Shane Bettenhausen (1up) rumours canned 360 project?*

I was under the impression that everyone who's played the latest build thinks this game looks amazing. You're not basing your comment on the E3 fiasco are you?

 

And that is a point of concern for publishers. If no one lese, or collectively, sales cannot fill the void ultimately publishers won't be able to create as many titles. They simply will have to reduce costs to meet these realities. You cannot operate as if there are 1.3B in software sales available in a 6 year window if they don't exist--you will be in the red.

And that is a hard proposition to swallow for publishers (EA, Ubisoft, Activision, THQ, Midway, Take-Two, Vivendi, etc) -- especially if MS was in a position to do so, and failed to act on such in favor of short sightedness, or worse, alterior motives that were a) not to create a growing market but b) to harm the competitor who was and c) all for the goal of using the market as a trojan for perephrial goals.

I am not challenging the fact the 360 will continue to lead in software sales. I linked to a post from summer 2005 where I predicted that due to Live (and the fallout of demos, trailers, closer developer ties to gaming communities, the effect of online gaming and social communities on software adoption) that the 360 would have excellent potential for generating improved software sales and creating new revenue channels through DLC. The 360 has excellent software sales for its market penetration as well as compared to the competition.

It isn't even a content when comparing it to the Wii or PS3--as long as your title fits the demographic of course.

We can agree on that much. And at this point I have strong reservations about total software sales in 2011 topping PS2/Xbox/GCN software sales at the end of 2006. Which is the angle I am exploring through a publishers perspective, because ultimately they are the ones making most of the games and most dependant on strong software sales to fund titles and to develop new, innovative games. Risk taking becomes difficult when development costs are high and the install base is smaller. As one commentator at Gamasutra put it (I believe), right now the 360 numbers are good, but they are hit or miss. You either have a hit, or you don't. There is no inbetween like there was on the PS2.

I don't think it is unique at all--it is where the industry has grown over the last decade. PS1 was the same way, with over 100M units sold (in 5 years or so?). The N64 reached nearly 34M in that same generation. So it isn't 1 generation, but 2 generations. A decade of growth where the lead console was topping out at 100M+ units.

Even if the PlayStation and PlayStation 2 were anomolies, the reality is the game making business has developed and grown around those realities. For that to come crashing down would cause SERIOUS damage to game makers.

Can anyone honestly say the Xbox 360 is going to offer 100M+ units in 6 years? Will PS3+Xbox 360 sales best the 147M total units between them last gen? Will Wii+PS3+360 sales best the 168M from the three companies last gen? Or more pointedly, the software sales (notably profits, not just number titles sold) those three generated combined last gen?

I fail to see how the 360 doing "better" than the poor Wii and PS3 sales is "all the evidence". Especially when it doesn't address my core point of why there is reason to be concerned. Namely:

And why is this a cause for potential concern?

Because the publisher ecosystem has spent the last decade with a lead-console with 100M [end] units.

"Strong" 360 software sales against the pathetic software sales of the Wii and PS3 and the dieing PS2 are all spin if those "strong" sales are substantially lower than historical figures that publisher staffing and costs are built around.

Put more simply: The PS2 sold over 1.3B pieces of software last generation (123M units, 10.6 attach rate). The Xbox 360, to sustain a publisher market accustomed to such sales to survive, would need to:

@ 40M units: 33 titles per unit sold
@ 50M units: 26 titles per unit sold
@ 60M units: 22 titles per unit sold

It doesn't matter if the 360 is the "most profitable and best selling" platform if you cannot pay the bills at the end of the month. And it doesn't matter who is in the lead--the current situation should be a cause of concern. Be it

Sony's failure and incompetance
MS's lack of vision and execution
Nintendo's abandonment of tradition games (and publishers making such)

All three have a fair share of blame.

And it is that reason that I am chastizing MS management. They came strong out of the gates in 2005 and early 2006, but continued to miss milestones--both in their own projected sales as well as price points. These blunders--in addition to their obsession with 2008 profits over and above generational profits and partner health--are a cause for concern.

