Will Hollywood's slump hit video games?

[CheapyD]

Will Hollywood's slump hit video games?
Tinseltown's malaise may seep into the game industry if publishers aren't careful.
June 27, 2005: 3:03 PM EDT
Game Over is a weekly column by Chris Morris (chris.morris@turner.com)

NEW YORK (CNN/Money) – The video game industry loves to compare itself to Hollywood.

Publicists regularly liken graphics in new games to "Shrek" or any of the Pixar (http://money.cnn.com/quote/quote.html?shownav=true&symb=PIXR) films. Some titles tout the voice work of A-list actors more than the gameplay itself. And publishers squeal in glee when a studio picks up the rights to one of their franchises.

But as the gaming industry strives so hard to emulate Hollywood's success, it's in danger of falling into the same mudhole the movie folks are mired in these days.
http://money.cnn.com/2005/06/27/commentary/game_over/column_gaming/index.htm

[Quackzilla]

What, we aren't already there?

[uzumaki_star]

Let's hope not.

[Mr Unoriginal]

I think that the industry is headed in the direction of the movie industry. However, I don't think it will ever get as bad as the movies currently are (or will become). It will hopefully always be easier to order an independant game online or even to have a few copies in an EB than to go to an independant theater. While giants like EA will always have a large part of the market, hopefully people who love games like Katamari Damacy will create enough profit for these small guys to stay in business.

[electrictroy]

Today's moviegoers, not to put too fine a point on it, are jerks. They kick seats. They constantly chatter amongst themselves, oblivious to others sitting around them. And they are seemingly incapable of pressing the 'off' button on their cell phones and pagers. Why, dear God, would you want to pay to spend time around these morons?

So what's the gaming parallel? Online.

Online gaming can be a terrific experience and add a new dimension to a title. Too often, though, you find yourself surrounded by obnoxious folks who feel the anonymity of the Internet gives them license to act the fool. There's no quicker way to lose interest in a game than hearing a 15-year old scream his favorite obscenities for no real reason.



The reason above is why I quit online gaming & theaters. Playing versus the computer is just as fun, and it doesn't cheat or call me names. And my home is a better movie experience.

troy

[dtcarson]

I don't think so.
I think we'll see a natural slowdown when the next gen of consoles comes out at their initial launch prices, just like we see every generation. If new game prices rise to 60 bucks or more, then yes, we will definitely see a slowdown there as well.
I think, and hope, that the gaming industry will not make some of the same mistakes Hollywood has; particularly buying a certain name or voice for millions of dollars, and having that name/voice star in a movie/game that is basically crap. While I don't necessarily mind the 'interactive movie' aspect of some games, I think they're spending too much money on getting big names to voice the characters, when they could use that money on either lowering the MSRP or creating more/better content. Is the fact that a game stars a certain bigname Hollywood face/voice a major selling point to most gamers?

Virtually any industry has the 'clone' problem. It's not necessarily bad, and with the huge internet information resources, and resale venues for games, it doesn't hurt the gaming industry as much yet. It could, of course, but so far there have still been enough novel, innovative games coming out to stand out.

I don't think this analogy is fully valid:
movie theaters : home theater :: online gaming : video games.
The movie industry has a number of obstacles: high ticket prices, poor theaters/other theater attendees, short shelf life, home theater, dvd rental and purchase, video games, etc. At least one of them they could turn into a benefit [DVD rental and purchase]. Video games don't really have an "in kind" competitor. Online gaming at present is still for the most part an additional option, and is not required except for a few certain online-only games like MMORPGS [and there's games, like Guild Wars, that are trying to counter the negative aspects of that]. Whereas if you go to a theater, odds are there's going to be something wrong [rude moviegoers, poor sound, poor picture, etc], and Hollywood can't really do much about that. If you buy a game that sucks, you can always resell it or trade it, but once you buy your 5-12 dollar ticket for a movie, that's it [except in the few cases of complaining to mgmt and getting a refund].

I don't think the videogame industry is in the same boat as Hollywood, though of course it's not impossible, and if the focus increases toward unoriginal 'clones' and bigbudget productions/talent rather than gameplay, then it won't be too long.

[j-fever]

this new generation of consoles will probably kill alot of developers and publishers.

