GameGuyPete Blog

Taking Chances

Peter Skerritt Jr — Fri, 25 May 2012 04:00:00 GMT

I just got my finalized flight information for E3 from Popzara Press, along with my hotel reservations and preliminary news of some appointments that have been booked for me. The next 14 days are going to be full of preparation, travel, walking, socializing, networking, and information.

It's scary. Terrifying, even.

It's also extremely exciting and an opportunity that I'm extremely fortunate and grateful to have.

Many professionals-- and many more enthusiasts-- have saved and/or spent their money to attend this important event. Some will be reimbursed for their time and money, others knew that going to E3 demands a fair amount of expense between travel and accommodations. For me, having moved back to Massachusetts last November and not having a job since the move, this kind of trip was impossible until just a couple of weeks ago.

I don't have any income. I live with family. I'd been forced to sell a lot of my possessions in order to stay afloat. The last 6 months have been a tremendous challenge. I'd even given up on my dream to "be somebody" in the gaming press a couple of months ago, so the thought of flying 3,000 miles to Los Angeles and seeing what the industry has to showcase to the world was not even on my radar.

It's funny what taking one chance can do, though.

I didn't know what to expect when I talked with the owner of Popzara Press. We chatted by telephone-- which is something I rarely do-- and I decided to take my Armchair Analysis project there. There were no quotas, submitting articles was easy, and it was a low-pressure opportunity. It's not a paid gig, but as much as I could use the money, I was content to be writing again and to feel like I could round back into form.

Since that fateful phone call and making the decision to resume writing, my productivity has been better than it's been in years. I've been asked to comment as an analyst on various topics by a few writers. I was part of my first-ever podcast just this week. I made the decision to go back to school in the fall. And now, Popzara is flying me to Los Angeles and paying for my hotel room so that I can cover E3 for them.

All of this has happened within the past three weeks. It's amazing.

I can't wait to see what happens next.

Grand Theft Auto V in 2012? Could very well be...

Peter Skerritt Jr — Wed, 23 May 2012 07:13:00 GMT

I covered the earnings call for Take-Two and found something very interesting.

Take-Two expects to generate between $1.75 and $1.85 billion in this fiscal year, which began on April 1st, 2012 and ends on March 31st, 2013. 60% of that revenue is projected to be earned by the Rockstar Games label, which equates to at least $1.05 billion dollars. Rockstar currently only has one game slated for release during this fiscal year, and it's already out: Max Payne 3. Even if Max Payne 3 moves 10 million units, that's still only about 60% of the revenue projection.

So... where does that other 40% come from?

BINGO.

Grand Theft Auto V.

It's hard to say whether the game definitely ships this year, at this point... but I'm 90% certain that it ships during the fiscal year-- that is, before March 31, 2013. In my estimation, it has to be Rockstar's missing piece... unless there's another project that we either forgot about or don't know about.

We'll see whether my hunch verifies, but I'm feeling pretty confident about it.

Lots going on...

Peter Skerritt Jr — Thu, 17 May 2012 22:42:00 GMT

It's been a long time. A lot has happened since I posted here last. KmartGamer folded, I tried my hand at another blog that didn't work out, and I had basically thrown in the towel on writing in general. I turned 40 in April. I applied for financial aid to go back to school in the fall and just might get it.

Whew.

This month, things have changed in a big way. Armchair Analysis was picked up by Popzara Press late in April, and the site is funding my way to and from E3 in a little over two weeks. I'm writing more than I have in a long time-- mostly because it's earnings season and there's been a TON of stuff to cover-- and I haven't felt this good as a writer in a long time.

The trip to E3 for me this year is going to be decidedly different than it was last year.

For starters, I'm going as a member of the media this year. Last year, I went as a buyer-- which meant that meetings and presentations that I attended were geared with purchasing in mind. This year, I have a clean slate and minimal supervision. I'll get to cover what I want and at my own pace. There's some concern that I haven't set any appointments yet (as I just recently found out that I was going), but the floor is so massive and there's so much to see that I'm not worried that I won't find things to write about. I'm going to get the chance to do some serious networking this year, and that's going to be a worthwhile use of time no matter how much content I generate.

The other big difference is that I'm not going with a team this year. It's just me, which is an entirely new experience. Honestly, I haven't done much travelling on my own, so it creates a bit of anxiety. I'm also flying a lot farther this year; last year it was a short hop from Phoenix to Los Angeles. This time, I'm flying from either Boston, MA or Hartford, CT. I'm not exactly fond of airplanes... and crashes. Needless to say, it's going to be a long flight.

I've completely redone my profile here at Game Informer, and I'm going to try to update more here. This is a fantastic community of readers, contributors, and staff. I've been a fan of the magazine for 15 years and its continued success is well-deserved. So many people here are active, and writing blogs here during the winter was a great bridge between the collapse of the KmartGamer project and getting my Armchair Analysis project off of the ground.

Follow-Up: The GameStop Experience

Peter Skerritt Jr — Mon, 09 Jan 2012 02:53:00 GMT

First off, thanks to all of you who left comments on my original post about my recent GameStop experience. It really fosters a sense of community here and it is good to read positive GameStop experiences. I know that these experiences exist and mine is an uncommon situation, but it's also a shock as someone who used to work for the company back in Arizona in 2010 and 2011. I know what the ideal experience is supposed to be like, and it's unfortunate that this one was so negative that I had to share it.

