Hello Games – Working Casual

It’s Lonely Out There For No Man’s Sky

I would be remiss to not start this week’s installment of Casual Friday without first mentioning the game that every tech nerd and casual gamer alike is talking about: Hello Games’ space exploration survival-epic No Man’s Sky. It launched this past Tuesday on Sony Corp (6758)’s PlayStation 4 (PS4), and on PC today, to a variety of opinions after a crazy amount of hype since its reveal back at the VGX Awards in 2013.

Now I’m no reviewer, but I admit I’ve been playing and generally enjoying my time in the vast universe of No Man’s Sky. It’s not a game for everyone, though. Which is why it’s suffered from mixed messaging about its nature as a single-player vs multi-player experience (apparently it’s only the former), Sony throwing huge marketing power behind it then not offering advanced review copies for media outlets, its full-price tag despite being a game developed by a smaller indie studio and many gamers expecting it to be the “only game you’ll ever buy again” based on its promise of offering the ability to explore a world with 18 quintillion planets filled with wildlife and resources galore.

Time will tell how successful it will be, both critically and financially. The initial indication is that reviews are skewing toward the negative, but so many people are playing it that I can’t help but think my sales estimate of 1.5 to 1.75 million units sold is ultimately attainable.

Xbox (Is Number) One!

It’s been a busy couple of weeks for Microsoft Corp (MSFT)’s Xbox business. Last week, the tech giant released a slimmer, updated version of its latest console dubbed the Xbox One S after cutting the price of its original Xbox One model to $249 (the console launched in 2013 at a cost twice that amount). It seems this aggressive price cut has impacted sales, as the Xbox One became the best-selling home console in the U.S. during July 2016 based on a report by the NPD Group. This is the first month that the Xbox One has led its major competitor, Sony’s PS4, since its win in October 2015 around the launch of Halo 5.

PlayStation Meeting.. PS4 Neo Reveal?

Speaking of home consoles and updated versions, news dropped this week by way of VICE Gaming and Gameblog that Sony Corp is to reveal a new iteration of its industry-leading PS4 home console next month. The company has sent invitations to a PlayStation event taking place at its PlayStation Theater in New York City on September 7th. The project, nicknamed “Neo,” will be featured at this event and is expected to have upgraded specifications and enable 4K gaming.

Note there are 43.5 million PS4’s in the wild as of the end of this past June.

NVIDIA Is Stackin’ Chips

Semiconductor manufacturer NVIDIA Corporation (NVDA) reported record quarterly sales of $1.43 billion this week, beating analyst expectations on a 9% jump since last quarter and 24% increase since last year. The firm, whose chips are widely used in gaming applications in addition to Artificial Intelligence and self-driving cars, showed profit growth of 29% since last quarter and triple-digits since last year! Gaming makes up a little more than half of its overall sales, and the company’s results were driven by its new “Pascal” chip series released this year as part of its future road map.

The company’s stock is the 2nd-best performing within the U.S. market benchmark S&P 500 index over the past year, growing 166% over this time frame as of last night’s price. Not a bad investment, I’d say!

DeNA & Nintendo Sittin’ In A Tree..

Japanese mobile and social media company DeNA Co Ltd (2432) divulged some details of its partnership with Nintendo Co Ltd (7974) during the former’s earnings this week. DeNA said that mobile titles in Nintendo’s Animal Crossing and Fire Emblem game series are expected to release this upcoming fall, and that in total the firms have five different mobile games planned to release before May 2017 in hopes of creating medium-to-long term sustainable profits.

Nintendo will of course handle development and marketing of these games, while DeNA will handle infrastructure and back-end support services. Nintendo will cover all marketing costs. As a result, the firms will split revenue from these releases but we don’t know what the split will be just yet. DeNA expects contributions from this alliance during its 2016 fiscal year, which ends next May, so we can safely expect the same for Nintendo.

Alibaba vs SEC: Fight!

Lastly, yesterday Chinese e-commerce leader Alibaba Group (BABA) had its best quarterly sales growth since its public listing back in September 2014 on $4.84 billion in revenue and operating income of $1.3 billion. This resulted in its stock price soaring 7% in trading today, leading to a 20% increase year-to-date.

