Latest / The Game Business Show / "Bringing your games to other platforms is how you’re going to win" - Circana

Transcript

"Bringing your games to other platforms is how you’re going to win" - Circana · The Game Business Show

0:00
SPEAKER_00: Hello and welcome to the Game Business Show.
0:02
SPEAKER_00: This week Donkey Kong is back and impressing critics.
0:05
SPEAKER_00: Ubisoft has delivered disappointing results.
0:07
SPEAKER_00: The Outer Worlds 2 has gone down in price.
0:10
Free-to-play shooter Splitgate 2 is unlaunching and the Chinese
0:13
Room has gone independent.
0:16
SPEAKER_00: Our big topic today is about the U.S.
0:17
SPEAKER_00: games market and looking at the market data for June,
0:21
SPEAKER_00: which was a big month for video game launches.
0:23
SPEAKER_00: And who better to guest host this episode than Mr.
0:26
SPEAKER_00: Sakana himself,
0:27
SPEAKER_00: someone we've wanted on the show pretty much from day one,
0:29
SPEAKER_00: executive director and video game analyst at Sakana.
0:32
SPEAKER_00: It's Matt Piscitella.
0:33
SPEAKER_00: Hello, Matt.
0:34
SPEAKER_00: Welcome to the show.
0:35
SPEAKER_01: Hello.
0:35
SPEAKER_01: You know what?
0:36
SPEAKER_01: This is going to be one for the real sickos.
0:39
SPEAKER_01: Like, if you're a real sicko video game salesperson, are we here for you?
0:46
SPEAKER_00: Yeah, it might put off everyone else.
0:47
SPEAKER_00: It's only one for the dates and that.
0:49
SPEAKER_00: I mean, technically, this isn't your first appearance on the show.
0:52
our opening speaker at the Game Business Live event in Los
0:56
Angeles that last month.
0:57
SPEAKER_00: That's actually available to watch on our YouTube channel.
0:59
So if people want to cover that,
1:01
we've also covered it in our news show as well.
1:03
It wasn't the happiest of conversations and you've been
1:06
sounding alarm bells over
1:08
SPEAKER_00: the economic uncertainty in the US market now for a few months.
1:11
SPEAKER_01: Yeah,
1:12
SPEAKER_01: I mean,
1:13
SPEAKER_01: the US is going through a moment right now,
1:16
SPEAKER_01: particularly when it comes to the area of affordability,
1:19
SPEAKER_01: incomes,
1:20
SPEAKER_01: the tariff situation,
1:22
SPEAKER_01: which changes on a moment to moment basis.
1:24
There is just a lot of uncertainty and consumers are reacting
1:29
to that uncertainty.
1:30
And so there's a lot of concern about where consumer mindset is
1:34
and the decisions
1:36
SPEAKER_01: they're making in terms of their purchasing.
1:38
SPEAKER_01: And they're having to make some very difficult choices.
1:41
SPEAKER_00: It's certainly a difficult scenario.
1:43
SPEAKER_00: But before we delve into Dune,
1:45
SPEAKER_00: which was a really big month for video games,
1:47
SPEAKER_00: I actually wanted to bring up a game from last week,
1:50
SPEAKER_00: which was Donkey Kong Bonanza for Nintendo Switch 2.
1:53
SPEAKER_00: Matt, have you played it?
1:54
SPEAKER_00: Have you seen much about the game?
1:55
SPEAKER_00: Have you engaged in the game very much?
1:57
SPEAKER_01: I have played it.
1:58
SPEAKER_01: It's been very cathartic to smash all of the things.
2:01
SPEAKER_00: Well, I think it's brilliant.
2:02
SPEAKER_00: I'm a Donkey Kong fan.
2:03
SPEAKER_00: I,
2:04
SPEAKER_00: in fact,
2:04
SPEAKER_00: last year in London,
2:05
I reunited the Donkey Kong Country dev team as a like the 994
2:10
game to sort of talk
2:11
SPEAKER_00: about that.
2:11
SPEAKER_00: I'm big Donkey Kong fans.
2:12
SPEAKER_00: I'm very excited about it from a personal point of view,
2:13
SPEAKER_00: but actually I was really excited,
2:15
interested in it from a business point of view because I'm
2:18
actually more interested
2:19
SPEAKER_00: in this than the launch of Switch 2 because
2:22
is what really nintendo is about these days they're more than
2:25
ever an entertainment
2:25
business they're an ip business and they've always been that
2:29
but nowadays they're
2:30
making movies and theme parks museums alarm clocks lego sets
2:34
and they're involved
2:35
they're getting themselves involved in all of those things
2:37
they're not just
2:37
licensing that stuff out there they're sort of taking that um
2:40
internally to a
2:41
degree and we've seen them do that with mario and we've seen
2:44
them doing that i've
2:45
turned their attention to zelda with a zelda movie out in in a
2:48
couple of years
2:49
But I would argue probably their most recognizable character
2:52
outside of Mario,
2:53
SPEAKER_00: and if we discount Pokémon because it's not technically theirs,
2:57
I think their most recognizable character outside of Mario is
2:59
Donkey Kong.
3:00
It's iconic brand,
3:01
well-established character,
3:02
but as a games franchise,
3:03
it's...
3:04
SPEAKER_00: by Nintendo standards, pretty small, right?
3:06
SPEAKER_00: I mean, it's the big relaunch of the series in 1994 that Rare did.
3:10
SPEAKER_00: I mentioned that a second ago.
3:11
There was a brief stint with bongos on the GameCube,
3:14
but not many people had a GameCube.
3:18
SPEAKER_00: Donkey Kong Country Returns did really well, actually.
3:21
SPEAKER_00: It did in the UK.
3:21
SPEAKER_00: I don't know.
3:22
SPEAKER_00: I'm assuming it did in the US as well.
3:23
SPEAKER_00: That's the 2010 game, but it's follow up Tropical Freeze Wii U game.
3:27
SPEAKER_00: Nobody had that either.
3:28
SPEAKER_00: It's adding huge numbers.
3:30
SPEAKER_00: Switch era, though, we've barely seen Donkey
3:32
SPEAKER_00: and there's been a handful of remakes and ports.
3:34
There was a really good Donkey Kong expansion to the first
3:37
Mario Rabbids game,
3:38
SPEAKER_00: which I thought was brilliant,
3:39
SPEAKER_00: but nothing sort of standalone,
3:40
SPEAKER_00: nothing original.
3:42
SPEAKER_00: And so the biggest DK moments in the last,
3:45
SPEAKER_00: you know,
3:45
SPEAKER_00: say three,
3:46
four or five years has been the theme park expansion at
3:49
Universal Studios Japan.
3:50
SPEAKER_00: It's been the appearance in the Mario movie.
3:53
SPEAKER_00: For me, this is significant.
3:55
SPEAKER_00: I felt this is, you know, I'd argue this is as important.
3:57
They've redesigned the character as well,
3:58
so it feels as significant as the 1994 relaunch.
4:01
SPEAKER_00: So I was really fascinated by how well it was going to do.
4:03
SPEAKER_00: And we're not going to know from the launch sales because it's a long,
4:08
SPEAKER_00: you know,
4:08
SPEAKER_00: it's only been a month since the console came out and it's not Mario,
4:12
SPEAKER_00: right?
4:12
SPEAKER_00: It's never going to do Mario numbers in week one.
4:15
SPEAKER_00: But it seems to,
4:17
SPEAKER_00: I mean,
4:17
SPEAKER_00: I only got the UK figures,
4:18
SPEAKER_00: Matt,
4:18
SPEAKER_00: maybe you've got something a little bit more US,
4:21
SPEAKER_00: a little bit more current,
4:21
SPEAKER_00: but it seems to have got to,
4:24
SPEAKER_00: you know,
4:24
SPEAKER_00: comparing it to a Mario game,
4:26
SPEAKER_00: it's never going to do those numbers.
4:27
SPEAKER_00: But in terms of Donkey Kong games,
4:30
SPEAKER_00: It's towards the top end.
4:31
SPEAKER_01: I mean, imagine it would be.
4:33
SPEAKER_01: I mean, it's great to see Nintendo making games.
4:35
SPEAKER_01: I like when they actually put out big games.
4:38
SPEAKER_01: Like you said,
4:39
SPEAKER_01: their focus is,
4:40
SPEAKER_01: you know,
4:40
SPEAKER_01: more broad now in trying to bring the IP far more mass market,
4:45
SPEAKER_01: which they've done an absolutely brilliant job of.
4:48
SPEAKER_01: But getting a big new video game, that's pretty fun.
4:51
SPEAKER_01: That's a good thing to see.
4:53
SPEAKER_01: And you're right.
4:54
SPEAKER_01: Like, DK has had...
4:57
SPEAKER_01: its place in the market.
4:59
SPEAKER_01: Bigger than Metroid, not as big as Mario, a really solid...
5:04
SPEAKER_01: performer,
5:05
and even games like Tropical Freeze HD on Switch have done
5:09
pretty darn well over
5:10
SPEAKER_01: time.
5:11
SPEAKER_01: But yeah,
5:12
SPEAKER_01: it's really fun to see them lean into this type of game with this type of
5:16
SPEAKER_01: experience,
5:16
SPEAKER_01: which is new,
5:18
SPEAKER_01: unique,
5:18
SPEAKER_01: different in a lot of ways,
5:20
but staying true to the core of what makes a Nintendo franchise
5:25
game kind of great.
5:27
SPEAKER_01: It's really fun to see the reactions from players, too.
5:31
SPEAKER_01: People seem to be really having a good time discovering.
5:35
SPEAKER_01: It's a big discovery game.
5:37
SPEAKER_01: You smash all the things.
5:38
SPEAKER_01: Hey, look at this.
5:40
SPEAKER_01: That's pretty fun.
5:41
SPEAKER_01: It's just really great to see it.
5:43
SPEAKER_00: It feels like a cross between...
5:45
SPEAKER_00: It's got the Mario Odyssey influence,
5:46
SPEAKER_00: you can see that,
5:47
SPEAKER_00: but it also feels a bit spittoon-y in a way,
5:49
SPEAKER_00: in the way that you sort of...
5:50
SPEAKER_00: It's a bit chaotic,
5:51
SPEAKER_00: but it also feels a bit Tears of the Kingdom.
5:54
Like,
5:54
the first thing I did in that game was complete a mission
5:56
objective.
5:57
SPEAKER_00: It wasn't how I was supposed to do it.
5:58
SPEAKER_00: I found that out later.
5:59
SPEAKER_00: I created a bridge rather than raise some water.
6:02
SPEAKER_00: And it has that sort of vibe to it.
6:04
SPEAKER_00: I actually... I asked Dorian Block over in the UK, who runs Nielsen IQ.
6:08
SPEAKER_00: Before that, they were GFK Entertainment.
6:10
SPEAKER_00: Before that, they were...
6:11
SPEAKER_00: chart trap.
6:11
SPEAKER_00: Before that, there were Gallup.
6:12
SPEAKER_00: So he's got market data that goes back to the 80s.
6:16
SPEAKER_00: And okay, it gets increasingly less reliable the further back you go.
6:20
But the only games missing from his list from Donkey Kong is
6:23
the NES Donkey Kong
6:24
SPEAKER_00: from 1986 and Donkey Kong Classic,
6:26
SPEAKER_00: also on the NES,
6:26
SPEAKER_00: and that's from 1988.
6:28
SPEAKER_00: So he's basically got every Donkey Kong game.
6:30
SPEAKER_00: He's got some data on every Donkey Kong game going back to 1994.
6:32
SPEAKER_00: So I wanted to know what was the biggest week one for Donkey Kong games?
6:37
SPEAKER_00: And in classic Dorian Block fashion, he didn't give me a direct answer.
6:41
SPEAKER_00: You could give me a chart.
6:42
SPEAKER_00: So in terms of the best week one ever for Donkey Kong,
6:45
SPEAKER_00: that is technically by the data he's got,
6:48
SPEAKER_00: Donkey Kong Country Returns on Wii.
6:50
SPEAKER_00: It was a bigger week one launch than Donkey Kong Bonanza.
6:52
But he doesn't have Nintendo eShop data and he doesn't have
6:55
Nintendo Direct Store data.
6:57
SPEAKER_00: And it's only a few thousand gap between the two.
7:00
SPEAKER_00: So I think we can safely say that in terms of week one launches,
7:02
SPEAKER_00: Donkey Kong Bonanza was the biggest ever launch for a Donkey Kong game.
7:06
SPEAKER_00: But he didn't just give me that.
