Thanks, I will try in the future. I just finished an intese session of Rendering Ranger and Super Turrican ( what a blast )

@Stever89

Yeah that part interested me too ( so  I have download the image ). 

The problem when someone cite the revenue growth of VG Industry is that a part of that growth is due to software price increase and high hardware price tag, the other part is related to Nintendo platform that share a different vision from the old status quo. Many big publishersare having losses.

Data collected by Opiate ( NeoGaf ) April 2007 - March 2008

Sony Gaming Segment FY07:
12,842; ~12.8 Billion Revenue.
(1,245); ~1.25 Billion Loss.

Nintendo FY08:
15,987; ~16 Billion Revenue.
2,460; ~2.46 Billion Profit

Microsoft FY 07 Q4 - FY08 Q3, ED Division:
7,724; ~7.72 Revenue.
(585); ~585 Million Loss.

Electronic Arts FY08:
3,665; ~3.67 Billion Revenue.
(487); ~487 Million Loss.

Activision FY08:
2,900; ~2.9 Billion Revenue.
344.9; ~345 Million Profit.

Capcom FY 08
804; ~804 Million Revenue.
78; ~78 Million Profit.

Konami FY08:
2,842; ~2.84 Billion Revenue.
176.2; ~176 Million Profit.

Square Enix FY08:
1,446; ~1.4 Billion Revenue.
90; ~90 Profit.

SCi/Eidos FY07:
279; ~279 Million Revenue.
(59.9); ~60 Million Loss.

Midway FY07:
157,195; ~157 Million Revenue.
(100); ~100 Million Dollar Loss.

SegaSammy Consumer Business Division FY08:
1,363; ~1.4 Billion Revenue.
(58); ~58 Million Loss.

Take 2 Interactive: FY07 Q2 - FY08 Q1:
929,613; ~930 Million Revenue.
(169,340); ~169 Million Loss.

NamcoBandai Game Segments Division FY08:
1,392; ~1.4 Billion Revenue.
141; ~141 Million Profit.

THQ FY08:
1,030; ~1 Billion Revenue.
(35); ~35 Million Loss.

InfoGrames, FY07*:
473; ~473481 Million Revenue.
(159.8); ~160 Million Loss.

Ubisoft FY08:
1,460; ~1.46 Billion Revenue.
172.45; ~172 Million Profit.

Koei FY08:
285.29; ~285 Million Revenue
51.96; ~ 52 Million Profit

*These reports are not up to the date of 3/31/08 because the companies in question have not released full financial figures as of this date.

Link with source:

http://www.neogaf.com/forum/showpost.php?p=11197958&postcount=1

@Bored4Life

Why it causes market segmentation ?

I think the problem of that platform would be the combo Virtual Console + Wiiware. 

I found the VG industry revenue in North America from 1997 to 2007 (NPD):

From 2002 to 2005 sales in US were stagnating while japanese market were declining. No wonder Iwata want a change.

Thanks for those third-party financial numbers, celine.  There's a really important trend here that needs to be pointed out. Leaving aside Nintendo, Sony, and Microsoft, let's look at who's making and who's losing money right now:

Profiting

Activision FY08:
2,900; ~2.9 Billion Revenue.
344.9; ~345 Million Profit.

Konami FY08:
2,842; ~2.84 Billion Revenue.
176.2; ~176 Million Profit.

Ubisoft FY08:
1,460; ~1.46 Billion Revenue.
172.45; ~172 Million Profit.

NamcoBandai Game Segments Division FY08:
1,392; ~1.4 Billion Revenue.
141; ~141 Million Profit.

Square Enix FY08:
1,446; ~1.4 Billion Revenue.
90; ~90 Profit.

Capcom FY 08
804; ~804 Million Revenue.
78; ~78 Million Profit.

Koei FY08:
285.29; ~285 Million Revenue
51.96; ~ 52 Million Profit

Losing

Electronic Arts FY08:
3,665; ~3.67 Billion Revenue.
(487); ~487 Million Loss.

