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The most popular gaming centric event is E3, and that is a shame. It’s a shame because we’ve reached a point where hype is more synonymous with gaming than the full games themselves.

The problem is the full frontal assault of trailers and commentary on trailers (something this author has been considered guilty of in the past!) on the senses, changing expectations and dulling the impact of the games we play. The problem is the ten minute demo videos, shot on shaky cameras inside some dude’s breast pocket, designed to inform but ends up ruining the novelty of future gaming experiences.

I recently caught up on Roger Ebert’s Little Book for Reviewing and then Nukezilla’s fantastic commentary on it. That’s really the two articles you should be reading. They’re very informative for someone who wants to seriously criticize games, and not just say, “It was good 10/10”. No, serious, intense criticism. It’s all good stuff, well worth reading.

But the part that struck me was the part about trailers.
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What Goes Up, Can’t Go Down

Or: Why the Microsoft Kinect and the Playstation Move are doomed to fail*

Update 1:

I’ve realized I needed to make the definition of what ‘fail’ meant more explicit. In this case, ‘fail’ refers to catering to the non-gamer market. Considering the article is called “What Goes Up, Can’t Go Down”, I thought that was pretty obvious. If it wasn’t, I hope it is now. Monocle smile! 😉

Update 2 (12/18/2010):

Well, according to VGChartz, Microsoft’s Kinect did in fact eventually reach the milestone of 4 million units sold worldwide (2.6 million units in the Americas) in the week that ended on Dec. 11. Of units sold, 40% of them bundled with a Xbox 360 console, which indicates that there actually was an expansion of the console’s user base. The PlayStation Move, which didn’t get all the marketing support the Kinect did, has sold just over 900 thousand units so far.

So yeah, I was wrong. Colin Sebastian was right.

Shit. I hate being wrong.

However, I still don’t believe Kinect’s success has enough legs for the long run, since the arguments presented in that article below are all still valid.

Now leave me alone while I enjoy my grudge for not having my MBA funded by Lazard Capital Markets.

But hey! On the other hand, I’m not unemployed anymore. I got an actual paid job! But what a beautiful coincidence!

 

 

And now, our featured presentation:

After a good while without writing any kind of analysis on the game industry, I felt the bug bite my neck. Now I can’t stop itching. The only cure is to fetch the Nostradamus hat.

Created by Michel de Nostredame, the N-hat never went out of style

My Nostradamus hat is very competitive toward other analysts’ hats. It runs on jealously alright, but since what ultimately matters is its arguments and logic rather than its drive, I listen to it. That’s why the moment it heard Lazard Capital Markets analyst Colin Sebastian saying we’ll see 4 million Kinect devices sold in the fourth quarter of 2010 alone, it rang its bullshit alarm.

BeeeeepBeeeeepBeeeeep! BeeeeepBeeeeepBeeeeep! BeeeeepBeeeeepBeeeeep !

No, Colin. That won’t happen. Let me tell you why.

In order to see why the Microsoft Kinect and the Playstation Move are doomed to fail, we have to understand why the Nintendo Wii was a success. In order to do this, I’m using the framework provided by Clayton M. Christensen in is book The Innovator’s Dilemma.

The Nintendo Wii was a disruptive type of innovation. There are two kinds of innovation: sustaining and disruptive. A disruptive innovation is an innovation that offers a different set of values, while a sustaining innovation merely improves on the values already established. Whether or not the innovation is radical or incremental in nature is irrelevant. What matters is their value proposition.

Sustaining technologies is about improving product performance. You hear what your customer wants and give it to them. That improvement can be incremental (slightly better graphics) or radical (3D games instead of 2D), easy or difficult to achieve – but the values used to measure the product remain the same. Most technological improvements are like that – that’s also what companies are trying to do all the time: listening to their clients and improving performance to reach higher markets. Examples of sustaining innovations are the PS2, the Gamecube, the PS3 and both the original Xbox and the 360. All these products improved what their predecessor set out to do, delivering better graphics and more processing power.

Disruptive innovations, on the other hand, are usually very straightforward and use off-the-shelf components in a way that’s usually simpler than other approaches. The result is that they obviously cannot offer what the mainstream market wanted. That’s why they must target at other niches, which different values, that desire what the disruptive innovation offers.

In its efforts to stay ahead by developing competitively superior products, sustaining innovations make the companies move upmarket, eventually over-satisfying the needs of their original consumers. When the PS3 was first launched with a $600 price tag, that ended up created a vacuum at lower price point into which a company like Nintendo, employing disruptive technology was able to enter. Another good example of disruptive innovation is the Playstation One. It had graphics that were worse than the Nintendo 64 and it was cheaper too. The disruptive element? The media. CDs allowed cheaper development costs, which attracted developers. The Playstation One also targeted a niche: teens and young male adults who played games casually instead of the mainstream market of the time (children, geeks, etc). Eventually, these types of gamers became the new mainstream.

