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(Uproxx)   Five reasons why the next generation of game consoles will likely fail. This is not a repeat from 1984, 1989, 1994, 2000 or 2006   (uproxx.com) divider line 197
    More: Obvious, system console, God Only Knows  
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6232 clicks; posted to Geek » on 31 Jul 2012 at 10:04 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-07-31 11:11:28 AM

natmar_76: HeartBurnKid: No, they won't. This last generation sold more consoles than ever before the smartphone and tablet booms. The people who kept the Wii on backorder for two years straight won't do the same with the Wii U; they have an iPhone and iPad to play games on now. Gamers like you and me, we were always a niche. We let ourselves become convinced otherwise, thanks to media coverage and this awesome community we've built on the internet, but we always were.

Yeah, the 20 million people who buy challenging Mario platformers and Call of Duty are all going to migrate to Angry Birds. Everyone is suddenly going to stop buying consoles and handhelds and miniatures and dice and roleplaying game books. It'll be mass hysteria, dogs living with cats, and twinkies the size of Manhattan. The sky is falling. The world is ending. It's the metalocalypse out there.

All those 3DS sales? Meaningless. Wii U is going to bomb so hard Nintendo will go 3rd party. Sony am doomed. Microsoft am doomed. Everyone am doomed. All hail Apple.


You are failing to comprehend some basic math here.

Let's say the size of the PC Gaming market is a "5".

The console market is, for sake of argument, 10x larger than that. So we'll say, "50".

If you are a game publisher, you can invest 10 million dollars in the PC Gaming market and get back say, potentially 12 million dollars in profit. Or you can invest that 10 million in the console market and get back potentially 120 million dollars in profit.

Now, the size of the mobile gaming market - Imagine it's something like "500".

Before even factoring in scarcity of resources (How many good development houses are out there and how many games can they make at one time?) if you are going to spend money funding games and innovation, which one is it going to be in?

This has been the bane of gaming since the farking Nintendo 64 came out. Since publisher control all the resources that produce games (money and human capital) they invest those resources in markets that will get them potentially the biggest return, which means in the case of a media product, has the widest audience.

Trust me, there will come a time in the future that having a console in your house for playing games will be viewed with the same level of disbelief as watching some dude jogging down the street with one of those "awesome" shock resistant disc-man players.
 
2012-07-31 11:11:53 AM

The Homer Tax: Shrugging Atlas: Why would you buy a game new at full price? Wait a month or less now and the prices start dropping. Christ I bought Assassin's Creed: Revelations for $9.99 new off the shelf at Best Buy.

Wait years and borrow them from your friends for free! I just finished Arkham Asylum last week.

Tried to play the original Assassins Creed and thought it sucked balls. Is Revelations or any of the other sequels any better? The originial was repetitive and boring to me.


Start with the second. AC2 is a monumental improvement on the first. Brotherhood and Revelations are basically standalone expansions for 2 (though quite good ones.)
 
2012-07-31 11:11:55 AM
I have thee consoles in my living room...

The time I spend playing? I couldn't even guess how much total in the last year, but it's minor.

I played one of the Resident Evil game through and started another after but that was over a month ago (at least), and a few times here and there, but I just don't find the time anymore.

I wanted for a long time before buying the last one (the Wii) as I was waiting to see who would bring out the next Fatal Frame... and both failed (it did get released in Japan for the Wii, but never released anywhere else), but as I tend to play with the kids as much as possible, the Wii still won out.

But even then, after getting all the better games, the only games I remember that I've bought in about 2 years were the karaoke games (2-3 of them) and the Resident Evil re-released (probably bought used).

I just don't see a new console appealing to me at this point thanks to the lack in games that would interest me as the older favourite ones I have have never been surpassed or such.

Favourite games? (off the top of my head)

Tech Romancer
Fatal Frame (collection)
Resident Evil (collection)
R.A.D.
Clock Tower (collection)
Karaokes (family fun nights)

/still peeved about the Fatal Frame thing
 
2012-07-31 11:20:39 AM

TwistedFark: Btw, great article here that pretty much echos what I am saying and the direction that the market is going in.


PROTIP: Large companies diversify. The only reason Sony is in the market in the first place is because Nintendo was making money at it. The only reason MS is is because Nintendo and Sony were.

Have you seen Steam's sales? They're doing better than ever. They continue to grow. Have you seen the first numbers on New Super Mario Brothers 2? It's doing better than NSMB DS did.

Did you pay attention to the Sony Xperia and its colossal flop? Did it help you realize that the core game space and the casual game space may overlap but have definite boundaries? Did you then go on to realize that 10 million sales of Angry Birds does not threaten 20 million sales of Mario Galaxy, it merely co-exists with it?

Have you done the math, and realized that Angry Birds at 15 million sales or so is only about $40,000,000 net profit, while one blockbuster big budget title at 20 million sales is $600,000,000 profit? Did you research the that Rovio's total 2012 profit including merch was only $100,000,00, far less than even one of Nintendo's big titles much less their entire stable of releases in a single year? Then did you further realize that Rovio is the one anomaly in the mobile equation, and no one else even comes close to that, and then further even than that, that it means profitability in the mobile space is razor thin? Have you read how many mobile developers have gone under?

