How does Don Daglow know when the next game consoles are coming out?
Don Daglow, former president and CEO of Stormfront Studios, spoke in front of an audience of students and developers on the first day at GDC Canada about how game developers and gamers will know when next-generation consoles will be released. Daglow said that many people won’t believe that the next wave of consoles will come out out much later than anticipated. He refers to industry analyst Michael Pachter, of Wedbush Morgan Securities, and the announcement which Pachter made in Edge Magazine last month that the next wave of consoles will arrive in 2013.
Daglow said further that Wall Street, on the other hand, disagrees with Pachter’s analysis because the two previous consoles’ cycles have gone through five year lifecycles. Thus, according to Wall Street, the next game system will more likely be created by 2010.
Gamers also disagree with Pachter, says Daglow, as gamers are always looking for the newest hardware. Daglow, with over 30 years of experience, emphasized that he has seen it all. The following is a discussion of what Daglow found to be the six factors to the creation of a company’s new game system:
One of the players is losing dominant market share which imposes upon Wall Street’s need for marketable growth.
Wall Street is always asking for growth. If a company starts to lose market share they might be starting to release a new console, Daglow said.
They have a lot of cash to pay for the ramp up.
A company must have tons of cash in order to excel at research, marketing, creation costs, etc. Companies also need to tear down the whole notion that customers will trust that they they will only sell the best consoles on the market even if it isn’t true. If you see a company holding tons of cash, they might be at that point where they are about to promote or release a new console even if their former consoles were less than ordinary.
Developers must have something that “wows” a non-player.
Daglow said that the Wii brought a new way of game play into games that brought interest to the casual and non-gamer. If a company produces some “wow-like” things in their new console, then they might be starting to release a new console.
You need to get the cost of the system under $500 at first and quickly to $300 and later $200.
The compulsive gamer will pick up the system at $500, but if the costs aren’t brought down fast then the oppurtunity to saturate with the rest of the gamer community, or the opportunity to endeavor in money-making schemes, will be delayed. If a company can create a game system for distribution at $500 or less, then they might be starting to release a new console
The press calls your brand “next generation.”
When the press begins to talk about what your next generation gaming system will do and what it should have, then the company might be starting to release a new console.
Big publishers start to support the new system.
When large publishers like EA, Capcom and Ubisoft begin to support a company’s new game console system to see what the company has for the next generation system then the company might be starting to release a new console.
Game sales peak one year before the next generation console is created.
Daglow said that all new consoles are released when the games for the earlier system peak the year before the console is released. So if a company’s games sales are starting to peak for the current console, then they might be making a new console.
Editied by Nary Pung
Tags: Canada, Conference Talk, Don Daglow, GDC, Next Generation
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