MMO Business Report: US Tariff on Game Consoles, Pearl Abyss Quarterly Report, and More

Our MMO Business Report is back once again! This week we have some more quarterly reports, this time from Tencent and Pearl Abyss. We’ll also be taking a look at US tariff on game consoles, and a disappointment in the esports industry.

 

Tencent Quarterly Report is Looking Up

Honour of Kings

Tencent’s online game revenue has increased 8% year on year. This is thanks to the end of China’s freeze on game approvals and because of Honour of Kings which has been a constant, steady earner for the company. Mobile games made the most revenue, $3.2 billion USD which is up 26% from last year, but in the same time period, they saw a decline in PC game revenue of 11% to $1.7 billion USD. Looking back at where Tencent was during Q2 last year  and comparing it to this year, you have to keep in mind that last year they were only able to release one new game in China during all of Q2. In comparison, in Q2 2019 they released 10 mobile games, so it shouldn’t be a surprise that the company is doing well.

 

Source: Tencent Quarterly Report

 

MMO ‘Seed’ Raises $22 Million from Series B Funding

Seed

SpatialOS MMO Seed has raised an additional $22 million in funding. The money came from investment firms Novator, Northzone, Neoteny, firstminute capital, Makers Fund, New Life Ventures, and LEGO. Yes, THE LEGO. When combined with previous funding this brings the total for Seed up to $37.42 million.

“We are thrilled Novator and LEGO Ventures are making this big bet on us and for getting Ragnarsson on as our Chairman – he truly understands the value of single-shard MMOs and brings his amazing experience from CCP to Klang,” said Klang CEO Mundi Vondi. “Partnering with LEGO Ventures, the global phenomenon of emergent gameplay, is fantastic and aligns perfectly with our vision. Finally, we are humbled that our great current investors Neoteny, firstminute Capital, Northzone, and Makers Fund are joining the round as well and couldn’t be more excited to have the fuel to deliver SEED without compromising on its very big vision.”

 

Source: Games Industry

 

Pearl Abyss Quarterly Report Wows

Black Desert Online

Q2 2019 was Pearl Abyss’ best performing quarter in terms of sales with an amazing 266% rise in net profits quarter on quarter. The overseas market (in this case meaning outside of South Korea) makes up 74% of their sales. During the quarterly report, they also talked about upcoming games. EVE: Aether Wars has been given the green light despite originally only being a technical demo. Black Desert Mobile is set to launch in Q4 2019 globally. Project CD is a new AAA RPG that isn’t based on the Black Desert IP and is going to be targeted to a global audience. Project K and Project V are casual shooting games developed using Pearl Abyss’ new engine. No dates yet for the unnamed projects thus far.

 

Source: MMOCulture

 

Gfinity Esports Australia Closing

Gfinity Esports Australia which has been holding esports events across Australia for the last two years, will be closing in November. The company put out a press release that made it clear the company had not seen the return that was forecast when it was launched.
Dominic Remond, CEO of Gfinity Esports Australia said, “We would like to thank all our stakeholders and the Australian esports community for their support over the last few years. This is a very difficult announcement for all our staff. We will continue to meet our obligations to our existing partners, including Supercars with the upcoming Gfinity Supercars Eseries, and deliver outstanding events until we close later this year.”

Ciaran Davis, Chief Executive of HT&E added, “Esports remains an exciting industry with significant global interest and activity and HT&E believes it will become a mainstream and significant content-audience-commercial medium in the long term. But our absolute focus is on our core radio business and the economics of esports in the Australian market are yet to deliver sustainable, positive earnings. It is critical our investments deliver value for shareholders and with esports there is no certainty on when a positive contribution might be achieved.”