7:08
SPEAKER_00: He gave me the best weeks ever for Donkey Kong.
7:10
So like Donkey Kong Country Returns best week was week two of
7:13
that game's launch.
7:14
SPEAKER_00: And that was actually a lot, lot stronger.
7:17
SPEAKER_00: Donkey Kong Country's best week was week six.
7:20
SPEAKER_00: That was just before Christmas.
7:21
SPEAKER_00: Donkey Kong Country 2's best week was week two.
7:25
SPEAKER_00: But anyway,
7:25
SPEAKER_00: regarding that,
7:27
SPEAKER_00: the way the data's got,
7:28
Donkey Kong Bonanza is definitely the second biggest week for a
7:30
Donkey Kong game.
7:31
It's probably the biggest launch for a Donkey Kong game we've
7:33
had of all time.
7:34
But what I love the most about Dorian's chart,
7:37
which annoyingly I'm not stuck in front of me,
7:39
SPEAKER_00: is the fact that all of the top five are different platforms.
7:42
SPEAKER_00: The biggest,
7:43
SPEAKER_00: number one,
7:43
SPEAKER_00: Donkey Kong Country Returns for second week on sale,
7:45
SPEAKER_00: Donkey Kong Bonanza,
7:46
SPEAKER_00: Nintendo Switch 2,
7:47
SPEAKER_00: to Donkey Kong Country Returns as Wii,
7:49
SPEAKER_00: Donkey Kong Country,
7:50
SPEAKER_00: SNES,
7:50
SPEAKER_00: Donkey Kong Country,
7:51
SPEAKER_00: Donkey Kong 64 is number four.
7:53
SPEAKER_00: That's from week 50, 1999.
7:56
And then Mario vs.
7:57
Donkey Kong is the biggest launch,
7:59
basically,
7:59
for Donkey Kong game.
8:00
SPEAKER_00: That's a Switch game.
8:01
SPEAKER_00: That was from last year.
8:03
SPEAKER_00: So, yeah, it's all different platforms for Donkey Kong.
8:06
SPEAKER_00: But I think, you know, Donkey Kong Bonanza is going to be a lot.
8:08
SPEAKER_00: It's about the long term now.
8:09
SPEAKER_00: Assuming there is a movie,
8:10
there's talk of another Donkey Kong movie down the line and
8:13
with its continued
8:14
SPEAKER_00: investment in that IP,
8:15
SPEAKER_00: I suspect it'll hover around doing a good few hundred thousand a quarter,
8:20
SPEAKER_00: if not a million.
8:21
SPEAKER_00: So it's, yeah, I hope it does well.
8:23
It's certainly an unusual game to have as an early launch title
8:25
for a Nintendo platform.
8:27
SPEAKER_00: But it is a game that,
8:28
SPEAKER_00: you know,
8:28
SPEAKER_00: it's a franchise that's been sort of missing for a little while.
8:30
SPEAKER_01: You know what?
8:31
Total confirmation that this is really going to be an episode
8:34
for the sickos since
8:35
SPEAKER_01: we're getting into week by week sales rankings.
8:38
SPEAKER_01: This is great.
8:39
SPEAKER_01: This is my element.
8:42
SPEAKER_01: Back in the day, week ones weren't what they are now.
8:45
SPEAKER_01: Week ones were, hey, the game might be at the retailer.
8:49
SPEAKER_01: It might not show up until next week.
8:51
SPEAKER_01: Who really knows?
8:52
SPEAKER_01: Who really cares?
8:53
SPEAKER_01: There wasn't this urgency for day one.
8:55
that we have now so i mean you often see that where weeks two
8:59
three four are
9:00
actually better because the stores actually put the games out
9:02
finally yeah not so
9:04
much a problem now and you're right with the e-shop share which
9:07
is i mean ballpark
9:09
you're looking at 45 to 55 percent generally of sales are going
9:13
to be digital um
9:14
SPEAKER_01: for games on the e-shop that also have a physical component really
9:19
SPEAKER_01: I mean,
9:19
SPEAKER_01: yeah,
9:20
that's what we're looking at now in terms of the base estimates
9:23
for some of these
9:24
SPEAKER_01: games.
9:24
Some are a little bit higher,
9:25
some a little bit lower,
9:26
according to our research.
9:27
SPEAKER_01: So yeah,
9:28
you're looking at a record launch for probably looking at a
9:32
record launch for this
9:33
SPEAKER_01: game as well.
9:34
SPEAKER_01: But yeah,
9:35
SPEAKER_01: unfortunately,
9:35
SPEAKER_01: with the eShop digital restrictions,
9:38
SPEAKER_01: which are tough for everyone in this line of work,
9:42
SPEAKER_01: Uh, you know, you do what you can, we'll let you got.
9:44
SPEAKER_00: Yeah.
9:44
SPEAKER_00: Yeah.
9:45
SPEAKER_00: I remember on Switch one,
9:46
SPEAKER_00: when the GSD data for Europe,
9:47
SPEAKER_00: I obviously couldn't,
9:48
SPEAKER_00: Nintendo never shared their data,
9:49
despite the fact that Walter very famously said that he was
9:52
going to share all of
9:53
SPEAKER_00: their digital data so that we knew how to react.
9:55
SPEAKER_00: They've never really done it outside of their own financials.
9:58
SPEAKER_00: Yeah.
9:58
SPEAKER_00: When it was like third party games,
10:00
I used to look at things like Monster Hunter and Marion Rabbids
10:03
and Just Dance and
10:04
SPEAKER_00: Lego games,
10:04
SPEAKER_00: you know,
10:04
SPEAKER_00: they sort of told to do well on Switch.
10:06
SPEAKER_00: In Europe, it was like...
10:08
SPEAKER_00: you know,
10:09
SPEAKER_00: sometimes less than 20% of sales were digital,
10:11
SPEAKER_00: but obviously with Switch 2,
10:13
SPEAKER_00: I didn't know if that was,
10:14
SPEAKER_00: so that number,
10:15
SPEAKER_00: is that generally,
10:16
SPEAKER_00: or was that just like the Switch 2 you're predicting,
10:19
SPEAKER_00: estimating?
10:20
SPEAKER_01: Generally,
10:20
SPEAKER_01: generally,
10:21
SPEAKER_01: for Nintendo platforms,
10:22
SPEAKER_01: I mean,
10:23
SPEAKER_01: in 2012,
10:24
SPEAKER_01: oh gosh,
10:26
SPEAKER_01: 2012,
10:26
SPEAKER_01: it was like less than 2%,
10:29
and that rate's been growing steadily over time for the market
10:32
as a whole.
10:32
SPEAKER_01: Wow.
10:33
SPEAKER_01: So,
10:34
SPEAKER_01: yeah,
10:34
SPEAKER_01: I mean,
10:34
SPEAKER_01: that's the core assumption when you really start,
10:37
SPEAKER_01: you know,
10:38
digging into the financial reporting and doing a bunch of
10:40
assumption math.
10:41
SPEAKER_01: That's kind of the range you get to.
10:42
SPEAKER_01: But of course, like it's it's imperfect to say the least.
10:45
SPEAKER_01: The error bars are large, but it's most likely a record setting launch.
10:51
SPEAKER_01: But yeah, with anything Nintendo first party, the launch period doesn't.
10:55
SPEAKER_01: Yeah.
10:56
really matter because these games will sell forever at a
10:59
premium price point,
11:01
further separating what Nintendo does from what just about
11:04
everyone else can do.
11:06
SPEAKER_01: And good for them for maintaining that kind of brand equity.
11:09
SPEAKER_00: Yeah.
11:10
I like the story before about how,
11:11
you know,
11:11
the first week wasn't always that big a deal.
11:13
SPEAKER_00: Ocarina of Time.
11:14
SPEAKER_00: I don't know if it was ever like this in the US.
11:16
In the UK,
11:16
we had like,
11:17
what was the biggest,
11:17
what's the Christmas number one music album?
11:20
SPEAKER_00: And we tried this for a period of time.
11:21
It was always going to be Christmas number one in games because
11:23
we didn't have
11:24
SPEAKER_00: Black Friday till the last like,
11:25
SPEAKER_00: I don't know,
11:26
SPEAKER_00: 10 years or so.
11:27
SPEAKER_01: It's still weird that it's a thing there.
11:28
SPEAKER_01: Like that just shouldn't be.
11:30
SPEAKER_01: All right, but we'll live that alone.
11:31
SPEAKER_01: That's just a weird deal still.
11:34
SPEAKER_00: Yeah,
11:34
SPEAKER_00: but we didn't have Black Friday,
11:35
SPEAKER_00: so our biggest week was always the week before Christmas.
11:37
SPEAKER_00: And our first sales period around that time was the week after Christmas.
11:41
SPEAKER_00: That used to be the case.
11:42
SPEAKER_00: So Christmas number one used to be a story in the UK games industry.
11:45
SPEAKER_00: And Chart Tracks sometimes, or GFK, sorry, Nielsen, I've lost track.
11:49
SPEAKER_00: And they would put out what was the number one game every Christmas.
11:52
SPEAKER_00: And standing out, it was always FIFA or Call of Duty.
11:55
And the one stuck out like a sore thumb was Zelda Ocarina of
11:58
Time from 1998.
12:00
SPEAKER_00: And it's because when it first came out,
12:01
SPEAKER_00: which was like two weeks earlier,
12:02
SPEAKER_00: nobody put it on shelves.
12:03
SPEAKER_00: There wasn't enough stock, there wasn't enough shipments.
12:05
SPEAKER_00: And then they just went, oh, hang on, people want this.
12:07
SPEAKER_00: And they stuffed it all in shelves and suddenly the sales spiked.
12:10
SPEAKER_01: Hey, that box back in the floor, Johnny, go get it.
12:12
SPEAKER_01: It's been sitting there for a week.
12:14
SPEAKER_01: Maybe we should put it off for sale.
12:15
SPEAKER_01: I don't know.
12:17
SPEAKER_01: There's a lot of,
12:18
SPEAKER_01: you know,
12:18
SPEAKER_01: people have a lot of concerns about the digital marketplace,
12:22
SPEAKER_01: but actually being able to get the game you want when you want it,
12:25
SPEAKER_01: digital makes that a lot easier.
12:27
And an eShop that actually functions on the Switch 2 the way
12:31
you want it to
12:32
SPEAKER_01: certainly won't hurt.
12:35
SPEAKER_00: If you had a bad experience, Matt.
12:38
SPEAKER_01: Well, the Switch 1 eShop could be challenging to navigate, we'll say.
12:43
SPEAKER_00: Yeah, well, yes, certainly.
12:45
SPEAKER_00: Well, let's talk about the June market figures.
12:48
SPEAKER_00: It's a big month for the games industry, generally June.
12:51
SPEAKER_00: There was a lot of games, some of them that aren't even in this data.
12:53
SPEAKER_00: And there's some great numbers here from Sakana.
12:56
SPEAKER_00: US games market up 22% in June 2025 versus June 2024.
13:01
SPEAKER_00: Games content, so that's games, DLC, all that sort of stuff, up 6%.
13:04
SPEAKER_00: Accessories up 29%.
13:05
SPEAKER_00: But the big one, games hardware, up 249%.
13:09
SPEAKER_00: Driven, obviously, by the launch of the Nintendo Switch 2.
13:12
SPEAKER_00: which is the biggest launch for a game console in US history,
13:15
SPEAKER_00: 1.6 million units sold by the end of the month,
13:17
SPEAKER_00: that's half a million more than the previous best,
13:19
SPEAKER_00: the PS4 back in 2013.
13:23
Can we conclude much from the Switch 2 launch other than the
13:26
fact that they had stock?
13:27
SPEAKER_01: Yeah,
13:28
we can conclude from the highest sales of Switch 2 at launch
13:31
that they made a lot
13:31
SPEAKER_01: of Switch 2 units available for sale at launch.
13:35
SPEAKER_01: Unfortunately, great start, not taking anything away from it.
13:40
SPEAKER_01: They were super confident.
13:42
SPEAKER_01: They put the money where their mouth was and said,
13:44
SPEAKER_01: we believe we're going to be able to sell this.
13:46
SPEAKER_01: We're going to take the knees out of the scalper in secondary market.
13:49
SPEAKER_01: We're going to make sure that if people want a Switch 2,
13:52
SPEAKER_01: they're going to be able to get one from us at MSRP.
13:55
SPEAKER_01: or thereabouts.
13:57
SPEAKER_01: For the most part, they succeeded in doing that and that's fantastic.
14:01
SPEAKER_01: That's wonderful.
