Take-Two and Rockstar San Diego had a hit on their hands with Red Dead Redemption during the month of May in the U.S., but other high-profile titles aren't expected to have performed as well as anticipated, according to one analyst.
Ahead of monthly U.S. video game retail sales results, Michael Pachter with Wedbush said Monday that the "May lineup was indeed stacked in favor of dramatic growth," but he believes that year-on-year growth was stunted.
May saw the release of high-profile titles like Red Dead Redemption, Super Mario Galaxy 2, Alan Wake, Prince of Persia, Lost Planet 2, Blur, SKATE 3, Iron Man 2, LEGO Harry Potter, UFC, and Shrek 4, but Pachter said "several of these titles performed well below expectations."
In June, publisher Take-Two said that Red Dead Redemption shipped 5 million units since its May 18 release -- Pachter categorizes that as a "breakout hit."
But he added, "Alan Wake was launched the same day [as Red Dead Redemption] (and suffered as a result), the Prince of Persia film did not provide the expected boost for the video game, Blur had a very weak launch, and Super Mario Galaxy 2 sold at only a mediocre level (for a Nintendo title)."
He added, "Therefore, we have tempered our expectations for the month to up 11 percent, from our prior view of up 15-30 percent." Pachter expects U.S. video game retail to have generated sales of $500 million in May, up from $450 million for the same month a year prior.
April 2010 sales were a disappointing 22 percent below April 2009. Pachter said that investors were "spooked" by the April results, and that they hold a continuing belief that video game sales are in a state of "persistent secular decline."
The analyst said, "We think it is inevitable that there will be a shift in delivery of video games away from packaged products and toward digital downloads, but we don’t expect the shift to manifest itself in a material way in 2010."
Part of the reason for the continuing weak sales, he said, was because publishers are implementing deep online multiplayer elements within their games. A player can play Call of Duty: Modern Warfare 2 for dozens of hours, and have no desire to go out and spend money on a new game.
Pachter said publishers like Activision are poised to remedy the lagging revenues by monetizing online play. "We anticipate that Activision will find a way to monetize the 1.75 billion hours of Call of Duty: Modern Warfare 2 online play on the Xbox 360 in the first five months following the game’s release," he said.
"In the future, we think that Activision will find a way to charge for some portion of online game play, and if successful, we think that other publishers will follow suit," Pachter said. "With the early June launch of the second Call of Duty: Modern Warfare 2 map pack, we think that online game play will continue to be a drain on gamers’ time and wallets, and think that sales could again slide into negative territory."
This must seem like a nightmare for publishers and developers that deliver quality games with strong marketing companies for their titles only to see them flounder at retail. They follow the script to for retail success...and fail.
I wonder how many of these premier titles will even recoup their development/marketing costs.
I have to think this is part of continuing trend of the hardcore gamer having less funding for games and reducing purchases for new titles. The fix for this funding crisis condition is out of the hands of publishers.
I am not happy about the idea of a subscription fee to play shooters online....I already think they are charging too much for map packs. I can see how, initially, maps will be free. However once everyone gets used to the idea of paying to play, the map packs will be add ons again. I'm hoping that when the time comes (I don't think it's an IF at this point) they can offer some true value for the increased investment.
when will people just admit that packaged goods console sales at retail is dying. it peaked in 2008 and its been declining since then. the console cycle has entered the down leg. just face the reality. this shouldn't be such a surprise.
I prefer to think of it (packaged goods at retail) being replaced by online retailers. Amazon especially makes a compelling alternative to brick and mortar. Digital downloads still require a fast, reliable broadband pipeline that is still lacking. Then you have to contend with storage requirements...especially for consoles.
Like Dave Smith said, $60 is TO MUCH MONEY. That is the bottom line. If games were $30 bucks lots more people would jump on board. Even $40 would be a sweeter price point. personally, I think the $60 price point is killing the sales of many many games.
Going to ignore the comment about RDR's success due only to marketing and move on to more intelligent arguments being made here...
