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Bonus Round: State of the Industry

Johann said:
Very few games keep their initial price and even less could succeed at higher prices. Many consumers wait for a price cut or buy the game used. I can imagine some Nintendo titles, a few Acitivision-Blizzard games, and Dragon Quest in Japan could. Otherwise, people would be less likely to take a risk on an unsure game with a premium price or place greater value on a used copy of that game.
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It doesn't necessarily mean every game - just the premium blockbusters that are going to sell anyway. We are already seeing it a bit every now and then, but I think Halo Reach or BFBC2 at $68 is not going to hit the sales numbers, just increase revenue to offset risks on other games. EA couldn't do it last year as they had no "big" seller to fall back on (see Activision numbers) except maybe Fifa. This year with ME2, BC2 etc, they had the opportunity.

Johann said:
EA has been creating a more more diverse portfolio since 2006. They gone into the red to make a variety of games at the highest quality possible.
Activision is the publisher who jettisoned unsure games and concentrated on the surefire hits and potential breakthrough hits.
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EA haven't focussed on the metacritic 80 mark since FY 2008-9 though. The staple diets of the EA Sports portfolio were improved to the point where Fifa is now the leading football sku, Madden numbers rose and Live sustained its user base in the face of 2k's self destruct.

Activision were VERY fortunate that the numbers turned out the way they have. Their two staples - COD is a given, and WoW bought in a merger, continue to have excellent success. But they rely very heavily on these in each year. They had many more commercial "failures" (read - not as successful) - Prototype, GH, DJH, Ride, Wolfenstein. It's just they had a solid background to fall on.

Johann said:
Many publishers have attempted heavy DLC campaign. A few have been very successful milking their most fanatic consumers dry. However, there doesn't seem to be a correlation between DLC and. We've seen a lot of games with substantial DLC and pre-order bonuses and still end up with a strong used games market. For most people, getting through the single-player and a few hours in the multiplayer game of the month is enough. A special trinket or an extra dungeon won't change their minds if the core game doesn't entirely win them over.
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True, but the risk taking is always alleviated with a continued strong DLC of map pack/episodic content etc regardless of whether its bought in a large scale. If you can raise the average new sale price to $63-65 in the first 10 week period with DLC content, you have effectively given yourself a "buffer" of $5/copy for each subsequent high-risk release.

Traded games is really hurting the industry regardless of whether you agree with the practice or not. Anything they can do to minimise it is OK in my book, as long as the games keep coming.
 
KAL2006 said:
2. Nickel and dime with DLC
I think this is already happening, but hopefully the developers dont cut content that was suppossed to be there to begin with
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They already do.
 
I don't quite follow Jason's point, isn't he just advocating shareware? On that note, why isn't there more variation in pricing?
 
gerg said:
Well sure. But no single model can support the whole industry.
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What about the current model that has been supporting the industry for nearly 20 years? It has certainly been working for companies like Nintendo and others that have invested wisely. You know, those companies like Square Enix and Capcom who have invested in other areas like Dragon Quest IX and Monster Hunter PSP games. Which leads to the burning unasked question, what the heck are 3rd parties doing wrong that they can't earn a profit this generation when this was not a problem in previous generations?
 
It just occurred to me that there's another current revenue stream for games that the Bonus Round folks didn't even touch on, which is surprising since it's one that a few popular forms of media have employed for a long time: advertising. I'm sure everyone here has seen a logo for some sort of product tossed into their game at some point, and I recall reading a few years ago about plans to implement dynamically-updated ads into online games, sort of like changeable billboards. Product placement works in a big way, too. Why not offer a scene in Uncharted 3 where Drake escapes from that horde of expendable mercenaries by jumping a cliff in his rugged Jeep Wrangler? For games with heavy online multiplayer components, keeping up-to-date advertising could go a long way in maintaining server costs and potentially reducing the price of pay-to-play subscriptions.

Granted, selling adspace wouldn't work for all games (good luck trying to fit that Coke bottle into Metroid) so the whole industry can't sustain on it, but for the Maddens, Call of Duties, and Need for Speeds of the world, it offers a simple way to help mitigate rising development costs without having to find ways to stick it to the end consumer.
 
