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Retail

Next-gen systems drive US game retail in June - NPD

Next-gen systems drive US game retail in June - NPD

Thu 17 Jul 2014 10:30pm GMT / 6:30pm EDT / 3:30pm PDT
RetailGamesHardware

Hardware rocketed up 106 percent year-over-year while Watch Dogs and Mario Kart 8 continued to shine [UPDATE: MK8 sells 885,000]

Following a big jump in US video game retail sales in May, The NPD Group has just shared its report for June, and much like the previous month, sales were up thanks to continued hardware success and two big games: Watch Dogs and Mario Kart 8. Total industry revenues jumped 24 percent to $736.4 million while hardware climbed an incredible 106 percent to $292.7 million.

“The 106 percent increase in hardware sales (vs. June 2013) was lifted entirely by console hardware sales, which were up by over 200 percent. The strong sales performance of console hardware helped to offset the declines seen in portable hardware,” said NPD analyst Liam Callahan.

“Combined sales of Xbox One and PS4 are over 80 percent higher than the combined totals for Xbox 360 and PS3 - an indication of the strength of the start of this new console generation.”

Software, meanwhile, dipped three percent to $286.8 million, and accessories were essentially flat at $156.9 million.

“While unit sales of launch titles in June'14 declined 67 percent when compared to June'13 launch title sales, there was a 47 percent increase in unit sales for games that launched across the second quarter of 2014 (April - June) when compared to the same time period in 2013.”

“Sales of launch titles in June 2014 did not compare favorably to those launched in June 2013, which included the PS3 exclusive The Last of Us, along with Nintendo's Animal Crossing: New Leaf, and a retail version of Minecraft for the Xbox 360.”

Watch Dogs - which has shipped over 8 million units worldwide - was the clear winner on the software side, once again topping the charts. But considering that Mario Kart 8 is only available for one platform, it's notable that Nintendo's racer managed second place for the second consecutive month. The complete top 10 is below.

Update: In separate press releases, Nintendo noted that Mario Kart 8 sold over 885,000 copies in the US during its first five weeks, and Sony said that PlayStation 4 was number one in sales for the sixth consecutive month and remains the cumulative leader for next-gen platforms.

1

28 Comments

Christian Keichel
Journalist

575 788 1.4
hardware climbed an incredible 106 percent to $292.7 million
Software, meanwhile, dipped three percent to $286.8 million, and accessories were essentially flat at $156.9 million.
Another month, were the industry is high on the drug of subsidized hardware, for comparsion
US Software retail sales in millions as reported by the NPD:
June 2008 $872.6
June 2009 $625
June 2010 $531.3
June 2011 $469.5
June 2012 $328.7
June 2013 $313.8
June 2014 $286.8
Software retail sales are now a third of what they were in 2008, no way digital downloads can make this up.

Edited 2 times. Last edit by Christian Keichel on 18th July 2014 10:13am

Posted:13 days ago

#1

Mats Holm
Technical Process Analyst

53 38 0.7
No way? PC has gone all digital, and I cannot say I have picked up a disk for my Xbox One yet, but I still have a bunch of games for it. So, I am 100% digital at this point. While I might not be in the majority here I would expect that at least 40-50% of all money going into software comes in form of digital. So we might be above 2010 numbers already.

Posted:13 days ago

#2

Christian Keichel
Journalist

575 788 1.4
PC wasn't included in 2010's numbers and to get an impression of the performance of PC games, Watch Dogs sold 12% of it's units on the PC and 88% on consoles.

Posted:13 days ago

#3

Mats Holm
Technical Process Analyst

53 38 0.7
So, I don't recall seeing Ubisoft giving away their split on sales, but we are still talking 4 consoles SKUs, 1 PC SKU. You also disregard that there has been a shift in the market since 2010, where PC gaming has increesed in size. This has swallowed console markedshare, but is not showing on NPD, because as you explained, NPD does not track PC. Also, I suspect that digital sales on consoles for next gen is far higher than it was on last gen.

