Review: Deathloop Is Made of Great Parts That Could Be Excellent Next Time Around

“If I’m not dead, then what the bleep am I?”

Well if it’s 2021, then probably caught in a time loop.

Expanding on a mechanic seemingly at peak popularity, Deathloop is the latest time-bending title to be set in a never-ending cycle that resets upon ending. And it’s a seriously good one, even if its punchy gameplay, clever level design and crafty progression aspects mask its fatal flaws such as lack of variety, uneven ability usefulness plus an unsatisfying story arc. Moments of excellence only highlight its potential for greatness, as it doesn’t quite reach the lofty heights it so stylishly attempts to grasp.

I adore so much about Arkane Lyon’s creation, which doesn’t fit neatly into current genre conventions. It’s a first-person action game with shooting, exploration, puzzle, stealth and run-based elements that presents as a sandbox immersive sim then really ends up being more linear and restrictive than it initially promises. Its timeline is out of order, a nifty way for the team to tell a narrative primarily by slowly dispensing information then allowing the player to manipulate outcomes within this overall framework.

The tricky part with a game as ambitious as Deathloop is certain parts feel lesser when compared to superior ones, like a full course meal where the main dish is exquisite yet the appetizer and dessert are unfulfilling.

That mysterious, quick-witted woman is Julianna Blake who acts as the main antagonist. While mercilessly heckling Colt via the radio, her goal is maintaining the loop’s integrity. Which means hunting Colt as he tries to kill seven other fellow Visionaries. She can invade mid-run, controlled by either AI or a person online. This sort of multiplayer is a novel concept where it’s much more fun to be Julianna of course, busting up a run as opposed to losing. Visionaries themselves have key roles in the history and management of Blackreef, and the loop ends only if they are taken out in a single day.

This place is meant to be a utopia for most inhabitants dubbed “Eternalists” as they are experiencing a form of amortality, effectively being unable to die. To Colt, it’s a suffocating trap from which he must be freed. He and Julianna retain knowledge across loops, an important distinction compared to most everyone else who are experiencing the “First Day” indefinitely. 

During a tutorial that’s a contender for longest ever because it takes a couple hours to get one’s bearings, the game spills its general structure and gameplay tips. There are four different areas across Blackreef: Fristad Rock, Karl’s Bay, Updaam and The Complex. Each can be accessed via a menu at four times of day: Morning, Noon, Afternoon or Night. Time doesn’t move forward while at these locations, only in the menu between them. And order doesn’t matter, Colt can wait until a later time of day if needed. It’s a smart way to allow players to take time devouring each map, learning the intricacies without the pressure of a ticking clock. Once nighttime is over, or Colt perishes, the loop resets back to dawn.

Which means there are 16 different combinations, all of which take place on the same base area yet showcase a variety of scenarios. Places look fresh in the early sunrise while everyone is waking up, possibilities supposedly endless to all. By sundown, the worst are battered or blown up. The best are ready for a snazzy masquerade ball or big environmental puzzle. It’s through these mechanisms that Colt influences the world to precisely line up his kills. The player’s main goal is to figure out how to either manipulate characters or leverage their movements across areas to achieve an “ultimate” run where every single one doesn’t survive.

Objectives in Deathloop are organized using a system of leads: One is a set of Visionary storylines, mapping out where each individual starts and the most relevant information learned to bring about their demise. What’s curious about these is they don’t actually end the first time Colt kills a given Visionary. He has to do it the correct way for the lead to “complete”, which means it’s then ready to be a part of his master plan.

For instance, the first big lead during the tutorial phase is Doctor Wenjie Evans at The Complex. She’s actually the one responsible for the loop, her hope was to have an eternity to learn about it and while studying she realizes she comes to the same conclusions each day. Thus realizing she forgets each night. Her major contributions are related to upgrades I’ll discuss later. Her main ability is duplication, pulling in copies of herself from other timelines. While one way to kill her is taking out each of her copies, that might not be the optimal outcome.

The other objective type is a set of Arsenal Leads. These aid in learning how to acquire Slabs, unique powers from most Visionaries, plus select elite level weapons. Slab acquisition happens naturally while targeting the Visionary Leads, then high-level weapons act as a sort of side quest within the guidelines of each run. This is essential in my opinion, especially given the game’s limited arsenal.

There are also menu options for Discoveries and Documents. The former shows action items that build up over time as the player explores. The latter is anything related to character journals or audio logs. Some are essential to move the narrative forward, others reward with bits of lore and help round out what the heck is going on while some explain minor systems. All of this is a lot to take in and was overwhelming for a while.

From this menu navigation to moving around the world and engaging in combat, Arkane has made a core experience where almost everything has such a great feel. Controls are snappy and always responsive. There’s this tangible feedback, partially due to technology in the DualSense controller, that bolsters immersion even in the most basic of interactions. 

Gameplay for the most part is predictable for a first-person game, especially in the Arkane lineage of Dishonored and Prey. There’s walking, traversal, climbing, shooting and grenade tossing. Stealth is viable and I’d argue essential in the first half of the game’s 20 to 30 hours. A “focus” button can mark and examine a certain number of enemies, which is helpful when gauging the layout of a new area. Then there’s hacking of sensors and turrets via the Hackamajig, an on-the-nose gadget which somehow also acts as a radio.

Weapons fall into traditional archetypes: pistols, shotguns, submachine guns and rifles. There really aren’t that many different options. Long range is particularly lacking. And early on, rarity is low. Colt finds a base level gun early to practice target shooting. Every other piece of gear is picked up from defeated enemies. Visionaries and Arsenal Leads having the highest quality. Crappy weapons can even jam, “because they are old” the game argues, which is quite literally the opposite of fun. I wish it was never greenlit. It’s the type of system clearly added to encourage stealth in the early parts, even though the player’s low health and minimal ability suite already does that. Luckily, the best weapons won’t jam which leads me to wonder why have it in the first place.

Each Visionary has a role to play, a distinct personality, individual relationships and most even have fancy powers to steal. These are called Slabs. They offer up core abilities, which will be familiar to fans of Arkane’s earlier works. The first of which is Reprise, a slab intrinsic to Cole’s loadout which can revive him twice. There are five others: The teleporting Shift from Charlie Montague. Aether from Egor Serling offers invisibility. Nexus links foes together so hurting one does the same to everyone else, held by Harriet Morse. Fia Zborowska has Havoc, basically an enrage cheat code. Then there’s Aleksis Dorsey’s Karnesis, a form of telekinesis that can throw enemies around. Julianna can actually use any of these abilities, so she’s another source. Using these takes a regenerating resource called Power.

A nice system around these slabs is upgrading them. The first time a Visionary is killed, Colt earns the base slab. Each time after that, he can collect an upgrade linked to their particular ability. It’s an incentive to finish out portions of a run or to take down Julianna when she invades. For example there are slam and area-of-effect options for Karnesis, while Shift can reach further or hover in mid-air. Very much welcome, especially the latter for rapid traversal.

Enhancing Colt and his gear are items called Trinkets, customization options that have a notable impact. These are pieces “imbued with Blackreef’s temporal anomaly” and can either be made in certain locations or picked up from enemy drops. Character trinkets are general buffs like boosted health, more power, faster movement and the like. Weapon trinkets can improve accuracy, damage, rate of fire or reload speed. Combining these helps beef up Colt to take on a more run-and-gun approach, or spec towards stealth with more silent alternatives.

So, how does the player retain things other than knowledge across runs? A mechanic called Infusion, originally discovered by the aforementioned Dr. Wenjie. Using Residuum, a resource collected from items throughout the world or by killing bosses, the player can carry over weapons, slabs and trinkets from one run to the next. Anything in one’s current inventory can also be sacrificed for a select amount of Residuum, which means duplicates or unused items can be useful. Especially because Residuum itself can’t be carried over at the end of a night and is lost upon death, so it’s essential to hang onto it and allocate towards becoming more powerful.

Regrettably the rules of Infusion are confusing. Presentation in the menu is messy. It takes a while to understand what carries over and why, resulting in missed infusions or precious lost items. The best approach is to infuse anything and everything because there’s a risk of dying and losing everything that isn’t locked in. There’s filtering options which can help a bit, it’s still not the most intuitive upgrading path.

The ultimate problem here, and it’s one of my major gripes with Deathloop, is the limitation of its loadout system. Having three weapon slots is perfectly fine. That works. It’s the slab and character trinket options that hurt. Colt can only have two slabs equipped at once. Shift alone is almost an essential power, therefore always taking up a slot and making it so that there’s one spot for four other slabs. If Colt can have all these slabs at once, why can’t he use them? I mean Blackreef is this special temporal location where time is clearly special. Isn’t there a lore workaround that would allow him to alternate between more than two slabs?

Similarly character trinkets are limited to four. Double jump is classified as a trinket rather than an inherent skill. So it’s really three slots as far as I’m concerned. Double-jump is a ridiculous video game thing that most characters have by default. Colt should too. I assume Arkane wanted to streamline these systems so as to not confuse players, since their prior games had a ton of different skills. So then let us pay Residuum to unlock additional slots as we get to know the game. It could focus attention during the early portion then add to character growth later on, and by the end both Colt and the player would understand how to leverage them together.

