Road to Recovery

It’s been a long and painful six days.

Apparently there was truth to what I had been told on my 40th birthday about the body breaking down and showing signs of age. Of course, these things had to wait until now to show up. First, I’d been dealing with some numbness in my right arm over the past 2-3 weeks, which is due to arthritis. I found out that arthritis runs strongly on both sides of my family. Then, on January 6th, I was rushed to the emergency room and diagnosed with a 3.5 millimeter kidney stone, which took a couple of days to pass and has wreaked havoc with my lower body. I didn’t eat for three days, and couldn’t keep anything in for five days.

As of today, January 13th, I’m still recovering from passing the stone. The wicked pain has been gone for a a couple of days, but I’m still fairly uncomfortable and not sleeping too well. All things considered, though, after what I went through a week ago, I’m in a better condition than I was.

I apologize for not being able to update over the past week. I’m hoping that I’ll be able to update a couple of times this coming week, which is my last before the next semester of school begins. I certainly have things to write about, including some new additions to my collection and some personal thoughts on December 2012 NPD results. I will be submitting a column to Popzara Press with more NPD detail in the next couple of days, too. I haven’t yet decided what my long-term course of action will be, in terms of analysis work.

I do appreciate the kind and thoughtful words that some of you have passed on either via comments or on Twitter. It really comes down to enjoying what I do. Perhaps I’m a bit thin-skinned when it comes to trolls, but again… after five years in this line of work, with no real future professional prospects, I’m at a point where I wonder if it’s worth the effort. It’s hard to do this kind of writing “for fun”, because it can be perceived as nonsense without some sort of credentialing or legitimate experience. When I was fortunate enough to have access to actual NPD data for a time, there was some legitimacy to what I was doing. I wasn’t fudging numbers, scrambling for leaks, and having to trust ranges and extrapolations like I do now. Prefacing discussion with “According to anonymous sources” and “Based on what I’ve heard” makes analysis a challenge. To me, proper analysis is based on raw data and trends. Otherwise, it’s a game of speculation and guesswork, with gut instinct guiding the way and a rather large margin of error.

The other thing to consider is that sales analysis is no longer a niche of the gaming press. Monthly sales data is broken down by other journalists now, and there’s a lot of chatter and noise in the field. My voice has gone from being fairly unique and pointed to becoming another in the cacophony of people who all think they know what’s going on. I have no expertise; I’ve relied on my retail background, my years of gaming experience and seeing trends first-hand for generations, and gut instinct. As much as I’ve wanted to be up there with the Pachters, Divniches, Sebastions, and Matthewses of the analysis arena… I’m not there. With so many others talking about analysis and data, I’ve lost much of my competitive edge.

I’ll be thinking on this some more over the next week or so. I’ll still be writing in some way, and Consoleation is going to see a fair amount of attention this year… provided my health doesn’t continue to deteriorate. I do have to consider how much school will affect my availability, once I settle back into a regular routine; this semester looks to be twice as difficult as the last, and it’s top priority as I continue to work towards my degree. The questions revolve more around what kinds of material that I’ll be working on and where I want to go with it.

I’m looking forward to getting back into the swing of things this week. It’s good to be back.

Armchair Analysis Extra: The GTA Release Conundrum

My latest Armchair Analysis column is live over at Popzara Press, covering Take-Two’s 2012 fiscal year earnings conference call. Topics included the financial effect of game release delays and the reasons why, the likely end of Take-Two’s license partnership with Major League Baseball, and a surprisingly strong defense of consoles in light of weakening sales in that sector. I really hope that you’ll give the piece a look if time allows.

The most interesting part of the call covers what was– and what wasn’t– said regarding Grand Theft Auto V.

A press release, containing Take-Two’s highlights and financial results from the 2012 fiscal year, was issued about 20 minutes prior to the earnings call. On the earnings release, Grand Theft Auto V is listed as a TBA (To Be Announced) release. Curiously, it’s listed in the 2013 fiscal year lineup despite the unknown date. If you take the release schedule to be chronological as it’s listed, then TBA could be inferred as March of 2013. I thought that to be a bit of a stretch before the call took place, given the announcement that XCOM: Enemy Unknown would hit retail in October and thus closing the window that the BioShock Infinite delay left open.

My opinion changed during the call, when revenue projections for the 2013 fiscal year were shared. Take-Two is expecting revenues for this fiscal year to be more than double what was taken in last year, to between $1.75 billion and $1.85 billion. That’s also more than Take-Two made in the 2011 fiscal year, when Red Dead Redemption was such a big success. Take-Two CFO Lainie Goldstein also said this during the call:

Our expected revenue range assumes the on-time release of the titles we have announced to date, as well as other titles yet to be announced for release during fiscal 2013. We expect the revenue breakdown from our labels to be roughly 60% from Rockstar and 40% from 2K.

