The Change in the Market

How much has the videogame market changed in the last four years? Following on from last week’s analytical rant about the change at Nintendo, this week I’d like to illustrate some of the changes in the marketplace by looking at the UK retail charts. (The UK market is very similar to the US market, except for changes in license brand value e.g. Madden means a lot in the US but not the UK, and Football Manager means a lot in the UK but nothing at all in the US).

I’ll be using the ChartTrack data for the week ending 12/07/08. I only have chart positions, and not sales figures, but fortunately the application of a little logic allows one to unravel the situation quite comprehensively.

Here are the top 20 titles on all formats that week:

1.    Wii Fit (Wii only)
2.    Lego Indiana Jones (all formats)
3.    Super Smash Bros. Brawl (Wii only)
4.    Top Spin 3 (360, PS3, Wii)
5.    Battlefield: Bad Company (360, PS3)
6.    Big Beach Sports (Wii only)
7.    Wii Play (Wii only)
8.    Beijing 2008 (most formats)
9.    Kung Fu Panda (all formats)
10.    Mario & Sonic: Olympic Games (Wii, DS)
11.    Guitar Hero III: Legends (PS2, PS3, Wii, 360)
12.    Mario Kart Wii (Wii only)
13.    Grand Theft Auto IV (360, PS3)
14.    Dr. Kawashima’s Brain Training (DS only)
15.    Carnival: Fun Fair Games (Wii only)
16.    Wall-E (all formats)
17.    Unreal Tournament III (PC, PS3, 360)
18.    Metal Gear Solid 4: Guns of the Patriots (PS3 only)
19.    Call of Duty 4: Modern Warfare (360, PS3, PC, DS)
20.    FIFA 08 (all formats)

Also, here are the top titles on each platform’s separate chart:

• Wii: Wii Fit
• Nintendo DS: Dr. Kawashima’s Brain Training
• PlayStation 2: Lego Indiana Jones
• PS3: Metal Gear Solid Four: Guns of the Patriots
• PSP: Crisis Core: Final Fantasy VII
• PC: The Sims 2: Double Deluxe
• PC (budget): Football Manager 2008
• Xbox 360: Battlefield: Bad Company

What’s the first thing you notice? Not only is a Wii title number one, six of these titles are Wii exclusives (and one a DS exclusive) with the only non-Nintendo platform exclusive being Metal Gear Solid 4 which pulls in a wimpy 18th place. That’s not all the trouble in Sony-land, however, as Metal Gear Solid 4 is also the top selling title on PS3 (according to the separate PS3 chart), which means in essence Sony is doing very badly indeed with its next generation platform.

Furthermore, the PSP shows how weak it is too: it’s top charting title (Crisis Core) doesn’t even show up in the all formats Top 20, and in fact limps in at a poor 32nd place for the week in question. Still, Sony are the only company to have challenged Nintendo’s dominance of the handheld space and achieve anything more than abject failure, so the poor chart performance should be seen as reflective of their small market share and not necessarily of the failure of the PSP as a format.

But it’s not all bad news for Sony. Look at the number 2 title: Lego Indiana Jones. Number 2 fast selling title this week, but on what platform is it selling? Well to help you work this out let me point out that it doesn’t appear on the Top 10 list for the PS3, Wii, Xbox 360 or PSP at all, and it’s number 7 in the DS Top 10. Figured it out yet? Yes, Lego Indiana Jones scores second place in the all formats sales charts entirely on the back of sales on the PlayStation 2. 

This actually underlines the horrible situation Sony find themselves in: their new platforms are underperforming badly, but they are still doing okay thanks to the continuing enormous success of the PlayStation 2 – this ameliorates Sony’s shame and saves their cashflow, but it shows that mass market consumers simply aren’t interested in the PS3 yet. Perhaps in a few years when Blu-Ray discs are more established, but right now Sony isn’t firing on all cylinders with its new platforms at all.

I’d like to further underline how titanically screwed Sony are right now by quoting Sony CEO Howard Stringer who this week said: “I’ve played a Nintendo Wii. I don’t see it as a competitor. It’s more of an expensive niche game device”. Yup, an expensive niche game device which is kicking your ass on all fronts. Enjoy your denial, Mr. Stringer, it’s all you’ve got to comfort you other than strong sales on your previous generation of games console.

