Battle Royale For The Holiday

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

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

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

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

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

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

Nintendo vs. Apple PR Battle

You can find the original image here.

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

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

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

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

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

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

Once Again, Sales Are Down

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

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

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

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

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

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

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

Microsoft Surface: New Gaming Platform?

Microsoft announced their new line of Surface tablets yesterday, and they look pretty sweet. The tablets come in either an ARM chip version for Windows RT (Windows 8 for ARM), or the Surface for Windows 8 Pro (which uses an Intel Ivy Bridge Core i5 chip, running Windows 8). Lots of unanswered questions still, but there are still at least several months before we see the ARM version (and 90 days after that before the Intel version ships).

Of course, a lot depends on details that Microsoft didn't reveal, like the exact specs or, you know, the price. And since they didn't let journalists actually use the devices, it's not clear how smoothly they operate (a big problem with many Android tablets). Assuming Microsoft can get all these details sorted out, though, I think these tablets have some serious potential. They shouldn't have a problem grabbing the #2 slot in the tablet market away from Android, anyway. For Windows users the idea of running all your Windows software on a tablet, and doing it well, sounds pretty good. (Assuming it's not too damn expensive, that is.)

For gaming, these bad boys could bring keyboard-and-mouse games on the road in a big way. OK, it's a trackpad instead of a mouse, which is less-than-optimal for some games. But for a lot of games it could be just fine.

What's not to like? A few things... the nomenclature is clunky. Surface for Windows RT? Surface for Windows 8 Pro? Inelegant and confusing. How about just Surface RT and Surface Pro? Or something equally simple. Apple's had some naming clunkers, too -- MacBook Pro with Retina Display is far less nifty than the actual device. Still, they have time to fix this.

More problematic is announcing so far ahead of shipment. Maybe they felt rushed by the impending announcement of Google's tablet (rumored to occur next week). Maybe the wanted to slow the headlong rush into iPads, and perhaps make it so Apple won't sell 20 million more by the time they get this to market. In any case, they've given every competitor some time to think up responses.

How will this dovetail with their smartphones, and with Xbox 360, and the Xbox 720? You can bet Microsoft will try to make these things fit together somehow. This may be the right product to knit together their various divisions, and get the success of Xbox and Windows working together to make a new category successful.

Or it could just be another Zune, and end up as a trivia question someday. Maybe. I think this has some good potential, but Microsoft still has many, many things to get right before it launches. I'm rooting for them; successful competition will drive everyone to make better devices at better prices, and consumers all win in that case.

Apocalypse Nowish

I just got the latest NPD numbers for May, and they seem to explain why so many games feature post-apocalyptic settings. It's just looking ahead to where the traditional retail channel is heading. Sales overall are down 28% over last May, with hardware dropping an astounding 39%, and software 32%. Accessories were up 7%, but that's a case of the tail lifting up the whole dog.

So far since December, sales have been consistently down 20% or more over last year for both hardware and software. Call me Cassandra, but I think we're looking at 2012 being yet another year of declining video game sales. Sure, there will be bright spots for some companies, but those that aren't looking in other places for substantial growth are delusional. Companies have to find ways to generate revenue other than putting a disc in a box and sending it to retail stores. Fortunately, most seem to have gotten the memo. The question is, can companies make the shifts necessary to thrive as fast as the marketplace is changing?

It's an exciting time, to be sure. Doubtless many executives wish it would be a little less exciting, and more resistant to rapid change.

Here's what NPD said: “YTD 2012, there have been 27% fewer new software title introductions into retail which we believe is a big part of the softness we’re seeing in May sales. A title obviously continues to see sales beyond its launch month, so there is a longer term impact from a narrower array of available new content. That said, we saw some exciting content at E3 that will come to market in the latter part of the year, and when great content comes to market, gamers are still showing up at the stores to buy it.”

Hah. "Softness" is a rather delicate term for a drop that's around a third of your total sales. Try "devastating" or "horrifying" to get closer to the sensations that causes when execs look at the numbers and try to think about meeting payroll.

Time to pull some rabbits out of the hat for the holidays, or else the Grinch will be putting Christmas on eBay for pennies on the dollar.

