Tuesday, August 18, 2009

Greatest Game Marketing Piece EVER: And it Wasn't Us Edition

The New York Times is the official newspaper of record of the United States. If I knew how to make an underline in blogger you would see this by the underline under the name The New York Times. In the second grade I learned it is the only newspaper title I am supposed to underline in a sentence. This past Sunday the Magazine's cover story was about The Beatles: Rock Band, and it was the greatest game coverage I have ever seen. For the first time, not a single one of the thousand words disparaged gamers, the game's creator was given credit and people like Paul McCartney explained to about 2 million mainstream readers, and a bunch more on line, why they would really like the game.

The article also explained how the game is actually contributing to the music business and consumers were willing to pay twice as much for the twice as many copies of Motley Crue's latest release - "twice" is of course relative and not absolute. All in all, a game with mainstream appeal, was promoted by a mainstream publication, to the mainstream. What a concept.

This is so obviously powerful, it may cause a collective head scratch with us all wondering why EA and/or Activision didn't do this before. Well, they didn't do it now. The closest the article comes to even mentioning the name of either company is:

The first Guitar Hero game came out in 2005. Two years later, Harmonix, now owned by MTV, introduced Rock Band. Together, Guitar Hero and Rock Band (now rival franchises owned by competing companies) have altered the way fans relate to music.

While I am confident MTV is not too happy with the erroneous reference regarding ownership, I am sure they are quite happy with the coverage, as they should be. They jumped into our business through acquisition of Harmonix and are now teaching us how to sell our product. We may be able to hold on to the core, but they are quickly and not quietly about to grab the rest of the world.

Games Sales Are Down: Pointing Out the Elephant in the Room Edition

In America we have a great tradition of putting things on a high enough pedestal to cause serious damage when we knock them off. We build everyone from politicians to athletes into heroes and then celebrate the inevitable indiscretion with excessive coverage in our 24 hour news cycle. Celebrities are followed and pestered until they slip and the media highlights box office failure more readily than the hits. As an industry, we enjoyed the ride to the top, so I guess we must hold on for the ride back down.

For the past year the media trumpeted the video game business as the only thriving business during the world wide recession. We were the lucky ones, people still wanted to play games and we were the beneficiaries. No one seemed to mention the publishers were all still suffering losses associated with the console shift and games were late, the focused on aggregate numbers. Lucky us. But then, last week, we learned misery loves company. The coverage shifted to the fall of the industry and the decline in year to year sales. Analysts lamented the decline was worse than anticipated and the main stream media started to talk about the fall of the sole survivor of the recession. I got calls from friends outside the business asking me if I was alright. Fortunately, I've never been better. If we take a quick look at the real reason for the decline, we may find a bit of comfort, but we should not get too complacent.

The bulk of the sales for most games occurs in the quarter of release, so to get a handle on what was sold we have to look beyond the numbers. Q2 last year was riddled with blockbusters, this year - nothing. Imagine if next year Hollywood decides the summer in Oscar season and the pundits decide to compare the summer films to this year's. How do you think The Reader and Slumdog Millionaire will compare to Transformers and Harry Potter? Not so good.

Q2 2008's releases included:

Metal Gear 4
Ninja Gaidan II
Grand Theft IV
Mario Kart
Guitar Hero On Tour
Battlefield Bad Company
Rock Band Wii

These are some of the most highly anticipated games of the console cycle, let alone the year. Now, let's take a look at this year:


EA Sports Active
UFC 2009 Undisputed
Red Faction: Guerilla
Tiger Woods PGA Tour 10
Ghostbusters: The Video Game
Punch Out
Virtua Tennis

Other than Tiger Woods, do you see anything you care about? Anything you ever heard of? Anything worth mentioning in the same breadth as the prior year? Sure there are some good games in there, but is there anything that would get a gamer off his ass and into the store? It may look like publishers just don't care, but they do - about the fourth quarter - and that's unfortunate.

This year, we will see:

Guitar Hero 5
The Beatles: Rock Band
Halo 3: ODST
Need for Speed Shift
Ninja Gaidan Sigma 2
Battlefield 1943
Star Wars Clone Wars
Uncharted 2
DJ Hero
Call of Duty Modern Warfare 2
Assassins Creed 2
Left 4 Dead 2
Tekken 6

The list is only limited by the titles like Bioshock 2, which slipped and my getting tired of looking for more. The point is, the publishers are sandbagging. They are holding back the best titles for the fourth quarter so they may dive full force into the blood bath. The decision comes either from the confidence of believing their title is better than everyone else's, or the stupidity of believing their title will sell better than everyone else's. With the exception of the Beatles which will find a large segment of its audience in the mainstream, every one of these titles will do better if released at some other point in the year, but it really doesn't matter. That part probably won't change, but what could change, what should change, is the lack of any titles at all throughout the year.

This quarter is the first time we really felt the impact of the cost increases associated with shift to 360 and PS3. The pain incurred two years ago led to the wide open spaces we see today between releases. They focused their releases on the quarter where the money is made, not realizing the money is made in the quarter with the best games. No good games means no revenue. Rather than spreading out releases to create more revenue and more even cash flow, the issue is being exacerbated by continuing to focus on the fourth quarter where the market is simply too crowded for most titles to find the requisite success. How do you think Badlands is going to do next to the next installment of Battlefield, Tekken or Left 4 Dead? Is it really OK to release a new franchise in the fourth quarter against every sequel known to man?

Moreover, many publishers are looking at empty years in 2010 and 2011 and scrambling to fill them - - - with Wii product. This would be an appropriate reaction if we were building our 2008 slate. Unfortunately, this year we are building for 2010, 11 and 12. At that time, the console prices will have fallen further, the market will be larger and the mainstream will be buying titles. If we don't acknowledge this reality today, it will be us instead of the mainstream media talking about the decline of the game business.