Three of the hottest subjects in video gaming just now are OLED displays, which will transform portable devices, 3D gaming, which will bring us a step change in the immersive gaming experience and netbooks/smartphones which will become the most ubiquitous gaming devices.
Well, the wonders of serendipity bring all three together. The technology is such that OLED displays can be layered, one over another, to give true 3D without any need for glasses. And they can do this cheaply and with a very low power consumption. So the technology already exists to bring true 3D to our netbooks/smartphones.
This is getting very interesting. Sales of the Wii have slowed down a lot and so Nintendo, who have resisted price drops because of the previous huge demand, will now be forced to bite the bullet. With the HD Super Wii on the way it will not be long before they are back with an offering at a premium price point.
Sony have their back to the wall because the PS3 has cost them billions. However sales are stalling purely because it is far too expensive to buy. They have no option but to drop the price if they are to survive in the market. So another platform holder will be biting that price bullet pretty soon.
Which brings us to Microsoft. The Xbox division is nice and profitable and Microsoft have enough money in the bank to buy a country, or two. Already they have made the Xbox 360 the cheapest home console in the market, as well as being the machine that brings its users the most features and benefits. So will they respond to what the competition do to maintain their price advantage? They easily can if they want to.
Microsoft have a number of options. They can bring the price of the base, Arcade, model down to $149 or even $99. This would get them nice headlines. Or they could take advantage of low hard drive prices to bring down the prices of the Pro and Elite models. Or they could just instal far bigger hard drives. Or some combination of the above.
My guess is that there will be a price move from Microsoft in response to what the competition do. Consoles are a bait and hook business model and they will soon get their profit back as the owners buy games and subscribe to Xbox Live. Which means I will finally be going to the shops and buying one.
I had a go on here at Michael Pachter, analyst at Wedbush Morgan, when he said that downloads would become 20% of the market within 5 years and peak at 50% in 10 years. To me that is incredibly conservative and I expect there to be no physical media at all in 10 years time, online distribution will be 100% of the market by then.
Online distribution confers huge advantages over plastic and cardboard distribution. Instant global distribution, ensuring that the customer has the latest version of the game and massively reduced product costs for starters. Physical distribution is cumbersome, slow, inefficient and expensive. In fact it is amazing that we haven’t switched over sooner, another example of the platform holders stunting progress.
So it was nice to see Wonderhill CEO, James Currier supporting my position. “My money is on the Web people to take the lion’s share of the gaming world by 2013″ is a sentiment I can understand. And it comes in an interesting interview.
Personally I think that once publishers and customers have experienced good downloadable game distribution they won’t want to go back to archaic plastic and cardboard. So we will very soon reach a tipping point. After which plastic and cardboard will very rapidly be consigned to history.
And to see exactly what I am talking about you have to look no further than the iPhone App Store.
I have written before about 3D gaming. The effect is more impressive than it sounds when you see it done properly for real. Having depth is like going to the theatre when all you have seen in the past is the cinema. It is just so much more realistic. More importantly for games it is also more immersive And soon you will be able to see for yourself in major game releases.
Disney lead the way, as an extension of what they are doing in 3D movies. First up are the PS3 and 360 versions of G-Force, coming next month, just before the movie debut. 3D is achieved using the bundled coloured glasses and has impressed journalists. Toy Story Mania! for the Wii follows this autumn. These are mass market titles that have the potential to give 3D the breakthrough that it needs. But, unfortunately, the Disney marketing people are not going to town with the breakthrough they have, instead relying on halo effect from the crossover of the movie IP.
Avatar, from Ubisoft is a different matter and is being touted as “the first 3D stereoscopic title in gaming history”. Once again it is a film tie in but this time it is a co-development, with the game developers having input into the film and vice versa. The director is the famous James Cameron who will bring the highest creative and production values to the whole project. Already under development for 2 years it is scheduled for Q4 ‘09. Ubisoft probably have the finest reputation of the global games publishers so this whole enterprise will have massive credibility. History could look back on Avatar as being the defining moment when gaming made the step change to 3D. Just as the movie industry looks back to 1927 and The Jazz Singer when it made its step change to incorporating dialogue with the invention of the “talkies”.
As I explained at the beginning 3D makes games massively more immersive. But there is another upcoming technology that also massively enhances the experience, which is Microsoft Natal. And the very clever and very interesting thing that most people have missed is that Natal is also 3D. So we are talking about gaming with a 3D input and a 3D visual image. Can you just even begin to imagine how revolutionary this will be?
Game consoles are just specialist computers and so, like all computers, they obey Moore’s Law. This is something that it is very important to keep in mind when looking at the console generations. Moore’s Law states that the number of transistors that can be placed on a chip doubles every two years. So if a new console is launched 6 years after its predecessor it will be 8 times more powerful. This also means that a given game console should approximately halve its manufacturing cost every two years. It is this these realities that drive our gaming hardware forward.
