This makes absolute complete and utter sense. People buy perceptions, not reality. And people are far more concerned about peer pressure than they are concerned about their own judgement.

There is a make of car that is distinctly average. In fact some of the smaller models are not very good at all. Yet it manages to sell extremely well despite selling at a premium price. Because people want to be seen behind the badge. They will pay thousands of dollars in premium to buy just a few dollars worth of chrome and enamel badge. And most people buy silver and grey ones, because that is what everyone else does. All due to the power of marketing. The brand is presented as sporty which is just the image every housewife wants when she does the school run. Customers just don’t realise when they are victims.

If you are a game developer and you tell your mum about the game you are working on then that is marketing. Marketing is any communication. So it is a fact that a game with zero marketing will have zero sales.

Over the years I  have never seen a game get the sales that it deserved just for its quality. Yet I have many times seen a game get far more sales than it deserves because of its marketing. And I have also seen many good games fail because of bad marketing.

Just look at the five games I was writing about yesterday. They are virtually identical yet they have massively different numbers of players. The difference is just the marketing. Marketing is more important than the game, this is a self evident truth.

Yet still there are very many game publishers who do not understand this. Many self and small publishers on the iPhone App Store, for instance. There you can see that marketed games sell well, non marketed games sell badly. It has precious little to do with the quality of the game. (Unless it is a total dog).

Now EEDAR has done research in the game marketplace from which they say “Marketing influences game revenue three times more than quality scores”. And actually the difference is even bigger than that, because the scores form part of the marketing!

So there you have it. If you want to sell more games and make more money then send me an email and I will come and sort it out for you!

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There are now many hundreds of millions of people playing video games. It is inevitable that many millions of these are great gaming enthusiasts and that many of these want to work in the video game industry. My advice, based on 30 years in and around it, is don’t. And here’s why:

• Playing video games is fun, it is entertainment. So you might think that making video games is fun. It isn’t. Not more or less than other jobs. Because that is what it is, just another job.
• People who are industry wannabes always say that they want to be game designers. This is because they don’t know how a game is made. In fact there are very few game designers involved. On any development team the main sort of people are artists (of different sorts) and programmers (of different sorts).
• Being keen about video games is no qualification whatsoever for working in the industry. Being a good computer programmer or artist is a much better basis. Even better is to be very good at maths. Game companies want people with the skills to make games and being an enthusiast isn’t a skill.
• The competition to get into the game industry is fierce because there are so many wannabes. So the industry can be very, very choosy. When I was at Codemasters the minimum degree to get in was a 2.1 and you had to score over 130 in an IQ test.
• Because so many people want in the wages are terrible. Similarly qualified graduates going into other industries will typically earn a lot more.
• If the wages are bad then the working conditions are worse. Crunch is a widespread practice in the industry. Huge numbers of hours of unpaid overtime.
• Career advancement is typically very, very slow. This is because most of the jobs are at a similar level, programming and creating art.
• The work itself is often tedious, repetitive and boring. It is a hard slog to create all the dots that you see on the screen. There really are lots of better and more interesting jobs in the world.
• Job security is awful. Companies routinely get rid of people as the work flow fluctuates. No matter how good you are it is ridiculously easy to find yourself out of a job.
• The training industry has jumped onto exploiting the wannabe. Lots of colleges and universities have jumped on the bandwagon. There are now hundreds of supposed game industry courses in the UK. Yet amazingly only 6 of these are accredited by Skillset! There are now more people in training for the video game industry than there are in the industry. The vast majority of these people are wasting their time and money.
• Game companies are mainly not very well run. This is because it is an immature industry and the management skills and practices are just not there. It is much, much nicer working in an organisation that is run properly. Which you are far more likely to find outside gaming.
• The industry is firing, not hiring. Lots of game studios have closed, many have shed jobs. Electronic Arts alone is shedding 1,500 people. There are lots of very good, very experienced game developers who can’t get a job. Against that newbies don’t stand a chance.

The proof, as they say, is in the pudding. And over the years I have seen lots and lots of people leave the video game industry. They move to other industries where the work is better, they earn more money, they get promotions and they have job security.

If after all this you are still determined then I have some advice. Don’t train for the video game industry. Instead train to get a very good qualification that the game industry needs but which you could use in other industries. Maths and physics are the prime examples. There is a huge shortage of graduates in these subjects, so you would be far more attractive to a game company. Good artists and C++ programmers are more common, so less valued. But they are still both qualifications that can be used in many industries.

