Open Letter to the Amusement Trade by The Stinger Report

Shaggy May 19, 2008 6

By Kevin Williams

Open Letter To Amusement Trade (19/05/08)

Reaction to Recent Media Coverage

The Situation

This open letter is being sent out to the trade regarding a disturbing situation which seems to be being ignored!

We have seen over the last 48-hours a slew of online features that have attempted to bury the Asian and North American amusement scene – literally dismissing the market and manipulating the facts of our market.

This all culminated from a Reuters news feature that seemed to announce the closure of the Japanese amusement sector: http://www.reuters.com/article/technologyNews/idUST33521320080518?feedType=RSS&feedName=technologyNews&pageNumber=2&virtualBrandChannel=0

Having waited for a reply from our trade in defense there seems to have been none and so below is the reply that we sent to Reuters (and CrunchGear who repeated the commentary and added a few new inaccuracies).

Reply to Feature

Dear CrunchGear,

There seems to be a hunger from some news services to attempt once and for all to bury amusement – if not physically, at least in the consumers eye. Having read the Reuters report on the Japanese arcade scene and its errors – I am now greeted with your feature – I think you will now see that copying the Reuter feature may have been a mistake!

I have tried to address the key errors in your report:
– The claim is that certain factories had closed “20%” of their amusement venue business – the truth is that Namco closed 41, while Sega closed 110 – and as both operations run over 500 sites in the main islands this is not 20% – or close?
– The out of date statement about the venues seemed a little confused. If we are talking about
Japan they are smoke free in the majority, and have been underling a major update of facilities – the Reuter piece though inaccurate had to mention the redevelopment of the Taito/Square arcade operation.
– A comment about the close of Japanese amusement copied from the Reuter piece missed out the reality of the profitability of arcade for many publishers, Taito/Square, Konami and even Sega saw increase in revenue from amusement – yes Sammy Sega saw a down turn on their Pachinko side – but Pachinko is a different division to their amusement.

Finally, I would recommend that there are a number of excellent sources for factual information on the amusement scene. I understand that a number of vested interest in the consumer game sector want to claim expertise in covering arcade gaming, but as you can see there is a lot more too the market than just jumping up and claiming it is dead!

The Reuter piece was written badly and was not the best source (foundation) to base opinion on. The news that Street Fighter IV is breaking arcade records in revenue – those records created only a matter of weeks earlier by Tekken 6 – speaks volumes of a strong upswing in amusement. However certain consumer parties are less than happy with the coverage arcade is getting on the web and seemed to attempt to discard arcade interest – I would recommend that you avoid these vested interest.

If you want the facts on the international amusement scene just drop us a mail!

Open Question

It is a shame that KWP has had to undertake this defense of our industry and supply the facts on our own – we personally have to wonder what the trades plan is to try and defend ourselves from the vested interests of the consumer media wanting to dismiss our industry (this will snow ball if no one else dose anything) – Can someone tell me what our industries media defense plan is, and will it be started quickly?

Thanks to Kevin for passing this along and doing his part to defend the industry. We’re here to do the same and my thoughts are after the post break.

I saw this Reuters article a day or two ago but I didn’t have the time to really comment on it but I noticed fairly quickly that painted it a fairly negative picture of the amusement scene in Japan. A number of factors were blamed including the Wii, high gas, etc. – the usual suspects. But I also noticed that they even blamed smoking inside arcades which made me pause for a moment. As it turns out, the report was filled with a number of errors and unfortunately this effort by major media will probably stick in the minds of some people who won’t look further into the issue. Of course the arcade industry hasn’t had much of a response either so we’re here to help those that will actually look beyond the terrible research that was put into this story.

We’ve been saying for a while now that the arcade industry needs to make some essential changes. One of those changes comes with marketing, which is something that we have talked about recently in the comments section of the Sega Private Show. Kevin forcefully stated some of the changes that need to take place, such as what steps are going to be made to stem the tide of bad news that is portrayed about the industry all the time in the media. Now recently I have noticed a couple of distributors working to get the word out on arcades even to the media, such as the Raw Thrills/Play Mechanix/Betson media events that have taken place recently; another distributor (BHMVending) has began posting videos of different arcade games to youtube which is another step in the right direction. But we need to go further than this – arcade development companies need to drop this ridiculous idea of not revealing anything about their games until right next to their release or afterwards. How does this apply to the current situation?