14:03
SPEAKER_01: But ultimately,
14:05
SPEAKER_01: as you know,
14:05
the launch sales of a hardware device don't often correlate to
14:10
the lifetime sales.
14:11
We've had devices that have come out with incredible early
14:14
sales that have fallen
14:16
off and other consoles and devices that have come out with weak
14:19
sales at launch
14:20
SPEAKER_01: that end up being some of the best selling systems of all time.
14:24
We really can't take a lot in terms of long-term or long tail
14:28
about what this is
14:29
SPEAKER_01: going to look like,
14:30
SPEAKER_01: but hey,
14:31
SPEAKER_01: a record setting launch like this,
14:34
I don't think anyone's going to be upset with that or say
14:37
that's a bad thing.
14:39
It's tough right now to come away with any long-term
14:42
conclusions or projections
14:44
SPEAKER_01: based on the early read,
14:45
SPEAKER_01: although this is a hell of a good early read.
14:48
SPEAKER_00: Yeah,
14:49
I think it's I think somebody told me it took four months for
14:52
the switch one to hit
14:53
SPEAKER_00: the same number.
14:54
SPEAKER_00: Again, that's obviously that's all stock related.
14:56
SPEAKER_00: Are you sticking with your 4.3 million projection for the year?
14:59
SPEAKER_01: Yeah, this is basically where I wanted it to be.
15:03
SPEAKER_01: Probably a little bit better than I was hoping for.
15:06
SPEAKER_01: So yeah, sticking with that and we'll see what happens.
15:09
SPEAKER_01: I mean,
15:09
SPEAKER_01: the price point,
15:11
SPEAKER_01: the content slate,
15:13
SPEAKER_01: not a problem for the day one buyer,
15:15
but that mass market gift buyer in the holiday window could be
15:19
a different story.
15:19
SPEAKER_01: And of course,
15:20
SPEAKER_01: in the US market in particular,
15:22
SPEAKER_01: all of the uncertainty around pricing,
15:24
SPEAKER_01: the tariff situation,
15:26
and just where people are financially is going to play into
15:29
that as well.
15:30
We're going to have to see the range of error on any forecast
15:33
now in the video game
15:34
SPEAKER_01: space in the US in particular is the highest it's ever been,
15:37
SPEAKER_01: and it's always been high.
15:39
SPEAKER_01: It's always been a very difficult market to project.
15:42
SPEAKER_01: Now,
15:42
SPEAKER_01: given all the particular factors impacting the US in particular,
15:46
SPEAKER_01: it's even more unpredictable.
15:49
SPEAKER_01: But so far, so far, great start.
15:52
SPEAKER_01: The enthusiast audience definitely showed up day one.
15:56
Now we have to see if they can successfully transition to the
15:59
mass market gift buyer.
16:01
SPEAKER_01: And that'll be the next test.
16:04
They've just announced a Pokemon bundle,
16:06
which would probably have some effect.
16:07
SPEAKER_01: Put some Pokemon cards in there and you'll sell out in no time, man.
16:10
SPEAKER_01: They'll have people running over each other at the Costco.
16:15
SPEAKER_01: I love the stat.
16:16
SPEAKER_00: that a third of Switch 2 owners,
16:18
almost a third of Switch 2 owners bought one of those pricey
16:21
pro controllers.
16:22
SPEAKER_00: Yeah.
16:23
SPEAKER_00: I guess that's Mario Kart multiplayer there.
16:24
SPEAKER_00: But those are,
16:25
SPEAKER_00: you know,
16:25
SPEAKER_00: particularly as the controllers from the previous Switch,
16:28
SPEAKER_00: you know,
16:28
SPEAKER_00: run,
16:29
SPEAKER_00: work with them.
16:30
SPEAKER_00: I thought that was an impressive number.
16:33
SPEAKER_00: I thought it was anyway.
16:34
SPEAKER_01: It is.
16:35
I included that in particular because I think it says something
16:38
about the average
16:38
SPEAKER_01: day one Switch 2 buyer.
16:41
Historically,
16:41
people have considered the Nintendo buyer to be more family,
16:45
more kids.
16:47
I think this is one of those data points that suggest that
16:51
perhaps the Switch 2 day
16:53
SPEAKER_01: one buyer is more enthusiast gamer and very much enthusiast player.
16:59
SPEAKER_01: rather than family.
17:00
SPEAKER_01: Now,
17:00
SPEAKER_01: I don't know that for sure,
17:01
SPEAKER_01: but I think that that is a data point that would suggest that we have a,
17:05
SPEAKER_01: you know,
17:05
that audience could be more enthusiast gamer than mass market
17:09
at this point.
17:10
SPEAKER_00: What also backed up that for me,
17:12
SPEAKER_00: and it's a really small one,
17:13
SPEAKER_00: was that the attach rate for Mario Kart World,
17:16
SPEAKER_00: and it doesn't include digital,
17:17
SPEAKER_00: you've got it as 82% with the bundle.
17:19
SPEAKER_00: Which is super high.
17:21
SPEAKER_00: That's super high.
17:22
SPEAKER_00: But it's not as high as Zelda was.
17:24
If I recall Breath of the Wild back in 2017,
17:28
that was like over 100% attack rate.
17:31
SPEAKER_00: It was a bonkers thing.
17:33
SPEAKER_00: So Mario Kart is more of the mainstreamy family kids Zelda IP.
17:39
SPEAKER_00: At least I don't have the data to back that up.
17:40
SPEAKER_00: That's just my...
17:41
my theory on it and even though it does appeal to hardcore
17:43
gamers obviously um i do
17:46
wonder if um you know there's a bunch of people that bought a
17:49
switch and actually
17:51
um bought it for you know better versions of pokemon and zelda
17:55
and that kind of
17:56
thing um there's clearly some people that did but even though
17:59
the 18 seems high i
18:00
SPEAKER_00: actually thought it'd be higher
18:02
In terms of the splits in the hardware,
18:04
the bundle was the primary SKU purchased.
18:08
SPEAKER_01: It was the majority of sales of Switch 2 hardware.
18:13
SPEAKER_01: With the physical standalone,
18:14
SPEAKER_01: getting to that 82 percent,
18:15
SPEAKER_01: you add the standalone digital,
18:17
SPEAKER_01: you're probably in the 90 percent attached range.
18:20
SPEAKER_01: It helped that this was the showcase game,
18:22
not dissimilar to when the Xbox 360 launched and Call of Duty 2
18:27
was the showcase
18:28
SPEAKER_01: game for that system.
18:31
Every once in a while,
18:32
you get a new hardware device where one game is the game.
18:36
SPEAKER_01: And that's kind of what we're seeing here.
18:39
SPEAKER_01: But you're right.
18:40
SPEAKER_01: The appeal of this box is also that it...
18:42
It plays some of the past games the way you'd want to play them
18:46
if you were really
18:47
into them with higher frame rates and better resolutions and
18:50
all that fun stuff.
18:51
There's been a lot of chatter online about how the slate wasn't
18:57
super compelling
18:57
SPEAKER_01: and that there weren't enough games,
19:00
which if you're a traditional buyer looking at it in the
19:03
framework of new box,
19:05
SPEAKER_01: new games for the box,
19:07
I don't care about anything else because that's not going to be
19:10
good enough for
19:11
SPEAKER_01: this new thing.
19:12
SPEAKER_01: then I guess I can see that criticism.
19:14
But when you look at the total package and the total content
19:17
library available,
19:18
it's tough to say that this is a system that has a light slate
19:23
of things to play.
19:24
SPEAKER_00: Again, I understand the argument that it was a weak line-up.
19:28
SPEAKER_00: In fact, I sort of agree with it.
19:30
I felt there wasn't a hero title for it,
19:32
even though Mario Kart World is one.
19:34
SPEAKER_00: But for me,
19:35
SPEAKER_00: because the audience is more hardcore,
19:37
SPEAKER_00: I think they would much rather have a Zelda or even a Metroid.
19:40
SPEAKER_00: Sure.
19:41
SPEAKER_00: The reality is, is the line-up strong enough?
19:44
SPEAKER_00: That's a question that matters at Christmas, right?
19:47
That's when you're trying to reach people where that's going to
19:49
matter more than...
19:50
SPEAKER_00: Nintendo fans,
19:52
SPEAKER_00: we're buying it anyway.
19:54
SPEAKER_01: Yeah, you're showing up day one no matter what.
19:56
And they could have priced the system even higher and would
20:00
have sold out because
20:01
SPEAKER_01: the very core enthusiast Nintendo fan will show up.
20:06
SPEAKER_01: They won't care.
20:07
SPEAKER_01: They'll be there.
20:08
SPEAKER_01: But yeah, it's month three, four, five in the holiday.
20:12
That's when things get more interesting and everything starts
20:16
mattering more.
20:18
SPEAKER_01: And we'll see what happens.
20:19
yeah um let's talk about some of the games that came out um so
20:23
yeah mario kart um
20:25
i'm trying i didn't save your chart math that's absolutely
20:28
outrageous you think i'd
20:29
SPEAKER_00: be prepared for this
20:30
SPEAKER_01: I got a lot of charts.
20:32
SPEAKER_00: I am just covered in charts all the time.
20:35
SPEAKER_00: Elden Ring Night Rain is number one,
20:37
SPEAKER_00: which I thought actually surprised me,
20:38
SPEAKER_00: even though I know it came at the end of May,
20:40
SPEAKER_00: so it's right at the end of the previous month,
20:42
SPEAKER_00: so I can see why most of the sales is pushing to June.
20:45
SPEAKER_00: But not many people are talking about that in terms of the media,
20:49
SPEAKER_00: but to see it come out as the number one
20:51
SPEAKER_00: Game of Dune.
20:52
SPEAKER_00: I was surprised to see that,
20:54
even though Elden Ring's a massive IP and it's obviously got a
20:58
lot of mass appeal
21:00
SPEAKER_00: as a concept,
21:01
which I think speaks to me paying too much attention to the
21:03
media and not enough
21:04
SPEAKER_00: attention to where gamers are these days.
21:06
SPEAKER_01: Yeah, it was really helped by PC.
21:09
SPEAKER_01: That was a particularly strong platform for Night Reign in month two.
21:13
SPEAKER_01: PC is kind of just a fun environment right now to begin with.
21:18
You go back and look at stuff like Helldivers 2 and just how
21:21
strong it was on PC.
21:22
SPEAKER_01: People,
21:23
SPEAKER_01: especially like enthusiast players,
21:25
SPEAKER_01: enthusiast console fans,
21:26
SPEAKER_01: think of Helldivers 2 as a PlayStation game.
21:29
SPEAKER_01: But really, it's a PC game.
21:31
SPEAKER_01: It's primarily paid and has played and has primarily been bought on PC.
21:37
And some of these games that people consider as part of the
21:41
console ecosystem are
21:42
doing so well on PC that it could have a knock-on effect on
21:46
something like the
21:46
SPEAKER_01: best-selling titles chart,
21:48
SPEAKER_01: like we saw in June with Night Reign.
21:50
SPEAKER_01: I mean,
21:51
SPEAKER_01: of course,
21:52
SPEAKER_01: looking at the comparative slate or the titles it was competing with,
21:55
especially when cart doesn't include standalone digital and was
21:58
so heavily bundled,
22:00
SPEAKER_01: kind of skews that a bit.
22:02
And Death Stranding 2,
22:03
while being a big game,
22:05
that is very much that enthusiast niche audience.
22:08
SPEAKER_01: That's not a big mass market title.
22:11
Yeah,
22:11
I was gonna ask,
22:11
yeah,
22:12
okay,
22:12
so he didn't have the competition,
22:14
really.
22:14
I mean,
22:15
a Mario Kart maybe may have been there if we...
22:17
It certainly would have been.
22:18
SPEAKER_01: Yeah.
22:19
SPEAKER_01: Significant margin.
22:21
SPEAKER_01: Yeah.
22:21
SPEAKER_01: But just the peculiarities of how the charts are constructed.
22:25
SPEAKER_00: So, Death Stranding 2 worried me a little bit.
22:27
SPEAKER_00: It didn't worry me.
22:27
SPEAKER_00: I wasn't losing sleep over it.
22:29
SPEAKER_00: I'm sure Kojima would do very well.
22:30
But the first game had a mixed reception and although this one
22:34
had reviewed very
22:34
SPEAKER_00: well and was seen as a little bit more accessible,
22:37
I did worry that the sort of Marmite reaction the first game
22:39
had got would probably
22:40
SPEAKER_00: hurt the launch of this one.
