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Platforms are altering the deal | This Week in Business

Earlier this week, Game Developer broke the news that Sony has started telling developers about a change to their business.

In order to give its most expensive PlayStation Plus Premium subscription service tier one of its big selling points — time-limited game trials — Sony is mandating that any game over a certain price also have such a trial for their game, and it has to be at least two hours long.

STAT | $34 (€33 for Europe, ¥4,000 in Japan) – The minimum wholesale cost above which games will need a time-limited trial.

There are caveats — the trials need to start within three months of launch, can be pulled after a year of availability, and are not necessary for VR games — but the end result is basically the same. Any developer that wants to release a game on PlayStation platforms for a premium price now needs to put additional work into it in order to help Sony sell it’s most expensive subscription offerings.

Time-limited trials may be a smart move, but Sony’s decision to mandate them restricts the studios’ ability to design their own launch and marketing plans

Time-limited trials may be a smart move developers should look into more frequently, but Sony’s decision to mandate them restricts the studios’ ability to design their own launch and marketing plans. The decision to limit them to the top tier of the subscription program also means the company is forcing developers to put in the extra work, but even if the trial winds up being a marketing boon that drives additional sales, it will only be available to a fraction of the installed base.

Regardless of the impact the trials have on each individual game, I imagine most developers would prefer to have it be their decision rather than Sony’s, and the only reason Sony feels comfortable making this imposition is because PlayStation’s position in the market gives it leverage to do so.

It’s a similar matter for Twitch, as Bloomberg reported this week that the streaming platform is considering cutting the amount of money top streamers receive from their subscription fees. It’s also looking to incentivize streamers to run more ads on their content as parent company Amazon pushes it to be more profitable.

STAT | 50% – The proposed share the biggest streamers will receive from their viewers’ subscription fees. Currently it’s 70%. That amounts to a 29% pay cut for those streamers, although the platform no doubt hopes they choose to make some of that back by running ads.

This is a pretty significant swing from the situation on Twitch a few years ago. In 2019, the streaming service was feeling the heat from Microsoft’s Mixer (and to a lesser extent, YouTube and Facebook) all pushing into its turf, and we started to see big-money exclusivity deals, starting with Ninja getting reportedly north of $20 million to stream on Mixer.

Twitch responded by throwing money at creators like Pokimane and Dr Disrespect (among others) to ensure they didn’t follow Ninja and others like Shroud to Microsoft’s upstart competitor. YouTube followed suit, and big-name streamers suddenly had some deep-pocketed companies fighting over their services.

Then Microsoft unexpectedly pulled the plug on Mixer, and the flurry of exclusivity deals dried up as quickly as it started. Some were even undone, as Twitch permanently banned Dr Disrespect from the platform a week after Microsoft announced Mixer’s demise, with no reason given.

If Ninja needed Twitch so much to make a humbling return barely a year after his departure, what leverage do creators with lesser followings have?

Ninja gave YouTube a shot, but very quickly wound up back on Twitch in a tacit admission that he needed the platform (and his nearly 15 million subscribers there) more than the platform needed him. And if Ninja needed Twitch so much to make a humbling return barely a year after his departure, what leverage do creators with lesser followings have?

No wonder Twitch thinks it might be able to get away with telling its biggest stars that they’re taking such a pay cut.

And then there’s Apple, which notified developers this week that apps which go for an unspecified amount of time without being updated will be removed from the App Store.

QUOTE | “I’m sitting here on a Friday night, working myself to [the] bone after my day job, trying my best to scrape a living from my indie games, trying to keep up with Apple, Google, Unity, Xcode, MacOS changes that happen so fast my head spins while performing worse on older devices.” – Protopop Games’ Robert Kabwe on Twitter last weekend, after receiving an email from Apple informing him of the policy.

Apple may have customer experience reasons to make this change — anyone who just bought a brand-new phone would want every experience optimized for their shiny new toy — but it is clearly placing a burden on developers here because it has the leverage to do so.

STAT | 1.8 million – The number of Apps in the App Store, according to Apple.

Apple knows it can jettison a few hundred thousand apps with minimal impact. And if the affected developers stay in mobile gaming, there’s a good chance they would go right back to the App Store because it represents such a massive chunk of the market: 56% of tablets and 24% of smartphones worldwide, according to Newzoo’s last global mobile market report.

Apple has little reason not to throw its considerable weight around after a US federal judge last September rejected virtually all of Epic Games’ arguments about Apple being a monopoly of any sort. And even the one count of anticompetitive action that Epic won in that case — the judge told Apple to abandon its anti-steering rules — was appealed and won’t go into effect unless it survives the appeals process, which could take years even if the ruling isn’t reversed.

With so much hand-wringing about industry consolidation of late and what happens when so much power is gathered into just a few hands, it’s worth noting that we don’t need to hypothesize too hard about what things will be like five or ten years down the road. We have plenty of examples in the here and now of how large, market-leading platforms will use the leverage they have, and who will likely be the first to feel the negative effects.

The rest of the week in labor relations

If nothing else, this week’s news should underscore exactly how big a shift we’re seeing in the employer-employee relationship throughout the industry.

QUOTE | “We are pleased that after reviewing the evidence, the National Labor Relations Board rejected Raven Software management’s attempts to undermine our efforts to form a union. It’s now time for Raven management to stop trying to prevent us from exercising our rights. We are looking forward to voting for — and winning — our union.” – Raven Software QA testers welcome the news that the National Labor Relations Board rejected Activision Blizzard’s attempts to have a unionization vote be studio-wide instead of limited to the QA team.

