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The video game industry has been a surprising growth market this year, fueled by popular games and new technology. These companies stood out in 2016.
The gaming sector has performed well in 2016, with many of the top names in the space, from Nintendo(NASDAQOTH:NTDOY) to chipmaker NVIDIA(NASDAQ:NVDA), posting solid returns. Well-received new content, impressive new technology, and renewed ideas about how to get both of those to consumers have helped the sector grow this year. Here were some of the winners in 2016, and what the future could hold for these companies.
Nintendo-Go
Of the content creators and licensors, Nintendo was the best-performing in its group in 2016, with more than a 50% rise through the year to date. Though it was up around 80% before a mid-December sell-off, the company has still had a remarkable year. Nintendo's resurgence follows the company's decision to finally develop a mobile strategy and bring its timeless characters and stories into a modern age.
Nintendo was one of the big winners with the Pokemon Go phenomenon that exploded worldwide this year, and the company announced a new game console called Switch to come out in 2017, which has helped to raise its stock price as well. Most recently, Nintendo launched a new mobile game called Super Mario Run, which topped the download charts during its first weekend, with around 5 million downloads its first day. The game has had some disappointing reviews so far, pushing Nintendo's YTD growth lower, but it's still the early days of Nintendo's new mobile game strategy, so it's certainly not game over yet.
Take-Two Interactive(NASDAQ:TTWO) was also a top performer within the gaming content space, posting a 40% jump in share price this year. Take-Two, maker of popular games such as Grand Theft Auto and NBA 2K17, has grown sales 21% in the most recent quarter, year over year. The company has also been able to adopt a more digitally focused strategy, which has helped margins so that, while earnings fell year over year, they were far above analyst estimates in the most recent quarter.
Platform players
Aside from the actual content creators, some gaming platform companies also performed well this year. Sony(NYSE:SNE) gets a spot on this list largely thanks to the launch of its PlayStation 4 gaming system and more recent launch of a premium virtual reality (VR) bundle that brings VR game play to mass-market gamers. Gaming makes up only about 20% of Sony's total revenue, but it's also its fastest-growing division and could help push the stock higher as more games for its VR headset come out in 2017.
In China, where video game sales are booming and there are an estimated 700 million mobile users and growing, local platform company NetEase (NASDAQ: NTES) has been a winner, with a 19% jump in share price this year. With an assortment of its own online games (among many online services from email to advertising), NetEase also has a deal with content companies such as Activision Blizzard to distribute its games across China, such as one of the hottest games this year, Overwatch, which has done very well in China.
The biggest winners "inside" gaming
While the content and the platforms for playing it on are the face of the gaming industry, the technology inside the devices -- be it gaming consoles, computers, or virtual reality headsets -- are chipmakers such as Advanced Micro Devices(NASDAQ:AMD) and NVIDIA. These two companies have each made big plays so far in 2016, not just in gaming -- though that has been a growth driver for both companies, with each putting out new high-power chips for intense gaming -- but also in autonomous cars, artificial intelligence, connected devices within the Internet of things, and more. As a result of this growth, AMD and NVIDIA stocks are up 280% and 210%, respectively, year to date.
While these content, platform, and chip companies did well this year as the gaming industry continued to grow, bricks-and-mortar video games and gaming hardware seller GameStop (NYSE: GME) had a rough year, which has pushed its stock down 8% so far in 2016. GameStop's business model has struggled to update amid a changing consumer landscape. Looking forward, this trend is likely to grow, as the gaming industry moves to a more e-commerce-focused market, and content creators continually seek a model of digital downloads. The companies with the best content and the most interesting technology are the ones to expect to lead growth in 2017.
Sony is entering the virtual reality market with the PlayStation VR headset, but will customers purchase it? Can the maker of Walkman re-emerge as the consumer electronics star after Apple stole the mantle with their iPod, iPhone, and iPad series? Three strategy paradigms indicate it just may be so.
Value-Engineering
Value-engineering is a proven design principle of highly successful launches. This principle has been used by down-market firms like Ikea and Southwest, mid-market firms like Vespa and Nissan, and even up-market firms like Virgin Atlantic First Class. It is a core culture element of the value-based Pricing Framework discussed in Pricing Done Right.
