Not to state the obvious, but 2009 has been bad for business. Of course the
video game industry has been impacted, but the woes of the game industry have
more to do with growing pains from within. Many of the traditional models were
breaking down independently of the economy. The retail model is too
expensive and development costs are too high to support the added retail cost
burden. Up until last year the industry was in a state of paradigm paralysis –
or the inability to see beyond the current models. Defined as the greatest
barrier to a paradigm shift, paradigm paralysis has overshadowed growth
opportunities for many companies.
As a result, publishers have slashed upcoming games, halted new development and
closed studios. M2 Research
estimates 12% of the game development workforce has been laid off in the past
year. Add to that a freeze on investment funding and traditional game models
don’t seem to look too attractive.
The future of interactive gaming is in new distribution models, more
streamlined development and the use of creative revenue models. In fact, the
industry is entering a new period of expansion, something well beyond the
traditional concept of gaming. The democratization of games has arrived.
Diversity of an Industry
Consumers who play games are not one-dimensional. Today’s gaming
consumers represent a wide-reaching swath of the mass market. Not only does the
demographic profile of gamers now extend to every age, but the growth and impact
of females playing games is undeniable. Add to this that more people are
playing games on multiple platforms. They are playing games on consoles, PCs,
portables and mobile devices. Games have become mass consumable products. Take
a look at some statistics:
Mass Market: Games now
encompass a much wider demographic than just males ages 18 to 25. Nintendo
estimates 300 million people play consoles and portable devices,
reaching 450 million by 2015. Female players constitute one of the fastest
growing market segments.
Multi-platform: People are
playing games on multiple console platforms. There are 2200+ titles on the
market, 70% are multiplatform and growing. That does not include the
1500+ titles for portable devices.
PC Power: With its open
platform, the PC has become the central hub for online and social gaming,
virtual goods, and microtransactions. Jon Peddie Research estimates the
installed base of gaming PCs is 420 million, growing to over 500
million by 2012. M2 Research estimates 270
million of these PCs have broadband - that is 65% of today's PC gamers.
MMOs and Casual Games: There
are hundreds of MMOs, and the list is growing. Some casual game developers,
like Big Fish Games, put out a new game everyday.
Growing Trends: New game boxes
like OnLive, Gaikai and Zeebo, and mobile gaming driven by the iPhone's
success, have the potential to exponentially expand gaming.
Gaming Renaissance
So what does this all mean for game developers and publishers? If anything it
highlights the immense diversity of content, platforms, distribution and most
importantly consumer preferences that exists today.
The current gaming renaissance movement does not solely rest with the
independent developer, trying to publish their first game. Renaissance, in the
true meaning, is about a re-birth or an awakening of the arts, the ability to
explore new frontiers in expression and emotional attachments. To that end,
this period of gaming renaissance needs to also encompass publishers looking
for new ways to engage this growing diversity of consumers on a more visceral
level.
Key Driving Forces for Success
Developers and publishers need to find more effective methods for delivering a
reasonable ROI on their projects. There are a number of key driving forces that
will impact a company's success as this new wave of gaming takes hold, some of
which include:
- Expansion of gaming platforms
- Importance of a social community
- Flexibility of developers to move quickly
- Quality of content and user interface
- Better management of costs and ROI
- Broader support of middleware technology
Whether it is the smaller development teams or the larger
publishers, there is a very real need for studios to address these driving
forces. How successful companies are at covering these factors will greatly
impact their growth over the coming years.
For the renascent teams, one way to meet the constraints on time and money is
to incorporate middleware solutions into their production pipeline. In order to
develop these new and varied game segments there is a requirement for tools
that are flexible and open.
Importance of Middleware
The point of middleware tools is to help alleviate some of the production
burden by creating a framework for certain components within the production
pipeline. For traditional console and PC games, middleware has been a part of
the development discussion since the days of Criterion. From a development
standpoint, middleware makes sense especially for many studios looking to
diversify their product mix.
Some may argue that the use of middleware does not necessarily lower the
overall production costs of a game. Perhaps not. In most cases diverted funds
tend to get embedded into other parts of the development cycle. But what
middleware does provide is a baseline of tools that support the growing
complexities of diverse development.
For example, MMOs take 3 to 4 years to develop and Asian game companies have
had to rapidly grow their technology base. They simply have not had the luxury
of Western developers to build some of their technology from scratch. Japan on
the other hand, with its "build internally" approach to development
has not been nearly as successful in some of the newer gaming trends. Western
companies clearly have an opportunity to lead the space, but they need to rein-in
in their costs.
The Future
Middleware is one area that can help studios support some of those key driving
forces such as supporting multiple platforms, providing flexible development,
while focusing resources on content quality and better cost management.
There is now a greater opportunity to incorporate middleware as the shift to
digital distribution, massively multiplayer experiences, casual and social
games start to make up a larger portion of the market.
The video game industry has reached critical mass. It is no longer a market for
an elite few. It is accessible and engaging to a wide demographic. Market
demand is there, with saturation not predicted for several years at least.
The companies that will be successful going forward will be those that are able
to move beyond the paradigm paralysis of the past and quickly support gaming’s new
growth opportunities.
- WM