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.

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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?

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Episode 735: Long DiscussionsEpisode 735: Long Discussions

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There’s a ton of discussions, such as Xbox Cloud Gaming will reportedly let players stream any game in their library from November, Russia straight-up bans Discord for enabling ‘terrorist and extremist purposes’, Killing Floor 3‘s dynamic tech makes zed heads ‘flower’ when you shoot them, Call of Duty: Black Ops 6 will get a Nuketown map, Brazil lifts ban on X following Elon Musk’s compliance with Supreme Court orders, the DOJ may break up Google, Terrifier 3 (the indie horror film that managed to make 10x its budget while Joker: Folie à Deux flails in the water) is getting a videogame, the current head of Xbox Game Studios, Alan Hartman, is to retire at the end of November, with Rare studio boss Craig Duncan taking over and the official Nintendo Museum appears to be emulating SNES games on a Windows PC, which is slightly embarrassing.

The news:

  • Legendary game designer Jordan Weisman’s next project is an open world deck-building pirate romance tactical RPG
  • Red Dead Redemption coming to PC later this month
  • Former Bethesda and BioWare devs are making a Stardew-like with Redwall animals (from PC Gamer)

Let us know what you think.

The post Episode 735: Long Discussions first appeared on Gaming Podcast.

Sony Responds To Crashing Sales with Management ShiftSony Responds To Crashing Sales with Management Shift

ps3Sony Computer Entertainment Europe has made some leadership changes in response to their in-ability to get things going in the sales department of the PlayStation 3. Gamer’s continue to refuse to believe the PlayStation 3 is in a bad situation by explaining how badly Microsoft’s Xbox 360 is doing in Japan and Europe compared to the Sony console. And, of course, the Wii isn’t competition to Sony.

“Andrew House, Chief Marketing Officer and Group Executive of Sony Corporation, has been named President, Chief Executive Officer (CEO) and Co-Chief Operating Officer (Co-COO) of Sony Computer Entertainment Europe (SCEE) as of May 1, 2009.” (smarthouse.au)

We’ve been told this is the year of the PS3, this is when they bring it all together. Nintendo’s losing some of their grip on the industry with slower sales, even in Japan. The economy isn’t playing nice with any of the consoles and sales continue to drop, reportedly 17% in March compared to last years numbers.

Australia isn’t proving to be any help to Sony, “for example in Australia a consumer can now buy the Xbox 360 for $299 and a separate Blu ray player and DVD upscale player for $199. Combined this is $200 under the recommended retail price for a Sony PS3.”

Here in the United States, we’ve bought more Wii balance boards than PlayStation 3 consoles. One can argue that the Wii is a novelty system but that really casts a dark shadow on the PlayStation 3. The PS3 is being beat out by a novelty item? Can the new SCEE management change the direction of Sony?

EA and Take-Two Stock Falls FastEA and Take-Two Stock Falls Fast

It’s official, EA has given up their talks with Take-Two and, as a result, the stock of both companies is falling like a stone. While gamers may cheer knowing the Grand Theft Auto and 2K Sports product lines will continue to compete with EA products, share holders are doing a WTF?

Take-Two has had its share of financial difficulties, but nothing shakes up a stock more than a break in discussions when the words acquisition have been spoken. It causes uncertainty and lack of understanding on the part of the game industry and share holders. EA’s stock dropped 2.7% upon opening this morning but has begun to stablize as it’s clear EA isn’t in any financial peril from this breakup in discussion.

Take-Two’s stock, however, is in epic free fall with a 25% decline since the discussions ended. One theory is that, “is taking a huge beating as everyone and their mother tries desperately to sell the shares the figured EA was going to to buy.” (kotaku)

As the game industry gets more competitive, builds bigger bank-roll and becomes a staple entertainment icon there is always more business savvy people getting into the game trying to make a fast buck. In this case, the shareholders obviously aren’t pushing for Take-Two’s future decisions or product launches — this is the reaction of business folks trying to make money.

There is huge risk with block buster 100-million dollar titles and all the crazy hype involved with some of the biggest games in history. They break sales records, smoke box-office numbers and bring new gamers into the industry but it’s all at risk when money gets involved. One bad move and a company making a title like GTA can find themselves in financial peril.

With risk comes reward, but failure is always sneaking up around the corner so watch out!