tag:blogger.com,1999:blog-36482875059366269002024-03-13T01:19:18.339-07:0020th Level MarketingGame Marketing Tips, News, and AnalysisSteve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.comBlogger664125tag:blogger.com,1999:blog-3648287505936626900.post-66935687143711708052020-12-31T12:05:00.009-08:002020-12-31T12:05:46.381-08:00Game Industry 2021 Vision<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9e3YcbDaHX-X7bb69WlDLoIsSId7SUJuuGaaOYAnBi_7gxiF3HdluTAcw6otzfAlxSMZ-oEDx9F8j_yRoE-XftGcmJCwOnWGOP8K663sm04WMYKdMXxbEhGXYHtK_RuoFPOIW7nHL4Mk/s1200/gaming-history-revenue-1200px-up2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="641" data-original-width="1200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9e3YcbDaHX-X7bb69WlDLoIsSId7SUJuuGaaOYAnBi_7gxiF3HdluTAcw6otzfAlxSMZ-oEDx9F8j_yRoE-XftGcmJCwOnWGOP8K663sm04WMYKdMXxbEhGXYHtK_RuoFPOIW7nHL4Mk/s320/gaming-history-revenue-1200px-up2.jpg" width="320" /></a></div><div class="separator" style="clear: both; text-align: center;"><i>See the history of gaming revenue <a href="https://www.visualcapitalist.com/50-years-gaming-history-revenue-stream/">here</a>.</i></div><p class="MsoNormal">A new year lies ahead of us, and everyone is looking for the year
to be a better one than 2020 has been. The pandemic still rages (over 1.8
million deaths worldwide and nearly 350,000 in the US as of this writing) but
vaccinations are beginning, and we can see a time when life begins to return to
normal later this year. I hope everyone stays safe and has a better year in
2021 than they did in 2020!</p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in;"><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">First, I’ll look at some stats for the games industry in 2020;
then I’ll make some predictions for the games industry in 2021, and finally, I’ll
look over my predictions for 2020 and see how well I fared in prognostication.</span> </p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in;"><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Overall, 2020 was a banner year for games due to the pandemic
lockdowns, which kept people inside looking for something to do. For many of
them, that was gaming. Early forecasts for the games industry were $159.3
billion, but in November Newzoo raised their estimate to $174.9 billion for the
entire year, up nearly 20% over 2019. Mobile gaming leads the way with $86.3
billion, followed by console with $51.2 billion and PC games at $36.9 billion
(the rest being from miscellaneous categories like XR/AR/VR and cloud gaming).</span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in;"><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Where will the industry go from here in 2021? Higher still, but
don’t expect the same level of growth. New consoles are off to a strong start,
as are the latest PC graphics cards – all are in short supply due to both
demand and supply chain issues from the pandemic. Those issues will take months
to iron out completely, so it may be a while before you can just buy a new
console or one of the latest graphics cards and expect to have it right away.</span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in;"><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">On to some predictions for the 2021 games industry:</span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: normal; margin-bottom: 0in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">1)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Games industry growth continues,
but at a slower pace.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> I expect we’ll see
somewhere around 10-15% growth in revenue, depending on how the pandemic
continues. Of course, this won’t be evenly distributed among companies or
sectors, but in general it will b a good year for games.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-bottom: 0in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">2)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Digital stores will be taking
a lower percentage of revenue in general.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> This has
already started with Apple lowering its fee to 15% for publishers whose revenue
is less than $1 million annually… which is about 98% of all the app publishers.
So far, other digital stores have not followed suit, but I expect Google might.
Steam will probably hold out the longest, and I don’t expect them to make a
change in 2021 or any time soon after that, unless and until they really start
seeing their revenues fall or publishers stop distributing games through them.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-bottom: 0in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">3)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Indies will have a good
year.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> Certainly those indies who
publish iOS games will be getting twice as much money, which can’t hurt. Also,
more attention will be paid to indies through things like Apple Arcade and
other game subscription services, which should mean more revenue.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-bottom: 0in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">4)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Games subscriptions will
continue to grow strongly</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">. Microsoft’s Game Pass is
doing well, and represents a strong selling point for the new Xbox Series X and
Xbox Series S. Google’s Stadia seems to be getting a bit of traction finally. There
are plenty of companies offering a variety of subscriptions: EA, Sony, Utomik, Ubisoft…
there’s plenty to choose from, and there will be more.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-bottom: 0in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">5)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Game streaming will grow,
and evolve.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> More and more people will watch
games being played, and the entire process will continue to change. Already
some games are including a “streaming” mode to get around copyright problems
with music. More games will be built to take streaming into account, and how
streamers interact with their audience will change as well.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-bottom: 0in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">6)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">AAA games will continue to generate
huge revenue, but also big problems for publishers.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> Look no further than Cyberpunk 2077 to see the future, a massive
game with massive problems that was rushed out too soon. They’ll get the
problems fixed and the game will end up being one of the biggest sellers in
2021, but it’s emblematic of the problems publishers face. Just trying to
implement 4K textures will make development cost more and take longer… and
open-world designs cause huge amounts of content generation, and are difficult
to debug. These big games will get bigger and more expensive to make, but they
will also generate even more revenue… if successful.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: normal; margin-bottom: 0in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">7)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">User-Generated Content
(UGC) will be ever more important in games.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> Look at
how Roblox and Minecraft continue to absorb huge amounts of time, and generate
massive revenue. Sure, those are aimed at kids, but now look at Manticore Games’
Core engine, which is providing a wide audience with the tools to make all
sorts of gaming experiences. I expect giving users the power to create or
modify their games will be even more popular, and lead the way to more industry
expansion.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in;"><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in;"><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">So, how’d I do with predicting 2020?<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in;"><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-indent: -.25in;"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">1) The games market
will continue to grow. </span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Yeah, that was a gimme, but
I really nailed it! 100%.</span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-indent: -.25in;"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">2) Both the PS5 and
the Xbox Series X will sell, but not in significant enough numbers to be a good
market – but that’s not important.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> They
have sold well, but constrained by supply and late in the year – so not very
many units are out there. But they’ve helped console game sales grow, and drawn
great attention to the segment. 100%.</span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-indent: -.25in;"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">3) Esports will
continue to provide enjoyment for fans and disappointment for investors.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> The pandemic <a href="https://ecentralsports.com/five-ways-the-global-esports-landscape-shifted-in-2020/">helped
esports</a> by cancelling much of traditional sports, but it’s still not clear
that investors benefitted yet. More ad dollars are flowing into esports, viewership
is up, but the ROI is still not quite there yet. 80%.</span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-indent: -.25in;"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">4) Streaming games
and the streaming game market will continue to underperform.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> Still not there yet, but getting better – that’s the story
of 2020. 100%</span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-indent: -.25in;"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">5) Game
subscriptions will do well – with the right content and features.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> Apple hasn’t released figures on Apple Arcade, and none of
the other subscription services have either. So it’s really hard to tell how
well they are doing. 75%.</span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-indent: -.25in;"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">6) 4K gaming will
be used to sell hardware, but it really won’t be significant – no
billion-dollar games will be 4K only.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> So
far there are no 4K exclusives – versions of games optimized for 4K, yes, but
they are also on non-4K systems. 100%.</span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-indent: -.25in;"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">7) Watching people
play games will continue to grow in popularity</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">. Another easy one. 100%.</span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-indent: -.25in;"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">8) E3 will continue
to shrink, while true consumer-oriented conventions will grow.</span></b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> Missed this one depending on how you count it. E3 2020 was
cancelled, and though they claim it will be back, it’s hard to see why. Other
game conventions/conferences were cancelled or moved to online-only shows. So
E3 shrank to nothingness, while consumer shows shrank. 50%.</span></p>
<p class="MsoNormal"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Overall Score for 2020
Predictions: 88%.<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span style="color: black; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Happy New Year!</span></b><span style="mso-bidi-font-family: "Times New Roman";"><o:p></o:p></span></p>Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-28827803165975670582020-01-21T13:50:00.000-08:002020-01-21T13:50:13.594-08:00Games Industry 2020 Vision<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFAFBAHfSIJM9R1yFH8VTYKdMX2b4gf2hXHY8E4LvbI4UGqbaeYmMzr0J-_RJRYBEqQEXx4v831ymb0aZD10M9WKnXLrCPpMdlT33Asf9ef8Tfv3xcQN2GoNNRmREYOekUtSmviEcqhuM/s1600/3483683-11-things-that-will-definitely-happen-promo-thumb.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="720" data-original-width="1280" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFAFBAHfSIJM9R1yFH8VTYKdMX2b4gf2hXHY8E4LvbI4UGqbaeYmMzr0J-_RJRYBEqQEXx4v831ymb0aZD10M9WKnXLrCPpMdlT33Asf9ef8Tfv3xcQN2GoNNRmREYOekUtSmviEcqhuM/s400/3483683-11-things-that-will-definitely-happen-promo-thumb.jpg" width="400" /></a></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<span style="color: black; font-size: 13.5pt;">I like to take some time at the end of each year to look ahead for
the games industry and predict the important trends. As a bonus feature I’ll go
over my predictions for last year.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<span style="color: black; font-size: 13.5pt;">Some stats for 2019 to chew on: The global games market will
likely reach over $152 billion in revenue, with the US being the largest market
(at $36.9 billion) and mobile games the largest segment ($68.5 billion
worldwide).<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<span style="color: black; font-size: 13.5pt;">What’s going to happen in the games industry in 2020? As you might
expect, it will continue to grow. The growth will be uneven, of course, with
some companies doing very well and others not so well. The biggest and oldest
publishers will find it hard to grow significantly, as they mostly rely on a
few proven brands and have very few new titles. The mid-range publishers like
Riot Games and Epic Games will have more potential for some breakout hits while
their mainstay games will continue to generate immense revenue.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<span style="color: black; font-size: 13.5pt;">A continuing issue that doesn’t get much open discussion is the
difficulty many publishers have in creating games profitably. Notably, a number
of companies are shying away from single-player games because they don’t easily
lend themselves to microtransactions. Why buy a slick costume for your
character if you’re playing a game by yourself? And yet single-player
experiences are compelling, and the top games can generate a lot of revenue and
attention (see <i>God of War</i> or <i>Death Stranding</i>, for instance).<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<span style="color: black; font-size: 13.5pt;">The tough task here is to make a single-player game that looks
great, plays great, has a depth of story and great polish… and that doesn’t
cost far more to create than it seems likely to bring in. This is the reason
Telltale Games failed – they made beautiful games that sold pretty well and
garnered many awards, but they worked their staff beyond reason and ultimately
couldn’t make a profit. I hope the revived company can figure out where and how
the costs grew out of control, and figure out how to make story games that will
sell and at the same time generate a reasonable profit for the company, all
while letting the creative staff leave the office after a mere 8 hours of work.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<span style="color: black; font-size: 13.5pt;">We’ll continue to see strong brands extended, as that’s a clear
path profit. There’s going to continue to be new <i>Call of Duty </i>titles,
and you don’t have to see an announcement to know there’ll be a new <i>Call of
Duty</i> coming this fall. Now, though, we’re getting <i>Call of Duty</i> on
mobile – and it quickly hit a hundred million downloads, which shows the power
of a strong brand. Look for other major game brands to be extended into new
platforms and game genres. Riot Games, for instance, is extending its powerful <i>League
of Legends</i> IP into a number of other genres with the help of other game studios.
It’s impossible to say right now how well those games will do in the long run,
but the one thing you can be sure of is they’ll see a lot of downloads very
quickly because of the massive number of <i>League of Legends</i> fans.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<span style="color: black; font-size: 13.5pt;">There will probably be some acquisitions during the year, and some
surprise hits. Ultimately, though, more gamers will be playing more games and
spending more money, and more people will be spending time watching people play
games. This cultural force will continue to grow in power and influence.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<span style="color: black; font-size: 13.5pt;">And now, some specific predictions for the 2020 games industry.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><b><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">1)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">The games market will continue to grow.</span></b><span style="color: black; font-size: 13.5pt;"> It’s an easy thing to see, but gaming continues
to reach more people worldwide, and the growth shows no signs of stopping yet.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><b><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">2)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">Both the PS5 and the Xbox Series X will
sell, but not in significant enough numbers to be a good market – but that’s
not important.</span></b><span style="color: black; font-size: 13.5pt;"> Why won’t
their sales be important? Because both Sony and Microsoft will be making their
profit not from the hardware (which likely will, at best, show a small profit,
and perhaps lose money on each unit at launch) but from the software – and both
the new consoles will be backward compatible. Their launch should get people
playing console games more, and buying more console games – and buying more
game subscriptions. <o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><b><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">3)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">Esports will continue to provide enjoyment
for fans and disappointment for investors.</span></b><span style="color: black; font-size: 13.5pt;"> Not every esport is continuing to grow, and some seem to
have plateaued (like <i>Hearthstone</i>). There’s plenty of investment, but
it’s going to be a while before big profits arrive – and they won’t be evenly
distributed. Changes to games may help strengthen their esports appeal, or they
may weaken it. It’s still an open question as to whether any of the current
esports will even be played in ten years.<o:p></o:p></span></div>
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<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><b><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">4)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">Streaming games and the streaming game
market will continue to underperform.</span></b><span style="color: black; font-size: 13.5pt;"> Google’s Stadia is still trying to find the right features to
appeal to a mass audience, but it’s not clear at all if it ever will. It’s one
of those ideas that sounds appealing to executives who don’t know much about
the details – but it’s those technical details that have continued to trouble
every streaming game service that’s come out, and there have been more than a
few.<o:p></o:p></span></div>
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<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><b><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">5)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">Game subscriptions will do well – with the
right content and features.</span></b><span style="color: black; font-size: 13.5pt;">
Apple Arcade is a good example of the right offering in the right market, and
it will grow strongly. This service is only $5 a month, and your whole family
can use it – and we’ll likely see it get bundled with other Apple services in
the future. It’s a great value, and that’s what a subscription game service
needs to have if it’s going to succeed.<o:p></o:p></span></div>
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<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><b><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">6)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">4K gaming will be used to sell hardware,
but it really won’t be significant – no billion-dollar games will be 4K only.</span></b><span style="color: black; font-size: 13.5pt;"> We’ll hear a lot of hype about 4K – it
will be mentioned in lots of marketing – but still 4K TVs do not have huge
market share, and 4K monitor are even less popular due to their pricing. This is
all changing, but not as swiftly as some would have you believe.<o:p></o:p></span></div>
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<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><b><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">7)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">Watching people play games will continue
to grow in popularity</span></b><span style="color: black; font-size: 13.5pt;">. The
popularity of game viewing continues to rise, but it’s not all evenly
distributed. Top streamers are finding lucrative deals to change platforms, so
Twitch has lost some of its top attractions. Meanwhile, Twitch is expanding
into non-game areas. Talented streamers will be more sought-after than ever,
but growing an audience from zero to ‘big enough to make a living’ will get
even more difficult.<o:p></o:p></span></div>
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<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><b><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">8)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">E3 will continue to shrink, while true consumer-oriented
conventions will grow.</span></b><span style="color: black; font-size: 13.5pt;">
Sony’s leaving E3 again this year just underscores how unimportant E3 has
become – Sony clearly feels it doesn’t need E3 (and the expense, and the
hassle) to have a successful new console launch. And if Sony doesn’t need E3,
does anyone else? You can bet that’s the question each exhibitor is asking,
along with “if we took the money and time we spend on E3 and spent it
elsewhere, would we get a better return?”<o:p></o:p></span></div>
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<b><span style="color: black; font-size: 13.5pt;">Last Year’s Predictions<o:p></o:p></span></b></div>
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<br /></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><i><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">1)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></i><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">The market for games gets bigger.</span></b><span style="color: black; font-size: 13.5pt;"> Yeah, that was an easy one, but it’s good
to start with a win. <b><i>100%.</i></b><i><o:p></o:p></i></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">2)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">Games will be increasingly scrutinized and
regulated by governments around the world.</span></b><span style="color: black; font-size: 13.5pt;"> Another fairly easy prediction to make, and we have seen
more restrictions on loot boxes and China’s more strict approval process for
games. <b><i>90%.</i></b><o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">3)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">The Digital Store Wars get into high gear.