22:42
SPEAKER_00: I feared it might do.
22:43
The chart placement seems positive but it sounds to me like it
22:47
wasn't one of your
22:47
SPEAKER_00: Mega PS5 launches.
22:49
SPEAKER_01: And it's top 30 year to date, which is fine.
22:53
SPEAKER_01: I don't look at it and go, well, that's disappointing.
22:55
Or I don't look at that and go,
22:56
well,
22:56
I actually did really well or better than expected.
22:59
SPEAKER_01: It's fine.
23:02
SPEAKER_01: It's fine.
23:05
Sometimes the game comes out,
23:07
you look at it and you go,
23:08
well,
23:08
that's what that did.
23:08
SPEAKER_01: Yeah, right.
23:10
SPEAKER_01: And that's kind of how I look at Death Stranding 2.
23:12
SPEAKER_01: It's...
23:13
SPEAKER_00: Yeah,
23:14
SPEAKER_00: it's like people ask me,
23:15
I did a tweet yesterday about the Donkey Kong Bonanza earlier
23:18
in the week about
23:19
SPEAKER_00: that,
23:19
SPEAKER_00: about how that well did the UK based on physical sales.
23:22
SPEAKER_00: And as people commented, was it good?
23:24
SPEAKER_00: Was it bad?
23:25
SPEAKER_00: And I'm like,
23:28
SPEAKER_00: It didn't do as well as Mario, but I didn't expect it to.
23:31
SPEAKER_00: It was better than most Donkey Kong games, but I expected it to be.
23:34
SPEAKER_01: It's the framework of the internet conversation, right?
23:37
Like,
23:37
it's either,
23:38
this is the biggest thing ever,
23:40
or this was a huge failure.
23:42
SPEAKER_01: And everything in between just gets kind of muddled these days because,
23:45
SPEAKER_01: you know,
23:46
SPEAKER_01: you look on YouTube or anything,
23:48
SPEAKER_01: like,
23:48
SPEAKER_01: there's no,
23:49
SPEAKER_01: there's like,
23:49
SPEAKER_01: eh,
23:50
SPEAKER_01: this did okay.
23:50
SPEAKER_01: There's none of that.
23:52
SPEAKER_00: Can't just say, yeah.
23:54
SPEAKER_00: Meeting expectations isn't an option anymore.
23:56
SPEAKER_00: It's like,
23:57
SPEAKER_00: it's...
23:58
SPEAKER_01: No,
23:58
SPEAKER_01: it's got to be,
23:59
SPEAKER_01: this is the biggest hit ever and saves the industry,
24:02
SPEAKER_01: or this was a huge failure and everyone's getting...
24:04
SPEAKER_01: Yeah.
24:06
SPEAKER_01: It can be exhausting.
24:07
SPEAKER_01: But yeah, so it's cool, it's fine.
24:10
SPEAKER_01: There's not really a lot to say about its performance.
24:13
SPEAKER_01: It did fine.
24:14
SPEAKER_01: It reviewed,
24:14
SPEAKER_01: well,
24:15
the people that liked the game really liked the game and it's
24:17
going to appeal to
24:18
SPEAKER_01: that audience and...
24:19
SPEAKER_01: maybe not much more beyond that.
24:23
It certainly doesn't seem to be a breakout mass market hit at
24:25
the moment,
24:26
but you never know.
24:27
Kojima did say that he made some changes to the game to stop it
24:31
being too popular,
24:33
SPEAKER_00: which is classic,
24:34
SPEAKER_00: Kojima.
24:34
SPEAKER_00: And also, well done, you succeeded.
24:38
SPEAKER_00: You know,
24:38
SPEAKER_01: the cool kids like the game,
24:40
SPEAKER_01: and all of us non-fedora-wearing people,
24:42
SPEAKER_01: I guess we don't.
24:42
SPEAKER_00: That's fine.
24:43
SPEAKER_00: Yeah.
24:44
SPEAKER_00: I actually am impressed by Forza Horizon 5.
24:47
SPEAKER_00: I mean, I say I'm impressed.
24:48
SPEAKER_00: That game franchise never ceases to surprise me, actually.
24:52
SPEAKER_00: It is the hero title.
24:53
SPEAKER_00: Discount Bethesda and Activision, it's just the king on Xbox.
24:56
SPEAKER_00: And obviously now it's on PlayStation,
24:58
SPEAKER_00: still in the top five,
25:00
SPEAKER_00: creeping up in the annual chart as well.
25:04
SPEAKER_00: That's Xbox's multi-platform strategy really paying off.
25:08
SPEAKER_00: We've seen CFE's doing really well initially on PlayStation as well.
25:12
SPEAKER_00: And this one seems to have some real legs.
25:14
SPEAKER_00: It feels like a proper fit for the...
25:17
racing games are popular all franchises but on all platforms
25:19
but um it's and it's
25:22
different to the Gran Turismo as well as an IP I you know my I
25:27
have to caveat this
25:28
my brother works for playground games so I'm obviously very
25:30
pleased to see a
25:31
playground games title do very well in the charts but um uh
25:34
it's uh he although
25:35
he's working on fable but um uh yeah it seems to have done very
25:38
well it seems to
25:39
SPEAKER_00: show that that strategy is working
25:41
SPEAKER_01: Yeah,
25:41
SPEAKER_01: we've been seeing this now for about a year or so now where these,
25:46
SPEAKER_01: no matter who makes them,
25:47
SPEAKER_01: the cross-platform ports are generally,
25:51
every month you're seeing some new game pop up that's been gone
25:54
for a while and
25:55
SPEAKER_01: you're like,
25:55
SPEAKER_01: well,
25:55
SPEAKER_01: how'd that happen?
25:56
SPEAKER_01: Well, it came out on another platform.
25:58
You look at Stellar Blade,
26:00
number five on the month,
26:02
came out on PC,
26:03
was 185th
26:05
SPEAKER_01: on the main chart jumped to fifth because of the PC release.
26:09
There's these opportunities for everyone to bring their content
26:14
to more players.
26:15
SPEAKER_01: People who buy a hardware system these days,
26:19
SPEAKER_01: they're doing it because of the ecosystem,
26:21
SPEAKER_01: because of their friends list.
26:23
You're not going to get people to buy or transition boxes
26:27
because of exclusives anymore.
26:29
SPEAKER_01: We're way beyond that point.
26:31
SPEAKER_01: People are entrenched into their systems.
26:35
SPEAKER_01: And, you know, bringing the content to them is the only way to win.
26:38
SPEAKER_01: Yeah.
26:39
SPEAKER_01: And that's what everyone's doing, except for Nintendo.
26:43
SPEAKER_01: They kind of do their own thing.
26:45
SPEAKER_01: Yeah.
26:46
SPEAKER_01: But even they could benefit from it.
26:47
SPEAKER_01: But of course, like, they won't.
26:49
SPEAKER_01: That's not their MO.
26:49
SPEAKER_01: So...
26:51
SPEAKER_00: Yeah, for them, it's interesting.
26:53
SPEAKER_00: You know,
26:53
SPEAKER_00: you've got...
26:54
SPEAKER_00: What I love the most,
26:55
SPEAKER_00: when you talk about PlayStation and Xbox,
26:57
SPEAKER_00: it's all about going to PC.
26:58
SPEAKER_00: And every time I talk about Nintendo, it seems to be the mobile.
27:01
SPEAKER_00: So there's that Pokemon Friends game yesterday.
27:03
SPEAKER_00: Mobile and Switch 2.
27:04
SPEAKER_00: There's a lot of that.
27:06
SPEAKER_00: But it's... Yeah, I...
27:09
It's interesting people talk about them being entrenched into
27:12
the digital ecosystem
27:13
SPEAKER_00: and their communities.
27:14
SPEAKER_00: And I think that's probably true.
27:14
But I think what's also true is we've got so much stuff to play
27:18
and watch and
27:19
SPEAKER_00: listen and read with so much stuff.
27:21
SPEAKER_00: Even if there's a game I like that's on a platform I don't own.
27:25
SPEAKER_00: I'm really interested in playing that.
27:27
SPEAKER_00: I can't really justify buying that device.
27:30
SPEAKER_00: Because the current device I've got,
27:31
SPEAKER_00: I've got like 100 things I've not played that I also really want to play.
27:35
SPEAKER_00: So even if I was tempted to switch devices,
27:37
it has to be an incredibly good reason for me to go to
27:40
something else as a gamer.
27:42
Not because I'm,
27:43
it's because I've just got,
27:44
I'm not short of entertainment.
27:46
I think there was a time there was scarcity of things to play
27:49
and now there just isn't.
27:50
SPEAKER_01: There certainly isn't.
27:52
SPEAKER_01: And now with everything playing Fortnite Minecraft Roblox,
27:55
SPEAKER_01: which is the baseline expectation that,
27:57
SPEAKER_01: you know,
27:58
SPEAKER_01: the main,
27:59
SPEAKER_01: someone's main live service game,
28:02
SPEAKER_01: all of the other games are basically frosting on the cake at this point.
28:07
SPEAKER_01: You know,
28:09
SPEAKER_01: in the US,
28:10
at least the top 10 live service games suck up half of all
28:14
gaming time every month.
28:16
SPEAKER_01: And every other game's got to fight for the remainder of that.
28:19
SPEAKER_01: So like,
28:20
SPEAKER_01: Yeah, this is all nice to have stuff.
28:23
SPEAKER_01: When you look at it at the most fundamental level,
28:26
SPEAKER_01: especially on the PlayStation and Xbox platforms.
28:29
Bringing that content to where people are is the only way
28:32
you're going to be able
28:33
SPEAKER_01: to win in an environment like we're looking at right now.
28:38
SPEAKER_01: Forza being this strong, that's great.
28:40
If they come out day one across systems,
28:44
that really bodes well for its next iteration.
28:47
SPEAKER_01: And every game finding its way to multiple storefronts and ecosystems,
28:55
SPEAKER_01: That's how you're going to survive and win.
28:56
SPEAKER_00: Yeah, yeah.
28:58
SPEAKER_00: And not even just to other platforms,
29:00
SPEAKER_00: but to cinema,
29:01
SPEAKER_00: to other forms of products and Lego,
29:04
SPEAKER_00: whatever.
29:05
SPEAKER_00: You also did a full year chart,
29:07
SPEAKER_00: which,
29:07
SPEAKER_00: I mean,
29:07
SPEAKER_00: Monster Hunter Wilds was at number one,
29:09
SPEAKER_00: which didn't surprise me.
29:11
SPEAKER_00: I knew it did really well when it launched,
29:13
SPEAKER_00: I saw it did,
29:13
SPEAKER_00: but Elder Scrolls Oblivion,
29:16
SPEAKER_00: number two,
29:17
SPEAKER_00: ahead of Assassin's Creed,
29:18
SPEAKER_00: well ahead of everything really,
29:20
SPEAKER_00: that's tremendous for a remaster.
29:23
SPEAKER_00: Incredibly,
29:25
SPEAKER_00: the studio behind it did some layoffs this last month,
29:27
SPEAKER_00: which I understand these things aren't always directly related,
29:30
SPEAKER_00: but for me it's mad because of the idea that game's done.
29:33
It just goes to show the demand for a new Elder Scrolls that
29:37
might be out there.
29:39
SPEAKER_01: It does,
29:39
and it also is another just reminder that people love playing
29:44
the games they love,
29:45
and if you give them an opportunity to return to a game that
29:48
maybe they haven't
29:49
SPEAKER_01: played in a decade or more,
29:51
SPEAKER_01: they're going to show up,
29:53
SPEAKER_01: especially if you do a decent job on the remaster or the remake.
29:56
I think there was some conversation online yesterday about how
29:59
the remasters and
30:00
SPEAKER_01: remakes are making it so new games can't be made,
30:03
SPEAKER_01: which is just not at all how it works.
30:08
SPEAKER_01: But this is another example of a market demand for this type of content.
30:12
SPEAKER_01: And so people are trying to meet it.
30:14
SPEAKER_00: It's the maturity of the industry.
30:16
SPEAKER_00: If you look at film and TV and you look at in the 80s,
30:20
SPEAKER_00: right,
30:20
SPEAKER_00: Back to the Future,
30:21
SPEAKER_00: one of the biggest movies,
30:22
SPEAKER_00: the 80s,
30:23
SPEAKER_00: set in the 50s.
30:24
SPEAKER_00: Right.
30:25
SPEAKER_00: This idea of going back 20, you know, it's a modern thing.
30:27
SPEAKER_00: It appeals to modern people.
