MCV573 Feruary 5th 2010 by Intent Media (now Newbay Media Europe)

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THE MARKET FOR COMPUTER AND VIDEO GAMES

Issue 573 Friday February 5 2010 £3.25

04 iPad doubts

15 An endless cycle

UK games retailers offer their opinion on Apple’s new handheld device

Microsoft, Nintendo and Sony discuss the benefits of a longer console lifecycle

06 In good Company

10 Piracy protection

EA on why its modern day FPS Bad Company 2 will be a retail smash hit

We take a closer look at EA and Ubisoft’s attempts at beating PC piracy

08 Mini games, big plans

12 Little Green men

Casual games specialist Miniclip.com reveals its plans for Wii and DS

Green Man Gaming’s Gian Luzio and Paul Sulyok talk digital distribution

EVERY BUYER EVERY BRANCH EVERY INDIE EVERY WEEK

INCORPORATING

Publishers warn: We’re not out of the woods yet

Square spends millions to fulfil fantasy

But UK industry bosses are cautiously optimistic following end of the recession

MILLIONS OF POUNDS will be spent on the marketing campaign for Final Fantasy XIII, MCV understands. The publisher plans to make the game’s launch “a true event” with a heavyweight TV campaign that will kick off on March 1st and run through Easter and into April, including spots during football matches. “We aim to make Final Fantasy XIII not only the biggest game release, but one of the biggest entertainment releases of Q1,” said UK product manager Grant Tasker. Square Enix has also arranged its biggest ever investment in video-ondemand media, and expects its national bus-side advertising to reach an estimated 75 per cent of the UK’s population. Final Fantasy XIII will hit 360 and PS3 on March 9th.

by Christopher Dring THE UK MAY be out of the recession – but publisher bosses are mindful of a slow recovery for video games. UK GDP rose just 0.1 per cent during Q4 2009, and industry heads are wary of the prospect of a ‘double dip recession’ – where the UK economy re-enters a downturn. This caution is further backed up by GfK Chart-Track figures that show game sales for January are significantly down compared to the same period the year before. “I’m delighted that we have seen the green shoots, although I suspect we should wait before ordering the champagne,” said Activision UK MD Andrew Brown. “2010 will still be a challenging year for the industry and I expect not only consumers, but also retailers and publishers will take a cautious approach. Some of

INDUSTRY HOPEFUL: Defries (left), Cousens (Middle) and Brown (right) expect a prosperous year

the trends are likely to continue for a while, such as the big getting bigger and vice versa. Overall I remain optimistic.”

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for two successive three month periods, but a recovery is merely one three month period. Double-dip recession

2010 will be a challenging year. I expect consumers, retailers and publishers will take a cautious approach. Andrew Brown, Activision

Rising Star MD Martin Defries added: “I’m not booking the holiday yet. A recession is when GDP figures are negative

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will be the zeitgeist expression of choice for a while yet.” Meanwhile, Codemasters CEO Rod Cousens feels the

games industry should be optimistic for the year ahead. “There needs to be a culture of optimism and aspiration as a motivational stimulus,” he said. “Digital revenues are growing and providing more opportunity if games design is adapted to take advantage of it. “The business model should change and the constituent parts of the industry should work together to make sure it is economically viable, being mindful that a revolutionary shift is happening.”

by James Batchelor

‘Motion sensor and 3D will widen PS3 appeal’ by Michael French SONY HAS told MCV that new PS3 interface technologies will broaden the console’s audience. Speaking to us as part of an in-depth look at the longer hardware cycle, SCE Worldwide Studios VP Michael Denny said the PS3 motion controller and the console’s new 3D content will attract non-gamers. “New technology – such as our PS3 controller blending of

motion-sensing and vision tech, and 3D games – offer us an opportunity to re-engage with the consumer and showcase the innovation that takes place in our industry,” he said. “Both of those technologies are launching this year, at a time where PS3 is going strong. Those technologies will cause people to look at the industry in a different light, cause debate and give us even more scope for new experiences.”

SCE studio boss Michael Denny says PS3 3D and motion sensing will grow its user-base

Denny said that Sony devs are at work on titles based on new and existing IP that utilise either 3D or motion-sensing. He added: “We believe these new experiences will excite the PlayStation fan, whilst also creating new interest with people who may never have thought about gaming.” Turn to page 15 for Sony, Nintendo and Microsoft's views on the extended lifecycle of current generation consoles

PERSONNEL 20 RETAIL BIZ 21 NEW RELEASES 27 HIGH STREET 28 CHARTS 30

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[LEADER] ANOTHER DIGITAL CONUNDRUM IT MIGHT NOT seem directly relevant to games – and it’s not something splashed across our front page this week – but I found the recent squabble between Amazon and book publisher MacMillan an interesting, if brief, argument we could take heed of. In short: Amazon briefly removed MacMillan books from sale when the publisher told the retailer to stop dropping the prices of its products on digital book reader the Kindle. The resultant stand-off didn’t last long, but it highlighted a key issue around the control over pricing for digital products. It’s not an issue this industry has had to face yet, but I believe it will be very soon. There’s already been a lot of talk this year about how the industry’s end-of-year figures don’t tell the full story, and that significant digital revenues go uncounted by the figures released by ELSPA and NPD. I’m not convinced that this is a watertight assertion just yet – sometimes the above comment comes from those with a slightly vested interest – but there is definitely a vast amount of potential in the download space. And yet, anecdotally at least, the core digital distribution market for PC games is still rigidly locked, with fixed prices the norm giving consumers no reason to shop around or bargain-hunt – one of the core forces that keeps commerce ticking over. If the digital world is going to take over, then the industry needs to be as prepared to experiment with concepts such as flexible pricing models as it is to talk up the power of free-to-play games and bargainpriced apps for iPhone.

