Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
August 20, 2014
arrowPress Releases
August 20, 2014
PR Newswire
View All





If you enjoy reading this site, you might also want to check out these UBM Tech sites:


The Worst Things To Happen To Games In 2011 (According To Analysts)
The Worst Things To Happen To Games In 2011 (According To Analysts) Exclusive
December 20, 2011 | By Chris Morris

December 20, 2011 | By Chris Morris
Comments
    18 comments
More: Console/PC, Exclusive, Business/Marketing



[From layoffs to the rise of freemium/smartphone gaming, several analysts share their biggest game industry disappointments and unhappy trends of the year with Gamasutra.]

Analysts, by nature, are critical beings, so having heard their thoughts on the best things to happen in the gaming industry this year, we definitely wanted to hear what they thought had gone wrong.

Retail sales are set to record their third consecutive year of declines, after all and while some companies have seen their stock prices rise (congratulations EA!), others continue to lag.

Here's what Wall Street's most notable game industry analysts thought went wrong in 2011:

Michael Pachter, Wedbush Securities

Pachter was pretty upbeat on the video game industry in 2011, but noted there were two events that were discouraging to him. While he didn't have any animosity towards Sony after this year's high-profile hacking incident, he was upset that games and gamers, which had previously been off limits to that subculture, became a target.

"The worst thing that happened to the industry is it became the target of dickhead hackers," he says. "It's a shame hackers have nothing better to do than screw up everyone's enjoyment."

A close second, he says, was the shut down of Team Bondi, leaving dozens of employees unpaid. That might surprise some people, given Pachter's controversial statements on unpaid crunch time, but he says "I feel bad that something like that happened. It's just wrong. People that work in this industry and make great games deserve to get paid."

And while he listed the growth of the multiplayer phenomenon as a good thing, he notes that the success of titles like Modern Warfare 3 often come at the expense of other games.

John Taylor, Arcadia Research

The Wii U may have had people wrapped around the corner at E3, but it didn't hold that fascination after the show. Combine that with the underwhelming launch of the 3DS and Taylor says it makes Nintendo as a company one of the year's biggest disappointments.

"Wii U underwhelmed people and so we'll see where that goes and the same with the 3DS," he says. "I say the disappointments are both on Nintendo's side, specifically the price structure vs. its performance. There are lot of people wondering if they need another dedicated box in their house. With iDevices [selling] 10 or so million units every quarter, it's getting harder and harder to justify that strategy, even with the world's best games."

P.J. McNealy, Digital World Research

McNealy joins Taylor in pointing to the marginalization of Nintendo as a disappointing trend of 2011.

"The industry needs Mario, needs Zelda, needs Donkey Kong, and right now, with the slowing Wii console sales, and lack of apparent developer enthusiasm for making games for the 3DS, it's not helpful to Nintendo longer term," he says. "Granted, industry observers have tried to call the demise of Nintendo before, and Nintendo answered (hello, Wii!!), but right now, with consoles going more media-centric, it's a trend that doesn't play to Nintendo's core strength."

Eric Handler, MKM Partners

Like Pachter, Handler believes the rise of smartphone gaming has been one of the best things and worst things to happen to the gaming business. The infusion of new talent and the return of garage developers making money for their games is encouraging, he says, but the impact on the larger industry particularly publicly traded game companies - has been less so.

"It has killed the device casual platform like the DS and the PSP and it has taken a $35 business and made it a $3 business," he says. "The economics have really changed. It's hurt revenue from that standpoint and changed the entire economic model."

Billy Pidgeon, M2 Research

Pidgeon had mobile on his mind as well, but in an entirely different way. His big frustration this year was the conventional wisdom that phone and tablet gaming was the same thing as portable gaming.

"People have been saying that freemium and iPhone games and games for the iPad are going to take down traditional gaming," he says. "As long as gamers are looking for quality entertainment, they're not going to settle for what's available on tablets and iPhones. That's a snack, but it's never going to be a meal. Some people will exist on snacks the rest of their lives, but that's not the gaming audience."

