Top 10 Gaming News Stories 0f 2007 December 28, 2007 John JCal Callaham

Top 10 2007 News Stories

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It has been an incredibly busy year for the video and PC game industry. Surprise mergers, unexpected developments and lots of turmoil have almost been the norm in the past 12 months but with the year almost finished it's time to take a look back at the major events of the past year and how they might affect the game industry in the next 12 months. We've picked out our selections for the top 10 biggest gaming news stories of the year (with a few additional honorable mentions) and we think this quick review of 2007 will serve as a way to perhaps better predict what might happen in the near future.

10. Windows Vista/DirectX10 Launch

In late January with much fanfare, Microsoft introduced the consumer version of their next version of the Windows PC operating System. Windows Vista wasn't just a new OS for business or the home, however, as Microsoft pushed the fact that it would also serve as a new revitalization of PC gaming with the launch of DirectX10, the new graphics API that promised to bring the visuals of PC gaming far above those of current consoles.

It's been nearly a year since Vista's consumer launch and the result for PC gaming hasn't been the huge leap that Microsoft tried to push on gamers. Vista's performance on older PC games was less than Windows XP and many games had to be patched up to even work properly with Vista. And those DirectX10 games? As of this writing only a handful have been released either out of the box or via patches and the amount of upcoming PC games that will use DirectX10 is still fairly small. While Vista will eventually get into more and more gamer's homes at the moment DirectX9 based titles are still being developed and likely will for years to come.

A side-story to Vista and gaming is Microsoft's Games For Windows Live program which is trying to create a more console-like approach to PC user interfaces, networking, matchmaking and more. However, that too has been mixed with only a handful of games (Halo 2 Vista, Shadowrun, Gears of War PC, Universe at War: Earth Assault, Kane and Lynch) currently supporting Games For Windows Live. Gamers have to to pony up money to get the Gold version of Games For Windows Live (for features like TrueSkill Matchmaking, multiplayer achievements, and, if the game supports it, cross platform play with the Xbox 360 version). Again this new program hasn't been embraced by many developers yet. 2008 will show if Microsoft's push for Games For Windows Live will be taken up by more developers.

9. Silicon Knights/Epic Games Lawsuit

Too Human is an Xbox 360 exclusive sci-fi action game that was heavily hyped even before its first public showing at E3 2006 by publisher Microsoft and developer Silicon Knights. It was a game, like many others, that used the Unreal Engine 3 game development tools created by Epic Games. However, the E3 demo for Too Human was panned by the press so heavily that Silicon Knights went into stealth mode to develop the game. As it turned out, Silicon Knights decided to blame much of Too Human's development problems on Epic's Unreal Engine and in mid-July filed a lawsuit against Epic, saying that the company's engine "did not work as Epic represented it would and, moreover, Epic has been unable or unwilling to fix it."

Epic struck back fast with its own counter-claim against Silicon Knights, saying that the developer misappropriated the Unreal Engine 3 technology and wanted to "pay nothing for it, and use it any way it pleases". At the time of this writing it seems like the case will be heading to some kind of trial; Epic tried to get the case dismissed, but a judge allowed the Silicon Knights lawsuit to continue.

This isn't the first time developers have mentioned issues in developing games on Epic's Unreal Engine 3. Indeed the PS3 platform seems to be a big issue for the engine tools with games like Medal of Honor: Airborne, Stranglehold and BlackSite: Area 51 releasing the PS3 versions of the games weeks or even months after the PC and Xbox 360 versions. While some have said the Silicon Knights lawsuit has some merit other developers have come to Epic's defense, including Gearbox Software head Randy Pitchford, who said in a recent interview that he wasn't sure if "....they've gotten too many inexperienced developers or they're just cry-babies. I just don't know." It's likely that the lawsuit will continue through the court system in 2008 and if Silicon Knights manages to win the lawsuit it could change the way third party middleware software programs are made and marketed to game developers.

