Microsoft Officially Drops Xbox 360 Price To $299

Microsoft today announced that the weekend will start with a $100 price cut on their Xbox 360 Elite model, giving it an MSRP that matches the latest Sony PS3 price cut to $299.  The Xbox 360 Pro model, now cut to $249 while supplies last, is being phased out for the Elite model, whose only difference is a 120GB drive rather than a 60GB one.

The Xbox 360 Arcade model, sans hard drive, remains at $199.

The $299 price match is great news for consumers, but a closer look shows a few items that Sony should (and will) highlight as major factors to consider.  The PS3 comes with built-in Wi-Fi, something that the Xbox 360 does for $100 more with an optional attachment.  Similarly, no HDMI cable comes with the Xbox 360, resulting in yet another accessory purchase for new owners.

So you have a gorgeous high-definition system with the world s best online gaming service, and you don t include Wi-Fi or an HDMI cable   Even though the core of your business and marketing strategies are online, and an HDMI cable costs a few dollars

Sony, Microsoft just gave you an opening, it s time to give em a good roundhouse with this one.

Guitar Hero About To Smash The Beatles?

Accoring to EEDR research analyst Jesse Divinch, Guitar Hero will continue to win the sales war in the music genre, even though competitor Rock Band is releasing an unprecedented set focused completely on the Beatles.

The analyst projects [The Beatles: Rock Band] the game will sell at least 1.7 million copies this year, fewer than half the 4 million-plus he estimates for Activision Blizzard Inc.’s Guitar Hero 5, which comes out on Sept. 1. Activision, based in Santa Monica, California, said on Aug. 5 that Guitar Hero had 53 percent of the music category in North America and Europe.

Overall, though, the music genre has hit its peak, according to Divinch.

The genre has peaked, Divnich said in an interview. This genre has seen explosive growth over the past two years, so it would be wrong to assume that would continue.

According to the most recent NPD numbers, the music genre of games is dropping even more than the overall market, showing a 14 percent decline from this time last year.  And a big name like The Beatles may not be enough to make kids take notice again.  From the Bloomberg article {link no longer active}:

“I’m totally going to buy it, but I don’t think it s going to be big with those who aren’t as into the Beatles,” said Ken Ball, the co-owner of Game Over!, operator of three stores in Florida and Georgia. “Teenage kids and preteens are the audience that they are trying to appeal to, and the Beatles just aren t as recognizable a band to them. “

Does this mean a Flo Rida Rock Band would actually outsell THE @!^*#$# BEATLES

Sigh.

Hottest Woman On Planet Plays Xbox 360 This Saturday

Microsoft’s Game With Fame has been a bit of a mixed bag, but this Saturday s edition will prove to be popular.

Megan Fox, star of the summer blockbuster Transformers sequel, will pick up a controller and proceed to make gamers very shy this Saturday night.  She will challenge a gaggle of drooling guys for one hour, and one hour alone, in the game adaptation of Transformers: Revenge of the Fallen.

The Game With Fame concept is great, but for every A-list star, there are a few independent music acts that may have trouble finding a match.  However, Megan Fox is a very nice coup, and has gotten the blogosphere buzzing about this sort of event once again.

Puma And Forza 3 Marketing Alliance Announced

Puma and Microsoft today announced a marketing partnership that will ensure the two brands, namely Puma and Forza 3, take advantages of joint marketing efforts across Europe and North America leading to the game’s release in late October.

As part of the partnership, Puma driver Natacha Gachnang will be the star of Forza 3’s marketing efforts in Europe, and will likely be encased in some sort of Forza 3/Puma hybrid outfit for the racing season.

[From the press release] {link no longer active}

The partnership includes a number of cross promotional elements, including the development of a limited edition Forza branded PUMA shoe, to do be developed to coincide with the game launch.  Exclusive gaming nights in selected PUMA Concept Stores will enable Forza Motorsport fans to preview the third edition of the game before purchase. Regular Forza content will also feature on the recently re-launched PUMAMotorsport.com.

