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online retail unprofitable

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  • Brandon J. Van Every
    Gamasutra article about online retailer DVD Empire ceasing to sell video games. Seems they can t make money.
    Message 1 of 15 , Feb 2, 2007
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      Gamasutra article about online retailer "DVD Empire" ceasing to sell
      video games. Seems they can't make money.
      http://www.gamasutra.com/php-bin/news_index.php?story=12616

      Seems like nothing moves in the game industry unless big bucks are
      involved. That poses some limitations for an indie game designer.


      Cheers,
      Brandon Van Every
    • Todd Zircher
      ... I saw that article earlier, it s a crying shame how the industry treats some. On the bright side, the backlash has created opportunity for others. Poptop
      Message 2 of 15 , Feb 2, 2007
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        Brandon wrote:
        >
        > Gamasutra article about online retailer "DVD Empire" ceasing to sell
        > video games. Seems they can't make money.
        > http://www.gamasutra.com/php-bin/news_index.php?story=12616
        >
        > Seems like nothing moves in the game industry unless big bucks are
        > involved. That poses some limitations for an indie game designer.

        I saw that article earlier, it's a crying shame how the industry treats
        some. On the bright side, the backlash has created opportunity for
        others. Poptop comes to mind.
        --
        TAZ
      • Gerry Quinn
        ... To be fair, their problems were with mainstream publishers and distributers. A retailer selling niche games wouldn t have the same issues (because the
        Message 3 of 15 , Feb 3, 2007
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          ----- Original Message -----
          > Gamasutra article about online retailer "DVD Empire" ceasing to sell
          > video games. Seems they can't make money.
          > http://www.gamasutra.com/php-bin/news_index.php?story=12616
          >
          > Seems like nothing moves in the game industry unless big bucks are
          > involved. That poses some limitations for an indie game designer.

          To be fair, their problems were with mainstream publishers and distributers.
          A retailer selling niche games wouldn't have the same issues (because the
          niche publisher can't make the same demands).

          - Gerry Quinn
        • Pravin Wagh
          There s a bumper-sticker/t-shirt saying which goes: Your failed business model is not my problem. DVD Empire has not reconciled the fact that if they
          Message 4 of 15 , Feb 3, 2007
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            There's a bumper-sticker/t-shirt saying which goes:

            "Your failed business model is not my problem."

            DVD Empire has not reconciled the fact that if they themselves think a
            product is crappy (according to their rant, 80% of games are lousy), that
            this should have been a sign not to sell such things in the first place.

            I also wonder whether they overlooked information about return policies
            with the publishers and distributors thinking that games were more or less
            like movies and that every thing would work out in the end.

            The cynic and skeptic in me wants to make sure that this is really not
            just the case of sour grapes and a bad business plan.


            I don't think indie games are distributed through the same kinds of retail
            channels that DVD Empire is talking about, and I agree with Todd that this
            could be a good opportunity.

            It means that the distributors for those games might find friendlier
            outlets from retailers burned by the big industry practices. I'm sure
            that affiliate sales incentives would be much higher than the small
            margins these retailers have been subjected to.

            On the other hand, I wonder if people would rather just download indie
            games directly from developer websites (or eventually from
            Xbox/Sony/Nintendo's online services). If that's the case, then support
            from retailers would be moot, and probably result in another rant from DVD
            Empire. (Will they continue to call games crappy in that rant as well?)



