Friday, December 30, 2005

Video Games Go Boom

Video games are about to go boom. It's inevitable, it's happened before, and it might get ugly. Some gamers know it and are already taking cover in their basement with stacks of old SNES games. Some industry employees see it coming and are taking their holiday pay as we speak. Everyone else just goes about their business, unaware that their lives are about to be invaded.

The first video games boom happened shortly after a big crash. Everyone knows about the horrible years in the early 80's that almost killed the industry. But Nintendo came along with the Nintendo Entertainment System and won over everyone, including non-gamers. A little video game mouth-to-mouth and boom, here come the games.
But now what? There are more games, more systems, more options -- but less gamers. Lots of companies hopped onto the video game bandwagon and immediately began pushing games out the door. Their target audience: the small group of loyal customers called gamers.

And for a time, all was good. Gamers had games, developers had money, and all marketers had to do was worship one demographic. If the gaming customers dwindle, so will the games. An audience of casual gamers is waiting to be enticed by an industry obsessed with increasingly complex devices. Here's a one word solution to everything: simplicity.

Video Games Go Boom
Video Games Go Boom is a series of articles examining the phenomenon of video games and where they fit in our society. We will look at video games from many perspectives, especially that of avid gamers and non-gamers. We will also take a look at the video games industry and the big players in that field: Microsoft, Nintendo and Sony.

This is an opinion article that will give one writer's insights into a growing world business. Patterns in the development of any field of knowledge emerge over time. Video games are a relatively undeveloped industry, allowing us to reference growth patterns from other fields to see where the games industry is going. Patterns are, after all, patterns.

You will learn a lot about the games you play, the people who don't play games, and why oatmeal chocolate chip cookies are so good.

Ok, maybe not that last one. But anyway, sit back, grab a drink and get ready for the impending boom.

Everybody likes games, right? As children we played hopscotch, football, basketball, Tic-Tac-Toe, checkers, Go Fish, etc. As we grow older our more developed brains crave sophisticated entertainment. Enter video games, the world's first scalable form of gaming that can meet the needs of both adults and children.

But wait a second. If video games can be for everyone, why does only a small percentage of the world seem interested? It's a one word answer: simplicity.

What Defines a Video Game
To know what a video game is means you must first know what a game is. Games involve several concepts, the most basic of which are rules, choices (which contains strategy, chance and randomness), and rewards. One of the simplest games around, Tic-Tac-Toe, uses all of these concepts:

Rules: One player is "X", the other "O". They take turns placing one of their shapes within the grid. The first one to have a row/column of three wins.
Choices: You can place your shape anywhere on the board.
Rewards: Drawing a line through your row of characters.
The same holds true for video games. Take Tetris for example:

Rules: Slide and rotate the game pieces to create horizontal rows.
Choices: Where on earth are you going to put that piece?
Rewards: Completing lines; points; advancing to more difficult levels.
It's an over-simplified way of looking at it, but it serves for the scope of this article.

Now take those ideas and fit them into a game like Halo or Final Fantasy 7. It's more difficult, as the principles aren't as clear-cut in these blockbusters. The rules, rewards and choices are constantly shifting. As you're carried through the story, your brain must keep track of more information in order to feel satisfied. As we will see below, most people don't want to bother with all that work. In fact, most people's brains aren't trained for these games.

Video Games and Our Brains
Playing games, taking chances and gaining rewards are all a part of the structure of the human brain. The risk-reward loop releases chemicals that we will simply refer to as "the good stuff". Playing a game -- any game, not just video games -- initiates this cycle and causes your brain to let loose these chemicals of goodness.

So why aren't video games mainstream if playing games is a normal activity? A simple answer to a simple question: complexity. Video games are a hybrid form of gaming/entertainment/media that's still very new to human development. We've been pushing rocks around with sticks since day one. But put a controller in our hands and something different occurs. Something is between the gamer and the game, adding one level of complexity to the cycle of getting the good stuff.

Today's breed of games are chock-full of visuals, complex storylines, strange control mechanisms and other barriers of entry to non-gamers. Anyone can pick up a stick and play baseball, but how many people can pick up a controller and play a baseball video game? For seasoned gamers whose brains are well-trained in the ways of video games, complicated methods are often necessary to stimulate yummy chemicals. For others who rarely play games, all that's necessary is a game of Tic-Tac-Toe. Why go to the trouble of learning how to play a strange, abstract game when you can just play checkers?

For every product on the market, dozens of people put their time into its design. Video games are incredibly complex products. Teams of graphics designers, gameplay designers, writers, programmers, level layout designers, producers and project managers, bug testers, localization teams, etc. work together to create that little shiny disk you pop into your gaming system. In all, thousands of people may be indirectly involved in the game you play. This means that video games are a big business. And it's growing fast. But can it keep growing forever?

