|
What
Nintendo, Microsoft and Sony should focus on this year with their respective
consoles...
Who
would presume to tell Nintendo how to manage its business? It's easy to forget
that at the launch of the DS, many felt it would get trumped by Sony's PSP,
which would force Nintendo to leave the hardware business. Now it is the growth
engine of the industry, and has significantly expanded the number and types of
people who consider video games to be an essential part of their entertainment
menu.
Anyway,
if I were forced, I would suggest that Nintendo's 2009 should be about
continuing to address hardware supply issues to attempt to reach equilibrium,
and developing its online proposition.
Microsoft's
Xbox division performed strongly in 2008, so it seems somewhat churlish to be
too prescriptive. Its management team loudly declared Europe to be its top
priority early in 2008 and subsequently delivered.
Xbox 360 performed strongly
in numerous EU territories where it, and the original Xbox, had struggled previously.
Microsoft got it right in 2008 with strong sales performance in Europe and
North America.
For
2009, I would humbly suggest that Microsoft should increase the volume and
variety of digital media delivered through Xbox Live. There is a very healthy
consumer appetite for content delivered in this way, and Microsoft has carved
itself what could be a very important position in the market for digitally
distributed media at an early stage in the industry's evolution.
To
its credit, Sony has remained coldly focused on what it needs to do to enhance
its platform, with the release of Home and a very aggressive attitude to
continually improving the technology of their flagship console through firmware
updates. PS3 owners enjoyed exclusives, such as Metal Gear Solid 4 and LittleBigPlanet.
For
2009, Sony has perhaps the best opportunity of all the manufacturers to bring
MMOGs to the console market, with titles like Free Realms.
Consumers need more clarity on why Home is a destination they should
continually engage with. Sony has the technology and the content; now it needs
market share. One key tactic is, of course, to lower the cost of the PS3.
What
game developers should focus on this year...
I
wouldn't shed a tear if there was a reduction of budget software targeting Wii.
Retailers, already under enormous pressure, could do with a more focused
offering from the publishing community for Wii.
In the UK market, it was
practically impossible for any retailers to stock and promote every single Q4
2008 Wii release with the attention that a new game release deserves, because
there were simply too many of them.
Budget
software obviously plays a very important role in the marketplace for certain
games purchasers, but I question whether such large volumes are a healthy or
sustainable phenomenon, especially if it raises the specter of consumer
confusion and disenchantment.
More
emotional than professional perhaps, but I hope EA's refreshing and aggressive
attitude to investing in new IP is not discouraged by a Q4 sales performance
which fell below its expectations.
 EA LA's Boom Blox
EA has published some excellent new IPs this
year, and has shown a lot more courage than many observers would have given it
credit. It turned around and did exactly what many vocal observers were crying
out for it to do: bring new and ambitious content to the market.
Mirror's
Edge, Dead Space, Boom Blox and Skate represent
significant bets for the company, and one hopes they work commercially for it
in the longer term, encouraging more investment in new, ambitious and exciting
content.
In
addition, Criterion Games' generosity in releasing large, significant and free
content updates for Burnout: Paradise deserves positive recognition.
These moves are to be emulated.
Overall
prediction for the industry in 2009...
The
digital distribution of games and other media to online consoles are hot topics
currently, and will continue to increase in significance to the marketplace and
balance sheets.
[Do
you have a business-related question about the video game industry that you
would like to suggest for discussion in Analyze This? Are you a
professional analyst and would like to take part in this column? Email
howardhwen@gmail.com.]
|
Printer-Friendly Version
Ed
Barton, 
THANK YOU! At least one of you gets what's going on. The first two analysts feel like there JUST looking at the numbers, but Ed takes a look at consumer reaction. All of these "budget" (read: crap) games are diluting the Wii, and Nintendo needs to address this problem. Thankfully, Sega is trying hard with House of the Dead and The Conduit. Here's hoping more developers see this and take action.
