I've been reading alot in my business course and it talks alot about knowing your competition. Is there such thing as competition in the game industry?

Unless you know something about a wonderous utopia of developers who exist only to help each other make sales, then... yes.

I dont know about you, but every time I fire up Halo there's some serious competition going on.....

Oh, heck yeah!

Just tell me... Unreal Tournament or Quake III Arena? Or bag them both and play Counterstrike?

Warcraft or Command & Conquer?

EverQuest or Dark Age of Camelot?

Playstation II, Gamecube, or X-Box?

You think these titles didn't actively compete for customers? Yes, of course some people are going to buy / play both. But there's some definite competition there. And amongst the big boys (Sony, Nintendo, Microsoft, and once-upon-a-time Sega) it can get pretty cutthroat. You know why Sega doesn't produce hardware anymore? Nintendo and Sony painted a big, red bullseye on them and worked hard to bury them (and each other).

Even amongst the indie gamers, there's some competition for eyeballs and between "similar" titles, though it seems that the field is wide and untapped enough that there's more to gain by cooperation than competition. But you'd better believe that if I see a title out there similar to my own, I'm going to do everything I can to make sure that my title compares favorably to my competitor's.

Buying a video game isn't like buying a car. Usually when you buy a car, it implies that you aren't going to buy some other car. But with entertainment goods, a purchase of one thing doesn't necessarily mean a lack of purchase of another.

Are you going to watch Matrix Revolutions OR Return of the King? If you are even remotely close to normal, you'll see both. Are those in competition? Does purchasing Halo or Warcraft or whatever mean you aren't going to purchase something else? Not necessarily.

Buying a car doesn't mean you won't buy another, either. It's mainly a matter of funds. Competiton exists in any industry, where multiple people are working to win the consumer's dollar.

So....Bill Gates, having a near infinite supply of money has a garage somewhere with a near infinite number of cars, because he has the funds to purchase them?

Maybe, you never know with ol' Gates ;)


"If you are even remotely close to normal, you'll see both."

So what does it make you if you only have enough money to see one?

- Reactor -
So what does it make you if you only have enough money to see one?


One very sad individual, I'm sure. :)

Originally posted by Reactor
So what does it make you if you only have enough money to see one?
It makes you feel sad and deprived for a whole month as your friends all talk about Revolutions while you quietly save your money for RotK :) Or at least that would be my choice.

Why do you think those two movies are being released a month apart? Because they ARE in competition, and if they were both released the same weekend, they'd BOTH suffer from reduced earnings!

Just because you don't see a shooting war doesn't mean the competition isn't there. I remember hearing of some dirty underhanded tricks Kevin Costner's company used when filming Wyatt Earp to try and impact the production of the rival film Tombstone (I can't recall the details, but I think it had to do with them sitting on costumes and forcing Tombstone to special-order costumes from overseas).

But usually what you see is positioning. In the case of Matrix Revolutions versus Return of the King, it's time positioning - the two are far enough apart that people are more likely to see both. In the case of the previous LotR movies versus the Harry Potter movies, they did some serious positioning to try and differentiate the two to encourage people to see both. As it was, they probably hurt each others' ticket sales. But if the Fellowship of the Ring was advertised as more of a kid's movie, or if The Chamber of Secrets was a more adult-oriented fantasy, you'd better believe it would have been a lot worse!

If Return of the King and Revolutions were released on the same day, would you still see both?

Eventually, yes - but I might only see one a month later. And I might not be going to see The Lord of the Rings twice in the theater (like I did the first two). And if there was another killer movie coming out the following month, and the reviews of either movie were less than stellar, I might miss one until it came out on video.

This is exactly what happened with two close friends. There were so many other movies to see over the summer that they ended up missing Matrix: Reloaded in favor of X-Men:2 and Pirates of the Carribean. And these were both major fans of the first movie. They finally watched my copy of Reloaded a couple weeks ago, and probably liked it more than I did.

Siebharinn: Do you buy EVERY game that comes out? If not, how do you choose the ones you buy? And would you not agree that the games that are out there competes for your attention?

Of course there is competition in the games industry, and lots of it.

Look, my point wasn't that there isn't competition. I didn't say that. My point is that entertainment goods are a little different in that they don't have the same kind of exclusivity that other goods have. It was mostly a response to Coyote's first post:
- Coyote -
Just tell me... Unreal Tournament or Quake III Arena? Or bag them both and play Counterstrike?

Warcraft or Command & Conquer?

EverQuest or Dark Age of Camelot?

Playstation II, Gamecube, or X-Box?