Pricing is not the problem. Development costs are the problem. Selling a game for $60 is fine. We'd all (players) love games to cost $30. But it makes no sense to drop the prices that dramatically on a AAA title. In a month, 5 million people thought it was appropriate to pay $60 for Red Dead Redemption. You drop the price to $30, you'd have to double that to 10 million copies sold in a month just to make the same amount, let alone make anything significantly higher in revenue. Also bear in mind the increased overhead costs associated with those 5 million more copies having to be manufactured and shipped. You just don't make that money back on a AAA title.
That being said, development costs are just getting out of hand. EA is bleeding money despite having some of the most successful IPs in history under its bannerhead, while CCP has been turning profits for years running EVE Online, and their profits are actually higher than ever, despite their only game having been released 7 years ago. Anybody who doesn't see the connection is just not looking hard enough at what's going on.
It sure was marketed heavily, this doesn't mean it's a bad game. Can't you consider it's selling well because of marketing *and* quality? What's so wrong about RDR, did you even play it?
I think the problem with many of today's games is not quality, but value. Far too many games only give you 5-6 hours of gameplay for your $60
These are exactly the games that go right back to Gamestop and get sold for $55 in the first couple weeks after release.
On the other hand, something like RDR gives you a lot more than 5 hours of gameplay. So people buy it. And they keep it.
Far too many games place the whole emphasis on online, which is only played by a fraction of the audience, and most of the people who do play online, only play a few games (COD most notably).
First, in my opinion RDR is a fantastic game. Probably the best game ever produced by Rockstar (way better than GTA, even Vice City). When you can make just riding around the wilderness on your horse fun you've got a winner.
Second, new release AAA games will never again be $30, so get over that now. Dev costs are too high, gamer expectations are too high, and demand will NOT increase by 60% if they slash the price in half, period. Also, we're headed for some serious inflation soon, so expect games (at least in the US) to actually climb in price or maintain $60 while transitioning to lower cost distribution models like digital download services.
"Red Dead Redemption sold because of Rockstar's reputation coupled with their marketing machine. For what seemed like six months I couldn't go on Gametrailers or IGN without seeing a new Red Dead Redemption trailer up. Their marketing literally made me sick of the game before it even came out. "
That has got to be one of the most idiotic posts I have ever seen on Gamasutra.
If mere "marketing machine" and reputation is enough to make a game sell gangbusters, how come Monster Hunter on the Wii, House of the Dead Overkill, The Conduit etc all had pretty tepid sales on the Wii, despite good reviews and massive marketing for Monster Hunter (from Capocm who have a solid reputation) on the Wii for example?
Try releasing a crap game, and then spend milions on marketing that game, and see where that gets ya. If a game is not a great game (Red Dead Redemeption IS a great game), no amount of marketing is going to sell that game.
Look, I know you'd much rather shill than acknolwledge a great game on the HD consoles, but at least be honest enough to admit your obvious bias.
“Red Dead Redemption sold well only because it was Rockstar and they jammed it down peoples' throats; the majority of people who bought it got bored with it after a few hours.”
Do you have some statistics or evidence to back up this claim? Several million people now own RDR so I’m curious how you came to that conclusion, where you got your data, and how you determined that whatever cross section of consumers you used to make this aggregation was varied enough to be transposed into the larger mass that has played and purchased the game.
Bear in mind RDR holds a 95 on Metacritic, suggesting the game may not be as vapid and devoid of entertainment as you are claiming.
Actually I am going to stick my head up above the parapet at the risk of getting it shot off and say I actually think it is not unreasonable to double sales if you halve the price. For a start it would wipe out the used game market. And it would attract those who struggle to pay $60, those who think what the hell it's only $30 bucks. The problem is the marketing teams are telling the developer that if they charge less they are devaluing the franchise long term. So $60 wins. Of course that's horsesh!t because they discount those games PC equivalents so severely in those "DAM YOU STEAM" sales.
Hey Gus, I don't think anyone here will bite your head off, it's a professional site and all.... right guys?
I see two potential problems with the $30 price point right off the bat:
A) What if the cost per unit is over $30? Throwing in manufacturing fees, shipping, disc licensing fees, console royalties, etc you might not profit per unit at $30. If you can, then would double the sales actually produce more profit at that small of a margin? You're a numbers guy so I think you'll get where I'm coming from. The potential profit has to increase or at least break even before you launch at a lower price point.
