The business of video games – the official thread

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SerialCeler
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PostThe business of video games – the official thread
by SerialCeler » Tue May 08, 2018 1:07 pm

We don't have a thread discussing the business-side of the games industry – financial results, mergers and acquisitions, corporate news etc. I spend most of my life writing about business, so I find this stuff pretty interesting (perhaps I'm in the minority?).

But increasingly, and especially at the top end of the market, the business-side holds more sway than the creative-side when it comes to decisions about what gets developed, and ultimately what gets played by us.

So this is the thread to discuss it in.

First up, from today's newspaper:

Worms maker Team17 announces £230m float

The British company behind the classic video game series Worms has plans for a float which could value the company at £230m.

Team17, the West Yorkshire-based video game maker, announced its intention to float today on London’s AIM secondary market.

Debbie Bestwick, chief executive of Team17, told The Daily Telegraph: “We’ve been incredibly successful and we are passionate about making video games. The timing is good for us.”

Team17 has grown to a team of around 140 people, with revenues of £29.6m in 2017 up from £13.5m the previous year. It has offices in Wakefield and Nottingham with a portfolio of 90 games. The company underwent a management buy-out in 2011, before securing additional private equity backing in 2016, selling a £16.5m minority stake to LDC, the Lloyds-backed private equity fund.

The company is primarily focused on independent PC and console gaming titles, with a handful of mobile games from its most popular titles. Its older titles still secure the company significant revenue, with its back catalogue accounting for 50pc of its revenues in 2017.

“Digital distribution is a marvellous thing,” Ms Bestwick said. “It extends the life cycle of products, and Worms, launched in 1995, is still on sale.”

The company also provides marketing and funding to independent studios for a revenue share of their games.

The global console and PC gaming market is expected to grow from $49bn (£36bn) in 2017 to $59bn by 2021. The UK gaming market is estimated to be worth around £5.1bn, according to industry trade body UK Interactive Entertainment.


This could be good news for gamers if it generates more revenue for them to publish more titles. but going public always brings additional scrutiny to decisions and (generally, I would argue) decreases the risk appetite for taking chances with new material.

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Knoyleo
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PostRe: The business of video games – the official thread
by Knoyleo » Tue May 08, 2018 1:23 pm

I can't read that headline without thinking it's been run through the swear filter.

the eponymous bollock
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PostRe: The business of video games – the official thread
by the eponymous bollock » Tue May 15, 2018 9:39 pm

No discussion of the fact that Boss Key folded yesterday?

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Met
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PostRe: The business of video games – the official thread
by Met » Wed May 16, 2018 4:50 am

Probably because Boss Key is a punchline. It serves as a decent lesson in why chasing trends for an easy cash-grab is a bad idea. They released not-Overwatch a year after the Overwatch audience were deeply entrenched and expected them to just migrate over. Lawbreakers had legendarily low numbers because there was no reason to play it instead of Overwatch, where their time and progress were already placed. Then they explicitly tried to ride the wave of Battle Royale games with Radical Heights, Cliffy even going as far as to say "There is room for two, maybe three games in a genre. We hope to be the third name in BR" or something to that effect.

PUBG jumpstarted the bandwagon, Fortnite refined it. Those are established. Then everyone and their mother announced a BR game or mode. So what was Boss Key's solution to carving their niche? Just early access it to all hell and give it no real defining gimmick. Naturally with nothing to keep people hooked they went back to the established game. Radical Heights lasted 1 month before the company closed.

The whole thing and Biffy Clyro's ego would be hilarious if he didn't let his staff know with the same tweet he told everyone else with and wasn't getting angry at Epic for trying to headhunt people who now don't have a job.

But on a selfish level I'm angry because he posted concept art for a game he was wanting to make if RH didn't do abysmally. It was a game about samurais riding dragons off of floating island aircraft carrier things to fight zombies in a co-op PVE setting.

strawberry float! That's a legit interesting game idea if you pull it off. Instead you try and push cheap knockoffs that nobody is interested in? Gears was a great and revolutionary game. Unreal and Unreal Tournament, despite not having personally played them, are apparently held to a high regard. He clearly has talent as a game dev, and that wasted potential, when you throw gooseberry fool like this at me is easily the most disappointing thing about this whole mess.

Cliffy deserves this Icarian outcome, but I can't help but feel bad for the rank and file at BK.

