Switch & Software Sales Milestones Produce Nintendo’s Most Profitable Year Ever

It’s no secret that Nintendo’s Switch hybrid platform was a game-changer for the company after its difficult Wii U era. The hybrid console’s success and its corresponding software sales, especially for those that the Japanese gaming giant has published, have lifted it to the best revenue in over a decade plus record profits during its fiscal year ending March 2021.

These are staggering results. Fitting for Nintendo, I’m jumping right into it.

Previously I covered Sony and Microsoft’s gaming business results this quarter, with annual sales for those two competitors at $24 billion and $15 billion respectively. Nintendo’s latest fiscal result falls between them, generating approximately $16 billion overall. That’s an increase of 34% since last year and, most importantly, the highest yearly sales since the roughly $16.7 billion over a decade ago in 2010.

When it comes to profitability, the report is even more impressive. Operating profit boosted a staggering 82%, reaching just above $5.8 billion for the last 12 months. This is the best ever result for a company that’s been around longer than any of us. It’s also the second best growth rate since 2010, behind only 2018 at the start of the Switch generational cycle.

These figures blew past the company’s targets by a substantial margin, even if those estimates were conservative. During its presentation, Nintendo executives attributed it to a strong hardware presence especially in Australia and Asia, a shift in the ratio of digital sales plus three dozen million-sellers on Switch this past year. It’s attracting new customers and encouraging owners to snag an additional console. 20% of Switch purchases are second devices. And that’s only going to grow.

When I break it down more closely myself, the near or at record figures come from a combination of various underlying factors. Main one being a Switch hardware push, since the console represents more than half of the company’s business. Also, the launch of third party exclusive Monster Hunter Rise, continued momentum of nearly all first party software especially Mario Kart 8 Deluxe and Animal Crossing: New Horizons plus impact from the end of the company’s 35th anniversary celebration of the Mario franchise. Particularly on Super Mario 3D All-Stars as it went off market simultaneously (and conspicuously) at the same time the fiscal year ended.

Now, the best part. To dig into the nitty gritty!

Profit is off the charts, top-line revenue is the best in years, Switch hardware is selling at a rate that not even the most optimistic predicted and Nintendo’s software figures are keeping pace in the current unpredictable environment.

After shipping 4.72 million Switch consoles in the January to March window, sales to date reached a major milestone in terms of broader industry comparisons. With a lifetime hardware figure of 84.59 million shipped, it’s now passed both Sony’s PlayStation Portable, upwards of 82 million, in addition to the 81.51 million of Nintendo’s own Game Boy Advance family of devices. And depending on which source, it’s close to if not above the beloved Xbox 360 from Microsoft.

(I say that because there are slightly different reports of Xbox 360 sales since launch in 2005. It’s anywhere between 84 million and 85.5 million since Microsoft stopped reporting exact hardware statistics. Suffice to say, Switch may have passed it by now when taking into consideration the month since March end.)

Based on the latest quarterly numbers, Switch units reached 28.83 million for this past fiscal year. Its best to date. This is a increase of 37% year-on-year, plus more than 2 million units above guidance. Which Nintendo had even raised. Twice.

Within the console segment, 20.32 million of those shipments were the standard Switch model. Switch Lite contributed 8.51 million. Both of these are up the same 37%, consistent with the platform’s aggregate growth.

Now at the start of this past fiscal year, Nintendo’s target for Switch hardware was unbelievably low. Even more so that it was issued right during the early part of the global pandemic and Animal Crossing: New Horizon’s meteoric early prosperity. Which is somewhat understandable. Companies tend to be conservative, that way it’s easier to beat guidance. It’s still no less impressive, proving there’s considerable demand still at this middle portion of its cycle. Nintendo doesn’t seem as affected by the global chip shortage that’s plaguing other manufacturers.

This sort of momentum is consistent with domestic results, and The Americas make up nearly 42% of Nintendo’s overall sales so it’s notable to compare. As I wrote in April, Switch has been the leading console by unit sales in the United States for 28 straight months. Over 2 years. Sure, most of this was during the last legs of PlayStation 4 and Xbox One. Which is why 2017 was the absolute perfect time for Nintendo to launch, supported over the past few years by the quality of its exclusives plus ongoing third party support, notably within the independent development space.

Expanding to a historical context, Switch is on a faster pace than the Nintendo Wii, launched way back in 2006, and 2013’s PlayStation 4 when measured by unit shipments. Both of which are ubiquitous within gaming, the former being Nintendo’s top-selling home console and latter as the second best-selling home platform ever. Switch strength has especially accelerated since this time in 2020, a period of notable growth for obvious seasons. I included a thorough chart from friend of the site Daniel Ahmad, Analyst at Niko Partners, which illustrates launch-aligned growth for many of the major console releases in history.

Lastly on the hardware side, out of its updated 84.59 million lifetime shipment figure reported today, 81 million have been sold through to consumers. Console sell-through during the quarter ending March alone surpassed the record high of the same period last year. When Animal Crossing: New Horizons launched!

Moving over to game performance, Nintendo Switch software unit sales topped off at 230.88 million for the fiscal year alone. This includes first and third party, retail and digital, remakes and ports, any and all individual games sold that works on the platform. That’s a jump of just under 37%, nearly perfectly in tune with hardware growth. This shows folks aren’t only buying up Switches with increased demand, it reveals that they are buying multiple copies of its most popular games. A trend we’ve seen for this platform since it started.

For the fourth quarter alone, Switch recorded 54.78 million software units shipped which is up from 45.59 million. All of this contributed to lifetime Switch software rising a whopping 65% year-on-year, to 587.12 million. It’s hard to even consider that type of figure in context.

Individual title growth stemmed a lot from newer games in the Mario franchise in addition to the most green of evergreen from Nintendo, then a particularly monstrous seller from Capcom.

Compilation Super Mario 3D All-Stars crossed the 9 million unit sold-in threshold since launch last September, no doubt boosted by Nintendo pulling it from stores in what I still consider a questionable decision for the sake of preservation. Subsequently, Super Mario 3D World + Bowser’s Fury launched this past February during Nintendo’s final fiscal quarter. Since then, it’s shipped 5.59 million and sold 4 million of that thru to buyers. For perspective, the original game on Wii U has only moved 5.87 million copies across its entire time on market.

In one of the more ridiculous numbers when stepping back, Mario Kart 8 Deluxe sold 10.62 million units last year alone. We’re talking an increase of 43%! This is for a game whose first version started on Wii U back in 2014. It’s the highest-selling Switch title to date and probably will always be, currently standing at 35.39 million copies worldwide. That’s over 5 million more than The Witcher 3: Wild Hunt or The Elder Scrolls V: Skyrim, the latter of which is frequently parodied for being available on nearly every platform in existence.

Just behind Mario Kart 8 Deluxe on the Switch top seller list, Animal Crossing: New Horizons shipped a cold 20.85 million in the fiscal year despite a dearth of seasonal updates lately. Even when some people are unhappy with it, plenty of others are still purchasing it. This brings its lifetime total to 32.63 million.

Rounding out the Top 3 Switch platform sellers from Nintendo is fighting game (yes, it’s true) Super Smash Bros. Ultimate, moving exactly 5 million units across the last 12 months. A bit more pedestrian in its growth at 27% for the title that hit market in late 2018. 23.84 million is its count to date.

In other updates, New Super Mario Bros. U Deluxe and Ring Fit Adventure both crossed the 10 million copies milestone in March. That second one is really incredible, considering it’s a dedicated fitness game at a higher price tag because of its included accessory. Even a title like Clubhouse Games: 51 Worldwide Classics is selling, hitting 3.14 million this past quarter.

Honestly, I could list even more and they would mostly show the same trend. Sometimes even I have to stop and take stock of these figures. Rattling them off is like binge-watching classic shows like Breaking Bad or The Sopranos or trying to speed-run an Assassin’s Creed or Grand Theft Auto in a single sitting. It’s impossible to appreciate the bigger picture without taking a breather and really thinking about how many copies these games are selling right now on the platform, not to mention the impact it has on the popularity of those published by third parties.

Out of the 36 million-sellers this year alone, 22 were published by Nintendo. The remaining 14 were third parties and “grew steadily.” This includes Monster Hunter Rise, a major growth driver towards Nintendo’s record results. Capcom’s brand new Switch exclusive in the long-standing franchise reached 4 million copies shipped within *three days* of its March 26 release. It moved a million more by early April, making it already the 3rd best-selling Monster Hunter title of all time. Notable here is the companies collaborated on a special edition Switch model, no doubt a factor during this time right before the fiscal year finished up.

While it’s not as prominent a segment as other companies in the industry, Nintendo experienced a marked rise in digital sales recently. In terms of revenue, digital generated $3.1 billion or around 20% of the overall business. That’s up from under $1.9 billion. Note this measure is a combination of full game downloads, online services and add-on content. Within dedicated video game platform sales by dollar amount, 43% is digital which is up from 34% previously. When talking unit sales, digital is now 47% compared to 41% and 42% for the two years prior, respectively. When charting quarterly trends, it’s clearly pushed up by ample demand last summer during the height of quarantine times.

Whew! Got all that?

The hybrid console’s success and its corresponding software sales, especially for those that the Japanese gaming giant has published, have lifted it to the best revenue in over a decade plus record profits during its fiscal year ending March 2021.

Certain smaller items that didn’t take up much in the fiscal report were its online service, mobile, IP licensing and playing cards businesses.

The company didn’t share an updated figure on Nintendo Switch Online paid subscribers. The last we heard was 26 million during its Corporate Management Briefing over six months ago in September 2020. All executives said this time was that “in addition to the growth in sales of indie titles and other download-only software without corresponding physical versions, Nintendo Switch Online sales were also steady” and that the team was investing in this part of the business, though didn’t specify exactly how much or to what extent.

Mobile and IP related sales grew 11% year-on-year, though still represent a small portion of the total business. $519 million to be clear. Within this, sales from smart devices were constant so it was actually bolstered by royalty income gains. This is not an encouraging sign when it comes to mobile expansion. Still, Nintendo said the Pikmin mobile collaboration with Niantic, the same team behind Pokémon Go, is scheduled for a global launch in back half of 2021. So I expect smart phone contribution will raise at least slightly in the near future.

