Could we go back in time?

I blogged yesterday that there is no way back….

Or is there…?

I have been lamenting for a while now the inevitable fall that would become the gaming industry as the retail landscape sucked it up as another casualty on its unending commoditisation of society. The only markets that have been able to resist the supermarkets and to a lesser extent the high street generalists are those that treat their products as brands, and make sure that they are continued to be held in the high stead that top brands should be. You will not find fashion and sports brand clothes in supermarkets. To the extent that, for example, discount sports chains have bought up the producers of some of the lesser brands so they now own the producers. Nike and Diesel and Adidas and countless other brands continue to maintain their margins by controlling the route to market much more effectively.

I have recently got into cycling (tangent coming – be warned!). I have found that my need to keep fit coupled with a dodgy knee that doesn’t like running as much as it used to, has lead me to try riding bikes as a means of keeping in shape. So when I decided to buy a new bike, I was surprised to find that the retail landscape follows much more the fashion model than the games model. I had decided that I wanted a Trek racing bike (they are the ones Lance Armstrong rides so they must be good!!!) but I could not buy one online!!?!? Surely, anything is available online now – I thought! As it turns out, however, Trek is only available through specialist dealers (of which there are many) but these dealers are asked by Trek not to sell their bikes online. Of course, competition law cannot force Trek to stop a dealer but the possibility of loosing your dealership keeps them inline. It also means that dealers don’t discount too much, as they don’t need to – where else are you going to get a bike from? Trek knows this dealer network well and can predict what each relatively small business will sell each season, so can adjust manufacturing largely to suit. There have been some issues this year where demand has outstripped supply but largely it is a relationship that works for manufacturer and retailer.

So what if this were to happen in the games market? Developers and publishers could distribute their games through a select group of retailers, licensed to sell said publishers product and conforming to a code of conduct published jointly that was visible to the customer. Customers would know that they were getting a quality product from a reputable and knowledgable retailer, fully backed by the publisher. In return the publishers would know largely how many games were going to sell and what they could make from a game, and if the specialist retailer were making enough of a margin, they wouldn’t need to sell pre-owned games. I asked my local Trek dealer if they sold pre-owned bikes (hoping I might get a cheaper deal on last years model!??!?). His answer – they don’t do it. Too complicated and time consuming when we make good money on new bikes!

A pipe dream? Probably, it would take a very couragoues sales director at a big publisher to decide that they weren’t going to sell games through all channels and were going to take only certain routes to market. But for the life of me, I cannot see any pitfalls for them if they did???

And in my previous blog, I was critical of a large publishers decision to change the way they go to market by increasing the price of Call of Duty Modern Warfare 2. Maybe, that sales director should just go the whole hog and treat his (or her) game and all subsequent games as the revered brand that they actually are.

Call of Duty will undoubtably be the best game of the year – don’t let it succumb to the retail market like all other previous big releases have. Don’t let consumers pick it up as a loss leader when they are buying beans and bread.

If publishers did look to control the route to market, Playtime may or may not benefit from that but I don’t think the publisher will loose out. Food for thought…..

The old debate and the new one….

Over the past few weeks I have been reading views from many in this industry we like to call gaming – all commenting on the impending release of Call of Duty 6 or Modern Warfare 2 or Call of Duty 4 Modern Warfare 2 or whatever it is called this week. When Activision originally announced that it was going to charge £5 more for the game when released, it seemed to go relatively un-noticed and I think some at Blizzard Activision might have thought they could dodge this bullet yet. But slowly and surely, most parties have been coming out and having their say.

To summarise so far, I think those in the developer ‘camp’ largely welcome the move and will look to the effect on the games sales performance to see whether they can follow Activision’s lead. After all, it wasn’t that long ago when we were regularly selling new release titles (not always triple A either – Turok on N64 anyone?!?!?) for north of £60.

The retail camp (for me at least) seems to fall into two sub-categories – those who take the view that increasing prices is anti-consumer and those who support price increases on the basis that they would like to return to the hey day of video gaming when they could charge the earth and the customer wouldn’t bat an eye!

So – three different views then. In camp one, developers (and publishers with them) argue that they are struggling to make profits in today’s crowded and competitive gaming market, so the move to increase prices is only natural if they are to survive. Of course, some have already done so – citing the currency fluctuations against the UK market as the reason for doing this. Nintendo’s Wii console increased in price to the trade earlier in the year and whilst we haven’t seen an increase in the retail price, there has certainly been less aggressive discounting and bundling on the Wii this year – even though the console is now available as free stock. I understand why developers and publishers are struggling but to a certain extent this situation is of their own making. For the last five years publishers have fought with each other to be the number one. EA for a long time held this crown and Ubisoft and SEGA have been pretenders to the thrown – all at one point or another at pains to point out to all who will listen that their market share is growing or was number 1 in the year so far or has been increasing year on year – or whatever. To drive this growth, they have been happy to commission title after title that is effectively a re-hash of a previous years franchise and publish licence after licence that is just a re-skinning of the same game with a different IP. So when gamers see this year after year, being asked to fork out more and more, they are bound to expect to pay less and less.