I like the GTA4, or pretty much any single player mod, model of using the assets as the set and creating something new with it. Ignoring all the extra production work that went into the story elements of Gay Tony and Lost and Damned, they still took place within the same world with the mostly the same vehicles and character models around.

and I mean, in general there are a bunch of ways to save money just from good planning. If Cryengine 3 lives up the promise I think that will do wonder if adopted. Demos they've shown had simultaneous building for PC, 360, and PS3. A lot of the ideas thrown around are to recoup the obscene costs to create some games now.
 
It is a shame they did not get someone Reggie from Nintendo for these series of episodes. He would have this shit on lock.

Why is the rest of the industry freaking out over costs, DLC, how to survive, this, that and the other while Nintendo chugs along with no DLC, low development costs and games that run marathons that you will be hard pressed to find used in any great quantity at any Gamestop in the country ?

Perhaps all of them needs to swallow their pride and that a closer look at themselves to find the real problem.
 
Gully State said:
I think there's validity in the idea that different games should have different business models. That's about it. Having every single game be driven by microtransaction is about as good as having every single game charge for a set price. It's smart that they're exploring different business models but it's stupid for them to think that a new homogenous business model would make them more money.
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This.

I have no problem paying more for a game that is longer, has a lot of replay value or higher production values . If that is the case though, then I better see much lower prices on short games, games with no replay value and games of poorer quality.

When games drop in price quickly it's often due to the real value catching up with the product. Unfortunately, market saturation also drops prices quickly on some games that otherwise deserve to have a higher price tag. If we could move away from price standardization I really think it would benefit the industry. Problem is, who determines what games get what pricing.
 
It does strike me as being kind of ironic that Facebook's Farmville and -ville games in general are being used as an example for how the hardcore titles should monetize game content to become profitable, because the $10 price bump in games this gen wasn't enough. Farmville's audience, play requirement (a few minutes a day), and theme probably has more in common with Animal Crossing , Rune Factory, Harvest Moon than anything you might expect hardcore.

Also, if we parse what Rubin said initially before launching into his big pitch for Microtransactions, he started by saying that hardcore games had gotten too big, too long and developers were giving too much away to consumers with games that 'never end'. I don't think many people here, especially those who regarly rage against casual games would like the idea of less content, and shorter games or games with 6 hour solo campaigns and monthly on-line subscriptions.

Wasn't long ago that optical disc meant prices came down. Now we're basically re-entering cartridge pricing. $70 games next-gen with DLC mission packs, micro-transactions and monthly on-line fees?
 
Kintaro said:
Why is the rest of the industry freaking out over costs, DLC, how to survive, this, that and the other while Nintendo chugs along with no DLC, low development costs and games that run marathons that you will be hard pressed to find used in any great quantity at any Gamestop in the country ?
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I have to wonder if the average wii owner even knows that one can trade a game in, if one were so inclined.
 
Originally Posted by KAL2006:
2. Nickel and dime with DLC
I think this is already happening, but hopefully the developers dont cut content that was suppossed to be there to begin with

What do you think pre-order DLC is?
 
Just got aroudn to finishing this. Good stuff though, it would have been nice if ya know, Jason R. could have actually finished his argument =/
 
just watched the 2nd part.

i see what jason is getting at ... but he didn't quite have the example to ram the point home..even though he came close at the end there.

FIFA ultimate team.

maybe because it's not so visible in the states? how has the madden version of it gone?


forget MW2.

UT is pure genius .. and it is the perfect example of what jason is trying to explain.



you build your own team, by buying player contracts with points you win through winning games. as you play games ..those contacts keep running out .. so you have to reup those contracts or else you lose yr players. better players require contracts that cost more per game.

the genius is the games enconomy.

you can win points by winning games, and yr performance in thos games.

or you can buy 'packs' ... kinda like those baseball bubble gum pack things ... pretty much a lucky dip pack of 'cards' which can be players, contracts, skill upgrades, managers, coaches .etc etc.

and then there is the trade market where you can put your players ,and staff up for auction, or trade.


as any one who's played it ... it become addictive .... i think i'm a average player, at 1st i promised myself never to buy a pack and 'earn' all my ponts ... but i'm not asshamed to say that in the end it almost became pay per play, for me.

