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Forums - Gaming - Is shrinking market size all that bad?

 

What do you think?

Yes. The Market needs to Shrink 27 32.93%
 
No, The Market needs to Grow 39 47.56%
 
results 16 19.51%
 
Total:82
Dr.Henry_Killinger on 14 July 2014
Puppyroach said:
We can also look at it this way:

Imagine Gen 7 ending in 2015 at a totaL of 280 million, up from 200 million in Gen 6. That is an average growth of 4% per year over Gen 6 (not entirely accurate since generations cross each other somewhat, but it gives a hint). That isn´t a huge growth, but actually quite reasonable.

If the market would start to experience contraction, money will start to pour out of the industry causing more studios to stop making games for the traditional consoles. This will also start a downward spiral in the general publics view of the industry, causing even bigger declines in sales.

I Think an average growth of 2% per year over previous generations should be acceptable enough to maintain a steady industry.

This isn't entirely true or very realistic. Money poured into the industry because these companies started making more money, because of more consumers. To suggest that money would just leave with less consumers is overly simplistic. Enticing a smaller market to spend more money would easily palliate its effect if not make more money overall. 

Not to mention these companies aren't just going to die, they are going to refocus, either attempting to draw in more consumers, or drawing more money from consumers.

Sure this could mean more money grabbing, but this could also mean greater quality.



In this day and age, with the Internet, ignorance is a choice! And they're still choosing Ignorance! - Dr. Filthy Frank

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BeElite on 14 July 2014
fatslob-:O said:
Yes a shrinking market is bad no matter how anyone spins it ... Having less customers isn't exactly a good thing.

Thing is most sales are to a small number of the market.  the whales.  

Its why halo can sale 8 million on 20m consoles and sale 10 on 80m.  

 



fatslob-:O on 14 July 2014
BeElite said:
fatslob-:O said:
Yes a shrinking market is bad no matter how anyone spins it ... Having less customers isn't exactly a good thing.

Thing is most sales are to a small number of the market.  the whales.  

Its why halo can sale 8 million on 20m consoles and sale 10 on 80m.  

 

But still having less revenue means less money which means it will be harder to be profitable.



BeElite on 14 July 2014
fatslob-:O said:
BeElite said:
fatslob-:O said:
Yes a shrinking market is bad no matter how anyone spins it ... Having less customers isn't exactly a good thing.

Thing is most sales are to a small number of the market.  the whales.  

Its why halo can sale 8 million on 20m consoles and sale 10 on 80m.  

 

But still having less revenue means less money which means it will be harder to be profitable.


No, smaller user base does not mean that.  it would have to shrink considerably and quickly to do that.  



Puppyroach on 14 July 2014
Dr.Henry_Killinger said:
 

This isn't entirely true or very realistic. Money poured into the industry because these companies started making more money, because of more consumers. To suggest that money would just leave with less consumers is overly simplistic. Enticing a smaller market to spend more money would easily palliate its effect if not make more money overall. 

Not to mention these companies aren't just going to die, they are going to refocus, either attempting to draw in more consumers, or drawing more money from consumers.

Sure this could mean more money grabbing, but this could also mean greater quality.

Well, a contraction in the market does mean lesser revenue overall, even though it isn´t a linear correlation. It will mean some games doesn´t generate as much revenue and I am afraid it will be indie developers that suffer most.

And you are right, some developers will refocus. We have already seen it with the likes of Sega and Square Enix, moving more towards the mobile market. MS does it aswell, but they have always existed in most gaming segments. But we also saw it with Sony a few years ago. So it is already happening, only not in a massive way.



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Dr.Henry_Killinger on 14 July 2014
Puppyroach said:

Well, a contraction in the market does mean lesser revenue overall, even though it isn´t a linear correlation. It will mean some games doesn´t generate as much revenue and I am afraid it will be indie developers that suffer most.

And you are right, some developers will refocus. We have already seen it with the likes of Sega and Square Enix, moving more towards the mobile market. MS does it aswell, but they have always existed in most gaming segments. But we also saw it with Sony a few years ago. So it is already happening, only not in a massive way.

Actually, I think Indies would lose out the least cause they typically need the lowest amount of consumers to be succesful, niche markets scale above proportion.

Even BeElite posted an example of Halo selling 8 mill on a 20 mil install base vs 10 mil on an 80 mill install base. Halo is far from an indie, but even then if the market was propotional the next Halo iteration would've sold 32 mill on the 360. A 400% increase in market only resulted in a 25% increase in sales. At best a 25% increase in profits and at worse a decrease cause the game would cost more. Software Revenue decreasing with an Increasing Marketshare.



In this day and age, with the Internet, ignorance is a choice! And they're still choosing Ignorance! - Dr. Filthy Frank

JEMC on 14 July 2014
Dr.Henry_Killinger said:
JEMC said:

With a smaller market, what will happen is that either publishers invest less in the games, opting for either less games but as big as they are now (AAAs) or as many games but with smaller budgets (so worse graphics and/or smaller worlds, maybe even shorter). Whatever the choice they make, we lose.

You're just imagining the worst cases.

Lets say, for sake of example, we went from 260mill last gen to 200 mill this gen with PS4 80-100, XB1 50-70, and Wii U 30-50.