 

Source: Esports Insider

 

US Tariff on Game Consoles

New Tariffs on electronic devices made in China were set to go into place on September 1st, however, the United States Trade Representative said they will delay the tariffs until December 15th. The tariffs cover cellphones, laptops, some toys, computer monitors, video game consoles, and some clothes. The tariff was originally announced in May. Since then Apple, Sony, Nintendo, and Microsoft have all sent letters to the USTR stating the tariffs would have an impact on the US economy and force them to raise the prices of their products. What does this mean for consumers? If you’re planning on getting anyone a console for Christmas, buy it now! In fact, Donald Trump even mentioned Christmas while addressing the press.
“We’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers, which, so far, they’ve had virtually none. The only impact has been that we’ve collected almost $60 billion from China – compliments of China. But just in case they might have an impact on people, what we’ve done is we’ve delayed it so that they won’t be relevant for the Christmas shopping season.”

Of course, what Trump said isn’t accurate. The tariffs aren’t being paid by the country they’re coming from or even the countries in that country. They’re a tax on the good being brought into the country by companies that typically end up being passed on to consumers. So don’t be surprised when Christmas is more expensive than usual this year.

Source: Cnet

 

Loot Crate Files for Bankruptcy

Loot Crate has been struggling quite a bit over the last 18 months and has now filed for bankruptcy. However, they’re also claiming they will continue with business as usual. Investor Money Chest LLC has purchased the company’s term-loan and offered $10 million to help keep operations going. Loot Crate said they will continue to pay their employees as usual and overall, from the way they speak of it things seem to be quite smooth.

However, former employees have made claims stating otherwise. Two days before the bankruptcy was announced Loot Crate laid off 50 employees with no severance and no warning. With one of them saying to GamesIndustry.biz, “There’s been a lot of speculation that the reason for that was those who put this layoff together knew the company would be filing bankruptcy, and that they did this knowing former employees couldn’t pursue legal action because of bankruptcy protections. Is this how and why this went down the way it did? I don’t have the ability to say, but I can see the sense in it from those involved in making the decision who likely were apathetic to the employees that would be lost.”

Lootcrate now employs 60 people.

 

Source: Games Industry

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Pearl Abyss Fanfest “Into the Abyss” at E3 2018

Pearly Abyss had its first Fanfest called “Into the Abyss” at the Regal LA LIVE Stadium 14 during E3 2018. While I may not be a core Black Desert Online player, I’ve played the game for a few levels, kept up on some of the PvP news, and somehow was lucky enough to represent MMOGames at the festival this year. CEO Robin Jung hopes this will be one of many, as the company certainly wishes to grow beyond a single PC game.

Into the Abyss

Secrets Unleashed

One of the nice parts about the festival was that it wasn’t just the team giving itself a pat on the back. Yes, we were given some interesting information, like a representative from Samsung saying the mobile version of Black Desert Online is one of the top data-eaters on people’s cell phones in Korea, up there with Facebook, and it’s currently the #1 mobile MMO title (which means something there). The game has apparently been translated into 12 languages and is available in more than 150 countries. It’s neat information, but the series of collected fan questions answered was meatier.

For example, the company name: Pearl Abyss. The idea is that it’s light in the darkness. Something precious from the deep. However, it’s also just a “gorgeous name.” It’s funny to see the developers go from something serious and deep sounding to admitting that their name just had a nice ring to it.

For those wondering why the game isn’t big on instanced dungeons and raids, it’s because Pearl Abyss didn’t think they felt right. They actually had over a hundred dungeons before they realized they wanted a living game world in a persistent space. It wasn’t an executive decision, but something everyone had a chance to express their opinion about before they reached a consensus to ax their babies. It’s naturally hard to make a great game with a single “voice” with so many developers and so many of their own passions, but the fans come first. Hidden caves felt more fun than another static pocket in the world.

The other part here is that by talking these things out, the team can avoid repeating the same mistakes again and again. There’s a certain balance between realism and convenience that the team straddles, and communicating this and trying to keep everyone on the same page ensures that the company is developing content for its actual audience.

Raids are a similar issue. It’s not that outdoor raids are impossible to craft, but they’re certainly more difficult, which is why Pearl Abyss chooses to put manpower elsewhere. Like in its mobile game. While not exactly a 1-to-1 recreation of the original BDO, there’s enough in common that people who played on the PC should feel at home. The same idea is mostly true for the upcoming Xbox version of the game. I was told the console version is 99.9% the same in terms of familiar aspects of the game, like classes, attacks, fishing… the 0.1% is only to account for error, supposedly.