Posted:13 days ago

#4

Christian Keichel
Journalist

575 788 1.4
@ Mats

The numbers leaked out of their latest Investor's meeting and what should it mean, that it's 1 SKU vs. 4 SKUs, when it comes to overall sales of a platform, all it shows, that the PC is the smallest of the 5 platforms. You are wrong, NPD tracks the PC, the numbers weren't included in 2010, but they are included in 2014's numbers. The numbers Ubisoft gave out in their investors meeting where digital+retail.
But it's not Watch Dogs alone, Ubisoft reported that the PC had a share of 14% of their overall sales in the last quarter.
The PC is a niche platform, when it comes to AAA gaming.

Digital sales on consoles are for sure higher in 2014, then they were in 2008, but to say it again, retail sales are now a third of what they were in 2008. Just look at EA's latest earnings release and you will see, that EA's retail revenues are still much higher then the digital revenues and we can say for sure, EA is pushing digital distribution very hard. Other companies have a much smaller digital share. Activision/Blizzard just reported a digital share of 25%, and with Blizzard they are heavy weights in the digital business, but in the end it's hard to sell people digital Skylanders Figurines and that's where the money is.
Last but not least, PC gaming has increased in size, but only, because it increased in China, in the US and Europe, it's declining for years now.

Edited 7 times. Last edit by Christian Keichel on 19th July 2014 12:25am

Posted:13 days ago

#5

Morville O'Driscoll
Games Blogger & Journalist

1,491 1,257 0.8
@ Christian

Whilst it's not wholly to blame for less sales on PC, bear in mind that digital retail on PC is very fractured. You say
EA is pushing digital distribution very hard.
Yet their latest releases aren't on Steam. Certainly, there's a lot of people who are store-agnostic, so they'll buy from Origin, but the push Steam gives is considerable. Equally
Activision/Blizzard just reported a digital share of 25%,
There's no Call of Duty games on Origin, and no WoW/D3 on Steam or Origin.
But it's not Watch Dogs alone, Ubisoft reported that the PC had a share of 14% of their overall sales in the last quarter.
The PC is a niche platform, when it comes to AAA gaming.
To rephrase that - and still be factually accurate - Ubi had as many sales on PC as the 360, and only 3% less sales than PS3, during that period. Can we argue that the 360/PS3 are now niche? :)

And an honest question: Are EA and Valve sharing their (Origin and Steam) sales data with NPD? Last I heard they weren't, but that was a few months ago.

Edit to add:

Entirely anecdotal, but all my PC purchases are through either Steam or Kickstarter, so if NPD doesn't have accurate data for either of those, then I (and people like me) essentially don't exist.

Edited 2 times. Last edit by Morville O'Driscoll on 19th July 2014 9:41am

Posted:12 days ago

#6

Christian Keichel
Journalist

575 788 1.4
To rephrase that - and still be factually accurate - Ubi had as many sales on PC as the 360, and only 3% less sales than PS3, during that period. Can we argue that the 360/PS3 are now niche? :)
You mean they sell for the PC as much games as for an 9 year old console, that already has a successor on the market and much lesser games then for an 8 year old console that also has a successor on the market? Good Job ;)
And an honest question: Are EA and Valve sharing their (Origin and Steam) sales data with NPD? Last I heard they weren't, but that was a few months ago.
Nope Steam and Origin sales aren't included as far as I know, but just for fun, add 14% to the 286 million in revenues (which would be nonsense, as many PC games are still sold through retail), the numbers would still be terrible. And just because CoD isn't on Steam and Origin, it doesn't mean Activision/Blizzard is meaningless in the digital PC space, because WoW and Diablo 3 are for sure the most successful PC games nowadays.

