Video Games Basic

53
January 2006 Video Game Basics

description

 

Transcript of Video Games Basic

Page 1: Video Games Basic

January 2006

Video Game Basics

Page 2: Video Games Basic

2 − January 2006

Who are we?

International Strategic Marketing– Under the responsibility of Cyril Vermeil– Includes 4 groups:

Market Knowledge – Study the market and competition Consumer Knowledge – Study the consumers Marketing Intelligence – Benchmark competitors’ communication strategy Entertainment & Licensing – Identify trends and licensing opportunities

Market Knowledge missions– Study the past – to understand how the market works (Market

Reviews)– Monitor the present – to see what’s happening now (Daily Competitive

Review)– Anticipate the future – to help the company in making the right

decisions (International Release List, forecasts)

Page 3: Video Games Basic

3 − January 2006

Video Game Basics – Agenda

Video Game HistoryThe Pioneers / Modern Times / Milestones / Present Times

Current Generation ConsolesSony’s PlayStation 2 / Microsoft’s Xbox / Nintendo’s GameCubeNintendo’s GameBoy Advance / Nintendo’s DS / Sony’s PSP

Going Next-GenMicrosoft’s Xbox 360 / Sony’s PlayStation 3 / Nintendo’s Revolution

The Video Game MarketA Cyclic Market / The Software Market

The Main PlayersThe Industry / Electronic Arts / Take 2 / Activision / THQ / Konami / Capcom / Atari

Glossary

Video Game Demos

Page 4: Video Games Basic

4 − January 2006

Presentation Rules

If there’s something you don’t understand, ask us

If you are too shy to ask, ask anyway

If you are really too shy to ask, have your neighbour ask for you

There are no stupid questions

This presentation is for you – participate!

Page 5: Video Games Basic

January 2006

Video Games History

Page 6: Video Games Basic

6 − January 2006

Video Games History – The Pioneers

Nutting releases the first arcade video game – Computer Space

Pong breaks through

Fairchild releases the first home console, the Channel F Atari releases the Video Computer System (VCS) Nintendo enters the arcade market Electronic Games becomes the first video game magazine

Nintendo releases the Nintendo Entertainment System (NES) in Japan The NES hits the USA, outselling its competitors 10 to 1

Nintendo releases the Game Boy Nintendo releases the Super NES but faces competition from NEC’s

Turbo Grafx and Sega’s Genesis

1971

1972

1976197719781981

19831986

19891991

8 b

its

16 b

its

Page 7: Video Games Basic

7 − January 2006

Video Games History – Recent Times

1995

1996

1998

1999

2000

2001

32/6

4 b

its

128

bit

s

Sony launches the PlayStation, Sega launches the Saturn. Both consoles use CDs

Nintendo launches the Nintendo 64

Sega launches the Dreamcast in Japan – the first online-enabled console

Sega launches the Dreamcast in the US, earning $98

million within the first 24 hours

Sony launches the PlayStation 2 in Japan in March, selling 1 million consoles in two days. The machine is launched in the US in October

Sega exits from the hardware business. Nintendo launches the Game Boy Advance. Nintendo’s GameCube and Microsoft’s Xbox are released within days of each other in the US

Page 8: Video Games Basic

8 − January 2006

Video Game History – Milestones

Taito creates Space Invaders Namco launches Pac-Man – the first video-game character to be used

in merchandizing Nintendo creates Donkey Kong … along with a little Italian plumber

named Mario

Tetris is created by Alexey Pajitnov

Super Mario Bros. 3 sells 17 million cartridges worldwide. Sega creates Sonic the Hedgehog

Ubisoft launches Rayman Pokémon hits Japan. Video games get their first true heroine in Tomb

Raider’s Lara Croft Bandai creates the Tamagotchi

19781980

1981

1985

19901991

19951996

1997

Page 9: Video Games Basic

9 − January 2006

Video Games History – Present Times

April: Square and Enix merge, creating Japan’s RPG powerhouse

April: Namco and Bandai merge, the last of the big Japanese corporate movements

November: Blizzard’s World of Warcraft is launched in the US December: the Nintendo DS and Sony PSP are launched in Japan

within days of each other

May: Microsoft, Sony and Nintendo announce their plans for their Next Gen consoles at E3

