To be frank, sometimes it gets a little predictable covering the games business. Our readership sometimes bemoans the static state of gaming news, but the fact is quite a bit of it is stuff you can see coming a mile away. Very successful two-installment brand is getting a third title? Wow, really? Companies undertake strategic initiatives geared at staying abreast of current trends? Shocking!
We do, however, work in an exciting business in a constant state of flux. And every year, there are developments in news that are unexpected and pleasantly surprising. Here, we present some of the most notable surprises of 2011.
5. Amazon's Kindle Fire
That the most prominent online retailer has been interested in games -- adding its own downloadables and used game program, for example -- makes a lot of sense. But any hardware leap is interesting, particularly in the crowded mobile and tablet space. When Amazon unveiled its new Kindle Fire, it was a strong statement of the total pervasiveness of app stores. Not only that, but it helped seal the concept that games were a crucial part of digital business for retailers in any space.
In advance of the new touch tablet's launch, companies like Electronic Arts, PopCap and Zynga were boldly in support of the device, along with thousands of other gaming apps including Angry Birds, Fruit Ninja and Cut The Rope amenable to the modified Android OS that the Kindle Fire runs.
4. 3DS Bounces Back
The launch of Nintendo's souped-up 3D-ready saw some early troubles: Believed at launch to be priced too high, growth was slow, and an early price cut was uncharacteristic for Nintendo hardware. The release of a cradle that added an extra analog stick looked to many like some kind of mea culpa, quietly: the general consensus was that the hardware released too early, was not ideally designed, was overly high-priced.
That alone was new territory for a company that has a history of surprising the market with product strategies that may seem opaque and little-understood at first, yet have historically borne fruit. But from there it seems many didn't expect just how strong the effect of the company's compensatory measures would be. By the Christmas season, the 3DS was seeing record sales in Japan, with just one week seeing more than half a million units. The surging 3DS ultimately overshadowed the much-anticipated launch of Sony's shiny new, far better-equipped Vita handheld in the country.
3. Team Bondi Collapses
Few games sees as much anticipation as L.A. Noire, from early recognition at New York's prominent Tribeca Film Festival to much publicity for its cutting-edge MotionScan facial recognition technology. With the backing of the gilded Rockstar juggernaut and a boatload of critical acclaim at launch, no one would ever have assumed that Australian developer Team Bondi would be set for anything other than some bonuses and vacation time, especially as the game shipped some 4 million units on consoles as of June.
Yet the revelation that all wasn't well rapidly bubbled up. First there were rumblings of a poor relationship between Rockstar and Team Bondi, with the controversial studio head Brendan MacNamara rumored to be at the root amid mismanagement allegations. Team Bondi developers expressed distress at being excluded from the credit, and after a period of arbitration came the news that the developer would close. It reportedly owes employees some $1.4 million in unpaid wages and bonuses -- talk about bittersweet success.
2. PopCap Acquired By EA
As the most successful casual gaming company, PopCap's has only seen its independent success compound over the years. Rumors of the company as acquisition target have swirled numerous times over the years, but PopCap has always been in an enviable position: It owns its own IP and was ahead of the digital publishing, casual and social gaming curves, and many thought the company had no need to sell itself to anyone.
Electronic Arts has made no secret in recent years of its aims to play as strongly as it can in the social, digital and casual spaces; the publishing giant has a massive physical footprint, but mainly chose to adapt to new business transitions through acquisitions. Anyone would have expected the company to want PopCap, especially amid rumors that pegged a potential buy at up to $1 billion.
PopCap took a deal with EA ultimately worth $750 million with a $550 million potential earnout. It wasn't the money that appealed most strongly to the publisher; we were told the company most valued EA’s massive infrastructure and focus on generating new cross-platform digital IP. “We’ve essentially created an environment where they get a lot more bang for their buck,” explained EA CEO John Riccitiello.
1. Zynga's Muted IPO
The rest of the game industry could say whatever it wanted about the metrics-driven design of the social gaming space, but for the past few years Zynga has virtually printed money on its meteoric rise to dominance over the Facebook platform. The company’s long-awaited IPO was expected to act as a watershed moment for the market, a milestone for the mainstreaming of social games as a muscular industry.
But even before Zynga became ZNGA, analysts like Sterne Agee and Cowen & Company were less then excited, rating the stock “Underperform” and “Neutral”, respectively. The company was valued at $7 billion and priced its initial offering at $10 per share -- but has since malingered below that line. As of press time it’s worth $9.50 per share, but it’s seen valuations as low as the $8 range over the holiday period.
News reports cast uncertainty on Zynga’s management and operational future the company’s communications skills haven’t yet been able to dispel, while visible over-valuation cases like Groupon seem to have made many investors wary of voting with their money behind a trendy digital business.
For months it seemed the company had a road paved to easy street, but the generally-muted IPO has surprised many with an important message of care in a hot new space.