Tuesday, April 16, 2013

Oil (your e-mail)

Jason Cox sent this in, and it needs no introduction:

There is something this nearly former gamer wishes he could say to the videogame industry in regards to your post on oil.
This well is tapped.
I used to spend easily $3,000 to $6,000 a year on various videogames, systems, peripherals, etc. I routinely spent a considerable portion of my annual income on videogame related purchases. Even though my income has increased if you looked at my purchases over the last year I would be surprised if it broke the $1,000 mark, including DLC purchases. If you only look at brand new "AAA" games, somewhere less than $300 if I was hedging.
I predicted that all the major studios going for a "AAA" only strategy was like playing a four way game of chicken. Everyone is going to lose. As a consumer, all I have been offered is a series of rehashes that have no interest to me. For example, I see no difference between the various Call of Duty games, so I stopped buying them. Why bother? What do I get for my money? I know they only care about the multiplayer community, but at some point that well will dry up to.
The real point that concerns me for the future of the industry though is that I don't think the next generation is going for this strategy either. When I was a kid I saved up every birthday and Christmas to get the games I wanted. I mowed lawns or did whatever I had to do over the summer. My kids have no such interest. I let my teenage son play Call of Duty but when I told him he'd have to spend his birthday money to get the next version, he opted out. He was really interested in the franchise until he had to start paying for it. Same thing with Halo 4. If someone hadn't bought it as a birthday present we wouldn't own it, though my impression of it was "More of the same" despite the rave reviews.
How many kids are really that invested in these popular games? I'm a gamer dad so my kids often reaped the rewards of my hobby. As I've spent less they haven't felt the need to spend their disposable income on games either. My oldest doesn't care about the next XBox or Playstation, he'd much rather upgrade his smartphone or get a new tablet. I know this is anecdotal, but most of his friends are the same way. When these kids hit the point where their videogame habit is not subsidized by their parents will they still pay $60 for a new game? I just don't see it.
I firmly believe we will always play games. We like to be distracted and entertained, so I don't think the industry is "dying". What I do see is the inevitable fall of Activision and anyone like them because the market they are trying to exploit appears much shallower than they seem to realize. 

Eli's friends are an interesting mix when it comes to video games. Some of them certainly play Call of Duty/Halo etc., but they seem to play a very limited selection of games. What's interesting, though, is that there really is no "gamer" culture per se--every kid I know plays games, whether it's on a PC or console or tablet or smartphone. It's 100% penetration, but it's split into multiple channels.

Ironic, isn't it? Instead of having 100% of a limited market, consoles now have a very limited percentage of a 100% market.

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