Rumors. I love them. Rumors fuel our imagination and give us something to talk about. This one is about the upcoming Xbox console from Microsoft or, well, not about the console itself, but its controller. They say that Microsoft is testing a tablet like controller, which is basically an HD screen surrounded by the traditional 360 buttons and sticks. I don’t think this is the case and here’s why.
GamaGanda
Gaming Press Distribution System
One more ACTA Fool
„Now them cops tryna throw you in them county blues BOY whatcha gon do? ACT A FOOL” (Act A Fool lyrics by Ludacris)
Cu toate ca titlul ar putea sa va conduca la concluzia ca sunt un suporter al acestui acord, va marturisesc ca nu este asa. Voi incerca pe parcursul acestui articol sa fiu cat mai obiectiv cu putinta, iar asta pentru ca scopul meu principal este sa analizez textul in cauza si sa va ajut sa-l intelegeti mai bine.
Am sustinut ideea ca orice actual sau viitor protestatar anti-ACTA ar trebui, in primul rand, sa stie exact de ce protesteaza si impotriva cui. Nu te poti numi protestatar pana cand nu citesti textul macar o data. Poti sa citesti cate articole vrei si sa vezi sute de filmulete pe YouTube. Nimic nu va putea inlocui textul original. Din momentul in care ai luat hotararea sa iti exprimi opinia (sub o forma sau alta) pe marginea ACTA, trebuie sa citesti mai intai textul. In caz contrar, nu esti decat un papagal obosit care da din cioc pe Facebook ca ACTA e un rahat.
Forecasting PS Vita Launch Sales
I’ve long thought about the necessity of PS Vita. Its raison d’etre if you’d like. I did so because, in my opinion, it does not bring anything revolutionary to the table, from a hardware point of view. The 3DS has a 3D screen and you don’t need any glasses to experience the 3D effect. The iPhone (first generation) brought us the beauty and simplicity of the touchscreen, which along with the mouse and the click wheel was a revolutionary and disruptive user interface.
PS Vita brings us 2 analog sticks, a capacitive touchscreen on the front of the handheld and a rear touchpad. While touchscreens and touchpads are the norm today, depending on the hardware, two analog sticks is something definitely weird for a newcomer. For those of you who have owned a PSP before, it could very well be the most requested feature on a handheld. The main reason is that having two analog sticks allows you proper control over camera and character movement in the same time, imitating the control you get when using a real controller. This way, it’s possible to play all the modern games, either PS2 ports or PS3 spin-offs. Some say PS Vita is a bit late to the table and considering the competition they could be right. Others are saying the market for dedicated gaming handhelds is dying. This is why I wanted to see if I can forecast the PS Vita demand (and of course its initial sales).
Next-gen prices are just around the corner
We know what to expect in terms of pricing, when a company announces a title these days. The current-gen titles have decent prices, although some Collectors Editions are way too expensive. What about the next-gen prices? All the Wii 2 hype got me thinking about it and I concluded that a rise may be coming to life once the next-gen hardware hits the market. Details »
The Online Pass – Lack of Vision?
The online pass has been hailed as one successful measure to counter piracy and pre-owned sales. It has been used by THQ in UFC 2010 and Homefront (and probably others I don’t recall for the moment), and it’s present in the latest Mortal Kombat game from Warner Bros. which is launching this week.
iPad 2 – Apple’s Strategy Shift
With iPad 2 out, one of the things that really caught my attention was the estimated graphics performance. Let me repeat that for you. 9 times over the first version of the tablet. I don’t recall in the whole history of gadgets or even video cards such a bold statement. It really sent shivers all over my spine. Now that all the excitement has begun to sink in, I’m able to look at the iPad in a different light and start asking questions.
Trends 2011 Episode 2 Update – Why Kinect is a safe bet just for Microsoft
Since I’ve written the Trends 2011 piece regarding Microsoft, Steve Ballmer went in front of an audience during CES 2011, saying that no less than 8 million Kinect units have been sold worldwide. I don’t know if it’s true or not, although their previous estimate said 5 million, so they must hire pretty shitty analysts over at Microsoft. In fact, they have probably pushed 8 million to retailers and e-tailers. Good for them, but that’s not the problem. Kinect was designed from ground up to be a safe bet for Microsoft AND only for them. What happens after that, it all depends on how many developers will be on board and Microsoft’s strategy in the long run.
I won’t do all the math on Kinect’s components and marketing costs, but you can find a pretty good explanation here. Considering the 56USD or so production price and the 76USD or so final price including everything, the total cost for the 8 mil. units is a little bit over 600 mil. USD. Now add to that the 500 mil. USD marketing costs and you reach 1.1 bn. USD.
