2005: PC Gaming

2005: PC Gaming

Those who view 2005 as yet another year of decline for PC gaming aren’t
seeing the full picture. PC Gamer’s Daniel Morris points towards areas
of growth and creative innovation and excellence, like Civilization
IV…

Like the old man in the Monty Python sketch — tossed out
with the plague despite his pleas of health — PC gaming faced a
skeptical industry in 2005. But a closer inspection of the “corpse”
reveals an underlying market that not only held strong but also grew in
the hardcore genres.

From both a critical and commercial perspective, PC gaming turned in
another of its increasingly stealthy years of quiet, reliable profits
for companies that made smart investments in it.

The most superficial analysis of the PC gaming market – i.e., the NPD
summary of retail sales – showed yet another year-on-year tumble.
Analysts (both professional and amateur) lined up to declare the
platform dead. But there was a more sophisticated analysis to be made,
and it pointed to continuing opportunity in the PC space.

Relying on NPD’s number blinds one to the ongoing evolution of PC game
distribution. The key insight, as summarized in a new report from IM
Consulting (the market-intelligence unit at Ignited Minds), is that
"the PC game software market is much more robust than a cursory glance
at the data suggests…(our analysis) becomes a call to publishers to
recognize that the PC market can be a very lucrative and profitable
place to publish, if the games are done properly in the right genres."

Biggest genres

If we were to set apart the three biggest genres in PC gaming –
first-person shooter, real-time strategy, and RPG (including MMOs) –
and consider them as a market unto themselves, we would see a market
that is in fact growing. (Estimates vary as to how much, though the
consensus among senior publishing executives I’ve discussed this with
range from 5 to 10 percent.)

Needless to say, this growth has been achieved without anything like
the marketing muscle placed behind the consoles – nor, for that matter,
with anything like the benefit of a fair shake at retail, where the PC
shelves continue to be squeezed.

Creatively and critically speaking, the market has rarely been
stronger. Any review of the creative year in PC gaming should start
with the tally from the E3 Game Critics Awards nominations. Two PC
games nominated for Game of Show (compared to one Xbox 360 game); the
PC’s Spore nominated for Best Original Game (not a single 360 game was
nominated in this category); three PC titles nominated for Best RPG
(compared to one 360 title, which was Elder Scrolls IV: Oblivion, a PC
co-launch); and PC games taking all five of the Best Strategy Game
nominations. PC games took four of the five nominations for Best Online
Multiplayer Game at this year’s E3, while not a single Xbox 360 game
made the cut in this category.

Millions of gamers

It’s debatable whether any other platform produced a second-half lineup
with the impact of F.E.A.R., Civilization IV, Battlefield 2, and Age of
Empires III. And this is to say nothing of the burgeoning MMO category,
where World of Warcraft and many others continue to attract millions of
gamers.

Yet the PC gets no love from retailers, and little more from some of
the major publishers. Shelf space contracted in most of the major
retail chains. EB Games suspended its policy of accepting PC game
trade-ins. Unwilling, or perhaps unable, to separate the overall
decline in PC retail sales from the growth in the triple-A high end,
publishers were tempted to throw in with retailers in a large-scale
abandonment of the category.

Online sales

With this in mind, perhaps the single biggest accomplishment of 2005
was the online sales (via Steam) of Valve’s opus, Half-Life 2. The
company keeps its figures close to vest, but reliable estimates
indicate that perhaps as much as half of the game’s formidable sales
total was achieved via Steam.

Importantly, these online sales did not come at the expense of the
game’s retail performance. Valve’s Doug Lombardi says that Valve "saw
increased sales via Steam without cannibalization of retail forecasts."
According to Lombardi, NPD’s retail-sales charts are understating the
strength of PC games sales, and will increasingly understate that
strength as the PC publishing model moves online to alternatives like
Steam.

Publishers (and some developers) took notice. EA has unveiled
Downloader as its Steam equivalent, and made its Battlefield 2: Special
Forces expansion available for direct purchase. Smaller players have
undertaken full-scale projects to migrate their businesses to
direct-download models.

2005 was a year that proved our industry needs a newer and wiser
perception of the PC gaming market. As IM Consulting put it, "Instead
of giving up on the PC game market because retail sales are lagging, we
urge publishers to adapt their distribution strategies to the changing
landscape."

Daniel Morris is associate publisher and former EIC of PC Gamer, the world’s best selling PC games magazine. More here.

sssss