Articles tagged with business

Posted by James at 09:33
Inti Creates weren't the only publisher to share Nintendo Switch sales data, as the CEO of Nippon Ichi Software America, Takuro Yamashita, recently spoke to MCV UK about how Disgaea 5 Complete has been performing globally.

The game's western release has accumulated 114,000 pre-orders ahead of its launch later this month, with two thirds of those coming from North America (78,000 pre-orders) and the remaining third from Europe (36,000).

This was far from most people's wildest expectations for the title, including my own, given the game's tepid reception at Switch launch in Japan. Indeed, Mr. Yamashita stated that the game has yet to break 20,000 sales in the region.

What's intriguing is that this demand for Disgaea 5 Complete in Europe and North America suggests a widening gap between sales of Nippon Ichi Software's games in Japan and copies sold from players in the rest of the world.

In February last year, a year after Disgaea 5 launched on PS4 outside of Japan, NIS revealed to Famitsu that non-Japan sales of Disgaea 5 stood at 112,000, while Japanese sales reached 60,000 units. That's a ratio of 2 copies sold in Europe, North America and non-Japan Asia for every copy sold in Japan, but the Switch version performance suggests that gap is widening, something NIS America hadn't anticipated to happen with the Switch version.

Based on these figures shared by the publisher, the Switch version of the game is on track to swiftly outperform first-year sales of the PS4 version outside of Japan in a matter of days after it launches on May 26. Hopefully this signals more support for Nintendo's hybrid going forward - we've yet to hear a peep out of some publishers, like Spike Chunsoft...
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Posted by James at 15:13
Speaking at the Tokyo Sandbox game developer event/mixer today, Inti Creates gave some insight into the development of 3DS and Switch release Blaster Master Zero. The reimagining of NES darling sidescrolling platforming/shooter hybrid Blaster Master took 35 people six months to make before arriving just in time for the Switch's launch day in Japan.

We also heard about the game's sales performance on the eShop; the Switch port of the game has currently racked up 80,000 copies sold. We weren't told whether this met Inti Creates' own expectations, but this is a fairly respectable figure for what was presumably a version of the game bolted on fairly late in development.

There are tell-tale signs that this was indeed the case: The Switch version of the game inherits the 3DS's strange 5:3 aspect ratio, and the game uses non-integer scaling to scale up to both 720p and 1080p resolutions, so it's fairly clear that the game wasn't originally planned to be on Switch.

In any case, 80,000 sales for the Switch version alone should have net Inti Creates a tidy amount of revenue and would have almost certainly justified the cost of the port. Whether the game sold enough for them to have broken even is hard to say, since we lack information about sales of the 3DS version, and we don't know whether the 35 staffers working on the project were solely dedicated to it or were working on other games. The former is more likely there.

Regardless of current sales, Inti clearly plans to make sure Blaster Master Zero has long legs. Last week it released an update to the game which added a new, remixed difficulty setting, and it's currently working on new DLC characters who are more than just a palette swap.
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Posted by James at 03:38
Last year's Hitman was Square Enix's first foray into producing a AAA episodic game, and it was positively received, both as a game and as a way to make a big budget third person stealth-action game work in a new episodic format.

But it appears that the game has underperformed - at least to Square Enix's lofty expectations. Just as the company revealed their greatest ever operating profit for the last financial year, they also announced today that Hitman's developer, IO Interactive, is up for grabs. The future of the Hitman IP, which Square Enix maintains ownership of, remains uncertain.

It's not the best start to Square's new focus on producing episodic content for larger games. Going episodic would bring in a return on financially risky projects sooner rather than later. Instead of spending five years and tens of millions crafting the next Final Fantasy while the dynamics of the market change around them, going episodic also enables them react to change faster.

It'd be difficult to accuse Square Enix and developer IO Interactive of doing episodic wrong with Hitman, given the quality of the game, the frequency of episodes and the responsiveness of the team to react to demands of the game's players. But it seems something didn't stack up financially with Hitman, and it's a shame that a game of its ilk couldn't exist in today's market, and an even greater shame that Square Enix won't give IO Interactive another shot.

