November 15, 2022
Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Tuesday, we’re discussing the early success of Sony’s God of War Ragnarök amid a year of decline for the video game industry. Also: How Twitter turmoil and the FTX implosion are affecting the games industry and a major new update for Epic’s Unreal Engine 5.
The game market has had a rough 2022: A surprising mobile slump, lower consumer spending, continued hardware supply constraints, and game delays littering the release calendar with unfilled absences.
But what is proving to be a resounding success for Sony — and proof of the resilience of the PlayStation maker’s console-first business model — is the new God of War Ragnarök. Released last week to rave reviews and a powerful first week of sales, Ragnarök is helping buoy a struggling console market and underscores Sony’s shrewd and exacting strategy for maximizing the value of its first-party studios.
The new God of War is fantastic. I’ve played only the first handful of hours of Ragnarök’s sprawling story, but it is an improvement in virtually every way over its 2018 predecessor while still maintaining a familiar approach. The original game has sold more than 23 million copies.
Ragnarök arrived at a particularly troubling time for the industry. Starting this summer, analysts and market research firms began warning of a game industry downturn. By the end of the second quarter, it became clear the market was in decline after two years of explosive pandemic-fueled growth.
Single-player gaming is alive and well — for Sony, at least. The game industry continues to shift investments and priorities toward mobile, live service, and free-to-play gaming. But Ragnarök, as well as February’s smash hit Elden Ring, are offering a refreshing counterbalance to that line of thinking.
Ragnarök may end up on PC in a couple of years, and perhaps even on Sony’s subscription service some time after that. But for now, the game is best enjoyed — and only enjoyed — on PlayStation for $60 to $70. So far, it seems likely many millions of players are still just fine with that arrangement.
— Nick Statt
While tech can be a transformational tool for change, there must be a balance to ensure we are not only depending on multilateral institutions to implement policy and standards, as authoritative regimes can easily dismiss those initiatives. Instead, we must have a holistic diplomatic approach that ensures tech diplomacy and collaboration can be spread through various platforms.
“The Commission is working to ensure that you will still be able to play Call of Duty on other consoles (including my Playstation). Also on our to do list: update stock pictures. These gamers have wired controllers whereas Xbox and Playstation have wireless ones since about 2006!” — Ricardo Cardoso, a member of the EU Commission overseeing the Activision deal, tweeted a curious comment last week implying he owned a PlayStation console and attached an outdated stock photo. He later clarified he is “not involved in the assessment.”“The interactive entertainment business is very different than the linear entertainment business … So I, at least, pose the question as to whether subscription makes as much sense for interactive entertainment as it does for linear entertainment and registered some skepticism, which I still hold." — Take-Two Interactive CEO Strauss Zelnick said on an earnings call last week he was still unsure about the business model behind Xbox Game Pass and whether it made sense for the game industry.
Twitter cuts hit the game marketing team. As part of Elon Musk’s Twitter layoffs last month, the entire five-person Twitter Gaming marketing staff responsible for helping promote the industry was let go, The Washington Post reported.
Studio Ghibli and Disney partner for a mystery project. The legendary anime studio and Disney are working together, though both are cryptic about the details. A likely outcome: a new season of anime anthology series “Star Wars: Visions.”
Meta is killing its Portal smart display for good. After previously opting to shift Portal sales to business customers, the company is now pulling the plug on the device altogether.
The Witcher 3 update will arrive just in time. CD Projekt Red announced yesterday that the next-gen upgrade for The Witcher 3: Wild Hunt will keep its 2022 deadline with a Dec. 14 launch following two delays.
A closer look at Magic Leap’s new headset. The Magic Leap 2 may well be the best AR headset yet, but it’s also out of reach and not designed for most people.
Disgraced FTX CEO was a big gamer. Sam Bankman-Fried, who pushed his imploding crypto exchange to sponsor esports teams, once played Riot’s multiplayer hit League of Legends during an investor meeting, impressing onlookers. FTX filed for bankruptcy on Friday.
Disney’s latest demo day included NFT and AR startups. Some of the companies that were part of last week’s Disney Accelerator Demo Day included Polygon, Lockerverse, and Red 6.Gaming companies become Twitter Blue targets. Before Twitter was forced to shut down signups to its Blue service, gaming brands were among the first high-profile targets of impersonators abusing the new, murkier blue check mark.
Epic Games’ Unreal Engine 5 is getting its first major update today, and with it a suite of new features and capabilities for both game development as well as film and TV production. The goal is to make the engine, once exclusively a tool of game makers, into a widespread pillar of Hollywood production and, eventually, the metaverse.
Epic is pushing Unreal across media formats. The new update, version 5.1, is designed to take advantage of “the exponential growth in adoption of Unreal Engine over the last two years by media and entertainment professionals and companies of all sizes,” the company said.
Epic’s vision goes beyond the game engine market. While the Unreal Engine is often pitted against rival Unity, the platform of choice for mobile developers, Epic has made clear its bigger-picture goal is blurring the lines between live-action and digital and making any object, character, or environment interactive.
— Nick Statt
New tech innovations like Web3, blockchain, and AI have massive potential to strengthen democracies and global economic security while decreasing the digital divide. However, these innovations come with significant risks. Political scientist Ian Bremmer underscores disruptive technology as one of three looming global crises for which we are largely unprepared.
Thoughts, questions, tips? Send them to email@example.com. Enjoy your day, see you Thursday.