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PostRe: The business of video games – the official thread
by Gemini73 » Wed May 16, 2018 10:00 am

When CoD and Battlefield were dominating the online, FPS arena last generation so many development studios/publishers attempted to jump on the bandwagon and most, if not all, failed to gain a foothold. What's amusing, though, is that industry players haven't looked at that scenario before plunging all their resources into producing a BR title of their own when PUBG and Fortnite already have the genre wrapped up.

Cliffy B's Lawbreakers was doomed before it even got off the first draught. I've no doubt many more studios efforts to carve out a niche for their BR game will soon be scratching their heads in puzzlement as they try to figure out why their entry failed to put a dent in two already massively established BR games.

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Peter Crisp
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PostRe: The business of video games – the official thread
by Peter Crisp » Wed May 16, 2018 10:08 am

It really is going to be a bloodbath if we do see many other developers go for a Battle Royale game at E3 as it does seem that the genre is saturated already with the big 2 being all that people need or want.

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Posted 16th March 2016. Let's see.
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PostRe: The business of video games – the official thread
by BID0 » Wed May 16, 2018 10:26 am

Isn't there a paid version of Fortnite?

I can see other games putting out their regular game at a price with a free BR mode included that's paid for with MTs.

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PostRe: The business of video games – the official thread
by Gemini73 » Wed May 16, 2018 10:31 am

Peter Crisp wrote:It really is going to be a bloodbath if we do see many other developers go for a Battle Royale game at E3 as it does seem that the genre is saturated already with the big 2 being all that people need or want.


Ironically, like Battle Royale, there will only be one overall winner. ;)

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PostRe: The business of video games – the official thread
by Tafdolphin » Wed May 16, 2018 10:58 am

Met wrote:Probably because Boss Key is a punchline. It serves as a decent lesson in why chasing trends for an easy cash-grab is a bad idea. They released not-Overwatch a year after the Overwatch audience were deeply entrenched and expected them to just migrate over. Lawbreakers had legendarily low numbers because there was no reason to play it instead of Overwatch, where their time and progress were already placed. Then they explicitly tried to ride the wave of Battle Royale games with Radical Heights, Cliffy even going as far as to say "There is room for two, maybe three games in a genre. We hope to be the third name in BR" or something to that effect.

PUBG jumpstarted the bandwagon, Fortnite refined it. Those are established. Then everyone and their mother announced a BR game or mode. So what was Boss Key's solution to carving their niche? Just early access it to all hell and give it no real defining gimmick. Naturally with nothing to keep people hooked they went back to the established game. Radical Heights lasted 1 month before the company closed.

The whole thing and Biffy Clyro's ego would be hilarious if he didn't let his staff know with the same tweet he told everyone else with and wasn't getting angry at Epic for trying to headhunt people who now don't have a job.

But on a selfish level I'm angry because he posted concept art for a game he was wanting to make if RH didn't do abysmally. It was a game about samurais riding dragons off of floating island aircraft carrier things to fight zombies in a co-op PVE setting.

strawberry float! That's a legit interesting game idea if you pull it off. Instead you try and push cheap knockoffs that nobody is interested in? Gears was a great and revolutionary game. Unreal and Unreal Tournament, despite not having personally played them, are apparently held to a high regard. He clearly has talent as a game dev, and that wasted potential, when you throw gooseberry fool like this at me is easily the most disappointing thing about this whole mess.

Cliffy deserves this Icarian outcome, but I can't help but feel bad for the rank and file at BK.


Those concept art tweets are indicative of the man's personality: play the troll out to trigger 'salty' snowflakes, throw a temper tantrum when your awful business strategy fails.

Still, I do think there was a lot of bad luck involved, at least with Law Breakers. A friend of mine actually bought it and said it was a really great shooter and not really anything like Overwatch. Unfortunately, because of the marketing team's decision to sell it as a 'hard-core' 'mature' alternative to that game, no-one else had the least bit of interest in it. I believe Blezinski when he repeatedly stated his team were working on LB well before the Overwatch announcement trailer, but they then had a whole year to work on the strategy of how to sell the thing. Apparently that strategy boiled down to "Put CliffyB everywhere and let him talk gooseberry fool about Overwatch players."

Radical Heights however had 'desperation' written all through it from the get go. It was apparently carved out of nothing in four months and was obviously released as a last chance ride that would either hit a nerve and win the team a cash flow, or sink and take the studio with it. The studio was probably dead already without RHs, so what was the harm? Unfortunately for them, it did indeed sink and not only failed to impress but spoiled any reputation the studio had left, turning them as you say into a band-wagon jumping punchline.

