Triplepoints of Interest: Dec. 25

Happy Holidays from everyone at TriplePoint! In this week’s TPoI, the Nintendo Switch sets a new first year sales milestone, Apple apologizes for slowing down iOS devices, and a gaming-related swatting incident leads to fatal shooting.  

Nintendo Switch Breaks First Year Sales Record

Data from Media Create’s recent gaming market survey indicates that the Nintendo Switch has become the fastest selling console in the Japanese market, even outstripping Sony’s Playstation 2, which sold 200,000 less units than the Switch in its first year. IGN reports that these numbers were helped by the recent holiday season, where over 221,000 units were purchased from major Japanese retailers. My Nintendo News reports that the Nintendo Switch has now outsold Nintendo’s previous Wii U console, which sold 3.3 million units throughout its lifespan. Polygon speculates that these high sales numbers indicate the consoles cultural appeal and expect the console to sell well in the future.

Apple Apologizes for Slowing Down iOS Devices

In a lengthy blog post posted to the company’s website Thursday morning, Apple gave an in-depth explanation of why recent updates to iOS devices have been slowing them down. CNN reports that the updates purposely slowed down older devices in hopes to extend their battery life. The Verge praised Apple for temporarily discounting the price of battery replacements on older devices from $79 to $29 while nothing that Apple’s decision to slow down devices greatly impacted the performance of devices for heavy tasks like app use and gaming. Business Insider reports that Apple will be adding new features to indicate battery health and increase performance, which should help consumers decide if they want to upgrade or fix their current device.

“Swatting” Incident Leads to Fatal Shooting   

Swatting, the act of calling in a fake threat of violence to the police which has seen a rise in popularity in the gaming and live streaming community due to an increase in internet trolling and doxing, may have led to the deadly police shooting of Kansas man earlier this week. The Wichita Eagle reports that the false story reported to the police may have been made by a disgruntled gamer who lost a small bet while playing Call of Duty with a friend. The Verge reports that Andrew Finch, the victim of the fatal incident, opened the door for the SWAT team and was shot down in response. The Chicago Tribune featured a statement from Deputy Police Chief Troy Livingston who said that they had reason to believe that the shooter was holding his mother, brother and sister hostage and that the police force is investigating the incident and hope to find the instigator soon.    

TRIPLEPOINTS OF INTEREST – MAY 29

In this week’s TPoI, PS3 production has officially ceased, Apple reveals App Store earnings to date, and a Twitch streamer allows users to experience the stock market.

Sony Halts PS3 Production in Japan

Back in March, Sony briefly mentioned the possibility of PS3’s production being discontinued. MCV disclosed that the official Japanese PlayStation website stated that shipments for the standard 500GB model have “ended’. A representative from Sony Japan spoke to Kotaku in March, revealing that PS3 shipments in Japan will eventually cease and that the PS3’s production has already terminated. Launched back in November 2006, Polygon thinks the PS3 had a decent run for 10 years, but believes it may have faced difficulty keeping up with its competitor the Xbox 360. Despite the end of the PS3 era, iTechPost anticipates Sony will focus its time and effort in marketing the PS4 and its upcoming titles.

App Store Developer Earnings Exceed $70 Billion

Apple announced that their developer community has earned over $70 billion since the App Store launched in 2008. MacRumors disclosed that App Store downloads have grown over 70 percent in the past year, with the top categories being Gaming, Lifestyle, and Health. One of the biggest drivers of the store’s success was games such as Pokemon GO and Super Mario Run, according to Gamasutra. Forbes is impressed with how well the store is doing, and reports that developers can even respond directly to customer feedback or offer tech support if needed. The App Store numbers are admirable, but TechRadar is curious to see how it stacks up to Google’s Play Store.

Twitch Channel Uses Real Money for Users to Play with Stock Market

Amazon engineer Mike Roberts created the Twitch channel “Stock Stream” and invested $50,000 into the channel to start to allow viewers to invest in whatever they pleased. BusinessInsider reports that Roberts had seen the idea floating around the web for years without much progress, and finally decided to put it in action. TheNextWeb explains that players participate in 5-minute voting rounds, using chat commands to buy or sell a stock. All trades are done on the Robinhood trading app which is used to buy shares. However, if the account falls below $25,000, it will come to a close due to FINRA/SEC regulations. SlashGear finds the concept intriguing and is curious to see how it will pan out. PCGamer finds it to be the strangest Twitch Play ever due to the fact that Roberts is willing to take a huge risk with his own finances.

TriplePoints of Interest – Week of July 25

Three weeks later, Pokémon GO continues to generate massive headlines! This week we’ve highlighted notable coverage about Pokémon GO’s San Diego Comic-Con takeover, Mark Zuckerberg’s love for Pokémon GO, and an recent report on Pokémon GO app downloads. Also worth a look: Twitter is streaming esports, Dota 2 adds VR spectator mode, and Doom: The Board Game is coming to a tabletop near you.

