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

DomsPlaying

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

An eventful one, it was.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Be safe and well. Thanks for reading!

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

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

-Dom

Xbox’s Best Holiday Sales Result Pushes Microsoft’s Annual Gaming Revenue to Record $16 Billion

DomsPlaying1 Comment

As I reported back in October, Microsoft’s Gaming division at the time saw its healthiest first fiscal quarter ever.

Now, it’s going one step further. On the strength of its first party lineup and growing subscription base, Xbox has just achieved its best holiday on record and blasted past a new milestone for annual sales, establishing a record 12-month figure.

Mere days after announcing the biggest acquisition in industry history in its purchase of Activision Blizzard, Microsoft is showing off why it’s pumping dollars so much into the space. Because it’s seeing great returns. During its 2nd quarter of 2022 financial report, Microsoft said Gaming revenue reached $5.44 billion during the holiday quarter.

That’s the single best October to December ever reported, 8% higher than last year which was the previous record holder of $5 billion. The main contributor to this record output was Xbox Content & Services, especially strong during the holiday season bolstered by flagship titles in the Halo and Forza series.

This performance also means annual Xbox sales for the Washington-based tech giant pushed passed the $16 billion milestone for the first time.

Combining the last four quarters of sales for Xbox reaches upwards of $16.28 billion. That’s 18% higher than December 2020 and 3% more than even last quarter, both of which included the launch of Xbox Series X|S. The fact that the rolling annual figure was this high shows payoffs in first party game development and key investments in partnerships for Xbox Game Pass’s extensive library.

According to Chief Executive Officer (CEO) Satya Nadella on the company’s conference call, the Xbox division saw both record engagement and revenue during the quarter. While he didn’t share specifics on the actual level of engagement or revenue, he did cite certain juicy tidbits I’ll dig into later.

Unfortunately, there was no appearance from newly-minted CEO of Microsoft Gaming Phil Spencer on the call or questions from analysts on anything related to the acquisition of Activision Blizzard. In fact, the only mention of the deal was reiterating what we already knew about its cost and closing during the fiscal year ending June 2023.

No worries. It’s time to move into the underlying numbers and corresponding reaction!

The above slides provided by Microsoft give a rundown of growth rates for Gaming and its sub-segments of Xbox Content and Services plus Xbox Hardware during the quarter ending December 2021. Namely, that 8% growth for Gaming leading to $5.44 billion in quarterly revenue which was in-line with the company’s expectations of high single digits.

Underlying this all-time number was double-digit growth in Xbox Content & Services, the sub-segment that includes software and subscription sales, which rose 10% in the quarter to around $3.86 billion or 71% of the total. Yet another record! Boosted by first-party launches like Halo Infinite and Forza Horizon 5 plus Xbox Game Pass expansion, this figure was especially impressive given its consistency around this time in late 2020.

On the conference call, Chief Financial Officer (CFO) Amy Hood mentioned there was “significant” growth for Xbox Game Pass subscriptions and first party software sales in the holiday quarter.

Why? According to Nadella, Halo Infinite has now attracted 20 million players since its staggered launch beginning back in November. It’s the largest start ever in the series that dates back to the original Xbox. Another thing that, hm, drove sales is how Forza Horizon 5 is now up to 18 million players after hitting the 10 million threshold within a week of launch in early November. These games also attracted subscription growth, the other key revenue contributor, as Xbox Game Pass now has 25 million members up from the last official figure of 18 million (with the latest rumor being around 22 million).

To me, this dispels a false notion that Xbox Game Pass isn’t properly monetizing its user base. Even those buyers that get in at a discount are sticking around, which generates ongoing revenue once the rate resets. The numbers back this up. I’d love to know more on the profit side, of course, but I work with what’s available.

Intriguingly, the 10% Content & Services growth was technically below Microsoft’s guidance of “mid-teens.” That’s because of weakness on the third party side. This signals under-performance of AAA multi-platform releases like Call of Duty: Vanguard and Battlefield 2042. Perhaps even Madden NFL 22 and other annualized sports titles. So while Call of Duty and Battlefield both were among the best-selling premium titles in the U.S. during 2021 as I wrote about here, this missed estimate implies a lower contribution to the bottom line of platform holders.

Taking a look at the above chart I’ve compiled, this is 12-month revenue going back over time for the gaming business. It helps to provide context in a couple of areas, and smooths out short-term fluctuations. The main thing it shows is the overall level of Xbox revenue over time. That’s the record $16.28 billion as of this latest period, compared to $15.86 billion last quarter then going back from there. Clearly the trend-line is on that upward trajectory since bottoming out in Q3 of FY 2020.

There’s also the split between Xbox Content and Services and Xbox Hardware categories. The green portion is for Xbox Content and Services, which most recently contributed $12.58 billion to the annual amount. The red portion is Xbox Hardware which is all physical gaming consoles under the brand. $3.7 billion this time. Both of those are also all-time highs.

Next up is Xbox Hardware. This sub-segment contributed the remaining portion of the record holiday quarter, growing 4% to almost $1.59 billion in revenue on the back of steady demand. It’s actually one of the few things in this report that wasn’t a record. That happened back in fiscal 2018’s second quarter, when hardware accounted for $1.78 billion. This year’s was still second best, so I’d say it’s doing alright.

To put it another way, the second holiday quarter for Xbox Series X|S generated almost $70 million more in dollar sales than its launch quarter did.

On the call, Hood shared how Microsoft is seeing continued buyer interest for both console models. Additionally she saw “better than expected” supply, which is a good sign considering the doom and gloom of the modern semiconductor situation.

This commentary and performance is mostly consistent with Spencer’s recent comments around Xbox Series X|S being the fastest-selling ever for the brand. Xbox Hardware is performing well during this early part of the generational cycle even in the fact of shortages, with Xbox Series S as the highlight because of higher availability. While we don’t have exact figures from Microsoft on hardware shipments globally, we do have an estimate from my friend Daniel Ahmad, Senior Analyst at Niko Partners, that it’s above the 12 million of Xbox One’s first year.

Here’s a telling experiment: What would Microsoft’s gaming revenue look like if Activision Blizzard earnings were considered? The latter hasn’t reported its last quarter yet, so I’ll use historical figures for a baseline in this thought experiment.

The most recent October to December revenue for Activision Blizzard was $2.41 billion. That means the holiday quarter for the combined entity would have been over $7.58 billion! For the full 12-month period, Activision Blizzard’s latest is $9 billion.

Which means, in aggregate, Xbox and Activision Blizzard annual revenue right now would be $25.33 billion. How does that compare to its major competitors? Well, it’s pretty impressive and much closer to the top-end than ever before, naturally.

I usually pull in figures for Sony and Nintendo as the three main console manufacturers. There’s also Tencent, the largest gaming company in the world, which is an absolute behemoth notably in mobile and the Asia Pacific region. So let’s see them all!

This is using annual and the caveat is Microsoft is the only one that’s reported this season so far. It’s still helpful to illustrate. Tencent’s latest strictly from its games business was $27.3 billion. Sony’s Game & Network Services segment hit $25.5 billion while Nintendo’s total sums to $14.7 billion, both using the exchange rates at their last reports. Which means Microsoft alone sits closer to Nintendo, while combined with Activision Blizzard it nearly surpasses Sony’s total and might even some day approach the untouchable realm of Tencent.

And that’s part of why Microsoft is willing to pay almost $70 billion for it.

As is tradition, I’ll quickly run down Microsoft’s overall results for the three months ending December before closing up.

Total revenue for the company rose 20% to $51.7 billion. It’s the first time quarterly sales topped $50 billion, pushed by an all-time high $18.3 billion revenue from its Intelligent Cloud segment. Operating profit moved up 24% to $22.2 billion.

Its results beat analyst consensus on both top-line revenue and earnings-per-share. Microsoft Cloud product revenue was a major highlight, increasing 32% to over $22 billion for only the second time ever.

We can learn a bit on gaming profitability from the More Personal Computing business unit margin movement and operating dynamics. This experienced 15% revenue growth to $17.5 billion. At $5.44 billion, gaming makes up around 31% of More Personal Computing. Operating income rose 22% to $6.36 billion, while expenses rose at a lower 17% rate partially as a result of gaming. It’s not perfect, but this can indicate sales contribution is outpacing costs.

It’s hard to overstate just how much the record revenue stats keep piling up for the Xbox business, reflective of Microsoft’s general strategy of user engagement and ecosystem establishment. This time it was first party software moving the needle, with major internal studios like 343 Industries and Playground Games leading the charge by pushing quality within key brands. The result is Xbox Game Pass literally paying off, thus generating opportunities for more future investment both organic and external.

Moving into the new calendar year, Xbox’s early 2022 exclusive slate is light during a quiet quarter for first parties. CrossfireX is a third party console exclusive from Smilegate and Remedy Entertainment launching in February, plus there’s indie partnerships hitting the platform throughout the coming months.

It is, however, quite the busy period for third party games with select titles like Rainbow Six Extraction available simultaneously on Xbox Game Pass. Dying Light 2, Elden Ring and Destiny 2’s The Witch Queen expansion all debut in February. There’s always the long tails from late year launches of Call of Duty, Madden, NBA 2K, Battlefield then other major ongoing games with seasonal updates like Fortnite and Apex Legends.

