Video game retail sales are down 20% this year - with three months still to go. And that's on top of an 8% decline last year.
The culprit appears to be an alien force whose magical powers have bewitched legions of players and rendered them helpless: the mobile phone.
Incompatible systems, futurism versus history, monsters versus human skill. All could be overcome. But just as merchants, apps developers and investors have discovered in other realms, the flexibility, multi-functionality and, well, mobility of the mobile have destroyed the dreams of countless contenders for the earthlings' currency.
It hasn't helped, of course, that the demographic targeted most effectively by video game makers also happens to be the one suffering the most from the lingering effects of the recession. Young men, especially those of limited means and experience, simply do not have a lot of excess cash lying around these days. Nor do their parents.
But the larger challenge is the convenience of the anywhere/anytime hand-held versus being tethered to a screen, no matter how awesome the graphics or gruesome the bloodshed. Players appear to be adapting to the simpler, airier pastimes without too much angst or remorse. The makers are facing financial ruin and retailers, like Gamestop, once thought to be the next Home Depot, are now casting about for a second act.
It isn't clear how this story ends. Attention spans are limited, obsessions are cyclical. But unless some sort of adaptation (dare we call it mutation?) emerges, the gaming era is in danger of becoming a cult classic rather than a driver of future growth. JL
Chris Suellentrop and Stephen Totilo report in the New York Times:
NOT long ago the creators of video games were declaring their medium the art form of the 21st century. Games could aspire to the drama and spectacle of movies but would captivate society with their irresistible interactivity. More than 200 million Wii, Xbox 360 and PlayStation 3 systems were sold worldwide. Sales of portable gaming machines surged as well. Upward of 12 million subscribers were paying $15 a month to play the online game World of Warcraft, and competitors were plotting to develop worthy rivals. The motion-sensing Kinect system from Microsoft generated considerable buzz, with its promise of freeing players from having to push buttons and wave wands.
And yet the gaming world has found itself teetering at the edge of a financial cliff. In the first eight months of this year retail sales of video games plummeted 20 percent in the United States. That followed a lackluster performance in 2011, when sales fell 8 percent. An analysis on the Web site Gamasutra this year said it was possible that 2012 would be the worst year for retail video game software and hardware sales since 2005.
The struggling economy has certainly been a factor in the decline, especially considering that young men — long a core audience for games — were hit so hard during the recession. Another development will sound familiar to anyone who once had a groovy record collection: the democratizing, disrupting effect of less expensive digital downloads has changed the business model. Nearly everywhere, it seems, people have been sharing Words With Friends, slinging Angry Birds at pigs or springing their creatures through a precarious Doodle universe. All those games, made for smartphones, sure are popular, and the financial picture improves when their sales are included, but they can be had for pennies and seemingly become disposable almost as fast as they are released.
The video-game industry barely survived the brutal recession of the early 1980s: 29 years ago this fall Atari buried millions of unsold video games — believed to be mostly copies of Pac-Man and E.T. The Extra-Terrestrial — in a New Mexico landfill. Are video games facing another devastating crash? Have developers been putting out inferior work, or is something beyond their control going on? What should they do to adapt? The company credited with saving the industry last time was Nintendo, which finally plans to introduce its new Wii U, the successor to the 2006 Wii, next month. Can Nintendo lead the way again?
To try to get a handle on some of these issues, two video-game critics — Chris Suellentrop, deputy editor of Yahoo News, and Stephen Totilo, editor in chief of the gaming site Kotaku.com — recently discussed the challenges facing the industry.
STEPHEN TOTILO This has been a year of underachievement for many of gaming’s top achievers. How very 2012 it was for a game like Draw Something to capture the world’s attention in February; attract about 14 million players a day in April; seduce the FarmVille company Zynga to buy the game’s maker, Omgpop, for $180 million; and by the end of the month have its daily player base fall to 10 million daily. How very 2012 it was for the vaunted hit-maker Blizzard to release a game, Diablo III, that was 11 years in the making and then have to repeatedly apologize for its shortcomings. The Kinect might be selling Xboxes, but it isn’t helping sell that many games, because there are hardly any Kinect games that anyone talks about and very few that sell. It’s just a watered-down repeat of the Wii phenomenon.
This has been the year of sinking game company stocks, stagnating console sales, creative miscues from some of the medium’s best creators and a lack of many blockbuster games — from big companies. Note those last three words. It has been a very bad year for corporate video games. You know, gaming’s elite.
CHRIS SUELLENTROP Yes, it’s been a bad year for games that require the purchase of a physical disc with cover art and liner notes — I mean, an instruction booklet — an oddly retro aspect of the medium. And to take the baton you’re offering, yes, 2012 has been a remarkable year for downloadable titles, many of them created by independent developers working outside the traditional studio system. I wouldn’t call three of the year’s best games — the downloadable Journey, Fez and Papo & Yo — representative of gaming’s peasant class. Still, I don’t envision the next title from thatgamecompany, the developer behind the artful, downloadable PlayStation games Flower and Journey, making up for the industry’s 30 percent revenue decline.
