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Christmas Cheer Entertainment Games

Analysts Predict Tough Christmas For Game Publishers 54

Posted by simoniker
from the coal-in-stocking dept.
Thanks to Gamesindustry.biz for its article regarding predictions of a tough 2004 holiday season for all videogame publishers, as an analyst report from Banc of America Securities claims "competition in the games market will be much more intense than last year", and argues that "some games will just not receive any shelf space from retailers, and initial shipments of titles will be very low, even by historical standards." The report goes on to highlight some non-specific specifics: "We have very low expectations for games of other developers with less-known brands... including Acclaim, Midway (except Mortal Kombat), Atari, Eidos, Vivendi (apart from Half-Life 2, if it is released) and even Microsoft (apart from Halo 2)... Expect many disasters this holiday." Is there really a reason for game creators to worry about what sales Santa will bring them?
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Analysts Predict Tough Christmas For Game Publishers

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  • by Kris_J (10111) * on Friday July 02, 2004 @03:20AM (#9590119) Journal
    ...I'm not currently intending to purchase any more games this year. I still play Diablo II about once a week and I'm very much enjoying Sacred with full knowledge that I've got plenty of class, skill and difficulty combinations to explore.

    Christmas will most likely by DVD season, not games season. Newly released box sets of SciFi TV shows will feature highly as well as "classic" movies like Office Space.

    • Diablo 2 (Score:4, Interesting)

      by vehn23 (684035) on Friday July 02, 2004 @07:35AM (#9590887)
      I definitely got my money's worth from this title but I regretfully bought it for my early-60's father a few years ago. He still plays it 10-20 hours a week. Single player. Ugh. I remember having to go to his house and beat a (pre LOD) multishot Bremm Sparkfist for him because he was stuck on him for days. Good times..
  • by Senator Bozo (792063) <gki149@yahoo.com> on Friday July 02, 2004 @03:31AM (#9590151)
    Hollywood, for example, has its big summer season when all of the blockbusters are released nearly back to back. In fact, releases are even scheduled around dates set by competing films.

    So why don't video game publishers try to capitalize on the summer months, when the market isn't flooded with competitors and people seem eager to spend money on entertainment?

    E.g.: Blizzard publish Warcraft III on July 3rd, 2002 and WC3: TFT on July 1st, 2003, and each sold several million copies within weeks of their respective release date.

    • by Dark Nexus (172808) on Friday July 02, 2004 @03:52AM (#9590209)
      When you think about it, most younger gamers get their games as gifts, generally for birthdays and christmas. So for that target audience, christmas is the right time for most releases.

      My guess is that publishers are still stuck on that "games are for kids" thought when it comes to release dates, even if they're over that for content. For any target audience that buys their own games, spread the releases around a bit! Some more in the summer, some around late February or early March for that late winter drag, a few in mid or late september, for those who have grown tired of their purchases from early June...
      • by dammitallgoodnamesgo (631946) on Friday July 02, 2004 @04:01AM (#9590233)
        I had heard that the idea was that publishers thought no people would ever want to stay in playing games during the summer, they'd all be out in the sunshine. We know how wrong that is, but it's possible they've not learned yet.
      • Based on my practical experience of the wargames market which has a similar demographic audience (Typically young, nerdy and male) I would agree with your assessment.

        Weather is also a big factor in sales, if it's nice people tend to do outside activities. School holidays also help as well, and the boost we get in sales over xmas is, as you suggest, very substantial

        Summer holidays are a riskier release date, if the weather is bad you're onto a winner but if its good everyone will be outside enjoying

      • Additionally... (Score:3, Informative)

        by MMaestro (585010)
        'When you think about it, most younger gamers get their games as gifts, generally for birthdays and christmas. So for that target audience, christmas is the right time for most releases.'

        Don't forget about Christmas bonuses at that time. Around Christmas time, lots of people have instant disposible cash and lots of reasons to blow it FAST.

    • "So why don't video game publishers try to capitalize on the summer months, when the market isn't flooded with competitors and people seem eager to spend money on entertainment?"

      My best guess would be because most people go outside and do things in the summer. Most of my gaming is done in the winter when there isn't much to do outside and I just feel like being lazy and warm inside.

