Tag: Gaming

Microsoft Gaming Sales Decline in 2023 Q2 Despite Xbox Monthly Active Users Reaching Record 120 Million

DomsPlaying2 Comments

First up on the new year’s earnings calendar is Microsoft, which reported its fiscal 2023 second quarter results last week.

Results were mixed in the holiday period for the software giant and its Xbox business, mostly expected coming off last year’s all-time highs. Just last quarter, gaming had its best Q1 ever.

That’s not the case for Q2, where normalization towards pre-pandemic levels has started in earnest. Even so, it was still one of the best quarters in Xbox history, which is important to keep in mind as headlines are often gloomier than reality.

In the three months ending December, Microsoft’s gaming revenue showed a double digit decline for the first time in three years. Mainly due to a sparse exclusive game slate, lower third-party monetization and ongoing hardware challenges. From a dollar standpoint, it was still the third best Q2 ever for Xbox, as I’ll illustrate soon. The sky isn’t anywhere near falling.

Executives tried to paint a picture around engagement and Xbox Game Pass while not providing any updated subscription numbers for its flagship service. On the bright side, they did share an updated figure for Monthly Active Users (MAUs) across the Xbox ecosystem as it passed a major milestone by year-end.

“In gaming, we continue to pursue our ambition to give players more choice to play great games wherever, whenever, and however they want,” said CEO Satya Nadella. “We saw new highs for Game Pass subscriptions, game streaming hours, and monthly active devices.”

I’ll now move into the underlying numbers for the latest quarter, then provide a look ahead to the back half of Microsoft’s fiscal year.

Between October and December, Xbox generated $4.76 billion in revenue which is 13% lower than the same time last year. That was in-line with guidance. While this number is the lowest it’s been in three years, it’s the third best Q2 in history only behind the latest two.

This historical context really illustrates the sort of impact quarantine spending had on the industry, as just last year Xbox recorded an all-time second quarter revenue high of $5.44 billion.

Executives pointed to this strong comparable as the main reason Xbox suffered declines across first and third-party content plus lower hardware sales output. I wouldn’t necessarily call it an outright disappointing holiday season; it’s just not nearly as good as last year.

One caveat is currency impact on this figure. You’ll see in the above slides that total gaming sales were down 9% in “constant currency.” This implies a 4% impact from exchange rate movement. I tend to report the overall figure because global companies must navigate these shifts, while also noting this particular point when fluctuations are especially drastic.

Taking into account the latest quarter, current annual gaming revenue stands at $15.56 billion. As shown in my chart, Xbox segment sales have been slowing lately after peaking around a year ago. It was bolstered by last holiday’s record quarter until now. This chart also keeps quarterly movement in context as it smooths out the results, displaying how well gaming has been faring versus the Xbox One generation.

Within these articles I like to run a quick comparison to industry peers, even this early in the season. Tencent currently has the most annual revenue from gaming, at upwards of $25.8 billion. Sony reached $20 billion. Here is where Microsoft’s $15.56 billion slots in, while Nintendo rounds out the list at $13 billion. If accounting for Activision Blizzard’s latest $7.4 billion in annual sales and assuming roughly $2 billion in redundancies and overlap, the combined entity could have between $20 billion to $21 billion in annual gaming output, potentially matching PlayStation depending on where exchange rates go.

Now, revenue isn’t the sole metric by which a division’s health is measured. Microsoft doesn’t share specifics on Xbox’s profitability, so we’re left to infer here based on its More Personal Computing (MPC) business segment results. Gross margin dollars reduced by 29%, driven by a mix towards lower margin businesses that include gaming. Expenses rose 6%, thus segment operating income dropped 47% to $3.32 billion. All of this implies profitability dropped in the quarter for Xbox, consistent with its lower sales output.

Moving over to category mix to show the underlying dynamics. Within the Xbox business, both sub-segments of Xbox Content & Services and Xbox Hardware experienced comparable double-digit declines as the business cooled.

The larger contributor Content & Services, which includes software and subscriptions, lowered 13% in the quarter. Right at company guidance. It accounted for $3.38 billion in sales, or 71% of Xbox’s total. Nearly the same contribution as last year, and lower than recent quarters since its hardware counterpart has been inconsistent.

During the last 12 months, Content & Services has generated $12 billion in revenue, making up 77% of annual gaming sales. It’s been at that same exact percentage for the last six consecutive quarters.

As has been tradition, Microsoft yet again didn’t share an update on Xbox Game Pass subscription figures. The latest of 25 million is way outdated, from back around September 2021. I often say that we learn just as much, if not more, from what a company doesn’t share. This is one of those cases. I assumed Microsoft would boast when it passed 30 million subscribers, so I assume it’s below that right now. In my predictions piece for 2023, I said it could reach that threshold by Microsoft’s fiscal year-end in June and move higher in the back half on the strength of new releases. I just hope Microsoft is more transparent, at some point.

Thankfully executives did provide another engagement stat: MAUs for the Xbox network overall. Finally. Two years ago, this figure crossed the 100 million user threshold. Now, according to Nadella, it’s at a record 120 million. Thus recently averaging 10 million per year in user growth and nearly double the 65 million achieved back in fiscal 2019. It makes sense that management would point to this within its strategy that emphasizes ecosystem over hardware, expanding its offering to more devices than ever and making a play that stacks up accounts as opposed to unit sales.

Rounding out the category mix with Xbox Hardware, this segment declined 13% to $1.38 billion. The slides cited both a lower average price and number of units sold compared to last holiday, which I’d call somewhat of a concern at this early life cycle stage. Also concerning is the dollar output, which is less than the second quarter in both 2018 and 2019 during the middle of last generation. It shows a few things: hardware is less important to the overall Xbox business than ever before, the lower-priced Xbox Series S is contributing a substantial share plus supply constraints continued into the quarter as competitors were able to better navigate the cost environment.

On an annualized basis, Xbox Hardware is tracking at $3.6 billion in sales right now. The lowest in six quarters. It bucks the trend of a traditional console cycle, where sales should be increasing in the early years. Note that the Xbox Series X|S family of devices launched in November 2020.

It begs the question: How many Xbox Series X|S consoles have shipped to date? Last quarter, I estimated between 17.5 million and 18 million. Given the revenue indicators and supply situation, I guess it’s approaching 21.5 to 22 million at this point, implying around 4 million shipped in the holiday quarter. This would be virtually in-line with Xbox One at this point in the life cycle (22.1 million). My estimate is partially because I notice Nadella is no longer boasting the family as the fast-selling in Xbox history. And it’s nowhere near its current generation counterpart. Sony’s PlayStation 5 recently passed 30 million sold-thru to consumers, and was already at 25 million lifetime shipped in September, showing strength in availability towards the latter parts of calendar 2022.

Fitting the general themes of macro pressure on tech in particular, Microsoft overall had its slowest quarterly growth in six years and missed analyst estimates. Top-line sales rose 2% to $52.7 billion, while analysts thought it would be above $53 billion. Microsoft Cloud alone increased 22% to $27.1 billion in sale, which met expectations. MPC was the only segment to decline, moving down almost 20% to $14.2 billion on PC market weakness and high output last year.

On the profit side, operating income declined 8% to $20.4 billion. Profitability was impacted by a $1.2 billion charge related to laying off 10,000 employees, or 4.5% of its workforce, which the company announced earlier this month. That’s a lot of talented people losing their jobs, notably in a shift towards artificial intelligence businesses, and I hope they are able to find success elsewhere.

General slowdowns hit both Microsoft and its Xbox division during the holiday period, even if it was still one of Xbox’s best quarters when compared to recent history. Higher Xbox Game Pass subscriptions propped up weakness elsewhere, especially the first-party game lineup, and hardware results reveal that the Xbox Series X|S family needs to ramp up supply as soon as possible.

I’ll finish up here with guidance for the next quarter, ending this March, according to Chief Financial Office (CFO) Amy Hood.

Management expects gaming revenue to decline in the “high-single digits.” Assuming it’s down 8%, that implies quarterly Xbox revenue of $3.44 billion. Its lowest in three years.

Xbox Content & Services revenue will decline in the “low-single digits.” Hood claims Xbox Game Pass user growth will outpace “lower monetization per hour” in both first and third-party games. It’s a corporate way to say subscriptions will rise while active engagement, and thus spending, will be down. Let’s assume the decline is 5%, implying Q3 sales of $2.86 billion from Xbox Content & Services.

Microsoft didn’t actually provide an outlook for Xbox Hardware. Based on the above, signals are pointing to another double-digit drop that might be upwards of 20%. The current quarter is a continuation of last year, where first-party output is light and the supply of Xbox Series X in particular will be hamstrung.

Still, the calendar will pick up soon as Xbox Game Studios will publish Minecraft Legends in April then Redfall in May. Thing is, I’m not expecting either of these to move the needle in a major way on the financial side. Certainly not as much as something like Starfield or Forza Motorsport, both of which are slated for this year without a concrete window. Personally I’d be surprised if Starfield makes it out by the fiscal year-end in June.

Speaking of June, Microsoft management reiterated on the conference call that, while its guidance doesn’t include any impact, they continue to anticipate the $69 billion Activision Blizzard deal will close by then. I’m way more skeptical on that front, as displayed in my aforementioned predictions article.

Thus ends my first big recap of 2023, in what will be a shaky quarter for many public companies across the games industry and related sectors. Check back soon for more analysis and a full rundown of results for platform holders Sony and Nintendo. Thanks for reading! Be well, all.

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

Sources: Company Investor Relations Websites.

-Dom

Annual U.S. Games Industry Consumer Spending Declines 5% in Final NPD Group Sales Report of 2022

DomsPlaying

Better late than never!

Data firm The NPD Group has shared its final games industry sales report for 2022 tracking spending in the United States. Within, it showed a modest sales decline since last year. Mostly expected during the start of a regression towards pre-pandemic values after an all-time best the prior year. There was resilience in the final quarter as bigger games hit market and supply concerns eased, minimizing the downward movement and making 2022’s $56.6 billion the second best year on record behind 2021’s $59.6 billion.

Not bad, all things considered.

During this piece, I’ll recap both the most recent monthly results and annual figures. Buckle up for an in-depth read.

December was one of the brighter reports compared to earlier months, ending a fourth quarter recovery that made full year figures look much better. The big holiday period was the second straight month where total spending increased, after a number of months either down or flat.

That’s even considering a very slight decline in the major category of Video Game Content, which measures software, mobile, subscriptions and related spending. Call of Duty, Pokémon and Madden NFL led the charge here, as often happens. For Video Game Hardware, the only category that grow in 2022 to a best-ever result, Sony’s PlayStation 5 console and Nintendo’s hybrid Switch both spent time atop the monthly rankings.

“Factors impacting 2022 spending included continued supply constraints of console hardware, a relatively light slate of new premium releases and macroeconomic conditions,” said The NPD Group’s Mat Piscatella.