            +pravin
          • Brandon J. Van Every
            ... Quality issues aside, we do know that at any one time, very few games are actually making money. I don t have an exact number for that, but 10%..20% of
            Message 5 of 15 , Feb 3, 2007
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              Pravin Wagh wrote:
              >
              > There's a bumper-sticker/ t-shirt saying which goes:
              >
              > "Your failed business model is not my problem."
              >
              > DVD Empire has not reconciled the fact that if they themselves think a
              > product is crappy (according to their rant, 80% of games are lousy), that
              > this should have been a sign not to sell such things in the first place.
              >
              > I also wonder whether they overlooked information about return policies
              > with the publishers and distributors thinking that games were more or less
              > like movies and that every thing would work out in the end.
              >
              > The cynic and skeptic in me wants to make sure that this is really not
              > just the case of sour grapes and a bad business plan.
              >

              Quality issues aside, we do know that at any one time, very few games
              are actually making money. I don't have an exact number for that, but
              10%..20% of the products sounds like it's in the right range. Awful
              lotta dross in the game industry, I don't think that's in debate. So, a
              lot of risk selling games. Seems that bigger retailers can mitigate
              those risks, either by negotiating contracts more in their favor, or
              just making money on something else in their showrooms. DVD Empire says
              a smaller vendor can't do it. Sounds about right to me. Publishers are
              notorious for strong arming developers, so it hardly shocks me that
              they'd set up one-sided contracts with smaller retailers.

              It would seem that the bad business model is to be small. Are there any
              counterexamples out there? Any small guys doing fine selling games?

              >
              >
              > On the other hand, I wonder if people would rather just download indie
              > games directly from developer websites (or eventually from
              > Xbox/Sony/Nintendo' s online services). If that's the case, then support
              > from retailers would be moot, and probably result in another rant from DVD
              > Empire. (Will they continue to call games crappy in that rant as well?)
              >

              I have wondered if NetFlix's business model can last indefinitely. For
              those not aware, you pay a monthly membership and they mail DVDs to
              you. You mail 'em back when you're done. No trips to the video store,
              no late fees. They have competition from OnDemand, available straight
              over the cable. Maybe the latter just charges too much money for
              movies? Or maybe they're not offering much flexibility in what you can
              get, or when you can get it? I haven't really investigated. By choice,
              I've avoided having any TV channels at all, let alone cable service. I
              only use my TV as a monitor to play DVDs.


              Cheers,
              Brandon Van Every



              [Non-text portions of this message have been removed]
            • Brightneon
              ... sell ... are ... treats ... The market is in constant change. No winning formula exists. If someone creates the MacD of online retailing, it would become
              Message 6 of 15 , Feb 20, 2007
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                --- In gamedesign-l@yahoogroups.com, "Todd Zircher" <tzircher@...>
                wrote:
                >
                > Brandon wrote:
                > >
                > > Gamasutra article about online retailer "DVD Empire" ceasing to
                sell
                > > video games. Seems they can't make money.
                > > http://www.gamasutra.com/php-bin/news_index.php?story=12616
                > >
                > > Seems like nothing moves in the game industry unless big bucks
                are
                > > involved. That poses some limitations for an indie game designer.
                >
                > I saw that article earlier, it's a crying shame how the industry
                treats
                > some. On the bright side, the backlash has created opportunity for
                > others. Poptop comes to mind.
                > --
                > TAZ
                >

                The market is in constant change. No winning formula exists. If
                someone creates the MacD of online retailing, it would become the
                microsoft of online trade and it would mean even more developers make
                no money.
              • Todd Zircher
                ... Well, even if one company was massively successful, there still needs to be game designers and developers to feed the corporate maw. To me, it s
                Message 7 of 15 , Feb 20, 2007
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                  Brightneon wrote:
                  >
                  >> I saw that article earlier, it's a crying shame how the
                  >> industry treats some. On the bright side, the backlash
                  >> has created opportunity for others. Poptop comes to mind.
                  >
                  > The market is in constant change. No winning formula exists.
                  > If someone creates the MacD of online retailing, it would
                  > become the microsoft of online trade and it would mean even
                  > more developers make no money.

