#126: Loss leader

As I expect you are all aware, either because you are living it or merely laughing at it from afar, the UK has a bit of a leadership problem at the moment. In the peak of the pandemic, while the nation was under one of its 65 lockdowns (subs please check), a culture of drinking, partying and generally ignoring the rules took hold in the UK’s seat of power. The police have investigated, and there is now no address in the country to have been served with more fines for violating lockdown regulations than 10 Downing Street. It says a lot about us as a country, I think, that the thing that finally threatens to bring the government to its knees is not its world-losing handling of the pandemic, the self-inflicted wounds of Brexit or the worst cost-of-living crisis since the war, but righteous fury at the fact that some people were having piss-ups when the rest of us weren’t allowed to. That is just Britain to a tee, really.

Anyway! Central to the opposition’s argument in all this is that regardless of whether he knew what was going on, it all went down on the prime minister’s watch, and under his leadership — and the can, therefore, is very much his to carry. And given that the PM has lived most of his life believing rules to be for the little people, it does seem to fit, does it not? Cultures are, after all, set from the top. This is particularly true in politics, but it applies to business in general as well. We’re even (segue klaxon!) seeing proof of it in our famously sober little corner of the world this week, amid the ongoing fallout from Sony’s pretty miserable launch of Nu-PlayStation Plus. There are a number of adjectives I could use to describe this mess, but I think the best one is: how thoroughly Jim Ryan.

Let us recap. Back when rumours of Nu-Plus’s existence first emerged I figured that, while Sony clearly lacked both the resources and ambition to tackle Game Pass head-on, an overhauled subscription service had tremendous potential because of the strength of Sony’s back catalogue. An all-you-can-eat spread of PlayStation classics! Come on! Now reality has struck: the service has launched in Asia, the retro offering is miserably slender, and to cap it all off Sony is using the inferior 50Hz PAL versions of the PS1 games on offer, just as it did with PlayStation Mini. I’ve seen it suggested that this is because the PAL versions were typically released later than their NTSC counterparts, and as such were more stable, with fewer bugs. And because they were European releases, they had the best multilanguage support. Which… well, you know. Sure. I suppose I can see the logic in it, sort of.

That is only the start of it, of course. On the eve of the service’s launch in Asia, Sony said the Nu-Plus catalogue would include over 700 games; in fact there are less than half that number. The asterisked caveat — that the lineup would vary “over time and plan” — is doing so much heavy lifting here that I fear it has given itself a hernia. Some weeks ago Sony blocked the redemption of top-up codes for PS Plus and Now, ignoring what stacking workarounds has done for Game Pass subscriber numbers, sacrificing player engagement and satisfaction at the altar of maximised revenue. And this week it emerged that anyone who had previously stacked up multiple years of PlayStation Plus memberships — by taking advantage of discounts offered by Sony itself — had to make up the shortfall when paying to convert their existing subscription to the new one. Sony apologised after the obvious backlash, walking the measure back and blaming it on a ‘technical error’. Ha, sure. Do pull the other one, Sony. It’s got ‘it was a work event’ written on it.

From the minute it has been unveiled it has been abundantly clear that this service has been designed primarily for the benefit of the Sony bean-counters, rather than PlayStation users. I have only met Jim Ryan once and I liked him a lot, but he is a biz guy at heart. His background is not in game development — prior to taking his seat in PlayStation’s biggest chair he was its global head of sales and marketing — and nu-Plus reflects that, as do a lot of the big decisions he has made since taking over. It makes sense that someone with his background would shutter Japan Studio because its games, for all their creative wonder and esoteric flair, do not sell as well as those made in Santa Monica. It makes sense that a career salesman would treat the release of a new generation of console hardware as the pretext for a hefty software price increase. And, yep, it makes sense that a new subscription service should prioritise Sony’s bottom line, rather than offer an irresistible player experience.

It’s admittedly a simplistic way to think about things — Sony is a huge, global company, filled with people of diverse backgrounds, perspectives and priorities. But when you look around the industry, you can see it sort of fits. There is a huge contrast, for example, between how Phil Spencer, a coder at heart, runs Xbox compared to his revenue-obsessed predecessor Don Mattrick. Nintendo is tremendously different under Shuntaro Furukawa, an accountant by trade, than it was under Satoru Iwata. You can see the contrasting personalities, and personal priorities, of these people in the way their respective businesses are run. Culture trickles down from the top, and the structure and execution of nu-Plus says a lot about the current state of Sony. Much like a trolley suitcase full of corner-shop chardonnay being wheeled into the prime minister’s house, it is a story crafted in its leader’s image, and it does not make for inspiring reading.

MAILBAG!

Another relatively quiet response to Monday’s edition. Shall we all just collectively pretend that EA doesn’t exist? Fine by me, I suppose.

