Does Digital Content Slash A Developer's Profits?

Ubisoft, a video game developer and publisher, claims that digital content -- products that are available digitally -- is costing the company money. CEO, Yves Guillemot, spoke very highly regarding the future of digital content in the gaming industry, but also claimed that digital content is placing a burden on the company. Guillemot clarified that just because a game is popular, does not mean the game is profitable - a lesson to be learned by smaller developers.

Ubisoft, a video game developer and publisher, claims that digital content — products that are available digitally — is costing the company money. CEO, Yves Guillemot, spoke very highly regarding the future of digital content in the gaming industry, but also claimed that digital content is placing a burden on the company. Guillemot clarified that just because a game is popular, does not mean the game is profitable – a lesson to be learned by smaller developers.

Guillemot is on to something; however, I do not agree with him on his reasoning. Digital content, while being a culprit, is not the main perpetrator. Take a look at a company like Zynga for instance. According to AllFacebook.com, CityVille is their most popular game with 96.1 million monthly active users. Ubisoft’s top game, CSI: Crime City, which has 2.2 million monthly active users, is far behind CityVille. Is Zynga making more in revenue because they have more users? Yes. Does Zynga produce games that users want? Yes. Who does a better job at marketing? Zynga.

Guillemot is right about the fact that quality does not necessarily create profit. However, Ubisoft’s problem relies on the fact that people do not want to play their social games over their top competitors — plain in simple. Once the company begins to create games that users want to play, and eventually develop a better marketing campaign, Ubisoft will begin to see a better return on their investment.
CJ Arlotta covers the world of social gaming for development firms as well as the average consumer. Currently, he is accumulating more knowledge of the international gaming market to follow and understand what global developers may need to compete with already striving markets.