                  Well, even if one company was massively successful, there still needs
                  to be game designers and developers to feed the corporate maw. To
                  me, it's interesting how software sells more like fresh fruit rather
                  than a technological item. The return policies are rather brutal. I
                  imagine that a MacD model of sales would only work if demand,
                  variety, and quality could be kept high enough to allow for continued
                  sales. I think the design challenge for such a business would be to
                  crank out causual games that are topical and perhaps episodic.
                  --
                  TAZ
                • Brightneon
                  ... needs ... rather ... I ... continued ... to ... That is true, the policy is brutal, but consider how many buy a software and how many copy it? Most things
                  Message 8 of 15 , Feb 20, 2007
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                    --- In gamedesign-l@yahoogroups.com, "Todd Zircher" <tzircher@...>
                    wrote:
                    >
                    > Brightneon wrote:
                    > >
                    > >> I saw that article earlier, it's a crying shame how the
                    > >> industry treats some. On the bright side, the backlash
                    > >> has created opportunity for others. Poptop comes to mind.
                    > >
                    > > The market is in constant change. No winning formula exists.
                    > > If someone creates the MacD of online retailing, it would
                    > > become the microsoft of online trade and it would mean even
                    > > more developers make no money.
                    >
                    > Well, even if one company was massively successful, there still
                    needs
                    > to be game designers and developers to feed the corporate maw. To
                    > me, it's interesting how software sells more like fresh fruit
                    rather
                    > than a technological item. The return policies are rather brutal.
                    I
                    > imagine that a MacD model of sales would only work if demand,
                    > variety, and quality could be kept high enough to allow for
                    continued
                    > sales. I think the design challenge for such a business would be
                    to
                    > crank out causual games that are topical and perhaps episodic.
                    > --
                    > TAZ
                    >
                    That is true, the policy is brutal, but consider how many buy a
                    software and how many copy it?

                    Most things have become fresh fruit. Constant demand for new has
                    created a industry of frozen fruit. In order to be "new" games are
                    jumping platforms so new on pc is new on 360 next month and new on
                    Wii the next and then new on PS3 the next. Then expansion on pc and
                    so forth.

                    You have a hit with that idea about episodic games.
                  • Michael Brunton-Spall
                    Hey all, Brightneon and Brandon mentioned Episodic gaming in passing, and it reminded me of some thoughts I d been having about the definition of episodic
                    Message 9 of 15 , Feb 21, 2007
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                      Hey all,

                      Brightneon and Brandon mentioned Episodic gaming in passing, and it
                      reminded me of some thoughts I'd been having about the definition of
                      episodic gaming.


                      I wonder whether people feel that Half Life 2, Episode 1, Episode 2
                      represents episodic gaming? I see a lot of articles and interviews
                      where the guy from Valve (Gabe Newell? or is that the Penny Arcade
                      guy?) talks about the wow of episodic gaming.
                      But in all the articles I see, the episodes are released with between 3
                      and 12 months between each episode.
                      To em thats like calling the star wars films episodes. They are not
                      episodes in the true sense, but fully contained films in themselves that
                      cna be watched together.

                      I wonder whether any company will start to develop episodic content that
                      is more similar to TV, released on a schedule that is measured in weeks
                      not months, (maybe every 2 or 4 weeks), and with say 12 episodes to a
                      season, or something like that.

                      Anybody have any thoughts on the whole episodic content thing?
                      Do you think that Indies and Casual game makers are more likely to
                      embrace a faster episodic style first, or the mainstream publishers will
                      get there first?

                      What about the billing / charge for each episode? HL2 costs $29.95 from
                      steam, Episode 1 costs an additional $19.95
                      When thinking about this (and planning an episodic EPG) I had in mind
                      that the first episode would cost say $10, and each episode after that
                      would cost say $2 to $3, for a total of 10 episodes.
                      How about length of play in an episode? Should it take you days, or
                      hours to complete an episode?

                      I had an idea a while ago, (dont worry about stealing my idea, ideas are
                      valueless), to create a RPG engine, and create the adventure in 1/2 hour
                      to 1 hour long episodes. Each episode would end on a cliffhanger if at
                      all possible, trying to encourage the user to buy the next episode, and
                      each episode would simply add the data necessary to enact that episode.
                      I had envisioned that the production pipeline would have to be created
                      early, and that I would have at least the first 6 episodes fully created
                      before first episode "aired", and eps 7-9 in "pre-production" That way
                      I could get some feedback for the "season finale" but I would still have
                      time to create each episode before it was aired.

