In Q3, EA significantly missed its numbers and revenue came in approximately
$150M below street estimates. Although it is difficult to tease apart the macro
and the micro – a significant portion relates to our own performance. Clear and simple – our titles did not perform to our expectations. With the
exception of FIFA, we did not deliver the blockbuster titles or the chart position
we expected. Competitively, EA had only 1 of the top 5 titles in North America
and Europe vs. typically 2 or more. We were depending on new IP in a year
where consumers were even more cautious with their dollars. And, one of our
anchor titles – Need for Speed -- did not deliver fully on our expectations.
From a macro standpoint, we saw certain retailers reduce inventories below
historical and expected levels, particularly in North America. During the holiday
quarter, we saw a significant discrepancy between our sell-in and sell-through.
This is a consequence of key retailers bringing down inventory levels. This is a
circumstance we don’t expect to be repeated in the future. In addition, the
strengthening of the US dollar negatively influenced our Q3 sales by
approximately $55M. Adding to this, our expense base was geared for a business that assumed much
more revenue – resulting in a significant shortfall in our profitability. And, while
we began cutting expenses aggressively in Q3, we could not get ahead of the
revenue shortfall to achieve our target profitability in the quarter.
Before I move to the future, let me spend a moment on some of the positives our
teams accomplished so far this year. We did make progress on some important
initiatives that will create value for EA for years to come.
• First – new IP. We launched Dead Space, SPORE, Warhammer Online,
Mirror’s Edge and a number of Hasbro games. And, we expect to benefit
in the future from increased sales from these franchises. Generally,
games with a “2†on them will sell better than the first version – and do so
with a lower R&D budget.
It's generally not good for companies to simply limp along with a tad of profit on huge, expensive projects.
Right, because a company's money comes to them in three ways, loan from a bank, sale of stock, or sale of bonds. In all three cases, whoever gave them that money wants a decent return in exchange for the money. A small profit might not even be enough to pay for the interest on the loan or bond, or it may mean with no dividends your stockholders will sell your stock and buy other stocks, driving down you stock price and market cap.
Big expensive projects must yield decent returns or else the company is in trouble. EA cannot afford to fund projects that simply breaks even or turn a tiny operating profit.
Now that the developer is with EA I fully expect Mass Effect 2 on both HD systems. They don't have to but it makes more since when trying to make their money back.
Also, EA advertised Bloom Blox on TV during December. Considering that was months after the game came out, I'd expect that retailers must have purchased a good amount for the holidays to warrant such commercials.
Q4 BioWare will release Mass Effect 2 on multiple platforms.
I'm surprised that news was only just mentioned in this thread, it was first released like a week ago. As for multiple platforms, it appearing on the PS3 depends entirely on the agreement Bioware made with Microsoft. If the deal is anything like the one Microsoft made with Epic for Gears of War, then Microsoft should have the option to publish Mass Effect 2. Even then, EA could just buy out the publishing rights, which would let them put it on the PC and PS3 simultaneously.
As for the release, it should be pointed out that it's referring to EA's fiscal year, so Mass Effect 2 is actually being planned for January-March 2010.
Anyway, what else are we talking about? I'm still hung up on Xenogears of Bore's post on page 88. I can't quite comprehend agreeing with him...
February 9, 2009 - Late this month Capcom will deliver Dead Rising: Chop Til You Drop, the Wii version of the 2006 zombie fest. In preparation for this significant release, we thought it might be a good time to take a look at some of Capcom's other major Wii releases and see how they performed at retail. We often receive requests from readers asking how many copies of their favorite games have been sold, and Zack & Wiki is one favorite we still hear about often. Other notable Capcom Wii releases include Resident Evil 4, Resident Evil: Umbrella Chronicles, and Okami.
So, how have these games sold? Here are the life-to-date sales numbers for the U.S. These numbers come by way of NPD.
Resident Evil 4 -- 759,000 units sold
Resident Evil: Umbrella Chronicles -- 398,800
Okami -- 165,900
Zack & Wiki -- 116,600
Ōkami sold 200,000 copies in North America in 2006, grossing approximately USD$8 million and ranking as the 100th best selling game of the year in the region.[118] By March of 2007, the total sales of the PlayStation 2 version were near 270,000.
Not sure how much Okami Wii has sold in Canada.
Edit:
Namco has confirmed earlier reports that it has revoked the Splatterhouse project from developer Bottlerocket.
Last weekend saw rumours surface that the publisher had reclaimed developer kits and related assets from the developer, instead choosing to trust the Afro Samurai team to finish the project.
"We have decided to part ways with Bottlerocket Entertainment but we are committed to bringing Splatterhouse to the Xbox 360 and PlayStation 3 later this year," a Namco spokesperson told Kotaku.
"At this time, we are not ready to discuss specific development details about the game and wish Bottlerocket the best of luck in their future endeavours."
It still remains unclear what the future holds for the developer, which was already suffering from the loss of a project associated with Brash Entertainment.
February 9, 2009 - Late this month Capcom will deliver Dead Rising: Chop Til You Drop, the Wii version of the 2006 zombie fest. In preparation for this significant release, we thought it might be a good time to take a look at some of Capcom's other major Wii releases and see how they performed at retail. We often receive requests from readers asking how many copies of their favorite games have been sold, and Zack & Wiki is one favorite we still hear about often. Other notable Capcom Wii releases include Resident Evil 4, Resident Evil: Umbrella Chronicles, and Okami.