Posted:12 days ago

#7

Morville O'Driscoll
Games Blogger & Journalist

1,491 1,257 0.8
You mean they sell for the PC as much games as for an 9 year old console, that already has a successor on the market and much lesser games then for an 8 year old console that also has a successor on the market? Good Job ;)
Snark snark. :p

My point was that those Ubi figures don't say as much about PC sales as you initially implied. How many PS3s and 360s are still out there, having new games bought for them?
And just because CoD isn't on Steam and Origin, it doesn't mean Activision/Blizzard is meaningless in the digital PC space, because WoW and Diablo 3 are for sure the most successful PC games nowadays.
Again, slightly missed my point. :) Yes, WoW and D3 are a couple of the most successful PS games. But I wasn't saying that Acti/Blizz were meaningless, I was saying that, if all games were sold on all store-fronts, the digital impact on publishers would be far larger than it currently is. And far larger than you give credit for, I think. As an example, the lack of Titanfall on Steam could be seen to be a reason for its relative failure on PC (a multiplayer FPS that isn't Battlefield? No Steam is almost a death-knell).

In any event, this is almost an argument of opinion. :) Without firm digital sales figures, we try and argue our points. For instance, I know you've said in the past that a lot of PC titles are still sold in retail in mainland Europe, but in the UK the choice is the occasional indie shop, a single shelf in Game, and Amazon. Which means Steam's impact in the UK is larger than Europe, and thus PC digital is bigger here. (Okay, "opinion" isn't quite the right word. More... it's not as black-and-white as we both might make it out to be. :) )

Sad that something that should be an industry-standard - open and honest independently verified digital sales figures - aren't here yet. :(

Posted:12 days ago

#8

Christian Keichel
Journalist

575 788 1.4
Sad that something that should be an industry-standard - open and honest independently verified digital sales figures - aren't here yet. :(
Here we agree, but as NPD numbers became more obscured over the years, I don't think we will see digital numbers in the future.
(Okay, "opinion" isn't quite the right word. More... it's not as black-and-white as we both might make it out to be. :) )
Completely agree, I think the PC as a gaming platform for AAA titles is dead, you think otherwise, only time will tell who of us was right.

Posted:11 days ago

#9

Curt Sampson
Sofware Developer

595 356 0.6
Christian Keichel writes,
You mean they sell for the PC as much games as for an 9 year old console, that already has a successor on the market and much lesser games then for an 8 year old console that also has a successor on the market?
You have just claimed that "3% less" is "much lesser." Is this sort of misrepresentation really what you want people to see from someone who labels himself a "journalist"?

It's also disingenuous to imply that because the Xbox 360 and PS3 are nearing a decade old and both now have successors, you would expect them to have low sales. Each has about ten times the installed base of its replacement, at the moment; even with the boost any AAA game will get on the new consoles due to the dearth of titles, it would be at least unusual for ten people to be buying a game on a new console for every one that buys it on the old.

Your figure that PC sales are 14% of Ubisoft's overall sales probably provides the most reasonable indicator that I've seen in this thread of the PC platform's health as compared to other platforms. Ignoring Wii U for the sake of simplicity, that would put it at 65% of the average sales of the other four platforms. That figure alone certainly doesn't put it in to the "niche" category.

There's some further analysis to be done here, though. For example, you don't say whether this 14% figure indicates the fraction of unit sales or fraction of revenue. It's clear that games on PC, especially as they get in to the "long tail" part of their lives, have sale prices that are lower--often considerably lower--than the sale prices available for the console versions of titles. If your figure is for revenue, it could easily be the case that more units of the title are shipped for the PC but making less revenue due to the lower price. Nor might this be unhealthy; lower revenue does not necessarily equate to lower profits since the PC not only has lower media costs (due to the higher prevalence of digital distribution) but also has no platform license fee, which can be significant.

By ignoring or dismissing these nuances, you come across as someone who has an axe to grind, rather than someone making a case that PC is a marginal platform because that's where the facts lead. This is particularly sad coming from someone who puts "Journalist" after his name on these posts.