The partnership will extend into the game itself, where we are bound to see a ample Puma logos strewn across the track.  So real world promotions?   Check.  Virtual world promotions?   Check.  Celebrity (at least for one territory and for the hardcore racing fan who knows who she is)?   Check.  Off to a good start.

Retail Heavy Rain Release Just The Start

The hotly-anticipated game-slash-movie-slash-game Heavy Rain is hitting PS3 early next year, but developer Quantic Dream is already talking sequels and prequels.  They re probably not what you think…

Heavy Rain will consist of several stories from several different characters, and Quantic Dream founder recently spoke to VideoGamer.com with information on how those stories will extend through future DLC releases.

“The game has all the scenes it’s supposed to have. It’s a complete story,” Cage told VideoGamer.com at gamescom last week. “But we are talking with Sony at the moment about having maybe extra downloadable content, maybe with prequels or sequels about the characters. I’m sure people will get attached to some of them and will want to know them even better.”

This is an interesting approach, creating extensions for a full game that just concentrate one one aspect, or in this case character, at a time.  Could other games do that; say, you have a game where you love the driving levels but can’t stand the gunplay, does it make sense to try and split those out as much as possible?

CEO: Price Cuts Not Immediately Impacting PS3

Reuters is reporting Square Enix president Yoichi Wada as saying the PS3 price cut was welcome news, but coming too late in the fiscal year to expect any impact on business.

“In terms of the impact (the PS3 cut) will have on this financial year’s earnings, I don’t think there will be a major difference,” Wada said. “But I expect there to be a big impact from next year.”

Wada instead expects the benefits to start being realized around March 2010 and on.  Price cuts are always a welcome sign to any business that needs a jump-start (PS3), but it is a bit of a slow burn until it really starts impacting the bottom line.

After the price cut, what’s the next step?   Communicating that cut to as many users as possible, and that s where marketing will take a crucial next step in fostering as many sales of new PS3s as possible.  Who woulda thunk it?

Exclusive Feature: We Are No Longer Recession Proof

The Madden football series has been an annual winner for publisher Electronic Arts, and is considered one of the classic video game series of all time. The latest version, Madden NFL 10, is its 21st edition, but one of the most important ones since its launch in 1989.

Madden is largely attributed with creating a new type of gamer which, for the purposes of this feature, we’ll call the “Madden gamer” (how convenient). The Madden gamer is the type of gamer who is the perfect demographic: young, male, and diversified over a lot of forms of entertainment.

Rather than spend their money on video games, they tend to buy a few key games throughout the year with a passion, but are passionless when it comes to some of the more hardcore releases out there (you won’t see too many Madden gamers purchasing Eternal Sonata anytime soon).

So when Lazard Capital Markets analyst Colin Sebastian started looking at initial Madden NFL 10 sales this week, they were interesting for a couple of reasons.

Madden NFL 10 As Bellwether

Sebastian identified sales as tracking “slightly below plan out of the gates” and “slightly below the company’s plan.” The economic recession has already impacted video games with console and software sales down year-over-year, but Madden NFL 10 is a significant bellwether that portends continued doom and gloom, or invariably a return to form for the once recession-proof industry.

Another interesting note is the fact that sales to the hardcore audience are still showing strength, with the specialty retailers marked as flat or slightly up. It’s the mainstream buyers, a lot of them Madden gamers, who seem to be hedging their bets on the new Madden.

The news isn’t all bad, though, as Sebastian is quoted as saying, “We also note that upcoming PS3 pricing promotions, co-marketing on EA Sports titles, Xbox 360 price cuts, and the busier back to school period could provide a later lift for the title.”

No Longer Recession Proof   

Still, the weak start does beg the question, “Does this mean we are officially no longer recession proof?”

We can get that question answered straight away: No, we’re not recession proof. We’re not bread. We’re video games.

The argument that in times of need, people need an escape is valid. But a $60 escape No, we’re not recession proof.

