LATEST CHATTY HEADER

Enough with the decline in PC sales stuff. PC game sales are not in decline, they are just misunderstood. I know, I've watched it happen from the inside and it's time to break it down for the 'analysts' and game developers who have been persuaded by them (shame on you cliffyB).

The notion that PC game sales are trending down has been popularized by the biz folk at game companies. It's important to identify them as biz folk, you'll see why later. They believe this trend because they look at information collected by stat firms like NPD run by other biz folk. This is a simplification, but essentially what NPD reports is sales figures from store bought games. The game company biz folk use these sales figures to account for what has worked in the past in order to project about the future. In business, it's about predicting the future, not innovating it. If they can predict it, they can make the right investments.

The problem that has occured here is that PC designers are the opposite of PC biz folk. PC designers are (usually) about innovating the future, not predicting it. This is usually not a problem because the innovation is limited to the gameplay. However, 12 years ago they inadvertently innovated a business model. The word inadvertently is important because attention was not drawn to it. When UO (as an example) came out, the talk was about how it enabled people to play together in a persistent world. To a smaller degree people talked about how it curbed piracy. No one paid the right kind of attention to the fact we should track a new kind of sale...subscriptions. The right kind of attention means the right people didn't pay attention. Usually it is business people who innovate business models, but because they didn't do this one they didn't really see it in the right light. I have worked in the industry for a long time and I can personally attest that business people in many major game companies struggle to understand the business of MMOs and other strategies that go beyond simple game sales. If it isn't something they can research via their biz tools (things like NPD), then they can't understand it or work with it.

Flash forward...over time the PC market has innovated a number of new business models that have slipped past NPD for the same reasons as the MMO trend. The major missed business boats in gaming are subscriptions, micropayments, online distro and all the basic longtail business models from social engineering. All of this, has resulted in the NPD sales appearing to decline for PC gaming when in fact all what declined was the sales of PC games from game stores. On the incline was all this other stuff that NPD skipped over.

This miscalculation has been a boon for the smarter developers. For example Blizzard and their publisher have recently cited revenue in excess of 1b per year. It is this kind of announcement that in part finally made NPD decide to track subscriptions. Until this change, NPD was using business models over 10 years old. They still are to some degree...because there are now other new business models in the PC market. For example maybe in another 10 years they will find out the absurd money people are making with micropayment. Keep on being blind though...some of us are making out pretty well.

As for Epic...I don't know what they expected...how can you assert anything to PC gamers about their buying behavior when all you do is ship Unreal DM over and over? It's one thing to ship the same thing over and over...I have no problem with that...but it's quite another thing to have the audacity to complain that people won't buy it as much as they used to. This is off topic, but this gets more points for idsoftware in my book. For a much longer time they shipped the same game. When it declined they never whined about it (as far as I know). Then they made a cell phone rpg and some weird racing game...ie they started making different games. Kudos to them.