Warren Spector and I Talk Game Violence

I posted an interview with Warren Spector on GamesIndustry International, which among other things talked about his opinion that the violence in games has just gotten completely out of hand. (I recommend you check it out; there's also some interesting stuff about Epic Mickey 2 in there.) Having seen a wide selection of the newest games at E3, I can't really argue with that. There's some really graphic violence out there, and in many cases it seems to be used for shock value and as a way to get attention.

I see this as a classic example of the tragedy of the commons (I actually took a population ecology class from Garrett Hardin a few years after he wrote this paper). Essentially, doing an ultraviolent game has some incremental benefit to the company that does it (or at least, they think so); it gets them expanded attention and hopefully greater sales. At the same time, it damages the entire game industry, by creating a worse impression of games overall. Which leads to more attempts to regulate games and keep them away from kids. That damage is diffuse and hard to quantify, and occurs over a period of years, so it has minimal meaning to a company that's purely focused on numbers day-to-day. Thus individual companies can conclude that increasing ultraviolence in games is in their best interest.

Hopefully companies will exercise some judgment, but that's more likely if people take a stand and say No, I won't buy this. Look, there should be plenty of shooters out there to choose from; you should still be able to shoot things and have fun while still avoided games that go too far over the top.

Sadly, designing a game where you kill things is easier than designing a game where you have more nuanced considerations. Weapons use is pretty mechanical and easy to figure out; emotions and human conflict are much, much trickier. Still, there are plenty of interesting games being created out there with unusual and interesting mechanics. At E3 I saw Pikmin 3 on the Wii U, and it looked like a lot of fun. Even without spurting blood.

Wii U: WiiK

Some people seemed to think this is a Wii peripheral.

Nintendo's press conference here at E3 2012 underwhelmed me. I was really hoping they'd show a strong lineup of games and some compelling reasons why people would buy a Wii U. Nope. Not even close.

Really, one of the best ways to tell how they did is the audience response, from an audience predisposed to like them (the audience that cheered when Shigeru Miyamoto took the stage at the beginning of the conference): At the end, Nintendo got a polite 'golf clap." And not much of one at that.

Look, I think Pikmin 3 looked really nice, but that was clearly the best thing they had. And it's not even necessarily a launch title, they only said that about NintendoLand. Is Pikmin 3 going to make anybody other than the most passionate fanboy run out and drop $300 (probably) on a Wii U? No way.

Third party support was weak. EA who? Activision what? No Grand Theft Auto? Really, if the best you can show is Batman (which is what they lead with), it's a weak lineup. Ubisoft is nice, but they don't pull in the hardcore.

Half of Nintendo's presentation was about sports, fitness, dancing and singing. For the hardcore gamer, you got a zombie's head exploding... a few minutes of hardcore action in all.

Nintendo spent a lot of time on NintendoLand, and their whole E3 booth is built around it. It's basically a set of minigames that use iconic Nintendo characters. See, we have Zelda on Wii U! Well, a little archery range in NintendoLand with a Zelda theme, that's pretty much the same as a Zelda game, right?

They did show Super Mario for the Wii U... it's basically an HD Super Mario. No differences in game play were highlighted, nothing that showed a reason for the gamepad. They didn't even spend much time on it.

Look, it's pretty clear Nintendo had a very weak lineup because they spent so much time on pointless things, like introducing execs from other companies. If you have a ton of games to show, you spend time doing that, not having execs smile and wave and crack dumb jokes.

Once again Nintendo has gotten hardware to market well in advance of software. This looks like the weakest starting software lineup of any Nintendo launch I can remember, and I remember all of them back to NES.

Nintendo still has time to make some corrections to their launch plans. They haven't announced a price yet. They haven't announced a ship date. They could still pack NintendoLand in with the hardware rather than trying to get you to spend $50 or $60 on a collection of minigames.

I think the reaction of investors is pretty telling, though. Nintendo stock dropped 3% after the press conference. Not exactly a ringing endorsement of their announcements. I think Nintendo's headed for another bad year, perhaps exceeding the scale of last year's debacle.

Microsoft and Sony must be pretty happy. They don't have any new hardware this fall, and they won't need it. Perhaps a bit of a price drop here and there (PS Vita, I'm looking at you) and they should do just fine. Nintendo is going to need to pull some large rabbits out of somewhere to have a happy Christmas.