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NEWS: Microsoft Closes Tango Gameworks Studio


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light turner



Joined: 13 Aug 2022
Posts: 123
PostPosted: Wed May 08, 2024 6:21 pm Reply with quote
BadNewsBlue wrote:
Maybe I might be misremembering but when Hi Fi Rush was first revealed didn’t some people knock it for essentially being an uninspired knock off of Jet Set Radio?


Yes. And then Bomb Rush Cyberfunk came out later in the year which was even more like Jet Set Radio from what I've been told. I haven't played either game and never touched The Evil Within either to know how it compares to classic Resident Evil either but I've also heard some mixed things as well and it clearly wasn't a breakout hit. Even name-brand series are struggling these days and under performing so it's not like titles like Final Fantasy are guaranteed successes either.

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ATastySub wrote:
Pretty much 100% of this post is absolutely nonsense, but I really wanted to highlight this part. You know, the part where companies literally helped out the rental industry by inflating the difficulty of games (especially arcade ports which were already meant to be quarter eaters) so that they would have to be rented multiple times and therefore encourage rental stores to buy copies of them. Your reality sounds fun to fantasize in though, but maybe shouldn't be near any serious discussion of the games industry and how it operates.


If you're going to act incredibly condescending and snarky you could at least make sure you're right before doing so.

For a game like Battletoads and Dynamite Headdy with limited continues, the reason likely comes down to the rental market. Masato Maegawa from Treasure even said as much when talking about Dynamite Headdy’s difficulty. If your game could be completed comfortably in a weekend, you ran the risk of people renting it, completing it, then never making a purchase. In order to prevent sales from being affected by this, cheap tactics, like the limiting of continues, were used to ratchet up the difficulty and prevent players from actually finishing the game. Video game rentals were basically outlawed in Japan thanks to the 1984 Japanese Copyright Act, which means that Dynamite Headdy and Battletoads could ease up on the artificial challenge without the fear of it costing them sales..

https://www.destructoid.com/a-look-at-the-early-days-of-regional-difficulty-changes/

Whether they've played it or not, most gamers know that The Lion King is hard, but what most people don't know is that the developers made the game extremely difficult on purpose. Disney actually told the developers to make the game so difficult that people wouldn't be able to beat it during a rental period. The game came out when rental stores were immensely popular, and Disney didn't want people to get more than halfway through the game so that the chances of them buying it would be higher. The developers disagreed with Disney's decision, but went back and tweaked the levels to make things more difficult even though the game targeted a younger audience. A few developers would later apologize to fans for how hard the game is.

https://www.cbr.com/lion-king-brutally-difficult-platformer/

Let's not forget Nintendo's entire crusade against the rental industry with lawsuits and litigation back in the late 80s and 90s. I have no idea why people would think video game companies would love the idea of people beating their game in a rental weekend instead of buying it.
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jdnation



Joined: 15 May 2007
Posts: 2007
PostPosted: Wed May 08, 2024 7:09 pm Reply with quote
enurtsol wrote:
Sony has their own problems: its very low profit margin. That's why it recently lost $10 billion in stock value and fired 8% of their workforce - despite all their recent successes. Sony's profit margin dropped to a decade-low 6%, down half from the usual 12-13% years ago.

Due to very high development costs of their games, the sales of the games are not keeping up with the costs. Spending $200+ million and many years developing for just 6% razor-thin margin is dangerous - if something goes just a bit wrong, for all that work and all that time, that 6% could easily turn into negative. That's why Sony is now delving into live-service games (GAAS) and making more of their games nearer multiplat with PC (Helldivers 2 released on PS5 and PC same day). If all their successes still necessitated firing 8% of their workers, can you imagine if that 6% margin turned negative?

"Sony plunged $10 billion after its PS5 sales cut. But a bigger issue is its near decade low games margin"

https://www.cnbc.com/2024/02/19/sony-gaming-margin-questioned-after-ps5-sales-cut-sparks-stock-plunge.html
Quote:

  • Around $10 billion of value was wiped off Sony’s stock this week after it cut its sales forecast for its flagship PlayStation 5 console for the fiscal year.
  • But analysts, who already thought Sony’s PS5 target was too lofty, told CNBC a bigger issue for the Japanese tech giant is the company’s declining margins in its key gaming business.
  • Analysts are questioning why Sony’s gaming margin is not higher despite higher-margin products like digital sales of games and its PS Plus subscription service.


