For Over 25 Years DFC Intelligence Analysts Have Been Cited For Insights on the
Video Game Industry
Click a topic to see examples of DFC media interviews.
DFC also does regular investor interviews and briefings analyzing the impact of recent news and trends.
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November 2020: Wall Street Journal video How PlayStation Saved Sony
Online Games and Games as a Service
DFC Intelligence was an early tracker of online games and the movement to digital delivery. The Los Angeles Times and Salon are two examples of publications that contacted DFC to look ahead to online trends.
In both cases the major issue was how can the market grow and how many products can it support?
DFC was a pioneer in tracking the growth of a video game market in China. Back in 2006 when there was no market the South China Morning Post quoted DFC on China as having major growth potential. Of course, DFC underestimated that growth potential as China is now the world’s leading video game market.
In May 2006 South China Morning Post discussed an Alliance set to drive China gaming. DFC Intelligence discussed market size.
The Financial Times and Wall Street Journal were two publications that started to look at how online games might pioneer new business models and expand the audience. The focus was on mass market games going online. At the time, DFC Intelligence was working closely with companies like Lego and Disney to explore the market growth opportunities that exploded over the next decade.
The past decade has seen enormous interest in the idea of cloud games, or what is now often called a Netflix for games. This trend has come and gone and saw its latest hype cycle in late 2019 when Google launched the Stadia service. As always, DFC Intelligence was around to burst a bubble in the latest big new thing, even as cloud games still have a big future.
The cloud game trend will only heat up in 2021 with new services from Microsoft and Amazon. This is a complicated on which DFC has a great deal to say. There will likely be some successful services but the competition will be stiff.
In October 2019, Investor’s Business Daily expressed DFC’s skepticism on new cloud services in Cloud Ventures Look to Upend the Traditional Video Game Business. In November 2019, Tech News World cut right to the chase with Early reviews suggest Google Stadia Needs More Time in the Oven. In early 2019, DFC was skeptical about Apple’s rumored game subscription service, but when the service launched at the end of the year we were impressed.
Forecasting New Console Systems
New video game hardware systems are the biggest news generator for the video game industry. DFC has a solid track record of assessing sales potential
The first console generation DFC forecasted in detail was for the 1995/1996 launch of the Sega Saturn, Sony PlayStation and Nintendo 64. Admittedly our forecasting was not as sophisticated. However, DFC was vocal about the long-term potential for dedicated console at a time when many analysts believed that personal computers would make consoles obsolete.
One of DFC’s first quotes was in Newsweek on the launch of the Nintendo 64. In describing the “incredible marketing” around Nintendo’s Hot Box we stated the core theme of the importance of marketing,
In 1999, the Los Angeles Times looked to DFC to analyze the market for new console systems. At the time the Sony PlayStation 2 and Sega Dreamcast were preparing for launch. The article was interesting because it quoted Kevin Bachus of Microsoft on why PCs were better than consoles. Bachus was a key pioneer behind the original Xbox which launched two years later.
Seduced by the Game Los Angeles Times May 1999
For the 2005/2006 launch of the Xbox 360, PlayStation 3 and Nintendo Wii, DFC Intelligence was more vocal in its opinion. Sony’s strategy was a mistake in DFC’s opinion and that was famously expressed in a piece entitled Could Sony go From First to Worst? Sony had a huge lead with the PS2, but DFC thought the company was opening the door for Nintendo and Microsoft. At the time this was a contrary opinion but it proved to be correct.
With the 2012/2013 launch of new systems, DFC’s analysis of the situation had flipped. This time it was Microsoft’s strategy that was questioned. DFC went on the record as saying that the PlayStation 4 would likely do very well with weaker offerings from both Microsoft and Nintendo. This proofed correct as the Wii U was one of Nintendo’s biggest failures and the PS4 outsold the Xbox One by about 2-to-1. While some observers claimed DFC was on Sony’s payroll the, at-the-time, pessimistic DFC forecasts for Microsoft and Nintendo were actually too high.
