I remember back in the late 1990s at Codemasters when as a publisher we had just two platforms we could develop for. The PC and the Playstation. By then Sega and Nintendo had both pretty much screwed up.
So now we have platform proliferation. Which means that the public can vote with their feet by deciding which platform to play on. And game developers have to choose where to direct their efforts. Initially the public were choosing between the Wii, the PS3 and the Xbox 360 and fanboyism became rife. But now people are making far wider choices.
At the same time the PC came back to ascendancy as a gaming platform but with completely different kinds of games. In the late 90s the PC market was mainly boxed, retail, plastic and cardboard. These are all but gone now, wiped out by piracy. Instead the PC has emerged as a platform for online casual games and for MMOs. These have proliferated so that there are now hundreds of MMOs running, many with “free” business models. And they are being played by many tens of millions of people.
So any fool can see what is happening here. People are playing PC online and smartphone games in preference to console games. The PS3 and the Xbox 360 are probably selling at about half the rate that they should be at this stage in the cycle. The Wii has reached the inevitable point where its sales have collapsed and by not bringing the price down sooner Nintendo have lost impetus. Just at the same time that DS game sales have fallen off a cliff.
So you can see what is going to happen here. The home console platform holders, Nintendo, Sony and Microsoft, have a business model that is rapidly becoming obsolete. They are being completely outflanked. So they have no option but to change their business model to match. They have to go to server based games and also to the App Store business model. If they don’t their customers will leave them in ever bigger numbers.
Of course if I know this then the platform holders know it too, so it is not a matter of if they do it, it is a matter of when. And they are already making small moves in the right direction, Free Realms coming to the PS3 and full games being sold for download on Xbox Live, for instance. Another thing is very much for sure, high street game retailing is now going to die off far faster than anyone was expecting.
You have had some success on iPhone with a relatively small number of high priced titles and have recently set up 8Ib Gorilla for lower priced titles, which is highly commendable. However given the scale of what is happening on iPhone you are barely scratching the surface.
The AppStore has been open for a year, it has seen the biggest success of any new gaming platform in the whole history of video gaming. There are now about 65,000 apps published and there have been over one and a half billion downloads, how many of these are yours? Yet you are the world’s number two game publisher.
Electronic Arts is a publisher yet most App developers are not using publishers. I suggest that you find some very good reasons to change this, and quickly. Developers should think that it is better to come to you to publish their iPhone games than it is to go directly to Apple. Here is some of what you can do:
Provide tools and libraries to speed up development. Cross platform should be essential, for Android, possibly for nGage and for other upcoming mobile platforms such as Zune.
Commission Apps so people are writing the right things. Don’t overdo this as EA doesn’t necessarily know best.
Market the Apps you publish. Most Apps fail through a lack of marketing. You can use a wide variety of low cost methods to get global recognition of everything you publish
Finance as necessary. Most Apps are home written, so need no finance. But a few do. Also some developers may prefer a one off payment to waiting for royalties.
Your initial, very short term, target should be to publish an App a day. Very quickly you can gear up to what the market will bear. There are an infinite number of niches available for Apps, so there are lots of markets to go for.
The next step is to talk to Apple (and Google, for Android) and build a solid MMO business model. You think World of Warcraft is big, in a couple of years time there will be several iPhone MMOs that are bigger. Probably. One or more of them could be yours.
Unless you go for this full bore you are just rearranging the deckchairs on the Titanic, and speed is of the essence.
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.
