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Smed makes a bet

September 12th, 2006 (Visited 2993 times) Tags:

Over at the Station.Com Blog, John Smedley is discussing the rise of digital distribution, picking a bone with Michael Pachter, whose comments on the future of the PC gaming business were recently featured along with those of a bunch of another analysts in a Gamasutra article.

Pachter said, among other things, that

I think that this will not approach more than 20% of the market for the next ten years or so.

Among the stats Smed releases are the fact that

Even here in the US we’re doing around 3x that 20% for our own games…

Smed is a betting man. So it’s not surprising that the blog post ends with this:

Michael, I’ll be happy to make a $1000 bet to be given to the charity of your choice that you’re wrong on digital distribution. I’ll even say it’s going to happen within the next 2 years and I’ll make that bet on both console and PC.

The question, of course, is whether the actual size of the market will be reflected by the terms of the bet. I think that in terms of product moved, there’s a fair chance that digital distribution already accounts for over 20% of all individual game SKUs dlivered to consumers, if ou count all web-based and shareware games. So Smed may have already won.

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49 Responses to “Smed makes a bet”

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Faith wrote on September 12th, 2006 at 5:05 pm:

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Timbre of Tempests wrote on September 16th, 2006 at 12:11 am:

http://www.raphkoster.com/2006/09/12/smed-makes-a-bet/#comment-20171

IGDA SAN DIEGO wrote on September 19th, 2006 at 4:49 pm:

state of the PC game market as part of the Gamasutra column Analyze This which also featured David Cole of DFC Intelligence and Ed Barton of Screen Digest. Sideline commentator Raph Koster writes, “Smed may have already won.” In the recent past, John paid for the delivery of 1,200 Krispy Kreme donuts to Penny Arcade as a prank response to claims that “creative people don’t last long at Sony Online Entertainment.”

Reader Comments

Michael Chui said on September 12th, 2006 at 12:33 pm:
Digital downloads are not portable (you can’t take [them] over to your friend’s house), can’t be sold at garage sales, are limited to broadband households, and take up a disproportionate amount of disk space.

Um… anyone who has the bandwidth to download a game probably has a CD burner and access to a place that sells blanks. So you spend an extra hour burning the game to disk. You probably should’ve done that to back up data anyways. So how are they not portable…?
Allen Sligar said on September 12th, 2006 at 1:04 pm:
Interesting, he seems very tied to justifying the importance of retail
distrobution. To not be aware that DD will overcome and dominate all forms of media/entertainment in the next 5 years is fairly suprising for an analyst.
Dave Rickey said on September 12th, 2006 at 1:05 pm:
Pachter has been so wrong so often (a few years ago he was saying there wasn’t room in the entire world for more than 3-5 MMO’s over 100K subscribers, at a time when there were more than that in the US alone already) I can only figure that he lives in some warped Wall Street version of reality, where “analysts” are never asked about their track records at outguessing their markets. The other two in the article weren’t bad, but Pachter has many times their influence in the wider investment community.

–Dave
Michael W. said on September 12th, 2006 at 1:12 pm:
You know what?

I check Direct 2 Drive almost daily for new games.
I just went through all of steam’s games two days ago.
I play MMO’s with clients I can download off the net.

This man is very very wrong.

I can’t tell you how much demand their is for downloadable PC games/content.

I am amazed at how many companies still dont offer downloadable games. It’s simply astounding, they are missing so much potential profit.

The reasons Michael Pachter cited againts downloadable content were terrible;

Requires Broadband households?! If you have the 300$ to plop down on a modern video card, you need to invenst 20$-30$ a month for dsl.

10 years ago was 1996. Thats an awful long time, think about how much has changed.

I think Michael Pachter needs to clean off his spectacles.
Psychochild said on September 12th, 2006 at 1:36 pm:
DRM. Many companies that allow digital downloads tie the game installation to a specific computer. This is intended to reduce piracy so that you can’t just casually copy the game for everyone.