QUOTE | “We are very confident that we would be able to win a union vote.” – A representative for Keywords employees at BioWare Edmonton, speaking to Kotaku about the QA group’s application with the Alberta Labor Relations Board to have a union represent it in negotiations with the employer.

QUOTE | “The video game industry is wildly profitable. And workers are increasingly seeing worse and worse conditions with less and less job security.” – Game Workers Unite co-secretary Tim Colwill, talks about the advocacy group’s imminent plans to become part of the 18,000-member union Professionals Australia, after which it will be known as Game Workers Australia.

QUOTE | “You can discipline the administration, and behind it the company, for not handling things properly, but instead of drawing the necessary consequences and prevent the reorganisation — and in this case the closure — things can just follow their course in the meantime.” – Mehdi Bouzaida, a lawyer representing former employees of Blizzard Versailles, laments the somewhat hollow victory of having a French court rule that the layoffs that led to the studio’s closure were not legally justified. Bouzaida’s clients may be eligible for some additional compensation of at least six months’ salary, but Activision Blizzard can just absorb the cost and do as it pleases. It’s certainly not a deterrent, considering the court had reached a similar conclusion for a previous round of layoffs at the Versailles studio.

STAT | 80% – The amount of salary that will be paid to Game Freak employees who opt-in to the Pokémon studio’s new optional four-day work week.

STAT | 80% – The portion of Crytek staff now working from home as the developer has adopted it as a permanent option for employees.

QUOTE | “We think many companies in this industry could absolutely adopt this model if studio leadership is aligned on making it work. And we believe that our industry would be a lot healthier for it.” – Blackbird Interactive operations director Katie Findlay is one of several studio leaders giving rave reviews to a four-day work week.

QUOTE | “This roadmap reflects the same studio priorities that we shared back in March, with a ‘priority zero’ of team health and getting ourselves into a sustainable development rhythm so that we can deliver great experiences to all of you while maintaining a healthy work/life balance.” – 343 Industries head of creative Joseph Staten explains why the studio is delaying updates to Halo Infinite.

QUOTE | “We’re seeing it being dictated by the employees now. So that’s telling us that the millennial generation is really changing the face of the workplace [to] ‘This is what’s important to us. If it’s not important to my employer, I will leave’.” – In an article about how reformed employers are supposed to attract talent, Kim Shatzer, managing director of games-focused recruitment agency Onward Play, says developers are increasingly using their leverage to improve workplace cultures.

QUOTE | “I think Square Enix and Arzest are companies that don’t care about games and game fans.” – Balan Wonderworld director Yuji Naka, airing his grievances with the developer and publisher behind the commercial and critical flop.

QUOTE | “[I] now really distrust the industry at large and feel like my voice, along with the voices of the others in the workplace are seen as a liability, rather than an important part of making great workplaces.” – A former Activision Blizzard and Apple employee who filed a complaint against Epic with the NLRB, saying the studio refused to hire her because of her work with the Apple Together labor group and her testimony before the federal government on fair labor practices.

QUOTE | “The pandemic has lit a spark under unionising drives across the industry — but years of labour casualisation and abuse of sub-contracting relationships built up the tinder pile” – Our own Rob Fahey looks at the state of labor relations after a particularly eventful week.

The rest of the week in non-labor news

STAT | 49% – Activision Publishing’s year-over-year revenue decline for the first quarter, a precipitous drop blamed on Call of Duty: Vanguard disappointing and declining engagement on Call of Duty: Warzone. Activision saw 100 million monthly active users for the quarter, the lowest since the launch of Call of Duty Mobile gave the segment its first free-to-play hit in 2019.

STAT | 43% – Blizzard Entertainment’s year-over-year revenue decline for the first quarter, blamed on “product cycle timing for the Warcraft franchise.” It had 22 million monthly active users for the quarter, the lowest since Activision Blizzard started reporting the metric in 2016.

QUOTE | “I grew up in the era where we didn’t have any Sámi in the media. So I didn’t see my culture anywhere else but in my family. And then when the first representation came, it was a comedy show where they kind of ridiculed us. It’s so important that we create this content on our own terms and that we are involved with that process. There is the saying ‘Nothing about us without us’ — we have to be involved when working on these games.” – Red Stage Entertainment co-founder Marjaana Auranen shares what it meant to represent her own culture to the world with the just-released Skábma: Snowfall.

QUOTE | “I think we can be one of the biggest single-vertical publishers in the world in the next decade. What Disney Land is for families, we can be for horror.” – Feardemic CEO Scott Millard is aiming high with the horror-focused indie publisher.

QUOTE | “Just like Wii Sports before it, Nintendo Switch Sports is best played as a fun but shallow party game that you can break out for friends and family in a pinch, though this time it’s not quite the novelty it was back in 2006.” – IGN’s Colin Stevens was one of the reviewers whose assessments were compiled in our Critical Consensus article for Nintendo Switch Sports.

QUOTE | “If this criterion is also used by the Dutch State Council in the future, this means that the actual in-game economy will be of high importance when assessing the legality of loot boxes.” – Video games and esports lawyer René Otto says a recent ruling that FIFA Ultimate Team card packs do not qualify as gambling creates a new and more permissive stance towards loot boxes in the Netherlands.