business-strategy
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Iwata: Nintendo 'thinking about a new business structure' following weak console sales
With Nintendo having to slash its forecasts following weak Wii U sales comes the contemplation of new business strategies. While not announcing any definitive changes in the company's direction, Nintendo President Satoru Iwata admitted at a press conference today in Osaka, Japan that the company is "thinking about a new business structure," Bloomberg reports. "Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business," Iwata said. "It's not as simple as enabling Mario to move on a smartphone." Nintendo took its 3DS projections for the fiscal year down from 18 million to 13.5 million. However, the bigger hit came with decreased projections for its home console, taking the Wii U down from 9 million to 2.8 million for the year. "We cannot continue a business without winning," Iwata added. "We must take a skeptical approach whether we can still simply make game players, offer them in the same way as in the past for 20,000 yen or 30,000 yen, and sell titles for a couple of thousand yen each."
Time magazine explores Apple's success
TIME Business has a short, but poignant article from Sam Gustin about Apple and its business strategy. Unlike similar articles that focused on Steve Jobs and his leadership style, this article looks at Apple as a whole. Gustin says that Apple has a winning combination of innovation, execution and opportunity that combined to propel the company to its lofty financial position. He points out that this is only the beginning and Apple will continue its dominance it if can out-think, out-innovate and out-execute its competitors. You can read the details at TIME's website.
PlayStation Move strategy to focus on 'more core titles,' says Sony's Koller
John Koller, director of hardware marketing for PlayStation, acknowledged to the Wall Street Journal that Microsoft's 8 million shipped Kinect units amount to a "very impressive" figure, though he assured that his company is still "happy where we are in the market" with Move. As of the end of November, Sony had shipped 4.1 million units of its motion controller and believes it has an edge over Microsoft in the race to earn the hard-won affections of the "hardcore" consumer. That's you, right? "The limitations are such that you can't create all the games you want to do," Koller suggested of Kinect, implying that Microsoft's controller-less technoloy lacks the precision control necessary to support so-called "core" titles -- just what Sony has in mind for Move in the coming months. The apparent strategy involves "layering on more and more core titles," Koller explained, and there are at least two Sony titles around the corner that fit the bill. While Move was intended to launch with core support in SOCOM 4, that game's delay to April, coupled with Killzone 3 in late February, means that Sony will have two of its core franchises equipped with Move support in the market within a few months. Microsoft and Kinect? Still zero. In a recent preview of Killzone 3's Move controls, our own Rany Nelson concluded, "I am now committed to using the Move for my first full playthrough of the game. Not only does its integration seem justified to me, but I'm sold on its improved accuracy and greater sense of immersion over the DualShock controller." Koller and Sony sure hope a lot more of us core-types will be sold, too. [Thanks, Devin]
THQ uDraw GameTablet 'doing very well,' software lined up through 2012
As Kinect and Move continue to make headlines as the season's hottest hardware, THQ is quietly enjoying the apparent success of its uDraw GameTablet, which launched November 14 for Wii. Early indications from the company suggest the kid-targeted device is selling well at retail (for around $70), as one tongue-in-cheek tweet from VP Danny Bilson hinted. Without sharing specific sales figures, Wayne Cline, director of product development for THQ's Kids, Family and Casual division, got a bit more specific about uDraw's performance. "Our early reports are looking very promising, and I know we're doing very well at Walmart, Best Buy and Toys R Us -- outlets like that," he told Joystiq. "And we're getting really good first-look feedback from a lot of things like parenting magazines and such. It's looking very positive." But how long will that last? %Gallery-99627%
GameTap closing Atlanta office, focusing on newer PC titles
The slow transition of GameTap since "partnering" with Metaboli back in 2008 continues, with the company shutting down its Atlanta "technical and support team" and sharing some details about the future of the service. Speaking with Joystiq, a GameTap representative explained that by bringing operations to France, the company will "simplify the technical architecture" and can create a "global support center based in Europe." The Atlanta office will be closed down at the end of October, while the company's San Francisco office will recruit ten people over the next year to "strengthen [GameTap's] presence with major U.S. partners, distributors or publishers." As for the immediate future of GameTap, the next update to the service will also occur at the end of this month, when all the games will use a new download technology and be 64-bit compatible. The company is trying to move away from being associated with retro games -- with the possibility of dropping its brand name altogether in the future. For now, the update will create three major tabs on the GameTap site: "PC games Unlimited Play," "PC games Download to Own" and "Retro games Unlimited Play." "We need to show that we have moved forward and that we now offer a wide range of recent PC games," the GameTap representative said. The company will add 15 more games to its catalog of 550 PC games. "Some old PC games will be replaced by more recent PC games or by some casual games. Our decisions were taken based on our gameplay statistics, which is much better than our own opinion about the games or the opinion expressed by some of our users on the forum. We offer what people play." We've listed the games being added to the service following the October update after the break. Additionally, you can check out Metaboli.com's PC game catalog for a sense of the kind of games GameTap hopes to offer going forward.