On its conference call in Japan, executives expanded on various areas within the financial report. Based on notes from those listening, the most curious comment to me is how the company saw record research and development spending recently. For the year, this reached roughly $850 million and it will increase a bit into next year. The reason is partly because of investment in the successor to Switch. To my knowledge, this is the first mention of such a follow-up platform.

Intriguing..

Anyways, looking ahead, Nintendo also provided initial estimates for various parts for fiscal year ending March 2022.

In terms of overall revenue, it expects a decline of 9% to around $14.6 billion. Operating profit target is 22% lower, starting at $4.55 billion. When it comes to Switch, Nintendo estimates shipping 25.5 million consoles and 190 million software units in the upcoming 12 month span. Both of these would be declines as well.

So, why the pessimism?

“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,” executives said. “But this could be impacted by obstacles to the procurement of parts, including the increase in global demand for semiconductor components. There also remains the risk associated with COVID-19, which is difficult to predict.”

To me, this is prudent given the circumstances. Uncertainty around component availability and the dubious nature of selling products in a pandemic once they are manufactured. However, I think it’s too conservative and will be raised at least once. Probably during the mid-way point of the year. Especially given the rumor as recently as last week from Nikkei that annual Switch production could be upwards of 30 million based on sources from part suppliers.

My estimate for Switch hardware is much closer to that figure than Nintendo’s. I’m assuming right now 28 to 29 million plus well over 210 million software copies. I think there’s a good chance it could be the best year to date for the hybrid console, even five years later.

I was way upbeat at the start of the generation. Though not as much to predict this sort of trajectory. And we still don’t know if the rumors around a New Nintendo Super Switch Pro XL model in the near future are true! Either way, Switch will certainly pass Wii lifetime sales sometime in the next 12 months in what will be a momentous occasion.

Nintendo’s software pipeline definitely looks lighter right now. But isn’t that always the case? It’s probably because the biggest releases either aren’t dated yet or haven’t even been revealed. New Pokémon Snap came out in late April. Miitopia, Game Builder Garage and Mario Golf Super Rush are slated for the early summer months. The Legend of Zelda: Skyward Sword HD is July, then there’s the trifecta of Pokémon games between “late 2021” and “early 2022” listed in its report.

There’s also Splatoon 3 and Square Enix’s Project Triangle Strategy (Temporary Title) currently slated for a broad date of 2022. The heavier hitters that could push sales above that guidance are Bayonetta 3, Metroid Prime 4 and of course the sequel to The Legend of Zelda: Breath of the Wild. Even if the last one is the only one of the three out this fiscal year, which I believe it will be, it’s going to be a special one for the company, its shareholders and audience alike.

Indie support will naturally continue, with Switch being a most appealing platform due to its flexibility and on-the-go use case. Nintendo has shown more of a willingness for partnerships as well even with its most coveted brands, so could this be the year where we hear another collaboration with say Ubisoft? The most significant partnership would be anything with Microsoft when it comes to Xbox Game Pass or a Cloud offering. Talk about an industry-shaking event.

Overall, I can’t say much more about its financial year than I already have. It was record-breaking and wholly impressive 12 months, especially how hardware is penetrating to the point where 1 in 5 households currently buying a Switch already have one. Profit is off the charts, top-line revenue is the best in years, Switch hardware is selling at a rate that not even the most optimistic predicted and Nintendo’s software figures are keeping pace in the current unpredictable environment. Nintendo remains a company true to itself in quality, output and setting trends rather than chasing them. It’s the type of strategy that continues to, quite literally, pay off.

Thanks for reading!

Note: Exchange rate used for Japanese Yen to U.S. Dollar is as of today. 0.0091 JPY to 1 USD.

Sources: Capcom, Cláudio Luiz Castro (Photo Credit), Daniel Ahmad (Niko Partners), Guinness World Records, Manny Moreno (Photo Credit), Nikkei, Nintendo Investor Relations, NPD Group.

-Dom

Review: Returnal’s Fresh Take on a Familiar Loop is Mostly a Great Time

Modern run-based games owe a great deal to arcade experiences of yesteryear. They are both traditionally frantic in their gameplay, feature engaging progression mechanics that may go away upon death and can be unapologetically difficult. Returnal is all of these things, flipping a modern spin on the best parts while also retaining others that should be kept in the past.

Housemarque is a Finland-based studio known for its arcade pedigree with beloved titles like Resogun and Nex Machina among others, though this is the first time it’s really flexed muscles in the purely third-person, bigger budget shooter genre. The team smartly borrows traditional roguelike elements where each session is unique in terms of weapons and power-ups, the player loses certain progress when they die and the game world transforms itself so that no playthru looks the same.

What’s crucial here is that winning should feel triumphant. That moment needs to be special. Worth all the work. Returnal does exactly that, its most glorious success.

The best of the genre also pitch a riveting narrative within this general framework. Returnal uses this setup for a fascinating if occasionally disjointed time-loop story where its character knows she is caught within, and uses the horror of self-realization to perfect effect. The player controls Selene Vassos, a Scout for fictional space exploration company Astra Corporation who crash lands on a planet called Atropos. Selene sets out initially to find a signal, learning in the process that she’s trapped within this seemingly never-ending cycle. It’s lonely, and harrowing. She somehow stumbles upon her own house within this world, then upon entering the view shifts to first-person in mini playable sections where the bulk of story is introduced via exploration.

Returnal is single-handedly one of the most engaging time-loop setups in the history of games, a psychological sci-fi thriller that uses infinite spawning on a distant planet expertly while slowly revealing how its story is much closer to home than it first presents. There’s three distinct acts across six biomes, the last of which unveils the “true” ending. While its presentation is staggered and jarring at times, that’s the nature of time-bending tales. I ended up adoring it. This works because its collectibles and cut scenes intrigue all along the way, making it feel like the player is learning about this unfortunate predicament and her own history at the same time as Selene.

Foreign world Atropos features the aforementioned playable areas and a scattering of history from a race Selene dubs Sentients. She lands in the Overgrown Ruins, a dreary yet gorgeous rain forest contrasted with bright flora and angry fauna. The game’s first act starts in this space, moves thru the Crimson Wastes desert then an imposing alien Derelict Citadel. Once the player beats the boss in a particular sub-segment, Returnal allows teleporting to the next biome which makes for better flexibility in subsequent tries. It’s a bit of much-needed restraint in an otherwise punishing ordeal.

Once the first act is complete, players transition to almost a remixed version of the first three locales. For instance, the fourth biome is called the Echoing Ruins, bearing a stark resemblance to the very first crash landing site. What’s great is the second act is essentially its own run entirely, as the player respawns here in the Echoing Ruins as opposed to way back at the beginning. This makes endgame tries feel manageable, significantly less dejecting when one fails.

An aspect I’d like to specifically praise in Returnal is its genius map implementation. It’s best-in-class, displaying a three dimensional mini-map on the heads up display then expanding to a more isometric view full of markers and indicators. It clearly marks optional routes, fast travel spots and certain types such as boss locations or particularly challenging fights. An incredible feature that I now wish to see in every game.

What’s crucial here is that winning should feel triumphant. That moment needs to be special. Worth all the work. Returnal does exactly that, its most glorious success.

In terms of mechanics and arsenal, it’s a familiar feel for quick, over-the-shoulder shooters. Selene begins each run with a low level pistol, then can replace that with guns that spawn from enemies or found in chests. Each has its own set of potential perks, Leech Rounds being my ideal because they can heal, plus an alternate fire mode that could be a number of different attacks. Grenade, powerful sniper shot, proximity mine etc. Weapon variety is solid, ranging from traditional automatic carbine to close-range shotgun that spouts goo all over the place. There’s rocket and grenade launches then more unique designs like the Dreadbound that has projectiles launching then returning automatically to the magazine. The aesthetic here is alien engineering fused with biological organisms, making for peculiar and effective feature sets.

Speaking of, Returnal boasts one of the most satisfying interactions: active reload. Gears of War popularized this tactic, whereby hitting a button within a certain window allows for instant reloading. It’s a little clumsier here, with the right trigger acting as the same button to shoot and reload. Plus the player can’t manually load their weapon, it only happens automatically when ammo runs out. This combined with alternate fire makes for rewarding engagements.

Movement is as important as ever in a game like this, and Returnal is clear that the player is invulnerable when dashing. I coined my mantra “Always Be Dashing,” spamming the circle button to shoot across arenas to avoid enemy fire. Part of the way thru, both a sword unlock and grappling hook really open up fighting and traversal capabilities plus promote more efficient exploration. There’s nothing quite like dodging, launching across a map using a grappling point and slicing an enemy into a spectacular burst of colorful bits.

Progression systems are layered in Returnal, which is what really determines run variety and impacts how much one is able to achieve in a given try. Items, unlocks and upgrades come in a multitude of forms, most tending to disappear when a run is over. Permanent unlocks include key story items, weapon traits, world collectibles plus a powerful material called Ether that cleanses chests or can be used to activate a machine that allows one respawn per area.

The player loses almost everything else upon failure. The currency called Obelites, required for fabrication for various items. Valuable Artifacts that offer benefits, such as increased weapon power or reduced alternate fire cooldown. A favorite of mine is the Phantom Limb, which offers a 10% chance to boost health when killing an enemy.

Its most unique mid-run upgrades are Parasites, squishy insects that visually attach to Selene’s suit. These provide one associated benefit then an associated debuff that makes play more difficult. These trade-offs can make or break a given segment. Does one gain better drops from enemies at the expense of melee damage? What about increasing health repair when long falls cause damage?

Returnal’s Malfunction system also prompts important choices. Chests or pick-up with a glowing purple aura are “Malignant” or “Spoiled,” which mean there’s a chance the player can become infected upon grabbing them. The probability of infection is clearly displayed, from Moderate to Very High. Malfunctions cause some detriment until a criterion is satisfied. These can be brutal, and the player may suffer from more than one at once. Decreased weapon output, lower health, taking damage when collecting items and many more can outright ruin even the best of attempts.

