This podcast was corrupted on upload, so I have to re-upload it now.
The news covered includes:
Let us know what you think.
It seems Miyamoto let it slide that there will be a Pikmin game arriving in the future, for which systems? Probably the Wii if we had to guess, but it wouldn’t be surpising to see it on both their hit product lines.
His exacty words, “We’re making Pikmain.” Nintendo has done well by their little Pikmin friends, a newer franchise with lots of growth potential and fun for the entire family. The Pikmin series was a sleeper title, looking fairly silly in presentation but full of great value in reality.
It’s not surprising to see them spinning a new Pikmin title and we’ll have to hold our breath in anticipation for the fruitful results. As always, Miyamoto isn’t giving any dates… it will be ready when he says it’s ready.
Any Pikmin fans?
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.
This 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.
Gamers around the world are going to feel the pain in the 2009 holiday season after the economy shakes apart many great development studios. Electronic Arts feels the pain of being a public company as their investors complain about lackluster revenue, THQ deals with closing studios to extend their runway and other firms will lose more headcount in the coming months.
It’s not all bad. But, it’s going to get ugly before it gets better.
The financial market has played tricks on everyone in our global economy and companies across all industries are going to feel a bit of a tightening around the belt. Investors are shaken and doing their best to protect their investments and cutting loose those that aren’t projecting profits in the near future. Game studios are going to slow their financial burn rates, trim a bit of the fat and hunker down the long term. The end result, next years holiday season will have a few less games because those games are being dropped to the floor now.
Mid-sized studios within larger firms may find their projects canceled or put on hold and their employees re-structured or let go while big studios assess what projects will make the long haul. This is the ugly side of the business, having to make a decision on what games stay and what games go with the grief of having to tell some of your best talent “goodbye.”
The bad part of the industry is occurring today, with publishers posting mediocre profits and trying to convince their investors to be patient and trust they’ve got a firm hold on their destiny. The game industry is not alone in this, many firms are reducing head count and many startups are finding themselves without series A or B funding; they’re closing their doors because the money is being directed to more stable ventures.
What’s the good in all of this?
