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Worldwide game revenues expected to reach $91.5 billion by the end of 2015

With the new generation consoles just starting to hit their stride, new VR technology being revealed and released, and markets around the world flourishing, the games marketing research team at Newzoo is anticipating massive revenue gains by the end of 2015.

America alone has leveled out at a steady $22~ billion but the industry is expecting to see massive gains in China, the Asian Pacific, and Latin America. China will now surpassed that of the American market with a $22.3 billion value after a 23% increase over the last year according to Newzoo’s most recent report. The exploding eSports scene and mobile platforms have been contributing significantly to this recent surge.

Tablets and smartphones especially have undergone significant growth with tablet games up 27% and phone games up 21%. Between the two platforms they take on a third of all industry value with $30 billion.

market numbers newzoo 2
PC gaming is still the dominant platform for video games today.

 

Despite all this success handheld consoles are still on the decline with a 17% projected loss. The fall of the Nintendo DS and the PSP are clearly evident, and it seems that it won’t be changing anytime soon especially with the new, greater convenience of smartphone games.

Though the overall success of the industry is fantastic as it currently stands, gamers and investors can expect even greater gains in 2016 and 2017. Virtual reality headsets are just beginning to expand and with Valve and Sony readying their new tech for the end of this year a new sub-industry will bring even more revenue in for the companies that get involved early.

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The Evolutionary history of video games: Impact on America

As an industry that has grossed roughly $20 billion on a yearly basis for almost the entirety of the last decade[1] video games have come a long way over its sixty-year-long lifespan and the impact it has on Western culture is still growing rapidly today. After having to hurdle obstacles and other impediments, the progression of video games, and the value of the medium as an art, has begun a steady incline after the leveling of a helter-skelter history where “gaming” was seen as near-detrimental to the quality of American society. The anti-video game allegations throughout the 1990s and early 2000s marked as a major transitioning phase — and by the start of the 2010s, a major milestone — as the video game medium struggled to find its place as a validated form of regular entertainment.

Ralph Baer, father of video games, unfortunately passed away in 2014.
Ralph Baer, father of video games, unfortunately passed away in 2014.

It’s important to consider how the exact inception of video games back in the 1960s impacted the way they would be viewed by the people that were privileged enough to be the first to experience the first manipulation of a television picture. That begins with Ralph Baer, and the primarily science-oriented audience that witnessed firsthand the first major pillar of video games that everything has spawned from.

Relative to what the majority of people envision when thinking of video games, Ralph Baer’s work is extremely simple. The interaction was so basic that many would not even recognize it as a video game upon the initial look at the display of the early 60s. To most the concept was an interesting niche, and that mindset stayed that way for quite some time.

Most had not considered what Baer’s work would entail half a century later.

The majority of people who did take the initial dive into the home console market did not consider the first home console to be a revolutionary technology. The 1966 Magnavox console’s “gameplay” encompassed one to three on-screen white boxes that could be maneuvered around screen. Those who wanted to play would overlay a transparent plastic screen in front of the television display that the console was connected to.

The Magnvox Odyssey was the first home-video game console
The Magnvox Odyssey was the first home-video game console

To most people it was little more than a glorified electronic board-game entertainment device, but Baer understood the potential for it to expand beyond that, and in the following years soon after the ball began to roll on the creation of gaming. The public was largely apathetic towards the up and coming technology.[2] The Odyssey was generally promoted as a fun learning device for kids, and was even considered a great tool for its educational purposes potential. The early advertisements promoted the home system as a “total play and learning experience for all ages.” However, it was the bonafide “geeks” of the time — especially in colleges and universities across North America — that had their interest piqued in seeing these ideas that Ralph Baer brought forth expanded upon.

While the 1960s may have been the catalyst for the industry to begin moving forward, the 1970s were truly the time where the American public began to slowly take a minor interest in the hobby. The quality of video games began to explode as the technological limitations were lifted[3] and the first popular game, Pong, was released. Made by Atari and more specifically attributed to Atari’s founder, Nolan Bushnell, Pong was the first game to bring structured multi-person gameplay that was easy to play, but challenging to master. This attitude helped video games flourish as those who played the game immediately looked to compete with whoever they played against.

atari 1
Pong was the result of a fortunate glitch while programming, that prevented each paddle from fully scrolling up and down.

