What You Missed This Week in Video Games

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

UBISOFT EARNINGS: Last week, Ubisoft (UBSFY) reported first quarter net bookings growth of 8.3% year-over-year as well as 12% growth in IFRS 15 sales. Yves Guillemot, Co-Founder and Chief Executive Officer, said “In a selective market, we delivered a solid start to the year with net bookings above target, reaffirming that we are on the right track. The quarter notably saw the launch of XDefiant, that is off to an encouraging start as we continue to grow the audience at a steady pace and plan a quarterly roadmap of content that will allow us to firmly establish the game over time. We also held Ubisoft Forward, that is always a key event for our teams and players, during which we showcased content that is very much aligned with our strategic focus on our two key verticals, Open World Adventures and GaaS-native experiences. The gameplay we presented for our two highly anticipated upcoming premium titles, Star Wars Outlaws and Assassin’s Creed Shadows, was not only praised by players and critics alike but also highlighted the cutting-edge capabilities of our game engines. We also presented a strong pipeline of content that will continue feeding our Live titles. As we progress through FY25, all our efforts are focused on successfully launching our promising new releases and positioning them as long-lasting value drivers for Ubisoft while continuing the transformation of our organization. We are excited about the future and confident in the sustained progress of our turnaround throughout the year.”

Meanwhile, the company said that while its line-up for the remainder of fiscal 2025 still includes “Assassin’s Creed Shadows” and “Star Wars Outlaws,” “Rainbow Six Mobile” and “The Division Resurgence” are no longer expected in FY25 as the teams are taking the necessary time to ensure that these experiences deliver on expectations with optimized KPIs in the context of a demanding yet very large market.

WARNER BROS. BUYS ‘MULTIVERSUS’ STUDIO: Warner Bros. Games (WBD) (MSFT) video game studio, according to a statement from the Campaign to Organize Digital Employees released late Friday. The workers, consisting of 241 developers including artists, engineers, programmers and designers have either signed a union authorization card or indicated that they wanted union representation via an online portal. Microsoft has recognized the union. Bethesda Game Studios produces popular games including “Elder Scrolls,” “Fallout,” and “Starfield.” “We are so excited to announce our union at Bethesda Game Studio and join the movement sweeping across the video game industry. It is clear that every worker can benefit from bringing democracy into the workplace and securing a protected voice on the job. We’re thrilled to get down to brass tacks and win a fair contract, proving that our unity is a source of real power to positively shape our working conditions, our lives, and the company as a whole,” said Mandi Parker, Senior System Designer and member of CWA. The Bethesda Game Studios workers join a surge of workers who have recently formed unions in the video game industry, which had previously been seen as hostile to worker organizing. They will be members of CWA Locals 2108 in Maryland and 6215 in Texas and join other CWA members at SEGA of America, Activision Blizzard, ZeniMax and Tender Claws.

FTC VS. MICROSOFT: According a filing late last week, the Federal Trade Commission sent a letter to the U.S. Court of Appeals for the Ninth Circuit to alert the court that Microsoft’s announced price increases increases in the multi-game-subscription and cloud-gaming markets. “Microsoft is raising the price for its “Game Pass Ultimate” product from $16.99/month to $19.99/month-a 17% year-over-year increase,” the letter reads. “Additionally, Microsoft is discontinuing its $10.99/month “Console Game Pass” product. Users of that product must pay 81% more to switch to “Game Pass Ultimate.” For consumers unwilling to pay 81% more, Microsoft is introducing a degraded product, “Game Pass Standard,” at $14.99/month. This product costs 36% more than Console Game Pass, and withholds day-one releases. Product degradation-removing the most valuable games from Microsoft’s new service-combined with price increases for existing users, is exactly the sort of consumer harm from the merger the FTC has alleged. Microsoft’s price increases and product degradation-combined with Microsoft’s reduced investments in output and product quality via employee layoffs, see FTC’s February 7, 2024, Letter-are the hallmarks of a firm exercising market power post-merger.” “Importantly, Microsoft’s actions are inconsistent with Microsoft’s representations below,” the letter continues. “Microsoft’s price increases coincide with adding “Call of Duty” (CoD) to Game Pass’s most expensive tier, and discontinuing the Console tier will happen shortly before releasing CoD’s newest game. Below, Microsoft promised that “the acquisition would benefit consumers by making available on Microsoft’s Game Pass on the day it is released on console (with no price increase for the service based on the acquisition).” ECF_108 at 20. Microsoft’s post-merger actions thus vindicate the congressional design of preliminarily halting mergers to fully evaluate their likely competitive effects, and judicial skepticism of promises inconsistent with a firm’s economic incentives.”

OTHER STORIES TO WATCH:

Video game sales fell 1.6% year-over-year in Europe in 1H24, Gamesindustry.biz reports(NTDOY) unit sales dropped 31% year-over-year in Japan in 1H24, Gamesindustry.biz says (read more)

Microsoft’s Xbox has enabled Nvidia (NVDA) GeForce NOW integration for supported games (read more)

Fewer than 2,000 customers have paid to play Capcom’s (CCOEY) “Resident Evil 7” on iOS, Mobilegamer.biz says (read more)

“Mortal Kombat” studio NetherRealm hit with layoffs, Eurogamer says (read more)