Analysts Predict Tough Christmas For Game Publishers

Thanks to Gamesindustry.biz for its article regarding predictions of a tough 2004 holiday season for all videogame publishers, as an analyst report from Banc of America Securities claims "competition in the games market will be much more intense than last year", and argues that "some games will just not receive any shelf space from retailers, and initial shipments of titles will be very low, even by historical standards." The report goes on to highlight some non-specific specifics: "We have very low expectations for games of other developers with less-known brands... including Acclaim, Midway (except Mortal Kombat), Atari, Eidos, Vivendi (apart from Half-Life 2, if it is released) and even Microsoft (apart from Halo 2)... Expect many disasters this holiday." Is there really a reason for game creators to worry about what sales Santa will bring them?

Comments

I consider myself a gamer, but...

[Kris_J]

...I'm not currently intending to purchase any more games this year. I still play Diablo II about once a week and I'm very much enjoying Sacred with full knowledge that I've got plenty of class, skill and difficulty combinations to explore.

Christmas will most likely by DVD season, not games season. Newly released box sets of SciFi TV shows will feature highly as well as "classic" movies like Office Space.

Publish games during the summer season!

[Senator Bozo]

Hollywood, for example, has its big summer season when all of the blockbusters are released nearly back to back. In fact, releases are even scheduled around dates set by competing films.

So why don't video game publishers try to capitalize on the summer months, when the market isn't flooded with competitors and people seem eager to spend money on entertainment?

E.g.: Blizzard publish Warcraft III on July 3rd, 2002 and WC3: TFT on July 1st, 2003, and each sold several million copies within weeks of their respective release date.

Re:Publish games during the summer season!

[Dark Nexus]

When you think about it, most younger gamers get their games as gifts, generally for birthdays and christmas. So for that target audience, christmas is the right time for most releases.

My guess is that publishers are still stuck on that "games are for kids" thought when it comes to release dates, even if they're over that for content. For any target audience that buys their own games, spread the releases around a bit! Some more in the summer, some around late February or early March for that late winter drag, a few in mid or late september, for those who have grown tired of their purchases from early June...

Re:Publish games during the summer season!

[dammitallgoodnamesgo]

I had heard that the idea was that publishers thought no people would ever want to stay in playing games during the summer, they'd all be out in the sunshine. We know how wrong that is, but it's possible they've not learned yet.

Meaning of Christmas

[LifesizeKenDoll]

I think we're forgetting the real meaning of Christmas - The birth of Santa

Re:Meaning of Christmas

[chrismcdirty]

As we all know, Christmas is that mystical time of year when the ghost of Jesus rises from the grave to feast on the flesh of the living! So we all sing Christmas Carols to lull him back to sleep.

Christmas Madness

[EnglishTim]

It's crazy some of the titles that get released at Christmas. All the big boys (well, er... let's make that EA) release big, often licensed games for Christmas, with a huge amount of advertising.

I find it bizarre that publishers put out games like 'Metal Arms: Glitch in the system' at that time which while being a very good game, is hardly going to be able to compete with all the big-name licenses out there at the time.

You have to remember that many of the games that are bought around Christmas are bought for someone else. When Mum, Grandpa or Uncle Alf goes into a game store looking for something to buy little Jimmy, they're going to go for something safe with a brand they recognise. That means FIFA, James Bond, The Matrix, Star Wars, WWE, or something they've seen a lot on the TV.

Re:Rhetorical or redundant?

[gl4ss]

well, the way they explain it is that: ***"The report, authored by analysts Gary L Cooper, Eric K Brown and John P Newell, details key clashes between major titles in almost every genre - and presents a convincing argument for the claim that "apart from The Sims 2.0, we do not consider any game this holiday out of harm's way of the competition.""***

so it should be a sweet season for the _gamer_, the reason why it would be hard for the gamemaker is that CRAP TITLES WON'T SELLL. though, it's all about the marketing anyways and god knows how the hell these guys can even predict what games will actually be on sale durin the xmas shopping season.

On a related note

[Slyght]

Is it just me, or has anybody been noticing that everything's just been going bad for developers nowadays? I mean, it seems like every other day you go on Slashdot or Gamespot and there's an article about a development studio getting shutdown, or a publisher laying workers off, or a company's earnings report lower than last year, etc. People always talk about the video game being a growing industry, but all it seems to be is shrinking. This is very discouraging to somebody such as myself who is in the game development industry, because it feels like this industry is going to collapse any second.

Re:On a related note

[jonwil]

2 things are happening.

Firstly, PC games are being overtaken by console games.

And secondly, larger studios are getting bigger and more market share at the expense of smaller studios.

Diablo 2

[vehn23]

I definitely got my money's worth from this title but I regretfully bought it for my early-60's father a few years ago. He still plays it 10-20 hours a week. Single player. Ugh. I remember having to go to his house and beat a (pre LOD) multishot Bremm Sparkfist for him because he was stuck on him for days. Good times..

you have to remember the different demographics

[jonwil]

They need to sell/market games based on demographics.

For example, games aimed at younger kids should come out around christmas because thats peak season for them. (being that most of those games are bought by parents).

And games aimed at older kids/teenagers/young adults (who increasingly have part time jobs e.g. paper round, fast food or whatever as a source of money to spend on games) should be released at the times of the year when the target audience is most likely to have disposable income and/or free time.

Another thing to remember is that for younger kids, the parents (or grandparents etc) are more likely to be the ones making the decisions on what to buy. Although kids will ask for stuff, just because the kid asks for Gorefest Fighters 3005 Extra Special Extra Super Gore Violence Edition doesnt mean that they are going to get it (cue simpsons quote about episode with bart wanting Bonestorm and ending up with a golf game instead)

On the other hand, bigger kids/teanagers/young adults (and also adults) are going to be more liklely to be making their own decisions on what games to buy (especially if its their own money they are spending)

I do think that there is a market for smaller games (that dont have a huge name/licence attatched). However, that market disappears when the studio does the wrong thing and spends big $$$ on the production.

Blame it on Mom (and her stock investments)

[superultra]

So why don't video game publishers try to capitalize on the summer months

Easy. Games are sold retail, and retail is Christmas. No matter how many dedicated gamers exist that would buy games in the summer, it can't compare to the legion of mothers and wives that walk into game stores at Christmas.

Moreover, because retail is Christmas, investors expect high fourth quarter earnings. Say you're Vivendi, and you release Game X in August. For the same, it sells well. Let's say 2 million units, hypothetically. Now, release the game game fourth quarter (xmas), and due to competition you only sell 1.5million.

You've made less money, and probably spent more in advertising to get it. But because investors pay far more attention to fourth quarter earnings than third, every dollar made during Christmas is technically worth more to the company than if that dollar had been made in summer.

Even Hollywood adheres to retail law. It's best season is probably summer, but when it has to go through a retail channel (DVD sales) the studios plan their most profitable releases for Christmas. If there's any deviation, it's only because the picture companies are more financially secure than the gaming companies.

Ooh, the insight

[metamatic]

GTA: San Andreas will be coming out in, what, late October early November?

Ooh, the poor publishers, I'm sure they'll hardly sell a single unit of it.