LOSING YOUR APP-ETITE SPEAKING OF WHICH, we almost didn’t run the iPad story to the right, so widespread and mind-numbing has the coverage for Apple’s latest device been. MCV didn’t want to be part of the cooing chorus marveling at what is a device for an untested sector. But the reservation some specialist retailers have towards it, and excitement amongst others, is interesting, if not that surprising. I’m not personally sure that comparisons to Sony’s PSPgo hold water. While both platforms are held up by a digital distribution backbone, they aren’t aimed at the same people. iPad is arguably an assault on the home console market – its games are run on a big, sexy screen and are to be played not on the move but while sat down for a stretch. The bigger question is that if it takes off, will it eat into the time consumers otherwise dedicate to games on laptops, Wii, 360 and PS3 – and maybe even DS and PSP? I think it will. That’s if it takes off. However tablet devices are an untested sector. And while the new device will run all the old apps through the universal SDK, until the iPad is actually on the market it’s an unknown quantity – something the industry will have to keep watch on over the coming months. Michael.French@intentmedia.co.uk

Retail divided Entertainment retail and supermarkets excited by Apple’s new by Christopher Dring UK GAMES retailers have mixed feelings towards Apple’s new iPad. The device was revealed last week after months of speculation and is due for launch early next month. Senior execs at Gameloft and EA presented new games for the device at its unveiling. Already, some UK retailers

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would definitely be excited about stocking this.” Morrison’s gaming buyer Jon Biggs added: “The iPad has promising potential across business, communication and entertainment and of course it’s part of what could possible be the most iconic family of products over the last ten years. “In terms of gaming it seems to hit a sweet spot of having a massive screen whilst retaining

Despite the successes of the iPhone, the majority of gamers still prefer to purchase a physical product. Igor Cipoletta, ShopTo

have confirmed plans to stock the device – with the likes of GAME for one already promoting its upcoming release online. “It’s always great to see another format hit the market where publishers and developers can create new content for consumers,” The Hut’s product marketing manager Sarah Jasper told MCV. “When and if stock becomes available, The Hut Group

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a large degree of portability due to its slim profile. It might not fit in your pocket but in the car or on the train it will deliver not only gaming but a raft of other features, which will make it a popular choice.” Gaming is a major part of iPad’s proposition following the popularity of games on iPod Touch and iPhone. At the time of writing, the top four grossing games on the Apple App Store are all major

video game brands – Grand Theft Auto, Rock Band, Broken Sword and Call of Duty. However, specialist retailers are cautious over the machine due to its digital-only nature – and slow sales of the last download-only console, PSPgo.

Scratch’ goes bust UK DISC REPAIR specialist Scratchbusters has gone into liquidation, MCV can confirm. The firm’s main business was selling its repair machines to the trade, who could then restore traded in titles or even offer disc repair services to the public. The news comes just days after the company told us that it was hoping to expand its operations into other sectors within the games market. “The previously played market is booming,”

Scratchbusters managing director Stanley Edwards told MCV last week, days before the company’s closure. “2009 was a good year. We purchased additional equipment last year, and we

Scratchbusters has also said it was hoping to fill a gap left behind by the Trilogy buy-out last year by offering distribution to small and mid-size publishers. Scratchbusters had been running for five years.

now operate an 18 hours a day operation – and that’s just for the disc repair side of the business.”

Insolvency firm Bond Partners is handling the liquidation. Bond Partners: 0870 850 6007

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over iPad potential machine, but specialists are cautious following slow sales for Sony’s comparable PSP

FOOL’S GOLD? Apple says the iPad represents a ‘gold rush’ for app developers, but specialist retailers see no profit for themselves in the device

IPAD: THE FACTS Apple iPad is a computercum-iPod Touch. It has functions for e-reading, photos, email, gaming, web browsing, video and music. The machine comes in WiFi and 3G variations. WiFi models are due to arrive in March, while the 3G editions are set to appear in April. The devices come in three sizes: 16GB, 32GB and 64GB. The entry-level model is set to retail at $499 (£308), the 32GB version will cost $599 (£370) and the high-

end 64GB edition will cost $699 (£433). Those wanting to add mobile internet access via a 3G mobile connection will need to add $130 (£80) on top. Therefore, the most expensive SKU – the 64GB model with 3G – will cost a total of $829 (£512). The machine boasts a 9.7 inch LED-backlit IPS display, multi-touch and up to ten hours’ battery life. Add-ons such as keyboards are also planned for release.

“We do not see the iPad as the kind of product that we would welcome for our core customers,” said ShopTo CEO Igor Cipolletta. “Once the unit is sold, we would have no further customer interaction or sales opportunities.

[PRE ORDERS]

TOP 10 BIOSHOCK 2

“We still feel that, despite the relative successes of the iPhone and iPod Touch, the majority of gamers still prefer to purchase a physical product, that they can trade in or sell once finished with. “We were correct in our assumption that PSPgo would be a sales flop, both in terms of its price and in its method of delivery. The majority of the gaming community definitely doesn’t share the developers’ thoughts on downloads.” Grainger Games is also not convinced the iPad is ideal for their customers. “After looking into the Apple iPad we can see that it is a great bit of kit, but it is not something that we will look to stock at this point,” said commercial director Chris Harwood. “Being an Apple product we have no doubt that it will sell well – it just does not fit our brand proposition at this point in time. Our expectations would be that this product will undergo a number of iterations until it becomes more massmarket. Perhaps then, with more gaming support, we would look to stock it.”

360 2K GAMES

2. BIOSHOCK 2 PS3 ....................................2K GAMES

3. HEAVY RAIN PS3 ..........................................SONY

4. FINAL FANTASY XIII PS3 ................................SQUARE ENIX

5. ALIEN VS PREDATOR 360 ..........................................SEGA

6. FINAL FANTASY XIII PS3 ................................SQUARE ENIX

7. BIOSHOCK 2: WITH LITTLE SISTER 360 ....................................2K GAMES

8. DANTE’S INFERNO PS3 ..............................................EA

9. GOD OF WAR III PS3 ..........................................SONY

10. BIOSHOCK 2: WITH LITTLE SISTER PS3 ....................................2K GAMES Week ending January 30th Source: SHOPTO.COM Turn to page 29 for more pre-order charts from leading online retailers

UK SOFTWARE SALES MONITOR Your weekly guide to the UK games software market… UK games software sales jumped 22 per cent this week, up to £22.8 million, while unit sales rose 11 per cent to 1,021,224 Mass Effect 2 was the key sales driver, comfortably taking No.1 in the Top 40. The game’s launch sales were double that of the original Mass Effect on 360 and are three times higher for PC. The market was also boosted by the release of Sony’s MAG – which managed fourth place in the charts – and an increase in sales for Ubisoft’s Just Dance. Dante’s Inferno, The Princess and the Frog, Star Trek Online and Final Fantasy Crystal Chronicles all follow next week. But the big launch is BioShock 2 which hits on Tuesday, February 9th.

