NPD Retail September 2014: Hardware In High Gear

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The pattern is repeating itself once again, but this time the numbers are bigger: In North American retail stores, console sales rose by 136% (from $183.4 million to $432.7 million), but software sales sank by 36 percent (from $754 million down to $481.2 million this year). Granted, September 2013 was an exceptional month when you think about the massive sales of Grand Theft Auto V, so it’s logical that September 2014 would suffer by comparison. Still, it’s worth remembering that there’s not much profit in those game console sales, and the real profits come from the software sales.

The information that Wedbush Securities analyst Michael Pachter provided earlier in the week, that Microsoft beat out Sony in terms of console sales, turned out not to be true, at least according to Sony.

“PlayStation led the month for next generation software, including selling the most copies of Madden NFL 15, NHL 15, and FIFA 15,” Sony Computer Entertainment America brand boss Guy Longworth said. “Thanks to the support from fans and the overwhelming popularity of the limited-edition Destiny PS4 bundle, PlayStation 4 won the month of September, with PS4 nearly tripling its August sales,” said Longworth. Estimates are that the PS4 sold close to 550,000 units in September.

That’s good news for Sony, which likely has Microsoft gritting its collective teeth and vowing to try harder. Still, the news is good for hardware manufacturers all around. “Since February 2014, monthly sales across hardware, software, and accessories have increased each month versus the prior 2013 monthly sales,” said NPD’s Liam Callahan. Year-to-date sales of hardware, software and accessories are up 7 percent vs. the same time period last year (January – September).”

The rise in hardware sales was given some detail by NPD, while of course staying away from precise numbers. “Hardware growth of 136 percent vs. September 2013 is the highest growth rate seen this year and, as seen in previous months, was driven by new console hardware sales of PS4 and Xbox One,” noted Callahan. “Console hardware, specifically, was up over 200 percent versus September 2013.”

The hardware sales were primarily that of the latest consoles. “Eighth generation console hardware represented over 85 percent of overall hardware sales in September, which is the highest percentage seen in a single month since the PS4 and Xbox One launched in November 2013,” Callahan pointed out. Which merely points part of the major decline in software – with fewer people buying or playing older consoles, games which had once been reliable sellers are slowing down.

Still, when it comes to the software, Callahan tried to sugarcoat the bad news. “It is important to note that September 2013 was the best performing September on record for new physical video game software sales, driven by the launch of Grand Theft Auto V, therefore making for difficult comparisons for this September to last;” Callahan said. Sure, but publishers are still unhappy with the way last-generation software sales have slowed, and that the new crop of consoles isn’t creating a software boom yet to go with the impressive hardware sales.

The biggest event in software for the month was clearly the launch of Destiny, even though the critics and fans have been somewhat disappointed so far given the reviews. “The launch of Activision-published and Bungie-developed Destiny in September 2014 proved successful in a number of ways,” said Callahan. “Year-to-date through September data it is the top-selling video game on a unit basis, making it the most successful launch of the year so far as well. But an even more prestigious feat was the fact that Destiny had the best launch month of all-time for any new IP in video game software.” Of course, the sell-in was not coupled with an equally impressive sell-through. But Bungie is hard at work rolling out changes to the game along with more content, and the game should be getting better from hear. How Destiny responds sales-wise over time is another question, and it will be interesting to see how the product fares on the bes-seller lists over the next few months.

Callahan provided a more detailed comparison of last year’s sales versus this years. “Demonstrating the size of Grand Theft Auto V’s success last year, the total units across the top 10 games this September totaled only 59 percent of the top 10 games last year,” Callahan noted. “Interestingly, when taking out Grand Theft Auto V and Destiny, sales increased when looking at top 2 through 9 games only. This is an indication that sales decline this year were rooted in a poor comparison to last September’s behemoth, Grand Theft Auto V.”

