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Recession Not The Problem: Too Many Good Games Are
The release date woes & over abundance !
by dkpatriarch
© 2008 David Hilton
I’m no video games economist, and maybe the financial logic escapes me, but does anyone else think that publishing most top video games for one holiday season is just plain suicide?
Let’s look at poor EA. I never thought I’d ever call EA “poor”, but unlike many other developers these days who are pumping out mainly sequels, lately they have been trying new Intellectual Properties (IPs) like Mirror’s Edge and Dead Space. Apparently these games, though widely acclaimed by game reviewers and many gamers, have not done so well in the sales department.
According to the website Azentium.com:
“Both, despite having predicted to become million sellers, have bombed. Dead Space on the Xbox 360 came in at number 10 on NPD Group’s monthly chart in October with a total of two hundred thousand copies sold, while the PlayStation 3 version failed to chart at all within the top twenty. Mirror’s Edge also had a very poor starting month, with neither version of game charting in the month of November. Despite the holiday season traditionally being a good time to release and establish new intellectual properties, both Mirror’s Edge and Dead Space performed poorly.”
The writer then goes on to say:
“The failures of Dead Space and Mirror’s Edge are likely due to the current recession. With the current economic situation, consumers as a whole are less inclined to invest in games that they are unsure of.”
While the author makes a good point about the dangers of new games like EndWar, Legendary, Dead Space, and Mirror’s Edge trying to go up against huge sequels like Gears Of War 2, Resistance 2, Call of Duty: World At War and James Bond, I don’t think the recession has made people more conservative about their choices of games.
In fact there are reports that gaming sales are actually rising with sales growing 18% in October and November figures also stronger in the U.S.. According to NPD research, U.S. retail sales of video game hardware, software and accessories were up 10 percent over November from a year ago, boosted by strong sales for the Wii, the 360, and Gears of War 2.
So why, with the exception of new zombie game Left 4 Dead, which has been in the top 10 (NDP figures), have new IPs failed to sell well if recession is not the reason?
It’s not the recession; it’s that there are too many games.
I believe it is due to release dates. Most gamers, in recession or not, have limited funds and if there are a plethora of great games released at the same time, most gamers would struggle to afford them all. So, they choose the sequels they know.
They make take note of games like Mirror’s Edge and Dead Space and buy them later when the price is lower or when their depleted holiday season funds are restored to better health, but otherwise they stick with what they know.
So why do game publishers continue to sell their games at the same holiday season year after year going up against all the other big hitters? In another article I argue that competition between the 360 and PS3 is good for gaming, but I would argue here that competition is bad. The competition between all the great games in the same season may very well kill off good new IPs and be costing publishers a lot of money.
In fact the article on Azentium argues that:
“And while EA’s intentions are in the right place, they simply come at the wrong time and would have been better served almost four years ago. Electronic Arts must recognize that in the current economic climate does not suit the establishment of new intellectual properties at all; otherwise, they will be doomed to failure.”
I disagree . . There simply is too much of a good thing.
I disagree. Innovation and high quality new IPs must continue to be made, but I would argue that they only don’t stand a chance if they are released during the traditional mass end of year onslaught of games. There simply is too much of a good thing.
So why do publishers keep aiming their games for the end of year season from September to December? Sales figures (as mentioned above) show that people tend to spend more at that time.
But are they spending more because of the season, or because most great titles are released then? Are people purchasing because that is when they choose to purchase, or because they don’t have much choice: the big games tend to be sold then?
Is the traditional release of top games pre-Christmas an antiquated view that games are generally for kids and bought by parents to put under the Christmas tree? That holidays is the only time when people play the games?
What about top titles that have been released outside that time period like Grand Theft Auto IV (originally slated for the previous Christmas period) or Metal Gear Solid 4? They virtually had competition when they were released and attracted great interest.
Even lesser known titles attract interest when gamers aren’t bombarded with too many games at once vying for their attention.
I would argue that gamers are a much older demographic with independent income that purchase games year-wide, and the end of year release date period is simply way too crowded.
It’s time to stagger release dates throughout the year and trust that the more mature gaming market will better afford buying games gradually instead of all at once.
For a new IP or lesser known title, it’s their only chance.
© 2008 David Hilton
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Filed under: Console gaming, Editorial, Xbox 360, Xbox 360 News | Tagged: christmas game sales, Christmas sales, Dead Space, EB christmas games sales, Game, Game Sales, GameStop, GameStop game sales, mature gamers, Mirror's Edge, NPD, older gamers, too many games
You’re qiet right there Doveman with regards to the small time period. In fact, the Sales Window for games is just 2 weeks . . within the industry, 2 weeks is the common period in which a publisher must get maximum sales, the first few days it must have solid sales and share holders watch those sales and start wondering if they need to shuffle their portfolio around if a “AAA” title game which was sold to them as an investment isn’t doing as predicted.
