Industry Brutal For Developers

[Tami]

Game on: Brutal games industry forces Publishers to level up London 26 February 2007: The latest research from media analysts Screen Digest reveals an increasingly difficult environment for games publishers as rising development costs and small user bases means that return on investment in next generation games development is unlikely to be achieved before 2008. Screen Digest modelled the sales required for single and multi-platform releases to cover development costs in the key US market. The results indicate that only a tiny proportion of next generation titles are likely to achieve profitability in the near future. This analysis is from Screen Digest’s latest report “Next Generation Consoles: Games publishing, hardware analysis and forecasts to 2010” which examines global markets for next generation hardware and software. Screen Digest also surveyed major games publishers to assess their attitudes to next generation game development. The results confirm that an already uncompromising industry just got tougher; development times, team sizes and complexity have been exacerbated by increasingly demanding next generation games. Publishers have responded by employing risk reduction strategies, including outsourcing, releasing games on as many platforms as possible (including handheld and last generation consoles), making sequels to popular titles and producing games based on popular movies. [attachment=3060:attachment] Sony’s strategy has been to increase its own capacity to make games: it has doubled the size of its internal development resource since the launch of PS2. Sony Worldwide Studios now employ around 2,200 development staff across 14 studios, all but one of which are devoted to making games for PlayStation 3. Only Ubisoft and Electronic Arts can boast more staff devoted to making games. Given that gamers choose consoles largely because of the games available for it, Sony’s investment in its studios has given it a powerful weapon in driving PlayStation3 sales momentum. Although endowed with relatively large teams themselves, the other hardware manufacturers have responded differently. Microsoft has aggressively forged relationships with third parties, such as Epic, to make games exclusively for Xbox 360, a strategy that is starting to bear fruit with the success of Gears of War. Nintendo has focused on game play innovation and has shunned high-definition graphics, ensuring the cost of making Wii games has not increased as dramatically as its counterparts. Nintendo appears to be following a similar strategy to its handheld DS platform: accessible hardware and software designed to appeal to a wider range of consumers, such as young women who would not usually consider gaming to be part of their lifestyles. [attachment=3061:attachment] Report author Ed Barton commented “While the previous generation was quickly dominated by Sony’s PlayStation 2 across all major territories, this time we anticipate a more competitive situation where market share is likely to be split on a territorial basis. Xbox360 has a 12 month advantage, but whilst it has built a strong position in the US, it hasn’t been able to achieve the traction needed in Japan, and Southern Europe remains a challenge. Nintendo’s Wii has attracted an impressive level of third party support relative to its predecessor, but must maintain momentum into 2008 or risk declining levels of publisher support. We believe that a combination of Sony’s investment in next generation games content and a strategy to position PS3 at the heart of the broadband enabled, high definition living room will enable it to build the largest global user base by 2010.” About this report The data and analysis from this press release is taken from the new Screen Digest report, Next Generation Consoles; games publishing, hardware analysis and forecasts to 2010 by Ed Barton, Analyst at Screen Digest. The report analyses the key roles games catalogues and publisher support play in driving console sales. It assesses the publishing strategies of the platform owners and third parties in producing games to drive the transition from the previous to the next generation of console gaming.

[delirious]

Although a few of the XBox360 games rock, after more than one year, most suck as they are little more than forced incremental full price upgrades failing to fully take advantage of the new tech and creative possibilities.

XBox360 was released too early, and has only succeded in taking an initial lead over PS3 in the realm of internet gaming (Xboxlive).

Nintendo is surpassing MS in the internet gaming arena with the Wii (more units, wider demographic, better price, more fun), and (I predict) Sony will surpass MS Xbox360 on the high end dedicated gaming end (more fun through better games).

Alot of new developers are aiming for the broader (newer) market opened up by Wii, the internet (flash), and even phone games.

-delirious

[Tami]

I think your views are very valid. The Wii was intended to bring the family back into gaming, the controls are meant to be easy enough for the non-techie parents to enjoy spending some quality gaming time with their kids, and I think that on the whole, this has been successful. Many parents also like the fact that the Wii's controller and games make their gaming kids just a teeny bit more active simply because of the way the controller interacts with the console and the games.

Many of the upcoming games for Xbox truly are outstanding, and some are just like playing a movie.

Sony is an entertainment giant, and I'm sure that your prediction may come to fruition, and the PS3 will surpass the 360. However, the PS3's selling price at this time is out of reach for many families - even the Xbox is a budget killer, not to mention the prices of the games. I know how much the development technology for these games costs, so I do understand the pricing - to an extent. I also know how much of the shelf price actually goes back to the developers, so I think that we will see many more developers and publishers moving to a reliable, downloadable game model from secure stores. Xbox is already leaps and bounds ahead of the rest with XboxLive.

The mobile gaming market has given a stale casual game genre a good kickstart...now all they need to do is come up with more, original games and fewer Tetris and Bejewelled clones.