You can listen to all the biased industry pundits all you want, but most of them are talking heads that regurgitate the latest buzz straight from the source of the buzz (Apple and other mobile manufacturers). They aren't prognosticating. They aren't reporting. They're just blueskying, as the phrase is used. They're looking at $600 phones that cost $60-$100 more a month, have no buttons, play crappy 5 minute $1 games, and calling them the entirety of our future because that's what's in the news right now. They aren't actually seriously considering all the financial and consumer angles. They aren't studying statistics and sales. They're just flapping their gums.

The end of a console generation is always slow. That's how console generations work. People get tired of the old tech. It's the reason Apple releases a new overpriced phone every 6 to 12 months. Watch this next year. Watch consoles sell well. Watch industry experts spin their ridiculous stories about how exciting and fun the new tech is, how great it is in the family living room, how it offers experiences you can't get on phones.

Or keep running around like the sky is falling for the next 12 months until that happens. Then feel silly.
 
2012-07-31 11:24:46 AM
FTFA: But part of that means ditching consoles. Consoles are expensive single use devices with a built-in time to be junked. The future consumer is just not going to accept that, not in a world where Google ports your apps to your new Android phone and everything that streams Netflix will also stream OnLive.

Yeah and smartphones/tables made obsolete at least every year aren't?

You think people are still using phones from 5-6 years ago? Heck, even the PS2 is still selling and it's a 12 years old device.
 
2012-07-31 11:25:09 AM

natmar_76: Yeah, the 20 million people who buy challenging Mario platformers and Call of Duty are all going to migrate to Angry Birds.


Angry Birds was downloaded 648 million times in 2011 alone. 200 million people play it in a single month.

This is what I'm talking about. You throw around 20 million like it's a big number, but it's not. Compared to the sheer number of people gaming, it's shiat, especially when you consider the extra time and money it takes to cater to us. PC gaming will survive, because there are practically no barriers to entry and it turns out that the hardware that's good for pushing polygons is pretty good at other things too (through CUDA and OpenCL). But consoles? Their time is rapidly fading.
 
2012-07-31 11:27:04 AM

stuhayes2010: PS2 games were $50
PS3 games are $60
I will not shell out $70 for PS4 games. Plus, the PS3 (and I imagine XBOX 360) has had a real lackluster game library. It has not justified its $400 initial investment.


Inflation, how the fark does that work?

$50 in 2002 is about $60 today.
 
2012-07-31 11:28:47 AM
Consoles will still be around; they'll just shift from discs to DRM-shackled streaming, killing the used game market.
 
2012-07-31 11:29:11 AM

Psylence: Khellendros: stuhayes2010: PS2 games were $50
PS3 games are $60
I will not shell out $70 for PS4 games. Plus, the PS3 (and I imagine XBOX 360) has had a real lackluster game library. It has not justified its $400 initial investment.

Growth in development time, manpower, and money needed to develop a game now vs. 10 years ago, 3% average inflation per year.... not to beat up the point, but increasing about $10 per generation of gaming system isn't a stretch. I'm not arguing the investment point (that's personal preference and value over time), but the cost increase isn't really out of line.

Remember when games were gonna be cheaper since they were on CD/DVD instead of cartridges with expensive memory chips?


They are quite less expensive when you account for inflation. Nintendo games were insanely expensive back in the 80s.
 
2012-07-31 11:36:56 AM

stuhayes2010: PS2 games were $50
PS3 games are $60
I will not shell out $70 for PS4 games. Plus, the PS3 (and I imagine XBOX 360) has had a real lackluster game library. It has not justified its $400 initial investment.


I don't know about you with your PS3 but I played the shiat out of my X-Box 360. Oblivion, Skyrim, Dragon Age, Madden, Call of Duty, the Mass Effect series -- I got maybe five or six thousand hours of entertainment out of those games over the last what, 6 or 7 years since I bought it? I'm not a super heavy gamer but we're talking less than a dime an hour of entertainment on the system, maybe an average of around another $0.10 to $0.25 an hour depending on the game (I tend to buy used and/or play the hell out of my games)

Do you watch cable TV? You probably spend $100 a month on that. How many hours do you spend watching TV a month? If you're spending 400 hours a month on TV, that's $0.25 an hour. I don't watch that much TV, I don't know about you.

Do you go to movies? You're talking around $5.00 an hour for entertainment.

How about a night drinking at the bar?

Don't get me started on ball games, strip clubs, or casinos.

Video game consoles are insanely cheap entertainment.
 
2012-07-31 11:36:57 AM

TwistedFark: Trust me, there will come a time in the future that having a console in your house for playing games will be viewed with the same level of disbelief as watching some dude jogging down the street with one of those "awesome" shock resistant disc-man players.


You're such a visionary. Wait, that's not the word I want... Idiot... Yeah, that's it.
 
2012-07-31 11:37:43 AM

HeartBurnKid: natmar_76: Yeah, the 20 million people who buy challenging Mario platformers and Call of Duty are all going to migrate to Angry Birds.