Pidgeon also said he was frustrated with the emphasis on sequels the industry has fostered recently and which really seems to have come to a head this year. However, he notes, he understands the reasoning behind it.

"There is this franchise-itis, but I really can't fault that," he says. "You can't blame [publishers]. It's expensive to put these games together and they really can't afford to take that much of a risk."

Jesse Divnich, EEDAR

Hackers were on Divnich's mind. The analyst said he was frustrated with the string of attacks that occurred this year, since the gaming community is generally supportive of some of the loftier stated goals of Anonymous and other organizations who have been known to cause trouble for others.

"While security breaches and threats occur daily in our world, it is saddening to see the video game industry hit so hard in 2011, especially since the developers and gamers, who are the biggest proponent of free speech and consumer rights, were ultimately impacted the most," he says. "And maybe that's the problem. We walked around with our defensives down and that ultimately made us an easy target -- too easy to pass up apparently."


Related Jobs

Bethesda Softworks
Bethesda Softworks — Rockville, Maryland, United States
[08.20.14]

Associate Brand Manager
Turbine Inc.
Turbine Inc. — Needham, Massachusetts, United States
[08.20.14]

Software Engineer, Mobile
Bethesda Softworks
Bethesda Softworks — Rockville, Maryland, United States
[08.20.14]

Brand Manager
Nordeus
Nordeus — Belgrade, Serbia
[08.20.14]

Senior Game Designer










Comments


Martin Crownover
profile image
I found what Handler and Pidgeon had to say interesting, and I agree with them. The trouble with phone / tablet gaming and the $1-3 valuation of games is that in the long run, even if traditional games are still the go-to for "big" experiences, it will probably result in less variety amongst those types of games, as studios move faster to make mobile games instead.

Joe McGinn
profile image
Jeez, even when trying to speak on behalf of gamers, Pachter puts his foot squarely in his own mouth. Gamers aren't furious at the *hackers*. That's like being furious at the weather. They are furious at Sony's complete lack of preparation for an entirely predictable event.

Ryan Rigney
profile image
As a gamer and former PS3 owner, I'm furious at both.

Timothy Barton
profile image
Yeah, this article, whenever it mentions hacking, makes it sound like they just randomly decided to start attacking "gamers". They didn't attack gamers, they attacked a company they felt provoked by. While the PSN outage was definitely annoying for gamers, I suspect that wasn't really their intention. I think Sony had a healthy reality check after confidently boasting and baiting, as well as pulling a bait and switch on a core feature of the PS3. Sony benefits from this being painted as an unprovoked attack though. It is like reading a newspaper about a robbery, when it was a guy walking down a known bad street at 3 AM alone with a blood alchohol content of .3. Sure, the robbery shouldn't have happened and is illegal, but there is some fault to be shared.

Zach Grant
profile image
Publicly going after a hacker and trying to ruin him is like teasing a dog with a steak, then getting mad he bit you when the chain broke.



Sony had every right to go after the kid, but they surely could have been smarter about it.

Bob Johnson
profile image
The rise of freemium games on iOS is annoying to me. I admit to plenty of ignorance about them, but they all strike me as cash grabs or slot machines.



Are any of these games actually good?



iOS gaming is both a blessing and annoyance. It's great I can buy some 1-trick pony kool idea games for $1 or $2. It is great that is extremely easy to do so. It is great also because we might not otherwise see some of these games.



But man soon I find myself buying a ton of them for $1 or even getting them free. And then I have 50+ games on my iPad that I barely have even played. And that might be a month's worth. And there are a thousand more out there that were released last week. And every site says try this one and that one. And ...this is good and that's good and it's only a $!. There's too many!



My kids even say Dad you don't have to buy any more games. We have enough. It has almost become uninteresting to them.



IT's gaming junk food that is readily available so you get sick of it almost.



It's almost too much choice. I find games through sites and forums. But still they are so cheap that people just say well it's only $1. And the nearly free price causes folks not to care about the quality of what they are buying so much. And thus games priced at $1 get thumbed up too easily.



