A Tree Falling in the Forest

I love this kind of story. Some anonymous source on a website told the world the next PlayStation will be called "Orbis" and that it will not play used games. As some random guy with a blog, I would expect me to write something about this - I did not - but why are all of these "professionals" weighing on speculation and being so very, very wrong in the speculation layered on top of speculation. While the only basis for validating the speculation is the memorialization of the thought in a series of letters comprising words on a page, the analysts feel the compulsion to comment. The very, very sad part is their commentary betrays them and shows why they are so often so very, very wrong. They see the wall, they see the train tracks, but the do not realize they are sitting on an airplane. Michael Pachter of Wedbush, David Cole of DFC Intelligence and Lewis Ward of IDC all focus on a recent announcement suggesting PS4 - they say it is called Orbis but if So...

After realizing my call for the destruction of Gamestop was for naught, I had to come to terms with the need to accept their business model as a fact of life - even though they are killing the geese who so lovingly innovate, fund, develop and so lovingly deliver golden eggs into their grubby, cold, clammy, unappreciative hands. I even moderated a panel with Gamestop's CEO, and kept my opinion to myself . . . mostly. But do I really have to accept their repeated efforts to persuade us their actions are good for the business. Does the crack dealer stand on the corner and say he is enhancing the junkie's lives, or does he just take their money? Gamestop senior executives do understand that if they have to keep repeating that their actions are good for the industry, they are probably not good and constant repetition will not make it so. In a recent interview in Edge, Mike Mauler, EVP of Gamestop International said: "I can understand the feelings," he ...

I am not going to go into again, I already did here , here and here , so take my word for it. Selling used games is harmful to game innovation. While publishers are engaged in a arms race against the ever growing number of used game sellers, the industry may be saved by the courts. In Vernor v. Autodesk The 9th Circuit Court of Appeals just ruled a properly worded EULA will preclude resale of software. In the Vernor case, Vernor purchased copies of Autodesk software, did not open it, and resold it on ebay. Vernor contended he was protected by the first sale doctrine because he did not make copies, and did not open the box and become bound by the EULA. The court held otherwise and found Vernor a licensee of the software and therefore bound by the agreement which forbade resale. Games and other software are legally resold under the first sale doctrine. In 1908, when contemplating the resale of printed, coyprighted works like books or music, the U.S. Supreme Court determ...

You thought I was going to write about West and Zampella. If I did, I would probably say something positive, like “it is great the guys were recognized and like Activision's hire of the Visceral guys without a specific team or project in mind, EA is putting its money where its mouth is and truly recognizing talent.” If I were to say something negative I would say “this was EA's tat for Activision's tit in hiring the Visceral guys and we are all merely pawns in a giant pissing match between two over grown adolescent companies.” I could also reference Activision's complaint, and if true, wonder what kind of numb nuts representative would fly his client up to meet with a competitor while the client is still employed and in line to receive a very large bonus? But everyone else is talking about these things and its been analyzed and interpreted by more people in more directions and than an Allan Greenspan speech. While it is always fun to provide commentary on the wil...

For years video game platforms and publishers alike worshipped at the alter of the channel - victims of Stockholm Syndrome. We put up with extortive demands for MDF, price protection demands and shelving charges all because we can't piss off the channel. We acquiesce to uniform box size because it's what the channel wants. We make sure the box covers are not offensive because the channel demands it. We can't sell units on line at a discount because the channel will get angry. Most significantly, we can't distribute digitally because the channel will get angry. We take their abuse and delude ourselves into believing retail prices are not eroding even though channel charges continue to escalate. But with Amazon, Best Buy and Toys R Us announcing they are following Gamestop’s lead and getting into the used game business it is time for our Howard Beale Moment. While they think they are claiming a beachhead, we have the power to make it their Waterloo. As proven out by ...

This post is possibly more timely today than when it was originally posted. I am a bit behind the times, but I just read gamedaily's interview with Gamestop's new CEO and it kind of made me feel icky in my tummy. This guy is in charge of about a third of the video game sales and he is not on our side. His positions on digital distribution and used games make him sound either delusional, or like an ostrich with his head in the sand. BIZ: What are your thoughts on the digital distribution options that connected consoles are introducing to gamers today? Do you see today's gamers bypassing retail one day, as music consumers currently do with iPods and iTunes? DD: The first digital distribution was Napster and it was illegal. Let's just start there. The software publishers are afraid to death of piracy. Once a full game is lying on a hard drive, there's the potential for piracy. Aside from the games, the bandwidth, etc., our studies have concluded that the network w...

I hate the used game market. I first wrote about last February , but at the time, no one else seemed to care. The "used games are bad meme" is finally starting to build. Folks from Epic, Atari and others spoke out against the practice in recent weeks, while the Gamestop CEO continues to rationalize the value to the industry with voodoo math (In case you are interested, I addressed the flaws in his argument a few months ago.) I guess caring and speaking publicly are steps in the right direction, but the solutions proposed don't address the issue. The publishers seem to think episodic installments and downloadable content will help, but if they read the message boards, they will quickly learn it will only exacerbate the content. So long as we have trade in value from Gamestop, games become depreciating assets. Gamers are getting a quick lesson in beginning economics. The game is burning value as it stays on the shelf. Each day they way the value to them of keeping...

I am a bit behind the times, but I just read gamedaily's interview with Gamestop's new CEO and it kind of made me feel icky in my tummy. This guy is in charge of about a third of the video game sales and he is not on our side. His positions on digital distribution and used games make him sound either delusional, or like an ostrich with his head in the sand. BIZ: What are your thoughts on the digital distribution options that connected consoles are introducing to gamers today? Do you see today's gamers bypassing retail one day, as music consumers currently do with iPods and iTunes? DD: The first digital distribution was Napster and it was illegal. Let's just start there. The software publishers are afraid to death of piracy. Once a full game is lying on a hard drive, there's the potential for piracy. Aside from the games, the bandwidth, etc., our studies have concluded that the network won't be in place to do digital distribution of full games until 2020 to ...