Category Archives: Business
EA announced today the launch of their EA Sports subscription program called EA Sports Season Ticket. For USD$25 or 2000 Microsoft points you get early access to 5 EA Sports games 3 days before release as a digital download, which will expire on retail release but all achievements and progress will carry over if you decide to buy a retail copy. The 5 sport games franchises involved are Madden, Fifa, NCAA, Tiger Woods PGA Tour and NHL. The other features of the program are 20% off DLC, free premium web content and membership recognition.
EA have teamed up with game retailer GameStop to market the program and keep intact the dicey relationship between publishers and retailers as digital downloads become more common. Having the early access full digital download expire on retail release is a concession to retailers but sooner or later we’ll see digital downloads day and date for new releases on consoles.
The question now for consumers like me is whether or not I would pay 25 USD for 3 days of early access. For me I only regularly play and buy FIFA and $25 is a steep price to pay for early access and the other features. But I do occasionally rent or pick up way later the Tiger Woods and NHL games and enjoy playing those games. I can see playing the full game of both of theses for 3 days and picking them up way later when they are discounted. So right now I’m unsure of whether I would subscribe to this program but it will mostly hinge on how badly I want to play the next FIFA early.
As for the ramifications of this I can see this being implemented with other multiplayer heavy games with regular releases such as the Battlefield or Call of Duty series. I think this a good idea that caters to the diehard competitive fans and has little effect on everyone else. As long as the multiplayer matching system correctly filters out the experienced players from the inexperienced it shouldn’t have too much of an effect on the multiplayer environment for regular players. I can already see the comments that are going to pop up as people decry this as another EA cash grab but what these people don’t understand is that fans will gladly pay the extra money to play the game early and be more involved in the game ecosystem.
One of the number one complaints from gamers that I read and hear about is cost. Gamers or at least critics and commenters get riled up and even in some cases indignant about the cost of games and devices. While this sort of entitlement is not just restricted to just video games, it seems that gamers are less rational in this aspect. For me I rarely have an issue about the cost of devices or games because in my mind, if I’m buying something new or cutting edge I am paying a premium to play it as soon as it comes out. I know what my budget is and if I can’t afford it right now I know it will be discounted at least 6 months down the line, or for consoles around the two year mark.
Recently with the announcement of two new consoles (PS Vita and Wii U) it was clearly evident that this issue was still at the top of gamers mind’s. Knowing the sensitivity gamers have to price I shouldn’t have been surprised when some people criticised the announced price of the PSP Vita at $250 or $300 for 3G version. For a high quality handheld entertainment device, to me and to most people it looked to be a very reasonable price but a small subset of people still complained that it was overpriced.
Item number 2, people that are angry that publishers and developers have implemented an “online pass” feature making people who buy used copies of games to pay around $10 to access online multiplayer modes or some additional content. This is another bewildering reaction to something that I feel is completely reasonable. Companies such as EA and THQ have been getting flak for trying to get some revenue from used game sales. As we continue to move to digital distribution where there is no concept of used games, I find it hard to get angry that if I buy a used game I may have to pay an additional fee to play online. If anyone should get angry it should be companies like Gamestop not regular gamers.
Item number 3, people criticising Nintendo for not announcing the price of the Nintendo Wii U and complaining about the potential cost of extra controller (which is a non-issue since the standard is games requiring just the one tablet controller included with the system). E3 for Nintendo was the first time they have shown the system which is at least a year away, they don’t need to reveal the price and why should they if they are still tweaking the system.
Last point DLC, people complaining about paid DLC and the fact that developers plan and develop it while the game is in development. Gamers feel entitled that it should be included in the price of the game or the game itself should be priced cheaper in the first place. The price of a game has been static at $60USD for a long time now and I would say we even have it better today with pre-order bonuses from places like Amazon that give you USD$20 gift certificates for pre-ordering a new game. Developers need additional streams of income if they are to survive with the growing costs of development. DLC is a way for gamers to get more out of a game they like, it’s optional and entirely up to you. If you don’t think the core game justifies the price than don’t buy it, don’t complain about the DLC. Same goes for additional services like COD Elite that Activision is implementing to give players additional features that only the truly dedicated players would consider or benefit from.