On the hardware side, Xbox Series X|S availability will continue to set the narrative. I don’t expect the higher end Xbox Series X to pick up stock any time soon, though I’m turning optimistic on Xbox Series S inventories based on recent trends and anecdotal evidence. Microsoft executives themselves said that hardware will continue to be impacted by supply limitations and didn’t provide guidance on growth expectations.

For the quarter ending March 2022, Microsoft expects gaming sales growth in “mid single digits” range. Assuming it’s exactly 5%, that’s $3.7 billion. For Xbox Content & Services, strong engagement and continued momentum will lead to increases in the “mid to high single digits.” Putting it around 7% then, this would generate $3.1 billion.

Guess what? Both would be fiscal third quarter records. The latter would even be the first time it’s passed $3 billion in a Q3.

“The other area obviously we’re seeing strength is in gaming,” Nadella highlighted during the analyst question portion of Microsoft’s earnings call. “We see the intensity of usage and the business model diversity around games, that increasingly the economics of gaming franchises is also radically becoming much more software-like.”

That certainly is the case, considering the multi-faceted approach where now, because of ongoing financial support in both areas, main contributors are actual first party software and Xbox Game Pass as a catalog of titles plus cloud experience.

Thus ends this quarter’s deep dive into Microsoft’s financials. I look forward to recapping other companies very soon! Be safe all, and stay healthy.

Note: Comparisons are year-over-year unless otherwise noted.

Sources: Daniel Ahmad, Microsoft, The NPD Group.

-Dom

Earnings Calendar Jan & Feb 2022: Gaming, Media & Tech Companies

DomsPlaying

The news cycle is busy and the very first earnings season of 2022 is now underway!

Here at the site, each quarter I organize a full calendar for various gaming, technology and media stocks around the globe to track financial reporting dates. It started as something I did to keep myself organized; it’s now grown into the most popular of all my regular posts. Thanks to everyone who uses it every few months!

For a quick reminder of how it works, the calendar is available in image form above. This time around instead of a Google Doc, I’ve transitioned to a Google Sheets link for easy access. Let me know if you have any trouble accessing it. It’s sorted by date based on the local time zone for each company. Using Nintendo as an example, its timing will be based on when it reports around Japan business hours. Why? Well, mainly because that’s what it shares at its investor site.

You’ll see that some of them aren’t final. In those cases where it’s unclear, I try to give an estimate or point out if it’s a future month. Mainly April or later, as certain companies report off schedule or only semi-annually. In the past I’ve even updated it as the dates near. That tends to be a fair amount of work and constant monitoring. So, now I do the best I can with the information at my disposal around when I post. Lately I’ve included fiscal period as an additional reference item.

I’m biased of course, though I highly recommend bookmarking this page for future use. It’s not a comprehensive list, but at almost 100 entries, it’s the closest thing you’ll find online covering these sectors. Check out below the link for three of the biggest stories this season. Enjoy!

Working Casual Earnings Calendar Jan & Feb 2022: Gaming, Media & Tech Companies

Microsoft & Activision Blizzard: FY 2022 Q2, Tuesday, January 25th & FY 2021 Q4, Thursday, February 3rd

I’d say this one is a no brainer, given how Microsoft recently announced its intention to purchase Activision Blizzard for a staggering $68.7 billion. Each of these companies independently report within the next week or so, and I mostly expect a somewhat boilerplate commentary around the pending acquisition and its suggested closing date during Microsoft’s fiscal year ending June 2023. We already know Xbox Game Pass has 25 million subscribers and that the Xbox Series X|S is the “fastest-selling” in brand history. And how Call of Duty is still generating revenue like hot cakes. I’m mostly intrigued by the potential for analyst questions around the deal, poking and prodding on items like synergies, exclusivity, unionization, intellectual property, redundancies (layoffs?) plus Xbox Game Pass offerings. I’d also love to hear Phil Spencer on today’s Microsoft earnings call, usually reserved for topics like cloud and enterprise.

Meta Platforms Inc: FY 2021 Q4, Wednesday, February 2nd

The Company Formerly Known as Facebook has its first earnings announcement since the general Meta rebranding and restructuring of its financial segments next week. Yes, I expect a lot of buzzword talk around The Metaverse and what the company envisions that to be. I’m primarily curious about two topics: the company splitting out Reality Labs as a separate business unit and Mark Zuckerberg potentially paying anything other than lip service to government questions and traditional media coverage around privacy, safety and how its platforms are used for dangerous activities. An investor announcement yesterday covered what to expect for the first: current and recent historical performance for augmented and virtual reality, a business that includes Quest headsets that have seen consistently increasing demand especially last year. I don’t really expect much on the latter other than general references, unfortunately.

Take-Two Interactive & Zynga: FY 2022 Q3, Mon, February 7th & FY 2021 Q4, Early February

Before the aforementioned marriage between Microsoft and Activision Blizzard one-upped it, Take-Two’s pending purchase of Zynga for $12.7 billion was going to be the largest of all time in the games industry. The market initially reacted quite violently in terms of a decline in Take-Two’s share price, implying that it’s late to the party in its mobile expansion and it vastly overpaid for the Farmville creator. Still, it’s the type of move that Take-Two really had to make to keep pace with rivals snatching up other mobile publishers like Electronic Arts and Glu Mobile’s deal last year. In addition to more color around the acquisition, Take-Two is generous with unit sales and revenue figures for its major franchise. Grand Theft Auto V reached 155 million sold last quarter, I expect that to hit or pass 160 million this time. There should also be other updates on game performance including NBA 2K22, Red Dead Redemption 2 and various titles from Take-Two’s Private Division label.

Sources: Company Investor Relations Websites.

-Dom

Switch, Call of Duty & Mobile Boost U.S. Games Industry Spending to Record $60B in 2021

DomsPlaying1 Comment

Anything going on lately in gaming?

Joking, of course. It’s been a busy time in what’s proving to be a most rambunctious year already for industry news. Last week Take-Two Interactive announced its $12.7 billion purchase of Zynga in what was, at the time, the biggest deal ever for gaming. Not to be outdone, Microsoft dropped a megaton this past week on how it’s going to pay a whopping $68.7 billion in cold hard cash to buy Activision Blizzard.

Oh. Consumers also spent a record amount of money on video games in the U.S. during 2021. No biggie!

While I’ll cover the Microsoft and Activision Blizzard news more in the future starting with the former’s earnings report next week, this here article is my recap of the final monthly report of 2021 from industry tracking firm The NPD Group.

And a standout report, it was. December’s over $7.5 billion in consumer spending on games during the holiday season resulted in an all-time annual high of $60 billion. Backing into the global share using recent data from Newzoo, the U.S. was almost exactly one-third of global games industry dollar spending.

Underlying this 8% domestic spending growth for the full year was consistency in mobile, subscription growth, hardware acceleration during this latest generation plus major software franchises at the top like Call of Duty, Madden NFL and the ever-present Pokémon.

As a quick reminder, there are three categories tracked broadly by The NPD Group: Content, Hardware and Accessories. Content as the largest includes game sales plus mobile spend, downloadable content (DLC), in-game transactions and subscriptions. Hardware measures console sales while Accessories comprises all the physical peripheral items. All three saw some level of growth during 2021.

The Content category rose 7% year-on-year and comprised over 85% of annual games industry sales. Like its trend globally, mobile had a significant impact as the report mentioned December was the best month ever for mobile spend. Content also benefited from two Call of Duty titles atop the yearly software chart, new sports game launches, various catalog releases in the top ranks and ongoing subscription momentum.

Hardware was the only mega category with double-digit gains in 2021, led by Nintendo Switch as its top seller and bolstered of course by PlayStation 5 and Xbox Series X|S production, the latter of which has edged up slightly for its Xbox Series S model during the holiday push. Demand is thriving, and supply is doing its best to catch up.

The smallest category of Accessories also saw the lowest annual growth at 2%, showing some resilience even as it’s harder to make both consoles and devices lately due to chip production limitations. Game pads from PlayStation and Xbox led the charge.

Briefly focused on the December month alone, overall spending fell ever so slightly at 1%. Content was essentially flat, Hardware moved 3% lower while Accessories took the biggest hit with nearly a double-digit dip. Premium game sales declined to the point where subscriptions and recurring revenue weren’t enough to offset during the month. Hardware was trying its best to match holiday demand, no doubt pressured by shortages.

“Hardware revenues in December across the three lead platforms [were] very close,” wrote The NPD Group’s Mat Piscatella on Twitter. “All are finding great success and strong demand. Switch [was] off its peak, but still leading.”

It’s a lot to take in between annual and monthly figures. No time like the present!

United States Games Industry Sales (November 28th, 2021 – January 1st, 2022)

For December, total spend on the domestic games market hit that $7.54 billion figure which was a slight decline from the highs of last year’s $7.63 billion. Expanding to full-year 2021, the impressive record $60.4 billion level was 8% higher than 2020.

First, I’ll address the leading segment of Content spending. Content reached $5.73 billion, or 76% of the whole, the same dollar amount as December 2020. Across all twelve months of 2021, Content produced $51.7 billion compared to $48.1 billion prior year.

