Does Home Benefit From the Great Recession?
“For even if the prayers were answered, and a miracle occurred, and the yen did this, and the dollar did that, and the infrastructure did the other thing, we would still be dead. You know why? Fiber optics. New technologies. Obsolescence. We’re dead, alright. We’re just not broke. And you know the surest way to go broke? Keep getting an increasing share of a shrinking market. Down the tubes. Slow but sure. You know, at one time there must’ve been dozens of companies making buggy whips; and I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company? Let’s have the intelligence — let’s have the decency — to sign the death certificate, collect the insurance, and invest in something with a future.”
–Lawrence Garfield, Other People’s Money
Video game sales this summer saw their worst sales volume since October 2006. Accessories, software and hardware have all seen a slump, combining to form a sales total which is $254 million less than last summer.
I started thinking about the reasons why this industry, traditionally hailed as “recession proof” throughout the decades, is starting to see this sort of decline.
- It’s the economy, stupid.
Probably the single biggest factor at work. How Wall Street and Main Street define a recession are two completely different definitions; the reality is that we’ve spent the last thirty years increasingly deregulating the checks and balances on our capitalistic system, which allowed us to party like it was the golden age of the Weimar Republic for a long time. And, eventually, the system itself became unsustainable. What Gordon Moore said of his famous law — “It can’t continue forever. The nature of exponentials is that you push them out and eventually disaster happens” — is as true with macroeconomics as it is with microcomputing advances. Reduce incomes, reduce jobs, devalue currency, and begin a dangerous deflationary spiral; logically, leisure industries, such as traditional video gaming, will suffer.
- Obsolete media
I don’t mean to infer that the current generation of consoles is obsolete; rather, I’m suggesting that the entire business model is obsolete.
Think about it. Video gaming, as an industry, is more or less using the same business model it’s had for the last thirty years. Sure, coin-op arcades are practically gone, the internet created the MMO genre, and Nintendo’s motion-controller innovation truly did open up console gaming to people who would have hitherto ignored it. But aside from that, the business model is more or less the same: purchase console. Purchase peripherals. Purchase games. Beat games. Games collect dust. Repeat ad nauseam.
And here’s the catch: digital computing is running out of time. Micronization, thanks to the Heisenberg Uncertainty Principle, is going to hit a wall within the next ten years. So until quantum computing really gets its feet underneath it, there’s going to come a point where we can only wring so much performance out of so much space. But this merely illustrates a larger problem:
- Games are starting to feel stale. Stale and expensive don’t combine well.
Anyone else out there feeling the same sort of malaise about most game titles today? The numbers say you do: this is an industry where an increasing percentage of the grosses is coming from a shrinking percentage of the titles. And now the stakes are so high that creativity and innovation take a huge backseat to the bottom line.
The problem with this formula is that it creates its own monster. When everyone is trying to copy everyone else, I’m only willing to shell out sixty bucks if I see a truly superlative game.
For thirty years, this industry has pursued one basic strategy: more power. Improved gameplay, photorealistic graphics, 7.1 audio immersion, 3D trickery, faster computing power, more technical whizbangery…and, as mentioned in the previous bullet point, the laws of physics are starting to close in on this. Compounding this problem: shoehorning all of this into a game console — which raises the consumer’s barrier to entry — doesn’t necessarily make the games themselves any more enjoyable. I hate to say this, but my floppy-disk copy of Autoduel, from 1985, is still more enjoyable than most “car wars” games out on the market today.
The U.S. government has long suspected that, given the technical superiority of our military — I mean, seriously, the only thing that can go toe-to-toe with an F-22 or F-35 is a Eurofighter Typhoon — we would begin to be met with an “asymmetric response” instead of an arms race; the idea is that if a competing force cannot match the level of technology, then they “swarm” with superior numbers instead. Even a lion can be brought down by a pack of wolves.
Innocuous. And game-changing.
In the current generation of game consoles, it was Nintendo that picked up this concept of an asymmetric response and ran with it. Rather than get into an arms race with Sony and Microsoft — and sink the kind of R&D money into it that such a costly venture would entail — they innovated their hardware (detractors might call the Wiimote a gimmick, but it’s a gimmick that the other two console manufacturers have since emulated), kept the barrier of entry low, and deliberately went after a different market segment. The sales numbers speak for themselves.
Asymmetric response is what’s starting to really threaten the gaming industry’s business model. Tablets and smartphones are capable of providing cheap, mobile, casual gaming experiences while at the same time serving business needs as well (hell, it’s the explosion of tablets that forced HP to kill off its PC division, right after I bought a new HP laptop…). As an adult who works six days a week, twelve hours per day (and that’s not including the time I spend on HSM, which is basically a second full-time job), I just don’t have time to spend sixty hours exploring a new BioWare title (as awesome as they are). And lest we forget, kids, the average age of a video game purchaser in the United States alone is upper thirties to early forties.
When the barrier to entry is low and the game can be picked up and put down as needed, the potential revenue is substantial. Let’s remember the first rule of Freakonomics: people respond to economic incentives. If I pay five to ten dollars for a game (in some cases less), I don’t need it to be a 3D FPS that rips my eyeballs out and plays Yahtzee with them. Only now is the industry starting to realize that they can have much smaller development overhead and produce far less whizbangery…and people will gladly pay for it in greater numbers if it’s mobile, easily accessible, low-cost, and doesn’t appear to require a massive time investment in order to pay off. Zynga, as Gideon pointed out in a recent article from HSM Issue #7, has made a fortune off of this approach.