As I’ve covered in the past, 2021 was the height of pandemic spending for many regions, including the States. 2022 proved to be the anticipated regression towards more normalized results, exacerbated by mobile weakness and inflationary pressure on people’s wallets. Still, Q4 showed there’s still substantial demand for big budget premium games and new hardware when it’s actually available at retail.

There’s also the cultural touchstone that was Elden Ring, nearly out-earning Call of Duty, which broke into the mainstream zeitgeist more than any FromSoftware game could ever do in the past. Combine that with annualized sports releases, a dual launch year for Pokémon and exceptional showings from Sony-published exclusives, and premium gaming helped offset mobile’s under-performance.

Check below for a full recap of each category last year and a look forward towards 2023.

United States Games Industry Sales (November 27th, 2022 – December 31st, 2022)

Total consumer spend on gaming within the U.S. rose 2% in December, to $7.58 billion. Driven by double-digit gains in the hardware category that more than offset losses elsewhere. This fits the growing trend along with October’s plateau and November’s increase towards growth.

That strength in the final quarter pumped up full year spending to $56.6 billion, which ended up being down 5% compared to 2021. Growth areas like console and subscriptions weren’t enough to out-gain losses in premium software and mobile, also hurting due to macro pressures like inflation.

The largest category of Content dipped a modest 1% in December, down to $5.55 billion. Which means it made up 73% of overall monthly spending, compared to 75% in November. Holiday demand and mobile regaining footing contributed towards the upside.

Speaking of mobile, this sub-segment returned to growth in December as geolocation, simulation, action and shooters gained ground. Still, 2022 became the first 12 months in tracked history where people spent less than the prior year on mobile. Shooters exhibited a most precipitous decline at 26% while casino gains proved popular, moving up 1%. Candy Crush Saga, Roblox and Coin Master were the year’s Top 3 earners here.

Call of Duty: Modern Warfare 2 repeated as December’s best-seller on the premium list, which it’s done each month since October’s launch. This led to Activision Blizzard’s military shooter earning the top spot on 2022’s overall rankings as well, as I predicted. That marks a staggering 14 consecutive years where a Call of Duty game was the country’s best-selling title.

Familiar faces continued on the premium best-sellers list for December as Pokémon Scarlet & Violet and God of War: Ragnarök generated the 2nd and 3rd most dollar sales, in that order. Elden Ring benefited from solid demand during the holiday season, returning to the Top 10 at #7.

Late year launches Need for Speed: Unbound and Crisis Core: Final Fantasy VII: Reunion started in 8th and 10th, respectively, a quite good showing considering the heavy hitters around it. The only other new title Callisto Protocol under-performed in 17th place, partially because its digital portion was not included. Even if downloads were considered, I’m skeptical it would have cracked the Top 10.

As mentioned before, Call of Duty: Modern Warfare 2 was the year’s best-seller. In fact, there were two Call of Duty entries among the Top 12 as people somehow retained interest in 2021’s Call of Duty: Vanguard. Then, Elden Ring and Madden NFL 23 rounded out the Top 3 for 2022. Sony’s PlayStation publishing arm had a sensational year with three single-platform games in the Top 13 and another developed title in the Top 10. God of War: Ragnarök finished ahead of bellwethers like Pokémon and FIFA while Horizon Forbidden West and MLB: The Show 22 scored Top 10 spots. Other observations include over-performance of Nintendo’s Kirby and the Forgotten Land floating to #14 and Sega’s Sonic Frontiers speeding up to #16.

Here’s a full look at the software lists for December and 2022 overall, including our first look at the top-grossing mobile titles.

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

  1. Call of Duty: Modern Warfare 2
  2. Pokémon Scarlet & Violet*
  3. God of War Ragnarök
  4. Madden NFL 23
  5. FIFA 23
  6. Sonic Frontiers
  7. Elden Ring
  8. Need for Speed Unbound
  9. Mario Kart 8*
  10. Crisis Core: Final Fantasy VII: Reunion
  11. NBA 2K23*
  12. Just Dance 2023
  13. Mario + Rabbids: Sparks of Hope
  14. Minecraft
  15. Super Smash Bros. Ultimate*
  16. Nintendo Switch Sports*
  17. The Callisto Protocol*
  18. Animal Crossing: New Horizons*
  19. Splatoon 3*
  20. Gotham Knights

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

  1. Call of Duty: Modern Warfare 2
  2. Elden Ring
  3. Madden NFL 23
  4. God of War Ragnarök
  5. Lego Star Wars: The Skywalker Saga
  6. Pokémon Scarlet & Violet*
  7. FIFA 23
  8. Pokémon Legends Arceus
  9. Horizon Forbidden West
  10. MLB: The Show 22^
  11. Mario Kart 8*
  12. Call of Duty: Vanguard
  13. Gran Turismo 7
  14. Kirby and the Forgotten Land*
  15. NBA 2K23*
  16. Sonic Frontiers
  17. Gotham Knights
  18. Minecraft
  19. Nintendo Switch Sports*
  20. Super Smash Bros. Ultimate*

Top-Selling Games of 2022, U.S., Mobile (Top Grossing):

  1. Candy Crush Saga
  2. Roblox
  3. Coin Master
  4. Royal Match
  5. Pokémon Go
  6. Evony
  7. Clash of Clans
  8. Homescapes
  9. Bingo Blitz – BINGO Games
  10. Jackpot Party – Casino Slots

The Hardware category is up next, as December generated upwards of 16% growth to $1.53 billion. I believe this might have been a record December month for the console category as inventories flooded the market during the holiday rush, notably from Sony’s suppliers. It also proves that demand is constant at this point in the cycle, which it really should be.

Expanding to the last 12 months as a whole, Hardware sales reached $6.57 billion, jumping up from $6.1 billion in 2021. The NPD Group did say this amount was an all-time best, an incredible achievement considering how slow this segment began the year.

PlayStation 5 leveraged better inventory to become the best-selling console by dollar sales during both December and 2022 as a whole. It was the first year since the new console generation in 2020 that Nintendo Switch didn’t lead on revenue. Big budget IP like God of War and Horizon plus a premium racing game in Gran Turismo 7 bolstered the console, alongside its higher price point that lifted up the revenue side. In the back half especially, Sony’s suppliers seemed to be the best at adapting in this supply environment to secure enough shipments to satisfy pent-up demand.

Even so, Nintendo Switch did win December and 2022 when measured by units, boosted by its more attractive cost and appeal to households that want more than one gaming device. While it didn’t have any pure flagship titles outside of Pokémon, a series which somehow launched two best-sellers in Pokémon Legends Arceus and Pokémon Scarlet & Violet, Nintendo always produces high quality titles that strengthen system sales as series like Kirby and Switch Sports amplified the lineup.

While the Xbox Series X|S came in third place during December and the year on all metrics, it held its own during a tough time for consoles. Microsoft continually cited how it had the best start of any Xbox console in history, albeit at a global scale. There were a few months in 2022 when it achieved second place, though its Series X model in particular seemed to be hit especially hard by supply challenges. The Series S doesn’t generate as much revenue, so Xbox doesn’t compete as much when it comes to monthly best-sellers even in its home market. Not to mention, its slate of first-party software was sparse, which didn’t help.

The general tone of the console business turned quite upbeat as the year went on, ending with a great December and up nearly double-digits for 2022. It’s also a positive sign of things to come, as I’m turning bullish on this portion of the market.

The final segment of Video Game Accessories saw the biggest declines during both December and 2022 as a whole. Last month, spending here dipped 2% to $503 million.

Unfortunately, The NPD Group didn’t share which accessory was the best-selling of the month. Lately it’s been a version of the PlayStation 5 DualSense controller, however there’s a chance that an Xbox game pad took home the win. I have a question out to the team for comment.

It follows that for the year, spending in this category fell 8% to $2.51 billion. Microsoft’s Xbox Elite Series 2 Wireless Controller ended 2022 as the year’s best-seller here, a popular upgrade choice for core players that benefits in comparisons like this because of a hefty price tag.

That’s a wrap on the final domestic sales report of 2022. It was a transitory year for the industry, as certain areas returned towards the mean while others under-performed. Mobile weakness, less premium AAA launches and a seemingly lower tie rate for peripherals all put pressure on the final figures. That said, historically it was still the second best annual spending in history so the industry is doing just fine. Easing supply concerns in the latter parts of the year and select premium titles helped keep the result high compared to prior years, even the likes of 2020.

“2022 finished strong, with improving performance in the category compared to a year ago following the May 2022 lows.” Piscatella said on LinkedIn. “With improving supply of console hardware – and a highly anticipated slate of new releases – 2023 looks like it could be a great year for the market.”

Looking ahead to the coming months, I wrote up a general 2023 predictions article earlier in the month. I’ll recap some of those points and touch on more domestic predictions.

When it comes to the overall consumer spending number for this year, I’m looking at virtually flat or an increase in the low single-digits. Assuming a 3% rise would bring 2023 sales to around $58.3 billion. I’m not anticipating another down year for mobile, and a more robust content calendar for AAA releases will bump premium output. Combine this with hardware availability and I’m thinking buyers will spend about what they did last year.

I’m forecasting Content will also be flat or up slightly. It starts with mobile, which should rebound, and continues with a busier software lineup than 2022. On the premium side, depending who you believe, there might be another annual Call of Duty title which I expect to be the best-seller if it does come out. Shoot, Call of Duty: Modern Warfare 2 could even repeat if it has a substantial expansion attached to it instead.

Other contenders include sports titles, of course. This year’s Madden game, in particular. In the next couple months, Hogwarts Legacy and Star Wars Jedi: Survivor will be massive and both will compete for a Top 5 finish. Nintendo’s major release is The Legend of Zelda: Tears of the Kingdom, slated for May, and should be Switch’s annual best-seller even if another Pokémon hits market. Sony’s flagship is Marvel’s Spider-Man 2, listed for launch in the Fall, which will set records for a PlayStation exclusive launch and will certainly be part of the year’s Top 5.

For Xbox, the story is Starfield which some people think will still be out before June. (Spoiler: It won’t.) It’s hard to predict where an Xbox Game Pass release ranks; I could see it as part of the Top 10. Elsewhere, Diablo IV will be a huge hit when it starts in June. I just don’t know if it competes for a Top 3 spot at the end of the day. Final Fantasy XVI is a wildcard. Ubisoft has a couple chances in Assassin’s Creed Mirage and Avatar: Frontiers of Pandora if they actually launch this year. Then there’s always a surprise or two.

Moving over to Hardware, it’s Sony’s year by a comfortable margin. I bet PlayStation 5 will be 2023’s best-seller on both revenue and units. It will lead most months by dollar sales, and split with Nintendo Switch on units depending on supply and titles i.e. May when Zelda debuts and whenever Marvel’s Spider-Man comes out. I also don’t expect a Switch hardware announcement, and I do think it will land in second place. Xbox can compete for second, I just remain hesitant on Microsoft’s conversion strategy.

Well, that about does it. What stands out to you during December and 2022? Surprised by any of the results? How did your predictions go? What’s in store for 2023? Drop a line here or social media!

