Year in Review - Q3
Midway's closure brought an end to a series of increasingly unfunny "Finish him!" puns.
In the previous two years, July was a hotbed of activity for the gaming industry, thanks to an influx of news stemming from the Electronic Entertainment Expo. However, because North America's preeminent gaming convention flaunted its glitz during June in 2009, July proceeded at a plodding pace. And considering the often dreary nature of many of the bigger stories that did emerge during the month--not to mention the summer as a whole--the adage "no news is good news" seemed to apply.
The first full month of the summer began with two former industry titans bowing to their new corporate overlords. With Midway Games facing an insurmountable debt load, Warner Bros. received court approval to purchase the publisher and the bulk of its remaining assets--including the Mortal Kombat IP and the studio that develops it--for $49 million. Midway's Chicago headquarters were promptly shuttered, along with its Newcastle outfit, as THQ swooped in to pick up TNA Impact developer Midway San Diego for a mere $200,000. By summer's end, the company was in the final stages of liquidation, existing in name only.
Square Enix also performed a bit of housekeeping related to its recent purchase of UK publishing giant Eidos Interactive, retiring the label in July. Though the Eidos name would live on through the company's development houses, the move resulted in an unspecified number of "redundancies" as Square Enix consolidated the publisher's operations in North America and Europe.
Nobody was smiling at Bionic Commando developer GRIN, which closed its doors in August.
Midway and Eidos weren't the only gaming companies to be hit with layoffs during the summer months. On the same day that Activision said it would be trimming Wolfenstein developer Raven Software after that game saw disappointing sales, EA announced staff cuts at its Maxis studio. Other studios to be hit with layoffs or shut down included Sony Online Entertainment, Damnation creator Blue Omega, Six Days in Fallujah developer Atomic Games, and Bionic Commando house GRIN.
The industry's belt-tightening could be seen as indicative of an overall slump in sales. Any delusion that the game industry was somehow recession-proof evaporated over the summer, as the NPD Group's June, July, and August US retail sales reports reflected respective 31 percent, 29 percent, and 16 percent drops. Those developments were echoed in Japan, where reports indicated that the market fell off by 24 percent during the first half of 2009.
Perhaps unsteadied by the weakness in the market, a whole host of publishers opted to hold off on releasing their wares until 2010, in the hope that the retail environment would be less hostile. Big-name games that dropped out of the relatively vacant 2009 holiday window included Ubisoft's Splinter Cell: Conviction and Red Steel 2; Activision's Singularity and Blur; Blizzard's Starcraft II; Capcom's Dark Void; Sega's Bayonetta and Alpha Protocol; Take-Two's BioShock 2; and Sony's MAG.
With Activision chief Bobby Kotick advocating a mentality of "skepticism, pessimism, and fear" within his studios over the global economic downturn, many within the industry were taking steps toward righting the ship. Namely, August was rife with rumors concerning hardware price cuts from all three console manufacturers, and none disappointed.
Sony games chief Kaz Hirai unveiled the PS3 Slim at GamesCom, surprising absolutely nobody.
Sony led things off in August at the Games Convention in Cologne, Germany, introducing the sleeker PlayStation 3 Slim at the $299 price point. The $100 trim was made possible thanks to a 70 percent reduction in the system's production costs. The move quickly proved to be a boon for the struggling electronics company, with Sony saying that console sales spiked some 300 percent at "top retailers" following the price cut.
Microsoft responded to Sony's move two weeks later, phasing out its mid-line Pro unit and dropping the MSRP on its 120GB Elite model to $299. The price cut came as Microsoft rolled out its fall Xbox Live update, which introduced a new set of features for the Xbox 360's online platform, including game-download service Games on Demand and the Avatar Marketplace.
In early August, Nintendo president Satoru Iwata appeared adamant in keeping the Wii's $250 launch price in place, even after seeing its April-June quarter revenues dip 40 percent as profits slipped 60 percent. With analysts clamoring for an imminent price cut and third-party executives predicting a new console by 2011, Nintendo changed its tune by September, trimming $50 off the Wii's price tag.
Blizzard took the wraps off the latest World of Warcraft expansion, Cataclysm, at BlizzCon 2009.