The tricky part with a game as ambitious and feature-packed as Deathloop is certain parts feel lesser when compared to superior ones, like a full course meal where the main dish is exquisite yet the appetizer and dessert are unfulfilling.

Setting up these loadout setups and character systems is well and good. I’m surprised to report that the best moments happen when it all goes to crap. Which is often in Deathloop. At least for me. It’s the exact opposite of something like Dishonored in that regard, where I never had any success with combat. Shooting hits hard here, and it’s the most enjoyable and effective strategy other than the first few times through each level. Assuming the player has powered up. Downside is stealth is much more of a slog than arousing the sort of tense dread that’s key for such sequences. I just didn’t feel as compelled to take my time when the alternative felt that much better.

Tying into the location mechanic mentioned earlier, a most genius move from the development team is its take on progression. The player chooses where and when to start a given go, whether it’s for key information gathering, targeting a Visionary’s unique power or focusing on an individual weapon lead. It’s the type of rewarding feedback loop that makes a player feel smart and more enabled, both from a knowledge standpoint plus actual in-game capabilities. Colt as a character is growing as he’s remembering why the heck he’s on Blackreef.

There’s also progression baked into levels. Certain collectibles talk about the player’s prior actions. Enemy placement also changes based on time of day. Some denizens are drunk and easy to kill. Others have geared up so they are much stronger. Visionaries can move around and be manipulated. The most glaring instance here is a big party thrown by Visionary Aleksis Dorsey taking place at his mansion in Updaam. It’s really the biggest singular event during the loop. Depending on what Colt does during earlier phases of the day, major characters will attend the event which makes it easier to take them out in succession.

Contributing to a sense of place and aesthetic, Blackreef has its own distinct look plus history to discover. Aesthetic does a ton of heavy lifting in Deathloop. Style is uber slick, a 60’s jazz-spy vibe complete with war-torn trappings, scientific experiments, pop art decor, a soundtrack full of piano chords with blaring horns and even animated sequences straight out of a noir cartoon thriller. This is totally enhanced by ongoing banter between Colt, his inner voice and Julianna’s constant poking fun.

The famed Arkane level design and environmental expertise is solid in this sort of setting. Cold War era industrial buildings allow for labyrinthian corridors and subterranean passageways. The Complex is Blackreef’s research center, where Dr. Wenjie and Egor Serling conduct unconventional tests in sterile laboratories plus outdoor satellite arrays. Fristad Rock houses an intricate upscale dance club and mysterious underground bunker. All locations have various locked doors and un-powered levers, clearly indicating the need for further information. What’s cool is most access codes are randomized, meaning they change for different players and even across loops. It’s a crafty way to change things up.

Updaam houses a handful of its most stellar areas, mainly because that’s where gamemaker and Visionary Charlie Montague operates plus Aleksis hosts the aforementioned mansion party. Montague has built these live-action games scattered throughout different maps which he calls “Charlie Challenges.” The Moxie is a set of laser and pressure plate challenge rooms. Condition Detachment is the name of his space invader type of game, which houses his personal lair and one of the main areas where he’s vulnerable. There’s also Charlie’s robot called 2-Bit, made from half of his brain and one of the few sentient beings that remembers things across loops. It’s crucial to explore these areas.

This is all to say one of the things Deathloop does best is make Blackreef as memorable for its character as its practicality, namely in offering alternate route options for Colt. It’s a bizarre place where intriguing scientific questions are asked and not many answers are needed by most.

The run-based nature here and neat side activities lends itself well to quick sessions as much as marathons. Someone can play strictly for the purpose of gathering information. Others are used to take out Visionaries. Even get in on some invading. Within the industrial shore town of Karl’s Bay, there’s an unconventional way to make trinkets. An amatuer science team sets up a failed experiment to harness Blackreef’s temporal power. There’s a machine that exposes the area to “visitors” from other timelines, which Colt has to kill quickly in order to collect enough Residuum. There’s plenty of individual tasks to complete, even if some aren’t necessarily as rewarding.

Speaking of rewarding optional content, I have to give a special shout out to Heritage Gun. It’s a top-level Arsenal lead reward from arguably the best side event in the game which spans an entire map. While technically a shotgun, it has a slug round mode with incredible range. Fans of The Chaperone in Destiny will agree.

I mentioned the feedback and general feel before. A major component is sound design in Deathloop. It’s straight up mean. Pure. Colt’s boots crunch across the hard cement. Julianna’s radio chatter emanates from the DualSense controller speaker. Announcements from Visionaries blare through the streets. And the kill sound when using a weapon is up there with the best shooters of all time, crunchy and violent. It’s especially satisfying when using a rifle.

Tying in with the audio design is how voice acting, dialogue and writing is top-notch. Especially the two main characters. It’s amazing to see black leading characters and actors in a triple-A game of this caliber, both of which are exceptional performances. Jason E. Kelley plays Colt and Ozioma Akagha features as Julianna, each getting the best out of the other. It helps that their writing is savvy, and I looked forward to hearing their quick antagonizing at the start of each sequence.

Unfortunately, the distinction within Deathloop for its most fatal of flaws is rigidity of effective play styles and lack of variety hidden beneath the veil. Weapon archetypes are restricted to just the handful I mentioned before. And there’s at most a couple within a given type. Especially long-range. Other than a sniper hidden behind an Arsenal Lead, there’s a single rifle to find. Some of its best top-end gear is locked behind the Deluxe Edition.

The decisions around loadout options are most restrictive and unfortunate. Certain powers feel essential, like Shift allowing teleporting and quick movement especially vertically. Others are flat out inferior or hyper-specific for more hardcore fans. Like Nexus, the one that can tether enemies together, is fiddly and unreliable.

I was hoping Arkane kept with its tradition of giving players more credit in our understanding of how abilities can synergize. I know Deathloop leans into action elements more than its predecessors. The beauty of an immersive sim or sandbox game is still flexibility of choice. Limiting the use of various hard-earned powers feels like an unnecessary constraint. Hand the player tools then let them decide, rather than forcing them to pick.

Elsewhere there’s superfluous features that didn’t jive with so many other smart decisions. There’s a sort of cosmetic outfit system for Colt and Julianna, which doesn’t mean much when everything is first person. These are mostly earned by protecting the loop as Julianna, which I guess is some incentive to play as her. Then there’s dual wielding weapons, a setup that’s against the very framework of having a weapon in one hand then a power or hacking device in the other. The only time I used it was with one of the special weapons that transforms from dual pistols to a submachine gun, because there’s a damage boost associated with doing so.

In terms of opposition to Colt’s bloodbath, most enemies are flat-out dumb. The main challenge comes from overwhelming numbers rather than savvy tactics. Difficulty levels in this context would be very much welcome. It’s so easy to trick or lose Eternalists. At least it can be hilarious!

For the most part, Deathloop avoids the deathtrap of most time loop games: Repetition. That is until the endgame, when there’s little else to figure out or discover. When the targets are all lined up. There’s really only one way to finish the game properly. So it comes down to execution. It’s demoralizing to be invaded or make one mistake busting that final run. Losing time towards the finale is what hurts most, not materials or upgrades because the player is swimming in them by that point.

Arkane shows its more level-based roots here in guiding toward the optimal run, less akin to moving chess pieces on a board and more like finally seeing the solution in a board game with a predefined path. No matter what one has done before, conforming to the “right way” is the only option. Which is why I consider Deathloop to be ultimately a linear narrative jumbled up to make it seem otherwise, which is excellent during the discovery phase then traditional once the picture clears up.

I will say its final gauntlet of ripping through the Visionaries was admittedly intense the first time I did it. Like a boss rush. It was amplified because Julianna showed up at night during the last push. I wonder if the game’s programmed to do that. If so, kudos to the team for ramping up that adrenaline. Subsequent tries are much less so, because the player already knows what to do. It’s the problem of knowing a solution before being able to finish a puzzle, leading to an anticlimactic situation.

Quality of life features and various options are a mixed bag. The tutorial menu is exceptional. All of the game’s mechanics and systems are organized in a single spot, which is convenient. Heads-up display has a ton of flexibility. There’s not much in the way of dedicated accessibility options beyond text size. No colorblind considerations or detailed controller mapping. There’s no actual map or waypoint system, which could be helpful even considering all the hand-holding it does documenting everything the player finds. Plus there’s no photo mode, for those that might be curious.

Visual options on console are more varied. All of them have dynamic 4K scaling. One mode favors resolution, a second is where performance prioritizes a steady 60 frames-per-second then a raytracing mode. Naturally I played in performance mode, which was flawless. I have read about certain challenges on PC, which Arkane is addressing.

Sad to report I did experience certain technical issues on PlayStation 5. The game hard-crashed twice, causing me to lose progress since it saves only at the start of a given area. I had one instance where the menu overlay froze and wouldn’t leave the user interface, making the game unplayable without restarting. The most weird of all was on the controller side, losing control of the character, dropping inputs and not being responsive. I’ve never had that happen with any other PlayStation 5 game since its launch. I even updated the game pad to the latest software, it continued to happen occasionally.