I highly recommend checking out Piscatella’s thread on Twitter and the full report at the website here. Thanks for reading these throughout the year! Check back for the first recap of 2023 in a few weeks. All the best, everyone.

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

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

Sources: GeekWire (Image Credit), The NPD Group, Rokas Tenys (Image Credit), Video Games Chronicle.

-Dom

Earnings Calendar Jan & Feb 2023: Gaming, Media & Tech Companies

DomsPlaying1 Comment

New year, same old calendar. It’s the first earnings season of 2023!

Long-time fans of the site know this is the place for the most comprehensive calendar of earnings dates covering companies across gaming, media and technology. The perfect post for any bookmarks bar.

My calendar’s grown over the years, now boasting over a hundred companies including content publishers, consumer electronic manufactures, software developers, cloud giants, media providers, independent game makers and internet conglomerates. I guarantee there’s something here for everyone.

The latest quarter of results will include sales from the highly-coveted holiday season for those involved in pushing products or attracting eyeballs. In general, it was a challenging quarter across these industries coming off highs of 2021, including a number of record-setting reports. Cost inflation, geopolitical issues and supply disruptions are all still present in the market, among other macroeconomic pressures. This year is off to a tough start for many folks in the tech industry in particular, as layoffs at major firms like Alphabet, Microsoft and Amazon impact talented people whom I hope land on their feet.

In order to track everything, I’ve organized the above image and the below Google Sheets document for easy usage. I’ve also listed out three key companies to watch in the coming weeks within these industries. Thanks for visiting!

Working Casual Earnings Calendar Jan & Feb 2023: Gaming, Media & Tech Companies

Activision Blizzard (ATVI): Monday, February 6th

When Activision Blizzard reports its fiscal fourth quarter report in February, the big story remains the pending acquisition by Microsoft which has potentially hit snags in key regulatory markets. There’s also the tenuous relationship between management and workers during ongoing unionization efforts, plus workplace condition improvements that executives claim are happening. I don’t expect much in this department, though it would be ideal to hear more about how executives plan to make it a better place to work.

In terms of results, all signs point to Call of Duty: Modern Warfare 2 having a massive holiday, so I expect Activision’s contribution to be sizeable which will boost the overall company on a growth trajectory. On the other hand, I’m bearish on Overwatch 2 and Blizzard’s recent output. Looking ahead, forecasts should be strong as Diablo IV launches in June and there’s still the mysterious language around this year’s “premium” Call of Duty release. Could this be an opportunity to say if it’s a new annualized title or an expansion for the latest game? While I’d welcome it, color me a skeptic.

Embracer Group (EMBRAC B): Thursday, February 16th

During mid-February, when Embracer Group reports its third fiscal financials of 2022, the big question will loom: Are there any companies soon to be embraced by its acquisition touch? All has been quiet lately on the purchasing front for Embracer since snatching up Square Enix assets last year, curious for a company known to gobble up studios big and small to expand its robust portfolio and add to the “quantity over quality” strategy. As of its recent Q2 update, the broader group has 12 operating groups, almost 16 thousand employees, 132 internal studios and a whopping 234 projects in the pipeline. Twenty five of which are supposedly AAA level launches due by March 2026.

Still, partially on lackluster reception of key titles like Saints Row and the recent delay of Dead Island 2 yet again, the company reduced its full-year forecast. Combine that with a major structural change in Volition, the team behind Saints Row, becoming a part of Gearbox Publishing, and I’m curious about the viability of big budget releases for Embracer as opposed to targeting that mid-cost tier like SpongeBob SquarePants and Goat Simulator alongside select re-releases of legacy game properties. Its business is now diversified enough to weather storms, yet I’m still waiting for the sort of organic growth that comes from buying companies over a number of years.

Ubisoft (UBI): Thursday, February 16th

Out of all the big third-party gaming publishers, Ubisoft had a tough go in 2022. Even before its upcoming third quarter earnings announcement, it preemptively shared a gloomy financial update and outlook change just a couple weeks back. In addition to blaming macroeconomic conditions, the same ones its peers are operating under, management pointed to costs associated with cancelling three more unannounced projects on top of four it already killed back in July. Part of the rough patch is under-performance from Mario + Rabbids: Sparks of Hope and Just Dance 2023, the former being the most baffling considering how well Nintendo Switch titles tend to sell.

In what’s turned into a meme, Ubisoft also yet again delayed pirate game Skull & Bones to an undetermined time in “early fiscal 2023 – 2024.” Reports recently point to the company experimented with upwards of a dozen battle royale projects, following its theme of chasing trends instead of setting them. CEO Yves Guillemot and team claim that upcoming releases like Assassin’s Creed Mirage and Avatar: Frontiers of Pandora will bolster the business and help its return to growth, yet I’m skeptical this can actually be a bounce-back year for Ubisoft. I wouldn’t be surprised if it’s been quietly shopping itself around to potential buyers, perhaps garnering interest from Tencent or Amazon, because its model hasn’t been working lately. 2023 is as important a year as ever in the company’s history, and its future as a going concern.

Sources: Company Investor Relations Websites.

-Dom

Seven Major Games Industry Predictions for 2023

DomsPlaying

Now that the calendar has turned to January, it’s time to say goodbye to 2022. Which means it’s also time to, yet again, claim that I can accurately predict the future!

As I’ve done in recent years, I tend to kick off the new year by listing out a few predictions for the games industry across the next 12 months. These expectations can range across a number of topics: hardware, software, services, acquisitions, workplace trends and the value of the global games market.

Before diving into the new piece, I like to check back to hold myself accountable for the prior year. Here were my main predictions for 2022, where I successfully called that there would be more unionization, Nintendo wouldn’t announce a new Switch, Sony would rebrand PlayStation Plus and the impact of NFTs and blockchain would be felt in various places.

Misses included the sequel to The Legend of Zelda: Breath of the Wild, now known as Tears of the Kingdom, launching (which it didn’t), the global games market would grow slightly (it declined slightly) and a new BioShock being announced (total long shot, I admit).

Focusing on the future, here’s a list of seven predictions, and a little bonus, for 2023. Let’s see how I fare this time around!

Microsoft & Activision Blizzard Deal Closes in Calendar 4th Quarter

I’ll rip the band-aid off right away. Apologies to everyone who is sick of hearing about Microsoft’s pending purchase of Activision Blizzard: This story isn’t going anywhere anytime soon. Especially now that regulators around the globe have sunk their teeth into the details. Rightfully so, for a deal worth upwards of $69 billion. Currently, the companies still expect the deal to close in June. Personally, I’m skeptical and think it moves back to around an October to December window.

Why? Inquisitive regional regulators in the United Kingdom and United States combined with a glacial legal system. The Competition and Markets Authority (CMA) in the U.K. will publish the results of its investigation in April. The U.S. Federal Trade Commission (FTC) is taking action to potentially block the acquisition, kicking off a legal battle that will commence trial in August. These things alongside delays due to likely appeals if the decisions go against Microsoft mean that I don’t think it meets the current estimate. I do, however, think it ultimately will close before year-end.

Nintendo Goes Another Year Without Announcing a Switch Successor

Continuing my main hardware prediction from a year ago, I’m not betting on Nintendo announcing any major Switch hardware in the upcoming four quarters. One of the best-selling consoles ever is still moving units quite well for this point in the life cycle. It’s trending towards being the top-selling console of 2022 in the United States by units according to The NPD Group as demand continues, especially from households that want multiple devices and a record-setting November start for Pokémon Scarlet & Violet.

While Nintendo reduced its fiscal year shipment target from 21 million to 19 million, plus the technology is certainly outdated, I don’t see much upside in executives revealing a new device in a year where The Legend of Zelda: Tears of the Kingdom and potentially other flagship titles (Mario? Pokémon?) hit market. The transition to a successor will take a delicate touch, notably when it comes to backwards compatibility with the current library of games and usage of accessories. I’m targeting an announcement for what I hope is called Nintendo Super Switch sometime in 2024, with a release in first calendar quarter of 2025.

Global Games Industry Value Returns to Growth & Passes $188 Billion

Last year, I was more optimistic on the global games market value than I should have been when I thought it could increase a bit. According to NewZoo, the industry’s annual value is trending down 4% to $184.4 billion. This is driven by downward pressure from mobile and console segments, declining 6% and 4% respectively. The weakness in mobile is what I didn’t anticipate, and this category has an outsized impact on the overall figure since it makes up half of the total. Then there’s the limited supply of hardware throughout most of 2022, which didn’t really recover until the fourth quarter.

I expect the industry’s worldwide value to bounce back towards growth over the next 12 months. I could see 2% to 3% growth, which would translate to roughly $188 billion to upwards of the $190 billion milestone. Underlying this recovery will be a reversal of trends including a mobile spending rebound, improved hardware inventory, demand for consoles continuing, PlayStation VR 2 and a much more robust AAA software calendar due to previously-delayed games hitting storefronts. Indicators point to strong console demand alongside titles from major publishers, especially Xbox Game Studios, including various holdovers from the past couple years such as Hogwarts Legacy, Star Wars Jedi: Survivor, Street Fighter 6, Final Fantasy XVI, The Legend of Zelda: Tears of the Kingdom and, hopefully, Starfield.

PlayStation 5 Wins Best-Selling Console in the U.S. Yet Misses Sales Targets

While we won’t know until this week’s full-year report from The NPD Group, PlayStation 5 is currently on track to be 2022’s best-selling console in the United States by revenue. GfK Entertainment said Sony’s latest was the top-selling device in the United Kingdom by units. I expect PlayStation 5 to outpace all peers and earn the win for both dollar sales and units in 2023 in key markets (other than Japan, where Switch is dominant). Supply data shows drastic improvement in the fourth quarter of 2022, and Sony’s own comments point towards further growth. Microsoft’s latest Xbox family isn’t generating as much in dollar sales because its high-end Xbox Series X is still tough to find, and Nintendo’s Switch is in its twilight years.

On the flip side, I’m skeptical Sony can reach its fiscal hardware shipment targets for the next couple years. I don’t see how it achieves a highly ambitious forecast of 18 million for the year ending March. At last count back in September, PlayStation 5 lifetime shipments were at 25 million. Sony announced during last week’s Consumer Electronics Show (CES) the PlayStation 5 family passed 30 million sold-through to consumers, implying at least 5 million shipped in the quarter ending December. That would bring the current year to 10.7 million, requiring upwards of 7.3 million during this month through March. Which isn’t going to happen. Going forward, speculation points to an even higher target for April 2023 to March 2024, where executives might guide to 30 million shipped in the year alone. Even if its suppliers are ramping up production as much as Sony claims, and consumers keep showing interest, that’s too lofty of a goal. I’m much closer to a 22 million to 23 million annual range.