Now, if you look at the earnings projection of $1.75 billion dollars, it’s estimated that over $1.05 billion is set to come from Rockstar. Even if Max Payne 3 sells 10 million units, that’s only about 60% of the projected revenue that Rockstar is expected to bring in during this fiscal year. Something else needs to be released to close that gap.

The plot thickened further when Eric Handler from MKM Partners asked about how projected guidance could be hit without Grand Theft Auto V. Take-Two Chairman and CEO Strauss Zelnick responded with this answer:

We’ve announced that Grand Theft Auto V is in full development. We haven’t announced a release date yet. What we have said about the year is that we have some titles that we expect to release that are not announced yet and we have a terrific slate coming up.

It’s a sidestep answer, as Zelnick obviously doesn’t want to tip his hand, but there is absolutely no certainty one way or another in this instance. There are two scenarios that come to mind. Either Grand Theft Auto V is the “unannounced” title or Rockstar has another project going that we don’t know much (if anything) about. What’s more, if you listen to the replay of the call (located via a link on this page) starting at the 39:53 mark, Zelnick’s tone in response to Handler’s question doesn’t lead you to believe that he’s denying anything. It didn’t sound like a denial to me, at all.

I am thinking that Grand Theft Auto V is on track for a release during this fiscal year, ending March 31, 2013. I believe that it’s possible that the game could ship during the fourth quarter of this calendar year, between October 1st and December 31st. I’d even go so far as to say that the October 23 date that Michael Pachter mentioned last month has a real shot at verifying. It makes some sense, given that it’s two weeks after another Take-Two release (XCOM: Enemy Unknown) and two weeks before November’s big guns like Halo 4, Call of Duty: Black Ops II, and the potential release of the WiiU. There’s some concern how sales of Assassin’s Creed III may affect Grand Theft Auto V, but given the strength of the Grand Theft Auto IP, UbiSoft could be the loser in this battle if a late October date materializes.

I’m not sure how much of a presence– if any– that Grand Theft Auto V has at E3, but news could come after the event. If after-hours trading and the spike of Take-Two stock is any indicator, then I believe that investors agree with me: Grand Theft Auto V will be here a lot sooner than many expected just a few weeks ago.

My E3 2012 Bombshell

I honestly thought that my trip to E3 last year was going to be my only trip.

The KmartGamer project folded, I moved from Arizona to Massachusetts and haven’t had a job since, and I had even contemplated putting my writer’s pen down for good. There’s been a lot of buzz surrounding E3 recently, which makes sense given that we’re just three weeks away. I was excited for those who were going, some of whom I’ve befriended on Twitter who are attending for the first time… but was OK with watching and reading stuff from home.

More recently, I’ve found my writing stroke again, thanks to a phone meeting with Nathan from Popzara Press a few weeks ago. He provided me with an opportunity to talk about industry sales and trends, and to bring Armchair Analysis to a new audience of readers. The terms of the opportunity were perfect for me, and I was given a lot of latitude to work at my own pace. I’ve been busy since then, thanks to that meeting and due to earnings season providing me with plenty to talk about. Once earnings season ends, E3 news would likely take over and I figured that I’d react to press events and other announcements as I have every year.

E3 was something that Nathan and I had talked about before. Attending E3 last year was possible because Kmart and Sears did everything; I wasn’t working enough to afford a trip to Los Angeles and I really didn’t (and still don’t) have many contacts “on the inside”, so those concerns were alleviated. All I really did was show up as expected, follow my itinerary, and put together some content. I told Nathan that I didn’t have any of these luxuries this year, and we tabled the discussion for awhile.

Last week, I was asked to submit my press credentials for E3. I really didn’t think anything of it, given how late in the game it was. I sent the information along, and thanked Nathan for thinking of me. It means a lot that someone that I’ve worked for over only a few weeks would have the confidence in me to think about sending me out to Los Angeles. The KmartGamer trip was more of a contest, even though it briefly became something bigger. This was different… and besides, I had no way to get out there or pay for anything, given my current state of unemployment. I had nothing to lose.

I received a rejection e-mail this afternoon. I had expected it, and forwarded it to Nathan with my gratitude. I am happy just having found what feels like a great opportunity to get back into writing, so this was less a disappointment and more a sign that we’d move on to other things. But then… things changed.

