Posted by: seanmalstrom | March 6, 2014

Email: Business models of video games have changed over time…

So someone had this to say about a year ago when I posted some of your articles on a forum.

“The disruption article he wrote several years ago is when the Wii was destroying their competition. One of the premises was that the Wii brought in the casual gamer with its simplistic controls, and that their competition with Kinect and Move were too late to the party. However, one of the biggest problems was that Nintendo did not continue to create games at a quick enough pace, which led to consumers purchasing their competitor’s consoles. Throw in this was before everyone had a smart phone and tablet computer, and Nintendo was heading for success.

The later part of the disruption article focuses on going upstream, as in after the core or hardcore gamer. Now Reggie and Iwata said they were focused on the core gamer leading to the Wii U launch. However, the problem was the Wii U was too late to the party and it is underpowered. The premise of the disruption article was that if Nintendo were to create a console on par with their competition, consumers would move toward Nintendo, their competition would see a loss in sales, and Nintendo would come out on top.

But again, this article was written in a time before we had micro-transactions in games, DLC was just beginning, monitization of free to play and freemium games were in their infancy. The business model of video games has fundamentally changed, and it remains to be see how the industry will move forward and find ways to create new content and generate revenue (profit).”

Your thoughts?

My thoughts are that you should stop emailing me crap you see on the Internet. These people should make their own websites and see how many people listen.

The typical gamer is extremely retarded when it comes to the business side of gaming. Just this morning, a younger student in one of my classes was telling me how much ‘mad dough of money’ these video games were making. Often at a store, I pass by and look at the video game aisle just to see what is going on there (sorta like taking a stroll past the toy aisle), and I have had people decide to ‘spark a conversation’ by saying, “Boy, these game companies make so much money…” Video games is an extremely hard business especially for hardware makers.

Here is a good list of indicators that the person is talking out of their ass…

-Any mention of ‘casual gamer’.

-Any mention of ‘hardcore gamer’. (These are slang terms from gaming message forums. The people who play games the most are eight year old kids. But the gaming message forum doesn’t consider them ‘hardcore’, even though they play the most, since eight year old kids don’t post on gaming message forums. And the gamers who play the ‘least’ are the ‘hardcore’ gamers who buy tons of games and barely play any of them.)

-Not mentioning the macro-economic environment (which could be ‘growing’ leading to everything to grow or ‘declining’ trending everything to decline).

-Not mentioning PC gaming as a direct competitor to Microsoft/Sony consoles.

-Not pointing out that ‘tablets’ and ‘smartphones’ are taking away sales from PCs. Remember those ‘simple’ flash games and Facebook games on the PC? Tablets and smartphones took those gamers, not the Wii, DS gamers.

-Absolutely no mention of Nintendo’s software quality. (Nintendo’s software quality is assumed to be ‘constant’ and always ‘good’. But the quality is not constant and extremely poor software creates poor hardware sales.)

-Questioning everything Iwata says but always taking Miyamoto’s word as The Truth.

-Saying ‘disruption’ without quoting Christensen.

-Saying ‘Blue Ocean’ by only applying the analogy of blue/red ocean. That is not what the Blue Ocean Strategy is. Go read the book.

-Saying “The business model has changed…” without having a clue what a business model is. (A business model is not ‘DLC’ or ‘addons’ or whatever shit you think it is. That’s like saying a fast food place making you pay for ketchup packets or try to sell you extra fries is a business model. The actual business model is behind the counter with the workers making the food, the equipment needed to prepare the food, the logistics of trucks coming in and out with the supplies, the waste disposal, the marketing, and so on. The business model of a fast food place has more to do with real estate than with a fucking hamburger.)

-Not citing any history within the past generations of game consoles. (Nothing is new under the sun. You can track the Wii phenomenon with the Atari 2600 or NES phenomenons. Most of the piece of shit gamers that blab like retards on their message forums or gargle like morons on their microphones are so young and so arrogant that they believe history began the day they were born.)

I can go on and on. But there is one big one I want to add:

-Assuming Nintendo’s intentions are commerce dominated.

People are saying that Nintendo wanted the Wii and DS customers to continue with the Wii U and 3DS. Since they didn’t, obviously something is amiss. Obviously, it must be a fad. But is there anything to say that Nintendo wanted the Wii and DS customers to return? If that is true, why go 3d on a fracking handheld? Why adopt a controller MORE CONVOLUTED THAN THE GAMECUBE if the intention was to keep the Wii and DS consumers? Why did Nintendo say that they didn’t want games that attracted those ‘expanded audience’ consumers because third parties don’t want to make games for those people? (This was said at an Iwata Q and A with investors.) The entire Game Industry had a cow over the expanded audience. You had programmers who would refuse to work if the company assigned them to make a Wii game. If the distaste over the expanded audience is so prevalent in the Game Industry, why would it not also exist within Nintendo as well? Note how Nintendo has broken up Wii Sports and made them download only games. They don’t fucking care about Wii Sports fans. Imagine if Nintendo treated the Super Mario Brothers fanbase with breaking up Super Mario Worlds and having you download each one over the Internet.

I assumed for a long time that Nintendo wanted to make games as awesome as the classic Mario, Zelda, and Metroid. But we know, for sure, that Nintendo actively dislikes those classic games. Aonuma is on record for hating on classic Zelda and thinking the games were terrible. Miyamoto is on record for bashing Super Mario Brothers 3. And we know Sakamoto really doesn’t like Metroid with his Metroid: Other M. I then thought that maybe they thought the classic games’ success were their characters and universes. But now I am more experienced with Nintendo. I realize when you wipe the BS away, Nintendo developers just want to do whatever they fuck they want to and resent fans because fans are an obstacle to them doing whatever the fuck they want to do. They view fans as holding them back, as a cage. Of course, Nintendo could make NEW IPs and do whatever the heck they want with those, but we don’t get those. We just get an EA Sports type iteration of the same game we played last time with the ‘new hardware feature’ being the ‘reason to buy it’.



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