Angry Birds was downloaded 648 million times in 2011 alone. 200 million people play it in a single month.

This is what I'm talking about. You throw around 20 million like it's a big number, but it's not. Compared to the sheer number of people gaming, it's shiat, especially when you consider the extra time and money it takes to cater to us. PC gaming will survive, because there are practically no barriers to entry and it turns out that the hardware that's good for pushing polygons is pretty good at other things too (through CUDA and OpenCL). But consoles? Their time is rapidly fading.


Yeah, but Angry Birds is the ONLY game having that numbers. It's the utmost example of mobile gaming. Not even close to what the average/media game does. And you can't really engineer another Angry Birds seeing how it was the work of serendipity. You think the "brilliant" minds at Rovio are
going to come up with something comparable? Hell no. That's why they keep milking Angry Birds with new seasons and versions.

Console gaming has dozens of high selling franchises that have entered the public consciousness: Mario, Zelda, Final Fantasy, GOW, Donkey Kong, Metroid, Resident Evil, Street Fighter, Mortal Kombat, Call of Duty, Guitar Hero / Rock Band, etc.
 
2012-07-31 11:51:09 AM
Sure consoles are going to die unless you look at how much they actually make, When games like call of duty are making 800 million plus in the first week people won't stop making them anytime soon.
 
2012-07-31 11:52:16 AM

Erix: Eh, not that worried about it. I'm a cheap bastard that hasn't had much time to play lately. So I'm always a generation or two behind in consoles. Whatever happens, I've still got an extra decade or so of gaming, even if they die off tomorrow.

/still plays N64


I still play PS2. Hell Madden 12 and NCAA 11 were released on it.
 
2012-07-31 11:55:20 AM
I can't play on consoles. Switched to PC (as such) after ColecoVision. I have an experience gap, and the controllers of modern consoles are useless in my grasp. never had and NES, or Sega, or anything. I had an N64 for a while in 2000 or so, couldn't do it. Joysticks are for fists, not thumbs. It was all I could do to train myself to use a stick with my left hand when PC games went 3D. That's still how I play today.

Old games on a fairly lame PC, with these as my tools for fun:

static.mercadoshops.com

img2.mlstatic.com
 
2012-07-31 11:55:32 AM
Dear Game Designers,
When I pay $60 for a game, I want the full game. I don't necessarily have time to run through 40 levels to unlock a certain car, or plane. Please stop. One more thing, can at least one person writing flight sims please pick up an RC airplane. The aileron and elevator controls belong on the right stick!
Sincerely,
DTN
 
2012-07-31 11:56:14 AM

HeartBurnKid: FirstNationalBastard: ....because Computer gamers keep deluding themselves into thinking they're not just a small, vocal, nerdy segment of gamers?

No, because console gamers keep deluding themselves into thinking they're not just a slightly-larger, equally-vocal, equally-nerdy segment of gamers.


HeartBurnKid: natmar_76: Yeah, the 20 million people who buy challenging Mario platformers and Call of Duty are all going to migrate to Angry Birds.

Angry Birds was downloaded 648 million times in 2011 alone. 200 million people play it in a single month.

This is what I'm talking about. You throw around 20 million like it's a big number, but it's not. Compared to the sheer number of people gaming, it's shiat, especially when you consider the extra time and money it takes to cater to us. PC gaming will survive, because there are practically no barriers to entry and it turns out that the hardware that's good for pushing polygons is pretty good at other things too (through CUDA and OpenCL). But consoles? Their time is rapidly fading.


Mario Kart for the Wii generated 1.4 billion in revenue.
 
2012-07-31 11:57:02 AM

Khellendros: And they're not expensive, compared to desktops or laptops capable of running modern games ($300ish).


When I bought mine, the PS3 was the cheapest, most full-featured Blu-Ray player on the market. Why would I buy a dedicated player when I can have a console that does much more?
 
2012-07-31 11:57:42 AM

natmar_76: Have you done the math, and realized that Angry Birds at 15 million sales or so is only about $40,000,000 net profit, while one blockbuster big budget title at 20 million sales is $600,000,000 profit? Did you research the that Rovio's total 2012 profit including merch was only $100,000,00, far less than even one of Nintendo's big titles much less their entire stable of releases in a single year? Then did you further realize that Rovio is the one anomaly in the mobile equation, and no one else even comes close to that, and then further even than that, that it means profitability in the mobile space is razor thin? Have you read how many mobile developers have gone under?


Rovio makes about $80 million dollars a year from their stupid Angry Birds franchise. Do you know how much it cost to develop that game? $140,000.

Call of Duty: Black Ops is the best selling video game of all time. It made over 1 billion (yes, $1,000,000,000) dollars. It took 2 years to develop, cost nearly 200 million dollars in development and marketing costs.

To put it succinctly:

Angry Birds: Paid 571 to 1 for Rovio.
Call of Duty: Black Ops Paid 5 to 1 for Activision.

It's actually worse than that for Activision, because it took them 2 years to develop so their cash was tied up.