Now let’s go back to the final price that retails and e-tailers are paying for Kinect and I’m going for the same references from the previous link. Considering Microsoft sold Kinect at a medium price of 125USD, their revenues should be around 1 bn. USD, while a 138 USD price point ups them to 1.1 bn. Wow, what a coincidence! Why is that?
Well, let me tell you what’s happening. When you say Microsoft, you say financial power. They are perfectly able to finance such tech from R&D to manufacture and marketing. The real question here was “What is the required marketing budget for us to sell X mil. units of Kinect AND BREAK EVEN in the shortest time possible?” They estimated that 500 mil. is enough (almost as much as paying for them) and they were fortunate enough to nail it.
It’s the perfect example of “Happy End”. It doesn’t matter if 6 months from now there will be no more titles to play for Kinect. They haven’t lost anything as those 8 mil. units will be long gone and their money back in their pockets. So why did they do it? Two reasons, at least. Compete with Nintendo and Sony, their Japanese competitors, AND, you cannot deny that Kinect doesn’t bring value to the Xbox brand. It does and the miracle is that it didn’t cost them a fucking dime to do it. Now, that’s some smart business for Microsoft.
What about the rest of you out there rushing to develop games for the Kinect? Now that you know the truth behind the business, it’s that time of the year to ask yourself if Kinect is the same safe bet for you, as it was for Microsoft. I can’t decide for you, but next time, I’d be a little more careful. I don’t say that Kinect will fail in 6 to 12 months. I’ll just ask you to check Nintendo Wii’s third-party casual line-up… and think again.
Have a nice… dream!
Trends 2011 Episode 2 Microsoft
Well Pinky, it’s that time of the year again
When we play?
No Pinky, when we devise our plans for taking over the world… next year.
Oh, ok… can I be the the reindeer again? Pleeease?
Well, they’re right. Someone really has to show us they’re still in the game. 2010 for Microsoft was a tough year. Just look at their shares which took an upward trend last year, anticipating a new period of growth. Unfortunately, that wasn’t really the case this year. I’ll stick to games, X360 and Kinect.
The most important titles for Xbox 360 in 2010 were Mass Effect 2, Splinter Cell: Conviction, Alan Wake, Crackdown 2 and Halo: Reach. Of course, there are other titles out there, most notably Call of Duty: Black Ops, but the titles I mentioned were Xbox 360 (console) exclusives this year. Just Mass Effect 2 will be launched for the PS3 early 2011.
As well as hardware goes, Microsoft released the slim version of Xbox 360, a series of interesting bundles and, of course, Kinect, also available as a bundle. Kinect managed to sell 2.5 mil. units in the first 25 days, with Microsoft forecasting 5 million before year ends. Well, those forcasts are not that hard to do, as they mostly represent units pushed to retail. If they’ll sell 4.5 mil. or 5 mil. units this year, that’s not so important. All they were saying was that they intended from the very beginning to push 5 mil. units to retail. From I gathered during the last two months, retailers have also pushed Kinect forward through lots of buzz and advertising. The reason this happens is that the profit margin from selling Kinect should be a lot higher than selling Sony’s Move. For them, selling the Move or the Kinect is the same thing, but the two don’t carry the same price. I’d say that retailers’ partnership was a key point in Microsoft’s strategy, so they’ve pulled it off quite nicely.
What Kinect lacks (as well as Move) is the presence of a strong line-up of titles and this is the weakness that Sony anticipated, so the Move support for some of their key (upcoming) titles was one of their key points which helped them sell fast, but we’ll discuss that in the Trends 2011 article dedicated to Sony. Back to Microsoft now, I’d say that first thing for them in 2011, right from the beginning of the year, they should transmit a clear message about their upcoming titles. The first one that comes to mind is Gears of War 3 which was planned for April, but was delayed for November. The big announcement we all waited to happen at the VGA 2010 show, never was, but let’s hope for the better. The list gets even better with titles like Mass Effect 3, Dragon Age 2, Forza: Kinect, Kingdoms, Crysis 2, Bulletstorm, Dead Space 2, next CoD, next FIFA, Deus Ex: Human Revolution, Mortal Kombat, Portal 2, RAGE, Alice: Madness Returns, Batman: Arkham City, Battlefield 3, Brink, Driver: SanFrancisco, Duke Nukem Forever, I Am Alive, L.A. Noire, Thor: God of Thunder, as well as some other projects which could finally see the light of dawn (like Max Payne 3, GTA V, XCOM, PGR5, Hitman 5, Thief IV), along with some unannounced/unleaked projects. The reason I say this, is that Microsoft really took care of the hardware side of things in 2010, so the only logical move for them in 2011 is to do what they know how to do best… software, either first party or through the third-party partners. As you can see, the list is already quite generous, but there are a few things missing.