SegaSammy Consumer Business Division FY08:
1,363; ~1.4 Billion Revenue.
(58); ~58 Million Loss.

THQ FY08:
1,030; ~1 Billion Revenue.
(35); ~35 Million Loss.

Take 2 Interactive: FY07 Q2 - FY08 Q1:
929,613; ~930 Million Revenue.
(169,340); ~169 Million Loss.

InfoGrames, FY07*:
473; ~473 Million Revenue.
(159.8); ~160 Million Loss.

SCi/Eidos FY07:
279; ~279 Million Revenue.
(59.9); ~60 Million Loss.

Midway FY07:
157,195; ~157 Million Revenue.
(100); ~100 Million Dollar Loss.

Do you see the trend there? It's a biggee, so let's reorder in terms of overall revenue to make it clearer, and add some color for profit/loss:

Total Revenue

1) Electronic Arts FY08: ~3.67 Billion Revenue. ~487 Million Loss.
2) Activision FY08: ~2.9 Billion Revenue. ~345 Million Profit.
3) Konami FY08: ~2.84 Billion Revenue. ~176 Million Profit.
4) Ubisoft FY08: ~1.46 Billion Revenue. ~172 Million Profit.
5) NamcoBandai Game Segments Division FY08: ~1.4 Billion Revenue. ~141 Million Profit.
6) Square Enix FY08: ~1.4 Billion Revenue. ~90 Million Profit.
7) SegaSammy Consumer Business Division FY08: ~1.4 Billion Revenue. ~58 Million Loss.
8) THQ FY08: ~1 Billion Revenue. ~35 Million Loss.
9) Take 2 Interactive: FY07 Q2 - FY08 Q1: ~930 Million Revenue. ~169 Million Loss.
10) Capcom FY 08 ~804 Million Revenue. ~78 Million Profit.
11) InfoGrames, FY07*: ~473 Million Revenue. ~160 Million Loss.
12) Koei FY08: ~285 Million Revenue ~ 52 Million Profit
13) SCi/Eidos FY07: ~279 Million Revenue. ~60 Million Loss.
14) Midway FY07: ~157 Million Revenue. ~100 Million Dollar Loss.

Notice a pattern there? With the noticeable exception of EA, the most profitable companies are also the largest companies. Aside from Capcom and Koei, all of the smallest companies are struggling mightily. The rich are getting richer and the poor are getting poorer. This is the very definition of market consolidation at work. Only the biggest, baddest publishing studios can afford the huge development budgets associated with the PS3 and 360. The smaller and even mid-tier publishers are being swallowed up before our eyes.

I don't think this is particularly good or healthy for the gaming industry...

hehe I did read them this morning and they are a worth reading. I love his articles a lot even if he dramatizes a bit.

 What? Just because of a sentence like this?

"For if you will just grant me for a moment (what I shall very soon try to demonstrate) that the blue ocean, when it becomes widespread, becomes disruption, just as a little carp becomes a big carp, provided that Nature lets it live, I shall show you how true it is that a champion of downmarket, new generation gaming should pose as the re-shaper of upmarket, next generation gaming; but what is still more extraordinary and still more reassuring is that powerful corporate strategies that were formed to disseminate the competitor companies’ non-gaming goals as establishing Blu-ray, controlling online content, and sell high definition television sets (in so far as this is deemed as jumping in front of the trend by particular investors) should today devote half of its resources to this cause only to watch it fly away as little Wii pulls the rug from underneath the Xbox 360 and Play Station 3 to towering collapse."

 Yep. Only one period in all that. I think I figured out what he was trying to say by the end, but my brain cramped up a couple times in the five minutes I spent re-reading sections, trying to figure out WTF he was talking about.

 Good thing he's worth the effort to understand. At least he makes more sense than Jurgen Habermas.

EA lost money because they bought Bioware and maybe an other studio that I forgot.

How has Konami made so much money? DDR in arcades? What about SE? They haven't released anything big in the last year.

