I'm starting to suspect that MS agrees with you - and that it is prepared to bet this particular farm on a US-only strategy. Certainly, it couldn't possibly do more than it is doing right now to alienate Europe and Asia. I wouldn't be surprised if some of the things it's planning for its European launch resulted in the Powers That Be in the EU taking an unfriendly interest (in terms of trade barriers). There are probably get-arounds on that and MS might avoid official sanction, but it's still proving terrible in reputation terms. The whole Witcher 3/Poland issue has got more media coverage than you might expect in Europe.
The question is whether, in a world of escalating development costs, a single-territory strategy is ever going to be viable (even when that territory is the US). Those Japanese developers who have gone for a domestic-first route over the last generation have sacrificed much of their ability to get back into the international arena. A US-only XBone would probably become a gaming backwater in fairly short order, in a world where it was competing with an international PS4. And if it's a gaming backwater... will it ever sell well enough to realise MS's other aspirations for it?
The Xbone will do ok in the US. That's its home market, there's always a degree of "patriotic" buying (though not to the same extent as in Japan) and, like them or not, some of the 360's exclusive franchises still have a lot of market power. There are people who will buy an Xbone for Halo. The overlap between those people and "people who read slashdot" is probably quite small.
Will the Xbone do as well in the US as the 360 has (where the sales data shows it's the dominant console)? Probably not, at least on the basis of what we've seen so far. Sony's given the "floating voters" with no strong attachment to either camp a lot of reasons to go in the PS4 direction this time. But the Xbox series has a lot of loyal fans in the US and most of them will still be hanging on.
The danger for MS lies outside of the US. Ok, it's never managed to get the Xbox to succeed in Japan. So it's probably fair that it doesn't put too many resources into trying this time around (you'll never get away from the fact that the demographic profile of gamers looks very, very different in Japan and is much less interested in those games we consider "mainstream" in the West).
But Europe? Europe was in many ways the key swing battleground of the 360/PS3 generation and didn't really commit strongly to either camp. There's no "domestic" console, so no "patriotic buying" effect; in short, there's everything to play for. But MS seem to have decided not to play.
The TV offerings (which won't even be available in many territories to start with) aren't exactly tempting in Europe. I've had to sort out phone/tv/broadband packages in the UK, Belgium and the US in the last couple of years and can hand-on-heart say that you can get a decent TV package much more cheaply and easily in Europe these days. Sky or Virgin Media vs Comcast? It's not even close. MS is facing much tougher competition to take over from the existing TV providers.
The competition in Europe is, therefore, much more likely to be about being the better machine for games. Sony's messaging so far has been "games, games, games". I'm not really sure that Halo has more potency as a brand than Resistance, or that Gears of War is more potent than Killzone in Europe.
Then there are the emerging markets. The parts of the world that don't buy many consoles right now, but which might conceivably start to buy a lot more over the course of the next few years. These are also places where the 24-hour-dial-home restriction is likely to be a serious deterrent.
If MS doesn't do some urgent damage limitation, the Xbone runs a serious risk of ending up as a single-territory console.
The funny thing is... it even makes a Halo joke at an early point in the plot.
As in... Duke Nukem Forever (one of the worst fpses of recent years and a commercial and reputational disaster) takes the piss out of Halo (which, like it or not, is incredibly successful).
Thing is... it's made even worse by the extent to which DNF rips off all the *WORST* parts of Halo. All of those tropes and cliches that Halo introduced that gaming in general could really do without:
- 2-weapon limits (say goodbye to tactical flexibility and hello to "the game's just given me a rocket launcher, guess I have to fight a tank next");
- regenerating health (goodbye tension); and
- hateful protagonist - the old Duke was kind of funny in a horrible way, the new one is just a trash-talking dudebro (much like the Master Chief).
At the same time, it omits the decent stuff from Halo - like the responsive controls (on a console) and the fairly open level design.
See, if they'd wanted to spoof Halo, they should have had the first level put only 2 weapons available. Then you get out of it... and a third weapon is ahead of you. A prompt pops up inviting you to swap one of your existing weapons for the new one. Except when you do so, Duke makes his Halo joke - and picks up a third weapon without dropping one of the ones he already had.
That would have been a proper dig at the hateful conventions introduce by Halo. As it is, it just felt pathetic.
Microsoft: Surprisingly good on the games front, with Forza looking fairly neat and a good number of titles to announce. Elsewhere it felt like damage limitation. They'd realised by now that people hate the call-home and used-game restrictions and were desperately trying to show that it wasn't as bad as people had assumed. Might have been more convincing if it felt like they even understood it themselves.