In value-engineering, firms start with the target customer’s perspective and work backwards to define the offering. Not all potential customers will be the target customer, but the target customer base is anticipated to be large enough to warrant investing in the offering innovation.
Various outcomes the target customer highly desire and are willing to pay for are designed into in the offering. Elements that the target customer is willing to forgo, or at least are not willing to pay for, are removed from the offering. Even if all the competitors include the isolated element, if the target customers don’t sufficiently value that element, it is reduced if not eliminated.
As the firm defines the benefits to be included and excluded, they define the target price of the launch offering. From this target launch price, the firm defines the target cost. And from the target cost, the firm defines the features and attributes necessary to deliver the benefits demanded at the profitable target cost.
This is the opposite of “build it and they will come,” which was just a field of dreams. In its place, we have “to make them come, build what they want at a price they will pay.”
Sony took this value-engineered approach, or at least appears to have tried to, with their PlayStation VR launch.
First, they defined their target customer as a gamer. This is a different market segment than those looking to use virtual reality for professional purposes such as showcasing condominiums remotely, designing industrial engineered products, or training professionals and military personnel.
The gamer VR customer may be willing to forgo some of the higher-end VR chips and features that are required by these other segments in order to have a lower, more family-budget friendly, price point. On the other hand, gamers may demand more in terms of comfort and abuse-tolerance than VR headsets used in more controlled environments.
According to Masayasu Ito, Sony Interactive EVP, they took exactly that approach. In designing the PlayStation VR. He states: “the user experience must come first before the technical specs.” As such, the PlayStation VR design team made what appears to be rational tradeoffs.
They restrained the desire of engineers (and some VR enthusiasts) to pack hardware with expensive features that would force a higher price tag.
They kept a high focus on ergonomics so that squeamish family members may even find the headset somewhat comfortable.
And, they even enabled gamers to keep a social dimension with others by enabling the VR gamer to interact with others in the same room viewing the game on a regular TV.
The result is a PlayStation VR headset priced at $399 entering a market against Facebook’s $599 Oculus Rift and HTC $799 Vive, both of which require a $1,000 or more high-end computer to run, and tend to be used for professional purposes. Research firm IHS estimates that with the PlayStation VR launch, the virtual reality hardware market will be $1.6 billion this year.
Not that I can or am stating that everything Sony did was perfect. And I am definitely not stating that everyone will find Sony’s design tradeoffs to result in a good offering. But they did define their target market and product design requirements in such a manner broadly appearing to be compatible with a highly successful product, launch. Value-engineering works. Sony appears to have done this with their PlayStation VR.
D’Aveni’s Hypercompetition in Timing and Know-how
In 1994, Richard D’Aveni released Hypercompetition, a groundbreaking book describing competitive strategy in a hyper-competitive world. The second of four competitive arenas he describes is that of timing and know-how.
In the timing and know-how arena, firms compete by creating entirely new industries through utilizing the firm’s unique tangible assets and intangible knowledge and capturing early, if not first-mover advantages.
While Apple can be used as a modern example of competing through timing and know-how, D’Aveni actually used Sony as his example back before the iPod, iPhone, iPad series of consumer electronic breakthroughs.
In the early 70’s, Sony launched the all solid-state Trinitron TV, earning Sony an Emmy Award in ‘73 and redefining the standard of viewing excellence. As competition heated up, Sony launched Betamax, which briefly led the market until network externalities drove the VCR format to dominate a now defunct industry. As the prospects for the Betamax began to fade, Sony again applied its deep knowledge of consumer electronics to release the Walkman in the early 80’s.
Today, it can be said that Sony is once again leveraging its deep knowledge of gaming and consumer electronics, built upon its PlayStation knowledge. It also appears to be appropriately timed in relationship to the development of the core components required for moderately priced virtual reality hardware.
While I am definitely not stating that Sony is assured success by being an early mover in the gamer VR market, and D’Aveni and myself are both well aware that not all first-movers hold an advantage in a rapidly evolving industry, I am stating it fits the pattern of what looks likely to be a successful new business venture.
Competing with timing and know-how works. Sony appears to have done this with their PlayStation VR.
