Don't you all have a cell phone? — BlizzCon 2018
"The biggest gaming platform on the planet is mobile," Phil Spencer, head of Microsoft's Xbox business, said in an interview with Bloomberg, 1.5 billion people around the world play games on mobile phones, but Microsoft lacks a native mobile phone platform and does not have much creative ability to make popular mobile games, and the acquisition of Activision Blizzard is a key step for Microsoft to enter the mobile game market.
Microsoft's ambition is not just to make money from mobile games.
According to The Verge, the UK regulator CMA, which is investigating Microsoft's $68.7 billion acquisition of Activision Blizzard, said in a recent filing with the CMA:
The acquisition of Activision Blizzard will enhance Microsoft's ability to create the next generation of game stores, which will operate on a range of devices, including mobile devices, with its acquisition of Activision Blizzard's content (IP). Building on Activision Blizzard's existing player community, the Xbox Store will expand to mobile platforms to attract players to the new Xbox mobile platform.
Microsoft has also considered the difficulty of moving mobile users from Google Play and the AppStore to the Xbox mobile platform, trying to attract developers with "0 commissions" on the one hand, and hoping to make players more inclined to try new platforms by providing well-known and popular content - in addition to its own "Minecraft", the most relied on is Activision Blizzard's "Candy Sagaga", "Call of Duty Mobile Game" and "Diablo Immortal". According to Sensor Twoer data, "Diablo Immortal" earned more than $100 million in the global mobile game market (not counting the national server) in just 8 weeks after its launch, second only to the historical record of "Pokemon GO" breaking 100 million in 2 weeks.
"Diablo Immortal" revenue breaking 100 million is second only to "Pokemon GO", image from: SensorTower
The importance of the successful acquisition of Activision Blizzard to Microsoft is evident. But with Microsoft's $68.7 billion — 7.8 times Activision Blizzard's record annual revenue — also entering the mobile gaming market, a larger backdrop is the collective shift in the console gaming industry.
Heading out for mobile gaming
On August 29, Sony announced without warning the acquisition of game studio Savage Game Studio, building on this new mobile division, which will be independent of the existing console game division and focus on making mobile triple-A games based on existing or new PlayStation IP.
This is a major bet for Sony Interactive Entertainment (SIE) for the mobile gaming market, and the FGO published by Aniplx, owned by Sony Music Entertainment (SMEJ) of Japan, has already achieved great success in the mobile game market, contributing nearly two-thirds of the revenue of station B at one point.
Fate Grand Order, image courtesy of FGO
Earlier, SIE President Jim Ryan also said at a business briefing that it is estimated that by fiscal 2025, half of the games released by Sony each year will be coming to PC and mobile devices.
Not just Sony, EA bought Glu Mobile for $2.1 billion last year in an attempt to gain the gaming capabilities of the world's largest gaming platform. In May this year, EA launched the "APEX Mobile Game", sweeping the number one iOS free list in 71 countries and regions. In addition, there are a number of game manufacturers, including Ubisoft and Square Enix, who are more active in the mobile game market than in the past, but when it comes to game manufacturers, they must still be unable to bypass Nintendo.
Nintendo's starting point for entering the mobile game industry is the famous "Pokemon GO". In 2016, Nintendo and The Pokémon Company teamed up with Niantic, a spin-off from Google, to launch Pokemon GO and became a huge success, setting a number of game industry records.
Since then, Nintendo has released Super Mario Run, Fire Emblem: Heroes, Animal Crossing: Pocket Camp, The Lost Dragon Covenant, Doctor Mario World, and Mario Kart: Tour. Among them, the buyout Super Mario Run has 227.2 million downloads, and "Fire Emblem: Heroes" reached the $1 billion mark in revenue in June this year.
Nintendo mobile game revenue, image credit: SensorTower
But "The Lost Dragon Covenant", as a key product jointly launched by Nintendo and Cygames, has become an outcast. In a 2019 Wall Street Journal article that Nintendo did not want players to overspend, executives at CyberAgent, the parent company of Cygames, complained:
Nintendo has no interest in generating a lot of revenue from a smartphone game and would earn more if we managed the project alone.
Nintendo's insistence, in addition to the importance of the foundation, I am afraid that it is also inseparable from the historical success of the Switch on mobile gaming devices, but not only is it not a guiding light for game consoles, but it will make the future bleaker.
The end of Moore's Law, the end of the host industry
Although Nintendo has not publicly admitted it, Swicth can basically be regarded as a handheld, a mobile gaming device. The success of Steam Deck and the ubiquity of Tencent and Logitech's new cloud gaming handhelds, cross-platform development and gameplay seem to hint at a new possibility for gaming devices. But none of this has anything to do with consoles.
