Elden wrung
In lieu of attending GDC, I stayed in Brooklyn to work on my next book. Now that Matt Ball’s Metaverse is nearing completion, I gotta stay ahead. But judging by how much fun everyone seems to be having over in SF, that second manuscript had better be amazing. No pressure.
To quiet the overpowering FOMO that rears up in between sentence fragments and orphan quotes, I’ve been slugging my way through Elden Ring. My goodness, what misery. But so fun!
In its first 3 weeks, Elden Ring surpassed 12 million units worldwide and everyone I know can’t shut up about it. Its expansive world is riddled with cool enemies that will mercilessly destroy you with a single strike. I’ve fallen off more cliffs than I can count because the controls are wonderfully terrible. And the balancing system is clearly based on crypto-currency volatility data.
Weeeeeee.
On to this week’s update.
NEWS
GameStop to launch NFT platform by end of Q2
For a firm that has been in abject denial about the digitalization of the industry, GameStop is now overcompensating by going extra hard. Just a few years ago we were treated to statements like
“We don’t see digital downloading as a threat to our business.”
Uhm. Ok. Yeah.
All the while, its executives were threatening console manufacturers in an attempt to discourage their push into digital. We know, of course, that the digital services provided by Microsoft and Sony aren’t just accretive revenue but the key to their long-term survival.
Anyway, in its 21Q4 earnings report, GameStop copied and pasted a buffet of buzzwords, stating:
“As we scale and expand our core offerings we will simultaneously invest in additional growth, including blockchain, digital assets (including non-fungible tokens ("NFTs")), Web 3.0 technology, and new destination formats for our stores.”
Following its attempt to diversify into adjacent categories, like certified Apple products and telecom, GameStop is now pushing hard into the future. A lot of this would be forgivable—it is hard to turn tanker—if it weren’t for the fact that its foundational model now seems to have eroded. A business like GameStop makes the lion’s share of its earnings in the final months of the year. Coming in at a loss tells you that the cyclicality on which it has relied for so long has started to fray.
GameStop’s share price dropped by -8% in response to the unexpected loss and the absence of a renewed financial outlook.
A few thoughts on talent
Now that publishers compete over hiring the best and brightest with Big Tech and, increasingly, crypto companies, its long-held destructive practices may soon prove to be a fatal weakness.
A recently published article on labor practices in gaming discusses the difficulty of exposing how deeply rooted the problems truly are. It argues that despite the fact that crunch time and workplace toxicity are well-documented phenomena in gaming, the industry continues to benefit from its image of being a ‘dream job’. Entertainment industries, in general, tend to obfuscate the shitty parts, of course. But unlike show businesses like Broadway theater, the music industry, or Hollywood, gaming’s history as an insular industry has made it naive to broader entertainment market competition.
“Despite the crucial roles that current and former workers play for our understanding of the conditions under which games are made, the insular nature of the industry, combined with legal threats implied via non-disclosure and/or non-disparagement agreements can have a silencing effect. This may, in turn, reduce the likelihood of certain workers, especially those belonging to marginalized groups, being willing and/or able to share their stories with researchers for fear of risking their future employment prospects.”
As games have ascended to a mainstream form of entertainment, things are changing. First, we currently witness a raising in the standard to which game makers are held. The disintegration of Activision Blizzard’s moral standing echoes what we’ve known for years about EA and Ubisoft. The increased visibility that these multinationals enjoy means they are no longer able to hide on the fringes. If you’re etching ‘Every voice counts’ into your building, it had better be true.
Second, the mounting competition over talent coming from Big Tech firms, crypto companies, and even non-endemic organizations (e.g., fashion, music, brands) looking to leverage interactive entertainment increases the intensity of competition around labor. Already the abundance of venture capital has seduced a lot of middle-management at major firms to strike it out on their own. Despite the success in gaming, other adjacent industries are eager to poach workers, especially those with technical skillsets. One reason, for instance, that the commercial game business isn’t larger in a media town like New York is because it competes directly with Wall Street over programmers and engineers. Many recent graduates prefer the six-figure salary that may help pay off their student loans over pursuing some whimsical creative vision and eating ramen for months.
For years the games industry was able to lean back on the notion that working there was fun and exciting when it wasn’t. And big firms have been able to get away with it. However, in the absence of regulation or any real repercussions, its newfound success may finally put publishers, platforms, and developers under some much-needed scrutiny. Let’s see what happens when a ‘dream job’ becomes just a job. (h/t Rob V.)
Sony buys Haven Studios before it releases anything
Speaking of talent, barely a year after leaving Google Stadia and promptly announcing her new studio, Jade Raymond just sold her studio to Sony. Granted, the Japanese consumer electronic manufacturer had already provided her with funding and they must have seen something they liked, especially with regards to its ambition to build “a live service multiplayer experience.” Following the Bungie acquisition in January, Sony is shopping to future-proof itself. Even so, we’re clearly in a seller’s market.
RIGHT QUICK TIDBITS
GameFam, which develops games in the Roblox ecosystem, raised $25 million to fuel its growth of “Gen Z digital creators.”
Krafton, the studio behind the popular video game PUBG, is planning the launch of Solana NFTs.
The hiring of a CFO implies that Discord is moving toward an IPO, says WSJ.
Roblox reported higher KPIs with 55.1 million DAUs, up +28% y/y, but bookings were estimated at $203 - $206 million, down -2% to -4% y/y. The estimated average bookings per DAU was $3.71.
Razer reported $1.6 billion in revenue for FY21, up +33% y/y, which it largely attributed to the pandemic. To continue its growth it is moving into gamer furniture. Wut.
PLAY/PASS
Play. Plague Tale, a horror adventure game that was one of my pandemic favorites, is getting a television adaptation in France. Comment dit-on, hell yes.
Pass. The leaked Yuga Labs pitch deck is far too chatty.