Update Patch - July 2023

  We are now over halfway through a busy 2023 for the gaming industry, both in and outside the games. On our screens this month, dinosaurs flooded the streets in Exoprimal, Nintendo had another new entry in a long-running series in Pikmin 4 and Telltale returned with the first episode of The Expanse: A Telltale Series. Plenty happened behind the scenes too and as usual, this column explores a plethora of developments in an Update Patch that can only begin with the biggest news.

1. Microsoft Activision Developments

Firstly, the big news that has dominated the gaming landscape for about 18 months. 

Following the FTC trial to delay the acquisition, Judge Jacquline Scott Corley ruled in favour of Microsoft to allow Microsoft’s acquisition of Activision Blizzard King to proceed. In her ruling, Judge Corley stated the FTC was “[un]likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition”. The U.S. trade body did attempt to appeal the decision but this was rejected by the Ninth Circuit Court of Appeals and led to a path for the acquisition to be completed in the U.S.

Shortly following the initial decision, the Competition and Markets Authority (CMA) in the U.K. announced that it would work with Microsoft and Activision on creating a revised deal. To this end, the appeal the game companies launched with the Competition Appeal Tribunal was successfully halted by both parties and Microsoft and the CMA were granted two further months to come to an agreement.

In order to complete the transaction, both Microsoft and Activision have needed to extend their own agreement to merge. This has been agreed with both parties and the companies now have until the 18th of October to complete the merger, an extension of three months that Microsoft President Brad Smith called “ample time to work through the final regulatory issues.” Smith also added that all existing commitments would be honoured as they continue through CMA negotiations.

Finally, Sony has signed a “binding agreement” with Microsoft to keep the Call of Duty franchise on PlayStation platforms for ten years. In a statement to The Verge, Xbox head of global communications confirmed the length of the agreement and confirmed the deal only extended to the Call of Duty series and not any other IP under the Activision Blizzard King umbrella. Sony initially rejected a similar offer including all ABK games back in December of last year following negotiations between the companies.

2. Emile Morel Passes Away

Tragic news to recount now out of Ubisoft as creative director of Beyond Good & Evil 2 Emile Morel passed away suddenly at the age of 40. 

Ubisoft Montpellier confirmed the news in a statement on LinkedIn, stating in tribute that “For us, Emile was a close friend and a boundless source of positive energy. We all valued his passion and the way he told stories. We will never forget Emile and his immense contribution to the BGE2 universe will forever endure.” Former colleague M. Gabrielle Shrager commented on the same platform “A cherished colleague for over a decade at Ubisoft Montpellier, we laughed and wept through good times and bad, and shipped a lot great games together.”

Morel began working at the company in 2009 following stints working on games such as the excellent Test Drive Unlimited at Eden Games. Morel would work on a number of projects at Ubisoft, including becoming creative director for BGE2 earlier this year, with arguably his greatest work being lead designer behind the brilliant Rayman Legends, one of my personal favourite games of the previous decade.

Morel’s work pointed to an excellently skilled designer and we at startmenu wish his friends and family our deepest sympathies.

3. Sega of America Union

Unionisation has become a hot topic in the gaming industry following years of stories of crunch culture, harassment scandals and unhealthy working environments. Another company that is seeing unionisation efforts take place is with the workers of Sega of America.

A vote of over 200 employees across multiple departments including QA, development, marketing and more saw a final vote of 91-26 in favour of the formation of a union. As noted by Eurogamer, the planned union is notable for it being the largest multi-department union at a major video game company, with only five unions existing in the U.S.A at all. Of the vote, SEGA translator Ángel Gómez provided a statement, noting that the union will “be able to protect the parts of our jobs we love, and strengthen the benefits, pay, and job stability available to all workers.” Additionally, Gómez highlighted the ripple effects this could have for workers across the industry, stating “Together, we can raise standards for all workers across the industry.”

The movement for unions has gathered pace over the last few years. Other large unions include a QA Testers union at Zenimax Studios which has been officially recognised by parent company Microsoft. Similarly, QA testers at Raven Software, owned by Activision Blizzard, have unionised following a lengthy effort which saw allegations of management interfering through town halls and holding meetings that claimed the union would hurt development and benefits for all employees.

4. Video Game History Foundation Study

Next was a study authored by Phil Salvador of the Video Game History Foundation and the Software Preservation Network with stark figures on the current status of game preservation. 

In the study, a dataset of 4,000 games released prior to 2010 was examined, looking specifically to see if “they have been reissued or are otherwise still available through their rightsholders”. Their study found that 13.27% of classic video games in the study are currently available for purchase directly through companies and not secondhand retailers, and compared this figure to the 14% survival rate of American silent-era films. The figure for games decreases for various subsets, with 12% of PlayStation 2 games being available, all the way down to just 4.5% of Commodore 64 games. The paper does note the lack of surprise at these figures and posits in its background the challenges the industry faces that have resulted in these issues, such as the technical and monetary challenges to port old games to newer platforms without emulators, licensing issues that prevent a re-release, rights ownership issues which may prevent re-release, and the increasing digital marketplace resulting in less physical issues.