Posted:10 days ago

#10

Christian Keichel
Journalist

575 788 1.4
You have just claimed that "3% less" is "much lesser." Is this sort of misrepresentation really what you want people to see from someone who labels himself a "journalist"?
The share of the PC is 14% and the share of the PS3 is 17%, this means in direct comparsion, the PC is selling about 18% less units then the PS3, I would say this is "much" lesser, for a game like Watch Dogs which sold 8 million units, it means, it would sell 1.36 million units on the PS3 and 1.12 million units on the PC. Yes, I think this is "much lesser".
It's also disingenuous to imply that because the Xbox 360 and PS3 are nearing a decade old and both now have successors, you would expect them to have low sales. Each has about ten times the installed base of its replacement, at the moment; even with the boost any AAA game will get on the new consoles due to the dearth of titles, it would be at least unusual for ten people to be buying a game on a new console for every one that buys it on the old.
It seems, you didn't bothered to check the source I provided. In the past 3 months 53% of Ubisofts sales were on the PS4 (36%) and the XBox One (17%), so your argument doesn't make any sense.
There's some further analysis to be done here, though. For example, you don't say whether this 14% figure indicates the fraction of unit sales or fraction of revenue.
Again, have you at least checked the link I gave for my source? Ubisofts report say sales. Give me a better, more informative source and I will be happy to use it. But in the meantime, console games drop in prices just as PC games nowadays. Right now the PC version of Call of Duty Ghosts can be bought for $19.78 at Amazon and the XBox One version for $20.99. And with Sony and Microsoft doing sales themselves, there is no difference in prices anymore. Last but not least, of course the PC has a platform fee, or do you think Steam distributes the games for free?

Edited 2 times. Last edit by Christian Keichel on 21st July 2014 8:48am

Posted:10 days ago

#11

Klaus Preisinger
Freelance Writing

1,034 912 0.9
@Christian

I would not count Steam towards a platform fee. It is a retail fee. Console games also have to deal with retailers taking a cut.

Posted:10 days ago

#12

Christian Keichel
Journalist

575 788 1.4
@ Klaus

Retail games on the PC also have a retail fee and games on PSN, XBox Live or the eShop don't come with a retail fee. It's no difference at all. Right now (almost) every new console game that can be bought in retail can also be bought digital, just like (almost) every PC game that can be bought in retail can be bought digital. The situation is exactly the same.
On consoles Sony/MS/Nintendo get their share for every retail/digital sale and on the PC Steam gets his share for every retail/digital sale that has to be activated on Steam, which is an overwhelming majority of games.
Right now, no major publisher has gone digital only on the PC: Activision, Square Enix, EA, Ubisoft, Codemasters and everybody else release games they release physical on consoles also physical an the PC. If nobody would buy physical games on the PC like some people suggest, companies wouldn't release discs any more.

Edited 5 times. Last edit by Christian Keichel on 21st July 2014 9:01am

Posted:10 days ago

#13

Klaus Preisinger
Freelance Writing

1,034 912 0.9
Console Game:
Price customers pay -> deduct tax -> deduct retailer cut (various levels) -> deduct platform holder licensing fee -> deduct payment processing -> get money.

PC game:
Price customers pay -> deduct tax -> deduct retailer cut (various levels) -> deduct payment processing -> get money.


Does not matter whether the retailer is physical or online. He will get the cut for being a retailer. If it so happens that Microsoft and Sony can cash in twice, once for the licence and once for providing an online store then tough luck; that's why they are in this game. Negotiate harder, if you can. Which is why I point out that there is no platform fee on the PC. You do not license for the right to release a game on Windows or Linux. It is one person less to pay. if Amazon or some retailer decide to shovel something out the door, they take the shovel and get it over with. Publisher don't care, they got paid the day they sent the stuff to Amazon. It is no indication towards comparing the percentage which a full price purchase will generate for the publisher.

Edited 1 times. Last edit by Klaus Preisinger on 21st July 2014 9:43am

Posted:10 days ago

#14

Christian Keichel
Journalist

575 788 1.4
I see your point, but to say it's one person less to pay is wrong, because for physical media, you have to pay the retailer and you have to pay Steam. Even if Amazon clears it's stock, the fee the publisher has to pay to Steam for the activation of the game stays the same, regardless of the price Amazon sells the game for.