[Quackzilla]

EA is already charging $50 for their crap PSP games, and plans to charge $60 for their crap Xbox 360 games.

[Purkeynator]

I agree, that is why we are seeing so much consolidation lately. There is going to be a shakeout. There are just too many games out there and a lot of them are clones of another game.

[SpottedNigel]

i blame the shitty virtual popcorn

[psiufoxx2]

There is one major difference between Hollywood and the Gaming Industry: distribution.

As long as game developers can design, package, and ship a product directly to a game store, we are not liable to fall into the same trap as Hollywood movie companies.

Not to mention these articles mostly refer to box office sales. They fail to mention international film grants, DVD sales, ancillary sales, merchandising, advertising, etc - all points of revenue for Hollywood. If they weren't making tons of money, they wouldn't be making movies.. plain and simple.

I do agree with the following though.. and this is where I liken our beloved industry to Hollywood:

Both industries seem to have forgotten that innovation and fresh ideas are what captured audiences in the first place. Remakes and clones might put some change in your coffers in the short term, but you lose respect and credibility from your customers each time you do so. The film and gaming industries are supposed to be fonts of creativity, but lately both seem afraid to risk trying something new. It happens occasionally, but not as much as it should.

[spoo]

Good thought but no. Hollywood is not in a slump. The problem is the public is taking advantage of the home theater. We now spend our money on DVD instead @ the boxoffice. Hollywood is still making money just now it is spread out instead of making the majority of their money @ the boxoffice. Hollywood just wants us to "believe" that they are in a slump to make even more $$$$.

The gaming industry is different. This already happened to the gaming industry when the arcades died.

[j-fever]

A few thoughts:

#1 There will not be a "slump", interactive media (including games) will grow more and more, non-interactive media such as movies, will feel more pressure. Fine with me, Hollywood has been out of good ideas for 10 years now.

#2 As the cost of development goes up (way up!) there will be less and less innovation and companies will not want to take big risks. We even see that already with the current generation of "me-too" games, such as all the GTA and military clones.

#3 The platform that can ease the burden on developers/publishers the most will probably get the most innovation. Development costs need to make a profit. Currently at least 70% of the gemes made do not make a profit. What is happening is block-buster titles such as GTA, Final Fantasy, Halo, Resident Evil are paying for all the rest.

#4 Japan is in bad financial shape, and most Japanese developers are on the edge of major losses. American and European developers and not much better off.

#5 The retail price of game HAS to go up. Expect games in the $50 to $70 range as common. People who say that prices will continue to go down are clueless.

[javeryh]

It could happen. I hope not but as games get more expensive to make, companies are less likely to take risks and sink large amounts of money into unproven IP like a movie studio would. They also don't have to pay some shitty actor like Tom Cruise $20,000,000 just to star in it. That's an entire development budget right there. I do think that in 10 years or so there will be a huge gap between the "major" game companies like EA and Midway and start-ups as far as production values and graphics go. I think Nintendo is hoping to grab the emerging "indie" scene with their Revolution if it truely is that easy to develop for. The industry has to develop to the point where a few kids can crank out the next great game in their basement for a few thousand dollars or else it runs the risk of growing stale (some might argue we are aleady there)...

[captaincold]

This is the reason i think Nintendo is on the right track.
Publishers will take VERY FEW risks on other consoles but on the DS & maybe revolution you will have innovative games based on the hardware.

[howlinmad]

As long as more and more games fall into the hit a button and watch a cutscene mechanics, like a few franchises these days, movies and games will....

FINALly become one, that seems to be the FANTASY these days.
Our controllers will become cold as METAL because our gaming consoles will become just more GEAR to play more and more SOLID movie titles, disguised as games.

So yeah, they will get into the same slump, they will become one.

Sorry....may not be directly related, but work sometimes makes you strange. :)

[j-fever]

I believe that "indie" will remain PC based.

It would be cool if the Nintendo Rev is "indie " friendly, but developers would still have to get publishing approval from Nintendo, and they have a history of being picky. I truely hope Revolution does well, but so far there is no information on what could happen.

Sony is totally "stuck-up" at the moment, they are not very developer friendly.

Microsoft has been trying very hard to get developers on-board and is spending tons of cash development, hopefully the slap Sony around a bit.