8. Manhunt 2 Banned In UK

It was a game that didn't get the best review marks and didn't generate a ton of sales, yet Rockstar Games decided to go ahead and make a sequel to their brutal stealth action title Manhunt. The next game, Manhunt 2, would be released for the PS2, PSP, and Nintendo's Wii system this year in the US but that game has yet to be released in the UK thanks to the British Board of Film Classification deciding this summer that the game was so violent it would not to give a rating to Manhunt 2, effectively banning it for sale in that country.

Rockstar Games appealed the decision while at the same time delaying the release of the game from its initial August ship date. After a revised version of the game was also banned by the BBFC, Rockstar took their case to the appeals board and just a few weeks ago the board in a 5-4 vote recommended that the game be allowed to be put on sale in the UK. The BBFC, however, is planning to take its case for the ban to a UK court to keep Manhunt 2 from being put on store shelves.

In the US, the initial version of Mahunt 2 received an AO rating from the ESRB ratings system. Giving a console game an AO rating effectively bans the game since none of the three console makers allow AO rated games on their systems (PC games that are AO rated are of course not affected). After a revised version of the game was sent to the ESRB which blurred some of the kill animations, the ESRB re-rated Manhunt 2 with an M rating. Rockstar released all three versions of the game in the US on Oct. 31. Both Rockstar and the ESRB were attacked by lawmakers and media watchdog groups for this move and it got the game a lot of free publicity in the press but in the end Manhunt 2 once again got mediocre reviews from the gaming press and fairly low sales.

2008 should see the UK court system give the final word on the release of Manhunt 2 in that country but in the US it seems the court of supply and demand have given their final verdict already; Manhunt 2, while violent, isn't all that great of a game.

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7.The New E3 And The E For All Launch

The summer of 2006 was the time period when shockwaves went through the game industry as word came down that the massive 60,000+ E3 trade show had come to an unexpected end due to publishers not willing to spend millions of dollars on exhibit hall space at the Los Angeles Convention Center. E3's owners, the Entertainment Software Association, decided that a smaller invite-only event was the way to go. The renamed E3 Media and Business Summit launched in mid July 2007 but instead of the LA Convention Center the event was spread out over several hotels in nearby Santa Monica.

The final results of the first mini-E3 were mixed. Many publishers and reporters felt the more intimate settings actually helped to present more info on the games displayed at the show and publishers of course like the fact that the loud and massive exhibit hall of past E3s was gone. However, spreading the event out over several hotels got old really fast for many reporters, most of which missed more than one appointment while trying to walk all over town as well as being shuttled over to the Barker Hanger were many publishers had set up playable game kiosks. Overall the media attention to E3 was smaller than in the past but it still turned out to be an important event in the game industry calendar. Just this week it was announced that E3 2008 would return to the LA Convention Center in mid-July and while it will still be a small invite only affair it's assumed that having one central location should help with the problems that this year's E3 had.

While E3 was being revamped, the show's organizer IDG World Expo announced plans in early January to hold a consumer game event that many had predicted would be the over-the-top kind of spectacle that E3 once was. The E For All Expo was finally held at the LA Convention Center in mid-October but the reception to it was chilly thanks to many publishers deciding not to attend along with high ticket prices and a date that was smack dab in the middle of the busy fourth quarter, meaning that a lot of the games on display were either already on store shelves or only one or two weeks away from being released. The result was that only 18,000 people attended the four-day event (organizers had said in previous interviews that they were hoping for between 20,000 and 30,000 attendees). The 2008 E For All is currently scheduled for the last weekend of August which is already occupied by Penny Arcade Expo in Seattle, a well established consumer gaming convention that had over 37,000 people attend in 2007. It remains to be seen if E For All will move its dates, stick with what it has planned, or perhaps be cancelled entirely.