Square Enix notes that it plans to double down on its most well-known IP. No pressure on Final Fantasy VII Remake, Square's next big budget episodic game, then...
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Posted by James at 13:29
Looks like we're back to where we started as far as European releases for Atlus USA games go.

Speaking with trade magazine MCV, NIS America CEO Takuro Yamashita confirmed that the publishing arm recently cut its ties with Atlus USA, also hinting at its dissatisfaction from how Atlus USA would treat NIS America as a second class citizen when picking which games it would be given the license to publish.

This has two effects: Firstly Atlus USA will no longer distribute NISA's titles in North America; NISA will have to look for a new distribution partner. Secondly, and this is the obvious one, NIS America will not be publishing Atlus USA's games in Europe.

This has profound implications for us. Before late 2012, Atlus USA would seek out publishers on a game-by-game basis for European release.

This had all sorts of knock-on implications, since these games would have to fit around other publishers' priorities. This resulted in either long delays (Devil Survivor 2) or no release at all (Trauma Team) depending on the game and whether a publisher wanted to pick it up.

When NIS America struck a deal with Atlus to publish its games in Europe this all changed. NIS America have a comparatively low overhead to other publishers, also distributing its games via Reef Entertainment. So any Atlus release - big or small - would potentially be profitable for it to release in the region.

So we started seeing all sorts of games we didn't once receive before, from speedy releases of the likes of Persona Q and Persona 4: Dancing all Night to more obscure titles like Stella Glow and Lost Dimension even seeing a release at all. To say this was a massive improvement is an understatement.

That's all gone now. So we've gone from guaranteed releases of all Atlus USA games to the chasm of uncertainty we had before.

This is what I feared when Sega of America and Atlus USA finished unifying their publishing activities earlier this year.

While it meant great news for North America - as a publisher, Sega of America are stronger than ever, bringing in Atlus USA's localisation and publishing expertise - I had a feeling Sega would try and regain control of what have become its own releases in Europe.

Indeed, if the responsibility has now shifted to Sega of Europe we're likely going to miss out on a lot of smaller titles. Case in point: While Sega of Europe were quick to announce release dates for Valkyria Chronicles on PS4 and Yakuza 0, they've remained silent on Sega 3D Classics Archives (their own heritage!), Hatsune Miku: Project Diva X and 7th Dragon III.

So the future really depends on what Sega intends to do with European releases for Atlus USA titles. If it's all moving internally to Sega of Europe, then expect only the biggest titles - like Persona 5 - to make it over here.

But if Sega of America and Atlus USA are willing to step in and find a low cost way for Sega of Europe to get the smaller titles out the door like they did with NIS America, then we might have reason to remain hopeful again.
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Posted by James at 08:53
In what is an encouraging sign of the health of the JRPG on PC, pre-orders for Tales of Zestiria have reached a large enough number to unlock all of the game's reward tiers on Steam a week before launch. This guarantees anyone pre-purchasing the game a complimentary copy of Tales of Symphonia.

While we do not know how many pre-purchases were required to unlock the final and third reward tier on Steam, it's likely that by reaching the third pre-purchase tier the game has at least matched Bandai Namco's expectations for pre-orders of the game, given the incentives involved.

The largest number of pre-orders have arrived within the last week -- enough to push the final pre-purchase tier from 60% to 100% -- which tells us that Zestiria is following a predictable trend, where the bulk of pre-purchases arrive in the tail-end of the pre-order period.

At any rate, Bandai Namco's handling of Tales of Zestiria's PC port has been a good indication of how to launch an established franchise of an unestablished genre on the platform.

Like the PS4 version which was created specifically for the west (likely due to the rapid decline of PS3 in those territories), the PC version hasn't been treated as a second-class citizen from the outset.

Bandai Namco is launching it simultaneously alongside the PS3 and PS4 versions in the west, and it has feature-for-feature parity with the original edition of the game. Furthermore, the PC version of the game has been prominently featured in all of the game's marketing to date, including a long live stream.