B) What if there aren't twice as many people who want the game, regardless of the price point? Here's where we really start to get into sticky territory. If you do believe your sales trajectory for launching at $30 would double sales, and your cost structure allows for profit at that price point, enough that double sales at $30 would increase profit over the $60 launch price... well, are there double the amount of people out there who even want your game, regardless of the price?
I'm a gamer, I buy games, I would love for them to be cheaper. However, I want the same experiences at the lower price point. Is that feasible at launch? I'm just not sure.
That's an interesting point about the marketing, and could be true, at least when first attempting a low price launch. It is normal for higher quality goods to cost more in the marketplace. Therefore the initial reaction from an uniformed buyer is that the low cost game is not as good as the higher cost game. Perhaps the video game audience is more informed than your average consumer and wouldn't be effected by the relative price/relative quality trap. I think with the way info spreads on the interenet, though, launching a high quality game at a lower price point wouldn't hurt you for long in that regard, word of mouth would be all over the place pretty quickly about the "bargain".
Why exactly would $30 games wipe out the used market? Gamestop would just drop their used game price to $25, and they'd still run all of their used game sales (buy 2, get 1 free and such that are frequently done). People who are bored of their game will still trade it in. People who want to save money by buying used will still do so.
As for doubling the sales at half the price, keep in mind, one of the major things that keeps people from buying a game is time, rather than money. Games could drop to $10, and I wouldn't buy all that many more than I already do because I simply don't have the time to play them. I'm admittedly on the extreme end here, but I frequently see and hear comments from people that they're struggling to find the time to play all the games that they already own. These people aren't going to start buying twice as many games.
See this is why I said it would be best to ignore the comments of Adam Coate here. But now that he's stopped his hit and run tactics against the game, I guess we have to address his points.
"GTA4 was less fun than San Andreas(which even CliffyB acknowledged)"
Okay, so because you and Cliffy B. say it's so, then it must be so? You can do better than that I think. You actually have an argument to be made here, but you're relying on lazy thinking to make it for you.
"You can't compare anybody's reputation to Rockstar's other than Blizzard."
So if Rockstar's reputation and marketing sledgehammer can automatically result in financial success, why then did Red Dead Revolver (the predecessor to Red Dead Redemption) fail so miserably? RDRevolver was released when Rockstar was even MORE popular than it is now, and for the time it had a lot of press. The chief difference between RDRevolver and RDRedemption? About 21 points on Metacritic.com. The game was average at best, abysmal at its worst. So to shut your ears and say that Redemption was only successful due to marketing and brand recognition is to just ignore the facts.
So, what's wrong with me, Adam? I'm having a blast playing RDR... am I shallow or something? Is that why I find the game varied and interesting and fun?
Additionally, I liked GTA4 less than Andreas which I liked much less than Vice City... and I like RDR more than Vice City. How does that compute on the linear downward slide from Andreas to GTA4 to RDR that you have solidified?
Can't we just say that YOU didn't like RDR, but millions of other people did? Is that so hard?
You keep writing these statements as if they are definitive and cannot be debated. I personally much preferred GTAIV to San Andreas precisely because of the more realistic mechanics coupled with a more focused and polished game play experience. The key components of the franchise were polished significantly in GTAIV and then further expounded upon with the Lost and the Damned and Gay Tony expansions. You seem to equate a lack of realism with fun but I and many others make no such distinctions. GTAIV is hardly an ultra-realistic simulator of criminal activity but like RDR balances realism with certain gaming conventions to achieve an enjoyable balance.
As to RDR being “shallow”, I again ask you to back up your arguments with evidence because I found the game to be anything but. At heart RDR is an open world third person shooter and those elements are incredibly well polished, as you’ve admitted. The game also offers plenty of variety, mission types and even the ability to generate income through hunting, trading, and bounties. The moral decisions are varied and offer plenty of latitude, including the ability to hide your face and preserve your reputation even when doing bad things. The game even contains a fully viable ecosystem replete with animals that act realistically to your presence.
If RDR is “shallow” then most games on the market are the liquid equivalent of a pool of spittle.