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I opened one of the first computer stores, Microdigital in Liverpool, in 1978. So I was in a good position to see the rise of Apple to dominate the personal computer (PC) market. I even visited Apple in Cupertino in California and was offered the UK distributorship. So this put me in the front row as they built up to own the market, then threw it all away.

Apple computers were well made, came with excellent documentation and were easy to use. All of which was not necessarily true of the competition. Apples were also expensive but were worth the extra. They became a bit of a cult, a fashion item, as well.

The big strength of Apple computers was that the software and the hardware came from the same company, so they worked. The resultant dominance in the early 80s was such that other PCs might as well not have existed. Apple had a virtual monopoly. Then along came Microsoft’s MSDOS and changed the rules. Here was a standardised operating system (and consequential applications) that would run on machines from many hardware manufacturers. So the hardware manufacturers had to compete against each other on price and features. And it was war.

The result of this war was the survival of the fittest, rapid evolution that improved the breed. And Apple was left well behind looking underpowered and overpriced, they could not even vaguely get near competing with the MSDOS machines. So Apple’s market share collapsed and they fell back to serving niche markets such as pre publishing. In just a couple of years they went from near monopoly to sideshow.

And history could very well be repeating itself. Substitute Personal Computer with Smartphone. And substitute MSDOS with Android. Otherwise it is the same. Apple dominate the consumer smartphone market with the iPhone. The hardware and the software come from the same company and it works. It is a fashion item, a bit of a cult. Android, however, is available to all hardware manufacturers. Most of them are developing models that use it. So they will have to compete against each other on price and features. It will be war with rapid evolution improving the breed. Already the Samsung i7500 looks better featured than an iPhone.

Some may think that the tens of thousands of applications on the App Store make the iPhone entrenched. But remember that these were put together in a little over a year, so Android can do the same in a year. Just as Apple’s dominance of PC application software was quickly overcome when the MSDOS computers arrived on the scene in big numbers.

Of course Steve Jobs and Apple, having been there before, may have the answer this time. They need to entrench their position, which they are doing by going to multiple air time providers in each territory and by going to new territories. But Android will be doing all this too. They need to very rapidly advance their hardware technology. There is plenty of room to do this, the iPhone has a rubbish camera and no OLED screen, for instance. And the iPhone operating system has lots of room for improvement. But Android will be doing all this too.

Apple are moving on from the iPhone with a tablet device and probably a home console. Maybe this is their strategy. Don’t compete, move on.

The one saving grace that Apple have here is their brilliant marketing. In fact, to me, Apple are a marketing company first and a technology company second. Compare and contrast that with Google who have a trail of great products that have failed due to poor, almost non existent, marketing. But Android is different because it doesn’t need Google marketing, it will be marketed by all the handset manufacturers and air time providers. Companies like Vodafone, Sony Ericsson, Sprint Nextel, Samsung, Motorola, LG, Toshiba and Garmin. Formidable, isn’t it?

Now for the gaming perspective. The iPhone and App Store have produced the biggest flowering of gaming creativity in history. In terms of range of products they have left every other platform behind. However the business model employed here is easily copied. So we are moving into a new age where the iPhone game publishers will maximise their profitability by going multi format. Develop for Android, iPhone, PSP, DS and possibly PC simultaneously and reap the marketing benefits. It makes sense.

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You may think that with tens of millions of bloggers and millions of forums that we live in an age where there is a free flow of knowledge and information. That you can go to Google and get a balanced and rounded view on any subject by reading the results of a search. And you would be very wrong.

The mechanism for the wholesale denial of free speech is the English libel system. Here are some of the factors at play:

• A plaintiff can sue you for libel and make a whole list of grievances. They don’t have to prove that any of these are the truth. It is up to the defendant to disprove each claim to the standards required by a court. So the whole system is weighed very heavily in favour of the plaintiff.
• Going to court to defend a libel claim is immensely expensive and there is no legal aid. Many cases now get to over a million pounds in legal fees.
• Libel tourism is a reality with plaintiffs now making London their city of choice when they want to take action because the libel laws here are so repressive. This alone should tell you that there is something wrong.

