A tale of two markets: Some CMBS players see huge losses, others opportunity

first_imgShare via Shortlink From left: Florence Mall in Kentucky and Brookfield’s Brian Kingston; Louis Joliet Mall and Starwood’s Barry Sternlicht and Southland Mall in Cutler Bay and Investcorp’s Hazem Ben-Gacem (Google Maps, Brookfield, Getty, Investcorp)Nobody knows how to sniff out distress like Barry Sternlicht.In the early ‘90s, in the thick of the savings and loans crisis, his company Starwood Capital Group scooped up real estate loans for pennies on the dollar. And after snapping up distressed debt from Miami to Los Angeles during the financial collapse of 2008, Starwood became one of the largest real estate investors in the country.Sternlicht knows how to make money when others are losing it. So when his firm hands the keys over to one of its lenders on a nearly 1 million-square-foot mall outside of Chicago, it’s a beacon of foreclosures and distress yet to come.Investment giants like Starwood, along with Brookfield Property Partners and Bahraini-based Investcorp, have sought to turn over hotel and retail properties tied to securitized commercial mortgages as the pandemic continues to batter those markets.Across the U.S., major borrowers are seeking to let go of at least 100 assets in the commercial mortgage-backed securities market with an outstanding balance of nearly $4 billion, according to data provider Trepp.The process — commonly referred to as “jingle mail” to signify the keys being mailed back to lenders and special servicers — could become more common. And as forbearances grow, more banks and other CMBS servicers are going to be faced with the difficult decision of foreclosing or making serious loan modifications.“We see a mess coming down the pipe,” said Shlomo Chopp, managing director of New York-based Case Property Services, a firm that focuses on CMBS debt restructuring. “Whether it’s a mess for the borrower, or the lender and bondholder, it’s going to be a mess for somebody.”But despite a litany of problems with overleveraged and poorly timed CMBS deals in the past decade, some borrowers are still turning to the market for financing. Investors, in search of greater yield, are also looking to buy some of the riskier portions of securitized commercial debt.Year to date, CMBS issuance has amounted to just over $51 billion in 2020, about half of the total in 2019, according to Trepp. The market — which peaked at $230 billion in 2007 — is a far cry from its much frothier days. And while hotel and retail borrowers will be seeing fewer securitized commercial loans going forward, industry experts say demand for CMBS financing on industrial, multifamily and office properties could rise in the near future.“If your property qualifies for CMBS it is always going to be your best maximum leverage, non-recourse fixed-rate option,” said David Pascale, a senior vice president at the advisory firm George Smith Partners who arranges debt and equity for commercial real estate borrowers and lenders.Death of a mallWhen Starwood purchased the Louis Joliet Mall from the Westfield Group in 2012, the property had an occupancy rate close to 95 percent and an appraised value of more than $130 million. Since then, two of the mall’s main anchor tenants have departed: Carson’s in 2018 and Sears in 2019.Starwood, which lost control of a separate U.S. mall portfolio in recent months, stopped making debt payments on the Chicago metro area property in March. The company is now delinquent on a $85 million CMBS loan secured by the mall. And while the asset’s overall value has not been reassessed since Starwood’s acquisition, it is likely worth far less than its 2012 appraisal.Other institutional giants are making similar moves. Investcorp stopped making payments on a $65 million loan tied to a struggling indoor shopping center just south of Miami, which is now being shopped. And in Florence, Kentucky, Brookfield is seeking to ditch a regional mall backing a $90 million CMBS loan to avoid foreclosure, according to Trepp.  “We see a mess coming down the pipe. Whether it’s a mess for the borrower, or for the lender and bondholder, it’s going to be a mess for somebody.” — Shlomo Chopp, Case Property Services Even among the country’s largest investment firms, CMBS debt presents a number of unique challenges for borrowers. That includes fixed obligations to bondholders that often call for highly complex negotiations when it comes to loan workouts.Unlike with conventional loans that can often be restructured with a call to the bank, CMBS borrowers have to go through a lengthy process with their special servicers before the debt can be modified. And in order for major loan modifications to go through, bondholders must approve the changes through a trust. Sometimes, that entire process can take borrowers up to a year or more.But as special servicing fees rise, a wave of foreclosures could be coming soon — especially on properties where the equity is now worth less than the debt.“Properties are going to be liquidated faster than people expect,” said Dan McNamara, a principal at the asset management firm MP Securitized Credit Partners, who has short and long positions in some CMBS indexes. “Special servicers can’t take the keys back on everything and sit on these properties, it’s not in the best interest of the trust.”For borrowers, one of the biggest challenges with CMBS debt is that once a loan reaches special servicing it cannot be refinanced, which means equity cannot be taken out of the property to pay down debt.“If the borrower recently cashed out with a refinancing, they will be more likely to hand [the property] back to the lender,” said Suzanne Amaducci-Adams, a partner and head of real estate at the Miami-based law firm Bilzin Sumberg.Owners of suburban malls have been among the hardest hit during the pandemic.Outside of Minneapolis, for example, a $63 million CMBS loan secured by half of the 1 million-square-foot Burnsville Center hit the auction block this month. The chunk of the mall backing the debt was last valued at just over $137 million in 2010. But when the loan was sold off to investors, it yielded $17 million, marking a nearly 85 percent drop in the value of the collateral.Of the 100 CMBS loans that could be turned over to lenders from March to October, the vast majority are backed by hotel and retail properties, according to Trepp. Only one loan was backed by an office building, while another was backed by a low-rise multifamily asset. No loans were backed by an industrial property.  “Special servicers can’t take the keys back on everything and sit on these properties, it’s not in the best interest of the trust.” — Dan McNamara, MP Securitized Credit Partners One of these distressed deals includes a $13.1 million loan backed by the Eastgate Holiday Inn in Cincinnati that is now going through foreclosure proceedings.In the first half of 2020, the loan had a debt service coverage ratio — a measure of the property’s ability to cover its debt payments — of negative 0.38, with an occupancy rate of just 33 percent. Last year, the loan’s debt service was just under 1.4 while its occupancy was 67 percent.Learning curvesOf course, there are many properties that are being successfully worked out between borrowers and servicers, especially for borrowers with deep pockets.In September, Jeffrey Soffer’s Fontainebleau Miami Beach resort renegotiated its $975 million CMBS loan with its servicer KeyBank and exited special servicing. Part of the agreement allowed the Fontainebleau to defer monthly furniture, fixtures and equipment reserve payments to next year.“We’re fortunate to be located in South Florida, which is on the better end of the recovery curve,” Brett Mufson, president of Fontainebleau Development, told The Real Deal last month.At the same time, location has also become a telling sign of whether a loan is heading to special servicing. In Miami, where Covid restrictions have been largely lifted, delinquency rates for CMBS loans tied to hotel and retail properties rose to about 8.5 percent and 7.4 percent in October, respectively, according to Trepp. That’s up from zero percent and 1 percent in March.In New York, meanwhile, delinquency rates for securitized loans on retail and hotel properties skyrocketed to 12 percent and 30 percent in the same period, both up from less than 5 percent in March.And while location matters, so does property type.Hotel properties had the highest delinquency rate in October at 17.5 percent, while retail properties were at 11.3 percent.Nationally, delinquency rates for asset classes outside of lodging and retail remain relatively low. In October, rates rose to 1.86 percent with office properties, 0.72 percent with multifamily and 0.53 percent with industrial, according to Fitch Ratings.The total CMBS delinquency rate is still far below its peak of about 9 percent in July 2011, following the Great Recession. This October, the rate rose to 4.85 percent, according to data from Fitch.Plotting a plan BEven amid rising delinquencies and foreclosures and dwindling CMBS issuance, there are still deals getting done.CMBS deals, typically structured as 10-year loans, still offer some of the best interest rates for borrowers and the vast majority are non-recourse, which means bondholders and lenders can only go after the collateral in the event of default.The market is “very active right now for the right deals,” George Smith Partners’ Pascale maintained.Office buildings, many with long-term leases still in place, have accounted for 44 percent of new securitized commercial mortgages since the pandemic began, according to Kroll. Those transactions include Brookfield and Qatar Investment Authority’s One Manhattan West office complex in Hudson Yards, which was refinanced with a nearly $1.5 billion CMBS loan this summer. In a telling sign of bondholder interest: The One Manhattan West deal was oversubscribed by investors.And in Silicon Valley, San Francisco-based Sansome Partners and an affiliate of Hunter Properties secured a $155 million CMBS loan in August to refinance part of a suburban office complex that’s leased to the digital media company Roku.Institutional investors such as KKR and Oxford Properties have also targeted the CMBS market in recent months. Specifically, firms are looking to buy up B-pieces, one of the riskiest slices of newly issued loans since those bondholders get paid back farther down the line.In October, the return investors seek to hold on an index of BB-rated CMBS bonds over 10-year U.S. Treasuries — commonly referred to as the spread — rose to its widest levels since the financial crisis, according to Trepp.In July, KKR closed a $950 million fund committed to snapping up to B-pieces of newly issued CMBS deals. The global investment firm is specifically targeting loans that banks are trying to get off their balance sheets.Under the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, lenders were required to have some “skin in the game” when originating CMBS loans. The goal was to prevent lenders from underwriting shoddy loans and then immediately rushing them off their balance sheets. An exception allowed lenders to sell these loans to private investors, which then bear the risk if the loans default.In the case of KKR, the private equity firm is “re-underwriting” the deals and inspecting each site, according to Matt Salem, head of real estate credit for KKR.“Our thesis, dating back to our first fund in the beginning of 2017, was that the new risk retention rules would lead to higher quality CMBS loans,” Salem told TRD in an email. The originators of the commercial mortgages, which are largely banks, do not want to keep all of “the required risk retention” on their books, he argued.Opportunities could become even more plentiful as banks — which have deferred many of their loans — face write-downs and are forced to sell off their debt.That wave of distress has yet to come. But, in the meantime, investors and vulture funds will be waiting to pick up the pieces. Share on FacebookShare on TwitterShare on LinkedinShare via Email Share via Shortlinkcenter_img TagsBrookfieldcmbsStarwood Capital Grouplast_img read more

