Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:
Last week GamePolitics editor Dennis McCauley declared in his weekly Joystiq column that E3 was dead. He is certainly not alone in his opinion. IGN's Craig Harris also pronounced the show dead on his blog, and EA CEO John Riccitiello said that he "hates E3 like this," vaguely threatening to simply have the publisher put on its own show in the future. And of course, the always reliable 3D Realms said that it wasn't attending E3 this year because it was "irrelevant".

A lot of people were disappointed with this year's E3, perhaps even more so than what most considered a horribly executed 2007 E3. As someone who has never been to E3, I suppose I don't have any personal experience to draw from to tell you how much worse this year's E3 was than the ones from 2006 and before. However, as someone who has anxiously awaited and followed E3 for many years, I wonder whether a lot of this reaction is overblown.

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

I've temporarily relocated to Seoul for the summer to work for a consumer electronics firm, so I thought I'd spend a little time detailing some of the differences in gaming culture here in South Korea, and the impact that infrastructure has on the gaming business. In short, there are two notable differences in the Korean gaming industry relative to the United States. First, PC games are significantly more popular than console games; and second, gaming is much more mainstream in Korean culture than it is even now in the States. These differences have created structural factors in the country that have profoundly shaped the nature of the industry from a business perspective.

Perhaps the most salient factor is cultural - there is, as far as I can tell, almost no stigma attached to gaming in the country (at the least, it's viewed as a mainstream activity). A number of Korean acquaintances have commented on the Korean fascination with the new and fashionable: when one co-worker went apartment-hunting with a real estate agent, the agent refused to show him any houses that had been previously occupied, on the assumption that they would be of little interest. And part of that fascination seems to be technological, indicating a possible cause of Koreans' embrace of gaming as a form of entertainment. Indeed, I've seen countless people using a DS or PSP on the subway... and my cheap, used cell phone has more free games on it than I've played on any phone since I began using them in the first place.

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

Apparently, there were not enough word-spreading mouths to begin with, as it only sold 60k copies in its debut month (which includes almost all of May, since it launched May 6^th). Despite what EA's CEO said, this was probably not what EA had hoped for with a game it had collaborated on with the most profitable director in the world. So, what happened?

Can a game spin off into a successful TV series?

Many of us still remember waking up early on Saturday mornings to catch the latest episode of "Captain N: The Game Master" or rushing home after school to watch "The Super Mario Bros. Super Show!" (or if we were lucky enough to be watching on a Friday, "The Legend of Zelda"). While these shows weren't exactly something to write home about, it was certainly exciting to see some of our favorite Nintendo characters come alive in the form of a cartoon. In the last few years the wildly popular Pokemon games have spawned a long-lasting TV show and more recently, a Viva Piñata TV series was launched side-by-side with the game, in what was a moderately successful cross-marketing strategy (the kid's show is still running today and the game posted slow but steady sales, developing somewhat of a cult following). Clearly, there's some precedence for games to become the basis for a TV series, but these have all lacked one basic element that all the games required: interactivity.

So it is with some interest that the LA Times reports that Sci-Fi channel is teaming up with Trion World Network to create (simultaneously!) an MMO and a TV show based on it. Sci-Fi channel president Dave Howe says that it's the "Holy Grail". A subscription-based MMO and a successful television series that are able to successfully leverage each other could certainly be a potential windfall. However, while the details are somewhat scarce at the moment, from what I can glean, there are some major hurdles that this joint venture will need to overcome.

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:
Guitar Hero IV is on its way, and with it are coming individual games themed around Metallica, Aerosmith, and others. This follows the strategy highlighted by Activision CEO Robert Kotick last year, in which the executive promised shareholders to fully "exploit" the company's franchises on an annual basis. The immediate response of gamers was almost exclusively negative, not least because the prospect has connotations of poor quality and high pricing. Although Activision may be the only company to announce its strategy so publicly, it's hardly the only adopting these kinds of tactics. If it irritates gamers so much, why do companies in the industry do this? And is it as bad as it seems?

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:
When EA announced that Spore and Mass Effect (PC) would have a DRM program that did performed online verification every 10 days, it generated a massive backlash amongst the gaming community. Many people, who were originally excited about Spore and Mass Effect, now claimed that they would not purchase the games, solely because of the DRM. To be honest, I'm no fan of DRM either. It basically treats all legal customers as potential criminals, and seems futile anyway, as anyone with an internet connection can typically find ways around the DRM. The only people it probably deters are those with little technical savvy and who just want to share a game they bought with their friends and family. The amount of actual sales that would be lost to this is probably pretty limited. With all that said, I'm glad that EA has backed off this new DRM and scaled it back to just an initial online verification. Given the current state of PC gaming as well as the traditionally more "accepted" versions of DRM (like the initial online verification), however, I didn't find this new DRM to be all THAT much worse, particularly with some slight improvements to it, such as allowing a manual verification and extending the timeframe for re-verification slightly (say, to 30-60 days instead of every 10).