One of them is the casual line-up of titles. Yes, we all may be hardcore gamers or at least we crave for mature content, but let’s face it, they have launched Kinect, so they have to make you use it for as long as possible. This is why, for 2011 I’m expecting a rather long and strong line-up of casual titles for Kinect, as well as new announcements in major franchises like Halo.
The next thing missing from Microsoft’s portfolio is the number of exclusive franchises they have under their belt. Their number has been going down for a while now, for various reasons, so Microsoft should really take a look at their most fierce competitor, Sony, and try to do something about it. Software has always been Microsoft’s strength, although innovation is something they’re not so keen about. This is one of the major obstacles that Microsoft should try to leave behind in 2011. This is why they desperately need to own some new (or old), but epic franchises that can produce some really cool exclusives. This should put them back on track starting with 2012. If this doesn’t happen in at least 2 years time, it means they’re saving them for the next generation of hardware, which shouldn’t be that far away, 2-3 years.
The last thing on the menu addresses mostly the mobile market. They launched their next Windows Mobile this year, but my guess is they desperately need software to back them up, meaning we’ll probably see lots and lots of apps and games in the coming months. They officially stated that 1.5 million WP7 handsets were pushed to retailers in the first 6 weeks from launch, so depending on how they are managing the situation and what partners they choose, it’s possible that WP7 will really take off. Upcoming tablets based on Windows will spark apps for them, so if you’re in the business, get ready for a new offering.
Last but not least, we have the PC games market which has become the black hole of the industry. Ubisoft cheered when AC2′s protection was unbreakable for 30 days or so, but I don’t think this is the way to go. Selling games with unique codes for the multiplayer, online distribution and hopefully better prices can easily turn this around. There are many other marketing tools they can try, but it feels like there’s a very bad vibe when talking about the PC, so no one is really caring about innovation in this area. This COULD BE one of the biggest opportunities for some publishers/developers out there, so if it’s done right, the lack of competition on this field can really be the driving factor for some cool twists. If you realize that there’s plenty of room for titles DONE right and MARKETED right, then you’re in there for the win. Everybody is concentrated on the consoles, mobiles and tablets. A really cool title for the PC could be the surprise no one saw for 2011. I wish this will happen, though I fear it won’t.
That’s Trends 2011 for Microsoft. Take you will and comment if you feel like it. My conclusion on Microsoft for the upcoming year is that they’re in the best position to flex their (software) muscles and come up with some cool games and apps. It all depends on them seeing this opportunity and maximizing their advantages. It’s like they’re having a new foundation, so they have to start building on it. It all depends on how they planned for it, how they’ll manage it from now on and how everything will come into place. The market is on the rise again, not at a very high pace, but the rise is there, so there’s definitely potential for Microsoft to grow, especially in new territories (and I don’t mean that geographically).
Trends 2011 Episode 1 Nintendo
….
Pinky, this is important. Let me write it.
……………
No, no Pinky, we’ll take over the world at a later date.
…….
No Pinky, there’s no Santa and yes, I’ll buy you a present.
….
I don’t know that yet. Just let me finish and we’ll see.
So, where was I? Hmm… As 2010 ends, I thought it’s about time I do what I like most, except taking over the world, and that is taking a peak into the future. December it’s usually the time of the year when you read about the most important titles, about awards, disappointments, or even delays. Unfortunately, no one has the guts to tell you what’s going to happen next. Some of them don’t know it, for a variety of reasons. Some others don’t really like that info to go public. You see, it’s still December and you, the consumer, as big corporations like to call you, haven’t yet decided what to buy for Christmas. You don’t need distractions about upcoming games set to be released in February or March, but teasers for titles launching late next year are perfectly fine, so that’s all you’re going to get from them. Let’s trick these corporations and unveil their game for the year to come. This article will be published in episodic format during December and uses only OSINT (open-source intelligence). You’ll read about all your favorite publishers and their plans for 2011.
For now though, I’ll start with Nintendo. Well, you just have to look at their financial statements to realize something’s off. Their revenues are down each quarter and their forecast revenue for the actual fiscal year (April 1st 2010 – March 31st 2011) is down 23% from 1.4T yens to 1.1T (T is for trillion by the way). Given the financial crisis and the fact that interest in the Wii and the DS is not that high any more, I anticipate slow sales even this December. The company had to postpone the launch of the 3DS as they were not able to produce the required number of units and they have announced its release for next February in Japan and next March for the rest of the world. Given their financial statements, it seems that something really impacted their costs, since their forecast revenue for the year is just 23% lower, while their net income will be 60% lower.
