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Electronic Arts: Apple iPad "our fastest growing platform" for gaming

post #1 of 29
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EA chief executive John Riccitiello declared Apple's iPad its fastest growing gaming platform, noting that dedicated gaming consoles have slipped from 80 percent to representing just 40 percent of the game industry.

In an interview published by IndustryGamers, Riccitiello said the traditional cycle of new generations of gaming consoles that appear every five years is "not a particularly smart way to run an industry," in contrast to the model of Apple's iOS App Store, which supports continuous development that supports EA "putting out software every 90 days."

After noting the sharply diminished share of the gaming industry that traditional gaming consoles represent, in contrast to the rapid expansion of gaming revenues connected to Apple's iPad platform, Riccitiello also downplayed the value of hardware power to drive game sales.

"I would argue that theres more to be provided in terms of value for the consumer in micro-transactions and social experiences and driving those better in cross-platform gameplay between a console and a PC and a handheld device and a social network than there is supercharging graphics," Riccitiello said.

Last spring, Flurry Analytics reported that Apple's share of the US video game software market had grown by 500 percent.

However, as the iPad began to gain traction, game developers quickly began to report astonishing growth and support from customers, with one major developer noting its iPad launch as being "by far" the fastest selling and highest revenue generating game platform, thanks to promotion by Apple.

Since then, Apple's launch of iPad 2 resulted in a major leap in performance for games, which Epic Games' developer Tim Sweeney contrasted with conventional game consoles, describing "a 10-20x leap in performance every 7-8 years" for consoles, compared to the 9x leap Apple claimed for the iPad 2 in just one annual refresh.

post #2 of 29
Yet most people believed that iPad was doomed because it's just a big iPod Touch
post #3 of 29
Not a big surprise at all.

Eat it MSFT, Sony and Nintendo.
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post #4 of 29
Not surprising at all. The price points for traditional Console/PC games has been absurd for over a decade.
post #5 of 29
And here it comes now about how "the iPad is not a real gaming device" in 3...2..1
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post #6 of 29
Quote:
Originally Posted by JustReelFilms View Post

Yet most people believed that iPad was doomed because it's just a big iPod Touch

Quote:
Originally Posted by newbee View Post

And here it comes now about how "the iPad is not a real gaming device" in 3...2..1

Of course, expect the whiners and trolls to be eerily quite in their holes for the time being.
post #7 of 29
Quote:
Originally Posted by JustReelFilms View Post

Yet most people believed that iPad was doomed because it's just a big iPod Touch

The really sad thing is that the people who said this still believe it even in the face of massive sales and reports like this from EA. Just before Apple's blowout quarterly results some hater posted on a financial web site insisting that Apple sales were plummeting and the stock was doomed, all caused by the rise of Android of course. These people have blinded themselves and live in their sad RDF of hating Apple.
post #8 of 29
Quote:
Originally Posted by mdriftmeyer View Post

Not surprising at all. The price points for traditional Console/PC games has been absurd for over a decade.

Brand new games, maybe, but with few exceptions the prices drop off very rapidly after a couple months of availability. And sales happen frequently as well. Look through Steam and tell me those prices are absurd, especially for older games.

And I'd also take issue with this report given that all three major consoles are, at this point, growing very stale. A refresh is coming for the Wii early to middle of next year and I don't doubt that XBox and PlayStation will be far behind. It seems to me that you would need to compare iPad game sales in an environment of refreshed consoles to get a better picture of how things are going.
post #9 of 29
Quote:
Originally Posted by inkswamp View Post

Brand new games, maybe, but with few exceptions the prices drop off very rapidly after a couple months of availability. And sales happen frequently as well. Look through Steam and tell me those prices are absurd, especially for older games.

And I'd also take issue with this report given that all three major consoles are, at this point, growing very stale. A refresh is coming for the Wii early to middle of next year and I don't doubt that XBox and PlayStation will be far behind. It seems to me that you would need to compare iPad game sales in an environment of refreshed consoles to get a better picture of how things are going.

While you are technically correct in comparing a hypothetical market, you gotta go with the actual market you have in front of you. And this is what we have.

I would go so far as to argue that the era of the traditional home console on the 5-10 year refresh is over.

Consider that the player in this industry, the driver for the past 20 years has been Sony and the Playstation. This is true because they are the ones that managed to knock nintendo and sega down from their throne in home consoles almost 2 decades ago with the Playstation 1. Microsoft's entry into this space has largely been to compete with Sony, offering an alternative that is sometimes more popular and sometimes not.