Callahan also noted one particular PC title had a good month:“The launch of EA’s Sims 4 ranked ninth across new physical game sales and helped improve physical PC Game sales by over 40 percent over last September.” And, throwing a bone to Nintendo, Callahan tried to say the best he could about one of the company’s key titles: “Hyrule Warriors would make the top ten software list when ranked on an SKU basis, and ranked number 11 when ranking by top titles.” Yes, but we can also see that Nintendo is having a hard time cracking the top ten without stronger Wii U sales, though Super Smash Bros. for the 3DS handily made the #4 position.

The Accessories category also fared well in September, driven no doubt by strong console sales. “Video Game Accessory growth rate of 33 percent in September 2014 was the largest year-over-year growth so far in 2014, and was driven by strong double-digit increases across four accessory types: Point & Subscription Cards, Gamepads, Headsets/Headphones, and Power Supplies,” said Callahan.

September 2014 Top 10 Games (New Physical Retail)
1. Destiny (XBO, PS4, 360, PS3)** Activision Blizzard
2. Madden NFL 15 (360, PS4, PS3, XBO)** Electronic Arts
3. FIFA 15 (PS4, 360, PS3, XBO, Wii, PSV, 3DS)** Electronic Arts
4. Super Smash Bros. (3DS) Nintendo
5. Middle Earth: Shadow Of Mordor (PS4, XBO, PC) Warner Bros. Interactive
6. NHL 15 (PS4, XBO, 360, PS3)** Electronic Arts
7. Minecraft (360, PS3) Microsoft / Sony
8. The Sims 4 (PC)** Electronic Arts
9. Disney Infinity 2.0 (360, PS3, NWU, PS4, XBO)** Disney Interactive Studios
10. Diablo III: Reaper of Souls (PS4, 360, PS3, XBO, PC)** Activision Blizzard
**(includes CE, GOTY editions, bundles, etc. but not those bundled with hardware)

Apple Introduces Slew Of New Devices

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When it comes to getting products ready for a holiday push, Apple is set to deliver. The company hosted a showcase this morning, highlighting a number of products that are available sooner than expected, with some already in stores and others ready to ship out by week’s end.

Leading the charge are a pair of new iPads, including the iPad Air 2 and the iPad Mini 3. Featuring an extended battery life, a less reflective surface for outdoor use (56 percent less), the ABX chip technology that powers the iPhone 6 models and a new 8-megapixel iSight camera that supports slow motion filming and 1080p, they’re sure to be hot items for the holidays.

The iPad Air 2 will retail for anywhere from $499 to $699 depending on size (from 16GB to 128GB, respectively), while the iPad Mini 3 will be $399-$599, ranging from 16GB to 128GB. Pre-orders will be taken tomorrow on Apple’s website, and shipped out shortly thereafter.

Apple also announced a new iMac computer with a 27″ 5K Retina display, putting it in comparison to the current MacBook model. It’s also a bit slimmer when it comes to general size, but packs a punch with a 3.5GHz Intel i5 processor and a 1TB drive. The unit is available now for $2,500.

Last but not least, a new model of the Mac Mini has been introduced. The device, which is compact on the same level as the Apple TV unit, includes a 4th-gen Intel CPU, along with Intel Iris 5000 graphics, flash storage and Wi-Fi support, as well as two Thunderbolt 2 ports. This handy little unit is available for purchase now through select retailers, and sells for $500.

It’s nice to see Apple get a jump on the holiday market, and it leaves some wondering just what the competition will do to keep up. Could we see new Samsung devices, or perhaps other companies step up their game Only time will tell.

Google’s Set-Top Box Entry: Nexus

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Not content with letting its Chromecast device have all the fun with streaming services, Google has introduced a new set-top box model that could give the likes of Apple TV and Amazon Fire TV a run for their money.

The Nexus Player enables users to utilize a number of streaming services, as well as play original and Android games, as well as other mobile apps in that format. The device, a compact, circular unit that’s easy to hook up, comes with an equally small navigational remote, and will sell for $99. An additional gaming controller will also be available for $39. The box also includes Chromecast functionality for streaming video from other devices.

