Game Marketing Tips, Analysis, and News

Thursday, September 30, 2010

Nintendo Slipping, iPad Gaining

Can this really sell at $299?
The handheld game market is changing fast, and Nintendo appears to be losing ground. They just announced the ship date for the 3DS would be March (end of February in Japan) and the price point will be 25,000 yen (which would be $299 at the current exchange rate). Analysts are disappointed, and Nintendo has cut its profit forecast for the fiscal year in half. Though they are still figuring they'll sell 4 million units in that one month of sales... which is probably sell-in, not sell-thru (retailers will order that many, not all may be purchased by consumers in that time frame).

Meanwhile, another analyst is estimating that Apple will sell 21 million iPads in 2011... nearly 2 million a month. Compare that to Nintendo's estimate of 4 million 3DS units sold in the first month... no doubt to drop thereafter. Another interesting thing to consider is that the iPad is at a minimum $500, and the 3DS is $250 at least (retail price has not yet been announced for the US market, but they may try to retreat from the $299 price point). Also of note is the fact that Apple is selling about 3 million iPhones per month, and a million or two of the  iPod Touch... that's a whole lot of iOS devices. Also note that the iPod Touch is $229 for the 8 GB model, and $299 for the 32 GB model. Compared to what you get, the 3DS doesn't look like a great deal... the 3DS plays games; the iPod Touch does that, and also takes high-quality photos, hi-def video, plays music and videos on an amazing screen, and has 250,000 Apps available for it, many of them free.

If Android is more to your liking, then it's good to note that as of August Eric Schmidt said that 200,000 Android devices were being activated each day... which pencils out to about 6 million per month. That's a lot of mobile gaming devices.

Of course, Nintendo doesn't really acknowledge iDevices or Android devices as competition. I guess denial is more than just a river in Egypt...

Wednesday, September 29, 2010

The Mobile Phone Market

US Market share, Q1 2010
If you're looking for an overview of the mobile phone market, here it is. What's interesting is the information hidden between the facts and figures. For instance, if you've been wondering why more developers don't create both iPhone and Android versions of their software, one need only see that 99.4% of all the App downloads last year were iPhone apps to know the answer. It's the same answer that famed 1930's bank robber Willie Sutton gave when asked why he robbed banks. "Because that's where the money is," he replied. No duh, in modern parlance.

The brief version is this: The iPhone and Android are growing, Blackberry and Windows are shrinking, and of course PalmOS is going away... and Nokia's Symbian barely registers. Smartphones are growing rapidly and overtaking the regular phone market, especially among the young. I think the core market for gamers is probably very likely to have a smartphone. Which makes a presence there all the more important.

The chart is not accurate or is misleading in some respects as regards worldwide market share. Here's the latest figures from Gartner Group:

  • 41.2% – Symbian
  • 18.2% – RIM
  • 17.2% – Android
  • 14.2% – iOS
  • 5.0% – Windows Mobile
  • 2.4% – Linux
  • 1.8% – Other OSes

So worldwide, Nokia is still on top... it's just in the US that it's nowhere. Android is leading over iOS, but for developers the Android market is much more fragmented hardware- and software-wise. Unless your App is very basic, you'll need to do some work to address all the variants of Android versions and hardware out there. Not to mention a lot of testing... these smartphone markets are starting to resemble the old phone markets with the multiplicity of handsets. Ah, the relentless march of progress.... making life harder for developers. And marketers.

One important thing to note is the impending release of Windows 7 Mobile, which has gotten positive early reviews. Microsoft's starting in a hole, but they may be able to develop some legs with this release. Oh, and it's still unclear what HP intends to do with Palm's WebOS software... smartphones? Tablets? The software had some very nice features, but it would need a healthy push to get back significant market share. Will HP take the plunge, or just let their acquisition gather dust?

Whatever marketing strategy you craft, you have to remain flexible since the hardware landscape and market shares continue to change.