Continue reading TriplePoints of Interest – Week of July 25

TriplePoints of Interest – Week of September 21

You might not be reading this if you’re standing in line for a new iPhone 6S. Nonetheless, here is a fun tidbit about the craze around the latest iPhone, plus other fun news from the games industry and beyond.

Are you the biggest Apple fan?

Does anyone else want the new iPhone 6S or 6S Plus more than you? The Verge reports that Australian Lucy Kelly might take the crown for most dedicated iOS user by placing an iPad powered by a robot to hold her spot in line at Sydney’s flagship Apple store. Mashable reports that Ms. Kelly intends to purchase her iPhone through her robot, therefore not requiring her to be present at the register when she receives her new product (keeping in mind it is cold and rainy in Sydney now).

Keep your iPhones safe!

Apple has removed 300 apps from the App Store believed to be infected with malware. According to WIRED, several security companies have pointed out that infected apps can help attackers create a direct line to individual devices and steal information including passwords. MacRumors has the list of the top 25 apps affected by the attack.

More TV stations will broadcast eSports!

Building on the efforts of eSports to go mainstream, TBS will be broadcasting 20 Counter-Strike: Global Offensive live events starting in 2016. VICE Motherboard points out that this production is put on by WME/IMG, a sports events company, and Turner Broadcasting, without the help from an existing eSports organization like ESL, showing traditional sports media’s commitment to the genre.

Half-Life 3… Now I have your attention!

Fans just can’t get enough of Half-Life 3 rumors and teases. One of Valve’s main writers, Chet Faliszek, responded with a firm “no” when an audience member at EGX Birmingham asked if the game will have VR support. PCGamesN speculates that Mr. Faliszek’s response suggests that Valve is backhandedly confirming Half-Life 3’s impending release.

TwitchCon kicks off today!

Watch the keynote and all the action, and learn about the future of broadcasting on the official Twitch streaming channel!

Photo from Gotta Be Mobile

TriplePoints of Interest – Week of June 8

What juicy pre-E3 news did we uncover this week? The main event was WWDC and then VR stole the show! Who’s going to be checking out some VR hardware at the show this year?!

Looking fine, iOS 9!

Now it’s Apple’s turn! WWDC made waves yet again with iOS 9 among other announcements. Miss the big reveals? The Next Web has you covered with a summary of all the splashes. Tech Times has a summary of Metal, which allows for better graphics rendering and thus smoother scrolling for users. According to writer, Lauren Keating, 2K, Blizzard, and Aspyr are among the developers using it to enhance their apps.

The Vainglorious Apple Design Awards

In other WWDC news, Apple announced the winners of this year’s Apple Design Awards. Crossy Road, Vainglory, and Mediocre Games’ (creator of Smash Hit) Does Not Commute were among the winners, says CNET.

Green Robot is on a Rampage!

App Annie reported this week that Android has surpassed iOS in growth this month, seeing a 50% rise in global consumer spending versus iOS’s 30%, says GamesIndustry International. Writer, Matthew Handrahan, credits multiplayer games as a great driver of spending, with 60% of consumer spending coming from multiplayer titles.

See you at the inaugural TwitchCon 2015!

Twitch announced their panel line up for their inaugural TwitchCon event, says GamesIndustry International. Subjects to be covered include the legality of Let’s Play videos and streams, using Twitch as a fundraising platform, and tips to building healthy communities.

ESPN is Legendary!

ESPN released a long-form piece profiling famed South Korean League of Legends player, Lee “Faker” Sang-hyeok, and the culture of eSports in the country. Writer, Mina Kimes, visited the headquarters of his team, SK Telecom T1, in Seoul and followed him on his road to the year’s first major international tournament, Mid-Season Invitational tournament in Tallahassee, FL. According to Daily Dot, this article is set to appear in a special ESPN The Magazine issue that will dive deeper into video games, featuring NFL player, Marshawn Lynch on the front cover for his upcoming appearance in Call of Duty: Black Ops III.

The Oculus Rift is spawning soon!

The Oculus Rift in its final form was revealed yesterday with a view of its launch model and controller. WIRED has the full photo gallery, along with the release time frame of Q1 2016. Kotaku also has the list of games that will be released for the device.

Image from BGR

TriplePoints of Interest – Week of April 13

Welcome back to our snippet of the top news in tech and games this week! The burning question this week is, of course, who has pre-ordered an Apple Watch? Sound off in the comments!

Will the Apple Watch disrupt both the tech AND fashion world?

The Apple Watch craze is in full force clocking in at over 1 million pre-orders, according to USA Today. The Verge has already identified 3rd party accessory manufacturers creating battery life solutions for the watch without any evidence of whether or not the Apple Watch’s battery life is too short. Analysts are already examining the Apple Watch’s potential to disrupt the fashion world, according to Business Insider, warning well-known watchmakers like Fossil and Movado of the threat they may pose.

