Looking at the competitive positioning of Microsoft in terms of using cloud gaming tech to expand its audience it has strengths in the most important areas of the solution chain:
>Cloud
>Service delivery
>Games content
>Gaming brand & community
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Piers Harding-Rolls
@PiersHR
Games industry analyst. Games research Find me on Mastodon @piershr@home.social Threads .hr After comments? DMs open
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Console hardware Q1 2021 sell-through performance:
Switch family - 5.86m units
PS5 family - 2.83m units
Xbox Series X|S - 1.31m units
Switch up 12% yoy versus Q1 2020
PS5 outsells Xbox Series by more than 2:1
Details here: ampereanalysis.com/insight/consol
Hey, I wrote some commentary and analysis on the Xbox news:
'Microsoft is firing on all cylinders for next-gen console launch'
On hw+service tiered pricing, why Game Pass Ultimate is the platform, and why MS is very keen for sales momentum from day one
ampereanalysis.com/insight/micros
France bans English gaming tech jargon in push to preserve language purity
‘streamer’ becomes ‘joueur-animateur en direct’
‘esports’ becomes ‘jeu video de competition’
lol
Final Fantasy XVI is a full exclusive for 6 months and a console exclusive for 12 months (it is coming to PC as well)
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Final Fantasy XVI announced for #PS5. First details from Square Enix: play.st/2RzUUM0
0:06
To clarify:
#FinalFantasyXVI is a full exclusive for 6 months (after which it can come to non-console platforms) & a console exclusive for 12 months (after which it can also come to other consoles)
Timing and platform support is totally down to SE’s dev efforts /1
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Final Fantasy XVI is a full exclusive for 6 months and a console exclusive for 12 months (it is coming to PC as well) twitter.com/PlayStation/st…
PS5 is estimated to have doubled Xbox Series X/S sales during Q1 2021
Includes Ampere data. As mentioned in the article and our analysis - keep in mind that the supply constraints mean we are not seeing a true reflection of demand in these sales
Games-related regulation activity heating up
Generally it's been a slow process of evidence building and likely disrupted by the pandemic, but now more countries are actively examining the overlap of loot boxes and gambling
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Brazil launches inquiry to ban loot boxes
gamesindustry.biz/articles/2021-
Hades launching on Xbox straight into Game Pass August 13th
This is a critically acclaimed title that many people won't have played.
Good option for Game Pass
#XboxBethesda #E32021
Square Enix announces new gen Luminous Engine enhanced with Nvidia Gameworks tech for Windows version of FFXV coming early 2018
Nvidia confirms that GeForce Now has surpassed 10 million members. It was at over 9m (approaching 10m) 3 weeks ago #GTC21
Microsoft has said it will appeal the CMA decision
The Competition Appeal Tribunal site says straightforward cases are aimed to be dealt with within 9 months - if MS wins it gets returned to the CMA
Chances of this closing this year are now slim. That means we get the FTC case
Sony referred to a next generation of PlayStation console in its CMA response, with the suggested year of release being redacted
This was in a passage where it was referring to losing access to CoD after 2027, with higher potential for platform switching
PlayStation 6 in 2028?
Project xCloud’s public beta has been live to thousands of users in the US, UK and South Korea over the past four weeks.
This is now being expanded to additional territories in early 2020 – Canada, Japan, Western Europe, and perhaps most interestingly, India. #X019
Console subscription service auto-renewal practices are under investigation by the UK competition authority
Microsoft has agreed to a number of improvements to the consumer experience inc:
>Pro-rata refunds for annual subs
>Inactive membership outreach
gov.uk/cma-cases/onli
Devolver is selling a one-off Non-Fuckwithable Tape (NFT) VHS of its MaxPass+ presentation
Looks like someone has bought it for $1k lol
#E32021
Sony is increasing the price of the PS5, effective immediately
'due to global economic environment, including
high inflation rates'
No change in US pricing but others are as follows across both models:
Europe +€50
UK +£30
Japan +5000 yen
Australia + AUD$50
China + 400RMB
Installed base of 3 console families at end of 2022:
PS5 - 30m
Xbox Series - 18.5m
Switch - 119.5m (surpasses PS4)
MS slightly increased volume share vs Sony, but I expect gap to widen in 1H ‘23 until Series X availability improves
Live service titles in Xbox Game Pass approach 10% of catalogue
- In Sept 2020 total number of titles in Game Pass Ultimate stood at 294 (in the US) - in Aug 2022 this had reached 550 (+87%)
- In this time, live service games have grown from 17 (6% of catalogue) to 46 (9%)
GIF
Only Tencent really has a comparable capability across all these areas. That's why MS is considered tier 1 when looking at the different players in the cloud gaming space. And why it is well positioned to expand its audience IF the 'underserved' AAA gamer exists in large numbers
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Always enjoying talking with @PiersHR one of the top games industry analysts to hear his insights. Another great benefit of being @gamescom in person this year.
