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Casual Connect: Wildtangent CEO On The Fall Of Console Gaming
by Jen Steele, Michael Zenke
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July 28, 2008
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At last week's Casual Connect event in Seattle, Wildtangent CEO Alex St. John offered attendees a vision of what the games industry would look like in some 12 years time. Gaming in the year 2020 was the topic at hand, and the evolution of current trends seemed to be the main focus of St. John's talk.
As has become his recent mantra, the CEO began with what might be his boldest declaration: that by 2020 the concept of console gaming will be extinct.
In St. John's mind this is the last generation of successful console systems. The cost involved in creating these systems is simply too great, in the executive's mind, and even the current (relatively successful) generation won't recover the initial investment required to get it going.
Moreover, St. John sees the current 'graphics arms race' as coming to an end. The production value of a game will soon be the leading differentiator, rather than simply how it looks.
Most interestingly, the CEO sees the console market falling as a direct result of the online gaming market. Someday, he predicts, the shelves and shelves of console games at retail brick-and-mortar stores will be replaced by a rack of the online currency cards used to fund in-game transactions in massively multiplayer games.
In short, he believes the gaming marketplace will be dominated by persistent online worlds. While these types of games are gaining popularity across the globe, St. John believes that the growing influence of nations such as India, China, and Korea to be the real causative factor. The US gaming market is, in his worlds "stagnant", with money "just shifting around."
The gaming business of tomorrow, then, is online and free to play. If it's genuinely compelling content, if it truly entertains a playerbase, the content will be consumed organically and a revenue stream will present itself. According to St. John, this method is "eating" the old business model alive.
Said the CEO, “As soon as you hook some of these younger demographics in an MMO, they won’t buy a box game again." The result is already visible, as traditional media companies scramble to join the Blizzards and Turbines of the world in online world publishing. Quipped St. John, "Disney wouldn’t have invested 200 million to build Club Penguin, but they paid 700 million like little bitches.”
Growing more serious, the executive reiterated: “They will buy them or die. If you want to get rich, learn how to make these community games.”
Overall, this kind of marketplace is going to lead developers to stop constantly ratcheting up the production value on games. When a good game can be made for not very much money, the incentive simply isn't there to have drastic graphics capabilities.
This will ultimately lead to a reversal of the current industry doomsaying, with the dominance of PC gaming. In St. John's mind, the PC is a clearly superior gaming device - especially since everyone has one. The prevailing model will be to, again, make the games free to play and supported by ads or modest subscription fees. Free to play titles will get players interested, but the biggest boon to the model may be the fact that it end-runs around software piracy.
Advertising and microtransactions will then ultimately be the revenue streams of future games. St. John closed on that note, clarifying that these two types of payment work hand-in-hand with how customers now want to access their content. Ala carte, for free, online, and on their own terms.
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The end of the graphics arms race? The end of consoles? Are you kidding me? Aren't we still debating whether or not PC gaming is dead? St. John must be delusional! His reasoning for these drastic changes are based on cost of production over possible revenue? Money may be a driving factor that makes the world go around but if nVidia isn't willing to improve their graphic processors because of the cost then I guarantee we'll see another company fill the production gap. Has this guy taken economics? Markets equal out, they don't swing drastically without some causation.
While no one can predict the future to a T, I give St. John credit for trying but I feel as though his prediction was meant to meet an agenda rather than looking at the current movement of the market and predicting off that.
I predict that by 2020 we will have "consoles" that provide a more in-depth experience and possibly use more of your senses to help you immerse yourself in a game such as touch and smell. I believe that we will still be striving for photo realism in graphical processing and we may be pretty close as hardware will allow us to store terabytes worth of graphical data and access them quickly. And AI will be extremely adaptive towards player actions.
I do agree that the entire gaming industry will be moving online. With this prediction I will go against the current trend of increased GameStop revenues and say that GameStop will be all but extinct in developed countries by 2020. Or at least in it's current form as a brick-and-mortar store.
Moving on, it seems like you're trying to suggest that the "games of the future" will be much more MMO style; I pray on a sack of needles on my behind that doesn't become the case. Not *everyone* enjoys MMOs pal, and it'll remain that way into the future. Though I don't play them mainly for financial reasons, I also don't see *any* point in spending upwards to 10 hours a day looting and grinding, and paying out real world cash to have someone in a (likely) 3rd world country play the game tirelessly for hours and hours, days and days w/o real amenities just to get my avatar up to max level w/ all skills equipped. Sorry, I'm just not that sort of guy, and personally hope to never be that sort of guy. There's people that genuinely enjoy MMOs and that's okay (well, the sweatshop stuff certainly isn't, but w/e), but I just have a different state of mind and I just don't want to sit on my ass for half a day playing only one game...and that actually goes beyond MMOs and entails to any game; I just got other stuff to do that may or may not take priority over that. But beyond that, probably the most grandular reason I'd rather not every game become MMO in style is b/c that could lead to the end of the single-player game as we have it, and even certain genres like fighting games, puzzle games, etc. wouldn't be quite the same. Yes, I likely wouldn't mind more heavily MMO-influenced offshoots of those genres, but I *definitely* wouldn't want the main genres to die out altogether,..and I'm not even gonna go into how game developers have the nasty tendency to up and abandon one style of design when a new "hawt" style comes up (anybody that witnessed what happened to 2d during the 3d revolution knows this well ;).
I agree that this guy sounds like he is speaking towards his agenda, but he does have interesting points. My counter-point to him though... Free to Play games are full of mindless people who just want to complain and irritate, so I stay away from them (atleast, all that have been released so far). Having to pay money up front means that there is a higher chance of having people who truly want to enjoy the game. I know that is a very broad statement, and I don't mean to insult all... but the few free to play RPGs I have tried I could not get into because of the immaturity level being so high. (again, sorry to all those who truly respect the game industry and don't fall into the category I am ranting about)
I agree with previous posts: MMOs certainly aren't for everyone. Even for those of us who are happily addicted to MMOs, pretending that they cater to every need of a gamer is a little overambitious. Gaining a steady advantage in most MMOs requires an incredible investment and is, in a very real sense, like picking up a second job. Personally, after several tedious hours grinding and raiding, flopping down on the couch to play some relaxing PS3 is REFRESHING! I just can't imagine being satisfied as a gamer if EVERY game I played was part of a crowded world. Final Fantasy VII just wouldn't be as appealing to me if I didn't feel like I WAS Cloud Strife... you never get to be the main character in an MMO. That's a huge part of gaming that's just not going anywhere soon in my opinion.
"Online and Free to Play"? GREAT! I think it's a wonderful business model that has incredible potential. And in ten years, consoles as we know them will most likely be dead.... unless they adapt, which I'm sure they will. MMOs will adapt to cater to a more casual audience and consoles will expand to support more online community interaction. It's been happening for a while.
PCs have their advantage over consoles and vice versa, but suggesting that the two cannot coexist in the future does make me question your angle. Calling out DOOMSDAY! "buy them or die". I don't buy it.