Old Spice made a game, and not the usual kind you’re thinking of

Twitch Plays Pokémon has inspired Old Spice’s latest marketing campaign, Twitch Plays Old Spice. According to Daily Dot, from April 16-18, viewers will be asked to write in the chat what they want the wilderness-stranded live-action (human) character to do and apparently, anything goes (someone just suggested “sucker punching” a bear, causing a Game Over)! It will be interesting to see how this campaign unfolds and if Twitch users will be as friendly as they were to Red in Pokémon Red and Pokémon Blue. This is one of many Twitch Plays Pokémon-inspired campaigns in the last year including the now-defunct Rev3Games stream, Twitch Plays Adam Sessler.

Guitar Hero is back for its 10th anniversary. Who is feeling old already?

After a years-long hiatus, Guitar Hero is back for its 10-year anniversary reissue. Engadget reports the reboot aims to make guitar playing more realistic by adding two rows of buttons at the top of the guitar and a live-action crowd that will react to the performance based on the player’s score. The game will also sport a first-person view accompanied by a live-action band on stage who will also turn and address the player, giving a feel of a real performance versus the 3rd person animated view of previous versions.

Let’s Get Digital

The ESA has revealed that retail game sales in the US are declining and digital game sales have risen 23% since 2010. According to GamesIndustry International, PC still rules the market with 62% of digital sales followed by consoles, smartphones, other wireless devices, and dedicated handhelds like the Nintendo 3DS. They also report that over 155 million Americans play games with 80% of households owning a device to play games.

It was a sad week for the Australian games industry

Australia’s last major AAA studio, 2K Australia, developer of Borderlands: The Pre-Sequel, has closed its doors and terminated all of its employees. Kotaku Australia reports that an attempt to move the Canberra-based studio to Melbourne in order to attract new talent led many high-level members to leave the company, which, Kotaku speculates, may have been a factor in the closure.

Asia has the key to the next level

Warner Bros. Interactive’s Senior Vice President of Digital Games, Greg Ballard, told GamesIndustry International about the importance of Asia and every company’s need to enter that space in order to stay competitive. He cites major Asian companies like Tencent and Nexon running major operations in the US and credits Riot Games’ success, in part, to Tencent helping League of Legends become successful in Asia. App Annie’s report showing China overtaking the US in iOS app downloads backs Mr. Ballard’s claims.

Digital games go anti-social?

Research firm, Superdata, revealed US digital game sales rose 2% to $1.01 billion in March, but social games fell 10%. GamesIndustry International reports that the firm is seeing overall interest in social games waning with more focus being put on tablets and smartphones. Superdata also advised developers to focus on building a stronger presence in Japan, where mobile revenue per paying user is three times higher than in China.

That’s all for this week! Now what will you all be playing this weekend?

Banner photo from Mashable

 

Making a Case for the Smartwatch With a Look Into the Future

There’s no doubt that wearable technology has gained widespread acceptance among fitness and health enthusiasts. The simple bracelets track our movement and encourage us to live a more fit lifestyle, a goal most of us aspire to but struggle with when it comes to ongoing engagement. Companies like Nike and Fitbit are making major headway into this category, while other technology giants jump in to tackle the next evolution of wearable tech with the smartwatch.

Yet, skepticism remains about the viability of such devices and their impact on our lives. Is it a necessity? What form will it take before gaining mainstream acceptance? When will form meet function and design before we’re all genuinely excited about it?

I believe that there’s a massive opportunity with wearables, particularly the smartwatch, as devices that will become just as ubiquitous as the smartphone, if not outright replacements. Let’s take a look at some of the players and trends pointing the way.

Apple
I recognize it’s strange to lead off with a company that has yet to reveal a smartwatch. Yet, the rumor mill continues to swirl about the company’s plan. The most interesting rumors involve a secret army of engineers working on a “special project” (the TV could be another), and motion sensor “system on chip” manufacturer Invensense tripling its company size to accommodate orders from Apple.

We should also recognize that Apple does a fantastic job of incorporating accessibility and assistive technology into its devices, many features of which will overlap with an advanced UI necessary for tackling problems with smartwatch usability.

The market is also still ripe for innovation when it comes to both form and function. Nailing the look and usability of such a technology is no easy feat, but that’s a challenge that Apple has repeatedly shown to excel at with the personal computer, MP3 player, smartphone, tablet, etc.

Here are a few interesting concepts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additionally, Tim Cook sits on the board of Nike and can often be seen wearing a Nike+ FuelBand. He’s a strong and vocal proponent of the FuelBand. You can count Cook among those who believe in the future of wearables, with Nike as the perfect testing ground for his own company’s aspirations and fueling speculation of Apple’s plans in this category even further.

Google
Probably one of the more exciting news in wearable technology of late is Google’s announcement of the Android Wear OS.

Not only are the initial Motorola 360 and other designs revealed with the announcement a great step in the right direction to making an attractive product, but the attention to solving UI challenges should add fuel to the race. With Android continuing to build momentum in the smartphone and tablet space, Wear is a testament to Google’s commitment in the smartwatch category and an important sign that this isn’t going away.

And in case you’re wondering, no, I don’t believe in the future viability of Google Glass, primarily because of its intrusive nature that will never gain social acceptance.

