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Let the games begin
by Jasper Smith on 04/26/13 07:54:00 am   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

The TV games console industry is worth around $100 billion a year. Not bad at all for an industry in complete turmoil.  

The macro / micro factors at play are all beginning to take their toll on the proprietary nature of the status quo. The cracks are beginning to show everywhere and now it is surely only a matter of time before the once strong ecosystems that have supported the incumbent console players’ collapse.  A collapsing eco system is a great incentive for entrepreneurs keen to create and finance a new breed of gamingcompany.  Companies that do not have the corporate or technical restraints associated with a successful but increasingly legacy business.  These start ups, PlayJam included, are able to harness a set of open standards, willing investors and above all consumers who want change. Step back and take a look.

The hardware market has evolved so significantly over the last few years, principally because of the innovations in the mobile sector.  Hardware specs across the high-end consoles and phones are now quite similar, with quad coreCPU,super high end GPU and enough memory to store 100s of apps. These devices are capable of playing the richest games and the hardware has never been cheaper or more accessible to new entrants.  The bottom line is that until recently it was pretty hard to create a fast, reliable games console and doing so was expensive and the preserve of a few. Now it is straightforward to create great hardware, and relatively speakingmuch cheaper than it has ever been.  As a result we foresee many new companies beginning to create HW/SW platforms to support richTV gaming without the need for a $300 console. PlayJam’s GameStick, Nvidia’s Project Shield, Steam’s SteamBox and Ouya all being great examples.

Linked to this, the hardware and software industry has seized Android as the change agent.  Andy Rubin, the creator and former head of Android, may have stood down but his legacy will be heralded as perhaps the greatest coup in the software industry.  My guess is that in 5 years time people will see Rubin as having been more influential in some respects than Steve Jobs. Jobs created a super business and delivered some great products. Rubin and his friends created what will probably be the most prolificsoftware platform known to man, and one that will touch the majority of people on the planet.

Let the games begin. It used to make sense to spend $100m on one game because, although risky, if the game was successful the recoup could be rapid and the profit would roll in.  But consumers are increasingly adverse to paying premium prices for new games, which is why GameStop, a shareholder in PlayJam, focuses so much of its attention on trade in games and re-sale product. The economics of producing console grade titles no longer stacks up, unless it is subsidized by hardware sales – but, because of the reasons above, we already know that won’t last for long.

As a result over 1500 console game studios were closed in 2012. Where has all the talent gone?  Well, mostly to mobile studios. In fact the growth in the number of new mobile studios setting up is tantalizing. Over 10,000 independent studios started up last year, all with the dream of creating a hit mobile game.  Companies like Hutch in the UK are great examples. A few ex console guys clubbed together and bet big on one game.  One year later Smash Cops is a top 10 iOS game worldwide. Awesome result. These success stories drive other hopefuls and create an environment in to which investor funds flow because the average cost of developing a great Android game is so much less (circa $100,000K), and the upside for the indie developer and investor so much higher because they retain the majority of the profits.

Hardware, software and games are now cheaper, more open and have a lower cost of delivery than ever before, but the TV has been a closed domain since its inception. Microsoft, Sony and Nintendo invested billions to break in and have enjoyed great returns in the first wave of the console industry, but my guess is that the upwelling of innovation will force them to do one of two things: 1) drift to the high end and offer great games services at a premium price for a smaller audience. i.e. more of the same or 2) accept defeat and go to a completely open ecosystem using Android as the platform. I cannot see the latter happening as it is against their ethos and against the huge fixed costs of their existing business systems.  But they should, because Android is entering the TV ecosystem at a huge rate of knots. China, perhaps the biggest TV market in the world, will be ‘all’ Android in 2 to 3 years time.  Europe and the USA are some way behind but there is little doubt they will follow because manufacturers cannot afford the overhead of maintaining a proprietary system. Even if they can ignore that pain, they will look to the future and see that not to do so puts them in the same boat as the incumbent console guys and that boat has a hole in the bottom. Time to buy Google shares?

We are at an inflection point in the industry.  Spotting the trends some time ago we at PlayJam began investing heavily in building a global games network for TV.  Our existing enterprise system brings global billing, analytics, tournaments, leaderboards, CRM and the entire back end infrastructure required the run such a service, but we wanted to take a bit more control of the consumer experience and so set about creating a reference device that would make playing our developers games as fun and rewarding as possible - enter GameStick.

The micro games console running Android, was launched on KickStarter in January and became the 8th most successful project in the history of the crowd-funding site; why? Because consumers want an alternative to the high cost of traditional console ownership; GameStick retails for $79 and the average cost of a game is a few dollars. Compare this to $400 for the consoler and $40 per game for a traditional console, question answered.