All of this brings me, neatly, to what it changing in this industry — and how Home is actually Sony’s future.
- Cloud computing, and the death of Gamestop
What is the economic value of a video game?
A brand-new, top-tier, OMGpwnz title will run you sixty to sixty-five dollars. Yet, within two fiscal quarters, the same game is available at the same exact store for half that price — simply because it’s “used.”
Now, keep in mind, it’s not like we’re talking about a car, which has logical reasons to depreciate. We’re talking about the same physical media (perhaps with one or two scratches on it) producing the same exact gaming experience. And it can be bought and sold, “used,” ad infinitum — with no return on invested capital to the game’s original developers, manufacturers, or publishers.
So. I ask you again: what is the economic value of a video game?
This is where cloud computing is so brilliant. Rather than get into the full debate on the pros and cons of cloud computing in all of its various applications, I want to focus solely on the video game industry. Instead of purchasing a piece of physical media, I go into my game console and I purchase, via the internet, access to a selection of files and applications. I can then purchase, with additional microtransactions, access to further such “add on” files to enhance my gaming experience.
If all of this sounds familiar, it’s because it’s already in place. It’s the basic fundamental architecture underneath PlayStation Home and numerous other virtual realities and social gaming applications.
Don’t be surprised, as download speeds continue to improve across the country, if the cloud eventually seriously cuts into (or in fact eliminates) physical media beyond, perhaps, a simple USB thumb drive. And even then, there would almost certainly be restrictions on file transfers.
Moving more of the accessibility away from physical media and back into the cloud gives the proprietor, rather than the consumer, more control over the process. Regardless of where you fall on the cloud debate and “ownership” rights, the reality is that the industry must almost certainly shift to this model if it is to survive. Go back and reread the epigraph at the beginning of this article.
And here is where Sony has a huge ace up its sleeve, because they developed something neither Nintendo nor Microsoft ever bothered with:
Home.
Make no mistake about it: I am perfectly serious when I say that not only will all of the next generation of game consoles feature a virtual reality social-networking games platform like Home, but in fact the industry itself is going to increasingly shift to low-cost, cloud-based freemium gaming. The economics of it are simply too obvious to ignore.
Jack Buser himself states, “I’m very biased but I’ll let you look under the hood for a minute. In PlayStation Home, you can build a full-on game that looks like a console game – for example, a full-on FPS or racing game – with a team of just 6-10 people and it’ll take 6-9 months to complete. Everything’s done with scripting using [programming language] Lua… so with a very small team you can create a game that’s up and running on PS3 in just six months. And it’s monetizing immediately!”
(Source: James Brightman’s interview with Jack Buser, published at http://www.industrygamers.com/news/ps3-home-boss-free-to-play-is-the-future/)
Games in Home don’t have to be on par yet with disc-based media in order to compete. Remember, we’re talking asymmetric response here. I can go spend sixty bucks on a new racing game, or I can go into Home and get a very similar experience out of Lockwood’s Sodium2, plus enjoy the social interaction that goes with it. And if I spend, say, ten bucks on Sodium2 — one-sixth the cost of a disc-based video game — I can really light it up. But I don’t have to buy the game first and risk being disappointed and bummed out over spending non-recoverable after-tax income. I can test things out first.
When the barriers to entry are effectively zero, you’ve got a business model with huge revenue generation potential.
Innocuous. And game-changing.
If you’re a developer, you’ve got a chance to achieve something that hasn’t been seen in this industry in a quarter of a century: the ability to get together with some mates and put together a title that will be played by millions of people without spending the GDP of a small nation to do it. The next Richard Garriott or Nolan Bushnell will likely be a Home programmer. Heck, it’ll probably be John Ardussi.
If you’re a consumer, you’ve got a chance to enjoy something that hasn’t ever been seen in this industry before: the ability to peruse and enjoy gaming experiences without spending a dime, and thus only invest in the ones you wish to enhance. Don’t like Sodium One? Move on to the next game (and get the hell off my server, you communist). Love Sodium One? Spend five bucks and unlock forty-five levels, a cool outfit, and access to a VIP area in the Sodium Hub.
If you’re a paying advertiser, you’ve got a chance to get your product in front of a much larger cross-section of gamers — including social gamers as well as just hardcore gamers, which usually means an older and more affluent demographic — than product placement inside any one particular title could ever afford you.
In billiards, I think this would be called a bank shot.
Now then: the key to making this work for console gaming — the key to attracting all of these console gamers into the new business model — is to offer them a robust marketplace of gaming experiences to choose from. This will increase revenue generation and average user session time (which advertisers are going to be looking at).
Oh, wait. Didn’t Sony just announce they’re doing exactly that? My, my, my.
(By the way, it’s not exactly like this is some sort of giant revelation. When I came into Home in 2009, they were already talking about shifting more of the emphasis to a social gaming platform. The clues have been there all along, for anyone who wanted to connect the dots.)