Nexus will enable compatibility with Android TV, and also works with a number of devices to broadcast directly to your television. The device will support the likes of Netflix, Hulu, Food Network, Travel Channel and more, although “heavy hitters” like ESPN and HBO Go haven’t confirmed their compatibility just yet, according to Engadget.

The device features a 1.8GHz quad-core Intel Atom processor, along with 1GB RAM, 8GB of storage and Imagination PowerVR Series 6 graphics, which will enable “console-like graphics” in terms of performance, along with fully-powered 1080p video streaming.

 

Teaser Campaigns Return On Social Media

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The idea of a “teaser” is nothing new with advertising, as most companies, like movie studios, tend to offer some form of “tease” with a forthcoming product or project to entice viewers. However, most recently, the band Coldplay decided to take the idea of a “teaser” to the next level, effectively using Twitter to allow fans to play along.

Back in May, the musical group promoted its newest album Ghost Stories by hiding lyrics for new songs in libraries located across nine different countries. In short, it was along the lines of an “international scavenger hunt,” according to Clickz.

Ironically enough, the lyrics were found by fans in books that contained actual ghost stories. And one was lucky enough to be treated to a ticket to see the band live during a London performance.

So where did Twitter fill in to all this Along with providing the initial clues on its official Twitter page it also enabled users to follow along with progress on the search for lyrics using a hashtag, #lyricshunt.

As a result, the campaign has drawn a “significant new follower growth” for the group, and also effectively reintroduced the idea of a teaser campaign to the social media front, where a new audience can be more receptive to it.

Another effective use of Twitter with a “teaser campaign” came from director Colin Trevorrow, who tweeted teaser images from the forthcoming sequel Jurassic World, which is expected to open next summer. Such images included a leaf-covered road sign from the park, as well as a tribute statue to Dr. Hammond, which was timely following the passing of the actor who played him, Sir Richard Attenborough, earlier this year.

Other companies are dabbling in “teaser campaigns” through social media, and as a result, more and more attention is coming from fans. Don’t be surprised to see it used more often, especially with bigger and better products on the rise in 2015.

Netflix Kids Shows Have High Viewership

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Netflix is a highly popular service when it comes to adult audiences – but now it appears to be a huge hit with the kids as well.

GigaOm is reporting that 75 of the kids-based shows being featured on the service have managed to generate more than two million viewers in the U.S. for 2014, with more than a dozen kids titles going even further with five million viewers, according to information from a letter addressed to investors.

The news follows Netflix’s push to get a younger audience with the relaunch of the Popples animated series, in a partnership with Saban Brands, as well as additional episodes of Winx Club and a forthcoming CGI film and TV series that will focus on the origins of the iconic gorilla King Kong. Dreamworks Interactive is also a huge partner with the channel, and will launch series based on Veggie Tales and Madagascar’s King Julien later in the year.

Despite the push in kids’ programming and original programs, as well as syndicated ones making the rounds (including Friends, which will debut early next year), Netflix recently did take a ding in business. A slower-than-expected growth in viewership has forced some investors to trade some of their shares after hours, resulting in a stock drop of approximately 26 percent.

Still, the company is confident that things will bounce back, and not just based on the power of kids’ programming. Original shows should be a monumental part of the service in 2015, and it will also launch its first direct-to-Netflix movie, a sequel to Crouching Tiger, Hidden Dragon, in August of that year.

Will that be enough to topple the competition – especially with HBO Go recently announcing that it would launch its own streaming service Only time will tell. For the time being, though, viewers of all ages – yes, including kids – can certainly enjoy what Netflix has to offer.

CBS Launching On-Demand Subscription Service

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A lot of companies are taking gambles on subscription-based services for mobile devices and desktop use, including, most recently, HBO. However, it appears that an unlikely new player is entering the game as well – the broadcast station CBS.

According to Recode.net, the broadcaster announced its plans to offer a new subscription service that will enable viewers to watch almost any show in its collective, either live as it broadcasts or on demand. The service, CBS All Access, is available for purchase now.

The service won’t require any sort of previous cable subscription. Users can simply pay $6 a month and view whatever programs they wish, from NCIS to The Big Bang Theory, using a number of devices.

