Next Gen Outcome Unpredictable?

[j^aws]

Analysts expect decline in 05/06, but industry sources remain optimistic

Rob Fahey 15:32 07/07/2004
Tough period ahead for the industry, say market watchers - but is the prediction reliable?


A new report from analyst firm Piper Jaffray is predicting that the growth of the video game industry will slow significantly in the "transition" years of 2005 and 2006, as the arrival of new hardware causes overall sales declines.

The company's market overview of the games industry, released last night, carries few surprises for the industry - predicting that the transition period will come into effect in 2005/06, following on from a growth year in 2004 which could see game stocks rise by up to ten per cent.

However, while this analysis does not disagree with the bulk of predictions for the coming years, a number of sources within the publishing industry have recently voiced their belief that the coming "transition period" will not follow the same model as the previous one - which is largely the model being used by analysts for their predictions.

Key factors such as the hugely staggered release of the main home consoles (Xbox 2 is expected to arrive in late 2005, with PS3 not arriving until at least 12 months later and Nintendo's Revolution somewhere in between), the presence of the PSP and Nintendo DS in the market, and the determination of publishers to continue to drive sales of current-generation software through the transition period, are all quoted as key differences between this period, and the one that occurred some five years ago.

"Everyone learned lessons from the last transition," a source at a US publisher told us today. "Publishers, platform holders, retailers - we all got stung last time. Now we know that we have to keep supporting the old platforms, Sony knows that it has to make the new platform as easy as possible to develop for, the retailers know that the current stuff is going to be their bread and butter even after the new stuff arrives. These are pretty important lessons."

"Hopefully when you combine those lessons with the fact that PSP is going to go a long way to smoothing out the market, and Xbox 2 is launching so early that it might have that effect too... We'll see a transition period that's still going to be tough for small publishers because of the development costs involved, but for the bigger players, they should be able to keep growing through it."

Our source, who declined to be named as his company has not yet issued detailed guidance for the 05/06 period, said that despite analysts expectations of a decline, there is a mood of "cautious optimism" among the industry's larger publishers about the transition. "There are a lot of problems we have to solve, but I think people feel that this time around, it doesn't have to hit us on the bottom line," he concluded.

Source

All bets are off! Will Next Gen be a clean slate for all 3 players.

 

[cthellis42]

I wouldn't say "clean slate." Offhand I'd say it'll be harder for Microsoft. Even just with the reasons stated in the article, an early start will miff their developers somewhat, and the likely lack of backward compatability will mean that those who continue supporting the Xbox won't necessarily trickle over to Xbox 2 (Though it could through networkability), while the PS3 and N5 will to an extended degree. (And unless XNA beaks serious boundries, creating Xbox 2 games while simultaneously supporting Xbox will not be a trivial matter. And Microsoft will be pushing cross-wise, since they're betting on new-system advantage, a headstart on the next generation, and perhaps a more lucrative business plan.)

The presence of the DS and PSP, unless they turn into another Virtual Boy and/or 3DO, will also give inherent advantages to Sony and Nintendo, who get the added visability and the ability to cross-market their games (and other capabilities) to notable effect.

The staggered approach also gives more advantage to them, as people will expect even N5--and especially the PS3--to be more powerful, and if developers are laggin behind and the Xbox doesn't have titles to really capitalize on in the first year, many will be waiting to "see the other guys" before they make any decisions. (Which could in turn discourage developers from supporting it strongly, which in turn makes it less popular...)

Unless some big, gaping flaws surround Sony and Nintendo (from their next generations or, by extension, their portables) I think Microsoft is going to have to get a lot very right to pull things off even to the level they have this gen. (Though not their existance as a PC port box--that's a given. )

Still, I'm not sure just how far to take the quoted "Publishers, platform holders, retailers - we all got stung last time." There'd been plenty of time necessitating change, and many DID keep on supporting the PS1 (cheap and easy, with a big installed base) but wanted to get off the N64's expensive medium regardless. What they really "god burned on" was Dreamcast's handling. Though I imagine they were sour on PS2's jump in difficulty as well. The Xbox wasn't even a factor.

 

[Evil_Cloud]

Nintendo needs to improve intern productivity and third party relations.

Microsoft needs to improve on first party development, should get more titles that appeal to more people (RPG's for example), and should get titles that might change their position in Japan

Sony should allow more titles to be released (like Sonic CD remake for PlayStation 2) and maybe improve on first party development as well.