What about Microsoft, are they doing any better? Well, since Battlefield: Bad Company is the top selling 360 title, but it’s number 4 in the PS3 charts (remembering the number 1 PS3 title is at number 18 in the all formats), one can only conclude that Microsoft while still being far, far behind Nintendo in terms of market performance is at least courting a strong gamer hobbyist following who would generally rather buy a multi-format title on the 360 than the PS3. GTA IV underlines the point: it too must be selling considerably more on the 360 versus the PS3 because it weighs in at number 13 overall, while the top PS3 title is (you’ll recall) number 18.

The funniest thing to come out of E3 this year was Microsoft’s enthusiastic display of love for itself, while simultaneously releasing their “New Xbox Experience”, which is to say, their new 360 interface which strips away the hobbyist-friendly Blade interface and replaces it with something so stunningly reminiscent of both Nintendo’s Mii’s and Sony’s Home that one can only conclude that Microsoft have absolutely no idea what they are doing when it comes to courting the mass market. Do Microsoft really believe they can draw mass market players away from the cheap and accessible Wii by copying key features? Really, this only makes Microsoft look very feeble indeed. They should realise their edge right now is that they have lured the hobbyists away from Sony and Nintendo and work hard to keep them. Trying to cash in on Nintendo’s market (while, of course, denying that Nintendo are having any success) risks alienating the very base of Microsoft’s rather marginal next generation success.

And what about Nintendo? On top of the domination of Wii exclusives (4 of the top 7 titles in the all formats are Wii only), they have Brain Training. This game has been out for two years and is still ranking in the top 20 (14 this week, 12 last week); some weeks it breaks back into the top ten – and this is, I repeat, more than twenty four months after release. This is the power of the mass market – the mass market players don’t want to buy many titles, but the titles they do want can sell in huge numbers, as Brain Training (BrainAge in the US) demonstrates.

Finally, what about the lowly PC? It’s top title – The Sims 2: Double Deluxe – doesn’t even show up in the Top 40 all formats chart at all. The PC market isn’t dead, it’s just considerably less lively than even the PlayStation 2. And let’s not forget that a lot of revenue in the PC world isn’t coming from direct retail any more but rather MMO subscriptions and ad revenues on casual games, so this somewhat obfuscates the reality of the situation.

Overall, the analysis of the market in the UK I have presented here says one thing: Nintendo can make and sell games for the mass market, and are making a fortune doing it. Everyone else is running around like a headless chicken, trying to downplay Nintendo’s extraordinary success this time around (they haven’t been this successful since the original NES back in the 1980s) while simultaneously trying to ineffectively copy Nintendo’s ideas in the hope that this will magically bring mass market players to expensive overpowered machines tailor-made for the hobbyist market.

It’s a golden age... but only if you happen to be Nintendo.

Comments

[zeech]

With all this talk of the "new casual market", I'd be more interested not in rankings, but in absolute numbers.

Are the sales of games like MGS4 and GTA4 similar in quantity to MGS2 and GTA2? (or MGS1, for that matter). Or in other words, if you chart the games based on the person buying them, whether the "hobbyist gamer" charts would have these games as #1, with similar sales to what they were in the past, and the "casual gamers" are actually completely different people.

Are gamers in general drifting towards casual games? Or are gamers the same as they've always been, just that the sales charts are now overrun by the entirely new group of "casual game purchasers"?

[Anonymous]

Am I the only one getting more and more depressed with where the market is going?

1. Nobody tries anything new, almost every game launched these days is ... 3 or ... 4.
2. Instead of focusing on games all the sides are worrying about things like streaming movies and whatnot.
3. Some try to innovate but in my opinion they fail just because the games using the innovations are hardly what you can call games.
4. Graphics are suddenly everything, almost every game is scored on the amount of bloom and bump mapping instead of what the games should provide, namely fun.
5. When games try something new the communities almost all react in a disapproving way, without even trying they condemn the games that try to be different.

I'm sorry to go off and rant so much but reading this kinda reminded in how deep of dookie we all are.

[anonymous]

"3. Some try to innovate but in my opinion they fail just because the games using the innovations are hardly what you can call games.

5. When games try something new the communities almost all react in a disapproving way, without even trying they condemn the games that try to be different."

hehehe, I see what you did there.

[Sirc]

Sony's console is where it deserves to be. I find it hard to justify my purchase of a PS3 aside from street cred. The only really great game on it is MGS4. Resistance? Ok, but not much more than a Halo clone. R&C? Decent. But certainly no Mario. Uncharted? I can't even be assed to buy that. It seems like a relatively enjoyable 10 hour game but nothing special. Heavenly Sword? Hahahaha, ok I'm done.