Now that doesn’t mean we can’t be. In recent years, we’ve seen console video games shoot up in price while adoption has slowed, especially in the past year. The price of entry for these games and their consoles are significant, and we can never lose sight of that.

The Apple Factor

In addition, you have to look at a company like Apple as a market disruptor. Their ability to churn out games that are priced as low as free is something that makes consumers start to think differently about how much a game is actually worth.

Of course, we’re not arguing that a free or 99-cent game’s quality can compete with a $60 console title (though, in some cases, they do). But when you look at the highest quality games on iPhone, be they Civilization Revolution, Tetris or Metal Gear Solid Touch, they are very rarely above $9.99.

And look at the titles mentioned above: these are original PC and video game IPs that found their success in the big leagues, only to go off and create fun product with those brands on the iPhone and iPod Touch.

Video games like Pac-Man, Super Monkey Ball and Space Invaders have their own portable versions, many with enhancements and new levels and gameplay techniques, that can be extremely profitable for companies with those IPs. And when you look at an app like Call of Duty: World At War Companion, you can see how these apps can leverage back to the console base (just make sure that console counterpart is good!).

If there’s one short-term way marketing groups can benefit their video game brands, it’s to hop on this bandwagon and quickly. Even if it’s for brand exposure or an increase in perception, this is a low cost way to take advantage of a market that is absolutely thriving, recession be damned.

DLC Savior

As for the original consoles, what can be done We see the normal business routes being taken, whether through price cuts of rebranding, new marketing efforts and such.

But maybe, instead of asking if we’re recession proof, why not ask what we can do to actually get there. Stop assuming we’re there, and start working to get us there.

One of the biggest opportunities for that is through downloadable content (DLC), both for full SKUs and also expansions on IP. Games like Halo 3, Call of Duty 4: Modern Warfare and Call of Duty: World at War show continued strength years after their release because of the multitude of DLC available for them. The fact that a two year old game is still at the top of the Xbox Live charts (Halo 3) should serve as a wake up call that your market is not only on the blogs and magazines.

It’s already on Xbox Live. It’s already playing your game. You just need to keep them playing.

So it’s back to Madden NFL 10. The doom and gloom could all be for nothing as it’s still very early in that game’s schedule. The NFL season hasn’t even begun, and we expect the mainstream to eventually come through in making yet another Madden a blockbuster hit.

EA seems to understand the concept that their gamers, and their biggest potential for increased revenue and success, is through the game itself. Madden NFL 10 is chockful of ads with Snickers gaining particular prominence. The Madden Shop part of the game is also a sign of things to come, with things like stats bonuses and elite membership for sale, anywhere from $1 to $10.

But EA needs to head off the inevitable decline in mainstream sales at the pass. The game features have been negligible at best compared to the previous year’s model, and this has been the case for a few years now. The Madden graphics engine is beautiful, but there are very few discernible differences between Madden NFL 10 and last year’s edition.


It’s time for a subscription model.

Instead of having gamers fork over $60 for what is essentially the same engine with just roster updates and a couple of new features, EA needs to offer up a Madden subscription model where players digitally received a significant update to their core game.

Rather than charge them $60 for the hassle of creating the retail version, shipping them, dealing with all the associated costs, a $30 Madden subscription is just the thing DLC needs to really make a test of whether or not publishers can go it on their own.

The profit margins on such a case would be higher even with the lower cost, and we’re not taking into account the in-game ad revenue which will continue to increase, or the add-ons that are being tested now in the Madden Shop.

It may sound like a pie-in-the-sky idea, but it’s not that absurd, especially with Xbox 360 retail games debuting just a couple of weeks ago on Xbox Live, and full games like Burnout Paradise already on PS3 and Xbox digital storefronts

EA needs to be proactive and not just wait for the inevitable weakness in retail sales before they do something about it. The steps in in-game advertising and microtransactions are solid ones for Madden NFL 10, but NFL 11 has to go subscription before more consumers sack it.