Supermarkets (and large generalist retailers) shall be know as camp two, and for years have played the role of the consumer champion so were happy to cater to this demand to pay less. By beating up the supply chain, as they have done in so many other industries, they could maintain their margins whilst offering the same to the consumer for less. Publishers offering marketing credits, campaign payments, volume discounts etc are only fanning the fire. Any retail buyer worth his or her salt will use the number of store fronts they have as a big battering ram on the publishers door. Give me the deal I want or I won’t give you the shelf space, store coverage etc you need for your second rate 2008 re-hash of four year old IP!!! Sounds harsh? – perhaps a little in the language but the point remains that as the quantity of titles published increases, the quality must diminish, and therefore the average price will too.

Don’t get me wrong – I have been as guilty as the next buyer. This is not a criticism per-se – more an observation. Economies of scale rule in the open market. Many would also argue – and I would be inclined to agree – that this is simply a sign of a maturing market and that market forces are coming to bear as technology barriars fall. More developers can do the work that only a select view were able to in the past, but that is nothing different to what has happened in a thousand other markets that have developed since time immemorial.

Camp three is the indie camp – watching all this from the outside looking in, hoping beyond hope that maybe at last after years of decline we might see an opportunity to charge customers more than we actually pay for games and make a bit of profit on new games for once. After all, those of us still here (or like Playtime, here but not in their original guise) and can remember back to the launch of the PS1 and the N64 (and others) would relish the opportunity to make those sorts of profits on new releases once again. Some have even linked this to the ‘old debate’ that keeps on raging, that is pre-owned games. After all, if we could make money on new releases again, then we wouldn’t need to offer the pre-owned route to our customers, would we. After all, it is a lot more complicated and costly to do in-store than simply selling 100’s of new release titles on release day at full retail and making 30% on each one.

But this is the nub of the issue – the market isn’t the same as it was 10 years ago. Things have moved on. Supermarkets have entered the game of selling games, general retailers too. They have taken customers away from specialists in the only ways they can – offering price and convenience advantages. Publishers (with developers in tow) fed this by conceding to retailers supply chain demands as they chased their own goals of growth and market share. Activision’s attempt to increase prices surely is a last resort in the face of inevitable downward price pressure. There can’t be any going back to the old days…..?

After the dust has settled on E3…

So the doors have closed on another E3, and once again I didnt get to go – but then again, I’ve never been so I don’t know what I’m missing!!! Which is probably for the best!

So, what did E3 tell us about what to expect in the next 12 months and beyond?

Of the big three, Nintendo was largely a case of more of the same. Their current direction is working very well thank you very much, so for them to say anything other than “we will continue to plough this furrow” would have been insane. Follow ups to Wii Sports, Wii Fit, and Super Mario Galaxy prove that they arent going to change anything. They know their market and they are sticking with it. During their E3 press conference and since, they have said that they would like to re-engage with hard core gamers more as well, but I cannot see that happening. We know hard-core gamers and they are far too entrenched in the Microsoft and Sony camps. Even if they do look up from their GTA, COD or FIFA session, Nintendo dont seem to be offering anything along their lines.

As for Microsoft and Sony, well, I think Microsoft just edged it but both have a lot to offer the core market of gamers that we sell to.

The top ten list that IGN AU put together sums it up just fine for me – most games will come on both platforms, and where one has an exclusive like Splinter Cell: Conviction, the other has Uncharted 2. Customers often ask us which is best – 360 or PS3? And we always say “Neither – you have to have both, if you are a serious gamer”.

Exclusives will always be a part of this industry and so the only way to satisfy the addiction fully, is to make sure you get your drugs from both Microsoft and Sony. Purists like me will also say you need a Wii for the Mario/Zelda hit – and if you ask my brother, he says you need SNES, Dreamcast, NES, Megadrive etc etc etc – but that is getting off the point. This blog is about the future, not the past.