Xbox Game Pass Price & Subscription Base Increases

Here’s a classic two-for, combining a couple of big Xbox predictions in a single entry. At first, these may seem at odds with one another since I believe both the monthly cost and overall user base for Xbox Game Pass will increase in 2023. Starting first with the bad news, it’s inevitable that Microsoft bumps the price of its subscription service. The last time Microsoft raised the monthly price of Game Pass was during 2020, when the PC version doubled from $5 to $10. Recently, Microsoft said full-game prices for Xbox Game Studios releases are going up to $70 this year. I’m thinking the Ultimate tier moves to $18, from $15, while the base version moves from $10 to $13 by next holiday season.

Even considering this, I bet the audience of Game Pass also grows in 2023. How many users did the service actually have in 2022? Sony claims it’s at 29 million. Microsoft told everyone it’s at 25 million almost a year ago. While it might be ambitious, I think Team Xbox will provide two updates on its flagship service during 2023. It can pass 30 million by its June fiscal year end, then achieve 35 million by December. There’s a number of benefits boosting the user base towards these milestones. It’s the prospect of first party projects like Starfield and Redfall, maybe a suite of Activision Blizzard titles, plus additional external partnerships especially with Japanese publishers that prove value will continue to rise even if the cost does too.

Special Year of Fighting Game Releases & Announcements

When it comes to genres that may define 2023, I expect fighting games to punch their way back into the spotlight. Relevance here will be boosted by a couple massive launches from legendary teams like Capcom and Bandai Namco alongside newcomers like Riot Games, in addition to select announcements of future titles. Starting with games set to launch, Capcom will produce another mainline entry in its Street Fighter series with Street Fighter 6 in June. Based on anecdotal evidence from its beta testing, people are way upbeat on this one after the disappointing predecessor. Then there’s Tekken 8 from Bandai Namco, which debuted a new trailer at The Game Awards and executives said could launch in 2023. Adding to the calendar might also be Riot Games’ Project L, an exciting twist on the League of Legends universe.

In terms of announcements and reveals, SNK said in August that Garou: Mark of the Wolves 2 is currently in development. Of course, the elephant in the room is Warner Bros’ NetherRealm, which hasn’t released a game since Mortal Kombat 11 back in 2019. If it sticks to the usual schedule, its current project should be Injustice 3. Back in October, NetherRealm’s Ed Boon said the team will share information “in due time.” I expect that time to be mid-year. Finally, I’m anticipating a surprise fighting game hit within the casual space, along the lines of last year’s MultiVersus. Could it be the return of PlayStation All Stars Battle Royale? Will Epic Games partner with every single brand and make the ultimate metaverse fighter? Which title will be the next to surprise the FGC and solidify 2023 as the Year of the Fighting Game? Your guess is as good as mine, though I certainly expect at least one breakout banger.

Amazon Games Makes Massive Studio Acquisition

First off, I have no real basis for this. There haven’t been rumors or speculation. It’s not based on inside information. It’s more of a hunch with the way Amazon Games has been aggressively pushing into the space, especially the past couple years with releases like New World and Lost Ark alongside a deal with Glowmade for a game based on original IP. It’s collaborating with the likes of Bandai Namco on the MMORPG Blue Protocol plus Crystal Dynamics for a future entry in the long-running Tomb Raider series. It partnered with Riot Games to host a Valorant event. The multinational retail conglomerate also owns streaming platform Twitch, and its Prime Gaming service continues to offer incentives for gamers to keep up Amazon Prime subscriptions.

I think Amazon’s level of investment accelerates in the next 12 months, during which it might even outright purchase one of the remaining independent gaming companies. Targets could include the likes of Electronic Arts, Square Enix, Take-Two Interactive or even Ubisoft, the last of which already has an acting relationship for streaming service Amazon Luna. If I had to bet, I think Ubisoft is a prime candidate. From a cost perspective, it’s more attractive than the likes of Electronic Arts. Square Enix has been selling off assets and refocusing towards NFTs. Take-Two seems to pride itself on remaining independent with its 2K Games and Rockstar units. It sounds like Ubisoft has fielded offers in the recent past, so Amazon might very well be looking into a potential buy already.

Bonus: Bungie Announces & Launches Destiny Universe Transmedia Property

You know I couldn’t finish the list without a fun bonus prediction! I think there’s a really good chance that we see what non-gaming projects Bungie has been working on within the Destiny universe. It’s no secret the developer is ramping up hiring for its transmedia offerings, including adding former Riot Games animation director Derick Tsai to become Head of Development for Destiny Universe Transmedia. Plus, now that Bungie is owned by Sony, I’d imagine there’s active chatter amongst Sony’s film and television divisions to adapt Bungie’s popular science fiction IP into different types of media.

To make this prediction better, I bet Bungie both reveals and launches a transmedia property based on Destiny in 2023, whether it’s a movie or show. The game has rich lore and great characters which I think could translate well into an episodic format. Similar to how the live game does seasonal content and weekly story drops. I’d love to see its world represented outside of gaming, exposing the excellence that is Destiny to an even broader audience than ever before.

Note: Comparisons are year-over-year and monetary values are quoted in US Dollars unless otherwise mentioned.

Sources: Foureyes Furniture on YouTube (Image Credit), Getty Images, GfK Entertainment, NewZoo, The NPD Group.

-Dom

2022 Year-in-Review: Dom’s Top 10 Games of the Year

DomsPlaying

Happy New Year, everyone!

Before I mentally move into 2023, there’s one last thing for me to do. Write about my favorite games, and rank them for fun!

In my last post of the year and time to run down the best of what turned out to be a busy 12 months across the spectrum of games, even if the AAA calendar was more sparse than usual. Don’t let anyone tell you that the industry had an off year. Mid-tier and indie devs picked up the slack, and launched several memorable experiences. Plus, PlayStation Studios had a great run.

This is probably the most diverse, experimental list in the seven (!) years I’ve been posting them here. There’s everything from sprawling open words, heartfelt mythological journeys, spooky point-and-click titles, immersive full motion video interactions and gorgeous, cutesy adventures. Almost all platforms are represented, from mobile and web to traditional consoles.

For context, I played roughly 50 games in 2022. Check below for which ones made my prestigious Top 10, then a set of five amazing honorable mentions. Toast your glasses to gaming!

Dom’s Top 10 Games of the Year 2022

10. Tinykin (Splashteam Devs, tinyBuild)

Platforms: PlayStation, Xbox, Nintendo Switch, PC.

Admittedly I didn’t have Tinykin on my radar coming into the year, and boy am I glad I played this 3D platformer with its distinct visual styling, smart progression elements and cute creature collecting. Splashteam crafted a beautiful, realized setting and knocked the character dialogue out of the park.

9. Card Shark (Nerial, Devolver Digital)

Platforms: Nintendo Switch, PC.

I have a feeling the historical “cheating simulator” Card Shark won’t be on many year-end lists, which is quite disappointing considering how excellent its artwork, mechanics and writing proved to be. Shuffle those in with a great tutorial system and an on-the-run story with plenty of twists and turns, and developer Nerial loaded up the deck with plenty of aces here.

8. Citizen Sleeper (Jump Over the Age, Fellow Traveller)

Platforms: Xbox, Nintendo Switch, PC.

Dabbling in everything from consciousness and artificial intelligence to capitalism and community, Citizen Sleeper expertly captures the desolation of existing within a scary society and navigating one’s course with limited resources. Its introduction of randomness via dice rolls eerily echoes the crapshoot that is life, and the game’s constant ticking clocks combined with fragile relationships make its decisions as affecting as any across gaming in 2022.

7. Wordle (Josh Wardle)

Platforms: Web Browser.

The internet set ablaze in January when Wordle skyrocketed in popularity, filling up social media feeds everywhere with intriguing blocks and competitive spirit. Considering I’m still playing Josh Wardle’s wonderful love-letter to his partner Palak Shah all these months later reinforces the brilliance of its “one chance per day” setup, a clever way to express how every single choice counts when trying for consistency in one’s ongoing existence.

6. A Plague Tale: Requiem (Asobo Studio, Focus Entertainment)

Platforms: PlayStation, Xbox, Nintendo Switch, PC.

The sequel to 2019’s masterpiece A Plague Tale: Innocence intensifies the plight of brother and sister Hugo and Amicia, pushing its stealth gameplay into new avenues and continuing the stellar narrative navigation throughout the dark times of 14th century France. It’s a technical showpiece, shoving thousands of rats and heaps of prowling guards into most levels, plus shows what perfect pacing can do for the arc of adventure, culminating in a teary, shocking conclusion.

5. High on Life (Squanch Games)

Platforms: Xbox, PC.

Justin Roiland and Squanch Games snuck High on Life in during December, wrapping up 2022 with the industry’s most ludicrous, hilarious release. The first-person shooter-comedy redefines the medium’s boundaries, featuring a suite of talking weapons played by incredible actors, nifty platforming, chunky mechanics, vulgar writing and even a few in-game movies, resulting in one of Xbox’s most eccentric, exceptional and popular titles of the year.

4. Immortality (Half Mermaid, Netflix)

Platforms: Xbox, PC, Android, iOS.

Sam Barlow and Half Mermaid’s entries into the interactive gaming space ingeniously utilize full motion video and awesome acting to tell stories that most games can’t, and Immortality is the team’s magnum opus. It’s a set of film clips and behind-the-scenes glimpses that present as one thing then quickly turn into something extraordinary, peeling back layers as it progresses, to the point where it’s difficult to talk about why it works so well without completely spoiling the story. Suffice to say this master class of design firmly lands among my favorites of 2022.

3. Norco (Geography of Robots, Raw Fury)

Platforms: PlayStation, Xbox, PC.

Starting off my Top 3 is Norco, an adventure set in a supernatural, Southern techno-industrial town that starts as a daughter’s return to her hometown and blossoms into a thrilling search for family, faith, religion and closure. It’s hard to pin down this bizarre game mainly because it’s so unique, always moving in unexpected ways while including robot helpers and cultlike societies, shady characters and folklore galore. Navigation is easy across its user interface, a stark contrast to figuring out where it’s going, and the player can land on a variety of endings depending on how they choose to steer the plot, all of it transformative and downright miraculous.

2. God of War Ragnarök (Santa Monica Studio, Sony Interactive Entertainment)

Platforms: PlayStation.

I’m not sure God of War Ragnarök tops its 2018 predecessor, which totally revamped the series, however its story progression, character movement, mechanical prowess and area design made it come darn near close. It’s a rich take on Norse mythology and the introduction of new characters, notably Richard Schiff’s depiction of Odin, force plenty of rivalries and team-ups that serve as the underpinnings for a sweeping arc.

Its open zone approach entices exploration while it pulls on heartstrings and allows a new perspective other than Kratos by occasionally swapping to control of his now teenage son Atreus, a clever dichotomy that fits mechanically and narratively. Not to mention the art direction and scenery design mesh with solid performance to showcase the PlayStation 5’s power, resulting in a fitting conclusion to this latest God of War saga while simultaneously opening doors to future epics.

1. Elden Ring (FromSoftware, Bandai Namco Entertainment)

Platforms: PlayStation, Xbox, PC.