[WEEKLY MARKET VALUE]

Total UK Software Sales Source: ELSPA/ChartTrack and Intent Media

Week Ending January 30th 2010

£22.8m

Mass Effect leapt to No.1 in the charts after three days

£22.9m

£18.6m

£22.8m

1,021,329 Units

829,704 Units

1,021,224 Units

Week Ending January 16th

Week Ending January 23rd

Week Ending January 30th

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Pre-order boom for Battlefield Marketing blitz planned for popular franchise’s latest release EA plans to take on rival online shooters by Christopher Dring HYPE FOR Battlefield: Bad Company 2 has reached an alltime high, with EA reporting huge pre-orders for the shooter. The game is the sequel to the 2008 multiplayer hit and will arrive on March 5th on Xbox 360, PS3 and PC. It’s also the first Battlefield title

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is high right now, especially within the Battlefield fan-base.” He added: “While the first iteration may have lacked the polish in single player that the multiplayer did so well, this is addressed for Bad Company 2 for a rounded experience that will appeal to the mainstream consumer. The multiplayer is going to be a

Both public and retail awareness for Bad Company 2 is high – especially within the Battlefield fan base. Will Graham, EA

since last year’s hugely popular downloadable game, Battlefield 1943. “We have significant preorders already, driven in part by the amazing assets released by the developer DICE in recent months,” product manager Will Graham told MCV. “Both public and retail awareness for Bad Company 2

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step forward, even for DICE, and will prove they are leading the way in defining online shooter warfare. We genuinely believe there isn’t a developer out there that competes with DICE in this space, and Battlefield: Bad Company 2 is going to cement that.” EA’s PR campaign for Bad Company 2 is already well

NO BAD FEELINGS: There’s good buzz at retail for Battlefield Bad Company 2, according to EA

underway, with a demo released for Xbox Live last month. The publisher is also working on a monster marketing push for the game’s launch next month.

The firm promises a ‘substantial’ TV campaign that will target the typical 16 to 34 year-old male gaming audience. This will be accompanied by print and

online advertising in the core gaming publications ahead of launch, with mainstream press coverage planned for the game’s release. EA: 01483 463000

New product manager for SCEE Gem starts February SONY COMPUTER Entertainment UK has hired Ian Vinten as its new senior product manager. Vinten joins the firm following a stint at media agency MediaCom, where he managed the EA account. Prior to MediaCom he worked for film publicity firm Cameo Productions and at media agency PHD. “I’m thrilled to be joining Sony Computer Entertainment UK at such an exciting time,” Vinten told MCV. “PlayStation 3 and PSP are going from strength-to-strength and we’ve got a brilliant software line-up. 2010 will be a great year for PlayStation

Frenzy price cutting

NEW BLOOD: Vinten joins Sony from MediaCom

and I’m looking forward to being part of that.” Vinten joins the firm as PS3 console sales reached three million units in the UK. The platform holder launched its new online FPS MAG last week, and is set to

release Heavy Rain next month, God of War III in March and Gran Turismo 5 later in the year. The Sony motion controller is also due to launch in the fourth quarter. Sony: 020 7859 5000

GEM HAS launched this year’s February Frenzy, its month-long promotion of product offers for customers. The initiative is the UK distributor’s annual sales event, now in its third year, and sees some of Gem’s biggest partners reduce their key products for its retail clients. Vendors involved this year include Microsoft, Ubisoft, TakeTwo Interactive, Codemasters, Zushi and Logitech.

Each company has been allocated one or two days during which they will promote their offers for reduced product stock. Some deals will be exclusively available on Gem’s dedicated February Frenzy website at gem.co.uk/februaryfrenzy. The promotion kicked off this week and will continue every weekday until Friday February 26th. Gem: 01279 822800

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Napoleon prepares chart invasion Latest instalment in Sega’s evergreen PC strategy franchise Total War arrives at retail on February 26th by James Batchelor SEGA EXPECTS its next strategy game Napoleon: Total War to outperform last year’s best-selling instalment Empire: Total War. The new entry in the acclaimed PC strategy game series follows the life and times of its namesake, Napoleon Bonaparte, and refines the land and naval battle mechanics which debuted in last year’s release.

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live up to this legacy of chart succeses. “For Napoleon, Creative Assembly has built upon the incredible quality of Empire to deliver an even more involving and historic experience and as such we are confident of its success,” said Sega senior product manager Ben Walker. Sega is also confident of Napoleon’s long-term potential, with the RTS likely to recreate the ongoing chart dominance of its predecessor.

Creative Assembly has built upon the incredible quality of Empire to deliver an even more involving experience. Ben Walker, Sega

Released in March 2009, Empire debuted at No.1 in the All Formats chart and became the first PC-exclusive title to top the charts since Sega’s own Football Manager 2008. The publisher expects Napoleon to

PRETTY IN PINK: The new pink DSi hardware and software bundle can increase the appeal of the device

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The publisher attributed this expected success to the series’ devoted followers and Napoleon’s improvements over previous releases. Walker added: “The consistent quality of the

CHART CONQUERER: Sega reckons the latest Total War can follow in its predecessor’s steps to No.1

franchise has created a dedicated fanbase, which will once again be drawn by the

incredible depth and strategy offered in this critically acclaimed series.”