Few points:
Judging by Lorne's comments without the PS Plus money the game may not have been finished
The game was delayed which altered the addressable audience, changing the commercial dynamics
4m downloads equates to a much smaller premium sales 'missed' opportunity
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PlayStation Plus was ‘devastating’ for Oddworld: Soulstorm sales, its director has claimed.
vgc.news/news/playstati
3 million PUBG sales on Xbox One in 3 weeks. Very positive start and the way MS is approaching building the community bodes well for continued momentum. Amazing this turned from early access PC hit to arguably MS’ most important Xbox exclusive in ~6 months
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Excited to share that we ended December with over 3 million @PUBATTLEGROUNDS players on Xbox One. Big thanks to everyone who is helping us and our partners at PUBG Corp continue to make this new Game Preview title better and better! news.xbox.com/en-us/2018/01/
There is no official confirmation of FF XVI coming to PC, however the structure of the deal and the mention in the Sony PS5 showcase does suggest this is the case. When this arrives after the 6 months contractual period is up is obviously down to SE. /2
Microsoft has a big PC Game Pass push on at the moment
>Southeast Asia rollout
>attractive terms to pull in content
>promotions for extended trials
PC Game Pass is a useful tier of the service in markets where there is no streaming offer and console penetration is low
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Microsoft is giving free PC Game Pass memberships to non-members who played Halo Infinite (including F2P multiplayer), Forza Horizon 5 or Age of Empires 4.
vgc.news/news/microsoft
Sony says 50% of PS4 Pro users are using 4K TVs <<<underlines importance of MS pushing benefits of Xbox One X to HD users #playstationE3
Microsoft’s Activision deal: Implications for the cloud gaming market & industry
MS's commitments to EC competition authority around streaming of Activision games has a collection of implications for the cloud gaming industry
Report download here: ampereanalysis.com/request_report
🧵
Yes, I also talked to Wesley at Eurogamer. I confirmed the exclusivity but if/when it comes to other platforms is speculation.
Sony confirmed to me it is 6 months full exclusive and 12 months console exclusive. I therefore assume (coupled with the caption in the presentation) that it is coming to PC.
Sony sent me a #PS5 to try out before launch. Thanks
I’ve played a few hours of Astro’s Playroom and the content together with #DualSense haptic feedback feels next-gen
Sony leads the market with 45% share of consumer spending across hardware, games and services via/on PlayStation consoles
This was a 1.3% drop versus 2021, which was picked up by Microsoft
MS & Nintendo now have same share: due to Switch decline and strength of Game Pass
Across the top 200 games on PS and Xbox consoles by MAU in Feb '23, FIFA 23 was the most engaging title, with users playing the title on average across ~10 days out of the month
FIFA 23 beat titles such as Final Fantasy XIV and Genshin Impact on this engagement measure
Sony's CES press conference is leading with #PSVR2
Ampere is forecasting 1.2-1.5m sell-through of the $550 headset in 2023
Sony Japan says the presser will also include a presentation by Sony Honda Mobility, the EV joint venture between the companies
youtu.be/TDevG_biQ0k
The auto-renewal policies on console have always felt off from the consumer perspective - Microsoft changes will help redress the balance
The pro-rata refund should be standard practise, and I like the idea of ‘dormant’ paying subs eventually having payments turned off
Just a bit of blockchain games/NFTs at GDC this year lol
Good to document. Will prob look quite different next year
Netflix has 55 games in development with 35 currently on the service (has 2.5 months to add 15 games to hit its 50 target by end on year)
‘We’re seeing encouraging signs of gameplay leading to higher retention’
Excited about the cross-sector franchise building opportunity
Some observations about the MS GeForce Now deal
- in line with MS strategy to bring its store to all platforms
- Nvidia takes no cut from 3rd party storefronts
- bring your own game format not competitive with Game Pass
- makes MS more competitive in the PC gaming space
1/3
To sell through 10m PS5s faster than any other PS against the backdrop of the pandemic & its implications is a great achievement
Pre-pandemic, a strong launch was expected considering the sales success of the PS4 and simultaneous global launch; COVID-19 called it into question
Console sell-through performance July-Sept quarter
Switch - 3.91m
PS5 - 3.24m
Xbox Series - 1.36m
-PS5 supply improves significantly
-Xbox Series S outsold Series X in some key markets
-PS4 declining quicker than expected
Read more here: ampereanalysis.com/insight/consol
US console gamers are ready to put money into superhero titles and Ubisoft's #AssassinsCreedValhalla
Results of a quick poll we conducted as we gear up for the holiday shopping season
Details here: ampereanalysis.com/insight/us-con
On the earnings call Sony actually announced an increase to its PS5 FY shipment forecast to 19m (+1m) meaning a target of 6.2m for the Jan-March ‘23 quarter, double the highest PS4 record
Supply is full and Sony must be experiencing continued pent up demand; let’s wait and see!