July: “Hot Coffee” mod reveals sexual mini-game in Take 2’s Grand Theft Auto: San Andreas

Nov/Dec: the first Next Gen console, Microsoft’s Xbox 360 is launched worldwide

2003

2004

2005

Page 10: Video Games Basic

January 2006

Current Generation Consoles

Page 11: Video Games Basic

11 − January 2006

Sony’s PlayStation 2 (PS2)

The leading machine of the market– Launched in Japan on March 4, ’00– Launched in the US on October 26 ’00– Launched in Europe on November 24 ’00

Assets– First console with DVD player capability– Backward compatibility gives access to the PlayStation game catalogue– PlayStation brand recognition

Weak points– Online offer somewhat lacking structure

Top-sellers– Grand Theft Auto: San Andreas (Take 2)– Gran Turismo 4 (Sony)– Madden NFL 06 (Electronic Arts)

Installed bases

US 32M

Europe 34M

Japan 18M

Figures at end 2005

Page 12: Video Games Basic

12 − January 2006

Microsoft’s Xbox

The outsider turned second-best– Launched in the US on November 15 ’01– Launched in Japan on February 22, ’02– Launched in Europe on March 14 ’02

Assets– The most powerful console around– Microsoft’s marketing power and resources– Xbox Live online service

Weak points– Perceived as a “gamer only” console– Failed to establish itself in Japan

Top-sellers– Halo 2 (Microsoft)– Tom Clancy’s Splinter Cell (Ubisoft)– Dead or Alive 3 (Tecmo)

Installed bases

US 14M

Europe 7M

Japan 475K

Figures at end 2005

Page 13: Video Games Basic

13 − January 2006

Nintendo’s GameCube (GC)

The struggling legacy– Launched in Japan on November 14, ’01– Launched in the US on November 18 ’01– Launched in Europe on May 3 ’02

Assets– Nintendo brand recognition and franchises– Link with the GameBoy Advance

Weak points– Perceived as too childish– Lack of released titles– Online support inexistent

Top-sellers– Super Smash Brothers Melee (Nintendo)– The Legend of Zelda: The Wind Waker (Nintendo)– Mario Kart: Double Dash!! (Nintendo)

Installed bases

US 11M

Europe 5M

Japan 4M

Figures at end 2005

Page 14: Video Games Basic

14 − January 2006

Nintendo’s GameBoy Advance (GBA)

Uncontested … so far– Launched in Japan on March 23, ’01– Launched in the US on June 11 ’01– Launched in Europe on June 22 ’01

Assets– Nintendo brand recognition and franchises– Backward compatibility gives access to the GameBoy game catalogue

Weak points– Screen quality (corrected with the GBA SP)

Top-sellers– Pokémon Ruby/Sapphire (Nintendo)– Super Mario Advance (Nintendo)– Mario Kart: Super Circuit (Nintendo)

Installed bases

US 31M

Europe 19M

Japan 17M

Figures at end 2005

Page 15: Video Games Basic

15 − January 2006

Nintendo’s DS

The new kid in town– Launched in the US on November 21 ’04– Launched in Japan on December 2, ’04– Launched in Europe on March 11 ’05

Assets– Nintendo brand recognition and franchises– Backward compatibility gives access to the GameBoy Advance catalogue– Dual-screen and wireless capabilities

Weak points– Retro-design of the console– Sketchy positioning

Top Sellers– Super Mario 64 DS (Nintendo)– Nintendogs (Nintendo)– WarioWare: Touched! (Nintendo)

Installed bases

US 4M

Europe 2.5M

Japan 5M

Figures at end 2005

Page 16: Video Games Basic

16 − January 2006

Sony’s PlayStation Portable (PSP)

The other new kid in town– Launched in Japan on December 12, ’04– Launched in the US on March 24 ‘05– Launched in Europe on September 1 ’05

Assets– PlayStation brand recognition– Multifunction device: games, music, movies– Wireless capabilities

