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Technology

Giant Bomb And GameSpot Face Layoffs Months After Fandom Sale

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Image: Fandom

Two of the biggest outlets in games media are the latest to face layoffs. A number of editorial staff across both Giant Bomb and GameSpot revealed they’d been let go on Thursday, just months after the sites were purchased by the Fandom wiki network.

The layoffs were announced during a surprise all-hands meeting with Fandom CEO Perkins Miller, according to two sources familiar with the event. Roughly 40 to 50 employees were affected across the company, with at least some managers caught completely off guard by the cuts to their teams. Miller told staff that the Fandom network remained profitable despite the cuts, but declined to answer any questions, sources said.

Previously owned by Viacom CBS, Giant Bomb and GameSpot were both sold to Red Ventures in 2020, which then turned around and sold them again to Fandom last October, along with Metacritic, TV Guide, and other sites. “We’re thrilled to add these powerful, authoritative brands into the Fandom platform, which will expand our business capabilities and provide immersive content for our partners, advertisers and fans,” Miller said at the time. Fandom, whose business model revolves around plastering ads over free, user-generated content, is itself owned by private equity firm TPG Capital.

Fandom declined to comment.

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Giant Bomb in particular has faced a number of shakeups recently. Co-founder Jeff Gerstmann left last summer to start a solo Patreon-funded podcast and former co-host Dan Ryckert returned to take his spot. Since then, the show has expanded its roster and included more crossover with GameSpot talent. Jess “Voidburger” O’Brien, who became a full-time Giant Bomb member in 2021, and Jason Oestreicher, who began back in 2014, were two of the people laid off today.

The latest gaming media cuts come just a month after IGN faced its own surprise layoffs as its team was preparing to cover the 2022 Game Awards. Before that, Comcast shutdown its recently revived gaming network G4, Tencent gutted the staff at Fanbyte, and other sites like Game Informer, Polygon, and TechRadar cut staff numbers, too.

While the layoffs come at a time when companies from Microsoft to Amazon are reducing staff and advertisers are slashing budgets ahead of a recession manufactured by the Federal Reserve, not everyone is feeling pain. The CEO of IGN’s parent company, Vivek Shah, made roughly $16 million in 2021. TPG CEO Jon Winkelried, meanwhile, earned over $80 million that same year, in addition to the hundreds of millions he raked in during his decades long career at Goldman Sachs.

Update 1/19/23 5:01 p.m. ET: Added more information about the extent of the cuts and the all-hands where there were announced.

         

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Technology

New League Of Legends Trailer Is So Bad Riot Had To Explain It

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Image: Riot Games

A new year means a new League of Legends season. And for the past few years, this has also meant a big, cinematic trailer to announce the new season. However, this time the trailer for League of Legends’ next season was pretty dang boring and underwhelming, especially when compared to last year’s. In fact, the response from the community was so bad that Riot felt the need to apologize and explain why the trailer was so lackluster on Twitter.

Since 2018, Riot has created and released extremely cinematic and epic trailers for each new season of the long-running F2P MOBA. Last year’s trailer for Season 2022 was particularly popular among fans, cited as one of the best trailers the company had ever produced for League of Legends. And past trailers have also been big hits among the community. So anticipation around this year’s new season and trailer was very high.

So that makes it even worse that the actual trailer we got, titled The Brink of Infinity, was a boring two minutes or so of narration while the camera flies around the famous battleground from LoL. And…that’s it. As you might expect, the community and its many players basically started dunking on this trailer from the moment it went live yesterday.

Riot Games

“After the 2022 cinematic, I can’t even begin to explain how DISAPPOINTING this year’s is” commented one user on YouTube. “I never thought that I [would] ever dislike a cinematic from League,” said another viewer. Many others joked that the new trailer was just the original LoL map, Summoner’s Rift, re-rendered in Unreal Engine 5. In less than an hour it reportedly had over 5k dislikes. As I write this now, the trailer has over 170k dislikes. Across Twitter and Reddit people were critical of the trailer, with some complaining that Riot cared more about its popular FPS Valorant than its aging MOBA.

After hours and hours of these reactions pouring in along with rumors and speculation running wild that Riot wasn’t planning to support League of Legends as much as it had before or that the game might be dying, the studio itself stepped in and explained via a Twitter thread what happened with the trailer, and apologized to the community.

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“This year, there were some unprecedented circumstances that had us choose an alternate approach to the Season 2023 video,” explained Riot. “However, we believed it could still embody League’s broad universe and competitive spirit while celebrating the start of a new season. But we’ve heard your feedback, and we want to acknowledge Brink of Infinity missed the mark for the action-packed, champion-led trailer you expected and has led to further speculation about our investment in League.”