It's true that not all stores are like this. Stores are as good as their employees are, from the store manager on down to the newest Game Advisor. Sure, there are challenges created by some corporate decisions (like the removal of cases and manuals from PS2 games for sale or the "gutting" issue with opening new games for display), but much of how a store operates and is perceived by its customers is determined by its staff. This store, sadly, does not represent the company well and only serves to exacerbate what's already a negative image that the company has to deal with.

Taking some advice from comments both here and on Twitter, I logged a complaint about the experience via the Customer Feedback option on GameStop's website this evening. I'm hoping that a district or regional manager gets it so that they can take a look at the store and improve it. If I received a letter like that, there's no question that the store manager would receive disciplinary action and that the store's employees would be put on notice that the store is going to be more closely scrutinized. Having once inherited a store manager role for a FuncoLand that had been a "trouble store", it needs to be determined if the staff really wants to work hard or not. Nobody wants to be out of a job in such trying times, but if you're not willing to do the work and provide the experience that the company expects, there are others who can probably do the job. I'm hoping that it's a wake-up call.

The cherry on top of this disappointment sundae is that two of the games didn't work. I'm now faced with returning these games (to a different store, for sure) and having to use the store credit on something else. Since I used store credit to pay for the games, there will be no cash back. I probably won't be getting another Buy 2, Get 2 Free opportunity, so I'm going to lose out. This is an unavoidable peril in video game collecting when it comes to disc-based games, but it stings a bit more since my experience in getting these games was so negative to begin with.

We'll see if anything comes of my report. In the meantime, it's worth noting that NPD sales data for December is due this week. I'll be focusing some writing on that here in the short term as we put a cap on 2011 and see how successful the year was.

The GameStop Experience

Peter Skerritt Jr — Sun, 08 Jan 2012 07:12:00 GMT

GameStop has been running a Buy 2, Get 2 Free promo for pre-owned PlayStation 2 games and I decided to look into it. It had been some time since I had added some games to my PS2 collection, and the corporate website indicated that a local store had a copy of a game that I'd been looking for (NHL Hitz 20-03) in stock. After using the PickUp@Store option on the website, I got an e-mail back within 15 minutes stating that it could not be found. Intuition told me different and I drove down there, thinking that I might find a few other games to pick up while inside.

Before I continue with this story, let me go back a bit. This isn't the first time that I'd visited this store. The last time I went was, admittedly, during the holiday rush. What stood out to me was cracked glass in the front door, disorganization everywhere, and a surplus of employees that just weren't doing anything. I'm a veteran of gaming retail, including tours of duty with this very chain, and this store was inexcusably bad. I couldn't fathom why at least one employee wasn't engaged in "recovery"-- which is basically re-organizing the store after customers have torn through it. Everything was everywhere, the counter area was a total disaster, and the interior was excessively dirty. I filled out one of those surveys that staff are supposed to ask you to fill out and wasn't at all subtle about my experience.

In retrospect, it was the holiday rush. Some of my contacts on Twitter pointed out that, while it shouldn't be an excuse, holiday rush meant that I should cut the store some slack. So, now that the holidays are long since gone, I thought I'd give the store one more chance. The store is only a couple of miles away, so it'd be more convenient if I could go there, rather than to a more distant location. The experience hadn't started well, obviously, since I suspected that Hitz 20-03 was in fact lurking in the store somewhere... but maybe I'd find some other games and it'd be a better experience this time out.

Upon arriving, there's no greeting. That's weird, because the store wasn't really that busy and acknowledging the customer is kind of a big deal in GameStop's customer service model. I make my way over to the PlayStation 2 section, and one of GameStop's most questionable business practices reared its ugly head immediately. Hundreds of games that once had cases and instruction manuals at one time were relegated to yellow sleeves and haphazardly thrown onto shelves. There was no alphabetization to be found. Some games weren't in their proper sleeves. Other sleeves were empty, which indicated theft. It's a shame, too, because these games would be a lot easier to locate (at least in theory) if the cases were kept.

After 10 minutes of looking, I found NHL Hitz 20-03... despite what the store said. Unfortunately, after examining it, the disc was in incredibly poor shape.

I kept looking around, staying away from the disc-only games. I did manage to find a few $10 games that I didn't own yet, including original and Xtreme Legends versions of Samurai Warriors 2 and Dynasty Warriors 5... plus the three Mortal Kombat games that I was missing (Deadly Alliance, Deception, and Armageddon). Upon bringing them up to the counter, the employee decided to field phone calls while trying to find my games instead of defaulting to the manager on the floor. This led to a longer transaction time and then word that Dynasty Warriors 5 was not in stock, despite inventory claiming otherwise and having the case in my hands. The store manager came over and did a quick look himself before saying something to the effect of, "Huh. It's not here."

My transaction was completed with no request to complete the survey (which I did anyway) and I was sent on my way.

I won't be visiting this store again. Fool me once, like this location did when I visited last, shame on you. Fool me twice, like they did this time, and it's shame on me. These are the kinds of experiences that sour me on the entire chain.

I get that GameStop wants PS2 stuff gone. I get that nobody wants it, aside from a few crazy people like me. I get that there's only so much room. I get that the chain is just coming off of the holiday season. Sadly, it's more than that when it comes to the store in question. Even the Xbox 360 and PS3 games were ridiculously disorganized. The staff was nonchalant. The store manager was more focused on tasks than customers, to the point where the game advisors were expected to act like he wasn't even there. The shopping experience for anyone at this store is lacking; I'm just one example.

It's embarrassing, especially as someone who's been on the other side of that counter. It's too bad that the parent company doesn't care enough to fix it.

Portable Gaming is Dead! Long Live Portable Gaming!

