DICE 2012: Analysts agree publishers broken, not the system

The annual DICE summit got started with a debate that struck to the foundation of the video game industry. "Is the publishing model broken?" asked the first debate in the Hot Topics panel. Analyst Michael Pachter started the case for it being broken by pointing to the recent woes of THQ and its inability to be a successful business on $800 million in revenue. In such an environment, Pachter suggests that the end game could see the field reduced to only a couple of players, like EA and Activision. He feels that outcome will be bad for the business, that we will be playing Call of Duty 37 at that rate, and that gamers will get shortchanged as new IP dwindles.

In counterpoint, Jesse Divinch of EEDAR said that publishers allow innovation by helping it achieve success on a larger scale. He cited Guitar Hero as an example of a game franchise that found widespread success when Activision picked it up after a couple of well-received but lower performing versions initially came out. The publisher became the conduit as he put it that pushes content out so that it can be experienced.

As a compromise, Divinch offered that maybe it's not the model that's broken, but rather the publishers themselves. Pachter said that he agreed on that point. Divinch went on to talk about the issue of new IP being stifled, saying that publishers adhere to the rule that new IP isn't released late in the cycle because it isn't what the consumer wants. Pachter turned on that point, suggesting that publishers need to take a page from Steve Jobs' strategy and have the vision to tell gamers what they want.

Whether the model or the publishers, the contrast Divinch made between the list of publishers who've gone out of business over the past few years--from Acclaim to Midway and many more in between--to the lack of newcomers made it clear that the situation is tough, no matter who's to blame.