The GameShadow Blog

Variety reports that Activision is to review all Sierra/Vivendi games due for release in 2009, with the future survival of all projects resting on the new owner’s appraisal of them.

With EA moving into a hostile position regarding its proposed purchase of Take Two, news regarding 2007’s merger between Activision and Vivendi - thereby creating the world’s largest video game publishing empire - has rather taken a back seat.

To recap, Activision bought the Vivendi games division (which often operates under the Sierra name), with Vivendi itself buying a controlling share in Activision. One of the company’s primary holdings is, of course, Blizzard Entertainment, and this is one of the key motivations in EA’s recent movements against Take Two, as well as the origin of the publisher’s new ‘Activision Bizzard’ moniker.

It’s taken time for the deal to rumble into effect, and the next few months will see gradual consolidation of the two company’s assets and offices throughout the world. What that means is that if Activision wants things to change, they’re going to change soon.

First on the list is a review of all 2009 titles currently planned by Sierra. Those due in 2008 are deemed safe because they’re already well into production. Essentially, everyone who already gone financing for their game from Sierra is going to have to pitch again to Activision.

It’s not great news for those developers, but you can’t blame Activision. After all, all they really wanted was World of Warcraft.

Following the second month in a row in which the PS3 has outsold the 360, the death tolls are already being rung by industry analysts - for both Xbox 360 and Microsoft’s console foray in general.

It’s bizarre, really. Not too long ago, the 360 had a massively larger install base, a fantastic software library, a cheaper entry fee, and better online. The PS3 was dead in the water. Sony’s always had that brand awareness, of course, and it looks like consumer perspective - in addition to strong 2008 exclusives - has shifted in its favour. Justifiably or not.

If you’re after the reasons, you may as well grab them straight from the horse’s mouth. The basic reasons, though, are:

- Playstation is the biggest brand in gaming

- 2008 will see PS3 exclusives like Little Big Planet, Metal Gear Solid 4 and Gran Turismo 5

- The PS3 is only just getting into its stride, where the 360 has reached/passed its peak

- With Blu-Ray now the only HD format, PS3’s player now offers a huge purchase incentive

- Sony actually sells in Japan (one of the largest international markets). Microsoft doesn’t.

Whether or not the 360 is really going down is now considered to be a done deal - it’s dead in the water. The real question is whether Microsoft will have the balls for a third round. A 2010 ‘Xbox III’ is mooted, but given the platform’s apparent failure this time around - when all the odds have been stacked in its favour - what’s the chance things are going to change?

I remain slightly taken aback by this sudden switch in dominance. The 360 retains the strongest software line up, best online functionality and a recent price cut that puts the cheapest model at £160 - the lowest price home console on the market. Even going forward, the number of games skipping the PS3 in favour of Windows and 360 continues to be a platform strength.

Still, what do I know?

On February 24th 2008, EA revealed that it had made a bid to purchase huge games publisher Take Two (whose primary asset is the GTA producing Rockstar).

Though EA CEO John Riccitiello had been keen to acquire the pubisher for some time, the objective was only made public when dialogue between the two companies halted. EA sent an open letter to Take Two Executive Chairman Strauss Zelnick, proposing to purchase shares in the company at $26 each ($1 more than previously offered. This values the company at approximately $2 billion. The open letter is seen as a hostile move, designed to turn shareholders against the Take Two board.

The following day, EA launched an official Take Two Take Over website, which is well worth checking out. http://www.eatake2.com/

In addition to fascinating correspondence and conference call recordings, you’ll find this tit bit:

Do you intend to kill or restrict any of the R* franchises?
We [EA] strongly believe that behind all the controversy is a core of great intellectual property and development talent. These titles don’t sell millions because they’re controversial; they sell because they’re great games. We have no plans to change that.

ie Yes.

Since then, a lot of tooing and froing has occurred. Take Two has claimed EA just wants a finger in the GTA IV launch pie, EA has claimed it’s offering a fantastic deal to Take Two investors. Take Two has delayed further discussion until after the GTA launch. Meanwhile, its stock value has soared.

The clever money, apparently, is on EA winning. I’m sure no one has any opinions on that, now do they…?

Fed up with being ripped off by gold farmers? Want a trustworthy way of buying your way to the best equipment in Everquest?

Well it looks like your prayers are answered. Yesterday, Live Gamer announced that it had raised $24 million to build a “legitimate market for virtual trading”. Think of it as an ebay for virtual items, with an auction system and Buy It Now functionality.

