Exclusives hurt Gamers and Developers

[Nidan]

(With this discussion we forget about the Wii, as really this is aimed at a different market. Also I apologise in advance for this ad-hoc discussion as i had a basic idea of what i wanted to say, but not the time to construct it perfectly)

Exclusive titles are bad for gamers, and we should all hope to see less of them in the future, as it gives gamers less choice and railroads us into buying one console over the other. Developers however are running the risk of losing the most by agreeing to exclusivity with their titles.

Exclusive titles in the Era of PS1 and to less effect PS2 were somewhat justified, as the hardware (N64 vs PS1) and the core demographic was quite different. With the introduction of the original Xbox, Exclusives were used to hold or maintain market share by Sony, they used proven track records and existing relationships to encourage exclusivity. Luckily for Sony, this kept the original Xbox sales low in comparison to the PS2, which justified or re-enforced to exclusive developers, that their choice was good.

This Generation ( Xbox360 vs PS3) is proving to be very different. The Xbox 360 launched a full year earlier, has very similar capabilities and is on track to match or surpass the PS3 user base size at least until 2010.  MS is in a very strong position and maybe able to match Sony’s user base up until the launch of the next console if they execute their plan perfectly.

During the last period, From the launch of the xbox360 until now, exclusives may have made some sense to the developers, it guaranteed them lower risk as either more advertisement or cash incentives were offered, which would make up for lower sales the developer would have seen if they launched on both platforms. However this is about to change, As the PS3 and Xbox360 user base head toward 20 million each, the losses that the developers would incur increase proportionally with the user base size, so the incentives that MS and Sony need to offer also need to increase and will test the depths of Sony’s and Microsoft’s pockets.

The majority of exclusives are “million sellers” and are normally guaranteed with success as they have a loyal fan base and proven franchise behind it. Consider how many more copies of MSG4 would have sold if they also launched on the Xbox360. To date MSG4 has sold 1.9 Million copies worldwide with an attach rate of 1:7.2. Assuming that they achieved the same attach rate on the Xbox360, and then they would have sold another 2.7 million copies to date.

Early on in development the developers of MSG4 had to make a choice, and at the time, going on historic data and they sales hype behind the PS3, maybe they made the correct decision. Now almost 3 years into this generation, it looks like the decision may have been the wrong one, as it looks possible that MS will sell over 50 million units this generation. Assuming the same attachment rate, this would mean that MSG4 would have lost around 6.9 million unit sales, which in gaming equates to a lot of money (which I’m assuming is more than they gained from the exclusivity).

Developers making the choice to go exclusive at this time in the generation have more sales data to make their decisions from, and it should be financially harder for MS or Sony to secure these titles, especially since both companies would be also offering incentives for “lost titles” to go multiplatform.

Developers of the more recent period have been accepting timed exclusives, which help MS or Sony sell more consoles early in this generation but are not having a large impact of the sales. The developers however risk the fact that sales on the second console may not be as great as they imagined. To counter this we are now seeing developers tweak the performance on the second console to look/perform better than the first release which leads to a few unhappy customers.

Basically, as the user base of the PS3 and XBOX360 grow and remain close to each other +/-10million users, Exclusive titles will hurt developers due to lost revenues and is hurting customers due to reduced choice, or availability of the title they want to play. Developers if making the correct choice should stay away from Exclusive titles and concentrate on making great games for us all to play, regardless of platform