Samsung, Pebble, and others

Pebble is the most notable company to enter this space with a splash, setting the tone for how smartwatch design married with tech can get tech enthusiasts excited. Its move to deploy an SDK and a discovery portal (an Android app containing a library of compatible Pebble apps) is a smart one, which should accelerate developer adoption of the platform as it continues to expand its install base.

Samsung is another major player taking this space seriously, coming out with its own Galaxy Smartwatch line. Most recently, the company revealed a whole slew of new designs at Mobile World Congress in Barcelona, the Gear Fit receiving the most recognition of the bunch due to its curved screen and attractive look. While Samsung continues to contribute great effort to this space, it’s still not quite enough to solidify the smartwatch as a must-have gadget.

So what’s needed to cross the chasm from tech enthusiasts to mainstream acceptance? What can we expect?

We need to completely change the notion of a smartwatch as an accessory to the smartphone, but a piece of technology that is convenient to use and solves common problems in our everyday lives. We once thought that feature phones were an amazing piece of technology that couldn’t possibly get any better, until color screens with web browsing capabilities, improved data bandwidth, and eventually the iPhone came along to change our perception of cellular phones and becoming a necessity, not a “want.”

I’m personally not satisfied with having to carry an $800 electronic brick in my pocket, and I imagine my 3 year old daughter growing up and wondering in disbelief that we’d use it as the central communications tool. Let’s look at three key areas that have yet to truly materialize — areas of focus that will drive the future of smartwatch adoption and utility.

  • Design: Let’s face it; it needs to look good. A curved and/or flexible screen will help makers achieve the perfect balance of form, function, and style, which is no easy feat. While not quite “wearables”, we’re seeing this marriage of technology and design take form in making old and ubiquitous tools “smarter”. Only Nest could really nail it with the thermostat to result in a $3.2 billion acquisition by Google. The Livescribe 3 smartpen (a TriplePoint client) achieves a slimmer form factor and mirrors the style of luxury ink pens, making it a best-selling product for the company. Technology can no longer just work, it also has to look beautiful for today’s consumer.
  • Technology: The Android Wear OS will hopefully optimize power consumption, a big challenge facing smartwatches available on the market today. Meanwhile, battery technology continues to advance, and will one day give us a device that can run on a single charge for days. Additionally, improved voice recognition will be necessary to allow for hands-free control of the device strapped to our wrist, something that both Google and Apple continue to work on. Finally, other features are sure to improve the overall utility of a smartwatch, such as the ability to project the screen onto a tabletop or wall for larger visibility, such as maps and websites.
  • Cellular chip: All of these things will lead to the integration of a cellular chip directly into the smartwatch, which will be the ultimate driver of adoption, as long as all other challenges are addressed first. The need for us to continue using a smartphone as the gateway to voice and data connectivity is a problem and the reason why I’ve yet to buy a smartwatch. To become truly functional, it needs to operate independently. Surely we’ll continue to use smartphones or tablets for expanded applications that require a larger screen, but they will become the accessory that displays data transmitted via the smartwatch over direct WiFi, not acting as the cellular gateway itself.

Many events and meetups are sprouting up around the world to discuss topics in wearable technology, which speaks to the real momentum behind the technological movement. I believe it’s going to be just as big, if not more important than, the advent of smartphones and impact our lives in nearly every way imaginable, from fitness to health and just everyday utility.

One such event is being put on by ReadWrite, coming up in San Francisco on April 9th – ReadWriteMix: Grappling With the Future of Wearable Technology with Pebble’s Eric Migicovsky.

View more information about the event and RSVP for free here: https://www.eventbrite.com/e/readwritemix-grappling-with-the-future-of-wearable-technology-with-pebbles-eric-migicovsky-tickets-10981442791

It’s sure to provide more insight on this hot topic, and I’m looking forward to participating in the discussion. Look out for me there, or reach out in advance to make sure we connect!

Smartphone Game Controllers – More of a Game Changer Than You Think

Ask any game developer on iOS and Android today about the challenges they face in succeeding (i.e. turning a profit, making a sustainable living), and chances are there will be expressions of frustration and negativity. Save for companies that have already established themselves in the mobile marketplace and can afford to build and sustain a customer base, an overwhelming majority will never see a penny of profit.

At the same time, the mobile game market is at a crossroads. On one hand, you have casual experiences being churned out that can be monetized through growth hacking, a.k.a. the ability to target, but and convert players into paying customers. On the other hand, unique game experiences with deep and engaging levels of gameplay that can appeal to true “gamers” are finding it incredibly challenging to succeed, experiences that might command an upfront payment for a quality experience, one that such gamers are willing to pay.

Yet, the touchscreen experience doesn’t match the deep level of gameplay that sufficiently satisfies the needs of the average gamer. A few hours of playing a serious shooter, and you’re left with finger burn and a crooked wrist. This is why I adamantly support Nintendo’s strategy to continue building out their own platform with dedicated portable consoles, but that’s best left said in another blog post that I previously wrote.

