16.1 billion loss for Meta’s Reality Lab

Palworld servers are very expensive, TLOU is just a concept and Infinite Wealth sold 1 million units

Author

Bobby Voicu
February 05, 2024

There's three ways to talk about games. There's the industry way, the investor way, and the government way, and none of those really work well together – Hugo Obi, CEO, Maliyo Games

Hey there!

📣 If you only read one piece of news today 📣

🤯 Meta's Reality Labs division incurred a $16.1 billion loss in 2023. 

🥽 Despite significant layoffs, Meta remains invested in AR and VR technologies, expecting to increase expenditures.

🚀 And they have reasons to be hopeful, since Meta Quest 3 sold at least 1 million since launch, in October 2023.

🎉 But we have so much more:

Starfield and Indiana Jones could come to PlayStation at some point.

Palworld’s servers cost about 500k/month and Naughty Dog wants to make The Last of Us Part 3, just not yet.

Don’t miss The Power-Up Chronicles section at the end of this newsletter. It has stories about

  • The importance of marginal gains

  • Why future game events may look like music festivals

  • Games industry leaders braced 'for up to two years of pain'

Now let’s start:

Welcome to The Power-Up #67

Game-Up

😱 Naughty Dog hints at the possibility of a third installment in The Last of Us series, with director Neil Druckmann revealing a new concept that could extend the story beyond its current finale. 

😔 However, if Naughty Dog is working on something new, it is not TLOU3, which is currently just a concept without a story or active development. 

🧑‍🌾 Microsoft is considering releasing Indiana Jones and the Great Circle on PS5 after its initial Xbox launch. 

✨ Additionally, Starfield, the biggest Bethesda game launch of all time, might also come to PS5 following the Shattered Space expansion's release on Xbox and PC later this year.

🗺️ Rumors suggest a potential PS5 remake of Uncharted: Drake’s Fortune, with recent discussions indicating strong consideration but no confirmation of development.

🚀 Some of the games launching this week:

  • January 6: Foamstars (PS4/5), CLeM (PC, Switch), Honkai: Star Rail 2.0 (PS5, PC, iOS, Android), Threes! (PC) 

  • January 8: Helldivers II (PS5, PC), The Inquisitor (PS5, PC), Legendary Tales (PSVR2, Steam VR)

Round-Up

🚀 Satisfactory nears its official launch with over 5.5 million sales in five years of early access. A version 1.0 will be released this year, featuring a unique narrative and numerous new features.

🐲 Like a Dragon: Infinite Wealth hits a major milestone with 1 million copies sold in its first week. 

😱 95% of game studios are either developing or planning to release a live service game, as revealed in a comprehensive 2023 survey involving 537 global studios.

🤑 Palworld's server costs have soared by 359%, hitting around $470,000 monthly with 19 million players. This could lead to an annual expense of $5 million if the current trend persists.

Biz-Up

🤯 Meta's Reality Labs division incurred a $16.1 billion loss in 2023. Despite significant layoffs, Meta remains invested in AR and VR technologies, expecting to increase expenditures.

Game-Up

👋 Devolver Digital's CEO Douglas Morin has stepped down in the wake of layoffs at Artificer studio, being replaced by co-founder Harry Miller.

🤝 Gameloft introduces a new leadership team to drive its 'Gameloft for brands' initiative, focusing on expanding advertising solutions across various platforms and technologies. This strategic move aims to leverage Gameloft's expertise in gaming and gamification, including AI-based projects.

The Power-Up Chronicles

Levi Matkins, CEO of LifeStreet, advocates for a strategy of marginal gains in the mobile gaming industry, emphasizing small, continuous improvements across all aspects of game development and marketing to drive long-term success.

➡️ Read the article on PocketGamer

Greg Rice, head curator of Day of the Devs, suggests that future video game events may resemble music festivals, focusing on creating a pleasant, diverse, and immersive experience for attendees, with an emphasis on indie and artistic games. This approach, which includes unique content and live music, aims to draw people in by offering something more experiential and varied than traditional game expos, potentially revitalizing the industry's event scene.

➡️ Read the article on Game Developer

Industry leaders predict a challenging period for the video games industry, anticipating closures and financial strain through 2024 and possibly into 2025 due to high interest rates, market saturation, and cautious investment. While 2023 was marked by layoffs, the upcoming year is expected to see more significant contractions across various sectors within the industry, from development to publishing. Despite these challenges, there is a sense of optimism for eventual recovery.

➡️ Read the article on GamesIndustry.biz.

That’s it for today. Thanks for reading. Stay powered-up until next time.

Bobby & Andrei

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Did you know?

In around May 2004, Neil Druckmann joined Naughty Dog as a programming intern.

He began working on localization tools and gameplay programming on Jak 3 (2004).

By the end of the internship in August, he was offered a full-time position by Wells and Stephen White, then co-presidents.

He programmed the menu screens on Jak X: Combat Racing (2005), which he considered one of the most difficult tasks of his career.