Riot further explained that it should have been “more communicative” about the trailer and its different approach this year, suggesting that this could have helped avoid the “feeling” that the company wasn’t as invested in LoL in 2023 as it has been in the past.

“We do believe that League has a bright future and we are investing in that, but we can do a better job of sharing those plans with you,” tweeted Riot. “We are committed to giving you more details about what that investment looks like in the next couple of days. We really appreciate your passion and feedback, and League’s success wouldn’t be possible without your dedication. Thank you.”

Kotaku reached out to Riot for further comment on the trailer and the community’s reaction.

Response to Riot’s Twitter thread was mixed, with some happy that it was at least acknowledging the disappointment and frustration and others upset that Riot wasn’t doing more to support League of Legends and its community. And for many, this response doesn’t quell their concerns that the company may be more focused on other projects and games, like Valorant, and could be putting League on the backburner.



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Business

Ubisoft CEO says still open to other partners after Tencent deal

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Yves Guillemot, CEO of Ubisoft, speaks on stage during the Ubisoft E3 conference at the Orpheum theatre in Los Angeles, California June 15, 2015. REUTERS/Mario Anzuoni

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  • ‘We can do whatever we want,’ founder CEO says
  • Ubisoft to create three mobile games with Netflix
  • Tencent deal comes on heels of M&A wave in gaming industry

PARIS, Sept 10 (Reuters) – Ubisoft (UBIP.PA), France’s biggest video games maker, is still open to other partners after a deal in which China’s Tencent (0700.HK) will raise its stake in the company, its co-founder and CEO Yves Guillemot said on Thursday.

Guillemot’s comments, made at a closed press event whose content the company asked not to be made public before a showcase event online on Saturday, came on the heels of a rough day for Ubisoft’s stock, which tumbled 17% after the group announced Tencent would become its single biggest shareholder with an overall stake of 11%. read more

The deal values the “Assassin’s Creed” maker at about $10 billion.

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“We remain totally independent and we can act with any outside company if we want to,” said Guillemot, who along his four brothers founded Ubisoft in 1986. “That was a big negotiation with Tencent,” he added. “We can do whatever we want.”

Traders and analysts have said the Tencent deal, which sees the world’s largest games firm by revenue enter into a shareholder pact with the Guillemots, removed the speculative appeal of Ubisoft shares.

The group has long been seen as a takeover target as the Guillemots hold a minority stake in the group. Still, the Guillemot brothers managed to fend off a raid by French tycoon Vincent Bollore via his media group Vivendi (VIV.PA).

Smaller mobile video game maker Gameloft, formerly led by Yves Guillemot’s brother Michel, was gobbled up by Vivendi six years ago.

The secretive siblings, sons of agricultural traders from a small town in Brittany, western France, have vowed to protect their independence, a goal which Yves Guillemot, 62, reasserted on Thursday. “Our first intention is to own our destiny,” he said.

MEANINGFUL PROGRESS

That prospect was tested recently by a combination of weak financial results and allegations of sexual harassment, that led to a revamp of the company’s governance and pledges to change a corporate culture described as sexist by some former employees.

“Yes, we stumbled, and we acknowledge that”, Guillemot said. “We learned a lot along the way and have made meaningful progress with concrete action plans collectively led by our leaders.”

Ubisoft burnt through about 200 million euros in cash operationally during its 2020/2021 financial year, having generated 169 million of operational cash flow the year before.

The company’s financial woes came on top of several delays in the release of new video games and heightened pressure on management, in the midst of a boom and M&A wave in the video game industry.

These were notably marked by Microsoft’s plan to acquire “Call of Duty” maker Activision Blizzard for $69 billion.

As part of its plan to return to growth, Ubisoft is aiming to deploy its three “pillar” games – “Assassin’s Creed”, “Far Cry” and “Tom Clancy’s Rainbow Six” – on all digital platforms, Guillemot said.

The group aims for these three brands to reach a total of 2 billion euros in annual revenue within five years, Guillemot said.

Guillemot said “Assassin’s Creed” will release its next edition “Mirage” in 2023. Ubisoft is also partnering with streaming platform Netflix (NFLX.O) to develop three original mobile games, including one based on Assassin’s Creed.

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Reporting by Mathieu Rosemain; Editing by David Holmes

Our Standards: The Thomson Reuters Trust Principles.

