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At Gamescom, it felt like the industry now has a plan: make games quicker | Opinion
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At Gamescom, it felt like the industry now has a plan: make games quicker | Opinion

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Up in the enormous halls of the northern half of Koelnmesse, the crowds are still being wowed by glitzy stands and demos of the latest games, not least the long-awaited Hollow Knight: Silksong.

But in the southern half, the business-only section of the show is drawing to a close. And having spent the past four days dashing between appointments with CEOs and developers, there is one sentiment that has remained consistent among almost everyone I spoke to.

We need to make games quicker.

It’s refreshing to hear. After months and months of gloom and panic across the industry, as layoff announcements arrive as regularly as bad-news buses, it feels as if everyone has finally centred on a plan.

Shorter development times will of course mean lower costs

It’s a simple one. Rather than spending half a decade or more working endlessly on one title, the idea is to instead make games in one or two years, maybe three at max. And if they’re not quite polished enough for a full release by then, they can be popped into early access instead.

By far the biggest expense when making games is salaries, so shorter development times will of course mean lower costs – in theory. And that means not betting the farm on every single release.

If a game that’s been in development for two years fails to land at launch, it’s still a big blow. But it’s nothing like the existential crisis of launching a flop that’s been in the works for five, six, seven years.

There’s the advantage, too, that quickly made games can be adapted to suit current trends, avoiding the pain of, say, launching a live-service shooter years after the genre has been saturated.

Almost everyone at Gamescom thought games need to be made more quickly

Of course, it’s one thing to say you want to make games more quickly, and quite another to actually do it. More to the point, how do you do it?

One option is to make games that look worse. Given how super-detailed graphics seem to be far less important to a younger generation raised on Roblox and Minecraft, this would seem like a fair enough strategy.

Why bother spending days, weeks, or even months modelling super-realistic satsumas when your audience would be satisfied with a crude orange daub?

Yet there seemed to be little appetite for this strategy among the people I spoke to at Gamescom. Perhaps it’s an unwillingness to fly in the face of conventional wisdom in an industry where frame rates are often fetishised. Perhaps it’s more about simple pride in the craft.

So what’s the alternative? One option is to use AI to speed up the development process. And it’s an option that more and more studios are taking up.

AI is the games industry’s dirty little open secret – the majority of people I spoke to said they were using AI in some form or another.

Very few were employing AI to generate finished assets for a game, the kind that gets you that shameful little ‘AI Content’ label on Steam. But many were using it at some point in the development process.

AI is the games industry’s dirty little open secret

Utilising AI to generate snippets of code was a popular choice. In addition, a fair few people are using AI to generate concept art early in the process, letting them quickly iterate ideas.

Everyone was adamant that AI should be used as a helper tool, rather than as a replacement for human skills.

Some people were quite open about the use of AI in their games. Others were far more coy, going rigid when the dreaded word came up, as if worried their secret might come out.

They have reason to be afraid. The outrage caused by a snippet of AI-generated text being found in The Alters – along with the more serious problem of poorly AI-localised text – is one example of why developers are wary of talking openly about AI.

The Krafton booth at Gamescom – the company has been public about the use of generative AI in Inzoi

Yet the fact is that AI is already in widespread use across the games industry – and it seems absurd for developers to live in fear forever. What’s needed is an open discussion of how AI should be best used. What’s needed are agreed best-practice guidelines.

For example, should AI-generated art be off-limits in finished games? Or is it fine as long as the data set is trained on assets wholly owned by the studio? These are the kinds of questions that need to be discussed.

The next few years will entail a process of collectively deciding how to proceed. But love it or hate it, it’s quite clear that AI isn’t going away any time soon.

Whether AI actually enables games to be made more quickly, however, remains to be seen. I have my doubts – the temptation with effort-saving technology like this is always to do more, rather than do it quicker.

Maybe the goal of making games faster will take a while to achieve, and might well require a change in thinking. But at least everyone has agreed on a plan.



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Is whale-chasing a viable strategy in an era of recession? | Opinion
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Is whale-chasing a viable strategy in an era of recession? | Opinion

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Talk of an impending consumer spending recession and its likely impact on games has been widespread for a few months now, and every new data point only seems to further confirm that the belt-tightening is already underway for many of the industry’s most important target demographics.

The tenor of the conversations around this worrying topic have started to shift accordingly, from the theoretical – is a spending decline going to happen? – to the strategic – how can companies best prepare themselves to weather the storm?

There’s no one ideal strategy for handling a widespread downturn. Some companies are more exposed than others, either because their consumers are in the groups most likely to cut spending, or because the business itself is already skirting close to the financial cliffs in some terms.

One key effect of a downturn is that it amplifies the cost of failure and jacks up the risk profiles of every venture: a wrong turn that was survivable in good times can sink a company in lean years.

Other companies, however, are more insulated from these effects, like those with strong recurring revenues from loyal player communities, for example, or those addressing underserved niche markets.

The strategy that will successfully guide a company through an economic storm therefore needs to be tailored to the company, to its products, and to its audience – not to mention to its investors, whose stomach for risk and willingness to fund projects through a rough period must be carefully and coldly assessed.

Despite that need for diverse and flexible approaches, there are of course some ideas that come up time and time again in such discussion.

Image credit: Epic Games

One of them is the notion that free-to-play games will be better insulated from recession effects than premium games.

This idea seems borne out in data that shows spending dropping off most steeply in younger cohorts, who continue to engage with F2P titles while pulling back from spending on the premium games preferred by their older peers.

There’s concrete logic behind this assertion. If consumers are tightening their belts, they’ll be looking for the most cost-effective entertainment options, and it can’t just be all doomscrolling, all the time (at least, for all our sanity, let’s hope it can’t).

F2P games with generous free tiers are hard to argue with as a value proposition in those terms.

That’s true at any time, of course, but it’s an even more powerful effect in hard economic times, when the psychological barrier to paying a large amount up front for a game (whose quality or longevity you can’t know for sure at the point of purchase) becomes even tougher to overcome.

In this climate, a game that takes a generous approach to F2P and lets a lot of people play and enjoy themselves to a significant degree, while giving them options to pay for various extra features or content, has a proposition that’s significantly easier for belt-tightening consumers to get on board with.

This isn’t to say that all F2P games will thrive in that environment, of course; the flipside is that games which are too aggressive or tight-fisted in their monetisation strategies will be even more severely punished than usual by players who are engaging with those games precisely because they’re trying to economise.