Mobile, subscriptions, micro-transactions and downloadable content bolstered the growth. While there are select brand new titles atop the charts, legacy titles from prior years remain and people are spending a lot for new stuff in their favorite older experiences.

The report prominently highlights mobile as a catalyst, increasing 14% for the full year after an excellent December for the sub-category. The best December ever, actually. It was also the 10th straight month where mobile eclipsed $2 billion in spending, which happened every month in 2021 except February. While the report doesn’t provide mobile game rankings, it cited Candy Crush Saga, Roblox, Coin Master, Garena Free Fire plus Pokémon Go among the year’s top earners.

Swapping over to results for more traditional software releases. Call of Duty: Vanguard topped December’s overall chart. That and 2020’s Call of Duty: Black Ops Cold War tag-teamed the year’s Top 2 spots, like last year with Black Ops Cold War and 2019’s Call of Duty: Modern Warfare. Activision Blizzard’s military multiplayer shooter series has now led annual software spending for 13 years in a row.

Looking back based on my research, the last time a non-Call of Duty title led the annual software chart was 2009 when Wii Play landed at number one. Note that back it was measured by unit sales as opposed to dollar revenue. At the time, all three best-sellers launched on Nintendo’s Wii console. Those were the days!

Microsoft’s Xbox exclusive Halo Infinite reached the second spot during its debut month of December, proving once again that Xbox Game Pass launches supplement premium sales as opposed to cannibalize them. It was the month’s best-selling title on both Xbox and PC platforms. There’s no word yet on player counts or engagement for Halo Infinite, and it’s difficult to compare directly to prior debuts because of its staggered roll out on the subscription service. Just for the sake of documenting it, Halo 5 Guardians led its launch month of October 2015 while Halo 4 on Xbox 360 started at #2 in November 2012. All very similar ranks.

Next up was Pokémon Brilliant Diamond & Shining Pearl, which captured the third spot for the second consecutive month after launching in November. Not only that, but it also ended the year as 2021’s fourth best-selling game. All of these without even considering its digital portion since Nintendo still doesn’t share it. Pokémon franchise retail software dollar revenue had its best year in over two decades, since 2000! Incredible.

During the latter part of the National Football League (NFL) season here in the States, Madden NFL 22 ranked fourth on the December chart and third for 2021. Electronic Arts’ football sim named for the late great John Madden (Rest in Peace) was the best-selling sports title of the year in the U.S. for a second straight year.

One major trend within the 2021 best-sellers was older games that many people kept on buying. Especially alongside new purchases of a Nintendo Switch console. There are several repeats from last year. Seven games among the Top 20 to be exact. Three of these in Mario Kart 8, Mortal Kombat 11 and Super Smash Bros. Ultimate also charted during 2019. Talk about evergreen, as in ever making a lot of green for publishers.

Check below for full lists for December and 2021 plus more commentary on the additional categories.

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

  1. Call of Duty: Vanguard
  2. Halo Infinite
  3. Pokémon Brilliant Diamond & Shining Pearl*
  4. Madden NFL 22
  5. Battlefield 2042
  6. Mario Kart 8*
  7. Marvel’s Spider-Man Miles Morales
  8. Mario Party Superstars*
  9. NBA 2K22*
  10. Animal Crossing: New Horizons*
  11. FIFA 22
  12. Super Smash Bros. Ultimate*
  13. Minecraft
  14. Far Cry 6
  15. Just Dance 2022
  16. Forza Horizon 5
  17. Marvel’s Guardians of the Galaxy
  18. Ghost of Tsushima
  19. Super Mario 3D World + Bowser’s Fury*
  20. The Legend of Zelda: Breath of the Wild*

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

  1. Call of Duty: Vanguard
  2. Call of Duty: Black Ops Cold War
  3. Madden NFL 22
  4. Pokémon Brilliant Diamond & Shining Pearl*
  5. Battlefield 2042
  6. Marvel’s Spider-Man Miles Morales
  7. Mario Kart 8*
  8. Resident Evil Village
  9. MLB The Show 21^
  10. Super Mario 3D World + Bowser’s Fury*
  11. Far Cry 6
  12. FIFA 22
  13. Minecraft
  14. Animal Crossing: New Horizons*
  15. NBA 2K22*
  16. Assassin’s Creed Valhalla
  17. Super Smash Bros. Ultimate*
  18. Back 4 Blood
  19. Mortal Kombat 11
  20. Forza Horizon 5

As seen in my many monthly report recaps including those starting around the holiday season, Hardware movement is the story as that new generation cycle continues. While December was a down month, 2021 more broadly saw a double-digit boost for console revenue.

Strictly speaking on December, Hardware dollar sales lowered 3% to $1.32 billion. Spending on consoles pushed past $6 billion for full year 2021, rising 14% and exhibiting the best growth across all three major categories.

Fitting the trend of recent years, Nintendo Switch topped December console sales when measured by units sold. As it’s done for 36 of the last 37 months on record, with September 2021 being the only time over that period when it lost to Sony’s PlayStation 5.

Speaking of PlayStation and looking at dollar sales instead during the holiday month, The NPD Group said Switch effectively tied with PlayStation 5. Which makes sense given the latter’s more premium price point and lower unit volume.

“Hardware revenues in December across the three lead platforms [were] very close,” Piscatella wrote. “All [are] finding great success and strong demand. Switch off its peak, but still leading.”

As I had predicted what feels like many years ago back in January 2021, Switch ended the year as the best-selling console domestically by both unit sales and dollar sales. The resilience is spectacular as Nintendo uses the multiple model approach to attract new buyers and entice existing owners to snatch up another hybrid console for their household. That’s one of the company’s ultimate goals: Multiple Switches in a single home. And it’s working.

There wasn’t much color around PlayStation 5 and Xbox Series X|S on an annual basis. Based on monthly trajectory and broader dynamics, I assume PlayStation 5 was second place and Xbox platforms took third. Right now, it’s solely dependent on who can produce more boxes.

Though the gap isn’t as wide as last generation. Global shipments for PlayStation 5 totaled 13.4 million at Sony’s last earnings call. Xbox’s recently-promoted CEO of Microsoft Gaming Phil Spencer told The New York Times that Xbox Series X|S is the fastest-selling Xbox ever, which prompted trusted friend and Niko Partners Senior Analyst Daniel Ahmad to estimate 12 million units shipped worldwide. Console competition is healthy!

For our final category of Accessories which includes things like controllers and headsets etc, a weaker December wasn’t enough to offset earlier year gains.

December monthly spending reached $493 million, which was 9%$ lower than $540 million generated this time last year. However, the segment gained 2% to $2.65 billion when looking at the year overall compared to the $2.61 billion of 2020. While the annual rise wasn’t as pronounced as its counterparts of Content and Hardware, it certainly benefited from that growth as buyers grabbed additional items to use with their new consoles.

Microsoft’s fancy Xbox Elite Series 2 wireless controller was the best-selling accessory in December, seemingly a hot holiday gift item for core gamers. On the year, Sony’s PlayStation DualSense white game pad was the strongest seller no doubt bolstered by that hardware expansion.

One area I don’t often cover in these reaction articles is virtual and augmented reality (VR/AR). Sales of this hardware sub-category and related accessories more than doubled in the time between Thanksgiving (November 21st) and Christmas (December 25th). That’s based on both units and dollars, which rose 180% and 153% respectively.

2021 sales for VR/AR products in the U.S. moved up 163% in unit sales and 137% on revenue generated. Piscatella noted specifically how Meta’s Oculus Quest had a “big” month to close out 2021.

So. That’s the scoop on U.S. games industry spending in the year that was 2021. Even if the holiday period softened year-on-year, even with supply constraints on hardware, even given several delays for software, earlier months picked up the slack to achieve that record spending amount. Demand was way high. Spending reflected that.

Mobile, subscriptions, Call of Duty and Nintendo Switch told the story domestically last year as services grew in popularity and people kept spending on entertainment’s most lucrative segment that is gaming.

If the current slate of premium releases holds and hardware expectations continue, 2022 is going to be a tricky one with major upside especially for mobile, subscription revenue and ongoing sales. Flagship titles from PlayStation and Nintendo plus Microsoft’s non-stop investment moves alongside other huge publishers like Tencent expanding globally, I’m seeing a lot of potential for premium game spending. It’s hardware supply that will continue to be a major question mark.

“The pool will continue to grow as the industry offers more options in what to play, where to play and even the ways in which to engage, Piscatella said. “Getting to growth is no small feat after 2020, [the] future remains incredibly bright for the market.”

I’m very much looking forward to more monthly recaps in 2022. In the meantime, please check out my predictions piece to read more about the future of gaming and what trends we’ll see in these spending reports in the next twelve months.

Be safe and well, all!

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

Comparisons are year-over-year unless otherwise noted.

Sources: Daniel Ahmad, Getty Images (Photo Credit), The NPD Group, Sony Corp.

-Dom

Seven Major Games Industry Predictions for 2022

DomsPlaying

New year, new excuse to think we can predict the future!

In an annual series of articles I began last year, here is where I’ll document my biggest, sometimes boldest, games industry predictions for the 12 months ahead. It’s fun to guess, and honestly it’s even more fun to look back when all is said and done to see how wrong some of them were!

