Budget class
Budget titles are in a class of their own as the classics ofyesteryear appear once more in the bargain bin. But the budget titles havegone upmarket, with a style all their own, says Danny Bradbury.
Old computer games never die - they just get republished as budget titles. The market for classic CD titles from yesteryear is booming, which is especially good news for the vendor community. Having already recouped their development and marketing costs on AAA titles, developers and publishers often attempt to squeeze a few last drops of profit out of the games by republishing them as jewel case titles which can be sold cheaply for low margins.
The budget market has changed the cheap and nasty image that it had in the mid- to late-80s. This has been driven by an increasing number of companies investing in creating brand equity for their budget ranges with well thought-out packaging and comprehensive manuals.
The latest entrant to the budget games market is Codemasters, which launched its Hot Stuff label this month, re-releasing Micro Machines 2 Special Edition and Psycho Pinball at u12.99 each. Hot Stuff is not just about value but also style, says Codemasters, hence the use of highly distinctive packaging.
A year ago, Ocean launched Regenerator, its jewel case range with dayglo CD cases, while Virgin has now sold over a million games through its budget White Label range. Electronic Arts has been pumping out premium titles from last year under its CD-ROM Classics label and now claims to be market leader.
Assuming that is number one, Microprose occupies the number two slot with its recently relaunched Power Plus label, which includes such hits of the not-too-distant past as UFO, Civilization, Virtual Carts and Colonization.
Interplay and Acclaim have clubbed together to launch their new budget label, called Black Market, while Psygonosis is planning its own low-cost life-extending range next year with titles like Wipeout.
Dorian Bloch, analyst at Chart-Trak, estimates that up to a fifth of the games currently sold are budget titles. "The success of the budget market has been based on the decent titles that have been republished," he explains. Whereas in the last decade, compilations of poor quality games were frequently sold in the budget market, these days the titles that you will find for u12.99 are often those which sold for u40 and grabbed the headlines six months or a year ago.
"On CD-ROM Classics for example, you have Theme Park, Magic Carpet, flight simulators and Syndicate as well. These are all oldish CD-ROM titles but they were best sellers, so the attraction is for people who never bought them the first time round. It is an impulse purchase," says Bloch. It is impossible to buy all the quality games in the PC or console markets when they are released unless you are very rich, which means that there will always be a large base of customers willing to catch titles the second time around.
The margins on budget titles are razor-sharp, which many retailers might find discouraging. Strangely, independent resellers such as Richard Gandy, managing director of Computer Cavern, find these low margins very attractive.
Gandy contends that the large chain retailers often get heavy discounts on the first-run games that are not offered to smaller, independent retailers.
Developers offer these prices to get the guarantee of large volume sales, he says, which makes it impossible for independent retailers to compete.
As a result, Computer Cavern only stocks budget computer games because it is impossible for vendors to offer widely differing discounts on them.
They do not have the margin to play with, he explains.
"If the manufacturers will unfairly supply the multiples then they can say goodbye to the independent marketplace," warns Gandy. "They will soon realise that they will lose money because they are not making a profit at that level. They are not going to sell the numbers, and people will soon realise that they can buy a good budget title for u9.99. They don't have to go out and buy a u40 game." Significantly, he says that independents often sell Sony Playstation games because Sony will not offer the favourable discounts that the multiples are used to.
Martin Briggs, managing director of retailer MCB, agrees, and also mentions some other problems associated with selling games. He says that the shelf-life of titles is notoriously short, which becomes dangerous when publishers refuse to offer games on a sale-or-return basis.
"Multiples are prone to selling titles prior to the release date and they are also going to discount a big title from day one, therefore the feeling within independents as a whole is that they are not bothering with market leading titles," he warns. "That has been stated with a number of independents. In addition, the price of up-to-date games is horrendous for children that want every game as it comes out." The fact that the market is so price-sensitive makes the multiples' price advantage worse.
Gandy adds that the budget titles are ideal territory for the independent retailers because the multiples often do not find them profitable enough to sell. "The multiples only have so much shelfspace, and so they won't put a u10 product on their shelves when they can put a u50 product there." he says.
One big driver for the market is the lower processing power needed for older games, according to Bloch. He explains that the processing power requirements of many top-range computer games have been moving up in tandem with the entry-level processor specification in the PC market - and this is moving very rapidly. "Processor power is supposed to double twice every year as a rule of thumb. The entry-level now is what people sell these days - they don't sell anything below P75 and P90 machines as the current standard. A few months after that we will be up with P133 computers and then P6 machines, but you know that six months later it will be out of date," he says.