The reason for this has a lot to do with what's been going on with PC gaming in the last few years. While the "death" of PC gaming has been talked about for years, it isn't quite here. The landscape is just shifting. While the total NPD sales for each year has been decreasing, other avenues of making money have been developed. For instance, subscription-based games (mostly MMOs, but also games available on GameTap), cheaper more casual downloadable games (eg, PopCap Games), and even free, ad- or feature-driven games (eg, Dungeon Runners, Battlefield Heroes, Quake Zero) make up an ever increasing portion of PC-based revenue. Thus, the actual retail sales are taken up mostly by a few casual games, MMO starter kits or expansions, and maybe the occasional shooter or RTS game. Take, for example, the most recent NPD PC numbers for the week of May 4-10:

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

It's not unreasonable for a gamer to look at their console and wonder how it might help them professionally. Being financially rewarded for doing something we love has been the holy grail of gaming (and indeed, most hobbies) since well before talk of gaming leagues and Wizard-style competitions. But despite our best intentions, it's rare to find a cubicle-dweller whose carpal tunnel syndrome is caused by a controller rather than Microsoft Office.

And this is why I was interested to read a recent post from Massively on the benefits of putting MMO experience on your resume. Job hunting is something that almost everyone needs to do at least once, and since government statistics suggest that new workers are now likely to switch jobs 7-10 times in their lives, doing it well is a key skill set. So, can games help you here? My answer is a qualified "maybe."

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:
According to several "analysts" last week, the successful launch of Grand Theft Auto IV threatened to sink the box office returns for Iron Man. The thinking went that since the game and the movie both target primarily the same demographic (males 18-29), that demographic would stay home and play the game instead of going to see the movie. While it's impossible to declare with complete certainty, as Variety did, that GTA IV had absolutely no effect on Iron Man's opening (with $104.2M in domestic receipts, $201M worldwide, and a release date for a sequel already announced), whatever effect it may have had was clearly not enough to significantly impact the movie. But clearly, many had predicted that the game could adversely affect box office receipts. It makes me wonder -- have we ever seen this sort of effect before?

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

Much as many people expected, Activision public relations recently confirmed that (one song aside) Aerosmith's catalogue will remain a Guitar Hero-exclusive for the foreseeable future. There's a considerable amount of public speculation as to whether or not this will spark future fights over exclusive content, and I'm inclined to assume that it will. The incentives are just too strong to avoid future conflict – the battle between Guitar Hero and Rock Band is a great example of the prisoner's dilemma.

The prisoner's dilemma is a common building block of game theory, which is often used in business strategy to describe potential competitive responses or explain company actions. It's so named because of the story that was used to illustrate its problem. Imagine two fugitives that have robbed a bank and were just picked up by the police. Each man is taken into a separate room, and the police make the following offer to each: if they confess to the crime and help to implicate their partner, they'll receive an extremely lenient sentence. However, if they stay quiet and their partner implicates them, they'll receive the maximum penalty - while their partner gets off scot-free. Of course, if both confess, the evidence they provide isn't particularly useful, and they'll each go to trial, ending up with a sentence somewhere in the middle. What should each man do?

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:
In my last column I suggested that, if Microsoft is to make a Wii-like controller, it should still continue to focus on the "traditional" types of games that have so far made the 360 a success, because Nintendo had already basically wrapped up the "casual" crowd. I also mentioned that the only Wii games that are apparently selling are Nintendo games and some casual games. And with that in mind, the New York Times published an article on Monday detailing that, while the Wii hardware is selling well, even seemingly popular Wii software still has some trouble continuing to sell to the Wii audience.

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

Earlier this week, Next Generation published a list of the top 100 selling games of last year. Some sites used the list as an opportunity to analyze the impact of review scores on video games, or to alternately lament or exalt the state of gamers' sophistication, but I'd like to address one of the more perennial issues of the gaming community: Whether artistic and financial success are ultimately incompatible in this industry.

This isn't a new debate for most of us. The conventional wisdom is that, with few exceptions, the market rewards the common denominator: Cheap, quick, and easy games will beat sophisticated titles any day of the week and twice on Sunday. You can see variations on this theme throughout the gaming media; the notion that indie games can't make money, that gamers are violence- and sex-obsessed children, that stories and ideas just don't matter. Yet I'd argue that this conventional wisdom is wrong, and getting more so by the day.

