We frequently meet with clients to take a look at changes in the industry and consumer behavior, and provide analysis and insights into how the changes will impact things to come. This spring, it was clear that last year was one of the most transformative years in the video games industry: audience expansion, the accelerating adoption of digital distribution, increases in mobile and social gaming, and the influence of the Wii were all topics on the minds of industry followers. But I get a little uneasy when I see how all these factors are influencing the plethora of free game options available, and while it’s great to have more ways to expose gaming to a broader audience, the industry struggles with how to best monetize that gaming activity.
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Microsoft released lots of interesting details today on Windows 7 release schedules and pricing. There were three main announcements: First, and one that is pretty good but that has already been widely reported, is that PC upgrades on Vista machines bought between now and the end of October would be free from Microsoft, with any cost (normally S&H) being charged by the PC OEM. This is within expectations and is the good for both the consumers and the OEMs. We should see a very minimal stall from the transition as these very low cost upgrades are offered to consumers. In addition, the excellent timing of the general availability of Win7 (between back-to-school and Black Friday) ensures that student buyers can’t wait until general availability to buy and holiday consumers are taken care of. All-in-all a big A+ for timing, pricing, and for ensuring that this will be the smoothest transition within the industry of any Windows OS upgrade yet.
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HDMI has attracted criticism for its rapid development causing confusion in the marketplace, but it is simply being pushed ahead of the pace of change in the industry, not to mention competitive standards. These include DisplayPort, which is gaining momentum on the PC side of the convergence equation, and emerging wireless challengers such as WHDI and WirelessHD.
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Apple’s forthcoming iPhone 3G S may have twice the speed and, at its 32 GB size, twice the capacity of today’s high-end iPhone 3G, but it is also at least twice the price now that the 8 GB iPhone 3G will drop to a mere $99. Of course, that’s with a new contract and a two-year commitment to stay with AT&T.
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“Death to Discounts” a recent Wall Street Journal article about the designer clothing business, got me thinking about the continuing decline in CD sales. According to the article, clothing designer Eileen Fisher is rethinking the way her clothes are sold:
“In department stores these days, Eileen Fisher clothes ‘get marked down before they even have a chance to sell,’ she told me recently. Perhaps it no longer makes sense to give Saks, Bloomingdales and other department stores so much control over the brand, she posited. She has asked her staff to consider a new model: renting department-store space in order to control prices and inventory.”
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Tags: CD, DVD, EMI, MGM, Nintendo, Redbox, Sony, Universal
Entertainment | Russ Crupnick, Vice President, Senior Industry Analyst | 
June 4, 2009 9:40 am | 
Comments (1)
Just last weekend, my 11-year old son had a bunch of his buddies over on Saturday night to hang out and play video games, watch movies, shoot hoops, and engage in an epic Nerf gun battle. A few of the boys’ mom’s hung out with me and we enjoyed an evening sipping wine and exchanging gossip. After a couple hours of complete mayhem, we wanted to settle the boys down so I went to the cupboard and picked out a movie - initially it was hard to pick one I thought they all would like and then my eyes spied one of my all-time favorite movies: “Big.” As I announced to the group, “Okay, I’m putting on “Big,” several of the mom’s chimed in, “Oh I love that movie.”
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Apple’s iPod led many to opine that the future of consumer electronics lie in the integration of hardware, software, and services, the so-called “CE 2.0.” I would certainly concur that “beyond the box” solutions — particularly software for unconnected devices that compose the vast volume of the industry — can lead to many benefits such as competitive differentiation and a better overall user experience.
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Many of us in the video games industry eagerly await E3 next week in Los Angeles. As we’ve been busily working on our meeting schedules, invariably the conversation turns to, “What do you think will be the big announcements coming out of E3?”
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This month brought two promising moves in the evolution of connected consumer electronics. Amazon announced the Kindle DX, which it believes will signal a new chapter in textbook and newspaper distribution. And AT&T announced that it would tap Jasper Wireless as its preferred embedded solution to hasten the development of connected consumer electronics or what the carrier calls “emerging devices” (you know, like a camera).
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My colleague Anita Frazier’s blog a few weeks ago reminded us that Mom is a driving force behind video game growth in the U.S. In the imaging industry, as the traditional keeper of photos, past, and present, she is the main player, not just the facilitator. Mom is watched expectantly for traction both in camera purchases as well as imaging output…for that fine day when items like photo books and collages hit critical mass and we high five each other from Rochester to Tokyo.
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