Also, the numbers don't even tell the whole story. You're not thinking like a businessman or an investor - a big part of this equation here is risk. If you're running your business off these big numbers, all it takes is one flop and you're gone. Just look at what is happening to Take Two Interactive right now (parent company of Rockstar). They sunk 105 million dollars into Max Payne 3 and then just moved 440k units in the first month. Their share price has dropped from almost 16 dollars right before the release, to currently 9 dollars. They lost almost half of their valuation because of one flop.

Business investors are naturally risk averse. The current triple-A title model of gaming is about as risky as they come and you're going to see the shifting of investment funds away from it into mobiles just because the profit margins are freaking massive. With just the money that Take 2 lost on Max Payne, they could have seeded the development of dozens of mobile titles. What do you think their hit/miss ratio would have been on that? Hell, all it would take is one good game out of that to protect their investment and everything else would have been gravy.

This stuff is elementary, you just have to follow the money...
 
2012-07-31 11:57:46 AM

HeartBurnKid: natmar_76: Yeah, the 20 million people who buy challenging Mario platformers and Call of Duty are all going to migrate to Angry Birds.

Angry Birds was downloaded 648 million times in 2011 alone. 200 million people play it in a single month.

This is what I'm talking about. You throw around 20 million like it's a big number, but it's not. Compared to the sheer number of people gaming, it's shiat, especially when you consider the extra time and money it takes to cater to us. PC gaming will survive, because there are practically no barriers to entry and it turns out that the hardware that's good for pushing polygons is pretty good at other things too (through CUDA and OpenCL). But consoles? Their time is rapidly fading.


no. no, and nope.

the next gen consoles "xbox 360 part deux, PS4, WII U" will do ok and sell millions, and also integrated even more completely into a home entertainment device than the current ones do. games can still leap forward, and cell phones and PC's will not kill the market. Hell, the only reason this current gen has lasted so long is because games have plateued as to what can be done and it all looks fantastic - the next gen will look like PIXAR movies and will just be amazing.
 
2012-07-31 11:59:10 AM

rocky_howard: Yeah, but Angry Birds is the ONLY game having that numbers. It's the utmost example of mobile gaming. Not even close to what the average/media game does


Bejeweled, Plants Vs. Zombies, Cut the Rope, Fruit Ninja, Doodle Jump, Draw Something, Words With Friends... maybe not quite Angry Birds numbers, but enough to put traditional console games to shame.

Wear your blinders at your own peril. We are the niche, and we always have been. Publishers are starting to realize that.
 
2012-07-31 11:59:55 AM

meanmutton: Video game consoles are insanely cheap entertainment.


Depends on the game.

Some games I've played the absolute hell out of of, just like you. Skyrim, the GTA games, etc., each has given me hours and hours of entertainment. They end up amortizing out to less than $1/hour for the price of the game. Then there's some other games I've just not played much- they didn't really do it for me or they just didn't provide much play time... I've got some that I've basically paid $10/hour to play. Still cheaper than a casino, but that isn't saying much.

Any more that's how I look at games before I buy them- if it won't provide 20+ hours of playtime without resorting to online deathmatches, I'm not that interested.
 
2012-07-31 12:01:39 PM

TwistedFark: natmar_76: Have you done the math, and realized that Angry Birds at 15 million sales or so is only about $40,000,000 net profit, while one blockbuster big budget title at 20 million sales is $600,000,000 profit? Did you research the that Rovio's total 2012 profit including merch was only $100,000,00, far less than even one of Nintendo's big titles much less their entire stable of releases in a single year? Then did you further realize that Rovio is the one anomaly in the mobile equation, and no one else even comes close to that, and then further even than that, that it means profitability in the mobile space is razor thin? Have you read how many mobile developers have gone under?

Rovio makes about $80 million dollars a year from their stupid Angry Birds franchise. Do you know how much it cost to develop that game? $140,000.

Call of Duty: Black Ops is the best selling video game of all time. It made over 1 billion (yes, $1,000,000,000) dollars. It took 2 years to develop, cost nearly 200 million dollars in development and marketing costs.

To put it succinctly:

Angry Birds: Paid 571 to 1 for Rovio.
Call of Duty: Black Ops Paid 5 to 1 for Activision.

It's actually worse than that for Activision, because it took them 2 years to develop so their cash was tied up.

Also, the numbers don't even tell the whole story. You're not thinking like a businessman or an investor - a big part of this equation here is risk. If you're running your business off these big numbers, all it takes is one flop and you're gone. Just look at what is happening to Take Two Interactive right now (parent company of Rockstar). They sunk 105 million dollars into Max Payne 3 and then just moved 440k units in the first month. Their share price has dropped from almost 16 dollars right before the release, to currently 9 dollars. They lost almost half of their valuation because of one flop.

Business investors are naturally risk averse. The current triple-A title model of gaming is about as risky as ...


And still call of duty brought in a lot more money than angry birds. yes the ROI on angry birds is amazing but the total revenue isn't even close.