6. Xbox 360 Hardware Problems

Ever since the launch of Microsoft's Xbox 360 in November 2005, reports on message boards and web sites had numerous users telling their stories of multiple hardware failures for the console. At first, Microsoft tried to make the reported failures sound almost normal, saying that the reports were from a small fraction of Xbox 360 owners. However the reports continued to come in 2006 and 2007, and in late June Microsoft finally announced what many people had already known; the initial design of the Xbox 360 was flawed. As a result, the company announced it would take a $1 billion charge to improve customer support for the console.

That support included extending the Xbox 360 warranty to three years for any issue that had the "red ring of death" error. Microsoft also integrated new heatsinks inside new and refurbished versions of the machine, perhaps to help with overheating (Microsoft has never officially revealed any specific changes to the console's hardware set-up). While the company once again would not comment on what the percentage of Xbox 360 consoles have had hardware failures, the $1 billion charge says volumes about how widespread the failures got.

Since Microsoft's move to correct the hardware problems, there has been a noticeable decrease in the number of people complaining that they have gone through several Xbox 360 consoles. What's really important is the bottom line. People still want to buy an Xbox 360 console despite the hardware issues of the past and this past November saw over 700,000 consoles sold in the US. 2008 should be less of a traumatic year for console owners fearing the "red rings of death."

5. Bungie Breaks Away from Microsoft

The crown jewel of Microsoft's internal game development teams has been Bungie. Ever since the Chicago-based developer was bought by Microsoft and moved to Redmond, Washington in 2000, Bungie has helped Microsoft launch the original Xbox with the sci-fi shooter Halo, extend the first person shooter franchise further with the multi-million selling Halo 2, and finally this year completing the shooter trilogy with the Xbox 360's Halo 3, a game that became a mainstream entertainment media event normally reserved for the release of blockbuster feature films.

You would think that Bungie could write its own ticket at Microsoft but as it turned out Bungie wanted more; it wanted to be independent again. In early October, after word got out via leaked messages on the Internet, Microsoft and Bungie announced an agreement that got Bungie out of Microsoft's direct ownership (specifics were never reported). The company still has lots of ties to Microsoft; it's still based in Redmond and will continue to work on Halo-related games for Microsoft. However the newly free Bungie will now be able to work on its own projects as well, including possibly working on other consoles as well as the PC (Bungie reps have emphasized that their next immediate projects will be for the Xbox 360 only).

The breakaway of Bungie is representative of Microsoft's current uncertain first party game situation for the console. Another internal developer, FASA Interactive, shut down after releasing the critical and sales disappointment Shadowrun earlier this year. Bizzare Creations, who developed all four Project Gotham Racing games for Microsoft, was bought by Activision this past fall which means any future games in the PRG franchise will have to be developed by someone else. Will Microsoft's upcoming first party line-up continue to be strong or will all these changes have a detrimental effect?

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4. Electronic Arts Buys BioWare/Pandemic

Independent game developers BioWare and Pandemic, both of which were already highly successful, decided to merge their companies to form the massive independent developer BioWare/Pandemic in late 2005 via venture capital firm Elevation Partners. In late October of 2007, the surprising news came on the newswires; massive game publisher Electronic Arts had secured a deal to buy BioWare/Pandemic from Elevation at a price of nearly $800 million. It's the largest amount ever for a publisher to buy an independent game development studio.

Of course, BioWare/Pandemic isn't your ordinary developer. Separately BioWare created acclaimed and best selling games like Baldur's Gate, Neverwinter Nights, Star Wars: Knights of the Old Republic, Jade Empire, and the recently released Mass Effect. Pandemic's line-up of games is nearly as good with titles like the original Merceraries, Full Spectrum Warrior, Destroy All Humans, and Star Wars Battlefront. With the EA purchase, it gets the rights to future Mass Effect games along with the long-in-development fantasy RPG Dragon Age and the still mysterious MMO game (allegedly a new Star Wars MMO). It also gets from Pandemic the upcoming Mercenaries 2, the open world WWII game Saboteur and a number of unnamed projects (including reportedly a Batman movie based action game).