There’s another aspect to F2P games that also seems well-suited to the economy we’re now entering – although it seems to have become a little bit of a taboo in some circles.

Only a few years ago, there were lots of articles and interviews doing the rounds where people candidly talked about the importance of chasing “whales” – big spenders who drop hundreds or thousands of dollars in F2P titles.

Image credit: Digital Extremes

Many games built their business models around those players, happy for the vast majority of players to pay little or nothing as long as some small fraction of them converted into high-rolling whales.

Those discussions are all but gone from public view (and even at the time, smarter commentators in the space made it clear that they were uncomfortable with the “whale” label, even if not with the concept itself).

People realised that talking about players dropping such large amounts of cash on F2P games just wasn’t a good look, I guess; but even if the public lionising of such strategies disappeared, the strategies themselves certainly didn’t.

I suspect that whale-chasing will be one of the strategies many companies explore as they seek to survive this recession. That may seem counter-intuitive – in a tough economic climate, lowering prices and offering better value is the obvious move, whereas trying to get people to drop massive amounts of money on frivolous items in games sounds a bit insane.

However, the shape of the economic changes we’re seeing right now isn’t evenly distributed. The recession is primarily impacting the lower end of the market; big spenders are still very much spending big.

“Many games [were] happy for the vast majority of players to pay little or nothing as long as some small fraction of them converted into high-rolling whales”

This isn’t restricted to games by any means; as lower-income groups batten down the hatches, an increasingly large percentage of consumer spending in most developed economies is coming from a relatively small pool of high income households. Luxury goods companies are forecasting solid growth in the coming years even as commodity retailers’ forecasts decline.

It’s not as simple as just slapping a higher price tag on things and expecting high spenders to whip out their credit cards, of course.

Appealing to higher end consumers requires strategic thinking. How do you make something in your game feel luxury and high-status to consumers who value those things?

Items that let players show off their high status – rather than just letting them short-cut investments of time or effort in the game – are a key way to do this, and F2P games have an in-built advantage with that kind of item.

Since they let most of their players in for free, the high-spending players have a large audience of low-spending players to whom they can “flex” their purchased, high-status items. As more and more low-income people turn to free games as a cost-effective form of entertainment, that opportunity will only grow.

By comparison, premium games can’t really do the same thing – some of them try to, but it’s generally a disastrous idea, because the psychology just doesn’t work the same way.

Players who have paid up front for a game aren’t in that game to be flexed on by higher-spending whales, whereas non-paying players in F2P games more or less accept this as part of the price of entry (albeit that there are still lines in the sand, especially with pay-to-win type items).

Introducing business models that let some players spend potentially thousands of dollars (especially on gacha style mechanisms) to flex on other players risks collapsing basic purchase revenues in a paid-for game – even at best it would be an absolute bonfire of player goodwill.

To be clear, the ethics of this approach have always been an absolute tarpit, and tough economic times will only make that worse.

There’s a whole body of research into people’s spending habits with high-status items and brands which makes it clear that the consumers most likely to be drawn into high spending patterns on these items are very often those who can least afford it.

“As more and more low-income people turn to free games as a cost-effective form of entertainment, that opportunity will only grow”

Discussion of whale-oriented mechanisms faded from view largely because the volume of stories about people who were vulnerable to these kinds of strategies – especially children, but also people who simply struggled with impulse control and inability to delay gratification – getting into serious financial trouble as a result became impossible to ignore. The parallels to problems like gambling addiction are uncomfortable and not easily dismissed.

Nonetheless, the potential of this strategy to insulate companies from recession effects mean that it will be on the table in many discussions, and I suspect the stories of whale spending will creep back into industry discourses in the coming years.

It will be important not to draw the wrong conclusions from those narratives. The fact that a small number of players are spending thousands of dollars on F2P items and currencies has sometimes been interpreted as a sign that pricing for standard games is “leaving money on the table”, when in fact it indicates exactly the opposite.

Wealthy people (or people making poor financial choices) spending big in these games to flex on legions of free or low-spending players is not a suggestion that there’s a whole untapped market of people with a burning desire to spend more on videogames.

On the contrary, it’s a recession indicator – and no coincidence that it will be back on the menu in an era of recession.



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Xbox and Windows are no longer at arm's length | Opinion
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Xbox and Windows are no longer at arm’s length | Opinion

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When Microsoft first announced its intention to enter the games console market almost exactly 25 years ago, there was a widespread assumption that the Xbox would essentially be a stalking horse for the Windows operating system.

It seemed like a strategic move designed to ensure that, as powerful multimedia devices took over people’s living rooms, they would be an extension of the Windows PC rather than the ambitious new ecosystem which Sony was trying to construct around the PlayStation.

The form of the original Xbox seemed to confirm that assumption: built around relatively standard PC components, its operating system was an extremely stripped down version of Windows, with games being built on a variation of Windows’ DirectX frameworks.

Over the years, however, the expectation that the Xbox and Windows would essentially become joined at the hip never quite came to pass. Bits and pieces of Xbox’s branding and services offerings were built into Windows, but they never fully overlapped – not least, perhaps, because the battle for the living room that Microsoft had anticipated never really materialised, with PlayStation ultimately focusing on being more of a pure gaming play, and Microsoft’s most serious flirtation with multimedia functionality almost entirely sinking the Xbox One console.

A quarter century on from the original Xbox, however, Microsoft finally seems determined to bring Xbox and Windows together in a way that makes them more or less into a contiguous platform.

We had a few announcements over the past couple of weeks that don’t quite amount to an unveiling of the next generation of Xbox, but do at least point the way to what that will look like. We know that Microsoft has inked a long-term deal with AMD to continue providing components for its consoles – confirmation, if any were needed, that it’s quite serious about staying in the hardware business.

We also know, however, that the company is looking at providing Xbox services and compatibility to handheld gaming devices from third-party companies as well as building its own handheld Xbox, strongly suggesting that it envisages a future for Xbox that encompasses both Microsoft hardware and third-party licensed hardware.

Most tellingly of all, we also got a confirmation that the next-gen Xbox is going to be a much more flexible device than any previous console – it will not be locked to a single store, according to Xbox president Sarah Bond, who also fairly clearly stated that she sees the role of the next-gen Xbox being about ensuring Windows’ dominance of the gaming market.

