Consoleation: Wake Up!

It must be nice for prominent players in this industry to be so bullish. Despite recent downward trends in sales and despite the worst economy that the world has seen in generations, the video game industry is determined to think that this recession won’t affect them. We’ve seen resistance to price drops, a company actually raising prices for the re-release of a platform that’s been dead last for months, expansion of DLC and less content on actual game discs, and even the possibility (or threat?) of tacking on a paid subscription service to a popular FPS franchise.

Are you kidding me? Come on. Really?

Look around you, game companies. Look at the number of states with double-digit unemployment rates. Look at the number of foreclosures that are happening almost every day. Look at the renewed upswing in the cost of gasoline. Look at how some of the biggest companies in the United States are going belly up. In spite of government predictions and the usual spin… the reality is that we’re still in a recession, people. The amount of disposable income for the average person is gradually decreasing. Unlike we saw during the last console generation, when consumers were buying multiple consoles and had a larger amount of money to spend on entertainment, we’re seeing pullbacks now.

So, tell me… what makes you think that (allegedly) removing content from games in order to try and extend revenue via DLC is a beneficial idea? It wasn’t that long ago when developers would fill a DVD or CD to its limits with features and content. We got all of our extra costumes, bonus stages, and other stuff as part of a $50 package. Sure, there was no way to extend the life of the game via DLC then, but we still generally got more for our gaming dollar than we get in this generation. We never saw missions, gameplay modes, or extra costumes held out of games before… but we do now. Allegedly. Even in downloadable games, we’re seeing incomplete efforts that ask us for additional funds to unlock the rest of the game. (I’m looking at you, Taito.) I’ve said it before, and I’m going to reiterate it here: Downloadable content, despite a few bright spots, has been this generation’s epic failure. In many cases, it’s little more than a extra revenue stream for publishers which allows then to hold game content that we would have gotten for the standard price of admission five years ago hostage.

I know that I talked about price drops when I discussed May’s NPD figures, but it’s worth mentioning again since the issue of the poor economy and the gaming industry’s “out of touch” approach to the situation are at the epicenter of today’s entry. Nintendo’s NPD victory in May was a hollow one. Looking at the numbers for 2009 so far, Nintendo Wii sales are sliding southward– even if those numbers are still better than those of its competition in Microsoft and Sony. When decently-selling games like Wii Fit, EA Sports Active, and Punch-Out!! can’t move consoles, perhaps a change is in order. On Sony’s end, I can understand the potential damage from dropping the price on a console that they’re already losing money on, but poor installed userbase numbers are eventually going to cost Sony– especially in the third-party publisher field. Something has to be done to not only help spike sales of the PlayStation 3… but to also give the exciting 2009 exclusive releases a chance to succeed. A worse move for Sony was to price the PSP Go for $250, which is $80 more than the dominating competition in the Nintendo DSi. Yes, it’s got on-board memory now, and yes, you no longer need UMDs… but so what? Lastly, while Microsoft neither gained nor lost in May, you have to wonder whether the Xbox 360 has reached its maximum audience already. Aside from Halo 3: ODST (which I’ll get to shortly) and maybe Modern Warfare 2 (which isn’t an exclusive), Microsoft hasn’t yet shown much for 2009 that will possibly generate an upward trend in hardware sales. In all three cases, price drops of some sort make sense… but all three companies will argue that sales are fine and that consumers will come around in this challenging time. Right.

Finally, we come to the issue of game pricing. Just when you think that $60 was already tough enough to take, we get a blatant cash grab in Guitar Hero: Smash Hits and the potential of a $60 Halo 3 expansion disc in Halo 3: ODST. I know that I just talked about Smash Hits in my last entry, but it’s solid evidence of how publishers think that any game is worth full price– when a fair number of them most certainly are not. Bungie and Microsoft recently did an about-face when talking about ODST and the $60 price point, citing that the game is now much more than an expansion. Maybe the truth is that Microsoft knows that Halo fans are willing to pay $60 for a new game in the series, no matter what it is. Much like Activision knows with Guitar Hero– or Square-Enix knows with Final Fantasy– consumers will pay for the name, and not necessarily the game. It’s a dangerous assumption to make, however; especially in a recession, when games are harder to afford.

I understand completely that this is a business, and that all of these companies are out to make money. Price cuts in hardware and software or the revision of a cheap and easy revenue source in downloadable content aren’t easy choices to make. On the other hand, these companies need to stop turning a blind eye to the recession that’s going on around them. If you continue to raise prices or insist that price cuts are definitely not the answer, there is a growing risk that an industry that has grown in leaps and bounds over the last 14 years will regress back to the niche hobby that few would admit to and fewer would spend big money on. The need to not only attract new consumers, but to also retain ones that are still fresh into gaming, is paramount to the continued growth and success of this business that so many of us know and love.

Wake up, people, before it’s too late.