“Starting with Studios, the $400 million+ year-over-year decline during Q1 was primarily due to the very tough comp we faced in games against the success of Hogwart’s Legacy last year in the first quarter, in conjunction with the disappointing Suicide Squad release this past quarter, which we impaired, leading to a $200 million impact to EBITDA (earnings before interest, taxes, depreciation, and amortisation) during the first quarter,” CFO Gunnar Wiedenfels said during the investor call after the report was published.
This doesn’t line up at all with what Insider Gaming wrote. I don’t think they know how to interpret company financials.
Costing revenue itself is a questionable phrase. A game can miss its revenue target, but that’s not the same thing. Here it looks like earnings were lower by $200M due in part to more than $400M lower revenue comparing to a Q1 2023, which had the Hogwarts Legacy release.
So basically the single player offline game made bank, but they keep pushing this live service crap thinking it’s going to be the next GTA online and not what 90% of the live service crap ends up being.
That’s the thought process, and it’s also what’s going to bring a lot of these companies down. Their shitty game isn’t going to beat the odds when all the other shitty games are also being pushed. Their chance of success and potential return figures are likely off by a large margin.
Edit: For example, Overwatch, which has actually hit the mainstream and has a fairly large player base, I think still isn’t profitable.
Yeah, I think the first few years were profitable (excluding Overwatch League), but OW2 for sure hasn’t been. I don’t think OW1 was by the end either.
They had no way to make more money and it was a one time purchase. The switch to OW2 sucks, and it was exploitative as fuck and full of lies, but they did need some form of continuous revenue stream. It just wasn’t the greedy way they went about it, pushing everyone away.
This is a very good point. It also shows the delusion of the executives, thinking that their next shitty looter shooter will become the new Fortnite, not understanding the oversaturation of the market. People have limited hours to play per day, the only way they can play your game is if they stop playing something else.
Good demonstration of the current quality of journalism. “Cost X in revenue” doesn’t make any sense, as cost and revenue are the exact opposite things, the difference of which (if I simplify) make up the EBITDA that the quote from the company actually referenced for the 200 M USD negative impact.
I’m not expecting a game journalist be an ACCA certified accountant, but should be at least able to write an accurate title based on the available quotes and information.
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This doesn’t line up at all with what Insider Gaming wrote. I don’t think they know how to interpret company financials.
Costing revenue itself is a questionable phrase. A game can miss its revenue target, but that’s not the same thing. Here it looks like earnings were lower by $200M due in part to more than $400M lower revenue comparing to a Q1 2023, which had the Hogwarts Legacy release.
So basically the single player offline game made bank, but they keep pushing this live service crap thinking it’s going to be the next GTA online and not what 90% of the live service crap ends up being.
You miss 100% of the shots you don’t take. One in ten isn’t bad odds.
Alana Pierce has a great take on this. Her pount is that all games are a risk, but live service has a chance at infinite upside.
Suits dont give a shit about anything but risk/reward, so live service always seems like the right choice to them, even if 99% of them bomb.
That’s the thought process, and it’s also what’s going to bring a lot of these companies down. Their shitty game isn’t going to beat the odds when all the other shitty games are also being pushed. Their chance of success and potential return figures are likely off by a large margin.
Edit: For example, Overwatch, which has actually hit the mainstream and has a fairly large player base, I think still isn’t profitable.
I think it was profitable, at one point, up until the bait and switch that was Overwatch 2.
Yeah, I think the first few years were profitable (excluding Overwatch League), but OW2 for sure hasn’t been. I don’t think OW1 was by the end either.
They had no way to make more money and it was a one time purchase. The switch to OW2 sucks, and it was exploitative as fuck and full of lies, but they did need some form of continuous revenue stream. It just wasn’t the greedy way they went about it, pushing everyone away.
This is a very good point. It also shows the delusion of the executives, thinking that their next shitty looter shooter will become the new Fortnite, not understanding the oversaturation of the market. People have limited hours to play per day, the only way they can play your game is if they stop playing something else.
If it costs 200 million to take a shot, maybe it isn’t great odds.
If you’ve got a market cap of three trillion and the investors expect three trillion plus one next quarter, can you afford to risk it?
Good demonstration of the current quality of journalism. “Cost X in revenue” doesn’t make any sense, as cost and revenue are the exact opposite things, the difference of which (if I simplify) make up the EBITDA that the quote from the company actually referenced for the 200 M USD negative impact.
I’m not expecting a game journalist be an ACCA certified accountant, but should be at least able to write an accurate title based on the available quotes and information.