30:28
SPEAKER_00: But if you get an idea of sort of going back 20 years,
30:30
SPEAKER_00: 30 years in some cases,
30:32
SPEAKER_00: really can work because you've got,
30:34
SPEAKER_00: you know,
30:34
you've got people who are now in their 30s or 40s who are
30:37
nostalgic for their
30:38
SPEAKER_00: youth,
30:38
SPEAKER_00: that are interested in playing that.
30:39
SPEAKER_00: They're interested in maybe showing their kids that.
30:41
SPEAKER_00: You've got that sort of thing.
30:42
SPEAKER_00: In the 90s, it was Austin Powers in the 60s.
30:44
SPEAKER_00: You've got these sort of trends.
30:46
SPEAKER_00: It happens in other forms of entertainment.
30:48
SPEAKER_00: The X-Files reboot happened,
30:49
SPEAKER_00: you know,
30:50
SPEAKER_00: all these sort of things,
30:50
SPEAKER_00: the Jurassic World coming back,
30:52
SPEAKER_00: all those sort of things are all speaking to that.
30:54
SPEAKER_00: They bring in new audiences to speak to old audiences.
30:57
We are now in the sort of early noughties revival for video
31:00
games at the moment.
31:01
SPEAKER_00: We're seeing a lot of that.
31:02
SPEAKER_00: And so, you know, I don't.
31:05
SPEAKER_00: It fits.
31:06
SPEAKER_00: And that's part of the audience getting older.
31:08
SPEAKER_00: And when we're talking about,
31:09
SPEAKER_00: we talked about it last week on the show,
31:11
SPEAKER_00: people aging out of video games,
31:13
SPEAKER_00: particularly console and PC games.
31:15
SPEAKER_00: And actually,
31:17
SPEAKER_00: you know,
31:17
SPEAKER_00: having a bunch of handhelds,
31:18
SPEAKER_00: which gives people a little bit easier for people to play,
31:21
SPEAKER_00: that play System Shock 2 or,
31:24
SPEAKER_00: you know,
31:25
SPEAKER_00: Oblivion or stuff like that.
31:27
SPEAKER_00: I think that's brilliant.
31:28
SPEAKER_00: Certainly I'm playing a lot more games as a result of it,
31:32
SPEAKER_00: and it hopefully keeps people in gaming a little bit longer.
31:36
SPEAKER_01: Yeah.
31:37
SPEAKER_01: On the console ecosystem in particular,
31:40
we're seeing the average age and average income level of the
31:44
console player
31:45
SPEAKER_01: actually growing while we're seeing
31:48
SPEAKER_01: younger people and people on the lower end of the affluent scale,
31:52
SPEAKER_01: as we like to say,
31:53
SPEAKER_01: choosing more readily available devices like PCs and mobile devices.
31:58
SPEAKER_01: We're actually seeing an aging up of that console audience.
32:02
SPEAKER_01: It makes sense.
32:03
SPEAKER_01: If you got a N64 under the tree as a kid,
32:07
SPEAKER_01: you're probably still playing consoles if you're playing video games.
32:10
SPEAKER_01: You still think that's really cool if you're a
32:13
SPEAKER_01: 12-year-old consoles are kind of for old people at this point.
32:17
SPEAKER_01: So there's a little bit of that happening too.
32:20
But yeah,
32:20
reselling someone's youth,
32:23
it's never been a bad way to try to make a buck.
32:27
SPEAKER_01: Yeah.
32:29
Unfortunately,
32:29
the game is pretty good and people really seem to like it.
32:31
SPEAKER_01: That being that high,
32:32
SPEAKER_01: a little surprising,
32:34
SPEAKER_01: sure,
32:35
especially for a shadow drops game that came out of nowhere if
32:38
you're not really
32:39
SPEAKER_01: dialed in to the internet conversation.
32:42
SPEAKER_01: But seeing that do so well,
32:45
SPEAKER_01: Pretty cool.
32:46
SPEAKER_00: Interesting.
32:46
SPEAKER_00: Okay, I'll ask this question.
32:48
SPEAKER_00: There is a connection here.
32:49
SPEAKER_00: Because you've pointed out some real good growth for subscription, right?
32:52
SPEAKER_00: Yeah.
32:52
SPEAKER_00: A really big jump.
32:54
SPEAKER_00: You said before you've been seeing it every month this year, really.
32:57
SPEAKER_00: What drove that in June?
32:59
SPEAKER_00: Was it Nintendo Switch Online?
33:01
SPEAKER_01: Nintendo Switch Online, but a general increase.
33:06
Another one that was a bit of a surprise that I had to be
33:10
reminded the game
33:11
SPEAKER_01: existed,
33:11
SPEAKER_01: Star Wars The Old Republic had a nice bump in subscribers in the month.
33:16
SPEAKER_01: We've been coming off of this
33:19
SPEAKER_01: In the US in particular,
33:20
SPEAKER_01: I don't know if this has been the same case in Europe,
33:22
but in the US after the Revenge of the Sith 20th anniversary
33:26
release in Andor,
33:27
SPEAKER_01: Star Wars Battlefront II started to pick up.
33:29
SPEAKER_01: In fact, that was, what was that?
33:31
SPEAKER_01: Number 17 on the May chart, Star Wars Battlefront II.
33:37
We've had this whole Star Wars kind of resurgence in the US and
33:40
the Old Republic
33:42
SPEAKER_01: also saw a bit of a resurgence.
33:43
SPEAKER_01: So it wasn't the biggest factor of what that spending increase was,
33:46
SPEAKER_01: but it was there and that has been interesting.
33:48
I think what we're seeing for years,
33:53
subscription spending in the US was flat.
33:56
SPEAKER_01: for three to four years.
33:57
SPEAKER_01: Then when Call of Duty showed up on Game Pass,
34:00
SPEAKER_01: we got a bump,
34:01
SPEAKER_01: we were expecting it,
34:02
SPEAKER_01: wasn't as big as we thought it was going to be.
34:04
SPEAKER_01: Obviously, the entire strategy of Xbox has shifted.
34:07
SPEAKER_01: I don't know if that was the cause, but probably wasn't not an influence.
34:12
SPEAKER_01: Then it started to come back down again,
34:15
SPEAKER_01: like,
34:15
SPEAKER_01: okay,
34:16
SPEAKER_01: it'll have a bump,
34:17
SPEAKER_01: it'll set a new level,
34:18
SPEAKER_01: fine.
34:20
But instead,
34:20
what we've started to see are increases every month in
34:23
subscription spending.
34:25
SPEAKER_01: I don't know for sure,
34:27
but I think this is partially being driven by consumers looking
34:29
for value as things
34:31
like housing and utilities and food in the US continue to show
34:35
these pretty
34:36
SPEAKER_01: significant increases.
34:38
SPEAKER_01: I think people are looking for value a little bit as well.
34:40
They're turning to subscriptions to try to find more value for
34:44
their gaming dollar.
34:45
SPEAKER_01: I don't know if that's true, but that's my hypothesis at least.
34:49
SPEAKER_00: Well, yeah, and I think you're probably right.
34:50
SPEAKER_00: And also mixed with the fact that,
34:52
SPEAKER_00: particularly on Game Pass,
34:54
SPEAKER_00: we've had a really strong run since that Call of Duty.
34:57
So there was Indiana Jones and then there was Avowed and South
35:00
of Midnight.
35:01
SPEAKER_00: And South of Midnight may not be the biggest thing in the world,
35:03
SPEAKER_00: but Expedition 33,
35:05
SPEAKER_00: Oblivion,
35:05
SPEAKER_00: as we've just talked about,
35:06
SPEAKER_00: Doom with Tony Hawk a couple of weeks ago.
35:09
There's been a really just a consistent slate of actually AAA
35:13
games going into that
35:14
SPEAKER_00: service that probably had a
35:16
SPEAKER_00: hope maybe had a bit of an impact, certainly on Game Pass.
35:19
SPEAKER_00: Anyway,
35:19
the reason why I mentioned Nintendo Switch Online was because
35:22
we're talking about
35:23
nostalgia and of course the big thing with the Nintendo Switch
35:25
Online on Switch 2.
35:27
SPEAKER_00: I imagine most of it's people who just want to get the Zelda,
35:30
SPEAKER_00: you know,
35:30
SPEAKER_00: improvements,
35:32
SPEAKER_00: including around to pay for the upgrade path.
35:33
But obviously the GameCube games coming to Switch 2 might have
35:39
had some connection
35:41
SPEAKER_00: there with the sort of nostalgia play.
35:43
SPEAKER_01: I'm subscribing to it so the better half could play Dr. Mario.
35:49
SPEAKER_01: But yeah,
35:50
SPEAKER_01: the content library on the Switch Online is actually really great,
35:54
SPEAKER_01: especially with all the bundles that happened with Switch 2.
35:57
SPEAKER_01: Yes.
35:58
you're going to see a big uptick in Switch Online subscribers
36:01
and they're more
36:04
SPEAKER_01: incentivizing that service.
36:06
SPEAKER_01: You know Nintendo, they're never going to be a first mover.
36:10
SPEAKER_01: They're going to wait years,
36:11
but eventually they're going to catch up and they're also
36:13
offering incredible value
36:14
SPEAKER_01: while also offering differentiation to support the premium purchasing.
36:19
They're taking the best lessons from everyone else and applying
36:23
them as they tend to do.
36:24
SPEAKER_00: I did have one question from a reader,
36:26
SPEAKER_00: by the way,
36:27
SPEAKER_00: because you did this obviously big chart for the year to date.
36:29
SPEAKER_00: Somebody wants a chart,
36:30
SPEAKER_00: I think used to do them,
36:32
1995 to date is what the mega charts of the biggest US games of
36:38
all times.
36:38
SPEAKER_00: There's a clamor amongst your fans, Matt, for an update on that.
36:46
SPEAKER_01: I can do that.
36:47
SPEAKER_01: Number one will be Grand Theft Auto V forever.
36:50
SPEAKER_01: Permanently.
36:51
SPEAKER_01: For years at least.
36:52
SPEAKER_01: Until I'm dead, then maybe Grand Theft Auto VI.
36:54
SPEAKER_01: We'll have to see.
36:57
It's worth noting there were a few games that June was quite a
36:59
busy month for video
36:59
SPEAKER_00: game launches.
37:00
SPEAKER_00: We're talking about a lot of the big sort of console and PC titles there,
37:03
SPEAKER_00: but there was also Dune Awakening came out,
37:06
SPEAKER_00: which did a million copies globally.
37:08
SPEAKER_00: Kepler launched Rematch, which also found a pretty, pretty big audience.
37:13
SPEAKER_00: And then there's also other games like I think FBC.
37:16
SPEAKER_00: I always get FTC.
37:17
SPEAKER_00: I think I'm thinking about the US body, but no.
37:25
uh didn't that didn't do very well i think that's been a bit of
37:27
a disappointing
37:28
launch but then the game indie game on steam peak also did
37:32
incredible numbers and
37:33
then there's split gate 2 which we'll come back to i think um
37:35
that hasn't that's a
37:37
free to play game yeah that didn't that didn't deliver what was
37:40
needed of it uh
37:40
from from other sounds of it so it was a really mixed month and
37:43
i was talking to it
37:45
Somebody else is using the example of the games that missed as
37:47
an example to say
37:48
SPEAKER_00: that the market's in trouble.
37:49
SPEAKER_00: Last week it was Jacob from Genvid.
37:52
SPEAKER_00: But I think the games industry has always been like this.
37:55
SPEAKER_00: Always.
37:55
SPEAKER_00: So every time you have a busy month with lots of releases,
37:58
SPEAKER_00: you have some games that do really well and some games that miss.
38:01
And I think what's different today is that games that do really
38:04
well can do really well.
38:05
SPEAKER_00: And the games that miss can really miss.
38:07
Like you're starting to see that there can be quite a low face
38:11
or with Concorde and
38:12
SPEAKER_00: other titles like that.
38:14
SPEAKER_00: But I still think,
38:15
SPEAKER_00: you know,
38:16
there's clearly an appetite for games because there's big games
38:20
doing well as well
38:20
SPEAKER_00: as those games that aren't doing very well.
38:22
And I know that we can get caught up in the negativity,
38:24
but there were some clear hits in June.
38:26
SPEAKER_01: Yeah, I mean, we tend to forget about the failures.
38:29
SPEAKER_01: We remember the successes, like, just as people.
38:31
SPEAKER_01: We tend to do that generally.
38:32
SPEAKER_01: But, yeah, the industry's always been like this.
