Date posted: May 18, 2006
Updated: Oct 24, 2006
By Simon Egenfeldt-Nielsen
(Psychologist, Ph.d. scholar)
The entertainment business as such has the opportunity to acquire new revenue through cooperation with the game industry. And the game industry itself is impatient to expand its business area. Especially the new possibilities to expand across different platforms and using each media type differently for creating one unified experience are kicking in. For this to happen, however the entertainment business in general must learn to see the new possibilities for combining their traditional trade with games.
The game industry is venturing into new territory. To a much higher degree than earlier, this means that new contacts and business relations should be made outside the game industry. Other businesses could gain a tremendous advantage if they could grow new business ideas together with the game industry.
We have already seen different examples of what is to come. The gaming industry has tried going to the movies with Lara Croft of Tomb Raider fame. Also the areas around interactive television and broadband have some obvious possibilities for combining computer games with the experiences broadcasters have with large audiences, telling a compelling story and handling large, extensive set-ups. Lately, we have seen Microsoft enter the console market with the X-box, which was unthinkable just a few years ago. Vivendi Universal’s strategy shows the tendency to integrate computer games with other media services. We see Telecom firms and old traditional publishing companies going into games - for example the game Hitman by IO Interactive is 50% owned by Egmont, an international publisher of Donald Duck comics. In Scandinavian, Boomtown.net, which is a gaming community with both offline and online extensions, is owned by the old national phone company TDC (Denmark). Both Sony and Microsoft have partnered up with NTT DoCoMo to enable their consoles for online gaming in Japan.
One of the challenges with the largest potential is the development of a structure for online gaming that can follow through on the move from subculture to mainstream, which have accelerated these last years.
With titles like World War II Online, Dark Age of Camelot and Majestic, we see different but all highly ambitious endeavours to integrate the different interaction possibilities that exist outside the game. World War II Online has web sites dedicated to each alliance in the game, where strategy, weapons, history etc. are discussed. This is an important and integrated part of the game, as the future strategy moves are being planned here, later to be executed within the game. Although this is not yet perfected, it indicates a move towards not seeing games as separate universes. All the other stuff around the game becomes more important. Furthermore this give the players far more influence on the unfolding of the story and the further development of the game.
Several companies are trying to establish concepts where television shows and games are one entity - they supplement each other each, being strong at different levels. Today there are no examples of long-term concepts going beyond the computer’s own universe and frame. Still the action is taking place in the game and not becoming part of the players everyday through SMS, television, online communities etc. But no doubt will we see games expand into other spheres of life to an even larger degree in the future.
We see the tendencies in online role-playing games like Ultima, Everquest, Anarchy online and Dark Age of Camelot, where players build up persons, that are highly valued parts of the player’s life. However these universes are quite limited in the means they deploy to encapsulate the player in the game. They fail to use the strengths of different media types. Recently, Electronic Arts have tried to push the boundary by launching Majestic in Canada and United States. However, it is not easy and after April 30, 2002, Majestic will no longer be available. As Electronic Arts state:
“While the game was a huge critical success, it was not as popular with players… The Majestic Team is extremely proud to have contributed to one of the most creative, innovative and critically acclaimed games in history.”
In Majestic the boundaries between game and everyday life are blurred, as you can receive phone calls, faxes, mails etc. all as part of your everyday life. However, the game is limited to a certain amount of turns that you activate so you can take breaks from the game. This, for one thing, was not popular with the players. They want to be able to play when they want and not be subject to an arbitrary timetable.
Game companies are beginning to realize that the integration of games and other media can give new possibilities. Today, the focus is on spin-offs of movies or to gain a synergy effect by using several media types like Pokemon did with big success.
Games that go between platforms (pc, television, mobile phones, radio, console, handheld, etc.) are still not marketed seriously - for that to happen, the hype around the computer media and internet will have to settle down a little more. Even though Pokemon does use several media, there is no integration and connection between the different products. One of the largest sales successes last year in the games market was Who wants to be a millionaire, but it wasn’t integrated into the TV-show. The idea to take a known TV-show and put the audience in the pilot seat is brilliant. But why has no one taken it a step further by making a concept, where the game is part of the show and the other way around? One very simple idea could be to pick the users through the computer game or have the winner of a parallel computer game Who wants to be a millionaire phone in and compete with the contestants in the studio. However, to use the different media platforms you need knowledge of each of the platforms’ strengths and weaknesses. The best way would be to build a new concept from scratch and make sure that each media platform is used in the right spot. This is done by integrating tournament, news groups, SMS, communities etc.
One of the first places where the strength of such concepts is evident is in the reality tv programs. In Big Brother, interaction trough other media than the television plays a significant role for example web-cams, mails and community. There is no doubt that such initiatives will become even more prevalent in the next couple of years.
It is not by sheer chance that game companies are expanding into other business areas. The competition in the game market is fierce and consolidation is widespread. The biggest firms become bigger yet. Although the turnover increased from 1995 to 1999 from 3,2 billion to 6,1 billion in the United States alone, the business is pressed on revenue streams. And although online gaming is still booming, the revenue streams here are not so easy, simple, and fantastic as first thought. The expenses in respect to maintenance, technical problems, and continuous product development are piling up. So are the ever-rising expectations of the consumer.
In 2000 the turnover decreased to 6,0 billions breaking the rising curve in thread with earlier development cycles in the game industries. However, with the new consoles, history shows us that the turnover will increase again. Prognoses from Datamonitor and DFC Intelligence indicate that within the next years, we will see extreme growth and new concepts being launched as parts of the marketing of the new consoles.
The competition will not ease up and soon we will need some changes. The last year’s agenda have not been influenced by big revolutions within game genres or concept but rather by ’same old - same old’. There is a need for new ideas and revenues. As broadcasting and computer games in the future will use each other, revenue streams will change. Today, the primary revenue streams are the income from selling the game in-a-box but with the expansion of business areas we will see a rise in the importance of commercials and monthly subscriptions to game communities. This will make the game industry less prone to piracy but also mean that the titles will become bigger and take control of the market. Instead long-lasting concepts like the television show Wheel of Fortune that is now running on its 27th year, will take over. It is creating concept across media that creates long-term relations with users.
This article has been published in a slightly different Danish version at the web site www.kommunikationsforum.dk
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