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

Sales figures, studio buyouts, financial statements, developer transfer window, investments… if these topics interest you, you’ve come to the right place. We offer you an update on the business news of the past week.

Summary

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

Microsoft lays off 10,000 employees, Xbox division hit

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 find 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 doing everything to afford the publisher against the sum of 68.7 billion dollars. After experiencing a huge increase in its payroll in recent years, from 144,000 to 220,000 peopleMicrosoft is cutting back to focus on more specific areas, such as artificial intelligence.

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

The layoffs at 343 should never have happened and Halo Infinite should be in better shape. The reason for both of these events is leadership incompetence during the development of Halo Infinite, which created tremendous stress for those working 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 were fired for it. The developers who are still there are working hard to realize this dream. Look at 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 the tools used internally and a strong dependence on subcontractors. On the side of Bethesda Games Studios, we were also affected by this wave of dismissals, while the release of Starfield is looming. Zenimax Online Studios, which handles 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 billionwhich will pay substantial severance pay, and which will provide six months of health coverage to those affected. Unity, Meta and Amazon have also made significant headcount reductions these last months.

The Nintendo Switch reigns over 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. The Nintendo console has indeed just settled on the throne of its category, as recently indicated Philippe Lavoué, General Manager of Nintendo France, in Le Figaro newspaper. If it does not (yet) beat the Nintendo DS which peaks at more than 10 million copies sold, the Switch has just pass the milestone of 7.09 million copies sold in France, largely beating 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 copies 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 for the year 2023.

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

In 2022, the success of the machine, although decreasing, 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 rule unchallenged in physical sales with 9 of the 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 only half surprising, the title being systematically present in the Top 5 of physical sales in value published each week by SELL. You will also find the first Top 5 of the year further down on 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 should remain so. However, restrictions on game approval and enhanced control on the practice of the youngest consequences on the local market. For the first time in 20 years and the start of data publication, the Chinese market is in decline. This is not really a surprise, since large publishers such as Tencent or NetEase have intensified their international activity in anticipation of this decline. In other words, this decline was expected. According to official data from China Audio-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 represents 70% of the Chinese market for the year 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 by 14% and posted a turnover of 19.6 billion 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 decline on the Covid-19, foreign competition or concerns related to the recruitment of personnel.

To continue their growth, the Chinese giants have therefore increased their investments abroad, and nothing indicates that they will slow down. Data related to console progression is not mentioned, but Gamekult reports that the Switch is in the lead, followed by a PS5 which is selling much better than the PS4 (670,000 against 250,000 in 72 weeks). According to Niko Partner, consoles should continue to grow and double its turnover compared to 2019, last “pre-Covid” yearto reach approximately 2 billion euros.

The European Commission would like to negotiate with Microsoft

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

It’s been over a year now since Microsoft formalized its intention to buy Activision Blizzard King. A takeover that takes a lot of time, both from a logistical and legal point of view. On top of that, the redemption must get approval from regulators, and it is not won. Some countries have already approved the operation, but the most important markets seem reluctant, without this indicating that the takeover will be invalidated. The FTC in the United States brought the file on the office of the 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 is following 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 for publishing its final decision, which is set for April 11. Obviously, it is not so much a question of announcing an upcoming blockage of the takeover, but rather to encourage Microsoft to sit down at the negotiating table in order to argue and/or make concessions based on the criticisms made:

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

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

But Microsoft is supported at European level by the European Games Developer Federation, which brings together thousands of studios themselves 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 would allow Microsoft to fight on equal terms with the competition (including Tencent) in several sectors: consoles, mobiles.

The EGDF, if it supports the takeover and announces it publicly, has nevertheless listed a number of things to keep or add so that the positive aspect continues to prevail. Microsoft is encouraged to continue its work on transparency and openness of its platforms, authorize “controversial” content, continue its investments, guarantee access to data, or even maintain the debate. We note all the same that the EGDF wishes that Microsoft continue to allow web3 games “because they could be a game-changer 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 mark in sales.
  • The AGDQ 2023 made it possible to collect $2.6 million for the Prevent Cancer Foundation.
  • Deep Rock Galactic is now 5.5 million copies sold worldwide.
  • Unity has dismissed 284 peopleand wants to be “more selective” about 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 for 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 over 8 million.
  • Nintendo plans to increase Switch production in 2023 and is reportedly aiming over 19 million units shipped.

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