Entries Tagged 'News analysis and background' ↓

Seems like I got it wrong yesterday. The players are the same: Harmonix, MTV and the Beatles. The story is somewhat different. Rather than just featuring as another band in the game Rock Band,  there will be what Harmonix CEO Alex Rigopulos describes as “a new, full-blown custom game title production built from the ground up”.

So this is massively massive. The biggest music band in all of history are coming to video gaming. These immense icons of popular culture are deigning to allow their IP to be reprocessed for our newer and vastly superior media.

So what is in it for the two Beatles that are still with us and the widows of the two that aren’t? Well firstly the Beatles work is quite old now. Forty yearsish. So this will revitalise it and bring it to a whole new audience. Keeping the momentum of the IP going with the current, and potentially future, generations. Thus helping to further cement the position of the Beatles in history. It will increase sales of their music. And make them money.

And what is in it for the gaming industry? A lot of publicity. A chance to get taken more seriously by an older generation. A further proof of the extension of gaming towards becoming an all pervading entertainment and educational media. An opportunity to make money.

The downside is that a lot of effort will be put into an old IP from a different media, just like games made of James Bond films. When the potential and capabilities of gaming are such that we should be forging our own IPs.

Sir Paul McCartney said: “The project is a fun idea which broadens the appeal of The Beatles and their music, I like people having the opportunity to get to know the music from the inside out.” Ringo Starr said: “The Beatles continue to evolve with the passing of time and how wonderful that the Beatles’ legacy will find its natural progression into the 21st century through the computerised world we live in. Let the games commence.” Yoko Ono said: “It’s cool, I love it and hope it will keep inspiring and encouraging the young generation for many decades.”

There is obviously a huge weight of responsibility on the shoulders of Harmonix. They are tampering with a big chunk of our heritage. And the outcome could have huge repercussions for gaming.

• Sony go “open platform” with their PS2 in that there is now no need to get content approval. They are also going for a global approvals system and allowing developers to deal directly with them. All good stuff that should have been done years ago and which they have presumably been forced into by their dire showing in the current console war.
• Hellgate:London fails (though new owners might try again) whilst Codemasters pull the plug on RF Online. Two example how even after you get up and running with an MMO it can still go pear shaped. And the numbers involved are much bigger than with non MMOs. This is a risky space to work in, but the upside can be massive.
• Teenage video game pirates graduate to hi tech crime such as phishing and credit card fraud. No surprise here then. Didn’t the militant feminists once have a theory that if you locked every male up until he was 25 it would get rid of most crime? However I have nothing but admiration for the teen who took down Scientology.org, that was a job well done.
• The UK’s first official national video game archive has been set up and needs your help to preserve the history of gaming. A very worthwhile concept and one that many reading this will be able to help with.
• ELSPA play round with how to display age ratings in an attempt to have the awfulness that is BBFC imposed upon them. I really do hope that ELSPA win this one. The game industry does not want or need BBFC.
• UK anti piracy legal action catching innocents. This is not good any way you look at it. The publishers need to assert their ownership of their IP and to reduce the impact of stealing, especially now the Xbox 360 piracy genie is out and running amok. However it is terrible to persecute innocent people. Let’s hope they get this quickly sorted so they are only zapping the thieves.
• Sony game division revenue up 10% year on year. But it still lost $405 million in Q3. When Microsoft and Nintendo are making profits and expanding their revenue even faster. This is a dire situation that Sony have got themselves into after having dominated the previous two home console generations and with gaming booming like never before. Historically many dominant platform owners have fallen from grace: Atari, Sinclair, Commodore, Amstrad and Sega spring immediately to mind so it is obviously not easy staying at the top.
• The Beatles have licensed some of their tracks to the Rock Band game. This is massive for MTV and it is a massive indicator of where gaming now stands culturally. Even two years ago nobody would have believed this news, just remember how long the Beatles spurned Apple and ITunes. These guys don’t need the money, they are more concerned with protecting their heritage. So this is a proud day for gaming.

I don’t usually put much effort into reporting company results, but these Ubisoft ones help to illustrate a few points. They show how global publishers are these days, the degree to which the industry is booming and how good management makes a game publisher hum.

Firstly globalisation: “Ubisoft is present in 28 and has sales in 55 countries around the globe.” It has taken a lot of work to build that up and to keep it well managed. However it is part of what makes Ubisoft so successful. It gives them huge competitive advantages of scale. And it is something that is very difficult to compete with from scratch. Which gives the existing, entrenched, global publishers immense value.