</span></b><span style="color: black; font-size: 13.5pt;">Well, there’s still a
battle going on, but some of the combatants (like Discord) have stopped
fighting. Epic and Steam keep going on, with more effort being put into
marketing… but the fighting hasn’t gotten as bloody as it could have. <b><i>70%.</i></b><o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">4)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">Mobile games will continue to grow
strongly and innovate.</span></b><span style="color: black; font-size: 13.5pt;">
Pretty much true, with more traditional categories like <i>Call of Duty</i>
coming to mobile and doing well. Growth is strong but innovation is still
underperforming. <b><i>70%.</i></b><o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">5)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">VR/AR/XR will continue to underperform.</span></b><span style="color: black; font-size: 13.5pt;"> Yep, we’re all still waiting for this to
become a major segment. It didn’t happen in 2019, despite new hardware
releases. <b><i>100%.</i></b><o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">6)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">Game streaming will continue to be a
vision, not a viable market.</span></b><span style="color: black; font-size: 13.5pt;"> Google’s Stadia launched to underwhelming reception, and it’s
still limping along. Like VR/AR/XR, lots of interest but not much in the way of
revenue or solid market reception. Yet. <b><i>90%.</i></b><o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">7)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">Indies will continue to have difficulty
making a living until they put more emphasis on marketing. </span></b><span style="color: black; font-size: 13.5pt;">This will continue to be true, though more
frequently an indie game will do very well. <b><i>90%.</i></b><o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]--><span style="color: black; font-size: 13.5pt;"><span style="mso-list: Ignore;">8)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><b><span style="color: black; font-size: 13.5pt;">Games will continue to grow as a cultural
force.</span></b><span style="color: black; font-size: 13.5pt;"> This is true, as
we see series like The Witcher become this due to the game influence, not the
novels.<b><i> 100%.</i></b><o:p></o:p></span></div>
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<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<b><span style="color: black; font-size: 13.5pt;">Overall 2019 grade: 88.75%<o:p></o:p></span></b></div>
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<br /></div>
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<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<span style="color: black; font-size: 13.5pt;">Happy New Year!<o:p></o:p></span></div>
<br />Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-5783940676530468782020-01-17T09:05:00.001-08:002020-01-18T08:03:07.554-08:002020 Implications for Game Design<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOYWUpImV261-qcCi464s-NbEVXhLHJwURrI72L3Q6GA5UKVG33RuQ6uK6YxV8HTMy_qoSMiU31mN8_VLKPQOi-QaR46hbJKQZ1njrP8Usjv4oM7N6ED-e7DpyFSiQgwCq6JJm8fASLGU/s1600/Games+%2526+money.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="531" data-original-width="1072" height="196" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOYWUpImV261-qcCi464s-NbEVXhLHJwURrI72L3Q6GA5UKVG33RuQ6uK6YxV8HTMy_qoSMiU31mN8_VLKPQOi-QaR46hbJKQZ1njrP8Usjv4oM7N6ED-e7DpyFSiQgwCq6JJm8fASLGU/s400/Games+%2526+money.png" width="400" /></a></div>
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<b>2020 Implications for Game Design</b><o:p></o:p></div>
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I was struck by an <a href="https://www.matthewball.vc/all/7reasonsgaming?">essay </a>by VC Matthew
Ball about 7 reasons why gaming will take over; stop what you're doing and read that essay, if you haven't already. It goes along with some of the
things I’ve been thinking about, in particular how to best take advantage of
the changes in the games industry and the game-playing audience. What follows
are my thoughts on each of his 7 reasons as to why gaming will be taking over
media even more in the future. You should go and read that essay, and refer to
it as needed<span style="font-family: "times new roman" , serif; font-size: 11pt;"> </span><span style="font-family: "times new roman" , serif; font-size: 11pt;">while
reading this blog post</span>. What I’ve looked at here is how I think his comments translate
into actions game developers should consider when designing games. I am already
doing this with StoryPHORCE Entertainment, and I’ll be detailing what I’m doing
at <a href="http://www.storyphorce.com/" target="_blank">www.storyphorce.com </a>in the future.</div>
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<o:p></o:p></div>
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<b>#1</b><span style="mso-bidi-font-family: "Times New Roman";">
<strong><span style="background: #f1f1ef; color: black;">The Dominant Attention
Medium, Television, Has Peaked and its Time is Being Redistributed</span></strong></span><o:p></o:p></div>
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Yes, and gaming is taking a major chunk of that time.
Perhaps more insidiously, that attention time may be split among several things
– playing a game while keeping an eye on a video on another screen, and texting
with friends on social media as well as in-game audio chat. The player’s
attention gets focused more when one of these things demands it, but there’s
usually a constant background of several things vying for attention.<o:p></o:p></div>
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<br /></div>
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What does that mean for a game you’re designing? Several
things, potentially. You could just ignore that and make the game you have in
mind, a perfectly valid choice. You could try to make the game’s experience
more intense so it keeps players riveted and less distracted – but that only
seems like a good idea if it makes the game more fun, not if it means
populating the screen with little things you need to click on constantly just
to stay alive. Or you could try to make it easy to share parts of the game with
others as you play, letting your game contribute to the larger social context
the players are often part of. Or you could make the game easy for other people
to casually jump into, so a player could invite a friend in while the game is
going on. Of course, many of these things depend on the nature of the game play
in your particular game – but it’s worth thinking about in the design phase.<o:p></o:p></div>
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<br /></div>
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What do all those ideas have in common? You’re thinking
about the player experience, their overall experience, and trying to improve it
or take advantage of it for your nefarious marketing ends. Sure, when you’re
designing a game it’s usually starting at “this is something I think is fun.”
At some point, though, you should think about what the players are going to
experience, and how you can make things the most fun for the most players. That’s
how you get a bigger, happier audience, which should lead to making more money (assuming
you’re handling the monetization of your game well).<o:p></o:p></div>
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<b>#2 Gaming is Replicating the TV Package<o:p></o:p></b></div>
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The core of what he’s saying here is that games need to be
more available and accessible to players, in several ways: Technology, cost,
complexity, information. Sure, much of the time the game you have in mind
creating is bounded by the technology required. Maybe, though, it’s worth
examining your game concept and thinking about how it might work on a wider
variety of platforms. Mobile? Tabletop? Browser? Is there a value in having a
larger audience? Sure. Just look at Fortnite, for example, with $1.8 billion in
revenue in 2019. Two-thirds of that revenue came from mobile, where Fortnite is
clearly not as good as it is on console or PC. Yet over a billion dollars came
from people playing it on mobile – because that’s what they happen to have with
them when they wanted to play.<o:p></o:p></div>
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The other value in being on multiple platforms is that it
enhances the discovery of your game. People hear about it, then want to try it…
and if it’s not on the platform they have, oh well, there’s another game to
try. And if you didn’t give them a way to try it for free? There are plenty of
other games to try that are free, and there are probably games that sound
similar to yours.<o:p></o:p></div>
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The essay points out that game subscriptions are great ways
to sample games. Sure, you think, but maybe you won’t get hardly any revenue
from your game being part of that subscription plan. You’re not thinking about
it the right way – that game you put in Apple Arcade, or that’s in the Xbox
Game Pass, that’s a marketing tool. You should have other games that are tied
into those games with explicit links, and those games you make good money on. If
you can get a game into the Apple Arcade, make it a good one… and then have a
game outside of Apple Arcade that extends that experience, or uses the
background or characters or essential game play elements in ways that practically
demand those players from Apple Arcade get your other game. And maybe that’s
for an upfront price, or you have microtransactions you can sell them.<o:p></o:p></div>
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Note also that engagement with games is now variable – many people
are just watching others play games, and they’re having fun doing that. Part of
the promise of streaming games is that you can get new players to jump in
easily – but your game design has to not only allow that, but encourage it. Is
there a way to make that happen outside of streaming games? Sure, I can think
of ways to design a variety of games that would allow people to jump in and
play, whether it’s an RTS or an RPG or a shooter. Think about designing some
limited units/characters that are explicitly for people to jump into while play
is ongoing. No, they might not have very much control, but they could have fun
without the need to learn a complex set of controls. No, it’s not something an
experienced player would like – but the idea is to get new players in, ideally
in seconds.<o:p></o:p></div>
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<b>#3 Gaming Has Unprecedented Content Leverage<o:p></o:p></b></div>
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What he’s really talking about here is UGC as well as all
the ancillary content for a game. Look, if you’re going to the trouble to
create a game, why not create one that can last for many years, and have vast
expansion possibilities, and if possible allow users to contribute to the
content? Yes, that’s all more work than just cranking out a game; but it’s less
work than cranking out two games, and it has at least some potential to be far
more lucrative in the long run.<o:p></o:p></div>
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<b>#4 Social Signals, Effects, and Reinforcement<o:p></o:p></b></div>
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Games are social media… why not internalize that as well as
enhance it externally? If your game is fun, people will want to share it with
their friends. Make it easy in the game to do that – share clips, images,
whatever is fun. Look, social media and messaging comprise 50% of all time
spent with mobile devices. Gaming on mobile is about 10% of all the time on
mobile – yet it’s about 80% of all the revenue from mobile. I see vast
potential here to make money with games on mobile.<o:p></o:p></div>
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<b>#5 Tightest Feedback Loops + Culture<o:p></o:p></b></div>
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The best games are constantly changing and adding new
things, which in turn engages their audience and encourages them to spend more
time in that game. Creator tools are important for that, of course, but even
beyond that you need to think about how to reinforce the culture of your game. Really
successful games these days have their own conventions, where people get
together in meatspace to enjoy everything about the game (BlizzCon, MineCon,
etc.) You don’t even have to set up your own convention – become part of one of
the many conventions already being held that probably include some of your
audience, and grow from there.<o:p></o:p></div>
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There should be vibrant online communities, on Facebook or
subreddits or wherever, and you need to stoke those fires with good moderators
and plenty of new information on a regular basis.<o:p></o:p></div>
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Oh, and your game should consider public data – leaderboards,
sharing successful games, showcasing players and competitions, whatever seems
to go with the nature of your game and the audience.<o:p></o:p></div>
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<br /></div>
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<b>#6 Consistent Growth Through New Devices, Categories,
Technologies, Content<o:p></o:p></b></div>
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This is crucial – keep extending your game into new areas.
Add a VR version, or maybe for part of the game. No, the market isn’t huge – but
if you can do it without great expense, it’s great press (see Half-Life Alyx). Missed
opportunity: I though it would have been cool to be playing Star Wars
Battlefront on PS4, and have a mission come up where you get into an X-wing
using your PSVR and fly the mission in VR, then drop back into the main game –
with extra experience, cool badges, recognition for that amazing service you
performed.<o:p></o:p></div>
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Cross-game integrations should be explored. Find ways for
players to move characters between games, keep DLC, maybe get some perks for
having played other games. They don’t even have to be your own games! Do some
cross-marketing here with other game companies to expand your potential
audience.<o:p></o:p></div>
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Once you start dreaming about where your game could go if
you partner with others, there’s no limits. <o:p></o:p></div>
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<b>#7 IP Kiln<o:p></o:p></b></div>
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The point here is well-taken – generate a lot of material
and some of it is bound to be good, and can be the seed for even more
successful products. You may be starting with a game, but if you do you world
creation properly you can be seeing spinoffs in the future in other media. If
there’s UGC involved, you could get an amazing amount of content. (Just be
prepared for the future IP considerations when Hollywood comes around; you
should have the legalities already dealt with far in advance.)<o:p></o:p></div>
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Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-70669813497920113552019-02-23T22:21:00.000-08:002019-02-23T22:24:38.266-08:00PlayStation 5 vs Xbox Next<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8japX9vixGpaEartEXJS-ltPeChFY9LqD2qhu7czC8m75bl6RBe12sqZxy8Q1ypaPD_EjpJb04ifNqeSvcXYXFbwqTMam1IFJJF92GCuIirGZXwHbrHE7BuTYoobF-ql7obVyx3jS_Ns/s1600/PlayStation5Mockup.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="358" data-original-width="580" height="246" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8japX9vixGpaEartEXJS-ltPeChFY9LqD2qhu7czC8m75bl6RBe12sqZxy8Q1ypaPD_EjpJb04ifNqeSvcXYXFbwqTMam1IFJJF92GCuIirGZXwHbrHE7BuTYoobF-ql7obVyx3jS_Ns/s400/PlayStation5Mockup.jpg" width="400" /></a></div>
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Or</div>
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<b>A Preview of the Next Console Generation</b><o:p></o:p></div>
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The signs and portents are showing that a new console
generation is heading towards us, sometime in the next year or so. Interestingly,
we can already describe the new consoles pretty well, given what’s been going
on in the last console generation. The exact details will remain a mystery
until launch, but knowing the general outline of the new consoles can help
everyone make their plans for the next two years, whether that’s for game
development, marketing, or just purchasing a console for personal use.<o:p></o:p><br />
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When will these consoles launch? Probably in time for the 2020 holidays, perhaps even earlier. Look for more hints over the next year, but we probably won't see a complete official announcement until just a few months before a new console ships.</div>
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First off, the most clear picture will be for Microsoft and
Sony, so I’ll deal with those in this essay. Nintendo and others (Google,
Apple, Amazon, and maybe others) will be considered separately.<o:p></o:p></div>
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Let’s start with the features that we can be nearly certain
these new consoles from Sony and Microsoft will have, along with the
justification for believing in these features. Then we’ll move onto more
uncertain features that these consoles may or may not have.<o:p></o:p></div>
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<b style="mso-bidi-font-weight: normal;">The PlayStation 5 and
Xbox Next will be X86-based.<o:p></o:p></b></div>
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Likely AMD will be supplying customized CPU/GPU combinations
to both Sony and Microsoft, which will probably have some technical differences
that may or may not make much of a difference to users (though marketers will
no doubt play them up). There’s no more custom CPUs for consoles, as game
developers are much happier with the ease of supporting PC, PlayStation, and
Xbox with essentially the same code base. Developing AAA games is difficult and
expensive enough these days without adding in the need to work on a unique CPU.
Sony and Microsoft have also saved money by not having to develop a completely
new CPU and all the software tools that would go with it. These days, AMD and
Nvidia have been pushing the state of the art for GPUs far beyond what Sony or
Microsoft could afford to do – so they will stick with what worked for them on
the current generation of consoles.<o:p></o:p></div>
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<b style="mso-bidi-font-weight: normal;">The PS5 and Xbox Next
will be 100% backward compatible with their predecessors.<o:p></o:p></b></div>
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Given that the new consoles will use the same X86 CPU as the
current generation, this one’s a no-brainer. Besides, this is of great value to
current players – your software library will work just fine on new consoles,
and possibly even better. This is important for game publishers, as they will
be able to keep selling existing games even after new consoles arrive. Of
course, there may be updates for older games to make them look even better on
new hardware – an opportunity for game publishers to re-ignite interest in
older titles and perhaps make some more money from them.<o:p></o:p></div>
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<b style="mso-bidi-font-weight: normal;">The PS5 and Xbox Next
will be capable of 4K HDR display with 60 frames per second – or better.<o:p></o:p></b></div>
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The primary selling point of these new consoles will be to
fully support the growing market of 4K HDR televisions, showing off the added
resolution that people have available. Yes, the Xbox One X can sort of hit this
mark, but not consistently. More horsepower is really necessary to take full
advantage of what 4K HDR screens have to offer. Of course, it may not be all
that much of a difference to the casual observer – but this capability will be
heavily touted as an important reason to buy a new console. This is part of why
the new console generation may not be a big sales winner, after the initial
surge of early adopters – you really aren’t going to see much of a difference
over what your old consoles could do.<o:p></o:p></div>
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<b style="mso-bidi-font-weight: normal;">The PS5 and Xbox Next
may have more than one model apiece, with different price points, but
regardless the most expensive model will not exceed $599 at retail.<o:p></o:p></b></div>
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Here we get into the realm of less certainty. Exactly how
Sony and Microsoft deal with their current consoles when new ones come out, and
whether they introduce more than one new model, is not clear. It’s likely that
both companies would want to have hardware at both a lower and a higher price
point, the way they do now – but they may see advantages in having three or
even more different price points covered. Say, $199, $299, and $399. Maybe they’ll
have cost-reduced versions of old consoles, or consoles with more limited
storage capacity. This will be interesting to watch.<o:p></o:p></div>
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<b style="mso-bidi-font-weight: normal;">Game-streaming (inbound
and outbound) will be an important part of both the PS5 and the Xbox Next,
possibly with specific hardware features designed for that.<o:p></o:p></b></div>
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Having players stream their games to the world is going to
be a more important part of consoles. Being able to take advantage of a
streaming-game service, where you don’t even have to download a game, is also
part of what console makers (and major game makers!) are dreaming of. The
phrase “Netflix for games” makes them visualize large piles of recurring
revenue. Now, there are plenty of technical hurdles to overcome, and reasons to
be skeptical that game-streaming will finally become a major profit center
(since it never has before). But game companies will keep trying, so expect to
hear more about that.<o:p></o:p></div>
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<b style="mso-bidi-font-weight: normal;">What will be more
powerful, PlayStation 5 or Xbox Next?<o:p></o:p></b></div>
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This is anyone’s guess. Really, both Sony and Microsoft can
build hardware to any power level – the question is what profit margins will
the company allow? Or will either company be willing to entertain a loss on the
console hardware in order to gain market share? Either company could decide to
sell $600 worth of game hardware for $499. That’s easier for Microsoft than it
would be for Sony, since Microsoft has well over $100 billion of cash on hand,
and Sony’s still trying to recover from its lean times of a few years ago. Who
really, really wants to have the most consoles out there? It’s anyone’s guess.