Tuesday, September 28, 2010

Social Games Competition Isn't Casual

MAU =Monthly Average Users, in millions

Things are heating up in the social games arena. Zynga continues to expand, starting up a Japanese office and now a German office. Meanwhile, many other companies are eying the wheelbarrows full of cash that Zynga is dragging in, and wondering why they can't have some of that, too. This article surveys some of the players and what's happening.

Here's the fun part... Bobby Kotick of Activision seems to think he's sitting on top of the online world. Maybe he's spent so much time gaming he can't tell the real world from a virtual one, but I think that Activision is seriously behind in the transitions affecting the gaming business. Where's free-to-play? Where's social gaming? Where's digital distribution? Yes, Blizzard makes a mint... with a subscription MMORPG model that everyone else in the business is busy abandoning, and even they admit they'll have to transition away from at some point. Otherwise, Activision is sitting on a pile of old-style disc-based games sold in retail stores, and the costs get higher every year while the odds of huge sales get longer.

EA's been struggling for years, but at least they're making moves in the right direction. Activision looks to me like once-huge company Broderbund back in the late 80's and 90's... going from hit to hit and performing well, until one day the current hit expires and there is no next hit title. Oops.

Will Microsoft succeed in making Windows gaming popular? They're trying again, but with the launch of Windows 7 Mobile they may actually have some traction, since that integrates their Xbox Live audience into the phone experience. Will Apple continue their gaming onslaught into the living room through Apple TV? They haven't said so, but it looks like an obvious move with a big potential upside for them. Will Google TV do that as well? Again, it seems obvious, but nothing's announced so far. Same with all the rumors flying about Google's effort to replace Facebook, which has to include a strong gaming component (considering that gaming accounts for more than 40% of Facebook's activity).

What gamers would really like to know is if we're ever going to see some social games with the some sophisticated game play, some meat that hardcore gamers can sink their teeth into. Sure, it's coming... but Zynga hasn't been making all that money by targeting gamers. Competitors will likely aim for the biggest markets first, at least the well-funded competitors. Smaller companies might do very well by carving off a niche too small for the likes of Zynga to focus on.

The land rush for market share is under way, and it will be interesting to see who grabs the most acreage.

Monday, September 27, 2010

App Store Stats

It's hard to find good numbers on apps sometimes, so this article is a welcome find. You won't be surprised to learn that there are now over a quarter of a million different apps... and that games are the second largest category (books being the largest). This chart breaks down the apps by categories, and shows the price distribution. You won't be surprised to learn that the Free and 99 cent categories are the biggest (but there are over 86,000 apps at 99 cents, slightly more than the 80,000 free apps.

It's really impressive to note that this has all occurred in two years. What will it look like two years from now? I'd venture to guess that we'll see far more apps, making marketing even more important. Pricing may shift higher, unless advertising generates more revenue than it has so far (such a pricing shift may also be driven by the iPad apps, which are priced higher in general). I predict we'll also see an App market on Apple TV, which will spark explosive growth of that platform much as it did for the iPhone.

I wish I could say we'll see significantly improved App Store organization and search tools to make it easier to find apps, but I'm not holding my breath. I'd love to be pleasantly surprised, though. Apple? Anyone listening there? I wonder if you could sell search terms in your App Store...

Friday, September 24, 2010

Latest Figures On Digital Distribution

Reality is a bus... a damn cool one.

NPD has just released a report saying that in the first half of 2010, digital downloads outpaced sales of physical discs for PC games. There were 11.2 million full-game digital downloads purchased online compared to 8.2 million physical units purchased at retail. This shouldn't really be a surprise, given how the retail space available for PC games has been shrinking for years. Walk into a GameStop and check out how much space is devoted to PC games, compared to console games... or used games.

