MMO Money: Huge Disappointment for Tencent

Seed has raised more than 8 million dollars for development of the unique MMO, while Niantic has acquired another game studio. Fortnite is still making more money than anyone could ever count, but a massive mobile game from China has turned into a huge disappointment for Tencent. Plus, we have more lootbox news, which includes some very interesting statistics that show most players don’t care about them at all.

 

Klang Raises $8.75 million for space MMO Seed

Space colony MMO Seed has an extra $8.75 million to work with for the development of the game thanks to recent fundraising efforts. This brings the total the studio has raised for the game up to $13.95 million, thanks to a previous funding round in March. Speaking about the latest funding Klang’s CEO Mundi Vondi said: “We’re truly humbled to have secured the Series A for the development of Seed, a project that we believe will play an integral role in the next generation of social simulations. We are honored to share our vision with Northzone, and are more excited than ever to tackle this very ambitious project.”

 

Fornite Earned $1 Billion From In-Game Purchases Alone

Yes, Fortnite has become one those topics we’re covering every week and starting next week we’re going to lump all the Fortnite news into one section. This week thankfully we only have one thing to talk about, and that is that Fortnite has earned 1 billion dollars just from in-game purchases. Monthly revenue for the game has done nothing but climb since October as shown by the graph above. In May viewers watched almost 700 million hours of battle royale content, 83% of that was Fortnite. More on Fortnite coming soon…

 

“Coming Soon” No Longer Allowed in German Preorders

star citizen like eve online

A recent court ruling in Germany may have a ripple effect around the world as it was declared that using vague terms like “coming soon” in preorders isn’t allowed. Part of the ruling said: “in the view of the judges, this information was too vague to comply with the statutory information obligation of the providers. According to this, potential customers should know before the end of the ordering process how long the delivery time will be at the maximum.” Exactly what this means for the future of gaming isn’t clear yet but it could possibly put an end to vague release dates, Kickstarter claims, and much more.

 

Video Game Kickstarters Equal Almost $10 million So Far in 2018

ICO Partners have put out their regular report on Kickstarter campaigns for video games which shows that video game Kickstarters have brought in $9.82 million so far this year. That’s up just $400,000 from the same period last year. This was in fact done with fewer Kickstarter campaigns than in previous years, just 723, the lowest first half of the year since 2012. Kickstarter is generally seeing a bit of a slowdown when it comes to video games, as people are learning how difficult it is to put a successful campaign together.

 

Niantic Acquires Seismic Games

Just last week we were talking about Pokemon Go creators Niantic acquiring a company and now here we are with another, their fourth acquisition in recent months. This time they have acquired Seismic Games, the makers of Marvel Strikeforce and VR experience Blade Runner: Revelations. John Hanke, the CEO said this in a statement: “We recently gave a peek under the hood of the Niantic Real World Platform, and we see the addition of Seismic Games as a significant accelerant for realising our vision of an operating system that bridges the digital and the physical worlds. At Niantic, we’re committed to our mission of motivating people to exercise, be social, and discover new places. We’re confident that Seismic Games will help us deliver on that mission – faster, and better.” All of these acquisitions are putting Niantic in position for a lot of awesome in the future which makes you wonder, what are they coming up with next?

 

Mobile Game Spending Up in the First Half of 2018

Mobile game revenue is up 19% in the first half of 2018 in the App Store and Google Play. App Store spending was about $6 billion higher than Google Play. Combined, the estimate is that global spending on the two platforms was at $26.6 billion. That’s a 19.1% increase year on year. One thing that may have an impact on Google Play’s revenue is that it isn’t available in China, at all. Also, many Android apps are available in third-party stores which isn’t the case for iOS. The top grossing games across both stores were Honor of Kings, Monster Strike, and Fate/Grand Order. But, PUBG mobile was the most downloaded. All of this just goes to show that mobile gaming is here to stay and there’s a lot of money to be had.