Consider also that the driving force behind Sony's success has been physical media. With the PS1, the cd-rom (this was a big deal back then!). PS2 it was the DVD. PS3 it was bluray. Physical media does not have another 5-10 year cycle in it, it's done. Cooked. Gone. The primary driving technology behind Sony's rise with the Playstation is out of gas. MS and Sony have a shrinking sandbox, and I think fundamentally this EA exec is right. That world they created is unsustainable.

There's no doubt that Sony will attempt a PS4 same as MS will attempt an XBOX720, but they will not succeed like consoles have in the past. Their window of opportunity is quickly passing them by. Nintendo can probably continue to play in their own space with the Wii-U, but make no mistake it is their own space. Wii's sell because of Nintendo properties and it is the only way to get those properties. They have the ecosystem of Mario. It's good business for Nintendo but not good business for anyone else.

My point is this: the market is growing stale but there is no refresh these juggernauts can do that will save it. They will make the attempt, and it will stumble and fail. There's no driving reason for it to exist anymore since dvd's and blurays are very quickly becoming obsolete. Competition has grown too heavy, and is about to get heavier. People can get their gaming fix too many other ways, some of them far cheaper. I don't believe MS or Sony have it in them for radical reinvention, and that's what it would take. So the hope of them selling more $300 boxes to sell more $60 games is really a market that has at most 2-3 years left in it.
post #10 of 29
On one hand iPad success is largely due to a massive influx of casual gamers that enjoy the "more than good enough" games on iPad.

This results in a totally changed gaming market - but does not mean the hard core gamer market is dead.

Secondly, the old model of subsidized player and costly game is unlikely to be sustainable for much longer. These good enough games for $1 will put immense pressure to lower prices of console games as well.

Thirdly, games are becoming more about the concept than about heavy graphics. So it is possible for smaller and independent developers to fight against bigger players. These smaller developers work only on the new platforms. So there is large number of games available.

In a lot of ways this is similar to the Kodak story. Sony, MS and Nintendo made piles of money from disc/cartridge sales. Then the market shifted under their feet. In digital cameras as well, initially the digitals were just good enough. So the film guys kept thinking we are better for those who care about photography. Same story is going to play out here. In 2 years, these casual games will be at the same quality as the console games!
post #11 of 29
Quote:
Originally Posted by inkswamp View Post

Brand new games, maybe, but with few exceptions the prices drop off very rapidly after a couple months of availability. And sales happen frequently as well. Look through Steam and tell me those prices are absurd, especially for older games.

And I'd also take issue with this report given that all three major consoles are, at this point, growing very stale. A refresh is coming for the Wii early to middle of next year and I don't doubt that XBox and PlayStation will be far behind. It seems to me that you would need to compare iPad game sales in an environment of refreshed consoles to get a better picture of how things are going.

Brand new games or games less than a year old whether it be on PS3, XBox 360, or Wii are $55 and up.

The damn console costs $199.

See the problem here?

If the same ratio went for the iPad you'd be spending $125/game for a baseline on the iPad.

Sorry, but console games and PC games are ludicrously overpriced.
post #12 of 29
Quote:
Originally Posted by macarena View Post

On one hand iPad success is largely due to a massive influx of casual gamers that enjoy the "more than good enough" games on iPad.

This results in a totally changed gaming market - but does not mean the hard core gamer market is dead.

Secondly, the old model of subsidized player and costly game is unlikely to be sustainable for much longer. These good enough games for $1 will put immense pressure to lower prices of console games as well.

Thirdly, games are becoming more about the concept than about heavy graphics. So it is possible for smaller and independent developers to fight against bigger players. These smaller developers work only on the new platforms. So there is large number of games available.

In a lot of ways this is similar to the Kodak story. Sony, MS and Nintendo made piles of money from disc/cartridge sales. Then the market shifted under their feet. In digital cameras as well, initially the digitals were just good enough. So the film guys kept thinking we are better for those who care about photography. Same story is going to play out here. In 2 years, these casual games will be at the same quality as the console games!

I agree completely. I like a few of the sports games (right now I am playing FIFA 11 to death on the iPad2) but the controls were too much - i don't have time for the learning curve (i work) but like a simple fun game. I hadn't gamed since I had a nintendo as a kid but the iPhone got me into it a little and the iPad games are a nice way to have some fun and relax for a while. I'll play maybe 1 or 2 games a day and some words w. friends. Before I never played.
post #13 of 29
Quote:
Originally Posted by REC View Post

My point is this: the market is growing stale but there is no refresh these juggernauts can do that will save it. They will make the attempt, and it will stumble and fail. There's no driving reason for it to exist anymore since dvd's and blurays are very quickly becoming obsolete. Competition has grown too heavy, and is about to get heavier. People can get their gaming fix too many other ways, some of them far cheaper. I don't believe MS or Sony have it in them for radical reinvention, and that's what it would take. So the hope of them selling more $300 boxes to sell more $60 games is really a market that has at most 2-3 years left in it.