The 2020 launch of the PlayStation 5 and Xbox Series X/S is a huge news story continuing into 2021. As details about the new systems were unveiled, DFC became increasingly vocal about its opinion. DFC now forecasts that the PlayStation 5 will significantly outsell the Xbox systems. However, this has become an increasingly complicated issue that is about more than just pure hardware sales. Increasingly consoles are becoming a platform to sell multiple services and the short-term versus long-term outlook is a complicated issue. To see some of DFC’s recent media insights. Check out some of these articles.
DFC Intelligence was fairly bullish about the Switch launch. For the first three years of the system Switch sales met our expectations. However, sales exploded with the COVID crisis of 2020. In 2021, a major focus will be on the sales potential for Nintendo products.
Analysis around Nintendo products has been a long-term topic for DFC Intelligence. Nintendo has proven how to capture revenue from rereleasing older video game products. This is a trend that many companies may look to capitalize on in coming years.
In late 2016 the New York Times asked DFC’s opinion on the NES Classic. A major theme of DFC analysis has been how video game companies can capture nostalgia and not necessarily focus on the bleeding edge.
A 2014 CNBC video piece interviewed DFC analyst David Cole on how Nintendo software did well despite poor hardware performance.
DFC Intelligence did detailed work on the 2007/2008 merger of Activision and Vivendi Universal to create Activision Blizzard. This included custom analysis for government regulators looking at anti-trust aspects. DFC data was used to show that the market for online games was much larger than the big open world MMO games that dominated the headlines at the time.
At the time of the merger, Wired magazine talked to DFC about the merger in the context of the exploding growth on global online games.
A recent merger was the late 2020 acquisition of Zenimax Media/Bethesda Studios for $7.5 billion. DFC had done extensive work for investors over the years evaluating the value of Zenimax holdings.
DFC Intelligence has been tracking mobile games for year and published early reports on the rise of the iPhone and gaming on smartphones and tablets.
This was followed by an article on how Apple was becoming Nintendo’s leading rival.
As the mobile game market has boomed, a major area of interest is in the ability of companies to launch high-end games and services for mobile devices.
In early 2019, Tech News World contacted DFC about Apple’s rumored new game subscription service. This eventually launched in launched in late 2019 as Apple Arcade.
A major focus of DFC Intelligence is on changing ways companies are able to generate revenue from video game consumers.
This incudes areas like the emergence of games as a service and free-to-play games in first Asia and later on a global basis.
It also includes many diverse areas such as subscription models, advertising in video games, player to player wagering, building a metaverse and many more.
Industry trade publication Gamasutra picked up DFC’s early 2009 coverage of the movement of Asian free-to play business models to Western markets.
A decade later this market had exploded and Gamasutra again covered the growth that companies like Activision Blizzard and Electronic Arts were seeing from the new business models.
The idea of wagering in video games has been around for years. In late 2020, Bloomberg came to DFC for an overview of this segment that DFC has helped investors cover for years.
New and Upcoming Products
DFC Intelligence frequently is asked to comment on sales potential for major upcoming product releases.
The specialty of DFC is sales and market potential for products or product categories. DFC regularly conducts private briefings on sales potential for companies and products.
Product and company analysis is made on a case-by-case basis.
See links for examples of past quotes.
In May 2020, Amazon launched its first major video game. DFC discussed with Reuters and CNN why Amazon’s game development strategy was flawed.
Bloomberg did a similar piece on the Amazon game release. Amazon game development. This was followed in January 2021 by a detailed analysis of struggles at Amazon Game Studios.
Ouya was one of many startups looking to compete in the game console space. Reuters reported on this in 2013 using DFC numbers for context.
Reuters also contacted DFC to look at the category of online mystery games.
For many years, the annual E3 show in Los Angeles was a popular time for new product reveals. DFC always helped journalists looking to cover the hot news from the show.