Weekly Business Report: Nexon’s Internal Restructuring, Ninja’s Leaving Twitch, and More

MMOGames Business Weekly Report is back to take a look at mobile gamer preferences for free to play games in China, the latest news from Nexon, Ninja leaving Twitch, and a few other topics relevant to the business side of making online games.

 

Automaton Games Shuts Down

Mavericks: Proving Grounds

Automaton Games, the folks who were behind the unreleased 1,000 man Battle Royale Mavericks: Proving Grounds, has shut down and in the process the game has died. In the announcement on their website, they cited a lack of funding as the reason for their sudden closure. Thankfully Improbable, the makers of SpatialOS, have said they will be trying to find places for Automaton employees in their company. Mavericks: Proving Grounds is actually the second SpatialOS game to meet its end in recent months leaving some to speculate that SpatialOS falling out with Unity earlier this year may have played a role. If that’s true, this might only be the beginning of SpatialOS related sunsets. MMOGames staff will be watching and will continue to bring updates in our weekly business report.

 

Source: MMOGames

 

Chinese Consumer Preferences

According to recently released research, over half of Chinese consumers prefer free to play or ad monetized games over premium titles. In fact, the research found that 61% of people prefer non-premium games. 85% reported they spend money on mobile games with 3% spending more than $50 (¥330) a month. In contrast, the average spending is just $5.80 a month. Those interviewed between the ages of 26 and 30 had the highest average spending at $10 a month.

The research also showed there is a high level of brand loyalty. 92% of respondents said they stick with a game for more than a week and 87% say they’ve played fewer than 5 different games in the previous month.

One challenge that developers face is how well divided the market’s stores are. In China, 30% of the market is using the App Store, 29% are using Tencent’s MyApp, and 26% use the Huawei app store. In the West we really only have Google Play or the App Store for mobile games.

It would be really interesting to see this same research completed in a few different Western countries to see how our views differ. I would personally much prefer to pay for a game or even pay a subscription for a game over being nickel and dimed to death by an in-game shop.

 

Source: Games Industry

 

Nexon Internal Merger Incoming

The last few months have been a wild ride for Nexon. First, their founder and CEO was putting the family’s stake in the business up for sale, worth between 9 to 11 billion dollars. After months of speculation that everyone from Disney to EA were interested in buying, it seems Kim Jung-ju may have simply decided not to sell. Of course, I’m sure a decision like that wasn’t made lightly. Following the release of this rumor, Nexon’s stock dropped resulting in a loss of up to 5%. Now we know that Nexon is reorganizing and merging their two core business units. No jobs are going to be lost in this internal restructuring, but the company is looking at getting rid of projects with low commercial value. They also hope that the restructuring will improve the company’s operating profits and increase its stock value. News of this restructuring started out as a rumor but was quickly confirmed by Nexon. It is set to take place sometime in August.

 

Source: MMOCulture

 

Ninja Leaves Twitch for Mixer

Ninja Fortnite

Ninja has announced that he will no longer be streaming on Twitch and is instead switching over to Microsoft’s Mixer platform. The specifics on this particular deal haven’t been released but last year he was making $500,000 a month streaming Fortnite on Twitch and a paid promotion deal with EA for Apex Legends got him $1 million, so it is safe to assume he got a pretty sweet deal. This marks a major shift for Twitch which has been seeing its growth slow over the last year.

Mixer has always been playing third fiddle to Twitch and Youtube but has also seen consistent growth. Last quarter it saw 119 million hours watched, an increase of 37% year on year. Ninja’s move to Mixer might be exactly the sort of push the platform needs to catch up to its two bigger competitors. However, Fortnite’s popularity, especially in streaming, has been on the decline. It is also possible that many of Ninja’s fans wont follow him to this different platform because they prefer Twitch. We can see an example of this in the industry already looking at people who refuse to play a game that hasn’t been released on Steam. Only time will tell how this transition actually goes.

 

Source: Games Industry

 

 

Zynga Eyes China

At one point in time just a few years ago Zynga was dominating the games industry. They were all we ever talked about it seemed like. Of course the days of Facebook games are long gone now, but that doesn’t mean Zynga is gone or that they’ve even slowed down. Zynga has been transitioning to a mobile game developer and having great success with it. They recently released Empires and Puzzles in Japan and Korea, the beginning of their strategy for expansion into the Asian market. Now they’re eyeing China.

In a call with GamesIndustry.biz Zynga COO Matt Bromberg said, “We are beginning to look at China for Empires & Puzzles as well, and as our portfolio continues to develop we have both Star Wars and the Harry Potter game on our slate for the future. When there are big global pieces of IP like that, which we think will resonate across Asia, we’re hopeful that will also help us expand there. We’re trying to take a measured approach to it, and learn as we go and make sure we have the right match of game and personnel on the ground and marketing strategy. When you get those lined up it can be terrific, but it is a complicated market and we’re still in learning mode.”