So, how have these games sold? Here are the life-to-date sales numbers for the U.S. These numbers come by way of NPD.
Resident Evil 4 -- 759,000 units sold
Resident Evil: Umbrella Chronicles -- 398,800
Okami -- 165,900
Zack & Wiki -- 116,600
So, across two platforms Okami almost sold 500K. Not too bad.
Thought Umbrella Chronicles did better than that though.
So, across two platforms Okami almost sold 500K. Not too bad.
Thought Umbrella Chronicles did better than that though.
It did. All of these games did better than this. Because this is just USA numbers, and doesn't include the rest of NA nor Europe nor Japan, which can significantly add to the numbers.
For example, as of May 08, Re4 did 1.25M and REUC did 1.05M. Worldwide that is. According to capcom.
Following poor financial results, Sega Sammy is asking 560 staff to volunteer for redundancy, as the company attempts to return to profitability in the next financial year.
Sega is also to close 110 amusement facilities, and slash 20 per cent of research and development costs in its amusement machine and consumer business.
The publisher will now consult with staff for approximately two weeks in a bid to reduce the headcount, which currently stands at 3127 employees.
Sega expects to payout JPY 4 billion in severance allowances and reduce annual labour costs by around JPY 5 billion for the year ended March 2010.
For the nine months to December 31, 2008, the publisher recorded a USD 119 million loss (JPY 10.8 billion).
I thought volunteering for redundancy was usually a stupid thing because it ensures that the ones who leave are those skilled enough to get jobs elsewhere leaving the dead weight still with the company.
It looks like it will mostly affect the amusement part of the business.
So Sega has been hit hard. They are planning to cut 18% of their workforce.
Here is the Edge article. I'm going to try and look at the quarterly report and see how much of this is the arcades and how much is console software.
Sega added that sales for* Sonic Unleashed and Football Manager* 2009* were particularly strong.* “However,* in* Japan,* sales of titles for the year-end shopping season were weak, and whole-year numbers of sales are expected to fall below the initial plan.*â€
The Nielsen Company's Monitor-Plus advertising monitoring service shows that companies spent more than $823 million in 2008 to promote video games in the U.S.
With that claim, the media research group revealed that it established a long term agreement with Electronic Entertainment Design and Research (EEDAR), a research firm specializing in the video game industry, to provide detailed anlysis of historical marketing campaigns in the games business.
EEDAR will integrate information from Nielsen's Monitor-Plus with its own Game DNA service, a proprietary database of video game features covering over 8,000 titles.
The combined data will be available with digital versions of the print and TV ads through EEDAR's GamePulse information service, as well as its DesignMetrics sales projection and risk analysis product.
"The combination of Nielsen market intelligence with EEDAR’s games metrics and analysis will be a valuable resource that will enable games publishers to make more informed decisions regarding the $823 million spent promoting video game titles,” says The Nielsen Company's VP of New Business Development Enid Maran.
"EEDAR is very pleased to work with The Nielsen Company -- one of the most trusted names in marketing research," EEDAR's executive chairman Gregory Short adds. "The integration of Monitor-Plus marketing data and creative assets into EEDAR technologies will redefine how the video game industry can analyze and best leverage the pivotal role marketing plays in the consumer purchase process."
Damn.
Edit 2:
About Sega from Gamasutra
The company sold 21.1 million units of software over the period, of which 9.1 million were in Europe, 8.8 million in the U.S. and 9.1 million in Europe and 3.1 million in Japan and other regions.
Total net sales for the consumer business segment saw net sales of ¥96.2 billion ($1.1bn), with an operating loss of ¥5.65 billion ($61.9m).
Following the results, the company has lowered its expectations for the full year, with net sales predictions down 7.4 percent to ¥435 billion ($4.77bn) and net income now expected to be a loss of ¥26.5 billion ($290m) instead of a profit of ¥5 billion ($55m).
ega Sammy Holdings has announced dramatic measures to alleviate losses,* beginning with the closure of* 110* amusement facilities,* along with voluntary redundancies of some* 560* staff members.*
“Sega* has failed to swiftly respond to sharp changes in the business conditions,*†read the company's investor report.* * “[Sega] is expected to record substantial operating losses in its amusement facilities business and consumer business in two consecutive years.*â€
“For Sega to restore profitability with certainty in the next fiscal year,* it is essential to further reduce fixed cost,* including labor cost,* among others.*â€
Sega will now embark on voluntary redundancies across its workforce,* as well as* close* 110* amusement facilities,* “with poor future potential and profitability*â€, in order to save the company from its haemorrhaging money flow.*
The staff cuts will account for 18 percent of the company's workforce. If all * 560* redundancies are met voluntarily,* the firm will save itself an annual labour cost of some* ¥5* billion.* Severance pay and other such benefits will give the firm a one-time loss of* ¥4* billion.
[edit] Yep the weird thing is that they don't show up until you post or I guess hit preview. Hmmmm.
lowlylowlycook on
(Please do not gift. My game bank is already full.)
Seems operating losses for the arcades and consumer were similar. But operating losses don't include the currency losses which I'd guess are concentrated in the consumer segment since that is where their overseas income is coming from.
Those were 1.4B yen
lowlylowlycook on
(Please do not gift. My game bank is already full.)
