games mean more than pocket money to the software industry - they account
for more than half of sales now. And while there’s still a vague stigma
attached to £1.99 quickies, cheap : doesn’t necessarily mean nasty,
as BARNABY PAGE explains in this analysis of the games world’s latest
incredible watershed with grave and far-reaching implications (Number
65 of a series)
There’s nothing like a good
apocalypse to get this nervous industry excited. Every year, the pundits
say the bubble is about to burst. Amstrad -gobbles up Sinclair—whatever
happened to gentility? CSD collapses – is this the end of distribution
as we know it? American giant Electronic Arts muscles into the UK market
- was the battle lost on the playing fields of Pasadena?
But perhaps the biggest bugbear this autumn is the boom in sales of budget
software When Mastertronic first launched £1.99 games three-and-a-half
years ago, the flourishing industry laughed at them. Fact: Mastertronic
sold about 12 million games in under four years.
Now Mastertronic General Manager Martin Carroll claims his software house’s
many labels (MAD, Americana, Entertainment USA, Bulldog and the rerelease
label Ricochet, all budget) account for about 15% of all sales in the
UK leisure software market.
And the Gallup market-research organisation reckons some 60% of all games
sold this yearwill be budget—an estimate pushed up from less than 50%
in the light of soaring sales. So far from being a pesky thorn in the
side of full-price sales, budget is big business; some normally sober
observers reckon the UK leisure software market is worth as much as £80
million a year.
Already, the figures tell a story: Mastertronic’s Carroll will put out
10,000 or 15,000 copies of a game at once, while the first production
run for a full-price product rnight be just 2,000 or 3,000 copies.
But reports of the death of full-price software have been greatly exaggerated,
most industry bosses agree — because though budget and full-price are
both battling for the consumer’s money, they’re fighting by different
Full-price games sell quickly when they’re hot and new, propelled up the
charts by magazine reviews, ad campaigns and word of mouth —or they flop.
As Code Masters Manager Jim Darling puts it, ‘for a full-price game to
succeed now there has to be something pretty special about it—and that’s
more to do with the licensed names and the hype than the actual product’.
Budget games are low-profile, unadvertised (‘there’s just not enough money
to do It’ — Darling), and there’s not much profit on each unit. But they
keep on going, casually bought like magazines in corner newsagents and
garages, which the full-price games don’t reach. A good budget game will
sell for one or two or three years,’ enthuses Darling, and as an example-in-the-making
he cites Code Masters’s BMX Simulator released in the New Year, it ‘hasn’t
dropped off at all’
NICE LITTLE EARNERS
Though the profit margin on
budget games is tiny, overheads are low —cheap packaging and duplication,
often minor bargain-basement programmers - and budget labels produce far
more games each month than their full-price counterparts. ‘The key to
success in budget publication is low overhead and high production run,’
says Mastertronic’s Carroll with authority.
Some critics see the budget labels churning out cassettefuls of dross,
scraping a few pennies and letting the pounds pile up any old how. But
budget producers insist that they can’t afford to release poor games —
because the individual titles aren’t well-known, it’s the name of the
label that makes or breaks sales. Indeed, even within the industry, it’s
the range — Reaktor, Americana,The Power House whatever rather than the
actual game which is promoted.
Darling of Code Masters takes an understandably optimistic view: ‘The
real reasonforoursuccessisqualityof product. With one or two exceptions,
we’ve not released any duff products.’
And he’s dubious about the value of full-price hype, saying ‘the manufacturing
and distribution end of this industry underestimates the ability of the
end users to know what they’re buying and make an intelligent purchase.’
Darling also gives credit to his archrival, acknowledging that ‘what Mastertronic
proves is that for £1.99 or £2.99 the kids can get games as
good as they used to pay £8.99 for.’
One dissentingvoice: Electronic Arts supremo Trip Hawkins. ‘if you buy
a book, you expect it to be well-edited, well-printed and there to be
no typographical errors,’ he pontificated in a recently-published interview.
‘if you buy a record you expect all the instruments to be finely-tuned
… with budget software, a lot of the production values aren’t very good.’
Strangely, though, rerelease budget labels like Elite’s £2.99 Classics
haven’t sold very well — even when the games were Smashes available at
a fraction of their original price. It’s those crazy, crazy markets.
