From Kotaku:
Casual gaming growth has been the primary driver for the industry over the last three years, the key player being the Nintendo DS. We believe DS hardware demand has now peaked globally. A downturn in software demand is likely to follow, as casual gamers are ‘happy with their lot’ and do not need to consume more. We feel that the same predicament awaits the Wii console with its similar market expansion angle. Titles such as ‘Brain Training’ and ‘Wii Fit’ do not act as ‘gateway drugs’ to turn non-traditional gamers to core repeat users. We feel this is a structural industry issue that cannot be easily changed.
Continuing, Kamide adds that he believes the industry is in for a slowdown after three years of strong growth. Yet, Kamide adds, “Despite low consumer confidence, we feel core gamers will remain relatively resilient in terms of demand for marquee titles.” Meaning? In Japan, big games like Resident Evil 5, Street Fighter IV and Final Fantasy XIII should do well when released. Casual games? Well…
Where is the source, Kotaku? I tried googling online, and I couldn’t find the original source where Kamide said this. Everyone quoting Kamide has Kotaku for the source. I admit I might have been unable to find the original source, but everything points to Kotaku as being the original source.
Therefore, my conclusion is that Kotaku asked the analyst themselves about this.
It is clear that every line Kamide says in the quote is directed at “Birdmen and the Casual Fallacy”. ‘Gateway drugs’ is Western slang for smaller drugs that lead to the big stuff. Why would an analyst of KBC Securities Japan use such a phrase? It was first used by Bioshock designer who said games like Peggle were like Pac-Man which would be like a ‘gateway drug’ to bigger games for the new gamer. Most interviews come and pass on the Internet so I doubt Kamide is responding directly to the Bioshock developer in an interview many, many months ago. ‘Gateway drugs’ and the concept of upstreaming was the jewel part of the “Birdman” article. I even specifically mention DS as an example with titles such as ‘Brain Age’ where the user would want a more demanding game (not all, but definitely many).
In the past, I put up a quote by Brian Crecente (main guy at Kotaku) who dedicated an entry asking (paraphrasing) “Is Wii Fit’s success a matter of marketing?” and in the comments, someone put out the idea of upstreaming, and Crecente’s reply seemed more like a reply to “Birdman”. Since “Birdman” can’t be disproven, since upstreaming is a part of the Disruption Strategy which is currently re-writing the games and the rules for the Industry as we speak, Kotaku either sought out an analyst to speak against it or asked them directly with the intention of speaking against it. When titling this post, I first put ‘Analyst Responds to Upstreaming’, thought about it, then changed it to ‘Kotaku Attempts to Disprove Upstreaming’ since the ‘trigger’ for all this is really coming from Kotaku.
Honestly, I’ve never understood the fuss people have had about “Birdman” (I’ve felt the other disruptive articles are much better, but, curiously, no one wants to talk about those even though it is the same content as ‘Birdman’. Actually, I have a good idea why they will everything to avoid saying disruption but I’ll save that for another post). Taking all the disruptive jargon away, upstreaming is simply just when a new gamer starts a simple game and slowly gets more and more into gaming. What is so hard or frightening about that concept? You would think that game journalists would be thrilled that gaming was fighting back the frontiers of indifference. Instead, they appear to be attempting to disprove it. Why? I haven’t a clue. They’re just wasting their time and revealing who they are (which is why I want them to continue).
Unfortunately for Kotaku, analysts are not emissaries from God. Their word is not law. No one is buying what Kamide says. For fun, I’ll go through it line by line:
Casual gaming growth has been the primary driver for the industry over the last three years, the key player being the Nintendo DS.
First, it starts with an assertion of ‘casual gaming’ which ‘Birdman’ shows doesn’t exist. In ‘Birdman’, quotes are given showing that ‘casual gaming’ was said to be the growth of the industry years before even DS or Wii came out. ‘Birdman’ advises that when you read ‘casual games’, you should replace it with ‘retard games’ as that is how the Industry truly thinks of such titles. From here on, ‘casual gaming’ will be ‘translated’ to retard gaming, and you will find it works much better.
