Nintendo could hike the price of its new Switch system past $299 to offset increasing parts costs, and the company may have troubles keeping up with massive consumer demand.
Nintendo is fighting other tech titans like Apple for critical mobile components to power its new Switch handheld-console hybrid, which could trigger a price hike for the new machine. Nintendo's Switch system uses many parts and components that are currently in high demand by smartphone makers, including its LPDDR4 RAM, NAND flash memory, and LCD panels--all of which are crucial to make mobile devices like Apple's popular iPhones tick. Demand for traditional 2D NAND flash memory, which is used in mobile devices and Nintendo's Switch system, has steadily risen as more companies push out new notebooks, tablets, smartphones and the new Internet of Things sphere of devices, and as semiconductor fabrication facilities owned by key companies such as Toshiba transition over to new premium high-end 3D NAND storage. Toshiba supplies the storage chips used in the Nintendo Switch, whereas Samsung supplies the LPDDR4 RAM. This has caused a feeding frenzy of sorts as key suppliers and device-makers grab up contracts for flash memory, and consequently squeezing supply and driving up part costs.
"Demand for our NAND flash memory has been overwhelmingly greater than supply, and the situation is likely to stay for the rest of this year," a Toshiba spokesperson told The Wall Street Journal.
Reports indicate that Nintendo plans to produce 18 million consoles this fiscal year, but based on The Wall Street Journal's reports, the components shortage may interrupt Nintendo's roadmap. If Nintendo does pay extra for key parts to make its Switch systems, it's possible the console could raise beyond its $299 retail price, as President Tatsumi Kimishima affirms that the Switch won't be sold at a loss.
In today's games market, whole titles are built with microtransactions and live services in mind, and games seem to be built around these services instead of being supplementary to triple-A gaming experiences. But GTA V publisher Take-Two Interactive says that it's in-game monetization approach is different and that it leaves money on the table so that it doesn't have to "nickle and dime" gamers.
"I have to emphasize that our approach to monetization is different than our competitors. We focus first and foremost on delighting the consumer and giving the consumer more than they bargained for," Take-Two Interactive CEO Strauss Zelnick said at the Cowen and Company 45th Annual Technology, Media & Telecom Conference in New York.
"It's sort of axiomatic, but the better the product, the more people will be willing to spend on it. Recurrent consumer spending is not a panacea; if we put out something that doesn't work, we can't get people to buy more of it. And they don't even want more of it for free if it really doesn't work."
Peripheral-maker HORI has revealed how online voice chatting will work on the Nintendo Switch, and it's not pretty.
Nintendo's new Switch handheld-console hybrid requires a convoluted audio pass-through connector to enable optimum multiplayer voice chat with online games like Splatoon 2. HORI, a Japanese company that makes peripherals for the Switch, revealed an official Splatoon 2 gaming headset--and shows just how the Switch's online chatting works in the process.
Switch audio chat is only available via a smartphone app, and since the Switch's 3.5mm headphone jack only broadcasts game audio, users will have to connect the headset to both their smartphone and the Switch at the same time in order to hear game audio and chat audio while playing in Handheld Mode. Thus an audio pass-through splitter connector is required. HORI's official Splatoon 2 headset comes with one such peripheral.
PlatinumGames is interested in making Bayonetta 3, and is discussing plans on what it'll be like and laying out early ideas. But don't expect it any time soon.
"I would like to make Bayonetta 3," PlatinumGames executive producer and co-founder Atsushi Inaba outright declared to SourceGaming at Japan's recent BitSummit event. "We're talking within the company even now about what to do. But because we're constantly talking about it, that actually makes it really hard to say. If we weren't talking about it, we could just say something random or offhand, you know, but because we're actually talking about it."
However it'll likely be a long time before Bayonetta 3 happens: the developer is currently working on a new formless, shapeless IP that's completely unrelated to its existing franchises. In fact, PlatinumGames will elevate a new game director to help facilitate and guide this new IP, and it may tap NieR: Automata's senior game designer Takahisa Taura to direct the new game.
"One thing we want you to really be aware of is that there's a new formless, shapeless IP, but we can't talk about that right now. But it's really important to us," PlatinumGames exec Atsushi Inaba said during BitSummit 2017's keynote speech
Rockstar Games parent company Take-Two Interactive makes the lion's share of its revenue from consoles, highlighting a key point PC gamers have been wondering out for quite some time.
While scanning Take-Two Interactive's fiscal year earnings I found something interesting: the company makes 81% of its net revenues from consoles, and only 19% of its net revenue from "PC and other" platforms. This isn't exactly surprising news; big-name publishers like Activision, EA, Ubisoft and Square Enix focus mostly on bringing their games to consoles over PC simply because of the platform's massive and accessible install base.
These financials give us key insight into the age old question of "why do Rockstar games take so long to come to PC?" Sure it has to do with optimizing the games for PC, but it's also a strategic and tactical decision. By releasing the game on consoles first, Take-Two is able to test out key features while pulling in revenue from the most lucrative platform. Then the game is released onto PC with a full slate of features and optimizations, with all the bugs ironed out. But this staggered launch also gives Take-Two key opportunities to build engagement, hype, and excitement and then cash in on it via game sales and microtransactions--we saw this double-time with GTA V when it was released first onto next-gen consoles, and then onto PC. The re-release of the game onto these platforms was a big event for gamers despite the fact the game was already years-old by then.
