Xbox Live Arcade hasn't peaked - analysts

Has Xbox Live Arcade really peaked, as World of Goo creator Ron Carmel yesterday argued? No, analysts have told Eurogamer.

"But Microsoft should take a look at Ron Carmel's piece," declared Billy Pidgeon of M2 Research, "which eloquently makes the case (and backs it up with data) that XBLA has peaked for a specific group of independent developers who are responsible for high quality games that outsell the average XBLA game.

"Sony is acquiring more unique content for PSN, and in many cases it's exclusive content, which will cost Sony more but will clearly differentiate their online games store from XBLA and other competition."

"In terms of digital games delivered through a home console, Microsoft will continue to be the market leaders," stated Jesse Divnich of EEDAR.

"I am not disagreeing with Mr. Carmel, I believe some of his points are valid and any digital service provider has its own restrictions and hurdles. Not every game is the right fit for every service.

"We certainly are seeing some fracturing among developers, and Xbox Live and PSN are no longer the only option for game distribution."

"That doesn't sound right to me," said Michael Pachter of Wedbush Morgan, responding to Carmel's claim. "If anything, there are more titles than ever, but we haven't had a Braid or Limbo so far this year.

"As the 360 price comes down and the installed base continues to grow, there should be a significantly larger addressable market for XBLA games, so I think it continues to grow."

Ron Carmel surveyed 200 independent developers. His results, which he admitted weren't sacrosanct, showed dwindling support for Xbox Live Arcade. Part of this is due to laborious XBLA constraints. The other part can be attributed to the rise of PC, Mac, iOS and Android gaming. Billy Pidgeon said that "viable alternative marketplaces" are "good news for developers and gamers both". Whereas Xbox Live Arcade and PSN are "predictable", he said, other markets can be "risky".

"Indie games are like indie songs: most of them suck, but the ones that don't are unique and deserve to be bought, played, talked about, discovered and awarded."

Billy Pidgeon, analyst, M2 Research

Divnich said the investment in social and mobile gaming "is not necessarily at the cost of XBLA and PSN titles". There's greater flexibility there, but "the recipe for success is not as established".

"Of all the online games markets," added Pidgeon, "I think Steam may have the best offering for gaming enthusiasts so far. The PC is the ideal platform with the most reach, Steam's timed specials help games sell more but hedge price erosion, and it's a great experience for gamers who use it.

"Nintendo's online shops are getting better, but still have a long way to go. The App Store has got great reach, but the best games get lost in the crap and rapid price erosion is a given. Android download stores are the worst, with all the downsides of the App Store and none of the upside due to fragmentation."

Apple has made iOS an easy platform to develop and publish for. One of Ron Carmel's suggestions was for Microsoft to make every Xbox 360 a dev kit, and relax the submission process so that more content can get through. Xbox Live Indie Games already does this, to a degree.

"The Xbox Live Indie Games market seems a waste of a good opportunity," Pidgeon went on to say. "What should be a showcase for indie games is more like a swap meet.

"It's worthwhile to let anybody make a game with XNA, but there should be a 'top shelf' for the best independent games. Indie games are like indie songs: most of them suck, but the ones that don't are unique and deserve to be bought, played, talked about, discovered and awarded."

Nicholas Lovell from Gamesbrief, in a lengthy dissection of Ron Carmel's piece, accused Microsoft of "artificially trying to restrict consumers to a limited number of choices, similar to a retail store". Whereas Carmel had hope Microsoft could turn it around, Lovell isn't so sure.

"Ron is relatively upbeat about the future, if Microsoft adopts some of his ten-point plan. I am less so," Lovell wrote. "I think that the company is stuck trying to recreate the limitations of the physical distribution market, rather than embracing the opportunities created by the digital market.

"I was going to say that I hope that I am wrong, but I'm not sure that's entirely true. The sooner the world becomes more open, the better."