Now, before any of my fellow social enthusiasts cry “sell-out!” any louder, keep in mind that I totally understand the concerns you’ve raised, because I share them. The big root concern is that Home, in its rush to appeal to a broader audience by offering more and more games, will de-emphasize its social underpinnings. That Home will somehow lose its “soul.”
And you know what? That’s a completely valid concern.
The magic of Home is not just in offering more and more games — although the emphasis needs to be there right now, for obvious business reasons. The magic of Home is in its unique ability to blend gaming and social interaction into a virtual reality framework which, if done correctly, is more appealing than other forms of leisure activity. It’s the human element of Home that keeps it fresh; gaming experiences inevitably grow stale over time, unless there are social elements which keep people coming back. Home truly is “reality TV” in the truest sense of the phrase.
To that end, a new ARG like Xi to coincide with the release of the redesigned Home would be a smart idea. Or community events which help bring people together. Or, preferably, a massive core client update that improves clubhouse functionality, allows developers to create their own clubhouses for retail, and enhances the selection of emotes and default questions/statements a user can select from (possibly as for-purchase downloads).
Yes, I know that the previous paragraph suggests high-cost ideas which are harder to quantify in terms of return on investment. Perhaps Home needs to demonstrate a more lucrative balance sheet — courtesy of all the gaming enhancements — before such things could actually be justified. I get that.
What I also get, though, is that Home has a golden opportunity right now, courtesy of the Great Recession, to rewrite the business model for video gaming. If I was Square Enix, for instance, I’d take a long, hard look at allocating a small portion of my available resources — half a dozen Lua programmers, perhaps, with a modest budget and a Home dev kit — to the creation of a Final Fantasy public space in Home which offered a selection of classic minigames — competitive Chocobo Racing, Snowboarding and Triple Triad, for instance — that allowed me to advertise to the masses of people that would populate such a space day in and day out.
Home's power level. It's over nine-thousand.
And, with money as tight as it is for nearly everyone, and certain technological limits coming up fast for digital computing in general, Home can really position itself as the low-cost, high-value alternative to traditional disc-based gaming. It’s not like this hasn’t been done in the past — hence the earlier Zynga reference — but nobody’s ever tried it with consoles before. Somebody inevitably had to break the ice.
It’s an exciting time to be a Home citizen, and a Home consumer. Thanks to cloud computing, escalations in production costs, and the Great Recession, we’re at the very beginning of what will be the first major transformation of the video gaming landscape in three decades. It’s good to be Home.
August 27th, 2011 by NorseGamer | 24 comments
NorseGamer is the product manager for LOOT Entertainment at Sony Pictures, as well as the founder and publisher of HomeStation Magazine. Born and raised in Silicon Valley, he holds a B.A. in English/Creative Writing from San Francisco State University and presently lives in Los Angeles. All opinions expressed in HSM are solely his and do not necessarily reflect the views of Sony DADC.
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Wow incredible article Norse! I would be one of those people who would populate that Final Fantasy space. I would also love to see Rockstar step up and give us a Red Dead Redemption space. The game is a few years old now and still pretty popular, what better way for them to revive its popularity to a higher level than to give us in Home a space with mini games to renew interest or establish new customers. A shoot out in the street, or even a target shooting area would be immensely popular. So would a poker hall ( it might even make the EA people happy again)with liars dice tables as well. There are so many developers out there who are missing this boat! Wise up guys, Home is the future!
I see that Home is definitely a possible core to how games are bought and launched in the future. Once there are enough people who spend money on the platform, I am sure the number of developers working on Home will explode (see iPhone). Some stats I was quoted about general online spending is that you typically see 1-2% of the people online buying items. I have heard Jack B. say that percentage is higher on Home, but I doubt it is much higher.
The key then is to get more people on the platform. It sounds like this is exactly what they are doing. The new hub and the new business model are bound to bring in more people. Add to that some new game types (FPS and racing have been mentioned) and they are bound to get more people staying.
I am hoping to see more promotional games like the Zombie Survivor game. Although in the future, I am hoping that zombies with no arms don’t have a longer reach than me with an axe, but I digress.
I feel Home is heading in exactly the right direction. As always though, the devil is in the details. This is definitely the beginning of something big.
(Thanks for the shout-out. I hope I live up to it.)
Norse, this is a bit closer to my own thoughts than some of your previous writings on this subject. I’ve been criticizing the Tim Taylor “more power” philosophy for awhile now. Why? Well, compare FF XIII and FF VII. You tell me which game has better gameplay. More importantly, you tell me which game has a greater power to move people emotionally.
On the RPG forums we used to have debates about which was more important, storyline or gameplay. The answer of course is that they both are. Without gameplay you essentially have a movie. But without a storyline, you have no emotional involvement with your characters, and without that, you may as well be playing chess against a computer. Emotional involvement is what makes a game great. But blending the two takes creativity, and genius, and neither have ever been plentiful and so that is why each year we have the gaming equivalent of the “Clone Wars.”
But it’s a war that cannot go on indefinitely. As you mentioned, used games are an ever increasing drag on the gaming economy. So is piracy. Put the two together and you have a modern day Scylla and Charybdis. This is why we’re heading for a future in which we won’t be buying a physical copy of a game. Instead we’ll be buying the rights to use a digital copy of a game which we’ve downloaded.
