I’ve been playing video games for almost 35 years. I’ve been reading gaming media (magazines and then Internet sites) for about 25 years. The game press has always been an essential part of marketing games. Developers and publishers use the gaming press to hype games and spur sales. What’s so important about the gaming hype machine? Why is it so important to get those Day One sales?
The answer is simple: the game industry is broken.
The Problem
In March 2013, Square Enix published a reboot of the popular Tomb Raider series. The new game, titled simply Tomb Raider, sold 3.4 million copies during its first month of release. Soon after, Square Enix announced it was “very disappointed” in those figures, revealing it had estimated TR would sell between five and six million during the first four weeks.
A few years ago, over three million copies sold would have been a success. (Popular 2003 game Knights of the Old Republic sold only 2.2 million.) Now it’s “very disappointing.” There is a fundamental disconnect between the cost to make AAA games and the price consumers pay. While the latter has been steadily rising (easily hitting nine figures for development plus marketing by some estimates), the cost of games has been declining once adjusted for inflation.
This wouldn’t be a problem if the market for games was expanding fast enough for volume of sales to keep up with cost of production, but it hasn’t. While the occasional huge hit comes along to keep companies afloat, the industry as a whole is sick—not dying—just weak and stuck in endless cycles of trying to get more money from gamers.
Day one DLC. Online passes. Pre-order bonuses. Collector’s editions. Micro-transactions. And, of course, endless hyping through the gaming press. Developers try to cut costs, overworking their employees and cranking out endless sequels that can re-use assets. There’s some good things happening in the indie space (and some not-so-good), but, much as I like indie games, I don’t want to lose AAA gaming, and that is what is slowly happening.
The gamers are out there. The Xbox 360 and PlayStation 3 have sold a combined 166 million consoles. If even half their sales are to individuals who own both, that’s still 120 million console gamers. Plus however many play on PC (Steam had 75 million users as of this past January). So why is it so hard to sell to just a fraction of that user base? Why are gamers not buying games?
Two reasons: games cost too much, and there are too many of them.
The Cost
I know. I just said games are cheaper than ever. But $60 is still $60. If you had $60 to spend, would you want to buy one game or go see six movies? (Or, more likely, go see Guardians of the Galaxy six times.) Or would you want to buy two or three games that have been out for six months to a year and are on sale (or used)?
Demographics play a role here as well. As gamers get older, disposable income goes down, not up. The ESA tells us the average age of a gamer is 31. Many thirty-one-year-olds are spending money on diapers and formula, not games.
All the add-on content, the push to pre-order, etc. just drives gamers away even more. We don’t want to be pressured into making a decision on something that is not exactly an impulse buy.
The Flood
One thousand, seven hundred, sixty-six video games were released in 2013. Let me repeat: 1,766 games released in 2013. Yes, a lot of those were indie titles or free mobile games, but, still…There are simply too many choices for a gamer. At $60 each, a gamer can’t afford much. A GameFAQs poll shows slightly more than half of gamers buy less than one game each month, and only about 1 in 5 buys more than two per month.
Just as a thought experiment: 200,000,000 (120 mil console + 75 mil PC) gamers buying an average of 15 games per year equals 3 billion games sold divided by 1,766 games available equals 1.7 million each. Now take away the big hits (GTA V sold 32 million copies, Minecraft has sold 33 million) and there’s the reason Tomb Raider “struggled” to get to 3.4 million. And those guesstimates are all probably high.
Lack of money and playing previously purchased games are the second and third biggest reasons for not buying new games. (Ennui is the biggest reason. Waiting for a game to go on sale was way behind.)
The Solutions
Amazon, in its dispute with Hatchette, published an open letter in which they stated a 33% price drop of an ebook (from $14.99 to $9.99) results in a 74% increase in sales. While there is some dispute over the accuracy of their numbers, it bears investigation. Indie developer Jason Rohrer argues sales hurt gamers and developers. What’s interesting in his argument is how lower prices boost sales, and the flat sales figures when the game is at full price.
If Square Enix releases Rise of the Tomb Raider (the 2015 sequel to 2013’s TR) at half the price ($30), will it sell twice as many (or more) copies? There’s no way to predict that, but it needs to be tried. It will take a publisher with more guts, industry clout, and deeper pockets than Square Enix to test the theory.
Publishers also need to slow the pace of development[1]. Yes, that’s going to mean layoffs as development studios contract or close down[2]. On the other hand, maybe development studios could hire more workers and work them fewer hours. With fewer games from which to choose, more copies of each game are likely to be purchased. Again, it will require a publisher that can afford it to suck up a decrease in immediate profits to slow down the release cycle.
What To Do
If we want to see the game industry thrive, I suppose we could all buy a new AAA game every week. I don’t have the money for that, and I doubt you do either. Beyond that, we have no control over the business end of this business. We could call for a “gamer strike,” but what good would that actually do? Even if a substantial percentage of gamers pledged to not buy any games for a period of time, we would all rush out at the end of the “strike” and buy everything we passed over.
It falls then, to simply spread the word. More people on the gamer side posting more articles like this one. We need to make clear to the gaming industry we are not all whales to be bled dry. What would help is to avoid the Day One rush. Don’t pre-order your game or buy it immediately; wait for it to go on sale before buying. If early sales figures start falling while numbers during sales shoot up, maybe the publishers will get the message.
On the other hand, maybe they would just hit us with more pre-order bonuses. What’s that? I can get a unique helmet for pre-ordering Elder Scrolls VI? Where do I pay…
[1] It’s not like they get these games out on time anyway. Has there been any AAA game in the last decade that actually met its initial release date?
[2] I’m not going to address it in detail here, but the development method for games seems to also be terribly inefficient. I’m thinking game development studios either need to adopt a Pixar-style cycle where four games are always in development, just at different phases and with different teams; or, a typical film-style cycle where contract workers are used for specific production jobs and then move on to a different development house. Both methods would require geographical consolidation, something game developers are not used to (and may not like).