Video game companies are out to make great products and make the most money they can while balancing the fine line between price and purchase rate. It is not in a company’s best interest to give products away at cheaper prices even though the model of the video game industry is to make the console the loss leader while making money from software licenses and royalties. Nintendo really changed the game by releasing a cheaper system with the Wii and still make money on each console. For the next generation of video game consoles my prediction is that they won’t be as state of the art in order to keep costs low and try to break even as soon as possible. I think this makes sense because the next step in gaming isn’t processing power and graphics, it’s how we interacting and control games.
Atari the perpetually troubled video game publisher disclosed in their 2011 fiscal year financial results that they are looking to sell off Cryptic Studios, two and half years after the original acquisition. The reasoning as Atari explains, other than it’s large contribution to Atari’s net profit loss, is to focus on external development to give them more flexibility in the “changing marketplace“. Atari also point to the industry buzzwords “casual online and mobile games” as another reason for deciding to divest Cryptic.
Cryptic Studios contributed €15.9m to Atari’s revenue and -€5.3m to their net loss for the 2011 fiscal year. Overall this accounting move has improved Atari’s operating income to positive €0.5m for the year with a net loss at -€6.2m. The expected sale price of Cryptic Studios would be hard to judge but I would be surprised if it was near to Atari’s original purchase price of 26.7m upfront + 20m in performance related bonuses.
Cryptic Studios was bought by Atari on December 8th 2008 and finished developing Champions Online and Star Trek Online for Atari. They got their start by developing City of Heroes and City of Villians both published by NCSoft who bought out the rights for both series in 2007 along with the whole dev team for the games. Currently still in development is Dungeons and Dragons Neverwinter, a co-op multiplayer game (departure from MMOG) based on D&D 4th edition and the Neverwinter franchise.
With the release of Disney’s third quarter 2011 fiscal year results last week we have further insight into Disney Interactive’s failure in the console video games space as they now transition to focus on mobile and casual games. In contrast we have Warner Bros. who like Disney (both starting the strategy around the same time in 2005) have made acquisitions of independent video games developers to build up their presence in the industry but have been doing much better job at it. The difference is with their approach to developing games and how they work with their acquired studios as well as the quality of the studios they are acquiring and building up.
Warner Bros. Interactive Entertainment with the acquisitions of studios such as Monolith Productions, NetherRealmStudios (formerly Midway Chicago), Traveller’s Tales, and a majority stake in Rocksteady Studios have got it almost perfect in identifying the right studios to boost their video game strategy. With subsidiaries like DC Comics Warner Bros. have the properties and the talent to develop high quality games as well as coming up with original properties. Or like with NetherRealm Studios and the Mortal Kombat series they have successfully rejuvenated popular game properties for critical and commercial success.
Disney on the other hand have laid off a large percentage of staff at their Black Rock Studios and shut down Propaganda Games along with it’s projects. Recent acquisitions of Playdom and Tapulous are aiming to capture the casual and mobile markets but they still have Junction Point Studios who made the game Epic Mickey to mixed reviews. Junction Point is headed by industry veteran Warren Spector and they are still hiring and working on unannounced projects but they look to also be developing more social and mobile games.
Disney’s gaming division incurred a 115m operating income loss last quarter with investors questioning their approach to the video game market. With their focus on the Facebook and iOS gaming markets they are looking for the quick buck which may or may not be sustainable in the long run but at least they are acquiring the right sort of talent for the strategy.
As for Warner Bros. the future looks strong with Mortal Kombat selling well, Rocksteady Studios building a lot of buzz with their next Batman Game, Batman: Arkham City, and whatever MMO project Turbine is doing next. Also Monolith Studios just announced today that they are developing a downloadable XBLA/PSN/PC game in the Batman universe that will be a competitive multiplayer shooter, the next project by the creators of the F.E.A.R. games.
Warner Bros. Interactive Entertainment is a subsidiary of Time Warner (TWX).
Disney Interactive is a subsidiary of The Walt Disney Company (DIS).
Bandai recently released their financial results for the full 2010/11 fiscal year and it is interesting to see how well some of their games have sold. They are known for releasing games based on popular Japanese animated properties such as Naruto, Dragon Ball Z and Gundam but they have had some surprising high quality critical successes with Enslaved and Majin. Below are their top 9 selling games during the last year (400k cut off point).