UNEXPLORED BIT IN THE MIDDLE
There’s another side to the
story, though. About half of all budget games are sold through small outlets
such as garages and CTNs (confectioner/ tobacconist/ newsagents), but
the rest go through specialist software shops and the high-street multiples,
where they positively profit from the presence of hyped-up full-price
The goggle-eyed sprogs of industry myth wander along the software racks
and pick up an £8.99 game — and when you’re blowing a £10
note anyway, you don’t miss another couple of quid, so the consumer picks
up a budget game on his way to the till.
Perhaps the psychological appeal of buying, obtaining means that budget
games will never quite supplant the higher-priced products and their fancy
packaging. And, to be fair to the fullprice games, it’s not just a matter
of glitter; some of the best software will always be full-price because
budget producers can’t afford to spend a long time programming or to pay
the teams of specialists for sound, graphics and so on which big games
Maybe that’s why b**** is still a dirtyish word. Take the Playability
By Design team (U.C.M- The Ultimate Combat Mission): they don’t do budget-games,
oh no, they do ‘low-price full-price games’ which Mastertronic happen
to sell at £2.99, according to programmer Dave Thompson.
Its not so easy to really make budget games in the full-price style, though.
Production methods are different for budget houses, and so is distribution
to those all-important CTNs. Budget games have to get everywhere because
they’re not hunted for as specific titles; ‘sales and distribution are
extremely important because they’re radically
different,’ according to Firebird Publisher Chris Smith.
Budget packaging serves a different purpose, too, Whereas full-price packaging
can be glossy and impressive the inlay for a budget game has to tell you
something about the unpromoted title itself.
That’s another reason why ‘it’d be very difficult for a full-price house
to go into budget’, as Smith comments.
It’s more likely that the full-price labels will lower their prices to
a midrange compromise -£5.95, say, as Software Projects did earlier
this year— and indeed some wild estimates put the ‘average’ price of 8-bit
software as low as £7.95 already.
‘It’s going to get harder to maintain a full release schedule on 8-bit
at full price,’ says Firebird’s Smith, ‘As 16-bit hardware gets cheaper
the 16-bit machines will be the quality’ end and the 8-bit mostly budget
except for a few special projects,’
Mastertronic’s Carroll agrees -‘budget may well take over for existing
8-bit machines,’ he says, because ‘the quality difference between budget
and full-price has narrowed’.
A firmer forecast comes from Martin Currey, Sales Manager at R&R Distribution
(which handles the Top Ten budget label among others, and owns Alternative):
‘Full-price software is going to drop a couple of quid. There will be
a situation where it’ll remain a steady balance; I don’t think budget
will take over.
‘There’ll be two distinct price levels after this Christmas: £6.95,
£7.95 at maximum, and then your £15/£20 level. -
And, of course, there’ll be the budgets selling away, mostly at the variants
of £2 and £3 (£1.99, £2.95 etc).
OF WORLD AS WE KNOW IT
So budget has boomed, and software
houses like Mastertronic have proved that you can produce quality games,
sell them at a quarter of ‘full price’ (whatever that is) and still make
a tidy profit.
The retail trade is convinced, too - when Woolworth decided to reintroduce
software to its shops in autumn 1986, the cautious chain tested the water
with budget games in 70 shops and then, when that was successful, realised
computer games do sell and risked full-price software as well.
One producer, Ocean’s David Ward, dreads budget taking over the high-street
multiples. When deciding what to stock, many chains assess sales value
per foot of shelf — and of course a few feet of budget games drags down
the value perfoot of the whole software section, Despite the Woolworth
move, Ward fears budget may force all games out of the high streets,
Still, many full-price houses have decided that if they can’t beat the
budget specialists they might as well join ‘em, and launched budget labels:
witness Hewson’s Rack-It, with its first releases this month (see page
27 of this CRASH), distributed by market leader Mastertronic. Only a few
have shied away from the budget battleground: Ocean, Activision and Elite
(burned by its Classics experience), for instance. As the characteristically
self-confident industry paper Computer Trade Weekly proclaims, ‘budget
has won the intellectual battle; it appears to be winning the commercial
one as well’. That’s software for you; another day, another crisis,,,
Part of the article,
about the way Gallup compiled sales charts, was printed on a coloured
background and I have not been able to use OCR. So this section is available
as an image (warning: 150k) if you click