In the case of the online games (MMORPGs), the important bit is the account, not the software. Someone could sell you an EQ2 DVD, but if you have already used the serial number, that is useless.

Personally, I dislike these types of restrictions as a consumer. I don’t copy games, and I dislike the restrictions given that I do unusual things to my computer as a game developer. If my striped RAID fails, I have to spend time contacting the game company to get a new serial number, adding to the pain of having to reinstall everything else.

As to the topic on hand, I’ll be that digital distribution is already huge. Physical medium is cumbersome, and some rather large online games don’t even deal with it. Games like Runescape and Habbo Hotel, hugely successful and popular games, don’t have physical distribution. So, yeah, Smed’s probably already won that bet.

Although, even though it’s a slam-dunk on PC, I’m curious to see if consoles follow suit. XBox Live already has downloadable games, but are they really 20% or more of the sales? It’ll be interesting to see….
Mike G (Gla D'a'tir) said on September 12th, 2006 at 1:55 pm:
I am in the minority here, but I think Digital download doesn’t really appeal to the mainstream market. Some people purchase games on box art alone. Some don’t have the technology to download a couple of gigs of information. (There still are some folks who still use dial-up and AOL due to geographical limitations.) At this point, I would think Digital Distribution will have to coincide with the brick and mortar crowd. Given the rising cost associated with development, how many companies would be willing to limit themselves to the folks with good connections? As for portability, I could see an i-tunes model coming into play where some games simply will not work on a different computer once they are downloaded. Copyright infringement is a hot topic to software publishers as well as other forms of entertainment. This does not apply to MMOs since you need a CD-key or some other unique ID tied to the account to activate access to their servers, but what about the stand alone game like Grand Theft Auto, Madden, or any other non-mmo game? Download a game, and the manufacturer can attach a unique ID to your PC so that the Game in question can’t be loaded on another PC.

Yes SOE is going to see 60% digital distribution, their staple is on-line games with on-line content. (added to that number is the number of folks forced to buy Rage of the Wookiees and Trials of Obi Wan digitally.) This may not be true EA, Acclaim, or any of the other standalone game publishers. In the end, digital distribution could lead to a 2 tier system for gamers, those can download and those who can’t.
Raph said on September 12th, 2006 at 3:02 pm:

I think Digital download doesn’t really appeal to the mainstream market.

The mainstream market only sets foot in a videogame store to buy a gift for a young relative.

Web-embedded counts as download (it technically is, behind the scenes) and I would guess more game sessions are played that way than off of any fixed media.
Chip Hinshaw said on September 12th, 2006 at 3:23 pm:
I agree with Mike G that people like to have the physical product in hand. I’m certainly one of those people, however I have actually purchased a handful of digital downloads from direct2drive and Steam. I’ve been nervous about what happens if my PC blows up or I uninstall and decide to re-install 5 years from now. What if these distributors aren’t around anymore? How do I get my software back?

Granted, 5 years is a bit of an extreme example, after all I may have a machine that won’t even run those games anymore (although that’s increasingly no longer the case). But, even in a year an online seller could be gone. And if they don’t allow copies to backup (I believe d2d does NOT, but don’t quote me) then I’m out of luck.

And, I’m sure this crowd can appreciate that I do have games I like to go back to years later (if I can).
Michael Pachter said on September 12th, 2006 at 3:55 pm:
Tell Smed to call me. 213-688-4474
Morgan Ramsay said on September 12th, 2006 at 3:59 pm:
Okay. Done.
Raph said on September 12th, 2006 at 4:00 pm:
Of course, I am now sitting here going, “Michael Pachter reads my blog?”

I forwarded it on too.
Michael Pachter said on September 12th, 2006 at 4:04 pm:
Of course I read your blog. Don’t sell yourself short . . .
Dave Rickey said on September 12th, 2006 at 4:31 pm:
Well, since we’ve got your attention, do you remember that statement about the total maximum size of the MMO market? I remarked at the time that it deserved to go down with “I think there’s a world market for about five computers.” and “640k ought to be enough memory for anyone.” Unfortunately, web-rot seems to have made both the story you were quoted in and my response disappear into the bit bucket.

