Game Studio Flight From Microsoft A Sign of Troubles? 122
Newsweek's LevelUp blog continues to produce some highly interesting material. Today they have up a look at the 'flight' of game studios from Microsoft's corporate umbrella. BioWare's purchase by EA distances it a bit from their cosy relationship with Microsoft, as does Bizarre's purchase by Activision. Bungie's departure from the company itself goes without saying. So what does all this mean? Is this a sign of troubles in Redmond, or just more fallout from the huge undertaking required to get the Xbox 360 to the position it has today? "For us, the flight of the Killer B's is a clear indication that Microsoft as a whole is still shell shocked not only by the massive losses in the Xbox division, but also more importantly by the poor showing of Rare, which has to rank as not only one of the Microsoft's least successful purchases, but as quite possibly the worst acquisition in the history of gaming. Microsoft paid $375 million in cash for Rare, and based on the modest revenues from its ensuing titles--a Conker's Bad Fur Day remake, Grabbed by the Ghoulies, Kameo, Perfect Dark Zero and Viva Pinata--all they've got to show for it is that proverbial lousy T-shirt, completely stained with red ink."
Bioware? Bizarre? (Score:3, Insightful)
Re:Bioware? Bizarre? (Score:5, Insightful)
If they go platform neutral that's a large blow to Microsoft's Third Party development and the release of Bungie is a huge blow to Microsoft's internall developed games. Overwall it reflects poorly on the 360s continued success. It might be a blip or it might be the first signs of major trouble in Microsoft's games department.
To put it more bluntly, the idea is that if Microsoft were on the ball and interested in developing first part titles for the 360, they would have kept Bungie and bought both Bioware and Bizarre. As it is now, they are leaving themselves very much at the mercy of their third party games developers. Hoping that they will stick with the Xbox line of products. If the PS3 ever surpasses the Xbox in sales (I know, not terribly likely at this time), they could end up royally screwed.
So? (Score:2, Insightful)
Re:Rareware (Score:4, Insightful)
Now it seems Rare has gotten lazy, and MS let that happen. Nintendo's probably been laughing their butts off at all this. AS IF Rare could have made $375 mil for Nintendo if they'd been this lazy releasing games for GCN.
Xbox Losing Money? (Score:4, Insightful)
Last I heard MS was already making a profit on the 360, due to the cost coming down quicker than expected. Yes they took that billion dollar charge, but as I understand it each one sold is still profit at this point.
Add onto that some pretty killer titles in the last year and MS has made some cash. Halo3 alone would offset any losses in the last year I would assume. (Short of the charge).
If you read the statement Bungie released on their website it sounds more like what MS did was pull lots of companies into the fold, in order to foster the growth of its image as a gaming company. Now that they've established their beachhead, they can let those companies go sink or swim on their own merits.
I think Rare is the perfect example of why MS is letting the studios go (though still in publishing agreements for many of them). With a good partner relationship MS doesn't take on the risk of a studio starting to turn out poor quality product. At the same time, its become a large enough, established enough player, that those publishers will pay attention to MS, even if they aren't subsidiaries.
Re:Rareware (Score:4, Insightful)
And yet there was a reason Nintendo was willing to part with them. Remember, Rare was not an independent company - MS bought them from Nintendo.
Rare's output was dropping for years before the sale. In their last three years of development for Nintendo, they released five home console games: Donkey Kong 64, Perfect Dark, Jet Force Gemini, Conker's Bad Fur Day, and Starfox Adventures. Of those, only Perfect Dark could be called a legitimate hit. (DK64 sold well as a pack-in game, but it wasn't what you'd call a top quality game.)
A lot of people were pretty shocked at the price MS paid for them. This isn't just a 20/20 hindsight thing - many people said at the time that it was a dumb purchase. There were some hardcore hopefuls who thought otherwise, but this was not a purchase that was universally praised at the time.
And while this doesn't really apply to a studio like Bungie that's buying themselves, whenever one publisher is all too willing to dump a development studio onto another publisher, you have to ask yourself why. It's always a big red flag, and it seems obvious now that Nintendo knew something that MS didn't. Not about how to run Rare, but about how far Rare had really fallen.
Re:Xbox Losing Money? (Score:3, Insightful)
Considering three facts:
A. Microsoft has never given up on a flagship product line
B. They have more cash reserves then their competition
C. Their developer's network treats third party like gold
I don't think we will be seeing Microsoft leaving the market any time soon. We might be in denial, but at lease we are not delusional.
A. is not entirely true. They have discontinued unprofitable products [wikipedia.org]. The distinction "flagship" might be the dividing line. But strictly speaking they have discontinued products.
B. This does not translate into "willingness to use entire cash reserve to float product line". At some point their shareholders may demand results from that division. Thus far the division if 5 billion int he hole and only had a sprinkling of profitable quarters without any profitable years.
C. I think this is true but I am not a developer. They do tend to have good docs and run a good support infrastructure.
I doubt they will give up on the product line soon. The product line does add some intangible brand value to the MS brand. But at some future date the investors may demand they shift that intangible benefit to a more tangible one or demand they scuttle the ship.
Re:Xbox Losing Money? (Score:3, Insightful)
The reason this is interesting is because the console market is NOT like the PC market where "MS is in a singular place".
There is actual competition in the market, and exclusive titles (usually developed by in-house publishers), is one of the key differentiators between one console and another.
Nonsense (Score:2, Insightful)
Re:Xbox Losing Money? (Score:2, Insightful)
Re:Xbox Losing Money? (Score:3, Insightful)
And how is this demonstrative of good behavior?
Seriously, what you are describing is essentially the use of other companies' mojo, name, ability, image, etc. until said attribute was ascribed to MS, then let the used up company go "sink or swim" after taking their positive attributes for themselves. A "partner" relationship does not eliminate any risk of the studio/partner putting out poor product.
From what I've heard, this has been a long time coming, and both "sides" knew that.
Personally, I expect MS to somewhat alter their course on the XBox to more of a MS owned media PC type appliance. I don't think they really want to keep it as a games platform per se. Oh they still will, but I predict they will shift more toward non-game media with games as the "high point".
To an extent we may see this from all three players, but none as much as MS, with Sony second. Nintendo, to my knowledge doesn't make TVs, video players, audio receivers, etc.. MS clearly wants to run the home media space, and I believe the XBox group was essentially created as a long term plan to get there, with PC based media center stuff filling in the gap and "working out the main kinks".
If this is true, the regurgitation of gaming studios could represent a shift in the media direction, perhaps presaging more of an emphasis on the media center part of it.
Re:Xbox Losing Money? (Score:3, Insightful)
Investors tend to make you axe divisions which aren't making money, especially when your beating your competitor, and they are laughing the entire way to the bank! It's probably partially why Sony is pushing BR with the PS3. They want some good will from the media division so they can keep their attempts to screw with the industry going.