GDC 2012: Uncertainty

The dust is starting to settle down from the show, though I still have a stack of interviews to process; breaking news keeps getting in the way. It was an intense show, with each day booked more or less solid with interviews. I did have enough time, barely, to walk through the Expo and the Career center, but hardly any session time. Heck, I didn't even run into Eric Goldberg this time, and that always happens!

One question that I was asked repeatedly: What's hot at GDC? In other words, what's the most interesting thing I saw? I saw and heard a lot, but my overwhelming impression was this: Uncertainty.

There's a great deal of uncertainty floating around the industry, and that's highly unusual. For decades, since the late 1980's, the business model was pretty stable: You took a pile of money, paid a bunch of developers to make a game, and then a year or two later it would be done. You'd take another pile of money and build a bunch of inventory, your sales force would get it out into retail stores, and the marketing would hit a bit before release. You'd sell about 80% of what you were ever going to sell in the first month. Once you shipped, you were pretty much done, and everybody involved would have moved on to the next project.

Oh, there were variations on this. Over time the piles of money required got bigger, and the time required got longer. Technologies changed every 5 years, so that would always make things more difficult (read: expensive) for a while. But basically the business model stayed the same. If you wanted to bring out a game, you had to do all of those things. Sometimes that meant partnering with one or more companies in order to get something (like distribution) done, or you had to raise money in a variety of ways to pay for one step or the other. You may have been uncertain about how to accomplish a given step in the process, but you weren't uncertain about the steps you had to take.

Now that's all changed. Digital distribution, free-to-play, ad-supported, mobile, social, subscriptions... all of these innovations have irrevocably shaken up the business. It doesn't mean the old business model has stopped working, though it has gotten more difficult (retail sales down 4 years running, and dropped over 20% last month and the month before over the previous year). It's just that there are so many more places to sell games, so many new platforms, new business models, new regions of the world (China is now a huge game market), and, oh yeah, every possible demographic is now a gaming demographic, not just teenage boys of all ages.

So nobody is really sure that they're doing the right thing, or all of the right things. I talked to one developer who is getting a tablet game ready for shipment in a couple of months. I asked them whether it would be free-to-play, or whether they would charge for it. "We still haven't decide that yet," was the answer. Wow. YOu never would have hear that even a few years ago.

I guess the best advice at this point is that you should be re-examining all your assumptions about the business. And then do that again in a few months, and regularly after that. It's gotten very unpredictable in this business, so stay agile.

Will the next console generation sell better than the last? I don't think so, unless the console makers pull some very large and clever rabbits out of their hats. If it's just "same as the last console, only 5x better graphics capability and it's $499," then no, the next console won't sell better than the last one. Good luck with that, console makers. It's going to be far more difficult this time to launch new harder and have it sell well over time.