i mean no matter how good you are ..you tend to play other teams who are the same star rating ..and unless yr wining at a really good % ..it's fucking hard to hold on to yr team ..and you WANT to hold on to those players ..after investing maybe real money into training them up.


even with all those other FREE modes fifa has to offer ....i found myself almost exclsuisivly playing UT . fucked up.


so yeh you can win your way to points, buy yrself a great team by buying a ton of card packs off psn/XBL .... but to keep that up you'll be paying a shitload. not cheating imo .... but i'd say winning yr way there will give a lot more satisfaction ..and save yrself a lot of real $$$ ...if not time. which i don't have a lot of these days, job and all.
 
actually fifa10's be a pro mode this year does a similar thing .... you can slowly, SLOWLY grind your player stats up ..... or you can go to the fifa store and buy performance boosters. which i guess get you unlocking skills faster ...

i would LOVE to know what kinda money EA make off owners of FIFA 10 , who have internet connections.
 
Deku said:
It does strike me as being kind of ironic that Facebook's Farmville and -ville games in general are being used as an example for how the hardcore titles should monetize game content to become profitable, because the $10 price bump in games this gen wasn't enough. Farmville's audience, play requirement (a few minutes a day), and theme probably has more in common with Animal Crossing , Rune Factory, Harvest Moon than anything you might expect hardcore.

Also, if we parse what Rubin said initially before launching into his big pitch for Microtransactions, he started by saying that hardcore games had gotten too big, too long and developers were giving too much away to consumers with games that 'never end'. I don't think many people here, especially those who regarly rage against casual games would like the idea of less content, and shorter games or games with 6 hour solo campaigns and monthly on-line subscriptions.

Wasn't long ago that optical disc meant prices came down. Now we're basically re-entering cartridge pricing. $70 games next-gen with DLC mission packs, micro-transactions and monthly on-line fees?
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$60 is my absolute max. $50 was already pretty hard to justify for a side hobby, but $60 was where they hit their limit. I'm a huge gamer and even I would feel like an idiot paying anything in the $70 or more range for a non-special edition video game.

Video games are already seen as a fairly niche medium and those kinds of prices would completely drive off the mass consumer. What video game companies should be trying to do, is get the price down so that the industry as a whole is more affordable and mass consumer friendly. So that at some point, games will be enjoyed by an audience as wide as the film industry and other entertainment mediums.

Despite the fact that films cost far more to produce than games, I can go to see a movie at the theater AND buy the DVD for less than half the cost of a video game.
 
templeusox said:
I'm still very agnostic on this point. I think publishers and investors are still short-sighted on how an extended console generation would work to off-set R&D costs down the line. I also think that the financial crisis which hit as this generation started to get its legs had a justifiably huge effect on how patient investors were with the bottom line.

I think there is just some back luck involved, but I don't think the HD generation had an unsustainable business model going in.
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I think the idea that costs go down the longer a generation lasts is a false one, and hasn't proven to be true at all over the last few generations.

You've go to think of it like this: every year, standards and expectations are raised. This is the problem with 'core' development. You can't release a launch game now and get away with it.

Think of a game like Bioshock 2. Logically it should cost less than Bioshock 1, right? I mean, they've got the engine, they've got some art assests, they know what they're doing. But, I'm pretty certain it cost more. They had to add a multiplayer mode, because the expectations have shifted from 2007 to 2010.

It's the same with a lot of games. Want to make a 3rd person shooter? Has to have better cutscenes than Uncharted 2. Want to make an online shooter? Don't forget all the features that Modern Warfare 2 made standard.
 
Dan Yo said:
$60 is my absolute max. $50 was already pretty hard to justify for a side hobby, but $60 was where they hit their limit. I'm a huge gamer and even I would feel like an idiot paying anything in the $70 or more range for a non-special edition video game.

Video games are already seen as a fairly niche medium and those kinds of prices would completely drive off the mass consumer. What video game companies should be trying to do, is get the price down so that the industry as a whole is more affordable and mass consumer friendly. So that at some point, games will be enjoyed by an audience as wide as the film industry and other entertainment mediums.

