Video Game Industry Crashes! Just like 84' except it's 04'

By the way, PoP was a success....several million copies across all platforms = good.

This whole thread is pretty embarrassing in some ways. Most of you have no idea what you are talking about, and the few that do are getting shat upon.
 
It is true that over production of games is occurring. It is not as bad as the 80's... There are not 100 million copies of Halo waiting for Xboxs to be sold. There are however over 400 titles for the Xbox, GC, and PS2 Each! Most people have more games than they can play. So, the consumer purchased games for $50 at launch because they wanted to play the new hardware. After a few years tons of good inexpesnive games are on the shelf and less people will pay $50 for a game.

The next generation of systems will have a similar cycle. Although I think you will see less people run out to get the PS3 or Xbox 2 or GC 2 than you saw run to get the PS2 this time around. Most gamers are pretty happy with the hardware out and will wait for the next generation systems to be discounted.

I think the crash is going to be in 2005 or 2006. Nintendo and / or Sony are going to feel the pain of the mighty Microsoft Dollar I am afraid...
 
All this crash talk sounds like gamers just grew up and need to look for a bargain.

Remember when you were a kid and laughed at Mom for clipping coupons? Mom knew what she was doing!

Now as an adult you realize that living on your own, a family, car payments and other adult oriented responsibillities, have to take a back seat to entertainment.

Shit, I would rather have a car under my ass or a house with heat than the newest game title that will be discounted soon anyway.
 
I think if my original post was read again that it still holds well against what many are saying.

I don't agree with any doomsday scenarios. Please do not put words into my mouth.

While I agree also that new games arent what drive a lot of profit and that it's used games that do...well I got news for you. Most people are just selling used games on Ebay, Half.com, Amazon, or message trading boards like here. The used stuff people try to trade to me is the absolute worst garbage. Anything of value gets sold otherwise. Also since consumers have another outlet to trade or sell they want more money hence less profit again for small retailers.

Prince of Persia did sell well in the xmas season but sales quickly dropped off. Also BGAE didnt sell at all for me...I think I sold 2 for the whole season.

I will say this again for the hard of hearing. This crash will mostly affect those with a monetary interest in gaming (i.e. inventory). Which is very few of you. Gamers will get more discounts and certain companies will be losing a ton of money (actually they are losing the money now).

Last but not least, your analogy with Sears having tons of inventory in the crash? Everybody did. Penney's, Sears, Children's Palace, Circus World etc. some of them aren't around anymore but that's not due to Atari or the crash.
Click to expand...

Ok...so you say that these companies didn't go out of business because of the 84 crash, so what was the reason? Obviously there are differences but you tend to be overlooking the larger picture. Money is money. Suddenly having a huge amount of worthless inventory is incredibly scary. I would have valued my store inventory at 150k or more about 2 years ago. I think I have more stock now but I would value it at about 1/2 of that. So suddenly my sales are down, margins are down, and my current inventory is being sold at a loss. Now I know I am discussing my one store BUT I know of 8 others who have either folded or are gonna fold this summer...this is just who I know or have heard from. One of my best friends in the wholesale industry who I talk with every day for 8 years told me flat out that sales are about 1/2 in the last 2 months at the wholesale level. No one can move inventory at this time at any reasonable sale price. This is why BB had a $4.99 sale. My buddy told me that he had 3 clients close last month alone. My partner (another biz venture) owns 2 stores in NYC and his sales are down 40% from 2 months ago. I have 10 years of books to make comparisons with and I did better on my 2nd month of business than I am doing this month. Margins were also MUCH better in those days (even 4 years ago). Competition was only locally but now it's practically global...how many here order from Lik-Sang?

I am totally not being some crazed alarmist. I have facts of what's going on. And I will say it again...to the average gamer...it doesnt really matter. The game industry is too big and proven now. It will crash but not burn...instead it will have to be transformed.
 
My question is Defender why are you still in games? i know a few months ago you were considering going into a higher percentage of porn. I have a friend who's dad owns a porn shop and he says business is so good that he could probably retire off of 10 years of sales. What is keeping you in games is it love for games, dislike of selling porn or plain stubborness? If I was in your shoes with a family to support i would read the writing on the wall and go to the more profittable merc. You got to live your dream for a few years which is more than most people can say, but now it might be time to set your family up for the longterm
 
I am getting out of the game business at least for B&M. I hope to maintain the sites since I have so many. In the long run I may not retail either on the web or I may use a dropshipper. I do know that I have a TON of inventory I need to sell before I can get out of the game business and that can take a while.

