Barty’s Weblog

Relating to my last blog post on game prices, here’s an example of two game companies with different pricing strategies:

Electronic Arts New Release pricing:
Xbox 360: $99.95 – $119.95
PlayStation 3: $99.95 – $119.95
Nintendo Wii: $69.95
PC: $99.95
PS2: $49.95 – $79.95

EA Promotions: You can buy EA’s Christmas releases at “shot to bits” prices.

Atari New Release pricing:
Xbox 360: $109.95 – $139.95
PlayStation 3: $109.95 – $139.95
Nintendo Wii: $79.95 – $109.95
PC: $79.95 – $109.95
PS2: $69.95 – $89.95

Atari Promotions: None.

Electronic Arts are considerably more aggressive on the prices of the new generation console games (PS3, Xbox 360 and Wii) when compared to Atari. Both companies obviously have two very different pricing strategies in place here in New Zealand.

Who’s got the right strategy to survive the recession? EA or Atari?

As we’ve all heard times are pretty tough out there, but some local game companies have come up with a new strategy to get through the recession — they’re raising their prices.

Want some cool PlayStation 3 and Xbox 360 games for the bargain price of say… $140? Probably not. When was the last time games were 140 bucks? That’s more expensive than the Xbox 360 and PS3 launch prices. That’s more expensive than when games were incredibly expensive to make (and the console markets were tiny). You’d need to go back to the PS2 launch to see such “old skool” pricing madness.

With the Xbox 360 being three years old and the PlayStation 3 two… consumers actually expect prices to drop. Gamers are not idiots. Gamers are not crack addicts. We’re in a recession. Unemployment is climbing. Spending is falling. Hello? Gamers will not fork out 140 bucks en masse. They’re not going to fall for that shit.

The concern I see is that these high prices encourage local gamers to import directly from overseas — and eventually that “one-off” purchase will become a habit. Thanks to the Internet, the world is getting smaller. The retail prices in Asia are often far cheaper than NZ and consumers know this. When gamers can buy these same $140 games for less than we (i.e. Mighty Ape) can… something is broken.

High prices will lead to lower sales for both NZ retailers and distributors. Everyone loses (well everyone except for Nintendo – Wii game prices are looking even more attractive eh).

In my opinion, NZ distributors can’t afford to live in the dark ages for much longer. The local prices need to be sharpened — not increased. All things being equal, we’d much rather support the local games industry than import from overseas, however we’ll always do what’s best for our customers and our business. And if that means importing ourselves… we will.

The customer comes first right? We think so.

The NZ Herald has published an article in which Bill Hastings, the chief censor, wants to prosecute some parents over access to restricted video games.

Now, as a parent and a retailer of video games, I whole-heartedly agree with what Mr Hastings is hoping to achieve. But I believe his approach is possibly wrong. Prosecuting some parents (who may or may not be aware of their responsibilities) doesn’t seem right.

I’d suggest (again) that a lot of parents would be completely unaware that they are breaking the law when they allow their children to play R-rated video games. In my opinion, the government needs to educate parents before prosecuting them. They need to get some advertising campaigns in the mass media to educate parents on what their legal responsibilities are and how to monitor their children’s internet activities. This would be more effective than any law suit… and yes it would cost more. Give Bill Hastings an advertising budget.

Another concern I have, is that in the past, Internal Affairs have been very focused on packaged goods, yet its getting easier and easier to access R-rated games via the internet. Possibly the best way to enforce censorship over the internet, is to educate parents & caregivers. Parental censorship is getting more and more important by the minute (broken record syndrome is kicking in!).

Bill Hastings also wants to have all video games rated, which I believe would be a disaster for the local gaming industry.

Here’s why:

1. For starters, its costs $1450 to get a game classified — this will lead to higher prices & some games not being released (officially at least)
2. It takes at least two-four weeks to get a game classified – this will lead to slower release dates & more overseas buying
3. There’s a massive trade on Trademe that would need to be controlled (controlling this may lead to the cost of classifications rising further? The extra enforcement has to be funded somehow?)
4. It would be cheaper and faster to buy games from other countries via the web.