Once you realise the above you can see what the mechanism for suppressing free speech is.

• A company does a Google search to see what is written about it on the internet.
• The company gives a list of all the stuff it doesn’t like (whether it is the truth or not) to an English solicitor.
• The solicitor writes letters to all these websites threatening legal action.
• The solicitor also writes to the website hosting company threatening legal action.
• The owner of the website and/or the owner of the hosting company immediately remove the content, they have no option because of the financial consequences of the threat.
• The internet is censored and no longer tells the truth.

This mechanism works for getting the truth off the internet as well as lies, because it is not tested. The authors and site owners are in no position to defend their content. And once the content is removed it is removed for the whole world. So a heavy handed bully in London will deny free speech in America, Canada, everywhere.

This mechanism is now being used on a massive scale. Solicitors in London are making a very nice living by processing large numbers of these threatening letters. Vast amounts of internet content is being removed. And of course it is the bad guys, the people with something to hide, who use this mechanism most. So the world is denied the knowledge that it most needs for people to protect themselves.

What is deeply ironic is that the blogs and forums that are being acted against have a built in reply mechanism. So when somebody sees something that they think is wrong then they can say so. This happens  millions of times every day. These sorts of websites are far closer to a conversation in a pub than they are to the printed newspapers that the libel laws were intended for. So all sides of an argument can be discussed.

And so to Bruceongames. The success of this blog means that it now comes near the top in many Google searches. And I am often saying what I think about companies. (In law this is called fair comment and is allowed). So I have been threatened with libel action now by two companies. Evony and Train2game. Evony are taking the action in Australia because it is almost the same as English law (and there is a reciprocal arrangement for collecting judgement) but I have the added inconvenience of trying to defend myself on the other side of the planet. Train2game seem to have succeeded in removing a lot about themselves from the internet. I have also temporarily removed my article about them, even though it is 100% truthful, whilst I consider the implications. Another successful censoring of the internet.

But remember that the internet is archived. In the short term Google archive many sites, so going to the archived version will reveal what has been removed. Then there is the Waybackmachine, which stores 150 billion internet pages going back to 1996.

The best defence against a vexatious plaintiff is the Streisand effect, a good example of which is in the video above. By taking inappropriate action the plaintiff opens themselves up to far more publicity, scrutiny and ridicule than if they had kept quiet and done nothing. There is even a website devoted to people and companies who have brought this upon themselves.

Finally, never, ever host a website in England. Hosts here have been proven to pull the plug on websites at the first whiff of a solicitor’s letter.

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This is a very sensible and valid subject for discussion. Unlike books and films, which are purely sedentary, games require input. With the introduction and vast popularity of gesture interfaces, led by the Wii, the scale and nature of possible game inputs has changed drastically. Sometimes requiring substantial effort.

We have Wii Sports as being one of the best selling video games of this generation. Equally striking has been the uptake of the balance board and Wii Fit. And all the “me too” shovelware from myriad lemming publishers trying to cash in.

And it is not just the Wii. Games like Guitar Hero and Dance Dance Revolution have brought much physical activity to other consoles.

Of course the gesture interface genie is well and truly out of the lamp now with Microsoft and Sony following Nintendo’s lead, in Microsoft’s case with a greatly technically superior proposition. So the future of gaming is well and truly the gesture interface. Which is a good thing as it is more natural for users and vastly more immersive, which is the holy grail of what we do.

So games will take more effort. There will be games that are specifically designed to do so. But all games will, by the very nature of the interface, go in this direction. Games will be simulating real (and unreal) world environments and real world physical  activities. Tomb Raider will reward athleticism.

Meanwhile in the real world children are wrapped in cotton wool and not allowed out, because it is well known that there is a paedophile hiding behind every lamp post. So children are getting less and less exercise and so childhood obesity in the West isn’t just common, it is prevalent.

This means that if junior spends two hours a day playing games on his/her gesture interface then it is going to be their main form of exercise for the day. Add to that busy parents using gaming as a catharsis for all the woes in their lives, young professionals using gaming instead of the gym and pensioners using it to increase both their life quality and life expectancy and we have a lot of people getting their exercise from video games.

So there is a very real chance that in the West, at least, video gaming will become the main source of exercise. Which is ironic when you see video gaming being demonised by idiots for exactly the opposite.

