Analysts Predict Tough Christmas For Game Publishers

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?

Christmas Madness

[EnglishTim]

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.

Sure enough. Acclaim down the drain.

[ballpoint]

link [yahoo.com].

Re:Doom 3 anyone?

[EddieBurkett]

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 said, I too expect Doom 3 to sell like gangbusters.

Additionally...

[MMaestro]

'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.

Blame it on Mom (and her stock investments)

[superultra]

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.