 |
 |
|
If you enjoy reading this site, you might also want to check out these Think Services sites:
 Game Career Guide (for student game developers.)
 Indie Games (for independent game players/developers.)
 Finger Gaming (news, reviews, and analysis on iPhone and iPod Touch games.)
 GamerBytes (for the latest console digital download news.)
 Worlds In Motion (discussing the business of online worlds.)
 Game Set Watch (the Group's alt.game weblog.) |
|
|
|
| |
Analyst: Core Games Best Investment For Publishers As Wii 'Bubble' Deflates
by Leigh Alexander
|
|
| |
|
November 24, 2009
|
| |
Despite broadening audiences and casual platforms, core games remain the best investment for video game publishers, says Cowen Group analyst Doug Creutz -- who says "the Wii bubble could be deflating."
Revealing the results of a broad fall-holiday survey, Creutz says Wii owners are buying fewer games now than they did a year ago -- while Xbox 360 and PlayStation 3 plan to buy more.
This is partially a function of the economic climate -- core gamers are the group least likely to trim entertainment spending when budgets get tight. Consumers who own only a Wii, however, are least-likely among all current-generation platforms to increase their software purchases this holiday, he says.
Over half of Wii owners also own an Xbox 360 or a PlayStation 3, Creutz says -- but of those who own more than one console, only 23 percent consider Wii their main platform, which means bigger holiday wish lists among core gamers are more likely to benefit core market games rather than Wii titles.
"While core gamers who own a Wii own more Wii games on average than casual gamer Wii-owners, the average title ownership spread between the two categories of gamers is much lower than it is for owners of Xbox 360 and PS3 consoles," says the analyst.
Creutz concludes that core gamers who own multiple consoles are primarily buying Wiis to play Nintendo titles, and not games by other publishers.
"We believe that the optics of this hardware cycle have been significantly distorted by the explosive growth of the Wii console," says Creutz.
The Impact On Publishers
Wii was the primary driver of industry growth in 2007 and 2008, and remains the top-selling console in America. But according to the analyst, "its success did not correlate with strong performances by the U.S. software publishers as a group."
And with Wii hardware and software sales declining, investors have become much more cautious about the games business -- meaning further negative impact for U.S. publishers.
"While we believe the Wii is likely to be a drag on overall software sales through the holiday, the impact should be limited to those publishers which have invested significantly in Wii development, with the biggest negative impact likely to be felt by Electronic Arts, which (unwisely in our view) heavily invested in Wii development for [calendar 2009]," says Creutz.
Sony's PS3 Strategy To Bear Fruit At Last?
On the other hand, Creutz says, the PlayStation 3 looks poised for a strong holiday -- 21 percent of survey respondents who don't currently own one plan to buy one this season.
That's slightly below the Wii's 26 percent intent figure, but nearly double the Xbox 360's 12 percent purchase intent, according to Cowen's survey. And Sony's long-held faith in brand loyalty may finally bear fruit: the data also shows that 32 percent of PlayStation 2 owners who haven't yet bought a current generation plan to buy a PS3, versus 19 percent for the Wii and just 9 percent for the Xbox 360.
The uptick in intent is largely credited to the new $299 price point, says Creutz -- and the Blu-ray player may finally be helping the console too, as consumers showed a willingness to pay slightly higher prices for a console with one versus without.
"With the frontline Xbox 360 console (the Elite) also retailing for $299, we believe Sony now has, for the first time, a significant price advantage at retail, particularly in the minds of serious gamers who are more likely to be considering the PS3 vs. the Xbox 360 Elite rather than the $199 Xbox 360 Arcade version," the analyst concludes.
|
| |
|
|
Are there similar packages in the US?
"Revealing the results of a broad fall-holiday survey, Creutz says Wii owners are buying fewer games now than they did a year ago -- while Xbox 360 and PlayStation 3 plan to buy more."
Did anybody has the original Text of the survey? It seems a little odd, maybe only in the wording, but to me it sounds like Wii owners ARE BUYING fewer games vs. XBox 360 and PS3 owners ARE PLANNING TO BUY more games.
I don't understand how this type of stuff even gets reported.
