Only first-party video games matter

Sony's President of Worldwide Studios, Shuhei Yoshida had the opportunity to discuss his company's gaming division with ThreeSpeech.com recently and although he obviously needs to toe the company line and make sure he says the right thing, what he did say speaks volumes about the state of the gaming industry.

"My role is to run first-party development, and we are always exclusive," he told the publication. "Because, in this generation, it costs much more to develop one product, it's just natural for third-party publishers trying to recoup the investment from multiple platforms. I think that's pure economic pressure, pushing most of the third parties to move from some exclusive titles to more multi-platform titles. Because we know that is the trend, we, as a company, can invest in our first-party studios; in terms of exclusive titles, our role becomes more important."

With third-party developers selling titles for multiple platforms, first-party developers will need to step in and try to create games that matter to people and make them want a console. And although major games like MGS4 are exclusive, they're becoming a rarity and it's quickly becoming apparent that first-party titles are the only games that matter.

Now, at first glance, that may not make a ton of sense. How can first-party games be the only titles that matter when third-party titles usually top the sales charts? The answer is quite simple: differentiation.

In such a competitive environment, vendors have only two choices to sell more consoles: differentiate on product or differentiate on price. And considering the Playstation 3 and Xbox 360 are basically the same price -- only $50 separates the Xbox 360 Pro and the 40GB Playstation 3 -- Sony and Microsoft need to find a way to differentiate on product.

The only way to do that in an industry that's dominated by third-party titles on multiple platforms is by developing your own games for your own platform, meaning only first-party games matter to the future success of consoles.

As I've said here before, software is what sells consoles once the early adopters pick up hardware, and it's the library of games that entices people to pick up one platform or another. But if two consoles feature many of the same games and the same price with the same graphical prowess, the only attribute that could help a consumer choose one console over another is the quality and depth of first-party titles.

Surely some will say that an online component matters and other people will say that they have a preference for consoles based on how one game plays on a specific console, but I think that totally disregards the inertia of the video game industry itself.

As time goes by, we're quickly realizing that the video game industry is becoming derivative. We're being washed out by first-person shooters that don't break the mold and sports games that are barely updated each year. And as production costs continue to rise, we're seeing most games released on all major consoles. As this trend continues and more developers move to mutli-platform business models, first-parties have only one recourse: develop their own games that people actually want to play.

In an increasingly derivative gaming industry, first-parties need to find ways to differentiate consoles. Years ago, it was the name and library of exclusives, but today, the only way to differentiate the brand is to develop compelling first-party titles that coax people into choosing their particular console.

Sony has made the right move in pursuing its first-party development initiatives and Nintendo is way ahead in the space. Will Microsoft, the company that let Bungie go, follow suit?

It better.

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