Because of the refined structure in games, the general consensus towards them began to explode in popularity. In the late 1970s video games’ prevalence in arcades skyrocketed with kids and teenagers heading to them in droves with small communities surrounding each local arcade. This expansion of gaming from scientists and computer techs, to a much larger and younger demographic begins the first public support for gaming.

For a moment, it seemed that the support that the industry had gotten would be an immense blessing, but in reality it was a curse lurking underneath. The first and second generation of video games (1970-1977; 1977-1983) introduced some of the most iconic games of all time. Games like Pac-Man, Space Invaders, Frogger, and many more created immense buzz in the market on home consoles like the Atari 2600. Profits were exploding, but very soon the market became saturated just as the news media was beginning its first somewhat respectable coverage towards the medium.

Competition had grown fast between game publishers, and investors saw the video game business as an untapped gold-mine with everyone suddenly heading there at once.  Business executives in charge of publishing the games didn’t fully understand what creating a game required and simply demanded as many games to be released as they could get. These absurd demand requests hindered developers with stringent time schedules. Most game makers were no longer able to find the time to make something unique or interesting and instead recreated old games but with slightly different styles and concepts. After a short time of massive improvements with seemingly every game’s release being better than the last, consumers quickly noticed when the quality nose-dived and the entire industry was on the verge of total collapse.

Most major news-media outlets had concluded that the North American Video Game Crash of 1983 was the end of a fad[4]; the end of a simple phase in American culture. For a few years they were right. Outside of the local arcades, home video game consoles were on a dramatic decline, and representation of gaming was fittingly non-existent. However, in 1985 a relatively new Japanese company, Nintendo, had nearly single-handedly saved the entire industry and began a rebirth of video games in the United States.

One of the biggest keys to this rebirth was just a single game character that is now intrinsically integrated into the American consciousness — Mario.

Super Mario to the rescue? The character practically saved the industry in the mid 80s.
Super Mario to the rescue? The character practically saved the industry in the mid 80s.

With the Mario games came a true gaming “franchise.” Mario wasn’t just a great game with a fun narrative, unknown secrets, and colorful visuals though. Mario was a character. He had a background, a recognizable look, and a mission [5]. Nintendo’s creative director and game designer, Shigeru Miyamoto set the model for almost all future gaming franchises with these refined ideas for creating a long-standing game. The ability for gamers to identify with the game as the following of a character creates an endearment to the character. This leads to increased exposure in the media as such an identifiable character is more easily expressed and shared to those that had not yet even tried to play a video game. Games were seen as little more than entertaining ways for kids to waste time.

Games stayed as a this perceived campy form of entertainment for the following eight years after Mario’s release, but as a new graphical fidelity level is reached the realism that games shared with the real world became disconcerting to parents and led to one of the first major uproars against video games. Specifically, the game Doom (released in 1993) took the brunt of the attack against gaming. The gory visuals and graphic violence had many claiming children could be manipulated into becoming “mass murder” killing machines[6].  Though gaming continued to flourish throughout the 1990s with the release of the PlayStation and Nintendo 64, the controversial undertones associated with video games were extraordinarily prominent in most reports associated with the medium.

Though reporters, journalists, and other talking heads on major network news channel painted a negative picture, the public was still captivated by video games, computers, and the new consoles . Amid the chaos of the new violence-inducing reputation video games had, the game developers and artists kept moving forward and another crucial step in games becoming a greater resemblance of the games today became prominent.

Throughout the mid-late 1990s and the early 2000s games took on more in-depth stories that had gamers not only enjoying the game they were playing, but immersed in the universe associated with them. Games became a form of story telling, and the ability for game creators to convey meaningful messages grew exponentially over the 2000s decade. The start of contemporary game franchises began in the early 2000s with the releases of Halo: Combat Evolved, Call of Duty, Grand Theft Auto III, and the continuation of the Metal Gear series. These games all followed the same formula that Nintendo promoted in the mid 1980s with a recognizable character for players to identify with[7].

