What were the Game industry trend in 2015
BARRIERS TO MARKET ENTRY TUMBLED DOWN
We’ve been witnessing the rise of mid-level independent developers. In 2015 video game development became more affordable thanks to technological advancements, crowdfunding and marketing automation, resulting in a surge of new titles coming to market. The genesis of easy-to-use and comparatively cheap engines (i.e.,
Unity,
Unreal Engine,…) and other development tools let smaller budget productions through the industry door. The availability of technology and the growing number of ad networks allowed marketers to streamline work between platforms and reach the right audiences across devices. Services like Steam Xbox Preview, Steam Early Access and etc. and initiatives like
Kickstarter,
Indiegogo and
Fig continued to gain momentum. This enabled developers to reach potential customers without a publisher and build a dedicated player base ahead of product’s launch.
Statistics show that half of the games that have sold 1,000,000+ units on Steam in 2015 have been Early Access titles. It demonstrates there is demand for the types of games that big publishers aren’t interested in producing and points to a broadening of the video game industry. This trend is most vivid in mobile and PC segments. The barriers to entry in the former could be considered close to non-existent. Consoles have already embraced free-to-play, but remain to be less an open platform than Steam, iOS and Android. They are moving in the same direction, just a little slower than PC and mobile.
“It’s not all unicorns and rainbows though, more like survival of the fittest in an increasingly saturated marketplace. Everyone’s fighting for control over players’ minds and hearts. And with production costs decreasing, creativity, quality and depth become the key factor.”
—2015 in Review: Trends that shaped the Game Industry, WarGaming.net
MAINSTREAM GAMES ARE BECOMING SERVICES AND INDEPENDENT DEVELOPERS ARE STEPPING INTO DOUBLE A
With the competition growing intense, data-driven planning and decision-making become instrumental in driving sales growth. Industry giants focus on interpreting player behavior and tweaking the experience accordingly. For mobile giants like
Glu Mobile,
Kabam and
SuperCell development is becoming data-driven process that leans toward regular updates rather than launching new products. Popular games are being turned into
GaaS (“game as a service”) with content built off customer wishes, difficulty levels tailored to audience and a network of game-related tools to support them.
It’s really hard to get noticed in an oversaturated marketplace, and small studios that aim at sustainable growth rather than short-term gain must re-think their strategy. One way to get noticed is expanding their teams and re-focusing from niche titles to double-A products. These are smaller in scale and with less technical prowess than their triple-A brethren, yet much more engaging. While deeper and more polished than casual games, double-A products have greater chances of resonating with a wider audience and getting players emotionally invested. Getting platforms on side is instrumental, because they have access to an audience bigger than that any small team could ever attract. A few small teams became large by making this switch, and other smaller teams are expected to step into mid-scale production in the coming year.
MOBILE IS WHERE TRADITIONAL PUBLISHERS STRUGGLE AND FREE-TO-PLAY DOMINATES
The mobile market has seen yet another booming year with
23% year-on-year growth rate (~$
30 billion generated by mobile games worldwide in 2015, according to
Newzoo). This market is largely dominated by Japanese, American and Chinese companies and is predominantly free-to-play. If you look back at the top grossing charts of 2015 you’ll see that those are dominated by products that
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Have elaborated free-to-play monetization to them,
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Are constantly updated with new features and content,
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Operate both as games and social spaces. As the market has grown and matured, fewer and fewer amateur success stories happen.
Something that has become prevalent in the mobile market is that it’s controlled by an entirely different line-up of companies than PC and console segments. The market is dominated by businesses that few people have ever heard of. Videogames oldies who used to have a stake in the market have lost their positions falling out of top grossing charts in 2015 while other traditional publishers failed to enter the market altogether.
PLAYERS TRANSFORM INTO CREATORS AND PRODUCERS
The relationship between gamers and developers/publishers has shifted. The level of player involvement in creation, streaming and sharing of gaming content has increased. Companies put emphasis on creating entertainment value not just for gamers but also together with gamers.
Streaming services are on the rise and have become a force for publishers to use, not ignore. Companies have begun to truly evolve and embrace user-generated content. Streamers freely market your game and tell people your game is great. The question is how to get them to start creating value for your company. Developers put extra effort on creating fun co-op modes and quirky visuals to encourage VOD production. The next step would be that products and video production tools are incorporated into the games themselves.
