A boost for the UK this week with Creative UK unveiling a new fund to add US$35m Creative Industries unveils new €35m plan to grow UK entertainment sector in partnership with Triodos Bank. This is one area it seems the government have stuck to their guns, with their target to add £50bn more to creative industries clearly being actioned. The chief executive of Creative UK highlighted the key reasons for this sharpening of focus, “Over the past decade, the UK’s Creative Industries have grown more than 1.5 times the rate of the wider economy, currently generating £108 billion in economic value and employing 2.3 million people”. The creative industries, including video games, are an increasingly important pillar in the UK’s economy.
We also note the jump in shares of Japanese video game company Capcom, +6%, due to the success of its new mobile game 'Monster Hunter Now', developed with Niantic. The game, which combines monster fighting action with location-based gameplay, has been downloaded 5 million times since its launch and it is currently the top grossing app in Japan on Apple's iOS. This continues to demonstrate the value that can be generated from the correction execution of a free-to-play strategy, relying on in-app purchases that AppMagic estimate has reached US$11.4m.
News of the week
Sony CEO, Jim Ryan, steps down
The PlayStation CEO and president will leave at the end of March 2024, bringing to an end his tenure of five years in the row and a stunning 30 years in total at the company. He was a complicated figure when trying to understand where he stood on indie games. He had an interview in 2017 with gamesindustry.biz after he removed indie games form their E3 its game previews video, which many saw as a precursor to his focus on AAA title through 2018/29. However, he was also credited by the leader of Sony’s indie task force with refocusing the platform on increasing the contribution, to PlayStation, from indie games. We will pay keen attention to who Sony opt to appoint as a long-term replacement, as if they are more indie focused we can expect to see tailwinds for that sector of the market as one of the biggest players in their industry throw their weight behind it. However, this could also lead to increased competition in the space for indie publishers.
Whoever replaces Jim will inherit an increasingly dominant position in the console market, but will likely have to face the challenges of an expansion into live ops, potentially cloud gaming, and increasing competition from the likes of Netflix and Amazon.
The writers strikes are over...but not for video games
SAG-AFTRA members vote to authorize strike against many major Video Game companies. The vote had a whopping 98.32% in favour of strike action, after the two sides could not agree on the terms for a renewal the Interactive Media Agreement. This agreement is between the actors and many of the gaming industries biggest names, including Activision, Electronic Arts, Epic Games, and Take 2. This could well have severe implications for the industry and may cause many games to be delayed if the issues cannot be resolved quickly. It is also bad news for Keywords who already quoted this problem in its 1H23 results when revising down full year guidance. On the other hand, this might provide a boost for indie publishers if delays to the major players give them clean air into which to release games. We will continue to keep tabs on the situation and keep you informed on any developments, but it is worth bearing in mind when modelling future performance for some of these companies. Source: nme.com
Is the 1000-hour indie game realistic?
Earlier this week we heard tinyBuilds CEO, Alex Nichiporchik, outline his vision for tinyBuild to create a relatively low-budget indie game that will be able to engage users for 1000-hours and thus provide a long tail for player monetisation. Crucial in this is their ploy to utilise user generated content, UCG, and procedural generation. For those unaware of what procedural generation is, it is effectively a very quick and effective way to create similar, but still different, objects with little additional input from developers. Examples of this are Unity’s Treegen (that can easily and rapidly create diverse forests for developers), and space exploration games like Frontier’s Elite Dangerous and, more recently Bethesda’s Starfield, which use procedural generation to create new. This had us scratching our heads at Peel Hunt. To compete in this 1000-hour space, you need games of a quality that players want to spend a very long time one. Starfield uses many of the things that tinyBuild said they would use and it still cost at least US$200m to develop, though final estimates are though to be double this. It seems unlikely that tinyBuild could bridge into online multiplayer games, like call of duty, which can also absorb many gaming hours, due to the costs associated with hosting the servers. It could be possible that they manage to achieve this, but at the moment we fear they may be embarking down a very long, and expensive, road...which might not even have an ending. Source: tinybuildinvestors.com
In other news...
• FIFA 23 taken down from online stores before the launch of EA sports FC 24
• Epic are laying off over 800 staff
• FTC plans new in-house hearing against Microsoft-Activision acquisition
• Meta Quest 3 launches on 10 October
• Supercell acquires majority stake in Ultimate Studio
• Activision Blizzard lays of 10 from its Hearthstone team
• Roblox acquires AI voice moderation start-up Speechly
• Roblox lays off 30 staff
• Wicked Saints Studios raises US$3.5m for blended-reality game