I wonder if Pachter is looking at anything besides numbers, and if he has anything to back up why he would suggest more people buy the Arcade unit of the Xbox 360. It is a worthless device solely because it does not come with a hard drive. I'm all for more and better games on XBLA, but these games are getting bigger and bigger, and the 256 Mb memory stick that comes with the Arcade unit will fill up WAY too quick, even compared to the 512 Mb hard drive on the Wii with Virtual Console. Sadly, Pachter suggests there are so many un-informed people out there that would purchase such a worthless device. Sad, but maybe true. Hopefully, the consumers prove him wrong, and Microsoft gets rid of the Arcade unit, and drops the 20 Gb unit to $250 - something that seems much more logical than trying to continue to push the Arcade sku.
That's not to say that the Arcade SKU is amazing, but I'd say "crippled" is a good word to replace your "worthless".
The arcade is selling at a higher pace than the Premium or Elite ones, that explains why the average retail price of the Xbox 360 has been dropping month after month (as stated at http://www.gamasutra.com/view/feature/3906/npd_behind_the_numbers_december_.php?
page=2 ). Consider this: the amount of hardcore gamers is limited, and most of them have already bought a PS3 and/or a Xbox 360 3 or 4 years into the life of each console (especially if we consider a new console may be coming in just 2 years). Microsoft would have dropped sales from 2007 to 2008 hadn't it been for the price cut (which entitles casual users to buy it). That is where the Arcade is useful: attracting casual users. Sure, it may not match an Elite with a 120gb, but don't compare the hardcore needs with the casual needs.
Tom, that is how the casual market behaves. It only takes Oprah Winfrey mention a book to make it a best-seller, doesn't matter if it is actually good or interesting. Name recognition is half a sale. Having a game sponsored by Jillian Michaels is more important than one by Sid Meier. Also, you may give too much importance to industry insiders and hardcores. Without the casual market, the console leader would end up selling 30m-50m consoles only.
I'm not saying that's right though. I thought that the lower cost of production for Wii would create a wide variety of new games by indies. Instead, Wii has a staggering amount of crap. I wonder if the Wii had a more integrated Demo or User Rating mechanism built in if that would help at all.
Ask yourself a question: Is the Wii really not good enough for you... or are you a pretentious elitist "hardcore" geek?
Get over yourselves.
I'm fairly sure Nintendo doesn't care very much about 3rd party software on the Wii. It's not affecting their first party software sales, so I'm not sure what they'd do to "address the problem." They make off licensing, I believe, regardless of 3rd party game quality, so more of them is good for them.
"It is unfortunate developers and publishers are so rarely putting their best team on Wii games. I'd love to see what would happen if they did."
I've seen what happens when a great team is put on a Wii game... you probably wouldn't be as impressed as you think.
Especially in these days, market perception will eventually play into how well the Wii sells in the future. Is it a fad? When does it not become a fad? Will Wii Motion Plus split the divide of "hardcore" and "casuals" further, or will it pull a Wii-Play and sell like hotcakes through out the year?
The main point I want to re-express here is to give a nod to Barton because he's not only looking at the numbers, but sees that the perception of Wii among "hardcore" gamers and most gaming press is becoming somewhat negative. As a consumer, and a "pretentious elitist hardcore geek", I appreciate the fact that he's not just consumed by the numbers and sees that perception does indeed tie into market share and profit.
Just look at Sony, posting their biggest loss in almost 10 years. Now, there are certainly other reasons that negative perception that account for their losses (i.e. price, lack of "good" exclusives), but it has to be said that the perception of Sony ties directly into their sales. And hey, my failing might be that I'm giving too much weight to perception in a business that more recently prefers profitability over evolution (save the occasional Miyamoto game), but the fact that Barton acknowledges this shows me he is more in tune to the industry than Pachter or Divnich, and I thank him for that silver lining he gives us consumers.
Err... or we already have a WiFi network, and prefer that to running a physical cable 40 feet across the house. Some of us don't live in a bedroom in our parent's house anymore, Michael. OK, my old XBox 360 is cabled... right into the Airport Express one foot away in my home theater and then wireless bridge to the main WDS node. Seriously, what's the intersect between the set of people unable to figure out a cable and the set of people with a home wi-fi network and the ability to retrieve the hexed up password?