E3 disappointed, but that’s a good thing
As a kid, you’ve probably experienced it.
Crushing disappointment, that is. It’s part of life and most of us will learn that lesson early in life. Of course, often, what seemed like a disaster at the time will, in hindsight years later, end up feeling pretty minor.
You wanted a red bicycle for your birthday and only got a blue one. The rollercoaster you’d been dreaming of riding all summer was closed for maintenance the day that you got to the amusement park. You wanted Coke (NASDAQ: KO) and all the restaurant had was Pepsi (NASDAQ: PEP).
That type of stuff. Trivial and, ultimately, not nearly as bad as it seemed at the time.
Reviews of the video game industry’s biggest week, E3, are feeling a bit like that now. The event, which wrapped up last week, was…fine. Just fine. Hopes that it would be an earth shattering week were largely unfulfilled.
It shouldn’t be a surprise. The influence of these big events had been dwindling for some time now and the cancellation of E3 in 2020 kind of put it out of people’s minds. Add that 2021 was a virtual convention and you are fully set up to arrive at the amusement park with a “closed” sign on the rollercoaster.
There were some highlights that we touched on last week, but it seems like the big players are starting to pull back from taking part (Sony has outright pulled out for a couple years now) and the big party that we were used to having might be nearing its end.
Maybe that’s ok?
The truth is that the industry is getting further and further segmented and the days of needing to see the big companies roll out big games while everyone goes ohhhh and ahhhh in the audience. Even the whole “console warz” idea that drives so much of the narrative is becoming outdated.
The truth is that all three of the big players in the console market have different audiences and different measures of success and failure right now.
Sony seems to be going after the serious gamer and it wants to move machines up to the Next Gen model now. So for them, selling the PS5 is the most important measure.
Microsoft is after the suburban teen boys and, as such, is appealing to their ADHD qualities by pushing the Game Pass. Eventually, they want to sell them XBox Series X, but it can wait. That’s why there’s no exclusive games on the Next Gen now. It’s all about the game Pass subs for them.
Nintendo, meanwhile, is as much a lifestyle brand now as a video game company. As long as their branding remains strong they are confident that they will find the casual gamer market, whether they be older adults, children or 20-something women (who do you think is playing Animal Crossing?).
They are all playing a different game, so they don’t really need to be in the same room to keep score.
If you want to keep score, the market’s reaction to the event was relatively muted. Nintendo (TYO: 7974) was at $570.93 the day before it presented at E3 and is at $588.44 USD at the time of writing. Sony’s (TYO: 6758) numbers were $93.03 to 98.12 and Microsoft (NASDAQ: MSFT) was $256.06 to $264.36.
Is the moderate bump to do with E3? Who knows, but there you go.
E3 isn’t going to go away. It still has value to the smaller developers as an opportunity to wow the big boys. But, it’s increasingly becoming clear that there’s more than enough market to share for the big players and that they are going to be increasingly less concerned with fighting each other.