Call of duty - 1.5 billion
Mario kart - 1.4 billion
Angry Birds - 68 million
 
2012-07-31 12:02:15 PM

HeartBurnKid: rocky_howard: Yeah, but Angry Birds is the ONLY game having that numbers. It's the utmost example of mobile gaming. Not even close to what the average/media game does

Bejeweled, Plants Vs. Zombies, Cut the Rope, Fruit Ninja, Doodle Jump, Draw Something, Words With Friends... maybe not quite Angry Birds numbers, but enough to put traditional console games to shame.

Wear your blinders at your own peril. We are the niche, and we always have been. Publishers are starting to realize that.


Call of duty - 1.5 billion
Mario kart - 1.4 billion
Angry Birds - 68 million
 
2012-07-31 12:02:49 PM

Russky: HeartBurnKid: FirstNationalBastard: ....because Computer gamers keep deluding themselves into thinking they're not just a small, vocal, nerdy segment of gamers?

No, because console gamers keep deluding themselves into thinking they're not just a slightly-larger, equally-vocal, equally-nerdy segment of gamers.

HeartBurnKid: natmar_76: Yeah, the 20 million people who buy challenging Mario platformers and Call of Duty are all going to migrate to Angry Birds.

Angry Birds was downloaded 648 million times in 2011 alone. 200 million people play it in a single month.

This is what I'm talking about. You throw around 20 million like it's a big number, but it's not. Compared to the sheer number of people gaming, it's shiat, especially when you consider the extra time and money it takes to cater to us. PC gaming will survive, because there are practically no barriers to entry and it turns out that the hardware that's good for pushing polygons is pretty good at other things too (through CUDA and OpenCL). But consoles? Their time is rapidly fading.

Mario Kart for the Wii generated 1.4 billion in revenue.


Because Nintendo rightly recognized us as a niche and reached into that "Blue Ocean", as they called it. They were able to do that because those people weren't playing games. Now they are, and it's not on consoles. Like I said before:

HeartBurnKid: This last generation sold more consoles than ever before the smartphone and tablet booms. The people who kept the Wii on backorder for two years straight won't do the same with the Wii U; they have an iPhone and iPad to play games on now.

 
2012-07-31 12:04:32 PM

HeartBurnKid: Russky: HeartBurnKid: FirstNationalBastard: ....because Computer gamers keep deluding themselves into thinking they're not just a small, vocal, nerdy segment of gamers?

No, because console gamers keep deluding themselves into thinking they're not just a slightly-larger, equally-vocal, equally-nerdy segment of gamers.

HeartBurnKid: natmar_76: Yeah, the 20 million people who buy challenging Mario platformers and Call of Duty are all going to migrate to Angry Birds.

Angry Birds was downloaded 648 million times in 2011 alone. 200 million people play it in a single month.

This is what I'm talking about. You throw around 20 million like it's a big number, but it's not. Compared to the sheer number of people gaming, it's shiat, especially when you consider the extra time and money it takes to cater to us. PC gaming will survive, because there are practically no barriers to entry and it turns out that the hardware that's good for pushing polygons is pretty good at other things too (through CUDA and OpenCL). But consoles? Their time is rapidly fading.

Mario Kart for the Wii generated 1.4 billion in revenue.

Because Nintendo rightly recognized us as a niche and reached into that "Blue Ocean", as they called it. They were able to do that because those people weren't playing games. Now they are, and it's not on consoles. Like I said before:

HeartBurnKid: This last generation sold more consoles than ever before the smartphone and tablet booms. The people who kept the Wii on backorder for two years straight won't do the same with the Wii U; they have an iPhone and iPad to play games on now.


I don't know anyone that was a big call of duty gamer that suddenly stopped playing games on the big screen for something like angry birds.

Call of duty - 1.5 billion
Mario kart - 1.4 billion
Angry Birds - 68 million
 
2012-07-31 12:05:41 PM

Russky: HeartBurnKid: rocky_howard: Yeah, but Angry Birds is the ONLY game having that numbers. It's the utmost example of mobile gaming. Not even close to what the average/media game does

Bejeweled, Plants Vs. Zombies, Cut the Rope, Fruit Ninja, Doodle Jump, Draw Something, Words With Friends... maybe not quite Angry Birds numbers, but enough to put traditional console games to shame.

Wear your blinders at your own peril. We are the niche, and we always have been. Publishers are starting to realize that.

Call of duty - 1.5 billion
Mario kart - 1.4 billion
Angry Birds - 68 million


Those are great revenue figures. How much was profit?
 
2012-07-31 12:06:11 PM

HeartBurnKid: Russky: HeartBurnKid: FirstNationalBastard: ....because Computer gamers keep deluding themselves into thinking they're not just a small, vocal, nerdy segment of gamers?

No, because console gamers keep deluding themselves into thinking they're not just a slightly-larger, equally-vocal, equally-nerdy segment of gamers.

HeartBurnKid: natmar_76: Yeah, the 20 million people who buy challenging Mario platformers and Call of Duty are all going to migrate to Angry Birds.

Angry Birds was downloaded 648 million times in 2011 alone. 200 million people play it in a single month.