These along with mini-progression systems like Weapon Proficiency, basically increasing weapon drop level, and Adrenaline that builds while racking up kills without being hit are all the ways that the developers keep players on their toes and give that wonderful sensation that every single venture is different. Its systems open an infinite number of opportunities for both success and failure, especially towards endgame in the last two areas which are increasingly devastating. My strategy tended towards health regeneration, though I could see a high damage output or super high proficiency build working as well with the right gun configuration. This is also a good reason for replaying content.

While progressing thru Returnal, Selene encounters enemies of all shapes and brutalities. There’s bio-luminescent animals that can pounce from a distance, stationary turrets scattered about, hard-shelled crustaceans that barrage with missiles, robotic atrocities who snatch up the player and the eternally dreaded flying enemies, whether airborne fish, overgrown bats or incessant drones. These are constantly remixed throughout the biomes, with variants like frozen or malformed in later spots. The most terrible of foes is probably the Severed, a bipedal sentient species that will constantly close the gap, never allowing any respite. Their tactics are clever, unrelenting. Combine these together and that’s part of the reason why the game has a reputation for being difficult.

Boss fights in particular are spectacular, monumental affairs. They all have three phases, making ongoing survivability essential. Most occur in an open area, forcing the player to quickly decipher patterns and figure out the optimal damage parameters. Then there’s Nemesis, one of the most epic, memorable battles I’ve ever played. I won’t spoil it here, suffice to say its scale is tremendous.

Now. To address the elephant in the room. Does all of this make Returnal too difficult? Is it for everyone?

The answer is exceeding complex, and warrants an entirely separate discussion on its own.

No doubt its genre is challenging by nature, which is unavoidable. Losing progress in games is deflating. Starting over is painful. Certain times, Returnal feels unfair. I believe this stems from a handful of reasons: Lack of certain quality of life features, its reliance on luck when it comes to build quality, limited accessibility options and inconsistent stability. It’s not that the game is impossible, it’s that there are too many aspects that make it unfriendly to a subset of players.

In lieu of a traditional save system, Housemarque literally shows a pop up alert after starting the game informing to use PlayStation 5’s famously finicky Rest Mode. Why not just offer a mid-run save system? A way for people to tend to life matters or take a rest? This could even be incorporated into the game world and have lore implications, it doesn’t have to be an auto-save. Even Dark Souls has bonfires. Even Alien Isolation has save stations. There’s usually some example of saving in modern gaming.

There’s no difficulty setting or tuning allowed. Yet hardcore platformer Celeste or even last year’s excellent Hades are perfect examples where player choice in this context can work to everyone’s benefit. The former has an Assist Mode. The latter a God Mode. The rationale is offering these accessibility tweaks doesn’t impact players that don’t use them, it only broadens the audience of those that can play because of them.

The role of luck can’t be understated either. Randomness plays a major part in weapons, Parasites, room locations, enemy types and other temporary situations. Certain times, it just won’t go well. Others will fall into place beautifully. This is a byproduct of the decision to make a roguelike, just depends how well it’s balanced.

I understand the desire is to make a tricky, trying run-based game. There’s tension in knowing it could end at any moment. Yet that’s no longer generally practical, especially since attempts in Returnal last a couple hours on average. I had one go for a half dozen, crossing my fingers that the console wouldn’t update or crash when I stepped away to take a break.

These quality of life and accessibility considerations may not have been as important during the arcade days that inspired this genre, yet they should be accounted for now. It should allow for those that want the badge of honor associated with a marathon session while acknowledging those that balance real life.

Thing is, even with all that, I believe that many people can have a great time with Returnal if they are fine operating within these parameters. There’s the constant progression elements I discussed before, carrying over key abilities. The fast travel and teleporting opened by beating areas. Not to mention how player skill improves with each pass, learning tactics and forming strategies to make headway.

Returnal should absolutely be more flexible in its quality of life and accessibility settings. That doesn’t mean many players can’t build up to the point of victory.

The best of the genre also pitch a riveting narrative within this general framework. Returnal uses this setup for a fascinating if occasionally disjointed time-loop story where its character knows she is caught within, and uses the horror of self-realization to perfect effect.

In terms of technology and performance, the title shows how it’s clearly one of the first developed specifically with the PlayStation 5 in mind. Its best feature is DualSense controller integration, with the best example of haptic feedback use to date. The game pad vibrates with each falling raindrop, or swerve of Selene’s ship upon entry to the atmosphere. It gives perfect directional feedback when items or foes are near. Returnal also uses the adaptive triggers in offering traditional shooting by pulling the left trigger halfway, then an alternative fire mode by squeezing it all the way. It’s way better in concept than execution, causing one to fumble in a tight spot and accidentally use the wrong shooting type. I swapped to a more standard customization within the first hour.

Graphical fidelity and general visual presentation is good, albeit not exceptional even at up-scaled 4K resolution. Art and environment work is superior. Textures can be rough and certain rooms are way too dark despite ray-tracing claims and lighting techniques. Its best moments are when enemy projectiles light up a space, resulting in a dazzling neon light show akin to an electronic music venue. Housemarque is a bunch of wizards when it comes to particle effects and destructibility. Performance is consistent throughout, that 60 frames per second shining in the most heated of battles.

There’s plenty of bottlenecks to deter from giving Returnal a go. The cost of a full price tag, knowing its lack of options, not being able to save, that feeling of desperation after getting this close to a win. I hear that. I still argue it’s worth an honest shot, and it’s one of the most surprising games for me this year because I was a skeptic going into my time with it. I was open to trying, and came away very much impressed.

When it comes to comparisons, I’d say it’s part Metroid, reminiscent of Rogue Legacy and Dead Cells plus plays like a blend of the best third-person action games with bullet hell elements where traversal and strategy are key. Going into a fight unprepared has its ramifications.

After over 35 hours and a couple dozen deaths, I firmly believe that Housemarque’s latest is its best game to date. A most clever take on a genre filled with run-of-the-mill releases, though it suffers some of the same setbacks as well. During a good run, Returnal is sublime. When things go poorly, it’s terribly exhausting. Especially having to spend time in earlier biomes to power up in preparation of later areas.

This is inherent to the genre, in which Returnal is one of the best despite its few flaws. It has the ability to produce both completely stressful play sessions and the most blissful moments of accomplishment. The latter outweighs the former, every single loop of time.

Title: Returnal

Release Date: April 30th, 2021

Developer: Housemarque

Publisher: Sony Interactive Entertainment

Platforms: PlayStation 5

Recommendation: It’s an exquisite, well-designed roguelike that’s worth the price tag, though could desperately use a variety of modern options. Especially a save system, its most glaring omission that wouldn’t impact difficulty and would allow for a wider audience. It’s an essential early PlayStation 5 experience.

Sources: Screenshots from PlayStation 5, Sony Interactive Entertainment.

-Dom

Sony & Microsoft Gaming Division Sales Launch To New Record Highs

Two of the biggest gaming console manufacturers and technology companies reported recent financials back-to-back, and both of them set their own impressive new records in the process.

Sony, purveyor of PlayStation among other consumer electronics, reported full annual results earlier today while Microsoft and its Xbox division shared fiscal year 2020 3rd quarter figures yesterday.

(I hope you knew that because you checked out my latest earnings calendar already!)

Each report proves that traditional gaming is as popular as ever, racking up record sales figures and providing other insights into how the biggest players in the industry are reacting to the pandemic in terms of customer demand, part supply for hardware and development activity for software.

For instance, both companies just reported the highest ever revenue from their respective gaming divisions. Sony’s Gaming & Network Services (G&NS) segment, which houses its PlayStation brand, achieved annual sales above $24 billion for the first time ever. Microsoft has a shorter history in games, which means it’s been reporting figures over less time. Even so, it also reached a significant milestone with Xbox gaming revenue for the past 12 months moving past $15 billion for the first time since it began reporting that particular split.

Time to take a look into the reports, highlighting the records and notable figures along with trends that I spotted while reviewing the stats. And get ready for some super fun charts!

Overall for the year ending March 2021, Sony reported nearly 9 trillion yen in consolidated revenue, which equates to roughly $82.8 billion. This is an increase of 9% since 2019, and a beat compared to analyst estimates. Biggest contributors were significant increases in the aforementioned G&NS plus Financial Services unit while Sony Pictures saw declines due to lack of theatrical performance in a tough ongoing environment for films.

Yearly operating income for the firm as a whole rose 15% to 972 billion yen, or just under $9 billion. Driven by performance in PlayStation, Electronics Products & Solutions in addition to Music segments then offset by decline in Imaging & Sensing Solutions. While a double-digit increase, profit actually missed analyst estimates for the year.

(Yup. Sony has a lot of businesses.)

Focusing within G&NS i.e. the PlayStation division, this is the firm’s leading contributor in recent years. Total sales reached 2.66 trillion yen or roughly $24.44 billion, which is up 34% since last year and a record result for this unit during a full year. Operating income jumped 44% to $3.15 billion. This is the first time this particular business moved past $3 billion in annual profit, marking yet another record high.

Of course underlying these results is the PlayStation 5 launch back in November, a console which shipped 3.3 million units during its second fiscal quarter on market. That brings lifetime shipments after two quarters to 7.8 million, Sony’s best console launch ever as it surpasses the 7.6 million of PlayStation 4 back in fiscal 2013. I had estimated between 3.1 and 3.3 million PlayStation 5 shipments for the quarter, so it’s in-line with expectations and honestly an impressive result given the chip shortage and production constraints plaguing console makers right now.

“Supply has not been able to keep up with extremely strong demand for PlayStation 5, although constraints on the supply of components, especially semiconductors, is expected to continue this fiscal year,” said Chief Financial Officer Hiroki Totoki on the Sony conference call.

As presented in the below gallery, the notable part of this particular console transition for PlayStation is how well growth across all sub-categories is contributing to ongoing performance during a time where older hardware isn’t moving as many units and new consoles are constrained on the supply side of the equation despite massive demand. Digital Software and Add-On Content are both up 44% while Hardware jumped 39% in 2020, showing how players are consistently supporting software offerings and additional expansions or downloadable content on both prior and current generation.

Signaling an industry shift that’s been ongoing for a while and accelerating during the pandemic is digital split for PlayStation software, which hit an all-time best 65% compared to 53% in 2019. Implies nearly 2 out of every 3 games purchased for its platforms are now downloads.