Who were the top digital retailers?,,,, and, based on units sold. For casual games,,,, and  All the usual suspects. It's interesting to note how highly EA and Blizzard placed, showing that the big dogs in publishing have clued in to the importance of digital distribution... though they still have a ways to go to dominate that segment, if they ever do.
It is important to note that the dollar revenue from retail was still greater than the digital sales; 57% of the dollars came from retail stores, obviously because downloads were discounted more easily. All of this news was tempered by the fact that sales were down 21% over last year (for the combined dollar volume of digital and retail), while unit sales were down 14%. Ouch. Obviously, once people were looking around online for titles, they found numerous free-to-play and free options.

Meanwhile, even with this data some analysts are attempting to calm the wild-eyed doomsayers. "We're all fine here, just a small reactor leak, we've got it locked down." Essentially, they think the growth rate is slowing, and it'll be a long time before digital distribution outpaces retail.

This report sounds more like wishful thinking than sound analysis. It overlooks the many advantages of digital distribution for both the publisher and the consumer. For everybody, that is, except the retailer. Publishers should be happy at the thought of reducing vast capital expenditures on retail packaging, shipping, and storage. Consumers should be looking forward to reduced prices on a regular basis once physical costs are stripped out of the supply chain.

If you wait for digital distribution to be larger than retail distribution before creating a strategy to deal with it, you have already lost. See music publishing... and now book publishing. Reality is a bus driving forward; you can be on it, or under it. Time to choose.

Thursday, September 23, 2010

Western F2P Design Not Good Enough?

If you're looking at the future of the game industry, a large part of it will obviously be the free-to-play (F2P) market. Why? Well, it's already a major source of revenue (at least in Asia), and it's growing rapidly all over the world. This article, while lengthy, is a good overview.

One of the interesting points raised in the article is the fact that Asian games generate a whale of a lot more revenue than Western games. Based on surveys of users, DFC concludes that Western F2P games just don't have as compelling a game design when it comes to getting customers to opening their wallets for additional content. This is a big issue for the future, and it points to the need for marketing and game design to work closely.

It's important to understand the needs of the audience when designing content for F2P games. Game balance is always a delicate thing, and you can easily generate anger if players feel the only way to compete is by buying items. Yes, the whole business model makes designing games even trickier... good news for game design jobs, as long as designers understand how to handle this new element.

The above image is from Dungeons & Dragons Online, which is now F2P. I'm not sure how well things are going with the transition to that business model; it must be even more difficult to switch from a subscription model to F2P, designwise. Once I get a new computer, I have a lot of such games to check out... this old beast is getting a tad slow to deal with today's games.

Wednesday, September 22, 2010

To PR, Or Not To PR

Microsoft has certainly had some great PR moves in the past, and some excellent marketing. But every once in a while you get a blooper like this one: In an interview with Gamasutra, [Microsoft Kinect spokesman] Tsunoda boasted that Kinect will "blow away" iPad sales. The iPad sold 1 million units in its first 28 days on sale, and sold 3 million in three months.

OK, I understand you're trying to boost Kinect sales. But comparing how Kinect will do with something that is only vaguely connected, and is three or four times the price, isn't saying anything more than "I'm bad at PR." If you want to throw down a gauntlet, say that Kinect will beat out Move sales... though you'd have to be pretty convinced of your product to make that claim. Move is, at least on the surface, cheaper than Kinect (though you really have to compare a pair of full sets of Move controllers to a Kinect ). There's enough differences in pricing and configuration that you'd have to be really precise in order to make any kind of reasonable comparison (how do you count bundle sales, for instance?).

Really, it would be better to content yourself with something like "Kinect is going to sell millions of units over the holiday season." That gives you some wiggle room... does Easter count as a part of the holiday season?

For those of you called upon to be a press spokesman when it's not your day job, resist the temptation to be snarky or boastful. Be thoughtful instead... ahead of time. Prepare some remarks for the inevitable question you know will be coming; go over your answers carefully and think about how they'll come across. If you get asked questions that aren't on your prepared remarks, make a note and say you'll get back to them later on that. And then do so.

