Category Archives: Platforms

Yankee Group, Dissected

Last week, Yankee Group predicted that the PS3 would eventually beat the Xbox 360 (though not by much), and that the Wii would perform quite poorly. I initially disregarded the analysis as thoughtless and resolved to ignore it entirely. That was unfair of me. The analysis is not thoughtless (though I believe it’s mostly incorrect), and dissecting it may prove useful, insofar as it sheds light on common misconceptions that could hurt developers and publishers.

Let’s start with the PS3 vs Xbox:

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Sony in Jeopardy

David Cole (of DFC Intelligence) has published an analysis of the Playstation 3. It’s well-written, so I thought I’d share parts of it with you:

We emphasize that there is a great deal of uncertainty because much will depend on how individual players execute their strategies over the next several years. However, two things are clear: 1) the high price of the PlayStation 3 is going to slow overall industry growth, especially for software and 2) if Sony does not change its current strategy for the PS3 the system will probably end up in third place in installed base. Microsoft and Nintendo have been handed that golden opportunity and both companies have a chance to make their systems the market leader. However, it looks like under any scenario the video game market is going to be severely fragmented, with several incompatible platforms having strong market share and even the possibility of a platform doing well in one region and struggling in another.

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Using Achievements to Reduce Game Resale

Last year, I wrote about using online content (especially the user-generated variety) to discourage piracy of single-player games. Of course, this strategy could help reduce video game resale as well.

It recently occurred to me that Xbox Live has provided an easy way for developers to make a (small) dent in game resale. It just requires a simple modification to an existing feature. I am referring to Xbox 360 Achievements, which have proven to be potent motivators for hardcore gamers. What if a given copy of a game could only generate Achievements for one Xbox Live account? Consumers who purchase used copies of the game can still enjoy it (as is their legal right), but can’t score points.

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E3 Recap: Console Wars

E3’s over, and I’m back. First, a quick kudos to the ESA for keeping noise levels under control this year. It was actually possible to make a phone call in (parts of) South Hall. Not to say “big audio” was eliminated — you could feel your torso rumbling with the bass in the EA booth. Love it.  :)

So much to say; I hardly know where to begin. Let’s start with Nintendo:

Nintendo Wii

By now you’ve probably read about Nintendo’s triumph; people literally stampeded past the Sony booth in their rush to experience the Wii. Of course, as many others have already pointed out, “winning E3” doesn’t mean a whole lot in the long run (re: Dreamcast), but it certainly doesn’t hurt, and it sure must feel good.

My personal experience with the Wii was (mostly) a blast. I couldn’t get enough of Wii Tennis; it feels so natural using the controller as a virtual racquet, and there’s something too cool about delivering a vicious overhead serve in the comfort of your living room.  :)

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User-Generated Content: The Good, The Bad, and The Ugly

Via Joystiq, an interesting controversy: id co-founder John Romero has accused the modding community of hurting the game industry by exposing or introducing inappropriate content (i.e. nudity) in PC games. His post was in response to the ESRB’s re-rating of Oblivion (which happened after a nudity mod surfaced.) John’s exact words: “modders are now screwing up the industry they’re supposed to be helping.”

There are a number of interesting comments on John’s original post which you may wish to read. Meanwhile, this raises a couple issues that I’ve been meaning to write about:

Whose Side Are They On, Anyway?

When consumers decide to create content for a game (or anything else), they’re doing it to indulge their own creative impulses, and/or to share something with friends, and/or to gain notoriety, and/or other reasons that have little to do with “wanting to help the industry” (or the developer, for that matter.) Let’s not kid ourselves: the guys who made Counterstrike didn’t do it to make Valve rich… that was simply a nice side-effect.

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Console Business Model at Risk of EU Disruption?

The current console business model has been established for long enough that most of us take it for granted. Develop great hardware, sell it near or below cost, then generate profit by taking a cut of the revenue from all future game sales. If nothing else, this gets consoles into more homes, which benefits everyone in the long-term. But what would happen if the model were somehow disrupted?

