Sony, Microsoft "Ramping Down" Game Production

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Sony, Microsoft "Ramping Down" Game Production

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In the wake of the decision to shut down noted RTS developer Ensemble Studios, Alex St. John has predicted that both Microsoft and Sony will close even more internal studios as they struggle to become profitable.

St. John, the CEO of developer/publisher WildTangent, told GamesIndustry he believed that Microsoft and Sony were entering a "recovery phase" after years of absorbing punishing losses in their competition to dominate the market, and that as a result, they would be much less willing to take on the risk and expense of in-house game development.

"You will clearly see Sony and Microsoft ramping down their investment in those platforms," he said. "What's interesting to note is that Microsoft [Game] Studios: the number of titles they're producing is in decline. So they're investing a lot less in the Xbox, and Sony is doing the same, because they're in a cost recovery phase."

"They've spent billions trying to be profitable, and the consoles have enough developers making games for them that they do not have to take the risk on investing in games for their own platform in order to drive the market for them," he added.

Microsoft's Shane Kim had earlier said the decision to shutter Ensemble was purely a financial one, and in a leaked email, Microsoft Game Studios head Phil Spencer said, "It became clear to us that closing the studio and redeploying those resources to other more scalable venture is the right thing for our business at this time."

While he may have a point, many people feel St. John's credibility as a prognosticator is somewhat suspect: Earlier in the year, he predicted that the current generation of consoles would also be the last. "I am going to predict to you that the PS3, the Wii and the Xbox are the last generation of consoles that you either see or that anybody regards as successful in the market," he told the Casual Connection conference in July, comments he later repeated in an interview with the Telegraph. Instead, he said that the future lies with laptop-style gaming that could offer a portable gaming experience on par with any console system.

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Wasn't the only time the Original Xbox profitable was when Halo 2 launched, an in house game?

I really don't understand the economics here. Sink billions into R&D to produce a horribly expensive to produce system that physically can't be sold at a profit. All on the understanding that it migh possibly make a profit at some time in the unspecified future.

Meanwhile, Nintendo essentially adds a couple of gimmicks to the Gamecube and cleans up. Massively profitable, massively marketable and dead easy to understand.

Microsoft and Sony need to have a word with the Umbrella corporation, they'd ike the Umbrella school of business.

fix-the-spade:

Meanwhile, Nintendo essentially adds a couple of gimmicks to the Gamecube and cleans up. Massively profitable, massively marketable and dead easy to understand.

Easy? Wiimote. Put into Wii rubber. Attach nunchuk. Plug in Wii Motion Plus.Get on Wii Balance board. Set up calibration bar.Set up Animal Crossing Mic on TV.

There is so many add ons, they've complicated the most simple thing.

PS2 also made massive profit with 16 buttons,2 sticks and fancy new specs.

shatnershaman:

fix-the-spade:

Meanwhile, Nintendo essentially adds a couple of gimmicks to the Gamecube and cleans up. Massively profitable, massively marketable and dead easy to understand.

Easy? Wiimote. Put into Wii rubber. Attach nunchuk. Plug in Wii Motion Plus.Get on Wii Balance board. Set up calibration bar.Set up Animal Crossing Mic on TV.

There is so many add ons, they've complicated the most simple thing.

PS2 also made massive profit with 16 buttons,2 sticks and fancy new specs.

How is putting on a rubber difficult?

Oh wait, I forgot this is a video/computer game forum :lulz:

Eggo:

How is putting on a rubber difficult?

Oh wait, I forgot this is a video/computer game forum :lulz:

...The point is its not hold the Wiimote and waggle it around. You have to set up so much to start playing.

shatnershaman:
PS2 also made massive profit with 16 buttons,2 sticks and fancy new specs.

But the PS2 could be manufactured at a profit and had no real competition for the first 18months of it's life, when it was manufactured at a slight loss. Although the numbers on Wiki suggest it in fact had no real competition throughout it's entire life (total sales of Xbox AND G.cube come to just over a third of total PS2s sold).

I see your point about the ad on complication, but. explain the way to control a Wii to an old lady, then try explaining how to work a 360 to the same old lady.

The software is the only source of positive revenue for a console in the first 6-8 years of its life, and the console producers get more of that revenue if they are the ones producing those revenue streams. It's basic consumer product marketing economics. Handles and blades, anyone? This is akin to saying that Schick is ramping down production of Mach XXII blades because they are in a cost recovery phase. Bullshit is what that is.

fix-the-spade:
But the PS2 could be manufactured at a profit and had no real competition for the first 18months of it's life

You are so wrong on more than one point in that sentence. Dreamcast, anyone?

Please read a wikipedia article before posting complete nonsense.

SaintWaldo, pass Go and collect 200 dollars. The rest of you, no.

SaintWaldo:
You are so wrong on more than one point in that sentence. Dreamcast, anyone? .

I'm a Yorkshireman, I'll talk sense when hell freezes over!

Also, DreamCast, like I said, no real competition.

The Dreamcast was never really 'competition' for the PS2 (http://en.wikipedia.org/wiki/Dreamcast#Competition). By the time of the Dreamcast, Sega was pretty much a 'has-been' company (too many systems, not enough support). People were willingly paying twice as much for a PS2 when it finally came out.

Dreamcast could have worked if Sega would have stopped creating and then dropping sytems.

