The Great Video Game Business and Financial (In)Stability Thread

mrtomaytohead wrote:
EvilDead wrote:
ClockworkHouse wrote:

StarCraft 2 and Minecraft are excluded.

Yep, well I think its safe to assume that both those games sell bajillions.

Well 35 million in the case of Minecraft, which is better than even Dota 2. That's just crazy. The article did precede all their data presentation with acknowledging the existence of all the other services and how that essentially makes their numbers not fully accurate.

Also, a number of indie games may be Steamworks, but still exist with DRM free / Desura versions, like FEZ. It has Steam achievements, leaderboards and cloud support, but can be downloaded DRM free from the dev's site if you buy it there (and get a Steam key).

Yeah, I was referring specifically to the ones that required Steam no matter where you bought it. That 35 mil for Minecraft is on all platforms. Wikipedia has the PC sales at 14 million. I'm sure there are a lot less one and done's like there are for DOTA though.

mrtomaytohead wrote:
EvilDead wrote:
ClockworkHouse wrote:

StarCraft 2 and Minecraft are excluded.

Yep, well I think its safe to assume that both those games sell bajillions.

Well 35 million in the case of Minecraft, which is better than even Dota 2. That's just crazy. The article did precede all their data presentation with acknowledging the existence of all the other services and how that essentially makes their numbers not fully accurate.

There is also the F2P stuff to consider with market health, specifically League of Legends here in the west.

http://www.gamespot.com/articles/ste...
http://www.forbes.com/sites/insertco...

Those are both from 3-4 months ago, but the takeaway is that the concurrent users number for League of Legends is almost equal to Steam in its entirety.

Would love to see the physical vs digital on the PC side.. does anyone still buy anything on the PC physically? I still get all the Blizzard stuff since I get the Physical Collector's editions.. pretty much everything else is 100% digital.. given the size of the PC gaming market and the overlap I'm still surprised there was such a violent outcry when the 360 was announced to have such a digital friendly model (granted who knows how much of the upside of their family sharing would have actually made it to market).

It's weird though I still find myself buying all my AAA stuff physically on the console..habit I guess...perhaps once the Xbox One can utilize a 4TB external HD I will switch to digital.

TheGameguru wrote:

Would love to see the physical vs digital on the PC side.. does anyone still buy anything on the PC physically? I still get all the Blizzard stuff since I get the Physical Collector's editions.. pretty much everything else is 100% digital.. given the size of the PC gaming market and the overlap I'm still surprised there was such a violent outcry when the 360 was announced to have such a digital friendly model (granted who knows how much of the upside of their family sharing would have actually made it to market).

It's weird though I still find myself buying all my AAA stuff physically on the console..habit I guess...perhaps once the Xbox One can utilize a 4TB external HD I will switch to digital.

Last PC game I bought physically was.. maybe Bioshock 1?

Most of the non-GWJers I know who buy PC games buy physical copies, and they buy them at places like Target and Walmart. I spoke with someone last summer who had only just discovered Steam because he'd bought Civ V and it was a SteamWorks title.

The physical market for PC games is probably a lot larger than people on this site would imagine, especially for top sellers like Blizzard games.

Well, one pretty clear takeaway is that PC gaming is doing very well indeed for at least some companies, and that there's quite a lot of money for many of the smaller outfits, too.

But it also looks like there are more games out than the market can really support; it's a big, successful platform, but there are limits.

Tanglebones wrote:

Last PC game I bought physically was.. maybe Bioshock 1?

Last one for me was Dragon Age: Origins.

ClockworkHouse wrote:

The physical market for PC games is probably a lot larger than people on this site would imagine, especially for top sellers like Blizzard games.

Anecdotal, but the few times I've looked to see what PC games were available at B&M stores over the last several years, simply due to curiosity, it seemed like at least 80% of the games on the shelf were from Blizzard. So it makes perfect sense that Blizzard would still have a large presense in the physical market.

MeatMan wrote:
Tanglebones wrote:

Last PC game I bought physically was.. maybe Bioshock 1?

Last one for me was Dragon Age: Origins.

ClockworkHouse wrote:

The physical market for PC games is probably a lot larger than people on this site would imagine, especially for top sellers like Blizzard games.