• “Big fan of the newsletter, been a subscriber since day one,” writes KL, which has nothing to do with the topic at hand but made me smile, so in it goes. “One thing you didn't mention about EA which could become a new cash cow for them is their acquisition of Codemasters, and specifically the F1 franchise. By no means am I expecting it to become the new FIFA, but the past three years have seen explosive growth in the popularity of F1 all around the world, and specifically in the USA after the acquisition of Formula One by Liberty Media. Liberty has done a number of things to increase the sport’s popularity, but one of the major things was signing the Netflix deal for Drive To Survive. In the USA, we have gone from one race to four per season in a very short period of time. I can see this growth translating into the F1 game being a big revenue generator for EA.” Yes, fair point. I wasn’t really aware of just how popular Drive To Survive was until it was effectively blamed for the soap-opera drama that brought the last F1 championship to a close. In that sense buying Codies looks like a good bit of business for EA.
• “I am loathe to give props to EA,” writes Seán, entirely correctly, “but I do want to shout out their EA Originals label which has given us the likes of It Takes Two and the Unraveled games as a counterpoint to their ageing behemoth franchises. I'm happy that at least a little bit of that Ultimate Team cash has gone to producing quirky co-op platformers I can play with my partner. I'm hoping It Takes Two's critical and commercial success will save the EA Originals label from the axe after a future takeover or merger, but I'm not too optimistic.” I perhaps overlooked this, yes. I loved It Takes Two, but I’m not sure I can give EA too much credit for it. It was as much about luck and judgement for the publisher, and there is this recurring sense that, on the rare occasion that it does have a banger on its hands, it either fails to recognise it or doesn’t know what to do with it. There was next to no buzz around It Takes Two until people started playing it. And Titanfall 2 got properly sent out to die, eh.

Lovely stuff. As ever, either hit reply or bash the button below if you’d like to weigh in.

MORE!

• Sony did its fiscal-results thing this week, and herewith some tidbits. The company reckons PS5 supply will normalise by 2024; it is projecting $300m in revenue from PC games this year; it plans to split investment equally between established and new IP; it has commissioned a Hollywood interpretation of Ghost Of Tsushima, as well as TV adaptations of Horizon, God Of War, and… Gran Turismo? Heavens. Looking forward to the emotional training montage of an ambitious young driver trying to get his B Licence in a clapped-out Nissan Micra.
• Some 50 staff have been laid off at Mafia III developer Hangar 13’s office in Novato, California, with an unspecified number also affected at the studio’s satellite operations in the Czech Republic and UK. It’s the latest twist in a tough few years for Hangar 13, which has had multiple projects cancelled by parent Take-Two, including one into which $50m had already been sunk. The studio is believed to be working on a Mafia prequel and a reboot of Top Spin. Excited as I am for both of those things, this is a pretty brutal thing for Take-Two to do in the week that it completed its $12bn acquisition of Zynga. Oh, tightening our belts now, are we? Money a bit tight? Ugh.
• Phil Spencer says Microsoft will support the union formed this week by QA staff at Raven Software when the Xbox maker’s proposed acquisition of Activision Blizzard completes. “We think it is a right of employees and something that can be a part of a relationship between a company and people who work at the company,” he said. Good stuff all round.
• Former NOA boss Reggie Fils-Aimé is still out there shilling his book, bless him, but after several weeks of persistently sticking his foot in his mouth he has finally made a decent point. Broken clocks, and all that. “The game industry has been woefully behind at embracing diversity,” he said. “You don't see it in the executive ranks, you don't see it in the leadership ranks of key developers. It's incredibly difficult to find it in various games. For me as a Black man with my particular skin tone, hair, curls and everything else, it's difficult to make a character look like me, and it shouldn't be."
• There’s a State Of Play next Thursday, with 30 minutes of thirdparty games and PSVR 2 titles. Is this Sony’s contribution to not-E3 2022? Yes, probably, obviously. Only one way to be sure though, isn’t there.

There we go! Forgive me my absence on Wednesday. The youngest has been home sick all week, and was eventually diagnosed with scarlet fever. Nothing a course of antibiotics can’t fix, thankfully, but it’s been a bit of a week as a result. I believe I have now watched everything on Disney+.

You’ll also have to forgive me for my absence next week, because Hit Points is taking a short break. We’ve got three public holidays next week (something to do with the Queen, apparently, I try not to pay too much attention to the specifics) and the family and I are going away for a few days. With lots going on in June — not-E3 for one, obviously, and the return of the subscriber-exclusive interview series Max HP — I could rather do with a bit of a rest before it all kicks in. So! Have yourselves an excellent week, and I’ll see you all on Monday, June 6. Cheers!