In spite of the conservative estimates on games packaging, Bloch confirms that many of the latest games need very high power machines to keep the players' interest. "Although most games still say that the minimum specification is a 486DX/2 with 8Mb RAM, you can try playing them but you won't have much fun. Some titles say that the minimum requirement is a Pentium, and almost all titles need 8Mb RAM and a few will need 16Mb," he says. "If some chap hasn't upgraded then he may not want to buy a new title that is all singing and all dancing but which won't run on his machine, but he will buy some of the republished stuff."
Doug Johns, PR manager for Virgin brands, explains that even people who have upgraded their PCs can be attracted to budget games. "One journalist commented that the budget stuff is better now than when it was released.
People now have machines that run it better," he says.
It is not clear how the customer base for budget CD titles breaks down, according to Elizabeth Egan at Electronic Arts. "We are still trying to discover if our usual consumers will buy a hit title and pick up a classic as well, or if budget customers are largely people that have just bought a new PC and will try Theme Park for u9.99 because they're not really a gamer," she says, adding that it is likely to be a mixture of both.
One thing is clear - if you have just spent u2,000 on a new PC, you are unlikely to want to spend lots of money on just one game. Your collection is likely to be small so you will be more inclined to purchase a number of cheaper games at once, according to Stephen Hey, PR manager at Ocean.
"We have done a lot of research into the budget market and we identified several different kinds of people who buy these titles. One of the categories that came out in our research are the people who aren't hardcore gamers.
They are generally a bit older and often male. They are people who would get most of their games from coverdisks, to the extent where their gaming history was comprised of all these demos," he says. "They would wait for anything they wanted until it came out on a budget and then they would purchase it."
Hey adds that the age of the game is often not relevant, and that nostalgia for excellent gameplay often overrides the desire to have a title that was first released as little as six months before. "It's not so dependent now on how old the game is. If you have a game which is an all-time classic like Dune II or Cannon Fodder II then that is more important than a lesser title that is far younger," he explains.
In spite of this, many of the games that are currently available or are about to be launched are not more than a year old. At the time of writing, the White Label from Virgin was due to carry Dark Forces - a game which was only released for the first time last November.
Bloch explains that while games such as Dark Forces can fall from grace quickly in the first-run market because of the large number of competing Doom-type titles around, these classic gameplay titles can stay ripe for the first-run market for a long time. "We have things in the current weekly chart that have been there for the past 50 weeks, for example, Championship Manager 2 from Domark, which is almost a year old and which has never really been out of the chart. We also have Civilisation 2 from Microprose, which is 16 weeks old, that has never been out of the chart either," he explains.
Computer Cavern's Gandy adds that the secret of good budget retailing is to sell the classic gameplay titles. "We know what will sell. You can still sell Lemmings in any form, along with Theme Park and the various Sim Cities for example. If you pick strong titles like that you can keep them going for years. You have to use your experience," he says, adding that part of the trick is to avoid bad games that the multiple will not take.
The distinction between budget CD titles and first-run games is not enough, however; even the budget market itself is starting to subdivide. Ocean's Regenerator range is a prime example of this subdivision. Launched last November and offering games at the u4.99 mark, it was designed to complement the Hit Squad range, a six-year-old budget sector veteran which offers games at u9.99-u12.99.
The Hit Squad range offers games in Sierra (full-size) cases, while the Regenerator range offers games in a dayglo-coloured CD case. The Regenerator range, which grows by a couple of titles per month, offers mainly adventure and puzzle games because action games age too quickly. "Generally, Regenerator appeals to a younger audience," Gandy explains. "They buy the games from their pocket money or they are older and buy them as gifts or stocking fillers. The Hit Squad purchaser on the other hand does not make purchases on such an impulse."
Even with the Regenerator range, the company was trying to establish a brand image, although with budget titles there is not as much of an advertising spend. Hey explains that the Regenerator range will enable it to get back into non-computer retail outlets such as garages, which the Hit Squad range used to target when it included cassettes for the older 8bit machines.
The fact that even the very cheap budget ranges such as Regenerator are being given a market image emphasises the fact that the bargain bucket image of the market is changing.
Electronic Arts' Egan encourages retailers to capitalise on this by setting aside specific budget areas for customers to browse through.
"The budget titles need a separate section in the store and we definitely need to have them as a range. It is a really strong look and they must be ranged together so that it is clear that they are a budget section.
That bargain bucket attitude is just starting to change," he says.
The term "Classic" can no longer be equated with old, tired games. There is a surprising amount of code which is relatively new and which people were raving over last autumn. The key trick in retailing this is to persuade potentially cynical customers that they really are getting something for nothing, or at least for a lot less than the original price. Retailers must choose perennial titles that will last on the shelves, while ensuring that the vendor puts enough muscle behind the budget brand to give it a quality feel.