Gaming News: Will Bungie (Destiny) soon be completely controlled by Sony? Business news of the week
Published on October 12, 2023 at 2:00 p.m
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This week in video game business news: Bungie's setbacks, the industry's possible resumption of growth, Game Stop's results… and some other information to keep in mind.
Summary
- The imminent end of the video game crisis? A developer says so
- Under this condition, Sony could take full control of Bungie (Destiny).
- GameStop: The decline of the famous video game retailer continues
- Coming soon to the business news of the week
The imminent end of the video game crisis? A developer says so
The year 2023 will not have been the kindest for the video game industry and, more generally, for the technology sector: layoffs everywhere, studio closures and other undeniable pressures have been widespread everywhere, resulting in a frightening professional climate that we can't wait for to see the end. Exactly, According to Stewart Chisam, CEO of Hi-Rez and RallyHere, a recovery is imminentwho spoke to GamesIndustry.biz during the Montreal International Games Summit.
Stewart Chisam
I actually think there is a major COVID hangover in games as a service. I have experience with supply chains and we would call it the bullwhip effect. When the pandemic hit, we experienced a terrible surge in demand overnight, and all of our games, and virtually every other game, saw engagement increase by 50% literally overnight in most cases. Many more people flocked to the game, not just because of the number of people, but also because of the hours players were putting into the game.
This has led to a massive increase in investments in the industry. And some of this started before the pandemic, especially in 2018 when Fortnite really took off. Many people saw this success and wanted a piece of the pie, which is why a lot of money from other funds was invested in the industry at the time.
You certainly see where Stewart Chisam is coming from: studios have been forced to increase their workforce to meet demand… except that demand isn't as strong today, for the simple reason that restrictions have been lifted and the activity resumed its course. Many companies then have a surplus of employees, but not enough work (and therefore income) to support them, leading to layoffs or bankruptcy filings.
I strongly believe that there is an oversupply in our industry, especially as the pandemic has subsided and gaming habits have returned to normal. In my opinion, this should all recover pretty quickly.
If he seems optimistic, However, Chisam also had to make layoffs as part of a recent restructuring.
It is difficult for everyone in the industry to navigate this change in direction. We felt this in our business and had to reduce our ambitions in terms of the number of new games we wanted to bring to market. Many other studios have done this too; It requires everyone to go back to basics.
Personally, I think we'll hit rock bottom this quarter and then we'll really start to grow again as an industry and put all of this behind us.
So to believe it, the recovery of the video game industry should soon take effect; after the current quarter. So would 2024 have a good chance of being better than 2023?
Under this condition, Sony could take full control of Bungie (Destiny).
Surely, Bungie was purchased by Sony in 2022 for $3.7 billion, but you should know that the iconic studio behind Destiny has not yet joined PlayStation Studios alongside the Japanese manufacturer's other iconic companies : It actually belongs to Sony Interactive Entertainment, its expertise in service games is used for other PlayStation studios and of course the various revenues from Destiny that flow into Sony's pocket.
But in itself, Bungie continues to operate independently: Its CEO Pete Parsons remains the main decision-maker in the event of a tie on the board, which includes Hermen Gulst (Head of PlayStation Studios) and Eric Lempel (VP of Marketing for PlayStation Worldwide).
However, this “autonomy” and this “independence” could no longer happen at all for the simple reason that Bungie is going through a really bad time. Destiny 2's latest expansion wasn't enough to restart the machine. The title has historically low viewership and that obviously doesn't please Sony, who were still able to hit a nice jackpot for one of the most well-known companies in the industry.
There could well be a penalty for this poor performance, namely Sony's complete acquisition of Bungie. It's IGN that reveals the Pot aux Roses.
Although the exact details of Sony's deal to acquire Bungie are not yet known to the public or employees, sources say they have been informed by executives that the current board structure is contingent on achieving certain financial goals. from Bungie. If Bungie misses its sales targets by too much, Sony can dissolve the existing board and take full control of the company.
With Destiny 2's Final Form expansion delayed until next fiscal year and Bungie continuing to invest heavily in Marathon, many employees understand that Bungie is struggling to achieve the necessary goals to preserve its last shred of freedom.
Therefore, if the next expansion, Final Form, does not bring players back to Destiny 2 and Bungie's results are below a certain threshold… Sony could therefore, according to the contract signed with the company (which remains vague since it has not been disclosed), take control and try to improve the situation. And who knows what the Japanese giant plans to do: continue with Destiny or develop a whole new game by joining Bungie and PlayStation Studios?
Buy the Destiny 2 Forsaken Legendary Collection
GameStop: The decline of the famous video game retailer continues
There was a time when physical games were popular – in fact, they were the norm. That time definitely seems to be over and more than ever the power of dematerialization is being felt to the detriment of specialty stores, such as the legendary American chain Game Stop (of which Micromania has been a part since 2008): the chain has just reported its financial results for the quarter published ended October 28, 2032… and they're not all rosy.
- Net sales were $1.08 billion (-9% compared to the same quarter last year).
- Net losses totaled $3.1 million (compared to $92.6 million in the same quarter last year, which is good news).
- Net hardware sales are $579 million (-8%).
- Net video game sales are $321 million (-9%).
- Goodies net sales were $178 million (-14%).
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Per se, Aside from its net losses, which are much smaller than the year-ago quarter, all of Game Stop's results are down, which pretty much reflects consumers' current tendency to finally abandon physical in favor of digital. Note that the only long-term debt Game Stop has is a low-interest loan taken out due to the French government's response to the pandemic.
Coming soon to the business news of the week
- Rovio (Angry Birds) closes Studio Lumi after its takeover by Sega and lays off 16 employees.
- According to Data.ai, the US is expected to account for 40% of mobile gaming revenue growth in 2024
- With 100 million views within 24 hours, GTA 6 now holds the all-time record for the fastest viewed video game trailer.
- Twitch has announced its withdrawal from South Korea within three months due to excessive internet billing fees.
- Sony has announced that it will remove purchased Discovery TV shows from the PlayStation Store, effectively removing them from the consumers who purchased them.
- Phil Spencer announced that Microsoft is spending around a billion dollars on Game Pass, but that it is now profitable.
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