This week we found out Call of Duty will remain on PlayStation, the FTC has withdrawn its appeal, and Microsoft are confident of an arrangement with the CMA. The Microsoft-Activision Blizzard acquisition looks set to go ahead, and we discuss this below in more detail.
News of the week
So, with a 10-year Call of Duty licensing deal struck, the journey, it finally seems, for the most highly anticipated gaming takeover will be completed. Last week we reported Microsoft’s victory in the federal court, paving way for the deal in the US (the FTC’s administrative challenge was suspended this morning), and now they have negotiated the acceptance of the deal from its most staunch opponent. It seems only a matter of time before they use this new deal with Sony, and perhaps some tweaking of its Cloud Gaming strategy, to persuade the CMA to reverse its position and agree to sanction the deal. Microsoft and Activision Blizzard have extended their deal deadline to the 18th October, so time is back on their side. As a reminder, the CMA blocked the deal over competition concerns around cloud gaming, whilst other regulators, including the EU, Japan and China, all approved the acquisition. It feels now that there will be some amateur dramatics to save face whereby the CMA will approve the deal, claiming they have won some meaningful changes to address their concerns. In reality Microsoft will have to change little to get it through. Either way, the gaming landscape will be changed forever. Whether for better or worse, only time will tell. Source: cnbc.com
The beginning of the end of loot boxes?
The Association for UK Interactive Entertainment, Ukie, has unveiled plans in an attempt to restrict child access to loot boxes through the introduction of 11 new guidelines. They believe this should provide a framework that will allow the industry to self-regulate the use of loot boxes for children. The issue of loot boxes has been a contentious one, with critics likening the setup to gambling. Perhaps the best example of how it works is FIFA Ultimate Team packs, whereby players can spend real money to open a ‘pack’ that will contain a set number of players, meaning you stand a chance of obtaining the very best player in the game, but often end up with worthless mediocrity. Technically, this is not gambling, as the reward isn’t financial, but there is still the high that comes from hoping to win something completely down to chance- something that adults get addicted to, let alone children. The Gambling Health Alliance released a report outlining the impact, which included the fact that 33% of gamers did not feel in control of their spending. Statistics such as this has lead countries including Belgium and the Netherlands to already ban them for U18s. From a game monetisation perspective, they are an unbelievably effective tool. They provide constant income throughout the game lifecycle and with the release of new game items (for example in Fifa, they could release a historical player like Pele which will see more people buy packs), which require minimal development expense, generate disproportionate income via loot boxes. Overall, we are of the opinion that this is a good measure to being in to protect vulnerable clients. Source: bbc.co.uk
AI will lead to more games and more jobs, fact or fiction?
The debate continues to rage about the impact of AI on gaming, and this week the head of the non-profit trade association representing the UK’s games industry had his say. Dr Richard Wilson was bullish in his outlook stating that reducing costs, driven by AI productivity gains, will see an increase in game studios and an increase in the number of games. We are of the opinion that AAA games will actually be trapped by the premium they charge over indie games that will doubtless become more sophisticated through the use of AI. This will lead them to have to spend more on their up market product, so whilst productivity will go up, this will just translate to a more complex game and actually not bring down costs. This is similar to the invention of other productivity tools such as Unity, which makes game development easier but has seen only increasing costs at a AAA level. However, whilst developers may benefit as Dr Wilson predicts, there will likely be a drop in demand for other areas of game development. In earlier editions we reported how the art creation side is already seeing a significant impact. Famed digital artist Greg Rutkowski has claimed he has been used 400,000 times in prompts to generate images in his style without his consent. Source: bbc.co.uk
In other news...
• Bandai Namco pulls the plug on Gundam Evolution
• India clarifies 28% tax only applies to real money games, not video games
• GGWP raises US$10m for AI moderation platform.
• Screen Australia backs 23 studios with US$2 million in funding
• Bungie and EA veterans form Look North World