Nintendo Switch, Microsoft, China... The business news of the week

Nintendo Switch, Microsoft, China… The business news of the week

Sales figures, studio purchases, financial statements, developer transfer window, investments… if these topics interest you, you’ve come to the right place. We bring you an update on last week’s business news.

Resume

  • Microsoft lays off 10,000 employees, Xbox division hits
  • The Nintendo Switch reigns in France
  • Video games are declining in China, an event
  • The European Commission wants to negotiate with Microsoft
  • Briefly in the news of the week
  • Our other business items

Microsoft lays off 10,000 employees, Xbox division hits

365 days separate the announcement of the upcoming acquisition of Activision Blizzard King by Microsoft from the announcement of the elimination of 10,000 positions within the group, in addition to the 1,000 jobs lost last October. The rumor appeared a few hours before the announcement but yes, 10,000 of the 220,000 employees from Microsoft were asked to look for another job. That’s 4.5% of the total workforce, and the Xbox division hasn’t been spared.

4 days before the publication of the financial results, the news may seem surprising, the company is doing everything possible to pay the publisher against the sum of 68.7 billion dollars. After experiencing a large payroll increase in recent years, from 144,000 to 220,000 peopleMicrosoft is cutting back to focus on more specific areas, like artificial intelligence.

The official press release does not indicate precisely where the cuts were made, but Bloomberg and Jason Schreier specify that, according to their sources, 343 Industries and Bethesda are the most affected studios. The team that made Halo Infinite’s single-player campaign would be hardest hit, with creative director Joseph Staten leaving 343 Industries for return to previous position on Xbox Game Studios Publishing after coming to reinforce the game. The pill is doing badly, especially for Patrick Wren, who gave Respawn a spin (Apex Legends), who does not mince words about his former managers:

The layoffs at 343 should never have happened and Halo Infinite should be in better shape. The reason for these two events is the incompetence of the leadership during the development of Halo Infinite, which created tremendous stress for those who work hard to make the best Halo possible. The people I worked with every day were passionate about Halo and wanted to do something good for the fans. They helped push for a better Halo and got fired for it. The developers that are still there are working hard to make this dream come true. Look Forge. Be kind to them during this difficult time. And I want to point out how great the multiplayer management team was during development.

Nintendo Switch, Microsoft, China... The business news of the week

Jason Schreier confirms having had similar echoes from other developers, while adding that other issues were noted, including tools used internally and a strong dependency on subcontractors. On the Bethesda Games Studios side, we were also affected by this wave of layoffs, as the release of Starfield looms. Zenimax Online Studios, which runs The Elder Scrolls Online, also lost employees, as did The Coalition (Gears 5). According to Gamekult, these 10,000 layoffs will cost Microsoft $1.2 billionthat it will pay a significant severance pay and that it will provide six months of medical coverage to those affected. Unity, Meta and Amazon have also made significant staff reductions these last months.

The Nintendo Switch reigns in France

Nintendo Switch, Microsoft, China... The business news of the week

Forget the Wii, the new boss home consoles in France, it’s the nintendo switch. Indeed, the Nintendo console has just settled on the throne of its category, as recently indicated. Philippe Lavoué, CEO of Nintendo France, in the newspaper Le Figaro. If it doesn’t (yet) surpass the Nintendo DS, which tops out at over 10 million copies sold, the Switch has just surpass the milestone of 7.09 million copies sold in France, far surpassing the Wii, which had held the record for a good decade with 6.3 million units ahead of the PS4 (6 million). However, the switch falls below the million copy mark for the first time sold (2022), marked by the natural decline in sales, which did not prevent Nintendo from announcing an increase in production of the machine by the year 2023.

Nintendo Switch, Microsoft, China... The business news of the week

In 2022, the success of the machine, although declining, is based on Pokémon Scarlet / Purple (701,000 copies), Pokémon Legends: Arceus (575,000), Mario Kart 8 Deluxe (445,000, Nintendo Switch Sports (425,000 The Switch also continues to prevail) in physical sales with 9 of the top 10 best-selling boxed games in France Note also that according to Philippe Lavoué, More than half of Switch owners in France have bought Mario Kart 8 Deluxe. A statement that is half surprising, the title being systematically present in the Top 5 physical sales in value that SELL publishes every week. You will also find the first Top 5 of the year further down this page (spoiler: Mario Kart 8 Deluxe, Nintendo Switch Sports and Pokémon are present).