The obvious question I have is… will requiring a kids game to be rated a “G” help address the real problem? I can’t see how? Can you?

In my opinion, the local video game industry doesn’t need more regulation to fight against. It needs less. The industry is already struggling to compete with overseas imports and New Zealand is doing poorly compared to markets like Australia (we had an estimated 7% growth from 2008  vs 30% growth in Australia).

Personally a classification system similar to Australia may work. Across the Tasman, the distributors “submit” the rating — meaning its cheap and fast to execute. Implementing such a system, while retaining the strict classification of games likely to be R-rated, may well work.

But I believe expanding the current system to require official classification of all games will make the local game industry uncompetitive and the result would be more imports, more internet purchasing and an even greater reliance on parents.

The government needs to get educating. Not legislating. And definitely not prosecuting… yet.

There’s something that has been bugging me for a while. Each week the NZ Herald publishes their weekly Timeout Guide which covers new releases and news for Film, Music, Books and Television.

I’ve often wondered why don’t they include video games in this section?

While its nice that The Herald files gaming under their Technology section on their web site, perhaps it’s time that gaming was included in their weekly Timeout publication?

Not only would this mean that the Timeout publication would appeal to more people, but it also opens up avenues for more advertising revenue (todays guide includes a full page ad for a DVD release, a 1/3 page ad for a Film, the usual theatre ads and no music ads whatsoever).

Just how big is gaming getting? The Age posted a news article this week headlined: Video games thrash movies and DVDs

This article highlights that gaming is now a mainstream activity (as if the recent Oliver Newton-John ads weren’t enough of a hint). The article goes on to mention:…

“The video games industry is now double the size of the box office and more than 40 per cent larger than the movie disc industry in Australia, thanks to explosive growth in social games that allow the whole family to play.

The Interactive Entertainment Association of Australia (IEAA) today released figures showing games industry revenue was $1.96 billion in calendar year 2008, an increase of 47 per cent from the previous year.

Sony Computer Entertainment managing director Michael Ephraim said: “It’s clear now that the [games] industry is the nucleus of entertainment – it has come out of the bedroom, into the living room, and on to every kind of device, and we’re going to see another few years of considerable growth.”

Video games are no longer confined to the  bedroom. I believe its time the folks at The Herald get with the times. Video games thrash movies and DVDs…

Get gaming into the Timeout guide!

GPstore has evolved! Early this morning we launched our new web store… www.mightyape.co.nz

Check it out.

Over the years Massively Multi-player Online Role Playing Games have been all about fighting evil. Its the same formula — Good vs Bad. In a new environment, with new toys.

But this year we’re seeing a new kind of evil creeping into MMORPG’s… the pre-order pack! Developers of the online RPG are putting a huge emphasis on pre-sales… so they can hit the ground running. Now that hardly seems evil? Well no, its actually probably smart…

So where’s the evil? Well, Electronic Arts are bringing the new evil to MMORPG’s… they want you to pay for your pre-order pack. Now. Stores wanting stock of the Warhammer Collectors Edition are required to pay for the pre-order packs months before the game releases. Months before the packs are of any use to anyone.

This practice raises some interesting questions. Are retailers going to be funding the development of games in the future? How ethical is it to sell packs to customers, when they are of no use for three or four months? What happens when the release date slips (as they do)? What happens if the reviews suck? What if the game is canned altogether?

I believe both the retail trade and consumers should be very concerned with publishers forcing people to buy pre-order packs. It reeks of publishers sharing the development risks with consumers.

Why stop at MMORPG games? Publishers could start charging for “bonus” items in any game — months before its released. Scarey stuff. If this practice catches on… consumers will get burnt eventually.

In my opinion pre-order incentives should always be free. Taking consumers hostage with “bonus” content is not cool…

Softprint Interactive have today confirmed that they have gone into receivership. Apparently the gaming staff were told the news on Friday afternoon and given 30 minutes to gather their things and leave. SPI were the exclusive New Zealand distributors for both Nintendo and Activision — two of the biggest game publishers on the planet.