Also I know games really really well. 10 years of contacts and knowledge...or maybe just simple habit. It's hard to think of my life if I wasn't in games. It would be dull. I don't dislike selling porn at all but to be honest..it's not exactly fun. The customers can be weirdos even more than geeky gamers.

I tried to start a magazine about 4 years ago but it didnt work out. I tried to start some sites but so far they have had mediocre success. I still got some ideas and I am about to try another internet venture with a partner...I try at least. I am very entrepeneurial. I come up with ideas and usually follow them through.
 
Hasnt the industry seen an increase in overall sales from year to year for the past 5 years or so, and topping 10 billion gross the last 2 years, if so things are not looking that bad.
 
This isn't a big shock. As a really older gamer (staring down 40 in a couple of months and remember when Pong was an arcade phenom. That old enough for ya, Defender?) this is old news. I can remember when there were lots of small neighborhood software stores that offered vastly better service but could never withstand the pressure from big chains and phone/mail order with web sales really driving the final in the coffin. I worked in several such stores in my youth and cannot imagine any of them surviving outside of an isolated small town where they were the only venue. Here in Los angeles the the only small independents survive on their premium services such as building turn-key high-end video editing or publishing systems. The commodity hardware and software are often as not sold for cost just to make the part of the business that generates good margins viable.

A video game store doesn't have many options of that sort. They deal in commodity products with few opportunities to sell services. They can specialize in premium items like obscure titles and imports but that is a limited business at best and still faces severe pressure form from online operations with substantially lower costs combined with deeper pockets to float a deep sunk cost for exotic inventory.

The 1984 crash sent reverberations throughout every branch of retailing that had any connections to the video games. The biggest problem, much greater than Atari's internal debacles, was the lack of control by platform manufacturers over what third parties produced. This meant not even the slighest vestige of quality control and when third parties did produce a good product it was of no direct financial benefit to the platform company other than to help promote hardware sales. This was a minor benefit since the lucrative margins were in software, even in the era before hardware was sold at subsidized pricing.

Nintendo revived the industry not by having good hardware and/or software, any number of companies could have easily done the same, the Nintendo difference was in the business model for how third party support was controlled and made into the primary net revenue source for Nintendo. Once everybody understood this process and why it worked so well the industry as a whole became quite stable and prosperous. Brands have come and gone but the industry has been on a steady growth curve ever since.
 
Oops, the following was supposed to be the first section of my post:
The change coming here is the market becoming that much harder for small retailers. The industry will keep moving along but the retail channel will belong almost exclusively to large chains. While there has been much comment on the Best Buy blowout nobody seems to have noticed that (in the locations I've observed) they've already filled out their bins with deeper inventory of major titles that should thin out in time for the vast array of new titles due between now and Xmas. (Over 400 including all four current platforms.) Best Buy has done this sort of thing several times before, especially heading into a generational transition or a platorm doing a crash and burn. (I made about $3000 on reselling Sega Saturn game Best Buy cleared out for between $5 and $10.) They can afford to do this and write it off their taxes. The small independent retailer cannot so easily move ahead. When Best Buy catches a cold the little guys end up bedridden with pneumonia.
 
I think where defender is right is indy shops like his are the ones that are doomed(no offense). Just like indy music stores are dying. They have been crushed by places who use the cds, dvds & Games as bait to get you in a store. I can see few game developers going out of busness being crushed by the likes of EA.

I know defender knows more about video games then me, but I don't think the industry will crash like it did in 84. However the BB sale was strange, why didn't they cash out the games at 10 bucks ? Also how the hell can there be 3 EBs & 2 Gamestops in the same general area ? There are so many damn game stores it's nuts. The only b&m indy game store that I've seen last is Games 4 Less.

The BB sale may be a sign of bad things. Like a year before the DC died target sold 5 BIG titles for only 15 bucks a pop. NBA 2k1 (a 50 buck game) had been out only 3 months and they sold it for 15. Also Kmart wasn't selling enough DC games and stoped carrying the product all together. EB has thought about dumping their PC games. So maybe the industry is in a slump but it's a stealth slump that only the indy stores have started to notice.
 
