Bonus Round: State of the Industry [Archive]

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BreakABone

02-07-2010, 05:34 PM

Angrist

02-09-2010, 07:47 AM

Interesting.

Also interesting how most people seem to deal with Nintendo as a whole different category. They don't mention the million sellers that Ninty has each year. Maybe the next part has that?

Bond

02-09-2010, 10:53 AM

Also interesting how most people seem to deal with Nintendo as a whole different category. They don't mention the million sellers that Ninty has each year. Maybe the next part has that?
I've thought this is the correct way to deal with Nintendo for a few years. They have effectively segmented the market, and are no longer a direct competitor with Sony or Microsoft. Some people don't like that observation, though, and I'm not really sure why... it's simply a business observation.

BreakABone

02-09-2010, 12:26 PM

I've thought this is the correct way to deal with Nintendo for a few years. They have effectively segmented the market, and are no longer a direct competitor with Sony or Microsoft. Some people don't like that observation, though, and I'm not really sure why... it's simply a business observation.

Not that it has much to do with the video, but we've had this discussion before, and its simply not true.

If the Wii did not exist, sales of the PS3/360 would have increased. Same if Ps3/360 don't exist in the Wii's world.

Say segmented audience all you want, it is still drawing from the same pool of humans.

Bond

02-09-2010, 03:40 PM

Not that it has much to do with the video, but we've had this discussion before, and its simply not true.

If the Wii did not exist, sales of the PS3/360 would have increased. Same if Ps3/360 don't exist in the Wii's world.

Say segmented audience all you want, it is still drawing from the same pool of humans.
None of those facts discredit the argument that Nintendo has segmented the video game industry.

Frankly, I don't understand why you are so passionately against this view... segmenting industries can be very profitable for businesses (it can also be very risky, of course). Nintendo has done so quite effectively.

Thespis721

02-09-2010, 04:03 PM

I'm not sure that I agree with you there BB. Sure, they are drawing from the same pool of humans, but that's like saying HDTVs are competing with the same pool of humans as regular TVs.

There are a LOT of people out there who don't own HDTVs, don't care to ever own HDTVs and never will. Likewise, there are people who don't own 360/PS3, don't care to ever own them and never will. But they do own a Wii.

And likewise, I don't know many gamers who say they bought the Wii instead of the 360/PS3. I know a ton who bought a 360 instead ofa PS3 or visa versa. I'm sure there are people out there who chose a Wii over the 360/PS3, but I don't think they are a strong majority of public opinion.

Typhoid

02-09-2010, 04:04 PM

If the Wii did not exist, sales of the PS3/360 would have increased. Same if Ps3/360 don't exist in the Wii's world.

That's a dumb way to look at it.
That's like saying if no cars or trucks existed, Jeep/Hummer sales would go up tenfold. Well of course they would, it's the only option.

But Bond has a completely valid point. Nintendo markets to children and their parents. Sony and Microsoft market between those two age ranges.

Thespis721

02-09-2010, 04:29 PM

I have no idea what the video is. Unfortunately when I'm at work, all these videos come up as big white boxes. I was just commenting on the comments, really.

BreakABone

02-09-2010, 06:30 PM

I removed my prior statement, really don't care to get into this.

To answer Angrist's question, for the most part the first section seemed to focus on 3rd parties especially EA and Activision.

TheSlyMoogle

02-09-2010, 09:29 PM

Well all I have to say is Michael Pachter is a handsome man and he's in the video game industry? Well now...

Thespis721

02-10-2010, 09:24 AM

Angrist

02-10-2010, 11:34 AM

I wasn't talking about Nintendo vs. PS360. I was talking about cloning succesful PS360 games vs. cloning succesful Wii games.

Modern Warfare sells millions --> we get hands full of MW clones.
Mario sells millions --> where are the Mario clones?
They seem to ignore this topic. Perhaps it's because Nintendo franchises are hard to clone because of character fame?

BreakABone

02-10-2010, 11:59 AM

I think what REALLY this whole thing comes down to is that the video game industry thought it was invincible to a WORLD WIDE ECONOMIC RECESSION/DEPRESSION.

All they are saying is that they didn't sell to meet their "expectations". How they come about those "expectations" is beyond me but I'm sure whatever they are, they assume they are going to do BETTER then the previous year regardless of analysis.

But especially since Nintendo wasn't mentioned, these are premium games at a luxury price. When 2 out of every 10 Americans is out of work, you can't expect to have as much selling. Everyone is saving up for MW2.
I think Pachter did a pretty decent job at answering that.

Its not so much that expectations changed as much as it is, the goal post for success got pushed back further. Just looking at the top 10 games of all time.