The tragic thing for Sony is that multiplatform games hurt them, but benefit Microsoft. I will almost always buy the 360 version, and it looks like I'm not alone. The 360's cheaper, the games tend to work better and look better on it, xbox live is better than PSN, more people have a 360 so you get to play with more of your friends, it has achievements (even though sony is starting to copy this, like it does with everything). What does the PS3 have going for it? All I can think of is the dualshock is better than the 360 controller.

This means that, unlike Microsoft, Sony NEEDS exclusives. This fact alone is already a bad enough situation to be in, but then add to that the chronic hemorrhaging of exclusives Sony is experiencing. It's just not very pretty. The loss of FFXIII was the final nail in the coffin. I'm not gonna tell you FF is what it used to be. Frankly it's shit now. But it's clearly still an important franchise to a lot of people.

It's kind of funny how the tables have turned. Not only the Sony-Nintendo success switcheroo but Microsoft too. The xbox was the worst console in my eyes, but this gen, the 360 seems to be the best. Not that that's saying much. This gen seems pretty poor so far compared to the last one. But it's still relatively young so we'll see how it turns out.

Regarding Stringer's comment, it amazes me how such an important CEO can say something this retarded. I mean, I don't expect him to sing the Wii's praises, but at least say something that doesn't make it look like you're living in a completely different reality.

zeech: While I don't think very many gamers would suddenly turn to casual gaming, if anything, I think gamers have at least become older. And something tells me past a certain age, the older you get, the less hardcore you tend to get. Probably something to do with having less time. Though who knows, maybe there is a deeper mental change brought by age as well.

Anonymous: There are so, so many people who clamor for innovation in gaming and lament its so-called sequelitis. Let me be one of the few defenders of tradition. I almost always get more excited about a sequel than an original game. Truth is, I don't really like change all that much. I am perfectly happy with a sequel that stays mostly similar to its predecessor and only adds a few new things that don't alter its nature. In fact, that's what I expect from a sequel. I am part of those whom you say react disapprovingly when a game tries something new. I know that said new thing has the potential to be better than the old, but when, say, a sequel to a game I like is announced, I want to like it. And the safest way for that to happen is to keep it the way it was.

I've seen so many reviews slam a sequel for playing it safe, which I actually see as a good thing.

For example, take the four Ace Attorney games. They're all absolutely identical, and I still love them to death. Not only that, but I actually wish they never changed.

Take Gears 2. It's basically the same game as 1, only they're fixing a few things here and there, the online problems, adding some new guns, animations, what have you. That's what I think a sequel should be like. It gives me peace of mind. Barring some kind of catastrophe (which has happened before), I should like it. And that's really all I want. I want to play games I like.

I know, I know, if we always opposed change we wouldn't be where we are. I'll be right there with you praising a game that has introduced something new once it has proven itself, but until then, all the prospect of change does to me is give me the anxiety that something which was once good could be ruined.

[Chris]

zeech: I will get the numbers, but not for a while. They make you pay through the nose to get them when they're fresh, so I have to wait for the "stale numbers". If I get some through a channel I can publicise, I will share them.

However, in general, and on the basis of the figures I've seen, the old "hardcore" (i.e. hobbyist) market has not declined, but slightly increased. However, the cost of game development has increased by a much larger margin than the increase in sales. The net result is that even though you may now be able to sell more copies of a hobbyist game, your margins are tighter and thus "hardcore" game franchises which used to be profitable are ceasing to be so with such reliability.

In the casual space, most games fail miserably (but the same is true in the hobbyist space) but the successful titles can rack up big, big numbers - 8-10 million units is becoming common for the top titles in this space (The Sims, Brain Training, Animal Crossing).

The winning middle ground does even better though - did I read 16 million for San Andreas or was that just an estimate? Regardless, games which appeal to both hobbyist and a wider market, like the later GTA games, are in a win-win situation.

Games which appeal solely to the hobbyist - like strategy games, for instance - are being relegated to niche market status. But as long as you don't spend too much money developing them, there's profit to be had. Nipponichi seem to have found a great balance in this regard.

Anonymous and anonymous: I'm afraid the bitter truth here is that "innovative" also means "unfamiliar" and games need to have familiar elements to succeed. This doesn't mean that you *can't* innovate - just that you have to be careful doing it.

Sequels sell better than original titles because people know what they are getting. You can, in principle, make an innovative movie because people are drawn in by the star actors involved (although this doesn't mean this actually happens very often!) but there is no equivalent way to get traction in innovative games.

