NPD: While Retail Slumps, Digital Rises In Early 2012

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The NPD’s Q1 2012 Games Market Dynamics: U.S. report saw physical game sales at $1.5 billion, used and rental at $525 million and digital content sales at $1.38 billion. For the U.K., France and Germany used and retail was at $300 million and digital was $959 million in sales during Q1 2012.

“The declines in the physical market for new physical software are well documented,” said Anita Frazier, industry analyst, The NPD Group. “But, a broader view of the games industry shows that other physical content sales (the combination of used and rental) declined by just five percent and digital format content sales grew by 10 percent as compared to Q1 2011.  While the growth in digital format sales does not yet offset the declines in physical format sales, clearly the changes occurring within the industry are reflected in the trends we are seeing in the research.”

“Relative to the spend in the U.S., we find that the consumer spend on mobile games is still developing in the three European countries we are covering, while the spend on full game and add-on content digital downloads and subscriptions is more highly developed,” said Frazier.

Call Of Duty Online Comes To China Via Tencent

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Activison Blizzard has signed a deal with Tencent so they can exclusively bring Call of Duty Online to China. The free-to-play game will focus multiplayer, with revenue from perks and customisation options for weapons, equipment and characters.

“We are very excited about our relationship with Tencent and the opportunities for gaming in China. We think China is one of the most exciting places in the world for us to grow our business and to develop innovative new games,” said Activision Blizzard CEO Bobby Kotick. “Tencent has a terrific track record of customer-focused innovation and deep market knowledge that will be invaluable to Activision as we build great games for China. We have worked closely with Tencent to create a game with broad appeal for the Chinese market.”

Zynga’s Pincus Talks Employee Philosophy, Facebook Relationship

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Zynga has sometimes received some criticism for it’s top-down, confrontational managerial style. While the company seeks to define itself away from Facebook and faces criticism from investors, Zynga founder Mark Pincus explained the company culture.

“An important, fundamental part of our culture is that we think that every person in the company should feel like a principal, an owner, a founder of this vision,” said Pincus. “They should challenge the vision, the mission, the strategy, and the values. Sometimes we change the values based on those challenges, and sometimes we need our teams to call out that we are not living up to those values.”

“Our No. 1 value is that we are making products that we love, that we think us and our friends and family want to play,” he added. “The first thing I say to new hires is that if you are working on a game and you don’t feel connected to it or love for it, don’t be embarrassed to talk about it.”

Pincus hopes with this philosophy, it will lead the company back to the audiences it had a year ago. “The promise of games for everyday people is still so much greater than the experience that everyone has today,” offered Pincus. “The overall tectonic shifts that are going on in games and more broadly in media are that everything is moving to becoming free, social and accessible. But we’re just at the beginning of that. We can get to a day where short-session play can enhance, if not replace text messaging as a way to stay in touch with people.”

As far as working on other platforms that aren’t PC, he said, “I still believe that we can offer you a much deeper, more engaging, more compelling play experience on a PC than we can on a mobile device, but one can enhance the other and one can expand the other. I don’t think they necessarily will compete with each other, just like how we find a place for movies in our lives, and TV and radio. The same will be true between a handset a tablet and a PC.”

On the relationship with Facebook, Pincus said, “It has been hugely positive for us, for Facebook and for both of our consumers. Facebook has been an incredible catalyst, an accelerator, of social gaming and of other industries. And we are appreciative of that and we think that we helped see a significant catalyst for engagement on their own platform, and now on iPhone as well.”

Source: AP

EA’s Frank Gibeau Sees Company’s Digital Future

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Retail is still a massive part of the revenue pie for the gaming industry.  However, EA Labels boss Frank Gibeau sees the advent of digital only sales coming very soon.

“It’s in the near future. It’s coming,” said Gibeau of EA being 100 percent digital. “We have a clear line of sight on it and we’re excited about it. Retail is a great channel for us. We have great relationships with our partners there. At the same time, the ultimate relationship is the connection that we have with the gamer. If the gamer wants to get the game through a digital download and that’s the best way for them to get it, that’s what we’re going to do. It has a lot of enhancements for our business. It allows us to keep more that we make. It allows us to do some really interesting things from a service level standpoint; we can be a lot more personalized with what we’re doing.”