Oh come on! It's not like the number of people seeking out immersive, high quality gaming experiences are suddenly going to disappear.

The console market is made up of core and non-core gamers and, yes I agree, the current console market will contract as non-core gamers find their leisure time used up by other activities and/or devices.

Sony have already seen this happen after losing the non-core gamer market to the Wii and seeing their own sales crash from around 140 million last generation to 50 million this generation.

However the PS3 (and the X360) continue to exist as there are still a large number of core gamers to sustain the existing console market.

This kind of thing is important to EA because they need to know where to target the shovelware. It's not so important to core gamers and it certainly isn't going to kill off consoles in 2 or 3 years time.
post #14 of 29
Quote:
Originally Posted by mdriftmeyer View Post

Brand new games or games less than a year old whether it be on PS3, XBox 360, or Wii are $55 and up.
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.
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Sorry, but console games and PC games are ludicrously overpriced.

Don't confuse cost with value.
post #15 of 29
Look, you can say what you want about iPad and iPhone gaming, but i like gaming with a controller with buttons, with state-of-the-art graphics and surround sound. I like immersive Zelda/Uncharted type games. I don't care how shallow that sounds.

Maybe in a couple of years that'll be available on iOS, but at the moment, i only really like Angry Birds, Words with Friends and Hanging with Friends -- all of which i play regularly.
post #16 of 29
Quote:
Originally Posted by mdriftmeyer View Post

Sorry, but console games and PC games are ludicrously overpriced.

If you think video games are overpriced, you must be totally ignorant of the effort that goes into creating them.

A modern game like Red Dead Redemption includes 20-30 hours of gameplay, features Hollywood voice talent and has a soundtrack by a successful recording artist. Games are as expensive to make as any film.

If you find these games overkill then not to worry - All platforms include an online marketplace for simpler, cheaper games (Xbox Live Arcade, Playstation Store, Steam indie titles...).
post #17 of 29
Quote:
Originally Posted by RichL View Post

If you think video games are overpriced, you must be totally ignorant of the effort that goes into creating them.

Sorry, but this is the ignorant comment. Value has nothing to do with the cost or effort that goes into the production of any product. It has everything to do with the entertainment value to the customer of the end product.

Don't believe this? One word: Gigli

Quote:
Originally Posted by RichL View Post

A modern game like Red Dead Redemption includes 20-30 hours of gameplay, features Hollywood voice talent and has a soundtrack by a successful recording artist. Games are as expensive to make as any film.

Again, you're confusing production cost with value. Here, let's try another tack:

A modern game like Angry Birds includes 40-50 hours of gameplay, top quality graphics & audio for frickin' 99 cents!

The world is changing, and for better or worse, expensive console games are on the way down. Perhaps that means we won't get "Hollywood voice talent" anymore. BFD. At the end of the day, the market gets to choose what they want to pay for at what price points, and their collective voice is deafening.
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post #18 of 29
I think Sony (and maybe Microsoft too) saw this shift quite a while ago.

Sony shifted the PSP to a cartridge-less system two years ago.

The Playstation network lets you download a lot of the PSone and other casual games for pretty cheap to play on your on Ps3 and PsP.

They have online music, movie and TV stores. They also have virtual social world (part of PS Network). Facebook, etc is there through the built in internet.

They have made a big shift from physical media, however the big games that make them the most revenue, still don't really have a viable alternative due to data size. Downloading a 40GB file over the net could take ... too long.

A revamp in design and marketing could shift this in their favor easily.
The PS3 is in many ways like the iPad, Sony pushes out OS updates frequently, your safe in their garden and don't really have to worry about programming, simplified interface, online media store, online games, point click pay download use - no real computer knowhow required.

I think there is a possibility, if done right, that the consoles continue their erosion of the desktop from one side and the tablets erode from the other side, leaving only the hardcore computing power users left in that market, long before the game consoles go away. If they market right.
post #19 of 29
Nintendo posted a loss of $328 million... makes me wonder how the others are doing.
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post #20 of 29
Quote:
Originally Posted by island hermit View Post

Nintendo posted a loss of $328 million... makes me wonder how the others are doing.

