November 10, 2020
This week in Protocol Gaming, your weekly guide to the business of video games: Next gen is finally here, Take-Two is buying Codemasters, and Maingear's Wallace Santos is getting ready for 1,000 Hz monitors.
And we're hosting our first gaming event! Join us Nov. 18 for a conversation on the evolution of gaming. We've got an all-star panel: Activision Blizzard's Daniel Alegre, EA's Samantha Ryan and Facebook's Vivek Sharma, with more to be announced. It's going to be a blast! Sign up here.
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Today's the day! In the video game business, this is as big as it gets: the debut of a new generation of centerpiece home consoles from the two technology and entertainment heavyweights that dominate the sector — Microsoft and Sony.
Today, Microsoft is launching the $500 Xbox Series X (which supports 4K resolution) and the smaller, less-powerful $300 Xbox Series S (which supports up to 1440p resolution). On Thursday, Sony will launch the $500 PlayStation 5 with an optical drive and a $400 PS5 without the drive; both versions support 4K.
But launch game lineups and immediate holiday sales figures are basically meaningless. That's for two reasons.
First, both consoles are going to sell out this year anyway. Some "preorders" may not even arrive until New Year's Eve. Both companies would surely love to sell as many units as possible; they are not artificially creating shortages.
Second, these cycles last years. With sell-outs assured this quarter, what really matters is how these consoles move next year once they are no longer supply-constrained. (Along these lines, read Dina Bass's great article on how Microsoft used its cloud engine to keep the Xbox launch on track amid quarantine.)
So this is a long game. It may not be clear for a year or longer how Microsoft's subscription-heavy strategy truly stacks up against Sony's traditional retail focus.
- Seth Schiesel
Join Protocol's Seth Schiesel on Nov. 18 at 11 a.m. PT / 2 p.m. ET for a discussion on the evolution of gaming. He will be joined by Activision Blizzard President Daniel Alegre, EA SVP Samantha Ryan and Facebook Head of Gaming Vivek Sharma. This event is presented by Microsoft Azure. RSVP now for more details.
It was first announced Friday, and now it's official: Take-Two is set to buy Codemasters for $956 million, after both boards agreed to the deal.
Take-Two should be able to eke out more profit from the racing giant, too. It will "have better economies of scale than Codemasters really has access to in their own right," Young said. Indeed, in its press release announcing the deal, Take-Two said that it thinks it can use 2K's "operating expertise in publishing, including live operations, analytics, product development, and brand and performance marketing" to improve Codemasters' performance. "As an entity within a larger publisher," Young said, "[Codemasters] will be able to be more profitable than as a standalone entity, in my view."
Given all that potential, there was some consternation around the price. Many current shareholders don't have a mandate to hold U.S.-listed shares, Young noted, so they may not be able to benefit from Codemasters' future growth under Take-Two. But it looks like things are going ahead anyway: Gaming consolidation truly does not care about borders.
- Shakeel Hashim
In honor of the new console generation, we welcome the CEO and co-founder of Maingear, one of the top makers of high-end gaming PCs. Santos recently received a new CPU personally autographed by AMD CEO Lisa Su.
What was your first gaming system?
My first console was an NES, gifted to me by my aunt, and it made me a Nintendo fanboy for the rest of my life. I've owned every Nintendo console since then except the GameCube, and I even owned the ill-fated Virtual Boy.
What is the most important trend in the game business in 2020?
I think more and more people are realizing the importance of reducing latency in games, especially in competitive esports titles like Valorant and CS:GO. Let's also not forget high refresh rate 4K gaming becoming a reality with Nvidia's RTX 30 series and AMD Radeon 6000 series graphics card.
What has been the most overlooked aspect or development in the game business over the last year?
VR is still alive and kicking! With incredible titles like Half-Life: Alyx and the release of the Oculus Quest, VR is only getting better and more accessible. We've also seen the arrival of 8K gaming on the PC with the Nvidia RTX 3090.
What new technology or technical development are you most looking forward to?
The road to 1,000 Hz monitors. 360 Hz monitors are already a reality, and the experience is impressive. Desktops took a huge leap forward this year, and I expect notebooks to do the same next year.
What games are you playing recently?
I'm constantly playing Rocket League (you should see it at 8K), and I still need to finish Half-Life: Alyx and Red Dead II before Cyberpunk 2077 comes out.
This is the busiest week for new games in a long time, and the choices are almost overwhelming. We want to know what you're playing. All in on Spider-Man? Rediscovering your Xbox catalog? Conquering Valhalla? Looking forward to staring at Ronald Reagan? Let us know by replying to this email; we're sure you've got opinions.
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