See, just because Tekken 6 shipped 2.5 million copies doesn't mean its sold 2.5 million copies all over the world. Hence the whole bird-in-the-hand/bush analogy that I messed up. I mean that'd be more impressive, right? If Tekken 6 sold 2.5 million copies worldwide instead of just shipping them?

Nevertheless, Gamez reports that the sixth installment of Namco Bandai's brawler is doing pretty well for itself. So let's all join in a collective "Yatta!" and wait for one of those 2.5 million copies to magically wind up in our living rooms.

「鉄拳6」全世界で250万本出荷 [Gamez]

But that's nothing new for the market. Compare Bayonetta's sales to these other games to see just how much day-one sales favor PS3 over 360 in Japan:

Devil May Cry 4
28,000 (17 percent of sales) on 360 / 140,000 (83 percent of sales) on PS3
Soul Calibur IV
35,000 (38 percent of sales) on 360 / 57,000 (62 percent of sales) on PS3
Street Fighter IV
28,000 (33 percent of sales) on 360 / 58,000 (67 percent of sales) on PS3

See the pattern? I know I do, and I'm bad at economics.

Rock on for not being the nail that sticks up, Bayonetta!

PS3・Xbox360「BAYONETTA」好調な滑り出し、映画「THIS IS IT」紹介、他 [Ameblo]

Huang, co-founder of Red Octane and parent of the Guitar Hero franchise, went so far as to predict that this generation would be the last to own physical media. In five or 10 years, he said, everything would be digital download-based.

Moore — current head of EA Sports and former overseer of all things Xbox — agreed for the most part. He said that the console model of video games (where you get one complete game on a disc for $60) was a "burning platform." As in, do you stand on a burning platform and face certain death or jump into the waters of digital distribution and face probable death?

Clearly, you want the digital distribution. Right?

Despite Moore and Huang's faith in the future of digital distribution, however, both developers are releasing three to four disc-based games on console a year. Complete with plastic peripherals which cost even more money to manufacture than video game software, mind you.

Huang explained Red Octane's Activision's motivation behind ubiquitous releases as accessibility. "We need to give [our users] channels to access additional content," he said. Not everybody is ready for the DLC revolution, apparently, so they have to keep putting out physical media for the next five to 10 years. Or however long it takes for my physical-media-dependent generation to die out and accept digital everything.

Young had a slightly different take on the digital future. He would, because he develops games almost exclusively for the iPhone like Rolando and Eliminate. Young said episodic content doesn't work because you can't chop a complete game into tiny pieces. Rather, said Young, game makers should be looking at ways to monetize usage. To him, this means making a game that's free to play and then finding ways to trick you into microtransactions. Like shelling out for extremely nerdy clothing for your virtual avatar in a free-to-play role-playing game.

It all comes down to the fact that the video games industry is risk-averse. If console makers believe that the next generation of gamer won't shell out for $60 for a disc that gets scratched up eventually anyway, then we can expect the next iteration of console to not have a disc tray. And when that happens, maybe we can all stop shelling out for plastic guitars and a new copy of what's essentially the same football game every year.

What analysts and strategists are calling "unsubstantiated chatter" had a profound effect on EA stock today, rising 8.1 percent to $20.01 during Nasdaq trading this afternoon.

"There's talk that Microsoft might be interested in acquiring Electronic Arts. It's unsubstantiated chatter, but it's out there," said Frederic Ruffy, an options strategist at WhatsTrading.com in New York.

And sometimes being out there is more than enough. Microsoft shares also rose during the day, gaining 1.1 percent to $26.05, despite analysts claiming that such a move makes no sense whatsoever.

But Trip Chowdhry, an analyst at Global Equities Research, said Electronic Arts was not on Microsoft's "radar screen" based on his industry contacts. "Our contacts just don't see Microsoft buying Electronic Arts, no synergies whatsoever, and also not Microsoft's corporate primary focus right now," Chowdhry wrote in an e-mailed note.

A quick glance about the internet finds that analysts largely agree - this doesn't seem like a likely move. Still, we've reached out to Microsoft and EA alike, and will update the story once we receive any response.

