The guys that do the marketing for the big Hollywood studios know what they are doing, the games industry is in the dark ages by comparison. And movies have suddenly found a great strategic advantage over other entertainment media. One that is more than working. It is packing them in.

Stereoscopic 3D using polarising glasses is the hottest thing since the talkies. Avatar, which I have already written about, is the biggest grossing film in history. Yet now Alice in Wonderland out grossed Avatar in its first UK weekend. Cleverly Alice leverages the Johnny Depp brand to appeal to a different demographic to Avatar, so my wife liked it.

Obviously part of 3D is hype, marketing and the usual human/lemming behaviour. But part of it is also a step change in the immersive experience. The ability to suspend disbelief yet further.

Before Alice screened they showed a whole pile of trailers. All for blockbuster films and all 3D. How to Train your Dragon, Shrek Forever After and Toy Story 3 are destined to be surefire hits. It is a new golden age for the movie industry. The only caveat is that these are all Computer Generated Imagery (CGI) films. It will be impressive when Hollywood delivers a non CGI 3D blockbuster.

Whilst the movie industry has a lead in this jump to 3D it will not be for long, TV manufacturing and broadcasting are both heavily committed to it. Televisions are a commodity product, a rectangle of moving image. In recent times manufacturers have tried to use size as a differentiator. But you can only go so far. So currently in the market they are using thinness, which is not the sexiest of USPs. This makes 3D a very tempting technology to help maintain manufacturing margins. So the manufacturers are jumping in with both feet. Soon the market will be flooded with 3D sets and all those big flat screens sold over the last few years will be obsolete.

Time now for a brief technical interlude. Stereoscopic 3D works by fooling the brain. To do this it feeds a different image to the left eye and to the right eye. This is why you need to wear polarised glasses in the cinema, each lens is polarised in a different direction to only let through the right imagery for its eye. So the cinema needs to project twice as much onto the screen to maintain the same quality as 2D films. This is why the whole industry has invested a fortune in re-equipping.

Which brings us to video games. I reported on 3D gaming last year and again earlier this year. It definitely provides a compelling experience. But it requires us to put twice as much information on the screen if everything else about the game remains the same. But our current generation of consoles just don’t have the spare capacity, they are already working at full stretch to deliver the current crop of 2D games. Moving to HD was a big jump for the gaming industry and 3D is yet another big jump without much of a breathing space in between.

So every PS3 and 360 game developer now has a choice. Either create spectacular 2D graphics or go 3D with a lesser graphics quality. There is only so much processing power available and they have to decide what to use it on. This puts us a long way behind the movie industry who have already re-equipped to deliver the highest quality images and 3D at the same time. We are going to have to wait for PS4 and Xbox 720 to really do 3D properly.

Sony and Microsoft have different attitudes to 3D. It looks like Sony are betting the company on 3D. Every division and every product that can embrace it is doing so, big style. Televisions, movies, camcorders and of course, video games. This summer Sony are releasing a systems update for the PS3 to optimise it for 3D games. This can’t add in the power necessary to do the job properly, but it is a viable stopgap. If 3D continues to take off in the public perceptions this could give Sony a big strategic advantage.

Microsoft’s attitude is far more wait and see. They obviously feel either that 3D is a fad or that current technology isn’t up to the job of doing it justice. Or maybe even they are so tied up with Natal that they simply don’t have the resources necessary to do 3D. It is a big nuisance that two paradigm shifters like 3D and gesture interfaces should come along at the same time.

So let’s look at what this all means. If 3D really is our future then it is advantage Sony, in a big way. 3D is embedded throughout the corporation. If 3D is a fad then it is advantage Microsoft, they won’t have wasted resources chasing a rainbow. What is absolutely for sure is that it has accelerated the release of the next generation of platforms. We suddenly need the extra horsepower that Moore’s law always delivers for us in new machines.

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Mobile devices such as smartphones, netbooks and now tablets are becoming increasingly important as computing devices and therefore as gaming machines. In just a few short years from now over a billion smartphones will be shipped every year, so there will be far more computing power in the world’s pockets than there will be on the world’s desktops.

