Bravely exploring tombs… but only on Xbox, for starters.
Of all the announcements made by Sony and Microsoft at their pre-Gamescom press conferences yesterday, the one that seemed to get the most attention was an old title with a new console. The announcement that Square Enix would make Rise of the Tomb Raider as a timed exclusive for Xbox consoles was so surprising in part because third-party console exclusives have been getting rarer for about a decade now (see our companion piece on the history of the practice).
It’s not that exclusive third-party consoles are unheard of even these days. Microsoft took a big gamble that EA Fall of the Titans would be a system vendor big enough to keep it off the PS4. The following Sunset Overdrive could be an even bigger coup for Microsoft, coming from an Insomniac Games studio best known for PlayStation exclusives like Ratchet & Clank And Resistance.
Sony has also landed some major third-party exclusives for the future of the PS4, including those from From Software. BloodborneCapcoms Deep insideand Ready at Dawn’s The Order: 1886. And both Microsoft and Sony have gobbled up a host of smaller indie titles as “console exclusives” in recent months, even though most of those games are often available months in advance on PC or mobile platforms as well.
Getting console exclusivity for indie titles and new, unproven franchises is one thing. The idea of a large third-party franchise like Tomb Raider ignoring one console maker in favor of another is quite another. Long time Tomb Raider fans who made the ignorant mistake of purchasing a PlayStation 4 or PC game rig were understandably upset by yesterday’s announcement. The commenters on Square Enix’s official Tumblr post announcing the move are particularly harsh: “Translation = MS offered us a bunch of money” is the very first comment.
It’s just business
Make no mistake, this exclusivity agreement is purely a business arrangement, not a personal or technical claim against non-Microsoft systems on the part of Tomb Raider publisher Square Enix and developer Crystal Dynamics. “People ask me how much we paid. There are certain things I’m just not going to talk about because it’s a business deal between us and them,” Microsoft’s Phil Spencer told Eurogamer.
From a business perspective, it’s easy to see why the idea of Xbox exclusivity could appeal to Square Enix. While last year Tomb Raider reboot finally became profitable after six million sales, Square Enix’s financial reports revealed that even 3.4 million first-month sales weren’t enough to meet the early targets. Both data points suggest a game with a ridiculously large development budget, which required similarly large sales to make up for it. Industry analyst Billy Pidgeon estimated that for games like Tomb Raiderthe total cost could be “close to $100 million”, meaning the publisher would need sales “in the range of five to ten million units” to break even.
Signing an exclusive deal with a console maker like Microsoft can remove much of that risk, giving the publisher a big cash injection before they’ve even completed development or sold a single copy. Or the business benefits may come in more indirect forms. As EEDAR CPO Geoffrey Zatkin told Polygon, these exclusivity agreements sometimes include more marketing, lower royalty rates, or even loaning development talent to the game publisher.
With a timed exclusive, the deal probably looks even better for Square Enix, as many PS4 and PC owners will undoubtedly still buy Rise of the Tomb Raider when it finally and inevitably comes out on their platform of choice (despite the current internet frenzy). For a perpetual exclusivity, Microsoft would probably have required a larger cash outlay, especially when you consider that the Tomb Raider: Definitive Edition also reportedly sold twice on the PS4 as well as the Xbox One.
From Microsoft’s perspective, the “exclusive” calculus is a bit different. Every dollar the Xbox maker spends signing an exclusivity deal is a dollar it hopes to recoup in increased system sales, plus the higher software licensing costs associated with that larger player base. That was certainly the idea behind Microsoft getting exclusive console rights to it Fall of the Titansso much so that earlier this year the game was bundled for free with Xbox One systems (exclusively from third parties Sunset Overdrive will receive a similar bundle later this year). While that move hasn’t stopped the Xbox One from being outsold by the PlayStation 4, think about how many fewer consoles Microsoft would have sold without the big shooter’s draw.
It may seem that, as a timed exclusive, Rise of the Tomb Raider is less likely to be a major system vendor for Microsoft. After all, players can just wait a while and buy the game on another platform. However, the timing of the exclusives matters. Rise of the Tomb Raider comes to the Xbox One just in time to take on the PS4 exclusive Not charted during the holiday season of 2015, setting up a battle between the consoles of the major action-adventure games. Given the importance of the holiday shopping spree to the gaming industry, even a few months of exclusivity may as well be forever from a certain perspective.
Any exclusive purchase of Microsoft by a third party may also have a synergistic effect with the others. A single exclusive offer from a big name may not be enough to entice a potential consumer to buy a Microsoft console, but two or three or five valuable exclusives on one system can get a customer’s attention. The more third-party titles you can add to your stable of in-house exclusive titles, the faster you can reach that “critical mass” point that convinces someone to take the plunge on a new console.
As a gamer, it’s frustrating to see publishers and console makers playing games with third-party games that appear on the platform of your choice. However, the business realities of the console market make it more likely that both Sony and Microsoft will try to differentiate themselves with more of these types of exclusivity deals in the future.