But...I feel like the end result of this is ...that "time available to check out games" becomes the currency. And I don't have a lot of that currency. And thus the cheap price almost is a hinderance to my quest to find iOS games that are truly worth my limited time. The cheap price is a hinderance because people overlook the quality when you are talking about a $1.



And then the junk food part again well the games just become like YouTube. It's just about getting a rise from seeing that minute of somebody doing something stupid or that 20 second cute moment. ITs is the gaming equivalent of that.





When Xmas hits my kids will unwrap their Super Mario 3D Land and Zelda:SS. I think these experiences. The waiting for them even if they might not know they are coming. The grander experiences. I think they will be special. More memorable.



There is little special about iOS gaming. OR that is the thought that just raced through my mind. The games are so really available, so numerous and so cheap that are any really special?



It is a strange dichotomy - the very conscious deliberate work of art hardware and software design of Apple iOS devices mixed with the ton of cheap cash grab less filling time wasters of games on iOS.



NOt to say I haven't had fun iOs gaming. The biggest names like Angry Birds or Cut the Rope. Fun little puzzle time wasters. And there are a few others.



But many are just .... it just seems like folks are excited because the game was only a few dollars and the graphics are modern. OR the game was free.



HOw much of this is a novelty? Once the concept of getting a game instantly that looks graphically appealing to the eye for a $1 on a phone becomes taken for granted will the graph level off? Once we have experienced a 1000 ways to move something around with swipes, touches and tilts what next? The low hanging fruit is being picked right now.

Michael Joseph
profile image
Film and TV are like that too.



99% of everything is crap...



http://en.wikipedia.org/wiki/Sturgeon's_Law



Back in the day of relatively few channels ye olde TVGuide was useful...



In the early days of Windows 95 when you had these shareware sites like WinFiles.com (eventually bought by CNet) and the game section was full of games like WinPoker, Poker95, WinPacMan, Win_Chess, WinCheckers, Win*... you had to rely on the ratings of other users or the editor's choice logo to know what was really worth downloading.



I'm sure there's equivalent sites that provide iOS game ratings.



I much prefer the Steam boutique. (lots of holiday sales going on there btw)

Russell Carroll
profile image
Some good thoughts. I think it is also comparable to the Atari 2600 days. Glut of content pushed prices down and eventually were a big part of the collapse. The rebuilding came through Nintendo's curated and controlling approach. Right now we have both open and controlling going on in the gaming industry, but little curated (and I don't know that I want more).



A study that came out today noted that iOS downloads were flat on the year. Zynga lost users over the last 6 months despite releasing 5 new games. These may be the first signs that the market is tiring of the types of gaming experiences (social & snack) and will soon be ready for a new paradigm.

Ameet Virdee
profile image
It's like you just discovered a Trash and Treasure market...and were amazed at just how cheap everything was. Soon you also realized just how much the trash overwhelmed any actual bargains. This is one reason I haven't bought a single $1/freemium game - I know there's a small chance it might give me pleasure, but there's an enormous chance that I'm just buying crap, and I don't feel like buying crap accidentally even a little bit.

Jonathan Jennings
profile image
interesting perspective Bob, definitely something to ponder.

Richard Thomson
profile image
Nintendo brought it on themselves with the shear amount of shovelware that's been released for the wii, why would I want to spend extra money on another nintendo console that's just gonna sit unloved in a bag like my wii does, get some decent games out for the wii first, generate more interest in your consoles and games and maybe people might become interested again, but it would take a hell of a lot, especially for the mums who got burnt buying one thinking the family would play on it, only to discover that once you've got bored of wii sports and mario cart there really isn't much point in having one.

Patrick Davis
profile image
How is this Nintendo's fault? They released quality games on the Wii. If other developers were willing to put in the same effort in making decent games, you'd have them. Since most dev houses wrote it off as a failure even before release, they had nothing going. So, you get rushed out shovelware instead so they can make a quick buck.