[rabidmonkeys]

The 18 week box office slump is happening because of two factors.

1) DVD windows are shorter then ever, people can now wait 3 months and buy the title cheaper then the cost of actually going to the movies.

2) Movies are expensive. The people in the theater talk, use cell phones and kick seats. While at home you have none of that, plus you can push pause.

*bonus factor:
Hollywood being out of ideas and remake/sequelitis keeps people from being driven to the movies because the quality just isn't there.

[Quackzilla]

Sony is totally "stuck-up" at the moment, they are not very developer friendly.
Katari Damacy?

[captaincold]

Another factor effecting movies is the overcrowding of blockbusters.
Star Wars,Longest yard, & Madagascar came out within a week of one another.

Since the new Dukes of hazzard movie comes out it a traditionally slow August i think it'll be the "surprise hit" of the summer.

[rabidmonkeys]

If by "hit" you mean "bomb" then you are right. ;) They don't even have the font right on the general's door in the teaser trailer. Which is offensive to everyone who grew up on that show, because the 01 is the general's logo. How can you mess up someone's logo?

[epobirs]

If by "hit" you mean "bomb" then you are right. ;) They don't even have the font right on the general's door in the teaser trailer. Which is offensive to everyone who grew up on that show, because the 01 is the general's logo. How can you mess up someone's logo?

I think the assumption is that anyone who'd pay to see a 'Dukes of Hazzard' movie is functionally illiterate and relaxes at home by striking themselves on the head with bricks. Thus it doesn't matter so long as Jessica's shorts ride up high enough to require a good shave.

[psiufoxx2]

It would be cool if the Nintendo Rev is "indie " friendly, but developers would still have to get publishing approval from Nintendo, and they have a history of being picky.

After N64... they're MUCH less picky. They'll slap the Nintendo Seal of Approval on just about anything :P Bad Boys: Miami Takedown? Whirl Tour? Die hard Vendetta? No thanks... :P

[epobirs]

A better comparison might be the decline of arcade machines as the major venue of video games. In the late 70's and early 80's the biggest money makers were arcade machines and home versions of those machines, both in official licenses and clones along with mutants. As the cost equation became more favorable for consoles and home computers, especially with cheaper storage, the market gradually shifted over toward products that weren't suitable to the arcade model with the need to constantly extract more coins out of player's pockets.

As inexpensive home systems became more capable the games began to reach far past what would work for arcade conditions. Today, most pure action games have features at their heart which are completely dependent on the idea that the player's progress will be saved and they'll be back to achieve long term goals like finding all of the unlockable modes. Entire major genres have risen from what were once niches items to become some of the biggest money makers, especially epic RPGs. This process began in the NES era but is only recently becoming a big factor for Hollywood. Shows like 'Buffy the Vampire Slayer' where individual episodes can be enjoyed on their own while contributing to a season long storyline make for a more satisfying experience than trying to stuff that story within the time limits of a feature film. Thus box sets of shows with strong continuity, with '24' being the extreme case in being effectively a 24-hour long movie, are selling very well while fewer theatrical releases receive the same level of attention they would have in an era of less engaging television works.

Hollywood isn't leading the trend, it's following the path interactive media has already traveled. The interactive side still has some tricks to learn from TV, like episodic productions that allow revenue to start flowing in before the entire product is delivered but the next generation of consoles and increasing popularity of MMORPGs looks to cover that within the next few years.

[mbstuff]

Another thing to remember about videogames is that there are entire generations and populations that are untapped sources of revenue. There aren't that many gamers now who are in their 40s + (relatively speaking), but there will be in 15 years when I'm in my 40s. Another example is how developers still haven't found a way to cater to females as much as they should (the equivalent of action movies for guys and romantic comedies for ladies). On the other hand, movies have been around so long that their customer base has no room to grow beyond population growth. Sales growth has a lot to do with growing your customer base, and movie studios don't have anywhere to go in that regard, while game companies do.

[j-fever]

After N64... they're MUCH less picky. They'll slap the Nintendo Seal of Approval on just about anything :P Bad Boys: Miami Takedown? Whirl Tour? Die hard Vendetta? No thanks... :P


You are correct they are much less picky, but that does not mean they will publish anything that shows up. PC developement is open to anyone with cash, that is not the same as the console. How many half-life/quake/etc.. mods have you seen on Nintendo?

