Monthly Archives: December 2005

2005 Video Game Sales Disappointing

Posted on December 16, 2005 by | 2 comments

Lots of news about game industry revenue shortfalls lately — time for a good summary.

Video game sales have dropped 18% year-over-year. Activision issued a profit warning for the third and fourth quarter. EA announced dour results in March and again in May, blaming weak sales of top titles (i.e. Need for Speed) and fierce competition. Being the two largest publishers, this news has relevance to the game industry as a whole. Now there’s also news of a vicious video game price war in the UK. Prices falling by 30%.

Much hand-wringing has accompanied this news. I must have read at least twenty articles (this week) declaring that a creative crisis is sapping the industry. (For the record, I agree to some significant extent, but I’m open to counterpoints.) Heavy blame has also fallen on the Xbox 360 launch, which has failed (dramatically) to meet customer demand. Can’t buy 360 games without 360 hardware.

Here’s what everyone should bear in mind. 1) Last year saw Halo 2 and GTA: San Adreas, which sold incredibly well. Tough comparison. 2) For literally years now, EA has been saying that this console transtion period would be a tough one — as they all are, to some extent. Some people are saving their money for a PS3 or Revolution, plus games. Some people want an Xbox 360 but can’t get one. That’s a temporary phenomenon.

What isn’t temporary is the industry’s continued inability to embrace female and older consumers (casual game developers notwithstanding.) I do hope that Nintendo’s Revolution strategy will change that.

Update: I forgot to mention that perhaps hardcore gamers are too busy playing WoW to buy new games. Silly me. 🙂

2 Comments

Posted in Articles of Interest

Hamid Akhavan: Application Economics in Mobile

Posted on December 15, 2005 by | 3 comments

Hamid Akhavan, Global CTO of T-Mobile, spoke at MIT yesterday. His presentation was very general, but I thought it relevant to those interested in mobile gaming:

  • Most successful mobile applications have landline replicas (email, voice services, short messaging), and mobile always commands a price premium. The number of successful mobile-only applications is very small (GPS navigation systems, etc).

  • There may be no “killer app” that is unique to mobile. Instead of focusing on new mobile applications, developers should strive to port popular landline applications to the mobile environment.

  • Prediction: before the end of this decade, all consumer internet access will take place via wireless networks, not landlines.

  • Characteristics of a good mobile application:
    1. Automatically knows what device a customer is currently using
    2. Automatically knows a device’s bandwidth capabilities
    3. Includes location-based services when worthwhile
    4. Offers protection from unauthorized use, access, and copying
    5. Ensures that content is presented in the best way on any device and channel
    6. Synchs with all other relevant devices automatically.

Akhavan’s prediction caught my attention. If all consumer broadband will soon be delivered wirelessly, a mobile gaming revolution is just around the corner. Right now, only consumers in hotspot-saturated major metropolitan areas can really enjoy pipe-rich mobile gaming (and even then, not constantly/consistently.) The end of the decade isn’t far off… time to start thinking seriously about the possibilities! Akhavan’s “good application characteristics” seem relatively applicable to games, too.

3 Comments

Posted in Articles of Interest

Star Wars Galaxies Community Unravelling

Posted on December 14, 2005 by | Comments Off on Star Wars Galaxies Community Unravelling

Wired looks into the apparent unravelling of Star Wars Galaxies (SWG) following the so-called New Game Enhancements (NGE) which fundamentally changed the game and offended many of the MMO’s remaining customers (estimated at about 200K, pre-update.)

LucasArts released the NGE with little notice and without soliciting much feedback from current customers on the full scope of the upgrade. SWG producer Julio Torres claimed that an earlier announcement might have gotten “lost” amongst others. (He seems really defensive, in general.)

Sony Online Entertainment President, John Smedley, posted an explanation/apology on the SWG message board. (It was conspicuously deleted — I’ve linked to a copy.)

Key quote: With the game the way it was we knew we would never be able to attract enough people to really keep SWG viable as a business… it wouldn’t have appealed to the really large Star Wars fanbase out there.. and frankly over time the existing userbase would have churned out as happens in any game like this… The real purpose of this post is to ask for your help. In this thread, could you please list the top issues you see needing to be addressed in the short term. — better late than never?

Smedley also gave a (more tame) interview to Gamespot.