Aren't they just the publisher on Rock Band 2 also? I thought it technically falls under the umbrella of MTV Games.
They're just the distributor.
In other words, they're job is simply to make sure that the game gets into stores properly, and "ready for consumption" by the consumer. A pretty minimal role, really, but nevertheless a necessary one.
So who's fault is the total fiasco in Europe?
Because someone is doing a really shitty job here.
Aren't they just the publisher on Rock Band 2 also? I thought it technically falls under the umbrella of MTV Games.
They're just the distributor.
In other words, they're job is simply to make sure that the game gets into stores properly, and "ready for consumption" by the consumer. A pretty minimal role, really, but nevertheless a necessary one.
So who's fault is the total fiasco in Europe?
Because someone is doing a really shitty job here.
You don't have anything on the Australians.
And the only thing I can imagine, one that isn't 'HMX/EA hates non-NA, non--360 owners', is that music licensing isn't completely universal and somebody somewhere is dragging their feet.
Brainiac 8Don't call me Shirley...Registered Userregular
edited February 2009
Vancouver 2010 Olympics licensing director confirms Mario and Sonic sequel
February 10th, 2009
“Last year, 2008, they had a very successful game using Mario and Sonic at the Beijing Games, as well as a multi-sport simulation type of game. That’s what’s being discussed and planned for Vancouver. We are feeling optimistic about sales because of the Beijing experience.†- Dennis Kim, director of licensing and merchandising for Vancouver 2010
I bet Sega isn't very pleased with them spoiling the announcement of a sequel to Mario & Sonic. Nintendo and Sega I'm sure are ready to sell another five million or so copies. :P
Aren't they just the publisher on Rock Band 2 also? I thought it technically falls under the umbrella of MTV Games.
They're just the distributor.
In other words, they're job is simply to make sure that the game gets into stores properly, and "ready for consumption" by the consumer. A pretty minimal role, really, but nevertheless a necessary one.
So who's fault is the total fiasco in Europe?
Because someone is doing a really shitty job here.
You don't have anything on the Australians.
And the only thing I can imagine, one that isn't 'HMX/EA hates non-NA, non--360 owners', is that music licensing isn't completely universal and somebody somewhere is dragging their feet.
Yeah but what about the whole "Hey we released RB2 now so fuck you guys if you want the decent RB2 instruments LOL make do with the RB1 gear for a few more months!"
Aren't they just the publisher on Rock Band 2 also? I thought it technically falls under the umbrella of MTV Games.
They're just the distributor.
In other words, they're job is simply to make sure that the game gets into stores properly, and "ready for consumption" by the consumer. A pretty minimal role, really, but nevertheless a necessary one.
So who's fault is the total fiasco in Europe?
Because someone is doing a really shitty job here.
You don't have anything on the Australians.
And the only thing I can imagine, one that isn't 'HMX/EA hates non-NA, non--360 owners', is that music licensing isn't completely universal and somebody somewhere is dragging their feet.
Yeah but what about the whole "Hey we released RB2 now so fuck you guys if you want the decent RB2 instruments LOL make do with the RB1 gear for a few more months!"
HMX/EA hates non-NA, non-360 owners?
That one has me stumped. Perhaps a technical issue with their design and EU standards? Maybe partly because they didn't want a repeat of the original RB1 release and figured it'd be easier to just drop the software so folks can at least play it?
Aren't they just the publisher on Rock Band 2 also? I thought it technically falls under the umbrella of MTV Games.
They're just the distributor.
In other words, they're job is simply to make sure that the game gets into stores properly, and "ready for consumption" by the consumer. A pretty minimal role, really, but nevertheless a necessary one.
So who's fault is the total fiasco in Europe?
Because someone is doing a really shitty job here.
You don't have anything on the Australians.
And the only thing I can imagine, one that isn't 'HMX/EA hates non-NA, non--360 owners', is that music licensing isn't completely universal and somebody somewhere is dragging their feet.
Yeah but what about the whole "Hey we released RB2 now so fuck you guys if you want the decent RB2 instruments LOL make do with the RB1 gear for a few more months!"
HMX/EA hates non-NA, non-360 owners?
That one has me stumped. Perhaps a technical issue with their design and EU standards? Maybe partly because they didn't want a repeat of the original RB1 release and figured it'd be easier to just drop the software so folks can at least play it?
Maybe they're clearing excess stock internationally. That happens sometimes... I remember Sony dumped a bunch of their unsold THREEAXIS controllers on Europe after the Dual Shock 2 was out everywhere else.
Aren't they just the publisher on Rock Band 2 also? I thought it technically falls under the umbrella of MTV Games.
They're just the distributor.
In other words, they're job is simply to make sure that the game gets into stores properly, and "ready for consumption" by the consumer. A pretty minimal role, really, but nevertheless a necessary one.
So who's fault is the total fiasco in Europe?
Because someone is doing a really shitty job here.
You don't have anything on the Australians.
And the only thing I can imagine, one that isn't 'HMX/EA hates non-NA, non--360 owners', is that music licensing isn't completely universal and somebody somewhere is dragging their feet.
Yeah but what about the whole "Hey we released RB2 now so fuck you guys if you want the decent RB2 instruments LOL make do with the RB1 gear for a few more months!"
HMX/EA hates non-NA, non-360 owners?