Kind of sad about the whole Dreamcast thing. Dreamcast had a kickass library and sold like shit. Wii has a mediocre library and sells millions.

Oh, why can't the world be the way it should be.

Isn't it a little premature to say that gaming is going to become less profitable? Nintendo have been raking it in, and the general public have been known for their propensity in snapping up new editions of gadgets that are scarcely different from things they already own. Especially when the industry is only just starting to be taken seriously in the mainstream.

Eggo:
How is putting on a rubber difficult?

Oh wait, I forgot this is a video/computer game forum :lulz:

Am I the only one who caught this? Le sigh. Anyway...

Maybe someone can explain this to me...if a division of a company (in this case the game development divisions of sony/microsoft) are turning a profit, then they are financially sustaining themselves plus some extra dough. If a company nixes that department, they lose not only the profit, but also all of the money sustaining that division...which is being made by the division...so how can they relocate these funds?

Please mock my simplicity, I'm by no means a student of business.

If Sony does close down some of it's studios (I'm assuming they havn't yet) let's just pray it isn't the Ico team.

Why Ensemble? They're one of your best. Why not Gearbox or something?

Eldritch Warlord:
Why Ensemble? They're one of your best. Why not Gearbox or something?

Gearbox is making Halo 4. Thats why.

shatnershaman:

Eldritch Warlord:
Why Ensemble? They're one of your best. Why not Gearbox or something?

Gearbox is making Halo 4. Thats why.

No, G4 just made buzz by saying that when in reality the lead designer (or something) of Gearbox was hired by Microsoft to work as part of the Halo Franchise Team.

Eldritch Warlord:

shatnershaman:

Eldritch Warlord:
Why Ensemble? They're one of your best. Why not Gearbox or something?

Gearbox is making Halo 4. Thats why.

No, G4 just made buzz by saying that when in reality the lead designer (or something) of Gearbox was hired by Microsoft to work as part of the Halo Franchise Team.

Well I fell for it. *annoyed grunt*!

Jumplion:
If Sony does close down some of it's studios (I'm assuming they havn't yet) let's just pray it isn't the Ico team.

Or Naughty Dog. Or Zipper, Santa Monica, Incognito, Evolution, or SCE London.

Indigo_Dingo:

Jumplion:
If Sony does close down some of it's studios (I'm assuming they havn't yet) let's just pray it isn't the Ico team.

Or Naughty Dog. Or Zipper, Santa Monica, Incognito, Evolution, or SCE London.

Don't be greedy ;)

Joeshie:
Kind of sad about the whole Dreamcast thing. Dreamcast had a kickass library and sold like shit. Wii has a mediocre library and sells millions.

I think that someone is letting nostalgia get the better of him. Outside of Power Stone, Soul Calibur, and a few stragglers, I don't remember looking at anything on the Dreamcast and thinking that I had to have it.

I fail to so see why we should care, its not gonna happen.

Eldritch Warlord:

Indigo_Dingo:

Jumplion:
If Sony does close down some of it's studios (I'm assuming they havn't yet) let's just pray it isn't the Ico team.

Or Naughty Dog. Or Zipper, Santa Monica, Incognito, Evolution, or SCE London.

Don't be greedy ;)

If I were being greedy I'd also ask for Guerilla.

Or to put that article in forum-speak:

OMG CONSOLEZ SUXX0RZ!! PC ROOLZ WASD FTW!!!!!!

:P

Quick question: Who the fuck cares what the CEO of Wild Tangent thinks? They have like one good game, and it's not even that good. Who even asked them. What idiot decided to green light publishing an article about this?

Asking Wild tangent what it thinks about Sony and Microsoft is like asking a lemonade stand kid what he thinks about Starbucks and....whoever is left in the coffee industry...Dunkin Donuts coffee I guess.

Do you guys have a quota to meet or something on articles?

Maybe you could ask grade schooler to give a lecture on advanced electronics.

If you're hurting I can give my opinions on how to fix the economy.

This article sucks, thank you

Could you really not find a more recent game screenshot?

Sybban:
This article sucks, thank you

This article is also from 10 Sep 2008 11:32 am, don'tchyaknow?

More thread necromancy. -_-

meh, don't care

I was going through news articles and clicking on related articles like a I normally do and found this. Time does not make this news article suck any less. I hardly post so don't worry about it happening again.

fix-the-spade:
I really don't understand the economics here. Sink billions into R&D to produce a horribly expensive to produce system that physically can't be sold at a profit. All on the understanding that it migh possibly make a profit at some time in the unspecified future.

Meanwhile, Nintendo essentially adds a couple of gimmicks to the Gamecube and cleans up. Massively profitable, massively marketable and dead easy to understand.

Microsoft and Sony need to have a word with the Umbrella corporation, they'd like the Umbrella school of business.

"Coming this summer to XBox 360, A HORRIFYING MUTATING VIRUS (not a game)!"
"Coming this summer to PS3, AN ACTUAL REAL LIFE TRANSPORTATION TO SILENT HILL!"

I'm going to let you console players sort this out while I play Battlefield:Heroes on my PC.

I'm not concerned, plenty of good games coming out.

Pi_Fighter:
More thread necromancy. -_-

NO MORE NECROS!

C'mon people, why all the necroing of news threads? It doesn't make sense, it's bad forum behavior, and it also causes confusion amongst us who don't check the dates of newsposts, not to mention I doubt the mods take kindly to it.

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