So it’s hard to say which hardware will really be more powerful – it’s not an
engineering question, it’s a financial and business decision, in the end. The
engineers will design to what the suits at the top decide.<o:p></o:p></div>
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<b style="mso-bidi-font-weight: normal;">Final Thoughts On Next-Gen
Console Wars<o:p></o:p></b></div>
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Both Sony and Microsoft have done well with current console
generation, though Sony clearly came out on top. Both companies will likely do
well with new hardware, though it’s not at all clear that new consoles will
sell anywhere near as well as the current generation has. Will Nintendo take
away the best-seller crown? Or will Google or Apple manage to create something
that actually competes?<o:p></o:p></div>
<br />Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-89424291039662713552019-02-03T12:28:00.001-08:002019-02-03T12:28:04.704-08:00Microsoft’s Bid for World Domination of Games<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgV8MqONvZvKwW7ZSh4l7KSvCmA55-6CEPJ733ndiJLh2-7N3X0MeX51m7jGFRQ5eRpt56N8e5p7MrjAyjNHE9MhgP3NoTQNDyRz2MEX2oevZT956u7UAY9gQRvL_vUVE-vDa6mOmQ_iSw/s1600/Microsoft.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="480" data-original-width="1600" height="120" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgV8MqONvZvKwW7ZSh4l7KSvCmA55-6CEPJ733ndiJLh2-7N3X0MeX51m7jGFRQ5eRpt56N8e5p7MrjAyjNHE9MhgP3NoTQNDyRz2MEX2oevZT956u7UAY9gQRvL_vUVE-vDa6mOmQ_iSw/s400/Microsoft.jpg" width="400" /></a></div>
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Microsoft is <a href="https://www.windowscentral.com/microsoft-wants-bring-xbox-live-cross-platform-gaming-android-ios-nintendo-switch-and-more">getting
ready to expand</a> Xbox Live, its gaming network/community, from Xboxes and
Windows PCs to include Android, iOS, and Nintendo Switch. This will grow the
potential market/community for Xbox live to over 2 billion devices. Notably,
this includes pretty much every major gaming platform – except MacOS (the
number of MacOS game players is minuscule) and (of course) Sony PlayStation and
their network.<o:p></o:p></div>
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It’s a smart move. Once upon a time, the walled gardens of
Xbox and PlayStation were enormous compared to any other game audience. Now,
single games like Fortnite or League of Legends dwarf the size of those console
audiences. Hardware generally is powerful enough to play most games pretty
well, perhaps with some graphics compromises that really don’t matter to the
majority of players. (Fortnite is doing extremely well on mobile, for instance,
despite the differences in controllers and graphics with consoles or PCs.) The
gameplaying audience is mostly not concerned with being fans of a particular
hardware, as they often were in days gone by – now they want to play a game
wherever they are, with whatever hardware is handy.<o:p></o:p></div>
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Microsoft is smart to recognize that, and to attempt to get
out in front and be the gamer’s network across all platforms. It’s a smart
competitive move, particularly because Microsoft’s rivals aren’t going to go
there – can you see Nintendo doing something like that? Or Sony? Sony seems too
satisfied with its market leadership, resisting all efforts to open up
(Fortnite pried them open a crack, after weeks of fan pressure).<o:p></o:p></div>
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Microsoft wants to gain market leadership, or at least
recurring subscription revenue and extensive virtual goods sales. Particularly
as the next generation of consoles looms on the horizon. Though once again, it’s
unclear whether there may be future console generations beyond this. The
biggest games are growing well beyond the platforms they began on. As billions
of people now have access to a gameplaying device, the biggest money lies in finding
the best games to reach the widest number of people – and the best business
models to monetize those people.<o:p></o:p></div>
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Microsoft sees connecting those game players together as a
great way to make money by marketing games, virtual goods, and services to the
widest possible audience. If they can get the details right, this looks like they
are correct. Grand concepts are one thing, and implementation is another. I
look forward to seeing how well Microsoft does at implementing this vision.<o:p></o:p></div>
<br />Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-74247084237771268522019-01-15T15:42:00.001-08:002019-01-15T15:42:56.019-08:00What is Bungie's Destiny?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvi_6ul67XkoWePRil4tuvGkJ4PMKdXHUpdJhDcmMAZyHUCiBZksQRIP3NpPER-hVCslCXeEtYl4mIimulFmxIUg-sgtn3UrklEXeBaMOJUtpfZGpx3PacnZMD7t10X8aa4CPA74EcUVM/s1600/bungie-activision-800x450.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="450" data-original-width="800" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvi_6ul67XkoWePRil4tuvGkJ4PMKdXHUpdJhDcmMAZyHUCiBZksQRIP3NpPER-hVCslCXeEtYl4mIimulFmxIUg-sgtn3UrklEXeBaMOJUtpfZGpx3PacnZMD7t10X8aa4CPA74EcUVM/s400/bungie-activision-800x450.jpg" width="400" /></a></div>
Now that Activision Blizzard and Bungie have parted ways, Bungie took all the rights (and responsibilities) to Destiny. Is that a <a href="https://www.gamesradar.com/what-does-bungie-and-activisions-breakup-mean-for-the-future-of-destiny/" target="_blank">good thing</a> or a <a href="https://www.polygon.com/2019/1/14/18182364/bungie-activision-split-destiny-2-items-microtransactions" target="_blank">bad thing</a>, for Destiny fans, for Activision Blizzard, for Bungie? There have been numerous opinion pieces on the subject lately, but I think many of them are missing the mark.<br />
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Let's start with what we do know from the outside. Activision Blizzard and Bungie had a $500 million contract spanning ten years for Destiny, which initially called for regular releases every couple of years supported by healthy infusions of downloadable content (DLC) that would keep the revenue flowing in-between major releases. Well, it didn't quite work out that way. The initial release sold $325 million worth in its first five days, but then things slowed down. Destiny 2 ended up at about half that level for its initial release. For whatever reason (and fans had many gripes about the game), the game never really caught fire.<br />
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Who's to blame for Destiny's below-expectations performance? Some point to game design decisions, which should be squarely in Bungie's lap; others note strong pressure from Activision Blizzard to get new material out there and to generate more revenue, which may have led to decisions about conent that had less-than-optimal results. It's impossible to know for sure where the truth lies, particularly from the outside.<br />
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Regardless, we do know that Destiny did not perform at the level that Activision Blizzard desired. One clear inference we can make from the early end to the Destiny publishing agreement is that ultimately Activision Blizzard did not feel that Destiny's prospects were strong enough to warrant fighting over the franchise. So now it's Bungie's property, for better or for worse.<br />
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Now, keeping Destiny at its current level is not inexpensive -- and either adding more content, or creating a new game (Destiny 3?) is not going to be cheap. There's a big marketing challenge, too, in convincing people who already made up their minds about Destiny to give the game another try. Putting the Destiny ship into a new, more profitable trajectory is going to be neither easy nor inexpensive. The process will take time, too.<br />
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Succeeding in revitalizing Destiny will require a clear-eyed evaluation of what the game's problems have been, and smart decisions about how to fix them. It may be that the game's audience has reached a plateau, given the widespread competition, and changes that could be made with reasonable time and expense might not generate enough additional revenue to make them profitable. It's possible that Bungie might conclude that beyond a certain maintenance level, Destiny is not worth a major upgrade project.<br />
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Conversely, Bungie may analyze the situation and determine that some game design changes along with a steady flow of new content and good marketing may put Destiny firmly in the black. I don't know which case is true (though the decision is rarely so clear-cut). I wish Bungie well in making that decision. Whatever Bungie decides, the next decision will be what to tell the Destiny fan base -- and when.<br />
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Whatever changes Bungie makes (or doesn't make), you can be sure there will be a number of people who don't like those changes. The company needs to manage expectations and keep the fan base as happy as possible, either for new Destiny content or for a new Bungie franchise.<br />
<br />
Meanwhile, Activision Blizzard now has to figure out how to replace the revenue hole Destiny's departure leaves. Spin up a new franchise? That takes a lot of time and money with no guarantee of success. Acquire a profitable game company? Possible, but expensive -- and that can take a long time to negotiate, and maybe even longer to show a profit.<br />
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I wish Bungie all the best in their quest. There's a tremendous amount of work that's been put into Destiny, and I hope that they can find a way to continue that world for many years to come.Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-51052256197854838462019-01-10T20:57:00.001-08:002019-01-10T20:57:19.339-08:00Unity Makes Improbable's SpatialOS Impossible<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHCCrujosrkbTsS5SlYPnWifjm6peNMMrNYBAwXNf3Ua7BwcA__B2b7Aw3oCSw8tjgT40VVzsxLcg1tMD8Hu-mEZDRVnox1RfVHChtVpWDhRZhZcIMimr0GcSVTMtKoV0H77Xc0x_pCaU/s1600/Improbable.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="540" data-original-width="960" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHCCrujosrkbTsS5SlYPnWifjm6peNMMrNYBAwXNf3Ua7BwcA__B2b7Aw3oCSw8tjgT40VVzsxLcg1tMD8Hu-mEZDRVnox1RfVHChtVpWDhRZhZcIMimr0GcSVTMtKoV0H77Xc0x_pCaU/s400/Improbable.jpg" width="400" /></a></div>
The <a href="https://techcrunch.com/2019/01/10/unity-pulls-nuclear-option-on-cloud-gaming-startup-improbable-terminating-game-engine-license/" target="_blank">news </a>came seemingly out of nowhere: Improbable, the well-funded UK startup producing the SpatialOS system for running massively multiplayer online games across multiple servers, announced that game development engine company Unity yanked their license to run Unity-based games. An unknown number of developers have been busy creating games for SpatialOS, and it's not clear how many of them were using Unity. What an unpleasant surprise to wake up to!<br />
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The news wasn't over for the day, though. At first, Improbable was pleading on their blog to get the whole issue squared away with Unity; apparently the two had been in negotiations over the issue for some time. Unity wasn't having any of it, though, issuing a statement that the whole thing shouldn't have been a surprise to Improbable -- Unity said they told them in person over a year ago that SpatialOS was in violation of Unity's terms of service, and notified them in writing six months ago, and has been negotiating over the issue for months.<br />
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That raises the question of why Improbable hadn't mentioned the issue to developers -- well, you can understand why (they wouldn't want to scare people off), but given the outcome some warning would have been nice, don't you think? At least Unity clarified later in the day that SpatialOS projects that were live and in production would still be supported.<br />
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Now at the end of the day comes <a href="https://techcrunch.com/2019/01/10/improbable-and-epic-games-establish-25m-fund-to-help-devs-move-to-more-open-engines-after-unity-debacle/" target="_blank">news that Epic Games</a> has stepped in to help Improbable create a $25 million fund to help developers "move to more open engines." Gee, I wonder what engine they could be referring to? This offer is... Unreal, so to speak.<br />
<br />
I know there's more to the story that what we've been reading here -- I suspect there's money at the root of it, and Unity wanted some part of Improbable's revenue stream in some way. I hope all parties can resolve this issue without leaving developers feeling whipsawed. Imagine having to try and rework your late-in-development game to an entire new engine... a nightmare scenario.<br />
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I think Improbable has a bright future ahead, as there are many interesting game designs I can think of that would benefit from a fast, cloud-based OS like this one that can enable some things we haven't seen before in games. Let's hope they can find a way to play nicely with Unity as well as Unreal.Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-91718631780849067952019-01-09T23:28:00.000-08:002019-01-10T15:38:51.866-08:00Activision Blizzard Shakes Up Management<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEieL-GCS7MLUALMxA6jbT1KBTdru7IvI5viwNYgKl40sK0RBXsjEvOyU0dnCDN0VFSH_JZHSWpV-7SdDhM_jK4Cc9vI-RJJsx0qq6_3eD0V__Mb-cZ2nseseoNroMG1_6gEL8x2-SMG1jU/s1600/CoD.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="563" data-original-width="1000" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEieL-GCS7MLUALMxA6jbT1KBTdru7IvI5viwNYgKl40sK0RBXsjEvOyU0dnCDN0VFSH_JZHSWpV-7SdDhM_jK4Cc9vI-RJJsx0qq6_3eD0V__Mb-cZ2nseseoNroMG1_6gEL8x2-SMG1jU/s400/CoD.jpg" width="400" /></a></div>
Management has been changing over the last few months at Activision Blizzard. Netflix poached Activision Blizzard's CFO, and then Blizzard's CFO announced she was leaving to become CFO at Square. This follows after longtime Blizzard president Mike Morhaime stepped down last year, as did Activision Blizzard president Eric Hirshberg. Now Activision Blizzard <a href="https://variety.com/2019/gaming/news/activision-blizzard-exec-shuffle-appoints-new-heads-of-activision-king-emerging-business-1203103289/" target="_blank">announced </a>that <i>Call of Duty</i> Exec Rob Kostich is the new President for Activision Blizzard; Humam Sakhnini was named president of King Digital; and Dennis Durkin will continue as Activision Blizzard CFO as well as heading up emerging businesses.<br />
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Why all the changes? Well, some are no doubt due to a desire to try something different (or just to retire), but one can't help but connect all this management movement with the fact that the stock has dropped 30% in recent months, and that the Q3 results showed a drop of 12% in overall sales. Some of the marquee titles like <i>Destiny</i> and <i>Overwatch </i>seem stagnant. <i>Call of Duty</i> still hasn't regained the sales it reached several years ago, though it's still selling tremendously well.<br />
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Perhaps some of this is due to <i>Fortnite </i>taking some of the oxygen away. The market for hardcore players is only so big, after all, and it's hard to expand your audience when you're already one of the market leaders. Investors are wondering where the growth will come from in the future. Esports? Perhaps, though it's not clear exactly how that segment will evolve over time. Mobile? Activision Blizzard's King is doing quite well with <i>Candy Crush</i>, but it seems to have trouble coming up with a new hit of that size.<br />
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Of course, Activision Blizzard is not alone in its doldrums. Electronic Arts is facing similar questions about where future growth is coming from. Market leadership makes it difficult to rack up strong growth numbers year after year. Just ask Apple.<br />
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What should these giants do? Perhaps look at some acquisitions; picking up a company with proven properties in key market segments should be good for growth, if you can make the right picks. (King Digital has certainly performed well for Activision Blizzard.) Mining the back catalog to bring back the hits of the past could be lucrative as well, if you carry it off properly. (<i>Command & Conquer</i>? <i>Tony Hawk</i>?) Both of these companies have many great hits in their past, some of which might be dusted off and brought back to great acclaim.<br />
<br />
It will be interesting to see what happens over the course of 2019.<br />
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<b>Update</b>: The first <a href="https://kotaku.com/bungie-splits-with-activision-1831651740?" target="_blank">big news</a> has already dropped, as Bungie splits away from Activision Blizzard to put <i>Destiny </i>completely under Bungie's control. The game hasn't been performing as well as Activision Blizzard had hoped, clearly, and Bungie will see if they can do better. However, Activision Blizzard is now down two key franchises (<i>Destiny </i>and <i>Skylanders</i>) which had been major contributors to revenue in the past few years. What will replace them? It's not clear what, and certainly creating a franchise that can perform on the scale Activision Blizzard would like (hundreds of millions in revenue per year; ideally a billion or more) is an expensive, time-consuming gamble. Unless you buy one that's already doing well... I expect this will put even more pressure on Activision Blizzard to find something like that.<br />
<br />
What this also says, pretty clearly, is that Activision Blizzard has lost faith in the ability of <i>Destiny </i>to grow to the size they need. The game could still be a good performer for Bungie, which doesn't necessarily need such huge numbers. Still, I wouldn't be too surprised to see <i>Destiny </i>go free-to-play at some point in an attempt to grow the user base significantly. That's easy to say, but remarkably difficult to pull off -- you need to have a game design that works well with monetization and can retain customers for the long haul, and it's not clear <i>Destiny </i>has that.<br />