38:34
But I don't know what you think on this one,
38:36
but,
38:37
you know,
38:37
I keep kicking around.
38:38
SPEAKER_01: You see it every time.
38:39
SPEAKER_01: You see it on the Internet or in commentary.
38:42
Every time a big game does great,
38:45
someone will comment,
38:46
okay,
38:46
when are the layoffs,
38:47
right?
38:47
SPEAKER_01: And this is obviously...
38:50
SPEAKER_01: Tremendous challenge.
38:52
SPEAKER_01: Or every time I put out a number and it says the market grew,
38:54
SPEAKER_01: it's like,
38:55
SPEAKER_01: okay,
38:55
SPEAKER_01: well,
38:55
SPEAKER_01: why are there so many layoffs then?
38:57
Well,
38:58
it's because the winners are winning more and the pie is
39:01
shrinking for everybody else.
39:03
SPEAKER_01: The Fortnite,
39:04
SPEAKER_01: Minecraft,
39:04
SPEAKER_01: Roblox of the world,
39:06
SPEAKER_01: the biggest hits,
39:07
SPEAKER_01: the biggest games are taking more and more share of that market.
39:10
SPEAKER_01: Even if that market is growing a bit,
39:12
SPEAKER_01: it's all going to this very small,
39:15
SPEAKER_01: very small,
39:16
tiny group of biggest titles and everyone else is scrambling
39:23
for the rest of the
39:24
SPEAKER_01: market.
39:26
SPEAKER_01: I mean,
39:26
SPEAKER_01: I don't know if that's your read on it as well,
39:28
SPEAKER_01: but you look at some of these things and you go,
39:31
SPEAKER_01: like the hits,
39:32
SPEAKER_01: you look at it like a peak and you go,
39:34
SPEAKER_01: oh,
39:34
SPEAKER_01: see,
39:34
SPEAKER_01: indie games can be a hit.
39:36
But the number of those types of games being released is
39:40
exponentially growing and
39:42
SPEAKER_01: that's only going to get worse.
39:44
SPEAKER_00: It's also worth noting that,
39:45
SPEAKER_00: okay,
39:45
SPEAKER_00: a lot of layoffs happen because they've missed a deadline,
39:48
SPEAKER_00: some money hasn't come in,
39:49
SPEAKER_00: they need to cut costs.
39:50
SPEAKER_00: But the big organizations, they cut before the things go down, right?
39:55
SPEAKER_00: So they,
39:56
SPEAKER_00: you know,
39:56
SPEAKER_00: there used to be this thing I used to get,
39:58
SPEAKER_00: Brendan Sinclair,
39:59
who's a friend of the show and will probably be on the show
40:00
again in a couple of
40:01
SPEAKER_00: weeks,
40:02
SPEAKER_00: he used to write this thing about Activision Blizzard laying staff off.
40:05
They'd have record numbers and they would lay off a load of
40:08
people from their
40:08
SPEAKER_00: publishing division.
40:10
And the reality was they didn't need the people in the
40:12
publishing division.
40:13
SPEAKER_00: It wasn't that they're not a charity.
40:16
They weren't going to keep a load of people working on in
40:18
public relations and
40:19
SPEAKER_00: marketing just because they made a load of money or we can keep them on.
40:22
SPEAKER_00: They're a big,
40:25
SPEAKER_00: vicious,
40:26
SPEAKER_00: in a business way,
40:28
SPEAKER_00: organization that goes,
40:30
SPEAKER_00: we don't need,
40:30
SPEAKER_00: we're not going,
40:31
SPEAKER_00: there's no point.
40:32
SPEAKER_00: And you make the cuts early.
40:33
SPEAKER_00: There's an investor said it to me.
40:35
SPEAKER_00: You can always rehire.
40:38
SPEAKER_00: What you can't do is get the money back.
40:40
So if you and so I know we're wrong,
40:41
it's a very it's different depending on the market.
40:44
SPEAKER_00: You know,
40:44
I'd argue that having a team that knows each other and works
40:46
well together is
40:47
SPEAKER_00: valuable.
40:48
You can't just lose them and then bring them back again or
40:50
bring different people back again.
40:51
SPEAKER_00: I think that is as clear cut as that.
40:54
But there is an element of sometimes cuts happen not because
40:56
their last game flopped,
40:58
SPEAKER_00: but because of where the market's heading and what they need.
41:01
Activision Blizzard were at that time when they were cutting up
41:03
loads of things in
41:04
SPEAKER_00: publishing,
41:04
SPEAKER_00: they were reducing their slate.
41:06
SPEAKER_00: They only had like two or three games a year now and they didn't need an
41:10
international publishing organization with tons of people in
41:13
every territory to
41:14
SPEAKER_00: release three games.
41:15
SPEAKER_00: It wasn't necessary.
41:16
SPEAKER_00: And so they make cuts like that.
41:17
SPEAKER_00: So there's that element to it as well.
41:19
SPEAKER_00: Like, you know, Microsoft may have made loads of money, but those cuts
41:22
were more about where things are heading rather than where they
41:25
think things are
41:25
SPEAKER_00: heading rather than the fact they need to save money now.
41:29
But then also,
41:30
as you quite rightly point out,
41:31
a lot of the cuts are coming.
41:33
SPEAKER_00: Some of the stories that come out this week from the cuts,
41:35
SPEAKER_00: we've got a couple of studios I've made some days.
41:37
SPEAKER_00: It's because actually things got difficult for them.
41:42
SPEAKER_00: In fact,
41:42
SPEAKER_00: let's move on to some other...
41:43
SPEAKER_00: Actually,
41:43
SPEAKER_00: before I move on to other stories,
41:45
SPEAKER_00: Matt,
41:45
SPEAKER_00: because there's so much in the data.
41:46
SPEAKER_00: We were recording this quite shortly after you released it.
41:49
Was there anything else surprising for you or interesting to
41:52
you in your triggers
41:53
SPEAKER_00: that we should talk about?
41:56
SPEAKER_01: I mean, the entire story is about what Switch 2 was doing in its launch.
42:00
SPEAKER_01: I mean,
42:01
the hope coming into this year was that a combination of Switch
42:04
2 and Grand Theft
42:05
SPEAKER_01: Auto 6 would help get the market back to growth.
42:10
SPEAKER_01: a market that hasn't grown in terms of its overall size since 2021,
42:14
SPEAKER_01: because of course,
42:16
SPEAKER_01: 2021 was as high as it was for all the conditions.
42:18
SPEAKER_01: Losing Grand Theft Auto 6 out of the year was painful.
42:21
SPEAKER_01: It likely means we're not going to get back to growth overall.
42:24
I think the good news out of the story beyond just the initial
42:29
success of Switch 2
42:30
SPEAKER_01: is that everything else from a market perspective,
42:33
SPEAKER_01: from a consumer demand perspective is
42:36
SPEAKER_01: where we want it to be in terms of maintaining market size.
42:40
SPEAKER_01: Now, that doesn't mean that everyone's going to benefit equally.
42:44
That doesn't mean that the same dollars are available to
42:46
everyone because they're certainly not.
42:48
But we're not seeing a pullback in demand as much as I'd feared
42:54
we may given all of
42:55
SPEAKER_01: the crazy market conditions in the US right now.
42:58
From that respect,
42:59
feeling pretty good about where we are in terms of the market.
43:03
SPEAKER_01: But we're going to have to see how we continue over time.
43:05
So I think looking at it from a more macro perspective,
43:09
the consumer is here.
43:11
SPEAKER_01: The enthusiast player is here.
43:13
SPEAKER_01: They're spending.
43:14
SPEAKER_01: That leaves opportunity for people who are able to capitalize on it.
43:18
SPEAKER_01: And I think that's the big takeaway, I take away at least.
43:22
SPEAKER_00: Yeah, good.
43:23
SPEAKER_00: I was relatively pleased when I saw the numbers.
43:25
I thought that was...
43:25
I know a lot of it was Switch 2,
43:27
but I felt it was positive.
43:30
SPEAKER_00: Well, let's talk about some other stories quickly before we wrap up.
43:32
SPEAKER_00: I love to do the little bit of a roundup.
43:34
SPEAKER_00: One of them just came in just as I was about to record this episode.
43:37
So the Xbox has reduced the price of their unreleased upcoming
43:41
Q4 title,
43:41
The Outer Worlds 2.
43:43
SPEAKER_00: This is the sequel to Obsidian's Fallout-like RPG.
43:46
SPEAKER_00: It was going to carry the higher $80 price point.
43:48
SPEAKER_00: Microsoft's going for this game.
43:50
It had a big focus for it during its Summer Game Fest showcase
43:53
that it put on.
43:54
But Microsoft has changed its mind after reviewing current
43:57
market conditions.
43:59
SPEAKER_00: And I'm guessing this is something you'd approve of, Matt.
44:03
Yeah,
44:06
there must have been some really interesting conversations that
44:09
happened.
44:10
SPEAKER_01: I imagine the team's calls for a little bit were colorful and fun.
44:14
SPEAKER_01: Fly on the wall, the team's convo would have been a good time.
44:17
SPEAKER_01: But yeah, I think it's a smart move.
44:23
SPEAKER_01: Will it make a massive difference?
44:25
SPEAKER_01: I don't know.
44:27
But I think it is reacting to the consumer feedback and perhaps
44:32
some pre-order
44:33
SPEAKER_01: volume and saying,
44:34
SPEAKER_01: okay,
44:35
SPEAKER_01: well,
44:35
SPEAKER_01: maybe we should think about this again and we'll see if there's a bump in
44:40
SPEAKER_01: pre-orders or whatever about that.
44:42
SPEAKER_01: But yeah, it's super interesting.
44:46
SPEAKER_01: The timing is super interesting.
44:49
SPEAKER_01: Just everything about it's interesting.
44:53
SPEAKER_01: I don't know what to say beyond that other than,
44:55
SPEAKER_01: man,
44:56
SPEAKER_01: I bet there's some really cool teams called transcripts floating around.
45:00
SPEAKER_00: Well, Borderlands 4 obviously was expected to be $80, and then it wasn't.
45:04
And that's,
45:04
you know,
45:05
they still forget the Outer Worlds 2 is in Game Pass.
45:07
SPEAKER_00: So on Xbox, it's going to be mostly a Game Pass title.
45:10
SPEAKER_00: On...
45:12
SPEAKER_00: So in terms of console, it's a PS5 play.
45:15
SPEAKER_00: And when your other big PS5 competitor of that period is Borderlands 4,
45:20
it's $10 cheaper and certainly a bigger brand in terms of brand
45:26
recognition.
45:28
SPEAKER_00: I guess also it doesn't stand up competitively.
45:30
And actually we did do a piece last week where we looked at the
45:33
biggest two weeks ago.
45:34
SPEAKER_00: So we looked at the biggest game still to come out in the year.
45:38
And the Outer Worlds 2 featured on a lot of lists,
45:40
but relatively low down on the list.
45:42
SPEAKER_00: You know, it's not it wasn't in the top five for a lot of the list.
45:46
SPEAKER_00: So yeah, your preorder volume might be a good might be a good bit.
45:52
SPEAKER_01: It's interesting these days,
45:53
SPEAKER_01: as opposed to,
45:54
SPEAKER_01: say,
45:54
SPEAKER_01: 10 years ago,
45:56
SPEAKER_01: the standard price points were much more locked in.
46:00
SPEAKER_01: These days,
46:00
SPEAKER_01: we have so much variability in not only base pricing of a game,
46:05
SPEAKER_01: but also with all the collector's editions and gold editions and silver,
46:08
SPEAKER_01: all these editions that come out too,
46:10
SPEAKER_01: the ways in which a game can be creatively priced.
46:15
SPEAKER_01: or more than they've ever been, right?
46:17
So it makes it interesting that we're seeing these kind of
46:20
swings as everyone's
46:21
SPEAKER_01: trying to figure out what the right way to go forward is.
46:24
SPEAKER_00: It's about making that value off.
46:25
SPEAKER_00: I always think Nintendo lost the value argument around Switch 2.
46:28
SPEAKER_00: I mean, online, whether they asked it in real life, I don't know.
46:30
SPEAKER_00: Because actually,
46:31
SPEAKER_00: I think the Switch 2 with Mario Kart bundle wasn't...
46:34
SPEAKER_00: Actually,
46:34
SPEAKER_00: I thought that was quite a reasonable deal.
46:36
SPEAKER_00: In fact, I found it quite attractive.
46:37
SPEAKER_00: And if you have Nintendo Switch online,
46:39
SPEAKER_00: you've got all of those games that have been nicely updated.
