Ail said: I hardly think the game you list qualify as budget games :P And your original post in this thread never mentionned budget games in a known franchises... I agree being less dependant on a particular IP is a good idea but you typically do that by trying to develop new successfull IPs and most of the time developing a new IP that will be dureable is a very significant investment, no matter what the target console is ( with marketing costs not negligible at all compared to development costs). And wether we like it or not, one way developers have used to secure IPs and ensure their success is by pouring a lot of money into their development, making sure that the investment necessary to replicate those would discourage the competition ... Why do you think there haven't been more successfull GTA, Wow, FF copies in the market ? Because they cost a fortune to make and part of that cost is there to ensure they are not copied... ( that money isn't wasted but a lot of it is spent on things that really are not core to the game but end up being a differentiator). If you could make FF for a few million bucks, the Japanese market would be flooded by FF look alike ( especially for a serie which resets at every new episode).

In relation to other Wii (or Nintendo DS) games a Final Fantasy game released on the Wii (or Nintendo DS) would be a fairly large budget production; in relation to what these games cost on the PS3 or XBox 360 a Final Fantasy game for the Wii (and in particular on the Nintendo DS) is a budget game.

Realistically speaking, you have to be conserned with market saturation because if you release too many games of any type for a particular platform the sales of one game will come (entirely) at the expense of another game; so not every developer can focus all of their resources to the Nintendo DS simply because it is the least expensive platform. At the same time, any CEO of a major publisher who is not devoting a large portion of their resources towards the Nintendo DS and Wii (and making these two platforms key components in their long term strategy) should be questioned as to whether their corporate strategy is actually in the best interest of their investors; and any CEO who moves forward with this strategy while they're losing money should be fired.

 

HappySqurriel said: Ail said: I hardly think the game you list qualify as budget games :P And your original post in this thread never mentionned budget games in a known franchises... I agree being less dependant on a particular IP is a good idea but you typically do that by trying to develop new successfull IPs and most of the time developing a new IP that will be dureable is a very significant investment, no matter what the target console is ( with marketing costs not negligible at all compared to development costs). And wether we like it or not, one way developers have used to secure IPs and ensure their success is by pouring a lot of money into their development, making sure that the investment necessary to replicate those would discourage the competition ... Why do you think there haven't been more successfull GTA, Wow, FF copies in the market ? Because they cost a fortune to make and part of that cost is there to ensure they are not copied... ( that money isn't wasted but a lot of it is spent on things that really are not core to the game but end up being a differentiator). If you could make FF for a few million bucks, the Japanese market would be flooded by FF look alike ( especially for a serie which resets at every new episode). In relation to other Wii (or Nintendo DS) games a Final Fantasy game released on the Wii (or Nintendo DS) would be a fairly large budget production; in relation to what these games cost on the PS3 or XBox 360 a Final Fantasy game for the Wii (and in particular on the Nintendo DS) is a budget game. Realistically speaking, you have to be conserned with market saturation because if you release too many games of any type for a particular platform the sales of one game will come (entirely) at the expense of another game; so not every developer can focus all of their resources to the Nintendo DS simply because it is the least expensive platform. At the same time, any CEO of a major publisher who is not devoting a large portion of their resources towards the Nintendo DS and Wii (and making these two platforms key components in their long term strategy) should be questioned as to whether their corporate strategy is actually in the best interest of their investors; and any CEO who moves forward with this strategy while they're losing money should be fired.

I don't disagree that publishers shoudn't ignore the Wii.

But for the reasons I stated above I woudn't make it the corner stone of the company future except if the Wii development includes some attempts in rolling out new high budget IPs...

