Some interesting analysis from Mat Piscatella about the state of the industry.
- Exclusives aren’t driving console purchases anymore, as evidenced by Forza Horizon 5 most of all.
- Nintendo would likely benefit from this too, but they’re unlikely to do so anytime soon.
- It’s too early to predict any sort of success for Switch 2, as the numbers they’re seeing right now may be little more than the supply being great enough to reach their biggest fans.
- Overall demand for gaming hasn’t gone down and has stabilized. Those dollars won’t be distributed evenly, but the enthusiasts are showing up.
EDIT: And now Sony has a job listing for someone to head an initiative to bring more games to other platforms, including Xbox and Nintendo.
He’s backing it up by misusing data. He’s lumping games together and assuming that they all would hypothetically have the same market characteristics, then extrapolating that to other games.
As an example he brings up how the Pokemon Company has released basically the same software on both Switch and mobile platforms. Which is true, but that does not mean it makes sense for Nintendo to release Tears of the Kingdom on mobile. We can already see that Nintendo knows this because they maintain Mario Kart Tour separately from the console versions. They’re entirely different business models, control schemes, and experiences.
I would argue that a more complicated analysis is required than just saying “multiplatforms are better than exclusives”.
He also just briefly glosses over what is the main BENEFIT to manufacturers: the profits made on hardware sales. There is not a lot of publicly available information, but we do know what each company tends to do. Nintendo prices their hardware above cost, so for them the additional hardware sales could offset the reduced software sales. Xbox prices their hardware at a loss, which explains why they valued exclusivity the least and have finished last in hardware units sold every generation since the original Xbox. Sony usually sells PlayStations at a loss to start the generation, but through hardware revisions and scaling ends up turning them profitable after a few years- a more balanced approach. And we see this reflected in their approaches to exclusivity: Nintendo is super-exclusive, Xbox is loose, and Sony is somewhere in the middle.
You also need to factor in how exclusives impact the ecosystem. The marketing budget for Mario Kart World Tour is not merely helping them to sell the game, but also to sell consoles. And not just consoles, but controllers and cases and branded SD cards and the USB camera and extra docks. It also encourages more software sales: the same person buying Mario Kart World and a Switch 2 might also buy other Switch 2 (or Switch 1) games. Even if they buy 3rd party games, Nintendo is still getting licensing fees. So if they release these big games on other platforms they might gain some revenue, but they lose out on a lot, plus they have to pay licensing fees to Sony/Xbox/Google/Apple/Valve to sell on those platforms.
If we were just discussing software sales in a vaccun then this would be accurate. Any 3rd party publisher has a much easier equation to determine which platforms to release on. Will the additional costs (development of a port plus the fees and asded marketing) be less than the revenue from additional units? It’s a bit complicated because some consumers have multiple platforms and will choose just one to buy the game on. This also helps explain why Sony delays the PC releases: they want to sell as many units overall as possible, but they also want anyone choosing between PS5 or Steam to be pushed to PS5 where their margins are higher.
The author doesn’t have anywhere near the data required to do any of this analysis, so he’s reaching a fundamentally flawed conclusion.
He works at Circana. He’s working with way, way more data than he’s allowed to publicly disclose, since part of Circana’s business is selling the in-depth stuff to partners, as well as analyzing it to show trends to their partners who want to know what is and is not working across the industry at the moment.
Does he have access to the proprietary sales data of Nintendo, Xbox, Sony, Valve, and Google?
I’d be shocked if he did, because those companies are all big enough to have their own in-house departments for that. He’s trying to sell consulting services to smaller publishers. Consults don’t get paid for saying "well I don’t really have enough information to say that for sure*, they get paid for making executives feel smart.
He posts an image like this one along with each monthly report, but that’s also the sort of thing you should probably know before you claim that the author doesn’t have the data he needs. The data they don’t have, they disclose that it’s an estimate. Nintendo doesn’t like to share, but the retail partners that sell their consoles do.
That still doesn’t include most of the data necessary to reach this conclusion, and furthermore the bigger issue is that THE ARTICLE ITSELF DOES NOT CONTAIN ANY. It is an unbacked claim that we cannot verify. If he can’t share the data because ris propriety, he shouldn’t be making the claim publicly.