Despite the fact that films cost far more to produce than games, I can go to see a movie at the theater AND buy the DVD for less than half the cost of a video game.
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Have you been living under a rock for the last 4 years?

Video games can no longer be described as a 'niche medium'. They are incredibly popular and more accepted than ever.
 
I can see how to make it work in single player games

sonic unleashed: pay $15 to skip all wearhog sections

NMH: why grind for money when you can unlock boss fights with real money!

wind waker: pay $10 to automtically get all triforce pieces (with extra $50 FOR DLC boss fight against tingle)
 
legend166 said:
Have you been living under a rock for the last 4 years?

Video games can no longer be described as a 'niche medium'. They are incredibly popular and more accepted than ever.
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Yet still no where near the popularity and acceptance of any of the other entertainment mediums.
 
Dan Yo said:
The average Wii owner only owns Wii Sports.
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avatar.jpg


Shepard, I really loved you in ME1 and ME2 but now you are just delirious.
 
Dan Yo said:
Yet still no where near the popularity and acceptance of any of the other entertainment mediums.
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In dollar terms, they're very close.

Games like Wii Sports, Mario Kart Wii, Guitar Hero/Rock Band, Brain Training, etc have entered the social consciousness and are very much accepted across a large variety of demographics. The Wii and DS have brought in older and female gamers like no ones business.

I mean, I'm going to assume your definition of 'popularity and acceptance' relies entirely on popularity and acceptance of games you like you play, judging by your previous posts and comments on the Wii. But that's not how it works. Saying video games aren't accepted because no one bought Demon Soul's is like saying films aren't accepted because no one saw Death Race.

Obviously video games still have work to do, but in comparison to films and music, it's a very young industry.
 
legend166 said:
In dollar terms, they're very close.

Games like Wii Sports, Mario Kart Wii, Guitar Hero/Rock Band, Brain Training, etc have entered the social consciousness and are very much accepted across a large variety of demographics. The Wii and DS have brought in older and female gamers like no ones business.

I mean, I'm going to assume your definition of 'popularity and acceptance' relies entirely on popularity and acceptance of games you like you play, judging by your previous posts and comments on the Wii. But that's not how it works. Saying video games aren't accepted because no one bought Demon Soul's is like saying films aren't accepted because no one saw Death Race.

Obviously video games still have work to do, but in comparison to films and music, it's a very young industry.
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In dollar terms, yes they are very close...... except we were not speaking about dollar terms.

For the record, the Wii Sports comment was supposed to be a funny that was apparently too dryly delivered. I figured the comment I quoted would be enough to give it away.
 
Dan Yo said:
In dollar terms, yes they are very close...... except we were not speaking about dollar terms.

For the record, the Wii Sports comment was supposed to be a funny that was apparently too dryly delivered. I figured the comment I quoted would be enough to give it away.
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My apologies then.
 
the thing is, with farmville, thei target audience is the kind of person who doesn't mind that other people pay to get ahead, while when it comes to more hardcore games, people who just play better get accused of cheating and players quit games and give bad feedback etc... when people can actually pay to get better stuff, that will just multiply the situation to where people rage quit more often and generally affect the experience of the total player population even more, causing more and more people to play a 'fair' game instead of the game where you 'buy your way to the top'
 
Kittonwy said:
The show isn't exactly a discussion of what should or could happen in the industry, because all these things are already happening. Games are farmed to third-party work-for-hire devs, games are farmed to cheaper lower tier internal devs, games are farmed to cheaper countries, gamers are getting nickeled and dimed, DLCs are basically a given, EA is selling in-game dollars and in-game items, and even early access to certain MP modes through early pre-orders before retailers have to discount to move inventory.

The industry is already slowly adapting and compensating, and consolidating, the biggest question is whether the industry would be foolish enough to let one of the console makers start next-gen and basically up the development costs to even less sustainable levels. THAT's the biggest threat to the industry.
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somethings gonna give, i dont see the industry sustaining itself, its almost become too costly to make "blockbuster" games now.

PS2 level assest -> next gen level assests seems to be the tipping point?
 
They were having a heated debate and Geoff Keighly screwed it all up by interrupting too much. Way to go.