While the gaming community was still under represented in the media the sub-communities that expanded with the increased popularity of multiplayer gaming, created the feel of something greater with each person defending the console of their choice over the others and rivalries spawning between game developers and publishers again like they did during the early 1980s. However, this time the industry had learned from the past mistakes and the competition promoted rapidly improving game quality.

Grand Theft Auto V offers a massive detailed world that makes both business partners and consumers alike happy.
Grand Theft Auto V offers a massive detailed world that makes both business partners and consumers alike happy.

By the end of the decade video games were considered commonplace and normal in society. The media’s perception, while still sometimes skewed, now showcases games as beneficial to society[8] and a vital asset to American culture. Business-wise, investors show a respect towards the critical consumer audience that follows the industry, and those business decisions have been rewarded.

From 2010-2015 American games have outsold the entirety of the film industry, and more impressively in 2013 one single game (Grand Theft Auto V) outsold the entire music industry of that year. The sheer prominence and rapid growth of video games, and the American culture’s infatuation with gaming had outlasted the negative claims throughout its history. From the beginnings as an interesting “toy” in the 1970s, to the dubbing as a fad in the 1980s, to the allegations of a danger to society in the 1990s;

the American culture’s perpetuance of games has helped the medium reach a more prestigious term of endearment — “art form.”

References

Note from the writer: If you like this article and want to see more like it make sure to follow Pixelpine on twitter and like us on facebook. Thanks!

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Onlive cloud gaming serviceshut down after acquisition by Sony

Onlive was one of the most ambitious concepts in gaming when it released five years ago on PC as it allowed low quality hardware to play top notch games. Though the platform attempted to continue its expansion through mobile devices the company’s aspirations never came to fruition and the service has announced it will be coming to its end on April 30, 2015.

Sony will be buying the cloud-computing pioneer and the 140 patents associated with them as they informed those at the company that “their plans don’t include a continuation of the game service in its current form.”

Onlive gave players a solid library of games to choose from and play, but the most significant difference between it and any other gaming platform was players’ ability to run high quality and newly released games on old hardware with their cloud-computing technology that predated much of what the major gaming juggernauts like Microsoft and Sony are interested in pursuing today.

Unfortunately, Onlive occasionally ran into stuttering gameplay and though the idea was fantastic, the quality of the service never quite made the next “jump” to reach wide-spread popularity. The marketing failures and the inconsistent quality had Onlive struggling for most of its lifespan.

Those who were actively playing through the platform are now facing some harsh realities as all saved data, and games will no longer be available by the end of the month. Those who purchased the Onlive home consoles will not be afforded refunds unless the purchase was made after February 1, 2015. The support team at Onlive is also noted as being “extremely limited” over the course of its final days.

One service related to Onlive that will continue on is the Cloudlift subscription service that works with Steam to stream games to any device in a similar manner to how Onlive’s Games service operated. This will be the only tangible gaming related aspect of the company to live on.

Despite Onlive’s failures in the gaming industry they will certainly be remembered in history as the first service of its kind and will perhaps be an influential factor going forward in Sony’s work with their other cloud-computing project — Gaikai.

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Sony teams with Spotify to create Playstation Music

Spotify and Sony have announced today a new partnership and service coming soon to PS4, PS3, and Xperia devices — Playstation Music.

This new service is expected to function more or less the same as Spotify currently works, but some minor tweaks and changes make the service work smoothly with the consoles.

The new service adds some well-appreciated features such as the ability to play your own favorite music in the background as you play (only on PS4) — similar to how it has operated since the USB background music update from back in October.

No definitive date was set for the release, but Spring 2015 is when gamers from the 41 markets it will be available in can expect it to start popping up on the specified platforms.

Playstation Music will be coming to PS4, PS3, and Xperia devices, but there is still no word on when the PS Vita will be getting the service — if at all.

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PSN issues 5 free days of service; Network attacker arrested in UK

In a holiday “thank you” from Sony’s PlayStation division, the gaming juggernaut is offering an additional 5 days of their online service for gamers’ patience during the holiday overload.

On top of the automatically applied extension, Sony will also be handing out a 10% discount code to all PSN members for any purchase on the PlayStation Store.