What’s interesting enough is that Nintendo expects to sell in the short time frame from the 3DS release until their fiscal year ends, March 31, 2011, 4 million units worldwide, while the software for it should sell 15 million units worldwide. Hmm, I think math is failing me here. So Nintendo expects to sell 23.5 million DS units this fiscal year, with 4 million expected sales of the 3DS and JUST 6.7 million units sold until September 30th? Sorry guys, but you’re just too optimistic when it comes to forecasts and your previous forecasts really support this assumption. Nintendo is optimistic and over-confident and given their history for the last few years, I won’t blame them. That’s why, in this case, a TEAM B analysis should/could really help them (that’s in case someone from Nintendo actually reads this, but if you’re interested what that is, just Google it).
I understand that your shares are quite low right now, compared with say April 2010, but that’s no reason to panic. If you look at the evolution of Nintendo’s shares in the US, you’ll see the highest price in April 2010, right after the announcement of the 3DS in late march. The price then goes down right before E3 and immediately up following their successful E3 presentation. Since then, it has gone up and down with prices going up during TGS and then down again. It’s a downward trend that will continue until the 3DS launches, although the December shopping spree has helped them a little.
So that’s Nintendo this year. What about the next? Well, since this year has been about the DS, I expect next year to be about the Wii. Let me tell you why. I can’t really say and I don’t think that anyone can at this point in time, if they will launch the next Wii in 2011. My guess is NO, they won’t, but you should expect some form of announcement at either E3 or TGS. Truth is they are now under double pressure, one from their classic ‘rivals’, Microsoft and Sony, who have launched the Kinect and Move, and another one coming from a totally different company aiming to steal their social/family gaming experiences, Apple. There’s even a third danger that no one is taking seriously right now, though its influence is increasing at an alarming speed. It’s Facebook. Have you ever wondered what they all have in common? Well, it’s you, the consumer. And you have two resources they desperately need. TIME and MONEY. And all of them will compete next year to gain as much time and money they possibly can from YOU. That’s why Nintendo has to announce something next year or else their shares will go down the drain, as well as their revenues. On the other hand, a Wii 2 release in 2012 is quite about right, if we take into account that consoles from Microsoft and Sony will not be released until 2013-2014. So that’s one of the dangers taken care of.
The next episodes of Trends 2011 will deal with Sony and Microsoft. We’ll then go on to the third-party publishers and see what they’ll do next year and conclude with episodes dedicated to Apple and Facebook. When this journey ends, I expect you’ll get the big picture and this will hopefully help you make better and informed decisions regarding your precious time and money. See you soon and follow my Twitter and Facebook accounts for the next episodes of Trends 2011.
XBLA Market Overview and Forecast
We have a press release from FADE (Forecasting and Analyzing Digital Entertainment LLC), a market research and consulting firm focused on electronic entertainment and the emerging download and mobile game markets. As their research points out, it seems that Microsoft has set a new record in October with a 91% growth in revenue over the same month of last year, $11.2 mil. USD. The firm estimates that Microsoft’s XBLA will brake the $100 million mark in terms of revenue this year. Check the press release below for details.
Dead Rising 2: Case Zero Beats Sonic 4 in Best October Ever
November 22nd, 2010 – As per the Research & Analysis division of analyst firm Forecasting & Analyzing Digital Entertainment, LLC (FADE), Microsoft set a new record in October, realizing 91% growth from last October in terms of revenue. October saw revenues of $11.2 million USD, with the yearly totals breaking the $100 million mark.
Dead Rising Continues to Sell Well After Retail Release
Despite the release of the retail release the prequel was designed for, ‘Dead Rising 2: Case Zero’ led sales when ordered by units sold, garnering 104,000 units sold at 400 Microsoft Points during the month. The title is without question, the fastest selling XBLA title of the year, with over 600,000 units sold after three months on market. Close behind was Sega’s 2D console revival ‘Sonic the Hedgehog 4: Episode 1′, which sold an estimated 98,000 units at 1200 Microsoft Points per unit. The 4th game in the series did well among all platforms, selling an estimated 260,000 units between its four major platforms, with XBLA leading the way.
Other major titles were released during the ‘Game Feast’ promotion, which launched the last week of September. Critically-acclaimed platformer ‘Super Meat Boy’ employed a unique sale, offering the 1200 point title for just 800 points for the first few weeks of release. Meat Boy sold an estimated 70,000 units at the 800 point price, making it the 3rd best-selling title of the month. Twisted Pixel Games’ 3rd release on Xbox Live Arcade, ‘Comic Jumper’ sold a respectable 55,000 units at 1200 Microsoft points. Twisted Pixel Games has had a string of good fortune on XBLA, releasing ‘Splosion Man’ and ‘The Maw’ which also were met with success.
Revenues Nearly Double on Strong Game Lineup
“Traditionally, October has been the slowest month of the 2nd half of the year for Microsoft” said Benjamin Schlichter, Director of Research & Analysis at FADE. “However, through the ‘Games Feast’ promotion, and a strong title lineup, Microsoft saw the greatest year-on-year growth in October.” With revenues nearly reaching 2009′s yearly total, Microsoft looks to be in solid shape to realize double-digit growth for the entirety of the market. October is also the 2nd consecutive month of major growth, with September posting a 43% gain year-over-year. FADE anticipates November to continue the double-digit growth, and should see sales of between $11 million and $14 million USD.