While these challenges will persist in the near future, there is a bright spot in the mobile industry, steadily growing to help push development of high quality, deep gaming experiences that consumers might be willing to pay for – Bluetooth game controllers. Yes, multiple companies exist that provide such solutions, such as Green Throttle, Nyko, MOGA and others, but the tipping point will come with native integration of controller support by Apple and Google.

We already know about Apple’s controller API released with iOS 7, one that any developer can integrate into their game to support any wireless Bluetooth game controller. Google can’t be far behind, and we can be confident that we’ll see the support in the next year, at the most.

Free-to-play games rule the roost, and likely will for some time to come, if not permanently. This has allowed companies with the most capital to execute “growth hacking” techniques weighed heavily on user acquisition to build and sustain a player base. This has unfortunately led to an incredibly difficult marketplace for less capable developers to navigate and get discovered, especially the indie tier where the best ideas are generated and the least analytical capabilities lie. And we certainly can’t count on a quality game to succeed based on a one-time payment model. Free-to-play becomes even more challenging for the serious gamers, an incredibly difficult balance to manage in avoidance of pay-to-win perceptions.

As for “quality” games following the paid download model, $1.99 is unfortunately the maximum a majority of smartphone gamers will pay, with $9.99 and $19.99 being special price points for console ports – generally not optimal experiences built from the ground up for the touchscreen.

With universal game controller support built into iOS and Android, we can count on gamers playing for longer periods of time. With such higher engagements, developers can build deeper experiences with flexible game mechanics and backstories that have gamers investing tens of hours of time. Such game experiences are why 35 million gamers around the globe own a 3DS, and games that sell for $40 each sell in the millions within several days of release. These are the games, like Grand Theft Auto V and Call of Duty, that smash entertainment sales records, surpassing movies and music. Many of these games just wouldn’t work on a free-to-play model.

We’ve witnessed a variety of companies enter the market to disrupt the console business, most of which have been categorized as “microconsoles”, dedicated set-top box hardware usually build on top of Linux/Android. Yet, I can’t help but think that the last thing developers need to worry about right now is another platform, particularly one with little install base to justify the additional resource investment.

Why the need for a microconsole, when we all already own one, sitting right in our pocket? The smartphone and tablet, both iOS and Android, will quickly displace the need for dedicated microconsoles that offer the same value. Connectivity to the TV an issue? Tap and stream, enabled by Apple TV and, soon, the likes of Chromecast, will eliminate this hurdle for mainstream consumers. Don’t worry about the gamers – they’re savvy enough to make it happen now, as long as they have a reason to.

 

To summarize why I’m optimistic about the smartphone and tablet gaming space for the future of gaming:

1.) Native integration of controllers accelerating developer adoption into games.

2.) Games built from the ground up with controller support can lean on deeper experiences that please core gamers.

3.) High quality game experiences that can be played for hours (and avoid finger burn) can command premium price points and not rely on free-to-play access and conversion.

4.) Smartphone and tablets significantly increasing in power and capabilities can offer an experience that pleases the core gamer.

5.) One-tap streaming from smartphones/tablets to TV will all but eliminate the need for dedicated consoles tethered to the TV.

6.) More freedom and flexibility for gamers – one game file and experience no matter where you are, whether played on the road or on your living room TV.

 

I truly believe that there’s still a bright future ahead for experiences that gamers can enjoy and would be willing to pay a premium price point for on mobile devices. The hurdles that face development and adoption of such titles is a technology challenge already being solved in the form of native controller support and mobile-to-TV streaming. This is an exciting opportunity for developers to harness and create rich game experiences that meets the behaviors and consumption habits of gamers both casual and core. For all the gamers out there, we get to enjoy great games using the hardware that we own coupled with an affordable controller, anytime, anywhere.

Think Again: Mobile Will Not Kill Console Games

For the past two years, media, publishers and players have been talking about the shift in the gaming industry from console to mobile. Console revenues are starkly declining as mobile revenues and players inversely increase. I think they are missing the point.

Sure, mobile is shaping up to be a goliath $9 billion industry and is broadening what it means to be a gamer. My mom doesn’t shoot down zombies in The Last of Us, but she is definitely addicted to solitaire on her phone, and now she is a gamer — along with 125.9 million people (39.8% of the population) in the US alone.

These mobile gamers are also getting more sophisticated. They require stories, characters, high-def graphics, polished art, balanced monetization tactics, and games-as-a-service upkeep to maintain their attention and spending.

I’m not saying this will slow down, but the idea that mobile games will cannibalize console game spending is an oversimplification. One market does not directly influence the other.

The reality is that mobile and console games offer different experiences, not mutually exclusive ones, and people will pay for both in different contexts. Gamers that want immersive, deep play sessions are not abandoning consoles all together and filling the void with Angry Birds, they are just waiting.

You know what they are waiting for — the much anticipated, much criticized next generation of consoles and games which have shaped up in the PS4 and XBox One. (Sorry, Wii U, you under-delivered.)

