As an analyst I sort through thousands of data points every day, with 99% of them showing trends that most would either consider the “obvious” or simply unimportant. However, that 1% of data, that some would call a statistical irregularity is why people like myself have jobs. It is that 1% that gives our clients a significant edge over the competition. When I came across the graph below something didn’t add up. If the distribution of revenue in the off-season months are equal then shouldn’t the release schedule be as well?
Note: The graph does indicate that off-season revenue is distributed relatively equally with deviations being attributed to release schedules and seasonal events such as holidays. The sales data has been normalized to remove the 4-5-4 calendar month. Also, September stands out as being excessively overcrowded, but we should keep in mind that many “holiday” releases attempt to get a lead on competitors by choosing a September release month.
Unfortunately, the distribution of release quantities and sales do not line-up, indicating inefficiency in the market; however, like most statistical anomalies there are reasons behind it. For this particular trend, the driving force may not be clearly visible at first until we separate the three months that have an excessive amount of the releases (March, June, and September), which by no coincidence are the last months a publisher can release a game for a financial quarter (quarters run Jan-Mar, April-June, etc). Essentially, what I believe is happening is that publishers may not be purposely planning to stack these three months. Maybe some games are planned for February, April, or July, but when a game’s production runs behind, publishers are simply not willing to delay a game outside a financial quarter. A delay outside the financial quarter will generally result in a series of events: investor conference calls, lowering of guided revenues/profits, a decrease in stock valuation, and finally an apprehensive feeling among investors as to the abilities of management to efficiently run the company.
Of course, I could be wrong and to be fair we should try to separate the release quantities between public companies with March, June, September, December financial quarters, and Non-Public companies while comparing that against what an evenly distributed release model would look like.
Nope, I was right and in fact the second graph only solidifies my original thesis that public companies are doing themselves a disservice and congesting the release calendar by trying to be “investor friendly.” Additionally, the non-public companies still show a bias towards March, June, and September; however, keep in mind that non-public companies still have investors and financial targets they must achieve and I do not doubt that most of these non-public companies adopt a December ending fiscal year (making March, June, and September fiscal quarter ending months).
4 Comments
March 2, 2010
Wow. Great article. Now that publishers can see this (I hope they read this article), I wonder if that will change?
What is interesting is the converse of your argument. If it is not a coincidence that publishers stack the March/June/Sept months, than the same can be said about Jan-April-July. Those months have the fewest releases. If i was a developer/publisher, I would start stacking the July month.
March 2, 2010
Yeah, Jesse really dug into the data on this one, good stuff.
March 2, 2010
Public companies may see lower sales to gamers at retail if they squeeze titles in to make the quarter, but they can book the revenue from sales to retailers immediately, thus making their quarterly revenue numbers look better. They may be shooting themselves in the foot with regard to the longterm health of their franchises, but when it comes to stock price vs. longterm strategy in my experience publishers are more likely to worry about the stock price.
March 2, 2010
Agreed. This is a pretty awesome analysis. Certainly explains why I plan on going broke this month. And it is not just the money. It's the time. Battlefield, Final Fantasy, Pokemon. Three games that offer +40 hr game play all being released within weeks of each other.