UPDATE: We just received a comment from Microsoft. "Microsoft has no plans to purchase Electronic Arts." Clears that right up, now doesn't it?

Electronic Arts stock up on takeover talk-traders [Reuters - Thanks David!]

"As an industry, we're in denial about the problems with retail," Braben argued, citing a common myth that online distribution will become the norm in the coming generation.

"Retail is killing the longevity of our titles," he said, with the massive used game market contributing to the problem. "The industry sees none of this" when it comes to preowned sales.

Meanwhile, the retail film industry puts its new films front and center, and the stores in which movies are sold are often more attractive and inviting than game stores.

"What's worse, if you ask for a new release, they'll offer you a used one, and it's not even much cheaper," said Braben. "What it's doing as an industry, means the long tail, which is what games rely on, is going to go away. And relying on online is killing ourselves."

Braben suggested selling higher-priced copies of games to rental stores, then lowering the prices of not-for-resale copies — thus making new games more affordable for players, while introducing additional revenue streams for rentals.

"We can add value for people who have actually bought the game," he said — designers should come up with additional content that rewards those who buy games new.

Well, I'm not sure if his suggestions are necessarily going to fix things (certainly won't make it any easier on retailers), but Braben sounds pretty passionate and inflamed about a lot of these topics. It's a quick and pretty interesting read, even if you don't agree with his solutions.

MIGS: Frontier's Braben On Retailers 'Killing The Longevity' Of Games [Gamasutra]

Net revenue was RMB265.20 million or US$39.06 million, a decrease of 34.6% from RMB405.25 million a year ago, mainly on lower online game net revenue, which was adversely impacted by adjustments made to the monetization features within ZT Online. Analysts expected revenues of $63.41 million for the quarter.

Gross profit declined 40.9% year-over-year to RMB212.5 million or US$31.3 million, and gross profit margin fell to 80.1% from 88.8% in the third quarter 2007.

Active paying accounts for online games declined 31.6% to 937 thousand, and average revenue per user dropped 4.4% to RMB282.1. Meanwhile, average concurrent users for online games rose 9% from last year to 543 thousand.

Wowee. The interesting thing here is in many Chinese articles I've read, players have cited 'cost' as a reason they are moving from WoW; clearly, some players are not spending less on domestic games. Even considering the drops in revenue and other indicators, sounds like Giant is steaming along — perhaps their unholy mix of 'illicit' MMO features being sanctioned really is just the ticket.

Giant Interactive Q3 profit falls; issues Q4 revenue forecast [RTTNews via PlayNoEvil]

DP: Let's look several years into the future for a moment. Should I even bother learning today's skills? Surely they'll have completely changed by the time I get out of college? What kinds of jobs are absolutely 'rock-solid', and will undoubtedly still be around five to 10 years from now? And what new jobs do you think might exist that nobody has quite pinned down just yet?

GN: Specialization and hierarchy are the norms in film production, and are antithetical to what needs to happen in the games industry. The reason for that distinction is that the game industry is more focused on invention than on repeatability/measurability. Programmers that can draw are going to be in much better shape than an animator specializing in putting talking mouths on cats. The solutions of tomorrow are not going to fall into the production or organizational categories of today.

It's a quick read and has some worthy tidbits if you're aiming for a development career.

Valve's Gabe Newell on Becoming a Game Developer [GameCareerGuide]

... the Wii's dominance in the United States is equally true in Europe. In both regions, Wii sales are significantly higher than the combined sales of both the Xbox 360 and PlayStation 3.

Microsoft and Sony have gone back and forth in public statements over which company's HD console is ahead in Europe. While recent price breaks on the Xbox 360 have probably changed the dynamic significantly, it is worth taking stock of the data reflected in the graph above.

For the 9 months of sales shown in each year, the Xbox 360 appears to have had sales of around 2.1 million systems since 2006 and the PlayStation 3 has garnered sales of over 2.2 million systems since 2007. However, these figures are just for the U.K., Germany, France, and Spain, so they do not cover all of Europe.

Worth a read, especially if you're a statistics geek.