The era in which Xbox and Windows were held at arm’s length from one another is apparently over; Xbox devices are going to be very explicitly considered as part of the Windows gaming ecosystem in future.

That all of this has been revealed in a somewhat piecemeal manner does seem to suggest that Microsoft is still trying to ease its core fans into this new reality, introducing new aspects of the strategy gradually to avoid the impression that it’s pivoting away from console gaming entirely.

If the company is serious about Xbox devices running Windows, then it also needs to be serious about how that version of Windows will be optimised and stripped down

Some people will still draw that conclusion, and honestly, it’s not entirely unfair – it just depends on how you define a “console”, because the next generation of Xbox hardware is likely to be the most expansive yet, comprising both handheld and home console models, but also likely to be the most similar to a range of gaming-focused Windows PCs.

Does an Xbox interface running over the top of Windows turn the device into a console? Probably not. But on the other hand, does quibbling over the definition of a console actually matter to very many people?

Still, there are reasons to be concerned about this approach, both for developers and for consumers. An Xbox ecosystem encompassing many devices with many different specifications, created by many different companies, is a tricky moving target for developers – very different from the static target of a console, or even the bifurcated target that Microsoft has presented with Xbox Series X and S.

That’s not an insoluble problem, but it’s a problem no less, especially if some consumers end up feeling like their Xbox makes them a second class citizen compared to someone else’s Xbox.

Arguably the bigger concern is that Windows doesn’t exactly have a sterling reputation for gaming performance on lower-end systems – like handheld consoles.

Only a few weeks ago we got confirmation that installing Valve’s Steam OS on handheld gaming devices could massively improve performance over having Windows on them – that story was very widely picked up and spurred a fair bit of criticism of how Microsoft has approached tailoring Windows for these devices, which makes the timing of this most recent announcement a bit awkward.

If the company is serious about Xbox devices running Windows, as it seems to be, then it also needs to be very serious about how that version of Windows will be optimised and stripped down.

Devices that chew through battery life, drag down frame rates, and run uncomfortably hot because of a heavy desktop operating system draining their resources will find it hard to compete in a market against more nimble competitors, whether they’re powered by Valve’s gaming-centric OS or simply in the form of Nintendo’s Switch 2.

Nonetheless, it’s hard to argue that Microsoft’s approach won’t work, for one key reason – it automatically has the buy-in of one of the world’s biggest and most important publishers.

Before Microsoft spent the best part of $100 billion buying out key publishers and developers, a move like this would have been risky, forcing the company to go cap in hand to third party publishers to try to drum up support. Now, although it’s not without inherent risk, it’s guaranteed to have a steady stream of major games for the new Xbox devices and for the Game Pass subscription service that will unite them. The software problem has been solved with some very dramatic chequebook moves, and that changes the competitive landscape in a way that has little to do with hardware design or strategy.

As we await more details of what these new Xboxen will look like, however, one major strategic question remains very pressing: who does Microsoft actually see as its rivals in this space? Perhaps it’s Sony, as it has historically been. More likely it’s Valve, whose Steam OS and Steam store poses a genuine competitive threat to some core parts of Microsoft’s business.

Yet competition is not a simple thing in this space any more. Microsoft’s publishing business is closely tied to the PlayStation, creating a symbiotic link between the companies. And although it was not directly stated, the implication of this week’s announcements was that Valve’s Steam store could actually be available on future Xbox devices.

Perhaps Microsoft’s real strategy is not to have any straightforward rivals – to treat the Xbox and its publishing business as an opportunity to lift all boats and profit in many different ways. If so, it’s that strategic vision, more than any other aspect of the next Xbox, that could really reshape the industry for the long term.



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SAG-AFTRA files an unfair labor practice for AI Darth Vader in Fortnite
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As AI faces court challenges from Disney and Universal, legal battles are shaping the industry’s future | Opinion

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In some regards, the past couple of weeks have felt rather reassuring.

We’ve just seen a hugely successful launch for a new Nintendo console, replete with long queues for midnight sales events. Over the next few days, the various summer events and showcases that have sprouted amongst the scattered bones of E3 generated waves of interest and hype for a host of new games.

It all feels like old times. It’s enough to make you imagine that while change is the only constant, at least it’s we’re facing change that’s fairly well understood, change in the form of faster, cheaper silicon, or bigger, more ambitious games.

If only the winds that blow through this industry all came from such well-defined points on the compass. Nestled in amongst the week’s headlines, though, was something that’s likely to have profound but much harder to understand impacts on this industry and many others over the coming years – a lawsuit being brought by Disney and NBC Universal against Midjourney, operators of the eponymous generative AI image creation tool.

In some regards, the lawsuit looks fairly straightforward; the arguments made and considered in reaching its outcome, though, may have a profound impact on both the ability of creatives and media companies (including game studios and publishers) to protect their IP rights from a very new kind of threat, and the ways in which a promising but highly controversial and risky new set of development and creative tools can be used commercially.

A more likely tack on Midjourney’s side will be the argument that they are not responsible for what their customers create with the tool

I say the lawsuit looks straightforward from some angles, but honestly overall it looks fairly open and shut – the media giants accuse Midjourney of replicating their copyrighted characters and material, and of essentially building a machine for churning out limitless copyright violations.

The evidence submitted includes screenshot after screenshot of Midjourney generating pages of images of famous copyrighted and trademarked characters ranging from Yoda to Homer Simpson, so “no we didn’t” isn’t going to be much of a defence strategy here.

A more likely tack on Midjourney’s side will be the argument that they are not responsible for what their customers create with the tool – you don’t sue the manufacturers of oil paints or canvases when artists use them to paint something copyright-infringing, nor does Microsoft get sued when someone writes something libellous in Word, and Midjourney may try to argue that their software belongs in that tool category, with users alone being ultimately responsible for how they use them.

If that argument prevails and survives appeals and challenges, it would be a major triumph for the nascent generative AI industry and a hugely damaging blow to IP holders and creatives, since it would seriously undermine their argument that AI companies shouldn’t be able to include copyrighted material into training data sets without licensing or compensation.

The reason Disney and NBCU are going after Midjourney specifically seems to be partially down to Midjourney being especially reticent to negotiate with them about licensing fees and prompt restrictions; other generative AI firms have started talking, at least, about paying for content licenses for training data, and have imposed various limitations on their software to prevent the most egregious and obvious forms of copyright violation (at least for famous characters belonging to rich companies; if you’re an individual or a smaller company, it’s entirely the Wild West out there as regards your IP rights).