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Business

Shares of Assassin’s Creed maker Ubisoft plunge after Tencent ups stake

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Tencent has increased its stake in French games maker Ubisoft, the company behind popular franchises like Assassin’s Creed. But analysts said this has effectively closed the door on a full takeover of the company.

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Shares of games developer Ubisoft plunged more than 16% on Wednesday after prospects of a full takeover were dampened following a move by Chinese tech giant Tencent to increase its stake in the company.

On Tuesday, the two companies announced that Tencent invested 300 million euros ($296.9 million) in Guillemot Brothers Limited, amounting to a 49.9% stake in the company. Tencent only gets 5% voting rights in the company.

Guillemot Brothers Limited is controlled by the Guillemot family, and is the entity that controls the majority of the family’s roughly 15% stake in Ubisoft.

The Guillemot brothers founded Ubisoft in 1986 and have fought hard to keep the company independent and protected from a takeover.

Tencent’s investment values Ubisoft shares at 80 euros each, an 83% premium on Tuesday’s closing price and gives it an indirect stake in the French games developer.

The move effectively closes the door on a full takeover of Ubisoft by any party, according to analysts, something that investors were holding out for.

“What this transaction does appear to signal is that any full sale of Ubisoft to a strategic or financial buyer is very unlikely. In our view this should be seen as a net negative for shares (though not for the company itself),” analysts at Cowen said in a note Tuesday.

As part of the deal, Tencent is able to increase its direct stake in Ubisoft from 4.5% currently to 9.99% of the capital or voting rights. But Tencent will not be able to sell its shares for five years and will not be able to increase its stake in Ubisoft beyond 9.99% for a period of eight years. That effectively rules out a complete takeover of the gaming firm.

Ubisoft’s drama began in 2015 when French media conglomerate Vivendi took a stake in the European gaming firm, eventually becoming its biggest shareholder. But the Guillemot family were determined to keep the company independent.

In 2018, after a three-year battle, Vivendi dropped its pursuit of Ubisoft. Tencent stepped in to buy some of the Ubisoft shares Vivendi offloaded and the Chinese tech giant ended up owning a 5% stake in the games company.

Ubisoft has faced a number of challenges including sexual harassment allegations and a lack of new hit titles.

Tencent’s investment continues a flurry of deals in the video games space this year, particularly from Asian firms, that began with Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard in January followed by Sony’s takeover of Bungie, the maker of hit games Halo and Destiny.

Tencent, based in Shenzhen, China, has grown into one of the world’s largest gaming companies over the years, through acquisitions of and investments in smaller studios with popular global titles including League of Legends maker Riot Games, for example.

Tougher regulation around gaming in China has pushed Tencent and its rival NetEase to expand overseas through investments and acquisitions.

Ubisoft is known for some popular franchises including Assassin’s Creed and Rainbow Six. Ubisoft scheduled an event for Saturday to reveal details about upcoming games.

Tencent has typically helped companies it has invested in to run independently, but offered a hand to expand titles into China and onto mobile, where it has typically been strong.

Martin Lau, president of Tencent, said that the two companies will continue “to develop immersive game experiences” and bring Ubisoft’s most well-known franchises to mobile.

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Technology

Sony, Tencent, NetEase continue deal hunt to expand new formats, markets

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Revenue from mobile games accounts for more than half of the mobile gaming market. Sony is looking to diversify beyond consoles with its new dedicated PlayStation mobile gaming division.

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Sony

Sony’s PlayStation has dominated the gaming console market for a long time.

But the business model for console gaming has changed. It’s not just about selling the hardware and then hoping people buy new games. It’s about continuing to milk revenue from those games via regular updates that people spend money on and selling subscription services too.

Sony’s deal flow, particularly with the acquisition of Bungie, highlights this push.

“Their goal is to have enough content to incentivize players to buy their proprietary hardware, pay a monthly fee for the subscription service operated by PlayStation (PS Plus), and purchase the occasional digital game through the PlayStation Store, for which Sony receives approximately a 30% cut,” Tom Wijman, market lead for games at data company Newzoo, told CNBC.

“Snapping up studios is the most failsafe way to ensure exclusive content for their ecosystem — especially in reaction to the acquisition spree of Microsoft, one of Sony’s main competitors in the gaming space.”

Sony is also looking to expand beyond consoles. Last week, the Japanese giant said it is setting up a dedicated unit to oversee the development of mobile games, a relatively new venture for the company, which has been so dominant in consoles for years.

The acquisition of Savage Game Studios, which is dedicated to mobile games, is another key part of the strategy.

“Sony is stepping out of their comfort zone to stay competitive,” Wijman said.