This is what I'm talking about. You throw around 20 million like it's a big number, but it's not. Compared to the sheer number of people gaming, it's shiat, especially when you consider the extra time and money it takes to cater to us. PC gaming will survive, because there are practically no barriers to entry and it turns out that the hardware that's good for pushing polygons is pretty good at other things too (through CUDA and OpenCL). But consoles? Their time is rapidly fading.

Mario Kart for the Wii generated 1.4 billion in revenue.

Because Nintendo rightly recognized us as a niche and reached into that "Blue Ocean", as they called it. They were able to do that because those people weren't playing games. Now they are, and it's not on consoles. Like I said before:

HeartBurnKid: This last generation sold more consoles than ever before the smartphone and tablet booms. The people who kept the Wii on backorder for two years straight won't do the same with the Wii U; they have an iPhone and iPad to play games on now.


GTA - 1.35 billion
Wii Play - 1.25 billion
Angry birds - 68 million
 
2012-07-31 12:06:38 PM

Russky: I don't know anyone that was a big call of duty gamer that suddenly stopped playing games on the big screen for something like angry birds.


And the point flies right over your head, too.
 
2012-07-31 12:08:00 PM

Russky: And still call of duty brought in a lot more money than angry birds. yes the ROI on angry birds is amazing but the total revenue isn't even close.

Call of duty - 1.5 billion
Mario kart - 1.4 billion
Angry Birds - 68 million


You're missing the point. You can tie up 200 million bucks of capital on a single shot that may pay 5 or 6 to 1, or you can diversify that capital across 20 different games that could potentially pay 100 or 200 or 300 to 1. The pure massive size of the market is sheltering all the risk of your investment.

Publishers are not going to continue to eat that much risk. Game budgets are going to come down and they're going to be looking to pick up the profits in volume through larger markets.
 
2012-07-31 12:08:43 PM
Hey, does anyone know how much revenue Mario Kart generated?
 
2012-07-31 12:09:21 PM

TwistedFark: You're missing the point.


Russky sounds like a bad gambler.
 
2012-07-31 12:10:08 PM

HeartBurnKid: Those are great revenue figures. How much was profit?


Do you think an investor would care more that your game is making 1m right now at 100k cost or will make 1m over 10 years at 10k cost? It's nice that Angry Birds was a massive success, but mobile takeover of console markets just isn't going to happen.
 
2012-07-31 12:10:50 PM

HeartBurnKid: Russky: HeartBurnKid: rocky_howard: Yeah, but Angry Birds is the ONLY game having that numbers. It's the utmost example of mobile gaming. Not even close to what the average/media game does

Bejeweled, Plants Vs. Zombies, Cut the Rope, Fruit Ninja, Doodle Jump, Draw Something, Words With Friends... maybe not quite Angry Birds numbers, but enough to put traditional console games to shame.

Wear your blinders at your own peril. We are the niche, and we always have been. Publishers are starting to realize that.

Call of duty - 1.5 billion
Mario kart - 1.4 billion
Angry Birds - 68 million

Those are great revenue figures. How much was profit?


Still significantly better than Angry Birds. You've read to many articles that have mistaken ROI for total profit and not been able to separate the two.

No one is arguing that Angry Birds has a great ROI, probably one of the best ever, but that isn't the same as total revenue/profit.
 
2012-07-31 12:12:06 PM

TwistedFark: Russky: And still call of duty brought in a lot more money than angry birds. yes the ROI on angry birds is amazing but the total revenue isn't even close.

Call of duty - 1.5 billion
Mario kart - 1.4 billion
Angry Birds - 68 million

You're missing the point. You can tie up 200 million bucks of capital on a single shot that may pay 5 or 6 to 1, or you can diversify that capital across 20 different games that could potentially pay 100 or 200 or 300 to 1. The pure massive size of the market is sheltering all the risk of your investment.

Publishers are not going to continue to eat that much risk. Game budgets are going to come down and they're going to be looking to pick up the profits in volume through larger markets.


Games have a higher ROI than movies, why would they stop making games?
 
2012-07-31 12:12:21 PM

HeartBurnKid: Angry Birds was downloaded 648 million times in 2011 alone. 200 million people play it in a single month.

This is what I'm talking about. You throw around 20 million like it's a big number, but it's not. Compared to the sheer number of people gaming, it's shiat, especially when you consider the extra time and money it takes to cater to us. PC gaming will survive, because there are practically no barriers to entry and it turns out that the hardware that's good for pushing polygons is pretty good at other things too (through CUDA and OpenCL). But consoles? Their time is rapidly fading.


Downloaded... for free. Only a small number of those people actually buy Angry Birds.

http://techcrunch.com/2012/05/07/rovios-big-year-angry-birds-helps-ga m ing-company-soar-to-106m-in-sales648m-downloads/

They only made $65 million last year. That's just a fraction of the profits of ONE of Nintendo's big titles last year, much less every big title in the core industry. And that's just the one big name in mobile. There are few others that approach even that much.

Again, mobile co-exists. It's nice for a few small companies. It's not a threat to "core" gaming, which is why Nintendo is refocusing on core gamers with the Wii U, where the big money is at.
 