If anyone could explain it to me, I would be glad.

 Yeah sorry was in a hurry and I couldn't figure out how to insert a link!

Unlike the other peripherals, the Balance Board does not require the Wii-mote in order for it to be functional. Still, the creation of the Balance Board and Wii Fit shows off Nintendo’s asymmetric sword better than anything. Microsoft and Sony lack the skill to invent this.

That's quite a flamboyant and unexpected statement, though I wholeheartedly agree with it. 

I found this part especially interesting:

”In building new games for the EA Casual Entertainment label, Aarons adds, the priority is to focus on making sure the appeal is there amongst specific audiences - a stark difference from the broader marketing campaigns you might find implemented by the likes of sister label EA Games when it comes to the likes of FIFA or Need For Speed.

"Previously when EA has done early launches into casual games we've said 'oh, these games are for everyone'," she says. "But for something like Boom Blox we're clear that the primary target market is eight to 12 years old, and we're not even really approaching the gamer press.”

-Michael French, casualgaming.biz “EA’s Russel Arons on the Casual Entertainment revolution”

Well, marketing to twelve year olds explains ‘Boom Blox’ sales. The Nintendo approach is to say the games are ‘for everyone’ and do their best not to appeal to a specific audience. EA Casual Games is going the opposite way.

I’ll tell you why it won’t work, and why ‘casual games’, which is just another excuse for dumb marketers to pander to specific demographics, is a house of cards ready to fall down.


Parable of the Milkshakes

”People don't want to buy a quarter-inch drill. They want a quarter-inch hole!"

-Theodore Levitt, Economist Legend of the Harvard Business School, coined the Term 'Globalization'

People do not buy products; rather, they hire them to perform a job in a functional, social or emotional dimension. Our lives face obstacles in and of themselves so by spending our hard won money we ‘hire’ these products to perform these jobs for us and make our lives more enjoyable.

”In other words, the job, not the customer, is the fundamental unit of analysis for a marketer who hopes to develop products that customers will buy.”

-Clayton Christensen, “What Customers Want From Your Products”

The key to market analysis is to study the consumers’ behavior, not the consumers themselves. The source (or should I call it hellacious pit?) that generates these birdmen, cocky with the belief that the wind is at their backs, is the context that customers and not the new jobs are what consists of the ‘New’ Market. With the current video game disruptions (first is from online flash gaming and the second is from Nintendo) creating new gamers, the old industry stares at the New Market and literally sees the literal. “Oh, Grandmas.” “Oh, housewives.” “Oh, busy people,” which they sum up as “I get it! Casual gamers!” The ‘casual games’ mantra is generated solely from marketers’ studying the consumers and noting they are ‘casual’; the tail is waging the dog.

The part in red is a quote I hadn't seen before and quite frankly is frighteningly stupid on Aron's part. A game with such obvious universal appeal marketed to small segment of the population simply because a couple of people were too short-sighted to see its true potential is disheartening. Its sad to think that people will miss out on a great game like that because of the ignorance of a handful of people.

Malstrom does a fantastic job of explaining how they arrive at their reasoning as well as why the reasoning is thoroughly flawed...even if it wasn't as obvious for some folks.

Ok, so that was awesome. I have never read any piece of gaming-related writing that has been better built up or argued. Took me hours and hours though, the Sword piece was especially long. He really nails it in most sections, and the use of quotes from persons in the industry showing his points always fit surprisingly well.

Now I just have to bookmark that page and read through the rest of his texts.

@Grampy: Haha, I read your 'oldes one here' thread, and Immediatly thought of you when I read that section :D I was also thinking about myself. Once upon a time I  was playing games for hours every day. Nowadays, other interests compete for my attention. Sitting down and playing through a 20h game is no longer something that feels... worthwhile. I have however been saved by games like 'Guitar Hero' and 'Wii Sports'. Games that doesn't really require any time-investment, and that makes gaming social. Playing with friends is always better than playing alone.