That one has me stumped. Perhaps a technical issue with their design and EU standards? Maybe partly because they didn't want a repeat of the original RB1 release and figured it'd be easier to just drop the software so folks can at least play it?
I'd agree with that if they could at least give us a release date for the new gear. My pedal broke months back, picked up RB2 last November as the improved gear was supposed to be with us before Xmas, picked up the AC/DC pack, and still no release date! I'm not going to buy another kit knowing there is new improved gear available elsewhere already.
I mean Hell, the Mad Catz Cymbals have now been released... with nothing to plug them into.
And shitty 3rd party drums are sneaking into the market while EA/MTV/Harmonix have dropped the ball. Not to mention all the people just saying bollocks to Rock Band and buying GHWT instead.
So, I think it's safe to say that the theory that games are recession proof, is pretty much dead. Up and down, game companies are being affected. When Nintendo has problems meeting their revenue and sales expectations (particularly in Japan), that tells ya something about the state of the world economy.
Now, I will grant you that games are certainly recession resistant. While bad, the games industry seems to still be doing a lot better as a whole, especially compared to other industries (auto, travel, retail, etc.). After all, the industry itself still grew year over year. But just not at the rate many companies expected to.
In a way, this could be a very good thing. Arguably the industry has gotten pretty bloated as of late. Some consolidation, while very painful (which I can personally attest to), is needed. Heck, I think most of us as gamers (well, unless you only own a Wii) admit that there were just too many good games released last holiday season. I am fine with seeing fewer game releases, and maybe making the ones remaining even better. That would be good to see.
So, I think it's safe to say that the theory that games are recession proof, is pretty much dead. Up and down, game companies are being affected. When Nintendo has problems meeting their revenue and sales expectations (particularly in Japan), that tells ya something about the state of the world economy.
Not really, any company can fall short of expectations given a little economic downturn. Nintendo's expectations are just absurdly high.
Aren't they just the publisher on Rock Band 2 also? I thought it technically falls under the umbrella of MTV Games.
They're just the distributor.
In other words, they're job is simply to make sure that the game gets into stores properly, and "ready for consumption" by the consumer. A pretty minimal role, really, but nevertheless a necessary one.
So who's fault is the total fiasco in Europe?
Because someone is doing a really shitty job here.
You don't have anything on the Australians.
And the only thing I can imagine, one that isn't 'HMX/EA hates non-NA, non--360 owners', is that music licensing isn't completely universal and somebody somewhere is dragging their feet.
Yeah but what about the whole "Hey we released RB2 now so fuck you guys if you want the decent RB2 instruments LOL make do with the RB1 gear for a few more months!"
HMX/EA hates non-NA, non-360 owners?
That one has me stumped. Perhaps a technical issue with their design and EU standards? Maybe partly because they didn't want a repeat of the original RB1 release and figured it'd be easier to just drop the software so folks can at least play it?
I'd agree with that if they could at least give us a release date for the new gear. My pedal broke months back, picked up RB2 last November as the improved gear was supposed to be with us before Xmas, picked up the AC/DC pack, and still no release date! I'm not going to buy another kit knowing there is new improved gear available elsewhere already.
I mean Hell, the Mad Catz Cymbals have now been released... with nothing to plug them into.
And shitty 3rd party drums are sneaking into the market while EA/MTV/Harmonix have dropped the ball. Not to mention all the people just saying bollocks to Rock Band and buying GHWT instead.
For what it's worth, I empathise with your situation. But I've found that it's never as easy as just commenting on an issue. Especially with HMX's history with such things. (e.g. They promised Nevermind! They promised SRV/Jane's Addiction by the end of the year!)
I'm sure whatever the reason is, it's not a very good one (most likely from a consumer perspective) so it's better to say nothing rather than confuse the issue further. I'm fairly certain they aren't doing it out of spite or some other ill-conceived theory.
It's not practical, but can't the instruments be imported? Or is there some kind of regional lock on the peripherals?
The entertainment industry, as a whole, is largely resistant to recessions. The games industry is part of the entertainment industry. However, it is one which has a larger entry cost (console price), and individual games, while often providing longer periods of entertainment, are still more expensive than buying or renting a movie. Because of this, the gaming industry is going to be hit harder than the rest of the entertainment industry. However, simultaneous with the recession hitting, the ballooning production costs of HD gaming and the crap-shoot which is the game's success was coming to a head. The recession intensified those problems, making what was previously a pretty awful situation into a do-or-die one, resulting in the death of lots of development houses/publishers who had been operating in that manner, followed by an increasing consolidation of the market behind those who didn't. The primary benefactor of this is obviously Nintendo, but that doesn't mean they aren't hit by the recession themselves.
The entertainment industry, as a whole, is largely resistant to recessions. The games industry is part of the entertainment industry. However, it is one which has a larger entry cost (console price), and individual games, while often providing longer periods of entertainment, are still more expensive than buying or renting a movie. Because of this, the gaming industry is going to be hit harder than the rest of the entertainment industry. However, simultaneous with the recession hitting, the ballooning production costs of HD gaming and the crap-shoot which is the game's success was coming to a head. The recession intensified those problems, making what was previously a pretty awful situation into a do-or-die one, resulting in the death of lots of development houses/publishers who had been operating in that manner, followed by an increasing consolidation of the market behind those who didn't. The primary benefactor of this is obviously Nintendo, but that doesn't mean they aren't hit by the recession themselves.
