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BBC Ponders Another Games Industry Crash
>> From news.bbc.co.uk:
[QUOTE]
Yes, gamers are snapping up the new generation of games consoles -- Microsoft's Xbox 360, Nintendo's Wii, and Sony's Playstation 3 [PS3], but at huge cost to the industry. Hardware makers are losing hundreds of dollars on every console sold, and games publishers face an "increasingly difficult environment, as rising development costs and small user bases [mean] that return on investment in next generation games development is unlikely to be achieved before 2008," according to media analysts Screen Digest. More importantly, though, the video games publishers are facing a revolution of their business model.
"Development times, team sizes and complexity have been exacerbated by increasingly demanding next generation games," says Ed Barton at Screen Digest.
He predicts that "only a tiny proportion of next generation titles are likely to achieve profitability in the near future".
As it turns out, software piracy can be good for you.
"We have extremely strong brands [in Asia] thanks to the pirates; they have created millions of consumers - not customers," says Mr Florin (executive vice president at EA).
The internet allows EA to tap into this market and make some money after all.
The Korean gamers are spending serious money on accessories and customisations of the online game.
"We now have to learn the business of running an online community," says Mr Florin.
[/QUOTE]
Full Story: news.bbc.co.uk
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