Edited 1 times. Last edit by Christian Keichel on 21st July 2014 10:34am

Posted:10 days ago

#15

Morville O'Driscoll
Games Blogger & Journalist

1,491 1,257 0.8
Even if Amazon clears it's stock, the fee the publisher has to pay to Steam for the activation of the game stays the same, regardless of the price Amazon sells the game for.
Publishers don't pay for activation of Steam games.
It’s free: There’s no charge for bandwidth, updating, or activation of copies at retail or from third-party digital distributors.
( http://www.steampowered.com/steamworks/ )

Edited 1 times. Last edit by Morville O'Driscoll on 21st July 2014 10:55am

Posted:10 days ago

#16

Christian Keichel
Journalist

575 788 1.4
You are right, I wasn't aware of this, then Klaus is completely right, it's one person less to pay.

Posted:10 days ago

#17

Curt Sampson
Sofware Developer

595 356 0.6
@Christian Keichel,

You're right; I should have read your source thoroughly before posting; it even further debunks your post.

For Q1 2014/15 it's true that sales for PC are about 18% lower than sales for PS3. I don't accept your argument about that being "much lesser," but even leaving that aside, by extension the Xbox 360, also at 14%, also has "much lesser" sales than the PS3* and is thus a "niche market," as you describe it. That's clearly absurd.

(*The above paragraph had "PC" as a typo for "PS3"; this has been corrected.)

But it gets even better: you're looking at one quarter and utterly ignoring other quarters, such as Q1 2013/14, where PC sales were actually higher than the PS3. When PS3 sales are 8% lower than PC sales does that make the PS3 a "niche market"? It's perfectly possible that these are simply reasonable variations that happen depending on what games happen to be available at the time, their popularity amongst certain types of gamers, and how good the ports are.

Further, having read the source, it appears that the sales splits are based on revenue, rather than unit sales. (They don't say explicitly for the tables, but all other references to "sales" in that document refer to revenue.) Thus, it is indeed quite possible that more copies of games are being sold on PC than on PS3, and it's simply the lower prices of PC games that's making the difference. (This could also well be the reason for swings in PC revenue above and below PS3 revenue depending on where various games are in their sales cycles; the PC and PS3 pricing generally start out around the same, and it's only after a few months that the PC prices start to dip well below the PS3 prices.)

Having now looked at your sources, it's clear that the that the PC is in no way, shape or form a niche market, at least for Ubisoft, and it's not even clear that it's consistently below the PS3. (It is clear, however, that for the two three-month periods for which your source has figures, the PC is doing just as well as the Xbox 360.)

You are omitting important information and presenting a heavily biased and clearly incorrect picture of the situation. This is unethical journalism on your part.