It'll be interesting to see how Tales of Zestiria -- an RPG from a more established franchise -- performs on PC in the long-run. For instance, lesser-known series like Idea Factory International's "Neptunia" performed reasonably well over time. Data from Steam Spy tells us (with about 95% confidence) that the PC version of Hyperdimension Neptunia Rebirth 1 has sold in the region of 160,000 and 180,000 copies.

No doubt platform promotions have had a big impact on sales figures, but the important thing to note is the PC is a long-term platform, not a dead end like PS3 or even PS4.

This means that older games can still produce revenue and have a purpose long into the future, which is undeniably appealing to publishers as the market has grown large enough to justify the costs of porting and supporting a third version of the game in the first place.

Even Nintendo appears to be taking notes, as its next generation platform, code named NX, is shaping up to be a continually evolving and long-lasting platform in the vein of iOS or the PC.
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Posted by James at 11:18
Speaking to Game Informer magazine (via and translated by NeoGAF), Square Enix Europe CEO Phil Rogers has expressed an interest in crowdfunding localisations of certain video games that would not otherwise be viable for a western release.

It’s an interesting idea, one that could work well if implemented properly. Phil Rogers rightly states that some titles aren’t worth the risk to release in the west, which is true. If you consider a large company like Square Enix with its high overhead and admin costs, for every niche title they release they could be putting those same resources to something else that would at least break even on their investment.

Indeed, this is the dilemma large companies face when choosing to localise, market and publish smaller games. The question is not necessarily about the raw costs of localisation, rather there is a need to make the most of limited resources.

If crowdfunding were to be used as a means of making localisations of smaller titles financially viable, then the use of internal resources will need to be minimised. For instance, it’s likely that localisation efforts will be outsourced to independent localisation companies like 8-4. Furthermore, the games in question wouldn’t receive a marketing budget.

This is, in a way, an efficient means of releasing lesser-known titles for the smaller yet vocal groups of people that want them. No amount of marketing spend would lead to a tangible rise in sales for these games, after all, but if the implicit and explicit costs of releasing these games can be covered, a publisher following this strategy could stand to improve its long-term reputation from its most loyal followers while also bolstering the variety of its portfolio of games.
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Posted by James at 14:37
After just 18 weeks on sale in Japan, sales for Nintendo’s Splatoon – a new IP on the Wii U – have overtaken those of its own Mario Kart 8 at the same point in the two games' lifecycles.

As of September 27, 2015, sales for boxed copies of Splatoon now stand at 682,000 units, with Mario Kart 8 at 678,000 units. This stands in stark contrast to the two Wii U games’ launches, where Mario Kart 8 shifted 326,000 units in the week ending June 1 2014, compared with Splatoon's 145,000 during the week ending May 31 2015.

How did lifetime sales for a brand new IP in an unestablished genre eventually trend ahead of a game in one of the biggest and most established franchises on console – a situation many of us, even Nintendo, didn’t foresee?

While Mario Kart 8 was off to a much faster start, shifting 125% more copies than Splatoon in its launch week – Splatoon also managed a strong Japanese launch given its roots in the unproven third person shooter genre and similar-sized marketing budget – the difference is that Mario Kart 8’s sales tailed off at a greater rate.

Indeed, Mario Kart 8 shifted a greater number of copies at first, including 73,000 during its second week compared with 69,000 copies for Splatoon. But Nintendo's new IP sold a greater number of units than Mario Kart in every following week -- the 185,000 unit lead Mario Kart 8 held over Splatoon diminished within four months.

The absolute sales difference between the two games during weeks 3-18 of their respective retail cycles was as high as 16,000 copies (in week 4), and as low as 6,100 units (week 9). In 14 of the 18 weeks Splatoon shifted over 10,000 more copies at retail than Mario Kart 8.

