A topic that he first broached at GDC Europe in 2009, Denis Dyack spoke at the Gamasutra-attended Canadian Games Conference to expand upon his belief that cloud computing will shape the future of the games industry, primarily for the way in which the natural "commoditization" of technology is decreasing the value of games in consumers' minds.
"I have never seen an instance of a technology that has not been commoditized," Dyack opened, giving the example of the cellphone: originally a limited and expensive luxury device, they are now cheap enough that they can be bought off the shelf at drug stores.
"How has [the cellphone] been commoditized? Well, it does more things; you can text, do e-mail, record video, surf the web, and the value of a technology is almost inversely proportional to the things it can do for you. This isn't something I've made up; it's an economic term called 'performance oversupply.'" Dyack said that it is not purely technology that can be commoditized, but that technology itself can commoditize content.
"If you want to see an example of commoditization, you need look no further than the music industry. iTunes is worth more than the entire music industry. Films, television, books... how many people have Kindles? Books might cost 10 bucks now, but how long until they're a dollar?"
He explained, "the technology that is doing this is the internet, and it's something that we have to recognize has really changed things. A lot of people say this is an education issue, telling people, 'please don't pirate our movies' but it's a much bigger issue than that; it's become a cultural issue."
However, Dyack added that video games did have a technological advantage to other mediums: their interactivity.
"Compare Star Wars to Call of Duty
. Imagine you're in a movie theatre with a video camera watching Star Wars. When you take the camera away, and you play the film back -- sure there will be a degradation in quality, but you essentially have a copy of Star Wars," he said. "If you did that while playing Call of Duty
, you are not capturing the same experience. When you watch the tape back you are not playing Call of Duty
Dyack argued that Call of Duty
has a higher "IP integrity" than Star Wars because you can't copy it in the same kinds of ways, and that means cloud computing could offer a solution to the commoditization of games in a way that it couldn't for other mediums.
"By being broadcast, a book, a film, or whatever, can be commoditized. But with cloud computing, if you broadcast the game to the player, people can experience the game, but they cannot copy it. The traditional forms of entertainment are going to continue to shrink without exception because of the internet."
Dyack continued, "Clouds will succeed not because I like them or because I think the technology is cool. It's all about economics. Cloud computing is the ultimate commoditization of hardware; the hardware simply doesn't matter."
Instead, Dyack saw a future where "clouds" acted like cable channels, using examples of games such as World of Warcraft
that are successful in Asia despite weak IP laws. "It's culturally acceptable to pay to access something that you couldn't otherwise," he said, "and don't assume there will be just one cloud; there are many clouds in the sky and like cable channels, consumers will want to be able to say, 'I'm going to subscribe to the Microsoft channel,' or 'I'm going to subscribe to the Silicon Knights channel because I like their games.'"
Dyack admitted that cloud computing still faced technological issues such as latency, but he argued strongly that they were "not something that couldn't be overcome."
"I can play League of Legends
against someone in Russia. If we consider something like OnLive right now, there are five servers total. If I were them, I'd be talking to every single cable operator in every region and city trying to get clouds placed there, because the infrastructure is already in place."
Dyack continued that he saw game development as currently being at an "economic event horizon" with pressures such as the fairly even success of the three major consoles, disruptive influences such as iOS and free-to-play, piracy and used games. Combined with the extent to which online multiplayer lengthens the lives of current games all these factors are ultimately "forcing us to go into the cloud."
"When the first cloud gaming services were announced, it might be coined the end of the golden era," Dyack concluded. "We're in a time when the games that will be made will be made different from the way games used to be made, but it will still be true that the people who create the best content will be the ones to succeed."