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Photo: Sony

Sony is ready to admit that mobile gaming is too big to ignore

Protocol Entertainment

Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Tuesday, we’re taking a look at Sony’s acquisition of Savage Game Studios and its mobile gaming ambitions, the departure of Meta’s Horizon Worlds VP and the Electronic Arts acquisition that never was.

Sony stops ignoring the smartphone

Sony has finally decided to get serious about gaming on smartphones. Like so many of its publishing peers in the game industry over the last few years, the company signaled its intentions with an acquisition. On Monday, Savage Game Studios became the first member of the new PlayStation Studios Mobile Division , an entity Sony created to expand its console games to smaller screens — and hopefully grow its audience as a result.

Sony was in desperate need of a mobile play. Many of Sony’s biggest competitors have been investing in mobile for years, while others have purchased their way to a stronger position through major acquisitions.

  • Microsoft’s landmark acquisition of Activision Blizzard, which looks more and more likely to pass , comes with Candy Crush maker King, one of the publisher’s most lucrative businesses.
  • For Microsoft, King (as well as Activision and Tencent’s Call of Duty Mobile) provides an advantageous avenue to mobile growth alongside Minecraft developer Mojang and its cloud gaming initiative.
  • Electronic Arts has been aggressively expanding on mobile in recent years, thanks largely to its mobile chief Jeff Karp . The company has spent billions acquiring Golf Clash developer Playdemic and prolific publisher Glu Mobile, released a mobile port of Apex Legends and is now working on launching a mobile Battlefield and new "Lord of the Rings" game.
  • Take-Two Interactive purchased Zynga for $12.7 billion back in January with the intention of using the FarmVille developer to help it expand franchises like Grand Theft Auto on mobile.
  • Nintendo began developing mobile versions of its iconic gaming properties starting in 2016. Though it hasn’t developed many games for mobile, it scored a massive hit through its partnership with Niantic for Pokémon Go, and the microtransaction-heavy Fire Emblem Heroes crossed the $1 billion revenue mark in July.

PlayStation’s brand is nonexistent on mobile. But that means Sony is working with a blank slate and has wide latitude to decide how it wants to pursue smartphone audiences.

  • Earlier this year, Sony said it wanted to take its existing console IP and bring it to mobile screens. By 2025, the company wants roughly half of all the games it releases to be on PC and mobile platforms, and expects 12 of those games to be active live service titles.
  • “By expanding to PC and mobile, and it must be said … also to live services, we have the opportunity to move from a situation of being present in a very narrow segment of the overall gaming software market, to being present pretty much everywhere,” PlayStation chief Jim Ryan said during an investor presentation in May.
  • Savage Game Studios hasn’t released a game yet, which makes it more likely Sony will put the team to work adapting a core property for mobile audiences. So far, all we know is that the team is working on an “unannounced new AAA mobile live service action game.”
  • Michail Katkoff, CEO and co-founder of Savage Game Studios, cited the opportunity “to potentially tap into PlayStation’s amazing catalog of IP” as one of the reasons the company felt comfortable joining Sony.

Mobile is far too big to ignore. Much of Sony’s recent investments in live service and multiplatform gaming, including its acquisition of Destiny developer Bungie for $3.6 billion, are about pursuing the gaming business models mobile helped establish.

  • A vast majority of the top mobile games monetize through microtransactions and generate eye-popping revenues over the course of many years, making them among the most lucrative products in the industry.
  • Newzoo estimated in July that mobile, the largest sector of the game industry by global revenue, would generate $103.5 billion this year, nearly double the console business.
  • Sensor Tower reported late last year that a record eight mobile games surpassed $1 billion in player spending in 2021 alone. Krafton’s PUBG Mobile and Tencent’s Honor of Kings both generated $2.8 billion, while in third place was miHoYo’s Genshin Impact with $1.8 billion.

