The Great Video Game Business and Financial (In)Stability Thread

Excellent post, Dejanzie.

Meanwhile, I'm having a bit of whiplash at Ubisoft going from the symbol of soulless annualization and cookie cutter design to now being Old Faithful with consistent, high quality releases. Taking a year off Assassin's Creed was a better PR move than I thought.

Not to turn this into an Ubisoft lovefest, but they've also supported a lot of indy/experimental stuff.

My suspicion is that since Ubisoft is a French company, they've got a much better perspective in terms of generating artistic output and managing employees. American management is always a tire fire when it comes to anything that isn't extracting the maximum amount of money in very short time periods.

Many publishers have an "indie" branch these days. EA has recently published the Unravel games and Fe. Square-Enix has a whole division dedicated to indies like The Turing Test and Black the Fall. Microsoft has their ID@Xbox program to provide publisher support for indies, but they're also directly funding projects like Ori and the Blind Forest and its sequel. Sony has been funding indie-size projects for ages, like Bound and Rain and Resogun, as has Nintendo with games like Pushmo and Sakura Samurai and such. In Japan, Level-5 and Nippon Ichi both have full-time indie scale development teams, as well.

Bethesda, Take Two, Activision, Capcom, and Sega don't seem to do as much at the indie scale, but Bethesda has doggedly continued to support modding their games even as the rest of the AAA industry has largely abandoned that, and Sega at least supports some really niche genres through Creative Assembly and Atlus.

Isn't Ubisoft the 'lets add xp buff microtransactions to our game' company.
I think I have seen better.

The bonus XP controversy is extremely overblown. It is not necessary, in fact to me, it is not even desirable. After those reviews that mentioned it, a lot of people (including me) bought it, then discovered that they were leveling way too fast. The game's auto-leveling system prevents that from being a real problem, although I leveled so fast I almost never encountered an enemy above my level.

So many people complained about leveling too fast that in the second or third patch, a couple weeks after release, an option was added to turn off bonus XP (and a separate option to turn off bonus drachmae).

Now we have the option. If you want to zip through the game, level up quickly, and max out your abilities, you can use the XP bonus. If you want to go at the game's designed pace, you can still do that even if you bought the XP bonus.

BTW, in response to player requests, they are also adding an Odyssey New Game+ option in a future update. From what I understand, Ubisoft is being just as responsive to their game communities in every other active franchise, too. I can remember player requested changes being added to For Honor, Ghost Recon, and Rainbow Six. This is a new thing for Ubisoft, and I hope they keep it up.

I wasn't surprised that critics emphasized the desirability of the bonus XP add-on. Their livelihoods literally depend on being able to play through games as quickly and painlessly as possible. Of course they're going to prefer a bonus XP option.

BadKen wrote:

From what I understand, Ubisoft is being just as responsive to their game communities in every other active franchise, too. I can remember player requested changes being added to For Honor, Ghost Recon, and Rainbow Six. This is a new thing for Ubisoft, and I hope they keep it up.

This.

They are extremely responsive to the communities desires in each franchise. They not only actively add new content but rework any perceived wrongs with their games based on feedback from the game's community.

Sometimes it may take 4-6 months to get there, but they do get there. Frankly, i've not seen any other dev house willing to do something like this to games already launched. Even Blizzard doesn't do this to released games. Granted they'll go through those same iterations in house so...

The fact Steep is still being heavily supported by Ubisoft shows their commitment to their titles. It's a shame I find their open world games to be incredibly boring after five hours or so.

ClockworkHouse wrote:

Bethesda, Take Two, Activision, Capcom, and Sega don't seem to do as much at the indie scale, but Bethesda has doggedly continued to support modding their games even as the rest of the AAA industry has largely abandoned that, and Sega at least supports some really niche genres through Creative Assembly and Atlus.

Out of all of those, I'd give Sega a bit more credit. Over the last decade or so, they've basically turned their western studio acquisitions into a AAA strategy/Football Manager powerhouse. They're arguably the biggest publishing competitor to Paradox in the "niche strategy PC game" space.

Sega's western studio lineup is basically the AAA of niche genres: Creative Assembly(Total War(hammer)), Amplitude(Endless series), Sports Interactive(Football Manager), and Relic(WH40k: Dawn of War, Company of Heroes, and Age of Empires 4).

Age of Empires 4?? *dashes out to google*
(it won't be but if they made AoE4 like Dow2 I would squee to death)

Anyone have any hot takes on the Steam rev share changes?

Indie devs seem unenthused:

IMAGE(https://i.imgur.com/wgMOVTX.png)

Yeah, this seems entirely aimed at trying to convince AAA publishers to stick around and not make their own launchers. That article mentions Blizzard, Ubisoft, EA, and Epic making their own launchers, but Bethesda and others have also started building out that infrastructure. Fallout 76 isn't on Steam, last I checked.

