Scott Steinberg is the CEO of TechSavvy Global and is a frequent keynote speaker and for video games. He also had his own series of videos called Game Theory in which he educated people about game development. He's covered the video game industry for 400+ media sources. In his series, Game Theory, he explores the video game theory and provides a forum for people to learn about the video game industry and its development. In the first episode, he sets the background of the industry and the issues facing it today.
Youtube Transcript
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welcome to the game theory a smarter way to play in deeper look at the issues
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and individuals that shaped the video game business I'm Scott Steinberg is
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today opens
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we find an entire industry influx everyone of course like to use the
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dollar were disruption
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is new business models and technologies are rapidly and oftentimes brutally
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upending the status quo
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but frankly issues that Infinity Ward in the social gaming boom
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are the real issue here in my opinion rather it's the fact that we're seeing a
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fundamental shift in the way that we make market in consume games right down
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to the very definition
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interactive entertainment to put things in perspective I asked a few friends
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just how much is the field being rocked to its very core be
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entire industry is going to change when it was starting to change
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they were like we think we want to change puppets changing and we can
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feel it well I clearly on the bow the ship and the waves are crashing in the
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wind is in our face and we're like holy sh
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the I've never seen a period like this is so much disruption going on today
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industry is really being turned inside out not only are there a lot of new
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customers showing up in the coming games for the first time
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they were saying really big behavior changes by traditional gamers
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to use this camp on one platform like the PlayStation
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and other there are using diversity of media
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and engaging with brands so they're doing a lot of things there
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there at a quite a bit more casual a lot of the established players and very
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worried
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the traditionally established players weathers retailers already been
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published
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may have good reason to be worried people finding experiences product
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elsewhere and different business models are emerging that these large
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infrastructure companies aren't used to adaptive
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love them won't be able to adapt we're and a
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radical shipped and the standards
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gaming I don't think by any means that a downward spiral
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I think it's a radical shift no the expectations
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the playerbase and at the money flow people recognize that
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and choose to adopt it will flourish people who
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ignore it or misunderstand it are down it's like a complete Genesis
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arm and yes it it will be small incremental every day every week every
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month but over the
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the next 12 three years it will be enormous
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everyone is vulnerable in this change bottom line
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it's time for a wake up call because gaming is in a single cohesive fielding
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rather it's a loose collective a different markets and subcultures
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rapidly waking up to the fact that is retail goes the way of the dodo
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there's no longer room for one size fits all call it the perfect storm
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thanks to the economy the rise a free to play an online games and players
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increasingly mobile hectic lifestyles suddenly today's industry leaders are
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under fire on all fronts
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which makes me wonder wire even the field right is mine struggling so hard
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to react everything all at once
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and that some witnesses saw this on you know the democrats is hitting the pipe
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onto something
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the are this is miles or something up
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cultures percent problem in the fifth sleep are then ask her right now
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I don't like your smell things will start selling down all that
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animals like doing like to the more predictable what was but I think this is
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probably the most exciting point
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in that poll so we might actually be getting wait for two or three or four
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inflections
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inflection point at the same time which is pretty phenomenal because you know
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most people's brains
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and work on one problem at a time in on a meeting okay digital the retail the
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digital
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got it and now I know how to deal with it but we're going through pipe
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I i mean if I start your brain storm I did you get the five or six anyone who
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thinks that
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they're deeply entrenched in an existing business model in that business model is
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going to sustain
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i think is phone himself when we look at the top
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publishers and we look at their performance over the last couple years
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across the portfolio think the writing's on the wall it's not seismic it's the
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whole continent a breaking of
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into one pot up to the other side of the planet that's what I think that's like
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but thank God playing with the confidence think they've got it rough
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then you haven't seen corporate giants latest sales reports but the time for
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sympathy is over
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months ago we were in the industry that the market couldn't sustain so many
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high-priced games and having outings for stationary devices
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genius partly try common sense checking a production costs while limiting
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potential sales
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that just doesn't compute so what's the malfunction where we as a business
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currently sit and at what point do we finally get back to good from here
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the should've raisa social networking
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games baseball games I kinda stuff last year we saw it coming but we never
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realized how much it was gonna transformer explode in the past year
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obviously other things like iPhone had a huge impact he had this down 10 percent
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year
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came outta nowhere 2010 started out very weak
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and your rebounded kinda in middle part of the year I think that the basis for
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the downturn 2009 was really more
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attributable to the music category time and the Wii
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installed base really not buying as much software as
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historical no counselors were purchased the problem for the industry is
