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Duke Nukem co-creator George Broussard was quoted as saying "The PS Vita launch feels like the last dinosaur showing up to a mammal convention." As a person who works in entertainment (TV) this rings very true to me. Entertainment markets are going through an upheaval that is going to dramatically change their business models in the coming decade or two (only so slowly because they are resisting so hard). The old business models are being disrupted by new technology.
The internet and the compressed audio file upended the music business. Record labels had been warned repeatedly, there are plenty of stories of young executives urging the business to move in and define the market, but because internet distribution would directly impact compact disc sales and their ability to "print money' (Miyamoto and Iwata style) it was resisted. Cue the rise of napster, the advent of internet piracy, and Apple being the only business to step in with a concrete plan to make online music sales painless and profitable.
Television and Film ignored the plight of the record industry, because download limits and speeds, and video compression formats pretty much guaranteed that video piracy would remain niche short-term. Today, however, we have massive amounts of people watching unrestricted HD content the day it is released all around the world, whilst the TV stations and cinemas are seeing lower and lower viewer numbers. Television used to have an easy monopoly - if you wanted to watch programmes, you had to watch TV. Now, with PVRs and time-shifting and bit torrent downloads, why would I ever watch another network commercial? These programmes are paid for by advertising and merchandise sales - but as the advertising revenue dries up due to lack of viewers, where does the market go then?
The video game market is seeing a similar shift, particularly in handhelds (home consoles, you are safe for now, but don't get complacent!) This article outlines precisely a big part of the issue - in Australia (where I'm from) I can get a 3DS or PS Vita game for $69.99 - $89.99, but similar (or sometimes the same game) can be purchased on iOS or Android for $5. Other than physical controls, what justifies the extreme disparity between these, particularly when the handheld console is actually a slight inconvenience to have on my person, whereas my phone goes with me wherever I am? Sony missing the opportunity for convergence is something I wrote about recently. More frustrating when talking about price is the mark up we pay in Australia. Despite our very strong dollar, a new Xbox 360 or PS3 game title is $119.99, whereas in the USA the same game (often identical due to increasing indifference about region locking) is $59.99. Video games are risking pricing themselves out of having a market, and the industry should be concerned.
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This article claims to have all the answers for a strong WiiU launch for Nintendo, and I think it is a mixed bag.
- Start off with a bang. Agree - this is incredibly important. 3DS suffered due to lack of software (the price was arguably a secondary concern). Once the dry spell ended, 3DS sales took off. GameCube suffered similarly. A few (at least two) good core titles would guarantee day one sales, especially if Mario is present. Zelda would blow everyone away, but making a new Zelda game this close to the release of Skyward Sword is unrealistic given the usual development cycle for console Legend of Zelda titles.
- Know its audience. I thought this was going to offer advice leaning towards making sure there were more core experiences but it actually leaned the other way, arguing the case for attracting the casual audience. Whilst I agree that the casual audience is extremely important and will sell hardware, there has been evidence that the core audience software attach rates are extremely low, these are people who buy a Wii for WiiFit, then purchase maybe one or two other titles. This does not make a market for software, only for hardware. A smaller, cheaper Wii with WiiFit embedded as the only software and a Fit Board would have arguably done just as well in the market, and would have had just as much impact on software sales (with the exception of 3rd party fitness titles, and rhythm dance games). If Nintendo want to keep making games for the casual market then that is good, but make sure there is incentive for core players in the same software. WiiSports with online, leader boards, and additional competitive modes would not have hurt the casual experience.
- Get online right. No-brainer. I hate online gaming, but be damned if everyone I know doesn't love it. Heck, I have an Xbox Live Gold account I pay for and rarely use, because if people want to play games with me it will be online. Nintendo have been traditionally weak with software (firmware) and they really need to repair that image. 3DS looks like it is taking good steps in this department, but more needs to be done.