Manhattan-based asset manager, down on NYC, opens Miami office

first_imgMarathon Asset Management CEO Bruce Richards (Photos via Unsplash; CFA Society NY)As lockdowns continue to affect New York, Marathon Asset Management is setting up an office in Miami.While the investing team will remain in New York, the new Miami office will be available for all other personnel.Read moreNew Yorkers snap up high-end rentals in Miami BeachFollowing the money, NY brokers seek licenses in other statesReturn to the office? Manhattan workers say no thanks Share on FacebookShare on TwitterShare on LinkedinShare via Email Share via Shortlink TagsMiamiNYC Office Market Share via Shortlink “Marathon South will be an option for our employees,” co-founder and CEO Bruce Richards said Wednesday in an interview on Bloomberg Television.ADVERTISEMENT“I’m certainly committed to New York City,” Richards added. “I love New York City.”But he also said, “New York City is not what it once was” and predicted vacancy rates would rise and things would get “ugly” for property owners.Richards said that lower taxes and less crime make other cities like Atlanta, Nashville and Charlotte attractive alternatives.New York claims to be the safest big city in the U.S., and while much attention has been paid to a 38 percent rise in murders this year, NYPD data through Nov. 1 shows overall crime is down by 1 percent year-to-date.Balyasny Asset Management and Bluecrest Capital Management have also established offices outside of New York amid the pandemic, as companies struggle to get employees to return to Manhattan offices.[Bloomberg] — Sasha Joneslast_img read more

Tandem Events announces Develop:VR for November

first_imgTandem Events announces Develop:VR for NovemberOne day B2B event focused on virtual and augmented reality projectsDan PearsonTuesday 8th March 2016Share this article Recommend Tweet ShareCompanies in this articleTandem EventsTandem Events, the team behind Develop Brighton, has announced a new one day event aimed at developers working on VR and AR projects. Develop:VR will take place in London on November 24, 2016.Related JobsSenior Game Designer – UE4 – AAA United Kingdom Amiqus GamesProgrammer – REMOTE – work with industry veterans! North West Amiqus GamesJunior Video Editor – GLOBAL publisher United Kingdom Amiqus GamesDiscover more jobs in games The conference will feature two tracks firmly focused on VR and AR for games, and one further schedule looking at commercial opportunities for VR in other spaces, such as medicine and virtual tourism. Speakers on all three tracks will come from both software and hardware backgrounds. In addition to the talks, an expo will run alongside the speaker program where attendees will be able to get their hands on the latest headsets, input devices and games.”Virtual reality has offered video games developers with some unique opportunities,” said Tandem MD Andy Lane. “The potential for developers within the games industry is apparent, but virtual reality also opens doors to other industries. We’ve curated Develop:VR to help developers harness these prospects, provide a platform for learning and to showcase their talent.”GameIndustry.biz will be a media partner for the event.Celebrating employer excellence in the video games industry8th July 2021Submit your company Sign up for The Daily Update and get the best of GamesIndustry.biz in your inbox. Enter your email addressMore storiesGamesIndustry.biz to host David Braben keynote at Develop:Brighton 2019Frontier Developments CEO will discuss the studio’s 25-year history with our own Chris DringBy James Batchelor A year agoSean Murray to keynote Develop:Brighton 2019Hello Games founder will reflect on developing No Man’s Sky and discuss the future of the studioBy James Batchelor A year agoLatest comments Sign in to contributeEmail addressPasswordSign in Need an account? Register now.last_img read more