And that naturally leads us to PlayStation Home. I’ve also long believed that PS Home is the future of gaming. However, and this is a big however, in a world in which handheld devices are ubiquitous, and games are simply bits and bytes which can be downloaded to any platform, the intangible which will give one platform the edge over another is that elusive quality I’ve already referred to as “emotional involvement.”
Ask anyone who’s played an online game what makes it so appealing, and the universal answer you’ll hear is that it’s an experience which you can share with your friends. This is why, when I hear people say, with regards to the next evolution of Home, “It’s all about the games,” my immediate response is “No, it’s not. You’re missing half the equation.”
Virtual worlds are the future, make no mistake about that. And in a virtual world, all other things being equal, the games which will flourish are those which provide you with compelling experiences which you can share with your friends. It’s not a question of gaming or socialization but rather both in synergistic unity, with activity in either sphere providing advantages in the other.
Norse, I hope you’ll forgive my piggybacking on your article again, but there’s a few more points I’d like to make.
First, when I see you talking about asymmetric warfare/ asymmetric responses, I essentially hear you validating my question as to whether Home based games are ready for prime time. But there’s another way to look at that situation, namely, from the opposite perspective of, “Are disc based games ready for a Home that’s being repositioned as a gaming platform?” If I were a game dev, I’d want each of my games to support in-Home game launching *and* I’d also want them to support in-Home advertising, whether by unlocking clothing items (like RDR) or personal items (like LBP) -- just so long as it isn’t a t-shirt. But how many games support Home in either manner right now?
The second thing I want to question, is whether SCEA has yet figured out how to turn a profit from every type of Home based game or activity. For example, Sodium 1 offers a traditional shooter type experience. Sodium 2 offers a traditional racing type experience. In both cases the freemium model works well. Give Home users a basic game they can try out for free, and if they enjoy it, they can purchase enhancements for their gaming experience. I imagine such enhancements could easily be provided in the case of chocobo racing or snowboard racing as well. But what about something like Triple Triad?
Now if PS Home ever offered Triple Triad tournament, I’d be there in a heartbeat. But how would Square Enix capitalize on such a space? By putting up billboard advertisements? Would people even pay attention? Now I confess that more than once I’ve been reminded of a newly released movie by walking into Central Plaza, and minutes later was on my way to the nearest theater. But how do you measure the effectiveness of such advertising? Perhaps by offering a discount on movie tickets if someone provides a unique code which can only be obtained while visiting PS Home?
A Triple Triad space in Home wouldn’t be like a Las Vegas casino, where the house can calculate how much money is being earned from each tourist at each table each hour. Perhaps one could allow players to purchase a limited number of cards each hour (for those unfamiliar with Triple Triad, losing a game means that you also forfeit some or all of your cards). But if players didn’t wish to spend any money, then each day they could also earn a small number of new cards by simply visiting the space. Would such a model be workable? I’d love to see it.
And third, and most importantly, a point I’ve already made above -- Home itself needs a certain amount of freemium content, otherwise known as Events, with of course the granddaddy of all events being Xi. Home should never become a shining, glittery virtual Disneyland where you can do whatever you want, as long as it’s play a game, and every game requires some sort of financial outlay. There are a lot of people who don’t use Home. And I would argue that asking them to pull out their wallets and register their credit cards isn’t necessarily the best way to introduce them to PS Home.
To look at this from another perspective, those who want to use Home for socializing as well as game playing shouldn’t be made to feel like red headed step-children. The same events which we are continually asking for in the Western Homes, would also serve admirably to introduce new users to PS Home. It would give them a chance to come in, take a look around, get acclimated to perhaps the first virtual world they’d ever experienced, maybe even strike up a conversation or two – and all without ever making any demands upon them. And since the best events are those which encourage users to return to Home again and again, once the use of Home had become a regular habit, it would only be natural for these new users to start asking themselves what else is available to do in this digital wonderland.
Lol I almost used the “Red-headed step child” line myself,glad it didn’t go unused in this convo.
Entertainment…. in the beginning was story telling around the cave fire with the elders’ making that sabre-toothed tiger bigger and bigger in each retelling.
Then along came books -- do you realize how recently Guttenberg made this kind of entertainment available to the masses?
Within your great great grandfather’s lifetime, radio was invented. And only 100+ years ago, the first moving pictures. There are still those alive in this world who can remember when movies were silent and all in black and white.
Then, the 1950’s and the beginning of television! Your grandparents can still regale you with tales of their first DuMont TV with the round 12″ screen and 3 channels that went off the air each night with the national anthem playing and a still picture of the American flag on the screen.
Computers as entertainment: When Bill Gates built his famous DOS, did you know that there were simple games built into it? Great fun until the boss caught you. Then the Apple with those wonderful text games -- anyone else here remember Ultima? Zork?
Wow, walk into a game arcade in 1972 (only 40 years ago, folks) to play pinball and find a table game of Pong. It took three years after that for the home version of that to be available and, as the pundits say, the rest was history.
Atari, Nintendo, Sega Genesis, … to list ALL the early video game consoles that came out is enough meat for an entire article.
But: until virtual reality came along, we were passive spectators. Even firing away at Kefka in that seminal FF game, we were still within a linear game. Playing DragonAge Origins and RedDead Redemption, yes, you are controlling a character’s actions -but the character isn’t YOU.
