E3: ‘Palpable’ Concern Regarding Packaged Media Gaming, Pricing

As trade shows go, Electronic Entertainment Expo (E3) 2019 in Los Angeles featured the usual blizzard of new-release announcements and industry scuttlebutt about the future of gaming consoles on land (hardware) and in the cloud.

Sony’s gaming unit – Sony Interactive Entertainment – skipped the event entirely, leaving much of the floor to rival Microsoft.

And it took full advantage.

John Wick franchise front-man Keanu Reeves created the most non-industry buzz early when he made a surprise visit to Microsoft’s pre-show presentation for the April 16, 2020 launch of Cyberpunk 2077 (also available on PlayStation 4 and PC), which features the actor as a rebellious punk rocker in a dystopian California where pretty much anything goes.

Keanu Reeves in ‘Cyberpunk 2077’

During the presentation, an attendee yelled out, “You’re breathtaking!,” to which the actor returned the compliment, adding that everyone in attendance was “breathtaking.”

The comment soon went viral, tracking more than 2.1 million views on Twitter and elsewhere.

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But to industry old-schoolers, a future of online gaming and subscription streaming supplanting $60 discs is breathtaking for the wrong reasons.

While Microsoft disclosed that Xbox One replacement – dubbed Project Scarlett – is still slated for launch for the 2020 winter holidays and would include an optical disc drive, the company remains laser-focused on streaming.

In October, it promises to preview the xCloud platform, which it claims affords Xbox One users the ability to stream games.

With advances in technology and changing consumer habits, global tech companies such as Google, Apple and Amazon are eyeing gaming.

This has rattled some investors, who heretofore marveled at gaming’s ability to stave off digital distribution in favor of high-margin packaged media played in venerable hardware consoles.

Yet, The NPD Group said that by the end of Q3 2018, 86% of gaming content was sold digitally across console, portable, PC, and mobile.

“There is a palpable level of concern that the traditional $60 upfront price for video games [on disc] is looking a bit long-in-the-tooth given changes in how people now choose to consume music and television, with all-you-can-consume subscriptions becoming the dominant forces in those markets,” Wedbush Securities media analyst Michael Pachter wrote in  June 14 note.

The analyst agrees that secular change within gaming is happening and will expose the industry to increasingly wider audiences demanding diversity (i.e. lower costs) in distribution.

Pachter said that while subscriptions to music and TV/movie streaming services “make some sense” given the long-tail of the content and the large quantity of consumption, he contends that a shift from an a-la-carte business model to subscription is unlikely to become popular except with hardcore gamers.

“We think concerns about pricing are overdone,” he wrote. “The average gamer plays three to four games per year on console or PC and another five to six games on mobile, compared to typical consumption of over 1,000 TV shows, at least that many songs, and dozens of films each year.

“We are skeptical that a Netflix-like service will emerge with thousands of choices at a low monthly price and think investor concerns about the erosion of the current business model are unfounded.”

Microsoft to Preview Xbox One ‘Console Streaming’ in October

Microsoft jumpstarted the Electronic Entertainment Expo (E3) 2019 in Los Angeles with the June 9 announcement of 60 new video games, an upgraded Elite 2 game controller and further mention of the pending Project Scarlett console, which claims to support 8K resolution, framerates up to 120fps and is slated to launch in 2020.

This October Microsoft will preview an Xbox One software upgrade enabling users (including Xbox One S) to stream their games onto portable devices, including a smartphone and tablet.

“It turns your Xbox One into your own personal and free xCloud server,” Phil Spencer, head of Xbox, told E3 attendees. “Whether you’re using a console in our data center or your console at home, this October, you’ll be able to use our hybrid gaming cloud to play your games wherever you go.”

The briefing also marked a new milestone for Project xCloud, with E3 attendees being among the first to play Xbox One games Halo 5: Guardians and Hellblade: Senua’s Sacrifice streaming on smartphones and tablets.

Project xCloud is Microsoft’s answer to Google Stadia – a cloud-base gaming platform that promises to offer users access to third-party games, including Microsoft.

