Thriving Core

Published as part of our sister-site GamesIndustry.biz's widely-read weekly newsletter, the GamesIndustry.biz Editorial, is a weekly dissection of an issue weighing on the minds of the people at the top of the games business. It appears on Eurogamer after it goes out to GI.biz newsletter subscribers.

It's not every week that we get a torrent of sales information like the one which Take-Two opened up at a Wedbush Securities conference earlier this week - but then again, looking at the figures in question, it's not hard to see why Take-Two is pretty confident about letting it all hang out in public.

After all, what publisher wouldn't want the world to know that its top franchise has now topped 100 million unit sales, while the healthy progress of several other wholly-owned IPs is demonstrating an admirable and ongoing ability to build multi-million-selling franchises from scratch?

Take-Two has been an interesting beast to follow over recent years. Various regulatory and management concerns have dogged the company, and it has been lumbered by the - far from undeserved - belief in the markets that it is simply the "GTA Company", with all of its other franchises being little more than snacks between the meals that are GTA.

In spite of the former issues, and perhaps driven forward by the latter concern, Take-Two has done a sterling job in recent years of building and maintaining a stable of major franchises. This week's figures don't quite shatter the image of a company that's built heavily around the GTA franchise - the headline figure was that GTA IV is now touching 20 million sales - but they do reinforce that GTA is in rude health, and that Take-Two has many other strings to its bow.

The argument that mid-range publishers face a bleak future is fairly widely accepted at this stage. Publishers below the (extremely short) A-list have been told for years that either they need to find a specialist niche, preferably one with high barriers to entry or a sufficiently different business model to the mainstream games business as to discourage larger predators - or very quickly elevate themselves to the ranks of the AAA publishers, which is no mean feat even when the industry isn't in such a state of flux.

Take-Two has successfully, for the most part, taken the second of those options, fuelled by the security and confidence granted to the company by GTA's blockbuster success. What's really worth noting, from a wider industry perspective, is that it's also done so while remaining almost entirely focused on the "core" market.

Much attention has, of course, been focused away from the core market in recent years - and that's both correct and entirely understandable, given the extent to which innovations like the Wii, the App Store, Facebook gaming and so on have redefined the landscape of the industry. However, as Take-Two's figures (and those of several other firms besides, not least of all Microsoft, EA and - to some extent - Activision) prove, there are plenty of huge franchises and massively successful games being created in the core market - more so than ever, in fact.

There have, however, been changes in the core gaming market - they've just been rather more subtle than the enormous upheavals in mobile and social gaming. In some cases, it's even the same technology which has created new markets in mobile and social gaming that's enabling these changes to core gaming. The commonplace use of DLC add-ons, for example, has created new opportunities to turn hit games into ongoing revenue streams - something which Take-Two itself has exploited superbly with its add-on content for GTA IV.

Looking a little more closely, though, it's interesting to consider Take-Two's approach to franchise building. The company has a clear objective - it wants to build a stable of valuable IP which it owns and controls. It's hardly the only company with that objective, of course, but while plenty of publishers down the years have talked the talk, the sad reality is that their risk-averse nature has deterred them from walking the walk. After brave words about nurturing original IP, many publishers have found themselves falling back on IP licensing deals - deals which gave them nice, safe properties to push onto the market, and often, someone else to blame if it all went wrong.

Herein lies the rub, though - those licensed titles, although they obviously continue to sell well, now generally fall neatly into the casual gaming end of the spectrum. Moreover, while kids' licenses are still a solid proposition, their quality has arguably been on the up for some time - helped along by high-profile successes such as LEGO Star Wars, which has shown buyers what a really good quality game for this market can do. Shovelware is still out there, but it's less prevalent and more risky than before - not least since this market, most of all, is hit by the rise of vastly cheaper gaming options online and on other platforms.

As for adult licenses, that's an even tougher market. It's worth noting that almost no major summer action blockbuster in recent years has had a tie-in game - instead, licensed titles have generally been resurrections of old IP or, in isolated interesting cases such as Starbreeze's Riddick games, acknowledged as the successful continuations of franchises which won't be back on the cinema screen any time soon.

So where's a publisher to turn? There's still a huge audience out there that's willing to pay pretty high prices for core content - that much is obvious. Indeed, this is the audience that's going to be most resilient in the face of continuing downward pressure on prices, even if publishers have to start playing smarter overall - using DLC, subscriptions, special editions and eventually even thinking in terms of ARPU rather than up-front SRP.

Happily, the solution to keeping this audience satisfied seems to be to invest the time and effort required to bring original IP up to the level of blockbuster franchise. Take-Two's example here is, again, interesting and informative. Take the Red Dead franchise - a reasonably solid performing IP but far from blockbuster status, prior to the most recent iteration, which received the care, attention and quality required to turn it into an eight-million-unit-selling blockbuster.

It's also interesting to note that the Mafia series, whose first iteration was also far from being a huge seller, has spawned a sequel that brought the franchise up to five million unit sales. BioShock, another new IP which represented a major risk at launch, enjoys over eight million franchise sales. Looking beyond Take-Two, it'll be fascinating to see how Dead Space 2 has performed overall - EA has lavished care and attention in the franchise, rather than dropping it after the first iteration performed solidly but unremarkably, and the buzz around the second game seems to have been fantastic, suggesting the possibility of great sales in the medium to long term.

Not every publisher, of course, can afford to make that kind of investment - which is, to a large degree, why the field of core publishing has become so hostile to mid-range publishers. It's not just about budgets - it's about appetite for risk and willingness to commit to building a long-term portfolio of IP, both of which are generally the domain of larger, more secure companies.

Yet if we're losing some of the smaller publishers because of that, the reality is that from a creative perspective, things haven't looked this rosy in a while. Critics will always bemoan the appearance of sequels - but sequels to original IP franchises, coming from publishers with a demonstrated appetite for the risk of founding such franchises, are a damn sight better than endless tie-ins with summer blockbuster movies. If core gamers ever feel ignored or threatened when they read all of the coverage about social or mobile gaming, they're mistaken - there's never been a better time to be a fan of core gaming experiences.