 

Actually, the PS1 got to 100M units in 10 years, and the PS2 got there in 6 years. So there's been a significant growth in that respect.

I think you're looking at this the wrong way. Because competition is so fierce between the three platforms, they make each other look bad. But in reality, all of them are doing better than they have been in the past. The PS3 suffers from that more than the others, because they profited more from the failure of the other two in the previous generation, but also because they only recently reached a fair price-point that is going to appeal to larger numbers of consumers and are only recently getting games out that are comparable to the previous generation (vs original IP) and are showing what their system brings to the table to the PS2 audience.

I agree that Microsoft could have done more, but their gaming division has had some limitations put on them after the loss ... pardon ... investments made in the previous generation. They've taken some interesting risks though that I've already discussed I didn't agree with as a consumer, but that still seem capable of making the system more successful than last time and may have been the right decision for them.

In short, I think that the three platforms are bringing it on pretty well and that's what's making each of them look bad in different departments. But in the end I am convinced that we'll see console sales go up at least 50% vs the previous generation as each of the platforms appeals to a larger audience and expands the market, and with a lot of potential for more. That and the ability to share IP over platforms (which was done extensively already on PS2/Xbox/GameCube in last gen), as well as the new modes of revenue available through PSN, Live and VC, should give plenty of potential to expand the market considerably.

 

Yeah, I was off on the PS1 numbers. 5 years, 9 months for the PS2 (Release: March 4th, 2000 (Japan); Hit 100M: November 30th, 2005) and 9 years, 6 months for the PS1. Of course the PS1 hit 72M in 5 years WW (which includes the 1 year period of Japan-only status) and 80M in 6 years.

I point that out because 70% of PS1 sales were done in its first 5 years (4 years if you exclude the meager first year sales when it was exclusvely available in Japan).

Footnotes aside, within 5 years of WW availability both the PS1 and PS2 exceeded 80M sales.

Is the Xbox 360 going to do that?
Is the PS3 going to do that?

Right now I don't see them combined surpassing that--let alone PS1+N64 or PS2+Xbox--and that is my beef.

Number specifics aside, developers targetting that demographic are going to see a decreased marketshare in 2010 (PS3+360) than they had in 2004 (PS2+Xbox) and 1999 (PS1+N64).

Am I the only one concerned with that?

And I think you are looking at it the wrong way.

Yet I failt to see how Sony is doing better than they have in the past. They have fewer customers, huge losses, and fewer exclusives than they have had.

Yes, MS is doing better than they did with the Xbox. Wii is better than the GCN and N64 to this point.

But from the perspective I am persueing, that of a publisher who has to make money selling games to fund new games, I look at the big picture: Is the Wii+PS3+360 better than the situation of the PS2+GCN+Xbox? It doesn't really matter to me, the publisher, if Nintendo and MS are healthier if the total market is weaker.

While the console market has potential to grow, it hasn't shown 50% growth in a single generation in a long time. This generation also poses the clear problem of price: the 360 and PS3 entered high and won't hit the same lows as quickly as their predecessors. And by the time the reach lower price points their hardware will be aging and new consoles on the horizon.

And to put it into some perspective, last generation by the 3rd holiday saw the PS2 hit 49.6M units in 2002. Combined PS3, 360, and Wii totals are dwarfed by such. And that doesn't include Xbox (8M) and GCN (over 11M) sales. By the end of the 3rd holiday last time around (2002) the market had aboiut 70M units in the market. At the end of 2007 the market is looking at about half as many installed units. I seriously doubt PS3+360 sales at the end of 2008 will exceed the nearly 50M sales Sony posted with the PS2 by the end of 2002.

I don't see that as a positive for publishers at all.

 

Whoa, dude, have you seen any sales figures lately?

That said, I agree with most of your points.

BTW, 360 cannot do 100 million sales. For starters, and for reasons I'd argue are entirely not MS's fault, it cant sell in Japan.

I think a reasonable ceiling on 360 is 50 or 60 million. If it's profitable and so forth, nothing wrong with that. It isn't going to be PS2. Neither is PS3.