In the process, though, they’re essentially risking a court showdown over a set of not-quite-clear legal questions at the heart of this dispute, and if Midjourney were to prevail in that argument, other AI companies would likely back off from engaging with IP holders on this topic.

To be clear, though, it seems highly unlikely that Midjourney will win that argument, at least not in the medium to long term. Yet depending on how this case moves forward, losing the argument could have equally dramatic consequences – especially if the courts find themselves compelled to consider the question of how, exactly, a generative AI system reproduces a copyrighted character with such precision without storing copyright-infringing data in some manner.

The 2020s are turning out to be the decade in which many key regulatory issues come to a head all at once

AI advocates have been trying to handwave around this notion from the outset, but at some point a court is going to have to sit down and confront the fact that the precision with which these systems can replicate copyrighted characters, scenes, and other materials requires that they must have stored that infringing material in some form.

That it’s stored as a scattered mesh of probabilities across the vertices of a high-dimensional vector array, rather than a straightforward, monolithic media file, is clearly important but may ultimately be considered moot. If the data is in the system and can be replicated on request, how that differs from Napster or The Pirate Bay is arguably just a matter of technical obfuscation.

Not having to defend that technical argument in court thus far has been a huge boon to the generative AI field; if it is knocked over in that venue, it will have knock-on effects on every company in the sector and on every business that uses their products.

Nobody can be quite sure which of the various rocks and pebbles being kicked on this slope is going to set off the landslide, but there seems to be an increasing consensus that a legal and regulatory reckoning is coming for generative AI.

Consequently, a lot of what’s happening in that market right now has the feel of companies desperately trying to establish products and lock in revenue streams before that happens, because it’ll be harder to regulate a technology that’s genuinely integrated into the world’s economic systems than it is to impose limits on one that’s currently only clocking up relatively paltry sales and revenues.

Keeping an eye on this is crucial for any industry that’s started experimenting with AI in its workflows – none more than a creative industry like video games, where various forms of AI usage have been posited, although the enthusiasm and buzz so far massively outweighs any tangible benefits from the technology.

Regardless of what happens in legal and regulatory contexts, AI is already a double-edged sword for any creative industry.

Used judiciously, it might help to speed up development processes and reduce overheads. Applied in a slapdash or thoughtless manner, it can and will end up wreaking havoc on development timelines, filling up storefronts with endless waves of vaguely-copyright-infringing slop, and potentially make creative firms, from the industry’s biggest companies to its smallest indie developers, into victims of impossibly large-scale copyright infringement rather than beneficiaries of a new wave of technology-fuelled productivity.

The legal threat now hanging over the sector isn’t new, merely amplified. We’ve known for a long time that AI generated artwork, code, and text has significant problems from the perspective of intellectual property rights (you can infringe someone else’s copyright with it, but generally can’t impose your own copyright on its creations – opening careless companies up to a risk of having key assets in their game being technically public domain and impossible to protect).

Even if you’re not using AI yourself, however – even if you’re vehemently opposed to it on moral and ethical grounds (which is entirely valid given the highly dubious land-grab these companies have done for their training data), the Midjourney judgement and its fallout may well impact the creative work you produce yourself and how it ends up being used and abused by these products in future.

This all has huge ramifications for the games business and will shape everything from how games are created to how IP can be protected for many years to come – a wind of change that’s very different and vastly more unpredictable than those we’re accustomed to. It’s a reminder of just how much of the industry’s future is currently being shaped not in development studios and semiconductor labs, but rather in courtrooms and parliamentary committees.

The ways in which generative AI can be used and how copyright can persist in the face of it will be fundamentally shaped in courts and parliaments, but it’s far from the only crucially important topic being hashed out in those venues.

The ongoing legal turmoil over the opening up of mobile app ecosystems, too, will have huge impacts on the games industry. Meanwhile, the debates over loot boxes, gambling, and various consumer protection aspects related to free-to-play models continue to rumble on in the background.

Because the industry moves fast while governments move slow, it’s easy to forget that that’s still an active topic for as far as governments are concerned, and hammers may come down at any time.

Regulation by governments, whether through the passage of new legislation or the interpretation of existing laws in the courts, has always loomed in the background of any major industry, especially one with strong cultural relevance. The games industry is no stranger to that being part of the background heartbeat of the business.

The 2020s, however, are turning out to be the decade in which many key regulatory issues come to a head all at once, whether it’s AI and copyright, app stores and walled gardens, or loot boxes and IAP-based business models.

Rulings on those topics in various different global markets will create a complex new landscape that will shape the winds that blow through the business, and how things look in the 2030s and beyond will be fundamentally impacted by those decisions.



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Xbox's handhelds have Valve in their sights, not Nintendo | Opinion
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Xbox’s handhelds have Valve in their sights, not Nintendo | Opinion

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Microsoft has revealed its first Xbox co-branded handhelds, the ROG Xbox Ally and Ally X, both collaborations with Asus. They will launch in the holiday period of 2025, with pricing information not yet revealed.

The Xbox Ally is being pitched as a “great value” generalist device, while the Xbox Ally X is described as an “ultimate high-performance” handheld for more demanding players, not dissimilar to how Asus’ existing ROG Ally and Ally X handhelds are pitched. Both use AMD processors.

These Windows 11-enabled handhelds include Xbox-branded buttons, a gaming-focused interface, and an aggregated library feature that brings players’ software together from across different PC storefronts, as well as the subscription library of Xbox Game Pass.

On top of playing PC games natively, the two handhelds can stream players’ console libraries using Xbox Cloud Gaming and Remote Play.

The interface will be familiar to anyone who’s owned an Xbox console in the past decade or so. The ‘Xbox full screen experience’ apparently optimises the Ally and Ally X specifically for gameplay functionality. Non-essential tasks are deferred by the device, dedicating more resources to playing games, according to Microsoft.

The contoured grips of the console were apparently designed with the principles behind Xbox’s wireless controllers in mind. Accessibility features from Xbox and Windows will be carried over to the handhelds. Xbox Play Anywhere – where a single game purchase functions across PC, console, and cloud gaming – extends to these devices too.

Each handheld has a dedicated Xbox button to bring up the Game Bar and switch instantly between apps and games, too.

