This week in Protocol Gaming, your weekly guide to the business of video games: Halo studio 343 Industries is navigating the messiness of modern game monetization, Nintendo addressed the Activision Blizzard crisis and Niantic has an all-new valuation after a substantial investment.
A free-to-play experiment gone wrong
Halo Infinite hasn’t even formally launched, and yet studio 343 Industries has found itself at the center of a heated debate about how modern video games earn money and reward players for their time and attention.
Halo Infinite is straddling an unprecedented line. Because Microsoft launched the free-to-play multiplayer half of Halo Infinite earlier this month in a beta state, that gave 343 a bit of leeway to present its first pass at monetization as an experimental work in progress. And it’s in dire need of some significant changes.
- Players immediately voiced concern over cosmetics pricing and the grueling grind of the game’s first battle pass. 343 acted quickly to address the battle pass, but its first timed event launched last week and introduced even more problems, including issues with mixing and matching armor pieces and challenges that run counter to its objective-based game modes.
- Design lead Jerry Hook said on Monday: "Yes I am still playing Halo and feeling everyone’s pain on progression. We are back at it next week and this will be top of my list with the team." Later in the day, community manager John Junyszek announced yet more progression changes designed to make the game feel more rewarding.
- 343 is trying to do many things at once by pleasing fans of classic Halo games first and foremost, but then also modernizing the game’s systems to keep it competitive with Fortnite and Call of Duty while creating a path for the game to earn back its budget and become a revenue driver for Xbox Game Studios.
The debate at its heart is about Halo Infinite’s business model. Halo as most people know it is a game you bought back in the day on a disc for $60, and then perhaps you shelled out for some extra multiplayer map packs. But even the newer Halos never fully adapted to the modern, free-to-play world most shooters now operate in, making Infinite a product that’s trying to be both modern and nostalgia-inducing at the same time.
- Microsoft has made clear it’s not really interested in a big sales milestone like Sony’s first-party games or big franchises from Activision Blizzard, Take-Two or Ubisoft. It is effectively devaluing the sales of Halo Infinite by releasing it day one on Xbox Game Pass and also making its stickiest component free to play.
- Instead, Halo is supposed to make money through its battle pass and through cosmetic upgrades like character and weapon skins and other add-ons. The game will still retail for $60 if you want to play the campaign, but that campaign will be available to anyone who pays $10 for one month of Xbox Game Pass.
- To successfully monetize Halo Infinite, and not simply treat it as a loss leader to boost the Xbox brand, Microsoft and 343 need an extremely fine-tuned model that can rival Fortnite for rewarding players of all skill levels and incentivizing them to log in almost every day. What they have right now is a far cry from that.
Halo Infinite has an incredible foundation. All the pieces are there, and Microsoft’s decision to delay the game a year has proved a smart move as the fundamental components — how the game feels and plays, and its fun factor — are off the charts. What Microsoft and 343 need to do now is just tune the game’s reward mechanisms to keep them in line and competitive with modern free-to-play giants.
- The Washington Post’s Gene Park argued an excellent point that Halo Infinite’s monetization controversy underscores a generational divide in gaming between players who grew up with Halo and those born into the free-to-play, cosmetics-driven world.
- That’s an astute observation. Many modern multiplayer gamers care more about how a game rewards them and lets them express themselves than focusing on a narrow set of specific skills that will help them best opponents and win a game.
- The largest free-to-play games in the world are all successful because they reward players for their time in a way that feels fair and doesn’t punish them for, say, being bad at the game. That in turn makes players more likely to spend money, and much more than a standard $60 price tag, but only if they feel like they’re not being fleeced.
- The biggest inspiration for 343 right now should be Fortnite, which to this day remains the most savvy free-to-play operator in the industry with its well-priced cosmetics, excellent collaborations and events, and its gold standard battle pass design.
If you, like me, are a classic Halo player who doesn’t put as much stock in cosmetics or reward mechanisms, you’re probably having a grand time with Infinite. It feels great, it plays great and it’s a ton of fun. We also got an early glimpse last week at a promising esports scene that could, in a best-case scenario, catapult the game back to the competitive heights it enjoyed during the heyday of Xbox 360-era console shooters.
