At London Business School’s “Management 2.0” conference last night, I detected more than a hint of phrase-fatigue. The scrap to call the latest technological trend, label it, and thereby bask eternally in the glow of its subsequent success, has grown ever more competitive by the progression of the trends themselves. The concept of Web 2.0, for example, couldn’t have been spread more effectively by any other means than Web 2.0 technology. The speed of communication is now so frighteningly quick that giving these buzzwords oxygen immediately legitimises them.
These cute catchphrases are a business school’s meal ticket. They provide the professors with a catch-all hood for their disjointed research (and once it is adopted, the title of their next book) and offer the schools an opportunity to differentiate in a crowded market. “Management 2.0” doesn’t belong to London Business School (we can thank Harvard, among others, for that), but last night’s impressive turn-out spoke volumes, if not for the love of the latest buzzword, then at least for LBS’s progress in achieving its mission to become “the world’s pre-eminent business school”. Well, that’s what it said on the plaque in reception, anyway.
Up on stage, Julian Birkinshaw introduced companies that LBS considers to be pre-eminent in their application of management 2.0. The first was by far the most interesting. TopCoder is a platform for competitive software development. Its “employees” compete online to code software solutions, which are then licensed to third parties. Essentially the company is a huge, virtual community of 140,000 developers in 200 different countries, all with different programming skills. TopCoder merely provides a platform to organise the commercialisation of those skills.
The beauty of the model lies in its appreciation of the Generation Y developer community. However flexible their working habits, young coders still require a dependable structure. They also want the opportunity to work on larger projects without having to pitch their work to blue chip clients. They are rewarded financially, out of royalties, and through the respect of their peers—often a greater motivation than the mighty dollar. The loose controlling structure that sits above this platform requires new thinking—a different style of leadership, which understands that knowledge can come from anywhere in an organisation: management 2.0.
Thursday 29 January 2009
Friday 23 January 2009
The shareholder value argument
There isn’t as much business support for carbon reduction as you might think. Of course, plenty of larger companies talk a good game: a recognised CSR policy is useful for attracting Generation Y employees, if nothing else. But the Director magazine postbag provides a useful barometer of business frustration: we receive scores of letters for every cleantech entrepreneur we feature — most accusing us of environmental bias. “Greenwash”, scream the cynics. Climate change is a smokescreen for tax rises.
I was more than a little surprised to hear Sir Rocco Forte lapse into a greenwash rant during an interview at the tail end of last year. On reflection, I found his indifference to the commonly held, PC view of things, slightly refreshing: it’s not often that you catch the established business elite so happy to go against the grain. But on the whole it felt like a naive, poorly-researched position for such an accomplished businessman.
At least Sir Rocco avoided the “shareholder value” argument. The thinking goes like this: a director’s legal duty to maximise shareholder value is in direct conflict with an expensive CSR strategy. Any attempt to go green costs money (the costs of administration often outweigh any energy savings) automatically reducing shareholder value. How does a company geared towards maximising profits for its investors suddenly gain a conscience without losing sight of its legal obligation?
Theo Vermaelen, professor of finance at INSEAD, answers this conundrum easily enough:
“Shareholder value is calculated by taking revenues and then subtracting labour costs, executive compensation, interest and taxes. This residual cash flow incorporates the interests of all stakeholders, not simply the shareholder.”
Vermaelen also says that any company attempting to raise equity without announcing a later intention to implement social policies is “unethical”. Implicit in this is the assumption that the only thing investors care about is a financial return. Maybe they do. Vermaelen also clarifies that “maximising shareholder value is not the same thing as maximising short-term profits”. But his support of image over action feels disturbingly corporate:
“Obviously if CSR policies are simply PR or marketing exercises then obviously they are not inconsistent with value maximisation or unethical. But it is up to the company to prove that this marketing strategy works.”