      Most people want to get out of the office/house/dwelling/box/whatever during the summer and enjoy nice weather and outdoor a
    • by superultra (670002) on Friday July 02, 2004 @09:37AM (#9591773) Homepage
      So why don't video game publishers try to capitalize on the summer months

      Easy. Games are sold retail, and retail is Christmas. No matter how many dedicated gamers exist that would buy games in the summer, it can't compare to the legion of mothers and wives that walk into game stores at Christmas.

      Moreover, because retail is Christmas, investors expect high fourth quarter earnings. Say you're Vivendi, and you release Game X in August. For the same, it sells well. Let's say 2 million units, hypothetically. Now, release the game game fourth quarter (xmas), and due to competition you only sell 1.5million.

      You've made less money, and probably spent more in advertising to get it. But because investors pay far more attention to fourth quarter earnings than third, every dollar made during Christmas is technically worth more to the company than if that dollar had been made in summer.

      Even Hollywood adheres to retail law. It's best season is probably summer, but when it has to go through a retail channel (DVD sales) the studios plan their most profitable releases for Christmas. If there's any deviation, it's only because the picture companies are more financially secure than the gaming companies.
      • Just so were're straight:

        I buy nothing at christmas time. (i hate to shop)
        My wife buys nothing at christmas time. (she LOVES to shop)

        Why? The mall is a fucking nightmare. 20 minutes to park, 10 minutes to walk from the end of the parking lot, shelves that look like they were ransacked by a bunch of kids on speed, and lines that make the DMV look good.

        We finish all our shopping by november 1.

        I personally like to do any shopping in the summer, in nice air-conditioned malls where everybody is wearing the s
    • I agree. We always have the summer lull. Nothing really gets released, especially on consoles until the fall. Then all of a sudden everything blitzes the shelves and it's tough as nails to keep up.
    • The game biz is more like the music biz than the film biz. Glut of titles in the 4th quarter, only big established artists do well then and the rest wither on the vine. New artists that get launched in the 1st quarter benefit from the breathing space.

      We just followed this model by releasing The Suffering in March, NBA Ballers in April and Psi-Ops in June. Mortal Kombat is coming towards the end of the year. The results seem to be paying off since those games have sold decently.

      None of this is rocket scien
  • by Andy Smith (55346) on Friday July 02, 2004 @03:53AM (#9590210) Homepage
    Is there really a reason for game creators to worry about what sales Santa will bring them?
    Yes. It's all explained in the article, nice and simple. You even quoted some of it, look!
    • by gl4ss (559668) on Friday July 02, 2004 @06:01AM (#9590553) Homepage Journal
      well, the way they explain it is that: ***"The report, authored by analysts Gary L Cooper, Eric K Brown and John P Newell, details key clashes between major titles in almost every genre - and presents a convincing argument for the claim that "apart from The Sims 2.0, we do not consider any game this holiday out of harm's way of the competition.""***

      so it should be a sweet season for the _gamer_, the reason why it would be hard for the gamemaker is that CRAP TITLES WON'T SELLL. though, it's all about the marketing anyways and god knows how the hell these guys can even predict what games will actually be on sale durin the xmas shopping season.
      • by Anonymous Coward
        Any game coming out by Xmas would be 2/3 through development by now likely with screenshots and early betas shown to magazines for previews.
        CRAP TITLES WILL SELL. Un-crap titles without heavy marketing might not.
      • Well, you said it yourself:

        CRAP TITLES WON'T SELL

        Unfortunately, as often happens in the gaming world, GOOD *TITLES* turn out to be CRAP *GAMES*, and *DO* sell... (i.e Enter the matrix, driv3r etc... i know this isn't really what you meant by Title.. but I'm using your language to make a point.

        The bigger problem is that GOOD GAMES don't sell because they don't have the brand recognition.. so instead we're getting sequel hell now (Jak3, Ratchet 3, residentEvil 4)... god help you if you have a great new p
  • by LifesizeKenDoll (783854) on Friday July 02, 2004 @03:58AM (#9590223)
    I think we're forgetting the real meaning of Christmas - The birth of Santa
  • Christmas Madness (Score:5, Informative)

    by EnglishTim (9662) on Friday July 02, 2004 @04:03AM (#9590239)
    It's crazy some of the titles that get released at Christmas. All the big boys (well, er... let's make that EA) release big, often licensed games for Christmas, with a huge amount of advertising.

    I find it bizarre that publishers put out games like 'Metal Arms: Glitch in the system' at that time which while being a very good game, is hardly going to be able to compete with all the big-name licenses out there at the time.