Weak points– Duplicate line-up with the PS2– (Very) limited battery life

Top Sellers– Grand Theft Auto: Liberty City Stories (Take 2)– Need for Speed: Underground Rivals (Electronic Arts)– Untold Legends: Brotherhood of the Blade (Sony)

Installed bases

US 3M

Europe 2.5M

Japan 2.5M

Figures at end 2005

Page 17: Video Games Basic

January 2006

Going Next-Gen

Page 18: Video Games Basic

18 − January 2006

Microsoft’s Xbox 360 (X360)

The first Next-Gen Console– Launched in the US on November 22 ’05– Launched in Europe on December 2 ’05– Launched in Japan on December 10, ’05

Assets– Next-Gen processing power– Limited backwards compatibility with the Xbox– Xbox Live online service

Weak points– Launch line-up with limited interest

Top-sellers– Call of Duty 2 (Activision)– Madden NFL 06 (Electronic Arts)– Perfect Dark Zero (Microsoft)

Installed bases

US 1.2M

Europe 500k

Japan 80k

Figures at end 2005

Page 19: Video Games Basic

19 − January 2006

Sony’s PlayStation 3 (PS3)

The favorite– Expected launch in Fall 2006– Should be expensive ($400+?)

Assets– PlayStation brand recognition– Backward compatibility with the PS2 and the PSX– Will double as a Blu-ray reader– On paper, twice as powerful than the Xbox 360

Weak points– Complex architecture, difficult to program for– Will have to compete with Microsoft’s counter-attack at launch

Page 20: Video Games Basic

20 − January 2006

Nintendo’s Revolution

The family-friendly underdog– Expected launch in Fall 2006

Assets– Nintendo brand recognition and franchises– Innovative, motion-based controller– Backward compatibility with the GC– Online service, similar to Xbox Live

Weak points– The least powerful Next-Gen Console– Seducing concept, will have to confirm with games– Should remain dominated by Nintendo properties

Page 21: Video Games Basic

January 2006

The Video Game Market

Page 22: Video Games Basic

22 − January 2006

Video Games – A Cyclic Market

Sources: ELSPA / ScreenDigest

Page 23: Video Games Basic

23 − January 2006

The Software Market

Sources: ELSPA / ScreenDigest

UK

France

Germany

Spain

Italy

Others

US$8.5bn (45%)

Japan$3.0bn (15%)

Europe$7.0bn (40%)

Page 24: Video Games Basic

24 − January 2006

PS271%

Xbox15%

GC11%

PSX3%

PS281%

Xbox1%

GC17% PSX

1%

PS259%

Xbox22%

GC17%

PSX2%

Home Console Software Market Share in Value

The Software Market

Sources: ELSPA / ScreenDigest

USA Europe Japan

Page 25: Video Games Basic

January 2006

The Main Players

Page 26: Video Games Basic

26 − January 2006

The Video Game Industry

DeveloperCreates the game

PublisherMarkets the game

DistributorInstalls the game

in stores

Consumers

ManufacturerCreates and produces the consoles

Software Development Kits (SDK)Special versions of the consoles designed for developing and testing games

Game ApprovalManufacturers check if the games respect their standards in terms of quality and contents

From concept … to game … to product

RoyaltiesManufacturers receive a set royalty on each and every game produced for their console

Page 27: Video Games Basic

27 − January 2006

The Main Players

Nintendo

SonyMicrosoft

Electronic ArtsActivision

THQ

Eidos

KonamiSega

Capcom

Take 2

Ubisoft

Atari

Page 28: Video Games Basic

28 − January 2006

Electronic Arts

The leader of the market

Assetso First development resources in the worldo Dominates the Sports segment (Madden NFL, NBA Live, FIFA titles)o Has a strong portfolio of licensed titles and franchises (Harry Potter, James Bond, The

Sims, Medal of Honor)

Weak pointso Rely on established brands, and lacks original creations?o Recently suffering from quality issues

Top-sellerso Madden NFL 06 (PS2/Xbox/GC)o The Sims 2 (PC)o Need for Speed: Underground (PS2/Xbox/GC)