Last Gen: 260 million

PosGamePlatformYearGenrePublisherNorth AmericaEuropeJapanRest of WorldGlobal
1 Call of Duty: Modern Warfare 3 X360 2011 Shooter Activision 8.73 4.12 0.13 1.28 14.25
4 Call of Duty: Modern Warfare 3 PS3 2011 Shooter Activision 5.38 5.52 0.49 1.49 12.88
25 Call of Duty: Modern Warfare 3 PC 2011 Shooter Activision 0.38 0.93 0.00 0.32 1.63
39 Call of Duty: Modern Warfare 3 Wii 2011 Shooter Activision 0.48 0.18 0.00 0.07 0.73

 (despite most marketshare)

29.49 million LTD an attach rate of about 11%

On a smaller market of 200, COD has less consumers to tailer for and can make the game itself better.

For a market of 200 million, all it would need was a 22% attach rate to meet the sales of a market 30% bigger than it.

Sorry but... what?!

So acordingto you, Call of Duty, a series that has peaked in terms of sales and popularity this gen (some may even call it the franchise of the gen in terms of sales and popularity) and has "only" been able to reach a 11% rate, and yet just because the market will be smaller it will be able to get twice the attach rate because ...?

Let me put it this way. If there are less consumers but the same number of games, what will happen is either that there will be more flops, or that the sales will split more evently across all the titles causing all of them to fail their sales targets. Unless you are suggesting that games will still sell the same amount?

Oh, and the number of games that reach an attach ratio close to 15% is really, really low. Thinking that just because there are less consoles the attach ratio will increase is simply short sighted. Take for example Mario Kart Wii: on a 101 million install base the game sold 32.54 or an attach rate of 34%, yet Mario Kart 64 sold 9.87 mil units on a 32.93 mil install base, so a 30% attach rate. And that is one of the biggest franchises of this industry.

As many here have already said, a bigger market give the games a better chance of selling.



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Dr.Henry_Killinger on 14 July 2014
JEMC said:
Dr.Henry_Killinger said:
JEMC said:

With a smaller market, what will happen is that either publishers invest less in the games, opting for either less games but as big as they are now (AAAs) or as many games but with smaller budgets (so worse graphics and/or smaller worlds, maybe even shorter). Whatever the choice they make, we lose.

You're just imagining the worst cases.

Lets say, for sake of example, we went from 260mill last gen to 200 mill this gen with PS4 80-100, XB1 50-70, and Wii U 30-50.

Last Gen: 260 million

PosGamePlatformYearGenrePublisherNorth AmericaEuropeJapanRest of WorldGlobal
1 Call of Duty: Modern Warfare 3 X360 2011 Shooter Activision 8.73 4.12 0.13 1.28 14.25
4 Call of Duty: Modern Warfare 3 PS3 2011 Shooter Activision 5.38 5.52 0.49 1.49 12.88
25 Call of Duty: Modern Warfare 3 PC 2011 Shooter Activision 0.38 0.93 0.00 0.32 1.63
39 Call of Duty: Modern Warfare 3 Wii 2011 Shooter Activision 0.48 0.18 0.00 0.07 0.73

 (despite most marketshare)

29.49 million LTD an attach rate of about 11%

On a smaller market of 200, COD has less consumers to tailer for and can make the game itself better.

For a market of 200 million, all it would need was a 22% attach rate to meet the sales of a market 30% bigger than it.

Sorry but... what?!

So acordingto you, Call of Duty, a series that has peaked in terms of sales and popularity this gen (some may even call it the franchise of the gen in terms of sales and popularity) and has "only" been able to reach a 11% rate, and yet just because the market will be smaller it will be able to get twice the attach rate because ...?

Let me put it this way. If there are less consumers but the same number of games, what will happen is either that there will be more flops, or that the sales will split more evently across all the titles causing all of them to fail their sales targets. Unless you are suggesting that games will still sell the same amount?

Oh, and the number of games that reach an attach ratio close to 15% is really, really low. Thinking that just because there are less consoles the attach ratio will increase is simply short sighted. Take for example Mario Kart Wii: on a 101 million install base the game sold 32.54 or an attach rate of 34%, yet Mario Kart 64 sold 9.87 mil units on a 32.93 mil install base, so a 30% attach rate. And that is one of the biggest franchises of this industry.

As many here have already said, a bigger market give the games a better chance of selling.

And what I'm saying is a smaller market is more focus, more diversity, and better quality, even if it makes less money. Which it necessarily wont.

Maybe they need to be making less money, they aren't necessarily using all the money they make to make games better.



In this day and age, with the Internet, ignorance is a choice! And they're still choosing Ignorance! - Dr. Filthy Frank

sundin13 on 14 July 2014
Dr.Henry_Killinger said:

And what I'm saying is a smaller market is more focus, more diversity, and better quality, even if it makes less money. Which it necessarily wont.

Maybe they need to be making less money, they aren't necessarily using all the money they make to make games better.


You still haven't really argued that point very strongly though. There is no reason to assume game quality will increase with a smaller market, or that there will be more diversity. You really need to back up that point better, because all logic refutes that...



Zkuq on 14 July 2014

As far as I'm concerned, I'd love to see the market get smaller again. Not too small, though, as then it wouldn't be viable at all. But I'd love to see mega-budget games go away because they tend to be focused around ideas that are unfriendly to customers. Dumbing down, DLC, and milking are probably the biggest ones.