I started thinking about this when I found out that the EU had voted to ban printer manufacturers from forcing consumers to buy their own-brand refills. The business model for printers is very similar to consoles: sell the printers cheaply, then profit from ink sales. (The major difference is that console makers don’t completely lock out third parties; they just exercise quality control and take a big cut of profits.)

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The End of the Eye-Candy Arms Race

Danc over at Lost Garden has an interesting post (in a multi-post series) analyzing the development model currently favored by most game studios. Lots to read in there; he does a good job of explaining how/why studios are pouring ever-more funding into licensed IPs, art, and “more of the same technologies”, why studios think this is actually a good risk-reduction strategy, and how this arms-race will hurt everyone in the long-term.

Juxtapose this with the latest unhappy news: a survey found that 80% of teens intend to cut back on time spent playing video games, and 70% said they are “losing interest” in games altogether. (Oddly, the survey-taker calls this a “stabilization”, since last year 75% of teens reported declining interest in games. Why does this fail to make me feel better?)

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GDC: Mobile Operator Spotlight Panel

First day of GDC down, four to go. I was bouncing like a pinball between the workshops, Serious Games Summit, GDC mobile, and meet-ups with friends. What a great conference.  :-)

The session that most caught my attention today was the “Mobile Operator Spotlight Panel”, moderated by Seamus McAteer of M:Metrics and packed with executives from Sprint, Orange, Virgin, Cingular, Vodafone, and Verizon.

First, some interesting facts revealed during the panel:

  • Orange is currently reaping the highest average price for games ($7.32, as opposed to $5.62 for Sprint and $6.27 for Verizon). No word on volume.
  • M:Metrics research shows a huge disconnect between mobile game offerings and projected consumer demand. Current supply of sports and action titles exceed projected demand by a factor of two. On the other hand, the supply of games in most other genres meets half (or less than half) of projected near-term demand. That includes: arcade puzzle, board, card, casino, FPS, quiz, word, and retro arcade games. Quite a list! And this isn’t a “low demand / even lower supply” thing — the arcade puzzle, card, and casino game categories had the highest projected demand of all categories on the list. That’s 150-200 games worth of demand for each category, as opposed to just 75 games worth for the saturated action category.
  • In 1/06, Jamdat controlled ~25.4% of all US mobile game download volume. No real news here other than “Jamdat is still the gorilla.”

Second — I was struck by the universal agreement among the operators that brand / franchise power was all that mattered in the mobile games space. Along these lines, Jason Ford (from Sprint) claimed that if he cut his offerings from 435 games to 50, sales would probably remain the same. Tim Harrison (Vodafone) spoke passionately about bringing major game brands into the European market. Ken Ruck (Virgin Mobile) quipped: “Pitfall came out before my kids were born; it isn’t relevant to them.” It went on and on like this.

Ironically, in a previous session, Mitch Lasky of Jamdat/EA said “It’s crazy that games like Tetris and Madden are getting the same attention from carriers as some Chinese whack-a-mole game.” You’d think that the across-the-board operator fascination with franchises would be enough for Jamdat. (One also wonders if Mitch registered the irony of comparing Tetris to some “crazy Chinese whack-a-mole game” — after all, Tetris was a crazy Russian block game not too long ago.)

To me, this all seems like a pretty serious failure of imagination. Recognizeable brands are powerful, yes, but they blow everything else away in part because, quite frankly, purchashing systems for mobile games are terrible! It’s difficult to find anything worthwhile outside of the top games displayed by a carrier. Users are given almost no ability to quickly and conveniently demo and rate games (which would permit obscure but enjoyable titles to bubble up and get noticed by other users, creating a virtuous cycle). And mechanisms for viral marketing are still in their infancy; most games / platforms don’t make it terribly easy for a consumer to quickly share a game with many other consumers.