Sony: Actually, a surprisingly glitchy presentation in many ways. Some of the game demonstrations were pretty poor and unpolished. However, none of that matters. They picked the wrong music for the section of their presentation that talked about the PS4 itself; they should have gone with The Rains of Castamere. Sony's presentation was the Red Wedding with Microsoft as the Starks. And oh my word it worked. They've been trolling Microsoft into going down the anti-consumer route for more than a year, hinting that they were going to do the same. Yesterday, they sprang the trap. They clearly enjoyed their own presentation and, to be fair, they deserved to.
Nintendo: The weakest of the three. Their big announcement was... delays! Lots of delays. A very thin holiday season, supported by a 3d Mario Game that looks like a rushed, resolution upscaled DS game, a remake of a decade-old Zelda game and a Donkey Kong that nobody seemed to be particularly excited about. Things are a little better over on the 3DS front, but Nintendo were sending off a definite message that they're struggling to keep up.
And predictions based on that?
Sony probably have the Christmas season sewn up. Barring an RROD-level fiasco, they'll go into the first few weeks of sales with a massive stock of consumer enthusiasm. This is a very different Sony to the one that did the cack-handed launch of the PS3.
Microsoft need an urgent rethink. Their current strategy looks set to see them take a significant but nevertheless declining share of the US market (consumer loyalty being a significant factor), but completely abandon Asia and - more shockingly - probably get annihilated in Europe and the emerging markets as well. They've invested a shitload of money to get the marketshare they currently have in the home console market, so don't rule them out yet, but unless they revisit some of their fundamentals over the next 6 months, they could face disaster.
And I suspect Nintendo may already be starting to plan for a post-Wii-U world, where they focus on the handheld business going forward while they decide whether to have another throw of the dice in the home console market or go another direction. The speculation had been that Nintendo's big throw of the dice would be this Christmas, when they'd throw game releases and massive price cuts at the Wii-U to snatch the rug out from under the XB-One and the PS4. In theory they could still do the price cuts, but it's clear now that they don't have the games lineup in position to make that strategy work.
I'm really not sure that they're going to manage anything with this that's significantly better than the godawful Dungeons & Dragons movie we got back around the turn of the century. Is the Warcraft lore and universe really strong enough to support a movie?
They had a reasonable enough storyline that ran from Warcraft 3 through to Wrath of the Lich King, centred on Arthas, but even that felt a bit Anakin Skywalker-derivative (though happily no Gungans here). Beyond that, the universe is about as generic fantasy as you can get. The elves have pointy ears and like trees, the dwarves have Scottish accents and like beer. Whenever they've tried to strike away from the core Arthas plot, the results have been either tedious (Cataclysm) or silly (Pandaria).
Ah well, I suspect that given the normal development process, any movie will just end up as a thin pastiche with only a passing resemblance to the original IP anyway.
For the time being, it's being disguised by good results from other parts of the organisation, most notably their business-facing side and licensing profits from third party 360 game developers. While that's happening, the more bovine shareholders (which seems to be most of them) won't pay too much attention to those parts of the company where things are coming badly unstuck. They may have a few years yet before the consequences of this come back to bite them.
The shift to a Metro UI was one of the big late-cycle mistakes that MS made with the Xbox 360 as well. The second-generation 360 UI which they used through the middle years of the cycle was about as good as anybody's managed on a console. For the final few months of its life, it actually worked really well with Kinnect's voice and gesture commands (which, sadly, couldn't be said for any games).
By contrast, the third generation Metro UI was ugly, hard to browse with a controller and almost unusable with voice/gesture controls. It seemed to have been designed with just two purposes; maximising the percentage of the screen given over to adverts and serving as an early push for the whole "Metro" concept.
Metro's ok for a tablet. Not great, but I've seen worse. For anything else - desktop, notebook or games console - it's dreadful.
The whole thing has the stink of the kind of dumb idea that investor relations departments think up as something that can be pushed at less-than-intelligent shareholders. "Look, we may have missed the whole smartphones and tablets thing, but we've got a really great unified UI concept now that will let us take over the world! Honest!."
It would only take a couple of those big institutional shareholders to get a clue and start asking a few pointed questions about the consumer-focussed parts of Microsoft to make life very, very uncomfortable for the company's management.
But I can see no signs that's about to happen.
I'd say the consoles and games to keep an eye on for the longer term are, curiously, the ones from the current hardware generation. I'm not including the Wii here, which is a) not really current generation any more and b) easily to emulate using the excellent Dolphin.