<br />
Buckle up, this may be a bumpy ride.Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-84479974588045158822018-12-31T23:38:00.000-08:002018-12-31T23:38:34.859-08:002019: What Lies Ahead in Games<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibltA-RoSISVNz4K67H7FDvBhbtbgxqhR58c-InwL2MvwjWYz5UX2JinT-uVVctlKjsLfEbhfZzONkjQiYazKpbS2nzwZg58qenGb-QvILwMNaoXx5B-scUD1QZivIZk_0Bqh5YsltxxM/s1600/Fortnite.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="800" data-original-width="1600" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibltA-RoSISVNz4K67H7FDvBhbtbgxqhR58c-InwL2MvwjWYz5UX2JinT-uVVctlKjsLfEbhfZzONkjQiYazKpbS2nzwZg58qenGb-QvILwMNaoXx5B-scUD1QZivIZk_0Bqh5YsltxxM/s400/Fortnite.jpg" width="400" /></a></div>
2018 was a banner year for gaming, with the overall market size growing to somewhere north of $130 billion worldwide. Mobile games became the largest single segment of gaming, and China was the world's largest market for games -- with Tencent the world's largest game company. What's in store for 2019?<br />
<br />
<b>The market for games gets bigger.</b><br />
Let's start with an easy one: the global market for games will continue to grow. Despite China holding back Tencent from introducing new games; I expect that will only be a temporary setback. (I also expect we'll never know the real story behind the Chinese government's throttling of Tencent in 2018. Too bad, it's no doubt fascinating.) The overall market will crack $140 billion, and may end up closer to $150 billion. Mobile games will retain their leadership as the biggest single segment.<br />
<br />
<b>Games will be increasingly scrutinized and regulated by governments around the world.</b><br />
It's not just loot boxes, though those will continue to cause problems for game companies. The lines are getting blurred between gaming and gambling, and that brings oversight. Publishers will continue to push the boundaries because there's a lot of money at stake. Laws will be passed in Europe and Asia putting more restrictions on games. The USA will lag behind in this regard, mostly because other political issues will continue to dominate legislative time and attention. Major industry players will continue to deny there's a problem, though they may get closer to that point.<br />
<br />
<b>The Digital Store Wars get into high gear.</b><br />
Prior to 2018, Valve's Steam store had some competition, but nothing particularly large or well-funded -- or very effective at competing with Steam. For 2019, there's plenty of competition: Discord, Epic, Robot Cache, and others. Moreover, some of that competition has billions of dollars to spend, or a user base larger than Steam's, or technological advantages. Epic is offering developers a much larger revenue share -- 88% of sales instead of 70%. Valve, after years of not paying attention and just raking in money, will have to wake up and start working if they want to maintain market share. The competition will be good for developers and consumers.<br />
<br />
<b>Mobile games will continue to grow strongly and innovate.</b><br />
We've seen multiple billion-dollar mobile games this year, and new innovative game play on mobile (Fortnite and HQ Trivia are good examples). I expect there's plenty more innovation to come, in game design, business models, and marketing, for mobile games.<br />
<br />
<b>VR/AR/XR will continue to underperform.</b><br />
Despite new hardware and software releases, a mass market for various alterations of reality does not yet exist. While games seem like an obvious choice for new hardware, we have yet to see really compelling game play (except at some location-based entertainment spots, like the Star Wars experience). The hardware is still clunky and expensive, and we have yet to see games that people want to play for tens of hours let alone the hundreds of hours top games are played on other popular platforms. Someday the market will appear... but it won't be in 2019.<br />
<br />
<b>Game streaming will continue to be a vision, not a viable market.</b><br />
Despite attention from companies like Google, Microsoft, Sony, and Electronic Arts, game streaming will not become a major market. Why not? The technical issues are difficult and ongoing; hardware requirements are a problem (not the display, the controllers and the network and the back end); and the market of people who want to play console-style gaming with complicated controllers isn't really all that large, not compared to mobile games. Here's my main example of why streaming isn't needed: Fortnite on mobile. Epic rethought the interface, and it's good enough and fun enough -- and you don't need a new piece of hardware or a finicky connection or a subscription. If Epic can do it, so can others -- and they won't need some expensive and clunky arrangement with a big company to make it happen.<br />
<br />
<b>Indies will continue to have difficulty making a living until they put more emphasis on marketing.</b><br />
The fundamental problem in the game industry is no longer making a game that works -- it's making a game that makes you money. Building games is easier than ever before, but building an audience for a game (and one that monetizes well!) is harder than ever. Most indies focus almost entirely on game design and execution, and only turn to thinking about marketing when their game has failed to become an instant mega-hit. Smart indies would think first about how they will build an audience for a new game, then start designing a game that works with that vision. Sadly, more indies will struggle without understanding this.<br />
<br />
<b>Games will continue to grow as a cultural force.</b><br />
As the number of game players around the world continues to grow (over two billion by some estimates!) the influence of games on popular culture (TV, movies, books, social media, etc.) will continue to grow. For those of us in the industry, I hope we can work towards making games a force for good in the world, and fight against the negative effects. In particular, let's try to make trolls into an endangered species.<br />
<br />
Happy New Year!Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-88564702738255075742018-10-16T21:16:00.001-07:002018-10-16T21:16:12.517-07:00Magic Leap: A Long Way From Real Money<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgd1S8NhX1VxcVc-ZAk2QYVeRswNGSSzy0qKtaNStOIukWyyaVLe7NVMAmiEywedzyXoWGlQaX50F6amjLWD-EG1nJoU4QyV3Dk4wC6Rgw-Z9s5B7BvL-UwrvKYk3ZAFn15d1wnKm2J_8/s1600/Framestore_Magic_Leap_1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="1366" height="223" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgd1S8NhX1VxcVc-ZAk2QYVeRswNGSSzy0qKtaNStOIukWyyaVLe7NVMAmiEywedzyXoWGlQaX50F6amjLWD-EG1nJoU4QyV3Dk4wC6Rgw-Z9s5B7BvL-UwrvKYk3ZAFn15d1wnKm2J_8/s400/Framestore_Magic_Leap_1.jpg" width="400" /></a></div>
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Now that Magic Leap has finally been unveiled, and had a
convention to promote its launch, people have had a chance to use their Mixed
Reality device and see a variety of apps that are available or in the works. So
far the response has been that some people are excited about the future, and
some less so… but right now, the product really doesn’t look like something
that will sell millions of units and transform society.<o:p></o:p></div>
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Let’s start with the price tag: $2,295 for a pair of goggles
that connect to a box you wear on your belt. The field of vision is small (the
same complaint held out against Microsoft’s Holovision goggles. The images are
not great, especially when you move around and things get chopped up or look
low res. Text is blurry and white screens look harsh, so look at standard
desktop apps is not easy. <a href="https://gizmodo.com/the-magic-leap-con-1829716266">This review</a> by
Brian Merchant lays out a number of the problems.<o:p></o:p></div>
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It’s clear that there’s no immediate, obvious use that’s
going to drive sales of a device that costs $2,295 and has plenty of
limitations. Ah, but in the future… there’s plenty of interesting visions put
forth with lots of hand-waving. Some of them may even come to pass. But between
here and there lie many years of improving the hardware, figuring out useful
software, and hoping that hardware and software companies can keep going until
the time comes for a robust, profitable market. That may be the hardest point
of all to reach.<o:p></o:p></div>
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To me, this feels much like Virtual Reality (VR) which
underwent a flurry of excitement for a couple of years, then fell back into the
steady grind of improvement and search for a killer app or three to boost
sales. The VR hardware is getting better and less expensive, but we still don’t
have an app that’s going to generate a billion dollars in revenue in a year.
Nothing that even looks like that, either – such an app would have people
spending hundreds of hours with it, or at least dozens, and there’s nothing on
VR like that.<o:p></o:p></div>
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While Magic Leap works on improving their hardware and
getting developers to create apps, other companies like Apple and Google are
working towards AR/XR hardware. Who’ll find a market first? I don’t know, but
ultimately being first isn’t critical. It’s being able to exploit the market
with the right hardware, software, and business model. Apple’s iPod wasn’t the
first MP3 player, but they found the right combination of features at the right
price point to sell hundreds of millions.<o:p></o:p></div>
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Now, I do think VR/AR/XR has a future – maybe even one that
might surpass smartphones eventually. But someone will have to come up with
some killer uses for the right hardware that doesn’t cost too much – and I
think we’re some years away from that point.<o:p></o:p></div>
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Now, if you could show me a way to play Fortnite on Magic
Leap that would give you a big advantage over other players – or be a lot more
fun – then you’d have something that would sell hardware, even at $2,295 each.
Good luck with that…<o:p></o:p></div>
<br />Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-29875234319126839362018-09-25T10:21:00.000-07:002018-09-25T13:16:55.998-07:00Why Telltale Games Died<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxcLuCJWTU83_wVH-jQ_lCaCRX7Dlffz0y4wftAqRvStnijENQIfk583uHYu1-ZjlZoAvMLHf-WIXYFjl8WNsYa_xmri3JRFig8rtXdWt9lVWnEAUFp-A5z4cnXk4ZO_zkXkY-mlkRr-c/s1600/TWD-Telltale-Games.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="900" data-original-width="1600" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxcLuCJWTU83_wVH-jQ_lCaCRX7Dlffz0y4wftAqRvStnijENQIfk583uHYu1-ZjlZoAvMLHf-WIXYFjl8WNsYa_xmri3JRFig8rtXdWt9lVWnEAUFp-A5z4cnXk4ZO_zkXkY-mlkRr-c/s400/TWD-Telltale-Games.png" width="400" /></a></div>
Before I begin, it's important to note that I have no inside knowledge of Telltale Games, other than what has been published. My opinions are just based on observation of the company and the game market. Keep that in mind as you read this -- there may be factors at play I know nothing about.<br />
<br />
I was saddened to hear about the fall of Telltale Games. The company isn't quite dead yet, maintaining a crew of 25, but it seems the end is near from their public statements. Apparently the suddenness of the demise was <a href="https://www.gamesindustry.biz/articles/2018-09-25-telltale-games-was-scuppered-by-failed-finance-round" target="_blank">due to a failed investment round</a>. When that fell through, the company didn't have the revenues to go forward. Still, though, either the CEO shouldn't have been playing hardball in the negotiations, or should have had a viable plan B for the employee's sake if things fell through. The company must have been in bad shape financially for some time, and had to keep the employees on board in order to land the investment (who would invest if the staff was gone?) -- so couldn't give the staff any warning of potential impending doom. I understand why that was the thinking, but that puts the employee's welfare completely out of strategy entirely, which is obviously wrong. Or it should be obvious, anyway.<br />
<br />
The bottom line is that Telltale should have been aware of its problems and trying to fix them years earlier. There were plenty of warning signs.<br />
<br />
First of all, I'll point out the widespread stories that Telltale apparently operated in continuous crunch mode, demanding employees work 50, 60, 70 hours a week or more to complete episodes on time. That essentially says you don't have enough people on the project. And when you do that for every project, all the time, you're not properly allocating resources. Your budget for the project says $X on paper, but your really spending much more than $X... so the product is going to be that much less profitable.<br />
<br />
According to some of the press reports, only <i>Game of Thrones</i> and <i>Minecraft </i>were profitable for Telltale, among their recent games. The conclusion is clear -- either they needed to create larger audiences for their games, or reduce the cost to create them, or find more ways to generate revenue from those games.<br />
<br />
Part of the problem is inherent in the design of the games. Basically, they are stories with some branching. There's no opportunity there for multiple players or character customization (since your character is part of the story and can't be changed), which means there's no reason for virtual goods. Why customize your character's look if no one else sees it -- and it really isn't your unique character, anyway? Taking away virtual item sales means foregoing a major source of revenue in this day and age.<br />
<br />
Another problem for Telltale was licensing. Their whole portfolio of games is built on licensed properties -- they have no company-owned IP. Now, licenses, properly used, can be great. A well-chosen license can get you a vast audience at a low acquisition cost, though of course you now have licensing costs on top of your usual costs. The trick is to find ways to profit from that new audience. Usually, the obvious thing is to create a game using in-house IP that can sell well to the audience you gathered for the licensed game. (Note that many publishers use this strategy, like Jam City, Electronic Arts, Activision, and others.)<br />
<br />
For instance, if you've sold millions of a <i>Game of Thrones</i> game, why not create your own fantasy setting and build interactive stories for that? Sure, the audience would be smaller than for <i>Game of Thrones</i>... but you wouldn't have the licensing costs. But Telltale never used this obvious strategy.<br />
<br />
I suppose that makes sense when your games weren't profitable anyway. This points to what they should have been doing -- finding a way to either sell their games to a bigger audience (through better marketing), or change the game design to be less expensive to produce and have more opportunities for profit (a design that made virtual items a reasonable thing to create).<br />
<br />
All that said, I think interactive stories are fun, and Telltale had plenty of great ones (their numerous awards can testify to that). Telltale just hadn't figured out how to make them profitably. That's an important lesson for any game company. Yes, you have to create a fun experience for players -- but you have to make sure you have a way to make a profit, too.<br />
<br />
<b>Update:</b> A <a href="https://www.polygon.com/2018/9/25/17901106/telltale-layoffs-lawsuit-warn-act" target="_blank">lawsuit has just been filed against Telltale</a> for breaking laws in its abrupt layoffs.<br />
<br />
<b>Further Information:</b> More than just the problems I outlined above, Telltale had basic problems with its engine that it never solved, as detailed in <a href="https://www.polygon.com/2018/9/25/17896592/telltale-games-company-layoffs-walking-dead-development" target="_blank">this article</a>.<br />
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<br />Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-51537590816832012672018-07-07T16:43:00.002-07:002018-07-07T16:43:52.185-07:00Crowd Marketing<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinQlKih5zPUC830HuQeqhe-c_bJPLxZZQ85VJPSPmnMgdoW-uxHHbFwBgzihJSxjCfP8-sUNeoNo1l5ecci_8cMRQdvFXTU1lrAAsmAGPq_1uwAvH-IVh3Q4HELc7Jdtuhvdv7KiisvUs/s1600/Flame+War.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="331" data-original-width="400" height="330" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinQlKih5zPUC830HuQeqhe-c_bJPLxZZQ85VJPSPmnMgdoW-uxHHbFwBgzihJSxjCfP8-sUNeoNo1l5ecci_8cMRQdvFXTU1lrAAsmAGPq_1uwAvH-IVh3Q4HELc7Jdtuhvdv7KiisvUs/s400/Flame+War.jpg" width="400" /></a></div>
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ArenaNet, the studio that develops Guild Wars, just fired
two employees because of a furor that erupted in social media. <i style="mso-bidi-font-style: normal;">The Verge</i> <span class="MsoHyperlink"><a href="https://www.theverge.com/2018/7/6/17541318/guild-wars-arenanet-jessica-price-peter-fries-fired-reddit">covered
it well</a></span>; essentially, an ArenaNet narrative designer was tweeting
about how she writes narratives in Guild Wars, and a streamer politely offered
some commentary about how he’d like to see things done – and then the whole
thing exploded as the narrative designer got angry at this, heated messages
were exchanged, the issue became popular on Reddit, and then the designer was
brought in to talk to the CEO of ArenaNet who fired her. He also fired another
long-time developer who had come to her defense. Now the issue has become politically
charged, and while outrage is spread around and amplified some important
lessons from this incident may get lost.<o:p></o:p></div>
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The issue is much more complex than that simple summary
above, of course. If you’re interested check out the articles on the incident,
and especially read through the tweets that precipitated everything, and form
your own opinions. I’m not sure if there’s clearcut right and wrong here, but there
are important things marketers and game developers should learn, and that’s what
I’m going to focus on.<o:p></o:p></div>
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Stepping back a bit, it’s certainly true that many companies
expect or encourage or even require developers to interact with the community.
