Issue 26: Casual Friday - The Cost of Gaming

[The Escapist Staff]

Original Comment by: Munir

I've often thought about having a standard gaming platform made by different manufacturers, just like DVD players. It reminds me of how there's often two formats that battle it out for consumer attention before one becomes the mainstream eg Betamax/VHS and now HD-DVD/Blu-Ray.

I don't know if this model can translate to games becoming one unified model however. One thing is MS, Sony and Nintendo would rather all exist rather than fight to the death. And the other is that would any of those companies be willing to sell their technology to other manufacturers on the cheap and not get any return, for the sake of industry expansion?

These things make me think that we wont have cheap gaming any time soon. And I'm sad about that. I guess 3 platforms on a 5 year cycle is as standardised as its going to get. :s

 

[The Escapist Staff]

Original Comment by: Paul Jenkins

Nothing against PCs, btw, but there are a few things that make me doubt the next PC Revolution in games.

I remember dumping rolls of quarters into Street Fighter 2 as a youngster in the arcade. Then a friend of mine took me to this out of the way place where the same game was hooked up to a 48-inch monitor. I never played the stand up box again. People don't want to stare at their 19-inch monitor for hours on end. Put the same game in High-def in their living room, and you can't pull them loose. Size matters. (You may point out that video cards come standard with s-vid out jacks, which is fine, if you want your PC within 8 feet of your television).

And... controllers, anyone? Sorry to say so, but I can't use a controller on my PC, because I have yet to find one that is designed even half as well as the Gamecube. They either don't react at all, or they react like a sensitive thing on a sensitive day where someone said something to make it feel sensitive. Even if that issue got fixed, there are tons more. Intuitiveness, lack of feedback, complexity, lack of standardization... No. Just... no.

Comfort has already been mentioned, so I will just say that at one point I tried to put an easy chair in front of my computer desk... It didn't work out well.

Now, don't get me wrong... I love PC games, and I don't even play consoles any more. But I'm also not in the mass market. If you are interested in what the mass market has to say, just look at this list:

http://games.ign.com/topgames/

How far down the list do you have to go to find a PC title? Out of 100, what percent are PC games?

In the future, Microsoft wants to tie our PCs into every aspect of our life. Gates has talked about monitors embedded in walls and countertops, about your entire living space being a single PC... when that happens, sure, PC gaming will be the next big thing. Until then, I fear the world can't get enough of proprietary consoles.

 

[The Escapist Staff]

Original Comment by: Steven Rokiski
http://members.gamedev.net/SteevR/
Gametap [http://www.gametap.com/] is the first service I've seen that offers a bevy of older classics and manages in some way to compensate the copyright holders. It requires, of course, a PC and an Internet connection.

The desire to play older classics that they've only heard tales of is there amongst many of my non-hardcore segment friends and aquaintences. The need to have a broadband internet connection and a PC seems to be the biggest hurdle for these folks- some can't get a connection where they live, they can't afford it, or they chose to pay for a new computer rather than an internet connection; these individuals also spend more money on other entertainment (DVDs, tabletop games, comics) than anyone else I know of. Entry costs, or inability to do business via the internet, are the biggest factors here. But they do indeed want to be digital gamers!

These conditions are exacerbated in the youth demographic, which is the hypothetical future growth sector for the sale of these titles- and they are already deeply intertwined in the digital underground. Even if an individual lacks the drive, knowledge, or skills to find ROMs and the emulators, they'll mention a sudden need to play Super Mario Brothers 3 in a social setting, and a peer will hook them up.

The biggest possibility I see is for a service like Gametap delivered via XBox Live Arcade or something similar- especially if the Revolution/PS3/360 generation or the one after it manages to deliver the right sort of convergence that many individuals seem to seek. The problem here is the fracturing of the market- Nintendo of course wants it's classics exclusive to the revolution, copyright issues on licensed titles like superhero games will likely keep those off of the services, etc. The non-hardcore market will have no patience for such greed, and either choose one set of titles, or avoid it altogether.

