Millennial Gamers Spend Big and Play a Lot of Games

Millennials are all adults now, the youngest of the generation is 22 years old while the oldest is 38. Do you know what we’re still doing? Playing video games, that thing our parents always told us was a waste of time. Well jokes on you Mom! All kidding aside, games and gaming related media are consumed by millennials at an amazing rate and a new report from Superdata dives into the numbers.

Two out of three millennials in the US are gamers and 71% of those gamers are watching gaming video content like livestreams and pre-recorded videos. In comparison, within the same group of gamers, 54% are employed full-time, 46% have children, and 43% have a bachelors degree or higher.

As for gender division between gamers, despite what some may say, it’s very close to being an even split. 48% of all millennial gamers identify as female, 50% as male, and 2% listed other or preferred not to say. Women are the majority when it comes to mobile gaming, 54% of millennial mobile gamers in fact. But, women aren’t far behind on the other platforms, 43% of PC and 41% of console players.

While many gamers complain about mobile games it would seem that we are in fact still playing them. 7 in 10 millennial gamers will play a game on a smartphone at least once a month. Mobile gaming is, in fact, more popular than both PC and console. 60% of millennial gamers are also playing on consoles, though that may not always be their first choice. Meanwhile, PC gamers make up just 30% of the audience.

Millennials who are playing on mobile devices are spending more time each week playing, an average of 9.7 hours a week. Though this playtime is broken up into multiple sessions throughout the week. Millennials spend 9.6 hours a week on average playing console games and just 7 hours a week on PC.

One big trend we’ve seen in millennials is they are playing to hang out with their family and friends online. Let’s be honest with ourselves for a moment, we all know it’s more friends than family. 70% of millennials are playing multiplayer games. That number goes up to 72% for Gen Zers. For Gen X it’s just 43%.

 

Gaming Video Content

Overwatch BCRF Charity Event - QueenE Stream

Chances are if you’re a millennial gamer you watch gaming related video content online. That’s because 71% of us are doing it. For Gen X and older gamers that number is just 43%. Meanwhile, 77% of Gen Z gamers are watching gaming content. 24% of millennial gamers are watching video content at least once a day. 35% watch once a week or less, and 39% watch 2 to 6 times per week. 53% of millennial gamers watching gaming content watch for less than an hour in each session. 26% watch it for 1 to 2 hours while 22% will watch for 3 or more hours in one sitting. Millennial gamers are sitting at 97 minutes on average each session, compared to Gen X and older who are watching for 73 minutes and Gen Z who are watching for 106 minutes. 38% of Twitch viewers say they’re watching their favorite streamers because they can learn strategies from top players while 36% say that they watch streamers because they enjoy the personalities of the creators.

 

Spending

This brings us finally to spending. It should be noted before we get started that these numbers are averages which means that not every millennial gamer is spending this much. In fact, much of the gaming industry is driven by whales, a small select group of people willing and able to drop large amounts of money on games and game-related content. Because we were last looking at gaming video content, lets continue there. Millennial gamers spend more on donations to their favorite creators than they do subscriptions. On average they give $29 a month in donations and $25 in subscriptions. In doing this, they actually outspend Gen Zers and Gen X and older in donations, though we do spend less than both on subscriptions.

On average millennials spend $112 on games every month. That’s $20 more per month than Gen Z and almost twice as much as Gen X who spend a measly $59 a month. It shouldn’t come as a surprise at all that millennials are spending more online than they are on physical games. $72 a month is spent on digital downloads and game subscriptions compared to $39 a month in stores. They also spend $22 every month on in-game content which includes skins and lootboxes.

So, what can we take away from all of this? Well, to quote the conclusion of the Superdata report, “Gaming isn’t an activity Millennials are about to grow out of anytime soon. They are set to be the first generation of lifelong gamers, and media firms and marketers need to take note.” So the next time someone in the office makes fun of you for playing games because “that’s something only children do,” show them this article. Millennials are driving the gaming industry, even if we can’t afford to buy a house. Thank you whales.

All of these numbers came from a survey that was conducted in February 2019 by Superdata.

Now I’m curious! Are you a millennial? How do you stack up against the average? Let me know down in the comments. For me, as someone who mostly plays MMOs, I spend more on in-game items than I do on new games. I also don’t watch streaming, it just doesn’t connect with me. I do enjoy watching Youtubers talk about gaming but I wouldn’t say I’m a regular in that department. As for how many hours spent gaming a week…. let’s just say that 20 hours would be a slow week for me. Yeah, I play a lot of games, but my husband is right there with me while I do it. Couples who slay together stay together.

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MMO Money: A Week of Lawsuits and Nintendo Being Awesome

Lawsuits abound this week in the online gaming world with both Activision Blizzard and Epic Games the focus of new lawsuits. Meanwhile, Nintendo gives us a much-needed breath of fresh air with how they treat gamers and their employees. Bidding for Nexon is set to begin in April with the list of bidders reduced to just 5. Find all of this and more in this week’s MMO Money.

 

Nexon Shortlists Five Bidders for the Company

There has been quite a lot of interest in Nexon recently from major companies around the world including Disney, EA, Comcast, Tencent, and many others. But, Nexon has now lowered that list to just 5 bidders. Those five include Tencent and Kakao Corp. along with three private equity firms, Bain Capital, MBK Partners, and an unidentified firm. Quite significantly Netmarble isn’t included in this list. Netmarble had been putting together a consortium of Korean firms to bid together, believing that selling to an overseas company will damage the local games industry. In fact, this may be why we don’t see any Western-based interests in the shortlist. Bidding for the 98.64% share of Nexon that is expected to be worth as much as $13.3 billion is expected to begin in early April.