Monday, September 20, 2010

Astroturfing Can Be Illegal

Astroturfing is the practice of fake grass-roots efforts, as in marketing firms or political consultants pretending to be just average folks. You can see the practice with iPhone apps, and the reviews.... many seem to be posted by friends and family, since their laudatory views are at odds with most of the other posts. This was driven home by the FTC in a recent agreement with a marketing firm over the practice, as detailed in this memo. Reverb Communications, a PR firm for video games, was caught red-handed posting reviews for clients in the iTunes store.

So the FTC is watching, and giving notice that it's not kosher for a person or company with a material connection to a product or company to post publicly without mentioning that connection.

I predict a sudden decline in the number of "OMG this game is AMAZING!" reviews in the iTunes store.

As marketers, you must be aware of these little legal niceties before you charge into social media marketing. It's OK to ask your friends, family and investors to post reviews, but they have to mention their connection. Which will tend to devalue their efforts. It's better for you to encourage the fans you don't know to post reviews, than to try and make up your own.

Here's what PR professional Dave Fleet posted on his blog: "Going into PR doesn’t mean giving up your own ethics." Marketing shouldn't, either.

Thursday, September 16, 2010

Apple Gaining On Nintendo

Since Apple doesn't release sales figures very often, it's hard to be sure. But one research firm has done their homework and says that over 40 million Americans use Apple devices (iPhone, iPod Touch, iPad) to play games... compared to Nintendo with 41 million DS installed base in the US. Plus, the latest sales trends are not exactly favoring Nintendo... Apple is selling over 1 million iPads a month, and more than twice that in iPhones and iPod Touches. Meanwhile, handheld sales are down 25% over last year's dismal sales numbers, which no doubt accounts for Nintendo's dropping the DS pricing by $20. (By the way, manufacturers reduce pricing only when they feel they need to because sales would be better. They will never do it out of the kindness of their hearts because their manufacturing cost dropped... they'll cheerfully pocket the additional profit as long as sales stay high.)

Nintendo is hoping the 3DS will revitalize their handheld sales. I think it will, to some extent; but Nintendo's market share will continue to erode as Apple's sales continue to increase with new models of their handhelds coming out every year. Also, the Android platform is growing like crazy, and games are an important part of that market, too. Nintendo may have a 3D display in the 3DS, but in many other ways the hardware is inferior to these other handhelds; processor, display resolution, orientation sensors, network connectivity, size of the software base, average software price an order of magnitude higher on Nintendo. It's hardly a fair fight any more, and it's only going to get worse.

Nintendo is losing the fight for developer mindshare, too. Even big developers are seeing great returns from iPhone software (like EA, for instance). Plus developers, large or small, prefer the unfettered market of Apple or Android to the regimented, bureaucratic, expensive and unpredictable Nintendo regime.

Bottom line: If you're already a Nintendo developer, you can probably make money continuing to do products for their handhelds. If you're not already a Nintendo developer, you should first make your products for Apple or Android, with far lower risk and expense. If you have a hit there, then perhaps think about a Nintendo version. If their handheld devices still matter by that time.

Wednesday, September 15, 2010

Strategies For Marketing iPhone Games

How do you overcome the obstacles to successful iPhone game marketing? The brief answer is persistence; don't expect overnight success, and keep trying. Try what? Here are some suggestions.

