Editor’s note: Tadhg Kelly is a game designer with 20 years experience. He is the creator of leading game design blog What Games Are, and consults for many companies on game design and development. You can follow him on Twitter here.
For retailers and publishers in video games, Christmas is the busiest time of the year. All the big releases stack up through October and November, and are judged by consumers to be worthy or otherwise. On the digital side, Christmas is often one of the slower periods but, when the dust settles and spring begins, often new heroes emerge. Either way, the holidays mark the end of a cycle, and then we begin to wonder what’s next. Assuming the world doesn’t end on December 21st, what’s going on for games in 2013?
The games industry has become an awfully complicated place. In part this is due to new platforms, free-to-play business models and apps. At the same time the market has changed, with crowdfunding giving voice to tribes of fans. And yet old-school developers continue to make mistakes and shutter their doors (sometimes spectacularly). There has been an explosion in the “gamelike” industry, in areas such as gamification, educational and health gaming, but all are now showing signs of weakness. And, like a Balrog rising from the deep, the console industry is stirring once more and its fires cannot be ignored. The year 2013 is shaping up to be a year of disruptions and transitions.
Nintendo recently launched the Wii U, and effectively fired the opening shot of the 2013 console race. The launch itself seems to have gone passably well, though not as well as the Wii. It seems that Nintendo has a tough time explaining what Wii U is and why you should get one, and there are also issues, such as battery life, its social-networking setup and the way that data transfers from Wii and storage are handled. And the initial game lineup is pretty quiet. Nonetheless, Nintendo says that it has already sold 400,000 machines, and some launch games – such as Zombie U and Nintendoland – are receiving good reviews.
Nintendo’s hope is to recapture the market once more by playing the same card it always does – a new kind of control – and will probably have some success in doing so. This time, however, rather than aiming solely for the mom and pop players, Nintendo is trying to encourage gamers back to its system. There it is running into trouble, as many of those fans felt somewhat left behind by the Wii, and they also suspect that Wii U is underpowered as gaming machines go.
Microsoft is also expected to unveil the next Xbox in 2013. Xbox 360 is generally considered to be ancient these days, and also somewhat crufty with video, music, social networking, Kinect and so on. Its digital strategy is also outdated, more publisher and less App Store, despite once being a leader in that area. Beyond that, Microsoft also has a big challenge in finding a new Xbox marketing story. It’s become very difficult to tell what Xbox really means any more (and in console, where players are very tribal, that’s a big deal). So their challenge is to find a new sense of inspiration, which is no small feat.
This is also true for Sony, expected to announce a new PlayStation in 2013. While Sony has been trying hard to recapture gamers (with games like Journey), it has a big problem convincing the world to buy PS Vitas. The company as a whole is still losing money, although at a slower rate than before but, like Microsoft, its complex ambitions have resulted in a mixed bag of projects that sit uncomfortably next to one another.
The opportunity for either company is to be the console that gets back to being about games. While players love Netflix and other video on console, they generally don’t care about meta-stuff like social networking. Many of them want their machine to be about games first, and many developers want to be able to access the player market. The question is whether either company is able to see past its own over-wrought ambitions and make that big bet, and also which of them is able to get out of the way of developers and curate, rather than manage, their digital offering.
There’s one more story that could help light that way. Sure, maybe Apple will open up the Apple TV to apps or Samsung will throw its hat into the ring, but I’m talking about Ouya. Designed specifically for indie developers and distributing only through digital, the Ouya project raised $8.6 million on Kickstarter in 2012. It demonstrated that there is a market for indie consoles and that that market is genuinely passionate. This is a quality that has been lacking in the console space for some time, a story totally different from the big-corporate consoles. So it has the nimbleness to maybe make an impact. If it manages to own content of the sort that console makers cannot easily allow themselves to publish, then it could become the punk label to which all the cool kids gravitate.
And that might be the biggest disruption of them all.
While we live in a post-PC age, the PC is trying hard to adapt. Sales might be down, but the PC is still probably the most ubiquitous gaming device in the world after mobile. It is host not just to retail or indie games, but also (via browsers) social and open web games, World of Warcraft and other MMOs. So there’s a lot to play for.
In particular I think it’s a great time to be looking at Windows 8 as the next stage for social and casual PC gaming. Microsoft has already sold 40 million licenses of Windows 8 and each of those has a Store attached, which adds up to a lot of eyeballs. What will be really interesting is if Windows 8 developers apply the learning of browser-based gaming.
The browser has hit something of a roadblock in terms of performance, with Flash dying, Unity not quite there (in browser) and HTML5 struggling to make an impact. But if there’s one lesson that Apple has taught it’s that users actually prefer apps. They’re faster, easier to find and generally a superior experience because they don’t have that browser layer attached. Windows 8 enables free-to-play games to the desktop, much as iPad enabled CSR Racing. That by itself is a really big deal.
