Thursday, August 23, 2012


I wanted to follow-up on yesterday's post.

Like I said, all of those data points yesterday were complementary, not directly correlated. But there are plenty of other data points that would be easy to add: Sony's performance this generation, Nintendo's financial near-collapse in the last year, the terrible sales numbers for the Vita (and I'm not sure the 3DS is out of the woods yet, either, no matter what Nintendo says). Layoffs everywhere. Studios closing.

So yes, you can certainly say that the explanation for each of the data points is different, and that's true, but in sum, all of these incidents point to one overwhelming conclusion: in a business sense, the gaming ecosystem is very, very ill. Activsion is the outlier, but as the apex predator, maybe it can survive.

And just to be clear, free-to-play ("freemium", whatever) doesn't solve any of the financial issues--it just changes them. But as a consumer, damn, the model certainly has appeal. Think of it as a competitive situation, and thousands of games are competing with each other for your money, and these games are all "free". The question, of course, is how much content they'll give you for free? Well, if five companies are competing with each other, not much, probably. But with a kabillion, there are going to be companies at the best end of the distribution curve who are going to give you a TON of free content. And I'll be much more inclined to pay (and much more generously) for additional content, because I feel like I've already received substantial value.

I know it sounds incredible to even mention this, but do you remember that just two years ago, publishers were seriously talking about charging for demos? That's how totally clueless and out of touch the bigwigs of the gaming industry were with where the market was actually headed.


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