Consoling the Console: Game Changers

In August of 2010 Wired Magazine proclaimed the web to be dead. This wasn’t to suggest that the Internet was dead but merely the manner by which we engage with the web was dead, or more nicely put, evolved.

No longer was our window into the great cloud of information pursued through the guise of a browser, but rather through our mobile devices and applications. We’d begun to experience the web, link to link, rather than browsing site to site.

This post does not seek to explore the nuances that define our web browsing experience. Rather we’re here to discuss games and the death of the console, as we know it.

Gaming, a term whose connotations once conjured the mental images of a scrawny 13 year old nerdy boy, socially sequestered to his room, surrounded by Star Wars figurines, is now a multi-billion dollar industry, whose participants average-in at 45 years of age.

Gaming has grown from an 8-bit experience on low-powered consoles to graphically rich computer experiences, only to return to low quality (near 8-bit) experiences, by way of casual gaming online.

Gaming, as it were called, has found refuge in not just our home entertainment systems and computers, but our advertisements, websites and social networks. Gaming and “game mechanics” have permeated and serve as a driving force in our (ad agencies + media dev companies) most successful efforts, whether they be advertisements, location based check-ins (Super Swam Badge you’re mine) or simple mobile applications.

Gaming has shed the stereotypes of its past and now welcomes women of all ages and people of all socioeconomic backgrounds. The advent of new devices such as iPads, iPhones and Androids have opened gaming to new generations, while reacquainting individuals pulled away by the forces of life.

To say the gaming industry has grown substantially in the past 30 years would be a bit of an understatement. It’s expected that the gaming industry will pull in revenues somewhere around $35 – $45 billion in the next few years. That’s more than twice the size of the music business at the height of CD sales.

When we consider that causal/social games are expected to account for nearly $11 billion of this growth by 2014, it’s important to take pause and consider what affect this has on the current gaming establishment.

The numbers paint a bleak story for traditional console gaming. Big publishing houses are spending movie size budgets ($50, $100 and even $150 million dollars) only to find the margins shrink and sales decline on these blockbuster games. Juxtapose that with a game like Angry Birds, where development costs were $140,000 and revenues have surpassed $70,000,000.

Nintendo, for the first time in 7 years posted a first half-year loss. Last year in the US, video game software, hardware and accessory sales were down 8%. Meanwhile, social gaming champions Zynga earned a valuation around $5.5 billion (just under Electronic Arts).

So what’s going on here? Well, it’s the medium and the message.

As technology improves the console gaming experience is being replicated on our mobile devices. Look no further than games like Dead Space and Infinity Blade; 38% of mobile gamers are established console gamers.

Yet, as the medium shifts, so has the message. Games like Farmville, CityVille and ZyngaPoker collectively have approached 300 million active monthly users.  Gaming is no longer isolated to the guys. Women account for nearly 60% of causal and social gaming, all of which are finding homes on our computers and mobile devices.

To suggest the gaming industry isn’t aware of this shift would be an extremely naïve position. EA has spent nearly $400 million acquiring independent game publishers who are masters in this field.

However, what this signifies for brands, companies and anyone with a message, is that becoming a contributing member of the game development community is not something completely out of reach. Social, mobile and casual games are inexpensive yet effective means of distributing branded content and messaging.

Equally, individuals with a great idea and the will to execute will find soft and fertile ground to grow. When industries go through cataclysmic shifts such as this, the barrier to entry drops and the market becomes rife with opportunity. The question for brand managers and agencies is: Are you taking advantage of this growing opportunity and, perhaps more importantly, exposing it to your clients?