Romero and Carmack suspend Kickstarter

first_imgRomero and Carmack suspend KickstarterDoom developers press pause after just four days, want to have a demo ready before resuming campaignBrendan SinclairManaging EditorFriday 29th April 2016Share this article Recommend Tweet ShareApparently it takes a lot more than name recognition to get a crowdfunding campaign off the ground these days. Doom developers John Romero and Adrian Carmack today suspended their Kickstarter campaign for a new first-person shooter just four days after launch. Related JobsSenior Game Designer – UE4 – AAA United Kingdom Amiqus GamesProgrammer – REMOTE – work with industry veterans! North West Amiqus GamesJunior Video Editor – GLOBAL publisher United Kingdom Amiqus GamesDiscover more jobs in games In a backers-only update (as summarized by Game Informer), the pair said the Blackroom campaign was being put on hold while they work on a gameplay demo.”Simply put, this will take more time than the Kickstarter has left, so we’ve decided to suspend the campaign and launch a new one when the gameplay demo is ready. We believe, however, it is the right choice. We know you do, too. Thanks to your feedback, we know we should have included it at launch.”The campaign was suspended with a little over $131,000 raised out of a targeted $700,000 funding goal. The closest thing to in-game assets released as part of the campaign was concept art that gave backers some idea of the tone, setting, and protagonist, as well as a user interface treatment.Celebrating employer excellence in the video games industry8th July 2021Submit your company Sign up for The Daily Update and get the best of GamesIndustry.biz in your inbox. Enter your email addressMore storiesEA leans on Apex Legends and live services in fourth quarterQ4 and full year revenues close to flat and profits take a tumble, but publisher’s bookings still up double-digitsBy Brendan Sinclair 7 hours agoEA Play Live set for July 22Formerly E3-adjacent event moves to take place a month and half after the ESA’s showBy Jeffrey Rousseau 8 hours agoLatest comments (1)Greg Wilcox Creator, Destroy All Fanboys! 5 years ago Well, that’s a damn good idea, period. I think no matter the developer name or reputation, a playable demo SHOULD be mandatory on ANY videogame project. Not just for backers, either. Giving people who want to put money into a game project something to try before they commit will go a long way in getting some projects funded quicker. And in the case of this game, it’ll get all the Daikatana mentioning fools some crow to chomp on if it’s a better experience.Now about Mighty No. 9 … yeah, the same goes for that much-delayed game. I’ve kind of forgotten about seeing it this year, but I didn’t back it because I wanted to see what I’d be getting into. I’m not the biggest Mega Man fan at all, so if the game is just a reskin with HD visuals and just a hair past copyright infringement characters and ideas, I’m not even going to look in its general direction. 1Sign inorRegisterto rate and replySign in to contributeEmail addressPasswordSign in Need an account? Register now.last_img read more

‘Twas the week after Gamescom, and all through the house…

first_img‘Twas the week after Gamescom, and all through the house…Weekly Roundup: PS Slim leaks, EA considers HD remasters and the UK boomsDan PearsonFriday 26th August 2016Share this article Recommend Tweet ShareEven an empty house casts a shadow. Despite the lack of big news coming out of Gamescom, the massive consumer show still looms large over another quiet news week. This year, 345000 attendees graced the halls of the Koelnmesse, braving security warnings to see another show floor which thrived despite the absence of major announcements. This week’s news peak was undoubtedly the apparent leak of consumer-ready, packaged PS4 Slim units in the UK, with several turning up for sale on various auction and local sale sites. Eurogamer’s Richard Leadbetter visited the man who claimed to have purchased the first available unit, for less than £300, and verified that it did in fact seem to be the genuine article. Eurogamer has since removed a video showing the machine booting up under legal advisement, but the coverage can still be read here.In some Gamescom news, fans were pleased with Patrick Soderlund’s apparent contradiction of the previous EA stance on HD remakes, when he said that it was something which was under close scrutiny at the publisher. “I think there is even more clear evidence that this is something that people really want,” said the executive VP of EA Studios. “The honest answer is that we are absolutely actively looking at it. I can’t announce anything today, but you can expect us most likely to follow our fellow partners in Activision and other companies that have done this successfully.””Games, unfortunately, have had their cinematic experiences designated as something like bookends between levels, which can work quite well in something like DOOM, but can drag on if it doesn’t work” Demetri Jagger, CtrlMovieShould EA follow through with the switch, it could mean a wealth of properties seeing the HD treatment as one of the industry’s richest back-catalogues re-opens for business. Still, don’t expect them all to come at once: Soderlund says that they’ll “have to be careful in choosing the right brands for the right reasons at the right time.” In the UK, a new report from TIGA indicated that the domestic industry is growing, with full-time creative staff working in games in the UK now numbering 11,893, an increase of 7.5% over last year. In addition, 21,744 jobs are indirectly supported by the sector. Combined direct and indirect tax revenues generated by the sector for the Treasury increased from £460 million to £514 million, whilst the contribution to UK GDP was up from £1.1bn to £1.25bn in the year leading up to March 2016.”The UK video games development sector is strengthening, succeeding and soaring to new heights,” said TIGA CEO Dr Richard Wilson. “Employment and investment in the sector surged to record levels in 2016 and the industry’s contribution to GDP reached an all-time high of £1.25 billion.”Elsewhere, a pre-show survey of the attendees of the VR Developer’s Conference in San Francisco indicated that creatives were more inclined to work on Valve’s Vive platform than the Oculus Rift in the future, although the two headsets were tied on current development projects. Interestingly, 78% of those surveyed indicated that they were opposed to the idea of VR platform exclusives. Remedy is under new management, with the Finnish studio bringing in ex-Red Lynx executive Tero Virtala to guide the studio post Quantum Break. In an exclusive interview with GamesIndustry.biz, Virtala said that the end of the transmedia project was a clear chance to rethink strategy, expecting there to be a period of multi-thread development as the company explored new ideas. “I’ve been in the game industry for 18 years, and frankly, I’ve always had male bosses. So it was important for me to seek out women” Nicole Opas, Zynga”This idea has lived for such a long time, but naturally, Quantum Break being such an ambitious and big project, it took most of the resources, people, the energy, most of the money the studio has been using for a long time,” Virtala said. “Now Quantum Break has been made and there is a new phase clearly starting for the company. As this strategic path has been discussed, it’s a commonly shared view that going for multiple projects is the way the people at the company want to go. And it also makes a lot of sense.”But of course, we always follow where the different markets go. It seems like the market’s changing so fast and there are new platforms coming, so no one can say how the market will be in two or three years’ time and what opportunities that might give us.”In other features this week, we spoke to Kabam’s Kevin Chou about AAA budgets and console-quality graphics in the next generation of mobile games, CtrlMovie’s Demetri Jagger about creating a new medium for interactive movies, and new VR studio Squanchtendo, formed by Rick and Morty creator Justin Roiland and ex-Epic exec Tanya Watson, whilst Zynga’s Nicole Opas asked “Where are all the women at?” “I’ve been in the game industry for 18 years, and frankly, I’ve always had male bosses,” said Opas. “So it was important for me to seek out women, whether it be experienced and seasoned female leaders or new employees to our company fresh out of college.”Elsewhere on GamesIndustry.biz this weekWargaming cuts 64 jobs with WG Cells closureSony raising PS Plus priceZeniMax raises the stakes in Oculus VR lawsuitMario closes out Rio OlympicsGoodgame Studios redundancies could hit 200 peopleIn other newsGoogle is ditching Chrome apps and games, shifting to webFormer BioShock Infinite engineers form Disbelief LLCRelated JobsSenior Game Designer – UE4 – AAA United Kingdom Amiqus GamesProgrammer – REMOTE – work with industry veterans! North West Amiqus GamesJunior Video Editor – GLOBAL publisher United Kingdom Amiqus GamesDiscover more jobs in games Rovio had a good six months, returning to profit after strong box office performances from Angry Birds the movieMicrosoft cancelled its Russian F2P Halo gameHTC is threatening to drop its sponsorship of League of Legends after a spat with RiotCelebrating employer excellence in the video games industry8th July 2021Submit your company Sign up for The Daily Update and get the best of GamesIndustry.biz in your inbox. Enter your email addressMore storiesEA leans on Apex Legends and live services in fourth quarterQ4 and full year revenues close to flat and profits take a tumble, but publisher’s bookings still up double-digitsBy Brendan Sinclair 7 hours agoEA Play Live set for July 22Formerly E3-adjacent event moves to take place a month and half after the ESA’s showBy Jeffrey Rousseau 8 hours agoLatest comments Sign in to contributeEmail addressPasswordSign in Need an account? Register now.last_img read more