I think Rubin is wrong. And he shouldn't be comparing what is going on on facebook to what is going on on the consoles.
 
In my opinion developers need to be looking towards the Eastern Europe and Russian PC market for ways to have success. These developers are able to put out good looking games on tiny budgets compared to what most developers spend.

Take a game like Drakensang for instance. It came out in Germany in 2008 and there was an English version released early last year. The game is similar to something like Dragon Age only based on a German pen and paper game. They managed to put out a game of that scope on budget of only €2.5 Million and sold over 100K copies in Germany alone. It was a huge success for them and the prequel is out this month over there.

The idea is that you do not need to spend 20 million to have success. Not every game needs to be the Avatar or Titanic of games. There is just not enough room in the marketplace for every game to be that big. Continuing the movie example, plenty of movies are released each year with extremely low budgets that do not need to be huge blockbusters to be successes. (taking a look at a recent box office chart for example the movie Daybreakers had a budget of 20 million and made 30).

Now granted movies have multiple revenue streams beyond theaters to add to profits, but the way games are sold today could be adjusted to mimic it somewhat. These days a new game that is not a megahit will have prices slashed to clear shelf space in a manner of weeks. Perhaps the industry is to hasty in slashing prices at retail. (and I know this is the nature of retail to a degree) Imagine you have a smaller game that releases at a $60 pricepoint, It sells decently at first and then slows down. Instead of slashing the price the second it slows, let the full price sales trickle for a longer period of time, say 3-6 months, before you do a big price drop on the game. Nintendo does this better than anyone in the Industry. They just do not drop the price of games unless they have to and they have great success selling copies of games at full price months after the release window has come and gone.

Just a few thoughts, but the Industry for sure needs to get away from every release needs to be a massive hit, and focus more on smaller games that are easier to recoup the cost. As sequel driven as the industry is, what was a small success could grow as sequels are released.
 
Zhengi said:
What about the current model that has been supporting the industry for nearly 20 years?
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Perhaps I should have used the phrase "no single model can support all games", as the idea of supporting an industry is as much based on context as it is on any innate qualities of that model. In any case, the current model has become increasingly inadequate for supporting the current gaming environment.

It has certainly been working for companies like Nintendo and others that have invested wisely. You know, those companies like Square Enix and Capcom who have invested in other areas like Dragon Quest IX and Monster Hunter PSP games.
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And yet, as this generation has shown, the current model (that is, of selling your game for $X up front and hoping it does well) doesn't seem to be working out for most developers.

Which leads to the burning unasked question, what the heck are 3rd parties doing wrong that they can't earn a profit this generation when this was not a problem in previous generations?
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Used the wrong business model by inflating costs to an unsustainable level?
 
The Faceless Master said:
the thing is, with farmville, thei target audience is the kind of person who doesn't mind that other people pay to get ahead, while when it comes to more hardcore games, people who just play better get accused of cheating and players quit games and give bad feedback etc... when people can actually pay to get better stuff, that will just multiply the situation to where people rage quit more often and generally affect the experience of the total player population even more, causing more and more people to play a 'fair' game instead of the game where you 'buy your way to the top'
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Maybe because there's a difference between Animal Crossing : now Online and Shooter : Modern Warfare?

I find it very funny that it is just now that they're finding their business model unprofitable, it's like they have the most shitty market research ever.
I can't stop thinking that if this was in any other sector half of the company would have been dead for a long time.
 
So...
Geoff: "Lol, lol find out next time how people are losing their jobs in this industry(giggle) and with developers closing down(laughs) how will it affect you as a gamer(smile)!"

And:
So Jason Rubin thinks they can 'save' the gaming industry with the return of shareware. Mark Pacini was right, this shit will crash and burn in 2011.
 
DrPirate said:
I've said it before, and I'll say it again.

Pachter is my favorite gaming personality, and the only opinion I find really worth listening to.

Don't let the haters get to you.
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this!

geoff pretty awesome 2
 
I have yet to hear an idea from a developer or a publisher that I don't see as being bad for the consumer. Bottom line is they want to give you less and you pay more.

