There's a great discussion on one of my favorite websites, Quarter To Three about why PC sales are in decline which I wrote about here.

Brett Todd and I are taking different approaches. He makes a good argument that basically boils down to this: It's so easy to download games illegally that increasing numbers of people are doing so and that is now showing a real impact on the bottom line.

Here's our discussion.

Brett writes:

Brad, this assumes that everyone shares your taste. Personally, I think there have been a lot of great PC games released this year already, with some blockbusters still to come. We've had UT2004, Thief III, Far Cry, Painkiller, City of Heroes, and Silent Storm. I've found this year to be better than 2003 overall. But I do admit that the year so far has lacked a big splash title to get people excited about PC gaming. That's why I'm not too worried about the numbers so far. After Doom III and Half-Life 2 hit, PC gamers will head to the stores and numbers overall will go up as these two games get people buying more.

Most of the games I mentioned as mega-games aren't ones that I personally get into. I'm talking purely in terms of gross revenue.  If we're talking about overall sales, then it's all about the numbers.  If 2003 had "Titanic" and "Phantom Menace" (for instance) and 2004 didn't have Spiderman II or Harry Pottery released yet, we might have people discussing why movies have declined too.

I like UT and think City of Heroes is a cool game and so forth. But they're not the mega sellers (well UT2004 probably sells well). Maybe when they get a couple of sequels under their belts. (Though UT 2004 is obviously a sequel but it's only one game! It has a heavy load! <g>).
 

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Also, do you really think that PC gamers would be turned off the entire format because of issues like the one you mentioned with MOO3? Personally, I think MOO3 was simply a terrible game and not at all an example of what's going on industry-wide. But even if it were some hallmark of modern crap design, it couldn't push PC gamers to consoles because the game styles are dramatically different. You can't get anything like MOO3 or GalCiv on a console system. Why would someone frustrated with MOO3 turn to the PS2? This makes as much sense as someone frustrated with the cost of car repairs turning to a skateboard for the morning commute.

I was just using MOO3 to illustrate the point. It doesn't take too many bad experiences to turn someone off if the competition (consoles in this case) don't have those same problems to the same degree.

Let's use a different example: Knights of the Old Republic. That was a great game. Right?

And yet when it shipped, it had serious problems with ATI Radeon cards. Whereas if you both it for the XBox, no problem of course. So quite a few people who played it had to wait for a patch. This wasn't some obscure thing either, it affected a lot of people (myself included).
 

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I think that if PC gamers are getting turned off by substandard design and all the me-too stuff, they're more likely to leave gaming altogether. Which is happening to an extent. But I think a lot of these disaffected people are still gaming, only they've now decided that the games aren't worth paying for. Combine that with the number of people who take advantage of sites like Suprnova just because they can, and you have a serious piracy problem with PC gaming.

I think there's always been a piracy issue but I don't think it's anywhere near enough to cause the kinds of losses we're seeing.

Let me use the Object Desktop example - we sells millions of dollars of this stuff on-line. If anything is vulnerable to piracy it's that -- it's small in file size and it's in that area that people could rationalize it as "something that should be free with the OS!!!" Yet we still sells tens of thousans of copies of it per year.

Piracy only matters when it is costing sales. And the what we don't know is whether that is happening to a significant degree. I am asserting that while piracy may be high, it is not costing significant actual sales.

That's one of the oldest arguments in the books of course.

But now that PC revenue is actually declining, some are asserting that it's piracy doing it. I just don't buy that. There are so many other reasons that I think are much bigger which I and others have already described.

 

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I really don't understand what we're arguing about. I'm not saying that piracy is the only reason why PC game sales are declining, but it seems awfully obvious that it's a major factor.

Hence our debate. I don't think it's obvious that it's a major factor. I don't think it's a significant cause of overall sales declining.

I see piracy has being a "leech" factor on PC game sales. I.e. X% of sales are lost to it. And I don't see X% having grown significantly in the past year or two.

Instead I believe:

a) Mega titles havne't been released this year.

More and more PC gaming time is spent playing MMORPGs which is taking away from # of games purchased.

c) The PC gamer demographic has gotten somewhat older and lacks the patience to mess around with obnoxious copy protection, buggy games, unrealistic hardware requirements, and incompatibilities. Alienated, these potential buyers become much more picky.

I would assert that fewer PC games are pirated OR purchased right now.

I'll even provide an example: Supernova's Alexa ranking is stale or declining. I suspect eventhe warez people are being alienated too!
 

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It has never been easier to download a PC game. That alone should indicate that piracy is up, because if you give people a chance to steal anonymously and without consequences, they'll take it nine times out of ten.

I'm not so sure about that. But let's say for the sake of argument that you're right.

How would you solve it?

Here's what I would do:

1) Make it even easier to purchase/download games.

2) Provide additional updates to the software after release that add features based on player feedback that can only be obtained first/early by verified customers.

3) Make sure the games work right out of the box/download/whatever. Make updates available of course but make sure they're not required just to get the game to work right.

4) Price it competitively so that the person sees the value in it.