 

Source: Games Industry

 

Nintendo Asks Mobile Partners to Stop Players From Spending So Much

In a time when it seems like all game companies are after is your money Nintendo comes out and gives you a little bit of faith in the industry once more. The company is concerned with its self-image and has asked some of its mobile game development partners to adjust the microtransactions in their games so players are less likely to overspend. A source at CyberAgent, who owns the developers of Dragalia Lost told the Wall Street Journal, “Nintendo is not interested in making a large amount of revenue from a single smartphone game. If we managed the game alone, we would have made a lot more.”

This also comes less than a week after a recruitment page for Nintendo shed some light on what it’s like working for the company. The average salary is ¥9.03 million, that’s $80,000, employees can potentially get bonuses in June and December plus a pay increase every April. The average workday at Nintendo is seven hours and forty-five minutes long. As if all of that doesn’t already sound amazing full-time employees stay at the company for an average of 13.5 years. Anyone familiar with the games industry in the West will know that developers tend not to stay in one company for very long. If you’re interested in knowing more about that check out this article from Polygon.

From a personal point of view both of these pieces of news make me more likely to look at Nintendo games and support what they’re doing. Their views and the way they treat their employees is a breath of fresh air in the games industry today.

 

Source: Wall Street Journal, Games Industry

 

 

Vivendi Sells Remaining Ubisoft Shares

Ubisoft Joins Forces With Horror Movie Studio

Its been almost a year since Vivendi announced it was going to stop trying to acquire Ubisoft and finally the remaining shares it had in the company have been sold. The remaining shares it had was about 5% of the company, €429 million.

At one point in time, Vivendi owned a 27.3% stake in the company and though its attempts to own the company completely failed they did bring in about €2 billion, a capital gain of €1.2 billion. Though they failed to achieve their original goal you can hardly call the entire thing a failure. I’d love to fail my way to €2 billion, that’s about $2.2 billion USD. Vivendi has stated that they will honor their agreement and not buy shares in Ubisoft for at least 5 years.

Vivendi had previously owned Activision Blizzard but it sold the company to an investment group led by Bobby Kotick and Brian Kelly for $8.2 billion. That deal pushed Vivendi out of the games industry for 3 years until it bought its way back in with a hostile takeover of Gameloft.

 

Source: Games Industry

 

A New Law firm is Encouraging Shareholders to Sue Activision Blizzard Over Bungie Split

Another law firm is inviting shareholders to join in a class action lawsuit against Activision Blizzard, accusing the company of misleading shareholders over the end of its partnership with Bungie. The firm’s loss submission form makes the following claims:

Activision failed to disclose that “the termination of Activision Blizzard and Bungie’s partnership… was imminent”

That this termination “would foreseeably have a significant negative impact on Activision Blizzard’s revenues.”

And as a result “Activision Blizzard’s public statements were materially false and misleading at all times.”

Activision Blizzard previously said that the split from Bungie was because Destiny 2 failed to meet financial expectations. But in a recent SEC filing, the company recognized $164 million in revenue from Destiny for 2018 as a result of the split.

This comes at a time when shareholders for Activision Blizzard aren’t too happy with the company. They’ve had to warn investors that cutting hundreds of jobs (800 in total) may damage the company. They even went so far as to say there can be “no assurance that our business will be more efficient or effective” than it was before this new strategy.

Why can’t you be more like Nintendo?

 

Source: Games Industry

 

Man Sues Epic Games Over Predatory Loot Boxes

While we’re on the topic of lawsuits we should mention that Epic Games is being sued, yet again. This time though it isn’t because they used a dance in their game, instead it’s over allegations that Epic Games has engaged in predatory schemes with loot boxes in Fortnite. They allege that Epic intentionally designed Save the World to hinder player’s progress if they didn’t spend real money. They also say that Epic has “made a fortune on in-game purchases, preying in large part on minors who are especially susceptible to such predatory tactics.” The lawsuit accuses Epic of violating California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law.

What the lawsuit doesn’t mention though is that since January Epic Games now shows the contents of loot llamas in Save the World before they’re purchased with V-Bucks. So it is possible that the lawsuit won’t go anywhere since they’ve already made changes to the areas that the lawsuit covers.

 

Source: Games Industry

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MMO Money: 6 Percent Drop in Spending Already This Year

If we’re being honest right out of the gate, the news this week isn’t great. The industry is shrinking a bit as was previously predicted and of course, we have to talk about all the layoffs going on in the games industry. There is a little bit of good news in the middle there though so be sure to read the whole way through for your weekly look at the MMO games industry.

 

SuperData Reviews January

While we may be about to enter the third month of 2019 we are now getting our first look at the first month of the year for the business side of gaming and it isn’t looking good so far. We started 2019 with a 6% drop in spending on all platforms year over year. Premium PC gaming had the biggest drop with a 29% decline.

Fortnite revenue dropped 48% month over month in January, but sales are still up year over year. Of course, a drop from December to January is somewhat unsurprising since December would have had the added benefit of the holiday season when people have more time off to play games.

Finally, a game we don’t get to talk about much anymore these days, CSGO, was in the Superdata report. You may recall that the game went free to play in December. While this transition has been great at bringing in new players, 8% growth year over year in January, this hasn’t translated into more revenue. Digital revenue is said to have fallen considerably year over year but exactly how much isn’t stated.

Taking a look at the top 10 grossing titles what is immediately obvious is the drop for Fortnite both in PC and Console. In the December report, Fortnite was in third for PC and first for console. In just one month it has dropped 2 places on PC and one on console. In both cases it isn’t being replaced by a newer game, FIFA 19 is the newest of the games above Fortnite and it came out in September. Meanwhile, what would have previously been considered Fortnite’s biggest competition, PUBG held steady on PC and dropped off the chart entirely for console. It’s also interesting to see DOTA 2 back on the list, having replaced Hearthstone (West) in the tenth position.

These charts will be very interesting to follow throughout 2019 to see if Fortnite continues to drop and if any newer game can climb its way to the top. The way things are looking right now we may well see those predictions of a shrinking gaming industry come to pass.