Since 1972, every generation change of game consoles has been a revolutionary evolution of console performance and picture quality, the most intuitive is the change of PS1 to PS4 four generations of games. Today, in the ninth generation, players complain, developers complain, and the core chip provider once again warned everyone:
Moore's Law is dead.
At the end of September, Nvidia released the RTX 40 series, and the soaring price has become one of the most concerned points of the outside world, and when asked about the price increase, Nvidia CEO Jensen Huang said to get used to it, "Moore's Law is dead." As early as 2017, he spoke publicly, and this judgment has been more and more widely recognized.
A16 vs A13, image from: Apple
Even Apple's latest A16 chip, CPU performance is only about 40% higher than the A13 3 years ago, GPU performance compared to the previous generation has hardly improved. The development of chips is visibly slowing down, behind which is the final difficulty faced by Moore's Law - the development of chip processes is about to hit the ceiling of physical limits, 3nm is close at hand, but 1nm is still in the stage of "expected breakthrough".
There are not many people who can face optimistically, even TSMC founder Zhang Zhongmou can only hope for:
"There is no way out of the mountains and rivers, and there is another village in the willows."
When the room for improvement in game performance and graphics becomes limited, and more and more games choose cross-platform login, how can game consoles persuade players to buy expensive console equipment? However, even if the fate of game consoles cannot be saved, game software is still the future.
Nintendo and Microsoft's strategy is clear, with the former opting for Swicth and the latter for a Game Pass subscription. As the biggest winner of the last generation, Sony was the most entangled and passive, but still launched a subscription system under pressure from Microsoft and the outside world, and untied first-party games from consoles.
As Nintendo President Hasegawa Shuntaro said at the beginning of his tenure, "the core of the business may no longer be home consoles", games or games, but PCs, mobile phones and even new devices will become a wider choice.
Vast world, great achievements
In that press release for the acquisition of Savage Game Studio, Sony revealed that the studio was working on an unannounced triple-A continuous operational action mobile game, which is hard not to think of Genshin.
The global success of Genshin is a shock to the entire game industry, and with high investment and high quality (mobile games) to collect billions of dollars in revenue, triple-A mobile games have also become prominent schools. Mobile game manufacturers try to replicate the success of "Genshin" to a certain extent, and traditional game manufacturers are also dazzled by the cost and income of developing their own 3A games.
Image courtesy of SensorTower
The above-mentioned "The Lost Dragon Covenant" actually relied on the investment and quality of class 3A, and quickly exceeded $100 million in revenue in only 11 regional markets, only due to the difference in philosophy between Nintendo and Cygames and the emergence of "Jockey Girl".
Perhaps even more convincing is Activision Blizzard's transformation. According to Activision Blizzard's second-quarter earnings report this year, more than $800 million in revenue from mobile games is more than the console and PC platforms combined in the same period. At the same time, the market results of "Diablo: Immortal" launched this year are obvious to all, and the King (Candy Legend), acquired in 2015, generated more than $1 billion in revenue in 2021, in addition to the more than $1.5 billion in paid revenue announced by "Call of Duty Mobile Game", and the "Call of Duty: Warzone" mobile game that is scheduled to be officially launched next year.
According to Newzoo's 2022 Global Game Market Report, the global game market is expected to reach $196.8 billion this year, of which the mobile game market accounts for 53%, up 5.1% year-on-year to $103.5 billion.
Image courtesy of Newzoo
On the one hand, there are game consoles that do not know whether there is a future, and on the other hand, there is a huge and growing mobile market, and it is self-evident who has more prospects. Today, when GaaS (service as a game), cross-platform, and mobile have become the "elephant in the room", the collective transformation of traditional game manufacturers is also to seize the key window period.
Ma Xiaoyi, senior vice president of Tencent, mentioned in an internal sharing that most of the current better game IP and gameplay come from PC and console (game console) platforms, and in the context of European and American manufacturers beginning to actively embrace GaaS and mobile games, (Tencent) must not only seize this opportunity, but also learn from these top teams, because over time, these big manufacturers will begin to make their own networks and mobile games.
Whether Microsoft and Sony, EA and Activision Blizzard, there is no lack of technology and experience in making high-quality games, but the switch of platforms not only means changes in the interactive interface, but also tests the development and operation capabilities of game manufacturers on the mobile phone platform, which also requires those game manufacturers who are moving towards mobile phones to seize the window to learn.
The question is whether the more advantageous will be the ground snake or the dragon crossing the river? This is the new game.