                      Anyway I just thought I'd toss that out there and see what people
                      thought. And watch out for my ultra episodic gaming, coming to a PC
                      near you in, well the far future some time :)
                    • Gerry Quinn
                      From: Michael Brunton-Spall ... It s not really the same thing, but you could think of something like Real Networks Game Pass
                      Message 10 of 15 , Feb 21, 2007
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                        From: "Michael Brunton-Spall" <michael@...>

                        > I wonder whether any company will start to develop episodic content that
                        > is more similar to TV, released on a schedule that is measured in weeks
                        > not months, (maybe every 2 or 4 weeks), and with say 12 episodes to a
                        > season, or something like that.
                        >
                        > Anybody have any thoughts on the whole episodic content thing?
                        > Do you think that Indies and Casual game makers are more likely to
                        > embrace a faster episodic style first, or the mainstream publishers will
                        > get there first?

                        It's not really the same thing, but you could think of something like Real
                        Networks' Game Pass (where you pay a subscription to choose one game a month
                        at a fraction of the normal price) as episodic. (Especially when so much of
                        the content is similar, e.g. a new twist on Bejeweled.)

                        - Gerry Quinn
                      • Brightneon
                        ... content that ... weeks ... to a ... publishers will ... like Real ... game a month ... so much of ... Episodic and serials are different. Episodic games
                        Message 11 of 15 , Feb 21, 2007
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                          --- In gamedesign-l@yahoogroups.com, "Gerry Quinn" <gerryq@...> wrote:
                          >
                          >
                          > From: "Michael Brunton-Spall" <michael@...>
                          >
                          > > I wonder whether any company will start to develop episodic
                          content that
                          > > is more similar to TV, released on a schedule that is measured in
                          weeks
                          > > not months, (maybe every 2 or 4 weeks), and with say 12 episodes
                          to a
                          > > season, or something like that.
                          > >
                          > > Anybody have any thoughts on the whole episodic content thing?
                          > > Do you think that Indies and Casual game makers are more likely to
                          > > embrace a faster episodic style first, or the mainstream
                          publishers will
                          > > get there first?
                          >
                          > It's not really the same thing, but you could think of something
                          like Real
                          > Networks' Game Pass (where you pay a subscription to choose one
                          game a month
                          > at a fraction of the normal price) as episodic. (Especially when
                          so much of
                          > the content is similar, e.g. a new twist on Bejeweled.)
                          >
                          > - Gerry Quinn
                          >
                          Episodic and serials are different.

                          Episodic games are not such much twists, but when you get an
                          adventure. Each part is a mini game, you pay for eash part instead of
                          buy the whole at once. WOW is episodic. You get the game, then parts
                          are added.

                          Serials are like new twists on bejeweled.
                        • Todd Zircher
                          ... Actually, I tend not to consider copying. The people that do that are not likely to purchase even if the copy protection was bullet proof. I think the
                          Message 12 of 15 , Feb 21, 2007
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                            >> I imagine that a MacD model of sales would only work if
                            >> demand, variety, and quality could be kept high enough to
                            >> allow for continued sales. I think the design challenge
                            >> for such a business would be to crank out causual games
                            >> that are topical and perhaps episodic.
                            >
                            > That is true, the policy is brutal, but consider how many
                            > buy a software and how many copy it?

                            Actually, I tend not to consider copying. The people that do that are
                            not likely to purchase even if the copy protection was bullet proof. I
                            think the 'lost profits' arguement is innately flawed and just jacked
                            up hype that lawyers and software protection salesmen use.

                            Under a software as 'junk food' model, professional pirates would move
                            on to more profitable and challenging software. From a design
                            perspective, online games have an advantage in that you have the gamers
                            pay for a service and you can almost give the disks away. Going back
                            to the MacD vending machine. Take an idea from iTunes and have an
                            iGames card or something.

