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Games Industry Downturn is a Myth
Gamers with Jobs has a piece on the supposed industry downturn, stating plainly that any problems are figments in the minds of analysts. From the article: "I concede, things are not bright sunshine and frolicking puppies for the gaming industry at the moment. There's a less-than-stellar Xbox 360 launch, a lot of very proficient people pocketing pale pink slips, a disappointing sales sheet from the most recent holiday season, and a lot of industry insiders wailing and gnashing their teeth. Now is the winter of our discombobulation. In short, gaming seems to be at its own throat lately, and from the cheap seats, watching happily, cackle the pundits, cheering the bloodletting ... It's baloney. What isn't being talked about is the fact that consumers are buying more games than they ever have. They are just spreading the money out a bit more, putting dollars into the used market, into handheld devices, into services like Live Arcade, and into direct downloads. The handheld market alone, which just cracked into the billion dollar range in 2004, soared 62% to 1.6 billion for 2005 on the backs of the ever sturdy GBA, the largely successful launch of the PSP, and the coming of age of the DS."
Apparently frolicking puppies are paying off for at least one company.
Times are tight for many people, including gamers, and we are more discriminating with our money. When you consider that many outstanding game titles get little or no marketing (two of my favorite examples are Psychonauts and Beyond Good and Evil for the XBOX) while the tired sequels get the lion's share of advertising dollars, it's not surprising that gamers are spending less.
My general impression in the GBA market is that they have a solid install base, a wider variety of titles, development costs are lower, and retail pricing is lower. These factors may explain why there has been a strong upswing in GBA game sales while console & PC gaming seems rather lackluster.
I concede, things are not bright sunshine and frolicking puppies for the gaming industry at the moment.
Nintendo seems to be doing quite well with the frolicking puppies, and it's always a sunny day in World of Warcraft (at least until the next patch that adds weather effects).
G.
What isn't being talked about is the fact that consumers are buying more games than they ever have. They are just spreading the money out a bit more, putting dollars into the used market, into handheld devices, into services like Live Arcade, and into direct downloads.
So there's no downturn because consumers aren't really abandoning games, they're turning to older , more nastolgic games and don't buy the new stuff? Hmm... I think there's a flaw in the logic there.
In my mind, if gamers aren't paying for new games to be developed, that means the industry is experiencing a downturn. The fact that gamers are buying older and used games only signifies that they don't want the new stuff that's being produced.
Javascript + Nintendo DSi = DSiCade
I do see another video game market crash, but this isn't it. Either this next generation of consoles, or the one after, will make video games so expensive to make that most companies will drop off or consolidate. We've been seeing this happen already. This will leave only a few very large video game companies that will not need or want to take any risks. We'll see a slew of bad sequels and movie tie-ins worse than that which we see now. This will cause gamers to lose interest in video games, thus a market crash.
This is only my prediction, of course, but I don't think I'm the only one that sees it. Nintendo, for example, seems desperate to innovate or die.
I can tell you exactly why the holiday season 'sucked':
1) XBox 360 is crap and was hard-to-stock
Despite how much I dislike it, I worked on the retail side during the 360 launch, and the demand was there. I don't know if it was a large demand, in terms of other launches, but it certainly exceeded the units we received (which only happened twice while I worked there, and both times they were small shipments.) As most know, the story was similar just about everywhere.
I think Microsoft is mainly to blame for this: while something may have gone wrong with their manufacturer, they seemed to know the demand the system would elicit, but neglected to consider that when comensing production. I think they should have known that the capacity they had wouldn't meet demands (and I think they even said as such,) and increased production in some fashion. Certainly, there would have been a far larger number of 360s available under Christmas trees had their been sufficient inventory.
Also, problems that ran around the social circles soon afterwards probably turned off some of those who hadn't yet got one but were still interested, until that point. (Look, I can boil an egg on my power unit!)
2) Lack of new hit games
While I'm certain there were some gems, there were no "must have AAA games" that I can think of that were released around the time (and, again, I worked in electronics retail at the time, so I had an idea of what was "must have".) So there was no rush to get this game or that game.
The only game I can think of that would have been THE title of the season is Twilight Princess, and we know they moved that back to [April|June|November] (depending on where you get your information.) (Curse you, Nintendo!)