Ultimately Deathloop feels like the foundation of an incredible game most notably in its structure, systems and level design. Its style is impeccable, which only carries it so far.

Here’s the toughest part of Deathloop. Maybe this is personal, though I bet I’m not the only one. It can be tiring playing a game where you have to be “on” all the time. When everything is out to kill you. It would be ideal if there were ways to guard against being seen. If cosmetics actually acted as disguises or deception came into play. Maybe more eavesdropping and investigation. Learning information by pretending to be an Eternalist. Using a mask to mingle at Alex’s party then isolate a target. The “sneak around until caught then murder anything that moves” mentality is much more basic than comparable assassin simulators like Hitman. It can feel just as badass to execute a clinical misdirection, and it’s often more efficient.

To act within the constraints of Deathloop takes a lot of experimentation, patience and time. One early tool-tip pops up to say “don’t just shoot everything.” Once Colt is powered up, it’s quite literally a feasible option, if not the best path, to do exactly that. Why slow and steady when there’s a much more effective strategy? There can be fun in experimentation I guess, though is that a good enough motivator for most players? Not those like me.

Up until this point, I haven’t included much about its narrative. It’s tricky to avoid spoilers in the context of a time loop game, and honestly the story isn’t anywhere near a highlight. There’s random tidbits of history and lore told via collectibles. Julianna drip-feeds certain points of Colt’s past during dialogue. I think the story itself is less important than the manner in which it’s told here. There’s also the ending, of which there are multiple versions, all of which are disappointing and ambiguous. I’m alright with open-ended conclusions. This just isn’t a partially good one of those.

Ultimately Deathloop feels like the foundation of an incredible game most notably in its structure, systems and level design. Its style is impeccable, which only carries it so far. It’s truly a more constrained, even linear experience disguised as something with more options and possibilities. Story is jumbled by its nature then even when it’s mapped out, it’s mostly middling.

It claims to offer a lot, then limits how the player uses its tools. This makes it tricky to describe Deathloop at its core. First person action? Puzzle murder sim? Run-based shooter? Semi-sandbox stealth? If this were a test, the only answer would be “it wants to be all of the above which means it ends up being something else.”

Some of these make it amazing. It’s a heck of a lot of fun in the heat of battle, hip-firing shotguns and clearing baddies on the way to a boss room. Then slows to a snooze, walking the same looking rooms for crumpled papers or recorded logs. There’s rewarding side content, then optional exploration that just isn’t worthwhile except for the most diehard of lore fanatics.

It’s a conundrum. In some ways more ambitious than predecessors in Arkane’s heritage, yet the result is just as focused. Jumbling the timeline is a clever presentation style. Like a murderous Memento or even more bloody Pulp Fiction. The journey of getting there is where true genius is revealed, because the final revelation is much more pedestrian than it could have been.

It’s presented as having freedom and creativity mixed within a loop concept. It ends up being closer to a linear shooter campaign with a handful of powers and select hacking capabilities all jumbled up a la Source Code, where the goal is to figure out how to execute the right outcome rather than an outcome of one’s choosing. There’s fun in getting there, it’s a fantastic game. There’s just a handful of elements that miss the mark, enough not to dub it a masterpiece.

Title: Deathloop

Release Date: September 14th, 2021

Developer: Arkane Lyon

Publisher: Bethesda Softworks

Platforms: PlayStation 5 (Timed Console Exclusive), PC.

Recommendation: It’s an odd one from a platform standpoint, the rare PlayStation 5 console exclusive published by a company now owned by Microsoft. Deathloop itself is up there with Arkane’s prior releases, especially better on the action side. Definitely a must-play for PS5 and PC owners specifically those that prefer shooters as opposed to pure stealth games. Don’t expect it to say much thematically or in the way of a riveting narrative. It’s purely a fun time figuring out puzzles, select side content and blasting through maps full of enemy fodder. Worth it!

Sources: Bethesda Softworks.

-Dom

Madden & Mobile Score Big in Record August Report for U.S. Games Industry Sales

Yes, it’s football season again in America which means autumn is on the way. And a new Madden NFL game is atop the charts.

The world is returning to its natural order.

Jokes aside, I first want to say I hope everyone is well in this challenging portion of the pandemic. Which is still going on, despite what some might have you believe. I wish you and your families all the best during this still difficult time. Hang in there.

Hopefully for a quick distraction, industry tracking firm NPD Group reported its monthly U.S. games spending report for August 2021. It’s a huge one. As in almost $4.4 billion in spending, which marks an August record for overall sales across the industry’s history.

Within the Video Game Content category, which saw monthly sales growth of 5%, the aforementioned Madden NFL 2022 led the total software chart. This is a feat the Electronic Arts-published franchise has accomplished now for a staggering 22 straight years during its launch month! The last time a Madden NFL title wasn’t the best-seller in its first month was August 1999 when wrestling game WWF Attitude outpaced the start of Madden NFL 2000. Granted, this was a time when the latter of which had a limited amount of days during that measured period.

Mobile continues its climb notably as more people open up their commutes and traveling, accounting for over $2 billion or roughly 45% of the domestic spending total. Led by Candy Crush Saga, Garena Free Fire and Roblox among others, this segment is a driving force behind the record August performance.

Swapping to the console side, Nintendo Switch, Sony’s PlayStation 5 and even Xbox Series X|S continue solid trends leading Video Game Hardware category spending to a 45% increase and an August dollar total that hadn’t been reached since 2008. Nintendo Switch was the best-selling in August by unit sales, thus retaining its spot as the top-seller for 2021 so far. This unit sales lead is the 33rd consecutive month for the hybrid console, which I expect to continue thru next month and beyond with the launch of its new OLED model.

PlayStation 5’s first year momentum marches on despite widespread supply shortages. It was August’s highest-selling platform by dollar sales, a metric by which it also leads for the year to date.

The literally massive PlayStation 5 has been on sale for 10 months now. During that time, it’s the fastest-selling PlayStation brand platform in tracked history. As I noted last month in July, NPD Group reported it was the fastest-selling hardware ever thru nine months at the time. Now that its comparison has reached the Nintendo Switch’s holiday season, the PlayStation 5 no longer holds the top spot. Still an impressive run given constraints on the inventory side. It could even return to being the quickest seller, depending where production goes.

Now that I’ve hit the highlights, it’s time to move into the full August figures.

United States Games Industry Sales (August 1st, 2021 – August 28th, 2021):

As detailed in the above gallery, overall consumer spending rose 7% to $4.37 billion during August 2021. Spurred mainly by Madden, mobile, subscriptions plus both older and newer hardware growth despite semi-conductor concerns, this is an August month record across NPD Group’s tracking history. Full-on proof the games industry keeps on moving as the most popular entertainment vertical.

Expanding to annual figures, total consumer spend on gaming year-to-date hit nearly $38 billion. This is 13% higher than the first eight months of 2020. All of the three major categories saw double-digit growth during this time, showcasing the stickiness of demand, general fan retention and even audience expansion.

Video Game Content i.e. everything from software, mobile and related sales made up the bulk of these monthly totals, reaching $3.88 billion in August. Or around 89% of overall spend. Which is 5% better than the same time last year. Underlying this is the sixth month in a row where mobile alone generated $2 billion, something that only happened three times all of last year.

As NPD Group reports have shown recently, the strength of 2021 to date sales continues with Content alone moving up 11% to $33.33 billion in aggregate during this time-frame.

Digging into individual title performance during August, I mentioned before how Madden NFL 2022 led the chart during its first month on sale and maintained an historic streak going back more than two decades. As a result of.. kicking off this initial performance, the game is immediately the fourth best-selling title of 2021 so far.

Football wasn’t the only big story of the software list. Open world samurai slasher Ghost of Tsushima, which came out on PlayStation 4 back in July 2020, saw a resurgence in August due to the start of its Director’s Cut version including an upgrade path to PlayStation 5 alongside a new expansion. Sony’s PlayStation exclusive was ranked 110th in July. Talk about making moves!

Rounding out the Top 3 was, of course, Call of Duty: Black Ops Cold War as it entered its latest Season 5 of ongoing content. The military shooter is published by Activision Blizzard, a company that’s still under a lawsuit due to reported workplace toxicity and a culture of abuse towards women and marginalized people. I’m behind the employees fighting back against executives.

Right after this was the 4th best-selling title of the month in turn-based strategy game Humankind. Published by Sega and made by Amplitude Studios, it was the top-selling PC game during August. It’s already 5th on the 2021 to date chart for PC as a platform. An exceptional start, especially for a game without a console release just yet. (I guess it did launch on Google Stadia.. hah.)

Otherwise, the top monthly rankings were about as expected. Business as usual for a couple Nintendo games among the ten best-sellers: the ever-present Mario Kart 8 then The Legend of Zelda: Skyward Sword HD moving to 7th from its top spot in July. The publisher has a number more in the Top 20, as always.

Minecraft in there like usual. Assassin’s Creed Valhalla did show a nice move back into the Top 10 from #20 in July, likely due to ongoing support via Ubisoft’s downloadable content. In terms of new releases, No More Heroes 3 from Grasshopper Manufacture started at #42. Tough to contend in August as a Switch exclusive and with only a few days in the tracking period.