Console developers reveal their games a while before they are released to begin marketing the game to the players. This can create hype and it also assures those who will be their customers that there is something to look forward to. Do console developers worry about having their ideas stolen? Probably but in this age of quick information and the internet, gamers are generally smart enough to understand who came up with that idea first. Beyond that, lets say that you do come up with a new idea – maybe it doesn’t have to be revealed early on but should that delay the entire game from being revealed? In the console industry no and I fail to see how it makes since with arcade games. With the console games they’ll release bits and pieces of info at times and even if you do reveal some revolutionary feature early on, what will happen is that people will know that you did it first. And if it’s truly revolutionary it will take some time for the competition to catch up anyways.

The point is that while it’s fine and dandy to show product off to operators that will purchase your product, that is not as important in the long run as it is to the players. I know that this line of thinking is pushing against the current that the industry generally flows in but let’s face it – you need players visiting operator locations to keep them in business so that they will purchase more games. And players will not come out in large numbers if they believe that arcades are dead. They will not be so prone to believe the false reports from the media if they know about the many games that are being worked on and are anticipating those games to show up in a local arcade.

This all needs to happen if we ever want to see arcades grow beyond a simple niche. Marketing needs to improve all around to convince people that arcades are not dead and also to convince people to go out and play.


6 Comments »

  1. Molloy May 19, 2008 at 7:09 pm - Reply

    Fantastic piece of writing. About time someone stood up and said this. It’s an issue of marketing. Sega, Capcom and Konami are big companies. They have the money and resources to turn this situation around if they just decide it’s a priority. They’re failing the operators in a big way by just dumping games on them without informing the consumer.

    The constant doom-mongering is very tedious indeed, and frankly ridiculous when you take into account the earnings the more successful games have been managing.

  2. Shaggy May 19, 2008 at 8:26 pm - Reply

    Thanks Molloy, we appreciate the comments. We have run a number of editorials referring to the subject but this is probably the most forceful so far – and it probably won’t win us any friends in the industry but unfortunately it has to be pushed. When I read your comment it made me think of an analogy – what if the same thing happened in the console industry, where developers relied entirely on the distribution channels and the console makers to push their games and made no effort of their own to market the games to players. The industry would not be the same, even though it is a different ballpark. Players are players no matter what platform they play and frankly it baffles me how the arcade industry nearly acts like the player doesn’t exist, that operators somehow receive their money from magical spells or something.

    Relying solely on operators or distributors to push their games is a silly idea, these companies have a hard enough time to get the message out just about their business with limited budgets, much less focusing on single games. Of course development companies have their own budgets too but it is not that difficult to offer a sneak peek at upcoming games. I’ve had to beg for info on some games at times and I get very little even then, not enough to make a worthy post about it. If some people won’t even work with an arcade friendly site like us then it shows you how they’ll treat other media sources (I should mention that there are a few who have worked really well with the site and that is something we greatly appreciate and would like to see more of – we don’t mean to scare them off with talk like this so I hope they understand our intention here and we’re not biting the hand that feeds us – we just want to see the industry grow and get beyond the perception that it’s dead). I do applaud recent efforts by companies to revamp their websites and offer a better look at each game and hold media events about their games but the more that can be done, the better.

  3. editor May 19, 2008 at 11:16 pm - Reply

    I would like to thank all that have sent emails regarding the letter. If only our industry recognized the support for this sector.

    The Reuters feature is very worrying – such a obvious poor bit of journo-work and no one in our industry says zip! This work will now be used by every website as a reason to write a ‘arcade is dead’ feature!

  4. editor May 20, 2008 at 9:32 am - Reply

    Oh this is just peachy!

    I wake up this morning and we are now up to four web sites running the Reuters story as if gospel and also adding their own incorrect observations to boot!

    Why cant our trade stop this – or at least come out with a alternative view!

  5. NEo May 20, 2008 at 11:22 pm - Reply

    Arcades are NOT dead they are in the shadow of the “mighty” consoles.

  6. Street Fighter May 23, 2008 at 4:41 pm - Reply

    I have to say its really encoureging to read this as an arcade fan. I am as out of the loop on this as a lot of others.

    The game companies need to go back to having arcades be the power and conceptual examples to help properly feed into the console side. Reciprocity so to speak.

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