Peter Skerritt Jr — Fri, 23 Dec 2011 01:30:00 GMT

It seems to be a common theme for analysts and some mainstream writers to start digging a grave for portable gaming. You've read the articles and have either angrily commented or bit your tongue and wondered what was wrong with these people. Perhaps the most egregious offender is this Forbes article, which was published on December 20th.

The article wastes no time in making a strong point:

"Are we entering the end game for the mobile game console industry? Are the dirt cheap smartphone and tablet games in the process of toppling the entire proud industry based on selling $200 consoles and $40 games? Yeah, pretty much."

The author is being overly negative about the future of dedicated portable gaming, but there are significant changes going on that cannot be ignored. The era of expansion for the dedicated portable gaming market is over, and now the challenge is to keep core consumers on board. There is definitely room for both the iOS/Android gaming and portable gaming markets to co-exist, but sales expectations for portables must be more in line with market realities.

Less spending on portables doesn't mean no spending-- it simply means less. Portables had a stellar run over the last few years, but what was the competition? It's been DS versus PSP, with mobile phones providing makeshift gaming experiences based on licenses and weaker technology. Today, smartphones and tablets are not only competitive with dedicated portable platforms in terms of tech... but they arguably even outperform those dedicated devices and have more varied uses.

There's also been a notable decline in portable gaming sales in 2011. According to the latest NPD data, portable hardware sales, in dollars, are down 5% versus 2010 numbers. Software sales are down by 10%. This is in spite of a new platform (3DS) being introduced in March and with price cuts for several platforms. Even more telling are the November YOY (Year Over Year) comparisons. Portable hardware was down 21% versus a year ago, although software was down by only 1%. The software number looks better than it really is, however; it was the only category of software in the red.

The general explanation for the drop has been the proliferation of iOS and Android gaming. Smartphone and tablet penetration has been growing rapidly, and the games are cheaper on average. One needs to only look at the Angry Birds empire for an example of how relevant these cheaper games have become. The Angry Birds IP is seemingly everywhere-- even on the PSP and PlayStation 3. Fruit Ninja, a popular mobile game, made the jump to the Xbox 360 in 2011. Whether core gamers like them or not, these are games... and many people enjoy them.

When you consider the multipurpose functionality of smartphones and tablets, it becomes obvious why gaming on them has become so popular with users. Why carry separate devices for gaming, productivity, or phone conversations when one device can do them all well? Sure, dedicated gaming devices have better control interfaces, like pads or analog sticks... but if a game is created using the strengths of the technology and the accessibility of a touch-screen interface, why can't it be just as compelling an experience? Having a multipurpose device also saves money on buying "the next platform", too, when they run $170-$300 apiece.

If you're a core gamer, you probably hate reading this, but it's important to remember that core gamers are but a piece of the overall gaming consumer base. More casual game players are no better or worse than you are, and in the eyes of the industry, they're as important a money-making target as you are.

Having said that, it's also important to note that the core gaming market is also still very important. That market is where all of the early adopters come from. That market lines up at midnight to buy games and hardware, and that market provides some of the word of mouth that interests others outside of their circle. Portable gaming isn't going away, no matter how many analysts or writers say otherwise. As long as there is money to be made, companies are going to want to take advantage of that opportunity.

What has to happen is a lowering of sales expectations and a recognition of market changes. While iOS/Android gaming won't "kill" the portable gaming market, it will continue to steal at least some of the potential revenue that used to be earmarked solely for portables. There won't be incredibly large sales of 3DS or Vita units like we'd seen for the DS a few years ago, but we will still see numbers that foster a continued presence in the video game marketplace for portables.

We may see the Vita struggle for awhile until the inevitable price drop, but the 3DS has been showing signs of life over the last few months. Pricing and accessibility will be keys in keeping these platforms relevant as we move through 2012 and beyond, and I honestly believe that these areas will be key areas of focus.

So... buy a 3DS, or a Vita, and don't look on those purchases with fear of irrelevance. Sure, the numbers may not be as brag-worthy as they once were, but portable gaming still has a strong place in the overall hierarchy of a still-prominent industry.

2012 Predictions: Out on a Limb

Peter Skerritt Jr — Wed, 21 Dec 2011 18:33:00 GMT

Earlier this month, I posted a column on KmartGamer with some loose predictions for 2012. As we get closer to the year change, I figured that I'd go a bit further out on a limb and make more bold predictions here. If I'm right, I look like a genius. If I'm wrong, I look like Nostradumbass. My prediction correctness ratio for 2011 (from 2010) was about 50%, so that's not a terrible average.

So... here we go:

1. THQ gets delisted from NASDAQ and becomes a takeover target: I've talked about THQ here before, and the news continues to be poor. Saints Row: The Third and WWE '12 both sold in weaker numbers than some analysts were hoping for, uDraw continues to be a noose around the publisher's neck, and rumors of a cash crunch and possible default on a Wells Fargo credit line in 2012 have investors spooked. THQ stock hasn't been north of $1 since December 8th; if it stays under for $1 for 30 consecutive business days, as I believe it will, NASDAQ (the stock exchange on which THQ is traded) can pursue delisting procedures, which is basically the kiss of death to investors. I believe this occurs and that THQ becomes a takeover target. Closure is an outside possibility, but I think a merger or takeover is more likely. Activision and Electronic Arts are the companies that makes the most sense in bidding for a THQ takeover, but dark horses like UbiSoft and maybe even Bethesda could consider it. The takeover could happen before the end of 2012.

