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Squeezed Middle

Life as a second-tier publisher is no longer tenable.

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 become an oft-repeated mantra - the mid-range of gaming is on the way out. Squeezed between the top tier of million-selling blockbusters and the surging success of low-priced online, mobile and indie games, the future for any title that dares to charge a top-end price for mid-range content seems extremely bleak.

Publishers have reacted to this new reality with a variety of different strategies. Activision's well-documented approach has been to withdraw entirely from any aspect of its business which doesn't deliver blockbuster results, abandoning the low- and mid-range entirely. Electronic Arts and other major publishers have taken a more balanced approach, focusing resources on building high-end franchises while simultaneously exploring the potential of more niche low-cost games as well as mobile and social markets.

That's the top end of publishing, though. Companies like Activision, EA, Ubisoft, Take-Two, Square Enix and their ilk have huge blockbuster titles on which they can rely even while the market is in flux. Their business models require huge adaptations thanks to the sweeping changes in the market, but franchises like Call of Duty, Madden, Assassin's Creed, Grand Theft Auto and Final Fantasy are ports in the storm, guaranteed top sellers regardless of market conditions - for now, at least.

Other publishers, however, are not in such a lucky position. Two classes of company find themselves in seriously troubled waters right now - those publishers who have largely survived off mid-range titles and licensed IP over the past decade, and new companies attempting to break into a full-priced console game market which increasingly high barriers to entry.

"The actual impact of critical reaction to a game on its sales remains a matter for debate."

A pertinent example of the extreme risks involved in the former of those positions can be seen in THQ's launch this week of Homefront, a military FPS title on which the company appears, on some levels, to have "bet the farm". The firm's management would probably reject that characterisation - the stock market, which hammered THQ share prices in the wake of mixed reviews for the game, clearly begs to differ.

As it stands, it's tough to say whether Homefront is going to hit THQ's targets for the title or not. Despite the heavy emphasis which most publishers place on Metacritic scores, even determining developer bonuses based on certain score thresholds, the actual impact of critical reaction to a game on its sales remains a matter for debate. In spite of the weak scores, 375,000 copies shifted on day one, and the full-year sales target may yet be met.

However, there's little doubt but that THQ's top brass would sleep a lot easier if the game was cruising safely in the higher echelons of Metacritic - and so, it seems, would the firm's shareholders. Weak reviews may not have harmed day-one sales, but if they're a pointer to ongoing poor word of mouth, then the combination may sink the game's ongoing appeal at retail. Worse, a poor critical and public reception could ensure that the IP fizzles and dies after one game, where what a publisher like THQ really wants is a top-tier franchise.