News

Video game shelf life extending through downloadable games and content

Posted by: Randy at 11/15/2007 12:55 AM
A comprehensive study by EEDAR (Electronic Entertainment Design and Research) indicates that the marriage of retail sales and downloadable content creates a long-tail of revenue for game development houses, offsetting rising development costs, and luring in further funds during the dry seasons between major releases.  The study can be purchased at EEDAR's site, but you can also check out these major points...


RESEARCH FROM EEDAR SHOWS PUBLISHERS ARE CREATING LONG-TAIL REVENUE,

EXTENDING SHELF LIFE OF GAMES THROUGH CONSOLE STOREFRONTS

WITH DOWNLOADABLE GAMES AND DOWNLOADABLE CONTENT

 

Study Shows Strong Correlation Between Higher Sales and Downloadable Content; Seventh Generation Console Games with Downloadable Content Sell 114% More On Average

 

Nintendo Wii Leads in Downloadable Game Offering;

Xbox 360 Leads in Original Downloadable Games and Downloadable Content Offering Overall

 

 

San Diego, Calif. – Nov. 14, 2007 – Research firm Electronic Entertainment Design and Research (EEDAR) has just released a comprehensive study proving publishers can create significant incremental and long-tail revenue streams beyond their retail sales through console storefronts.  The research shows that publishers have the potential to nearly double their income on any given title through revenue generated by both purchasable and sponsored downloadable content.  Xbox 360 games offering downloadable content sell more by 129%; PlayStation 3 games sell 16% more.  According to the paper, console storefronts represent a major opportunity to offset growing development costs and stabilize revenue momentum between major releases.

 

“Our study shows that the marketplace is rapidly evolving into utilizing revenue options beyond retail game sales,” Geoffrey Zatkin, COO, EEDAR, said.  “In an environment with crippling production costs, publishers have new ways to dramatically impact their financial gain, while making gamers happy, if they understand how to utilize the new generation of console storefronts.  At EEDAR, we are studying ways game makers can be more successful by offering better products that yield more revenue.”

 

The study evaluated each Console’s Storefront in terms of their online offerings.  Nintendo's Wii leads in the quantity of downloadable games, Xbox 360 offers the highest number of original downloadable games and PlayStation 3 trails behind in both categories.  The PlayStation 3 charges the most for its downloadable content, while Xbox 360 has the largest roster of downloadable content to monetize. 

 

EEDAR found that PlayStation 3 has 19.2 Gb of downloadable game titles and game content, while Xbox 360 has 106.5 Gb, which makes a case for why Microsoft is offering the Xbox 360 Elite with 120Gb of hard drive space.  The average size per piece of PlayStation 3 downloadable content is almost double that of an Xbox 360 piece, which shows that PS3 users may run into trouble with storage space.   

 

Despite having more downloadable games, the Wii makes no use of other online functionality while 45% of PlayStation 3 downloadable games and 84% of Xbox 360 downloadable games utilize online functionality such as leaderboards, online multiplayer, voice chat, stat tracking, etc. 

 

So far developers have not rushed to embrace Console Storefronts as a dedicated outlet.  Only 12% of all downloadable games are original titles, the rest being re-releases from earlier platforms.  Microsoft is dominating in this area, with 77% of these original titles available exclusively on the Xbox 360.

 

Highlight facts from the study include:

 

Downloadable Games

l  187 downloadable game titles are available on Console Storefronts; Wii has released 51% of these:

l  PS3 Prices range from $4.99 to $19.99, Median of $5.99, Average $6.17

l  Wii range from $1.00 - $10.00, Median of $6.00, Average $6.69

l  Xbox 360 range from $5 - $15, Median of $10, Average $7.53

l  100% of downloadable Wii games are re-releases from previous consoles such as the original Nintendo Entertainment System or Nintendo 64

l  Wii has far exceeded both PS3 and Xbox 360 in providing downloadable games

l  The Wii released 95 titles in its first 7 months

l  The PlayStation 3 released 29 Titles in its first 7 months

l  The Xbox 360 released 21 Titles in its first 7 months

l  39% of downloadable games are from the Arcade genre, followed by 21% from the Action genre

l  94% of downloadable Arcade genre games are re-releases from previous systems

 

Downloadable Game Content (Not Including Movies/Music/TV Shows)

l  Seventh Generation games (PS3, Wii, Xbox 360) with downloadable demos and trailers have a strong correlation with higher sales

         On Average, Seventh Generation retail games with both a downloadable demo and trailer generate 69% more revenue than games without either

         On Average, Seventh Generation retail games with a downloadable demo generate 62% more revenue than games without either a demo or a trailer

         On Average, Seventh Generation retail games with a downloadable trailer generate 72% more revenue than games without either a demo or a trailer

l  For the new generation of consoles, 94% of available downloadable content is on the Xbox 360; 6% on the available content is on the PlayStation 3.  The Wii does not offer downloadable content

l  The total value of all Xbox 360 downloadable content is worth more than 40 times as much as the total value of all PlayStation 3 downloadable content

l  80% of the downloadable content on the PlayStation 3 is free; only 29% is free on Xbox 360

l  Average price of downloadable content is between $1.69 (Xbox 360) and $1.97 (PS3)

 

EEDAR's study also looks closely at how individual publishers are monetizing content.  The study can be purchased through www.eedar.com.

 

About Study Methodology

Electronic Entertainment Design and Research (EEDAR) analyzed next generation downloadable games and downloadable content for game titles on the Sony PlayStation 3, Nintendo Wii, and Microsoft Xbox 360 to bring you the most accurate picture of the next generation game market.  EEDAR researchers examined over 180 downloadable games available through these new marketplaces.  Each downloadable game is categorized by such features as cost (Wii points, Microsoft points, and local currency), file size, genre, ESRB ratings, Metacritic rating, platform of origin, online functionality and multiplayer capability. 

 

Over 2,100 pieces of downloadable content for the Sony PlayStation 3, Nintendo Wii and Microsoft Xbox 360 were analyzed during this study to show the most accurate picture of the next generation game market to date.  Every piece of downloadable content has been categorized in the EEDAR classification system, consisting of 10 categories and 52 subcategories (including themes, music, new functionality, and cheats/unlock files) and then analyzed by such features as publisher, purchase price, genre, ESRB, Metacritic score and game title revenue. 

 

Console Storefronts 2007 enables publishers and development studios to maximize the revenue of their game titles through the intelligent addition of downloadable content.

 

Interested parties can purchase the report at www.eedar.com

 

About EEDAR

Headquartered in San Diego, Calif., EEDAR is a research firm founded by interactive entertainment veterans in 2007.  The company's mission is to serve the contemporary needs of publishers and developers in understanding and navigating the electronic entertainment and games market.  For more information on EEDAR, please visit www.eedar.com.