Admittedly, the only way to not be wrong is to never make a prediction, but you seem to err on the side of the status quo fairly consistantly.

–Dave
Darniaq said on September 12th, 2006 at 4:39 pm:
Hehe.

I actually don’t disagree entirely with Michael here. However, that’s because it largely depends on what is being considered in this equation.

Is it, as mentioned, just U.S.? Just traditional trial/buy digital download games and MMOs (excluding the web stuff Raph mentioned)? Just including those established distribution networks like any MMO and RealNetworks, MSN, Pogo? In short, where are the numbers coming from and how are the being compared.

There are all sorts of numbers that could be combined to make it appear as though brick&mortar is and will be where it’s at. And it’s not unbelievable. Being at retail is free advertising unto itself, with extra support from over a century of retailers being in the act of selling by themselves, in addition to whatever the publisher does for advertising. The significance here is that retailers can, through floor traffic, circulars, specials, etc. generate many multiples of advertising potential as a marketing budget can do alone.

Further, how different is digital distribution really? All the distribtion sites have the same resource challenges as retail:

- there’s only so many games that can be brought to the user’s attention.
- The user has specific navigation/viewing patterns that can be predicted, tracked and managed.
- The price/value of an experience is relative to experiences it is next to.
- Experiences are still sub-categorized into different “Sections”.
- Users like the perception of variety and quantity yet tend to lean towards what they know (explains all those match-3 games out there )
- The distribution channel has a lock on what gets distributed and how it is sold. The trend is therefore to design for that channel. More popular channels are self-fulfilling successes.

In short, the internet is a Yellow Pages directory without page numbers and users must still be directed to what they seek. So the easiest model to pick up was the traditional commerce/communication model we’re all familiar with.

MMOs change this incredibly, but they do not make up the lions’ share of the games business. They generate a lot of money of course.
Dave Rickey said on September 12th, 2006 at 5:01 pm:
There’s always the Manifesto model. If Greg is right, that the reason the PC market has been contracting even as the installed base of PC’s has been rising is because the variety of games has been steadily reduced by the publishers focus on potential hits (created by the retailers limited shelf space), then half of the potential PC games market is lying dormant.

Piracy is a non-starter, IMO. There’s plenty of piracy on consoles, and PC games have *always* been pirated, although an argument could be made that the internet (and broadband) has made piracy more efficient and widespread, I’m not sure I buy it.

But certainly DD opens up the potential for “sleeper” success stories. Where a brick and mortar retailer has limited shelf space, and will drop any title that isn’t moving in the first week or two, a game that isn’t selling doesn’t cost a DD pipeline anything. And GameTap has essentially succeeded primarily because of the retro-games it makes available, games that would never be carried on the shelves.

–Dave
Michael Chui said on September 12th, 2006 at 5:25 pm:
For me, it comes down to the fact you lose nothing, yet gain something by moving to digital distribution. What the question really is is whether or not the market is willing to make the move, and I think they are. The purchasers are tech-savvy, and even if they aren’t, they probably know ten people who are and are willing to share their knowledge. Like I said at the beginning, anyone who buys these games can put them on a disc anyways. They’ll do it whether it’s legal or not. And the only reason to do it for them is legality. Manual? It’s a downloadable PDF. Art? You can fit an exponentially greater amount of art on a webpage than on a box. Special doodads? Mail it. Or better yet, sell it separately.

All that said, I freely admit to being completely unlettered in business practices and the state of the industry. So if I’m wrong, I’m wrong. But I haven’t seen an argument that even suggests I might be. I guess I should therefore pipe down. =D
magicback (frank) said on September 12th, 2006 at 6:57 pm:
On a revenue basis Pachter may be closer to the truth while on a quantity basis Smedley may be closer. I’ll go with Smedley on this one.