    You have to remember that many of the games that are bought around Christmas are bought for someone else. When Mum, Grandpa or Uncle Alf goes into a game store looking for something to buy little Jimmy, they're going to go for something safe with a brand they recognise. That means FIFA, James Bond, The Matrix, Star Wars, WWE, or something they've seen a lot on the TV.
    • Re:Christmas Madness (Score:1, Interesting)

      by jennifer_l (755361)
      Publishers seem to think that because lots of people buy games at Christmas it means that lots of people will buy THEIR games. It's just not the case. However we're seeing more and more games released throughout the year, but with fairly bad sales - because there just isn't that impetus to buy, buy, buy! Releasing a fairly low-cost game around about the January sales might work, when people are actively hunting through the bargain bins, but a full price blockbuster without a "hook" to get the consumer buyin
    • Dont people usually ask the kids what the want for X-mas?

      I remember getting Mega Mans, Super Marios, etc. for birthdays and holidays...

      Oh wait... That was before we had licensed stuff like Mary-Kate and Ashley, WWE, etc.

      Speaking of liscensed games, can anyone blame Nintendo's old iron-fist managment over what came out? Look at half the stuff on the market today! What once was gestapo tactics would almost be a blessing now
  • Did they forget that this is coming out? Will sell tons...
    • Re:Doom 3 anyone? (Score:3, Informative)

      by EddieBurkett (614927)
      Doom 3 is scheduled for an August release, and this article pertains to the Christmas season. I know retailers are trying to start that earlier and earlier every year, but assuming Doom 3 comes out on time, I don't think its applicable to the discussion.

      Besides, someone mentioned that the article talks about how publishers will have clashing titles. Doom 3 will probably clash with Half-Life 2, so again that would affect its ability to *guarantee* being a hit, at least as far as this discussion goes.

      That
  • On a related note (Score:5, Interesting)

    by Slyght (784581) on Friday July 02, 2004 @07:27AM (#9590858) Journal
    Is it just me, or has anybody been noticing that everything's just been going bad for developers nowadays? I mean, it seems like every other day you go on Slashdot or Gamespot and there's an article about a development studio getting shutdown, or a publisher laying workers off, or a company's earnings report lower than last year, etc. People always talk about the video game being a growing industry, but all it seems to be is shrinking. This is very discouraging to somebody such as myself who is in the game development industry, because it feels like this industry is going to collapse any second.
    • by jonwil (467024) on Friday July 02, 2004 @08:58AM (#9591423)
      2 things are happening.

      Firstly, PC games are being overtaken by console games.

      And secondly, larger studios are getting bigger and more market share at the expense of smaller studios.
      • And a third:

        Games are cooling down in Japan, which has always accounted for many of the sales in the gaming market.

        That said: I think it can be reignited once the PS3, the next Game Boy and (if it is more compelling than the GameCube) the Nintendo Revolution come out. But, other than the PS2 and the Dreamcast, this crop of console hardware and games has been rather underwhelming over there...

      • Just as a clarification, console games have nearly always dwarfed PC games in terms of net sales (aside from a few exceptions)...
  • by ballpoint (192660) on Friday July 02, 2004 @07:39AM (#9590905)
    link [yahoo.com].
  • Of course some games will crash and burn. If the industry insists on fixed pricing, then it is inevitable that consumers will only buy the most publisised games, as this is the only criteria, other than biased reviews [slashdot.org] that they have. Whereas if some games were cheaper they could take that into consideration when buying.

    If studios are worried, then they should cut the prices of their games. That way more will sell. Better than none selling at all.
    • In an interesting twist on the standard in industry pricing (which Slashdot [slashdot.org] previously covered), Sega's ESPN NFL 2K5 is an astoundingly low $20.00.

      Remarkably (and understandably, imho), some fans of the series have been worried that because people view $50.00 as the entry point for "good" games, people will pass on a $20.00 game because it obviously sucks if it's so cheap.

      Visual Concept (the developers of the game) and Take 2 interactive's response to this argument can be read here [gamespot.com]. Quite an interestin
  • by jonwil (467024) on Friday July 02, 2004 @09:34AM (#9591748)
    They need to sell/market games based on demographics.

    For example, games aimed at younger kids should come out around christmas because thats peak season for them. (being that most of those games are bought by parents).

