sorry, i should have clarified that i really meant more services like steam in the future.
Well, unless I missed something, Steam don't stream games either.
well i agree. but i think that handhelds have more in common with consoles due to their shared history and the way consumers interacted with them for 35+ years.
And again, I would argue that it turned out that's where they differed
most, and it turned out handhelds had far more overlap with smartphones when it came to interactivity and general use case.
Might be for games too if they can find a way around those pesky laws of physics in the natural world or increase the speed of light somehow. Until then, streaming for gaming is DOA.
Yup. Like I said, there's a future for streaming, but I don't think it's in usurping local execution for applications like "core" games. Yes, some stuff can be streamed without significant penalty, but there's still a lot of stuff that can't, and some stuff that probably never will be.
Long story short, if more Packaged games were made total Packaged sales would rise, data suggests to me that Digital Distribution may be more incremental than substitute.
What data in particular?
Packaged SW has definitely been in decline. I believe that may have bottomed out as I'm predicting slight growth in 2015 (could be wrong). But as this Packaged Spend chart shows (where I've messed with the left axis so the bottom line is not 0), yeah. Definitely a decline.
Not to pick nits, but again, does this include handheld software? It's hard to determine the health of console software if it's mixed in with a bunch of unrelated data. Just looking at the chart, I see an unprecedented explosion in the number of titles published 2007-11, and after that, it seems to drop back to "normal" levels. I've no idea what accounted for that 4-year bubble, but it appears to have popped. My guess would be that it was composed primarily of handheld and third-party Wii software though, and as we know, those audiences have largely fled to mobile.
If we look back to 2002 a couple of years after the PS2 launched we can see that retail releases are down by "some amount." Since your chart isn't labeled, it's hard for me to say how much it's down by, but I would guess the drop would be attributed to the loss of handheld publications coupled with mid-tier games moving to strictly digital distribution to reduce risk and increase profitability. So even if we're only getting the same number of console games as the height of the PS2 era, I would argue that transitioning the smaller releases from retail to digital has made the industry more healthy rather than less so. Sucks for GameStop though, I guess.
Given how little anyone knows about it, making any assumptions on the NX is pure speculation. No one has any idea what's really going to happen with it.
I thought I explained it fairly clearly
=/ When Madden comes to NX, that doesn't increase software variety. We already have Madden. When Mario Kart comes to NX, that doesn't increase software variety either, because Nintendo currently make games. Their continued existence isn't something "new."
I suppose this begs the question though
How does the above chart handle multi-platform releases? There was an unusually high number of those last generation as well, which can further instill a false sense of variety with the reader. When FFXIII went multi-platform in Gen7, the XBox version didn't really increase the variety of software available versus Gen6, but it might be being tracked as a distinct release, helping to create that weird peak in the data.
A few incorrect assumptions here:
- Increased variety with smaller titles won't come from packaged
- Even digital games have goals, so "magic numbers" still definitely need to be hit
- Distribution costs are hardly astronomical. They barely register in fact because...
- Once you apply the 30% cut digital first parties take, per unit margin are not as different between packaged and digital as you might assume (unless you own your own distribution platform). You're just shifting the costs around
Nope, just more miscommunication! lol
- Yes, as I explained in the bit you quoted, digital is far better poised to deliver small games. As I've also explained, I've no ties to packaged software emotional or otherwise so when your rebuttal is, "But that doesn't help packaged," my response is still, "Okay? =/"
- Sure, I said they needed to feed the devs. They also need to keep the lights on, license game engines, etc, etc, etc. The point is, if you distribute physically, that's additional money you need to produce up front, on top of all of the unavoidable costs. So a physical release costing X means you need to sell Y additional copies before you break even, on top of whatever you need to sell to feed everybody. When your distribution costs are $0, you don't need to sell any extra copies. That means you can target a smaller, more niche audience, and still find success.
- They're also hardly insignificant, especially when you're talking about small titles intended to increase variety. Variety doesn't come from blockbusters; they're lowest-common-denominator, paint-by-numbers affairs by definition.
- Actually, in the link you were so kind to provide, the dude said EA's margins on digital copies were double their physical margins. So even if the entire market shrinks by half as a result of the transition to digital and I've no idea why that would happen in the first place their profits will be equally high, and their investments will be lower. That sounds pretty good for them, and by extension, for me, since they're making the shit I'm hoping to buy someday, so I win when they're healthy. When you only need to sell half as many copies to break even, you can take more risks and/or appeal to smaller audiences, which means more variety for me. (Yes, that's an oversimplification, but I hope you see my point.)