Just as Sony recognizes the need for its products to jump from PlayStation to theater screens and television sets, it now needs to tap into the mobile market if it wants to expand its audience beyond the core group of console gamers. “PlayStation Studios must continue to expand and diversify our offering beyond console, bringing incredible new games to more people than ever before,” PlayStation Studios head Hermen Hulst said in yesterday’s announcement.

— Nick Statt

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Making moves

Horizon Worlds chief is leaving Meta. Vivek Sharma, a Meta executive who ran the company's Facebook Gaming division and last year took charge of its social VR platform Horizon Worlds, is leaving the company, Reuters reported on Friday . It’s not clear where Sharma is headed next, but Reuters says he told the publication it was an “new opportunity.” The exec’s team will now report to Meta’s metaverse VP Vishal Shah.

Twitter’s creator ambassador departs for Epic. Stacy Minero, an eight-year veteran of Twitter who oversaw the company’s ArtHouse marketing team, is joining the Fortnite creator to lead marketing for its creator marketplaces. Epic now owns a number of artist and creator tools, including Sketchfab and Quixel, and Minero says her job will involve empowering “the next generation of 3D creators and [helping] them thrive in the metaverse economy.”

In other news

Nintendo joins Microsoft in keeping its console prices. Nintendo on Friday released a statement saying it would not be raising the price of the Switch in response to Sony’s PS5 price hike. Microsoft said earlier in the week it would be keeping Xbox prices the same, too.

Resident Evil’s TV adaptation is short lived. Netflix has canceled its live-action Resident Evil show after one season, Deadline reported last week . The series didn’t garner strong reviews, and viewership on the platform was lackluster, the report said.

Embracer completes its Square Enix deal. The Swedish gaming giant’s acquisition of Square Enix’s Western studios, including Tomb Raider maker Crystal Dynamics and Deus Ex developer Eidos-Montréal, closed on Friday .

Netflix wants to charge $7 to $9 for its ad-supported plan, according to Bloomberg . That’s very similar to Disney+, which will charge subscribers $7.99 when its ad-supported plan goes live later this year.

Apple’s headset may be called “Reality One.” New trademark filings from a likely Apple-affiliated shell company suggest Apple is all in on “reality” as the brand for its upcoming AR/VR products.

China’s gaming crackdown is working. A new report from Niko Partners said 77% of Chinese youth spent fewer hours gaming after the government instituted time restrictions last year mandating that minors can only play video games one hour per day from Friday to Sunday.

Microsoft may expand its Game Pass family plan to friends, too. Microsoft began testing a new family plan for Xbox Game Pass earlier this year. Now, new branding for the service that leaked over the weekend suggests there may be a “Friends & Family” option as well.

NBC could be giving up on late-night television. With eyeballs moving to streaming, NBC is considering a shorter prime time window .

The curious case of the Amazon and Electronic Arts deal

Last Friday was a busier gaming news day than most this summer after USA Today broke the story that Amazon would be putting in an offer to acquire FIFA developer Electronic Arts. Within hours, the news had fallen to pieces; EA’s stock (up more than 6% on the news) began to fall; and many were left scratching their heads. So what happened?

  • The story came from a content partner network known as Good Luck Have Fun, which produces gaming articles on behalf of publishers that don’t have the staff or resources to produce them on their own.
  • For USA Today, this arrangement backfired, as GLHF’s sources did not appear to have provided sound info. The original story did not contain comments from Amazon or EA, either.
  • CNBC reported within a few hours of the story’s publication that no deal was on the table after all.

Even stranger: USA Today began stealth editing the piece , without the writer’s apparent preapproval or input.

  • The edits at first downplayed the reliance on anonymous sources by removing the story’s only form of attribution.
  • Another edit added a damning editor’s note at the top that said the story “violated our editorial standards regarding the use of unnamed and unvetted sources.”
  • But most of the damage had already been done as gaming news aggregators and dozens of other websites began blasting the story around Twitter.

It’s a good reminder for journalists and readers alike to double-check sources and to vet bombshell news as thoroughly as possible, especially when a company’s stock price is on the line.

— Nick Statt

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