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NJ5 on 01 February 2009

Thanks celine. This part is almost scary to read considering the time it was written at:

The answer has to do with a concept called "market share". The basic strategy is to "buy market share". That is, you spend a lot of money to make a product that will sell very well. You still lose money on the product, but the huge sales you make put you in an excellent position to make money with a followup product.



The concept is sound and has been proven to work in many markets with different products. Unfortunately, there's an unintended side effect of such products in our industry: they raise the expectations of the consumers to levels that simply cannot be sustained. Once a customer has been dazzled by a money-losing yet fabulous product, he'll turn up his nose at a normal product delivered on a normal budget. And this is precisely what is happening to our customers. Nowadays, if you don't spend a half-million-plus on your product, it won't sell.

 



My Mario Kart Wii friend code: 2707-1866-0957

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celine on 01 February 2009

This is a read for Shio:
http://www.erasmatazz.com/library/JCGD_Volume_5/Computer_Games_Versus.html



 “In the entertainment business, there are only heaven and hell, and nothing in between and as soon as our customers bore of our products, we will crash.”  Hiroshi Yamauchi

TAG:  Like a Yamauchi pimp slap delivered by Il Maelstrom; serving it up with style.

Pristine20 on 01 February 2009
NJ5 said:

Thanks celine. This part is almost scary to read considering the time it was written at:

The answer has to do with a concept called "market share". The basic strategy is to "buy market share". That is, you spend a lot of money to make a product that will sell very well. You still lose money on the product, but the huge sales you make put you in an excellent position to make money with a followup product.



The concept is sound and has been proven to work in many markets with different products. Unfortunately, there's an unintended side effect of such products in our industry: they raise the expectations of the consumers to levels that simply cannot be sustained. Once a customer has been dazzled by a money-losing yet fabulous product, he'll turn up his nose at a normal product delivered on a normal budget. And this is precisely what is happening to our customers. Nowadays, if you don't spend a half-million-plus on your product, it won't sell.

 

It is scary but a side-effect of competition nonetheless. We'll probably end up in a situation like the OS market where there are only 2 head honchos and everyone else has been bought out.

 



"Dr. Tenma, according to you, lives are equal. That's why I live today. But you must have realised it by now...the only thing people are equal in is death"---Johann Liebert (MONSTER)

"WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives"---Maj. Gen. Smedley Butler

celine on 01 February 2009

@NJ5
I've bolded the interesting parts.



 “In the entertainment business, there are only heaven and hell, and nothing in between and as soon as our customers bore of our products, we will crash.”  Hiroshi Yamauchi

TAG:  Like a Yamauchi pimp slap delivered by Il Maelstrom; serving it up with style.

NJ5 on 01 February 2009
Pristine20 said:

It is scary but a side-effect of competition nonetheless. We'll probably end up in a situation like the OS market where there are only 2 head honchos and everyone else has been bought out.

 

Yeah, look at wikipedia's list of video game publishers:

http://en.wikipedia.org/wiki/List_of_video_game_publishers

There's a great amount of lines saying "acquired", "merged" or "defunct".

 



My Mario Kart Wii friend code: 2707-1866-0957

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Pristine20 on 01 February 2009
NJ5 said:
Pristine20 said:

It is scary but a side-effect of competition nonetheless. We'll probably end up in a situation like the OS market where there are only 2 head honchos and everyone else has been bought out.

 

Yeah, look at wikipedia's list of video game publishers:

http://en.wikipedia.org/wiki/List_of_video_game_publishers

There's a great amount of lines saying "acquired", "merged" or "defunct".

 

It's only going to get smaller. We'll just have big guys with lots of studios because everyone needs a big corporation to back them these days. This is probably why second parties exist as well (thinking Insomniac especially)

 



"Dr. Tenma, according to you, lives are equal. That's why I live today. But you must have realised it by now...the only thing people are equal in is death"---Johann Liebert (MONSTER)

"WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives"---Maj. Gen. Smedley Butler

Pristine20 on 01 February 2009

I'm gald no one has claimed that nintendo came to save the day on this thread because if you ask me, they did what was best for themselves not because they had any particularly altruistic intentions for the gaming industry as a whole.



"Dr. Tenma, according to you, lives are equal. That's why I live today. But you must have realised it by now...the only thing people are equal in is death"---Johann Liebert (MONSTER)

"WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives"---Maj. Gen. Smedley Butler

NJ5 on 01 February 2009
Pristine20 said:
I'm gald no one has claimed that nintendo came to save the day on this thread because if you ask me, they did what was best for themselves not because they had any particularly altruistic intentions for the gaming industry as a whole.

Business is rarely altruistic. But in saving themselves from excessive budgets, Nintendo also gave an opportunity for third parties to save money. Imagine if we had three platforms requiring $10+ million budgets for most games.

 



My Mario Kart Wii friend code: 2707-1866-0957

Pristine20 on 01 February 2009
NJ5 said:
Pristine20 said:
I'm gald no one has claimed that nintendo came to save the day on this thread because if you ask me, they did what was best for themselves not because they had any particularly altruistic intentions for the gaming industry as a whole.

Business is rarely altruistic. But in saving themselves from excessive budgets, Nintendo also gave an opportunity for third parties to save money. Imagine if we had three platforms requiring $10+ million budgets for most games.

 

it would never have been possible. Nintendo is reaping off their cheaper-to-develop-for-console because it came with innovation. If the ps3 and 360 were on the same level of power as the wii, the wii will definitely have ps2 marketshare by now for sure with all the 3rd party support to boot.

Thats what competition does, 360 already pushed the set the bar high when it launched first and sony didn't have anything particularly innovative so they pusher it further. Nintendo decided to gamble elsewhere simply because they couldn't afford the stakes M$ and sony set considering their performance in the last 2 console gens  of their only industry.

Frankly, I think it was the original xbox that started the insane tech push but I don't blame M$ for taking that route. They did what they had to do to get their foot in the door. It may be out of control now but we'll see how things play out. Ps3 and 360 and even the wii may be around much longer than we all expect.

 



"Dr. Tenma, according to you, lives are equal. That's why I live today. But you must have realised it by now...the only thing people are equal in is death"---Johann Liebert (MONSTER)

"WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives"---Maj. Gen. Smedley Butler

jammy2211 on 01 February 2009
Pristine20 said:
I'm gald no one has claimed that nintendo came to save the day on this thread because if you ask me, they did what was best for themselves not because they had any particularly altruistic intentions for the gaming industry as a whole.

 The article is more explaining a trend of what has happend in the industry for many years. What it's saying is collective to the whole industry.

 The Wii has helped keep costs low but ultimately it'll succumb to this trend, marketing budgets will go up, games will get more ambitious etc. In some ways I think Nintendo are encouraging this, Wii Fit's marketing budget is beleived to be ~ $40 million in the USA alone (Can dig up a source if you want), I'm sure they're not marketing any other games that high but you can bet Wii Sports and Wii Music and Mario Galaxy etc were huge investments.

 I'd say it's only a matter of time until EA or Activision or someone start trying to out-do Nintendo, push the budgets higher, market it even further etc, and then the trend continues and costs go higher, risks are more dangerous and most of what was detailed happens.

 I don't think any console will change this unless we saw a revolution to the entire video games model (Digital Distribution could be that revolution) but for now the trend will continue on and on.