Speaking of looking back, out of my seven predictions for 2021, I’d say I got maybe half of them “right” when combining different elements. I said Switch would be the best-selling console in the U.S. during 2021, and that’s the trend based on reports from The NPD Group. I also thought Nintendo would debut a Pro model, when instead the company released its OLED step-up. Partial points?

I dubbed 2021 “Year of the Delay,” which was true in games and various industries due to both impact from coronavirus and chip shortages. My most substantial win was Sony and Tencent scoring major acquisitions, as both companies expanded reach globally with a number of investments. I saw the global games market value growing double-digits to upwards of $190 billion or more. Because of the aforementioned worsening supply and delays, Newzoo said the global value hit $180 billion on only 1% growth. It did say digital contributed 93%, right near my estimate of “above 90%.”

Otherwise, I guessed Rockstar Games would reveal its next title and how it wouldn’t be Grand Theft Auto VI. Technically it had the Grand Theft Auto: The Trilogy – The Definitive Edition, and there’s rumblings of a new Bully project, so I’ll take half credit? I spoke of the expansion of cloud gaming and projected that Amazon’s Luna service could be the standout. Cloud has grown in popularity and spending though I don’t think there’s necessarily a standout service right now, so I’ll say that’s a push. And lastly, Capcom still hasn’t announced a new fighting game which means I take the big L on that last one.

It’s now time to look ahead. I see a future where plenty of trends which started in recent times will accelerate such as services, cloud, mobile, consolidation, outing toxic work cultures, defining The Metaverse and even the dreaded blockchain and NFT barrage. Here are seven of my biggest industry predictions that, of course, will most certainly happen soon.

Workplace Culture, CEOs & Unionization

Starting with a downer, this is a sad prediction that hurts to write. I expect more disheartening stories of workplace toxicity and ongoing harassment at publishers of all sizes in 2022, following in the footsteps of Activision Blizzard, Ubisoft, Riot Games and others. It will always be difficult to hear victims speak out about stories of abuse and “boys club” cultures, however I do believe it’s a key step towards a better industry. The year will bring to light various stories and hopefully remove bad actors from powerful positions.

The downside is I anticipate both Activision Blizzard CEO Bobby Kotick and Ubisoft Chairman/CEO Yves Guillemot to remain in their respective offices. They and their leadership teams will claim things have changed. Even if that’s not much the case. (We’ll see.)

On the brighter side, I expect employees within at least one major publisher to work towards broad unionization plus a concerted shift towards hiring more women and people of color in executive roles. The industry is at a boiling point. A group of brave employees can, and I think will, unify under a common goal to bargain with leadership. It could serve as a beacon for others to bring demands to management, and potentially symbolize a shift in power dynamics. While I don’t know which company it will be, I do expect this can be the year where a unionization effort manifests.

Sony PlayStation Subscription Service Rebranding

This one is a slam dunk. (I’ll take what I can get!) With the success of Microsoft’s Xbox Game Pass service and rumors swirling of Sony’s response, I believe we’ll hear very soon about PlayStation’s rebranding of PlayStation Plus and PlayStation Now into a service allegedly code-named Spartacus. To firm up the prediction, I’ll list out specifics of how I think it could go.

At present, PS Plus and PS Now cost $10 per month individually. It’s messy. Spartacus will combine these, and I buy the rumored three tier setup with varying levels of service and price points. The first I expect to be priced at the current $10 since it’s essentially PS Plus. The second tier should have a catalog of prior and current gen software attached, so I’ll say $15. Then I can see a premier $20 per month service with the same online benefits and catalog plus a ton of older titles and cloud streaming available. Note: Xbox Game Pass base is $10 monthly while the upgraded Ultimate package is $15.

Going one step further, I think PlayStation will partner with either Electronic Arts or Ubisoft to bring EA Play or Ubisoft+ services simultaneously at launch of the rebranding in that highest priced tier. One or more pricing options will also have a console form of Discord bundled, as a result of the recent partnership between the two companies.

Then, here’s the biggie: I say at least one new first-party game will in fact launch into Spartacus during 2022. It might not be Horizon Forbidden West or God of War: Ragnarok. It could however be along the lines of a Destruction All-Stars which started on PlayStation Plus at launch in February 2021. Perhaps MLB The Show 2022. Or even Gran Turismo 7?

Nintendo’s Breathtaking Lineup & No New Switch

After surprising most talking heads by not releasing a new Switch “Pro” model in 2021, Nintendo opted for a slightly upgraded OLED iteration. The company also announced how its flagship sequel to The Legend of Zelda: Breath of the Wild is slated for release in 2022.

You know what? I believe them on Breath of the Wild’s follow-up. It will be out this year. (And absolutely should have weapon degradation because that’s a staple of what made the original so brilliant.) Consistent with my earlier call, I don’t believe it will launch alongside a new Switch model. Honestly Nintendo won’t say much of anything about new hardware during 2022, other than alluding to how its internal teams are always working towards the future. At most, I can see another accessory experience like Ring Fit Adventure or Nintendo Labo.

That’s because I think Nintendo’s hybrid handheld will have its second best year ever from a global unit sales standpoint. I’m targeting 25 million Switches shipped in the 12 months ending March 2022, slightly above Nintendo’s latest estimate of 24 million. That would be the best result since launch other than last year’s 28.83 million.

Elsewhere on the software side, I don’t think we’ll hear anything formal about the next full-fledged Mario Kart in 2022. While it’s clearly in development, I still say it will be tied to a Switch successor in 2023 or beyond. That said, I am calling for a major, dormant IP to make a return in 2022 for Nintendo with a mainline release. Let’s say it’s, at long last, EarthBound. Nobody is actually scoring these, right?

Finally there’s Metroid Prime for Switch, which I can see announced by E3 and released during the last quarter of 2022 to bolster Nintendo’s holiday period. Unfortunately, it’s probably not the full trilogy. It’s a remake of the first game. That way Nintendo can sell it for full price and still have two more similar releases in the future. It’s a business, after all.

Severe Impact of NFTs, Blockchain & Play to Earn Schemes

I dislike talking about this as much as the next level-headed pundit. In 2022, there will be plenty of chatter around blockchain games, non-fungible token (NFT) integration and so-called “Play to Earn” setups. Especially at the triple-A level. It’s driving investors wild. Anything that can make money, even if it’s temporary, will attract the attention of big budget publishers.

Diving into specifics, there’s flat out going to be tons of pitches around games built on the blockchain hand-in-hand with those that offer players NFTs for in-game items or cosmetics. Shoot, there already are. It’s only getting worse in 2022. Then there’s the corresponding rejection by core gamers against these things. That constant push-and-pull will partially define the industry this year.

I say *at least* three major global publishers will release their own full-blown NFT game, marketplace in an existing title or software specifically marketed as Play to Earn. One of them probably won’t even make it until the year-end. We’ll hear at least two or three stories similar to how S.T.A.L.K.E.R. 2 Heart of Chernobyl developer GSC Game World walked back plans for NFT usage after major backlash from its community. What about a game that smartly integrates these? I wonder if that’s even possible based on game development experts, so I can’t make that sort of prediction in good faith.

What I do know is this theme is going to be a nuisance all year. Could 2022 be the peak of blockchain and NFTs in gaming? That’s hard to say. It certainly does seem to be leaning towards short-term gains, however Bitcoin and cryptocurrencies aren’t going anywhere so I’d say buckle up.

Global Games Market Value Will Grow Low Single-Digits

How big will the global games market be when 2022 is said and done? Well, I think a little larger than it is right now. Similar to performance in 2021, I’m expecting a marginal increase. Under a 5% gain. Based on ending 2021 at roughly $180 billion, my target puts it between $182 billion to $185 billion on the upper end. I anticipate mobile will again be a driving force, gaining a similar single-digit percentage while console and PC will be slightly down or effectively even. Plus, digital split will remain above 90%.

Looking at hardware, Sony’s PlayStation 5 truly has an opportunity to surpass Nintendo Switch as the best-selling console in the U.S. specifically. However, I don’t think it will happen because of supply constraints expected to last until 2023. I’m leaning towards Switch repeating as the year’s top hardware. PlayStation 5 and Xbox Series X|S will have healthy years even given production challenges. I anticipate Sony will meet its annual console targets while just recently, Xbox leader Phil Spencer said this current generation is Xbox’s fastest-selling ever. With the availability of Series S in particular rising lately, I can see this continuing. (Just wish they would share actual numbers!)

On the consolidation side, we’ve already just witnessed the largest deal in gaming history with Take-Two Interactive overpaying for Zynga at $12.7 billion mere days ago. Over the next twelve months, I think there will be another “blockbuster” deal worth upwards of $5 billion to $7 billion. It could involve a Western publisher and Asian game studio. Maybe the other way around?

Yes, I’m being cautious on naming names because I want to sneak in some credit for this prediction this time next year! What I’m driving at is I expect a lot of investment in global expansion during 2022 for the top-end gaming publishers.

It’s Impossible to Escape The Metaverse

As much as many companies want to claim they are each creating one, we’re already living in a world filled with Metaverses. We have virtual identities established over years of existing online, our precious personal information aggregating into databases everywhere as we socially chat and make purchases from our devices. Lately it’s become the hot buzzword used by companies both within and outside of gaming trying to capitalize, and I expect The Metaverse to consume technology as a sector and especially the games industry during 2022.