Ecosystems and Network Externalities
Network effects, first popularized by Metcalfe in the 80’s, business ecosystems, and platforms have become the rage of Silicon Valley. According to this vein of thinking, businesses come to dominate markets as consumers and suppliers both utilize a platform to transact and create value. In these markets, value is created in proportion to the square of the users of the network, not linearly as they are with simpler transactional products like baked goods or televisions.
The Sony PlayStatoin VR headset plugs into their PlayStation 4 videogame consoles. Estimates state that there are 43 million PlayStation 4 consoles in the market today, and that this number will rise to above 50 million in 2017.
This is in contrast with the VR headsets made by Facebook and HTC. Both of these headsets require high-end computers as mentioned earlier. Fewer consumers own the necessary platforms for these competing VR headsets, as such they enter a weaker ecosystem.
In comparison, the PlayStation VR is entering a healthier ecosystem than either of its existing competitors.
Other firms, notably Google, are also working on VR gaming solutions. Some of these VR gaming headsets require no more than a mobile phone to operate. This might prove to be an even greater platform for gaming, but that story is for a later day and it is hard to forecast how these will be received.
As stated, first-mover advantage is disputable. Markets evolve. Today, I cannot state whether the VR + Gaming Console platform will out- or under-perform a VR + Mobile Handset platform in 2020. But today, in 2016, it looks like it will.
Part of the platform theory stresses the value of suppliers as well as customers. For VR gaming, that is an issue of having games customers which other gaming firms are willing to build. Again, we see in Sony’s PlayStation VR release a target to have at least 50 games ready at launch, including STAR WARS ™ Battlefront ™, Batman Arkahm, RIGS Mechanized Combat League, and Farpoint VR. I am sure Sony is hoping other game developers will hop on the platform soon.
Network externalities have a real impact on some offering’s success. Gaming is one area where the impact of network externalities, ecosystems, and platform adoption matters. Sony appears to leveraging a strong ecosystem with their PlayStation VR
Success, Likely But Not Assured
Sony’s PlayStation VR fits the mold of at least three successful business strategy paradigms.
They attempted to value-engineer the offering.
They are leveraging their deep gaming and consumer electronics know-how and the timing of development of VR chipsets and other hardware elements in creating the offering.
They are entering a fertile ecosystem at a price appropriate for the target market.
There are other business strategy paradigms we could explore with relation to this product launch. Yet business success requires more than following strategic paradigms like a recipe. It also requires some luck. As a gamble, Sony’s PlayStation VR looks like a good bet, but nothing is ever assured.
“Sony PlayStation VR Aims To Make Virtual Reality Mainstream.” Investor’s Business Daily. (October 13, 2016 ): 428 words. LexisNexis Academic. Web. Date Accessed: 2016/10/21.
The lack Friday is arguably one of the best days of the year to shell out for shopping, no matter whether you reside in the United States or outside the American soil. You can score the best Black Friday 2016 deals as early as on Thanksgiving Day, November 24. That’s because, in the recent years, more and more retail chain stores are opting to start their Black Friday sale in Turkey Thursday, a day prior to the actual holiday shopping event.
There are a number of great deals coming out this year for in consumer electronics section including gaming system and other tech and related items. Some of the all-time favorite deals are the Sony PlayStation 4 (PS4), Xbox One and Nintendo gaming consoles.
There obviously are a massive number of Black Friday 2016 deals and so the sales are expected to begin as early as a week prior to the November 25 week. The e-commerce giant Amazon and GameStop, as well as the leading consumer electronics retailer Best Buy will be among the first major names to bring out the deals.
PlayStation 4 (PS4) Black Friday 2016 Deals
The standard Sony PlayStation 4 (PS4) and Microsoft’s Xbox One gaming consoles are expected to be sold at steep discounts as part of the Black Friday 2016. According toThe Cetureon, the Black Friday deals for the PlayStation 4 bundles with a game title will be priced starting at $299.99. The Black Friday 2016 PS4 deal features an uncharted 4 Bundle including Grand Theft Auto V. Another bundle will be coming on the 25th at $309.99 will include Overwatch and Metal Gear Solid V: The Phantom Pain.
Moreover, the PS4 Black Friday 2016 Bundle includes Black Ops 3 and Mafia III. Sony Another PS4 deal this Black Friday is priced at $399.9 that bundled with a variant Rise of the Tomb Raider and an added controller.
