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Financial Results for the First Half of the Fiscal Year Ending March 2024
Koei Tecmo achieved record-high sales of ¥39.7 billion during the first half of the fiscal year ending March 2024, representing a 14.3% year-on-year increase.
- Koei Tecmo achieved record-high first-half sales of ¥39.7 billion, a 14.3% year-on-year increase driven by Fate/Samurai Remnant and the mobile title Atelier Resleriana.
- Operating profit fell 24.4% to ¥13.8 billion due to rising labor and subcontracting costs, though ordinary profit grew 31.3% to ¥23.2 billion.
- The company is targeting full-year net sales of ¥95 billion, supported by projected growth of 37.9% in the Japanese market and 22.6% in overseas unit sales.
Plus: ARK Survival Ascended's Stealth Drop Surprise
This analysis examines the performance of recent video game releases on Steam and other major platforms during late October 2023.
- Cities: Skylines II debuted with 105,000 concurrent users (CCU) but received 'Mixed' reviews due to severe optimization and frame-rate issues.
- ARK: Survival Ascended launched with 62,000 CCU, but faced a 42% positive review rating driven by technical performance complaints and a controversial exclusive server hosting deal with Nitrado.
- The co-op shooter Ripout underperformed significantly, failing to convert high wishlist numbers into active players with a peak of only 222 CCU.
AppLovin May Try to Buy Unity Again: Engine Maker’s Shares Fell 40% Since Last Year’s Offer
Market analysts are speculating that AppLovin may revisit a potential acquisition of Unity, driven by significant shifts in the engine maker’s market valuation and leadership.
- Market analysts speculate that AppLovin may renew acquisition efforts for Unity, which is now valued at approximately $11.43 billion, down significantly from the $17.5 billion offer rejected in August 2022.
- Unity’s share price has fallen roughly 40% since the initial 2022 acquisition attempt, driven by developer backlash over new runtime fees and the resignation of CEO John Riccitiello.
- AppLovin has seen its own stock price surge nearly 270% year-to-date, providing it with a stronger financial position to potentially pursue a merger compared to its previous attempt.
Exploring APAC: How to Market in a Flourishing Region - Yolanda Huang, Nativex
The Asia-Pacific (APAC) region represents 46 percent of global gaming revenue, yet it remains a complex landscape requiring highly localized marketing strategies.
- The APAC region accounts for 46 percent of global gaming revenue, necessitating highly localized strategies rather than standardized global approaches.
- Market entry in Japan is most effective when leveraging the country's anime and manga culture through offline-to-online marketing, such as physical events featuring influencers and cosplayers.
- Success in China requires utilizing the Ocean Engine ecosystem and implementing high-frequency creative testing, where thousands of assets are iterated to optimize performance.
Unity Software (U): Huge Problems, Negative Outlook, Big Changes Required
Unity Software currently faces a critical inflection point as it struggles to transition from a growth-at-all-costs strategy to a sustainable, profitable business model.
- Unity’s revenue model is now heavily dependent on its Grow segment, which accounts for two-thirds of total revenue following the acquisition of ironSource.
- Stock-based compensation has reached 38 percent of total revenue, resulting in significant shareholder dilution.
- The company’s core Create engine business has failed to generate meaningful profits, leaving the firm reliant on aggressive monetization tactics to meet short-term EBITDA expectations.
Why I'm Sticking With Unity (Unity vs. Unreal)
The decision to continue using Unity for game development, despite significant industry controversy regarding corporate leadership and pricing, rests on a strategic evaluation of platform versatility, existing infrastructure, and technical requirements.
- Unity remains the preferred engine for projects prioritizing cross-platform accessibility, specifically for mobile, Nintendo Switch, and low-end hardware, whereas Unreal Engine is better suited for high-end 3D graphical fidelity.
- Unity’s ecosystem offers superior third-party asset availability, extensive documentation, and a larger developer community, which significantly streamlines troubleshooting and cross-platform porting.
- The decision to remain with Unity is heavily influenced by sunk costs, as existing investments in proprietary codebases and established game kits make migrating to a new engine inefficient.
AAA’s Future / Epic Layoffs / Winners, Losers & Hidden Gems
The global gaming industry is currently navigating a period of profound structural instability characterized by ballooning production costs, shifting developer loyalties, and significant corporate restructuring.
- AAA development budgets have ballooned from approximately $2 million to over $200 million, forcing publishers to prioritize established intellectual property and aggressive monetization to offset financial risk.
- Corporate growth strategies are collapsing, evidenced by significant layoffs and divestitures at Epic Games and the failure of acquisition-led expansion at Embracer Group.
- Unity’s attempt to implement a controversial per-install fee has damaged developer trust, triggering a migration toward alternative engines like Godot and Unreal Engine.
Epic Games Has Massive Layoffs
Epic Games recently announced a significant workforce reduction, laying off approximately 830 employees, which represents 16% of its total staff.
- Epic Games has laid off approximately 830 employees, representing 16% of its total workforce, to address a long-standing financial imbalance where expenditures consistently exceeded earnings.
- CEO Tim Sweeney stated that the transition toward a creator-led ecosystem for Fortnite has resulted in lower profit margins, necessitating structural economic changes.
- Approximately two-thirds of the job cuts were concentrated in non-core departments, such as administrative functions and influencer relations, rather than core development teams.
New Unity Pricing Has Leaked
Unity’s recent attempt to overhaul its pricing structure has triggered significant industry backlash, forcing the company to backtrack on controversial elements of its proposed runtime fee policy.
- Unity is revising its runtime fee policy to include a fee cap of 4% of revenue for customers earning over $1 million annually.
- The company has confirmed that installation counts will not be applied retroactively to existing game titles.
- Unity is shifting toward a self-reporting model for revenue thresholds to address developer concerns regarding transparency and tracking.
After Using Unity For 10 Years, I Have Some Thoughts
The primary purpose of this analysis is to evaluate the impact of Unity’s controversial 2023 pricing policy changes on the game development community.
- Unity’s 2023 pricing policy changes caused a critical erosion of developer trust, primarily due to the introduction of opaque, install-tracking technology perceived as invasive.
- A survey of nearly 7,000 developers revealed a significant shift in engine preference, with 42% favoring Unreal Engine for future projects compared to only 22% for Unity.
- The shift to install-based fees poses an existential financial risk to mobile developers and those using subscription models like Game Pass, where fees could disproportionately consume revenue.
How 'Fortnite' Designers Made Their Own Tools
The development of Fortnite necessitated a fundamental shift in workflow strategy when traditional, spreadsheet-based quest editing systems proved too error-prone and inefficient for the game’s rapid production cycle.
- To resolve a production bottleneck where quest creation took days and was prone to errors, Fortnite's quest team empowered designers to build their own tools using Unreal Engine's Blueprint-driven Editor Utility Widgets.
- By shifting tool development to designers, the team reduced the complexity of the quest editor from six pages of tightly packed properties to a more user-friendly two-page interface.
- The new designer-centric workflow allowed for the creation of quest templates, which enabled fine-grained control and automated the addition of specific event rewards across multiple quest types.
Unity Introduces Per-Install Engine Fees
Unity Technologies, the developer of the widely used Unity3D game engine, announced a significant shift in its monetization strategy on September 12, 2023.
- On September 12, 2023, Unity announced the introduction of a new 'Runtime Fee' for developers using its game engine.
- The new pricing model mandates that developers pay a fee based on the number of times a qualifying game is installed by users.