Battle Royale For The Holiday

It's shaping up to be one of the most competitive holiday seasons ever for the game business. The aging Xbox 360 and PS3 have been seeing fading sales numbers for the past several years, and at this point only price cuts are likely to make a big difference in their sales picture. Complicating this is the new Wii U, which will be coming this fall (though the date and price are still unknown as of this writing). Microsoft and Sony will probably try to undercut the Wii U pricing, and certainly bundle in extra value in software and other items.

Meanwhile, the flank assault of the mobile market is adding some serious firepower. Google's Nexus 7 tablet is a hit at $200, and Amazon will probably introduce a new, spiffier Kindle Fire next week at the same price point. Apple is rumored to be introducing an iPad Mini at around the same form factor in the $250 price range. So, powerful gaming tablets will be available for around $250 this holiday, with extensive marketing budgets to make sure everybody knows it. Those will be aiming squarely at the dollars parents might otherwise spend on consoles.

Don't forget there's a new iPhone coming out next month, which will likely suck a lot of money out of market for gadgets. Plus some dedicated gaming tablets (Android based) that may have wide distribution. Oh, and Nintendo is still selling the 3DS and Sony is still trying to move the PS Vita. And all of these things are hovering in the same price range.

They're not all going to succeed in having a terrific sales season. I think Sony and Microsoft could take a real beating if they don't lower their prices substantially. Nintendo could be in for a rough time if the price the Wii U at $299 or even $279. I'm sure Apple and Google and Amazon will do fine, though.

Just to make matters worse, many high-profile software titles will be competing for consumer dollars, too. And like last year, they will be competing against each other for ever-scarcer consumer dollars. Nobody is going to buy all of the hot games all at once, even if they want them; they can only really play one game thoroughly at a time. Somebody's gonna be disappointed in their sales picture.

Overall I expect the year will finish down over last year's sales, once again in the double digits despite the Wii U and PS Vita.

Nintendo vs. Apple PR Battle

You can find the original image here.

File this under Marketing Mistakes: Nintendo has scheduled a big press event in New York City for September 13, where they will (apparently) reveal the Wii U's pricing and availability date for the US. They'll also be showing off software and allowing hands-on time, and Reggie Fils-Aime will be headlining the event. Sounds great, right? Build some excitement for the Wii U launch, get the attention of the mass media, get big coverage of Nintendo's exciting new technology coming out later this year (probably November). What could possibly go wrong?

Try this: Apple is going to have a big announcement on September 12, according to rumors leaked to all the major publications. They will be announcing the new iPhone, and quite probably the brand-new iPad Mini (or whatever they call it), a smaller iPad with a price point rumored to be as low as $249 for starters. And maybe even an Apple TV (or iTV).

Yes, the day before Nintendo's big press whoop-te-do, Apple is holding their major press event for the next iPhone and the new iPad Mini. So who do you think will get all the media attention, especially the mass media outlets on TV, print, and online? Yeah, that's right. The company with the products that sell in the hundreds of millions. Which is not Nintendo. Epic Fail.

Just to really rub it in, the rumored price point of the iPad Mini is $249 for the low end model, and the Wii U may be priced at $299, or perhaps $249 if they are being aggressive. So Apple's device may be the same price point as the Wii U, and look like the Wii U gamepad controller... only Apple's device can go anywhere and still function. I could not have created a better scenario to stomp Nintendo's press announcement flat. There will probably be head-to-head comparisons between the devices, and Nintendo won't exactly win those. If Nintendo even gets mentioned in the PR flurry, the pictures of people standing in line at stores to get the hardware. Does anyone expect people to be standing in line, or camping overnight, for Wii U? Yeah, I didn't think so. Oh, and the Wii U won't be arriving for (probably) a month or two after Apple's devices... which will make the Wii U rollout old news by the time anyone can actually buy one.

Certainly Nintendo is not going to have the most-talked about new tech product this Christmas... not even close. The Wii U is going to have to succeed based on its pricing and software lineup, and Nintendo's marketing spend. I'm expecting not a terrific launch for them; I expect a fairly mediocre rollout, especially if Sony and Microsoft have some strong moves (price cuts? bundles?) for the holiday. The Wii U may look better next year sometime if they can get to a reasonable price point (like $199) and have some gotta-have-it software like a new HD Zelda, or a Mario title that actually does something interesting with the gamepad controller (unlike the Mario title they showed, which looks exactly like the original Mario gameplay).

My long-term guess is that the Wii U will never find the audience that the Wii did, not on that scale. I think Bing Gordon is right; Nintendo is headed towards being a software publisher, it will just take them a long time to figure that out. They'll have to have their noses rubbed in bad financials for years first.

Once Again, Sales Are Down

It's only an approximation, but you get the idea.

The latest NPD figures show that sales in retail stores were down 20% over the same month last year; that's the combined figure for accessories, hardware and software. Software alone was down 23%. What's the outlook for the rest of the year? I think it would be an achievement if sales were only down 20% over last year... which, as you may recall, was the third straight year of declines from the high point of 2008. 2012 looks to break new ground with a solid double-digit decline.

Sure, overall the industry is doing well, thanks to digital distribution, mobile, social, virtual items, and all the rest. That doesn't help the companies struggling to transition to the new reality, though. It also bodes poorly for consoles, and new consoles in particular. Part of the decline in sales is due to the fact that publishers aren't putting out as many titles, and until (and unless) new consoles can demonstrate a renewed buying fervor for $60 games, I wouldn't expect to see the number rise. It will continue to shrink.

Some wholesale rethinking of game designs needs to take place. The industry has chased the rabbit called Better Graphics down the rabbit hole for three decades now, and it's still the guiding force for big publishers. Unfortunately it continues to get more expensive to deliver better graphics, and that usually comes at the expense of innovative game mechanics and good, balanced game play. Maybe we should rethink the idea that all customers want is better graphics.

I submit Minecraft as evidence that killer graphics are not a requirement to become a hit. Minecraft's graphics would be considered crude for the late 1980's, and yet the game has made tens of millions. Gee, maybe there's some players out there who care more about game play than graphics. Good luck trying to sell that at a big publisher.

At least with mobile games and downloadable games there are more ways than ever to get a game to market at a low cost, so we're seeing a lot of creativity. I think game players are going to have plenty of good choices ahead of them; game companies (especially big ones dependent on old business models) are going to have a tough time in the next few years.

As for me, I've got a design I've been working on that the world may be ready for...