A complicated market is putting it lightly. Still, if they are successful in their push into China, they’ll be tapping into a mobile games industry with an estimated 586 million gamers.

 

Source: Games Industry

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Low Supply and High Demand – Can We Get More Triple-A MMORPGs?

Nearly a decade ago, the MMORPG genre was going full steam ahead. The imposing figure of World of Warcraft wasn’t enough to discourage other developers from taking a stab at the genre, and we saw the birth of new and ambitious triple-A MMORPGs left and right: Aion, The Lord of the Rings Online, Age of Conan: Hyborian Adventures, Champions Online and… um… Hello Kitty Online.

Alright, scratch that last one.

Triple A MMORPGs Age of Conan Hyborian Adventures

These are just a handful of examples to remind you of the vigorous state of the MMORPG back then. I can’t say for sure if this represented the peak for the genre, but it sure was exciting to experience all these new worlds of assorted inspirations and backgrounds. There was a lot to choose from and so little time to live all these different virtual lives.

Fast forward to now, and the panorama is far from ideal. I wouldn’t go as far as saying that the MMORPG is dying, or all those other clichés, especially because we have been spoiled with all the good stuff that came before. However we were also mistreated, taken for granted, served the same rotten fruit year after year, while expected to fork out a significant amount of our wages. Unsurprisingly, players grew tired of this pattern and began doing this crazy, uncanny thing – demanding innovation and asking developers to up the ante. Go figure!

Recent years haven’t been so kind in what triple-A MMORPGs are concerned. We can throw a Guild Wars 2 in there, mix it with Final Fantasy XIV and The Elder Scrolls Online for good measure, but even those aren’t exactly spring chickens anymore. If we squint a bit, we can get Black Desert Online and Blade & Soul in the same pot, as these two boast decent production values and loyal player bases – when they’re not crying ‘pay-to-win!’, it depends on the day of the week. But what else is there? At risk of failing to mention some other relevant triple-A MMORPGs, the scenario is somewhat grim, and I’m glad that a nice fun distraction like MapleStory 2 is doing well so far.

Triple A MMORPGs MapleStory 2

What’s weird is that the demand for MMORPGs is real, palpable and often capable of reaching unexpected levels. As a case in point, let’s look at the recent western release of Bless Online. For years, there was an insurmountable and somewhat perplexing hype surrounding a game that was failing to convince players in their homeland, South Korea. And yet, there was this prevailing impression that Bless looked good, had all the inner workings of a proper, triple-A MMORPG, and was destined to be the game that millions of players had been waiting for. There is no need to go into detail on what went wrong – you can read more about it here – but one thing is certain: Bless would make a ton of money had it been capable of fulfilling its promises, its untapped potential.

So, what or who is to blame for the current lack of triple-A MMORPGs? Clearly, we can point the finger at several causes, and one of them is, simply put, time. Developing an ambitious, high budget MMORPG is a task that isn’t at the reach of every studio. It requires years of planning, exhaustive studies into what is dominating the space at a given time, thoughtful considerations over the use of tried-and-tested mechanics versus new, possibly polarizing features, and, of course, a nearly endless stream of cash to keep the team confidently going for several years. For most developers, this is an endeavor that they simply aren’t willing to take, as it could eventually result in failure and closure of the studio. That is why only a handful of high-profile publishers are currently hosting MMORPGs with irrefutable success: Blizzard (World of Warcraft), NCsoft (Guild Wars 2), Square Enix (Final Fantasy XIV), Bethesda (The Elder Scrolls Online).

This leads me to another question: when is Rockstar Games finally dipping their feet in the genre? They have the financial means, the online infrastructure (GTA Online is a great start) and decades of experience in chart-busters, along with a complete disregard for fake video game morality – as Red Dead Redemption 2’s shrinking horse testicles will tell you. Also, I’m pretty sure that they would have no issues with ‘politely asking’ their employees to work a few 100-hour weeks here and there, for the sake of a great game – think of it what you will.

Triple A MMORPGs Elder Scrolls Online

There is another strong reason for the decline of triple-A MMORPGs – boredom. Most MMOs stick to the same old routines in the hope of seizing a respectable player base, but this had a nefarious effect in the grand scale of things. It had a devastating effect on the huge MMORPG loving crowd, fragmenting the player base that has started to pay close attention to other, more immediate options. MOBAs and Battle Royale games provide instant gratification and scratch your competitive itch; those who swear by the MMORPG may try a new one, feel underwhelmed and go back to the popular, older options in the genre like the ones that I’ve mentioned above.

