2K Sports could be on its last legs

[Leftos]

PROLOGUE: I know this seems like off-topic for an NBA 2K13 specific forum, but the future of 2K Sports as a company could very much (<-- understatement here) affect what happens with NBA 2K13, what state it's delivered to us in, and if we're to ever receive any support or a next installment.


http://www.operationsports.com/DustinT/ ... 2k-sports/

We all knew it was coming, we just didn't have the proof.

As most of you should know by now, Kotaku has said the MLB 2K series is all but dead.

So where does 2K go now? They lost NHL 2K a few years ago, even after a solid outing. NFL 2K is long gone, and I won't even get into that debate. Top Spin is a great game, but tennis just isn't popular enough. The NBA 2K series has been both insanely popular and successful, which ultimately led to them practically stopping the production of the only competition they had. But with NBA Elite 11 getting axed two years ago, and with EA Sports taking a year off from the NBA, 2K did nothing to separate themselves even more than what they already have.

The crew down at 2K won the battle with EA for the rights to use Michael Jordan in the game, which was the beginning of something that was supposed to be huge. But after arguably the greatest sports game ever made (NBA 2K11), 2K12 seemed to be a letdown. The online servers are still shotty, which is one thing EA always tends to get right. The gameplay became so advanced and fantastic that they lost the casual market; a causality of their own hard work and success. It really is a shame.

But now with NBA Live making a return, shouldn't 2K be worried? I highly doubt whatever EA puts out will be better than 2K13, but it will be closer than most think. EA knows that if their product is garbage, they will have lost the entire NBA scene for good. They won't mess this up.

So what happens when NBA Live is really, really good? What if it gets to the point that 2K starts losing money to EA? It's damn near impossible to survive the sports market with one game, regardless of how flat-out, ridiculously good it is.

This next year is going to tell us a lot about the sports gaming market. I hope I'm wrong. But if I'm not, 2K Sports is going to need a lot of luck.

Do you think 2K Sports will ultimately survive with nothing but NBA 2K in their sports lineup?

I've written time and time again that poor management choices can do a lot of harm. I had written this a while back over at OperationSports:

11 roster updates, new shoes, 2 courts updated (Pistons & Raptors), a new audio update today (Jan 27), 2 console patches.

Is the roster complete? Nope.
Are some of the biggest gameplay and otherwise gripes fixed such as the speed factor (or lack of it), the Team Stats bug, and others? Nope.

They have been working on delivering. Just not the quality or quantity one would be expecting from all the hype they had their marketing representatives build up.

2K is most probably going the same path other companies are going. Greedy owners trying to make the most out of this economic crisis, cutting staff to the bare minimum and seeing how much profit they can make until their product is so bad that people won't buy it anymore.

Intel recorded record earnings per employee during the crisis. Why? Because of the lay-offs.

2K has probably fired too many people, and there's not enough of a development team anymore to work on delivering everything they've promised and work on 2K13.

My experience with game companies, current and former employees and employers, after chatting with and attending seminars from both of them, tell me that most probably this whole screw-up is the bosses being greedy and going for too much from too few people.

Look up the EA situation some years ago, when the wives of the employees formed a coalition to stop EA's abuse of its workers, having them work Saturdays and Sundays, long hours, till they were dead of exhaustion.

Look up what happened with Team Bondi, the team behind L.A. Noire, and how they had to break ties with the publisher because of the way it treated them.

Look up any company in the computer sector right now. Lay-offs, staff that's just enough to get the work done, yet record profit margins for the greedy owners.

Games are only going to go downhill from now until we vote with our wallets and demand quality again.

End of story.

2K is probably going to stop the MLB franchise, and it's going to be left with too few franchises. The profit margins seem to get smaller and smaller for 2K, which already apparently lacks QA and a decent post-release dev team to actually keep offering the content and support a game release requires. Things just look grimmer and grimmer, and I don't think 2K is anywhere near hiring or offering bonuses to current employees.

What do you think? Is 2K13, in whatever franchises 2K has left, one of the last iterations? What direction do you think 2K Sports should take, if it's to survive and deliver quality, competitive products for years to come?

[Andrew]

I guess it's possible, but it's worth noting that the NBA renewed their license for multiple years, just as they did with EA Sports. It seems like their sports label is being whittled down to just a few releases but so long as they're around and can afford to produce NBA 2K, I'd say the games will keep coming. It's also worth noting that Take-Two Interactive has some valuable franchises and did pretty good business last year.

[benji]

2K was losing money on the MLB agreement every single year which is why they were openly saying they wanted out of the deal. (NHL was also a money loser.)

On the other hand, the NBA game made all the profits of their sports division and was their best selling franchise even before EA dropped out. It's been gangbusters for them since then.

The lack of support/quality is because it's a yearly title (really ten months) although now you'll have any reserve manpower put onto MLB switched over only to NBA.

Team Bondi collapsed because its leader was a meglomanical dictator who made things shit for both the developers and publisher to the point that Rockstar basically boxed him out so the game could get finished.