                            > Most things have become fresh fruit. Constant demand for new has
                            > created a industry of frozen fruit. In order to be "new" games are
                            > jumping platforms so new on pc is new on 360 next month and new on
                            > Wii the next and then new on PS3 the next. Then expansion on pc and
                            > so forth.

                            Yeah, I think that's a good thing for developers. But, I do understand
                            the need for some exclusive titles. Especially during roll out of a
                            new product you want to have some titles that can only be played on
                            machine X, Y, or Z.
                            --
                            TAZ
                          • Joel Davis
                            The new Sam and Max games I think are a pretty good example of episodic gaming. They are short, and released pretty close together. But they re not weekly
                            Message 13 of 15 , Feb 21, 2007
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                              The new "Sam and Max" games I think are a pretty good example of episodic gaming. They are short, and released pretty close together. But they're not weekly like a TV show or anything.

                              It's a new concept, though, and I think it will take a little while to find the sweet spot for episode length and release schedules. Also, keep in mind that most people don't pay by the episode for TV shows either. Even counting iTunes, there is no show that is financed and distributed entirely episodically. I think the idea of an ad-supported episodic game has some real potential.

                              Personally, I think Valve is on the right track. Episodes can be like "mini-expansion packs", and instead of a game releasing one or maybe two expansion packs over their lifetime, they could release four or five episodes before the sequal comes out.

                              For RPGs episodes, I'd say that Bioware is already doing episodic gaming but nobody is paying attention. They have a TON of modules for Neverwinter Nights on their site, some free, some selling from between $5 and $20 depending on length/amount of new content. Most people that play NWN (myself included) just stopped after the main quest, but these addition modules really extend the life of the product for the core audience, and keep the communitity alive. Even with NWN2 release, Bioware is still making some money selling modules for NWN, which is pretty extraordinary.

                              The new distribution channels on XboxLive and possibly Wii mean this kind of thing is now possible on consoles, too. We'll see if it takes off.

                              Plus, you can make episodes with just artists, who are cheap and disposable, unlike programmers, who are expensive and cranky. (Just kidding.)

                              Joel

                              ----- Original Message ----
                              From: Michael Brunton-Spall <michael@...>
                              To: gamedesign-l@yahoogroups.com
                              Sent: Wednesday, February 21, 2007 2:10:36 AM
                              Subject: [gamedesign-l] Episodic Gaming













                              Hey all,



                              Brightneon and Brandon mentioned Episodic gaming in passing, and it

                              reminded me of some thoughts I'd been having about the definition of

                              episodic gaming.



                              I wonder whether people feel that Half Life 2, Episode 1, Episode 2

                              represents episodic gaming? I see a lot of articles and interviews

                              where the guy from Valve (Gabe Newell? or is that the Penny Arcade

                              guy?) talks about the wow of episodic gaming.

                              But in all the articles I see, the episodes are released with between 3

                              and 12 months between each episode.

                              To em thats like calling the star wars films episodes. They are not

                              episodes in the true sense, but fully contained films in themselves that

                              cna be watched together.



                              I wonder whether any company will start to develop episodic content that

                              is more similar to TV, released on a schedule that is measured in weeks

                              not months, (maybe every 2 or 4 weeks), and with say 12 episodes to a

                              season, or something like that.



                              Anybody have any thoughts on the whole episodic content thing?

                              Do you think that Indies and Casual game makers are more likely to

                              embrace a faster episodic style first, or the mainstream publishers will

                              get there first?



                              What about the billing / charge for each episode? HL2 costs $29.95 from

                              steam, Episode 1 costs an additional $19.95

                              When thinking about this (and planning an episodic EPG) I had in mind

                              that the first episode would cost say $10, and each episode after that

                              would cost say $2 to $3, for a total of 10 episodes.

                              How about length of play in an episode? Should it take you days, or

                              hours to complete an episode?



