Video Game Industry Slump

[Omgwtfbbqkitten]

Re: Video Game Industry Slump

I'm not seeing the problem here.

I'm just saying without the quote it gives the impression the OP wrote it.

[Aeni]

Re: Video Game Industry Slump

I'm just saying without the quote it gives the impression the OP wrote it.

I'm sorry, I forgot to add the source under the link (old habits die hard) I'll edit my original post although I was pretty sure the link (site name) was enough (I think it's safe to say all of you are familiar with Gamasutra.

@Icemage

The issue they were discussing in the article thread by some of the game developers was that they were pretty much in agreement that the fundamental problem wasn't the fact that game sales was down (which usually follows a pattern with console cycles) but the fact that even slightly older (6+ mos) at steep discounts aren't moving out the door as fast as previous rates. That is troubling. What this means is that your estimates after you take into account pre-orders and initial sales are likely to be grossly inaccurate and that will give pause to the powers that be that control the decisions on when and how much a discount should be applied. I've noticed that some of the "less than marquee" titles haven't budged downward in price one inch 4-6 months after the initial release date. So, not only do you have this sticky issue of initial sale throughs decreasing from the previous 2-3 years, but now your "casual" market is completely passing up the "bargain bin" and ignoring releases entirely, probably in favor of just one or two titles for a given time period.

Again, we won't know the severity of the problem until the next 6 months are tabulated and how the 2012 Holidays play out, but it's looking quite shaky for the industry. Please note, this isn't "Chicken Little" as my only concern was for the overall health of the library over the next year. If people were psyched up for whatever may come, they need to take down their enthusiasm a couple of notches and maybe even their expectations.

The fact that despite the penetration of smartphones, that their overall game app sales still pale in comparison to the video game industry really speaks volumes as to what this all means for all developers as whole.

[Icemage]

Re: Video Game Industry Slump

@Icemage

The issue they were discussing in the article thread by some of the game developers was that they were pretty much in agreement that the fundamental problem wasn't the fact that game sales was down (which usually follows a pattern with console cycles) but the fact that even slightly older (6+ mos) at steep discounts aren't moving out the door as fast as previous rates. That is troubling. What this means is that your estimates after you take into account pre-orders and initial sales are likely to be grossly inaccurate and that will give pause to the powers that be that control the decisions on when and how much a discount should be applied. I've noticed that some of the "less than marquee" titles haven't budged downward in price one inch 4-6 months after the initial release date. So, not only do you have this sticky issue of initial sale throughs decreasing from the previous 2-3 years, but now your "casual" market is completely passing up the "bargain bin" and ignoring releases entirely, probably in favor of just one or two titles for a given time period.

I still disagree with the premise of the argument. The concept being pushed here is that new titles aren't doing well because consumer habits have changed; THAT much I agree with. Where I disagree is the idea that this equates to consumers spending less on gaming as a whole. I think the market has certainly shifted, but it's not shrinking in the way the author is trying to portray.

You even see it in the article, and the author just misses it entirely.

First is digital sales. The most popular accessories being sold are... Microsoft XBL points cards and Sony PlayStation Network funding cards. There is a lot of content being released online (see: record-breaking sales for Minecraft on XBL, Journey on PSN, plus Call of Duty map packs, etc.). Where is the money from this coming from? Completely from points cards? Certainly not. So some of the gaming dollars which used to get thrown at budget titles is probably being allocated to buying DLC like map packs or downloadable games.

Another major factor to consider is that this data is being based in North America on NPD Group data (since NPD doesn't deal with Japan or EU). The big player in North America for gaming sales is GameStop, and within the last five years, GameStop has very aggressively moved to push their used sales. Sure "some" of that money still funnels back indirectly into purchases of new games, but a lot of it doesn't, and a used game on the shelf presents a strong alternative to a bargain-bin priced new title.

Remember, NPD Group doesn't really have any way to track digital sales, and the resurgence of PC gaming via Steam, the strong profitability of both XBLA and PSN... none of that is being factored into the article, and I think that's a mistake.