One of the key solutions advocated for by the organisations in both the paper and their summary blog is to do more work with libraries and museums to preserve gaming’s past. Whilst the paper does avoid detailing specifics, the blog mentions “What we’re asking with this report is for the game industry to acknowledge that most classic games are out of print and that the commercial market alone can’t solve this… We’ve rigorously proven that less than one-fifth of all classic video games are still in print—and that’s not enough for what we need.” 

5. UK Games Industry Loot Box Restrictions

The legality and legislation around loot boxes has been hotting up across Europe in the last few years, and the UK has now begun to take a closer look at the system in video games.

This month, Ukie, the body representing the industry in the UK has set out 11 industry principles for developers to follow. The principles include introducing technological controls to restrict people under 18 from making purchases, driving awareness of those tools, disclosing loot boxes in a game prior to the purchase, giving clear probabilities of items when opening and requesting a commitment from developers to produce "lenient refund policies". 

The principles were designed by a technical working group made up of "representatives across the video games industry", and were put together by the U.K Government's Department for Culture, Media and Sport.

This comes following a two-year study by the government to determine whether loot boxes would be regulated as part of a review of the UK Gambling Act 2005. The department's decision was not to do this via the government but to form a group with Ukie to have the industry self-regulate. Nadine Dorries, the Head of the Department at the time, said at the time:

"Games companies and platforms need to do more to ensure that controls and age restrictions are applied so that players are protected from the risk of gambling harms. Children should be free to enjoy gaming safely, whilst giving parents and guardians the peace of mind they need."

The approach is different from other European countries with the Dutch Government seeking a ban on them and Belgium banning them in 2018, although recent studies have indicated their ban isn't working due to a lack of enforcement.

6. Ubisoft Conference Call & Accounts Issues

Finally, Ubisoft CEO Yves Guillemot was speaking following the release of the company’s Q1 financial results and the month after their Ubisoft Forward event. 

Net sales for the company were down 9% to €288.9m but despite these figures, Guillemot was keen to point out positives, stating the figures were “better than expected” and also noted the “strong activity” of the company’s live service games. The company also touted its upcoming games, with 10 games planned for the financial year 2024. Nine of these were named and include Assassin’s Creed: Mirage, Avatar: Frontiers of Pandora, Prince of Persia: The Lost Crown and apparently Skull and Bones. 

Guillemot also took note of Microsoft’s acquisition and called its progress “good news” for Ubisoft due to the positive signs it gives for Ubisoft’s own mobile games. On the mobile strategy, Guillemot said: “Microsoft is saying that the mobile part of the Activision deal is important, so all the investment we are making to be stronger on mobile is also in line with that, so all those elements will help the value of the company to grow.” The company is due to release Rainbow Six Mobile as part of these efforts.

The company also had to deal with controversy regarding the deletion of old Ubisoft accounts where a user posted an image to Twitter with an email saying the user’s account would be deleted due to inactivity and that purchases associated with the account would also be done. A Ubisoft Support tweet seemed to confirm this, and Kotaku reached out to confirm a number of considerations are made by Ubisoft, which seemingly confirmed accounts with purchased games aren’t eligible for deletion.

Patch Notes:

• EA has been busy as usual, opening a new studio entitled Cliffhanger Games to work on the long-rumoured third-person single-player Black Panther game. The company has also unveiled the branding and features behind its next football entry, EA Sports FC 24, with new volumetric data from real-world games.

• Speaking of opening new studios, Hitman developers IO Interactive has opened a new studio in Brighton to work on its James Bond game and its other unannounced fantasy IP, making it IOI’s fifth European studio. Dead by Daylight developers Behaviour Interactive has also opened a U.K.-based studio in Cornwall composed of developers from recently closed AntiMatter Games.

• Following a guilty plea for insider trading, Sonic The Hedgehog co-creator Yuji Naka has been found guilty and has received fines totalling $1.2 million and a suspended 30-month sentence.

• Longtime game developer and Fable creator Peter Molyneux has spoken this month at a conference in Barcelona stating his newest project will have a mechanic that has never been seen in a game before but stopped short of revealing other details about the game. 

• Speaking of longtime employees, Microsoft Director of Programming Larry Hyrb will be stepping down after 22 years with the company.

• More acquisitions continue as Star Citizen creator Cloud Imperium acquires longtime Canadian partners Turbulent after gaining a 25% shareholder stake in the company in 2020.

• Other companies have made moves that could give rise to acquisitions, as Chinese megacorporation Tencent have become the majority shareholder of developer Techland (Dying Light).

• Following new regulations passed by the European Union, companies that produce new handheld devices, such as the Nintendo Switch or the Steam Deck, would be required to provide replaceable rechargeable batteries by 2027.

• Square Enix announced the fifth major expansion for MMO Final Fantasy XIV entitled Dawntrail and announced the game would be coming to Xbox consoles.

• 60-player PvP Battle Royale game Naraka: Bladepoint went free-to-play for all on the 13th of July and coincides with a PS5 version of the game being available.