I continue to believe that no one will agree on how to define The Metaverse, so it will remain a more nebulous concept for executives to use for pitch materials. Hardware manufacturers, social media giants and virtual realty players will all look for a slice of that metaphorical pie and try to capture users in their tailored version.

To coalesce this into an actual prediction, I’m thinking something like a half dozen games from publishers large and small will launch with The Metaverse as a “selling point” in the advertising deck. Meta, formerly Facebook, will certainly be one of them on their Quest family of devices. Epic Games will continue bringing as many brands as possible into Fortnite. At least a publisher or two will try to integrate virtual workspaces with online play, billing their experience as a “fun place to work.”

I do think there will be a game that comes out of nowhere in 2022 that captures the spirit of The Metaverse without actually advertising it as such, and for that reason it will become hugely popular. Like, Pokémon Go level of popular. Ironic considering how well that game integrates augmented reality elements. I don’t know who will make it, or who will publish it. Just that it will exist. You heard it here first!

New BioShock Will Be Revealed, Releasing in 2023

Time to have a little fun!

In what would be a monumental moment for my personal gaming tastes, I think 2022 is the year when we finally hear from 2K Games and its Cloud Chamber development studio on the next installment in the beloved BioShock franchise.

The fourth mainline game was announced back in 2019 when the team, which includes a number of folks who previously contributed to the older games, said it was several years away from release. The first-person, historical horror shooter is certainly well into development by now. Enough so that rumors are trickling about an Antarctic setting in the 1960s and a more open area design structure. Apparently it’s been dubbed code-name “Parkside,” and there’s even a rumored title of BioShock: Isolation floating about like the buildings in BioShock Infinite’s fictional Columbia.

In the past, I’d consider this more pie-in-the-sky than an actual prediction. With this fresh trickling of information alongside 2K parent company Take-Two Interactive sharing updated unit sales statistics (38 million to date for the series) on recent earnings reports, I’m feeling more confident than ever it will reveal the new BioShock this year. And schedule launch for sometime in 2023.

It has to happen sooner or later, right? Why not sooner!

That’s a wrap on my biggest predictions for the games industry in 2022. How many of these line up with yours? Are you willing to go on record with your boldest of predictions? Will this be the year of a spankin’ new Capcom (and maybe Marvel) fighting game announcement? Can I finally have my wish of hearing about BioShock?

Whatever happens, we have a lot to look forward to in gaming over the next several months. First quarter is a busy one for releases and the landscape will fill up over time. Here’s to another year!

Sources: Artturi Jalli (Image Credit), Bloomberg, Getty Images (Photo Credit), MarioWorld.com (Image Credit), New York Times, Newzoo.

-Dom

2021 Year-in-Review: Dom’s Top 10 Games of the Year

DomsPlaying

I’ve arrived at the very final post of 2021 Year-in-Review, and really the entire year for the website. It’s time to crown Game of the Year!

This piece marks a bittersweet moment. Looking back on a challenging, stressful 12 months, I’m impressed by any game development team and publishing outfit that was able to release games in 2021. Collaborating remotely, balancing work and life, juggling responsibilities and still making awesome games is an incredible feat.

Now’s the time to celebrate my favorite titles, the best of the best. And I must say, it was a unique one. Certain years, like films made specifically for award season, there are clear “best of” list entries. Not 2021. Variety and diverse quality defined gaming this past year, between triple-A surprises and fantastic indies, to where it was impossible to predict at the beginning where I’d be at the end.

Despite what some might say, I think last year was an incredible year for gaming. The breadth of experiences, glorious and saddening, is clearly reflected in the ranks of my top games. Here are the ten best games I played in 2021, then a quick set of excellent honorable mentions.

10. Monster Hunter Rise (Capcom)

Platforms: Nintendo Switch, PC.

Capcom’s bespoke Nintendo Switch entry in the storied Monster Hunter franchise reminds me of predecessor Monster Hunter World in the best ways while simplifying certain areas for a more specific audience. The third-person action-crafting game is an amalgamation of console and handheld tendencies for Monster Hunter, sparked by a new ability that tremendously expands traversal, which benefits its cooperative gameplay and remains rewarding over dozens if not hundreds of hours.

9. Halo Infinite (343 Industries, Xbox Game Studios)

Platforms: Xbox Series X|S, Xbox One, PC.

After a year delay, the latest and arguably most important Halo entry since Halo: Combat Evolved twenty years ago nails its core gameplay within a bold move towards an open area structure, its campaign blending traditional corridor sequences with encounters that encourage experimentation. It overcomes a predictable storyline because it’s so fun to play as Master Chief, who I can’t imagine now without his signature grappling hook. I haven’t delved much into multiplayer, which I hear is fantastic, yet it’s still missing cooperative campaign and user generated content features which dings its ranking.

8. Ratchet & Clank Rift Apart (Insomniac Games, Sony Interactive Entertainment)
Platforms: PlayStation 5

The Ratchet & Clank series is pure gameplay joy mixed with high quality visual flair, and Rift Apart continues this traditional amidst an expanded cast of characters and gorgeous environment design. The latest generation of consoles lets famed developer Insomniac dazzle players with fast loading times, snappy mechanics and quick grappling plus its narrative is charming with Rivet and Kit joining Ratchet and his robo-buddy Clank adventuring across multiple timelines. It doesn’t push boundaries; it’s just plain old interactive fun.

7. Life is Strange: True Colors (Deck Nine, Square Enix)

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

One of the year’s best titles is also my favorite in the Life is Strange franchise, which now spans three mainline stories and select spin-offs. It’s carried by main character Alex Chen, an empath dealing with both her own and others’ traumas, plus creative writing, outstanding dialogue and consequential player choice. The fictional Haven Springs is a stunning setting, the backdrop to an effective character drama. Chapter 3 is the best single sequence of 2021, a few hours of pure bliss as the game briefly turns into a fantastical, turn-based role-playing adventure.

6. Lost Judgment (Ryu Ga Gotoku Studio, Sega)

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

Another sequel makes my top games list as Lost Judgment refines the detective mystery, martial arts fighting, hilarious character personalities and wacky side content the original did so well. It adds skateboarding, climbing and a detective doggo named Ranpo plus parallel questlines in solving a high-profile murder while investigating bullying at a local high school. The developers behind Yakuza expertly balance humor with gravity as Yagami’s path now spans two Japanese cities, and their vision coalesces into a thrilling experience as I wrote in my full review.

5. Marvel’s Guardians of the Galaxy (Eidos Montreal, Square Enix)

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

Rounding out the Top 5 is the most startling Marvel’s Guardians of the Galaxy, a spectacular adaptation underpinned by an affecting story, infectious chatter, beautiful visuals and delicate character moments when least expected. Starlord and team band together, fall apart and reunite in a game with exquisite writing and quick decision-making. Combat combines team management and third-person shooting, starting slow then ramping up with new abilities as squad relationships deepen. It drags at times in the third act yet ultimately reveals a narrative with themes of self-doubt, responsibility and redemption.

4. Psychonauts 2 (Double Fine Productions, Xbox Game Studios)

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

Back in August I raved about the genius of Psychonauts 2, the follow-up to the cult classic launched way back in 2005. This action platformer is so much more than its genre convention, an artistic delight with thought-provoking themes, exceptional environmental artwork and an improved mechanical identity. Tim Schafer and Double Fine are best-in-class at establishing tone, incorporating references and focusing on finer details that bring an aesthetic to life. Each level is hand-crafted, from a psychedelic festival to hospital casino, resulting in a bizarre yet comical experience through the psyche that certainly has a mind of its own. Oh, and the year’s best song in Jack Black’s epic “Cosmic I/Smell the Universe.”

3. Forza Horizon 5 (Playground Games, Xbox Game Studios)

Platforms: Xbox Series X|S, Xbox One, Xbox Game Pass (Cloud, Console & PC), PC.

The Forza Horizon franchise isn’t about racing. It’s about driving. The thrill of an open road, the roar of an engine and view of a brilliant sunset just over the.. well, horizon. The fifth entry is set in Mexico and has perfected its formula, more an open world exploration game with events than anything else. The trick behind its excellence is a constant reward loop. Its accessibility features make for smooth steering mechanics which can lean towards arcade or simulation. Collectibles, races, stunt opportunities and campaign stories dot the landscape, offering plenty to do in one of the most beautiful games I’ve ever played. There’s multiplayer, seasonal goals and even a dedicated battle royale mode. Last year, Forza Horizon 5 raced to the top of my favorite driving games of all time.

2. Inscryption (Daniel Mullins Games, Devolver Digital)

Platforms: PC.

It’s wholly inaccurate to call Inscryption solely a deck-building card game. It’s part psychological horror, part escape room and all instant narrative classic with a phenomenal card game as its primary player interaction. It’s the type of multi-layered experience that can’t be described without spoiling its later acts, because it’s so much more than what it initially presents. There’s a meta-story, referential themes, individual character arcs and consistent moments that utterly floored me. Jaw-dropping. Awe-inspiring. Daniel Mullins subverts every expectation and had me hooked on a card game that mainly uses sacrifice to strengthen a deck, a theme paralleled in its later puzzles. The early cabin area is tough, and its second act is probably too long, however I have minimal complaints about this monumental indie masterpiece.