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it's hard to have a high fixed cost structure if you're seeing sales dropped
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below different perspective on the
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industry crash bring a lot of people net a bit to be when talks admire
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p.m. although to give you some more answer prepared like 1984
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nothing Michelle this has happened before
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like a 1984 crash there were no of a business model
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it is like a game that he was dying who's gonna be there that was me that
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we have layoffs at Activision that happened a couple weeks ago we have a
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very large layoffs Electronic Arts both from a very large
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that's not a sign of a healthy and industry having said that
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I think the industry will be helping is not headed for do
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and I thank were entertaining more people in more ways than we've ever done
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before
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but profitability standpoint the console AAA stop
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is right now not not quite work everybody was kind of hot figuratively
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with their pants down
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the traditional publisher model up internally developed games has a really
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really
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had problems over the last several years and studios who are their own stand to
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be in the modular ones are the ones you've been able to hang in there
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who staffed up properly and I figured out how to outsource I think everybody
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industry still figuring out how to make AAA blockbuster hot games in this day in
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age we sit around for so long saying
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you know the the game industry is immune to the recession and and you know where
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entertainment it will always be fine and you know we're not
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good point as industry insiders seem to be falling into three camps lately
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one publishers to analysts and three the rest the most porch and shackled by this
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little thing
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I call reality wanna hear my rants plural about where the breakdowns are
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happening
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then hit up our website but for now kindly allow my associates to sum up the
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state in the gaming nation
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for cyclical business I remember are making cartridge games
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I remember their wildly profitable eventually the game's got more expensive
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a better games they filled the car chargers the cartridges got packed with
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very expensive chips told the data
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more people started making the games and the business was in great
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and tripp hawkins came around and said what if we put it on a CD
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business model up putting an ICD changed in eighteen dollar package
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good twenty dollars twenty four depending on what was in it into a two
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dollar package
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and suddenly games became incredibly profitable
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and the Crash Bandicoot arrow two million dollar games
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99 million units was the heyday to certain extent
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up this cycle we're now at the calendar that cycle
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we have sixty million dollar gains being made eighty million dollar gains to be
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made putting on it put on a desk at
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still only cost two dollars store selling at 3 stores
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at inflation adjusted the price we sold it restores
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a you know ten years ago you can say what you will about fairness you can say
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what you will about liking the business as it is right now
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but that publishers are not profitable have the publishers
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do not make profit one of two things as they happen either
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one at change for two they have to start making games a go at it as
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really tough being a big studio obviously for electronic arts
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its very difficult road right now on THQ is slipping
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on the other hand I you're saying a proliferation
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a small independent studios and their
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the good news there is that they're experimenting with all kinds of ideas
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and all kinds a different formed gameplay
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bad news there is that they're not making money hand over fist in her
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the hi roseanne college judy's hibels
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i've you know that you know that big from joy then we can move a lot of money
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and then on the lol so that you've got these new forces
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social gaming that place but going on i phone gaming
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all of those people up served around the edges that this
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big group Center consumers about content
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expecting more engagement they want to be surprised they want to be inside the
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left of
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the companies to deliver on time and time and time again when you've got
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those big companies
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so depends upon very few friends it anything goes slightly wrong
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its its you know it's a big trip call a few team in 2003
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you played it for 6 for 10 hours and you put it aside and your pots mouse
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when you play in 2010 you play it for six or seven hours
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then you go online multi-player play for two hundred to three more hours
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and and Activision's like any more money for that when you play for two hundred
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hours
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you are buying fewer games I think that's what we really saw in 2009
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you have to see you know in 2010 something to address that
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and 2011 maybe 11 happy gamers pay more but
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you know what they're enjoying the game so they should pay for the privilege
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still as we came here to remind you the answers are never simple is this week's
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homework assignment we invite you to consider the following questions
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up
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be sure to hit us up at our web-site game theory online dot com to share your
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thoughts
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until next time this is your professor Scott Steinberg signing off
How does Steinberg attempt to interact and receive feedback to this media? Is it effective?
Steinberg lays down different questions to the audience of the podcast such as the reasons for the 2011 decrease in video game sales. He states what he believes is the issue then at the end of the podcast asks the audience to think about the things he said then encourages them to go to his website to share their thoughts.
What is the predominant method of presenting information that Steinberg uses?
Steinberg gives a contrast between two different things in order to juxtapose them together. For example, he compares the video game crash of 1984 to the 2009 - 2011 layoffs that EA had to do. His comparisons help the audience see what has changed in the industry and what has stayed the same.
How does his usage of his own experiences in the industry add to the podcast.
His appeal to ethos then the subsequent example has the audience more receptive to his ideas and theories as he is an industry expert. He give firsthand experiences to the audience so that they can see where he is coming from. On the other hand, one has to be skeptical of the similarities between his experiences and the current times.
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