Two Big Questions for Summer Game Fest

Two Big Questions Summer Game Fest
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After a busy first quarter packed with big video games like “Horizon Forbidden West,” “Dying Light 2” and especially “Elden Ring,” the latter half of 2022 is lacking in major gaming releases. 

Today’s Summer Game Fest livestream should shed light on some release dates spanning this fall and into 2023. 

Still, bigger questions loom. Here are two things to ponder. 

Will reliance on remote work affect cross-gen release plans? 

Despite an apparent minimum of $70 for its cheapest edition$10 higher than the standard $60 for new games throughout the last generation — Activision’s next “Call of Duty” installment set for October will still release on PlayStation 4 and Xbox One consoles alongside their newer counterparts. 

“Call of Duty” has already decided to forego an annual release in 2023, a first for the franchise in 17 years, demonstrating that development of AAA games is becoming a longer and costlier process. Given the ongoing console shortage, continuing to release games on older systems remains a priority for PlayStation, Xbox and third-party publishers in order to maximize revenues. 

However, this strategy is somewhat of a catch-22. 

Warner Bros. Games decided to cancel last-gen releases for its upcoming “Gotham Knights” game due Oct. 25, stating a desire “to provide players with the best gameplay experience,” suggesting efforts to make the game playable on older consoles were too strenuous. 

A Bloomberg report from 2021 detailed how the pandemic shook up release pipelines, with the switch from offices to remote work being partly responsible. 

Data provided to VIP+ from Parsec, which provides remote-access tech to developers and exhibitors, shows that hours logged on its software across global clients’ teams from fall 2021 through April have remained relatively stable despite changing rates of COVID cases, suggesting remote work for game developers is increasingly becoming the norm, as opposed to a temporary response to the pandemic. 

“Once behavior has changed to working from anywhere, the new behavior has been very persistent,” says Parsec CEO Benjy Boxer. 

This was especially evident in Japan. COVID cases hit their peak in the nation in August 2021, courtesy of the delta wave, before falling and staying low throughout the last three months of the year. Then the omicron surge struck Japan in January, and daily cases quadrupled from the prior peak to hit 100,000 in February, per New York Times tracking. 

If you look at average Parsec use across teams in Japan, there’s hardly any difference between the hours logged before and during this omicron wave, implying many developers were already working remotely irrespective of COVID cases. 

One thing worth looking out for during the Summer Games Fest stream and the joint Xbox-Bethesda showcase Sunday is the prevalence of cross-gen releases vs. those exclusive to PlayStation 5 and/or Xbox Series X. If the former is common throughout the presentations, then it’s reasonable to conclude the kinks of remote work have already been ironed out for many companies, with cross-gen development likely to stay and help companies ride out the shortage in new gaming systems. 

Does a lack of scheduled AAA releases stem from increased M&A interest? 

The first half of 2022 has seen some dramatic acquisitions announced across the gaming space, particularly Microsoft’s pending purchase of Activision Blizzard, Take-Two's completed purchase of mobile entity Zynga and Sony’s acquisition of Bungie, which is still awaiting approval. 

While a big part of Activision Blizzard’s appeal is its ownership of the “Call of Duty” franchise, its own mobile publisher King, known for “Candy Crush,” is a big revenue generator that undoubtedly helped contribute to the $69 billion agreement. Similarly, Take-Two's acquisition of Zynga has outfitted the predominantly AAA publisher with a strong mobile unit.  

Prior to this year, EA made its own splashy mobile acquisitions with the purchases of Glu Mobile and Playdemic in 2021. EA itself is reported to have extensively explored M&A opportunities with several Hollywood and Big Tech players, most notably NBCUniversal, which the publisher proposed could merge with the conglom if Comcast was willing to spin it off, as AT&T did with the Warner Bros. Discovery deal. 

While that deal didn’t work out, EA has much being developed on the non-mobile side but not much scheduled. “F1 22” is due July 1, but beyond that, games like a “Dead Space” remake and other titles outlined in its recent investor presentation won’t arrive this year. 

Likewise, Ubisoft’s “Avatar: Frontiers of Pandora” is still undated despite its targeting of a 2022 release amid the 20th Century franchise’s long-awaited film sequel hitting theaters in December. Summer Game Fest would be an ideal time to reveal the game’s release date, but Ubisoft isn’t listed as a partner on the event’s website, while EA is. 

Rumors that Ubisoft is also a target for M&A have flared up, but the company is reportedly looking to improve its share price first as it also expands further into mobile. 

A vector of in-game spending and ad revenue, mobile games can be lucrative for publishers and provide a bedrock of revenue that supports development of AAA games. If publishers like EA and Ubisoft are determined to remain acquisition targets, then a focus on getting more mobile games out to improve company value first could explain their diminished presence on the AAA side of games this year. 

Bungie successfully entered into an agreement with Sony not just because of multiplatform shooter “Destiny 2,” which operates as a live service much like mobile games do, but because it has a variety of unannounced projects with which it was able to impress Sony. 

EA and Ubisoft may have AAA projects they can similarly boast to a potential buyer, but nailing more live services first will likely be the key to inspiring enough confidence in them, even if it means fewer AAA games on the way in the short term.  

Ubisoft may be sitting out the Summer Game Fest stream, but it could still show up in Xbox’s presentation as many third-party publishers did in Sony’s last week, so keep an eye out this weekend.