He says that Wii software will be a drag throughout the holiday season, yet Matt Matthews's analysis showed that Wii software, despite slowing from last year, is still above 360 and PS3 software sales.
All of this is based on a survey of what people PLAN to buy, not what they actually bought. With that said, this really isn't worth reading.
Creutz is specious and redundant. He's implying that third-party software won't perform well this holiday season. Well, that's both a likely and unoriginal prediction.
" Analyst: Core Games Best Investment For Publishers As Wii 'Bubble' Deflates
by Leigh Alexander
5 comments
Share RSS
November 24, 2009
Analyst: Core Games Best Investment For Publishers As Wii 'Bubble' Deflates
Advertisement
AD GD Research
Despite broadening audiences and casual platforms, core games remain the best investment for video game publishers, says Cowen Group analyst Doug Creutz -- who says "the Wii bubble could be deflating."
Revealing the results of a broad fall-holiday survey, Creutz says Wii owners are buying fewer games now than they did a year ago -- while Xbox 360 and PlayStation 3 plan to buy more.
This is partially a function of the economic climate -- core gamers are the group least likely to trim entertainment spending when budgets get tight. Consumers who own only a Wii, however, are least-likely among all current-generation platforms to increase their software purchases this holiday, he says.
Over half of Wii owners also own an Xbox 360 or a PlayStation 3, Creutz says -- but of those who own more than one console, only 23 percent consider Wii their main platform, which means bigger holiday wish lists among core gamers are more likely to benefit core market games rather than Wii titles.
"While core gamers who own a Wii own more Wii games on average than casual gamer Wii-owners, the average title ownership spread between the two categories of gamers is much lower than it is for owners of Xbox 360 and PS3 consoles," says the analyst.
Creutz concludes that core gamers who own multiple consoles are primarily buying Wiis to play Nintendo titles, and not games by other publishers.
"'We believe that the optics of this hardware cycle have been significantly distorted by the explosive growth of the Wii console,' says Creutz."
Translation: analysts continue to ignore disruption and refuse to investigate it, thus they continue to have trouble accurately predicting the future.
@Derek - All of those are 1st party titles... the analysis was that 3rd parties are the ones having their bubble burst.
But then also says, "Translation: analysts continue to ignore disruption and refuse to investigate it, thus they continue to have trouble accurately predicting the future."
In one sentence you claim his prediction is likely and then in another you claim he has troubles accurately predicting the future.
Which is it?
The article states:
"And Sony's long-held faith in brand loyalty may finally bear fruit: the data also shows that 32 percent of PlayStation 2 owners who haven't yet bought a current generation plan to buy a PS3, versus 19 percent for the Wii and just 9 percent for the Xbox 360."
I know I've made this known for a while here in the comments section, but it was entirely based on my personal experiences. Nice to see some numbers back it up.
The PS3 definitely does have a large price advantage at this point. As Christian mentions the 360 is being offered with some pack in games but the value of those games differ drastically among consumers. Although I think MS has been too conservative in it's 360 price drops ever since launch, and by doing this they have sacrificed their marketshare (and to some extent, the appeal of their console)...I cannot deny that they have retained profitability and in comparison to Sony are sitting in a better position financially.
No more shovelware. No more ports. Instead, create something new that actually appeals to the audience that is on the Wii using quality developers and better marketing.
Nintendo is still proving with their own software that the "bubble" is, in fact, actually a bowling ball.
Personally the only 2 games i own (for the wii) are zelda and wii sports resort, aside from that i have not found too many games on the wii that have been worth more then a rent. I'm not saying thier arent good games on the wii because there are some, but when its all said and done most of them are either too casual/easy or lack online and thus i would never purchase them.
Furthermore, i think when the 360's and ps3's motion controls are released, nintendo will loose alot of its "serious" gamers who own both a wii and 360 or ps3. Although nintendo has such a large handle on the casual market i dont think they will mind.
Nintendos not doomed, thier just going to loose thier number 1 spot. It's just a matter of time really.
I think you need to do that math over again. Because it's pretty much impossible for Nintendo to be overtaken by either Sony or Microsoft. Looking at the numbers, I think it's pretty delusional to even entertain the thought really.