Indie developement is cool, but most indie games would probalby not sell well.

[j-fever]

Katari Damacy?

For PS2 yes. End of the PS2 life cycle, Sony is way more flexable than at the start of its life. PS3 will probably be like a steel-chasity-belt, to get game approved for it.

[js1]

I think it could go into a slump. Game companies flood the market with too many games! And who has the time to play them all?(I try to buy the games, I will play/interested in) I think in order for that not to happen game companies need to make LESS games overall , and put more focus into single titles.

Could you imagine how popular BG&E , ICO could have been if the market was not overcrowded with crap!

Or how about God of war , MGS 3 , Metroid Prime 2 , etc.. They could have gotten into more hands if people had less games to choose from.(but a better selection)

Also , I would think that the prices would not drop as fast, but I don't think they would not go up to 60-70 dollars either. because the games would sell better. (although it would not be good for us cag's)

[MadFlava]

Well, I do agree that there are too many "clone" games out there but I don't think it's really hurting the industry. The average gamer seems to want the same experience over and over again so that's what the industry is giving them. It didn't hurt the industry back in the early 90's when it seemed that every game coming out was a Street Fighter 2 clone.
The gaming industry does have a solution they could easily implement the lack of "innovative" title coming out in the US by introducing genres that have been widely popular in Japan that have never been given a chance here. Such as those quirky dating sims which isn't so far off from what games like "the Sims" are starting to become. Though I still think there is no market here for any Train driving simulators yet...

[lionheart4life]

Gaming will be ok as long as they dont start to charge $60-70 for every game. I know that SNES games used to cost that much and everything was fine, but I don't think things will work out if the prices get that high again. The main reason not to go to movies is that they are so expensive that it will just be cheaper to buy the DVD when its released than to buy 2 tickets to a movie that you may not even like, with a crowd that you have no control over. There is enough competition in gaming to keep it good, while movie makers seem to have to follow the same formula to have a financially successful movie, and most of the movies end up being too similar and predictable.

[j-fever]

Gaming will be ok as long as they dont start to charge $60-70 for every game. I know that SNES games used to cost that much and everything was fine, but I don't think things will work out if the prices get that high again. The main reason not to go to movies is that they are so expensive that it will just be cheaper to buy the DVD when its released than to buy 2 tickets to a movie that you may not even like, with a crowd that you have no control over. There is enough competition in gaming to keep it good, while movie makers seem to have to follow the same formula to have a financially successful movie, and most of the movies end up being too similar and predictable.

I doubt that a $70 base for games will have much impact on game sales (probably none). The industry is growing like crazy and the demand for the latest and greatest will always be there. Costs will go up as everything else is, plus consoles have really good copy protection. For example, how many bootleg Game-Cube games do you find, what percentage of gamers have modded consoles, probably less the 1%. There is no way to copy-protect movies and there never will be. I believe a higher base price will only help future game development growth and innovation.

Comparing movie theater sales to console games just does not work. The closest comparison is Game Arcades, not home consoles. Movies just cannot compete with games as movies will never be interactive. I good comparison to how well games will do, is to compare TV news to the internet news. Internet news is growing and TV (a non-interactive experience) is slowly losing ground. Print magazines are also losing (non interactive), when is the last time you regularly read a gaming magazine compared to reading IGN or Gamespot?

The bottom line is, that the movie industry has got to create an experience as compelling as interactivity is, to have any chance of competing. Say "hello" to higher base prices for games.

[sephitor]

The DVD argument about the movie industry is totally right. Where I live (LA) it's cheaper to buy the movie on DVD than buy two tickets to see it when it comes out. And, as people have pointed out, it's more comfortable to watch at home. Hollywood isn't hurting, the theaters are hurting.

I personally think that there will be problems if games go up to $70. I rarely buy games full price now. I don't think I ever will if they cost that much.

[j-fever]

The DVD argument about the movie industry is totally right. Where I live (LA) it's cheaper to buy the movie on DVD than buy two tickets to see it when it comes out. And, as people have pointed out, it's more comfortable to watch at home. Hollywood isn't hurting, the theaters are hurting.

I personally think that there will be problems if games go up to $70. I rarely buy games full price now. I don't think I ever will if they cost that much.

