- Nintendo sieze 30,000 R4 and similar devices worldwide so far this year. What an embarrassing press release to put out. It says Nintendo fail. 30,000 seized is like spitting in the ocean to raise its level. The DS is rapidly losing viability as a platform to develop for and there is nothing Nintendo can do about it. Time for DS Mk2 with some anti piracy protection.
- Nintendo profits up 34%. Is it time to sell those shares yet? People have been predicting that the Wii bubble will burst soon for a long time. My thoughts are that online limitations due to lack of hard drive and no HDTV support will reduce its credibility as a console in this generation. However as a novelty toy it has a long life left. Nintendo could probably sell this for $100 (£50) and still make a profit.
- John Riccitiello puts his money where his mouth is with 40 Wii and DS games under development. Looking at the previous two news stories you have to wonder. But then he gets paid a fortune to run a multi billion pound global corporation and I write this blog.
- EA Q1 loss $95 million dollars. After the last story you could see where this was going. We are approaching the peak of this console cycle. EA have a bucket load of AAA franchises. The industry has grown enormously over the last 12 months. Big publishers like Ubisoft are making record profits And we get this. Maybe they are shipping pallets loaded with $100 bills to Robert Mugabe, it is the most logical explanation.
- Future Publishing revenue growth just 1%. Adjusting for inflation this means that they actually shrunk. When the game business is expanding and booming like crazy. Yes its the gradual death of paper media and Future’s previous blind long term strategy when it came to the interweb. They can turn it round but they need a radical approach.
- Sony Q1 Playstation turnover $2,166 million, up 16.8% on last year, with profits of $51 million. This is good news for the industry and reflects lower manufacturing costs, huge PSP sales and a partial recovery in the previously dire PS3 position.
- In Japan there has been a huge drop in Wii and DS sales. DS software sales have halved (no surprise with rampant piracy). Could this be the beginning of the bubble bursting? Year on year Wii sales are down nearly 50% and DS sales are down nearly 75%. Only Wii software sales are up and you would expect that on a larger user base that hasn’t yet been cannibalised by piracy. Expect new Nintendo machines soon.
- Microsoft to buy Take Two rumour. If this comes true there will be Harikiri in the Sony boardroom as GTA becomes a Microsoft exclusive.
Entries from July 2008 ↓
July 31st, 2008 — News analysis and background
July 30th, 2008 — The platform holders
You have to feel sorry for the people at Microsoft working on Zune. They have what many consider to be Microsoft’s finest product and yet they are being shot out of the water by Steve Jobs and iPod/iPhone. Not good. But they have the comfort that Zune is part of an integrated strategy going forward. That it will grow to be one of the core elements of the Xbox/Live/Zune technology and strategy. And as it grows it will become a game machine, a phone and a camera. And all these features will be integrated with Xbox and Live. This is where Microsoft is headed.
As part of building and nurturing the brand Microsoft obviously use community marketing. An essential tool these days. And the people who do this must have a hard time against the Apple iPod/iPhone brand. So, like all good community people they searched for, identified and then looked after evangelists. This is because evangelists act like a force multiplier. They are effectively free employees. And because they are not actual employees they can get away with being a lot more guerrilla in their tactics. In other words they can be fanboys.
So imagine the repercussions in the Microsoft Zune community department when a very prominent evangelist firstly went postal on them and secondly defected to the opposition in a fit of pique. The Zune Guy even has Zune tattoos over his body, which he will now need to change or have removed. And he had tried to change his name to “Microsoft Zune”.
He says that his volte-face was all because Microsoft reneged on a promise to bring him for a tour of Redmond. Microsoft say that they never made such a promise and only mentioned the possibility to him. So we can all see what has happened here. Microsoft raised this guys expectations so that a misunderstanding was inevitable. And all the freebies they had already given him counted as nothing once he thought that he was spurned and so devalued as a person. His justification video tells you everything really.
What this whole episode highlights is just how difficult community work is, what a high level of social skills are needed to do it well. And the crass stupidity of dangling a carrot and then not delivering.
