Friday, February 6, 2009

I'd be angry if I was AC/DC...

You know why? Because I'm one of the Rock Gods, eagerly sought after by the Rock Band and Guitar Hero folks, and when I finally DO agree to license my music with Rock Band, my exclusive title doesn't sell for $#*@!!! According to vgchartz.com (I'm digging this site for its free sales info), less than 300,000 units of the AC/DC Rock Band game were sold! (Nov 2008 - Feb 2009 across all platforms)

Compare this to Guitar Hero: Aerosmith, which has sold 2.25 million, and I would be very ticked off. I would be thinking, "Man, I like Steven Tyler, but Aerosmith is NOT eight times more bad-ass!" And truth be told, they're not. For as much as AC/DC rocks, justice has not been served.

One contributing reason to lackluster sales is the exclusive arrangement with Wal-mart. You could only get this game at Wal-mart. No Target. No Best Buy. No Gamestop (which owns Electronics Boutique). I really don't understand the logic behind this deal. Why cut out so many channels? Unless AC/DC got a sick upfront deal, I don't why this would get greenlit as is. Because I'm sure they're unhappy with royalties off of sales.

Sorry AC/DC, maybe we can make a game for you that garners the success it deserves down the road...

Thursday, February 5, 2009

My MIT Sloan Video Game Case Study

While I was pursuing my MBA at MIT Sloan, I authored a case study on the video game industry. The Strategy group was using an extremely dated case on the video game industry to highlight the importance of establishing installed bases in various markets, so I talked to Professor Sterman about updating it and wrote a brand new case!

The case highlights the various strategies of MS, Sony, and Nintendo up to 2006. It also goes into a brief history of the industry, from the old Atari days and the first incarnation of Activision, through the rapid consolidation of the industry around the turn of the century, up until the current generation of consoles.

Enjoy! Comments most welcome!

MIT Sloan Video Game Case Study

(FYI, this case is the property of MIT Sloan and cannot be re-distributed without the school's permission. Please contact the school if interested in using the case. This case will soon be available on MIT's Open Courseware website so it is free to read.)

Spore won't come close to The Sims

Spore was making big news this fall for flirting with the 2 million mark as 2008 came to a close. Unfortunately, when compared to Will Wright's previous EA franchise, The Sims, Spore won't even come close. The Sims franchise sold over 100 million units!!! 100 MILLION UNITS!!! All the sequels and expansion packs dominated the PC charts for years and years. You just couldn't avoid The Sims.

But Spore won't come close. Not that hitting 100 million units is an easy feat, far from it, I just wonder what EA's sales expectations were for Spore. When I heard that Spore was Will Wright's next franchise, I knew that it would have a real struggle to emulate Wright's previous success.

The reason? Aliens. Spore is about aliens. And when you start talking about aliens and spaceships, you've just shut out most of the population. Gamers and sci-fi fans will eat Spore up, but that enormous population of non-gamers that The Sims appealed to won't give Spore a second glance.

The Sims was about human beings. They were on the cover, they were in the game, the entire concept was extremely easy to understand. Humans like humans. Humans relate to humans. Humans know humans. The concept, at its core, was appealing to practically everyone. On the other hand, Spore is about aliens. And, by definition, humans don't know aliens, so from its inception, Spore didn't have a chance to rival The Sims.

I saw a similar trend with Pixar's movies. It was easy to see that Cars, with *ahem* CARS as the main characters, wouldn't touch the success The Incredibles achieved, which featured an All-American family of superheroes. Again, humans relate to humans. With The Incredibles, Pixar really hit the nail on the head by appealing to *every* member of the family, so of course everyone wanted to see it! In the case of Cars however, that universal appeal was lacking, and it showed in the worldwide box office numbers: Cars pulled in $462M, The Incredibles raked in $635M. (source: www.the-numbers.com/features/cars.php)

What's the bottom line for game publishers? Having a mainstream title in your portfolio is a very good thing. Having sci-fi titles in your portfolio is a good thing too, but replacing a mainstream title with a more niche product can only lead to tears.

Unemployment Rising in the Game Industry

Before we all proclaim how recession-proof the game industry is, I think that we should keep in mind what's been going on in the publishing and development community. Publishers and developers have been laying off staff left and right, and a number of studios have just closed their doors entirely. Factor 5, Aspyr, Free Radical, and Turbine have all cut staff in one form or another. Midway's Austin studio has been closed and EA will have 1,000 jobs gone by April 2009. As a rough estimate, there are 2,000 more unemployed game industry folks now. As of 2007, there were almost 50,000 game developers in North America, so that's a 4% increase in unemployment! All of a sudden, the game industry isn't looking so recession-proof.

What does this mean? Risky or new franchises won't get funding. Publishers are bracing for a rough 2009 and will fund the titles with the highest priority, i.e., the titles with the highest rate of financial return. Guitar Hero, Madden, and Call of Duty will all move right along, but those "riskier" projects will get shelved. The portfolios will be lean and only the guaranteed hits are safe. Best of luck trying to get funding from a publisher right now - I imagine it to be nigh impossible right now unless you have a super-experienced team and rights to a well-known franchise. My 2 cents? Go grab a team and make iPhone games....

I almost feel bad for EA though (trust me, I'm no fanboy). They finally give new IP a chance with games like Dead Space and Mirror's Edge, and then the economy goes to tatters right when they launch. I applaud them for finally diversifying their portfolio, but unfortunately, their timing was just terrible. I wonder how much the development teams working on the sequels will get affected. Dead Space is working within a proven genre (comment dit-on Resident Evil?) so they probably won't get hit too hard. But who knows with Mirror's Edge and Dante's Inferno.

Overall though, since most consumers like the big titles anyway, the portfolio slimming won't hurt the industry in 2009 too much. It's just those people who are looking for something fresh and new in gaming that will get squeezed out. But really, that's been happening for a long time already..........

One hope is that there are just too many Wiis out there for publishers to ignore and they'll be forced to think of something appealing AND innovative to keep their shareholders happy.