 

Arena of Valor Revenue Passes $3 million in 7 Months

Arena of Valor

Its only been 7 months since Arena of Valor launched in the west and in that time they’ve brought in $3 million. For any other game that would be fantastic, but Arena of Valor is Tencent’s Honor of Kings, one of the most successful mobile games at the moment. The Chinese version of the game has 200 million players and in 2017 brought in $1.9 billion in revenue. The founder of Sensor Tower, the intelligence firm who released this information spoke about the launch of the game and why they think it’s underperforming. “Arena of Valor launched in the US just as the battle royale craze was beginning to heat up, with Fortnite hitting mobile three months later-and subsequently dominating the time and wallets of the very users Tencent’s MOBA is gunning for. Undeterred, the publisher has continued to build out the game in the West, adding new modes, content, and characters, most recently the eagerly anticipated debut of Batman as a playable hero.” All fair points…also, Batman will be playable? Where do I sign up?

 

Lootboxes

A patch was introduced to CS:GO for Dutch and Belgian players that locks containers, making it so you can’t open lootboxes in those countries. In June, Valve disabled item trading in the Netherlands in response to the threat of prosecution from the Dutch Gaming Authority. At the time they also said they hoped to fight it, now it seems that item trading is back but lootboxes may be gone for good.

A survey of gamers from the UK, France, Germany, and Spain has revealed that the majority of gamers are either unaware of lootboxes or largely indifferent to them. According to the survey, only 27% of gamers in these countries are aware of lootboxes. When it comes to general consumers that number drops to 17%. When asked if lootboxes are a positive influence on the games industry, 29% had no opinion while only 25% thought they don’t. In question after question, the respondents showed they had very little opinion on lootboxes at all. It would seem that those talking about them and thinking about them often are in the vocal minority.

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MMO Money: Mobile Revenue is Breaking Records

Quarterly report season, it’s exciting and a little bit brain melting. In between it all we’ve got other business news to talk about too including esports betting and more lootbox drama. We also get a real-world example of what can happen to a company’s stock when an embargo is broken and false information is released. There’s one theme that runs throughout this article, mobile revenue is breaking records all over the place. There’s a lot of information to digest in this week’s MMO Money so grab a drink, maybe a snack too and sit back for a wild ride. It all ends with more lootbox talk from Begium, Guild Wars 2’s game director, and everyone’s favorite…EA.

 

PUBG Mobile Revenue Only 1/3 Fornite iOS Revenue

Mobile Revenue is Breaking Records

While PUBG mobile and Fortnite iOS came onto the scene at roughly the same time back in March, PUBG has only started to monetize in the last week. The revenue for that first week isn’t amazing. In fact, it’s one third the revenue Fortnite got in its first week being on iOS only. For those who don’t know, PUBG is available on both Android and iOS. Fortnite generated 3.7 million dollars its first week on mobile compared to PUBG which comes in around $1 million.

The report from Sensor Tower also states that Fortnite beat out PUBG with fewer players, 3.7 million downloads vs 22 million. But it doesn’t show how many of those 22 million downloads since launch are still active PUBG players, so this isn’t really a fair comparison to make. The 3.7 million Fortnite players would have all been active at some point in that week simply because it was the very first week, and not a couple of months later. Randy Nelson, Head of Mobile Insights at Sensor Tower attributes the differences to the means of monetization. “There’s also the possibility that the way Epic Games has structured its purchases may be giving Fortnite a leg up on its biggest competitor,” he said. “It offers limited-time costumes and set daily items that players can purchase outright, as opposed PUBG Mobile’s primary use of loot boxes that produce random (and often duplicate) items when opened by players.”

 

Activision-Blizzard Q1

They’re winning all of the money. End of story.

Overwatch Retribution Event - McCree and Reaper

Kidding…well sort of. They really are winning all the money. Activision-Blizzard had a net revenue of $1.97 billion for Q1, that’s up from $1.73 billion for Q1 2017. Net revenue from digital channels were at an all-time quarterly record of $1.46 billion. In Q1, Activision Blizzard had 374 million monthly active users, 38 million of those coming from Blizzard games. Preorders for WoW’s Battle for Azeroth expansion are ahead of where they had originally forecast.