At the moment, as we are seeing with the sudden rash of tablets like the iPad, manufacturers are struggling to find the form factor that people will want. Let’s look at what is involved:

• Battery life. This is becoming unimportant as devices become massively more power efficient. ARM processors and OLED displays use a small fraction of the electricity of the technology they are replacing. So any form factor can be easily powered and devices will be “always on”.
• Keyboard. Essential if you want to do much data entry. Currently there are three levels of implementation. Firstly there are near full sized tactile keyboards. These are best but limit size reduction to what we now have with netbooks. Secondly there are micro keyboards like on a Blackberry, or in fold out form on the Nokia N900. These are much slower and more cumbersome to use. Thirdly there are the virtual, touch screen keyboards found on many smartphones and tablets. These have got better as hardware and software have evolved and have the massive advantage of being instantly reconfigurable. However they are still a long way short of a proper mechanical keyboard.
• Screen size. The bigger the better for seeing content, the smaller the better for portability. A left field option is the two screen clamshell, as with the Nintendo DS. Over a certain size of screen the device cannot be used as a phone, people will not hold a tablet sized device to their ear. This is why the current generation of smartphones all have similar sized screens. A way round this is to use a bluetooth earpiece but these are universally recognised as making their users look spectacularly silly. Perhaps fashions will change. It is also interesting that Amazon felt moved to offer the Kindle in a big screen format in addition to their standard size. A sure sign that they don’t know what size is best.
• Clamshell (or fold out keyboard) Vs monolithic (one piece design). Monoliths have the advantage of simplicity and is the way of the iPad and iPhone. However the clamshell has the massive advantage of quickly doubling in size on the journey from your pocket to being used. As we have seen keyboard and display size are critical so having double the space gives clamshells a pretty big advantage.
• Depth. For portability this is nearly as important as width and height. Clamshells currently have the theoretical disadvantage of being twice as thick as monoliths. However we are moving over to OLED displays which are as thick as a piece of paper. So all devices will get a lot thinner. A monolith could be just a few millimetres thick, so a clamshell could eventually be as little as half a centimetre thick (or less!)

It is difficult to predict where we are going here, because fashion will be nearly as important as technology. Common sense says that the market should gravitate into two sorts of devices. Firstly evolutions of the current netbooks, so clamshell devices with usable keyboards. However they will be at least half as thick and a third of the weight (battery size will go down a lot). Secondly evolutions of the current iPhone sized smartphones, but once again clamshell to take advantage of the doubling of space that this affords. With both these devices we could see two screen solutions. The DS could be a very prophetic device.

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In all the current excitement and hype about Android and the Apple iPhone and iPad people have seemed to lose sight of Nokia, this is a very silly thing to do. Nokia make about 40% (actually 39% last quarter) of all the mobile phones in the world, compared with Apple’s 2%. Nokia has 123,000 employees to Apple’s 35,000. Of the 52 million smartphones sold in the world in the last quarter 21 million came from Nokia, a 40% market share.

In the gaming world everyone remembers the Nokia failure that was the original nGage. They forget that Nokia Snake is on more machines than any other video game in the world.

Who owns the smartphone market is headed to become the most important factor in all of technology for the foreseeable future. To explain why we need to go back to Moore’s law (again). This says that the number of transistors on a chip doubles every two years. Compound. This means that a given chip halves in cost or doubles in power every two years. This is easy to see in the price and capabilities of the game consoles, mobile telephones and computers we use every day.Other, lesser, components are not governed by Moore’s law. But we are at the beginning of a display revolution that will see complex, power hungry LCD displays replaces by simple, cheap, elegant OLED displays, which will drop prices further and faster.

There are companies that tear down these electronic devices to work out how much they cost to manufacture. Currently this is around $180 for a top end smartphone. So in 24 months time this could be $90. And due to the compound nature of Moore’s law this would be just $22 in 6 years time. You can see that at this price non smartphones have had their day. All new phones will be smartphones. And we are talking about a billion new phones every year.

A billion new smartphones is a billion new computers connected to the internet. It is also a billion new gaming machines. Every year. This is going to be revolutionary. It is going to put so much power and so much capability in the hands of so many people. It is going to totally dwarf the computing power in all the world’s desktop computers and it will make game consoles look like a small sideshow. It will be the biggest democratisation of knowledge and the means to use that knowledge in human history.

So if Nokia can hang on to owning 40% of this they will be the biggest computer company on earth. And if you look at what they are doing right now there is no reason why they won’t. They may lack the showmanship of Steve Jobs but they are more than making up for it with great products that people want.

The N97 Mini is a very well made, very well featured evolution of the less than stellar N97. With a fold out keyboard it can take some serious use and it represents serious value for money. The 5800 has been honed by Nokia to be a brilliant non keyboard smartphone and is available both with or without the XpressMusic service. And the new N900 is a fantastic, fully featured top end smartphone. These three devices (and others) are why Nokia can command a 40% smartphone market share and must be giving their competitors sleepless nights.