Yikes! I would have thought they'd be turning a decent profit even if not growing YoY.
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post #21 of 29
Quote:
Originally Posted by Blah64 View Post

A modern game like Angry Birds includes 40-50 hours of gameplay, top quality graphics & audio for frickin' 99 cents!

40-50 hours of gameplay? Top quality graphics and audio? Are we playing a different game?

Angry Birds is a time-waster. No-one sits down of an evening and thinks "Man, I'd love to spend 3 hours playing Angry Birds tonight. I just love the music!". It's a game for commuters and the constipated.

It's a good game but I doubt Portal 2 lost any sales to it.

Quote:
The world is changing, and for better or worse, expensive console games are on the way down.

Console games are not on the way down. In fact, the industry reaches record revenues of $62.7 billion last year and is expect to do even better this year. Not bad considering the global economic downturn and the current end-of-cycle home consoles. There's room in the market for both 99c time-wasters and $55 experiences.
post #22 of 29
Quote:
Originally Posted by RichL View Post

40-50 hours of gameplay? Top quality graphics and audio? Are we playing a different game?

Angry Birds is a time-waster. No-one sits down of an evening and thinks "Man, I'd love to spend 3 hours playing Angry Birds tonight. I just love the music!". It's a game for commuters and the constipated.

It's a good game but I doubt Portal 2 lost any sales to it.

Console games are not on the way down. In fact, the industry reaches record revenues of $62.7 billion last year and is expect to do even better this year. Not bad considering the global economic downturn and the current end-of-cycle home consoles. There's room in the market for both 99c time-wasters and $55 experiences.

1) I've put more hours into Angry Birds than I have any other video game in my life. I've put more into other games, in general, like Scrabble-based games and chess in my lifetime, but never so much into one game for such a short time frame of existence.

2) I would expect the readers of this forums that play MMORPGs to have put in thousands of hours but that's what they are designed to do with their monthly subscription model.

3) Your comment on Portal 2 not losing any sales from Angry Birds doesn't work. You need to consider the loss of a console sale to an iOS-based iDevice, other smartphone, or 'PC' to see how the market is pulling away from consoles.

4) Your last paragraph reads like RiM's CEOs arguing that the company is doing better than ever when in relation to their market they are shrinking quickly within a fast growing market. What is the percentage of profit from console gaming YoY. Is it decreasing or increasing?

5) All games are time wasters.
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post #23 of 29
I think quite a few of us who grew up with consoles like Master Systems, Megadrives, NES, SNES, PS1 etc now have jobs / families and far less time to game. iPhone / iPad games are quite often a nice dose of nostalgia that can be enjoyed anywhere from a few minutes to a few hours (when / if we get the time).

Meanwhile the kids these days playing their PS3s and Xbox's can play those games AND mobiles / tablet games. Apple can dip into both markets with ease.
post #24 of 29
Solip pretty much said it all. I will echo this, in case you missed it:

Quote:
EA chief executive John Riccitiello declared Apple's iPad its fastest growing gaming platform, noting that dedicated gaming consoles have slipped from 80 percent to representing just 40 percent of the game industry.

That's not a subtle shift. Rich, your comments are so biased that all I can assume is you're part of the gaming industry, and frustrated where things are headed. Just like the music industry, things change.

The only thing I'll agree with is that there's room for many different kinds of gaming experiences. But there is also no doubt that consoles and their $50-60 price tag per experience are playing a smaller and smaller role.
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post #25 of 29
The die hard console supporters remind me, very much, of the people who absolutely could not accept, a few years back, that Nokia and/or RIM were in trouble. Remember? There were all these posts sort of semi-angrily pointing to various sales numbers, market share, evidence of historical might, and just generally insisting that such giants couldn't possibly be rendered irrelevant by the likes of Apple. Different markets, they said. RIM people needed to get "real work done" and Nokia sold phones to every man, woman, and child on the planet while creating stunning hardware, they said. "Hardcore phone users" weren't going to give that up for an iToy.

Markets change, habits change. One thing that never seems to enter into the above thinking is that patterns of consumption change as populations age and are supplanted by younger folk. Just because there's been this thing called "hard core gamers", why should we expect that type to endure forever? Why should it be surprising that the hard core gamer's children might have a different idea about what constitutes a compelling gaming experience? And it's not like that process takes a long time-- 5 years and you've got an entire generation of people who entered and have moved nearly through their teens. They've grown up with new devices, new ways of thinking about electronic interaction, and vastly more amusements competing for their time than the folks that made the beloved console games successful.