Anecdotal, but the few times I've looked to see what PC games were available at B&M stores over the last several years, simply due to curiosity, it seemed like at least 80% of the games on the shelf were from Blizzard. So it makes perfect sense that Blizzard would still have a large presense in the physical market.

Ah, I *did* get a physical copy of Dragon Age 2, since I got it with reward points.

Fun story: I recently bought Reaper of Souls from the Blizzard web site, literally thirty seconds after turning a $50 Target gift card over in my hand and wondering what to spend it on. It just plain didn't occur to me that, as a very recent and high-profile Blizzard release, it would certainly still be occupying shelf space at a B&M store.

Last game for me was Titanfall, but that's because I didn't want to wait hours to play it. Turned out installing it took long enough.

hbi2k wrote:

Fun story: I recently bought Reaper of Souls from the Blizzard web site, literally thirty seconds after turning a $50 Target gift card over in my hand and wondering what to spend it on. It just plain didn't occur to me that, as a very recent and high-profile Blizzard release, it would certainly still be occupying shelf space at a B&M store.

/facepalm

I did that as well (albeit with a gift card for another place) but didn't even realise I'd done it until you pointed it out.

I'm just glad that Ars is doing this, because most data about PC videogame sales has been solely focused on the fragmented data from physical retail sales...even in a lot of the business press. Last I checked (which was a while ago) NPD entirely ignored all online sales.

Really interesting interview with Brian Fargo:

http://www.polygon.com/features/2014...

Nintendo's numbers ended up worse than predicted: ¥46.4 billion instead of the predicted ¥35 billion.

That there is a half a billion dollar loss. That blows my mind.

Still, it'll take 50 years for Nintendo to blow through their cash.

garion333 wrote:

Nintendo's numbers ended up worse than predicted: ¥46.4 billion instead of the predicted ¥35 billion.

That there is a half a billion dollar loss. That blows my mind.

Still, it'll take 50 years for Nintendo to blow through their cash.

Someone at Polygon basically wrote an opinion piece about this fact. I thought it was a good read.

http://www.polygon.com/2014/4/29/5664588/nintendo-wii-u-struggling-death

I’m never going to argue that a Twitter presence or interviews will win a console war, but Sony’s Shuhei Yoshida keeps an active and often playful presence on social media, much to the delight of Sony fans. Sony’s ability to have fun with its fan base, take a few jabs at Microsoft here and there, and be approachable to both fans and the press shows just how much it has learned from last generation. The company isn't just doing well in hardware sales, it seems to be having fun doing so, and that feeling is contagious.

I agree with that 100%. The "feeling" I got from how Sony handled the DRM situation, the rollout of their new console, PS+ and the Vita are "hey, video games are fun, here are some video games at a decent price and here's what we have coming up next". They seem to have good momentum based on good energy and I don't think that intangible should be discounted.

t watches us from behind their veil of carefully constructed silence as savvier companies like Sony pile on social media wins, including developers speaking up in the company’s defense. Nintendo is changing its strategy to deal with its downward trajectory, but the result is a company that’s even more guarded and impenetrable. We're asking each other if Microsoft is going to kill the cable box, while the conversation around Nintendo is whether it's going to kill itself.
shoptroll wrote:

I really don't think there's much Nintendo can do at this point without sacrificing some major sacred cows.

I still like to wonder what would happen if Nintendo caught up technically. They're already losing money. Would it be insane to release a console that was technically more powerful than the PS4 and XBox One, was based on X86 architecture, making it easier to work with and more familiar, but with their stable of 1st party games? Would that garner them any more 3rd party support? At the very least the indie games that Sony is leeching off with the PS3, PS4 and Vita?

shoptroll wrote:

I really don't think there's much Nintendo can do at this point without sacrificing some major sacred cows.

Like what?

I mean, aside from the usual suggestion that they make software for other consoles, which simply isn't going to happen.

DSGamer wrote:

I still like to wonder what would happen if Nintendo caught up technically.

I see this a lot, and I feel like it misses the historical context in which the Wii U was released. The thing that people tend to forget is that Nintendo used to compete, and even lead, in the raw horsepower department. The N64 and GameCube were both technically more capable than their Sony counterparts, but they both got walloped in sales. So Nintendo released the half-step Wii and, in turn, walloped their competition due at least in part to being significantly less expensive to manufacture and develop for.

