Xbox Inks Nvidia, Nintendo Agreements | AMD Eyes A Change for RDNA 4 GPUs | Gaming Slows, but It’s Not All Bad News

AnchorWhat's on Tap This Week?
  • Microsoft doubles down on cloud gaming with Nvidia, Nintendo deals.
  • AMD eyes a change in strategy for its next generation of GPUs.
  • Report: Gaming deals are slowing down, but it's not all bad news.
  • Other News: Intel, Tencent, & more

Cloud Gaming

Microsoft Activision
Source: Nvidia

Microsoft Activision Deal: Xbox Bets Big on Cloud Gaming Company signs 10-year deals with Nintendo and Nvidia for Call of Duty

Microsoft has signed a pair of deals with Nintendo and Nvidia to guarantee Call of Duty releases on their respective platforms. Although the announcement was light on specifics, it’s a big shot in the arm for Nvidia’s cloud gaming service and could signal that the Nintendo Switch’s successor will be more of a competitor to traditional consoles and PC gaming.

Promises, Promises
The two deals Microsoft has signed are largely similar, with Nvidia’s agreement also including additional Xbox and Activision games. For Nintendo, Microsoft is promising “a binding 10-year legal agreement to bring Call of Duty to Nintendo players – the same day as Xbox, with full feature and content parity.” At face value, it’s an extraordinary development given the last Call of Duty on a Nintendo console was 2013’s port of Call of Duty: Ghosts.

The more significant deal is the one Microsoft has struck with Nvidia for cloud gaming. The two companies announced a 10-year partnership that will see the addition of Xbox games to GeForce Now. Additionally, GeForce Now will receive COD and other Activision Blizzard PC titles once Microsoft’s acquisition of the company is complete.

Another Win for Cloud Gaming
The deal is a major win for Nvidia and Microsoft. In the short term, this deal secures Nvidia’s support – or, at least, lack of opposition – to the $69 billion Microsoft Activision deal. Long term, Microsoft will still get to pocket game sales revenue since GeForce Now operates under a buy-to-play, not a la carte model. GeForce Now – which is arguably the most technologically advanced game streaming option currently – will be even more attractive with the addition of Call of Duty and Xbox PC titles like Age of Empires.

The Devil in the Details
The addition of COD will help compensate for Nintendo’s traditional Achille's heel of lacking first-person shooter titles. If Nintendo is truly receiving the same Call of Duty releases as PC, Xbox, and PlayStation, how will Nintendo achieve this? Since the GameCube, Nintendo has shunned powerful hardware in favor of other advantages, such as the Switch’s portability. These leaves a couple tantalizing possibilities.
  • The Switch’s successor will be as powerful as the PS5 and Xbox Series X/S – and likely less portable.
    • Call of Duty Nintendo Switch port seems unlikely given the Switch is near the end of its life cycle.
  • Microsoft intends to rely on porting a less demanding title like Call of Duty: Mobile to PC, console, and Nintendo.
  • Nintendo may rely on cloud gaming to get around hardware limitations and make modern AAA titles playable on its less powerful consoles.
A Future Without Ownership
In the long run, Microsoft’s moves – in particular, its deal with GeForce Now – are one more step in the trend of making the gaming a business of subscriptions, not ownership. It’s a future that would upend the traditional buy-it-and-you-own it model of gaming hardware. 
-Avery Bissett, Head Writer


Source: AMD

AMD Eyes Change in Strategy for RDNA 4 GPUs RDNA 4 will integrate more AI – and potentially be more expensive

AMD’s current generation of RDNA 3 and Radeon RX 7000 GPUs may be barely out of the gate, but Team Red is already setting its sights on its next generation, RNDA 4. Recent comments suggest AMD will take a page from Nvidia’s playbook and lean more heavily on AI. This could mark a shift away from AMD’s traditional preference of competing primarily on price and efficiency.

Still Not Sold on Hardware Ray Tracing
AMD’s video cards have historically lagged behind Nvidia’s when it came to hardware ray tracing performance. In a recent interview, head of Radeon David Wang stood by AMD’s decision, arguing that AMD’s image upscaling features “provide performance and quality that can fully compete with Nvidia’s DLSS. "He even went as far as to suggest that Nvidia’s focus on ray tracing was a feature of dubious interest to most gamers.

