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Friday, March 12, 2010

A Successful Console MMO is Just a Matter of Time

With the “revelation” that Blizzard isn’t likely to bring World of Warcraft to consoles, the question remains: Just when will a console MMO gain widespread acceptance as it has on PC?
It will happen, but it could be a while.
There’s a few likely candidates, such as Sony’s [SNE] DC Universe Online that’s coming to PlayStation 3. It has many characters that players know, and if Sony Online Austin can nail the gameplay, it will likely surpass Square Enix’s [SQNXF] Final Fantasy XI as the most successful MMO.
Sony's DC Universe Online
But don’t expect the method PC success was found to work on consoles. Rather, expect a different pay model.
This model would likely mean no monthly fees, but plenty of pay-to-download content, already finding success in other console titles such as Electronic Arts’ [ERTS] Rock Band titles. Indeed, EA will include an online component- both DLC and online play – in every one of its titles in fiscal 2011 (starting April 1), Chief Operating Officer John Schappert told analysts in its Q3 conference call last month.
It’s no wonder EA and other publishers are bullish on DLC: Last year, digital downloads grew 139% on Sony’s PlayStation 3 and 50% Microsoft’s [MSFT] Xbox 360, the Los Angeles Times reported, without citing a source for its data. That’s a stark contrast to sales of disc-based media, which shrank 8% last year according to NPD.
On consoles, incorporating DLC into MMOs presents two key advantages to both gamers and publishers/developers:
  • Unlike monthly fees found in most MMOs, downloadable content is strictly optional. With a key barrier removed, gamers have the option of grabbing the latest weapons, maps or vehicles for a nominal fee.
  • Profitable DLC will not only offset costs for server upkeep, but so will –  wait for it – in-game ads. While some gamers will turn their noses up at this notion – which is reality in most EA Sports games – they may be more receptive to it if it saves them money – such as a $10 to $15 monthly subscription fee.  In fact, EA is already planning on cutting the middleman for its ad sales: Starting this summer, the company will sell in-game ads directly, execs said at a New York event earlier this week.
There’s also challenges to MMO publishing on consoles, as WoW lead producer J. Allen Brack mentioned in the G4 story:
  • Hard drive space: Some 360s have little to no hard drive space, and a game like WoW requires roughly 15GB including core files and patches. As time goes on, this will be less of an issue as Internet connections speed up and storage in the cloud becomes more prevalent.
  • Quality control: Any developer submitting new content for console MMOs will have to deal with the approval processes from the likes of Sony or Microsoft, which have been known to cause headaches for content makers.
  • Adapting to controllers: While games like WoW were made for a mouse-keyboard control scheme, it’s already been demonstrated through console MMOs like Square’s Final Fantasy XI can be played with great competency – with or without a keyboard.
Despite the challenges MMO developers have faced in the past on consoles, the escalation of digital distribution, faster Internet speeds and no subscription fees could finally make for a big-time console MMO.

Monday, April 27, 2009

Ex Take-Two COO Re-Emerges at Crackdown Developer

Former Take-Two [TTWO] COO, whose employment with that company ended  on April 15, has been hired by Crackdown developer Realtime Worlds as itsRTW_GaryDale_CEO CEO.

In his role as CEO, Dale will oversee the day-to-day operations and drive strategic direction of RTW and its products, commencing with the company’s upcoming urban-themed online PC game All Points Bulletin.

“Having worked with Gary earlier in his career at BMG Interactive, I am deeply impressed with his management style and profound understanding of the entertainment business,” said David Jones, co-founder and creative director, Realtime Worlds.

Dale’s resignation from Take-Two was announced in January, where the company said he left for “personal reasons” and that it would not fill his position. Instead, Take-Two delegated Dale’s duties among other company executives.

Dale was appointed Take-Two COO last July after rejoining the company in December 2007 as executive vice president. Prior to that, he was Capcom’s European managing director. Before Capcom, Dale was COO for Take-Two’s Rockstar Games publishing label.

Wednesday, April 1, 2009

Red Mile CEO, Board Member Quit

Red Mile Entertainment CEO Chester Aldridge has resigned from his position at the Sin City developer, as well as board member Kenny Cheung, according to an SEC filing.

Aldridge will remain as chairman of the board. Cheung’s resignation “did not result from any disagreement with the company relating to our operations, policies or practices,” Red Mile said.

Aldridge will be replaced by Simon Price, who served as president of the company since March 2008. In addition to Red Mile, Price is the managing director and a director of market research firm Simon Price Consulting. Before that, he was also journalist in the game industry at now-defunct US trade publications MCV and mmWire (disclosure: this editor worked with Price at mmWire).

It is not yet known how Cheung’s resignation will affect the company. Cheung owns and operates Tiger Paw Capital, which Red Mile was attempting to increase its $1 million line of credit with in February. At the time, the company said it was unlikely it could continue its business beyond March 31 if it could not secure additional funding. So far there has been no word if the company continues to operate.