Below are the software ranks across all measured platforms for August plus year-to-date.

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

  1. Madden NFL 2022
  2. Ghost of Tsushima
  3. Call of Duty: Black Ops Cold War
  4. Humankind
  5. Marvel’s Spider-Man: Miles Morales
  6. Mario Kart 8*
  7. The Legend of Zelda: Skyward Sword HD*
  8. Minecraft
  9. Assassin’s Creed Valhalla
  10. MLB The Show 21^
  11. Super Smash Bros. Ultimate*
  12. Call of Duty: Modern Warfare 2019
  13. Ratchet & Clank: Rift Apart
  14. Animal Crossing: New Horizons*
  15. Pokémon Sword & Shield*
  16. Mortal Kombat 11
  17. Super Mario 3D World + Bowser’s Fury*
  18. The Legend of Zelda: Breath of the Wild*
  19. Mario: Golf: Super Rush*
  20. Super Mario Party*

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

  1. Call of Duty: Black Ops Cold War
  2. MLB The Show 21^
  3. Resident Evil: Village
  4. Madden NFL 22
  5. Super Mario 3D World + Bowser’s Fury*
  6. Marvel’s Spider-Man: Miles Morales
  7. Mario Kart 8*
  8. Monster Hunter Rise
  9. Minecraft
  10. Assassin’s Creed: Valhalla

Video Game Hardware remained the biggest monthly grower shared by NPD Group, jumping 45% to $329 million in total spend last month. This is the single best August result for the category since $395 million back in August 2008.

“Were enough units available to actually satiate consumer demand this year, I have little doubt this record would have been absolutely smashed,” said NPD Group’s Mat Piscatella after sharing the report.

And I concur. We’ll never know the ceiling for hardware sales during these recent months with a dire chip situation for everything from automobiles to consumer tech to appliances and beyond. The unfortunate part is how this is expected to continue in the near-term, so this category’s true potential during this latest generation of platforms won’t be revealed until years to come.

Within these constraints, I mentioned before how Nintendo Switch retained the top spot in August and 2021 by unit sales thus increasing its incredible streak of monthly wins. Since November 2019! This begs the question of how long can it go? Based on a potential pricing move for the base model and demand from enthusiasts for Nintendo Switch OLED, launching worldwide October 8th, my guess is unit sales thru the holiday season will be led by Nintendo’s hybrid console.

Dollar sales leader for both August and year-to-date PlayStation 5 is faring well, even if no longer the fastest-selling platform in history. Both Game Boy Advance and Nintendo Switch are now ahead of PlayStation 5 during each platform’s respective first 10 months on market. Within Sony’s storied gaming history, it’s still top dog. Between that and leading recent months by revenue, partially bolstered by a higher price point than Switch, the PlayStation brand is as ubiquitous as ever.

Similar to recent months, there wasn’t much in the way of details on Microsoft’s Xbox platform sales. NPD Group did reiterate how Microsoft is selling-thru to buyers as many Xbox Series X|S boxes as it can produce in the States. It’s just seemingly not as many as its competitors. I’m curious about these production dynamics, in particular the gap between platform performance. I didn’t see a comparison or any granularity past these general comments.

We’ll have to live for now knowing that all three major manufacturers are performing consistently in the domestic market, just a matter of how well!

Last category on the docket before closing up shop is Video Game Accessories. It’s the only one of the three that didn’t experience growth during August, coming in exactly flat at $164 million in contribution.

This was Microsoft’s category to shine last month. The team’s Xbox Elite Series 2 Wireless Controller achieved best-selling status out of all accessories, implying that even though many people can’t buy consoles, the high-end game pad is attractive. Mainly because of its compatibility with various generations and devices, including Bluetooth capability for use with cloud gaming.

When looking at the year as a whole, the result for Accessories stays much more positive. Its annual figure to date is up 12% compared to last year, reaching nearly $1.59 billion. Sony’s PlayStation 5 DualSense Controller white variant kept its position as the year’s highest-selling accessory. No doubt mapping in parallel to its underlying console trajectory, as folks opt to purchase additional game pads for co-op or multiplayer use.

Another month in the books. While it wasn’t the most eventful, there’s still plenty of news, indicators and trends to follow.

Yet another record for overall spending, this time an August month, and hardware growth leading to the best category result in 13 years. A set of impressive streaks for Nintendo and Electronic Arts, while Sony’s latest platform trajectory remaining the best it’s ever been.

Companies selling out of console stock, trying desperately to make enough to keep up with intense demand. Big movers and shakers on the software side, plus mobile’s steady presence for content spending alongside subscription services increasing in popularity.

Top-end game pads propping up an accessories segment that often moves as hardware does early in a cycle.

September marks the last month of the third quarter already! It’s a busy one, even in a year with noticeably less output at the triple-A level. Perennial seller NBA 2K from Take-Two Interactive has a new annual entry. Nintendo’s silly party game WarioWare: Get It Together is out. Then there’s Deathloop, the unusual Xbox Game Studios title exclusive to PlayStation 5 that I predict will outperform. Life is Strange: True Colors, Lost Judgment, Diablo II: Resurrected and I imagine a surprise or two will be featured in stories upcoming.

Not to mention the biggest topic in hardware next month as Switch’s OLED model hit shelves. How will it fare given the environment, and will PlayStation 5 keep pace? Can Microsoft boost Xbox output to compete in the rankings?

We’ll know more then. Thanks everyone for stopping by this month and hope to see you again soon!

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

Comparisons are year-over-year unless otherwise noted.

Sources: Electronic Arts, Neil Gardose (Photo Credit), The NPD Group, Sensor Tower.

-Dom

Hardware & Zelda Propel U.S. Games Industry Spending to Record High July

The domestic games industry is rolling with the excessive wave of warm weather hitting the States lately in that it’s heating up during these Summer months, as consumer spending in July 2021 reaching a record high for any July in history.

Industry tracking firm The NPD Group shared its latest U.S. monthly sales report this morning. In which, all signs point to continued momentum especially within hardware, even considering tight supply conditions limiting inventories in the market for next generation consoles from Sony and Microsoft. This and content spending increases notably for mobile, subscriptions and post-launch are likely bolstered by returning mandates hitting the country as variants of coronavirus spread.

Despite what a bad opinion piece from a major media outlet that I won’t link here might say, people are most certainly still enjoying games. And buying new devices on which to play them, for longer than ever.

Overall consumer spending across Content, Hardware and Accessories totaled nearly $4.6 billion in July. That’s a solid increase of 10% since this same time last year and a record amount for a July month across tracked history, dethroning last year’s $4.2 billion.

In terms of dollar sales, Content continues as the largest contributor though it was the only category of the three not to experience double-digit growth. Hardware gains proved resilient, nearly doubling year-on-year spend driven by another unit sales lead for Nintendo and PlayStation 5 continuing its historically quick start. Accessories wouldn’t be left out of the party as it actually set a July sales record of its own, influenced by a new product offering from Nintendo.

Software charts boasted two new games in the Top 3, both from storied franchises created by Japanese publishers Nintendo and Capcom. Activision Blizzard’s Call of Duty franchise had another month where two of its games ended up in the general Top 10. The real story there is how the American publisher should be called out for reports of its toxic workplace every time its games are mentioned now.

It’s time for the numbers behind an exceptional July for broad U.S. games industry spending.

United States Games Industry Sales (July 4th, 2021 – July 31st, 2021):

As I mentioned above, it was a record July month for overall monthly domestic spending on games at $4.6 billion. When expanding to 2021 as a whole, total video game sales rose 14% to $33.5 billion across the first seven months. Gaming is still the preeminent entertainment experience, especially as platform holders delve more into the subscription side appealing to folks with both traditional and on-the-go devices.

Within the largest sub-category of Content i.e. software etc, it was mobile, subscription and post-launch spending boosting sales during July to just under $4.1 billion. That’s a moderate 6% increase. Year-to-date Content currently totals $29.4 billion, moving up 12%.

The Switch Effect remains in full effect here on the overall monthly software chart. Nintendo’s hybrid platform claimed four of the Top 6 spots as console or outright exclusives, three of which are published by Nintendo and don’t even count the digital portion of their sales!

The Legend of Zelda: Skyward Sword HD took home top honors in July. I didn’t see much in the way of context here within the report, and I’d love to know how this remaster compares to the original game launching on Wii back in November 2011. All I can say is the first game debuted at #9, so I assume there’s a sizeable difference here. Will update if I hear anything.

Next at #2 is chart mainstay Call of Duty: Black Ops Cold War from Activision Blizzard, the American publisher that’s under a lawsuit because it reportedly doesn’t treat its employees well at all and fosters a “frat boy” workplace culture. The game’s latest season launched today, and I give props to every single employee working hard to keep up with its ongoing content roadmap amidst this difficult environment. Worth noting that 2019’s Call of Duty: Modern Warfare is back in the Top 10 this past month, at the ninth spot.

Capcom’s Monster Hunter Stories 2: Wings of Ruin landed third on the total rankings. The Switch title that’s also available on PC already generated triple the *lifetime* sales of the original Monster Hunter Stories 2017 release on Nintendo 3DS. Wow. NPD Group Analyst Mat Piscatella called this biggest surprise of the month, and can’t argue there. Monster Hunter as a whole gained a more global appeal since Monster Hunter: World in 2018, seemingly now to the point where even console exclusive spin-offs are gaining heavy traction.

