M-Rated Games And A Slice of Pie
Matt Matthews (who does consistently excellent analytical pieces) recently published an article at Next-Gen titled By The Numbers: Death of the M-Rated Game? As always, it's a good read, and I wanted to share a few excerpts, in particular, for discussion.Matt's focus was determining how many games of each ESRB ratings category are released, and comparing the compositon of each ratings group in 2007 with the numbers in 2005.
One of the reasons I respect Matt's work so much is that he doesn't depend on other people for data. He'll go dig for it himself, and if parts are messy (which is really, really frequent with this kind of data), he'll identify them as such.
In this case, he used Game Rankings as an initial cull, but he correctly notes that since there are plenty of E-rated games that don't get even a single review, the sample isn't going to perfect. That's okay, because there's still plenty to learn from what he's collected.
Most importantly, what the ratings show is that M-rated games are declining as a percentage of total games released on consoles--from 12% in 2005 to 6% in 2007. And in absolute terms, M-rated games have declined from 148 games released in 2005 to 79 in 2007. This in a period when the total number of games released across all ratings rose from 854 to 992 (up 16%).
That's not an insignificant decline from any angle. What's going on here?
Most likely: math.
If the pool of gamers equals 100, and the percentage of gamers who play M-rated games in that pool is 40, then it's easy to see that an M-rated game is not the ideal rating in terms of maximizing the potential market.
I don't mean to imply that "40" is the correct percentage. Whatever that number is, though, it's well short of 100.
That mattered less in 2005, when the Gamecube was in the process of dying. The Gamecube had a higher percentage of E-rated games than either the PS2 or the Xbox, and it failed. It would have been entirely reasonable to make the argument (then) that people didn't buy consoles to play E-rated games.
That argument was entirely reasonable. It was also wrong.
I think what people didn't understand (and I didn't understand it, either) is that there were a HUGE number of people who were curious about games, but how they were played didn't make any sense to them. It wasn't the idea of playing a game that turned them off--it was the idea of sitting on the couch with a controller in their hand, mashing one of twenty different inputs.
Hell, when I write that, it doesn't even sound like fun to me.
So even though we didn't know it, those people were out there by the millions, just waiting. The Wii came out, and bang--now playing games looks like play. Suddenly, to all those people we didn't even know were watching us, games make sense.
What it also does is dramatically change the number of people who mostly play E-rated games, at least on consoles. That means the percentage of gamers (yes, these new people count) who either don't play M-rated games or only rarely play them goes down substantially.
The absolute number doesn't change, mind you. It's just that publishers see an additional, giant demographic in play, and they can't reach it with an M-rated game. That pains them.
If a publisher makes an M-rated game, they will have to sell the game to substantially higher percentage of M-rated gamers to sell the same amount of copies as an E-rated game that sells to a substantially lower percentage. I know that's self-evident, but think about one more thing: longevity. I think that's where people don't understand Wii software sales, at least yet. I've noticed that when a Wii game gets traction, it sells and sells and sells. It's not unheard-of for a Wii game's total sales to be 10-15x what the first week's sales were, and that's just insane (Carnival Games, Lego Star Wars, and Mario & Sonic At The Olympic Games are third-party examples).
And they're all still selling every week.
It's going to be very, very difficult to do that with an M-rated game on any platform.
I'm not saying the M-rated market is dead. Absolutely not--some of those games are going to be monster, monster hits. But those monster hits also tend to be big games with absolutely huge development and marketing budgets. They involve years of development time and huge amounts of risk.
So we're still going to see BioShock and Mass Effect, and we'll still see new IP. What I think we'll see very little of will be risk. A publisher would be crazy, with the budgets these games require, to take a risk on new IP with revolutionary gameplay ideas. M-rated games will be in established, popular genres, and a game like Assassin's Creed is probably as "far out" as a publisher will be willing to go.
It would seem like a slam dunk at this point to say that all these demographic shifts are bad for the M-rated games market.
Are you kidding me? They're freaking GREAT for the M-rated games market.
Think past the short term. Think about how many millions of new gamers are coming to gaming because of the Wii, particularly kids. Eli 6.7 is an excellent example. Right now, we're playing Super Mario Galaxy, and it's great. In his teens, he'll be ready to play games like Mass Effect. So while the market for M-rated games might temporarily contract, in the long run, it's going to benefit, and every other rating and every genre will benefit as well. E-rated games are furthering the idea of gaming as a central part of our culture, and no matter what happens in the short term, that's going to matter much, much more.
Even better: when you greatly increase the size of the gaming pool, particularly among kids, you increase the number of future developers. More and better games with "E" ratings just improves the chances that more kids will enjoy games so much that they'll want to make their own.
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