Epic Network Effects🕸️🐦
Sony bought themselves some Epic(ness)🙌, Twitter looks into subs 🐦and *a lot* of gaming-related short pursuits 🕹️
The news in gaming last week was that Sony is investing $250 million in Epic Games, makers of Fortnite and, more importantly, the Unreal Engine tool that enables anyone from individuals to large companies to develop video games from scratch.
What Sony’s $250 mil bought is a minor stake in the company but I wouldn’t be surprised if we started seeing some fruits of this partnership in the near future. Unreal Engine was already put to work in developing blockbuster cinema or TV products, I see no reason why content coming out of Sony’s Pictures and Music arms couldn’t leverage the technology in the future. How cool will it be if both the next Spiderman movie and videogame would be made using the same software, Unreal Engine 5?
While the deal makes sense in a moment when Epic is valued at more than $17B and only going up, this deal would have been near impossible a few years ago. For years, both Sony and Microsoft have fought to block players from other platforms from interacting with others using different hardware, in what was a flawed effort to reduce cannibalization and platform-hopping. The success of proto-multiverse gaming products like Fortnite seems to have opened their eyes to the potential strong network effects that, if achieved, will lift all boats. I expect more of this type of cross-platform efforts to be developed for next-gen consoles, as a character of a TV show shot in UE4 said, this is the way…
From Sony’s perspective, a partnership with Epic gives them a strong ally in the upcoming console war with Microsoft come this Fall. First-party gaming studios owned by Sony would benefit immensely if they had access to unreleased UE5 features compared to other developers, benefits that could translate in shorter development times and a better P/L ratio as a result of this.
Looking at the rapidly accelerating nature of the VR market and considering the imminent emergence of the AR market over the next five years, it’s very wise for Sony to bet on the company making the tool that helps build those experiences now. Whether they intend to build mixed reality experiences for the successor of PSVR or blindside everyone and build a physical AR device in the future is pure speculation at the moment, but Sony appears to have recognized that the future won’t wait for them to keep up with the times. And rightfully so.
With the Epic Store looking to address more platforms in the future, it will be interesting to see what synergies the two companies can create on the digital distribution front in the future. With Epic’s storefront quickly catching up to Steam in terms of MAUs —a good metric to start the network effects flywheel on digital stores— and Sony killing it when it comes to sales of their exclusive IP titles, some sort of synergy in this area would make a lot of financial sense for both sides.
A recent job posting from Twitter announced it was hiring people for a new product that had a subscription business model, spending the rumor mill into a spin once again.
Over the past six months particularly, it became increasingly harder for platforms who put their livelihoods in the hands of advertisers —and their dollars— to motivate their lack of intervention on removing inappropriate content from their sites by invoking free speech or bringing up the public square in Ancient Greece. After running a survey a few years ago on the topic of a subscription model, the addition of activist investors, who campaigned for the firing of the current founder and CEO in an effort to focus on growing user numbers and revenues, is putting a lot of pressure on the leadership group.
While it’s still unclear if the subscription payment would be for gaining access to the platform, subscribing to individual accounts, some specific features inside or anything else under the sky for that matter, the company wants to at least give the impression they’re looking to improve some key metrics and appease shareholders. This is especially important now, as Twitter reported a loss for the last financial quarter as marketing budgets shrink for the uncertain future in front of us.
