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current videogame sales= Capitalism at its best, random thoughts (1 Viewer)

Larry Fletcher

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Is it me or is it a great time to be into videogames. I mean
with 3 systems and numerous games being released every week there are always going to be good games that don't sell that well. We are seeing it more every week now with some good games dropping in price. Example Mark of Kri $9.99 at EB 2 weeks ago. This competition among all 3 platforms is really benefitng us. Just check out the coupons and deals section. Look at the numerous games on sale every week.
Capitalism at its best.

P.S. It is Friday. I am bored stiff at work. Don't feel like working so I decided to write this for no particular reason other than to kill time. :)
 

BrianB

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This competition among all 3 platforms is really benefitng us.
Playing Devil's Advocate...

It's really killing a lot of developers. The market is a killer right now, with independents going under left, right & centre. Publishers are ultra-conservative on new projects, with it being really hard to find a publisher for a "risky" project if you don't have a big name dev behind it. Game sales are flat that unless you're a breakthrough hit, it's very hard to make a profit on a big budget title. Hell, that $10 Mark of Kri is a great deal for the consumer, but how is SCEA supposed to make a profit out of it when it's sold what, a hundred thousand copies?

It's a really difficult time to be a developer looking for a contract.
 

Larry Fletcher

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Excellent point! I never really thought of it from a developers standpoint. I guess this is also the reason we are seeing so many mergers among game companies.
 

BrianB

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It's a tricky one... We are in a boom period according to the financial stats, but at the same time, tons of developers have gone bust in the past year because they simply can't get projects signed in time or paid regularly.
 

Joe Szott

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Brian,

Again, that is the nature of Capitalism though. Another reason there are so many developers going under is simply because there are so many darn developers to begin with. There are so many maore design houses than any other time. Why? Because the pie has gotten much bigger and everyone want a little slice.

Half of the games I buy now I don't even recognize the design company. Besides the biggies like Sega, Blizzard, Rockstar, etc. who even knows what these comapnies are and where they come from?

One last point: software developers move around, a lot! When one company goes under, 2 more pop up to fill the void. These people do not sit at home and collect unemployment for long, their skills are snatched up by other or new companies pretty quick. Think back to 10 years ago, it was incredibly hard to break into the game industry, the jobs were pretty coveted. Today, almost anyone could make the transition with a little schooling and some legwork.

Developers going under doesn't reflect on the health of the industry much at all IMHO...
 

Morgan Jolley

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Someone has to go, with 3 platforms the market is too fragmented
I don't think so. We need to start getting rid of small developers and have them be brought into bigger developers. This way, the overall quality of third party games can improve while allowing some of the riskier projects to come out better and under a bigger name, potentially increasing sales.

Or they could make less crap games.
 

Rob_Pierce

Second Unit
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We are in a boom period according to the financial stats
We were up until Christmas. The stock prices of Electronic Botique, Gamestop, and all video game developers have really headed south since December. I follow the financial side of the industry very closely (I'm a financial planner and have access to tons of information) and the sales have really slowed down.

One interesting recent development: Microsoft is really starting to take serious heat for the XBox. Investors were expecting much better growth and console sales have underperformed even Microsoft's low end estimates. Nintendo has made some major advances with Zelda. Sony's stock has dropped over 20% in the last two days; the decrease in the PS2's price hurt much more than expected. Anyway, my point to all of this is that of the 3 console companies right now, Nintendo might be in the best spot. Microsoft's core business is certainly not video games and their investors are getting nervous; Sony is involved in all sorts of other businesses (though they still dominate video games and aren't going anywhere), but their recent numbers point to trouble. Nintendo, on the other hand, keeps chugging along. Unfortunately, it's very hard to look at Nintendo's financials as they do not have any filings in America and I don't read Japanese too well.

Capitalism rules. My prediction: if Microsoft does not turn the XBox around by Summer 2004, it's gone. Stay tuned.
 