A closer examination of the relative difference between sales of the two games shows us how Mario Kart 8’s lifetime sales lead diminished so quickly. Splatoon shifted over twice as many units as Mario Kart 8 managed during the tail-end of the 18-week period (weeks 14-18). This difference peaked last week where Splatoon sold two-and-a-half times (250%) more copies than Mario Kart 8.

It’s this consistent, relative difference over the last six weeks – where Mario Kart 8 sales never recover from a sub-10,000 unit slump – which saw Splatoon overtake Mario Kart 8 by the end of week 18. The game continues to sell in the region of 20,000 units every week, and it’ll likely continue to do so in week 19 when Media Create releases new figures for the week ending October 4 2015.

If both Splatoon and Mario Kart 8 had large opening weeks given their respective platform’s small install base (Wii U is currently trending behind Wii, and far behind 3DS in Japan), why did Mario Kart 8’s sales decline so quickly when Splatoon’s didn’t?

One reason is that Mario Kart 8 just isn’t different enough for Nintendo to have been able to differentiate it to the mass market, especially so when the Wii U install base remained relatively small at the time in Japan. The Nintendo 3DS is the most popular dedicated videogames platform in the region by a long shot, and Nintendo had already released Mario Kart 7 on that system at the end of 2011.

While the Wii U’s Mario Kart is a vastly more advanced game, it’s difficult to communicate that across to the unconverted in order to create perceived value, so it’s likely that Mario Kart 8 reached a near-sales saturation given the Wii U install base over those first 18 weeks on sale.

This is best shown by the effect Mario Kart 8 had on Wii U sales in its launch week – Nintendo’s home console only shifted 19,000 units, less than what 3DS even managed (24,000 units) to shift despite having no big releases that week. It’s this cannibalisation between Nintendo’s two different platforms, both in hardware and software with similar IP, which is leading Nintendo to rethink its strategy for its next video games platform, code named NX. You can read more about Nintendo's core strategy in detail over here.

By comparison, Nintendo managed to retain Splatoon’s sales performance. There are two likely reasons why Splatoon’s long tail of sales have been more sustainable.

Firstly, Splatoon is fresh; it’s a big new IP from Nintendo in a genre they have never attempted before (the online-focused multiplayer shooter), but with their own unique twist added (players paint the map with their weapon in order to capture the most turf). Nintendo’s slant on the genre is also one that is also incredibly easy to understand and therefore communicate to players in marketing, so there’s broad appeal to consumers right down to the game’s distinctive and confident art direction.

This also helped Nintendo avoid any issues with Splatoon being cannibalised by games on its other platform, the 3DS. Splatoon isn’t a close substitute to anything right now – the expanded audience can’t stick with “Splatoon 3DS” and be done with it, and core players aren’t going to go into Splatoon with any negative preconceptions like some did with 2K Games’ Evolve, another multiplayer new IP which launched this year but failed to retain its players (Splatoon has even outsold Evolve worldwide).

More importantly, in a new approach for Nintendo Splatoon is operated like a service, with regular content updates that regularly unlock over time – initially off the disc and now through online updates – based on player metrics and feedback. This is augmented by server-based map and mode rotations, timely social media updates that tie into the game and its world, and fortnightly events called Splatfests.

While this was a conscious design decision in the interest of keeping a healthy player-base (see how 2K Games’ Evolve has fared by comparison), it’s likely to have had a knock-on effect on sales, as new content keeps people playing and discussing the game on social media. Nintendo itself has handled the game’s presence on social media well, with regular, fun updates across Twitter, which has a seemingly strong presence in Japan compared with other social networks.

The impact this has on sales best demonstrated by the game’s major update (version 2.00), which launched in tandem with a new marketing campaign in early August. In week 11 when the update landed, Splatoon sales rose by 26% week-on-week, to 36,000 units from 28,000 units.

In the same point of the game’s lifespan, Mario Kart 8 did not receive a large bump from the week prior, though both games did receive a sales boost in week 12, which would have been due to the long Obon festival weekend in mid-August the week prior; Mario Kart 8 sales rose 35% to 28,000 units, while Splatoon retained its sales bump, shifting 41,000 units, a 16% rise on the previous sales boost from the update and new marketing push. Since then, Splatoon’s sales have hovered at around 20,000 units every week.