In the console wars, there is a trend towards building a ‘walled garden’ of DD. As the consoles do not have burner or perhaps not a large HD, DD becomes a sort of a virtual goods that works only within the particular platform (keyed to that particular console). So, looking at the whole market where consoles currently dominate, the drawbacks of DD noted by Pachter may be accurate.

However, DD does have the power to rapidly transform the marketplace. Retailers will try to hold on to their traditional distribution channel, but I’ll expect them to coop DD and start offering hybrid DD services: like building a DD archival service or distribution point to pick on the shiny box & premiums post DD.

Simply, if iTunes can take off like wildfire, I expect something like iGames to do so likewise. So my money is with Smedley.

Frank
... said on September 12th, 2006 at 7:39 pm:
Personally, I would prefer to buy a video game at a retailer because I just loving actually owning this…Magic. I am big gamer and I like to have an actual collection, something you can feel, own, have an authentic, real object you can touch. You can have a wonderful artwork on a box and even more inside.

vir‧tu‧al /ˈvɜrtʃuəl/ [vur-choo-uhl]
Being such in essence or effect though not in actual fact;

But, nonetheless, the digital distribution of video games is an innovative, highly efficient and is a large commerce.
Morgan Ramsay said on September 12th, 2006 at 8:08 pm:
Virtual is also a synonym for practical.

S: (adj) virtual, practical (being actually such in almost every respect) “a practical failure”; “the once elegant temple lay in virtual ruin”
Michael Chui said on September 12th, 2006 at 10:07 pm:
50 bonus points to Morgan for style. That made my day. Well, the half hour that’s left of it, that is. Ta, mate.
Rik said on September 13th, 2006 at 12:24 am:
I think part of the problem is that it’s hard to tell the difference from Direct Distrobution and Vanity press. If it didn’t take 12 coders and 12 art guys nine months to make is it realy a game? Uh, yea. One guys can crank out something over a long weekend, and if people pay $1 to download, then it’s part of the market.
Neil Sorens said on September 13th, 2006 at 1:16 am:
BTW, Michael Pachter said he was misquoted by the NYT in one instance and sent this email to the Dubious Quality blog to clarify:

I would like the opportunity to correct a couple of misperceptions that may have been created by the press. First, I told the NY Times reporter that I doubted that there were 4 million people who would pay $10 - 15 per month for more than a year without tiring of the experience of playing a single game. Somehow, that got translated to no more than 4 million online. I agree that there are 100 million who would play online games for free, fewer at higher price points. I also think that the success of WoW will attract a lot of new online games, each of which will compete for a slice of the total market. Even if you think that the number is 10 million that will pay $10-15 per month, the total will be sliced 10 ways, so it will be tough for any game to attract and retain 4 million users.
Morgan Ramsay said on September 13th, 2006 at 2:27 am:
The more errors uncorrected by the press increases my concern about the utility of the media… They really should pay more attention to what they publish; otherwise, they’ll eventually be left alone to create their own content.

Thank goodness for the Web.
David (Tal) said on September 13th, 2006 at 3:57 am:
I’m not so sure that retail channels are going to go away in favor of download any time soon - but I do think that traditional brick and mortar shelf space is going to continue to rapidly transition to online retail channels. From there it’s not a big stretch to see more distribution via download.

For example, I still go to EBX to shop for games - mainly because I don’t monitor any other form of advertising unless it happens to be a newsletter from a company whose games I am already playing. However, I haven’t set foot in a physical EBX in over three years. I go to their website (ebgames.com) because not only can I see their entire selection there, I can do it quickly and easily and I don’t have to get in the car and drive 4 miles to the mall in traffic.

If ebgames.com were to begin offering more games as direct download instead of as mail-order CDs or DVDs then I would probably be downloading more games. As it is, I always download MMO expansions, since I already have the physical game, and I can go to that company’s website easily enough.