Or how about we forget the gloss? How about we make a change for the sake of change? Last month I met Gavin Starks, founder of AMEE, a carbon calculation company. His goal, with apologies to those of you who get headaches about this sort of thing, is to measure the carbon footprint of the earth (as in, everything: every person, company, activity — the lot). His response to the problem of CSR conflicting with shareholder value is simple:
“I think you have to look at what value means and what time frame. Are we looking to provide the greatest return in the next 12 months, or the next 10 or 20 years? Forum for the Future mapped out various scenarios for the future of humanity. Most of those scenarios were war based, [as a result of] future scarcity. That becomes part of shareholder value.”
I’ll post a link to the AMEE story as soon as we publish it.
I was more than a little surprised to hear Sir Rocco Forte lapse into a greenwash rant during an interview at the tail end of last year. On reflection, I found his indifference to the commonly held, PC view of things, slightly refreshing: it’s not often that you catch the established business elite so happy to go against the grain. But on the whole it felt like a naive, poorly-researched position for such an accomplished businessman.
At least Sir Rocco avoided the “shareholder value” argument. The thinking goes like this: a director’s legal duty to maximise shareholder value is in direct conflict with an expensive CSR strategy. Any attempt to go green costs money (the costs of administration often outweigh any energy savings) automatically reducing shareholder value. How does a company geared towards maximising profits for its investors suddenly gain a conscience without losing sight of its legal obligation?
Theo Vermaelen, professor of finance at INSEAD, answers this conundrum easily enough:
“Shareholder value is calculated by taking revenues and then subtracting labour costs, executive compensation, interest and taxes. This residual cash flow incorporates the interests of all stakeholders, not simply the shareholder.”
Vermaelen also says that any company attempting to raise equity without announcing a later intention to implement social policies is “unethical”. Implicit in this is the assumption that the only thing investors care about is a financial return. Maybe they do. Vermaelen also clarifies that “maximising shareholder value is not the same thing as maximising short-term profits”. But his support of image over action feels disturbingly corporate:
“Obviously if CSR policies are simply PR or marketing exercises then obviously they are not inconsistent with value maximisation or unethical. But it is up to the company to prove that this marketing strategy works.”
Or how about we forget the gloss? How about we make a change for the sake of change? Last month I met Gavin Starks, founder of AMEE, a carbon calculation company. His goal, with apologies to those of you who get headaches about this sort of thing, is to measure the carbon footprint of the earth (as in, everything: every person, company, activity — the lot). His response to the problem of CSR conflicting with shareholder value is simple:
“I think you have to look at what value means and what time frame. Are we looking to provide the greatest return in the next 12 months, or the next 10 or 20 years? Forum for the Future mapped out various scenarios for the future of humanity. Most of those scenarios were war based, [as a result of] future scarcity. That becomes part of shareholder value.”
I’ll post a link to the AMEE story as soon as we publish it.
Wednesday 21 January 2009
Picture distortion
Tough talk from the Telegraph this morning. Tough — and alarmist. In fact, business editor Ambrose Evans-Pritchard’s comment piece bordered on irresponsible. There is a “real risk”, he said, of the UK defaulting on its national debt for the first time “since the Middle Ages”. His breathless prose covered the “reckless” City, the “fiscal incontinence” of Gordon Brown and the “pitiful regulation” of the UK housing market. Here’s a bigger chunk:
“If the Government is forced to nationalise RBS and perhaps Barclays with their vast exposure in dollars, euros, and yen, it risks being submerged. It is one thing for a sovereign state to let its national debt jump in a crisis — or a war — perhaps even to 100pc of GDP. It is another to take on foreign debts on such a scale with no reserves.”