By this rationale we can assume Red Dead Redemption 2 will indeed come to PC, but it won't be available on PC when it launches in Spring 2018. Remember that RDR2 has its own online-based multiplayer gametype very much like GTA Online, so the delay could be even further out.
Nintendo has once again increased its production order for more Switch console-handheld systems to meet strong demand, sources indicate.
Japanese console-maker Nintendo is preparing for a storm of sales of its new Switch handheld-console hybrid this fiscal year, primarily during the holiday season which should be driven by its next big-name Mario game. As a result of strong Nintendo Switch sales and massive demand, the company has again substantially raised the production of its Switch console by 12.5%.
Sources tell Financial Times that Nintendo is set to produce 18 million Switch consoles during its fiscal year ending March 2018. This marks the third time Nintendo has upped Switch production: the company first produced an extra 1 million units to meet demand during the Switch's launch, enabling the strong 2.74 million global sales; the second time was shortly after Nintendo announced its fiscal year estimates and doubled the console production contract from 8 million units to 16 million units. This latest increase sees Nintendo producing a whopping 2 million more units over its revised 16 million plan.
Nintendo continues to gain momentum as investors predict Monster Hunter XX being a major Switch system-seller in Japan.
Nintendo's shares have soared to their highest point in eight years on Friday following the announcement that Monster Hunter XX, the latest entry in Capcom's ultra-popular video game series, will arrive on Nintendo's new Switch handheld-console hybrid in Japan. Thanks to the announcement Nintendo shares raised by over 5% in one day, representing a sizable $2.2 billion increase in the company's market capitalization.
Since the Switch released on March 3 of this year Nintendo shares have been steadily rising as the system gained momentum and broke sales milestones. As of Friday the company's stock sits at $300 a share (33,510 yen), surpassing last year's massive Pokemon GO share spike by 5.48%.
Thanks to heavy hitters like GTA V and GTA Online, Rockstar Games parent company Take-Two Interactive hit an all-time high in add-on earnings.
In the fiscal year ending March 2017, Take-Two Interactive hit a record milestone in monetization earnings, with Grand Theft Auto Online's lucrative in-app purchases leading the pack. "During fiscal 2017, we delivered Bookings and cash provided by operating activities that significantly exceeded our original expectations, along with revenue growth and margin expansion," Take-Two Interactive CEO Strauss Zelnick said in a recent report. "These results were driven by the continued extraordinary performance of Grand Theft Auto V and Grand Theft Auto Online, a diverse array of exciting titles from 2K, and record digitally-delivered revenue and Bookings, including our highest-ever from recurrent consumer spending."
To get an idea of just how much of an impact GTA Online and other digitally monetized games affect Take-Two's earnings, let's take a look at the financials themselves. Take-Two's total digital net revenue surged to $921.7 million for the fiscal year, representing a mighty 32% year-over-year boost. The company says recurrent consumer spending via microtransactions, in-app purchases and DLC in games like GTA Online made up an incredible 50% of all digitally-delivered net revenue, or 26% of all total net revenues for the period. This means in-app purchases raked in raked in almost half a billion dollars in net revenue for Take-Two, or $460.85 million.
Red Dead Redemption 2 is being developed specifically to harness the power of a "new generation of consoles," hinting the game will run in 4K with HDR support and expansive features on consoles, while leveraging the full brunt of Microsoft's high-end Project Scorpio console and Sony's new PS4 Pro system.
Rockstar Games recently delayed Red Dead Redemption 2 to Spring 2018, and now its parent company Take-Two Interactive recently commented on why the game was pushed back, affirming the sequel is being built from scratch for the first time ever.
"The purpose of the delay of Red Dead Redemption 2 is to make sure we deliver the most extraordinary experience we're capable of providing," Take-Two Interactive CEO Strauss Zelnick said during the company's recent earnings call. "We haven't run into particular [technical] issues [with development], and we are building Red Dead Redemption 2 as a new game from the ground up for the first time for the new generation of consoles."
Square Enix is eager to embrace the games industry's gravitation towards the digital games as a service business model, and will bake in key features in its future games to ensure long-term monetization.
Today's games market is ruled by digital operations: big-name publishers like Activsion and EA are finding new and inventive ways to make money from digital online games via microtransactions and key engagement models. Square Enix wants its cut too, and the publisher has re-affirmed its commitment to the games as a service model, and will plan its upcoming slate of titles with revenue opportunities in the form of in-game purchases and other lucrative staples.
Square Enix recently held a fiscal year results briefing to break down its successes in last year's earnings, and outline future plans. According to Square Enix CEO Yosuke Matsuda, the Japanese games-maker will incorporate this business model into its games across all platforms--especially its smartphone and PC browser-based gaming segment. There's also plans to bring its arcade games to the entire global gaming audience via digital online game streaming.