Launch territories for the Xbox Ally and Ally X are Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Saudi Arabia, Singapore, Spain, Sweden, Switzerland, Thailand, Turkey, the United Arab Emirates, the United Kingdom, and the United States.

Xbox says other territories where ROG Ally products are currently available will follow.

So: what does Microsoft’s messaging tell us about who it’s targeting with the two handhelds?

The Windows factor

The ROG Xbox Ally and Ally X further Microsoft’s objective for players’ game libraries to come with them no matter which device they’re using. For players with both a PC and Xbox console, plus a Game Pass subscription, the way save data is synced seamlessly between the two is something to behold. A handheld device enables Xbox to extend that ecosystem one step further, which will be welcome to diehard users.

But the goal here goes much further than that, and this is where the Windows 11 element of the new handhelds is crucial.

Windows is talked up by Microsoft as a major plus in the announcement, with careful wording – “because these handhelds run Windows, you have access to games you can’t get elsewhere, so you can enjoy the full freedom and versatility of PC gaming all straight from the Xbox experience” – feeling like it has Valve firmly in its sights.

The Steam Deck, which kicked off the current wave of PC handhelds, plays games via the Linux-based SteamOS. While it’s excellent at running games directly from the Steam library, it’s not particularly flexible when it comes to installing and running games from other storefronts (unless you’re prepared to tinker with the device). It’s also only available to buy from Steam itself.

Microsoft clearly identifies an opportunity to offer a more wide-ranging device to PC players out of the box, while courting its existing console audience with the Xbox branding.

Superficially, Microsoft and Asus have just made two new versions of the ROG Ally that happen to have an Xbox button on them. But the opportunity here for Xbox is in positioning: the gulf between more specialist PC handhelds (the Steam Deck has sold around 4 million units, according to analysts) and Nintendo’s mass market Switch (150 million sold) is enormous. Could Microsoft bridge the gap between those audiences?

The PC gaming handheld space is still relatively new, after all. Having two devices with different specs, too, nicely mirrors Microsoft’s own strategy with the Xbox Series S and X, and isn’t something Nintendo or Sony have tried before with their handheld launches.

Ampere Analysis’ Piers Harding-Rolls shared his thoughts on Microsoft’s approach on LinkedIn. “This partnership shows Microsoft’s increasing commitment to the PC gaming market, and its intent to protect and expand the role of Windows as the dominant gaming platform,” he said.

“A lot of Microsoft’s recent work in Game Pass has been more directly focused on the PC gaming space, as it believes this is where there is a substantial opportunity to grow its audience reach compared to console.”

Harding-Rolls believes that teaming up with Asus has allowed Xbox to leverage the company’s trust with PC gamers, accelerate its entry into the market, deepen the integration with Windows and Xbox services, and counter the growing influence of Valve’s handhelds.

According to Harding-Rolls, Windows PC handhelds sold 1.2 million units by the end of 2024.

The key unknown, of course, is price. The cheapest model of Steam Deck retails for $399. Asus has not made a handheld that cheap, with the original ROG Ally launching at $600 before dropping in price.

Priced reasonably, Xbox could court both its existing console players and PC users enticed by a Windows handheld tailored for games. But we’re in a landscape where home console prices have been going up, not down. And given its specs and capabilities, per IGN’s hands-on, the Xbox Ally X simply will not be cheap.

Still, with the Switch 2 having launched this week, this announcement leaves the handheld gaming market in a more interesting state than it’s been in years. And with the PS5 dominating the home console market this generation, it’s exciting to see Xbox pick a different fight with its new hardware.



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Can Switch 2 break Nintendo's sequel curse? | Opinion
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Can Switch 2 break Nintendo’s sequel curse? | Opinion

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Midnight sales events, long queues, pre-orders sold out in minutes; the long-awaited arrival of the Switch 2 really has the atmosphere of great console launches of the past.

After the muted, pandemic-era launches of the PS5 and Xbox Series X/S consoles, a big, high-profile hardware launch like this is a shot in the arm for the whole industry – a much-needed boost in an era of growing concern over how the next few years are going to shake out economically.

One factor that the Switch 2 launch does seem likely to have in common with the PS5 launch in particular, however, is supply constraints. Nintendo seems to have managed to get a solid amount of stock to retailers for the launch, but demand for the new system is very high and likely to remain well ahead of supply for quite a few months.

This mirrors the situation with the PS5, which left many consumers deeply frustrated and feeling like Sony was failing to supply the market adequately, even though in reality supply of the PS5 was higher than for any previous console launch. It also, of course, created enormous opportunities for scalpers, whose actions massively exacerbated the supply issues.

There’s nothing complicated to explain here: it’s simply a new, better, faster version of a console that people already really like

Nintendo has tried to avoid that in various ways – requiring an active Nintendo account with a history of usage to secure pre-orders, for example – but we’ll have to wait and see how successful those efforts have been, or whether this will be another launch that turns into open season for scalpers.

The actual way to avoid scalpers turning up and ruining the fun, of course, is to get better at matching supply to demand – but that is, of course, far easier to say than to do. Forecasting demand for something like a console is tricky, and ramping up supply isn’t as simple as turning a dial in the factory.

Often, hardware supply has to be managed in major step-changes. Increasing supply can mean retooling a whole production line, or even an entire factory, which is very costly and represents a huge risk if your demand forecasts turn out to have been too optimistic.

Image credit: Nintendo

No company wants to get stuck with a large number of hardware units they can’t sell, let alone with factory production lines that they don’t need. In an ideal world they’d love to perfectly match supply to demand and sell every unit they can, but they’ll always opt to take a hit from supply being constrained rather than risking over-supply.

Nintendo’s target for Switch 2 for the fiscal year is 15 million units, which is a very solid number by the standards of console launches historically, but it’s probably extremely conservative compared to the actual demand which exists for the device. This is a very unique console launch, after all. It’s an anomaly for Nintendo itself – a clear, direct sequel device to the prior console, maintaining essentially the same form factor and functionality, has not been part of Nintendo’s modus operandi for decades.

The original Switch has sold over 150 million units, making it comfortably one of the most successful pieces of gaming hardware in history, and remains a tremendously popular and well-loved device – but after eight years on the market, it’s clearly long in the tooth and most consumers won’t need much convincing that an upgrade is timely.