You can understand Jim Rogers and George Soros’s need to talk the pound down, both doubtless have a vested interest in its demise, but AEP is, as far as we know, a disinterested party. The UK's foreign currency reserves stand at $61 billion. The combined foreign currency liabilities of those troubled banks are $4.4 trillion. “This is a mismatch indeed,” according to Paul Amery at Index Universe. But there is hyperbole at work here. Our debt rating is still measured in triple A’s, for now at least. And the bond markets are still buoyant, albeit for the admittedly sobering reason that aside from piling into expensive gold, or sticking huge bundles of cash under your bed, there really are few safe alternatives.
AEP talks about the unsustainable level of national debt, but the bank bail-outs heavily distort the picture. Remove those liabilities and we’re almost back in prudent territory. Our national debt is roughly a quarter of Japan’s; less than half that of Italy. Those banks haven’t gone bust, they’ve been part-nationalised. Nobody knows how much of their debt will turn out to be toxic, least of all the Telegraph’s business editor.
It’s easy to politicise in a crisis. Even easier when the numbers are so mind-bogglingly huge. But however much attention you give to Brown’s bank bailout (and it deserves as much spotlight as we can possibly give it) bear in mind that on this alone, the government had no other choice — at least no other palatable choice. With the markets as touchy as they are, simply talking up the possibility of a default gives the idea credibility — a very bad thing when you’re trying to maintain interest in UK government stocks. That’s not the responsibility of the media. But it’s a good idea to leave hyperbole to the Opposition.
Who knows what’s eating AEP. Maybe he got more hits than Peston today.
“If the Government is forced to nationalise RBS and perhaps Barclays with their vast exposure in dollars, euros, and yen, it risks being submerged. It is one thing for a sovereign state to let its national debt jump in a crisis — or a war — perhaps even to 100pc of GDP. It is another to take on foreign debts on such a scale with no reserves.”
You can understand Jim Rogers and George Soros’s need to talk the pound down, both doubtless have a vested interest in its demise, but AEP is, as far as we know, a disinterested party. The UK's foreign currency reserves stand at $61 billion. The combined foreign currency liabilities of those troubled banks are $4.4 trillion. “This is a mismatch indeed,” according to Paul Amery at Index Universe. But there is hyperbole at work here. Our debt rating is still measured in triple A’s, for now at least. And the bond markets are still buoyant, albeit for the admittedly sobering reason that aside from piling into expensive gold, or sticking huge bundles of cash under your bed, there really are few safe alternatives.
AEP talks about the unsustainable level of national debt, but the bank bail-outs heavily distort the picture. Remove those liabilities and we’re almost back in prudent territory. Our national debt is roughly a quarter of Japan’s; less than half that of Italy. Those banks haven’t gone bust, they’ve been part-nationalised. Nobody knows how much of their debt will turn out to be toxic, least of all the Telegraph’s business editor.
It’s easy to politicise in a crisis. Even easier when the numbers are so mind-bogglingly huge. But however much attention you give to Brown’s bank bailout (and it deserves as much spotlight as we can possibly give it) bear in mind that on this alone, the government had no other choice — at least no other palatable choice. With the markets as touchy as they are, simply talking up the possibility of a default gives the idea credibility — a very bad thing when you’re trying to maintain interest in UK government stocks. That’s not the responsibility of the media. But it’s a good idea to leave hyperbole to the Opposition.
Who knows what’s eating AEP. Maybe he got more hits than Peston today.
Monday 19 January 2009
Darwin's lemmings
Behavioural scientists attribute the global financial meltdown to our herding instincts. Much like our primate ancestors, humans tend to form groups to tackle adversity — the phrase “safety in numbers” is drawn directly from our tendency to trust larger numbers of people, even if our instincts tell us to go against the grain. It's a cute paradox. We yearn for a competitive advantage, strive all our lives for knowledge, yet doubt our own opinions if they disagree with those of our peers. And so, despite incandescent logic burning in the back of the investor’s mind, schemes such as Bernard Madoff’s continue to wreak havoc. Double-digit returns, while countless other funds struggled with huge losses, certainly looked suspicious, but our hardwired inclination to follow the herd proved the greater draw.
