DailyTech - Analyst Thinks Epic Regrets Microsoft Deal

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Blog: Software Analyst Thinks Epic Regrets Microsoft Deal
Shane McGlaun (Blog) - January 22, 2010 11:40 AM

15 comment(s) - last by CENGJINYIWEI.. on Jan 31 at 7:45 AM

Lots of lost profits on Xbox exclusive deal

I have been a gamer since I was a five and my dad bought Pong home. I have owned most game consoles that have hit the market from the Atari to the PS3. The thing I dislike most about the gaming market today are exclusive titles. Exclusives are an attempt to get gamers to buy another console just to get one game, and they often work. Perhaps one of the most successful exclusive relationships has been between Microsoft and Epic.

Epic is the publisher behind the smash hit Gears of War franchise. Analyst Michael Pachter has said that he believes Epic is regretting its decision to tie up exclusively with Microsoft. Pachter told GameTrailers, "I think the Epic guys can't wait until they can start doing multi-platform games."

His opinion is based on profits. Sure there are a lot of Xbox consoles on the market but Pachter figures that if the Gears of War games had been offered on the PS3 it would have sold an additional 3 to 4 million copies.

He said, "I don't [think Gears will go cross platform], I think Microsoft has a contract to make sure they get that sequel. But I think Epic regrets signing that contract. You're up to 11 million PS3s in the U.S. and probably similar number in Europe, you got a 20 million addressable market with a game like Gears of War. I mean, that thing would easily sell 3 or 4 million on the PS3, that's a lot of profit. No way is it worth it."

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Most exclusivity deals involve large payments or reduced royalties.

By jpwolf on 1/22/2010 3:37:13 PM , Rating: 3

Most exclusivity deals involve large payments or reduced royalties. I am sure Epic considered the lost sales they would have by only publishing on one platform during the negotiations with Microsoft.

RE: Most exclusivity deals involve large payments or reduced royalties.

By omnicronx on 1/22/2010 4:44:57 PM , Rating: 5

Exclusivity is almost always a sure thing in the console world too. Even if Gears totally flopped epic would have been paid, so in hindsight I'm sure ANY developer would be kicking themselves if they signed an exclusive deal in which their game turned out to be a huge hit..

Unfortunately not every game can be a hit, so from a developer perspective, it makes perfect sense to sign these kind of deals.

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RE: Most exclusivity deals involve large payments or reduced royalties.

By CHAOQIANG on 1/25/10, Rating: -1

RE: Most exclusivity deals involve large payments or reduced royalties.

By atlmann10 on 1/27/2010 12:03:57 PM , Rating: 2

Yes Omnicronx that is the truth of the matter entirely. Whereas GOW is a hit and GOW2 is also, I am sure they have several other games released or slated which are not. SO they get paid for all there output under the contract. So in the end they make more money over the long haul, rather than hit or miss income for every game.

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RE: Most exclusivity deals involve large payments or reduced royalties.

By OKMIJN4455 on 1/24/10, Rating: -1

In other words...

By WoWCow on 1/22/2010 2:26:38 PM , Rating: 2

Epic either

A) Didn't believe their products would be successful and decided to sign an exclusive to get more $$$

or

B) They believed xbox would be a huge smash success and dominate the competition.

For another comparison, see iPhone and AT&T Service

I personally despise exclusives, but I can understand the motives behind it (money, simpler platform support, marketing, etc.)

RE: In other words...

By CENGJINYIWEI on 1/31/2010 7:45:52 AM , Rating: 1

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Um... wait a second?

By smackababy on 1/22/2010 1:05:50 PM , Rating: 1

I am pretty sure Epic publicly stated Gears of War couldn't run on a PS3 due to there being less RAM.

Nonetheless, I think exclusives are a bit silly. They are probably easier to make though, given the PS3 difficulty. I know Valve stated they would not make another PS3 game due to it being a hassle.

A history of slaughter...

By MrBlastman on 1/22/10, Rating: -1

By MrBlastman on 1/22/2010 12:29:47 PM , Rating: -1

Microsoft has killed many game companies it has gotten its hands on, or, at the very least, driven them to run away.

R.I.P. FASA Interactive and Mechwarrior (Thank you Jordan for making a comeback and the MW:LL Team)

I said nearly. Bungie was probably bigger than they ever should have been with that lackluster title called "Halo." It was average at best for a shooter series. However, they may have been bigger if their creativity were allowed to grow like it _was_ doing prior to their acquisition.

Halo could have been a million times better, and it probably would have been.

Making an exclusive deal with a console manufacturer such as Sony and Microsoft is a double-edged sword. On one hand, it may guarantee significantly more exposure to the title than it would have had before due to all the "system exclusivity" hype thus granting them faster dollars and easier inroads to acceptance.

On the other hand... the upside potential of the title is eventually capped to the level of success the particular console reaches. Remember the Sega Master System? Phantasy Star could have been huge on the other systems and possibly given Square tremendous opposition to Final Fantasy but... The Master System died and with it Phantasy Star until the Genesis. It hurt the series. Square flourished.

So Epic, I'm sad, but--not as sad as I could be due to the history being available to you to decide for or against exclusivity. In the future, perhaps Epic needs to focus more on their core audience, the PC, which they abandoned with Unreal Tournament 3 and its terribly consolified interface and lack of options us PC gamers demanded (such as Mouse Acceleration adjustments) and their sales suffered as a result.

RE: A history of slaughter...

By Operandi on 1/22/2010 1:04:01 PM , Rating: 2

I miss the old Mechwarrior series, what is the MW:LL team?

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RE: A history of slaughter...

By MrBlastman on 1/22/2010 1:05:31 PM , Rating: 2

Mechwarrior Living Legends. Available now, for free, if you own Crysis. ;)

http://www.mechlivinglegends.net

It is in open beta, but it is very promising.

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RE: A history of slaughter...

By Operandi on 1/22/2010 1:51:10 PM , Rating: 2

Wow, that actually dose look pretty good, they clearly have some talent working on that. I'm surprised I haven't heard of that before.

I'm hopping the Mechwarrior series reboot brings back the feel of the Mechwarrior 2 series. Haven't heard any news on that in awhile though.

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RE: A history of slaughter...

By SoCalBoomer on 1/25/10, Rating: 0

RE: A history of slaughter...

By nafhan on 1/26/2010 9:20:39 PM , Rating: 2

It's worth noting that Epic isn't owned by MS. They're a private company that MS paid to make an exclusive game. They have other properties (i.e. UT3) that are multi-platform and their game engine is behind several 3rd party multi-platform games such as the recent Batman game.

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RE: A history of slaughter...

By inperfectdarkness on 1/28/2010 1:42:20 PM , Rating: 2

i, for one, regret epic having anything to do with microsoft--just like i regret rare having anything to do with them.

epic should stick to what it does best--creating the greatest FPS PC games.

/rant.

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