Last but not least, Splatoon has been growing the Wii U install base in Japan, as indicated by sales of Mario Kart 8 also seeing a short-lived bump back to around 10,000 units following Splatoon’s launch. While it isn’t going to save the system this late into its lifespan, the hardware sales bump is on track to amounting to at least a 100,000 units across the entire year.

With Splatoon’s worldwide sales approaching 2 million units, Nintendo has managed to release a big hitter by Wii U standards in a year which saw two tent-pole releases slip to 2016. With Super Mario Maker out the gate, the remaining first party Wii U games releasing this year aren't really massmarket material, and Amiibo seem to have sold to Nintendo's biggest and most invested fans rather than the expanded audience. Splatoon is quite the standout success.

It’ll be interesting to see how Splatoon continues to perform in Japan in the long run. For now, Splatoon gives us confidence in Nintendo's ability to run a game as a service, both from a creative standpoint and a business one, and puts the company in good standing to tackle future endeavors of this ilk.

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Sony prepares for the
PS Vita's long term future
Posted by James at 08:28

Each and every week, a new post arrives on Sony’s PS Blog marketing vehicle, detailing what’s new on the PlayStation Store. It’s hard to miss special events like limited-time sales, as they get outlined in detail through their own blog posts.

Last week, a sizable roster of PS Vita games from various publishers, small to large, received permanent price drops in Europe. But unlike the typical sale on the PS Store, this was received with very little fanfare. Indeed, last week’s PS Store update post doesn’t even mention this in passing. What's going on?

It seems that Sony is preparing the platform and its software library for the long-term, rather than create another short term revenue spike which sales are designed to facilitate.

The PS Vita’s situation at retail has been dire over the past couple of years. Anecdotally speaking, it’s difficult to find the handheld and its games at a non-specialist retailer, and when you do find them the amount of shelf space allocated to it is less than flattering.

Of course, none of this is surprising if you look at the figures – last year PS Vita went from small to small as far as software sales last year go, and the proliferation of PS4 and Xbox One has led to a situation where retailers need to prioritise their shelf space to their highest value purpose.

PS Vita software continues to decline at retail – in the first half of 2015, boxed PS Vita software shifted 109,000 units, down 37% year-on-year and just 10 percent more than software on the 11 year old Nintendo DS. By comparison, PS4 software shifted nearly 3 million units in the first half of 2015, 26 times more than PS Vita software managed.

As a result, Sony inviting a bunch of notable publishers (participants include Konami, Ubisoft, NIS America and Warner Bros. games) to permanently cut the price of their PS Vita games is a smart move. In the west, it’s likely that the Vita’s presence will increasingly become a digital one, with retailers stocking the bare minimum of software and hardware, and publishers not printing any more copies of older titles.

Ensuring Vita’s boxed games library is competitively priced at digital should help it maintain relevancy in a period where it’ll become increasingly more difficult for customers to purchase games at retail.

Cutting the price of a large selection of digital titles should also take some of the sting off those memory card prices, which add an unseen, implicit cost when purchasing digital games on the platform. Buying a 32GB Vita memory card continues to set you back four times the price of the equivalent micro SD card, for example, and a memory card is required if you wish to purchase any normal capacity of digital software on the platform.

Publishers stand to benefit as well, as it’s highly unlikely that some older PS Vita games will be going back into print when you consider the risks involved with physical media on a declining platform – not just from their perspective but the retailer’s. Since a publisher doesn’t receive a cut from any preowned game sales, they can still hope to claw back some revenue from these reduced price digital games.

Ideally, Sony would reduce the price of memory cards as well, further repositioning the PS Vita for a longer life as a digital-focused platform, but a few things hold such a movement back. The Vita still does good business for Sony in Japan and Asia, and the last thing Sony would want is to encourage its customers there to take advantage of the price differences between regions by importing memory cards on the cheap from Europe and North America. In other words, Sony’s hands are tied due to a conflict of interests between SCEI in Japan and SCEA/SCEE in North America and Europe respectively.