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I was actually in at the very beginning of this in the late 70s and early 80s. Back then if you wrote a game you had to manufacture, market and distribute it yourself. You became a publisher because there was no other way to market. This is what happened at Bug Byte and Imagine in Liverpool, the owners of the companies were, initially, the guys that wrote the games. Once you were up and running, other game writers, who couldn’t be bothered with all the publishing work, came to you and asked if you would handle their stuff too. This was the beginnings of our industry.

So what do game publishers actually do?:

• Provide finance for the entire industry. This is not just paying studios, in stages, to develop a game. It is also the publishing costs which can often be far, far more. For one top console game the total cost is now into the tens of millions, so this isn’t insignificant. However, some development studios make the big jump to self financing their work, then they own the IP and can choose how it is published.
• Take the risk. This is a pretty big job, especially for current generation console games, most of which don’t make a profit. This is partly why many of the world’s biggest publishers are making losses just now whilst the industry booms.
• Market the game. It is a simple fact that with zero marketing a game will have zero sales. The game industry is a very young and fast changing industry so much of its marketing is inefficient and over expensive. Which means that many publishers aren’t doing a good job here, another reason for their losses. However what marketing expertise there is in the industry resides mainly with the publishers.
• Create and build brands. A lot of the industry for a long time just piggy backed other people’s brands, so had no equity in their IP. We used films, books and celebrities. And it wasn’t good. Now the industry is growing up and nurturing its own brands with some startling successes (GTA) and a lot of painful growing pains.
• Physically manufacture, warehouse and distribute inventory. Logistics. This is a huge pain. Vast amounts of plastic and cardboard are used to move digital information around the world. The problems boggle minds. Just getting the timing of everything and the inventory levels right is impossible, it will always go wrong. So retailers are out of stock of one game whilst another game is remaindered in the discount bin.
• Manage the whole industry. People only buy consoles to play games. The games are everything. And the publishers have total control over the games. So they have total control and power over the industry. So they decide what happens, how it happens and when. A big responsibility and, to be fair, they tend to try and act for what they perceive to be the good of the industry. We don’t have any significant Enrons yet.

The most important thing about the traditional game publishing business model is that there are enormous competitive advantages of scale. The bigger you are the easier it is to run your business, if you much smaller than the biggest players then you simply cannot compete. This is why we have seen so much publisher consolidation, the laws of economics mean there should only be a handful of global publishers. It is what happened to film and recorded music.

However events are not just conspiring against global publishers, they are conspiring against publishing per se.

• The cost of making games is, in many cases, coming down. This is partly down to better tools, libraries and middleware. It is also down to the far smaller scale of product required for many platforms, including some of the big ones like XLA and XNA. Which means that we have returned to the age of the bedroom coder, or to loose affiliations of a few people working together on a project. This has become massive. There are now more games being developed this way than in formal studios.
• With the above the risk has come right down. You make a game in your spare time, if it works you buy a fast car and a holiday, if it doesn’t you just shrug your shoulders and try again. Which is exactly what happened in the old 8 bit days. I know, I was there!
• Platform proliferation. This has really crept up on us. About a decade ago there were two viable platforms, the Playstation and the PC. Now there are lots. Xbox 360, PS3 and Wii, each of which is multiple platforms because of the online offerings. Xbox 2,  PSP, DS, iPhone, Android, nGage and of course the PC, which is also now mutiple platforms with casual gaming, MMOs, portals, boxed games etc etc. A big global publisher just cannot do it all any more, they have to cherry pick.
• Product proliferation. It used to be very simple, there were a handful of genres and it was easy to keep up and publish a stream of releases into each one. Now we have total fragmentation, an infinity of genres. Just look at the thousands of iPhone games to see how diverse and sometimes bizarre gaming has become. This has left the big global publishers dead in the water, they don’t understand what is going on and even if they did they are too slow witted and cumbersome to do anything about it.
• Marketing has changed and much of it is now free or nearly free. The traditional big publisher marketing model of throwing millions at television advertising is outdated, inefficient and an immense waste of resources. But they continue because of inertia and because they know no better. These days we have something called the interweb and with no money (or very little) and a little time you can run a very effective global marketing campaign. And the smart people are. Popcap is a prime example.
• Digital distribution. This is the big one. Without plastic and cardboard it is difficult for publishers to justify themselves. As we have seen with iPod, once you remove physical inventory most games come to market without a publisher. This leads to an explosion in creativity as tens of thousands of new games appear that a publisher would never have given the time of day to.
• Brands. The publishers have actually been mostly very bad at creating and building brands. It is a new thing to most of them and they don’t know what they are doing a lot of the time and it shows. Individuals can build brands too. They often have in history. All it takes is an instinctive feel for the brand experience they are creating, the brand image they are presenting to the world and the brand values they need to maintain and they have cracked it. The Oliver Twins did this with Dizzy.

