3 Key Game Industry Trends

Is this how most game industry executives discover trends?

Several news stories breaking this week show signs of intelligent life in the game industry, and point to the new directions the industry is taking.

Gaming Gets Bigger Worldwide. Sure, this has been happening for a while, but since the beginning of electronic gaming the industry has been built around the United States, Japan, and Europe. If you've been watching, South Korea and China have become huge audiences for gaming and have grown some very large companies. which have been buying up US and Japanese companies. Gaming is spreading beyond these regions, as this study illustrates. The Southeast Asian game market will be close to $1 billion this year, and will hit $1.7 billion by 2014. So far, most  big game successes in that area have been home-grown, but World of Warcraft shows that a US game can do pretty well in an Asian market, thank you very much.

Indie Distribution Options Get Better. Indie games have struggled to find an audience, mostly relegated to Flash game aggregators like Kongregate. Now this article shows that options are increasing; EA Partners has signed up three indie developers to bring their titles to Xbox Live Arcade (XBLA), Playstation Network (PSN), and PC. It's a validation of those three games, of course, but also a message to indie developers that there is a wider market available they can reach even without the capital or experience necessary to navigate the process a Microsoft or a Sony will put you through. This also benefits EA, of course, by cutting them in on a revenue stream and helping identify good developers EA might want to acquire at some point in the future.

The Big Publishers Get Smarter. One example of this trend is the above item, where EA shows they are aware of things happening in the business and taking advantage of their strengths. An even better example is this article about comment's THQ's Brian Farrell made at an investor meeting in New York. He's planning to launch one of their AAA upcoming titles at $39.99 instead of $59.99, and hopes to make more money by selling DLC. He sees the important thing as building an audience for the title, which he can then monetize for years. Obviously it's easier to do that by selling the title at a lower price point, especially in a market environment where game sales are lagging. I think we'll see more publishers try this, and go to even greater lengths to build an audience for a title. We'll also see more different ways to monetize game development, through free-to-play and subscription options. I think the $60 price point is looking increasingly unsustainable for most titles, and we'll see fewer of those high-priced units in the future.

These trends offer some hope against the relentless drumbeat of poor sales numbers. There are going to be plenty of changes, though, so keeping ahead of things is even more vital for marketers.

Indie Games Win Xbox Live Victory

Breaking news... Microsoft has moved the Indie games category back into the games section on Xbox Live, after the tar and feathers were being prepared. Interestingly, this was done quietly, and not with a PR blast... even after Microsoft tried to defend the original move out of the games category.

Kudos to Microsoft for responding so quickly to an obvious mistake. A press release would probably be a good idea in order to put Microsoft's reasoning on the proper slant, at least from Microsoft's perspective.

Microsoft Vs. Indies

Microsoft has rolled out a new Xbox 360 dashboard, mostly to support Kinect and to look spiffier. But they've also made changes beyond the cosmetic, and in the process have ignited a firestorm among indie game developers. It seems Microsoft has moved the indie games out of the game store (where they have been, and you'd logically expect to find games). Now indie games are stuffed into the Specialty Shops, right next to the Avatar Clothing store. Seems eminently logical, doesn't it? But for some reason indie game developers aren't feeling the love.

Some developers feel that Microsoft was just stringing them along, allowing indie games as a way to get major publishers to support digital distribution. Now that they've got the major publishers trying it out, there's no need to clutter things up by allowing little tiny developers to use up space. Microsoft points out that hey, now they're showing the top 50 titles and not just the top 20 titles. Yeah, counter indie game developers, if anyone can even find the Indie Game store when it's not even with the rest of the games.

Developers who have been working on games for Xbox Live  and were getting near to release are especially angry, now that it looks like their games won't get much exposure. Many were hoping that they could move their games to Windows Phone 7, hoping for some strong connection between the two platforms. That may still happen, but Microsoft hasn't really said much about that.

I think Microsoft is making a mistake by sidelining the independent games. While the new dashboard is a little spiffier, it still makes it hard to find games. Much like iTunes and the Android Market and PSN and WiiWare... they all try different interfaces, and nobody's found a really good one yet. So it's up to the developer/publisher to try and get customers to come to the game. Not optimal, especially when you have tens of thousands of games to compete with on some platforms.

This incident also illustrates the dangers of dealing with a distribution channel. Sometimes the big dog scratches (like Apple or Microsoft) and the fleas get thrown off. Then again, if you didn't deal with a big distributor, you'd be left in the trackless wilderness of the Internet hoping for customers to stumble across your little game. Which brings us right back to marketing...