Something along the lines of the vaporware Phantom console, which worms its way into the home via cable or satellite provider, would probably be optimal for distribution of older titles (lets face it, sane retailers won't stock it if it doesn't sell through quick, and we don't have and "Borders Books, Music, Movies, and Games" stores yet). Payment is built in (charges are added to your monthly bill), and the hardware could be integrated with the decoder box. If the development platform is easy and open, it would encourage ports and/or emulations of older games from anyone who had the rights to distribute. This would stand an even better chance of succeeding if the hardware specifications were open and/or SDKs were cheap/easy to aquire ala 3DO.

As for the technical difficulties in getting older PC titles to work on modern hardware, I will point out that commericial PC emulation utilities like WINE [http://www.vmware.com/] make it possible to emulate an older Windows PC and it's software on modern hardware. Cost, of course, has been an issue with the commercial solutions; the Free Software available to do the job has some usability issues. But it is possible, and I do this regularly.

 

[The Escapist Staff]

Original Comment by: Khurram Ahmed

I thought the article had potential out of the gates, but it ignored some things vital in its analysis. The biggest chasm separating video games from the mainstream is accessibility. The second is the low buy-in not in monetary terms, but in a temporal ones.

We can all say books are a popular medium, but there is a reason why JK Rowling has been outselling Immanuel Kant these last few years.

Why should someone who has an interest in fly-fishing sit down with an Xbox 360 controller to simulate the experience for her? She shouldn't. The Xbox 360 cannot simulate the fishing experience.

Gran Turismo sells cars, and the Madden series has its hardcore fanbase. For people looking for an entry point into the hobby, they need to see something that fulfills an interest in an accessible way. You can't point to an analog stick andtell them to pretend that the stick is their upper body, and they need to rock it back to rell in a catch. For an avid fisherman, that cannot complete an illusion. The market will not grow.

When someone watches a movie, in a cinema or on DVD, they only need to sit and watch. That's it. If they can manage to do that, they can enjoy the precisely the same experience as everyone else who decided to turn on their players with a similar disc inside. Everyone sitting in the cinema sees the exact same thing. That consumer sees exactly what Pauline Kael and Roger Ebert, renowned critics, see. Within two hours (or however long the film is), the experience comes to a close and it can be discussed in a variety of different conceptual frameworks.

Video games are not designed with that purpose. You are not supposed to have the exact same experience as every other player. This is why I haven't ever been able to score an A grade in any level of Ikaruga.

I hope to see these considerations expounded in detail by The Escapist at some point.

 

[The Escapist Staff]

Original Comment by: Slartibartfast

I just thought I would pop in an interesting footnote in the history of gaming: these things are impossible to find (I'm not 100% certain they ever existed) but I remember Creative Labs coming out with (or at least announcing) the "3DO Blaster." It was an ISA (for you n00bs out there, ISA was the standard expansion type before PCI came out) card that let you play 3DO games on your pc. While that seems like a cool idea, you know that none of the major console manufacturers would come out with a similar product, because they would make very little money off of them compared to the full console. However, this would be agreat way to preserve the history of games (Sega might even make money if they came out with a similar product to play Saturn CD's on a PC).

 

[The Escapist Staff]

Original Comment by: Ferrous Buller
http://ferrousbuller.1up.com
"Had it worked, all modern-day home theaters might have an integrated gaming system. They don't, but someday they will."

Except you forgot one of the main reasons why the 3DO failed in the first place: the hardware cost too freakin' much. The usual console economic dynamic is: sell the hardware at a loss, make money off the games; make the cost of entry as low as possible to get your console into as many hands as possible. By licensing out the hardware, 3DO forced the HW manufacturers to sell their 3DO machines for profit - it's the only way they made money, since they saw nothing from game royalties, IIRC - which turned out to be far too rich for the average gamer's blood. Trip tried to reinvent the economics of consoles, only what he came up with was worse: he set the barrier to entry far too high.

Furthermore, someone's already released a DVD player with an "integrated" gaming system built-in: the Nuon. You'll notice it didn't exactly set the gaming world on fire. We can speculate endlessly as to why it failed, but it definitely failed - and that's gonna make any company wary of a similar push, much less getting enough companies to incorporate such functionality into their DVD players to make it ubiquitous.

