Rundown (1/24-1/30) Saturday Morning Robbery

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Wherein I discuss another Tencent acquisition, more industry consolidation, playing the rich man’s game, a baffling mobile adaptation, and a tech company failing to enter the game industry! 

Normally I polish off these Rundowns on Saturday morning. After I finish my breakfast, and before I vacuum the house. Unfortunately, somebody plopped a project on my plate before I could even get my breakfast started, so I’m polishing this off in the evening, and I forgot to bank a preface idea this week, so… let’s get on with the news!

I mentioned last week how Tencent acquired a majority stake in Klei Entertainment, but, as I highlighted in Natalie Rambles About 2020, that was just one of their acquisitions as of late. And before the dust could even settle or ink could dry on this deal, Tencent announced that they acquired a minority stake in a fairly small AA developer. Which one? Why, none other than the developers of the Remember Me, Life Is Strange, and Tell Me Why, Dontnod Entertainment! Specifically, Tencent invested $40 into the French developer in exchange for influence over their operations and rights to a percentage of their profits going forward.

I would comment on this acquisition, but what is there to say? They offered Dontnod financial security via a large investment that could fund one, or two, projects. They still control their studio, Tencent is a mostly hands-off investor, and I have doubts they would stop Dontnod from pursuing, say, LGBT themes in their games because that’s kind of their thing. Much like with Klei, I can’t blame Dontnod, but I wish this didn’t happen in the first place.

On that note, somebody should keep a list of what companies are potential purchase targets for large corporations like this. The industry thinned out a lot after 2008 and the recession. THQ Nordic has been going on a spending spree for IPs and studios for years. Microsoft is bolstering itself for a gaming empire as they expand their intellectual property offerings. And it’s starting to look like the entire industry will be picked to bits by a few juggernauts. Just like with the film and television industry.

This actually got me curious, so I started doing some informal searching around for independent developers, and whether certain were merely subsidiaries for a sprawling empire. And in doing so, I happened across Keyword Studios

Keyword Studios is a white label studio that, rather than taking on the responsibilities and risk of full game production, is a collection of external support studio for other developers, offering services spanning from localization, QA, consulting, voice production, art services, and support studios who have been working on a bevy of smaller projects. Or to give some more concrete numbers, they staff over 8,000 people, are in over 20 counties, and have acquired over 50 smaller companies, including some you might have heard of. 

They own D3T, who did the HD remasters of Shenmue 1 and 2 along with Mafia II: Definitive Edition. They own Sperasoft, the people behind the impressive Saints Row: The Third Remastered. Back in September, they bought Heavy Iron Studios, who made a few prolific licensed games in the 2000s and have been quietly trucking along as a support studio. Then they purchased High Voltage Software during the tail end of 2020, a studio that’s probably best known for The Conduit and Saints Row: Gat Out of Hell.

It shocks me that such a large company can exist without them being much of a known entity in the industry, but I guess this is just an indication of how big the industry has truly gotten, and how secretive it still is. If something is not reported or picked up by the press, it likely will not be common knowledge for industry devotees such as myself, or even industry professionals. I would comment on this being a new trend, but white label developers have been around for about as long as gaming has been a known quantity. 

The first incarnation of Atari didn’t credit most of its developers. Many Japanese companies in the 80s had their staff use pseudonyms to prevent other companies from poaching their talented employees. And as games became larger and support staff became a requirement to ship a title within a deadline, it became common practice for games to obfuscate their true developer, or credit the main developer over those who offered invaluable expertise. For example, did you know that Tose was responsible for porting Breath of the Wild to the Nintendo Switch? Well, they were! But Nintendo sure as hell isn’t going to advertise that.

That’s an odd story that I found on my own, but another story that has been doing the rounds has been GameStop’s stock price. I’ve talked before about how GameStop has been struggling financially as games have been moving in a digital direction and the stores became more cluttered and tat-filled. However, this past month the company has come into the limelight, and not for anything they necessarily did, but rather due to what the subreddit Wall Street Bets did to make their stock price explode. 

Okay, let’s see if I can explain this properly. In stock trading, there are things called Shorts and Longs. If you Short a stock, you are putting in a bet that the value of a stock will decrease. If you Long a stock, you are putting in a bet that the value of a stock will increase. Every Short and Long has a set amount of Days to Cover, various fees to pay during that duration, and based on the difference between the starting price, the Spot Price, and the ending price, the Strike Price, money is exchanged between the involved parties. If the investor was right, they can make an unprecedented amount of money. If they were wrong, then they could become destitute overnight. 

