The Games They Are A’changin’ Part Two: Economics, New Business Models, and What’s Next
The game industry is an economic powerhouse, providing 220,000 jobs in the US alone. It’s year-over-year revenue growth is dramatic. It generated $36 billion in 2017 in the US, an 18% increase over the previous year. That’s almost triple the amount generated by the NFL, and 3.5 times more than the movie industry. Globally, the video game industry generated well over $100 billion. But mobile is in a class by itself, accounting for a whopping 42% of that global revenue. Smartphones represent the most transformative technology for how games are used and sold since broadband. Developers are taking advantage of this new game platform that’s already everywhere, just as they did with desktop computers a generation earlier. This has led to a massive glut of mobile apps all fighting for the growing market. The “Freemium” or “Free-to-Play” games and apps dominate, and reflect a wider business shift towards tiered models that get people interested in the game, product or service and then offer tools or content for a cost.
The rise of the digital marketplace has been a boon to small, independent developers (indies), many of whom are found in clusters in and around cities such as Boston. This makes good business sense given the number of top colleges and universities with expertise in technology and gaming. MIT, Becker College, WPI and Hampshire college are among the institutions offering game design and production, and students are making games while they are still in school. This has led to students graduating with a solid game prototype ready to launch, or in some cases a game that’s already seen wide adoption. Here in Massachusetts the game industry generates $2 billion annually, driven by large studios such as Harmonix, Turbine, Rockstar and Disruptor Beam, as well as a myriad of small, indie studios.
The next big changes have already begun. Like many tech industries, game developers are assembling teams who work remotely, sometimes on different continents. This reduces the burn rate of clumping a team in an office building, and allows developers to build and reduce team sizes as the development cycle requires. There are potential pitfalls with this model, such as the very real concern about code being stolen, or simply trying to schedule a meeting when everyone is awake. But it’s clear this trend will continue to grow in this and many industries, despite the obstacles.
The new technologies emerging are astounding, and as transformative as true 3D graphics or broadband internet were in previous years. Get ready for more Alternate Reality experiences, wide adoption of Virtual Reality and the hardware that delivers it, more immersive game experiences and more applications of video games in education and business training.
Video game marketing will continue to get more personalized, and users will have even more influence on developers before, during and after games are developed and released. Mobile will continue to grow, and eSports will see rapid development. More people will be playing on more devices from wherever they happen to be. Changes will continue and accelerate in all areas.
Except bugs. There will still be bugs. There will always be bugs. That never changes.
Chris Parsons
Sources:
https://www.statista.com/topic...
https://newzoo.com/insights/ar...
http://www.masslive.com/news/i...
https://softwareengineering.st...