 

DMeisterJ said: Since we're turning this into a 'profits' argument; Wouldn't it make more sense for EA (or any company for that matter) to make a casual game, rather than a hardcore game for the Wii? I mean if Game Party, Carnival games, or Mario and Sonic are any indication, a game doesn't have to be quality to sell on the Wii. Why not make a game that costs a lot less than a "hardcore" game, and sell millions of units? I mean, if a hardcore game and a casual game sell the same amount of units, the Casual game would still be more profitable, as it would obviously cost less to make. Also, the thread title is sensationalizing. He didn't say "We should have bet on the Wii", nor was it implied. I know you didn't quote him, but by putting the colon after "EA CEO", you make it look like he said those exact words. But he does say that "there's a second and third place that is meaningful, against which we can build a profitable business. That's a good and positive thing.” And "that, for the first time in history, the second and third placed consoles were still ‘meaningful’." So basically, he's saying that they did put too much stock into the HD consoles, but they are still able to generate profits for them (As we can see in their fiscal reports), and obviously, they won't be stopping support for these two gaming consoles.

 

This is untrue. There are only a few very popular casual games. For every Carnival Games there are 10 games that bomb like hell. The casual audiance is unpredictable, something you don't really want to bet on as a company. They will produce some of those each year, but EA is already doing that, so they wouldn't have to appologize if this is what they meant.
He clearly means "hardcore" games, since that's what EA hasn't delivered on Wii so far.

And of course there is a market for the HD consoles, it is still over 50% marketshare. But profitwise it will make more and more sense to bring big titles to Wii.

And don't forget if EA says this now, it will definitely cause a snowball effect in the publisher community, cause every shareholder of a loss making publisher will want to hear the same story now.

 

Ail said: HappySqurriel said: Ail said: HappySqurriel said: On a side note, my questions weren't there to imply "HD console's can not be profitable" but were serious questions that someone should ask the CEO of a major corporation ... The fact is he is legally obligated to maximize the profits of his company and that means (regardless of whether you like it or not) if it would be more profitable for EA to make 4 small games for the Wii than to produce Madden for the HD Consoles he is supposed to make the 4 small Wii games. There is a certain ammount of freedom he is given to focus on long term profits over shorter term profits, but he should be able to explain his motivations in an intelligent manner.   While small profitable games are good for revenue and profit and the short term bottom line they are not what impact significantly the stock price of a company. Successfull franchises with successfull iterations ( ie IP) is what make or break a company stock price. For how much did the success of Carnival games count into the EA offer to purchase Take Two ? very little I would expect... The issue with profitable/small costs games that don't develop into huge franchises is that every year you have to repeat the success story. Whereas future revenue is easier to predict with huge successfull franchises and this is what stockholders are looking for............. You need a mix of both to successfully run a game development company ( unless you are Blizzard) but in the end the sucessfull IP is what will most affect how the company is valued..     You're making an amazingly foolish assumption that a smaller game can not be a full fledged game in a major franchise ... Dragon Quest IX and Grand Theft Auto: Chinatown Wars will both be a tiny fraction of the cost (probably 5% to 10%) of what a similar game would cost to develop on the HD consoles and yet they will have a massive impact on the value of a company. Carnivale Games doesn't factor that heavily into Take-Two's stock value at the moment because it hasn't sold that much on the grand scale of things and people are uncertain whether their success is repeatable; if Carnivale Games Minigolf exceeds the sales of Carnivale Games this IP will become far more valueable to their portfolio. The other foolish assumption you're making is that you believe that known franchises are much more predictable revenue and profit streams than (current) unknown franchises. This industry has seen countless franchises rise to amazing heights only to fall to mediocre lows; consider Sonic the Hedgehog, Tomb Raider, Tony Hawk and several of previous generations' biggest selling games. Grand Theft Auto 4 and Bioshock are only one mistake away from being dramatically less popular games than they currently are; the mistake doesn't even have to be a bad or average game, several series saw massive reductions in popularity based on a bad movie.   I never said known franchises coudn't fail. But known franchises are typically more predictable in generating steady future revenue that unknown IP ( check the list of bestselling games all time, franchises massively dominate it). Especially franchises that have yet to deliver a weak showing... If there was no uncertaintity at all there woudn't be a stock market at all because we would know in advance exactly how much each company would do as future revenue...   A company valuation is based on what is known. Typically a steady franchise that has been doing well so far will have more impact on said valuation that an unknown never heard of future new IP...

