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Feb 8

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Few things are harder than predicting the future. The people of Wall Street were paid vast amounts of money to do it and they failed miserably, causing an international financial crisis. I can’t be worse than those bankers, so it’s my time to make some predictions about the future — about game development’s future.

Times are tough for game developers: independant studios are falling left and right, Electronic Arts is cutting over a thousand job — a lot of talented people find themselves without a job.

Yet, when you look at sales numbers, things don’t look so bad. The gaming industry grew in 2008. If you ignore Nintendo (who was behind a lot of the growth), numbers stagnated but didn’t really drop. Publishers are cutting projects and jobs more in reaction to the drop of their stock rather than the drop of their sales. As such, they might be over-reacting to the situation.

Still, it’s going to be tough in the short to medium term. On the long term, things could get interesting. Times of crisis are when the status quo can change unpredictably. The gaming industry could be quite different from what we’re used to at the other side of this storm.

Here are some changes that I expect will happen:

  •  Cheaper Games
    At $60, games are expensive. While people will still buy games, they’ll spend more prudently and will prefer affordable titles. Game prices will drop and free games (supported by ads) will become more common.
  • Longer Games
    With the same intention of getting more for their money, customers will prefer long games to short ones. More unemployed people also means more players with a lot of free time to occupy. As such, long games will become more popular. RPGs, turn-based games, games with strong multiplayer and other games that can be played for a long time will rise in popularity.
  • More Independant Studios
    Independant studios are having a hard time right now because publishers are cutting projects left and right. Once that wave of panic has passed, publishers will still need games to sell. After gutting their internal studios, they’ll have to look outside for teams. At the same time, all those developers who lost their jobs will be looking for new ones. Some of them will create new studios. After years of consolidation, the gaming industry will quickly get back to having lots of third party developers.
  • Games from the Rest of the World
    Development in Silicon Valley is expensive: salaries are high and office space costs a lot. There are lots of talented teams working elsewhere in the world that are much less expensive. The crisis has been softened here in Montreal for that reason — projects here cost less than American projects. I expect more quality games to come from outside the US and Japan: China, Korea, Eastern Europe and Canada have the advantage when budgets are cut.
  • More Downloadable Games
    Large publishers are being extra cautious about which projects they sign. Stores stock fewer games, focusing only on the sure-fire hits. Downloadable games, on the other hand, avoid those hurdles entirely. Lots of developers are turning their eyes to downloadable PC, XBLA, PSN and iPhone games. As it becomes harder to get games into stores and easier to distribute them online, I expect the move toward downloadable games will accelerate.
  • Fewer Casual Titles
    By definition, casual gamers aren’t very passionate about gaming. If time are tough, they’re likely to stop purchasing new games. They might turn toward free games, but that will make it harder to sell them titles directly. As such, I wouldn’t be surprised to see fewer casual games.
  • Lower Budget Games
    Games will have lower budgets. That means it will be harder to compete strictly by having higher production values than the competition — you can’t just throw money at the problem anymore. Efficiency and creativity will be more important than ever. This will affect marketing too: social games that create buzz because people are playing together will become popular without needing huge marketing budgets.
  • PC Games on Netbooks
    Netbooks, those super-small sub-$500 laptops, are all the rage these days. People want small computers they can carry everywhere without paying through the nose. Netbooks are not very good gaming machines, but developers will have to adapt: there will be good business making games for these new systems.
  • More Episodic Games
    Making a game is a huge financial risk. Episodic games reduces those risks by splitting development in smaller chunks. If an episodic game is unpopular, it can be changed or even cancelled before further episodes are developed. What’s more, individual episodes are cheaper to purchase by players, are downloaded rather than bought in stores and the entertainment is split over a longer period of time — all factors I mentioned above.
  • The End of the Gaming Gizmos Fad
    Gizmos have been popular in gaming lately — how many fake musical instruments and plastic thingies to put wiimotes into do you have? Publishers love these things because they raise the profit margins of their games. Higher prices mean people are less likely to buy them in a recession. Guitar Hero World Tour and Rock Band 2 sold below expectations in part because of this — you don’t buy a $200 game when you fear you’ll lose your job. I suspect the popularity of games requiring special hardware will drop very fast.

Chances are, I’m completely wrong with these predictions. The future is hard to predict when things are going smoothly and near impossible to divine when things are chaotic like now. Chaos brings change — some will be good, some will be bad. A crisis can bring change in the status quo; those at the head of the current status quo have the most to lose.