A thoughtful email. Here it is in entirely below:
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Hi Malstrom!
The Gamasutra story where the analyst was “analysing” the survey was so interesting, i thought i should analyse the story.
Surveys itself are interesting, not because of what people answer, but because of what is asked. Surely, i don’t know what the “fall-holiday survey” asked, but i think we still can get something out of it.
Despite broadening audiences and casual platforms, core games remain the best investment for video game publishers, says Cowen Group analyst Doug Creutz — who says “the Wii bubble could be deflating.”
This is just blowing hot air. Looking at where 3rd parties have had their biggest successes, then yes, core games remain their best investment. But we can also look where their biggest failures came from — surprise, they’re core games just as well. Also, the end of the world could be coming tomorrow.
Revealing the results of a broad fall-holiday survey, Creutz says Wii owners are buying fewer games now than they did a year ago — while Xbox 360 and PlayStation 3 plan to buy more.
This most likely is “on average”. Biggest installbase still can sell the most software, even if games are bought less per user. There was also the keyword “plan”. Planning on buying something doesn’t automatically translate to purchase, just like “not planning on buying something” doesn’t translate to “will not buy”. 360 and PS3 owners on average likely follow the hype in the internet, as opposed to Wii owners who buy more games based on when they see it on a store shelf, so if the survey had been made after the COD release, we might have slightly different results.
This also is where background information would be very important. If you’re a teenager who doesn’t earn the money you spend, there’s little to none substance in your purchase plans and as we know, the HD consoles are the most popular among teenagers… After all, i’m planning to buy a Ferrari — if i ever get the money to spend into a Ferrari.
This is partially a function of the economic climate — core gamers are the group least likely to trim entertainment spending when budgets get tight. Consumers who own only a Wii, however, are least-likely among all current-generation platforms to increase their software purchases this holiday, he says.
When recession hits, where you spend the most money is going to be hit the most, while where you spend the least money, is going to be hit the least. This also happened during the 30’s. The most hardcore movie goers most likely cut their spending in movies, while the number of casual movie goers exploded and the existing casual movie goers didn’t have to cut down their spending to movies. And, obviously relating to the previous, the proof of substance is missing.
Over half of Wii owners also own an Xbox 360 or a PlayStation 3, Creutz says — but of those who own more than one console, only 23 percent consider Wii their main platform, which means bigger holiday wish lists among core gamers are more likely to benefit core market games rather than Wii titles.
I would love to see the results for other platforms aswell. 77 percent left for the two HD consoles and PC (notice the different wording platform=/=console).
A big fail was to differentiate Wii games and core games, Wii does have lots of core games. This tries to indicate that Wii isn’t in the core market at all (despite it contradicting what was said about half of the Wii owners owning a second current gen console). Here would be interesting to see the percentages for the other consoles aswell. Wii has around 45% of the current gen installbase in NA (where the survey obviously was made), then this means that about half of the HD console owners owns a Wii. Console specific numbers would be very interesting.
“While core gamers who own a Wii own more Wii games on average than casual gamer Wii-owners, the average title ownership spread between the two categories of gamers is much lower than it is for owners of Xbox 360 and PS3 consoles,” says the analyst.
Without knowing the specific numbers for attach rate, this can only mean that either casual Wii gamers buy more software on average than casual HD-console gamers, or core gamer on Wii buy less software on Wii than they do on HD-consoles, or then it simply means both. Oh, and casual gamers aren’t antithesis to core gamers. A large number, most likely the majority, of current core gamers are casual gamers.
Creutz concludes that core gamers who own multiple consoles are primarily buying Wiis to play Nintendo titles, and not games by other publishers.
Yes, there aren’t that many 3rd party core games on Wii that come even close in quality to Nintendos core games. Core gamers buying Wiis for Nintendo titles is the result, not the reason. And this is where the guy points out that Nintendos core titles are strong enough to warrant a purchase.
“We believe that the optics of this hardware cycle have been significantly distorted by the explosive growth of the Wii console,” says Creutz.
Distorted from what?
The Impact On Publishers
Wii was the primary driver of industry growth in 2007 and 2008, and remains the top-selling console in America. But according to the analyst, “its success did not correlate with strong performances by the U.S. software publishers as a group.”
Hahaha, “strong performance as a group” is just a way of saying “most of the industry did like shit, but with a couple huge hits, it managed to pull its head above the surface”. Software publishers, in real life, don’t work as group. It’s not heartwarming to see your biggest competitor to prosper while your own company is facing bankrupcy. Just look how Modern Warfare 2 made EA to prosper.
And with Wii hardware and software sales declining, investors have become much more cautious about the games business — meaning further negative impact for U.S. publishers.
I love this… This is just saying how meaningful Wii is to games industry. If Wii falls, the industry falls due to lack of investment.
In other parts of the article, future is used to show how the HD consoles will be doing good, while this particular part is predicting the past — early this year. A smarter guy might notice that the competition didn’t do any better.
“While we believe the Wii is likely to be a drag on overall software sales through the holiday, the impact should be limited to those publishers which have invested significantly in Wii development, with the biggest negative impact likely to be felt by Electronic Arts, which (unwisely in our view) heavily invested in Wii development for [calendar 2009],” says Creutz.
With NSMB Wii, Wii Fit Plus and Wii Sports Resort? Drag indeed. EA did right to invest in Wii, it’s just that their projects have mostly been the wrong type. But with all the money they make with the HD consoles, success on Wii is meaningless. Right?
Sony’s PS3 Strategy To Bear Fruit At Last?
On the other hand, Creutz says, the PlayStation 3 looks poised for a strong holiday — 21 percent of survey respondents who don’t currently own one plan to buy one this season.
Great for PS3. So many people wanting to buy PS3.
That’s slightly below the Wii’s 26 percent intent figure, but nearly double the Xbox 360’s 12 percent purchase intent, according to Cowen’s survey. And Sony’s long-held faith in brand loyalty may finally bear fruit: the data also shows that 32 percent of PlayStation 2 owners who haven’t yet bought a current generation plan to buy a PS3, versus 19 percent for the Wii and just 9 percent for the Xbox 360.
WTF? Even more people wanting to buy Wiis. Why wasn’t this mentioned above? What’s funny in this is, that the really meaningful figure, which is people who don’t own a specific console yet, is tried to be downplayed by with the figure of people wanting to upgrade. 21 percent is very good figure, but the data so far is showing that what really is doomed, is Xbox 360 (which is no wonder since PS3 is doing strongly). Expect new Xbox release soon.
Also, there’s 50% undecided left.
The uptick in intent is largely credited to the new $299 price point, says Creutz — and the Blu-ray player may finally be helping the console too, as consumers showed a willingness to pay slightly higher prices for a console with one versus without.
Indeed. PS3 eats away sales from 360.
“With the frontline Xbox 360 console (the Elite) also retailing for $299, we believe Sony now has, for the first time, a significant price advantage at retail, particularly in the minds of serious gamers who are more likely to be considering the PS3 vs. the Xbox 360 Elite rather than the $199 Xbox 360 Arcade version,” the analyst concludes.
What price advantage PS3 has? When two products sell for the same price, neither has price advantage. PS3 may have advantage with features, which previously have been nullified with higher price. The serious gamer (not core) is opposed to casual gamer. If PS3 is eating away the serious gamer and Wii owns the casual market, the 12 percent purchase intent is just going to go down.
Summa summarum: It’s interesting how the first half of the story is trying to show how Wii is doomed, but the latter half ends up showing that, in reality, 360 is doomed. Hahaha.