2. PlayStation Vita sells less than 350,000 units in the US at launch, then struggles for 2012: Sales of the Vita in Japan were decent, but not earth-shattering. 321,000 Vita units sold in two days over there, and I think the same scenario happens here in the US. Price point, whether core gamers like it or not, is a major sticking point for the mass market. It's now irrelevant that the Vita was considered to be the better deal at $250 back in June, because now the 3DS and Vita aren't on equal pricing ground any longer. The fact is this: Vita is $250, plus the price of a basically mandatory memory card... while the 3DS is just $170 with no additional accessories required. The average consumer sees value in dollars, not hardware stats. For $250, consumers can buy a 3DS and two games. For $250, consumers still need to spend MORE to get a memory card AND at least a game. Until the price point changes, Vita will struggle in the face of strengthening 3DS sales and the continuation of the iOS/Android boom. I don't see Sony making the same bold price cutting move that Nintendo made with the 3DS, which will make it difficult for Vita to appeal to more than a niche market for the balance of 2012.

3. Hardware sales for 2012 will show a moderate decline, while software sales will rise: Even with two new hardware platforms launching in 2012, the market won't be quick to move on them. As mentioned above, the Vita will be perceived to be expensive and there's enough uncertainty surrounding the WiiU that it's hard to consider a repeat of 2006 for its launch in the second half of 2012. The decline in hardware sales will also result from Xbox 360 finally closing in on its saturation point; expect YOY comparisons to be off for Xbox 360 hardware sales by about 5-10%. PlayStation 3 sales should be flat or slightly rise in comparison to 2011. The good news is that, with more consumers having at least one of the current-generation consoles in their homes, software sales should rise. Without the expense of adding a new console, consumers will be able to adjust their limited discretionary income expenditures and buy more games.

4. WiiU launches in September for $349.99: Since I'm going out on a limb with these predictions, I needed to be more specific with this instead of saying "WiiU launches between August and November for at least $300"... so here you go. I don't think that Nintendo has the luxury of waiting to launch the WiiU much later than September because the Wii software slate is relatively bare and stocks are taking a beating. The company needs a jumpstart, and the hope is that a strong E3 re-reveal helps with this. As for the price, I don't see Nintendo being able to sell much less than that early on due to the expense for the WiiU controller and Nintendo's internal expectation to not take losses on hardware. It's a high asking price, and could affect demand, but I don't know that Nintendo has a choice here. They'll have to rely on the games and tech to speak for themselves and put forth a strong marketing push to renew faith in the Wii brand. We'll see.

5. No new Xbox or PlayStation launches in 2012, but E3 will show us something: The situation here is very similar to last year at this time, when I knew that Nintendo had a new console being prepped and that we'd see it at E3 this year-- which we did. Chatter has been much too strong to ignore that new Xbox hardware exists, and probably has for some time. Microsoft also knows that Nintendo made a crucial error in waiting too long to have new hardware ready once the Wii reached saturation, as it did in 2010. It makes sense for Microsoft to take the veil off of its new hardware and let people know that it's going to be ready within a year. Sony has been quieter, and is tougher to read. Conventional wisdom says that Sony will have something ready too, but the question is: When will they show it? Will it be reactive if shown at E3? Do they have a special event first? It's a really tough call. What I'm almost certain of, though, is that neither company launches its new platform in 2012. More development time will be needed to ensure that a solid software lineup represents each platform at launch, and that would pin 2012 as being too rushed. Despite declining hardware sales, numbers won't dive enough to necessitate any rash decisions.

Vita Launch Numbers: Solid, But Unspectacular

Peter Skerritt Jr — Tue, 20 Dec 2011 05:58:00 GMT

As Game Informer's Jim Reilly posted earlier, the launch numbers are in for the PlayStation Vita.

321,407 Vita units were sold over the first two days of release. Initial shipment allocations from Sony were between 500,000 to 700,000, leading to a maximum sell-through number of 64.28%. The number fell about 50,000 units short of what the 3DS pulled during its first two days (371,326 units) on the market, or about 13.5% less.

The numbers can be spun in a couple of different ways:

On the positive side, the launch number is respectable for a $250 platform. More than half of the shipped units were likely sold (as long as the alleged 700K number wasn't the case) and pulled in over 8 billion yen in revenue for the hardware alone.

On the negative side, despite having hardware superiority over the 3DS and more available games at launch, the Vita fell short of the 3DS launch number. The numbers also add fuel to the perception from Japan that there's just not a lot of excitement for the Vita right now, for whatever reason. Perhaps it's money, perhaps it's an issue with different software title preferences, or perhaps it could be something else altogether.

Launch numbers aren't always indicative of the future of a given platform, but they can be used as an indicator of consumer interest and perception. There's no reason to panic or declare the Vita in any sort of trouble, but numbers in the weeks to come bear watching. Rapid dropoffs could lead to analyst doubts about the Vita, which is already being considered an underdog by several.

In short, the Vita launch in Japan can be viewed as solid, but unspectacular. We'll see where it goes from here.

