Greg Richardson is the founder and CEO of Rumble Entertainment.

There are three distinct groups of game companies in the marketplace: the Old Guard, the Online Opportunists, and the New Innovators. The Old Guard and the Online Opportunists are currently the massive dinosaurs to the New Innovator’s scrappy mammal. But looking at trends on player consumption and the growth of emerging business models, those lumbering reptiles are quickly on their way to extinction.

The Old Guard of AAA retail game makers – the “packaged goods” guys – are the aging kings of the business. These firms are experts at and heavily invested in defending their retail territory through entrenched relationships with retailers; monolithic development factories at scale; and event-driven, big-bang marketing departments. Their business model was once vibrant and seemingly evergreen, but changes across devices, distribution, player behavior, and disruptive new business models have shaken their foundation.

Rather than recognize the signs that that world is changing around them, the Old Guard grasp at the latest generation of dedicated game consoles. They focus their attention on a small handful of mega franchises which they hope will delay the inevitable. However, we’re already seeing billions of people shifting their time and money towards games delivered for free on tablets, mobile phones, and PC browsers, which makes this strategy ever riskier.

Rather than recognize the signs that that world is changing around them, the Old Guard grasp at the latest generation of dedicated game consoles.

The reliance upon the retail business model requires the consumer’s upfront faith, and the only way the Old Guard has found to scale up the engagement of passionate fans is through forced scarcity: pre-orders, special releases, DLC season passes, collector’s editions, etc. Since there’s usually no ongoing dialogue with the customer as games are produced in this fashion, corporate investment is poured into market research, leaving the Old Guard stuck with best guesses and survey averages, rather than knowing exactly who their customers really are, how they are really playing the games, and the exact reasons and timing they choose to stop. Isolated development combined with three year or longer development cycles and budgets often eclipsing $100M all lead to reduced risk-taking and the virtual elimination of new intellectual properties.

Anchored to the living room and a specific hardware platform, lacking the powerful viral and social marketing opportunities that come from a community-minded and open approach, these fan bases are becoming harder and harder to expand. The motto continues to be: Fire, forget, review the sales figures, guess at what worked and what didn’t, then do it all over again. This dated approach is being applied to fewer and fewer games as they industry shifts and publishers no longer move forward with anything less than mega-franchises.

It’s no secret that the Old Guard is already crumbling: The outright disappearance of former industry stalwarts like THQ and Atari. The “What ever happened to?” questions around former leaders in the space like Sega, Namco, Capcom, and Konami. Shrinking or flatlined market caps at Activision, EA, UbiSoft and Take-Two. The cracks are clear for all to see.

Fire, forget, review the sales figures

Then came the Online Opportunists: this cohort is aware of the power of connected game services and social communities. These companies are tapped into much of what the Old Guard has missed in our current entertainment landscape. The Online Opportunists are broadening the market, supporting new devices and emerging game ecosystems, and they recognize the value of constant player feedback and fast development iteration.

They also too often view game players as data points rather than human beings. Their intentions revolve more around economics than entertainment. The driving “profits over passion” mentality is their Achilles heel. This group may be new to the scene, but it already faces extinction: From the well-chronicled challenges at Zynga to the struggles of 6Waves, LOLApps, CrowdStar, TinyCo, and many others.

Some of these Online Opportunists are slowly waking up to a new reality: that players desire something other than a shallow clone of yet another shallow clone. They are contemplating how they must evolve to match changing player desires. They are realizing that players want richer and more thoughtful games. But most of these Online Opportunists are ill positioned to respond. Their main hurdle is that they tend to understand the business model of free-to-play but do not necessarily understand the creative approach to designing rich, highly engaging core game mechanics. In fact, Online Opportunists often sacrifice gameplay over highly monetized loops, a short-term mentality that is hostile toward its own customers.

They tend to understand the business model of free-to-play but do not necessarily understand the creative approach.

But the Online Opportunists realize what’s coming as we see players looking for better quality in their games. In fact, platforms like Apple and Facebook are now using player feedback as a fundamental part of their game discovery systems, which is helping to force the issue of quality versus short-sighted focus on near-term monetization wins. Players want immersive 3D experiences with polished production values along with and the ability to play in real time with their friends. From core game design to the necessary immersive technology set, the Online Opportunists are poorly positioned from both a cultural and skill perspective to meet quality demands.

That brings us to the emerging champions, the New Innovators. This group is defined by their focus and intent. For New Innovators, the drive to make games is not fueled by repeating the playbook of decades past, nor is it about racing minimum investment for maximum return before the music stops. Instead, New Innovators embrace a long-term view of the relationship they have with their players in order to really understand what it is they want, starting with great games that can occupy the same places in their hearts and minds as their favorite television show, novel, or film. These games are lovingly crafted to be immersive and intrinsically compelling, with gorgeous artwork, thoughtful game design, and — most importantly — a ton of irresistible fun.

The current generation of gamers wants to play these great games across all of their devices, bringing the fun with them just as they do with books, music, and videos. They don’t want to fight a steep learning curve around UI and UX, and they don’t want to spend hours downloading or installing a game. They want them to be free to play and for whatever investment they make in game to be met with a corresponding increase in the fun they receive. They want to be treated with the same type of thoughtful service that evokes their favorite restaurant or hotel. In short, they want it all. The New Innovators are captivated with the idea that all this is possible, and are inspired to deliver it to the largest potential game audience in the history of the business, crossing geographic, demographic and economic barriers.

They want to be treated with the same type of thoughtful service that evokes their favorite restaurant or hotel.

This obsession with their players will turn this group of New Innovators into the leaders of tomorrow. To deliver what players want, this group has to be invested in real innovation, not simply chasing trends or offering incremental change. It will require patience, active listening to players, a focus on entertainment over aggressive monetization, and – most of all – a passion to make great games. It is this group that is poised to become the beloved, trusted game makers of the future – as well as its financial leaders.

We’re already seeing the first of this group emerge as leaders. The proof is the new guard: Riot, Supercell, and Nexon represent companies that tirelessly prioritize gameplay quality, happy players, and strong communities. As a result, they have all been incredibly successful.

Unsurprisingly, this is the group that Rumble Entertainment aspires to, as should all new video game creators. My goal for Rumble is to take the one thing the Old Guard does well – create great games – while embracing the opportunity to deliver them free to play to billions of fans on their browsers and favorite mobile devices.

The New Innovators will survive and thrive in the modern game industry because they are dedicated in quality, understand the new online paradigm, and are unafraid to experiment: To iterate, listen, build technology for new platforms, push cross platform play to grow its audience, and serve their community. It’s a highly human approach to digital entertainment, and one that will continue to reward both the creatives who embrace it as well as the players who will inevitably flock to the games that result.

Greg Richardson is the founder and CEO of Rumble Entertainment.

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