Putting some perspective into a ‘Successful Game’.
Before any talk about games lets put things into perspective. As we all know any software requires a hardware to run. When this particular hardware is open to multiple developers and multiple users we basically are talking about a Platform (a topic which I’ll keep on talking, specifically towards theory of platform economics). These platforms don’t only give ground to aspects such as software computational performance regarding speed, visual renders or inputs; they open a social system where inter-actor feedback could be the difference between glory or defeat. The classical structural aspects of a platform have been a clear influence on its success, specially when they provide particular competitive advantages such as for example using Compact Discs for games on the original PlayStation. But the fundamental dynamic that thrives the impact of a platform is network effects (or how the adoption of the platform generates positive or negative effects to other related actors). In the console video game industry we see three basic actors: platform providers, game developers and customers. To make a platform system rise and succeed the most important thing is to attract customers and good developers for positive feedback loop: good developers come and supply the platform with quality products and so new customers hop in giving more incentives to other developers get into the platform. This process also works backwards with the entry of customers giving incentives to new developers which in turn make other customers to get interested. As you may suspect, the chicken-or-egg dilemma appears at its glory. The following post will delve into game sales and try to keep this notion of social and economic effects when we analyze them.
Source of all sales data analyzed here comes from VGChartz.
Having this in mind we may approach platform and game sales and take a look at their performance. First of all a glimpse into today’s total platform sales within the current generation should put attention towards Wii U, PS4 and Xbox One (I added 3DS as several games still appear in the top sales and clearly hints Nintendo’s control over handheld console market).
With an advantage of several years Nintendo 3DS is today the most widespread video game console with software on weekly top hits. Seconded by PlayStation 4 that positions itself as the most spread home console platform. As usual Microsoft’s Xbox One is trying to keep up and as you’ll see it is achieving its goal of market share expansion. Nintendo’s home console seems to be struggling in this fight of dominance but only in market reach.
Let’s get into last week’s sales. The high-end consoles are running the lead but with a huge gap among them. PlayStation 4 gets up to 17 games in the top hits as Xbox One only follows with 7. This gap could be taken as a sign of network effects, as Sony’s platform has more hardware units it is a bigger pool to fish for developers and that drives more releases for PS4. In addition to this comes more purchases at the high end as a well structured platform may provide space for “top-quality” developers and thus increasing the chance of game hits.
Considering top hits as a key parameter of platform control over the market we could clearly asses Sony’s success in this period of the current generation with a 56.7% market share. Xbox One is the contender with half it’s market share. PC games seem to be out of top hits in VGChartz data, it is difficult to address this platform as it considers piracy, digital distribution or MMO persistent games. For now lets keep an eye on the home console sector.
Minding the platform context we addressed at the beginning we should ask about the relative ‘hit’ of these top game sales according to their infrastructure. In other words what is the ratio between top chart games and the amount of platform units available in the market? For example, we say that Tom Clancy’s The Division for PS4 leads the charts on March 26th with almost 450.000 units in total. On the 7th place in the same week we have Pokken Tournament for Wii U with barely 150.000 units. Both are clearly good sales, but in context of the reach of their respective consoles (PS4 = 40 million, WiiU = 13 million) we could say that The Division behaves relatively similar to Pokken Tournament. The Division relative impact would be 1.125% (450.000/40.000.000) and Pokken Tournament relative impact is 1.153% (150.000/13.000.000). It looks that Nintendo is reaching as effectively as Sony within their own platform community. Better yet, Nintendo is doing so with their own IP’s. If we consider games and their platforms a new pie chart emerges, with the relative market share. Comparing with the former chart we can see that Microsoft and Nintendo are getting more from their platforms than PS4, but that is reasonable given that Sony has built such a massive platform.
Top Sales by Week
Looking at the weekly charts we may see two properties: sales distribution have cross sectional long tails and longitudinal long tails. In other words, weekly sales have clear long tails in a ‘winner-takes-all’ fashion. Huge sales for the top tier and small or unsatisfactory sales for most of the games in the market. This long tailed distribution is the graphic representation of the risk inherent to the video game market. A ‘longitudinal’ long tail appears among a sequence of weeks. Historically most home console games performance (different for persistent or digital games) considers its highlight on the first two weeks or even the first weekend. From here is usually downhill with an exponential/power-law distribution decay. Blue bars show the cross sectional distribution of March 26th week , orange bars are the sum of this longitudinal long tail up to this point. As you know games like Grand Theft Auto V or Call of Duty Black Ops 3 had a huge impact on release and its effect carries on showcasing on the top sales chart. Please mind that the following charts have double y-axis (orange bars being on millions of units).