Microsoft is apparently blocking developers from charging players twice in the case they want to acquire the same game for current-gen and next-gen consoles. While some developers —e.g. Naughty Dog, CD Project Red— have explicitly mentioned that this will be the case for their new games to be launched this year, others have not, and, from Microsoft’s action last week, it looks like not everyone was on board with this practice. While at the moment this action went out as a ‘recommendation’ for publishers and some of the big ones —like ‘GTA’ developer Take-Two— have chosen to dismiss it and instead offer bundles that mix current and next-gen version of their games, it’s unclear how a similar decision coming from a smaller developer will affect them going forward. Microsoft developed their ‘Smart Delivery’ technology so players can buy a game and then play it across consoles with full support for achievements and saves, not singing along might get developers less visibility in the store or exclude them altogether from other opportunities Xbox chooses to do in the future 🎮🛡️
Staying with the Microsoft theme, the company recently licensed a controller from 3rd party retro controller designer 8Bitdo that’s destined for use with mobile phones. While the reasoning behind this move is entirely tied to xCloud, Microsoft’s game streaming service now available on Android phones in a closed Beta program, the company says the September 21st shipping date of this controller is not related to the debut date of xCloud itself. This tracks with my previous takes on this, I doubt either next-gen console maker will launch their respective streaming service before, or even at the same time as, the flagship console itself out of fear of sales cannibalization 🎮☁️
Amazon doubled down on its action of pulling their first triple-A gaming product back behind a Restricted Beta gate by also announcing the second product of this magnitude, which was slated for release this summer, will be delayed until next year. The reasons cited by developers were ‘a need to further develop the mid and endgame’ phases of the experience but regardless of the reason and as I’ve said before, this is a good decision that few traditional, publicly-traded gaming companies can afford to take in this day and age 👔💰
Another week, another retro gaming device, this time from SEGA. The device has been in development for two years now and it will have support for HDMI and the control elements are replaceable/customizable. While the Astro Mini Arcade will only release in Japan for now, the sounds will have the signature of the original composer fr the SEGA-AM 2 console and it will don two titles that never released in the country to begin with: ‘Dark Edge’ and ‘Golden Axe: The Revenge of Death Adder’. Time to cautiously browser for plane tickets to Japan ❤️🕹️
Palantir might be the biggest company you never heard above, so if you’re not excited or haven’t even heard of their imminent IPO, I don’t blame you. They’re a data company that’s been in hot water with the investing crowd —that abruptly discovered their moral compass in recent years— for dealing with the US government and its defense department. The company avoided going public, probably because the nature of their work means they deal mostly in top-secret level contracts and making its case in front of investors would be harder than a conventional company. Now that the stock market is back up, they seem to think there’s an opportunity for a company their size to go public and that initial S-1 form should read similarly to something out of ‘Zero Dark Thirty’ or other fiction content with similar themes 👀👀
New boundaries are broken in the field of Virtual Reality increasingly often right now, the latest one: a live, remote, participatory theater play anyone can attend from home. After paying the $15 you enter the shared VR space at a previously-agreed time with other participants whilst an actor guides you through the entire experience. You can gesture and travel through the virtual space but not speak, you’re a silent participant. One line really stuck with me from this article, “With VR, you’re just not limited to reality. You’re only limited by imagination. The most exciting stuff is yet to come.” While these experiences aren’t going to replace theater completely and people will go back to those IRL experiences when they reopen, the accessibility fo the experiences open up a whole new world 👓🎭
As always, the upcoming game in the ‘FarCry’ franchise has been teased and leaked on a storefront ahead of its official announcement. We see all kinds of tactics when it comes to releasing new titles in an effort to stir things up within the fan community and Ubisoft’s teaser featuring Breaking Bad’s Giancarlo Esposito appears to have done a great job at that once again. But as Riot’s brilliant launch strategy behind ‘Valorant’ showed, launch strategies are good at getting people through the door early on, but the quality of the game is what keeps them playing in the long-term. Monday Update: ‘Assassin’s Creed’ has been butchered into a watered down version of ‘For Honor’ and you can watch the FC6 trailer here, it’s a banger ⚗️🔫
Videogame phenomenon ‘The Sims’ is being made into a reality TV show and this is the third announcement about a videogame franchise being adapted as a TV product in the past two weeks. This is an interesting one though as the product is not a dramatic adaptation, but a ‘reality’ product, catering to a completely different target audience. This opens the door —and our minds— to more diverse programs based on gaming IPs in the future, and considering the wide gamut of game genres out there, it’s easy to predict some new TV genre will be born out of this collaboration. More insights on future crossovers between gaming<->TV/cinema in my previous newsletter 🎮❤️📺
If you were one of those people who were waiting for the data to tell them ‘Hamilton’ was worth watching, here it is. Now if only Disney+ had one of these up their sleeves for the next 12 months, that’d be great 🎶🎭🎶
How does one even say ‘no’ to a dinosaur survival horror video game?
The future of happiness never looked sadder😁😁
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