Page 29: Video Games Basic

29 − January 2006

Take 2

The publisher on the edge

Assetso Hit gold with the Grand Theft Auto franchiseo Very tight-lipped around upcoming projects

Weak pointso Might go too far with polemic titles (cf. Manhunt)

Top-sellerso Grand Theft Auto: San Andreas (PS2/Xbox)o ESPN NFL 2K5 (PS2/Xbox)o Midnight Club 3: Dub Edition (PS2)

Page 30: Video Games Basic

30 − January 2006

Activision

The house that Tony Hawk built (or close enough)

Assetso Dominates the Extreme Sports segment (Tony Hawk titles)o Has a strong portfolio of Marvel licensed titles (Spiderman, X-Men)o Solid marketing know-how

Weak pointso Didn’t manage to establish its O2 brand of extreme sports titles

Top-sellerso Spiderman: The Movie 2 (PS2/Xbox/GC)o Tony Hawk’s Underground 2 (PS2/Xbox/GC)o Call of Duty (PS2/Xbox/GC)

Page 31: Video Games Basic

31 − January 2006

THQ

Wrestling the competition to the ground

Assetso Dominates the wrestling segmento Benefits from kid-oriented licenses (Rugrats, Spongebob, Scooby-Doo)

Weak pointso One-dimensional publisher relying on wrestling and handheld titles

Top-sellerso The Incredibles (PS2/Xbox/GC/GBA)o WWF Smackdown! vs RAW (PS2)o SpongeBob SquarePants: Battle for Bikini Bottom (PS2/Xbox/GC/GBA)

Page 32: Video Games Basic

32 − January 2006

Konami

The “Electronic Arts” of Japan

Assetso First development resources in Japano Benefits from a strong Sports range (Pro Evolution Soccer, baseball titles)o Has a few strong licensed titles (Yû-Gi-Oh)o Has developed strong franchises (Metal Gear Solid, Silent Hill)

Weak pointso Has a tendency to use and overuse licenses and formulas

Top-sellerso Metal Gear Solid 3: Snake Eater (PS2)o Yû-Gi-Oh (PS2/GBA)o Pro Evolution Soccer 5 (PS2)

Page 33: Video Games Basic

33 − January 2006

Capcom

The classiest-looking of all

Assetso Has developed strong franchises (Resident Evil, Onimusha, Devil May Cry, MegaMan)o Benefits from technical prowess on all platformso Can come up with very original titles

Weak pointso Often favours style over mattero Has produced uninspired sequels

Top-sellerso Devil May Cry 3 (PS2)o Resident Evil 4 (PS2/GC)o Onimusha 3: Demon Siege (PS2)

Page 34: Video Games Basic

34 − January 2006

Atari (Infogrames)

The other French video game company

Assetso Has access to strong licenses (The Matrix, Dragon Ball)

Weak pointso Difficulties to absorb its acquisitions

Top-sellerso Dragon Ball Z: Budokai 3 (PS2)o Enter the Matrix (PC/PS2/Xbox/GC)o Driv3r (PS2/Xbox)

Page 35: Video Games Basic

35 − January 2006

Other Key Publishers

SegaAssets: Strong franchises and recognized know-how

Weak points: Too many remakes and revivals

NamcoAssets: Ridge Racer and Tekken franchises

Weak points: Sometimes lacks creativity

Vivendi UniversalAssets: Movie franchises and Blizzard

Weak points: Game quality and overall situation

EidosAssets: Tomb Raider and Championship Manager

Weak points: Badly handled the Tomb Raider brand

Page 36: Video Games Basic

36 − January 2006

Some Key Developers

Game Freak (Nintendo)Pokémon

Naughty Dog (Sony)Crash Bandicoot, Jak & Daxter

Rockstar North (Take 2)Grand Theft Auto

Bungie (Microsoft)Halo

BlizzardWarcraft, Starcraft, Diablo

ValveHalf-Life

Page 37: Video Games Basic

37 − January 2006

Faces and Names

Ken KutaragiFather of the PlayStation, CEO of Sony Computer Entertainment Inc.