This is an interesting move, especially considering that most of CBS’ broadcasting services are available without cost. In addition, viewers can go over and watch most recent episodes on CBS.com without having to endure any additional fees.

There are also certain programs that are being left out, particularly the highly popular National Football League games. There isn’t anything in CBS’ contract with the league that allows it to broadcast games simultaneously on its application.

The service is also only available in certain markets, mainly the 14 cities where CBS owns its local networks completely. These include New York City, Chicago and Los Angeles.

CBS CEO Les Moonves doesn’t consider this “a shot across the bow” to cable subscribers, but rather a separate service for those looking for easier access to the network’s popular programs.

Plus, it could also open up the opportunity for Moonves’ Showtime network to offer a similar service. “We’re talking about it,” he said. “We’re obviously getting the technical capabilities ready.”

It’s going to be a matter of time before analysts see if CBS can be as successful with streaming services as it is with network services. The lower cost helps, but the limitations of certain programming and markets leave it up in the air when it comes to availability. And hey, some folks just might want to turn on the TV.

U by Kotex Inks Brand/Producer Deal For Smokebomb’s Transmedia Series ‘Carmilla’

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By Sahil Patel

Feminine-care brand U by Kotex is executive producing a transmedia series from digital agency Shift2 and digital studio Smokebomb Entertainment based on “Carmilla,” the classic gothic vampire novella by Joseph Sheridan Le Fanu.

The series, also called “Carmilla,” soft-launched in late August, with a target of 36, four-minute episodes. Currently, two new episodes of the show air every week on Canadian teen magazine Vervegirl’s YouTube channel . The video content is accompanied by Twitter and Tumblr accounts that continue and expand on the story.

Based on Le Fanu’s novel from 1872, the “Carmilla” online series tells the story of a Laura, young woman — three weeks into her first semester at college — whose roommate mysteriously disappears after a party. Laura soon launches an investigation into the disappearance, for things to only be complicated by the arrival of a mysterious stranger, Carmilla, who claims to be Laura’s new roommate. (Long story short: Carmilla’s a vampire.)

Since launch, “Carmilla” has accumulated 1.2 million views on YouTube, with 3.3 million minutes watched, according to Smokebomb. The audience skews heavily toward females, who account for 91% of viewership.

So it’s no surprise, then, that U by Kotex, which is owned by Kimberly-Clark, would get involved. As part of the brand deal, U by Kotex’s “Save the Undies” campaign has been integrated into the series’ vlog-style videos. For instance, in one particular episode, the two lead characters debate the “age-old question” of whether vampires get periods {link no longer active}.

“Carmilla” is produced by Smokebomb’s Steph Ouaknine and Jay Bennett, and executive produced by U by Kotex and brand agency Geometry Global. Smokebomb’s Jordan Hill co-created and writes for the series.

Shaftesbury Sales Company, the distribution division of Smokebomb and Shift2 co-venture partner Shaftesbury, is in discussions with third-party distributors, the companies said. The series was showcased to buyers at MIPCOM in France earlier this week.

This article was originally posted on VideoInk and is reposted on [a]listdaily via a partnership with the news publication, which is the online video industry’s go-to source for breaking news, features, and industry analysis. Follow VideoInk on Twitter @VideoInkNews, or subscribe via thevideoink.com for the latest news and stories, delivered right to your inbox.

SuperData September 2014 Report: Digital’s Strong Growth

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Analysis from SuperData CEO, Joost van Dreunen, follows:

  • Kim Kardashian: Hollywood earns $51 million in four months.
  • Upcoming expansion adds 600,000 to World of Warcraft user base.
  • Activision asserts dominance as digital console totals $82 million.
  • Rovio layoffs signify maturing mobile games market, totaling $297 million.

Total spending on digital games came in at $873 million in September, up 8.6 percent compared to the same month a year ago. After a slowdown during the summer months, consumer spending is picking up momentum as we close in on the holiday season. Most notably, social gaming revenues were up month-over-month, and mobile gaming is approaching $300 million in monthly spending in the United States. Activision’s dominance across digital platforms was palpable this month, as several of its key titles produced surprising results, driving digital console revenues to $82 million in September, and offsetting recent criticism.