Coming back to that, both Microsoft and Sony gave tech demo’s on their answers to Nintendo’s Wiimote. Both very clever and both designed to bring more casual gamers into playing games. I have to admit – I think they both have missed the point. Although I didn’t really see it myself until earlier this week when I reflected on another presentation – Apple’s keynote at their World Wide Developer Conference. They have had huge success in a very short period of time, selling 1 Billion apps to an install base of 40 million users around the world. Not all these are gamers obviously, and certainly not hard core gamers. What some are and will increasingly be, are the casual gamers that Nintendo have succeeded in selling to and that Microsoft and Sony are courting with their tech demo’s.

As a little example, let me tell you about the picture of domestic bliss that is the Rowbotham household. I only tend to play games on 360/PS3/Wii and occasionally my PC – depending upon the latest hit that catch’s my eye. So I am core gamer – no question. My wife however over the last couple of years has drifted into the casual gamer sphere so well canvassed by Nintendo. It started with Brain Training and moved onto a bit of Wii Fit and a lot of Professor Layton – all games that have been squarely aimed at this new market that Microsoft and Sony said they are following Nintendo into. The point – well, my wife isn’t playing any of those games anymore. I bought her an iPhone for Christmas as her old phone finally died, and since then she has found a whole new world of casual apps – she spends more time on Facebook as it is convenient on her phone but she has discovered a whole new world of games from developers like PopCap that are quick and cheap to download. And now she sits happily chilling out at the end of a busy day, iPhone in hand. All of which means she has hardly picked up her Nintedo DS and the Wii Fit has got fat!!!!

And for me, this is the most interesting dynamic. Casual gamers are by their nature casual – so they will also be non-committed and transient – they will quickly move onto the next big thing. And I reckon it might just be Apple who will take all these non-core gamers away from Nintendo (and Microsoft and Sony too). A big prediction I know but no-one will hear me when I say “I told you so” in a few years – so I can pretty much say what I like really!!!

If it does happen, where does that leave our industry? And the big three of MS/Sony & Nintendo. Well, interestingly, the core gamers are still going to be here – still wanting their annual fix of COD/FIFA and bi-annual fix of GTA etc – the market may not grow by the double digit points that some shareholders might crave but it will still be strong at its heart, more than treading water thats for sure. And interestingly, Microsoft and Sony are more likely to have something to offer these guys than Nintendo. I don’t see Project Natal type interfaces opening up the market for casual gamers as much as reinforcing things for core gamers, adding more ways to interact and making games richer and more involving experiences – for those who are already hooked.

If this scenario does play out, the biggest looser here could be Nintendo – who has less to fall back on. I have played and finished every Zelda and Mario game to date, but they don’t come along often enough to keep a company the size of Nintendo going – their current market is much more reliant on casual gamers. And if Apple can distract other users like they have my wife, well who knows?

How the other half live…

Just after my last post, about how you have to be big to survive and prosper selling video games, GAME release their figures for last year as if to underline my point. (OK – maybe they didn’t release these figures just to make me look good !!!)

Reading analysis of the news on the MCV website, they pulled out the fact that GAME for the first time reported their level of pre-owned sales.

Interesting – I wonder why they have done that now?

When you produce record results at the same time as many publishers have been having a tough time, I can imagine a few account managers raising eyebrows in their direction.

My eyebrows raised when I saw how low the figure was. For the record, Playtime’s mix was always around 45% pre-owned. As we grew, it dropped but in the early days it was over 50% – so to see GAME’s at below 20% shows just why they can go public with it. If you are a publisher berating specialist retailers for having their cake and eating it, the wind has been taken out of your sails somewhat.

I don’t know exactly what GAME’s market share is in the UK but I would guess around 30%. This means their 18% of pre-owned sales is approximately 5% of the UK market. Total pre-owned sales are probably going to be a bit more than that with all the Indies focusing on it but I would be surprised if it is 10% – after all, nobody else does it. The other 70% of retail is largely made up of supermarkets, and non-specialist toy and entertainment retailers – none of whom trade games (with the exception of HMV – who have just started).

So – pre-owned is less than 10% of the market. Not a lot, basically! Certainly not enough to drastically change the results for most hard pressed developers and publishers – if it were to stop.

NB – I have assumed that GAMESTATION’s market share is included in the figures that GAME announced.

View from the Counter

So that didn’t work then did it….

Over the last five years, my brother and I tried to grow Playtime into a profitable business by opening a new store every 6-12 months.

Why do that? I hear you ask – well, it was a defense mechanism as much as anything else, the bigger you are the more we could benefit from economies of scale – marketing with publishers, buying professional labels, carrier bags etc, professional branding and merchandising in-store – the list goes on. Five years ago, we also saw the bigger indies doing well – Software Store and Eplay were winning awards and seemed to be going from strength to strength.

