Video games in 2008: It’s great to be a gamer

Video game industry shiftThe game industry is, undeniably, already well on its way into a new era. It is, like a certain presidential candidate, change we can believe in. It is both an exciting time (as a player) and an uncertain time (as a developer). But it is also a highly lucrative time, as is usually the case when truly disruptive trends begin to come to a head (see also, iPod).

Hardware and software sales continue to trend well into the billions of dollars; industry figureheads like former Sony exec Phil Harrison have allegedly stepped down because of blowback against some of the newer game ideas that are making money where there wasn’t any to be made in the past; and, since I would be remiss to not include it in a post on a fansite devoted to passionate discussion about its very being, there is, without question, Nintendo.

Truly, if I could reminisce for a moment, 1986 and the following decade was an amazing time for gaming, but with each passing day your humble Infendo narrator is beginning to believe that it can’t hold a candle (red or blue, Zelda fans) to what’s transpiring in the games industry today. The classics will always have a place in the foundation of the grand, ever morphing house of gaming, sure, but we’re seeing things built today at such a pace and off on such wild tangents that I dare say an entirely new foundation is forming. In true paradigm shift tradition, we are often unable to see what’s going to grab our attention until it is literally on top of us — or under us, as will be the case when Wii Fit takes the U.S. and Europe by storm as it has done quite easily in Japan.

But back to the present… Parents are jostling for DS time with the kids so they can boost their Vision or Brain Age scores to half their actual ages and teenage girls are rockin’ and rollin’ with the Legends of Rock without thinking twice about the fact that a mere two — nay even just one — year ago they wouldn’t have been caught dead losing themselves to some video game. [Insert the appropriate emo facial sneer here]. It’s all stuff we here at Infendo have trampled to death already, but the new angle today is just how powerful an affect Guitar Hero, Rock Band, MMORPGs and even free browser flash games have had on the industry giants, who, as is often the case, are often the last to shift their considerable bulk to risky new avenues. Scrabulous, anyone? I only ask because this free online knock-off of Scrabble generates $25,000 profit per month in advertising for its two creators, Rajat and Jayant Agarwalla. Jayant, it should be noted, is 21 years old.

On a related note, we saw this week what happens when established players don’t move quick enough: Tomb Raider studio SCi Entertainment axed a quarter of its workforce last week in an attempt to raise $99 million and plug a heavy loss it incurred in the first half of 2007. Unfortunately (or fortunately depending on your level of progressiveness), I imagine we’ll see more of these kinds of announcements throughout 2008-2009 just as I imagine we will see several studios relying too heavily on safe choices as they attempt to weather the storm (read: delay the inevitable).

Others still will choose to adapt. Nintendo leads in this regard with the DS and more recently with the Wii; it read whatever tea leaves were invisible to the mainstream gaming press and its competitors in the early 2000’s and capitalized on them to the effect we’re seeing today (and will see more of in the future). At GDC 2008 in February, we saw hints that Microsoft, too, was prepared to strategically shift its brand in more meaningful ways that just hokey holiday “family fun” commercials for the Xbox 360. Seth Schiesel, writing for the New York Times last week, detailed an exchange with Microsoft’s John Schappert that might as well have been a market brainstorming session in Kyoto, Japan.

I was not especially surprised to walk into a meeting with Mr. Schappert of Microsoft and find the walls covered with posters that looked as if they could have been ripped straight from Nintendo’s marketing playbook. Those posters actually conveyed more about Microsoft’s attempts to adapt to the new gaming market than almost anything Mr. Schappert could have said.

Those posters showed groups of people gaming together, which, surprise surprise, is a cornerstone of Nintendo’s entire Wii Would Like to Play ad campaign. I, for one, welcome my social gaming overlords, because I know the games they will bring are far more robust than the haters that attempt to pigeon hole them with the “casual games” label would have you believe. Phil Harrison seemed to think so, and he believed in it enough to resign from Sony because he thought the company grossly misjudged the direction of the industry when they built the PS3. As much I maligned him in the past, it would appear he was more of an advocate for change in the industry than I would have liked to believe. Point, Harrison.

At GDC, Harrison admitted his bosses at Sony in Japan completely misgauged the direction of the entertainment industry, Schisel reported. With the PS3, Sony focused on high-tech single-player experiences, while Harrison tried to emphasize casual play with products like Buzz, the EyeToy and SingStar. Like Viva Pinata before it, however, those were great games/series built on the wrong system. It is not a great harbinger of things to come, especially when we’re talking about great game ideas like LittleBigPlanet. Harrison’s calls, according to him, fell on deaf ears. It was Metal Gear Solid or nothing. So he left.

As an aside, the resignation doesn’t speak well of what Sony Home might bring. If your number one casual gaming advocate jumps ship because he believes your company failed the casual gamer core competency test, there’s an issue in there somewhere.

“It’s a very interesting and frustrating thing for me to experience because I have been banging the drum about social gaming for a long time,” he said. “And our Japanese colleagues said that there is no such thing as social gaming in Japan: ”˜People do not play games on the same sofa together in each other’s homes. It will never happen.’ And then out comes the Wii.”

If there’s still any doubt left, consider this: the Wii, now well beyond the “launch stage,” is still experiencing sell outs around the world. At GDC, Nintendo of America President Reggie Fils-Aime said Nintendo is making 1.8 million Wii units a month worldwide, and the shelves are being stripped bare even now, almost 18 months after the system’s debut. The foundation is there, so expect big things from Nintendo and the community at large for the next 18 months. It’s simply impossible to ignore. “As gaming turns social, industry shifts strategies.” Indeed.