The other way players can help developers is through user-generated content (UGC). Your audience consumes new content fast and companies often don’t have in-house capacity to fill the need for new features. UGC, when done right, solves this problem and gives players an opportunity to not only engage in a world but actively create features within that world, grab five-minutes of fame and earn money through ad video. It empowers the player, enriches a community, and makes a game come to life with the passion of its fans.
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VR technology is finally reaching a consumer-ready level. 2015 saw a few company’s showcase and release their first-generation VR sets (Samsung Gear VR, Cardboard, etc.). Excitement is expected to grow with Oculus Rift, OSVR and HTC Vive set to ship in 2016. Big publishers and hardware companies stepped up their research into this niche, which attracted even more angel investors and venture capitalists to an area that has already received nearly
$4 billon since 2010. Moreover, the VR business is expected to generate
$5,1 billion in 2016
Experiences and devices are evolving and getting bigger. The general vibe around this technology is only getting bigger. Developers with triple-A portfolios are experimenting with the tech, ironing out some of the technical problems. They are also forming the design conventions to create intuitive controllers, tackle the nausea issue and overcome other health and safety implications.
However, it will be a while before this immersive technology becomes mainstream (if it does) and the way to make money from it is clear. It may as well remain a niche.
WHAT’S THE BOTTOM LINE?
The marketplace is crowded and chances of building a hit game and holding it on the top positions for months with an inexperienced team are close to zero. The game industry is and will be experiencing an unprecedented growth that is valued to $82 billion by 2017 by Forbes magazines. The sector is growing faster and getting more competitive than before. The mobile games sector is right at the forefront of this growth and the transformation of the industry. Yet, all too often games studios fall into the trap of seeing players as a commodity and miss the opportunity to make them participate to the development of the game and therefore create extremely loyal customers. Customer-service becomes a key element for gamer retention and creates brand royalty.
Gaming In the United States
More than 170 million Americans play video games and 42 percent play video games regularly, or at least three hours per week. The average gamer is 35 years old, and 74 percent are age 18 or older. Nearly half (44 percent) of gamers are female and women over the age of 18 represent a significantly greater portion of the game-playing population (33 percent) than boys age 18 or younger (15 percent). A majority of parents (63 percent) say video games are a positive part of their child’s life: 85 percent think that game play is fun for the whole family and 75 percent believe playing games offers a good opportunity to connect with their child. Video games are a strong engine for economic growth. In 2014, the industry sold over 135 million games and generated more than $22 billion in revenue. Fifty two percent of total game sales were generated by purchases of digital content, including online subscriptions, downloadable content, mobile applications, and social networking games. Computer and video game companies directly and indirectly employ more than 146,000 people in 36 states. Beyond engaging entertainment, videos games help drive societal advancements. Researchers at East Carolina University found a 57 percent decrease in depressive symptoms among those who played casual video games and 70 percent of teachers said that video games increased students’ motivation and engagement levels, according to a national survey of teachers who use games in the classroom. Players donated more than 101 billion individual grains of rice through the World Food Program’s online game FreeRice, as of January 2014. While these are just a few examples of how games improve what matters, it is clear that – from education, to health, to business, to the arts – the computer and video game industry helps Americans lead healthier, happier and more productive lives.
Prediction for 2016
“Video games are ingrained in our culture. Driven by some of the most innovative minds in the tech sector, our industry’s unprecedented leaps in software and hardware engages and inspires our diverse global audience. Our artists and creators continue to push the entertainment envelope, ensuring that our industry will maintain its upward trajectory for years to come.”
— Michael D. Gallagher, president and CEO, Entertainment Software Association
The video game business is highly unpredictable. But if you can predict the trends with a reasonable degree of accuracy, your company can gain a big advantage. And most of the time, the process of making predictions can sharpen your thinking.
That’s why Dean Takahashi (lead writers for 25 years at “Venture Beat”) is trying once again to predict what will happen in games in the next year. Some of these predictions might be wildly inaccurate. But he is deeply involved in the subject and in contact with people who lead the path of this industry.
Last year, he predicted that the $2 billion mobile game would arrive and the bubble would not burst in games. He expected that Sony would pull further ahead in consoles and new virtual reality systems would finally debut. He thought that smaller game companies would prosper, particularly in mobile. He also predicted that a major game would suffer bugs and hackers would take down online game services. He also figured that China would continue its expansion and e-sports companies would dominate games. And he thought that gamers and game designers would come to terms with stereotypes, with more appreciation of diversity and more creativity as the result.
His scorecard for 2015
He doesn’t think he was right about one mobile game generating $2 billion in revenue in 2015. Most of the leaders of the game business do not report their revenues. But
King, which had the No. 3-ranked mobile game for most of the year in terms of top-grossing titles, is likely to make about $1 billion in revenues this year from
Candy Crush Saga. Only Machine Zone’s
Game of War: Fire Age and Supercell’s
Clash of Clans are bigger, and Dean doesn’t think they were on a run rate to beat $2 billion. And nothing new came along to knock them out.
The market for game investments slowed down, as did merger activity. But plenty of game companies received funding, and Activision’s $5.9 billion purchase of King showed that gaming was still full of lucrative opportunities. The Chinese game companies slowed their momentum due to stock market turmoil, but they continued their westward expansion.
And he was right that Sony, which has sold more than 30 million PlayStation 4 consoles to date, would widen its lead in consoles. VR arrived on mobile first with the launch of the $99 Samsung Gear VR, but other major systems were postponed to 2016. Batman: Arkham Knight on the PC suffered major bugs and had to be pulled off the market and then re-launched. And hackers claimed credit for bringing down Xbox Live and the PlayStation Network multiple times during the year.
He would like to think that gaming made progress on the diversity front. We now see women as standard available options for characters in major games such as Call of Duty: Black Ops III and Fallout 4. We also saw more games with women in major roles, such as Rise of the Tomb Raider, Halo 5: Guardians, Assassin’s Creed: Syndicate, and others. This makes sense, as 44 percent of gamers in the U.S. are female. He expects the trend toward embracing diversity to continue among game developers and that gamer attitudes will follow. This is all part of the industry maturing.
E-sports also grew bigger and more important during the year.
Riot Games, now fully owned by
Tencent, still dominated e-sports with
League of Legends, but
Blizzard formally launched its
Heroes of the Storm game, and Dota 2 saw a tournament with
$18 million in prizes. Big companies such as
Activision Blizzard and
Electronic Arts started their own e-sports divisions. Some small companies came up with hits, and more appeared in places you wouldn’t expect (like from Siberia). But there were many new predictions in 2015 about an “
indiepocalypse” as discovery and distribution challenges make it tough for small companies to survive.
expectations for the coming year
The trends below were conceived with the help of game industry observers, but the arguments are from Dean Takahashi
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VR will take off but not as fast as hype would suggest
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VR and AR will command much of the new investments in Gaming
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E-sport viewership will be on a path to rival the super bowl
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Sony will widen its lead again in consol
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Game companies will explores the possibilities of augmented reality but won’t cash in on it yet
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Nintendo will show its cards for its turnaround strategy (With super mario and Pokemon)
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Hardcore gaming gains ground on mobile devices
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Consolidation will continue as foreign companies and media conglomerates acquire more game publishers
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Market such as Brazil and India will become more and more interesting especially for mobile gaming
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The traditional gaming media will lose ground to new ways of reaching consumers (YouTube, life stream site like Twitch recently acquired by Amazon for 970 millions
Lexical
AAA, AA, and A game AAA game are games that are developed with a significantly large budget. The game generally reviews well, since the developers put a lot of emphasis in Gameplay, Presentation, Story,
Graphics, and / or Online. Acceptable Audio, Pacing, Set pieces and Thrills must be available as well. That is the foundation of a Triple A game, while this next part is highly subjective among gamers. The games generally are reviewed 8+/10 and averaging a score of 88+/100 on metacritic. The games generally are sold over 1 million copies.
AAA+ (95+) GTA, Uncharted 2, Mass Effect 2, Mario, Zelda, Skyrim
AAA (91 - 94) Halo, Gears, Little Big Planet, Batman, GT, Forza, God of War, Assassin's Creed
AAA- (88 - 90) Dead Space, New Super Mario Bros., COD, Super Smash Bros., Killzone, Battlefield
A Double A game (AA) is a game that fail to reach the milestone previously set by AAA games. They generally have a lower budget than AAA games. They try to achieve the same level of game design as AAA games, but generally fall short in one or more areas such as Gameplay, Story, Graphics, Pacing, and underwhelming Set Pieces. The game goes on to score an average of 75 - 87 / 100 on metacritic and hovers just above those games that fall into dreaded "Yellow Ranking". The highest rated AA games are comparable to the lowest ranking AAA. These games are generally clones of AAA franchises that just don't reach the potential set by it's predecessor, some are practically multiplayer only, and some are just in an over saturated genre. However, some of them are truly great games, just missing that special something. They generally go on to sale 1+ million copies as well.
AA+ (85 - 87) Borderlands, Crysis, Alan Wake, Bayonetta, inFamous, Left 4 Dead, Resistance,
AA (80 - 85) Darksiders, Good Sports games, Clones of AAA games,
AA- (75 - 80) Prototype, 2nd tier Sports games, Old franchises that didn't transition well
The A/B games are those poor games that had a great idea, but the development team just couldn't make everything work seamlessly together. These are the games the land in the dreaded "Yellow Ranking" (74 and less), and while they can be good, they just don't get it. They need cultivating, and a group of leads to whip them into shape, so they can start producing AAA and AA games. Unfortunately these are the guys who are going to go under next generation.
Early access, alphafunding, or paid-alpha is a funding model in the video game industry by which consumers can pay for a game in the early stages of development and obtain access to playable but unfinished versions of the game, while the developer is able to use those funds to continue work on the game. Those that pay to participate typically help to debug game, provide feedback and suggestions, and may have access to special materials upon release of the game. The early access approach is a common way to obtain funding for indie games and may also be used along other funding mechanisms including crowdfunding.
The hot topic for independent developers these days is the so-called “indiepocalypse”. It’s the notion that indies are going to have an increasingly difficult time making a living now that mobile and Steam are both “flooded” with games. Indiepocalypse posts tend to focus on 5 key ideas:
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There is too much competition, especially now that so many games launch on Steam each week.
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Various charts are showing bad things, such as revenue per game declining.
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The App Store is a wasteland. Steam will now become a wasteland.
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A few high profile indie games have had weaker-than-expected launches lately. Surely this means that the apocalypse is upon us?
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Triple-I independent games are going to force indie budgets to rise inexorably, mirroring what happened with AAA.
Steam is an Internet-based digital distribution platform developed by Valve Corporation offering digital rights management (DRM), multiplayer, and social networking. Steam provides the user with installation and automatic updating of games on multiple computers, and community features such as friends lists and groups, cloud saving, and in-game voice and chat functionality. The software provides a freely available application programming interface (API) called Steamworks, which developers can use to integrate many of Steam's functions into their products, including networking, matchmaking, in-game achievements, micro-transactions, and support for user-created content through Steam Workshop.
Though initially developed for use on Microsoft Windows, versions for OS X and Linux operating systems were later released. Applications whose main functions are chatting and shopping have also been released for iOS and Android mobile devices. The Steam website also replicates much of the storefront and social network features of the stand-alone application.
As of September 2015, over 6,400 games are available through Steam, including over 2,300 for OS X and 1,500 for Linux. The service has over 125 million active users.
User-generated content (UGC) is defined as "any
form of content such as blogs, wikis, discussion forums, posts, chats, tweets, podcasting, pins, digital images, video, audio files, advertisements and other forms of media that was created by users of an online system or service, often made available via social media websites".[1] It entered mainstream usage during 2005,[2] having arisen in web publishing and new media content production circles. It is used for a wide range of applications, including problem processing, news, gossip and research and reflects the expansion of media production through new technologies that are accessible and affordable to the general public. Additionally, user-generated content may also employ a combination of open source, free software, and flexible licensing or related agreements to further reduce the barriers to collaboration, skill-building and discovery ("'UGC'") has also gained in popularity over the last decade, as userbases have grown on social media and content-based sharing sites