Friday, February 05, 2016

ESA almost irrelevant

Two weeks ago, the Entertainment Software Association (ESA) lashed out at market research firm NPD. Most of us know that NPD has been the primary source of industry information when it comes to games sold at retail in the United States. The ESA hosts a conference each year that caters to retailers and allows publishers to show off their new wares: E3. Unsurprisingly, because of their shared interest in catering to companies that generate revenue from retail-based game sales, NPD and the ESA are long-standing partners. And the ESA honored this partnership by publicly shaming NPD. Again.

What's wrong with these people?

Besides the obvious insensitivity, it is comments like these that tell you how close an association like the ESA is to becoming irrelevant. For one, the industry is changing drastically, and that should not come as news to anyone watching over the last ten years. Today, at $75 billion across categories, the worldwide market for interactive entertainment is more than three times larger than it was ten years ago. People now play games on a wide variety of devices, publishers draw earnings using several new revenue models, and the process of development and distribution has unprecedentedly low barriers to entry. But perhaps most importantly, gaming has, finally, graduated to becoming a mainstream form of entertainment.

"The very ground that the ESA was built on is starting to crumble"

In the United States, video games represent a $24 billion industry and are now bigger than newspapers ($21 billion), radio ($17 billion), magazines ($16 billion), film box office ($11 billion) and music ($9 billion). Of every dollar spent on entertainment, $0.13 goes towards gaming. It is remarkable then that the best-known association that looks after the interests of an industry that has tripled in size, has somehow managed to become less important.

With regards to growing share of digital revenues for game companies, the ESA states: "Scores of millions of consumers purchase innovative content in myriad ways." That is about as vague as a statement can get. It suggests that beyond the mandatory hyperbole, the very association that looks after one of the biggest games markets in the world is clueless to even quantify the market at its most basic level. Worse, according to its website, the ESA currently has 33 members, of which only four are digital-only companies. By comparison, its counterpart in the United Kingdom, Ukie, which represents a market that is roughly one-fifth the size of the US, counts 250 members. And this includes many of the same names and big publishers. The ESA also tells us that nowadays consumers are spending money via "subscription services, digital downloads, and via their mobile devices." Yet we notice an absence of companies like Apple, Facebook, Google, Valve, Supercell and King, each of which represents a household name in gaming and holds a vested interest in the US market.

You can't sit with us

Last week, Electronic Arts announced that instead of buying itself a booth at E3, it had decided to leave the show floor and will be organizing its own fan-oriented event elsewhere. After years of criticism that E3 doesn't provide enough coverage on game categories that lie outside of retail, now one of the majors is fleeing the nest. At the same time, we've reached the peak of the current console cycle, arguably the very core of the traditional games industry, which means that the focus in the next few years will move to mobile, PC, virtual reality and eSports.

Central to all of this, of course, is an inevitable decline of specialty retailer GameStop. While some of its digitally focused assets like Kongregate continue to do well, the firm has made a clear decision to diversify its overall retail offering with the acquisition of related businesses such as Cricket Wireless, ThinkGeek, Spring Mobile and Simply Mac. Confronted with a decline in the number of unique physical titles released every year, dropping to under 200 in 2015, GameStop is now experimenting with becoming a publisher and partnered with Insomniac Games on Song of the Deep. And with the holiday season behind us, we anticipate that GameStop will announce layoffs and a reduction of its overall retail footprint during its next earnings call, possibly arguing that it is the result of a seasonal pattern. The very ground that the ESA was built on is starting to crumble.

Step up or step off

The games industry is riddled with people that hold strong opinions. Consumers, developers, press: everyone's a critic. But when it comes to stepping in and advocating for a real cause, there's a lot left to be desired. Case-in-point: as the top trade body for the games industry, the ESA probably could have done more when the chaos around Gamergate erupted last year. At the very least, something a bit more proactive than emailing a boilerplate response and then only after being asked by a reporter.

"...we need true leadership, not a bunch of people ready to step on others to elevate themselves. If the ESA finds there is not enough market transparency, it should encourage and not criticize"

As an industry researcher, I share the frustration and challenge that comes with analyzing and accurately capturing what is clearly the inevitable future of interactive entertainment. But beyond my own personal fascination and business agenda, this is also an industry that struggled for years to gain relevance with mainstream audiences. Anyone who works in the industry, regardless of what side of the fence you're on, has dealt with incredulity and mockery. Now that games are finally getting the respect stakeholders have fought so long to obtain, we need true leadership, not a bunch of people ready to step on others to elevate themselves. If the ESA finds there is not enough market transparency, it should encourage and not criticize.