2012-07-31 12:13:10 PM

sprawl15: TwistedFark: You're missing the point.

Russky sounds like a bad gambler.


Maybe but call of duty made more profit than Avatar so do you really think people will stop making games? Really?
 
2012-07-31 12:13:11 PM

TwistedFark: natmar_76: Have you done the math, and realized that Angry Birds at 15 million sales or so is only about $40,000,000 net profit, while one blockbuster big budget title at 20 million sales is $600,000,000 profit? Did you research the that Rovio's total 2012 profit including merch was only $100,000,00, far less than even one of Nintendo's big titles much less their entire stable of releases in a single year? Then did you further realize that Rovio is the one anomaly in the mobile equation, and no one else even comes close to that, and then further even than that, that it means profitability in the mobile space is razor thin? Have you read how many mobile developers have gone under?

Rovio makes about $80 million dollars a year from their stupid Angry Birds franchise. Do you know how much it cost to develop that game? $140,000.

Call of Duty: Black Ops is the best selling video game of all time. It made over 1 billion (yes, $1,000,000,000) dollars. It took 2 years to develop, cost nearly 200 million dollars in development and marketing costs.

To put it succinctly:

Angry Birds: Paid 571 to 1 for Rovio.
Call of Duty: Black Ops Paid 5 to 1 for Activision.


And whether every number you put here is correct or not, it's fairly irrelevant. They're not the same market. A person with X hours per week to game who buys Angry Birds for entertainment is not the same market as the person who buys Max Payne, Oblivion, or Halo Reach. True, a few low-risk developers will move from one to the other (and shrink, because their revenues will tank and won't be able to support a large enterprise), but there will still be a large demand for more grand titles - and they're willing to pay $60 or $70 for them.

You're talking about operating margin and supply, but you're forgetting the demand side. No matter the initial investment, video game companies know they can sell millions of units at $60 a pop. Yes it's risky, but companies aren't slowing down on game development, they're doubling down. The payoff is too great if you create the next Bioshock or Assassin's Creed not to try. Angry Birds and Fruit Ninja just don't do that.
 
2012-07-31 12:14:38 PM

HeartBurnKid: Russky: I don't know anyone that was a big call of duty gamer that suddenly stopped playing games on the big screen for something like angry birds.

And the point flies right over your head, too.


Ever wonder how it's possible to share a planet with people who ostensibly speak the exact same language as you and they can't even comprehend a relatively simple concept like this?
 
2012-07-31 12:17:04 PM

Russky: Games have a higher ROI than movies, why would they stop making games?


And if TwistedFark's perceived ability to understand investors is correct, why are they still making movies?

There shouldn't have been any movies made since the PS2, because investors made the smart bet of putting their money in game development.
 
2012-07-31 12:17:39 PM
Apparently

TwistedFark: You're missing the point. You can tie up 200 million bucks of capital on a single shot that may pay 5 or 6 to 1, or you can diversify that capital across 20 different games that could potentially pay 100 or 200 or 300 to 1. The pure massive size of the market is sheltering all the risk of your investment.

Publishers are not going to continue to eat that much risk. Game budgets are going to come down and they're going to be looking to pick up the profits in volume through larger markets.


Except the number of developers who actually make it as big as Angry Birds is... zero, exactly zero. A couple of others come close, but other than that it's the anomaly, not the standard. There are just as many developers who have bankrupted themselves on iPhone as there are on the consoles, more in fact because the business model "seems" inviting and invites small developers with limited resources, when in fact it is as brutal as any other proposition in the gaming industry.
 
2012-07-31 12:18:35 PM

natmar_76: Apparently TwistedFark: You're missing the point. You can tie up 200 million bucks of capital on a single shot that may pay 5 or 6 to 1, or you can diversify that capital across 20 different games that could potentially pay 100 or 200 or 300 to 1. The pure massive size of the market is sheltering all the risk of your investment.

Publishers are not going to continue to eat that much risk. Game budgets are going to come down and they're going to be looking to pick up the profits in volume through larger markets.

Except the number of developers who actually make it as big as Angry Birds is... zero, exactly zero. A couple of others come close, but other than that it's the anomaly, not the standard. There are just as many developers who have bankrupted themselves on iPhone as there are on the consoles, more in fact because the business model "seems" inviting and invites small developers with limited resources, when in fact it is as brutal as any other proposition in the gaming industry.


Don't let facts get in the way of talking with these fools. Seriously don't waste your time, ROI is great but total profit means more.
 
2012-07-31 12:20:07 PM

Slaves2Darkness:
Maybe it is just me, but "gaming" on a tablet or smart phone sucks donkey balls.


A coworker recently showed me a shooter game on his iPad3. Graphics were nice (really nice, I thought, for a tablet), gameplay was fluid. It looked kinda fun. The thing is, though, is that it uses touch screen controls. That's hardly shocking considering touchscreens are a big deal feature of tablets. Personally, I hate touch screen controls for games. My hands block the images on the screen. My fat fingers miss the "sweet spots" when I'm aiming or trying to direct movement or I press multiple buttons/zones at once.
 
