Siliconera Speaks Up: Does the Industry Need to Change With The Economy?

By Louise Yang . February 22, 2009 . 7:39am

Siliconera Speaks Up: Does the Industry Need to Change With The Economy?

When the economy started its downturn, the game industry didn’t seem worried. Everyone thought that like movies, games were recession-proof. Now that there have been several shut-downs and buy-outs, it’s obvious that’s not the case. What do you think the industry needs to do to help themselves out of this rut? Also, let’s not turn this into a console flame war. We’re all above that.

 

Siliconera Speaks Up: Does the Industry Need to Change With The Economy?Jenni: I think there are three ways to get people to keep buying games, even when money gets tight. The first thing to is fairly obvious – cut prices. Even a $5 price cut can make a huge difference. With Xbox 360 and PS3 games regularly costing $60, people are going to cut back and go for a cheaper DS, PSP, PS2 or Wii game.

 

The second is to make quality games. Enough with shovelware titles, or sequels that barely improve upon the original. If you’re going to make a port, remake, sequel or IP, make it something people won’t mind saving up for.

 

Last – add multiplayer. Look at Halo 3 and Super Smash Brothers Brawl. Both games are still in the top 10 forum list at GameFaqs, and part of that is because even after the main game is completed, you can still enjoy playing with friends. If a game has substantial single and multiplayer modes, people will be more likely to invest in the game because they can enjoy it alone or with friends.

 

Siliconera Speaks Up: Does the Industry Need to Change With The Economy?Louise: I agree with Jenni on this issue. With the current climate the way it is, a $60 game isn’t a casual buy anymore. People are actually starting to plan their purchases and weigh the pros of one game over the other. Because of the cost of 360 and PS3 games, more people, parents at least, are taking a look at DS, PS2 or Wii games which are more inexpensive.

 

It’s risky to develop an original IP right now, and this may be unpopular, but it’s smart for companies to produce remakes or ports. The meat of the game is already done in a remake, and the only work left is to port it and do quality assurance. Players are already familiar with the brand and those who haven’t played the game already may be interested in it on the new console. The money that companies make from those ports can then be filtered to new games once the climate changes.

 

Siliconera Speaks Up: Does the Industry Need to Change With The Economy?Ishaan: This is a touchy subject for many and something too many developers are afraid to embrace even when faced with the prospect of losing money: developing for Wii. People severely underestimate the time, resources and finances required for high-definition game development on the PS3 and 360. It isn’t easy or cheap, people! Now obviously, developing solely for Wii is not the smartest decision in the world, but one really wonders if it would have killed Capcom, for instance, to develop a Wii version of Street Fighter IV given that most people who would care about the game probably own a Classic or Gamecube controller, or would have bought one for the game specifically.

 

Considering how well simultaneous Wii SKUs like Shaun White Snowboarding and Call of Duty: World at War have done on the system, the “third-party games don’t sell” nonsense isn’t an excuse any longer. All it takes is a little pride in your work – by, you know, actually putting some effort into it – and marketing your Wii game appropriately instead of trying to sweep the fact that it exists under the rug. It amazes me sometimes how strongly our so-called “next-gen” developers are trying to oppose the only thing that makes the games industry even remotely “recession-proof.” Luckily, developers are catching on, and we’re going to see the fruits of their labour this year and the next.

 

Siliconera Speaks Up: Does the Industry Need to Change With The Economy?Spencer: I don’t think any industry is “recession-proof”. When people have less disposable income they consume less and that includes video games. One simple thing publishers can do is space out their releases better. This past holiday season there was a flood of high budget games released around at the same time. People can’t pay attention to and snap up every $50 or $60 title at once. In the aftermath some games get overlooked and fall into the bargain bin prematurely. Unfortunately for publishers and development studios sales typically spike in the first few weeks after a launch. This is partially due to planned marketing pushes and partially due to gamers moving on to the next hotly anticipated game. In the coming few months RPG enthusiasts are getting an explosion of localized games mostly from Japan’s holiday season. How many $30-$40, 20-30 hour games can a person realistically play at once?

 

From a business perspective, big publishers invest heavily during development and expect big returns. This model can be a risky proposition, especially when investing in a new franchise like Louise said. Large publishers probably can’t break from this pattern much since shareholders want big profits and the amount of money a studio can make from a downloadable game is limited. However, small studios and indie developers have a chance to fill a gap in the marketplace with relatively cheaper niche games. A fair number of big budget games try to appeal to the mass market by including something for everyone. In the end you’re left with a product that many people can relate to a little bit. Niche publishers can do the opposite: make a “boutique” or specialty game that appeal to a smaller crowd, but relates to them a lot. The best part about boutique games is you can tinker with a new concepts which could lead to new genres in the future. And in the end new genres and styles of games push video games forward.