Big Fish Casino ruled illegal in Washington

first_imgBig Fish Casino ruled illegal in WashingtonRuling applied to social casino game could be extended more broadly as virtual currency is “a thing of value” under gambling lawsBrendan SinclairManaging EditorThursday 29th March 2018Share this article Recommend Tweet ShareWhile the industry frets over new legislation covering loot boxes, it appears some games have been running afoul of existing gambling laws. As reported by Geekwire, the Ninth Circuit of U.S. Court of Appeals ruled that Big Fish Games’ social casino game Big Fish Casino represented illegal gambling under the State of Washington’s existing laws.The original complaint was brought against then-Big Fish parent company Churchill Downs in 2015, by a woman who lost more than $1,000 in virtual chips playing Big Fish Casino. Under Washington law, anyone who loses “a thing of value” to an illegal gambling operation has legal ground to recover those losses.A lower court ruled that virtual chips are not a thing of value, but the appeals court reversed that decision.”Defendant-Appellee Churchill Downs, the game’s owner and operator, has made millions of dollars off of Big Fish Casino,” Judge Milan Smith wrote in the opinion. “However, despite collecting millions in revenue, Churchill Downs, like Captain Renault in Casablanca, purports to be shocked–shocked!–to find that Big Fish Casino could constitute illegal gambling. We are not. We therefore reverse the district court and hold that because Big Fish Casino’s virtual chips are a ‘thing of value,’ Big Fish Casino constitutes illegal gambling under Washington law.”Washington law defines gambling as “risking something of value upon the outcome of a contest of chance,” while the definition of a thing of value includes any token directly or indirectly exchangeable for money, property, or “the extension of a service, entertainment, or a privilege of playing a game or scheme without charge.”While the ruling notes that Big Fish Casino allows users to transfer chips to one another, creating a mechanism for people to cash out in transactions set up through secondary “black market” operations, it explicitly rejected the argument that such a mechanism meets the criteria for the chips to be things of value. The reasoning for that part of the ruling was that Big Fish’s terms of use specifically prohibit the sale of virtual chips.Related JobsSenior Game Designer – UE4 – AAA United Kingdom Amiqus GamesProgrammer – REMOTE – work with industry veterans! North West Amiqus GamesJunior Video Editor – GLOBAL publisher United Kingdom Amiqus GamesDiscover more jobs in games Instead, the reason Big Fish Casino chips qualified as things of value was how they extend users’ privilege of playing the games.”The virtual chips, as alleged in the complaint, permit a user to play the casino games inside the virtual Big Fish Casino,” the appellate court ruled. “They are a credit that allows a user to place another wager or re-spin a slot machine. Without virtual chips, a user is unable to play Big Fish Casino’s various games.”Washington has been particularly vigilant when it comes to gambling in and around games. In 2016, the state’s Gambling Commission ordered Valve to take action against third-party gambling sites using Steam for wagering through Counter-Strike: Global Offensive, noting one site handled $1 billion in illegal skins gambling in the span of just seven months. Earlier this year, state senator Kevin Ranker introduced a bill aimed at determining whether loot boxes in games constitute gambling.Celebrating employer excellence in the video games industry8th July 2021Submit your company Sign up for The Daily Update and get the best of GamesIndustry.biz in your inbox. Enter your email addressMore storiesEpic vs Apple – Week One Review: Epic still faces an “uphill battle”Legal experts share their thoughts on the proceedings so far, and what to expect from the coming weekBy James Batchelor 12 hours agoEpic Games claims Fortnite is at “full penetration” on consoleAsserts that mobile with the biggest growth potential as it fights for restoration to iOS App StoreBy James Batchelor 15 hours agoLatest comments Sign in to contributeEmail addressPasswordSign in Need an account? Register now.last_img read more