If you’ve followed me on social media at any point since Elden Ring launched back in February, its position as the year’s best comes as no surprise. FromSoftware has been building to this masterpiece for years, successfully delivering the ideal of traditional soulslike action role-playing within an spacious, ominous open world that boasts some of gaming’s most spectacular art design and general vibes to date. The Lands Between is one of the most realized, enchanting settings ever, providing the backdrop for the player’s rise as Tarnished in this foreign kingdom.

What makes Elden Ring stand out from everything that’s come before is how it’s simultaneously more accessible and just as rewarding as any challenging game in FromSoftware’s portfolio. The introduction of a fast travel system, offering of a speedy mount in Torrent and a plethora of summons available, both non-playable character and human alike, mean there’s rarely a place where players bump up against something that halts progression. That doesn’t mean there aren’t tricky encounters, there’s plenty, it’s just that the team provides more tools to deal with them or take a break when something isn’t going well.

Then it produces an incredible feeling that around every corner, there’s something worthwhile to find. My two favorite parts of Elden Ring both revolved around moments where possibilities seemed endless, and were equally as jaw-dropping. First was stepping into its second main area of Liurnia, overlooking a shallow lake in the middle with a magic academy to my right and rolling hills to my left. I knew the next dozen or so hours would take me to every nook and cranny. Then there’s the famous descent into Siofra River, a seemingly endless elevator ride deep into an underground expanse full of supernatural specters under a ceiling of stars.

These kinds of awe-inspiring moments captured the essence and potential of Elden Ring, a game so massive that I couldn’t believe just how much was on its map. This doesn’t even get into it’s underlying lore, cast of characters, expansive world-building and narrative that forms the ultimate fate of The Lands Between. My time with Elden Ring was the most special I had all year, and it’s one of the single best games I’ve played in my life. It’s beyond worthy of 2022’s Game of the Year.

Honorable Mentions

As Dusk Falls (INTERIOR/NIGHT, Xbox Game Studios)

Platforms: Xbox, PC.

Dying Light 2: Stay Human (Techland)

Platforms: PlayStation, Xbox, Nintendo Switch, PC.

Horizon Forbidden West (Guerilla Games, Sony Interaction Entertainment)

Platforms: PlayStation.

Kirby and the Forgotten Land (Nintendo)

Platforms: Nintendo Switch.

Marvel Snap (Second Dinner, Nuverse)

Platforms: PC, Android, iOS.

There we have it. What a list!

And with that, 2022 Year-in-Review here at Working Casual comes to a bittersweet end. Thanks to everyone for making it another awesome year at the site and on social media. Switch back over to the megapost for all things year-end.

All the best to you in 2023!

Sources: Media Sites.

-Dom

2022 Year-in-Review: Independent Studios of the Year

DomsPlaying

It’s time for arguably my favorite article of the year!

As part of my year-end recap series, here I’ll be celebrating smaller teams and indie developers across the games industry. These folks, whether a tight-knit studio or one-person team, filled out an incredible annual calendar of indie experiences during 2022.

Their excellent games ranged from adventures to live action, from puzzle to speed-running and various types in between. Many will stick with me for years to come, and some will definitely occupy a space on my favorite titles of the year.

No reason to wait any longer. I know the suspense is palpable! In alphabetical order, here are the lucky 13 best indie studios of 2022.

Andrew Shouldice

The first entry is mostly a one-man developer in Andrew Shouldice. The Canadian’s story in development begins at Silverback Productions for a few years then shifts to full time work on the highly ambitious project in Tunic, a Zelda-inspired adventure game. The top-down title launched in March after many years of work from Shouldice and a small team of collaborators, an exquisite blend of colorful artwork, tricky combat, puzzle execution and an ingenious in-game manual that communicates mechanics via visual hints. It’s the culmination of many stressful sessions and years of hard work from Shouldice, thus easily earning a spot on this list.

Angel Matrix

Headlined by Ben Esposito, of Donut County fame, Angel Matrix is a collective of people across many disciplines that launched its first game Neon White this past year. The fast-paced, first-person speed runner is a sensory onslaught, blending expert platforming, slick shooting and a sick soundtrack from Machine Girl to result in something resembling nothing else I played in 2022. Throughout its release month of June, gamers everywhere fought for leader board positioning and chatted with heavenly assassins in a one-of-a-kind world built by Angel Matrix.

BlueTwelve Studio

Within the south of France, BlueTwelve Studio developed “the cat game” Stray, an indie darling and Best Debut Indie Game winner at The Game Awards. The PlayStation console exclusive is the premier kitty experience across all of gaming, a third-person adventure where the player unravels riddles within an underground city of robots. In typical feline fashion, there’s the ability to climb, claw, creep and snuggle up for a quick snooze, and all the while BlueTwelve tells a tight narrative via context clues and environmental puzzles. It’s hard to see meow the team can top Stray, one of 2022’s pawsitively delightful mysteries.

Geography of Robots

Mainly comprised of five members named Yuts, Aaron Gray, Jesse Jacobi, fmAura and Gewgawly I, the team at Geography of Robots launched one of 2022’s most unique stories in Norco back in March. It’s an exceptional, inventive point-and-click narrative that’s based around choice within a supernatural Southern setting, originating from a multimedia project all the way back in 2015. It’s biographical for Yuts, who grew up in the titular Norco, Louisiana, and the team’s years of development paid off as the title won Tribeca Film Festival’s inaugural gaming award back in 2021. Not to mention it’s the reason why the studio is on this list as well. And rightfully so.

Half Mermaid

Highly-decorated indie designer Sam Barlow (Her Story) is known for moving past the medium’s traditional setup, leveraging full motion video and experimenting with user interfaces. He organized Half Mermaid in 2017, and after Telling Lies in 2019, they started on what is undoubtedly a modern masterpiece in Immortality. This smashing showpiece of interactive storytelling blurs the line between media, existing somewhere among avant-garde films and point-and-click games, telling a multi-layered tale of an actress across three of her unreleased movies. Half Mermaid nails its mission of using a “spectrum of narrative genres” to tell its stunning stories, and continues to showcase what gaming can be when it’s at its most original.

INTERIOR/NIGHT

The London-based studio INTERIOR/NIGHT formed in 2017 as it’s managed by former Quantic Dream lead Caroline Marchal and features a diverse set of industry vets. Their goal is similar to the prior entry, mixing an episodic television approach with interactivity. During July, the team launched its debut title As Dusk Falls which is known for a stark, stop-motion art style and a myriad of difficult choices that push characters in different directions depending on the playthru. Its multiplayer mode is exceedingly novel, allowing up to 8 players to vote on outcomes and guide the overall movement. Reminiscent of projects from LucasArts and Telltale, INTERIOR-NIGHT’s first effort is among the best decision-driven stories of 2022.

Josh Wardle

For those online during the first couple months of 2022, the yellow and green boxes of Josh Wardle’s Wordle were inescapable. In the best way possible. The elegantly-simple digital sensation of a word game has an incredibly sweet story behind it. Wardle started it up as a fun way to pass the time with his partner Palak Shah, who also played a pivotal role in the game’s early development. Accessed solely on a web browser, Wordle’s “one puzzle a day” is the crutch of its genius, providing an avenue for folks to compete then come back to continue their streak. Its beautiful backstory culminated in The New York Times purchasing it for over a million bucks, solidifying Wordle in the pantheon of internet history forever.

Jump Over the Age

Here’s another solo developer that excelled in 2022. Gareth Damian Martin, who has done everything from designing games to critical writing and running a zine to lecturing on the academic circuit, is behind Jump Over the Age. They produced their second title in Citizen Sleeper in May, challenging thoughts around the coldness of capitalism, the weight of debt and challenge of community. It’s a creative, story-based achievement set on a spooky, desolate space colony that introduces randomness, as life itself often does, via dice rolls and light survival mechanics. Featuring excellent character art and promising prose, Gareth’s inquisitive, insightful indie should be a sleeper pick for plenty of year-end lists.

Massive Monster

Cult of the Lamb is the biggest release to date for Massive Monster, a small studio spanning Australia and the United Kingdom that started back in 2016 in the aftermath of the flash game era. The title is a true hybrid, combining bespoke concepts into a singular experience: Community simulator meets dungeon-crawler. Juicy dark humor and devilish decisions parallel the snappy, satisfying mechanics of diving into dungeons and smashing enemies in Massive Monster’s latest, which isn’t tied down by traditional genre convetions. Roguelike elements and time management intersperse in Cult of the Lamb, a standout gem of a game, forcing choices with weight as the player evolves into a benevolent leader or nefarious commander.

Nerial

Listing around a dozen people on its website, Nerial is the studio behind Card Shark, the single most underrated indie triumph of 2022. Based out of the United Kingdom, the team made Reigns titles prior to launching 2020’s Orwell’s Animal Farm. This past year brought about what I think is its magnum opus in Card Shark. Many more people should be talking about Nerial’s tour de force, with its high quality 18th century French artwork and nifty puzzles that center around cheating at parlor games to snatch winnings from pompous rich folks and historical figures alike. The best part is its tangible mechanics, capturing the feel of shuffling cards or peeking at an opponent’s hand. There’s also an underlying story that deals with deceit and cunning, a truly complete package of delectable deception.

Poncle

What started as a pet project for Luca “Poncle” Galante turned into one of the hottest, most highly-praised indie darlings of 2022 in Vampire Survivors. For good reason. Beginning the year in early access then pushing towards full release in October, Poncle’s project is severely addictive with its old school trappings, catchy music and singular premise: stay alive. The simplicity of control is reminiscent of an idle game, where players determine movement with a joystick while picking upgrades when leveling up. There’s much more to Vampire Survivors than it initially presents, unraveling progression as a player’s expertise grows. Poncle has found a perfect niche, a modern-day arcade accomplishment, which has a gameplay hook and “one more play” potential like none other in recent memory.

Splashteam Devs

As one of the year’s sneaky good indies, Tinykin is a delightful platform adventure with Pikmin-esque creature collecting, superb world feel and exemplary puzzle design. The team behind this amazing amalgamation is Splashteam, a close crew including former Ubisoft employees that worked on Rayman and Rabbids franchises. Launched in August, Tinykin is their second game after 2017’s Splasher and it’s an immaculate foray into 3D platforming, featuring cute animations, referential writing and flawless pacing. Additional stand outs are its setting and characters, led by astronaut Milo who meets various communities of tiny critters within a mysterious, massive house. The payoff is great as one of 2022’s top indies really scratches the eternal itch of exploration and collection.

Squanch Games

It’s incredibly difficult to be genuinely funny, especially in games because of the added challenge of player interactivity. Leave it to Justin Roiland (Rick & Morty) and the team at Squanch Games to accomplish this feat, often pushing the limit of absurdest humor and wacky characters in prior games like Trover Saves the Universe and Accounting+. Their most recent release High on Life is one of 2022’s best. It’s Squanch Games at its biggest, boldest and raunchiest. Writers and artists run wild with a ridiculous alien adventure that mostly lands, adapting solid metroidvania components and a colorful graphical palette into a twisted tale of interplanetary drug cartels and humanity’s last hope. It’s as much an interactive comedy as first-person shooter, pumping the player full of laughs as a late year Game of the Year contender.

