I like Peter Moore, but he is wrong on digital distribution concerning consoles.
He says:
We all recognize that, and we’ll recognize it 10 years from now when we tell our grand kids,” he said. “We’ll tell them we used to drive to the store to get shiny discs that have bits and bites on them and we’d place them in this thing called a ‘disc tray,’ and it’d whirl around…and they’ll go ‘What?'”
“So, the concept of physical packaged discs and the core business model that is video games as it currently stands is a burning platform.”
I have a real life story that I would like someone to tell Mr. Moore. This story is 100% true and people can go to several message forums years ago to validate its authenticity.
The story goes as follows:
“While you all may have all your PS2s, Xboxes, and Gamecubes with more games than you can possibly play, you still have not experienced what gaming actually is. There was a time, twenty years ago and further, that a video game console was placed proudly in the living room. When it was bought, you were king of the block and the entire neighborhood would circulate through your house playing it. Everyone played the game console. Families played it. Women played it. Mothers and fathers played it. In this time period, games and controllers kept morphing and twisting. While there were copycats then as there are today, there was no such thing as ‘genre’ or ‘franchise’. Every game was practically its own genre. Twenty years ago, everyone would rush out for the game console, and everyone would play it together. Gaming is not mainstream. In fact, it is less popular today than it used to be.”
When people argued that gaming was ‘mainstream’ because of ‘PlayStation’, they clearly were not interested in hearing about population growth or global trade. The common argument then, as is the common argument believed by the ‘analysts’, is that as more people grow up on games, there will be more an ever growing number of gamers. So I ask why there is so much stigma against gaming whereas there was none of it twenty years ago. They have no answer to this.
This is why it was so easy to see the Wii’s success coming. Wii actually wanted to be a video game console. It did not want to be a movie player that could also play games. It did not want to be a monstrous top box to control the TV. Wii (as well as Wii’s marketing and advertising) is very reminiscent of the Atari 2600 and somewhat the NES.
But NONE of our little geniuses in the “Game Industry” saw the Wii coming despite the DS success. Our genius analysts didn’t see it. Our genius decision makers at EA didn’t see it. Our genius suits everywhere else didn’t see it. Despite this, they are *convinced* that digital distribution is the future. If they were so wrong about the last five years, what makes anyone think they are going to be right about the next five?
What is so wrong with the Core Business Model anyway? Discs are not expensive to print. Used game sales are from unhappy customers so they aren’t stealing customers (i.e. if one unhappy person sells and someone buys it and is happy, the effect is nil on the overall customer sales). The Core Business Model has worked extremely profitably for the “Game Industry” in the past and even now.
No one has cited any problem with the “Core Business Model” aside from absurd hyperbole from used games (and used games have been around since the Atari 2600).
Occam’s Razor applies. What is the simplest answer? That the Core Business Model, which has grown the “Game Industry” very well up to now somehow, without anyone knowing it, in the middle of the night, became horribly flawed and publishers must abandon it immediately. OR that the Core Market is no longer as healthy as it once was?
It is far more probable that the Core Market is what is burning. Other companies, like Nintendo, use the “Core Business Model” and reap in profit.
Blaming the ‘business model’ is a real problem that occurs with new companies. Sometimes it takes time to find the correct business model. But no one is asking why the current Core Business Model is now suddenly failing. What happened to it? Years ago, it was praised. Now, it must be abandoned? Why?
No answer.
I have more bad new for the “Game Industry”. Peter Moore may go around making up pretend stories, but I have real stories that go back decades. And I have more stories not yet told. One of them is this:
“Over twenty years ago, it was understood by everyone that console gaming was in the hardware business. Games were hardware, not software. This is because of this thing called ‘arcades’. Back then, arcades were very popular. The game maker had to make the interface and the cabinet. Every game had a different interface that went beyond the number of buttons. Games like Marble Madness used a track ball. Games like PONG used a paddle. Racing games used steering wheels and pedals with moving chairs. On the home side, gaming was also considered hardware. Games were cartridges after all. Legend of Zelda would not have been possible without the invention of the battery inside the cartridge. Various chips were placed within the cartridges to create new experiences. Then, of course, there were the many varied controllers.