Source: Superdata

 

 

Tencent and NetEase Non-China Mobile Revenue Up 505%

Knives Out

Right, so bear with us on this one. Tencent and NetEase, two big players in the mobile gaming world saw their combined revenue last year go up 505% outside of China. This is important because it went a long way to helping the two companies get through a period that lasted most of the year when no new games could be released in China. Much of this was driven by one game, NetEase’s Knives Out, a game that has enjoyed massive popularity in Japan. Tencent’s biggest hits were Arena of Valor and PUBG mobile. So, while things looked very concerning for Tencent in 2018 with the 9-month freeze on new games it would appear that the two companies weathered the storm pretty well. With that crisis behind us, we’re sure that Tencent and NetEase will go on to have an amazing year this year. Assuming China keeps approving new games (more on this later).

All of this data came from a report from IHS Markit who also reported that mobile game revenue from Google Play and the App Store grew 5% year over year to $34.3 billion. While this growth is great, it is actually less than we’ve been seeing in previous years. The trouble with China certainly played a role in this but it wasn’t the only factor. The mobile gaming market in established areas has generally reached maturity, as has the adoption of smartphones. Plus, we’ve seen a decline across the industry that has had an impact on every aspect of the gaming industry.

The report also goes in depth about Battle Royale games but that’s something that is better suited for our Battle Royale column. So, expect to see more on this later in the week.

Source: IHS Markit

 

China Stops Game Approvals to Work Through Backlog…Maybe

There have been reports that China has stopped accepting games to be approved while it works through a backlog of games awaiting approval, according to an anonymous gaming executive in China. However, according to statements made by NetEase’s CEO William Ding, this may not actually be the case. During the Q4 2018 earnings call the following was said, “There were market news and rumors yesterday talking about alleged game suspensions. We would like to say that we do not see that. Some provisional and local regulators have modified the format of material submissions, but we do not interpret that as a shut-down of new game approvals.”

So, has there been a stop? The only way to know for sure is to wait and see if any new games are released in China or not.

Source: Games Industry

 

The Layoffs

Finally, we need to talk about the layoffs. Blizzard, Activision, GOG, Razer, ArenaNet…just a few of the names to have big profile layoffs in the last few weeks. Many of these layoffs are happening because of canceled projects, but we here at MMOGames wonder if the projections of decline this year are also having an influence. Are these projects being canceled because it has been projected that the games industry will shrink this year and as a result companies are bracing for the impact? As a result, is that prediction, in fact, a self-fulfilling prophecy? Will the industry shrink because companies that are otherwise very healthy and performing well are holding back? Or is there something more going on behind the scenes that we haven’t seen yet? I’m not saying a government conspiracy…but…something something Area 51, Flat Earth, Illuminati.

For all those who have lost their jobs recently, we hope you find yourself landing on your feet quickly and wish you all the best. We can’t wait to see what projects you get attached to next, but if you do decide to leave the games industry it is completely understandable.

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MMO Money: Analyst Predicts First Video Game Decline in 24 Years

It looks as though Runescape creator Jagex may be for sale in the near future. Facebook released documents that are VERY anti-consumer. We also got a look at the December 2018 revenue chart for games, but the biggest news this week was an analyst who predicts the game industry will actually decline in 2019, the first time since the 90s. Find all of this below in this week’s MMO Money.

 

Jagex Possibly For Sale

Just a few years after acquiring Jagex, Fukong Interactive may be getting ready to put it up for sale. This comes at a time when Jagex is posting its best financial results ever, so the problem isn’t Jagex. In fact, it is Fukong Interactive that is the focus as they’ll be undergoing some restructuring. In a statement issued to GamesIndustry.biz Jagex Director of Communications, Rich Eddy, had the following to say.

“Fukong Interactive has issued a regulatory statement to advise the Chinese financial market that it is planning a major reorganisation and is considering sale of assets, with the partial or full sale of Jagex as a potential option. A sale of assets is one of multiple routes Fukong Interactive has available as it restructures and, by making this initial statement to the market, Fukong can now begin exploring such options.

“Whatever the outcome of Fukong’s restructure, Jagex continues to execute on our short-term and long-term strategies for the RuneScape franchise, which has seen five years of consistent growth, delivered lifetime revenues of $1 billion, and now has player membership at an all-time high driven by our living games approach and a successful first move to mobile with Old School RuneScape.

“Jagex has never been in better shape and the year ahead will see further investment in the organisation as we expand our talent base to create and deliver significant new content for our players, build on our Jagex Partners third-party publishing initiative, in addition to increasing our presence in mobile sector with RuneScape itself.”

Source: GamesIndustry

 

December Charts

SuperData is back with the final monthly game chart report for 2018, and it looks like December was a good month for Blizzard as they once again entered the charts. However, worldwide digital spending dropped 2% to $9 billion. In the mobile chart Pokemon Go continues to hold strong, now second only to the massive Eastern hit Honour of Kings. World of Tanks makes it on the charts for PC. Grand Theft Auto V continues its slow decline on console in the number six position on the chart. While PUBG and Fortnite had massive successes that can’t be ignored CS:GO is worth talking about. It’s now in its second month as a free-to-play game and has hit a new high for monthly active users. SuperData also estimates that the game, as a free to play title, made $49 million between November and December.

Source: SuperData Report

 

Analyst Predicts First Video Game Decline in 24 Years

Notable analyst Pelham Smithers has predicted that the video games industry will see its revenue decline in 2019. While speaking to Bloomberg he stated that his firm has predicted the games industry would decline 1% this year. That may not seem like a lot, but it is certainly noteworthy because it is the first time there has been any decline in the industry since 1995.

While a number of factors will contribute to this decline, Smithers specifically mentioned the ongoing effects of the 9-month freeze on new game approvals in China, which only recently ended. While approvals have started again the pace is slow which will continue the financial woes for the industry.

The mobile games industry is also being impacted by its inability to expand quickly and easily into China. This comes at a time when the industry has plateaued in Japan and the United States. Stagnation in one area means that declines hit even harder.