That creates a huge groundswell of demand for the new console. There’s nothing complicated to explain here: it’s simply a new, better, faster version of a console that people already really like, but which even non-technical audiences who don’t know one end of a Digital Foundry video from the other can see is pretty underpowered by modern standards.

The handheld nature of Switch will also help to make the upgrade more tempting for many consumers, since it’s the easiest possible console to upgrade and pass down to younger siblings, children, nephews / nieces etc. when you upgrade, as distinct from fixed home consoles that also need to be attached to a TV.

Image credit: Nintendo

Looked at from this perspective, the 15 million target for the Switch 2 this year really does start to look conservative. It may be a good number for a games console generally, but it’s less than 10% of the units sold by its predecessor, and it’s not unreasonable to posit that the potential audience size for the new device is not dissimilar to the previous one.

That mismatch almost certainly guarantees major supply constraints for months to come, especially as the software library for the new console grows and major new titles are announced (although it’s clear that a lot of consumers will also buy the console just to play their existing Switch library on better hardware).

You can’t entirely blame Nintendo for being very cautious about how they approach the risk profile for the Switch 2’s supply, however. The whole console is essentially an attempt by the company to overcome its long-running curse, after all: time and time again, successful Nintendo consoles are followed by flops.

Switch 2 looks likely to break that curse, simply by not departing from the winning formula of the previous device.

Still, success is never guaranteed, and with additional economic risks such as tariffs, the weakness of the Yen, and some recession indicators all floating around the console launch and giving executives in Kyoto sleepless nights, nobody should be surprised that Nintendo has sought to minimise risk in every possible way for this launch, including sticking to a fairly conservative supply target.

It’s too early to proclaim Nintendo’s curse to be broken, but all the signs so far are good

Nevertheless, the strong early response to the console and the prospect of a 15 million installed base by the end of the financial year will make Switch 2 into a major new addition to the industry landscape, and a tempting prospect for developers and publishers even in the early stages of its lifespan. It will be interesting to see if the system follows in the footsteps of its predecessor and has a bit of a golden age for smaller and independent titles in its first few years.

That era eventually ended on the Switch as the eShop became swamped with low-quality shovelware that Nintendo seemingly had no inclination to control or manage, but as new buyers of Switch 2 seek out interesting new software for their console in a relatively uncluttered market, it should create new opportunities for developers – and perhaps this time around Nintendo will make more of an effort at quality control and try to maintain that market in the long term.

For now, the console that’s arguably had the longest gestation period of any device in the industry’s history is finally in the hands of at least a few lucky consumers, and the early word of mouth is largely positive.

It’s too early to proclaim Nintendo’s curse to be broken, but all the signs so far are good – and a healthy launch for the Switch 2 is good news not just for Nintendo, but for the industry at large.



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Apple prepares to cry wolf over gaming again | Opinion
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Apple prepares to cry wolf over gaming again | Opinion

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Apple’s developer-focused annual WWDC event kicks off in a little over a week, which means that it’s time once again for one of the industry’s most well-established games of farce; in which Apple, the GM, tries to convince us all that this time, no this time, it’s really truly serious about gaming, and we, the players, all try to keep our faces straight and our eyes unrolled.

It’s a ritual that often skips a year or two but always comes back with a vengeance – Apple cites some impressive numbers about hours or dollars spent on games on their platforms, wheels out a famous developer to wax lyrical about the power of the hardware and demonstrate a build of their game, and announces some new iOS features related to gaming.

With love-bombing of the games industry complete for another few years, they promptly delete us from their contacts and pretend not to know us when they walk past us in the supermarket.

The reason we all still pay attention to this merry-go-round, though, is because just as it’s hard to take seriously any of Apple’s claims of yet another Damascene conversion to gaming religion, it’s also impossible not to take seriously the importance of the platforms the company controls.

There are 2.35 billion active Apple computing devices in the world right now. The company doesn’t break down those stats into Macs, iPhones, and iPads, but we know there are well over a billion iPhones in those numbers. Most of those devices are perfectly good gaming devices, at least in terms of what their hardware is capable of.

The existing mobile gaming market – while a large market by any measure – is still only scratching at the surface of the potential growth for the gaming market that could be reached through that installed base. Having one of Apple’s boy-who-cried-wolf moments actually turn into a genuine commitment to gaming would be a major step towards realising that – which makes them very hard to ignore, even if we’re pretty sure we know all the steps to this dance by now.

So what’s this year’s love-bombing going to consist of? We don’t know which development luminary they’ll bring on stage, but it does seem pretty certain that there’s a shiny new gaming-centric app that’s going to be built into the next release of iOS, replacing the rather clunky Game Centre with a more streamlined game launcher (which may encompass games bought on other stores on macOS, a bit like how the Apple TV app shows the next shows in your watchlists on Netflix and other streaming services) and providing various editorial and social features.

Image credit: Apple

It’s not clear whether this is just a new app, or if it actually represents an overhaul of the services layer of Apple’s gaming offerings – for example, whether it’s going to have things like chat, matchmaking, teams and so on implemented in a way that centres on the app but also available in games via an overlay or direct integration through an API.

That sounds fine and dandy, though of course the Game Centre app this will replace is a reminder of one of the previous iterations of the “Apple is serious about games this time” dance.

What’s perhaps more interesting, though we don’t yet know if it’ll get an on-stage mention at WWDC, is that this is coming just as Apple wraps up the acquisition of its first ever game studio – RAC7, the studio best known for creating Sneaky Sasquatch, which has been a very steadily performing hit on the Apple Arcade service since its launch.

Now, there’s a very obvious caveat here before we start speculating about Apple trying to build out a game development studio system: RAC7 is a micro-studio consisting of just two people, so while it’s apparently going to continue operating more or less autonomously as a wholly-owned studio, there’s still a bit of a whiff of an acquihire about the situation.

It makes sense for Apple to bring a studio that’s been pretty solidly committed to Arcade, and successful on the platform, into the fold in this way even if it’s only so that they can be used as consultants and testers for upcoming changes to the service offering.

The core concept of the Apple Arcade offering – a ton of well-vetted games that are guaranteed not to be packed with microtransactions and ads – remains very compelling, especially for parents

While that may be a bit of a letdown to people who got excited at the prospect that Apple would follow its efforts at building up movie and TV production studios with a similar move into gaming, this acquisition does still send a cautiously positive signal.