Full game software unit sales reached 339 million during fiscal 2020, up from 276 million in 2019. Out of that, first party titles published by Sony contributed 58.4 million compared to 49.2 million last year. Signaling an industry shift that’s been ongoing for a while and accelerating during the pandemic is digital split for PlayStation software, which hit an all-time best 65% compared to 53% in 2019. Implies nearly 2 out of every 3 games purchased for its platforms are now downloads.

Swapping to user engagement, subscribers to Sony’s PlayStation Plus service rose 15% to 47.6 million. Monthly Active Users (MAUs) across all of PlayStation Network dipped a bit, now at 109 million compared to 114 million a year prior. Still, the rise in PlayStation Plus paid memberships is a more significant contributor to the gaming segment, pushing Network Services sales up 14% year-over-year.

Turning back to PlayStation 4 hardware for a moment, Sony shipped 1 million units of this now legacy console in its last fiscal quarter ending March. That brings lifetime sales to just over 116 million, maintaining its second spot on the all-time home console sales list. While this slowing momentum implies that it will never come close to the lofty 155 million lifetime sales of the historic PlayStation 2, it proves that there will be sparse demand for the immediate future and could realistically hit 120 million next fiscal year at this pace.

Looking into the future for Sony overall, the company starts its fiscal year 2021 sales forecast at an 8% increase over 2020 while projecting a 4% decline in annual operating income. The sales increase should be bolstered by a bounce-back for Sony Pictures plus continued performance of PlayStation and electronics categories. Profit will be negatively impacted by higher costs in development of games alongside other divisional declines.

In terms of gaming, Sony guidance shows a similar theme for the PlayStation business in that sales should increase 9% yet profit will show a bit of weakness, dipping 5% year-on-year. Hardware unit sales will naturally increase as supply broadens, as long as the global chip shortage doesn’t get any worse. And manufacturing costs will lighten as the production process is refined. Though consistent with the recent trend of game delays, Sony expects 3rd party games to contribute less in fiscal 2021 and that includes the coveted add-on content revenue stream.

In terms of a hardware unit projection, Sony executives played a bit coy on the conference call. CFO Totoki reiterated the expectation to ship “above 14.8 million” PlayStation 5 units during the fiscal year from April 2021 to March 2022. Which would bring lifetime to 22.6 million, ever so slightly above its predecessor’s 22.4 million during the same time frame. Basically saying to anticipate a slight increase this early in the generation. My first full fiscal year estimate is 15 million, with a tilt towards the downside if supply doesn’t strengthen quickly enough.

On the software front, Sony is intent on investing in its studios plus other partnerships as has been its successful strategy. The way PlayStation creates value and entices people to buy its hardware is by launching high quality games, especially from those talented studios that it owns. Naturally, it’s pumping dollars in order to attract talent.

“In terms of costs, we plan to increase development, personnel and other costs in our in-house studios by approximately 20 billion yen ($184 million) year-on-year as we further strengthen our in-house produced software,” said Totoki. “To enhance our software offering, we intend to continue investing in or partnering with external studios in addition to aggressively investing in our in-house studios.”

And I tend to agree with Sony’s overall and PlayStation guidance, though I remain tentative on the supply side of hardware and on first party launches like Horizon Forbidden West and God of War Ragnarok despite this strong ongoing investment. For example, I don’t project that both of these major titles will be out in the next 12 months. I expect only Horizon to release in fiscal 2021, perhaps even during the January to March time frame as holiday still seems like a tight deadline.

Moving to Sony’s main competitor in the traditional console space at least in Microsoft, it’s obviously a much broader company with enterprise cloud and Azure driving a bulk of its performance. So unfortunately it shares less details on its gaming results. Still, there are significant statistics and executive quote that guide towards where it’s at in its play towards ecosystem and services alongside its Xbox Series X|S console launch.

Note that these are quarterly numbers and compared to a year ago unless otherwise specified, since Microsoft reported its third quarter fiscal year 2021 figures.

In the quarter ending March, the company overall generated nearly $42 billion in revenue which is up 19%. Operating income increased 31% to $17 billion. It beat analyst estimates on both sales and earnings-per-share. Intelligent Cloud revenue reached over $15 billion, as the foundation of Microsoft’s business.

The Xbox division falls under its More Personal Computing (MPC) segment, which itself contributed $13 billion in sales and operating profit hit $4.6 billion. These 9% and 27% increases respectively were bolstered specifically by gaming results.

Drilling down into gaming alone, total revenue was $3.53 billion during January to March. That’s the first time a 3rd fiscal quarter recorded over $3 billion in sales, and a staggering increase of 50%. It accounted for 27% of revenue from MPC segment, a strong moment for a business that’s accelerating especially given the success of Xbox Game Pass and certain first party games like the ever-present Minecraft.

Xbox Content & Services, which basically means software plus subscriptions, alone grew 34% due to strength across the board in third party titles, Xbox Game Pass subscriptions and first party software.

“People are turning to Xbox more than ever to play and chat with friends, and we saw record engagement this quarter, led by strength on and off-console,” Chief Executive Officer Satya Nadella noted on its conference call. “With Game Pass, we are redefining how games are distributed, played, and viewed. Just last week, we added cloud gaming via the browser, expanding our reach across PC and mobile.”

What this quote and the results reveal is that Microsoft’s holistic strategy of attracting players to its ecosystem as opposed to a singular device is starting to pay major dividends. The team at Xbox is indifferent as to where someone plays its game or accesses its services. Just as long as they do.

Curiously, Nadella and team didn’t share new figures for Xbox Game Pass subscriptions. Back in January, Microsoft reported that the figure was 18 million. Rumors are that this figure is upwards of 23 million as recently as last week. Which would be consistent with Nadella’s remarks and recent Xbox Content & Services double-digit growth.

On the Hardware side, revenue more than tripled since this time in 2020 due to the start of a new generational cycle. Demand for Xbox Series X|S is vastly outstripped supply, the latter of which seems to be more significantly constrained than even the PlayStation 5.

Chief Financial Officer Amy Hood echoed the sentiment. “In Gaming, we continued to see record engagement and strong monetization across our platform, as well as demand that significantly exceeded supply for our Xbox Series X and S consoles,” she said.

Still, Microsoft isn’t sharing unit sales figures or giving any indication other than growth statistics for its hardware sales. It’s tricky to estimate, though friend of the site and Niko Partners Analyst Daniel Ahmad estimated that the Xbox Series X|S shipment figure was at 3.5 million last quarter. That would be slightly less than its predecessor the Xbox One, which did 3.9 million in its launch quarter.

I won’t put an exact number on it because it would be a complete guess, though wouldn’t be shocked if Microsoft shipped a couple million last quarter given the current inventory environment.

Annual gaming revenue jumped 46% since this time in 2020 plus achieved a record, the first time ever that yearly gaming sales at Microsoft crossed the $15 billion milestone.

Above gallery contains relevant information here, plus a handy chart that I’ll get into now.

Expanding to a longer timeline, gaming sales for Xbox totaled just over $15 billion for the trailing 12 month period ending March 2021. Annual gaming revenue jumped 46% since this time in 2020 plus achieved a record, the first time ever that yearly gaming sales at Microsoft crossed the $15 billion milestone. The recent direction under Head of Xbox Phil Spencer’s leadership of expanding to new audiences and devices isn’t just a concept, it’s proving to be a sound business decision.

One caveat here is that the $7.5 billion acquisition of ZeniMax happened during the quarter, so its contributions began in early March. Which definitely allowed for its record results. And is exactly why Xbox paid handily for it.

In terms of Xbox software, performance of first-party titles came in above expectations. Minecraft in particular, which recently saw MAUs increase 30% to 140 million. That’s an absolutely ridiculous number of people signing in every month on average for a game that’s over a decade old. Microsoft also shared that Minecraft creators have generated $350 million from over a billion downloads of mods, add-ons and experiences on the platform over the years.

Moving towards the future and guidance, Microsoft provides a specific number for its three broad segments then general comments about individual businesses. MPC revenue next quarter will be upwards of $13.6 billion and $14 billion.

“In Gaming, we expect revenue growth in the mid-to-high single digits. Significant demand for the Xbox Series X and S will continue to be constrained by supply,” said CFO Hood. “And on the strong prior year comparable, we expect Xbox content and services revenue to decline in the mid-to-high single digits.”

This is similar across both Microsoft and Sony, in that consumers will be buying as many pieces of hardware as they can produce. I’m most intrigued by software output for Microsoft, which I think will be quite stagnant until Halo Infinite later this year (which I’m fairly confident won’t be delayed again). So the question comes down to first party output combined with third party partnerships for Xbox Game Pass, the latter of which has been strong lately with games like Outriders and MLB The Show 21.

I anticipate Xbox Game Pass partnerships and console demand to drive results into the last quarter of Microsoft’s fiscal year ending June 2021, as opposed to any significant first party output. Minecraft will always be consistent, at least. Additional titles from its owned studios will come later, especially with Bethesda now incorporated into the mix and Halo Infinite looming as the flagship Xbox console exclusive later in calendar 2021.

Thanks to everyone for stopping by and checking out this analysis. Company reports have more details if so inclined, and I’m always active on Twitter for conversations around these results or my predictions. Would be interested to hear your perspective as well. Be safe!

Note: Exchange rate used for Japanese Yen to U.S. Dollar is as of today. 0.0092 JPY to 1 USD.

Sources: Daniel Ahmad (Niko Partners), Jez Corden (Windows Central), Microsoft, Newsweek (Image Credit), Sony.

-Dom

Earnings Calendar Apr & May 2021: Gaming, Media & Tech Companies

We’re a month into the second calendar quarter of the year, which means another earnings season has started!

In my largest list yet, above is the current schedule for a variety of public companies across gaming, media and technology spaces reporting fiscal results this month and next. It’s a handy way to keep track of the season, which I’ll update periodically based on new announcements.

There’s also the link below, which goes to a Google Doc displaying the same list for easy access to investor relations websites. I recommend bookmarking one of these, perhaps even both, though I admit I’m a bit biased! It’s the way I keep tracking of everything, so I love sharing it with everyone each few months.