- Share the spotlight. This is in reference to third party developers having a hard time getting traction on Nintendo systems. The tone, however, implies that Nintendo cripples them in some way, to ensure their own success. Whilst this was certainly true in the N64 generation (I'm sure a lot of devs and gamers alike are shaking their fists) Nintendo worked hard to turn this around with the GameCube. GCN struggled with a 'kiddy' image due to the whimsical and friendly look of the console itself (and that cute little carry handle!) Third party devs produced a fair few mature titles for the console, some of which did very well, but it was a problem with image all around. Nintendo made no effort to advertise 3rd party games in any meaningful way, they promised online and then decided it was too much bother (just as online was taking off, look at Halo 2). They also disappointed the core crowd (see above) with Zelda: Wind Waker, cementing in the gaming industry's mind that Nintendo were 'all about the kids', despite Wind Waker being a brilliant game and an achievement. With the Wii, the opposite happened. 3rd party games were junk. As a core gamer I saw little to like. I was offended that a port of Resident Evil 4 was among the best looking games on the platform for a number of years. Nintendo focused on the new casual audience and hoped that third parties would pick up the slack; the reality was a slew of terrible PS2 ports and barely playable half attempts at games (everyone is looking at you, Red Steel). Nintendo have tried sharing the spotlight, the problem is that no-one came in to fill the gap.
- Let players keep their games. This is just about transferring Virtual Console games to WiiU. This is a definite must.
The 'things Nintendo should not do' list was considerably shorter.
- Focus on gimmicks. Nintendo should be careful not to be seen as gimmicky. They have been walking a fine line here since the release of the DS.
- Alienate the hardcore. Ties in with what I said above regarding 'knowing their audience'.
- Ignore other forms of entertainment. This is a must, but the article here refers directly to DVD and Blu-Ray, and I don't believe either of those to be relevant. Nintendo need to make sure they support streaming media - YouTube, Hulu, Netflix, BBC and ABC streaming players - these are where content delivery will be happening and will grow exponentially as newer and better services are added.
I could probably write an article about what Nintendo need to do with WiiU, but that's for another day I think.
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Finally, this bit from Volition design director Jameson Durall discussing his opinion of the rumours that the next Xbox console will block out used games. This is the sort of old-fashioned thinking that will do damage to the video game industry. Pre owned games are a huge market, and a massive profit machine for companies like EB Games and GameStop. The issue is that these games are physical units - when I sell someone a game I owned, or trade it in, I no longer have it. If I get a cabinet and decide to sell it for whatever reason, the cabinet maker is not making it incompatible with anyone else's house.
The looming shift to digital distribution as a primary game source is going to largely prevent this anyway, as game licences will be locked to your user account. This is a model that can work, certainly. Look at the PC software market - in some cases your license is transferrable, in other cases it is not. The approach taken has to be balanced. A look at Apple's Mac App Store shows a model where it works - apps are distributed digitally with a DRM protection that locks the software to your user account. To mitigate collateral damage the software is generally priced much more cheaply - recently Apple shifted their Logic audio editing studio to the Mac App Store, and the software went from $800 to $200. Lowering the burden of entry makes this locked system more palatable. If I could download an Xbox 360 game in a restricted form for $50 versus the retail one for $120, I wouldn't hesitate to buy the digital version, and I'm sure a heck of a lot of other people would buy into the digital version too - even knowing that there was no way to recoup the money. Leave the retail versions as they are, unrestricted and free, and watch as digital acquisition moves from niche to gold standard.
Sweeten the deal further. Make it so licenses can be transferred to other people - even at a dodgy cost of $5 or less and you've got a second hand market that drives post-sale profits directly to game makers and distribution channels that are no longer having any active involvement in making the game. If it was $5 to transfer a game license to your friend, he can still 'borrow' your copy of the game at an extremely negligible cost and devs and distributor benefit from the revenue that was non-existent before. Better yet, make it so a license can be shared from someone who owns the digital copy to his friends in a time-limited form. 24 hours with the full game as long as a friend owns it, then the option to simply pay the purchase price for the game that is already downloaded on your system. Keep your save file, continue your experience seamlessly after purchasing the game on your credit card.
At the end of the day, what is best for consumers is whatever is quickest and easiest. DRM-covered movie files shaft the end user because it limits the devices the user can watch their movie on, often the quality is limited by whatever arbitrary standards are required by the studios, and they are usually much more expensive than necessary. The same movie on Bittorrent (for example) will probably be higher quality, compatible with everything or easily converted, and easily shared. Look at the explosion in popularity the iTunes Music Store experienced once they finally convinced the record labels to drop DRM. People are willing to pay for content even when it is freely available, it's the willingness to offer it in a cheap and versatile way that stands as the impediment to making digital copies a true and extremely viable alternative to retail.
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