“With Project xCloud, Xbox is investing to ensure players have the choice and freedom to play the games they want, with the friends they want, how and where they want,” Spencer said.

The briefing also disclosed more than 30 PC games, including Microsoft Flight Simulator and Age of Empires II: Definitive Edition, premiering with Xbox Game Pass for PC users.

New Xbox One and Windows 10 games unveiled June 9 are available here.

Video Streaming Widens Appeal Over Pay-TV Among Telecom Customers

Video streaming expanded its lead over subscription TV service in terms of customer satisfaction, rising to a score of 76 on the American Customer Satisfaction Index’s 100-point scale.

According to the ACSI Telecommunications Report 2018-2019, subscription TV service stagnated at 62, tied with internet service providers for last place among all industries tracked by the ACSI — subscription TV, ISPs, fixed-line telephone service, video-on-demand service and video streaming service.

Video streaming topped all industries tracked.

“Video streaming once again proves itself to be the best of the telecom industries in customer satisfaction,” said David VanAmburg, managing director at the ACSI. “Traditional telecom providers have tried to step up their game, but they’re not providing original content the way video streaming is, and in part they suffer guilt by association — if customers aren’t satisfied overall with Comcast, they’re probably going to ding Comcast’s on-demand service too.”

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Among video streaming services, Netflix secured first place at 79 after sharing the lead with Sony’s PlayStation Vue and Amazon Twitch the previous year. Netflix ranked at the top for original content among all streaming services, according to the ACSI. Sony’s PlayStation Vue landed in second place at 78, followed by the Microsoft Store at 77. Hulu stepped up to match Amazon Prime Video and Apple iTunes at 76. Five services clustered at 75: CBS All Access, Google Play, Amazon’s gaming platform Twitch, Walmart’s Vudu and Google’s YouTube. Dish Network’s Sling TV was the most improved, meeting HBO at 74. Starz matched the combined score of smaller platforms at 72, while Showtime followed close behind at 71. AT&T’s DirecTV Now fell to 69, ahead of only Sony Crackle, which remained unchanged at 68.

For the past six years, customer satisfaction with subscription TV has languished in the mid-to-low 60s, according to the study. AT&T’s U-verse TV held the lead for subscription TV at 69, followed by Verizon’s Fios at 68 and Dish Network at 67. AT&T’s satellite TV service DirecTV came in at 66, Altice’s Optimum tallied 61, and Charter’s Spectrum came in at 59 to tie with Cox Communications. Frontier Communications and Comcast’s Xfinity came in at 57. Mediacom followed closely at 56. Altice’s Suddenlink tumbles to the bottom of the category at 55.

Customer satisfaction with video-on-demand service slipped to an ACSI score of 67 as viewers continue to turn toward streaming services such as Netflix and Hulu, according to the study. AT&T’s U-verse TV service held the lead a year ago, but this year shared the top spot with Verizon’s Fios at a score of 72. Satellite provider Dish Network dropped to 71 but remained just ahead of DirecTV, unchanged at 70. Frontier Communications debuted in the category with a score of 67, in line with the industry average. Three decliners met at 66: Cox Communications, Altice’s Optimum and Comcast’s Xfinity. Charter’s Spectrum remains unchanged at the bottom of the category with a 64.

Unchanged at a score of 62, ISPs remain at the bottom of the ACSI rankings. Most ISPs are still falling short of providing good service at an affordable price, according to the ACSI release. Verizon’s Fios was stable at the top of the category with an ACSI score of 70, but AT&T Internet closed in at 69. Altice’s Optimum fell to 63 but remained the leader among coaxial providers. Meanwhile, Comcast’s Xfinity inched closer to the industry average at 61. Cox Communications tallied 60, tying Altice’s Suddenlink. Charter’s Spectrum and CenturyLink came in at 59.

Competitors Sony and Microsoft Ink Entertainment Innovation Partnership

Sony Corp. and Microsoft Corp. May 16 announced that the two companies will partner on new innovations to enhance customer experiences in their direct-to-consumer entertainment platforms and AI solutions.