2012-07-31 12:20:16 PM

impaler: Russky: Games have a higher ROI than movies, why would they stop making games?

And if TwistedFark's perceived ability to understand investors is correct, why are they still making movies?

There shouldn't have been any movies made since the PS2, because investors made the smart bet of putting their money in game development.


They wouldn't be making them, hence why he's a fool.
 
2012-07-31 12:21:41 PM

Khellendros: You're talking about operating margin and supply, but you're forgetting the demand side.


Actually no, I'm taking it as an established fact that the demand side of this equation is freaking huge.

250 million people play Zynga games on Facebook. That's retarded.

Also I'm not postulating that they will abandon entire platforms, but what I am saying is that they are going to reduce investment in them over the long run. That 200 million dollar budget will drop to 100 million and then 50 million. They'll still charge you $60 dollars a unit (so don't worry about that) but rather than expanding budgets, they'll contract them.

Someone brought up movies - that's a good example. Film companies use complicated webs of insurance and tax write offs to hedge their risk. Without these facilities, the movie industry as it currently stands couldn't operate.
 
2012-07-31 12:22:45 PM

Russky: Still significantly better than Angry Birds. You've read to many articles that have mistaken ROI for total profit and not been able to separate the two.

No one is arguing that Angry Birds has a great ROI, probably one of the best ever, but that isn't the same as total revenue/profit.


No, it's not. ROI is more important.

I give you the chance to buy 10 bonds, each worth $1, that will return $2 in 30 days. Or, you can buy a bond worth $10, that will return $15 in 30 days. Obviously, the revenue you'll get in 30 days is greater with the $10. Even the profit margin is greater with the $10. But which would you buy?
 
2012-07-31 12:26:19 PM
Shovelware: It's already here. Go check out the Xbox Live "Indie" section. It's possible to provide your users mountains of questionable content, showcase the gems and still keep it cordoned off. It's never going to be "1982 for Atari" again.

The rest of his points are mostly ignorant or misinformed. It's almost like the author doesn't know anything about consoles, but was willing to take a go at them with peripheral issues.

Consoles are expensive single use devices with a built-in time to be junked.

Here's where he craters the entire article and tips his hand. My Xbox 360 is the centerpiece of my entire home theater. Games, DVDs, Netflix, Hulu, Zune, Pandora, Media Center for all PCs and NAS ... c'mon it does everything. It's like this guy has never seen one before. The 360 launched back in 2005 -- that gives the device a longer lifetime than any previous console generation. Over-the-air software updates can extend that "built-in" expiration time for years.
 
2012-07-31 12:26:24 PM

HeartBurnKid: Russky: Still significantly better than Angry Birds. You've read to many articles that have mistaken ROI for total profit and not been able to separate the two.

No one is arguing that Angry Birds has a great ROI, probably one of the best ever, but that isn't the same as total revenue/profit.

No, it's not. ROI is more important.

I give you the chance to buy 10 bonds, each worth $1, that will return $2 in 30 days. Or, you can buy a bond worth $10, that will return $15 in 30 days. Obviously, the revenue you'll get in 30 days is greater with the $10. Even the profit margin is greater with the $10. But which would you buy?


If i said here you can have $40 million in profit from Angry Birds or 1 Billion from Call of Duty which would you take?
 
2012-07-31 12:27:43 PM

The Homer Tax: Shrugging Atlas: Why would you buy a game new at full price? Wait a month or less now and the prices start dropping. Christ I bought Assassin's Creed: Revelations for $9.99 new off the shelf at Best Buy.

Wait years and borrow them from your friends for free! I just finished Arkham Asylum last week.

Tried to play the original Assassins Creed and thought it sucked balls. Is Revelations or any of the other sequels any better? The originial was repetitive and boring to me.


Skip the original at all costs! It's horrible in it's own right, and probably more so now that it's dated. Go straight to AC2. It's barely even the same game, and the chracter and events of one have almost no bearing on anything until Revelations and even then you'll be fine without playing 1.

As for Revelations, I haven't had much of a chance to get into it, but it seems worth the 10 bucks I paid. I thought AC2 was good, and the sequel (Brotherhood) was even better.
 
2012-07-31 12:28:08 PM

Doublespeak: HeartBurnKid: Russky: Still significantly better than Angry Birds. You've read to many articles that have mistaken ROI for total profit and not been able to separate the two.

No one is arguing that Angry Birds has a great ROI, probably one of the best ever, but that isn't the same as total revenue/profit.

No, it's not. ROI is more important.

I give you the chance to buy 10 bonds, each worth $1, that will return $2 in 30 days. Or, you can buy a bond worth $10, that will return $15 in 30 days. Obviously, the revenue you'll get in 30 days is greater with the $10. Even the profit margin is greater with the $10. But which would you buy?

If i said here you can have $40 million in profit from Angry Birds or 1 Billion from Call of Duty which would you take?


If I can make 100 games like Angry Birds for the price of 1 Call of Duty, I'll take the Angry Birds.
 
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