It’s a longer list than usual because of just how many excellent indie projects released in 2022. Which indies stood out to you? What do you think of the list?

Thanks for making it this far in my celebration of the best indie studios over the past 12 months. Navigate back to my 2022 Year-in-Review megapost for more!

Sources: Media Sites, The Signal (Image Credit), The Times (Image Credit).

-Dom

2022 Year-in-Review: Five Most Impressive Gaming Companies

DomsPlaying1 Comment

The year-end push keeps going!

On this Final Friday of 2022, I’ll recap the most impressive and relevant companies across the games industry.

This will cover larger companies, whether they are publicly-traded, subsidiaries or owned independently. (My next article will delve into the year’s premier indie studios and smaller development squads.)

It’s mainly meant as a celebration to the thousands of talented folks that work at these places and make the industry what it is. While 2022 wasn’t as busy on the release calendar at the AAA and mid-tier level, there were plenty of stand-outs that launched games or revealed upcoming projects.

Without further ado, from hardware manufacturers to software developers, here they are in alphabetical order!

FromSoftware Inc

First up is really the easiest pick of the bunch. Over the past decade, FromSoftware has established itself as the premier studio for crafting challenging role-playing experiences with incredible art direction, creepy vibes and fantastic lore. The Japanese developer, spearheaded by mastermind designer Hidetaka Miyazaki, has effectively created a genre with its Dark Souls series and boasts modern classics like Bloodborne and Sekiro: Shadows Die Twice.

Launching in February 2022, its latest masterpiece Elden Ring sprung the soulslike from a gaming genre to cultural touchstone. The open-world approach transformed the traditional model into something special, dominating social media for months and earning it Game of the Year honors at The Game Awards among other outlets. The game’s setting, The Lands Between, has become a legendary stomping ground for long-time fans and new players alike. Elden Ring sold a staggering 12 million copies in less than a month, the team’s fastest-selling title ever across its 35+ year history. It’s well on its way past 17 million and could pass the 20 million milestone in the new year.

Speaking of 2023, FromSoftware plans to return to one of its beloved, dormant franchises in Armored Core after revealing Armored Core VI: Rubicon of Fire earlier this month. There’s also rumblings of a potential Elden Ring expansion upcoming. Based on the way its history has shaped up, and how incredible 2022 was for the studio, it will undoubtedly continue to set standards of game design moving into the future.

Marvel Games

The folks behind Marvel Entertainment, one of the world’s biggest media houses, have made a concerted effort to expand more into the games industry during recent years. Especially more mainline, premium releases. From the likes of Marvel’s: Spider-Man in 2018 to 2020’s Marvel’s Avengers, Marvel Games has shown a dedication to fitting studios with the right properties to produce titles on both traditional and mobile platforms. This effort ramped up in the last few months, boasting critical successes and generating optimism around future announcements.

There was no more important launch in perhaps the company’s history than Marvel Snap, the mobile deck-building phenomenon that hit market in October. Its ingenious mechanical simplicity, exceptional card artwork and non-invasive monetization appealed to casual and core fans, even those without close ties to the cinematic universe. During its first month, Marvel Snap secured $10 million in revenue on 12 million downloads and earned Best Mobile Game at The Game Awards.

The team coordinated additional launches in the back half of 2022. This included Marvel’s Spider-Man: Miles Morales on PC in November and December’s Marvel’s Midnight Suns, a blend of tactical gameplay, card mechanics and relationship-building which catapulted it to overwhelming critical praise. Marvel Games also revealed upcoming projects alongside Skydance Media and Amy Hennig for a mysterious Black Panther/Captain America team-up, plus a collaboration with Motive Studios on an Iron Man action-adventure title. It’s reassuring to see the direction of Marvel Games and its clever licensing deals, which have and will continue to pay big dividends.

Raven Software

I briefly wrote about the next company on my list during my biggest trends of 2022 article, where I recapped the industry’s recent unionization efforts. Raven Software, a subsidiary of Activision Blizzard based out of Wisconsin, saw certain employees lead the charge for workers’ rights in 2022 while simultaneously coordinating the follow-up to Call of Duty’s massively popular Warzone mode. Both of these accomplishments firmly land it among the year’s most exceptional, and impactful, triple-A studios.

Back in late 2021, Quality Assurance (QA) team members at Raven Software organized a strike after fellow teammates were fired. During January, these folks formed the Game Workers Alliance (GWA) in order to get a seat at the table in company dealings. Demands of the GWA included better timeline management, less crunch and more opportunities for underrepresented groups. In a historic May vote, an overwhelming majority of GWA members voted to unionize and were subsequently recognized by the National Labor Relations Board (NLRB). This marked the second successful union in North America and the first at a major American games publisher.

Alongside all of this, Raven Software coordinated a massive revamping of Call of Duty’s free-to-play Warzone 2.0, one of console and PC gaming’s most popular battle royales. The team shipped the new mode on November 16th. Raven Software’s importance in the AAA space can’t be understated, and the icing on the cake is that Microsoft’s Head of Gaming Phil Spencer said the company would recognize the union if its $69 billion purchase of Activision Blizzard takes place. In the broader workers’ rights push across games, Raven’s brave and committed QA workers were at the forefront.

PlayStation Studios

The most prolific first-party in gaming had another stellar year in 2022, shipping several major titles, pushing towards accessibility and securing multiple acquisitions that will bolster output for decades to come. PlayStation Studios, a worldwide conglomerate of Sony’s premier development teams, was responsible for new launches in a variety of franchises, including at least a couple Game of the Year contenders. Without the incredible effort of its employees, the year’s release calendar would have been barren.

To show the sheer level of output in 2022, here’s a list of the new titles moved by its various teams: Horizon Forbidden West, MLB The Show 22, Gran Turismo 7 and God of War: Ragnarok. Then there’s reissues or ports like The Last of Us Part 1 (even if more remaster than remake), Uncharted: Legacy of Thieves Collection and Marvel’s Spider-Man: Miles Morales on PC. The likes of Santa Monica Studio and Guerilla Games created the year’s most epic experiences, showcasing amazing graphics, narrative prowess and animation chops. As the unsung hero, Sony San Diego’s annual MLB The Show baseball games are as consistent as they come. Gran Turismo 7 from Polyphony Digital was praised by critics as one of this generation’s best racing sims.

Not only that, Sony’s talented teams focused more on accessibility and inclusivity, an important movement that allows more gamers to enjoy PlayStation titles. Then there’s acquisitions that finalized in 2022 like Bungie and Savage Game Studios. The former is a significant piece of Sony’s goal to move into live services while the latter will bolster its newly-formed mobile division. PlayStation Studios is the reason to own a PlayStation 5, and its team members lived up to exceedingly high standards yet again.

Valve Corporation

Intriguingly, the reason I’ve concluded this list with Valve is not because of its industry-leading Steam platform. I will say the digital distribution continues to be the best place to own, organize and play PC titles, even as competitors like Epic Games push more into that segment of the market. Steam attracts a massive population of gamers, passing a major milestone this year in 30 million concurrent users during a weekend in October. This figure was roughly 27 million in late 2021, illustrating its illustrious appeal over the past 12 months.

The reason is simple: The Steam Deck. Until now, Valve had a tricky history with hardware. From Steam Machines to Steam Link, its devices garnered mixed reviews and minimal usage. It wasn’t until this February that Valve nailed a hardware design that truly revolutionized hardcore gaming. The Steam Deck handheld is Valve’s single best manufactured product to date, and the greatest hardware triumph of 2022. It’s flexible, easy to use and way more comfortable than it has any right to be. It allows access to one’s Steam Library, showcases a myriad of “Deck Verified” games plus can be used to access services like Xbox’s cloud offering. What I love the most is how the company actively supports people tinkering with it. It’s effectively a Linux-based PC in the palm of one’s hand, and I think the ideal place to play indies.

Even as a first iteration, it’s an essential part of how many people played this past year. Sure, there are drawbacks. Battery life isn’t great. Its price isn’t as attractive as something like Nintendo’s Switch. It can’t play my beloved Destiny natively (though that’s more on Bungie than Valve, I’d say). Still, signs point to 1 million units shipped in its first six months, which is a solid sales result considering how slowly it shipped. The Steam Deck is a more niche, premium product that single-handedly advanced the industry, and was by far my favorite piece of tech this year.

Thus concludes the awards for 2022’s most impressive gaming companies. Congrats to everyone that worked hard at these firms to produce some of gaming’s most memorable experiences and products. And thanks all for reading! Check back to the 2022 Year-in-Review megapost for all my year-end articles.

Sources: Company Investor & Media Sites, Game Workers Alliance, GamingonLinux, MobileGamer.Biz, Steam DB.

-Dom

2022 Year-in-Review: Biggest Trends in Gaming, Tech & Media

DomsPlaying2 Comments

In the first article of my year-end series, I’ll run through the biggest trends impacting gaming, media and technology during 2022.

It was a curious time of both disruption and normalization. For the former, there was Russia’s invasion of Ukraine. Countries grappled with lingering effects of coronavirus. Inflationary pressure combined with economic slowdowns across various regions. Billionaires and executives alike threw around money to scoop up companies. Gaming publishers delayed titles and shifted their release calendars.

As for the latter, companies everywhere settled into a “new normal” of hybrid working. Inflation started to cool in recent months. Consumer electronic manufacturers shored up supply chains, and began producing more inventories. Notably within gaming hardware. Consumers shifted back towards forms of entertainment outside their homes.

Way back in January, I predicted some of these would happen. Though certainly not all of them! That said, now that we’ve experienced it, here’s a list of major stories that fundamentally changed these sectors during 2022. Here’s hoping this article trends towards keeping your interest!

Games Industry Workers Increased Unionization Efforts

This is one of my predictions that I’m happy came true. Employees fighting for their rights, notably those that work in gaming, ramped up substantially in the last 12 months. In January, Quality Assurance (QA) workers at Activision Blizzard’s Raven Software started up the Game Workers Alliance (GWA). Then in May, that team became the first union ever to form at a gaming publisher in the United States. Later, Vodeo Games was the first entire gaming studio in North America to unionize when it voted in September.

More recently, earlier this month Microsoft executives said they would recognize a union being formed by roughly 300 employees of ZeniMax Studios. This in particular is a significant move towards worker rights, as the Communication Workers of America (CWA) celebrated Microsoft’s willingness to recognize and not force a protracted legal battle. Seeing a company as massive and influential as Microsoft to make this decision showed how 2022 was a significant year for unions and workers’ rights in the games industry, and I fully expect this trend to accelerate into 2023.