Now we reach the future of entertainment: virtual reality encompassing story telling in an environment that is pro-active. YOU create the story as you go. Will people want to buy it? Will they make sacrifices to pay for it? Will it be more addictive than crack?
Quit the day job, Norse. You are in at the beginning of one of the biggest social revolutions this world will ever see.
Sounds like the whole economic issue with importing goods because they can be made for a lot cheaper. Not as good, but hey it’s not as expensive right? I think the whole cheaply made social game is a bubble that will pop someday. The market will get flooded and the average consumer will have moved onto the next big thing. If this is the future for video-games I may end up not being a gamer because to me nothing beats a 70 hour epic that grips me every second.
While I agree that some of the big name developers should consider having Home teams I think the draw of Home development are smaller studios that have big ambitions. So far this is what we have seen. Home is the perfect platform for that smaller studio to make its mark with an instant, willing and eager audience.
Home should be seen as a way to enable the games industry to grow and flourish, not a way to stifle the efforts of studios making disk-based games. While it is true that Home games could be and will be competition for disk-based games I think Sony is making a mistake if they are offering Home as an “instead of” option to big game studios. They are not going to want to rest their financial success on the integrity of Home. Especially after the debacle they had on their hands just a couple of months ago. How many companies can afford a month’s worth of lost revenues? Small companies might be able to. I think Home, and services like it, should be considered for supplementary and casual gaming.
If used right a company can increase their profits quite a bit by using Home. I’m actually buying Dead Island because of the Home content. Before then, it was a pass for me.
There are other options when it comes to a asymmetric warfare other than “swarming”.It’s sometimes reffered to as the “Sun Tzu”(might be misspelled) way.An example would be North Vietnam’s tactics against the South and U.S. forces but enough about military tactics.Here’s another aspect of used video games I haven’t heard talked about but goes a loooong way to making the choice between a $60 game and a $5 game more like a choice between a $5 game and a $5 game.There are services like Gamefly that allow you to rent games for very little cash,I believe it’s $10 a month,I’m not sure how many games you can actually get each month as I’m not a customer any Gamefly users out there?.I realize it isn’t instant gratification like you can get on Home but in the long run it’s probably cheaper and you get top quality games,if you know how to pick them.Therefore I’m not sure that Home is more economical BUT Home excels in impulse buying.As soon as you see something for sale on Home you can buy it,no waiting for the mail to deliver your game that’s a big advantage right there.I too think that Home(and other things like it) could be the future of gaming but until the big developers are also convinced they will generally stay with what’s working so until Home starts generating big profits from games they will be luke-warm at best.The problem then for Home is to find a way to show ppl that this can be a big money-maker which will require them making games that ppl will want to buy instead of spending money on disc-based games,in effect competing.I hope these games are epic and do well but I fear that if they are not and therefore don’t sell well the whole model will be unduly thought of as a failure whereas it might just be that ppl aren’t happy with the games offered.As I’ve been saying,time will tell.
I use Gamefly, Cthulu. It’s almost 15 dollars a month for one game, and 22 bucks a month for two. There’s higher tier packages, but I’m not sure what they cost off hand.
Thanks johneboy,then I guess Home is slightly more economical but as I said earlier,each user will decide which is the better deal for themselves lower price or longer gameplay(generally speaking and as things are as of now).Of course there will be some ppl that can afford to buy a game on Home and a similiar game on disc,but in this economy those ppl are getting fewer and fewer.Also there is Gamestop and similiar stores that sell used games at various prices(as NorseGamer pointed out) and the many,many,many games a person can buy on their cell phones which make predicting anything about the success of Home games very difficult.I hope we hear more about these games soon.
There is nothing cheaper than freemium other than free. Even used games are more expensive.
This is not going to be a war of price, but a war of content and audience. Basically they are committing to the Team Fortress financial model. Now they need content for Home as compelling as Team Fortress.
The reality is that there will be no winnner. Many platforms will remain around. We will see which one is more successful.
I agree that it won’t be a price war,I was only bringing up prices to further prove my point about any games on Home that are similiar to a disc-based game will be in competition with that game and price is only a small part of the deciding factor for most ppl,but in this economy it is becoming a greater factor for some.Your right,this will basically be decided on content.IF these new Home games have some kind of “hook” that gamers like price won’t matter much.Which is why I really would like to see these games,lol,this will either be huge or ho-hum,from a gamers point of view.Although I do disagree somewhat about freemium being the cheapest thing around,freemium can be more expensive than a downloaded cell phone game IF you decide to buy alot of the upgrades but that is totally optional and therefore under the total control of the user,I appreciate you responding to my comment.
Yes, indeed, it IS the economy (stupid). And it has been for a while. I think that this is the primary factor in the plummeting sales in all forms of entertainment. Mix that together with the staleness of some of what’s on offer (very few truly original movies coupled with endless sub-par remakes of films which were more a fad than true celluloid magic; heavily promoted, cookie-cutter music which is invariably about the persona of the performer and not what you’re hearing; and, as you mentioned, games which may look stunning but play as well – or as long – as what used to be considered a lesser title, mixed in with being nickel and dimed for all the bells and whistles which used to be available right out of the box) and the sheer cost of a movie ticket/CD/video game and there are many more reasons than ‘pirates done downloaded our stuffs’ to explain the drop in sales dollars going in the direction of entertainment.