I am not convinced that lack of sales at movie theaters are because of cost. It seems to me that seeing a movie in a theater has very little benefit over home veiwing for most consumers. The experience in a Theater and at home is about equal. The same cannot be said for seeing a Play/Opera/Live Theater or sporting events, being they have elements of interactivity that movies will never have.

I don't buy games at full price, I don't have a need to, as the number of titles that I want to play get released quickly and I have a backlog that keeps me busy. However many people do pay full price and over time many more will too. A $70 price tag will not change that, I beleve that a higher price tag will allow for more innovation and variety in games. Game Publishers risk/rewards will be more stable and release less GTA/Military Sim/"whatever is selling well now" clones, this in turn, will drive up consumer demand.

[PittsburghAfterDark]

The video game/Hollywood dilema is too simple to be turned into "Hollywood is slumping, gaming wants to be like Hollywood. Ergo, gaming must slump next."

There's a world of difference between the two worlds. Console makers have a lot more pull in what gets made for their systems and can grant tiered royalty fees to influence what games appear. For example, there's no way Majesco and Namco paid $10 per game (Which is typically the norm for a full price $40-50 game.) in production/printing/royalty fees for Phatom Dust and Katamari Damacy. There's just no sense to it.

Think of it this way. We all know the popularity of Atlus, Nippon Ichi and Working Design import RPG's. Fans of these games don't care if the game has bump mapping, trilinear iterpolation, particle effects etc. They buy it for the story, artwork and game. Graphics are really secondary compared to something like Halo 2, Half Life 2, PGR 3 where they are major selling points. The point is you can make money in gaming with games that aren't big budget, staff crushing epics.

It's still possible to award companies like this reduced royalties for bringing passionate gamers to your console. Many of these fans buy every title these companies put out regardless of reviews, public opinion etc. If they put out 20-25 games per generation you've far exceeded the 8-12 games Sony, MS and Nintendo hope the average users buys during their console's lifetime.

This is where niche gaming is far more profitable than overall sales. If an average Atlus title costs $1.5-2 million to make and only 150,000 of them are sold (Typically at a full $50.) you have a modest $7.5 million gross. Another $2 million for production, marketing, distribution and you have a very modest $3.5 million profit. However if you can count on that same audience buying your entire print run and put out 4 games a year you're making $14 million annually.

To EA, Sony, MS Game Studios, Nintendo, Activision that is nothing. Then again their titles may cost 3-6 times more to make and if they just did 4 titles a year their stockholders would riot. However no one buys an Activision title because it's from Activision. It just happens to be made by Activision. The only major maker of games that has that cache is Nintendo and even then fans don't buy Mario Tennis, Golf, Baseball etc. as religously as Atlus, NIS and WD fans.

Movies have no equivilent of this niche. Movie goers don't go see moview from a certain studio. You don't have Paramount and 20th Century Fox fanboys.

In this regards the two businesses are incredibly different. However with crap like Fiddy Tent Bulletproof you wonder if this industry is becoming too stupid for it's own good.

[Roufuss]

The DVD argument about the movie industry is totally right. Where I live (LA) it's cheaper to buy the movie on DVD than buy two tickets to see it when it comes out. And, as people have pointed out, it's more comfortable to watch at home. Hollywood isn't hurting, the theaters are hurting.
.

Same here... as much I wanted (and still want to) see Star Wars: Episode 3 in the theater, I know that two tickets will run me about 16 dollars (8 a piece), plus factor in a drink or popcorn and you're almost up to 20.

Then you deal with annoying people in the theater, shitty seats, people talking to their friends or on their phone, children. I can get the DVD for 15 on release week, probably get an extended version of the same movie with bonus features, and can watch it in the comfort of my own home.

[j-fever]

Same here... as much I wanted (and still want to) see Star Wars: Episode 3 in the theater, I know that two tickets will run me about 16 dollars (8 a piece), plus factor in a drink or popcorn and you're almost up to 20.

Then you deal with annoying people in the theater, shitty seats, people talking to their friends or on their phone, children. I can get the DVD for 15 on release week, probably get an extended version of the same movie with bonus features, and can watch it in the comfort of my own home.

Then the home DVD experience is actually better! Movie Theaters are doomed...