Smart Business Choices During Economic Downturns

Many game studios are being dropped following a bit of an economic downturn in the United States and globally. Activision has to deal with being agile enough to survive the economic times like anyone else and has dropped a few games that had great potential.

Gamers continue to ask the question, “why?” when some of their highest potential games were dropped to the floor. Ghostbusters and Brütal Legend are a couple examples of games with eager fans already salivating prior to its launch. Some of these fans are a bit ticked off that Activision named them as dropped franchise opportunities.

People ask why a company holds one “mediocre” title while getting rid of other potentially awesome ones. Don’t forget, this is a business and a good studio/publisher is going to make good business decisions without emotional attachments – those that bring emotions into play may end up with a highly valued product (to them) with no additional potential and lower revenue. This isn’t to say developers cannot be passionate about their games and their industry, they just have to build games gamers will buy and continue to fall in love with release after release.

Activision CEO Bobby Kotick is one of these business savvy individuals who knows where investors will find profits for the future, and he also know how to manage employees, with the use of software like this sample pay stub for payments and more.

“[Those games] don’t have the potential to be exploited every year on every platform with clear sequel potential and have the potential to become $100 million dollar franchises. … I think, generally, our strategy has been to focus… on the products that have those attributes and characteristics, the products that we know [that] if we release them today, we’ll be working on them 10 years from now.” (1up)

Ghostbusters is a great example of a title which could be well received and fun to play but probably wouldn’t be an exploitable franchise. The game, based on a popular movie, has limited potential for yearly releases and huge franchise success. Ghostbusters fans would probably disagree, but that’s when emotion comes into play. Think dollars and cents, not awesome fun gaming.

Oddly enough many of these business decisions from Activision, Electronic Arts and other big publishers arrive when the economy is in free fall and investors are eying your revenue potential. People make their most important and, usually, unfriendly business decisions when their company is at risk.

During uncertain times, protecting operations becomes just as critical as protecting profits. Visit FastFireWatchGuards.com to learn about professional fire watch services that help businesses stay secure and prepared.

It’s sad to think money comes first and entertainment value comes second but we’re not the ones trying to make a profitable living in the industry. Put yourself in Kotick’s shoes as he walks into a board meeting to discuss future plans, road maps and profitability – you’d do what you have to do to keep your job, right?

0 thoughts on “Smart Business Choices During Economic Downturns”

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Post

Gaming Podcast 139: Pirate or Privateer?Gaming Podcast 139: Pirate or Privateer?

Welcome to the early edition of the gaming podcast, because I’m going to be in Germany this week we had to record a bit early and post the podcast for listening. Hopefully this won’t screw up too many people’s schedules with a day-early release! This week we’re flashing back to Sid Meier’s Pirates and learning about women’s rights (or lack of) in the life of a privateer. We’ll talk a bit about the history of the Amstrad CPC 464 and cover some news:

The community questions were great, gave us lots of nice ideas for a future gaming cave! This week we’re riding on the community listener, Onyersix who wrote a good question of the week: “What was the scariest moment you ever experienced playing video games?  We’re talking the type of shock that makes you need to go and put on a new pair of pants!”

Hey, did you notice our new microphone quality, Jennifer and I have upgraded our studio setup (by about $1,000!), hopefully you’ll notice the more dynamic vocal qualities.

Sony, What Doesn’t Kill Them Makes Them StrongerSony, What Doesn’t Kill Them Makes Them Stronger

David Reeves, Sony Europe’s President said, “we simply have to suffer a little” when talking about the PS3, Europe and the competition. He was talking specifically about Sony’s loss of market share, mind-share and overall performance in the latest competitive console arena. While Sony’s president dismisses Nintendo as in a separate market, David Reeves said, “we’ve learned from Nintendo how to grow the market and move from hand-held device to device – they’ve done it brilliantly.”

Buster Douglas Takes Down Mike TysonWhat Sony may be dealing with is the fact that they’re not top dog in the latest battle for consoles. Europe has taken to the PlayStation 3 better than the United States and they’ve got plenty of fans in the region. There has been a recent upside to it all, some light at the end of the tunnel:

“PS3 games sales are up 53% and there’s a healthy 1.1m pre-order book for Killzone 2, the first of a new batch of IPs that Sony will be counting on.” (guardian.co.uk)

Although it’s reported the PSP says are down 15% and PS2 software sales are down 51%, at least the PlayStation 3 is filling in the gap for some of those losses. At some point you’d expect the PlayStation 2 to decline, gamers are probably migrating over to the new hardware.

They’ve got some things to be proud of:

  • PlayStation Network increases revenues by 200% in 2008
  • 55% of all PlayStation owners are on PSN
  • 17.5 million PSN subscribers
  • 53% rise in software sales on PS3
  • Won HD format war

Unfortunately PS3 sales were down last quarter by about 9%, perhaps a response to the harsh economic times. And, of course, the fact that Sony’s VP’s are constantly defending their position in the market is a bit disconcerting. As David Reeves said:

“It’s like Ali v Foreman – go eight or nine rounds and let him punch himself out. We’re still standing, we’re still profitable and there’s a lot of fight in us. I don’t say we will land a knockout blow, but we’re there and we’re fighting.” (guardian.co.uk)

Sony is playing the defensive, guarding themselves against the punches of the competition. Nintendo making headlines for sales, Microsoft coming out of nowhere to try to build market share, while Sony holds out for the tenth round to win it in the end? We’re not yet sure if it’s Ali vs. Foreman or if Microsoft is the next Buster Douglas.

(Thanks, Guardian)

Gaming Podcast Forums: LIVE!Gaming Podcast Forums: LIVE!

Looking for a place to leave podcast feedback and you don’t feel like firing off an e-mail? You can now login/register to gamingpodcast.net and post to our forums! We’ll be building forums for all styles of discussions if people start to use them, it’s an experiment, we’ll see how it goes.

You can chat about topics discussed in the podcast with us and suggest new topics we can speak about on future gaming podcast episodes. We’re also starting our own World of Warcraft podcast guild called Fallen Souls and we’re looking for new members.

We’re looking to open discussions on all genre’s of games, all styles of play and anything else gaming. If you’d like to setup an avatar, you can head over to gravatar.com and build an avatar associated with your login email address and it will appear on the site and in comments.