Three Strikes: PlayStation Vita

Peter Skerritt Jr — Mon, 19 Dec 2011 08:44:00 GMT

There's going to be a lot of excitement today as tons of PlayStation Vita videos go up all over the internet, looking to cover what Sony hopes will be a smashing successor to the PlayStation Portable. If you're a Sony fan, you're probably not swayed too much by the arguably high asking price ($250 plus the price for a memory card)... but for those who are on the fence, take these things into consideration that were discussed this weekend on Twitter:

1. Early glut of supply: Despite rumors stating that preorder numbers were high and fears that possible shortages of Vita hardware may result from demand, we're seeing reports that supply is surpassing demand. This trend seems to echo what we saw for the Nintendo 3DS when it launched, as Sony and Nintendo looked to reverse shortage situations from past hardware launches. Unfortunately, the adjustment was too significant for Nintendo and could be the same for Sony. Putting too much hardware in the pipeline at launch gives consumers a reason to play the waiting game instead of wanting to buy immediately in order to take advantage of short supply. Worse yet, anecdotal evidence from gaming press in Japan seemed to indicate that interest in Vita had waned and 3DS interest had been growing. We'll have to see how Week One numbers bear out, but this potential trend is one to watch.

2. Poor battery life: There were indications that the Vita battery lasted for two hours before full discharge during an Uncharted play session. This anecdotal evidence was taken down soon after and replaced with a statement about needing field testing, but the battery life now becomes an even hotter topic of discussion. Will consumers need to adjust brightness and fiddle with Wi-Fi settings to maximize the battery life to the point of lasting longer than 120 minutes? How will other games affect battery life? Read impressions and review pieces carefully to find info about battery life, because chances are reasonably good that we'll see the same issues crop up in other territories, as well. Perhaps two hours is long enough for some, especially if there's an outlet nearby, but even the alleged issues with the 3DS battery weren't this bad.

3. Possible dissatisfaction: This tweet (and picture) seems to indicate that Vita games were quickly being turned around for second-hand sales. Considering that it had only been a couple of days since launch, it could be bad for perception. On the flip side, those games may also be less-than-stellar offerings in the Vita's launch library. Still: Used games so quickly after a platform's release never looks good. Link this strike with strike 1 above, and it sends a message that there's a lack of interest and/or dissatisfaction with Vita at launch which could affect sales in the near-term. 3DS had problems selling without many games at launch, to go along with the high price tag. If Vita underwhelms at its launch price point with a stronger games lineup, the argument about price being too prohibitive becomes even more valid.

Keep in mind that these are launch trends and not necessarily indicative of the Vita's future on store shelves... but these strikes should also be considered when viewing the overly-enthusiastic videos and articles that address the arrival of the Vita over the coming days. If any (or all) of these factors proves correct, then Sony will be more significant hurdles to clear when the Vita lands in the US in February.

The War on Used Games: Obsidian Stabs at Thee!

Peter Skerritt Jr — Mon, 12 Dec 2011 22:25:00 GMT

"I hope digital distribution stabs the used game market in the heart."

-- Chris Avellone, Chief Creative Officer, Obsidian Entertainment

If you've read any of my older content over at my Consoleation blog, you'll know that I'm a defender of the used game marketplace. Used games have existed for decades, but it's only recently that the industry has declared them Public Enemy #1 and expressed desire to see the market killed. It's a short-sighted stance, driven by a change in direction towards greed and blockbuster revenues. Ridding the marketplace of used games-- especially in this era of $60 offerings-- discourages impulse buying from consumers and furthermore eliminates any potential protection from buying a bad game.

Those against the practice of used games like to use the argument that it doesn't make sense to pay "$5 less" for a used game versus a new one, or that consumers are stuck in a used cycle where they trade used to buy used. These are not all-encompassing scenarios. Not all used game sellers are GameStop, so some used games can be sold for different prices. I wouldn't take a chance on forking out $55 or $60 for a game that I'm not familiar with, but if the price is less, I might. Dead Space is a perfect example of this; I'd heard about it but the demo really didn't hook me at first. I found a good deal on a used PS3 version for $35 and gave it a try. I went on to buy the Xbox 360 version new and then bought the Collector's Edition of Dead Space 2. It was a used game that convinced me to buy new, and yes, I did trade in some of my games to help afford the $80 asking price.

The idea of being able to recoup some losses for buying a game and not being satisfied with it isn't new. I'm willing to bet that most of you have bought a game (or three) that didn't quite work out for you. Being able to sell or trade in these unwanted games gives consumers a bit of an out. No, you won't recoup the $60 you wasted, but even getting $20 back is still $20 more than you had. Perfect example of this for me was Brutal Legend. The demo represented exactly what I was looking for with hard rock and lots of action, so I preordered and dropped $60 on launch day. Upon getting past where the demo ended, RTS sequences absolutely killed any interest I had in the game. Thankfully, having the option to sell it put a little bit of money back in my pocket. Taking that option away from me, as someone who buys games regularly, automatically curtails my spending. Demos and reading a couple of reviews won't be enough to sell me on a game. It needs to be worth every penny of the $60+ that I spend on it. Impulse buying, which accounts for more purchases than any publisher is willing to admit, would be essentially nullified.

I get why publishers have this disdain for used games. They feel entitled to a share of the resale revenue, and, in a perfect world, they'd get it. Publishers have also had years to open a dialogue and try to get their fair share without using consumers as pawns to get their way. It's not excusable for publishers to embark on such a mission now that the technology favors them. Publishers are also failing to recognize that entertainment spending is trending down as discretionary income shrinks. The industry spent years on getting consumers interested in video games, and that's great when the economy is running smoothly. Now that times are tougher and consumers are looking to spend less, forcibly trying to remove used games makes the industry look bad.

Digital distribution isn't the cure-all that publishers want it to be, either... unless the industry wants to actively limit the numbers of games that consumers buy. Limited hard drive sizes, bandwidth caps, and limited availability of high-speed internet connections all stand in the way of this digital future that the industry seems to want so badly. Games become more expensive this way as consumers need to watch their bandwidth and may need to upgrade speeds (if they can) so that downloads don't take overnight periods to complete. For consumers who don't have these options, they're all but taken out of the market, leading to lost revenue. All of this is worth the lowered overhead of eliminating physical media-- and, in the process, stabbing at the heart of the used game market?