But analysts were watching another key metric — the operating margin in the gaming business — which came in just under 6% for the December quarter, according to a CNBC calculation. By contrast, Sony’s operating margin was more than 9% in the December quarter of 2022.

“The shipment forecast cut for PS5 ... is not what is disappointing ... What is disappointing is the low level” of operating margin, Atul Goyal, equity analyst at Jefferies, said in a note to clients on Wednesday.

He added that prior to the January-to-March quarter of 2022, margins at the gaming unit were around 12% to 13% in the previous four years.

The latest quarter’s single-digit margin for Sony is present “despite various tailwinds that should have driven up the margins towards 20%,” Goyal said, adding that the situation is “extremely disappointing.”

These tailwinds include sales of its first-party games, which are increasingly in the form of digital downloads, in addition to its high-margin PS Plus subscription service, which commands around 50% margin, according to Goyal.

“Their rev (revenue) on digital sales, add-on-content, digital-downloads are at all time highs… And yet their margins are at decade-lows. This is just not acceptable,” Goyal said in an email to CNBC.


Goyal qualified that the current margin for Sony’s gaming business is “almost near decade lows.”

Toto said that part of the reason why margins are being squeezed more recently is that software production costs have been rising.

“Spiderman 2,” which came out last year and is produced by Sony-owned Insomniac Games, cost around $300 million to make, according to gaming website Kotaku, citing an internal presentation that was leaked after a ransomware group hacked the company.


Sure, but there is a big differentiator.

Sony has enough consoles on the market to make their 30% cut off everyone else. Significantly more so than Microsoft. So as a platform holder, they are fine, meaning their small profit margins on big budget IP are at least doing their job of moving hardware.

Their recent losses are a result of declines in PS5 hardware sales following historic highs. And they can't keep that momentum because they can't cut price because they can't cut costs and don't want to take losses on hardware. The other reason was no 1st party established franchises are expected to release for this next fiscal year.

Their rising internal costs are a concern, and they have cancelled long in dev projects like Last of Us Online, and laid off staff and shut down studios like London. As well their investment in Bungie and a few other GaaS titles have not turned out. Not to mention, PS5 isn't doing as well in Japan.

But they are certainly not in Microsoft's position, where PlayStation is historically in the red, and Sony's HQ relies on PlayStation and gaming as one of it's main pillars, unlike Microsoft, whose higher ups are perfectly willing to end Xbox altogether if necessary and it won't impact the company much, other than the loss of their only big hardware consumer brand, but which is at the bottom of their list of priorities.

In any case, the point is that Sony rightly saw the Gamepass model as not a financially viable service, considering their costs and how much they'd lose in otential sales. Microsoft's bitious titles would cost just as much.

The F2P model of games has also conditioned new gamers to not spend money on games. So Sony seems to be tailoring their Gaas services to a purchase up front strategy, such as Helldivers 2. And getting more involved with 3rd party exclusives from Square Enix and Konami to get more content without as big of an investment. Expansions into film and other branching media is also an option they are looking at to make the most out of their brands.

Basically, Sony is maintaining the exclusivity and retail release model they've always had, with PC ports and PS+ releases being limited and coming long after the fact, excepting consideration for 3rd party console exclusives and GAAS.

The high risk but low margins on titles like Spider-man are also looking to be amended by splitting the next game into two parts and separating online as its own thing to try and mitigate risk, according to the Insomniac leaks. Spider-man is a proven IP that sells, so they know they can expect a good amount of sales and adjust accordingly.
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enurtsol



Joined: 01 May 2007
Posts: 14778
PostPosted: Thu May 09, 2024 3:21 pm Reply with quote
AiddonValentine wrote:

Gamepass has been a bust, just like every other streaming service. All it did was train people to not buy games, gutting a lot of studios' ability to make profit and with its growth stagnant MS is feeling it.




Those are on Game Pass too, BTW.
Again, being on Game Pass doesn't prevent people from buying the game outright, whether on Xbox, PC or other platforms.


AiddonValentine wrote:

And like every other company staffed with incompetent executives, they're taking it out on the actual workers instead of themselves. There was nothing forcing them to shut down Tango, they're the part of the division that didn't suck while a lot of other ones are stumbling around drooling while eating paste (LOOKING AT YOU, STARFIELD!). Plus they're goddamned MICROSOFT, they can eat losses in the billions for their games division for eternity.