Red Mile acquired the publishing rights back from Atari last month for its multiplatform Heroes Over Europe. The game’s website still shows a spring release, but it also is still showing Atari as a publisher.

Thursday, March 26, 2009

Used Game Sales Propel GameStop to Solid Year, Q4

Almost a quarter of GameStop’s [GME] sales came from used games for the year and Q4, the company said its earnings statement today.

The company raked in an astonishing $2.0 billion in used game sales last year, compared to $1.5 billion in the previous year. The $2 billion represents 23 percent of GameStop’s sales, while the same category made up almost half—48.1 percent—of the company’s profit.

For the year ended January 31, GameStop reported a net income of $398.2 million, or $2.38 per diluted share on revenues of $8.8 billion. That compares to a net income of $288.2 million, or $1.75 per diluted share on revenues of $7 billion the year before.

For the quarter—which included the holiday season—GameStop’s net income was $232.3 million, or $1.39 per diluted share on revenues of $3.4 billion. The company’s net income in the same quarter the previous year was $189.8 million, or $1.14 per diluted share on revenues of $2.8 billion.

“In spite of the current worldwide retail environment, GameStop’s financial performance is being driven by delivering to consumers what they want: stores in a wide range of locations, knowledgeable associates and most importantly, options that provide value. Our affinity with consumers, combined with our solid business model, prudent financial management practices, expansive brand presence and strategic merchandising, allowed us to achieve a record eighth straight year of sales and earnings growth. In 2008, we opened or acquired 1,002 stores worldwide, including the acquisition of Micromania, the largest video game retailer in France,” CEO Dan DeMatteo said in a prepared statement.

The company expects this year’s sales to grow between 10 and 12 percent, and its diluted EPS to fall between 18 and 22 percent higher than last year. For the current quarter, GameStop expects results to be flat to a 2 percent growth, due to the fact it’s up against a quarter last year which saw the release of Super Smash Bros. Brawl, Mario Kart Wii, and Grand Theft Auto IV. Still, it is encouraged by the release of major titles like Street Fighter IV, Resident Evil 5 and Halo Wars in Q1 this year.

The company will open 400 stores internationally this year, half of which will be here in the US, GameStop said.

Friday, March 20, 2009

Analysis: February sales numbers

Legs. Nintendo games have ‘em.

Capcom brought one of its biggest guns out last month in the form of Street Fighter IV, but still couldn’t topple Nintendo’s Wii Fit juggernaut in The NPD Group’s February sales numbers. Sure, if you took SFIV’s numbers on PlayStation 3 and Xbox 360, the title would have outsold Wii Fit by more than 200,000…but no single SKU could touch Wii Fit.

Get used to it, too: Wii Fit is much more than just a game, it’s a platform. Until Nintendo starts selling its Wii balance board separately, consumers must purchase Wii Fit to take advantage of the growing library of games that use the board.

About those legs: with DS sales totaling more than a half million last month, it’s no wonder Nintendo’s older yet killer apps for its handheld are selling well. Mario Kart DS and New Super Mario Bros, released in November 2005 and May 2006 respectively each outsold titles like THQ’s Deadly Creatures for Wii, a title that drew decent reviews. It is hard to imagine a DS library without those two staples of Nintendo gaming.NPDSWFeb09

Good or bad reviews don’t always have an impact on sales, as we’ve seen with the two-year-old Wii Play, which placed fourth on the chart but was generally met with mixed reviews. Our straw poll at local Maryland retailers suggest that Wii Play is a mere $10 game that comes with an extra remote that several consumers require.

Aside from SFIV, Sony’s [SNE] Killzone 2 positioned itself as yet another PS3 exclusive that could help move systems. While popular exclusives are a great way to do that, so far Sony isn’t buckling on a PS3 price cut despite mounting pressure from publishers, who are now neck-deep in Wii Kool-Aid.

One big title isn’t in the top 10 because NPD does not track online content sales: Grand Theft Auto IV: The Lost and Damned, exclusive to 360. While Take-Two Interactive [TTWO] won’t give specifics, it did say the downloadable episode represented the largest dollar take in Xbox Live history. That’s no surprise considering it was also one of the most expensive at $20.

In the handheld arena, PSP didn’t even sell half as many units as DS, but rumors of Sony’s handheld’s demise are greatly exaggerated. Instead, Sony is ramping NPDHWFeb09up an impressive lineup for the system later this year. We wouldn’t be the least big surprised if PSP’s year-on-year sales are higher this fall, but still won’t come close to the DS(i) juggernaut.

Meanwhile, Microsoft’s [MSFT] 360 continues to cement its second-place standing. According to NPD analyst Anita Frazier, February was the system’s biggest non-holiday month since September 2007 when Halo 3 launched.


The industry as a whole continues to see growth. February saw a 10 percent rise in sales versus February last year. NPD says unit sales grew more (11 percent) than dollars did because of a slightly lower average selling price in all categories compared to last year.