The latest examples of MMORPG design feel like walking in circles, with no goal in sight and not a single worry about player expectations. Even South Korea, probably the most prolific region in what this genre is concerned – and main culprit for the culture of grind that is now so indissociable from MMORPGs and free-to-play in general – seems to be taking a much-needed step back to refocus. There is Lost Ark, Peria Chronicles, Project TL and Ascent: Infinite Realm, but not much noteworthy besides these few.

Aren’t you sick and tired of the ‘flavor of the month’ MMORPG, dumbed down games that are rushed to the market with the sole purpose of unashamedly scraping every last penny off the customers… I mean, the players? Here they are now, marketed to the moon with promises of delivering the greatest ride ever – It’s all about the endgame, it will be an amazing experience when you get there – with new content for decades and incredible support. A few months later they are gone, players left empty-handed, with nothing but broken promises and a feeling that they’ve been had. Ripped off.

Triple A MMORPGs Crowfall Ranger

There are players craving MMORPGs, players with tons of money to throw at a developer that can keep up with its promises. Just look at the money thrown at some Kickstarter campaigns – Star Citizen received over $2 million dollars in funding on Kickstarter alone and is still getting funds through private campaigns; Ashes of Creation amassed over $3 million dollars; Crowfall also got quite a bit of funding – over $20 million in total funding! How is that not a sign that there is a huge demand for a full-fledged MMORPG?

However, this is no easy task and the long years of gestation are indicative of the work and high risk that goes into a triple-A MMORPG. There is no exact science to this, no rule-book that will manage to please every single one of us. Those who love the ways of the old games, such as World of Warcraft, will probably be the first to scoff at any decent attempt at innovation – right now I’m sitting here, thinking about the huge risk that Bluehole is taking with Ascent: Infinite Realm and its focus on aerial combat. But if we keep getting the same games with the same stale questing, static combat and endless grind, then we would do better to stick with those Chinese auto-path, auto-combat ‘games’ where your character reaches level 20 in five minutes.

The current indecision and debate with the business model also has a saying in all of this. When designing your MMORPG, you must consider early on if it will be free-to-play, buy-to-play or with a monthly subscription (as Ashes of Creation is going to be). This needs to be carefully addressed as it could make the difference between a successful, fair game, or a cash shop mess that will destroy whatever efforts were made prior to its release. There is no consensus over this at the moment and Bless Online is a good example of the power that a business model can have in a game – after the initial Early Access sales, the player base decreased radically and the game would soon be dead had it stayed that way – hence the swift and predictable switch to free-to-play in October 2018, in the hopes of attracting more players to make for a sustainable community. There is a significant “I’ll play it when it goes free-to-play” crowd, but whales shouldn’t be overlooked when it comes to the profitability of an MMORPG.

Triple A MMORPGs Bless Online

Not all is grim, however. These may be high demand and low supply times indeed, but they also feel like a transition phase. With the boom of mobile gaming, everyone wanted to have a go but many developers seem to be once again focusing on the PC platform, hopefully working on an MMORPG. I know that some of them are.

Do you really think that there is no subtext to the recent “Should we build an MMO?” tweet by League of Legends makers Riot Games? What about the upcoming MMORPG based on Tolkien’s Middle-earth in development by Athlon Games? Amazon Game Studios is creating the intriguing New World, Cryptic Studios is developing a Magic: The Gathering MMORPG, and here’s hoping that Nexon’s anime MMORPG Peria Chronicles will finally become a reality in 2019.

To the developers who want to tackle the highly risky but oh-so-profitable task of creating a full-fledged, triple-A MMORPG, I have this to say: do your own thing. Every single one of us is a player, every single one has an opinion and a lot of us are just plain wrong. Do not abide by the lowest common denominator, reach for the skies and pour your hearts into it. If you are willing to take the risk and invest the money, you need to go the distance and deliver the best damn game that you can.

Who knows, maybe the next World of Warcraft is in the making as we speak?

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RUMOR: Disney and Lucasfilm Seeking New Publishers for Star Wars Games

Okay. We’re going to need a lot of tinfoil for this one. Like, a lot of it. Everyone suitably wearing their hats? Good. There’s some scuttlebutt out there that seems to suggest that Disney and Lucasfilm Ltd. are shopping around for new Star Wars game publishers, potentially in direct response to continued fan reaction and assumed mishandling of the franchise in EA’s hands.

star wars game publishers

According to anonymous sources, Disney and LFL execs have reportedly pulled EA “to the principal’s office” with regards to the state of the Star Wars license in the publisher’s care and have been shopping around for other publishers to handle games for Star Wars, with Ubisoft and Activision being name-dropped in the report.