[quote name='KingDox']
Also how the hell can there be 3 EBs & 2 Gamestops in the same general area ? There are so many damn game stores it's nuts.[/quote]

You have no idea. I live in the DFW area of Texas, about 4 miles away from GameStop's corporate headquarters. It is ridiculous. There is a GS every friggin' mile. I can think of two areas in my town where there are three (again, that was three) GameStop's within a mile of each other.
Soon enough I'll be able to work from home, because they are gonna open one in my damn living room. It's as though they are trying to compete with themselves. BTW, only one EB in my town. Wanna know why?
 
Video game pricing is well overdue for major changes but this well not be of any help to businesses like Defender's. It will improve the video game industry but it won't change the increasingly difficult prospects for small independent stores.

Video game pricing was originally driven by two factors: manufacturing costs for mask ROMs and market potential. ROMs were expensive and the long lead times and volume requirements for achieving the best cost meant that production runs in the early days of a platform could well exceed the installed base. The company had to hope the machine would at a sufficient rate for most of the inventory to sell through at full retail.

Optical media change everything. Per unit costs were but a small fraction of mask ROM and additional discs could be produced at very short notice with little or no cost penalty. Offering small retailers the ability to micro-manage their inventory on a weekly basis was a huge factor in Sony gaining acceptance for the newly launched Playstation in Japan a decade ago.

The primary limit now is market potential. If there are 10 million units of the target platform in homes and your game cost 7.5 million in development and marketing, how many units must be sold at $50 (with your net being, say, $8 ) before this game will be profitable? About 940,000 copies. If you go for a $40 retail with a $6 net will the lower price make for sufficiently greater sales as to achieve greater profits?

Other questions must be factored in, such as the popularity of the genre. If prior well regarded games of the same genre have never exceeded 500,000 in unit sales the chances are the no amount of money pumped into dev and marketing excess is going to to produce a monster hit that exceeds the genre's traditional reach by several multiples. Things like fishing simulators will be relegated to lesser budgets on the expectation that even the finest fishing simulator ever created is still only going to sell well compared to other fishing games.

Most successful games only sellthrough to about 5% of a platforms installed base. In the very early days of a platform there can be (non-bundled) games that reachas high as 90% but if the platform is successful its numbers will increase so greatly that the penetration of that early title will be reduced to the more typical 20% or much less. If the platform isn't successful it hardly matters. There may be a nearly 100% ownership of 'Crazy Taxi' among Sega Dreamcast owners but how many of those discs were sold at a profit rather than as final clearance?

So the anticipated installed base of the platform and the estimated reach of the game put limits on the budgets that allowed if the game is to be profitable. But what really creates the limits on a game's reach? How many gamers rely almost entirely on used games to feed their habit? If the average selling price (ASP) for new games was $24.95 could sell-through levels multiply as fewer gamers wait for used or 'Greatest Hits' pricing while those who were accustomed to paying $50 for a game instead purchase a greater number of games? Could penetration levels of 20% or more become common? For the US PS2 market this would mean games selling around 6 million units, a territory that only GTA III can currently claim.among games still in production.

The actual unit costs for a video game are only slightly higher (measured in pennies) than for a movie on DVD. If the movie includes a significant amount of printed material comparable to the game manual the cost can be considered identical. Numerous direct to video productions have been highly successful with budgets substantially greater than the average video game, especially with marketing costs figured in. The difference is that for someone like Disney a home video moving a million units is only the tip of the sales iceberg. While no one video game platform is likely to achieve an installed base comparable to DVD players it doesn't seem undoable for a company like Square to reach a substantially larger audience if the price resistance is greatly reduced. Likewise the hardware base is likely to achieve greater levels if the greatest longterm cost, the software, is viewed as less painful.

Any one of the platofrm companies could change their price structure at any time and send shockwaves through the industry. It just a question of who is confident and determined enough to make the move.
 
Regardless of how it goes down, I believe general public opinion is against paying for an online download of a game, without having some sort of physical medium to own. If a game is going to be downloadable, someone will figure out within a few days how to do it for free. I personally boycott all online gaming, because I don't care for any socializing in my gaming and I feel that single player only games are more story driven. If the distribution is forced against the public's will to online only, then in theory there are enough games out right now to keep us all occupied indefinitely.

