Hit Points
Independent games industry analysis and commentary by Nathan Brown (ex-Edge).
Documents
The Final Lap of the Race to Zero
The rise of subscription-based gaming services, such as Xbox Game Pass and PlayStation Plus, has fundamentally altered consumer behavior, shifting the industry from a model of individual game ownership to one of access.
- The gaming industry has shifted from a 'wait for a sale' consumer mentality to a 'wait for it to be free' model, driven by the ubiquity of subscription services like Xbox Game Pass, PlayStation Plus, and others.
- Subscription services are increasingly perceived by consumers as essential hardware costs rather than discretionary game purchases, potentially devaluing individual game ownership.
- The proliferation of subscription services risks damaging player communities by discouraging full-price day-one purchases, which are vital for establishing healthy launch-day engagement.
And If You Are Paying for the Product... You're Still the Product
The integration of advertising into virtual reality platforms represents a significant shift in the monetization strategies of major technology companies.
- Facebook has begun testing in-app advertising within Oculus VR games, starting with Resolution Games' title Blaston, as part of a strategy to monetize the platform beyond hardware sales.
- While in-game advertising is a standard and accepted monetization model in mobile gaming—often providing players with tangible rewards like stamina refills or stat bonuses—it faces significant resistance in console and VR gaming due to a lack of player incentives and increased intrusiveness.
- The integration of ads into VR is particularly controversial because the immersive nature of the medium forces users to 'coexist' with advertising rather than simply viewing it.
Hit Points #11: Knackered
The modern video game industry faces a significant challenge regarding the sustainability of long-term development cycles and the professional toll they exact on veteran creators.
- Modern game development cycles have extended to multi-year projects, increasing the professional stakes and personal toll on developers who have a finite number of major titles left in their careers.
- Yuji Naka, the creator of Sonic, is considering retirement following the poor critical and commercial reception of Balan Wonderworld, which sold just over 2,000 copies at its Japanese launch.
- Square Enix provided Yuji Naka with less than three years to develop Balan Wonderworld and scheduled its release for March 26, 2021, just five days before the end of the company's fiscal year.
Channel Hopping
The primary thesis of this analysis is that while smaller developers and niche studios benefit from managing their own editorial content to bypass traditional media gatekeepers, major industry players should remain subject to independent journalistic scrutiny.
- Game companies should consider in-house editorial content when traditional media coverage is difficult to secure, particularly for indie developers or niche genres that lack mainstream press attention.
- Large-scale corporations like Sony risk damaging their reputation and fostering public distrust by relying exclusively on controlled, in-house interviews that avoid independent journalistic scrutiny.
- Controlled corporate messaging often results in 'faceless' branding that strips the human element from game development, making the output feel like a dull, mass-produced product.
Post Punk
The primary focus of this analysis is the financial and operational fallout surrounding the launch of Cyberpunk 2077, specifically examining the impact of its removal from the PlayStation Store on CD Projekt Red’s fiscal performance.
- CD Projekt Red reported a 65% drop in profits, a decline attributed to the fallout from the troubled launch of Cyberpunk 2077 and its subsequent delisting from the PlayStation Store.
- EA’s Ultimate Team modes generated $1.62 billion in revenue last year, accounting for approximately 29% of the company's total business.
- Sony has blocked cross-platform multiplayer for Borderlands 3 on PlayStation, reinforcing a corporate stance that cross-console play does not provide a clear benefit to the PlayStation business model.
Driven Past Distractions
The gaming industry is entering a critical period of transition as it prepares for the digital-first, pandemic-era version of E3.
- Microsoft faces a critical need to showcase high-quality first-party software at the upcoming E3, as it has exhausted its ability to rely on hardware launches, service expansions, and acquisitions to drive consumer interest.
- The industry is entering a period of renewed activity following a quiet year, with major developments including a rumored 4K-enabled, DLSS-supporting Switch Pro and a new action RPG from Team Ninja.
- Sony has confirmed that its expansion into PC gaming is successful, with reports indicating that Uncharted 4 is the next title slated for a Steam release.
Mobile Games
The primary purpose of this analysis is to evaluate the potential impact and viability of Valve’s rumored handheld gaming device, internally codenamed SteamPal.
- Valve is developing a handheld gaming device, codenamed SteamPal, which is expected to feature Linux-based software, gamepad controls, a touchscreen, and a dockable design.
- Valve has shifted its internal strategy toward hardware development by significantly increasing its hardware engineering team and adopting a model of designing hardware and software in concert, as seen with the Index headset and Half-Life: Alyx.
- The device faces market skepticism due to the historical failure of the portable PC category and concerns regarding Valve's inconsistent track record with previous hardware initiatives like Steam Machines and the Steam Link.
A Mighty Quest for Epic Loot
The Epic Games versus Apple litigation represents a pivotal moment in the gaming industry, serving as a catalyst for intense scrutiny of platform-holder power dynamics.
- The Epic vs. Apple trial has forced major platform holders like Sony, Microsoft, and Nintendo to publicly disclose sensitive business documents, potentially damaging Epic's long-term relationships with these partners.
- Evidence presented during the trial suggests Epic used aggressive tactics, including leveraging Unreal Engine 4 license expirations, to pressure Sony into enabling cross-platform play for Fortnite.
- Epic’s legal challenge appears to be less about dismantling centralized platforms and more about establishing its own dominant position, as the company remains heavily dependent on third-party storefronts for the vast majority of its Fortnite player base.
Indecent Exposure
Ubisoft’s recent engagement strategies regarding fan-generated content have drawn significant criticism for their exploitative nature.
- Ubisoft has faced criticism for sourcing fan-made content for Assassin’s Creed Valhalla through a contest that awards only $225 in merchandise to winners while requiring them to transfer all intellectual property rights to the company in perpetuity.
- This contest follows a 2019 partnership with HitRecord, where Ubisoft was criticized for paying a total of $2,000 to be split among collaborators for fan-contributed music in Watch Dogs Legion.
- Industry analysts suggest Ubisoft’s aggressive pursuit of user-generated content may be an early, experimental effort to build a foundation for future blockchain-based economies where player creations can be traded and monetized.
Deadspin, but with a Body Count
The May 2021 industry analysis examines the growing tension between corporate ownership and editorial independence within games media, specifically focusing on the fallout at IGN following the removal of a story regarding the humanitarian crisis in Gaza.
- IGN staff have publicly challenged parent company J2 Global after management deleted an article expressing solidarity with Palestinians, leading to an open letter from employees demanding accountability.
- WarnerMedia is splitting up its game business, which includes 11 studios such as Rocksteady, Netherrealm, and TT Games, as part of a deal between AT&T and Discovery.
- Devolver Digital is reportedly planning a £1 billion flotation before the end of 2021, signaling a major shift in the publisher's corporate structure.