New Game Plus (January 27 - February 2)
Nintendo Earnings Report Q3
This week Nintendo revealed their Q3 numbers from the period ending December 31, 2019 and last time I looked at their earnings I said it was most likely they would achieve milestones in the next quarter and they did just that.
With the holiday season being the biggest for pretty much every console maker, Nintendo made no exceptions and posted an excellent quarter. One of the biggest takeaways from the report was the Nintendo Switch has now reached a staggering 52.48 million units sold with less than three years on the market. Let’s also not forget that this console wasn’t a sure thing, especially after the massive failure of the Wii U. Nintendo could have chosen to play it much safer than it did and release a strictly home console that offered the first party titles that would be expected with a new generation. Instead, Nintendo basically doubled down on the strengths of the WiiU and combined it with the strength of their knowledge and success with handhelds.
As I predicted, the Nintendo switch would reach the milestone of passing one of the greatest Nintendo systems of all time with the Super Nintendo. Lifetime sales for the super we’re 49.10 and it’s somewhat fitting that late last year we finally got the Super Nintendo online that featured some of the touchstone games of that generation. Oddly enough we haven’t received many additional titles since the service launch at the end of the fall with only a couple of extra games being released in December. They did warn gamers that the cadence of releases would be much less and less frequent than the NES online games. Which is actually the next closest target for the switch sales as the original NES has 61.91 million systems sold.
At its current standing, there is also a decent chance that the Nintendo Switch has overtaken the Xbox One in terms of systems sold. Way back in October of 2015, Microsoft announced they would no longer be releasing sales data for the Xbox One and back around that time sales for the console were around 16 million. Microsoft said that it was measuring success differently than consoles sold which could be true but also announcing sales data in a losing race doesn’t benefit Microsoft at all. Current estimates from industry analysts put the total consoles sold somewhere between 45-50 million which is still pretty respectable overall but compared to the 100 million plus of the PS4, it pales. Based on these most recent estimates that would mean the Switch has surpassed the Xbox one in just under 3 years.
They also included an updated list of their titles sold so far. Notable titles that were released last year that did well for Nintendo include Pokémon which sold 16 million, Luigis Mansion 3 sold 5.37 million, Super Mario Maker 2 sold 5.04 million, Links Awakening sold 4.19 and Ring fit adventure sold 2.19 million which is pretty great for a premium priced exergame. Important to note that Mario Kart 8 Deluxe sold an additional 6.3 million copies since April and becomes the first Switch title to pass 20 million units sold at a staggering 22.96 million which is almost 50 percent attach rate for that game.
As for what upcoming from Nintendo we are still fairly in the dark. They list Metroid Prime 4, Bayonetta 3 and Breath of the Wild sequel all as TBD and nothing much else listed in the way of notable first party titles or even any concrete dates.
Taking a closer look at some of the data released about 82 percent of total software sales on the Switch are first party titles, which is absolutely insane but us been the reason for Nintendo’s success since they started making home consoles. First party sales were actually down based on the same three month period from the year prior from a little over 84 percent. As the industry moves forward steadily in the digital world Nintendo is also following slowly behind. Total digital software sales increased from 22 percent of total software sales during the same time frame last year up to 29 percent for the first three quarters of the year. Nintendo players have a collectors mentality and having physical versions of Switch software is a trend that will take some time to overtake.
Overall this was another impressive year from Nintendo with over 17 million units sold so far this fiscal year a little over 5 million of those sales belonging to the newly introduced Switch Lite. They are also now projecting a total of 19.5 million units sold by the end of March which would wrap up their fiscal year. With little known outside of Animal Crossing in March, Nintendo might be in for another big year with a rumored Switch Pro due out as well as what huge tent pole games will be released in fiscal year 2021. We are hopefully not to far away from a Nintendo Direct giving us a taste of what’s to come in 2020.
EA Earnings
Electronic Arts also had some information to share with the class regarding their sales for the three month period ending December 31st, also known as Q3. It was a great quarter for EA as their earnings were over their expectations and saw excellent growth vs Q3 in the year prior. This is in large thanks to some very well received released live service games this year which continue do to well along with a new success stories. With such a strong Q3, EA has also increased the overall projections for the year for the second time. In just the Q3 alone, EA has seen its share price rise from 96.75 on October 1st to just under 114 on December 31st This is an almost 20 percent increase in just the past three months.