So, as you can see, the big global publishers look like a threatened species. Everything is conspiring against the reasons for their very existence. So expect another period of rapid change. Publishers who adapt quickly away from plastic and cardboard and who learn how to profit from genre and platform proliferation will survive. Those who hang on to the old business models of physical stock, AAA blockbusters and TV advertising will go the way of the Dodo.

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Michael Grade is the executive chairman of ITVplc, a huge British broadcasting conglomerate formed by merging Carlton with Granada. They own  11 out of 15 regional television broadcasters. And his job is similar to re-arranging the deck chairs on the Titanic. I have written about him before on here.

ITVplc has five and a half thousand employees and in 2008 had  revenue of over two billion pounds. But first half sales this year were about ten percent down on the same period last year and they lost £105 million. All part of the inevitable decline of linear, non interactive media.

Some people say that when radio came along it didn’t destroy books and newspapers and that when TV came along it didn’t destroy radio and the print media. So the lesson of history is that the advent of interactive media will be the same again and we will all live happily together. They are wrong. Interactive media will do to TV and print what the internal combustion engine did to the horse. The paradigm shift is so great that all the older media are obsolete, with the exception of radio (which can work as a background to other activities).

New media has the enormous technical advantages of interactivity, connectivity and non linearity. Gaming adds to that the powerful reward mechanism for the successful completion of tasks. Old media looks truly pathetic compared to this. So whilst new media grows from strength to strength they are doing so at the expense of old media. Old media is in big trouble and it is getting worse for them by the day.

But there is hope. The only thing that ITVplc have that is of any real value is their brands. They own a big pile of IP that is extremely well known in Britain. These brands can be scrubbed down, rejuvenated and adapted for the new media. It really isn’t rocket science. Gaming and social networking are the two obvious mechanics that are just sitting there waiting to be applied.

So here is the recipe. ITVplc need to set up a game publishing division. A small budget of perhaps £100 million should be enough to get this off the ground. Then they need to make a variety of games centred on their brands. All sorts of games. Social games, self development games, educational games, MMOs, casual games, telephone games. And across different platforms. Very rapidly indeed they would become Britain’s biggest game publisher. And more, because unlike broadcast, games are not constrained by geographic boundaries. With games the whole world becomes their oyster.

So the potential is there to make ITVplc far bigger as a new media company than it ever was as an old media company.

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According to the Merriam Webster dictionary propaganda is: the spreading of ideas, information, or rumor for the purpose of helping or injuring an institution, a cause, or a person. Which is a pretty broad net to cast and covers quite a lot of what I think of as marketing! However we tend to think of propaganda more as when media is used to promote a political viewpoint which we disagree with. Such as Lord Haw Haw in World War 2, who annoyed us so much that we over  reacted and executed him when we won. A fate that Hanoi Hannah avoided.

The traditional, non interactive, media are massively used for propaganda. In World War 2, and subsequent wars, both sides frequently used their bomber aircraft to drop propaganda leaflets. Which in some circumstances may have been more effective than using them to drop bombs. Many of the world’s newspapers are set up to promote a particular viewpoint. And huge swathes of the world’s media are government owned and used to promote the cause of the ruling administrations.

Yet in this world of people trying to persuade other people of the rights or wrongs of a particular cause, video games have largely been left alone, which, when you think about it, is very strange indeed. Video games are played by hundreds of millions of people of all ages, with a concentration of 20+ year olds. Yet the actual content has been dictated more by the needs to entertain or educate than the desire to promote a certain agenda. So far.

The reason we have been left alone is quite obvious. Games are just another media, albeit a technically superior media. But the people with all the power, the politicians and journalists, don’t realise this because mostly they just don’t understand video games at all. We see this in the way they blame video games for violence in society when the opposite is true. And now that ignorance is protecting video game players from propaganda.