                              I had an idea a while ago, (dont worry about stealing my idea, ideas are

                              valueless), to create a RPG engine, and create the adventure in 1/2 hour

                              to 1 hour long episodes. Each episode would end on a cliffhanger if at

                              all possible, trying to encourage the user to buy the next episode, and

                              each episode would simply add the data necessary to enact that episode.

                              I had envisioned that the production pipeline would have to be created

                              early, and that I would have at least the first 6 episodes fully created

                              before first episode "aired", and eps 7-9 in "pre-production" That way

                              I could get some feedback for the "season finale" but I would still have

                              time to create each episode before it was aired.



                              Anyway I just thought I'd toss that out there and see what people

                              thought. And watch out for my ultra episodic gaming, coming to a PC

                              near you in, well the far future some time :)












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                            • Todd Zircher
                              ... NWN and NWN2 are good examples of what can be done. It s also a good model of what depth of content and tool development would be needed for cranking out
                              Message 14 of 15 , Feb 21, 2007
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                                Joel Davis wrote:
                                >
                                > For RPGs episodes, I'd say that Bioware is already doing
                                > episodic gaming but nobody is paying attention. They have
                                > a TON of modules for Neverwinter Nights on their site,
                                > some free, some selling from between $5 and $20 depending
                                > on length/amount of new content. Most people that play NWN
                                > (myself included) just stopped after the main quest, but
                                > these addition modules really extend the life of the product
                                > for the core audience, and keep the communitity alive. Even
                                > with NWN2 release, Bioware is still making some money selling
                                > modules for NWN, which is pretty extraordinary.

                                NWN and NWN2 are good examples of what can be done. It's also a good
                                model of what depth of content and tool development would be needed for
                                cranking out episodes. As a side note, the whole 'Endless' series
                                (Endless Nights and Endless Dungeons) have really extended the series
                                for me since I'm a fan of rogue-like games. You know you have some
                                solid design when you can make a separate game within a game. :-)
                                --
                                TAZ
                              • Brightneon
                                ... good ... for ... series ... WOW and others are catching on. When does expansions / sequals become episodes? It can overlap. Of cource production /
                                Message 15 of 15 , Feb 21, 2007
                                • 0 Attachment
                                  --- In gamedesign-l@yahoogroups.com, "Todd Zircher" <tzircher@...>
                                  wrote:
                                  >
                                  > Joel Davis wrote:
                                  > >
                                  > > For RPGs episodes, I'd say that Bioware is already doing
                                  > > episodic gaming but nobody is paying attention. They have
                                  > > a TON of modules for Neverwinter Nights on their site,
                                  > > some free, some selling from between $5 and $20 depending
                                  > > on length/amount of new content. Most people that play NWN
                                  > > (myself included) just stopped after the main quest, but
                                  > > these addition modules really extend the life of the product
                                  > > for the core audience, and keep the communitity alive. Even
                                  > > with NWN2 release, Bioware is still making some money selling
                                  > > modules for NWN, which is pretty extraordinary.
                                  >
                                  > NWN and NWN2 are good examples of what can be done. It's also a
                                  good
                                  > model of what depth of content and tool development would be needed
                                  for
                                  > cranking out episodes. As a side note, the whole 'Endless' series
                                  > (Endless Nights and Endless Dungeons) have really extended the
                                  series
                                  > for me since I'm a fan of rogue-like games. You know you have some
                                  > solid design when you can make a separate game within a game. :-)
                                  > --
                                  > TAZ
                                  >
                                  WOW and others are catching on. When does expansions / sequals become
                                  episodes? It can overlap.

                                  Of cource production / popularity will bring about episode games from
                                  more major players.

                                  Games evolving from having sequals to episode and sequals
                                  becoming "sesions".

                                  As development tools become more advanced, pure programming giving
                                  way to game tools, episode game become easier and more common.

                                  Pure programming will be for the librarys and engines.

                                  It will be like an artimation house. Games produced simular lines to
                                  cartoons.

                                  Simpsons on tv becoems simpsons interactive with each week new
                                  scripts to characters.
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