DEBRIEF: GAMING OF THE FUTURE? NEXT GEN CONSOLES, MOSHI MONSTERS, AND PREMIUM TO FREEMIUM

PLMR

As someone who is partial to gaming, I was quite chuffed to pay a visit to the infamous Google Campus this week to attend the Evolution of Gaming.

The evening was sponsored by Interxion, a leading provider of colocation data centre services in Europe,  and organised by ‘3 Beards’ an events company that focuses on running events tailored to London’s start-up community.

Interxion’s Director of Marketing and Business Development, Digital Media Segment, Jonathan Wood introduced the event and described the role Interxion plays in helping tech start-ups grow.  He gave an overview of the changes Interxion is seeing in the gaming sector, particularly the ongoing increase in demand for dedicated servers to support online gaming and the significant growth in live streaming of online gaming content worldwide – the growth in e-sports. Interestingly, the global viewer figures for online competitive gaming are enormous, though it remains relatively little-known.

Five speakers gave their thoughts on how the industry has evolved and continues to evolve, and their thoughts on where the growth opportunities are in the future.  Fitting well with the nature of the crowd and the themes, the keynote speaker – Peter Molyneux – had to drop out in order to go to San Francisco for a funding meeting for his new project ‘Godus’, and another speaker – Jude Ower, founder of PlayMob (a platform linking games developers with charities) sent a video message as she too was off to San Fran.

Those who could be present included Michael Acton Smith – Founder of Mind Candy and creator of the Moshi Monsters craze as well of the Head of Games Design, David Bishop. Other speakers included Craig Fletcher the MD of Mulitply, Alice Taylor founder of MakieLab and David Green of Bafta Games.

The speakers discussed the drift from Premium content to Freemium – free rather than paid games. Freemium will continue to grow and can be immensely profitable. For example, the Freemium version of PopCap’s Bejewelled regularly brings in 10x more revenue than the Premium version of the same game. This does not mean Premium will disappear – people will always want to pay upfront for the highest quality content, but we are seeing a shift to only the best AAA titles and/or well-known franchises being profitable.

Developers and start-ups who want to make the greatest impact must tackle an incredibly big market, with enormous competition. Across all platforms around 2,000 new apps are launched every day. A critical success won’t necessarily be a real success – games that are too complicated or require too great a time investment by the audience will normally fail no matter how ‘cool’ or ‘clever’ they are. A real bonus to developers can be found in product licensing – the large majority of Moshi Monsters revenue comes from all the spin-off materials – toys, t-shirts, comics, colouring books etc.

Moving into the not too distant future, the media/formats that will be successful will be those which continue to merge media, changing the way people interact with games and changing the industry. People should not write off consoles. Microsoft and Sony would not be investing hundreds of millions in the next gen consoles, expected in the fourth quarter of 2013, if they were a dying format. Tablets are still under-utilised for gaming and we should expect a significant growth in this market, while merging media will continue to change the way people interact with games and therefore change the industry – Sony Wonderbook, Microsoft Surface etc.

After the event we all went to the basement area for a nostalgia-fest of old-skool gaming, where I relived my youth by coming last on Super Mario Kart four-player split-screen (curse you Yoshi). Yes, I admit it was a gaming geek-fest and yes, I felt strangely at home. . .

By David Madden, Senior Consultant at PLMR

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