We believe DS hardware demand has now peaked globally.
Why? The analyst does not say, he merely goes on.
A downturn in software demand is likely to follow, as retard gamers are ‘happy with their lot’ and do not need to consume more.
In ‘Birdman’, it says that those who just blindly pump out ‘casual games’ will eventually fall down into the abyss. The article states that the fault is not with the downmarket but with publishers attempting to copycat Nintendo’s success with the most outward elements and not understanding disruption at all. It is the copycat elements that lead to a fall, not the downmarket itself. It is the same way when GTA clones didn’t sell.
How does Kamide know downmarket gamers are satisfied with their lot? Did they fill out a survey? How does Kamide know this? He doesn’t say, he merely goes on.
We feel that the same predicament awaits the Wii console with its similar market expansion angle.
Feel? Come, come! I honestly would love some reasons. Simply ’stating’ it doesn’t make it so. I would love a real rebuttal of ‘Birdman’ but none has ever appeared. All that has appeared are jabs at the imagined Malstrom or the writing style. If there are arguments, then make it. But apparently, there are none or he would have said something.
Titles such as ‘Brain Training’ and ‘Wii Fit’ do not act as ‘gateway drugs’ to turn non-traditional gamers to core repeat users.
And why is that? He does not say; he just merely goes on.
We feel this is a structural industry issue that cannot be easily changed.
A STRUCTURAL industry issue? Has the industry become an opaque building? We do know, FOR A FACT, the Japanese market has grown thanks to the DS. We also find ‘core’ game software such as ‘New Super Mario Brothers’, ‘Mario Kart DS’, even ‘Animal Crossing WW’, as well as many other ‘gamey’ type games breaking previous records. How could this have happened unless those ‘Brain Age’ and ‘Nintendog’ gamers went upstream? How could Final Fantasy III DS sales totally shock Square-Enix that they decide to remake Final Fantasy 4,5,6 as well as Dragon Quest 4,5,6? How could all this happen on the DS whose growth is said to be primarily done by so-called ‘casual gamers’?
Wii Fit, of course, wasn’t mentioned in ‘Birdman’ (I don’t believe) but it was mentioned by Crecente in his comment arguing that Nintendo cannot possibly be “minting new gamers”. It sounds perfectly reasonable that people getting into Wii Fit would be open to other Balance Board games and would likely try them out. Not all, of course, but many.
Kamide, in the past, has also said that PS3 had a proper launch and, in December 2007, was on the ‘upswing’. Yeah.
Now look at this comment from someone named 108 who says he is a writer for Nextgen.biz.
I could have told you this a year ago.
In fact, uhh, I did tell (several) people this a year ago.
In fact, I even published an article re: this about six months ago, on Next-Gen.biz. (Internet detectives, find it, if you can.)
Sony took the market from Nintendo once before; they can do it again. Hell, even Microsoft can wrest control from Nintendo. The marketing guys have more than enough clues to crack the future case of “what killed Nintendo” right here and right now.
Basically: do what Nintendo did, only do it with better graphics, for less money.
If you ask me, Monster Hunter is the way of the future — it’s a casual-style game that people can enjoy in groups, that people can talk about in casual conversation, that people can have casual conversations about other topics while playing, that celebrities will mention off-hand in magazine interviews on completely unrelated topics. It has all the trinket-collectionism and friendly “hang-out” atmosphere of Animal Crossing, only it’s married happily to hardcore arcade-style precise-button-slamming / stuff-killing action, with none of the numbers or (monolithic) pacing issues of an MMORPG. Simply put, Monster Hunter is the gateway drug.
I could have told you this four years ago — and, uhh, I did. Man, I should be making at least a hundred and fifty thousand dollars a year, I’m not kidding. I mean, seriously.