A number of behind-the-scenes developments also occurred during the summer months. Namely, Disney went shopping, dropping $4 billion on comic book house Marvel and an undisclosed amount on Halo cocreator Alex Seropian's Wideload Games. Also, Ubisoft established a massive new studio in Toronto, which is set to hire up to 800 developers over the next 10 years, and Activision poached EA's Dead Space team at Visceral Games to form a new Bay Area studio, later dubbed Sledgehammer Games.
On the games front, Microsoft began ramping up internal hiring to work on Project Natal titles, while also announcing a whole host of third-party support for its camera-based motion-sensing add-on for the Xbox 360--and perhaps the PC. Sony's own EyeToy-compatible motion-sensing controller for the PlayStation 3 picked up a spring 2010 release window.
Blizzard revealed the name of World of Warcraft's latest expansion, Cataclysm, and also dropped more hints about its future massively multiplayer online role-playing game, saying the all-new IP would have a broader appeal. Speaking of new IP, Halo house Bungie revealed that it was close to signing a publisher for its all-new effort. However, beyond a highly publicized meeting with Capcom, no additional information on that front has surfaced.
--Tom MagrinoBest of 2009: Q3 Timeline
July:
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Square Enix retires Eidos publishing label
Japanese pub consolidates operations in Europe and NA, confirming some headcount reduction; British company's name will live on through dev studios.
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Midway's Chicago HQ closing, final buyout price $49 million
Sixty employees at publisher's offices laid off, but 100-plus Mortal Kombat dev team rehired by Warner Bros.; $69 million to $76 million in assets and development costs written off.
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June US game sales sink 31% as Prototype triumphs - NPD
Analysts' fears exceeded as hardware sales nosedive 38 percent year-on-year--but rise monthly; DS still sells 766,500 as Activision's superhero platformer swoops off with nearly 600,000.
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Nintendo sales slide 40%, profits plummet 60%
Slowing hardware market, lack of hit new releases, currency fluctuation batter Mario maker's first fiscal quarter; worldwide Wii total tops 52 million.
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RUMOR: Microsoft names internal Halo label?
US patent filing for "343 Industries" raises possibility of division named after game antagonist 343 Guilty Spark.
August:
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Starcraft II officially delayed to 2010
Following wide speculation, Blizzard Entertainment confirms heavily anticipated PC sci-fi RTS will now ship during the first half of next year.
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July US game sales sink 29%, Wii Sports Resort on top
NPD reports game industry's fifth straight month of double-digit decline; hardware down 47%, software 26%; Nintendo and EA titles claim entire top 10 best-seller list.
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$299 PS3 Slim unveiled, existing console prices drop Aug. 19
GamesCom 2009: Thinner, matte-finish 120GB model goes on sale first week of September; 80GB $299, 160GB $399 starting tomorrow; new PS3 motion-control details at TGS; PSN to offer 100MB "PSP Minis" casual games; digital comics coming in November.
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$299 Xbox 360 Elite official, Pro 'phased out'
[UPDATE] Microsoft confirms $100 price cut of 120GB console begins Friday, 60GB model $249 "while supplies last"; 31 million 360s sold; HD cables no longer packed in; avatar store "exceeding wildest expectations."
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RUMOR: New WOW expansion name and races revealed?
Enthusiast blog claims massively popular MMOG's latest expansion subtitled Cataclysm, goblins joining the Horde, Worgen falling in with Alliance.
September:
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US PS3 sales up 300% at 'top retailers' - Sony
SCEA declares Slim has energized console sales at select stores, with PlayStation-platform hardware sales up 140% week-over-week.
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NPD: US game industry slips 16% in August, PS3 sales nearly double
1.9M units of EA's footballer couldn't prevent double-digit decline; analysts believe Sony has hit "sweet spot" with $299 PS3 Slim; Arkham Asylum, Wii Sports Resort score, while Wolfenstein, G.I. Joe flop.
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Wii officially $200 starting Sept. 27
As widely rumored, console's first price cut set to go into effect on Sunday, nearly three years after original launch date.
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No UMD conversion for PSP Go
Previously purchased disc-based games won’t be playable on Sony’s new handheld due to "legal and technical reasons"; no PSP Go Rewards program in NA.
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RUMOR: Bungie and Capcom teaming up?
Mega Man creator Keiji Inafune pays visit to House of Halo, expresses interest in collaborating on future project "if things clicked."
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