Declines like those being seen in Fortnite and PUBG. Both games saw the number of active users decline year-over-year as players grow tired of the format. Smithers predicts that this will trigger a slump in PC game revenue in 2019.

Talking about consoles, Smithers predicts that they will be unable to improve on the record-breaking year they had in 2018. Part due to it not being clear what games will be released this year but also that we’re near the end of the current console generation. Smithers observed that if the Playstation 5 doesn’t launch until the end of 2020 the console sector will continue to feel the effects until 2021.

Finally, Smithers warns that this decline could stretch into 2020. However, Bloomberg points out that rival analysts at Goldman Sachs, Nomura Holdings and Morgan Stanley disagree with Smithers and maintain that the video games industry will continue to grow.

Source: Bloomberg

 

Facebook Friendly Fraud Tactics

Farmville Screenshot Epic

Thanks to a recent class-action lawsuit, internal Facebook documents have come out that show Facebook encouraged what they called “friendly fraud” at the height of Facebook gaming’s popularity. Friendly fraud was what they called it when a child would overspend on games using their parent’s bank details. During this time they often refused refund requests and even ignored their own ideas on how to curb the behavior. Their internal documents even show that most often kids didn’t even know they were being charged real money. Facebook did change their stance…in 2016 when the era of Facebook games was all but dead.

Source: MMOGames

 

Keep an eye out later in the week for a special edition of MMO Money that looks back at 2018 with reports from across the games industry.

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MMO Money: Nexon is for Sale

A massive share of Nexon is for sale with some of the biggest names in the entertainment world taking an interest. Niantic has raised more funds to help them shape the future of Augmented Reality. Plus two different stories that involve lawsuits, including another one about Fortnite. Find all of that and more in this week’s look at online gaming’s business side.

 

Niantic Raises $245 Million in Funding

The makers of Pokemon Go are riding high right now as they just finished a round of funding that brought in $245 million for them to use on Niantic’s Real World Program. The funding will allow the company to bring on more staff for the AR project that aims to deliver “contextual computer vision” that will allow AR objects to understand and interact with objects in the real world. The funding brings Niantic’s total value up to nearly $4 billion.

The funding round was led by IVP who join the likes of aXiomatic Gaming, Battery Ventures, Causeway Media Partners, CRV, and Samsung Ventures who have already invested in Niantic. IVP Partner Sandy Miller had this to say about the funding, “IVP is excited to support Niantic in building the future of AR — initially as it delivers the magic of AR through highly popular games, but ultimately by delivering an operating system for applications that unite the digital world with the physical world. It’s a rare opportunity to partner up with a company that is already highly profitable at this stage, which is another reason we are so bullish on Niantic.”

Source: GamesIndustry

 

NCSoft Layoffs Staff at North American Mobile Studio

A few years ago, NCSoft announced they were pulling away from the North American and Western audience to focus more on their home audience. Then after a year or two, they announced that North America and Europe would play a key role in the company going forward. Part of that announcement included a new mobile games studio in California: Iron Tiger Studios. This studio was to work on mobile ports of NCSoft’s games as well as making new games.

Now here we are at the start of 2019 and layoffs have been announced for the studio. It wasn’t made clear how many people were hit by the layoff, but an NCSoft representative did stress that the studio wouldn’t be closing. Also, the game they were developing would continue in the hands of another studio, though which one isn’t known yet leaving the fate of the game up in the air at the moment. From the sounds of it, Iron Tiger Studios will continue to create mobile ports of NCSoft games rather than working on their own projects.

Source: MMOGames

 

Nexon is for Sale

When a 98.64% share in a company goes up for sale that effectively means the company is up for sale too, right? This is exactly what is happening with Nexon as the founder, Kim Jung-ju is selling his share of the company. This share is reportedly worth 9 billion dollars and it already has attracted a lot of attention from companies who are interested in buying it. Those companies include Activision, Disney, EA, and Tencent. There are also a number of US investment firms who are looking for US game companies to partner with to gather the funds needed for a bid.

An investment presentation session is planned for October in San Francisco in order to sell the shares. With $9 billion to be exchanged, it really isn’t a surprise that this is the sort of story that will take all year for us to see to completion. Whichever company does end up buying the shares will have quite an investment on their hands as Nexon has been having a great few years with their work in mobile gaming.

Source: MMOGames

 

Westworld Mobile Shutdown after Lawsuit

You may remember that back in June 2018 Bethesda and Behaviour Interactive along with Warner Bros. got into a legal dispute over the Westworld Mobile game that looked suspiciously like Fallout Shelter. Bethesda went so far as to call it a “blatant rip-off of Fallout Shelter.” In fact, it was so bad that they could point out specific bugs that existed in Fallout Shelter as well as the Westworld Mobile game.

After many months the copyright dispute was settled amicably, and in early January the companies involved put out a press release that was incredibly light on details. It only went so far as to say that the dispute was settled amicably and leaving every other detail out entirely. This, of course, left people wondering what the details of the agreement were and now it looks like we know.

The Westworld Mobile game is shutting down in April and it has already been removed from the App Store and Google Play. The dispute wasn’t mentioned in the announcement that the game was shutting down, but it isn’t very hard to put two and two together. Anyone who already has the game will be able to continue playing it until mid-April when the servers will be turned off for good.

Source: GamesIndustry

 

Orange Shirt Kid Joins in the Lawsuits Against Fortnite

The mother of Fortnite superfan Orange Shirt Kid has joined the list of people who are suing Epic over dances used in Fortnite. In this particular case, Orange Shirt Kid’s dance, which he called The Random, was put into the game as part of a dance contest. Unlike the others, The Random, called Orange Justice in Fortnite was never sold. In fact, it was given away for free. It was also submitted as part of a contest that specified the winner wouldn’t be compensated and that the dance would be used for promotional material, which is pretty standard stuff for a game run competition. After the dance became popular though, Orange Shirt Kid became the target of extreme cyberbullying that eventually resulted in his YouTube and Instagram accounts being deleted. It should also be said that this lawsuit was filed by the same law firm behind the 2Milly, Alfonso Ribeiro, and Backpack Kid lawsuits against Fortnite.