Lastly, I briefly list out three stocks to monitor closely this quarter with some details on their situations. Whether established companies or new listings, Working Casual can cover them all. Which ones made the highlights? Check below the fold to find out.

I hope you and your families are well and on the road to vaccination, if not already there. Be safe!

Working Casual Earnings Calendar Apr & May 2021: Gaming, Media & Tech Companies

Nintendo Co., Ltd: Thursday, May 6th

Early in May, Nintendo reports its latest annual results where we’ll hear about hardware, software and mobile results for the full year through the end of March. Last quarter, the Japanese gaming giant raised targets for sales and profit guidance along with Switch hardware units for the year to 26.5 million from 24 million. CEO Shuntaro Furukawa and the executive team are known lately for erring towards conservative guidance, so I expect a beat on all fronts. As it usually does, Nintendo will also share updated lifetime hardware sales for Switch, which will blow past 80 million and should eclipse both PlayStation Portable plus Game Boy Advance lifetime figures, in addition to a variety of major software title updates. In a move much decried by fans, its Mario 35th Anniversary celebration ended abruptly in March with a handful of titles going off market, a timing that’s curiously the same as its fiscal year end date. Combining that boost with steady hardware momentum and software output, it should be the best year for Nintendo in at least a decade.

Capcom Co. Ltd: Monday, May 10th

Yet another Japanese publisher that’s been very active the past 12 months is Capcom, one of the most consistent in the industry in terms of pace and quality of releases. It will also share annual results this quarter in mid-May. The company’s flagship this year so far is Monster Hunter Rise, which launched late in March on Nintendo Switch and surpassed 5 million units shipped in just over a week. Back catalog sales for Resident Evil franchise in anticipation of Resident Evil Village next month plus legacy Monster Hunter World titles along with supplementary launches sprinkled throughout 2020 will drive results to what I expect to be solid growth. Speaking of Resident Evil Village, I’ll keep a close eye on guidance for next year since the first mainline game in the series since 2017 releases during its fiscal first quarter, just before another Switch exclusive in Monster Hunter Stories 2: Wings of Ruin. I’m still maintaining my prediction for a return to the fighting game genre from Capcom as well, so will this be the year?

Roblox Corporation: Monday, May 10th

In one of the most sought-after gaming and tech IPOs this year, Roblox soared well above its listing price during its trading debut in March. The unique gaming platform targeted at a family audience is now trading at a market valuation of over $41 billion ahead of its first public earnings report for Q1, a capitalization comparable to an established industry peer like Electronic Arts (EA). Roblox is a distinct company in the sector, hosting more of a diverse avenue for content creators and game makers than an individual publishing or software development, and it’s available on nearly every mobile or PC device plus Xbox consoles. What it comes down to ultimately is its underlying financials and the ability to support this lofty valuation. In its March prospectus filing, the firm said daily active users rose 85% to 32.6 million and revenue reached just under $1 billion, an increase of 82% in 2020. Downside is costs outstripped sales, which means it’s currently recording a more significant loss than prior years. I’m skeptical of this current market cap given this situation, though I do see future growth potential if it’s able to monetize that growing user base.

Sources: Company Investor Relations Websites, The Sun UK News Company (Image Credit).

-Dom

Switch & Monster Hunter Give Rise to Record March for U.S. Games Industry

While vaccinations in the United States thankfully continue to increase, so too does the rate at which people around the country spend money on video games.

Industry tracking firm The NPD Group released its March 2021 monthly report on consumer spending across the games industry today. And it’s a significant one for a number of reasons.

First, it marks a full year of tracking since the pandemic began. Comparisons to last year will now be reflective of the spending burst that began during the initial stay-at-home restrictions around March 2020.

On the software side, Activision’s Call of Duty regains top honors while new releases from Japanese publishers Capcom and Square Enix complete the Top 3. Then, one Mario spin-off franchise hits a major milestone within its genre. While Nintendo Switch’s continues its ongoing dominance atop the hardware rankings, PlayStation 5 maintains its quick start since launching back in November. Sony also retains leadership in the accessory space with its latest controller iteration.

While technically this March report does include a handful of days from February and April, continued quarantine efforts drove record levels and a substantial first quarter, with consumers spending nearly $15 billion on games, consoles and accessories during the first three months of the year.

Before diving into the report, I want to express my thanks to everyone working or volunteering during this still very difficult time. Please be safe and well. And hopefully find some downtime during which you can enjoy games!

Now. The numbers, please.

United States Games Industry Sales (February 28th, 2021 – April 3rd, 2021):

The above chart courtesy of NPD Group tracks total spending in the U.S. games industry over time since the beginning of 2020. As you’ll see, March 2021 topped $5.6 billion which is an increase of 18% since the same month last year. Which is a huge figure, considering Nintendo launched its record-breaking Animal Crossing: New Horizons at that time and nearly everyone was home for the entire time.

What this means is that March 2021 set a new record for a March month across the history of tracking, dating back to the 1990s.

When expanding to the first three months of 2021, sales saw an increase of 30% to $14.9 billion. While solid, this first quarter growth actually sounds more impressive than it is considering the first two months last year were early coronavirus days for the country.

Video Game Content i.e. software and related revenue from subscriptions category is the largest contributor, as it rose 12% to $4.6 billion in March. For Q1 as a whole, these sales jumped 25% to $12.8 billion.

After a month in second place, Call of Duty: Black Ops Cold War retakes the top position on the overall software list. It was the best-selling title for both the first quarter and the prior 12 month time frame.

Meanwhile, Capcom’s Monster Hunter Rise captured the second spot after it launched exclusively on Nintendo Switch in late March. The latest launch in the company’s second largest franchise immediately became #4 on the year’s top sellers list. Not to mention it’s already achieved a startling statistic. As measured by dollar sales, with just over a week of tracking, it’s the second best-selling Monster Hunter game in series history behind only 2018’s Monster Hunter World, which is Capcom’s number one seller of all time.

Rounding out the Top 3 on the overall chart is Outriders, for which I’ll shamelessly plug my recent review. The brand new shlooter IP published by Square Enix also debuted at the 3rd spot on both PlayStation and Xbox platform charts, causing it to land as the 10th best-selling title overall during 2021 to date. That’s after only three days on sale plus without the consideration of downloads via Xbox Game Pass, which is only counted in the spending categories rather than allocated to individual releases. This successful start, especially for something that isn’t a sequel or part of a known series, partly proves that games sell just as well when launching into subscription services. If not better, due to word-of-mouth and peer recommendations.

As expected, Nintendo-published projects littered the overall ranks due to the continued pace of Switch sales and amazing attach rates. The most notable being Mario Kart 8, the greenest of evergreen titles. During March 2021, Mario Kart 8 became the best-selling racing game in tracked history. That includes the Deluxe edition, though not any digital portion of that or the base version! The prior record holder was Mario Kart Wii, released back in 2008.

NPD Group Analyst Mat Piscatella commented on the software category in particular. “In content, Nintendo evergreens continue to impress,” he said. “Subscriptions are here to stay, will continue to grow and gain importance. No significant downsides evident, plenty of upside suggested.”

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

  1. Call of Duty: Black Ops Cold War
  2. Monster Hunter Rise
  3. Outriders
  4. Super Mario 3D World + Bowser’s Fury*
  5. Marvel’s Spider-Man: Miles Morales
  6. Mario Kart 8*
  7. Assassin’s Creed Valhalla
  8. Animal Crossing: New Horizons*
  9. Super Mario 3D All-Stars*
  10. Minecraft
  11. Call of Duty: Modern Warfare 2019
  12. Super Smash Bros. Ultimate*
  13. Pokémon Sword & Pokemon Shield*
  14. Mortal Kombat 11
  15. Crash Bandicoot 4: It’s About Time
  16. The Legend of Zelda: Breath of the Wild*
  17. Madden NFL 21
  18. NBA 2K21*
  19. Super Mario Party*
  20. FIFA 21

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

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

When it comes to the Hardware category in the U.S., Japan rules once again. Accelerated by popular Nintendo and Sony platforms, domestic spending on consoles boosted 47% to $680 million in March 2021. That’s yet another March record, beating out the $552 million from the Nintendo Wii and PlayStation 3 era of March 2008.

For the first quarter this year, sales in this category reached $1.4 billion. Naturally, this is a significant jump since the late generation cycle months of 2020, an increase of 81% year-on-year.

Nintendo Switch earned the top spot as measured by both units sold and dollars generated. This marks the 28th consecutive month that the hybrid platform has led by unit sales, all the more impressive given Nintendo’s anti-discount strategy. Switch also led the first quarter by number of units sold.

Out of its main competitors, PlayStation 5 is faring the best during its early days despite inventory constraints due to chip shortages plus a notable lack of exclusives during its launch window. Sony’s platform is officially the fastest-selling console in the history of NPD Group tracking, as measured by both unit and dollar sales during the first 5 months after launch. While the report wasn’t specific, I believe its predecessor held the spot previously.

There’s no word specifically on Xbox Series X|S performance other than mentioning that new generation boxes are moving off retail shelves as fast as manufacturers can ship them. It sounds like Microsoft’s production has been hit the hardest by the global chip situation, since supply dictates commercial fulfillment at this stage.

Gaming Accessories are the final category here tracked in this monthly report. NPD Group shared that it also boasted a historic month, hitting a March record spending amount of $300 million. That’s up 26% since March 2020.

Across the first three months of the year, accessory revenue climbed 42% to $717 million in total.

During both the month and quarter, the standard PlayStation 5 DualSense Wireless Controller variant led all other accessories in parallel to the success of its corresponding hardware.

For those keeping score, that’s a set of March month records for total, hardware and accessory spending during March 2021. It’s a combination of mobile gains, new hardware sell outs, subscription revenues and flagship software launches from major publishers bolstering last month to record levels across these areas.

“[The] market might be more smoothly transitioning to cyclical growth than I’d expected,” Piscatella added. “What happens next depends on the chip situation and content development; supply as or more important than demand.”

I’m anticipating very good if not great momentum in the coming months, as the release schedule picks up especially on the third party and PlayStation side. Even knowing a lot of game delays pushed to later this year or into 2022. April releases include MLB The Show 2021, now multi-platform and always a steady seller, in addition to the revived Pokémon Snap. Combine this with the bulk of Outriders sales plus Monster Hunter Rise momentum and I wouldn’t be surprised to see April generate certain records of its own.

