More Layoffs and Studio Closures

Naughty Dog lays off devs, Honor of Kings is the top-grossing mobile game and Adidas will launch a Spider-Man 2 collection

Author

Bobby Voicu
October 04, 2023

I am not a good fit for this new version of Epic; it requires people of a different kind.- Sergiy Galyonkin, ex-Epic

Hey there!

The week goes on with more bad news about layoffs and closures.

Steam Spy founder is leaving Epic because of misalignment but hey, at least we will have Spider-Man 2 shoes and shirts. 😅

Don’t miss The Power-Up Chronicles at the end of this email, with stories about PlayStation’s bet on live services, new opportunities for mobile studios and how to engage young gamers.

Hit the play button!

Welcome to The Power-Up #20

Biz Reel

🤪 The Unity boycott has reportedly led to a decline of up to 30% in Unity's ad network and a 35% increase in Unity Ad CPIs, weakening its user acquisition business.

🤑 Playtika has bolstered its position in the mobile gaming market through a series of acquisitions since launching a $400 million investment arm in 2018. Here’s a timeline and a list of those investments.

💰 The Australian government, in collaboration with Screen Australia, commits AU$12 million ($7.5 million) over four years to bolster the country's game industry through new funding programs.

📉 This comes on a general slow down of VC investment in general.

🤑 Honor of Kings remains the top-grossing mobile game ($115.79 million) in September, with Monopoly Go ($87.95 million) rising to second place surpassing PUBG Mobile.

💰 Sad Cat Studios secured $5 million in funding from GEM Capital for its retro-style game Replaced, aiming for a 2024 launch.

🤬 Hato Moa, the creator of Hatoful Boyfriend, claims she hasn't received royalties from Epic Games for two years since they acquired Mediatonic in 2021.

💲 Niantic's new release, Monster Hunter Now, garnered $14 million in its first month, positioning it as the company's potential third highest-grossing game.

🚀 The Blockchain Gaming Market is projected to reach US$ 772.7 billion by 2032 with a CAGR of 60.4%, driven by rising NFTs and digital ownership.

Industry Level-Up (or Down)

👋 Sergiy Galyonkin, Epic Games' director of publishing strategy, is departing after nearly 8 years, feeling misaligned with the "new version of Epic." 

😔 Team17 is undergoing a company restructure that might lead to significant job losses, especially within the QA team, following its CEO Michael Pattison's amicable departure.

😱 PlayStation's Naughty Dog studio is laying off dozens of contract developers, with the majority from quality assurance testing. Yeah, this probably means we’re not gonna get a new Last of Us multiplayer.

🤬 Developer Puny Human is closing due to an unnamed client refusing to make payments. I think it’s a bad situation, but it also shows the risks of relying on just one (big) client.

😔 Twitch lays off customer support staff in favor of outsourcing. This follows a larger March layoff influenced by Amazon's plan to reduce costs and headcount.

😔 Dang, the developer behind Boomerang X, is shutting down due to lack of funding.

Game Round-Up

🕷️ Sony has unveiled a Spider-Man 2 PlayStation 5 bundle, set to launch on October 20, 2023, alongside the game's release. This bundle includes a standard PS5 console and a digital copy of Marvel’s Spider-Man 2, with additional themed console covers and DualSense controllers available separately.

🎴 The limited edition Van Gogh Pikachu Pokemon card has been bought up by scalpers and is now listed for hundreds online. The Pokemon Company is addressing the rapid sell-out and may offer more cards in the future.

⚽️ EA Sports FC 24 faces backlash over its $30 Elite Season Opener Pack which many players find underwhelming and overpriced. Despite the controversy, the game's popularity remains consistent with its predecessors.

👟 Adidas is launching a Spider-Man 2 inspired collection featuring shoes, sweatshirts, and more with designs from the game. The collection, releasing on October 20, 2023, will be available on the Adidas app, website, and select retailers.

🤖 Bungie is actively exploring Generative AI (GenAI) for game development, as indicated by recent job listings for AI roles. The company's expanding Machine Learning team suggests a focus on integrating GenAI tools into various game development processes.

Game Central

🦇 Batman: Arkham Trilogy for Nintendo Switch has been postponed from October 13 to December 1. Warner Bros. Games cites the need for additional time to enhance the player experience on the platform. I wonder how the launch of Mortal Kombat 1 on Switch influenced this.

😱 Alan Wake 2's Performance Mode will be exclusive to PS5 and Xbox Series X, excluding Xbox Series S. Remedy Entertainment cites challenges in optimizing for the lower-spec Xbox console.

🕸️ Marvel’s Spider-Man 2 introduces a web swinging assist with 10 adjustable levels for varied challenge. The standard setting mirrors previous games, offering players customization in swinging through NYC.

👻 And don’t forget Assassin’s Creed Mirage is launching tomorrow (generally at 12am your time zone). Here’s a trailer to remind you what happened in the franchise before this game:

The Power-Up Chronicles

Sony's PlayStation Studios, known for their AAA single-player titles, is facing challenges in their shift to multiplayer-driven live service games. The acquisition of Bungie for $3.6 billion highlights Sony's commitment to this transition, with Bungie leading the way with its "Marathon" project.

However, the pivot has been tough; for instance, Bungie's consultation on "The Last of Us" multiplayer project resulted in a significant reevaluation (and maybe generated the recent layoffs at Naughty Dog we already mentioned). The complexities of this transition, combined with the inherent strengths of PlayStation's past single-player focus, have raised concerns about Sony's future in the live service domain.

➡️ An article by Stephen Tailby on PushSquare.

"Your mobile game studio is dying. Here’s how to save it". The mobile gaming industry, once booming, now faces numerous challenges such as plateauing growth, a declining word-of-mouth factor (K-factor), rising user acquisition costs, discontent with platform policies, lack of innovation, stricter monetization regulations, and waning investor interest. Despite the gloomy landscape, there are emerging opportunities for developers.

➡️ An analysis by Will Luton, Village Studio founder, on PocketGamer.

Afterverse's PK XD is a distinct sandbox game designed for young players, eschewing traditional tutorials and text for intuitive gameplay. With over 500 million Android downloads, its unique design caters directly to its young audience, yet bypasses guidance for older players. Addressing this gap, Afterverse cultivates a vibrant content creator community, offering in-game tools and promotions. These creators not only entertain but also guide players. Continuous refinement of the game is driven by rapid testing and insights from these creators, ensuring it resonates with its youthful target audience.

➡️ Read the article on GameAnalytics.

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

Bobby & Andrei

Did you know?

Team17 Group was created in December 1990 through the merger of British publisher 17-Bit Software and Swedish developer Team 7.

After their first game, Full Contact (1991) for the Amiga personal computer, the studio followed up with multiple number-one releases on that platform.

They saw major success with Andy Davidson's Worms in 1995, the resulting franchise of which still remains as the company's primary development output, having developed over 20 entries in it.