I’m not sure what the exact math or formula on all of this is— my Master’s in Accounting program didn’t cover this in detail, but that is a fairly simple explanation of the concept.

Anyway, the long and short (pun intended) of the story is that hedge funds put in a massive Short on GameStop, as they believed that their stock would drop. Wall Street Bets noted this and bet against this Short, inflating the price of GameStop’s stock through their investments. This meant that hedge funds lost billions of dollars once the Days to Cover ended, while those who invested in GameStop by buying up their stock gained billions. 

Now, what Wall Street Bets, and all associated parties, did here is not an uncommon financial tactic for hedge funds. In fact, the only major difference here, beyond the volume of sales and extreme growth, is the fact that this is being done by a group of individuals sharing information on a public forum, analyzing various companies, and urging others to invest in specific firms in order for members of this community, and onlookers, to amass greater wealth by selling and short-selling the stock. Instead of being done in private by individuals who manage the wealth of millionaires.

What we’re seeing here is a group of regular people using the money-making systems that the rich have been using for decades, and I’m actually surprised it has taken this long for something of this scale to take off. All it takes is some financial and business know-how and publicly available resources. Personally, I’m glad to see this sort of thing happening, and people perceive this as destroying the market, well… it isn’t. 

If you think this is hurting the market, it probably just means one of three things:

One, you do not understand the dirty tomfoolery that hedge funds get up to and how they like to bonk the market in the bum on the regular. Remember 2008? That happened because of rampant short sales… and mortgage-backed securities made up of subprime loans… and some other stuff, but this was one of the key factors.

Two, you’re on the losing end of things and have an interest in a hedge fund If this is the case, then I have this to say: Tough cookies, bitch. You took a risky investment, and things didn’t pan out for you. If you want financial security in your investments, put your money in a 401K, IRA, bonds, or CDs. Y’know, cowardly stuff that doesn’t actually accrue in value, and actually loses it in many cases due to inflation.

Three, You hate the idea of corporate wealth being gambled on and think that Shorts, Longs, and betting on the stock market is fundamentally wrong and only hurts the economy by gambling with people’s money all so the rich can get richer. 

Personally though… I don’t know all that much about the stock market, but I will openly support the actions of Wall Street Bets and their associates. Because I like it when wealth is distributed downward and seeing the rich get beaten at their own game. Sure, it sucks for the investment bankers, but they’ve got white collar skills and can get jobs elsewhere. 

Dang, I thought I was going to stop being so political on Nigma Box. I’d apologize, but this is ultimately a current events piece, I am discussing current events and trends, and by their very nature, they happen to be political. We live in political times, and if you don’t like that… I guess get outta time. Or live under a rock. I like rocks. They have pleasing textures.

I also like the Ys series, particularly the games Ys VI: The Ark of Napishtim, Ys: Oath in Felghana, and Ys Origin. I love the basic yet frantic combat, the vivid landscapes, the booming music, the steady progression systems, the recharging magic system— while not perfect, they are all great action RPGs and feature a unique feel and style that I wish Falcom continued in the later titles or had a direct spiritual successor. Because these games deserve to be iterated and built upon as much as Super Metroid has been over the past decade.

…Anyway, the reason why I am bringing this up isn’t because Falcom announced Ys X or (another) Ys V remake. But rather, it is the announcement of a mobile game named Ys VI Online: The Ark of Napishtim. Now, this project was technically announced a while ago, gameplay even trickled out earlier this month, but this came up in my feed after Gematsu reported on it, and I… have so many questions, almost all of which are obvious. Namely, why would you make a mobile version of a 2003 Japanese PC game, brand it with the moniker of “Online” and transform it into a clunky live service for phones?

Well, the answer appears to be that this is a Chinese production, and somebody at… some company managed to cut a deal with Falcom to create a game based on this title. One that is… bizarre with how it pays tribute to the original, changing some things abrasively while keeping others.

