Why are computer games like restaurants?

I was chatting with one of the devs in my group a couple of minutes ago, and we got to talking about the economics of movie computer-game tie-ins.

As we were chatting, I had this sudden realization.  The economics of a computer video game are almost completely identical to those of a new restaurant.

It's not as far-fetched an analogy as you might think.

The vast majority of computer games published aren't particularly profitable.  For every Halo, there are a dozen Universal Studios Theme Park Adventure (no offense to the people who wrote that game, I came upon it with a search for "worst video game").  For every Olive Garden, there are a dozen mom and pop restaurants that fail (and major chains).

There are a ton of similarities between video games and restaurants.  For instance, consider just some of the factors that lead to the success of a game or a restaurant:

Computer Game Restaurant
Game-Play (quality of play) Chef (quality of food)
Shelf-Space in retailers (more prominent is better) Location (more prominent is better)
Reviews Reviews
Story Story (yes, restaurants tell stories)
Celebrity Game Designer (think Sid Meier) Celebrity Chef (think Emeril or Bobbie Flay)

One item in that table above that might puzzle people is "Story".  As I mentioned, restaurants tell stories - it's particularly true for chain restaurants like Claim Jumper, Mortons or The Olive Garden.  The story of a restaurant is told via the decor, the exterior decoration, the uniforms of the wait staff, all the things that make up your experience in the restaurant.

Other intangibles that play into the analogy: With very few exceptions (Half-Life, Halo, etc), computer games make most of their money in the first couple of months they are sold. Similarly, most restaurants will fail in the first couple of years of their existance. 

The other aspect of this is money.  Both restaurants and computer games are optional expenses - they come from discretionary spending, which means that when times are lean sales go down.

The more I think about the analogy, the more I like it.

I don't have a ton of facts to back this analogy, but I think it works. 

ETA: discussion of money and fix the table width.

Comments (11)

  1. Anonymous says:

    Oh no, not you too! Spolsky did a (somewhat self-congratulatory) piece on how hiring programmers is like hiring chefs. Now this!

    Odd how this would come up while talking about movie tie-ins, because I would think that’s where things fall down. Video games, particularly movie tie-ins, have little expectation of serious longevity. Restaurants, on the other hand, need to keep operating after the initial frenzy dies down.

    Subscription-based online games probably bear your analogy out best. Along with the expectation of longevity, the story aspect of both become more similar as well, because then the story _of_ the game becomes just as important as the story _in_ the game.

  2. Chris, I honestly didn’t know Joel had written about that, it was just something that came up.

    Subscription games are actually fascinating economically. First off, subscription games are REMARKABLY sticky – you tend to come back to the first one you played again and again, regardless of how the game landscape changes.  That’s why Asheron’s Call is still in business.

  3. Anonymous says:

    cleanliness of its toilets is key to a restaurant’s success


    because women won’t go back to restaurants with dirty loos

    no idea how that relates to video games 🙂

  4. Anonymous says:

    I’ve always thought that video games were more akin to a movie.

    All your current relations hold:

    Gameplay Experience vs Quality of Presentation

    Retailer Shelfspace vs Trailers, Marketing, Theater locations

    Reviews vs Reviews

    Story vs Story (without any explanation necessary. 😉 )

    Celebrity Game Designers/Devs/Voice Actors vs Celebrity Directorys/Writers/Actors

    There’s actually a very direct overlap there.

    You’ve also got additional similarities like:

    Generally limited profitability windows

    Cult classics

    Discretionary Spending

    High failure rate

    And so forth.  Honestly, I figure that if there’s ever an "interactive movie," it’ll just be a video game on the big screen.

    Then again, this comparison is pretty obvious, so I figure just about everyone’s made it.  You were just drawing a second parallel that’s perfectly valid and interesting as well.

  5. Jeff Parker says:

    >>> Subscription games are actually fascinating economically. First off, subscription games are REMARKABLY sticky – you tend to come back to the first one you played again and again, regardless of how the game landscape changes.  That’s why Asheron’s Call is still in business.

    That is an interesting insite, as I think about it, that actually quite a great insite, I still have fond memories and every now and then still play old Meridian 59 there are still a ton of people that play EQ.

    I do not know about the chef thing. Then again I might be a monority on this. I am going to have to say gameplay is pretty much my deciding factor. I mean I still enjoy a good game of chess. However I also still play Age of Empires the original and still enjoy it. Age of Empires 2 is also good but I play it less than number 1. I however truely dislike AOE 3 and the other one that game out Age of Mythology. They just are not as challenging, graphics are way too huge and slow down the game even on an alienware with 2 gigs ram and 512 gforce card and well the gameplay just isn’t the same scenarios are all canned where AOE 1 you never played the same game twice still to this day i haven’t played the same map twice. Then again AOE 3 might just apeal to a new generation of gamers better I mean I played Ultima 1 when it was brand new. While I am not oposed to several new games I do like GTA and did like WoW. Even all the Dungeon Seige lines by MS I loved.

    So i don’t know about the shelf space idea. I see a ton of games up there front row in the store. I never buy one from there unless I already know I want it like when Doom 3 game out. When I go to buy a new game I pretty much already know what I want I go and find it no matter what shelf it is on. How I know if I want a new game or not. Well yeah reviews influence slightly, mainly though if it is a sequel to a game I have already played and enjoyed but also friends and coworkers recomendations are a bigger influence than reviews.

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