Until then, please wear a mask, wash your hands and be safe everyone. I’m out for now!

*Digital Sales Not Included

Sources: Capcom, Microsoft, Nintendo, NPD Group, Square Enix, Zachary Hsieh.

-Dom

Review: Outriders is Geared Up For Guilty Fun, When It Actually Works

It’s difficult to establish new brands in the games business, especially within the crowded looter shooter space. Outriders gets part of the way there with an addictive gameplay loop, masterful environment art plus flexibility in character and gear customization options. Even if it’s rough around the edges and often crashes, both figuratively and quite literally.

Developer People Can Fly, a team known for fast-paced shooters like Bulletstorm and Gears of War: Judgement, crafted a campaign-based, 3rd person action game riddled with loot, rank-ups and abilities. It’s a twist on the deluge of online service games of the modern era, spinning it towards campaign instead of ongoing content. It often feels like a Mass Effect with even more gear to find and tweak. Memorable environmental design, a satisfying combat hook and narrative arc that builds momentum well in the later acts are among its best surprises. Where it suffers is a lack of polish, a slow beginning, cringe-worthy dialogue, various technical issues and inconsistent quality of life and accessibility offerings.

Ultimately, I’d compare Outriders more to the satisfying, greasy junk food devoured after a night out as opposed to any sort of fine dining experience. It has its moments, guilty as they are, and boasts features that competitors should have while lacking others that are genre staples. It often tries too hard to be edgy, distracting from the eloquence of certain mechanical choices. I’m skeptical of its staying power past a few weekends, as fun as those could be when it’s stable enough to play.

Fans of well-established shlooters like Destiny or Borderlands will be immediately familiar with its general conceit. At its core, Outriders is a sci-fi action game that leans on character builds, skill choices, intense combat, level progression and the never-ending desire to find that next piece of gear. There’s a lot to it, a monumental amount of work and balancing from a studio’s first foray into this space.

Story goes like this: Earth is dying because of climate change. Humanity decides to send a select amount of colonists to Enoch, a distant planet seemingly suited for life. Among them are the titular Outriders, a team of elite scouts that will arrive before everyone else to take stock of this new home. Thing is, Enoch isn’t actually that hospitable. An unexplained, deadly energy force dubbed the Anomaly makes life near unmanageable. When the Outriders try to warn the Enoch Colonization Authority (ECA), its leaders are in denial and send a separate team to assassinate all the Outriders.

The player character survives both this internal attack and exposure to the Anomaly itself, is shoved into cryostasis by ECA scientist Shira Gutmann and sleeps for over 30 years.

Once awakened, Enoch is a totally different place. Overrun by enemy factions in an endless war alongside disgusting monsters influenced by the Anomaly, including a set of humans with special powers called The Altered. Our Outrider, possessing these super human abilities as well, works with former friends and new allies to mitigate threats and salvage some semblance of normal life for everyone that survived this far.

And that’s where the player takes control, finding both Shira and fellow Outrider Jakub Dąbrowski embroiled in this conflict. The MacGuffin here is a mysterious signal being broadcast since at least that initial landing, thus the journey towards gear and glory commences. All of this is explained during a painfully slow introduction sequence, as the game takes way too long to get into the real action.

At this point the player faces a major choice: What class to pick? Outriders features four of them, all designed well enough yet sharing a lot of similar characteristics. Devastator is the in-your-face tank. Pyromancer is a balanced build based on, you guessed it, fire. Then there’s the sniping class in the Technomancer and its multitude of turrets. Finally, Trickster offers agile, hit-and-run techniques including a snappy teleport.

I’ve rolled a Trickster and Pyromancer, then learned about the other two via co-op or reading impressions. Even though the game is technically a shooter, its skill system is what truly makes it fun and engaging. Each character has a set of eight selectable skills, three of which can be active at a given time. Many of these apply certain status effects, for instance Burning for the Pyromancer or Slow for the Trickster.

What’s great about the skill design is they are viable in both solo and multiplayer modes, the latter of which really highlights combat versatility and synergies among classes. Trickster and Technomancer combine as a great team, teleporting and turrets in tandem. Devastator is powerful yet a bit more risky alone, and Pyromancer is an all-around quality pick. It’s the combinations that are necessary when facing high level combatants, notably during post-game.

Quick yet important caveat is there’s no regenerating health. The only way to heal is to fight. Each class has its own curative mechanic, all of which require some sort of damage dealt. While having to fight in order to stay alive might seem counterintuitive, it’s a genius decision. Outriders is closer to something like DOOM in how it rewards aggressive behavior. A frenetic action game masquerading as a cover shooter.

Naturally for a title of this nature, multiple layers of player progression coax people to stick around. First, there’s individual player level. Experience points here are gained by basically just playing anything, up to the Level 30 maximum per character. This provides points that can be invested into Class Trees, unlocking additional passive bonuses that range from basic to highly focused. Each character has three main “specializations” i.e. sub-classes. Decisions around them are important, mainly because there aren’t enough points to unlock everything in the broader tree.

Every skill point investment is meaningful, crafting toward specific builds. For instance there’s a Trickster path called Assassin that promotes weapon output and quick movement on the battlefield. While I’m not a fan of this sort of arbitrary limiting, I understand the design choice. It’s meant to encourage specialization and experimentation rather than becoming an all-around god. Thing is, many people like the power fantasy. Good news is that it doesn’t cost anything to re-spec or shift to a different branch.

Then there’s one of the best ideas Outriders has to offer in World Tiers, both a leveling and difficulty mechanic. This effectively sets the “meta” layer, impacting enemy power, loot drop level and the rate at which the best gear appears. It also determines the wearable item level cap, so a lower level character can’t wield a super-powerful gun until it reaches the corresponding tier.

There are fifteen World Tiers, each one increasing all of these requisites and rewarding with a random drop once a new level is achieved. The brilliance is how Outriders lets the player dictate difficulty by allowing changes on the fly. Having a tough time with a certain encounter? Bump it down temporarily. Thing is, there’s a slight catch. The game only doles out World Tier experience at the highest unlocked level, and dying resets part of that progress. My personal rule was if I failed once during a particular fight, I’d lower it by one until I finished that area. I love this sort of setting that can be adjusted immediately. It encourages more people to play, alleviates wasted time on challenging encounters and there are still plenty of meaningful prizes.

While having to fight in order to stay alive might seem counterintuitive, it’s a genius decision. Outriders is closer to something like DOOM in how it rewards aggressive behavior. A frenetic action game masquerading as a cover shooter.

Speaking of rewards, I’ve come this far without mentioning the most important part of the genre: LOOT!

Originating in role-playing games of yesteryear, gear and customization around it is now commonplace in many genres. Outriders is in a class where it’s the core design aspect: The player character starts with crummy weapons and armor, earns better loot throughout the game until they are powerful enough to take on the game’s most challenging content.

As always, there are varying degrees of quality: Common, Unusual, Rare, Epic and the coveted Legendary. All of them communicated visually by both how they look on the character and what color they show up as in one’s inventory. What’s nice is even if early gear is not pleasing to the eye, it’s still useful in a practical sense. Lower level items starting at the Rare category possess worthwhile perks, such as applying status effects, shortening skill cool downs or replenishing health after a kill.

The overall loot ramp-up is steady, if not slow, until the story opens up to where there are certain optional quest-lines. My first Epic reward came at around 5 hours, a Level 12 shotgun earned during a boss fight. Initial Legendary was a double fire machine gun called Amber Vault at Level 21, a random pull after numerous hours fighting hordes and insurgents. Upside is that certain missions actually allow the player to pick between three different rewards within the same rarity. Most times they are worthwhile, and it reduces the reliance on luck.

Aesthetically, a lot in Outriders isn’t really appealing unless it’s the best of the best. A mish-mash of post-apocalyptic junk and natural designs, a whole lot of bones and protrusions. Weapons are mostly standard military fare until the highest tier of Legendary designs start to look really unique, blending the Anomaly’s supernatural aura with parts from native creatures and elemental features. It looks like each Legendary has its own story of why it looks that way, a blend of Old Earth and New Enoch. And I appreciate the craftsmanship at the top end, even if I don’t love the artistic approach of “edgy and we know it.”

The best intrinsic system of Outriders might be its crafting, the method by which a player tunes its gear to enhance specific builds or shift towards a certain status effect type. This is done via interacting with crew member Dr. Abraham Zahedi, one of Enoch’s last remaining scientists. For both weapons and armor, he offers multiple functions: increase rarity, boost attributes, modify slots, change variant and even level it up if it’s lagging behind. These cost resources like Iron, Leather or Titanium, which are found in-game or from breaking down unneeded gear.

Modding is the most impactful and flexible part. Rare quality items have a single slot, while Epic and Legendary possess two. Crafting allows one of these to be changed to any other mod the player has unlocked, as long as they have the resources to afford it. Even high level mods are affordable. Once changed, this particular slot can then be adjusted to any other owned mod at any time.

There are three tiers of mods, each offering more unique bonuses and powerful build opportunities than the last. These precious items are unlocked by dismantling a piece of gear with it attached. Once that happens, that character can use it on any relevant gear. Forever. These aren’t consumables. Which means that even if gear isn’t used, it’s still useful.

To highlight perfectly why this particular crafting design is so smart in Outriders, a personal favorite Legendary that I’ve been leveling through endgame is Thunderbird. It dropped with the highest tier of lightning damage possible, which allowed me to add a mod with Anomaly blade attacks at the same time. Using attribute boosting, I was able to spec towards critical and close range damage. It shreds most enemies, especially if they rush.

That’s a basic overview of how gear works, though the point is that crafting is so important and multi-layered. With this amount of flexibility, the possibilities are staggering. Quite simply, crafting is easy and essential in Outriders and I wish every loot game leveraged its malleable approach to gear modification.

So how does an Outrider actually use all this sweet gear? Well, to kill baddies. Then receive more gear used to kill more baddies and so on, of course. It’s that standard hook the genre tries so desperately to capture, and Outriders truly excels in the moment-to-moment combat encounters even if its broader mission design could use freshening.