There's a lot of parallels to be drawn between CliffyB and John Romero here. Both were one time video gamer superstars responsible for a milestone franchise, both suffered from massive egos and a terrible business sense and both believed personality alone could sell their games. At least Romero was a trailblazer for this sort of failure, CliffyB really should have listened to the lessons learned.

EDIT: UUUUURgh, just read through the full twitter thread of that concept art. The game was pitched and rejected. This sort of gooseberry fool happens all the time. But still, Cliffy can't help himself:



Acting like the pariah again. Which strawberry floating publisher is going to take a $40 million punt on a studio whose last game became a byword for failure? Why not pitch a smaller game, steady the books, and come back to your dream project at a later date? No. It's CliffyB! All big, all the time!

Also, someone suggests in the thread that, as the 4 pieces of artwork look good, maybe it wasn't the game, maybe the publishers didn't like Cliffy's in-your-face attitude.



UUUURGH

EDIT 2: strawberry float it, I straight up asked him if he'd tried to pitch any smaller games.


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PostRe: The business of video games – the official thread
by Trelliz » Wed May 16, 2018 11:14 am

I think it was partly the arrogance, cliffy's "i want to make another billion dollar IP" smacked of hubris and a sense of entitlement more than if hed said "i want to make another great game."

Also it was odd how radical heights was extreme early access with placeholder art everywhere but the microtransaction stuff was perfectly in place and geared up ready to go...

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PostRe: The business of video games – the official thread
by Peter Crisp » Wed May 16, 2018 12:47 pm

Yep, it amazes me that that he felt the need to ask for so much money.
Is it really that impossible to have a team of say 10 people (on an average of £75K a year (£150K after tax and pension and stuff) so £750K per person for a grand total of £7.5m wages) for 5 years with maybe double that for office costs for a grand total of £15m with a £5m marketing budget and that's being really generous to staff and having a luxury office.
That's halved his budget with 5 bloomin years to make a game.

I have no idea how they spend so much money unless he wanted to hire some big name voice actor or decide to pay himself a crapload of wages.

jiggles wrote:Nobody with a VR headset is going to be using it regularly this time next year, let alone in 4 years time.


Posted 16th March 2016. Let's see.
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PostRe: The business of video games – the official thread
by Cheeky Devlin » Wed May 16, 2018 1:32 pm

They needed something to keep income flowing and Radical Heights releasing in Early-Access when it did strikes me as an attempt to keep the company going a while longer. If Lawbreakers had done better I doubt RH would have launched when it did.

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PostRe: The business of video games – the official thread
by the eponymous bollock » Wed May 16, 2018 6:54 pm

Peter Crisp wrote:Yep, it amazes me that that he felt the need to ask for so much money.
Is it really that impossible to have a team of say 10 people (on an average of £75K a year (£150K after tax and pension and stuff) so £750K per person for a grand total of £7.5m wages) for 5 years with maybe double that for office costs for a grand total of £15m with a £5m marketing budget and that's being really generous to staff and having a luxury office.
That's halved his budget with 5 bloomin years to make a game.

I have no idea how they spend so much money unless he wanted to hire some big name voice actor or decide to pay himself a crapload of wages.


I read that when it closed Boss Key was around 70 people.

Met wrote:PUBG jumpstarted the bandwagon, Fortnite refined it. Those are established. Then everyone and their mother announced a BR game or mode.


I see this sentiment a lot. What are the BR games on the market at the moment because all I can think of are H1Z1, PUBG and Fortnite, which is hardly everyone and their mother.

Met wrote:The whole thing and Biffy Clyro's ego would be hilarious if he didn't let his staff know with the same tweet he told everyone else


I’m pretty sure this is speculation or has already been confirmed not to be true.

Last edited by the eponymous bollock on Wed May 16, 2018 6:59 pm, edited 1 time in total.
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PostRe: The business of video games – the official thread
by Dig Dug » Wed May 16, 2018 6:59 pm

Might be worth including games that aren't straight up BR's but definitely laid the foundations for them such as the mod and eventual full release of DayZ.

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Met
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PostRe: The business of video games – the official thread
by Met » Wed May 16, 2018 7:04 pm

the eponymous bollock wrote:
Met wrote:PUBG jumpstarted the bandwagon, Fortnite refined it. Those are established. Then everyone and their mother announced a BR game or mode.


I see this sentiment a lot. What are the BR games on the market at the moment because all I can think of are H1Z1, PUBG and Fortnite, which is hardly everyone and their mother.


https://www.nerdmuch.com/games/155479/u ... ale-games/

22 there. Well, 21 now because lol RH. Not counting the rumours of CoD, Battlefield, Red Dead etc.