Estimated Top 10 Titles for October 2010, by Units Sold:
- Dead Rising 2: Case Zero (Capcom) – 104,000 Units (400 Microsoft Points/$5.00 USD)
- Sonic The Hedgehog 4: Episode 1 (Sega) – 98,000 Units (1200 Microsoft Points/$15.00 USD)
- Super Meat Boy (Team Meat) – 70,000 Units (800 Microsoft Points/$10.00 USD)
- Comic Jumper (Twisted Pixel Games) – 55,000 Units (1200 Microsoft Points/$15.00 USD)
- Plants vs. Zombies (PopCap Games) – 45,000 Units (1200 Microsoft Points/$15.00 USD)
- LIMBO (Playdead) – 33,000 Units (1200 Microsoft Points/$15.00 USD)
- Costume Quest (Double Fine Productions) – 31,000 Units (1200 Microsoft Points/$15.00 USD)
- Castle Crashers (The Behemoth) – 28,000 Units (1200 Microsoft Points/$15.00 USD)
- Trials HD (RedLynx) – 26,000 Units (1200 Microsoft Points/$15.00 USD)
- Dead Space Ignition (Sumo Digital) – 26,000 Units (400 Microsoft Points/$5.00 USD)
NPD Group – Searching For A Victim
The NPD Group Blog has run a piece this week, entitled ‘Searching For A Savior’. We’d like to kick-start our industry analysis articles with a few comments on their assumptions and conclusions.
Based on their research, they have identified four major issues influencing the industry this year. We’ll call them ‘assumptions’ (though some of them are conclusions drawn based on surveys or other research), because they form the basis for the conclusions stated in the article posted on their blog.
1. Pricing levels continue to flatten, with movements around 5%, instead of 20-25% as consumers are usually used to.
2. Lack of killer hardware to motivate consumers, increased number of repeat purchases and a decline in the number of first-time buyers.
3. Industry growth nearly impossible to achieve this year, compared with 2009 for example.
4. Consumers are not planning to buy anything at all, as a result of high unit volumes of the past years and the lack of need to upgrade to newer tech.
Another idea expressed by Stephen Baker (Vice President, Industry Analysis) is that tech products are now perceived as need-based products instead of luxury ones, so it’s easier to postpone a new purchase.
As an analyst myself, although not Vice President, I’d like to run a small analysis to see if their assumptions really hold up or not. We’ll do what it’s called a Key Assumptions Check. Of course, we do not have access to all the resources NPD has, but we’ll base our judgment on the available OSINT (open-source intelligence). Just let me state that my intention is not to discredit any of these assumptions or Mr. Stephen Baker himself. They look valid at first glance, but as you know, not everything is quite as obvious as we’d like and more important, maybe these are not all the assumptions we could state after carefully checking all the evidence or information available. Maybe NPD missed something. Or maybe they are hiding something, as lack of information or evidence is as important as its presence.
1. Let’s start with pricing levels. There are quite a few causes which determine the evolution of prices. NPD has mentioned the lack of consumer confidence in new tech, high unit volumes of past years, postponed purchases and a decrease in first-time buyers as some of the apparent causes. Of course, many others are blaming the ‘financial crisis’.
Well, the first half of 2010 was marked by increased cargo traffic as suppliers have pushed more and more goods in order to fill stocks and prepare the markets for the upcoming sales (as I work in the aviation industry, I should know). Yes, it is possible that consumers are no that willing to spend more money on technology right now, as they are a lot more cost-conscious, but companies are not lowering prices because their forecasted sales for this year are in stark contradiction with the ones from previous years. As NPD clearly stated, the industry cannot grow forever. Do you think the industry players don’t know that? If they knew it, what could have been the best way to react? We know there are plenty of goods in stock and that there are no production problems, but their intention is to create the need for a product. You don’t create this need by allowing everyone to have a certain product. Look at the iPhone 4 and iPad pre-order/sales evolution. Look at Sony stating they have to ramp up production for the PS Move. Do you think NPD can say that and risk its relationship with their partners? Nope, they don’t. So, they blame the consumers.
Stock is not a problem these days, but creating the illusion of lack of stock is a very efficient method for driving consumers crazy and creating buzz around a product. Price levels will not go down this season because the companies themselves have used this method for about the whole year and they are now enjoying the results. Why should they lower prices if you’re eager to get your hands on their products at the regular price point? They’d be really stupid if they did that.