In the case of a pending acquistion or hostile bid, a few new rules apply.

Any game sales that brings in CASH/Pending Payments is valuable during a hostile bid.  Since an increase in $1 Million in cash, means the buyer must increase their bid by an equivalent $1 Million.  If not, then there is a higher chance of not getting the company.

In the case of EA vs Take 2.  Prior to the release of GTA IV, Take 2 had about ~$110 Million in Cash & Accounts Receivables.  After the release of GTA IV, Take 2's position improved more than 4x to ~$430 Million.  That extra ~$300 Million is not reflected in EA's price (regardless of how many times they like to say it was already factored in).  Long term debt did not grow and actually shrink, and so did short term debt. 

Essentially what is happening here is that EA will be getting around $300 Million for free due to the great performance of GTA IV.

Carnival Games and other unknown games would not have an impact on the Stock Price, but since it continues to sell and help improve the bank account of Take 2.  As such, the price of the acquistion should at minimum increase to follow the size of Take 2's bank account.

 

Malachi said: FishyJoe said: At least they admit it now. I don't know how forgiving their shareholders are going to be though. http://www.mcvuk.com/news/31365/We-should-have-bet-on-Wii-admits-Riccitiello We should have bet on Wii, admits Riccitiello Tim Ingham Today, 3:22pm Electronic Arts CEO John Riccitiello has admitted that the company put too much focus on PS3 and 360 at the beginning of the current console cycle – and largely ignored the potential of Wii. However, Speaking to the San Jose Mercury News, Riccitiello said that his company had since become established on Nintendo consoles – and that, for the first time in history, the second and third placed consoles were still ‘meaningful’. He said: “One thing that's different is we typically figured out who the market leader was going to be before the start of the cycle and bet with our development resources on that platform. “We made the wrong call there [by betting on the PlayStation 3 and Xbox 360], which made this transition harder than it would otherwise be. But now we're catching up, and I think we're fine. We've got some incredibly innovative Wii titles, [and] incredibly innovative DS titles coming. And so I think that issue's sort of behind us.” He added: “[What’s] unusual in this cycle is there's a second and third place that is meaningful, against which we can build a profitable business. That's a good and positive thing.” Riccitiello also said he was hopeful of pushing EA’s market share on DS and Wii up to match its dominance on PS3 and 360. He commented: “Can I make a big step in that direction this year? Yes. Can I continue to make steps in that pattern? Yes. Does Nintendo want us to do it? Yes. Does the platform set itself up for that to be possible? Yes. So, it requires focus.”   The corporate equivalent of falling down kneeling and begging so as to keep his job. Classic

He came in later.  He is saying "we" as a company, not because he made the decision.  That person is already gone.

 

Ah ok, don't really follow who run which company, thank for the clarification. I though he was trying to avoid blame with the "we" thing and then saying he could do better.

Kyros said: Not like IW would have much say in the matter, as Activision would be the one influencing the platforms. Yeah sure. Do you know how the discussion between a publisher and a developer who made them a 9m game goes? Activision: Hey IW could you target a platform you didn't intend to develop for? Infinity Ward: We don't think so, we want to create a game that is as realistic as possible and we do not have resources for a port. Activision: We are ordering you to do the port. Infinity Ward: Do you remember how much CoD4 made you? I hear Vivendi and EA would like to publish our games. Activision: Never mind.

Kyros, you have little grasp on the industry and how it works, by reading that response of yours. Do you know WHY COD switches back and forth from IW to Treyarch? Because Activision OWNS the IP for COD. IW just gets the privledge to develop for the series. So Activision says "Hey, make COD 6 for the Wii as well" And IW gets to say "sure" and get lots of money, or says "no" and lays off 80% of their staff who get sucked into Activision or EA's internal studios and IW disappears forever. Developers do not make much money post-release. All of the money comes up front for development, their royalties are so low, even on a big hit like COD4, that they cannot afford to lose grace with their publisher.

Tha'ts how this industry works, and that's how development studios survive or die. The only devs that aren't slaves to this formula are indie devs, as they carry the budget for the game themselves, and don't rely on publishers at all.

