Breaking News: People Are Going To Stop Buying Games

Posted on | October 4, 2009 | 1 Comment

The internet has been alight with stories heralding the imminent death of the newspaper industry. Just this week the London Evening Standard has decided to become a free offering. After 180 years of being sold to Londoner’s on their way home from work, the only way they can see a future for themselves is to give their product away for free.


So why does this interest me, a game developer? Well I think the signs are that we might well be exiting the last generation of customers that are willing to pay, en masse, for their media content, whether that is newspapers, music, films, or videogames. Soon we won’t be able to sell videogames.

To understand why games might stop being sold, we need to look at the decline of the newspaper industry. The problems facing Fleet Street are primarily:
• Free newspapers
• Online news sites
• Disappearing Revenue

Free Newspapers
I’ve commuted for several years. When I first started making the journey from home to work I’d catch the bus to the train station, buy a newspaper (or two) and then spend the rest of the journey catching up on (yesterday’s!) news.

Today, when I make that same journey; I board the bus and immediately pick up a copy of Metro. It’s not an editorially heavy paper, and I’ve usually got the gist of the news and sport by the time I’ve reached the train station (where I am, coincidentally, greeted by multiple people handing out copies of Metro). So before I’ve even got anywhere near a newsagents, I’ve had several opportunities to obtain a free newspaper.

The aforementioned Evening Standard has had competition from two other free evening papers that are being dished out by armies of modern newsagents; they don’t have bricks and mortar premises, or even a shack to pay for; just a bag over their shoulder. They move to where the consumer is -the consumer no longer has to find them, and then pay for the pleasure. This brings me on to…

Ubiquitous News
My train journey of yesteryear was a time to sit and read my newspapers. But today, thanks to my 3G dongle, I’ve got broadband access. There’s a likelihood that I’ve already had a browse of key news sites while eating my breakfast, but that just means I can catch up on an even wider range of news – mostly specialist articles and blogs – that would only ever get marginal coverage in print. I don’t have to read just what a single editor has prescribed – I can choose and tailor the news I read.

So, I now get more news, more specialists news, more convenient news, and best of all, free news. I don’t pay a penny for the specific privilege of reading all of this free news.

Disappearing Revenue
Although the recession has had a huge effect on advertising spend, all indications are that it was going to drop anyway as advertisers reassess the effectiveness of online ads. Newspapers had expected ad revenue on their websites would counter balance any drop in physical sales, but with this pot of gold fast becoming a myth, newspapers finding themselves trying to put the genie back in the bottle, and contemplating asking their readers to travel back in time to an age where news had to be paid for.

(News Corporation has announced that free online news is not a sustainable business. Micropayments have been touted as the industry’s last chance, but as of today, that solution has yet to be fully tested. )

We’ve reached a time where the consumer is starting to become accustomed to receiving their media for free; Spotify feeds us free music, websites feed us free news, YouTube delivers free video, Wikipedia delivers free encyclopaedias. The list is endless. Can we return to asking people to pay for what they have freely enjoyed? Can there be a multilateral adoption of a paid content model when so many companies have managed to flourish under a ‘free’ model? It’s unlikely.

So, let’s summarise the newspaper industry’s problems:
• Free newspapers [= convenient news, free news]
• Online news sites [= convenient news, free news, specialist news, tailored news]
• Disappearing revenue streams [= zero price-point, modern consumer expectations]

In the games world we’re starting to see our own manifestation of these issues.

Free Games
Flash games have been around for years, and they’re becoming more refined and sophisticated. Many can now boast production levels that had previously been seen only in paid-for games. Flash is now just one of numerous platforms that allow games to be played in the browser – usually for free.

To the mainstream games industry these have always been regarded as something of a niche market – possibly because they eschewed the traditional ways of generating revenue – and therefore not been a direct threat . But, whether they have become a viable business model or not is inconsequential…they’re providing a distraction to gamers that might otherwise have been buying and playing mainstream videogames.

http://jayisgames.com/ - links to more free games than you've got time to play!

http://jayisgames.com/ - links to more free games than you've got time to play!

Continuing the comparison to free newspapers; these free-to-play games are utilising another feature that has been instrumental in the rise of papers like Metro – they’re becoming convenient.

No doubt some game developers will try and point to the difference in production values between free games and retail products. On the one hand I’d argue that some free games are as polished as retail offerings, but on the other hand – it doesn’t matter. The modern customer values convenience over quality. For many young people their mobile phone is their one and only music system. Witness also the slow uptake of HD video formats.

Ubiquitous Games
Just as newspapers are being given away in exactly the places that the customers pass through, games are appearing in places that are convenient for players. It’s no longer the case that you have to go and look for something to play – they’re appearing in front of your nose as you browse.

Facebook games are the perfect example of this. My friend list is home to a mix of friends, family and colleagues, and I’ve noticed an increasing amount of my feed being populated with news of my friends’ achievements in games. Funnily enough, most of these are from non-industry people. In other words, those people without an in-depth knowledge of ‘mainstream’ games are now playing more and more frequently. The mixture of free and convenient is enticing more people to play games.

Farmville - free, convenient, and surprise, surprise, incredibly popular

FarmVille - free, convenient, and surprise, surprise, incredibly popular

As much as game developers like to think that they are the life and blood of the industry, we’re still beholden to our markets’ preferences. It’s easy for games industry professionals to sneer at the games that appear on Facebook, but the ramifications are significant – they’re teaching people that games can be played and enjoyed for free, they’re filling the leisure time that ‘mainstream’ games are just one of the contenders for, and because they’re a shared experience (I can see what friends and family are enjoying) they’re almost viral in nature.

Disappearing Revenue
A quick glance at Apple’s App Store reveals another significant trend – even for those games that are not being given away, there is a race to deliver content at lower and lower price points. At launch, games were selling for £10, today a significant number of new releases can be found for 99p or less. Nintendo has recently launched DSiWare – an online only ‘platform’ for games with a sub-£5 price tag. Sony has followed suit; PSP Minis are small, but very cheap games.

We’re teaching gamers that they can be entertained for pennies rather than pounds.

As the newspaper industry has found out, once that battle begins, there’s only going to be one outcome.

This was supposed to be the generation of consoles that cemented the games machine as an integral part of the living room. All of the family was going to claim ownership of the machine, whether for purely gaming purposes, or as part of a more general access to entertainment. Instead, the ‘non-gaming’ members of our families are being drawn in by other gaming diversions; free games, in the (online) places that they already frequent, and with people that they already know. A growing army of gamers that will never encounter another console or buy another game.

I expect many developers and publishers will simply brush off any changes in the marketplace as an effect of the recession, and try to emulate King Kanute’s approach to the changing tide. Meanwhile, I’ll be setting sail for the new frontiers that free games will undoubtedly create.

Category: Random

Comments

One Response to “Breaking News: People Are Going To Stop Buying Games”

  1. Serious Games | Made by Many
    October 14th, 2010 @ 11:04 am

    [...] More interestingly, though, it appears that Serious Games need funding just like every other game, and in the search for new business models they are looking at social games for inspiration, which may or may not be a good idea, not least because people are going to stop buying videogames soon. [...]

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