Entertainment, Hardware, Software Programs

Is the bubble bursting for games with special controllers?

Back in 2005 Guitar Hero hit the PlayStation 2 with vengeance. A goofy plastic controller and a great soundtrack helped propel Guitar Hero to over $45,000,000 in sales during 2005. This almost unexpected success was the beginning of a multi-billion dollar franchise. The sequel, Guitar Hero 2, saw $200 million revenue in 2006 alone. This was additionally supported with over 650,000 music pack downloads, which was enough for them to reach Gold Record status [500,000 records sold qualifies as Gold according to RIAA] on their own.

Guitar Hero 3: Legends of Rock more than tripled the revenue with 750 million dollar sales revenue in the first 12 months following its release. Given that the sales are still strong and the prices aren’t as discounted as other titles – GH3: Legends of Rock should cross one billion dollars in sales alone. Another excellent example of the alternative controller games would be Nintendo Wii Fit with its balance board, which has over 22.5 million sales worldwide [data until October 30, 2009]. I could go on and on about Guitar Hero?s Success, about how imitation is the best form of flattery with the Rock Band Series being started as a basically a clone of the Guitar Hero Series and how it sold over 13 million sales and 60 million song downloads – becoming yet another multi-billion dollar franchise. After all – we all know how that big extra game specific controller games are a license to print money. Or are they?

All the gamers out there recognize the holiday season as one of the most difficult times of year to keep up with buying games if they are on a budget, and if they aren?t they run out of time trying to play through the gamut of Triple A titles that come out during the fourth quarter every year. This year we had the release of Tony Hawk?s Ride, a skateboarding game with a big fake skateboard controller and carried a price tag of $120. Unlike previous mega-sales of Tony Hawk games, Ride only sold 114,000 copies through the end of November 2009 – far below its early 2,000,000+ sales estimates. Also gracing us with its presence this holiday season is DJ Hero. Despite its strong showing at the Spike VGA?s and strong reviews, it had only sold 123,000 sales in its first month. Even Wii Fit marked a drop in sales during the third quarter of 2009. The real question is – does the world really need more game specific controllers? Apparently the consumers are voting a resounding no with their checkbooks.

In a market highly saturated with rhythm games, it seems as it was the wrong place and the wrong time for both Tony Hawk Ride and DJ Hero to hit the market with the new special controllers. The contributing factors to the horrible [compared to projections] sales included the release of Guitar Hero 5 and Rock Band: The Beatles, which both sold well though not as fast as their predecessors. Both Ride and DJ Hero both increased their base price to $120, well above the $100 price point that was so popular with earlier games in the Guitar Hero series which contributed to harsh reception by gamers and reviews. Bear in mind that in most outlets, Hero games are being sold for 84.99-89.99, 10-15 dollars below their recommended street price. With both games suffering abysmal sales Activision Blizzard will be sure to rethink their strategy this segment of the gaming market. Activision has already alluded to a DJ Hero sequel, but its attention will remain mostly on Guitar Hero and, the newly launched, Band Hero franchises. Cowen and Company analyst Doug Creutz decreased sales estimates as the time of launch approached and even those projections were massively optimistic – prior to launch, Creutz wrote a note "On DJ Hero, despite some recent positive comments from company management about pre-orders, we remain very cautious about the title’s prospects at launch, "predicting that DJ Hero will only sell "600,000 units in the US during the current quarter, down one million units compared to Cowan’s previous 1.6m estimate, with full year sales at 950,000, instead of 2.5 million."
600,000 units in the US alone compared to the current number of 123,000 in first 30 days – the bubble just might be bursting now.

Disclosure: All sales numbers used were from NPD Group.