Haven't there historically been shifts back and forth between gaming being a more hardcore activity vs a more mainstream thing?

I appreciate Nintendo not selling out to the online thing, and sticking to the principle that multiplayer games should be played with people you are sitting next to. If it kills them, fine, I'll enjoy it while it lasts. In theory though, they should be able to survive just fine doing business only in Japan. where Xbox has no appreciable effect.

Japan, half the U.S. population, 9% of unit land per person, ever wonder why the size of the Xbox is a big deal?
 
It had a hell of a lot more to do with being insufficiently Japanese and having an unpopular genre (for Japan) as its most heavily touted title.
 
[quote name='epobirs']It had a hell of a lot more to do with being insufficiently Japanese and having an unpopular genre (for Japan) as its most heavily touted title.[/quote]

AGREE'D
 
The 1984 crash sent reverberations throughout every branch of retailing that had any connections to the video games. The biggest problem, much greater than Atari's internal debacles, was the lack of control by platform manufacturers over what third parties produced. This meant not even the slighest vestige of quality control and when third parties did produce a good product it was of no direct financial benefit to the platform company other than to help promote hardware sales. This was a minor benefit since the lucrative margins were in software, even in the era before hardware was sold at subsidized pricing.
Click to expand...

This is what is happening now. Many of you acknowledge seeing certain signs of problems or changes. I am seeing rather disturbing things that have drawn me to my conclusion.

Someone mentioned the Saturn games at $5...can you really compare a low selling dead system sale to this BB sale of rather current title? This is what troubles me the most. BB is essentially liquidating almost new releases. So many of those games were rather fresh. Can ANYONE here recall a better sale than this one? I personally can't. The big TRU buy 2 get 1 free was really good but this pales in comparison. $4.99 OMG...how many of you dropped what you were doing and ran to a BB?

At least this is one of the most intelligent threads I have seen here at CAG and I thank everyone for their input and posts. Good work guys on having a cool debate.
 
There weren't THAT many new titles being liquidated. And it still isn't happening in my areas in SE Detroit area. 90% of the clearance titles were dust collectors in the first place: Blowout, hotwheels, hulk,. power puff girls, TMB, XRGA, whiplash, harry potter? Most of these have been in the clearance bin at Target for many moons now. Theres only limited shalf space for the number of new releases and I think retailers are going to be more selective in the titles they decide to stock. This could be a very good thing for the industry.

I'm really sorry to hear about your trouble Defender, but that's the nature of the business with inventories that have a steep depreciation curve. The same thing happened to all the Indy PC shops throughout the evolution of the PC. When inventory is so volitle in the first place, only the big boys can afford to absorb the potential losses.

Doesn't the VG industry always lag in the summer? Kids play outside in the summer, go to movies, spend their money on other stuff like bikes, cars, and other nefarious activities. Then during the fall and winter season that money gets pointed toward indoor activities like gaming.
Then Christmas is just around the corner to get your majority of profit for the year.

I think theories about an outright crash are premature, though. There is a userbase of 150 million console users. That market isn't just going to disappear. There are companies that will be there to meet the demand, unless the economy takes a shit and people don't have as much disposable income anymore. With gas prices rising things don't look promising, but they seem to be stable for now and I'd expect the economy to get stronger through the summer before the election (It usually does in an election year). I think it's just going to be a dip in the industry, which has the potential to get worse if they keep announcing new hardware in 2005. People will stop buying as much so they can wait for a new console, i.e. the Dreamcast phenomenon.
 
Actually there was a better sale then this one. The Citcuit city buy 3 games get 10 dollars off, combined with the save 50% on certain clerence games sale, could bank you 3 dollars a game if you knew the rite combinations. For instance i got Gitaroo Man, Wave Race bluestorm, and Headhunter for 10 bucks.
 
I was thinking about a crash will how heavy the discounts are getting . . .

I think there are some differences now . . . the industry is doing well . . . there are too many titles, too many publishers, perhaps too many systems.

The industry is definitely more mature now . . . but this is a tough part of the system cycle . . . there are tons of extra games out there now (used and clearance) and interest is waning because gamers are now waiting for the next big thing.