  • Have a plan. If you want to increase the chances for success, start by thinking about what you're going to do before you do it. Create a marketing plan; it will certainly change as it encounters reality, but this is better than no plan. This should also give you a budget and a way of measuring your marketing's success or failure. You can find information on marketing plans bouncing around on the Internet, or you can stay tuned; I'm working on a definitive marketing plan guide for iPhone products.
  • Analyze the competition. Spend some quality time looking for competitors to your product and analyzing them and their marketing efforts. How did you find them? How are they marketing their products? How successful is their marketing? What can you do better? Don't neglect their game design, either. How is your design better than theirs? How is it different? What marketing hooks are inherent in your design and artwork and title that your competition doesn't have? Sometimes you can leverage directly off of your competition's strengths: "We're #2, so we try harder." A thorough knowledge of your competition's game design and marketing makes a great guide for your game design and marketing decisions.
  • Keep up with changes. Yes, Apple is constantly introducing new hardware and software, and your competition is introducing new products and features all the time. Budget time to keep up with all that. Embrace it; some games (like Pocket God) have made it one of their key strengths. Apple introduces the iPad? You introduce an iPad-specific version of your game. Yes, the market is small right now compared to the iPod Touch or the iPhone, but it's growing rapidly. And since the competition is smaller, you may be able to snag a higher market share... and you'll be well-positioned as that market expands and new models are introduced. It's a marathon, not a sprint. Keep running.
  • Test and modify. I think Von Moltke said no marketing plan survives contact with the enemy, or something like that. Your marketing plan should be a work in progress, modified as you get information from the battlefield. If you bought a search term and you're getting terrible results, drop it. Try another one. If you get good results, spend more. Your Facebook page isn't dragging in the pageviews to your web site? Post more often, or try buying some banner ads... get a mention on a popular blog by donating a week's revenue to some charity that's important to you.  Keep track of your marketing efforts and how they are working, and revise until you find some that work. You may need to give your efforts sufficient time to produce results, but you should know that from your marketing plan.
  •  Embrace digital guerrilla marketing. What's that, you say? It's my term for the new wave of marketing techniques that are perfectly suited to entrepreneurs with time to spend but limited budgets. Use social networking, email, reviews, blog posts, cross-marketing, giveaways, event marketing for PR, and local PR to generate interest for your game. These are all topics I've covered before, and will cover again. These are also covered in various places on the Internet, and you may want to go spelunking in digital caverns to find some interesting advice.

Tuesday, September 14, 2010

5 Reasons iPhone Game Marketing Is Getting Harder

This should come as no surprise, but marketing iPhone games is getting more difficult, not easier. Here's five reasons why.

  1. Apple's no help. They've tinkered with the iTunes store a bit, but if your game doesn't happen to be either a top seller already or one of the employee picks, you're lost in the shuffle. It doesn't help when you go to the game categories and they are based on what the publisher says with no enforcement. So, for instance, the Roleplaying category is stuffed with social media games that have nothing to do with actual RPGs the way gamers understand them. We wait in vain for adequate search tools; something that gave you multiple parameters to check off would be nice, so you could find all games that included Nazis that were under $1.99 and had at least a 4-star rating. Their new Game Center holds promise for hooking up players... but that's only after you've already found the game. The only consolation, I guess, is that apps of all types have the same problem.
  2. The hardware and software is changing. The consoles stay the same for years... maybe decades. But the iPhone gets a new version every year, at least. The hyper-competitive smartphone market means new features keep getting added to the hardware. It's not just a faster processor or more RAM; it's new sensors, a new screen resolution, new cameras (now in front, too). You have to keep studying the hardware platform to make sure new features don't break your game... or allow the competition to get a jump on you. The iOS software keeps getting revised, too, and has new features as well as the possibility that your software may get broken in the upgrade. You can't just sit back and watch the money roll in; you have to keep programming and testing. And did I mention the iPad, and the iPod Touch?
  3. The installed base is fragmented. Because there's constant new hardware and software, the iPhone market isn't one big market; it's a bunch of smaller ones, with older hardware and system software to worry about. So you have to think about which versions you'll support, and make it clear in your marketing what is and is not supported. And inevitably narrow your market, unless your game is so bone-simple it runs on everything.
  4. The competition is increasing. The number of games in the App Store is somewhere north of 40,000, and it's going higher. More smaller developers and more larger developers are getting more titles into the App Store. It's harder to have a unique game, or even unique elements. And you're getting lost in the endless stream of new stuff.
  5. The competition is getting better. More and more competition is increasing the polish on the titles. And more and more established companies are realizing how important this market is, so they're bringing all of their formidable talent pools to bear on the development task. Plus, they have dollars to spend on marketing, and they can piggy-back marketing efforts onto their other marketing. It's not enough you're drowning in competitive games, they can start trying to drown out your marketing efforts too.
So what can you do about all of these things? Answers tomorrow.