Sometimes those interactions don’t go so well, which shouldn’t be a surprising
outcome for people whose expertise does not lie in public speaking or community
management. Community management is extremely important – it helps keep the
audience engaged with your game, it’s a way to learn from the audience, and
it’s a good way to try and deal with problems that occur. Like all tools,
though, community management can be harmful in direct proportion to its power
and utility.<o:p></o:p></div>
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How do you prevent a situation like this one from
developing? By hiring good community managers and making them responsible for
interactions with the audience, and by preventing anyone in the company from
posting to social media or forums <i style="mso-bidi-font-style: normal;">on
behalf of the company</i>. Employees (and contractors) need to put a disclaimer
on their social media profiles and on the email signatures – Opinions expressed
by me are not those of the company (there’s better language out there, but this
is the gist of it). This is true even of small developers – if you only have a
couple of people, figure out who’s better at talking to the public and have
that person do it.<o:p></o:p></div>
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It’s great if you want to have other members of the team interact
with the community, but the community manager should help with such interactions
and oversee them. The community manager can then step in if things get out of
hand on either side of the interaction. Here, it looks like the narrative
designer got angry out of proportion to the commenter, and then matters escalated
from there. (At least, that’s what it looks like from a distance – I’m sure
there’s more to the story.) If a good community manager had been overseeing
this, the escalation could likely have been defused before really bad things
happened (like people getting fired, and large numbers of people getting upset
with ArenaNet).<o:p></o:p></div>
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Was the CEO’s response appropriate? Perhaps, but I’d want to
know the full story (including the company’s policies, if any, and what had
been said before to the employee) before rendering a judgment on the CEO’s
actions. Certainly the heated response to a polite inquiry seemed far out of
proportion – and the continuing explosion of the developer was unnecessary and
reflected badly on the company.<o:p></o:p></div>
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What’s important for other companies is to learn from this
and try to set things up so it never happens to them. Marketers (and developers)
need to realize that marketing isn’t entirely under their control now – and
that’s a good thing. When you’ve got a strong message, an audience can help
spread that if they’re treated right. But don’t delegate that responsibility to
people that aren’t ready for it. Establish policies for employees about
communicating with the public or the press. Have someone skilled at community
relations and public relations available to step in and help as needed (even a
small developer should know some PR-savvy person they can call in to help when
the situation gets nasty).<o:p></o:p></div>
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Keeping your audience engaged with your content and your
company is important, but leave it to people who are skilled at dealing with an
audience – and who can keep their cool when provoked. Sure, sometimes you will
get complete trolls attacking, but that’s when you really need to know how to
deal with people like that. Pouring gasoline on them and setting it afire may
be emotionally satisfying in the short term, but it’s probably not the best way
to win the hearts and minds of the largest audience for your games.<o:p></o:p></div>
<br />Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-69973067342271234582018-06-04T21:21:00.002-07:002018-06-04T21:21:11.503-07:00VR, AR, and the Market That's Still Virtual<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOBAMHwQflUs_G3pd6jVds8CXKz0A2D-TgBrUurQgMlVBSYpCQaknLhNKw7IoX-ljlhIUpfAWkr009NDax8awEWoH8YQjaNisUvGvF5KNmzDRrYy2UW9B-l4Ce94TDvx9D2qL5EHiZGT4/s1600/AWE.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="573" data-original-width="800" height="286" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOBAMHwQflUs_G3pd6jVds8CXKz0A2D-TgBrUurQgMlVBSYpCQaknLhNKw7IoX-ljlhIUpfAWkr009NDax8awEWoH8YQjaNisUvGvF5KNmzDRrYy2UW9B-l4Ce94TDvx9D2qL5EHiZGT4/s400/AWE.png" width="400" /></a></div>
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Last week saw the Augmented World Expo in Santa Clara, bringing together a number of companies and people interested in XR (the catchall term that covers Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR)). While there were big companies like Microsoft exhibiting, there was a distinct lack of companies aiming at the consumer space -- like Oculus, Vive, or Magic Leap. The two companies with the current largest market of AR-capable devices -- Apple and Google -- were nowhere to be found. This show was not focused on consumers.</div>
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Overall, the AWE show continues to draw a good crowd and
some interesting speakers; the XR market for hardware and software, though,
doesn’t seem to be growing much. The AWE show, judging from the exhibitors and
the various sessions, is mostly about the various verticals that constitute the
enterprise market. That actually seems like a smart decision to me, because the
consumer market for XR is pretty much going nowhere fast. VR headset sales have
consistently <a href="http://nwn.blogs.com/nwn/2018/01/vr-sales-shipments-2017-superdata.html" target="_blank">underperformed</a>, and the installed base of even the largest is
still just a few million. AR is in the hands of hundreds of millions of people,
between ARKit and ARCore, yet almost nobody is using it – even in one of the
poster children for AR, Pokemon GO. (That app is a good touchstone for how
smart someone is about AR – ask them how important Pokemon GO is. Sure, it’s
done very well for Niantic, and helped generate press for AR, but the use of AR
in the game is completely cosmetic and can be toggled off easily; it adds
nothing to the experience or the gameplay.)<o:p></o:p></div>
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At least on the hardware side, there’s good progress. The
hardware continues to get better – faster processing, better displays, lighter,
and cheaper – but it’s still hard to see what software is going to drive
hardware sales. It’s the classic market development problem for hardware and
software – the hardware doesn’t sell without the software, and no one writes
the software unless there’s a good hardware base.We are getting to the point (still a couple of years away) where a good pair of AR glasses will be like slipping on sunglasses – at which
point the market could explode, if the price was right and there was software
people really saw a critical need for.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Digi-Capital's Tim Merel said he thought Google’s AR assistance for Google
Maps walking directions was the first really critical use for AR he’d seen for
consumers. I’d also nominate furniture placement, like Ikea’s app – I spoke
with one of the guys doing that app, and they have plans to make it even more
useful. So we are making progress towards useful consumer software for XR, but
it’s slow.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Major companies exhibiting at the show included Microsoft,
Qualcomm, and Sony. Interestingly Sony was not showing PSVR, but instead some
enterprise stuff so unmemorable I can’t even recall what it was. Microsoft was
focused on HoloLens and commercial uses. Yeah, who’s going to drop $3,000 for a
cool way to play <i>Minecraft</i>? A handful of people, maybe, but not more than that.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
One of the potential big players in XR is Magic Leap... but at AWE, it was Magic Leap who? They had no presence at the show, and no mind share
in the conversations I was in. Regardless of what miracles can be pulled off
with their hardware, they need to have compelling software… at least one thing that
people will pay a lot to use regularly. That’s needed to grow VR, AR, MR, whatever
kind of reality you’re planning. And I’ve yet to see it. I think it will
happen, but the time frame is indeterminate. Magic Leap did show a little bit of what their hardware looks like, but we still don't know the price or the release data -- nor have we seen what you can actually do with it. Apparently their demos have been impressive enough to get over a billion dollars in financing, so you can't count them out. But don't count them in until you know the price, and get details on how the hardware works -- and see some reviews from users.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
As for games, which many people seem to suppose are the
killer VR app, and a huge potential market on AR or MR, I think that most
people are barking up the wrong tree. Sure, games could be cool, but people
aren’t looking at the right kinds of features or genres so far in XR games. Worse, no one seems to
be building a game for XR that has billion-dollar potential. I think for a game
to make $1 billion or more, it has to have a couple of things: A large enough
installed base of hardware that can run it (A hundred million at least) and
some aspect of play that keeps people coming back for hundreds of hours of game
play. Now, that can be in 5 or 10 minute chunks like <i>Candy Crush</i>, or 5 hour
chunks like <i>Minecraft </i>or <i>World of Warcraft</i> – but the game has have that sort of
innate attraction (and ideally ways to build revenue over time). Nobody seems
to be making games with that sort of potential yet for XR.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I do think that with Apple's ARKit and Google's ARCore making AR easier on hundreds of millions of smartphones, that will provide an easy on-ramp for developers to try out ideas. That will make future AR wearables more likely to get adopted faster. Those developers who are learning how to build AR and VR apps now will be in a good position when that market finally arrives. The only trick is to have your development business survive until the larger market arrives...</div>
<br />Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-17717965310887898682017-09-19T13:39:00.001-07:002017-09-19T13:39:24.057-07:00The Struggle For Audience<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5sHRHpE6BJmv5GDUw18ZXDmBU6ouZQeQb9ZWNtxOG30foaNuzgckwR00a4VmJt7WkuhzrBYIvGpBSfe4ehxZ06obUNuiirX8wQMLl2Orn_tA2zkXVf_HxOQhA4G0c0NrdYkJDP9Grw4M/s1600/lawbreakers-game.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="742" data-original-width="1600" height="185" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5sHRHpE6BJmv5GDUw18ZXDmBU6ouZQeQb9ZWNtxOG30foaNuzgckwR00a4VmJt7WkuhzrBYIvGpBSfe4ehxZ06obUNuiirX8wQMLl2Orn_tA2zkXVf_HxOQhA4G0c0NrdYkJDP9Grw4M/s400/lawbreakers-game.jpg" width="400" /></a></div>
<div class="MsoNormal">
<i>Lawbreakers</i>, the
new competitive first-person shooter for PC and PlayStation 4 from Cliff
Bleszinski’s Boss Key Productions, is apparently <a href="https://www.pcinvasion.com/lawbreakers-continues-struggle-future">struggling</a>
to find an audience. According to Steam, there’s only about two to three
hundred concurrent players on the PC every day, and that’s nowhere near enough to
support this kind of effort. Analyzing how this occurred, and how to fix it,
should provide some useful tips for developers.</div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>What Went Wrong?<o:p></o:p></b></div>
<div class="MsoNormal">
First off, let’s be clear: My analysis of the situation is
entirely based on observations from the outside and guesswork. I don’t have any
direct knowledge of the development process for <i>Lawbreakers</i>, nor the studio, nor any of the people. So I could very
well be wrong in lesser or greater ways about this. However, while the problems
I identify here may not be true for this specific instance, they certainly are
true for a great many games these days.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
First, I’ll venture a guess that this game was developed
without a great deal of consideration for marketing, nor with any experienced
marketer as part of the team. That’s typical of many indie/small game studio
projects – marketing is not seen as something essential to developing and
making money from a game. Usually the focus is on design, programming, and art.
Consideration for marketing comes much later, usually as the game nears
completion. This is a mistake, since marketing efforts will often be more effective
with more time to take hold.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<i>Lawbreakers</i>
started off with additional challenges – it’s a multiplayer game, for one
thing, and it’s based on reflexes. Now, those are not bad things – in fact,
some of the most popular games around share those qualities. (Look at <i>League of Legends</i>, for instance, or <i>Overwatch</i>.) But when you need a group of
players in order to play, it makes it harder to get started – especially if
you’re trying to keep people in the same skill range. That’s why many such
games have chosen to be free-to-play – it maximizes the audience by removing a
major barrier to play (the up-front cost). Still, you can be successful with an
upfront cost – <i>Overwatch</i> has done
quite well indeed while charging up front for the game.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Note, though, that <i>Overwatch</i>
started with a huge advantage – Blizzard’s massive audience. Blizzard could,
very cheaply, notify tens of millions of people who love Blizzard games that
Blizzard has a new game – which they did, months ahead of launch, thus building
up plenty of anticipation and initial purchases. This crushed <i>Battleborn</i> (developed by Gearbox Games) which
could not compete against <i>Overwatch</i>
despite being supported by 2K’s marketing.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Another challenge for <i>Lawbreakers</i>
is the very competitive market segment that it’s entered. As noted, we have
games like <i>Overwatch</i>, and <i>Battleborn</i>, and <i>Titanfall</i>, and arguably related games like <i>Destiny</i> and <i>Call of Duty</i>
and others… there are plenty of well-funded, popular competitors that have big
installed bases of players. When you’re entering a market segment like that,
ideally you’d like to have some significant game features that provide a huge
competitive advantage (something players really want but can’t get elsewhere),
or a very strong license (like <i>Star Wars</i>
or Marvel), or a massive amount of marketing money (and talented marketers who
can devote plenty of time to this). <i>Lawbreakers</i>,
apparently, didn’t have any of these qualities. More than that, you’d really
want to have a strong marketing strategy, and start work building your audience
(that is, marketing your game) very early on – soon after you start actually
developing the game, in fact. This, to all appearances, wasn’t really done,
either.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Fixing the Future<o:p></o:p></b></div>
<div class="MsoNormal">
The really important question now for <i>Lawbreakers</i> is this: What can be done now to boost the game’s sales
to where it needs to be? Marketing alone may not be the answer, but determining
that starts with analyzing the data from the existing Lawbreakers audience. Are
only a trickle of new players showing up to play the game? Then you have to
figure out ways to bring in many, many more players – and considering a
free-to-play version is one possible answer. Are players abandoning the game
after playing a little while? Then you need to figure out why – is it that the
game is too frustrating to play? Are newbies killed too easily by the pros?
Does it take too long to find a match? Analyzing that is critical.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Marketing by itself may not be able to cure all of <i>Lawbreaker’s</i> problems. There may well be
game balance issues, or playability issues, that need to be dealt with by the
development team. Marketing can help inform some of those decisions with
surveys and focus groups, if need be. But the first place to start for Boss Key
is to look at all the player data they have now, and analyze that for clues
about how to improve the game.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Even with the game adjusted to its best performance, it
still may lack enough distinctive features to be an effective competitor in the
marketplace (that appears to be <i>Battleborn’s</i>
primary problem). Marketing can still help the game reach its full potential,
but ultimately the potential for a game is determined by its design. That said,
marketing can help – if there’s sufficient budget and skilled marketing talent
available. Good marketers can evaluate the situation and set performance goals
to see if marketing spending is working.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
In <a href="https://www.gamespot.com/articles/cliff-bleszinski-on-lawbreakers-i-have-to-keep-thi/1100-6453333/">a
recent interview</a> Bleszinski said they are overhauling the marketing of the
game, and looking for a long-term build up similar to <i>Warframe</i>. That requires a steady commitment to improvements and
additional content, among which Boss Key says is overhauling the onboarding
experience of the game. <o:p></o:p></div>
Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-29148383283147918552017-08-30T11:54:00.000-07:002017-08-30T11:54:55.476-07:00How Apple TV Could Dominate The Market<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvG4p_BWe36iZlsO9zfAorc9Ha2y0zXIgr1M5Y3DIqVWtAZlveIoyEeGjZkN6eKcs_6inaRCRW3JVQ1M-zlX264qQ8N80fHP4ClszSAdVe1wIFZ7Hon1r0d-C4LE199OFvNOFQDqzs3I0/s1600/apple-tv-hero-select-201510.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="630" data-original-width="1200" height="210" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvG4p_BWe36iZlsO9zfAorc9Ha2y0zXIgr1M5Y3DIqVWtAZlveIoyEeGjZkN6eKcs_6inaRCRW3JVQ1M-zlX264qQ8N80fHP4ClszSAdVe1wIFZ7Hon1r0d-C4LE199OFvNOFQDqzs3I0/s400/apple-tv-hero-select-201510.jpg" width="400" /></a></div>
<br /><div class="MsoNormal">
Apple is likely to unveil a new version of Apple TV soon,
and the major new features will probably be 4K/HDR support along with a faster
processor. Supposedly Apple is arguing with studios over the pricing for 4K
movies – Apple wants to charge $19.95, studios want $29.95. Really, this is a
battle with no winners, only losers. Who buys movies any more? It’s streaming
all the way down. If this is all Apple has for the Apple TV, the product will <a href="https://www.theverge.com/circuitbreaker/2017/8/23/16194190/apple-tv-losing-marketshare-roku-amazon-survey">continue
its slow downward slide in market share</a> as Roku and Amazon continue to
grow. What’s so great about Amazon and Roku? Look no further than the pricing –
you can get a streaming stick for $40 or less. Apple’s TV solution begins at
$150. That’s why Apple TV has a 5% market share, well behind Roku’s 18% (as
well as Amazon’s Fire TV and Google’s Chromecast).<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Apple could certainly dominate in this market if it wanted
to – after all, the company has more money than any other company (well north
of $200 billion in cash!) and an enormously talented hardware and software
engineering team, as well as top-notch marketing. They have the resources, but
not (apparently) the burning desire to dominate the TV market.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
How could Apple TV dominate the market? Here are 5 ways:<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Go Big with Games</b><o:p></o:p></div>
<div class="MsoNormal">
Apple has already taken the important step of putting an App
Store on the Apple TV, but they didn’t really push the idea. Some game
publishers offered games, but nothing really compelling – and Apple didn’t
really market the idea of Apple TV as a game-playing device. The problem isn’t
the Apple TV’s horsepower (though a more powerful CPU/GPU would also help,
along with more RAM) – it’s the lack of good controls. Apple should at least
offer its own Apple-branded controller, or better still bundle it in. This
could be a controller in the old-school mode of the Xbox, or even a bigger
version of the touchpad with a thumbstick or two.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Beyond the controls, Apple needs to take some of its spare
change and buy some top-quality exclusives – maybe a studio or three to make
sure they are properly done and supported. Nothing moves game hardware better
than kick-ass exclusive games. These can (and should!) be based on well-known
IP, though you should also take some risks with compelling new IP as well.
Throw a billion dollars at this, or maybe two, and you’ll get plenty of amazing
games.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Finally, market the living hell out of these games, and push
Apple TV as an important gaming platform that every publisher should support.
Will this be enough to sell millions of Apple TVs? Not by itself, but if you
take the next point seriously, it will.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Slash The Price<o:p></o:p></b></div>
<div class="MsoNormal">
C’mon, Apple, if you really want to own the market you have
to be price-competitive. You can make plenty of money on software here, but
only if you have a huge installed base. Which means you need a low-cost option.
An Apple TV stick for $49 would do the trick; you can still have higher-end
boxes, but that should be $99 and perhaps $129 for the loaded version with
extra RAM and two controllers. What about your margins? Consider those lost
margins a marketing expense. If you’ve got compelling softwre and services,
you’ll easily make that up. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Offer Bundled TV
Channels</b><o:p></o:p></div>
<div class="MsoNormal">
Yes, it’s time you stepped up and cut some deals, rather
than demanding everyone bow to your will. If Sling and PlayStation Vue can
offer bundles, why can’t you? With Apple’s massive power you should be able to
offer a compelling bundle of channels at a great prices – or better yet,
several options at different price points, ranging from $10/month up to
$99/month (don’t leave the high-paying customers behind!). The right prices and
collections of channels will make Apple TVs sell very, very swiftly.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Include DVR
Capability<o:p></o:p></b></div>
<div class="MsoNormal">
Sure, local storage is expensive, but that’s what vast cloud
storage and streaming is for. Haven’t you been building out that capability?