Roughly back at the end of 07/08 this is what the top 10 games of all time looked like

1. Grand Theft Auto: San Andreas (2004) - 9.4 million
2. Guitar Hero III: Legends Of Rock (2007) - 8.2 million
3. Madden NFL 07 (2006) - 7.7 million
4. Grand Theft Auto: Vice City (2002) - 7.3 million
5. Madden NFL 06 (2005) - 6.65 million
6. Halo 2 (2004) - 6.61 million
7. Madden NFL 08 (2007) - 6.6 million
8. Call Of Duty 4: Modern Warfare (2007) - 6.25 million
9. Grand Theft Auto 3 (2001) - 6.2 million
10. Madden NFL 2005 (2004) - 6.1 million

Top selling game was just under 10 million, lowest selling game was just under 10 million.

And now you have the current list,
1. Wii Play
2. Guitar Hero III: Legends of Rock
3. Grand Theft Auto: San Andreas
4. Call of Duty: Modern Warfare 2
5. Wii Fit
6. Mario Kart w/ Wheel
7. Call of Duty 4: Modern Warfare
8. Madden NFL '07
9. Call of Duty: World at War
10. Namco Museum

Hmm trying to find Wii Play LTD, but don't have off hand, but the number 4 game is MW 2 and that is at 8.82 million and Madden is at 7.7 at least from the prior list.

Which means that there have been a ton of HUGE selling games this generation. I believe the first generation with multiple 20 million selling games.

But you'll also notice that the list is pretty much just EA, Activision and Nintendo. So the spread isn't really even for all, and they are all looking for that one mega hit.

I wasn't talking about Nintendo vs. PS360. I was talking about cloning succesful PS360 games vs. cloning succesful Wii games.

Modern Warfare sells millions --> we get hands full of MW clones.
Mario sells millions --> where are the Mario clones?
They seem to ignore this topic. Perhaps it's because Nintendo franchises are hard to clone because of character fame?

You'll get one camp that says people have tried to mimic what made the Wii a success because there are a ton of mini-game comps and fitness games, but I agree.

People always point to Wii Play/Sports/Fit as the reason the Wii does so well. When stuff like Smash, NSMBW, Mario Kart and galaxy do EXTREMELY well.

But sure they will get into 3rd party lack of success on the Wii sooner or later.

Thespis721

02-10-2010, 12:22 PM

With the lack of Nintendo covers, I put it to this.

Nintendo makes GOOD GAMES with characters that, for one reason or another, seem to chime with us well. Probably because when we were kids, we loved playing Mario so the nostaglia continues into our older age and is helped by the game still being frakking good! And then it helps that while we're getting our nostaglia nuts off, the kids younger then us are getting their minds indoctrinated by Mario so they can grow up to be us. And so the cycle continues.

Who doesn't like Mario? The people who started playing games when the PS2 came out.

But even still, I think the industry is fine. Smaller companies will die out if they don't find that mega hit. Bigger companies will fire people when they are trying to increase profits. But that's kind of like any industry, really.

KillerGremlin

02-11-2010, 03:24 AM

Earl should ask Nintendo for compensation. :ohreilly:

TheSlyMoogle

02-11-2010, 04:15 AM

Earl should ask Nintendo for compensation. :ohreilly:

Definitely should at least get a t-shirt or something. :Nintendo:

Angrist

02-11-2010, 05:44 AM

Hey don't forget the Dutch department!

BreakABone

02-14-2010, 03:39 PM

BreakABone

02-17-2010, 01:59 PM

Jason Rubin responds to some of the responders from his appearance, and I have to say I like the dude. He makes some fair points and explains himself well. I also tend to agree with what he is saying here.

To Bonus Round Viewers,

I’d like to apologize, because I don’t think I did a good job of explaining what I was suggesting, and the panel quickly turned it into an argument about business models I didn’t suggest and game balance, rather than a fair price for games and the industry’s ability to survive.

Additionally, there were arguments made on the panel against suggestions that were not mine, but somehow I got blamed for: for example Shane suggesting that I would approve of games that shut off if you didn’t pay or paying for prestige. These are not my beliefs and if you watch the panel you can see that I never suggest either and denied that they were good ideas. I want to clear that up.

It is a discussion of industry financial survival that I was brought onto the show to discuss, and it is here that any discussion of what I really believe has to begin.

The first misconception from those that have commented is that the industry can stay as is. The most common comment has been that many gamers like the current model of game pricing. Were the industry in good shape financially right now, then I would agree that there is no reason to change. Unfortunately, this model is not currently working very well and may not support continued game creation. This is not my opinion alone, and I didn’t invite myself to the panel to ask myself these questions. These are unfortunately blatantly obvious facts. Michael Pachter specifically pointed to EA’s recent earnings (or lack thereof) as an indication that something is indeed broken. EA and Activision’s large recent layoffs (Activision after the show’s taping) also point to less AAA games getting made and changes ahead. Losses and layoffs are not a sign of a healthy industry.