It makes sense in that light to release a Wii U that was less powerful (and less expensive) than the Xbox One and PS4. But unless they're willing to ditch the Wii U entirely, which I don't think they are, they're not going to "catch up" from a technical standpoint.

Insular company is insular. This isn't news.

I'm sure a lot of us want Nintendo to keep making hardware and short of a miracle they're not going to see a reversal on the Wii U at this point. The market just isn't that interested in it, and they have to basically ride it out until the R&D is completed for the next console.

We'll get some good things during the remaining Wii U years, but the Wii U is ultimately a continuation of the same hardware sales trend that started with the NES (the Wii being a major outlier). Each generation of Nintendo home console hardware sells worse than the predecessor.

I really don't think there's much Nintendo can do at this point without sacrificing some major sacred cows.

Edit: correction, the downward trend of Nintendo hardware generation over generation starts with NES -> SNES.

ClockworkHouse wrote:
DSGamer wrote:

I still like to wonder what would happen if Nintendo caught up technically.

I see this a lot, and I feel like it misses the historical context in which the Wii U was released. The thing that people tend to forget is that Nintendo used to compete, and even lead, in the raw horsepower department. The N64 and GameCube were both technically more capable than their Sony counterparts, but they both got walloped in sales. So Nintendo released the half-step Wii and, in turn, walloped their competition due at least in part to being significantly less expensive to manufacture and develop for.

I get that. But isn't it fair to say, at a certain point, that the Wii was an outlier. It nabbed "casual" folks and they never came back. They glommed onto it like they did just another trend and when they didn't find it interesting any longer they set it in the closet in a box next to their Shake Weight and Torso Tiger. That's not to say the Wii was a bad console. We're talking about the financial side here.

As far as the GameCube goes it was more powerful than the PS2, but how about the XBox? Also, I seem to remember that a big problem with the Gamecube is that they didn't have a DVD drive which, at the time, was important to mainstream customers. And that's really the only reason why I wonder about what would happen if they caught up. Notice I said "wonder" because I don't know if it's the answer or not. But it seems possible that if they were at parity with everything people want out of a modern console AND they had Nintendo games they'd be okay. With the Gamecube they had a proprietary disc and no DVD playback. With the N64 they went with cartridges while customers were getting comfortable with optical media.

So I guess when I wonder if they should catch up technically I don't mean that literally that's the problem, but rather that they refuse to catch up with what the mainstream market wants. Right now what the mainstream market seems to want are general purpose consoles that are powerful and can easily handle things like streaming video.

ClockworkHouse wrote:
shoptroll wrote:

I really don't think there's much Nintendo can do at this point without sacrificing some major sacred cows.

Like what?

I mean, aside from the usual suggestion that they make software for other consoles, which simply isn't going to happen.

Asking them to open up is the main thing I was getting at. I just don't think it's going to get them more sales because Iwata or Miyamoto start tweeting. At best it's a distraction.

I have to wonder how much of the dwindling numbers are due to the kids who grew up on XBox and Playstation 2 having kids now and are buying PS4s and XOnes for their kids because that's what they had. Nintendo's main market has traditionally been young kids and families, and is the main reason winter holidays are the main sales period for their hardware. Sony has also alluded to this fact when one of their execs said a weakened Nintendo is a concern for all the manufacturers because it indicates a shift in the market. It could be iDevices, could be something else. No one knows what's really causing the issue (there's probably a veritable cocktail of issues).

The Wii death was partially caused by the propagation of iOS and the shift of casual and puzzle titles to that platform. There's a reason why Popcap launches most of their games on iOS instead of PC or consoles/handhelds these days.

Edit: and the entire shovel ware / licensed tie in market that helped bouy the Wii casual market dried up and went to iOS as well. We gamers are probably happy about that, but it seems to have come at a cost.

At the very least the indie games that Sony is leeching off with the PS3, PS4 and Vita?

Do indies actually matter? Outside of Minecraft and Terraria, are any indies selling at a moderate rate? Keep in mind, Journey, which is the biggest, most critically acclaimed indie title on PSN doesn't have any publicly available sales stats.

