May 18, 2021
Image: Josue Ladoo Pelegrin / Unsplash
Good morning! This week in Protocol Gaming, your weekly guide to the business of video games: a dive into the debate around Ubisoft's earnings report, new updates in Epic v. Apple as Phil Schiller takes the stand, and the rise of Robloxcore.
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The game industry had a collective freak-out last week over the free-to-play business model. It was just the latest example of the long-simmering tension between what in the industry makes the most money and what gaming fans consider to be high-water marks of the art form.
The embrace of free-to-play caused a firestorm of debate about the health of big-budget single-player games of the type Ubisoft has built its business on. But the numbers don't lie: Free-to-play games generate more revenue more consistently, and the model now dominates the industry, from Fortnite and Roblox to Genshin Impact and Honor of Kings.
Ubisoft was quick to try and calm the storm by clarifying some key points around Duguet's commentary, specifically that Ubisoft did not intend to signal it was moving away from the premium model but rather upping its investment in free-to-play.
Call of Duty represents the most likely path forward for giant publishers, as Lama pointed out. The franchise has an annual release sold as a premium, big-budget game. It also has a free-to-play console and PC battle royale alongside a fast-growing mobile app. All of this expands Call of Duty as a business, instead of one part siphoning away resources to prop up another. This is likely the future of gaming's biggest brands, but it certainly doesn't mean premium titles will disappear.
One clear takeaway from Ubisoft's earnings controversy is that those in the game industry care less about any real distinction between free-to-play and premium and more about investing in a diverse array of business models that cover all the bases, especially as that distinction starts to disappear.
Microsoft is building its cloud gaming service with a big focus on bringing what we think of as premium games to a mobile screen, Nintendo has put Mario and Animal Crossing on the iPhone and Sony has finally relented and brought some of its titles to PC. Meanwhile, the big third-party publishers are everywhere at once, with an obvious and inevitable focus on free-to-play as the future no matter the platform. No amount of hand-wringing about the glory days of gaming is going to change this formula going forward.
Protocol sat down with DataStax CEO Chet Kapoor to discuss how a modern, open data stack can help companies drive high growth and the role open-source Apache Cassandra plays in reliably delivering data at scale.
Sony's PlayStation 5 debuted in mainland China over the weekend to great success, with the console selling out in a matter of minutes after pre-orders opened last week. Microsoft is planning to launch its pair of next-gen consoles, the Xbox Series X and S, in the country next month, with pre-orders opening later this week. The success of both platforms will hinge on their ability to meet demand amid ongoing shortages and compete with the Nintendo Switch, the current market leader in China.
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