A large part of that success is in thanks to Respawn Entertainment and more specifically, Star Wars Jedi Fallen Order. As we already talked about a few weeks ago when looking at the NPD reports for 2019, Fallen Order sold very well. It was the second best selling game for the months of November and December, only trailing the juggernaut that is Call of Duty. It was also the sixth best selling game of the year in addition to making many best of lists of the year. Good critic scores and positive word of mouth helped this game see great success. According to Andrew Wilson CEO, Fallen Order “sold beyond our projections”. That wasn’t the only bright spot in the Star Wars universe as they also highlighted Star Wars Battlefront 2,
You heard correctly, Wilson elaborated “Two years and dozens of content updates later spanning all three trilogies and more, critics have re-reviewed the game to high scores, player sentiment is exceptional, and the Celebration Edition helped to drive performance for Battlefront II that was significantly above our Q3 expectations” I, myself haven’t played the game in a few years but it’s nice to see when games don’t give up on their fans like Battlefront 2 or No Man’s Sky.
One of EA’s most consistent live service games was Apex Legends. With a new season launching next week, it’s impressive to see the steady growth this game has received after seeing the initial wave of players normalize. According to Wilson “ Season Three was bigger than Season Two with higher peaks in daily active users” I also feel like this is a trend that will continue based on the anticipation of season 4. Based off the cinematic trailer on the official Apex Legends YouTube, people are very interested as the video currently has over 5 million views in just a few days. On a side note and self promotion, we took a very close look at the trailer, gave our impressions and found 15 things that you might have missed. If you’re interested in that I’ll post a link In the description.
The other thing that they announced about Apex Legends was that they plan to bring the game to additional platforms in FY2021 which starts April 1st. The options that could be would be mobile, similar to how PUBG and Call of Duty have seen success on that platform. Another option is bringing Apex Legends to Google Stadia which would be an interesting move to bring a battle royale to the service, which would make it the first one of the genre to be on Stadia which would be very high demand. Unless EA has some cloud gaming service in its pipeline, it would make sense to offer their products on other services, similar to how EA Access is coming to Steam. The final and most hopeful new platform for Apex Legends is most likely the simplest answer and that is the PS5 and the Xbox Series X. The game already runs great on the consoles but to add increased frame rate and visual fidelity would be a welcome addition. Having a free to play game ready for the launch a of a new console is a great idea for EA as the cost of purchasing a new system is high enough.
One of EA’s pillars that continues to do well and that is their sports segment. For starters this year’s edition of Madden was the best selling game ever in the franchise which is impressive and no doubt aided by the fact that it released about a month earlier than normal. This was a smart move by capitalizing on the hype fans have during pre season as well as the usual lack of games to spend money on during the slow summer months. FIFA has been EA’s most consistent franchise for a long while now and things continued on that front with that franchise showing growth year over year.
Across all their segments of their portfolio it’s clear that in addition to games like Fallen Order that don’t feature live service aspect they are going to continue to keep the focus on live service games for the majority of their portfolio for the foreseeable future. Andrew Wilson closed by saying “ Live services are delivering value for players and continuing growth for our business. Our teams are among the best in the industry at this – constantly building on feedback to expand and enhance the experience for players. With content updates and in-game events in Ultimate Team, creative and original new Seasons for Apex Legends that expand the game and its characters, new content in The Sims 4 that continues to add player choice, and more content across our top mobile titles around the world, live services will continue to be a key focus and growth driver for us in Q4 and the year ahead”
As for what the near future holds for EA, Blake Jorgensen, COO and CFO said “Looking forward to fiscal 2021, We anticipate live services to be the primary growth driver, followed by the launch of new content across a broad range of genres. We’ll launch four sports titles, including new games in our blockbuster FIFA and Madden franchises, four other titles that draw from the breadth of our IP, and we’ll also publish four more titles globally from smaller developers. Finally, we expect two new mobile titles to make it into soft launch”
Mixed Goods
One of my most anticipated games of 2020 is Ori and The Will of The Wisps riding firmly on the shoulders of the first game from Moon Studios. The bad news is that the game has been delayed multiple times and was even pushed out of the last decade. The good news is that the official Ori Twitter posted that the game has gone gold ahead of its March 11 release date, which means that the game can now be sent off to production. Any issues or bugs that arise from here on out can be fixed with a day one patch.
Ori and the Will of the Wisps will be available on launch day on GamePass but in the case you aren’t subscribed you will also be able to purchase it for the steal price of $29.99. As mentioned it was featured as one of my most anticipated games of 2020 and if you’re interested in that read then I’ll post a link in the description.
Related to EA and their commitment to live service games, this week Sony announced their PlayStation Plus games for the month of February and one of the games is the Sims 4. This game has been out for a while now as it came out first back in 2014. However the game has received a steady cadence of updates and expansions since then. Based on the EA earnings report they have seen success with the free to play model of Apex Legends and figure the best way to sell additional content is to remove the entry barrier for a game that is almost six years old.