Video games are declining in China, an event

China is a very important growth lever for the video game industry and it should continue to be so. However, the restrictions of game approval and improved control on the practice of the youngest consequences in the local market. For the first time in 20 years and the start of the data release, the Chinese market is in decline. This is not really a surprise, since big publishers like Tencent or NetEase have intensified their international activity in anticipation of this decline. In other words, this drop was expected. According to official data from the China Audio and Video Copyright Association, the number of active players is around 664 million.

Nintendo Switch, Microsoft, China... The business news of the week

Unsurprisingly, mobile still accounts for 70% of the Chinese market by 2022, but 14% drop to achieve a turnover of 26.2 billion euros (193.1 billion yuan). A significant drop, marked by the progression of the console market. same price for esports, which fell 14% and registered a turnover of 19,600 million euros. The official document hides the restrictions imposed and the approval of only 44 foreign games after a year and a half of freezing, and bases this drop on Covid-19, foreign competition or concerns related to hiring personnel.

To continue with their growth, the Chinese giants have increased their investments abroad, and there is nothing to indicate that they are going to stop. There is no mention of data related to console progression, but Gamekult reports that the Switch is in the lead, followed by a PS5 that sells much better than the PS4 (670,000 against 250,000 in 72 weeks). According to Niko Partner, consoles should continue to grow and double their turnover compared to 2019, last year “pre-Covid”up to approximately 2,000 million euros.

The European Commission wants to negotiate with Microsoft

Nintendo Switch, Microsoft, China... The business news of the week

More than a year ago, Microsoft formalized its intention to buy Activision Blizzard King. A time-consuming acquisition, both logistically and legally. Besides that, redemption must get approval from regulators, and you don’t win. Some countries have already approved the operation, but the most important markets seem reluctant, without this indicating that the takeover bid will be invalidated. The FTC in the United States filed the file on the position of judges of the administrative courtthe British CMA has postponed its decision in order to deepen its study while indicating that it has reservations, and the European Commission follows the same path.

According to Reuters, the European Union will accelerate the movement will soon publish a list of objections in the form of a warning, which will arrive before the deadline to publish its final decision, which is set for April 11. Obviously, it is not so much a matter of announcing an upcoming blocking of the takeover bid, but of rather encourage Microsoft to sit at the negotiating table to argue and/or make concessions based on the criticisms formulated:

The statement of objections is a formal step in the Commission’s investigations into alleged breaches of EU antitrust rules. The Commission informs interested parties in writing of the objections raised against them. Interested companies may examine the documents in the Commission’s file, respond in writing and request a hearing to present their observations on the case to the representatives of the Commission and the national competition authorities. The sending of a statement of objections and the opening of a formal investigation for anti-competitive practices do not prejudge the outcome of the investigations.

Nintendo Switch, Microsoft, China... The business news of the week

But Microsoft has the support at the European level of the European Games Developer Federation, which brings together thousands of its own studios represented by entities such as the SNJV. This “federation” has published a global document, which supports the takeover while providing many nuances. The EGDF admits that Microsoft has not “always respected in the past the assurances given” and congratulates the European Commission for studying the dossier carefully. However, the EGDF believes that the benefits outweigh the risksand that the takeover bid would allow Microsoft to compete on an equal footing with the competition (including Tencent) in various sectors: consoles, mobiles.

The EGDF, if it supports the acquisition and announces it publicly, has nevertheless listed a number of things to keep or add to keep the positive going. Microsoft is encouraged to continue its work of transparency and openness of their platforms, authorize “controversial” content, continue with their investments, guarantee access to data or even maintain the debate. We note however that the EGDF wants Microsoft to continue to allow web3 games “because they could change the rules of the game and contribute to the emergence of new European platforms.”

Briefly in the news of the week

  • Monster Hunter Rise: Sunbreak has passed the 5 million sales mark.
  • The AGDQ 2023 allowed to collect $2.6 million for the Cancer Prevention Foundation.
  • Deep Rock Galactic now has 5.5 million copies sold worldwide.
  • the unit has laid off 284 peopleand wants to be “more selective” in its investments.
  • Amazon has started laying off 18,000 people in the United States, Canada and Costa Rica
  • God of War: Ragnarok (PS5), dominates the French physical market in value during the first week of the year. It is followed by Mario Kart 8 Deluxe, FIFA 23 (PS4), Pokémon Violet and Nintendo Switch Sports.
  • Detroit: Become Human sold more than 8 million.
  • Nintendo plans to ramp up Switch production in 2023 and is reportedly aiming more than 19 million units shipped.

Our other business items

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