Moving down the list, I have to point out Mario Kart 8 and MLB The Show 21. First off, who keeps buying Mario Kart? Well it’s probably anyone purchasing a Switch, right. Which is plenty of people right now. I’ve pushed back my expectations for a Mario Kart 9 every time I see it achieve a Top 5 month or reach a new milestone on global sales, which are now at over 37 million units.

Then there’s MLB The Show 21 at #7 in July, allowing it to set a new year-to-date sales record within the franchise. Not only that: Lifetime dollar sales of the game have already beat out last year’s entry to become the best ever for any MLB The Show game, a series which dates back to 2006. This is only its fourth month on sale! The multi-platform move and Xbox Game Pass decision by Major League Baseball made this game a mega hit.

The last of the new releases within the Top 20 was Neo: The World Ends With You debuting at #16. Launch month dollar sales of the Square Enix-published release started at more than double that of The World Ends With You for Nintendo DS in July 2007.

Finally, Capcom also launched The Great Ace Attorney Chronicles in July, a compilation of adventure games within the Ace Attorney series which started at the 22nd spot on the total chart.

Here’s a full look at two of the main software lists, first for the month then the year as a whole as of July.

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

  1. The Legend of Zelda: Skyward Sword HD*
  2. Call of Duty: Black Ops Cold War
  3. Monster Hunter Stories 2: Wings of Ruin
  4. Mario Kart 8*
  5. Minecraft
  6. Mario Golf: Super Rush*
  7. MLB The Show 21^
  8. Marvel’s Spider-Man: Miles Morales
  9. Call of Duty: Modern Warfare 2019
  10. Super Smash Bros. Ultimate*
  11. Ratchet & Clank: Rift Apart
  12. Animal Crossing: New Horizons*
  13. Tony Hawk’s Pro Skater 1+2
  14. Super Mario 3D World + Bowser’s Fury*
  15. Mortal Kombat 11
  16. Neo: The World Ends With You
  17. The Legend of Zelda: Breath of the Wild*
  18. Pokémon Sword & Shield*
  19. Resident Evil: Village
  20. Assassin’s Creed: Valhalla

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

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

Now, talk about explosive growth.

Hardware experienced the biggest increase of the three segments during July 2021 as sales nearly doubled year-on-year to $323 million. Up 98%, to be exact. It’s the best individual July month since upwards of $447 million back in 2008. Sounds like all three major competitors in Nintendo Switch, PlayStation 5 and Xbox Series X|S experienced increases naturally, just depends on how many boxes they can ship honestly.

Switch maintained its staggering streak of now 32 consecutive months atop the console ranks in July as measured by units sold. It’s also the year’s top-seller, by both units and dollars. Those new software title launches plus evergreens like the aforementioned Mario Kart continue to attract, and I’m very curious to see demand impact for the OLED model that hits market in October.

However, PlayStation 5 led console spending by dollar sales in July implying a higher average selling price and consistent retail demand for its supply-constrained platform. Sony’s latest generation box is still the fastest-selling home console as measured by dollar sales during its first 9 months on market. For now. It’s worth noting that next month will be the 10th for PlayStation 5, which corresponds to Switch’s first December. Even with demand as strong as it is, I don’t know if Sony can keep this streak alive given this timing and external sources limiting output.

On the Xbox side, the report didn’t shed too much light. Piscatella noted that Xbox console sales are “significantly higher” than one year back, albeit that was very late in the Xbox One life cycle.

For 2021 in aggregate, spending on Hardware jumped 50% to $2.7 billion. That’s again the best growth in the tracked sub-categories of Content, Hardware and Accessories. As we’ve seen all year, Nintendo’s Switch console is 2021’s best-selling so far. This time measured by both units and dollars. While not a shocking result, it’s certainly noteworthy for a platform starting off its fourth year on sale versus others in their early stages.

It’s time to accessorize, as July 2021 proved to be a historic month for Accessories as well.

Not to be outdone by its counterparts, spending on Accessories just set a new July record. Last year, July 2020 dollar spend was around $170 million. This year, July sales reached its brand new all-time high of $189 million.

And yes, there’s a theme. The Legend of Zelda: Skyward Sword HD Edition Joy Con debuted as the month’s top-selling accessory, no surprise really. So Nintendo’s latest launch in the Zelda franchise, even as a remaster, was responsible for the month’s best-selling game plus top accessory.

The white version of PlayStation 5’s DualSense Wireless Controller still holds the crown for now as 2021’s best-seller, driving category spending over the year so far to $1.4 billion. That’s 13% higher than the same period in 2020, almost mirroring Content spending growth.

Viewing July’s trend-lines in terms of growth within domestic games spending shows that ever since declines in the months prior to April 2021, monthly spending is now back on the rise. A July record nearly solidifies it. Spending across the industry right now reveals a blend of new audience members plus ongoing spending from casual and core players.

New software releases are helping of course, as is supply for new generation platforms. There’s consistency in both mobile and ongoing spending on the content side, and companies are selling-thru to consumers as many pieces of hardware that suppliers can push out.

It’s also the accretive nature of those people trying gaming for the first time or returning that’s defining this time over a year into the pandemic. Combined with an enthusiast audience still gobbling up Nintendo games plus pumping demand for PlayStation and Xbox, I’m not surprised by ongoing growth.

August marks what I like to consider the first major commercial push of the back half, marked by the launch of perennial seller Madden NFL from Electronic Arts. This year’s Madden NFL 2022 football franchise release kicks off on August 20th. Fully expect it to be the best-seller. August also has a couple notable updates to existing titles in Marvel’s Avengers: War for Wakanda expansion on August 17th plus August 20th’s Ghost of Tsushima Directors Cut. Even with Nintendo bereft of a major first party title and chip shortages ongoing, I’m leaning bullish on the month.

Thanks for reading, be safe and see you next time!

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

Comparisons are year-over-year unless otherwise noted.

Sources: Alvaro Reyes (Photo Credit), Bloomberg, The NPD Group, Reuters (Photo Credit).

-Dom

Sony Reports Biggest First Quarter Ever for PlayStation Revenue

The latest gaming manufacturer to report earnings is Sony Corp, this time sharing fiscal 2021 first quarter results. During which the Japanese company revealed its PlayStation division recorded its highest first quarter sales ever even as PlayStation 5 shipments slightly lag its predecessor. Though sell-through to consumers for this latest generation of hardware is still going at a faster pace, driving gaming segment results for the consumer tech conglomerate.

This is the first full quarter that’s compared against highs set during the height of stay-at-home requirements, so the impact of a global pandemic on gaming and consumer spending is coming into focus. A record Q1 for Sony’s gaming department shows that audience demand is resilient, especially on the console side, even if software spend is descending from a very tall peak.

Suffice to say, PlayStation is making history even considering supply challenges facing the industry alongside easing pandemic restrictions.

Sony’s Gaming & Network Services (G&NS) i.e. PlayStation brand revenue rose just under 2% to a Q1 record of $5.62 billion. Higher than even last year’s impressive result of $5.5 billion, this performance was mainly driven by PlayStation 5 demand and exchange rate changes despite lower 3rd party software and add-on content sub-categories.

Essentially for Sony at this stage three quarters into a new generation of gaming consoles, hardware is selling out though its audience spend on games is slowing.

On the profit side, G&NS segment quarterly operating income dropped 33% to roughly $760 million on higher costs associated with making and marketing a new console cycle. More so, that lower third-party software and add-on spending relative to last year. Still when taking a broader perspective, this is actually fantastic output. It’s the third best operating profit performance in a first quarter in the history of breaking out the gaming segment.

Speaking of PlayStation hardware sales, Sony shared updated shipment figures for both of its latest boxes. PlayStation 5 shipped 2.3 million units in the quarter ending June, bringing lifetime to 10.1 million. This is notable for a couple reasons. First, it’s about 500K lower than PlayStation 4 did in the same quarter during April to June 2014. So its pace of shipment is slowing compared to its predecessor, no doubt impacted by a global chip shortage that’s adversely affecting everything from automobile to graphics processor output.

However, shipments can’t tell the whole story when there’s more information available. Sony Interactive Entertainment said recently PlayStation 5 sell-thru to its audience hit the 10 million milestone as of July 18th. That’s 3 weeks faster than PlayStation 4 took to reach that same amount. Which means the number of PlayStation 5 consoles getting to consumers (or perhaps scalpers, I know) at this stage in the cycle is higher than any other in the brand’s history.

There’s also the underlying profitability dynamics for these PlayStation 5’s moving through to households. According to executives on the earnings call, its standard disc edition is actually now profitable per unit after the tradition of being sold at a loss during initial quarters. I’ll note the version without a disc drive is not yet breaking even.

As expected this late in the PlayStation 4 life cycle, quarterly shipments dipped below the million unit mark for the first time since launch back in November 2013. This brings its lifetime mark to roughly 116.5 million. I expect this slowing to continue, and wouldn’t be surprised if Sony’s reporting tops out around the 120 million mark.