2. And this brings us to the second statement. There is no killer hardware to motivate consumers. No shit? IDevices sales are going up. Tablets are the new killer hardware, though I have to admit we still don’t have a real iPad competitor on the market today. Nintendo is creating a tremendous buzz around their 3DS, while the recently leaked PlayStation phone is looking like a sweet addition to the Android based mobile platforms. iOS and Android are enjoying an ever rising number of apps, while Apple has announced the Mac App Store, so things are definitely moving in the right direction. Yes, there’s a bit of confusion on the 3D market, but Sony, Discovery Network and IMAX have announced a joint venture to launch the first 24/7, fully programmed 3D television network in the U.S. in 2011.
So, there’s plenty of killer hardware around, but there are no services to complement the offer (or at best, the services are fragmented). There’s even more. As NPD stated, there was a transition concerning tech products, from luxury ones, implying a certain price tag, to need-based ones, which of course are more affordable. What NPD misses, is the point that users today have also been trained to expect complete experiences, while many of the hardware manufacturers are still ignoring this fact. Once again, can NPD say that and have hardware companies look like they’re crippled? I doubt it.
3. When I said that hardware manufacturers feel crippled, I was in fact stating the reason for the slow growth of the industry. Well, you can say that Apple posted quite nice results. Yes, but Apple is just a slice of that industry. There are more players and there are even more markets that Apple hasn’t tried yet. Take AMD-ATI. The new ATI cards are all over the net. What for? How many PC games have you seen lately, requiring more horsepower than we already have now? If the PC games market is not as competitive as it used to be, then companies should try to adapt their products to the existing market, so that consumers relate to their products and find them actually useful.
What hardware and software companies, or at least some of them, have not understood is that consumers have to place a product in a slot which has written under it either ‘I want this product’ or ‘I need this product’, but above everything else, companies should wonder if there is already another product in that slot and if it is, then what can they do to replace it with one of their own.
That being said, we think that companies have put such a big pressure on consumers, which are now refusing to play by the manufacturer’s rules. Hence, no growth. That’s why some of them have come up with the idea of creating needs and the illusion of scarcity for certain products. It’s an unorthodox approach, necessary under these conditions, but not everyone is applying the same tactics. What does this mean? It means that not everyone will survive. That’s why there is a high probability for mergers, buy-outs or even bankruptcies. Imagine NPD saying something like ‘We’re expecting some of our partners to go bankrupt’. Lol, it’s never going to happen.
4. Consumers are not planning to upgrade. Probably, but I’m not convinced that they lack confidence in new tech. It’s true that high unit volumes have been pushed in past years, but the quality of mass market products has also decreased in the meantime (as a result of the transition from luxury to need-based). Those products are breaking more often than the previous luxury ones the consumers used to own. So, what are they doing? If we were in a pre-crisis environment, they’d switch (remember when angry Xbox 360 owners went for the PlayStation 3?). No repeat purchases increase and more first time buyers. But, it’s a crisis out there, or at least that’s what we should believe. What do you do? You stick with what you know and you assume the risks you can handle or manage.
That’s why we see lots of repeat purchases and a decline in the number of first-time buyers, but this will not last. As the crisis is becoming a lesson in the history books, consumers will begin to gain confidence (in their wallets) and start spending more. The battle for their needs that companies are engaged in today will leave lots of empty slots in the luxury/unique category. I bet that as time goes by, we’ll see companies rolling out the saviors.
So, is NPD wrong? Is NPD hiding something? Yes and no. I don’t think they are wrong, but I also think they are not able to publicly say what they have to say. While all their issues are valid, they have chosen a path which puts them out of harm’s way. Should you believe them? NO, and I’m not saying that because there is something wrong with their view. It’s because they have chosen not to disclose information relevant to the judgment in question and when this happens, it usually means they have to push consumers in a certain way, to shape their reasoning based only on the information given and controlled by their group. Unfortunately, everyone out there even remotely connected with the industry is trying to race on a circuit where they are in pole-position. What can you do then? Just watch, smile and spend. Let’s get that economy rolling, boys!
EA Buys Angry Birds Publisher Mac App Store Connection?
LA Times ran a piece earlier this morning about Electronic Arts buying Chillingo, the UK publisher of Angry Birds and other games for iPad and iPhone.
“By acquiring Chillingo, EA Mobile is increasing its market leadership on the Apple Platform as well as reaffirming its position as the world’s leading wireless entertainment publisher,” EA said in a statement. “This acquisition will combine Chillingo’s expertise in cultivating the ideas of independent developers with EA’s global mobile publishing reach.”
Indeed, the iOS – Android – WP7 trio is getting more and more interesting for big time publishers and as Ubisoft showed us, via Gameloft, entertainment on mobile devices is a sure bet for the future.
