This news report from the New York Times provides an indication of impending turmoil for the games industry. The facts are looking us directly in the eyes and telling us of the many hurdles we'll need to overcome if we hope to keep this industry on a path of good health and growth. Publishers aren't new to competition. The players in the industry have been in a heated rivalry since the early '80s. Console transitions are also nothing new. However, as that article points out, those publishers are now facing a brand new and serious confrontation with used game sales and subscription-based online services. The very way games are sold is being threatened.
Listen up, guys and gals in your executive suits. You have an opportunity to evolve. Take that chance before it's too late. Pawn shops were once the only way to get a hold of used games. Nowadays, we have retailers such as GameStop built entirely around this used game model. This isn't good news to companies that rely on the sale of their brand new software; having to witness those same games being resold at GameStop for only $20. From this shift to more price conscious consumers, its become clear that neither the $50 game nor especially the $60 game are the future of this industry. Don't get me wrong. I'm not saying there isn't an audience for those titles. Clearly there is a market (in the millions even) that is okay with the current pricing environment. However, one predicament we've seen year after year is the realization that the traditional audience isn't large enough to sustain all the equally large publishers trying to eat from the same pie. There's a reason we're seeing all these mergers and companies going out of business. There's only so much of that pie to go around, and while some will happily consume the larger slices (EA, Activision, THQ, Take-Two, Square Enix, Sega Sammy and Namco Bandai), the rest of the industry is relegated to the crumbs. People are buying used games for a simple reason. They're cheaper. That $50-$60 price is simply not attractive to the casual consumer. At the end of the day, it's hard to convince a shopper that a $50 game is two-and-a-half times more enjoyable than the $20 one sitting beside it. The five dolla' traditional apple pie, some would argue, tastes just as good as the supposed big-bucks-taste-bud-extravaganza.
Speaking of which, why is it the industry calls $20 games a "budget" release -- as if there's some negative connotation associated with games at that price? C'mon, that's just silly. There's absolutely no reason more developers can't create an engaging game, sell it for $10 or $20 and further be proud of that fact. Namco proved this with the release of Katamari Damacy. Not only would a wider price structure help the industry attract new customers, flexible pricing would also open it up to more publishers. Another solution to the used games trend (I call it a trend because, really, it's only a "problem" for the publishers) is to distribute games digitally. "Used games" are then completely taken out of the equation. Granted this is unfeasible for some of the more high-tech games coming out from the big publishers (but then those are also the games already doing well with a $50 price tag). Digital distribution might instead be a great alternative to some of the more reasonable-sized companies and their reasonable-sized games. The traditional model is-a-changing.
Unless you're like EA and your position is guaranteed, you have two options: evolve or die.
What are your thoughts? Send them to news@n-sider.com.