Will the price of BioWare/Pandemic be worth it for EA in the long run? Will the creative spirit that BioWare and Pandemic currently have continue after the EA purchase is finalized? Ultimately the result of this huge acquisition by EA will likely be due to how much freedom they give to the game development studios. If the independent feeling that BioWare and Pandemic had before its EA purchase continues, this could be both a great opportunity for everyone involved.

3. Starcraft II Annnounced

No other new game announcement in 2007 had the immediate impact that Blizzard made in mid-May when it announced during a Korean gaming event that it was finally working on Starcraft II, the long awaited sequel to their landmark PC RTS game. The rumors that Srarcraft II would be announced at the event was given wide press beforehand and the final reveal didn't dissapoint with the battle between the three very different factions continuing in a full 3D engine.

The original Starcraft was a major hit in the US and Europe but it became a true sport in Korea, with Starcraft players in that country becoming huge celebs in their own rights. At this year's BlizzCon in August, attendees got a chance to play an early build of Starcraft II and so far the response has been positive.

As usual with most Blizzard games, the official release date for Starcraft II is "when it's done" but many are expecting that the game will be released for the PC sometime in 2008. It's possible that Blizzard could have the number one and two best selling PC games in 2008; in addition to Starcraft II the company is also working on their second commercial expansion pack to their best selling MMO World of Warcraft.

2. Activision Blizzard Formed

Just a few days before the announcement, Electronic Arts' CEO said in an interview that while there would be other mergers in the game industry, most of them had already taken place. Opem mouth and insert foot just a few days later as Activision and Vivendi made a joint announcement (on a Sunday no less) that Activision would merge with Vivendi Games and form Activision Blizzard in a deal expected to be worth a massive $18 billion; it's the largest planned merger in game history (the deal has yet to officially close as of this writing).

So why merge their companies, especially since both are doing pretty good on their own? Activision is currently riding on huge sales of Guitar Hero III and Call of Duty 4 and Vivendi Games is riding the coattails of their Blizzard brand and its success with World of Warcraft. In short, Activision and Vivendi feel that a combination of their publishers would result in even more profit. While technically Vivendi Games becomes a wholly owned subsidiary of Activision as part of the merger, the combined Activsion Blizzard would be at least 52 percent owned by Vivendi.

With this massive new publisher on the horizon, it stands to reason that there might be even more publisher consolidation in the works. Eidos' parent company SCi has admitted it is in talks with unnamed companies about a possible purchase of Eidos, and Sega execs have hinted they might be on the trail of new game publisher deals. Activision Blizzard will become the largest third-party game publisher in the world, and in 2008 we may see even more activity on that front.

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1. Nintendo Wii and DS Sales

Without a doubt the biggest news development in the games industry in 2007 is the massive success of Nintendo's two hardware consoles; the set-top box Wii and the portable DS. Indeed, sales of the Wii, which reached nearly 1 million units in the US in November, could have been even higher had Nintendo made more consoles available to meet the seemingly higher demand. Over a year after the Wii launch, the console remains a hard-to-find device. The DS console is even more successful in terms of unit sales; the twin screen device with WiFi support had well over 1 million units sold in November in the US.

So what has Nintendo tapped into that the Xbox 360 and especially the PS3 haven't been able to do? One is low cost; the Wii and the DS are the lowest priced consoles in their categories. Another aspect is appealing to the masses with easy to play games via the motion sensing capabilities of the WiiMote controller. The DS has a niche for puzzle games and of course the still popular Pokemon turn-based action game franchise.

While both the Wii and the DS each have their faults, the truth is that their issues are overcome by the ease of use of the hardware and a line-up of games that, with only a few exceptions, are tailored to a more family-oriented theme. In 2008 you can expect Nintendo's Super Smash Bros. Brawl to be a major best seller and the Wii and DS will continue to fly off the shelves.

Honorable mentions

Several news events caught our eye as being important in 2007 but didn't make our top 10 list: