Entries from November 2008 ↓

iPhone Vs Netbook, which will be the biggest gaming machine?

This is absolutely fascinating stuff. We have had these two new gaming platforms burst onto the scene and instantly steal the limelight. Both are obviously going to be far bigger than some of the existing mainstream gaming platforms. In fact they are bringing a revolution to gaming. But which will be the biggest?

What they have in common is that they are both portable. So people will carry them around and use them in lots of places. They are not limited to one location like an Xbox or Playstation. They are also both cheap. You pay for the iPhone as part of your contract with your service provider, just like any other phone. And netbooks are going to be $100 purchases, less than the cost of a family night out.

The iPhone is by far the most portable of the two. And it is the one getting the most hype. However it is a standard from one manufacturer and all the other manufacturers are going to compete against it. Already Google Android is looking better in many ways and that will be supported by many manufacturers. But Apple are really pushing iPhone as a gaming device and as such it is booming like crazy, outperforming everyone’s expectations. It has really caught the psyche of the market. Steve Jobs marketing genius proven once again.

Netbook is that great device that comes about when manufacturers realise that they can make a product with greater utility by offering less. Notebooks had become ever more powerful, well beyond the needs of 90% of their owners. By stripping out all but the most essential features to create the netbook the industry have created a product that is a lot more use to a lot more people.

The netbook is a lot less portable than the iPhone. But at about a kilo in weight it is very portable indeed. And that extra weight gives you a big screen and a full size keyboard. Just about every student after primary level in the western world is going to have one of these. And they are going to be the only computer used in big quantities everywhere in the developing world. So they are going to sell in the hundreds of millions.

Of course neither the iPhone or the netbook is primarily a gaming device. A lot of them will be used for many years without ever seeing a game. But it is in human nature to play so most of them will. And the netbook has the advantage of tapping in to the huge legacy of PC gaming.

So as things stand it looks like netbooks are going to be the biggest gaming machine. By a significant multiple of what the iPhone achieves. In fact the netbook has the potential to be the biggest gaming platform of all. It should easily outperform all home consoles put together. It will be interesting to see this unfold.

Eight news stories 27.11

US Army get it right

I have said on here many times how games will grow to be far more than mere entertainment and that they will grow to encompass many areas of human needs and human behaviour. We already see this in myriad diverse ways. Brian Age, for instance sharpens the mind, players of, say, a WW2 strategy game get a good education on the subject, people sent to Baghdad get to play an MMO first that gives them a realistic immersion into a virtual version of the real thing and US Marines are were prepared for combat by playing a version of the game Operation Flashpoint.

But this is just the thin end of the wedge. Gaming will grow to be ubiquitous, especially in areas of education. In prehistoric tribal times education and gaming were the same thing. It is only our western civilisation that split the two up. And now they are coming back together again. Gaming could take over completely to be 100% of education. The fundamental advantages of interactivity, connectivity and non linearity are just so powerful. It would be as if every student had their own private team of teachers dedicated to just them. Obviously this won’t happen tomorrow but, as I have already pointed out, we are well on the way already.

So it should come as no surprise that the US Army have announced that they are investing over $50 million in combat training games. Quite frankly this is inevitable and is cheap for what they will get. Soldiers will be trained to a higher standard more quickly at a lower cost.

Here is some of the detail:

“Each system will consist of 52 computers with ancillary equipment including steering wheels, headsets and mice,” .

Soldiers will be able to drive virtual vehicles, fire virtual weapons, pilot virtual unmanned aerial vehicles and do “most anything a soldier does” in a virtual battle space as large as 100 kilometers by 100 kilometers.

McManigal said the game will replicate what soldiers encounter on today’s battlefield — from fighting in urban terrain and convoy operations to reacting to contact and ambush operations.

“Your imagination will be your only limiting factor,” he said……………

………..”We are just starting on the tip of the spear of where this is going to go,” .

Video gaming for “education” will grow to be many times bigger than the market for pure entertainment. It is not only a far better way of imparting knowledge and skills, it is also far cheaper.

Beating the pirates by being cheap

Everyone knows that you sell more of something when it is cheaper, the economists call it price elasticity of demand. So in the days of budget games for 8 bit home computers we sold, quite literally, millions of games. At one stage at Codemasters we had over 27% of the total UK game market.

But there was also another mechanism coming into play here. At the time piracy was rampant. Vastly more games were being stolen using tape to tape copying than were being bought. But the budget games were so cheap at £1.99 (later  £2.99) that they were hardly worth copying. For a bit of pocket money you could have the real thing.

Fast forward to today and we have a retail boxed PC game sector that is being torn to shreds by the thieves. Many publishers have abandoned the market, sharply reducing the amount of new titles available. And the price mechanism is in play. These games are sold for lower prices than their console equivalents. Partly because there is no license fee to pay to a platform holder and partly to give better value to discourage piracy. But even this is not working.

Because PC games are not controlled by a platform holder the publisher can do what he wants. This means that they can have a second bite at the market by re-releasing games at budget when the full price sales have died down. This is good because even people who have stolen the game previously will be tempted to splash out a small amount to own the real thing. Also it has the benefit of damping down the secondhand market, which has to be good from the publishers point of view. So PC budget gaming has grown to be a significant part of the market.

But now we are seeing a significant shift. Increasingly publishers are not bothering trying to sell a game at full price. Piracy has just made this a waste of time. Instead publishers are going straight to budget. So we are now in exactly the same position as we were with 8 bit home computer games on cassette. Budget has become the only viable business model for stand alone boxed PC games at retail.

Here come the netbooks

Netbooks are a recent and significant innovation. Basically they are very small notebook computers with stripped down capabilities that are optimised for connectivity. They all have wi fi and some have bluetooth and some have 3G cellphone capabilities. They have two massive advantages. The first is that they are very portable, around 1Kg (2 pounds) is the norm. The second is that they are very cheap. About half the cost of a notebook. And they are going to become a lot cheaper.

Netbooks work with the cloud. You use online applications like Googlemail and Google Documents. So you don’t even need a hard drive, which is why many netbooks don’t have one. It also means that this incredibly portable device can be taken all over the world yet has the power, via the cloud, to do all the proper computing tasks you would want.

So netbooks are going to become massive. Dell and Acer said they wouldn’t get into this market. But when they saw where it was going they quickly changed their minds. These machines work very well with a version of Linux called Ubuntu and this has just been made available for the ARM processor. ARM/Ubuntu machines have the potential to be cheaper than Intel/Windows machines which will drive prices down even further. $100 is not an impossible end user price.

So netbooks will almost certainly become the most popular PCs. And PC gaming is already far bigger than all console gaming put together. So netbooks are headed towards being one of the most important gaming machines on earth. And this has a significant impact on the future of gaming.

Netbooks have reduced storage and processing capabilities. They cannot store and run big and complex games internally. They make up for this by having brilliant connectivity. So they are the perfect tool for playing online games such as MMOs and the contents of all the casual gaming portals. They are going to have an immense effect on pushing gaming onto servers. Boxed retail games are not what netbooks are about.

This is another arrow in the back of high street game retail. And another major factor into making gaming an online industry. So it will help force social networking and gaming closer together. Portals like Steam need to evolve to become more server based but they are agile enough to do so. It will not be a revolution, more like speeded up evolution.

As ever in the gaming industry we live in interesting times.

The Xbox 360 surges ahead

In marketing we have something called Unique Selling Propositions (USPs) which are features and benefits that differentiate one product from another in the market. Leading to sales. Here are the USPs of the three main console platforms.

Sony Playstation PS3:
Blue Ray player, so you can use it to play HD home movies.

Nintendo Wii:
Gesture interface.
Amazing Nintendo first party game titles appealing to a broad demographic.

Microsoft Xbox 360:
Elegant design enabling it to be sold at the lowest price point.
The biggest and best catalogue of games. More than the other two machines put together.
Xbox Live, by far the biggest and best online gaming portal.
Rampant piracy makes games free for those who are happy to steal.

And of course the market responds to these USPs. Sony convincingly won the last round of the game console war with PS2. This generation, with PS3, they are coming convincingly third and last. Despite all the analysts predicting otherwise. Obviously the analysts weren’t looking at the USPs.

So now we are in the biggest selling season at the critical mid cycle phase when the meat of all console sales are made. And Microsoft are making hay with the 360.

  • In Italy and the UK (both big Sony strongholds) The 360 now outsells the PS3 two for one.
  • In America too the 360 is selling twice as fast as the PS3.
  • Some weeks the 360 is even outselling the PS3 in Japan.
  • 7 million 360s sold in European territory. 2 million since June as sales ramped up.
  • 360 sales to date now ahead of lifetime sales of the original Xbox. Well before 360 sales reach their peak.

Obviously the Wii is still doing even better. But then Nintendo realised that they could market to everyone, so they have vastly more potential customers.

Eight news stories 20.11

  • 90% of PC games are stolen. Which is why most publishers have given up on boxed PC games, it just isn’t worth investing resources when most people will just steal the results. Videos and recorded music now have broken business models. We must work hard to make sure this doesn’t happen to gaming. In the long run nobody wins from game piracy, not even the thieves.
  • The mainstream press are beginning to notice just how recession proof video gaming is. This from USA Today: “Overall, sales of console game systems, software and accessories rose 26% compared to October 2007. Portable game sales dropped for the one month period, but total sales for the year are 7% ahead of 2007.” The video games industry grew an impressive 18% year-over-year in the first month of the critical fourth quarter,” says NPD analyst Anita Frazier. “With ten months under its belt, the video games industry is still poised to top $22 billion in annual sales in 2008″ — which would set another annual sales record.”
  • Everton football club to use the game Football Manager to help them with their scouting. I’m a bit disappointed with this story, Sega could have explained more. At Codemasters we made a similar game, LMA Manager, and it involved us tracking a high percentage of all the professional footballers in the world. Not just their names, but also their strengths and weaknesses. So this is a fantastic tool for Everton to be able to use. Their manager, David Moyes, has a reputation of gaining outstanding results on a miniscule budget. With the Football Manager database he should be able to do even better.
  • Nintendo say that 3rd party publishers don’t “get” the Wii. They think that a publisher’s best output should be on the Wii. Maybe, when they make it as capable as the 360 and PS3.
  • Midway shares drop in value again and quite rightly. Soon people will be paying you to take them off their hands! This is a company seriously in need of some M&A activity.
  • National Geographic get into video games. This should come as no surprise to readers here. The industry is heading towards being a ubiquitous media like, say, books. But far better.
  • Google shuts down Lively. Mainly because nobody knows what it is. This is a failure of marketing, which really does seem to be Google’s big weakness. They keep introducing products that nobody knows about which is why search is still the vast majority of their business.
  • Sony admit own stupidity. They say LittleBigPlanet would be number one at any other time of year. So why not launch it at any other time of year? This November congestion is bound to lead to products failing in the market. The stupidity of some game industry management is amazing.

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