Source: Variety

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MMO Money: $7,000 Bundle for Shroud of the Avatar

It’s time to finally start getting back into our normal routines for the new year. That means it’s time for another look at the business side of the MMO industry. This week we’ve got lawsuit news, acquisition news, and a $7,000 bundle for Shroud of the Avatar.

 

Funcom Acquires Zona Paradoxal (ZPX)

Mutant Year Zero: Road to Eden

Funcom announced that it had acquired a 50.1% majority stake in Zona Paradoxal, a work-for-hire studio based in Lisbon. They have previously worked with the company on Conan Exiles, Mutant Year Zero, and other games.

ZPX will remain independent from Funcom and continue to work with other clients. However, Funcom is set to be their primary client going forward. Thanks to the acquisition the studio is also planning to double in size from where they are currently with 15 employees.

For Funcom, this means having more developers on hand to help them with their upcoming titles, of which they have 5 in the works. Conan Unconquered, a top secret game being released Halloween 2019 being made with RockPocket, a Heroic Signatures game, a Conan single player game, and an open world multiplayer game.

Source: Games Industry

 

Settlement Reached in 38 Studios Lawsuit

Do you remember 38 Studios? They were the studio that made Kingdoms of Amalur: Reckoning and were working on Project Copernicus that shut down in 2012 after running out of money and has since been the subject of a long legal battle. The studio was moved to Rhode Island after being promised a $75 million loan then failed. The Securities and Exchange Commission (SEC) argued that the studio was destined to fail after it wasn’t disclosed that they would receive only $50 million of the promised $75 million. This resulted in a lawsuit between the SEC and Wells Fargo and the Commerce Corp. That lawsuit has now been settled, however, the details have not been revealed and it seems pretty unlikely that they ever will be. We may not know how it ended, but it is nice to finally see the final chapter of 38 Studio’s story come to an end.

Though it is the end for the studio it may not be the end for the Amalur IP. In September 2018 it was bought by THQ Nordic. This means that yes, there is the possibility for Project Copernicus to be brought back to life. However, with the state of the MMORPG genre, it is far more likely that they will use the IP to create other games. Still, we have our fingers crossed for Copernicus.

Source: Gamasutra

 

Blizzard and Netease Extend Partnership

Diablo Immortal

While the Blizzard/Netease partnership has been received somewhat poorly in the West it is doing fantastically in the East, specifically in China. So much so in fact that they are extending their partnership until 2023. The partnership began in 2008 with Starcraft II and the Battle.net platform. Now they’ll be working together to bring World of Warcraft, the Starcraft series, the Diablo series, Hearthstone, Heroes of the Storm, and Overwatch to Chinese audiences for 4 more years. This seems to be leaving room for new games in the Starcraft and Diablo series. Does that mean we can expect more in the future? That does seem somewhat likely, or maybe they’re just leaving themselves open to possibilities. We will have to wait and see.

Source: Press Release

 

Tencent Gets Minority Stake in Vermintide Developer Fatshark

Vermintide and Vermintide 2 are quite easily the most popular multiplayer Warhammer games to have been made in a long time and that is paying off for their developer Fatshark. Tencent has now acquired a 36% share of the company worth 500 million kronor, approximately $56 million.

Fatshark has said that the investment will strengthen its position as an indie developer and help facilitate future growth. CEO Martin Wahlund spoke to Games Industry saying, “We are excited to announce that Tencent has chosen to invest in Fatshark. Tencent is known for investing in market leading top rated companies. With the investment, Fatshark is in a strong position to continue to grow while staying independent. Our unaltered mission will be to bring high-quality games to our fans around the globe.”

We can’t wait to see what this means for Fatshark and Vermintide 2 in the future.

Source: Games Industry

 

Activision-Blizzard Securities Fraud Investigation

A law firm is currently investigating claims that Activision-Blizzard committed securities fraud or other unlawful business offenses following the news that Bungie would be parting ways with Activision. In its press release, the law firm offered very few details but did specifically mention Bungie and the sharp decline in Activision’s stock price following the announcement. They also offered a link to join a possible class action lawsuit.

This is clearly only the beginning of this story. We’ll be keeping a close eye on the story and Activision’s share price, which has been slowly recovering since all of this took place on January 11th.

Source: Press Release

 

Shroud of the Avatar Offering $7000 Bundle to Fund Episode 2

Shroud of the Avatar is getting a bit of a change in its business model, moving to what is now considered a more traditional one. However, they’re also offering 8 people who happen to have $7000 laying around the opportunity of a lifetime. The Lord of the Island: Episode 2 Bundle costs $6,999 and includes a ton of amazing in-game and real-life perks. What do those perks include? A silver ring crafted personally by Lord British himself and an in-game version of it. A tour of the Portalarium offices. Finally, dinner with Lord British, Darkstarr, and Atos either in Austin or New York City. This offer is only available to 8 people total and one of them has already been sold.

Of course, the majority of us don’t have $7,000 that they can spare but that’s okay! We can still buy items in the cash shop which is about to change. The cash shop will be available in game, while the website will only have currency and maybe one or two things available in it. This is coming after the company has had a lot of feedback about the cash shop. This will also mean that the cash shop can be localized, something that hasn’t currently been possible.

Source: Official Newsletter

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MMO Money: Perfect World Bringing Steam to China

In this week’s MMO Money, we’re looking at a few industry revenue numbers relating to Q3 and all of 2018 so far in addition to layoffs, investments, and more. It wouldn’t be an MMO Money column if China and lootboxes weren’t mentioned and there’s some news on both topics this week. The FTC is finally getting involved with lootboxes and it looks like the trouble with the Chinese government may be coming to an end…hopefully.

