Inside Xbox

Up until this point, it has seemed like Microsoft has been doing everything right when it comes to the reveal of the Series X. The cadence and the messaging thus far has been near perfect, in my opinion and in many other and has left many wondering why is Sony staying so quiet about the PlayStation 5. It started with the official reveal of the name and the form factor at The Game Awards in December of 2019, then as time passed, followed up by some press releases on the Xbox Wire and most notably was the spec reveal, which Xbox smartly partnered with popular YouTube technology personalities Digital Foundry among others.

Early this week, Microsoft announced their initiative for the rest of the year and how they plan to fully reveal the Xbox Series X to the world. The plan is called 20/20.If you want to read all about their plan, then check out the Xbox Wire for the whole post from Corporate VP of Gaming Marketing, Jerret West, but the basics of the plan is to have a showcase every month until the release of the Series X. One of the major quotes from the release was saying “our goal remains to launch Xbox Series X and Halo Infinite this holiday”

Microsoft is very aware how a killer app can move hardware, especially a series like Halo, if it is able to rebound after a few less than well received entires with Halo 4 and Halo 5 or since Bungie departed. Both of those games weren’t bad by any means but just didn’t capture attention that the series was known for. It also doesn’t say that Halo Infinite and Xbox Series X will launch together, just the mention of both launching this holiday. As it has sounded so far from Phil Spencer in some of his interviews that the development studios are having the harder time working in these unprecedented conditions.

Refocusing on the 20/20, the plan is to give the fans more information, as the article says “including what’s next for Xbox Series X, Xbox Game Studios, Xbox Game Pass and Project xCloud. Every month will bring something different” The first showcase that has been announced was earlier this week and would be focusing on third party games with many Xbox executives making post on social media hyping up the event. One of the main ways that this showcase seemed like a slam dunk was that it was going to be anchored by world premiere gameplay of Assassins Creed Valhalla, which anytime you have a new entry in the Ubisoft franchise you will garner plenty of attention.

Looking ahead the post also laid out its plans for July and how it will be focused on first party games from some of the teams at Xbox Game Studios. Microsoft was busy during this current generation taking their lumps for lack of exclusives and tried to remedy that situation by acquiring plenty of studios to help bolster their first party offerings. However, don’t expect to see what every single studio is working on as the post does mention “some of those teams”, This seems like a good way for the company to get ahead and manage expectations decently, which we will learn just how important that is for Microsoft in a couple of minutes. As for the rest of the 20/20 showcase, we don’t have any more specific details, which is interesting that July was discussed but no details on June were given. This could potentially be the replacement for E3 timing which would lead to pricing and date announcements but at this point in time just seems like wishful thinking.

I thought that the reaction was less than positive around the gaming community but I didn’t think it was a consensus that it was dreadful but Aaron Greenberg, GM of Xbox Games Marketing reacted swiftly when someone addressed some of the concerns on twitter, specifically the lack of gameplay from Assassins Creed Valhalla. It could have been ignored but Greenberg responded by saying “Clearly we set some wrong expectations and thats on us. We appreciate all the feedback, and can assure you we will take it all in and learn as a team” I think Greenberg and essentially Xbox coming out and saying that publicly means and lot and with a month between the June and the third party showcase in July, Xbox should start by coming out now and say what to expect for the next one but they didn’t, which leads me to believe that they will be more prepared and have better fan service for the following events. I also respect that this wasn’t an apology from Microsoft, but instead more of an acknowledgement.

As I started off by saying many people are wondering why Sony has been relatively quiet during these past few months and maybe its possible that this is all part of the plan that worked pretty well for them leading up to the PS4. At the start of last generation it was all about not being able to sell used games and DRM. It sounded like both companies would be following the same plans and that the used gaming market would cease to exist as we knew it, however it was Microsoft who was the loudest about that feature and when the timing was right, Sony came out and gave a simple display of handing a game to someone else. Sometimes saying nothing is more important than saying anything.

There is also the added benefit that Sony is able to see the reaction that fans have regarding these Microsoft showcases specifically and are able tailor their announcements featuring improvements in areas that Microsoft receives backlash from. Obviously, there is no way to know if that is what is actually happening or if I am just giving Sony too much credit for remaining mostly silent.

Overall, I thought the Assassins Creed cinematic trailer was better than what we saw at Inside Xbox. Coincidence or not, the games the selected to show had a much darker tone, which could just have been what looked best and what was ready to display from third parties or could possibly be an indication that Xbox is planning on targeting the hardcore gamer more. My favourite game from the showcase was The Ascent which looks like Diablo with cyberpunk flavour, I am a huge fan of dungeon crawlers and top down games in the vein of the old housemarque titles. Finally, I think this would have been much less of a negative reaction from fans if they opened with a anticipated or surprising third party game from a AAA studio and/or if they would have actually finished with a great look at Valhalla.

Up until this point, Microsoft has earned lots of credit with gamers for how they have approached the Series X reveal, and this slight bump in the road is hopefully just that, a bump in the road. There were plenty of fair-weather fans who turned quickly on Microsoft after the event. I wasn’t blown away by anything in the showcase but I always wasn’t disappointed, but Microsoft, in the Phil Spencer era have just been doing too many things positive for me to think that this was anything but a slight messaging issue.

