GameHouse sells for $35M
by Brad Shapcott · in General Discussion · 01/27/2004 (12:01 pm) · 23 replies
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#22
The major portals present a barrier to entry for games - you may have to ante up quite a bit to serve the ESD giants. However, as I mentioned, this is an artificial barrier to entry, the benefits being the more ephemeral "mindshare" of the consumers that the portal has spent time & money building up.
Unlike the physical merchandise world, however, the barrier to entry for BECOMING such a portal is much less fixed. You know longer have to worry about manufacturing, duplication, shipping, warehousing, distribution to the individual shops, etc. Just like indie game programming, ANYBODY can play. Maybe not in the same league, initially, but the potential for competition is fierce. It doesn't take MILLIONS of dollars to get started, set up your contacts & contracts.
So this does represent a shift in power. It means a more competitive environment that really can't go away. Competitive environment means they can't be TOO draconian or they'll start losing killer content to the competition (unless they plan to buy up every gaming portal on the planet which appears to be making a reasonable profit... tough when you've got places like Yahoo, Comcast, and Microsoft sponsoring portals of their own).
Call me optimistic, but I think this is just the way business will be forever done in the future ... there'll be cycles of consolidation, followed by periods of diversification. And I think that the ease and inexpense of communication & distribution granted by today's technology will keep shaking things up a lot more than we're used to in "box" retail.
In 10 years, RealArcade may be forgotten, and Game Tunnel or GarageGames might be the Goliaths to beat.
01/28/2004 (3:01 pm)
Quote:After they control the main distribution channels, IP is the first thing ESD publishers will squeeze out of developers in return for access to real estate on the Web portal -- that is, if they take any lessons from box retail.I go back to my "barrier to entry" discussion.
The major portals present a barrier to entry for games - you may have to ante up quite a bit to serve the ESD giants. However, as I mentioned, this is an artificial barrier to entry, the benefits being the more ephemeral "mindshare" of the consumers that the portal has spent time & money building up.
Unlike the physical merchandise world, however, the barrier to entry for BECOMING such a portal is much less fixed. You know longer have to worry about manufacturing, duplication, shipping, warehousing, distribution to the individual shops, etc. Just like indie game programming, ANYBODY can play. Maybe not in the same league, initially, but the potential for competition is fierce. It doesn't take MILLIONS of dollars to get started, set up your contacts & contracts.
So this does represent a shift in power. It means a more competitive environment that really can't go away. Competitive environment means they can't be TOO draconian or they'll start losing killer content to the competition (unless they plan to buy up every gaming portal on the planet which appears to be making a reasonable profit... tough when you've got places like Yahoo, Comcast, and Microsoft sponsoring portals of their own).
Call me optimistic, but I think this is just the way business will be forever done in the future ... there'll be cycles of consolidation, followed by periods of diversification. And I think that the ease and inexpense of communication & distribution granted by today's technology will keep shaking things up a lot more than we're used to in "box" retail.
In 10 years, RealArcade may be forgotten, and Game Tunnel or GarageGames might be the Goliaths to beat.
#23
Yes, publishers are buying out a lot of studios but that has been going on for quite a while and it's a smart move for a publisher to buy out a successful studio. So it will continue to happen. And at the same time, for a game dev, funding is the biggest problem. Having a publisher buy you out is one way to secure funds.
What replenishes this cycle though, is when experienced game devs leave their jobs and start their own companies. And when these people are high profile enough they tend to have more power with the publishers and can demand better deals.
So while everyone else seems to be saying the publishers are buying out everything and soon we're going to have three really big companies, I'm seeing the publishers shooting themselves in the feet. As the publishers buy out all these companies and give them raw deals, the dev's get unhappy. If the developers become unhappy with what they get from the publishers they find ways of getting around the publishers. The publishers power comes from funding. Once that power is gone the dev's sit in the drivers seat.
Just don't let the publishers read 1984. Then we'd all be in trouble ;).
GF
01/29/2004 (6:46 am)
I agree with you Jay, this is just another wave in the cycle.Yes, publishers are buying out a lot of studios but that has been going on for quite a while and it's a smart move for a publisher to buy out a successful studio. So it will continue to happen. And at the same time, for a game dev, funding is the biggest problem. Having a publisher buy you out is one way to secure funds.
What replenishes this cycle though, is when experienced game devs leave their jobs and start their own companies. And when these people are high profile enough they tend to have more power with the publishers and can demand better deals.
So while everyone else seems to be saying the publishers are buying out everything and soon we're going to have three really big companies, I'm seeing the publishers shooting themselves in the feet. As the publishers buy out all these companies and give them raw deals, the dev's get unhappy. If the developers become unhappy with what they get from the publishers they find ways of getting around the publishers. The publishers power comes from funding. Once that power is gone the dev's sit in the drivers seat.
Just don't let the publishers read 1984. Then we'd all be in trouble ;).
GF
Torque Owner Joe Maruschak
If we were able to function as an 'independent' shop, I'd be all for it. I personally don't want a producer breathing down my neck telling me Ihave to add feeatures to a game because the Real Arcade audience needs those features.
I am not anti-money... but I am not in this to make a million either. I do think that while this is great for the GameHouse guys, it is a bad thing for the industry (consolidation of the indie shops mirroring consolidation of the big shops).
In time, maybe BraveTree will get bigger and be much more successful and I will have to deal with such problems. For now, I am content to pursue the path I have chosen. I want to chip away a little corner of the gaming space that allows me to make a deent living, feel good about going to work in the morning, send my daughter to college, and keep my commute under 8 minutes and my workday under 10 hours.