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Protocol Gaming
Your essential guide to the business of gaming.
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Nintendo’s big bet on nostalgia

Zelda

Hello! This week in Protocol Gaming, your weekly guide to the business of video games: how Nintendo continues to monetize nostalgia like few other companies, everyone is buying everyone, and the new supergroup of game development.

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The Big Story

Nintendo's big bet on nostalgia

Four years feels like a lifetime these days.

In the world of gaming, it's that long, to the week, since the Nintendo Switch was first released. It also happens that Nintendo just celebrated big anniversaries for its Pokémon, Mario and Zelda franchises, the youngest of which is now 25 years old. There are reportedly plans on the horizon for a new model of the Switch, as well as several new incarnations of all its bestselling series. It's all the latest evidence of Nintendo doing what it's done best for so many years now: finding a path forward by leveraging its past.

Nintendo isn't really focused on hardware performance. While the latest versions of the Xbox and PlayStation consoles are engaged in a specs battle to take the title of the most powerful machine of this gaming generation, Nintendo is, as ever, doing things its own way.

  • The new version of the Switch is expected to have a slightly larger display than the old one, and it'll still only run at 720p resolution.
  • Reports also suggest that the machines will be able to run 4K when docked — something Microsoft has had natively on its consoles since 2017.

And you know what? It doesn't matter. Nintendo consoles haven't really ever been about having the most groundbreaking technology (other than possibly the N64 for a short while, the Wii's motion controls and the Virtual Boy — but the less said about that the better).

  • Nintendo has effectively competed against the other gaming titans by finding innovative ways to tell the same stories it has been since Shigeru Miyamoto first drew Mario with a mustache so you could see he had a nose.

Then there's the games. The new (old) games. Roughly aligning with all these anniversaries, Nintendo recently announced a new Zelda game for the Switch that is actually a port of a game it released a decade ago, a new Mario golfing game, a third Splatoon game and that more characters from other Switch games would soon be joining Super Smash Bros. Ultimate. Soon after, the company also announced a remake to its Pokémon RPGs from 2006, as well as a prequel to the world of Pokémon.

  • There's little in the way of new intellectual property, or even new storylines, on the horizon for Nintendo's biggest properties, but it likely won't matter.
  • A new Switch and new (old) games out ahead of the holiday shopping period will likely keep Nintendo's console business ticking along for the next few years.

Nintendo has monetized nostalgia like few other companies, particularly in the gaming world. The company has repackaged old games for new consoles and easily convinced consumers to shell out $50 or $60 for games they probably first bought during the Reagan administration.

  • The only other lasting example is perhaps Disney and its famed "vault," where movies would disappear and reappear as "remastered" or on a new format and you'd have to buy them all over again.
  • In both cases, the companies have in recent years seemed to grow more reliant on rehashing concepts in their existing franchises rather than exploring anything new.

As long as reworking the past keeps working for Nintendo, there's really no issue, at least in the short term. It just depends on whether the company can capture that same excitement fans felt when first blowing into a NES cartridge to fire up Duck Hunt and imbue it into clicking Joy-Cons in for a first game of Mario Kart 8.

— Mike Murphy

Overheard

  • "Shadow became a victim of its success." —Blade, the company behind Shadow for PC, has filed for bankruptcy in the U.S. and receivership in France. In a blog post on the Shadow site, the company said it would reorganize and promised that there would be no service interruption to its subscribers.
  • "I have made the decision to part ways with Avalanche Software." —Hogwarts Legacy lead designer Troy Leavitt announced he was leaving Avalanche in a series of tweets, after controversial videos of him attacking feminism and social justice surfaced last month.
  • "We've seen tremendous growth from PlayStation fans using subscription-based and ad-based entertainment streaming services on our consoles. With this shift in customer behavior, we have decided to no longer offer movie and TV purchases and rentals through PlayStation Store." —The change will take effect at the end of August, but customers will still be able to access all of the movies and TV shows they'd already purchased.

A MESSAGE FROM GODADDY

GoDaddy

Greg Goldfarb, who is VP of Products and Commerce at GoDaddy, admires the resilience and ingenuity of small business owners. "It is amazing to see entrepreneurs figuring out the new context really quickly to adapt and survive." We sat down with Goldfarb to talk about the rise in ecommerce, the impact of COVID-19, the major trends emerging this year and more.

Read the interview

Lootbox

  • V1 Interactive is shutting down. CEO Marcus Lehto, the co-founder of the Halo franchise, cited the tepid sales of the studio's only game, Disintegration.
  • This week's movers and shakers: Frances Townsend is the new head of compliance at Activision Blizzard, tasked with navigating a fast-moving gaming regulatory world. Former Protocol and New York Times reporter Seth Schiesel is joining Xbox to be the company's director of executive communications. Curve Digital has made a number of senior appointments, including Jarvis Crofts as VP of commercial and publishing strategy, Ian Buckley as CFO and James Gourlay as director of digital strategy. Amit Bajaj is joining FaZe Clan as CFO.
  • Hardsuit Labs announced a small number of layoffs, a week after it was being replaced as the developer of Vampire: the Masquerade — Bloodlines 2.
  • Microsoft completed its ZeniMax acquisition, having received EU and U.S. approval. Microsoft confirmed that some future Bethesda titles will be Xbox and PC exclusives.
  • Zynga bought Torchlight III publisher Echtra Games to help bolster its cross-platform ambitions. Zynga has been on a buying spree recently, but this is the first time the company has focused on an immersive role-playing franchise.
  • Epic Games acquired Mediatonic, the studio behind Fall Guys, and photogrammic software developer Capturing Reality. Because the metaverse won't build itself!
  • More acquisitions: Australian fitness firm OliveX bought Zombies, Run developer Six to Start for $9.5 million. Motorsport Games will buy Studio 397 to grow both companies' presence in racing sim esports. And mobile performance ad platform Vungle bought GameRefinery, a SaaS mobile gaming analytics company.
  • This is like a supergroup of game development: Industry pros from Blizzard, Valve, Bungie and Riot Games have raised $37.5 million to start a new studio called Theorycraft Games.
  • Alleged anti-competitive behavior still haunts Apple. This time the U.K.'s Competition and Markets Authority has begun an investigation into the company, citing "several developers reporting that Apple's terms and conditions are unfair and could break competition law."
  • On Protocol | Policy: Arizona's House of Representatives passed a bill that would let app developers circumvent the fees that Apple and Google take from app sales.
  • Plaintiffs dropped a class-action lawsuit against EA. The suit accused the company of using dynamic difficulty adjustment, which relies on AI to adjust difficulty and push people toward purchasing loot boxes.
Karyne Levy

Look Out For

CoD breaks the internet

The ever-increasing file sizes of Call of Duty games have become a running joke in recent years, but things are officially out of hand. Last month, a 26.5 GB Warzone update led U.K. ISP Virgin Media to record its "biggest download day on record," while BT reported peak traffic of 20.86 terabits per second. Hogging bandwidth from Zoom school lessons puts a whole new spin on how games affect kids.

— Shakeel Hashim

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