That doesn't seem like it would be that hard.   

Am I the only Ultimate Spider-Man addict around here? I've been collecting them for the past couple of years.

They start the Spider-Man mythos over at the start and really modernize it with Peter Parker a 15 year old kid.

If you have any interest in Spider-Man or comic books, I really recommend these. They're well written and the artwork is terrific.

Vote by Income All Gore Bush Buchanan Nader Under $15,000 7 % 57 % 37 % 1 % 4 % $15-30,000 16 % 54 % 41 % 1 % 3 % $30-50,000 24 % 49 % 48 % 0 % 2 % $50-75,000 25 % 46 % 51 % 0 % 2 % $75-100,000 13 % 45 % 52 % 0 % 2 % Over $100,000 15 % 43 % 54 % 0 % 2 %

Funny thing about numbers and what they mean.

Take this exit poll from CNN from the 2000 election. Overall, the voters are about even.

Most people who make less than $30,000 a year do not pay any federal income tax.  You may pay some at the time but you get a tax refund at the end of the year.  As someone who supports progressive taxes, this doesn't really bother me -- though I do think everyone should have to pay a certain flat fee so that they feel the pinch of what supporting expensive and wasteful federal programs means.

If you take out those two groups, you have 23% of the voters (at least) who pay no or virtually no federal income taxes.

So if you break it out like that you end up with:

I've been getting a lot of email and posts from game developers who are wondering what our overall strategy is with getting new games on TotalGaming.net. Let me take a quick stab at that in plainer terms than any spindoctored marketing document could:

TotalGaming.net is a gaming network for obtaining games electronically and downloading them right away. What makes it different is that it also includes retail games as well as indie titles and that there is no sort of DRM type scheme or "renting" involved. You're buying games.

From there, you can purchase games either individually OR purchase a TotalGaming.net subscription which contains most of the games available in the whole network.

Regarding royalties: The developer's game is made available as a seperate purchase. What % of the sale the developer gets is based on a number of factors but one of which is whether the game is also part of TotalGaming.net's subscription as well.  Their royalty of the TotalGaming.net subscription also depends from game to game.

A developer can opt out of having their game available as part of the subscription but their stand-alone royalty would be smaller since they are, to a degree, riding on the popularity of the subscription to get users to notice their games on the site.

The challenge for us is both repeat and avoid what happened with Object Desktop.

Object Desktop sells a LOT of copies each year. Object Desktop has sold more copies in the time GalCiv has been out than GalCiv has. And its sales INCREASE over time. So in that sense, we want to repeat that experience in being able to have a suite of software so compelling that it reaches critical mass and people just buy the whole thing even though there's only X programs they'll end up using.

But originally, Stardock intended for Object Desktop components to be developed mostly by third parties (like we did on OS/2 with "OS/2 Essentials"). But developers would focus too much on the per unit royalty rather than on the big picture. Is it better to make $20 per copy but only sell 500 per year? Or is it better to make $1 per copy but sell 100,000 copies per year? Year after year after year? So ultimately we ended up making most of the Object Desktop components with our own development team. Which worked out for us but it took longer for us to reach critical mass.

With TotalGaming.net, IF we can just get enough games on there that it reaches critical mass, then you get to that "no brainer" level of value that people just plunk down $89.

I've talked to a lot of indie developers over the years and the typical indie develoepr game sells far fewer than 5,000 per year. In fact, the majority sell less than 1,000 units per year. So if their $40 game sells 1,000 units, that's $40,000. On the other hand, if we can combine our strengths (and stardock is willing to eat it quite a bit on this to make it happen) we can have a gaming network that sells 20,000 copies per year, then 40,000 then 60,000 until we reach whatever the maximum sales level that can be attained. So then the developer making $1 or $2 per unit is making quite a decent amount of money just on the subscription.

Throw in another 500 to 2000 units sold stand alone where they get a good chunk of it and they have a pretty sustainable base.

Oh you have to see this. Thank me later.

iD did some DOOM 3 benchmarks with the latest generation video cards.  Some really interesting results came in.

Atom Films proudly presents a hilarious satire of Bush and Kerry in a duel.  A duel of songs and dancing!

Must see: http://www.jibjab.com/

IBM, never shy about blowing an opportunity to take over the market, was working on an iPod type product with the company that later went on to supply the hardware to Apple long before Apple showed up.

Among the interesting nuggets is the fact that PortalPlayer was working with a number of companies, including IBM, before concentrating its efforts on Apple. According to Knauss, IBM's plan was to create a small player built around its Microdrive (IBM later sold its drive business, including the Microdrive to Hitachi, which now sells it to Apple for use in the iPod Mini.) IBM also planned to use Bluetooth headphones--something that a few folks here have been wanting for some time.

I always wondered where the IBM executives who were in charge of OS/2 went to. Now I guess we know...

Arstechnica has an interesting guide into the new bus architecture starting to show upon new machines called PCI Express.  If you're a hardware geek, it's worth checking out. 

Xplorer2 is a new file manager designed to act as an upgrade to the standard Windows explorer file manager.