It becomes a chicken-and-the-egg dilemma: buyers won't see a Nuon-esque DVD player as an incentive unless it has a sizable library of good games and/or a low enough marginal cost over a regular DVD player; manufacturers won't see any incentive to making "Nuon Mk II" players if it's not considered a plus by consumers (esp. if they make nothing off the game sales themselves); and game developers have no incentive to develop games for it until it has a large enough installed base.

True, if we reach the stage where built-in gaming HW is a relatively low-cost addition to a DVD player, it may make a resurgence. But as long as the gaming industry and game buyers are so technophilic - so obsessed with the next sleek fast shinier piece of hardware and the super-pretty software to go with it - it's not gonna happen. Incorporating, say, PS1 functionality into every DVD player on the planet should be trivially inexpensive by now - but who wants to play PS1 games anymore?

Movies have made huge leaps in the technology used for special effects, but all that money is spent on the production side of things; it doesn't have to affect ticket or DVD prices at all. With videogames, the price of technological advancement is in both the hardware and the software: just when the current generation of consoles is super-cheap to make and have a large library of quality budget titles, the next wave is on the block, upping the performance bar and resetting prices to their early-adopter levels.

I do agree that for gaming to be as ubiquitous as movies, prices have to be as low as possible to attract as many buyers as possible: $15 is a far easier impulse buy than $50 or $60. And it is a damn shame that classic games can be so hard to find and so hard to play because of technological obsolescence. [As a longtime LD buyer, the arrival of DVDs was bittersweet.] But the system feels so set in its economic ways, I've yet to see a realistic proposal for an alternative. I remain hopeful, however.

 

[The Escapist Staff]

Original Comment by: Ferrous Buller
http://ferrousbuller.1up.com
As for PCs: from an economic perspective, they're not ideal as game machines. The average PC with a decent videocard costs far more than a console; the cycle of HW obsolenscence is both faster and continual compared to consoles (a good console will last 4 or 5 years and play every game ever released for it - good luck finding a 4-year-old PC which runs the Sims 2 or Doom 3 well!); SW & HW compatibility is a nightmare for both developers and gamers; and good luck running old DOS - or even some Win9x - games without a hitch on your WinXP box!

Ironically, the emergence of the high-def era of console gaming erodes some of console games' traditional price advantage, since taking full advantage of an Xbox 360 or PS3's graphics capabilities will require a good HDTV to go with them, which ain't cheap (yet). But one of a console's main advantages is it can be hooked into someone's existing home-theater setup - regardless of how crappy that setup is - and almost everyone owns at least one TV.

PCs are pretty ubiquitous these days, but dedicated gaming PCs have a sliver of the market compared to consoles. So-called "casual" PC games can penetrate the market easily, because anyone can play them; but "serious" games, with hefty HW requirements, are automatically at a disadvantage, because the installed base able to play them is so much smaller. Obviously, there are still blockbuster successes on the PC, but they command a relatively slim percentage of total game sales.

Hey, I love PC gaming - I have since the days of my TI-99/4A and Apple IIc, when the IBM PC was just a clunky box at the office. But I'm not under any illusions that it will displace consoles any time soon. Being a PC gamer in a console world is kinda like being a ham radio operator in a world jam-packed with cell phones...

 

[The Escapist Staff]

Original Comment by: Slartibartfast

I just wanted to point out that selling consoles at a loss is a fairly new phenomenon, I do believe that the PS1 in the United States of America was the first console to be sold at a loss.

http://www.actsofgord.com/Proclamations/chapter02.html

Not the most, uh, academic resource but I would bet it's true. Due to being at work my 'net is very limited.

Also, props to the TI-99/4a, I grew up on that thing

 

[The Escapist Staff]

Original Comment by: KD
http://www.teamunited.com
Since when can a IT write a good article?