Unprecedented move by German prosecutors over Nazi imagery in satirical game

first_imgUnprecedented move by German prosecutors over Nazi imagery in satirical gameGame serves “both the arts and civic enlightenment” says PPOHaydn TaylorSenior Staff WriterTuesday 15th May 2018Share this article Recommend Tweet SharePotentially setting a legal precedent, German prosecutors have opted not to pursue legal action against makers of a video game which a depicted a mirrored swastika. Bundesfighter II Turbo was published last year by public broadcasting organisation Funk Media in an effort to encourage young and disenfranchised voters to participate in the German federal elections. The satirical web browser fighting game — featuring prominent German politicians as playable characters — was reported to authorities by a member of the Association for Germany’s Video and Computer Players (VDVC). In the game, Alexander Gauland — leader of the far-right Alternative for Germany (AfD) — has a special move that involves contorting his body into the shape of a mirrored swastika. Under German law, the depiction of Nazi imagery in media is strictly regulated, and is only permissible under “social adequacy” clauses such as for education or satire. However, following a ruling in 1998 over Wolfenstein 3D, a German high court ruled that Nazi imagery was prohibited in video games and no consideration was given to the “social adequacy” clause.Due to the Wolfenstein 3D decision, no game which depicts Nazi imagery is able to obtain an age-rating from the German rating board (USK), including satirical games. In the case of Bundesfighter II, the Public Prosecutor’s Office (PPO) confirmed there are no legal proceedings underway, despite noting the clearly recognisable mirrored swastika in the game, contravening the high court ruling.According to the PPO, the game serves “both the arts and civic enlightenment” — stating it is irrelevant whether digital games are art or not — and is therefore exempt from censorship. It is the first known decision from the PPO not to investigate a potential breach of censorship law in a video game. The Attorney General’s Office upheld the decision, suggesting that current legislation was “outdated”. The attorney general also noted that more adequate age-rating schemes had been implemented since 1998, and that video game have been recognised as art on principle since 2008. Related JobsSenior Game Designer – UE4 – AAA United Kingdom Amiqus GamesProgrammer – REMOTE – work with industry veterans! North West Amiqus GamesJunior Video Editor – GLOBAL publisher United Kingdom Amiqus GamesDiscover more jobs in games A recent example where censorship was enforced is Wolfenstein II whereby developer Machine Games had to remove all Nazi imagery for its German release, despite the game’s artistic merits. While this decision by the PPO could set a legal precedent for games like Wolfenstein in the future, it’s not guaranteed. According to Sebastian Schwiddessen, an associate at legal firm Baker McKenzie, the attorney general’s decision would not necessarily bind the USK, which could still cite the original 1998 high court ruling as reason to deny age-rating. Celebrating employer excellence in the video games industry8th July 2021Submit your company Sign up for The Daily Update and get the best of GamesIndustry.biz in your inbox. Enter your email addressMore storiesEpic vs Apple – Week One Review: Epic still faces an “uphill battle”Legal experts share their thoughts on the proceedings so far, and what to expect from the coming weekBy James Batchelor 12 hours agoEpic Games claims Fortnite is at “full penetration” on consoleAsserts that mobile with the biggest growth potential as it fights for restoration to iOS App StoreBy James Batchelor 15 hours agoLatest comments Sign in to contributeEmail addressPasswordSign in Need an account? Register now.last_img read more

