Gaming seasons can be as fickle as Scarlett O’Hara. In the past four years, we’ve seen Call of Duty take over a dominant position in the traditional Christmas season where all the big titles used to come out. Following that juggernaut’s success — for better or worse — we’ve seen publishers move their AAA titles out of the way (Mass Effect 2), not give a damn (Assassin’s Creed: Brotherhood), or even confront the competition (Battlefield 3).
After Red Dead Redemption became last year’s May success story for Rockstar — at the cost of Alan Wake — who are probably hoping for similar success with the May release of L.A. Noire, this year publishers moved their titles ahead of schedule (Brink) or pushed them to June for “polishing reasons.”
Suddenly, a new “pre-summer” season of games has been created. But what goes on behind the scenes of the game industry? Why May and June, traditionally months that were avoided because of the Summer vacation period? What happened to the Summer drought of years past? Analyst Jesse Divnich, EEDAR’s Vice President of Capital Research & Communications, offers his insights on the matter.
So what about those delays? We’ve seen Duke Nukem Forever and Dungeon Siege III slip for polishing reasons, but is that just marketing speak for not wanting to release a game in Rockstar’s shadow?
Divnich: “Good question. The primary reason behind the May delays is nearly entirely due to fears of L.A. Noire. Rockstar has done a superb job in scaring away the competition, and the fact that Duke Nukem Forever, another title by Take-Two [Take-Two owns 2K Games and Rockstar – Ed.], has been delayed, speaks a lot to the expectations from Rockstar.
“Additionally, Rockstar has put a lot of effort into capturing the attention of consumers well before L.A. Noire‘s release. Not only has this increased the game’s awareness, but it pushed away the competition. I’d argue that all these delays because of Rockstar’s aggressive pre-release campaign will likely contribute more sales to L.A. Noire than the increase in consumer awareness. What else is there to buy?”
Indeed, what else has there been this past month? Brink so far appears to have failed to live up to its expectations, and while The Witcher 2 is a major and highly anticipated title, it’s also a Western RPG exclusive to the PC and targeted to an adult and hardcore audience — not exactly L.A. Noire‘s target audience. So what’s so special about the month May? According to Divnich, not that much.
Divnich: “While in years past the summer months have been a rather slow time for video games, over the last two years it hasn’t and I believe the industry as a whole has grown to learn that it really doesn’t matter what month you launch in. Whether in April or August, any game has the potential to turn into a blockbuster. There is no sound statistical evidence to suggest that the release month can negatively impact one’s title. Rather, it has to do with dozens of other factors, one them being competition.
“What is humorous, however, is how numerous publishers were all planning for a May release date over a year ago. Why? Because Red Dead Redemption completely owned the market, and the bean counters of the world ran the data and said “Hey, look! May can support a big AAA release!” And that is the problem with using historical data in combination with bean counters who have no clue on how the industry operates. Any month can support a blockbuster release! It is not the month that determines a game’s success, but rather the game itself.”
Attuned to June
I think most of us agree that the month a game is released in doesn’t bother us much. If anything, we have less time during the Christmas season to spend on gaming. And those “Day one!” games we crave? We never care when they come out. The sooner the better, as long as it doesn’t come at the cost of quality.
But with all the slips into June it has created a big list of promising big titles that, instead of competing with L.A. Noire, are now competing against each other. inFAMOUS 2, Red Faction: Armageddon, Duke Nukem Forever, Alice: Madness Returns, Dungeon Siege III, Hunted: The Demon’s Forge, F.E.A.R. 3, Child of Eden and possibly Shadow of the Damned. Quite a list, but is it likely to cause problems for publishers to bunch it all up in June?
Divnich: “The competition in June is stiff, there is no hiding that, but I don’t particularly see any of June’s release becoming so large that it will hinder the rest of the market. I believe inFAMOUS 2, Red Faction, Duke Nukem, and Alice will produce adequate sales relative to their quality and their marketing campaign.
“Let’s assume that there is 3 to 4 million units in potential for the sum total of all new releases, worldwide in June. If Alice was the only title to be released in June, would it garnish the entire 4 million unit potential? Likely not. If it was L.A. Noire? Possibly. At the end of the day I just have to ask myself, where is the limit between the maximum amount of units that are available, and the combined potential of all new releases. Sometimes that limit is met, often it is not.”
