Ghost Recon Amends

After talking last week about Ubisoft and how they were adjusting their financial projections based on underperforming games, specifically Ghost Recon Breakpoint, this week they explained what their plan is to fix the game. You can find the whole article on the Ghost Recon Blog but over there they described five major areas that the team plans to make improvements on.

The technical side of the game is the most important thing. The game launched with too many bugs and stability issues for most players, no matter what platform you were playing on.  They have already made a large patch around mid October that should have fixed a lot of the more pressing issues but wanted to let gamers know that there will be bigger improvements around the corner with two updates in November. Key bugs that they plan to address with the next two patches include problems with drones, fire rate issues, mission completions problems among many others. They include a link to their community pages where there is a listing for all the known bugs. Long story short is that there is a lot of bugs and this will take a while.

Unlike some live service games that have abandoned post release content after poor launches, most notable as of late being Anthem. Ubisoft has a very good track record of sticking with their products and creating value and community. Rainbow Six Siege launched buggy and with minimal content as well as The Division, which was a little bare bones at the start. By the time The Division 2 had launched, Ubisoft had earned enough good faith from the community for the first game in the series by constantly fixing the problems and adding new areas and missions. With Breakpoint, they want to be clear that the raid that was announced back in the spring is still coming to the game and can be expected in December along with the Terminator event. Ghost Recon Wildlands had a fun, Predator tie that seemed like it pleased fans and hopefully this Terminator event will be no different.

They have taken a lot of the feedback and criticism regarding the in game economy plan to make adjustments within the following weeks.

The final issues that are being addressed that are too big to give a time frame include AI team-mates similar to your squad from Wildlands and play style. They note that the realism that they advertised in the game with survival elements have basically been absent and are planning to add modes so that however you want to play Breakpoint, you can. If you are looking for a more realistic military game with immersive survival elements then you will be able to play the game that way or if you want a more casual experience, then there will be that option as well.

The final issues that were discussed seem like they are basically changing the game completely, which explains why there is no timeframe for the launch of those solutions. However, just knowing that they are aware of these issues and are transparent enough to be honest with the community goes a long way in people either staying with your product or purchasing it.

EA Earning Report

This week EA revealed their Q2 earnings report for the period July 1 - September 30, 2019. Top level impressions from the report is that things look good overall across most of their titles. Their live service games continue to do well and the live service offerings inside most of their sports titles. Revenue and earnings per share exceeded their Q2 expectations and based off of a strong second quarter, EA will be adjusting its full year projections as well.

One of the strongest aspects of the earnings call for EA was their sports titles, as expected. Madden has seen another strong year, with a nice boost from the early release. I would expect Madden to now be released early August going forward with the success they have seen from this year. EA credits the hype generated from the start of the preseason and then another round of hype from the kickoff. According to the earnings call, player engagement, units sold and ultimate team are showing year over year growth. The number that most likely pleases EA the most would be that Ultimate players in Madden are up nearly 20% versus this time last year. This is incredible news because as we have seen before in earnings calls, EA makes a bulk of their profit from the live service, Ultimate. They also mentioned NHL 20 showing similar growth compared to the previous release as well as great growth in Ultimate. When we talked about the NPD charts from last month, one of the games that stood out to me was NHL 20 being in the top ten considering Hockey lacks the popularity of the other major sports.

However, the golden goose for EA when it comes to their sports titles is FIFA, due to its global popularity. The great news is that the growth trends were echoed for the FIFA series. Growth in this series is not a given due to sheer size and popularity of it and that eventually you plateau with consumers. New players were up around 7%, with returning players up around 15% and the most important growth was that FIFA Ultimate unique players were up 22%. The global reached also saw the FIFA series show strength in other aspects including FIFA mobile being downloaded more than 250 million times now with China and Korea particular areas of success.

One of the beacons of light earlier in the year for EA was Apex Legends. With minimal releases from EA earlier in the year, Apex Legends getting off to such a great start helped keep investors happy. Within the first month, the Respawn developed shooter had reached 50 million downloads but then the news went quiet on the series and investors seemed disappointed that it wasn’t the next Fortnite. The series has also had some bumps in the road regarding a slow trickle of content, battle passes that didn’t offer much value and an in game economy that was a little unfair. EA and Respawn have tried to address the problems with the game as much as possible by constantly tweaking the economy and also by trying to release timed content, involving new game modes. It seems that the commitment EA and Respawn have given to Apex has gone a long way in shaping its success. Weekly player count in the newly released third season is greatly above what it was compared to the second season and EA has announced that the game has now been downloaded over 70 million times, which definitely puts the game in rarified air for the moment. The next plan for the game is to expand to mobile, new platforms, new territories and also launch an Apex competitive program that they will reveal soon. If the game is already on PS4, Xbox, PC and they are talking about bringing it to mobile then the only new platform this game can come to is either Switch or Stadia and I would put my money on Switch port happening soon with Overwatch recently showing that, in addition to Fortnite, these games can work on the Nintendo Platform.

