Is This The Golden Age of Gaming?

Entertainment Software Association (ESA) president Michael Gallagher called this the “Golden Age of Gaming” during his E3 keynote address. Calling out innovators like Nintendo who have “helped revolutionize our industry” and Sony’s Home initiative.

The keynote fell on the ears of fifty or so people who filled the large room awaiting his talk. Gallagher believes we’re in some of the best years of the gaming industries life based on… sales figures, technology and innovation?

If we’re in the Golden Age of Gaming we might as well pack it in now. Text book definitions of the phrase are defined as “the first and best of the four ages of humankind; an era of peace and innocence that finally yielded to the silver age.”  Or, “the most flourishing period in the history of a nation, literature, etc.” (dictionary.com)

By that definition, we’ve seen the best to come and everything from here is downhill. When a person retires from work they’re often said to have reach the “golden age” of their career. Is this the correct message to be sending to the industry? That we’ve done it all and now it’s time to sit and relax.

In terms or progress it seems we’ve only just begun to realize the potential of the growing industry. We’ve learned there is a place for intense graphical games and fully interactive motion-sensitive product lines and accessories. We’ve broken the mold on game controller designs with the Wii controller, Wii Fit, Rock Band, Guitar Hero and keypad controllers like the 360 attachment.

Nothing has been perfect or “at peace” in the industry. Nintendo is releasing the Wii Motion Plus accessory to increase their sensitivity in their games and, overall, fix the limitations of their Wii controller. Sony continues to work on scaling and global presence in Home while Microsoft continues to update their Xbox Live solution with new creative community features, not mention the failure rate on the 360.

The console realm is far from perfect and the PC gaming realm is an ever growing technological race of bleeding edge graphic cards and powerhouse processors. PC’s and consoles shrink their technology, conserve power with new advances and are still learning how to handle multi-core designs. How is this the golden age of gaming when we’ve not yet found our true potential?

Sony has said they’re working on a 10-year game plan and you can only “imagine” what the PS3’s going to have for gaming titles in two or three years. They’re jazzed for the upcoming 2009 and beyond; if this was truly the golden age of gaming we’d all be sitting back sucking on grapes handed to us on golden platters by servants.

For Gallagher to even suggest we’ve hit our full potential shows he’s not looking at the big picture. Perhaps he meant E3 has hit its golden age?

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Microsoft Shoots for Number Two In Console WarMicrosoft Shoots for Number Two In Console War

Microsoft recently announced their price cuts on the Xbox 360, effective today, but what is motivating them? Microsoft’s not going to make much additional money by passing off the savings to the customer but they will, more than likely, sell a bunch of great new Xbox 360‘s to a new crowd of gamer.

Motivation? Sony.

“I’m not at a point where I can say we’re going to beat Nintendo,” says Don Mattrick, senior vice-president of Microsoft’s Interactive Entertainment Business. Indeed, Nintendo is likely to run away with the lead in the current generation of console gaming, leaving Microsoft and Sony to battle for second place. (businessweek)

Who would have thought Sony and Microsoft would be battling out this generation for second place while Nintendo breezes through with their Wii console and a handful of games with mediocre game reviews? Don’t answer that, it’s a rhetorical question. If you saw this coming and you’re not on the marketing or project planning for one of these console makers you better prep your resume!

The battle isn’t cooling, Microsoft drops their price to compete with their big competitor Sony which also brings it closer to the price tag on the Wii getting two bird with one stone. The reason Wii is winning is clearly due to its broad demographic of grandpa and grandma non-gamers along with hardcore gamers who have to collect all the consoles and younger gamers that want to fit the trend.

Microsoft’s clearly shooting for second place by installing more units into the consumers home as possible. They’ve got a great library of first person shooter titles, a few RPG’s and RTS titles and the typical contraversial titles like GTA and Saints Row with more hot blockbusters (read: Gears of War 2) arriving soon.