If the Wii stopped selling today, it'd still take many, many years for either of the two competitors to catch up. The PS3 hasn't even sold half of what the Wii has sold worldwide and the Wii - slow down and all - will eventually have double the installed base of the 360 in maybe over a year's time.
It's not happenin' dude.
But then also says, "Translation: analysts continue to ignore disruption and refuse to investigate it, thus they continue to have trouble accurately predicting the future."
In one sentence you claim his prediction is likely and then in another you claim he has troubles accurately predicting the future.
Which is it?"
Allow me to clear this up since you didn't read my statements correctly. I first stated third-party sales wouldn't be that great this holiday season. Big deal. Real shocker there.
I next stated that analysts still can't seem to make any accurate predictions about DISRUPTION. Disruption does not mean third-party games. When Creutz says that, in general, the "Wii bubble" is going to deflate, burst, or whatever, he's making a bad prediction about the SYSTEM because he doesn't understand disruption.
When he says third-party games won't sell well, it's a different issue. And when Creutz says "We believe that the optics of this hardware cycle have been significantly distorted by the explosive growth of the Wii console," he's admitting that Nintendo's business strategy is confusing analysts because it has turned the industry upside down. These are not my words, these are Creutz's words.
Or to put it another way, Wii games, insofar as they are multi-sided games, have much higher replay value than solitaire interactive puzzles.
I have all three. The Wii NEVER gets used because it's always so disappointing to look at.
And yes casual players do notice and care about this... my friends have proven this to me. Two were Wii owners have now turned to PS3.
Maybe they should retail the Wii games for A LOT less than the 360/PS3 versions? You are getting a lot less for your money after all.
It seems most consumers don't think the way you and your friends do, the Wii still sells better then the PS3 or the XBox360. I use the Wii with my 42 inch LCD TV Set and I'm pretty satisfied with the graphics. In my opinion, a higher resolution and textures in higher resolutions don't make graphics automatically better.
For me games like Okami on the PS2, Zelda the Windwaker on the GC or Jet Set Radio Future on the DC still look better then most of the current games for the PS3 or the XBox360, cause they got an own visual style. Games like Resident Evil 5, Gears of War or GTA IV totally lack of any visual style.
They try to copy the reality with their graphics, but the problem is, the closer you get to reality in graphics, the more the parts that still aren't realistic enough begin to stand out. That's why so many games today have this "plastic" look, in "Arkham Asylum" I always have the feeling to control a Action Figure instead of a human being.
By the way, take a look at Super Mario Bros. Wii on a real big TV Set, it looks fantastic.
Fact of the matter is, @Jay: we don't need to wait for November NPD figures to see this trend, as it's been very clear in the full NPD reports for the last few months (not the "summarized" ones) that the Wii is in freefall. and no, the sales are not rising. At all. Certainly not for 3rd parties. And it's not because they don't make good games.
So please cut the crap. I'm sick and tired of hearing "
3rd party publishers need to figure out how to create the right games for the Wii." (@John). That statement is 2 years late.
3rd parties have tried everything, none of it was all that worth it. At least not compared to returns on similar investments on 360 and PS3. Heck, even IWATA himself admitted that Nintendo has not successfully "upsold" enough Wii buyers.
If you're making more from your dollar on 360 and PS3 as a 3rd party, _why would you keep going on the Wii ?_ To make Nintendo happy ? To prove a point that potentially doesn't even exist? That's the only question worth asking.
An excenllent analysis here on Gamasutra showed a few weeks before that the Wii Software sales are slowing down, but that they are miles away from being in freefall.
http://www.gamasutra.com/view/news/25740/Analysis_Wii_Software_Sales_Slow_Down_I
n_2009.php
Now this is all speculation, but i'm pretty sure, microsoft will get the same kind of response with natal that the wii got (Huge sales numbers). Furthermore, when sony competes with thier motion controller, it will put nintendo and sony on an even playing field (atleast in the eyes of the consumer). Sure the playstation may be behind now, but when you have two console that do similar things it then becomes a competition of games and features.
So that leaves us at my previous statement of its only a matter of time :P, it might take a year or two, but the chance of natal pushing microsoft into the number 1 position is defintly a possibly.
