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.”

Sony Stopping Retailers from Selling Digital Video Game Codes

In another blow to packaged-media retail, Sony Interactive Entertainment is taking steps to stop retailers such as GameStop, Amazon and Best Buy from selling digital codes to its video games.

The move would hinder consumers from bypassing the credit card payment option at Sony’s PlayStation Network and purchasing codes to PS4 titles at physical and online retail.

“We can confirm that as of April 1, Sony will no longer offer full games through SIE’s Global Digital at Retail program,” the company told The Verge in a statement. “This decision was made in order to continue to align key businesses globally. To support full games and premium editions, SIE will introduce increased denominations at select retailers.”

The move will reportedly not affect pending releases of Days Gone and Mortal Kombat 11.

Sony said the new policy would not affect downloadable content, add-ons, virtual currency, gift cards and season passes. The publisher will also continue to offer third-party PSN credit options at select retailers.

Sony’s action mirrors efforts by Disney to stop Redbox from selling digital codes to its movies. That move resulted in litigation with a federal judge last summer granting Disney’s request for a preliminary injunction against Redbox.

That injunction only applies to newer “combo pack” releases with a revised disclaimer on the package. Redbox said it would continue selling digital codes to earlier Disney releases such as Frozen and older “Star Wars” movies.

New ‘Spider-Man’ Video Game Sets Three-Day Sales Record

The new Spider-Man video game for the Sony PlayStation 4 is an even bigger hit than the latest Spider-Man movie.

The game, Sony Interactive Entertainment said Sept. 20, sold 3.3 million copies in the first three days since its Sept. 7 release, making it the fastest-selling first-party game the company has ever had.

At a retail price of $59.99, that equates into nearly $200 million in consumer spending.

The latest “Spider-Man” movie, Spider-Man: Homecoming, made $117 million its opening weekend.

Sony said 1 million copies of the game were pre-ordered.

Spider-Man, developed by Insomniac Games and published by Sony Interactive Entertainment, broke the previous three-day sales record set in May by the latest installment in the “God of War” franchise, which sold 3.1 million copies.

The new Spider-Man game, heavily promoted over the summer at Comic-Con International, is the first since 2014’s The Amazing Spider-Man 2.

Sony says that beginning in October, it will be releasing three downloadable stories as part of bundle called “The City That Never Sleeps.” each update will add new stories, characters and Spider-Man suits to the game. The first, “The Heist,” will be available Oct. 23.

The bundle costs $24.99; individual updates are $9.99 each.

Sony to Bring Back Original PlayStation Console

Sony Interactive Entertainment on Sept. 19 announced plans to bring back the original PlayStation video game console, launched nearly 25 years ago, “in a new miniaturized version,” according to a blog post by Eric Lempel, SVP of PlayStation worldwide marketing.

The console, due Dec. 3 at a suggested retail price of $99.99, will come pre-loaded with 20 classic titles, including Final Fantasy VIIJumping FlashRidge Racer Type 4Tekken 3, and Wild Arms.

The mini console, Lempel writes is approximately 45% smaller than the original PlayStation, “and it emulates the original’s look and feel by featuring similar controllers and packaging. Long-time fans will appreciate the nostalgia that comes with rediscovering the games they know and love, while gamers who might be new to the platform can enjoy the groundbreaking PlayStation console experience that started it all. All of the pre-loaded games will be playable in their original format.”

Unlike the original, each unit will come with an HDMI cable so players can connect the device to their TVs. The console also will come up with a USB cable and two controllers for local multiplayer within compatible titles.

The original PlayStation video gaming system was released on Dec. 3, 1994. It went on to become the first video game console to ship 100 million units.

Its successor, the PlayStation 2, was released in 2000, followed by the PlayStation 3 in 2006 and the PlayStation 4 in 2013.

