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The First Decade: The Industry's Turning Points in the 00s

G4Sterling
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Posted December 23, 2009 - By G4Sterling


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The 90s marked some truly revolutionary moments for gaming, not the least of which was the leap to 3D games. As the first decade of the 21st century folds, there’s been no shortage of pivotal moments for the gaming industry. Some of them seem fairly evident. Most of them functioned as a smaller spark that led to a bigger explosion. Would Xbox Live be where it is now had Bungie not incorporated so many features into Halo 2? Was the Wii really the sole turning point for casuals to start playing games, or was Brain Age the kick-off? Put on your tinfoil hats, kids. Here are ten turning points of the 2000s:

PlayStation 22000: PlayStation 2 launches in North America.

Why did this event change the course of the gaming industry? In October 2000, the average DVD player cost $300, as much as a PlayStation 2. The PS2 was a console designed as an entertainment machine. It helped Hollywood transition from VHS to DVD by hitting a movie-buying demographic. Not only were standards set for the Xbox, it ultimately came to decide the next wave of console hardware five years later. Backwards compatibility and movie playback were suddenly important features that every console needed (even if you need to hack the Wii to get it to happen).

Ripples you can see today: You can see so many of the Xbox 360’s success in the PlayStation 2: get to market first and secure (timed) exclusive games, faulty hardware be damned. Sony took a similar gamble with the Blu-ray format (is The Dark Knight to Blu-ray what The Matrix was to DVD?). And multimedia integration, from Internet browsers to Netflix, wouldn’t be conceivable without our game consoles providing us with entertainment outside of videogames.



Sega Dreamcast2001: Sega withdraws from the hardware market following the failure of the Dreamcast.

Why did this event change the course of the gaming industry? Sega’s demise in March of 2001 served as a testament to Sony’s power at the time (the PS2 crushed the Dreamcast in Japan well before it even touched US shores) and served as a warning to Microsoft, which was releasing the Xbox a few months later. Would consumers have tolerated a four-way dance between console manufacturers? It seems rather doubtful. Also, Sega’s lucrative exclusive franchises -- Sonic, 2K Sports -- became ubiquitous, at least, for a few years.

Ripples you can see today: One could argue that pre-Halo 2 Xbox Live resembled the best elements of SegaNet, and that fundamentally, the Xbox modeled itself after many facets of Sega’s machine. After Xbox? Mario & Sonic at the Olympic Games. Sonic vs. Mario in Super Smash Bros. Brawl. A litany of botched attempts to resurrect 16-bit classics for contemporary tastes.

2004: Halo 2, World of Warcraft, and Half-Life 2 all launch in the same month.

Why did this event change the course of the gaming industry? These three games came to define the way we played games for years to come. Bungie’s sequel was a shot in the arm for Xbox Live subscriptions and previewed many of the features that would set the standard for Microsoft’s online service on the next machine. Blizzard took a previously niche genre, added some baking soda and boiled it down to a solid, quickly consumable mass. You see where this is going. Despite a rocky launch, Valve’s sequel brought in millions of new Steam users, which gave it the install base for its real strategy: digital distribution of PC games.

Halo 2, World of Warcraft, and Half-Life 2

Ripples you can see today: A great deal of today’s Xbox Live was established on the shoulders of Halo 2, and Microsoft’s commitment to online gaming has been key to its dominance. As PC games lose physical retail real estate, Steam has become the dominant force in PC game sales. Thanks to the widespread popularity of WoW, MMOs are mainstream fare. Loot and experience points have moved out of role-playing and into other genres. Think about that when you hit Prestige.

EA Sports2004: EA snatches up the rights to the NFL license.

Why did this event change the course of the gaming industry? On the heels of Sega/Take-Two’s price slash on NFL 2K5, EA’s aggressive takeover of Madden didn’t endear them to legions of nerds who hate sports. Aside from the awkward position it put the publisher in from hardcore gamers, it sparked a pissing contest over the arguably most lucrative game genre for publishers. Sega ultimately withdrew from sports sims altogether and sold its Visual Concepts studio to Take-Two. Take-Two quickly responded to EA by shoring up an exclusive deal with Major League Baseball to secure exclusive third-party rights.

Ripples you can see today: Aside from FIFA, Madden could very well be the reason why EA’s been able to withstand a litany of big duds over the past year. Although exclusive deals hurt gamers on the surface, there have been some less-discussed benefits. Sony regained its footing in first-party sports games with MLB: The Show, which is quietly one of the best exclusives on the PS3, and a continuous top-seller on PS2. Can you find a better sim-centric baseball experience on console? Debatable.

Coffee2005: Hackers find a sex mini-game in the PC version of Grand Theft Auto: San Andreas.

Rockstar Games claims that it’s a user-created mod, which holds water until someone uses a cheat device to unlock the minigame on console versions. Hilary Clinton gets involved and suggests regulating the gaming industry. Congress passes a resolution to find out whether Take-Two (Rockstar’s parent company) intentionally deceived the ESRB in submitting San Andreas for rating.

Why did this event change the course of the gaming industry? Moreso than any disbarred Florida attorney’s lawsuits and Game Politics forum trolling, “Hot Coffee” forced the industry, from retailers to marketers, to police themselves with a stringency never seen prior. In order to prevent government interference in regulating mature content, the ESRB has taken a heavily proactive stance, including an agreement with the software industry to restrict M-rated trailers and demos from consumption by minors. The organization ducked another potential debacle less than a year later, as The Elder Scrolls: Oblivion was re-rated from “T” to “M” following news that users had modified the code to allow nudity.