The business model for such entertainment has indeed gone stale, and companies which have been at the fore front of consumable media are definitely feeling the financial strain. Fewer movies are being green lighted by the big studios, and the ones which are would not be what one would cal ‘risky’. More musicians are finding alternative ways to promote and sell their music as the industry big-wigs are spending more and more time and money advertising their stable via the paparazzi than signing bands and getting them in studios or on tour. And games are being rushed out the door with a ton of bugs and flaws to meet release schedules and budget concerns – as well as to immediately begin work on a sequel; while, at the same time, smaller development houses are receiving the lion’s share of the critical acclaim (and , in some cases, profits) as they are putting out original (albeit, smaller in some cases)and WORKING games.
We’re definitely at a crossroads when it comes to how (and where) we choose to consume media. And I believe you may have hit the nail on the head when you pointed to Home as a logical step in what may be the right direction for game developers to survive and thrive. Good promotion often leads to good sales…it’s a simple fact of life. And it’s the amount of advertising which may suck the soul out of Home more than changes made to draw in and target gamers.
Everywhere we turn in our daily lives we are confronted by a sales pitch. Driving around we have chunks of commercials on the radio…which we listen to as we pass by billboard after billboard. Many videos we want to watch online now have a 30 second commercial before the video actually starts. And TV…well, we all know there are WAY too many commercial breaks at WAY too high a volume. As a result, many of us simply don’t pay attention any more – we simply tune it all out lest our brains melt and devolve. If Home was going to go that route, I would be very much concerned. Fortunately, the major advertising in Home seems to be tied in with an experience integrating the thing being sold with a mini-game of its own. While this may not always turn into revenue, it can certainly bring awareness to a company and make ones view of a company or product better than it was before.
This new form of advertising is a fascinating thing to watch, but it really is nothing new. During my tenure as a working musician, my various bands made decent sales from what merchandise we sold after a gig. We gave people an experience (the performance) and, if they liked it enough, they would pick up a CD (or tapes in the olden days), shirt or bumper sticker. This is similar to what’s being applied in Home in recent months. Go play a Zombie slaying game, and you may buy the full game it is advertising. Or, if you don’t want the game, you may pick up a nifty item for you avatar for a buck or so. Even if you purchase nothing, the fact that a company set you up with a free experience (with rewards) leaves you with the impression that the company in question is very consumer friendly…which may weigh heavily in a future gaming purchase. While the angle isn’t new, the implementation is; as a result, it might just prove successful. I for one, don’t mind this trend at all…it could be a lot worse and much more ‘in your face’.
Smart and insightful article, Norse. Lotsa stuffs to chew on. I believe it IS a good time to be Home :>
With video games, I’m seeing much the same problem that’s affecting the movie industry: it’s becoming more about the spectacle than it is about the story. The problem with this is that spectacle, by itself, doesn’t have that much of a shelf life. It’s easier to duplicate, sure, but in time…spectacle becomes ordinary.
There’s a phrase that’s been used earlier in this conversation which I completely agree with: emotional investment. And this is where Home has a distinct advantage. Very few gaming experiences can provide a long-term emotional connection, but if you can find that magical blend of gaming and social interaction, you’ve basically got a license to print money (and your name doesn’t even have to end in Bernanke).
It’s sort of a chicken-versus-egg argument: which causes which? Does a compelling social experience drive people to spend money on games in Home, or do compelling games drive people to spend money enhancing the social aspects of Home?
Right now, Sony is pursuing the latter strategy — and for very sound business reasons which I completely agree with. I just hope they remember to offer social interaction with the gaming if they want long-term return on investment.
I believe Home is a great for distraction games rather than epic games like KillZone or Uncharted. Basically fulfilling the online equivalent of Minesweeper and Solitaire. The reason is that then people can go back and hang with the Homies (I have no idea why this term has not caught on, but I am going to keep using it). Or if they play together, there is not a significant time commitment.
In the future when there are a significant number of people ready to pay to play, then I see the bigger games coming online. Right now it does not make business sense to invest in something that is likely to be a good idea a couple years out.
People loved Xi, but I am going to guess that it did not make money. If it had, then I cannot imagine why they would not have done Xi 2. They are the Van Halen of Home. They could make Xi breakfast cereal and people would buy it. I know of at least one item that got a bump in sales because it was percieved to be associated with Xi.
So the template for love is out their. It just has to get matched up with a plan that can make money.
I feel Home is moving in a very positive direction. Time will tell.
If there was a way to play epic games WITH the homies I think it would do just as well as the distraction games.If home had a game like Oblivion that could be played with home friends it would be as addictive as crack,at least with the ppl I know.This could also generate sales of in game items like armor and weapons as well as building the home community as homies could be hanging out while actually playing the game.IF done right this new direction could be huge but if the new games are games that don’t allow the ability to hang out with friends while playing this might not do so well,really wish they’d give more details about these games.