The Overwatch League has strong viewership globally, reaching millions of people every week. As a result of the league and the upcoming playoffs, this summer there is increased engagement with the franchise. This means more people are playing and watching for longer than previously.

On the mobile side of things, King has had its highest quarterly net bookings in history. That’s money made from merchandising, products sold, licensing fees, and so on. This quarter King also had 2 of the top 10 highest-grossing titles in US mobile app stores for the 18th quarter in a row.

Generally speaking, things are great for Activision-Blizzard, so much so that they’re raising their outlook for the full year.

 

German Mobile Game Revenue Seeing Explosive Growth

Thanks to the many articles we’ve done covering the 2017 games business scene we know that mobile is still growing in a massive way and is already really dominating the gaming industry. But there’s one market in particular that is seeing massive, unexpected growth: Germany.

The German Games Industry Association reported on data from market research company GfK that in 2017, mobile gaming revenue grew faster than all of the German gaming market. Mobile gaming sales rose 21% versus the overall market which saw only 15%. Most of the revenue came from in-app purchases which totaled €481 million ($569 million). Just to put all of this in perspective, in-app purchases have more than doubled since 2014. It also doesn’t look like things are going to slow down any time soon. What this does show is that Germans are a fantastic audience for mobile games, unlike most of Europe who seem to prefer to keep a tight hold on their wallets.

 

Want to learn more about the games industry in 2017 check out these articles:

2017 Online Games Financial Review
2017 Games Industry by the Numbers
2017 Games Industry Revenue

EA Celebrating Record Year

It’s good news for EA, despite all the very public lockbox drama they had throughout the last year. Game sales are actually down, but live services are picking up the slack and now make up 40% of the publisher’s income. For the full year, EA’s net revenue was up 6.2% to $5.15 billion. But the news that most people were really hoping to hear was about Anthem and EA did not disappoint, saying that Anthem is set to ship in the last month of the last quarter of the year, that gives it a launch date in March 2019. During the call, they also talked a bit about lockboxes, but we’ll go into more detail on that in the section dedicated to all things lootbox.

 

Dow Jones Reporting Problem

Dow Jones News Service broke embargo and false information was released ahead of Activision-Blizzard’s quarterly report call. This information caused Activision-Blizzard’s stock to tumble, as well as stock for EA and Take-Two. Activision-Blizzard suffered a 6.3% drop, but within a couple of hours the correct information was published and in the end, Activision-Blizzard closed down 2.3%. Afterward, Dow Jones issued a statement saying, “We regret our error as well as inadvertently breaking the embargo. We have issued a correction and are reviewing our processes.”

 

Tencent Q1

Have you had enough with all the good news yet? Well here’s some more for you. Tencent is reporting a 48% increase in revenue year on year. Most of this has been driven by mobile games and social platforms. Total revenue for the quarter was $11.69 billion with operating profit at $4.88 billion. Smartphone game revenue increased 68%. This includes both mobile games and social games on their social media platforms like QQ, which has 805.5 million active users. Facebook is at 2.2 billion, just in case you’re wondering.

On the PC gaming front, revenue remained fairly flat year on year. But with new titles expected in the coming months, Tencent has said this will change. The company also attributes the lack of significant revenue increase on more and more people making the transition to mobile gaming. Tencent is going to be responsible for releasing PUBG and Fortnite to China, assuming they get government approval. They’re also going to publish Ubisoft mobile and PC games in China. So, the future is looking bright for this monster of a company.

 

Boss Key Saga

By now you’ve almost certainly heard about the saga of Boss Key. The company shut down this week just a month after putting a new game up on Steam Early Access. If you haven’t heard all of the drama, or you haven’t seen the concept art from the games they never got to make there’s an entire article on the Boss Key saga.

