This Week in Business is a collection of stats and quotes from our sister site GamesIndustry.biz that sheds light on console sales, new trends, and more. Check back every Friday for a new entry!
Remember when games used to be hailed for their addictive qualities? Tetris, Civilization, Diablo? We had the occasional "player dies after marathon gaming session" story to remind us that wasn't an especially healthy thing, but people generally weren't getting up in arms about it, either. Publishers even touted how addictive its games were in playful ad campaigns.
But then things changed. The industry began to roll out business models that gave it a stronger financial incentive to keep people playing. Digital distribution and microtransactions let publishers make more money from a player who sunk months into a game than one who bought it and played it for a weekend. Suddenly, the focus wasn't on upfront sales numbers but on engagement and keeping butts on the servers.
These days practically the entire industry (outside of the indie ranks) is built around it. This week, Activision Blizzard reported that barely 20% of its revenue last quarter came from the sales of products like Call of Duty: Black Ops 4 or Overwatch. The rest, an amount four times as large, came from subscriptions, downloadable content, and microtransactions (along with licensing royalties and other miscellaneous revenues).
Unfortunately, in prioritizing engagement as its path to monetization, the games industry has taken a number of cues from the casino industry, another group of people doing their best to deeply engage customers that also happens to have a vested interest in creating addictive behaviors in their customers.
The rest of the world has taken notice, from the World Health Organization codifying "gaming disorder" as a diagnosable condition to the U.K. Parliament's Digital, Culture, Media and Sport (DCMS) Committee recommending banning loot box sales to children. And as our lead quote this week shows, some in the publishing community are starting to come around as well.
QUOTE | "Whether you think these are drugs—and by the way, I'm not against drugs at all—but if we're going to be drug dealers, let's offer people psychedelics. Let's offer people something that's going to help them expand and grow. Let's not offer them crack-cocaine. Let's not offer them meth. Let's not literally mine for addicts." - Devolver Digital and Good Shepherd Entertainment co-founder Mike Wilson makes a plea for developers to "be intentional" about what they offer players and not let their work be used to addict and exploit vulnerable people.
I like Wilson's comparison of game developers to drug dealers not only because it required a bit of honesty and reflection about what the industry is doing, but because it acknowledges the double-edged nature of games. Like drugs, they can help people or hurt them. Developers have spent decades talking about the incredible power of games: to entertain, to build communities, to educate, to make a difference in the lives of the people who play them. But that power isn't inherently good, or inherently bad. It's just power, and as such it needs to be handled with forethought and care.
It sounds like Wilson has figured that out. Let's hope the rest of the industry follows suit, and maybe re-thinks some of its past messaging.
QUOTE | "I don't want to say this is what PlayStation Now is going to be like forever. But certainly right now, given how some of our first party IP is incredibly special and valuable, we just want to treat them with amazing care and respect, and have those launches be clean and pure." - In a wide-ranging interview, PlayStation CEO Jim Ryan explains that he doesn't want to get Sony's big first-party launches all filthy and debased by having them available in a service like PlayStation Now.
QUOTE | "It's fine wanting these diverse standards now, but unfortunately there just isn't that diverse a work-pool to draw from. We have to start earlier. We have to start getting out there and contacting education, and changing it at that level." - PUBG Corporation's Brendan "PlayerUnknown" Greene questions studios holding up even gender splits in the workforce as a goal. He believes the industry needs to get more women interested in a career in games first, but doesn't address how treatment of the women already in games might be undermining those efforts.
QUOTE | "Every time we do deals that make developers disempowered, we do bad for our industry. We all have to sit and eat here, so it's like shitting in the pool you're swimming in. We're all in the same pool!" - Whitethorn Digital CEO (and self-described socialist) Dr. Matthew White says everything in the industry relies on developers making games, so predatory tactics from publishers are ultimately self-defeating.
QUOTE | "Our sincere hope is that other studios are inspired to follow our lead and realize that diversity in entertainment is more than just a check-box. It's a way to achieve high quality, authentic results and expand sales into new demographics and audiences, which are growing by the day, while telling unique and compelling stories." - Brass Lion co-founder Manveer Heir talks about the new studio, which will create games centered on black and brown characters, cultures, and stories.
OK, you may have noticed we didn't talk about Blizzard and its ban of Hearthstone pro Chung "Blitzchung" Ng Wai up top for once. After a few weeks of leading with that, I'm ready to not talk about it any longer. Unfortunately, Blizzard refuses to cooperate, continually digging itself a bit deeper each week, so here's a bunch of quotes and stats related to that continually unfolding debacle on the off-chance you're not sick of it yet.
QUOTE | "We are not." - J. Allen Brack responds to a question about whether Blizzard is lifting its ban on Blitzchung in light of his public "apology" at BlizzCon.
QUOTE | "Brack's opening statement of BlizzCon was not an apology for banning Blitzchung. It was not a change in policy or enforcement. It had no substance." - Me, agreeing with Brack's assertion in his BlizzCon statement that the company's actions matter more than its words.
QUOTE |"..." - Take-Two Interactive's Strauss Zelnick, declining to comment on the NBA 2K League's policies around players commenting on non-esports issues. (It's toward the bottom of the article.) While esports companies like Riot Games and Blizzard forbid such expression, the NBA has been vocally supportive of its players speaking out on the issues they care about.
QUOTE | "By allowing white supremacists refuge, companies inadvertently create safe harbors that extremists can leverage to recruit and indoctrinate other people while also degrading the enjoyment of their own fans." - United States congressman Lou Correa questions why Blizzard has allowed racist and anti-Semitic groups to continue operating in its games.
STAT | 38% - The year-over-year decline in Blizzard's revenues for the three months ended September 30 (just days before the Blitzchung ban). While the rest of Activision Blizzard was also down, Activision's 47% slide in revenues was partially attributable to losing the Destiny franchise earlier this year, and King's sales were only down about 1%. Also concerning for Blizzard is that its lackluster performance was already boosted by the launch of World of Warcraft Classic, which drove the largest quarterly increase in subscribers in the game's 15-year history.
STAT | 0 - The number of appearances Hearthstone made in Twitter's country-by-country lists of the top 5 most talked about games on Twitter for October, despite the controversy surrounding the Blitzchung ban.