Revenue from mobile gaming accounts for more than 50% of the total gaming market, whereas consoles make up about 27% of sales, according to Newzoo. So, Sony is going after an even bigger piece of the pie.

Sony’s acquisitions will help it bolster its intellectual property and library of games as it looks to expand into mobile gaming.

Tencent and NetEase

China’s two largest gaming players Tencent and NetEase have faced a tougher domestic market, amplifying the importance of their investment and acquisition strategies overseas.

Last year, Chinese regulators restricted the amount of time those under 18 years old could play online games and froze the approval of new titles. In China, games need the green light from regulators to be released and monetized. Those approvals only restarted in April.

Meanwhile, a resurgence of Covid-19 in China and subsequent lockdowns across major cities in the country has hurt economic growth. That led to the worst quarter of revenue growth for some of China’s technology giants, including Tencent.

With a more challenging domestic market, Tencent and NetEase have looked abroad for growth via acquisitions and investments.

“Tencent and NetEase have built up their gaming business primarily in their home turf China. Now that their home market is becoming increasingly regulated and difficult to operate in, these two companies will accelerate their global expansion strategy,” Wijman said.

Tencent owns or is invested in some of the biggest gaming companies in the world, including League of Legends developer Riot Games.

NetEase’s strategy has focused on acquiring high-profile intellectual property. With the Quantic Dream acquisition, the Hangzhou-headquartered firm has access to publish an upcoming Star Wars Game. NetEase has already released mobile games based on the Harry Potter and Lord of the Rings franchises.

For the two giants, having stakes in or owning the studios behind international mega hits in the gaming world has become a key part of the strategy.

While NetEase has traditionally been less aggressive than Tencent in its deal activity, it has ramped up efforts over the last year.

Another part of the investment strategy for both companies also highlights their ambitions in the console sector. NetEase and Tencent have mostly grown by focusing on PC and mobile gaming, not consoles which were banned in China for 14 years until 2014.

But the two behemoths have begun to turn their efforts toward console gaming.

NetEase hired a console industry veteran to run its Japanese game studio earlier this year. And Tencent-owned developer TiMi Studio has opened offices in Montreal and Seattle to focus on PC and console games.

Acquiring and investing in other gaming studios again can help both companies gain access to IP for games on consoles too.

Tighter regulation in China and the search for growth could propel NetEase and Tencent to continue their investment and acquisition strategy.

“Lastly, if the regulation from the Chinese government continues to pressure NetEase and Tencent in their home markets, I think they too will be eager to look into M&A,” Wijman said. “Their global expansion strategies have only just gotten started.”

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Technology

Call Of Duty Remains On PlayStation A Few More Years

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Sony gets “several more years” of joint custody over Call of Duty with Microsoft.
Photo: Activision / Kotaku / Barone Firenze (Shutterstock) (Shutterstock)

Good news PlayStation Call of Duty players: Microsoft says you get to have “several more years” of playing the shoot-bang game on your Sony console.

According to The Verge, earlier this year Microsoft’s Xbox boss Phil Spencer made that commitment to PlayStation boss Jim Ryan in a written letter saying that Call of Duty wasn’t going to disappear off the PlayStation storefront anytime soon if Microsoft’s acquisition of Activision Blizzard is approved by regulators.

“In January, we provided a signed agreement to Sony to guarantee Call of Duty on PlayStation, with feature and content parity, for at least several more years beyond the current Sony contract, an offer that goes well beyond typical gaming industry agreements,” Phil Spencer, head of Xbox, told The Verge.

While exactly how long “several more years” might be is unknown, PlayStation players who feared that the CoD franchise would become Xbox-exclusive alongside the likes of Bethesda’s upcoming space action-rpg, Starfield, can breathe easy for at least a little while longer.

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Humble Bundle’s Summer Sale

Game and Save
Great news for PC gamers out there looking to save money and add more games to your backlog which you’ll eventually get to. Humble Bundle has kicked off its Summer Sale in which you can save up to 90% on games.

Back in January, Microsoft announced it was closing in on a $70 billion deal to buy Activision Blizzard, the publisher behind Overwatch, Diablo, Call of Duty, and Candy Crush. Currently, Microsoft is arguing with lawmakers and regulatory groups around the world saying that its deal is on the up and up and won’t damage the gaming industry.

Read More: Sony Says Call Of Duty Is An ‘Essential Game’ Series While Microsoft Argues It Ain’t

One such claim from the Xbox company appeared in a report from the New Zealand Commerce Commission published in June, where the massive corporation asserted that there was “nothing unique about the video games developed and published” by Activision and that none of the games, including the Call of Duty franchise, were “must have” games for any rival gaming company or platform holder.