There were a few other important notes from the earnings call. EA mentioned that with the launch of EA access on the PS4, they saw their subscriber base grow significantly. This success combined with the upcoming launch of Star Wars Jedi : Fallen Order, as well as the Disney contract coming closer to the end probably prompted EA to branch away from Origin and put EA Access on Steam as well. From the outside looking in, this seems like a smart move that will bring a lot more potential customers to the upcoming Star Wars game but also to upcoming EA games as well. Microsoft has shown us that just because you own something like Minecraft doesn’t mean it can only succeed on your platform. It’s a win win scenario if people are buying your game and if more people have the opportunity to do so.

The other large piece of news that was slipped into the very end of the earnings call was during their look ahead at the future of EA. The next Battlefield will not be released until FY2022, which means that at the earliest we will see this game will be April 1, 2021. This means that with no Battlefield title this year and no release next year we won’t be seeing it might be almost three years from the release of Battlefield V to the next instalment. This is somewhat surprising as we are expecting new consoles from Sony and Microsoft next holiday season. There is no better way than to show off your fancy new hardware then with a brand new shooter. A big question will be what title will be the next release ? Are fans finally going to see a Bad Company follow up ? Will EA play it safe and release a mainline Battlefield ? Will it have been long enough for angry fans to forget about Battefront and all the Microtransactions? My other concern is that with Resapawn shipping Jedi Fallen Order in a few weeks, it would seem like their next mainline project would be targeted FY2022 or would they require a three year cycle before their next game putting the release date into FY2023. That sounds like a long time to wait for the next Titanfall but maybe we can get lucky and get some Titans in Apex Legends.

Nintendo Q2 Earnings

As is the case for this time of the year to get a lot of earnings reports, the other company that I wanted to take a look at was Nintendo. The broad strokes for their report is that things are still continuing to go very well with many successful first party titles launched this quarter as well as existing titles continuing to sell well. In terms of hardware, the Switch is still on a solid sales path, especially with the addition of the latest iteration as well as an improved original. Nintendos Digital sales still represent a small portion of the total software sold most like due to the fact that Nintendo has always had a collectors feel to it, but the proportion of total digital is up around 10 percent from this time last year with around 36% being digital.

Overall net sales and gross profit are the best they have been for the first six months of the fiscal in the past 5 years. This is great news for Nintendo, who traditionally do the bulk of their sales in Q3 with things like Black Friday, Christmas, and Boxing Day generating sales. It was a strong quarter for the Switch with a total of 6.93 million units sold bringing the total Switch units sold to 41.67 million units. The addition of the Switch Lite to the family helped spark interest and bring new consumers into the ecosystem with the Lite generating almost 2 million in sales during the reporting period. This might not sound like a lot but the Lite only had 10 days at the end of the reporting period, which sound impressive that it sold almost 2 million in a little over a week. This now makes their projection for the rest of the fiscal year, which is the end of March 2020, up to 18 million units.

If these projections are met, then that would mean the Nintendo Switch would overtake the SNES on the list of all time units sold for Nintendo, and it would also put it with striking distance of the NES. The Switch has been a strong seller for Nintendo. It has already overtaken the N64, Gamecube, and Wii U. This time next year you will probably be able to add a few more to the list, especially when you consider the potential software releases as well as the often rumored Switch Pro. It would be a very smart move for Nintendo to release a “pro” version of the Switch, that would boast new features that could help take some of the conversation away from the next generation of consoles from Microsoft and Sony.

Things for Nintendo also look great from a software perspective with software sales up year on year by about 40% with 58 million software units sold in the first six months of the year and are now projecting to sell another 65 million units by the end of March. This target seems very attainable with the holidays upon us and you need something to go with your brand new system. In terms of which actual first party titles, there are three new editions to the million plus sellers. Fire Emblem: Three Houses sold 2.29 million, Super Mario Maker 2 sold 3.93 million units, and Links Awakening sold 3.13 million units. Links Awakening sales figures come across impressive for the same reason as the Switch Lite did and that was because it only had ten days before the reporting period ended.