I've noticed an interesting trend in the cell phone world: Old games can still make money. I recently spent $5 for Gauntlet on my cell phone and it's been a ton of fun. Perhaps cell phones will become our 'classic' gaming platforms?

If they build it they will come. Package a NES with downloadable content into by DVD player? You know I'll be buying that.

 

[The Escapist Staff]

Original Comment by: Ferrous Buller
http://ferrousbuller.1up.com
"I just wanted to point out that selling consoles at a loss is a fairly new phenomenon, I do believe that the PS1 in the United States of America was the first console to be sold at a loss."

Considering the PS1 & Saturn are over a decade old now, I don't consider them "fairly new" anymore. And it depends on how you define "loss," I suppose, since you have to factor in not only the cost of manufacturing, but also the cost of R&D. They also want to sell the base hardware as cheaply as possible, to get it into as many hands as possible. That's another reason why the real moneymakers aren't the hardware itself, it's the software (and accessories).

In retrospect, I realize I meant "at an initial loss:" the console hardware does get cheaper to manufacture over time, obviously, and should eventually break even if the manufacturer sells enough, I think. "Gord" offers little in the way of sources or numbers; his proclamations are no more or less plausible than mine, because neither of us offers much in the way of actual proof for our rantings.

So perhaps the more accurate way to put it is: console manufacturers spend a hell of a lot of money before the first unit even hits store shelves - on R&D, marketing, and manufacturing - and they have to sell a lot of HW & SW before they recoup those expenses, much less start making a profit. MS has, I believe, spent approximately eleventy gazillion dollars on the Xbox 360 at this point; it's going to be quite a while before their books are in the black on that investment.

"Also, props to the TI-99/4a, I grew up on that thing "

"Tunnels of Doom" pretty well defined my RPG expectations for ages to come.

 

[The Escapist Staff]

Original Comment by: Mark

It's possible to sell hardware at a profit and still make it into a capable machine. Stick a permanent storage medium on a souped-up Gamecube (even at the $100 price point, the Gamecube is still sold at a profit), give it DVD functionality, and sell it at a profit to non-gamers with a wide variety of inexpensive and easily available software through online connectivity.

Wait, that's just a Revolution, isn't it?

If you take such a platform, and then sell third parties licenses to the online service, then consumers will have competitive access to a broad range of games, and the original manufacturer will be left with an exclusive and more powerful platform (one with unique features that it didn't license away) in order to continue driving its own sales.





Handhelds are also going to be an excellent point of entry. It costs far less to make excellent graphics on a tiny screen than on a big one, so the technophile market won't be as much of a hindrance; in addition, the best handheld games provide the sort of accessible, low-entry-point games that are necessary to appeal to casual players, and can get away with it without having to sacrifice the approval of the hardcore crowd.

 

[The Escapist Staff]

Original Comment by: Ferrous Buller
http://ferrousbuller.1up.com
"It's possible to sell hardware at a profit and still make it into a capable machine."

Again, it depends on how you define profit and loss: if you focus solely on manufacturing costs, then yes, you can; but once you factor in R&D and marketing - i.e., the total costs associated with bringing a console to market - then you have to sell a lot of consoles before you show a net profit.

Unfortunately, all the console makers are frustratingly vague about such details of their operations, so it's difficult to do any kind of indepth analysis. All you know for sure is (A) they spent a lot of money bringing their console to market, so (B) they need to sell a lot of stuff before they show a net profit.

"Wait, that's just a Revolution, isn't it?"

That certainly seems to be Nintendo's thinking, yes.

Every console maker has the same major hurdle to overcome: achieving critical mass. You need to get enough consoles into enough hands to convince developers your system is worth supporting, which leads to a large software library, which leads to sustainable sales. Pretty much what it boils down to for everyone.

"Handhelds are also going to be an excellent point of entry."

Apples and oranges: the dynamics of the portable gaming market are quite different from the stationary-console market. What people expect of portable games is quite different from what we expect from consoles. The major similarity is the need for a critical mass of systems to be sold.

Which is to say: you're right, but it doesn't directly apply to what Jason Smith was originally talking about.

