Hit Points
Independent games industry analysis and commentary by Nathan Brown (ex-Edge).
Documents
Overload
CD Projekt’s aggressive October 2022 announcement strategy serves as a high-stakes attempt to rehabilitate its corporate reputation and bolster investor confidence following the troubled launch of Cyberpunk 2077.
- CD Projekt announced an aggressive expansion strategy including a Cyberpunk 2077 sequel (Project Orion), five new Witcher games to be released within six years, and the development of an original, non-Witcher/Cyberpunk IP.
- CD Projekt is establishing a new satellite studio, CD Projekt Red North America, with offices in Boston and Vancouver to support its future development pipeline.
- Co-CEO Marc Iwinski is stepping down after nearly 30 years at CD Projekt and has applied for a seat on the company's supervisory board.
Down Stream
The closure of Google Stadia serves as the primary focal point for this industry analysis, which examines the platform's failure as a consequence of poor strategic execution rather than technological inadequacy.
- Google is shutting down its Stadia cloud-gaming service in January 2023, citing a failure to gain traction despite the technical viability of the platform.
- Stadia’s failure is attributed to a flawed business model that attempted to charge full retail prices for games without offering ownership, combined with a lack of exclusive content and a late-stage hiring strategy that underestimated the complexity of game development.
- The newsletter Hit Points has grown to 3,699 total readers and 228 paid subscribers, with annual revenue currently plateauing at approximately $15,000.
Unknown Territory
Brendan Greene, the creator of the battle royale genre, is currently leading PlayerUnknown Productions in Amsterdam on an ambitious, long-term project to develop a massive, open-world digital space.
- Brendan Greene's studio, PlayerUnknown Productions, is developing a proprietary engine named 'Melba' to support 'Artemis,' an ambitious, Earth-sized virtual world intended to host hundreds of thousands of players.
- The studio is currently developing 'Prologue,' a 64-square-kilometer tech demo that serves as a foundational step for the larger Artemis project by testing procedural generation and machine-learning systems.
- The development team abandoned the Unity engine to focus on building their own technology, concluding that traditional human-led asset creation cannot scale to the size of a planet-sized virtual world.
Build Back Bigger
The rapid expansion of Embracer Group through aggressive acquisitions raises fundamental questions regarding the company's long-term strategy and its impact on product quality.
- Embracer Group has grown into a massive holding company with over 10,000 employees, 120 studios, and 200 games in active development.
- The disappointing launch of 'Saints Row'—which holds a 62 Metacritic score—serves as a high-profile test case for whether Embracer’s scale can effectively support high-quality game development.
- Embracer CEO Lars Wingefors publicly admitted disappointment with the reception of 'Saints Row,' highlighting the difficulty of balancing rapid acquisition-led growth with product quality.
Grand Theft: The GTA VI Leak Fallout
The September 2022 leak of over 90 in-progress videos from Grand Theft Auto VI serves as a case study on the negative impacts of unauthorized data breaches within the video game industry.
- The unauthorized leak of over 90 in-progress videos of Grand Theft Auto VI has caused significant internal disruption at Rockstar Games, likely leading to tightened security protocols and a more guarded approach to future marketing and press access.
- Industry observers anticipate that the leak will force Rockstar to delay official reveals, as the company historically prioritizes highly polished, controlled demonstrations over unfinished development footage.
- The incident has prompted broader industry concerns regarding security policies and remote work, with potential pressure on major studios to reconsider full-time office requirements.
Downcast
The game industry’s shift toward direct-to-consumer digital broadcasts has resulted in a decline in production quality and creative engagement.
- Major game industry showcases, including Nintendo Direct and Sony's State of Play, are increasingly criticized for poor pacing, lack of curation, and a reliance on repetitive sizzle reels rather than meaningful content.
- Ubisoft has signaled a shift toward a $70 price point for future next-gen titles, while simultaneously facing criticism for a lack of new IP and a heavy reliance on sequels and spin-offs, such as the announcement of five concurrent Assassin's Creed projects.