Realistically, it's a drop in the bucket. It won't help Nintendo's bottom line, and it sure as hell isn't doing anything for MS, Sony, or Valve.

DSGamer wrote:

I get that. But isn't it fair to say, at a certain point, that the Wii was an outlier. It nabbed "casual" folks and they never came back.

You're saying that from the perspective of seeing that the Wii U performed poorly in the marketplace. Nintendo obviously didn't have that benefit of hindsight when developing the console.

My point is really that given the success of the Wii despite its relative lack of horsepower, it makes sense for Nintendo to have been behind the power curve relative to the PS4 and Xbox One. The situation they're in now is that they can't catch-up in relative terms without completely ditching the platform they've spent years and millions of dollars developing for.

DSGamer wrote:

With the Gamecube they had a proprietary disc and no DVD playback. With the N64 they went with cartridges while customers were getting comfortable with optical media.

There were definitely factors beyond raw horsepower that propelled the PSOne and PS2 ahead of Nintendo's consoles. That's second cousin to my point above: raw horsepower isn't necessarily what consumers are after, and I really think that was Nintendo's takeaway from their failures relative to the PlayStation brand and their success with the Wii.

As to what they do now, Nintendo needs to decide whether it's more hurtful for them in the long term to ride out the Wii U until R&D is finished on their next console or to cut that product line off at the knees and try to launch something new now. Their history suggests that they'll ride out the Wii U as long as handheld sales are decent and try again next gen.

Horsepower aside, I'd settle for an online service that's not half a decade behind the competition.

I just want achievements.

/troll

hbi2k wrote:

Horsepower aside, I'd settle for an online service that's not half a decade behind the competition.

I think that's definitely one of their problems. The shame is that the Miiverse is actually kind of cool. But they need to have standard friend and party functionality as well. I guess that's my main issue. I don't think they're in step with what the market actually wants. And that's a great example of where they're out of step.

I really don't we're ever again going to see a Nintendo system on parity with the rest of the pack. The sales performance of their systems would suggest that they can't afford to dump a ton of money in R&D and recoup it after a threshold like 50+ million units sold. At least when they traditionally sell their hardware between $200-300.

It is much safer for them to low-ball the specs, and if the system sells better than expected they collect the windfall and save it or invest it in R&D. The main reason they were able to invest in the Wii U game pad is because they essentially won the lottery with the Wii. Same goes for the glasses free 3D on the 3DS.

It also helps that they've tried selling their systems at profit or near profit (at least at the start) for the last two generations. The bean counters have to know that they are very unlikely to hit a home run with their console hardware, and not bleeding money from each sale seems like a sound decision.

I expect the next Nintendo system is going to be underpowered and likely a very conservative design. Given historical data we're going to see less than 10 million units for the next system. That doesn't give them a lot of wiggle room for the overall system design.

Also, specs and features have little to do with the sales performance. Nintendo's handheld line has successfully fended off competition from Sega, Sony, Apple and others despite lower specs and fewer features.

Edit:

garion333 wrote:

I just want achievements.

/troll

You'll take your Miiverse stamps and you'll like it!

shoptroll wrote:

Also, specs and features have little to do with the sales performance. Nintendo's handheld line has successfully fended off competition from Sega, Sony, Apple and others despite lower specs and fewer features.

I think that's because they're closer to what the market wants. They're off a bit now because the market wants to carry one device. But they're offering the cheaper device with more portable experiences closer to what the market wants. I love the Vita, but it's similarly out of step with the market. That's why I never wonder why the market doesn't love the PSP or Vita more. They're niche devices that I happen to love. 3DS and the DS are closer to the market demands.

But which market? The lifetime sales of 3DS are comparable to the Q2 '14 sales of the iPhone. (note: the 3DS doesn't have a 2 year contract that encourages people to upgrade on a regular basis)

Clearly Nintendo is keeping enough people happy with the 3DS, but you're right that the broader market wants their all-in-one devices.

Is there a point where Nintendo can survive by selling 10-20 million hardware without taking a loss? I remember in the lead up to the Wii they were pitching the system as the "companion" to the PS3 & 360. Maybe internally that attitude hasn't changed?