Friday, September 10, 2010

Yup, Traditional Game Sales Are Bad

NPD reports that overall sales (combining videogames, and hardware) for August were down 10% over last year; hardware was down 5% and software was down 14%. These are the worst August sales since 2006. Looking at the year so far, total sales are down 8%, with the handheld software and hardware sector down an amazing 25%. No wonder Nintendo just dropped the price of the DSi and DSi XL by $20, though that seems like an insufficient response to the news.

Of course, these sales figures leave out PC sales (like the 300,000 copies of Starcraft Blizzard sold in August) and DLC, and social games, and mobile games. Two possible reasons come to mind: Either sales are down because people aren't playing games, or they're playing games NPD isn't tracking. I don't think gameplaying is going away.

I see no reason for optimism that traditional videogame sales will turn around. Even if you assume Move and Kinect are hits, and the 3DS kills in March, and all the console makers dropped their prices for Christmas... you're still left with games that cost $60 new. You can still play Halo or Call of Duty online instead of buying a new game. You can buy used games, and the quantity and availability is just getting better. There's plenty of DLC to choose from at prices way less than retail stores, generally. You can play games like League of Legends for free, and many other MMO's. Facebook games are free to play too. Thousands of mobile games are available for nothing or just a few dollars.

The universe has changed and it ain't going back. Sure, there will still be AAA titles with multiyear development cycles and development and marketing costs pushing $100 million (or exceeding it). But that won't be where the majority of the revenue lies, and this will happen in a few years. Time to start charting a new course, or build a new boat, or hop off and go overland for a while. The seas ahead look pretty stormy.

Thursday, September 9, 2010

Multiplayer Is Not Multipayer

It looks like August sales figures for the videogame industry are once again going to be down... perhaps 7% or 8% over last year. The reason, according to Michael Pachter, is that there are too many multiplayer online games that have gotten too good at keeping players engaged. So it's eating into their gaming time, and why buy a new game if you're already playing games as much as your time allows?

Yet another reason for publishers to change their business models to a subscription pricing, as if they needed any more encouragement. But it will be a bumpy transition, as gamers don't like change very much. I think you'll have to introduce new games with the new business model; shifting existing games over to a subscription mode will be very hard.

The hidden problem here is that this will change the fundamental design of the games, the development process, and the marketing. Marketing will have to be much more integrated with product development. The traditional antagonism between the two castes will need to be overcome. Which will also be a struggle at many companies... they may have to start hiring marketing people who are gamers, not just P&G marketing experts. Oh, the horror.

The illo above isn't from Halo? Hmm, well, it should be...

Wednesday, September 8, 2010

Pricing Digital Products

The strategy of pricing a product has fundamentally changed in the digital era. Pricing has become a powerful marketing tool with many options, and your choices can dramatically affect your bottom line. Pricing old products is no longer the same as pricing new products. The issue deserves attention as one of the most basic and important decisions you'll make about your business.

Pricing in the analog era was a fairly straightforward operation, and the goal was clear: You had to price your product so that you would cover all of your development costs, your production costs, your distribution costs, and your sales and marketing costs, and some portion of your overhead, and then have enough left over for some profit. Rules of thumb were often used to make things easier; we used to look for at least 7 times the printing cost of a book for the retail price, and felt good if we could achieve 10 times. (For RPG book distribution, we'd have to give at least a 55% discount off the retail price to sell the books to distributors, and usually it was closer to 60% with various added discounts.)

How is it different with digital products? Production and distribution costs have been minimized. You don't have to create a massive print run of books or discs; you just upload a file. And you no longer have to give up any margin to distributors or retailers, if you retail it yourself on your web site; or you may give up a certain percentage to Apple or some other platform. Still, it will most likely be less than 55%. You're left with the cost of developing the product and getting it ready to upload (which, for small businesses, may be mostly your own time) and the transaction costs (PayPal, for example, would be 30 cents plus about 3% of the price).

