Exclusives: When are they okay? When aren’t they?

Posted on 18th August 2014 - 9:27am by A

Exclusives - when is it okay? when isn't it

Microsoft at their Gamescom conference announced that Square Enix’s title, Rise of the Tomb Raider would be ‘exclusive’ to Xbox. Whilst there has been the predictable upset from PC & PlayStation owners disgruntled now the game won’t be launching on their preferred console, this deal actually has some very serious ramifications for the entire gaming industry. We take a look at the different types of exclusives deals and discuss the positives and negatives of each. 

Why are exclusives important to the console makers?

In a crowded home console market place where Xbox One and PlayStation 4 are more similar then they are different, hardware manufacturers Microsoft and Sony need exclusive games to help distinguish their console from the competition.

Unique high quality titles resonate with consumers who then associate the games with the console they can be played on – this benefits the manufacturer because gamers who desire these exclusives will buy a console to play them on and leads to an increase in sales. And for games that were once exclusive but go multiplatform the gamer will often prefer to play the game on the system of the manufacturer they first played it on.

What are exclusives?

Essentially there are three types of console exclusive games. First-party exclusives are when a manufacturer own an intellectual property (a character or franchise) and their development studio uses it to make a game which is only available on their own console. So you won’t see Microsoft releasing their big marquee series Halo on a PlayStation, or Nintendo releasing a Super Mario on an Xbox 360. First-party titles can offer some really special and unique experiences that utliise the strengths of the hardware they are on. The best-selling and critically acclaimed The Last of Us highly is a consequence of Sony investing in the completely new and untested series, Uncharted: Drake’s Fortune. Franchises like Halo or new titles like Wii Sports also have a massive appeal to the casual market and are able to draw more consumers into buying a home console and brings their spending power to the industry.

Bank-rolled exclusives are when a third-party developer makes a game with funding from a console manufacturer, that without the funding the game would not have been made. Because of this it is generally regarded as a good type of exclusive. Examples of this are Sunset Overdrive by Insomniac Games and funded by Microsoft, Bayonetta 2 by Platinum Games funded by Nintendo and Bloodborne by From Software and funded by Sony.

Then there are the Moneyhat exclusives. This is where a third-party developer is making a game for release on multiple formats, then a manufacturer pays money to have the developer not release the game on rival platforms, either for a timed duration or permanently. Examples of this are Titanfall where a last minute deal saw Microsoft pay money to publisher EA so PlayStation owners couldn’t play it. In fact so last minute was the deal that the boss of the Titanfall developer, Vince Zampella, only found out shortly before it was announced.

Rise of the Tomb Raider was available for pre-order for multiple formats on the instruction of publisher Square Enix. After Microsoft announced the exclusive deal retailers stopped offering it for non-Xbox platforms and cancelled non-Xbox pre-orders. It is most probable that the Rise of the Tomb Raider exclusive is a moneyhat deal.

An additional sub-type of the moneyhat exclusive is the platform exclusive content that comes with some games. Most notably the Assassin’s Creed series and Watch Dogs which have included ‘60 minutes of additional content’ on PlayStation platforms. This content has normally been separate from the story of the main game, is of a rudimentary quality and does not feature trophies suggesting developer Ubisoft don’t regard it as important. The extra DLC was paid for by Sony as part of their co-marketing deal to be used just by their customers. But if Xbox and PC owners are buying these games why should they get less?

But isn’t the Tomb Raider exclusive just Microsoft being competitive? What harm could it possibly do?

The harm is significant. Sony has sold over 10 million PlayStation 4s to consumers. Microsoft have reported sales of 5 million to retail. But Sony are reporting outselling their rival 3-1 and with many PS4 games selling three times as much as the XBO version this indicates XBOs actually sold to consumers is most likely in the 4 million region if not less. So Microsoft has to combat this success. No one can argue with this – but one can argue how they are choosing to do it. Under Phil Spencer’s stewardship Microsoft is using their considerable wealth to take third-party games being developed for other platforms off the table. They are paying to stop games being release on PC and PlayStation.

Less original AAA games
This is indicative of a philosophy within the company that success comes not from investing in creating franchises but waiting to see what third-party games become hits then paying for them. The danger is that there will be less variety and diversity in their games output, instead preferring to rely on FPS titles, racing games and confirmed third-party hits.

