Mobile Sands

January 28, 2009

The future of games looks bright

Filed under: App Store, games, iPhone, Netbooks, New business models, Smartphones — AJ @ 5:56 am

Yesterday evening, I attended a talk by Professor Chris Swain about the future of games.  

The main focus of Chris’ talk was creativity in the game development business.  One of the things that he talked about was how Apple’s App Store (and similar marketplaces from Microsoft for Xbox or future ones for Android and Symbian) can unlock creativity in the gaming business.  In contrast to the normal complaints about how Apple’s 30% cut is too much, Chris said that “70:30 is the best publishing deal ever” for game developers.  He did complain about how the Apple’s shopping interface (top 10, top 50, others) favors cheap $0.99 games over more expensive development efforts.

He said that, in contrast, publishers of console games make only 17% on AAA titles.  Since developing games for major gaming platforms can cost close to $20M, it means that a game publisher must have line of sight to selling over 1 million games. This pushes publishers to develop proven, formulaic titles, hampering creativity.  Digital distribution where publishers can get a higher cut can change that, enabling smaller team to innovate. And even for formulaic games, if the digital medium of distributing games is successful, lot of publishers would prefer to sell online rather than through Wal-mart (the biggest channel for game titles today). 

Games on popular consoles cost so much (and publishers get so little)  because companies that build the hardware (Sony, Microsoft, Ninetendo) need to collect a tax to recover the money they lose on the console.   If interesting enough games could be created on powerful low-cost platforms that come with multi-touch interfaces (smartphones, mobile internet devices, netbooks etc.) and can be digitally distributed, the whole business model could change. I am sure this keeps lot of people awake at night – some worried about losing their existing business, others abuzz with the opportunity.

Here are two more interesting (and perhaps relevant) recent news items:

1.  More powerful, multi-touch, touch screens on their way. See story about Cypress and Palm.

2. ABI predicts 139 million netbooks by 2013.  Maybe a little optimistic, but definitely the expected direction.

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