Ubisoft on becoming Kinect's 'top third-party publisher,' and on its history with 3D camera tech
Last night, Ubisoft held a Kinect-specific event in downtown San Francisco. There, president Laurent Detoc and senior VP of marketing and sales, Tony Key, talked about the company's strategy for Kinect and why it's investing so heavily to become the biggest third-party supporter of the device at launch. "I think today is a pretty good testament that we think Kinect will do well because this is an event only about Kinect, so that's our statement on how well we think it's going to do," said Detoc in his opening presentation. It's a technology the company believes is the future of gaming and it's not afraid to say it -- Detoc's next few minutes addressing attendees proved that.
Activision studios head brings development strategy into focus
"It doesn't make sense anymore," Activision executive VP of worldwide studios Dave Stohl declared to us in a small office, hidden away from the noisy E3 show floor. "You've really got to focus." The executive, who oversees every development studio that Activision owns, was reflecting on the old business model that encouraged studios to take on multiple projects at once. Today, the industry's leading third-party publisher has a new mantra: one game per studio. "People want the freedom to put all their resources against the big opportunity, and that's what we're trying to do," Stohl explained during our conversation at last month's show. We wondered if the shift in strategy was less ingenuity and more a sign of the times. Last year's holiday season was headlined by two major events: the slowdown of music game sales and the ridiculous success of Modern Warfare 2.
Ubisoft remains refocused on Xbox 360, PS3 in new year
In January, Ubisoft CEO Yves Guillemot told investors that the company would "refocus"' its development efforts on Xbox 360 and PS3 in 2010, with particular emphasis on iterating its major franchises on the HD consoles. Today, as Ubisoft reported its earnings (actually, losses) for the fiscal year ending March 31, the company remained committed to the ongoing strategy outlined earlier this year. "We will have more 360 [and] PS3 revenue this [fiscal] year than we had last year," Guillemot said during an investor call today. "The big franchises -- seven of the eight franchises -- will be on 360; and six will be on PS3. And we will have around six or seven on the Wii." CFO Alain Martinez put last fiscal year's combined sales from PS3 and Xbox 360 software at "about 45 percent" of revenue for the publisher, adding, "I wouldn't be surprised if we are over 50 percent on these two platforms" at the end of the current fiscal year (April 2010 – March 2011). Martinez noted that Wii software sales accounted for "about 26 percent" of revenue in the last fiscal year and hopes sales to be close to that percentage again this fiscal year. In total, Ubisoft is looking to draw "about 77 percent" of its revenue from the three console platforms over the next four quarters.
GDC: Surviving High School creator talks clever, profitable microtransactions
In early 2009, Centerscore co-founder Oliver Miao was assigned an extremely daunting task. His studio had recently been acquired by EA Mobile, and his higher-ups had requested an iPhone version of the studio's successful teen-dating sim series, Surviving High School. The difficulty didn't come in developing the title, but rather, in monetizing it. During his GDC panel titled "Surviving the iPhone: EA's Original Game Bet," Miao recounted the different business models Centerscore proposed to EA Mobile for SHS. The initial idea was to sell the game for 99 cents, and then hand out additional weekly "episodes" for free. While this would help build the brand, EA Mobile didn't anticipate enough return on the investment. It was denied, and Centerscore was sent back to the drawing board. The second idea was to offer the current episode of the game for free, but charge 99 cents for bundled episodes from previous weeks. This idea was also shot down, and Centerscore's project was threatened with cancellation. Finally, the two parties came up with a solution that's proven to be fairly lucrative: give the current episode for free, charge for previous episodes, and offer the next episode in advance for an additional 99 cents -- quite an innovative business model. Of course, Centerscore could have easily raked in the cash by simply charging $500 for one of its first mobile titles, Garfield Bowling. We can't think of a price we wouldn't pay for that gem.