However we haven’t avoided politics in games completely. Here are a few that sneaked through:

• The Global Islamic Media Front released a first person shooter called Quest for Bush, something that perhaps a lot of Americans would have been very pleased to play!
• On the other side there were Quest for Al Quaeda: The Hunt for Bin Laden Quest and Quest for Saddam.
• Rendition: Guantanamo is a game that has been cancelled because of pressure from journalists.
• Left Behind: Eternal Forces is a nutty extremist christian propaganda piece, that is probably the most distasteful of the lot. Far worse than any game that politicians and journalists complain about.
• Kuma\War is a first person shooter. Where it is different is that its frequent new episodes are drawn from current events, but from an American perspective.
• Hezbollah produced the game Special Force and its catchily titled sequel Special Force 2. In both you get to kill lots of Israelis.
• America’s Army is the big one. A series of games designed to foster the American Army view of the world on an unsuspecting public and also to work as a recruitment tool. This has been a remarkable success at promoting gung ho American militarism.
• Special Operation 85: Hostage Rescue from the Association of Islamic Unions of Students unsurprisingly reflects a world view opposite to that of the Americans.
• And just now the Iran National Foundation of Computer Games revealed several new games at Gamescom in Cologne. Which will reflect opinions and views refreshingly different from the usual American propaganda that the conventional media force down our throats. According to the BBC one is “an adventure game where you play the role of a girl called Sara; a young student caught up in events during the early stages of the Islamic Revolution in Iran.” Exciting stuff.
• Finally we have a pathetic British attempt which, as far as I am aware, nobody played. This involved taxpayers money being spent on a number ten Downing Street game. This now seems to have died off and of all the propaganda games I have found it is the only complete failure. Which is just so typical of anything Gordon Brown does.

As you can see, with the exception of the pathetic Gordon Brown effort, all these propaganda attempts have been a success. They have been incredibly cost effective at getting the attention of the world’s press and of game players. So it is inevitable that we will see a massive increase in video games designed to promote or rubbish different political, military and religious agendas. Up till now games have been largely living in an age of innocence. This has been a false dawn.

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One thing that has struck me is how little more the current generation consoles, the Sony PS3, Nintendo Wii and the Xbox 360, give the average consumer, for a huge amount more money, than what the Sony PS2 gives them. In fact, in many ways the PS2 gives them more! Which is probably why it is the best selling console ever, with about 140 million happy customers, with more still buying it every day.

You buy a game console to play games. And when it comes to games the PS2 is a long way ahead of the current generation consoles. There are nearly 2,000 games available for the PS2 and they include some of the greatest games ever produced. Metal Gear Solid 2 & 3, GTA3 & San Andreas & Vice City, GT3, RE4, Devil May Cry, Gods of War, Okami, Ico, the list just goes on and on. And they are cheap! New games are about £20 but you can buy the classics secondhand for £5 each or less.

And the machine itself is also very cheap compared with the current generation. £70 for a new one, £40 for a secondhand one. And they are simple, proven and reliable.

The main thing the current generation give you (PS3 and 360) is HDTV, but is that such a big step in gaming? The 360 also gives you an amazing online experience, at a price. Only the Wii is standout in offering something more with its innovative gesture interface and the fantastic family oriented games that go with it. Hardly surprising then that the Wii has sold nearly as many units as the PS3 and 360 combined, it is the only one with solid reasons for purchase.

So there you have it, if you don’t already have a PS2 then you should get one.

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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.

Then Microsoft arrived  with the Xbox, which added 50% to our available platforms. Then Nintendo got their act together with the DS and Wii and Sony gave us the PSP. And then the smartphones arrived, firstly Apple with iPhone and the App Store business model, now followed by Android and a small gaggle of other standards.

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.

Meanwhile the mobile gaming and App Store model has come from nowhere and in a year has made the iPhone the most successful new gaming platform in history.

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.

The 12 year old Runescape player I mentioned the other day, for £3.50 subscription  is currently getting 200 hours play a month. When you compare this with a cardboard and plastic console game at say £40 there is just no competition. These console titles have become too expensive to make and too expensive to buy. The same applies with mobile gaming where 99c App Store games are competing against £25 DS games.

And there are more big threats on the horizon with Rupert Murdoch converting MySpace into a gaming portal.

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.

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