When the money flows like water | This week in business
This Week in Business is our weekly recap column, a collection of statistics and quotes from recent stories presented with a pinch of opinion and meant to shed light on various trends. Check back every Friday for a new entry.
The video game industry is going through a golden age right now, as you may have noticed.
Business is booming. Heck, business was booming, then a global pandemic happened, and business got, uh … more booming?
Mobile has been exploding for years, and while some markets lack room to grow, there are still many (heavily populated) regions where earlier constraints – smartphone penetration, payment processing standards, broadband infrastructure – diminish every day.
STAT | 113% – Growth expected by KPMG for the predominantly mobile gaming market in India by 2025.
Growth in India and other emerging markets will inspire better locations, more locals will go into game development and more investment from the rest of the industry, like Kwalee’s £ 20million investment in the construction of an outpost in Bangalore.
In the console business, we have three major hardware manufacturers who each take a different approach to the market and find success there. While there are questions as to whether Xbox can achieve its ambitions for Game Pass, whether Sony’s traditional blockbuster-focused approach will be as successful this generation as the last, and what Nintendo might do as a follow-up to the game. Switch, there’s optimism around everyone and we’re at least getting a brief reprieve from predictions of the consoles’ imminent demise.
And on PC, Microsoft is about to launch Windows 11, which, uh, let me have a look here …
QUOTE | “Windows 11 is made for games” – Microsoft announces that its next operating system will bring Xbox Series X | S Auto HDR functionality to more than 1,000 PC games and will use a DirectStorage API to reduce load times. It will also run Android apps, although that detail is in a more Tik Tok-focused segment than games.
Hmm. Well, I don’t want to underestimate the impact of mobile gaming on another use case that people may find appealing, but the good news is that the PC is doing just fine even without Windows 11, and should continue. to do it.
The gaming industry was very healthy before the pandemic, and last year only made it more so. You can see it in the quarterly earnings reports of publicly traded companies, the wave of acquisitions with clearly foamy valuations, and the fact that these high prices haven’t done much to slow the pace of recoveries.
STAT | $ 1.4 billion – The amount EA is paying to acquire Playdemic in a cash deal announced on Wednesday.
STAT | 3 – The number of billion dollar acquisitions EA has made since December when it struck a deal to acquire Codemasters for $ 1.2 billion. Between the Codemasters and Playdemic acquisitions, there was a $ 2.1 billion deal for Glu Mobile in February.
STAT | 0 – The number of billion dollar acquisitions EA had previously completed. (He attempted to buy Take-Two for $ 2 billion in 2008, but failed in his pursuit, which creates a wonderful alternative historical debate over whether an EA-led Take-Two would have done as well. that the company did on its own.)
No offense to Playdemic, whose hit mobile title Golf Clash was valued at $ 132.8 million in the US last year alone, but I don’t know how many people would have guessed there is. some years it would sell more than five times. what Insomniac Games recovered when Sony acquired the Spider-Man studio in 2019.
Likewise, I wouldn’t have guessed that Glu Mobile would have spent more than Facebook paid for Oculus when the VR buzz was peaking, and almost as much as Microsoft paid for Mojang in 2014 after it was clear what would be. a Minecraft phenomenon.
Even companies big enough to build a reputation for acquisitions are a fair game these days, as Microsoft paid $ 7.5 billion to reclaim ZeniMax Media (with earlier acquisitions from parent company Bethesda, id Software, Arkane Studios, MachineGames and Tango Gameworks, among others).
The continued enthusiasm for acquisitions that we have heard from Zynga, Embracer Group, Sumo, MTG Group, Focus Home Interactive and others shows no signs of abating.
For owners who don’t want to relinquish so much control over their business, there is no shortage of success stories from companies that went public last year, including Roblox ($ 38 billion valuation), Unity ($ 13.7 billion dollars), TinyBuild (£ 340 million), AppLovin ($ 30 billion), Huge games ($ 1.1 billion) and Playtika ($ 11 billion). And while it’s not a done deal yet, Krafton’s IPO plans put the company at $ 27 billion.
Combine that with the growing number of game-specific investment funds and a steady pace of venture capital funding announcements for companies that appear to be even longer than usual – I will refrain from linking them to the name. politeness – and I can’t remember a time when money seemed so easy to come by in the industry.
Even GameStop is apparently swimming in it these days!
STAT | $ 1.68 billion – The amount of money GameStop has raised over the past two months by issuing new shares to take advantage of January’s short squeeze and oddly prolonged rise in stock prices.
STAT | $ 1.28 billion – The amount of money GameStop raised in the first three months of its fiscal year through the sale of games, computer hardware, accessories, and merchandise. You know, it’s really his business.
I think we’re in uncharted territory when it comes to how much money is flowing in the industry these days, but I’m still pretty sure it’s a lot closer to a perfect storm than it is. ‘a new normal.
Personally, I think the underlying industry is pretty healthy and I expect it to continue to grow after a modest post-pandemic correction. But when the time comes to look back at that time ten years later, I’m skeptical about how much of this money will be considered well spent.
STAT | $ 150,000 – The amount of money a pair of defendants will have to pay Nintendo for damages and attorney fees after stealing and disclosing trade secrets like the fact that Pokémon Sword and Shield contains larger Pokémon than normal.
QUOTE | “Refusal to follow directions. – As revealed in the Quantic Dream lawsuit against media that referred to it as a toxic workplace, this was one of the explanations for a Quantic Dream dismissal letter terminating Guillaume de Fondaumière in 2016. The letter allowed De Fondaumière, who was co-CEO and executive producer at the time but is now co-CEO and managing editor, to challenge the dismissal and claim at least € 60,000 in compensation from the company. It is not known what directives the Co-CEO refused to follow that resulted in his firing, who gave those directives, or why he remained in the position of Co-CEO despite the dismissal.
STAT | Three months – The cooldown that Valve implemented on Steam account region changes, a move taken to crack down on people changing their account region to take advantage of cheaper prices in other markets .
QUOTE | “After listening to player feedback, we realized that Blaston was not best suited for this type of advertising test. Therefore, we no longer plan to implement the test.” – Resolution Games Acting surprised gamers who paid money for its VR action game to be upset when Facebook started running ads in the experience.
QUOTE | “When it’s all over, the event photographer asks us to take a group photo with the role players. Participants are invited to line up in front of the role players with their fists raised in anger as the role players receive instructions. put your hands up and hoot like a jihadist. ” – TheGamer writer Eric Switzer describes the end of a press conference for Sniper Ghost Warrior: Contracts 2 in which attendees didn’t have time to play the game, but were treated to a fantasy adventure that required people to pretend to shoot down Arabs.
QUOTE | “If we all had a better understanding of our common values, we might recognize the places where our beliefs do not match our values. It won’t resolve all disagreements, but it would put us in a much better position than us. See you now. ”- Nick Diana of Colgate University talks about his experimental game Persuasion Invasion, which he hopes will help people recognize and understand their own biases.
QUOTE | “We have changed everything in the way we work and share information internally.” – Rare’s Joe Neate explains how the studio kept the Sea of Thieves – Pirates of the Caribbean crossover from leaking before it was announced at E3.