It is not just the hardware. Nokia are covering their bets by having two different operating systems. Symbian is now open source so expect more rapid development to build on it’s ten years of development that make it the most fully features smartphone OS. Which is why it is on more smartphones than any other OS. Maemo is also mostly open source. It is a clean sheet of paper, state of the art, linux based OS and it is what drives the new N900.

Ovi is the online portal for Nokia smartphones, it is an App Store, an iTunes, a Google Maps, email, file storage and sharing service and so much more. It is where nGage now resides. Ovi is the most comprehensive suite of online services currently available for a smartphone.

By now you must be getting the message, if you are in the game industry you ignore Nokia at your peril. If you develop smartphone games they need to be on Ovi, not just Android and iPhone. And if you don’t develop smartphone games then you are going to miss out. Massively.

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The Wii isn’t clinically dead yet, but its best days are well behind it. Sales are massively down, and with that so are Nintendo’s profits and their share price. So they must do something soon, not so much for their gaming audience and fanboys, but rather to keep their investors happy.

The Wii was always just Gamecube V1.5, it was not truly a machine of the current generation like the Sony Playstation PS3 and the Microsoft Xbox 360. It lacked the power and it lacked the HD graphics. But to make up for this it was cheaper, it had that breakthrough gesture interface and it had a catalogue of amazing Nintendo first party games that were must haves for any keen gamer.

The problem now is that the Wii no longer looks cheap, the cupboard is pretty bare of first party titles (most third party titles having missed the mark) and the gesture interface is looking old hat compared to what the competition are about to unleash.

Now, the people that run Nintendo are not fools, they know all of this better than I do. So it is obvious that the successor for the Wii is already designed, that the first party studios are working on games for it and that production is just about to start. So the Wii will be discontinued with about 68 million units made, it will be interesting to see if the Xbox 360 can catch up with this figure over the next five years.

The new machine, if Nintendo keep to their previous naming rules, could well be called the Super Wii. Moore’s Law tells us it will be about four times more powerful than the Wii. And the market tells us that it will be HD. Obviously it will be backwards compatible. But this specification, on its own, will not be enough to compete. Nintendo need to do more. Much more.

Satoru Iwata is the president of Nintendo and he has just given an interview that reveals much of their thinking. It is in Japanese but with the magic of Google Translate you can read it here. And he says that HD is not enough, that Nintendo will be doing something new.

Over three years ago I wrote an article in this blog entitled What is Nintendo? That article is just as true now as it was then and mirrors much of Satoru Iwata’s thoughts. The key here is that Nintendo is an entertainment company first and foremost, they are not a hardware or a software company, it is just the entertainment that matters. And they use technology and innovation to provide this entertainment.

So I don’t know what to expect. They know that they need to innovate, so they could do just about anything. The only thing that is for sure is that it will be fun.

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The Microsoft Entertainment and Devices Division was able to start the year by telling the world that they are three times more profitable than they were a year ago. Q4 ’09 profits from the division were $375 million, compared with $130 million for Q4 ’08. The increase comes from Moore’s law bringing down hardware manufacturing costs and from the ever increasing user base buying proportionately more software and Live services, which are a lot more profitable than hardware.

The Xbox 360 also currently heads the game sales chart with Mass Effect 2 and are by far the most popular platform for the monster hit that is Modern Warfare 2. This presages a year in which there will be a succession of huge titles that are not available on the other consoles. Halo: Reach, Fable III, Tom Clancy’s Splinter Cell Conviction, Alan Wake, Crackdown 2 and Scrap Metal for starters. For any game enthusiast these make owning a 360 essential, even if it is in addition to owning other consoles.

On the hardware side Microsoft are starting to roll out 250GB hard drives. And this autumn we have the much anticipated release of Project Natal. Microsoft have changed the design slightly to reduce the hardware by doing more in software (using 10-15% of the 360s cpu resources), this is to keep to the $50 price target and to increase the flexibility of the device. At this price Microsoft expect to sell several million units in the ’10 holiday season and so there is impressive game support coming from publishers. Pretty soon around half of all 360 owners will probably buy Natal and they will want Natal enabled games to play on it. Expect a surge in more family friendly titles, which will take the 360 to new demographics, further enhancing its success.