Edited 1 times. Last edit by Curt Sampson on 23rd July 2014 6:35am

Posted:9 days ago

#18

Christian Keichel
Journalist

575 788 1.4
by extension the Xbox 360, also at 14%, also has "much lesser" sales than the PC
What you say - again - doesn't make any sense. The PC and the 360 are equal from Ubi's perspective, the 360 isn't selling "lesser" copies then the PC. The reason why the 360 also is becoming niche is, that the console never sold well outside the US (with the sole exception of UK), the machine is in fact niche, when it comes to Europe and non-existent, when it comes to Japan. And this machine is now in heavy decline in it's home market, so yes on a worldwide scale (the one Ubisoft is looking at, because a healthy 50% of their sales are outside the US), the 360 is also niche.
But it gets even better: you're looking at one quarter and utterly ignoring other quarters, such as Q1 2013/14, where PC sales were actually higher than the PS3. When PS3 sales are 8% lower than PC sales does that make the PS3 a "niche market"? It's perfectly possible that these are simply reasonable variations that happen depending on what games happen to be available at the time, their popularity amongst certain types of gamers, and how good the ports are.
As you can see here and here the better performance of the PC in a single quarter isn't of much interest for the whole year, for the full year 2013-2014 Ubisoft reported 15% PC sales. This is, because you didn't took into account, about what quarter we are talking here, Q1 of fiscal year 2013-2014 was April-May 2013 a time, when Ubi didn't release much games, when the share of the PC is higher in this quarter, then in the previous quarters, it's completely eaten up in the quarters 2,3 and 4, at least, this is what happened
Thus, it is indeed quite possible that more copies of games are being sold on PC than on PS3, and it's simply the lower prices of PC games that's making the difference.
Right now the PC version of Assassin's Creed IV is on Steam for €29.99 and the PS3 version is on PSN for €29.99. On Amazon the PS3 version is €29.51 and the PC version €26.99, hardly a difference big enough to make up 18% it's been a long time, since PC games were so much cheaper then console games.
You are omitting important information and presenting a heavily biased and clearly incorrect picture of the situation. This is unethical journalism on your part.
I think I showed how wrong you are on every single point.

Edited 2 times. Last edit by Christian Keichel on 22nd July 2014 10:07pm

Posted:9 days ago

#19

Curt Sampson
Sofware Developer

595 356 0.6
Christian Keichel writes
What you say - again - doesn't make any sense. The PC and the 360 are equal from Ubi's perspective, the 360 isn't selling "lesser" copies then the PC.
I've fixed the obvious typo: I meant to say "PS3" not "PC" in that sentence. And regardless of the typo, by your definition the Xbox 360 is a "niche" product, which is clearly absurd.

To say that a product that makes up 17% of total sales is not "niche" but two products that each make up 14% of sales (together totalling almost double the PS3 sales) are "niche" is clearly absurd. This is nothing but irresponsible journalism, to the point where you can't even call it journalism. You're throwing around and misusing the word "niche" as a fear mongering tactic. (I would be curious as to what your stake in doing this is.)
Right now the PC version of Assassin's Creed IV is on Steam for €29.99 and the PS3 version is on PSN for €29.99. On Amazon the PS3 version is €29.51 and the PC version €26.99, hardly a difference big enough to make up 18% it's been a long time, since PC games were so much cheaper then console games.
You are utterly ignoring the frequent sale prices on PC games that don't happen for console games. In the last 18 months there have been [url=http://isthereanydeal.com/#/page:game/price?plain=assassinscreedivblackflag]more than a dozen occasions[/url] where AC IV has been priced under $25 for PC, and several occasions in the last month or two where it's been under $20. Even even right now it's available for under $25 at Nuuvem. This is nothing abnormal, you can look at almost any AAA game on Steam that's more than a year old an see several time when it's been on sale for at least 50% off, and not infrequently as much as 80% off. While common in the PC gaming world, those sorts of discounts are extremely rare in the console world.

If you look at older games, the price differences become even more dramatic. Far Cry 3 had dropped to $12 during regular sales about 18 months after its release, and these days can be seen on sale for as little as $8.. As far as I can tell, new copies for the consoles have never dropped significantly below $20. (Thi s isn't surprising if you consider that there's probably about a $5 fee that has to be paid to the platform owners for each copy of the console version that's sold, and also PC sales have much less cannibalization from the used games market.)
I think I showed how wrong you are on every single point.
No. You're throwing around things ranging from highly misleading to outright lies. You should be ashamed.

At least something good has come out of this: the PC gaming market appears to be considerably larger and stronger than I'd thought. I'm not surprised that it generates somewhat less revenue than any individual console (outside ones like the Wiii U); I am surprised and pleased that it's such a substantial fraction of what most consoles generate.