He was quick to add, “But if customers want to buy a game at retail, they can do that too. We’ll continue to deliver games in whatever media formats make sense and as one ebbs and one starts to flow, we’ll go in that direction. For us, the fastest growing segment of our business is clearly digital and clearly digital services and ultimately Electronic Arts, at some point in the future – much like your question about streaming and cloud – we’re going to be a 100 percent digital company, period. It’s going to be there some day. It’s inevitable.”

Source: GamesIndustry.biz

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Final Fantasy Creator Happy To Be Working On iOS Games

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Final Fantasy creator Hironobu Sakaguchi is perhaps best know for his AAA projects, such as the recent The Last Story. However, now he’s focused on mobile projects and is happier with the schedule afforded him at Mistwalker where he can surf at his home in Hawaii.

“I’m enjoying being at Mistwalker and being able to do things which maybe I couldn’t at Square,” Sakaguchi said. “After making long form stories for so long maybe I felt empty. I think that’s why I said in London that I had no objective. Now I have three projects on iOS, I’m making music, I’m writing – I’m still busy!”

As for his inspiration to still work, he said, “Since I started making games, I just wanted to make people have warm feelings. When they play my games, I want them to feel warmth and kindness, not darkness. When I make games, I think about my daughter, so I don’t want darkness there. I only make games that my daughter would enjoy.”

Source: GamesIndustry.biz

IPad Small Coming In Fall: Report

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Analysts are expecting that Apple will roll out a smaller model of the iPad in October. It is believed that a slight refresh of the iPad will come at the same time to compete with with Amazon’s Kindle Fire 2 and Google’s Nexus 7.

“Based on our supply checks, we expect Apple to launch a 7.85″ iPad in October. We anticipate an entry-level 7.85″ iPad with 8GB of NAND capacity to price at $299 with an initial gross margin of 31 percent,” wrote Pacific Crest analyst Andy Hargeaves. “We estimate Apple will sell 10.0 million 7.85″ iPads in FQ1 (Dec.) and 35.2 million in all of F2013. We anticipate 25 percent cannibalization of the larger 9.7″ iPad (for every four 7.85″ iPads added, we reduced our 9.7″ iPad estimate by one), so our total F2013 iPad estimate increases to 91.6 million from 65.2 million.”

“We expect at least three significant small-form-factor tablets from tech behemoths to be in the market this holiday season: Apple’s 7.85″ iPad, Google’s Nexus 7, and a redesigned Amazon Kindle Fire,” added Hargeaves. “This will drive significant marketing spending to the lower end of the market, which, along with the attractive prices, could drive greater cannibalization of larger tablets than we currently expect.”

Source: paccrest.com

Funcom Makes Shift At CEO

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Trond Arne Aas has departed his role as CEO of Funcom and will no longer sit on the management board; he will be replaced by current COO Ole Schreiner, Funcom veteran of nearly 11 years. His new title will be strategic adviser to the board and chief strategy officer, and will work on the new Lego MMO.

“I have served as CEO of Funcom for several years and it has been an exciting and rewarding experience,” said Aas. “The Company’s financial position is strong and the foundation of the Company’s long-term product and technology strategy is in place. It feels like a very natural point in time for me to make the transition to a new and freer role in the company, but I will remain committed to the Company both as a major shareholder and as an employee.”

“When Trond Arne Aas made his request for a transition, Ole Schreiner was the natural successor,” said Gerhard Florin, chairman of the supervisory board. “Mr. Schreiner knows the company intimately and is one of the most experienced executives in the online games business. He has been working together with Trond Arne Aas for years and through his work at Funcom he has demonstrated deep and broad business understanding and world class operating skills, both in terms of people management, customer understanding and interaction, in game development and in cost and margin optimization.”