Why is gaming somehow immune to the forces of rapid transformation that has so altered the digital landscape in every other sphere? Are gamers really so blinkered as to believe that their preferences, the stuff they grew up with, the kind of game play they prefer is the only possible model and will endure forever?
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post #26 of 29
Quote:
Originally Posted by AppleInsider View Post

... However, as the iPad began to gain traction, game developers quickly began to report astonishing growth and support from customers, with one major developer noting its iPad launch as being "by far" the fastest selling and highest revenue generating game platform, thanks to promotion by Apple. ...

How would you define "hard core gamer"? Let me count the ways:

1. Anyone who spends more than $1000 on a modded Windows PC to get a really high frame rate.

2. Anyone who spends more than 2 hours a day playing on a game console connected to a TV.

There are probably more definitions for "hard core gamer" but you get the idea. Anybody who spends way too much time and/or money on gaming and takes it way too seriously.

So how many people do you know who are "hard core gamers"? (My guess is few.) And how many people do you know who own an iPad or iPhone or iPod touch? (My guess is many.) Yes, I know that a tiny fraction of AppleInsider readers are either 1. serious Mac gamers or 2. PC gamer trolls and therefore know many other "hard core gamers."

But really, there are 200+ million iOS devices out there. Ready to run any of the tens of thousands of great games available, cheaply, on the App Store. And after barely a year and a half, iPad is "by far" the biggest game platform for at least one major developer.

No liquid nitrogen cooling required.

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post #27 of 29
Quote:
Originally Posted by addabox View Post

The die hard console supporters remind me, very much, of the people who absolutely could not accept, a few years back, that Nokia and/or RIM were in trouble. Remember? [...]

Agree. Technology moves on. Remember Laser Discs? In case you don't, they were 12" plastic discs, kind of like giant CDs, and they contained analog data that could be played back through a Laser Disc Player and displayed on your TV: http://en.wikipedia.org/wiki/Laser_disc.

Anyway, LDs were the home videophile's friend back in the '80s and '90s. The average movie cost about $50-$70 for a new release, the players were expensive, and "bit rot" plagued some discs as the metal inner layer decayed over time.

Fast forward to today. DVD and Blu-Ray have completely replaced LD. Smaller, cheaper, faster, better. Remind you of anything in the gaming industry? (Hint: expensive consoles and games.)

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post #28 of 29
Quote:
Originally Posted by addabox View Post

The die hard console supporters remind me, very much, of the people who absolutely could not accept, a few years back, that Nokia and/or RIM were in trouble. Remember? There were all these posts sort of semi-angrily pointing to various sales numbers, market share, evidence of historical might, and just generally insisting that such giants couldn't possibly be rendered irrelevant by the likes of Apple.

Why should it be surprising that the hard core gamer's children might have a different idea about what constitutes a compelling gaming experience?

Are gamers really so blinkered as to believe that their preferences, the stuff they grew up with, the kind of game play they prefer is the only possible model and will endure forever?

At the launch of Youtube, would it have been reasonable to suggest that people would stop watching feature length movies in favour of clips of babies waking themselves up with their own farts?

If you looked at the stats page alone, you'd probably conclude it would wipe out all other forms of video entertainment:

http://www.youtube.com/t/press_statistics

However volume isn't everything and that's what we're talking about with casual games. Casual games are simplistic, they are developed quickly and cheaply, they are sold cheaply and downloaded easily. This targets a high volume audience.

The profits aren't high though. Angry Birds has sold over 200 million copies but only made $70m.

Call of Duty Black Ops only sold 20 million units and yet generated over $1b profit and 7 million units on day 1. $650m profit in the first week. It has taken Angry Birds (the most popular casual game) 1.5 years to get to 1/10th of the profit margin of a popular immersive game in 1 week.

Youtube launched 6 years ago and we're still watching feature films.

In a few years time, people will still want immersive games. Let's remember that hardcore gamers of today grew up with casual games too like Tetris and Pong etc but they don't tell stories, they don't have depth of character and they don't involve the player enough to replace games that do.
post #29 of 29
Quote:
Originally Posted by SockRolid View Post

How would you define "hard core gamer"? Let me count the ways:

1. Anyone who spends more than $1000 on a modded Windows PC to get a really high frame rate.

Nope, that is not a hardcore gamer...THAT is a Grade A Moron.

A computer that can deliver a high frame rate for any game in recent years costs little over $400, and will not need to be updated for at least 5 years.
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