But the game’s longer-term shelf life will depend on whether 343 can adjust to the community’s feedback and implement free-to-play tweaks that make this Halo feel like it's worth much more than the $60 we would have paid for it a decade ago.
A MESSAGE FROM AIRTABLE
We're on the cusp of a big shift in how businesses operate and how organization wide innovation happens. Giving people the power to build software that's not only fully customized to their teams' needs and workflows but is also visual and simple will do more than improve how their organizations operate — it will transform work as we know it.
“Along with all of you, I’ve been following the latest developments with Activision Blizzard and the ongoing reports of sexual harassment and toxicity at the company. I find these accounts distressing and disturbing. They run counter to my values as well as Nintendo’s beliefs, values and policies.” ―Nintendo of America President Doug Bowser sent an email to staff last week joining his counterparts at Microsoft and Sony in condemning the workplace culture at Activision Blizzard, according to Fanbyte.
“Niantic is building a platform for AR based on a 3D map of the world that we believe will play a critical role in the next transition in computing. We are excited to partner with Niantic because we see this infrastructure supporting a metaverse for the real world and helping to power the next evolution of the internet.” ―Matt Mazzeo, a general partner at hedge fund Coatue, explained in a statement last week why his firm is investing $300 million into Pokémon Go creator Niantic, which earlier this month launched its Lightship AR development platform. Niantic is now valued at $9 billion.
An in-depth look at video game accessibility. A new report from U.K. charity Scope detailed the range of issues disabled gamers face, including that two out of every three disabled players experience barriers to enjoying games due to factors like the affordability of accessibility controllers and limited in-game customization options.
Kojima goes multimedia. Legendary game designer Hideo Kojima’s game studio is getting into the film, TV and music industries with a new division for the Death Stranding developer Kojima Productions, The Verge reported last week.
Marty O'Donnell pleads with fans to stop sharing his music. The composer posted a court-ordered message to YouTube earlier this month asking fans to remove versions of music he composed for the original Destiny while still employed at Bungie, IGN reported, as O’Donnell uploaded the music with the permission of the studio. O’Donnell and Bungie have been engaged in a legal fight since his firing in 2014.
Netflix has a new gaming VP. The streaming service has poached Scopely’s Amir Rahimi to lead its internal game studios, VentureBeat reported last week. Rahimi will report directly to Mike Verdu, the former Zynga executive Netflix hired to lead its gaming push. Netflix purchased its first studio, Oxenfree developer Night School, back in September.
Epic buys a classic rhythm game studio. Harmonix, best known for creating the Guitar Hero and Rock Band series of music games, is now part of the Fortnite creator, in a deal for an undisclosed sum announced last week. Harmonix says it will work with Epic “to create musical journeys and gameplay for Fortnite,” which makes a lot of sense given Fortnite’s live music success.
Resident Evil 4’s second life. The classic Capcom horror game has found a new audience on the Quest platform, with Meta announcing the port as its fastest-selling Quest game to date, Upload VR reported. The company wouldn’t share specifics, but it bodes well for other planned VR ports like Rockstar’s Grand Theft Auto: San Andreas.
Amazon Studios is eyeing Mass Effect. Video game adaptations are all the rage these days, and now Amazon wants one of its own with a deal to produce a Mass Effect live-action series in the works for its Prime Video platform, Deadline reported last week.
Tencent continues to feel the heat. The Chinese government is continuing its crackdown on mobile gaming with a ban on Tencent’s ability to update its more than 170 mobile apps and games for users in mainland China, the South China Morning Post reported last week. The issue stems from apparent user-privacy and data-collection issues, though it’s not clear when it will be resolved.
CD Projekt Red may be bouncing back
The struggling Polish developer, still known best for its hit Witcher games but plagued this past year by the poor launch of Cyberpunk 2077, announced on Monday that it has some much-needed good news.
The company now has a release date window for next-gen versions of Cyberpunk scheduled for Q1 2022. It’s also expanding its team responsible for developing the promised expansion for the game, while also beginning “exploratory work” on new projects. It’s been a tough 12 months for the developer, but its recent acquisitions and new Cyberpunk roadmap point to a promising year ahead. Plus, a new season of Netflix’s “The Witcher” is almost upon us.
Thanks for reading. Tell your friends and colleagues to subscribe here, and send tips, feedback and ideas to firstname.lastname@example.org. See you next week.