1. The Forgotten City (Modern Storyteller, Dear Villager)

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

And finally, my Game of the Year is: The Forgotten City. A most delightful surprise in a year filled with great games.

If you’ve visited the site or chatted on social media, you’ve seen me tell everyone and anyone who would listen about this masterclass of game design and storytelling prowess that originated as a Skyrim mod. I wrote an unscored review around launch. Now that I’m scoring my critiques, The Forgotten City would easily earn a 9.5 out of 10.

Its setting: an underground Roman city. Its rule: if even a single person sins, everyone dies. The playable character is dropped into this ancient setting, summoned there to figure out who will commit the deed that leads to the city’s demise. It’s a first-person game less about combat, though there is light action mainly via a magical bow, and all about character dialogue, investigating leads and making impossible choices. There’s also the time loop element, resetting the world each time the player fails to uncover its mysteries.

What makes it stand out in the year of time loop games is a deft approach to repetition. Rather than requiring the player to conduct the same interviews and persuasions each run, it has a helpful character named Galerius that assists in carrying out various duties. Each action has a reaction as the player tries to close the loop to create a time paradox, zipping them back to modern times.

Of course, there’s a broader mystery about why someone from present day is suddenly ripped through time to solve this dilemma. Clearly not everything is as it seems. Most character arcs are well-written, especially that of Naevia in a forbidden palace and the lonesome Livia who knows the city’s secret, and its themes center on morality, philosophy, mythology and societal conventions of right versus wrong.

While animations can be janky and it should have more flexible options, The Forgotten City wins this award on the strength of its fantastic writing and revelations around societal conventions of right versus wrong, with multiple endings that reflect what the player considers in each scenario. I can’t recommend it enough. I hope it stands the test of time as one of the single best stories in all of gaming.

Top Five Honorable Mentions (Alphabetical Order):

Chicory: A Colorful Tale (Greg Lobanov, Finji)

Platforms: PlayStation 5, PlayStation 4, Nintendo Switch, PC, Mac.

Death’s Door (Acid Nerve, Devolver Digital)

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

Deathloop (Arkane Studios, Bethesda Softworks)

Platforms: PlayStation 5, PC.

Metroid Dread (Mercury Steam, Nintendo)

Platforms: Nintendo Switch.

Returnal (Housemarque, Sony Interactive Entertainment)

Platforms: PlayStation 5.

And that’s the last of 2021! Switch back over to the megapost for everything Year-in-Review.

Thank you very much to everyone for visiting and chatting this past year.

2021 saw the single best month of visitors for Working Casual (that was August 2021) and this month is already the highest average per day ever for the website. Be safe in the coming year, and look forward to many more posts and coverage of gaming, technology and media soon!

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

Disclaimer: Code was provided by the publisher for Psychonauts 2.

-Dom

2021 Year-in-Review: Independent Studios of the Year

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This might be my favorite post all year. It’s time to specifically shout out the best indie studios of 2021 and their incredible games.

“Indie” has always been a nebulous term that’s difficult to define. Where do we draw the line? Team size? Budget? Scope? Association with a major publisher? To me, it’s elements of these things. Indie teams are usually smaller, self-published or shopping projects around for financing and games are kept at a more focused strategy. However, to me it’s mostly about the team’s spirit and approach when the lines become blurred. Shoot, it might not even be a team. These days, a single individual can make a multi-million seller indie epic.

There are also indies backed, or even purchased, by major game publishers. This post isn’t meant to litigate semantics about what is or isn’t part of this space. It’s a place to talk about which studios or individuals made the best “smaller” or independent projects this past year.

In terms of sheer number, it’s the largest list for this category ever. Nine entries deep! Let’s get on with the festivities, here are the top independent game studios of 2021 in alphabetical order.

Acid Nerve

Mark Foster and David Fenn make up Acid Nerve, a team based out of Manchester that created the awesome Death’s Door, one of the year’s most striking indie games. It’s a dark, isometric adventure game with tricky combat and creative bosses, where the player collects souls in a bureaucratic version of the afterlife. Previous projects include Titan Souls and Telepaint, but 2021 was Acid Nerve’s best yet.

Daniel Mullins Games

I promise this name will come up again during my Game of the Year list. Known previously for Pony Island and The Hex, Daniel Mullins recently created the incredible Inscryption, a deck-building card game I guarantee is like none other. Daniel is mostly a solo developer known for meta narrative and genre-bending, and this formula is perfected with Inscryption which is exquisitely executed, the type of experience that lingers long after it’s done.

Greg Lobanov

Another mostly solo creator is up next in Greg Lobanov for his excellent work on Chicory: A Colorful Tale, a game about self-doubt, artistic vision and ultimate perseverance. Greg, a Philadelphian in Canada formerly known as Dumb and Fat plus maker of Coin Crypt and Wandersong, worked with a small team to make one of 2021’s most layered games about anthropomorphic animals facing real life issues, sparked by a magical visual flare as the player can color its entire environment.

Ember Lab

Pixar-quality action-adventure Kena: Bridge of Spirits was incredibly the first game for Ember Lab, a team led by brothers Mike and Josh Grier who had a history in short film and commercial animation. The team leveraged this prowess to make a gorgeous game about Kena, guide to spirits and friend to cute creatures, which won both best indie and top independent debut at this year’s The Game Awards.

Four Quarters

A team originally based out of Russia and now spread around the globe remotely, the four-person Four Quarters launched the ingenious, enigmatic Loop Hero this past year. This semi-idle game with tower defense, crafting and role-playing elements captured the stage in first quarter 2021, selling over a million units and cementing Four Quarters, previously makers of Please, Don’t Touch Anything, as celebrated indie creatives.

Hidden Fields

Haunting visuals and tense interactions define Mundaun, a psychological horror game and first full-length project from one-man Swiss studio Hidden Fields. Michel Ziegler illustrated and programmed the hand-stenciled game set in the Alps where a man travels back to its hometown to find out more about his grandfather’s passing, and it’s one of 2021’s most dramatic, bizarre and unique indie releases.

Housemarque

Technically no longer independent since its purchase by Sony in June, Housemarque released time-bending action game Returnal in April which has since garnered critical praise and commercial success. As noted in my review, Returnal was the most ambitious and impactful title from the outfit previously focused on fast-paced arcade gems like Resogun and Nex Machina, blending bullet hell elements with run-based elements in splendid harmony.

Iron Gate Studio

Headquartered in Sweden, Iron Gate Studio broke out in 2021 after launching gathering, crafting and building game Valheim which snagged the zeitgeist in February with its Norse world and fantastical setting. At one point, the procedurally-generated title was selling a million units every other week, culminating in upwards of 8 million as of August and spawning many a tale of emergent, co-op interactions and challenging enemy battles.

Modern Storyteller

The final winner is Modern Storyteller, brainchild of lawyer-turned-developer Nick Pearce and creator of the masterpiece that is The Forgotten City. As I alluded in my review back around launch in July, the first-person time loop game set in an underground Roman city began as a Skyrim mod and blossomed into a daring narrative showcase that offers player choice, political intrigue and major morality conundrums. Pearce and team define and even transcend “walking simulator” genre boundaries with The Forgotten City, a staggering storytelling feat that lands them within this group of best indie studios around.

Shout out to all the developers on this most prestigious list and every indie developer working hard during 2021, a most challenging of years that resulted in some of my favorite projects to date. Bounce over to my megapost for all other Year-in-Review categories, including the impending Game of the Year awards.

Sources: Comic Book Resources (Image Credit), Company Websites & Twitter. YoYo Games (Image Credit).

-Dom

2021 Year-in-Review: Five Most Impressive Gaming Companies

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Consistency and quality are the key in this Year-in-Review category.

It rewards those teams at larger publishers or console manufacturers with the most impact on the games industry, whether from a release, investment, expansion, influence or hardware launch standpoint. These are names most will recognize, standing at the top of their respective games. The work of their development teams and publishing arms shaped the broader industry in 2021, resulting in some of the most remarkable experiences of the year.

While I’m celebrating bigger companies here, I want to take a moment to say again how I stand behind workers fighting back against toxic regimes at companies like Ubisoft and Activision Blizzard, both of which (among others like Bungie and Riot Games) will most certainly not make this list right now. I’m excited to see efforts towards collective action and even unionization because these companies are their people, not just their executive teams. There’s no place for harassment here.

Note: My next article will highlight independent creators. This is reserved for publicly-traded or high valuation companies.

Here they are, the top five most impressive companies of 2021, in alphabetical order.

Capcom

The largest third-party Japanese publisher focused on high quality over quantity in 2021. Its two flagship launches in Monster Hunter Rise and Resident Evil Village were among the year’s most critically-acclaimed and commercially-successful, continuing a recent reinvigoration of both franchises. Round out its annual schedule with Monster Hunter Stories 2, Great Ace Attorney Chronicles, a handful of classic game collections plus even Resident Evil 4 for virtual reality (props to anyone who can play that!).

Monster Hunter Rise was made specifically for Nintendo Switch, existing somewhere between Monster Hunter World and earlier franchise titles centered on handheld play. It worked masterfully, an addicting gameplay loop that’s perfect for portable play. After shipping 4 million units in three days back in March 2021, it’s since surpassed 7.5 million units to already become the third best-selling game in series history.