Celebrity branding the next frontier for mobile games
After its success with Kim Kardashian: Hollywood, which has generated a cumulative $51 million in revenues since its launch in June, Glu Mobile announced it is expanding the title to Facebook. Hoping to maximize its appeal to a female gamer demographic, the company also extended its licensing agreement, including Ms. Kardashian West’s continued support in promoting the game via both social media channels and real-life appearances. The title’s success is expected to trigger a run on celebrity-based mobile and social games. So far, publishers like Zynga have been aggressively licensing slots games that feature well-known television series and films, like Sex and the City and Terminator. Instead of this blanketed approach, however, a targeted strategy and support of a single celebrity is proving highly effective. As the mobile games market begins to saturate, marketing costs have increased. Celebrities play an increasingly important role both in terms of driving marketing and monetization for mobile games, and we expect more celebrities to lend their name and social media prowess to mobile titles in the foreseeable future.

World of Warcraft user base grows ahead of November expansion
Combined with the official cancellation of the long-awaited Titan, which was expected to ascend to the MMO throne once World of Warcraft reached obscurity, Activision has been under pressure to release a next generation role-playing title. In anticipation of its fifth expansion, Warlords of Draenor, the publisher reported a 600,000 increase in its subscriber base, which is expected to reach 8.2 million by the end of the year. Meanwhile, the publisher is gearing up for the imminent release of Heroes of the Storm, challenging the current dominance of League of Legends (Riot Games/Tencent) and Dota2 (Valve) in the MOBA space.

Digital console surges to $82 million following major releases
Two major releases dominated September’s digital console charts. Activision’s highly anticipated new sci-fi space shooter Destiny was initially met with enthusiasm by consumers. However, player sentiment soured in response to repetitive gameplay, casting doubt on the title’s ability to reach its lofty goal of becoming the company’s next billion dollar franchise. Meanwhile, rival Electronic Arts showed its strength in the sports category with the launch of FIFA 15, becoming the second best-selling title on digital console in September. Finally, after the dust settled following Microsoft’s decision to acquire Mojang, the developer’s cult-title Minecraft still claimed the number three spot on digital console, indicating that the change in management did not negatively affect its popularity.

Rovio layoffs signify maturing mobile games market
With an enviable 200 million active players, Angry Birds is still going strong. But the game has seen a 24% drop since its peak in 2012. Despite this, Rovio managed to keep year-over-year revenues roughly the same, with $192 million in 2012 and $197 million in 2013. We’ve seen similar trends before with companies like Zynga, where revenues initially stay at the same level even as its user base declines, because the non-payers generally are the first ones to cycle out and move on. Over the past two years, the mobile games market has also seen the emergence and dominance of several new mobile game companies, most notably Supercell. By comparison, Supercell manages to generate $892 million in 2013 with a total staff of 132, compared to Rovio’s $197 million with a headcount of 800. Suffice to say that Rovio, while at first the undisputed king of the mobile games market, no longer can claim this position.

[a]listdaily Analysis

The rise in digital games comes in contrast to the continued weakness of retail packaged games, and it’s not a coincidence. Not only are some of the physical retail sales going directly to digital, but increasingly the innovative, interesting and popular titles are coming out in digital form. It’s hard to imagine Kim Kardashian: Hollywood doing a good business on consoles or PC, though it should do well on Facebook. The title’s huge popularity shows there’s a largely untapped market for games made addressable by the increasingly widespread popularity of smart devices. Licenses are a great way to reach these blue oceans of new game players, but the success of Kim Kardashian: Hollywood will be hard to duplicate. Other celebrities may have large fan bases, but the nature of their fans may not connect so well to the nature of the gameplay as it has in this case.