And if all goes awry, there is plenty of solace in group-failure, says Paul Seabright.
"When the maths gets too tough we seek reassurance from the powerful groups to which we belong. If it is okay to them that is fine by us; the group will protect us if things go wrong. We have to trust someone: modern life would collapse if we did everything alone. So we trust those who seem most like us, which means we trust the folks they trust, and so on in another long chain that stretches our strategic reasoning capacities to the limit.
The big surprise of the last three months to economists has been that professional investors behave with as much of a group instinct as retail investors. But it would not have surprised Darwin: professional investors are just another primate population. If you want to change their behaviour you have to change the way it feeds back not just into their pay packets, but into the status competition and coalition formation in their chosen peer-group."
Speaking of Darwin, the coming celebration of his bicentenary will no doubt spur the age-old efforts to link his theories to the modern economic world. What would Darwin have made of modern capitalism — the global march of the biggest and baddest corporate monsters? Such a question misinterprets Darwin’s intention. His theory was indeed based on “survival of the fittest”, but to be “fit” did not necessarily imply size or power, it concerned dominance of the species “most responsive to change”. As Simon Calukin notes in the Guardian,
"The simplistic "might is right" case has been blown apart by the force of events. However it originated, the credit crunch is the meteorite that is causing the mass extinction of what now can be seen as financial dinosaurs. Suddenly the once mighty are so no longer — in the new credit-starved world, investment banks are extinct, by the end of the year most hedge funds will have gone out of business, and even Russian oligarchs are finding food hard to come by."
If Darwin is to be considered truly prescient, business success in the next decade will be determined by flexibility, not size.
And if all goes awry, there is plenty of solace in group-failure, says Paul Seabright.
"When the maths gets too tough we seek reassurance from the powerful groups to which we belong. If it is okay to them that is fine by us; the group will protect us if things go wrong. We have to trust someone: modern life would collapse if we did everything alone. So we trust those who seem most like us, which means we trust the folks they trust, and so on in another long chain that stretches our strategic reasoning capacities to the limit.
The big surprise of the last three months to economists has been that professional investors behave with as much of a group instinct as retail investors. But it would not have surprised Darwin: professional investors are just another primate population. If you want to change their behaviour you have to change the way it feeds back not just into their pay packets, but into the status competition and coalition formation in their chosen peer-group."
Speaking of Darwin, the coming celebration of his bicentenary will no doubt spur the age-old efforts to link his theories to the modern economic world. What would Darwin have made of modern capitalism — the global march of the biggest and baddest corporate monsters? Such a question misinterprets Darwin’s intention. His theory was indeed based on “survival of the fittest”, but to be “fit” did not necessarily imply size or power, it concerned dominance of the species “most responsive to change”. As Simon Calukin notes in the Guardian,
"The simplistic "might is right" case has been blown apart by the force of events. However it originated, the credit crunch is the meteorite that is causing the mass extinction of what now can be seen as financial dinosaurs. Suddenly the once mighty are so no longer — in the new credit-starved world, investment banks are extinct, by the end of the year most hedge funds will have gone out of business, and even Russian oligarchs are finding food hard to come by."
If Darwin is to be considered truly prescient, business success in the next decade will be determined by flexibility, not size.
Thursday 15 January 2009
Bank job
Funnily enough, now wouldn’t be such a bad time to start a bank. Public confidence in the banking system may be at an all-time low, but that doesn’t make the business model defunct. In fact, super-low interest rates, combined with a healthy supply of businesses desperate for credit, makes 2009 the ideal year to get started. According to SmartMoney.com, the three-year failure rate for brand new banks is less that one in every 1,000 – an encouraging ratio when pitted against the perilous failure rate of pubs and restaurants, both ventures that attract entrepreneurs in drooling flocks.
