Tuesday, March 30, 2010

This Isn't Going To Work (part two)

Continuing from yesterday.

Activision, Electronic Arts, Take-Two, and Ubisoft have all stated that they're basically pursuing indentical strategies, releasing fewer games and focusing on "AAA" titles. Most of those "AAA" titles will be existing franchises.

In addition, buying a game now doesn't really mean you're buying the whole experience, because DLC releases will cost you an additional $10-15, at a minimum.

Want to resell your game? With all the one-time use codes included with new games, resell value has gone down.

DRM? Ubisoft now requires you to have a constant Internet connection to play their PC games. And EA's recently released Command & Conquer 4 has the same requirement.

The most recent mind-blowing announcement was that EA is planning to release "very long" game demos (3-4 hours, apparently) and charge $10-15 for them, then sell the full game later at full price.

All together now: holy shit.

Can anyone give me an example of one of the big gaming companies providing more value to the consumer in the last year?

I've been thinking about this for months, and sometime last week, I realized what all these data points mean: we're heading for a crash. No, not an Atari-scale crash, but it's still going to be very, very ugly.

First, let's look at it from a business standpoint.

We have the alltogether untenable situation of Activision, Electronic Arts, Take-Two, and Ubisoft pursuing the same strategy. Look, if one major company says they're going to focus on "AAA" and cut back everywhere else, maybe that could work. Theoretically, the company could spend more money on marketing--more than competing companies are doing. That could make their products stand out, even if they're not better.

I guess.

I don't like that approach, because it papers over the quality issue, but it might work.

Now let's have everybody pursue this strategy.

With fewer games from everyone, it becomes a marketing arms race. Much more is riding on each game, and even one failure is a disaster. Remember, too, that these games have to sell over a million units to even have a chance to break even.

In the "old" days, maybe a "AAA" flop would be recouped by a lower budget game that exceeded expectations, a game that could grow into a top tier franchise. With the big publishers, though, that second tier is essentially gone now. There's no fallback, no surprise hit.

For us, it means that these companies are going to flog existing franchises until their coats are foaming and they break down. Then they'll be shot. But there will be nothing to replace them, because there were no lower-tier franchises being groomed to eventually take their place.

Call it Death Race 2010.

Now, let's look at this from a consumer's viewpoint. Oh, and before I get started, please remember that I'm only talking about the big gaming companies here. For smaller companies and indies, I think the quality has never been higher for consumers. We have a wonderful, incredibly diverse selection of games, all at reasonable prices, and incredibly strong developer support.

From the big companies, though, we're getting the finger, for all the reasons I've already listed.

DLC, which is going to become more and more integral to the core game story. One-use codes, which impacts resale value. Increasingly intrusive DRM.

Oh, and the "pay demos." Seriously, EA, are you shitting me? I'm going to pay $10-15 for a demo that is supposed to persuade me to buy the full game at full price?

I'll tell you straight out: that demo doesn't exist.

The day I pay twice for a game is the day I lose my mind. Oh, but wait--I could provide valuable feedback to shape the final game, right?

What did that use to be called? Oh, right--a beta test!

Seriously, every time one of these companies announce something now, it should just have "THIS IS ASS FOR CONSUMERS" as a warning label.

So what will we do? We'll play indie games, and games from companies like PopCap. We'll still occasionally play the "AAA" game from Giant Software Company, too, but we'll play fewer of them.

In the end, here's what I expect to happen. There's no way that these four companies all survive with this strategy. At most, three do. More likely, at least two will fail. They'll be absorbed into the Collective of the companies that do survive.

Underneath the top tier, though, lots of money will be made, because there's lots of money out there. It's just not smart to pursue that money with gigantic budgets and epic amounts of advertising, though, because the startegy is too high-risk.

It's a gigantic opportunity, though, for someone who's smart enough to continue making the games that the big companies don't want to make anymore. Good games in the second and third tier are going to print money.

And maybe, over time, those big companies will realize that they've been doing it all wrong.

That was a joke--they won't realize shit.

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