Part of the problem has to do with the many different handsets on the market, of course. When it takes 700 versions of a game to cover the majority of the phones out there, everthing becomes dramatically more complicated than it should be. But you can only blame so much on the handsets. Bad shopping / rating interfaces can’t be blamed on handsets. Lack of cooperation between operators (to better enable viral marketing across the population) can’t be blamed on handsets. “Long tail economics” is not a pointless cliche. When you facilitate it, it works. When you bury content underneath a mountain of bad UI, it doesn’t.

(BTW, sorry if this reads a bit rough. I need sleep badly.)

PC Games in Trouble

Warning: serious stream-of-consciousness ramble ahead.

Today I tried to install Stubbs the Zombie on my PC, but the installation failed. I have no idea why. Three weeks ago, I spent two hours trying to recover from a driver update gone awry. This weekend I hope to find time (hah!) to format my desktop’s hard drive, in hopes of eliminating some serious Windows-related performance slowdown issues. Why am I writing all this? Because I think it helps explain why the AAA PC game market is shrinking, despite a recent surge in PC sales.

I’ve always loved PC games ever since I played Space Quest 1. I still think the PC is a superior gaming platform. The problem is, that’s just not enough anymore. PCs are finicky, bulky creatures. Consoles are (mostly) stable — pop in a game, and you know it’ll work. Much more importantly, consoles only cost a few hundred dollars. If you want to play the latest AAA PC games (as they were intended to be played), you need to spend at least a thousand dollars every few years in order to keep your hardware up to date. Unfortunately for the majority of Americans, that’s a serious problem. Given the reliabiliity and cost issues, as well as the fact that consoles are now amazingly powerful machines, I just don’t see great hope for the PC.

On the other hand, the rise of MMOGs does seem to help counteract PC game market shrinkage. I find it hard to imagine playing social games without a keyboard, and there aren’t (currently) enough consoles connected online to challenge PCs for MMO dominance. It’s also still much easier to facilitate user-created content on the PC than it is on a console, and I firmly believe in the revenue-generating power of user-created content. Counter-Strike isn’t the most popular online FPS of all time for nothing! (Read here about the positive effect CS had on Half-Life sales.) And Microsoft’s commitment to the viability of the PC as a gaming platform certainly helps. Maybe these factors (among others) will serve to permanently preserve the health of the PC gaming market. As an avid PC gamer, I’d like to think so. But I won’t hold my breath.

PS. This post is US-specific. I doubt that the PC gaming market in South Korea will slump anytime soon!

Update: Forgot to emphasize — I’m talking about AAA games here, not casual games.

Sony Cares More About Blu-Ray than the PS3?

More interesting news via Next Gen; this time covering speculation that Sony is actually more concerned about Blu-ray (and beating Toshiba’s HD-DVD) than it is about competition from Xbox. Take this along with my assertion that Microsoft sees Xbox as primarily a defense of its home computing monopoly, and games start to feel rather extraneous to the upcoming console war.

Anyway, Next Gen presents some good reasons for Sony to be concerned about HD-DVD. Michael Pachter speculates that, in a successful scenario, Blu-ray could be worth $2B/year in royalties to Sony. Much-needed cash for a company that derives an uncomfortably huge percentage of its profit from just its games division. Then again, given that huge percentage, one finds it hard to believe that Sony would discount the importance of the PS3. If the 360 fails, Microsoft still has Windows. If the PS3 fails, Sony has… not quite so much.

And that’s my point. I don’t believe you can meaningfully distill Sony’s battle plan into something as simple as “win Blu-ray!” The PS3 is important to Sony’s future. Blu-ray is important to Sony’s future. It’s all tied up together, and I’ll bet that creates some really interesting tensions within the company.

Nintendo’s strategy keeps looking good to me. Let Microsoft and Sony kill each other in the high end market, fighting wars that don’t all relate specifically to games. Perhaps any consumer who wishes to own two consoles will opt for a PS3 or a 360… and the Revolution. It’ll be cheap enough, and it’ll have a bunch of innovative games that you can’t play on the other consoles.