Besides, do you really think that the quality of individual titles is the cause of this collapse? The nation is facing nothing less than a fiction crisis. Four of the five best-selling books last year on Amazon were works of nonfiction, and the fiction title, “Mill River Recluse,” was a Kindle download. The theatrical box office recently saw its worst weekend in 10 years. Narrative television — the quality of shows like “Breaking Bad” and “Mad Men” notwithstanding — is in decline. The most-watched shows are sports and reality spectacles. Anyone who has engaged in the make-believe required for most video games to work their magic knows that games are fiction too. Why would games be immune?
TOTILO Because video games aren’t all narrative fiction. Apologies to fans of the interactive storytelling pioneers of BioWare, the studio behind Mass Effect, and to those still searching for Bowser’s motivation for repeatedly kidnapping Princess Peach, but few people play video games for the story. Or for the acting. Or for many of the other cinematic aspects that can’t mask a bad game.
On the subway I ride daily the only video-game-related decline is the tilting down of heads so people can see the narrative-free games on their cellphones. These people could, of course, be reading books or watching movies. Many of them are not. They have an appetite for the interactivity of a game. They want to poke at a system and have it, or an opposing gamer, respond. They want to play.
SUELLENTROP More important, the nation is facing a more tangible crisis, one that has been particularly punishing to young men. Ours is an absurdly expensive pastime. You need an HD TV, a console (often with some peripherals) and an Internet connection before you spend a single dollar on software or subscription fees for services from Xbox and PlayStation. Forget the jokes about twentysomething slackers playing Call of Duty in their parents’ basements. The real elites are the people who can afford a dozen new games every year.
TOTILO Yes, gaming is an expensive hobby. It’s more opera than it is, say, radio. But you have your finger on the scales if you’re counting the cost of an HD TV as a tax on enjoying video games. We might as well count the electric bill and the years of schooling that enabled us to read said bill.
SUELLENTROP Well, you can see a movie in a theater for $12 (though, yes, the cost for a family of five approaches that of a video game) without any upfront costs. You can enjoy a new book for less than $30 without any additional equipment.
TOTILO Gaming is actually becoming a less costly hobby. This was the year that the monthly $15 subscription for major online games became nearly obsolete. In its place we’re seeing more so-called free-to-play games. These cost nothing to start playing, but you can pay a buck or two here or there for perks or to advance more quickly.
This is the model that allows Zynga to retain several million daily players for its games, far more than most modern $60 games attract, even while it is supposedly slumping. This is the model behind games that rocket up the iTunes charts. This is the model that turned Star Wars: The Old Republic, a mightily expensive endeavor published by the industry giant Electronic Arts, from a subscription game to a free-to-play game in just 10 or so months.
Still, when every experience in a game is something a creator can nickel and dime you for, you’re in for something very different. We’re not talking about the equivalent of paying for the next chapter of a book; it’s more like paying a few bucks extra for the adjectives, unless you want to wait a long time for them to “unlock.” Surely no self-respecting reader would stand for this. Why should gamers?
SUELLENTROP New business models will certainly affect how games are made. But are the failings of the industry’s current one relevant to the medium’s artistic merits? Nearly everyone who talks about video games — reporters, critics, creators, players — places too much emphasis on money as the foremost measurement of success. As the independent game designer Chris Hecker put it in a lecture three years ago, “You get the impression that the game industry wouldn’t care if some prince in Dubai bought a single copy of a game that costs $24 billion — Call of Madden Duty Halo — as long as we’re the ones he’s buying it from.”
Cultural impact is about more than sales. The industry has had plenty of blockbusters, but it’s still looking for what Art Spiegelman did with “Maus” — bring broad respect to the medium that winning the Pulitzer Prize did for the graphic novel.
And while it’s true that the $60 plastic-disc model is on its deathbed, new ways to pay for game development seem to arise every week. The downloadable episodic series The Walking Dead from Telltale Games — much better than the TV show, by the way — is demonstrating that you can unveil something in parts and get people to pay $5 for two- or three-hour increments of a game that once might have been released in one fell swoop. Or you can crowd-source your venture capital on Kickstarter. The Internet is doing to video games what it does to every industry: disrupting the old models, creating new ones and lowering the barriers to entry.
TOTILO When gaming collapsed in the early ’80s, Nintendo was the savior by reviving the concept of the home game console and unleashing the creative genius behind classics like Super Mario Bros. It came through again with the intuitive, inviting Wii. The company’s next console, the Wii U, will be the first new console on the market in six years. The wait for a new machine has been absurdly long, and that has surely cost corporate gaming some buzz.
While the Wii U is promising — the basic concept is that of a powerful TV game console that displays additional graphics on a six-inch screen embedded in your controller — we won’t even see the next Xbox or PlayStation until a year from now, at the earliest. Upstarts like the hackable, crowd-financed console Ouya or the head-mounted display called the Oculus Rift are interesting. But the game lover in me is almost as uncomfortable with the hype for hardware as I am with the obsession with finances. We can only weep for corporations so much. Big companies no longer dominate the creation of video games. Freethinking, independent creators are on the rise, and they’re making some fascinating games.
The play’s the thing. All else is second.
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