New Rule

From a recent post on Greg Costikyan’s blog referencing a pair of posts on Sean Ryan’s blog regarding his experience and presentation from Casual Connect AMS 2008: the casual game development scene is starting to re-enter the atmosphere. As Greg puts it, “it’s not a landrush any more.” Casual game makers have made bank thus far by capitalizing on the fantastically cheap costs of development and the plethora of distribution portals catering to a pre-existing audience of millions of players. But as I assert in a comment on Greg’s blog, it reminds me of the circumstances leading up to the Video Game Crash of 1983, instigated by Atari’s success with the 2800 leading to a glut of low-quality games and clone consoles that flooded the market and engendered so much consumer disenfranchisement that the games industry virtually died until Nintendo invented the NES.

Now, with casual games, I’m seeing similar symptoms: an oversaturation of highly derivative, cheaply available microgames bloating the supply side of the curve and forcing developers into an increasingly dire negative feedback loop in which portal managers and publishers comfortably squeeze the lifeblood out of them, demanding ever-better graphics and production value while charging less for each unit. Sean describes the “pain” facing casual developers in the first part of his article, citing several factors including slow growth of the downloadable distribution model. As he says:

. . . after speaking with almost every developer and distributors, it’s clear that downloadable “try before you buy” revenue growth is slowing significantly as conversion rates of download-to-pay drop, and as the increasing supply of somewhat undifferentiated games lets most users enjoy a ton of gameplay if they spend just one hour on each game.

In short, casual games appear to be cresting their peak and beginning the low, slow fall back into an equilibrium market model, much like the console market did after ‘83 and the PC market has been doing for decades. What’s especially interesting to me, however, is the way in which casual games will change as a playground for the AAA or “big title” game industry. I have heard it said that developers who believe the AAA Xbox-PS-Wii crowd is the industry are hopelessly naive, and that in the scope of the real games industry, their market is a small minority. They mean the casual / mobile / indie / advergame / non-digital game makers, of course. But for many new developers, or new development companies formed from experienced developers striking out on their own, casual and mobile games have presented an attractive option to diversify their development portfolio and supplement their income during the lean times between AAA ship dates. Trying to learn from the casual market is where we got episodic content, for example, exemplified by titles like Half-Life 2: Episodes One and Two and Sam and Max.

But if casual markets burn up in the atmosphere and reemerge in a more sane, balanced manifestation, this presents some interesting implications for these companies. On the one hand, if casual games grow to become dominated by higher production values and bigger, more advanced development teams, then these companies may be ideally suited to establish themselves as the new magnates of the casual market. On the other hand, if the casual market begins to narrow—cost-of-entry rises and return on investment falls—it may become harder for small game companies to divert time and resources from their AAA efforts. I suspect that, if this happens, companies may be forced to pick sides.

Sean describes some new opportunities for casual developers, and they all strike me as the kind of advice you’d give to a core developer looking to form a new startup: spend more time marketing (i.e. make good Flash versions of your game to get the word out, make your own site) and get some economy of scale going (find distribution partners that’ll get your games out far and wide). I think it’ll be quite interesting to watch the casual market as it returns to Earth; I am curious to see if it looks like a traditional game market by the time it lands.

Tags: Game Criticism, The Industry //