As a Softprint customer, we were rather surprised by the speed of the demise. Normally a business in financial difficulty would clear stock, sharpen prices and do everything they could to improve their cash flow. This would buy some time for overheads to be cut and the business be turned around. We didn’t see any of those normal signs… wham.

I’ve got to add … its another sad day for Nintendo in New Zealand.

Over the last 15 years Nintendo has gone from Roadshow to Monaco to Softprint to erm… now what? Nintendo has been distrubuted by some very good local distributors… and none of them have managed to make it work here. Nintendo’s reputation in the trade just took another battering. Is it time for Nintendo to show us how is supposed to be done? I think so. Now or never.

So where’s this leave Kiwi gamers? Well that’s the messy bit. Experience suggests it will be several months before the distribution is sorted out. Will Softprint keep trading? Will new distributors be needed? Does anyone actually want to distribute Nintendo here? Will the publishers open up NZ offices? Lots of big questions.

In the meantime, GPstore will have to resort to importing to satisfy the local demand. Not cool.

Even while trying to avoid the doom and gloom with my no-news diet… I found a recent report from the Administrators for Icon Digital Entertainment Ltd (the company behind the failed Sounds and Games Plus stores) and it makes for some interesting reading.

Icon Digital Entertainment was formed in September 2006 when a combination of Blockbuster and Games Plus stores were combined with the purchase of the (then-struggling) Sounds music stores for $12 million.

The Administrators report includes financials for the company and according to Icon’s Management Accounts, losses totalled $9,576,000 for the 14 Months to 31 October 2007.

The company commenced trading on 1st September 2006 and was instantly losing money. On average Icon Digital Entertainment lost over $700,000 with the exception of a tidy profit in December 06. Overall the margins looked reasonable, but sales on the other hand declined dramatically from $3.1 million in Sept 06 to $1.7 million in Sept 07. Ouch.

From the outside its difficult to know exactly what killed them, but overheads would have been very high (and somewhat difficult to reduce) and sales heading permanently south is a killer on its own.

One does have to wonder… just how much of the sales decline could be blamed on the internet? There is no doubt legal and illegal downloads have been hurting the music industry and online stores, like GPstore, have been quietly gobbling up market share in the entertainment area.

It’s also interesting that the administrators made no mention of the companies web sites in the report at all. As if they didn’t exist? Both the Sounds and Games Plus web stores have since been abandoned.

While Icon would be the first to admit that their web stores were pretty average, a quick-fire auction on Trademe or Zillion might have yielded some value for the creditors? Worth a shot?

More information about the Icon Digital Entertainment liquidation can be found on the now-defunct Sounds web site.

Worldwide, Nintendo can seem to do no wrong. Profits are soaring. Their share price is hitting record highs. Nintendo is on fire.

But here in New Zealand things are different — Nintendo seems to be floundering in New Zealand. Big time.

GPstore has always been a strong supporter of Nintendo products. Nintendo has, over the years, been the confined to the hard-core gaming niche which has suited us well. We’ve always punched above our weight for Nintendo and we probably sell more Nintendo than many of the mass merchants.

But, our sales from the last quarter show the Nintendo Wii has hit a wall. The Wi’s share of GPstore’s game sales for the quarter ended March were down 41% over the previous quarter. The Wii came in at sixth place — behind Sony’s PSP and even its own Nintendo DS. Given we’re probably preforming well above the general market… this is a real concern.

The Nintendo Wii, with its revolutionary game controller, lends itself brilliantly, to appeal to the mass market… to even reach people that PlayStation and Xbox can’t. People who aren’t even gamers.

But with Nintendo’s own premium releases now missing their street dates, the future is starting to look questionable. Mario Kart was due April 24th, but it’s gone AWOL. The local Nintendo distributors can’t provide a release date, yet the game was released in Australia two weeks ago.