Thanks. <3 A couple of notes: He said digital was 20% of total console sales on "full game" releases, which means that the digital sales would be 25% of whatever gets reported for physical. Also, he expects digital downloads to become 40% of total sales over the next 3-4 years. That sounds to me much more substitutional than incremental, if I'm understanding your terminology correctly.
Oh, regional splits might be something to consider as well. Isn't EU fairly digital-shy?
My focus was right where I wanted it to be. To go back to your tree analogy, you can't look at a forest, see it's changing, and make broad assumptions without going down and looking at some trees.
Fair enough. It just seemed like you were really focused on some old, sickly trees, and were unconsoled by the fact that the new growth seemed to be doing fairly well.
I was taking a narrow focus on packaged because I wanted to take a narrow focus on packaged to see what is happening.
I can understand that, but I'd still argue it's difficult for you to truly understand what's happening if you consider the underlying causes to be largely irrelevant. When you say, "Well, we're not looking at digital right now," and then are left wondering where all of the games and users went, "Lack of interest" becomes the only "logical" explanation. Anyway, *bro-hug*.
You are an extreme outlier (many people on GAF are) and the lifeblood of the Core gaming market. The strong majority of the mass consumer audience with a PS4 doesn't even know what Disgaea is. Hell, most people in publishing don't know what Disgaea is.
Right. I just didn't know how many of us outliers also comprise the avant garde of digital adoption. Joe DualShock doesn't buy Disgaea. Is he also not buying games digitally? Of the 2M gamers who buy Fallout digitally, might 1% of them also buy Disgaea digitally, giving it a really healthy digital split? What's the Venn diagram of Disgaea buyers and digital buyers? Bah, I can't seem to explain this concept very well.
Sorry, should have been more clear. "Irrelevant" in terms that the drivers of baseline demand are incorporated already into a normal demand curve, outside of supply constraints, and that small fluctuations in those factors impacting baseline demand may not be a significant factor when determining drivers of change in that demand curve.
Basically, the advent of Digital Distribution can either be considered a substitute to existing packaged demand (1 sale digitally means 1 less sale packaged) or could provide incremental sales, meaning, the convenience of digital provides more opportunities for sale than packaged alone (1 sale digitally is a more likely a new, incremental sale to the pie).
And because, despite the growth in digital distribution, Packaged SW sales still correlate at a very high level with release count, I'm more of the opinion that Digital Distribution has been more incremental than substitute.
But maybe there's more than one type of substitution going on here. Yes, a digital copy of BLOPS substitutes for a physical copy, but you also have digital substituting
entirely for physical, where games simply skip physical release altogether. Again, that's especially appealing for smaller titles with smaller audiences, so it's no surprise that the "only" games left at retail are BLOPS, AssCreed, and Madden; they're the only games guaranteed to sell billions of copies.
If release count and sales were not correlated, or if that correlation was worsening, I'd probably be leaning more towards "shift" to digital. But, in fact, the data suggests to me it's growth opportunity.
Sorry, I'm not sure what you mean here.
My position is that the decline in Packaged release count is not a problem driven by consumer demand. Rather, it's a problem driven from the supply side. Development costs have grown, raising the risk profile of making big games, we get fewer big packaged games as a result, which then results in lower packaged sales, rinse and repeat. Snake eating the tail. And then we get the misguided "consoles are doomed" rhetoric.
Hmm. Seems like we don't entirely disagree. I agree it's more supply-side driven, but I see the migration of smaller games to digital-only as more of a natural and positive progression, I guess. Not so much snakes eating their tales as people abandoning the rivers for the Interstates. But hey, even in the 21st century, if you need to move a barge-load of stuff, rivers can be a good option, especially in places where they don't have very good roads yet.
Don't let HW sway you. Those guys are doing really well despite some HW challenges.
Yeah, that was kinda my point, actually. lol Their hardware sales can paint an unnecessarily grim picture, since their business is actually fairly healthy, despite the low hardware sales. Nintendo don't hit it out of the park every generation just most but they certainly know how to run their business.
Definitely not the case. Publishers get detailed sell-through information from every retailer on a much more consistent basis. NPD is more of a "how to we stack up against the competition" thing.
Interesting. I knew they'd get feedback from retail, but I actually thought NPD served as sort of an independent auditor.
Well, you still want to see general trends. And the investment community uses it a lot. I mean it's still very important. Just not what it used to be.
Gotcha. Thanks for the insight. <3
Heh to be fair this is mostly one of those examples where the retailer's interest and the interests of the consumer that likes physical games align.