Again, we won't know the severity of the problem until the next 6 months are tabulated and how the 2012 Holidays play out, but it's looking quite shaky for the industry. Please note, this isn't "Chicken Little" as my only concern was for the overall health of the library over the next year. If people were psyched up for whatever may come, they need to take down their enthusiasm a couple of notches and maybe even their expectations.

One thing that IS true is that fewer console games are being made, both home console and handheld. Cost of production has gone up, and I think everyone agrees that lifetime sales of individual games is down (as you can see above however, we disagree on the particulars of why).

The fact that despite the penetration of smartphones, that their overall game app sales still pale in comparison to the video game industry really speaks volumes as to what this all means for all developers as whole.

I don't think it's right to be dismissive of things like the iTunes app store, Steam, XBL, PSN, WiiWare/eShop, or even Origin... heck, let's throw Facebook (and it's fellow publicly traded partner, Zynga) on that pile too. Most of these services say much of anything about how much revenue they're generating, but the only one of those that might not be profitable is Origin (for the time being).

You can see that digital sales are a large growth opportunity, in a similar vein to how iTunes grew at the expense of older physical media (compact discs), and I personally see the trends in the article being attributable to the shift to online purchases plus competition from other gaming outlets.

Does that mean the physical game market is shrinking? Probably, if we're talking about home and portable consoles in general, but even that market is more or less holding its own for the time being. The future? Yeah, it's definitely hazy, but that doesn't mean the death of video gaming. It just means that the shiny plastic discs we've come to know and love might become more and more of an antiquated item in the same way that CDs are these days.


Icemage

[Malacite]

Re: Video Game Industry Slump

What's interesting to note also (and this has been pointed out in the major news outlets like FOX, MSNBC and CNN) is that despite the recession, video game sales have held steady compared to a lot of other sectors of the economy.

That said however, I don't know how well the new consoles are going to do given that it'll likely be at least 3+ more years before things seriously turn around - and that's assuming Europe doesn't implode.


EDIT: With all the talk of digital sales, I just read this and thought I'd share


http://v.cdn.cad-comic.com/comics/ca...0718-60601.png

[Omgwtfbbqkitten]

Re: Video Game Industry Slump

Yeah, I was bothered by the lack of focus on digital markets as well. While I'm not an avid iPhone game buyer, eShop, XBL, PSN, GoG and Steam all have thier good points. As I've said before, I have more 3DS eShop games than I do physical 3DS games. It's not for a lack of physical releases being compelling so much as what gets out late on eShop is cheaper and something I can gladly pass the time with.

That's what's happening with all those other services, too.

To put it in perspective, though, last year Portal 2 launch at $60 retail and $50 on Steam, Quantum Connundrum - made by the creator of those games - just launched on three of those services for $15. Same genre of puzzler, more content than the original Portal to boot.

Some games can justify the $60 asking price, many these days can't. A game like Skyrim right now retails for less because it can and it is one of those games with a long tail. BF, Madden and COD also have that effect. There are literally millions of people that buy a Madden or CoD and they're set fof the next year. The difference is Skyrim won't have a direct sequel for three or four years most likely.

Madden, Assassin's Creed, COD, EA cycling BF and Medal of Honor - they kinda cannibalize thier own market. Activision proved that potential with Guitar Hero. It's little wonder none of them can release an new FPS IP and it doesn't do well.

[DakAttack]

Re: Video Game Industry Slump

The article is sensationalist. We're in a recession, so of course games sales will slow. Plus, a lot of the big explosions in sales were a result of companies accessing untapped markets such as non-gamers/casuals.

[Armando]

Re: Video Game Industry Slump

I still find it humorous that "casuals" is a thing, since at some point in time all games were casual. Kind of like how "instant on" is a selling point for tablets these days.

[DakAttack]

Re: Video Game Industry Slump

I'm sure everything in the Olympics was a casual activity at some point. Or a struggle for survival.