Is it really that far fetched to think that someone could buy both UT and Quake3? I have both. And Counterstrike. How many of you own more than one console? I have two. When company A releases a puzzle game, does it preclude you from buying one from company B as well?

Of course there is competition in the games industry.

Everyone has made really good points. Ive come to the conclusion that Yes, there is compotition in the gaming industry....but... not much of it.

Then you've come to the wrong conclusion. The competition is very serious indeed. The competition is intense and ruthless. The game industry is absolutely fit to bursting with the strongest of strong competition. Go make a FPS and see how well you do.

NOBODY buys every game. Most people will only purchase the tiniest fraction of the total. If every other game on the planet disappeared tomorrow, I could easily become a billionaire. Only the strong survive. Believe it.

I think Anthony expressed it best.

Remember John Romero's Daikatana? All that hype, but only 40,000 sales? With millions in marketing behind it, what do you think its sales numbers WOULD have been had there never been a Quake II, an Unreal, a Half-Life, or any other FPS since Doom II (or maybe Quake)?

Hint: They probably would have paid for their development costs.

If there were only 50 videogames being made each year, how many copies would EACH one sell? (Assuming 50 / year is enough to keep the gaming industry at "critical mass" instead of causing it to shrink due to lack of interest).

Look at how well Deer Hunter did - the first of its kind when there was no competition - versus how well all the other bizillions of hunting games did (including later Deer Hunters) when the market was crowded.

Look at how much easier it is to get sales when you are a launch or near-launch title for a new, major platform versus the following Christmas?

Originally posted by Siebharinn
Look, my point wasn't that there isn't competition. I didn't say that. My point is that entertainment goods are a little different in that they don't have the same kind of exclusivity that other goods have. It was mostly a response to Coyote's first post:


Is it really that far fetched to think that someone could buy both UT and Quake3? I have both. And Counterstrike. How many of you own more than one console? I have two. When company A releases a puzzle game, does it preclude you from buying one from company B as well?

Of course there is competition in the games industry.

I believe you have just contradicted yourself, you only have two of the three consoles, which means as Nintendo, Sony, and Microsoft competed for your dollar, only two, won. That's some serious competition if you ask me.

Originally posted by Anthony Flack
Then you've come to the wrong conclusion. The competition is very serious indeed. The competition is intense and ruthless. The game industry is absolutely fit to bursting with the strongest of strong competition. Go make a FPS and see how well you do.

This may be true for retail games, where there is a 6-week window of opportunity for the game to be sold. Often this is the six-weeks before Christmas, and there are hundreds of other games available. Of course these games are competing fiercely for your purchasing power during this time!

The same is not true for indie games, which have a longer lifespan. Indie games are available online for years. Dexterity's been selling Dweep since 1999; Spiderweb has been selling their RPGs for years as well.

Players don't stop buying games as soon as they're done with one. They go out and look for a new game. Even if they liked the big game a lot, they have several years before the sequel comes out.

To me, I see the big players as helping to sustain a burning appetite for games. Once the players are hungry, they don't care who feeds them.


NOBODY buys every game. Most people will only purchase the tiniest fraction of the total. If every other game on the planet disappeared tomorrow, I could easily become a billionaire. Only the strong survive. Believe it.
Yes, but most people buy a different tiny fraction. They have different tastes and interests. The reason competition is so fierce among the big companies is because they tend to sell 90% of their games in a single, oversaturated market like FPS or RTS.

You can make a great living off a tiny percentage of the game playing market out there.

Finally, if every game disappeared, and all you were selling was Daikatana, I don't think you'd be a billionaire. I think a lot of people would either start writing their own games or give up computer games entirely.

- Chaster -
I believe you have just contradicted yourself, you only have two of the three consoles, which means as Nintendo, Sony, and Microsoft competed for your dollar, only two, won. That's some serious competition if you ask me.

Where did I say that Nintendo, Sony and Microsoft were not competing with each other? Please point out my contradiction.

Originally posted by Siebharinn
Where did I say that Nintendo, Sony and Microsoft were not competing with each other? Please point out my contradiction.

You've stated this,

When company A releases a puzzle game, does it preclude you from buying one from company B as well?

But it's obvious X-Box, PS2, and Gamecube are in competition with each other, if not, then why is Gamecube dropping prices, and why are X-Box and PS2 always matching each other's prices?

Consider the fact a child only has enough money to spend on one console (this is quite common), the choice is between those three systems. So yes, if this kid buys a X-Box, it does stop him/her from buying the other systems.

Entertainment goods are not too different from other markets.