Nintendo FY2020

With the official financials from Nintendo’s past fiscal year revealed we learned a few things that we will talk about. First this was a pretty great year for Nintendo as the Switch really hit its stride and secondly, due to the current global situation things are looking down this fiscal year for Nintendo and for the fans. Nintendo identified to shareholders how the Covid-19 has impacted the company in almost all areas from logistics including parts procurement, production and shipping. As well as other collateral areas including research and development, consumption habits, and foreign exchange.

Combing through the financials, Nintendo posted improvements in all areas minus a few insignificant categories. The most important categories including sales, posted a nine percent improvement from the previous year and net profit, posting a thirty-three percent increase. The main reason why these two numbers aren’t in sync is because Nintendo has been steadily seeing growth in its digital sales, which was up a staggering seventy-one percent with room to grow.

Digital sales accounted for thirty-four percent of the companies total software sales and this was an increase of over nine percent from the previous year. Breaking down those digital sales we see that the total was two hundred and four billion yen with 70 percent being games that are available physical as well. The remaining thirty percent of digital sales is split between E-Shop only titles, DLC and Nintendo Switch Online Subscriptions.

These numbers can grow because Nintendo Switch Online subscriptions can increase, Nintendo can be more timely with DLC for their flagship titles and therefore increase sales. Finally there is also the assumption that moving forward brick and mortar stores will reduce their footprint and with the current state of the world and how people have accelerated their adoption of digital downloads, the digital format might be the preferred method moving forward for many.

To get an idea of just how well things went for Nintendo this year, you need to not look further than Animal Crossing: New Horizons, which in the eleven days that it had at the end of FY20, sold almost 12 million copies. Nintendo also managed to add numerous games to it’s million seller list which now includes 27 titles with 18 of those being first party. In FY20 new games added to that list include Astral Chain with 1.08, Marvel Ultimate Alliance 3 with 1.08, Pokemon Mystery Dungeon with 1.26, Ring Fit with 2.73, Fire Emblem Three houses with 2.87, Link’s Awakening with 4.38, Super Mario Maker 2 with 5.48, Luigis Mansion 3 with 6.33, Pokemon Sword & Shield with 17.3 million and the aforementioned Animal Crossing.

That is an impressive list for Nintendo with a few things catching my attention. Having Pokemon and Animal Crossing sell at such high numbers is astonishing, which means almost half of the Switch owners bought the Pokemon and over twenty percent of Switch owner bought Animal Crossing in its first eleven days. Link’s Awakening only selling 4.38 million seems a little underwhelming for a Zelda title, even for a reimagining. Even Breath of the Wild sold more copies last year with 4.64 million, and that is in its third year. Its also impressive to see Ring Fit sell pretty well for a premium priced entry due to its inclusion of the resistance ring. Nintendo succeeding on these experiments leads them to try more experiments which is always great for gamers. Lastly, it was great see Luigi’s Mansion do so well with 6.33 million and that makes it the third highest selling new release of FY20, which is deserves due to the attention to detail that game received.

It wasn't all good news for Nintendo as there were some glaring problems with their earning call. The first is that due to the current pandemic and the effect it has had on all aspects of their company, mainly logistics means that moving forward they have forecasted a down year compared to the one that ended March 2020. As previously mentioned, the Switch sold over twenty-one million units in FY20, which was a massive increase from FY19. It’s unfortunate for Nintendo as they were really hitting their stride three years into the consoles life cycle. However, Nintendo isn’t reducing the forecast drastically, as they are expecting to sell 19 million units in FY21, which is still an increase from FY19 and even an increase over the original projections for FY20, which was 18 million units.

Looking at software there are two issues, the first being that projections, similar to hardware, are looking down compared to FY20 and more importantly, as of right now we don’t have a lot to look forward to. Software proejctions for FY20 were originally 125 million but after a great third quarter, Nintendo revised those and increased their projections to 140 million. As I already mentioned, Nintendo blew their software projections out of the water, largely thanks to some surprise hits and Animal Crossing being a cultural zeitgeist at the right moment as Nintendo ended up selling over 168 million software units this past year.

In the earnings report, the projected release titles from April onwards includes the same to be announced games that sat on the pages at the last few earnings reports and that includes Bayonetta 3, Metroid Prime 4 and Breath of the Wild sequel. Combine this with the speculation that Nintendo is postponing their flagship June Direct and this may be a very dry year for Nintendo. However, I still expect the majority of those rumoured Mario games to release this fall for the 35th anniversary.

As unfortunate as it is that Nintendo doesn’t think it will be able to match those numbers in FY21, they are still at the same level as their heightened revision after third quarter which means they are still planning on selling software. This means that they are going to have to release some new games that we don’t know about yet because I don’t think they are going to be able to sell 19 million units of hardware and 140 millions units of software if they are not enticing new and existing customers with great new experiences.

Nintendo likely has more planned for 2020 than just the speculation of Mario’s. 35th anniversary, even with the current global situation. I think that they plan to compete with Sony and Microsoft for gamers attention this fall but I don’t think they want to directly compete with them. I think Nintendo is waiting until Microsoft and Sony unveil their release dates for the PS5 and the Xbox Series X, which will then allow them to plan release dates for their important titles around those launches.