Counting-Rupees
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Counting Rupees: Will the real Wii60 please stand up
Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming: With the Wii's apparent runaway success this generation, there's no doubt that both Sony and Microsoft are trying to figure out just what they can do – either in this generation or the next – to tap into the formula that's worked so well for Nintendo. Sony, in a seemingly obvious attempt to blunt the impact of Nintendo's newly styled controller, added motion sensitivity to their controllers before the PS3 launched. More recently, there have even been rumors that Microsoft may be prepping their own version of the Wii Remote to launch later this year for the 360. Is this really the answer Microsoft is looking for to combat the Wii?There are a lot of problems with this, although the common "doomed console peripheral" theory actually may be the least of them. The success of Guitar Hero and Rock Band has proven that, at least when bundled with an attractive game, console owners are just fine with buying new controller peripherals for their systems. No, the biggest problem for Microsoft here is simply a matter of audience. Microsoft has been working hard on wooing the "casual" audience, and has only rarely succeeded. Even a "hardcore" game like Halo 3 probably wouldn't sell 7.5 million copies without some "casual" players. But a quick look at the top-selling software for each system makes it extremely obvious how different the audiences already are for the two systems.
Counting Rupees: The business of politics
Each week Jeff Engel and Geoff Brooks rendez-vous on Joystiq to contribute Counting Rupees, a column on the business behind gaming: The politics of video games are well covered by other websites, but it's worth spending a little time to think about the business implications of politics on the industry and its customers -- particularly in light of recent events like the UK game study. Just how much day-to-day impact does this maneuvering really have? For all of the angst found in the gamer community over issues like the latest ridiculous violent video game ban, I'd argue that the average gamer is actually pretty well-insulated from the mess. So who does get affected? Well, the answer lies at least in part in figuring out the touch points that politics has on politicians, developers and publishers, and the people who buy and sell games in the first place. At its most basic, there are some essential conflicts of interest between these groups that get mediated by politics, and we can use them as the lens by which to think about this further. Let's start off with consumers themselves. What do they really want? Well, game players want to be able to play whatever they want, whenever they want to play. But they're not the only stakeholders here; for younger players, parents play an important role as intermediaries in determining what games get purchased and thus what games are available. Parents, more than anything, want control: the ability to control what their children play and filter out products that they view as offensive or objectionable. Industry figures have similarly simple incentives. They want to satisfy players' demands and supply the games they want -- that's how they make money. It's in their best interests to avoid any restrictions whatsoever on what they can produce or how they sell it. Retailers also have to worry about their brand image and how they're publicly perceived, which is why Wal-Marts don't stock Adults-Only rated games.
Counting Rupees: Battle of the brands
Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming: When Guitar Hero 3 launched last year it was an immediate success, selling out at a fairly quick pace throughout the holiday season. Following just behind it was Rock Band, selling very well, but not nearly as quickly as Guitar Hero. So far, all versions of Guitar Hero III have sold about 9.1M copies, versus just roughly 1.5M for Rock Band. Of course, part of the discrepancy lies in the fact that Rock Band launched on two platforms while Guitar Hero 3 launched on four, but that is about to be remedied with Harmonix's recent announcement of Rock Band for Wii. While Rock Band was a more ambitious game and representative of an evolution of the music game, it did seem like Activision may have made the right choice in buying the Guitar Hero publisher (and thus the Guitar Hero brand), but not the developer. With so much brand awareness already built into Guitar Hero, was there any way that Harmonix could possibly top the original creation that it no longer owned the rights to?
Counting Rupees: The year of the PS3
Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming: Apparently, 2008 is the year of the PS3. After what most consider a very shaky first year, the media is abuzz with a comeback for the company that was once king of consoles. EGM's March issue proudly proclaims on its cover that it's "The Revenge of the PS3". EDGE's December issue was entitled "The Empire Strikes Back" and even Joystiq's PS3 Fanboy has given us 10 reasons why the PS3 is back in the swing of things. Some analysts have proclaimed that the PS3 will do at least as well as the 360 in 2008, and others have the PS3 edging out the 360 by 2010 or even the Wii by 2011. Clearly, everyone is pointing to 2008 being a turning point of sorts for the Cell-powered beast. But is it actually true? Let's focus on, at least initially, Sony's battle against the 360. Certainly, the PS3 has a lot of things going for it. Blu-ray has officially won the next-gen DVD war; upcoming games, such as Metal Gear Solid 4, Killzone 2, and LittleBigPlanet show tremendous potential; and it has seemingly found a price point that people are willing to pay (as they did originally for the 360). In the US, at least so far this year, Sony has managed to outsell the 360 according to January and February NPD figures. But will it be enough?
Counting Rupees: Take me to your lead platform
Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming: N'Gai Croal of Level Up recently pointed to an interesting development factoid from EA CEO John Riccitiello's 3rd quarter earnings call. A Cowen & Company analyst noted that many publishers have had difficulty in completing PS3 titles quickly and asked whether or not EA had made progress in narrowing the development times between PS3 and 360 games. The answer appears to be that meeting technical specifications is no longer an issue for games where development led on the PS3 – but where development was either parallel or started on the 360, there's still a notable lag in speed and quality. Croal e-mailed EA with an obvious follow-up question: If that delay can be eliminated by starting with the PS3, would EA consider mandating that development begin there? Director of Communications Jeff Brown responded that no, the company doesn't provide such edicts and that a number of factors are considered when selecting a game's development path. Why might this be the case? I think this decision probably makes sense from a business perspective for several reasons.
Counting Rupees: Royalty Screwed
Each week Jeff Engel and Geoff Brooks alternate in contributing Counting Rupees, a column on the business behind gaming: Gamers were outraged in recent weeks by a rumor that Xbox Live Arcade royalties were being cut in half for developers; in fact, some developers were reportedly considering moving development from XBLA to the PlayStation Network because of the cuts. It was less clear why Microsoft would do something like this: At first glance, it appears to stifle independent game development and reduce the overall quality of XBLA as a platform. Clearly, Microsoft is just being greedy, right?Perhaps, but it's certainly not as clearcut as it seems at first glance. Although any changes to the royalty structure will mean changes -- and potentially significant ones -- for XBLA, they may still be beneficial in the long run for some people, possibly even increasing indie development.As is often the case with rumors, there's more to the story than a simple royalty cut. Let's think first about what the costs and benefits of the changes are to both developers and Microsoft, after which we can decide why the action might have been taken in the first place and what it all means to us as gamers. From a developer's perspective, the cost is pretty clear: Up to 35% of the total revenues of a game. Does the developer receive any benefits? Yes, some: As reported, developers will no longer have to pay for features like worldwide ratings or localization, which both reduces costs and potentially provides access to a larger international market. And from Microsoft's standpoint, the costs and benefits are essentially reversed: It no longer has to pay the royalties, but it does need to provide some additional services.