We all understand that the industry is changing and that digital is the future. And it would suit the top trade body for the games industry to take some initiative and provide guidance. Different from ten years ago, there now is a generation of academics and analysts who would like to see games truly evolve. In the past few years a slew of academic programs at esteemed institutions like NYU and USC have popped up that encourage young adults to consider a career in programming, design and development. As a colleague recently remarked: "Game developers hone skills that are applicable across a range of industries, and not just gaming." At the same time, there still exists a lot of uncertainty around recently emerged categories like mobile casino games and free-to-play games that target kids. These are all areas where a strong regulatory body could play a critical role, build relationships and find common ground.

So, with the very foundation of the games industry shifting, I invite the ESA to step up to the plate. What we need is leadership from an association that is in touch with the industry and cares for its constituents. Instead of booing the ESA should be building bridges. And in return, we can help you lose the ever-stronger stench of irrelevance.

Tuesday, February 02, 2016

iOS the 2nd perferred gaming platform after 3ds

Apple's iOS may be losing market share to devices running Google's Android, but the iPhone maker should continue bringing in more money from games on its platforms for years to come. That's according to a new report from DFC Intelligence covering the global games and apps market for smartphones and tablets.

By 2018, DFC expects annual revenues from iOS games to hit $9.7 billion, compared to $2.7 billion for games from the Google Play store. For reference, the report lists the current record for single-year mobile game revenue on a platform as $6.6 billion, a mark reached by the Nintendo DS in 2008.

Even as Apple continues to lead the way in mobile game sales, DFC anticipates the company's iPhone and iPad lines to be outsold by a proliferation of Android devices. The report predicts a worldwide total of 829 million active Android phones in 2018, compared to 265 million active iPhones. A similar disparity is projected to surface in the tablet market. As for how Apple can grow revenues while losing market share, DFC cited the user-friendliness of the iOS ecosystem, and the way it allows purchases to be accessed through multiple devices.

Sunday, January 31, 2016

Half-of non-trump voters would support him in general election

As the story goes, Donald Trump could win a general election because his political appeal extends beyond traditional Republican voting blocs. He would attract certain types of Democrats, we're told, and he'd turn out large numbers of  low-propensity voters who've become totally disenchanted with the system. There is some truth to each of those claims, and the GOP would be wise to glean some lessons from the rise of Trumpism. The problem with this electoral calculus, however, is that even if Trump peels off discrete slivers of Democrats and manages to bring some significant mass of new voters into the fray, the math still doesn't add up. His favorability rating among Democrats -- and more importantly, among independents -- is horrific.  A few data points, via Gallup, Pew Research, and the Huffington Post's polling average:

As I've argued in the past, universal name recognition is almost always an asset for politicians -- but a candidate runs into (insurmountable?) trouble when everyone holds an opinion about him or her, and that verdict is slanted decidedly in the negative direction.  This also helps illustrate why Hillary Clinton's support is so flimsy: Virtually everybody in America knows who she is, and most people don't like or trust her.  Setting aside his awful showing among Democrats and independents, Trump also faces a significant problem among Republican voters.  A new poll from Bloomberg suggests that the anyone-but-Trump phenomenon among many righties isn't merely anecdotal. This is a real problem for him:

    Donald Trump maintains a dominant lead among Republican primary voters across the nation, with Senator Marco Rubio and Senator Ted Cruz effectively tied for a distant second place, according to a Bloomberg Politics poll released Wednesday. The poll of 1,020 likely Republican primary voters, conducted online by Purple Strategies from January 22-26, found Trump leading with 34 percent. Rubio grabbed 14 percent and Cruz 12 percent, a 2-point difference that falls within the poll's margin of error of plus-or-minus 3.1 points. No other candidate registered in double digits...Only 50 percent of Republican primary voters who backed other candidates said they would vote for Trump if he became the Republican presidential nominee. The bulk of the remainder pledged they would vote for the Democratic nominee (13 percent); write in another candidate (13 percent); or skip voting altogether (5 percent)...51 percent of Republicans who didn't pick Trump cited his temperament as the reason why, while 31 percent agreed that he "insults women, minorities and other groups." Nearly a quarter of the non-Trump group called him "an embarrassment to the Republican party."