As Sony is looking for retribution, an alleged member of the hacker/digital attack group behind inhibiting these servers has been arrested. The 22 year old man was arrested by a UK Organized Crime Unit which also confiscated multiple devices including phones, laptops, computer USBs, and ironically an Xbox One. (report by The Daily Dot)

The man was released on bail on Tuesday with only alleged charges of fraud by false representation and Computer Misuse Act offences.

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PSN Update: PSN services return

PSN back online

After three days in the dark, PSN has finally returned to the light of day across all devices in PS4, PS3 and Vita.

Last night, I reported that I was able to access all PSN services on both PS4 and PS3 around 10 pm.

Shortly thereafter, Catherine Jensen, vice president of SCEA Consumer Experience, posted a second statement on the Playstation Blog informing Playstation users the network is back up and running.

The Playstation support page is also showing the PSN status as green, but “Some latency may be experienced due to high volume.”

Screen Shot 2014-12-28 at 2.00.39 PM

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UPDATES: Sony releases statement on PSN and Xbox Live issues; PSN service slowly recovering

Update: 10:00 pm Saturday

I am now able to sign into PSN on my PS4 as well as my PS3. So I recommend all PSN users to try signing on and if problems persist, keep checking the @AskPlaystation page on Twitter for official updates.

Update: 5:00 pm Saturday

After three days in the dark from a DDOS hacker attack, Sony has issued a statement on the takedown of their online network. Many Playstation Network and Xbox Live users are still experiencing connectivity and functionality issues.

Catherine Jensen, vice president of Sony Computer Entertainment America (SCEA) Consumer Experience, offered the following statement at 12 pm ET:

“The video game industry has been experiencing high levels of traffic designed to disrupt connectivity and online gameplay. Multiple networks, including PSN, have been affected over the last 48 hours. PSN engineers are working hard to restore full network access and online gameplay as quickly as possible.

From time to time there may be disruptions in service due to surges in traffic, but our engineers will be working to restore service as quickly as possible.

If you received a PlayStation console over the holidays and have been unable to log onto the network, know that this problem is temporary and is not caused by your game console. We’ll continue to keep you posted on Twitter at @AskPlayStation and we’ll update this post once the problems subside.

Thanks again for your patience.”

Early Friday morning, the @AskPlaystation page on Twitter had reported that PS3, PS4 and Vita services were “gradually coming back online” but that report proved futile as the day progressed.

 

Xbox Live is back online since late Thursday and has finally returned to normal status on the Xbox Live Service page.

The XBL Service Status page is showing core services and social/gaming up and running smoothly as of 6:30 pm ET Saturday.
The XBL Service Status page is showing core services and social/gaming up and running smoothly as of 6:30 pm ET Saturday

Meanwhile, I can say that my Playstation 3 is working with some services working better than others. Sign-in on my PS3 is working fine and I can access all apps (Netflix, Amazon Instant Video, IGN, etc.), as well as the Playstation Store. But online multiplayer, although functional, is a bit sluggish.

On the other hand, I am still unable to sign into PSN on my PS4.

Stay tuned to Pixelpine for further updates. Playstation owners keep checking the @AskPlaystation page on Twitter for updates.

Friday, Dec. 27 9 pm ET

After a frustrating Christmas for gamers that saw the shutdowns of PSN AND Xbox Live, Xbox owners saw a little bit of relief as the core services for Xbox Live were restored but are still limited due to the amount of users trying to access the servers. Meanwhile, Playstation’s support page on Twitter offered a somewhat dismal message to its followers, stating there is “no ETA” for when services will be back up and running.

Lizard Squad, the presumed hacker group that claimed credit for the attacks, tweeted out around noon Friday that the attacks were over:

Since then, both Microsoft and Playstation have been working effortlessly (or so they say) to fix the issues plaguing their respective networks. Both companies took to Twitter to inform console owners of their progress.

PSN and Xbox Live responses?

Although both companies have acknowledged the vast complaints and problems that have been reported, neither company has verified the culprit behind the attack. This may be that they are still unsure (not likely) or that they do not wish to concede that they have suffered another cyber attack. Xbox Live was supposedly taken down earlier this month by the same hacker group using denial-of-service attacks.

Many questions on the minds of gamers that have not been able to play their newest games is, why? And the indirect answer from Lizard Squad: denote the incompetence and injustice of Sony and Microsoft’s programming.