A neat visual example of how a disruptive innovation operates

So, here was the Nintendo Wii. It targeted the lowest part of the market, the non-gamer. Down and upmarket are simply points of reference. The downmarket is usually a smaller market with smaller typical gross margins. The upmarket is a bigger market with better gross margins. The lower you get to the market, the more price sensitive your clients are going to be. Sony and Microsoft are targeting the upmarket – hardcore gamers – with the better margins. Point in case: their games usually cost 50-60 dollars and more than ever they are relying on service revenues such as online subscriptions and DLC. Meanwhile the Wii has a 30-50 price range and very little focus on online gaming.

While it is natural for a potential Wii2 (or Wiii) to move upmarket, delivering better graphics, other gimmicks and whatnot in order to achieve the more profitable gamer (us), I believe that Nintendo will choose to stay where they are simply because they are in a very cozy position and virtually not being threatened by competition.

On the other hand, enhanced by this new market of non-gamers and casual opportunities, we see an effort from Sony and Microsoft to move downmarket. This is new. Until this E3, Microsoft’s strategy was completely different: to make its presence larger in the higher end markets of countries outside the AEJ belt (US, Western Europe and Japan). That strategy was apparently abandoned though. Microsoft may have realized that there is not much room to go upmarket anymore – and the option to reach that same segment in other regions might contain too many obstacles (taxes, piracy, government biases). Their current markets may offer the better margins now, but the emergent market of non-gamers grows faster and their tastes also evolve.

But here is the bump in my neck I can’t stop scratching: history has proven that while there is considerable upward mobility into the value networks of other markets; the mobility downwards into markets enabled by disrupting technologies is restrained.

In other words, what goes up can’t go down. Nintendo has better chances of going upmarket and targeting hardcore games than Sony and MS’ chances of reaching casual and non-gamers.

There are 5 reasons for this: Read the rest of this entry

Weekend Note: YaAaaaaaAAawn

Sleep, the true breakfast of champignons.

I pretty much disappeared this weekend, I know, but I was also pretty busy/tired/lazy. I pumped out posts last week like a freaking psycho. I apologize for this weekend, though, but I will also note that I have like 15 open tabs with material that I want to write about this coming week. Oh my goodness I’ve yawned like 10 times in writing these three sentences.

Now E3 is over, and…wow, does life have any more meaning after that? Without flail and Kevin Butler? Truly, I do not know.

Things that I want the most from E3: Donkey Kong Country Returns, RAGE, Medal of Honor. Other things, sure, but not as much.

Been trucking along in Persona 3. I’m still a sack of lifeless bricks that just happens to be able to nod his head and thrust his crotch. Both of these abilities, are, of course, instrumental in my life as a so-called human being. Somehow, Persona 3 thinks I’m a smooth motherfucker just because I’ve drunk enough coffee to give a grown man a heart attack. I guess I’m not going to argue, and it now better explains why people like to throw themselves at me for simply existing.

I’m not even halfway through Uncharted 2 yet, but it’s only getting better to me. Nathan Drake is the dude of all dudes, and Claudia Black is her usual typecast, which really, is the best typecast that has ever existed. Ever. Now, if she didn’t have demon eyes…like seriously, have you tried looking at them? It’s horrifying. I will assume, therefore, that when Nate and Chloe sleep with each other, that Nate has his eyes closed firmly shut the entire way through. The eyes see through your soul, though, so it’s pretty useless.

Graham has been chugging away at MGS2, because MGS1 hates me. We kept saving our game, only to have it disappear mysteriously the next day. And it’s too bad, too, because so far I think 1 is incredibly superior to 2. No one is memorable in 2, the closest person to memorable is Vamp and he’s just a strange homosexual vampire. Also, nearly everything in 2 mirrors some event in 1. And Raiden is such a pussy. And what is wrong with Rose? Jesus christ no I do not care about our anniversary RIGHT NOW. Mei Ling was terrible, but boy do I want her back. Also, I have the distinct notion that the environment in 2 is cell shaded. Seriously. Go back and play 2, look at the big shell’s exterior, and try to tell me that shit ain’t cell shaded. Or the part with the inverted mic? That. Is. Cell. Shading.

I’m sure our writers are playing something, too, I just didn’t ask them what this week. So basically, I’m useless.

Make sure to follow us on twitter if you’ve got an account! We will probably hold some sort of contest on Twitter soon, which admittedly are lame but hey, what can you do?

Onward, to next week!