In a market where 3 will maybe get a foothold, of which 2 are established, yeah, that's mass saturation.

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PostRe: The business of video games – the official thread
by the eponymous bollock » Wed May 16, 2018 7:20 pm

Met wrote:
the eponymous bollock wrote:
Met wrote:PUBG jumpstarted the bandwagon, Fortnite refined it. Those are established. Then everyone and their mother announced a BR game or mode.


I see this sentiment a lot. What are the BR games on the market at the moment because all I can think of are H1Z1, PUBG and Fortnite, which is hardly everyone and their mother.


https://www.nerdmuch.com/games/155479/u ... ale-games/

22 there. Well, 21 now because lol RH. Not counting the rumours of CoD, Battlefield, Red Dead etc.

In a market where 3 will maybe get a foothold, of which 2 are established, yeah, that's mass saturation.


Hmmm, reading that feels a bit like stating there’s over saturation in the soft drink market and citing every group of kids selling lemonade on a street corner as evidence. I see your point though.

22 does include COD and BR btw.

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PostRe: The business of video games – the official thread
by the eponymous bollock » Mon May 21, 2018 10:43 pm

On the topic of Fortnite, from the other thread as this is a BIG business move...

Monkey Man wrote:
Fortnite Competitors!

Grab your gear, drop in and start training. Since the launch of Fortnite Battle Royale we’ve watched the passion for community competition grow and can’t wait to empower you to battle with the best.

In the 2018 - 2019 season, Epic Games will provide $100,000,000 to fund prize pools for Fortnite competitions. We’re getting behind competitive play in a big way, but our approach will be different - we plan to be more inclusive, and focused on the joy of playing and watching the game.

Stay tuned for more details about competitive structures and eligible platforms in the weeks ahead!

https://www.epicgames.com/fortnite/en-U ... tournament




Looks like Fortnite is here to stay for the long term. It’s pretty clear what it says about Epic’s priorities too as this is AAA game budget money.

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PostRe: The business of video games – the official threa
by jawafour » Tue May 22, 2018 7:41 am

One hundred million dollars of prize money... for one season :shock: . This serves to highlight the level of profit that is attainable by mega-hit games. It's incredible to think that Epic can put up that kind of cash even without the "normal" sixty dollar entrance fee for console games; the in-game payment transactions must be absolutely phenomenal. I wonder if any "bigger" names in games such as CoD and Battlefield could move to that model? Then again... "Why not have both?" etc.

- - - - - - - - - -

Meanwhile, Sony is to buy a controlling stake in EMI Music Publishing for $2.3bn (£1.71bn) as it looks to boost its music portfolio.
The deal would mean Sony would indirectly own about 90% of the firm and its some two million songs by artists from Queen and Carole King to Alicia Keys and Pharrell Williams.


Looking ahead...
...The announcement comes as Sony prepares to unveil its mid-term plan on Tuesday... Sony is expected to unveil a three-year plan to move away from making any more gadgets and towards a bigger focus on gaming subscriptions and entertainment.


Seems like PS Plus is quite the profit-maker.

Edit: The quote source is BBC News.

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PostRe: The business of video games – the official thread
by Zartan » Tue May 22, 2018 9:52 am

That's just it, if they do not match this prize pool all the top players are going to jump games, I mean COD and Counter Strike are both shooter games, so why are they training on that rather than moving across to Fortnite. They are close enough that most skills should apply.

Heck I follow the competitive Street Fighter scene and the winner of the top prize in 2016 ($250,000) said only last week he was uninstalling Fortnite as it was distracting him from his Street Fighter practice, and after this announcement he just had a picture of him reinstalling it on twitter

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PostRe: The business of video games – the official thread
by lex-man » Tue May 22, 2018 10:19 am

Gemini73 wrote:When CoD and Battlefield were dominating the online, FPS arena last generation so many development studios/publishers attempted to jump on the bandwagon and most, if not all, failed to gain a foothold. What's amusing, though, is that industry players haven't looked at that scenario before plunging all their resources into producing a BR title of their own when PUBG and Fortnite already have the genre wrapped up.

Cliffy B's Lawbreakers was doomed before it even got off the first draught. I've no doubt many more studios efforts to carve out a niche for their BR game will soon be scratching their heads in puzzlement as they try to figure out why their entry failed to put a dent in two already massively established BR games.


Isn't this always the case. At one stage their was a huge number of DOTA clones in the works and I remember back in the 90's every man and his dog seemed to be making bad RTS games.


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