How ironic, then, that Nintendo picked up Monster Hunter 3, snatched it from Sony. It’s not going to end well — all Monster Hunter 3 on the Wii will do, by gimping the game with friend codes and chatless online multiplayer, is prove that maybe — just maybe — the Wii isn’t future-proof. Maybe it’s not the ideal gaming machine.
If Sony had had Monster Hunter 3 and Metal Gear Solid 4 a year earlier, with a lower price tag and a PlayStation Eye included in the box, I reckon it wouldn’t seem nearly as “ridiculous” to the internetters and fanpeople of the world to suggest that Nintendo won’t be around until the sun explodes 50 billion years from now.
Something about ‘Birdman’ has really rattled these people. I was always stunned how popular the article was but I’m stunned how it keeps creating chaos even today. Even when I’m on vacation!
For testing purposes, I’m going to leave comments open on this one. Comment away!
I don’t know what it is about this current cycle that has caused most of the movers and shakers in the industry to go batshit insane.
Once fanboys resort to “If’s” and “whyfors,” the debate is ended on account of ridiculousness. Why? Well, I can play too! “If the Nintendo 64 cost $40 and came with FFVII in every box, it would have sold 3 billion units and Sony would be banished to Mars.” They can’t even predict the real world right, so they’re gonna try their hand at parallel universes like it’s relevant.
I don’t get why upstreaming is so hard for them to understand. Seriously. It’s even innately programmed into our biologies. We start with a liquid diet from our mother’s breast (or bottle) and them “upstream” to solid foods like bread and meat. It. Is. That. Easy. What boggles my mind is how they expect people who bought the PSP or PS3 for media storage or UMD or Blu-Ray to suddenly develop an interest in games out of nowhere. So it’s impossible for people who bought Wii Play or Wii Fit to move onto more complex and demanding games, yet people who watch Blu-Ray and UMD will become such upstreaming all-stars as to watch a movie, cross-stream onto another medium, jump past the casual games, and buy FFXIII? What bullshit.
What this industry needs to do is BACK THE MARKET LEADER. It is the standard M.O., or at least it was until Wii showed up. This bitter Nintendo fan clearly remembers the days of GC and N64, where games were not even considered for the platform simply because it wasn’t the market leader. But since the Wii came out, it’s been “DURF SLURP SLORP HOW DO YA MAEK VIDYA GAYEMS?!!” from the big publishers. I’d laugh if the smaller third parties that are SHAMING THEM didn’t have to go through them to get their games published.
And upstreaming can be easily proven. Mario Kart DS is currently the best selling version of Mario Kart in the history of the series. Why is that? Higher userbase you say? And why is that? Come on, I know you know the word. Non-gamers and casuals, right? And they bought Mario Kart DS. Upstreaming. Unless you want to argue that there were a few million latent Nintendo fans who were ashamed of Mario Kart until a new console came out that was popular enough for them to not be ashamed or something.
Even tertiary titles like Mario Strikers: Charged have benefited from upstreaming. Sales are up mostly across the board for everything Nintendo’s done. It is evident, it is happening, and those in front of it will become the big cheeses in the future while the bigs stumble around like chickens with their heads cut off.
By: Jeff on June 18, 2008
at 12:40 pm
I’m not gonna be posting a mini-article like Jeff here, but I just wanted to point out that I don’t think Final Fantasy 5 and 6 remakes have been announced. I’m not saying that it’s unlikely, I’m just saying that it hasn’t happened (yet).
By: Juja on June 18, 2008
at 2:09 pm
This is more for the EA “Cult” post, but it fits here too. Shorter version of the Metal Gear Solid 4 reviews:
“You don’t actually get to play Meta Gear Solid 4: Guns of the Patriots, per say, but we gave it a 10 anyway.”
Note to game blogs that “revolutionized reviews” by not using number scores: The number score wasn’t the problem.
