Philippe Paquet Tech blogging from Los Angeles

7Oct/10Off

The great disconnect

I have been looking at a very uncanny phenomenon. On one side, the number of personal computers has been increasing sharply (see 1, 2 and 3) and, on the other side, the revenues from PC games, as a percentage from overall games sales, have been steadily falling (see 4).

Some would blame the recent economic troubles but I don’t believe that is the case for two reasons: 1) that trend started before 2008 and, 2) if you can afford a new personal computer, you should be able to afford to buy at least one game.

I actually don’t even believe that revenues from PC games have been falling at all. I believe that they have just been shifting from traditionnal game publishers to companies like Zynga (see 5), Playdom (see 6) and PopCap (see 7) following what I call "The Great Disconnect."

On one side, you have traditional game publishers that are still doing business as they were in the 1990s. They produce PC games as ports of console games, requiring a powerful desktop PC with an expensive graphic card, a mouse or a gamepad. Their only innovation in the last 10 years has been to give the consumers the ability to buy games online and download them.

On the other side, consumers have evolved. They have turned to laptops and netbooks. These machines are low power, come with a small screen and are equiped with touchpad. They are used on the go and in short sessions, such as on a metro commute or during a coffee break. No wonder that consumers are playing Farmville or Bejeweled. These games fit their lifestyles and their machines. If traditional game publishers still want to be part of the PC market, they will have to change their approach before the Zyngas and PopCaps of the world completely take over. Tradionnal game publishers are loosing sales every time potential customers are forced to read a game's minimum requirements. Time is running out...

    References:

  1. Gartner Says Worldwide PC Shipments to Grow 11 Percent in 2008
  2. Gartner Says Worldwide PC Shipments to Grow 2.8 Percent in 2009
  3. Gartner Says Worldwide PC Shipments to Increase 19 Percent in 2010
  4. 2009 Essential Facts about the Computer and Video Game Industry
  5. Could Zynga really be worth $5 billion?
  6. Disney buys social game firm Playdom for up to $763.2M
  7. PopCap Games’ retail revenues up 85 percent in 2008 as PC game sales dive
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