  • Nvidia has continued to double down ray tracing with software and AI enhancements, such as the RTX 40 series’ DLSS 3.0 frame generation technology.

AMD seems intent on incorporating more AI features into its GPUs, but for different applications. One proposal floated by Wang was using RDNA4’s additional AI cores to improve in-game behavior from NPCs.

A Change in Strategy
To date, AMD has struggled to take market share away from Nvidia, despite producing multiple compelling GPUs in terms of efficiency or price to performance. Regardless of whether or not gamers value ray tracing, the numbers don’t lie: Nvidia’s Bet on ray tracing has translated into record sales and a massive install base. Wang’s comments suggest that AMD’s next generation of GPUs will at least partly focus on Nvidia's traditional strong suit, cutting edge features and overall performance – even at the expense of affordability.

-Avery Bissett, Head Writer


Source: Apple

Report: Gaming Deals Slow, but Still Exceed Pre-Pandemic Levels Q4 2022 still saw 146 deals worth $5.9 billion

Gaming M&A and investment activity has significantly slowed as the pandemic gaming bubble deflates, but it’s not all bad news according to InvestGame. Its report, which covers 2020 to 2022, shows continued strength in early-stage investments, as well as PC, console and cross-platform development.

Growth Potential
Despite the steep decline in the overall market, early-stage deal activity was a bright spot, with $800 million invested across 109 deals in 2022, versus $1.1 billion in 156 deals in 2021. Looking ahead, many gaming venture capital funds are still sitting on large war chests. The fall in valuations is a double-edged sword: While gaming companies may not be worth as much, they are also more affordable for investors. 

Talk of the Town
InvestGame also tracked media coverage of closed deals (which eliminates the elephant in the room that is Microsoft’s pending purchase of Activision Blizzard). The deals with the most media coverage were Microsoft’s purchase of Bethesda Games’ parent company Zenimax Media, followed by Sony’s $2 billion investment in Epic Games and $3.7 billion purchase of Bungie. PC also got a little shine, with game engine developer Unity’s acquisition of ironSource being the eighth most visible deal.

The Big Casualties
Blockchain-based Web 3 gaming was, unsurprisingly, one of the hardest hit segments. Q4 2022 saw just under half a billion dollars in Web 3 deals, compared to Q1’s $1.6 billion in activity at the height of the bubble. 2023 figures to be an even tougher year for Web 3 in gaming. The other big casualty was mobile gaming, which lost much of its investing luster after Apple’s changes to user data sharing with advertisers. 

Has the Worst Passed?
That's the big question many gaming companies – particularly hardware manufacturers seeing double-digit revenue declines – will be repeatedly asking themselves in the coming months. This report suggests that, if the worst isn't behind us yet, then at least 2023 will still offer significant growth opportunities for traditional gaming companies.

-Avery Bissett, Head Writer

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Supply Drop: Games & Players

Upcoming Games (February 24 - March 2)

Clive 'N' Wrench – PC, PlayStation, Switch
Dungeons of Aether – PC
Fernbus Coach Simulator – PlayStation, Xbox
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King of the Castle – PC
Kirby's Return to Dreamland Deluxe – Switch
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Octopath Traveler 2 – PC, PlayStation, Switch
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Source: Twitter

The Tap: News to Go

  • GPU: Intel's Tom Petersen confirmed to PCWorld's The Full Nerd podcast that the lion's share of Intel Arc's resources are being directed toward the next generation of GPUs, Battlemage. The focus will be on better DirectX 12 performance for modern titles and improved ray tracing. (Courtesy of Wccftech)
  • VR/AR: Tencent has dropped its plans to develop VR hardware amid a slowing economy. The world's largest gaming publisher by revenue is now in talks with Meta to distribute Meta Quest headsets in the Chinese market. (Courtesy of Reuters)
  • Mobile: In another sign of the Steam Deck's success, US repair chain iFixit is now offering upgraded SSDs for Valve's Steam Deck. Prices range from $99 to $304 for 512GB to 2TB options. (Courtesy of Gaming on Linux)
  • Industry: Activision suffered a data breach on December 4, 2022, during which hackers gained access to employee and game data. Activision did not confirm the episode until after outside actors announced it this week. The publisher claims no sensitive data was stolen. (Courtesy of Tech Crunch)