No, it really isn't.

I invite Obsidan Entertainment to stab away. When the mission is complete and the industry takes a turn for the worse over something that's PERCEIVED-- and not proven-- to be a problem, remind me to not grieve over the loss of revenue and jobs.

Monday Quickie: Not (Just) For You

Peter Skerritt Jr — Mon, 12 Dec 2011 18:07:00 GMT

It's commonplace to complain about SpikeTV's Video Game Awards. I'm not a big fan of the annual event myself, as it really doesn't have much appeal for me. The presentation seems aimed at a different audience, the awards are usually debatable, and the trailers are hit-or-miss. In short, the VGAs are not for me.

After reading some angry reactions to the VGAs over the weekend, I've come to realize that it's perfectly acceptable for the awards show to not be for me. The show may not be for you, either, and it's time to come to grips with this reality. I'll grant that the stereotypical writing and humor should probably be adjusted, but a lot of the show's content is a vehicle to get the medium out to a larger audience.

The landscape of the gaming community has changed. Far more people play video games now than we've ever seen. Video games have gone from a pastime for kids back in the late 1980s and early 1990s to a full-blown industry that generates billions of dollars each year. With this increase in gaming consumers, gaming habits and preferences diversify and change. It's no longer viable for the industry to play solely to its core gaming audience. They're certainly important, but so are the other, more casual consumers who drop millions of dollars themselves every year. For these consumers, who are new to gaming, Call of Duty and Angry Birds are the new Mario and Zelda.

The trick is to take the good and accept the bad. If nothing else, the VGAs have been a great method of getting us ready for the next year in gaming. This year was no different. Tony Hawk's Pro Skater HD was a surprise, along with new footage of Mass Effect 3 and Bioshock Infinite... to name a few. We got to see Shigeru "I'm not retired yet" Miyamoto get recognized for his years of service in the industry, which was well-deserved. Yeah, there were teabagging and off-humor jokes in there... and, yeah, inviting voice talent like Mark Hamill and Tara Strong to the show and not even recognizing them was a poor move. These issues don't go unnoticed and everyone outside of the show's production team has rightly criticized them.

It's OK to be critical of the VGAs, but don't make the mistake of putting yourself and what you want or expect ahead of the big picture. If the show bothers you that much, do what I did: Don't watch it and, instead, catch up on the good stuff when it's all over. I got what I wanted out of the experience just the same, and without all of the lowbrow stuff.

Take Five: November 2011 NPD Observations

Peter Skerritt Jr — Mon, 12 Dec 2011 06:16:00 GMT

Now that we've had a weekend to digest the NPD data for November, it's time to talk about some observations that I took from the numbers. I put together full data and analysis over at KmartGamer, but wanted to do something special here.

1. Sony Surprise: Going into the release of the numbers last week, there were indicators that Sony might come up short for November. Unlike Nintendo and Microsoft, Sony had been mum on sales data for Black Friday week. There was uncertainty that Uncharted 3 would move hardware. Lots of sales momentum looked to be going Microsoft's way thanks to Modern Warfare 3. These indicators proved false as Sony racked up 900,000 PlayStation 3 units sold for November, which was a 70% increase over last November-- and the best YOY improvement for any platform. Sony should be happy with those gains. What's even more noteworthy is that Sony's YOY performance over the last few months has been quite impressive. Yes, Microsoft has dominated in terms of units sold, but the PlayStation 3 has been outperforming its 2010 sales in the months that matter most. We'll see if this carries over to December.

2. Nintend'OH!: For the first time in this console generation, Nintendo found itself residing in the basement of the hardware sales rankings. While the Wii made a bit of a comeback as compared to recent months, moving 860,000 units, it was still a 32% decline over last year. As for the 3DS, while defenders are quick to point out that sales are pacing better than the DS in its first year, 795,000 units isn't overly impressive. Between a fairly attractive price point and the release of a new Mario game, it's fair to argue that sales should have been better. The perceived weakness also points to a potential shift in the portable gaming marketplace to iOS devices and tablets, which are multi-purpose and boast cheaper games. It's still possible that the 3DS will sell better in December, with the release of Mario Kart 7, but it's equally possible that Nintendo's run of dominance-- and the run of dominance for dedicated portable hardware for gaming-- may be at an end.

3. Microsoft Millions: Take a moment to think about how large a number that 1,700,000 is. That's how many new Xbox 360 units were sold in November, and it's nearly double the number of PlayStation 3 units that sold. It's also a number that's almost as many units sold as Wii and PlayStation 3 units sold COMBINED. Regardless of the reasons for Microsoft's continued success, it's impossible to ignore the dominance that the Xbox 360 has exerted over its competition in 2011. This latest set of hardware data is 2011 in a nutshell: Microsoft domination, Sony struggles to keep up, and Nintendo has lost its magic. While another month of over 1.5 million units isn't likely for the 360, another month of over 1 million units sold is pretty likely.