So why didn’t it work? Well, we were going well until last summer, then some American banker invented the words “Sub-Prime” and “Credit Crunch” and by the time we came out the other side of Christmas, we just weren’t selling as many games as we needed too. That it meant we had to shut the business should come as no surprise really – we are in a recession after all.

It is ironic that of the 10 stores we had when we shut, nearly all would still be profitable – if they were run by an owner operator – like most other “indies” are.

We found that we could run a couple of stores fine on our own, but when you get more than 3 or 4, you need to employ managers to do it for you – and good managers cost money, and they need area managers to help them, and purchasing managers to buy stock for them, and marketing managers to support them, and personnel managers to advise them – and the list goes on.

When you have the costs of a head office to cover, you need a lot more than 10 stores to make it work. This is the crux – in retail you either do it all yourself as indies across the country still do – or you need to have national coverage, to cover the costs of running a full head office. From our experience, there really is no in-between.

Screenshots now on product listings

We are about to start implementing a series of updates on the website, the first of which has been to try and increase the amount of information we put into product listings.

We are now embedding a screenshots slideshow within new releases, so if you are thinking of pre-ordering something, you can see some screenshots of the title before buying. Not all titles will have them, it depends what the publishers release, but whenever we can get them, we will put them in. We are also working on putting video in too, and for the moment embed links to video that we host on YouTube.

Some of the titles we have put slideshows on include Resident Evil, Street FIghter IV and WWE Legends of Wrestlemania

Let us know what you think!!!

The most wonderful time of the year

So as Christmas rattles towards us at a spectacularly alarming rate, we find ourselves finally free of impending releases and can take a good look at what’s been released in the last 3 months and sift through the glut that publishers and developers decide to throw out all at the same time in poorly calculated attempts to wrestle your hard earned pound from your grasp and deflect said pound from rivals pockets. Some I’ve played, some I want to play, some I won’t play until they hit the bargain bins as I’m tight/skint but let’s have a butchers anyway. In the interest of keeping short attention spans happy (probably killed by this intro anyway) lets see if I can do it in one-line-review/prize description from Bullseye stylee.

Left 4 Dead – PC, Xbox 360

Shoot Zombies into a gooey mess while cacking your pants in this ultra-violent yet enjoyable multiplayer horrorfest.

Dead Space – PC, PS3, Xbox 360

Event Horizon meets Resident Evil 4. Oh yes. Oh yes indeedy.

Prince Of Persia – Pc, Ps3, Xbox 360

Foppish Arabian prince with American pretty boy accent runs along walls while avoiding death thanks to hanger-on token game female.

Midnight Club: Los Angeles – PS3, Xbox 360

A fun yet rock hard street racer which no bugger bought.

Fable II – Xbox 360

Want to get married, fart at people and do menial, mind numbing, tedious labor-intensive mini-games and not have to bother with good things like actual questing and getting fat loot and all the good things that make RPG’s great? Well, come on in then!

Tomb Raider Underworld – PC, PS3, Xbox 360

Posh bint jumps around temples looking for Thor’s armour and hammer while shooting endangered species.

Gears Of War 2 – Xbox 360

Musclehead marines take on underground army of musclehead alien types with chainsaw guns. Again.

Call Of Duty: World At War – PC, PS3, Ps2, Xbox 360, Wii

Call Of Duty 4 with added tanks, dogs and Wehrmacht.

Mortal Kombat Vs DC – PS3, Xbox 360

If you’re not going to kit out the Mortal Kombat chimps with Kryptonite rings so you can rip Superman’s head off you really, really shouldn’t have bothered.

More to come as I plough through them.

All new* Nintendo DS revealed. Sigh.

*Of course, when we say ‘all new’ what we really mean is ‘exactly the same with very little in the way of useful improvements’. Go go Gadget Kotaku Post!

During their Fall Press Conference today, Nintendo have – as expected – announced a new version of the Nintendo DS. Called the Nintendo DSi, it eschews the GBA slot (boo!) in favour of a slight downsizing (it’s a little thinner) and a range of improvements. The handheld’s screens have been enlarged, and will now be 17% bigger (at 3.25 inches) than those found on the DS Lite. As for the rumoured additions, both have proven to be correct, with “audio enhancements” made to the handheld, while it will also now include a .3 megapixel (640×480) camera. And that’s just the start of it.

The DSi also features an SD memory card slot, making it possible to take pictures with the DSi and then view them on the Nintendo Wii. The DSi features a built-in browser, and it’s possible to download games and keep them on the DSi.
For digital delivery purchases, there is a DSi Shop, from which users can download DSiWare from. Pricing categories for the DSiWare are: Free, 200 points, 500 points and “Premium” or 800 points. Customers will get 1000 free points to spend at the DSi Shop that are good until March 2010.