XBox One Black Friday 2016 Deals
A number of Xbox One bundles are also available for the upcoming Black Friday 2016. One of the Xbox One Bundles will be bundled with a Samsung 4K UHD TV at $849.99. Another Xbox One bundle includes Gears of War, Rise of the Tomb Raider along with Fallout 4 at just $249.99.
Virtual reality video gaming has been a dream of the industry for decades. Now, after several false starts, it's finally happening in a big way. According to the makers of the biggest consumer VR devices, these headsets will offer users a new type of escape, be able to connect people in novel ways, and revolutionize the way people play video games.
But now that the dream of consumer-grade VR is a reality, game makers are starting to explore the ethical boundaries and risks associated with this new world of interactive entertainment: Just what is virtual reality going to do to its players? How will our minds and bodies respond to these deeply immersive experiences?
VICE spoke to developers, designers, and researchers about VR's therapeutic potential, as well as the ethical dilemmas and medical risks game designers must take into account when building new virtual worlds.
BUNGIE launches the Rise of Iron expansion for Destiny, telling fans that the DLC is now playable worldwide.
Destiny Rise of Iron is available at 10am on September 20
UPDATE FOUR: Destiny's Rise of Iron expansion is now live on Xbox One and PS4.
Bungie confirmed as much on Twitter, telling fans that the DLC was now available worldwide on Xbox One and PS4.
"Your journey to become an Iron Lord begins now, Guardians. Destiny: Rise of Iron is playable worldwide."
UPDATE THREE: Bungie has told fans that they'll be able to play Destiny Rise of Iron instantly if they've downloaded all the updates.
Posting on the Destiny Twitter page, a Bungie spokesperson said: "Pro-Tip: If all your downloads are in place, you should need only to return to orbit in 20 minutes to begin your climb up Felwinter Peak."
The developer also advised fans to visit the Destiny support page if they experience any issues downloading the update.
UPDATE TWO: Destiny's Rise of Iron expansion is all set to launch on time, as Bungie posts a teasing tweet.
The Destiny developer told fans: "Less than one hour..."
This was after a previous tweet that reads: "Lord Saladin prepares for your arrival. Destiny: Rise of Iron will become available at 2AM PDT."
UPDATE ONE: The Destiny Rise of Iron Release Time on Xbox One and PS4 has been confirmed by Bungie.
While it appears that Destiny Maintenance has needed to be extended this evening, it hasn't disrupted the studio's plans for launch later today.
Destiny's Rise of iron DLC makes its long-awaited debut at 2am PT on September 20. This means that UK fans can start playing at 10am.
Several updates to the game have been launched this evening, with Destiny Hotfix 2.4.0.1 and 2.4.0.2 now available for download on PlayStation 4 and Xbox One consoles.
Bungie revealed what was included in the latter patch, titled "The one about Film Grain."
Destiny Patch Notes:
Fixed an issue where Film Grain was inadvertently added
Fixed an issue that shortened the revive interaction time and extended revive distance to pre 2.2.0 values
Other tweaks and improvements made include: Quest tracking on certain vendors and volume issues impacting Lord Shaxx in the Crucible.
Bungie reveals the Destiny Rise of Iron release time on PS4 and Xbox One
Destiny developer Bungie has confirmed launch plans and release times for the Rise of Iron expansion on Xbox One and PS4.
Bungie confirmed as much on the Destiny blog, telling fans where to find technical support should there be any launch issues.
"Deploying an expansion to a live piece of software ain’t like dusting crops.
"Without precise calculations, you could bounce too close to a rogue line of code, and that could end your trip real quick.
"Thankfully, Destiny Player Support is here to plot a safe course that leads us starside."
Bungie also told fans what to expect from the latest Hotfix to update 2.4.0.
Destiny Rise of Iron DLC unlockable armour
Lots of new pieces of armour and weapons are coming to Destiny with the Rise of Iron expansion.
According to Bungie, Hotfix 2.4.0.1 and 2.4.0.2 will launch simultaneously across Xbox One and PS4 later today.
Bungie also posted a list of known issues affecting the recent 2.40 update. The full list can be viewed below:
Clan Rosters are once again available in-game. For all information concerning Clan Rosters, please see this Help Article.
Private Matches are now live. Players may experience error code QUAIL if too many players attempt to join a Fireteam at the same time. If you experience this issue, please attempt to join the Fireteam once more.