To get started, you’ll need a bunch of like-minded entrepreneurs, each with at least £50,000 to pump in. The rest of the cash can be raised by issuing shares to local investors and businesses. While much of your start-up investment will be burned by marketing costs, consider the pitch: a local bank, lending to local businesses, free of toxic debt, providing a much needed community service. All you have to do is earn more on your lending than you pay out on your borrowing. Oh, and avoid collateralized debt obligations.
To get started, you’ll need a bunch of like-minded entrepreneurs, each with at least £50,000 to pump in. The rest of the cash can be raised by issuing shares to local investors and businesses. While much of your start-up investment will be burned by marketing costs, consider the pitch: a local bank, lending to local businesses, free of toxic debt, providing a much needed community service. All you have to do is earn more on your lending than you pay out on your borrowing. Oh, and avoid collateralized debt obligations.
Tuesday 13 January 2009
Do something
Watching Gordon Brown’s hilarious “do-nothing” attack on Cameron can lead the observer to only one conclusion: it’s a wind-up. Brown knows only too well that the parties’ economic strategies are closer than the public is led to believe (on numerous economic rescue packages their strategies are the same, only differing on where all the extra money will come from), so accusing Cameron of laissez faire when the chips are down must really smart. Especially when Labour is in a position to cherry pick all the best Tory ideas and repackage them as its own.
So what do the Tories think of the idea that not even Alistair Darling will admit to supporting, so-called “quantitative easing”? Let’s leave this one to Osborne.
“The very fact that the Treasury is speculating about printing money shows that Gordon Brown has led Britain to the brink of bankruptcy. Printing money is the last resort of desperate governments when all other policies have failed. It can’t be ruled out as a last resort in the fight against deflation, but in the end printing money risks losing control of inflation and all the economic problems that high inflation brings.”
Oh George. In your rush to conjure up images of an ink-stained Brown, desperately printing cash in a last ditch attempt to stop the UK going to the dogs, Zimbabwe style, you’ve forgotten three key facts:
1) Quantitative easing is a relatively popular Tory policy. It is supported by the Institute of Economic Affairs, a Conservative think tank, and indeed any sensible monetarist you might care to name. Monetarism, lest we not forget, is supposed to be Tory economic policy.
2) Darling has been very careful to “rule out” quantitative easing, mindful of the market’s current tendency to overreact.
3) As Times journalist David Smith so rightly says, “‘Printing money’, to be clear, is not the same as printing money”.
He continues:
“This is not a cash economy. The value of notes and coins in circulation is £51.6 billion, less than 3% of £1.9 trillion of “broad” money in Britain, M4, consisting of bank deposits and the corresponding lending. Printing money means getting broad money growing faster through so-called quantitative easing.
“How? One way is for the Bank to buy government bonds or commercial securities from banks or their customers. This creates a credit in the central bank’s reserve account, which can then be the basis for increased bank lending. It also drives down interest rates throughout the economy.”
2008 wasn’t a great year for Osborne’s sense of judgement. It’s been an inauspicious start to 2009.
So what do the Tories think of the idea that not even Alistair Darling will admit to supporting, so-called “quantitative easing”? Let’s leave this one to Osborne.
“The very fact that the Treasury is speculating about printing money shows that Gordon Brown has led Britain to the brink of bankruptcy. Printing money is the last resort of desperate governments when all other policies have failed. It can’t be ruled out as a last resort in the fight against deflation, but in the end printing money risks losing control of inflation and all the economic problems that high inflation brings.”
Oh George. In your rush to conjure up images of an ink-stained Brown, desperately printing cash in a last ditch attempt to stop the UK going to the dogs, Zimbabwe style, you’ve forgotten three key facts:
1) Quantitative easing is a relatively popular Tory policy. It is supported by the Institute of Economic Affairs, a Conservative think tank, and indeed any sensible monetarist you might care to name. Monetarism, lest we not forget, is supposed to be Tory economic policy.