Pretty much.
I've said this before, but the recession is just going to hasten the evolution of the game market, not change the evolutionary direction.
The entertainment industry, as a whole, is largely resistant to recessions. The games industry is part of the entertainment industry. However, it is one which has a larger entry cost (console price), and individual games, while often providing longer periods of entertainment, are still more expensive than buying or renting a movie. Because of this, the gaming industry is going to be hit harder than the rest of the entertainment industry. However, simultaneous with the recession hitting, the ballooning production costs of HD gaming and the crap-shoot which is the game's success was coming to a head. The recession intensified those problems, making what was previously a pretty awful situation into a do-or-die one, resulting in the death of lots of development houses/publishers who had been operating in that manner, followed by an increasing consolidation of the market behind those who didn't. The primary benefactor of this is obviously Nintendo, but that doesn't mean they aren't hit by the recession themselves.
Pretty much.
I've said this before, but the recession is just going to hasten the evolution of the game market, not change the evolutionary direction.
Are you suggesting that you think moneymen won't be hesitant to spend on innovations that don't have proven success rates?
I think, more than anything, success in terms of "who developers/publishers initially back" for the next generation will be largely based off of who can get the costs for production on their platform low enough.
So, I think it's safe to say that the theory that games are recession proof, is pretty much dead. Up and down, game companies are being affected. When Nintendo has problems meeting their revenue and sales expectations (particularly in Japan), that tells ya something about the state of the world economy.
Now, I will grant you that games are certainly recession resistant. While bad, the games industry seems to still be doing a lot better as a whole, especially compared to other industries (auto, travel, retail, etc.). After all, the industry itself still grew year over year. But just not at the rate many companies expected to.
In a way, this could be a very good thing. Arguably the industry has gotten pretty bloated as of late. Some consolidation, while very painful (which I can personally attest to), is needed. Heck, I think most of us as gamers (well, unless you only own a Wii) admit that there were just too many good games released last holiday season. I am fine with seeing fewer game releases, and maybe making the ones remaining even better. That would be good to see.
Uh, no. The is at the very least recession proof. If companies can't deal with growth at almost 20% YoY without shitting their pants then that's on them, not the recession.
For fuck's sake the industry's revenue DOUBLED from 2005 to 2008 in the US. If you can't make money now you should just get the fuck out of the industry and save your investor's the heartache.
Now Japanese export driven companies are not safe from the Yen's appreciation but that is only tangentially related to the recession. And within Japan their might be something like a recession but that is mostly the Japanese refusing to buy home consoles and the PSP and DS having had such banner years previously. In any case Japanese companies are probably doing better than Western ones.
Despite the Yen Nintedo's profits for this year are going to be huge. Much bigger than any gaming company or division has made.
lowlylowlycook on
(Please do not gift. My game bank is already full.)
Riccitiello said during EA's Q3 2009 earnings call that "development is typically a third to a fourth as much for a Wii game than it is for a PS3 or an Xbox 360 game."
The expense of development for HD systems necessitates far higher sales for the games to turn a profit and be a success on the platforms. It doesn't require quite as high the types of sales for Wii games to turn a profit.
Which means if you develop multiplatform for the HD twins, you have to spend 6 to 8 times more to make one game. Which means if a game breaks even at say, 400,000 for the WII, a multiplatform HD game will break even at some where between 2.4 to 3.2 million sold.
So now do you see why ME and DS may have been huge losers financially?
I know I'm a little late on this but, really? That figure you pulled up out of absolutely nowhere does not make a bit of sense. 2.4-3.2 million? Do you realise how much money that is? You're assuming that every HD game has a $100+ million budget, which is laughable. I'd bet you could count the amount of games this generation with that sort of budget on one hand.
Around the PS3's launch, the CEO of Namco Bandai said that each HD game they develop has to sell around 500k to break even. Wii games would obviously break even at a much lower point.
But aren't video games still posting record revenues? What we're seeing is the culmination of changed business practices as we've entered the heart of the current generation. What we're finding out is that those practices didn't pan out. The recession simply means that investors are less willing to hold to struggling businesses. Recession or not, most of these companies would be struggling anyways. Nintendo's lower forecast comes from two things, a strong yen and that Japan has become portable nation and thus they are less interested in the Wii. Now is simply the best time to restructure because people will view it more as an economy problem, and less of a problem of bad direction.
Rakai on
[SIGPIC][/SIGPIC]XBL: Rakayn | PS3: Rakayn | Steam ID
The entertainment industry, as a whole, is largely resistant to recessions. The games industry is part of the entertainment industry. However, it is one which has a larger entry cost (console price), and individual games, while often providing longer periods of entertainment, are still more expensive than buying or renting a movie. Because of this, the gaming industry is going to be hit harder than the rest of the entertainment industry. However, simultaneous with the recession hitting, the ballooning production costs of HD gaming and the crap-shoot which is the game's success was coming to a head. The recession intensified those problems, making what was previously a pretty awful situation into a do-or-die one, resulting in the death of lots of development houses/publishers who had been operating in that manner, followed by an increasing consolidation of the market behind those who didn't. The primary benefactor of this is obviously Nintendo, but that doesn't mean they aren't hit by the recession themselves.
Pretty much.
