My $0.02 on the platform cycle and Social Gaming

Periodically, I connect up with people I know from the industry. Beers are consumed and we wander through some random strings of discussion.  For some reason though, we always talk about the opportunity spaces and where you could jump in and be successful.

After a recent discussion around social gaming I sat back and thought about the last 16 years I've been in game development and the cycles I've seen. Over the years there have been a number of new technologies and new platforms and each one tends to follow a similar cycle. Here's what I think are the sign posts along the way.


The Cycle:
1) A new opportunity space pops up. Unless it is directly linked to a large company who has had historic success in the area, Nobody believes in the opportunity.

2) A mix of new start-ups and established companies dabble in the space. The new start-ups are rough and experimental and the established companies fail to understand the space and simply port existing content.

3) Someone (typically a slightly larger start-up) puts most of the pieces together and builds a new product that captures the strengths of the platform and is polished in execution. They succeed beyond expectation

4) The gold rush ensues. Every start up in the area chases after the platform and it quickly becomes saturated with imitations of the large success.

5) The older established companies who failed with early ports now have a model to follow and they bring higher production values and established Intellectual Properties into the space. At this point the market is quite saturated.  The smaller developers start to die off as they can no longer meet the quality bar set by the big players.   Only a few of the new start-ups manage to succeed, most often lead by the early successors in the space.

6) Market saturation and consolidation. The successful companies start to buy each other up. the market has reached saturation and to get market share they take it from each other. The space starts to look unappealing from a development standpoint and start-ups move to another frontier.

History

Nice model, but is it real? Well, let's look back to history. Remember the Dune RTS by Westwood? It started the RTS frenzy.  Following Dune, a small developer named Blizzard stepped into the space with "Warcraft".    A few other good successes happened, such as Westwood's "Command and Conquer" and Chris Taylor's "Total Annihilation".  

After that, the floodgates opened and the RTS genre was flooded.   The big brands continued to have success, with a few new titles like Microsoft's "Age of Empires" emerging in the later stages of the cycle.   Following the high point in the cycle,  a ton of new RTS titles failed, so interest fell off and most developers turned away from the RTS genre.  The few established players in the space continue to be the big winners (Starcraft 2 anyone?)

How about the iPhone?

Early on, nobody thought cell phone games would be that successful. There were a few evangelists running around, but from a game developer standpoint, the overhead of the other platforms (poor performance, interpreted code) kept everybody away. The iPhone was new and wasn't from a know player in the gaming space or the phone space, so inital interest was muted. A number of small scale start-ups started to experiment in the space and some early successes came along.

Then, some other developers started to understand the platform and managed some large success (iFart, Koi Pond) , which got other people very interested in the space. The gold rush ensued. The quality of the average title started to increase, raising the barrier to entry for developers. Then, once the platform was better understood, the established brands (EA, Popcap) started to bring over established IP to the space.  

Pretty soon the top 10 and even top 20 were dominated by well know IP titles, like Scrabble, Tetris, Plants vs Zombies (which is great on the iPad by the way).  There are still a few successes by smaller developers (Angry Birds) but, for the most part the market is maturing rapidly and undergoing consolidation.

I argue Facebook games are going through the same cycle right now and that the easy money has already been made. We are in the later stages of the gold rush and you are seeing all the typical signs, consolidation, the entrance of established players and a saturation of the space with new titles.  I'm excited by all the new gamers these services have brought to computer games and I'm looking forward to converting as may of them as possible into Beamdog gamers.

So, what is the next big thing? To use an american courtroom drama saying, "I'll have to plead the fifth".

Thanks for reading,
-Trent