Microsoft Unifies its Minecraft Apps (Jun 12, 2017)
Alongside its Xbox One X announcement, one other big announcement Microsoft made at E3 is a unification of its Minecraft apps, such that several major versions will now be interoperable and available for social play between different platforms. Interestingly, the original PC version of the game is the one that will be left out from all this interoperability, but the mobile, Xbox, and VR, and even Nintendo Switch will all get it as a free upgrade to the current version. And in-game purchases (DLC) will also be available on each version. In many ways, it’s a quirk of the way the Minecraft apps have developed that they haven’t had this compatibility in the past – surely, many kids (and adults) have wanted to play these games on all their devices all along, and have had to make do with different incompatible versions instead. So this is at least a logical step, though the exclusion of the original PC version still feels a little odd.
Sony Announces 1 million Playstation VR Sales (Jun 7, 2017)
Microsoft Xbox Game Pass Will Launch in June (May 24, 2017)
Microsoft first announced the Xbox Game Pass subscription service back in February, but as I don’t seem to have covered it then it’s worth briefly talking about now, as the launch date has been announced today. The subscription is a sort of Netflix for Xbox games, featuring 100 games at any given time, though the specific titles will rotate in and out over time much as movies and TV shows do with Netflix’s library. It costs $9.99 per month and users will be able to download the games and play them as long as they remain available and the user remains a subscriber (Sony’s equivalent service merely streams games, so that’s one competitive differentiator). The service is notable mostly for the fact that it’s yet another example of a content category that’s traditionally been transactional moving to a subscription model, a trend captured in the Subscription Everything narrative here on the site. That’s both a better fit for many consumers who would rather pay a smaller amount monthly than big lump sums infrequently, and a more predictable revenue stream for Microsoft, which has already shifted to annuity models for other aspects of its business. From a consumer perspective, the subscription seems like a good deal – just the eight featured titles Microsoft highlights in the service at present are priced at an average of around $20, versus $10 to play all of them and lots more for a whole month. We’re going to continue to see more and more content consumption move to subscriptions, squeezing out those providers which continue to sell using only by-the-drink models, though there will always be those consumers who prefer to purchase at least some content that way.
via The Verge
Nintendo Sells 2.74m Switch Units in First Month (Apr 27, 2017)
In case there was any doubt, Nintendo has a hit on its hands with the Switch, its hybrid console/portable gaming system. It sold 2.74m units in the first month after launch, which is apparently roughly the same number that the earlier Wii U sold in its first year, and 20% of total sales to date of the Wii U. That’s not hugely surprising – reviews were mostly decent, the device has been out of stock off and on since it debuted, and the company had already upped its production. That was enough to generate almost exactly a billion dollars in revenue, or a little over 20% of the company’s entire revenue for the fiscal year which ended last month. The company’s forecast for the new financial year, which ends next March, is 10 million unit sales. Remarkably, Nintendo has sold ever so slightly more copies of the Zelda game that’s the standout title for the device at launch than of the console itself, which might just be a reflection of those supply constraints. In total, Nintendo appears to have sold around twice as many software units as hardware units in the Switch category, suggesting that people have bought an average of two games from Nintendo for every console. Together with Nintendo’s belated push into mobile gaming, it’s doing pretty well at the moment, though that mobile push is still generating much less revenue – the category which includes smartphone gaming only generated around $200 million in revenue for the year.
Nintendo Kills off NES Mini but May be Working on SNES Mini (Apr 19, 2017)
On the face of it, this could look like the in-app purchase model that so many other games have used so successfully over the last few years, which would look like capitulation on the part of Microsoft to the prevailing model. However, even though the article implies towards the end that that’s what’s happening here, this is actually something different. Whereas the classic IAP model often holds progress in the game hostage to the purchase of various items through the medium of in-app currency, Minecraft has always eschewed that model, instead charging a high up-front fee to purchase the game in the first place, with a small number of in-app purchases for specific items. It is now opening up that latter model to a small number of third parties, and while the use of in-game currency as the medium may carry echoes of the classic IAP model, this is something very different. Given the addictive qualities of the IAP model, that’s a very good thing, given that the game’s audience is largely children. The last thing Microsoft wants is for Minecraft to get a reputation for being a sort of Candy Crush for kids, whereas it’s currently known as a game that has at least some educational qualities.
This is an interesting strategy for Microsoft, which is releasing specs but not many more details for the next generation Xbox, which is codenamed Scorpio. On paper at least, it’ll be more powerful than its major competitor, the Sony Playstation 4 Pro, in several departments, but the consensus among gaming blogs seems to be that what Xbox needs isn’t so much better hardware as better software, or in other words more compelling games. This is where the Sony console has taken the lead in the current generation, and where it continues to do quite a bit better than the Xbox for now. It’s possible that the better hardware might spark better games from developers keen to push the limits, but Microsoft will obviously have to work hard and directly to get more developers and more titles on board. For now, this spec release by itself does little to tell us how the next-generation Xbox will do.