I've said this before, but the recession is just going to hasten the evolution of the game market, not change the evolutionary direction.
Are you suggesting that you think moneymen won't be hesitant to spend on innovations that don't have proven success rates?
I think the moneymen will hesitate plenty, but the increasing failure of easy moneymakers (big HD epics, casual-oriented shovelware) may inspire a few to try something that doesn't seem like 47,000 other games. Actually EA is giving this a shot with things like Mirror's Edge and Henry Hatsworth*, with mixed results.
Then again the history of video games is largely paved with "me-too" efforts, so my hope for that may be a pipe dream.
My other real predictions are consolidation, increased digital distribution, shorter games and more casual-friendly fare.
*I realize bringing up this game in this thread is just asking for trouble, but my frothing demand for this increased when I learned there is tea time in this game. And it works as a power-up.
After two successful tea times, you get to pilot a battle mech.
Maybe it's because I'm a warped anglophile, but that's awesome.
Yarrrrrgh, revenue. Yes, revenues are record, but some of the biggest moneymakers in the biz are still losing money even while making more and more revenue. EA's a top example of this.
So, I think it's safe to say that the theory that games are recession proof, is pretty much dead. Up and down, game companies are being affected. When Nintendo has problems meeting their revenue and sales expectations (particularly in Japan), that tells ya something about the state of the world economy.
Now, I will grant you that games are certainly recession resistant. While bad, the games industry seems to still be doing a lot better as a whole, especially compared to other industries (auto, travel, retail, etc.). After all, the industry itself still grew year over year. But just not at the rate many companies expected to.
In a way, this could be a very good thing. Arguably the industry has gotten pretty bloated as of late. Some consolidation, while very painful (which I can personally attest to), is needed. Heck, I think most of us as gamers (well, unless you only own a Wii) admit that there were just too many good games released last holiday season. I am fine with seeing fewer game releases, and maybe making the ones remaining even better. That would be good to see.
Uh, no. The is at the very least recession proof. If companies can't deal with growth at almost 20% YoY without shitting their pants then that's on them, not the recession.
For fuck's sake the industry's revenue DOUBLED from 2005 to 2008 in the US. If you can't make money now you should just get the fuck out of the industry and save your investor's the heartache.
Now Japanese export driven companies are not safe from the Yen's appreciation but that is only tangentially related to the recession. And within Japan their might be something like a recession but that is mostly the Japanese refusing to buy home consoles and the PSP and DS having had such banner years previously. In any case Japanese companies are probably doing better than Western ones.
Despite the Yen Nintedo's profits for this year are going to be huge. Much bigger than any gaming company or division has made.
I think you need to take your head out of the sand.
Yes, revenue may have doubled between 2005 and 2008. Too bad the recession started in 2008 and is continuing well into 2009. This is not a measure of "the past 5 years", but of the past year. There are many examples of companies making plenty of money (and not even just in the games industry) between '05 and '08, only to see sales tank over the past year. Even Nintendo in Japan saw this.
Also, once again I disagree with your attitude of "Well, Nintendo is doing gangbusters, so that just means everyone else sucks". While that may be true, that's very narrow minded. Last I checked, we're not Nintendo shareholders/investors/employees, but gamers and fans of all various platforms and companies. So I have an interest in what the business situation is like for all gaming companies. And it's clear, especially over the past few weeks, how many developers (both in West and East) are being unduly affected by the global recession going on.
So, I think it's safe to say that the theory that games are recession proof, is pretty much dead. Up and down, game companies are being affected. When Nintendo has problems meeting their revenue and sales expectations (particularly in Japan), that tells ya something about the state of the world economy.
Now, I will grant you that games are certainly recession resistant. While bad, the games industry seems to still be doing a lot better as a whole, especially compared to other industries (auto, travel, retail, etc.). After all, the industry itself still grew year over year. But just not at the rate many companies expected to.
In a way, this could be a very good thing. Arguably the industry has gotten pretty bloated as of late. Some consolidation, while very painful (which I can personally attest to), is needed. Heck, I think most of us as gamers (well, unless you only own a Wii) admit that there were just too many good games released last holiday season. I am fine with seeing fewer game releases, and maybe making the ones remaining even better. That would be good to see.
Uh, no. The is at the very least recession proof. If companies can't deal with growth at almost 20% YoY without shitting their pants then that's on them, not the recession.
For fuck's sake the industry's revenue DOUBLED from 2005 to 2008 in the US. If you can't make money now you should just get the fuck out of the industry and save your investor's the heartache.
Now Japanese export driven companies are not safe from the Yen's appreciation but that is only tangentially related to the recession. And within Japan their might be something like a recession but that is mostly the Japanese refusing to buy home consoles and the PSP and DS having had such banner years previously. In any case Japanese companies are probably doing better than Western ones.
Despite the Yen Nintedo's profits for this year are going to be huge. Much bigger than any gaming company or division has made.
I think you need to take your head out of the sand.
Yes, revenue may have doubled between 2005 and 2008. Too bad the recession started in 2008 and is continuing well into 2009. This is not a measure of "the past 5 years", but of the past year. There are many examples of companies making plenty of money (and not even just in the games industry) between '05 and '08, only to see sales tank over the past year. Even Nintendo in Japan saw this.