Shortly after Microsoft announced its acquisition of Activision, Sony revealed plans to buy Destiny 2 maker Bungie for $3.6 billion and invested $1 billion into Epic Games. Sony’s investment in Epic Games marked the PlayStation company’s third recent spending spree, as it bought Bluepoint Games, the studio behind the well-regarded PS5 Demon’s Souls remaster, last year.

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Technology

Tencent And Sony Acquire 30% Of Elden Ring Maker FromSoftware

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Image: FromSoftware

Elden Ring wasn’t just a hit with fans of FromSoftware’s notoriously difficult action-RPGs. Today Tencent Holdings and Sony announced they’ve acquired 30% of the Souls-series developer’s shares, split in favor of Tencent. FromSoftware is expected to gain $260 million from the arrangement.

Today’s announcement from FromSoft’s parent company Kadokawa revealed that Sony and Tencent are acquiring 14.09% and 16.25% of FromSoft, respectively. The statement indicates that Kadokawa wants FromSoftware to be able to expand its development efforts; Kadokawa sees the “enhancement of capabilities for the creation, development and deployment of [FromSoft] game IP as one of the [Kadokawa] Group’s highest priorities.”

One of the aims is to give FromSoft the resources needed to grow Elden Ring into a franchise that extends beyond just video games.

Elden Ring was a long time coming, built on a foundation first laid down in FromSoftware’s pioneering 2009 PS3 game Demon’s Souls. A set of three spiritual sequels in the form of the Dark Souls trilogy, as well as two other similar titles (Bloodborne and Sekiro), certainly broadened the audience for these difficult and cryptic action-RPGs. But none have reached critical mass quite like Elden Ring, which outsold household names like Call of Duty and led to viral streaming sensations and hype that just won’t die.

Tencent, a Shanghai-based conglomerate, has continued its trend of investments and acquisitions. It owns 5% of Assassin’s Creed and Far Cry publisher Ubisoft, completed an acquisition of League of Legends’ developer Riot Games, owns 40% of Epic Games, and has stakes in many, many, many, many other game companies. As Polygon notes, it also owns 5% of Activision Blizzard, which will transfer over to Microsoft should that megacorp’s notable attempt to acquire the Call of Duty publisher clear regulatory screening.

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Humble Bundle’s Summer Sale

Game and Save
Great news for PC gamers out there looking to save money and add more games to your backlog which you’ll eventually get to. Humble Bundle has kicked off its Summer Sale in which you can save up to 90% on games.

Sony has also been on a spending spree too, though it looks a bit more modest compared to Tencent. Perhaps most notably, Sony acquired the once Microsoft-affiliated Bungie for $3.6 billion in January. The house of PlayStation also made a move to acquire Bluepoint, the studio which made a name for itself with critically acclaimed remakes. Sony also invested a billion dollars in Epic Games back in April.

Anyway, maybe FromSoft can use the new money to add an easy mode so I can finally finish the damn things.

 

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Technology

Tencent and Sony Interactive Entertainment collectively acquire 30.34 percent of FromSoftware

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Through the third-party allotment, Sixjoy Hong Kong will own 16.25 percent of FromSoftware’s shares, and Sony Interactive Entertainment will own 14.09 percent. Kadokawa Corporation remains the largest shareholder of the company with 69.66 percent of shares.

Get the full press release below.

1. Purposes of and reason for the Third- Party [17 articles]” href=”https://www.gematsu.com/genres/party”>Party Allotment

The Kadokawa Group advocates a “global media mix with technology” as its fundamental strategy that combines the stable creation of intellectual property (IP) consisting of a variety of portfolio content chiefly in the Publication, Video, Game, Web Service, and Education businesses as well as the rollout of this IP on a global scale through the extended use of technology, seeking to achieve sustained growth and enhance corporate value from medium- to long term perspectives. FromSoftware is driving the Game Business as it has continually been creating world-famous works, such as Sekiro: Shadows Die Twice and Elden Ring [21 articles]” href=”https://www.gematsu.com/games/elden-ring”>Elden Ring, leveraging its advanced game IP development strength. With an eye on further expansion of the Game Business, the Group recognizes the enhancement of capabilities for the creation, development and deployment of game IP as one of the Group’s highest priorities. In line with this policy, the Company has decided to have FromSoftware implement fund procurement by way of a Third-Party Allotment to Sixjoy and SIE, the scheduled allottees, for the reasons outlined below.

