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Fortune Magazine On 'The Biggest Game In Town'

Thanks to Fortune Magazine for their feature on why games are seriously big business. The introduction reads: "Music? Sales down. Hollywood? Hit or miss. Tech? Flat. No wonder everyone wants to be in videogames", as the piece goes on to throw out some interesting statistics: "Within three weeks [of release, Madden NFL] grossed $100 million -- two million copies sold at $50 a pop. In roughly the same period, the summer hit movie Seabiscuit returned $78 million." The amount of hours spent in front of games is also highlighted: "On average an American will spend 75 hours this year playing videogames, more than double the amount of time spent gaming in 1997 and eclipsing that of DVD or tape rentals today." But despite the article's EA-hyping, it points out the cyclical nature of the industry and failures, too, such as The Sims Online, to which "...just under 10,000 are now subscribed."

13 of 42 comments (clear)

  1. Glossing over the obvious point by Dancin_Santa · · Score: 3, Interesting

    If you are a large game house like EA with solid games like their EA Sports line, you can expect big returns for yearly updates.

    Try to break into the business without having serious funding. It's almost impossible.

    The only thing that is clear from this article is that them that's got will get and them's that's not shall lose. And it still is news, I guess.

    1. Re:Glossing over the obvious point by NanoGator · · Score: 2, Insightful

      "Try to break into the business without having serious funding. It's almost impossible."

      It's not that bad. Lots of opportunities around. I, for one, wouldn't mind working on a shareware PocketPC game. It's not like you'd need a whole lot of resources to get that going. You've got the net as a delivery mechanism etc. Okay, it won't make you insta-rich, but it's an avenue to explore.

      Console gaming is an entirely different animal. Start small.

      --
      "Derp de derp."
  2. Uhh.. length of game/movie play? by QuantumG · · Score: 4, Interesting
    On average an American will spend 75 hours this year playing videogames .. eclipsing that of DVD or tape rentals today.

    You really can make statistics say anything you want. Nevermind that a movie lasts 2 hours (maybe 4 if you're an Oliver Stone fan), whereas a game is required to supply 50+ hours of gameplay or it's considered a waste of money.

    --
    How we know is more important than what we know.
    1. Re:Uhh.. length of game/movie play? by asjk · · Score: 2, Insightful
      On average an American will spend 75 hours this year playing videogames .. eclipsing that of DVD or tape rentals today.

      You really can make statistics say anything you want. Nevermind that a movie lasts 2 hours (maybe 4 if you're an Oliver Stone fan), whereas a game is required to supply 50+ hours of gameplay or it's considered a waste of money.

      I'm not sure I understand your objection. Sure the average time for the two activities differ in their unit length--I get the point that we see more movies but play videogames longer. I think the salient point is that these pastimes are reaching parity in monetary outlays and the total time of engagement. Many of my friends (older folks) are stunned to hear videogames have better sales then first run movies. This would be important points for advertisers, say or investors. The datum is valid for some uses but not others.

    2. Re:Uhh.. length of game/movie play? by Matrix272 · · Score: 2, Interesting

      Either way, this doesn't happen very often with games.

      I'm sure that the 2 million people that bought Madden 2004 will only play 1 game of it, then toss it aside and wait for the next game. I played Metal Gear Solid through about 4 times, and MGS2 through twice. My estimation is if $7.50 == 2 hours of entertainment for movies, then $50 == 13.3 hours of entertainment for movies. Correct? In that case, spending $50 for a game, even if it's only a 25-hour long game, is much more of a bargain than going to the movies.

      On the other hand, buying a DVD is a slightly different story. If you watch a movie 5 times over the time that the DVD works, then it's 10 hours for $20... which is $2 == 1 hour. In that case, it's EXACTLY equal to spending $50 == 25 hours. Hmmm... maybe it's not so different after all.....

      --
      "It's better to have a gun and not need it than need a gun and not have it." ~ Christian Slater, True Romance
  3. Cheap! by JM+Apocalypse · · Score: 2, Interesting

    You also have to realize that a huge amount of games are made for the sole purpose of promoting a movie or other product. Most are made very quickly, and you can tell by the quality (** cough ** Harry Potter ** cough **). But, companies like id are there spending years making games, and create a solid game, but making small amounts of profit out of it. I have tried playing these games, and it looks like very little effort even went into them. Join with me, fellow /.ers, and boycott games!

