TheGamingEconomy’s Daily Digest brings you the prevalent business stories in gaming. In today’s news: Nintendo boosts revenue forecast to JP¥1.6tn (£11.1bn); Sumo Group acquires PixelAnt Games; Riot Games again seeking arbitration in gender discrimination lawsuit.
Nintendo boosts revenue forecast to JP¥1.6tn (£11.1bn)
Nintendo has increased its revenue forecast for its 2020-2021 financial year to JP¥1.6tn (£11.1bn), following a quarter in which it eclipsed its previous target of JP¥1.4tn (£9.75bn). For the nine months ended 31st December 2020, the Japanese games industry mainstay generated an operating profit of JP¥521.1bn (£3.629bn), nearly double the JP¥262.9bn (£1.831bn) recorded a year earlier, from net sales of JP¥1.404tn (£9.778tn), up 37% year-over-year. Despite the release of next-generation devices from Microsoft and Sony over the Christmas period, sales of the Nintendo Switch console increased by 35.8% to 24.1 million units, representing the most significant sell-through since its release in March 2017.
Meanwhile, as coronavirus continues to disrupt physical retail, Nintendo's digital sales grew by 104.9% year-over-year to JP¥256bn. In terms of titles, Animal Crossing: New Horizons continued to dominate Nintendo's portfolio with nine-month figures of 19.41 million units, while 19 of its other published titles have sold over one million units over the present financial year. Finally, Nintendo is continuing to see steady growth from its mobile operations, with sales increasing by 13.8% year-over-year to JP¥42bn (£292.5m).
Sumo Group acquires PixelAnt Games
British development and creative services provider Sumo Group has announced the acquisition of Wroclaw-based studio PixelAnt Games for an initial cash consideration of £250,000, followed by an unspecified earn-out consideration payable after 31st March 2023. PixelAnt Games was founded in July last year and is currently working exclusively on Sumo Group projects, however it is set to undergo a period of recruitment to expand its 13-strong team and enable it to handle third-party contracts. According to the press release disclosing the acquisition, PixelAnt Games founders Adam Lason and Pawel Rohleder will remain with the studio and lead it as a subsidiary under the Sumo Group umbrella. The purchase marks an expansion into Poland for Sheffield-based Sumo Group, and follows its USD$59.5m acquisition of US outfit Pipeworks in September.
In a statement, Sumo Group CEO Carl Cavers commented, "Increasing headcount is a key pillar of our growth strategy and accessing new pools of high-quality talent is vital to the successful execution of that strategy. I’m really pleased that Adam and Pawel can see the benefits of joining the Sumo family. Poland has been on our radar for some time and the acquisition of PixelAnt, who we know so well, is a great way for us to gain entry to this exciting market. On behalf of everyone at Sumo, I welcome the PixelAnt team to the Group and look forward to building a substantial presence in this thriving new territory."
Riot Games again seeking arbitration in gender discrimination lawsuit
Tencent-owned Riot Games is again seeking individual arbitration in the ongoing lawsuit filed by former employees alleging gender discrimination and sexual harassment against the studio. The studio, best known for its League of Legends title, originally attempted to invoke individual arbitration, whereby cases are settled out of court by an independent adjudicator on an individual basis, in April 2019. A preliminary settlement of USD$10m was agreed in December 2019, which was subsequently legally protested against by the California Department of Fair Employment and Housing (DFEH) and Division of Labor Standards Enforcement (DLSE), which determined that the plaintiffs could be entitled to USD$400m and were not appropriately represented in the initial court proceedings.
A statement from Riot Games issued to GamesIndustry.biz reads, "This ruling will allow us to reach a fair and speedy resolution to these cases, some of which have already been pending for more than two years. We have always been, and will continue to be, willing to engage in constructive dialogue to bring these matters to resolution as quickly as possible -- so long as the resolution is grounded in the facts of these cases. Notably and unlike some arbitration agreements, the agreements between Riot and its employees have no confidentiality clauses, which means plaintiffs can talk about their suit in the same ways they could in court. In addition, both parties must agree on the arbitrator, who is typically a retired judge. Either party can reject an arbitrator - for example, based on their history of past cases -- and the case will not proceed until a mutually agreeable arbitrator is selected."