How does that affect pricing? Your customers certainly get understand that digital products should be cheaper than equivalent analog products, even if they don't know specific numbers. You can also use this to your advantage by driving sales higher with a lower price point. The key thing is this: You don't have to pay off a print run. What's important is overall profit, not your profit percentage. For some reason, this principle seems hard to grasp for publishers who have been around a long time.

Really, it should be immaterial if you're making a $1 profit on every unit sold or $10 profit or $100 profit; what matters is how many you sell of each. If you only sell one copy of a $100 product, you're not making more than $100. If you sell 100 copies of a $10 product, that's $1,000. If you can sell 10,000 copies of a $1 product, that's $10,000. Personally, if given a choice, I'd rather take the $10,000 than the $1,000 or the $100. Perhaps some people might sniff that I'm selling a cheap $1 product, but I probably won't worry about that as I'm depositing my $10,000.

Best of all, with a digital product pricing can be easily changed. Analog pricing is much more difficult to change; you have to price-protect those retailers and distributors who already have your product, you have to send out the information to the channel, and tell the customers too. With digital products you could change the price daily. Steam has made a mint by holding weekend sales of products... then they go right back to the regular price on Monday. So you can test out the effects of a lower price point, and if sales don't increase enough to cover the reduced income, then you can just raise it back up again.

I haven't yet mentioned one of the most important things about digital pricing: Pricing older products is completely open. If you have an older product that has already brought in enough money to pay for all of its costs, then you have completely free reign to price it however you wish. Give it away free to bring in new users. Bundle it with other digital products to improve their sales. Or just try dropping the price by 80% and see what kind of PR impact you can make, and how sales can skyrocket. If sales don't skyrocket, no problem. Just move the price back up.

The power of pricing can be seen with iPhone games. Many use a free product day as a marketing tool to get mentioned on various web sites that promote free titles. Every day, for instance, promotes free iPhone games. Just because they are free. The next day or so the games are back to $1.99 or $0.99 or $2.99... but in the meantime they've gained many new users, gotten their name out their, and perhaps sold some other games for the publisher.

I'll have more to say on digital pricing in a future post.

Tuesday, September 7, 2010

Used Games Triumphant

We've heard a lot of publishers complaining about the used games market, which has been mostly GameStop up to this point. In the past few months word has come out of used game efforts in 7-11 and Walmart, handled through a rack jobber. Now the situation is accelerating, with both Target and Best Buy announcing used game programs. Not great news for GameStop, especially in Best Buy and Target offer reasonably competitive amounts for the buyback.... because instead of just using the credit to buy games, you could be buying all sorts of other things. Flexibility is worth a lot to consumers.

The greater impact is to the console game publishers. Now it's looking like nearly 50% of the retail outlets for video games will be offering some sort of game buyback program. This means even more downward pressure on new game prices, and lower sales numbers since people will have more opportunities to buy lower-cost used titles. It all adds up to a very grim Christmas, with no recovery in sight for sales numbers.

Expect the publishers to respond with more efforts to get money from consumers, like charging for online access or going to subscription models. The development model is also going to be a target; with sales numbers dropping, 3-year development cycles look awfully long and expensive.

It's a great time to be pushing free-to-play games and low cost mobile games... if you have those. If you don't, it's way past time to be putting those together.

I believe that logo up above is on the backs of video game publishers...

Monday, September 6, 2010

Brave New World Coming

Thanks for sticking with me while my blog was on autopilot for the last two weeks. Now I'm back and starting to catch up with the latest news...

The console game market is facing an existential threat, and one of the killers is pictured above... the new Apple TV. Apple hasn't dropped the bomb yet, but this new product launch has everything ready. It's a $99 box that lets you stream movies and TV shows... and content from your iPad and iPod Touch and iPhone. That's interesting enough, if you think about being able to see an iPad game on your TV, with everyone using it as a controller (or their iPhones... think about the Scrabble game).