@gus: I am ashamed to admit but I agree with you. (jk about being ashamed)
@Mark: I think it depends on the title. If it's a game by rockstar or blizzard I don't think 10-20 dollars is going to make the difference but if it's many other AAA titles then yes I think it does make a difference...I was looking at Alan Wake the other day for instance but the premium price just pushed it over the edge of not buying.
Also I'm pretty sure on this (but I could be wrong) that Sega said they started to see a lot more sales for HOTD:Overkill when the price came down. In fact it has ended up selling about twice as much or more at the lower price point than it did at the high price point. Factor in that if it had released at this price and generated a lot of buzz it might have even made more sales. I think this game would be a poster boy for lower price because it's a quick game that's lots of fun and you'd be happy to throw away a small amount of money on it (say 20 to 30US$).
@Joshua: I would argue games should be cheaper and also shorter so you can buy more and play them for less time.
"See this is why I said it would be best to ignore the comments of Adam Coate here. But now that he's stopped his hit and run tactics against the game, I guess we have to address his points."
I never found any of the ancillary activities in RDR unnecessary; as a point of fact, I found them far more compelling than what is contained in most other sandbox games. Hunting in particular was quite a bit of fun due to the variety of wildlife and the ability to generate a healthy income selling pelts and meat, which is a very realistic simulation of the rural economy during the early 20th century.
I’m also curious as to which aspects of the controls you felt were “overcomplicated”; the combat mechanics were typical third person controls with a solid cover system and an auto lock ability that can be toggled on or off. The horse riding mechanics, once fully grasped, offered the most realistic and satisfying simulation of horse mounted gameplay I’ve experienced, including other titles like Shadow of the Colossus and Assassin’s Creed II. Cycling through weapons was a breeze and the rope mechanic, which could have been a logistical nightmare, was actually one of the most satisfying combat options in the game. Also, Euphoria was implemented beautifully, allowing you to target and wound practically any part of the enemy, allowing for lethal and non-lethal resolutions. Dead eye was a clever spin on the typical bullet time mode and can be used either to target or to slow down and gain tactical advantage while the dueling mechanic offers both variety and precision aiming. I’m just not seeing the viability in your arguments here.
As to the weapons not having any real differences between them, that is flatly incorrect. Even within weapon classes the difference between the pistol and the revolver is profound and the rifles and shotguns all operate in a reasonable facsimile to their real-world counterparts, with combat effectiveness based on range, ammunition capacity and reload speed. I also take issue with the notion that Marston has “way too much health” because in truth, while his health regenerates, he can’t actually take very many shots at even a distance before crumpling up and at close range Marston can be felled by a couple of blasts. Rushing into most scenarios in the game can actually get you killed expeditiously so honestly, I’m not entirely convinced your criticisms are based on any significant time spent with RDR.
Adam, by referring to "hunting, trading, bounties, [and] moral decisions" as "unnecessary tack-ons", you've basically told us that you have a specific perspective on what "fun" is in a game, and that this game doesn't cater to what you want out of it. That's called an "opinion". It is not to be confused with a "fact".
I wonder how many of these premier titles will even recoup their development/marketing costs.
I have to think this is part of continuing trend of the hardcore gamer having less funding for games and reducing purchases for new titles. The fix for this funding crisis condition is out of the hands of publishers.
Pricing is not the problem. Development costs are the problem. Selling a game for $60 is fine. We'd all (players) love games to cost $30. But it makes no sense to drop the prices that dramatically on a AAA title. In a month, 5 million people thought it was appropriate to pay $60 for Red Dead Redemption. You drop the price to $30, you'd have to double that to 10 million copies sold in a month just to make the same amount, let alone make anything significantly higher in revenue. Also bear in mind the increased overhead costs associated with those 5 million more copies having to be manufactured and shipped. You just don't make that money back on a AAA title.
That being said, development costs are just getting out of hand. EA is bleeding money despite having some of the most successful IPs in history under its bannerhead, while CCP has been turning profits for years running EVE Online, and their profits are actually higher than ever, despite their only game having been released 7 years ago. Anybody who doesn't see the connection is just not looking hard enough at what's going on.
These are exactly the games that go right back to Gamestop and get sold for $55 in the first couple weeks after release.
On the other hand, something like RDR gives you a lot more than 5 hours of gameplay. So people buy it. And they keep it.