The PS3 and 360, however... while it might take a long time, certain models of the hardware and certain games may have value in the longer run. The next generation is going to be a very stark break in terms of back-compatibility. Sony are talking about some kind of cloud-based software emulation for PS3 games on the PS4, but precedent would suggest first that this will involve paying again for games that you already bought once and second that it will probably only be available for a limited range of games. Microsoft have made it clear that they don't give a damn about back-compatibility.
And frankly, neither platform seems to be within years of having an emulator capable of running commercial titles. With both machines having slightly awkward architectures (the PS3 in particular), I wouldn't be surprised if it were many years until we saw such a thing - if indeed we ever do.
On that basis, I have a bit of a niggling worry that current-gen console games could become a bit of a "lost generation" in terms of preservation for the future, as existing hardware either fails or just gets thrown in the trash as the next gen hits. Sony's cloud plans probably mean that major commercially-successful PS3 titles will remain available for the immediate future. And towards the end of this cycle, the PC market became important enough that almost everything was ported to that. But other than that? Might be worth holding onto some of those more niche games (at least the high quality ones) for both consoles; the likes of Valkyria Chronicles, Demon's Souls, the Forza series and so on.
Plus if emulation never does happen, there'll still be a need for original hardware to run those games. I used to think that the first-gen PS3s, with their full hardware PS2/PS2 back-compatibility) would be the ones to hang onto, but the fact that almost all PS2 titles can now be run emulated on a PC might detract from that. On the other hand, if you have a non-firmware-updated early PS3 that can still be used for a Linux install, that might have some novelty value down the line.
And then there's the Wii-U, which really does seem to be flatlining, with monthly sales now down into the tens of thousands. If the console does go on to be an epic flop (which we'll probably know for certain after Christmas 2013), then on the current trend it looks set to have substantial rarity value going forward if you keep it in good condition, with the potential for a lower number of units shipped than the Dreamcast.
The "PC gaming is dying" story is a cyclical thing. Nobody was saying that at the end of the SNES/Genesis generation, because as the search for a credible successor to those took ages and ages, PC gaming actually started to seriously eclipse the consoles. If Sony hadn't come out with the Playstation, who knows what would have happened.
Following that, however, we had two fairly rapid console cycles (PS1/N64 and PS2/Xbox/Gamecube), both of which ended while their consoles still had significant life left in them. This left the PC less time than normal to really flex its muscles at the head of the market. This time around, with the longest console cycle ever, the PC has had a long time to build up a big lead.
If the PS4 and XboxOne take off, then we'll get another round of "PC gaming is dying" stories - which will be no more true than they were in earlier generations.
Yes, EA is making so much money that it has lost 2/3rds of its share value since 2007 and recently got rid of its CEO because it was just doing so very, very well.
Like others in this thread, you're confusing revenue with profits. EA brings a lot of money in - just over Â£1bn per year. But it spends a lot of money as well. Even if it's not making an outright loss (and it has posted some stinking losses in recent years, 2009 in particular), its recent performance is not at a level that is giving the markets much confidence.
Problem is, the thin profits in the industry are part of what's driving the focus on churning out games in a narrower range of genres. New IPs are notably risky - yes, you may make the new Portal, but you're much more likely to just make a big commercial failure (even if it gets a good critical reception). Sad to say, pretty much every interesting new IP in recent years that's aimed for mainstream success has been funded by the profits from a big Call of Duty style franchise.
We may hate Call of Duty and everything that goes with it, but without games like it, it's unlikely any "risky" games at all would be developed at anything above the "90s quality graphics" indie level.
It's a bit like the national lottery we have here in the UK. It's often disparagingly referred to as a "tax on the stupid" - a statement with a good degree of truth behind it. But a lot of the income from it is parceled out into arts funding without which an awful lot of "highbrow" artistic performances and presentations just wouldn't happen.
Indeed - artists and sound-people don't come cheap, particularly if you want something that's going to stand out from the run of the mill. The core programming team isn't really that large a portion of the staff costs; not least because in the video-games industry, you can generally get away with paying your coders peanuts and treating them like monkeys.
You're confusing revenues with profits. You can in theory have a game that sells 3 million games in the US and Europe (and 0 in Japan) but which took 2.8 million to break even because of its production costs. Then you can have a game which sells 400,000 in Japan (and none in the rest of the world), but only needed 200,000 sales to break even. On a simple calculation, they've made the same profit. In fact, because Japanese game prices do tend to be significantly higher, the Japanese game has probably made more of a profit.
This is why so many Japanese developers are either churning out crap like the Hyperdimension Neptunia series (pitched at a small but very loyal domestic otaku fanbase in Japan, and if it gets a few worldwide sales then that's a bonus) or mobile phone games that never make it outside of Japan (pitched at the salaryman demographic whose only gaming time is on his train commute). They know where the profit is. By contrast, trying to make something that's competitive, in terms of both technology and design, with what's going on in the West is risky and, for the smaller developers, impossible to finance anyway.