There’s also the issue of the system receiving the bare minimum of attention in Europe and North America in the first place; Sony Computer Entertainment CEO Andrew House labelled the PS Vita as a "legacy platform" in those regions. It’s hard not to believe that only a small amount of resources are currently being dedicated towards the format – even if Sony wanted to relaunch the PS Vita as a digital-focused format such a plan likely wouldn’t be followed through.

It’s still not a perfect situation, then, but what we do have is a good start given the organisational constraints facing the company and the current market situation.
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Posted by James at 11:31
In an unexpected move, Nintendo of Europe is publishing Story of Seasons in Europe, with an expected release date of early 2016.

Story of Seasons, for the uninitiated, is the latest game in the 'Harvest Moon' canon of pseudo life-sim games, where you own and develop your own plot of farm land and interact with the local area.

Nintendo of Europe securing publishing rights from Marvelous in Japan, XSEED (Marvelous USA) and Marvelous Europe ultimately makes a lot of sense: Story of Seasons is possibly Marvelous' biggest and most far-reaching IP in the west, and Nintendo has the resources to ensure that the game receives the marketing budget it deserves and a five-language localisation for the region.

Marvelous Europe are still a relatively small company as far as things go -- spending a whole chunk on marketing and publishing Story of Seasons at retail is probably too much of a task or a risk for them to pull off. For now it appears their focus is on games which find their own small markets, like Lord of Magna and Senran Kagura 2.

Marvelous Europe's last Harvest Moon-esque game, Rune Factory 4, released with the bare minimum of acknowledgement from Nintendo of Europe; expect Story of Seasons to be pushed more than the average third party game on the platform. We'll probably see first signs of such a push when the next European Nintendo Direct rolls around.
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Posted by James at 12:02
In a statement released today, Nintendo has named Tatsumi Kimishima as its new president, who will replace acting directors Shigeru Miyamoto and Genyo Takeda.

Kimishima may well be a good choice for the next president, even if it’s an interim role. While Satoru Iwata followed a rare path from creative to management, Kimishima has his roots in business, finance and management, where he worked at The Sanwa Bank for 27 years before joining Nintendo.

Sure, that makes him a lot more boring as an outfacing figure for the company – indeed, today may be the first time anyone has even heard of him despite his tenure as CEO of Nintendo of America – but he has certainly proven himself from a business standpoint.

For instance, Kimishima’s time at Nintendo began in 2000 as CFO for The Pokemon Company. Shortly after, he ran Pokemon USA. In other words, he oversaw Pokemon’s successful expansion to western markets. In addition to this, he oversaw Nintendo’s North American operations, starting out as president in 2002, then moving on to become CEO of Nintendo of America in 2006.

Nintendo is undergoing a transitional period as they move away from an older, traditional way of offering several, separate pieces of hardware towards a single platform that will include a plethora of devices and services. For example, Nintendo partnered with online services specialist DeNA to utilise their expertise in developing a unified online platform and loyalty system that incorporates all manner of devices, from smartphones to upcoming dedicated hardware and (likely) its cloud-based Quality of Life service.

The late president Satoru Iwata has been reorganising Nintendo to best suit these needs, and while Kimishima is completing this work (which makes sense, as he was most recently in charge of Nintendo’s human resources division) it’s clear that his business acumen and knowledge of western markets are going to come in handy when it comes to the sort of decisions he may have to make – decisions for things not already set in stone by Satoru Iwata.

Indeed, while the Nikkei reports that Kimishima will be continuing Satoru Iwata’s work, Nintendo needs someone level-headed at the helm in order to ensure it stays in the black during such a transitionary period. Western territories have been an area of weakness this generation, too, so Kimishima seems well positioned to make the right judgements. Nintendo’s second quarter earnings release is scheduled for October 28, so expect more information on its short- and long-term plans late next month.
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