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Thursday, September 16, 2010

'Halo: Reach' Earns $200 Million, Shows Console Games Are Still Big Business

Posted By on Thu, Sep 16, 2010 at 11:59 AM

click to enlarge Still printing money, it seems
  • Still printing money, it seems
One of the more vivid side discussions provoked by our story last week on social-gaming company Zynga's allegedly predatory business practices was about the merits of Zynga-style games. The company specializes in Facebook apps that entice users to compulsively build up fake farms, restaurants, etc., sometimes spending real money. That's a far cry from traditional "console" videogames of the kind played on a PlayStation or Xbox

My observation that Zynga's games appear "cretinous" beside sophisticated and richly designed console games prompted one tech-industry blogger to tag me as "snobbish, arrogant, and elitist." Other social-gaming mavens simply insisted in our comments section that console games are going the way of symphony orchestra concerts -- beautiful and inaccessible, with little commercial relevance.

Then 'Halo: Reach' came out this week. This shoot-em-up console game -- the latest in a wildly popular series that tells the story of humankind's war with an alliance of alien races -- earned $200 million in its first 24 hours on the market. Most of we ordinary mortals would sure like to sell something that makes that much money in a day. So would social-gaming companies: By some estimates, this single console game immediately brought in two-thirds as much revenue as Zynga made with all its games in the year 2009.

To put this in another perspective, Electronic Arts acquired Playfish, one of the "Big Three" social-gaming companies, for about $400 million last November. A few days of proceeds from one hit console videogame could be enough to buy an entire social-gaming company.

There's more to the story, of course. Console games take much longer and cost exponentially more to create than the types of simple applications that make Zynga, Playfish, and their ilk so much money on Facebook. Social gaming remains a rare bright spot, in financial terms, in the landscape of Silicon Valley. But if you needed a reason to believe that intricately crafted, artistically rendered videogames can still hold their own in the marketplace -- well, here's 200 million of them.

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Peter Jamison

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