    And games aimed at older kids/teenagers/young adults (who increasingly have part time jobs e.g. paper round, fast food or whatever as a source of money to spend on games) should be released at the times of the year when the target audience is most likely to have disposable income and/or free time.

    Another thing to remember is that for younger kids, the parents (or grandparents etc) are more likely to be the ones making the decisions on what to buy. Although kids will ask for stuff, just because the kid asks for Gorefest Fighters 3005 Extra Special Extra Super Gore Violence Edition doesnt mean that they are going to get it (cue simpsons quote about episode with bart wanting Bonestorm and ending up with a golf game instead)

    On the other hand, bigger kids/teanagers/young adults (and also adults) are going to be more liklely to be making their own decisions on what games to buy (especially if its their own money they are spending)

    I do think that there is a market for smaller games (that dont have a huge name/licence attatched). However, that market disappears when the studio does the wrong thing and spends big $$$ on the production.
  • by metamatic (202216) on Friday July 02, 2004 @09:54AM (#9591922) Homepage Journal
    GTA: San Andreas will be coming out in, what, late October early November?

    Ooh, the poor publishers, I'm sure they'll hardly sell a single unit of it.
  • shelf space (Score:3, Insightful)

    by chris_mahan (256577) <chris.mahan@gmail.com> on Friday July 02, 2004 @10:20AM (#9592168) Homepage
    some games will just not receive any shelf space from retailers,

    Looks like there's opportunity for more retailers. Or a lumberjack could just go and build them more shelves...

    Here's the true question: When will Border's bookstore start carrying video games? They already have videos...

    But the greater question is: whay do those games not sell?
    Ah, because people don't tire of them as quickly... They are too cheap to make real money for the amount of hours of entertainment they provide. Yet gamers won't spend more than 60 bux.

    The solution for the gaming industry: go open source. Work with each other, instead of reinventing the wheel with every little detail. Provide game networks at low cost. It will eliminate piracy (nothing to pirate when the source is available), and you will make money on subscription.

    On subscriptions: get together and form a payment association/company, and sell game time cards. Price them at $.25 per hour. That way, if I play 100 hours a month, I'll pay $25, but if I only play 10 (which honestly is all the time I can spare, you'll still get $2.50. Right now you're getting nothing from me, since the games are too expensive, and the memberships are too expensive. The last game I bought was Age of Kings in what, 2000?

    Another piece of advice: make games that are cinematographically spectacular, yes, but more than that, make games with good gameplay.
    • The solution for the gaming industry: go open source. Work with each other, instead of reinventing the wheel with every little detail. Provide game networks at low cost. It will eliminate piracy (nothing to pirate when the source is available), and you will make money on subscription.
      So the business model is
      1. Go open source
      2. ???
      3. Profit!
      Game developers already work together, thats why games license other game engines, the reason we have halflife is because they had access [homelanfed.com] to the quake engine.
      The p
  • by Raindeer (104129) on Friday July 02, 2004 @10:42AM (#9592396) Homepage Journal
    The games industry needs to get alot better focus on their target audience and the way they spend their income on entertainment (Books, music, dvd's and games). It is simpel micro-economics. Only a small fraction of a monthly income is spent on entertainment in these areas and in my personal experience, if I have bought a book for 20 euros, I won't easily buy a new dvd or game of the same price. It is not that I am not tempted, but I just don't have the money.

    The problem with newly released games is that they cost twice as much as a new book (take for instance Confusion Neal Stephenson) For me they go beyond my monthly entertainment allowance and I therefore have bought CSI in the bargain bin this month (only 7 euros) but certainly haven't bought a 50 euro game.

    Even worse is that many new games are not as much fun as they appear to be. This is true for cd's, dvd's and books as well. However, the pain in buying the wrong thing is much lower because of the lower prices.

    So all in all the games industry needs to make it worthwhile for me to buy a game at a whim, without considering the enormous price and without making me scared that I might have bought a lemon. In order to do this, prices have to come down. Way down to the same level of a good book, cd or dvd.
  • by Anonymous Coward
    Christmas is popular because sales double to triple. However, the number of titles released is an order of magnitude greater. *That* is the fundamental problem-- too many titles chasing too few dollars.
  • "Is there really a reason for game creators to worry about what sales Santa will bring them?"

    If they make good games, they dont have to worry.

  • There saying that games aren't going to make any money except for the ones that do.

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