Game Chemistry

It is kind of surprising that Harmonix, the video game developer responsible for creating the ‘Rock Band’ franchise, has not been able to sell enough games to remain profitable. After all, ‘Guitar Hero’ may have started the music simulation craze taking place in gaming right now, but several other companies have been able to cash in as well. What is shocking that the company was sold to Columbus Nova for just $50. If you have never heard of Columbus Nova before, don’t worry. They are an investment firm based out of New York City, and they never had anything to do with the video gaming industry before purchasing Harmonix.

Although you can’t get a better deal for a game development company, Columbus Nova also had to take on all of Harmonix’s bad debts. Viacom owned Harmonix, and by selling the failing video game software company to Columbus Nova, they were able to receive over $150 in tax subsidies. After a series of bad decisions, including the ill fated ‘Rock Band: The Beatles’ video game. It was a bold move, especially since most fans of these types of video games are more interested in playing power ballads than old time classics. ‘Rock Band: The Beatles’ did go on to sell quite well, but at nowhere near the number of units that Viacom thought it would. Columbus Nova is expected to keep both the staff and overall structure of Harmonix the same, but they make make some changes depending on how sell the Rock Band franchise is received by audiences in the future.

Part of the appeal of purchasing a video game is the fact that consumers can trade them in as soon as they tire of them and get a big discount on the hottest new release. GameStop has been offering consumers perks in addition to their video game trade-in program. Amazon UK is launching efforts to come up with a similar program, which will allow consumers to send in used video games in exchange for Amazon account credits. The move will put them in direct competition of GameStop and other video game retailers, but consumers might not be as receptive as Amazon thinks they will be.

As gamers have been walking into GameStop for years with their arms filled with used video games, they might not be fond of the idea of putting their games in the mail instead. Even if Amazon provides consumers with pre-paid postage, customers may have to go the extra mail to get their packages insured and tracked. While Amazon is the largest online retailer, they also have an annoying habit of losing packages that are en route. If a gamer that is trying out Amazon’s new program has one bad experience, he or she will likely return to GameStop and never look back. One thing that Amazon could do to entice consumers is to give them a larger credit, but that also has its drawbacks. Many of the items listed on Amazon also requite customers to pay shipping, and gamers are notoriously impatient when it comes to getting the goods.

Even though the video game industry is still raking in a cool $1 billion a month, a 4% decline in the month of October has caused retailers to make a push to increase their revenue by the year’s end. This time last year, the video game sector was gaining about 10% more in profits than they are today, which is still pretty good considering the state of the world economy. All around, the leisure and recreational markets have taken a heavy hit as consumers don’t have the same amount of discretionary funds available now that they did in the past. Broken down by category, gaming console sales have plummeted in the last year. The only console still holding strong is the Xbox, but sales of the Wii and PlayStation 3 have fallen by almost 30%. By contrast, sales of the Xbox have increased at almost the same exact rate that PlayStation 3 and Wii rates have decreased.

Gaming platform developers for all three of the major consoles have managed to squeeze out an increase of approximately %5 in the last 12 months. This makes a lot of sense as consumers are much more willing to purchase new games for the consoles that they already own than they would to purchase a different one. The sales of used consoles, games and accessories were not included in reports, so there is chance that retailers are still gaining good profits from trade-in and game exchange programs. Recent game releases such as ‘Call Of Duty:Black Ops’ almost certainly gave retailers a boost, so there is a good chance that they will close out 2010 with a better profit margin.

Certain Redbox kiosks in the city of Milwaukee, Wisconsin will serve as test runs to see how the addition of video games to the popular US Redbox machines will turn out. Redbox has decided to add Playstation 3, Nintendo Wii and Xbox 360 games to these kiosks as an experiment. According to analysts, there are many video games that are considered throwaway games, that is, games with short single player campaigns. Many times, consumers take these games back to retailers such as GameStop or it’s counterpart, EB Games, to trade back in, usually at a small fraction of the original price of the game which is usually right around sixty dollars. While these consumers are able to get in store credit, or even cash in some stores, they will still inevitably lose money.

This is where renting video games comes in. Reports show that most consumers welcome the chance to try out a video game for a few nights before buying it. This eliminates the problem of having to trade a game back in after the player has finished it, if it has a short campaign, or in other cases, if it just was not what the player was expecting. Redbox has announced that some of the first few titles that will be available in specific kiosks in the Milwaukee area include Halo: Reach for the 360, Dead Rising 2 for both the 360 and Playstation 3, and for sports fans, NBA 2011, also available for the Playstation 3 and Xbox 360. One of the Wii titles they also announced was New Carnival Games.

