At the Montreal International Game Summit last month, Jesse Divnich of Electronic Entertainment Design and Research presented a session that looked at the the correlation between review scores, game quality and marketing – with data that proved both insightful and controversial.
In this follow up interview, Divnich discusses some of the trends of the current generation and how they are coming to an end, what will replace the most recent 'fads', and how the William Goldman quote – "Nobody knows anything" – applies to the games business.
Q: What kind of feedback did you get from the development community from your MIGS session? Because some of what you were saying could have been quite depressing, quite soul-destroying...
Jesse Divnich: I got a lot of positive feedback. It can be depressing, but it's the truth. I'm not here to instil false hope into developers, they need to know the truth. We are bombarded with over 1000 new games every year and while having a high quality product certainly helps in contributing to a game’s commercial success, it is far from the only factor. In fact, of the 1000 games released this year, 100 of them will receive a quality score of 80 or higher. The only way publishers and developers can distinguish themselves from their competitors is through branding and marketing. Developers and especially students need to be aware that simply designing a good game is only half the battle.
Q: Do you think sales of the Wii have dropped off because consumers have started to realize that the general quality of games on the console is below a certain expectation – that a majority of games on that system just aren't very good at all?
Jesse Divnich: It’s a lack of innovation. 2007 had Guitar Hero, a very innovative product and 2008 had the Wii Fit, and throughout those years Wii games like Mario Kart, Carnival Games, and Mario Party introduced gaming to a new audience. But what about 2009? Aside from the Motion Plus and EA Sports Active, there hasn’t been much innovation on the Wii. The casual audience needs some sort of gimmick to entice them on making additional purchases. Releasing sequels with minor upgrades does not work in this realm.
For example: Brain Age vs. Brain Age 2, Wii Fit vs. Wii Fit Plus, Guitar Hero III vs. Guitar Hero World Tour vs. Guitar Hero 5, Rock Band vs. Rock Band 2. These are instances where the sequel, which had better quality and more features, should have outsold the original on the Wii or DS, but in each case, they did not. This goes completely against our core assumption that as long as we add some new weapons, race tracks, levels, features, etcetera and throw a roman numeral at the end of the title, it will outsell its predecessor. The casual audience gets their fill on a game much quicker than the core audience does (and this is true in most industries). As odd as it sounds, it sometimes requires more work and aggression to keep the casual and non-traditional gamer happy than it does for the core gamer.
Q: What do you think to Project Natal next year? Do you think that's going to really boost the Xbox 360 as much as Microsoft is expecting it to?
Jesse Divnich: It's going to be huge. I think it's going to be the greatest thing for this industry since the Nintendo Wii. Because consumers out there are already addicted to motion-based gaming, but we've realised the limitations of the Wii and we want something more. We want something more evolved and more sophisticated and I think Project Natal is going to deliver those on two fronts. One, it's going to resonate with the casual side. And two, you've got commitment from the core development community.
If I had to summarize 2010, it will be that motion based gaming will again save this industry and I don’t expect this to be entirely driven by the Natal and Sony Motion Controller. They would both be foolish to think Nintendo will take this lying down.
Q: Do you think Microsoft can honestly reposition the Xbox 360 as a family console for games. It's got the hardcore audiences locked down, but can the 360 become a family-friendly unit?
Jesse Divnich: Definitely, and that's the old business model that the PS2 had. When the PlayStation 2 first launched Sony targeted the hardcore, and the early adopters, then once the price began to drop they went for the casual market. SingStar and EyeToy helped, and games like Harry Potter and Cars got the younger audience, and the price sensitive consumer. That's why I think Natal is going to be a huge, huge deal. The success behind any peripheral is the software support and we know that Natal has great support from every major publisher in the industry.
Q: The PlayStation 3 seems to have regained some of its momentum, but do you think it's still a downhill path for Sony this generation?
Jesse Divnich: No, it is probably uphill from here. The price cut clearly rejuvenated sales and now the PlayStation 3 and the Xbox 360 are having competitive month to month battles. The PlayStation 3 had a very rough start, certainly not what Sony anticipated and I believe there is an important lesson here. Consumers, while they want to be loyal, are not monogamous. I do anticipate that most PS2 owners will eventually buy a PlayStation 3, it just might not occur at the higher price points, but instead when the PlayStation 3 is priced below USD 300.
Q: Which is something you pointed out in your MIGS session – that again much better marketing helped to reach a wider audience. In the UK Sony had – with the PS2 as well – this cryptic approach to advertising, this arty approach, where it never showed the games. You might have David Lynch directing your ad, but you're not showing me high-def gameplay? Why isn't that common sense?
Jesse Divnich: Nintendo probably hit the nail on the head with its marketing campaign. Their campaigns not only showed the game, but showed people interacting with that game. Emotions are very contagious and we can’t help but feel some form of internal enjoyment from watching others having a good time. Modern gaming didn’t start until 2000, and since then we’ve been throwing Jello at the wall to see what sticks in terms of marketing.
For Sony, they certainly have tried every end of the spectrum from high-definition cutscenes/gameplay to babies levitating consoles to mainstream comedic commercials. Honestly, I don’t know of the right answer and there isn’t likely a standard format all gaming commercials should abide by.
Q: The music genre has seen a significant decline in 2009. Why do you think that it?