2) Darling has been very careful to “rule out” quantitative easing, mindful of the market’s current tendency to overreact.
3) As Times journalist David Smith so rightly says, “‘Printing money’, to be clear, is not the same as printing money”.
He continues:
“This is not a cash economy. The value of notes and coins in circulation is £51.6 billion, less than 3% of £1.9 trillion of “broad” money in Britain, M4, consisting of bank deposits and the corresponding lending. Printing money means getting broad money growing faster through so-called quantitative easing.
“How? One way is for the Bank to buy government bonds or commercial securities from banks or their customers. This creates a credit in the central bank’s reserve account, which can then be the basis for increased bank lending. It also drives down interest rates throughout the economy.”
2008 wasn’t a great year for Osborne’s sense of judgement. It’s been an inauspicious start to 2009.
Thursday 8 January 2009
Analyse this
Jeff Madrick, reporting from the annual meeting of American Economists, laments the lack of remorse shown by some of the country’s more mainstream economists over their role in the financial crisis.
“There was no session on the schedule about how the vast majority of economists should deal with their failure to anticipate or even seriously warn about the possibility that the second worst economic crisis of the last hundred years was imminent,” he writes.
There wasn’t much in the way of introspection, no self-analysis either of these professors’ personal roles, or of economics itself. At the very least, writes Madrick, serious investigation should have followed the realisation that Wall Street had risen to such dizzying heights that it accounted for one third of the nation’s total corporate profits. Maybe we lacked serious investigation. But the warning signs were there. Economists were indeed looking puzzled. Chris Dierkes mentions a few here. In the UK we are blessed with the prescience of Vince Cable.
It’s easy to be blinded by wealth. The City enjoys, or at least has enjoyed, extreme favouritism from policy makers—a special treatment disproportionate to its actual value. But in truth, we were never short of warnings. We were short of bankers responsible enough to heed those warnings.
Back to Madrick - this should be your credit crunch takeaway fact:
US Investment banks took on $25 to $40 of debt for every dollar of capital.
Is it any wonder the money markets are so gummed up?
“There was no session on the schedule about how the vast majority of economists should deal with their failure to anticipate or even seriously warn about the possibility that the second worst economic crisis of the last hundred years was imminent,” he writes.
There wasn’t much in the way of introspection, no self-analysis either of these professors’ personal roles, or of economics itself. At the very least, writes Madrick, serious investigation should have followed the realisation that Wall Street had risen to such dizzying heights that it accounted for one third of the nation’s total corporate profits. Maybe we lacked serious investigation. But the warning signs were there. Economists were indeed looking puzzled. Chris Dierkes mentions a few here. In the UK we are blessed with the prescience of Vince Cable.
It’s easy to be blinded by wealth. The City enjoys, or at least has enjoyed, extreme favouritism from policy makers—a special treatment disproportionate to its actual value. But in truth, we were never short of warnings. We were short of bankers responsible enough to heed those warnings.
Back to Madrick - this should be your credit crunch takeaway fact:
US Investment banks took on $25 to $40 of debt for every dollar of capital.
Is it any wonder the money markets are so gummed up?
Wednesday 7 January 2009
The price of innovation
Gordon Brown never misses an opportunity to champion innovation, but the details are often murky. I can understand his paranoia: reveal too much detail and your plan will be rubbished by media and opposition alike before it’s even had the chance to develop legs. But some kind of idea of how we’re going to turn all those ex-Woolworths employees into wind farm entrepreneurs really would be useful. If it’s “digital infrastructure” you’re interested in, then Silicon.com does a good job of suggesting a few things to spend that £18bn on. Actually make that £17bn. Apparently Gordon’s splurged a billion already. Championing innovation is pricey.
