Agreed. That has a lot to do with my thinking here. Is, great that a system can cause such excitement, but it's the games the bring the money. You can't think about just a system without something to sustain it.
The sales generally pick up because the developers have become more comfortable with the platform and are more capable of putting out much better product.
The 360's visuals right now aren't impressive. They look like a really really good xbox game. I know there is a difference, but not quite the jump we were hoping for......yet. And from what I understand from reading interviews from the guys that make these games, it takes awhile for them to maximize what is inside the magic box. So, your statement about game sales picking up after the two years is right on there.
You are very right on the used games too. That has alot more to do with the equation than most people realize...I think. I have played TONS of games on the systems I have because I am trading constantly, so like you said, my wallet doesn't hurt.
Gamers are a very finicky bunch. If you have ever played on XboxLive, that is very very apparent.
Go to the game forums...keep in mind, you are more than likely reading something posted by a 14 year old, but nevertheless, if you want to get a grasp on the gaming movement....that is the best place.
If you read Gamestop's statements regarding sales, they'll tell you that margins are higher on software than hardware sales. It's typically the two years after a new console is released that game sales really pick up.
I think to counter the hurting wallets from consumers after buying those systems will be the used market. A lot of people with older systems are going to find a huge array of used games to pick from, because several games will be traded in to buy one for a new console.
Hey, as one gamer to another...you and I both know that this stock makes sense. There is no such thing as a sure thing, or promises....but you and I both know gaming runs in cycles. I convinced my father to buy into it because as I said to him, every 5 years or so, you have the big companys offering "the bigger and better" console, trying to advance to the next gen.
I think the next year in a half are where its at in gaming. To me as a retail buy, GME makes alot of sense.
I haven't bought and Xbox game in the last 3 months. Why would I? The next platform is coming out.
I would go out on a limb, and I think it is a rather sturdy one, that with every platform sold, you have an average of two games that go with it. Out of anything I could invest in, I would feel most comfortable with this, because it is what I know. Gamestop delivered a lethal blow to the competition, or lack thereof, by making their competitor and ally. Great great move. Especially since EB was bigger. Now, the dust will settle...and we'll see. I would say hope, but that word doesn't belong in the equation.
I'm saying that I don't know the answer. I am merely offering insight from a software engineering perspective that indicates to me it could become easier to make games. You notice how many games come out for all systems? When it's easy to do cross-platform development, there is a bit more overhead involved. The three companies aren't using the same APIs for their systems. There's some kind of software in the middle. Whenever a company sells a game for a PS3 or an Xbox 360, the companies that made them get a small licensing fee. They want developers to choose them, so they will want to make it as easy as they can on developers. The best way to do this is with powerful development platforms and support.
I would not buy ERTS because I don't like their games. :) I'm not a sports game guy.
I do have to say...this is one of the more sane dialogues that I have seen on any of the yahoo finance boards in awhile.
So...I have a question....and I really don't know this...so maybe you can help.
On the issue of games...
I have heard developers saying that it will cost more to make their games. I can't say if that is true or not. You could show me a spec of the systems, and I'll look at you like, huh? I know what I see on the screen. I don't understand those things well, hence, I wouldn't invest in EA. Anyways, that is their justification for a 60 price tag that is to come. Is that bs from them for more profits?
My sense tells me, you spend all of your money on the product until it is finalized, and then stamping out the disc is next to nothing, and then profits obviously roll in. Halo anyone?
Like I said before, the developers say this stuff is expensive...is that smoke and mirrors?
This pertains to the games, and not the retail side. (GME) They win either way.
Agreed on the generation of NES gamers. I'm one of them. :) I'm 26, btw.
I disagree that costs are getting heavier on the game companies. Let me offer you some insight from a software engineer. (me)
As systems get more powerful, the amount of available overhead goes way up. One of the major causes of overhead is development tools or libraries that do a lot at runtime. These are general purpose tools to make games, rather than being more specific to the task at hand. When you have something specific, it's always faster than something general-use. However, game sales are determined by recouping your development costs. The best way to do this is to keep those costs down.
All consoles have development kits with all kinds of software tools. Sony licensed the Unreal engine for the PS3 so that developers can get going right off with it.
The bottom line is: when you have more room for overhead, you have more room for runtime tools that help you get your games written faster, and in a more stable way.
I am not 100% sure this is how it will pan out, but I believe the possibility exists that the next generation systems can lower costs. Just something to keep in mind.
I see what you are saying. I admit, I am more console minded than PC minded, and don't factor that as much into my outlook. PCs are a no brainer over here. And I do agree with you that America's gamers will outnumber anyone elses. There was an interesting article in one of the Gameinformers? Gamepros? About where the industry is going because (I'm 28) and they were talking about you have a generation of NES fans that are all grown up, and they buy games for themselves now as well as their kids, as where this wasn't true in the past fifteen years. It happens, but in such a micro scale that to find many console players over the age of 25 was much harder to find than now.
In the end, we all win. Either way. We agree the industry is growing, and I think it is going to be monstorous.
What would you rather do, watch a movie? Or experience it. That is my vision of where this is going.
Nintendo might not be the most popular company, but we will all owe them a thanks in time, because they are currently trying to expand the market to people that traditionally wouldn't touch a console. Even the head of Microsofts Xbox division acknowledged that. So, either way, good things to come.
Personally, investing in gaming in the retail portion is much more profitable than game companys. I might be wrong, but production costs are getting huge on the gamemakers.
Japan's video game market has been declining the last couple years, while ours is setting records left and right. Japan doesn't produce or buy a lot of PC games, and that's also huge here. Also keep in mind that the Japanese aren't having as many children as they used to so that further limits growth potential.
Article showing US video game sales (not including PC games) $9.9 billion in 2004:
Article showing Japanese video game sales $4.26 billion in software sales + $4 billion in hardware sales in 2004:
Beyond the system, think about the software to follow. You will see a dip after the holiday because the majority of XBoxes will have gone out the door, but the store still sells the games to sustain the system.
The DS will run very consistent, as Nintendo is going online next month.
The PSP is starting to pick up steam.
Next year you have Sony and Nintendo coming out as well, TWO systems is better than one!
I am not a trader...I look at longs. I dont play with small moves. I personally am in this until next season, THEN I'll see what happens. There is an opprotunity here to capitalize on the next gen games, and that only comes along every 5 years or so. So don't miss it.
I said once before, gaming is beating Hollywood into the ground. Halo2 alone destroyed any box office record that was standing. $50 a game as opposed to $8 a ticket. Oh man, doesn't take long before you see the POTENTIAL.
It isn't fully realized yet.