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Xbox’s Bethesda acquisition is evidence of blockbuster gaming’s volatility – VentureBeat

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Microsoft’s Xbox gaming division is acquiring The Elder Scrolls V: Skyrim publisher Bethesda for $7.5 billion. And it’s difficult to overstate how much this changes gaming. The easiest way for me to think about this is that Xbox just bought one of the only other companies that actually has a major media presentation during E3 (the Electronic Entertainment Expo trade show) each year. This has led to a lot of talk about what the purchase means for Xbox and its Game Pass subscription service. But the deal tells us just as much about how unsustainable the triple-A blockbuster gaming business is.

Bethesda is one of gaming’s main publishing companies. Like Ubisoft, Electronic Arts, and Take-Two, it built a business by creating studios and releasing games for PC and consoles. Its biggest releases are megahits like The Elder Scrolls V: Skyrim and Fallout 4. And yet the owners of ZeniMax Media — the parent corporation of Bethesda — sold off their interests in the gaming business to Xbox. Why? What is happening in games that would make ZeniMax stakeholders want to cash in?

Well, the explanation is evident in the recent history of Bethesda, and it speaks to the challenges facing the entire games-publishing business.

One flop away from failure

Making video games is a difficult and volatile business. Blockbuster budgets inflated over the last 10 years to well over $100 million for a single, top-tier release. And that makes every game a massive bet that could prove disastrous.

On top of this, publishers and developers struggle to predict what consumers will want. The audience has fickle tastes. And even when a studio is working on something with proven appeal, like a military shooter, they must compete against ingrained properties often from teams with even bigger budgets.

This leads to escalating investment costs as studios try to compete. Is your game not as pretty as Red Dead and not as big as Assassin’s Creed? Well, that sounds like a game I can wait to play until it’s on sale.

Live-service games come for us all

The especially tough thing for publishers is that even if they launch a high-quality game to good reviews, it’s often not enough to pull an audience away from their chosen live-service games. More players are returning to evergreen hits like Fortnite, Rainbow Six: Siege, and Warframe repeatedly for months and years at a time.

In that environment, it often seems like only the most prestige single-player narrative-driven games breakout from the crowd. This raises the threshold for what games can succeed. This is why you’ll often hear people lamenting that the middle-tier game is disappearing. The threshold for success is higher than ever. On the PlayStation 2 and then the Xbox 360, a “B” game could make a return on its investment. Now, they struggle to pull any attention away from whatever is hot on Twitch at the moment.

That can leave publishers feeling like the only safe bet against this trend is their own live-service games. But these are just as hit driven as any other game. The only upside is that developers have a better chance of slowly building a service game into something more appealing over time.

Subscriptions and stores

The other way to compete is to start your own distribution store, your own subscription service, or both. If a company can directly monetize their audience, this can offset some of the increasing costs of development. No more sharing 30% with Steam. And establishing steadier and more predictable revenue streams.

But the challenge is that starting your own PC digital store is expensive. Epic Games continues to invest heavily into its Epic Games Store, and it’s still struggling to compete with Steam. And a subscription service requires a huge upfront investment to build content without any guarantee that players will stick around.

Bethesda tried everything

Bethesda ran into all of the problems I listed above.

It tried to compete with high-budget single-player experiences. At E3 2017, the company even had an initiative called #saveplayer1 about ensuring the future of solo games. That led to games like a Dishonored 2 expansion, The Evil Within 2, and Wolfenstein 2: The New Colossus. But none of those games were huge financial successes, even if they all are beloved by their fans and received positive reviews.

Bethesda then tried to launch the live-service game Fallout 76, which had a disastrous release (although it’s slowly building an audience through updates that have improved the game). That game likely would have performed better if Bethesda would have delayed it, but — again — making games is difficult. That’s the point.

The publisher also tried its own store with the Bethesda Launcher on PC, only to witness EA soften its position toward running the EA Origin store. It also saw companies like Ubisoft and EA try their own subscription services. Bethesda knows how expensive and challenging it would be to get those programs off the ground. And in the end, Steam and Xbox Game Pass are probably still going to win in the end.

The reality is that the industry is going through a massive shift where publishers probably aren’t going to look like the company Bethesda grew into. That left its stakeholders with an option: Try to figure out the painful process of transforming Bethesda into something new, or sell Bethesda to a company that needs it. And Microsoft can use Bethesda because Game Pass is already a de facto industry standard with 15 million subscribers.

This deal ensures that the people and teams that make up Bethesda have a chance to remain together. The alternative under an independent ZeniMax Media was likely closures, layoffs, and fewer games. And I guess that’s the good news for fans. This deal will get you more games.

Meanwhile, if you’re one of the people on the receiving end of that $7.5 billion payday, take that money. In a few years, gaming’s tectonic plates will settle into place — at least momentarily. And then you can start your next gaming startup when you know what the future looks like.

