Blizzard Co-Founder’s Game Startup Struggles Amid Industry Glut

(Bloomberg) -Video game Giant Blizzard Entertainment’s founding partner Mike Morhaime sent a letter that he didn’t want to write to his new company Dreamhaven this week.

According to the letter by Bloomberg News, the company sold only 130,000 units a month after releasing Wildgate, a Dreamhaven Multi -player shooter game. Morhaime, the company’s other game Sunderfolk has sold only 62,000 copies since April.

Although Morhaime received positive investigations, both titles were carried out below expectations. He’s looking for a new financing for Dreamhaven, but the company will have to withdraw.

Mor We monthly expenses are leaving the income behind, Mor Morhaime wrote. The focus now said, “urgently reducing costs, ve and added, iz We are determined to dream of survival in this matter ..

Dreamhaven is not the only noble video game company that faces difficulties to draw players in the first games. Some of the most promising new studios of the United States hit barricades. Residential companies, who abandoned to start their own initiatives, are struggling to hit and develop even after tens of millions of financing.

Founded by Blizzard Veterans, Frost Giant Studios Inc. launched Stormgate in August. Founding Joint and Executive Officer Chairman Tim Morten said last week that he did not receive traffic or sales of the game in LinkedIn Post last week.

The company reported to the Stock Exchange Commission in April in April, “the income from early access game sales is not enough to support future operating expenses”. The company lost $ 11.7 million last year with $ 1.4 million sales.

In response to a query from Bloomberg, Morten said, “The game business has always been naturally hit, but as the existing games continued to attract players, competition from other digital media such as Tiktok increased.” “A record number of new games is being launched, so the challenge is more difficult than ever.”

Video game companies are struggling to spy on the players from the “Forever Games” they return to each night. Fortnite, League of Legends, Counter-Strike 2 and Dota 2 titles are regularly renewed with new content to concern players. New versions do not have a long -standing community with gravity and the catalog of previously purchased digital elements.

Most of the new games that fight to find their audience are designed for more than one player at the same time, especially saturated, but quickly rapidly rapid sales, not repetitive in -game purchases that want to earn income.

On the pandemi, unprecedented number of people turned to games to spend time – and investors noticed. According to the data obtained from Pitchbook, it is excited about the explosion, the total number of investments from venture capital and venture capital has doubled in 2021. This money went to many video games directed by developers who want to adopt a more agile approach to games. Now Microsoft Corp. and Tencent Holdings Ltd’s Riot Games, a part of the Activision Blizzard, such as a distinctive different from past companies.

Easy money, new studios bloomed. Now that it is now developing games or fully on the market, many are calculated with a more saturated market and the difficulties that provide additional financing. According to Pitchbook, since the 2021 summit, the number and total number of agreements has fallen half. Eric Bellomo, the senior analyst for the game of the research company, showed a lack of hits and a saturated market in a June report in a report that explains the decline.

Fantastic Pixel Castle, founded by Riot Games graduate Greg Street, is at risk of losing funds from Netease Inc., according to three people who know their agreements. The company is working on many ambitious online role-playing games-the same Species were developing at Riot Games.

Fantastic Pixel Ghost, Ghost, initially had a budget of more than $ 100 million than Netease. The company now wants to reduce the size of its budget.

Bloomberg reduces expenditures supported by the increasing skepticism of CEO William Ding’s game industry.

When asked about the fanastic pixel investment, the company said, “NETEASE is determined to present various games that appeal to players and globally players,” he said. “To regularly evaluate the progress, applicability and potential success of all our games and studios and make decisions based on these issues is both our standard industry application and our responsibility as a business.”

Netease spokesman objected to the size of the game’s budget.

Morhaime is a legendary figure in video games that help develop titles such as World of Warcraft, Diablo and Overwatch while in Blizzard. In 2023, Microsoft, the largest video game combination of all time, purchased the parent company Activision Blizzard Inc. for $ 69 billion. Until then, Morhaime had gone by establishing Dreamhaven in 2020.

In an interview, Morhaime said that Wildgate has reduced its price to $ 20 in the Steam game platform. The game will make the game more accessible to players.

“It was always difficult to make commercially successful games – I have seen it throughout my career, B said Bloomberg. “As game manufacturers, we must adapt to the environment and continue to listen to our communities and feedback.”

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