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  • http://twitter.com/iidxgold scott

    Hmm… Did no one remember buying Phantasy Star III for $80 back in the day? I even remember buying my copy of Super Mario RPG at Toys'r US for $56…

    if you I think that now in 2009 since $1 is weaker than it was in the 80s and 90s, Paying $50-60 for a game isn't that terrible.

  • Nyanyaan

    The industry definitely allowed itself to get too caught up in the hype of games as the new 'blockbuster' medium and as stated, it is going to be very hard for that segment to make itself much cheaper as 'blockbuster' anything aint cheap to make with so much is expected of it.

    That such titles can't be killing each other off is clear. Look at the industry that games are most compared with — movies. The release season for mass market flick is no longer just between the two summer holidays. By Easter Weekend you are already seeing pretty major movies sneak out; for the past few years actual summer films have been hitting at the start of May, not the end. Yes, summer games were often only things like RPGS — the normal folks were out seeing movies and not hunched at home like a nerd you know — but that too has changed.

    The hobbyist gamer is going to be the last to stop buying. We understand games are best bought with true discrentionary funds or have long since chosen what side of the 'games or food' argument we are on when that next Atlus title pops on a release list somewhere. The apparent health of Atlus US is something I think is been noted — just look at their release schedule and remember we have yet to see a real summertime title announcement from them — in the number of companies broadening their niche releases.

  • daizyujin

    Well IMHO, (It is my opinion guys. You don't have to pick every damn thing I say apart.) the problem is that these companies want maximum return for minimal effort. That sounds good from a business sense, but nobody wants to buy something and feel like they were cheated. That is where me and my friends personally are. That is what we are getting now. From Nintendo's obviously cheaply made titles that sell due to mass market appeal to all the rediculous sequels from every company in the industry, you can talk about how recycling IP sells, but it is driving us away at least.

    Hollywood's quality has gone down the dumper by trying to be cautious about what is made. The constant recycling of IP and movies that are obviously made on shoestring budgets. This is the problem with the games industry of recent, they are trying to do the same thing and that is why we end up with shovelware.

    Lay off the established IP, Platinum games has the right idea. If you don't want to develop new IP, why even bother. There is no innovation in recycling the same tired ideas over and over again.

    One more thing. No company establishes goodwill by charging for stuff that is already on the disc. I like Street Fighter IV but their behavior in regards to the extra costumes is a perfect example of how to piss off your customers. This is the last thing they want to do. Don't go destroying goodwill by charging for things that were obviously finished (they are in the stinking arcade version), meant to be part of the package, and just pulled for no other reason than to make a buck at the expense of goodwill.

    Wii development is fine though, as HOTD Overkill proves. On the other hand I don't think advocating that as a fix is a good idea. The games are not THAT much cheaper. Especially when prices drop fast on HD games anyways. The last thing the industry needs to do is exclusively develop for only lower powered systems. The industry still needs to invest in new technology and brace for change.

  • Nyanyaan

    Yes Scott, but the broader game buyer at $60 today is a different beast. They are buying on the 'cool' factor of a a 2 minute gametrailers flik with 5 seconds of actual gameplay hidden behind CGI and screaming music that has nothing to do with the game. They are buying at $60 today when tomorrow they pick up a flat tire and the money cushion that would have covered that incident is sitting in their 360 or PS3.

    The value that they place on the game is different, as well. All they see is the real money spent, not the fun of playing or the pride of having something in a collection. It's why people get angry upon discovering that $50 spent on Madden 2007 is now worh $.50; they don't grasp why that would be when they are in a store surrounded by now $60 titles. That and the Madden was never bought as something to do together with friends or family — it was purchased as a babysitter.

  • Roto13

    Here in Canada, PS360 game prices recently rose to $70. That means prices have gone up 40% since last generation. I don't know who thought that would be a good idea, but I refuse to ever pay $70 for a game, and I refuse to buy a game with the MSRP of $70 new. I'll be buying a lot more used games from now on. I don't like the idea of my money going to any publisher that would try to price gouge me like that. How's that for backfiring?