That's the theory. Indeed, since Nintendo abandoned the "hardware at significant profit" philosophy as a form of emergency resuscitation for the 3DS (and hasn't gone back to it for the Wii-U) it's been the only theory in town as far as console developers go. Of course, most consoles achieve per-unit profitability after the first year or two (I got sick to death of being told that every PS2 was sold at a loss years after this ceased to be the case), but the general gist of it is that the hardware is a loss-leader and licensing is where the cash comes from. As manufacturer, other people invest to make games for your system and you cream off part of the revenue from every copy they sell.
Unfortunately, even that model (which did very nicely for Sony through many of the PS2 years - look at the chart in TFA) is coming unstuck a bit these days. Sony are flat, Nintendo's nominal profit or loss seems entirely dependent upon what the yen has done recently (but strip that out and they seem to be losing money right now in a way that's unprecedented in the company's history) and MS's gaming income is mostly from stuff that's very marginal to... well... gaming.
The whole console gaming industry in general is going through an odd round of self-cannibalism at the moment. There's just not enough money in the system. Console manufacturers are sinking (or have recently sunk) huge sums into R&D. At the same time, console game sales are actually falling quite sharply this year. They're caught between ultra-cheap (but mostly crap) mobile offerings and slightly-cheaper, more technically impressive PC releases of the same games (with even a basic home PC now easily able to outperform the consoles and the level of tech-savvy required lower than ever). Almost all of the big franchises which have released an installment this year - God of War, Gears of War, Dead Space etc - have seen a fall in sales on the consoles since the previous installments.
At the same time, development costs for games have risen and are rising still further. Early in this console cycle, the rule of thumb was that an "AAA" console game needed to sell 1 million copies to break even. That figure is closer to 3 million now.
Forget all the talk about corporate greed; barring the occasional mobile developer who gets (very) lucky, nobody in the gaming industry is raking in profits hand over fist at the moment. Stuff like online passes, day-one DLC and used-game controls aren't being implemented so that executives can have a bigger pile of gold to roll around on top of; they're fairly desperate survival strategies.
A significant portion of the Japanese games industry has already given up (or is in the process of giving up) the ghost and pulling out of any meaningful participation in the international market, in favour of their more forgiving (and heavily kids-and-otaku-driven) domestic market. There are a couple of developers that still try to be international players (Capcom, Sega, Sony and the publishing, but not the development arm of Square-Enix), but many others have now retreated into the handheld/mobile/moe-game comfort zone that's still profitable in Japan on the basis of low development costs. Even Nintendo seems to be hiving off from the rest of the world a bit; the 3DS's much-hyped reinvigoration is overwhelmingly driven by Japanese sales; it's still underwhelming in the rest of the world.
Western developers - and any console manufacturer who wants to be an international player - don't have that option. So manufacturers, game developers and retailers are all pretty much locked in a fight to the death with each other for the few shreds of profit left; with the irony being that they all need each other to survive.
I think game pricing is at the heart of the problem. Games are cheaper than they used to be - a lot cheaper. In the mid-1990s, a new PC game would be 45-50GBP, with console games being more expensive still in some cases. Today, a new PC game will be 30-35GBP and most console games launch at 40GBP but are discounted quickly. Factor in inflation and it gets even starker. Now, the industry could do that for a long time - despite a dramatic rise in development costs - because there were masses of new customers getting into gaming. It didn't matter that the profit per unit was falling fast, because they number of units sold was soaring.
However, at some point in the last 5 years, that growth in the gaming demographic slowed dramatically. In the developed world, at least, the low hanging fruit is gone. Anybody who might conceivably want to be a gamer is now a game. The days of ever-soaring sales are behind us; but development costs continue to escalate. So we get battles between developers and retailers, between developers and customers and between retailers and customers.
I suspect that fairly soon, the only option will be for something to give on pricing and for the price of at least some games to increase significantly. Nintendo has tried this with the Wii-U, where many games are retailing at 50GBP; unfortunately, it's not working for them (and is probably one of the reasons behind the Wii-U's poor sales performance). That said, that may well be because most Wii-U games at the moment are either crap or extremely short lived - and hence can't justify the price tag. Sony tried (and continues to try) differential pricing on the Vita, which has a much wider range of price-points than other console platforms for its games. Unfortunately, with the Vita seemingly dead in the water (I suspect the days of dedicated gaming handhelds are gone, outside of Japan), there's no meaningful data as to whether that works.
So yeah, not a great time to be in the industry; as manufacturer, games developer or retailer.