Dapper Labs secures $15 million investment

first_imgDapper Labs secures $15 million investmentCryptoKitties developer will use funds to open US subsidiary led by former Disney and Unity execsHaydn TaylorSenior Staff WriterThursday 1st November 2018Share this article Recommend Tweet ShareCryptoKitties developer Dapper Labs announced today the successful closure of a funding round worth $15 million. Led by venture capital firm Venrock — along with Animoca Brands, GV, and Samsung Next — the new investment will allow the Canadian company to expand both locally and globally.Plans include the establishment of a US subsidiary led by former executives from Unity and Disney. CryptoKitties is reportedly the world’s most successful blockchain consumer product, with some items being sold for as much as $114,000. Since launching in late 2017, the game has seen 3.2 million transactions and tens of millions of dollars move through the platform. “Our mission at Dapper Labs is to use games and entertainment to bring the values of decentralisation to billions of consumers worldwide,” said CEO Roham Gharegozlou. Related JobsSenior Game Designer – UE4 – AAA United Kingdom Amiqus GamesProgrammer – REMOTE – work with industry veterans! North West Amiqus GamesJunior Video Editor – GLOBAL publisher United Kingdom Amiqus GamesDiscover more jobs in games “This round of financing was about getting the right partners around the table to bring compelling content to the blockchain – and make sure usability and infrastructure allow for adoption by mainstream consumers.”The list of Dapper Labs’ previous investors include esports firm aXiomatic, Reddit founder Steve Huffman, and the Andreessen Horowitz Cultural Leadership Fund. To date, Dapper Labs has raised $27.85 million in investment.Celebrating employer excellence in the video games industry8th July 2021Submit your company Sign up for The Daily Update and get the best of GamesIndustry.biz in your inbox. Enter your email addressMore storiesCEO says Paradox “can do better” as Q1 profits plummet”We are not satisfied with the quarter,” CEO Ebba Ljungerud saidBy Marie Dealessandri 13 hours agoStarbreeze’s Q1 losses shrink 95% to $505,000New CEO Tobias Sjögren says “the road ahead is clear” as Payday 3 is fully funded By James Batchelor 13 hours agoLatest comments Sign in to contributeEmail addressPasswordSign in Need an account? Register now.last_img read more

EA stock bounces back in wake of Apex Legends success

first_imgEA stock bounces back in wake of Apex Legends successAfter 18% drop following Q3 financials, company now trading higher than before the dipRebekah ValentineSenior Staff WriterFriday 8th February 2019Share this article Recommend Tweet ShareCompanies in this articleElectronic ArtsEA has had a rather uneven week between its Q3 financial results and the release of Respawn’s free-to-play battle royale, Apex: Legends. Fortunately for the publisher, it looks like the latter may have healed some of the ills of the former.Following the Q3 financials, EA stock dipped a whopping 18% by closing on February 6 as the company announced it had missed its quarterly sales target, including the target unit sales for its major release for the period, Battlefield V. The game sold 7.3 million units in its launch quarter, where EA had anticipated closer to 8.3 million.Related JobsSenior Game Designer – UE4 – AAA United Kingdom Amiqus GamesProgrammer – REMOTE – work with industry veterans! North West Amiqus GamesJunior Video Editor – GLOBAL publisher United Kingdom Amiqus GamesDiscover more jobs in games EA remained optimistic for the remainder of the year, however, predicting its February release of Anthem to sell as many as 6 million units before the end of the fiscal year and also anticipating success from Apex Legends, which launched Monday.Though the jury will be out on Anthem until the end of the quarter on Anthem, Apex Legends has spend the week inspiring optimism, it seems. The free-to-play battle royale had a successful opening week, reaching 10 million total users and one million concurrent users in the first 72 hours after launch.Other factors may of course be at play, but in the wake of the announcement of 10 million players at the end of the day yesterday, EA’s stocks have surged back up to even higher than they were before the financials. At the time of this writing, share price has risen 14.47% from yesterday’s closing, up to $96.27 a share. For comparison, EA opened at $92.52/share on February 6 before the massive drop.Celebrating employer excellence in the video games industry8th July 2021Submit your company Sign up for The Daily Update and get the best of GamesIndustry.biz in your inbox. Enter your email addressMore storiesEA leans on Apex Legends and live services in fourth quarterQ4 and full year revenues close to flat and profits take a tumble, but publisher’s bookings still up double-digitsBy Brendan Sinclair 3 hours agoEA acquires Super Mega Baseball developer Metalhead SoftwareCanadian studio fills another gap in FIFA publisher’s expanding sports portfolioBy James Batchelor 6 days agoLatest comments (1)AbdulBasit Saliu Mechanic, Flowmotion Entertainment Inc2 years ago Electronic Arts (EA) retakes it #1 spot from Activision Blizzard in terms of revenue and /or market capitalization and they stop being less focus on being greedy and more risk taking like in 2008-2009 pre-Activision and Blizzard merger. Here i am hoping Apex is the only competition to Fortnite going forward. 0Sign inorRegisterto rate and replySign in to contributeEmail addressPasswordSign in Need an account? Register now.last_img read more