Part of this includes the fact that the game needed a control and UI overhaul. While it’s physically possible to just shove the console players together with PC fans, it creates problems. Using the PC UI on consoles would be rough, much like with mobile being, well, literally smaller. Changes need to be made not just to fit the machine, but audience expectations. For example, you can’t maximize text windows outside of the PC game, but looting is handled differently. PC gamers have their mouse and incredibly versatile keyboard of many buttons. Phones have a small touch screen while console has buttons. While you could just have a lot of combos, changing the UI to do things like having an option wheel helps greatly. Sadly, it’s not enough to close the advantage gap between PC gamers and console controllers, so don’t expect to see cross-platform play.

However, Pearl Abyss also said they want the game to be available on every platform. No names were dropped, but it’s not like there are too many consoles to imagine (unless Pearl Abyss also wants to create games for pagers). Focusing on the present, however, you’ll have to remember that Black Desert Online isn’t launching on the Xbox One, it’s starting a beta this fall. That beta is there because the team knows there are bugs to fish, optimizations to make, and a UI to tweak, all based on what players find in the beta. That’s what it’s there for! The hope is that the beta won’t last too long, but it seems to have an understandable goal even an EA leery vet like myself can appreciate at face value.

Console is just another long arm of Black Desert though. While this will be the third platform for the game, the team does feel their world has so much more it can share. There are some ideas and projects related to spinoffs that would also take place in the Black Desert world, but there was nothing specific to mention at the time. With that in mind though, the team also doesn’t want to pigeonhole itself. They’re working with Counter-Strike co-creator Minh Le to create an unnamed FPS. We’ll have to wait and see where that goes in the future.

Hands-on With Black Desert’s Mobile Self

To be completely fair, I really haven’t enjoyed any core mobile MMOs. The genre generally doesn’t feel like it lends itself well to the smaller screen for me. I dislike the 2.5 perspective they use. Automating a lot of the work is boring. Black Desert’s mobile version does a lot of this but, somehow, works. Part of it may be because our characters were pre-leveled and equipped. Spamming buttons made things die, and that can be highly satisfying sometimes, especially when you’re feeling casual.

In the video, we saw group content, farming, pets, and other very “MMOy” activities. We were told we’d have guilds, 20vs20 guild wars, and duals in shared gameworlds. No asynchronous lies, but actual multiplayer. And I saw it, at least in 1v1 duels. Win or lose, several of us gave up some gourmet sounding food to just smash buttons and kill our digital co-festival-goers for far longer than we reasonably needed to in order to get a basic feel for the game. It’s embarrassing to write that, but true.

Unlike in the above picture, everything I saw was in understandable English, though admittedly I was mostly doing combat. You move with a virtual left control stick, then attack via “hotkeys” on the right-hand side, with dodge being in the lower left-hand side. It doesn’t feel precise at all, but attacks felt wild and wide enough to mostly hit the general area I wanted to be hitting anyway. I did a little gathering for fun, but no major quests, crafting, or anything non-combat, which is generally my focus. It could be the lack of sleep, but the spammy attacks were fun enough for a while, and I started to “wake up” and play for real after some of the other attendees started to get some wins against me. I think that’s a good sign.

Normally I’d be more cautious but one big thing struck me: the game was running live. On servers in Korea. This wasn’t something running off a local version of the game, which happens a lot at trade shows (online games really do get the shaft when it comes to showing themselves off in public displays). This was a specific build, yes, but a build populated with at least some other people. We could interact with each other (even if it was mostly murder). It just kind of clicked.

That doesn’t mean I’m going to tell you all to get ready to download BDO Mobile when it (hopefully) comes out next year. I will say, however, that Pearl Abyss was wise to bring it, and that players should consider giving it chance, especially if they’re already enjoying Pearl Abyss’ world

 

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