Of course, not all of June’s games are similar nor do they target the same audiences. When it comes to analysis, a great deal of attention is devoted to a game’s features and target audience for its selling potential. In that respect, you could say that F.E.A.R. 3 and Duke Nukem Forever share a lot of similarities, but I don’t think anyone expects Alma to beat the iconic and long awaited return of the Duke in terms of sales. Yet Hunted and Dungeon Siege III do share a lot of similar features depending on how you look at it: both games are action RPGs with a focus on story progression, loot, exploration and co-op. How might that affect those games’ success?
Divnich: “With respect to Hunted and Dungeon Siege III, while they do share similar core features, one title is targeting the console consumer (Hunted), the other the PC consumer. While some overlap exists between console and PC gamers, I don’t believe it is significant enough to impact each other’s sales. Additionally, quality is a huge factor. If one title achieves significantly higher praise from critics, that adds an additional differentiation feature. Or in other words, if all features are the same between two games, the one with the higher review score typically wins.
“We’ve seen this when Modnation Racers, Blur, and Split/Second were all released within 2 weeks of each other and each had review scores within 3 points of each other. The end result was a three-way slice of the total available sales within the Racing genre. If just one title achieved “breakout” status in terms of quality, the end result would have played out entirely different.”
To be fair, both action RPGs are multiplatform titles but that doesn’t mean the audience is on all platforms. Dungeon Siege III did make a big jump towards a more of a Baldur’s Gate: Dark Alliance type of “console” style, but it’s still an old PC franchise. Hunted however looks and plays like a console game.
Hopefully we won’t get a repeat of the Modnation Racers–Blur–Split/Second disaster, because look where those studios are now. Bizarre Creations was closed this year (Blood Stone probably didn’t help) while Black Rock Studios suffered major layoffs and saw attempts at a Split/Second sequel shot down by Disney Interactive. And United Front Games, developers of Modnation Racers? They were working on the now-cancelled True Crime: Hong Kong.
But what about The Legend of Zelda: Ocarina of Time 3D? Will such a popular title affect June sales of console titles, even though it is on a handheld that hasn’t really gone wild with sales to date? Or will it be affected by the other console titles? Maybe we like to go on vacation in the summer, and what do we take with us? A handheld, of course. And a partner or spouse, maybe.
Divnich: “There isn’t a strong overlap between the handheld and home console markets. Very few consumers forgo buying one type of game over another. I don’t have any cause for concerns for Zelda as it faces little competition within the handheld sector.
“Correct, the summer months are typically when consumers take vacations and the June release date for Zelda is surely not coincidental. I believe Zelda will provide a significant boost to the 3DS platform, both in awareness and in hardware sales.”
Is July a month to Gamefly?
As busy as June is for big releases, July is looking absolutely barren. We have, what, Dynasty Warriors Gundam, a new Earth Defense Force game and a couple of movie games? If there is any sort of total game sales ceiling per month, how does July factor into that? Will people buy some June games in July? Will they just rent some games for the (short) singleplayer campaign if they don’t care about multiplayer, or trade them in for the other games they couldn’t afford — or play — at the same time?
Divnich: “Game replay value and length do play a huge factor in what we call “tail sales” (how a title performs after its initial launch). This primarily stems from unconscious word-of-mouth marketing as we tend to purchase games that our friends are playing. In the simplest terms, the longer I play Call of Duty, the more it unconsciously send a reminder message to all my friends that A) Call of Duty is a good game and B) Call of Duty exists. [If you doubt this effect, consider how many people you see using Netflix on Xbox Live at any time of the day if you live outside of North America – Ed.]
“Making a game exist is INCREDIBLY important. As consumers, we are bombarded with thousands of ways to spend our discretionary dollar, to the point where applying any proper due diligence (researching all the available options) becomes too cumbersome. Instead, we generally gravitate towards what our friends (and those that influence) are doing. This explains the long-term success of games like World of Warcraft and Farmville. If a stranger asked us for recommendations on what games to buy, we are far more likely to recommend a game we are currently playing or one we just finished than a great game from a year ago.”
With regard to these word-of-mouth effects, perhaps there’s also something to be said in favor of the second hand market from an industry perspective. Sure, you miss out on that revenue as a publisher. But people are still playing your game and influencing their peers (positively or negatively) about the game’s existence. Perhaps some of those peers will even end up buying a retail copy.
We’ve seen that most publishers have evaded L.A. Noire‘s May release like the plague and moved to June for safety. And we’ll have to see how all the June games will do in their battle royale marketing push for attention. But why don’t publishers just spread titles out over all the months? It would be easier for us to afford and play their games, and not everyone goes on vacation every year. Some of us might sit at home, being bored without anything to play. At least, when we still had that Summer drought of gaming.
