As a kid I was a huge gamer.  In fact the day I turned 16 I got my first job at Software Etc selling software in Capitola.

Over the years I can’t remember a bigger time to be a gamer than the holidays, because tons of games came out.  I’ve noticed over the last few years it seems that the holiday release schedule has stopped happening.

This year we’ve seen the release of the following big titles or products in Q4.

Call of Duty: Black Ops

World of Warcraft: Cataclysm

Xbox Kinect

PlayStation Move

Gran Turismo 5

3 pieces of software (one an expansion pack) and 2 pieces of physical hardware.

So What Happened?

My hunch is a few factors all have combined together that has literally ripped seasonality out of the console/pc business.

1.  Cost

On the iOS/Android developers can make games for much less.  Update more often with new features, sell additional items with micro transactions, but on the PC or Home Consoles this behavior isn’t expected.  On the PC and Consoles the developer costs have skyrocketed.  A game thats multiple years in the making will see a budget in the 10s of millions of dollars.  Take Gran Turismo 5 which as of 2009 had cost nearly 60 million to make!

2.  Games Need To Sell

Since the costs have increased so dramatically to make the games while the average selling price has only gone from $49.99 to $59.99 over the last 10 years. pushing something out to subpar reviews to make the holiday schedule is not worth it.  You see this often happen where games will be moved to either avoid going against a batch of games all together.  If someone has the figure please leave it in the comments, but I believe in the first month a game will sell about 75% of its total lifespan in terms of units.  These type of delays lead to games like Killzone 3, Little Big Planet 2 and other titles being pushed out to different calendar months to ensure good sales.

3.  Shelf Space  is Shrinking

Online or offline retailers are dedicating less and less space for games.  Gamestop is moving full force into the used game business in hopes of increasing their margins even further.  They sell you a game for 59.99, buy it back from you for 24.99 then resell it for 49.99.  ChaChing.  Take for example UFC Undisputed 2010.  The title came out to great reviews , but did not sell well in its first week.  So what did Amazon.com do? Knocked the price from 59.99 to 39.99 in one week!  What happens here is a domino effect as other retailers follow.

4.  Too Much Competition

As more and more folks pickup an Android Phone, iPad, iPhone or any of the new multifunctional devices the time they have to play PC or Home Console games has shrunk.  Its simply easier and cheaper for someone to pay $1.99 for Angry Birds, get hours of enjoyment out of it and never have to turn on the TV to get it.

5.  Most Consumers want simplicity

Nintendo got very close with the Wii and Nintendo DS.  People wanted an experience that was extremely simple with few buttons.  With touch screen devices consumers get an experience that has zero buttons, installs in seconds and is engaging.  Titles like Doodle Jump, Angry Birds and Cut The Rope never would’ve been possible on consoles due to cost and distribution issues.

Tags: console, ios, iPhone, Playstation 3, Video Games, xbox 360