Sony reorganization shuffles names, but doesn't mess with the games
You ready? Okay -- follow along: Sony announced today that the Sony Computer Entertainment subsidiary will change its name to SNE Platform (or "SNEP"), and then transfer its video game operations to a new subsidiary, named -- surprise! -- Sony Computer Entertainment. On April 1, SNEP, which will be primarily operating Sony's network services and business as a wholly-owned subsidiary, will merge with Sony, and then promptly dissolve into the parent company. Since Sony already owns all shares of SNEP, there's not going to be any market action (issuance of new shares, share capital increases or cash payments) upon the merger. So, wait, what's happening? Essentially, Sony is moving its network business out from under the gaming wing and bringing it up to the parent company level. This is a different path than the one laid out a year ago, which suggested SCE, as then operator of the network business (think: PSN), would begin to play a larger role in the unification of the company as it pertains to an online strategy. Instead, the "new" Sony Computer Entertainment will have a slightly more narrow focus, "mainly consisting of the planning, development, manufacturing and sales of home-use/portable game consoles and software," according to the reorganization announcement; and Sony Online Service, including the proposed expansion of PSN IDs to non-gaming Sony devices, will seemingly be handled by a new division (but possibly the same personnel) within the Sony parent company. Though listed as the "Representative Director" of the short-lived SNEP subsidiary, Kaz Hirai will presumably remain in charge of the PlayStation division now and after the April 1 merger. Sub-divisions SCEA and SCEE are unaffected by the reorganziation.
Schappert clarifies EA's sweeping DLC and online strategy
During this week's quarterly earning's report, EA COO John Schappert answered an investor question with a somewhat vague but potentially far-reaching comment regarding the publisher's future strategy for implementing online functionality into its games. "In fiscal 2011 [from April 31, 2010 to March 31, 2011], every one of EA's releases will have an online component, both downloadable content and online play," Schappert said, according to a VG247 report. CFO Eric Brown then cited Mass Effect 2's Cerberus Network as the company's "most recent example" of how this plan might manifest. The obvious question: Does the plan apply to all platforms, including Wii, DS, PSP, and mobile? Schappert clarified to Joystiq today: "My statement wasn't in reference to any specific platform as most of our titles are multiplatform and have different features per platform. Though you can expect our PC, PS3 and Xbox 360 titles to have very robust online features. Of course, depending on the title, this may extend to other platforms as well." While this clarification is not exactly the firestarter statement one might interpret from Schappert's original comment, the plan still raises concerns -- based on recent experiences -- that EA games' online components could continue to induce headaches so long as they are tied to EA.com accounts and the issues that have arisen as EA has increased its DLC efforts. If the plan is to include online components in all EA games in the future, then the wrinkles need to be ironed out of Project Ten Dollar now.
Ubisoft's Guillemot not trippin' about franchise fatigue
Ubisoft's current focus to iterate its "major franchises" seems to expose its key brands to franchise fatigue and, with it, dwindling sales -- just look what happened to sales of Guitar Hero and Tony Hawk when Activision implemented a similar strategy. However, Ubisoft CEO Yves Guillemot remains unconcerned about so-called franchise fatigue, as he emphasized today that the publisher's goal is to "increase and come out more often" with games. Speaking during a financial earnings call for investors, Guillemot expressed his belief that Ubisoft has taken plenty of time to develop the next installments in the Driver, Ghost Recon, Prince of Persia and Splinter Cell franchises -- development time that will ultimately result in more iterations in less time, in turn improving brand visibility and training consumers to expect these franchises more often, and plan their gaming budgets accordingly. He also pointed out that sales of these upcoming titles should boost sales of their franchises' legacy games. Of course, with that said, Guillemot re-emphasized that quality is still important and that the company has invested (and continues to invest) in building game engines and tools that can be used for the next 10 years. The CEO noted that Ubisoft development teams our given enough time to ensure very high quality work, adding that Ubisoft "takes those elements into consideration."
WSJ: Playfish creating social game based on 'well-known EA brand'
The Wall Street Journal today examines "Why Playfish Sold Itself to EA." Um, wouldn't you sell yourself for $300 million? While such an investigation might seem trivial, the WSJ calls in Playfish president and GM Kristian Segerstrale, who reveals that several hundred million is merely chump change. Playfish certainly considered a road to riches paved in the arduous process of going public as an independent company, but "as we advanced our conversations with EA, what became clear was that this would be genuine opportunity to accelerate our pace of growth and build a billion-dollar business faster," Segerstrale explains. To realize this dream -- to get rich really quick -- Playfish clearly saw it would take more than its prowess as a stand-out developer in the burgeoning social games arena. It would take brand power. According to the WSJ, as suggested by Segerstrale, "there will be a social game based on a well-known EA brand this year." Hardly a revelation, to be sure, but it's at least confirmation of a killer strategy. Take an established IP -- likely EA's The Sims -- and adapt it for a network of social gaming experiences that spans persistent platforms like Facebook and the iPhone. Oh, so that's why Playfish sold itself to EA. [Via Develop]
Riccitiello: Mirror's Edge deserves second chance, EA still pushing new IP
EA CEO John Riccitiello told IndustryGamers that the company has no intention of reducing its reliance on new IP. "Does this mean EA is backing away from investing in quality and innovation?" Riccitiello asked. "Absolutely not. It's religion for me; I believe quality and innovation is what works." EA faces a difficult task now: finding room in EA's now-reduced slate for the new content Riccitiello promises and the sequels the company must produce. But it's a task Riccitiello seems to believe is worth undertaking. "I believe there are publishers out there that are milking franchises at their peril," he said. "I do think you can sort of stop innovating and do well while you coast for a couple of editions before a product starts to fall apart or a sector starts to fall apart." The juggle involves sequels like Mirror's Edge 2, perhaps. "There are some things we learned about that [first] game," Riccitiello told Kotaku. "It was, I think, a massively innovative product. To be honest with you, I think it's a game that deserves to come back." The CEO said he's "had several very lively debates" with the dev team about the design of a future game. "And they are working on it."