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Sony earnings: End of Dec ‘22 PS5 sell-through 30m, shipments 32.1m leaving 2.1m in transit/channel
Supply looking normalised
No change to FY forecast of 18m shipments, but looks very unlikely that it will reach necessary 5.2m in Jan-March ‘23 (PS4 peak was 3.1m)
New analysis on Microsoft's console positioning and #XboxSeriesS news here. With updated next-gen forecasts
ampereanalysis.com/insight/micros
DLSS has a new ultra-performance mode that runs up to 8K. Nvidia just showed Control running at ~60 FPS and Wolfenstein at ~75FPS in 8K.
DLSS 8K renders at 1440p and upscales to 8K. The games were running at 8K resolution, high settings on a #RTX3090
New research: Global console market fell 7.8% in 2022 (-2.1% in constant currency) to $56.2bn (from $60.9bn)
- market hampered by console availability, delays to major games
- other factors incl. the post-pandemic reset & macroeconomic conditions
Market still +18% vs 2019
🧵
Microsoft’s acquisition of Activision Blizzard is inching closer to completion
The combined company will challenge EA as the biggest publisher across PlayStation and Xbox based on active users
Sony Dominates 2016 Console Market With 57% Share of World Market Value bit.ly/sonydominates #sony #playstation
Interesting data from our latest UK consumer research
PS5 owners are more likely to treat it as their primary console compared to all other consoles (71% of owners)
48% of Xbox Series X owners said they use their console the most
Will be interesting how this changes over 2023
GIF
MS' statement that it will not agree to a structural remedy for the ABK acquisition means that the CMA will have to climb down from its 'provisional' findings position and accept a behavioural remedy alone to agree to the deal
What audience is Microsoft tapping into if it acquires Discord & what are the implications?
A thread
The biggest segment of users within US Discord users at 38% are what we at Ampere identify as ‘Insatiable Gamers’ – gamers that play on multiple platforms and consume a lot
It’s an interesting dynamic; on the face of it, these are the two biggest players in cloud gaming market and should be classed as competitors, but this deal is mutually beneficial and underlines that streaming is a distribution strategy, not a business model
3/3
FIFA 23 has been huge for EA
- biggest launch in franchise history
- surpassed FIFA 22 lifetime sales within 6 months
- Jan-March ‘23 net bookings were up 31% year-over-year
Ampere data shows ~18m played FIFA 23 across PlayStation and Xbox in March ‘23
Xbox Game Pass Ultimate and PS Now users in the US are using a mix of distribution to consume their content:
40% of XGPU users only download games, 8% only stream
27% of PS Now users only download, 12% only stream
The rest mix it up
Note: this is 13-64yr old internet users
How Rockstar is using sub services to drive continued momentum for GTA V, GTA Online, RDR2 & Red Dead Online
Take Two is quite conservative with new models/distribution but this is pretty sophisticated
More insight from my colleague here: ampereanalysis.com/insight/how-ro
NetEase has posted a strong response to Blizzard China's comments around its last minute attempts to negotiate an extension to the existing deal
Says Blizzard is looking for a 3 year deal with a new partner
English version attached via Google Translate (pls take into account)
Latest PlayStation business strategy slides offer some interesting stats on the state of its business. A few observations by me 🧵
- compared to the PS4 generation, monetisation is up 15% but full game spend is down 21% over the same timeframe. Hence focus on live service games
Looking at this, and based on our activity data, more than 60% of combined CoD MW2/Warzone 2 players in the UK are F2P (non-premium) exclusively
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Here are the UK's Top 20 games of 2022, with sales figures and the % share of digital
The new PS Plus: Sony simplifies and broadens its games content subscription offer
Sony is re-configuring its two console-focused games subscription services into a single product with multiple tiers. PS Now will shed its name and be rolled into PS Plus 1/7
Embracer Group aggressively pursuing a cross-media IP & production capability
Acquiring Dark Horse Media which includes 300 IPs, comic, film & TV production
The convergence of entertainment IP in the games, video, anime, comic space will grow in 2022
New research: EA takes console active user share lead into 2023
Data pulled from the Ampere Games - Analytics platform shows EA's combined total of MAUs on PlayStation and Xbox consoles across its portfolio of games is higher than its competitors
A 🧵with further insight...
