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'E3 to remember' leaves analysts optimistic about next-gen
'E3 to remember' leaves analysts optimistic about next-gen
June 13, 2013 | By Mike Rose

June 13, 2013 | By Mike Rose
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    13 comments
More: Console/PC, Business/Marketing, E3



Analysts have expressed "a renewed confidence in the upcoming [console] cycle" following the various E3 reveals this week, with optimism well and truly on the table.

Doug Creutz at Cowen & Co described this year's E3 as "one of the better in our memory," noting that as long as the proposed software drives the new hardware, "next-gen should do just fine."

Looking to those games which were announced for both current gen and next-gen consoles, he added, "We think gamers will want to play them on the new boxes to take the fullest advantage of next-gen graphics and interactive capabilities."

Colin Sebastian at Baird Research agreed, noting that he is "cautiously optimistic" about the next generation of consoles.

"We continue to believe there is enough pent-up core gamer demand, as well as ancillary benefits of a hardware refresh, to maintain an elevated level of consumer and investor interest in video games," he said -- although he added that Microsoft and Sony "still need to demonstrate a compelling value proposition in order to drive an installed base beyond core gamers."

Both analysts believe that both Sony and Microsoft have the chance to be competitive with their respective consoles, although Creutz had some sobering words for Nintendo.

The analyst says that if the upcoming first-party Wii U titles that Nintendo is betting on (such as Mario Kart 8 and Super Mario 3D World) do not cause a notable acceleration of Wii U hardware sales, "we think Nintendo will face increasingly acute pressure to back away from the hardware business and become a pure IP company."


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Comments


Merc Hoffner
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Being quite serious, if analysts feel optimistic then the industry should probably be at panic stations.

Kujel s
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+1 for humor, +2 for accuracy.

Jorge Molinari
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I may be a lone voice here but I put more stock on the financial analystís opinion than on the developers, and certainly more than on video game publications. To them, video games is just one of many industries to invest in. This means that:

1. They are more objective in their estimations.
2. They are better in assessing the most important area of video games: Monetization.

Doug Poston
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I wish I could agree with you but, like Keichel pointed out above, these are roughly the same predictions they made 7 years ago and most of them turned out to be wildly inaccurate.

I wouldn't trust the game publications either (they're 'hype driven') or the developers (they've long since drunk the Kool-Aid).

If you want good insight, watch what the publishers are doing and not what they're saying. They're the ones with the most 'skin in the game'.

Toby Grierson
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Objectivity doesn't help in spots you know nothing about. Multiple times I've made money in the stock market by finding analysts being stupid en masse. This is what they call a "bubble". In any case, monetization methods can't yield unless the product works to begin with and players pick it up.

Mario Kummer
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And the analysts tell Sony to get out of electronics and just sell insurances: http://www.smartplanet.com/blog/bulletin/why-sony-should-quit-the
-electronics-business/20595

and tell Microsoft to get out of Bing and Xbox:
http://www.pcworld.com/article/2040024/microsoft-should-sell-bing
-xbox-divisions-says-analyst.html

I think companies would go no where when the do what analysts say. And they for sure don't think about implications of everything (which can mean long term profit), they just look at some numbers.

George Menhal III
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I'm getting very tired of hearing the old "Nintendo should become a pure IP company" argument.

Pressured or not, this will not happen anytime soon. These analysts don't understand gamers and don't know what they are talking about.

Eric Geer
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I feel like Nintendo has been d00med since somewhere around the announcement of N64. Analysts will continue to be wrong and Nintendo will continue to live on as a hardware and software business.

Jakub Majewski
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Although I tend to agree with everyone here that previous analyses have been wildly, wildly inaccurate, I will say one thing in defence of the analysts.

The point of having forecasts is not so much to know what things will be like in five years' time. Rather, the point is to know what things potentially will be like, if current trends continue. Companies then take this information, and based on the forecasts, take action to prevent the forecast from coming true (if it's a negative forecast) or to ensure that everything goes as predicted (if it's a positive one).

In many of the examples listed above, the analysts were doing what they do best: talking out of their asses. But in at least some cases, they may well have been correct, and it was the reactions of the console manufacturers that resulted in the forecasts ultimately proving false.

When it comes to all this optimism, though - it sure feels like they're talking out of their asses again...

Kujel s
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Here's my prediction for this "console" generation: in a couple of years budgets for AAA games will be too damn large for a relatively small market and implode (we may get a few high budget games still but only 1 or 2 a year), sony will go down in this implosion, MS will move off to media streaming (and allowing games on their machines)but not unscarred, Nintendo will continue on as it always has, micro-consoles will become the dominate gaming platform and budgets will remain more reasonable.

We gamers are a minority and always will be, gameplay takes effort and most people (non-gamers or game players) don't want to put out said effort (which is why games are becoming more like movies sadly).

Once this implosion has happened the market will return to a more natual (and sustainable) level. Sure we wont be culturally excepted but why should we care, we love games and that isn't going to change. I've siad this many many times before "fuck the normies, I'm proud to be a nerd/geek"!!!

George Menhal III
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Whatever it takes to get Microsoft out of the industry...

Jonathan Gilmore
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People have been saying that MS would be shortly out of the industry since the launch of the XBOX.

Randy Angle
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I attended E3 2013 on Wednesday. I got there at 10:45, had a meeting at 11:00, took lunch about 12:30 and was done with the entire thing by 2:45... about 3 hours with breaks. It used to take me at least 2 days to see all the halls of games. It was very disappointing.

I'm very happy that PS4 showed well and gamers were enthusiastic about it. The XBox One left the Microsoft booth packed to the gills (it was actually difficult to get around in the booth). I enjoyed seeing the new content in the Nintendo booth for 3DS and Wii U.

Anyone who saw my post on the social networks knows what I thought, "I'm just getting back from E3, new consoles nice, games - Mckayla is not impressed".

It would seem that every publisher has to have a copy of the Activision portfolio. A Wargame Shooter and a Fantasy Adventure... added to that would be a franchise they already own if it is different (Madden, Final Fantasy, Gran Turismo...). Maybe it was is because all the engines are UDK, Crytek or Unity, but all the games looked the same and played the same. It was very difficult to see any unique art direction or innovation in game mechanics. I felt like I had played all these games before. When the PS3 first came out I remember asking a young player next to me at E3 what was different - he was playing Gran Turismo and I was playing Sonic - his answer was "Shinnier"... which was absolutely true. This E3 I think the answer would be - "Is there a difference?". I certainly didn't see any games that wouldn't already work on Xbox 360 or PS3.

I saw posts about CliffyB's "Used Games" and have always had a concern about the business model of console games - how many sales it takes to justify large project budgets and are the team sizes and budgets justifiable when only a few games are hits and the rest languish. I did expect that the new consoles would learn from the changing markets and player buying behaviors and release digital-only consoles this cycle... instead I see budgets and team sizes that will be at least as big as prior consoles, if not dramatically bigger. I can't help but wonder how unhealthy it is to budget games that are unsustainable, based on market trends.

I think there is a lot of excitement about new consoles - but will players still be as enthusiastic at the end of 2014??? I am not so "optimistic" as these analysts. I think as an industry we can do better.


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