News Game Plus (February 17-23)
Coronavirus and Gaming
In a rather small and interesting way of giving us this news, Sony made an announcement on the PlayStation Blog, that they would not be attending PAX east. “Today, Sony Interactive Entertainment made the decision to cancel its participation at PAX East in Boston this year due to increasing concerns related to COVID-19 (also known as “ coronavirus”). We felt this was the safest option as the situation is changing daily. We are disappointed to cancel our participation in this event, but the health and safety of our global workforce is our highest concern”
This outbreak is currently a huge concern for everyone around the world as with frequent travel we are constantly interwoven with each other. This virus is also going well beyond video games and into health concerns, which is the primary concern to be clear. This is a very serious issue that is affecting thousands of humans that have caught the virus but also many quarantine areas for people who may have been around it. We are currently lucky as it hasn’t really made its way to North America in larger sense.
The current issue the virus is that it’s starting to affect the worldwide economy. Many businesses in many different sectors are slowly getting affected by it as almost everything made today has some connection to China. It could just be things as small as a microchip or a whole factory that assembles the product completely.
The majority of the stock market has been trending downwards with concerns of how the virus will be affecting the bottom line. According to an article by Fred Imbert of CNBC it looks as though losses are certain with the latest virus outbreaks “China's National Health Commission reported more than 75,000 confirmed cases and over 2,000 deaths on the mainland. More than 800 new cases were reported in China overnight. South Korea has also reported more than 200 cases”
The more this virus spread without containment, the more damage it will have on the economy as companies will be forced to adjust logistics.
Nintendo has already been affected by announcing that there will be some shortages in the Asian markets with the new Animal Crossing Edition of the Switch as well as the surprising hit, Ring Fit Adventure. However, it seems that trouble for Nintendo might not stop there as Bloomberg recently ran an article that had inside sources that say further delays worldwide are a possibility.
A Nintendo spokesperson told Bloomberg “We do not see any major impact on the shipment to the U.S. currently, but we will remain vigilant and take steps if necessary. It’s possible the supply would be affected by the virus if it becomes more widespread and prolonged.”
As for the news of PlayStation skipping this is clearly unfortunate news as this would be the first time the public would have had the chance to play The Last of Us 2 among other games that aren’t released yet. Other highly anticipated games Sony was bringing to the show included Nioh 2, Doom Eternal, Iron Man VR, FF7 remake, Predator and Spelunky 2. As with the last of us, this would have been the first time the public has been able to get hands on time with a lot of these games.
Although, as the dangers from the spreading virus continue to rise, it just doesn’t make sense to risk lives to show a few new games as there will be plenty of other opportunities . I’m sure that a lot of the employees who would be taking part in PAX will have large part to play in the launch of the PS5 and you want to make sure that they are able to fully commit to that among remaining safe.
There hasn’t been a State of Play since December 10th so maybe once they decided they weren’t going to be attending the show they might have switched focus to producing a new episode. Most likely a new State of Play was already being worked on but this might have fast tracked it or at the very least added some new content to it. With the average time between the shows being 2-3 months we are likely to see one sooner than later especially with a lot of big titles coming mid March including Nioh 2, MLB The Show and Doom Eternal.
These are just the early implications of how we are being affected on a worldwide scale but as I said earlier the more serious issue at hand is how human life is being touched by the virus. Hopefully the rumors that the virus is slowing down is accurate.
Animal Crossing: New Horizons Direct Highlights
With many Nintendo fans wondering what companies plans were for 2020, the fever pitch was at an all time high. At Nintendo’s earnings report a few weeks ago there wasn’t much talk about 2020 with only Animal Crossing: New Horizons being the only major title with a firm release date. After that the only other two titles that are currently listed as 2020 are Xenoblade Chronicles: The Definitive Edition and Bravely Default 2. Nothing against those two games but those aren’t system sellers in the traditional sense. That kind of release line up isn’t going to do much to help with your stock price either.
Just a few days before the report, near the end of January, the stock was trading at 49.73 and as of closing this week it is currently at 44.35. This is almost an eleven percent drop in just over a month which is troubling. There are most likely other factors involved but the two main issues appear to be virus concerns and the non existent 2020 release schedule.
As I mentioned before, I fully expect Nintendo to have some huge first party titles this year. The most likely possibilities including a Metroid Prime Trilogy, Breath of the Wild sequel, mainline Mario game or even possibly the next Mario Kart. I would love to see them bring back the double dash mechanic of having two racers on a kart. All of these games are major system sellers and with Sony and Microsoft both releasing new consoles this year, Nintendo needs to be competitive.
Back to the matter at hand, Nintendo announced their first major Direct of the year with a focus on Animal Crossing: New Horizons. This was an in depth look at the latest entry in the franchise that is due out in less than a month on March 20th. The same day that Doom Eternal is being released and I am looking forward to both. With the release date approaching fast, Nintendo did a very deep dive on all the features including in New Horizons. The Direct was almost half an hour and if you are a hardcore fan, you might want to enjoy every morsel but that’s a long time to listen to them list off the features. We actually dissected the video into under 4 minutes featuring the biggest takeaways from the Direct. If you missed it or didn’t want to spend half an hour then you can check out our video, the link will be in the description.
To give a quick recap when you start the game you will select your island layout and the hemisphere you are in. Both of these choices don’t have much weight but they do add a small amount of personal touch to your island.