VC has recent job postings: http://2ksports.com/info/jobs

Look up any company in the computer sector right now. Lay-offs, staff that's just enough to get the work done, yet record profit margins for the greedy owners.

Okay, I looked up Take Two. Their revenue fell, as did their gross profits and their net income went from positive to negative. $48 million to $-109 million. Their software development costs increased from $132 million to $211 million.

Games are only going to go downhill from now until we vote with our wallets and demand quality again.

So in other words, how things currently and always are?

But after arguably the greatest sports game ever made (NBA 2K11), 2K12 seemed to be a letdown. The online servers are still shotty, which is one thing EA always tends to get right. The gameplay became so advanced and fantastic that they lost the casual market

Except the game again sold more than any NBA game ever, was constantly in the NPD top ten for months and all this despite the lockout.

[Leftos]

So you're saying that 2K Sports will continue even if with just NBA as a franchise, because of its profits?

If Take Two is losing so much money, why would it allow 2K to use the "reserve manpower" of MLB and not force them to just lay them off? Who's to say that with all the money they're losing, they won't be cutting staff even from successful franchises such as the NBA 2K one, to the point where the product is just good enough to have people buy it, riding the buzz and sales of 11 and 12? Who says Take Two isn't going to make the same dreadful decisions as a result of negative income? Why wouldn't they milk whatever's left of the cow, then take the money and run?

EDIT: The part that says "any company you would look up is doing record profit margins" is too much of an overstatement. I had written it during a time where I kept reading about big companies laying off tens of thousands of people and then reporting record profits per employee, happy of their successful strategy.

[benji]

VC has always operated on essentially shoestring budgets and has never had the resources that EA Sports can deploy. Using them to make all the 2K Sports games was Take Two's brilliant decision in hopes of getting some sweet sweet sports money even though they didn't have either of the two largest sports in the world and were going to see huge development cost increases. (This is why SEGA sold them, it only worked last generation and when they were alone on the Dreamcast, by which point resources had already been invested in the core assets.)

And then they signed one of the stupidest licensing deals in history. The company was losing more money every single year on the MLB games, despite a near monopoly on sales, than they paid for all of VC.

Despite that, 2K Sports was profitable merely off the NBA game every year and massively so the last two years. Now they won't have the financial and resource sinkhole of the MLB games.

Now yes, of course a historically poorly run company as Take Two could cut the already low development costs of one of their top franchises, rather than taking advantage of the lack of flushing money down the toliet on MLB, just as a competitor re-enters the field and will surely take some chunk of the market. Or they could eliminate dead weight from both teams, integrate the best people from both teams, give a slight bump to funding (since they aren't throwing away a third of the NBA games profits on MLB anymore) short term and try to maintain a significant market share against what will be a massive marketing campaign if anything.

Why wouldn't they milk whatever's left of the cow, then take the money and run?

Because that's not how you continue to stay in business.

If your goal is to loot the company and bail like Take Two's founder did before he went to jail, then sure. But if you want to continue operating and making money you invest in your profitable ventures.

And since the current CEO has been going around bitching about the former management (which was basically gutted after the founder bailed out) locking the company into dead-weight deals like MLB and others they've jettisoned while praising the NBA game and new IPs it seems reasonable that he may seek to keep the NBA game profitable. (Especially since he's the one who signed off on bringing it to PC, Online into China, spending the money to get Jordan, etc.)

Sports games are good money if you have a proper licensing agreement because they're cheap to make and come out every year. If 2K runs into issues, like if say BioShock bombs and when XCOM does, it's the Games side that's going to get the cuts first. A cheap source of free money like NBA will be last to go.

I'd be more concerned about VC wanting to do NHL games again and Take Two going for it since some of the NHL 2K games were profitable and they'd want to take back some of the market share they lose to Live. Since that would once again divide a developer that probably doesn't have the resources to stretch. But that won't be for at least a year.

I don't have access to the credits for a recent MLB game, but it used to be that basically everyone on VC worked on every game. With only a small core team focused solely on one game. It's a major reason they bring forward so much legacy stuff compared to how EA seemingly discards and rebuilds from scratch.

[Leftos]

Pretty interesting insight Benji. Thanks for that.

[benji]

It's worth noting that one reason Take Two was so poorly run is because it was a discount publisher that lucked into a top down 2D game nobody else wanted to publish that overnight turned into one of the largest franchises in gaming history. And then went crazy with the money it made buying up everything in site trying to become one of the big boys while the founder and his buddies tried to steal hundreds of millions of dollars.

And despite this still relies heavily on that one franchise and some offshoots of it. If BioShock hadn't become such a hit the company would have been a disaster area with GTA an EA franchise.

Hell, even with that, much of Rockstar Games is a disaster area in terms of being a properly managed company. GTA, like Modern Warfare/WoW for Activision, Madden/FIFA/The Sims for EA, etc. gives you a huge margin of error. Something THQ found out the hard way this gen.

[Mile23]

I know that many will disagree but 2K recently going in "blind alley" ... My attitude is that EA is not targeted threw the NBA last year. I'm not fan of EA sports, but there is some truth in the fact that this year will be "crucial"