July 29th, 2008 — News analysis and background
In case you have missed it, porn star Tera Patrick is a special producer on the game Saint’s Row 2 (a GTA alike), developed by Volition and published by THQ. She will “bring her one-of-a-kind special touch to the project as the game nears release on October 14th” and “Further details on Tera’s involvement with Saints Row 2 will be released leading up to the game’s October 14th launch on the Xbox 360 and PlayStation 3.”
Before you dismiss the girl for her profession it is worth looking at her Wikipedia entry: “Patrick was discovered in San Francisco by a talent scout for the Eileen Ford Modeling Agency, and at the age of 13 she was was the first teenage full time model. She moved to New York City shortly thereafter and her career as a runway and catalog model began. At 18, she left the world of modeling and enrolled at Boise State University where she earned an AAS degree in nursing and a BS in Microbiology. She then transferred to University of California, Santa Barbara, where for financial reasons she began modeling again.”
She has her own production company, Teravision, is the the masthead publisher of Genesis magazine and in gaming was playable character in the video game Backyard Wrestling 2. She is also informed about gaming as you can see in this interview from 2004:
Do you think the sex appeal involved with females in gaming is having a positive or negative impact on the gaming industry as a whole?
Tera Patrick:Totally positive! I mean we live in a society full of double standards and hypocritical paradox. I don’t understand why the ultra conservatives in America have a problem with a porn star being portrayed in a videogame. I mean, there is no nudity, and the game will be rated accordingly. I mean kids play games where senseless killing is ok (like Grand Theft Auto, or even BYW2), and no one questions people jumping off the roof and slamming someones face into an abandoned car, or shooting little old ladies! No one ever need kill anyone in real life, yet sex is something that everyone, except maybe Dick Cheney, will experience as a positive thing in their lifetime! People need to relax! I want to design and star in a real adult videogame! Let people get their sexual frustrations out!
What is your favorite video game to play and what do you enjoy about it?
I’m kind of torn–I really love the classics like Ms. Pac-Man, Centipede, and Asteroids. I have a Hello Kitty game for my GameCubeand I’ll always love Kirby, Strawberry Shortcake, and anything with Mario in it for Nintendo DS.
Have you had a chance to play the Nintendo Wii?
Oddly, I haven’t. That’s probably the only console that doesn’t reside in my home. It looks really fun though and I’ll have to get one at some point.
You also have a PC video game, Virtual Tera, where a person has full control over your body, including the option to dress you up. Tell us about the game.
There are many different options. It would take me hours to explain it all, but it’s absolutely a breakthrough in terms of adult video games. There’s even an option to have your own face put on a character that’s with me.
You are actually the only porn star to ever appear in GamePro magazine, in an Avirex advertisement. What does being the only porn star to ever appear in GamePro mean to you?
I am really proud to be the only porn star to ever be in GamePro. The gaming community is a perfect crossover for me. I once did an appearance at E3 and there was a line a mile long of people who wanted to meet me and get my autograph.
Do you think that adult video games are the next big thing?
The marriage between adult entertainment and gaming has been inevitable and now it’s happening. The gaming industry is aching for more adult games.
If you were made into a video game heroine, would you be a Lara Croft-type character? What would your special move be?
I’d be a cute creature, similar to Sly Cooper and I would have to have a cool tag line. My special move would be a super sultry look that I would give my enemies which would make them faint. I wouldn’t even break a sweat. I also had a lot of fun working on Backyard Wrestling 2, where I was a playable character. I was a kind of a ninja in that game and it was definitely cool to kick as as virtual Tera.
Have you ever… you know… to a video game?
Actually… once I did. One night Evan and I were going at it in the middle of an unpaused game of Tekken.
So you can see that she actually has credentials for the job. She is also a globally recognised media star with exactly the right profile for this game, giving it a big USP that will appeal to the target demographic of the game. It provides product differentiation in a crowded sector. The internet is buzzing with the news. And there are great opportunities for cross promotion between Tera’s brand and the game’s brand. Everything else being equal the game will now sell more.
I think that this is interesting and brave marketing. And I am sure it will work.
July 28th, 2008 — News analysis and background
Many people in the world think that the British mass media is wonderful. The famous Times of London and the internationally respected BBC for instance. The reality is that things could be a lot better.