Apple acquires small companies all the time, but it’s never done so with a games studio before, so the willingness to do this suggests that it is tacitly aware of a lack of internal know-how and skills related to this market segment, and moreover, that it remains quite committed to Apple Arcade.

That second part is important, because honestly, it’s quite easy to forget that Apple Arcade exists sometimes. It’s a bit of a cypher to a lot of the industry, I think; it was launched with much fanfare but it now essentially just sits there occupying zero mindshare for most of the gaming sector and its consumers.

However, there have been some hints that it’s actually quite successful commercially – a tricky thing to measure given that its primary commercial target is driving subscription numbers and retention metrics for the all-encompassing Apple One service, but at the very least there’s never been a suggestion from Apple that it’s unhappy with how it’s performing in that regard.

The core concept of the offering – a ton of well-vetted games that are guaranteed not to be packed with microtransactions and ads – remains very compelling, especially for parents, and it seems reasonable to posit that it’s quietly doing a very solid amount of business off in demographic sectors that rarely engage with the traditional games industry.

This, to some extent, might explain why Apple has ghosted the industry after its most recent bouts of love-bombing; Apple Arcade and the infrastructure that supports it isn’t terribly meaningful to the traditional games industry, but actually accomplishes quite a lot of Apple’s own internal goals with regard to gaming.

That leads us to another crucially important piece of context to bear in mind when watching what the company unveils at WWDC this year – that this may be a series of strategic moves that are less about enticing the games industry to focus on Apple platforms, and more about preparing the ground for the possibility of major parts of the games business simply turning up on Apple’s turf unannounced and uninvited.

That spectre has been raised by various different legislative and legal moves in major markets over the past few years, all of which seem to be pointing in a similar direction – that Apple is going to be forced to open up its platform to third-party app stores, or at the very least streaming apps. The company is still fighting its corner in the courts in a lot of places, but I suspect it knows that the clock is ticking, especially in some of its most lucrative global markets.

While the commercial threat posed by actual app stores is probably minimal (most people just aren’t going to install a whole other app management ecosystem when the path of least resistance works fine), the threat from game storefronts is very real.

Epic, Steam, and Xbox are all potentially going to have functional storefronts on iOS in one form or another in the coming years – which means an end to Apple’s era of taking for granted that games will just keep churning out giant stacks of App Store cash despite being largely held at arm’s length by the company.

Rethinking its gaming app software and buying a small studio are far from sufficient to win a war on this new front if it opens up – but if they indicate some actual momentum building up, they might not be a bad start.



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How deep is Sony's commitment to live-service? | Opinion
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How deep is Sony’s commitment to live-service? | Opinion

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In many regards, things are going very well for Sony right now. The PlayStation 5 has sold strongly, generally slightly outpacing the performance of the PS4 at equivalent points in its lifecycle despite cost pressures that have kept its retail prices high.

Its biggest direct competitor, Microsoft, started the generation with a great hardware line-up but has ultimately pivoted away from console exclusive software and become one of the biggest third-party publishers on PlayStation.

Sony has an enviable line-up of studios and premium first-party game franchises, has started to find success with movie and TV adaptations of some of its game IP, and is gradually building up a solid sideline business in PC versions of its blockbuster titles – not to mention that next year GTA 6 will turn up and presumably sell absolute truckloads of PS5s in the process.

It’s not all quite so rosy, of course. With a view to the longer term, for example, it’s not unreasonable to point out that while the console business has stubbornly defied all the predictions of collapse over the past decade or two, it has certainly found itself smacking off a glass ceiling somewhere around the installed base mark achieved by the PS2, and additional growth seems elusive despite rising costs across the board. Still, within the confines of that market reality, Sony has been performing extremely well – with the arguable exception of one specific part of the company, over which hovers a question mark so big that it casts a shadow over a lot of this success.

This strategic enigma is Bungie – or to be more specific, it’s the entire content strategy that was meant to be anchored around the $3.6 billion dollar acquisition of Bungie back in 2022. While this is chickenfeed compared to the money Microsoft was splashing around on gaming acquisitions during the same era, it was an enormous purchase for Sony, and it was meant to kick-start a major change in how the company would make games.

Image credit: Bungie

Sony got live services religion, and it got it bad; the company, or at least some influential people within the company, believed that the way to achieve the kind of break-out growth that its success in hardware and premium games was failing to deliver had to come through finding the next Fortnite.

Bungie, with its experience of running the Destiny franchise and supposedly with multiple unannounced live service titles being incubated at that point, would be the lynchpin of that strategy, not only building its own live service games but also providing expertise and guidance to Sony’s other studios as they worked on live service titles based on their own core IPs.

In the years that have followed, that strategy has foundered somewhat – not least because rather than being the jewel in the crown of the live service effort, Sony’s acquisition of Bungie appears to have resulted in constantly having to put out new fires at the company.

I wonder how different Sony’s strategic positioning might sound now if the release dates of Concord and Helldivers 2 had been swapped around

While insight into the internal workings of the relationship is very unreliable given that most people leaking information undoubtedly have an axe to grind, one does speculate that there’s a weird, destructive tug-of-war going on between Bungie’s leadership and their new owners at Sony. What we can say with certainty is that revenues from Destiny 2 fluctuated wildly (as did the quality of the game and players’ sentiments towards it), drawing into question just how much Sony’s other studios might want to take direction on live service strategy from Bungie.

Major layoffs were conducted, raising some even bigger questions about what Sony had paid all that money for, if not for acquiring a wellspring of talent and experience in the form of Bungie’s now-fired employees.

Despite this, however, Sony’s determination that its future lies with live service releases doesn’t seem to have faltered – well, at least not much. The ambitious initial plans for a dozen live service games to launch by early 2026 were scaled back to six a couple of years ago. Depending on how you’re counting (bear in mind that titles like MLB The Show are considered live service, even if they may not be what jumps to mind when you think of this category), it seems pretty likely that this halved forecast will be missed by a fair bit, especially given the ignominious failure and rapid shutdown of one of the few live service games to actually launch, Concord.

Image credit: PlayStation / Arrowhead Game Studios

There was also a widespread suspicion that the retirement of former Sony Interactive Entertainment boss Jim Ryan a year ago might see the company quietly water down its commitment to live service. Despite this, however, Sony’s messaging continues to suggest a strong focus on this sector. SIE co-CEO Hermen Hulst announced a new live-service oriented studio in the PlayStation Studios group, teamLFG, just this week.