Now let's look at how these games are controlled on TV. Most mobile games currently use touch as a control mechanism.  Not much use on a TV unless through a second screen app. But with the influx of ex console talent in to the mobile market, who possess the skills and desire to create high-end 'console' titles in Android, this is changing fast. Companies like MadFinger Games are making full use of the Android frameworks for gamepad support and the Android Open Accessories initiative is enabling controller manufacturers to adopt common standards.

The work that Nvidia has done around creating a spec for Android HID controllers is beginning to incentivize developers to build in controller support as standard.  At the same time Green Throttle Games have developed a game controller platform that, amongst other things, allows for true impulse multiplayer games on TV.  And now many manufacturers, such as Nyko and Steel Series are making bluetooth HID controllers for Android games.  To tie these initiatives together PlayJam is talking to developers all over the world to engage them in the potential of the new TV gaming market.  Here’s why: in 2012 the Android games market grew by over 100%. The console market remained flat.

We are now at a point where great hardware is readily available. The Android software platform is now mature, stable and most importantly open to everyone and free to use. And game developers are flocking to mobile and by default Android.

Our aim at PlayJam is to stimulate and accelerate change within the TV games market by offering the tools, developer community and content to allow a best in class games service to be delivered to consumers via multiple partner devices. We have around 30 partners today.  Our relationship with Arm, where we will place PlayJam's games platform at the heart of the Arm ecosystem, is a hugely important deal for the company.

Together we see a future where developers can publish their games to TV as simply as they can to a mobile device. We think this opportunity is one worth fighting for and one that in a few years will be worth around $20bln per year.

 

 

 

 


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Comments


Henry Shilling
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Playjam still do not have their API available on the developers website. How long until you launch? Seems pretty old school console to me.

Tarique Naseem
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Interesting times. It's good to see the likes of Green Throttle, PlayJam, Ouya, et al, disrupting the console market.

I wonder how the game will change, however, (sorry about the pun!) when the major TV manufacturers start looking at Android itself to drive their 'Smart' TV's instead of their proprietary built-in OS's?

Eric Pobirs
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Most of the smart TVs are running Android under the hood, much like Amazon and Barnes & Noble do in their tablet products. It's just hidden behind their proprietary layer. What they don't do is give access tot he Google Play store. Instead they have their own store because, shocking revelation, they want a piece of the action on software sold to run on their TV.

Eric Pobirs
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This is a bit disingenuous. The cost of an Android game is so low compared to a console game because so much less is expected of an Android game. I like playing on my phone and tablet but little there is competition for what I get on my consoles, unless you limited the choices to XBLA and PSN offerings.

What of the games on Android that seek to match the console experience? What was the budget for Square-Enix Chaos Rings titles, for example? These are huge productions for Android, requiring downloads of about a gigabyte each. And yet those are on the small side compared to PS2 RPGs that required a dual-layer DVD to store while only having to drive an NTSC display.

I see little difference currently between developing for Android devices and the download sales channels of the consoles. The console companies expect more professionalism and testing from the developers but then it also means the consumers get more reliable quality levels. I've encountered more than a few Android games that should never have been released with a price tag higher than FREE.

The Android game market grew 100% last year? Good, it needs to considering it simply didn't exist when the current consoles were in their second and third year of doing business. The console business was flat for the year? Gee, too bad. It was merely hugely profitable for those who produced hit titles as opposed to some grander adjective for greater profits. This in a year when one of the big brands was launching a new platform and the other two were well known tot he public to be launching new platforms in the coming year. Having a flat year instead of a significant decline is actually a notable accomplishment for the industry under those circumstances.

Caulder Bradford
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The bottom line is Android hardware is vastly inferior to even current (soon to be previous)-gen consoles. I don't see Android devices "eclipsing" anything (except maybe iOS devices). I work on a daily basis with mobile hardware and I can assure anyone that Mr. Smith's assertion that "Hardware specs across the high-end consoles and phones are now quite similar" is completely false. The feature set of mobile hardware can accomplish much of the same things that "high-end" console hardware can... but at a fidelity of about 10% (and that's being generous). Yes you can do post-processing, yes you can do high-poly models. But you really really have to pick your battles. You take 30+ hardware features that you may want to utilize, and you pick maybe your top 5 must-haves from that. The hardware budget for the kind of high-end visuals you would see on consoles just isn't there. Not by a long-shot.

Now of course tech isn't everything... but this fellow shouldn't be using that as a selling point for his startup.. ahem... I mean "argument".

The only thing that may give consoles a run for their money may be so-called "living room pcs" such as the kind Valve are rumored to be involved with....


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