Delays in the release of the PS3 must of really set some of the marketing team off at Sony. Nintendo had a real lackluster preformance with the Gamecube after being last out of the gates last console war, and promised that they wouldn't fall behind again this time. Well, Nintendo's doing better than that now. Worldwide sales have the Wii outselling the Xbox 360. And the PS3, the latecomer to the party? Barely a third of the sales. The Nintendo and Microsoft have sold nearly 9 million consoles each, and the PS3 has roughly 3.7 million sold worldwide. Thats a sad sales number, considering that Microsoft, Sony's most direct competitor, only sells well in two of the three markets that Sony particiates in (North America, Europe, and Japan).
I remember that, when the next-gen console war began, people clamored to take a stance on who would win between Sony and Microsoft. People weren't willing to bet on Nintendo, given that since Sony entered the market, they haven't had the lead in sales. I think a lot of it has to do with the fact that, unlike Sony and Microsoft, instead of pushing the same thing on a new engine, Nintendo took a step that actually made their system new and more appealing, opening a new market for themselves instead of just relying on previous system owners to buy the new console version. It seems to have worked out well for them.
Nintendo as taken the crown back again, for how long is unsure. Even with the Wii on top, the battle between Sony and Microsoft for sales is still more interesting, as they are essentially drawing from the same pool of consumers. Theres rumors that Sony is dropping the price of the PS3 for christmas this year, and with a repertoire of games coming out this fall that many critics say outdo Microsoft's lineup. Sales of PS3 may experience an upswing that will catch them up to their rival. Given that the Wii did it with a year's lag, PS3 could potentially do it as well, even though their initial sales weren't as strong (Blame that on high entry costs and bland entry games). They've still got time to catch up.
And I place bets on all three ensuring that their release dates for the next generation of consoles will be in a much tighter time frame, given that history seems to be repeating itself here.
Friday, September 14, 2007
Thursday, September 13, 2007
TV going to the Web
It's not entirely a new occurrence on video sites, but Quaterlife has been announced to be shown on Myspace. While it may not be the first series shown entirely on the internet, it's probably the most high profiled. Between co-producers Edward Zwick and Marshall Herskovitz, there's enough big-name products they have made that you would think that their show would make it on prime time. But it didn't, and was cut in 2005 and didn't make the lineup. So instead of trying TV again, they're showing it on MySpace.
It's a nice coincidence, as I just mused yesterday what other media moguls must think of gaming starting to take a lead in revenues. Advertising agencies must be starting to realize younger people are spending a lot more time on the web than at a TV, whether it be on social network sites like MySpace, or gaming online. And why wouldn't they? The television is a one-way interaction, viewers have no real input on the outcome of what's going on. The internet is more two-way interaction, allowing input from the user. Gaming is another step ahead of surfing the web in that interaction, but both allow for the user to feel like they're doing something besides watching the screen.
Yes, Quarterlife isn't interactive on it's own, it still relies on user compliance to sit and just watch, but the medium through which it is presented is far more dynamic and interactive on it's own. And MySpace is a great place to start for a digital series. YouTube would be another good start, but between the theme present on Quarterlife (which mimics a lot of MySpace users in a way) and the fact that MySpace has more social networking involved, the site is a better place to host it. Success of the show will actually hinge on viewers drawing in their friends from the site as well, much like the mechanism in which the networking site itself relies on for success. Recent successes from Will Ferrell's Funny or Die in attracting star power for shorts and SNL's Digital Shorts give a more solid building block that allows for high-production style shows like this to build from as well.
CNN, on the link above, has a analyst (Josh Bernoff) saying that while online TV shows have a potential market, that cable is still the big show, and that it'll take decades still for it to change status. I have a feeling it'll make its way before that. It all depends on delivery of content. For the most part, viewing audiences of cable television are older people. The younger demographics tend to either watch movies or... get this - surf the internet! So of course, in a few decades, those currently watching webisodes will be cable TV's target demographic, and if nothing changes between now and then, they would have to switch their way of thinking. Saying that webisodes will dominate by then is a safe, albeit obvious bet.
