Mon 30 May 2005
True, video games are a hit driven business. Just like movies, books, music, etc. It is really hard to predict what will turn out to be a hit before its released - such is the nature of hit driven markets…
Coincidentally, I ran a 2-hour workshop at E3 on how to determine the hit-potential of a game, how to support original IP, how publishers manage risk, etc. (Notes from which I hope to post in the near future.) It became pretty evident that a lot of future decisions are made on past sales data - as many developers already know. And, aside from focus groups, there’s just not a lot of tools in the predict-a-hit toolbox. This is one of the major contributing factors to publishers’ collective risk aversion (ie, it becomes a real gamble to bet a $20million production budget on something you have no real ability to predict is going to sell well).
Anyway, that’s context for the fact that, more than ever, I’ve heard publishers say something to the effect of “I regret not signing that game”. In chatting with several publisher folks at this year’s E3, conversation invariably turned to what cool games were being shown. This, in many cases, has led to publishers admitting that they “had a chance” to sign a given game some time ago, but that they just didn’t think it had potential. But, under the bright lights of E3 (and many more months of development), now it appeared that said game had potential.
I got into that kind of discussion a lot.
There’s something deeper going on here. Is it a question of tools to predict hits? Is the fun factor simply too elusive? Or, are the wrong people making the decisions?
May 30th, 2005 at 1:43 pm
“There’s something deeper going on here. Is it a question of tools to predict hits? Is the fun factor simply too elusive? Or, are the wrong people making the decisions?”
Oo, I’m so tempted to say it’s the latter. Realistically though, I imagine it’s a thankless and difficult job to predict hits in the early stages of development. It must take a particularly delicate mix of industry knowledge, social awareness, gut instinct, imagination, and faith to predict a hit.
Comparatively, Hollywood has it pretty easy. If you get pitched a script you like, you have a huge talent pool you can try to attach to the product. In the game industry, the pitchers _are_ the talent pool. If they’re an unknown quantity (or a known quantity that’s branching out to new game styles/types) it must seem overwhelmingly risky to sign them.
May 31st, 2005 at 1:52 pm
Well, Jason, I had this discussion with you at E3. You told me game publishers only make financing decisions based on hits. Yet, that’s self-defeating. Not everything was a hit at one point. The first Star Wars opened in only 43 theaters.
The key, as I was saying, is to research more about what gamers are like and what their ambitions and dreams are, as we do at our firm and as we did in our book, Got Game (www.gotgamebook.com). We found stuff about gamers that no one else found — like how they’ll be excellent business leaders in due time.
So, if anyone is interested in finding out more about our data, please email me. We’ve got some new data cooking that I’m only beginning to get to after the madness of E3 and Memorial Day weekend…
adam
June 11th, 2005 at 5:44 am
Quant shops like http://www.boxofficemojo.com for theatrical releases organize sales data and perform first level analysis and enable financial decision makers and their financial analysts to analyze the data futher to see what can be reasonly expected, especially when it comes to marketing expenditures.
Thus, perhaps the industry need something like this. Perhaps if publishers collectively make their sale trends a bit more public, someone smart and outside the subjective halls will be able to piece together the info to provide better forecast and better risk analysis.
We’re probably still a long way off before we can quantify the fun factor, but at least we can quantify and minimize the “no twinkie” situations.