Social Media, Elon Musk’s Twitter & TikTok’s Expansion

I’m lumping in a couple topics here that dominated the social media landscape this past year. It’s hard to avoid hearing from billionaire weirdo and apartheid apologist Elon Musk, especially when he single-handedly upended the space with his October purchase of Twitter for $44 billion. What followed in the coming weeks was a simultaneous mass exodus from the firm and Musk touting how the platform saw record engagement. Thankfully he claims he’ll be stepping down as Chief Executive Officer soon, because a poll of Twitter uses told him to do so, though the damage has been done for many that moved towards the likes of alternatives in Hive Social or Mastodon.

Elsewhere, in the video streaming world, TikTok’s popularity skyrocketed in 2022 after gaining traction during quarantine times. It began the year with over 1 billion monthly active users (MAUs). Statista estimates it will end the year at upwards of 1.7 billion MAUs, and will likely pass 2 billion in 2023. It’s been downloaded over 3.5 billion times, only the 5th platform ever to accomplish this figure and the first on that list to not be owned by Facebook parent Meta Platforms. The short-form video content platformer has become a premier destination, both for creators and fans, and often dictates trends or news stories especially among its younger users.

Evolution of Working: Remote, Hybrid & Four-Day Work Weeks

Even if certain leaders (see the aforementioned Musk) insist on forcing people back into the office, plenty of big companies settled into a hybrid working compromise in 2022. Apple, Google, Microsoft, Amazon and Meta have all embraced some form of a hybrid working model. Almost 90% of European companies surveyed by Owl Labs planned to offer hybrid solutions post-pandemic. On the upside, it’s a much more flexible environment for workers and often acts as a welcoming culture for talent. Downside is there are still disruptions in workflow and tech availability, which can push software or products back. As exhibited by how many big title delays happened in the games industry especially.

Additionally, various gaming companies experimented with instituting four-day work weeks, meant to alleviate crunch and provide a more balanced work-life dynamic. Eidos Montreal, Eidos Sherbrooke, Kitfox Games, Armor Games, ManaVoid Entertainment, Young Horses Games and Crows Crows Crows are examples of studios that have shifted towards this type of schedule while maintaining pay levels for their employees. Not only is it promoting work-life harmony, it’s an excellent bargaining chip for companies when attracting talent.

Microsoft & Activision Blizzard Facing Regulatory Scrutiny & Sony’s Ire

It’s hard to believe that Microsoft announced its $69 billion purchase of Activision Blizzard this past January. It feels like the biggest story in gaming, perhaps ever, and the resulting talk about further consolidation in the games industry has been in the news cycle for an eternity. The company’s representations argue that it will actually increase competition and aid development resources because of access to Xbox Game Pass and more direct financial support, and has offered good faith deals to Sony, Nintendo and Valve to have Activision’s bellwether franchise Call of Duty remain on other platforms for at lease a decade. So far, only Nintendo and Valve have accepted.

While certain jurisdictions like Brazil and Saudi Arabia have already approved the deal, other regions and countries are scrutinizing it closely. Namely the United Kingdom’s Competition & Markets Authority (CMA) and now Lina Khan’s Federal Trade Commission (FTC) here in the United States, the latter of which is seeking to potentially block the purchase by pushing the Seattle-based tech giant towards a major legal battle. Then of course there’s Sony, Microsoft’s main competitor in the premium console space, that’s naturally opposed to it. Personally I still think the acquisition will happen, perhaps with some conditions, just not before Microsoft’s target of June 2023.

Supply Chain & New Gaming Hardware Inventory Rebound

Can you believe it’s been two years since the launch of Sony’s PlayStation 5 and Microsoft’s Xbox Series X|S family? And almost a year since Valve’s Steam Deck handheld (a device from that I think has revolutionized PC and portable gaming)? To say it’s been a tumultuous beginning to the new console cycle is an understatement, as supply disruptions plus chip shortages have made it difficult for consumers to find these boxes at retail. Though after a rough stretch in the front half of the year, indicators are finally signaling better availability.

Supply chains are improving, part prices are topping out and suppliers are pushing more inventory to market. This is illustrated by better hardware results lately for key markets like the United States, where both new families have been growing, sometimes in the double-digits. Data from a Top 5 global games market in the United Kingdom show that November was the biggest month of 2022 for console sales. Valve’s Steam Deck shipments have risen drastically since the February launch, when the company was dealing with slowdowns amidst long waiting lists. There’s also Sony’s upbeat target for hardware shipments during its current fiscal year. It’s safe to say these stats are pointing to a positive trend, and certainly bodes well for the new year, during which I expect upward growth for all three devices.

Weakness in Mobile Drives Lower Spending on Games Industry

Admittedly this is a miss for me when it comes to my prediction, as I expected global games industry value to be flat or up slightly in 2022. The reason? Mainly because I was more optimistic than I should have been on mobile. Even with the late year output push by hardware manufacturers, spending across games is trending downward for this past year. Both globally and within the United States, as Newzoo expects the former to decline 4% to $184 billion and The NPD Group currently shows domestic spending down 6% to $48.97 billion through November.

At a global scale, mobile’s value is trending 6% lower to $92 billion. Within the United States, this sub-category is likely to show between a 1% to 2% dip. To illustrate how significant this is, that would be the first time in Sensor Tower’s tracked history in which mobile experiences an annual decline. And it usually makes up half or more of the Video Game Content category, which is the largest contributor to U.S. spending. Combine mobile weakness with the impact of a sparser release calendar for premium games and global hardware sales looking to move down 4% to $52 billion, and 2022 is trending closer and closer to pre-pandemic levels.

Continued Expansion of Subscriptions, Streaming & Cloud Services

As expected by nearly every talking head that covers consumer sectors and technology, including yours truly, 2022 showed further movement towards subscriptions, streaming and cloud across various media types. These sorts of ongoing digital content distribution strategies are all the rage at companies, from Walt Disney Co’s Disney Plus and Warner Bros’ HBO Max to Microsoft’s Xbox Game Pass alongside Sony’s PlayStation Plus. This past year featured many avenues to watch television shows, check out new films and enjoy game libraries, whether locally or on streaming devices. Disney Plus recently passed 164 million subscribers, up 12 million year-on-year. The combined audience of Walt Disney’s streaming platforms rose almost 4 million in the quarter ending September. While Netflix’s user base initially declined in the early parts of its latest fiscal year, it’s since rebounded to 223 million after adding 2.4 million in the latest quarter, above estimates.

In gaming, Sony rebranded its PlayStation Plus service back in June to offer certain new titles as part of the Premium tier. Microsoft said Xbox Game Pass is showing growth on console and PC, though the former is slowing as the market saturates, and shared that 20 million people have used its cloud streaming tech which is twice as many as in 2021. Finally, Microsoft signed a deal to offer Xbox Game Pass on new Samsung televisions, a move that further exhibits how distribution will be in the future without even a need for gaming hardware. Digital is now dominant in these sectors with its allure of ongoing revenue and audience retention, and I expect even more segmentation across 2023 and beyond.

There you have my coverage of the biggest trends of 2022. Thanks for reading this far! Head back to the 2022 Year-in-Review Megapost for all year-end content here at Working Casual, and be well everyone.

Sources: Chris Chang (Image Credit), Company Investor Websites, GamesIndustry.Biz, Getty Images, Newzoo, The NPD Group, Owl Labs, PlayStation Blog, Sensor Tower, Social Shephard, Statista, ThisisEngineering (Image Credit).

-Dom

2022 Year-in-Review Megapost is Here

DomsPlaying2 Comments

It’s the last week of 2022. Which means one thing, of course.

We’ll see the ball drop soon on the new year? Well, maybe. But actually: It’s time for Working Casual’s annual Year-in-Review series!

This will be the sixth installment of the perennial article set celebrating gaming, media, technology and the trends, companies and smaller teams making big impacts across these sectors.

In a broad sense, major stories within these included the evolution of hybrid working, supply chain and logistics recoveries, better widespread unionization efforts, subscription services rebranding towards growth, cloud gaming expansion, major delays for AAA titles, general consumer spending declines, ongoing games tapping the Metaverse, the volatility of cryptocurrency, and, a personal favorite, the innovation of Valve’s Steam Deck on the gaming hardware front.

Throughout the next week, I’ll have multiple articles covering everything that was the past year. Trends, companies, indie studios and my favorite games will engulf the site like fireworks in the night sky. See below for the article titles. I recommend bookmarking and checking back often as I post them leading up to New Year’s Day.

Biggest Trends in Gaming, Tech & Media

Five Most Impressive Gaming Companies

Independent Studios of the Year

Dom’s Top 10 Games of the Year

Thanks everyone for hanging out here and on social media. Sending all the best to you and yours as we wrap up another year, and move into a new one!

-Dom

Monthly U.S. Games Industry Spend Increases for 1st Time in 2022 During November NPD Group Report

DomsPlaying

‘Tis the season.

Awards season? Well, technically yes. I’ll certainly be writing my Year-in-Review articles soon enough! And gaming’s biggest night in The Game Awards aired last week, showcasing the best of the year that was 2022.

What I really mean it’s when The Holiday Sale Season ramps up for video game companies and their efforts to push as much as they can to gamers everywhere. Any time people are shopping, I’m here to analyze sales results.

Because of that, today I’ll be recapping The NPD Group’s recent report on U.S. game sales during the highly-coveted month of November bolstered, of course, by Black Friday. It’s the time when manufacturers and retailers employ strategies to attract people to open those wallets.

And it was a very good month at that, especially in the context of 2022 so far. It’s the first month of the year in which monthly sales increased across the games industry. This is a huge data point given the general economic environment. It continued the strength from October, where buying leveled off after 11 consecutive months of declines.

Overall consumer spending on gaming rose 3% in November, signaling that easing inflation and better supply conditions for hardware proved to be tailwinds for the industry. Out of the three categories of Video Game Content, Hardware and Accessories, only Content saw a decline year-on-year mainly due to ongoing mobile weakness. Both Hardware and Accessories generated double-digit growth, the former boasting a substantial gain over last year’s figure.

There’s a few underlying reasons why November came in above expectations. First the release calendar has been stacked the past two months with commercial darlings, including the likes of Call of Duty from October then new titles in long-running series like God of War, Pokémon and, yup, even Sonic the Hedgehog!

Then, the improved stock of consoles, notably for Sony’s flagship PlayStation 5, is getting better at meeting consumer demand. Additionally, The NPD Group cited areas like non-mobile subscription spending, peripherals and digital full-game downloads on consoles spurring growth as well. All of these combined for a terrific month of higher sales.

On the premium software side, Call of Duty: Modern Warfare 2 continued its reign as the top-selling game during November, which it also accomplished the month prior around its debut. Just below that, three brand new games arrived within the Top 4: God of War Ragnarök, Pokémon Scarlet & Violet plus Sonic Frontiers. I’ll dive more into each later in the piece.

Within Hardware, PlayStation 5 was November’s best-selling console as measured by both dollars generated and units sold. Considering some discounting of its Xbox Series X|S competitor and the launch of mainline Pokémon games for Nintendo Switch, this win for Sony is quite impressive.

