Is Cyberpunk 2077 the future we want?
A glance behind the corporate curtains
Art imitates life.
Turns out that the anarchy that governs the fictional universe of Cyberpunk 2077 is based on the internal workings of CD Projekt Red’s management. There, the Corpos have determined that your last ditch effort to get this game out late will be rewarded with more crunch time to fix it with patches in 21Q1.
Over the past week the company has deservedly lost -33% of its total value in a year when every other game company has blown past expectations. Both investors and players have lost faith in the integrity of the firm’s ‘players first’ creed. So much for CD Projekt Red being a bigger deal than Ubisoft.
Understandably it is no easy feat to capture lightning in a bottle a second time. After the success of The Witcher III: Wild Hunt expectations were higher than the recently heightened Mount Everest. But to have to walk back a series of PR statements about no crunch time and blablabla, followed by a buggy launch triggering refunds is next level.
Unfortunately, the influx of cheap capital over the past year, combined with the ferocity of gamer appetite means established firms are more likely to benefit. As Cecilia D’Anastasio writes at WIRED:
“a system that feeds on hope will only grow as big as the trust placed in it.”
In typical 2020 fashion, a regulatory statement issued by the company tells us that despite this mess the game is already profitable. Great. More leadership that doesn’t suffer the consequences of its negligence.
My expectation is that these labor practices will just be made invisible rather than resolved. Outsourcing the heavy lifting to some unfortunate corner of the world is a popular practice in fashion and consumer electronics.
Consumers play a role here, too. Even when I was reading through their meaningless press statements about having no crunch time, the optimist in me wished that Cyberpunk 2077 was a faint echo of how the industry used to make games.
But I fear now that it is indeed the future.
That leaves two options. One, we institutionalize some type of honor code when it comes to how the industry treats its workers and how it communicates with the industry at large. Other creative industries have similar codes of conduct when it comes to how they are expected to treat and compensate their talent. Call it ‘free range’ if you must, but at what point does the suffering of others make playing a game no longer fun.
Or, we stop complaining and just accept the fact that soon only people with no other option will agree to work under such conditions and that game companies make a living lying.
Similar to the way the Grand Theft Auto franchise offers a critique of contemporary society, Cyberpunk 2077 is supposed to be a fictional universe where we can live out our fantasies about sticking it to the man. Yet somehow during development CD Projekt Red has managed become the very thing it sought to destroy. That makes things easier.
Look, I finished the game.
On to this week’s update!
🎙 Hey. I’m hosting a year-in-review panel discussion
Time/date: Thursday December 17 at 1:00 pm EST. It’s sponsored by Parsec and there’s a few seats left. Just hit reply if you’d like to join or email me.
News
EA buys Codemasters from under Take-Two’s nose
One day no one’s ever heard of you. The next, two of the biggest publishers are volleying bags of money to acquire you.
After we were first told that Take-Two was acquiring UK-based legacy game maker Codemasters for $956 million, EA has apparently swept in with a bigger check for $1.2 billion. The two publishers have a rich history of trying to outbid each other on key properties. And, if completed, this would be EA’s biggest acquisition to date.
Analysts had been questioning whether Take-Two’s initial bid was fair. Codemasters had been deftly navigating the pandemic. Its F1 2020 launched a Virtual Grand Prix Series to replace postponed races that allowed regular mortals to compete against professional Formula 1 drivers and celebrities. Subsequently the game’s concurrent players in the first half of 2020 doubled compared to the previous all-time-high in 19H1.
EA obviously cannot afford to let Take-Two roll up on its territory by further strengthening its 2K Games division. That group has done really well over the past year and represents one of EA’s most formidable adversaries in the sports video game category.
Simultaneously, this year has resulted in the top firms holding a lot of capital which is undoubtedly burning a hole in their balance sheets as they’re wondering how to future-proof themselves for a post-pandemic economy. EA is throwing its weight around by paying a ~25% premium for Codemasters in the hopes of winning the arms race for sports IP.
The Codemasters acquisition will simultaneously strengthen EA’s current subscription library, EA Play, and increase its leverage in negotiating with big tech firms like Amazon, Microsoft, and Google who are looking to expand their cloud gaming catalogues. Perhaps it is time for Amazon to buy both publishers and combine it into the Bezos Video Game Emporium.
It’s the cloud. But not as we know it
The arms race into the cloud is pointless unless it opens up new forms of play.