46:42
i thought actually for me i bought a switch two with the mario
46:45
kart bundle got all
46:46
of my old switch one games or the big ones updated for free
46:49
because i'm a member of
46:50
nintendo switch online too and i thought this is the good deal
46:54
but the argument
46:55
SPEAKER_00: online was actually if you wanted zelda
46:57
you didn't own Zelda,
46:59
you didn't have the DLC,
47:00
it was going to cost you $90.
47:02
And if you got Switch 2 and you didn't get it with Mario Kart,
47:05
that was going to cost you $80.
47:06
SPEAKER_00: And that noise overrided the positive value.
47:11
SPEAKER_00: But as you say, it's flexible pricing as people are calling it.
47:15
I think there's a way of you getting quite a good deal on games
47:17
if you look around.
47:19
Yeah,
47:19
but what day one buyer of Switch 2 didn't already have a Switch
47:23
in Zelda?
47:24
SPEAKER_01: I get the argument, but in reality, that's not.
47:28
Talk to me in November and December when people may be buying
47:31
their first Nintendo
47:32
SPEAKER_01: Switch device,
47:33
SPEAKER_01: whether one or two.
47:34
SPEAKER_01: Then the value proposition becomes more important, right?
47:38
It's tough to have that argument with a core consumer base that
47:40
played that thing
47:41
day one and was part of that 103% attach rate of Zelda to
47:46
Switch 1 back in the day,
47:48
SPEAKER_01: right?
47:49
SPEAKER_01: But I get it.
47:50
SPEAKER_01: People are concerned about the value.
47:51
SPEAKER_01: Of course they are.
47:54
SPEAKER_01: But brand equity and brand loyalty
47:58
SPEAKER_01: adds a price premium.
47:59
SPEAKER_01: It just does, whether it's video games or sunglasses or cars, right?
48:04
It's the same idea of a luxury good being able to carry a
48:09
luxury price point.
48:10
SPEAKER_01: And I think that applies in this case, but, you know.
48:13
SPEAKER_00: I hope the Altoil 2 does good.
48:14
SPEAKER_00: I think it looks great.
48:15
SPEAKER_00: And hopefully the price point, it gives it a bit of a boost.
48:19
SPEAKER_01: And you can always bring the price down, right?
48:20
So testing that price point,
48:22
probably not the worst idea because you always bring it down.
48:25
SPEAKER_01: You sure as hell can't take a price up.
48:27
SPEAKER_00: Well, you can on consoles by the looks of it.
48:30
SPEAKER_00: Well,
48:31
SPEAKER_00: I mean,
48:32
if you have certain cover in the overall macro environment that
48:37
lets you do that by
48:39
SPEAKER_01: not saying it's because of a thing,
48:41
SPEAKER_01: but probably being justified because of a thing like terror.
48:45
SPEAKER_00: Who knows?
48:46
SPEAKER_00: Yeah, who knows.
48:47
SPEAKER_00: Well, let's talk about another story.
48:49
SPEAKER_00: This is a UK studio story.
48:51
SPEAKER_00: This is my home.
48:51
SPEAKER_00: It's the Chinese room.
48:53
SPEAKER_00: They're the team behind Still Wakes the Deep.
48:55
If you remember,
48:55
go back in time,
48:56
it's Dear Ether and everybody's gone to the Rapture.
48:58
SPEAKER_00: They've gone independent.
48:59
SPEAKER_00: It has acquired itself from parent company Sumo Group,
49:02
SPEAKER_00: which is Sumo Group shifting away from,
49:04
they did a period of time where they had a publisher and then
49:06
were doing a lot of
49:06
SPEAKER_00: original games.
49:07
They're shifting away from that to their back on work for hire
49:10
and co-development
49:11
SPEAKER_00: and things like that.
49:12
SPEAKER_00: The management buyout was backed by VC firm Hero Capital.
49:16
The Chinese room is still working on original properties
49:18
alongside the game Vampire
49:20
SPEAKER_00: The Masquerade Bloodlines 2.
49:22
SPEAKER_00: Some layoffs were made as part of the shift.
49:24
SPEAKER_00: They didn't actually specify how many people were laid off,
49:26
SPEAKER_00: but they did say they're now a team of 55 employees.
49:29
SPEAKER_00: I'm a big fan of the studio, but they almost basically died
49:34
SPEAKER_00: a little while ago before Sumo bought them out,
49:36
SPEAKER_00: they really downsized the studio a little while ago.
49:40
SPEAKER_00: Sumo bought them out and then they sort of scaled back up again.
49:42
SPEAKER_00: So it's nice that they're still sort of surviving.
49:44
SPEAKER_00: Matt, I don't know if you saw the story.
49:48
I did with some very interesting quotes from everyone involved
49:52
that carried a lot
49:53
SPEAKER_01: of video game industry language subtext.
49:58
SPEAKER_01: That was pretty entertaining from a like, oh, okay.
50:02
SPEAKER_01: I see what they're saying, but I kind of see what they're saying.
50:05
SPEAKER_01: With the quote here,
50:07
SPEAKER_01: we had been working on new IP that needed investment,
50:10
SPEAKER_01: and that was no longer possible with Sumo's new model.
50:14
SPEAKER_01: Okay.
50:16
SPEAKER_01: That's pretty clearly saying like,
50:18
SPEAKER_01: yeah,
50:18
we needed to get away from these cats because they were just
50:21
going to stifle
50:22
SPEAKER_01: anything we wanted to do.
50:24
SPEAKER_00: Yeah.
50:25
SPEAKER_01: Good for them for getting out.
50:26
SPEAKER_01: We'll see,
50:27
SPEAKER_01: you know,
50:28
SPEAKER_01: anytime a VC firm gets involved,
50:29
it makes things a little interesting in terms of what the
50:32
expected return is.
50:34
SPEAKER_01: But yeah.
50:35
SPEAKER_00: No, indeed.
50:35
SPEAKER_00: It is Hero Capital, which is Ian Livingston vehicle.
50:38
SPEAKER_00: So there is a, they are games people.
50:39
SPEAKER_00: Oh, that's good.
50:40
SPEAKER_00: But obviously they do need, they're not looking for some small upside.
50:43
SPEAKER_00: They're looking for something a bit more significant than that.
50:46
Speaking of,
50:48
well,
50:48
I'm not even sure a small upside is the right way to say this.
50:50
Ubisoft results came through and they delivered earnings that
50:53
were below expectations.
50:55
SPEAKER_00: I have to say, Ubisoft's press releases do fascinate me.
50:58
SPEAKER_00: It's caused by lower than expected performance for Rainbow Six Siege,
51:01
an unfavorable foreign exchange rate and a partnership that
51:04
won't materialize until
51:05
SPEAKER_00: the next quarter.
51:06
SPEAKER_00: I love how mysterious they are.
51:08
The firm said that player spending in Rainbow Six Siege faced
51:11
temporary but
51:11
SPEAKER_00: significant disruption due to technical pricing issues.
51:15
The first time I think I've ever read,
51:17
our numbers were down because of a technical issue.
51:19
SPEAKER_00: That has since been resolved.
51:22
One of the strategic changes in their release is that Ubisoft
51:24
is reorganizing into
51:25
SPEAKER_00: creative houses.
51:27
SPEAKER_00: The first house is the one that's launched with Tencent,
51:29
SPEAKER_00: which encompasses Rainbow Six,
51:30
SPEAKER_00: Assassin's Creed,
51:31
SPEAKER_00: Far Cry and Tom Clancy.
51:33
SPEAKER_00: Basically, there's a house that has all the big games in it.
51:36
And then I'm assuming there's going to be other houses and they
51:39
haven't announced those.
51:40
SPEAKER_00: Those houses are designed to enhance quality,
51:42
SPEAKER_00: focus,
51:42
autonomy and accountability while fostering closer connections
51:45
with players.
51:45
SPEAKER_00: I imagine there's one for Just Dance and there's one for...
51:48
SPEAKER_00: It's the thing,
51:49
SPEAKER_00: there's a bit of a...
51:49
I know that Yves Guillermo and his calls often talk about live
51:53
service and big open
51:54
SPEAKER_00: world games.
51:55
SPEAKER_00: Ubisoft do make games that aren't flat.
51:57
They don't talk about them very much in shareholder calls
52:00
because shareholders
52:00
SPEAKER_00: don't care about them.
52:01
They do do things like splinter sales and Prince of Persia's
52:04
and stuff that has
52:05
SPEAKER_00: perhaps smaller margins and things like that.
52:08
SPEAKER_00: So that was part of it.
52:09
They did announce that Assassin's Creed Shadows now has five
52:11
million players.
52:12
I think most of those are probably sales because I know they
52:15
have a Ubisoft
52:16
SPEAKER_00: subscription service,
52:17
SPEAKER_00: but I can't imagine it's the bulk of that number.
52:24
SPEAKER_00: They didn't announce it was coming to Switch 2, but sort of did.
52:28
SPEAKER_01: More of that video game language.
52:31
SPEAKER_00: You're like, okay, yeah, it's coming to, okay, sure.
52:33
SPEAKER_00: It's coming to other platforms.
52:35
SPEAKER_00: Which other platforms could they be?
52:37
SPEAKER_00: Is it coming to Switch 2?
52:38
SPEAKER_00: I can't possibly comment.
52:39
SPEAKER_00: Okay, it's coming to Switch 2.
52:40
SPEAKER_00: Who knows?
52:41
SPEAKER_00: a week before they let slip the working on a Ghost Recon game.
52:45
SPEAKER_00: You don't normally get this from the big publishers.
52:46
You get smaller companies just sort of sneakily letting you
52:49
know that something's coming up.
52:50
SPEAKER_00: But it's nice.
52:51
SPEAKER_00: I didn't mind any of that.
52:54
SPEAKER_00: It's tough for Ubisoft.
52:55
SPEAKER_00: They are a big organization.
52:57
SPEAKER_00: They make a lot of stuff.
52:58
SPEAKER_00: I don't know how
53:00
I mean,
53:01
I know that they've gone through really tough times for many,
53:03
many reasons.
53:04
SPEAKER_00: I actually quite like them.
53:04
SPEAKER_00: I think we focus too much on the big games.
53:06
If you look at some of their art house stuff and some of their
53:08
retro stuff and they
53:10
SPEAKER_00: do some interesting things.
53:11
SPEAKER_00: I was a big fan of the Marion Rabbids games, for instance.
53:15
But this,
53:18
I think they've had to sell their crown jewels effectively to a
53:21
degree to Tencent.
53:23
SPEAKER_00: You know, I hope, you know,
53:25
SPEAKER_00: There's a survival at the end of this for some of these IPs.
53:28
SPEAKER_00: There's a lot of people that work there and a lot of great games.
53:31
It's a fundamentally different company moving forward than it
53:34
was in the past,
53:35
right?
53:36
SPEAKER_01: With the new structure and the folks running the new structure,
53:39
SPEAKER_01: particularly the division that holds the Assassin's Creed IP,
53:43
SPEAKER_01: those are folks who have,
53:45
SPEAKER_01: you know,
53:45
SPEAKER_01: background in Web3.
53:46
SPEAKER_01: They're...
53:47
Their background isn't big single-player experiences that don't
53:54
try to monetize to
53:56
SPEAKER_01: an excessive degree,
53:57
SPEAKER_01: right?
53:58
So I think what we have to expect moving forward is a very
54:01
different company with
54:02
SPEAKER_01: different output would be my expectation and different goals.
54:07
SPEAKER_01: I'm sure there's a lot of, on the financial side, allocation of...
54:15
allocation of debt,
54:16
allocation of resources,
54:18
and how all that's being worked out.
54:20
SPEAKER_01: But I don't know.
54:21
I don't know if the Ubisoft that we,
54:23
Ubisoft,
54:24
however you'd like to pronounce it.
54:26
SPEAKER_00: Ubisoft here.
54:27
SPEAKER_01: Is going to be the same.
54:29
SPEAKER_01: I think this is a fundamentally different thing now.
54:32
SPEAKER_00: The thing is, we talked about this last week on the show.
54:34
SPEAKER_00: We talked about the fact that there's almost two industries.
54:36
SPEAKER_00: There's this live service industry,
54:37
which I often associate more with like going to the pub and
54:41
playing snooker or
54:42
SPEAKER_00: whatever.
54:43
SPEAKER_00: or going bowling than where,
54:45
and you've got this sort of single player or some of it's
54:48
throwaway games.
54:48
I feel like there's almost two different,
54:50
these are different consumer behaviours and needs.