Since its launch in May, Resident Evil Village has shown up on many an award list for its adaptation of the survival horror formula. Perhaps more memorably, the multi-platform follow-up to 2017’s Resident Evil 7 Biohazard spawned the vampire mother and ongoing meme that is Lady Dimitrescu. It was the fastest-selling series launch alongside Resident Evil 6, moving 3 million units across four days. After shipping an additional 2 million since, it now stands at 5 million to date.

I’m fully praising Capcom’s internal teams for adapting in a changing world and producing at least a couple of the year’s most celebrated big budget releases.

Devolver Digital

Devolver is the type of unique game company with a scrappy, start-up mentality that was also valued over $1 billion when its stock listed in London in November making it the largest U.S. company to trade on the stock exchange. Its games are all from smaller teams, and it explicitly makes fun of press conferences from larger counterparts during E3. The portion of its website showing accolades is called Propaganda.

That’s Devolver in a nutshell. And I’d argue 2021 was its best year to date.

It’s a publishing outfit, previously working on re-releases and lately coordinating with tighter-knit independent creators to market their projects around the world. Last year alone it produced the following: Inscryption from Daniel Mullins Games, Loop Hero by Four Quarters, Acid Nerve’s Death’s Door, Boomerang X made by Dang! plus Olija which was created by Skeleton Crew Studio.

These titles, notably the first three, are everywhere this award season and all signs point to solid sales as well. Inscryption is celebrated as one of the best deck-building card games ever, pushing 250K units on Steam alone. Loop Hero, which set its own genre somewhere between idle game and tower defense, has now sold well over a million units. Death’s Door is a critical darling with over 100K copies in a week. The totally rad Boomerang X flew under-the-radar, a quiet yet sensational compact experience.

Devolver is made up of smart, savvy talent finders which led to multiple games that defined the indie space in 2021.

Epic Games

Yes. Epic Games is, at first glance, Fortnite. 2017’s battle royale sensation is still one of the most relevant games because it pushes boundaries of collaboration, creation, intellectual property crossover and live event experimentation. Epic Games has effectively established a “metaverse” at a time when most other companies are talking about doing so. Which is impressive enough on its own.

This year alone, Fortnite added more characters and cosmetics from a range of different brands or gaming franchises: Marvel, Warner Bros, Halo, God of War, Street Fighter, Tomb Raider and others I’m forgetting. It’s probably the only place where Master Chief can have an epic battle with Kratos. Epic moved the game into its third chapter recently while expanding its event approach during 2021, showcasing Ariana Grande’s Rift Tour and the Soundwave Series of concerts headlined by Egyptian singer Mohamed Hamaki.

However Epic is also making deals, investments and partnerships while continuing its Epic Game Store growth with content offerings and major sales. This past year, it purchased Fall Guys creator Mediatonic, RAD Game Tools, ArtStation, Sketchfab and even Rock Band maker Harmonix. That’s not even to talk about its game engine business, moving into Unreal Engine 5 technology which was recently shown off via The Matrix Awakens and is now in the hands of developers making games for the latest generation of consoles like Senua’s Saga: Hellblade II and the next Mass Effect. It’s one of the most popular engines in the world, leveraged by film studios to game designers everywhere.

Epic Games’ valuation is estimated at upwards of $42 billion, up from under $30 billion in April. Its strategy is all-encompassing, with the ongoing, evolving ecosystem of Fortnite supplemented by various other businesses, experiences and its digital storefront.

Square Enix

When talking sheer software output, not many companies rivaled Square Enix during 2021. The Japanese developer-publisher moved a whirlwind of games and expansions, one of which was so successful that it had to stop selling it temporarily.

Its lineup ran the gamut. Marvel’s Guardians of the Galaxy. Life is Strange: True Colors. Outriders. Bravely Default 2. Balan Wonderworld. Neo: The World Ends With You. Voice of Cards: The Isle Dragon Roars. NieR Replicant (insert many numbers here). Final Fantasy XIV: Endwalker. Even Final Fantasy VII Remake for PC snuck in during December. Sprinkle in re-releases of catalog titles, and it was a busy time for its teams.

Now some of these were better than others, granted. I’d argue there’s more good than bad. Marvel’s Guardians of the Galaxy is a sleeper Game of the Year contender and one of the best comic adaptations in recent years. Life is Strange: True Colors continued its franchise’s narrative legacy and produced one of the best main characters of 2021 in Alex Chen. Outriders had a major moment in April, launching simultaneously into Xbox Game Pass to reach 3.5 million players in a month. Bravely Default 2 has sold a million units worldwide.

Then there’s Final Fantasy XIV, one of the sweetest redemption stories in all of gaming since a shaky start over a decade ago. On the strength of its Endwalker expansion this year, the MMORPG became the most profitable game in Final Fantasy history, reached 25 million registered accounts and established a new record for concurrent players. In December, Square Enix had to halt new sales and trials because its servers couldn’t handle player load. If that’s not a good problem to have, I don’t know what is.

Traditional console and PC gaming isn’t the only vertical within its portfolio. Others include mobile, arcade, amusement, film, manga and merchandising of its various brands. While overall sales and profit are currently down slightly from last year’s highs, it expects annual revenue growth of 2% driven by these new launches plus the ongoing momentum of its MMORPG unit.

While I was disappointed to see a New Year’s letter from President Yosuke Matsuda talk mostly about metaverse and NFTs, two questionable corporate buzzwords I mentioned in my Year-in-Review trends post, employees at Square Enix produced several noteworthy games and continued significant ongoing player support in 2021.

Xbox Game Studios

During this same category last year, I awarded Microsoft overall a slot at the top at the start of its new Xbox Series X|S generation. This year, I’m celebrating the individual unit that is Xbox Game Studios for its dazzling array of consistent output. Major internal investment and studio purchases, headlined of course by $7.5 billion ZeniMax deal which closed in March, began bearing fruit. This was perhaps the best year in history for Xbox on the software production side.

Several of its now 23 development teams had banner new releases, even if some of them weren’t technically exclusive to Xbox or platforms where Xbox Game Pass exists. Two of these, Forza Horizon 5 from Playground Games and Double Fine Productions’ Psychonauts 2, were among the year’s five highest-rated on review aggregator OpenCritic. This, hm.. drove Forza Horizon 5 to the largest software launch in Xbox history, attracting a staggering 10 million players its first week alone.

Then there’s Halo Infinite, of course. The one-two punch of multiplayer and campaign are a franchise revitalization. While Xbox hasn’t shared statistics yet, I’m on record betting the latest Halo installment from 343 Industries had even higher engagement. Deathloop from Arkane Studios was a lock for year-end “best of” lists, while Age of Empires IV from Relic Entertainment was one of the premier PC launches of 2021.

On the ongoing support and catalog side, Sea of Thieves from Rare sailed past 25 million players back in October. It’s quietly one of the biggest success stories for Xbox in the last decade. A small team at Obsidian Entertainment released Grounded into early access, plus Microsoft Flight Simulator from Asobo Studio saw its console debut.

Because of contracts signed prior to recent acquisitions, Deathloop was actually a PlayStation 5 exclusive while Psychonauts 2 hit a variety of different platforms. To me, that doesn’t take away from the accomplishments of everyone within Xbox Game Studios whether long-time employees or recent joiners. That’s multiple Game of the Year contenders, if not winners, and major contributions to the industry made or published by Xbox this past year.

This celebration of those working at major gaming companies marks the halfway point of 2021 Year-in-Review here at the site. Check back to the megapost for all articles. Be safe, all!

Sources: Company Investor & Media Sites, Financial Review, Mohamed Hassan (Image Credit).

-Dom

2021 Year-in-Review: Biggest Trends in Gaming, Tech & Media

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2021 was defined by a handful of major trends in gaming, technology and media, many of them centered around workplaces, culture and emerging technologies that even those involved might not fully understand.

It was another year of buzzwords within tech, as often happens. Cryptocurrency. Blockchain. Non-Fungible Tokens (NFTs). Meme Stocks. Metaverse. Within gaming, people spoke out against corporate toxicity and harassment. Mobile’s growth trajectory withstood as other areas cooled from the peaks of quarantine times, especially amidst supply concerns for hardware. For social media, the infamous Facebook Files, TikTok’s dominance and Twitter’s CEO departure hit the headlines.

Time to dig into six of the most significant trends of 2021. Fair warning, it’s not all good!

Workplace Culture & Whistleblowing

This story is a holdover from my 2020 list, and it’s only gained in relevancy this past year. More people were louder than ever on toxic cultures in the workplace or poor actions by executives, especially at big gaming publishers and social media giants. Over the summer, both Ubisoft and Activision Blizzard faced lawsuits related to discrimination and institutional harassment. Employees banded together to fight back against executives, to varying degrees of success.

Then there’s Facebook, now Meta, which saw a September leak reveal its self-realization of the harm it can cause younger users and its contributions to extremist activities worldwide. Not to mention the potential for fake research and incorrect information across its platforms. This is all thanks to whistleblower Frances Haugen and media investigations.