Retailers and gamers must be wondering… what the heck is going on? I wish I knew.

Nintendo’s revolutionary Wii Fit is due May 8th, but I’d be surprised if it makes that date. So far there’s little hype, no press coverage and muted demand for this revolutionary “game”. There’s no doubt it is a very very cool product… but its already going to under-perform.

So, even though its not officially duck season until tomorrow, the question has to be asked… is Nintendo a dead duck in New Zealand? Is there room for only two console platforms in the NZ market?

We’re big Nintendo fans and we really do want to see it to do well here, so we certainly hope not. But the clock is ticking. What are your thoughts?

Gordon Copeland has come out this week saying he wants “Grand Auto Theft IV” to be banned (its Grand Theft Auto IV btw Gordon).

He was interviewed on 95BFM’s “The Wire” show this morning and I encourage you to listen to what this independent Member of Parliament has to say. There’s some scary stuff…

So lets take a quick look at some of Mr Copelands claims from his interview:

“Grand Auto Theft IV has got no redeeming features.”

Grand Theft Auto IV is rated the best game ever released by the critics. As Tim Neale from BFM mentioned, Rockstar expect to sell 6 million copies in the first week alone. What was the last book that sold 6 million copies at over $100 a pop? What was the last movie that grossed US$400 in its first week? There’s got to be some redeeming features for the game to be this BIG.

“We’re an already violent society and the last thing we need is a game like this to come in and to let people pretend to be… criminals.”

Would it be true that pretending to be a criminal… is better than actually being one?

“As human beings we become what we watch…”

If we become what we watch… then I’m going to become an All Black. And a ninja. This statement is idiocy. It’s more likely that the environment you are raised in determines the person you become. In fact, experts such as Philip Zimbardo suggest that while parenting, schooling, upbringing, genes etc all help determine who we are… its our environment and our immediate situation that actually tips people to commit crimes.

“I think its time and say No to this video… its a small word but we should use it more”

Thankfully saying “No” is still the job of the Chief Censor, Bill Hastings. Can you imagine Mr Copeland having a say on our censorship laws? Sounds like a good time to say “No”.

“I don’t believe any individual needs to spend valuable time watching such rubbish”

Spending time playing video games or watching movies is a freedom of choice. One which a lot of people do exercise. I’ve personally been playing video games for over 30 years… and I still haven’t morphed into something evil. Well… at least not in the real world.

“The very fact we make it R18 gives it an aura for kids…”

Most people suggest that calling for the game to be banned is adding to the so-called “aura”. I’m not. I’m going to suggest that with good parenting, this is a non-issue. Parents should keep an eye on their kids video gaming habits, as they should for the movies they watch, the music they listen to and the friends they hang out with.

“We may well find the murderer has been given a steady diet of porn and violence”

Supposing that a murderer had links with porn and violence is irresponsible. Trying to link this game to the murder of Marie Davis’s just seems wrong?

“Things like Grand Theft Auto IV is a simulator”

Video games are not simulators. Video games do not train you to do anything. So far I have not turned into a ninja, nor a pilot, nor a soccer player, nor a secret agent, a warlock, racing car driver or even a tennis player. Video games may improve your hand-eye co-ordination and even your problem solving skills… but train you to be something? Unfortunately not.

“Why take the risk?”

Well why stop at video games? Why not ban all adult material and take no risks? No porn? No violent movies? No violent books? How about those cigarettes? Ban alcohol? Ban cars? Dumbing down our whole world for the sake a few idiots would kinda suck? A lot?

“The police and parents in particular are saying the same thing”

Good parents have already banned their kids from watching or playing this game. Its R18 remember?

Dan Cheer, Editor in Chief of Gameplanet, was also interviewed by 95BFM. You can listen to Dans response to Mr Copeland here. Interesting stuff.

If there’s one thing Gordon does highlight… it’s that the MMP system can be very flawed at times. But thankfully, we can all say that we didn’t vote for this guy — he’s a list MP after all. Bring on the next election!