It is tough for a game to get noticed when everyone flocks to the big guns . . . there is no doubt that Halo 2, Zelda, Metroid, Jak 3, etc . . . will sell but it makes it hard for even a game like Prince of Persia to sell.

$40 is a decent price point (with a $5 coupon) getting a game like Ratchet and Clank for $35 is a good deal. Sony was smart to go to $40 for first party titles, this helped them cement their lead.

I think its more of a shakeout than a crash . . . EA will be fine, but don't expect all small players to survive without help . . . (Sony, Nintendo, or Microsoft cash infusions).

The idea of Nintendo or Microsoft dropping out on the hardware market is interesting . . .
 
Microsoft won't drop out of the hardware market. They don't have anything to fall back on like nintendo does (handhelds and first party software that can go third like nintendo.)

As soon as sega announced it sold to sammy, things started to go down hill quite a bit. For everything i mean, not just sega. Hey at least sega had the balls had to try new games with some good ideas that never got over.

Look no furthur then madden 2004 and espn football last year. Madden 2004= same old rehash garbage for 50 bucks.

Espn footballl had the first person football mode that was a big innovation in the football gaming department. what sold? madden of course. People dont like new or different, they feel more confident confining their money in sequels.
 
It is definitely interesting to get the perspective of someone who has been on the retail side (and successfully) for a decade.

Personally I haven't thought a crash is coming given how many people own a video game console. It is mainstream and not just something only kids own now. But I don't really follow the industry side of things.

I will say that given how quickly games fall in price, it makes me very reluctant to pay $50 for a game. I mean PGR2 dropped to $30 after just a few months. There is no way I'd pay $50 for the Rallisport game Microsoft just put out. I'd bet it will fall to $30 as well just as fast.

But personally I am very cheap, especially with games. If I can get a pretty good game for less than $20 (and I can probably think of at least a dozen titles I don't currently own I could order any time at that price point), I'm probably not going to pay $50 even for a really great game. Right now I have over 40 Xbox games and I've paid on average $9 per.

***Edited to remove a few 'definitelies' from the post.***
 
Being an older gamer, I have more responsibilites and less disposable income. I used to be able to buy 10 games a month easily but now I have to make decisions. I have over 200 games right now and I haven't even played 90% of them. I buy them to avoid missing out on them, it's a sickness. I have always considered $50.00 a game too high. No game should be higher than $40.00 and I think sport titles should only be $30.00 at best. I remember an economics teacher telling me that people see prices in a certain way. They see 50 as half of a 100 and that is considered too high. But 40 is not. I caught myself saying I can buy 3 $40 games for $120 and that is only $20 higher than $100. It's a matter of perception. My cousin worked at GS so he would get me games when they used to get 25% off so a new game was $37.50 for me and I would buy a lot more. The games industry seems to ignore the fact that the economy is down and that videogames are a luxury, not a necessity. I would love to buy more games but I need to have electricity to play them. I believe in supporting developers and I will never buy a burned game but they make it too hard. Games are shorter now and I'll be damned if I am paying $50 for a six hour ride. I remember seeing someone at DICE saying something about, "what does it take to sell a game these days" He was referring to so many great games that didn't sell for no reason. It's a shame that you need sex and violence to sell games. I used to tell people how bad BMX XXX was but they still bought it when I worked at EB. I have been reduced to waiting for the drop now, and I am less willing to take a chance on a game since I am stuck with it. Hopefully the industry will realize and make some positive changes. Look at the difference in sales of the Xbox and GC when they droppped the price. Downloadable games are not quite right yet, and the Phantom is a disaster waiting to happen.
 
[quote name='Ledhed']So next time you are at Target browsing their markdowns and you see a Mom pick up a game that YOU KNOW is total crap, for God's sake tell her. This is the only way anyone at our level can show publishers what we want.[/quote]

The problem is that a lot of parents want to get their kid a game but don't want to spend a lot of money on it. I've tried talking to parents I see with shit games in stores, and they always give me B.S. "well this is the game my kid really wants" routines, when we all know that no kid wants Evolution Skateboarding or Big Mutha Truckers.
 