 

[The Escapist Staff]

Original Comment by: Slartibartfast

The reason that handhelds are a good point of entry is largely because of dev. costs. Weaker hardware + lower expectations = cheaper to make games. I'm not sure what you mean, Mark, by saying it's easier to make pretty graphics on a small screen. If I read it literally that's an odd statement to make, because you can obviously plug an xbox into a 9" tv and it works the same as running it on a 50" tv.

Ferrous:

Well, ok maybe "fairly new" isn't quite accurate I think that when a console is considered "profitable" it's usually simply referring to manufacturing costs. Your point about R+D is a good one, though I can imagine it would be very difficult to measure. You would have to consider overall R+D costs, and then figure out how many consoles would need to be sold at what price to cover manufacturing plus R+D costs. I always thought the big money maker for hardware manufacturers was liscensing from the games.

 

[The Escapist Staff]

Original Comment by: Slartibartfast

Forgot to mention:

We didn't have Tunnels of Doom, but still had quite a large selection. Some of my favorties were Zero Zap, Hopper and Blasto It really says something when my friends and I usually would play gamecube games together but had more fun playing Blasto.

 

[The Escapist Staff]

Original Comment by: Arlo

Excellent little extra this week. Has the Contrarian's website died? He needs a WalMart sized ISP.

 

[The Escapist Staff]

Original Comment by: mayzie

Here is my viewpoint gained from looking at my friends with kids, most of which are under the age of 10. It all seems to work on the "cool" factor. In my day your biggest dream was to have a game system where you could play maybe outrun or street fighter II or some other great game from the arcade.
This dream became reality in the 90's for me and a great time was had by me and all my mates playing long sessions being ken and ryu throwing fireballs at each other etc.
The other day however we were minding some kids and they were all busy trying to play gun on ps2 so me and my friend dusted off the ps1 and the big chunky arcade style controllers. We were having tons of "nostalgic" fun trying to do the old moves and this was cool for us but try and teach the little ones who call tekken3 ancient and uncool and you are kidding yourself. The reason why they sit and gather dust is that it is ps1 and ps2 exists, when ps3 comes out ps2 will look old because it cant do what ps3 does and this was always my biggest problems with consoles in that you cant upgrade them to the next generation.
Whilst saying this though it can go the other way because most of my friends dont have pcs for gaming becauise you can never stop upgrading( it is stupid how much I have spent on graphics cards and the like trying to achieve that level playing field)

 

[The Escapist Staff]

Original Comment by: Ferrous Buller
http://ferrousbuller.1up.com
It belatedly occurs to me: there's already a nigh-ubiquitous DVD player which also doubles as a game machine.

It's called a PS2.

Currently, a PSTwo costs $150: way more than a basic progressive-scan DVD player, but I fully expect it to drop to $100 or less when the PS3 finally rolls into town, making it much closer in price to a regular DVD player. Obviously, the PS2 is pretty far behind the tech curve at this point - but so will any low-cost game machine as Jason Smith envisions. So it'll have a low price and a reasonable level of tech behind it.

Last figure I saw was that there were 80 million PS2s sold world-wide. I wouldn't be too surprised if they reached 100+M or more at some point. That's a pretty big installed base. Presuming the PS3 maintains perfect backwards compatibility with PS2 titles, it gives developers an incentive to continue developing low-cost games for the PS2 into the next generation.

What the PS2 lacks is a compelling online digital distribution system and an ubiquitous offline storage mechanism (i.e., hard drive or other mass storage device). That can be invented, of course - the question is will it. Does anyone have the incentive to do so? I doubt it - Sony's clearly investing its resources in the PS3 (and it doesn't have a robust network backbone a la Xbox Live either, AFAIK) - and I don't know who would step in to do it for them.

Nevertheless, a post-PS3 PS2 would have some major factors in its favor: a large intalled base, low-cost base hardware, plenty of experienced developers, and a massive software library. If anything has a shot at making Jason's scheme work in the near future (apart from the Revolution, which is...well, we'll see), it's this.

Doubt anyone else is reading this thread at this point, but I felt like getting that off my chest.