Under the memorandum of understanding signed by the parties, the two companies will explore joint development of future cloud solutions in Microsoft Azure to support their respective game and content-streaming services. In addition, the two companies will explore the use of current Microsoft Azure datacenter-based solutions for Sony’s game and content-streaming services.

“By working together, the companies aim to deliver more enhanced entertainment experiences for their worldwide customers,” read a joint press release. “These efforts will also include building better development platforms for the content creator community.”

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As part of the memorandum of understanding, Sony and Microsoft will also explore collaboration in the areas of semiconductors and AI. For semiconductors, this includes potential joint development of new intelligent image sensor solutions. By integrating Sony’s image sensors with Microsoft’s Azure AI technology in a hybrid manner across cloud and edge, as well as solutions that leverage Sony’s semiconductors and Microsoft cloud technology, the companies aim to provide enhanced capabilities for enterprise customers. In terms of AI, the parties will explore incorporation of Microsoft’s advanced AI platform and tools in Sony consumer products, to provide highly intuitive and user-friendly AI experiences.

“Sony is a creative entertainment company with a solid foundation of technology. We collaborate closely with a multitude of content creators that capture the imagination of people around the world, and through our cutting-edge technology, we provide the tools to bring their dreams and vision to reality,” said Kenichiro Yoshida, president and CEO of Sony, in a statement. “PlayStation itself came about through the integration of creativity and technology. Our mission is to seamlessly evolve this platform as one that continues to deliver the best and most immersive entertainment experiences, together with a cloud environment that ensures the best possible experience, anytime, anywhere. For many years, Microsoft has been a key business partner for us, though of course the two companies have also been competing in some areas. I believe that our joint development of future cloud solutions will contribute greatly to the advancement of interactive content. Additionally, I hope that in the areas of semiconductors and AI, leveraging each company’s cutting-edge technology in a mutually complementary way will lead to the creation of new value for society.”

“Sony has always been a leader in both entertainment and technology, and the collaboration we announced today builds on this history of innovation,” said Satya Nadella, CEO of Microsoft, in a statement. “Our partnership brings the power of Azure and Azure AI to Sony to deliver new gaming and entertainment experiences for customers.”

Edelman Elected Treasurer, Gutierrez Secretary of EMA

Michele Edelman and Pedro E. Gutierrez Jr. have been elected to serve as treasurer and secretary, respectively, of the Entertainment Merchants Association.

Edelman, who had been serving as secretary, replaces Matt Hill of Amazon, who stepped down from the EMA Board due to a change in his responsibilities at Amazon.

Edelman is EVP of marketing and content strategy for Vubiquity.

Gutierrez is director of digital stores movies and TV business and category management at Microsoft.

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The other officers of EMA are chair Cameron Douglas of Fandango and vice chair Suyin Lim of PlayStation Video. Additionally, comScore’s Marty Graham and Google’s Bill Kotzman serve on the board’s executive committee.

Netflix Rated the Fastest-Growing Brand in 2019

As if it needs more attention, Netflix has been tapped the fastest-growing brand of 2019, according to Brand Finance, a brand valuation consulting company based in New York and Paris.

Based in part on a company’s ability to remain relevant and make an impact on the culture (home entertainment) it’s participating in, Netflix saw its brand value increase 105% over the past year to $21.2 billion.

The report said the subscription streaming video pioneer is set to play the “lead role in home entertainment,” building a disruptive business model as a universally accessible narrowcaster and effectively challenging traditional broadcasting brands and distribution.

“Netflix delivers high-quality and varied programming to anyone with Internet access and a credit card,” Alex Haigh, valuation director at Brand Finance, said in a statement. “The platform has embarked on a disruptive approach to media services and now has incumbents in the market looking over their shoulder.”

While Netflix’s brand keeps growing exponentially, Amazon (including Prime Video) remains the most valuable domestic brand, growing nearly 25% to $187.9 billion valuation.

“This year, Amazon’s brand is worth approximately half of the combined value of the 42 retail brands in the ranking,” Haigh said. “The retail industry is another sector at a crossroads as tech giants and online sellers encroach upon the traditional business model with a completely new proposition.”

