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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This week’s episode has only two official news items, but there’s a lot to discuss that didn’t quite make the list, including Sony’s controversial plan to update the fan speed on the fly by taking data from consoles already purchased, to the beautiful Ori Collector’s Edition bundle. This week’s Gaming Flashback: The Legend of Zelda: Twilight Princess.

The news includes:

  • Phasmophobia updates will make ghosts smarter and less predictable
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Kaz Hirai Dooms 360 To Short LifeKaz Hirai Dooms 360 To Short Life

Sony’s PlayStation 3 has a 10-year plan. We’ve heard about the plan, we’ve seen Sony’s current execution and we’re starting to see some of the titles making their way to the PS3 for 2009. The Xbox 360? Kaz, Sony Computer Entertainment’s head man, made his thoughts clear when speaking to Official PlayStation Magazine.

kaz“Last time I checked, they’ve never had a console that’s been on the market for more than four or five years and we’ve committed to a ten year life cycle, so you do the math…,” he says. He goes on to state that the Xbox 360 won’t have a larger install base by the end of their 10-year plan has been completed, “unless things go really bad.”

Of course, nobody says Microsoft’s 10-year plan isn’t to push out yet another console. Is that wise? We don’t really know, but you can’t count them out on it. Maybe they’ll only have half the install base but two consoles in the market within the next ten years, nobody really knows.

The one major hole we can see in his comments revolve around their claims that the Microsoft doesn’t have any history of a console being on the market for very long. If I recall, Sony managed to squeek one by on Nintendo with the original PlayStation, which changed everything for the next ten years. Sony didn’t have a 5-year track record when they started taking Nintendo down, why does Microsoft need to have an extensive resume as well?

As for Wii?

“It’s difficult to talk about Nintendo because we don’t look at their console as being competitors. They’re a different world and we operate in our world — that’s kind of the way I look at things…” (kotaku)

Say what you want about Microsoft vs. Sony, but it sure sounds like Sony doesn’t want to acknowlege Nintendo’s success because it casts a dark shadow on their own product. Nintendo and Sony have been battling for years, that’s just the way it is and that’s how the industry sees it. When NPD releases numbers, when journalists write articles about consoles and when the war is finished one thing remains constant: all three consoles are included in the equation.

No New DS Redesign Until Sales FadeNo New DS Redesign Until Sales Fade

If you’re looking to see what the next greatest DS hand-held will look like, plan to wait until Nintendo starts to see declining sales trends for their current DS hardware. Sensible from Nintendo’s standpoint, but a major bummer for those hand-held gamers who want to see something new and cool out of the Nintendo camp.

While the DS sells great, many of us tech fans would love to see what a new generation of DS would look like. Perhaps something closer to the iPod touch in screen size and touch-abilities with real WiFi capabilities connecting to the Internet? Wouldn’t it be neat if they added GPS location and tilt abilities much akin to the iPhone or iPod Touch?

Personally, I envision a system where you are in total control of your character from leaning, to sliding, to moving your fingers around the screen and communicating over the Internet sharing high scores, drop-in drop-out multiplayer titles with complete voice communications.

Alas, Nintendo tends to gimp most of their hardware from hot innovation such as Internet communication, much like the Wii. While Nintendo has the next-generation capabilities now for Internet communication they’ve constantly opted to have a more useless version of connectivity to “protect the consumer.”

We need a DS store, much like the Xbox Live Marketplace for downloading DS casual games, considering DS game size is much smaller than a PC, PS3 or Xbox 360 title. We need a smaller form factor mimicking the iPod in thickness and durability with a larger screen or unfolding dual screen to double the size of an iPod style play area.

Hardware innovation seems to be more acceptable to Sony and their PSP product while Nintendo always opts for something more simple. Unfortunately, the PSP cannot compete against the DS which will leave them in the lead with very little desire to re-up their hardware with new capabilities and sexy new designs.

Oddly enough, the DS is the perfect device for the mass market which means they’re not going to be forced to innovate beyond its current capabilities for now. Apparently people don’t desire huge leaps in technology, screen size and speed, or we’d would probably see a decline or dis-interest in the DS hardware, thus forcing Nintendo to re-innovate and evolve.

The day will come, but probably not for a long time.