Next, turnover: “Sales for the first half of 2008-09 came to €344 million, up 31.5%, or 38.3% at constant exchange rates, compared with the €261 million recorded for the same period of 2007-08.” Wow, the industry is booming. And Ubisoft are making hay whilst the sun shines. What other industry can show growth like this in mature, established companies? Especially at a time when the wheels are falling off all over the economy.

Yves Guillemot, CEO, is cautious and yet confident in his statement: “Going forward, we are confident that the video game industry will be able to continue its dynamic growth in 2008 and 2009, buoyed by the increase in the installed base for consoles coupled with the steady influx of new consumers.” Not many CEOs in the world are fortunate enough to be in this sort of position. He continues: “We believe that thanks to the diversity and quality of Ubisoft’s games line-up – which caters to both hardcore and casual gamers – we are ideally positioned to continue to win market share in the coming years.” Which shows his concern to deliver what the market wants and to avoid shipping poor games. Points which John Riccitiello of Electronic Arts also frequently makes.

Which brings us to the full year targets: “Based on solid first-half sales performance combined with a more favorable dollar impact and the positive third-quarter outlook, Ubisoft is raising its targets for full-year 2008-09. The fullyear sales guidance is now around €1,050 million compared with the previous figure of around €1,020 million, and the guidance for current operating income before stock options has been revised upward to at least 13% of sales versus the previous target of at least 12%.” That is over a billion Euros of turnover and 130 million Euros of net profit. This is precisely what a powerhouse publisher needs. Those big numbers are needed to provide the platform to take the business forward. To exploit opportunities and to weather difficulties.

As you can see Ubisoft are an exemplary company with good management. The sort that are going to take this industry forward in spectacular, but well considered, fashion.

HMV (His Master’s Voice) was a large British record label that morphed into becoming the largest high street entertainment retailer in the UK. Their annual turnover is around £2 billion and they have 379 stores in the UK (they also own Waterstones with 313 UK stores). With a long corporate management structure they make slow decisions so their approach to gaming has moved in fits and starts. Over the last few years they have seen many other areas of income, such as recorded music, collapse, so they have racked up their games offering to compensate. And now they are moving into secondhand under the Re/Play moniker.

This is unparalleled and unprecedented. No other high street retailer of this magnitude deals in secondhand product. The management and infrastructure for them to do this well will be horrendous. But you can see why they are doing it. It is immensely profitable and it differentiates HMV from the supermarkets, who have rapidly become major game retailers.

Two groups are going to suffer from this. Firstly specialist game stores. They are losing their differentiator, which will have a huge impact on their ability to generate profits. They were always doomed by the ongoing move to online content delivery. All this does is to bring forward the date of their demise.

The second group to suffer is the whole gaming development and publishing industry worldwide. They get zero income when a game is sold secondhand, thirdhand, fourthhand etc. This is obviously very wrong and I have asked the question before as to whether it is worse than piracy. Publishers are now even more highly incentivized to remove high street retail from their business model. And these days they have the technology to do so.

• Xbox fanboys run amok. I have written on here before about fanboys and their uncontrolled and childish online behaviour. Now they are targeting Metacritic. LittleBigPlanet has a Metacritic of 95% after 28 reviews. The Xbox fanboys obviously see this as a threat because 2194 user scores are currently coming to an average of 6.3 out of ten. And it isn’t even available to play yet!!
• “Atari president Phil Harrison has told GamesIndustry.biz  that he believes Sony took “absolutely the right decision” in recalling LittleBigPlanet over the controversial references made to the Qur’an.” Which makes me even more convinced that they should not have withdrawn it.
• Midway in poo. A year ago its share price was low but it has slipped 67% since despite a much needed management shake up. You wonder how they are still in business with $580 million in losses since 1999 (estimated). Surely in this current climate they have to be prime takeover material? It just cannot go on like this.
• Wii Fit on track to outsell GTA IV this year. And it cost far less to develop. And makes far more profit per unit. If they haven’t already, everyone in the industry should now realise that we have a new paradigm. Games are entertainment (and more) for everyone now. The old certainties are gone.
• If you still needed evidence of the move towards MMOs then here it is. Electronic Arts have just invested a massive fortune in Warhammer Online and already it is doing well. And now they have announced that they have had another MMO under development, this time Star Wars : The Old Republic from Blizzard. These things cost huge amounts to develop and run. Which is more than matched by the immense profits they can make when they succeed commercially. But there is a high failure rate. This may explain why Electronics Arts have chosen to use other people’s existing IP for both of these games. It may reduce profitability and prevent them building value in their own brand, but this has always been the EA way.
• Following from the above story Electronic Arts now say that they are looking to put both of these games onto consoles. For them to admit to this they must be more than looking.  Makes mind numbingly obvious sense. MMOs are not on consoles because of a lack of enterprise. Something EA are well equipped to correct.
• Gamasutra-exclusive market analysis examines how major console exclusives negatively impact the weekly hardware sales of the platforms that lack them. Next they will be exclusively revealing that bears poo in the woods. This is a major leg of Microsoft’s incredibly successful strategy to beat PS3 with their Xbox 360. They have spent hundreds of millions on it. Unfortunately, whilst they have succeeded in beating Sony, they did not have sufficient foresight to predict what the Wii would do to the market. But then nobody else did either.
• Sudden boom in Xbox 360 piracy. Microsoft need to get their finger out here. The main rationale for the existence of consoles is that they act as anti piracy dongles. And when a console fails in this function it is no longer worth developing for. Just look at the PSP. A console can go from having a valid business model for a publisher to being a waste of time in just a few weeks once the piracy genie is out of the bottle. This happened at the end of the PSX/PS1 cycle and wreaked havoc on publishers because they had nowhere else to go. Now the market provides many alternative platforms so all that publishers do is to switch resources away from pirated platforms. This is what has happened to the PC. And it will happen to the Xbox 360 if piracy isn’t checked.