3DS At A Glance, Commentary

That, right there, is the fabled 3DS, folks. Looks like a glorified DS, doesn’t it? Well, it’s design isn’t final–hopefully they can do more to set itself apart from the DS. Otherwise, a common consumer might look at this and go, hey, its just a DS with 3D on it! We, however, know that it does more than a DS can. A lot more, in fact. Here’s some specifications:

It is 5.3 inches wide, 2.9 inches long, 0.8 inches tall, weighing in at about 8 ounces. The top screen is 3.53 inches, and this is the screen that has the 3D functionality. The bottom screen, like its predecessor, is a 3.0 inch touch screen. It has three cameras–two in the front, and one on the inside. Why it needs 3 cameras, I have no idea. It might be necessary to take 3D pictures, though. Don’t get too excited, though, they don’t even have the resolution of half of a megapixel!

It will, indeed, use game cartridges–it seems like digital distribution won’t be the next big thing for Nintendo after all. It will also have online functionality, which can work even when on sleep mode. It has a slider which can be used to determine how strong the 3D effect will be–though you will also be able to turn it off completely, if so you wish. It has an SD card slot.

Last, but not least, its graphical power is probably on par with the Wii. Just take a look at the trailer for its launch title, Kid Icarus Uprising.

And judging from the reactions from various internet sites, probably coming close to the graphical capabilities of the 360. That in of itself is amazing, but also disappointing when we look at the 3DS’s older brother, the Wii.

source: Nintendo.

A Sign of Things To Come

“What people want are simpler, more accessible games that are easier to play and solve”–Iwata, 2003

You probably had no idea of what Iwata meant at the time. None of us could. Who could predict the DS, the Wii–who could tell that Nintendo would shift their core values so dramatically from one generation to the next? After all, most of us consider ourselves ‘gamers,’ and why do we care if our entertainment of choice is grandma-friendly? And even now, I know that it is a common sentiment amongst the gaming community to resent the new approach that companies like Nintendo are taking. Why should development time be devoted to titles like Nintendogs and Wii Sports resort when we can have ‘core’ titles like Kid Icarus and Golden Sun?

Still, this accessibility approach that Nintendo products uphold isn’t a random phenomena. Not at all. In fact, let me put my marketing glasses on right now and say that this is a paradigm shift that is taking place across all technological mediums.

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Star Wars: The Old Republic Trailer Melts Brains

Today? Today we saw a pretty lame show from Microsoft. Too much talking, not enough showing, not many big guns to speak of in terms of software. EA had lots of big, big guns–you know, like the Gun Club! But one of these guns, one of these guns, rocked our collective worlds so hard, we were just speechless after the trailer. And that trailer is for Bioware’s upcoming–and first!–MMO, Star Wars: The Old Republic.

This trailer is a full five minutes of non-stop AWESOME. And you know what? I don’t know heads or tails about the Star Wars franchise. And I still consider this trailer to be the best thing to come out of E3 all day.

Sure, you can call bias: it was the only morsel of Bioware that I was able to extrapolate from E3 today. And this MMO might just be the first MMO to suck me into the MMO craze–just because Bioware is making it, specifically. But you know what? You cannot tell me that the trailer above doesn’t captivate you. You’d be a pretty damn dirty liar!

5 Steps to Not Having Your E3 Press Conference Suck

It’s been less than half an hour since the Microsoft Press Conference and I’ve gotta say, I barely watched any of it.

Instead, I cleaned up the place, as the previous weekend had amalgamated a pile of video game cases, papers, books, all kinds of stuff strewn around. All the while listening to the press conference as guy after guy after guy after guy got up on stage to introduce a new game trailer…woo-ee. Some of the guys looked terrible, some of them were awful speakers, but mostly it was just confusing and unnecessary, trying to build hype for games that don’t do anything totally groundbreaking and jaw-dropping.

Then it was time for project Kinect, which was all fine and dandy but there was no spectacle and the delivery was very anti-climactic, such that I could walk around the living room cleaning while listening to the conference and understand what was going on.

For the other conferences to come, and maybe your own in the future, here are Nightmare Mode’s guideline rules on conference no-no’s.

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Taking A Look at Hunted: The Demon Forge

We talk a lot about Gears here, and with good reason: say what you might about the game, but its influence on the industry has been great. Here, too, we see its influence: Hunted has widely been called a dungeon crawler for the Gears of War age. Take a look at this trailer to see what we mean:

Demon Forge is a co-op dungeon crawler with a cover system that makes you take the helm of either its elfin E’lara, who wields a bow, or the tank Caddoc, unsurprisingly adept with a shield and a sword. The game features many puzzles which will take both players to solve, and it promises to deliver a story-driven experience. Enemies and bosses will take both players using their unique attributes and  working cooperatively to defeat them.

