Gaming industry's business model "does not work"
updated 02:05 pm EDT, Fri August 11, 2006
Business models flawed
LucasArts president Jim Ward says that in his view, the growth of the game industry has been crippled becuase of "a business model that does not work. This industry has been flat for the past six years; we've been selling games to the same people. Our revenue model is based on one shot at retail - we have no back-end revenue streams like a movie might in terms of DVD, TV, that type of thing." He sees the solution as being services like Xbox Live, which generate extra revenue through subscriptions and small transactions. But do we really need to commercialize every aspect of gaming in order to turn a profit, or is Ward being greedy? Regarding the PS3 he says, "I hope that price point [$500-600] won't be prohibitive." It sounds like he would rather just shift the time and place of the expense.