The first problem is that too much power is in the hands of one man, Rupert Murdoch. His News Corporation owns or controls The Times newspaper (they have a supposedly independent editorial committee but they know which side their bread is buttered on), the best selling daily paper The Sun, the best selling Sunday paper The News of The World, the heavyweight Sunday Times and in London the daily thelondonpaper. In TV the main satellite broadcaster BSkyB and a 17.5% stake in the main terrestrial broadcaster ITV.
This makes this American citizen (he was Australian but changed because of American media ownership laws) by far the most powerful man in Britain. When he tells Gordon Brown to jump Gordon asks how high. This concentration of power is ridiculous in our supposed democracy and should not be allowed.
Until earlier this year all the Murdoch press in Britain was pretty anti gaming. Obviously he saw gaming as a threat to his TV empire and thus something to be vigorously opposed. The Times, in particular, had some ridiculously stupid columns from Janice Turner and Giles Whittell. Then suddenly all his media did a sudden 180 degree turn and became pro gaming. It was pretty obvious that Rupert was about to invest in the games industry himself. And sure enough in May thelondonpaper started a casual gaming portal. This is more important than it looks because it is a business template that can be quickly and easily re-skinned to work with any of his existing media worldwide.
Then there is the BBC, a supposedly independent public service broadcaster. The BBC was neutered by the present government with the Hutton report. This blamed the BBC for events around Dr David Kelly, a weapons expert who died in suspicious circumstances after revealing that the war on Iraq was being justified on false pretexts. So the government converted telling lies to the British public into an operation to make the BBC toothless. One of the biggest victories for spin ever. Which is why the BBC is now commonly known as the Brown (formerly Blair) Broadcasting Corporation.
It is not only in politics that the BBC has got it wrong. They have no idea about video games. They don’t realise that gaming is rapidly becoming the most popular entertainment media in the world. And the proof of this ignorance can be seen in the way they persist in reporting games as technology. This is patently ridiculous. They don’t report the movies as technology so why games? I have no idea why they are doing this but it does gaming no good at all. We belong, very obviously, in entertainment. Which should give us the extent and quality of coverage that we deserve.
July 25th, 2008 — News analysis and background
I am a great fan of John Riccitiello, the boss of Electronic Arts. He has done a lot really good stuff in the industry and when he left the company it lost its way. Now he is back in the driving seat and they are making great progress. It is great when he does a proper interview because he talks more sense than just about anyone else in the industry. So it was great that he did this fairly comprehensive E3 interview, everyone should read it.
He talks about the increasing quality of EA games but makes the point that the market is the final arbiter “…….wait for it to sell. Then we can look at the results.” He is spot on because a Metacritic score is just a number whereas it is income that pays the bills and keeps the company going. He reinforces the point with this classic quote: “I don’t think the investors give a shit about our quality. They care about our earnings per share.”
As to the console wars, his take is absolutely brilliant: “With EA, my job is to make sure we’re neutral. Years ago, I told you that they make the war, we make the bullets.”
The Wii Motion Plus is seen as a good step forward: “ If I had to pick one thing we suffered from, it was imprecise control on the Wii.” And obviously it will keep Nintendo competitive when Sony and Microsoft bring out their motion controllers.
He talks about the change from boxed retail product to online delivery of content and how it will change the revenue model: “There is a longer-term transition from a disk-based model for retail sales to an “average revenue per user” model. Five to seven years from now, investors will look at EA as how we have 100 million customers where we have an ARPU relationship that amounts to so many dollars a month.” This is a massive change for the industry and for the customers and it is good that EA are ahead of the curve.
And he quite nicely makes the point of just how big and successful EA is: “It’s fair to say that I have 10 franchises that today generate more revenue than Facebook and all of its business partners.”
These few quotes cannot do the article justice. I strongly recommend that anyone involved in the game industry reads it very carefully because with John Riccitiello in the saddle Electronics Arts are going places and he knows exactly where those places are.
July 24th, 2008 — News analysis and background
- XNA authors to receive 70% of revenue. This is fantastic news and will further motivate a massive push onto this development and publishing platform. We will see innovation and diversity that has been suppressed since the 8 bit days. This is brilliant all round for gaming.