So is DD going to take over from brick and mortar for games in general? Probably not until the retailers start doing it rather than the publishers. The reason there is that retailers do one thing that publishers don’t. They pull together titles from many different publishers and let you see them all side by side. That creates a lot of impulse buys and you still can’t replace that form of product exposure.

I do think DD is going to be a pretty big chunk of distribution however, especially for games that have an online or episodal component to them. It just makes sense that way.

Morgan said -

The more errors uncorrected by the press increases my concern about the utility of the media… They really should pay more attention to what they publish; otherwise, they’ll eventually be left alone to create their own content.

Thank goodness for the Web.

It’s just as ready to read bad or misrepresented reporting on the web as it is to read it in the magazines and papers Part of my job usually involves explaining to my company’s customers that what they read out there on some internet message board is actually not a good thing to do with our products. The real problem here is the ability of the journalist in question to present the facts objectively and accurately - and that applies whether it’s online or not
Lisa's Darren said on September 13th, 2006 at 4:00 am:
Copyright infringement is a hot topic to software publishers as well as other forms of entertainment. This does not apply to MMOs since you need a CD-key or some other unique ID tied to the account to activate access to their servers, but what about the stand alone game like Grand Theft Auto, Madden, or any other non-mmo game? Download a game, and the manufacturer can attach a unique ID to your PC so that the Game in question can’t be loaded on another PC.

The inherent security available to a boxed version of a game has already been superceded by at least one download system

Look at Steam, you download and install then authenticate online, that game is then tied to your steam account and can only be moved around along with that steam account.

Its less crackable than any disk based standalone system in use today.
darniaq said on September 13th, 2006 at 6:23 am:
Michael Chui wrote: For me, it comes down to the fact you lose nothing, yet gain something by moving to digital distribution

It makes it harder for a publisher to peddle their offering to a brick & mortar if they also plan to feature it as digital distribution. Brick & mortar doesn’t rely on any one product. They rely on the aggregate and the ability to predict that a consumer will walk out of the store with 10-20%+ more than they intended to. Any time a publisher has what the retailer agrees is the best thing evar!1!, the retailer wants, and expects, to control how it’s delivered. And that’s still hard good. I expect to see a Wal*mart/Target digitial distribution system someday, but I doubt anytime soon, and I doubt it’d be well supported.

People go online to buy something. People go to retail to shop.
Athela said on September 13th, 2006 at 7:20 am:
I am a PC gamer and there is so little on store shelves at any given time these days for PC, lots of empty shelf space. Bleh. I just want to play so I would download, no problems, the best new stuff. I’ve got broadband and am about to get a hot new pc that can handle about anything. Load up the games, I say. I am, of course, atypical.
Allen Sligar said on September 13th, 2006 at 8:08 am:
The costs for distrobution channels and for physical product are not going down, no matter how efficient ones “just in time” inventory system is, in fact its difficult for games distributors to even handle inventory, (and thus was born the “games bargain bin”). No in fact prices are rising for physical product. Gas, Payroll, Packaging, Shipping, etc. and what of the externalities related to physical product? (strikes? natural disasters? import/export trade restrictions).

And then there is demand.

How to predictively model demand for a game, to prevent bargain-bin-ization of your game within 3-4 months, or resale in the secondary used market.

No, physical product for consumable media/entertainment IS going the way of the Dino, because there are to many barriers, it’s to costly and there are to many positive economies of scale and optimizations to be had by DD.

So yeah, Smedley is right to the extent that people like DD for a variety of games. Which does not translate into channeling thier choice in types of games. The beauty of DD is that it OPENS the market for indies, for 9 coders and 9 programmers on a limited butget in 9 months to produce a saleable game, without channel distrobutions and barriers to entry. MS is right to open up the platform to development, thats a long term view of controlling the platform rather than attempting to control market share, which over the long term cannot be done with reliability.

And this is why brick and mortor retailers should take this opprotunity to capitalize on thier brand strengths and capture an audiance on the web via DD and direct shipping physical product (for people who still like the box). Because they no longer command the market nor control the distrobution chain (read platform here).