Well then. It’s time to get into the nitty gritty for a bit, then end with forecasts and predictions!

The above gallery above shows relevant slides and a handful of charts I compiled to illustrate where the PlayStation division is starting out this new fiscal year. I know it’s a lot of data. But it’s goods stuff, I swear!

Expanding broadly, Sony overall saw sales rise 15% in Q1 to $20.6 billion. Growth in both Electronics Products & Solutions (EP&S) plus its Music category outpaced all other categories, although gaming is still the main contributor from a dollar (or really yen) standpoint.

Quarterly operating profit for the company topped $2.56 billion, up 26%. Driven by that same EP&S category, dragged down by higher expenses within PlayStation.

I mentioned the record quarterly sales and lowering operating profit for G&NS before, so let’s see how these compare when expanding over time to smooth out the results. This helps put quarterly performance into context.

When looking at trailing 12-month gaming revenue accounting for this latest quarter, it’s again at another record high of $24.35 billion. That trend-line is impressive, no doubt bolstered by people trying to get their hands on the coveted new console. Trailing annual operating profit hit $2.75 billion, with the dip in the latest time period. Still, it’s higher than this same time last year. As the company gets more efficient in making PlayStation 5’s plus sees component costs potentially lower, I expect it to bounce back again.

You’ll also see a chart above drilling into category sales results within gaming. Of course, Hardware is the biggest gainer as it’s more than double the amount last year for obvious reasons. Consistent with earlier comments, both Physical and Digital Software decreased in the double-digits as did Add-On Content. Sony attributed that to 3rd party declines. Network Services is proving resilient, moving up compared to last year. The final category Others encompasses peripherals, PlayStation VR and first-party software on non-PlayStation platforms almost doubled, I imagine boosted by DualSense game pad demand.

On the software and engagement side, Sony shared new figures for game sales, PlayStation Plus subscriptions plus Monthly Active Users (MAUs) in its supplementary filing, the last of which is the estimated number of unique accounts that uses PlayStation Network during June 2021.

Full-game software sales totaled 63.6 million across PlayStation 5 and PlayStation 4 during the quarter, substantially lower than the 91.4 million during Q1 last year. Within this, 10.5 million were first party exclusives, down from 18.7 million.

Thing is, this is more a reversion to the average than a decline. There’s also how last year saw the massive launch of The Last of Us Part II. Executives said every new release during April to June 2021 exceeding internal expectations. Ratchet & Clank: Rift Apart is at 1.1 million units since June 11th. MLB The Show 21 hit market on April 16th and has since sold 2 million units while attracting 4 million players, certainly benefiting from a simultaneous Xbox Game Pass launch. Returnal also released in April, reaching 560K copies in the interim.

There’s also a specific shout out to PC versions of Horizon Zero Dawn and Days Gone as Sony opens up its legacy first-party catalog to a brand new audience.

Paid PlayStation Plus subscriptions reached 46.3 million from an even 45 million last year, while MAUs were down to 104 million from 114 million. This movement shows a bit lower average engagement, though it looks like new console owners are signing up for the PlayStation Plus service that allows online multiplayer and provides access to certain games each month.

The leadership team provided a bit more color on these stats, saying that total gameplay time of PlayStation users declined 32% from the highs of quarantine impact. It’s up 18% compared to the same quarter of 2019 fiscal year, a more normalized period even if well into PlayStation 4’s lifetime.

Now, how does Sony’s $5.62 billion revenue and $760 million operating income quarter compare to recent results from peers in the industry? As I covered in my piece on Microsoft’s latest financial year last week, the Xbox division generated $3.74 billion in sales during the same time frame. And Microsoft unfortunately doesn’t report Xbox’s profit. Hardware was the driver again, though it’s clear that PlayStation is outpacing Xbox in that department early in this generation based on expert unit estimates and these dollar sales.

Separately for the other major Japanese games manufacturer in Nintendo, it reports first quarter results tomorrow. So we’ll have a better picture then. Last year during the height of stay-at-home, Nintendo generated roughly $3.27 billion in sales and $1.3 billion in operating profit, implying a much higher margin with Switch towards the middle of its life span so we’ll see where it lands this year.

Edit on August 5th: Nintendo’s Q1 revenue totaled $2.91 billion while operating income reached nearly $1.1 billion. Consistent with it being the more profitable of the two, at least right now.

Back to Sony and looking ahead, the company provided updated 2021 fiscal year forecasts for its overall and segment operations. Sales guidance remained unchanged for the company overall at $89 billion, though it did boost operating profit by 5% to upwards of $9 billion. Within gaming, it confirmed annual guidance of $26.5 billion in revenue and $3 billion in profit. The former would be a record and the latter I believe the second best in its history, revealing just how bullish the Sony team is on the modern PlayStation brand.

Leadership also reiterated that it still expects to ship 14.8 million PlayStation 5 consoles during the financial year ending March 2022, which would be the same as PlayStation 4. This implies lifetime PlayStation 5 consoles would be 22.6 million after its first six quarters, slightly outpacing the 22.4 million of PlayStation 4.

Broadly speaking on the topic of looking forward, there were slides and additional comments related to general strategy that stood out from management too, consistent with recent trends of company spending and approach.

“PlayStation Studios, which oversees our first-party software production on a global basis, is accelerating investment to strengthen its production capabilities” said the team. They cited the purchase of Housemarque in June then Nixxes in July, two notable acquisitions for the PlayStation portfolio in this quarter alone. This sort of investment activity this year is even more than I anticipated from Sony when I wrote about broader predictions back in January. I expect another announcement in the back half of this fiscal year, this time of Bluepoint Games based in Texas.

Backing this up, executives shared more about future potential. “Going forward, we intend to continue to proactively make strategic investments with the aim of developing new IP, supporting our multi-platform strategy, and strengthening our service offerings including through add-on content.”

What this all means to me is Sony remains supremely confident in the PlayStation business and how the PlayStation 5 will continue as the fastest-selling console in its history. I’m doubling down on my original estimate for this fiscal year of 15 million hardware shipments, which I established in last quarter’s piece.

On the financial side, I believe Sony will match or exceed its guidance. A record year is in sight for gaming revenue. It’s selling as many consoles as its suppliers can make, cost of general marketing will flatten and segments like network services will prop up if software doesn’t keep pace with last year’s explosive growth.

Major questions still swirl around supply of components and the global semiconductor environment, which has limited the number of new consoles these manufacturers can produce. Imagine if that weren’t the case! Record numbers could be even higher. Then, can new hardware sales translate into player engagement remaining near recent highs? There are audience members that either started playing or returned to games sticking around, the pie is growing. It just depends on how much.

If this quarter is any indication, Sony is certainly having its fair share of slices.

Thanks for reading everyone. Check back to my earnings calendar for more dates, and there will be even more coverage here and on social media in the coming days. Be safe!

Note: Comparisons are year-over-year unless otherwise mentioned. Exchange rate is based on the reported conversion: US $1 to ¥ 109.5.

Sources: Charles Sims (Photo Credit), Insomniac Games (Image Credit), Microsoft Corp, Nintendo Co Ltd, Sony Corp.

-Dom

Xbox & Ratchet & Clank Set Records in June 2021 U.S. Games Industry Sales Report

I know it feels like 2020 never ended. Yet somehow, the front half of 2021 is now in the books. It was another challenging one for a variety of reasons, yet one of the bright spots continues to be video game sales which I hope has provided some much-needed joy and respite for everyone.

And with that, we have.. numbers, of course!

Recently, industry tracking firm The NPD Group dropped both a monthly and second quarter 2021 report on the domestic games market. With it, sharing some notable records in the process and showing how spending on all categories this year is trending upwards.

In terms of growth, overall monthly consumer spending on games in the U.S. rose a steady 5% against a high comparable last year, set in the middle of stricter quarantine guidelines. Led by a Hardware category that more than doubled its level this same time in 2020. Within that, Microsoft’s Xbox Series X|S topped dollar sales. Even setting a new June record within the Xbox platform’s 20-year history. Separately, Nintendo Switch maintains a staggering streak when it comes to leading on unit sales, which it did again in June, as it has every month for 31 consecutive months! Both of these impressive feats occurred amidst a global chip shortage, signaling a boost in otherwise limited stock lately.

Content i.e. software, subscriptions and add-on sales moved up slightly, propped by usual suspects like Call of Duty and MLB The Show plus three new releases in the Top 5 on the general chart: Sony’s Ratchet & Clank: Rift Apart, Nintendo’s Mario Golf: Super Rush and Scarlet Nexus from Bandai Namco. Accessories was the only segment showing a decline in June 2021, though only 1% as PlayStation’s DualSense continues its consistency there.

Expanding to second quarter, total spend inched up 2% compared to the same three month period last year. However for the full first half of 2021, total sales climbed a solid 15% as all categories exhibited double-digit bumps. Spending on games isn’t slowing down compared to the height of the pandemic, proving new audience members are sticking around and core players are keeping up the hobby.

It’s time to delve deeper into each segment individually, including a close look at the software charts for both June and 2021 to date!