3) New Systems
We've already touched that the XBox 360 lacked the quantity to fill demand, but the demand for two yet-produceds system also slowed sales. People who already knew about the PS3 and Revolution (and, now, DS Lite) but didn't have a PS2 or Gamecube (or DS), respectively, most likely decided to save their money for the "new system right around the corner". With waivering release dates, most people were thinking mid-year. A six month wait to get the latest and greatest as opposed to getting now what will by then be old beans? They could wait.
Also, the release of Twilight Princess would have created a large surge of new Gamecube owners. I've talked to many who said they would get a GCN when Twilight Princess came out; now most are saying that they'll wait for the Revolution.
So, yes, the game industry is indeed throttling itself. Sequals of the Day and Cookie Cutter FPSes aren't helping, either.
I'll admit it: I'm a bottom-feeder.
I typically only buy one game a year. I would buy more, but I have a wife, kids, part-time school, a nice job, dogs, a house, a family and I use most of my remaining "free time" tinkering with code and other creations. In other words, I more-or-less grew out of the "new game" market.
I can usually pick up a two-year-old, highly-replayable hit for about $15 new. (I still haven't opened the box for WC3:TFT.) I'm sure that doesn't make any money for anyone, but it does kill off any remaining desire to purchase any new game.
MMORGS look interesting but I did enough of that more than a decade ago when MUDS were popular. Furthermore, the monthly charges are a no-go. (I took a quick look at "Minions of Might" because it doesn't have monthly charges, but I got plenty of play time just doing the demo.)
I guess I do most of my game-playing in between flights at airports. Even there, I'm drawn to MAME emulators because you don't exactly want to put on headphones in an airport (think flight changes) and old arcade games lend themselves well to the high levels of background noise in the terminals.
There's this bit in Alice Through the Looking Glass where one of the characters talks about having to run as fast as you can just to stay in the same place.
Imagine that a company said "we're doing better, we made more money this year than last!" and then pointed out that their "profit" column this year has more dollars in it than their profit column last year-- but, they don't mention that the dollar is worth slightly less this year than last year, and the profit column isn't as large as last year's if you count in last year's dollars. By not taking inflation into account, this hypothetical company made a loss look like a gain.
Or imagine that a congressman stands up and says "our federal budget increases the size of medicare", and points out that the number of medicare patients they've allocated funding for is bigger than the number last year-- but, they don't mention that since people are being born all the time, the number of people demanding access to medicare is rising, and so you have to increase the number of medicare patients by a certain amount just to keep the same level of coverage. By not taking into account the inherent need to constantly expand the program to accomodate the growing population, this hypothetical congressman made a reduction in the size of medicare look like an increase.
This editorial here stands up and says "the game industry is doing better", and points out that the industry sold more games than last year-- but, he doesn't mention that since people are being born all the time, the number of potential game buyers is increasing. It's quite possible for gaming to simultaneously be doing badly and reducing in popularity, while the absolute number of games sales is increasing, so long as the number of new customers is rising slower than the population of potential new customers. The appearance of new potential customers can mask a decrease in the percentage of customers who want to buy, and this is something that Nintendo, one of the main "zomg gaming sucks now" soothsayers of doom, has been in particular harping on-- pointing out the number of households that exist is vastly larger than it is in 1982 but the number of households with video game systems has stayed pretty much constant. By not taking this into account this article has made a downturn look like an upturn.
Of course, it all depends on what we're measuring here. Why do we care if there's a "downturn"? Well, if we're gauging whether it makes sense for EA and Activision and whatnot to be laying off people, then aw hell no. The game sales went down last year but they're going up over longer periods of time, EA's dip in fortunes is just a result of mismanagement and misallocated resources. But if you're looking at things in terms of "do video games have a problem?" or "does something fundamental about video games need to change?", then absolutely yes, the gaming industry has a problem and a number of things about it need to reform. The game industry is running as fast as it can and it's barely staying in place.
putting dollars into the used market
err isn't this something that the games industry has been bitching about?
also, can we please shoot the next person to make a puppies and sunshine joke/pun. guys, there is a reason you're posting on slashdot and not out on the comedy circuit. stop. please.
You abstract the games too much. At that level of abstraction Bridge is just a Poker clone (or the other way around).
Genres are a way of summing up certain traits of a game in order to classify it and understand it better (because the mind can handle categorized data much better). Demanding a new genre to be created is pretty hard when we've got genres as broad as "3d Action".
Justice is the sheep getting arrested while an impartial judge declares the vote void.