Hiroshi YamauchiLong-time, outspoken CEO of Nintendo (1949-2002)

Shigeru MiyamotoCreator of Donkey Kong, Mario, Legend of Zelda, Pikmin.Currently head of R&D at Nintendo

Peter MolyneuxCreator of the “God Game”, with Populous, Black & White, DungeonKeeper, Fable, The Movies

John CarmackWith John Romero, founder of id software and creator of the “First

PersonShooter” with Castle Wolfenstein, Doom, Quake

Hideo KojimaCreator of Metal Gear Solid

Sid MeierCreator of Civilization, uses his name as a brand for life management

titles

Page 38: Video Games Basic

January 2006

Video Game Market – Consumers

Page 39: Video Games Basic

39 − January 2006

Video Game Market – Consumers

Identified core target: Males 9-35– 32% of active gamers in the US / 25% in Europe

– Male-to-Female ratio around 2.5

– Play an average of 10 hours a week in the US / 9 hours in Europe

– Purchase an average of 6 games per year in the US / 4 games in Europe

Three distinct groups– Intense / Heavy players (50%): playing daily, spend over 30% of their

leisure time in game-related activities, average age 16-18

– Medium players (35%): playing weekly, spend about 20% of their leisure time in game-related activities, average age 21

– Light players (15%): playing monthly, spend less than 15% of their leisure time in game-related activities, average age 25

Page 40: Video Games Basic

January 2006

Video Game Market – Glossary

Page 41: Video Games Basic

41 − January 2006

Glossary – Console Types

Home consoles are broken down based on processing power– 16 bits consoles: Super Nintendo (SNES)– 32/64 bits consoles: Sony PlayStation (PSX), Sega Saturn (SS),

Nintendo 64 (N64)– 128 bits consoles or current generation: Sony PlayStation 2 (PS2), Sega

Dreamcast (DC), Microsoft Xbox, Nintendo GameCube (GC)– Next generation consoles: codenames only – Sony PS3, Microsoft

Xenon, Nintendo Revolution (or N5)

Handheld consoles– Old generation: Nintendo GameBoy (GB), Nintendo GameBoy Color

(GBC)– Current generation: Nintendo GameBoy Advance (GBA), Nintendo

GameBoy Advance SP (GBA SP)– Upcoming: Nintendo DS (DS), Sony PlayStation Portable (PSP)

Page 42: Video Games Basic

42 − January 2006

Glossary – AAA Titles

What is a ‘AAA title’?– The name is taken from the stocks and bonds rating system– AAA bonds are bonds of the best quality, offering the smallest degree of

investment risk. Issuers are exceptionally stable and dependable– AAA titles are hit titles of the best quality

How much sales does a AAA title generate?– Depends on the console format, the timeframe in the console cycle, the installed

base and the country– Better to use a definition based on relative rank rather than sales

– IDG defines a AAA title as one ranking among the top five titles based on unit sales, and a A title as one ranking between 6 and 20 for the year

But really, how much?– For the US in 2002: PS2 / 660K, Xbox / 225K, GC / 175K, GBA / 270K, PC /

270K

Page 43: Video Games Basic

43 − January 2006

Glossary – Video Game Categories

Categories are a way to look at the market by regrouping titles by gameplay.

Categories allow to segment the video game market in new, pertinent and trend revealing ways.

– Sports – The main appeal to the player is the sports universe– Action / Adventure – The main appeal for the player is to progress through a

story and a universe, using a mix of game mechanics (combat / shoot / puzzles…)

– Vehicle / Piloting – The main appeal for the player is to master the given vehicle(s)

– Shoot – The main appeal for the player is to aim and shoot– Combat – The main appeal for the player is to master techniques to beat his

opponent in a spectacular way– Strategy – The main appeal for the player is to progress by making the right

decisions regarding resource management or units management– Family games – The main appeal for the player is to have immediate fun playing

a simple game that is usually non-violent. Within each usually short session, players don’t create, build or progress

Page 44: Video Games Basic

January 2006

Video Game Demos

Page 45: Video Games Basic

45 − January 2006

Super Mario Sunshine (GC)

Mario is back!– Publisher: Nintendo

– Developer: Nintendo

– Category: Action / Adventure

– Launched for the GC on August 27th, 2002

– Sales of over 1.6 million units for the US (end Oct ’04)