Still, there’s a dark cloud hanging over the company’s earnings in that the U.S. financial regulatory body the Securities and Exchange Commission (SEC) is investigating its accounting practices when it comes to reporting of one of its sales metrics, called Gross Merchandise Volume. Admittedly, I’m not quite sure exactly what this metric is, but Alibaba itself did not address the investigation so we’ll have to wait and see what the future holds.

Have a great weekend, folks!

-Dom

There are a variety of factors that drive how well a product sells: cost, marketing, timing of release, inventories and consumer sentiment among them. When it comes to video games, publishers often target the demand side of the equation by either appealing to gamer nostalgia or innovating on a familiar concept in order to draw attention to their title within the vast landscape of games released today.

The creators of two upcoming indie games are using these tactics: Mighty No. 9, developed by Comcept/Inti Creates with publishing by Deep Silver; and No Man’s Sky, which is made and published by Hello Games. The former is a nostalgia play, with its Mega Man-influenced action-platforming gameplay, while the latter is a monumental effort in the space exploration/survival and flight simulation category, boasting an infinite universe for players to explore. Mighty No. 9 is releasing on a variety of platforms, while No Man’s Sky is a Sony PlayStation 4 “timed” console exclusive that will also be available on PC.

Both games have had an interesting history to date, which will certainly impact sales potential. Mighty No. 9 is the brainchild of former Mega Man producer Keiji Inafune, and was announced way back in 2013 with a Kickstarter crowd-funding campaign that has since raised around $4 million on the strength of 67K backers. However, the game has been delayed multiple times, annoying backers and potential consumers, and has been ridiculed for generic gameplay reveals and an especially corny marketing trailer (see below). Review consensus also seems to be negative overall from early impressions.

No Man’s Sky was revealed at E3 2014 to broad fanfare, though skeptics point out the game’s colossal ambition could ironically also be its downfall plus Hello Games has been quite secretive on what it exactly is that you do in the game other than explore its vast universe. The game has developed a fervent online following, and was originally scheduled for a release this month but has since been pushed back to August. Upon news of this delay, creator Sean Murray received death threats from crazed individuals. As much as this is pure insanity, it also displays the thirst for a game that perfects the space exploration genre.

So, what kind of sales potential do indie campaigns like this have? Mighty No. 9 has a very attractive price of $30, though the negativity swirling around its Kickstarter campaign and several delays indicates to me that the hype level is dwindling at the worst possible time with its release this week. Though the Mega Man series that inspired the game has sold approximately 31 million units to date, the highest-selling title in the series is Mega Man 2 at around 1.51 million copies.

I can’t see Mighty No. 9 being anywhere near as successful, even considering the 67K or so backers. I can see around 450-500K copies worldwide lifetime at the most.

Now, No Man’s Sky is a bit of a different story. It has established a following that is already starved for both information and a great game in the genre itself, so I believe it can withstand its recent delay. And even though it is only releasing on PS4 and PC, and it’s a full-priced $60 game, I still see lots of upside with the current install base of PS4 being around 40 million and the game itself appealing to a PC audience. Another promising point is that we’ve seen solid sales for space titles recently, as names like Kerbal Space Program by Squad and Elite: Dangerous by Frontier Developments (FDEV) have sold over 1 million and 500K units, respectively. Even an older title like EVE Online by CCP Games is still estimated to have around 340K active players.

With the hype surrounding No Man’s Sky, success of (somewhat) comparables and its release timing before the pre-holiday rush, I estimate it could sell upwards of 1.5-1.75 million around the world with most of those coming this year.

Do you agree that Mighty No. 9 will sell less than No Man’s Sky? Or do you think the uncertainty around delays of both titles will mean that neither will sell particularly well?

Note that Mighty No. 9 releases on Tuesday 6/21, while No Man’s Sky is currently slated to come out on Tuesday, 8/9.

Sources: Deep Silver, Hello Games, No-Mans-Sky.com, Capcom, Frontier Developments, Kickstarter, YouTube.

-Dom

Working Casual

Gaming, Media & Tech Coverage

Tag: Hello Games

Casual Friday: August 12th, 2016

Which Indie Video Game Has More Sales Potential: Mighty No. 9 or No Man’s Sky?