Every year, new trends arise, and business decisions are made. Some of these decisions set the trends; others reinforce or vainly attempt to catch them. What once seems to be certain becomes deeply difficult to understand -- and new ways of thinking arise.
Looking back, then, at 2009 reveals not just broad trends, but shifting, complicated and evolving situations that can't easily be boiled down.
As we review five of the biggest trends in the market for 2009 -- complicated by the economic cooldown and the explosion of platforms, audiences, and delivery mechanisms -- perhaps we can find patterns that help sort out the randomness of the sprawling world of video games.
5. The Day the Music Died
Music games were the savior of the industry in 2008. Plastic guitars flew off of shelves into the hands of eager gamers -- and unlike many fads in gaming, which come and go cyclically, this one made everybody happy. Who doesn't like to play Rock Band with friends?
Still, sales are down this year. Significantly. Activision says that's not true, or won't be, but it seems hard to believe. The range has expanded beyond Guitar Hero to encompass DJ Hero and Band Hero but sales of the latter have been tepid and DJ Hero just isn't making the right impression, nor is it selling particularly well.
And though The Beatles: Rock Band has done well, how much is it benefiting Viacom when it might not break even? And with ugly stories like the Scratch dust-up (Genius sues Activision), Band Hero shenanigans (No Doubt and Activision sue each other), and the sad and pathetic Kurt Cobain tale (Courtney Love sues Activision) the genre has lost some of its charm.
There may simply already be enough plastic guitars in this world.
4. The Rush of the Engines
This console cycle has been extremely challenging from a technological perspective. Many studios have come to rely on third party engine technology to deliver games to the Xbox 360 and PlayStation 3.
The shining star of that space has, of course, been Unreal Engine 3. It is used extremely widely, generally well-regarded, and flexible enough for many implementations. But as technology has matured, other multiplatform engines have arisen. Some are internal (like Square Enix's Crystal Tools, which will make its public debut next week when Final Fantasy XIII ships in Japan.) But many are reaching wider than that.
Terminal Reality (Ghostbusters: The Video Game) has begun licensing its technology, the Infernal Engine to solid results. Vicious Cycle's Vicious Engine was reborn in a PS3/Xbox 360 incarnation this year.
Even Capcom may be getting in on the act, in a shocking turn for Japan, with its powerful MT Framework possibly being used externally. It drove Resident Evil 5, among other titles, so that's hard to argue with. Unity is expanding to service the Xbox 360. Ready At Dawn is moving into the space. And with other players like Emergent, Unity, Crytek, and Trinigy in the space, engine market is exploding.
This is great for developers -- viable choices and competition are great for everyone. And tearing down the technological barriers of development -- even a little -- will only benefit gamers as well, as more ideas can be brought to light faster (and at lower cost.) This is a vital trend, and if the current console cycle is as extended as some think, there is a potential for a real flowering built on the back of these technologies.
3. The Widening Net of Digital Distribution
The same day that EA announced that Playfish acquisition, the company also announced plans to lay off 1500 developers. Within days, Pandemic, fresh from shipping The Saboteur, had been closed, with around 200 losing their jobs at that studio alone. That was no coincidence, says EA SVP and CFO Eric Brown. The market is shifting to direct digital distribution to customers -- and whether it's via Facebook, Steam, or the PlayStation Network (to name just a few possible outlets), it's becoming a focus of all major companies.
But 2009 does feel like the year it really arrived, in a sense. Sure, Steam has been around for several years. But it's become increasingly clear that shrewd marketing and competition from services like Direct2Drive and Impulse, as well as a highly savvy audience, is making digital the delivery mechanism of choice for PC gamers.
Xbox Live Arcade has around for some time, too -- but Shadow Complex broke records this year. It wasn't just for downloads; it was also that intangible relevance that Shadow Complex had to gamers. There was no question that everyone was playing it when it arrived. It simply was the game of the moment.
And, of course, though success has been limited at best, Sony released a direct-digital only device this year -- the PSP Go. Say what you will about the execution, but the system is an important marker: it's the first time a device in the console market has been purely digital, and following on from 2008's echochrome, it also marks the release of digital-only games (such as underground hit Holy Invasion of Privacy, Badman!) for a device that was intended to rely on proprietary discs upon its release.
Digital took a number of important steps this year. There is still much progress to be made. But in 2009, it shifted to a completely normal means of delivery for all gaming markets, and that makes it a watershed moment for the movement.
