PS3 discussion update

[Fletch]

I'll avoid doing a Posty "disection" response in favor of something to the point: it all comes down to ownership. Why do you own when you buy a game? Do you just own the disc/cart? Is that merely an access way to content you don't own? If you buy something, aren't you free to do with it what you want?

Car dealers initially hated used car lots. They worked outside the main industry. They purchased cars off of suckers below market cost and jacked up the price to make a profit. Many people would rather buy a slightly used car at a cheaper price than the new version at the dealership across the street. The car companies fucking hated this. They said it was going to make it inefficient for them to sell new cars, and that would jack up production costs.

So what did the car industry do? They got over it and started selling used cars at their franchises. It didn't eliminate 3rd party used car dealerships, but it did sap away a whole lot of their business.

The recording industry gave way to used record stores. They hated them. They used almost the exact same arguement being used here, that costomerse didn't have the right to sell or re-sell their records, tapes, and CDs. The supreme court said if you're selling them physical media, they can do what they want with it unless you get them to agree to something otherwise (like agreeing to a EULA).

Movie companies hated movie resellers. Comic publishers hated comic book stores reselling on the used market. Publishers hated used book stores (hell, they originally hated public libraries). Name an industry that sells a permanent good, and there is probably a cottage industry that resells that good in the used market. It's the very nature of capitalism. Once a market becomes an open market, it is exceptionally hard to close it back up.

So far no industry has been destroyed by it's used market. They just have to adapt. But nobody likes to adapt their business model, especially when they're on top. Subconsciously it strikes people as defeat. It's perfectly natural to protect ones turf. Maybe Sony's DRM is their version of adapting, and maybe it will work. Maybe the industry will adapt by choosing to regulate used-game sales like the car industry has. Either way, I'm hopeful that the industry will adapt, because something bad is on the horizon. When production costs all of a sudden explode in proportion to market demand, it's usually a sign that the bubble is about to burst.

[Izuno]

Excellent post, Fletch.

So far no industry has been destroyed by it's used market. They just have to adapt. But nobody likes to adapt their business model, especially when they're on top. Subconsciously it strikes people as defeat. It's perfectly natural to protect ones turf. Maybe Sony's DRM is their version of adapting, and maybe it will work. Maybe the industry will adapt by choosing to regulate used-game sales like the car industry has. Either way, I'm hopeful that the industry will adapt, because something bad is on the horizon. When production costs all of a sudden explode in proportion to market demand, it's usually a sign that the bubble is about to burst.

With the increasing cost to produce games, how can the industry increase the amount of revenue flowing back into developers? Yeah yeah, this is the question everyone always discusses. A few obvious answers we should all know by now:

1) Better managed production processes

2) Better toolsets that speed up tedious processes and minimize rework.

3) Consolidation However there is a risk of too much consolidation causing all games to look and feel and play the same.

4) Increase sales from

- existing gamers buy more product

- existing gamers stay in the market for longer (keep buying and playing into 40's, 50's etc..until death)

- nongamers of all ages start buying and playing

The real answer to #4 is to innovate. New genres with new appeal will draw in more people who've never played games before. On new consoles like 360 and upcoming PS3, I don't expect there to be huge innovation in early generation games, as usual for each cycle. Once the hardware price drops, you get non gamers interested in buying the hardware because of an innovative new game that appeals to them.

I really think it's going to happen this generation, but not until later in the cycle, say in two to three years when the hw prices have dropped enough and the core install base is large enough. I am hoping some of the kick ass graphics and eye candy will help polish some really innovative gameplay types that aren't based purely on violence or conquering etc that get all these non gamers out there to start choosing interactive entertainment over seeing another shitty movie or watching CSI:Cleveland or CSI:Albany or whatever shows are on by then.

Back to the rental issue and Sony...I don't think the games industry is going to collapse. There is too much demand for interactive entertainment and too many minds struggling to innovate the industry to not produce a breakthrough at some point.

One thing to keep in mind, for hot new games, how easy is it to find them used a week after release? Because game sales are so hit driven, sales curves of big products tend to match movie opening curves. Most sales occur in the first month, sometimes two weeks, and then steadily drop. Really good games are often not sold back to EB or GS simply because they are that good. It's the shitty games that get recycled more. But I don't have the latest and greatest data on that, and I think it warrants knowing more information to have a meaningful discussion here.

I do agree that overall, game developers work their assess off and often don't get the appreciation or financial compensation they always deserve, and the rental market is sort of a thorn in the game developer's side.

Still, we have to appreciate consumer demand. When a game ships, not everyone who would want to play it has enough personal demand to buy it at full price. I think the existance of the rental and other markets is a reflection of that overall demand like any other industry as Fletch points out above. How do we increase the demand/value factor for consumers? By having better overall product. I'm not saying that the existing games don't have a lot of greatness in them, it's just the overall value of product as a whole simply don't offer enough appeal yet to have a mass market explosion in sales.

Innovation. Innovation. Innovation.

[ReNo]

Innovation isn't a sure fire path to market glory though - plenty of more innovative games bomb while plenty of "me too!" titles earn their developer's a packet. It's easy to see why developers are so often tempted to tackle the established genres that they have a guaranteed market for (provided their product isn't shit).

It's going to be really interesting to see what happens with the Wii, which is really the cmost obvious and drastic example of gaming innovation in a long long time. Will it really draw in hoardes of newcomers as so many expect, or will it just be something new for those already interested in gaming to play with?

[Izuno]

Innovation isn't a sure fire path to market glory though - plenty of more innovative games bomb while plenty of "me too!" titles earn their developer's a packet. It's easy to see why developers are so often tempted to tackle the established genres that they have a guaranteed market for (provided their product isn't shit).

It's going to be really interesting to see what happens with the Wii, which is really the cmost obvious and drastic example of gaming innovation in a long long time. Will it really draw in hoardes of newcomers as so many expect, or will it just be something new for those already interested in gaming to play with?

When I say "innovation" i mean the entire package from idea to consumer purchase, not just developmoent of a new gameplay type or something.

If a developer creates a new technology that at the time absolutely thrills everyone like GeoMod in Red Faction, it only becomes an "innovation" if it attracts consumers and spawns new gameplay in other games etc that further attracts gamers.

The Wii controller innovation, yes...time will till if it is a true innovation or will fall by the side of Virtual Boy from the early 90's.