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

With the Wii's apparent runaway success this generation, there's no doubt that both Sony and Microsoft are trying to figure out just what they can do – either in this generation or the next – to tap into the formula that's worked so well for Nintendo. Sony, in a seemingly obvious attempt to blunt the impact of Nintendo's newly styled controller, added motion sensitivity to their controllers before the PS3 launched. More recently, there have even been rumors that Microsoft may be prepping their own version of the Wii Remote to launch later this year for the 360. Is this really the answer Microsoft is looking for to combat the Wii?

There are a lot of problems with this, although the common "doomed console peripheral" theory actually may be the least of them. The success of Guitar Hero and Rock Band has proven that, at least when bundled with an attractive game, console owners are just fine with buying new controller peripherals for their systems.

No, the biggest problem for Microsoft here is simply a matter of audience. Microsoft has been working hard on wooing the "casual" audience, and has only rarely succeeded. Even a "hardcore" game like Halo 3 probably wouldn't sell 7.5 million copies without some "casual" players. But a quick look at the top-selling software for each system makes it extremely obvious how different the audiences already are for the two systems.

Each week Jeff Engel and Geoff Brooks rendez-vous on Joystiq to contribute Counting Rupees, a column on the business behind gaming:

The politics of video games are well covered by other websites, but it's worth spending a little time to think about the business implications of politics on the industry and its customers -- particularly in light of recent events like the UK game study. Just how much day-to-day impact does this maneuvering really have? For all of the angst found in the gamer community over issues like the latest ridiculous violent video game ban, I'd argue that the average gamer is actually pretty well-insulated from the mess.

So who does get affected? Well, the answer lies at least in part in figuring out the touch points that politics has on politicians, developers and publishers, and the people who buy and sell games in the first place. At its most basic, there are some essential conflicts of interest between these groups that get mediated by politics, and we can use them as the lens by which to think about this further.

Let's start off with consumers themselves. What do they really want? Well, game players want to be able to play whatever they want, whenever they want to play. But they're not the only stakeholders here; for younger players, parents play an important role as intermediaries in determining what games get purchased and thus what games are available. Parents, more than anything, want control: the ability to control what their children play and filter out products that they view as offensive or objectionable. Industry figures have similarly simple incentives. They want to satisfy players' demands and supply the games they want -- that's how they make money. It's in their best interests to avoid any restrictions whatsoever on what they can produce or how they sell it. Retailers also have to worry about their brand image and how they're publicly perceived, which is why Wal-Marts don't stock Adults-Only rated games.

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

When Guitar Hero 3 launched last year it was an immediate success, selling out at a fairly quick pace throughout the holiday season. Following just behind it was Rock Band, selling very well, but not nearly as quickly as Guitar Hero. So far, all versions of Guitar Hero III have sold about 9.1M copies, versus just roughly 1.5M for Rock Band. Of course, part of the discrepancy lies in the fact that Rock Band launched on two platforms while Guitar Hero 3 launched on four, but that is about to be remedied with Harmonix's recent announcement of Rock Band for Wii. While Rock Band was a more ambitious game and representative of an evolution of the music game, it did seem like Activision may have made the right choice in buying the Guitar Hero publisher (and thus the Guitar Hero brand), but not the developer. With so much brand awareness already built into Guitar Hero, was there any way that Harmonix could possibly top the original creation that it no longer owned the rights to?

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

Apparently, 2008 is the year of the PS3. After what most consider a very shaky first year, the media is abuzz with a comeback for the company that was once king of consoles. EGM's March issue proudly proclaims on its cover that it's "The Revenge of the PS3". EDGE's December issue was entitled "The Empire Strikes Back" and even Joystiq's PS3 Fanboy has given us 10 reasons why the PS3 is back in the swing of things. Some analysts have proclaimed that the PS3 will do at least as well as the 360 in 2008, and others have the PS3 edging out the 360 by 2010 or even the Wii by 2011. Clearly, everyone is pointing to 2008 being a turning point of sorts for the Cell-powered beast. But is it actually true?

Let's focus on, at least initially, Sony's battle against the 360. Certainly, the PS3 has a lot of things going for it. Blu-ray has officially won the next-gen DVD war; upcoming games, such as Metal Gear Solid 4, Killzone 2, and LittleBigPlanet show tremendous potential; and it has seemingly found a price point that people are willing to pay (as they did originally for the 360). In the US, at least so far this year, Sony has managed to outsell the 360 according to January and February NPD figures. But will it be enough?