Activision is seeing some good signs with the rising popularity of Blizzard properties, but there’s still plenty of work to be done with Destiny to make it into the property that Activision is really looking to create. Still, regular releases and patches for Destiny shows that Bungie isn’t sitting on its hands by any means. The game will no doubt be a substantially different (and hopefully better) game is six month’s time, and in a year the differences will likely be amazing. Of greater concern is the continuing erosion of Call of Duty, or at least the lower sales that each successive title has garnered in the last few years, despite Activision throwing some of its best studios at the task, and plenty of marketing dollars. Hopefully Call of Duty Online in China can provide a strong new market for the franchise.

Rovio’s retrenchment is inevitable, given that its expansion hasn’t led to a corresponding expansion in the number of hit games it produces. Making a hit game is hard, and making more than one puts you into legendary status. Still, as long as Rovio can keep its costs in line with its revenue, it should be a sustainable business for a long time — but certainly not the competitor to Disney it once boasted of aspiring to become.

Sony Drafts eSports League

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Competitive gaming in the form of eSports is gorwing rapidly, with millions of dollars up for grabs in hosted tournaments for such games as Call of Duty, DOTA 2 and League of Legends. With that, more and more sponsored teams are taking part in said competition, with big names stepping up to highlight the best and the brightest game players. As of today, you can add Sony to the list.

According to a story from GamesIndustry International, the company behind the popular PlayStation 4 console (and a number of its first party releases, such as Bloodborne and The Order: 1886) have announced that it has launched its own eSports league, with the La Liga Oficial PlayStation crew set to debut in Spain tomorrow. The team will take part in a variety of tournaments, including ones based on such games as Battlefield 4, Call of Duty: Ghosts, NBA 2K15, DriveClub and other titles.

This week will mark the debut for the league, which will continue its run over the next three months with a number of tournaments featuring individual players, along with team play for certain events. However, it will remain open for both casual and hardcore players, as Sony plans to allow openings for those who are currently PlayStation Plus subscribers.

This marks an interesting move for the League, but also provides players the opportunity to showcase their skills against others to see what they can do within the League. However, Sony didn’t comment on what it would be doing past 2015, although, as previous promotions like the Gran Turismo Academy has proven, there’s always room for expansion.

Sony has confirmed, though, that its outreach won’t just be in Spain, as it will be available to Portugal and Italy over the next few months as well. It appears to be gaining a huge buzz thus far, as Sony stated that it has the support of various publishers when it comes to league activities, although, again, specific names weren’t mentioned.

Here’s hoping the league is a success – and prompts others to give competitive gaming a try.

‘World of Warcraft’ Subscriptions Pick Up

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For a while there, some concerns had arisen regarding World of Warcraft‘s user base, as Activision Blizzard were wondering about some drop-offs in terms of monthly subscribers. However, those fears seemed to have quelled, as recent reports indicate they’re back on the rise, mainly due to the excitement of a forthcoming expansion, according to GamesIndustry International.

600,00 payers have since come back to Warcraft‘s services in anticipation of the Warlords of Draenor expansion, which is due for release on November 13th. That brings the user base back up to 7.4 million, a number which will continue to increase in the weeks ahead, per information from the company.

As part of a gift to keep people from dropping off the service, Activision Blizzard will offer previously released expansions, including Mists of Pandaria, free of charge. This will no doubt help the service stay on the up-and-up, rather than suffering a drop-off, as it did back in June with a loss of 800,000 subscribers.

Wedbush analyst Michael Pachter also believes that the subscriber base will continue to increase. The rise of 600,000 users came earlier than expected, according to him, and the number could get as high as 7.7 million by the end of the year. That could make World of Warcraft more popular than it’s ever been – which will no doubt be good news for the publisher.

All that’s left to wonder is what Activision Blizzard has planned for 2015. It takes its time between expansions – there’s a two year gap between Mists of Pandaria and Warlords of Draenor – but events like the forthcoming BlizzCon, along with in-game promotions, have a way of keeping an audience around. Plus, there’s always room for another expansion should demand call for it, which would be good news for fans and the publisher alike.

If you want to see Warlords of Draenor in action, check out the nice cinematic trailer below.