That's my wishlist for next generation.

 

[Brimstone]

I'm not so sure MS will launch a new console in 2005. The nice advantage is that they would have the market segement that loves new technology all to themselves for 12 months at least in America. This group is probably more inclined to have dsl/cable and willing to sign up for the Live gaming service. Subscriber growth in Live is crucial for their online model to work.

It is so ironic that creators of one of the most popular online games for the PC, Everquest, used to work for Sony but now started their own company with Microsoft as the publisher. The game technology that they're using is the new Unreal 3 engine which is being designed with Xbox 2 in mind along with PC's.

 

[Farid]

Sony should allow more titles to be released (like Sonic CD remake for PlayStation 2) and maybe improve on first party development as well.

Sony MUST apply their politics about the approval of some games, or else, that'll open the gates of craptastic games/ cheap port Hell. Like Qroach said in another topic Sony (in this cas SCEA) reject tons of games each years, even that look at the number of games you can find for PS2.
This politic, is needed for keeping a (more or less) good level of quality on PS2, and especially it's needed to help the market being flooded by games (and therefore there's less market shares for eaxh games).

BTW i agree with you about the fact that Sony Europe (the US and Jap studio are doing a good job, imho) need to improve the quality (gameplay wise, because technically they're very good) of their games.

 

[Evil_Cloud]

Sony should allow more titles to be released (like Sonic CD remake for PlayStation 2) and maybe improve on first party development as well.

Sony MUST apply their politics about the approval of some games, or else, that'll open the gates of craptastic games/ cheap port Hell. Like Qroach said in another topic Sony (in this cas SCEA) reject tons of games each years, even that look at the number of games you can find for PS2.
This politic, is needed for keeping a (more or less) good level of quality on PS2, and especially it's needed to help the market being flooded by games (and therefore there's less market shares for eaxh games).

BTW i agree with you about the fact that Sony Europe (the US and Jap studio are doing a good job, imho) need to improve the quality (gameplay wise, because technically they're very good) of their games.

I agree that bad titles should be blocked, but there really are some good titles that are rejected without a proper reason.

Explain me why Metal Slug 3 for example couldn't be released in september previous year, but now strangely enough can. Or why Viewtiful Joe was rejected 5 times on end and now is allowed, Sonic Team's proposal of making a Sonic CD remake for PlayStation 2 being thrown of the table...

 

[Pepto-Bismol]

I agree. Console growth is unlikely to be as brisk during the "transition". However, I doubt that its cause will be a new crop of consoles.

It looks like the videogame industry is becoming more mainstream -- and being transformed in the process. Just as coin-ops were ground into a niche market by consoles, the latter now seem threatened by smaller, more convenient devices like cell phones and PDAs.

I guess in a broad sense, the underlying trend seems to be miniaturization ...

Picture a tiny device, thinner than a sheet of paper and smaller than your thumbnail. This miniature accelerometer can give a computer the ability to "feel" movement with such sensitivity that it can detect minute fluctuations in the earth's gravitational field that occur when the moon passes overhead. It can be an aid to aircraft guidance systems and prosthetic medical devices; it can be used to deploy air bags in cars and trucks.

Imagine a sophisticated drug-testing laboratory that is no bigger than the thumbnail-sized accelerometer. This microscopic laboratory tests the reactions of human tissue to toxic chemicals and drugs in an artificial living system. When it is fully developed, this tiny laboratory chip can be mass-produced and sold for less than the price of a pair of basketball shoes.

These tiny devices and many others are being developed at the Cornell Nanofabrication Facility, which this fall celebrated 20 years at the leading edge of nanostructure science.

Source: Cornell Engineering Magazine

 

[Farid]

Explain me why Metal Slug 3 for example couldn't be released in september previous year, but now strangely enough can.

Sony let publishers sells thoses games, only when they're on a compilation (Like the Sega Ages that are will to be released in the US, they're going to have 3 games per CD), or when they published it at a budget price (and sometime , both!).

Or why Viewtiful Joe was rejected 5 times on end and now is allowed,

I heard that the port was totally horse shit back then (just like Killer 7, BTW, that explain why Capcom still do not have a release date for the PS2 version in the US).

Sonic Team's proposal of making a Sonic CD remake for PlayStation 2 being thrown of the table...