Also, once again I disagree with your attitude of "Well, Nintendo is doing gangbusters, so that just means everyone else sucks". While that may be true, that's very narrow minded. Last I checked, we're not Nintendo shareholders/investors/employees, but gamers and fans of all various platforms and companies. So I have an interest in what the business situation is like for all gaming companies. And it's clear, especially over the past few weeks, how many developers (both in West and East) are being unduly affected by the global recession going on.
Did sales in the final quarter of 2008? Did I miss something? Or did you miss the DS selling 3 million units in December? 3 million fucking units.
Did the recession cause people to buy many more Wiis rather than cheaper 360s? Nintendo is eating the rest of the industry alive, furthermore 3rd parties obviously bet on the wrong horses, I don't see how the recession comes into it.
But, please explain how the global recession is affecting gaming companies. Any data for that?
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Right, because a company's money comes to them in three ways, loan from a bank, sale of stock, or sale of bonds. In all three cases, whoever gave them that money wants a decent return in exchange for the money. A small profit might not even be enough to pay for the interest on the loan or bond, or it may mean with no dividends your stockholders will sell your stock and buy other stocks, driving down you stock price and market cap.
Big expensive projects must yield decent returns or else the company is in trouble. EA cannot afford to fund projects that simply breaks even or turn a tiny operating profit.
Crazy stuff in there.
Q4 BioWare will release Mass Effect 2 on multiple platforms.
Well, honestly, Mass Effect 1 was released on multiple platforms (360 and PC). So this announcement isn't too surprising.
"Multiple platforms" could mean 360 and PC, or it could mean 360, PC, and PS3.
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Really, one of the few things the PS3 is missing is Mass Effect.
Also, EA advertised Bloom Blox on TV during December. Considering that was months after the game came out, I'd expect that retailers must have purchased a good amount for the holidays to warrant such commercials.
I'm surprised that news was only just mentioned in this thread, it was first released like a week ago. As for multiple platforms, it appearing on the PS3 depends entirely on the agreement Bioware made with Microsoft. If the deal is anything like the one Microsoft made with Epic for Gears of War, then Microsoft should have the option to publish Mass Effect 2. Even then, EA could just buy out the publishing rights, which would let them put it on the PC and PS3 simultaneously.
As for the release, it should be pointed out that it's referring to EA's fiscal year, so Mass Effect 2 is actually being planned for January-March 2010.
Anyway, what else are we talking about? I'm still hung up on Xenogears of Bore's post on page 88. I can't quite comprehend agreeing with him...
Edit: Well, they are fucked.
So, across two platforms Okami almost sold 500K. Not too bad.
Thought Umbrella Chronicles did better than that though.
It did. All of these games did better than this. Because this is just USA numbers, and doesn't include the rest of NA nor Europe nor Japan, which can significantly add to the numbers.
For example, as of May 08, Re4 did 1.25M and REUC did 1.05M. Worldwide that is. According to capcom.
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It looks like it will mostly affect the amusement part of the business.
Here is the Edge article. I'm going to try and look at the quarterly report and see how much of this is the arcades and how much is console software.
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http://www.gamasutra.com/php-bin/news_index.php?story=22242 Damn.
Edit 2:
About Sega from Gamasutra
“Sega* has failed to swiftly respond to sharp changes in the business conditions,*†read the company's investor report.* * “[Sega] is expected to record substantial operating losses in its amusement facilities business and consumer business in two consecutive years.*â€
“For Sega to restore profitability with certainty in the next fiscal year,* it is essential to further reduce fixed cost,* including labor cost,* among others.*â€
Sega will now embark on voluntary redundancies across its workforce,* as well as* close* 110* amusement facilities,* “with poor future potential and profitability*â€, in order to save the company from its haemorrhaging money flow.*
The staff cuts will account for 18 percent of the company's workforce. If all * 560* redundancies are met voluntarily,* the firm will save itself an annual labour cost of some* ¥5* billion.* Severance pay and other such benefits will give the firm a one-time loss of* ¥4* billion.
[edit] Yep the weird thing is that they don't show up until you post or I guess hit preview. Hmmmm.
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Seems operating losses for the arcades and consumer were similar. But operating losses don't include the currency losses which I'd guess are concentrated in the consumer segment since that is where their overseas income is coming from.
Those were 1.4B yen
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So who's fault is the total fiasco in Europe?
Because someone is doing a really shitty job here.
You don't have anything on the Australians.
And the only thing I can imagine, one that isn't 'HMX/EA hates non-NA, non--360 owners', is that music licensing isn't completely universal and somebody somewhere is dragging their feet.
I bet Sega isn't very pleased with them spoiling the announcement of a sequel to Mario & Sonic. Nintendo and Sega I'm sure are ready to sell another five million or so copies. :P
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Yeah but what about the whole "Hey we released RB2 now so fuck you guys if you want the decent RB2 instruments LOL make do with the RB1 gear for a few more months!"
HMX/EA hates non-NA, non-360 owners?
That one has me stumped. Perhaps a technical issue with their design and EU standards? Maybe partly because they didn't want a repeat of the original RB1 release and figured it'd be easier to just drop the software so folks can at least play it?
Maybe they're clearing excess stock internationally. That happens sometimes... I remember Sony dumped a bunch of their unsold THREEAXIS controllers on Europe after the Dual Shock 2 was out everywhere else.
