So of those ~40 though, how many were the traditional million-selling, third-party franchises? I was under the impression that the core referred to successful third-party Wii games as shovelware because it was stuff like Boom Blox or even Just Dance, rather than "real" games like BattleDuty and AssCreed.
Lot of Dance/Music. Also a lot of LEGO, Cooking Mama, Toys to life, Fitness. Some of those more core franchises are in there too, but definitely not dominant like on the other boxes.
So does that mean any Kinect and Move hardware that included software was being tallied as software rather than accessories?
Oddly, no it was not. I think Guitar Hero was such an oddity at first that it was just counted in Software because they didn't know what else to do with it. Then it blew up almost overnight and it stayed in Software.
In that case, will PSVR headsets then counted as software revenue, assuming they're bundled with some?
No idea. I'm curious on this one myself.
So in your considered opinion, would retail be on board with that pricing strategy, or do you think it would be more likely that they'd demand a little cut for themselves?
This is an interesting question. Depends on what cut of software retail can expect. Hardware is sold at very slim margins at retail in the hopes of pulling software and its better margins with it. The Vita was hurt at retail because of this issue. So, I'm not sure. Could be that VR is so "hot" that retail wants to carry it for cachet alone? Will they want a bigger cut as compared to the normal HW margins? It's a great question.
Wow, that's kinda crazy. The "DS family" sold like 155M units. I'm really surprised it didn't have more of an effect.
NDS/3DS certainly did have a big impact, and absolutely made for sales to be bigger, however the trend (shown in the curve) wasn't very different than the Console trend. It's just hard to see because I hid the Y axis markings.
I guess my main point is that handhelds and probably rhythm games have gone away and aren't coming back, so to include them in any talks of "rebuilding former glory" strikes me as a bit foolhardy.
Of course I'm not saying that more releases means we can get back to 2008 Packaged sales levels. That'd be ridiculous, those are all outlier years. And I don't think I've ever uttered the phrase you're quoting, where have I ever said something like that?
Dance/Music and the Wii were outliers. By looking at the long-term mean, you're effectively removing the outliers. It's doing exactly what you're saying to do.
Now, we are under the long-term mean, and since 97% of variability in sales can be explained by changes in packaged release count, it is reasonable to then conclude that the market would be accepting of a few more Packaged releases, which would raise Packaged sales back to long-term mean levels.
If we're agreed that handhelds aren't coming back, then why are we including them in our analysis?
The trends and findings don't really change with or without the HH data. Taking the HH data out doesn't change the conclusions.
If we're going to talk about what we can do to grow the market
But the stuff I've thrown out there really has nothing to do with hypothetical on growing the market. Y'all can have that conversation if you want.
Anyway, I guess we're just still focused on different things, for whatever reasons.
I'm just looking at a data set and interpreting it.
So basically, you think there aren't "enough" games being released at retail these days
No. I'm saying that 97% of the variability in Packaged sales from year to year over the past 7 years can be explained by the change in release count. That's what the math says.
So you think retail is being underserved at the supply end?
Not really. What I'm saying is that sales of Packaged software would likely increase with an increase in release count. That's all.
Do you disagree that smaller games have been shifting to digital-only or digital-first distribution
I absolutely disagree with this. Because smaller games never were Packaged to begin with. The XBL/PSN/STEAM revolution of small digital only games are new and exist only because of digital distribution. So, there's no shift there. If digital wasn't a thing, these games likely would not exist.
Let's try coming at this a different way. Of our 2M digital Star Wars buyers, how many would you estimate were incremental buyers, and how many substitutional?
I don't know what the buyers of one particular game would do. Variability in digital adoption from game to game can swing dramatically.
I'm saying, across all titles released, over the course of each product's life in market, digital sales are more incremental than substitute.
Why are you assuming that consumer behavior on launch day is the same as consumer behavior a year after launch?
When I say a game might find more success by skipping physical release, I'm talking about games like Yakuza 5.
But a game like Yakuza 5 would not be released at all if it were not for digital. So why is that in the mix for the discussion?
If we're talking about games skipping a packaged release, why are we talking about games that had no chance of a packaged release to begin with? What's the point in that?
So, $PUBLISHER can price their digital offering at $40 and net the same money as a $60 physical release, yet they price the digital release at $60 anyway.
This depends on who owns the distribution platform. Let's say 3rd party publisher, does not own its own distribution platform. It sells a game for $60 Digitally and Packaged.
Digitally, that publisher has to give $18 to the distribution platform holder. At retail, margins vary but it's around $15-$18. No savings. You save a couple bucks on the disc and shipping. Sure, you get some other savings depending on how your accounting works for things like trade marketing (which can hit the Packaged P&L but not the Digital), but the true savings are minimal.
If you own your own distribution platform its different. You can pocket that $18. That's why Origin exists.
I would imagine that $RETAILER may not be too pleased if the more convenient option also had a significant price advantage, so I would also imagine that there exists non-insignificant pressure from $RETAILER upon $PUBLISHER to keep digital prices near MSRP, allowing $RETAILER a fair chance to compete.
Sure.
Would you agree that this is likely to be another situation where the conventional wisdom is off target, at least when it comes to the ultimate cause of digital prices?
Different publishers have different philosophies when it comes to Digital. There's no one size fits all thing here. Retail pressure is a significant factor, like you point out. But there's also some "ARPU maximization" from the pub side going on.
Well, I'm saying that digital sales are both incremental and substitutional.
Of course there is substitution happening. But the data suggests that the advent of digital distribution has resulted in a net benefit for the sales potential of a game.
Miscommunication. lol When I say a "fuckton" of additional sales, I mean, "far too many to be chalked up almost entirely to incremental growth."
Why are you adding an implication that "incremental" means insignificant? Incremental just means more. It can be a little more, or a lot more. It's just more, on top of the normal demand.
When you say "substitution is meaningless within the data," I hear, "Like, 99.99% of those two million sales wouldn't have existed at all if not for the digital option."
Ugh. Of course not. "Meaningless" as in this behavior is represented in the data. It's normalized. Substitution and incremental sales are mixed in and the result is a net increase in size of the sales pie.
I don't need to know the very specific minutia within the data set to understand the overall trends.
Oh, I'd certainly agree with that, and indeed, I thought that's what I'd been arguing for.
Yeah, I can see that, but I think you're trying to take some statements I made about this one, very small, decreasing in importance every month, somewhat archaic, slice of the market and applying it to everything in gaming for now and the future.
Of course not every game needs a packaged release. Of course indie games shouldn't come on disc. Those types of games should not even be in the evoked set when talking about the Packaged market.