As that is how they invest, on predictions, not actuals. It soundscrazy to think that games have just 2 weeks to make a financial success, and it’s one of the main reasons why we can NOT and never should compare pricing of games (RRP) to that of say movies. Which basically have 3 ‘release periods’.
SO RRP are gauged on quick sales, high returns over short periods for games, which btw, have not grown over the last 1.1/2 decades, and in fact, have shrunk, both in off the shelf RRP and also gain through stiff competition, bargain company sales (Play-Asia ect) and trade-in. All of which were NOT available even several years ago (to the level they are now).
We have one major thing happening with games that publishers are NOTtaking into consideration on one aspect. That is, the expidential expansion of online gaming which in turn expands numbers for all areas of gaming, Single Player, Multiplayer, Online activity etc etc.
$ years ago the online community with regards togames across the board was decent, but since XboxLIVE, and now PSN has exploded, well beyond what they even though possible, and it’s growing daily, publishers MUST change their tactics if they wish to make the most of new IPs and even normal franchise.
Sorry for the rant btw.
I think you are pretty spot on.
It is easy to see that next year with Street Fighter 4 being released during the beginning of the year that it too is going to have a field day. Remember GTA4 set many sales record I too would state that it was due to the timing of release as well brand name associated with it.
But If Publishers continue to glutten up on the holiday season of releases than if a new IP is to contend with another addition of a sucessful IP then whey not release at a budget price.
It is a shame though that the performance of a title is determined by its first month of sales. If publishers and stock holders allowed for greater period to see sucess then new IP will undoubtley fair better. But unfortunately due to the economic recession its perform immediately or pull the plug. Companies can’t take the risk anymore of “give it a month or two”.
Thank you very much for the compliment. I would appreciate it if you could include me on your blogroll. I’ll have to make sure to include you in mine as well (when I can get the darn thing to work on me site
).
Again, I thank you for the compliments and I will make sure to drop by your site more in the future.
-Zen
Nice to have you drop by mate, and for the link-back, most appreciated. We trust you’ll drop by some more in the future . . If you like, we can pop you on our BlogRoll . . just let us know . .
We wish to support sites that ‘make a difference’ rather than simply have any site listed to make us look good in some way.
Great article btw,
Cheers . . . Grant
correction made mate
Updated*
I update my article to include a link to you site.
From those that I know, many simply are choosing to buy games they know, rather than ‘risk’ their money of new IP’s . They rent them, don’t give them the time they require and then diss them because the few hours they played them they weren’t like other games. So they don’t buy it.
If I had the money I’d buy as many games ‘to keep’ as I could, new IP’s especially, as they are what moves the industry on. Sequels do nothing more than feed money into the publishers purse . .they certainly do not innovate.
I originally intended on saying Mirror’s Edge has a very weak starting month. And yes, I would appreciate it if you could fix that in your article.
I would also like to thank you for challenging the claims I made in my previous article. We need more discussion about these types of topics as it allows the readers to get both sides of the debate. Sadly this doesn’t happen as much as needs to because most of the gaming press attack each other instead of actually discussing the issue at hand.
Also, I’ll make sure to include a link to your article as a rebuttal to my post.
- Zen
Hey Zen, thanks for providing a stimulating article to debate on! I bet the typo was the word “starting”. I wasn’t sure what you meant there…I’ll change it in my quote of your article when I figure it out!
I acknowledge your points above, but this year in particularly has had a HUGE line-up of stellar titles…way too many for one time of year and stressed budgets (recession or not).
Again, thanks for the interesting read.
Hey David, you make fairly good points; however, there are some that I have to disagree with.
Year over year game sales have been on an upward trend, but I believe that is due to the user base across all three platforms being significantly larger than previous years. I honestly don’t believe that in comparison to last year gamers are actually spending more, considering the current recession.
In regards to Left 4 Dead, I believe much its success can be attributed to the brand name Valve has established for them selves. Valve, since the release of Half-Life, has established themselves as the premiere FPS developer and as such customers feel safe investing in a Valve game. EA doesn’t really carry as strong of brand name because the markets they cover are extremely broad and the overall quality of the products varies significantly.
Also, releasing new IPs during the holiday season doesn’t necessarily lead to failure. Despite there being a considerable sum of triple-A games last year, games like BioShock, Assassin’s Creed, Rock Band, and Portal (PC) were able to sell extremely well. Every single one of those games listed aside from Portal, as we don’t know the exact retail figures, went on to sell at least one million units within the first three months of release. They succeeded despite the fact that games like Call of Duty 4, Super Mario Galaxy, and Halo 3 were released within the same time frame. The reason why those new IPs were able to succeed was because consumers had enough cash to buy the games they wanted as well as invest in “risky” games like the ones listed above.
With that aside, I do agree that publishers need to recognize that they need to spread the games out much more like Capcom has done with Devil May Cry 4 and Lost Planet.
Cheers,
Zen
Side note: I just noticed a glaring typo in my article, when I was looking at your excerpt. Thanks for helping me find it.