Key features– Water and liquid effects : 2D reflection, 3D deformation

– Combination of platform and “watering” gameplay such as jetpack, cleaner and rocket

– New ropes walks

Page 46: Video Games Basic

46 − January 2006

Grand Theft Auto: San Andreas (PS2)

Unlimited freedom in today’s California– Publisher: Take 2

– Developer: Rockstar North

– Category: Vehicle / Piloting

– Launched for the PS2 on October 26th, 2004

– Sales of over 2 million units in one week in the US alone

Key features– Mix of gameplay: driving (120 vehicules including scooters, boats and

cars) and shooting (40 weapons)

– Character evolution through a huge array of mini-gameplays

– Wider area to explore (at least 3 times the size of GTA: Vice City)

– Licensed soundtrack and top production values

Page 47: Video Games Basic

47 − January 2006

Mario Kart: Double Dash!! (GC)

The funniest racing game– Publisher: Nintendo

– Developer: Nintendo

– Category: Vehicle / Piloting

– Launched for the GC on November 17th, 2003

– Sales of over 1.7 million units for the US (end Oct ’04)

Key features– The new version of the Nintendo classic (previously released on the

SNES, N64, GB and GBA)

– Introducing the new two-characters karts

Page 48: Video Games Basic

48 − January 2006

Halo 2 (Xbox)

The Xbox “Killer App” gets a sequel– Publisher: Microsoft

– Developer: Bungie Software

– Category: Shoot

– Launched for the Xbox on November 11th, 2004

Key features– Hollywood-like experience through overall direction, graphics, sound

effects

– Feeling of immersion in a heated conflict

– Mix of gameplay: shooting / driving

– Online play added (no online previously in Halo)

Page 49: Video Games Basic

49 − January 2006

Pokemon Ruby / Sapphire (GBA)

Gotta catch them all! (again)– Publisher: Nintendo

– Developer: Game Freak

– Category: Action / Adventure

– Launched for the GBA on March 23rd, 2003

– Sales of over 4.1 million units for the US alone (end Oct ’04)

Key features– Tried-and-tested gameplay using the (hugely) popular Pokémon formula

– 100 new Pokémons (for a total of about 200 Pokémons in the game)

– Two-on-two Pokémon battle system

Page 50: Video Games Basic

50 − January 2006

The Sims 2 (PC)

Life is just a game– Publisher: Electronic Arts– Developer: Maxis– Category: Strategy– Launched for the PC on September 14th, 2004– Sales of over 720,000 units for the US alone (end Oct ’04)

Key features– First full sequel to Maxis’ best-selling original game The Sims– The characters now grow up, grow old, and eventually die– Characters express desires and aspirations – fortune, knowledge,

popularity, or romance– Update of the first game: full 3D graphics, extensive new building and

decorating options

Page 51: Video Games Basic

51 − January 2006

Half-Life 2 (PC)

Technologically perfect (or close)– Publisher: Vivendi Universal Games

– Developer: Valve

– Category: Shooter

– Launched for the PC on November 16th, 2004

Key features– The long-awaited sequel to the reference title on PC (over 2 million units

sold in the US alone)

– Story-driven gameplay with puzzle-solving elements

– Realistic physic model and top-notch graphic engine

– Elaborate AI and opponent reactions

Page 52: Video Games Basic

January 2006

Questions & Answers

Page 53: Video Games Basic

53 − January 2006

References / Bibliography

Market Knowledge tools available on the Ubisoft intraneto Market Essentials section on @UBIo Daily Competitive Review – a global and concise view of all main events in the

videogame industryo International Release List – a comprehensive view of upcoming titleso MOKA – user-friendly tool designed to regroup and analyze data regarding the various

videogame markets

On the Interneto All Game Guideo Gamespot – The History of Video Games

Some books to reado Bit Generation 2000 / Kobe Fashion Museum & Contemporary Art Center (2000)o Trigger Happy – The inner life of videogames / Steven Poole, Fourth Estate (2001)o 1000 Game Heroes / David Choquet, Taschen (2002)