    Another thing is that you can't make a game for $40 million and expect to make a profit. A game would need to sell 2 million copies to make up that cost. How many games actually do that? The craziest thing here is that there's a console that's easy and cheap to develop for, AND it has the largest install base, but developers would apparently rather go bankrupt than develop games for it. They're getting left behind and they have nobody to blame but themselves.

  • http://www.infinite-bits.com NickyD

    Better yet, remember buying Phantasy Star IV for closer to $100? At least… I seem to recall it nearly hitting that insanely high price. Or maybe it was just a used game store that had it framed, touting it as a legendary find. *shrug* Either way, those SNES and Genesis games were more expensive than games today. Chrono Trigger was $70, I'm pretty sure. I don't keep my receipts for 15 or however many years, though, so I can't check.

  • http://www.infinite-bits.com NickyD

    I think spreading out releases is the best way to keep sales constant, as Spencer pointed out. There's always a dearth of games from July-October; if you're not into RPGs, you'll only be looking for games around the end and beginning of the year.

    It's weird how the economy and recession and all that affects how we spend, but game companies keep going at each other's throats with releases of “big” titles next to each other, presumably to consume the sales of one or the other. Just one month. Gamers can wait one month between titles. We can play them to death in that time. Then we'll be ready for “that other big game”. Seriously, are there 12 AAA titles released every year? Just one a month — not 7 during November/December and 5 sporadically and coincidentally released near one another throughout the year.

    Timing is everything! Product, Price, Positioning, etc… Marketing 101. I missed a few P's, but I don't care. I have my degree.

  • blueblazer64

    when ppl see 60$ or 50$ in the price of a videogame they use piracy, what is now the major problem with games, cause they r too expensive.we all know is the bad way to get up the economy in the family, parents dont hesistate in buying a 10$ game than a 60$ one. kids get all the games they want and everyone is happy, obviously nintendo is making and end to piracy but microsoft and ps3 keep getting prices higger and more ppl tend to stop wasting money. they should get prices lower, even im starting to c the piracy way as a normal way to buy games=/

  • http://twitter.com/iidxgold scott

    whether the content is on the disc or not it shouldnt make a difference. I mean, if the DLC was a SF4 Hannah Montana music video (which was 200mb), i'd rather it playing on the disc, rather than sitting on my HD. As far as the alternate costumes on sf4 as DLC, its mostly cosmetic that doesnt affect the gameplay whatsoever.

  • daizyujin

    I hear you on the point of not wanting stuff on my HDD but then again I think that is more a problem because none of the three companies really thought about storage. This is a design flaw. Nintendo didn't take into account how many VC games people would want, and honestly, I am not even sure they knew they were going to do Wiiware at the beginning. Microsoft probably didn't anticipate XBLA games going over 50MB or even selling movies, and I am not sure Sony never expected Capcom to come along with 25 games that took up 5 gigs on your system. Storage is cheap. Especially on the Wii and 360 this is a major problem. At least Sony allows you to swap the drive, though that shouldn't even be necessary.

    You may be right that it is cosmetic but it is basically the same point as any other item that is sold piecemeal. Like printers without cables or the PS3 only coming with composite cables. The fact the content on the disc is proof that it was withheld intentionally to be pieced out over time. A better question to me about DLC is if I have all I need for $60, how can a company rationalize almost $20 for what you said, cosmetic additions. I know what you and everybody else says, don't buy it then, and I won't. That still isn't an excuse.

  • dreamhunk

    Pc gaming is ression proof and depression proof because there is free games on the pc. Games are alot cheaper too as weell. i can also hunt for a job on my pc

  • http://twitter.com/iidxgold scott

    I'm not talking about storage, I'm just saying, its just the way the company wants to handle their content. and i dont fault them for it.

    I mean, the Arcade version of SF4 has the alternate costumes in there too, but you cant access it unless you spent an extra 500yen and bought the NESYS Card… And thats PER character.

  • daizyujin

    “I mean, the Arcade version of SF4 has the alternate costumes in there too, but you cant access it unless you spent an extra 500yen and bought the NESYS Card… And thats PER character.”

    You have got to be kidding me? You buy that argument? When Ono made that I thought “Man nobody is that naive.” Man you are such a sucker. It is a total copout. I have some swamp land for sale if you are interested.

  • daizyujin

    If you have a decent system………I can't argue. The saddest thing is my computer is killer and only cost me about $300 to build. Sad that it costs me less to have a decent PC than a game console.

  • http://twitter.com/iidxgold scott

    What are you talking about? i'm not arguing anything; thats the way it is. Youre naive for thinking that no one would buy it, becuse people do. A LOT OF PEOPLE.

    A company would be a sucker of they didnt figure out a way to extend the value of their games beyond 100yen each play. So what if its already on the disc? It's not like the extra characters were DLC.

    By what youre saying, people playing Derby Owner's Club without cards should be allowed the same selection of horses as the ones that other people breed personally because all the horses are all in the game anyway…

  • http://twitter.com/iidxgold scott

    a $300 computer is not a gaming computer, and youre probably pirating windows.
    Consumers not paying for products? No wonder we're in a economic slump….

  • daizyujin

    I find it funny that you call me a thief. That is hilarious. Since you don't know HOW I managed to do it, don't assume the worst. I am totally legal. Reusing parts is legal you know. Getting parts OEM and such is legal too. I didn't say it was top of the line. And I reused over half the stuff in it. Computers are not as expensive to build if you do it yourself. Most importantly, not everybody runs Windows on their machine either.

  • http://twitter.com/iidxgold scott

    Sorry, i didnt know you were running some other magical OS that plays games. lol

  • eladbrit

    bought Chrono Trigger for 90 bucks before tax lol. was my good grade gift from mom. i love my mom…

  • EvilAkito

    Correct me if I'm wrong, but to my understanding, game sales haven't actually decreased. If game companies are truly experiencing financial woes, and they're not just laying off employees as a precaution, I'd simply blame the increased cost of game development. If the cost of creating a million-seller has drastically risen after the generation shift, then there are only two solutions: increase the price tag or expand the consumer-base. The former has already happened, but possibly not to the degree necessary to balance things out, although going any higher could have the adverse effect of decreasing sales. As for the latter, which means selling games to people who typically weren't interested, well, that's easier said than done. One could argue that Nintendo has already done it, but lets face it, the “expanded audience” gamers aren't buying the latest and greatest FPS, RPGs, survival horror games, etc, nor are they buying nearly as many games as the already established fanbase.

    I don't really have much of a solution, but I will argue that developers need to take a look at the great games of the previous console generations and wonder why those games were so good despite their budget. I'd imagine that developers are stuck in the mentality that quality = production values. If that's the case, then how do you explain why gamers love Mega Man 9? That one went back several console generations, and it was still a lot of fun. I'm not insisting that all new games need to be neo-retro, but it does go to show that the fun factor is the most important part of a game, and it doesn't necessarily require a large budget to achieve.

  • Nyanyaan

    Nor have I often put the words OEM and 'legal' together much, especially as regards here in the states.

  • daizyujin

    Listen guys, I am going to try to be calm here, but you two are acting like teenagers here. My computer is legit, legal, whatever you want to call it. Not that I even have to, or really should offer you two halfwits an explination. Don't sit here and try to make me out to look like a criminal to the rest of the world just to inflate your egos with stupid comebacks. If you are adults you should be ashamed of yourselves.

    Scott, I said not everybody uses Windows, I didn't say I didn't. I can transfer my copy from my old computer (which is just a bunch of spare parts) to the new one. That is legal, Microsoft allows it. Go check their EULA. There you go. Not that I owed you any explination.

    Nyanyaan, OEM is legal, go to any site like Newegg. They sell OEM parts all the damn time. Again, not that I owe you any explination.

    The fact is if you know what you are doing, have people that give you old parts they don't want anymore, and most importantly build it yourself, you would be surprised what $300 would give you. All I had to buy was the motherboard, cpu, and video card. The rest I was able to put together from parts from my old computer and others.

  • http://twitter.com/iidxgold scott

    i'm not out to label anyone, and yes i agree its childish. I dont even want to argue piracy or legalities or whatnots about OEM. I dont care.

    The only thing wrong about your post is- spending $300 on your existing gaming computer IS NOT the same thing as “a $300 computer” ESPECIALLY if youre comparing it to a $300 gaming system.

    Truth of the matter is (to your original post), a decent gaming computer is far more expensive than any gaming console right now.

  • http://www.nakedsushi.net/ Louise

    There weren't that many games out during the $70-$80 SNES cartridge days, which makes the price more bearable. I have no problem paying $80 every 6 months or so for a game that I'd play for a couple of months. But now, I'd have to think thrice to pay $70 for a game every few weeks.

  • http://www.nakedsushi.net/ Louise

    Spreading out releases is a great idea. I don't know why companies don't think about this more. Unless you're SURE that your game can compete with big guns like Gears 2 or MGS4, you schedule the release at a different time.

