GameDaily BIZ: Opinion: The Video Game Business Is Broken
We all know this a year of change in the video game market place. The future of the industry is very much at a crossroads with the big 3 bringing out their new platforms and many questions remain unanswered. Maybe it’s time to say “the Emperor Has No Clothes.” The video game business is clearly broken and is in desperate need of fixing. This is not just another console transition%u2014we are 6 years away from the last one and in a totally different world. Here are my observations on the problems with the current model.
And, you might wonder, what does American think about this? First off, I like to refer to myself in the third person. What’s that about? Second, HELL YES – the industry is broken. But only from the perspective of those who aren’t profiting HUGELY off the existing model, despite how that might translate to general lame-ness for the rest of us.
Lo and behold, I’ve been thinking about this stuff for a while… mostly because, as a little guy competing against the likes of EA, and Sony (not that I’d presume there to be any actual compeition – yet), it is painfully obvious that a full-frontal assault on territory so masterfully dominated by the Big Boys is pure madness. So you have to think outside the box. And thinking outside the box offers some interesting solutions, many of which we’re beginning to see emerge even now.
Things are not so dark as they seem. In fact, I sense that David is winding up one hell of a sling throw.
There’s a book called “Blue Ocean Strategy“, which outlines ways to create new playing fields inside existing industries. It forces you to look at the way an industry works (which usually translates to a heavily protected process controlled by big corporations), tear the process apart, and rebuild it like so:
Key factors taken for granted to be eliminated:
Retail distribution, traditional marketing budget, box product/manufacture costs, gamer jargon marketing/feature lists, in-box AI, initial cost to download/play
Key factors to be reduced well below industry standard:
Cost of development, size of development team, size of initial release, time to initial release, time between subsequent releases, player time investment per episode, cost per hour of gameplay
Key factors to be raised above the industry standard:
Ability to respond to customer feedback on content, quality of AI, mass market appeal with adult and broad narrative, cliffhanger style content
Factors to be created that have never been offered:
Online marketplace for content distribution, star designer content, community content sales, multiple productions inside same universe, artistic flavor to content like HBO films, users can decide which episode to travel to next. AI stream, offsite AI processing (improved AI and adds copy protection).
You ELIMINATE, REDUCE, RAISE, and CREATE factors that everyone is currently taking for granted. When I play around with this, the outcome is the above back-of-envelope model for… online distribution of episodic content with online AI and a host of other “weird” ideas. And while the big publishers are moving towards concepts like this, the great thing for the small guy is that with this model they don’t have to rely on the big publishers to build the product they want to build. We’re finally moving back to the days when companies like id Software could build their fortunes on self-funded games released via the internet.
And while some people are going to hate me for this, I have to say that I believe advertiser funded game development is going to play a huge role in the transformation of the industry away from one dominated by the EA’s of the world. It works for television, and I think it can work for games. At least I know I’d rather play an advertiser funded innovative game than another big-publisher funded film license genre conformer.
There’s no reason why these two models can’t live together in the same universe. Ultimately it means more choice for gamers, and that’s not a bad thing.