[quote name='defender'][/quote]

i don't want to pry too much into your business, but i was wondering does your website do a lot of sales, espically from non-CAG's or is most of your business from the store? You don't have to answer was just curious about how many people cause my friend is thinking about opening a website for his store because like you he's only made $220 in sales the last 3 weeks (and that's only like $15 profit or something insane he was telling me), so he's panicing.


i think one of the problems now with VG market is the had such a huge year last year (even did better than movie businessm 14 billion in sales or something), but now there hasn't been any big titles so far this year most are coming out in Q4 so have to struggle til then.
 
The one thing that blows my mind about the $4.99 is that at that price it would be cheaper to buy the game than to rent it. I don't think I have ever seen that with games on a current system
 
you have to look at the other side of the coin, on the parents behavior.

Alot of places like circuit city, best buy, and toys r us have employees who nothing about the video games they sell. When a parent or person asks if a certain game is good, they always say "yes."

eventually the game sucks and you lose your trust in asking employees. Ya i understand it hurts when they don't trust you, but don't take it personal, understand their side too.
 
I think the drop in hardware and software prices are a result of competition, not a "crash". Competition is good for the consumer. Traditionally, the industry profits have been inflated by lack of competition.

Like a friend of mine used to say (who is a pc gamer and not a console gamer because of cost): "I don't like console gaming because the games are much more expensive. I can get a PC game weeks after it came out at a discounted price. You never see console games go down in price."

This was before there were so many $19.99 budget titles. And it wasn't until recently that ANY console games would be discounted unless they were "greatest hits". Now you see games even being released below industry standard price, and sometimes great games go on sale soon after they're released. This is what PC gamers have enjoyed for so long.

IMO, these lower prices are a normal result of competition and not a market crash. For retailers to survive in a competitive market, they obviously need to compete. Maybe buying a product at $42 and trying to sell it for $50 is not very competitive.
 
I tried to warn parents about GTA at Christmas but they kept saying it was on their kids list. I remember two mothers coming back really pissed off at me for selling such garbage. I of course told them they were warned, and proceeded to quote return policy about open games. I never took it personally since they were poor parents that didn't take an interest in their kids hobby. On the other hand, I had some parents thank me for warning them and taking the time the explain it. They didn't buy the games which upset the kid. It all balances at the end I guess.
 
[quote name='otz']I think the drop in hardware and software prices are a result of competition, not a "crash". Competition is good for the consumer. Traditionally, the industry profits have been inflated by lack of competition.

Like a friend of mine used to say (who is a pc gamer and not a console gamer because of cost): "I don't like console gaming because it is much more expensive. I can get a PC game weeks after it came out at a discounted price. You never see console games go down in price."

This was before there were so many $19.99 budget titles. And it wasn't until recently that ANY console games would be discounted unless they were "greatest hits". Now you see games even being released below industry standard price, and sometimes great games go on sale soon after they're released. This is what PC gamers have enjoyed for so long.

IMO, these lower prices are a normal result of competition and not a market crash. For retailers to survive in a competitive market, they obviously need to compete. Maybe buying a product at $42 and trying to sell it for $50 is not very competitive.[/quote]

The problem their is that they buy it at 42 but if a price war breaks out then they have to lower it to sell it. So if a game dropes to 30 in a month then they take the loss since they already paid for it and it is in their inventory. This is where the industry has to get involved and lower to costs to retailers. If I bought 100 copies of Metroid Prime at $4200 then it dropped to 30 a piece in a price war, then I take a loss of 12 per title at whatever I have left over in inventory.
 
For my own purposes I can quite quickly recall a better sale than this. A few years ago Sears was blowing out games like it was the end of everything. PSX and N64 games for $10, Dreamcast games for $15. Many of these games were major titles still selling for full price at the big chains. For instance, FFVIII.

Things were a bit different then with no dedicated web sites turning this sale into into an overnight clearance. Instead I was able to take the better part of two weeks to check out all of the Sears locations in Southern California. I put about 6K on a credit card buying all of this stuff and by the time I'd moved it all through Ebay had netted enough to move up a tax bracket if the IRS had known.

This worked out extremely well for me and will always stand out in my memory. I got a fair of items for my personal collection from BB this week but nothing I wouldn't have eventually found for a slightly higher price. It was more convenient for BB to do a greater markdown and allow the Internet to sweep that inventory out of the stores practically overnight than to go the traditional $9.99 route and have these title malingering and polluting the ASP of their bins for weeks. A majority of BB's customer base will never know this blowout occurred and won't be standing around waiting for the next. They'll go to their location when it's time for Junior's fix and plunk down $40 to $50 just like they always have.