 

Jam City Lays Off Employees Days After Multiple Acquisitions

Jam City, who is perhaps best known for Harry Potter: Hogwarts Mystery has announced that they have had layoffs within the company. This comes just a few days after they announced acquiring Bingo Pop. That came just a couple of weeks after they announced a multi-year contract with Disney in which they acquired Disney’s Glendale Games Studio. In August they also moved into a new studio space.

So with all that good news why did they layoff what one anonymous source called “a large number” of employees? Well, it looks like it is all part of a restructuring plan in which they focus more on the goals of their global business.

In a statement, Jam City said, “Jam City rolled out organizational changes today that altered some teams and staff positions. We are re-allocating resources to support the goals of our global business. This is an extremely difficult decision, and Jam City is making these changes with the utmost respect for every person affected. We are providing exit packages and other types of transition assistance to impacted employees.”

Source: Venture Beat

 

Perfect World Bringing Steam to China


At an esports event in Shanghai, Perfect World signed a contract with Valve that will bring Steam to China. It was signed in the presence of government officials, which is good news with all the recent trouble with foreign games trying to get into China. All new games on Steam China will have to be approved by the Chinese government. This could be a problem since they’ve not approved any foreign games since March. Games that are already in a player’s library may not be forced to be inspected if rumors are to be believed. Might this actually be the beginning of the end of the ongoing story about the Chinese government’s problem with games? We’ll just have to wait and see, but right now things are looking up.

Source: MMOCulture

 

US Game Industry Revenue Up 24% in Third Quarter

Just when you thought there was nothing more to be said about quarterly reports The NPD Group released a report on industry-wide consumer spending that shows revenue is up 24% year on year in the United States. That equates to $9.1 billion being spent on games from July to September. This brings total spending for the year so far up to $28.6 billion, putting the industry well on track to beating last year’s $36 billion total. Q4 2017 accounted for $14.7 billion of that.

Source: Games Industry

 

That all sounds great but a recent opinion article from Superdata’s founder Joost van Dreunen on Gamasutra has a much more bleak outlook on the future of the gaming industry. Here’s just a small taste of what he says. “Specifically, interactive entertainment revenue will soon start to flatline and, possibly, decline. … First, several of the biggest growth drivers have started to slow. Mobile gaming is showing saturation across different markets, including in China.”

I highly recommend reading the entire article on Gamasutra as it has a whole lot more to it that we can’t cover in a business roundup.

 

Niantic Invests in Holographic AR Display Company


Pokemon Go’s creator Niantic is one of several companies who have invested in DigiLens, who develop AR technology. This is the first time Niantic has invested in a company rather than taking it over. In just over a year Niantic has acquired four different companies: Evertoon, Escher Reality, Matrix Mill, and Seismic Games. Talking about DigiLens Niantic CEO John Hanke said, “DigiLens is on an amazing path, in collaboration with MCHC, to bring more affordable and accessible hardware experiences to players around the world, making it possible for characters and game play to be seamlessly woven into the real world, supported by compelling safe and lightweight plastic AR displays.”

Source: Games Industry

 

International Mobile Revenue for Tencent and NetEase Rose 382% in 2018

huge disappointment for Tencent
Despite the freeze on new game licenses in China international mobile revenue for Tencent and NetEase rose 382% year on year for the two publishers. Combined revenue for the two outside of China amounted to $376 million, a massive jump from last year’s $78 million. Netease made up 72% of that growth, which may be a bit of a surprise given that Tencent has games like PUBG Mobile. However, PUBG Mobile actually only made up 2% of Tencent’s mobile game business.

Source: Games Industry

 

Lootboxes: The Saga Continues


The Australian Environment and Communications Reference Committee has issued a 90-page report on lootboxes. The investigation lasted for 5 months and concluded that the issue is complicated. They go on to suggest that assessment should be performed on a case by case basis. They do acknowledge that when there is real money involved lootboxes may meet the definition of gambling. “However, there was broad consensus that where real-world currency is exchanged… loot boxes may most closely meet the definitions of gambling (both regulatory and psychological), and therefore a range of risks to players may exist.”

Meanwhile, in the United States, the Federal Trade Commission (FTC) have said they will investigate lootboxes. Joseph Simons, Chairman of the FTC said that the agency is concerned about manipulative in-app marketing and would likely look into various allegations against Google and others related to kids content.

Source: Broadcasting Cable

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MMO Money: Wargaming Acquires Edge Case and October’s Top Earners

After announcing that Fractured Space was ending development the news that Wargaming acquires Edge Case, the makers of Fractured Space is a bit of a surprise. What isn’t a surprise though is that Activision is tightening its grip on Blizzard and making them focus more on money. This represents a massive change in the culture at Blizzard. One that some former developers aren’t too keen on and may, in fact, be responsible for Diablo Immortal. This week we also found out what the top grossing games in October were, though the top games really shouldn’t come as a surprise to anyone who follows the industry. Finally, we get a new report from the UK Gambling Commission that doesn’t show any connection between lootboxes and gambling, despite what some who reported on the matter interpreted from the report. You can find all of that and much more in this week’s dive into the business behind games, MMO Money.

 

Activision Tightening Its Grip on Blizzard

Activision and Blizzard have been together since 2007 but, according to a recent article from Kotaku, Activision has started having a greater influence over Blizzard. Much of it started with Activision Blizzard’s Senior VP of Investor Relations took on the role of CFO at Blizzard earlier this year. Shortly after she was appointed she told employees that Blizzard was looking to save money this year. This is very different from the message previously given. Anonymous employees who spoke to Kotaku said that the way they were being scrutinized you would have thought Blizzard was going under and had no money.

Activision hasn’t been having an amazing year. Share prices have taken a hit and Destiny 2 is underperforming which may be putting a little bit of pressure on the company as a whole. Blizzard has also had a drop in monthly active users for four quarterly reports in a row. That simply comes down to not releasing any new games in a while.