For example, the geometry, enemy designs, and characters from the original game are recreated in great detail, but the PS Vita quality environments look notably worse than the pixel-textured chunky HD PSP-looking locales of the original. Characters previously only shown as ugly pre-rendered sprites and pixelated artwork are now PS3 quality character models and moving artwork. While the music carries over many songs from the original game, but in recomposing the music, they removed a lot of the layers and general complexity of the tracks, turning them into somewhat soulless renditions. And, of course, the game was revised and reworked to incorporate new original characters clearly created by a different designer, and serve as the player-insert character, because I guess Adol wasn’t enough of a self-insert. 

I think my biggest point of confusion with all of this is how the game only focuses on Ys VI. It is not Ys: The Gacha of the Gods. It does not span the cast, locales, and volume of the entire series. And it is not a recreation of Ys Online, which was released when every JRPG series was getting an MMO of some sort. It is just taking one game and trying to turn it into a live service while introducing things like monster cards and a section where the characters transform into cute mascot monsters. It’s a strange game, and it probably sucks, but part of me cannot help but look at it with intrigue. 

I am fascinated by the design principles behind mobile games, and seeing a developer try to adapt a linear and short game like Ys VI into a live service is bound to bring about at least some insight. If it ever comes out in English, which it definitely won’t, I will probably give it a shot. But because I can’t properly play it, I’ll just catalog this game as one of the innumerous curios I have rattling around my brain.

Curios such as how, in 2014, Amazon stepped up to bat and formed their own AAA games studio, but have continuously failed to ship a project. They tried to push Breakaway as the next big eSport, but could not get it to stick, and canned it in 2018. They put out Crucible, a hero shooter I only know from headlines, before putting it back into beta after it got a muted reception, and shutting the game down a few months later. Now they are promoting the upcoming New World as the ‘next big MMORPG,’ despite looking like the most generic MMORPG and one devoid of whatever personality you could assign to games like World of Warcraft or Black Desert. Hell, just looking at gameplay makes me want to reinstall Genshin Impact because it did action combat and world design so much better than this blasé dated-looking malarky.

If you are looking at these three bullet points of events, you can probably reach the conclusion that something is amiss at Amazon’s development studios, and you would be completely right! Coming in hot from Bloomberg is yet another hearty industry exposé about one of the most successful and crucial companies of our modern era and how they just can’t seem to make a video game.

A lot of the blame for Amazon’s languishing state of projects could be attributed, fairly or not, to the head of Amazon Games Studios, Mike Frazzini. A long-standing Amazon employee with no true background in gaming and a strong belief in Amazon’s core principles. Amazon is ultimately a tech company, and, like most tech companies, they want decisions made based on data, trends, and factual quantifiable evidence represented by math. This is counter-intuitive to the creation of a video game as, while data and analytics can make a game better, they should not be the driving force behind any design. Because when you are creating a game, you are making something that is experienced as a piece of art and your design approach should follow a more artistic mentality.

What’s more, is that Amazon wants to make it big in the industry right out of the gate. They want their games to be billion-dollar-franchises, have a strong online focus, and be something striking and innovative. But anybody who has simply glanced at the industry of gaming can probably tell you how impossible that is. Not to mention counter-intuitive to any data-driven design. This could have caused the developer situations at Amazon to be nightmarish, but they actually sound far better than many developers. They do not mandate crunch or overtime, and deadlines are loose and flexible, as they do not want to rush projects to market.

Sadly, if developers lack any meaningful input, or feel the need to placate their superiors, as is the case at Amazon, you won’t end up with a good product, no matter how long it is in development. And even after canceling so many projects, Amazon has not picked up on this. Which is just evidence of how little they understand this industry. From chasing design trends as they are trending to managers not understanding the development timeline of games or their terrible choices in technology.

Back in 2014, Amazon began developing its own spin-off engine from the CryEngine, named Lumberyard. Unfortunately, the engine has not taken off, has only held back the development of its games in many cases, and has undoubtedly proven itself to be a massive financial mistake considering the loss of productivity and development costs. When compared to the paltry licensing fees for Unity or Unreal, it honestly is a wonder why anybody ever thought this was a good idea.

Overall, it’s kind of amazing how much time, money, and resources you can waste because of bad management and misguided goals. Amazon invests half a billion into game development a year but has nothing to show for it because they want everything to be perfect while doing precious little to equip its developers with the resources needed to make a perfect, or even particularly good, video game. It just goes to show you how much the people at the top have influence over those at the bottom, and how all it takes is one foolish dogma to cause so much waste. 

Header image comes from We Switched Our Bodies After Having Sex! Chapter 6 by Tokinobutt.

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