Holiday season was down an estimated 20%
Not too long ago, videogames were being blamed for many of Hollywood’s woes: Young males were abandoning movies and TV for the PlayStation, and the fast-growing vidgame biz was grabbing discretionary income at studios’ expense.
But 2005 may have been the first year in which videogame execs looked jealously at “old Hollywood” — in a year when game sales were down 8%, a 5% decline in box office receipts looks pretty good.
Of particular concern: The holiday season, when vidgame companies typically generate the bulk of their sales, was down an estimated 20%.
No one expected 2005 to be a banner year. In what’s called the end of a “console cycle,” gamers saved their money in anticipation of upcoming titles on the just-released Xbox 360 and upcoming Sony PlayStation 3 and Nintendo Revolution.
But when Activision and Electronic Arts, two industry heavyweights that should have already had the end of a console cycle built into expectations, warned investors they were missing guidance for the fourth quarter, it became clear things are grim.
“The demand curve has shifted abruptly,” observed EA chief financial officer Warren Jenson.
The game biz is hopeful about 2006. Vidgame publishers have a few high-profile titles that were delayed from 2005 that could score big, including a new “Legend of Zelda” from Nintendo and EA’s “Godfather” game. There are also tentpole movie tie-ins like “Superman Returns” and “The Da Vinci Code.”
But primarily, game execs are counting on new shipments of the Xbox 360 and the debut of Sony’s PlayStation 3 and Nintendo’s Revolution consoles to boost gamer spending.
Just as the end of a console cycle always depresses sales, the start of a new one provides a jumpstart. The question for game publishers is whether compelling content will drive that up or push it lower than it should be.
Industryites have plenty of theories about the glum 2005 stats: Shipments of the new Xbox 360 and PlayStation Portable (PSP) are lower than expected; publishers had to cut prices due to competition; other digital devices like the iPod Video are taking customers’ dollars.
But there’s no denying that content has been a problem: 2005 hasn’t seen anything close to last year’s megahits “Halo 2” and “Grand Theft Auto: Vice City.” A number of high-profile launches, including Activision’s “True Crime: New York City” and Majesco’s “Advent Rising,” turned out to be duds.
As every studio exec knows, there’s never a clear reason why content isn’t compelling. But there’s a growing movement among gamers to blame the heavy hand of publishers, who exert so much control that they make major studios look positively hands-off.
That explains the growing number of independent game developers looking to make more innovative products with less corporate interference. It remains to be seen if that’s the kick in the pants the vidgame biz needs, or if all gamers really want is to get their hands on “Halo 3.”