The Mushroom Growth Plan: Inside Nintendo's Numbers [Gamasutra]

Hoffman notes that subscriptions have a downside: When it looks like there's a fixed monthly price until eternity, even a game's most dedicated fans can eventually balk. Many publishers entice retention with discounts for longer commitments, but Hoffman also suggests that creating a demand for multiple subscriptions per user can prolong the average customer's lifetime value.

Games can also offer add-ons to the base subscription — Hoffman notes that these "allow more devoted and less price sensitive players to more routinely pay for more value and drive the ACLV higher."

Pure subscription models, by their very nature, keep out that portion of the player population who's not willing to pay that amount, however.

"So, while the modeling of the revenue equation is easier, there will always be inherent elasticity to the game," Hoffman says.

Tiered subscriptions wherein the first tier is free can also help a game reach price-sensitive players, but then it adds to the publisher's objectives the need to optimize conversion rates from free to paying — while still maintaining the value and integrity of the free experience.

I'll be trotting up to USC in a few weeks to attend a workshop on MMO design considerations and pricing structures in free to play versus subscription environments, and though it's nothing I have to worry about except as an end user, I'm always curious to see how and why companies arrive at the structures they do.

Analysis: Vindicia's Hoffman On MMO Billing Headaches [Gamasutra]

Has the audience been trained to expect disappointment, to have minimal attention spans, by the hype-driven (and thus continually disappointing) game industry? Have the mechanics of games themselves engineered a culture that demands logically-placed, tiered rewards interspersed with occasional, unpredictable conflict?

Has the audience developed its resentful mob mentality by being told what they do and don't want by a slate of envious, immature game journalists whose largest qualification is that they are more obsessive enthusiasts than those for whom they write?

Journalists and developers will say that they've become whatever it is they've become because of turning backbends to please an unpleasable audience; the audience can just as easily say they've been made what they are by the media they consume.

Vicious cycle, no? In the general gaming marketplace that's extremely competitive, hype building is the name of the game — and is often inherently at odds with what we might call "responsible journalism." The big question that none of us can answer is how to get out of the cycle.

Hot Headlines And Hype Cycles — Who's Responsible? [GameSetWatch]

Charges were also filed against 11 Koreans who allowed the scheme to use their bank accounts for money laundering.

Jeong and his ring reportedly sold the game money illegally produced in China using cheap labor and virus programs. They are believed to have taken a commission of three to five percent of the money traded to purchase game money.

And you thought gold farming was a problem. The connection between the gold farming ring and the money laundering ring is unclear, but this is just one more example of RMTs being put to, uh, creative uses.

`Online Game Ring Smuggled Out $38 Mln to China` [donga.com via PlayNoEvil]

David Riley of the NPD Group says part of the reason video game sales are rising and movie ticket sales aren't is that a movie only lasts a couple of hours — it gives you less "bang for your buck. The difference, obviously, between a movie and a video game is the amount of time that you get," he says.

With gas prices rising and some of the nation's largest financial institutions in dire straits, more and more non-gamers are finding that video games are an excellent way to distract themselves from real-life issues. Anyone else find this slightly ironic? We're they just making fun of us for doing the same thing a couple years back?

It's alright, general public. We hold no grudges. Come, sit next to us, take up a game controller, and we'll ride this thing out together.

In Tough Economic Times, Video Games Console [NPR]

You're talking about the 150 titles every day, worth over $15. What we found was that the perception of our trade value was far different than the reality of our trade value. Far different. I'm sure you see that on the blogs, and so forth, you don't have to read very far. The reality is that there are a significant portion of our games that do actually represent a strong value.

So that was the basis of our campaign — to let people know that a large portion of our games are over $15 when you trade them in. We see that really as a very unique part of GameStop. We provide currency for the purchase of new games.

We really believe, and the reason that we're so passionate about our trade program, is that it drives new games. Last year, alone, we put over $700 million of trade credit back toward new games. I think that new games is about a $9 billion market. So if you stop and think about the currency that we're generating for the sale of new games, it's an absolutely amazing proposition.