A game with only one 16bits game... That after the fact that Sega released a Sonic compilation a few time before, that and the same Sega (or their partners) was trying to release the US version of Sega-Ages.

Sony have to keep their "image" with respect to the mass market, being flooded with 16Bits-like games and craptastic ports (technically), is not a good way to go.

 

[AzBat]

I'm not so sure MS will launch a new console in 2005. The nice advantage is that they would have the market segement that loves new technology all to themselves for 12 months at least in America. This group is probably more inclined to have dsl/cable and willing to sign up for the Live gaming service. Subscriber growth in Live is crucial for their online model to work.

If Microsoft doesn't release Xbox 2 in the US Holiday 2005, I'm thinking Microsoft might ship first in Japan instead. That's based on the assumption Sony ships PS3 in Japan Q1 2006 and that Xbox can't last another year in Japan. That could give them a 5-6 month lead time in Japan. If Sony plans for Holiday 2006 release in the US. Microsoft could also release 5-6 months ahead of them. Putting it in the states in Summer 2006. This could give them another Holiday season(2005) for Xbox and give developers a couple more months to work on launch or Holiday 2006 titles.

As time goes by I'm thinking a launch in Japan earlier or at the same time as the US launch is looking more and more likely. They've got to do something in Japan soon. If they don't then Xbox 2 will never have chance there. Maybe that's why they decided to cancel TFO? So they could work on Japanese RPG for the Xbox 2 instead. Peter Moore has already concluded that they would have done better in Japan had they offered a Japanese RPG at launch.

Tommy McClain

 

[Evil_Cloud]

Sonic Team's proposal of making a Sonic CD remake for PlayStation 2 being thrown of the table...

A game with only one 16bits game... That after the fact that Sega released a Sonic compilation a few time before, that and the same Sega (or their partners) was trying to release the US version of Sega-Ages.

Sony have to keep their "image" with respect to the mass market, being flooded with 16Bits-like games and craptastic ports (technically), is not a good way to go.

Hence the word remake, they wanted to make a 128-bit remake...

 

[Farid]

Hence the word remake, they wanted to make a 128-bit remake...

Why did they "ask" Sony if they can do a remake, before even showing something... and why on PS2 only, they sold millions Sonic games on GC?

On the other hand, when you see Sega's DC ports to PS2, and GC, let alone the Sega Ages, i'd have little faith into a "remake" made by Sega lately.
(Btw, If the remake was a Klonoa 2-like Sonic CD, i think there's won't be any major problem, but if it's still a Full-2D platformer...)

 

[Farid]

If Microsoft doesn't release Xbox 2 in the US Holiday 2005, I'm thinking Microsoft might ship first in Japan instead. That's based on the assumption Sony ships PS3 in Japan Q1 2006 and that Xbox can't last another year in Japan. That could give them a 5-6 month lead time in Japan.

6 Months lead in japan will be peanuts actually. IMHO, of course.

Maybe that's why they decided to cancel TFO? So they could work on Japanese RPG for the Xbox 2 instead. Peter Moore has already concluded that they would have done better in Japan had they offered a Japanese RPG at launch.

There's TONS of RPGs on PS2, when i say tons, i'm serious, ONLY Final Fantasys and Dragon Quests sells boatload of copies, the onlys RPGs that sold well on PS2 except FFs and DQs were Kingdom Heart (800K) and Tales of Destiny 2* (750K)

*(BTW in the US, the psone Tales of Eternia was released under the name "Tales of Destiny 2", which one is a different game from the PS2 ToD2)

On a side note, your site is cool AzBat, nice writing, totally at the opposite of Teamxbox (That's a great compliment ).
You should also remove the flashy green from your signature, i can barely read the "next". Anyway keep on the good work, you can become an excellent alternative to teamxbox.

 

[cthellis42]

If Microsoft doesn't release Xbox 2 in the US Holiday 2005, I'm thinking Microsoft might ship first in Japan instead.

That would be REALLY weird for them... And also something I highly doubt they'd do. They know where their strongholds are, and they want to build their foundations on the most sold ground they can. So while I can certainly see them taking more pains to make sure their Japanese game lineup isn't craptastic, I can't see them LAUNCHING out there. US consumers would feel stiffed, and they'd make for the poorest launch showing of any territory, even if it DID amount to them being better received in Japan. They'd still be given short shrift compared to Sony and Nintendo, and still perform worst there of any region.

