There is no mistaking this is an ugly year on the console game side.\u00a0 While PC and mobile games chug along, the console business waits for the PlayStation 5 and Microsoft\u2019s Project Scarlett.<\/p>\n
During 2019, market leader Sony showed signs of fumbling.\u00a0 Management turnover, focusing on movement to the new generation, and concern over cloud competition with Microsoft, Google and others, preoccupied Sony.\u00a0 The focus was more on PlayStation 5 and cloud gaming.\u00a0 Less attention was paid on continuing to engage the consumers that bought over 100 million PlayStation 4 systems.<\/p>\n
Luckily for Sony, Microsoft has all but given up on the Xbox One as it busily prepares for Xbox One.\u00a0 This left Nintendo to fil the void.\u00a0 Arguably, Nintendo had its best year ever.\u00a0 In the first half of Nintendo\u2019s fiscal year ending 9\/30\/2019 hardware revenue was up 37% and software revenue was up 39%.<\/p>\n
Outside of Nintendo, the holiday 2019 offerings are bleak.\u00a0 Electronic Arts has its annual sports offerings and the largely single-player Star Wars Jedi: Fallen Order.\u00a0 Activision has a new Call of Duty.\u00a0 In September, Take-Two Interactive launched Borderlands.\u00a0 That is about it.<\/p>\n
Surprisingly stocks of third-party console publishers have mostly been up in 2019.\u00a0 The market has become more sophisticated to the games-as-a-service model that the industry is moving towards.\u00a0 Quality over quantity is the new theme.<\/p>\n
France based Ubisoft is probably the biggest failure of 2019.\u00a0 Ubisoft\u2019s long-term strategy of throwing products against a wall to see what sticks is clearly not working in today\u2019s market.\u00a0 Ironically, Tom Clancy\u2019s Ghost Recon Breakpoint proved to be exactly that.\u00a0 After its disappointing October launch, Ubisoft lowered its fiscal year revenue forecasts to \u20ac1,450 million from \u20ac2,185 million.\u00a0 This is because they decided to delay major product releases to spend more development time improving quality.\u00a0 Investors were actually not too harsh on Ubisioft stock.<\/p>\n
The good news is that the struggles of major players open all kinds of opportunities.\u00a0 This holiday season, Nintendo is jumping in to fill the void.\u00a0 However, there are many openings for opportunistic players.\u00a0 Consumers still like to buy new things during the holiday season.\u00a0 The Outer Worlds, an indie title from Take-Two\u2019s Private Division, is an example of a product that can enjoy greater success in this environment.<\/p>\n
The final year of this decade will go down as relatively uneventful for the video game industry.\u00a0 However, it is also the harbinger of major changes.<\/p>\n
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- With a new console cycle, key issues DFC Intelligence is looking at going into 2020 include:<\/li>\n
- As Sony\u2019s market share in video games declines how will investors react?<\/li>\n
- How will a surging Nintendo impact sales of new hardware from Sony and Microsoft?<\/li>\n
- Can Sony and Microsoft compete in the broader trend to portable devices?<\/li>\n<\/ul>\n
One area we do not think will be a major focus in 2020 is cloud gaming.\u00a0 As we mentioned, the launch of Google Stadia shows cloud subscription services have a long way to go.\u00a0 These services may have some potential bundled with hardware, but standalone services like Stadia do not cut it.<\/p>\n
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