Media consolidation is bad, but so is everything

Not to give into nihilism, but I can only get so worked up regarding concerns about media consolidation. This Microsoft move echoes Disney’s efforts in film and TV, but it’s not like the status quo in gaming has led to a dynamic and healthy market. And ZeniMax’s options here were likely shrinking down to either selling or aggressively reorganizing. Business as usual was probably not under consideration.

And the reorganizing option would have led to studio closures and layoffs. Under Microsoft, the plan (for now) is to let Bethesda keep operating as it always has. It seems like most of the people involved will continue in their current positions. The only difference is that Satya Nadella will sign their paychecks.

So yeah, media consolidation is bad and reduces competition. But game publishers are so afraid of the aforementioned risks that we don’t have a ton of competition in the blockbuster segment as is.

Ultimately, I view Microsoft’s Bethesda acquisition as an enabling move. It is purchasing eight new studios to empower them to keep making games. This is distinct from prohibitive moves where a company pays a publisher a fee to keep a game off of a competing platform.

It’s hard to say that the deal is good for the game industry, though. But for now, it’s probably better for the people making games at Bethesda.

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Here's what every major Wall Street analyst says about Apple's earnings report – CNBC

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CEO Tim Cook waves while arriving on stage during a previous Apple Worldwide Developers Conference (WWDC) in San Jose, California.
David Paul Morris | Bloomberg | Getty Images

(This story is for CNBC Pro subscribers only).

Apple’s latest earnings report was received cautiously by top Wall Street analysts as uncertainty around iPhone sales weighed against better-than-expected headline numbers.

The consumer tech giant reported higher-than-expected earnings per share and revenue for its fiscal fourth quarter Thursday, with results for services, Mac computers and iPads beating projections. Sales of the flagship iPhone, however, fell short, and Apple did not provide guidance for the upcoming quarter.

Shares of Apple were down about 4% in premarket trading to around $111 per share as traders digested the report.

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PSA: Apple One Premier Bundle Only Available in US, UK, Canada, and Australia – MacRumors

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Apple’s new Apple One series of services bundles launches on Friday in over 100 countries and regions, but the top Premier tier will be limited to the United States, the United Kingdom, Australia, and Canada.


The limited rollout of the $29.95 Premier tier is down to the fact that Apple News+ is currently only available in the above countries. Apple News+ is exclusive to the Premier tier, along with Apple Fitness+, which isn’t expected to arrive until later in the year.

Here’s how the Individual, Family, and Premier tiers stack up:

  • Individual: Apple Music, Apple TV+, Apple Arcade, and 50GB of iCloud storage for $14.95 per month
  • Family: Apple Music, Apple TV+, Apple Arcade, and 200GB of iCloud storage for $19.95 per month, can be shared among up to six family members
  • Premier: Apple Music, Apple TV+, Apple Arcade, Apple News+, Apple Fitness+, and 2TB of iCloud storage for $29.95 per month, can be shared among up to six family members

Apple One’s Individual tier offers savings of $6 per month, while the Family plan offers savings of over $8 per month, and the Premier plan offers a savings of over $25 per month, compared to standard monthly pricing. Apple One includes a 30-day free trial for any services that customers do not already have.

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PlayStation CEO thinks VR's bright future is still years away – Engadget

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Engadget

Sony offering PSVR owners a free camera adapter to use with the PS5 pretty much tells you that the company has no plans to release a new virtual reality headset anytime soon. Now, Sony Interactive Entertainment CEO Jim Ryan has confirmed to The Washington Post in an interview that there “won’t be any immediate leaps forward” from the company when it comes to virtual reality. He didn’t talk about hardware in particular, but based on what he said, it’s unclear when we’ll see the next-gen PSVR.

That doesn’t mean PlayStation is stepping back from virtual reality. Ryan told the publication that the company believes VR will “represent a meaningful component of interactive entertainment,” though it probably won’t happen anytime soon. He also said that the company is looking forward to seeing where the lessons it learned from PSVR will take it, ensuring PlayStation’s continued investment in virtual reality. He said:

“I think we’re more than a few minutes from the future of VR. PlayStation believes in VR. Sony believes in VR, and we definitely believe at some point in the future, VR will represent a meaningful component of interactive entertainment. Will it be this year? No. Will it be next year? No. But will it come at some stage? We believe that. And we’re very pleased with all the experience that we’ve gained with PlayStation VR, and we look forwarding to seeing where that takes us in the future.”

In addition, Ryan talked about Sony’s hopes to grow PlayStation Plus’ subscriber numbers. The company will offer Plus subscribers on the PS5 access to “20 free top-tier PS4 games” so they can give older games a try. When it comes to upcoming games for its next—gen console, Ryan said that putting technologies like “3D Audio and haptic feedback… in the hands of a great game developer” will take “immersiveness… to the next level.”

Ryan expects more games with rich storytelling and narrative elements, as well, since they’ll be much more powerful “when they’re realistic,” which is something the PS5 is capable of providing. “[T]here’s this kind of happy sort of synergy between technology progress and our great ability to tell stories,” he explained. “I see that’s a trend that will only continue.”

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Sony, PS5, Jim Ryan, news, gaming
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