Certainly, all of us understand that if a company loses money continually it must either 1) change the way it behaves or 2) cease to be. We can all agree that ceasing to make games is not what we want, so we have to look for a change of behavior that makes the company healthy and profitable so we can all get the games we want to play.

This does not necessarily have to be digital distribution or other payment models. It could be something nobody has thought of yet. But making games at a loss is not a business that can survive so SOMETHING clearly has to change. It is my suggestion that alternate business models and digital distribution are a possible solution.

The second misconception is that I somehow advocate letting people buy their way through games, to get ahead of others through payments, or somehow unbalancing the game, for example by “buying prestige.” Anybody who took this out of the panel was not listening to my continual protests.

I have never believed that game balance should be influenced by cash.

Possibly the most misconstrued (and most unintended) moment was when we discussed WOW gold mining and I conceded that life isn’t fair. This was not a suggestion that games shouldn’t be fair. Nor was it a suggestion that people with money should be able to buy advantage. I was referring to the same unfairness that allows some people to pay $60 for a game while some are unable to afford that pleasure – EVER. That is unfair, so there is already unfairness in the system today. But I would endeavor to make the system more fair rather than stick with the current unfairness. I don’t believe that digital distribution and alternate business models leads us away from that goal. In fact, I believe they may lead us towards it.

To be clear:

I have been a game maker for my entire life and balancing games has been the most important skill I have learned. Over 40 million people have played the games I made and thought my balancing was fair and fun. I am aware that is no less ridiculous to let people buy completion of a level of a game or to buy “prestige” than it is to try to sell them the end of a movie plot before they go into a movie theatre. Furthermore, since many games today are multi-player, unbalancing a game will have tragic results not only for the person buying the advantage, but also for those that did not. In short, it screws up the whole game for everyone.

Buying bullets, buying advancement, buying better guns, and tons of other ideas were shot down by the panel, and those that have commented, but those ideas were never raised by me. It is really easy to rail argue something I didn’t say, but it says nothing about my suggestions.

The third misconception is that while many of the comments have assumed that alternate business models must mean higher costs to gamers on average. We do not know this to be true. I do believe that the model will distribute costs differently, and hopefully a model that is as good for the gamer and better for the industry can be found.

If anything, the current model is not fair pricing. The small number of heavy users for each game get an incredible deal, while the majority of gamers, who are searching for a game they love, can try less games because of the price point. There is a real cost to publishers for multiplayer games in servers and infrastructure, which is unevenly borne by those that don’t play the game as much as those that do. This was not true with the old offline game model, and it is not true with DVD’s. That inefficiency is great for hard core gamers (who of course are overrepresented in the Bonus Round audience) but bad for the industry.
My comments that the industry must take chances and create new experiences, which I was lauded for in the comments in section 1 of this panel, are at direct odds with the current model.

For example, when researching a recent online game I calculated that the highest volume user (who had played 150+ 8 hour days in the games 190 days of release!) was paying less than a nickel per hour. Now of course this was only the highest volume user, but it is insane to argue that this is fair pricing. This user was costing the publisher money based on server and bandwidth costs. Who was paying for this usage? Users that played less and the publisher were paying. That may have been you.
The fourth misconception is that I was suggesting a specific model for specific games.

While a subscription may work for some games (WOW is one), it is not the cleanest or nicest model, and may not fit for many other games. Just a reminder, I never suggested subscription or pay as you go during the panel. And I certainly never suggested your game should “turn off” after a period of time. I don’t like that idea either. Nor was I suggesting that FarmTown’s model would work for any specific game. Every game is different, and every game might need a different solution. But I think there are solutions.

In fact, I was vague on specific implementations not because I don’t have ideas, but because one solution cannot possibly fit all games. There are many, many examples of digital distribution and alternate business models that are better and are working for gamers and game makers, from inexpensive games to full sized games. There are billions of dollars in income in such games with tens of millions of users… some with more users than the biggest console game. Anyone who denies this has not done any research.

I believe that game developers are some of the smartest people on earth. If they spent as much time being creative with business models as they are with content then I think that they would find solutions that made gamers and game makers happier… even those who dismiss the concept without giving it a chance.

PS: If you would still like to call me an idiot directly you can find me at www.facebook.com/thejasonrubin or on twitter at jason_rubin.

http://www.gameslice.com/2010/02/17/jason-rubin-responds-to-bonus-round-commenters/

TheGame

02-18-2010, 12:46 AM

I think it's an interesting subject... But I think the thing he didn't stress enough is what he meant by not "buying prestige". The game that comes to mind to me, of course, is world of warcraft.If you would have asked me before the last expansion came out, if someone being able to buy a high level character is unfair.. I'd have said yes.

