It's easy to explain, really; People like to share social experiences. And video games are more social than many other mediums now with online multiplayer being a key ingredient. I've made lots of friends across the world this way...
"At a time when people are bemoaning the fate of the interactive entertainment business..."
What people are bemoaning this, exactly? After several years of articles about how the video game industry was out-grossing the movies (as misleading as that data point actually was), who is claiming this? Other than the head of Take Two? I think what he really means is "at a time when people aren't nearly as motivated to spend $60-$90 for a new release console video game", perhaps. An industry that has grown by 10% from 2005 to 2009 and sold something like $22 billion in 2012? I'm not seeing some doom-and-gloom scenario. Especially as it is something of a golden age for the consumer, especially with services like Steam bringing frequent sales.
The article also mentions there being fewer games being produced? By what metric are they measuring that? Are they only counting console games? Yes, 2012 had a tumble, but 2013 has completely rallied from that point. The main reason sales tumbled in 2012 was fewer releases that year and franchise fatigue as companies like EA are so dependent on annual releases that consumers are starting to opt out.
The video game industry had a decade of unprecedented growth and now it's leveling out. That's really all that's happened, from what I can see.
This article uses phrases like "store shelves" and "retail sales" in ways that make me suspect it's ignoring digital sales. That doesn't invalidate the main point about blockbusters dominating sales, but I'm not sure that "...sold 67 different titles in stores in the fiscal year ending March 2009. In its last fiscal year, it sold 13" is a meaningful comparison. Origin didn't exist in 2009, and DLC was still in its infancy. How many of those 67 titles were Sims expansions whose 2013 equivalents are available only online?
Wait, it's still possible to buy video games at physical stores! I assumed that trend had finally died off.
Yeah, they explicitly mention retail sales figures from NPD, which only a couple months ago declared that they were going to start tracking download sales. (Good luck with that - Steam accounts for at least half of download sales, and they don't disclose sales figures.) So they're actively ignoring half of retail sales, not to mention subscriptions, micro-transactions, etc. which have become increasingly important.
The article is somewhat... problematic. They only discuss retail sales, which are important for consoles (though decreasingly so), while conflating physical retail sales with (download) mobile game revenue and DLCs, etc. So they're talking about apples and oranges, while only mentioning apple sales. So are console game sales down? Yes. Are PC and mobile sales/revenue way up? Oh, yes.
The "blockbuster" dynamics they talk about are also slightly muddled. AAA games have always been important, especially for consoles, where they have traditionally driven sales of the devices (the Wii being a notable exception). As the hardware has improved, the depth, scale, and visual complexity has increased. This has driven up development costs (enormously) which has also meant that the number of AAA games a studio can produce has decreased. (And the number of studios that can afford to make AAA games has decreased as well.) So there are many fewer AAA games that cost many more times to make, which are making ever more, per-game. On the other hand, the non-AAA portion of the industry is generating more revenue than ever before.
For PC games that's certainly true - they're quite difficult to find in stores, now. For console games, physical retail is still quite important (though that's slowly changing). Despite mentioning mobile games, the article is actually pretty console-centric.
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