Give people what they want, and let them time-shift broadcast content. Heck,
you can start charging for it after a certain amount of free storage, and
probably make another huge fortune just from that. Record 50 hours of
programming for free, then it’s $9.99 a month for another 100 hours… keeping
adding 100 hour blocks if you like, we’re happy to sell it to you!<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Innovate<o:p></o:p></b></div>
<div class="MsoNormal">
Encourage developers to really make use of the App Store,
and HomeKit. Add some spiffy devices for the home with some excellent prices –
they can be under Apple’s label, or not, as long as the company stands behind
them. Bring Siri to the next level, connect all your Apple devices through
Apple TV and make it indispensable. Support app developers with marketing , and
as the installed base grows there will many great new apps coming to the
platform.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Summary<o:p></o:p></b></div>
<div class="MsoNormal">
You’ll note that I did not call for Apple to spend billions
on original content, which is something they are apparently already planning to
do. I hope that succeeds, but it will take a long time for that sort of
initiative to drive hardware sales. Also, implicit in all of this is that Apple
makes a strong marketing effort, much more than limply saying “Apple TV is
here” and expecting everyone to buy it. Apple hasn’t done that in the past,
perhaps because they realized the product wasn’t worthy of a strong marketing
push. Add in some or all of the features mentioned here, and it will be.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
Do I expect Apple to do all of these things, or even some of
them? No, not really. The company seems content to let Apple TV remain a hobby. <o:p></o:p></div>
Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-81655589872360462952017-08-25T16:39:00.000-07:002017-08-25T16:39:40.969-07:00Xbox One X Sales Don’t Matter<br /><div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgATP7ZlqKMFGNr4RjSV3sh6BxH6OItvWnIpuC4GViL0RecthEFpu-34nWLlcCd6AnPhiBJggS9cItZgcGiz_75E7rFG62HIcx33Of1zOk4RAmPmcGKFzy5neS6fCzK4pwgx7h0GWCUFEw/s1600/Xbox+One+X.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="720" data-original-width="1280" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgATP7ZlqKMFGNr4RjSV3sh6BxH6OItvWnIpuC4GViL0RecthEFpu-34nWLlcCd6AnPhiBJggS9cItZgcGiz_75E7rFG62HIcx33Of1zOk4RAmPmcGKFzy5neS6fCzK4pwgx7h0GWCUFEw/s320/Xbox+One+X.jpg" width="320" /></a></div>
<div class="MsoNormal">
As we approach the launch of Microsoft’s new console, the
Xbox One X, there’s plenty of concern being voiced by commentators. “The Xbox One
X probably isn’t for you,” <a href="https://www.theverge.com/2017/8/25/16201444/xbox-one-x-hands-on-analysis-gamescom-2017">blares
one headline</a>. Another <a href="https://www.engadget.com/2017/08/24/microsoft-xbox-one-x-gamescom/">says</a>
it’s “still a tough sell.” There are plenty of complaints about the $499 cost,
the slim lineup of exclusive games, the fact that one of the best potential
games (<i>Crackdown 3</i>) is delayed until
next year. Microsoft’s released a list of about 100 games that will be enhanced
in some way on the Xbox One X, but some critics correctly point out that the
differences will be minor in many cases – and not really noticeable unless you
have a pretty large 4K UHD TV, which is still a rare thing.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Given all that, and the fact that the Xbox One S plays all
the same games and retails for only $249, many are predicting that the Xbox One
X won’t be a big seller. True, Microsoft has noted that early Xbox One X pre-orders
are the strongest they’ve ever seen, but we are given no numbers to make
comparisons here. We do know that the PlayStation 4 Pro represents only about
20% of ongoing PS4 sales, which is actually a surprise to Sony that it’s doing
that well. So in all likelihood, the Xbox One X will not be selling very well
for Microsoft for some time to come, at least not until 4K TVs get more
popular, games start to develop more compelling Xbox One X features, and/or the
price of the hardware drops.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
But none of that matters to Microsoft, I bet.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Why should Microsoft be OK with their new console not
selling well? Because the benefits of the Xbox One X to Microsoft are primarily
marketing ones not tied directly to unit sales. The Xbox One X (and the PS4
Pro) are primarily marketing tools, not direct profit centers.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Here’s the logic: Both Microsoft and Sony’s newest consoles
are, unlike new consoles in the past, extensions of the existing console line,
with full software compatibility between the entry level console and the
high-end console. (This compatibility is currently mandated by both publishers,
and is unlikely to change any time soon.) For both publishers, margins are slim
on the consoles compared to margins on software – the incentive is clearly to
maximize software sales. A user who replaces their current Xbox One with an
Xbox One X isn’t really helping the bottom line, unless they begin buying more
software than they did before the upgrade. So, from a purely monetary point of
view, it doesn’t really matter what percentage of overall console sales is made
up of the high end consoles. What matters is increasing overall console sales.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Here’s where the marketing benefit of the high end console
kicks in. Screen shots will look better taken from the high-end consoles. The
feature list of high end consoles is definitely premium, and the halo effect
extends to the entire brand when you start talking about the teraflops and the
4K output. Microsoft can now boast having the world’s most powerful console, a
clear marketing benefit.<o:p></o:p></div>
<div class="MsoNormal">
The benefits of high-end consoles to players are mostly in
the future. When 4K TVs become the majority of TVs in homes, and 4K streaming
movies are the standard, then having a 4K console will become even more
important. That will take a couple of years.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
It’s also possible that high-end consoles will eventually
get some exclusive software, and that at some point there will be a more clear
benefit to games played on high-end consoles beyond the somewhat better
graphics. The greater CPU and GPU power could also be harnessed to improve AI,
or to put many more opponents on screen, for instance, or to make the world more
responsive to player actions.<o:p></o:p></div>
<br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
For now, though, don’t spend any time worrying about how
well the Xbox One X sells, because however well it sells it is accomplishing
its purpose for Microsoft. The Xbox One X puts Microsoft in the technological
lead and provides a great list of marketing benefits, and should help expand the
installed base of Xbox One consoles that Microsoft can sell highly profitable
software into.<o:p></o:p></div>
Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-60052215237500175792017-07-03T21:33:00.000-07:002017-07-03T21:34:06.387-07:00The Next Generation Consoles Are Coming<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhU-GsaxMYaTnWcm0KNJepsf2AOr-H3jzuZbSKIJ-0M4sMNgDpwg3LPwuX5euk0EUyTAQS6twQLm8-QX6an3XLw1-ZGqnhBuDBJVgXDKTAtCXKQHTllRDIe2Fqs6oDCS30ycPuufQkcJO0/s1600/PS5.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="540" data-original-width="960" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhU-GsaxMYaTnWcm0KNJepsf2AOr-H3jzuZbSKIJ-0M4sMNgDpwg3LPwuX5euk0EUyTAQS6twQLm8-QX6an3XLw1-ZGqnhBuDBJVgXDKTAtCXKQHTllRDIe2Fqs6oDCS30ycPuufQkcJO0/s400/PS5.jpg" width="400" /></a></div>
Yes, the Xbox One X isn't even shipping yet, and already people are starting to talk about <a href="http://comicbook.com/gaming/2017/07/03/playstation-5-what-sonys-next-gen-console-needs-to-beat-xbox" target="_blank">how Sony will respond</a> with a PlayStation 5. Let's just make this simple: Of course, Microsoft and Sony are working on the next generation of their consoles. It's relatively easy to do (compared to previous consoles, where each generation was designed from scratch), and it makes perfect marketing sense <a href="http://20thlevelmarketing.blogspot.com/2017/06/ps4-pro-and-xbox-one-x-successful.html" target="_blank">as I explained in my last post</a>. The only real issue is exactly when these consoles will be introduced. The likelihood is both companies will be working on designs, updating them regularly, until forecasts show the timing is right for a new console generation. Then, about a year later, the new console can launch.<br />
<br />
What features will these new consoles have? By and large, we can predict the feature set fairly well. Any new console from Sony or Microsoft will be based on the current PC architecture and maintain backwards compatibility with the existing line (just as the PS4 Pro and the Xbox One X have done). The most important feature, which will be highlighted in all PR efforts, will be increased graphics power -- we should expect 4K HDR output at 60 fps for most games. Other features? Yes, there will be a number of things like improved streaming, but we're unlikely to see anything that will be too unusual -- that would make it less compatible with older consoles. Likely, VR/AR support will be built in, perhaps wirelessly through a high-bandwidth short-range connection.<br />
<br />
Sony will probably go first with a PS5, after giving the Xbox One X a year or three in the marketplace (and to let the installed base of 4K TVs grow). Microsoft may or may not be patient; it depends on how much they think it's important not to let Sony grab the graphics lead again.<br />
<br />
What hasn't really changed with the current new generation of consoles, and likely won't change with the next new generation, is the nature of gaming. Sure, everything will get prettier -- but the game play and game types will remain about the same. The top console games will get even more expensive to produce due to the 4K graphics, though -- and that will mean a strong incentive to stick with old IP in new versions, rather than risk entirely new IP.<br />
<br />
In other words, I don't think these new consoles will be expanding the market very much for console games. Maybe if they can find something interesting to do with VR/AR/MR... but I have yet to see that. Market expansion and innovation is occurring on mobile, for the most part -- though there's some choice innovation on the PC, even though that platform is actually shrinking rather than growing. Consoles, though, are mostly preaching to the converted.<br />
<br />
<br />Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-29732418355423145282017-06-18T23:59:00.000-07:002017-06-18T23:59:30.911-07:00PS4 Pro and Xbox One X: Successful Regardless of Sales<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMJr1Vgf8Qk1ZnmdVJzoBzck-dPBlZ2dGUbNpTAGeJuyurx3S1NM-g02S7-Vj6HJAYgnu7MhfKO3VR9KXRm3KX1DAVv6S7HfHJaA2b13DD5DCwktXl8Vk432ujPcVkaBti_T9kkgtn7qI/s1600/Xbox+One+X.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="720" data-original-width="1280" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMJr1Vgf8Qk1ZnmdVJzoBzck-dPBlZ2dGUbNpTAGeJuyurx3S1NM-g02S7-Vj6HJAYgnu7MhfKO3VR9KXRm3KX1DAVv6S7HfHJaA2b13DD5DCwktXl8Vk432ujPcVkaBti_T9kkgtn7qI/s400/Xbox+One+X.jpg" width="400" /></a></div>
<div style="margin-bottom: 0in;">
Perhaps the most interesting thing
about the new consoles from Sony and Microsoft – the PlayStation 4
Pro and the Xbox One X – is that they are successful products for
their respective companies whether or not they sell well. How can
this be? Isn't a product a failure if it doesn't sell well?
Typically, that's true. But the PlayStation and Xbox markets are very
different, because being profitable is not about selling hardware so
much as it is about selling software.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
Console hardware is, in itself, barely
a profitable business. The PS4 and the Xbox One S are currently at
$249 retail, and there's not a lot of margin there, if any, once all
the costs of manufacturing, marketing, distribution, and retailing
are taken into account. The money is in software and services. That
year-long subscription to Xbox Live or PlayStation Network is mostly
profit. Every piece of software sold for either platform pays a
healthy royalty to the platform owner (around $7 for a $60 title),
and that's nearly pure profit for the platform owner. First-party
titles are even more lucrative. And DLC is more profitable still.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
So the platform owners want to sell as
much software as possible, which means expanding the hardware base as
much as possible – which is why margins are low to non-existent on
hardware. That makes it easier to sell more hardware, which gives
more opportunity to sell the profitable software. The consoles are
essentially a required marketing expense where sales cover the costs.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
Which brings us to the introduction of
more powerful consoles. In the past, a new console meant the company
was starting over in creating a new player base and software base,
because new consoles were not compatible with old software. This
time, it's very different. The PS4 Pro and Xbox One X will run all
existing software as well as all upcoming software for their
respective platforms. In fact, they'll generally even make the old
games look better, and some new games will look really good.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
These new, more powerful consoles are
essentially powerful marketing pieces for the platform. The platform
is no longer the console hardware – it's the PlayStation 4 or Xbox
One software platform. The new hardware, while more expensive, serves
to promote the software platform. Sony and Microsoft will be showing
ads for games displaying all the capability of the new consoles, and
that will help sell the software and the older consoles as well.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
So it's really not important to Sony or
Microsoft what percentage of their console sales come from the newest
hardware. There's no particular profit there – <a href="http://www.pcworld.com/article/3200767/gaming/xbox-one-x-pc-build.html">PC
World tried to build a 4K gaming PC</a> that could match the power of
the Xbox One X for $499, and didn't even come close to that price
point. What matters is overall sales – and powerful new consoles
can help drive the marketing message for the games, which is where
the profit lies. Sure, maybe the new consoles will only be a small
percentage of overall platform sales this Christmas – maybe 10% or
20% of overall sales. That will rise over time as more people get 4K
TVs and the price of these new consoles begins to drop.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<br />
<div style="margin-bottom: 0in;">
Both Microsoft and Sony haven't really
made strong cases for buying their new, more powerful consoles over
the less expensive ones. They don't need to – the new consoles help
them sell more software in any case, and that's where the profit is.</div>
Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-16305905023545091432017-02-08T12:10:00.000-08:002017-02-08T12:10:42.997-08:00E3 Goes Public<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUzOBvf99ahSxaGWhc7QRIvWUeKyuxa0RUFuIUoW8UczHQgQpnVg1j27Kh-PIj9jc7g6N6rgNYrkQhb-jJj55YTXg2CIQefHdI6Hx70YF81fLI-aOk3nNJ6frwPXJfD6Ww9GoBh6_9Ec8/s1600/E3+Again.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUzOBvf99ahSxaGWhc7QRIvWUeKyuxa0RUFuIUoW8UczHQgQpnVg1j27Kh-PIj9jc7g6N6rgNYrkQhb-jJj55YTXg2CIQefHdI6Hx70YF81fLI-aOk3nNJ6frwPXJfD6Ww9GoBh6_9Ec8/s400/E3+Again.jpg" width="400" /></a></div>
The Electronic Entertainment Expo (E3) is going to <a href="http://www.gamesindustry.biz/articles/2017-02-08-e3-2017-will-be-open-to-15-000-fans" target="_blank">allow in the public</a> -- well, up to 15,000 of them, if they are willing to drop $150 (which rises to $250 later). It's an attempt to stem the show's continuing decline in importance and attendance. However, it seems like an awkward stance -- either you are a professional-only show, or you're a consumer show. If there are 15K fans swarming the show floor, doesn't that make it harder for the pros to do business?<br />
<br />
There will be a "business pass" to try and ease some of the crunch for the pros, I guess. Which probably means a separate entrance, or maybe some extended hours. Still, it seems likely this move may result in less professional attendance. Will companies be more or less likely to buy booth space if there will be 15K consumers there? I don't know, but it will be interesting to see.<br />
<br />
This may also lead to changes in booth design, as you have to figure on big lines and big crowds for the most popular games.<br />
<br />
It will be interesting to see how fast the tickets sell -- will they sell out quickly, or sell out at all? Will some publishers return because of this, or will more drop out of the show? Will this move attract new publishers, perhaps mobile ones?<br />
<br />
I think we'll just have to wait and see. At least E3 is trying something and not just sitting around, waiting for its relevance to completely dry up. I give them credit for taking action, and I hope it helps the show stick around just because of its historical significance.<br />
<br />
It's interesting to contrast E3 with the Game Developers Conference (GDC), which has continued to grow from year to year. I think GDC has continued to remain relevant because it has embraced changes in the industry over time. When social games became big, GDC included them in the conference sessions. Similarly with mobile games, and now VR. On the other hand, E3 stayed away from new trends in the game business because of its historical focus on retail, which continues to shrink in importance. (That also kept E3 from dealing with social and mobile games, because those are entirely digital distribution and have no retail presence).<br />
<br />
It will be interesting to see what Nintendo plans for E3 this year, as well as Sony and Microsoft. Will this announcement change any of their plans?Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-36135092017490291032017-01-19T00:45:00.000-08:002017-01-19T00:45:03.638-08:00E3's Slow Shrinkage Continues<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAsWJ3bln_8GKA4pjBGZZFx4FIZny6Y_lNBSA2iK-sbpjfT_YNT089r8qz0dmRM1ss3Rh9qtWfDiNCcU3vGfXKk0C28fo6W7uUm6VMCegYlRgNSLsnuKAQXoMKkLL73CwNXk1Mpk8fLGo/s1600/E3.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="265" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAsWJ3bln_8GKA4pjBGZZFx4FIZny6Y_lNBSA2iK-sbpjfT_YNT089r8qz0dmRM1ss3Rh9qtWfDiNCcU3vGfXKk0C28fo6W7uUm6VMCegYlRgNSLsnuKAQXoMKkLL73CwNXk1Mpk8fLGo/s400/E3.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><i>Yep, that pretty much describes E3</i></td></tr>
</tbody></table>