I'd agree with that if they could at least give us a release date for the new gear. My pedal broke months back, picked up RB2 last November as the improved gear was supposed to be with us before Xmas, picked up the AC/DC pack, and still no release date! I'm not going to buy another kit knowing there is new improved gear available elsewhere already.
I mean Hell, the Mad Catz Cymbals have now been released... with nothing to plug them into.
And shitty 3rd party drums are sneaking into the market while EA/MTV/Harmonix have dropped the ball. Not to mention all the people just saying bollocks to Rock Band and buying GHWT instead.
Now, I will grant you that games are certainly recession resistant. While bad, the games industry seems to still be doing a lot better as a whole, especially compared to other industries (auto, travel, retail, etc.). After all, the industry itself still grew year over year. But just not at the rate many companies expected to.
In a way, this could be a very good thing. Arguably the industry has gotten pretty bloated as of late. Some consolidation, while very painful (which I can personally attest to), is needed. Heck, I think most of us as gamers (well, unless you only own a Wii) admit that there were just too many good games released last holiday season. I am fine with seeing fewer game releases, and maybe making the ones remaining even better. That would be good to see.
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For what it's worth, I empathise with your situation. But I've found that it's never as easy as just commenting on an issue. Especially with HMX's history with such things. (e.g. They promised Nevermind! They promised SRV/Jane's Addiction by the end of the year!)
I'm sure whatever the reason is, it's not a very good one (most likely from a consumer perspective) so it's better to say nothing rather than confuse the issue further. I'm fairly certain they aren't doing it out of spite or some other ill-conceived theory.
It's not practical, but can't the instruments be imported? Or is there some kind of regional lock on the peripherals?
The entertainment industry, as a whole, is largely resistant to recessions. The games industry is part of the entertainment industry. However, it is one which has a larger entry cost (console price), and individual games, while often providing longer periods of entertainment, are still more expensive than buying or renting a movie. Because of this, the gaming industry is going to be hit harder than the rest of the entertainment industry. However, simultaneous with the recession hitting, the ballooning production costs of HD gaming and the crap-shoot which is the game's success was coming to a head. The recession intensified those problems, making what was previously a pretty awful situation into a do-or-die one, resulting in the death of lots of development houses/publishers who had been operating in that manner, followed by an increasing consolidation of the market behind those who didn't. The primary benefactor of this is obviously Nintendo, but that doesn't mean they aren't hit by the recession themselves.
Pretty much.
I've said this before, but the recession is just going to hasten the evolution of the game market, not change the evolutionary direction.
Uh, no. The is at the very least recession proof. If companies can't deal with growth at almost 20% YoY without shitting their pants then that's on them, not the recession.
For fuck's sake the industry's revenue DOUBLED from 2005 to 2008 in the US. If you can't make money now you should just get the fuck out of the industry and save your investor's the heartache.
Now Japanese export driven companies are not safe from the Yen's appreciation but that is only tangentially related to the recession. And within Japan their might be something like a recession but that is mostly the Japanese refusing to buy home consoles and the PSP and DS having had such banner years previously. In any case Japanese companies are probably doing better than Western ones.
Despite the Yen Nintedo's profits for this year are going to be huge. Much bigger than any gaming company or division has made.
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I know I'm a little late on this but, really?
Around the PS3's launch, the CEO of Namco Bandai said that each HD game they develop has to sell around 500k to break even. Wii games would obviously break even at a much lower point.
I think the moneymen will hesitate plenty, but the increasing failure of easy moneymakers (big HD epics, casual-oriented shovelware) may inspire a few to try something that doesn't seem like 47,000 other games. Actually EA is giving this a shot with things like Mirror's Edge and Henry Hatsworth*, with mixed results.
Then again the history of video games is largely paved with "me-too" efforts, so my hope for that may be a pipe dream.
My other real predictions are consolidation, increased digital distribution, shorter games and more casual-friendly fare.
*I realize bringing up this game in this thread is just asking for trouble, but my frothing demand for this increased when I learned there is tea time in this game. And it works as a power-up.
After two successful tea times, you get to pilot a battle mech.
Maybe it's because I'm a warped anglophile, but that's awesome.
The big question is why.
I think you need to take your head out of the sand.
Yes, revenue may have doubled between 2005 and 2008. Too bad the recession started in 2008 and is continuing well into 2009. This is not a measure of "the past 5 years", but of the past year. There are many examples of companies making plenty of money (and not even just in the games industry) between '05 and '08, only to see sales tank over the past year. Even Nintendo in Japan saw this.
Also, once again I disagree with your attitude of "Well, Nintendo is doing gangbusters, so that just means everyone else sucks". While that may be true, that's very narrow minded. Last I checked, we're not Nintendo shareholders/investors/employees, but gamers and fans of all various platforms and companies. So I have an interest in what the business situation is like for all gaming companies. And it's clear, especially over the past few weeks, how many developers (both in West and East) are being unduly affected by the global recession going on.
- Don't add me, I'm at/near the friend limit
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I work on this: http://www.xbox.com
Did sales in the final quarter of 2008? Did I miss something? Or did you miss the DS selling 3 million units in December? 3 million fucking units.
Did the recession cause people to buy many more Wiis rather than cheaper 360s? Nintendo is eating the rest of the industry alive, furthermore 3rd parties obviously bet on the wrong horses, I don't see how the recession comes into it.
But, please explain how the global recession is affecting gaming companies. Any data for that?
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