- SCi (EIDOS) loses £100 million on sales of £134 million. So they have cleared the decks and the coming year brings some big releases. I still think that they are fundamentally the wrong size to succeed as a mainstream global publisher of boxed retail product. We will see.
- Wii takes top five positions in UK sales chart. And even more remarkably the number five game isn’t a Nintendo first party title. It seems like no end is in sight for the phenomenal Nintendo gravy train. But dominance like this doesn’t do the rest of the industry any favours.
- Treyarch are developing the new James Bond game, Quantum Of Solace. And they say that it won’t be disappointing (in terms of game quality). They have a point, license based games don’t have a reputation for being any good and as an industry we have no excuse for churning out rubbish. People have to work hard for the money they spend on our games and we should respect that.
- Kazuo Hirai Sets 150m Lifetime Target For PS3. Well it is nice to have targets. To be frank there is no reason why it shouldn’t do this if Sony get their act together in every department and in every territory. At the moment they still seem to lack the impetus necessary to drive large sales numbers but things are certainly getting a lot better than they were.
- Sony PSP continues to sell massively. But it is used primarily as a media player and any games played are most likely to have been downloaded (stolen) using the internet. With 75 millionish sold and the current rate of sales, this could overtake the PS2 if it is left in production long enough. Presumably Sony are making a profit on the hardware on this one.
- Kazuo Hirai, Sony Computer Entertainment president thinks that PlayStation 3 operations will be profitable by March 2009. This is important for the industry, the platform holders are not in this just for the glamour. The bulk of the turnaround will come from reducing manufacturing costs of the PS3 console. Sony have taken a huge hit on how expensive each unit has been to make but they have a high level of expertise at bringing down manufacturing costs. They need to be commercially viable in order to go to war with Microsoft and Nintendo.
- Microsoft Xbox division makes profit of $426 million for the year. They are being rewarded for their vision and tenacity. It will take a while to get their investment in Xbox and Zune back but eventually there is no doubt that this will become the most profitable part of the whole company.
July 23rd, 2008 — Marketing Tips
At last weeks E3 there were two massive announcements that Microsoft could have made but didn’t. The first was about their upcoming gesture interface, the second was an announcement about a new Halo game from Bungie, which was only pulled at the last minute. So why did Microsoft pull two massive stories that would have been worldwide headlines?
The answer is that, quite simply, they already had the world’s press in the palm of their hands. They had the maximum column inches and airtime that was possible. So to add extra content would only dilute the coverage that each story would get. They had reached the law of diminishing returns. Far better to save stories for another day when they will not be cluttered out and so will get far more coverage. Microsoft marketing want to get the maximum impact, the maximum number of times.
Which is exactly what I did when managing the news flow at Codemasters. Often I was sitting on a whole pile of “secrets” but was manipulating unveiling them so as to maximise the coverage that they received.
I started telling the world about a new game 12 months before street date. So that meant 12 monthly press releases plus the launch press release. This gave a nice pace that allowed me to gradually unveil the USPs and features of the game in a way that enabled the press, and therefore the public, to understand what it was that we were making.
I had a press release schedule for a release every Tuesday and every Thursday. Slots on this schedule were booked for months ahead. The schedule was shared with all our marketing people worldwide so we could maximise our management of the press. And with the development staff to maximise internal co-operation. Every release was translated into every language necessary well before release. And we also planned the assets such as screenshots, videos, renders and demos well in advance so they could be polished to the highest quality.
By having a well drilled global press mechanism and only ever releasing quality news content I was guaranteed to reach tens of millions of people with every word that I sent out of the door.
An example was IGI 2, a stealth FPS. The game contained infra red sights that could see through walls and the Barratt 0.5inch sniper rifle, these made a massive difference to the gameplay. I deliberately kept these features secret until fairly close to release date. By then the press thought that they knew the game pretty well, so when I announced these two features in a press release they went “wow” and we got loads of coverage. Far more that if I hadn’t sat on these features for so long.
So there we have it. Manage your flow of news to maximise the marketing impact that it gives you. Secrets are a precious asset so get the most out of revealing each and every one of them.