Brick and mortor retail is great for large anchor locations, in this Raph is right insofar as the purchasers are Parents, after all a present on the holidays with a account key just dosnt have the same impact as a nice game box with great artwork. This is why there will continue to be a physical market for product, however there may be price differentials related to buying retail over buying via DD.

In fact it would be wise to start introducing those differentials now, meaning make it cheaper to DD a game rather than buy it retail, or rather actually PASS along the savings related to DD to your customers…

Which of course leads to price points and the metrics required to capture them, but thats another subject entirely.
Trucegore said on September 13th, 2006 at 9:02 am:
Funny, you can get every single SOE game by DD.

Infact, i cant think of a single MMO that you cant get right from the site.

Now, on the other hand, non-mmo games….mabye ill give him that.

But even still… STEAM, the new SOE louncher… Game tap…
Trucegore said on September 13th, 2006 at 9:05 am:
*** Side note.

There will always be the collectors, great and small, that want that box on the shelf.

Its the same with music.

I could have downloaded the new GWAR album… (and i did >.>)… but I bought the CD from a store for the box art, mini-poster and DVD that came with it.
Raph said on September 13th, 2006 at 9:10 am:
That right there is lifestyle marketing. You’re making my point, Trucegore.
Michael Chui said on September 13th, 2006 at 9:13 am:
People go online to buy something. People go to retail to shop.

Excellent point, echoing the argument between the digital and physical library. (My department used to be a training ground for librarians; I am permeated by this bick– er, polite discussion.)

Retail will definitely not fade quietly into the night. They will not vanish in a massive explosion, either. But I think it’s pretty certain that they will become less relevant in the game market, and ultimately minimal, vestigial remnants lasting as a couple shelves in a Walmart for the kids to occupy themselves with while Mom goes shopping. And I’m going to laugh if this not only comes true, but that they set up computers with restricted browsing so that you can shop for games online in the store.
Trucegore said on September 13th, 2006 at 9:18 am:
Any time man. =)

BTW.
/plug
Great album. GWAR rules.
/endplug.
Tholal said on September 13th, 2006 at 9:31 am:
Galactic Civilizations has digital distribution and no copy protection and it has had great sales. I ordered it online and downloaded it the day it was released (though admittedly, I did request that they send me a boxed copy as well).

Also, in just the last couple of months, I’ve downloaded the clients for Eve, Saga of Ryzom and Ultima Online, all direct from the official sites. And it was great! I still browse the games section when I’m in a computer store, but the selection in most places seems woefully inadequate, even at a specialty store like EBGames. The last games I bought in a store were Civ IV (earlier this year) and WoW (November of 2004). Though I’m probably not a typical gamer, as I dont own any consoles.

Yes, there are still a lot of people on dialup and/or crappy connections. But there are many tech-oriented countries in asia with mass broadband penetration and the US is slowly moving that way (country-size probably plays a very large part in this). So those barriers are already falling.

It’s also important to keep in mind that the current, largest gaming market is consoles. And digital distribution for those depends on what the parent companies decide to do about it and how accesible broadband will be to the average console owner.
Michael Chui said on September 13th, 2006 at 9:59 am:
The last game I bought in-store was Warcraft 3: Frozen Throne. At the opening. It’s signed. =P
Chas said on September 13th, 2006 at 10:28 am:
I haven’t seen the numbers, but I have to bet that digital distribution is becoming the more profitable path for a developer. Yes, there are bandwidth costs, but there aren’t distributors, packaging, payments for prominent displays, or any of the other expenses associated with the retailer.

Game shops used to be the place to discover something new- to learn about the game and make the decision there. With the slipshod quality of some really well-packaged games, a great deal of us have learned not to believe the hype. $50 is alot for a gamer. Our decision is made online- often even bypassing the “professional” review sites. We make our decision online, why not buy it there?