As is so often the case, this survey contains great news for Trump backers within the narrower context of the GOP primary, but is filled with bad omens for the general election.  The Donald's support outpaces that of his two closest competitors (Rubio and Cruz) combined nationally, but among Republican voters who don't favor Trump, only half of them say they'd pull the lever for him in November.  Some would defect to the Democrats, others would vote third party or write in someone else, and still others would simply stay home.  Mitt Romney narrowly won independents in 2012, but still lost the election to Barack Obama.  (As a narrative-busting aside, Romney also won more votes than John McCain, carried the white vote by the same margin as Reagan in 1980, and won the same percentage of self-described conservatives -- who turned out as a record percentage of the electorate last cycle -- as Reagan did in the 1984 landslide.  And he lost). Just like much of Trump's appeal is visceral, rather than policy-based, this poll demonstrates that the same applies to his opposition within center-right circles.  His GOP-leaning detractors cite his temperament and propensity toward insults as top reasons why they'd refuse to back him in a general election.  His petty feuding resulting in a debate no-show probably only intensifies those opinions.  People aren't likely to warm up to a guy whom they view as "an embarrassment," candidly. In short, if Trump loses independents, maybe badly, and also sheds a significant share of traditional Republican voters, the notion that he could offset those deficits by producing millions upon millions of magical new voters looks like a desperate fantasy, not a plausible strategy.

Of course, we're not even sure whether Trump can actually deliver throngs of new primary voters, a proposition that will be tested very soon.  On one hand, people have consistently underestimated the celebrity mogul throughout this process (myself included), and his strong supporters evince a level of loyalty that indicates they will show up and vote.  He draws the biggest crowds in the race by far, with the possible exception of Bernie Sanders, which isn't insignificant.  There's also evidence that Republicans are registering new voters in Iowa at a faster clip this year than in 2012 (though not as quickly as you might think), and it's not unreasonable to conclude that Trump deserves a fair amount of the credit for that.  But if Trump's low-engagement supporters -- a sizable group that's separate from his hardcore base -- end up remaining disengaged when it comes to trudging to polling places to caucus or vote, he'll significantly under-perform his polling numbers. Case in point, via CBS News:

    Cruz performs better among Republicans who have voted in state primary elections before, leading that group by 5 percentage points over Trump. His supporters are very high among those who haven't taken part in party elections: He receives 44 percent of support among Republicans who have voted in just the general election and 50 percent support among independents who say they are planning to attend the Republican caucus. Rubio is the second most successful candidate among non-primary GOP voters, getting 20 percent of their support.

That's a description of the latest Monmouth poll, which adjusted its potential outcomes based on three turnout models -- each of which is higher than the 2012 benchmark of 122,000 GOP caucus-goers:

Monday, January 25, 2016

President gets fast track unlimited war

While the Washington snowstorm dominated news coverage this week, Senate Majority Leader Mitch McConnell was operating behind the scenes to rush through the Senate what may be the most massive transfer of power from the Legislative to the Executive branch in our history. The senior Senator from Kentucky is scheming, along with Sen. Lindsey Graham, to bypass normal Senate procedure to fast-track legislation to grant the president the authority to wage unlimited war for as long as he or his successors may wish.

The legislation makes the unconstitutional Iraq War authorization of 2002 look like a walk in the park. It will allow this president and future presidents to wage war against ISIS without restrictions on time, geographic scope, or the use of ground troops. It is a completely open-ended authorization for the president to use the military as he wishes for as long as he (or she) wishes. Even President Obama has expressed concern over how willing Congress is to hand him unlimited power to wage war.

President Obama has already far surpassed even his predecessor, George W. Bush, in taking the country to war without even the fig leaf of an authorization. In 2011 the president invaded Libya, overthrew its government, and oversaw the assassination of its leader, without even bothering to ask for Congressional approval. Instead of impeachment, which he deserved for the disastrous Libya invasion, Congress said nothing. House Republicans only managed to bring the subject up when they thought they might gain political points exploiting the killing of U.S. Ambassador Chris Stevens in Benghazi.

It is becoming more clear that Washington plans to expand its war in the Middle East. Last week the media reported that the U.S. military had taken over an air base in eastern Syria, and Defense Secretary Ashton Carter said that the U.S. would send in the 101st Airborne Division to retake Mosul in Iraq and to attack ISIS headquarters in Raqqa, Syria. Then on Saturday, Vice President Joe Biden said that if the upcoming peace talks in Geneva are not successful, the U.S. is prepared for a massive military intervention in Syria. Such an action would likely place the U.S. military face to face with the Russian military, whose assistance was requested by the Syrian government. In contrast, we must remember that the U.S. military is operating in Syria in violation of international law.

The prospects of such an escalation are not all that far-fetched. At the insistence of Saudi Arabia and with U.S. backing, the representatives of the Syrian opposition at the Geneva peace talks will include members of the Army of Islam, which has fought with al-Qaeda in Syria. Does anyone expect these kinds of people to compromise? Isn't al-Qaeda supposed to be our enemy?

The purpose of the Legislative branch of our government is to restrict the Executive branch's power. The Founders understood that an all-powerful king who could wage war at will was the greatest threat to life, liberty, and the pursuit of happiness. That is why they created a people's branch, the Congress, to prevent the emergence of an all-powerful autocrat to drag the country to endless war. Sadly, Congress is surrendering its power to declare war.

