How The Game Industry Is Evolving From Gaming 1.0 to Gaming 2.0 [Part 2 of 6]

Welcome to part 2 of our 6 part series discussing the transition from Gaming 1.0 to Gaming 2.0. One of the themes touched upon last time was ubiquitous gaming. The declining costs of owning and operating smartphones coupled with the desire to maintain an identity online in social networks such as Facebook have paved ways for adoption of gaming. Viral messaging encouraged users to invite their friends and Facebook, the most popular social platform, saw a mass influx of social games that appealed to individuals around the globe. With tons of people now exposed to games, what will the future bring? Pleasure Before Business? Ubiquitous gaming can be looked at from a few different angles, the developer side and consumer side. Let's first look at the consumer side. As mentioned in the introduction, popular devices and platforms like Facebook and iPhone have created a network of individuals, connected by interests and social identities. Smartphones were originally envisioned to be citadels of communications - meant for upkeep of productivity and enterprise activities. As smartphone penetration increased, consumers surprisingly started using smartphones for games. Media metrics firm comScore's research revealed the most popular apps for Apple's iPhone and iPod touch were games. According to Tim Chang, two-thirds of iPhone and iPod Touch owners have downloaded and played a game, although most did not expressly purchase the device to play games Many developers on Facebook attempted productivity apps as well - only to find out that they aren't nearly as popular as games. LinkedIn had an app on Facebook called Bumper Stickers which ran for a long time, maintained by ContextOptional, which they released to test the waters for business apps but quickly came to the aforementioned realization. To date, games dominate and see the most engagement and repeat visits out of all the apps out there. Will this trend change? It's About Sociability The reality is that it's not just the gaming aspect of apps that captures users. It's the sociability - and that's what differentiates the social gaming industry from the traditional industry. The top apps on Facebook right now are Farmville, Texas HoldEm Poker, Birthday Cards, Treasure Isle, Cafe World, and Friend Quiz, respectively. In fact, the top gainers this week have been (according to AppData): Quiz Planet!, Quiz Monster, Friend Quiz, Friend Interview and Status Shuffle, respectively, indicating that social and interest in friends is king. Facebook in its early days was a haven for viral apps as users would receive a cascade of invites and messages informing them they've been bit by Vampires. Although such pandemonium has now been mitigated by Facebook's platform policies, users can still be approached for help in Farmville or challenged in a 1 minute game of Bejeweled Blitz. Why Do Players Engage? Ubiquitous is thus foremost about the ease of discovery and accessibility. Whether it's seeing a game message in your Facebook newsfeed or receiving a push notification on iPhone, users who normally would not have seen themselves as gamers are harvesting their crops gleefully with some players even mind shackled by induced compulsion loops that psychologically compel them to return to the game to advance. We will return to this topic at a later post but it's important to note that heaps of non-core gamers are engaging actively in social games for many reasons including positive feedback, escape from reality, bragging rights, and the ability to play in short breaks. This is great news for developers who have previously struggled to amass an audience. Upstarts like Meteor Games have over 5 million monthly active users on their games and generating decent revenue. Gaming 1.0 was about production of large games with long development cycles. Now, anyone with some good coding skills or even $20,000 in budget can create and launch a game to market. Traditional games also required expensive hardware, which most consumers did not even know how to install in their computers, or consoles. The new generation of games are not limited to extra hardware and can be accessed straight from the browser due to their light-weight build-up. The archetypical nerdy demographic we see obsessing of World of Warcraft is no longer the cornerstone. Most developers will tell you that they target females 35+ because of their likelihood of spending, bringing us to the next topic. Emergence of Free-To-Play Console games required some kind of purchase either online or from a retail store. Now, players can access games for free. The goal of developers is to create free to play titles that can get wide user adoption and then convert a small percentage of those users to paying users. Tim Chang foresees the emergence of a hybrid revenue model that blends several revenue streams, including free-to-play microtransactions focused on virtual goods and currencies and a subscription-based premium membership model. The majority, 80-90 percent, won't spend a dime in your game, but will be valuable in other ways such as inviting their friends and minimizing the cost per acquisition for developers and contributing feedback. Small number of players, 5-10 percent, will engage in micro-transactions to enhance their playing experience while 2-3 percent will pay for premium services. Ubiquitous Is The Future Although we are seeing tons of innovation, most of it highlighted at the E3 conference in LA, device agnostic gaming will be the most prevalent form of gaming in the future. The launch of OnLive, which brings hardcore gaming on demand through the cloud, will allow players to engage in console-level experiences, graphically and performance wise, regardless of whether they want to play through their TV or PC. Players who subscribe to such services are keen on playing games - whereas the other billions of players will simply not have the time or longing to try such games and will stick to quick bursts of play, a concept known as snack gaming which we'll touch up on the future. Lightweight flash and html5-based games will allow anyone to play games instantly. Thus fast loading multi-platform games coupled with the free-to-play business model and the desire to play with others will lead to the pervasiveness of gaming in our everyday lives. Check out the rest of the series: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6.

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How The Game Industry Is Evolving From Gaming 1.0 to Gaming 2.0 [Part 2 of 6]

Azam Khan

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Azam Khan