It's long, but pretty interesting, even if you find yourself rolling your eyes somewhat frequently as I did. I generally go out of my way to avoid dedicated game store retail experiences (having gotten the 'Hey little lady, can we sell you something you don't need?' pitch more than a few times), and I've had some abysmal experiences at GameStop, so my laptop wound up with a mouthful of coffee on it when I read "It's the time that we get to spend and interact with the customer that really differentiates our experience from anyone else."

GameStop in 2008: The Mega-Interview [Gamasutra]

Pacini worries that the current model of game development is becoming far too unwieldy, and believes that a more distributed, less centralized system — similar in some ways to that of the film industry — could become the norm.

"The model in which games are made — with a staff of people upwards of 100 people a lot of the time — is kind of outdated now," he says.

"It costs so much money to maintain that staff. What do you do with that staff when the game is done? You get these mass layoffs. You don't hear that when a movie's over. Everybody who was on the movie is gone — but there was no mass layoff, it's just that everybody was a contractor just for that project.

"I think in the future, a lot of game development will move towards that," Pacini continues. "Contractors now are being used more efficiently than they've ever been on game projects, and it's become a more valid way to staff up your project. Rather than being looked down upon as a company that doesn't want to hire somebody, it's more fiscally responsible of the company to hire contractors, not to staff up and have a mass layoff at the end."

They point out that development costs are going up, up, up, and the business model the industry is founded on isn't helping matters; will we start seeing a shift in the way games are developed? Armature has already staked their claim on a "lean, rapid prototype development that doesn't get bogged down in the ways traditional development often does" and reliance on a 'distributed' development team.

Armature Founders On 'Unsustainable' Biz, Plans [Gamasutra]

Awhile back at GDC I attended a panel that discussed taking frustration away from the player. Microsoft evidently has all sorts of metrics that show that players who are able to finish a game are more likely to purchase a sequel or order DLC, so it makes sense to take away the frustration that prohibits a player from finishing the title. These things range from automatically adjusting difficulty, creating more checkpoints, allowing saves anywhere (vs. gating at savepoints), but most importantly, not punishing death. Braid, for instance, is a perfect example of how not to punish death: You simply don’t die. You just rewind to a point previous to dying, and fix your error. There’s no need for multiple lives or continues or checkpoints. You just rewind.

Now, before I continue, I don’t think Braid is what’s wrong with gaming. In many ways, it’s what’s right. But the biggest problem with taking away “Learn by Death” is that in many ways, we’ve removed the challenge. There is little to no tension in GTA IV, because I know that if I get into trouble, I just need to die. Cops chasing you? Don’t get arrested; they’ll take away your guns. Just fight them, die, and wind up at the hospital with all of your guns still on your person. The only penalty is that you might have to replay the mission you were on, and you probably lost the stolen car you were driving at the time. Sure, there are hard parts in GTA IV.

But in the ten hours I played GTA IV I didn’t once have a nail-biter moment (at least I don’t recall many).

I think Braid can be just as punishing as any game that forces you to 'learn by death' — I find few things are worse than figuring out how to solve a puzzle, then be unable to execute it; endless rewinds aren't that far off from dying — but has the challenge really been removed from games at large? Or is it only a particular type of challenge for particular types of players? I log plenty of hours playing games I enjoy (well over the 10 hours the author spent on GTAIV and Halo 3), but I won't put in those kinds of hours if I'm playing games that challenge their players in certain kinds of ways. I hit my frustration threshold and I'm done — usually for a few weeks or a few months, if not forever. I like challenges within reason, and seek out games that hit that sweet spot between 'too much' and 'not enough.' But that sweet spot is never going to be one size fits all.

Challenge vs. Frustration [game-ism.com via GameSetWatch]

In my teaching I have tended to emphasize know thy player more than know thyself, because I feel too many students come to the process with two false preconceptions: First, that game design is a primarily expressive process in which their own desires should dominate; and second, that they are themselves the ideal player for their game.

This is fair enough if they themselves are the only people who will ever play their game, but most designers want other people to play their game as well, and that means thinking about what will entertain them.

Know thy player is doubly important when the game is one that the designer would not choose to play herself — a game for small children, say. When you make games for someone very unlike yourself, you can't rely on your own instincts. You have to study your audience.