People said that Microsoft would never succeed in Japan with the Xbox 360 because the Japanese only bought their own consumer electronics. These people, obviously have no explanation for the phenomenal success of the iPod and iPhone in Japan. When the Xbox 360 outsold the PS3 for one week they said it was a flash in the pan. I wonder what they are saying now.

Microsoft say that Xbox 360 sales there have gone up fivefold, beating Microsoft’s own projections. So they are shipping even more units to try and stem the shortages. Ironically the 360 in Japan is in the same situation that the Wii has been in with America. In both cases sales are limited only by the number that the manufacturer can actually ship. The Microsoft Xbox 360 outsold the Sony Playstation PS3 for the month of September in Japan and for every week since.

Partly this success is the slow motion train wreck that is the PS3. It is not the leading ownership proposition that the PS1 and PS2 were. Partly it is down to the low retail price of the Xbox 360. Which is down to its elegant, easy to manufacture design and to Microsoft’s deep coffers, both of which Sony cannot match. And partly it is down to the stream of Japanese market titles that Microsoft are releasing. Some of these are Xbox 360 exclusives and some of them are former PS3 exclusives that are now cross platform. If you are a Japanese publisher, Playstation PS3 exclusives no longer make sense.

All the leading game industry analysts said that 2008 would be the year of the PS3, during which it would overtake the Xbox 360 in every market. Surely now it must be starting to look obvious that the Playstation PS3 is going to come third this generation in every market. Including Japan.

Regular readers here will remember the stupidity of the Church of England when Manchester Cathedral was featured in a video game. They completely over reacted and got on their high horse when it was one of the best things to happen to that building in many years.

This time it is Sony’s turn to completely over react. Tapha Niang is a two-year old piece of music by Grammy award-winning Toumani Diabate’s Symmetric Orchestra which is on his MySpace site. British developer Media Molecule used this as part of the sound track of the much anticipated game Little Big Planet. A nice example of gaming spreading culture.

But then someone posted this on the official Sony Playstation forum:

While playing your latest game, “LittleBigPlanet” in the first level of the third world in the game (titled “Swinging Safari”;)), I have noticed something strange in the lyrics of the music track of the level. When I listened carefully, I was surprised to hear some very familiar Arabic words from the Quran…

The words are:

1- In the 18th second: “كل نفس ذائقة الموت” (”kollo nafsin tha’iqatol mawt”, literally: ‘Every soul shall have the taste of death’).

2- Almost immediately after, in the 27th second: “كل من عليها فان” (”kollo man alaiha fan”, literally: ‘All that is on earth will perish’).

I asked many of my friends online and offline and they heard the exact same thing that I heard easily when I played that part of the track. Certain Arabic hardcore gaming forums are already discussing this, so we decided to take action by emailing you before this spreads to mainstream attention.

Shocking stuff. So Sony withdrew the game worldwide and are revising the sound track for a later re release. A massive over reaction and something they didn’t do for the Church of England. Maybe Osama bin Laden is a bit more frightening than Rowan Williams.

Whatever, a huge proportion of the non Islamic world now thinks that there is excessive sensitivity being shown to Muslims here. Soon all female characters in games will be wearing a burqa.