And, how funny that MGS4, and its arrogant creator Hideo Kojima (search for his quotes on the game industry, PLEASE), are going to be the bookend for the overshooting era in gaming. He’s stuck in the CD-ROM era–70-minute cutscenes are the answer?! That such a grandiose, bloated, self-absorbed game will be the final chapter before everyone starts playing video games (washing the hardcore away…), is a fitting end, methinks.
PS– MGS4 also had no discernable effect on hardware sales, just like GTA4. Kotaku’s audience isn’t growing, which must chap their ass to no end.
By: J-Man on June 18, 2008
at 3:52 pm
I Googled the quote “We feel this is a structural industry issue that cannot be easily changed.” without the words “Kotaku” and I find 3 useful links. Unless in Kotaku exists someone who knows japanese, your assumptions must be correct. But using old facioned instinct… you are correct Malstrom
By: GinnyN on June 18, 2008
at 9:46 pm
@Jeff
Great comment! I can feel your frustration. While I wasn’t around during the N64 and Gamecube eras, it is amazing how some people are attempting to twist facts around those systems. N64 did fairly well, especially in America. The Gamecube and the Xbox sold around the same number of systems with the difference of Gamecube being profitable and selling more evenly worldwide (meaning Nintendo could clearly bounce back from that position). However, ‘The Cult’ said Gamecube was ‘the great failure’ while Xbox was ‘the huge success’. It makes no sense. Currently, the continued cries that Wii and DS will collapse because they are ‘fads’ are also ridiculous and becoming tiresome.
There is a story I want you to read: http://www.gamesindustry.biz/articles/next-gen-business-models-are-embarrassing-says-brennan
In the story, the ‘copycat mentality’ is shown as well that publishers look at Next Generation as ‘big ego trips’ despite the costs. Many developers are ‘hardcore’ and look at the Wii not unlike our hardore fans on the Internet do. They simply want to make games for themselves.
Publisher reluctance on the Wii is likely defined to three ways:
1) ‘Hardcore bias’. Making ‘next gen’ games is an ego trip to them.
2) To be fair, many third parties missed the boat entirely on the Wii and had their development studios geared up to make Xbox and PS3 games. Even for good Wii games, it takes at least a couple of years of development. This E3 we should be seeing the new projects.
3) Some companies are afraid of disruption. Epic will never put any games on the Wii because they are interested in selling Unreal Engine 3 which Wii cannot run.
Throughout the livelihood of the NES, third parties dragged their feet and some went so far to attack Nintendo in the courts. They did everything they could to hold out. One of these companies was Electronic Arts.
I think much of the NES history will repeat. However, this time, company heads are a little more mature than they used to be. They know they need to be ‘console agnostic’. They all want money so they will come to the Wii just as they came to the DS.
What I think we won’t see change is the press and analysts. The hardcore will begin to love the Wii, as they did the DS, once more hardcore games come out for it. The game journalists and other more elitist hardcore despise the Wii more than anything else. They believe gaming is an ‘artform’ and that Wii is going ‘backwards’. When they say ‘non-games’, they really mean ‘non-art’. This is why they call ‘Brain Age’, clearly a game, as a ‘non-game’ because it doesn’t strive to be artistic while they call MGS 4, which is full of passive cutscenes to be ‘hardcore game’ because it strives to be ‘artistic’. These elitists are more art snobs than gamers.
I think they all jumped on the ‘Casual Market’ myth because that segmented the market in their mind. The last thing they want to do is review or cover the expanded audience. ‘Casual Market’ is a way for them to segment people.
It isn’t that the hardcore do not understand upstreaming. They do. It is that it scares them to death. Upstreaming would mean that there is no segmentation in gaming, that DS and Wii are not ‘fads’, and that the entire market will be permanently changed. Hardcore are emotion driven, not fact driven. Upstreaming so challenges their bubble that, in the desire to feel good once again, will do anything, use anecdotal evidence, to getting analysts to say things they want to hear in order to ‘feel’ that all this change is just an ‘anomaly’.