  • http://www.nakedsushi.net/ Louise

    You're right that most of it comes from the increased cost of the game and not recouping that cost through sales. Trying to pass that cost to the consumer, such as $60 PS3 and 360 games is going to make the games a hard sell for the more casual gamers.

  • daizyujin

    I find it funny that you call me a thief. That is hilarious. Since you don't know HOW I managed to do it, don't assume the worst. I am totally legal. Reusing parts is legal you know. Getting parts OEM and such is legal too. I didn't say it was top of the line. And I reused over half the stuff in it. Computers are not as expensive to build if you do it yourself. Most importantly, not everybody runs Windows on their machine either.

  • http://twitter.com/iidxgold scott

    Sorry, i didnt know you were running some other magical OS that plays games. lol

  • Happy Gamer

    bought Chrono Trigger for 90 bucks before tax lol. was my good grade gift from mom. i love my mom…

  • EvilAkito

    Correct me if I'm wrong, but to my understanding, game sales haven't actually decreased. If game companies are truly experiencing financial woes, and they're not just laying off employees as a precaution, I'd simply blame the increased cost of game development. If the cost of creating a million-seller has drastically risen after the generation shift, then there are only two solutions: increase the price tag or expand the consumer-base. The former has already happened, but possibly not to the degree necessary to balance things out, although going any higher could have the adverse effect of decreasing sales. As for the latter, which means selling games to people who typically weren't interested, well, that's easier said than done. One could argue that Nintendo has already done it, but lets face it, the “expanded audience” gamers aren't buying the latest and greatest FPS, RPGs, survival horror games, etc, nor are they buying nearly as many games as the already established fanbase.

    I don't really have much of a solution, but I will argue that developers need to take a look at the great games of the previous console generations and wonder why those games were so good despite their budget. I'd imagine that developers are stuck in the mentality that quality = production values. If that's the case, then how do you explain why gamers love Mega Man 9? That one went back several console generations, and it was still a lot of fun. I'm not insisting that all new games need to be neo-retro, but it does go to show that the fun factor is the most important part of a game, and it doesn't necessarily require a large budget to achieve.

  • Nyanyaan

    Nor have I often put the words OEM and 'legal' together much, especially as regards here in the states.

  • daizyujin

    Listen guys, I am going to try to be calm here, but you two are acting like teenagers here. My computer is legit, legal, whatever you want to call it. Not that I even have to, or really should offer you two halfwits an explination. Don't sit here and try to make me out to look like a criminal to the rest of the world just to inflate your egos with stupid comebacks. If you are adults you should be ashamed of yourselves.

    Scott, I said not everybody uses Windows, I didn't say I didn't. I can transfer my copy from my old computer (which is just a bunch of spare parts) to the new one. That is legal, Microsoft allows it. Go check their EULA. There you go. Not that I owed you any explination.

    Nyanyaan, OEM is legal, go to any site like Newegg. They sell OEM parts all the damn time. Again, not that I owe you any explination.

    The fact is if you know what you are doing, have people that give you old parts they don't want anymore, and most importantly build it yourself, you would be surprised what $300 would give you. All I had to buy was the motherboard, cpu, and video card. The rest I was able to put together from parts from my old computer and others.

  • http://twitter.com/iidxgold scott

    i'm not out to label anyone, and yes i agree its childish. I dont even want to argue piracy or legalities or whatnots about OEM. I dont care.

    The only thing wrong about your post is- spending $300 on your existing gaming computer IS NOT the same thing as “a $300 computer” ESPECIALLY if youre comparing it to a $300 gaming system.

    Truth of the matter is (to your original post), a decent gaming computer is far more expensive than any gaming console right now.

  • http://www.nakedsushi.net/ Louise

    There weren't that many games out during the $70-$80 SNES cartridge days, which makes the price more bearable. I have no problem paying $80 every 6 months or so for a game that I'd play for a couple of months. But now, I'd have to think thrice to pay $70 for a game every few weeks.

  • http://www.nakedsushi.net/ Louise

    Spreading out releases is a great idea. I don't know why companies don't think about this more. Unless you're SURE that your game can compete with big guns like Gears 2 or MGS4, you schedule the release at a different time.

  • http://www.nakedsushi.net/ Louise

    You're right that most of it comes from the increased cost of the game and not recouping that cost through sales. Trying to pass that cost to the consumer, such as $60 PS3 and 360 games is going to make the games a hard sell for the more casual gamers.

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