Allow me to go at least partially contrarian on the Cloud dreams:
Problem 1: The U.S. lacks the infrastructure to support massive streaming and downloading, and no one seems to be in a hurry to do anything about it. We just don’t have the bandwidth to support the amounts of data traffic that cloud computing requires. And, if we ever were to move to such a model, the question of access would roil our government for at least a decade. Who’s going to shell out the extra $50 billion (and rising daily) cost to wire the most remote parts of the country? Or are we just going to leave some people behind? That won’t fly, so unless someone figures out a way to make wireless pump more data over long distances without incinerating everything in the sky along the path, we’re a very long way away from any sort of cloud-based reality.
Problem 2: There is no ownership. Until you have an actual file in your posession, you have no ownership of a product. Even then, ownership is questionable. Business minds love this, because they could essentially turn us into a nation of renters, putting expiration dates on everything and forcing us to buy it again. Hollywood has been trying to figure this out since the VHS days, when they immediately realized that letting people buy things meant less money than letting them rent.
Major content distributors have ecstatic dreams about turning us into a nation of renters. Given that younger generations raised on MP3s and the Web have less of a connection to physical ownership of a thing than those who grew up with vinyl and cartridges, that may yet come to be the norm, but my generation is in the purchasing power drivers seat for another two decades, and enough of us are deeply opposed to the content rental model that it’s probably at least a decade away from widespread acceptance.
Problem 3: You assume that the console will continue to be the delivery platform. Console gaming died once and is likely to do so again, as the industry has lapsed back into delivering me-too, formulaic products that blur into a forgettable continuum. Hollywood gets away with this because, as a friend of mine so astutely put, “We will always have a primal need to gather in the cave and hear stories.” Console gaming has become hamstrung by its reliance on individual, isolating experiences. The two rays of light that threatened that model, Rock Band and the Wii, have both fallen flat because with the mainstream because there wasn’t enough depth to the experience. People sitting by themselves at a console, even if they’re in Home or playing multiplayer, are still people sitting by themselves at a console, blocking out everything else that’s happening around them. We can only take so much of that.
One thing that you fail to note in your apt description of asymmetrical warfare is that the console has not been the dominant medium. Game developers are working on smart phones, tablets and the web. The main stream, and a good number of gamers, are satisfied with these unconventional, smaller games because they provide new challenges or precisely because they’re smaller, pick-up-and-play experiences that don’t require hours of investment to enjoy. You can chicken-and-egg gameplay vs. story all you want, but the first question any game must answer is, “Is it fun?” Two games that utterly lack story, Angry Birds and Minecraft, are two of the most popular titles in the market right now. Early Wii games and Rock Band thrived on that same fun factor with no story requirement. Tetris remains one of the most popular games of all time.
The cloud is long in coming and the console itself may be doomed, replaced by portables and televisions that do everything the current console generation can do. Alternative platforms are too compelling for business owners, because they provide insulation from parasitic companies like GameStop, which deserves more of the blame for ruining the gaming industry than any macroeconomic factors.
It’s GameStop that has destroyed the shelf life of titles, forcing publishers to extract their profits in the first month of release. Market research trumps innovation in that reality, because every idea gets focus grouped and analyzed to its smallest detail to ensure that gamers must own it on its street date.
Anyone who knows the inner workings of the publishing industry knows that a similar set of parasitic companies drove the price of textbooks so high that a rental model is now a desirable alternative. When the content creator receives no payment for secondary sales, and secondary sales controlled by a single entity rule the market, alternative distribution is the only way to keep the content business running.
None of these realities bode well for the future of console gaming, at least in the United States. I have no doubt that Home will persist and propagate across new platforms, as it does provide a compelling interface for a wide variety of content. Just don’t be surprised when you’re accessing it through a 6G network on a 10-inch tablet at your favorite bar, rather than sitting in front of it on a home console.
Whenever I visit the Asian Home, I am continually amazed that people from countries which are supposedly less advanced than ours enjoy connection speeds that most Americans can only dream about. How is it that all these other countries can afford to build an infrastructure which we cannot? I seriously doubt the problem is lack of funds. The real culprits, I would say, are special interests and their self serving priorities.
I remember when universities and think tanks began preaching the benefits of a post-industrial economy. I immediately called it suicidal and insane. When America became a post agricultural society, we didn’t stop producing food stuffs. Instead we became so efficient that we could move the majority of our worker force elsewhere. That never happened with industrial production. Instead what we were doing was moving into a de-industrialized society, where jobs were simply transferred offshore to take advantage of lower wages, the same way that illegal immigration has been encouraged to artificially depress worker’s wages. Today the buzz word for that supposedly post industrial society is a “service sector economy.” Everyone knows that worker’s wages have been flatlining for decades. It used to be that a single male could support a wife and 2.5 kids. Now two parents working can barely support one child. This is no accident. It’s the logical outcome of public policy decisions which benefit the few at the expense of the many.
As for renting vs owning, that battle was lost long ago. The only property the average American owns is their home and their auto. But if you have a mortgage you are essentially renting your home, as become clear when you can no longer make your mortgage payments. And how many people actually own their cars, as opposed to leasing them or buying them on credit? And once they have paid off their autos, how long is it until they buy a new one?
And personally, I’ve always assumed that home consoles were going the way of the dinosaur (just look at Japan). And while I don’t mean to imply that simplistic games that can be enjoyed in isolation are going anywhere (particularly not in a marketplace where handheld gaming devices will soon be ubiquitous), I think it’s also just as certain that the current convergence we see between movie making and game making will only continue. Blockbuster games aren’t going anywhere either.