Given the ramp up of whining we have heard the past two years I think this is actually about fallout from the economic meltdown, games were given the 'go' during good times and then released during bad times. They need to focus on fewer games but higher quality and then episodic value priced DLC if they absolutely have to. Value priced meaning a dollar/hours of play ration proportional to the original game, not 15 bucks for 2 hours of content.

All of these ideas they keep throwing out there, more shit DLC, banishing the used and rental markets, pay as you go chapters (fuck this by the way) etc are going to lead to a crash.
 
I can not get episode 2 to work. It plays about 15 seconds before just stopping. I have given it plenty of time to load up before hitting play. I also normally do not have issues with GameTrailers.com. Anyone else having problems getting episode 2 to work?
 
Dorrin said:
I have yet to hear an idea from a developer or a publisher that I don't see as being bad for the consumer. Bottom line is they want to give you less and you pay more.
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...That's the ideal strategy for every business. Welcome to the world of economics.

The reason that people like Rubin are pushing so much for monetizing individual elements of games is because it's the most exact way you can segment the market. You're getting exactly as much money as you possibly can out of each individual consumer, which in general would work better than charging a flat rate that drives some consumers away. People that want to get their full game experience can still ultimately pay the 60 or whatever dollars just like they do now, but that allows them to also snare the people that only want to experience a little bit for five or ten bucks, or twenty, or thirty, or wherever their individual threshold lies.

From a business perspective it's a sound model, but it does rather harshly remind gamers that their hobby is a business, moreso than other media.
 
I have to say that it's surprising to see people project blanket ideas about how the future of the industry will evolve. Especially the idea of all games going to a specific model.

Games will evolve in all directions. There will be more experimentation with digital distribution and episodic content, but there will ALWAYS be the giant megaton titles that people dish out full price for a physical copy. People like to own things tangible.
 
leave it to the gaming industry to make everything more complicated than it should be. Christ, reading through this thread we'll prolly end up with 60 dollar games, with advertisements in the loading screens, paid dlc, subscription multiplayer and a chance to pay more to level quicker. Fuckin' beautiful
 
fizzelopeguss said:
leave it to the gaming industry to make everything more complicated than it should be. Christ, reading through this thread we'll prolly end up with 60 dollar games, with advertisements in the loading screens, paid dlc, subscription multiplayer and a chance to pay more to level quicker. Fuckin' beautiful
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All of this has happened. =P

The industry is just simply eating each itself alive day by day. It is honestly fascinating to watch. They have turned gamers into locusts and they just can't keep up with the monsters they have created.
 
sun-drop said:
actually fifa10's be a pro mode this year does a similar thing .... you can slowly, SLOWLY grind your player stats up ..... or you can go to the fifa store and buy performance boosters.
Click to expand...

Virtual steroids?
 
Perhaps what could be experimented with is some sort of menu/bundle pricing scheme...For example, if a game has single player and multiplayer. Sell SP or MP alone for $40, and the complete package for $60. And hell toss in all the collector editions to capture the highest demand consumers.

Of course that method is risky. For instance, someone's willingness to pay for MW2 may be $60, but they only care about the multiplayer so they only buy the $40 version. The publisher would be giving up $20. You could say "than just increase the price on the smaller packages so that the high demand consumers buy the expensive one", but that is kinda the whole issue. Finding that right balance is extremely difficult, and can vary immensely depending on the game and the buyer.

It may be worth trying on some games though.

Putting games into tiny chunks, or free to play, would similarly be a more dangerous model. People will only buy what they want, which will likely be less than their willingness to pay.
 
Tylahedras said:
If World of Warcraft was a 60$ game that was free to play in perpetuity I might buy it. I don't because it's not, and that's money they've lost, meanwhile they make a fortune on the people that do.

They are welcome to make that trade off, but there's only one game that's done it successfully, and take note that it's basically completely taken over it's genre. I will not be paying monthly fees, any publisher that goes that route with any genre will lose my money and someone who doesn't will gain it.

I have a feeling I'm not alone in that. See let COD: MW3 be pay to play, I'll just play Battlefield BC3 instead.
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This.

There are too many substitutes for a console shooter to get away with this imo. As soon as COD tries it then everyone will just flock to something else.
 
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