What’s Behind the Sale of IO Interactive

Last week, Square Enix in a release to investors announced that they were parting ways with IO Interactive, looking for possible buyers for the talented Danish studio. What ended being a surprise, given that they announced record net-sales and an increase in profit driven by the releases of Final Fantasy XV and Rise of the Tomb Raider to the PS4.

What no one could expect was the decision to sell the studio behind the Hitman franchise. Especially after the good reception from critics, being nominated for several game of the year awards. But what could motivate the company to sell a well-regarded studio, especially if they are not in a dangerous financial condition? Let’s talk about it.

Hitman Needed to Be Bigger

August 25th, 2012 @ 06:04:36

The first reason behind this decision could be one that may not be that pleasant, but the truth is that the Hitman series isn’t as big as it needs to be. The studio doesn’t really have a juggernaut in their hands, at least not commercially. Their two main franchises, Kane & Lynch, is now defunct for years after the Dog Days debacle, and Hitman, never reached the same height that other games in the same genre did.

Whereas Splinter Cell managed to sell several millions of copies, the Metal Gear series is one of the most important, successful and influential in the industry, Hitman always seemed to be smaller, more focused on a niche, never rivaling with the bigger players. Efforts like the movies also didn’t elevate the status of the franchise, with both movies underperforming, failing to reach the $100 million mark at the box office.

It has a faithful following, with passionate fans that love the more open-ended nature of the title, something that became its trademark. But sales never reached the 5 million mark, slowly decreasing with every launch, with Absolution being heavily criticized by fans due to a simplification of the stealth system, despite posting respectable sales numbers.

The Stealth Genre Has Seen Better Days

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The genre in which it is part of is also going through a crisis, the Splinter Cell series is currently on hiatus since the release of Blacklist, that failed to meet Ubisoft’s expectations, selling 2 million copies despite a significant investment of the publisher.

Franchises like Assassin’s Creed went on to grow after it started to abandon its stealth roots, Dishonored 2 had underwhelming sales even though critically it was extremely well-received. Other Square Enix franchises with a heavy focus on stealth are struggling, like Thief, that went through a failed reboot, being critically panned and with weak sales, essentially killing it.

The Deus EX franchise is on hold after Mankind Divided failed to attract attention in the market, again with a good critical reception, but a lukewarm from the public. Something that seemed to happen with the 2016 Hitman reboot, that innovated using an episodic model for an AAA title.

With each new level showing the quality of the studio, managing to find an audience, and accruing praise, being nominated for game of the year awards by several outlets. But unable to translate it to significant sales. Feeling like it was part of a bubble, that adored the game, but never reached the mainstream awareness to be considered successful.

Square Enix’s Strategy is Changing

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Even though it remains as an important publisher in the industry, the company has been taking some hits in the past few years, with interesting titles that look as if they never reach their full potential. As the aforementioned franchises,  Just Cause appeals to a smaller audience, even their biggest ones like Tomb Raider, struggled  to compete with its release on Xbox One with Fallout, despite being an amazing game, and Final Fantasy XV looked like a last try to bring the franchise to its golden years, that fortunately worked.

In the same release, the company revealed its plans to focus on 1-2 AAA titles per year, multi-platform games, remasters, showing a more conservative approach to the market. Their partnership with Marvel to produce an Avengers and another unannounced game comes to fill the space of their IP’s that haven’t performed as expected.

Dropping a studio like IO seems to be an effective way to diminish its structure, becoming a leaner and more focused company. Reports that the studio may retain the IP only seems to corroborate the fact that they want to have a smaller but more significant portfolio.

Possible Buyers

 

But there should be many suitors to buy them, and I thought about some companies that could benefit from their talents, and the IP itself. Thinking about the possibilities, four stood out:

Amazon Game Studios: With their own engine, they could use a studio that has produced quality titles, and is battle-tested. Recently they have made some moves, bringing a former creative director of the Need For Speed series, bringing IO and Hitman to their portfolio would be a very interesting move.

Deep Silver: They have tried to become one of the biggest players in the market, and they showed some promise with Saint’s Row and the Metro series. But unfortunately, they’ve had more hits than misses lately, with the abysmal Homefront: The Revolution and the questionable Mighty No. 9. It would show that they are looking into becoming serious players in the market.

THQ Nordic: Their efforts seem a little unfocused, announcing several smaller titles that don’t really appear to entice the market. However, they have announced Darksiders III, another beloved franchise that could end up growing, and bringing an established franchise could cement them as an up and coming publisher.

Microsoft: This is the one that makes the most sense to me, after closing some studios recently, like Lionhead, and canceling several titles, their first-party situation looks bleak. The Forza, Gears, Halo combination hasn’t been able to please the market and is beginning to look weak when compared to its competitors. In a participation on Unlocked #285, Phil Spencer talked about revamping their first-party studios, and this could be an important move, showing to their consumers that they think about the future of the brand. And they could use IO’s talent to either continue the Hitman series, that wouldn’t be required to sell as much in this kind of environment and would fill a void in their portfolio or even create a new AAA IP.