Divnich: “I wish publishers would spread titles out more. Unfortunately, there are two factors at play. First, publishers must meet financial goals for their investors. These goals are given on a quarterly basis. It is for that reason why we see March, June, and September have a plethora of releases. It simply represents that last possible month a publisher can release a game to declare any revenue in that quarter (publishers declare revenue on what the retailers take in, not on what the consumers buy).
“Second, there is this assumption that the late June through August months are horrible time frames for a release in Europe because that is when everyone takes their “vacations.” Personally, I call total BS on that as all our prior research indicates that games launched in the summer in Europe succeed just as well if released in another month. Of course, if a publisher does choose to release a game in July, that means no one in their European division can take vacation… so you can see how some employees may not have their employer’s best interest in mind.”
The pre-summer season in review
So what caused the sudden May/June influx of releases? As you have seen, it’s a mix of effects. One part quarterlies, one part industry realization that the Summer drought is actually not a some mystical period of doom to release in, and one part of Rockstar’s influence on the Q2 release landscape after Red Dead Redemption‘s success.
Should we be happy with this as consumers? I don’t know. One the one hand, we get more and bigger games throughout the year compared to, say, five years ago. On the other hand, if May had nothing that interested you and you happen to like 4 or 5 of June’s games, you’re simply out of luck in May and possibly lacking in time come June. At least we’re not getting three racing games in the same month again, or something like Q1 2010’s Bayonetta–Darksiders–God of War Collection–God of War 3 action game months. Remember the millions of times we pressed X & Y or Square & Triangle in that period?
With The Witcher 2 and L.A. Noire at the midway point in May, we’ve had two good 20+ hour games that are targeted at completely different audiences. June has something for everybody, and we can’t complain about having too many games after having complained about a lack of games to play in the Summer for years.
Then again, it will be interesting to see how things will go on the sales front. Different marketing methods will affect the mainstream consumers, but what about the hardcore? When it comes to raising awareness, most of the major titles have had all kinds of trailers, video featurettes, dev diaries and screenshots thrown at us. And we are an Internet-savvy audience, so yeah we get exposed to all of that. But June also has one other thing: E3.
E3 throws even more teasers, trailers, and previews in our faces about games that may not even come out next year, yet we as “core gamers” are just as fickle as the gaming seasons of the past couple of years. We see something new and shiny that looks awesome, and even if it ends up being mediocre we’ll be exposed to it and perhaps keep an eye on it in the future.
Because that’s who we are, we love new video games and especially the kind that excite us and allow us to fill in the gaps about what they are actually going to be like. We talk to our peers about new announcements and share our expectations and hopes. And if said game comes out and disappoints? No matter, because we have a couple of dozen new announcements to fill that void every month.
But does that interfere with being exposed to other marketing campaigns or the gaming news we read online? Not really. We know what games we’re interested in, most of the time. And when something slips under our radar, we usually pick up on it a week or so before release. However, does all of that interfere with actively processing information about new releases and does it affect our intent to buy them?
As Divnich mentions, raising awareness for a game is all-important if you want it to actually sell. But how do people react to over-exposure to upcoming games down the line when there are games coming out in the same month? The mainstream audience may not follow the gaming news as much, but what about the core gamers? While I doubt any of us are going to pass on something like Duke Nukem Forever if we’ve been looking forward to it for over 10 years, most of us can’t afford all of the June titles and all of the Q4 titles.
The more big games get announced and the more we learn about AAA titles in Q4 we were already interested in, perhaps it will make us go: “Well, Hunted and Alice look cool but I’ll just wait for a pricedrop, rent it, or grab it secondhand. That way I can play it and still afford to buy Skyrim, Battlefield 3, Batman: Arkham City, Uncharted 3, and RAGE on day one.”
Will E3 interfere with the carefully laid-out pre-launch marketing plans for the June games at the last moment? Will it have no effect on the fight for our cognitive resources when it comes to the games we want, mixed with the practical implications of whether or not we can afford them? And will the industry take heed to Divnich’s claim that it doesn’t matter what month you release in, as long as the game is great and the marketing campaign supports it properly?
Time will tell, but one thing is for sure: no longer are the months running up to the Summer holidays a time for us to only have game announcements and no games. The Summer drought is over, at least for this year. Let’s hope that the June games don’t all bomb, lest it once again scare publishers away from those months that can provide opportunity and entertainment for those attuned to the gamer’s mind. And if their June 2011 adventure does shy publishers away from doing the same in 2012, that just offers a golden opportunity for the indies to fill the gap.