Tencent acquired capital in Guangzhou Tianwen Kadokawa Animation and Comics Co., Ltd., a consolidated subsidiary of the Company, in 2016, and the two companies have been jointly promoting their media mix strategy targeting the Chinese market. In addition, the Company, Sixjoy and Tencent Japan entered into a capital and business alliance agreement as of October 2021 to strengthen their strategic alliance in the anime and game fields. Tencent and its subsidiaries and affiliates (hereinafter, the “Tencent Group”) are a global Internet group that provides communication, social, gaming, digital content, advertising, fintech and cloud services, and operates the leading communication and social platform in the Internet industry in China.

Sony and its subsidiaries (hereinafter the “Sony Group”) and the Company have developed a collaborative business relationship across a wide range of areas related to the Sony Group’s global Direct-to-Consumer (DTC) business operations, branded hardware business and games business. In February 2021, the Company conducted a third-party allotment with Sony as the allottee with the aim of strengthening its relationship with the Sony Group over the long term, and creating new IP of the Company and maximizing the utilization of its existing IP in anime and game fields.

Through the implementation of the fund procurement, FromSoftware will aim to proactively invest in development of more powerful game IP for itself to strengthen FromSoftware’s development capabilities and will seek to establish a framework that allows the expansion of the scope of its own publishing in the significantly growing global market. In addition to these purposes, for an increase of the number of users in the global market for game IP that FromSoftware creates and develops, FromSoftware decided to conduct the Third-Party Allotment to Sixjoy within the Tencent Group, which has strength in its capabilities to develop and deploy mobile games and other network technologies in the global market including China, and SIE within the Sony Group, which has strength in its capabilities to deploy IP in games, videos and various other media in the global market, concurrently and separately.

2. Outline of Third-party Allotment

  • Payment Period: From September 7, 2022 to September 12, 2022
  • Number of New Shares to Be Issued: 3,179 shares of common stock
  • Issuance Price: 11,450,000 yen per share
  • Capital to Be Acquire [274 articles]” href=”https://www.gematsu.com/companies/gungho-online-entertainment/acquire”>Acquired: 36,399,550,000 yen
  • Method of Subscription or Allotment (Scheduled Subscriber): By way of a third-party allotment (Sixjoy 1,703 shares, SIE 1,476 shares)
  • Shareholding Ratio After Issuance:
    • Kadokawa Corporation: 69.66%
    • Sixjoy Hong Kong Limited: 16.25%
    • Sony Interactive Entertainment Inc.: 14.09%

(Note) Payment related to the Third-Party Allotment, which is expected to be made on September 7, 2022, may take place on another day during the above payment period due to procedures required for international remittance, among other factors.

3. Use of the Capital (Total Paid-In Capital: 36,399,550,000 yen)

  • Specific Use of Funds:
    • For strengthening FromSoftware’s capabilities to create and develop game IP.
    • For establishing a framework that allows expansion of the scope of FromSoftware’s own publishing in the global market.

4. Outline of Subsidiary Subject to Capital Increase

    • Title: FromSoftware, Inc.
    • Location: 2-26-2 Sasazuka, Shibuya-ku, Tokyo
    • Title / Name of Representative: Hidetaka Miyazaki [25 articles]” href=”https://www.gematsu.com/people/hidetaka-miyazaki”>Hidetaka Miyazaki, Representative Director and President
    • Business Contents:
      • Planning, development, sales regarding game software.
      • Planning and development of internet content.
    • Capital: 268,500,000 yen
  • Date of Establishment: November 1, 1986
  • Major Shareholders and Their Shareholding Ratios:
  • Relationship between the listed company and the relevant company:
    • Capital relationships The Company holds 100% of the outstanding shares of the company.
    • Personnel relationships Two officers of the Company are seconded to the relevant company.
    • Business relationships The Company and the relevant company have business transactions.

5. Outline of Scheduled Subscribers

  • Title: Sixjoy Hong Kong Limited
  • Location: 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong
  • Title / Name of Representative: Wang Zheng, Director; Ai Ximin, Director; Byun Jung-won Elizabeth, Director; and Tse Cheuk Yin Tiffany, Director
  • Business Contents: Licensing and publishing of mobile games.
  • Capital: 1,000 Hong Kong dollars
  • Date of Establishment: February 28, 2011
  • Major Shareholders and Their Shareholding Ratios:
    • Tencent Holdings Limited:
  • Relationship Between the Listed Company and the Relevant Company:
    • Capital Relationships:
      • The relevant company is a holder of 9,724,400 shares (ratio of ownership voting rights: 6.86%) of the Company’s stock (Note 1).
    • Personnel Relationships:
    • Business Relationships:
      • The Company and the Tencent Group have maintained a strategic partnership in the publishing business through a joint venture company in Guangzhou, China since 2016. In addition, the Company, Tencent Japan, and the allottee Sixjoy entered into a business alliance agreement as of October 29, 2021 to strengthen their strategic alliance in the animation business.

