When I was down in Georgia after my mother's accident, I was given the terrible task of going to the car yard where my mother's totalled car lay waiting for the scrap heap.  On the way there I stopped by the lcoal post office to put a hold on my mother's mail.  The post office was a single clerk affair, the clerk was also the postmaster. She was a very nice older woman with young grandchildren.  We got to talking about what I do for Microsoft and about video games.  She explained that she would never buy a video game ordinarily but the wii seems fun because it is simple and looks like it gets you off the couch.  Then no later than an hour later, I went to the car yard where the owner was a man in his mid-thirties wearing cowboy boots and a baseball cap.  He was as it turns out a hard core gamer.  The guy that loves Halo for the story, the guy that buys the flightstick peripheral to go along with Ace Combat, and who loves to play Project Gotham Racing.  Neither one of them were rich, you would probably best describe them as loosely in the middle class by income and yet both of them were planning to spend a chunk of their money on video games this holiday.

 

The difference being that our favorite postmaster (let's call her Auntie Bee) was going to buy the wii which comes bundled with wiisports and maybe one more title like Mario Party while our favorite car yard owner (let's call him Cooter) was already 7 or 8 games deep into building out his Xbox 360 library with titles like Halo, Ace Combat, Mass Effect, PGR, Gears of War, Oblivion, and Orange Box.  Across their lifetime on these consoles, it is clear that Auntie Bee was only going to pony up to buy another couple of games at best on special occasions like Christmas and Birthdays.  Meanwhile Cooter is probably going to end up with 20 games on the shelf if not more buying maybe 4 or 5 games a year on average.  Neither of them rich as I say, but Cooter clearly represents a higher value video game consumer and the Xbox 360 has them in spades. 

 

This is where the media really falls off the bandwagon with regards to understanding our video game industry and its economics.  Listen up: It isn't just about installed base dummies! Its about how much money you make off of every customer.  It's all good for Nintendo as they can make a good deal of money off the box by itself - but because their customers are so low value there is little money for 3rd party publishers like EA or Ubisoft to make.  For the more hardcore platforms like Xbox 360 and PS3 who lose money selling their consoles and hope to make it all back selling video games - Auntie Bee is just not an attractive proposition - they need Cooter if they want to make money.  When it comes to hardcore gamers like Cooter, he only exists in limited supply and today you can only really find him in large numbers in one place - the Xbox 360.  The PS3 is still too expensive for Cooter to look at.  If I were a publisher, I wouldn't waste my money building an exclusive PS3 game because if you do - congratulations - you've just spent a ton of money with little prospect of making it back. 

Lately there is so much on the plate at work that everything is work in progress and nothing is getting finished at the rate I would like.  This week saw a lot of progress and I am hopeful that what we have of next week will see me catching up on the workload substaintially.  Working on 3 or 4 deals that may or may not happen.  A couple of pieces of "strategery" that may or may not have value.  One deal that must happen quickly.  And lots of P&L modeling work on a very cool prototype project in Japan that is near and dear to my heart.  I have at least 3 messages of "sorry there are no next steps" to deliver.  Possibly a due diligence or even two.  And somewhere in there I got committed into writing up a powerpoint slide for someone about something.  On the positive side, SceneIt? Lights Camera Action came out to very good reviews for the genre.  I finished the 2 deals that enabled this game literally while sitting on the floor this year at D.I.C.E. in Las Vegas.  This was not an easy project given the timeline, the brand new peripheral, and the media licensing issues involved.  A shout out to the wonderful team at MGS, to Xbox Hardware who really delivered fantastic controllers, to our partner Screenlife owner of the SceneIt? brand, and to WXP the developer.  Everyone worked hard to make the game, it wasn't easy, but it was important.  This marks the first time that MGS has put out an adult party game in the trivia genre.  It's getting a very warm reception from core and non-core customers alike and the sell-in to retail is just fantastic.  And may I just say, if you think that this SceneIt? is really great, you ain't Scene nothing yet. 

 

 

Ok it is late and before calling it a day, I felt I had to record the notable news of the day. And this one does not surprise me.  Congrats to our friends at TT. It's a very interesting acquisition.  DC comics / Looney Tunes and Traveller's Tales not to mention Lego and Guinness licenses.  Lego lego everywhere. 12 million units sold are definitely nothing to sneeze at.  Tom Stone, hope you are well.