Unlike console games, people play mobile games for a short distraction while they are bored, waiting, or have nothing else to do. Short and sporadic sessions characterize their play. If a game is particularly compelling, maybe a player will shell out a few bucks for an extra crack at that Candy Crush level or another chance to sprint past the leaderboard in Temple Run.

A few minutes of a mobile game here or there does not replace what game lovers prefer: plopping down on the couch after school or work, and diving into two hours of Bioshock Infinite or their game of choice. The “hardcore gamers” aren’t sick of gaming, they just don’t want to buy games for consoles that are seven years old when new software and hardware will arrive with Santa in a few short months. And, though a few of these guys and gals play games on their phones, a lot of them don’t do so regularly, as mobile gaming caters to a broader (though also lucrative) market.

Right now, it’s too early to tell from pre-orders what the reception will be for the next-gen and if mobile will kill the console industry. It’s important to note that, PC gaming – a more synonymous experience – is better positioned to do so. We’ll also have to wait a bit longer for the first price-drop and the second round of software, since many a gamer evaluates these developments before paying up for new platforms.

Until then, I say halt your judgments on whether or not mobile will truly eat up the console industry. I suspect the bite will not live up to its hype.

Header image courtesy of GameGavel.com

New Marketing for the Socially Digital Age – TiE CON East 2013

Can a room full of experienced VC’s learn some new tricks about digital marketing, from the perspective of video game PR? That was my hope today as I represented TriplePoint during the 7th annual TiE CON in Boston.

It’s a conference that brings together both established and startup entrepreneurs in Technology, Life Sciences, Education, and Cleantech. I lead a boot camp with help from two other marketers, on the topic of New Marketing for the Socially Digital Age. The panel touched upon everything from Facebook and YouTube to email blasts, lead-generation, and timing for advertising campaigns.

Continue reading New Marketing for the Socially Digital Age – TiE CON East 2013

Nintendo’s Battle for a Dedicated Gaming Platform: Throw In the Towel for Mobile?

Nintendo has been facing an incredible amount of pressure from existing and new entrants to the gaming space that has led to a decline of its market share. With only so much time in one day to consume media, consumers have a choice between “core” gaming, by way of consoles and PCs, and a more casual experience via browser and on mobile devices; Nintendo has found itself at the service of neither audience.

With the impending launch of Wii U, the company has taken a public stance in support of the core gamer, but is faced with overcoming the challenge of offering a superior online experience to the established leader in the space, Microsoft and its Xbox 360. Its track record with Wii Shop leaves many of us doubtful that it can rebound in this sense. Meanwhile, the mainstream audience that helped propel Nintendo to success in the last decade with the Wii is being abandoned in favor of more costly hardware and complicated controls of the Wii U.

Clearly, Nintendo’s platform is at risk of failure, and investors and Mario fans alike are clamoring for a shift in strategy. Most notable among the call for action lies with the leader and renowned innovator in software and hardware – Apple.  Prior to iOS, we had terrible interfaces that were counterintuitive to driving engagement of content and considered a 5% market penetration of games as a success. Since the debut of iOS and the App Store, we’ve seen the market expand to over 600,000 applications and indie developers rising to fame, claiming thousands in revenue, and in some cases millions. Google Play trails closely behind with over 500,000 applications available, although the platform faces piracy issues that leave it second to iOS in terms of developer support.

The new market opportunity is in mobile gaming, as Apple and Google continue to seed global audiences with smartphone devices that spur user engagement with various forms of content, most notably games. Should Nintendo bow to market pressures and take Mario, Zelda and Metroid to mobile devices? Certainly not now, without sacrificing its entire platform and affecting its remaining grip on the game enthusiast market. Let’s analyze the implications of what can be seen as a rash decision in several ways.

Shifts in Revenue

Nintendo’s revenues have taken a hard hit as a result of our shift to mobile platforms. Wii owners are largely content with Wii Sports, and those mainstream consumers have hardly converted into purchasers of additional software, resulting in decreased developer support. The 3DS launched to a cold welcome, but has since slashed prices and achieved moderate success among a stagnant core gaming audience.

The company recorded its first operating loss of $460 million for fiscal year ending March 31st, much of which can be attributed to the struggling Wii console, DS and 3DS, all falling short of sales expectations and incorporating price cuts in response to increased competitive pressures. We can also assume that much of the capital was allocated to continued support for game developers on each platform and R&D towards Wii U.

Meanwhile, Rovio released its 2011 earnings statement, highlighting $67.6 million in profit on $106.3 million in revenues that can be largely attributed to its Angry Birds property, 30% of which came from merchandising and licensing. Based on these numbers, we can estimate that around $70 million was generated by downloads of Angry Birds. Impressive numbers indeed and deserving of praise for the company’s immense success across the various platforms on which Angry Birds can be found.

Yet, Angry Birds is at the top of the food chain, and few (if any) can come close to matching the success that Angry Birds has seen. And in comparison to Nintendo’s current business, it fails to match the numbers of its own game platform business.