Napoleon: Total War hits retail on February 26th. Sega: 020 8995 3399

Nintendo shows retail some love with Valentine’s DS kit NINTENDO will be releasing a new DSi SKU in time for Valentine’s Day. The pink DSi is due to arrive as part of a new bundle and will be released across Europe on February 12th. The new version adds to the range of colours already available for DSi, including black, white, red, light blue and metallic blue. Nintendo’s junior product manager Zoe Cooper told MCV the creation of this new SKU was prompted in part by strong public demand. “Both retailers and a large portion of our female user base

have been asking for DSi in pink ever since we launched the original black and white DSi consoles,” she said. “We saw great success with the launch of the pink DS and DS Lite, and would hope that the pink DSi will see similar retail success.” Each pink DSi will come bundled with a free copy of Nintendo Presents: Style Boutique. The game was released on October 30th last year and has sold more than 100,000 units in the UK. Style Boutique challenges players to establish, maintain and expand a fashion boutique

and is key title in Nintendo’s efforts to engage with a wider female audience. Cooper added: “It was really important to make sure the right software is included so people are encouraged to make further purchases.” The release of the pink DSi follows a comprehensive campaign to raise awareness of the online functionality of Nintendo’s handheld, such as browsing the internet and downloading DSi Ware. It also precedes the upcoming release of the larger Nintendo DSi XL on March 5th. Nintendo: 01753 483700

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Casual giant eyes consoles Popular web portal Miniclip.com planning to release online mini-games as new boxed product for Wii and DS by James Batchelor THE TEAM BEHIND popular casual portal Miniclip.com are turning their best online games into console titles. The site has more than 550 games and an audience of over 50 million users per month.

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maximum exposure for our games in all key territories.” Miniclip believes its quirky IPs are perfect for retailers and is maximising all possible opportunities to get its minigames to wider audiences. The company plans to accomplish this via both boxed

Helping publishers release titles based on our successful IP can lead to profitable games. Rob Small, Miniclip.com

As part of a partnership with South Peak, the company will be releasing a number of its titles via retail. The deal kicks off with Wii and DS game Miniclip’s Sushi Go-Round next month. “We’ve enjoyed working with South Peak and anticipate the continuation of this relationship on further titles,” Miniclip CEO Rob Small told MCV. “Their strong distribution capabilities ensure we get the

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product and online games compatible with a Wii and PS3 web browsers. “We often see traditional developers devote an increasing portion of their resources to their titles and risk it all on having a possible hit,” said Small on the challenge of going up against triple-A console titles. “It is abundantly clear to us that partnering with games publishers such as South Peak and helping them release titles

Sushi Go-Round is just one of 550 games that stand to become hits on Wii and DS

based on our successful IP can lead to fun and profitable crossplatform games. “We also have a suite of free Wii-enabled games on the site and we have seen a massive increase in users who want to access these games on the Wii. “This increased demand confirms to us the value of

releasing further games for these casual consoles.” Miniclip’s Sushi Go-Round is due for release on March 5th, with an iPhone version to follow shortly after. Small believes the popularity of this title makes it an ideal retail debut for Miniclip: “Sushi Go-Round has been

played many millions of times on Miniclip.com,” he said. “We want to let our users play their favourite games on all platforms so it makes perfect sense for us to bring the game to Wii and DS.” www.miniclip.com

Lace Mamba targets 360, PS3 market THE NEWLY-FORMED Lace Mamba Group plans to be a major 360 and PS3 games publisher by Q1 2011. PC specialist Mamba merged with distributor Lace last month,

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PS3,” said Lace Mamba MD Adam Lacey. “We have a 360 product coming in May, and we hope to add a few more before the end of the year.

We have the funds ready and we want to be on current generation platforms in a big way by next year. Adam Lacey, Lace Mamba

and is already working on its first products for DS and Wii. The firm is shortly set to reveal its first Xbox 360 product, which will be released in May. “We know we need a presence on Xbox 360 and

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“We have been speaking to a few licence holders on some products, with some very famous brands. “We hope to get the video game rights to these and develop them ourselves. We

are also looking to develop our own IP. “We want to be on current generation platforms in a big way by Q1 2011. “The advantage we have is that a lot of publishers have overspent over the past three to four months, so can’t move that quickly into that space. We have the funds ready. We just need to choose the right product and genre.” As well as moving onto new games platforms, Lace Mamba Group is set to launch a digital downloads site dedicated to adventure PC titles next month.

Meanwhile, the company has also expressed interest in establishing its own games development studio. “At the moment we’ve got a lot of products coming out in Q1 and Q2, but once we have those launched we can see where the market is, and perhaps look at creating our own development studio,” added Lacey. “We were looking at it in 2009, but went down the outsource route instead. It is something we’re going to look into, but probably not until the end of the year.” www.mambagames.co.uk

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UPlay service to give Ubi titles a High Street boost Publisher expects dedicated online service will increase sales of its core releases by James Batchelor UBISOFT PLANS to integrate its online service UPlay into all of its major 2010 releases, the firm has told MCV. The system allows Ubisoft’s customers to unlock extra content and functionality

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constant development both ingame and on the online interface,” said UK marketing director Murray Pannell. “The essence of UPlay is to give the consumer more than just a boxed game and DLC. “It’s massively important for Ubisoft because it interacts with

UPlay is massively important for us. It benefits everyone, from Ubisoft to retailers. Murray Pannell, Ubisoft

across the publisher’s key Xbox 360, PS3 and PC games. The firm claims the service will help to boost its titles at retail, with a core community expected to improve sales. “UPlay will be implemented in most key titles this year, with

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gamers as they progress through a title, encouraging them to play, unlock more and ultimately share their experiences. “The more a consumer enjoys and completes one of our games, the more likely they are to buy another. So it

Splinter Cell Conviction will make full use of the UPlay service

benefits everyone, from Ubisoft to the gamers and retailers.” In addition to increasing the number of titles compatible with the service, Ubisoft will be developing the many facets of UPlay, such as the UPlay Shop. Pannell added: “We’re really excited about developing the

UPlay online service to deliver more rich content and more community services. It will add real value to our consumer across multiple games.” Future UPlay-compatible titles include Splinter Cell: Conviction and R.U.S.E. Ubisoft: 01932 578000

FORMATS: XBOX 360, PS3, PC PUBLISHER: SEGA DEVELOPER: REBELLION PRICE: £29.99 - £49.99 DISTRIBUTOR: CENTRESOFT CONTACT: 0121 625 3817

NAMCO BANDAI: Under a new European distribution agreement with Bethesda, Namco Bandai will distribute Fallout: New Vegas in several key European territories as well as Australia and New Zealand. The game is due for release later this year. ROCKSTAR: GTA: Episodes From Liberty City will hit PS3 and PC on March 30th. The former Xbox 360 exclusive will be available at retail and through PSN and Games For Windows Live. UBISOFT: Red Steel 2 will be released for Wii on March 26th. A MotionPlus-bundled SKU will also be available.