    Well ... at least until Doom III comes out. (YAY)

    I don't understand what is the big draw in these games. People play replicas of previous year's games, with a few minor changes, and are willing to shell out $50 for each minor revision. If software was like this, then there would be 20,000 Microsoft's running around.

    You also have to keep in mind that 1/3 of the games are from Microsoft ... so I am partially correct.

    - fin -

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  4. MMOG Cashflow by Anonymous Coward · · Score: 2, Interesting

    The Sims online is a failure with just under 10k people paying $10 a month?

    That's still $100k a month. Even paying for the huge pipe the game's servers need, there's still gonna be left over cash.

    People tend to forget games like Evercrack, DAOC, even SWG, are huge cash cows.

    Maybe if Sims Online drops below 5k users then there may be some issues with supporting constant developer updates, but even then, the game still makes enough money for it to live on.

    1. Re:MMOG Cashflow by NonSequor · · Score: 4, Insightful

      I could be wrong, but I don't think that the profit is as good as you would imply. In order to keep subscribers in an MMOG, you have to continue to employ artists and programmers to provide new content and fix whatever problems there may be (MMOG players are the bitchiest of all gamers). On top of that, these games have very long development cycles and so the company needs a lot of cash to offset the development costs.

      --
      My only political goal is to see to it that no political party achieves its goals.
  5. Advertisers have known about this for a while now by tessaiga · · Score: 3, Interesting

    Just as Ford shelled out to have 007 drive an Aston Martin in "Die Another Day", car manufacturers will go out of their way to provide prototype designs and specs for their new muscle cars for inclusion into games like Grand Turismo. As the article points out, gamers spend enormous amounts of time with a good game, which gives your product much better exposure than a 30-second TV commercial or a print ad.

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    The bold print giveth, and the fine print taketh away ...
  6. Re:Advertisers have known about this for a while n by ArmyOfFun · · Score: 3, Informative

    HERE is an article describing exactly what you are trying to say (I think). It was either posted here or on Fark a few weeks ago.

  7. $50 by LazyBoy · · Score: 4, Funny
    Within three weeks [of release, Madden NFL] grossed $100 million -- two million copies sold at $50 a pop.
    The obvious answer is to charge $50 for movie tickets and CDs.
    --

    If Chaos Theory has taught us anything, it's that we must kill all the butterflies.

  8. 75? by August_zero · · Score: 2, Insightful

    On average an American will spend 75 hours this year playing videogames, more than double the amount of time spent gaming in 1997

    Dear God! When Wind Waker came out I spent like 50 hours in a weeks time with it, I picked up Disgaea last Thursday and I was at 30 hours by Sunday.

    Either 75 is a really low estimate (thats what, an hour and 15 min a week?) Or I can expect some friends and family to be ambushing me with an intervention pretty soon....

    --
    On Wall Street they say "buy low, sell high" On the pad we say, "buy high, sell high" Isn't that somehow better?
  9. P2P influences? by neglige · · Score: 2, Insightful

    Music? Sales down. Hollywood? Hit or miss.

    Now, how much does filesharing influence this? For music, I'd say quite a bit. Not so much for movies - it's l33t to have the latest blockbuster on (S)VCD, even before the premiere, but in the end - if you liked the movie - you still go to the theatre and watch it on the big screen. Supposedly true for music CDs also, but I guess to a lesser extend.

    What about games? Yes, you can find virtually any title on (most of) your favourite P2P network. Documentation may be missing, or may be included as a PDF, but there are commercial box version available that do not offer much more than that, especially since the advent of DVD cases...

    So either John and Jane Doe take delight in d/l movies, but not games, or the number of people playing a game are much larger than the sales figures. If you have a pirated version of the game, the drawbacks are much lower than those of a pirated movie. And I'm not even convinced that the majority uses the pirated games as a "full demo" and buys the game afterwards, if they like it.

    Just my 2 cents. I would be nice to have numbers so a definite statement could be made... :)

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    My cats ate my karma. They also wrote this comment.