Analysis: 'VentureBeat's' Dean Takahashi's 12 Trends Of The Video-Game Industry


Posted May 15, 2009 - By r_pad

Analysis: 'VentureBeat's' Dean Takahashi's 12 Trends Of The Video-Game IndustryVentureBeat's "Dancing" Dean Takahashi, one of the few mainstream journalists that actually understands the gaming business, has been traveling the world, speaking at various gaming conferences. While he was surrounded by developers,Takahashi noticed 12 prevalent trends that currently permeate the industry. Here are the 12 trends that Takahashi noted, followed by my commentary.

Dean Says: Game startup financings have slowed from last year
Raymond Says: That's not surprising. Most spending has slowed from last year. The economy sucks. My coffeehouse financings have also slowed from last year, as I'm opting to brew my own dirty water for economic considerations.

Dean Says: The broader game industry continues to expand, command more respect, and draw outsiders
Raymond Says: He's completely right. Before you start yapping that this statement contradicts the initial one, Dean explains why that's not the case. Now getting back to the point, from casual PC games to the Nintendo Wii, more and more people are playing. Corporate outsiders see the money involved and want their piece of the pie. Creative types see a new and untamed outlet that doesn't (yet) have the restraints of the older movie, television, and music businesses. While some reader of TheFeed are getting their panties in a bunch that all these newcomers are invading "their" world, this influx of new money and talent is fantastic for the overall growth of gaming.

Dean Says: Competition is heating up and driving prices toward zero
Raymond Say: The free-to-play market is undoubtedly on the rise. I mean, what beats free, right? For longtime console gamers, this isn't an immediate concern. Free-to-play is primarily hitting the PC and mobile markets. The popularity of this market has led to the single-worst marketing term I've heard this decade: "Freemium". This vile word refers to games that are free to play, but charge gobs of money for premium features and content. Freemium...ugh. I think I just threw up in my mouth a little.

Dean Says: Advertising in games has taken a hit
Raymond Says: Two years ago, the gaming biz was going nuts because of the potential of in-game ads. Even last year, people were going ga-ga when Barack Obama ran campaign ads in Burnout. This was supposed to be "the next big thing" for the business. Everyone from Sony to Google to Microsoft was ramping up in-game ad-sales teams to take advantage of a booming market...that never boomed. Obviously the economy had a ton to do with the collapse, but general ads have been on the decline for much longer. These days, ad-sales teams are getting cut, with Microsoft recently laying off a chunk of its Massive in-game ad-sales team.

Dean Says: Virtual goods are benefiting from the weakness in ads
Raymond Says: I really didn't see this one coming. I guess a lot of people don't see microtransactions as "real" purchases, but those suckers add up to millions of millions of dollars. Whether people are buying in-game weapons or new avatar clothing, this market is booming.

Dean Says: Don’t believe too much of the hype about Chinese game companies taking over
Raymond Says: Well, I never believed it.

Dean Says: Social gaming is spreading beyond the borders of game platforms
Raymond Says: This point is probably lost on TheFeed's crowd -- which has a disturbingly large number of vocal Twitter haters -- so I'll just drop it.

Dean Says: Creative destruction rules the game job environment
Raymond Says: Another excellent point here by Dean. Just the other day I creatively destroyed a baseball bat on Leahy's head. It totally ruled the game job environment.

Dean Says: Apple and Nintendo are at war
Raymond Says: It's funny, during the last console generation, nobody thought Nintendo would have the kind of success it has enjoyed with the Wii. Certainly everyone would have given it the handheld market, but even the DS is performing beyond people's initial expectations. Since the Wii and DS are so far ahead of the competition, it really is competing with devices like the iPhone and iPod Touch.

Dean Says: Gesture-based control systems will spread industry wide
Raymond Says: I agree with this to a point. Microsoft and Sony have been working on the interactive elements of their respective consoles for quite some time, but ultimately I don't think it matters. Everyone is going to try to duplicate the success of the Wii, but nobody is going to come close. The Wii became so popular because it was unique, first, and cheap. The competition isn't going to generate a ton of sales by coming to this dance late on a more expensive console. So while I agree that gesture-based controls will spread, I don't think it will matter much, especially to core gamers.

Dean Says: Backfill strategies may work
Raymond Says: Of course they "may" work. I'm sure some will, but I don't think any will make a significant splash. There will be more failures than successes with companies that use these strategies. Furthermore, I doubt any of you care about backfill strategies and it's possible that some of you don't know what they are, so let's just skip this one.

Dean Says: Digital distribution is gathering steam
Raymond Says: Dancing Dean is right again! With services like Steam, PlayStation Network, and Xbox Live, digital distribution is the way forward. Upstarts like OnLive look to take things to another level. Internet service providers (ISPs) are the key here. Many of them want to control bandwidth, charge for tiered services, and more. A lot of people are predicting the end of the "open" Internet era, which would put up a major roadblock to the digital distribution of high-definition games. While I have no doubt that digital distribution is the future, I question how soon that future is. The technology is there with cable's DOCSIS 3.0 and telephone's fiber-to-the-home, but companies don't seem to be in a rush to deploy these technologies. Instead, they're more interested in trying to charge you more for the services you've been enjoying for years. It's sickening really.

Well, that's the end of my analysis of Dean Takahashi's 12 trends in gaming. If you want more details from Dean, be sure to check out his excellent article. It's more detailed and intelligent, but I'm much more fun.

If you get a chance, let me know what you think of these 12 trends. Agree? Disagree? I want to know!


Analysis: 'VentureBeat's' Dean Takahashi's 12 Trends Of The Video-Game Industry


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