What the future holds for IO nobody knows, but that there’s no doubt that they have a bright one.

 

 

 

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The Term “Hardcore Gamer” Must Die

Video games are unique when compared to other mediums for one simple reason, the level of interactivity between the product and the consumer. Whereas in movies, books, music you react to what’s being played, written, in video games if the player doesn’t do anything the story won’t move forward, there won’t be interactions, conversations, action.

And due to this characteristic, we see a separation that we don’t see elsewhere. If you love movies, you are a consistent moviegoer, you are considered a cinephile. If you appreciate the beauty in art, music, you are an aesthete. But in games, you can either be a “hardcore gamer” or a “casual gamer”.

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With this separation being detrimental to the medium, as we saw with the release of Mario Kart 8 Deluxe, that was released on April 28, and brought the Wii U version with some additions to the Switch. A revamped battle mode, DLC’s, and a “controversial” Smart Steering configuration, that will essentially keep the kart on the track.

Some websites that focus on the “hardcore” audience were quick to attack, make fun of the novelty, users complained on forums. But the one thing that we fail to remember is that these additions can be great to the industry, making games more accessible to a wider audience. And one story stood out in the crowd, as seen on Kotaku, of a little girl who suffered a stroke just after being born, affecting her coordination due to complications, and because of the Smart Steering function is now able to play Mario Kart for the first time in her life.

Accessibility must be an important part of games moving forward. Whether is something simple, like Smart Steering, or an easy mode, that can make games more palatable for kids, that in the past generations haven’t had many devoted to their audience, and they are crucial for the future of the industry, representing a strategic group that has been neglected.

As well as for people with disabilities that, unfortunately, have to face barriers to play their favorite games. Uncharted 4 is a great example to be followed, being one of the first games to be released with enough options to allow gamers with disabilities to play from beginning to end. Inspired by a fan that couldn’t finish previous entries due to the necessity of mashing several buttons to move forward, something he wasn’t able to do.

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Even if we only focus on the business side, we hear that the majority of the population is composed of gamers, that the industry is bigger than others in entertainment. But according to a Nielsen report, more than 23% of gamers in the US haven’t heard of the PS4, and it may sound strange, but a significant part of gamers only buy the console their friends like and play one or two games of a franchise they love every year.

They are not into what’s new, they don’t go to news websites and they are happy to have a small library. And sports, as well as racing games, have adopted arcade modes that makes them much easier to comprehend, especially sports games, that become more and more complex in each iteration. The trainer mode in the EA Sports games is a good example of that, teaching you how to play in a way that is easy to understand, and limits the game to more basic moves, going on to sell millions of copies every year, to many “casual gamers”.

And that is great for the industry, given that many newcomers can get to know games and maybe become more involved. We like to brag about how movies and music are smaller than games. But how many people you know that will actively play games as part of their daily life, on mobile maybe, but when it comes to consoles and PC’s, it’s a much smaller number.

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Try to think of another medium that divides their audience based on the way they consume. If you only watch Marvel movies, that doesn’t make you a casual moviegoer or only listening to Rock bands, a casual music lover.

But if From Software announced that Bloodborne 2 would have an easy mode, their fans would go crazy, but how does that affect them? Having gamers that may not be used to the franchise or genre can make it even bigger, increasing sales, mind share. Being good at games, in the end, doesn’t mean anything, except that you have mastered a mechanic.

We especially see a toxic behavior in multiplayer games, where you can be kicked out of a mission or a room solely based on your level. I couldn’t play some daily missions in The Division or some games of Rainbow Six Siege because of that.

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Despite our love for games, not all of us can invest hours every day into developing a character or skills. As the industry grew, gamers grew with it, many today are responsible adults, parents, husbands, wives, with bills to pay and limited time, financial possibilities.

For example, I must play probably thousands of hours every year, but I play every RPG on easy mode. I’m not focused on the combat, but on the story, that became more refined and more time-consuming as the genre advanced, and I don’t have enough hours in the day to master complicated systems.

Having the option to play something with all assists on Project Cars or Forza, for example, can bring relapsed gamers back. A mode in which you only need to care about one thing, can present a new market, and bring games to people who would possibly never have to chance to enjoy them. Embracing new players to a community can make it thrive and sustain a healthy environment.

Video games are incredible, they can bring people together, but if we want it to become a larger and more mature industry, we need to stop with separations. Playing Candy Crush or Pokémon Go doesn’t make you casual, “walking simulators” like Gone Home and Firewatch can be an incredible experience, and they are not lesser games just because of their more streamlined gameplay. As some games that I love like Life is Strange and Journey, that marked me despite being simple.

Instead of using this bravado, claiming that we are “hardcore gamers” why not just say we are gamers. After all, in spite of our love for them, they are just another way of entertainment, that helps us go through this hard journey called life.