Posted:8 days ago

#20

Christian Keichel
Journalist

575 788 1.4
AC IV has been priced under $25 for PC, and several occasions in the last month or two where it's been under $20
Asassins's Creed Black Flag 360 version, Amazon $14.88 - your lowest PC version price was $13.20, not much of a difference and the Amazon offer is a regular offer, while your best price was obviously a short term flash sale for the digital version on a brazilian website, that has only distribution rights for South America, so buying from them as somebody form North America or Europe is technically illegal.
If you look at older games, the price differences become even more dramatic. Far Cry 3 had dropped to $12 during regular sales about 18 months after its release, and these days can be seen on sale for as little as $8.
You don't seem to pay close attention to console prices Far Cry 3 360 retail version $18.05, digital 360 version €9.99 and PS3 digital version €7.99
This is nothing abnormal, you can look at almost any AAA game on Steam that's more than a year old an see several time when it's been on sale for at least 50% off, and not infrequently as much as 80% off. While common in the PC gaming world, those sorts of discounts are extremely rare in the console world
I can't say much about the XBox Live Marketplace, but at least Sony has sales 24/7 on 365 days a year (366 in leapyears) and during these sales the prices for AAA titles go down as low, as they go down on Steam, which I visit regulary too. It's not as common on the Nintendo eShop, but here prices are slashed on a regular basis too (but mostly for 3rd party games, as they aren't in the main focus of Nintendo customers, I would agree on Nintendo systems sales aren't as big, as on Sony systems.
You're throwing around and misusing the word "niche" as a fear mongering tactic. (I would be curious as to what your stake in doing this is.)
I explained to you, why I think the 360 is becoming niche, not my problem, if you aren't willing to read what I wrote.

Edited 13 times. Last edit by Christian Keichel on 23rd July 2014 9:22am

Posted:8 days ago

#21

Curt Sampson
Sofware Developer

595 356 0.6
I explained to you, why I think the 360 is becoming niche, not my problem, if you aren't willing to read what I wrote.
I am reading what you wrote. By your definitions, Pepsi-cola is a "niche" product too. And any two "niche" products in a market can make you considerably more revenue than one non-"niche" product. You clearly have no clue what the word "niche" means.

Posted:7 days ago

#22

Christian Keichel
Journalist

575 788 1.4
Pepsi-Cola is not a video game related product and even if two "niche" products can generate more revenue then one non-"niche" product, it doesn't mean they are more profitable. Business 101: Profit is earned money minus spent money. There is a reason for the crash of the video games industry since 2009 and one of the reasons is the desastrous fragmentation of the market during the last generation with 2 HD and one SD consoles (that outsold their HD counterparts) combined with skyrocketing budgets.
The PC was a non-factor, it was a machine, that received poorly optimised ports of console games, that - as we can see - didn't sold on par with their console counterparts. Look at the number of AAA exclusives for the PC and look at the number of AAA exclusives for consoles (both platform exclusives and games that were released on the 360/PS3 but not on the PC) and you will see, why the PC is niche and why the money is made on the consoles.
Apart from independent productions and MMORPGs, were the PC is in fact king, the big publishers invest in console games, not in PC games. And as it looks right now, this isn't getting better, Destiny and MGS V won't receive a PC version and just last month EA released UFC for the PS4/Xbox One, but not for the PC.

Edited 2 times. Last edit by Christian Keichel on 24th July 2014 11:04am

Posted:7 days ago

#23

Morville O'Driscoll
Games Blogger & Journalist

1,491 1,257 0.8
Look at the number of AAA exclusives for the PC and look at the number of AAA exclusives for consoles (both platform exclusives and games that were released on the 360/PS3 but not on the PC) and you will see, why the PC is niche and why the money is made on the consoles.
Again, it's not that black-and-white. You dismiss the PC based on how many AAA exclusives it has, but without noting how profitable PC games are (regardless of their AAA status). The AAA-quality (though not in terms of budget?) Divinity: Original Sin cost about 4m Euros, but it's easily going to be more profitable faster than, say, Final Fantasy 13. In addition, the AAA exclusives it does have sell shockingly well, generally (Civ V/Total War, and it could be argued Star Citizen and Elite: Dangerous, if you take pledges to be pre-orders).
The PC was a non-factor, it was a machine, that received poorly optimised ports of console games, that - as we can see - didn't sold on par with their console counterparts.
Again, not as black-and-white. There's a tremendous number of games that are released on console first, then PC (delayed by anything from a couple of weeks, to a year). For those with both console and PC, the temptation is to therefore buy the console version, play it... and possibly (probably?) sell it on. For example, are we going to argue that sales of the PC version of GTA V are going be as good 1 year after its 360/PS3 release as they would've been if it had been day-and-date released with those versions? Amusingly, Ubisoft are actually the worst for delaying its PC versions so that consoles have unofficial timed exclusivity.