JayV

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This way, the overall quality of third party games can improve while allowing some of the riskier projects to come out ...
One, you haven't made a connection between larger developers having inherently higher quality standards. Two, the tendency of larger organizations is to play it safe -- not a climate for riskier projects.

I won't argue that a large developer with high quality standards and a risk-taking culture doesn't exist now, in the past or in the future. But it is certainly a steep hill to climb.

Rob: I didn't find any stories about any Xbox financial issues in the last couple days on Hoover. Since I'm lazy can you give me a link? Thanks.

-j
 

Yoshi Sugawara

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I read in a recent CNET News article where Steve Balmer of Microsoft mentioned that they're in the long haul for the XBox. He mentioned that it took 10 years for Windows to gain momentum, and implied that he's willing to invest the time.

From:
http://news.com.com/2008-1082-998297...g=fd_lede1_hed

Are you happy with the growth of Xbox?
Yes. We're a clear No. 2 in the market. We are coming on strong. It is probably going to take us another turn of the crank, from a product cycle perspective, before we make money. But most of the things we do as a company successfully today we worked at for years before they made money. Remember, we brought Windows 1 out in 1983 and we didn't have any real volume until 1991. It took us eight years to get volume. I don't know when we got profit, but it took us eight years to get volume.

Take Windows server. We started on it in 1988, but it was probably 1998 before we had real volume, and I don't know when we would have said we had profitability on that product. But most of the good businesses require long-term patience, commitment, tenacity...and you can't be impatient. I feel very good that we have great teams to take MSN and Xbox in exactly those same directions.
 

Morgan Jolley

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One, you haven't made a connection between larger developers having inherently higher quality standards. Two, the tendency of larger organizations is to play it safe -- not a climate for riskier projects
If they're bigger, they have more money, which means the production values of games could go up. If there are less developers, then the big ones can come up with genuinely unique ideas (like Viewtiful Joe, ICO, and Conker's Bad Fur Day) or publish some unique games (like Mister Mosquito) without much of a risk of those games hurting their company that much because the competition won't do much better so long as they (the company being risky) has some other play-it-safe games.

And considering that only a handful of small developers even make a dent in the market, letalone get games published (of which, few are of the high quality people want for $50), I don't see how flooding the market with a ton of small developers really helps in terms of the quality of the games out there.
 

Jeff Kleist

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2 consoles only is best for the market IMO,

However homogenization of developers is a bad thing: I give you EA, nuff said
 

BrianB

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Morgan, I find it thoroughly amusing that your example of a unique game (Ka) from a major company was developed by a small independent (Zoom).
 

Rob_Pierce

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Microsoft and its shareholders' historical expectations for fat margins no doubt had them playing along with the rollout of the low-margin Xbox console. Surely, the lucrative software licensing royalties and the promising broadband-enabled delivery of software updates would make it a rich-margin Microsoftesque addition. It hasn't happened. At this point, it's not likely to happen. While Nintendo has often appeared as the most likely console maker to bow out of the home system hardware race, maybe Microsoft should beat it to the punch and fold. The game isn't fun anymore.
I guess my point is the video games are not a high enough margin arena for Microsoft. I haven't seen many numbers on Live, but I'm curious to see what the numbers look like v. projections as well as how many current subscribers renew once the future pricing structure is announced (I hope at E3, but have heard no news). I would also like to know how much Microsoft plans on Live driving XBox profits. I'll keep looking, but have come up empty so far and Bill hasn't returned my calls yet.

Anyway, this is all just food for thought. As long as the console doesn't fold before KOTOR, I'm a happy camper.:D
 

Morgan Jolley

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First of all, my statements were overly ambiguous on purpose. I was half kidding.

But I still think there are too many small companies. I have nothing wrong with a bunch of guys getting together to make games, but if it leads to flooding the market with sub-par games (and this is a problem from big developers, too), then I think it should be stopped. The only real way to stop crap games from getting made is to not buy them, but the average consumer doesn't care enough to make that happen.

I think the market can handle 3 consoles, so long as the benefits of each one is equal to the benefits of the others and the market is healthy. Right now, the economy is down, so 3 won't stand together. Looks like MS is going to be the closest to getting pushed aside.
 