The timing seems to suggest that the event in question is recent, but also references reports in November about Disney strong-arming EA’s decision to remove loot boxes from Star Wars Battlefront 2, which could mean that the search for different publishers was part of Disney’s tactics to bring EA back in line.

Incidentally, there’s word that Disney is capable of looking for alternate publishers despite having a contract with EA as a result of a clause that would let the Star Wars license change hands “if certain standards/conditions weren’t being met”. Whether the agreement between EA and Disney has such a clause has not been confirmed.

These all directly fly in the face of statements made by EA CEO Andrew Wilson during a fiscal earnings call, where he stated that EA and Disney have “a tremendous relationship” and denied reports of Disney’s attempts to step in.

It is vital to note that the sources in question were not able to provide specifics, with the only vetting of said sources being that they have been “trusted in the past”. So be sure to include some salt grains along with those tinfoil hats.

Our Thoughts

It’s not what one would consider to be the most solid of sources, but it’s also hard to ignore EA’s impact on Star Wars games in recent months, with entire world governments pointing at the publisher’s loot box practices as a means to push gambling on children and calling Battlefront 2 “a Star Wars casino”. Having an IP owned by Disney associated with harming children certainly goes against the very identity of Disney, so it’s not too off the wall that they would be displeased. If more firm details arise from this story, we’ll be sure to report them ASAP.

Source: Cinelinx

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Kakao CEO: Ascent: Infinite Realm’s Success is a Path to Global Growth

Some days you feel like the weight of the world is on your shoulders. That might be the case for Ascent: Infinite Realm as Kakao CEO Min Kim from Kakao’s Europe division is eyeballing the upcoming MMO’s Western success as a vehicle for the company to become a more recognized brand outside of Korea.

kakao ceo

In an interview with GamesIndustry, Kim admitted that Kakao’s aspirations for expansion didn’t really take root until the Western release of Black Desert Online and its subsequent success in the market, which saw the title rake in $300M in September last year.

To that effect, Kim is looking to A:IR as the stepping stone to not only growing Kakao Games recognition, but also as a means for the company to acquire Western developers – a path that would be new to them as they have only worked with Korean developers up to this point.

“Once A:IR is successful, I want to consider acquiring developers in Western markets. It is not the moment right now to mention what kind of company we want to be, or the same as that level [Blizzard]. I want to set up the basics as a global publisher first, to focus on sustainability. The most important thing is that the fundamental elements as a global publisher should be set”

By the same token, Kim also stated that acquisition is perhaps easier said than done, as previous Western developers were considered but got acquired by other companies. To that end, creating an IP specifically for Western audiences may be the only way to go.

Incidentally, the interview mentions that Ascent: Infinite Realm isn’t targeted for a full release until sometime in 2019.

Our Thoughts

It should be noted that in the interview, Kim did seem to be a sort of dam between the accelerated plans of Kakao’s Korean headquarters and the Western world, so we don’t suspect that A:IR’s devs are being pressganged to make the game release as fast as possible. Regardless, it would appear that Ascent: Infinite Realm’s release to the West has perhaps more stakes going for it than initially thought.

Source: GamesIndustry

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Hawaii Lawmaker Working on Anti-Loot Box Laws

It was mentioned during a press conference before, but now it appears that Hawaii lawmaker Chris Lee is putting his words into a form of action. A video released by Rep. Lee shows the initial steps being taken to ultimately create anti-loot box laws that would prohibit the sale of games with loot boxes to people under 21.

anti-loot box laws

The video shows Rep. Lee working with Rep. Sean Quinlan of Hawaii and one of the state’s attorneys to put together bills that would stop the sale of games with any “predatory game mechanics” to minors and would address algorithms that finds players likely to spend money and lower their chances to get a desired item – a practice that, by Lee’s own admission, is a third-hand account and probably is referencing an “exploratory patent” filed by Activision.

In the video Lee reiterates that writing the one law might be enough to get the game industry to regulate itself. “If you’re taking away that share of the market from the gaming industry, they might change games across the board for the better,” said Lee. Rep. Lee also stated in the video that he hopes this piece of legislation will give other interested states a starting point to draft their own bills.

Finally, Lee calls on others to write their local legislators and voice their support of anti-loot box bills and has even created a letter that interested parties can copy.

You can watch the complete video below.

Our Thoughts

We agree; it’s certainly time to step up. The outcry against loot boxes has, across the board, seemed to simmer down just a touch and so it’s important for those that feel strongly about the issue to not relent on the matter. We certainly hope Rep. Lee’s legislation gains some traction and that game devs and publishers are paying close attention.

Source: PC Gamer

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