This almost certainly had an influence on Blizzard’s decision to go into mobile games as well. The Kotaku article also says that they have more in the works, including a Warcraft Augmented Reality game like Pokemon Go.

It looks like Blizzard as we once knew it is changing. If that’s a good thing or not depends on how much you have invested in the company.

 

Source: Kotaku

 

Wargaming Acquires Edge Case

Fractured Space

Last month Edge Case announced they were ending development on Fractured Space. Now we’re finding out that the studio has been acquired by Wargaming. The 32 members of the Edge Case team will be relocating to Wargaming UK’s office bringing the total number working there up to 55. There they will be working on an unannounced F2P MMO. Wargaming UK isn’t looking to acquire any more studios, but they are hiring for a number of positions.

It’s too early to have any idea what exactly the next Wargaming F2P MMO is going to be. But that isn’t going to stop us from hoping that it is going to be World of Spaceships. That’s what happens when you mix Fractured Space with World of Tanks…right? Whatever the game is we’re looking forward to the day it gets announced.

 

Source: Games Industry

 

October’s Top Grossing Titles

Superdata released their monthly look at the top grossing titles. For the first time ever console gamers spent over $1 billion on full game downloads in a single month. Call of Duty: Black Ops 4 topped the console charters with Red Dead Redemption 2 and Fortnite in third. Pokemon Go holds the number 2 position as far as mobile games go. Second only to Honour of Kings, a Chinese game which has been at the top for quite a long time now. Overwatch, which didn’t make the top 10 list is seeing microtransactions are down 20% from last October. However, thanks to Halloween they were up from September.

 

Source: SuperData

 

Lootbox News

The UK Gambling Commission put out a report that said they are concerned with the increasingly blurred lines between games and gambling. The report also found that 3 in 10 children have opened lootboxes while playing video games. However, this doesn’t mean that lootboxes are a gateway to gambling or that they are themselves gambling, which some media companies reported. For the first time ever questions around awareness and usage of lootboxes were included in an annual survey of 3,000 kids in the UK ages 11 to 16. Speaking to Games Industry a spokeswoman said, “We’ve not in anyway, in the survey, referred to it as exposure to gambling. The reason we’ve asked that question is that it’s a very popular subject matter and we want to try and make sure that we have as much information and data around it as possible.”

The survey did find that 15% of children 11-16 are aware of skin betting websites. However, only 3% have ever participated and this has no connection to lootboxes at all. Awareness of lootboxes was at 54%. Those are kids who said they knew it was possible to pay money for them in games. 31% said they have acquired them and opened them either through their parent or guardian or through their own means.

It’s very disappointing to see that the UK continues to hold a stance that goes against what many countries in Europe have decided. But then again, we have come to expect that sort of thing.

 

Source: Games Industry

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MMO Money: September Earnings for Games, Game Deals Reach Record Highs

In this week’s MMO Money we’ve got a look at the September earnings for games, Mergers and Acquisitions in the gaming industry, investments, and more Tencent news. There were a few surprises this week and a few heartstoppers. Find all of that and more below.

 

Destiny 2 Gets Massive September Boost

Superdata has released their list of September earnings for games on PC, Console, and mobile. The big story from September was the success of Destiny 2’s expansion Forsaken which shot it up to the number one spot on console. In fact, over 60% of all Destiny 2 monthly users bought the expansion. Also looking solely at console, Fortnite slipped down to 4th place when in the previous month it held the number one spot. There was a lot of moving around and swapping places in the chart in September thanks to expansions and in-game events. Mobile seems to be pretty stable though. Check out the full list below.

Also, part of that report was the news that digital spending on games is up this year from $912 million to $1.24 billion from the same month last year. This is fantastic news as we head into the holiday season. It also suggests that this holiday season will be stronger than last year’s as well.

Source: Superdata

 

Wild West Online Studio Collapsed, But All is OK Now?

As it turns out, one of the reasons people stopped talking about Wild West Online for a few months there is because the studio stopped making the game. In fact, the studio collapsed altogether because they couldn’t pay their employees. The game got a bit of a helping hand from Free Reign Entertainment who is now helping to develop the game. The new team only includes 3 from the original team so it sounds like they’re going through a bit of a reboot. Another sign of that reboot is the introduction of a Battle Royale mode. The Battle Royale mode will be ready for testing sometime very soon, but will it be a success? We’ve seen many times where games have transitioned to follow the current trend and suffered for it. One such example is SOS, which never recovered from becoming a Battle Royale title and will be shutting down quite soon.

Source: Official Forums

 

Epic Raises $1.25 Billion from Investors

It’s a good time to be Epic. They’ve got one of the most successful, most talked about games in the world at the moment and now they’ve got an additional 1.25 billion dollars to work with. The company is already estimated to be worth between 5 and 8 billion. Tencent and Disney are already invested in Epic and now KKR, ICONIQ Capital, Smash Ventures, aXiomatic, Vulcan Capital, Kleiner Perkins, and Lightspeed Venture Partners are joining in. Epic hasn’t laid out any plans for all of that money yet but we’re sure they’re already working on that. CEO Tim Sweeney spoke about the fundraising saying, “We’re excited to partner with the finest minds in the financial, sports, and entertainment communities. This reinforces Epic’s position of leadership in real-time 3D technology, and accelerates our ability to improve the way people play, work, and interact with the world.”

Source: Games Industry

 

Game Deals in 2018 Worth a Record $25 Billion

Digi-Capital has revealed that games deals have already gone past the $25 billion mark in the first 9 months of 2018, making this year a record year. However, previous experience suggests that we may be in for a sharp decline very soon. 2014 was a fantastic year for mergers and acquisitions but immediately following that we saw a sharp decline to the lowest numbers in a decade. MMOs and MOBAs in mobile and PC sectors saw significant investments despite the fact that these genres are in a decline. Much of it came from Tencent who has been quite busy diversifying and throwing money at companies.