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

During June 2021, overall consumer spending in the domestic games market reached $4.93 billion, rising 5% compared to the same time last year. That’s now two consecutive months of year-on-year growth after a dip back in April.

While Content remained the leading segment by spending, it was Hardware making the biggest splash as production slowly yet surely ramps up. The last category of Accessories dipped slightly in June, cooling off a bit in the hot summer months domestically.

“Hardware was the obvious big story of June,” said The NPD Group’s Mat Piscatella. “Xbox Series was the star of the month, but all major platforms showed double or triple digit dollar sales growth vs year ago. Demand is nowhere near satiated, supply is still a massive challenge.”

Across the second quarter between April to June, total spend in the U.S. hit $14 billion. That’s up 2% since the same time in 2020. The NPD Group reported Q2 growth across a variety of sub-groups: personal computer (PC), cloud, non-console virtual reality, mobile, subscriptions plus, of course, gaming consoles.

“Consumer spending has not only maintained the elevated levels reached a year ago, but exceeded them in key areas such as hardware, mobile and subscription spending,” said Piscatella in the Q2 report at the firm’s website.

This trend is illustrated even more when looking at the entire first half of 2021. The total for consumer spend jumped 15% to $28.94 billion during the six month span ending June, driven by console growth in particular. Demand for new consoles still outstripped inventories, though manufacturers proved resilient with production even as it’s difficult to source certain parts in the supply chain.

When focusing on Content alone, sales in June reached $4.32 billion. Up a modest 1% year-on-year. Looking at second quarter, this major category saw $12.6 billion in sales, growing 2%. Notably driven by subscription spend, showing double-digit growth in Q2 (although the firm wasn’t specific in that figure). Across the time frame from January to June, Content bumped upwards of $25.36 billion, 13% higher than first half of 2020.

New releases wrote the narrative here for June. Sony published Ratchet & Clank: Rift Apart, the month’s top-selling software title. The latest mainline Ratchet & Clank action-adventure platformer achieved the best dollar sales ever in franchise history, a staple within the broad portfolio of developer Insomniac Games. The prior record holder for the series was April 2016’s Ratchet & Clank, a counterpart to a movie launched that same month.

Right behind chart mainstay Call of Duty: Black Ops Cold War, which ranked #2, was Nintendo’s latest sports offering in Mario Golf: Super Rush. Within the States, this title set a new Mario Golf record for first month dollar spend, outpacing that of GameCube’s Mario Golf: Toadstool Tour way back in 2003. Nintendo hasn’t yet shared global unit shipments for its latest Switch exclusive sports game, though I expect a similarly solid start when it does on August 5th.

June’s biggest surprise to me was Scarlet Nexus fighting to the five spot on the combined platform chart. An action Japanese Role-Playing Game (JRPG) from Bandai Namco is the latest in splendid starts for Japanese titles expanding overseas during simultaneous global launches, echoing examples like Square Enix’s NieR: Replicant at #5 in April 2021, Capcom’s Monster Hunter Rise in the second spot during March 2021 plus Dragon Ball Z: Kakarot also from Bandai Namco, the best-selling title in January 2020.

Through the first half of 2021, chart composition is familiar. Call of Duty: Black Ops Cold War was the best-seller with Resident Evil: Village and MLB The Show 21 right behind it at #2 and #3, respectively. One notable position is the 9th-ranked Outriders from Square Enix, a quietly consistent seller during the first half even if it lost some ground compared to May.

It’s time for the lists themselves, both monthly and first six months of the year.

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

  1. Ratchet & Clank: Rift Apart
  2. Call of Duty: Black Ops Cold War
  3. Mario Golf: Super Rush*
  4. MLB The Show 21^
  5. Scarlet Nexus
  6. Resident Evil: Village
  7. Mario Kart 8*
  8. Minecraft
  9. Marvel’s Spider-Man Miles Morales
  10. Mortal Kombat 11
  11. Animal Crossing: New Horizons*
  12. Call of Duty: Modern Warfare 2019
  13. Super Smash Bros. Ultimate*
  14. Assassin’s Creed Valhalla
  15. Super Mario 3D World + Bowser’s Fury*
  16. Mass Effect: Legendary Edition
  17. Tony Hawk’s Pro Skater 1+2
  18. The Legend of Zelda: Breath of the Wild*
  19. Pokémon Sword & Shield*
  20. Sea of Thieves

Top-Selling Games, 1st Half 2021, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. Call of Duty: Black Ops Cold War
  2. Resident Evil: Village
  3. MLB The Show 21^
  4. Super Mario 3D World + Bowser’s Fury*
  5. Marvel’s Spider-Man: Miles Morales
  6. Monster Hunter Rise
  7. Mario Kart 8*
  8. Assassin’s Creed Valhalla
  9. Outriders
  10. Minecraft

Moving onto gaming consoles during June 2021, the Hardware category saw gains across all three major platforms in PlayStation, Xbox and Nintendo, driving exceptional growth of 112% to $401 million. That’s the top June sales amount for Hardware since June 2009’s $617 million.

I mentioned before the great, record-breaking month for Xbox where Series X|S led by dollar sales. That’s the first time since its launch in November 2020. It recorded the best June month ever for an Xbox platform, beating out June 2011. No doubt driven by new content for console exclusive Sea of Thieves, continued pace from MLB The Show 21 plus the allure of Xbox Game Pass as the best value proposition in games.

Microsoft wasn’t the only manufacturer with an exciting month. Nintendo Switch led by unit sales in June 2021, as it has every month for years now during its wild run of success. PlayStation 5 continues its extremely quick start. Sony’s new generation (big ol’) box is still the fastest-selling home platform in tracked history, as measured by unit sales during the first 8 months on market. Note this statistic excludes handhelds, since Game Boy Advance is still the fastest-seller overall.

Stretching the time frame to second quarter, console spending moved up 12%. Then between January and June, this Hardware category earned $2.35 billion. That’s a fantastic 45% increase, even if compared to a time that was later in the console cycle last year.

It’s worth repeating that numbers during the early portion of a new platform generation are driven by supply rather than demand, more now than ever given the inventory environment. Essentially, Xbox produced enough Xbox Series X|S units to lead by dollar sales during June. Demand is for all platforms is stellar, even Nintendo Switch four years after its debut. This contrasts a chip shortage expected to block higher production output for a year or two, at least.

The only mildly disappointing category during both June and second quarter was Accessories, unable to keep pace with its counterparts. Understandable given the strength of spending this time last year. Although it did exhibit growth when looking at the aggregate during the first half of 2021, an encouraging sign.

Monthly spending on this category comprised of game pads, headsets etc declined 1% to $207 million in June and was 12% lower than last year when looking at the second quarter. Still, it saw 14% growth during the first six months of 2021, rising to $1.23 billion.

Sony is the consistent leader here. The PlayStation 5’s DualSense Controller Midnight Black edition topped this accessory group during June. Out of the four best sellers last month, three of those were DualSense game pads. Similarly, DualSense’s base White variant led the segment for the year so far.

It appears additional spending on these pieces of ancillary hardware is slowing in the early summer months, so will see where it goes leading into the back half.

The domestic games market saw many bright spots during June, especially for platform holders. Each of them had bragging rights in their own way, and all of them are doing well despite production challenges.

Individual software titles, subscriptions and mobile are keeping up consistency in spending, proving how the industry was not just able to grow its audience during the last year or so, but keep it around to maintain commercial momentum and interest in the medium.

Which makes sense to those tracking closely. Gaming is somehow both the most massive entertainment segment in the world and the quietest, a trend that last week’s reporting clearly shows especially when considering double-digit gains across each category since the year’s start.

I hope everyone stays well until next month when July marks the start of 2021’s second half, always an exciting time for those of us that love to follow. Feel free to drop a comment here or on social media. Be safe and thanks for reading!

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

Sources: Billy Freeman (Photo Credit), The NPD Group, PlayStation Press Center.

-Dom

MLB Shows Well in April During Slight Decline in U.S. Games Industry Sales

While not quite another month full of record highs, April 2021 still boasted numerous commercial highlights for the U.S. games industry in the scheme of things.

Yesterday, The NPD Group shared its monthly sales report for consumer spending on various parts of the games industry within the domestic market.

More than a year into the COVID-19 pandemic, we’re starting into the time period where the impact from stay-at-home restrictions caused some of the biggest months in tracked history. Which means tough comparisons when looking at this year versus the same time in 2020.

Overall, total consumer spending was down a bit in April 2021 driven mainly by lower hardware output, offset by new launches, mobile, subscription and downloadable content within the software category. Still, consumers have spent nearly $20 billion on Content, Hardware and Accessories during the year so far. Which is over 20% higher than the same time period in 2020.

While Nintendo Switch and PlayStation 5 continue impressive runs, it wasn’t enough to stave off a double-digit decline in Hardware and Accessories for the month. No doubt affected by global semiconductor shortages and manufacturing slowdowns. Both of these categories are still showing notable spend increases when aggregating 2021 to date.

New annual sports release MLB The Show 21 stepped into the spotlight during its release month, snatching the top spot on the overall and PlayStation software charts. The ever-present Call of Duty series plus a brand new Pokémon side entry in New Pokémon Snap rounded out the Top 3, while strong debuts from both NieR Replicant ver.1.22474487139 and Returnal led the Content category to an increase.