Rob_Pierce

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but if it leads to flooding the market with sub-par games (and this is a problem from big developers, too), then I think it should be stopped. The only real way to stop crap games from getting made is to not buy them, but the average consumer doesn't care enough to make that happen.
Then it won't be stopped. The way you put it, consumers are purchashing sub-par games. If they do, then they'll keep coming out. I'm not so sure what the "average consumer doesn't care enough to make that happen" means. Do you think people purposely go out and buy crappy games just to keep smaller companies in business? People buy what they want to play; if it's crappy games, then they'll keep the shelves full.

As for the 3 consoles, I think they can all survive, but they must differentiate themselves. PS2 is the clear leader with a ton of games to offer, the GameCube has a core following that will buy everything (like me) and a few absolutely stellar games in addition to the younger market.

The XBox is pretty grey. They tried to be a machine dedicated only for serious gamers that provides the best hardware available. They did this, but the games have not followed. They are also the clear online leader and Live could be a very effective at carving out a profitable niche, but this hasn't happened just yet. I own all 3 consoles and it seems to me that for the average gamer, the XBox offers nothing over the PS2, except for Live. I think MS thought that they could dominate the market just on their hardware, but they haven't followed with enough XBox-exclusive titles.

I hope all 3 survive, but right now, I think the XBox is doomed.
 

Aaron Copeland

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I give you EA, nuff said
I don't buy this at all. A lot of people get mad at EA over not streamlining ports better, but I think their games are generally solid. I was recently looking for a good basketball game for my XBOX and ended up buying NCAA 2K3 over NBA Live 2003. NCAA 2K3 is total garbage. I returned it and got NBA Live 2003 and have enjoyed it thoroughly... so much more polished than NCAA 2K3. I also recently bought PGA Tour 2003 (my best friend and I suddenly went on a sports game kick) and thinks it's pretty good as well. Really, I've not bought any EA games that I thought were truly bad. I'm not saying they don't have some stinkers, only that I have yet to buy one.
 

Joe Szott

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The ratio of great/good/ok/suck games seems to have always been the same in my experience, regardless of big/little companies out there. I'm sure we all remember the Atari 2600 with fondness, but what we forget was that for every Raider of the Lost Ark there were 3-4 ETs that came out for that system. The only change I see these days is that with multiple systems and a horde of games, in abosolute terms there are more great games. In other words, there used to be 2-3 must have games for each system through it's lifespan, now there are 2-3 must have games for each system EVERY year. Sure, there are also many times more suck games too, but that's why you have to read reviews and shop around. I haven't bought a bad game in 6 months, there are just too many known great titles to play first. So I buy Vice City and just skip all the EA titles for 2 months, it's a win-win situation for the descretionary consumer ;)

Rob:

I hope all 3 survive, but right now, I think the XBox is doomed.
I think this is jumping the gun a little. Two quick points here:

You're assuming that MS was in this to make money off the Xbox, I don't think that was ever the plan. They want to own the box next to your TV (and the service) that delivers you music, games, movies, email, etc to your home. Since that market doesn't even really exist yet, no one can put a price target on what that is worth. MS thinks it is worth a lot, maybe enough to write off the Xbox and Xbox 2 to get there. If they can own and develop this market space, that future MS would be to the present one like the present one to the late 80s. It is potentially a very, very, very lucrative area. MS wants it at almost any cost.

Second little point is remember we are only half way through the current console cycle. The N64 beat the tar out of the Playstation for 2 years in sales, by the end of the cycle the PSX was the clear victor. What I'm saying here is it is never over until it is over, not one of the 3 console makers has blinked yet.
 

Morgan Jolley

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Do you think people purposely go out and buy crappy games just to keep smaller companies in business?
Lets just say that I know a few people who actually get mad at me for insulting Superman 64. Whether that's ignorance on their part or just so happening to like a game that everyone else thinks is one of the worst games ever, it's people like them that will keep buying the crap games that get made.
 

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