The Business of Gaming

On October 11 2012 the founder of gaming giant Electronic Arts, Trip Hawkins (yes his name really is Trip… I’ll just give you a second to let that sink in) said that home video game consoles will soon become the endeavour of the hobbyist, a niche product. Now let’s put this into perspective. The Entertainment Software Association (‘ESA’ the gaming trade association in the United States) states that the average age of a gamer is 30 years old and has been playing video games for 12 years, so the average gamer today has played an original PlayStation or Nintendo 64. It also states that the average US household has at least one console, PC or smartphone that is used for gaming. Another interesting point is that 47% of gamers are women (if you are a lady gamer, I highly recommend an article on the depiction of women in games written by a charming young man with the bluest of eyes, Link). In fact women aged 18 and over represent a greater proportion of gamers than males aged 17 and under at 18%. The standout figure though is that last year the industry was worth $24.75 BILLION. So they’re not currently niche, they’re mainstream.

The other figure that should perk your interest is that purchases of digital content accounted for 31% of game sales. For a man who has always bought games on a disc (or cartridge) this surprises me. But it really shouldn’t. Let’s just look at the music industry. It’s nearly all digital today, I bet you, dear reader, get more music through downloading (both legal and illegal) rather than a physical item from a shop. The only reason music has gone so far this way and gaming has not is due to ability. Music files are smaller, as such they are easier to download on the slower internet speeds of yesteryear and more fit on a smaller hard drive. Plus the fact that music file formats are open (you can play a cd on any cd player whereas a PlayStation game won’t play on a Nintendo device) meaning security is harder to implement on the files. What’s happening now is that ability is catching up with want. We now have super-fast broadband and larger hard drives (the PlayStation 3 launched with a max of 40GB and now has a standard capacity of 500GB). You can now download old games from a previous generation of consoles, add on content, demos, themes and apps. Once the price of downloaded games comes down the high street store is dead.

So if console games aren’t yet quite as attractive as a download option rather than a retail disc copy, then why all the hubbub? Apple. That’s why. The iPhone and iPad have messed everything up. The idea of the App Store, with its small cheap games that are instantly accessible wherever you are has ruined the idea of a portable games console for the casual gamer. Why plump down £200 for a device that plays £40 games when the thing you were going to buy anyway will have a greater selection of fun time wasters that cost at max £2? This is the problem Sony faced when launching the PlayStation Vita. The console was originally marketed as a platform for all, traditional console controls for the ‘proper’ gamers and a touchscreen for those who wanted to play Angry Birds. When casual gamers gave the console a resounding “meh” Sony switched gears and focused their marketing firmly on the hardcore gamer group. The handheld console has maxed its popularity with casual gamers and now must focus on the smaller dedicated gamer group. The bell-curve is on the descent.

Another thing to consider is the advent of fibre-optic broadband. Sony recently bought the game streaming company Gaikai. Sony has stated that it intends to implement the technology not only in it’s PlayStation consoles but also in it’s future televisions and other media devices. So your TV will soon be able to stream full games direct into your home without the need of a console or a device for storing the file, sorta like renting a film on an Apple TV or watching a video on Youtube. This has already been tried by the company ‘OnLive’ which was once valued at $1.8bn but recently sold for a mere $4.8 million. So whilst streaming games from a server in the cloud! may be the future, it certainly isn’t the present.

But lets imagine it is available. I think this would be an amazing thing. You’d never need to buy a new £400 console ever again, you’d always be able to play the latest games without spending money on new hardware, apart from the new telly of course, as the game is streamed from a big supercomputer far away. You’d also never have to go to the shop to get a new game or wait for one to download, you’d have an infinite library to immediately available games. Two thumbs up for that.

Let’s summarise. The future of casual games is on your phone and full-fledged console quality games streamed direct to your TV without the need of a console. So Trip is actually totally wrong. Consoles won’t be the endeavour of the hobbyist. We’ll all have one. It’ll be the wifi receiver in our TV.

By Ian Dutton

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