While gaming mergers and acquisitions have hit a near record high just one single deal accounted for nearly half of the total. This was when South African based media group Naspers sold 2% of Tencent for more than $10 billion. That’s a 60,000% return on its original investment.

Games IPOs seem to be following a three-year pattern since 2010. They will have a big year followed by two quiet ones and then repeat. 2017 was a record year with $17.1 billion but that number has dropped 90% to just $1.1 billion in 2018. That suggests that 2019 will also not be a very strong year for IPOs. Which raises questions about Green Man Gaming who has delayed their flotation twice now.

Source: Digi-Capital

 

Steam Reaches 90 Million Monthly Users

In just over a year the number of active monthly users of Steam has grown by 23 million according to a new report from Valve. In January they had a peak concurrent users at 18.5 million. This was at the height of PUBG’s popularity. The growth comes, in part like so much of the industries growth this year…from China. In China, the number of people using Steam doubled from 15 million last year to 30 million this year.

What does all of this mean for Valve? More money of course. But, there may also be some complications with their expansion into China as the government cracks down harder every month on games, especially foreign ones.

Source: Steam

 

Now if you’ll excuse me, I need to go find a time machine and invest in Tencent.

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MMO Money: Trion Worlds Was Acquired by Gamigo

It has been a week of acquisitions with some unlikely names in the news. Most notably Trion Worlds was acquired by Gamigo, according to rumors. Fatshark also made the news for an acquisition while Behaviour sold a 20% stake in their company. Plus, Superdata makes some bold predictions about Virtual Reality. Find all of that and more below in this week’s MMO Money.

 

Fatshark Acquires A Sweet Studio AB

Fatshark, the makers of the smash hit Warhammer: Vermintide and Vermintide 2 have announced that they’ve acquired A Sweet Studio AB, the makers of Flower Pop Adventures as well as several other games. The acquisition means that the entire 9 man development team from A Sweet Studio AB will begin working on new content for Vermintide 2. All of A Sweet Studio AB’s games will also now be in the hands of Fatshark, however, there hasn’t been any indication yet that there are plans to do anything with them. It also hasn’t been announced how much money changed hands in this acquisition.

Source: Press Release

 

Arena of Valor Lifetime Player Spending

huge disappointment for Tencent

According to a recent report from Sensor Tower, Arena of Valor has brought in $15 million in revenue since it launched a year ago. After a year the game is still going strong and September was the best month it has ever had with the game grossing $1.7 million. The MOBA has been downloaded 16 million times, with 1.1 million of those happening in the last month. So, clearly, MOBAs aren’t dead yet. The United States accounts for 30% of all earnings to date with Germany second accounting for 14% of revenue.

However, it is worth noting that this doesn’t include China. The reason for that is that in China the game goes by a different name, Honour of Kings. If you follow the monthly charts released by Superdata this name will be very familiar to you. They’ve been at the top of the monthly earning chart for mobile games all year. Last year Honour of Kings/Arena of Valor was the top mobile game by revenue, bringing in $1.9 billion for Tencent. With only a couple of months left in 2018, it looks pretty obvious that Honour of Kings/Arena of Valor will be at the top of the mobile charts for the whole year once again. We can’t wait to find out how it compares with 2017’s 1.9 billion dollar revenue.

Source: Sensor Tower

 

Mobile AR Overtaking VR By 2021

According to the research firm Superdata, Augmented Reality apps are due to double year over year and reach $2 billion in revenue in 2018. However, by 2021 they predict that number will pass $17 billion which will mark the point where they’re generating more than virtual reality. Apple’s ARKit and Google’s ARCore now have a combined 117 million users every month and there are more than 3,000 apps that support this technology.

Before we get to 2021, Superdata is predicting that 2019 will be the year of VR. This is entirely down to the launch of the Oculus Quest. Superdata predicts that the Quest will outsell the Oculus Rift by three to one in its launch year. At the same time, Superdata is predicting that CCP’s CEO, Hilmar Veigar Pétursson, has talked about VR in a recent interview and it doesn’t look good. “We expected VR to be two to three times as big as it was, period,” Pétursson said. “You can’t build a business on that.” He also went on to talk about the Oculus Quest saying, “If it does take off – and I mean if – we’ll reassess. The important thing is we need to see the metrics for active users of VR. A lot of people bought headsets just to try it out. How many of those people are active? We found that in terms of our data, a lot of users weren’t.”

The Oculus Quest is launching in Spring 2019 with a price tag of $399 with 50 compatible games at launch.

 

Source: Games Industry, Destructoid

 

Behaviour Interactive Gets an Investment From Gaea

Dead by Daylight

Gaea Interactive now has a 20% investment in Behaviour Interactive, the makers of Dead by Daylight and Warhammer 40k: Eternal Crusade. The two companies were already working together on a mobile game based on Game of Thrones. Behaviour cited the need to build its business in China as a motivation to take the investment.

Source: Games Industry

 

Trion Worlds Takeover

Yesterday, the MMO industry was shocked by the massive announcement that Trion Worlds had been sold. At the moment there is still a lot of rumor and speculation floating around. The biggest rumors are that they were bought by Gamigo and that Trion will be going from 200+ employees down to 25. The layoffs seem to have taken place immediately with Linda “Brasse” Carlson saying that she would only be around until the end of the day. On Twitter CEO Scott Hartsman asked to be contacted by anyone in the Games and Tech scene that is hiring because they have a lot of great people needing jobs.

This year hasn’t been great for Trion. Devilian shut down in March after a long battle to get new updates from the developer Bluehole, who had found a hit in PUBG. In July they were hit with a round of layoffs, including the associate producer of ArcheAge. There was also the relaunch of Defiance 2050, which was received fairly negatively.

What comes next for Trion…we will just have to wait and see, but if it has in fact dropped down to just 25 employees then things may look very grim.

Source: MMORPG

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