It's clear that online distribution is transforming the video game industry into something exciting -- and publishers are scared. At the SXSW conference in Austin, Multiverse's Corey Bridges was there to suggest that they most certainly should
With previous experience at Zone Labs, Netflix, and Netscape, Bridges is used to promoting ideas other people think are nuts. His latest venture, Multiverse, is no exception. They've created a platform that allows anyone to create an online world – who wants that?
When the Web first came out, people thought it would be dominated by the big guys, like Time-Warner, Bridges recalls. Turns out, it’s the indies that generate the bulk of the content. There is a near-universal desire to create; says Bridges, “Everybody wants to express themselves in some way.”
Is Traditional Publishing Dead?
The indies are significantly affecting traditional media, explains Bridges. Critically, production and distribution are now in the people’s hands. This results in stats such as Facebook's 70 million users in 4 years, Google with $4.83 billion in revenue in Q4 2007, and Blizzard with 10 million WoW
subcriptions worldwide -- which makes Blizzard the de facto #1 media company in the world right now.
“Sucks to be you, media oligopolists,” says Bridges. Nowadays, newspapers are folding and the music industry is going through painful spasms. Retail stores are dropping like flies. The venerable Tower Records up and died. Things are changing.
For example, Nine Inch Nails recently released an online-only “album," with no record company involved. Fans could choose from several versions and packages, including a $300 deluxe version with a vinyl pressing and Trent Reznor autograph.
The film/TV industry is even starting to twitch, Bridges continues. Movie theater revenues are deflating, video stores are beset by Netflix, and the industry was rocked (and possibly undone by) the recent Writers' strike for a cut of online and DVD sales.
As far as Bridges is concerned, video game publishers are next on the chopping block.
Over the past few years, affordable technologies have enabled individuals to produce media content at home. Shipping has become more reasonable, and folks find the middle man less and less necessary.
Video game companies spend a ton of money creating games, which forces them into conservative choices. With production costs at $10 million minimum, a bad game can take down a whole company. Once in the store, a game has maybe a month to prove its selling value. After that, it’s off the shelf. Even if it sells well, the studio usually makes a profit of only 8-20 percent.
So publishers are understandably risk-averse. The outcome, however, is problematic. Under the Hollywood blockbuster model, companies rely on the same old genres, depend on franchises, and constrain creativity. Industry jobs routinely grind people up and spit them out. Game development falters.
But there is good news, says Bridges. Broadband, middleware – specifically, indie-geared platforms for noncommercial use, – and the emergence of a universal client. Of course, Bridges has a reason to promote this avenue; his company's Multiverse Network is one such solution.
As the online world industry continues to grow, Bridges predicts it will take a huge chunk out of the video game industry. "MMOs are not some weird little genre that popped up out of nowhere," he says. "WoW
is not a fad, it’s a harbinger." According to Bridges, everyone will have an avatar in a few years.
At the same time, social networks are growing by leaps and bounds. Electronic Arts recently began to develop Facebook applications. "Folks are starting to realize that $80 million budgets and 6 year production schedules are not tenable," Bridges adds.
"This year, the intersection of virtual worlds and social networks will be huge," he says.
From Their Compost, A Garden
Bridges predicts we will see new genres of games for different consumers – not just hardcore gamers – and smarter games for smaller market segments (not just “not only hardcores” but also “not only mainstream dreck”). These trends will benefit both indies and the established publishers -- but the indies will move more quickly, he says.
Today's hitches, according to Bridges: The genres are limited, and few companies control the majority of the market. Digital content is expensive to build, and there is significant friction for new users.
Tomorrow all that will change, Bridges predicts. Independent developers drive innovation. As viral marketing campaigns show, people are more inclined to take information from trusted sources. Communities and forums will continue to grow.
Right now, online worlds are a new medium, he continues. As businesses integrate these tools, the stigma of gameplay will recede. According to Bridges, the distinction between industries will soon blur: video game, virtual world, social network – all will combine as the World Wide Web.
As self-publishing indie studios blossom, Bridges predicts a consolidation of the bigger publishers. “They will still push atoms when everyone else is pushing bits.”
Without their stranglehold on distribution, publishers will fill the remaining niches. They will compete with boutique firms to offer financing, recruitment, management, and marketing services. Overall, we will see better design, fewer publishers, and more millionaires.
“So what world,” asks Bridges, “will you build?”