2. The Rise of Social Games
At the beginning of the year, many game developers, to speak broadly, were suspicious of Facebook games and running to the iPhone with arms open. Well, we know the difficulties that lie Apple-ward, and we are now duly shocked by the size of the opportunities that have appeared in the social gaming space.
The market grew beyond predictability. Zynga, its leader, is now flush with enough cash from successes like number one and number two games FarmVille and Cafe World to rent a huge "we're hiring!" billboard on the San Francisco Bay Area 101 freeway during a recession. The other major player is Playfish, whose Pet Society and other hits led to a massive acquisition by Electronic Arts. Big numbers: big possibilities.
Just like the iPhone, however, what it takes is talent and execution to break through -- a simple concept done right and tweaked obsessively. And with revenue possibilities that are tremendous, thanks to a huge audience -- over 350 million users on Facebook alone -- it's an alluring place.
Appealing enough to lure big traditional develpoment names like Brian Reynolds -- who went to Zynga not just for the cash, but the opportunity to serve such a huge audience and to rapidly iterate on games. Says Zynga VP Hugh de Loayza, "A standard console game developer, if he has a 30-year life cycle, he's going to get out maybe 15 titles, and that's it. You've got 15 shots to make your decisions correct." Facebook offers opportunity for quicker bursts of creativity and instant user feedback.
Of course, we can't ignore that the growing pains have lead to some unseemly situations where monetization is concerned (and let's not even go into the whole cloning issue, or the annoyingness of viral wall post spam.)
These difficulties just help highlight that it's a tough market to get right -- and with the rapid increase in sophistication and resources of the big players, it's getting tougher to break in. Still -- small, dedicated teams with the right ideas can hit the ground running. The rules are still being written. The opportunity is there to make your mark -- and your money.
And with so many developers laid off by EA and the various studios that closed in 2009, you have to just wonder if many will find their way into the world of social gaming. Even doubters may be forced, as demand shrinks for packaged triple-A goods, as the console download services, PC, and iPhone are glutted with choices, to confront the future of a large segment of games and gamers.
1. The Wicked Way of the iPhone
When the App Store launched in the back half of 2008, there was an instant gold rush mentality. Developers scrambled to deliver novel and exciting games and applications to a seductively large and savvy userbase. As the iPhone became the number one mobile phone in the U.S., dollar signs started appearing in more and more peoples' eyes. Lured by success stories like that of Steve Demeter of Trism fame, strong hardware capabilities, ease of development, and a receptive user base, development soared.
In November, Apple announced that the App Store had exceeded 100,000 applications, including over 18,000 games. There's a lot of competition out there -- a lot of noise, too; it's tough to stand out from the crowd. Suddenly a grassroots movement became acquainted with clones, and independent developers -- hoping for a more egalitarian platform -- were forced to learn the value of marketing.
And the phrase "race to the bottom" became an endless refrain at conferences like GDC Austin's iPhone Summit. Some developers, like Adam Saltsman (Canabalt) don't think it's necessary to rush to 99 cents -- something still hotly debated as of this writing. And with Apple adding in-app purchases for free titles, the landscape is even more complicated.
The trend is not that the iPhone is hot. That's last year's trend. The trend is not that the iPhone is a wasteland. That's clearly not true. The handset and its brother, the iPod Touch -- now supported by gamer-targeted marketing -- are still immensely popular, and despite tremendous piracy, there's money to be made from an audience that huge. The truth is that the iPhone is complicated. Creating a game that stands out, and is good enough, and simple enough, and engaging enough, and priced right, and people know about is a nail-bitingly tough thing to hit on.
The trend is: people woke up to both the possibilities and the challenges of the iPhone this year, and it's provoked some of the most interesting, exciting, and disheartening discussions of the year.
- Christian Nutt
Bob Stevens: "Both the Stone Loops controversy and the ongoing Langdell/Mobigame saga should serve as a cautionary tale to iphone developers: Apple will be more than happy to remove your game if anyone complains about it, regardless of the strength or weakness of their legal argument. It's a bad precedent and could seriously harm iphone gaming in the future if more people choose to exploit Apple's apparent policy."
Kevin Reilly: "Bob, Apple's takedown policy is consistent with the takedown policy of other sites such as Youtube and Facebook. They take down allegedly infringing content in order to preserve their safe harbor from claims of infringement under the DMCA. Whether or not the takedown notice is bogus is not really Apple's problem unless the developer responds that the takedown notice was improper or sent in mistake, which of course may prompt a lawsuit by the company sending the notice in the first place. I don't see Apple changing this policy because there are just too many Apps to police on iTunes."