Back in 2022, the Bungie acquisition seemed to make a sort of sense. The climate around live service was extremely positive; this was long before we’d seen gigantic, costly failures like Warner’s catastrophic Suicide Squad: Kill the Justice League, or indeed Sony’s own Concord. Sony lacked expertise in this sector, and the Bungie deal could plug that gap.

It was nonetheless risky – not least because it flew in the face of Sony’s de facto policy of only buying out large studios with which they had built extremely close working relationships on successful titles over several years, despite that policy being central to building up PlayStation Studios in the first place.

Today, the climate is very different around live service games, not least because of the aforementioned failures, but also because of what seems to be a fairly strong turn in consumer sentiment around these kinds of services. Sony, however, still has a multi-billion dollar studio that really only does live services attached to it, and one does have to wonder about the extent to which that creates path dependency.

The new live service studio, teamLFG, is a good example in that it appears to be a direct spin-off from Bungie, so that acquisition is still very much driving Sony’s engagement with this whole market sector.

It’s worth noting, though, that Sony did also have some beginner’s luck in live services, with its first real dip into this water being the excellent and well-received Helldivers 2. In any high-risk gambling, beginner’s luck is a curse, because you’ll end up throwing far more of your money at the casino than the person who had a run of bad luck on their first visit and never caught the bug or tried to chase the winning feeling.

I wonder how different Sony’s strategic positioning might sound now if the release dates of Concord and Helldivers 2 had been swapped around.

Even were it not for the need to do something with Bungie, and the sense that Helldivers 2 shows that this market sector can work for Sony, there’s another logic that might underpin a continuing commitment to live service games – even despite what is now much more widely understood to be a near-suicidal risk profile for launching them. It’s the logic of venture capital, which can often look quite crazy from the perspective of an ordinary investor with a regular risk appetite, but which is all about high risks and high rewards.

Venture capitalists are generally not too interested in solid businesses with sober risk profiles and a decent profit margin. They’re interested in crazy, fast-growing businesses that, while being incredibly likely to flare out and die, will return a hundred-fold, a thousand-fold, or an even higher upside ratio in the unlikely event that they do succeed. The logic of a venture portfolio is that losing a big chunk of money on each of 99 bankrupt companies you back is worthwhile if the 100th company in the pack strikes the jackpot for you and returns your investment a thousand-fold.

Since games don’t really do that – they’re risky, but almost never have upside rewards on that scale – the venture capital model doesn’t work terribly well for them, and that kind of VC activity has been very limited in this space over the years. Live service games, however, turn this on its head. It’s extremely, vanishingly unlikely that your game will be the next Fortnite, but if it is, it will deliver exactly the kind of immense return that venture capital funds are interested in.

This, I think, is a sort of thinking that’s taken root in some quarters within Sony. Who cares if they back dozens of failures, if one of them becomes a new title whose recurring revenue is big enough on its own to be a whole new pillar of the business?

We’ll see in the coming years whether that’s really the approach Sony intends to take – if it’s happy to absorb more and more Concord-style failures (or, perhaps more likely, a bunch of commercially mediocre performers that stick around for a year or two before being shut down, which seems to be the general life cycle of live service games at the moment) in pursuit of that one, elusive, incredible hit.

If so, it’s a strategy which carries an especially extraordinary degree of risk for Sony, because while a venture capital fund can back dozens of losers without anyone really noticing or caring – that’s just part of the business – it’s definitely going to be noticed by Sony’s consumers if PlayStation starts releasing dozens of dud live services games under its banner.

Money is only one of the currencies that needs to be considered in this equation, and it’s arguably the easiest one to gamble with. The prestige and reputation of the platform and the brand is a much more valuable currency, and one that would be a lot harder to earn back once lost.



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Cheyenne Ligon
NFT Gaming

FinCEN Opinion on Samourai Wallet ‘Irrelevant’ in Roman Storm Case

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Prosecutors in the case against Tornado Cash developer Roman Storm are attempting to to sidestep the possibility that a New York judge forces them to hand over additional evidence that could help Storm’s case.

In a Wednesday letter to the court, prosecutors pushed back against Storm’s lawyers’ assertions that they’d failed to meet their so-called Brady obligations — a constitutional requirement for prosecutors to turn over any potentially helpful evidence to the defense before trial.

At the heart of the debate is a recent production of evidence in another case in the Southern District of New York (SDNY): the legal pursuit of Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill. Both cases involve a crypto mixing service that prosecutors allege was knowingly used to launder crime proceeds,

In the Samourai Wallet case, however, prosecutors recently admitted to having a conversation with two Financial Crimes Enforcement Network (FinCEN) officials in 2023 — before pressing charges — in which the government employees said they didn’t believe the mixing service would qualify as a money transmitting business under their guidelines and didn’t need a license to operate. Lawyers for Rodriguez and Hill accused prosecutors of suppressing critical evidence and violating their right to due process. Last week, the judge overseeing the case denied their motion for a hearing on the matter, telling them instead to include their concerns in their pre-trial motion due at the end of the month.

Though the cases are separate, lawyers for Roman Storm expressed concern that the prosecution’s failure to inform them of their communications with FinCEN regarding Samourai Wallet’s status as a money transmitting business also potentially constituted a Brady violation in Storm’s case.

In their Wednesday response, prosecutors said that the FinCEN conversation wasn’t evidence.t was an opinion, not a fact, they stated, and therefore not required to be turned over to the defense. Prosecutors also claimed that their discussion with FinCEN was irrelevant to Storm’s case, because it wasn’t specifically about Tornado Cash.

“Tornado Cash simply was not part of the conversation,” prosecutors wrote. “While Samourai Wallet and the Tornado Cash service may share some superficial similarities, they operated quite differently.”

Prosecutors said that they didn’t have similar conversations with FinCEN about Tornado Cash, claiming that there were “no such interactions comparable to those described in the Rodriguez Disclosures.”

“As the government has repeatedly explained to the defense in this case, the government has neither sought nor obtained an opinion from any employee at FinCEN — or any other government agency — regarding whether the Tornado Cash service is subject to registration obligations,” prosecutors wrote. “Such an opinion — especially an informal opinion offered by employees who expressly disclaim to be speaking for the agency — would not be legally admissible and would not constitute Brady material.”

The case against Storm is expected to begin on July 14 in New York.



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