Ripples you can see today: It’s harder for youth under 17 to buy an M-rated game than to get into an R-rated film or buy a CD with explicit content. Instead, it’s easier for them to convince their asleep-at-the-wheel parents to buy them Modern Warfare 2 and ruin the multiplayer experience for the rest of us.

Brain Age2006: Nintendo releases Brain Age, which extends handheld gaming beyond a niche audience.

Why did this event change the course of the gaming industry? Some argue that Nintendogs was the pivotal moment for the Nintendo DS. Although Brain Age didn’t have the lasting power of a virtual Chihuahua, it opened up the market beyond Pokémon-playing tweens and grown men who unironically wear Mario t-shirts. The last time a game reached this level of critical mass on a Nintendo handheld was Tetris, which Nintendo bolstered with an ad campaign showing businessmen playing it.

Ripples you can see today: Brain Age marked the advent of lifestyle games on the DS -- previously a Japan-only niche -- for Western audiences. Now you can buy cookbooks, language software and math tutors for your DS. Wii Fit doesn’t seem so crazy once you consider how much Nintendo has iterated on the idea of everyday life as a metagame for its software.

2006: Activision purchases RedOctane for shy of $100 million.

Why did this event change the course of the gaming industry? Six months after the release of Guitar Hero, Activision snatched up RedOctane and the rights to the Guitar Hero name. Harmonix remained independent until September 2006, when MTV purchases the Boston-based developer. A year later, the music game wars ignited.

Guitar Hero guitar

Ripples you can see today: Amidst a decade of tumult and reluctant transformation for the music industry, video games have proven to be a lucrative source of exposure for artists.  There have been unforeseen consequences  -- witness Warner Music Group’s boycott of music games over royalties or the numerous lawsuits levied at Activision regarding its liberal use of musician likenesses -- but the genre has undoubtedly had a profound impact on the music industry. Guitar Hero has made Activision one of the world’s biggest publishers, while some have argued that Rock Band has been a money pit for EA and MTV Games -- analysts have said that even with The Beatles: Rock Band’s critical success and public awareness of the product, it will likely struggle to break even.

Shigeru Miyamoto2006: E3 marks a massive changing of the guard.

Why did this event change the course of the gaming industry? After years of anticipation for the PlayStation 3, Sony reveals a handful of games, a controller sans rumble, features that were arguably vestigial at the time, and a price point that was hard to swallow during better economic times. It was an exercise in how to collapse from grace.

The following morning, Nintendo showed off Wii, shook off the struggles of the GameCube, and pointed to a bright future filled with new ways to play games.

A few hours later, Cliff Blezsinski took the stage to show off a live demonstration of Gears of War at Microsoft’s press conference. It was followed by the announcement of Grand Theft Auto IV and exclusive downloadable content for Xbox 360, as well as the announcements of Fable II and Halo 3.

Also, the Expo itself was so insanely jam-packed and crowded that the ESA tinkered with the formula twice before restoring it to a slightly slimmer state in 2009.

Ripples you can see today: It has taken years for Sony to recover from two hours of awkwardly-lain presentation (and several firmware updates). Microsoft ripped several pages from Sony’s playbook and executed them to a tee, which has been at the root of the company’s success up to present day. Nintendo set the stage for a fantastic year of gaming that catered to both new gamers (Wii Sports) and its core audience (which has sputtered out following Super Mario Galaxy). E3 went through a crazy diet to trim the fat, but now it’s a sleeker, slimmer spectacle filled with the same media buzz.

Apple iPhone2008: Apple launches the iPhone App Store, which enables software developers to make applications to sell on the wildly successful iPhone.

Why did this event change the course of the gaming industry? After years of venture capitalists espousing the gospel of mobile gaming amidst a veritable Tower of Babel of handsets and carriers, the ubiquitous appeal of the iPhone provided indie game developers with the opportunity to unleash their games on a wider platform.

Ripples you can see today: Smartphones are taking over as the norm, and with platforms narrowing, Apple and Google-branded operating systems are becoming a legitimate platform for handheld gaming, complete with user-friendly digital distribution. Games that flop on traditional portable platforms could find a new wider audience on iPhone or Google phones. Rockstar Games appears to be making the leap (GTA: Chinatown Wars did lackluster numbers on both DS and PSP); will it be the only publisher?

2008: Activision and Vivendi-Universal/Blizzard merge and become the world’s biggest game publisher overnight. Literally.

Why did this event change the course of the gaming industry? It came on the heels of Activision’s revival as a serious and legitimate threat to EA’s dominance as the top third-party publisher in the world, following a year that delivered Guitar Hero III, Call of Duty 4: Modern Warfare, Spider-Man 3, Shrek the Third, and Transformers. Laugh at those last three if you want; they filled Bobby Kotick’s coffers handsomely. Blizzard, at this point, had a mammoth share of the PC market with World of Warcraft.

Ripples you can see today: The combination of uncertain economic times and rapid globalization of the industry has led to more mergers, such as Square-Enix and Eidos, which gives the Japanese publisher even more leeway in Western markets. Also, seven music game variants in one calendar year.

Ripples you will see tomorrow: An abundance of plastic instruments piling up in landfills. What will cultural anthropologists think of us hundreds of years from now?

Bobby Kotick

Honorable Mentions

The Three-Year Cycle (2001, 2004, 2007): A glut of AAA titles every three years, thanks to the arduous process of creating huge blockbusters. Funny enough, there’s been a Halo every one of those years (and a Metal Gear Solid in two of them).

Jason Hall’s Metrics Speech (2004): Before the former WB executive’s speech, no one really talked about tying performance bonuses to game scores. Now, metrics rule the way games are made and developers are paid.

The Economic Downturn (2008): Publishers like EA have been battening down the hatches, Midway is an afterthought, and the effects are still being seen.

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