I really hope this canceled game isn't Alan Wake. Secondarily I hope it's not Banjo 3. Beyond that I care less and less. I'd like it to be the Peter Jackson Halo project or the Viva Pinata sequel, because I dont care about those at all.

 

Yes, but see that's one important distinction that so many people seem to be overlooking. That difficult and expensive first year has now been almost worldwide, versus just in Japan. It's even seen some hardware changes in that first year, that did not affect the rest of the world. What if next year was should be considered the PS3's first year from a US perspective, if you want ot compare it to the PS2? Do you think that would be completely off the mark? I'm expecting that many would, but I'm not so convinced. Don't the first teething problems, a full year of decreasing component costs etc., even though they all happened in Japan, count for something? The PS2 started at the same price level in Europe as the PS3 did, and it's been hugely successful there, even more so than in the US (in terms of market share). So what if then the price is the factor that really dictates the sales curve here?

The 360 nearly has and the PS3 will hit 299 next year. This was the launch price of the PS2 in the US (again European price was double that). Will those two consoles have less value at that point in the market than the PS2 did at that time? I'm not so sure. In fact, they will have ramped up a great deal of games and services when it hits that price point, making it all the more appealing. 2008 will be the year with a lot of big exclusives, big multi-platform games, and sub $300 prices. The question is, once the sales curve starts there, how long will it be able to continue? I think for a very long time ...

That's the Wii factor, right? The Wii started off at a different sales curve, and will have sold, what, 14 million in its first year? So combine that with the PS3's sales of say 6 million in its semi-first year, probably quite a bit more if you want to be fair and include Europe until April 2008. Add something very similar for the 360 in this year, and you've got a very respectable number of console sales.

Now my prediction is that the Wii sales will trail off over time, but the 360 and/or PS3 (in what ratio is a different discussion) will pick up where it leaves off. I'm not sure how many sales the Wii is taking away versus sales it is actually adding to overall market sales, but I think it will be largely additional. I don't think there are going to be that many people getting a Wii this gen to take up the same role that the PS2 did last gen. Most likely it will at best postpone the sales of some 360s and PS3s ...

But the overall package is better. I guess we're talking about a different 'doing better', you're talking about first year sales (for which I still think you can't really compare) and market share, and I'm talking in terms of consumer value. Now as I said, I think all three consoles are bringing a better package to the table, and armchair analyst as I am, the increase in quality and value will bring in a larger market share for all consoles combined, irrespective of which of those three takes the biggest piece of the pie. Because the other two are doing better, it is very likely that the PS3 could do worse than when it dominated the market in the previous generations. And that will then obviously lead to a smaller amount of sales compared to those generations. However, how much of that will be offset by a growing market is the question. A similarly interesting development are handheld games in that respect. They too may take some market share from the console market, but they are also growing the handheld market significantly beyond what it was in the previous generation.

The only real concern here is that the Wii is so different from the other two. In the previous generation you could target all three platforms with your multi-platform games. But now at best you can lump in some Wii development along with a PS2/PSP release. In some respect, that will take away from the 360 and PS3. Another complicating factor is how much Nintendo will dominate the Wii. It's a very complex situation, and the risk for publishers has increased to some extent, that's certainly true. There is room to make more mistakes.

New consoles by whom? Their hardware ages relative to price, not relative to new consoles. Significant to note in this regard is that even Microsoft has indicated that they see the potential (and/or need) for the 360 to last much more than 5 years. It's an issue that matters.

The Wii/360/PS3 sales this year and next year combined will top 60M, that much I'm convinced of. How that compares to last gen, I think will depend on how you are willing to count the price/performance value factor.

Your last sentence in this paragraph though is a good point and a real possibility. It may be that developers targeting the 360/PS3 will have to wait longer for their return of investment, and some of their success at taking advantage of potential market growth is depending on how well they are able to capture some of the Wii pie.

Maybe not, but looking at the whole PSP/DS/PS2/Wii/360/PC/PS3, with stuff like Steam, PSN, Live and VC adding different revenue streams, there's a lot of potential for sharing resources as well as targeting one specific platform to create a standout title.