4. Ubisoft Ups and Downs: Sales of Assassin's Creed: Revelations were stronger than many predicted, moving about 1,260,000 units in the reporting period. That shows me that the Assassin's Creed fanbase is formidable and that UbiSoft is justified in releasing games in the series yearly. Only Modern Warfare 3, Skyrim, and Battlefield 3 outpaced it for the month, and all three games launched earlier than Revelations did. On the flip side for Ubisoft, Rayman Origins was a sales disaster. The platformer sold only 50,000 copies in November, and much of the blame can be given to Ubisoft for its failure. The launch window was too crowded for such a game, the marketing was just a fraction of what Ubisoft threw behind Revelations and Just Dance 3, and it kind of just appeared on store shelves with little fanfare. It's almost as if Ubisoft had no confidence in the game, despite raves from the gaming press. It's a shame at the very least, and a travesty at the worst.

5. Flat Sales Overall: As the U.S. economy continues to spin its wheels, console video game sales for November reflect the same. Overall, console video game sales were 0.5% LESS than last November, and that's a period when the economy was arguably in worse shape. The news isn't all bad; console video game software was up 15% over last year... and it's likely that sales of over 9 million copies of Modern Warfare 3 had at least something to do with it. It's tough to underperform in a month with so many quality titles available on store shelves. Hardware sales (-9%) and sales of accessories (-34%) were down considerably versus a year ago. These aren't bad trends, necessarily; as we approach the end of this console generation, price cuts chip away at sales totals and more consumers have already bought the consoles they want (also known as penetration). Strong software sales are a good sign, but with flagging hardware sales dollars, it's easy to predict that the next generation of consoles may be closer than we think.

That's Take Five this time around. Feel free to check out my Armchair Analysis piece on KmartGamer for more insight on last month's winners and losers.

It's NPD Day!

Peter Skerritt Jr — Thu, 08 Dec 2011 17:33:00 GMT

In just a few short hours from now, November's NPD sales data will be released to clients. A press release with more limited information will follow shortly afterwards. NPD day is exciting to analysts-- both professional (like Michael Pachter and Jesse Divnich) and aspiring ones like myself. Today is especially exciting because it's the a holiday period. This usually means big numbers and a but clearer picture of who's winning the retail battle.

Since we have a little bit of time, let's make some predictions, shall we?

Hardware:

Xbox 360
3DS
Wii
PlayStation 3
DS/DSi

I don't think that there's much of a question as to who will top the hardware chart. The Xbox 360 has been dominant in 2011, and with a solid slate of games and continued interest in Kinect, November won't be any different. It's understood that Modern Warfare 3-- which will be the month's best-selling title, going away-- is a multiplatform offering, but most consumers prefer the experience on the Xbox 360. Word of mouth to other consumers spreads, and you have a big sales month on your hands.

The biggest surprise to me is the potentially lukewarm showing for the PlayStation 3. Sony was, curiously, the only company of the "Big Three" not to share Black Friday sales data. That usually doesn't bode well when competition trumpets their own numbers in comparison. It could be that Sony will let its numbers speak for themselves; however, Sony rarely shares raw data outside of NPD client circles. This leads to extrapolation of numbers based on percentages.

The battle for 2nd place, therefore, falls between the 3DS and the Wii. The Wii is selling surprisingly well. The Legend of Zelda: Skyward Sword may be one reason, but a bigger reason may be the console's affordability and its relatively inexpensive software lineup. The 3DS has risen from the ashes somewhat over the past few months, and it's expected that the release of Super Mario Land 3D will fuel sales a bit more. I'm going with 3DS on a hunch, but it's just as likely that the Wii will take that spot.

Software:

Let's get the obvious out of the way: Modern Warfare 3 is going to dominate for November. Love it or hate it, it sold at a record pace and no other game will come close. The bigger question is what comes next. The safe bet seems to be that Skyrim will be finish in that second slot. Sales appeared to be strong, it came out early enough in the month to carry that strength for more than a few days, and buzz has been strong on it.

Other games to watch for in the Top 10:

Battlefield 3
Assassin's Creed: Revelations
Just Dance 3
Super Mario 3D Land
Uncharted 3

When the numbers hit, I'll be analyzing them and posting my Armchair Analysis column over at KmartGamer. If you're interested in reading more about them, I might posted an addendum with some extra analysis here. In the meantime, feel free to leave any comments or questions that you may have... or maybe even your own predictions!

Yellow Alert: THQ

Peter Skerritt Jr — Wed, 07 Dec 2011 20:19:00 GMT

I've been talking a lot about THQ on Twitter and Google+ lately, and the news hasn't been good.

Yes, Saints Row: The Third and WWE '12 has allegedly moved over a million units each this past month. Yes, a new UFC game is due next month. Yes, WWE and UFC fanbases seem to ensure that games with those licenses will never truly fail. Yes, a new South Park game is coming from THQ.

The problem is that investors, as a whole, don't believe in THQ anymore. THQ stock values plummeted to their lowest level in five years earlier on Wednesday ($1.37) before recovering somewhat. THQ stock has lost over 75% of its value in 2011 alone. Analyst Doug Creutz from Cowen & Company downgraded THQ stock to Neutral from Outperform this week, sending more shareholders for the exits.

It's not a given that THQ will close in the next 12-18 months, but I do believe that the chances of a possible buyout or takeover are increasing by the week. THQ has had some big misses in 2011 with uDraw and Red Faction. If Saints Row doesn't post fantastic numbers-- especially after the big marketing push and associated expenses-- then confidence will continue to fray. It makes sense for another publisher to swoop in and take over, reaping the rewards of current projects. In the worst-case scenario, other publishers or companies would likely swoop in to pick at the THQ carcass. Volition, as a developer, would probably be one of the biggest targets.

There's also a chance that nothing changes. We've seen this happen with Atari, whose stock was delisted in 2008 but still hangs on in the industry. Perhaps investor sentiment will turn more positive as Q4 ends and sales data shows improvement.