The problem of providing an adequate internet backbone for this country will be solved when someone decides they can make more money by making Internet access universal, rather than overcharging Americans for inferior Internet service. This will be driven to a certain extent by the proliferation of handheld gaming devices, as well as Internet enabled smart phones and tablets. As the cost comes down and the market expands, the lack of adequate Internet service in this country will become more and more of an issue.
And when that day arrives, I believe you’ll find that the “story” in online games will increasingly become “us.” There will be a convergence between gaming and virtual worlds, and so I’ll say again that the strength of an online community will become a factor in a game’s success or failure. If two identical “social games” are made available on two different online platforms, I should think it would be obvious that the game will do better on the platform which does everything possible to facilitate the growth of its online community, as opposed to one which consistently ignores its online community.
I’d like to elaborate an important point which I feel has been obscured in the discussion above. It goes without saying that a game has to be fun to succeed. That’s a given. But with regards to PS Home, I think the more important question is, “Is it more fun to play a game by yourself, or to play a game with your friends?”
The answer should be self evident. If I want to play a game by myself, I don’t need to go onto Home to do it. I have my PS3 for that, or my PSP, or my PC. In fact, whenever I do find myself in Home playing a game by myself -- for any length of time -- I always find it a bit strange, because I feel disconnected from everything that’s going on around me. Now if the gameplay session is short, so that you can intermix gameplay with socialization, it’s fine. And of course when you throw competition into the mix in the form of leaderboards, that also makes it more compelling – for some. But speaking for myself, I’m really not drawn to single player experiences in Home.
Now any game, regardless of complexity, is going to get stale over time as Norse pointed out. With regards to offline games, one obvious way to alleviate this is to wrap the gameplay in a compelling story. The story not only gives you a break from the gameplay, it also creates an emotional identification with the characters and gives you incentive to finish the game.
With regards to online games, we supply that emotional incentive ourselves. Instead of identifying with another character, we are ourselves the characters. When I can play a game using my own avatar I enjoy the experience more. And if I can also interact with the avatars of my friends while playing a game, that makes it even more fun.
Now to back up a bit, I’m not saying there’s no place for single player experiences in Home. Not at all. All I’m trying to do, is point out that since Home is a social platform, why not take advantage of it? Of course creating a multiplayer experience in Home is inherently more complex than creating a single player experience, but I would think the potential rewards are inherently greater too.
And of course the point that I’ve been leading to all this time is this: the social aspects of Home cannot be ignored. If Home is a place where people can easily meet, interact and get to know one another, then this will naturally create a desire for gaming experiences which can be enjoyed and shared. I understand the argument being made very well, that if you provide compelling gaming experiences that people will be drawn into Home and then become friends. The thing is, in my experience it doesn’t work that way.
Playing an online game with someone you’ve never met before just doesn’t provide much room for socialization. And when the game is over, I usually don’t have much interaction with people I’ve met this way, because people who are very different from one another can still be drawn to similar gaming experiences for their own individual reasons. On the other hand, when I get to know someone beforehand, it’s common (for me) to eventually share many different types of gaming experiences with that person.
Even if you’ve paid off your house it can be taken from you.Can’t pay your property tax? too bad county auctions it off.Then if you happen to have a choice piece of property and can pay your taxes the government can still take it if they want to.Look this country put a man on the moon,if we can do that upgrading our internet isn’t that big of a deal really.”Service sector economy” is 1 of those assine ideas like 100% free trade and “too big to fail”.Catch phrases to cover an embarrassing fact,the fact that the U.S. government sold out to big business’ long ago.So if the U.S. government isn’t pushing for it then there must be some special interest against it,but I would think that companies like Sony and Microsoft would be all for this.
I’ve owned my car for six years. It’ll be seven by the time I replace it. I love that car.
As far the wiring issue goes, let’s keep in mind that Japan is roughly 146,000 square miles, smaller than the land mass of California. Wiring a space that size isn’t nearly as complicated as wiring something the size of the United States.
It’s not so much a situation of anyone being opposed to it, as a recognition of what it will cost in a country where companies and our government try to spend as little as possible on keeping the vast majority of consumers happy. I do think that someone is hoping a wireless miracle will solve all of this, but until then the cloud advocates need to accept that their dreams of remote storage are a long way from becoming reality.
Not too long ago the government installed internet access into every school and library in the country.This was neither cheap or easy either but it was accomplished.If there’s a will there’s a way.Your own statement that companies and the government are opposed to this because of cost isn’t much different from mine saying that there are special interests against it.Companies use lobbyists to promote their views so if their view is it’s too expensive then they tell their lobbyists to work against it which is the same thing as what I said about there being special interests against it.As for the ownership implications of cloud I can’t say too much as idk that many details but I can say that ownership to me isn’t that big of a deal IF,and this is a big if,whoever does really own the content doesn’t force alot of rules and limitations on my useage.
This discussion thread has offered up some absolutely brilliant commentary; I’m really hoping that additional articles about cloud services, Home’s revamp, the freemium gaming business model and beyond will be generated from this. Any takers?
What? MJG74’s article wasn’t enough?
I already have a backlog of other articles to write, so I’m hoping someone else will add their voice to this ongoing discussion.