Subscription services were the only area of growth in 2022 - up 5.6% (10.9% cc) to $7.8bn
- subscription volume was actually down, but higher ARPU from new sub tiers resulted in more spending
Sony says almost 30% of current PS5 users never used a PS4
Our consumer research shows that PS5 owners are more likely to be single console owners versus the competition
Considering product availability since launch and where we are in the lifecycle 30% appears quite high
Bloomberg says no new Nintendo hardware in the current fiscal year (up until end of March '24)
Switch was released March 2017
We currently have a next-gen console coming at the end of 2024 in our forecasts
Netherlands & Belgium clampdown on loot boxes in games has seen multiple games remove them in these markets. EA already stopped paid for FUT player packs in Belgium
Not ideal for EA. I estimate the FIFA game franchise is a $2bn annual business, a majority coming from FUT sales
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BREAKING: The Netherlands Gaming Authority has imposed a penalty on Electronic Arts $EA for the inclusion of "addicting gaming elements" in their #FIFA games.
For every week without removal of said elements, EA gets a €500k penalty, with a max penalty of €5 million!
#FIFA21 twitter.com/NOS/status/132…
Yes, I know the normal cadence of console releases. The way it is phrased suggests after 2027, that’s why I mentioned 2028
Just a thought: perhaps the slow start to this gen means a longer lifecycle this time around
Square Enix makes a strategic investment in French cloud gaming company Blacknut
Blacknut operates its own direct to consumer service, but also white labels with a cross section of telcos
Take-Two has acquired mobile multi-game subscription service GameClub
GameClub is a small independent player offering its service across iOS and Android, competing with Apple Arcade and Google Play Pass
Some obvious synergies with other mobile acquisitions including Zynga
Netflix and Games - content budget considerations
One area of analysis which is useful to shine a light on is R&D/content spend and how Netflix's shift into games might impact its content budget and profitability 1/
Nintendo & Sony are changing their subscription policies following a UK competition authority investigation
Nintendo: Switch Online to no longer be sold with auto renewal set as the default
Sony: Agreed to measures to protect customers who haven’t used subs for a long time
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Console subscription service auto-renewal practices are under investigation by the UK competition authority
Microsoft has agreed to a number of improvements to the consumer experience inc:
>Pro-rata refunds for annual subs
>Inactive membership outreach
gov.uk/cma-cases/onli
Nintendo earnings April to Sept
Switch sell-in down 34% yoy to 8.28m units
Second half of fiscal year is forecast to be more in line with last year helped by Switch OLED release
Console gaming market 2021 overview!
>Consumer spending on games console hardware, games and games services grew to a record high in 2021 and reached $60bn
>The games console market remains in rude health with Ampere forecasting it to grow again in 2022 to over $61 billion
1/9
Roblox Is Now Worth More Than Ubisoft and Take-Two Combined: What Does This Mean for Gaming?