All in all I think you may be right that it will be harder for developers, and there is more risk for long term projects to "get it wrong". But there are also more opportunities. In the end, I'm inclined to look at the appeal of PSP/DS/PS2/Wii/360/PC/PS3 games to the market, and I cannot help but think that these platforms will make gaming more appealing to people in general, and thus the market as a whole grows. Now if Nintendo is the only one growing that market and dominate their own hardware with their own software, and at the cost of the other platforms, then that's the only scenario I can think of where the pie in some respect will be getting smaller for other publishers, including the 360/PS3. But I'm not convinced that is true at this point.

 

There is one game that is having a big lawsuit over what code it uses. It would be easy for Microsoft to determine whether or not what is going to happen with that suit just by looking at the code. It may even be that the project has been in trouble before and that the project leaders needed to publicly blame a certain other company because Microsoft was asking questions. All this could well result in a canned project and someone responsible being fired. I'm not saying this is definitely what's happening here, but it is at least a possible scenario, especially with the other party involved probably being so important to Microsoft ...

 

He's talking about Too Human. Remember the Silicon Knights lawsuit against Epic?

Tommy McClain

 

VP sold nearly 500k actually. Blue Dragon sold > 500k as well, I believe.

It was actually those two games which leads me to believe both Banjo and LO can break 1million.

 

Well, I fully expect the combined sales from PS3 and 360 to be greater than anything posted on the PS2. And lets be honest, the PS2 purchasing trends really did not reflect a 100million userbase.

i.e. GoW 1, an excellent title, released in the golden period of PS2, sold 3million units.

MS was able to move >3million units of Gears of War on the back of a 7-8million user install base.

There is more to it than just install base, purchasing patterns are also hugely important. I think what the Wii had done (will do) is pull away the majority of casual gamers, who hardly purchased software anyways, and what we'll be left with is the PS3 and 360 consisting of core gamers who do buy software on a regular basis. So I believe a 1:1 comparison of install base is over simplifying the situation.

Here's another example:
In 2004, PS2 has an install base of 75milion. Xbox1, was 17million.

Need for Speed Underground 2 was the top selling EA title for Xbox, and #2 for PS2 (after NFS1).
PS2 Sales: 6.5 million. (7.3% attach rate)
Xbox Sales: 2.05million. (12% attach rate)

So here we see evidence of the casual consumers within the PS2 userbase, and how a more hardcore userbase can generate signiciantly higher sales ratio of sales:install base.

This I agree 110%.

 

What? "Slate"? "Big Up"? What're you talking about?

You're the one who refereed to VP as a 'flop'. Not me.

If a pinata simulator that is a totally new IP, can break 500k, why in the world couldn't Banjo? A well established IP, which has been AAA in the past, really shouldn;t have too much trouble. Escpecially considering it's userbase will be 2x larger than the one VP launched to.

Blue Dragon was also a new IP and sold ok, Lost Odyssey has much more western appeal than BD did, so it should be able to pass 1million pretty easily as well.

 

You got to give Shane some credit. He has been saying Street Fighter 4 in the 1up podcast multiple times since before last year's E3. And you know what nobody else was saying it. It just take some time for some of his rumor to come out.

 

Is that 400k worldwide? I've never seen HS sales released outside of NPD, that's why I ask.

 

If you throw enough at a wall, some of it is bound to stick. I've beens saying Street Fighter 4 would come since the DC days. I turned out to be right in the end, but my prediction surely wasn't timely.

 

Well we will know next week won't we? I am putting my money on one of the Rare game.

 

Wrong. If by criticise, you mean 'speculate why it hasn't done better' then yes. That's not unusual whe it's a 1st party title, meant to compete with million sellers like GoW or Forza.

You mean on a platform stereotyped by you to have FPS racing games and Madden.

The platform itself has a very wide diversity of games in all genres.

Sales were fairly poor, but given the factors you mentioned, the fact it did manage to break 500k tell me that the much more western oriented Lost Odyssey shouldn't have too hard a time reachime 1million, providing it's a quality game of course.

So would I. If I expect LO and BK to break 1million, I expect GoW2 to break 4, and Alan Wake to break 2.