But, I think that’s not quite everything we have to say regarding this matter. Steve Jobs announced earlier today that an App Store for Macs will be up and running in about 90 days from now. Well, I’ll be damned if this is not one hell of a coincidence. EA grabbing a publisher with lots of expertise in App Store as a distribution channel, while Steve here announces the new distribution platform for Macs. Sorry, but I don’t believe in coincidences, so I can safely say that EA will surely go for a piece of the Mac App Store pie AND they intend to do it right. That’s what Chillingo is doing in their portfolio.
This means that EA’s intentions are to bring some well-known franchises to the Mac App Store. Sims is a sure thing. Why not titles from the MoH and Battlefield franchises? Don’t be surprised if Battlefield 3 will show up in a Mac near you, via the new Mac App Store.
10 Ways to Revive the Japanese Game Industry
TGS 2010 came and went like it was never there. Yes, there were some pretty cool announcements, but most of the whining about the state of the Japanese gaming industry took something away from it. You could just hear a mysterious voice asking for the inevitable to happen “Are we there yet? Are we there yet?” and a big gathering of Japanese developers answering “Yes, we are”.
Well, I think there is a misperception of the industry right now and probably some identity crisis thrown in the mix. Over the following paragraphs I’ll try to show why this is happening and what solutions can be applied to get over it.
The Japanese gaming industry has been on top of things for many years. All we have to do is mention Nintendo and Sony and all of a sudden you’ll realize its magnitude. So why are they thinking the Japanese industry is five years behind? Why are they trying to westernize their games? Is it a good decision, especially business wise? Are there any best practices out there?
First of all, they were on top until multiplayer came out. In the West, multiplayer is king. Westerners want to socialize, to play games together in co-op or against each other, solo or in teams. The western companies delivered what was expected from them to deliver. These companies still struggle with distribution problems and they’re trying to monetize on the sale of used games, but they’ll sort it out in the end. While all this was happening, the Japanese developers just stood there and watched, while in the process of making more Marios, Resident Evils, Dynasty Warriors and so on. Most of the games made in Japan belong to different genres, but first-person shooters are not exactly their passion, nor their focus.
Does this mean they should develop fps games? God no. That would be the worst mistake ever. Stick to what you know and what you do best. That’s what they should learn. That’s also why they shouldn’t artificially westernize their games. I’m going to repeat myself. Stick to what you know. Make the same Japanese games we all know and love. BUT WITH A TWIST. You are one of the most creative nation on the PLANET. I’ll give you some hints, but the revival of the Japanese industry is up to you.
1. Colaborate with good western publishers and ask them to help you implement features in your games that western gamers crave for, WITHOUT sacrificing the look, feel, atmosphere and gameplay from the traditional Japanese games. This means, for example, adding a lobby for socializing with other people, adding a multiplayer component, leaderboards, clans and integration with services like YouTube for uploading insane kills or stunts and even unforgettable moments. Players like to brag about their skills and feats. Let them do it.
Imagine a Yakuza game which has the same single-player experience we know, but also features a third-person multiplayer mode, much like GTA IV did, except that we have nunchakus, tonfas and many other BLOODY weapons. Of course, lots of blood is violently recommended. Take the versus add-on for RE5. It’s nice, but it’s for only four players. I’m not saying you should copy western games, but identify the right features and be sure your next game suits a western/international taste. I should probably mention here the new DMC which is the best example for killing a franchise by westernizing it. This is how you should NOT do it.
Japanese games don’t have to become American or European games and I also have the perfect example for that. Remember Heavy Rain? That is a game with lots of European influences, but it still appeals to a wide range of players. This is what you should do, games with Japanese influences which appeal to a wide range of players. Just don’t kill your franchises like Capcom does. One more thing. No one wants to play a Japanese Call of Duty, a Japanese Halo or a Japanese Need for Speed. There’s really no need to do that. I hope you get the point.
Another ‘one more thing’. Don’t use focus groups. If you use Japanese focus groups, you’ve missed the point. If you use North American or European focus groups you’ll just obtain a flat game. Go with bold ideas instead, based firmly on what you know it works for your game.
2. Try to find alternate platforms. How many games specially developed for iPhone or iPad have you seen from Japanese developers? Yes, there are a few ports here and there, maybe a true gem once in a while, but nothing like Gameloft which sold 20 mil. games in 2 years via App Store.
Make this your top priority and here’s another hint. Apple, listen up, as it also concerns you. Why should a player carry a PSP, a DS, a notebook and an iPhone, all at once? What can you do to help him or her lighten up a bit? Apple, you have the solution right there. Come up with a controller similar to what we have on consoles, a controller that can be paired with both an iPhone or an iPad (via bluetooth) and that’s it. You’ll kill every other gaming handheld device out there. We already have the case which puts the iPad in the perfect position, so all we need is to fire up a controller, fire up a game (like TEKKEN or Resident Evil) and that’s it. Just game!