However, leaving all doom and gloom aside, i wonder what nintendos future plans are. It will be interesting to see how nintendo combats the current situation.
Natal tracks the whole body of the player, so the games will, in my opinion, expect the player to move the whole body to play these games. This seems limited in gameplay terms to me. I can't imagine playing a game, where I have to use my legs to walk or swing a stick around in my living room if I am playing a sword fighting game.
Besides this, nobody knows what price Natal will have, when it is released. This thing has an extra CPU and a very good stereoscopic camera.
But the main disadvantage in my eyes is, that it is focused to a single player experience. The same goes for PS3's Wand. You can play both devices only, if all players are in the focus of the camera (Natal camera on XBox360 and EyeToy camera on PS3). But if I look at every household I know, that owns a Wii, the players gathered together in one room, couldn't be tracked by one camera at a time.
The PS3 and XBox360 systems force the players to sit side by side, this is a great disadvantage.
And the last thing is, when Natal and the Wand are released, Nintendo will have sold around 60-70 million consoles with a motion control and Sony and Microsoft at this time will have sold 0 consoles with a motion control. I can't see, hnow they want to catch up with a lead like this.
_
My bet is that MS is well aware of the limitations of Natal and are as we speak working around its problems. I predict that the next time they show Natal it's going to be some sort of a Wii/Natal hybrid. Simply because they realized that if they are trying to compete with the Wii (for what other reason did they make Natal if not for that reason?), they at least have to offer a similar experience (i.e. playing with several friends at once and without having to have a football field-size living room to move around, as Natal as seen at E3 requires).
-
Regarding the whole 2012-like predictions related to the Wii... well, every year is the same old song. Before the Wii was released in 2006 (since early that year) you had analysts saying that the Wii would bomb and die out faster than the Dreamcast. 2007, 2008 and now 2009 we see the same thing. Yet the dang thing keeps selling better than the competition. Even if it slows down compared to when it was the "new thing" to get. Obviously, over the years, sales would slow down eventually. But the thing is, again, it still keeps outselling the PS3 and Xbox360 overall. So to dismiss it's present level of success based on the premise that HD gamers are "planning" to buy more games than Wii owners (does anybody really know what THEY "plan" to buy this year?), its some of the same nonsense we come to expect from these analysts.
-
Like Siciliano said, analysts just don't get what the Wii is about. Year after year they always fail to predict it's future. They should just stick to what they know.
-
"If you're making more from your dollar on 360 and PS3 as a 3rd party, _why would you keep going on the Wii ?_ To make Nintendo happy ? To prove a point that potentially doesn't even exist? That's the only question worth asking."
-
^^^ Yeah dewd, like every company that made games for the PS3 and 360 has made back their investment. Suuure they did. No company and dev ever went bankrupt making games for those systems (pffft! yeah I'm being sarcastic). As far as I know, no company has gone bankrupt because they made 1 Wii game (unlike what happened to several devs making 1 PS3 or 360 game *cough*Factor 5*cough*)Ascaron Entertainment*COUGH!!) .
-
Anywhoo, read this: "Games for the next-generation console (PS3-Xbox360) cost an average of $8.6 million to create, according to Takasu (Namco), and need to sell 500,000 units before the developer can turn a profit".
-
So if you go to vgchartz, you can see the long list of Next gen games that never reached that 500,000 sales mark and thus, were a big fail for the companies that spent millions creating and promoting them.
-
Now, I'm not saying that third party devs don't make a profit on those machines. I'm just saying that they actually take a bigger risk on them than on the Wii. On the Wii they at least have a chance of making back development costs. Yet on the other consoles, they risk going bankrupt. Grasshopper (makers of No More Heroes made that point when they discussed making a PS3 game- they feared going bankrupt as a result of making such game).
-
BTW this article came out today:
http://www.pressdispensary.co.uk/releases/c992486/Xbox-360-Beating-Playstation-b
y-3:1-but-Nintendo-Wii-Beats-them-Both.php
:)
If you break it down into Nintendo vs 3rd parties, it's extremely clear that there is no more space for the latter. But that isn't in the summarized or public analyses, like I said. It really looks like Nintendo is headed to be alone in their corner again, like they ended up with the GC, like they ended up with the N64.