You know, I’ve never been a fan of medieval RPGs–often they seem to hit on way too many of the same boring trophes and class systems. But after games like Dragon Age and Oblivion sucked me in so profusely, I’m warming up a bit more to the setting and its nuances. That being said, I’m looking forward to having Demon Forge hands on, and seeing how the dungeon crawler takes its many influences and attempts to modernize them. It was succesful in Borderlands, we’ll see if Demon Forge does the same.

Aaaaaaaand The Winner IIIIIIIIs

We had lots of good entries for our E3 contest, folks. People journeyed from all across the internet tubes for a chance to win the fabled lost treasure of 20 bucks in the point/system of their choice. But there can only be one winner! Before we actually get to announcing who that is, we’re going to post some of the best predictions that came out of the contest:

Natal will be so accurate it will be able to detect erections. On a related note, a remake of Custer’s Revenge is announced.

Nintendo 3DS is really works without 3D Glasses! First game announced is Magic Eye!

Micheal Bay announces new game he is producing, “BOOM”, which involves humongous explosions, epic car chases, multiple CG monsters climbing buildings with no pesky plot to worry about!

The 3DS will also receive its official name. From now on it will be called the Virtual Boy Color.

Nintendo will release *another* DS, with even less features. Now it doesn’t even have a DS cartridge slot, just a hole that says “Put money here.”

Tetsuya Nomura during an interview “I don’t know what a coocon pulse fal’cie sanctum l’cie is either”

Vin Diesel will announce a surprise partnership between his Tigon Studios and Silicon Knights. The game will be called 2 Human 2 Furious.

But the undeniable god of all funny bones…that is to say, the unrefutable winner of our contest….who is it? Click on past the jump to see if it was you!

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Weekend Note: Uncharted Awe

Things! They happened last week! More things! They are happening right now.

I will don last week as the ‘week of trailers,’ because we posted lots of those in our news items. You see children, the awesome marketing tactic used pre-E3 is to blow your load early so people talk about your products instead of those products getting lost in the mix. If my education is worth anything, I, too will be one of those geniuses that designs those marketing strategies someday.

Next week is E3 and so undoubtedly we will have that much more quips, observations and bitching for you to consume. Who knows what those crazy kids at the big 3 will unveil? To make things interesting, Graham, Schwartz and I will be partaking in a drinking game during the show on Monday. We don’t quite know what the conditions for the game will be just yet, but we will make sure to let you know the results!

In the way of less business-like things, today I plan to sit down and play Metal Gear Solid for the first time…I plan on beating it today, too. I played through the remake on the Gamecube, which I enjoyed at the time but since I was perhaps 11 or 12, do not remember anything about it. I’m told that to like that game is to be sacrilegious or something.

Graham and I are making our way through playthrough 2 of Borderlands, intent on getting the most insane guns we possibly can from the game. Chances are, we’ll run through playthrough 3 to see if we can top what we find on playthrough 2. But aside from that we need to cap our levels to even think about entering the Knoxx DLC, so that requires more than 1 playthrough to achieve.

Also been playing through Persona 3, have made it to somewhere in the 20’s in the Tartarus. To be honest, I don’t know why I like the game–there are many tediums–but I can’t stop playing it. Its like Animal Crossing all over again. Plus I am intent on figuring out whether or not I can romance our party members–if not, why does the game keep giving me hints as to what Mitsuru looks for in a man? Also, why does she look like 27 to everyone else’s 14? Why is Junpei such an idiot? Why do I just stand there when people tell me very personal things? I feel like a heartless brick or something…not that bricks have hearts, but, you know. It’s just he way I stand there looking blankly at them…I weird myself out. But people keep throwing themselves on me and everyone wants to be my friend! What the hell!

I ended up trading in MAG…I just couldn’t enjoy the game. Lots of neat ideas, sure, but it just couldn’t deliver. MAG has very little soul…and less of a lot of other important things, like gameplay. I got Uncharted 2 as well as the Sonic energy drink, which I will write a review of…sometime soon. Anyway, I played through the first couple of hours of Uncharted, and man, I’m just in awe. Not only is the premise fresh and interesting–you’re the supposed descendant of the explorer Sir Francis Drake; a treasure hunter with a shady past looking for the fabled lost ships of Marco Polo. And the production values on this game is just plain insane–it reminds me a lot of Avatar. Avatar presented such a rich, living world–small details like the glow of the flowers at night to the majestic landscape made my imagination run wild with the sheer beauty of what it was witnessing. It’s the same thing with Uncharted, and the narrative benefits all the much more from it. People will tell you that it’s always gameplay over graphics. Rubbish. I want them both. And either way, we’re primarily visual creatures–whats wrong with wanting something that entangles your strongest sense? Still, video games have a long way to go in terms of narrative and storytelling. It’s always a pleasure when you get the best of both worlds, though.

Onwards, to next week!