(And let's not get into how some console-PC ports are far-and-away better than the console versions).

Edited 3 times. Last edit by Morville O'Driscoll on 24th July 2014 12:39pm

Posted:7 days ago

#24

Christian Keichel
Journalist

575 788 1.4
@ Morville

I was talking about the AAA space, not about games with a budget of $4 million, this is a completely different market segment with completely different rules.Divinity Original Sin is an independent game, I already said, that I think in this space the PC is a big factor.

GTA V is coming to the PC, because it's coming to the PS4/Xbox One. Without these platforms, there would be no GTA V port, I am sure about this and if you look at the material released by Rockstar, they don't show the PC version, they show the PS4 version, because this is the version, the game will sell best.
(And let's not get into how some console-PC ports are far-and-away better than the console versions).
You mean better like Dragon Souls which runs at 720p or more like Bioshock 2, which didn't have any gamepad support or more like GTA IV, which forced you to sign in on 3 different Services (Steam, Games for Windows, Rockstar Social Club), before you could play and that ran with approximately 5 FPS when it was released even on High End machines? Or do you mean better like in Metal Gear Rising, which set your display to 24 Hz when running in 1080p? Or last but not least, do you mean better like in Titanfall, where the developers cut out a game mode from the PC version after the game's release, because the game overall obviously lacks players?

Edited 4 times. Last edit by Christian Keichel on 24th July 2014 12:55pm

Posted:7 days ago

#25

Morville O'Driscoll
Games Blogger & Journalist

1,491 1,257 0.8
I was talking about the AAA space, not about games with a budget of $4 million, this is a completely different market segment with completely different rules.Divinity Original Sin is an independent game, I already said, that I think in this space the PC is a big factor.
Oh, yes, indeed. But my point was about profitibility. As you say,
Profit is earned money minus spent money.
Considering the obsession with AAA budgets is one of the issues that this industry has, I think dismissing a format that is more profitable as "niche" isn't helpful.
You mean better like...
No, I was more thinking of better like Dark Souls 2 (better resolution and textures), Killer is Dead (60fps 1080p available in an easily editable config file), Skyrim (better textures), Tomb Raider (60fps at 1080p as standard (no Definitive Edition update for PC, since we didn't need it :p )).

As I say, it's not black-and-white.

Posted:7 days ago

#26

Christian Keichel
Journalist

575 788 1.4
Considering the obsession with AAA budgets is one of the issues that this industry has, I think dismissing a format that is more profitable as "niche" isn't helpful.
Depends on the profits you can expect, obviously Activision isn't expecting Destiny to make them enough money on the PC. Obviously Konami is thinking the same about MGS V and obviously Square Enix isn't even considering to put anything besides MMORPGs from the Final Fantasy Universe on the PC any more. MGS 1 and 2 were on the PC, as was Final Fantasy 7+8 and Destiny is the biggest Activision game of the year and it doesn't come to the PC.
I agree with you, it's not black-and-white, but to expect that the overall US games industry revenues are saved by the digital download segment from the PC is nothing but foolish. Industry revenues are down and the share of the PC hasn't grown in the last years, at least not for Ubi. and I doubt the share of PC revenues has grown at Activision/Blizzard, EA, Koch Media or any japanese games publisher as well.

Edited 1 times. Last edit by Christian Keichel on 24th July 2014 1:04pm

Posted:7 days ago

#27

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