Now that Microsoft has closed the loop of payment solutions, and that, combined with desktop-level visibility, makes for a potent formula for the PC. Furthermore notifications from games can go to the desktop, which is a massive value-add for developers. These are all very good things.
I also think 2013 will be difficult for Steam. Steam is overwhelmed by its catalogue and not included as a part of the default Windows 8 dashboard. Its audience may stay fixed, or even decline, depending on the impact of the Windows Store. Steam is – and will always be – great value for the kind of indie PC gamer who loves his games, but it may have reached its zenith. What would be interesting is if Steam got involved in crowdfunding. It has the passionate audience and the payment solution, but so far Valve seems nervous about going all the way.
Then there’s social, tablet, mobile, location, augmented reality and so forth. While it’s increasingly clear that this space is all about being on tablet first, the days of it only being about iPad are drawing to a close. Androids tablets and their Kindle cousins are finally starting to make inroads, both in terms of distribution and getting better at monetisation. And Microsoft may eventually crack the Surface question.
The larger question facing social games is what their second generation looks like. Zynga remains troubled, now no longer in a special relationship with Facebook, and overly heavy. On iPad, newer developers like Supercell and Natural Motion have adopted the Zynga formula and are doing well, but that formula has a half life, which induces user fatigue pretty quickly. Once the platform amnesia phase passes, tablet/social could well become a sticky place in 2013.
Hopefully 2013 will mark a year of greater experimentation away from the roleplaying-game format that marked most G1 social games. Studios like 22cans are messing with ideas like Curiosity, a game in which players chip away at a giant cube. There are also lessons to be learned from Minecraft and collaborative creativity. On the more focused side, something very interesting is happening in social tournament games, which is quite a different kind of multiplayer from the turn-based games like Words With Friends that marked 2012. (Disclosure: I’m going to be involved in this social tournament area next year.)
There’s also the draw of cash gaming. Zynga is widely expected to move into real-money gambling next year to generate revenue in gambling-friendly countries like the UK. Gambling is a very different beast to social and has many expert companies already within it. It’s also a very difficult space within which to differentiate on content, because every provider’s games are largely the same. Lastly, gambling is much more heavily regulated than other games, which brings many associated costs. We’ll see, but I personally think Zynga will struggle in this space.
Finally there’s something interesting in the intersection of location and augmented reality. Location games have proved a bit of a dud because they’re very thin. A couple of years ago location was considered hot (remember Gowalla and SCVNGR?) but these days checking-in has become just another function. Foursquare is still the only name in location, and its gaming applications have largely stalled.
However I think there’s something to the idea of “local” gaming, where players gather together in real-world spaces with their digital equipment to play games. There’s something in the area of digital glasses, tablets and colocation that could prove very interesting. Imagine sitting down at a table and playing an enhanced board game, like holo-Chess in Star Wars perhaps, or a version of Magic: The Gathering where the spells are enhanced by image recognition to play animations. Next year might be too early, but it’s coming.
2013 is likely to be a tough year for the “gamelike” industries (such as gamification, transmedia, etc). My recent gamification post seemed to hit a nerve with many and I’ve received several emails from people who are tired of high-concept theory, and instead want simple actionable plans. A lot of questioning of the efficacy of gamification has emerged, and that kind of talk usually precedes a downturn. My anecdotal experience leads me to think that gamification’s hype days are almost done, and so the movement will likely enter a period of introspection.
Similarly, transmedia projects remain stuck in that high-concept space. Transmedia might be a big talking point at conferences, but so far little has really come of it. Like the virtual world buzz of five years ago, there’s only so long that you can continue with high concepts before numbers surface that show that the trend is more fiction than fact. And that’s the point where investors, brands and so on start to cool on the whole area. I would not be surprised if this happened to transmedia in 2013, as it feels due.
I also expect something similar to happen with exercise, education, health and several other gamelikes as their novelty wears off. There will likely be some consolidation in specific markets, such as diet and exercise trackers, while others will fade entirely. Perhaps this will lead to a new round of gamelike hype around a new technology like augmented reality. A year from now we may have conferences springing up to tell us how the future will be like an overlay on reality, and we can all get excited by the prospecting of game/life crossovers.
Maybe, but we’re probably not quite there yet.
A year of consolidations and retrenchments for some, of attempting to transition for others. However, also a year of potential disruptions. Perhaps the most interesting thing about the games industry, and why it feels fragmented these days, is that sense of permanent disruption. Can console makers really continue as they have for years, releasing updates only every once in a while and dealing exclusively with preferred developers? Will tablets eventually supplant consoles entirely, with their much cheaper (and improving in quality) games and business models? Can gamelikes find a new story to tell, or are they going to get stuck in this phase of questionable value for a long period?
These and many more are the continuing questions that we should all be asking.