Paradox’s Fredrik Wester defends company’s DLC policy

first_img A year ago Personally I think paradoxes strategy is spot on.I’ve bought every dlc for ck2 euiv and stellaris, several for hoi, all for surviving Mars and cities skylines. Over time. And the content released in these expansions (not the cosmetic or sounds which I don’t buy) has typically been fantastic.I’ve spent over 600 hours in ckii, 500 on euiv, 600 on stellaris etc. So that’s plenty to justify the prices. I didn’t buy all dlc immediately either, so when I was “left behind” with the free content that suited me for many many hours alone for the most part.Ckii is a great example too. Look at EA, Bethesda or any other major publisher and after a year they’d be looking at the sequel to the sequel a year after launch. Ckii was released in 2012 and has been developed ever since, that means bug fixes, content patches, balances, feature improvements etc. So you don’t have to waste your money to play the newest version.Plus, if you dont care for a particular expansion (ie for me I didn’t really care for the rajas of India expansion) so don’t buy it, have fun with the free content, and if there’s a good sale on or you change your mind pick up the expansion later. You can still enjoy free quality continuous updates, or play wjtb your mates. If it was a sequel, you wouldn’t be able to do any of that.All I can say to summarise is paradox has hit the nail on the head with its strategy. Huge respect to all of them, both publisher and Dev side. Paradox’s Fredrik Wester defends company’s DLC policyFormer CEO says business model isn’t flawless but funds ongoing development and allows for experimentationJames BatchelorEditor-in-ChiefFriday 5th July 2019Share this article Recommend Tweet ShareFredrik Wester has spoken out to defend Paradox Interactive’s approach to premium DLC for its strategy titles, insisting it’s a “fair and balanced way to release content.”The publisher has been criticised by some players for the sheer amount of additional content release for its games. Crusader Kings 2, for example, has seen over $300 worth of DLC released since it launched in 2012.Some Paradox fans see this as too high a cost of entry, particularly in an era when so many games offer free post-release content to keep players engaged.In a Twitter thread, Wester — former CEO and now executive chairman of the Paradox board — said the DLC model is “based on the idea that you pay for new content after the full game release” and “helps to finance the further development of the game, which is of gain for all players.”He adds that Paradox does indeed do free updates and upgrades every time it releases new DLC so those who choose not to buy get additional content to play with. This “would not be possible to fund” without other players buying said DLC.Wester also notes that multiplayer matches are run in a way that connects players without DLC to those who do have it, so they can access all content in multiplayer without having to pay for it. This, he says, “has been a way for us to avoid splitting up the player base.””I know this is not a flawless model and that a lot of new players get intimidated by seeing a game with hundreds of [dollars] in DLC,” he wrote. “However, we also run deep discounts on all our games and DLCs regularly.”Like with all business; if you don’t think it’s worth it, don’t buy it.”He wrapped up by adding that the DLC model “allows us to experiment more” and make more interesting content over time, and that he personally favours cosmetic DLC since they have no gameplay effect but still help to fund development.”Is this a perfect model for releasing content? No,” he concluded. “Are we constantly working to make it better? Yes. Are we listening to feedback from players? Yes.”Are we listening to people who ‘BLURG BLARGH GREEDY BASTARDS DLC BAD OOGA BOOGA’? No.”GamesIndustry.biz addressed this issue with Paradox’s new CEO Ebba Ljungerud last year, where she echoed many of Wester’s points. She also pointed to the amount of hours and value available in a title like Crusader Kings 2, thanks in no small part due to the extra content.Related JobsSenior Game Designer – UE4 – AAA United Kingdom Amiqus GamesProgrammer – REMOTE – work with industry veterans! North West Amiqus GamesJunior Video Editor – GLOBAL publisher United Kingdom Amiqus GamesDiscover more jobs in games “We have to deal with the issue of people being conditioned by how other games in the industry work. And the conditioning is, if you don’t get all of the content then you’re missing out on something, which is not true in our games,” she said. “We need to get better at bundling and presenting stuff on our product pages, so that when you come in you’re not inundated with a torrent of DLC and you feel like you’re getting gouged.”Last week, Wester appeared on a GameLab panel hosted by GamesIndustry.biz, where he said the 70/30 revenue split operated by digital stores such as Steam is “outrageous.”Celebrating employer excellence in the video games industry8th July 2021Submit your company Sign up for The Publishing & Retail newsletter and get the best of GamesIndustry.biz in your inbox. Enter your email addressMore storiesEA leans on Apex Legends and live services in fourth quarterQ4 and full year revenues close to flat and profits take a tumble, but publisher’s bookings still up double-digitsBy Brendan Sinclair 2 hours agoUbisoft posts record sales yet again, delays Skull & Bones yet againPublisher moves away from target of 3-4 premium AAA titles a year, wants to build free-to-play “to be trending toward AAA ambitions over the long term”By Brendan Sinclair 6 hours agoLatest comments (1)Joshua Hughes Programming 0Sign inorRegisterto rate and replySign in to contributeEmail addressPasswordSign in Need an account? Register now.last_img read more