All is not sweetness and light at the Microsoft Entertainment and Devices Division, though. Their mobile strategy has been an unmitigated disaster with Google and Apple trampling all over them. This is the biggest possible problem for Microsoft as mobile devices are set to dominate computing and the internet. Even if they continue to dominate the office and grow to dominate the living room they could still be beaten by the owners of the mobile space.

Finally let’s risk making a prediction for the next generation of Microsoft home console, the Xbox 720, Xbox 3 or Xbox Phoenix. It is inevitable that Microsoft must do this because Moores law will leave the Xbox 360 looking less and less powerful. They will produce a scaled Xbox 360, so it will be backwards compatible. The new machine will have many more features and benefits such as 3D. It will be announced, probably at E3, in Q2 ’11 and will be available at retail Q4 ’11. Expect it to be 8 times the power of an Xbox 360 (Moores law says it will be) and expect the 360 to stay in production as the junior model in a two model range, retailing for $100.

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I first wrote about stereoscopic 3D in video games last May after seeing a Blitz game technology demonstrator and realising that it brought something new and good to the gaming experience. Since then I have written about it sporadically, most notably after seeing Avatar. So now I am convinced that it is a part of our future and that it usefully aids immersion and thus emotional engagement with a game.

And I am not the only one to think this. Las Vegas from January 7 to 10 saw the 2010 Consumer Electronic Show (CES) and it was one massive 3Dfest with all the world’s major consumer electronics manufacturers lining up to shout about where they are going with 3D and what products they will be offering to the consumers. This is the step change of the title.

I have said many times that the current LCD televisions are just an interim technology. They aren’t very good in most ways. This makes the TV manufacturers very happy indeed because soon tens of millions of consumers will be forced to throw their TVs away. Yet again. Apple are the masters of planned obsolescence with the iPod, it looks like the rest of the consumer electronic industry has been taking lessons. OLED and 3D will be the must have features for all the world’s living rooms just as soon as the factories can crank them out.

And remember that the futurologists are predicting that we are heading for a world where there are several televisions per person. You can see why, we become steadily wealthier and the cost of a television becomes less and less of a significant factor in buying one. This will become more marked with the ultimately cheap to make OLED technology. At the same time what a television does functionally in our lives has been increasing steadily. Originally they just showed real time broadcast material, now they are the key component of the entertainment hub, connected to all manner of other electronics and having considerable processing power of their own. I cannot see all screens going to 3D, but it will be essential for the main static viewing televisions.

Then there is content. This year the Western movie industry will produce about 170 feature films. Of these at least 20 are planned to be available in 3D. Partly this is the Avatar effect, partly it is the technology and customer awareness reaching critical mass. Soon nearly all movies will be filmed in 3D. Then there is broadcast television content, this is already happening, with sport being the obvious initial beneficiary. Watching soccer, darts, snooker, cricket etc with a stereoscopic 3D perspective will make 2D history very quickly. Which brings us to video games. From what I have seen the enhancement 3D brings is remarkable. Every developer and publisher should already have their 3D strategy mapped out.

Perhaps the biggest industry mover for 3D is Sony. It is almost as if they have bet the future of the company on it. Howard Stringer says: “We intend to take the lead in 3D. We are the only company fully immersed in every part of the 3D value chain”. This means their Bravia televisions, their Blu-ray players, their movie studios, their video cameras. And their game consoles. Sony have a strong and powerful strategy in place for the Playstation PS3 as a 3D gaming device. If they are quick and decisive they can at long last give themselves a competitive advantage over the Xbox 360.

Of course, like any electronic innovation, we need standards. It will be no good if every hardware manufacturer and every publisher implements 3D in a different way. The standards for gaming 3D are organised by Khronos and I suggest that everyone involved in the game industry takes a regular look at their website. Here is what they have to say about themselves: “The Khronos Group is a member-funded consortium focused on the creation of royalty-free open standards for parallel computing, graphics and dynamic media on a wide variety of platforms and devices. All Khronos members are able to contribute to the development of Khronos API specifications, are empowered to vote at various stages before public deployment, and are able to accelerate the delivery of their cutting-edge 3D platforms and applications through early access to specification drafts and conformance tests.”

From a gaming perspective it is important to keep an eye on the fantastic NVIDIA 3D technology and to keep in mind that Microsoft Natal is a 3D input device that would integrate fantastically with a stereoscopic 3D display.