At least nobody realizes what K-Mart is doing. Those stores are so depressing that I only recently forced myself to go in there just to see what was marked down. Much to my surprise their was a clearance shelf located well away the game cabinets and very easily overlooked. There I found a remarkable spread of $7.99 games for all three consoles. A few years ago this would have been a major Ebay score for me but word gets out too quickly and just isn't sufficiently profitable to go through the hassle anymore.
 
I don't see a crash coming at all.

Things are slowing for SURE - there aren't any new consoles to boost sales, it's now SUMMER TIME when few AAA titles get released, and the economy is in the shitter. People don't have $50 laying around like they did a few years ago.

But compared to other entertainment industries like the music biz or Hollywood, the game industry is doing GREAT.

There's a major difference about the way games are sold versus music or movies. Games are expected to drop in price to make room for new games. CD's are always roughly the same price even if they're 10 years old. This means to have a good selection at a music or movie store you have to stock, and keep in stock, much more then a game store. That makes things a whole lot more expensive in other ways and is one good thing about selling games instead. A game has about one year to make it's money then it's gone.

I think there's going to be more distinctions between AAA titles and "budget" games. Right now the consoles don't have that jewel-case budget rack but who knows, in a year maybe it will?
 
I've read through, and I can't recall a response with regards to another factor in the problem: the online gaming boom.

My girlfriend has a 16-year-old brother who plays SOCOM II like it's going out of style. At least 4 hours a day during school days... and now that school's out, his friends bring over their PS2's and they have SOCOM parties well into the night. She called it a "sickness" when we were in EB on Sunday.

And how would this pose a problem? Well, where would they find the time to play anything else with games that not only offer replay value on its own, but also offer the ability to play others around the country -- especially if the online aspect is addictive? It kinda puts a hamper on sales of games that, while, wonderfully constructed, have limited replay value beyond the first or second runthroughs. My girlfriend says her brother plays the shit out of games for three weeks, and dumps it forever -- but he's been playing SOCOM II since its release date. It may not be a typical instance, but it can't be that uncommon.
 
Sorry for your financial woes Defender, but like you said:
All we need is Doom 3 and Half Life 2 to get us through the storm(as gamers).
 
I didn't read this whole thread.. but has anyone noticed that where in the early 90s we were paying $50-$70 per game for SNES and Genesis games... now with much higher development costs and inflation, we're paying $30-$50 per game. I understand wanting to get a good deal, but all this talk about prices being too high makes me laugh.

By the way, not factoring in development costs, just pure inflation.. that $50 game in 1990 should be costing us $69.67 in 2002.

http://westegg.com/inflation/ in case you want to know how I got that number.
 
[quote name='Cornfedwb']I didn't read this whole thread.. but has anyone noticed that where in the early 90s we were paying $50-$70 per game for SNES and Genesis games... now with much higher development costs and inflation, we're paying $30-$50 per game. I understand wanting to get a good deal, but all this talk about prices being too high makes me laugh.

By the way, not factoring in development costs, just pure inflation.. that $50 game in 1990 should be costing us $69.67 in 2002.

http://westegg.com/inflation/ in case you want to know how I got that number.[/quote]
You are forgetting that SNES was a cartridge system much more expensive to produce
 
Genesis games were NEVER above $50 if I remember correctly. Stupid Nintendo thought they could get away with charging $70 for some games (I remember FF2 was $70 and thta was insane) until they started to realize their competition was benefiting from those prices.
 
I'd like to point out that it was only a few years ago when the PS2 first came out that most major retailers (TRU, BB, CC, etc.) were advertising all of their PS2 games at the "everyday low price of $49.99" like it was some kind of bargain or something. For me, $50 has always seemed like a lot of money to pay for just one game, so I simply didn't buy a whole lot of new games back then (couldn't afford to).

Today, it's still difficult to find many good games used (much less new) for $5, so when a place like BB has a $5 clearance sale, consumers would be foolish not to take advantage of it. However, I do realize such practices can hurt smaller shops financially, and I can sympathize with those it affects. The handful of independent shops I deal with also carry new and used CDs, DVDs, VHS tapes, etc., so hopefully such diverse inventories will be enough to help them through the tough times. I'd certainly hate to see them go out of business.
 