“I wasn’t expecting that we’d see any month with growth in 2022, but here we are,” said The NPD Group’s Mat Piscatella on LinkedIn. “Great new games sell really well. Would be great if more were released. The big uptick in new generation hardware supply sure helped too. Really fantastic month overall, especially when considering all the other market challenges out there.”

Here’s a look at the full report alongside my usual rundown. Get your hot cocoa ready!

United States Games Industry Sales (October 30th, 2022 – November 26th, 2022)

As shown in the info-graphic above, spending across all of gaming reached $6.29 billion in November, indicating the aforementioned 3% growth. Last year, this total was roughly $6.11 billion. For more context, November spending peaked at an all-time high back in 2020 when it reached upwards of nearly $7 billion.

Expanding to the year currently through 11 months, buying is still down 6% to $48.97 billion. Last year’s figure as of November was $52.19 billion.

The largest segment of Video Game Content hit $4.74 billion last month, or 75% of the total, which equates to a decline of 5%. In an ongoing surprise to those of us who track this regularly, mobile continued to drag down the category so much that things like premium games and other software-related sources weren’t able to offset its losses.

“Thanksgiving and Black Friday did not bring a reprieve as [mobile] spend during the week was down 5% year-over-year and 1% from 2020,” said Sensor Tower’s Dennis Yeh in the report. “Barring a meteoric (or catastrophic) final few weeks of 2022, annual U.S. mobile gaming spend should decease 1% – 2% from 2021.”

Mobile’s best-seller list was topped by the likes of Candy Crush Saga, Roblox, Royal Match, Coin Master and Clash of Clans. Indicators showed that casino, action and tabletop mobile titles ramped up in popularity during November, while role-playing and shooters were “struggling.”

Swapping to premium software, Call of Duty: Modern Warfare 2 repeated at the top spot during November and continues to be 2022’s leading seller. Activision Blizzard’s military shooter likely benefited from the launch of its Warzone 2.0 battle royale counterpart, plus it now has a full month of retail sales on the books. Nothing shocking about this particular result.

The first new release on November’s combined software list was God of War Ragnarök fighting its way to the 2nd spot. Comparatively, its predecessor in 2018’s God of War earned the top spot when it released in April of that year. Sony’s major exclusive for the back half of 2022 really only missed out on leading the month because it went up against the juggernaut that is Call of Duty.

PlayStation’s Game of the Year candidate is immediately among the Top 5 best-selling titles of 2022. This domestic success parallels its epic global start as the game shipped a staggering 5.1 million copies during its first five days. This is a record launch among first-party games in PlayStation history. Boy, that’s a whole lot!

Speaking of a great start, next up was the latest pair of Pokémon titles in Scarlet & Violet on Nintendo Switch which combine to reach 3rd place. A couple caveats being this includes full sales of both games, then excludes digital because Nintendo still doesn’t want to share that data. To compare against recent entries, Pokémon Legends Arceus started in first during (an admittedly less busy) January earlier this year while November 2021’s Brilliant Diamond & Shining Pearl also debuted in 3rd.

Pokémon Scarlet & Violet already occupy the 7th spot on 2022’s best-seller list. Beyond the domestic result, it’s a historic beginning for this game worldwide, shipping a whopping 10 million units within its first three days. That’s the fastest-selling on any Nintendo platform. Ever. Its monstrous launch set records for the series, Switch as a console and across Nintendo’s entire history!

Moving over to Nintendo’s 1990’s era rival in Sega, the #4 spot on November’s list went to Sonic Frontiers. It’s a rare appearance from the Blue Blur, as there haven’t been many mainline Sonic releases lately. Sonic Mania was a critical success back in 2017 then didn’t sell enough to chart at the time. This latest 3D platformer in Sonic Frontiers is turning out to be quite a fast seller, fittingly, moving 2.5 million copies worldwide within a month on sale.

Familiar names and big movers filled in the remainder of the overall ranks in November. Marvel’s Spider-Man: Miles Morales and Mario Party Superstars jumped back into the Top 10. The only other brand new title among the Top 20 was Tactics Ogre: Reborn slotting in at #17, which really is remarkable amidst plenty of big hitters.

Shifting to the 2022 list with just one month to go, Call of Duty: Modern Warfare 2 edges into first place. As expected. It’s the first time since Elden Ring dropped in February that FromSoftware’s masterpiece hasn’t held the year’s top spot. Past that, Madden NFL 23 has secured 3rd as Lego Star Wars: The Skywalker Saga moved down to 4th. MLB: The Show 22 seems to be impacted the most by new entries ahead of it, however it still retains a Top 10 position for now.

Check below for all premium software ranks for November and 2022 to date.

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

  1. Call of Duty: Modern Warfare 2
  2. God of War Ragnarök
  3. Pokémon Scarlet & Violet*
  4. Sonic Frontiers
  5. Madden NFL 23
  6. FIFA 23
  7. NBA 2K23*
  8. Gotham Knights
  9. Marvel’s Spider-Man: Miles Morales
  10. Mario Party Superstars*
  11. Elden Ring
  12. Animal Crossing: New Horizons*
  13. Mario Kart 8*
  14. Mario + Rabbids: Sparks of Hope
  15. Persona 5
  16. NHL 23
  17. Tactics Ogre: Reborn
  18. Minecraft
  19. Horizon Forbidden West
  20. The Legend of Zelda: Breath of the Wild*

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

  1. Call of Duty: Modern Warfare 2
  2. Elden Ring
  3. Madden NFL 23
  4. Lego Star Wars: The Skywalker Saga
  5. God of War Ragnarök
  6. Pokémon Legends Arceus*
  7. Pokémon Scarlet & Violet*
  8. Horizon Forbidden West
  9. FIFA 23
  10. MLB: The Show 22^
  11. Call of Duty: Vanguard
  12. Gran Turismo 7
  13. Mario Kart 8*
  14. Kirby and the Forgotten Land
  15. Gotham Knights
  16. Minecraft
  17. NBA 2K23*
  18. Nintendo Switch Sports*
  19. Marvel’s Spider-Man: Miles Morales
  20. Animal Crossing: New Horizons*

The biggest boost to overall spending last month came from Hardware as a category. Console sales rose a momentous 45% during November, reaching upwards of $1.25 billion. This is a stark contrast to the 10% decline during October, which was mainly driven by weakness in Nintendo Switch. Seems like Nintendo may have been holding shipments to attract buyers during the more competitive time frame, or people weren’t as interested until they began Black Friday and pre-holiday shopping.

This excellent monthly result means that 2022 sales have turned positive for Hardware. After trending down 2% as of October, this category is now up 6% for the year right now. It’s generated over $5 billion in sales through the first 11 months, compared to last year’s $4.74 billion.

Funny how that happens when people can actually buy a console if they want it! And the demand is certainly there, as strong as it’s been early in this generation.

Benefiting from a generous supply improvement, the PlayStation 5 earned the top spot in the segment during November by both dollars and units. By my count, that’s four months in a row where Sony’s newest generation has led the segment by both metrics.

Nintendo Switch came in second place by both metrics. While The NPD Group didn’t share growth statistics for individual platforms, like it had in recent months when Xbox and PlayStation families showed double-digit growth, I’d imagine that all three major platforms gained ground based on how the category fared.

After this latest monthly win, PlayStation 5 remains the best-selling hardware platform of 2022 in year-to-date dollar sales. Hanging in there in its own right, Nintendo Switch leads in units.

This dynamic of added availability, especially for PlayStation 5, combined with both an ongoing appetite and better buying power from consumers is providing a boon for hardware late in the year. The perfect time for it to happen for these manufacturers, because they are able to meet the demand during the crucial holiday months. Two years into the new generation, we’re finally seeing the supply side of the curve catching up to demand.

Another solid result during November’s report was Accessories, which often benefits when people spend more on consoles because they acquire peripherals and extra controllers. After moving down 8% back in October, this segment returned to positive territory last month netting $289 million in sales or 10% higher than this time in 2021.

That brings the year so far to $2 billion in spending on Accessories, which is currently trending down 9% due to weakness in earlier months.

Game pads and headset/headphone sub-categories in particular boosted Accessories as a whole during November. The top-selling peripheral last month was the PlayStation 5 DualSense Wireless Controller Galactic Purple, paralleling Sony’s win on the hardware side. While The NPD Group didn’t confirm explicitly, I’d bet Microsoft’s Xbox Elite Series 2 Wireless Controller remained the year’s best-seller due to its outsized price and revenue potential.

Taking everything from November, it was arguably 2022’s best sales result for the U.S. games industry. It’s refreshing to see sales growth again.

Last month was exceptional for consoles, as PlayStation and Xbox continue making up ground after a slower start plus Nintendo Switch is holding up well enough late into its life cycle. On the content front, mobile certainly presents a concern; for now, it’s premium sales of new and earlier games propping up that segment. And there was clearly a good amount of demand for peripherals late in the year.

Now, moving into the last month of 2022, it’s a crucial time that will determine where domestic sales end up for the year. I’m more upbeat than I was even a couple months back, even if I’m thinking we’ll see lower sales in 2022 than last year.

Which wouldn’t be bad at all. 2021 was a record year for domestic spending on games here after all, generating over $60 billion!

Unless December is a major surprise to the upside, I’m expecting total sales will be down for the year in the mid single-digits. Against last year’s $60.4 billion, assuming a 5% drop would bring 2022 to around $57.4 billion. This indicates a December month of roughly $8.4 billion, which would be an improvement since last year’s final month.

Even as a slight drop, almost $58 billion in spending would be a great result for 2022 given the economic challenges and downward pressure the industry has experienced most of this year. It’s not where the industry could be if supply constraints and a number of delayed games didn’t happen. The world is still dealing with a global pandemic during which working dynamics and supply chains shifted drastically.

As for individual predictions, again Call of Duty: Modern Warfare 2 will win December in the Content category. For 2022 in aggregate, I think the Top 3 top-sellers from November will hold serve and finish like that.

December will be much trickier for Hardware. Anecdotally I’ve been hearing more about Xbox Series X|S stock. We know Sony has been moving up its shipments. Nintendo is there for families and households looking for a better entry point. I’m guessing PlayStation 5 will lead December on both dollars and units, with Xbox Series X|S in second by dollars and Switch in second by units.

As for the year, PlayStation 5 will carry this late momentum to a win on revenue. Alongside, Nintendo Switch will take home the crown when measured by units.

So that’s the final thread I’ll be writing on NPD results during this calendar year, because December’s result will take place sometime in January. We’ll have to see how the predictions go, and if the industry surprises me as it often does!

If you want more on the report from The NPD Group, I recommend Piscatella’s thread that’s now on LinkedIn. He has more on platform charts and further details.

Hope everyone is safe and well going into the holiday season, and I’ll be back very soon with my Year-in-Review posts before diving into the new year. Thanks all for the continued support!

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

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

Sources: Newsweek (Image Credit), Nintendo, The NPD Group, PlayStation Twitter, Sega Sammy.

-Dom