Their existing line up also continues to sell extremely well with titles like Mario Kart 8, Smash Ultimate, Breath of the Wild, Super Mario Party, and new Super Mario Bros U Deluxe all selling over a million copies each in the first six months of the fiscal year. Mario Kart 8 is now sitting at just over 19 million copies sold and will most likely pass 20 million very soon, which is very impressive due to the fact that its a port. I can’t imagine what will happen when a new Mario Kart is released. In terms of what to look forward to from Nintendo before the end of the fiscal year, there is Luigis Mansion 3, Pokemon, and Animal Crossing. Listed on the TBA is Bayonetta 3, Metroid Prime 4, and the sequel to Breath of the Wild. You have to assume that one of those titles or possibly another large title that hasn’t been announced yet will be next holidays anchor, which will be used to compete against the next gen systems and that is exciting to think about.

Blizzcon

The annual Blizzard conference is happening this weekend, and got underway on Friday, November 1st. Before diving in to the actual content of the conference, there are a few key areas that we should look at first. As expected, there was protesting at the event, and although I am not there personally, it sounds like there is approximately 40 people outside of the conference. They are handing out free shirts as well as have signs but the good news is that it sounds like they are smart enough that they aren’t putting anyones life in harms way. They are just expressing their opinion and voicing their freedom of speech instead of making a violent protest or retaliation.

J Allen Brack, President of Blizzard, started the conference by coming out and making a public apology. His time on stage was a little over ten minutes and sounded genuine but its hard to know as this has been done many times before from other corporations. To look at this from an optimistic point of view, this could have easily been a prepared and released earlier in the week or anytime over the past month. Blizzard also could have taken the Bethesda direction and put together a montage of the development team and community as they did for fallout 76 at E3. There is a big difference in my opinion to get up on stage, in front of thousands, and make a public apology. Its not an easy thing to do and only time will tell if Blizzard genuinely understands what went wrong, but they easily could’ve taken an easier road.

With that out of the way, Blizzard wasted no time announcing Diablo 4, officially. With the announcement of Diablo Immortal last year in place of Diablo 4, it was almost a guarantee that the fourth mainline entry in the series would be revealed. Blizzard showed off a nine minute cinematic, that was nothing less than you would expect, rich in atmosphere and mood. Followed up by a three minute trailer featuring actual gameplay featuring the first confirmed classes for the game including the barbarian, the sorceress and the druid. According to Blizzard, Diablo 4 will launch with five classes with the other two being revealed at a later date.

The gameplay doesn’t look as bright as Diablo 3, which many players complained about as it looks like it will be instead trying to emulate the dark, gritty look that Diablo 2 was famous for. I personally have loved all of the Diablo games with each entry offering something different to the series. I have spent more time with each successive game, especially in co op, and I am very much looking forward to this game. The series is also moving a more open world approach where all the areas are connected which would possibly eliminate having to teleport or return to town to travel to other areas. According to Blizzard “five distinctively dangerous regions…all seamlessly connected for uninterrupted journeys”

The biggest change to the series will be that moving away from the offline solo mode with the introduction of a shared world universe. As for how this might affect the game, its still too early to know but to be optimistic, it might only be in certain public areas and when you descend into buildings or dungeons the shared world goes away. The wording that Blizzard uses makes me optimistic and pessimistic at the same time

“Mount up and roam from zone to zone completing public events with others or explore populated town social hubs to party up and trade. Challenge a world boss or even other players for treasure and glory! The world, along with its deadly inhabitants, awaits. While it’s dangerous to go alone, you might prefer to solo your way through Sanctuary. Anyone can explore the campaign at their own pace, plumb randomized dungeons for rare loot, and find any item without joining a group. Keyed dungeons will offer a new endgame experience available to individual players as well as groups of up to four!”

Overwatch 2 also made its debut at Blizzcon, after numerous leaks over the past few weeks. The game will feature PVE modes including missions as well as co op modes, and on the multiplayer side it will also include new maps and new heroes. The interesting approach that Blizzard is taking to the sequel includes using a shared multiplayer universe that will allow players of Overwatch 1 and 2 to play together. I can’t think of any other game that has tried this approach by letting players of the older game play with players of the newer game. I am curious if this will help or hurt sales. It will help players of the original who don’t want to buy the sequel stay relevant and not have the game die a slow death when players usually make a mass exodus to the sequel. Overwatch 2 has been announced for the Xbox One, PS4, Swtich and PC, although at this time we don’t have any type of release date or window.

There were plenty of other smaller announcements as well including a HearthStone expansion, World of Warcraft expansion, and a Hearthstone spinoff, Hearthstone Battlegrounds. This new game will be Blizzards answer to the popular PC genre, Auto Battlers like Dota Auto Chess and many others that have followed.