So, as much as you hate to see it, unless COD5 for Wii flops horribly, COD6 will be on the Wii also.

 

 

ssj12 said: HappySqurriel said: slimeattack said:   Yes, because owners of HD consoles buy more games and the games are more expensive, giving larger profits.   I see this constantly stated, but when you account for the number of months of console ownership the difference in software sales is pretty minor across all consoles. On top of this the $10 extra for a HD game doesn't go (entirely) to the publisher, a large portion of this reflects higher licencing fees which are taken to recover the money from selling HD consoles at a loss.   Sony dropped that by like 40% last GDC if I remember right.

That was for the developer kit.  Not the actual liscensing fees as i recall.

 

HappySqurriel said: ssj12 said: HappySqurriel said: If I was investing in EA the questions I would like to ask is: How can you say that this is the only generation where the second and third place consoles are still meaningful? When you account for the difference in development costs there is currently (and probably always will be) far more risk involved in producing a HD game than there was to produce a Gamecube/XBox game or a N64 game. How long can the HD consoles remain meaningful for? There is a significant risk (for the HD consoles) that the Wii will reach a tipping point (caused by increased third party support) where the Wii can pass 50% or 60% of total market share. Hypothetically speaking, can you really justify spending 2 to 4 times as much to develop a HD game if there is 1.5 (or more) Wii systems on the market for every HD console on the market?   dev costs are lowering and development times are going to shrink. Once engines are made there is only upgrades needed for future titles. An engine can take years to make but once your in the upgrade part it can take a month to upgrade and half the programmers. Resistance 1 was in development for a bit over 2 years now Insomniac has produced Resistance 2 in about 2 and Ratchet a year. They are going to have the PSN Ratchet out in the summer less then a year after R&CF was released with improved graphics and gameplay. Using Insomniac as an example there is zero reason for why any developer would turn away from either HD console. Developers who have to make a new engine for each game are the ones who suffer but the ones who just upgrade the engine, like Epic Games, see cheaper development costs and quicker development time or more time to focus on the game being made. In the end there is the pay off. HD console games cost $10 then the Wii's due to the development costs being more but in the end after making back development costs profit flows in faster and in larger amounts. In the Playstation/N64 generation there was an interesting thing which occured that people were not expecting ... The number of people needed to generate content exceeded (by quite a large margin) the number of people involved in producing software for the first time ever. Durring the PS2/XBox/Gamecube generation even when you included the scripters into the people who were involved in producing software, the number of Artists and Level Designers easily outnumbered those involved in software 3 to 1. With most game engines being licenced, and the number and complexity of scripts needed for a game not dramatically growing (in part because of physics engines) the majority of growth in expense of HD games has been the cost to produce high quality 3D assets; when you're talking about a signle character model taking 3 to 4 people a month to 6 weeks to complete the ammount of money saved from having an existing engine is tiny and unnoticeable.

well other quicker tech is being used for characters now versus hand animation. Mo-Cap is cutting development time by months. Wait the Qore video for R2 on them using mo-cap. They straight up say that it saves them a ton of time. Oh wait. you dont have Qore do you? =P Qore is very good at having a ton of interesting interviews/videos on things.

 

NJ5 said: PS3 and 360 fanboys should stop fighting each other and recognize that their consoles would be almost dead without each other.

QFT. Sony fans may be unhappy about former exclusives going to 360 but given the PS3's first year, if the 360 had failed in the marketplace and did not represent an additional sizeable market for these games to sell there would have been a lot more cancellations last year as publishers would have panicked and scambled to go to Wii and thus far less games this year (though the biggest would still be here as they would then be the equivalent of Mario 64 or OOT, a drop of rain in the desert). Those thinking that the 360 will be dead in 2010 should realise that if that is the case then so will the Ps3 as it will havea similar userbase to it by then, big enough for both of them to survive together but too small for either to survive in the harsher environment of late gen (with more great used games for new titles to contend with and slowing momentum for any console that is not #1).