Last month, I visited computer games developer Media Molecule and was struck by the depth of creativity there. The UK’s games industry is blessed by a wealth of talent, but we’re hampered by our rival developer nations’ generous tax breaks, which make it hard for the Brits to compete. Media Molecule remains competitive by keeping the numbers down. But here’s the thing: employees are actively encouraged to use the premises to work on their own projects, out of hours. If they manage to come up with anything worthwhile, the intellectual property is theirs to keep. That might sound like a bizarre oversight, after all, a company’s greatest asset is usually its people. The more they create, the more money you make.
But hanging onto your most effective creatives is, in the long run, a more profitable track. And these employees will be more encouraged to stay if you offer them a sense of freedom—the opportunity to chase their dreams out of office hours. This is, after all, the same freedom that enabled Tim Berners Lee to create the World Wide Web. Infrastructure is important, but so is fostering the will to create.
Last month, I visited computer games developer Media Molecule and was struck by the depth of creativity there. The UK’s games industry is blessed by a wealth of talent, but we’re hampered by our rival developer nations’ generous tax breaks, which make it hard for the Brits to compete. Media Molecule remains competitive by keeping the numbers down. But here’s the thing: employees are actively encouraged to use the premises to work on their own projects, out of hours. If they manage to come up with anything worthwhile, the intellectual property is theirs to keep. That might sound like a bizarre oversight, after all, a company’s greatest asset is usually its people. The more they create, the more money you make.
But hanging onto your most effective creatives is, in the long run, a more profitable track. And these employees will be more encouraged to stay if you offer them a sense of freedom—the opportunity to chase their dreams out of office hours. This is, after all, the same freedom that enabled Tim Berners Lee to create the World Wide Web. Infrastructure is important, but so is fostering the will to create.
Spend versus save
Spend or save? Gordon’s splurge package versus Dave’s deep pockets. Fiscal versus frugal? While the politicians battle it out, it appears the public has decided on its own strategy. And the consumer says: let’s have both. That is, spend your hard-earned on computer games now; stay in and play them to save. 2008 was the year of the video game, with sales hitting an all-time high of almost 83 million units across all platforms. That’s 1.3 console games each. No wonder the pubs are empty.
Total sales of software and hardware topped £4bn, which is more than we spent on music and video—evidence that computer games are not only seen as the recessionary purchase of choice, but also that they are finally beginning to shed their geeky image. Much of the hard work has been undertaken by Nintendo, whose strategy of bringing gaming to the kind of punters who previously considered it to be a somewhat nerdy pastime, has reaped rewards. Nintendo Wii hardware and software holds the top three slots in the all-platform chart on Amazon, while Nintendo Wii games made up almost a quarter of all UK software sales in 2008. The company’s handheld console, the DS, has followed the same risky track, and to good effect: you’re more likely to see a DS handheld out and about than any other portable.
But the biggest surprise is Sony’s performance. Sales of software for the PlayStation 3 rose by 145 per cent, a phenomenal rise on last year, especially considering that the majority of the console’s titles are unsuited to the casual gamer. By this I mean impenetrable apocalyptic first-person shooting games. Maybe the nerds do still reign.
Total sales of software and hardware topped £4bn, which is more than we spent on music and video—evidence that computer games are not only seen as the recessionary purchase of choice, but also that they are finally beginning to shed their geeky image. Much of the hard work has been undertaken by Nintendo, whose strategy of bringing gaming to the kind of punters who previously considered it to be a somewhat nerdy pastime, has reaped rewards. Nintendo Wii hardware and software holds the top three slots in the all-platform chart on Amazon, while Nintendo Wii games made up almost a quarter of all UK software sales in 2008. The company’s handheld console, the DS, has followed the same risky track, and to good effect: you’re more likely to see a DS handheld out and about than any other portable.
But the biggest surprise is Sony’s performance. Sales of software for the PlayStation 3 rose by 145 per cent, a phenomenal rise on last year, especially considering that the majority of the console’s titles are unsuited to the casual gamer. By this I mean impenetrable apocalyptic first-person shooting games. Maybe the nerds do still reign.
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