I try to innovate in my game designs - it usually hurts me, as I have lamented in the past. But that doesn't mean I've given up, I'm just getting smarter about how to do it. ;)

Sirc: interesting rant here. The worst thing about the PS3 for me is that there's not a single title on it that I have been able to find that I can play with my wife. Since these days most of my console play is with my wife, this makes the PS3 "dead to me". Sony's utter cluelessness amazes me sometimes, although they are no more clueless than Microsoft most of the time.

I thoroughly agree with your assessment of the effect of multiplatform games on Sony's position.

"I think gamers have at least become older. And something tells me past a certain age, the older you get, the less hardcore you tend to get. Probably something to do with having less time. Though who knows, maybe there is a deeper mental change brought by age as well."

As a games researcher as well as a game designer, I can confirm your intuitions here. The average age of the gamer has increased (as we from the first generation of videogamers have grown up), these more mature players have less time to play, *and* there also seems to be a shift in the psychology of play - younger players are more willing and able to attempt the most difficult challenges, and thus make better fiero-seekers. Older players seem to lose interest in this to a certain extent.

And regarding sequels, I agree with you here: what a sequel needs to do is deliver what people liked about the previous game. That's why people come back to franchises: they like what's being delivered.

However, one can also include some originality, too: the Final Fantasy games, for instance, are all very different - the mechanics of each is wholly original. I think one can balance the needs for innovation and the needs for "tradition" in a sequel with some care and attention.

---

One last thought on innovation in games: there is a twofold problem with inventive games.

Firstly, its a new franchise so it absolutely has to pick up strong support or it dies dead straight out of the starting gate. This requires support from the hobbyists, as they are the only people capable of finding the interesting games without a heavy spend on advertising, but the hobbyist are also the bitchiest, most unforgiving, most treacherous bastards on the planet, many of whom would rather tear a game down for not being the same as their beloved franchise than spend the time getting to know and appreciate what the new game does that is interesting.

Secondly, if it innovates it requires that players learn new things - and contrary to the popular "games as learning" idea, most players do not want to spend more than a minute or so learning something new. New and novel experience is fun for most people, but applied learning is grueling for 90% of people (and, not surprisingly, the psychological profile of the hobbyist falls closer to the 10% than the 90%).

All this means that it's hard to foster innovation in the games industry. But this innovation *does* go on - new and interesting games come out every year, especially from Japan which has a greater love of the new and novel than Europe or the US. But these games, as new franchises, will always do less well than the established franchises because the existing fanbase leads to greater sales. This isn't a problem - it helps stabilise an otherwise treacherous marketplace - but it is a reason why it always seems that all the videogame developers make is sequels: the interesting titles are largely invisible because they are new and so selling in fewer numbers.

Thanks for the comments everyone! Very interesting reading.

[zeech]

Since I'm not particularly a fan of puzzle games and other kooky games, I draw a strong line between "innovation" and "gimmick".

To me, innovation is something where, when you see it, you exclaim, "Omfg! All games of this genre must have this from now on! And maybe we can patch this in to existing games too. And perhaps we can crowbar this into games of another genre somehow..."

Whereas a gimmick is something cool, but you probably dont want to see it in more than say 3 - 4 sequels.

So if we apply this criteria to my own tastes, then things like mouse control in FPS games, Supreme Commander's stratgic zoom, Shadow of The Colossus' climbable bosses, Devil May Cry's effortless switching between melee and ranged, etc. Also, Tetris' unique format spawned an entire genre, and I guess The Sims creates a new framework for social-simulation games.

Whereas gimmicks might be:
-Katamari Damacy's glom ball (although the way it handles increasing scale could be an innovation)
-Portal (although the tech for rendering infinite portals is an innovation)
-Wiimote (if it worked better at the things it does it might be an innovation, but currently it doesnt do anything terribly well. Maybe with the new motionplus addon?)
-Wiifit (we'll see what they can do with a skateboard, skiing or snowboarding game...)
-Okami, ultimately it was just a normal 3rd person action game with a unique art style and the gimmick of the onscreen brush stroke thingy.

---------------

To me, a bigger problem is not that the industry isnt innovating, its that many new games arent even stealing the best features of previous similar games. Everyone is too busy reinventing the wheel and we rarely move forward.

I mean, really. Imagine how many artists hours have been wasted modeling yet another AK47 or M16? How many programmer hours wasted writing a 3d or physics engine from scratch? (or heck, in my current project, writing a frickin' 2d menu system from scratch...)

[mike]

"Whereas a gimmick is something cool, but you probably dont want to see it in more than say 3 - 4 sequels."