It's because MS gave Xbox a lot of money for acquisitions that they're expected to be on a shorter leash. And nobody but nobody eats losses for eternity, not even Sony, or lest we forget that this happened, despite Sony selling 21+ million PS5s in a year and tens of millions units of first-party games - YET they still the need to fire 8% of their workers and closing the London Studio (who btw just got a new renovated studio the year before):

"Sony announces plans to layoff 8% of gaming division workers"



So what's Sony's excuse for taking it out on the actual workers? Oh, just because they're expecting to sell fewer PS5s than the year before?
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jdnation



Joined: 15 May 2007
Posts: 2007
PostPosted: Thu May 09, 2024 5:39 pm Reply with quote
enurtsol wrote:
Those are on Game Pass too, BTW.
Again, being on Game Pass doesn't prevent people from buying the game outright, whether on Xbox, PC or other platforms.


The problem is Microsoft makes no money from sales of it's own games on Xbox.
Hence the need to make the games available on their competitor's platforms.
Also Microsoft is apparently, and logically, looking to add additional tiers and raise the price of Gamepass as a result.


Quote:
It's because MS gave Xbox a lot of money for acquisitions that they're expected to be on a shorter leash.


And it is apparent that this was conditional on it driving sales of hardware and subscriber numbers. It didn't, hence what is going on.


Quote:
So what's Sony's excuse for taking it out on the actual workers? Oh, just because they're expecting to sell fewer PS5s than the year before?


The layoffs had nothing to do with slowing PS5 sales after several record-breaking quarters and which would alleviate themselves a year later with possible price reductions and certainly more 1st party releases.

The layoffs were due to cutting down on expenses as game budgets were already high, as you pointed out, as well as industry-wide layoffs after over-hiring during the government lockdowns, while more people were gaming more, loans were cheap, and also due to some games/services underperforming and the natural result of cutting redundancies after acquisitions.

More details have emerged today regarding Microsoft's recent closures. Bethesda were told that 2 studios had to be shut many months ago, and apparently they chose Arkane and Tango, simply on the grounds that they had no big projects in active development, rather than kill studios that were actively invested in finishing big projects. Arkane was only busy trying to fix issues with their already-released game and deliver on promised DLC (which is now cancelled), while Tango was pitching Hi-Fi Rush 2.

So while Sony's lay-off decisions were more targeted at addressing certain issues specifically, Microsoft's recent closures were simply bad luck for these studios who drew the wild card of having completed their jobs. This indicates that Microsoft is severely trying to cut expenses in a way that Sony isn't, and doesn't see investing in them further for the precise reason of why they bought all these studios for in the first place - putting out steady content for Gamepass.
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BadNewsBlues



Joined: 21 Sep 2014
Posts: 5964
PostPosted: Thu May 09, 2024 7:34 pm Reply with quote
enurtsol wrote:
So what's Sony's excuse for taking it out on the actual workers?


Guess someone really wanted to put Singstars out of it’s misery.
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i got the shivers!



Joined: 30 Nov 2022
Posts: 77
Location: Brazil
PostPosted: Thu May 09, 2024 9:18 pm Reply with quote
enurtsol wrote:
Those are on Game Pass too, BTW.
Again, being on Game Pass doesn't prevent people from buying the game outright, whether on Xbox, PC or other platforms.


Starfield is another game that was cited as selling amazing despite being on Gamepass. Starfield was the best-selling game of September and instantly becoming the 7th best-selling game of 2023 in it's debut moth. Side note: Man, some of y'all really hate Starfield here though for some reason... Did it kick your dog or something?

I can see Gamepass hurting the smaller games that are only a few hours long and not a lot of people would be willing to pay full price for or only worth playing through once, but overall I've also seen tons of games do amazing despite it. It probably depends on the specific game. I would say it's like the 2 hour refund window on Steam. If it's a small indie game you can beat very quickly and refund it to get your money back then it'll hurt you but longer more in depth games it wont matter. Sea of Thieves, Call of Duty, or Starfield which people would spend hundreds of hours playing are safe from people just playing the game over the weekend on Gamepass then never touching it again. Just a theory though
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