Well, it bugs me a little that so many people failed to grasp my point. I'm willing to accept that I made it badly, so let me try again. If this doesn't work...well...I'm done. :)

Let me state at the beginning, so no one misunderstands, yes, I think there is a lot of competition in games. Ok?

Let's start with cars. Have you seen or heard car commercials? Now THAT is some fierce competition. Many of the commercials define their product in terms of the competition: "Ford has more horsepower than a Dodge", "Kia is as good as a Honda but cheaper". They do this because they know that if you buy a competitor's car, it's quite unlikely that you're going to buy their car as well. You may go years before looking for another car. Honda knows that if you buy a Nissan, they not only lost a sale right then, but for the next few years as well.

Yes Chandler, I know. Children can't afford cars. Just work with me.

Likewise, if you purchase accounting software, say Quickbooks, it's unlikely that you're going to purchase Peachtree as well. Those two products compete, and they are (for most people) exclusive. Productivity software like this can also last for years. I'm still using the same copy of Quickbooks I bought five years ago.

A movie, on the other hand, lasts what, two hours? And then what? Many on here seem to be saying that once you watch a movie, that's it. You've chosen which competitor will get your money, and no one else. Especially the children, who only get to see one movie in their whole lives. I don't agree with that. Maybe it's a week later, maybe a month later, but you'll probably see another movie.

Computer games have a longer "use" period than a movie. Let's suppose that I purchase Dweep (http://www.dexterity.com/dweep/) and proceed to play. Dweep has what, six billion levels? At some point, I'm going to finish it. Then what? I'll get another game. Maybe not that day, maybe a month later.

Let's suppose that Half-Life 2 and Doom, by some strange fluke, come out on the same day. Oh, the horror! Standing there in the store, money in hand, which do I choose, which do I choose?!? My choice (and that of most people, except the poor children) is to buy one of them, play it for a while, and then get the other one.

But how can you buy both, I hear you ask. They are competitors!! The answer: because they are non-exclusive. Entertainment goods in general have a very short use period. Most people go through a dozen games before they change their word processor. Maybe several dozen before they get a different car.

To sum up: yes, there is a lot of competition in the games industry. Every company out there wants you to buy their game. But I don't think it really matters, because the use period on games is so short that you'll get more than one any way. Yes Chandler, even the children.

This may be true for retail games, where there is a 6-week window of opportunity for the game to be sold. Often this is the six-weeks before Christmas, and there are hundreds of other games available. Of course these games are competing fiercely for your purchasing power during this time!

The same is not true for indie games, which have a longer lifespan. Indie games are available online for years. Dexterity's been selling Dweep since 1999; Spiderweb has been selling their RPGs for years as well.

..........................................................................................

Yes, but most people buy a different tiny fraction. They have different tastes and interests. The reason competition is so fierce among the big companies is because they tend to sell 90% of their games in a single, oversaturated market like FPS or RTS.

You can make a great living off a tiny percentage of the game playing market out there.


Yes, you can. There are a number of great indie success stories. There are also masses and masses of unsuccessful indies struggling to get just a handful of sales. No competition there? Hardly.

I'm hoping to be a successful indie myself. My strategy is to try to make better games than you lot.

My strategy is to try to make better games than you lot.
LOL!

Originally posted by Siebharinn
But how can you buy both, I hear you ask. They are competitors!! The answer: because they are non-exclusive. Entertainment goods in general have a very short use period.

I'll grant you that there are folks who will often buy both games when there are competing titles. But there is some portion of the audience out there who will ONLY buy one, whether for brand loyalty, lack of cash, or whatever the reason. Sometimes this group is smaller, sometimes it's larger.

Identify all the different groups and the situation becomes more clear. (at least to me)

1: Buys A.
2. Buys B.
3. Buys A then B.
4. Buys B then A.
5. Buys both at the same time.
6. Buys neither.

The existence of 1-4 indicates some form of competition is happening. Exclusive products eliminate most occurences of 3-5. Figure out the size of each group and you've got a good market report. Figure out how to accurately predict the size of each, and you're amazing. Figure out how to control the size of each and you're rich beyond your wildest dreams.:)

Keep in mind that some people who start out intending to pick up that 2nd product never do, so people can plan for 3-4 and end up in 1-2. That's a bummer for the 2nd product, and they lose out due to competition.

There's a finite supply of movie-goers and game-buyers, and it's really quite common for movies, books, games, and many other things to be very carefully scheduled to NOT come out at the same time as the competition because both players make less money when they do that. Interest dies down over time, and you want to give people something to do just as they're becoming disinterested in the previous Big Thing. This is all due to the very short use period you mentioned.

At this point it sounds like we're all in violent agreement. ;)

John