 

[j^aws]

The presence of the DS and PSP, unless they turn into another Virtual Boy and/or 3DO, will also give inherent advantages to Sony and Nintendo, who get the added visability and the ability to cross-market their games (and other capabilities) to notable effect.

Are there any figures on the percentage of GC owners who have GBAs or SPs?

There are some truly unpredicatable variables involved here...for instance, a potential PS3 buyer (with a certain budget) may defer their purchase in order to buy a PSP or vice versa until prices went down and staggering sales? Or not buy both...a degree of canibalism? Or how about a pick 'n' mix, buy a DS and PS3 or PSP and N5?

And lest not forget an unpredictable entry into the market by Sega! 8)

 

[cthellis42]

No figures that I know of.

I also tend to think people will end up deferring types to each other (putting off a DS to buy a PSP or vice-versa; putting off a PS3 to buy a N5 or vice-versa) rather than across the gaps. Portables and regular consoles fill different desires, while like-machines tend to just offer different experiences within the same arenas.

I DO think it more likely that someone who's bought a DS will look to a N5 before Xbox 2 or PS3, and someone who's bought a PSP will be more likely to seach out a PS3 before the others... (And if it's a matter of money, then maybe they'll fill in gaps with cheaper/older systems they don't have, or complementary games... If publishers are going to be supporting this gen more--and for Sony and Nintendo to be looking at system-linking--then people may just put off next gen for long enough to get a good look, while sating their urges with the games they'd want anyway.)

Either way, I think the Xbox 2 will be at the losing end of ALL those situations unless there are some PC crossover devices that will support and functional gaming use on the X2 as well.

 

[passerby]

the onlys RPGs that sold well on PS2 except FFs and DQs were Kingdom Heart (800K) and Tales of Destiny 2* (750K)

Anyone can explain the popularity of ToD series? Once Tales of Rebirth was announced to be sort of "spiritual successor to ToD", its "most wanted" rating shot up the charts.

 

[Nick Laslett]

From a personal perspective, I plan to buy a PSP when it is launched in UK. This will probably be spring 2005. If there is no region coding then I might get it on US release.

I'm happy with my PS2 and have a stack load of games still to play and a long list of titles I am looking forward to. My daughter is 3 years old and I expect in the next 2 years that she will start to play Eyetoy, Singstar and Disney Dancemat game. I also have the new Logitec wheel for GT4 and WRC3. Along with the Network adaptor, I would like to see these things get a little more use.

Christmas 2007 is the earliest I would consider investing in a next generation console. This will probably be a PS3.

I have very little time to play videogames and it takes me about 3 months to finish a game. Of the titles I received at Christmas I have completed/played to death 3, with 2 remaining untouched. I should be ready for the next batch of games come December.

I still play the classic in my library on a regular basis: Rez, PES3, Burnout 2, GT3, Getaway (Very theraputic unleashing ultra violence for a hour), Timesplitters 2, SSX 3.

I see no immediate need for a new generation, but white hot technology could easily change my mind. What will the next generation games give us that we don't have now? Developers have hardly scratched the surface of optimising the power in the PS2, Xbox and GC.

 

[London Geezer]

Developers have hardly scratched the surface of optimising the power in the PS2, Xbox and GC.

Now now let's not exaggerate...
Considering no one will ever get 100% out of any platform, i think devs are getting close to the top performance they will ever get out of those systems, whatever percentage that is, which does not equal "they're getting really close to 100% performance".

 

[Evil_Cloud]

Developers have hardly scratched the surface of optimising the power in the PS2, Xbox and GC.

Now now let's not exaggerate...
Considering no one will ever get 100% out of any platform, i think devs are getting close to the top performance they will ever get out of those systems, whatever percentage that is, which does not equal "they're getting really close to 100% performance".

Still, Shenmue 2 on Dreamcast was VERY close on getting 100% out of the system.

 

[London Geezer]

Developers have hardly scratched the surface of optimising the power in the PS2, Xbox and GC.

Now now let's not exaggerate...
Considering no one will ever get 100% out of any platform, i think devs are getting close to the top performance they will ever get out of those systems, whatever percentage that is, which does not equal "they're getting really close to 100% performance".

Still, Shenmue 2 on Dreamcast was VERY close on getting 100% out of the system.

Who said that? And 100% of what? Every single piece of silicon on DC? That's quite a feat... Personally, i don't believe that. Also, there's always the difference between average and peak performance. But we've been through this countless times.