I see this as a great opportunity for casual game developers to get into the Xbox Live Arcade market and start making themselves (and Microsoft) some money off the new gamers that will buy their first Xbox 360 for $199 and up. Microsoft’s getting closer to the low-budget gamer crowd with their price cuts so it would be great if they can take advantage of that market with lower cost titles as well.

If you’re a game developer looking for console stick time and you want to grab the attention of a large pool of gamers, the Xbox 360 isn’t a bad start!

While Microsoft isn’t aiming at Nintendo just yet, there is no doubt Nintendo will be in their sights if they can smoke the pants off Sony in the near future (by this holiday).

Wallets Shrink, Used Game Market GrowsWallets Shrink, Used Game Market Grows

Over the last year we’ve seen developers scrambling to find “value add” features to new game purchases. Their goal is to convince the customer to buy new instead of used because developers don’t see a penny from a used game sale. While GameStop sees 48% profit margins from the used game market developers struggle to stay floating in the industry.

for-saleThis is not the fault of GameStop and their 48% profit margins because they’re only getting 7% to 20% profit margins (say analysts) on new game sales. As someone that’s run a game store online, if you’re getting 15%+ on a new game you’ve got some great hookups in the distribution channel or are buying in huge quantities.

Buying games in huge quantities to build profit margins can be a huge mistake in this industry. Gamers are fickle little creatures and they’re going to buy their top tier games for a few weeks and then sales will drop significantly. No retail chain wants to purchase a thousand copies of GTA IV (only as an example) and sell seven hundred over the first few week to be stuck holding onto a few hundred copies when the dust settles. Now you’ll have to put them on sale to get them out of the store because the hardcore gamer have already done their shopping and you’re not going to get any price protection if you’re not a major player in the industry.

Why take 7% profit margins when you can get 48% on a used game? The gamers don’t seem to mind because they’ll trade in a used copy of a sports title like Madden to save $5.00 on the latest franchise release. Gamers will buy Fable 2, beat it in a week and rush to the store to get the “most for their dollar” before the game gets stale and buy-back prices drop like a stone. Why not rent Fable 2 and save yourself $50.00? Of course, renting pisses off developers as well because they see no additional revenue.

While the economy struggles and consumers fight for their jobs, the entertainment side of life continues to grow. People would rather “cocoon” in their homes playing video games and watching movies on their brand new HD television because it takes them away from the low points of the economy if only for a few hours. History has shown us trends in entertainment during the down points of economies, it’s natural to want to get away for a bit.

But, consumers want to play these games on the cheap because their job may not be there tomorrow. Saving $5.00 knowing the store just took the title in for half the price doesn’t bother you; $5.00 in your pocket is better than in their pocket right? The fact that they just pocketed upward of 40% on the game doesn’t matter to you — it’s all about your bottom line!

While we’re bargain hunting during the recession developers are going to try and up sell you to a new copy of the game. If that means giving you special game items and features with a “one time code” upon purchase, it will be up to you to decide if it’s valuable. All the while GameStop will lock out the game industry from selling used games because 42% of their overall gross profit is from used game sales.

You, the consumer, benefits from a slightly cheaper game, bargain bin fire sales and additional game features if you do choose to buy new. The economic down turn is a great time to be a gamer, as long as you remain employed.

Episode 347: Final FantasyEpisode 347: Final Fantasy

This week’s podcast features the Gaming Flashback of Final Fantasy VI, which takes up a third of the podcast as Paul and Jordan enthuse about the Japanese roleplaying game at length – so much so, that some news items were skipped over due to running length. Jonah prepares for his trip to PAX East 2014 for the weekend. He also proclaims Emperor Palpatine dancing in Kinect Star Wars the best thing to ever happen for Star Wars.

This week’s news includes:

  • Amazon says FireTV will boost mid-market games
  • Borderlands 2 Vita bundle hits on May 6, game launches May 13
  • Molyneux predicts Kinect-less Xbox One
  • Microsoft looking into Xbox 360 emulation through Xbox One

A lot of Listener Feedback this week, and the Question of the Week is “What mobile games have you played recently?”