[quote name='jlarlee'][quote name='Cornfedwb']I didn't read this whole thread.. but has anyone noticed that where in the early 90s we were paying $50-$70 per game for SNES and Genesis games... now with much higher development costs and inflation, we're paying $30-$50 per game. I understand wanting to get a good deal, but all this talk about prices being too high makes me laugh.

By the way, not factoring in development costs, just pure inflation.. that $50 game in 1990 should be costing us $69.67 in 2002.

http://westegg.com/inflation/ in case you want to know how I got that number.[/quote]
You are forgetting that SNES was a cartridge system much more expensive to produce[/quote]

And the average development team for a game produced now is atleast 10 times as large (if not larger). I'd think that offsets the cost of producing a cartridge versus a disc. Quite honestly we should be paying for for games than we are, there's no explanation I've seen explaining why $50 is too high (other than 'I don't want to pay that much')
 
[quote name='meteors']Genesis games were NEVER above $50 if I remember correctly. Stupid Nintendo thought they could get away with charging $70 for some games (I remember FF2 was $70 and thta was insane) until they started to realize their competition was benefiting from those prices.[/quote]

You don't remember correctly. The Phantasy Star games were just as expensive as any of the SNES RPGs with higher price tags.
 
[quote name='meteors']Genesis games were NEVER above $50 if I remember correctly. Stupid Nintendo thought they could get away with charging $70 for some games (I remember FF2 was $70 and thta was insane) until they started to realize their competition was benefiting from those prices.[/quote]

Phantasy Star 2 and 3 debuted at $80 in most places, and Phantasy Star IV was $100. Virtua Racing was also $100. Most Genesis games were equal in price to any SNES game.
 
[quote name='defender']It wont wipe out the developers in this crash as much as the retail supply change. Kiss the mom and pops goodbye and even places like gamestop and eb may end up going online only. What's the point of them having stores anyways?

And Pukemon..I been saying this for months. A $30 price point would be great and also they need to stop the price dropping. I am sure that won't be a popular thought here. When Nintendo controlled the pricing and supply it all went smooth but with Sony and MS flooding the market and allowing any crappy cheap game to be mass produced....it's all crap now. Games are getting to a discount level so fast now.

As for the scam that ChrisXE has going on..sure that's fine for the couple hundred a month you make for yourself and you're part of the problem not the solution. I was making over $1 million a year in sales but now I am less than half that. I don't even want to embarass myself by saying how much money I make. Let's just say if I worked at McDonalds I would make more.[/quote]

I may be way off, I may be wrong, but I think Nintendo was penalized by the goverment for price fixing. (About 2 or 3 years ago...)

So, they have to allow for the retailers to sell at different price points. And drop the prices accordingly.

Just my 2 cents.
Matthew
 
[quote name='simpsonps121']I may be way off, I may be wrong, but I think Nintendo was penalized by the goverment for price fixing. (About 2 or 3 years ago...)
[/quote]

a decade and change, like 12 or 13. I forget when exactly it was, but it was in the late 80s. Pick up a copy of Game Over, the story of Nintendo, for more info on the lawsuit.
 
i actually agree with defender, and have been saying the exact things on another message board. i recently started a thread there where i'll let the facts speak for themselves:

http://www.gamerankings.com/itemrankings/MessageDetail.asp?itemid=-1&topicid=59985&sort=&pagenum=1

this is the "doom thread" which means i'm not posting good news. of course some companies are making money. eb, for instance. they may be one of the few companies to come out unscathed as they and gamestop come out as the blockbuster videos of the game world. but there is a lot of bad news coming out. the idea that the game industry is booming is overall false. money is being made, but companies are falling into hard times left and right.

this crash will not be the same as the 84 crash, but it will nevertheless be a crash.

the thread is mainly a place to collect articles on doom. if you see some, post them there and i'll add them.
 
[quote name='Alpha2']In '84 people just got fed up with all the games with limited goals and expensive price tags, if you asked someone to pay 50 bucks for Colecovision's Smurf adventure today you'd probably be laughed at and beaten to death.[/quote]

that game f'n rules! a precursor to super mario perhaps?
 
You must log in or register to reply here.
bread's done
Back
Top