- Tekken 6: 1.15m
- Naruto Ultimate Ninja Storm 2: 1.1m
- Ben10: Ulimate Alien: 0.83m
- Enslaved: Odyssey to the West: 0.73m
- Dragon Ball: Raging Blast 2: 0.58m
- God Eater Burst: 0.47m
- Despicable Me: 0.47m
- Gundam Musuou 3: 0.46m
- AKB1/48: 0.4m
Amazon have a variety of web services in addition to their online retail operations. One of them that I have recently been playing around with is the Mechanical Turk. People or businesses can put up simple tasks for others to do for a small fee. My perspective is from the Worker perspective.
Each task is called a HIT (Human Intelligent Task), I’ve done around 100 of them and earned $7. The tasks range from transcribing audio/video, categorising pictures & websites, completing surveys, testing web services etc. The time/reward ratio is pretty low but there are sometimes HIT’s that have reasonable payments. Your payment is dependent on the HIT requester approving or rejecting you completed HIT which sometimes can be frustrating if you don’t read the requirements properly or they base their decision on majority results. You are usually paid within a couple of days but sometimes it may take weeks depending on the requester (I have a couple that I haven’t received payment for over 3 weeks now).
Overall Amazon’s Mechanical Turk is an interesting service that is great if you have a repetitive task that needs to be done but as a Worker it’s not worth the time.
So it has come to the point that I have actually noticed that some of the blogs I read have sponsored posts. It took AVG Anti-Virus to sponsor both Mashable.com and Silicon Alley Insider at the same time for me to notice. It is definitely a direction for blogs to take for additional advertisement revenue and will be more common as standard display or graphics ads lose their effect. However the success for a site depends on how it is done. There are a few ways it have been done, some work while others don’t. All function by being inserted as a normal post/article would be.
4 Types of Sponsored Posts
1 – Straight ad-copy from the advertiser which is clearly marked as a sponsored post.
2 – In the same editorial style as the site but with clear points that have been specified by the advertiser.
3 – An offer or prize giveaway from an advertiser, marked clearly as sponsored.
4 – Paid editorial, an article about reviewing or evaluating an advertiser and their products.
Examples of Websites with Sponsored posts
Mashable – AVG Anti-Virus, Microsoft, HP, American Express
SAI – AVG Anti-Virus, American Express, HP, Ad-Juster, Mercedes Benz, The Regus Group, British Airways, Book Sponsorship Socialnomics,
Lifehacker – LogmeIn, AVG Anti-Virus. Adobe, Fellowes, Audible, Comcast, Toyota
Slash films – Focus Films
The common theme with sponsored posts is that the website is clear in indicating that they supposedly only approve sponsored posts that are “valuable and interesting to the reader“. This is just an empty excuse as it is often the case that there are better alternative products from competitors. Blogs shouldn’t fall back on this excuse. Some blogs are more clear than others saying they really only reject if the product is a scam.
Another topic raised often is journalistic integrity. I find it hard to understand why there are readers who reject the use sponsored posts based on this reason. These sites do very little actual journalism, they are often summarising articles, providing guides, tips, providing news and rumours. If clearly marked there should be no problem with sponsored posts. However I do see that there could be a problem with the 4th example of sponsored posts. One case of this is with SlashFilm.com who tried this by having a sponsored editorial analysis article by on of their bloggers/writers. It didn’t go over well with their readers and they have subsequently stopped having sponsored posts. The problem was implementation and the key is transparency, the reader does not want to be tricked or deceived and needs to clearly know that what he/she is reading is sponsored.
Tech sites seem to be doing well with sponsored posts but I rarely see them in entertainment, gaming or general news sites. My opinion is that I am all for sponsored posts as I am not bothered with seeing and reading an ad every so often. If this is what they need to do to have the resources to grow the site than I am all for it.
Sony is suffering. They are innovators in the technology industry but have become eclipsed by companies such as Nintendo and Apple. The problem is typical of any large company. When people think of Sony now they see a large corporate entity. This is the same thing happening at Microsoft but in their case they have made conscious efforts to move forward (Windows 7, online efforts). Sony’s image is damaged they are no longer a market leader and have to stop acting like they are. The economic downturn is the perfect time to restructure and consolidate and come out with sensible products that hold the Sony mark of design and quality.