With the media industry feeling the effects of tech disruption, another rapidly growing digital media brand is YouTube(up 46% to $37.8 billion) this year jumping 10 spots to 13th nationally.

Like Netflix, YouTube is building a broad platform for video content, in an effort to leverage its brand from merely peer-to-peer video creation and sharing to also include a growing premium and professional video library.

Among traditional media brands, Disney entered the top 10 nationally on the back of its M&A acquisition of 20th Century Fox Film Corp. The brand jumped 40% in value to $45.7 billion.

Tech giants, Apple (2nd, $153.6 billion) and Google (3rd, $142.8 billion) remained entrenched in their positions from last year.

With a 47% increase in brand value to $119.6 billion, Microsoft moved into 4th after the company’s successful turn towards a cloud-centric business.

With all eyes turned to 5G, AT&T dropped down a spot to 5th, after a modest 6% brand value increase over past 12 months to $87 billion.

Aside from calculating brand value, Brand Finance also determined the relative strength of brands using a scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance.

Though Facebook held onto its 6thspot, its brand strength suffered the second worst decline among the top 100 brands, resulting in a rating downgrade from AAA+ to AAA- after a year of privacy issues that have landed the company in the hot seat.

Behind tech, the largest industry with a combined brand value of over $1 trillion, the retail sector comes in second with $340.5 billion. Eighth-ranked Walmart (up 10% to $67.9 billion) is the nation’s most valuable brick-and-mortar retail brand, as it continues to push the boundaries of its physical store and logistics network.

Home Depot (up 39% to $47.1 billion) jumped from 11th to 9th, while its rival Lowe’s saw its brand value go up 49% to $23.9 billion.

Google Unveils ‘Stadia’ Video Game Service

As expected, Google is entering the $140 billion video game business with hopes its cloud-based Stadia service will rival industry benchmarks Xbox (Microsoft), PlayStation (Sony) and Switch (Nintendo) among consumers.

Google announced the new service March 19 at the Game Developers Conference in San Francisco. The search behemoth, which plans to roll out the service and cost details later this year, says Stadia would enable users to play games from major developers on most devices via YouTube.

Google Stadia video game controller

“Our ambition is far beyond a single game,” Phil Harrison, VP and GM at Google, told attendees. “The power of instant access is magical, and it’s already transformed the music and movie industries.”

Harrison, who previously held executive positions at Xbox and PlayStation, said Google tested the service (Project Stream) last fall with Ubisoft’s Assassin’s Creed: Odyssey that enabled users to play/stream the triple-A game via Google’s Chrome browser on any applicable device – including smart TV.

“We finally get to share Google’s vision of games,” Harrison said. “Our vision for Stadia is simple. One place for all the games you play.”

In a statement, Yves Guillemot, the co-founder/CEO of Ubisoft, said Google’s global expanse would give “billions” unprecedented opportunities to play video games.

“We are proud to partner with Google on Stadia, building on what we’ve learned with Project Stream via Assassin’s Creed Odyssey,” Guillemot said. “This is only the beginning, and we can’t wait to continue collaborating closely with Google on what’s next for Stadia.”

 

Google Set to Reveal Video Game Streaming Service

As online gaming grows (and disc-based video games decline), tech/media giants such as Google and Apple are eyeing the $100 billion industry for new cloud-based streaming platforms.

Google is reportedly set to disclose a streaming platform March 19 offering high-end games across all platforms, including Android, iPhone, Mac, Chrome, Windows 10 and TVs at the Game Developers Conference in San Francisco. The search behemoth teased a YouTube video about it.

The company, which would enable users to buy games directly from the TV screen or portable media device, will also unveil a gaming controller (and possibly a console) that could be used with a smart TV.

The move comes as the gaming industry – dominated by Sony (PlayStation), Microsoft (Xbox) and Nintendo – grapple with changing consumer habits and distribution revolving around their longstanding gaming consoles.

Google’s service could enable users to play top games without having to buy an expensive console.