Now, I used to treat my local EB like I treated my friendly neighborhood gaming shop- I’ll send my business there because I believed it was important to support the store. It brought something to gamers. It doesn’t now. The gamers meet online. Whether they were driven there by corporate decisions that discouraged the “store as a social center” or just migrated on its own, it doesn’t matter. The electronic game store is losing relevance.

It won’t be an overnight thing, and I think we’ll see MMO developers leading the way, but 20% within 10 years? That’s a sucker bet.
darniaq said on September 13th, 2006 at 10:36 am:
Digital distribution is more profitable if the volume of sales is the same as it would be at retail. Otherwise, there’s a chance that the greater profit-per-unit could be eaten up by simply selling less units.

I’m no expert on this by any stretch, but I look at history. Take WoW for example. This was quite possibly the most anticipated MMOG coming. It’s from Blizzard. It’s got Warcraft. What could possibly go wrong?

Had they gone with a full digital distribution model though, would they have sold as many units as quickly? If they offered it both online and at retail, would they have turned off the retail partners? I don’t know, but VUG didn’t think it was worth taking a chance either. Not the only example either.

Michael Chui wrote: They will not vanish in a massive explosion, either. But I think it’s pretty certain that they will become less relevant in the game market, and ultimately minimal, vestigial remnants lasting as a couple shelves in a Walmart for the kids to occupy themselves with while Mom goes shopping. And I’m going to laugh if this not only comes true, but that they set up computers with restricted browsing so that you can shop for games online in the store.

I agree. Even if they change in relevance in some parts of gaming, they still fulfill a need until we’re all jacked into the matrix. Hard to try on clothes with a mouse, and as good as something can look in the mirror at a store while bad at home, imagine how much better it could look on an avatar versus how it wouldn’t look that way at home

And as it happens, the Target by me does have restricted-access computers upon which you can search their store catalog online. Of course, it’s restricted such that you can’t do competitive shopping
Prokofy Neva said on September 14th, 2006 at 5:52 am:
>Digital downloads are not portable (you can’t take [them] over to your friend’s house), can’t be sold at garage sales, are limited to broadband households, and take up a disproportionate amount of disk space.

How many people play Yahoo’s Book Worm, I wonder, at least 30 minutes a day? I used to, as did my kids. It’s not portable as such, but you just tell somebody on Aim or Yahoo Messenger to go download their own copy, it doesn’t take u THAT much disc space.

He’s right about the ability to take games over to friends’ houses — and more to the point, sell them at tag sales or informal playground bazaaars. Yes, there’s this idea that once you’ve used the serial number that you can’t resell it…except kids resell them all the time. They simply take over the other kid’s account and they don’t even bother changing the ID information once they have the password. Game companies try to crack down on this, of course, but how much do they succeed? Kids share laptops, they swipe somebody’s public wireless, I’m not so certain it’s easy to control. There’s a lot of this kind of sharing and I think probably no one can even estimate it.
Dave Rickey said on September 14th, 2006 at 12:37 pm:
Walmart has those now, as well, at least the one here in SW Austin has one at the Electronics checkout, and yeah it restricts you to the Walmart site. Of course, I’ve got my Blackberry, and as “Surf anywhere” devices like that become more standard, the walled garden effect will get neutralized.

On a subscription plan, I don’t care who is paying for the subscription, as long as it’s effectively infeasible for more than one to play on it. The console manufacturers have this notion in the back of their heads that they can lock a game down to a single console and eliminate the game resale and rental market, or at least force the merchants to come to them and cut them in, but I don’t think it’s going to work out like they hope.

–Dave
Tess said on September 15th, 2006 at 1:58 pm:
Mr. Pachter (hi, Mr. Pachter), has also remarked that our business “attracts foolish young punks.” Well, yes, our business attracts a lot of people, foolish young punks, or otherwise. However, most of us do not, in fact, work with foolish young punks, and we don’t really appreciate the stereotype, thanks.