When you first get to the island you will be given shelter to set up along with a few basic items. After that you will need to make your way to resident services where you will the vendor area as well as the initial crafting area. After that and obviously after earn enough currency you will be able to build a house, expand on it and decorate it as you like.
There is an airport on the island, which will be how you invite friends either locally or online and it will also be the place where you can send items to friends. When you invite friends you don’t have to worry that they will destroy your island as only people who you deem as best friends are allowed to use tools. The airport will also be the place where you fly to other deserted islands in search of unique items for selling or crafting.
In terms of multiplayer, you can play up to eight people on the same island. Using one Switch and one game you can play four at a time and with another system and game you will be able to have all eight at once. Of course, you can all just come and go as you please.
Depending on the season you will be doing different things such as in the winter you will be building snowmen and in the fall looks like you will be harvesting. In terms of seasons, it looks like there will always be plenty to do on the island with free updates based around dates like Easter, Halloween, Thanksgiving and Christmas. This is kind of in the vein of a live service game with events to keep you engaged in the ecosystem.
One of the big new additions is the Nook Phone, which will be your hub for almost everything. You can design on the phone, use the map on your phone, and use the phone to get rescued in case you get stuck or lost. However, the most important item on the phone is the Nook Miles App which is basically your progression system where you can earn miles for completing tasks and activities. These miles can then be redeemed towards items in the game or even use to pay down your debt.
Finally, to truly personalize your island you will have to get construction permits. These permits will allow you to landscape by adding different types of paths and bridges around the island. There are also permits for waterscaping which are exactly what they sound like and allow you to alter the terrain to change the flow of the bodies of water around the island.
There are plenty of new additions to New Horizons but those were the biggest takeaways from the Direct. While we now know a lot more about Animal Crossing, we are still very much in the dark about the rest of Nintendo’s plan for 2020. This leads me to believe that it most likely won’t be too long before we get another Direct featuring the first half of their plans for 2020. I don’t know that they would want to take attention away from Animal Crossing, so I would expect a new Direct shortly after the release of New Horizons.
GameStop Structure
It’s no surprise that thing haven’t been great at GameStop for a while with many factors leading to its downfall. The rise of digital storefronts, the ease of buying everything from Amazon, and your local Walmart or Target carrying everything GameStop does. All of these other options come without one thing. Pressure. Pressure to pre order, or protect the disc, or purchase the strategy guide or upgrade your membership or anything they want to force upon you. It feels like purchasing a used car from the minute you walk in the store. This week Colin Campbell from Polygon ran an article that talked about what it’s been like being on the inside of the company during their downfall including store closings, layoffs and troubling earnings reports. Check out the full article as its a very interesting read.
Even at their last earnings report which we talked about that covered the holiday period including Black Friday and Christmas, sales were still way down. An initial concern was that due to the console cycle coming to an end sales would be down but that holiday sales should at least be a place to hang your hat. Polygon connected with multiple employees from entry level sales to store managers to previous executives.
One store manager said “My store is well known for solid sales performance. But customer traffic has dipped significantly in the past two years. Aside from some expected high-traffic days like Thanksgiving, Black Friday, and major game release days, we’re missing our daily sales plans almost every single day.” With another manager with retail experience is expecting closures of over a thousand stores in 2020 to help cost cutting measures.
The gaming market is massive and only getting bigger every year with NPD reporting sales growth in the US by about 6 billion every year to a projected 44 billion in 2019. The problem with GameStop is that without solid sales from gaming they are turning their attention quickly to anything that will generate income. Rather than try to figure out what the root of the problem, which in my opinion include including high pressure sales, unfair trade values, poor store design, abundance of brick and mortar and a lack of competitive e storefront to compete with other online retailers.
According to the article “The company is doubling down on its efforts to find other high-margin activities, such as used hardware. The firm buys old consoles, smartphones, and tablets, and then refurbishes and sells them on, often to distributors overseas”
I think this is an unfortunate pivot away from what has been the success of the company and is a different direction than the company has said publicly at earnings calls. While foot traffic and sales are down one store manager says their store could have performed much better “The reason we didn’t make sales over the holidays was because we ran out of everything: games and systems. My store alone could have made a ton more money on Christmas week if we just had some systems in stock. I don’t know if this is because GameStop didn’t order enough but it hurt us.”
Some of the people who spoke with Polygon, explained that the rise in free to play games as a service as the reason people aren’t buying games anymore. Without a doubt there is a large wave of games cut from that cloth but single player games are still selling very well. Recent examples include games are that are selling over 10 million including God of War, RDR2, and Spider Man. Pokémon Sword and Shield also sold almost 17 million in a few short months. There is plenty of data to prove that not only is gaming trending upwards in terms of sales but that single player games are also doing extremely well.
I used to be a very loyal customer to GameStop but too many times I felt pressured to buy things that I didn’t need. Over the past couple of years I have maybe been into one of their stores twice but the last time I was in was around a year ago and I don’t think I will go back. Every other way to buy games is easier and there is no added benefit to purchasing from GameStop. You used to actually talk games with the employees and get recommendations now it’s just a hard sell from the minute you walk in the door.
I’m not sure if GameStop along with their planned new directions can save the company but with what is publicly coming out of the company and what is privately coming from the company, it doesn’t look promising. As for the next generation of consoles, I am most likely going to be ordering those off Amazon. I have to think that I am not the only customer that won’t be buying my consoles from GameStop. The next generation launch might not be the life preserver that GameStop is expecting.