Incoherent Rambling?

I’m really feeling kinda melancholy today. I’ve been reporting on various bits related to a variety of gaming companies, and reading but not reporting quite a number of others. I’ve taken those thoughts to reddit as well, where the common consensus is that corporations are evil and Activision Blizzard is circling the drain.

The main point I always find myself going back to is that “it’s not just Activision Blizzard.” It seems like every couple of days someone else is reporting weak performance and planning layoffs. I realize it’s that time of year, end of quarter, end of fiscal year for many, and that sort thing is normal.

What does in mean, though, for the gaming industry as a whole to be a little weak? I’m trying to figure out how to start, and where to look. Are sales down, or are expectations high? Is it both? Why? Of course, many of these questions are massive, much bigger than myself, but that doesn’t mean I can’t form some manner of plan on how to dig into it.

I’m not feeling particularly motivated to do it at the moment, though, or much else for that matter. The bright side being that it’ll pass soon enough and I’ll be back at it, among other things.

I’ve been rather impatiently waiting for my outstanding set of transcripts to arrive as well. I’m a bit ahead of myself though, as I checked my confirmation email and they were only sent a week ago today. It’s literally coming from the opposite corner of the country, so I think it’s reasonable to assume it’s only just now arriving. I’ll get concerned if it isn’t showing up next week.

I’ll also have to head back to the doctor’s office and get some more shots. There’s apparently no record of me having gotten a second MMR vaccine and they have no intention of letting me attend without one. The bright side of that is that it only costs $10 for me to see my primary care provider, and since I discussed all this with him last week, they may just arrange the shots without seeing him again.

Also, if I’ve missed more words and/or errors than usual, I apologize. I’m dropping words and letters all over the place it seems.

Okay, something concrete to wrap up with. The list of companies I’m thinking of looking into at the moment, in no particular order.

  • EA
  • Activision Blizzard
  • Ubisoft
  • Take-Two
  • Square Enix
  • Capcom
  • Nintendo
  • Valve
  • GOG
  • Epic Games

I’ve intentionally left off most of the various MMO developers. I may add them, I may do them separately, I don’t know yet. Some of these companies, like Valve, are private corporations about which I may not be able to get really solid numbers, so I might end up dropping those.

Let me know if I missed anyone large. That list was just most of the large parent corps I could come up with off the top of my head, and many of the company names I’m actually familiar with are buried in their subsidiaries somewhere.

I’m not quite sure what information I want to pull, or even exactly what my hypothesis would be. This is fairly dangerous territory. If you go digging through data looking for any old correlation you’re bound to find one eventually. A correlation doesn’t mean there’s anything to see, though.

people-who-died-by-falling-out-of-their-bed_lawyers-in-georgia
Chart and data courtesy of http://www.tylervigen.com/spurious-correlations

Fun website, by the way. Not the best interface but it’s fun to poke around and find absurd correlations that probably don’t mean anything. Data is a bit dated now, but it still serves it’s purpose.

Y’all take care. Please don’t die, falling out of bed or otherwise.

9 thoughts on “Incoherent Rambling?

  1. Think back if you will when Dodge developed the mini van. Omg, no one will buy a Caravan. Who came up with that name. Is it a car, a van? Oh I get it, a Car-a-van. Clever. But they sold, and sold a lot. So then other automakers started to make their own with different features. Soon the market was flooded and profit margins got tighter, and eventually many just went on to make the next hot idea, the SUV, then the Crossover, Luxury Pickups.

    In any industry it is not so much coming up with the next great idea that everyone want to copy to get their own slice of the pie. It’s a matter of digging in for the long haul and outlasting the competition. Coming out with some new ideas here and there to keep it fresh, but holding off until all the competitors have burned through all of their resources. Once they have and you are back to only competing against a few big houses, you drop something revolutionary, and game changing, and hire back all of those let go, at a discounted salary of course.

    Liked by 1 person

    1. True, though this doesn’t always seem to hold true for everyone. One case I’m loosely following is that of General Electric. While still large, it’s a shadow of it’s former glory.

      They sold Appliances, and I believe Lighting at some point, not because it was unprofitable, but because it wasn’t considered a growth industry. Slowly but surely it seems like they’re selling themselves off, one tentacle at a time, including a recent offer to buy their biopharm and/or biomed branch for $20B-ish? They’ve gone from a key economic indicator to one that seems almost irrelevant for most people.

      That said, I quit following them as closely when they sold appliances and lighting. It seemed like a betrayal, to me. Maybe I’m crazy, and it was a sound decision, but it didn’t feel that way then and it doesn’t look that way now.

      Liked by 1 person

      1. Well, to be fair America Online was once huge in the market. I think they still are fairly huge, but now they are operating more behind the scenes.

        Liked by 1 person

      2. Makes you think, I recall people saying it was the end of AOL, then Facebook, Twitter, and the like came along. But they just changed their operations to be more media. Ironically I just looked, I believe they still have 2.2 million dial up subscribers.

        Like

  2. I kinda feel like what’s happening is that we’re reaching some kind of attention peak due to a glut of games. If everyone is going games as a service, it stands to reason that players can only be invested into ~1-3 of them at any one time. So there’s both a dilution/division of the market into smaller silos, and these silos shrink over time because a certain number of players are going to play games sequentially and drop one for another as they use up the content and succumb to the hype of the next big thing.

    Yet some will also always be left in the old thing because they like it more than the new thing, and both now have less players.

    If revenue ends up tied to gaining increasing amounts of players, this ends up being a lost battle over time.

    Dunno, no evidence for it, just a hunch.

    Liked by 1 person

  3. Hope you’re able to feel a little less down soon!

    I do think you might be right on this time of year, where a lot of the financial reporting / shareholder reports come due, or soon to be due with significant EBITDA gaps to explain or close, that we see a lot of this reactionary behaviour in terms of lay-offs and the like.

    While I’ve not done this analysis either, I would suspect that if we were to simply look at the combined revenues of the gaming industry that they would still be on the rise. Margin I’d not be surprised though to see a drop through increased operating / development costs, especially with how these companies have been reacting.

    That wandered a bit – sorry, the main point I was trying to reinforce was that the recent glut of lay-offs due to this time of year, like you highlighted, is likely feeding into the ‘Availability Bias’ phenomena.

    This particular bias is most commonly linked things like Lotteries, where the subject evaluating the likelihood of a particular outcome is way off because the information readily available (be that due to recency, or general coverage) is unbalanced.

    For example, you often see the big winners on TV, in newspapers, etc etc. If they were to give even a few seconds air time to every single loser of such lotteries as well? Then a) it would take *years* and b) people would have much less of an impact on availability bias, as the true ratios would be more readily visible.

    There is an excellent TED talk from some number of years ago on this out there. But I’m rambling, sorry. Point is, that I think if we fast forward even a few months, past EoY reports and reactions, that we won’t feel the same way that we do now.

    Liked by 1 person

    1. Thanks!

      I’m aware of the availability bias and try to keep that kind of thing in mind when I’m looking at things like this.

      As I’ve said here and elsewhere, we already know why Activision is scaling back. The have a lot less expected income this year and they would also like to shift more of those funds into development talent instead of non-development staff. I just gotta sit down and read through the others. I’ve been lumping all these events together when they’re probably all independent events happening for different reasons.

      Liked by 1 person

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