Overall 3D is going to be of massive benefit to the gaming industry. Not only will our content be more immersive, suspending disbelief yet further, we will also have a flowering of creativity. And it will be a massive boost to the market as hundreds of millions of consumers seek out new experiences. We will rise the the challenges this presents, it is another big step in the development and growth of gaming as the premier entertainment media.

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This is why new game consoles are so expensive and become so cheap after a few years. It is why we have a flood of ever more powerful and ever cheaper consumer gadgets. And it is why Bill Gates said that people overestimate technology change in the short term but underestimate it in the long term.

Moore’s Law also means that it is now very cheap and easy to put processing power in just about every electronic and electrical device, even the humble toaster! And one device in every home that has plenty of processing power is the television. This processing power could (and is) very easily used to play games. In fact I have written on here before that the increased processing power of televisions could be such that you won’t need a game console, that games will just become a service freed up from hardware constraints.

Which brings us to PlayJam, the leader in television games. They started in 1999. As it is now 2010 Moore’s law tells us that televisions already have 32 times the processing power than they did back then. In four years time it will be 128 times the power. As I said Exponential is powerful.

And so PlayJam can also grow exponentially. Currently they are in 30 million homes with 550 casual games and have generated 8 billion downloads in the last five years. Impressive. But it is going to get a lot more impressive still. With deals announced with Sony, Samsung and others announced at CES PlayJam are going to ramp up to 450 million devices.

So interactive television is going to be a more numerous gaming platform than all the game consoles put together. But it will still be miniscule compared with smart phones. These are also the recipient of the Moore’s Law bounty and will soon be churned out at over a billion units a year.

I have said from the start of this blog that we are still at the beginning of gaming as an industry and as a global phenomenon. Now, hopefully, you can see why.

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Just over a year ago I was talking on here about netbooks and how big they would be. And so it happened, in 2009 their market share in portable computing went from 5% to 25%. And quite right too. Offering just the power you need and outstanding portability, netbooks are a very effective tool for a huge array of tasks.

But I also warned that netbooks were an interim technology. They are held back by the need to adhere to the old Intel/Windows hegemony. Mainly because there were no viable alternatives. Also they arrived just as we were on a cusp of display technology. LCDs are not very good for displays, whatever way you look at it. Power hungry, fragile, over complicated, expensive to make and giving a poor image quality they are only used because of the lack of alternatives. Now OLED is making its presence felt all those disadvantages are being swept away.

OLED displays bring a massive power saving, but so does dumping Intel processors for the far more elegant ARM based computing. The big problem here is that the Intel processors have the heritage of over 30 years of software and ARM has a lot of catching up to do. This is especially felt in the areas of operating systems, browsers and all those utilities you take for granted like Flash, media players, email, pdfs and so on. No matter how good the machine you have to be able to use it.

This brings us to the ongoing war between Google and Microsoft that we are all benefiting from. Microsoft rescued Windows XP from the ashes to become the OS of choice for netbooks, but it is still bloatware. Google saw the opportunity and with amazing overkill decided to give us two new operating systems. Android is intended for smartphones and is rocketing in popularity, however it is already working very happily on far larger devices and runs on Intel, ARM and other processors. The Chrome operating system is a development of the Chrome browser and is available for both Intel and ARM processors.

So now, increasingly, manufacturers of portable devices can choose between processors without putting users at a software advantage. And increasingly they are choosing ARM. These ARM processors are made by a variety of chip manufacturers competing against each other so there is a huge pressure to get them into devices. Their biggest advantage is their immensely energy efficienty as their heritage includes a lot of mobile phone applications, this makes them ideal for Slate computing.

With all the above information you can see where we are going, there will be a whole new generation of devices (over 30 product launches in the next three months) that are some way between a laptop computer and a mobile phone. They will use OLED displays and mainly ARM processors, this will give them such low power consumption that they will always be switched on, like a mobile phone. Some will use keyboards, some touch screens, again just like mobile phones. These devices are so new that they don’t even have a name, some are calling them tablets, some smartbooks and some slates. And prices will start at below $200.

And the highest profile launch will be from Apple. On January 27 Steve Jobs will announce the iSlate at the Yerba Buena Centre for the Arts in San Francisco. The air is thick with rumours. That there will be two models with a 7 inch and a 10 inch display. That it will incorporate some elements of 3D. That its inbuild camera will be supported with powerful image recognition software. And that it will be a strong media player and that deals with major content providers such as TV companies have already been signed up. We are all sitting on the edges of our seats for this one.

