New IP is likely to suffer this year, says Hayes

Sega Europe president expresses concern over original content as publishers refocus

One of the casualties of the ailing economy this year could be new IP, as publishers refocus their portfolios and cut back as far as possible on risks - something which might not be good for the consumer in the long run.

That's according to Sega Europe president and COO, Mike Hayes, who told that it's also a symptom of the number of high quality titles in the marketplace.

"This time around there's definitely an oversupply of good games in the market from publishers," he said. "I think that was very evident in the UK at Christmas when you had fantastic games coming out and selling great in the first week, maybe two, and then falling off a cliff.

"We were fortunate, because we only had Football Manager and Mario & Sonic, so we weren't bringing out any new IP - but speaking to friends at other publishers, they have been saying they were disappointed with sales, they were being quite open about it.

"The price therefore comes down, which is great for the consumers because they're great games, but I just think this time around all of those three things means that we're as embroiled in the situation, if not as much as anyone else, then we're at least in there fighting, and it's therefore difficult."

But he doesn't think it's a problem of price points, even though many would still describe videogames at GBP 50 as luxury items, compared to other entertainment media.

"I don't think it's accessibility of price, I just think it's physically about the time you've got," he explained. "You've got Gears of War 2, FIFA, PES, Football Manager, Mirror's Edge - I don't think you've got enough time to actually play them all.

"The downside is that I think that publishers in general will reduce the number of titles that they'll bring to market. Whether than means people will focus less on innovation and more on sequelisation of course is a big debate.

"What we're actually doing is getting rid of the bottom tier of titles that we were putting in to get an extra bit of market share, of money. We're getting rid of those, and we're going to focus on the biggest titles - but we do have a lot of new IP coming out. We've invested in things like MadWorld, for example, and we feel our line-up is good enough that we can take that.

"But I think a lot of other publishers, and EA have been quite open on this, will stop a lot of projects and cut back. Ultimately I think the number will go down, which will probably be less good for consumers."

Part one of the interview with Mike Hayes, in which he gives his views on where the economy will take us, and summarises Sega Europe's position in the market, is available now.

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Latest comments (4)

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.13 years ago
It all comes down to how specialty retailers like Game and GameStop design their stores. So little shelf space - so many games. If you don't buy brand new in the first 2 weeks, it's off the shelf and you're forced to buy a used copy which kills long term publisher revenue.

This forces publishers to produce massive launch campaigns in hopes of getting a big chunk of their sales in that 2 week window further reducing their margins.

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Franck Sauer Creative / Tech Art Director, Fresh3d13 years ago
True. Also I think the big three should push their digital stores a bit harder and increase awareness. There's no shelf space limitation in the digital stores, just a sorting issue. Which brings me to the point that they all should include a rating system (rating by consumers) so that great games stays on top of the lists and visible without need for torough search through thousands of games. This would give a better chance to new IP I think.
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.13 years ago
I think they don't push for digital distribution any harder because of the balance they must hold with retailers. Because DD can only provide so much revenue in its current form, retailers still have the big three kissing their feet.

I know the Wii Shop Channel provides a 'Most Popular' list right up front making it easy for consumers to find highly vaunted games (not sure of the other two consoles) but the Wii Shop channel itself is not very well marketed which goes back my first point.

How far can they push DD before retailers start to push back?
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Mat Bettinson Business Development Manager, Tantalus Media13 years ago
This arrangement costs publishers a bit of money in my annecdotal experience. There's quite a few games I'd like to buy, but I'm not going to buy them on anything other than something like Steam. However it's a whole load more money on Steam.

I mean it's obvious why, they don't want to undercut retail. I ask you though, how can the public be expected to swallow the silly RRP-level DD price tags? The market doesn't really care what sort of deals you have to do to keep retail sweet.

You might say you could justify some tit-for-tat action here; retailers devoting half their shelf space to pre-owned? Alright then, we're going to discount on DD platforms. If they did that I'd buy several games right away and I suspect I'm not robinson crusoe.
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