How the music industry got it wrong

FOUR ways the games industry is different

1. Marginal costs are higher

Making an album is cheap - stick a handful of artists in a studio with some instruments and an album emerges. The difficulty is finding the people with talent. Games development is expensive, with each game significantly more labour and resource-intensive than any album. This leads to arguments from publishers and developers that consumers have to pay more for games than music because they cost more to make. In reality, consumers set the price: if they don't want to pay, they won't. It's no use bleating to consumers about team sizes and the cost of rendering Lara Croft in a billion polygons. They decide whether they would rather spend forty quid on four DVDs, 40 tracks on iTunes or a single game. This makes responding to the fact that the consumer sets the price more challenging for us than for the music industry; it doesn't make it any less important.

2. Our back catalogue is worthless

This is slightly over-stated, as the pace of change of technological advancement is becoming less visible to the average consumer. However, we don't have the long-tail of high value content that sustains the music and film industries. This is beginning to change, as services like Metaboli and AWOMO help publishers generate revenue from older titles, and should be a real focus for all publishers as we move into an era where step-changes in technology no longer happen so frequently.

3. Digital distribution is challenged by the size of games

Music is, digitally speaking, small. An individual track, or even an album, is quick to download on a reasonable broadband connection. Compare that with games on multiple DVDs which can weigh in at over 10GB and could take a day or more to download. This inherent advantage, that game sizes are growing at the same pace as or faster than broadband speeds, is not a sustainable benefit, but it does give us some breathing space.

4 Developers need infrastructure

Not only is making a game more costly than making an album, but the technology and expertise that go into making a game needs to be built up over time. No one has yet created a triple-A title using the Hollywood model of assembling a crack team of freelancers, and this scenario may be impossible with current strategies. This puts pressure on developers and publishers, and is an inhibitor to embracing the environment where the consumer sets the price.