Quickly.

I received a second e-mail from E3 registration stating that my application had been approved, along with my confirmation barcode, while chatting with Nathan. He then dropped the biggest bombshell: Popzara Press is handling the travel and accommodations. I was– and still am– floored.  We’ll be working out final details this week, but, barring any unforeseen circumstances…

I am going to E3 once again.

There’s a lot of preparation that has to happen between then and now. I am unbelievably excited and honored to have this opportunity.  I’m going to be working with Nathan to hopefully set up some appointments for the event, and I’m looking forward to having a bit more time to network with some people out there. It’s going to be a different experience, and a big step for me professionally. I’ll be getting business cards ready to go, and I’m hoping to do a little more hands-on this year to go with more meetings and conversation.

I want to publicly thank Nathan and Popzara Press for having confidence in me and for making this happen. I’ll be providing the best coverage that I can, and learning a lot along the way. I look to reward that confidence by providing info and impressions from the show floor and giving readers my perspective on the controlled chaos that is E3. I’m also going to meet Armchair Analysis inspirations like Jesse Divnich, Michael Pachter, and Kevin Dent again this year– and that’s going to be a personal highlight for me.

Let the planning begin.

New Armchair Analysis is up!

I know that I just made the announcement, but my second piece is already live, as I talk a bit about some early NPD software projections for April from PiperJaffray.

Ordinarily, I don’t like to break down pre-NPD projections that much, but there’s some interesting stuff from the analyst firm that I really wanted to touch on. Between some quotes from the report and the surprise of the projected rankings, I saw enough to write an article about. I do have some reservation about PiperJaffray’s software rankings, but I do believe that we’re headed for another month of steep YOY declines in software– which goes hand-in-hand with what will likely be a similarly slow month for hardware.

The key content from the report is the assertion that consumers are starting to abandon console gaming and approach other forms of entertainment. I’ve been saying this for some time now, and seeing support of this opinion from an analyst firm adds a bit of weight to it. The exodus won’t result in a crash or anything dire like that. It’s easy to overreact to an unpopular opinion and defiantly presume that gaming will be bigger and better than ever, but sales trends and the current players in the overall entertainment market indicate a dimmer future.

It can be argued that smartphone and tablet games “aren’t really games”, or that they fail without a traditional controller option, but if you look at the steady growth for that market, it can’t be dismissed. Compare that growth with the downward trend that we’ve seen for the console gaming industry as a general rule for the past couple of years, and you have what can be termed as a market shift in place. When sales really ramped up for this console generation, iOS and Android weren’t the players that they are now. Combine that with consumers who have begun separating from the Wii as a entertainment platform, and you have a considerable number of consumers that are moving on. Perhaps they come back if Nintendo, Microsoft, or Sony can find the right formula when the next console generation starts. I don’t see that happening. I’d say that a 25-30% decline for console hardware sales sounds about right for the next console generation. It’s a steep dropoff, but it won’t be crushing. We’d still be looking at over 70 million consoles sold across the different platforms.

In any event, I hope that you’ll check out the piece and leave a comment, if you wish. I’m really looking forward to seeing what data we do get next week, and then putting a decent analysis together.

Armchair Analysis is back!

I’m proud to announce that Armchair Analysis is back!

The series is currently being published by Popzara Press, and I’m excited to be talking about console video game sales and industry observations once again. I was talked out of retirement a couple of weeks ago by the site’s owner, who has made my return to the keyboard easy and comfortable. There aren’t any timetables or quotas, allowing me to set my schedule and focus on content that I find significant. It’s a low-pressure opportunity, which is allowing me to ease back into writing. There’s hope that I may do a few reviews for the site as well, but that’s still in the planning stages.

I hope that you’ll check out my work over there. To me, it’s very gratifying to know that people are reading my work and I hope that it justifies the site’s decision to pursue me and publish my words.

I don’t know where this will lead. I honestly have no expectations. I know that many of my fellow writers are working very hard to land paying jobs. If my writing gets noticed, that’s great… but I’m not going to fear failure or “not making it”. I want to be a part of the group of writers that helps to generate the content that we all read. I know where my strength lies, and I’m hoping to follow it by continuing the Armchair Analysis series and creating a unique voice and perspective. I may not be the next Jesse Divnich or Michael Pachter, but I believe that I bring something valuable to the table.

When new pieces go up, I’ll be sure to mention them here… and don’t worry– Consoleation isn’t going anywhere. Thanks again to all of you for your support, your comments, and for taking the time to visit this site for the last four years.