Video Games Basic
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Transcript of Video Games Basic
January 2006
Video Game Basics
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)
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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
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!
January 2006
Video Games History
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
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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
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
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
January 2006
Current Generation Consoles
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
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
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
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
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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
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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
January 2006
Going Next-Gen
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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
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
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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
January 2006
The Video Game Market
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Video Games – A Cyclic Market
Sources: ELSPA / ScreenDigest
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%)
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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
January 2006
The Main Players
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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
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The Main Players
Nintendo
SonyMicrosoft
Electronic ArtsActivision
THQ
Eidos
KonamiSega
Capcom
Take 2
Ubisoft
Atari
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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)
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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)
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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)
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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)
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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)
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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)
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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)
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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
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
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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
January 2006
Video Game Market – Consumers
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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
January 2006
Video Game Market – Glossary
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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)
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
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
January 2006
Video Game Demos
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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
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
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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
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)
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
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
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
January 2006
Questions & Answers
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)