(Note 1): This item is based on the large shareholder report submitted by Sixjoy on November 16, 2021.

(Note 2): In the share subscription agreement that the Company and FromSoftware entered into with Sixjoy the Company and FromSoftware have received a representation and warranty from Sixjoy that it is not an antisocial force and it has no relationships with antisocial forces. The Company also commissioned JP Research & Consulting, Inc.

(Address: 3-7-12 Toranomon, Minato-ku, Tokyo; Representative: Keisuke Furuno, Representative Director), an independent research organization, to conduct an investigation. The report they produced states that there are no facts that indicate Sixjoy is involved with antisocial forces. Based on the above, the Company determined that Sixjoy, Tencent, their officers and major shareholders have no relationships with antisocial forces.

  • Title: Sony Interactive Entertainment Inc.
  • Location: 1-7-1, Konan, Minato-ku, Tokyo
  • Title / Name of Representative: Jim Ryan, Representative Director and President
  • Business Contents:
    • Planning, development, and sales of hardware, software, content, and network services for PlayStation [40,966 articles]” href=”https://www.gematsu.com/platforms/playstation”>PlayStation.
    • Planning, development, and sales of “toio,” software, and content.
  • Capital: 110,000,000 yen
  • Date of Establishment: April 1, 2010
  • Major Shareholders and Their Shareholding Ratios:
  • Relationship Between the Listed Company and the Relevant Company:
    • Capital Relationships:
      • Sony, the parent of the relevant company, is a holder of 2,844,950 shares (ratio of ownership voting rights: 2.01%) of the Company’s stock (as of the end of March 2022).
    • Personnel Relationships:
    • Business Relationships:
      • The Company engages in transactions such as the sale and purchase of finished products and services with Sony and its affiliated companies.

(Note) In the share subscription agreement entered into with SIE, the Company and FromSoftware received a representation and warranty from SIE that it and its officers are not an antisocial force and they have no relationships with antisocial forces in reference to the share subscription agreement. Sony, the parent company of SIE, is listed on the Tokyo Stock Exchange. By confirming its basic stance for the elimination of antisocial forces and establishment of relevant systems therefor, which were referred to as matters concerning the internal control systems in the Corporate Governance Report that Sony submitted to the Tokyo Stock Exchange, Inc. on July 5, 2022 the Company determined that Sony and its officers had no connection whatsoever with antisocial forces.

6. Schedule for the Third-Party Allotment

  • Resolution of the Board of Directors and General Shareholder Meeting of FromSoftware: August 31, 2022
  • Date of Share Subscription Agreement Regarding the Third-Party Allotment: August 31, 2022
  • Payment Period: From September 7, 2022 to September 12, 2022

(Note) Payment for this third-party allotment is scheduled to be made on September 7, 2022.

7. Future Outlook

The Company believes that the Third-Party Allotment will contribute to the medium- to long-term improvement of the Group’s corporate value, while the impact of the Third-Party Allotment on the Company’s consolidated financial results for the fiscal year ending March 31, 2023 is expected, at the time of this report, to be minor. When there is a need for the disclosure of information, the Company will promptly provide the information.

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Business

Tencent looks to short video ads to boost revenue amid gaming slump

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Tencent runs the ubiquitous Chinese messaging app WeChat. The company has a short form video feature with in the app and has began to monetize that through video ads in the feed. Tencent said such ads could become a “substantial” source of revenue in the future.

Budrul Chukrut | Sopa Images | Lightrocket | Getty Images

Tencent said advertising in its nascent short video platform could become a “substantial” revenue source in the future, even as other areas of its business — such as gaming — face pressure.

The focus on this advertising product from one of China’s biggest technology giant puts it in direct competition with the country’s two leading short video players: ByteDance’s Douyin, the Chinese cousin of TikTok as well as Kuaishou.

On Wednesday, Tencent reported its first ever year-on-year quarterly revenue decline as its gaming business faced headwinds. Tighter tech regulation, Covid’s resurgence and the subsequent economic weakness in China weighed on the overall company.