The best way to describe combat is crunchy. It most certainly earns that Mature rating, with explosions of gore and viscera galore. Guns feel good for a third-person shooter, and abilities supplement well. Automatic weapons in particular are very effective. Rifles and tactical semi auto variants are a bit trickier to use if not playing in cover as a Technomancer, since otherwise time is spent on the run. Shotguns predictably have a most satisfying punch, even if lacking range when fighting humans in cover.

Enemies fall into different broad categories: creatures of Enoch plagued by the Anomaly then humanoids, whether insurgents (exiles from the ECA) or fearsome late game foes called Ferals. There are also other Altered, classified as elites or bosses. Standard archetypes exist within these groups: Those that relentlessly follow players closely, others launch projectiles from a distance, snipers hide in cover and bombard with mortar attacks. And, the worst of the worst, flying insectoids and massive airborne birds that fight from the skies.

Visually, Outriders has a lot of striking designs especially for monsters. Thing is, the tactics employed here are mostly the same. Enemy density and intensity are turned to the max. They will swarm and try to overwhelm. Even mini-bosses will constantly hassle a player, bothering with Anomaly barrages or elemental bursts. This makes it hard to account for everything, even when playing on a team, until one learns to anticipate how enemies will act.

One core complaint is how Outriders increases challenge by boosting the level and amount of foes as opposed to providing any sort of mechanical complexity. Encounter design is lacking. This is fine early on, though I expected it to progress over the course of the campaign. A standard cadence will be enter an area, take down a horde, go through a passageway, fight another large group, pass through a blockade, beat up on a boss, collect reward. Expeditions during endgame have areas to secure, a slight wrinkle. In my hours playing, I haven’t seen anything more complex than “stand on a plate until the timer counts down.” The impact of this rote encounter layout is softened at least because of how satisfying the actual combat can be.

Another thing while I’m at it. My Outrider is this super human Anomaly machine, so how is it that I don’t have the ability to jump? All these cool powers and I’m tethered to the ground. A glaring omission in a game where skills are based around mobility.

There’s story and loot payoff plus plenty of endgame potential for those that can endure its rough edges, a valiant effort from People Can Fly that produces plenty of fun and frustration alike.

Ambitiously, People Can Fly sought to create a loot game within a complete campaign arc, featuring a definitive finale then leaving room for post-game for its most dedicated players. Which means its main missions are where the bulk of time is spent, since most realistically won’t play past the ending.

I admit I was skeptical whether they could achieve any meaningful story beats. Early game presents like standard sci-fi blockbuster, as humans fight with both each other and native creatures while trying to colonize an alien planet. It’s rough and often cliche, yet really started to pique my interest with the second act once it delves more into Enoch, its history and inhabitants.

Like, I know humans are often crappy to one another. We are territorial. A lack of resources in a foreign world would certainly create in-fighting. How about this new world? What about its history? What can we learn from it? Can humanity find a second chance? Happy to say that Outriders mostly delivers in the back half on both character moments and the overarching narrative. Even if the finale is a bit messy, I appreciate how it justifies the endgame setup.

The parallels with a franchise like Mass Effect carry over to character involvement, as personalities join the Outrider on the quest to fight the hordes and find this signal. There’s the aforementioned Zahedi, a future seer Channa, the stern outsider Bailey, gentle giant Tiago de la Luz and even an unexpected visitor that will remain a surprise. While they don’t actively participate in combat, there are dialogue sequences and each member serves a purpose within the roaming camp such as driver or merchant. It’s like a reverse Red Dead Redemption 2, promoting a sense that humanity could learn to work together on this faraway rock.

There’s way more world building than I ever anticipated, as Outriders features a massive journal with numerous entries on lore. Starting with what happened on Earth to result in deep space travel then moving onto Enoch and its various stories, factions, locales and enemies. While not nearly as robust, it reminds me of Destiny’s Grimoire collection because a lot of the cool stuff takes place before or outside the in-game campaign. It’s a nice touch, even if I wish there was more of it during cut scenes or spoken roles.

The actual presentation of its general narrative is rough, disjointed at times and notable for its inconsistent tone. Certain cut scenes just aren’t well-directed, with violent camera movement and jarring cuts. Thankfully there’s an option to turn off camera shake, which I highly recommend. Dialogue often borders on cringe, a combination of edgy lines and lackluster delivery. If you like cursing, you’ll bleeping love the writing in Outriders.

It’s curious, the art design seems to mimic the campaign movement. The first few areas of human civilization within cities and trenches are lackluster in a visual sense. It makes them confined, an odd feeling for this awe-inspiring alien planet. It’s like they never left Earth, a lot of browns and grays with nondescript locations. The further it goes, the more exceptional environment designs become. There’s stunning artwork once the squad visits snowy peaks and rumbling volcanoes, cult areas and ancient ruins, lush forests and foreign villages. Outriders turns into a sensory treat throughout the campaign, and somehow ends nowhere near where it started in terms of artistic effectiveness.

Unfortunately, what the game also reveals over time is a continually basic quest structure and tedious mission design. It starts as clicking on an area, moving through it while fighting hordes of enemies, then teleporting back to camp to try the next one. And never really changes. Even more beefy side quest-lines like beast hunts and bounties are the same setup with a named enemy boss target. Occasional side missions pay off differently, but getting there is wholly predictable. Combat flows in a similar way almost every time, just changes in enemy grouping. This is especially painful on subsequent characters which is the only way to try a new class.

That said, I want to praise Outriders for a multitude of other design aspects. The aforementioned World Tiers are exceptional. The way it integrates side quests with the main campaign is great, allowing for swift selection of either mission type within the game world. Being able to quickly mark all loot of a certain rarity leads to easy dismantling or selling. World destruction during combat is a beautiful thing, in particular where spots of cover can be destroyed. This leads to changes in a battlefield’s construction mid-fight, requiring more dynamic tactical choices.

For those into the cosmetic side of loot games, it has a decent enough character creator. Personally I like when a game offers limited yet different options, and that’s Outriders. There’s no sliders or jaw length or body type, it’s a limited set of player looks, hairstyles and skin tones. Then there’s visual options for banners, emotes and one’s truck. Most are earned via an accolade system, hitting certain milestones across categories like combat, class use and world progression will award new designs. It’s enough to feel personal without being overwhelming. While it could be riddled with future loot boxes, micro-transactions or cosmetics for real money, publisher Square Enix has said that won’t be the case.

Now that I’ve praised decisions, it’s only fair to highlight certain other design issues with Outriders. This is where it can be rough. As I alluded before, there are tons of jarring camera cuts. Gives a feeling of whiplash when just progressing through its campaign. There’s frequent, intermittent loading screens. Everywhere. Moving from areas. Transitioning to side quests. Trying to team up. Then, its fast travel system is annoyingly cumbersome. You can’t travel between regions unless you first move to the base camp of a given location. Which means something as simple as turning in a bounty takes up to three fast travel instances, each with its own loading screen. This is luckily fast enough on current generation consoles and PC, though suffers tremendously on PlayStation 4 and Xbox One.

In terms of actual performance, it’s mostly stable throughout solo gameplay. I didn’t notice frame-rate dips or chugging. It’s not the most beautiful game, though it has its moments more because of art direction than resolution crispness. Unfortunately, this isn’t the case while playing on a team. To go along with matchmaking issues I’ll mention soon, co-op play is filled with lag, odd animations and dropped frames. Oh, and turn off motion blur. Thank me later.

While the People Can Fly team provides a number of smart quality of life options, it’s lacking in other areas. If a game doesn’t offer a photo mode, which this one doesn’t, I’d prefer it offer the ability to turn off the heads up display (HUD) in a click. Blood spatter lingers on the screen even when a small bit of health is lost, which is especially disruptive since it stays outside of combat. Text is too small, even on the largest setting.

And now. The ugliest of all: Instability and utterly poor matchmaking.

For context, Outriders is an online-only game. Even when playing alone, it requires a connection to its servers. I’d imagine that’s because it stores character and loot information there as opposed to locally. One could debate the merits of that call, yet that’s how it is and we have to play under those rules.

I had mostly a pleasant solo experience, save for occasional crashes and the quality of life issues I noticed. It’s playing with others that’s near impossible right now. Matchmaking is, in a word, miserable. Teaming up with friends should be way easier than it is. It took 15 minutes of multiple tries just to join a game, and that’s on the same platform. Cross-platform play wasn’t fully available until yesterday, over a week after launch. And still, the same team up issues are present when trying to use a “game code” system that generates a unique identifier for each hosting instance.

Trying the “join a team” function is brutal and broken. I started using it for Expeditions, post-campaign higher tier challenges. Half of the time, it pairs me with one person running a random campaign mission. I’d even bet they have their party set to “open” and they don’t really want me there. Other times, it takes me to someone’s hub camp and they are standing there idly for what seems like eternity. It’s a rare case when it fills a whole team running the correct mission type. A more elegant solution would be a playlist where one can pick the enemy level, instead of matching into a single host’s instance.

Then there’s the general instability as it relates to hard crashing to the dashboard. I can’t count how many times Outriders has crashed now on my Xbox Series X. It often happens when at the character inventory screen or trying to swap skills. There’s also times it freezes during gameplay, notably boss fights, which is infuriating. The worst part? Apparently crashes can cause *full* inventory wipes. Players trying to log back in will find their characters without any gear. Talk about demoralizing. People Can Fly and Square Enix have been furiously updating the game with stability fixes, which I appreciate even if I won’t excuse it. The inventory bug is still present at the time of publishing, so I refuse to play again until that’s remedied.

For those at this point wondering about my experience with its endgame, it’s hard to give full impressions on something I haven’t finished. Not for lack of trying or desire, I really want to play more Outriders. It’s purely that I can’t due to the multitude of known issues. Connecting to teams is inconsistent. It will crash before, during or after an Expedition, never knowing what’s going to happen with my loot drops. Not to mention the threat of losing my entire inventory is enough for me to await a patch or two.