54:54
They obviously,
54:55
you know,
54:55
time is limited,
54:56
but I do feel they also serve different purposes.
54:58
SPEAKER_00: And I talk about Microsoft, they've got Call of Duty and Minecraft.
55:01
They probably don't need much else,
55:03
Candy Crush as well,
55:04
but they still invest in
55:06
SPEAKER_00: Keeper and they're still investing in the outer worlds.
55:08
SPEAKER_00: I'm glad they are.
55:09
SPEAKER_00: And I do hope that these companies still do both of those things.
55:11
SPEAKER_00: I hope Ubisoft is as well.
55:12
SPEAKER_00: But obviously that shouldn't be the focus for them.
55:15
Those games need to be made at a reasonable budget with a
55:18
reasonable team size
55:20
SPEAKER_00: because and they can't where and they have to survive by their own means.
55:24
SPEAKER_00: And I think they can.
55:26
SPEAKER_00: It's just whether or not Ubisoft want to,
55:28
SPEAKER_00: you know,
55:28
if you're a big company and you want to focus all your energies
55:31
on Assassin's Creed
55:32
SPEAKER_00: and Far Cry and those sort of things,
55:34
SPEAKER_00: They have to ask themselves, is Prince of Persia a distraction?
55:37
SPEAKER_00: Is Beyond Good and Evil 2 a distraction?
55:38
SPEAKER_00: Or actually, is that okay for them to continue supporting?
55:42
SPEAKER_00: I'm hoping the answer is the latter.
55:43
SPEAKER_00: But with you, I expect a different outcome.
55:46
I don't know if the big publishers are nimble enough and can
55:51
move fast enough to
55:52
make some of these more story-based experiences or narrative
55:55
experiences at a
55:57
budget and in a time window that a smaller studio can or one
56:02
that's just dedicated
56:03
SPEAKER_01: to that kind of craft.
56:04
And I don't even think if they would want to spend their time
56:09
there as much when
56:10
SPEAKER_01: the potential return
56:13
It's tough to say that our risk or investment in this game is
56:19
worth this potential
56:19
return when some of the other potential return they may be
56:22
looking at could be
56:24
SPEAKER_01: considerably higher at a higher risk rate.
56:26
But that's the quintessential problem with AAA or quadruple A
56:32
games these days.
56:33
It's interesting you know it's a point to say that you know
56:36
Xbox are making all
56:37
these single player sort of adventures alongside their big live
56:40
service games but
56:41
you have to say that one of the biggest hits they've had on
56:43
their platform outside
56:44
of Oblivion has been Expedition 33 as a Game Pass title which
56:48
was a third part you
56:48
know should they not just be supporting independent studios
56:52
that are doing this
56:52
rather than necessarily going after themselves when actually
56:54
they better play maybe
56:57
um uh minecraft and calling duty i look not my problem um but i
57:01
do hope um okay you
57:02
know hope everyone comes out of it happy um i'll end with one
57:05
last story which
57:06
isn't a happy story unfortunately it's developer 1047 games
57:09
he's unlaunching
57:10
splitgate 2 the live service game has suffered some negative
57:13
feedback since launch
57:13
SPEAKER_00: i mean i saw the early player numbers i thought they seemed all right
57:16
SPEAKER_00: But it doesn't appear to have sustained.
57:18
So the title is returning to its beta state to work on the game
57:21
further and react
57:21
SPEAKER_00: to fan complaints as a result of rebuilding the core experience.
57:24
And it is laying off a number of employees and taking the
57:28
original split gate
57:29
offline because that that is that was costing the firm a
57:31
considerable amount of
57:33
SPEAKER_00: money.
57:35
uh yeah that's again that was another that was not a that's a
57:39
that just shows how
57:40
the thing is with live service games even if you have a big
57:42
launch that you know we
57:43
saw it vex defiant last year there's almost two challenges live
57:46
service games one
57:48
somehow convincing people to put down the games they're playing
57:50
and playing your
57:51
SPEAKER_00: game
57:52
that's hard and then it's really hard to stop them going back
57:56
and um and you know
57:57
we saw vex defiant i think lots of quality players probably put
58:00
down their
58:00
controllers well give that a go that seems interesting played
58:03
it for a bit and then
58:04
ended up going back to the game that they've spent you know
58:06
thousands of hours and
58:07
have their communities in and went back to it and then
58:09
ultimately that game ended
58:11
splitgate 2 it seems to me like you know it did an okay job
58:15
attracting people day
58:16
SPEAKER_00: one but it hasn't been able to um
58:19
keep them and now it's got a bit like remedy with FTC FBC
58:22
firebreak and now they're trying to
58:25
SPEAKER_00: rectify that.
58:25
And the good thing about live service games,
58:26
you can do that,
58:27
but it's so hard.
58:28
SPEAKER_00: So hard.
58:30
SPEAKER_00: Yeah.
58:30
SPEAKER_01: Like Siege was able to pull it off back in the day,
58:33
but it gets harder and harder over time as people become more
58:36
and more tied to the
58:38
SPEAKER_01: games that they regularly play,
58:39
SPEAKER_01: right?
58:41
SPEAKER_01: That's why it's so risky to even play in this space.
58:44
SPEAKER_01: But let me ask you, what term do you like more
58:49
SPEAKER_01: Unlaunch or negative growth.
58:52
SPEAKER_01: I'm torn between which more ridiculous term I like more.
58:59
SPEAKER_01: Because they're both so...
59:01
SPEAKER_01: just dumb as termed, but okay.
59:04
SPEAKER_00: Optimal ones, yeah, yeah.
59:06
SPEAKER_01: What are we doing?
59:06
SPEAKER_01: Unlaunching?
59:07
SPEAKER_01: The game's out, man.
59:08
SPEAKER_01: Like, you can't unla... I don't know.
59:10
SPEAKER_01: I agree with him, though.
59:11
SPEAKER_01: Many mistakes were made.
59:14
SPEAKER_01: And unfortunately, you know, some people had to pay the price for that.
59:18
SPEAKER_01: That wasn't the CEO that made the mistakes, but, you know.
59:22
SPEAKER_00: I think they did, was it, this is the studio where actually they did
59:26
SPEAKER_00: stop taking the salaries the leadership team actually did.
59:29
SPEAKER_00: I think this is one of those rare instances.
59:30
SPEAKER_00: I might be wrong.
59:31
SPEAKER_00: I might need to check this,
59:32
but I might check this live on the podcast where the actual
59:37
leadership team did.
59:37
SPEAKER_00: They didn't lose their jobs, obviously, but I think they might have.
59:45
SPEAKER_00: They're not to take.
59:46
SPEAKER_00: Yes,
59:46
SPEAKER_00: they've not the leadership team have stopped taking salaries,
59:49
SPEAKER_00: which is,
59:49
SPEAKER_00: you know,
59:50
SPEAKER_00: not the same as losing their jobs,
59:51
SPEAKER_00: but they at least
59:54
SPEAKER_00: There's something there,
59:55
SPEAKER_00: but yeah,
59:57
SPEAKER_00: it's unfortunately the way of things,
1:00:00
SPEAKER_00: but hopefully it comes out and it finds an audience,
1:00:03
SPEAKER_00: although I don't know,
1:00:04
SPEAKER_00: I'd be terrified backing a live service game this year,
1:00:07
SPEAKER_00: even when something like Bungie and Marathon has to suffer,
1:00:11
SPEAKER_00: whether that comes out or not.
1:00:12
SPEAKER_00: I hope it does, but it's, you know, yeah.
1:00:16
SPEAKER_00: Truth is,
1:00:17
SPEAKER_00: success in this industry also,
1:00:18
SPEAKER_00: if I'm a big company,
1:00:20
SPEAKER_00: I'm terrified because the reality is,
1:00:22
SPEAKER_00: you know,
1:00:23
SPEAKER_00: one of the big games,
1:00:24
the game that's getting more traction and more exciting than
1:00:26
the Sony-owned Bungie
1:00:28
SPEAKER_00: developed Marathon is Ark Raiders,
1:00:30
SPEAKER_00: which admittedly isn't being made by a small team that's,
1:00:32
SPEAKER_00: you know,
1:00:32
SPEAKER_00: never made a game before,
1:00:33
SPEAKER_00: the experienced,
1:00:34
SPEAKER_00: established team,
1:00:34
SPEAKER_00: but it's not exactly,
1:00:36
that game is really trending high on it and that's another
1:00:39
extraction shooter.
1:00:39
SPEAKER_00: I just, I'm, I'm,
1:00:43
SPEAKER_00: Success can come from anywhere,
1:00:44
SPEAKER_00: and I think that makes it scary for big companies when,
1:00:47
SPEAKER_00: you know,
1:00:48
SPEAKER_00: in mobile,
1:00:49
SPEAKER_00: the big companies win.
1:00:50
SPEAKER_00: Exactly.
1:00:51
SPEAKER_00: And in PC and console,
1:00:53
SPEAKER_00: it's not quite...
1:00:54
SPEAKER_00: I mean,
1:00:54
SPEAKER_00: obviously,
1:00:55
SPEAKER_00: live service-wise,
1:00:56
SPEAKER_00: but...
1:00:57
SPEAKER_01: On the live service side,
1:00:58
SPEAKER_01: yes.
1:00:59
SPEAKER_01: On the other side, it's different.
1:01:00
SPEAKER_01: I mean, with the big companies, the big ships turn slow.
1:01:04
And so anything you're seeing now is a result of decisions made
1:01:08
two years ago
1:01:08
SPEAKER_01: because,
1:01:09
SPEAKER_01: you know,
1:01:10
SPEAKER_01: you start investing in a game.
1:01:12
SPEAKER_01: You look at Suicide Squad.
1:01:14
SPEAKER_01: Suicide Squad was the last game I did the P&L for at Concept in 2016.
1:01:22
And that game took a long time to come out and eventually it
1:01:25
changed over time,
1:01:26
SPEAKER_01: but you green light a game,
1:01:29
SPEAKER_01: especially a big live service game that requires a lot of investment,
1:01:32
you green light a game for something that might come out in two
1:01:34
or three to four
1:01:35
SPEAKER_01: years.
1:01:36
And so once you've dumped a year or two of everyone's time and
1:01:39
money into a project
1:01:41
SPEAKER_01: and you see the market conditions change,
1:01:43
it still takes you a year to course correct at a big company
1:01:46
because so much is
1:01:47
SPEAKER_01: already invested.
1:01:49
SPEAKER_01: I think that's part of the problem we're seeing is people are going,
1:01:53
SPEAKER_01: why are these companies still coming out with these games?
1:01:56
SPEAKER_01: These games have been in the pipe for four years.
1:01:58
SPEAKER_01: This has got to come out in some way, shape, or form.
1:02:03
The reaction to what market conditions are expected to be that
1:02:06
take place now,
1:02:07
SPEAKER_01: you're not going to see for two to three to four years in the future.
1:02:11
SPEAKER_01: It's an impossible, highly risky,
1:02:15
SPEAKER_01: game to play.
1:02:17
And I'm glad I don't have to do it anymore because I'm no
1:02:19
longer in publishing.
1:02:21
SPEAKER_00: No, but they are looking at you for answers.
1:02:25
SPEAKER_00: But Matt, I've taken up way too much of your time.
1:02:28
SPEAKER_00: We've gone over time and I absolutely love talking to you, though.
1:02:32
SPEAKER_00: I would have you on every week if I could.
1:02:34
SPEAKER_00: So if you would come on every week, if you weren't so busy.
1:02:38
SPEAKER_00: But thank you so much for your time today.
1:02:41
SPEAKER_01: That was so kind.
1:02:42
SPEAKER_01: Thank you very much.
1:02:43
SPEAKER_01: Pleasure.
1:02:43
SPEAKER_01: I hope all the sales sickos had a good time.
1:02:46
And feel free to yell at me on the internet about it like you
1:02:50
do everything else.
1:02:51
SPEAKER_00: But I love you and appreciate you.
1:02:55
SPEAKER_00: Don't yell at me.
1:02:58
for today's episode of the game business show again thank you
1:03:01
to matt for guest
1:03:01
hosting this week we will be back on tuesday for our next
1:03:04
feature show but we're
1:03:05
taking a one week break from the news show next week as it's
1:03:08
our summer holidays in
1:03:09
the uk but we are back to normal the following week if you want
1:03:12
to make sure you
1:03:12
don't miss a post or an episode head to thegamebusiness.com and
1:03:16
sign up to our
1:03:16
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1:03:19
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1:03:20
SPEAKER_00: platform of choice until next time thank you for tuning in