This type of statement from the hacker group seems to be defending their actions as righteous and intended to teach the corporations a lesson. But at the same time, the cyber-vigilanteism is also harming millions of innocent users that just like to play games.

Stay tuned to Pixelpine for more updates.

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PSN and Xbox Live receive hacker attacks and outages for Christmas

More repercussions for Sony; Microsoft along for the ride

Around 3:00 pm on Wednesday, Playstation and Microsoft users began experiencing problems accessing their respective online services, Playstation Network and Xbox Live. Log-in and content purchasing problems and online multiplayer issues were among the most complaints on the PSN and Xbox Live outages.

Lizard Squad, an anonymous hacker group that has previously attacked PSN back in August and earlier this month, has laid claims to this Christmas gift on Twitter:

The hacker squad tweeted out prior to the initial attacks that they were preparing for something big:

After Sony Pictures Entertainment was attacked last month for its controversial upcoming picture The Interview, which centers around the assassination of North Korea leader Kim Jong-Un, Lizard Squad promised another “Christmas gift” if the company released the movie.

After an initial delay, Sony began distributing the movie Thursday in a little over 300 theaters across the United States, and managed to pull in $1.04 million. The movie is also available online.

Xbox Live, which began offering The Interview on demand, was targeted by the hacker group as well. Lizard Squad offered a hint on Twitter on Wednesday of the impending trouble:

On Thursday, reports were flooding the support pages of both Xbox and Playstation for answers as both were experiencing problems. And once again, Lizard Squad had a bit of fun mocking gamers who were attempting to access the PSN and Xbox Live networks on Xbox One and PS4.

Stay tuned to Pixelpine for updates.

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Nintendo confirms work has begun on their next console

Though the existant of such projections is virtually ineveitable, Shigeru Miyamoto has confirmed that preliminary designs are underway for their next console as they continue to maintain the Wii U with updates.

“Nintendo as a whole has groups working on ideas for new hardware systems. While we’re busy working on software for the Wii U, we have production lines that are working on ideas for what the next system might be.” – Shigeru Miyamoto interview with Associated Press

With Nintendo looking toward their second consecutive prosperous year in 2015, its likely that the gaming juggernaut will be keying their resources on projects even further in the future. As the new Microsoft and Sony consoles look to enjoy a life-span even longer than that of the previous gen consoles, Nintendo is stuck a zone where they aren’t competing with the likes of those competitive launches.

Without any significant pressure to deliver within a strict time frame, we could see Nintendo continue their trend of progressive technology implementation with a VR set given the popularity of such tech right now.

Nothing is confirmed at this point, but speculation is free to arise for how Nintendo moves on from the Wii U.

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Xbox One price cut to $350 | Will the PS4 match the cut?

The white Xbox One bundled with Sunset Overdrive is one of the options available for the $350 price tag.
The white Xbox One bundled with Sunset Overdrive is one of the options available for the $350 price tag.

Xbox One drops $50 on select bundles for a limited time this holiday season.

Xbox One to $350, Microsoft’s ability to stay competitive with the PS4 has shown positive results for the company and its investors, and the recent price cut bodes well even more so for the console, but will Sony look to respond this holiday season or beyond?

Microsoft quickly realized who got the better jump on the market upon both consoles’ release in late 2013. Throughout 2014 we’ve seen great value bundles, a kinect-less console, and consistent updates to try and entice more gamers to go with the Xbox One — and it’s worked. Some incredible deals can be found for the Xbox One and, while Sony does have a few options and deals available, the PS4 has not quite been able to match that of its competitors.

The Playstation-Destiny bundle sold admirably, will Sony add more bundles to their console selection.
Sony has been controlling the new generation gaming market so far, but what can they do to continue that?

Sony has remained steadfast, and their console has been receiving less rapid updates relative to the Xbox One, and has mostly the same core features that it had presented from the start.

The PS4’s last update gave it some significant upgrades — most notably the “share play” addition, but in order for Sony to continue their majority control in the market — especially in North America — gamers will need to see some more purchase options and faster updates for the console.

If Microsoft stays on track with its sales it should be surprising to no one if Sony elects to slash prices and offer some new bundles featuring their best exclusives as well.