Really unfortunate, because the concept is sound. An Expedition is akin to a dungeon, a bespoke mission that really ramps up the enemy density and requires mild coordination to complete. Post-game foregoes the World Tier system, moves to a Challenge Tier concept where players run these timed missions at increasingly higher difficulties to rank up and earn a currency that can be used to either buy weapons or play new Expeditions. Once hitting the highest tier, it unlocks a final Expedition that’s supposed to be the pinnacle of play. I’d absolutely love to see this, especially because loot drops are quite generous. One day.

When it works, Outriders can be incredibly fun and a great time whether solo or squad. It’s like an awesome sci-fi tale meets looter, featuring frantic combat and honed character skills amidst stunning backdrops and during a narrative where individual people and a new world are both characters in their own ways. Then it fails to find a connection before signing in, puts the player in a co-op team that isn’t doing the desired activity or crashes a couple times in the same boss fight, and it’s the most disappointing experience possible.

Technical issues aside, I’ll remember as much about its clever mechanical systems as what happened in the later acts to crew members I grew to know and the secrets of Enoch, its culture, the Anomaly and its ferocious foes. There’s a point in the story where it reveals the actual situation on this distant planet, both in terms of its native landscape and humanity’s colonization efforts. It’s an effective twist.

Like all great loot games, Outriders excels when injecting those mini endorphin rushes, whether it’s succeeding at a particularly tricky fight or snagging that piece of gear with a great set of stats. It launched in a tough state, certain aspects like its crass tone and shaky presentation will be there forever while others can be fixed. There’s story and loot payoff plus plenty of endgame potential for those that can endure its unpolished current form. A valiant effort from People Can Fly that produces plenty of fun and frustration alike.

Title: Outriders

Release Date: April 1, 2021

Developer: People Can Fly

Publisher: Square Enix

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

Recommendation: For those into shlooters and 3rd person action games that don’t mind dealing with its edgy tone and technical hiccups, the meaty campaign of around 30 to 35 hours is well worth it. There’s a lot of loot to discover, builds to try, crafting to complete and a story that steadily improves in quality. Multiplayer and post-game should be played at one’s risk as its loop is plagued by inconsistent matchmaking, hard crashes and general connection issues.

Sources: Square Enix, Screenshots from Xbox Series X.

-Dom

Super February 2021 U.S. Game Sales Boosted by Mario & Switch

Can you believe it’s already been a year since lock-downs began due to the pandemic? I could have sworn it was still March 2020.

Up front, I’m forever thankful for everyone who has been working the entire time to keep the broader economy and healthcare system going. You are real-life versions of the heroes in games like these.

As it relates to U.S. game sales, the industry continues to set records almost on a monthly basis as shared by tracking firm The NPD Group in its latest report.

Add February 2021 to that list, as overall consumer spending in the States reached a record high for a February month. Nintendo Switch hardware, a new old Mario game, the evergreen nature of Call of Duty plus the next generation of consoles led to yet another significant, double-digit increase in aggregate monthly sales.

Granted, February 2020 was wholly lackluster. So the comparison is favorable to a month this year when people are still at home a lot. With their families. Desperate for anything to do. Enter video games, a welcome respite even if hardware inventories are currently limited.

It’s a lot of usual suspects this time though with genuine surprise debuts on the software side with Persona 5: Strikers and Little Nightmares II, then a handful of major milestones for Nintendo’s hybrid platform in terms of lifetime results. It was a super month indeed, and not just because of a certain Mario launch.

United States Games Industry Sales (January 31st, 2021 – February 27, 2021):

Per the numbers in the image above, total consumer spending in February 2021 reached $4.6 billion which is an increase of 35% year-on-year. For 2021 to date, spending is up 39% to $9.3 billion. Driving factors being double-digit gains across each category of Content (Software), Hardware and Accessories, with Hardware in particular seeing explosive growth towards its best February in a decade.

Content is naturally the dominant category, rising 29% to contribute $4 billion on its own. Bolstered by the release of Super Mario 3D World + Bowser’s Fury, ongoing updates for Call of Duty: Black Ops Cold War and an impressive debut from Sega’s Persona 5: Strikers, year-to-date spending in this segment is $8.2 billion as compared to $6.1 billion this same time last year.

Atop the software list is yet another Nintendo title in Super Mario 3D World + Bowser’s Fury, a re-release of a mostly beloved 2013 Wii U game. This time featuring an excellent “bonus” mode in Bowser’s Fury, an open world 3D platformer that’s more standalone than it seems. The game is immediately the 2nd best seller of 2021 to date, and all of this without even considering digital dollars (because Nintendo doesn’t share that portion).

Second is the ever-present Call of Duty: Black Ops Cold War. This marks the first time since launch in November that it wasn’t top dog. That’s kind of.. ruff. Of course it remains the best-selling of 2021 to date, a position I expect it to retain until the next annual release later this year. Plus, February was yet another month where two Call of Duty games occupy spots in the Top 10.

At #3 on the overall chart was Persona 5: Strikers, an impressive start for Sega and Atlus’ spin-off musou game in the Persona franchise. Not only did it debut in the Top 3, it’s the 9th top-seller of the (admittedly young) year right now. The other supremely remarkable new release is Little Nightmares II at #6. Tarsier Studios’ chilling sequel to 2017’s horror adventure Little Nightmares has already passed 1 million copies sold globally, making it the fastest-selling ever for Bandai Namco Entertainment Europe and propelling the franchise to 5 million units sold. Clearly helped by a great launch in the States.

Otherwise, plenty of familiar titles among the software ranks in February including Marvel’s Spider-Man: Miles Morales at #4, the 5th-ranked Madden NFL 21 and a couple more Nintendo games naturally among the Top 10. Time to check out the charts!

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

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

Top-Selling Games, 2021 Year-to-Date, U.S. (Physical & Digital Dollar Sales):

  1. Call of Duty: Black Ops Cold War
  2. Super Mario 3D World + Bowser’s Fury*
  3. Marvel’s Spider-Man: Miles Morales
  4. Assassin’s Creed Valhalla
  5. Madden NFL 21
  6. Mario Kart 8 Deluxe*
  7. Animal Crossing: New Horizons*
  8. Call of Duty: Modern Warfare
  9. Persona 5: Strikers
  10. Ring Fit Adventure

Among the three categories in February 2021, Hardware experienced the most intense growth. Compared to this time last year, spending here more than doubled (rising 121% to be exact) to $406 million. That’s the best dollar result in a decade since February 2011’s $468 million. When reviewing 2021 so far, the Hardware segment achieved $725 million. Up 130% year-over-year.

No doubt a two-tailed reason for this: Nintendo Switch momentum and strong demand for new consoles.

Switch topped all console sales in February, this time by both unit sales and dollar revenue. That marks a staggering 27 consecutive months leading on unit sales, in what must be a record for any single piece of hardware to date. Its February was quite incredible, attaining the highest unit and dollar sales for any platform in a February since Nintendo Wii during 2009, smack in the middle of that craze.

Looking back historically, Switch reached major milestones last month. It’s now the second best-selling Nintendo hardware ever behind only Wii. This also makes it the 7th top-selling single platform ever domestically. That’s out of every console released during NPD Group’s tracked history, back to the 90s. Turns out re-launching a Mario game from the failed Wii U generation a month before games released as part of the franchise’s 35th anniversary won’t be on sale any longer equates to sizeable commercial success.

The other beneficiary of high hardware demand in February 2021 was the PlayStation 5. Sony’s new platform continued its “big” streak by becoming the fastest-selling console in U.S. history as measured by dollar sales during the first four months after launch. In terms of ranking, it was the runner-up in the Hardware segment last month.

While an excellent start for PlayStation 5 itself, this sort of lofty performance isn’t isolated to a single new platform. There are plenty of buyers for both PlayStation 5 and Xbox Series X|S at this early point in their life cycles. (Even if some are scalpers, unfortunately.) These manufacturers literally can’t distribute enough to satiate audience appetite right now.

It just so happens that Sony must have stocked more inventory in February domestically, at least that’s my take on the situation. I expect healthy demand throughout the year, for both, then supply should catch up starting solely in the Summer months.

Shifting over to the final category of Accessories, in what’s essentially the unsung portion of the report that’s been as steady as they come. Industry spend on this segment increased 41% since last year to $195 million. Want more February records? Game Pads, Headset/Headphone and Steering Wheel sub-sections all did that, reaching their best levels ever for a February month.

As it’s done all year as the best-selling in 2021 to date, the PlayStation 5 DualSense Wireless Controller generated top dollar sales during February 2021. It truly has control over this category, in lockstep with the momentum of its corresponding console. Especially given its substantial price and general availability. Sony is even trying to sell accessories to people who wait in queue for a PlayStation 5 online and aren’t able to order one. Savvy, if a bit icky.

As I alluded to earlier, February 2021 marks the final month before very difficult comparable months start up. March 2020 saw Animal Crossing: New Horizons break out as a cultural phenomenon during the early part of the global coronavirus outbreak, driving all three categories in the U.S. to either record March highs or near that level.

I anticipate consistent results upcoming, even as vaccinations speed up. Spending on video games isn’t going anywhere, especially given it’s the first full year of a new console generation. Though I doubt we’ll see growth like we’ve become accustomed to lately with these reports, given that buying habits shifted when everyone started to stay at home.

For more information on February’s report, visit NPD’s website or check out NPD Analyst Mat Piscatella’s detailed Twitter thread. I’m really here to react and analyze to the stacks of information gathered by their team each month.

Until next time: Thanks for reading, stay safe and be well!

*Digital Sales Not Included

Sources: Bandai Namco, Nintendo, NPD Group, Polygon, Sony.

-Dom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*Digital Sales Not Included

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

-Dom

Seven Major Games Industry Predictions For 2021

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

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

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

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

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

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

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

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

No Game Can Escape The Year of the Delay

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

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

Sony & Tencent Highlight Another Year of Acquisitions

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

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

Double-Digital Consumer Spending Increase Led By 90% Digital

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

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

Capcom Announces Blockbuster Marvel Universe Fighting Game

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

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

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

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

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

Amazon Luna Flies High Above The Clouds

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

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

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

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

-Dom

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

The first big season of 2021 is now underway.

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

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

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

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

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

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

Sony Corp (SNE): Wed, February 3rd

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

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

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

GameStop (GME): March.

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

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

-Dom