Destiny – The Collection upgrade is currently unavailable for some qualifying players. We are actively working with platform partners to resolve this issue as soon as possible.
Public Event Rewards outlined within the Destiny Update 2.4.0 article are not yet in effect. This change will happen with the launch of Destiny: Rise of Iron on September 20th, 2016.
The Consumed Ghost Shell no longer matches it’s icon in-game. We are actively investigating this issue.
The Firefly Perk may still cause some players to experience game crashes in some circumstances. We are continuing to investigate.
Taken War Heroic Strikes are not currently rewarding Legendary Marks upon the first three completions of this activity. We are actively investigating this issue.
The Chroma Grimoire Card is currently unavailable to new Destiny players. We are actively investigating this issue.
The Warlock Exotic Helmet “The Stag” is currently unavailable from Exotic Armor Blueprint Collection. We are actively investigating this issue.
Rise of Iron comes with new missions, a brand new area, new player-vs-player arenas and a game mode, new weapons and gear, and a brand new Raid - although the Raid won't go live until just after launch.
In the lead up to launch, Bungie has launched a mysterious alternative reality game in which Crucible players become infected.
Players were becoming infected with different strands of a mysterious virus, each with its own perks. The viruses are named: Brilliance 3.2, Glory 2.1, Splendor 2.6, Magnificence 2.0 and Fortitude 3.1.
The virus appears as a swarm of light around an infected player's head. Killing an infected player spreads the virus to a new Guardian.
The effects of the virus have been documented on a website called Owl Sector, which gives hourly updates in the run up to the launch of the Rise of Iron expansion.
WONDERING whether you should buy a PS4 Slim, Xbox One S or wait for the PS4 Pro? Read our review of Sony's new console, which is OUT NOW.
PS4 Slim is out now in the UK
After the least surprising announcement ever, Sony's brand new and slimmed down PS4 - unofficially dubbed the PS4 Slim - is out now, priced at £259 for the basic model, or £309 for the 1TB version.
But while the existence of a slimmer PlayStation wasn't exactly a secret - you could buy one at CEX, after all - nobody was knew how much smaller it actually was, or whether it had any nifty new tricks up its sleeve.
Sony may have answered these questions and more during last week's conference, but now fans want to know if it looks as good as it sounds, how it measures up to the competition and whether it's worth buying one or waiting for the PS4 Pro.
Read on for Express Online's review of the PS4 Slim and check out the gallery below for a closer look at Sony's slick new device:
The PS4 PRO will be released on November 10, 2016 and has some new high resolution screenshots shared by Sony.
PS4 Slim - Just how good does it look and what can it do?
While the PS4 Slim looks noticeably better than the original PS4 console, the makeover hasn't exactly been extreme - not that it needed to be, mind you.
It's like the original PS4 has cut down on the junk food, had a shave and been kitted out with some nice new clothes.
Lying down flat, the PS4 Slim is more than a centimetre shorter than the original PS4, measuring in at around 3.9cm, compared to the heftier 5.3cm of its predecessor.
It's also sporting a much squarer and more even 26.5cm x 26.5cm frame, compared to the original's 27.5cm x 30cm rectangular base.
The PS4 Slim's matte black finish is easier on the eye, while the physical buttons eliminate any power and disc blunders you might have experienced with the original.
Then there are the little touches like the PlayStation symbols on the underside of the console, the quieter fan and the slightly modified DualShock 4 controller with front-facing lightbar for clearer in-game notifications.
Assuming the controller's thumbsticks can take a little more punishment than the original - it's hard to tell how durable they are at this early stage - then Sony has seemingly ironed out most of the complaints we had about the original console.
PS4 Slim vs Xbox One S - which console is best?
Choosing your console really comes down to the kind of exclusive games you want to play. Sony has the likes of The Last of Us, Uncharted, Bloodborne and No Man's Sky, while Microsoft can count Gears of War, Halo, Forza and Quantum Break among its ranks.
However, if you were basing your choice of console purely on aesthetics, then it's the Xbox One S that makes a bigger splash.
iUnlike the PS4 Slim, the Xbox One WAS in desperate need of a new look, and has gone down the 10 Years Younger path of plastic surgery and expensive new threads.