Only time will tell if LucasArts/Sony made the right call here, but it seems unlikely. MMOGs, like all other social constructs (i.e. neighborhoods, companies, etc) develop a fixed culture. Changing that culture is very hard; changing it without a major, extended socialization effort is near impossible. People get married in SWG … think they might get a little attached to the existing system?

Comments Off on Star Wars Galaxies Community Unravelling

Posted in Design / Production, Marketing / PR, MMOG

MMOG Players Overlook Poor Customer Service

Posted on December 13, 2005 by | Comments Off on MMOG Players Overlook Poor Customer Service

Guardian GamesBlog spotted 15 ethnographies written by Trinity University students, exploring sociological issues in MMORPGs. One student determined that the majority of MMOG players are willing to tolerate bad customer service if the game itself is generally fun. This jives with my personal experience; if I had held World of Warcraft to normal levels of expectation for customer service, I would have quit the game within weeks. The vaguely “addictive” qualities of MMOGs surely have something to do with this — it’s hard to quit a game when you’ve invested so much effort into it (and have built so many relationships.)

Still, it is probably unsafe to assume that customer service will always be a negligible factor in player retention. Even if personalized customer service is hard to provide profitably, automated help systems have plenty of room for improvement. (Some commonly reported errors, like finding yourself physically stuck in-game, should never require human assistance.) A greater degree of faith in user honesty (re: complaints that require in-game restitution) is probably appropriate, too — at least in the absence of better automated help.

Not that the handy-dandy Customer Service 3000 isn’t doing a great job. *grin*

Comments Off on MMOG Players Overlook Poor Customer Service

Posted in MMOG

Pre-Owned Game Sales Strikes a Nerve

Posted on December 12, 2005 by | 4 comments

More industry grumbling about the impact of used video game sales by major retailers. UK publishers are making vague threats to “do something about it.”

First, let’s be clear: this problem is not unique to games. Most durable physical products have an after-market; many even have dedicated resellers. Think about used book stores, second-hand furniture outlets, etc. Can you imagine IKEA complaining about the resale of its furniture?

To defend their position, some game industry veterans are claiming two distinctions: 1) games require technical support, which costs money to provide, and, 2) primary retailers in other industries don’t support pre-owned trade (i.e. Barnes and Noble does not sell pre-owned books.)

Both of these defenses fail upon cursory inspection. While PC games may carry a notable tech support burden, console games aren’t quite so troublesome. More to the point, electronic goods (such as stereos and computers) are often resold and carry an arguably greater tech support burden! The consumer electronics industry manages this problem with a nifty little thing called a time-limited warranty.

As for primary retailers supporting pre-owned trade … how about Amazon? You can buy most anything used or new, right from the same page. And how is this even relevant? You think people can’t find used games if they really want to? Is eBay a well-kept secret?

Let’s not forget that one of the primary drivers behind the pre-owned game market is price. Specifically, the high price of new games. What’s a guy with $30 in his pocket to do? Maybe instead of griping, game publishers should consider offering a few more decent, lower-priced games. (It would help expand the game market, too). And if compelling online services that enhance gameplay (and extend the life of the game) are introduced, consumers might never be willing to sell their copy in the first place.

It would be great if all users felt so thankful for games that they were willing to buy them first-hand. I personally make a point of doing so in order to support the game industry. But enough wishful thinking. People feel entitled to buy and sell used goods. If game publishers clamp down on the practice, they risk offending the mass market in the same way that music publishers managed to. “Those who fail to learn from history…”

Rant finished. Some related information: Best Buy started evaluating pre-owned game sales back in September (probably because EB reported over 40% of its profit from the category.) Also, see GamerDad’s I’ll Resell If I Want To. Mark Reins (Epic) wants retailers to share resale profits with developers — and the incentive he’s offering is…? (“It’s better for the industry as a whole” probably won’t impress retailers.)

4 Comments

Posted in Business, Platforms

Interesting News of the Day

Posted on December 12, 2005 by | 2 comments

There was so much interesting news today that I’m temporarily forgoing self-imposed rules against link farming:

2 Comments

Posted in Articles of Interest

VUG Permits Unofficial King’s Quest Sequel

Posted on December 9, 2005 by | Comments Off on VUG Permits Unofficial King’s Quest Sequel

Recognizing the value of active fan participation in media, Vivendi Universal Games has granted a group of dedicated volunteers the right to complete and distribute a sequel to the much-beloved (but discontinued) King’s Quest game franchise, so long as they do not use the King’s Quest name.