Tencent runs China’s most popular messaging app called WeChat which has over one billion users. There is a short video platform built within WeChat. Users can scroll through different videos. In July, Tencent for the first time began serving ads to users in that service it calls video accounts.

The company said it will release more video ad inventory this month.

Video ads will eventually grow into a substantial revenue source for us over time.

Martin Lau

President, Tencent

On Wednesday, Tencent spent a large part of the opening of the earnings call explaining the potential of video ads, underscoring how important the revenue stream could be.

“Video accounts has become one of the most popular short video services in China with substantial user engagement,” Martin Lau, president of Tencent, told analysts.

“Strategically, they allow us to expand our ad market share. As advertisers have already been spending aggressively on multiple short-form video platforms, we should be able to capture more advertising budgets.”

Lau said it took five quarters for WeChat Moments, a social feature where users can post pictures, videos and status updates, to reach 1 billion yuan ($147.42 million) in quarterly advertising revenue. He said that Video accounts will reach that goal more quickly given the “current size of traffic and already strong advertiser demand for short form video ads.”

“Video ads will eventually grow into a substantial revenue source for us over time,” Lau said.

Tencent’s online ad revenue in the second quarter fell 18% year-on-year to 18.6 billion Chinese yuan as macroeconomic issues in China led to brands cutting budgets.

The Shenzhen-headquartered company is hoping video ads can help boost the division over the coming quarters.

Competition rises

Tencent’s foray into short video is relatively new and it it is now looking to step up the challenge to TikTok’s Chinese version Douyin as well as Kuaishou.

The market potential could be big.

Revenue from short form video accounts for around 39% of China’s total digital ad revenue, according to data from QuestMobile. It is the biggest single ad revenue category ahead of categories like social networking and news.

Many of China’s technology giants have turned toward short video and livestreaming to unlock new revenue streams.

James Mitchell, Tencent’s chief strategy officer said the revenue potential “per minute of time spent” on video accounts will be higher than Moments.

Companies like Alibaba have tried to use livestreaming and short-form video as a way of generating sales on its e-commerce platform. An influencer might advertise products via video and users can click items in the video to buy.

When asked by one analyst if Tencent will move in this direction, Lau said e-commerce livestreaming is an “opportunity” but it “will take some time.”

Lau said Tencent will need to build up awareness of the video product, then onboard merchants and advertisers.

“We will try to do it on a stage-by-stage basis,” Lau said, referring to the development of video accounts.

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Technology

Activision Making More Off Phone Games Than Console And PC

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Image: Activision / Blizzard / King / Kotaku

Here’s a sign of the times: Activision has confirmed via newly released financial documents that it made more money on its phone games last quarter than it did on all of its console and PC games combined.

As spotted by TweakTown, Activision’s quarterly report was published last week and sheds some light on how its biggest games across PC, console, and mobile are doing financially. And because of games like Diablo Immortal, Call of Duty Mobile, and Candy Crush Saga, the beleaguered Call of Duty publisher’s making a lot of cash off phone games. In fact, more than half of its total earnings for the second quarter of 2022 came from mobile titles and not console or PC games.

According to the report, about 51 percent of Activision’s total earnings from the Q2 2022 period came from mobile games. That adds up to a total of $831 million in mobile game earnings. Meanwhile, its console games earned around $376 million and PC games brought in a bit less, $332 million. Finally, it made $105 million from events and esports.

What you might not expect, especially if you don’t realize how massive mobile gaming has become over the last decade, is that of the $831 million made off phone games, most of it came from King’s titles and not stuff like Call of Duty Mobile. In the report, Activision says that King titles like Candy Crush and Farm Heroes brought in over $680 million.

Read More: Lawyer To Pay Activision For Not Playing Call Of Duty

What these numbers reveal is that for big publishers like Activision, the future is likely one where it invests even more resources and money into mobile games and focuses less and less on console games. In an era where AAA games are more expensive to make than ever, take years to create, and often flop, mobile games have become a lifeline for large game companies looking to keep their heads above water.

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For Activision it’s especially important as Call of Duty continues to lose millions of players and underperform. Seeing as the company has spent years focusing much of its energy on Call of Duty—at one point even having every studio it owned working on the franchise in some capacity—it’s likely it will seek to diversify into mobile more, not less, moving forward.

It should also be noted that Activision’s hugely successful mobile games are one of the main reasons Microsoft began the process of buying the company earlier this year following a huge, public fallout after the company was sued over years of sexual harassment and discrimination.

In some way, Call of Duty and Warcraft are more like bonuses that Xbox gets on top of King and its money-printing games.

   

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