Touch controls are not perfect for gaming on the go and they will never be. Besides analog sticks, we need real buttons and triggers. There’s another option if you don’t fancy designing a controller. Desing a motion controller. The next iPad will have a front camera. The iPhone 4 already has one. Design a controller similar to the PS Move and let us play everything on the go, from first-person shooters to third-person shooters, adventure games, platform or combat games. Everything can be adjusted to such a controller if you think about it for a moment. A combat game could make use of just the controller’s buttons, not necessarily the motion part of it (if there is at least one stick). A platform game can have similar controls, while a strategy game would be so much fun to play with a motion controller.
I’m confident that next iterations of the iPad and iPhone will have better hardware, including better graphics, more memory and more powerful CPUs. Unreal Engine is already present on iDevices, so we’re all set. Steve, just do it man and save us from having to buy so many gadgets at once.
Last but not least. What do you think our beloved Steve has to do in order to transform his Apple TV box in a home console?
Just one thing: design and release the damn controller I’ve been mentioning for a few paragraphs now (and probably update the box a bit, hardware and software, but that’s happening as we speak anyway).
3. First party versus Third-party games. Third-party Japanese games are not always succesful and I’m looking at Wii here. Of course there are some exceptions, but first-party games always enjoy good sales. So, my next advice is to look at some of the first-party titles out there. Analyze them. Have your designers drill down and identify the core features that make it work. Talk to the publishers. Maybe they’ll be willing to help you. Get external consultants, basically learn what gamers WORLDWIDE want. It’s not such a big deal. If you can’t do it, have someone else do it, like a marketing research company with a proven track record. On the other hand, publishers already have this info. Ask them to SHARE.
4. There are many people out there enjoying Japanese culture. Not releasing a game outside Japan, hurts your sales and hurts these people. Be good and don’t hurt them any more. Release worldwide.
5. This is actually a follow-up for the previous remark. Don’t be lazy bastards and launch the games worldwide in the same time with the Japanese launch. By the time you launch in the US and UK, YouTube is full with walkthroughs of your game and that’s not always a good thing. Customers, especially in the most important markets like US and Europe, want to be treated equally. Give us that and you will be rewarded.
6. Reinvent old genres. Like adventure games. Adventure games are perfect for multi-touch devices like iPhone and iPad. Of course, the era of the adventure PC game has passed, but right now, these devices allow players to immerse themselves in beautiful universes or why not, horror stories. Allow people to pick up and inspect the murder weapon tainted with blood or inspect the body of a gorgeous blonde at the morgue. It’s fun, isn’t it?
7. Consider different targets. Most of the Japanese games are either mature games or niche games. Yes, we love them, but in order to grow your income, you can also try to produce games for a wider audience, considering different platforms. Take women and children. Apply the Nintendo DS business model to mobile phones and tablets. Trust me, it will work. I can’t imagine a nicer image than a mom with her daughter playing together a game on the iPad. Or why not, on two iPads? (Steve, can I get an iPad? I don’t have one.)
8. Try to come up with franchises which can be monetized periodically. Not quite annually like FIFA or Call of Duty and especially not on episodic basis. Players don’t like episodic games because, first of all, an episode is short, and second, you always want to play some more. Players like complete experiences, but repeatable ones. That’s why Halo, Call of Duty, Battlefield, FIFA, NFS and others enjoy so much succes (sales wise at least). Have this in mind when you think about your next, new IP.
9. Design more games for the Xbox 360 and PC/Mac. Yes, the pirates will hunt you, but this is the price to pay if you plan to acces the western world. Noting comes cheap. Make your game in such a way that players will buy it, even if they’ve played the single-player campaign two weeks before the game is actually released. Add multiplayer, DLC for multiplayer, have second hand buyers pay to access the multiplayer, distribute your game online, etc.
10. Outsource and control your costs. I know it’s a hard business decision but cutting costs while improving the revenue should be your main goal. Of course, don’t just do it because your shareholders are pressing you to cut costs. You risk sacrificing quality. Do some market research and check if there are companies out there that can do what you need them to do for a smaller price. My advice would be to forget about China and India. You don’t want to go there. Try instead Europe, Russia or North America. You need people from these markets to work with/for you, so you will get insights from their experience and culture. That’s why I said I’d forget about China and India.
So this is it. Ten ways to improve your company and hopefully, your business. What the Japanese industry needs, in fact, is a change in its business processes. You cannot continue to make games the way you used to, and in order to do that, you’ll have to change your business. I don’t think these ten advices are the definitive recipe for you, but instead you should read between the lines and apply whatever you consider necessary. Always adapt, never take for granted, and you’ll be fine. And most important, don’t believe some crazy dude who says you’re dead. Last I checked, you still had a pulse. It’s just a…Crank situation. You’ll be fine.