 

Pearl Abyss Q1

Pearl Abyss had a record first quarter thanks to mobile games. Are you starting to see the same pattern we are? Net profits are up a massive 82.9% compared with the same period last year. Much of their success is thanks to releasing Black Desert Mobile in Korea. North America and Europe account for 56% of Black Desert Online’s game sales. Coming up, the company is working on MMOFPS Project K, casual mobile MMO Project V, and Black Desert Mobile is going to expand to more regions of the world. You can expect it to reach the West sometime next year.

 

Kakao IPO

Black Desert Online

Speaking of Black Desert Online’s performance, we need to talk about Kakao Games, the publisher of BDO in the west. They’re preparing an IPO on the KOSDAQ in Korea. If it passes the screening required, it will most likely go public by the end of this year. According to Samsung Securities, Kakao is worth an estimated $1.4 billion. In addition to BDO, they’re also responsible for publishing PUBG in Korea and developing mobile games.

 

NCSoft Q1

All of NCSoft’s games are down this quarter with the exception of Aion. Guild Wars 2, the company’s most popular game in the west saw a massive, though entirely expected drop. Q4 2017 is where all the revenue for the game’s last expansion Path of Fire was at, so while there was a 32% drop quarter on quarter, year on year there was actually a 66% increase.

During the investor call, NCSoft admitted that Blade & Soul II for mobile has been delayed until 2019 because it didn’t meet expectations. It has a new team and a redesign which is the same thing they did for Lineage Eternal.

 

Nexon Q1

Finally, we’re at the last quarterly report that has been released as of this moment, Nexon. Much like many of the companies already mentioned in this article, Nexon has a strong showing this quarter with $827 million in revenue. That’s up 21% year on year. One thing that really makes them stand out from other companies is that most of its business, 84% of it in fact, was on PC. The vast majority of Nexon’s earnings came from China (67%) and Korea (22%) while North America accounted for just 4%. Later on this year in the west we can expect to see Durango, Maplestory 2, Maplestory M, and Final Fantasy XI mobile.

 

Esports

You can expect to see esports betting blossom thanks to a ruling by the US Supreme Court. They effectively overturned the 1992 Professional and Amateur Sports Protection Act which banned sports betting in all but a few states. The Supreme Court ruled that PAPSA violated the Tenth Amendment. What does this mean for esports betting? It means we’re going to see it a whole lot more. DraftKings have already got plans to move into betting for sports and esports.

In other esports news Quarterback Inc. has raised 2.5 million dollars in its initial seed funding round. The funding will go towards continued development and growth of Quarterback’s esports gaming platform. The seed round was back by Bitkraft Esports, Crest Capital Ventures, Deep Space Ventures, and UpWest Labs.

 

Lootboxes

Finally, we end this article as we always do with a look at what has been going on around the lootbox controversy in the last two weeks. The biggest news has been that the Belgian Gaming Commission released their full report on the controversy. The report itself is 25 pages long and in English, if you want to give it a read, but the most important thing to take from it is that they recommend criminal prosecution being initiated. Another recommendation that they give is age verification and banning the sale of games featuring loot boxes to minors. Wow.

Gamasutra posted an interview with Guild Wars 2 game director Crystin Cox from GDC that touched on the lootbox controversy that is well worth a read as she had a lot to say. She had a hard time defining what an ethical, non-painful lootbox experience might be like and she also said she hopes the government doesn’t get involved in regulation. Guild Wars 2 was specifically mentioned in a recent article here on MMOGames talking about a site that explains microtransactions for games. Guild Wars 2 has frequently been called out by players for their lootbox practices.

Lastly, as promised there is EA news to talk about. EA is adamant that lootboxes aren’t gambling at all. Why? Well, according to EA CEO Andrew Wilson, it’s because players always get a specified number of items and there’s no way to cash the items out or sell them for currency, real or virtual. This argument is a bit like Santa promising you’ll get 5 things for Christmas and on Christmas morning finding out that 3 of them are lumps of coal, one is a gum wrapper, and the other is reindeer droppings. You still got something though!

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