Tuesday, January 19, 2016

Voters really like Donald Trump

Most Republicans running for president have only one idea: Be like Reagan!
Unfortunately, they seem to remember nothing about Reagan apart from the media-created caricature of a slightly addled old man who somehow mesmerized an imbecilic public with his sunny optimism.
Jeb! goes around saying, "I believe we're on the verge of the greatest time to be alive."
Marco Rubio answered a question in the first debate about God and veterans, saying: "Well, first, let me say I think God has blessed us. He has blessed the Republican Party with some very good candidates. ... And I believe God has blessed our country. This country has been extraordinarily blessed. And we have honored that blessing. And that's why God has continued to bless us."
John Kasich responded to a question at the New Hampshire presidential forum about why he was running, saying: "Well, Jack, look, we're all -- we -- I've received blessings. Most of us here have been very, very blessed, and when you get that way, you have to figure out what your purpose is in life to make the world a little better place."
They all sound like Barney, the purple dinosaur, singing, "I love you, you love me!"
The other problem with the Be Reagan strategy is: It's not 1980 anymore. Reagan's election is as far away today as the defeat of Hitler was then.
Gov. Scott Walker's answer to whether he'd invade Iraq, knowing "what you know today," was: "I'd point out that in the overall issue of foreign policy, I'd say in my lifetime, the most impressive president when it came to foreign policy was a governor from California."
What does that even mean? Is he going to invade Grenada, fund the Contras and put missiles in Western Europe? Back in 1996, when Bob Dole said, "I'm willing to be another Ronald Reagan, if that's what you want," at least people laughed.
When Moammar Gadhafi was under siege in 2011, Rick Santorum said: "Ronald Reagan bombed Libya. If you want to be Reaganesque, the path is clear."
On the other hand, in the quarter century since Reagan bombed Libya, Bush invaded Iraq, prompting Gadhafi to end his WMD program, invite in U.N. weapons inspectors, and pay the families of the Lockerbie bombing victims $8 million apiece.
Nonetheless, "bomb Libya" is exactly what our feckless commander in chief did. Obama sent American troops to participate in the NATO bombing of Libya -- which helped oust Gadhafi, which led to Islamic lunatics running the country, which led to the murder of four Americans, including our ambassador, in 2012, and the refugees flooding Europe today.
Formulaic applications of Reagan's policies from the 1980s don't always work the same way they did in the 1980s. (Similarly, Duran Duran's new single was kind of a dud.) I used "What Would Reagan Do?" as a joke back in 2005; these guys think it's an actual governing philosophy.
When Reagan was running (three and a half decades ago), there was a real fight in the Republican Party over abortion, the Equal Rights Amendment, guns and foreign policy. Reagan had to face down elements in his own party to be pro-life, anti-ERA, pro-gun and to pursue an aggressive anti-Soviet foreign policy.
Reagan won. It's over. The ERA is gone. The Soviet Union is gone. The GOP is unquestionably the party of life and the Second Amendment. (If only fetuses could get their hands on a gun!)
Ever since the hero of 9/11, Rudy Giuliani, couldn't get out of the starting gate in his presidential bid because he was pro-abortion and anti-gun, no serious Republican candidate is ever going to waver on those two issues again.
So why did Marco Rubio find it necessary to stress that he opposed abortion even in cases of rape and incest at the first GOP presidential debate? Did he not live through that whole Todd Akin thing, like the rest of us?
Today, the fight in the Republican Party isn't over abortion, guns or the Sandinistas; the dividing line is immigration. Will we continue to be the United States, or will we become another failed Latin American state?
On this, it's Donald Trump (and the people) vs. everyone else.
Trump announced his presidential campaign by talking about Mexican rapists. Immigration is the only policy paper he's put out so far -- and he's been crushing the polls. He got his one sustained standing ovation from 20,000 cheering fans in Dallas Monday night when he talked about stopping illegal immigration.
But James B. Stewart gasses on in The New York Times about Trump's "namecalling, personal attacks and one-liners that have vaulted him to the top of the polls." In the entire article, Stewart never mentions immigration.
Perhaps some minority of people will vote for Trump because of his personality. But I notice that it's his position on immigration that gets thousands of people leaping to their feet.
The media will talk about anything but Trump's specific, detailed policies on immigration -- all while claiming he doesn't have any "policy details." The very fact that the entire media -- including most of the conservative commentariat -- obdurately refuse to acknowledge the popularity of Trump's immigration plans is exactly why Trump is exploding in the polls.
Trump isn't trying to imitate anyone. He's leading on the seminal issue of our time while the rest of the field practices looking optimistic in front of the mirror.