E3 self-destructs
A showcase in sclerotic management
As a dual citizen, I find myself constantly comparing everyday phenomena. For instance, The Dutch are candid and more direct in conversation. The Americans tip way better. Hamburgers are superior in the US, but the Netherlands has better cheese. It’s a useful experiment that allows me to cherry-pick cultural behavior. I can tip well and be candid.
In some cases, however, the past perfect I experienced growing up Dutch foreshadows some of the future imperfect of this American life. Here’s one: pillarization.
As a social and political phenomenon, pillarization refers to the fragmentation of society into separate groups (pillars) that identify differently based on religion and associated political beliefs and, importantly, don’t mix. In the Netherlands during the decades that followed WWII that meant that you’d only read, listen to, and watch those media that were based on the same convictions as your own. It also dictated how you voted, what schools and colleges you’d attend, and which sports clubs you’d join. To this day, the Dutch still have the Katholieke University (catholic), de Vrije Universiteit Amsterdam (protestant), and state-sponsored universities.
The resulting pillars of beliefs both shaped each group’s worldview and dictated the makeup of their social environment. You can’t play with those children over there, because they’re reformed. Eventually, and in no small part due to the commercialization of the Dutch media system, the ideological differences crumbled in the Netherlands.
Worryingly, here in the US, the wholesale rejection of each other’s point of view has gained a lot of momentum. Media organizations and social networks, keen on pushing people further into their zone of comfy beliefs, tear at the fabric of society without recourse or remorse.
Fortunately, one study released this week brings promise.
Researchers recruited a sample of regular Fox News viewers and incentivized them to watch CNN instead for a month. Specifically, the overwhelmingly “very conservative and strong Republicans” accepted the opportunity to earn “$15 per hour to watch up to 7 hours of CNN per week.” (Minimum wage, I’m telling you, it’s a thing.)
The experiment tried to establish whether the editorial decisions, “partisan coverage filtering,” would impact viewers’ beliefs. By omitting specific decisions or inactions from political leaders, or emphasizing them, news stations have an ostensible impact on how viewers regard their political leadership.
The researchers conclude that “partisan media does not simply remind people of certain beliefs they already hold (priming), it leads viewers to learn about a biased set of facts.” By watching a different news source, the study convincingly proved that people can and will change their minds. Or, as it stated: “watching CNN instead of Fox News had significant impacts on viewers’ beliefs, attitudes, and evaluations.”
I say we all go have an honest conversation over cheeseburgers and leave a big tip.
On to this week’s update.
BIG READ: E3 self-destructs
The news that the Electronic Entertainment Expo has now also canceled its digital conference comes hardly as a surprise. But is it a loss?
Originally, E3 was an industry event that had spun off from the Consumer Electronics Show after it had gotten too large. Organized to allow publishers and platform manufacturers to showcase their upcoming titles to retailers, it brought together all the major industry players. As video games grew in popularity, E3 quickly became one of the most important events during the year.
Now, the games industry is changing. The broad adoption of digital distribution and the move to service-based gameplay meant that conventional product-based releases have lost importance. To a degree that’s a good thing: fortunately, we’ve come a long, long way from the time when scantily-clad booth babes were a mainstay at industry conventions.
The organization that organizes E3, the Entertainment Software Association, or ESA, is not the only one to blame. Well, actually, let me rephrase that. It is entirely the ESA’s fault for scaring off its major publishers and failing to incorporate digital games in a meaningful way. What a mess. It’s not as if we did not see this coming because we totally did. After raising its prices to a level that became too rich for even the biggest firms, the ESA left itself woefully exposed. Once Covid hit, it was done.
Good riddance?
No. Long-standing institutions, including conferences, present a cornerstone in the annual itinerary of business activity. All those publishers and platforms are going to have to meet in person somewhere.
Industry events are also fertile ground for anyone who wants to get a sense of what’s to come. Yes, there’s the cacophony of press releases. But watching traffic patterns in the hubbub on the conference floor would tell you two things. First, it offers a glimpse of who is spending how much to shill their games. How bullish is publisher X on title release Y. The bigger the display, the larger the bet. And, second, the length of the lines waiting to try a demo tells you what really excites people. Especially the introduction of novelties such as VR gave you a clear sense of how many gamers would actually buy one.
A few alternatives have emerged. For one, instead of solely relying on E3’s ability to draw the international press, publishers and platform manufacturers have spread their marketing activities across several annual events. That dovetails well with the fact that gaming has become a more global affair. Today there are many other, regionally-focused events, including Gamescom (Germany), ChinaJoy (China), Paris Games Week (France), the Tokyo Game Show (Japan), and G-Star (South Korea). And, different from a decade ago, especially Asian game makers are less focused on the North American market.