For fiscal year beginning April 1, 2012, Nintendo is expected to achieve $500 million in operating profit according to a forecast estimate compiled through a survey of 20 analysts by Thomson Reuters I/B/E/S. The company controls its own fully integrated platform specifically tailored to gaming, similar to Apple’s hardware/software strategy that spans personal computers and mobile devices, not to mention the impending launch of the rumored iTV. Nintendo sells the hardware and controls the pipeline of software making its way to consumers, consisting of its own popular IP and an ecosystem of developers from which it generates additional revenues with every game purchase.

Let’s take a look at another example, one that would be on the lower end of Nintendo’s sales figures on a platform that is largely characterized as “struggling” – Mario Kart 7 on the 3DS. The title has so far achieved global sales of nearly 5.5 million units, running at $39.99 a pop. That’s nearly $220 million in revenues, over double Rovio’s business. Now, the margin on packaged goods isn’t really as significant, but even if we’re looking at a 20% profit margin, we’re talking about approximately $44 million in profit from a single title that has been on the market for only 6 months and on hardware that isn’t even considered a mainstream success. Looking forward, it’s not a stretch for Nintendo’s hardware to go strictly digital as industry trends indicate and eliminating the packaged goods channel, increasing margins and generating even greater profits (considering a premium price point maintained through “deeper” gaming experiences of Nintendo hardware). Also, this is just for one title – consider all the other games moving through the 3DS, controlled 100% by Nintendo and generating even greater revenues from both 1st and 3rd party games.

For Nintendo to trash its own closed gaming platform for Apple’s in pursuit of revenues that have not publicly achieved the scale that Nintendo currently maintains just doesn’t add up. It’s also understandable that Nintendo derides the thought of having to pay Apple the 30% cut, which would make it an even greater challenge to achieve success on the scale of its current games business. A counter argument to this is that Nintendo can offer games on each platform, which doesn’t come without merit, but let’s take a look at this audience.

Can Mario Wear Different Hats?

For Nintendo to reach the scale of success on Apple’s platform that it currently achieves within the confines of its own closed platform, let’s assume two scenarios: 1) that the game experience is rich enough to sell on the level of Angry Birds (that’s 1 billion downloads!), or 2) that Nintendo sells at a premium with less market penetration. Both situations would have to involve the creation of new games based on its popular IP, rather than a direct port of old games which would only have a minimal impact on Nintendo’s bottom line, not to mention potential disappointment in the controls for some of our most favorite classics that were built for console controls.

The first scenario would be largely targeted at the expanded mainstream audience, one that Nintendo did a great job of penetrating with the Wii and DS. Yet, we have to ask ourselves if the casual gamer of an older demographic and one that skews female would be willing to purchase a Nintendo device if Mario could be had on an iPhone, iPod touch or iPad. Facing limited time in one’s day, chances are that this gamer would skip the purchase of a game-dedicated device and invest $0.99 on a more casual Mario experience. Asking my wife and her 21 year old sister if they’d purchase a new Mario for Wii if they had Super Mario World on their mobile device, they both confidently answered “no way, the app would be good enough”. This would affect the purchasing decision of millions of consumers and cannibalize Nintendo’s gaming platform at a much more significant loss than what it can possibly recover in $0.99 downloads. This isn’t a risk that Nintendo can afford to make, at least not right now.

The second scenario involves a very challenging balancing act of pricing games at a premium, say $9.99, and selling through enough downloads to generate a return on development costs. This would carry an even greater risk of cannibalizing Nintendo’s own platform as these premium games would also come with a deeper and richer gaming experience that could potentially directly compete with Wii U, DS and 3DS game quality. If I have a great Mario title on my mobile devices at $9.99, chances are that I’ll skip the dedicated hardware and $50 price tag for the game.

Additionally, either decision would send a very negative signal to the remaining developers who still believe in Nintendo’s gaming platform, causing additional speculation about those consoles’ impending demise, an even further loss of support in game development, and all but hammering the final nail in the coffin of Nintendo’s platform.

Finally, do we really want an innovator in the gaming space to drop what it does to hop on the iOS bandwagon and solely rely on a touchscreen interface? Is the future of gaming really only about the touchscreen, perhaps with gesture and voice recognition integrated within? Imagine where gaming would be now if Nintendo bowed down to economic pressures back when the GameCube was being labeled as a failure and the Wii and DS never happened. All those Wine, Cheese and Wii parties would have never happened, and one could fairly assume that the Kinect and Move gaming experiences may not have been inspired into market release, perhaps confined to TV integration and never having impacted the games we play.

“Tiiiime Is On My Side, Yes It Is”

Mick Jagger’s voice resonates in my head as I read that Nintendo is sitting on a pile of cash amounting to $14 billion. Not only is Nintendo expected to turn a profit for fiscal year 2012/13, but it has a war chest to conceive and define the “next generation of gaming” through a fully integrated hardware and software platform, one that’s made exclusively for gamers and consumers seeking a good time. Even though the new Wii U doesn’t spur much hope with industry analysts and other market players, such efforts would be completely lost if confined solely to the hardware and interface design choices of Apple, a company whose business is far greater than the games sector to justify a focus on giving us new ways to experience video games.