“Cloud gaming will enable publishers to broaden their reach even further by potentially taping into new audiences on any device and any screen,” Thomas Husson, analyst with Forrester Research, told CNBC. “Beyond music or video, gaming represents another opportunity to offer recurring streaming revenue for companies in the gaming ecosystem. For cloud platforms like Amazon, Google or Microsoft, it will also become an opportunity to offer cloud storage and services to game publishers, who spend more and more in their IT infrastructure.”

 

 

 

 

 

 

 

Xbox Partners With Taco Bell to Give Away Xbox One X Consoles

Taco Bell is partnering with Xbox to give fans in the United States the chance to win limited-edition Xbox One X consoles each time they buy a $5 double chalupa box, Xbox announced.

The promotion lasts from Oct. 18 through Nov. 21.

The exclusive platinum-colored console features Taco Bell’s “ring” when powered on (exclusive to the limited-edition consoles); a white, special-edition Xbox Elite wireless controller; and three months of Xbox Game Pass and Xbox Live Gold.

An Xbox One X will be rewarded every 10 minutes throughout the promotion and it will be delivered to fans 72 hours after being declared a winner, according to Xbox.

The Xbox One S and Xbox One X both feature a built-in 4K UHD Blu-ray player and Dolby Atmos support.

Walmart Working with Former Studio Chief Nancy Tellem in New Joint Venture

Walmart desperately wants to bridge the entertainment and e-commerce divide with Amazon.

The world’s largest retailer Oct. 11 announced a strategic entertainment joint venture with Eko, a developer of interactive video technology. The pact includes plans to develop original, interactive content that Walmart claims will help it connect with customers in “new and more meaningful ways,” with the goal of driving deeper and more frequent engagement.

The content, which could range from cooking shows to interactive toy catalogues, will go beyond the basic personalization available today, allowing viewers to participate in and shape stories as they are being told, according to Walmart.

The joint venture – dubbed W*E Interactive Ventures – expands Walmart’s entertainment ecosystem. The retailer already has a longstanding physical and digital video presence, through stores, websites, the digital platform Vudu.com and the recently launched eBook platform, Walmart eBooks, with Rakuten Kobo.

“Our partnership with Eko will help us accelerate efforts to deepen relationships with customers and connect with new audiences in innovative ways and is one part of an overall entertainment ecosystem we’re building,” Scott McCall, SVP of entertainment, toys and seasonal, Walmart U.S., said in a statement.

Since 2010, Eko has pioneered the future of entertainment, alongside partners like Sony Pictures Entertainment and MGM Studios. Eko has received prior funding from Sequoia Capital, Intel Capital, Warner Music Group, Samsung, Walmart, and others, and has more than 15 patents for its technology. In connection with the joint venture, Walmart has agreed to participate in Eko’s next funding round.

“The future of video entertainment is interactive, and this joint venture is a huge step towards bringing this future to life,” said Yoni Bloch, CEO of Eko. “In 2018, all forms of media are personalized except for live action video.

The partnership will be led by Bloch, with input from several industry experts. Tribeca Productions co-founder Jane Rosenthal will serve as strategic advisor. Rosenthal, producer of films such as Meet the Parents, Meet the Fockers, About a Boy (film and series), Wag the Dog and the upcoming Scorsese film The Irishman, helps create a bridge for both established and emerging artists looking for an outlet for their work.

Nancy Tellem, chief media officer and executive chairwoman of Eko, will serve on the board of the joint venture. Prior to joining Eko, Tellem spent more than 25 years in television including time as president of CBS Network Television Group.

Tellem most-recently spearheaded Microsoft’s short-lived attempt at creating original TV shows and movies at shuttered Xbox Entertainment Studios.

“During my career in broadcast television, I’ve seen how traditional media has been transformed by technology and have long believed that technology would be the key to creating more engaging entertainment experiences,” said Tellem. “Audiences are hungry for immersive entertainment, and storytellers are embracing this new technology in creating a new type of story narrative that deeply engages the viewer. Now is the time for Eko and interactive content to take center stage.”