To say that webisodes will soon be a strong contender for advertising dollars is more risky to say, but also a very potential reality. All the producers have to realize is; their audience is younger than that of TV. Producing the same bland repeats of a genre they do for cable networks won't garner success. If it does become successful though, the young 19-24 crowd is a very profitable demographic for advertising, and look for revenue to shift towards the new media a lot faster than some are predicting.
It's a nice coincidence, as I just mused yesterday what other media moguls must think of gaming starting to take a lead in revenues. Advertising agencies must be starting to realize younger people are spending a lot more time on the web than at a TV, whether it be on social network sites like MySpace, or gaming online. And why wouldn't they? The television is a one-way interaction, viewers have no real input on the outcome of what's going on. The internet is more two-way interaction, allowing input from the user. Gaming is another step ahead of surfing the web in that interaction, but both allow for the user to feel like they're doing something besides watching the screen.
Yes, Quarterlife isn't interactive on it's own, it still relies on user compliance to sit and just watch, but the medium through which it is presented is far more dynamic and interactive on it's own. And MySpace is a great place to start for a digital series. YouTube would be another good start, but between the theme present on Quarterlife (which mimics a lot of MySpace users in a way) and the fact that MySpace has more social networking involved, the site is a better place to host it. Success of the show will actually hinge on viewers drawing in their friends from the site as well, much like the mechanism in which the networking site itself relies on for success. Recent successes from Will Ferrell's Funny or Die in attracting star power for shorts and SNL's Digital Shorts give a more solid building block that allows for high-production style shows like this to build from as well.
CNN, on the link above, has a analyst (Josh Bernoff) saying that while online TV shows have a potential market, that cable is still the big show, and that it'll take decades still for it to change status. I have a feeling it'll make its way before that. It all depends on delivery of content. For the most part, viewing audiences of cable television are older people. The younger demographics tend to either watch movies or... get this - surf the internet! So of course, in a few decades, those currently watching webisodes will be cable TV's target demographic, and if nothing changes between now and then, they would have to switch their way of thinking. Saying that webisodes will dominate by then is a safe, albeit obvious bet.
To say that webisodes will soon be a strong contender for advertising dollars is more risky to say, but also a very potential reality. All the producers have to realize is; their audience is younger than that of TV. Producing the same bland repeats of a genre they do for cable networks won't garner success. If it does become successful though, the young 19-24 crowd is a very profitable demographic for advertising, and look for revenue to shift towards the new media a lot faster than some are predicting.
Wednesday, September 12, 2007
Yahoo gets in on the social networking scene
So, after being pummeled of late by Google, Yahoo signs a deal with Bebo for advertising rights. Good for them.
Social networking is becoming huge, and just about everyone has been affected by it. The networking sites themselves, while just a relatively new concept, have just recently reached a critical mass state for many of thier communities. Basically, now that the ball is rolling, it doesn't need any more pushing to keep moving and growing, the community does that on its own( I know this is a butchering of the critical mass effect for media, I apologize).
The article states that on average, Bebo users log 40 minutes a day. Given the amount of page refreshes that normally occur during that time, that's a lot of face time for advertising.
Social networking is becoming huge, and just about everyone has been affected by it. The networking sites themselves, while just a relatively new concept, have just recently reached a critical mass state for many of thier communities. Basically, now that the ball is rolling, it doesn't need any more pushing to keep moving and growing, the community does that on its own( I know this is a butchering of the critical mass effect for media, I apologize).
The article states that on average, Bebo users log 40 minutes a day. Given the amount of page refreshes that normally occur during that time, that's a lot of face time for advertising.
Gaming media outstrips music and video sales
From Digital Spy:
Its a shift in thinking for a lot of people. I wonder how much this makes the other media moguls worry....
However, hopefully this turns a lot of the focus on video games and virtual media away from just as something nerdy people do to goof off, and towards where it should be; a true mass media that is part of our current culture and has serious implications on our way of life. Something that has value as an engine for behavioral study (such as this article on potential behaviors from viral outbreaks learned from World of Warcraft). I personally have been observing economic behavior for a few years now in online games, and while the environment is unlike the real world, many behaviors can give insight and direction for studies.
