Tuesday, October 20, 2009

Protesting Pachter's iPod Publisher Plea

Michael Pachter is normally a pretty rational guy as far as analysts go. However, I found his quotes in this piece on GamesIndustry.Biz to be strangely off the mark.

In the piece, Pachter claims that publishers are at risk of spoiling their own party, so to speak, by publishing games on iPhone and iPod Touch at prices lower than those they command on other platforms. He states,
"Putting well established franchises such as Madden on the iPod Touch for USD 10 cheapens their value, he explained. "Whether it's the same experience or not, and it's not, why would I ever spend USD 60 for Madden if I can get it for USD 10 on my iPod Touch?"
He goes on to state that this contributes to the risk of the iPod Touch displacing the DS (and one would assume PSP as well),
"It's a serious threat to pricing. And once people start to look at this as a substitute for the DS for smaller kids, for 12 and unders, then you're going to train a whole generation of 12 and unders that this is a perfectly acceptable gaming experience at that low price point."
I believe his line of thinking here is seriously flawed. I beleive this for three reasons:

  1. Different platforms merit different pricing. I'm surprised at the first quote. Madden on PSP today retails for under $40, vs $60 on PS3 or 360. By his line of thinking, why would anyone buy the $60 version? The reasons are that the experiences *are* different, the consumer may own a particular platform and not be swayed to another for an individual title, and the economics of each platform is different (dev cost, distribution costs, etc). To take it to the extreme, There's a version of Prince of Persia on cell phones that doesn't go far in displacing the $60 console version, despite selling only for a couple dollars.
  2. Meritocracy in the market. Pachter seems to claim that kids playing on an iPod touch won't 'move up' to other platforms as the previous generation did from GBA to DS/PSP/Home consoles. First, I'm not sure this platform graduation is anything but myth. If true though, the reason the gamers would 'move up' is because the next platform would offer a higher quality experience and or different content to suit their changing tastes. If other handhelds, or home consoles for that matter, can't offer a superior experience to the Ipod Touch, then they will fail - and should fail. On the other hand, if they do offer a superior experience, then they should be able to charge for it. If Nintendo or Sony can't compete on their own merits, it's not up to EA to prop them up - and if they do, then they should be compensated in a way that lets them lower the price of titles to better compete.
  3. No man, nor publisher, is an island. The Appstore, while not an open platform*, is certainly more open than the controlled, curated, catalog of titles available for handhelds. What that leads to is the tens of thousands of apps that we've seen show up on it, and I'm not sure that any publisher, even EA, refusing to publish on it is going to make any difference whatsoever. [I suppose that a cartel of publishers could agree in unison to boycott the platform, hoping that absence of ANY big-name content would poison consumer interest in the device. This has happened in the past with things like music labels boycotting Napster, or (IIRC) movie studios with betamax - however, its legality is questionable, the games publishers aren't organized in such a fashion, and there's enough of an indie community that I don't think this would work anyway]. In any case, the publishers seem to be faring fine while still charging a premium for their IP (see the top grossing list)
I guess what has me so bent out of shape is that it sounds so much like the death knells of the music industry. "$0.99 downloads will kill us all! What will become of our glorious CDs?"

People kept making music. People are going to keep making games. Whether to adapt to change is up to you, but don't expect the market not to change because you don't like the way it's changing.

Make excuses or make money, your call.

1 comment:

Greg said...

I don't think Pachter has ever quite gotten mobile games of any sort. But there's no question that iPhone pricing is somewhat screwed up. But then, so is the merchandising model for iPhone apps.