- PlatinumGames' live-service title Babylon's Fall is being discontinued and removed from sale in February 2023, less than one year after its initial launch.
Pistols at Dawn
The public dispute between Microsoft and Sony regarding the proposed acquisition of Activision Blizzard highlights significant regulatory and competitive concerns surrounding the future of the Call of Duty franchise.
- The acquisition of Activision Blizzard by Microsoft faces significant regulatory scrutiny, with the UK’s Competition and Markets Authority (CMA) initiating a 'Phase 2' investigation due to potential anti-competitive concerns.
- Sony’s Jim Ryan publicly rejected Microsoft's offer to keep Call of Duty on PlayStation for three years beyond the existing contract, labeling the proposal inadequate.
- Microsoft claims it offered a signed agreement to guarantee content and feature parity for Call of Duty on PlayStation for 'several more years,' though the specific duration remains a point of contention.
Fast Follow
The mobile gaming industry frequently prioritizes rapid replication of successful game mechanics over original innovation, a trend exemplified by the success of the title Survivor.io.
- Habby’s mobile game Survivor.io achieved significant commercial success, generating approximately $1.5 million per day through in-app purchases and ad revenue.
- Survivor.io reached the number one spot for weekly downloads on the US App Store and Google Play, demonstrating the effectiveness of Habby's user acquisition strategies.
- The game is a direct adaptation of the core mechanics found in Vampire Survivors, a breakout indie title developed by Luca Galante, which itself was inspired by the earlier Android game Magic Survival.
Universal Overhead
The August 2022 announcement of a global price increase for the PlayStation 5 console serves as the focal point for this analysis, which critiques Sony’s decision to pass inflationary costs onto consumers.
- Sony announced a price increase for the PlayStation 5 in all major territories except the US, citing global inflation, currency fluctuations, and supply chain issues.
- The price hike adds £30 to the cost of consoles in the UK and €50 across Europe.
- Despite the gaming division's 26% profit decline to under $400 million in the previous quarter, Sony reported $2.3 billion in total profit for the same period.
Rumour and Speculation
The video game industry is currently experiencing a surge in unauthorized leaks and speculative reporting, a trend that threatens to diminish the impact of official marketing and disrupt the traditional hype cycles of major titles.
- The video game industry is experiencing a surge in anonymous leaks, which undermines the impact of official announcements and diminishes the excitement of major industry events like E3.
- Constant, premature leaking of game titles and development status creates a 'rumour-mongering' culture that often lacks context and can lead to public misjudgments of projects, such as the initial negative reception of Multiversus.
- Game companies maintain strict secrecy not only for control, but to manage expectations and account for the high frequency of project cancellations and shifts in market conditions.
Dear John
The gaming industry is currently witnessing significant instability at Unity Technologies, characterized by a sharp decline in stock value and controversial leadership decisions under CEO John Riccitiello.
- Unity's stock price has declined by over 76% year-to-date as of July 2022, with a nearly 25% drop occurring in the week following the announcement of its merger with IronSource.
- Unity CEO John Riccitiello is facing significant backlash from developers for the merger with IronSource, a company previously blacklisted by Microsoft for distributing malware.
- In a Pocket Gamer interview, John Riccitiello publicly disparaged developers who prioritize craft over profitability, labeling them as "some of the biggest fucking idiots."
136: It's Happening, Isn't It?
The announcement that ReedPop, the events firm behind PAX and Comic-Con, will produce E3 2023 marks a significant turning point for the gaming industry’s flagship trade show.
- ReedPop, the firm behind PAX and Comic-Con, has been selected to produce E3 2023, marking a significant shift in the management of the industry's flagship event.
- The US video game market is projected to decline by 8.7% in 2022, with total spending expected to reach $55.5 billion due to economic pressures, hardware supply issues, and a quieter release calendar.
- Major publishers are increasingly bypassing centralized industry events in favor of independent, direct-to-consumer digital showcases that offer higher engagement and lower costs.