But we need to put this whole market into context. Smartphones will very soon become the most common computing devices on earth. Over a billion a year will go into use. These slates/tablets/smartbooks will just be a subset of this market for people who need bigger screens and enhanced capabilities.

Which brings us to gaming. As the iPhone has already proven this will be one of the main uses for all these devices. We are entering a stage where the dedicated gaming machine is being abandoned in favour of general purpose devices that also happen to play games.

Meanwhile look at these predictions from2007!

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If you haven’t seen Avatar yet then you owe it to yourself to correct this omission as soon as possible. Avatar is a hugely significant jump in what constitutes human culture and its ramifications will impact heavily on the future of all entertainment media worldwide. Gaming will be influenced enormously.

I have written here before about entertainment media increasingly supporting just two sorts of output, blockbusters and niche products. We are seeing this in games, television and in film. Avatar is the blockbuster of all blockbusters. Rupert Murdoch invested $300 million in the making of it. Already it is the fastest film to reach a billion dollars of box office receipts. These are heady figures but, increasingly, this sort of commitment will be what is needed in order to play with the big boys. Which in turn will lead to further publisher consolidation so as to be able to handle the financial risk. Middle sized IP publishers will just not be able to play with the huge numbers involved.

Obviously Avatar is a global release. If you are not global then you will be out performed by competitors that are. Only global sales can bring in the returns necessary to fund the huge investments.

Avatar is a technical tour de force. Real film footage seamlessly integrates with motion capture, CGI (Computer Generated Imagery) and, my favourite, true facial expressions on the CGI characters. Humans communicate emotion using an array of facial muscles which are in continual movement. Previous CGI attempts (Gollum, Jar Jar Binks) to replicate this have been less than convincing, making a mouth wider is not a realistic smile. Avatar got round this by continuously recording the actors’ faces during motion capture and then merging the footage of the expressions into the CGI. There are lessons here for the game industry as we continually strive towards realistic representation.

Another lesson of Avatar is that it is new and original IP. This is not Jaws 47, or whatever. Avatar is part one of a planned trilogy. The second and third parts will obviously be easier to make as all the groundwork is done. However as old IPs become tired we need a constant pipeline of new IPs to serve to the public. Whilst some, like Hornblower, Biggles and Poirot are strong enough to survive many iterations, most reach their sell by date much earlier. Console gaming has been very weak for new IP, especially from third party publishers. We really do need to allow creativity and imagination to flower and Avatar can be held up as a superb example of how successful this can be.

Then there is 3D. The temptation is to use 3D to create spectacular effects. The problem with this is that it reduces the audiences’ sense of immersion. Avatar, very cleverly, does the opposite and uses 3D to increase the sense of immersion. It is an immense success and surely sets a benchmark for the future of 3D in screen based entertainment. 3D is set to become the norm for films, television and gaming. A whole new age has just opened up.

Of course the success of Avatar is not just down to artistic merit. As I have pointed out on here marketing is three times more important than game quality. So it will come as no surprise that Murdoch invested $150 million into the marketing of Avatar, for a total spend of $450 million in bringing this film to its public. There is no point in making fabulous IP if you don’t communicate effectively with your potential customers.

The overall effect of this (and very much more that went into Avatar) is to create a must see event. The force of compulsion to see this film is immense, making it a significant collective human experience. Also, like the original Star Wars trilogy, it will support repeated viewings and will enter into the human psyche. Video games are still a long way from doing this.

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Way back in 2007 I wrote here: “One of the biggest issues and trends in gaming is the way that gaming is drifting towards social networking and vice versa. So eventually they will meet in the middle and make up one big industry.” And so it has happened, the two have moved relentlessly together.

Rupert Murdoch is turning MySpace into a gaming platform. Alex St. John has joined hi5 as president in order to transform it  into a social entertainment hub. Electronic Arts has bought social networking games firm Playfish, which makes games for Facebook and MySpace, for possibly $400m. Microsoft Xbox Live has not only steadily added social networking features, it now even hosts Facebook. Take Two CEO Ben Feder has said: “Social network games is an area that promises to deliver a true mass audience to the videogame world”. It goes on and on.

And it is inevitable, firstly because human nature has us as playful, social animals. Secondly because of the connectivity and interactivity of gaming. And thirdly because of the fundamental game mechanism of being rewarded for using skills or assets to solve a problem.

From a game industry perspective the obvious course of action is to maximise the social networking potential of every game and to ensure that your IP is earning its keep on the big social networking sites. Also you need to stay on the ball, this is an area where changes and progress are rapid.

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