The Game Developers Conference represented a good opportunity to take a look at the status of the game industry. Indicators to note included the show’s attendance, the exhibitors, the sessions, and most importantly the conversations with industry veterans. There are four important trends now playing out across the game industry.
Game design is becoming more important, graphics less important.
This is not to say that game graphics are unimportant, but they are no longer the only important consideration in what makes a game sell — or even the most important consideration. For decades, graphics (and the code necessary to generate those graphics) consumed most of the development resources allocated to games. Games were marketed mostly only the strength of the graphics, and the game media focused on the pretty pictures.
Now that beautiful graphics have become easier to produce (through better tools and vastly more powerful hardware), they are more commonplace. Thus, gorgeous pictures are no longer a key differentiator for games. At the same time, as games become much less of a launch-oriented product and more of a long-term engagement with the player, the quality of the game play has become much more important.
The poster child for this trend is, of course, Minecraft. The graphics of the game actively discourage new players who haven’t heard of it, but the quality of the gameplay deeply engages players. We can also see the importance of gameplay (and therefore game design) by looking at Watch Dogs, which Ubisoft delayed by almost a year with a serious impact on their stock price and quarterly performance. Ubisoft made that choice not because the game wasn’t pretty enough; the game was delayed because it wasn’t fun enough. Similarly, The Witcher 3 has been pushed back a year by CD Projekt Red in order to refine the game play.
Free-to-play games make game design incredibly important, since the revenue from the game depends entirely on keeping players engaged for a long time. Graphics are not the key to long-term engagement — game design is what keeps players coming back. Smart publishers and developers will take care to make game designs as compelling as possible.
Brand is becoming more important, the platform less important.
Twenty years ago, or even ten years ago, games were strongly associated with the platform. ‘That’s a console game,’ or ‘That’s a PC game,’ or even ‘That’s a PlayStation game.’ Now publishers (especially the larger and more successful ones) strive to make the game brands the most important thing in the minds of consumers. Is FIFA a game confined to one platform Hardly, as Electronic Arts strives to provide some kind of FIFA experience on PCs, consoles, and mobile, and to keep players engaged with FIFA wherever and whenever they can.
Publishers are shying away from platform exclusives as much as possible. Almost all of the Sony and Microsoft and Nintendo exclusives for their consoles come from studios owned by the console manufacturer, or the development is funded by the console maker. Titanfall is a notable exception for which Microsoft no doubt paid handsomely, but even in that case EA has been pointing out that the deal only applies to this first version, hinting broadly that future versions of Titanfall may appear on other platforms.
Even console stalwart Call of Duty is now appearing on PC, with the Call of Duty Online title being developed for the Chinese market. King says it owes much of its success with Candy Crush Saga to the fact that the game appears on Facebook as well as mobile and progress is shared, so that players can pop in and play wherever and whenever they feel like it. Most important console titles are getting companion mobile apps which offer increasingly sophisticated gameplay.
The audience is becoming more important, the product less important.
Once games were hard to create, and only a few appeared each month. Now there are plenty of tools for game creation, and games can get created quickly by one or two people. The consequence, of course, is that there are now thousands of games released every month. Many of these games are really quite good, but we will only ever hear of a small number of them. Most will never find an audience, or the audience will never find them.
If you have developed a good audience, you can continue to deliver more virtual content to them as long as they are happy with the games. This can be virtual goods for existing games, or entirely new games. Why are so many mobile game companies beginning publishing programs Because they realize that they have an audience in the millions, and the right new games shown to that audience have an excellent chance of making money.
Traditional publishers are gradually discovering this as they make the shift from an audience of retail buyers (a handful of people that controlled access to retail chains) to individual game players. Now publishers have to develop a relationship with each gamer, and this means building up customer support and community management staff. New publishers have grasped this fact far more firmly; Wargaming CEO Victor Kislyi notes that half of his company’s employees deal directly with customers.
Building a good audience is more difficult than building a good product, and is arguably far more important in the long term. Developers and publishers at all levels need to embrace that knowledge, and devote time and resources accordingly.
The product lifetime is becoming more important, the launch date less important.
It used to be the case that the day a product shipped to retail stores was by far the most important economic event in the lifetime of the product, accounting for 80 percent or more of the game’s lifetime revenue. These days, many of the biggest games in dollar volume never even appear in a retail store. Even defining a launch date is nearly impossible, as mobile games get “soft-launched” in New Zealand or Canada to refine the game play, and gradually get rolled out across the world.
Free-to-play games typically don’t even begin to make money until the players have been playing for weeks. Many games are seeing revenues increase from year to year. Riot Games has seen revenues from League of Legends grow by orders of magnitude from when the game first appeared. Who can even remember the launch date It’s only important as a historical fact, not as a financial one.
Console games are rapidly switching to a long-term revenue model rather than the ‘ship date is everything’ model. Increasing use of full game digital downloads means even console games will never be unavailable due to lack of shelf space. Downloadable content (DLC) is now standard for major console games, and we’ll be seeing more and more of it.
The games generating the most revenue and the most profits are games that have a long lifetime. Even such an old-school retail hit as Grand Theft Auto V continues to sell strongly, and will no doubt be available for years. Grand Theft Auto Online is also generating considerable revenue for TakeTwo, and will no doubt continue to do so for a long time to come if the company has its way.
Summary
The old adage “People forget about late, but they never forget about bad” is another way of underscoring the long-term importance of a game title (and the game design, for that matter). All of these four trends interact strongly, as good game design is critical to creating and sustaining a strong brand, a loyal audience, and a profitable long-term game. Embracing all of these trends is not easy, especially for long-time publishers that organized their workforce around very different market conditions. New times require new thinking and new structures, as well as new approaches to game design, marketing and monetization. It’s a time of vast change and vast opportunity for the game industry, and understanding these trends is vital to charting the best course for the future.
