Following on from Tuesday, MCV continues its discussion with Tonia Valesco on the changes in the local videogame market.
Do you think that the consumers who are buying $1 and $2 apps on their mobile devices are really taking sales away from traditional gaming outlets?
They are new and existing consumers getting the casual games hit. The apps are no match for a $20-$50 million console gaming experience.
So not a threat?
We were the first to roll out casual games for the PC/Mac in Australia and found from that experience it was a new market for us. Mums and dads would be in a shop and say ‘Oh, look! Bejeweled!’ So, we developed a casual games business in retail. These packaged casual games goods are a great example of how mobile or tablet gaming can coexist. At the moment everyone feels compelled to rush towards Facebook, but the fact is that it is not a one stop shop for all your gaming needs. We believe all of this can coexist and apps can also be good platforms to build brands for future consoles or PC games.
At the moment we’re seeing teething issues between retail and publishing due to the high price of local games and the increase in grey imports. Do you think the prices will have to come down?
Yes, the strong Australian dollar has made it difficult for a number of categories that import goods. All business are adjusting their retail prices to bring their products in line with the rest of the world. Mindscape and much of the industry has and is already adjusting its pricing more in line with overseas pricing.
And I’d imagine it’s difficult to renegotiate the fixed costs of doing business in a country as large as Australia. Also, there are only so many units that can go to grey imports, since the logistical heavy lifting can only be managed so far by Australia Post directly.
Yes, this is a challenge though we all have to adjust and look for ways to stay on top of this very challenging period.
Do you have an opinion about the current possibility that GAME, our other remaining may not find funding and have to close? Would you like to see that continued competition?
GAME are working on a solution to their local situation. We definitely want them to continue trading – it’s good for competition. Next Gen definitely needs gaming specialists.
You’re suggesting that the most important thing to do at the moment would be to keep your head on your shoulders and recognise that the established market for games is still very solid and the new difficulties aren’t worth fretting about to the extent that we jeopardise that?
That’s right, it still remains a very solid business, though packaged goods software is a maturing business. It lives with the ups and downs of all other discretionary consumer spending. We believe there is some way to go in this current cycle and as hardware becomes more affordable we will see some steady volume growth right up to and beyond the launch of the next gen hardware. Packaging goods are going to be around for many more years to come. The cost of development and experience playing high end gaming (let along return on production costs) is not practical for tablet or mobile gaming. Sure, consumers are becoming more selective though the big titles are getting bigger.
Thank you for your time!
To register for the MCV Pacific News Digest, head to the registration page: http://www.mcvpacific.com/user/index/register/journey/register