The real threat is when Apple decides to put the App Store on the new Apple TV. Suddenly, tens of thousands of games averaging $3 apiece will be available... soon, many of those in versions especially for the TV screen. And thousands of them are free, or free-to-play. Compare that, as Dean Takahashi just did, with what's available as downloads currently on consoles... mostly $10 or more titles, very few in number and very few free.

And that's not even talking about Google TV, which is clearly planning the same thing. Oh, and let's not forget Apple's new social network, and Google's sub rosa effort to outdo Facebook, both with amazing gaming potential. It could all happen in a heartbeat, with Apple rolling out the the new App store at any time.

Console makers are caught in a rough spot. They don't want to piss off game retailers by offering full-price games, nor do they want to piss off publishers by offering free games. They surely realize what the future is, but getting there means killing or severely wounding their current business model with much uncertainty about how fast the new business model would take over for it. And this in an environment where their typical development cycle is 2-3 years for a game, and in the new mobile/social game world it's 2-3 months or less.

The next couple of years will be a roller-coaster ride for the game industry. Hang on...

Friday, September 3, 2010

The Benefits of Fine Art

One thing that's often overlooked is the quality of artwork... not by customers, but by publishers trying to pinch some pennies. Yup, you can find some guys from a far-off land on willing to work for peanuts. They may even be pretty good. But you do get a number of benefits from working with a well-known artist.

First, you get some damn fine art, at least as voted on by the dollars of many people. You may not like it (personal tastes vary), but the artist has a fan following then plenty of people have made their opinion known with cold hard cash. And they may well buy your product just to have more of the art they love.

Second, you get the benefit of marketing to other audiences through the artist's own web site and other products the artist has illustrated.

Third, you'll very likely get a professional working relationship, with artwork delivered on time and to spec. Which are pearls beyond price when you're working on a deadline.

So look for a professional like John Kovalic or Mo Starkey or Liz Danforth... and pay them well, because you'll get your money's worth.

Thursday, September 2, 2010

Some PSP 2 Details

Reports from Gamescom indicate that the PSP 2 has a touch screen, and will be completely digital in storing games (no UMD). (The image above is just a concept... cool, but not necessarily what the thing will look like.) So Sony is once again charging into the retail lion's mouth... will they withstand the uproar this time? Remember, the PSPGo faced open rebellion by retailers, who reasoned that if they couldn't sell games for the device they wouldn't bother to sell it. (Hmm, I wonder how many of those same retailers sell iPhones...) Perhaps Sony has figured out a way to buy them off participate in the revenue stream this time. I'd love to see a unified download store for Sony, with music, movies, games... and open up the developer side of things to allow for many more games at a variety of price points. Oh, and don't forget books and audiobooks, too. Sounds like an iPod Touch? Well, yes, that really is the competition these days.

Sadly, I don't think it will happen that way. I expect Sony will price the PSP2 around $250, which certainly won't help. Perhaps if they could line up some gotta-have-it software... but that seems to be pretty difficult to do these days. Farmville, anyone?

Wednesday, September 1, 2010

Facebook Rats You Out

Yeah, Facebook Places, I'm talking about you. Some people seem to think it's a great idea. Personally, I think it's ruined by Facebook's usual sleazy implementation. They automatically set everybody up to be telegraphing their location, and worse yet, if your friends tag you someplace, that location will get broadcast too even if you have opted out of Places for yourself. You have to visit two widely separated spots in their settings to put the kibosh on this.

Of course, I understand why Facebook did things this way: if they have zillions of people signed up it's an attractive audience for selling to advertisers and marketers. So Facebook signed everybody up without their consent, and made it difficult to figure out what you're signed up for and how to turn it off. You know, if Facebook had never done things this way before I might cut them some slack. But this is how they've done things time and again; they usually take the method that promises to bring in the most revenue at the expense of their customers.

No wonder Google is trying to go after Facebook. They sense a market opportunity here. I hope Google does something that takes better care of privacy by default.