Valve clearly recognizes the need to take a smaller cut of revenue to convince publishers to stay, but they're also not willing to make that change in an egalitarian way. The less money you bring in, the bigger cut they'll take. That's impressively regressive.

Bahahahahahahaha

What assholes. They're raking in the dough and they are only taking a lesser cut on huge selling titles? Get the f*ck outta here. You can't make this sh*t up.

Yup. Incidentally Bethesda has had their own launcher for a couple of years, since around the time when the Fallout Shelter mini game launched IIRC. It's pretty minimal, as most of the buttons (including the ones to buy games) just open a corresponding web page, but it does apply game updates etc.

Strangely, their launcher covers Fallout 76 and Fallout 1/2/tactics, but not 3/NV/4. All kinds of fun exclusive deals involved one presumes.

Didn't FO3 actually use (*shudder*) Games for Windows Live at one point?

The Valve revenue share change is the first thing that's ever made me seriously wonder about the long-term lifespan of Steam.

This is a direct response to Epic putting Fortnite on its own launcher. Valve has calculated the lost revenue there and they're thinking about the next big AAA release, something like Red Dead Redemption maybe. They dont want to lose that too.

Doing this shows who matters to Valve. They continue to bury little (and I say, Important) games while doing everything possible to make the biggest games as big as possible (as long as they stay on Steam)

Gremlin wrote:

The Valve revenue share change is the first thing that's ever made me seriously wonder about the long-term lifespan of Steam.

I doubt Steam and Valve are going anywhere any time soon. But Steam, capital S-T-E-A-M, the storefront effectively synonymous with PC gaming? The writing has been on the wall there for awhile, I think.

Right now, on the business side of things, Steam doesn't make anyone happy. The big publishers are tired of giving Steam a third of their revenue as a web host and payment processor. Indie devs are tired of Steam burying their games and giving them no mechanisms to engage with users other than reviews. Even mid-tier publishers seem to be struggling against Steam's discoverability issues.

And on the consumer side, Steam has rested on their laurels, and now their business model is built on a presumption of intolerance. Not, like, social intolerance, although there is that, but that their users won't tolerate non-Steam interfaces on their computers. And some of them don't! But other companies have quietly demonstrated that if you have a desirabile non-Steam product and a launcher that isn't too terrible, buyers will tolerate it.

Steam got where they are through innovative ideas for a client, ridiculous sales tactics, and strong first-party anchor games. Now their client has stagnated and other efforts at innovation have floundered (their half-assed effort to crack the console market went over about as well as the Ngage), Steam sales aren't ZOMG events anymore, and their first-party game efforts have narrowed to a few popular titles. I can't even imagine the Valve of today making Portal or even Team Fortress and Left 4 Dead.

I expect we'll see a future of every major publisher offering their own client, storefronts competing on key sales for those clients, and mid-tier publishers getting their stuff everywhere they can, as usual. Steam isn't quite Sears or Blockbuster Video, but barring major changes, they'll be one (still a very big one) among many instead of the ONLY one.

Valve has the attention of a mayfly and only does follow-through due to inertia. Controllers, Steam link, the Steam box...my guess is if it isn't making a huge amount of money right now or doesn't have an enthusiastic team, it is much less likely to get worked on.

Now, they've got a lot of inertia in some things, so I don't expect DOTA2 to go away any time soon...though it is probably notable that they haven't had much in the way of original first party titles in a long time. I mean, they've always developed their games by buying outside talent. As near as I can tell, they haven't shipped a completely in-house thing that wasn't a sequel since...Half Life.

Middcore wrote:

Didn't FO3 actually use (*shudder*) Games for Windows Live at one point?

It did. IIRC, the mod to disable that was the very first mod I installed.

Polygon: FTC pledges loot crate investigation (update): Gaming monetization tactic compared to gambling

The Federal Trade Commission today agreed to investigate video game loot boxes, following an official request by Senator Maggie Hassan (D-N.H.).

In a Congressional oversight committee hearing earlier today, FTC chairman Joe Simons affirmed Sen. Hassan’s request that loot boxes be investigated. The exchange took place in a Senate Commerce subcommittee hearing that was mainly focused on data privacy issues, but which ranged into other territories.

“Loot boxes are now endemic in the video game industry and are present in everything from casual smart phone games to the newest, high budget releases,” said Hassan, adding that loot boxes will “represent a $50 billion industry by the year 2022,” likely referring to a report earlier this year from Juniper Research.

Speaking of Steam, many indie devs are reporting that there was a bug in discoverability on October 4th. The bug has been fixed, but apparently many small games never saw their traffic recover: https://twitter.com/SimoRoth/status/...

