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Sales of packaged games may be in decline, but it’s just a format thing – new software means the action is now all online, reports Tom Banks

Last week shares in games developer EA slumped as it revealed a drop in packaged game sales, which have fallen by up to 15 per cent in some European countries.

It appears that today’s generation of consoles may soon be the preserve of museums and scrapheaps, as they are scuppered to make way for browser-based games, bringing more opportunities for games developers and creatives in the process.

A broadening demographic of users, a more direct supply channel – bypassing games publishers – and better global Internet access form the backdrop to this change as the uptake of free online gaming gathers pace.

EA has already taken steps to infiltrate browser- and social network-based gaming with its acquisition of Playfish for £168m last November. Playfish is second only to Zynga as the biggest provider of social network gaming.

At the time of takeover, EA Interactive senior vice-president and general manager Barry Cottle said, ‘Social gaming, with its emphasis on friends and community, is seeing tremendous growth, and this is the right time to invest to strengthen our participation in this space.’

Further evidence, amassed by investment bank GP Bullhound [see box] and backed up by gaming experts, suggests that this is a pivotal point in the growth of the gaming industry.

David Nisshagen, game developer at Stardoll, which specialises in browser-based games, says developers will have more creative freedom to see ideas through quickly and bring them to market.

‘With the old-style games you can work for three years with 100 people and by the third year, someone else has already done it – the reality outruns the creativity,’ says Nisshagen, adding that browser-based games can be made and trialled cheaply, ‘with no great loss if it turns out to be a bad idea’.

Smaller, cottage-industry outfits now stand a good chance of making popular games, although finding distribution channels is an issue, according to Nisshagen.

He adds, ‘There have been successful games like Braid and Flow where just one guy has found the magic. At Stardoll we’ve got a base of 50 million customers, and, through social networking and virals, people fall in love with the games.’

For Nisshagen the main design consideration is always ‘fun’ as well as ‘instant recognition, instant gratification, simple menus and a catchy name’. He cites Facebook phenomenon Farm Ville, designed by Zynga, as matching these criteria.

The quality of browser-based games is rapidly developing, partly due to the introduction of new software like Unity. Online free-to-play specialist Big Point, which boasts around 100 million subscribers, will release a Unity-built game this year, called Poisonville.

Simon Guild, chairman of Big Point, believes a step up in design capability won’t over-complicate a product that is traded on its simplicity.

‘Creatively, we’re going through an enormous amount of change. Developers are making impressive online games with new tools but with the same usability,’ says Guild.

He adds, ‘From all sorts of creative areas there are different opportunities attracting creative people. From a design point of view it’s a new space – we’re exploring it and it’s a gold rush.’

Guild aims to put out up to 200 games in the next year, in 30 languages across 1000 online distribution channels, focusing largely on the US and EU. A growing Asian market remains untapped by many Western developers.

Games based on licensed intellectual property are seen by Guild as another big growth area, and he will look to make inroads into this sector which has previously been dominated by packaged games, often in link-ups between publishers and film studios to ensure simultaneous releases.

‘We’re working with IP owners of TV and film [products] as they’re already recognised by consumers – it’s a new space, but an existing market,’ says Guild.

Consultancies, meanwhile, will continue to exploit the potential of browser-based games and incorporate them into their offers. Digital group Skive has made browser-based games its speciality.

Skive recently completed Start Thinking Soldier, a project for the British Army, which built on ad agency Publicis’ television campaign by combining filmed footage with ‘interactive missions’ to engage 16- to 24- year-olds considering an army career. The group was appointed by the agency’s digital arm, Publicis Modem.

Shaun Singleton, managing director of Skive, says, ‘If you deliver a message interactively there’s much more powerful awareness and recall. The average dwell time for Start Thinking Soldier is ten minutes. It’s a much more immersive form of marketing than a television campaign.’

A games market of two halves

  • The global gaming market is predicted to grow from a $58.4bn (£36bn) industry this year, to a $73.5bn (£45bn) industry in 2013
  • Sales of offline gaming fell from $1120m (£690m) to $863m (£531m) between May 2008 and May 2009
  • As gamers move from console to online, the demographic is changing – in 2009, 28% of console gamers were female, compared to 43% of online gamers

Source: NPD Group, ESA and Price Waterhouse Coopers, and collated by GP Bullhound

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  • Gareth Simpson November 30, -0001 at 12:00 am

    All good stuff for the future of gaming, but it all depends on the broadband infrastucture being put into place. Many people still have access to only 1mb download speeds which is totally unsuitable for online gaming of any worth. Get on with Optic Fibres please all telecom companies!

  • David Feeney November 30, -0001 at 12:00 am

    As a gamer myself and having worked in retail for the past 7 years I find it hard to believe this transition. Browser based gaming is predominately for people who don’t own a console or take gaming seriously. The figures paint an overall picture but do not mean anything as as £40 a pop in a recession many gamers just simply cannot afford to buy as many games as the year previously. This is not a support argument for browser based gaming taking over. Also the reason the gaming market will grow is due to natal being released on Xbox 360 winter 2010 and a new Xbox 1080 due in 2012. To put the rise down to online gaming is a false pretence. The rise will be due to the groundbreaking technology that consoles provide for offline gaming not simple flash based games design

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