TOR ALIENS VS PREDA

RELEASED: FEBRUARY 19

NINTENDO: The company’s profits for the nine months ending December 31st, 2009 fell by 9.4 per cent to YEN 192.6 billion. More than 17.05 million Wii units were sold during the year, in addition to 23.35 million DS units. Software sales came in at 157 million units. MICROSOFT: Over 5.2 million Xbox 360 consoles were sold in the quarter ending December 31st – 13 per cent less than the same period in the previous year. Operating profit at Microsoft’s Entertainment and Devices division soared to $375 million, almost tripling the $130 million from Q4 2008.

EK E W E H T F O N IG A P CAM Sega launches a full assault on retail to entice fans and newcomers in the run-up to AVP’s release…

Sponsored by

THQ: Metro 2033 will arrive on March 19th.

TV/MEDIA There will be a three-week TV campaign across satellite and terrestrial channels. A special promotion will run on Channel 4 and Film4 in the form of a three-minute ‘mini-sode’ ad slot during Predator and Aliens. The publisher has also arranged a two-month cinema campaign. ONLINE High impact site takeovers and launch zones have been arranged on key websites. This will take a dual-phase approach: first promoting the demo and then focusing on the upcoming launch.

PRINT A print campaign will see both ads and editorial appear in specialist and lifestyle publications. A 12month PR campaign has secured eight front covers including coverage in

GamesMaster, PSM3, Official Xbox Magazine, 360 Gamer. OUTDOOR AVP was showcased at the Eurogamer Expo and the SFX Weekender.

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NEWS ANALYSIS: PC PIRACY

EA’s Mass Effect 2 introduces a new online hub which offers DLC only available to paying consumers

A NEW WAR ON PIRACY As illegal copies threaten the new blockbusters, EA and Ubisoft have unveiled opposing initiatives to thwart piracy. James Batchelor looks at the latest approaches to a long-running problem… NO MATTER what lengths publishers and platform holders go to when protecting their titles from illegal duplication, the proponents of piracy almost always find a workaround. From cracked and downloadable PC titles to the DS R4 cards, it’s an issue that has dogged the industry for decades and is unlikely to disappear in the near future. And yet publishers continue to find new ways to hinder pirates with an admirable determination. Within the last two weeks alone, publishing giants EA and Ubisoft both announced new initiatives that try to lessen the impact piracy has on the revenue made by their latest big hits. THE FRENCH CONNECTION Ubisoft’s is the most heavy-handed method of the two. The firm announced last week that future PC titles will require players to have a constant connection to the internet. Under this new system, the French publisher’s games will regularly verify themselves with the firm’s servers to confirm that a legitimately purchased version is being played. It’s a clear statement of how seriously Ubisoft takes piracy – and its black and white view on it – vetting every single copy to effectively shut out any pirates. Interestingly, the company is also using this initiative to reaffirm its commitment to consumers as well as its shareholders. Ubi’s piracy prevention system also requires users to upload game settings and save files to the server and this can be accessed from multiple PCs. It’s just one of the incentives Ubisoft has announced that asks players to seek their games through official channels – be it the High Street, online retailers or digital distribution. The publisher is also avoiding oftencontroversial Digital Rights

Management, which limits the number of times gamers may install a title on their machine. In the past – most famously with 2008’s Spore – strict DRM limits have arguably led to a surge in piracy as angry consumers look to circumvent this inadversely limiting copy-protection method. Despite this, Ubisoft’s announcement has still been met with criticism among the core PC gaming audience, with concerns arising that gamers could be locked out from their purchases should their web connection fail. The publisher has responded with a statement defending its decision to employ the ‘always connected’ policy, but since no further details have been given, it’s currently unclear whether consumers’ grievances will be answered. “We know this choice is controversial but we feel is justified by the gameplay advantages offered by the system and because most PCs are already connected to the internet. This platform offers protection against piracy – an important business element for Ubisoft and for the PC market in general as piracy has an important impact on this sector,” said a statement from the firm. “Any initiative that allows us to lower the impact of piracy on our PC games will also allow us to concentrate further effort on the creation and expansion of our intellectual properties for the PC.”

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GUIDING THE MASSES Meanwhile, Electronic Arts has taken a different approach. Days before the release of Mass Effect 2, the publisher announced that all DLC for the game will only be available through The Cerberus Network, a downloadable hub for both free and paid-for content.

Only those who buy new copies of Mass Effect 2 – either via digital distribution or as a boxed product – are able to use The Cerberus Network, and the hub is activated by a unique activation code, with one code per legitimate copy of the game. In this way, EA is able to channel all DLC purchases through a single, controlled interface. While this method does not provide as concrete a defence against pirated copies as Ubisoft’s constant server verification, it boasts a double-barrelled

We know this choice is controversial – but we feel it is justified by the gameplay advantages offered. Ubisoft statement on its new anti-piracy measures effect by dissuading consumers from playing illegal or pre-owned copies – the latter another ongoing quandary for games retailers and publishers. More importantly, EA’s system does hold merit as a form of deterrent. DLC is, as we know, more and more prominent in today’s blockbuster releases, with exclusive content deals – such as that of GTA IV’s Episodes – proving to be a major selling point. By preventing those with illegal copies from accessing this content, it encourages would-be pirates to purchase their games legitimately, in order to guarantee access to the full experience. But that’s not all, EA is allowing consumers to buy codes for The Cerberus Network, accommodating for those that haven’t bought new editions of Mass Effect 2. Should those with pirated copies purchase these codes, the publisher will – to an extent –