But how much time does Nintendo really have to make a decision? Even with $14 billion to cover years of operating costs, Nintendo can’t afford to sit around forever. A fair guess at the amount of time that Nintendo has to evaluate the marketplace and give a shot at maintaining a unique gaming experience lies perhaps in the 5-10 year range. Most everyone will understandably argue that this is too much time, but Mario, Zelda and Metroid aren’t going anywhere, and if Nintendo’s own platform faces a demise there will always be an audience ready to pounce on these titles when made available on iOS, Android or any other platform outside the company’s own walls.

Atari, who is celebrating its 40th anniversary this year, has hit a milestone of 10 million downloads just a year after releasing a number of classic and new games based on its renowned IP. Even decades after spending my hard earned weekly allowance in the arcades on Missile Command, Asteroids and Super Breakout, I can count myself among the millions that are downloading these games on iOS and Android (disclaimer: Atari is a TriplePoint client). You can bet that team Mario will have a lasting impact on consumers and maintain brand recognition that results in downloads 5-10 years down the road.

Losing Share to Angry Birds

Kids everywhere are wearing Angry Birds shirts and socks, while plushies continue to fill the rooms of children around the world. The ~$30 million merchandising/licensing business around this IP is a strong indicator that the property is capturing the mindshare of consumers, certainly at a loss for Mario. This perhaps is the greatest challenge facing Nintendo the longer it waits to nail down and execute a strategy for distribution on iOS and Android. Yet, the company has a history of bringing fans of its various 1st party IP a reason to buy back into the franchises, and the continued power of those brands will no doubt ensure that it continues to sell hardware and games, and that the expanded audiences take notice as well, even if these casual audiences may no longer be willing to purchase a Nintendo gaming device.

When all is said and done, nothing can sway Nintendo from sitting on its bankroll to continue attempts at innovating gaming fun as we know it, not as long as the market opportunities in mobile fall short of the rewards of maintaining its own closed gaming platform. A company that has over 120 years of history shouldn’t be swayed so easily by market pressures to ditch its game-focused platform for a new market that has been hot during the past 4 years (App Store launched in 2008). A survivor of the turbulent gaming market in the 90s and one that has stood up to Microsoft and Sony, we should be cheering on Nintendo to come up with a fresh gaming experience that takes us beyond a simple touchscreen interface dominated by a company that (understandably) deprioritizes gaming among all forms of digital media. Mario and team may one day land on our mobile devices, but considerations for its existing business should be taken into account, and we’ll always be ready to download Nintendo’s games years down the road.

 

Steve Jobs vs. Ezio Auditore: On Leaving Behind What You Started

 

 

 

 

 

I think it is fair to say one of the biggest fears we all share is that we will be unable to finish what we started; that we will die before our dreams can ever come true. I know that fear is always at the back of my mind. When it was announced that Steve Jobs, age 56, passed away last year, I couldn’t help but wonder: in his final moments, was he satisfied with the state of Apple or at least satisfied with Apple’s current path of development as a company? Did he feel like he completed what he set out to do?

Those same thoughts rushed back in my head when I finished Assassin’s Creed: Revelations. For those not familiar with the series, one of the main protagonists, Ezio Auditore da Firenze, joins the Assassin brotherhood and leads it in the fight against the Templars and, of course, avenges the death of his father and brothers who were killed at the hands of the Templars. In Revelations, the last game in the series to feature him, Ezio Auditore, age 52, [SPOILER] moves on with his life and announces that he has done everything he could to leave his legacy:

“I have lived my life as best I could, not knowing its purpose but drawn forward like a moth to a distant moon.

“And here at last I discover a strange truth, that I am only a conduit for a message that eludes my understanding.

“Who are we? We have been so blessed to share our stories like this, to speak across centuries. Maybe you will answer all the questions I have asked. Maybe you will be the one who will make all this suffering worth something in the end.”

(Watch the speech.) [/SPOILER]

I always had immense respect for people who saw through everything they started through to the end, like people who start their own company and run it until the day they die, and friends of mine who started student groups in college and put all the sweat and blood they could into them until they graduated. But when I put Assassin’s Creed: Revelations down for the last time, I realized I have even more respect for people who can accept that seeing something through to the end is not possible, that our biggest fear—being unable to finish what one started—has indeed come true, and the only way around it is to gather all the strength within us to simply move on.

By their 50s, both Steve Jobs and Ezio Auditore da Firenze have left a legacy, one in technology and the other in the survival of freedom. Both gained some degree of a negative reputation by using questionable means towards their goal, one in his apparent treatment of colleagues and the other in the death of many. And both were only conduits for a message—a dream—that might not have been realized in their lifetime.

I believe that we can only take solace in one fact: when one has a dream so large in scope, perhaps there is no way for one individual to reach such a pinnacle, if it exists at all, in their lifetime. Perhaps the only dream or pinnacle one can hope to reach in a lifetime is the lifelong pursuit of it. If we each are already pursuing a dream then perhaps there is nothing left to be afraid of.