And I say that with the utmost respect to them, mind you.
"^^^ Yeah dewd, like every company that made games for the PS3 and 360 has made back their investment. Suuure they did. No company and dev ever went bankrupt making games for those systems (pffft! yeah I'm being sarcastic). As far as I know, no company has gone bankrupt because they made 1 Wii game (unlike what happened to several devs making 1 PS3 or 360 game *cough*Factor 5*cough*)Ascaron Entertainment*COUGH!!) ."
So what ? Up to them to know how high they can punch and have a proper risk analysis before they jump into a project. If you're bankrupt after making 1 NG game, I'm sorry, but that says a lot about how you basically completely went over that step, which is absolutely crucial. So that argument is virtually worthless.
Yes, the risks are higher on PS3 and Xbox 360, but the chances for return are higher too. Whereas on Wii, you don't spend much, but you're almost guaranteed to lose that money anyways, so which one do you prefer? A guaranteed loss, or a chance of a loss ?
As for your link, okay, what are you trying to prove there? We're not talking about hardware installed base, because it's already been clearly proven that there's no correlation (remember i said IWATA HIMSELF said Nintendo didn't manage to upsell their own Wii owners).
Why is the argument, that studios went bankrupt after one PS3 title worthless? It's a non deniable fact in developement and means, that games on this specific hardware are much more expensive in developement then games on other platforms.
I would agree with you, if these cases were only isolated cases, but from what publishers and developers say, the production of a game for the 360 or PS3 is much more expensive then for the previous generation. Add to this the smaller installed user base of these consoles and the inflation (the prices didn't catch up to that, they are stable since the PS1) and you get the dilemma, companies and studios are in right now.
It is complete nonsense, that developing a game for the Wii is a guaranteed loss. Companies like Ubisoft publish a lot of games for the Wii and they are not losing money. Ea Sports Active for the Wii sold much better, then many other EA titles for the PS3 and the 360. It's a myth, that you can't sell 3rd party game on the Wii. On the N64 and the GC the situation was completly different. Those systems hadn't the biggest market share, the Wii has.
3rd parties still do not take Wii's audience seriously. On-rails shooters are not what people want. They want fresh, new and high-quality experiences. And Nintendo delivers it.
Also, Mario games sell better than other titles because 1) it has a strong brand behind it; 2) it has universal appeal; 3) undoubtedly high-quality (some people may not like it, but it has high quality). This results in extremely successful sales numbers for them.
EA Sports Active... a Wii Fit alternative. THAT'S what sold. Is that really a good measure? Does that show a healthy (no pun intended) market? Are we all gonna come out with our own Wii Sports and Wii Fits because that's all that sells?
$5 million spent on marketing a great 360/PS3 game is almost certainly a better ROI than $5 million spent on developing a Wii game at this point. So I have this $5 million here. I'm trying to maximize it in a recession. What do you think I'm gonna do?
I dare you guys to check any big publisher to see what they're doing with the Wii for the next year. Expect a -sharp- drop of 3rd party support. Then come back after a few months and we'll talk some more.
I'm telling you to go fetch the Metroid Prime and Punch Out sales because I'm trying to prove the point that even Nintendo's own quality games don't sell all that well on the system.
It is working out better on 360 and PS3 for 3rd parties. So accept the reality. If Nintendo is successful alone in their corner on the Wii (like they were on GC, and N64, I repeat, so that'll be 3 generations of Nintendo more or less going at it alone, while 3rd parties are perfectly successful on other platforms, and you certainly can't blame "3rd parties not having taken advantage of innovation" on the GC), let them be, and good for them. 3rd parties will be over on the 360 and PS3, with hits like MW2 or AC2. (anybody wants to argue there's no quality there?)
Anyways, I'm done here. I'm looking at current numbers, I'm looking at current analyses from this guy and a whole lot of others, including Iwata and my own, and it's all pointing in the same direction. If you wanna just rehash the same "blame the 3rd parties for not making an effort" argument we had 2 years ago, I'll leave you to it. If you wanna try and come out with a good Wii game next year to prove us all wrong, then by all means, be my guest.