Tadhg Kelly
profile image
Hmm,



Here's my four:



1. Microsoft's lack of direction. This year Microsoft has, for me at least, shown all the signs of a company that has no idea what story it wants to tell the market. They're into a little bit of everything now, and obsessed with trying to pull their users into every corner of an imaginary ecosystem (through Kinect, Metro, etc) that's leaving their core product very unfocused. While they have sold a lot of Xboxes in the process, the brand is now adrift (as seen in the recent dashboard update, which is 75% advertising for limited ranges of media products).



2. The PSN hack, for the obvious reasons mostly but also because it underscored Sony's continuing difficulty with providing software of substance rather than branding-led products. The real failure is not the hackers (hackers gonna hack, you might say) but rather the grievous holes that the hacks uncovered.



3. The continuing refusal of Facebook to put an editorialised store front on their platform (much like the front page of the App Store) to highlight interesting games means that the variety of social games is as non-existent as ever. In a sense even the Zynga IPO reflects this, showing that the market considers social gaming to have peaked (on Facebook at least). While Facebook gaming is not declining, it is stalled and unlikely to see any significant shift until Zuckerberg gets it together.



4. Google Plus's closed approach. The calls for the G+ API are only growing louder and yet it has failed to materialise five months after launch except for a few hand-picked developers. Those developers are, thus far, simply cloning their Facebook games and so the quality of the offering to users is just poor.



I don't think Nintendo fits. They did misjudge the interest in the market for 3D, but managed to save the situation with a deep price cut. And I maintain that the Wii U is the most interesting thing to happen in videogames for quite some time.

Tadhg Kelly
profile image
The Wii U won't cost $600.



I disagree with the assessment that it's a novelty. Nintendo has always been at its strongest when producing interfaces that have depth as well as breadth (which is why the rest of the industry rushes to copy its every move), and when the 'gimmick' phase fades the platform underneath proves surprisingly sound. So it was with the N64 and the DS, and the Wii to a lesser extent.



The sheer number of uses that a tablet-console system could have is mind-boggling. A simple example is that it's the first console that could host a real time strategy game without all the usual compromises that joypads have had over the years, but that's just the tip of the iceberg.



Mark my words: By the end of 2012 both Microsoft and Sony will be trying to figure out ways to get their tablets to talk to their consoles as a stopgap against the Wii U.

Eric Geer
profile image
Nintendo will do well no matter what:



3DS is now selling like hotcakes because of the software that is now being released--both apps for the system as store bought and downloadable games.



As for the WiiU...I think it's too early to predict much of anything--but knowing that the system will sport a touchscreen and will be on par or above the PS3/360 is a great thing for everyone. I'm truly excited to to see what devs come up with using the touch screen/tv gameplay--but also I'm super excited bout games being able to be streamed to the controller--This would be great for my family because my wife and I always have to take turns on our TV for movies and games---it's the functionality that has me sold. Nintendo will do some interesting things with it no doubt---I'm more excited about the "not knowing" or the anticipation of what will come than I am about most of the games that are coming out for 360/ps3/3DS or Vita.

Bob Johnson
profile image
Yeah if the Wii U can stream any game to the controller and the play is lag and problem free then it will be a very desirable feature for the masses.



And I think the 2nd screen in gaming is half proven as useful already by the games on the DS and thus has a great chance of becoming a standard.



But realize the paradox above. GAmes that are built to use the controller's 2nd screen for maps or extra buttons etc will also be expected to support the streaming to the controller screen (read 1 screen) feature.



I also wonder how Nintendo ...brings together those that liked the wiimote and some of the motion stuff and pointing tech with the new focus on a more traditional controller that supposedly scared off audiences in the past?

Inti Einhorn
profile image
On the DS you can see both screens at once, so the 2 screens support one another. How can this work with the Wii U? It seems to break a rule: You should not have to look at your primary input device to operate it. It's not primary? then why do I need it?

Bob Johnson
profile image
Information. Secondary functionality. Reduce clutter on primary screen. Hidden screen for local multiplayer games.


none
 
Comment: