“The games industry, like music, TV, books and almost every entertainment medium today, is undergoing a rapid and confusing change. Retailers are struggling and publishers are panicking as the internet revolutionises how their businesses function. Many don’t understand why its happening or what to do about it. They are floundering.” Opening paragraph of Will Luton’s Free-to-Play: Making Money From Games You Give Away.
There is no doubt about it, the games business has changed. Digital convergence* in general, combined with a huge shift towards social interaction online has left the games industry struggling to adapt. Traditional relationships between developers and publishers are under pressure and need to change. Previously games were more costly to develop and required an established distribution network to get to the players. Now development costs are plummeting (due to technology shifts) and distribution is practically free. Player numbers are rising massively, particularly across mobile and tablet, and there is an inherent expectation of players to be able to interact with each other when playing forcing architectural changes in the way games are built. The business models and how games make money has completely shifted towards freemium and free-to-play (F2P). The games business is much more a service business than a product business. As Will Luton points out in this book, Free-to-Play: Making Money From Games You Give Away, even veterans of the games industry are struggling to adapt.
Atomically speaking, building a game traditionally required 2 key talents: hard core development and creative genius. With these core skills in place and a good understanding of the principles of game design a games studio could be born. And indeed many were. The rapid emergence of so many independent studios helped perpetuate the adoption of the F2P and freemium models. In fact, its a pretty obvious outcome when you consider it. The number of suppliers increased dramatically at the same time as distribution and marginal production costs headed towards zero. Free is the predictable outcome.
There is no doubt that F2P is one of the scariest developments in the games industry and it is hard to get right. At the same time, however it is one of the biggest opportunities as it is a potential leveling field for the indies and the larger studios. Today, games studios need to not only master game design and development – they must also become experts at running games as a service (GaaS), behavioral economics, retailing, psychology, data science and analytics. Easy right? I don’t think anyone can say its easy but thankfully there are helpful resources emerging. Will Luton’s book is a great starting point. It decodes a lot of the jargon so often bandied about and is a down to earth book that will equip the games designer with the fundamentals of what they need to think about. These days, success will largely be determined by how much one masters these skills so I would say this is a ‘must read’.
*Digital Convergence is a broad term encompassing ubiquitous high speed communications, significant technology advances in smartphones, tablets and other devices, mass player adoption across the planet with nearly 2Bn smartphone users rising to 7Bn by 2017.