minimise its losses, effectively finding a way to monetise pirates. The publisher has already taken the same position on previous titles, with key DLC only available to those who bought new copies of Dragon Age: Origins. It is in no way an ideal solution, but one that at least prevents pirates from enjoying the fruits of developers’ labours for free. CRIME AND PUNISHMENT The new policies of both Ubiosft and EA are in stark contrast. Ubisoft will establish a concrete defence against piracy, a barrier that declares zero tolerance, and one that presumably will apply to all titles. By comparison, EA is seeking to protect key content for its biggest titles in a way that enables them to coax pirate gamers into purchasing the very experiences they hoped to steal. Only time will tell if it is effective, or if DLC proves to be a strong enough incentive to deter gamers away from illegal copies and towards retail. It is interesting that for all their differences, the two systems hold one thing in common. The main focus of anti-piracy initiatives is usually to punish the perpetrators – most notably, France’s ‘three strikes and you’re out’ law that disconnects those who illegally download content. Conversely, the effect of both Ubisoft’s ‘always connected’ policy and EA’s code-restricted DLC channel are two-fold. Not only do they both punish pirates, and introduce different ways to ‘convert’ those pirates, they also try to reward those who legitimately purchase their games. It could prove to be a crucial mindset-change in the ongoing battle against piracy.

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MCV INTERVIEW GIAN LUZIO & PAUL SULYOK, GREEN MAN GAMING

Time to go

Green? Green Man Gaming wants to revolutionise digital downloads and bring it into the mainstream. But the idea of trading in digital product is ludicrous, right? Christopher Dring speaks to managing director Paul Sulyok and COO Gian Luzio to find out more...

IT HASN’T EVEN gone live yet, but Green Man Gaming has already got the games industry talking. The digital retailer arrives in March and lets consumers worldwide tradeback their digital product for money off their next purchase. It’s a proposition that has split opinion. Some believe the service could be revolutionary, while others accuse it of being nothing more than a glorified rental service. But COO Gian Luzio is confident Green Man can prove the sceptics wrong, and believes that a trade-in offer will encourage consumers to buy more impulsively. “The inability for consumers to monetise their games collection has been holding the digital market back,” he says. “Publishers want to sell as many games as possible, but they don’t just want to sell the big triple-A games, they want to sell back catalogue titles too. Yet if customers have to spend £40 a game then they are going to be cautious and probably just go for the triple-A release. We believe that letting customers monetise their digital games will encourage catalogue sales and impulse purchases.” The sytem works likes this: If users want to trade back their download, Green Man Gaming will deactivate that user’s game code. Once done, that code will then be made available again at a ‘pre-owned’ price. This is the element that attracted the most criticism. Sceptics point out that whether the code is new or used makes no difference to the end user. There’s no tatty box, dogeared manual or scratched disc to deter a digital downloader from buying second hand. Therefore, is this not just a way for Green Man Gaming to sell digital product for less? And what’s in it for the publishers?

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RETAIL FACTOR: COO Gian Luzio plans to partner Green Man Gaming with a variety of online retailers

“Pre-owned is pretty good for the consumer and encourages them to buy the latest releases,” adds Luzio. “So publishers do get some small benefit from the current retail preowned market, as it monetises games and helps customers buy the next one.” MD Paul Sulyok continues: “What we are proposing is something where everyone benefits. Every single time that game is re-traded, for zero cost to the publisher, they will get royalties.”

Green Man Gaming plans to revolutionise the ecommerce market for digital downloads

THE CONSUMER CHALLENGE

But attracting the publishers isn’t Green Man Gaming’s biggest challenge. The retailer has already got a series of companies on-board, from small indie studios to publishing behemoths. And the firm expects to have 2,000 games available on its website by the end of the year. Instead, the real challenge for Green Man is bringing in the customer. Last week Valve revealed that its PC distribution platform Steam now has 25 million members, a number the distributor has built up over years in business. So how can Green Man Gaming hope to compete? “The goal is to reach the bigger PC audience,” says Luzio. “We want people to play games, we want them to feel comfortable making their purchase, and

the audience and grow the PC market.” Sulyok agrees: “You have to take your hat off to Steam. They have done a great job pioneering the digital market. “Our approach is slightly more open. We have multiple partners, across traditional retail outlets and nontraditional retail. Our objective, with Gian We know that there is going taking the lead, is to grow to be sceptics about Green the digital market, and to Man Gaming, and that we’ll think slightly out of the need to do some educating. box – which I think we’ve Gian Luzio, Green Man Gaming done well so far.” Indeed, Green Man we want them to feel that they haven’t Gaming’s other big plan is to sell digital wasted money as that product still has product through online retailers. But some value. this is hardly a new idea, with a wealth “Steam is a fantastic platform. They of white label packages already on the have carved a market for themselves. market – not least Gamestreamer and Obviously some of the products we sell Metaboli. But this is why Luzio joined will be similar, but we aim to increase the team late last year.

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MCV INTERVIEW GIAN LUZIO & PAUL SULYOK, GREEN MAN GAMING

During his seven-year stint at Play.com, Luzio helped the online retailer become a market leader in games – with the firm picking up three MCV Awards and two Golden Joystick awards in the process. He enjoyed similar success during a stint at The Hut Group last year. So Luzio has views on online retail – and he feels the current white label model does not work. “We are not offering a white label solution,” says Luzio. “We are offering to integrate digital product seamlessly into their current retail proposition and pay royalties in perpetuity on game sales. “I come from a retail background, and I’ve seen a number of different digital platforms, but I’ve never been excited enough by them to implement their proposition. “This is because they offer very little to the consumer.

