It is strange how the game industry has evolved over the years, taking unexpected twists and turns. Who would have thought, for instance, that text based fantasy games would evolve from their niche pre computer form to the MMOs we have today, played by tens of millions of people all around the world?
And one of these revolutionary twist is happening right now. It is one of the biggest ever to hit the industry, positively seismic in fact. And it all came from the humble MP3 format.
The Motion Picture (hence MP) industry in the early ’90s brought together a number of techniques to compress digital music to about a tenth of the file size. This then made it very practical to transmit music around the web using the slow dial up modems of the time. Which meant that the business model of the music industry was broken. Portable MP3 players entered the market and fairly quickly replaced the old Walkman devices.
The next step in this chain of events was for Apple to see an opportunity here and to thus bring out the iPod. They then brought about one of the biggest revolutions in publishing in the history of mankind. What they did was to go to the record companies and offer to sell their music on line for them. If it hadn’t been for the high level of piracy the music industry would have told Apple to get lost. In fact some companies did, to start with. But once the business model proved viable they had no option but to join. So in January 2001 iTunes was unleashed on the world.
It is very easy to underestimate how revolutionary iTunes was. For the first time we had instant mass market distribution to the whole world. An artist could create a work and just minutes later it could be in the hands of millions. And because of the business model the artist was rewarded for their endeavour. As ever with enabling new technology it takes a while for the effects to be felt. But sure enough iTunes brought about a number of revolutions:
- No need for plastic and cardboard to publish and distribute IP. This is massive. From the days of cave paintings through the Caxton printing press publishing has always needed a physical medium. Now it was gone.
- Explosion in diversity. To distribute a song costs Apple nearly nothing, it is just a small file on a hard drive. So they can maintain an infinite catalogue. They can make available every piece of music ever recorded. Which makes the physical stock in the world’s biggest music store look pathetic in comparison.
- Total globalisation. A song can be recorded in Lithuania one day and be listened to in Western Samoa the same day. The whole world has access to the whole world’s music. A defining moment for the global village.
- A fair and workable business model for everyone involved. Apple, the artist and the customer all benefit massively from iTunes.
- No need for publishers. When iTunes started 100% of its content came from publishers. With the passage of time that percentage has steadily reduced. The artist can reach the entire world market without needing a publisher.
Then, just a year ago, Apple decided that the iPod/iPhone was powerful enough to run applications. They decided to copy the distribution model they had used for MP3. The App Store was born. And the App Store has exactly the same advantages that I have listed above for iTunes.
What followed was the biggest and most successful uptake of a new platform in the whole history of the video game industry. More a nuclear explosion than a revolution. 1.5 billion downloads in the first year.
So the business models of the big three console manufacturers, Sony, Nintendo and Microsoft are under threat. The reality is that they are just about as relevant as the cave paintings mentioned earlier. It is only content availability and momentum that is keeping them going. And if Apple produce a home console repeating the same business model as the App Store then the established players will be in big trouble. And they are half way there with Apple TV.
The AppStore idea is so brilliant that it has been very quickly copied. By Google for Android, by Sony for the PSP, by Nokia for Symbian and also by LG, Samsung, Blackberry and Pre. Everyone is at it. And quite rightly too, the AppStore is currently the optimum method for distributing IP to its users.
A year ago nobody would have predicted this. The video game industry has been hit with the biggest revolution in its entire history. And it is massively to our benefit. Our IP will increase enormously in diversity and reach far more people than was possible before. It is making us truly mainstream.