2021 did see some bright spots in these areas. Vodeo Games was the first gaming company in North America to formally unionize in December. Just recently, an IGN article detailed slightly improving conditions at Bungie while the Washington Post reported Riot Games must pay $100 million to settle a 2018 discrimination lawsuit. Toxicity at work and a “boys club” mentality is still prevalent in many industries. The hope is the more people talk about it, the more bad actors depart and these companies clean up their acts.

GameStop & Popularity of Meme Stocks

In a perfect swirl of internet camaraderie, corporate resistance and capitalist tendencies, 2021 became the year of the “meme stock” highlighted by names like GameStop and AMC Entertainment. At one point in January, GameStop closed at almost $350 per share. It opened the year under 20 bucks.

The frenzied swings of stocks like these are mainly due to online communities, especially Reddit’s WallStreetBets, forming narratives and collectively pushing them to historic highs. They tend to target securities with major short interest, which means a lot of other people were betting their prices would decline, to cause a massive upsurge in buying which skyrockets a stock’s intermittent value.

It’s the type of trend amplified these days when everyone is online, with entire sub-sections of the Web dedicated to chest-puffing against retail investors and major investment firms. A super curious phenomenon, especially when the underlying companies aren’t changing in value. It’s all about the market’s short-term perception. We couldn’t go a few days at times in 2021 without hearing about meme stocks, even from people who aren’t usually interested in social media or digital communities.

The Unavoidable Blockchain, Cryptocurrency, NFTs & Play-to-Earn

Apologies. I had to bring it up. It’s everywhere nowadays in tech, impossible to avoid plus impregnable for even those well-versed in the sector.

And that’s the undying realm that is blockchain, crypto and NFTs. Terms that you’ve probably heard numerous times now, whether via online posts or bros at a dinner table, and still find them wholly impenetrable. That’s because they are, plus it’s only getting worse.

These topics aren’t necessarily new at all. And I won’t dig into the specifics, that information is out there. Technologies surrounding digital ownership of goods, alternative forms of currency and decentralized systems have existed for years. It’s just the loudest right now. That’s primarily because of the astronomic popularity of NFTs, which are mainly used to make (or even launder) money under the guise of owning rights to a digital image.

Environmental impact, regulatory ramifications and opportunities for theft take a backseat to profitability in these realms, especially as company management teams start thinking of ways to capitalize and integrate into their products. Within gaming, that’s where areas like “Play-to-Earn” pop up in a ploy to entice people to play for the sake of generating money as opposed to leisure. Ubisoft introduced Quartz within its floundering Ghost Recon Breakpoint while developer GSC Game World tried, and failed, to incorporate NFTs in the forthcoming STALKER 2. This trend isn’t going anywhere, so I wager it could be a part of my 2022 predictions thread soon.

The Buzzword That Is The Metaverse

Every now and again, those at the top run a term into the ground to where it feels old before it’s even realized. That’s how “Metaverse” felt in 2021, a somewhat nebulous term combining aspects of augmented spaces, virtual reality, video connectedness and low quality online avatars to create a digital world where people can exist alongside one another. Lately it’s used by various companies claiming each wants to build the singular place where people can get together virtually.

Shoot. Facebook even changed its name to Meta in an attempt to monopolize the term.

This metaverse is another concept that’s not necessarily brand new. Just that lately, corporations see a clear opportunity to monetize a fancy buzzword and layer it on top of their existing brand identity. The aforementioned Meta, Microsoft, Apple, Alibaba, Epic Games, Roblox, Niantic and plenty more are using this phrase to describe its virtual offerings.

But what the heck is a metaverse and which will be the “one” that works a la the OASIS from Ready Player One? Well, many experts (and writers like yours truly) don’t think it’s possible. The space is too fragmented, companies are inherently driven to differentiate services rather than collaborate and getting all users to agree on a single platform is impractical. If 2021 is any indication, there will be much smaller, less defined metaverses competing for our virtual selves.

Hardware Shortages, Supply Chain & Product Delays

The global semiconductor shortage that heightened in 2020 partly because of coronavirus shutdowns had the carry-on effect of slowing all sorts of consumer industries including consumer technology, video game hardware, mobile phones and automobiles. Anything that used a chipset was more expensive to build and took longer to distribute in 2021, leading to supply shortages everywhere.

A major result is this combination of low availability and launch delays. Using the example of gaming consoles, the latest generation of PlayStation 5 and Xbox Series X|S were notoriously difficult to purchase this past year. When retailers did have inventory, it was short-lived and prone to scalping. Then there’s the console delays, including Valve’s Steam Deck and Panic’s Playdate handheld among others were pushed into next year.

Even so, there’s data showing resilience propped up by demand. Sony said PlayStation 5 shipments reached upwards of 13.3 million as of the quarter ending September. Sell-thru to consumers is higher than PlayStation 4. Nintendo Switch reached nearly 93 million sold lifetime, even as the company reduced its annual target for this fiscal year. Microsoft doesn’t share public figures, though anecdotally and from U.S. data, the Xbox Series S is more prevalent likely due to lower input costs. The NPD Group shows hardware sales up 20% in the U.S. through November 2021, even if compared to late console generation cycle the prior year. Unfortunately, many covering the chip industry think the supply chain issues will continue through 2022 and even beyond.

Mobile Driving Increased Global Games Industry Spending

Revenue numbers are in for the global games space, where overall value was up slightly in 2021 on a year-over-year basis. That’s attributable to gains in mobile and digital spending, while areas like console and personal computer (PC) dipped overall. Digital skew leads the charge as downloadable games plus additional content increased in traction and revenue generated.

According to Newzoo, worldwide video games industry value surpassed $180 billion in 2021. That’s up 1.4% since 2020, a durable figure that illustrates consistent spending on mobile experiences. Mobile as a category contributed $93 billion, showcasing 7% growth. Console was the next highest grouping, declining 7% to $50 billion. PC gaming reached $37 billion, down around 1% since 2020.

Overall, digital sources contributed 93% compared to 91% during 2020. Within console gaming, 77% was digital which is up from 72% prior year. Within mobile, Garena Free Fire led downloads with nearly 230 million. Subway Surfers and PUBG Mobile rounded out the Top 3, with 181 million and 172 million respectively. From a revenue standpoint, Honor of Kings, PUBG Mobile and Genshin Impact drove mobile sales.

On Twitter, Genshin Impact was the most-discussed title around the world followed by Final Fantasy XIV and Apex Legends. Looking at Google’s analytics, PopCat, FIFA 22 and Battlefield 2042 were the most searched. The top-selling games in 2021 for the U.S. as of November were topped by the two most recent Call of Duty titles, Black Ops Cold War and Vanguard in that order, followed by Madden NFL 22.

This recap of an eventful, and sometimes disheartening, year marks the first Year-in-Review post for 2021. Pop over to the megapost for more categories!

Sources: Christian Wiediger (Photo Credit), GamesIndustry.Biz, IGN, Marvin Meyer (Photo Credit), Meta Inc, Newzoo, Wall Street Journal (Photo Credit), Washington Post, Ubisoft.

-Dom

2021 Year-in-Review Megapost Is Now Live

DomsPlaying

The end is only beginning!

2021 is coming to a close. The past 12 months fit with the recent trend of years being difficult, trying and, very occasionally, magnificently rewarding. The ongoing coronavirus pandemic, which feels like it both started yesterday and has always been a part of our collective lives, continues as the biggest headline, impacting both our physical well-being and mental health. I like to believe humanity is strong enough to push through it, even if 2021 rebutted this theory at every turn.

Major news stories included insurgents at the U.S. Capitol, President Joe Biden’s inauguration, the Ever Given disrupting global commerce by getting itself stuck in the Suez, COVID booster availability amidst the widespread omicron variant, an Olympics like none other, plus some rich people throwing money around so they could go to space.

Closer to home within gaming, technology and media, this Year of the Game Delay brought about some of the best content and worst trends ever. The Facebook Files and social media whistleblowers. GameStop as the premier meme stock with the rise of Reddit traders. Executives repeating the word “metaverse” as many times as they possibly can while pretending it’s a new topic. The inscrutable nuisance that is the non-fungible token (NFT) alongside the burgeoning, disheartening “play-to-earn” gaming trend.

Of course, there’s the omnipresent semiconductor shortages and supply chain issues making it near impossible to find a PlayStation 5 or Xbox Series X. Unless perhaos you happen to be a bot or scalper? Nintendo Switch’s new OLED model launched in the fourth quarter, cementing the hybrid handheld’s momentum on the charts. And, most importantly, the loud, ongoing relevance of challenging toxic workplace culture and harassment practices at companies including Ubisoft, Bungie and Activision Blizzard. (It’s a shame Bobby Kotick still has his job as I write this.)

Over the next few days, I’ll be recapping the year that was 2021. Once I wrap up writing about the biggest trends, it’s time to showcase what I thought was a consistent year in media and gaming especially, with a variety of high quality AAA titles and indie projects. First I’ll talk about larger publishers, then the more tight-knit indie scene before the grand finale: The ten best games I played all year.

This post acts as the central point for all things Year-in-Review here at Working Casual. Our categories are:

Biggest Trends in Gaming, Tech & Media

Five Most Impressive Gaming Companies

Independent Studios of the Year

Dom’s Top 10 Games of the Year

Set the bookmark and check back often! Happy Holidays and a safe, healthy New Year to all!

-Dom