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GDC 2006: My Take

I have one more session to blog, but it will take a while, so I'm going to jump up a level and look back at three days of the Game Developers Conference and try to make sense of it all.

Viewed from the outside, it would be easy to think that the biggest story in games right now is the advent of the next-generation consoles -- the Xbox 360, out now, and the Sony PlayStation 3 and Nintendo Revolution, due out in a few months' time. There's some truth to this idea. A few major game developers have shipped their first wave of Xbox 360 titles (and so are onto their second wave), while other developers are working on their first wave of titles for one or more of the consoles. Costs are up dramatically -- one estimate is that art for next-generation consoles costs four times as much as for last-generation consoles, with title development costs in the $15-25 million range. This makes the risk extremely high, and so developers are understandably extremely concerned with the transition.

That said, I would argue that viewed from the inside, the next-generation consoles aren't the biggest story. The major stories, as I see them, are:

Massively multiplayer online games. World of Warcraft is now a half-a-billion-dollar-a-year business. I didn''t hear it said at GDC, but I'm willing to bet this makes it the most popular game franchise on the planet, by a wide margin. A variety of vendors -- Simutronics, Big World, Multiverse, and Emergent -- are shipping (or developing) middleware that, in theory, will reduce risk and time to market for MMO titles. Innovative economic models have been not only tried but proven effective. And venture funding is available to build MMOs (even, surprisingly, uninnovative ones).

Casual games. Casual games are here and in a big way. Why? Because the economics are so much more compelling. Typical budgets run from $100,000-250,000 -- that's from 1.67 percent down to as little as 0.4 percent of the cost of developing a next-generation console title. The market is vastly larger, both demographically (there are far more soccer moms and office park dads than there are hardcore gamers) and technologically (there are far more people with PCs and Internet connections than there are with Xbox 360s -- or any other console, for that matter).

Mobile games. Though we must contend with the walled garden approach of US cellular service providers -- who as a group seem incapable of learning from the open, transparent software model that has helped make NTT DoCoMo so successful -- still, the mobile phone market is undeniably huge. Two billion mobile phones, 800 million new handsets per year, 250 million smart phones this year, more than 1 miliion new subscribers every day. The mobile phone gaming market is maturing and highly competitive, but that's because it's so valuable.

Alternative distribution. A sub-text of this year's GDC was how it seems so clear to so many people that we are at the early stage of the waning of packaged retail software as the industry's primary distribution mechanism. While a few MMOs have retail starter kits, most bypass retail entirely. Mobile games are downloaded directly to phones and so by definition bypass retail. The vast majority of casual games are distributed via the Web -- it's the very rare mega-hit casual game that is later made into a retail title. The console vendors are falling over themselves to explain their electronic distribution strategies: Microsoft with Xbox Live Arcade, Sony with its network service for the PSP and the PlayStation 3, and Nintendo with its service for the Revolution. Even one of the most successful retail PC game vendors, Valve, has developed its own direct content downloading system, Steam.

Taken together, these trends point to a near future that looks very different from the recent past. A typical game might be massively multiplayer and casual (the two aren't incompatible -- see Puzzle Pirates), with a mobile component that connects to a PC-based component, and all of it delivered electronically.

This was my first GDC in five or six years, but I got the distinct impression that the level of enthusiasm was up substantially compared to the last few years. There was a palpable sense of excitement. Just a few years ago, it seemed like the industry was on an inexorable path towards astronomical budgets for state-of-the-art, multiplatform, PC/console titles -- often with licensed content to "reduce risk" -- as the dominant development paradigm. Now developers realize that there are more options. We may not be back to the "lone programmer at the kitchen table" model (though I saw one nice mobile game that was developed by a single person), but we're closer than we have been in a long time. It's a good time to be making games.

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