“Retailers are great at selling games “With our service, things such as money off something else in that store – and expanding the audience, but they bonuses, discounts, promotions, crosssuch as a T-shirt or iPod. don’t just want to sell one product to a promotions and so on, remain within But for all the promise, Green Man customer and wash their hands with the partner’s shop. Customers can buy Gaming has yet to announce its that relationship. With our system, they their groceries, or a book, or a t-shirt publishing, development or retail will keep in contact with that customer and get their digital download at the partners. The website hasn’t even gone and keep the revenue going. same time.” live yet, and industry commenters on “A white label solution is MCVUK.com remain a bolt-on. A retailer signs up unconvinced that the Our approach is slightly more and then they wash their trade-in concept can open than Steam. We will hands with it. We don’t attract a wider PC have multiple partners want that to be the case consumer base. across retail outlets. with our service.” “We know there are Paul Sulyok, Green Man Gaming Sulyok adds: “Our going to be sceptics and partners set us a challenge that we’re going to have where they wanted to retain the A closer integration of physical online to do some educating,” concludes Luzio. customer on their site through their retail and digital could turn out to be “And we know we need to go from checkout. They did not want a white more attractive than Green Man zero customers to loads very quickly – label service where customers have to Gaming’s headling-grabbing trade-in I’m very conscious of that. We need all drop off their website and go on a concept. Luzio also didn’t rule out the the content providers on-board and then totally different site – albeit with a bit of possibility of users trading in their games we need to hit the ground running their branding. at one of these retailers and getting when we launch.”

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A LONGER CONSOLE CYCLE All three consoles are growing their share of the market – and arguably none have reached the half-way point in their lifecycle

The generation game With new peripherals and controllers on the horizon instead of new consoles, the lifecycle for current machines is longer than ever. Is that a good thing for the trade? Michael French speaks to Sony, Nintendo and Microsoft to find out…

IN THE MIDDLE of last year, make these new add-ons commercially Microsoft’s game software boss Phil viable for all. Spencer offered a telling quote about the GENERATION KILL direction of the games industry to MCV. But hold on a minute – without the It wasn’t about motion controllers or introduction of new consoles the entire new online services – it was about the value chain misses out on a traditional market forces that are allowing those money-making highlight, doesn’t it? things to appear: “Do we need a new console? I don’t think The games industry has we need one right now.” While the industry moved on and as a result saw a relatively quick does not rely so much on new switch from Xbox, hardware launches. GameCube and PS2 to Michael Denny, 360, Wii and PS3, this SCE Worldwide Studios generation is shaping up Retailers lose out on the midnight to be quite different. The other formatlaunch and ‘coming soon’ tease that holders agree with Microsoft: we don’t whips a core of consumers into action need new consoles, even through around a set date – most software traditionally this is the point in the cycle launches pale in comparison. when they start to talk about them and Developers miss out on the spec them out to developers. generational merry-go-round of courting And with more diverse interface from the format-holders and publishers, technology on the way – Project Natal, when independents for one are often Wii Vitality Sensor and PS3’s motion roped in to provide launch titles and controller – this all makes complete pitch all kinds of prototypes. sense: the longer cycle is needed to

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Publishers don’t feel the benefit, either; there’s no new wave of marketing support from the first-parties which whips up excitement to sell third-party software. Meanwhile format-holders have lost that useful crutch to re-engage consumers and the industry with something new to talk about. And consumers suffer, because as hardware generations increase game content arguably gets more familiar – new IP is scarcer and more populist titles prevalent. At least, that’s the thinking when it comes to the downside of a longer cycle. Formatholders reject that idea, however. It’s not a challenge at all, they say – it’s an opportunity. “The games industry has moved on significantly and as a result does not rely so much on new hardware launches,” says Michael Denny, VP of Sony Worldwide Studios. “Of course new hardware causes a large spike in consumer interest, but so does the

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A LONGER CONSOLE CYCLE launch of new, exciting games. Modern Warfare 2 didn’t need new hardware to break all the records.” While there is some curiosity as to what ‘next-gen’ might mean now that we have what was once considered next generation so freely around us, Denny argues that the extension of the cycle builds more creative potential. “Of course people want to see what next generation games look like, but history shows that games improve the further into a lifecycle you go – and with growing installed bases, demand and excitement grows as well,” he says. “2009 was a great year for games, especially in the home console market

Lowe, Nintendo’s senior product Microsoft also says the longer manager for Wii. generation is a good thing for retailers, “Having said that: we strongly believe publishers and developers. that there is still huge potential for both “We are always looking for ways to Wii and DS to continue to bring in new enhance our current generation gamers and change rejecters’ hardware offerings, and the extended perceptions, and that this There is still huge potential will continue to help grow for both Wii and DS to bring the UK gaming industry in 2010. In the past some in new gamers and change areas of the industry have rejecters’ perceptions. waited for, and almost Rob Lowe, Nintendo expected, a change of cycle every five years as a way of reconsole lifecycle gives us and our energising the industry and restarting partners tremendous opportunities to be interest in it. This current life cycle more creative, whether through appears to be shaping up differently – software, cutting-edge services over

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when they are driving the industry forward as much as the platform holders.” Lewis agrees: “New console launches and add-on hardware can certainly generate interest and excitement, but we are seeing that software is an equal draw for consumers. As the blockbuster launch of Modern Warfare 2 demonstrated, software is getting to the point where it can almost match the launch of a new console for sheer excitement.” Adds Denny: “The success we saw with Uncharted 2: Among Thieves

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CONSOLE KINGS: From left to right – key format-holder execs Michael Denny (Sony), Chris Lewis (Xbox) and Rob Lowe (Nintend) say a longer cycle is good for the industry

where there were no new hardware launches. 2010 is shaping up to be an equally exciting year for games with both new and innovative experiences coming to the market and the expansion of a number of existing franchises.” GROWING THE MARKET

and what has gone before shouldn’t be expected to be repeated again. “The benefit of hardware remaining relevant for longer is the fact that it gives more developers a chance to get the very best and most out of current generation systems, rather than the cycle changing just as people have become used to maximising a console’s performance and abilities.

Expansion is a key thing for all three format-holders, especially when it comes to pushing our New console launches can seemingly long-in-thecertainly generate interest tooth current platforms to new audiences. and excitement, but software “Our continuous is an equal draw. challenge is to expand Chris Lewis, Xbox the gaming audience and increase the social acceptance of “For retail, new hardware obviously video games to a level that is currently drives people into stores and without enjoyed by the likes of television and new hardware it will be up to film – this is a long term goal and we developers and publishers to create will probably go through various interesting, new and disruptive titles to hardware lifecycles before Nintendo, drive people to store instead – and of and the wider industry, gain that course retail needs to fully support them level of acceptance,” explains Rob in order to realise this.”

