Max wrote:
CNNMoney
As the year ended, though, things were anything but rosy. Majesco (Research) last week announced dreadful fourth quarter and year-end numbers. Net revenue in 4Q 2005 (traditionally the biggest quarter of the year for game publishers) was just $4.6 million, compared to $45.3 million the previous year. Twenty percent of the company's staff was laid off.
Majesco had had enough. It announced plans to abandon the premium console market.
"As a result of the general weakness in the [video game] sector along with the rising costs of development and marketing next-generation games, we have concluded that Majesco's current resources do not allow us to effectively compete in the big budget console game marketplace," said Jesse Sutton, president of Majesco Entertainment, in a conference call.
Lets argue with a rather more modern article that also sources the industry analysts.
NPD: July game sales up 29 percent
Gloomy industry mood further evaporates as $386 million tally bests 2005 figures; software up by 22 percent, hardware 23 percent--both largely in part to the DS.
By Tor Thorsen, GameSpot
Posted Aug 11, 2006 10:01 pm EET
Today, NPD reported positive income for the game industry--income that yet again beat analysts' expectations. Total game revenue for the month was $684.6 million, up by 29 percent year over year--far past analysts' expectations. By contrast, July 2005 saw only $531.4 million in combined software, hardware, and accessory sales.
On the software front, July saw $386 million in revenue, an increase of 22 percent versus the year before. This was due mostly to robust sales of Electronic Arts' NCAA Football 07 and THQ's Cars. The increase came despite precipitous drops in software sales for two platforms. Xbox game sales fell 51 percent and Game Boy Advance sales toppled 25 percent, thanks to their successors, the Xbox 360 and Nintendo DS, stealing the limelight.
However, a heavily hyped platform also took a dive. Game sales for the PlayStation Portable slid 40 percent during the month, thanks to a dearth of compelling titles. By stark contrast, DS game sales rose 354 percent during the same period, boosted by still-strong sales of Brain Age: Train Your Brain in Minutes a Day and New Super Mario Bros.
The DS's rise was complemented by a software boost for an unusual suspect. Titles for the GameCube, which ranks third in the current-generation console race, saw an increase of 3 percent. That was nearly as much as PlayStation 2 game revenue, which was up by 5 percent year over year.
Hardware sales saw an increase of 23 percent, also beating expectations. Again, this was driven by surging sales of the Nintendo DS, which were up 358 percent versus July 2005. That bested both its sibling the GBA, which saw a 33 percent fall, and its rival the PSP, which fell 20 percent.
Besides the GC, current-generation console sales were also off during July. PlayStation 2 unit sales were down by 7 percent, while Xbox sales fell 91 percent for the month.
While startling, the decline in Xbox sales was in large part due to the popularity of the Xbox 360, which plays many of its forebear's games. Microsoft sold a total of 207,000 units during the month; so far, the console has sold 2.2 million units in the US alone. However, while impressive, the July Xbox 360 figures are a 26 percent decrease from June, despite high-profile releases such as Prey.
What do analysts read in their tea leaves now? Overall, they think the industry has nowhere to go but up come the all-important fall release season. "We still think that industry sentiment has bottomed and will continue to as we get closer to the new hardware launches from Nintendo and Sony," said UBS Global Equity Research's Michael Wallace, "Industry sales should be up again in September."
Wedbush Morgan Securities' Michael Pachter echoed his colleague. "We also think that many investors are skeptical about hardware unit sales and software attach rates for the new consoles, given the relatively high prices for both hardware and software," he said. "We think that those concerns will be alleviated once the Wii and PS3 launch, with hardware sell-outs and robust software sales expected in November and December." Pachter also singled out "innovative" games like Guitar Hero as titles that will sell well for months to come.
What industry issue?
Granted, it's an older article (Jan.,) it does show that the developers are feeling a crunch with game sales. So I don't see how allowing people to create their own games, and trade them on Xbox live, is going to be at all beneficial. I'm sure AAA titles won't feel the effect of allowing people to create their own games and play it, but other lesser known titles (Psychonauts, which was an awesome game btw) may feel it.
Why? Because someone didn't do enough reading. Lets lay out Microsofts plan again:
Free: You get free acess to the XNA express studio.
99$ a year: You get acess to the Creators Club, which will apprently offer forums, an ability to play Creations Club games on the Xbox360, and more support.
No where here are the games distributed to the general public
Spring 2007: Final version of XNA is released, chance of selling amateur games on Xbox live arcade/marketplace, no details.
Notice something? Theres a good 2/3 of a year where nothing importent happens, theres another good chance that the only thing this will do is move more revenue FROM retail games to Xbox Live arcade/marketplace, which is already a hot sector.
I may be just jumping to conclusions as we don't really know yet, and I'm all for making my own games and trading them. However, I am curious how developers feel and if they think this is going to create some small snowball effect in the way consumers purchase games.
Yes, you are jumping for conclusions, you know, maybe I'll just slide over from where I'm interning and ask some people in the industry how they feel about it.
