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

February 27, 2022 DomsPlaying

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Title: Destiny 2: The Witch Queen

Release Date: February 22, 2022

Developer: Bungie

Publisher: Bungie

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

Final Score: 9/10

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

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

-Dom

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

February 11, 2022February 11, 2022 DomsPlaying

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Though I was genuinely surprised by the rankings last month.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Comparisons are year-over-year unless otherwise noted.

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

-Dom

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

February 6, 2022February 26, 2022 DomsPlaying

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Title: Sifu

Release Date: February 8, 2022

Developer: Sloclap

Publisher: Sloclap

Platforms: PlayStation 5, PlayStation 4, PC.

Final Score: 6.5/10

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

Disclaimer: Advanced review code provided by the publisher.

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

-Dom

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

February 3, 2022February 3, 2022 DomsPlaying

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

-Dom

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

February 2, 2022February 2, 2022 DomsPlaying

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

An eventful one, it was.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Be safe and well. Thanks for reading!

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

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

-Dom

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

January 26, 2022January 26, 2022 DomsPlaying1 Comment

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sources: Daniel Ahmad, Microsoft, The NPD Group.

-Dom

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

January 25, 2022January 26, 2022 DomsPlaying

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

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

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

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

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

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

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

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

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

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

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

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

Sources: Company Investor Relations Websites.

-Dom

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

January 22, 2022January 22, 2022 DomsPlaying1 Comment

Anything going on lately in gaming?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Be safe and well, all!

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

Comparisons are year-over-year unless otherwise noted.

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

-Dom

Seven Major Games Industry Predictions for 2022

January 16, 2022January 16, 2022 DomsPlaying

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

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

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

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

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

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

Workplace Culture, CEOs & Unionization

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

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

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

Sony PlayStation Subscription Service Rebranding

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

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

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

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

Nintendo’s Breathtaking Lineup & No New Switch

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

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

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

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

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

Severe Impact of NFTs, Blockchain & Play to Earn Schemes

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

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

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

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

Global Games Market Value Will Grow Low Single-Digits

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

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

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

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

It’s Impossible to Escape The Metaverse

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

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

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

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

New BioShock Will Be Revealed, Releasing in 2023

Time to have a little fun!

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

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

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

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

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

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

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

-Dom

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

January 3, 2022January 3, 2022 DomsPlaying

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

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

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

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

10. Monster Hunter Rise (Capcom)

Platforms: Nintendo Switch, PC.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2. Inscryption (Daniel Mullins Games, Devolver Digital)

Platforms: PC.

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

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

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

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

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

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

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

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

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

Top Five Honorable Mentions (Alphabetical Order):

Chicory: A Colorful Tale (Greg Lobanov, Finji)

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

Death’s Door (Acid Nerve, Devolver Digital)

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

Deathloop (Arkane Studios, Bethesda Softworks)

Platforms: PlayStation 5, PC.

Metroid Dread (Mercury Steam, Nintendo)

Platforms: Nintendo Switch.

Returnal (Housemarque, Sony Interactive Entertainment)

Platforms: PlayStation 5.

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

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

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

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

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

-Dom

Working Casual

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