If you fool around the chart (just click it, and apologies for not mastering Plot.ly-Wordpress relationships yet) you can explore where are some games of interest and other fun facts. I guess that overstating whats already said should be avoided so, lets just put some remarks while looking at these charts. First, 5 out of 20 games are showing an impact of older AAA games, that gives an important hint of how video games carry a ‘winner-takes-all’ dynamic. Another key aspect is our 2nd place, the relevance of Japan’s market as an isolated system is remarkable. Dragon Quest Monsters Joker for the 3DS didn’t have a release for the Americas and still generated a huge impact in a global scale. With the rise of a whole new gaming culture in China (check this post: Analyzing Global Game Interest) it is important to respect these sectors and maybe begin to look deeper into its particular features. Japan led the home console development during the late 80’s and we basically fell in love with undercover Japanese culture. Now we see that Japan has one of the most fruitful mobile gaming industries (and watch out as some of them are again looking towards global impact: maybe I should write a post about this new gaming Rise from the East).
Again a game from Japan hits the top 3 (Yokai Sangokushi). As you’ll see below this game has almost no impact in Twitter, it is obvious that a game without release may have little impact on our communities but when we are talking about such titles we put on evidence how idiosyncratic the digital entertainment world may be. An interesting thing on this week’s sale distribution is how the tail flattens and gives more relevance to the top 3. Yokai is explained by the huge demand of the Japanese market, The Division follows it’s momentum from last week and the other new contender MLB 16 comes to put attention to another huge aspect of our industry: the role of sport games (mental note for another post, check).
Mind your y-axis! Only a bit more than 250.000 units mark the lead of April 9th’s sales distribution. With a more skewed long tailed we see how the new Quantum Break took most of our gamer’s weekly wallet. An overall poor performance comes evident as out ceiling dropped to the 250k and old AAA games gained ranks in our Top 20 (CoD BO3 rised to top 3).
A Ranking Story
This post is going for a bit too long so lets cut to some other interesting points. It is clear that sales in units are highly volatile, keeping track of unit sales should always be hand in hand with competition performance in other hit games, amount of total games in the market, relative market share of the platform and of course other substitute products or platforms such as mobile gaming. To simplify our review of top home console games lets rank them by order. This should provide a good insight of the variability but keeping it simple to understand this sector’s software composition. The clear downside of such a figure is that we are not considering the overall performance of the week (as wee saw earlier with our last week). Here you have a rank order of game hits to show how unstable is this relational process.
Narrowed to the Top 10 we see three different patterns here: short, medium and long hit wonders. Short ones are usually represented by a niche product that is well informed and goes out the first week to get it’s prize, these games usually don’t perform as well on the subsequent weeks leaving the top ranks. Medium range are basically normal AAA games. Highly marketed games that appeal to a broad audience within the platform. Games such as The Division or Quantum Break move around this patterns. The most rare one are the ‘must have’s of the industry, usually games that drive platform purchase in the first place. In this case we see how two of them (that are both actually bundled to PS4 consoles at retail) appear in all three weeks, showing an increase on the ranks on the third week where total sales were relatively lower.
Keeping an eye on the community
Last thing. I guess that looking only at sales data is a bit narrowed so I’m taking the liberty to check communities (on the future Twitch, Reddit, etc.) and get a proxy of their attitude towards these top games! So I went to last weeks tweets and did a sentiment analysis of these games. Here are some results! Y-axis marks polarity being 1 = Positive Attitude towards the game and -1 = Negative Attitude towards the game. Enjoy!
Yokai Sangokushi had very few tweets in English, that makes it highly variable and thus the polarity values presented are not reliable. On the other hand a swift negative move of Quantum Break’s polarity may indicate some discomfort of the new users (something relatively common on new releases and its closest user community). Make the conclusion you prefer. I’ll just put some emphasis on FIFA 16 and GTA V, two games/brands that have clearly positioned on the top of mind in the gaming industry seem to be more robust and keep a consolidated positive perspective from the community.
Hopefully I’ll be posting more often. I think a more detailed view about the relevance of sales data and community impact should be put into some perspective.
Here you have the most popular tweets about your hit games! Good game!
MLB The Show 16.
— SB Nation (@SBNation) April 19, 2016
Which choice do you pick? Become the hero or the bad guy in Quantum Break! https://t.co/ORxfOh19Pz
— jacksepticeye (@Jack_Septic_Eye) April 14, 2016
— Watch of Yokai (@watchofyoukai) April 14, 2016
Far Cry Primal
— Ubisoft (@Ubisoft) April 14, 2016
Call of Duty: Black Ops 3
— KEEM @ PAX (@KEEMSTAR) April 17, 2016