A report by Strategy Analytics has revealed that online gaming is now officially outselling both video and music in the digital entertainment market.Now, this is only addressing digital sales. However, couple it with with news that there are predictions for gaming titles to hit 400 million in sales, and what you get is a medium that seems to have finally grown into its own. Gaming has numbers that not only compete with other mainstream media, but perhaps can consistently overtake it. This means a lot for future advertising dollars and investment numbers. EA has been capitalizing on this for a long while now. I can look at all their sports games in the past that I've played, and advertising has become more and more apparent in them as each year goes by.
The firm has stated that the online games market generated $3.8 billion dollars in 2006 and is predicted to grow to $11.8 billion dollars by 2011, with online sales accounting for one third of all software revenue.
Its a shift in thinking for a lot of people. I wonder how much this makes the other media moguls worry....
However, hopefully this turns a lot of the focus on video games and virtual media away from just as something nerdy people do to goof off, and towards where it should be; a true mass media that is part of our current culture and has serious implications on our way of life. Something that has value as an engine for behavioral study (such as this article on potential behaviors from viral outbreaks learned from World of Warcraft). I personally have been observing economic behavior for a few years now in online games, and while the environment is unlike the real world, many behaviors can give insight and direction for studies.
More Periperals, More Audience?
Yesterday, Nintendo released news that they will be adding yet another periperhal to its extensive lineup of plastic pieces that are meant to enchance gameplay, entice others to play on a Wii due to its inviting nature of peripherals, or just reward happy Wii-faithfuls with goodies. I guess it all depends on which camp of gamer you fall under.
Theres actually two really strong arguments to be had. The first is that, just maybe, interactions in gameplay have finally began to catch up with the visuals. There was a large period of disjunction between input and output of games. Original computer games basically matched the interactions. This was simple mind you, as most were text-based games. Even as visuals entered into computer games in the Sierra years of adventure games (mid-80s), much of the gameplay still relied on the input and output of text. There was a connection between what the user put into the game, and what was returned to him.
With the introduction of consoles and mice driven point-and click gaming, a disjoint began between input and output began. If you played any games when this style of play was introduced, think of how much button mashing and random clicking was involved (Kings Quest 6 still haunts my dreams, along with Space Quest 4). This gave rise to what I've argued to be the death blow of the adventure game genre. In the void left behind, came platformers, first person shooters, and RPGs, all which capitalized on directional pads and point and click, without much concern for input/output synergy.
Arcades were always involving more of a specialized synergy in input/output than consoles and computers due to their single-purpose design. Light guns were the original "specialized" peripheral (which has also been ported numerous times to consoles), but arcades also brought more to the table, especially when console gaming began to threaten the extinction of the arcade. Games began including various peripherals that were meant to attract a wider audience, which seemed to be successful.
The Wii capitalized on this, creating a remote that basically could turn into various peripherals all by itself, and by adding small plastic frames, adds to the imagination and user input, such that it more closely matches what the visuals are giving back in output. The Wii truly has become the home version of the arcade machine.
The second argument is the actual profitability behind this venture. Nintendo seems to have a knack for selling the extras to a system that its rivals just havent been able to repeat. Sure, the system costs $299 can versus the $599 PS3, but to have true value from the system, you need 4 Wii-motes, which (last I looked) costs $49 each for the remote, and 39$ for the nunchuck addon. Ask an Xbox 360 or PS3 owner how many controllers they have, and I imagine the number hovers between 1 and 2, with the fraction on the lower end of the scale.
Add on top of the extra remotes, the additional peripherals that Nintendo has been selling, and well, you get the idea. The company has been taking a different approach to the gaming market than it's rivals. Enter low, and sell a lot of fun extras, and make up the difference. Its a form of price discrimination thats common among economic models where market power is apparent amongst its firms.
Take the example of the Two-dollar theaters and normal Cineplexes (its an example from Jeff Church's Industrial Organization textbook found here). While the main theater sells new movies for say 10$, the other theater sells slightly older releases for 2$ a ticket, but then recoups costs by selling popcorn at a slightly higher price. What this allows the theater to do is capture those people who go to the theater for the expeience - the movie, the popcorn, the atmosphere - but are willing to sacrifice the fact the movie may have been released at the 10$ months ahead (which may be overpriced for that section of movie-goers to pay for a movie).