- - - Updated - - -

I'm sure everything in the Olympics was a casual activity at some point. Or a struggle for survival.

[Armando]

Re: Video Game Industry Slump

You can take Pac-Man to hardcore levels, but it's still a casual game. Whether people play it competitively or not doesn't really change that.

[Malacite]

Re: Video Game Industry Slump

I'm sure everything in the Olympics was a casual activity at some point. Or a struggle for survival.

- - - Updated - - -

I'm sure everything in the Olympics was a casual activity at some point. Or a struggle for survival.

More like gay orgies but anyway...


The cannibalizing of series needs to stop - especially now that we have things like Elite/Premium to get more mileage out of existing titles. As much as I like seeing a new entry in a beloved series, rushed products are never a good thing. Besides, as far as BF4 goes, there's still issues with BF3 to deal with - not to mention 3 more DLC packs down the pipe. CoD too - they still have the rest of the current season of content. It's a slap in the face to all of us who buy the DLC to then suddenly toss out the next game the following year (though MoH is at least somewhat different from BF - CoD is just CoD. Same thing all the time as far as MP goes).


Contrast this with 343 and Halo 4 - Halo 5 likely won't be for 2~3 years after 4 is out, AND they are giving us FREE WEEKLY DLC FOR 7 MONTHS in the form of Spartan Ops.

Never thought I'd see Microsoft of all companies setting the example.

[DakAttack]

Re: Video Game Industry Slump

That free DLC will most likely be cookie-cutter copy and paste stuff, or just a system where they can tweak a few variables and let you run it on the map of your choice. It's not going to be groundbreaking or worth anything more than the price at which they're giving it to you.

[Armando]

Re: Video Game Industry Slump

The cannibalizing of series needs to stop

That part's easy: get everybody to stop paying for things they don't like.

Never thought I'd see Microsoft of all companies setting the example.

Microsoft? Valve's been updating TF2 for free since 2007.

[DakAttack]

Re: Video Game Industry Slump

And L4D/L4D2 on top of that.

[Omgwtfbbqkitten]

Re: Video Game Industry Slump

The sad thing is when someone gets DLC or online services right, there are still a dozen other third parties out there hoping to find a "better way."

There is no better way to do digital distribution than how Steam and GoG do it. If you're waiting for that day where DD is totally free are DRM you are going to be waiting forever, At least be happy that Steam's DRM is the least invasive DRM on the market.

We have a F2P games that work, but then you have EA's brand of F2P which seems to just exist to taint people's perceptions of how good a free-to-play game can be. EA turns them into Aeria Games-level gouge fests. They added an annual subscription to Tetris. And here the iOS crowd was giving 3DS fans crap for being excited about Tetris Axis. Origin doesn't even do the kind of sales Steam does because EA feels it "devalues" IPs.

Um, no, it creates new fans for those various third parties. Its like selling used games, but more productive in terms of brand awareness.

The truth is some of these big publishers only pretend to embrace the internet and the digital age, which is why I'm fine with Nintendo taking baby steps because at least their steps forward are typically honest. They are not part of a large companies with other interests they are obsessed with protecting an to that end, neither is Valve. In Valve's case, however, it was evolve or die and they took the right risk at the right time. Gabe Newell and is pals made the right bet. Yet all these other guys are still trying to find another way.

Any way but the ones that work. They're more interested in the ways that help them keep living in the past. Not exactly a surprise to me in some cases, given some of those businesses had a problem with MP3s and lost the war on that, too.

[Malacite]

Re: Video Game Industry Slump

That free DLC will most likely be cookie-cutter copy and paste stuff, or just a system where they can tweak a few variables and let you run it on the map of your choice. It's not going to be groundbreaking or worth anything more than the price at which they're giving it to you.

Weekly episodes, each consisting of 5 missions complete with voiced dialogue to further Halo 4's story post-campaign. Copy & paste my ass.