Posts Tagged‘economics’

The Rationalization of Consolization.

Any long time gamer (I’m talking about 10+ years here folks) will remember the time when the PC was the platform for all games to shoot for. It’s not that consoles weren’t good, by many standards the original Xbox and PS2 were quite capable machines at the time, it was more that PCs gave you the best experience and the limited input options for consoles made many games simply untenable on the platform. The next generation of consoles provided something different however, they were more than powerful enough to give a modern PC a run for its money at the time and the games on them were definitely a step up from their predecessors. What has followed is a massive boom in the world of console gaming and subsequently a decline in the world of PC gaming.

This is not to say that PC gaming is dead and buried, far from it. Whilst consoles might have taken the lion’s share of the gaming market there are still a great many titles that make their way onto the PC platform. For the most part however it is obvious that these games were developed with the console platform in mind first with paradigms that don’t necessarily make sense on the PC making their way into the final release. This process has become known as the consolization of PC gaming and it has been met with a lot of criticism by the PC gaming community. Whilst I don’t like what this means for PC gaming I do understand the reasons behind the shift away from the PC as being the primary platform.

Primarily it comes down to simple economics. Since the PC was the platform for so long many seem to think that it’s by far the biggest market. The truth is unfortunately that for the vast majority of the market the console reigns supreme with PCs making up a very small percentage of it. Take for instance one of the biggest recent retail releases, Call of Duty: Black Ops. Total units moved for this game in November last year were in the order of 8.4 million with only 400,000 of them being on the Wii, DS and PC platforms. Putting that in perspective that means that the PC release accounted for less than 5% of the total sales volume and data from previous years shows that this number is on the decline.

A single data point however isn’t enough to prove the theory and no one will argue that the Call of Duty series is a bit of an outlier in itself. However if you take a look at the sales charts for each platform it’s quite clear that PCs really are a niche market when it comes to games totaling around 3% of the total units moved. Of course 3% of a multi-billion dollar a year market is still a significant chunk of change but it’s comparable to say the difference in market share between Windows and Linux (and should provide some insight into why nearly no one bothers with developing games for Linux).

Just because PC gaming is becoming a niche market doesn’t mean it’s going to disappear anytime soon however. There are still many types of games, real time strategy being one of them, that just simply don’t work well in the console world no matter how much tweaking you do to the core game play. It does however mean that consolized games should be the expected norm for PC gamers and whilst that might mean a sub par experience it does have the added benefit of extending the life of our systems significantly, which I know is a small consolation. Still unless the PC somehow manages to draw crowds the size of any of the console platforms those of us who choose the PC as our platform will have to make do with what we’re given as the game developers of the world must give the crowd what they want.

Salaries, Skill Shortages and Market Economics.

Over the weekend I was fortunate enough to be involved in a piece for the Canberra Times on salaries in the ACT, thanks wholly to my journalist friend who set up the connection.  Whilst the online version doesn’t show me in it (you’ll have to buy the paper for that!) the main thrust of it was that, for men at least, the highest paying industry you can be in is ICT. Whilst my part was merely to put the human element into the story it got me thinking about my career to date and why the IT industry in Canberra has been so lucrative over the past half decade or so. As far as I can tell it’s a local phenomena to Canberra thanks to a few obvious factors.

I’ve always been interested in computers but when it came time to choose my career I wasn’t really looking to end up where I am now. By training I’m technically an engineer and by rights I should’ve been seeking jobs in embedded systems or at the very least a software engineer role. It wasn’t for lack of trying however, after languishing on a help desk for a year and a half I finally struck out at my first programming job, applying for a junior developer position at the Australian Treasury Department. Funnily enough I actually got that role although instead of taking it I foolishly used it as leverage to get a similar job at my current work place. That of course was an unmitigated disaster as I was put into a team that didn’t want nor need me and less than 6 months later I jumped ship into my first system administrator role.

After making that jump the prospect of taking a massive pay cut to be an actual engineer didn’t look so appealing.

In fact the next few years saw me go on a roller coaster ride of several jobs in the IT industry. It wasn’t because I couldn’t hold a job down or I got fired for incompetence, more it was that I found people were more willing to pay market rates for new hires than they were to promote someone internally. The reason for this was simple, there’s has always been a shortage of skilled IT people in the Canberra area. The reasons behind that are twofold: all government departments have their head offices (and therefore the majority of their IT infrastructure) in Canberra and the population here is just over 350,000. This means it’s a seller’s market here when you’ve got skills in IT and it has been for the past 5 years.

Realistically it’s just another example simple economic principles in action. There’s a relatively fixed supply of skilled IT workers in Canberra and in order to increase that supply they have to make it attractive for people to consider making the move. The first, and usually primary, motivator for most people is base salary and when you’re competing against private industry in other states the wages have to be comparable for people to consider making the move. Over the years this quickly put the average IT wage well out of the reach of normal APS brackets and thus we saw the birth of the contractor industry in Canberra in order to keep the level of skills required in the region. There was of course the dark times when the Gershon Report was in full swing which kept the IT market down in Canberra for a short period of time but it rebounded with renewed gusto the second people realised work wasn’t getting done.

However I strongly believe that this is a local maxima, focused tightly around the Canberra region. Put simply the factors involved in driving IT salaries up just don’t exist in the same concentration outside Canberra as every other major city has a higher population and much smaller government presence. This doesn’t mean IT isn’t worth anywhere in Australia outside of Canberra, far from it. IT skills are amongst some of the most portable talents to have as nearly every industry in the world relies on IT for critical business functions. If you’re really trying to make the most of the IT industry in Australia (and you’re not an entrepreneur) then you really can’t go past Canberra, especially as a starting point.