Sony theory: From PlayStation to Wii and back again
SCEA marketing whiz Peter Dille has pitched the company's new game plan, and Wii's the bait, according to a recent interview with Gamasutra. Opting for more concession speech than victory declaration, Dille offers a "hats off" to Nintendo and its Wii for "doing something that hasn't been done" by expanding and diversifying the demographic of game console owners. Dille proposes that if this new class of gamers gets "hooked," then PS3 is in position to fulfill the next logical acquisition in their newfound "gaming habit." Dille suggests that the prospect of a "high-definition gaming experience" might drive a Wii family to invest in a PS3 as their living room "centerpiece," but doesn't specifically suggest why Sony's console might be favored over the other high-def game platform currently on the market. Still, Dille clearly understands the strength of the PlayStation brand, established by the ridiculously pervasive PS2 (which is still pervading in certain markets) and, likely, rightfully assumes that a significant chunk of Wii converts were once PS2 owners. Do you see the plan coming together now? "So we think that over time all those folks will migrate back to the PlayStation 3 -- when I say 'back,' that takes the view that they were PS2 gamers, went to the Wii, and then would come back."
Memoirs of a Gaijin Console
The story of the Xbox 360 in Japan should never be told, but Microsoft is still officially counting on a Hollywood ending:"We're committed to Japan for the long run, and we're off to a solid but not spectacular start, and I think that's what we expected to happen," Microsoft's Shane Kim told Kikizo recently.Kim pointed out that success in Japan is dependent on game makers making games specifically for the Japanese audience.One of these, Ninety Nine Nights by ex-Sega developer Tetsuya Mizuguchi, is already out, and sales have been underwhelming. The big games in the offing include Blue Dragon and Lost Odyssey - both RPGs developed by former Square Enix developer Hironobu Sakaguchi.I'd like to think it's all about the games and not some fundamental hatred for American consoles. Can the Xbox 360's fortunes in Japan be revived with one kira app?
Public Enemy # 360
Is the Xbox 360 hurting the gaming industry and hense the "public good"? Nich Maragos of 1up.com thinks so, and he makes his case in a scholarly essay that quotes everyone from Atari CEO Bruno Bonnell to Pyrrhus of Epirus: "In this case, Microsoft is underinvesting in the public good of maintaining a stable and growing market in general -- something that its rivals Nintendo and Sony could also benefit from, resulting in resources spent to further its competitors' goals -- and putting its own interests first. ... You can't really fault Microsoft for that, because that's capitalism for you -- a deeper-seated issue than this essay has the scope for. But I submit that the rush to a new generation was a bad idea anyway, not so much because it weakened the market but because it weakened its own position. Microsoft, after all, was also a victim of the market -- those were Xbox titles suffering right alongside the PS2 and GameCube games on shelves. Furthermore, the 360 production issues caused by the rush to launch have impacted the one reason Microsoft had for going ahead with it in the first place: that key first-mover advantage." Maragos opines that Microsoft's willingness to sandbag the market in exchange for a clumsy head start is a Pyrrhic victory at best. Only time will tell. But please, let's not confuse the "public good" as it relates to competing multi-national corporations with the "public good" as it relates to actual gamers. A slow-down in the current-gen market might cause concern at MS and Sony, but it's fine for consumers, who now have the ability to pick up Xbox and PS2 titles at reduced prices. As for fanboys, our early-adapter options have only increased, despite whatever troubles you may have had at the local Wal-Mart. I'll credit the evil capitalists at Microsoft with getting the party started. Of course, if you disagree, don't tell me, tell CBS.