“Hardware shortage impact [is] being felt, will continue to be felt throughout 2021,” said NPD Group’s Mat Piscatella. “Accessories [are] now being impacted by supply chain/logistics as well.”

That said, there’s still plenty of growth to cover, so it’s time to dig into all the numbers.

United States Games Industry Sales (April 4th, 2021 – May 1st, 2021):

Consumer spending in general declined 2% to $4.6 billion in April 2021. This marked the first time monthly overall sales have dipped since back in February 2020 i.e. right before the start of country-wide quarantines plus the massive success of Animal Crossing: New Horizons.

It feels like forever ago, I know.

Now, this isn’t actually a bad sign. In fact, it’s a perfectly healthy month historically. It’s just slightly lower because last April set the record for setting records when it comes to domestic industry spending as I documented at the time. (Note that since that time, NPD Group has reclassified its categories and added to its coverage, so the public numbers themselves aren’t necessarily comparable.)

When expanding the timeline and looking at the first four months of 2021, total spending is up 21% since this time last year to $19.6 billion. Mainly because of momentum during the first couple months of this year driven by demand for next generation consoles and games to play on those systems, especially mobile, services plus add-on content for existing titles.

Speaking of software, the largest category of Content generated $4.2 billion in sales during April. This is up from $4.1 billion in April 2020. Year-to-date is even more impressive, hitting upwards of $17 billion when compared to $14.3 billion.

Expansion in Content is due to the release schedule picking up, ongoing appeal of subscription services plus legacy title support as the biggest older games still continue to chart.

Taking the lead on the overall software rankings in April 2021 was MLB The Show 21, which is dual published by Sony Interactive Entertainment on PlayStation devices then MLB Advanced Media on the Xbox family. This is a huge year for the annual franchise, marking the first time it’s been available on Microsoft’s consoles. Not only that, it launched directly into the Xbox Game Pass subscription service. Judging by its placement, the impact on sales seems to have been additive rather than cannibalizing.

A combination of PlayStation’s usual player base plus a new audience of Xbox fans led the baseball game developed by Sony’s San Diego Studio to set a series record for launch month dollar sales. Because of this, it’s immediately the 3rd best-selling title of 2021. And this isn’t even considering digital revenue from Xbox. Is this an appropriate time to say that the team knocked it out of the park?

Another impressive start was Nintendo’s New Pokémon Snap, landing at the third spot overall. Similar to above, this also doesn’t even consider digital sales since Nintendo notoriously doesn’t participate in that part of reporting. Predictably, it was the biggest title on Nintendo platforms during April. First month retail sales more than doubled that of July 1999’s Pokémon Snap debut, marking a picture-perfect return for the previously dormant spin-off from one of the world’s most successful brands.

Elsewhere on the software ranks, Outriders now has a full month on record and dropped one spot to fourth place. Square Enix’s third person action game was another with a simultaneous release on Xbox Game Pass, a rare occurrence for third party titles. The shlooter attracted 3.5 million unique players during its first month, a result that saw its publisher hinting at future content by saying it’s on track to being its next hit franchise. Unfortunately, it’s still unstable for many folks, resulting in continuous patches from development team People Can Fly.

In what I’d call more than a pleasant surprise, another Square Enix title landed at #5 this time in NieR Replicant ver.1.22474487139 (yes, I always have to Google the full title like most of us). The “version update” of the first NieR game that released a couple generations ago was handled by Toylogic. Replicant charted well above 2017’s NieR: Automata which started at ninth in its March 2017 debut month, popularity no doubt bolstered by Automata engaging more mind-share towards the cult classic franchise.

Two other notable titles within the Top 10 were PlayStation 5 exclusive Returnal, with only two days of tracking, then It Takes Two published by Electronic Arts as part of its EA Originals indie program. Returnal at the 8th spot is a strong debut for new IP from Housemarque Games, long-time Sony collaborator and arcade game specialist. It Takes Two continues its quietly consistent success, climbing a dozen spots to #9. The co-op adventure game from Josef Fares’ Hazelight Studios recently sold a million units globally in under a month.

Full charts incoming.

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

  1. MLB The Show 21^
  2. Call of Duty: Black Ops Cold War
  3. New Pokémon Snap*
  4. Outriders
  5. NieR Replicant ver.1.22474487139
  6. Mortal Kombat 11
  7. Monster Hunter Rise
  8. Returnal
  9. It Takes Two
  10. Mario Kart 8*
  11. Call of Duty: Modern Warfare
  12. Marvel’s Spider-Man Miles Morales
  13. Super Mario 3D World + Bowser’s Fury*
  14. Minecraft
  15. Animal Crossing: New Horizons*
  16. Super Mario 3D All-Stars*
  17. Super Smash Bros. Ultimate*
  18. Assassin’s Creed Valhalla
  19. Pokémon Sword & Shield*
  20. The Legend of Zelda: Breath of the Wild

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

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

Hardware and Accessories tell a marginally different story, declining from last year’s staggering highs.

For Hardware, overall console dollar sales came in at $296 million which is 30% lower than April 2020. Console manufacturers are facing supply-side constraints as inventories can’t keep up with rabid demand. This is going to continue even throughout the full year, as explained by executives from Nintendo, Sony and Microsoft alike during recent earnings presentations.

Even so, year-to-date figures aren’t as gloomy. These are up 42% compared to the same time frame during 2020, hitting $1.7 billion compared to $1.2 billion.

Nintendo Switch continues to be the bellwether, leading both units and dollar sales for the month of April. By my calculation, that’s 29 consecutive months of Switch leading the U.S. by unit sales. An incredible streak, I’d have to imagine it’s the best in domestic tracking history for a single console. It remains the top seller for 2021 so far, and that’s ahead of rumors swirling around a potential new model. (Which, in fairness, have been happening for a while. It’s only recently they have solidified into more tangible information.)

I wrote recently about how Nintendo reported its most profitable year ever, driven by global annual Switch unit sales of nearly 29 million for last fiscal alone ending in March. The introduction of a more powerful iteration, estimated around September or October based on the rumor mill, would continue its consistent pace into the holiday season and beyond even at a higher price point.

That’s not to say competitors aren’t doing big things either. Now in its six month on sale, Sony’s PlayStation 5 remains the fastest-selling console ever domestically. No doubt driven by the appetite of early adopters purchasing new and old games alike then many PlayStation 4 versions carrying over to the current generation, making for a smoother transition.

Not much in the way of information on Microsoft’s Xbox Series X|S performance on the hardware side. At present, it’s about production rather than customer appetite. It seems like Sony is outpacing Xbox in its supply chain, thus leading in the early goings.

In a theme that parallels Hardware, dollar sales for Accessories were down in April though are still exhibiting strength when taking the year as a whole.

The Accessories category dipped 23% in April, generating $168 million in domestic consumer spending. However, its total is $885 million for 2021 to date which is growth of 22%.

Sony’s PlayStation 5 accessories continue their category dominance. The DualSense White Controller led dollar sales for April and retained its spot as the year’s top seller. The Pulse 3D Wireless headset was the month’s runner-up. These often go as hardware goes, and PlayStation 5’s record pace is driving its accessories to be the most popular right now.

Note: The new DualSense colors with fancy names from the image aren’t out until June. Midnight Black (dope!) and Cosmic Red (not for me) are currently up for pre-order.

April 2021 saw various industry trends continuing. These include content growth supplemented by services, mobile and additional content, Nintendo’s evergreen titles constantly on the charts plus PlayStation 5’s record early momentum. Though it couldn’t contend with last year’s record April month itself when combining the various sales vectors. I won’t hold that against it, the year so far has been extremely impressive even with manufacturing limitations for hardware platforms.

“Given where we are with both supply and the pandemic-driven year ago comparable period, the market is holding remarkably well,” Piscatella added in additional commentary on the monthly report.

Looking ahead, next month’s report will be available in just a few short weeks covering May 2nd to May 29th. I expect a phenomenal start for Resident Evil Village, high demand for Mass Effect Legendary Edition plus ongoing strength for major third parties and Nintendo exclusives. Switch will probably lead again, though PlayStation 5’s record start should continue as well.

Until then, enjoy some fun games, stay healthy, and especially my American friends, please continue to be safe things as things open up here with vaccinations on the rise. See you again.

*Digital Sales Not Included

^Xbox Digital Sales Not Included

Sources: Electronic Arts, Enrique Vidal Flores (Image Credit), MLB Advance Media, NPD Group, PlayStation Blog, Square Enix.

-Dom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Title: Returnal

Release Date: April 30th, 2021

Developer: Housemarque

Publisher: Sony Interactive Entertainment

Platforms: PlayStation 5

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

Sources: Screenshots from PlayStation 5, Sony Interactive Entertainment.

-Dom

Sony & Microsoft Gaming Division Sales Launch To New Record Highs

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

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

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

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

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

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

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

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

(Yup. Sony has a lot of businesses.)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

-Dom

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

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

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

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

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

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

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

Now. The numbers, please.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*Digital Sales Not Included

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

-Dom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*Digital Sales Not Included

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

-Dom