View Thread : Whaddya know, online console gaming IS profitable!

From N-Philes: (

NPD Group has a report out on the profitability of online game consoles. Other information released from unofficial sources have projected online gaming sales to increase pretty well in the next generation, but NPD is the only one to have information for the current generation. So has Nintendo been right in skipping online gaming? The number of online games sold in 2003 was 23 million and the sales amounted to over $1 billion dollars. That's nearing a 200% increase over the previous year. Online games have sold 33 million units in total since 2000.

There's a very large asterisk to these numbers though. Since developers put offline modes into online-enabled games many of the "online" games sold might not be played online at all. Easy examples of that would be Sega's Phantasy Star Online series for GameCube. "It's important to note that the increase in sales for online-capable games does not mean that the masses are moving to online gameplay," said Richard Ow, senior industry analyst, The NPD Group. "In some cases, consumers aren't necessarily aware they're buying games with online capabilities, but whether they're aware or they aren't, the onus falls in the laps of the software developers to provide games with multiple playability features."

The majority of online game sales are for the shooter and sports genres. In 2002, sports games accounted for 70% of online games. That has decreased to 51% last year with shooter games taking a large chuck with 22 percent. Other genres are beggining to find a good nitch, 15% for racing and RPG has 4% of total. GameCube isn't known for being strongest in any of these genres and it's easy to see why Nintendo hasn't gone with a large online plan because of it.

"The challenge to the console gaming industry can be more attributed to the expanding demographic," explains Ow. "According to The NPD Group's Consumer Panel, more than half of the console gamers are 17 years old and younger, which means these gamers, who do not have access to credit cards, must rely on their parents to fund their online gaming habits. This is one of the reasons why most development teams tread cautiously in the world of online gaming. However, by providing first-rate titles with rich graphics, compelling content and online as well as offline capabilities, gamers of all ages and income levels can take advantage of these games."

Posted by Ethan Pearson, Founder, Director

I know that N-Philes is trying to make this seem not quite that great, but as of late 2003 there have been over 750,000 paying subscribers to X-Box Live, and I'm certain the number of people playing online PS2 games is even higher because of the EA games. Nintendo is not going to go online until they're absolutely convinced that they'll turn a sizeable profit from it, and by the time that happens Sony and MS will be years ahead of them with Nintendo playing catch up once again. Will they ever learn?? Even if online gaming proves to be a failure down the line (which it won't), they cannot risk being left behind once again! They still have a chance to catch up with everyone, maybe. If the N5 launches with an online model and some big online titles, they could be alright. But will that happen? *sigh*

Also, N-Philes' point about Nintendo not being good at making shooters possibly being a cause for their reluctance to go online is absurd. If Nintendo gave any of their big franchises online modes they could easily do twice as good as Rainbow Six 3 or Mech Assault. Mario Kart DD already sold much better than RS3 did, and can you imagine just how much better it would have done if it had decent, user-friendly online support? Or how about Four Swords Adventure, Pokemon Colloseum, Mario Party, Mario Golf, F-Zero GX, etc. etc.??

Woo! Even if people are buying games with online content and not using it; the fact remains that they bought it! That's gotta have a nice ring to Nintendo! This is probably why they're trying out some aspects of online gaming with the DS.

And the fact that third-party games that have online modes on the X-Box and PS2 sell much better than their GC counterparts should tell them something.

Yup, although they may take that as a demographics issue. A Tom Clancy game might sell better on an XBox simply because it has realistic graphics; a major selling point to people that are drawn towards the XBox. Grabbed by the Ghoulies would have done well on the Gamecube if not only for its old school gameplay (and name recognition of Rare).

You'd think that, but then look at the sales for Soul Calibur 2. The GC version sold the best because of Link, but even if every GC owner in the world bought that game it still shouldn't have sold better than the PS2 version because of its insanely high user base. The only explanation is that a lot of people own more than one console, so they can choose between different versions of the same game. Most people who own a PS2 and a GC or an X-Box and a GC go the GC version of SC2 because of Link's inclusion. X-Box versions of multiplatform titles are usually the best ones, but not by a huge margin most of the time. Usually the GC versions sells the worst, with the X-Box one being second and the PS2 one being first (because of the large installed user base). However, in cases like EA's sports games, the PS2 versions sell way more than the X-Box and GC versions combined, and that's because of again the user base but also because of online exclusivity. I'd bet that if the X-Box or PS2 versions of SC2 had a good online mode, the GC version would not have sold quite as well as it did.

A Black Falcon
Nintendo is really, really stubborn. ... OB1, you should like them... :D ...

Anyway, stubborn past sanity, like here, isn't good! Okay so five years ago online wasn't as proven. But NOW? Saying that it won't make money? As we've all said before it just doesn't make any sense...

Now if Nintendo changes its tune anytime soon I'd be shocked. Facts don't matter when you know what is the right thing to do! ... okay in some cases that is good. But this is most assuredly not one of them and the proof for online is as solid as it could be...