As someone who attended the earliest Electronic Entertainment Expos (the E3 show) and continued to attend over many years, the slow shrinkage of the show has been apparent for years. The E3 show has been shrinking in many ways -- relevance, floor space, attendees, and importance. This last year saw two of E3's major exhibitors, Activision and Electronic Arts, abandon the show floor altogether. EA instead opted to produce EA Play, a show aimed at fans (not the professionals who attend E3) that took place at Club Nokia, the small expo facility located next to the LA Convention Center where E3 is held. This year, EA <a href="http://www.digitaltrends.com/gaming/ea-goes-hollywood-decides-skip-e3-second-year-favor-ea-play-2017/" target="_blank">just announced</a> that EA Play will again be held, but this time it's in Hollywood at the Palladium Theater, some seven miles away.<br />
<br />
There's really not much reason to attend E3 any more. Most of the major events are livestreamed, and there will be extensive coverage on the show floor via Twitch and other streamers. The games being shown are often difficult to get in to see -- sometimes the lines can take hours to get through. Even with a press pass, some games are difficult to get hands-on time with. If you have face-to-face meetings with executives, that could be worthwhile -- but that time is hard to book, and the noisy environment often makes it difficult to conduct interviews.<br />
<br />
Originally the intent of E3 was to show off the upcoming holiday product lines to retail buyers in order to book sales for the next several months. That was hugely important, because the holiday months represented the bulk of game sales and profits. Now, of course, things are much different. Retail sales account for less than half of console game revenue. Console games are no longer the largest segment of revenue in games -- that's been taken over by mobile games. Heck, even PC games are getting close to topping console game revenues, and PC games aren't even sold in stores any more.<br />
<br />
The E3 show once occupied the entire LA Convention Center, including the downstairs Kentia Hall. That enormous space is no longer used. The two main exhibit spaces are no longer jampacked with booths -- in fact, there's plenty of open spaces, with large areas devoted to lounges (chairs and tables), non-profit exhibits (of old games), or just bare concrete with some tables for the thinly used food concessions selling highly overpriced convention food. (Nowadays, anyone who can visits the food trucks parked across the street, which offer a variety of tasty cuisine at prices lower than the convention center's tired menus.)<br />
<br />
The fact that big companies like Activision see no point in spending millions to put on a big E3 show should tell you just how important the show is these days. You should expect even more defections from the show this year, until at some point the whole thing shrinks into a smaller space or a very different event.<br />
<br />
The reality is that publishers like EA and others realize it's far more important to connect directly with consumers than to connect with retailers or journalists. Besides, in an increasingly more platform-agnostic market, brands are more important than promoting a specific hardware platform. You'll see that Sony and Microsoft will still have plenty of reasons to show hardware, of course -- that's still a strong seller at retail.<br />
<br />
As for me, I plan once again to take in E3 remotely and avoid the traffic and the crowds. It will be interesting to see what Sony, Microsoft, and Nintendo will show off, but going hands-on can wait for a less frenetic venue.Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-13511924033247254282017-01-17T15:54:00.000-08:002017-01-17T15:54:25.959-08:00Nintendo Switch: Off or On?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKnsHdIdImO3-8VHMm11FSdkBJp2AX5eBrS07sFzoov-QTuC-OK-SIUuiqXtf1TwyylDg-3nAr9z-znY0xX-j7ZdHQwwLH7pgqDuAcAu2VaM2Svc67kavon5gh-VqhfdL8SPO9DKE8mfc/s1600/Switch+Joy-Con.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKnsHdIdImO3-8VHMm11FSdkBJp2AX5eBrS07sFzoov-QTuC-OK-SIUuiqXtf1TwyylDg-3nAr9z-znY0xX-j7ZdHQwwLH7pgqDuAcAu2VaM2Svc67kavon5gh-VqhfdL8SPO9DKE8mfc/s400/Switch+Joy-Con.jpg" width="400" /></a></div>
Nintendo's Switch is little more than a month away from launch, and the early reviews are decidedly mixed. Some of the games look great, but the high costs and limited support don't look so good. My assessment is that Nintendo's Switch is headed for a Wii U-scale disaster if it keeps to its current course -- but it's possible Nintendo could turn things around with the right moves. They've done it before with the 3DS, which if not a success on the scale of the DS at least can be counted as reasonably successful.<br />
<br />
Let's look at the pros and cons of the Nintendo Switch, as we know them so far.<br />
<br />
<b>Nintendo Switch Pros</b><br />
<br />
<ul>
<li>Good-looking, reasonable size screen (720p, 6.2")</li>
<li><i>Zelda: Breath of the Wild</i> is a strong launch title</li>
<li>Flexible play options (home, handheld, tabletop)</li>
<li>(Probably) Easier to develop for than previous Nintendo systems (because it's likely based on Android)</li>
<li>Good variety of input options for developers (detachable controllers with motion and gyroscopic sensors, IR vision, multi-touch screen, lots of input buttons, two analog sticks)</li>
<li>Some future software looks exciting (<i>Mario Kart 8, Splatoon 2, Super Mario Odyssey</i>)</li>
</ul>
<div>
<b>Nintendo Switch Cons</b></div>
<div>
<ul>
<li>High price ($299 with no game included)</li>
<li>Limited system memory (only 32 GB before OS takes out a chunk)</li>
<li>Games will mostly be cartridges (otherwise you have to buy MicroSD card storage, which is not cheap)</li>
<li>Limited launch software (5 titles, only one major one, two ports, two very weak games)</li>
<li>Limited 2017 lineup (Only 23 titles for this year, most are ports of older software, only 3 or 4 look great)</li>
<li>There will be no Switch versions of the latest games from top third-party publishers (the system is too different, and not powerful enough to handle Xbox One/PS4 games)</li>
<li>High software prices ($60 for top games, $50 for a throw-away like <i>1-2 Switch</i>)</li>
<li>Limited 3rd-party support (All titles from major publishers are simple ports of old titles)</li>
<li>Joy-Cons are very tiny and buttons are difficult to reach even for average-size hands</li>
<li>High prices for accessories ($79.99 for a pair of Joy-Con tiny controllers; $70 for Pro controller; $90 for a dock; $49.99 for a single Joy-Con)</li>
<li>Online service will cost starting in the fall; some features through a smartphone; one free game a month, which is either an NES or SNES game that you can only play for one month)</li>
<li>Not competitive with other home consoles in power, price, or software</li>
<li>Not competitive with smartphones or tablets in power, price, or software</li>
<li>Little pre-marketing (there's been no long campaign to drive awareness or purchase intent)</li>
<li>Confused marketing (videos so far targeted at Millennials, but kids are entirely left out -- though the colorful games are classic Nintendo that should appeal most strongly to kids)</li>
</ul>
<div>
When you look at the list and think about what those pros and cons mean, you get the idea that Nintendo fans will buy a Switch right away, but after those folks (a few million, perhaps) buy a Switch, it will be tough to convince other to do so when they look at other options.</div>
</div>
<div>
<br /></div>
<div>
Essentially, the Switch is a fairly expensive handheld console that can display games on a TV, though its horsepower is nowhere near comparable to Xbox One or PS4 (let alone PS4 Pro or Scorpio). The console is up-gunned when it slots into the dock, but that just means more work for developers who essentially have to create and test two versions of every title (see tech analysis <a href="http://www.eurogamer.net/articles/digitalfoundry-2016-nintendo-switch-spec-analysis" target="_blank">here</a>). The whole thing is shaping up to be <a href="http://arstechnica.com/gaming/2017/01/nintendo-switchs-identity-crisis-could-echo-microsofts-kinect-disaster/" target="_blank">a debacle a lot like the Xbox One launch</a> or the Wii U launch.</div>
<div>
<br /></div>
<div>
If Nintendo keeps going the way it is, I think the Switch will look a lot like the Wii U or the 3DS initially. As always, when Nintendo announces a new console there's plenty of enthusiasm among the hardcore (and journalists, who are mostly Nintendo fans). The first month in sales will look great, as it always does. Then the product will meet reality, and sales will plummet a month or three after launch.</div>
<div>
<br /></div>
<div>
It's at this point that Nintendo could decide to make some changes, the way it did with the 3DS. If you'll recall, the 3DS did well for a while, but then it became obvious the device wasn't selling. Nintendo dropped the price an unprecedented amount (from $250 to $180), which rescued the 3DS (along with marketing shifts that de-emphasized the 3D display, which almost everyone turned off).</div>
<div>
<br /></div>
<div>
What could Nintendo do to rescue the Switch? One suggestion has been to release a version without the home-console items -- the dock, the grip, the straps. That could drop the price to $199 for the purely mobile version. Pack in the 1-2 Switch game instead of trying to get $50 for it. I would also get Niantic to create a version of Pokemon GO for the Switch, and include that as well. Focus the marketing around the mobile and tabletop play. Then you'd have a much better value proposition.</div>
<div>
<br /></div>
<div>
Of course, that would likely mean either dropping the 3DS line entirely, or reducing the price on that substantially so it would no longer be in direct competition. A 3DS XL should be $149, or perhaps $129, to really look good against the Switch. That could also help substantially boost 3DS software sales, which would be a nice profit boost.</div>
<div>
<br /></div>
<div>
Will Nintendo actually make such a gutsy move? They have done it before with the 3DS (well, the price cut part, at least). I doubt they will, though. The company is to wedded to the idea of selling hardware. So if Nintendo does make a move to rescue the Switch, it will likely be too little, too late. The Switch will limp along, selling a few million units a year. Then Nintendo has to hope it will finally figure out how to price mobile games and make some money from that. The fact that Niantic made $950 million in six months, with a very fat profit margin (likely in the 50% range even after licensing fees) doesn't seem to have gotten through to Nintendo.</div>
<div>
<br /></div>
<div>
Seriously, Nintendo's got iconic brands and characters that can be worth billions, if they put them on widely accessible hardware. Which Nintendo's proprietary hardware will never again be, not in today's world. Someday, Nintendo will figure out they should primarily be a software company, but they'll have to lose billions before they even have a chance of grasping that, it seems.</div>
Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-36317506552396683382017-01-13T17:28:00.002-08:002017-01-13T17:28:58.613-08:00Nintendo's Switch: Will it Succeed or Fail?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyRnesHmY77vHAWH2ySxfXyzCWrY2NmC0VTYNfRvFdH84WPyUItMCn-rBPukXGM1KMaWHvb2yXEfXq8aihK2jJU7VGtdA1bXfOJqxbHGcFhQ8cxzBjvxo0pfLe079Vkbb30vr2B4npKAU/s1600/Switch+1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyRnesHmY77vHAWH2ySxfXyzCWrY2NmC0VTYNfRvFdH84WPyUItMCn-rBPukXGM1KMaWHvb2yXEfXq8aihK2jJU7VGtdA1bXfOJqxbHGcFhQ8cxzBjvxo0pfLe079Vkbb30vr2B4npKAU/s400/Switch+1.jpg" width="400" /></a></div>
<div style="margin-bottom: 0in;">
Nintendo revealed more details about
the Switch recently, and it's an interesting risk for Nintendo. The
launch of a new console these days is anything but a guarantee of
success (just look at the Wii U, the worst-selling console in
Nintendo's history). There are some strong points to the Switch, but
there are far more weaknesses or question marks. Will the Switch
succeed for Nintendo, or become another failure like the Wii U? Let's
look at the situation.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
First, the hardware. It's $299 to get
the console, the dock (for connecting to your TV), two controllers
(called "Joy-Cons", tiny controllers with an analog
joystick and four buttons the size of the original NES controller
that slide onto the sides of the console, or can be used separately,
or used by two people, or slotted into a Grip to make it like an Xbox
or PlayStation controller), two straps for the controllers, a charger
(using USB-C), and an HDMI cable. There is no game included.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
Basically, the Switch is a 6.2 inch
tablet with a 1280x720 (720p) multi-touch screen, running off an
Nvidia Tegra chip (which means it's probably a modified version of
Android OS underneath Nintendo's interface), where you can attach
small controllers to the sides. You can also dock it and connect it
to a TV, where it boosts the resolution to 1080p (though Zelda:
Breath of the Wind runs at 900p). Or you can set in on a table,
propped up with its built-in kickstand, and share the controllers to
play a multiplayer game. As a handheld device, the battery life is
about 2.5 hours to 6 hours depending on the game (the joycons last
for about 20 hours); with <i>Zelda</i>, you get about 3 hours of
play.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
Software: There are only two launch
titles from Nintendo: <i>Zelda: Breath of the Wind</i> (a <i>Zelda</i>
open-world game) and <i>1-2 Switch</i>, a very simple set of
minigames using the joycons (like milking a cow or a quickdraw game,
for instance). Other launch titles are <i>Just Dance</i> from Ubisoft
(of course) and a <i>Skylanders</i> game from Activision. Some 80+
titles are in development according to Nintendo, but major ones like
<i>Splatoon 2</i> won't hit until summer, and <i>Super Mario Odyssey</i>
won't be out until the holidays (a grand <i>Mario</i> game in the
tradition of <i>Super Mario Sunshine</i> and <i>Super Mario 64</i>,
from the brief video that was shown). Most software will be $60,
though some like <i>1-2 Switch</i> may be only $50.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
One other important note: Nintendo will
have an online service that you will need to use in order to play
games with other people online. It will be free until the fall (as a
trial run), when it will become a paid service (no price point
announced). The service will give you access to some old Nintendo
games every month, but you will only be able to play them for that
month – then they go away. Unless, presumably, you want to buy them
(just like you've repurchased other Nintendo games over time).</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCz7qWPNmKTNPczd4dYvXKxkDNHQHHYRqtJG2sV5lXY5E8zofR3PS-FSUyAklhHQ6HF8ZDnm6HCGqnztzqVUoIpxmSsfnd9tMADe4NYUBjyNDoads0PJ__ALcqrjvjNt1e817h0XLtrrU/s1600/Switch+2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCz7qWPNmKTNPczd4dYvXKxkDNHQHHYRqtJG2sV5lXY5E8zofR3PS-FSUyAklhHQ6HF8ZDnm6HCGqnztzqVUoIpxmSsfnd9tMADe4NYUBjyNDoads0PJ__ALcqrjvjNt1e817h0XLtrrU/s400/Switch+2.jpg" width="400" /></a></div>
<div style="margin-bottom: 0in;">
Interestingly, Nintendo's videos are
centered on adults in their 20s and 30s... and some that look even
older. Kids are almost nowhere to be found. (Probably because the
kids were all too busy playing Minecraft or iPhone games.)</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
Here's what Nintendo hasn't talked
about: Graphics power. No doubt because the Switch is probably
somewhat less powerful than an Xbox One or a PS4, probably more like
an Xbox 360 or a PS3. Certainly it doesn't compare to the latest
iPhones or Android devices in terms of screen resolutions or graphics
power, either. So Nintendo is wisely choosing to avoid talking about
all that.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
The graphics power does matter, though,
when it comes to getting third-party publishers to create games for
the device. The third-party lineup Nintendo announced was really
quite lame – ports of old games like <i>Skyrim</i> or <i>FIFA</i>
or <i>Skylanders</i>, or bringing back old icons like <i>Sonic</i> or
<i>Bomberman</i>. What you will not see on the Switch are the big AAA
titles that are the latest from the top publishers – because that
would require a whole lot of work and expense for an unknown payback.
No <i>Battlefield</i> or <i>Call of Duty</i> or <i>Grand Theft Auto</i>
or <i>Assassin's Creed</i>, or any of the upcoming games from top
publishers. Maybe someday, if the Switch were to sell 100 million
units, but even then those top titles would arrive on the Switch a
year after launch on other consoles, simply because of the massive
effort required to port them.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
So in the end, as a Switch buyer you
will be left with Nintendo's titles and a number of second-string
titles, mostly from small Japanese publishers. And it already seems
clear that Nintendo will not be able to push out its very best titles
very quickly – probably one a quarter if we're lucky. And unlike
previous Nintendo handheld consoles, games will not be cheap. $60
this time, noth the $40 from the 3DS days.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
Can the Switch succeed? Maybe, but it
seems unlikely. Sure, Nintendo will sell several million in the first
month or two (if they can make that many) to all of the diehard
Nintendo fans out there. Beyond those people, it's going to be an
uphill fight to sell this console. If you look at the Switch as
primarily a home console, it will be more expensive than its
competition (Xbox One S and PS4 Slim can be found for $250, with a
game or two included) and far less powerful... and with a far smaller
library of software, not just now but forever.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
If you consider the Switch as a
portable gaming device, it's not a very good deal compared to your
smartphone or tablet. Poor battery life and screen, nice controllers,
middling graphics power, and insanely expensive games compared to
what you can find on tablets or smartphones. As a tabletop gaming
device... it may get used that way occasionally, but likely no one
will buy a Switch with the primary intent of playing it on a table.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
While the Switch may beat the Wii U in
sales, I don't think it will be an enormous success – nowhere near
the 100 million units of the Wii. In the end, I don't think people
want to carry around another portable device, especially one that
cannot fit in your pocket. Everyone will always take their phone
along, but the Switch will be a distant second choice. The $299 price
point is going to be a difficult sell against the Xbox One S and
PlayStation 4, especially once you start to look at the software
libraries and other entertainment features.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<br />
<div style="margin-bottom: 0in;">
The Switch will be a second console
purchase for some, particularly Nintendo fans who will line up to buy
it. After the first 5 million units are sold, it's going to be tough
for Nintendo. Could the Switch succeed? Yes, especially if you define
success as "selling 20 million units in two or three years."