Moreover, I also recall him once remarking that “SpikeTV is the gamer.” Yeah. That’s us. We’re all about the girls on the trampolines, baby. Can’t get enough of ‘em. Oh, I understand it’s part of his job to make demographic generalizations, at times, but I’m not very good at marching quietly into the tepid oblivion of statistical insignificance. Maybe I’m a foolish young punk, after all.
Dave Rickey said on September 15th, 2006 at 3:19 pm:
I finally found a cache of the quote, and it wasn’t a few years ago, it was only last year, September 5th, and it doesn’t leave much room for misquoting (although it also isn’t exactly as I remember it, that may have been from a few years ago and might not have been Mr. Pachter):

In any case, as in years past, there are those who believe that paid online gaming is all a fad anyway.
“I don’t think there are four million people in the world who really want to play online games every month,” said Michael Pachter, a research analyst for Wedbush Morgan, a securities firm. “World of Warcraft is such an exception. I frankly think it’s the buzz factor, and eventually it will come back to the mean, maybe a million subscribers.”

“It may continue to grow in China,” Mr. Pachter added, “but not in Europe or the U.S. We don’t need the imaginary outlet to feel a sense of accomplishment here. It just doesn’t work in the U.S. It just doesn’t make any sense.”

My money is with Smed’s.

–Dave
Michael Chui said on September 15th, 2006 at 3:51 pm:
We don’t need the imaginary outlet to feel a sense of accomplishment here.

…….

*glances at Iraq*
Michael Pachter said on September 16th, 2006 at 4:36 am:
Tess–I’ve never watched SpikeTV, and don’t believe I have ever discussed that outlet with anyone (until now), media or otherwise. I don’t believe I have ever used the word “foolish” in my life, nor do I generally use terms like “punk” unless discussing a music genre from the early 80s.

I think I have described one particular team of developers as “tatted”, which could conceivably have been interpreted as “punks”, but I was merely describing why that particular group would not mesh well with the suits at a public company who was rumored to be looking to buy them.

If I didn’t respect the people who worked in this business, I would not spend time reading comments such as yours.
Dave Rickey said on September 17th, 2006 at 9:54 am:
Re-reading through this thread (and my archive from my old blog), I may be being too hostile. I was even more wrong than Mr. Pachter about WoW, for quite some time I was looking desperately for evidence that it wasn’t as successful as it turned out to be.

I have to admit, it bothers me that the investment community can be so dependant on a single expert, but that is a systemic fault of the herd mentality in general and that of the investment community in specific, and not of the person who occupies the role.

–Dave
Tess said on September 20th, 2006 at 12:06 pm:
Mr. Pachter, let me begin by saying that I apologize sincerely for my misquote. That should have been “young foolish punks,” rather than “foolish young punks.”

The source for this was Red Herring. The article is currently archived, and no longer indexed by Google. If you don’t mind logging in, you can find it here:

http://www.redherring.com/ArchiveAccess.aspx?url=%2fArticle.aspx%3fa%3d12839%26hed%3dGTA%2bGets%2b%25e2%2580%2598Adults%2bOnly%25e2%2580%2599%2bRating

The source for the “Spike TV” reference was a GameSpot interview:

http://www.gamespot.com/news/6126354.html

That view would certainly seem to be repudiated by the recent NPD study, of which I’m sure you’re aware.

I do apologize if I am misrepresenting your views at all. (I really was rather mean by taking the “punks” quote out of context.) I really do appreciate and respect that you take the time to read what we’re writing.
Michael Pachter said on September 22nd, 2006 at 9:31 pm:
Sorry, Tess, you’re right about my comments and about demographic generalizations. I apologize to all young foolish punks, and to all Spike TV aficionados. I still have as yet to watch Spike TV, though. I’m an old guy trying to make a living, and my job is to advise institutions about investments in public companies. I guess the press appreciates my candor and incite-ful comments (pun intended).

Raf, 10 days and counting, and no calls from Smed (or anyone else) about the bet.

Smed makes a bet

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