the slowdown in hardware units and nearly every sub-category within the gaming business. The profitability bounce-back is more noteworthy, in my opinion. It reflects that amidst slowing production of hardware, there’s lower costs bumping up margins giving good impact to PlayStation’s bottom line.

The last of my charts in the gallery shows every product category within the gaming unit and where it’s been in recent quarters. My main observations are it’s the best time for digital software, the second best quarter for add-on content and even hardware, the latter two previously set during holiday 2020. There’s also the slow and steady upward trajectory of Network Services, proving that online play and the related software perks of PlayStation plus are keeping players in the ecosystem. The rumors around a potential combination of services into code-name “PlayStation Spartacus” would bolster this particular slice. I expect this trend-line to continue.

Now that Sony has reported, let’s quickly compare to industry peers. Pulled from my recent article on Microsoft’s results, here’s how it plays out. Sony’s trailing 12-month revenue of $24 billion still comes in below that of Tencent’s gaming businesses, generating $27.3 billion as of September 2021. Microsoft’s record $16.28 billion from annual Xbox sales is up next. If combined with Activision Blizzard, it would be $25.33 billion and actually could exceed Sony’s latest figure. Nintendo reports tomorrow, so I anticipate this figure to rise, however its latest for now is $14.7 billion. Keep in mind there’s impact from exchange rates of course plus Tencent won’t report until next month, though I like to show how each stacks up on a relative basis.

Beyond the fancy financials, Sony provided various updates on players, software and services within its PlayStation ecosystem.

Its online service PlayStation Plus tallied up 48 million subscribers as of December, slightly higher than the 47.4 million at end of 2020. On the flip side, Monthly Active Users (MAUs) across all PlayStation Network declined to 111 million from 114 million last holiday.

This implies that while paid users for PlayStation Plus are consistent, people are spending less time playing. No doubt impacted by last year being the launch of a brand new console, higher availability of vaccines recently plus more open economies. Gaming is still a go-to entertainment, of course. It’s just that folks are spending time on different media.

On the conference call, Totoki echoed this sentiment on engagement. “Total gameplay time of PlayStation users in December 2021 was 20% lower than the same month of the previous year, which was immediately after the release of the PlayStation 5,” he said. “But gameplay time increased approximately 7% from December 2019. For a quarter in which there were only a few major titles released, we think this was solid performance.”

I tend to agree, primarily because Sony is monetizing its base even as they spent less time gaming.

Full-game software sales also showed a downward trend year-on-year, declining to 92.7 million from the recent high of 104.2 million in fiscal 2020 Q3. First party title unit sales were 11.3 million, or 12% of the total, compared to 19 million and 18% of the total prior year. Partially reflective of the limited holiday lineup on the exclusive side, while major seller Marvel’s Spider-Man: Miles Morales hit market last year.

Consistent with digital software being its highest ever from a product category revenue standpoint, the split of digital full game sales is increasing. 62% of all software was digital download, compared to 53% last year. All three quarters this fiscal year have been at or above this same 62% figure. Basically, between 6 to 7 out of every 10 software units sold are now downloaded.

Because of known limitations on the PlayStation 5 production side, Sony is still chugging along manufacturing PlayStation 4 consoles. It shipped 200K of its prior generation box during the quarter ending December, resulting in lifetime sales of 116.9 million. At this rate, it might someday pass Game Boy’s 118.69 million. In a few years, hah.

Projecting into the future, it’s a challenging environment for the PlayStation from a hardware perspective though there are plenty of opportunities on the software and services side.

We’ve talked to death about high demand, low supply. My economics professors would be so proud!

Production and inventories aren’t getting better, as clearly displayed by PlayStation 5’s vast under-performance during a holiday quarter when unit sales have historically been much higher. Consistent with Sony’s formal guidance reduction, I’m lowering my estimate for PlayStation 5 shipments in the year ending this March. Last quarter, I was ambitious at 15 million. Even then I said confidence was waning. Now, I’m down to 12 million which would mean January to March has to reach 2.5 million.

Intriguingly, Sony lowered its fiscal year revenue outlook for the G&NS segment to $24 billion from $25.5 billion yet decided to boost its operating profit target from $2.86 billion to over $3 billion. This is a telling turn of events, signaling further cost reductions that will outpace lower dollar sales for PlayStation. Manufacturing less consoles does have the benefit of lower expenses, I suppose!

The last fiscal quarter ending next month will ramp up on the first party software side, as both Horizon Forbidden West and Gran Turismo 7 are slated to launch. There’s also third party console exclusives like Sifu and now Ghostwire Tokyo, announced today for March 25th. While releases like this won’t drive console sales as much as in the past because of inventories, it will benefit software sales, notably that digital content segment, plus player time investment.

Finally on the topic of acquisitions, Sony’s executives naturally did not comment much when asked about Microsoft’s industry-changing $68.7 billion purchase of Activision Blizzard and if they had plans to snatch up any large publishers.

They did, of course, talk about their major purchase in Bungie. While I didn’t dedicate an entire piece to it, I did want to mention Sony providing additional flavor around the deal, the resulting relationship and how it fits with the future of PlayStation as a brand.

Bungie, creators of Halo and makers of my beloved Destiny, was one of the largest private independent studios in the industry at over 900 employees. To me the main reason to me why it made a deal with Sony, as opposed to a traditional publisher or a software and cloud company like Microsoft, is the trans-media potential of crossover with film and television plus the opportunity to remain mostly independent.

On Sony’s side of the bargain, the upside is huge. One glaring weakness in PlayStation’s portfolio is a lack of live service and ongoing game expertise, which is crucial in 2022 going forward. Bungie provides that, both from a business model and technology standpoint. Along these lines, execs claims global revenue in the games industry from live services have been growing at an annualized rate of 15% since 2014 or the year Destiny launched.

“We intend to utilize these strengths when developing game IP at the PlayStation studios as we expand into the live game services area,” Totoki pointed out. “Through close collaboration between Bungie and the PlayStation Studios, we aim to launch more than 10 diverse Service Games by the fiscal year ending March 31, 2026.”

Alongside this movement towards games-as-a-service, Totoki also discussed the mid-term plan to grow first party software dollar sales to double its current amount by fiscal 2025. Between this internal acceleration of exclusive IP, pushing more into ongoing games with the help of Bungie’s knowledge plus the potential for a Xbox Game Pass-like service in PlayStation Spartacus, Sony’s gaming approach is looking more balanced than it’s ever been.

It does seem to be a good compromise and united.. destiny for both companies.

That’s a wrap on a mostly successful quarter for Sony, especially as a whole with those record results, even considering the lag in PlayStation 5 shipments and downward revision for certain items in the PlayStation division. Other areas are picking up the slack, proven by the record profitability exhibited within its gaming business. While its forecast is lighter for hardware and gaming sales, that operating income guidance increase is reassuring.

Did anything stand out to you in the report? What was the most surprising part? Do you agree with my forecast for hardware or are you more conservative like Sony’s management team? Feel free to drop a comment here or on social media.

Be safe and well. Thanks for reading!

Note: Comparisons are year-over-year unless otherwise mentioned. Exchange rate is based on the reported conversion: US $1 to ¥113.7.

Sources: Company Investor Relations Websites, LEGDAY on Twitter (Image Credit).

-Dom