The funny part about being a video game consultant and analyst is being repeatedly asked which industry trends are valid and of lasting concern. The irony being, of course, that from social to mobile, free to play to cloud computing, the answer is essentially all - just look at how they're reshaping the industry with each passing day. Sales of physical games may be down 9 per cent to $5.06 billion as of 2010 according to the NPD Group.
But as the six-figure success of titles like Frictional Games' Amnesia, CityVille's 100 million-strong players (garnered in just under 40 days) and both Steam and Xbox Live Arcade's continued growth prove, the future is now. Digital distribution is real. Microtransactions are real. Apps, indie titles and streaming games on smartphones, TVs and Blu-ray players? All are here, and becoming increasingly capable of sustaining growing business concerns. (Trends like widespread set-top 3D gaming and static in-game ads - not so much.)
Needless to say, all present consumers with a level of choice, affordability and entertainment options never before witnessed, and which add new levels of complexity to the equation for prospective games industry titans. To wit, it's no longer enough to compete with market leaders - you're also competing for a dwindling share of users' interest and spare time.
Every industry insider worth their weight in PlayStation Move wand controllers is well aware of this, naturally. But what's surprising is that so few have yet to wrap their heads, let alone day-to-day business operations, around what the paradigm shift means from a functional perspective. Not only must games now be designed to play to platforms' individual strengths (ie social sharing, constant connectivity, and the ability to serve bite-sized in-game purchases on-demand) and titles' core features instantly communicable in under five seconds.
Designers, developers, artists and programmers must all learn to think like marketers, and consider how every game feature can monetize, extend a title's life and promote its continued relevance from before day one. Today, it isn't enough simply to scrap it out with best-in-class products such as Call of Duty: Black Ops, World of Warcraft: Cataclysm and Red Dead Redemption. With more players committing a larger share of both their budget and off-hours to top-tier titles, and so many free or cost-conscious alternatives (available any time from a multitude of gadgets) steadily eroding player loyalty, adding continued value and excuses to stay top of mind are imperative.
Even the best-known brands must now face the reality of having to operate as services, not products that begin, not end with what's in the box, and offer regular content expansion, constant gameplay iteration and/or user-created content. Each new game improvement not only adds incremental value and builds user trust. It also serves as a fresh player temptation, PR/marketing hook and - especially in the case of social network or smartphone games which issue regular updates - reminder why it's worth giving your game a glance.
The new rules of the game are simple. Every play element needs to offer players direct benefits, and every design choice needs to justify its existence by bringing more pleasure, business, repeat tries or, ideally, some combination of the above. All need to be actively monitored and assessed for performance, then enhanced, updated or abandoned based on direct user feedback.
To this extent, designers need to think like businesspeople, and executives need to think like designers as well. All aspects of your game should not only be as valuable and sensible as possible, but also enjoyable and interactive - no matter if they serve a practical, financial or purely artistic purpose.
While seemingly complex concepts and business principles to seize upon, the difficulty associated with implementation and ramp-up can be mitigated by encouraging lateral and open dialogue between departments and levels. A major first step includes initial design planning that accounts for key features that can serve as significant simultaneous value-adds, promotional tools and business drivers. (Example: Level or character creation toolkits, which expand game content while increasing player engagement and pass-along, and have served titles from LittleBigPlanet 2 to Spore well.)
Subsequent steps such as rapid prototyping, frequent meetings at which all team members' input is solicited and beta programs or soft launches which reveal which features best connect with users can further help. Learning from social games companies such as Zynga, Booyah and Playdom is advised as well.
Essentially, all play elements should quickly drive increased user engagement, viral pass-along or payment. Following reasonable experimentation with structure, pricing and set-up, don't hesitate to be swift and brutal at abandoning features that under-perform either. Life and fiscal years, as they say, are too short.
As more developers transition to become full-service independent publishers, it's also vital that they become smarter about picking their battles. Choose a niche to focus upon, a singular visual style for your game, key concepts that are quickly communicable at a glance, and one to three key features to execute well. You can't be everything to everyone. But if you can fill a void in the market, make it immediately obvious how and facilitate hands-on trials, uptake can be powerful.
Likewise, as more publishers work to bring franchises like FIFA, Dead Space and The Agency to social, mobile and online spaces, it's crucial that they provide experiences tailored to each platform's defining features. Companion utilities and spin-off adventures can all help promote brand awareness, or help build new entry points (eg cell phones, Web browsers and tablet PCs) to existing franchises. But all should offer actual value for play and tangible incentives for sharing, awarding extras and bonuses (say, an exclusive pet or extra in-game cash in the core PC/console product) for ongoing interaction or active recruitment of friends to help solve key in-game problems. In either case, it isn't simply enough to provide online leaderboards, Twitter/Facebook sharing features and swappable power-ups.
You've also got to provide meaningful incentive for staying involved with these games and bringing titles to others' attention. For example: The need to visit a friend's virtual nightclub to keep it thriving, join forces to battle an otherwise unstoppable boss or score some filthy lucre in your favourite computer game by playing a round of Fable: Coin Golf.
When advising our partners today, we don't just counsel the importance of acknowledging new trends and dressing titles to succeed, given a marketplace now crowded by thousands of competitors on dozens of emerging platforms. We also advise how vital it is to provide hands-on trials, reach a broad audience and create not just tiered pricing plans/multiple entry points for all users, but also think of games as living, breathing platforms that offer continued incentives to interact and collaborate.
By far, the most effective form of marketing in 2011 is turning players into evangelists and constantly rewarding them for these efforts by actively providing value-adding updates and channels through which to influence titles' ongoing evolution. Some developers do this by providing badges, achievements, exclusive in-game content, crowdsourced initiatives (e.g. community design contests), inside access to developers and other perks.
The wisest ones go one step further by intentionally embracing users as an active extension of their team, turning players into a combination sounding board, real-time focus group and extension of the creative services department. In other words, regardless of which industry trend you choose to pin your hopes on going forward - apps, virtual worlds, glasses-free 3D, zero-cost Web games, etc - some basic principles still apply.
Quality is paramount. Value is essential. Social elements are mandatory. And an ongoing commitment to operating your game like a service, and facilitating active two-way dialogue between developers and fans (even if simply through the ongoing release of new content) is of central importance. And while quirky, indie games; traditional PC and console outings; and classic MMOs all still have a place in today's gaming world, realise.
As the actual biggest and most salient trends in gaming fragmentation of users across platforms and devices; a growing preference for proven, trusted brands; and the increasing shift to more transient, less loyal gaming habits reveal, it's a brave new world for all contenders. Developers, publishers and retailers who wish to survive it are faced with a simple choice: Get ready to rewrite the playbook, even as you toss the old one out the proverbial window.
Where does the future of gaming lie? Write in with your questions for games industry analyst Scott Steinberg. Select queries will appear in his next column in future months.
Scott Steinberg heads videogame consulting firm TechSavvy, which advises developers, publishers, investors and media corporations on business strategy, product testing and market analysis. A frequent game industry expert witness, he's also the author of Video Game Marketing and PR and host of videoseries Game Theory. He frequently appears as a technology and gaming analyst on broadcast networks like ABC, CBS and NBC, and has contributed to 400+ outlets from CNN to Rolling Stone. For more, see www.scottsteinberg.com.