The power brick is no more, the robot white colour scheme is stunning, and the matching controller handles like a dream.
One of the Xbox One's big selling points is HDR support, which thanks to a recent update, comes with all PS4 consoles as standard, even the old one. Kudos to Sony for that.
The Xbox One S does have Ultra-HD Blu-ray support, but unless you've got a 4K TV with HDR, then you're not really going to get the benefits of all this fancy new tech.
So it's Microsoft that gets the upper-hand in this particular battle, but with virtual reality about to come to PS4, not to mention the strength of those platform exclusives, it's hard to recommend anything other than the PlayStation at this point.
Exclusive new games for PS4
Here are the hotly anticipated PS4 game exclusives for 2016.
Firewatch looks to be a fantastic mysterious adventure game out in 2016
Arcade favourite Street Fighter 5 returns to PS4 in 2016
Top racing game Gran Turismo Sport is out in 2016
Hellblade is a dark fantasy game with some extreme gameplay and graphics out in 2016
Horizon Zero Dawn is an action packed first person game out on PS4 in 2016
A great story of a young boy and a lost creature is the base for the highly anticipated The Last Guardian out in 2016
No Man's Sky is an upcoming adventure survival video game out in 2016
Gamers favourite is back Rachet Clank is back in 2016 bigger and better
Remake of 1989 game Shadow of the Beast is back for 2016 on PS4
Third person shooter Uncharted 4 looks set to be a big hit in 2016
Should I buy a PS4 Slim or wait for the PS4 Pro?
The other big decision you'll need to make is whether to go for a PS4 Slim or wait for the PS4 Pro to launch.
It's actually an easy choice, because the price difference isn't that drastic - the 1TB PS4 Slim costs £309, compared to £349 for the 1TB PS4 Pro - and the PS4 Pro is out on November 10, so there's only a couple of months to wait.
The PS4 Pro supports 4K gaming, runs games at a higher frame-rate and boasts a more powerful CPU and GPU. It will be particularly useful if you're planning on buying a power-sapping PlayStation VR headset in October.
If you crave more power, flashier visuals and have got your PlayStation VR headset on pre-order, then hold off on the PS4 Slim and grab a PS4 Pro instead.
But if you are in the market for an entry-level PS4 that will sit under your TV with room to spare, then the PS4 Slim is definitely the way to go.
Gamers wait in line to enter the Sony Playstation and Microsoft Corp. Xbox booths during the annual E3 2016 gaming conference at the Los Angeles Convention Center on June 14, 2016 in Los Angeles, California.
(Photo : Photo by Kevork Djansezian/Getty Images)
Microsoft believes that their latest upgrade to the Xbox, the Xbox Scorpio, will be far better than Sony's Playstation 4 Pro. It seems like the two biggest gaming console developers are once again in for another console war.
The feud between the two technological giants have since simmered down over the years, and have seen each other as healthy competition, but since the unveiling of the Playstation 4 Pro, all signs of friendly sportsmanship between the two have gone out the window, as Microsoft promises to deliver a better product with the release of the Xbox Scorpio.
Xbox Senior Director of product management and planning, Albert Penello, has said that he feels pretty good with the decisions they've made with the Scorpio, in a phone interview with Polygon. Penello has stated that the new Xbox Scorpio will have more features than Sony's new Playstation 4 upgrade, adding that 4K resolution is indeed the future of both the Xbox and Playstation, while their own product will be indeed more powerful.
Pocket-lint has recently provided a hardware comparison between the Playstation 4 Pro and the Xbox Scorpio. In terms of graphics, the Xbox Scorpio will have a system on chip of 6 teraflops to render its 4K graphics, much like the ones used for high-end PC gaming, while the Playstation 4 Pro only has 4.2 teraflops of processing power, while running on an AMD Radeon-based GDU. While both consoles will feature 4K HDR video streams, the PS4 Pro does not have a 4K Ultra HD Blu-ray player, which was quickly pointed out by Microsoft. For CPU and memory, both consoles will run on an octa-core CPU, with the PS4 running on the x86-64 Jaguar.
After the recent unveiling of the Playstation 4 Pro, and making the announcement that it will be launched this coming November with a $399 price tag, the world is now looking at Microsoft to unveil more of the Xbox Scorpio. The Scorpio is rumored to be released late in 2017.