“Only computer gaming was considered software especially after the collapse of the game centric computers that got disrupted from the NES. The reason why is that all computers are different. Computer software is tailored to operating systems with various hardware. One software can run on many different types of hardware. Consoles, on the other hand, are hardware centric. If consoles were not hardware centric, then the game console would be nothing more than a computer plugged into the TV.
“The future of console gaming is physical hardware, not cloud software. Cloud software might very well be the future of computer gaming, but not console gaming. This can be confusing since people do not make the difference between the two anymore. PC game companies are now on home consoles. The reason why is because the PC Core Market has collapsed. Should we be so surprised that the Core Console Market is following?”
Prior to the Wii’s success, a major red flag that was an indicator was the big success of the DS. I have asked why didn’t anyone see this red flag waving around. How could they miss it?
The answer is because they didn’t want to see it. Back then, people said, “Those are handhelds. The console market is DIFFERENT!” They did not explain how the console market was different. But it was clear they thought making that statement was sufficient enough to smooth all doubts… at least in their minds.
With all these people talking about ‘clouds’ and digital distribution, there is a another major flag that is waving that they apparently are not seeing or do not want to see. Nintendo’s success this generation has been entirely due to the game molding side of the hardware, not the software. Only a game company would mold the hardware of the DS or the Wii and its controllers. There was also the music game fad that, ironically, the founder of RedOctane doesn’t see. Games like Rockband do not prove that digital distribution works but just the opposite. People want to have those controllers, that hardware. No doubt that the plastic guitars and all were instrumental to the music games’ success.
“But what about music and movies? What about iTunes?”
What about theater? What about concerts? What about people going to sports games? Those physical events are things people like to still go to.
“This is different! I am talking about entertainment and the marvelous trends that the Internet is causing! Digital Distribution, yay!”
You are not talking about entertainment. You are cherry picking. You are taking the entertainment mediums that fit the vision you like while excluding all the other entertainment mediums that are not fitting your digital utopia.
What no one is doing is using gaming as the benchmark. They are using other industries as if that proves the point. The belief that all things entertainment must and will go ‘cloud’ is poppycock. There is no destiny, no grand divine push by history. What will shape the future will be whatever customers want.
Music and movies were never hardware dependent. Music and movies are recordings that are played back on “players”. Games are not recordings. Games are ‘broadcast live’ from the hardware. The hardware is not a digital beam of electrons that channels the game into the TV, it is the instrument of the game.
When a movie or music player changes, the movie or music does not fundamentally change. It might play on five speakers instead of two. It might be widescreen when it wasn’t before. But “Star Wars” is still going to be fundamentally “Star Wars” no matter if it is on cassette, DVD, or digitally distributed.
But video games do change with the hardware. In fact, they change radically. And when games are taken off the hardware and placed on another hardware, the experience is never quite the same.
Let’s not forget that the music and movie industries were dragged into digital distribution kicking and screaming by consumers. They didn’t want to go. They saw themselves as losing money.
The trend is not digital distribution. The trend is customers going the way industries don’t want to go. And the trend the console game consumers will go is toward hardware. PC gamers may be happy in the ‘cloud’, and that is fine because it will differentiate the PC and console as they have been wrongly blurred together recently.
It is time to use the benchmark of gaming as… gaming. Not music. Not movies. But gaming. There has been decades of gaming. Certainly, one can detect some patterns. And one of the biggest patterns there are is that the console gaming is all about hardware. If it weren’t, people would just play computers hooked up to their television sets.
Here is what is going to happen. Ten years from now, people are going to look up this post. And they are going to ask, “How did this guy get it when the wizards of smart in the ‘Game Industry’ didn’t get it?” The answer is not because I am smart. The answer is because the past is prelude to the future. It is incredible that the future of gaming is always presented as the present of another entertainment medium. No, gaming’s future will not be the future of music or movies.
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