Finally, Geoff Keighley’s Summer Game Fest presents a refreshing update to an event that is encumbered by a looming sense of doom. His is an engaging, genuine showcase that both celebrates and entertains. Sure enough, Keighley is well-connected to an enviable array of celebrities, but perhaps it’s not such a bad thing for something to disappear entirely if it can be replaced so easily by a single Geoff.
E3’s sclerotic management left it vulnerable and pushed it into irrelevance during a time when the industry exploded in size. E3 is a showcase, indeed; a showcase of who managed to evolve and who did not.
NEWS
Welcome to the Wendyverse
Oh god. You have to wonder if its PR team prematurely pulled the trigger on an April fools joke when they announced on March 30th a preview of what it “could” look like. In collaboration with Meta, the fast-food chain offers a repeat of what we had already seen 15 years ago in Second Life when every major corporation in the US built a virtual storefront. It’s a bland repeat from a firm that was previously one of the most hilarious things available on Twitter when it started a flaming war with its burger-flipping rival, McDonald’s.
Ubisoft invests in another blockchain project
Developer Cross The Ages announced a $12 million seed round that featured, among others, Ubisoft. Seemingly unperturbed by the flood of criticism that followed its own announcements around NFT integrations, the French publisher is expanding its already sizeable list of blockchain-related ventures.
Meanwhile, the crypto culture wars rage on, as Steam users review bombed Storybook Brawl, an auto-battler developed by Good Luck Games, after the news came out that crypto exchange FTX had acquired the developer. The game received 85% negative ratings in the past 30 days, despite a video by its founder stating that the integration of blockchain hadn’t been worked out yet but that it would be done “ethically.”
US Senators criticize MSFT/ATVI deal
In a letter to the Federal Trade Commission (FTC), which is charged with evaluating the proposed acquisition of Activision Blizzard by Microsoft, senators Warren, Sanders, Booker, and Whitehouse expressed their concern that the deal could undermine the necessary accountability over alleged misconduct at the publisher. They propose to block the transaction if the FTC finds that it prevents employees from achieving improved working conditions.
“Workers at Activision Blizzard, following years of rampant sexual misconduct and discrimination and unfair labor practices, have led calls for greater transparency and accountability in the gaming industry, and we are deeply concerned that this acquisition could further disenfranchise these workers and prevent their voices from being heard.”
This week, the publisher converted all temporary US-based QA workers to full-time employees. Totaling almost 1,100 workers, their hourly minimum wage will be increased to $20.
MONEY, MONEY, NUMBERS
With the next round of earnings insight, Wall Street is eyeing the performance of mobile, PC, and console with intent. The impending doom that haunts the global economy at large is expected to also impact interactive entertainment. Specifically, inflation, a continued supply chain problem, and seasonality are expected to result in softer numbers in the months ahead.
In 22Q1 global spending on mobile games fell -7% y/y and -5% q/q to $21 billion, according to Sensor Tower. That suggests the fourth month of declines compared to a year earlier. Top-grossing categories in the US were casual, simulation, and strategy.
PC gaming was softer, too, despite an increase of +6% y/y in Steam’s average peak concurrent players, activity dropped by -15% m/m. Twitch viewership, which is a strong indicator of momentum among PC players, was down -7% in March compared to a year earlier, according to Stream Hatchet (disclosure: I’m an advisor).
Wall Street is expecting “modest declines” despite their excitement for a full slate of new titles. Hardware, however, is expected to perform worse as the initial run on next-gen consoles has started to cool somewhat. Specifically, supply chain issues continue to pester players, and since their release, Sony’s PS5 and Microsoft’s Xbox Series X/S have sold a combined 12.5 million units in the United States, which is 1.3 million less than the PS4 and Xbox One sold over the same time frame.
Abberation
Quick shoutout to my readers for correcting a mistake. Last week I compared Sony’s subscription offering to that of Microsoft, saying the former consists of 430 to 100 for the latter. That’s not true, of course. Here’s a handy list of titles available via Game Pass.
PLAY/PASS
Play. Take-Two CEO Strauss Zelnick visited subsidiary Nordeus in Serbia and led a workout session.
Pass. Another blockchain gaming hack to the tune of $300,000.
Play. A cover by The 8-Bit Big Band Featuring Button Masher based on Meta Knight’s Revenge from Kirby Superstar won a goddamn Grammy. Sick!