The video game, “Pirates of the Caribbean: Armada of the Damned”, has been stopped in the middle of production, by Disney. Experts are saying that due to the serious decline in video and computer game sales in the past six months, as well as poor projected sales on the video game itself, caused Disney to halt production after already spending millions on the development. The Vice President of Communication for Disney Interactive Studios confirmed this cancellation of the game that was scheduled to be released in 2011. Many people saw this game as the accompaniment to the fourth movie of Pirates of the Caribbean, which was scheduled to be out in the second quarter of the year.

With the sales industry wide in the video game world dropping 8 percent since last year, this cancellation comes as no surprise, according to experts. With this cancellation however, some 100 employees of Propaganda Games have been laid off by Disney. The remaining employees are finishing an accompaniment to the “Tron: Legacy” release in theaters, which is called “Tron: Evolution”. Reports have also stated that Disney is going to be moving away from games solely based on consoles and investing in online virtual worlds, which have become increasingly popular as of late. Many people are choosing the latter type of gaming instead of the former, with a few exceptions for traditional style games, such as the Halo franchise from Microsoft which sold over 3 million copies, making it one of the few shining stars in video game sales for the console systems.

Electronic Arts has definitely brought the quality level of the pro boxing games up quite a few notches with its Fight Night franchise popular on both the Sony Play Station and Microsoft Xbox gaming systems over a few generations, but things are really looking to heat up with their latest new title Fight Night Champion. EA Canada is developing this latest addition to the franchise and it is expected to be released for the Xbox 360 and Play Station 3 in 2011. Since Fight Night: Round 4 did not see good sales, the publishers have gone back to the drawing board to see what they could do in order to entice more players to give the title a shot. It turns out that what they came up with was a simple, 2 word phrase: more blood. This latest version of the game will feature far more graphic violence and true body horror than many other games of its type and this is bound to get the title a lot more attention in the game press where shock is a coveted factor.

Reviewers have already begun to report that for some of them it is a bit too much, but this is a relatively small portion of reviewers most of whom are hard core sports games fans more used to the tamer imagery of that genre. Champion is set to show the darker side of the sport of boxing and bring players into the drama of the ring and everything it takes to make a match happen.

A federal court in the nation of Australia has recently ruled to force retailers of electronics within the country to cease sales and distribution of a dongle known as the PS Jailbreak. The documents released in the press show that the injunction will stay in place until an upcoming hearing that will determine what is to be done about the mod chip in Australia. Experts say that this could have a ripple effect that reaches other countries, too. One retailer in the country, Quantronics, is a respondent in the documents from the court that Sony Computer Entertainment Europe and Sony Computer Entertainment Australia filed together. The retailer says that it does not have the mod chip in stock at present, but continues to list product details along with a $170 price tag. The dongle is intended for use with the Play Station 3 from Sony and was designed to allow users to use their USB port to put games they have borrowed onto the PS3 hard drive. Quantronics had been offering the dongle as a pre-sale item, but according to a statement on the retailer’s site, they are no longer importing, distributing, selling or dealing with the Jailbreak in any way.

Despite the pause in the selling of the product right now, retailers do intend to sell it if the injunction proves not to be permanent, but for now the court is forcing a pause. Oz Mod Chips and Mod Supplier are the other companies who offer the product in Australia and were named in the court case there.

Video games by mail is becoming big business as yet another company emerges to try and take on that market in the United States. New easing of regulations at the nations Postal Service are helping to stimulate more mail order business and the video games by mail model has worked out very well for Gamefly which as come out in a big way to deliver games by postal mail to video game fans across the US. With the DVD by mail business that Blockbuster Inc. already enjoys, it has been able to sidle up next to Netflix, Inc. as a major competitor, but by leveraging the power of its brick and mortar business, Blockbuster may be able to muscle in on Gamefly, industry insiders have told the press. The mail subscription platform will be called Total Access and since the $20 billion a year video game market is so competitive, Blockbuster will need to clearly define its offering for consumers, experts say. Blockbuster, which is based in Dallas, Texas, has formed a partnership with Comcast Corp. a major US provider of cable TV services and plans to offer its Total Access game packages at a $3 discount for Comcast customers.

Comcast believes that by partnering with Blockbuster they will be able to offer more entertainment choices that will appeal to families with children in the US and that they will be able to build their business by teaming up to be part of the $8.99 per month DVD service. If successful, this will give fans more choices when they consider renting video games.