Then I saw how achivements and death knight worked out.

I personally think if more emphasis is put on 'prestige' and completing certain tasks at every level... opposed to just trying to reach a certain level, then buying your way ahead doesn't really bother me. As long as they don't cross the line into it being an unfair advantage and imbalancing the game as-is...there's no reason not to allow it.

Lets say in a simple game, like SSB:Brawl. If Sonic was made a special character that you have to complete a 5 hour endurance quest for, and people could buy him for $30 it wouldnt bother me. It'd bother me if sonic was grossly over powered, and it took even more time to obtain him.. and if the game was imbalanced in such a way that buying him gave people a competitive edge.

As long as the people who don't buy into things get more oppertunities to get achivement points and trophys etc (aka prestige), then there's no reason to lose sleep over it.

Buying weapons, cars, etc don't bother me, as long as the game is balanced to start..

BreakABone

02-21-2010, 03:33 PM

Go figure, I agree with The Game. Somewhere hell is freezing over with flying pigs.

Here is the most recent segment, I wish these things weren't weeks apart.

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BreakABone

02-28-2010, 05:03 PM

The final part of the discussion

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Mostly touches on the music genre and what developers need to do to shore up those investments, and touch on Natal/future of interface.

And as a Bonus, recent episode of Pach Attack
<div style="width: 480px;"><object classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=8,0,0,0" id="gtembed" width="480" height="392"> <param name="allowScriptAccess" value="sameDomain" /> <param name="allowFullScreen" value="true" /> <param name="movie" value="http://www.gametrailers.com/remote_wrap.php?mid=62417"/><param name="quality" value="high" /> <embed src="http://www.gametrailers.com/remote_wrap.php?mid=62417" swLiveConnect="true" name="gtembed" align="middle" allowScriptAccess="sameDomain" allowFullScreen="true" quality="high" pluginspage="http://www.macromedia.com/go/getflashplayer" type="application/x-shockwave-flash" width="480" height="392"></embed> </object><div style="font-size: 10px; font-family: Verdana; text-align: center; width: 480px; padding-top: 2px; padding-bottom: 2px; background-color: black; height: 32px;"><div><a style="color:#FFFFFF;" href="http://www.gametrailers.com" title="GameTrailers.com">Video Games</a> | <a style="color:#FFFFFF;" href="http://www.gametrailers.com/game/pach-attack/12619" title="Pach-Attack!">Pach-Attack!</a> | <a style="color:#FFFFFF;" href="http://www.gametrailers.com/video/episode-104-pach-attack/62417" title="Episode 104">Episode 104</a></div><div style="padding-top: 3px;"><a style="color:#FFFFFF;" href="http://xbox360.gametrailers.com/" title="XBox 360">XBox 360</a> | <a style="color:#FFFFFF;" href="http://ps3.gametrailers.com/" title="PS3">Playstation 3</a> | <a style="color:#FFFFFF;" href="http://wii.gametrailers.com/" title="Wii">Nintendo Wii</a></div></div></div>

Angrist

03-01-2010, 12:27 PM

I don't feel like they really touched what's really going on in the industry. Maybe it's because it took 3 weeks to watch it.

BreakABone

03-05-2010, 01:02 PM

I don't feel like they really touched what's really going on in the industry. Maybe it's because it took 3 weeks to watch it.

Actually, I think they touched on a bit, but also glossed over a lot.

Over a 40 minute discussion, and little mention of the big 3 company. Hardly any mention of indie developers and the downloadable scene, but the stuff they did touch on made sense.

The industry is in trouble, people can point to the recession and the terrible economy, and that is part of the problem, but really, I believe the industry jumped a generation ahead of where it needed to be. Somewhere in the transition from PS2/GCN/Xbox we lost the B games, the games that weren't AWESOME Triple AAA affairs, but they weren't exactly shovelware/crap, and I think that's because video game budgets spiralled so much out of control, that everyone needed to make every game a hit to sustain any type of profit.

Sure there are some developers that still maintain that, but fly so far under the radar.

I mean its good and bad for the gamer, we are getting more Triple A affairs than ever before. I mean I sometimes call the 360 the "Game of the Month" console as one game comes out firing on all cylinders for it to be completely forgotten the next month, but the fact that it has so many hits speaks to the console, but it also doesn't help especially if your first month is bust.

I mean Bayonetta/Darksiders/Dark void will all be forgotten by end of this month because they released in the month of Mass Effect, I have no idea if any other game came out around Bioshock and the same with this month.

Anyhow, just rambling, no one will really read nor respond.