Far too many games place the whole emphasis on online, which is only played by a fraction of the audience, and most of the people who do play online, only play a few games (COD most notably).
Second, new release AAA games will never again be $30, so get over that now. Dev costs are too high, gamer expectations are too high, and demand will NOT increase by 60% if they slash the price in half, period. Also, we're headed for some serious inflation soon, so expect games (at least in the US) to actually climb in price or maintain $60 while transitioning to lower cost distribution models like digital download services.
"Red Dead Redemption sold because of Rockstar's reputation coupled with their marketing machine. For what seemed like six months I couldn't go on Gametrailers or IGN without seeing a new Red Dead Redemption trailer up. Their marketing literally made me sick of the game before it even came out. "
That has got to be one of the most idiotic posts I have ever seen on Gamasutra.
If mere "marketing machine" and reputation is enough to make a game sell gangbusters, how come Monster Hunter on the Wii, House of the Dead Overkill, The Conduit etc all had pretty tepid sales on the Wii, despite good reviews and massive marketing for Monster Hunter (from Capocm who have a solid reputation) on the Wii for example?
Try releasing a crap game, and then spend milions on marketing that game, and see where that gets ya. If a game is not a great game (Red Dead Redemeption IS a great game), no amount of marketing is going to sell that game.
Look, I know you'd much rather shill than acknolwledge a great game on the HD consoles, but at least be honest enough to admit your obvious bias.
“Red Dead Redemption sold well only because it was Rockstar and they jammed it down peoples' throats; the majority of people who bought it got bored with it after a few hours.”
Do you have some statistics or evidence to back up this claim? Several million people now own RDR so I’m curious how you came to that conclusion, where you got your data, and how you determined that whatever cross section of consumers you used to make this aggregation was varied enough to be transposed into the larger mass that has played and purchased the game.
Bear in mind RDR holds a 95 on Metacritic, suggesting the game may not be as vapid and devoid of entertainment as you are claiming.
I see two potential problems with the $30 price point right off the bat:
A) What if the cost per unit is over $30? Throwing in manufacturing fees, shipping, disc licensing fees, console royalties, etc you might not profit per unit at $30. If you can, then would double the sales actually produce more profit at that small of a margin? You're a numbers guy so I think you'll get where I'm coming from. The potential profit has to increase or at least break even before you launch at a lower price point.
B) What if there aren't twice as many people who want the game, regardless of the price point? Here's where we really start to get into sticky territory. If you do believe your sales trajectory for launching at $30 would double sales, and your cost structure allows for profit at that price point, enough that double sales at $30 would increase profit over the $60 launch price... well, are there double the amount of people out there who even want your game, regardless of the price?
I'm a gamer, I buy games, I would love for them to be cheaper. However, I want the same experiences at the lower price point. Is that feasible at launch? I'm just not sure.
That's an interesting point about the marketing, and could be true, at least when first attempting a low price launch. It is normal for higher quality goods to cost more in the marketplace. Therefore the initial reaction from an uniformed buyer is that the low cost game is not as good as the higher cost game. Perhaps the video game audience is more informed than your average consumer and wouldn't be effected by the relative price/relative quality trap. I think with the way info spreads on the interenet, though, launching a high quality game at a lower price point wouldn't hurt you for long in that regard, word of mouth would be all over the place pretty quickly about the "bargain".
As for doubling the sales at half the price, keep in mind, one of the major things that keeps people from buying a game is time, rather than money. Games could drop to $10, and I wouldn't buy all that many more than I already do because I simply don't have the time to play them. I'm admittedly on the extreme end here, but I frequently see and hear comments from people that they're struggling to find the time to play all the games that they already own. These people aren't going to start buying twice as many games.
"GTA4 was less fun than San Andreas(which even CliffyB acknowledged)"
Okay, so because you and Cliffy B. say it's so, then it must be so? You can do better than that I think. You actually have an argument to be made here, but you're relying on lazy thinking to make it for you.
"You can't compare anybody's reputation to Rockstar's other than Blizzard."