The main angle is that Live Gamer will only work with the blessing of the publishers and they’ve signed up with Sony Online (Everquest), Funcom (Anarchy Online, Age of Conan) and a handful of other publishers. The publishers will take 10% of the transaction, and the benefit for gamers is that the transactions are run by a reputable company: an end to gold-farmers who take your money and don’t hand over the goods; a trading platform integrated into the game world and supported by the publishers themselves.

I can imagine that the publishers who are giving away free MMOs and expect to rely on in-game purchases would welcome this move, as a marketplace gets exponentially more successful as its membership grows. But they are not signed up with World of Warcraft, and it seems unlikely that Activision Blizzard are going to join the program. Plus trading platforms like ige.com already exist.

So its an interesting proposition, but with a big hole. It could become a massive new revenue stream for MMO publishers, and a secure way for gamers to trade items in-game. But if it doesn’t reach critical mass, it could be a tumbleweed town of empty store fronts and disappointed traders.

The Golden Compass, based on the series of books by Philip Pullman, is now in the cinema. And, inevitably, there is a game out for it.

A game which has a Metacritic rating of 44 (that’s the PS2 version, the highest rated of all platforms - the PC version doesn’t have enough reviews to count yet.) That’s a pretty damning score for the first game in what should be a major franchise to rival Harry Potter.

My intel suggests that New Line Cinema greenlit the film and spent 12 months courting major publishers to make the game. It took them ages to decide on which publisher to work with and by the time they were ready to commit, there was about a year to go until the film came out. New Line were insistent that the game had to be ready simulataneously with the theatrical release.

The problem is that games take longer to make than movies. Much longer.

So several publishers said it couldn’t be done in time. Sega bit the bullet, and Shiny developed the game on multiple platforms in an incredibly tight timeframe (possibly as little as 8 months, leaving time for QA and submission to the platform holders.)

The result is a game that really didn’t live up to expectations, and certainly is not the ideal springboard for a major franchise.

Which is a shame for all fans of Philip Pullman. And hopefully a wake-up call to the mavens of the film world. It’s about time they realised that games and movies are different animals, and good games really need time spent on them.

Or maybe that’s eternally optimistic.

The facts on GameSpot Gate are pretty thin on the ground. Here are the ones that are known:

• Eidos paid for a major advertising campaign on GameSpot to promote Kane and Lynch
• Jeff Gerstmann, a ten-year veteran of GameSpot, wrote a review that gave Kane and Lynch 6 out of 10.
• Jeff Gerstmann no longer works for GameSpot.

As any reader of Freakonomics will know, correlation does not imply causality, but the blogosphere is up in arms at this alleged proof that advertisers can pay for high-quality reviews. The comments range from the rational to the furious (check out the new logo).

It shows how in the Internet era, accountability is increasing. The days of trusted authorities are over (be that journalists, politicians, or the police) and the web-savvy public now look for trusted environments, places where there are automatic checks and balances to reassure readers about the quality of the information. Places like Wikipedia, Facebook and Yahoo Answers.

So how about a review site that allows users to review games, but verifies which games they own and publishes their games list for all to see? A place where if you slate The Sims but the only games you own are Postal and Manhunt, everyone can judge your biases upfront? A site where reviews are rated by readers, and where a reputation as a respected review writer is valuable?

Hmmm, now that’s a good idea.

In an unexpected announcement over the weekend, Vivendi, the parent company of Blizzard, has bought a controlling stake in Activision. The combined business, to be called Activision Blizzard, will be the largest third-party publisher in the world, with revenues of $3.8 billion compared with EA’s $3.1 billion.

The deal is quite complicated. In the first phase, Vivendi Games will be merged into a subsidiary of Activision with a value of $8.1 billion. Vivendi will also buy shares in Activision valued at $1.7 billion, giving Vivendi 52% stake in the new Activision Blizzard. Then Activision Blizzard will undertake a share buyback, buying back up to $4 billion of its own shares, which will have the double effect of a) returning cash to existing Activision shareholders (presumably in a tax-efficient way) and b) reducing the total number of Activision Blizzard shares in the market. By this method, Vivendi will end up owning 68% of Activision Blizzard, and Activision Blizzard will continue to be listed on NASDAQ with a market value of approximately $19 billion (compared with $17.7 billion for Electronic Arts).