FandangoNow’s Cameron Douglas Elected EMA Chairman

Cameron Douglas, VP of home entertainment for Fandango’s on-demand video streaming service, FandangoNow, has been elected chairman of the Entertainment Merchants Association.

Douglas replaces Jonathan Zepp, head of worldwide movies and TV partnerships for Google Play.

Other officers include vice chair Suyin Lim, senior director, global content acquisition, Sony Interactive Entertainment; secretary Michele Edelman, EVP, marketing and content strategy, Vubiquity; and treasurer Matt Hill, head of vendor management, Amazon Prime Video.

EMA past chairmen Bob Geistman, EVP, sales and marketing for Ingram Entertainment, and Marty Graham, SVP, comScore, as well as Bill Kotzman, partner product manager, TV/film, Google/YouTube, will also serve on the association’s executive committee as at-large members.

Other members of the board are Amit Balan, head of marketing, Vudu; Lori Flynn, VP, content, Redbox Automated Retail; Ryan Gorman, director, merchandise buying, video games, Target; Pedro E. Gutierrez Jr., director, digital stores movies and TV business and category management, Microsoft; Steve Harkins, VP and GM, Baker & Taylor; Bill Miller, VP and divisional merchandise manager, DVD, Blu-ray, and Games, Trans World Entertainment; Jason Peterson, CEO, ContentBridge Systems; and Mark Vrieling, CEO, ScreenPlay Entertainment.

“In the ever-changing world of home entertainment retailing, we need an organized industry association more than ever,” said Douglas in a statement. “EMA collectively advocates for anyone involved in the consumer delivery of content, promotes and encourages adoption of standards, and establishes trade- and consumer-focused best practices. I am proud to devote my time to an organization so important to our industry.”

“The companies on EMA’s Board of Directors represent the spectrum of the home entertainment industry, including video and video games, physical and digital, and sellthrough, rental, and streaming,” said Mark Fisher, EMA president and CEO, in a statement. “These directors personify the diversity of products and business models in our industry and will help ensure that the industry’s trade association meets the needs of all market segments in our incredibly diverse industry.”

Sony Promotion Includes Limited Edition Blue PS4

Sony Interactive Entertainment is bringing back its Days of Play PlayStation promotion, offering deals June 8-18 at participating retailers across the United States and Canada, while supplies last.

The promotion includes a blue-with-gold-symbol Days of Play Limited Edition PS4 system for $299.99 ($379.99 Canadian) starting June 8. The console features a 1TB hard drive and comes with a matching DualShock 4 wireless controller.

Hardware and peripheral discounts throughout the 11 days include:

  • Jet Black PS4 Pro – $349.99 ($449.99 Canadian)
  • PlayStation VR bundles – starting at $199.99 ($249.99 Canadian)
  • DualShock 4 wireless controller (all colors) – $39.99 ($49.99 Canadian)
  • PlayStation Move motion controller (2 pack) – $79.99 ($99.99 Canadian)
  • PlayStation VR Aim controller (U.S. only) – $49.99

 

PS4 and PS VR title promotions include:

  • God of War: $49.99 ($59.99 Canadian)
  • Gran Turismo Sport: $19.99 ($29.99 Canadian)
  • Horizon Zero Dawn: $19.99 ($29.99 Canadian)
  • MLB The Show 18: $39.99 ($49.99 Canadian)
  • Shadow of the Colossus: $19.99 ($29.99 Canadian)
  • Bravo Team (PS VR): $29.99 ($39.99 Canadian)
  • Farpoint (PS VR): $14.99 ($19.99 Canadian)
  • The Inpatient (PS VR): $14.99 ($19.99 Canadian)

 

The PlayStation Store will be offering promotions on games and network service memberships, including:

  • PlayStation Plus – $49.99 ($59.99 Canadian) for a 12-month PS Plus membership
  • PlayStation Vue (available in the U.S. only) – $10 per month off the Core plan standard price for the first two months ($44.99 per month thereafter)
  • PlayStation Store catalog titles