Beyond that, the Switch will have a difficult time, and it's not
going to be the kind of profit engine Nintendo really needs to return
to its gloriously profitable days of the Wii.</div>
Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-959594276781052392016-11-22T13:17:00.002-08:002016-11-22T13:18:02.272-08:00Nintendo's Switch: Will the Market Take the Bait?<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen="" class="YOUTUBE-iframe-video" data-thumbnail-src="https://i.ytimg.com/vi/f5uik5fgIaI/0.jpg" frameborder="0" height="266" src="https://www.youtube.com/embed/f5uik5fgIaI?feature=player_embedded" width="320"></iframe></div>
<br />
<div style="margin-bottom: 0in;">
Now we know a little bit more about
Nintendo's new console, but really very little – especially when
we're only a few months away from the release date. We know it's
called the Switch, it's capable of playing as a portable and hooked
up to your TV, it uses an Nvidia Tegra chip, and it's going to be
released in March 2017. Officially, the only game we know that will
be on the Switch from Nintendo is <i>Zelda: Breath of the Wild</i>.
Most of what we know comes from this video that Nintendo released a while ago.</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
There's a lot of excitement over a new
console from Nintendo, and fans are already salivating. We know there
are a few million hardcore Nintendo fans who will buy pretty much
anything the company releases, no matter what issues it may have. The
real question here is can Nintendo find a massive audience for this
new console – like the 100 million who bought the Wii – or at
least one on the scale of the Xbox One (25 million or so so far) or
the PlayStation 4 (45 million or so so far)? Or are we looking at
another failure of Wii U proportions, with lifetime sales of 13
million to make it Nintendo's worst console ever?</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
My best guess at this point is that the
Nintendo Switch will end up far closer to the Wii U in sales than it
will to the Wii's sales. Why am I skeptical? Several reasons,
including the software, Nintendo's continuing difficulty in appealing
to modern gamers, the overall value of the system – and the fact
that it's essentially a mobile device. Let's deal with each one of
these reasons, in reverse order.</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<b>How Many Pockets Do You Have?</b></div>
<div style="margin-bottom: 0in;">
I think Nintendo has made a fundamental
error here in trying to make its home console more successful by
blending it with their more successful handheld consoles. What they
failed to understand is that their handheld lines have already been
on a downward slope – the 3DS line is selling in far smaller
numbers than the DS line. Why? Smartphones, of course. You can now
play terrific games on your smartphone, and nearly everyone who would
be part of the target audience for the Switch already has a
smartphone. You're always going to take your smartphone with you
wherever you go. Would you take a Switch? Sometimes. The bigger
question is, why would you even buy a Switch in the first place when
you have a better game playing device in your pocket already?</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
Top-end smartphones will be better than
the Switch. They have better screens, more RAM (doubtless), and a
better CPU/GPU than a Tegra. If not now, then they certainly will in
the next yearly update cycle. You can already put your smartphone
games up on your TV (via Chromecast or Airplay). And now you're going
to get Nintendo characters on your smartphone... so is a Switch
really worth hundreds of dollars to play a few different games? No, I
don't think it will be for most people.</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<b>What's the Value of a Switch?</b></div>
<div style="margin-bottom: 0in;">
It's hard to say until Nintendo
announces the price, but you have to figure if the price was going to
be low they would have announced this early. Delaying the price
announcement means a chance to build up more anticipation, and
perhaps less resistance if the price is high. Expect a minimum of
$249, and $299 would not be a big surprise. Since it's Nintendo, even
higher is possible – they really hate to lose money on every sale.
Say the Switch is $299 – which is the same as the basic price for
the Xbox One and the PS4. The Switch will certainly be less powerful
than either of those consoles, but it will be portable. Is that
really enough to sell the Switch?</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
The overall value of the console has to
include what software is available. There will certainly be some
Nintendo exclusives, but we don't know how many, how often we'll see
them, or how good they are. As for software that you see on other
consoles, that's unlikely except for one or two experiments. The
Switch is going to be a non-trivial port for games from other
consoles. It's likely the Switch will never have most of the popular
console games that appear on Xbox One or PS4, so if you're interested
in those the Switch becomes a second console to buy. That's a tougher
sell, and gives it less value.</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<b>Nintendo Doesn't Do Internet Well</b></div>
<div style="margin-bottom: 0in;">
One of Nintendo's biggest problems in
appealing to a modern gaming audience is that they still don't
understand the Internet, multiplayer online gaming, and related
issues. There's no reason to believe they'll have this any more
figured out with the Switch. Maybe we'll see Friend Codes. Even if we
don't see those again, there's not likely to be any great online
multiplayer games for the Switch – and those are some of the very
most popular games.</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<b>The Lack of Compelling Switch
Software</b></div>
<div style="margin-bottom: 0in;">
Wait, you cry, Nintendo has already
announced <i>Zelda: Breath of the Wild</i> for the Switch, and it
looks great! True, except now rumor has it that the game may not be
ready at launch, but perhaps months after that. While we saw things
that looked like <i>Skyrim</i> and <i>NBA 2K17</i> in the Switch
video, Bethesda and TakeTwo have refused to confirm they are
releasing those titles (or any titles!) for the Switch. This does not
induce confidence in the software lineup.</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
Ideally Nintendo would be releasing
major titles (using the best Nintendo characters) for the Switch
every couple of months. If they were going to, they'd have already
announced that. Nintendo has struggled for years with getting major
new software out for HD screens, with constant delays. It's great
that they want to release excellent software, but on a corporate
level they don't seem to be able to figure out how to do that on a
regular schedule. Other major game publishers have mostly figured
this out, but Nintendo seems to be incapable of doing that – and
honestly, most of the big titles from other publishers are
significantly more complex than most of Nintendo's games.</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
The Switch is going to be ARM-based
(using a Tegra CPU), so it's essentially going to be running an
Android variation I'd expect. Which means porting from mobile titles
should be easy – if Nintendo allows it. Though then you'd just have
a title you can already get on a mobile device you already own (your
smartphone), so this wouldn't seem to provide much of an incentive to
buy the hardware.</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<b>Summary</b></div>
<div style="margin-bottom: 0in;">
It's true we haven't seen the hardware
specs, the software lineup, or the price for the Switch yet. I
submit, though, that while those will all be interesting, none of
them are sufficient to guarantee the Switch sells in big numbers.
Honestly, you'd think if any of those three things were really
impressive, Nintendo would have been touting them for months, instead
of waiting until the very last minute to make them public.</div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
Perhaps Nintendo has finally figured
out that mobile is the future for them, but they were so far along
this hardware path they had to continue. Or maybe they really figure
the Switch has a chance to generate Wii-like sales. That ship has
sailed, though. With literally billions of good gameplaying devices
in the hands of people around the world, there's no way to create a
hardware market that's even a fraction of that size. With Pokemon GO,
we've seen where even a pretty limited title (the game initially
didn't have much to it), we could see 500 million downloads and over
$600 million in revenue in a couple of months. That shows the power
of great IP on the right platform with the right monetization – and
it's not even as great a game as it could be (though it's becoming
better).</div>
<div style="margin-bottom: 0in;">
<br /></div>
<br />
<div style="margin-bottom: 0in;">
Someday, perhaps, Nintendo will be able
to realize its potential on mobile platforms. The Switch, though,
just isn't going to be it. Even if the Switch is a huge hit, selling
50 million units in a couple of years, that hardware and all of its
software wouldn't generate as much profit as Pokemon GO will in one
year. That's the real switch Nintendo should be making – the switch
to creating mobile games.</div>
Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-62626782648956355982016-11-15T21:06:00.002-08:002016-11-15T21:06:13.479-08:00Super Mario Run Pricing Set: Will It Fly?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdRfJsDc4sbpoQ6S2WOD68nc2NJU2Kyzr1d37JSstmoWspL_NapQPJsAR6A4Ty9Wa4ySCYu7N1Hb9zsF_sKxynUJOG5QhG15yHqqIgf98CWW9UnyCGSN-JaUgxoHZIgcbZTGvv7nDbqWA/s1600/Super+Mario+Run.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdRfJsDc4sbpoQ6S2WOD68nc2NJU2Kyzr1d37JSstmoWspL_NapQPJsAR6A4Ty9Wa4ySCYu7N1Hb9zsF_sKxynUJOG5QhG15yHqqIgf98CWW9UnyCGSN-JaUgxoHZIgcbZTGvv7nDbqWA/s400/Super+Mario+Run.jpg" width="400" /></a></div>
Nintendo has <a href="http://www.polygon.com/2016/11/15/13636436/super-mario-run-release-date-price" target="_blank">finally announced</a> when its highly anticipated iOS game <i>Super Mario Run</i> will ship: December 15. And while the game will let you play for free, that apparently only applies to a limited part of the game (though you will be able to check out all three game modes, apparently). You can unlock the entire game for the princely sum of $9.99.<br />
<br />
Wow.<br />
<br />
Now, if there's any company whose brands could command a high premium price for a mobile game, it would be Nintendo. But $10 for an endless runner game? That seems like a big ask, when there are plenty of free runners out there. Sure, it's a big discount from a 3DS game at $30, but that's not the point of comparison that most mobile gamers will be making. They'll be looking at free games, or maybe something like <i>Minecraft Pocket Edition</i> at $5.99 -- which seems like it packs in far more value than an endless runner, no matter the IP doing the running.<br />
<br />
Of course, we don't actually know how much content there is that you'll get for your $10, nor how many hours of play you'd expect to get. Perhaps the game is a really good value at $10, delivering dozens of hours of game play. That seems unlikely, though, given the genre. It's not like it's a deep strategy game, or an RPG, or even a sophisticated platformer. What we saw demoed looked pretty simple, and not enough to justify the price.<br />
<br />
Perhaps Nintendo can indeed command that price, and sell millions of units at $10. That would be great for the industry -- with Nintendo leading the way, we could make premium mobile games a real thing and not just a fluke. Let's hope that is what occurs.<br />
<br />
I'm doubtful, though, because I think mobile gamers are less concerned about the brand and more about value. I think Nintendo will easily get millions of downloads, but getting people to drop $10 will be much, much harder. I don't think the problem is $10 per se, though there are few apps of any kind that demand that. It's a value question -- do you really get your money's worth? More than 20 million people have paid for <i>Minecraft Pocket Edition</i> at $5.99, so it can be done. But compare what you get for $6 to what Nintendo is offering for $10, and I don't think Nintendo compares very well.<br />
<br />
Now, one of the many great advantages of digital distribution is that price changes are easy. Nintendo could (and should!) experiment with its price point to find the optimum level -- the point at which Nintendo maximizes its revenue for <i>Super Mario Run</i>. (In other words, selling 100,000 units at $10 each is not as good as selling 20 million units at $1 each.) That optimum level may be $10, or it may be $1, or $5. Only testing would reveal that. That said, I'm doubtful Nintendo will actually test various prices, because that's something they are not used to at all. I'd like to be pleasantly surprised, though.<br />
<br />
While the upside for the $9.99 price is that it may help others in the mobile game business charge more for premium games, there's also a possible downside: Nintendo could create a great deal of ill will towards themselves and their brands if the value isn't there. The company's first mobile "game" <i>Miitomo </i>was a pretty clear failure, though it really wasn't a game per se (another mistake -- why should a game company release something that isn't a game, especially as their first foray into mobile games?). Nintendo might be hurting their future titles like <i>Animal Crossing</i> and <i>Fire Emblem</i> (both announced for mobile, coming sometime next year) if <i>Super Mario Run</i> is a big disappointment.<br />
<br />
We'll see. I think Nintendo is trying to create mobile games that are very different from its handheld console games, to avoid cutting into those sales. That's a remarkably shortsighted idea, though. Here's a simple piece of data that should convince you why that is: <i>Pokemon GO</i> has been downloaded or 500 million times. That's an order of magnitude more than any <i>Pokemon </i>game, ever, and more than all of them combined by several times. So why in hell wouldn't Nintendo give up low-margin hardware and just make killer mobile games (with a very high margin) that can attract an audience at least ten times larger than any they've ever had?<br />
<br />
OK, hedge your bets a bit and do one or two mobile games first to demonstrate you can actually do that well before you give up on hardware. I can see that. But Nintendo's Switch is never going to sell more than a tiny fraction of the number of smartphones out there, and therefore any Switch game will be microscopic in sales compared to a good mobile game. There are no multiple mobile games that generate over a billion dollars a year in revenue with a profit margin greater than 50%. No Nintendo game has ever generated that sort of profit, and few indeed have ever created that kind of revenue.<br />
<br />
It's going to be a very interesting product launch to watch, and come January we should have some idea of how successful it is.Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0tag:blogger.com,1999:blog-3648287505936626900.post-60260587212996539402016-10-30T23:43:00.003-07:002016-10-30T23:43:25.398-07:00The Death of Game Reviews<div class="separator" style="clear: both; text-align: center;">
<a href="https://i.ytimg.com/vi/vMFMCqRkuAA/maxresdefault.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" src="https://i.ytimg.com/vi/vMFMCqRkuAA/maxresdefault.jpg" width="400" /></a></div>
<br />
<div style="margin-bottom: 0in;">
While there's no attending physician,
and no generally accepted criteria for a cultural phenomenon
subsiding into irrelevance, I think we can call it here and now: Game
Reviews are dead, at least in terms of cultural influence. Bethesda
Softworks' <a href="https://www.wired.com/2016/10/bethesda-reviews/">decision
this week</a> to stop providing advance copies of games to reviewers
signals that reviews, long diminishing in effect, have crossed over
into complete uselessness. Or, at least game reviews in the classic
sense of being written by professional reviewers for professional web
sites or magazines.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
Here's what Bethesda said in their
press release:</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
"At Bethesda, we value media
reviews. We read them. We watch them. We try to learn from them when
they offer critique. And we understand their value to our players.
</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
Earlier this year we released DOOM. We
sent review copies to arrive the day before launch, which led to
speculation about the quality of the game. Since then DOOM has
emerged as a critical and commercial hit, and is now one of the
highest-rated shooters of the past few years.
</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
With the upcoming launches of Skyrim
Special Edition and Dishonored 2, we will continue our policy of
sending media review copies one day before release. While we will
continue to work with media, streamers, and YouTubers to support
their coverage – both before and after release – we want
everyone, including those in the media, to experience our games at
the same time.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
We also understand that some of you
want to read reviews before you make your decision, and if that’s
the case we encourage you to wait for your favorite reviewers to
share their thoughts."</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
What's happened to professional game
reviews is the rise of social media, the growth of reviews in online
stores, the increasing popularity of public betas, and overwhelmingly
the huge influence that livestreamers and YouTubers wield. People
don't look to professional game reviews to make their buying
decisions – they ask their friends, they look at what people have
said online, and most of all they look for YouTube videos or a
livestream where they can see the actual gameplay and listen to
someon's commentary about the game.</div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
Even though reviews don't seem to
affect sales so much any more, why would Bethesda stop providing
advance copies of games for review? It's very simple: Pre-orders. Bad
reviews could hurt pre-orders. Heck, some game writers are even
calling for people to stop pre-ordering, because it encourages bad
games. While that may or may not be true, what is true is that once
you've purchased a console game, you're not really able to get your
money back unless you return it unopened. Which is why we see
pre-order bonuses becoming more popular – publishers want to lock
in your purchase by offering some goodies you can't get if you wait
until the game comes out. Or until reviewers have had a chance to
tell you if the game is any good or not.</div>
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Yes, that's the way the business has
worked for decades. True, if a publisher ships a bad game there's
going to be some blow back – reduced sales on the next title,
perhaps. But it's usually not very substantial compared to all of
those lovely sales that aren't refundable. And as game budgets rise,
risk rises too – giving publishers even more reason to want to lock
in your dollars before you even have a chance to know if you like the
game or not.</div>
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Part of the reason free-to-play games
have done so well is that they turn this model on its head. You don't
pay anything unless you've found the game worth playing, and want to
get more out of the game by spending some money. Now, the problem for
developers is that all too often there aren't enough paying players
to make the game profitable.</div>
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Ultimately the problem gets resolved,
as good quality games rise to profitability and low-quality ones can
kill off a franchise or even a developer. Players now have plenty of
fine gaming choices all around, and if they really feel they are
getting a raw deal by pre-ordering they'll stop.</div>
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Still, the professional game review
matters very little these days – unless you can deliver it
engagingly during a livestream or in a cleverly crafted video. It's
bad news for traditional game reviews, but good news for streamers
and YouTubers. </div>
Steve Petersonhttp://www.blogger.com/profile/13699029352175505260noreply@blogger.com0