Holiday game sales are no longer “make or break”

2 min read
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N64Kid

You’ve probably noticed over the years that the last quarter of the year is stuffed with big game releases. Traditional wisdom suggests it’s so that publishers can benefit from holiday sales, with their games showing up under trees, ready to be ripped open like a brand new Nintendo 64 on Christmas morning.

For years, it’s been about holiday sales – which is why we’ve had games like Titanfall 2, Dishonored 2, Call of Duty, Battlefield 1, Watch Dogs 2, The Last Guardian and about a million other big blockbuster games launch within the past few weeks. It’s been an exhausting time, and a an especially rough time on gamers’ wallets.

But it is changing – and will change even more. You’ll probably see games being a little more spread out, and then supported for longer, giving them longer tails. Why? Because publishers can keep making money off of games that are already out. Publishers are making a lot more money these days from “add-on content” (Read: DLC).

So suggests DFC Intelligence’s David Cole.

“As for recurring revenue, in the console market close to 40% is likely to be from online revenue streams in 2016 with the biggest one being add-on content that releases after a game’s initial launch. Even a company like Take-Two Interactive is reporting that nearly 40% of revenue is now from ‘recurrent consumer spending.’ Activision Blizzard of course has the Blizzard and King division that is all about recurrent spending products,” Cole says.

While the year-end rush is still important to sales, day one sales aren’t as important a measure of profitability.

“The Q4 holiday rush is still important; it is just not make or break for most of these companies. The downside for a Call of Duty or Titanfall 2 is fewer initial sales mean less recurrent revenue but we think it is still possible to add consumers after a product launches. A slowdown in CoD or other products simply means Activision needs to work harder promoting the product after the initial blast.”

This aligns with Ubisoft’s recent statements about games having longer tails through increased post-release support. It’s not as important to sell many copies on day one, or through pre-orders. Instead, it’s more important to foster a focused, engaged community that’s willing to keep paying.

“The Crew, The Division and Rainbow Six Siege each have more than 10 million registered players, demonstrating that we are effectively executing our business development plan and moving towards an ever-more recurring model,” said Ubiboss Yves Guillemot. “All of our actions and initiatives are aimed at achieving this objective. We are creating powerful franchises that offer long-term visibility. Our multi-studios organization enables us to have regular games releases. And the Live experiences for our consoles and PC games, including our investments in eSports, encourage long-term player engagement.”

Last Updated: December 7, 2016

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Geoffrey Tim

Editor. I'm old, grumpy and more than just a little cynical. One day, I found myself in possession of a NES, and a copy of Super Mario Bros 3. It was that game that made me realise that games were more than just toys to idly while away time - they were capable of being masterpieces. I'm here now, looking for more of those masterpieces.

  • Alien Emperor Trevor

    The times, and the markets, they are a changin’.

    • Ir0nseraph

      I think I like this change, not the Paid for DLC but the idea that I get more bang for my buck.

    • Captain JJ

      Games also have quite a large adult following these days, I wonder if that doesn’t also greatly affect it. Since we earn our own money and buy games if and when we can/please. Different to a kid getting a game for Christmas. Just speculating.

  • “This aligns with Ubisoft’s recent statements about games having longer tails through increased post-release support. It’s not as important to sell many copies on day one, or through pre-orders. Instead, it’s more important to foster a focused, engaged community that’s willing to keep paying.”

    I had to read that again just to be sure…xD
    http://i1077.photobucket.com/albums/w473/laura631/Hysterical-Laughing-Gif-13_zpsrlcfeopw.gif

    • Captain JJ

      The best part about The Crew…

      > connection to server has been lost connection to server has been lost connection to server has been lost connection to server has been lost connection to server has been lost <

      it

      • “foster a focused, engaged community”

        Where the fluff where you Ubi when the Dark Zone was running rampant with hackers and when it’s not hackers it’s over geared exploiters…oh yea pumping out new DLC.

    • Admiral Chief Argonian

      Speaking of uNOplay, remember to log in today to claim your FREE copy of AC3

    • Yeah, like The Division, and Rainbow Six siege. You know, those games that still have 10M people playing.

      • But they lost 60% of the player base after the first month (only checked steam logs for reference though).

        After the recent DLC release they are up to 24 000 peak players per 7 days. And I am betting most of them are just there cause they bought the season pass edition when the game was hyped before release.

        • BakedBagel

          Season pass was on sale for like R200 something Xd

      • Captain JJ

        With Siege I can understand. Kids need something to do with their time after they come home from school 😛
        Seriously though. The Crew has quite an active community itself, considering what it is. But the “MMO” aspect of it was clearly just an excuse to use always online as the amount of people per server is so few and no one interacts with each other. I wish it had an offline mode, because at this rate when the servers shut down the game is dead and can never be played again.

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