Jesse Divnich: The music genre is over-saturated. There's a lot of releases, a lot of competition. Music peaked in late 2008 and we will down in 2009. I believe consumers got their fill in music quickly and exited the category much sooner than anticipated. Additionally, you can only sell so many hardware band kits before you reach a maximum saturation point, after that you must transition your base to software and digital purchases, and while that has worked, it has only been successful among the core of the industry.
On DJ Hero, I was disappointed in European sales. Most analysts, if not all, were expecting the majority of sales to come from the UK and mainland Europe where house/trance music is popular. Unfortunately, US analysts were wrong as North American sales are looking to outpace European sales.
Q: And that's how Activision were selling it – as the title that could grow the music category across Europe. Guitar Hero: Van Halen is never going to sell big in the UK... The Beatles: Rock Band too, that doesn't seem to have picked up the numbers that were expected of it.
Jesse Divnich: I was shocked to see Guitar Hero 5 outsell the Beatles in the UK. You should all be ashamed of yourself!
Q: The excuse is, it came out the same day as the remastered albums. Surely seven remastered albums come before a videogame for a fan of The Beatles? That's a big price before you even consider shelling out for the game plus peripherals.
Jesse Divnich: We were surprised Guitar Hero beat The Beatles in the UK. Maybe The Beatles are bigger now in the US than in the UK. The Beatles still sold a lot though. We talk about it 'failing' against Guitar Hero, and that's the problem, we talk about Rock Band and compare it to Guitar Hero, but when we take Guitar Hero out of the picture, we see that Rock Band is a billion dollar franchise. It's one of the top 10 franchises of all times. That's a big achievement and it's nothing to sniff at.
Q: If the music genre is on the decline, is there no coming back for it? Where can it go from here?
Jesse Divnich: Well, how do you get bigger than The Beatles? The music genre will probably show steady declines for a few years until someone comes along with some breakthrough innovation to rejuvenate life back into the genre. What that will be? I don’t know. If I knew, I’d be designing it and so would you.
Q: I'm not sure there is a band bigger than The Beatles. Not even Jesus was bigger than The Beatles, according to Lennon...
Jesse Divnich: It's because our industry works off persistent fads. I say the word 'fad', and some publishers hate it, but fad shouldn’t have this negative connotation. It's a good thing. Fads can last in the gaming industry for three or four years and if you can get four years out of a product, that's great.
It's one fad replacing another. Music's dying and then here comes fitness. In 2006 when the Wii was released, music was just beginning to pick up. As music was picking up so was casual gaming. As casual gaming picked up so was the fitness category. That's what drove the growth of the industry – three booms happening at once. The problem is they have a lifespan and all three movements are beginning to die all at once. The core of the industry couldn’t be healthier. The core of the industry has been up every single year and will produce gains this year despite the industry as a whole declining. That's never going to stop. It's the satellites demographics, the non-traditional gamers, the casual gamers – they need a reason to come back and keep playing games and the truth is they can only buy so many Rock Bands and so many Wii Fits.
Q: And that's where you see Natal coming in next year?
Jesse Divnich: Yes, Natal will be viewed as a gimmick. I hate to use the word 'gimmick', but that's what we need as consumers. We need a feature to stick out and grab our attention and being able to advertise a peripheral that completely drops the need for a physical input device, like a controller, will be huge. Although I personally believe the Natal will deliver a very deep and sophisticated gaming experience. However, the non-traditional and casual side of the industry will look at the Natal as an exciting new product that they will probably get bored of within 18 months.
It’s for the same reason Transformers is in the top ten for box office revenue of all time. The movie was bashed by critics, the story line and acting had little depth, but it sold well. Why? Because it had a gimmick, a hook, an angle. It had branded transforming robots from our childhood with a smoking hot chick.
The entertainment industry is very risky and anyone working in it will tell you the same. I’ve personally always said that the entertainment industry, which includes movies, games, music and fashion, is the riskiest businesses to be in. If you’re in this industry to make a fortune, quickly, you are crazy. If you want riches, buy an oil company. Consumer’s appetites change so quick in this industry that even the best products will fail without some sort of hook or gimmick to them. Entertainment is a crapshoot.
Q: Do you think that really applies to videogames?
Jesse Divnich: Yes, I do. I think it's a crapshoot. That's why Zynga and Playfish have done so well – they've just tossed Jello at the wall and seen what sticks. That used to be the philosophy of the old PlayStation and PlayStation 2 days. Publishers were just throwing games at the wall to see what sticks. Unfortunately games got so expensive that they couldn't do that any more. Research in games did not exist in 2000. If it sounded like a good idea, it would be made to see if it worked. It's much riskier launching a game title in this generation than ever before because of the increase in failures. And the extreme increase in costs.
The Wii became a social epidemic. Everybody had to have a Wii and they didn't know why. Unfortunately, social epidemics whether positive or negative, will eventually fizzle. Which is why I truly believe we're going to see a successor to the DS next year, the DS 2. A new piece of hardware from Nintendo.
Q: What are you impressions of the PSPgo? That seems to have been a divisive product in 2009.
Jesse Divnich: In terms of games, digital distribution is still very hard to grasp. It's tough because it's technology ahead of its time. The PSPgo and the PS3 are well ahead of their time. When digital distribution is standard 10 years from now we're going to look back and see the PSPgo as being there first, and we'll put it on a pedestal as the first console to make the jump, even though it might not be that commercially successful. The success of the PSPgo has more to do with its commercial success, it's about what it represents for this industry for digital distribution.
Jesse Divnich is director of analyst services at EEDAR. Interview by Matt Martin.