21 February, 2011

State of the Industry?

written by Blain Newport on Saturday, 19 February, 2011

I used to think I had a passing idea of how the industry was doing, but a lot of stuff just doesn't make sense.

Music games are out
Activision laid off virtually everyone working on Guitar Hero (and most of the rest of the company that wasn't Blizzard or working on Call of Duty). Similarly, Viacom sold Harmonix (the makers of Rock Band (and Guitar Hero initially)) back to the original owners.

But dancing games are in
Four of the top ten selling games at retail for January were Wii dancing games.

Conventional wisdom is that the 3DS will do great
I don't remember hearing any serious doubts on the Giant Bombcast, Gamers With Jobs podcast, or Weekend Confirmed. And I haven't seen doubts around the forums, either. But that might be because I haven't been looking for them.

But cell phone games cost a buck and DS games cost forty
We've got article titles like "As Mobile Games Rise, Studios Fear for Blockbusters’ Future" and "Peter Moore Likens Game Industry to 'Burning Oil Platform'" which talk about mobile games threatening the big games. But shouldn't the portables be feeling the squeeze much worse than the blockbusters?

Maybe the commentators I've listened to are just thinking about the hardware, which should be novel enough to move a lot of units initially. I don't know.

Game companies want to expand into other media
Facebook and the iPhone are big? Let's put versions of our game on them! Let's make comics! Let's make movies! Everything grows the brand and makes money simultaneously!

But game companies can't really create or share
People play a game to do stuff. But in every other medium they look for genres, settings, characters, stories, and sometimes particular actors, writers, or directors. Games work in well established genres. Sometimes they have interesting settings. But everything else they tend to do poorly, including giving recognition to performers and designers because they don't want to pay them more. Also the TV and film industries seem to view games as the enemy and vice versa, even when they're part of the same parent company.

The industry sees big money in social gaming
Farmville maker Zynga is making crazy bank. They made $200 million last year, and are supposed to be on track to more than double that this year. Considering the company's size, and that their revenues are more predictable than the hit driven big games, they're doing great.

But that's not how social interaction works
People have been trying to take some of World of Warcraft's success for years, and even though there are many games that had elements gamers preferred, everybody they knew was playing WoW already. I suspect that's the main challenge anyone trying to break into the social space will run up against. That doesn't mean you can't still make money there. But the kind of money a large publisher looks for may just be a pipe dream.

As many developers have said, these are frightening, exciting, and uncertain times for the industry. We'll see how it goes.

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