Would be great if Steam dominance goes away. But if the alternative is everyone having their own exclusive store, then that seems even worse.

ClockworkHouse wrote:

I expect we'll see a future of every major publisher offering their own client, storefronts competing on key sales for those clients, and mid-tier publishers getting their stuff everywhere they can, as usual. Steam isn't quite Sears or Blockbuster Video, but barring major changes, they'll be one (still a very big one) among many instead of the ONLY one.

It's one of those cyclical processes; everyone has seperate storefronts, then decides: "Hey, wouldn't it be great to have everything in 1 place". Everything then goes in 1 place, then people get sick of that and say "Hey wouldn't it be cool to have bespoke stores". Then everyone gets sick of that....

What are the business viable alternatives though?

Maintain a 70/30 split for everybody? Give everybody 90/10? Give small indie developers 90/10 and keep everybody else at 70/30? Charge all developers for the operational costs incurred?

I REALLY appreciate only dealing with one storefront. My experience with other storefronts is, basically, that I forget they exist and I forget to play the games I bought on them, and I don't like signing on because there are always passwords to remember and hoops to jump through and the time and money I spent with them feels wasted.

Valve isn't changing things for the worse for anybody with this deal. To the extent that it keeps AAA publishers from making their own storefronts, it is valuable to me as a consumer.

I think that the top 1% or 0.1% of game on Steam are responsible for 90% or more of Steam's revenue. One way to look at this is that Valve is agreeing to take a substantial hit on their most profitable revenue segment in order to continue subsidizing open access publishing for the other 99% of the game developer community.

I think Valve should just make it 20% fee standard across the board and claw back some of the market share they have lost. The are making billions for being a storefront I am sure they can take the hit which will be offset some by more publishers engaging again.

polq37 wrote:

I think that the top 1% or 0.1% of game on Steam are responsible for 90% or more of Steam's revenue. One way to look at this is that Valve is agreeing to take a substantial hit on their most profitable revenue segment in order to continue subsidizing open access publishing for the other 99% of the game developer community.

See, the bit that concerns me is not the exact revenue split or whatever: the proposition Steam gave developers for putting stuff on Steam rather than itch.io (which lets developers set their own revenue share) is that the value added by Steam in terms of discovery and traffic was worth the cut that Steam took.

Steam giving top sellers a revenue share cut signals that Valve no longer thinks that what they are providing is worth a 30% cut in the current market. Maybe it is a preemptive move to avoid a rival Epic Store or something, but nevertheless it indicates that Valve is less confident in the long-term viability of their current business model.

Now Valve often makes strategic moves to undercut competition. The Steam Box was a rousing success from Valve's point of view because it caused Microsoft to rethink their Windows Store plans. Once that happened, I suspect that internal interest in the project withered. Likewise, the VR stuff was partially to keep Oculus and Facebook from cornering the VR market with a non-Steam VR store. VR is cooler than boring hardware design, so my guess is VR still has more internal support.

polq37 wrote:

What are the business viable alternatives though?

Maintain a 70/30 split for everybody? Give everybody 90/10? Give small indie developers 90/10 and keep everybody else at 70/30? Charge all developers for the operational costs incurred?

I REALLY appreciate only dealing with one storefront. My experience with other storefronts is, basically, that I forget they exist and I forget to play the games I bought on them, and I don't like signing on because there are always passwords to remember and hoops to jump through and the time and money I spent with them feels wasted.

Valve isn't changing things for the worse for anybody with this deal. To the extent that it keeps AAA publishers from making their own storefronts, it is valuable to me as a consumer.

I think that the top 1% or 0.1% of game on Steam are responsible for 90% or more of Steam's revenue. One way to look at this is that Valve is agreeing to take a substantial hit on their most profitable revenue segment in order to continue subsidizing open access publishing for the other 99% of the game developer community.

I was nodding along with this, because as much as I'm annoyed with Steam right now, I really would like an interface for all my games that lets me install and uninstall without hassle. Not to mention tracking friends, and doing just the basic-ass stuff that Steam does. And now I'm kind of wondering, "Wait, why the hell doesn't Windows do most of this?"

The weird thing to me about Steam continuing with its giant percentage in the face of what looks like is going to be some pretty vicious competition, is that it sure seems like they could afford do so pretty painlessly. It's not like they're developing anything. As best as I can tell, they're pretty lightly staffed. It just doesn't seem like it makes sense from a business or a philosophical perspective.

Discord is starting in that direction. It can see some of my games and launch them no matter what actual launcher they are under, but it's still less than half of what I've got installed.

It really should be a system function, but Microsoft can't get off the "Xbox is for games" position.