The DSi will be released in Japan on November 1. It will retail for ￥18,900 (USD$180), and will be available in two colours, white and black. It will be released in other

Image!

Apathy!
It’s hardly surprising that Nintendo have shoved out a revision of thier existing hardware as they’ve been doing it for years, neither is it surprising that it adds not much yet enough to get the hardcore, slavering fanchildren running to the pre-order mobile. Companies like Nintendo and Sony need to keep their products fresh, it’s common business sense, but how many devices does a person need that take pictures or plays music? Yeah the screens are bigger and they’re going for the whole convergence thing with the memory and connectivity with the Wii (which should have been made more of literally years ago), but no GBA slot? I can see why but that’s just rubbish.
Still, come spring 2009 people will be chomping at the bit for them.

LittleBigQuestionmark

I was fortuitous enough to receive a beta key for the LittleBigPlanet beta on the Ps3 (not that it’s on anything else) which gave me cause to do a little dance and actually turn on my Ps3 for the first time in about a month and half.
For those not in the know LittleBigPlanet is a platform game with a difference. Aside from being ridiculously cute and narrated by Stephen Fry, the feature that seems to be pushed to the fore is the level creator. This phrase does not do said feature justice. Let me explain:
The platforming section of the game is a very amusing physics puzzle based jump-around-and-collect things-athon with some freaky characters and some brilliant art direction. As you flounce around the levels you come across various collectables like stickers and objects and even costumes to kit out your Sackboy.
Ah, Sackboy. Sackboy rocks. There’s (seemingly, I don’t know if there’s anything more you can do with these) pointless things you can do with him, like change his facial expressions and move his arms about and what have you, but he’s so bloody adorable it’s sickening. I want a Sackboy toy, a plushie, a knitted doll, ANYTHING! Currently my Sackboy is a semi pirate with a ‘tache like Swearengen out of Deadwood.
Anyway, so yeah, you run about, collecting ’stickers’ and materials and whatnot, collecting little orby things for points and having wierd races on rocking horses on wheels. Wheelie horses? You get the idea. Once I’d had my fill of the floaty gravity platforming goodness I moved onto the creator.
Well I tried to. Instead I had to wade through 90 billion turorials. But you know what? It needed doing, because the creator is phenominal. It’s not just some weak little toolkit with which to create uninspired dross, this thing is phenominal! Seriously, the sheer amount of bits, bobs, odds, sods, gubbins, whatnots, thingummies and doodads you have at your disposal is amazing. And you can make textures by photographing them with the Eye Create camera. When I get through the rest of the tutorials I’ll post some more about it, but there’s something niggling at the back of my head.
Who wants to play this?
It’s amazing. It’s a truly brilliant piece of software, but the creator (which is what’s being pushed, directly or otherwise) requires a ridiculous amount of dedication to get the most out of. It’s simple enough to use, and most people will pick it up in an hour or so, but to make the levels that do it justice might require OCD levels of graph paper planning and though, not to mention the amount of time it’ll take to put it together and tweak it. Sony are pinning a lot of hopes on this, and I think it may be something of a disappointment to them. I hope it isn’t, because it deserves as big an audience as possible, but if they think they’re going to, say, drag Wii owners over to the PS3 with it they’re going to be sorely disappointed.

IT IS TRUE!! GIVE IT TO MEEEEEE!!

Obligatory collector’s edition too.

World of Warcraft: The Wrath of the Lich King on DVD-ROM.
The Art of World of Warcraft: Wrath of the Lich King, a 208-page book featuring never-before-seen images from the game.
An exclusive in-game pet: Frosty, the baby frost wyrm.
A behind-the-scenes DVD containing over an hour of developer interviews, the Wrath of the Lich King intro cinematic with director’s commentary, and more.
The official soundtrack CD, containing 21 epic tracks from the game, along with exclusive bonus tracks.
A mouse pad featuring a map of the newly opened continent of Northrend.
Two World of Warcraft Trading Card Game March of the Legion™ starter decks, along with two exclusive cards available only in the Collector’s Edition

Official WotLK page

My love of WoW at the moment is on something of a rollercoaster; some days I’m adoring it, some days I want to throw my PC out of the window through boredom and frustration. There’s the new patch coming before WotLK that actually contains some of the things that were supposed to be included in Lich King, like Inscription profession and barber shops and all that which is a bit odd. PTR patch notes are at the official site here