So far, all we’ve really seen has been a continuation of existing practices around dissemination and development of content. We have more, better, faster ways of downloading more content and access fancy PC rigs that are housed in some massive data centers a few miles out from wherever we are.
The mandate in creative industries, however, should be that innovation opens the door for novel experiences followed by the formulation of new content types altogether.
Enter the launch of an interactive reality TV game on Facebook Rival Peak.
Based on the principle of ‘Twitch plays Pokémon’ Rival Peak offers a large-scale audience the option to influence and impact the progression of a dozen AI-controlled avatars.
At least two things stand out.
First, unlike the concerts we’ve seen in Fortnite and Roblox, audiences can participate. The performances by Lil Nas X and Travis Scott, while cool and novel, are really just railed experiences that you witness. There is no way for players to impact any of it. Not really. Rival Peak, on the other hand, is modeled after Twitch plays Pokémon. Players make decisions for the AI-driven characters to determine what to do next.
Second, Rival Peak is one of the first few instances of a game that exists entirely in the cloud. Different from games downloaded locally or streamed from the cloud, the game instead relies on the computational force that the cloud makes possible. It is a “native cloud game” which makes it a radically different application of cloud technology than we’ve seen so far.
Much like the wireless phone and the horseless carriage, the cloud today is mostly a digital shelf. Its true potential, however, lies in facilitating an Infinity Computer™ that allows an unlimited number of people to occupy an online metaverse simultaneously. It is a prototype of the Navok/Ball concept of a MILE: a Massive Interactive Live Event. Rival Peak is an example of what that future could look like.
A sneak peek if you will.
Sony buys Crunchyroll from AT&T for $1.2bn
Content has been elected king in the Sony kingdom.
CEO Kenichiro Yoshida is on a spree to acquire all relevant assets necessary to build a unique entertainment empire: In the last 18 months Sony has consolidated Silvergate Media (TV production), Aniplex, Funimation, Wakanim (French anime platform), Madman Entertainment, and, now, it has acquired Crunchyroll.
It gives Sony a customer base of 3 million subscribers, which should have a positive impact on its share price. And it dovetails nicely this with its admirable position in console gaming and related IP: The Last of Us Part 2 won in no fewer than 10 categories at this year’s Game Awards.
Both Disney and Nintendo might want to take note.
Money, Money, Numbers
The end of the year brings an abundance of summary data.
The launch of the 9th console generation is a success. In November the PS5 sold 1.1 million units compared to 796k for the Xbox Series X/S. For both manufacturers, the lower-priced digital-only versions sold below expectations. According to NPD, spending on new video game hardware was up +58% y/y at $1.4 billion. Nintendo remained the top dog, however, with the Switch outselling everyone with 1.3 million units despite coming in below expectations. (Bonus: According to Niko Partners Nintendo has also sold 1.3 million units in China for the year and 3.95 million in total.)
Overall software consumption is healthy. ATVI’s World of Warcraft: Shadowlands sold-through over 3.7 million units in its first day of release, and the ubiquitous title Control reported over 2 million sold units. Meanwhile Steam reported a new record of almost 25 million concurrent users, and League of Legends reported an average minute audience of 23 million people for its world championship.
YouTube bragged about viewership: YouTube Gaming racked up more than 100 billion of watched hours across 40 million channels dedicated to gaming. Top titles are Minecraft with 201 billion views, followed by Roblox (75bn) and Garena Free (72bn).
App Annie counted $112 billion in mobile game and app spending, indicating a +25% increase y/y. Top titles were Among Us, My Talking Tom Friends, Roblox, and Call of Duty: Mobile. Meanwhile Wall Street analysts have started to describe the category as ‘stale’.
Right Quick Tidbits
NPR did an interview with Riot Games founders Brandon Beck and Marc Merrill.
Fashion house Balenciaga released a video game to showcase its new collection. That’s exciting for two reasons. First, I missed being actively ignored by beautiful people and can now relive that experience in the safety of my home. And second, there is an undeniable gravitational attraction between fashion and games as we look to redefine the presentation of self in a synthetic environment. We need digital frocks to flaunt.
Play/Pass
Pass. CD Projekt Red for manifesting the dystopian promise of over-promising and under-delivering at the expense of its employees and customers.
Play. Andreessen Horowitz invested $25 million in Parsec, a firm that builds “streaming technology for both work and play.” (Disclaimer: I’m an advisor.) Congrats team Parsec!