14 DAY TRIAL // Earlier this week, the well known analyst Michael Pachter said that the declining software sales were to be attributed to the rise of online multiplayer games that occupied the consumer's attention for a longer time, removing the need for new games. He also predicted that publishers would have to start monetizing the online experience and that the first outfit that would do such a thing was Activision. According to Pachter, this could happen with the upcoming Call of Duty: Black Ops that would either include a subscription based model or an opt-in premium model.
This was of course denied by Activision, but is there something to what is Pachter predicting? I think I must split his argument in two parts and examine each accordingly. First of all, I do not agree that online gaming is the main guilty party for the declining games sales that have plagued the industry this year. This has been a bad year for businesses everywhere, with potential consumers losing their jobs or working for lower wages. The original supposition that the games industry is crisis-proof may have been very wrong.
Moreover, this is the first year in the history of the industry when so many high profile releases have been riddled across the year. The usual Christmas window is no longer as relevant as before with games like Red Dead Redemption, Splinter Cell: Conviction or Battlefield: Bad Company 2 showing that spring releases can be successful. I think that the industry ultimately over-estimated itself and the purchasing power of its customers. The many costly releases alongside the difficult economic climate have had the main contribution to the troubles that publishers are facing right now.
The success of online gaming is, in my opinion, an effect and not a cause of the dwindling sales. When forced in making a choice between what to buy, gamers have chosen titles that can provide them with more value over time, that can be entertaining months after the purchase, so that they can feel they have invested their very hard earned money in a smart fashion. I think that Michael Pachter has misunderstood this phenomenon and has given wrong advice.
Secondly, further monetizing online gaming at this point would only serve as to kill this market and further damage the industry. Activision would be ill-advised to charge for its online games, even with something like the optional premium model that Pachter talks about. Electronic Arts is acting like a wolf on the prowl and would boast its free Medal of Honor or Battlefield titles in the first minute after such an announcement from Call of Duty's publisher. It is worth remembering the PC dedicated servers debacle with Modern Warfare 2 and how quickly came EA's reply with Bad Company 2. The stiff competition on the market and the unclear status of the financial times ahead do not allow such a hapless experiment on the part of the biggest publisher in the world.