The deal will combine Activision’s strong publishing franchises (like Call of Duty, Guitar Hero and Tony Hawk) with Vivendi’s games business, and particularly with World of Warcraft, which with over 9.3 million subscribers is (according to the press release anyway) the world’s #1 multi-player online role-playing game franchise. It’s a huge deal, creating a real threat to Electronic Arts, particularly as EA does not yet have a category-killing MMO.

So despite comments to the contrary, the ongoing mergers and acquisitions in the games industry are far from over.  What’s next? How about Electronic Arts bidding for NCSoft to get hold of Lineage, Tabula Rasa and Guild Wars?

At his Montreal Game Summit keynote, Jonathon Blow (the one man band behind 2008’s time-warping platformer, Braid) has railed at the McDonalds-esque game design in MMOs and in Bioshock.

“MMOs have empty gameplay, but keep players hooked with constant fake rewards,” said Blow. His concern is that, like fast food, MMOs are empty, and ‘nutritionally’ bereft - they’re a shallow, meaningless experience that nonetheless becomes addictive, resulting in a poor quality of life for its players.

He pointed out how McDonalds has faced criticism from commentators, and that World of Warcraft’s method of teaching players about routine was similar and “akin to advertising”.

And he’s completely right. MMOs have no soul. They thrive on just two things: social networking (something Facebook does better), and constant reward. Few players ever take the time to realise how empty these rewards are. What value does the +3 sword have in the real world? The difference between game design in MMORPGs and traditional RPGs is vast - Knights of the Old Republic 2 has strongly tactical combat, and a rich, meaningful storyline. WoW has XP grind and not much more - just enough to keep players playing.

I take issue with MMORPGs for a different reason to Braid, though. He’s concerned about the social impact of these games on their players - but if players really want to waste their lives, then so be it. I’m just more worried that if designers can get away with bland gameplay like this - and come out with one of the most successful games of all time - then what future is there for games with genuine depth?

Blow also took issue with the hype surrounding Bioshock, claiming that despite wide praise, the game “sucks” and that “the designers of this game are trying to manipulate your emotions in a clumsy way. BioShock claims to be about altruism and humanity but what it really teaches you is how to headshot someone from as far away as possible. It’s a very weird game that we couldn’t proffer as an example to normal humans.”

I don’t know how he does it, but he’s bang on again. Yes Bioshock is pretty, yes it’s partly inspired by an obscure Russian-American philosopher, no, it’s not really doing anything all that special. And the twist was average in the extreme.

I don’t know if Braid will be the game to reverse these trends - while it looks great, it doesn’t look all that unique to me - next year will tell.

Tournament.com, the website where players compete in Counter-Strike Source for real money, has closed down.

It’s the latest in a series of failures for the gaming / gambling model, and it’s beginning to raise doubts, in my mind at least, as to whether the concept is inherently flawed.

Gambling works because it’s based on luck. no matter how aware of the growing hole in our pockets, we keep playing because were addicted. We’re addicted to the chance we might win big with the next set of cards.

In an FPS, as some investors may not realise, success if heavily based on skill. That means if you’re a loser, you’re a loser - there’s no chance of ever making it big. As a result, the weaker players don’t bother, while the stronger have no one to compete against.

Tournament.com had the greatest possible advantage - exclusive rights to use Counter-Strike Source. Other services are further weakened by the appalling selection of games they offer their players.

Perhaps there’s some nugget of potential here - it’s certainly in itself an appealing idea. Time will tell, but I think I can guess what it’s going to be telling us.

id Software has announced the formation of a new division for production of mobile phone games.

Which is fantastic news, because mobile games have standards someone dragged up from twenty years ago. The vast majority don’t run properly, are clones of other, better games, and sully the name of strong PC franchises like Prince of Persia and Worms.

Doom RPG, developed by Carmack himself, has so far sold over over 1 million copies - and rightly so. It’s a pretty, engaging and addictive little RPG, not only set in the Doom universe, but employing the iconic graphics of the original game, down to the tiniest detail.

Does id’s new foray indicate that one day, mobile games might actually be worth playing?

Being in the gaming business, and more so, the gaming update and file delivery business, I’ve been closely watching an interesting clash of both progress and hindrance. I sometimes buy a digital version of a game, usually because I can’t wait or just don’t have the time to go and buy a boxed copy.