As of now, I think that it's wise to watch and see what happens over the next year. Personally, I think that a buyout or closure has a 40% chance of occurring in 2012. We will see.

The Future is Digital...

Peter Skerritt Jr — Mon, 05 Dec 2011 07:29:00 GMT

The following is a repost from my Consoleation blog.

We've been seeing a gradual shift in software sales in the last couple of years towards digital distribution. Full retail games have been available for the Xbox 360 and PlayStation 3 over that time and, although the digital library is but a fraction of the retail library, digital has been catching up. Now, a circulating rumor about software for the PlayStation Vita takes this one step further as the price structure may be significantly different for physical versus digital games.

As with any shift, there are positives and negatives to consider.

The biggest positive to the rumored Vita plan is the lower cost to the consumer. Digital games could be as much as 40% cheaper if consumers buy digitally than if they buy a physical copy. Leaving the expensive proprietary memory cards out of the equation for a moment, these savings would add up before long. Imagine paying $25 for a game that sells for $40 at GameStop or Walmart. If you bought six games in a year, that's a savings of $90. Granted, the savings would be offset by the exorbitant cost of the memory cards, but it could pay for itself within the first year if you buy enough games.

This move is long overdue and makes sense. Publishers can eliminate overhead like packaging and printing, plus they can eliminate the "middle man" that is the retail chain. Consumers would stand to gain from this cost-cutting measure more consistently in this system, as opposed to the on-demand retail titles that we've seen on the Xbox LIVE Marketplace and the PlayStation Store. In many cases, pricing for full retail titles mirrors MSRP (Manufacturer's Suggested Retail Price) in spite of sacrificing tangibles. It doesn't benefit a consumer to buy digitally in many cases under the current system... but the rumored Vita software pricing scheme most certainly provides a benefit. The loss of the physical product and tangibles is arguably more than offset by the lower price, which could be very important for staying competitive. If consumers can get past the high cost of the hardware and the necessary expense for a large memory card, the Vita can be perceived as a good value in the long run. That's provided, of course, that Sony and its third-party partners deliver consistent and quality software.

There are other positives to digitally downloaded software, which remain for the Vita. Not having to carry (and potentially misplace or damage) physical games makes the platform all the more portable. If consumers buy a large memory card, like the 32GB model, a fair number of games can follow the user wherever he or she goes. Cutting out retail also adds a level of convenience for some consumers. If you want to buy a new game at 3am, digital distribution allows this instead of being out of luck until the next day. Digital distribution eliminates shipping errors or damaged packages from Amazon or any other retailer, as well.

There are drawbacks to digital distribution, as well. Perhaps the biggest one of these is the inability to trade in, sell, or allow a friend to borrow a game. Once you buy a digitally distributed game, it's yours. Beat a game 100%? Your only recourse, aside from keeping it and occupying valuable storage space on your memory card, is to delete it. In most cases, you can re-download the game later if desired, but you won't be able to recoup anything. This is most problematic if you buy a game and wind up not liking it. Physical copies of games give consumers a few options in these cases. They can be sold to friends or online, can be traded in at GameStop or Best Buy, and listed at a tag sale. Even if you got $10 for a game that you spent $40 for and hated, you still get something back. Not so in digital distribution for consoles. All it could take is a few clunkers for some consumers to get cold feet.

Demos are usually cited by defenders of digital distribution as methods of ensuring that consumers don't buy "the wrong game", but these are unreliable in at least some cases. Demos can sometimes misrepresent what the actual game is like. One example of this was the demo for Brutal Legend back in 2009. The demo came across as a straight-up action game, with some vehicle sequences thrown in. The demo sold me, leading to a preorder and purchase. My delight turned sour quickly when the game added real-time strategy sequences, which I hated. Nowhere in the demo-- or in any pre-release articles on the game-- was the RTS content mentioned. I wound up trading the game in the next day. If I'd bought it digitally, I'd have been stuck with it and been much more angry about the misrepresentation.

The other major drawback to digital distribution is the limitation of the internet. Some people have great speeds and performance, where downloading even a 1GB game isn't an all-day affair. For many others, speed and reliability are problems that make digital distribution a futile practice. In cases like we see now with full retail games for the PS3 and Xbox 360, buying physical copies is the best solution since it's the same price in most cases and provides more timely gratification and experience. In the Vita's case, potentially, a tougher decision lies ahead for consumers like that. Are they willing to pay what amounts to a penalty for buying physical copies, or do they just ignore the Vita altogether based on its apparent online focus? Sony seems willing to risk alienating a certain segment of their prospective Vita consumer base this way, but it's arguably indicative of what's to come as the industry seems to take for granted that consumers have reliable high-speed connections... and may be willing to sacrifice a few users in the name of advancing their online strategies. This remains to be seen, of course.

If this pricing strategy rumor for Vita winds up being correct, the industry will be watching it very closely. If consumers buy into it and sales numbers support it enough, publishers may start talking to Sony and Microsoft about how it can be applied to the next generation of consoles. Although I'm not a proponent of killing physical media in favor of digital distribution, it's hard to argue against the business side of the decision. It's financially advantageous to the industry to cut back on physical copies and the overhead associated with the practice. Logistics would become easier and street dates would be easier to enforce. On the flip side, however, I'd be on the outside looking in as a consumer and would likely be forced out of a form of entertainment that I've enjoyed for so many years... and that's obviously not an outcome that I want to see take place.

Time will tell, of course, but I believe that we're about to see the future-- and it's digital.