Simple and to the point — though, really, many things should be when you get to their core. It's just a matter of paying close attention and recognizing the traps you might fall in before you do.

The Designer's Notebook: The Tao of Game Design [Gamasutra]

The current market is estimated to be worth 4.43 billion yuan (around $645 million), and with no predicted slowdowns, one wonders what we'll be seeing this time next year (or even fourth quarter of '08). And with companies like Perfect World making a foray into Western markets, we'll just have to wait and see where China's industry is heading long-term.

China market: 2Q08 online gaming services valued at 4.43 billion yuan [Digitimes via GamesIndustry.biz]

When we acknowledge videogames as a medium, the notion of a monolithic games industry, which creates a few kinds of games for a few kinds of players, stops making any sense. As does the idea of a demographic category called “gamers” who are the ones who play these games.

The point is not whether games qualify as art or not. Nor whether games are useful tools or not. Rather, the point is that there are lots of other things people can and do accomplish with videogames. Some are well-established, like entertainment, and some are emerging, like meditation. No matter, all of those uses taken together make the medium stronger and give it greater longevity.

I'd quibble with some of his assertions on books (We don't distinguish between 'serious' and 'entertaining' books? C'mon Ian, you can't possibly believe that — and if you do, I've got a couple of bookshelves I'd like you to see), but it's an interesting essay on the wide and varied uses of games — and what that may mean for the industry.

The End of Gamers [Edge Online via Water Cooler Games]

I've suggested before that for the videogames industry, the mass market is our long tail. The centre of cashflow in videogames are the hobbyists, the players who buy and play many games over the course of each year. Even with the outrageous sales figures that a mass market game can rack up (tens of millions, versus the old familiar game styles that top out at a few million units at best), the mass market doesn't look like an attractive option for most game developers: they don't know how to develop for it, they don't have a marketing spend big enough to skip over the hobbyists, and even if they made the perfect mass market product there's every chance it would sink without a trace.

The change at Nintendo is apparent: games are only part of Nintendo's focus now. What is less clear is what this change means for the rest of us. Because if this new wider market can only be hit by Nintendo first party software, which may be substantially the case, most developers would do better to continue to compete for a tiny share of a successful hobbyist marketplace, such as the first person shooter market, or the RPG market, even if most of the titles in these over-competed markets do fail miserably. And in that respect, the change in Nintendo is really 'business as usual' - because Nintendo's problem has always been that it can make and sell its own 'first party' software in large numbers, but third party developers struggle to make a profit on a Nintendo platform.

It does suck to be left out in the cold, and that goes for many of us — even those of us who don't have the time to game as we once did. Diversification isn't a bad thing, but it can be troubling at times.

The Change at Nintendo [Only a Game]

Over at the Escapist, they're taking a look at the future of gaming — Hal Halpin, president of the Entertainment Consumers Association, looks at a number of 'maybe, maybe not' predictions with his own take. Ranging from the mundane ('Game prices will go down!') to the political ('Things will get better once gamers become politicians!') to the industry-focused ('Publishing structure is stuck in a rut and won't change!'). It's a fun read with some good points on the present and future directions of the gaming industry. On the publishing structure, Halpin has this to say:

... Developers too often aspire to be CEOs and convince themselves that they have the acumen to handle it. They rarely do. Great developers are great artists, not suits. There are exceptions to the rule, of course, but by and large rising developers would do far better to hire an experienced executive team and check their egos at the door. That, or merge with equally talented, like-minded firms where they should still hire the aforementioned suits. I foresee the consolidation in our business similar to that of the film industry. Several publishers will percolate up to be "the majors," a few will be "mini majors" and specialize in niche markets and genres, and there'll be a whole culture of indie developers - far more robust than today's landscape - many of whom will be inspired to their careers by user-created content. Timeline for paradigm shift: three to five years.

I'm not sure consolidation of the film industry is a good example, since it took some concerted effort on the part of the major studios and successfully stamped out the little whipper snappers for decades, but the idea of a more robust indie scene is a nice one. Not a terribly long essay, but worth a read through.

The Crystal Ball [The Escapist]