Microsoft: Netflix in reverse?

In the run up to the release of Starfield, Bethesda’s Xbox exclusive game, on 6 September we discuss our latest thoughts on what we see as a potential future amalgamation of TV and game streaming, and why we believe Microsoft and Netflix are currently in pole position to exploit this possible opportunity. 
We also touch on Keywords Studios’ announcement that it has hired Stephen Peacock as Head of Gaming AI. An industry veteran with over 20 years of experience, including Head of AI/ML for Games at AWS, we think this is an astute hire that underlines the credentials of a firm that embraces AI and will increasingly utilise it to solve the productivity challenges facing the industry.  
Finally, we take a slightly deeper look at Arctic7 following its announcement of a Barcelona studio. This will enhance its European presence and as a fast growing business, with a top tier management team, we believe this company is one to watch if it ever decides to IPO.


News of the week

Microsoft: Netflix in reverse

Since its inception, Netflix has dominated the TV streaming market and continues to lead the way in this sector. It is no secret that the firm is making a concerted effort to branch into gaming and we noted at the time of the firm’s August announcement, that the trial of directly streaming games to TVs and other devices marks the first signs of a cloud gaming service. This makes sense, given the amount of top tier IP in the firm’s possession and the need for it to diversify revenues streams from an ever more crowded streaming sector.


Famously a firm with fingers in many pies, Microsoft is conspicuously missing from the streaming market in which many of the largest tech companies are increasing their interest. However, as we see Xbox looking to build its own library of platform exclusive games, of which Starfield will be a key early marker, combining with a focus on cloud gaming there could be an opportunity to branch across into TV over time. Loyal fan bases built through games would all but guarantee commercial success of a show, whilst also offering a point of differentiation from other cloud gaming services. We could foresee a future in which, starting at different ends of the spectrum, these two firms end up meeting in the middle and battling for dominance in the TV and gaming streaming market. Source:


Keywords Studios hire Head of Gaming AI

Keywords latest hire re-affirms that AI remains central to its future ambitions. We have re-iterated several times our belief that generative AI (GenAI) will enhance productivity but as a consequence[,] we will see more complex games and therefore we won’t see a dramatic reduction in the time it takes to create a game. Developers will continue to outsource a healthy proportion of that additional work and this will mean Keywords remains a vital cog in the wheel. What is clear is that Keywords, with over 4000 developers, will be maximising the use of GenAI to ensure efficient internal operations.  Source:


Artic7: Keep an eye out

With studios in the US, Canada, Montenegro, and shortly Barcelona, it's clear Arctic7 has real momentum behind it at the moment. What makes this growth more impressive is that this has occurred in spite of a challenging macro backdrop, with Black Eye Games, Volition Games, Campfire Cabal and Mimimi Games all announcing their closures in August alone. Whilst it has historically worked as development support, we are aware it is internally developing a third-person action adventure game, and will closely monitor any additional information regarding this title to see how it performs. We believe management have the perfect experience for this venture given they previously founded Sperasoft before successfully selling to Keywords. With US$2m raised in their first round of funding.  



In other news...

  • Black Eye Games is shutting down for financial reasons
  • Embracer’s restructuring claims more victims as Volition is closed.
  • Blackbird Interactive fires 41 staff
  • Ronimo games files for bankruptcy
  • suggests mobile game spending will hit US$108bn this year
  • NPCx raises $3m for game character motion capture processing tool