Love it or loathe it Quantic Dream’s Heavy Rain wasn’t a sure thing. It’s dark themes and plot about a child kidnapping made it too controversial for Microsoft who turned down creator David Cage’s request to release it. Instead Sony saw artistic potential in and they helped finance and promote the game with a total development and marketing budget of €40 million. But Sony took a chance and this highly unusual title and struck a chord with many gamers, it was a big win for Sony in sales earning them at least €60 million profit.

Less investment
The disappointing thing is that Microsoft actually has a diverse back catalogue of well-known IP that can be made into new titles that gamers would throw their money at them for the chance to play. Games like Perfect Dark and Viva Piñata and many more. And traditionally PC titles Flight Simulator and Age of Empires which would translate so well to Xbox. But their focus on mass market titles sure-hits means they are neglecting their best assets leaving Xbox owners with less choice of genres.

Paying for exclusives means that money is not vailable to invest in new games. The Titanfall exclusive could have cost Microsoft in the region of $50 million. The Gears of War IP purchase from Epic could have cost between $50-$100 million. If they had invested in new IP they could have made their own Titanfall their own Gears, their own Uncharted. Admittedly not every franchise is a hit, Uncharted: Drakes Fortune was only a modest success but because Sony believed giving the audience time to ‘find’ the franchise they invested in the sequel, Uncharted 2 was a critical and sales success. Just think of how much good will there could have been if Microsoft announced they were making a first-party exclusive. A third person action adventure featuring Joanna Dark available Christmas 2015!

A strategy of hardware manufacturers investing rather than moneyhatting exclusives is better for the industry because it means third party titles are not restricting from anyone and there are more original games being made, more jobs in the industry, more platform exclusives and more third-party games available to everyone.

Repercussions
If the Rise of the Tomb Raider exclusive benefits the partners then don’t expect this to be the last exclusive that will be locked down. If publishers are seeing companies paying big money for timed exclusives and profiting from it means they will imitate and everything will be a timed exclusive – with time this will erode the free market of console purchases. However if this exclusive deal doesn’t work out so well it means the game will sell less and other publishers will be weary of accepting the manufacturers paycheques.

Looking forward

Sony and Microsoft have demonstrated they will do anything to remain competitive. No one should complain when they put money into developing exclusive titles that otherwise would not exist. However the moneyhat type of exclusive agreement has a grubby stench to it. It is anti-competitive because it uses vast funds to suffocate competition and it is anti-consumer because it deprives gamers of content from appearing on the console they chose to buy. A console manufacturer shouldn’t ‘win’ because it has written a big cheque and can use this as leverage to restrict third-party releases for competing consoles. It is damaging to the video game market as a whole. This type of exclusive is a cancer to the industry.

Microsoft, Nintendo, Sony should succeed or fail because of the financial investment they put into game studios, the trust they place in creative teams, the talent they nurture and the unique inspired titles they can bring to gaming. It is this that can give us a greater diversity of product and move this great hobby and industry forward.

 

Source:
Eurogamer: Microsoft confirms Rise of the Tomb Raider Xbox exclusivity deal “has a duration”
VentureBeat: Titanfall boss ‘only found out recently’ about Microsoft deal. Says Respawn will make PS4 games.
DealSpwn: On Microsoft’s Dark Side Business Dealings and Titanfall Exclusivity
Now Gamer: PS4 Games outselling Xbox One 3:1
Sony: Q1 FY2014 Consolidated Financial Results
MCV: PS4 is outselling Xbox One by over 3-1
Eurogamer: PlayStation 3 PlayStation 4 Heavy Rain cost €16.7 million to make and made Sony “more than €100 million”
CVG: Quantic Dream has no interest in ending Sony exclusivity says co-CEO
Reddit: List of Microsoft owned franchises and properties
Gamespot: PS4 racks up 69 percent of UK Tomb Raider: Definitive Edition sales
Special thanks to Suzzopher for title

About the Author

Andrew loves gadgets and gaming and can't wait to get his hands on next-gen technology. He is a qualified network engineer and has experience with consumer technology and training people so they can quickly and properly understand and assimilate new skills.