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Najeeb's Gaming Report - Issue #17

This is my weekly newsletter focusing on major developments within the Gaming industry. You can fol

Najib El Kihel

October 30 · Issue #17 · View online
Startup and Tech curious, with a focus on #Gaming. Runs a weekly Newsletter on this particular industry.

This is my weekly newsletter focusing on major developments within the Gaming industry.
You can follow me on Twitter here.

Issue #17 - 30 October 2017
Issue #17 - 30 October 2017
Industry News
Microsoft has published its financials for 2018 Q1. Revenues for Gaming remained flat with a 1% increase y-o-y, mostly due to falling hardware revenues (- 48%). Xbox Services did grow substantially though, both in terms of revenues (+ 21%) and users (+ 13%). Microsoft does not provide a breakdown of these Services, but Game Pass launched last June may have played an important role in the increase.
CEO Satya Nadella mentioned in the earnings conference call that Game Pass was “off to a good, very good start”. This is encouraging for Microsoft: while I am bearish about the chance for Xbox One X of having any mainstream appeal, a cheaper combo Xbox One S + Game Pass is very attractive for whoever wants to enjoy a large selection of games at a reduced price.
I’ve talked quite a lot about Backward Compatibility this year, as it has become a differentiating factor between Microsoft and Sony. I am not sure there is a lot of appeal in running games that old (the original Xbox was released 16 years ago) but Microsoft’s efforts really give the sense that they care about their ecosystem. In appearance it looks like Microsoft is focusing on the past (not necessarily a good thing when trailing that much behind Sony) but this could very well pay off on the next generation as we’re getting much stronger signals from Microsoft than Sony that the Xbox ecosystem will be preserved going forward. I just hope it won’t hinder Microsoft to bring truly disruptive innovations for the future Xbox hardware.
Subtitled Pocket Camp, Animal Crossing will hit the App and Play Stores worldwide at the end of November. There was plenty of speculation regarding the monetisation model for this new title, and Nintendo has confirmed that it will go free-to-play with in game micro-transactions for this title. Two factors made it an easy decision: 1) The success of Fire Emblem Heroes - a free-to-play title with micro-transactions which grossed more than Super Mario Run (a premium game) despite a much smaller number of downloads; 2) The fact that Animal Crossing’s gameplay relies a lot on item collection, which is ideal for micro-transactions and should guarantee huge revenues for Nintendo. 
Sad story that of Kinect, a device often ridiculed for its lack of meaningful applications in gaming. There’s definitely a lot of truth to that and Microsoft’s insistence to include Kinect with the Xbox One - even if it meant a premium and less computational power for the console - remains one of the biggest mistakes in Xbox Division history. But innovation is often about finding the right application for a new technology, or even failed technology. With the development of Augmented Reality and the need for depth sensing, no doubt that Kinect-like technology will find its way into many devices, starting with the Iphone X (“sadly” from one of Microsoft’s competitors) and its front dual-camera enabling facial recognition.
Notable Game Reviews
Super Mario Odyssey, Eurogamer
What a week for game releases. Let’s start with Super Mario Odyssey (SMO). This is the second blockbuster launched by Nintendo on Switch this year, a mere 6 months after Zelda Breath of the Wild. SMO has received similar critical acclaim - benefitting from Nintendo’s unrivaled know-how in game design. Many are now comparing SMO to illustrious predecessors Super Mario 64 and Super Mario Galaxy.
When Nintendo revealed the Switch earlier this year, it presented a strong lineup of first party titles for the console’s first year. Zelda, Mario Kart, Arms, Splatoon 2, Mario + Rabbids (with Ubisoft) and SMO all released within 6 to 9 months is very impressive, and yet, I don’t think many predicted the incredible quality of these games - especially Zelda and SMO, possibly the biggest system seller combo in recent gaming history.
Assassin’s Creed Origins, Ars Technica
One of the top franchises of the previous generation comes back after a year sabbatical. And it seems that this extra time has paid off nicely for Origins, with a revamped combat system, a stronger orientation towards the RPG genre (probably the influence of the Witcher 3) and a more lively and coherent open-world environment. With Ubisoft taking its time to renew the formula, we could even see a better Assassin’s Creed game next year, much like Watch Dogs 2 benefitted from many improvements over the first Watch Dogs.
Blog Posts
The third big game to come out last week - Wolfenstein II: The New Colossus - finds itself in the middle of the whole “Are single player games dead?” discussion. I don’t know what to think of the situation: on one hand I understand the appeal (and perceived necessity) for developers to mimic the likes of Destiny 2, GTA Online, Rainbow Six Siege. On the other hand, I’m not sure it would be a wise strategy to necessarily go and compete with such big titles. Bethesda for instance is mostly known for single-player experiences. Would it make sense for them to venture closer to AAA-online oriented experiences - with all the risks that come with such a move? I am not so sure that this would yield better results for Bethesda than focusing on single-player experiences - which can also benefit from paid downloadable content.
Would Microsoft have lost that many players to Sony had Backwards Compatibility been in place for the release of the Xbox One? It’s now easier to understand why Microsoft is pushing so hard for it.
Mobile Apps, aka Micro-transaction Heaven.
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