An interesting yet dangerous customer management challenge is that differing versions of games (the boxed vs digital mix) can cause havoc where the multiplayer experience is a key part of a game. In the past six months I’ve seen many complaints on forums about downloadable versions of games not being able to connect to boxed versions. This can be a frustrating experience for customers and publishers need to take heed of some of the criticism, frustration and pain that customers are screaming about. The simplest example of a breakdown in the process is when publishers release a patch. Often the retail version is patched first and the digital version(s) are left until later, often weeks later. This breaks the synergy between DRM versions of a game and the retail copy, causing distress in the community.  For examples, go have a look around the forums for Neverwinter Nights 2, Supreme Commander and World in Conflict - all great games, but all games that have suffered from a poor online experience between “retail” and “download” players.

In summary, the digital download revolution is here to stay. Putting aside some of my feelings on the “multiplayer” aspects of some titles it is still the quickest way to get a game on release. GameShadow is actually right behind the digital download evolution and I believe it can only get better as time goes on.

With the announcement of the closures of EA Chicago and EA Chertsey, some industry watchers have been asking if EA’s days are the games industry’s 800lb gorilla are numbered.

I don’t think so. This looks more like a aggressive spring (autumn) clean of the company by incoming CEO John Riccitiello.  He announced a restructuring of the company into four divisions early in the year, and now has shut down a studio that was not meeting profitability targets (Chicago) and one where many of the staff have already been redistributed to different offices (Chertsey).

 It is not unusual for incoming Chief Executives to indulge in “kitchen sink-ing” the financial results, throwing all of the bad news possible into the financial results in the first year of his tenure. The blame for the losses can be easily thrown on the previous incumbent, it gives the new chief executive some very favourable press a year later when he has “turned the company around” and it gives the accountants a chance to write off a whole bunch of questionable investments on the quiet.

So this seems like business as normal for the Redwood Shores giant. Expect good news this time next year, when the company will be crowing about the massive improvemnt over the results in Q2 2007.

Warner Bros announced today that it had bought TT Games, which owns Travellers Tales (makers of The Lion, The Witch and the Wardrobe and Lego Star Wars).

It makes absolute sense for Warner, who are keen to build a powerful games business to match their strong movie and television activities. They have lagged Disney in building up their games activities and have recently been recruiting at senior levels, particularly in Europe. This acquisition gives them a proven team, powerful IPs and a stable of million-selling games.

Giant, whose original ambition was to be a leading publisher of entertainment that appealed to a younger audience, managed to pull off the feat of making games that appealed to children and grown-ups alike. Hopefully, they will continue to do this from with the Warner empire.

And crossing Warner licences with the Lego franchise could be very interesting. Could Lego Matrix be the first great game set in the Matrix universe?

Midway released Q3 results this week, with revenues 6% below targets and a net loss. Midway has made losses in 30 of the last 31 quarters. The company saw cash outflows of $26 million in Q3 and now has approximately $31 million left in the bank.

It’s not all bad. Stranglehold has sold 1 million units, and there are other key titles like Blacksite and Unreal Tournament 3 due out in Q4.

But investment firm Credit Suisse has just revised their outlook for Midway. They now have a target price of $0 for the company (in case that wasn’t clear enough, they believe that it will go bust)

So if you really want to play Unreal Tournament 3, I’d hurry up and buy it.

Recent announcements from Microsoft, Nintendo and Sony have shown the differing costs of launching a console:

Microsoft’s shares rose more than 10% yesterday after their quarterly results announcement showed strong results in the Vista and Office divisions, while sales of Halo 3 pushed the consumer division, which includes the Xbox 360, into profit.

Nintendo announced it has trebled its first-half profit driven by the success of the Wii and the DS and is now the third most valuable company in Japan after car-maker Toyota and financial services giant Mitsubishi UFJ. It surpassed Sony in market value earlier this year.

Sony, in contrast, admitted that PlayStation 3 sales targets of 11 million units might not be met, and that it had lost $848 million in the games unit in Q3 07. They expect to break even in the next six months and make a profit next year.

All of which is tough for Sony. Alongside troubles in its television unit, Sony’s games units is holding it back, with all of the issues of an expensive unit lacking must-have software going into the Christmas season. Nintendo, with a low-priced, low-spec machine, is currently trouncing its opposition and Microsoft is, perhaps surprisingly, emerging into a strong second place.

It’s too early to write Sony off, but amongst all of their corporate woes, turning around the games unit must be a really high priority.