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Xbox Live or innovations like Project Natal,” says Chris Lewis, European Xbox boss. “This brings huge opportunities for developers and publishers alike.” SOFT’ FOCUS

The longer console cycle creates a bigger market for big software hits – levelling the field between platform and publisher, say the format-holders. Lewis, Denny and Lowe all point to recent big sellers they think were only been possible with the focus and stability a longer cycle provides. “Launches such as Wii Fit, Professor Layton, Mario & Sonic at the Olympic Winter Games and of course Modern Warfare 2 all show that a software launch can sometimes eclipse even a hardware launch in terms of scale and money generated at the tills,” says Lowe. “Therefore there really isn’t any way that publishers are missing out

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shows that if you bring out a great game, it will generate excitement and revenue.” So as the generational cycle extends and consoles consolidate their places in the home – rather than live on borrowed time until the next model comes out – the pressure on formatholders eases up. And instead the impetus for them is in delivering innovations that provide new reasons to interact with a console – rather than bleed it for all its quick worth and move onto the next. On 360, Lewis doesn’t just point to things like Natal, but also extra services on Xbox such as the recent additions of Facebook, Twitter and Zune video services as well as the upcoming launch of Game Room – which effectively repackages retro games for a new audience – as key examples of this. On PS3, Sony is similarly looking to new territories – and Denny says the firm sees it as its duty to seek them out

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A LONGER CONSOLE CYCLE

[AN ANALYSTS’ VIEW] “THIS CYCLE WILL BE ENTIRELY DIFFERENT” Nick Parker explains why this current generation of consoles is unlike no other…

SHOCK OF THE NEW: A longer console cycle has allowed Sony to invest in new avenues for PS3 games, such as 3D technology

for the rest of the industry: “It is up to us to keep pushing the boundaries, whether by creating new experiences, reinventing existing franchises or offering new technology such as motion controlled games and 3D titles.” All of which creates ‘formats within formats’ for developers to target. Denny adds that the longer cycle has specifically allowed Sony’s development teams “to be more focused on ensuring that we utilise the full potential of the consoles we have”. He says: “It is our challenge to continue to improve our games by pushing the boundaries of what is possible. The longer the lifecycle, the more opportunities we have to do that. On PS2, eight years into its lifecycle, we launched God of War II, arguably the best-looking game on the platform. That progress is only possible with time. That is what makes PlayStation 3 so exciting. We are only three years into its lifecycle.” Nintendo has also experienced early benefits from a longer cycle. The installed base of Wii and DS are reaching so far uncharted territory in the UK for the games industry – both are the fastest selling consoles in their respective fields, DS is now the best ever selling console in the UK. “It is a huge opportunity for publishers to publish games that can

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appeal to various different demographics that move beyond the traditional ‘Male, 16 to 34’ gamer,” says Lowe. “Our targeting for Wii and DS has always been everyone aged five to 95, and we are almost at a stage where our installed base reflects this broad targeting. We hope that other publishers and retailers see this as an opportunity to really take a mass-market approach and realise that a good quality title

Motion sensing and 3D technologies will cause people to look at the games industry in a different light. Michael Denny, SCE Worldwide Studios backed up with a robust marketing campaign can sell to any audience that’s appropriate. Wii and DS both have such a broad installed base that success in any genre is possible.” THE NEW WAVE

But back to the original question about the industry losing out with no new machines on the horizon. Can the alternative – that is, new areas such as motion sensors and 3D tech, both of which have come about due to the longer generation – really refresh a format? Can they create as much excitement as an entirely new console? Nintendo has proven that the answer is yes – with the right kit, at least: “As

long as those add-ons are offering something new and innovative then by all means that can re-energise a format, or even bring in new users to it,” says Lowe, pointing to the proven success of the Balance Board and Wii Motion Plus. Nintendo’s next innovative peripheral, the Wii Vitality Sensor, is due later this year. Sony’s Denny certainly thinks similar new interface add-ons can help relaunch established consoles and introduce them to new users. “New technology – such as our new PS3 controller blending of motion sensing and vision technology, and 3D gaming – offer us an opportunity to reengage with the consumer and showcase the wonderful innovation that takes place throughout our industry,” he says. “Both of those technologies are launching this year, at a time where PS3 is going strong. Those technologies will cause people to look at the games industry in a different light, cause debate and give us even more scope for new experiences. Our dev teams are having great fun creating new experiences with both new IPs and existing IPs. We believe these experiences will excite the current PlayStation fan, whilst also creating new interest with people who may never have thought about gaming.”

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I don’t think that there will be any challenges for the games industry if we don’t see major new hardware releases for some time for the following reasons: The industry has moved on from a cyclical pattern to a smoother line of growth because of the introduction of a new direct to consumer value chain emerging through online games which devs/publishers can exploit as well. The next-gen console may be an entirely different format recognising the growth in digital distribution, which in turn will be about bite-size gaming experiences rather than huge day one sales and marketing activities. This will negate the need for major console launches to rejuvenate a declining market. We are only three years into the current cycle with all manufacturers on board at the same time. Historically, the third, fourth and fifth years are the best in terms of sales (and getting the most out of the console architecture) so until 2011 is out of the way, the industry should not be thinking about new arrivals. Publishers can concentrate all of a studio’s efforts on known SDKs rather than having to tool up for a new breed. We must believe that this cycle will be entirely different – longer than previous cycles but new technologies creating new revenue drivers in the online space exist today and will totally change the old games industry eco-system. Of course, new add-on hardware, as long as it creates real benefits for users, will assist sales. Motion capture could slow down the inevitable decline but, if it works, it will be around for years to come, whatever the console – it will be part of the revolution of gaming experience rather than a shot in the arm to temporarily help out a tired generation of consoles. As for the vast majority of consumers, they get the most excitement out of the games they play rather than the launch of a new console (look at the raft of exciting titles which held up PS2 in its latter years or what Donkey Kong Country did for SNES in 1994 when the console was on its last legs). It is only the geeky early adopters (and journalists) who work themselves up into a frothy mess when a new console is announced. Remember, the best games during a console’s lifecycle are not at the beginning but in the mid to end. So even if a new console is launched in 2013 don’t expect the quality of games to improve overnight.

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