This is an interesting statement and distinction.

I wonder if this is one of the fundamental differences between so-called hobbiest and casual players; ie: a casual player is a person who does not make the distinction between innovation and gimmick, as defined by zeech, while the hobbiest is a person who would.

The reasoning being that casual players do not play sequels or even games of the same genre. They may play one game of each genre or 'gimmick', but have little to no interest in playing a similar game. Therefore making the distinction between gimmick and innovation is irrelevant. Or I guess, simply that casual players prefer 'gimmick over innovation'.

I like this differentiantion better then others like competitiveness, skill, game-literacy, duration-of-play or expense. It just seems to me that even the most 'casual' players can exhibit a lot of the later qualities, but once they start playing "more than say 3 - 4 sequels" and care more about 'innovation over gimmick', you really can't describe them as casual anymore.

[Chris]

Mike: "I wonder if this is one of the fundamental differences between so-called hobbiest and casual players; ie: a casual player is a person who does not make the distinction between innovation and gimmick, as defined by zeech, while the hobbiest is a person who would."

What a great observation! I might counter your later note by saying that this effect is surely a product of low game-literacy: if they had the experience, they would be able to differentiate - and then they would presumably have moved out of the casual end of the spectrum.

That said, there are people who self-identify as casual who do seem to be game literate. I suspect this to be related to a desire not to identify with the psychotic tolerance for difficulty people tend to relate to the hardcore players. ;)

zeech: "To me, a bigger problem is not that the industry isnt innovating, its that many new games arent even stealing the best features of previous similar games. Everyone is too busy reinventing the wheel and we rarely move forward."

Yes, I know what you mean. But there are two sides to this, because about half the industry is simply cloning existing formats, while the other half is "reinventing the wheel". It's the middle ground that's missing.

I find it interesting that what you call innovations includes what may also be considered refinements - this is a distinction I often try to make, between something genuinely new (I would say the katamari mechanics were innovative, but I understand your accusation of gimmicry in that it cannot be exported to another game) and something which improves on an existing system (Halo's simplifying of the awful old fashioned inventory select into a two-weapon mechanic to clarify weapon selection considerably).

Ultimately, one of the problems with the games industry is everyone figures themselves as an expert, and so we're rubbish at pooling our knowledge! What exacerbates this nonsense is that many people just don't recognise the diversity of play styles or worse make "us and them" distinctions about them: 'if you're not a challenge-oriented fiero-seeking nutjob, you're not a real gamer', for instance.

But we're a young industry, and we still have a long way to go.

Best wishes!

[Rik]

A really interesting read as usual.

Personally as a "challenge-orientated fiero-seeking nutjob" - yet OLD with it ;) - this is slowly becoming a new golden age for me, mainly due to XBox Live really. It really is the new "arcade" for me - something I always craved as a younger gamer (and got very little access to due to my geographical location & lack of money) I suddenly have so much access to.

Oh and as for being one of "the bitchiest, most unforgiving, most treacherous bastards on the planet"... you've just made my facebook update for today. I love it :D

[Peter Crowther]

The reasoning being that casual players do not play sequels or even games of the same genre. They may play one game of each genre or 'gimmick', but have little to no interest in playing a similar game.

... you've not seen my wife go through Reflexive, downloading similar casual game after similar casual game and playing each one through to the end, then.

Of course, it's questionable as to whether she's a casual gamer, given the number of hours of play she racks up - but she probably wouldn't self-identify as hardcore.

[Chris]

Rik: glad to have amused! :) You say you're old... I must ask: how old? ;)

Peter: one thing that has come out of the DGD2 data is that the idea that Casual players don't rack up big play hours is fallacious - many people who self-identify as Casual play as frequently as those who self-identify as Hardcore! But of course the actual games chosen are very, very different.

I have a piece on what we found in the distinctions between self-identifying Casual and Hardcore players due to go up next month.

Best wishes!

[Rik]

Chris - Well, it doesn't take too much e-stalking to discover my real age anyway, so I'll admit it here, I'm 32.

I developed my (highly tangential to this actual post) thoughts on this a little more here:
http://agoners.wordpress.com/2008/08/05/the-new-arcade/
One for fiero-seeking nutjobs really only I suspect. I also took a "pilgrimage" to a couple of REAL London arcades. I even got photos to prove they exist. :D I need to blog about that. Or finish off any one of a half-dozen drafts I have going... heh - sometimes I wish I hadn't been sucking into this blogging malarky. ;)