Nintendo to Double Production of Switch Console – WSJ (Mar 17, 2017)
Another sign that the Switch is a hit, despite some fairly mixed initial reviews: Nintendo is reportedly doubling its production run for the console from eight to sixteen million, which would put it on pace to match the initial sales of the Wii, and well ahead of Wii U sales. It should also help prompt more game makers to produce titles for the console, which is a good thing since lack of games was one of the big criticisms at launch. That will, of course, take time, so it’s not an instant fix by any means, but it looks like Nintendo finally has another hardware hit on its hands after a tough few years. Alongside a long-awaited push into mobile gaming, that could mean a good period of growth for Nintendo is coming, assuming they learn the lessons from their Super Mario Run launch.
This feels like a clever little idea from Google – showing people ads for games in which a tiny version of the game itself is embedded, making the ad playable. It could also be part of an eventual path to Progressive Web Apps and other web-app hybrids Google is working on, just as some of these tools are already served up in search results. There are some other clever enhancements here too – it feels like app ads are far from done as a medium.
Nintendo Switch Reviews Suggest Excitement About Model, Less About Actual Performance and Games Available (Mar 1, 2017)
The review embargo for the new Nintendo Switch console seems to have lifted overnight, and the reviews that have resulted are mostly pretty mixed. There’s quite a bit of excitement for the concept and some of the execution, but every review I’ve read so far highlights hardware bugs, performance lags, frustrations with Bluetooth and cramped controllers, and especially a lack of games at launch. It appears that Nintendo mostly allowed reviewers to demo one game – a pretty good new Zelda title – and a package of mini games called 1-2-Switch which seems mostly intended to show off various game modes rather than provide hours of entertainment. As such, this seems like an in-betweener for Nintendo – neither the big hit the Wii and DS were, nor the obvious flop the Wii U was. In time, it’s possible that software updates and more games will push it over into the hit category, but it certainly doesn’t look like it’s there yet. All this is, of course, interesting in the context of Nintendo’s simultaneous push into mobile gaming through smartphones, which has also been a mixed bag so far.
Amazon’s Twitch acquisition was one of the most interesting it’s made, and one of the few big ones it’s made which weren’t in the e-commerce space. Since the acquisition, it’s pursued two separate tracks with Twitch, one focused on the core gamer space it’s always served, and the second broadening its reach and appeal beyond gaming and becoming something of a YouTube clone. This announcement belongs in that first strand, though it also ties in the online sales angle by putting a buy button next to video game video encouraging viewers to buy the game being played in the video. This is a unique take on the ad revenue sharing model YouTube popularized, and could be pretty lucrative for at least some channel owners over time. It’s also a great way to provide very relevant advertising around a video platform, something that’s often tough to do beyond broad demographic profiling.
via The Verge
U.S. iPhone users are spending more on apps – Axios (Feb 22, 2017)
Here’s the second item on apps from Axios today. Whereas the first was about Pokemon Go, this one is about App Store performance in general, and shows that average spending on the App Store continues to rise in the US. That spending is dominated by games, a long-standing trend, and the game spending is likely in turn dominated by in-app purchases. For now, this is great for Apple and its partners: IAP is growing, and that in turn is driving App Store and Services segment growth, something that’s critical to Apple’s growth narrative. However, I continue to find the IAP model troubling – it exhibits characteristics of addiction and relies on a very small number of players paying huge amounts per month. That works as a business model, but it feels predatory and I’d love to see game developers come up and popularize new ways to pay for games – so far, we’ve seen one or two companies do this successfully including UsTwo’s Monument Valley, but Nintendo’s attempt to find a different model with Super Mario Run has been disappointing from a revenue perspective. Still lots of work to be done here.
This is one of two quick pieces from Axios on apps that I’m going to cover this morning. This one shows that Pokemon Go has had a little resurgence off the back of the new characters it released recently, making it a top app again on iOS. To my mind, that again reinforces the point that Nintendo has done far better with the app it only owns a minority share in than with the app it owns outright (Super Mario Run) and likely even makes more money from Pokemon Go despite that minority share. That’s something it’s going to have to think hard about as it prepares to launch additional mobile games in the coming months.
Sony Reports Results for December 2016 Quarter (Feb 2, 2017)
Sony’s been such an interesting company to watch over recent years, because almost every aspect of its hardware business has been challenged, and it’s even exited some, like PCs. However, it’s had something of a renaissance in the gaming space, with the Playstation outperforming the Xbox in the current cycle, and actually growing year on year in the December quarter. The other interesting hardware business to watch at Sony its smartphones, because it’s taken a unique approach for an Android vendor, which appears to be paying off. That approach has involved focusing the smartphone business on the premium segment, resulting in a smaller but more profitable business. Sony’s smartphone shipments have dropped by about half from 2015 to 2016, but its margin rose to over 8% in Q4, well above the low single digit or negative margins most consumer electronics businesses generate. There’s an interesting signal here for other Android vendors about what it could take to find success, though there probably isn’t room for more than one or two vendors pursuing this premium strategy.
via Sony (PDF)