The good folks at Interactive Ontario invited me to the innaugural GameOn Finance conference on Friday. I was lucky to catch a number of livelier sessions. And this, is what I learned about video games:
- Historic distribution models are changing and who the new winners will be is uncertain. Sure console gaming continues to print money for game publishers and platform makers, but everyone knows that the days of little shiney discs are numbered. Digital distribution is coming and it’s changing retail-based business models and creating powerful new players (like Valve’s Steam, xbox live, or any of the online cassual gaming aggregators) and potentially disrupting business as usual for game publishers. Connected games come with a different flavour too. Social and networked products come with great stickyness. Games like WoW for example suck in gamers for months or years at a time which means gamers spend more hours but buy fewer games as they don’t need to rush back to the store after finnishing the latest spiderman game in 10hrs of playtime.
- The industry is at a crisis of imagination as the big producers risk falling back continuously on old franchises and trying to manufacture “sure hits”. Eric Zimmerman did a great job of outlining this one in his keynote as one of 5 key trends facing the industry. Though gamers have been talking about this one for years. If gaming is going to avoid the total celine-dionifacation of the industry they are going to have to constrain the ballooning costs of production per single product and/or learn to love independent designers and find new models to outsource design and production risk.
- The huge potential of the internet (let alone mobile) is still not even fully established yet. It’s crazy but a lot of this industry still depends on the whims of retail distribution (read walmart), solitary consumer experiences and vertically oriented/siloized game production. Of course there are great examples of many companies now exploding each of these ideas through creative use of the internet and P2P/social media. Community is the new content factory. Social media is the new distribution channel. And just making it social improves the product itself.
- Canada could be doing a better job of supporting young/small companies who are the real drivers of innovation in the industry. Current programs, SRED, IRAP the OMDC and other tax credits are well appreciated by the industry (who doesn’t like free money). However, there are valid questions as to whether these programs are effective policy for sustainable advantage in Canada. Most of these programs work best for big developers, while it seems policy wise we could be doing several more easy things to encourage risk taking and innovation for both would-be entrepreneurs and they investors.
So, whew. There you have it. Does any of this sound familiar to you and your industry by any chance?