Think of the Wii as that two-dollar theater, capturing those looking for a different experience. Not only are they providing intuitive gameplay that actually connects the user, but they're doing it in a way that has them essentially competing in a different market.
Theres actually two really strong arguments to be had. The first is that, just maybe, interactions in gameplay have finally began to catch up with the visuals. There was a large period of disjunction between input and output of games. Original computer games basically matched the interactions. This was simple mind you, as most were text-based games. Even as visuals entered into computer games in the Sierra years of adventure games (mid-80s), much of the gameplay still relied on the input and output of text. There was a connection between what the user put into the game, and what was returned to him.
With the introduction of consoles and mice driven point-and click gaming, a disjoint began between input and output began. If you played any games when this style of play was introduced, think of how much button mashing and random clicking was involved (Kings Quest 6 still haunts my dreams, along with Space Quest 4). This gave rise to what I've argued to be the death blow of the adventure game genre. In the void left behind, came platformers, first person shooters, and RPGs, all which capitalized on directional pads and point and click, without much concern for input/output synergy.
Arcades were always involving more of a specialized synergy in input/output than consoles and computers due to their single-purpose design. Light guns were the original "specialized" peripheral (which has also been ported numerous times to consoles), but arcades also brought more to the table, especially when console gaming began to threaten the extinction of the arcade. Games began including various peripherals that were meant to attract a wider audience, which seemed to be successful.
The Wii capitalized on this, creating a remote that basically could turn into various peripherals all by itself, and by adding small plastic frames, adds to the imagination and user input, such that it more closely matches what the visuals are giving back in output. The Wii truly has become the home version of the arcade machine.
The second argument is the actual profitability behind this venture. Nintendo seems to have a knack for selling the extras to a system that its rivals just havent been able to repeat. Sure, the system costs $299 can versus the $599 PS3, but to have true value from the system, you need 4 Wii-motes, which (last I looked) costs $49 each for the remote, and 39$ for the nunchuck addon. Ask an Xbox 360 or PS3 owner how many controllers they have, and I imagine the number hovers between 1 and 2, with the fraction on the lower end of the scale.
Add on top of the extra remotes, the additional peripherals that Nintendo has been selling, and well, you get the idea. The company has been taking a different approach to the gaming market than it's rivals. Enter low, and sell a lot of fun extras, and make up the difference. Its a form of price discrimination thats common among economic models where market power is apparent amongst its firms.
Take the example of the Two-dollar theaters and normal Cineplexes (its an example from Jeff Church's Industrial Organization textbook found here). While the main theater sells new movies for say 10$, the other theater sells slightly older releases for 2$ a ticket, but then recoups costs by selling popcorn at a slightly higher price. What this allows the theater to do is capture those people who go to the theater for the expeience - the movie, the popcorn, the atmosphere - but are willing to sacrifice the fact the movie may have been released at the 10$ months ahead (which may be overpriced for that section of movie-goers to pay for a movie).
Think of the Wii as that two-dollar theater, capturing those looking for a different experience. Not only are they providing intuitive gameplay that actually connects the user, but they're doing it in a way that has them essentially competing in a different market.
Tuesday, September 11, 2007
And so it begins
The first area is Economics. I just finished my Masters at University of Calgary in the fall. Most of what I studied was Behavioural and Macroeconomics. This is my "professional side", the side I got a degree in, the one I had written papers for that have been considered to polish up for publication. The other side is my more casual side, that of virtual media, which usually involves online games/communities. This side of my writings is actually unpolished, but more often read and used by others for references in thier own works. Both are fun and interesting to work with, and it really peaks my interest when one area feeds into another.
So this is what this blog will end up being. Posting views, comments, and other things of interest that deal with virtual media and/or economics. It may not always look like it flows well, but hopefully it'll feed into one another as time goes by. And, just maybe, it'll be of interest to others to ead as well.
Subscribe to:
Posts (Atom)