The volunteer group, calling itself Phoenix Online Studios, was initially ordered by Vivendi to cease and desist all activity. A movement to save the sequel was started, and apparently VUG took notice.

First: many congratulations to VUG for making this rare move. The vast majority of entertainment companies would never have relented.

Question: was it necessary to prevent the group from using the “King’s Quest” name, as opposed to simply requiring them to put “Unofficial” in the title? Perhaps, in exchange for use of the name, the developers could have been asked to require players to purchase the “King’s Quest Compilation”, which VUG is releasing in early 2006. Counter-Strike drove sales of Half Life in large part because you needed to buy Half Life to play.

Comments Off on VUG Permits Unofficial King’s Quest Sequel

Posted in Legal / Politics, Marketing / PR

Neopets: Yup, Still Every Advertiser’s Dream

Posted on December 8, 2005 by | Comments Off on Neopets: Yup, Still Every Advertiser’s Dream

Wired just published a good in-depth article on Neopets, a site that enables kids to enjoy virtual pets. Members play simple games to accumulate virtual currency which can then be spent on pet maintenance and upgrades. Neopets was purchased by Viacom in June ’05 for $160M. Article highlights:

  • 25 million users worldwide; 2.2B pageviews per month
  • “Second-stickiest site on the Internet” according to Media Metrix
  • Now available as stuffed animals, board games, trading cards, console games, and soon a feature film.
  • Revenues are primarily ad-driven via deeply-integrated brand/product placement, i.e. McDonald’s: Meal Hunt (you search for lost McNuggets). Members are also exposed to movie previews, market research surveys, etc. In some cases, even the virtual trophies for winning a game are branded (i.e. with the SweeTarts brand).

I dug up another article with some impressive placement examples. Site users, wanting to buy gifts for their pets, actually got worked up over a limited supply of virtual Mattel DivaStarz dolls. Product trials of Heinz EZ Squirt ketchup jumped 18% after inclusion in Neopets.

All of the incentive systems in Neopets can be found in other games that appeal to other market segments. ClubPogo users (the majority of whom are adults) work like mad to win virtual “badges” and currency that have no tangible value. MMORPGs, played primarily by hardcore gamers, also feature much-desired virtual currency and status symbols. At least for now, MMORPG currency is unique in its spontaneous realization of real-world value.

Lastly, there’s some controversy about the scope of the advertising in Neopets.

Comments Off on Neopets: Yup, Still Every Advertiser’s Dream

Posted in Ads-in-Games

EA to Acquire Jamdat

Posted on December 8, 2005 by | Comments Off on EA to Acquire Jamdat

EA is acquiring Jamdat, a top publisher of mobile games, in a deal worth about $680M. In tangenially-related news, EA also announced an exclusive partnerships with Indian wireless publisher Indiagames. Nothing like scale, clout, and a fat wallet to help make up for lost time.

Comments Off on EA to Acquire Jamdat

Posted in Articles of Interest

Dance To Your Own Beat (Literally)

Posted on December 7, 2005 by | 1 comment

Oh happy day … I’ve spotted the convergence of two of my favorite topics: physically-active games and user-generated content. 🙂

Codemasters has announced that Dance Factory will be available for purchase in April. Dance Factory is DDR with a twist: game content is auto-generated using a player’s own music collection. In other words, you can dance to anything you own (or create!) I wonder what would happen if you popped Barry Manilow in the drive…

This screenshot shows that the game has a definite emphasis on exercise: it displays “calories burned”, “equivalent jogging”, and “equivalent swimming”. I wonder if this might almost be too much information? I think the fitness angle is extremely important, but it’s kind of a downer to think about jogging when I’m looking for fun. More of a downer if I play a quick game and burn hardly any calories. Maybe there’s another way to communicate this information? Doritos incinerated, perhaps? Gotta choose a small food unit to keep the reported numbers high. 🙂

BTW, Codemasters has also produced Music Generator 3, in tandem with MTV. Good example of the correct way to fuse consumer brands with video game content — sensible and relevant to the gameplay.

1 Comment

Posted in Serious Games, User-Generated Content