Includes my comments. Thanks
ign.com/articles/roblo
A few comments on Epic’s private antitrust lawsuit against Apple:
Epic’s anti-monopoly pain points focus on two key App Store elements: having to use Apple’s payment processing (30 % rev share) and having to follow Apple’s app publishing guidelines /1
Had a chance to try out Razer’s proof of concept Android handheld console at #GDC22 powered by Qualcomm’s Snapdragon G3x
Screen and graphics looked great. Whole thing felt very solid and robust. A bit unwieldy
The strategic rationale for Microsoft acquisition of Discord is part defensive (stopping e.g. Amazon acquire, disrupt Slack, solve Discord threat), part product fit (Xbox, cross-platform building block, cloud gaming) & part immediate rev opp (Azure, Discord sub biz, 120m MAUs)
India has emerged as an Android mobile-first market and one where games consoles and gaming PCs are under penetrated. It is also a market where Microsoft has strong Azure cloud data center coverage.
Sony earnings: PS Plus subscribers are up on the previous quarter as you’d expect with substantial PS5 sales (46.4m versus 45.4m)
Still down from pandemic peak of 48m at end of 2021
New report!
Microsoft’s Activision acquisition: Implications for the cloud gaming market and industry
The commitments that MS has made to the EC competition authority around streaming of Activision games has a collection of implications for the cloud gaming industry
🧵
Steam platform concurrent users have breached 26m for the first time today
Post 1st lockdown growth in Q1 2020, new records for PCCUs have been set in Jan and Feb 2021
Note: in-game CCUs have not matched the record set in March 2020
Sony shares latest PS Plus numbers:
Ended FYQ1 (April to June) at 47.3m, down from 47.4m in previous quarter
Assuming this includes conversion of PS Now subscribers, this result is below our expectation even taking into account seasonality and existing Now & Plus overlap
However, this does underline the difficulty of making a decision about inclusion at launch for games content subscription services
It is a double-edge sword. Guaranteed income with smaller upside, versus instability/risk and potential for larger returns
Really very little reason to compare Switch second week sales with other platforms. No supply. Let's reconvene during April
This takes the installed base of the 3 families of consoles at the end of September to the following:
Switch - 89.7m
PS5 - 12.8m
Xbox Series - 6.7m
At the start of each gen I often get asked, ‘is this the last gen of consoles?’ and the latest is no different (I’ve been fielding that question since 2006 lol)
Anyway, doesn’t look like Sony thinks it is
Console hardware 2021 sell-through performance:
End of year shortages bite
All consoles sold 48m units (inc. legacy), up 2% but hampered by lack of stock
Switch family - 24.3m units
PS5 family - 12.5m units
Xbox Series X|S - 7.7m units
Details here: ampereanalysis.com/insight/games-
Report Reveals How Activision Blizzard Merger Would Quickly Make Xbox a Live Service Juggernaut - IGN
Includes our data and analysis. Thanks
Interesting document. Although not happening yet, extending the 12% rev share for MS Store from PC to console is, IMO, more likely than not & probably a question of timing
A move like this will be highly disruptive to the other console platform companies
My thoughts 1/
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Microsoft wants to reduce its Xbox store cut to just 12%. A confidential Microsoft document reveals the company's plans, along with some details on Xbox exclusive games. All the details here: theverge.com/2021/5/2/22415
Xbox Game Pass at 15m active subscribers up from 10m in April.
Impressive growth and undoutedly helped by strong promotional offers and lockdown orders during Q2.
Microsoft confirms it intends to add Activision Blizzard console/PC games to Game Pass on day of release
Based on Microsoft’s initial response to the FTC’s legal move to block the ABK deal, day one release of console/PC titles underpins the rationale behind the deal
Microsoft’s Xbox Series upgrade to its Azure DCs means that, when rolled out, users will now be able to stream Xbox Series games to previous gen Xbox Ones. Very few Xbox Ones are being sold globally in 2021, but this will help breath life into the installed base of 54m devices
An integrated Microsoft Store & Game Pass proposition on all platforms is key to the company's gaming expansion vision
The Actiblizz acquisition makes a mobile storefront more viable; could also mean mobile apps in GP (perhaps a mobile focused tier?), but not possible yet on iOS
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Microsoft is building an Xbox mobile gaming store to take on Apple and Google. A new Xbox Mobile Platform is on the way for mobile devices, and the Activision Blizzard deal is key to this new platform and store. My full report here: theverge.com/2022/10/19/234