Now let’s look at our current generation of HD consoles, the Xbox 360 (first available Nov 2005) and the PS3 (first available November 2006). These are both architecturally very different from their predecessors, the Xbox and the PS2. This meant that the whole industry had a massive learning curve to get games working well on them. We have now climbed that learning curve and are driving these machines to pretty near the max, so in pure processing terms games are not going to get much better on them.
The next generation of home consoles from Microsoft (definitely) and Sony (probably) will be just massively upgraded developments of the current generation. They will simply use the latest evolutions of the same CPU and GPU families. Their introduction will not be industry disruptive because they will be 100% backwards compatible. Not just with games, but also with online services like Xbox Live.
So when will we see these machines? It is simply a matter of choosing when to freeze the specification of the processors. The longer they leave it, the more powerful the machines will be. Moore’s Law. But there are huge advantages of being first to market, as Microsoft proved with the Xbox 360. So it is a matter of balancing commercial reality against computer power. In the past this balance led to new consoles being introduced after approximately 5 years. Which means that a new Xbox could be with us next year (2010).
But now we have Natal to muddy the waters. Natal is a step change in what video gaming can do and puts Microsoft a long way ahead of its competitors (presuming Natal works as advertised). So effectively adding a Natal unit to an existing Xbox 360 gives the user a jump in capabilities comparable with buying a new generation machine.
This brings us to two scenarios. The first is that the Xbox3 / Xbox 720 will be with us next year fitted with Natal as standard and that Microsoft just showed us the Xbox 360 version at E3 to demonstrate the technology. The second scenario is that Natal gives Microsoft breathing space to delay the introduction of a new machine by, say, a year. Thus making the new console significantly more powerful. Certainly Microsoft will have had many internal strategy meetings to work out which of these scenarios works best for them.
Currently the rumour machine is going for the first option and Microsoft aren’t denying it. Which would put the new machine in your local shop in 18 months time. Start saving.
I worked on the original Operation Flashpoint at Codemasters (I am even in the game!). At the time we were mainly a console publisher and were being hammered by PS1 piracy and the console transition. Things were so bad that 20% of the entire workforce were made redundant. And there was nearly zero marketing budget for Operation Flashpoint. So we concentrated on the online community and PR. And we got Flashpoint to number one in every country with a chart (and presumably loads more as well). So it pretty much saved the company.
That was way back in 2001. We had created a world class gaming brand. Yet, amazingly, no sequel has yet been released. This must be one of the most successful attempts not to make money in the history of the games industry. When I left Codemasters in 2005 I was sure that Operation Flashpoint was the biggest brand that the company owned, more valuable than all it’s other brands put together. And I was sure that it was possible to build a world class publisher on the back of it. But it is now 8 long years since the original release.
But, after many delays, we are promised that a sequel will be released this autumn, Operation Flashpoint: Dragon Rising. An opportunity for Codemasters to take on the world. But there is a big problem and that problem is Modern Warfare 2, the latest Call of Duty title, which will be released at around the same time.
Modern Warfare 2 is published by Activision, the world’s biggest game publisher. The Call of Duty brand first surfaced in 2003 to critical acclaim, scoring 91% on Metacritic and 92% on Game Rankings. Activision have milked the brand with four main versions and numerous expansion packs and spin offs. The fourth version was called Call of Duty: Modern Warfare and was the catalyst for splitting the brand in two. Going forward Call of Duty and Modern Warfare will be two separate brands.
So the marketing team at Activision have done the exact opposite of what Codemasters have done. They have milked the Call of Duty brand for every penny possible and built it into one (or two!) of the world’s greatest game franchises. For example Call of Duty: Modern Warfare was released in Q4 2007 (with Metacritic and Game Rankings both giving it 94%) and so far has sold around 13 million units, making it one of the world’s biggest selling games.
As you can see things are very interesting. Can Codemasters revive the Flashpoint brand and take on Modern Warfare 2? Or will they just be struggling for the crumbs that fall of the edge of the Activision table?
World of Warcraft is an amazing gaming phenomenon and is the cash cow of all cash cows. It has 11 million monthly subscribers, which is over 60% of the total world market for these games. And a lot of its success is down to the powerful combination of gaming and social networking.
Other game publishers have tried to compete by bringing out “me too” clones, such as Warhammer Online, published by Electronic Arts. In September 2008 they were reporting that they had sold 1.2 million copies of this yet by March 2009 they were down to 300,000 subscribers. If the might of Electronic Arts can’t crack World of Warcraft then who can?
The World of Warcraft killer will be a game like this. But most important will be the integration of social networking and gameplay, the combination that has made WoW such a success. And Free Realms, from Sony, could be showing us all how to do it. With 5 million subscribers after 7 weeks and growing at the rate of half a million new subscribers a week they have very quickly joined the ranks of the major players in this area. When it goes on Playstation PS3 it will be massive. And if they made it available for the 100 million plus PS2 owners in the world they could hit a whole new audience.
The critical factor with each of these games is the player demographic. A game targeted at too narrow an age group or at just one sex is going to have less WoW killer potential. It is essential to get the content and the marketing right to build the broadest possible community. It can be done.
