To kick off the year 2009, I thought we’d start by looking at the business and culture of video games as it stands to develop now. What are the current trends and possible outcomes? How is the medium evolving due to technology and economic demands? There are some new video game genres developing, some new trends with distribution, and the smoke settling from the console war to gauge. To start, I was stuck at a Christmas Party this year where I met a guy who runs a beverage distribution business. He’s the person who supplies vending machines, stores, and gas stations with soda and beer, in other words. We got to talking shop and he told me that the major trend going on in the beverage industry is what he called functionality. People, particularly people in their twenties and younger, no longer purchase by brand. We’re instead attracted to drinks that perform a service like energy, vitamins, or some other perceived benefit. We don’t care if it’s a Budweiser, instead we ask what is it going to do that makes it better than other beers? This coincidentally sums up the exact same direction video games are headed in. Looking back over 2008, function was one of the major advantages the Wii had with its user-friendly games and Wii Fit. The idea of a console and fitness machine proved more than enough to move units for Nintendo. How will this growing concept play out in 2009?
The idea of gauging a video game console by its function isn’t anything new, one of the biggest selling points of the PS2 back when it came out was that it played DVDs. Making your console do something besides just play video games adds enormous value in the consumer’s eye. The trick is that you have to improve on that additional function, not just repeat it. A strong example would be the PS3’s Blu-Ray, because even though the technology is clearly of superior quality, it lacks any major improvement in terms of the DVD’s ability to play movies. I hate to use the dreaded comparison to Betamax, but that’s another case of quality not being a decisive advantage. The DVD was an improvement over VHS tapes because you didn’t have to rewind or risk degradation of visual quality from repeated use. DVDs, in turn, suffer from potential scratching and the ever-present issue of not having access to one when you want to watch a program. The Xbox 360, with its inclusion of Netflix and a downloadable movie service, has upped the convenience of the initial functionality of playing movies on your console. No scratching of discs and instant access to films means the Xbox 360 is the more convenient media center. Blu Ray may be superior, but it’s also still suffering from all the issues of a DVD. There’s still room for improvement in this new media, Netflix’s visual quality leaves something to be desired when watched on High-Def. Yet with Netflix’s growing line-up of digital shows and movies, particularly a superb selection of independent films, it’s hard to argue with the edge that the Xbox 360 has established.
Even the act of paying for something is technically a form of functionality when it comes to media. Piracy and the second-hand market for music, movies, and games are a testament to this. As an old essay by Ray Kurzweil on Copy Protection in the Music Industry outlines, the eventual alternative music has already had to accept is going to start applying to other media. In order to beat digital pirates, you have to beat them at functionality. You have to make it so it’s easier and more beneficial to get media your way than their way. An example is the iPod, which made itself an essential mp3 player that led to people buying mp3s for it. Netflix going online is also a good start to this, but its catalog of popular films is still somewhat lacking. Kurzweil noted in his book The Singularity that the new digital distribution method would be characterized by an unholy intellectual property bidding war and you can already see the symptoms. The other problem is establishing a pricing model that still generates enough revenue to make the whole thing worthwhile. Subscription services like emusic, which has now passed 100 million users, are paving the way for this new distribution model. A media service like Netflix will eventually offer a similar tiered subscription service, although regulating the number of videos one can download is creating an unnecessary weakness. Downloading an entire movie and watching it is inane when I can just click and watch it streaming. The best model for profitability while sustaining function would be to use anticipation and time delay depending on which subscription the person has paid for. Gold members get instant access to a film the day it goes online, Silver has to wait, Bronze even longer, and so on as companies find ways to continue to keep the business profitable.
Which leaves the question of games themselves and the new market of downloadable games. The perk is that you have no pawn shop losses, no contending for shelf space, and can allow a game to continually make money without an expensive PR campaign. The downside, as Soren Johnson explains, is that you lose perceived market value and potential customers. Not everybody has sixty bucks to drop on a game, so the secondhand market allows these people to participate in gaming where they otherwise would spend the money on something cheaper. There is also the bonus of knowing that when you’re done with a sixty-dollar game, you’re going to get some of that money back. Functionality is, once again, the way they’re going to maintain the profits. Presuming developers have begun to acknowledge that sixty dollars can no longer be the only pricing model for new releases, there are a couple of alternative. The first is the The Force Unleashed experiment, which involved selling an individual level to the player, an approach that has already proven successful for Telltale Games. Since games have already begun to mimic television episodes in their pacing, it stands to reason they’ll just start copying the way episodes are sold. You can buy the entire game for sixty bucks, or you can buy individual episodes and eventually play the whole game that way. Buying the entire game gets you bonus content, buying each individual episode means paying more money in the long run.
Downloadable content is particularly significant in the multiplayer aspects of a game. Adjusting distribution and pricing models is probably not going to come about anytime soon, but there are still ways to maintain profitability by keeping the player from selling the game back in the first place. The trick to multiplayer longevity is to maintain a constant stream of new content while tweaking gameplay so that new players are never discouraged. An excellent article at The Escapist by Tom Endo outlines the downfall of the multiplayer game ARC. The more you allow your game to remain static, the more people become proficient at it and dominate new players in a way that discourages playing online. As a consequence, they’re more likely to sell the game back. Players memorize maps, master unbeatable moves, and generally make the learning curve much steeper than it should be. It also accounts for the fact that no amount of play testing can handle millions of people playing your game and looking for an edge. The gold standard for this is Blizzard, whose games made over ten years ago are still played today because of the constant tweaking. Once you factor in that new maps and guns not only sustain the game, they also earn you money, then it’s easy to see how this will continue as a trend in gaming. Johnson, in the essay above, also noted that DLC ensures sales for both pirated and second-hand games by making sure purchasers still must download the additional content, thus in turn ensuring an extra sale from even these games.
Finally, the genre to keep an eye on for 2009 is that of the forum game. Greg Costikyan has recently released a Myspace and Facebook Vampire RPG, and the satirical ForumWarz has demonstrated how easily an RPG game design can be applied to social networks. The two basic systems are to either let people do a few things each day or to incorporate the game’s use into the actual website itself with unrestricted moves. Either design aesthetic has the same goal—find a way for people to play while cruising Facebook or MySpace—but I’m not sure anyone has mastered the formula of how to make money off it yet. That isn’t a sign of weakness in the market, as you’ve already got people sitting on the websites mindlessly clicking around, it’s just finding a way to coordinate this in a productive manner. The most probable change will be an adjustment in design aesthetic that adjusts its purpose towards generating traffic to the hosting website rather than being a game for its own sake. The most sophisticated website I’ve seen incorporate game design into the actual participation with the site is The Escapist, but others have their own methods that are similar. Forum badges, notification when someone quotes you, and ranks based on number of posts demonstrate a website that has designed the very fundamentals of socializing into a game of its own. Attempts to shoehorn micro-transactions or induce extraneous conduct are a bit misguided here. Functionality and using the game design to improve the actual goals of the website itself is going to be the trait of whoever finds the decisive model. As with all successful innovation, by the time someone is getting rich off of it, it’s too late to copy the idea.