I’ve learned in life that many people prefer to deny reality, if it makes them feel good, than accept the truth no matter how unpleasant to the present. Of course, by denying reality it is just kicking the pain can down the road. Eventually, reality will be faced. The longer they deny it, the more painful it will be.
Analysts have a motivation to not mention and deny disruption every chance they get. The anti-thesis of analysis (using tools to look to the past) is theory (using tools to look to the future). Christensen hammers analysts in his book because their reliance on the past means they are completely incapable of dealing with disruptive innovations. How can you analyze a market that does not yet exist?
With analysts, as with everyone, there is a variety of people. Some humble, some arrogant, some smart, some stupid. The smart ones incorporate Harvard Business School tools in their analysis. One, Urlocker, actually quit being an analyst and became an evangelist for disruption theory after witnessing the Blackberry ascent.
@Juja
You’re correct that FF5 and FF6 DS haven’t been announced yet. I goofed there. But it is pretty likely they will come.
By: seanmalstrom on June 18, 2008
at 11:31 pm
@J-Man,
I really liked EA President’s label of them as ‘The Cult’. It fits extremely well.
I’ve noticed that 10s are, somehow, being given out much more frequently than before. Part of this is obviously insane budget next-generation games using such money to ensure such reviews (such as the GTA IV reviews). I do think part of it is the hardcore reaction to the paradigm shift. The more cinematic a game is, the more lavish they will praise it. The more ‘new gen’ a game is, the more they will scorn it. Each and every Wii killer hit was despised by the hardcore. The more hardcore despise a game, the more likely it will succeed.
You bring up an interesting point about Kotaku. If I was running a gaming blog/site, I would interpret the Wii explosion as an opportunity to expand my business. After all, new gamers means new opportunities to serve them. But their reaction is, instead, to attack and belittle these new gamers. They are hardcore first, journalists second.
@Ginny
Kotaku’s Crecente is in Japan. All the points the ‘analyst’ gave are so identical to upstreaming that it reads like a direct response to ‘Birdman’. The jargon of ‘gateway drugs’ is a dead-giveaway.
Every now and then, I play “Google Malstrom” to see people’s reactions and what has spread. “Birdman” keeps spreading and spreading. I also keep getting new emails from people reading it for the first time. You know something has rattled someone when an analyst has to respond to the point specifically. It is like a hit piece on the article (without mentioning the article as not to spread it any further).
I never dreamed this would happen. What I find most interesting about Kotaku’s post was that they were unable to get Pachter and other well-known analysts to denounce upstreaming.
By: seanmalstrom on June 18, 2008
at 11:57 pm
I’d like to say It’s a real shame that there’s a game journalist cult where everyone has to look at games as cinematic experiences as opposed to fun unique experiences. I think readers tend to miss out on a lot because of this.
By: liquidninja on June 19, 2008
at 12:24 am
actually what they all get wrong is that there is a form of art in video games
the art in making it…no not the 90 minute cinematics (MGS4 anyone?)
but I mean, how to connect the player to the virtual world, through hardware AND software
and till now only nintendo truly does that
just take a look at games like mario kart Wii, wii sports, Mario Galaxy
they all feel alive and fun while you play them.
while these so-called AAA games are just ripoffs of their old versions (GTA4) wich bring not a single new thing to the gamers
and as gamer I have to agree
I do NOT pay for hardware
I do NOT pay for software
I pay for EXPERIENCES
I bought the Wii because I saw promise in the new controller, not for the accelerometers,
but because I could only imagine what kind of games would come out besides the two I wanted back then
looking at the other consoles gave me no reason at all to want them….sure they have all these awesome looking games
but where’s the fun? 600 dollars for a ps3 is really cheap IF you use all features..
I want DAMNED games! and fun social games..
like MK Wii and SSBB
not some gay MGS4 wich will take me 50 years to finish…thanks to cinematics
sorry..
/rant
By: Kevin on June 19, 2008
at 2:25 am