So if Rockstar's reputation and marketing sledgehammer can automatically result in financial success, why then did Red Dead Revolver (the predecessor to Red Dead Redemption) fail so miserably? RDRevolver was released when Rockstar was even MORE popular than it is now, and for the time it had a lot of press. The chief difference between RDRevolver and RDRedemption? About 21 points on Metacritic.com. The game was average at best, abysmal at its worst. So to shut your ears and say that Redemption was only successful due to marketing and brand recognition is to just ignore the facts.
Additionally, I liked GTA4 less than Andreas which I liked much less than Vice City... and I like RDR more than Vice City. How does that compute on the linear downward slide from Andreas to GTA4 to RDR that you have solidified?
Can't we just say that YOU didn't like RDR, but millions of other people did? Is that so hard?
You keep writing these statements as if they are definitive and cannot be debated. I personally much preferred GTAIV to San Andreas precisely because of the more realistic mechanics coupled with a more focused and polished game play experience. The key components of the franchise were polished significantly in GTAIV and then further expounded upon with the Lost and the Damned and Gay Tony expansions. You seem to equate a lack of realism with fun but I and many others make no such distinctions. GTAIV is hardly an ultra-realistic simulator of criminal activity but like RDR balances realism with certain gaming conventions to achieve an enjoyable balance.
As to RDR being “shallow”, I again ask you to back up your arguments with evidence because I found the game to be anything but. At heart RDR is an open world third person shooter and those elements are incredibly well polished, as you’ve admitted. The game also offers plenty of variety, mission types and even the ability to generate income through hunting, trading, and bounties. The moral decisions are varied and offer plenty of latitude, including the ability to hide your face and preserve your reputation even when doing bad things. The game even contains a fully viable ecosystem replete with animals that act realistically to your presence.
If RDR is “shallow” then most games on the market are the liquid equivalent of a pool of spittle.
@Mark: I think it depends on the title. If it's a game by rockstar or blizzard I don't think 10-20 dollars is going to make the difference but if it's many other AAA titles then yes I think it does make a difference...I was looking at Alan Wake the other day for instance but the premium price just pushed it over the edge of not buying.
Also I'm pretty sure on this (but I could be wrong) that Sega said they started to see a lot more sales for HOTD:Overkill when the price came down. In fact it has ended up selling about twice as much or more at the lower price point than it did at the high price point. Factor in that if it had released at this price and generated a lot of buzz it might have even made more sales. I think this game would be a poster boy for lower price because it's a quick game that's lots of fun and you'd be happy to throw away a small amount of money on it (say 20 to 30US$).
@Joshua: I would argue games should be cheaper and also shorter so you can buy more and play them for less time.
My bad :)
I never found any of the ancillary activities in RDR unnecessary; as a point of fact, I found them far more compelling than what is contained in most other sandbox games. Hunting in particular was quite a bit of fun due to the variety of wildlife and the ability to generate a healthy income selling pelts and meat, which is a very realistic simulation of the rural economy during the early 20th century.
I’m also curious as to which aspects of the controls you felt were “overcomplicated”; the combat mechanics were typical third person controls with a solid cover system and an auto lock ability that can be toggled on or off. The horse riding mechanics, once fully grasped, offered the most realistic and satisfying simulation of horse mounted gameplay I’ve experienced, including other titles like Shadow of the Colossus and Assassin’s Creed II. Cycling through weapons was a breeze and the rope mechanic, which could have been a logistical nightmare, was actually one of the most satisfying combat options in the game. Also, Euphoria was implemented beautifully, allowing you to target and wound practically any part of the enemy, allowing for lethal and non-lethal resolutions. Dead eye was a clever spin on the typical bullet time mode and can be used either to target or to slow down and gain tactical advantage while the dueling mechanic offers both variety and precision aiming. I’m just not seeing the viability in your arguments here.
As to the weapons not having any real differences between them, that is flatly incorrect. Even within weapon classes the difference between the pistol and the revolver is profound and the rifles and shotguns all operate in a reasonable facsimile to their real-world counterparts, with combat effectiveness based on range, ammunition capacity and reload speed. I also take issue with the notion that Marston has “way too much health” because in truth, while his health regenerates, he can’t actually take very many shots at even a distance before crumpling up and at close range Marston can be felled by a couple of blasts. Rushing into most scenarios in the game can actually get you killed expeditiously so honestly, I’m not entirely convinced your criticisms are based on any significant time spent with RDR.