He’s looking at software sales in a vacuum, and he is probably correct that any singular piece of software would sell more units if it were released on more platforms. That’s not new or interesting: that’s obvious.
What he’s missing, even in the screenshot of claimed data he has, is everything else.
Consultants like this are not trustworthy sources. They’re trying to sell their own product.
The article is a summary of an interview. If he was lying about any of this, competing firms or their business partners would call him out. I know how the world looks from our perspectives and how the console markets have always worked, but that’s why there are companies out there collecting data, and that’s why their perspectives can be worth listening to. No one can predict the future, but he’s sharing his insights into where the wind is blowing, and yes, it’s so that his company can sell a premium product to companies doing market research. The console business model has changed quite dramatically very recently and is looking like it will continue to change. He’s not the only one claiming that the console wars are over.
Well first of all, this interview was published today so the only people who have had a chance to really respond to this are the general public on the internet. Beyond that, it is not safe to assume that any of their competitors would have any reason to respond to this publicly at all. Maybe they do, maybe they don’t, and maybe that decision has more to do with wanting to either keep up with Circana or differentiate from Circana than anything related to the truth. That’s kind of the problem with dealing with bias in sampling like this.
People have been saying this exact same thing for decades and it hasn’t happened yet.
And I’m all in favor of the end of exclusivity. Exclusivity is harmful to consumers, and to society as a whole from the perspective of preserving culture and history. But just because I want something to be true doesn’t mean I’m going to believe some consultant casually speculating while promoting his company.
If he provided data and outlined the methodology of projection they used them we could at least have an interesting conversation about this. But right now he’s just about as credible as the 3rd grader at recess whose uncle works for Nintendo and says the next Halo is coming to Switch.
This isn’t the first time he’s spoken. He’s done this job for a long time, and people trust and respect his work. It would be a hell of a thing if he picked this time to start making things up. The trend he points out is something he acknowledges as a recent trend, in the last year or so, but he’s working with data that’s consistent with my own anecdotes, like how publisher after publisher have found that they’re making more money on PC than on consoles; that games that used to never come out on PC now dwarf the console versions in sales; that my friends mostly stopped playing on consoles last gen, and that I don’t see a need for new ones; that when I see kids playing games out and about, they’re on mobile far more often than they’re on Switch; and on and on.
I’ve been polite this whole time, but you decided this man didn’t know what he was talking about, backpedaled very hard when you found out what his actual credentials were, and then decided he was untrustworthy instead. He’s not the one with the credibility of a 3rd grader.
I didn’t backpedal on anything at all so I’m not sure why you think that. My initial statement was that he did not provide enough data to reach his conclusion and seems to be drastically oversimplifying the problem to reach his conclusion, by focusing on the unit sales of singular pieces of software in a vacuum and assuming that games are fungible. I pointed out how different videogame companies operate with different business models that are more or less condusive to exclusive 1st party titles. None of that has changed, and the only thing you’ve said to try to dispute any of it is “this consultant said in an interview that he thinks exclusives are bad”. No attempt at discerning causation or explaining it, no attempt at even refuting the arguments I present, just “you should trust this guy, who also happens to be selling a product”. If I wasn’t bored killing time at work I wouldn’t even bother responding because this isn’t really a conversation, you just keep going “nu uh”.
Not just me: You’ve spent this whole thread arguing with myself and everyone else who are pointing out the obvious and glaring holes in what he’s saying.
One of my favorites is this one. Xbox has failed to make a profit throughout the entire history of the company. They’ve spent the last few years shutting down studios and laying people off, which has led to a lot of industry speculation. Insiders have reported rumors that Spencer might get pushed to resign or even fired. There’s been speculation that Xbox might be considering exiting the hardware side of things entirely, in part because of their own marketing campaigns. I am not saying I believe that, but these are strong signs that Xbox is doing badly.
Nintendo, by contrast, just had the single best launch week 1 in the history of videogame consoles. Pretty much every way you look at the Switch 2 sales numbers they are breaking records. And this guy saying that Nintendo should copy what Xbox is doing. That is an extraordinary claim which requires extraordinary evidence for me to take seriously.
And while anecdotes are pretty useless, I agree with you that many publishers have trended towards multiplatform releases and I said that earlier. I’m not disputing that: I’m disputing his comments about 1st party publishers.