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Analysts: FPS 'Most Attractive' Genre for Publishers
by Frank Cifaldi [PC, Console/PC, Career]
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February 21, 2006
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The latest issue of Jason Kraft and Chris Kwak's 'Video Game Journal' asks the question, "How does a publisher decide to develop a title for one genre and not another, between equally large genres?" The "equally large genres," according to the analysts, are sports, first-person shooter, racing, and "crime-based action," which is the term they use to describe games in the same genre as the once-unique Grand Theft Auto series. "Which genre should a publisher bet on?" they ask. "That is, which genre offers the biggest growth opportunity?"
According to the report, sports games are "an unattractive genre for most publishers" (excluding license holders, such as Electronic Arts), the first-person shooter is "a growing and highly attractive genre," the racing genre is "healthy in absolute percentage terms" (that is, it's neither growing nor shrinking significantly), and the crime-based action genre is "unattractive" and "grim," unless the game is within the Grand Theft Auto franchise itself.
The analysts concede that a genre's attractiveness can not be measured only by its size and market share, but that its growth is equally important. They measured growth based on upward trends in annual market share between 2000 and 2005, and in cumulative genre revenue per console; that is, revenue per console generated by games in a genre.
Sales were measured using NPD data for "current generation" consoles in the United States, specifically PlayStation 2, Xbox, Gamecube, and - given that the data goes back to 2000 - the Dreamcast.
The four "super-genres" accounted for over 73% in combined revenue for fiscal year 2005. "Focusing merely on a genre's size can be misleading," said the report, making an example of sports. Sports, they said, is an unattractive genre for most publishers, due to the highly competitive and expensive race for league licensing.
Because Electronic Arts holds the exclusive rights to publish NFL and NCAA football titles, Take-Two has a foothold on professional baseball, and professional basketball is highly competitive, the analysts immediately consider publishing a sports title as an unattractive prospect, leaving three major genres for publishers to consider: first-person shooters, racing, and crime-based action.
The first-person shooter, the report suggested, is likely the most attractive genre for a publisher to consider, citing the genre's "instant gratification" as its main appeal. "A few minutes of play can quickly satisfy the gaming urge," the report said. Although fiscal year 2005 revenue for the genre failed to grow year over year, even with popular titles such as Doom 3 and Battlefield 2: Modern Combat being released, the cumulative genre revenue per console has expanded. This, the report said, "demonstrates that revenue growth in the genre exceeds the growth of the console installed base."
"While First-Person Shooter appears to have grown as a genre," the report continued, "Racing appears more mature." Revenue-wise, racing is a larger genre, with close to $2.2 billion in revenue for fiscal year 2005 (compared to around $1.5 billion for the first-person shooter genre in that same year). Annual revenue for the racing genre, the report showed, grew steadily through fiscal year 2003 (thanks to titles such as Need for Speed Underground, Mario Kart: Double Dash!! and Midnight Club II, dropped a bit in 2004, and expanded very slightly in 2005. "We interpret the range-bound annual revenue market share (both peaks and troughs) as indicating a fairly stable genre," read the report. "We regard Racing as a large and stable, yet still attractive, genre."
The third "super genre" the report examined, "Crime-Based Action," refers to the genre created by Grand Theft Auto 3, and imitated by titles such as 25 to Life, Dead to Rights, and the True Crime series. Despite Take-Two's continued success with the GTA series, the analysts "believe the Crime-Based Action genre exhibits a downward bias."
Fiscal year 2005 saw no new Grand Theft Auto titles for home consoles and yet, despite a large number of new games in the genre, including GUN, 50 Cent: Bulletproof, True Crime: New York City, The Punisher, The Warriors, NARC, 187 Ride or Die, and The Getaway: Black Monday, Grand Theft Auto titles from previous years still accounted for 36.5% of the genre's total revenue, and overall revenue for the genre declined.
"These comparable declines occurred even though the console installed base grew and the number of competitive titles grew," read the report. When looking at the two upcoming titles in the genre, EA's The Godfather and THQ's Saint's Row, the report reads, "While both titles could initially benefit from the absence of Crime-Based Action titles on the Xbox 360, our analysis of Crime-Based Action genre suggests that games in this genre face the greatest genre-specific headwind."
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