Video Games Industry Swells
The video game industry is relatively young, barely over 20 years old. Most people have socks older than that. Just like a baby it grows faster than anyone can keep up with. And also like infants, video game developers (and consumers) love whatever is shiny and new. The "latest and greatest" in everything, now with more power and adrenaline to boot. The days of simple entertainment seem to be gone, swallowed by pixels, polygons and processing power.

As technology progresses, video games will continue to get more realistic and intricate. But is there an end to the advancements? There's no such thing as "more realistic than real life". At some point the bigger and better mentality has to cease. When that time will come is anyone's guess, but it will happen sooner or later. As the games we play become more complex, more people will be required to create them. People will flock to the video games market to fill these new jobs.

But here's the big question: Will the consumers, those people that fuel the industry with money, expand along with it?

If more consumers become gamers, the problem is solved. More money will be fed into the machine that will in turn churn out more games. However, if the percentages remain the same, game hardware and software prices can do only one thing: rise. Somehow more money must be brought into the industry to keep it running.

The video game industry caters to its clients: gamers. If it catered to non-gamers, well, that would be just plain stupid. Making products designed for avid gamers but marketing them to people who think a PlayStation is a sex toy is just asking for failure.

There is a way to reel in the non-gaming crowd. It involves that fun little word we've seen in the previous articles: simplicity. And it has a very real basis in the way we work as human beings.

Simple games do not have to be Pong, Frogger or Pac-Man. Simple does not mean simplistic. With a world so inundated with media, choices are all around us at every moment. Studies have proven that web users who see a host of menu options on a website will close their browser. But if you give them just a few choices, they'll stick around for more.

Our brain works in essentially the same way it always has. It must have a foundation on which to operate, and it grabs onto a few simple choices much more quickly than a dozen vague ones. After taking hold, it moves from there, always seeking something more interesting. Give the public simple games and simple gaming machines they can easily grasp. If they want complexity, give them that option. This caters to the largest possible crowd without alienating potential customers.

Future of Video Gamers
The rift between gamer and non-gamer will widen, but in the center will emerge "in-betweens", people who aren't quite gamers but who play video games. Casual gamers of today are the precursors to this, and they will become far more powerful in the eyes of the industry. These in-betweens take only what they like, aren't as susceptible to sequels and big-budget titles, and like their games accessible and inviting.

Hardcore gamers need something a little more than just moving a paddle to hit a ball, though, and their numbers will likely grow as well. The widening market will leave room for all of these groups and many more. And the industry will adapt in response.

In every field of knowledge, the progression of technology creates areas of specialty. Look at medicine, for example. In the past, one doctor per town was the expert in all things health related. Having a baby? He can help. Sore tooth? He can help. Now, if you have a problem with your feet, you can see one of a number of different specialists. Our knowledge in that field has grown deeper, unearthing too much for one person to master. The video gaming industry is still new, but it will follow the same pattern.

The future will hold something like this: more game companies, more hardware makers, more specialties. There may not be such a thing as "just" video games. Casual gamers, avid gamers, sometimes gamers, computer gamers, handheld gamers -- all will be real groups of people with real buying power.

Video gamers make up a small portion of the consumers in the world. But still they manage to spend millions of dollars each year on games, systems and accessories. The market is so lucrative that two giant corporations -- Microsoft and Sony -- couldn't resist tossing in their goods to see how much money could be wrung out. Video games guru Nintendo, who practically pioneered home video gaming, meanwhile sits quietly at the side. How will these three fare in the years to come? If you've read the first articles in Video Games Go Boom, the answer should be painfully clear.

Sony: My System is Bigger Than Your System
Sony was founded as an electronics manufacturer way back in 1946. It quickly became the largest and most popular distributer of electronic devices. Sony made itself a household name with the Walkman and continues to produce electronics of almost every kind.

The PlayStation console was originally intended as an add-on to the Super Nintendo Entertainment System. The deal didn't quite work out, however, and Sony instead released it as a stand-alone. Due to strong support from game developers and several exclusive titles, the PlayStation line took off and is still going strong today. Now, Sony is at the helm of the video games industry with more system sales in almost every region.

With an enormous bankroll and distribution/manufacturing plants across the globe, Sony is in a prime position to develop and produce video game hardware. Their systems are often touted as the most powerful on the market. This push for power is what has kept Sony on top for the past few years. But with a growing (and eventually dividing) market, this push could alienate it from the bulk of consumers.

Sony's Strategy
Sony's public strategy has been made very clear: out-muscle the competition and offer a system with more features, more power, and more choices. For most areas of electronics, this is a great business strategy. In video games it works almost just as well. Almost.

Hardcore gamers will very likely snatch up any Sony product the minute it comes out. Their systems offer the technological possibilities for developers to go wild. This encourages game makers to focus on the technology aspect of the games rather than the "game" aspect of them. There are wonderful exceptions, of course, but by and large this is the pattern. Sony caters to the avid gamer, the person who grew up playing video games and can do a speedrun of Metroid Prime in an hour and a half. For now, this is the group to chase after.

Sony's Future
As the great rift of gamers vs. non-gamers grows and the middle ground becomes fertile, Sony could be left out. With serious gamers being their target audience, only these people will continue to follow Sony's expensive hardware. The percentage of avid gamers will marginally increase over the next decades, but not nearly enough to support Sony's grand habits.

Other snags in Sony's plan center around the concept of an all-in-one entertainment console. The release of the PlayStation Portable (PSP) packaged movies, music, the web and a lot more into one sleek little handheld. Oh, and it plays video games too. Sony doesn't want to be king of the video game world, Sony wants to be king of the electronics world. The same group of people that buy electronic gadgets just happen to be avid video gamers as well. Sony knows this, which is why they entered the video games business.

If Sony wants to stick around, they'll need to soften their strategy a bit. Between themselves, Microsoft and Nintendo, Sony falls second in gross profit. They spend an enormous amount of money to make just a bit more. Sony is on the fast treadmill in the industry, but after some time of running at full-speed, they'll tire and flop to the ground. If Sony doesn't tweak their strategy and open their arms to a wider audience of gamers, they'll vanish from the top three very quickly.

If you've touched a computer in your lifetime, you know about Microsoft. It's the most recognizable name in computer software. Microsoft's entry into the video game world came with the Xbox and continues into the next-generation of systems with the Xbox 360. In its short time in video game hardware, Microsoft has made a snug place for its system and successfully muscled around developers to create exclusive games for its console. Their audience is only mid-sized, the company has yet to conquer Japan, but Microsoft isn't about to give up.

Microsoft's Plan
Microsoft had one goal in mind when releasing the Xbox: beat the competition no matter how much money it takes. Backed one of the largest budgets of any company in the world, Microsoft pushed the Xbox long and hard and won respectable sales.

But money alone won't cut it. Microsoft suffered heavy losses from Xbox. The launch of the Xbox 360 shows some promise, but not enough to break even. The company just grins and takes it, saying some losses are acceptable and that in the end it'll all pay off. You have to admire their persistence, if nothing else.

Microsoft wants to give users customizability along with superior technology. They use their extensive knowledge of the PC to develop the Xbox. It's a slightly different approach, scaling down a do-it-all machine to become a dedicated gaming device. But in essence they'll capture the same budding technologites that stare at a computer screen all day long.

The Xbox Systems
The Xbox series also offers remarkably PC-like functionality, making gamers and computer geeks feel quite at home. The controller is a huge clunky device with loads of buttons -- a forboding sight to many non-gamers. The system itself offers a load of options and customization. Good if you know what you're doing, bad if you just want to play a game. User friendliness -- or, non-gamer friendliness -- seems to have been less important in Microsoft's drive to appeal to the hardcore gamer.

Microsoft's Future

Microsoft has jumped the gun and released its next-gen system, the Xbox 360, before Sony and Nintendo pushed theirs out the door. The headstart could be a mistake, or it could be a great advantage. The Xbox 360 is reportedly quite powerful and has a relatively strong support from third-party developers, including more Japanese companies than before. Still, the Xbox 360 has a long way to go to catch up with the giant Sony and the veteran Nintendo.

In the years to come, Microsoft will likely have one of two extreme fates: king of the hill, or deflated and dead. If they push more of their money and keep pressing the Xbox onto consumers, Microsoft will definitely oust Sony. Without their constant efforts, though, the Xbox will probably go the way of the Dreamcast -- a financial flop but a fan-favorite for years to come.

With a little strategic tinkering, Microsoft could be in a prime position to capture the emerging power of casual gamers. These are the people who pay to play Bejeweled on the internet and are moderately comfortable with PC gaming. An Xbox system with scaled down features, a simplified interface and loads of simple flash-type games could be a huge draw for this group. Microsoft is perhaps in the best position to pull this off. But will they even think about the casual gamer? Are they too focused on nabbing the holy grail to notice?

The new Arcade feature on the Xbox 360 could be the key to capturing the casual gamers' market, but the initial high pice and low availability of the new console is a formidable roadblock to this type of consumer.

In recent years, Nintendo has come under heavy attack from veteran gamers for being "too kiddy", "not serious about video games", or "ignorant of their customers' desires". Everyone else thinks just the opposite. Nintendo was once the king of gaming; now they are the third in sales (though their profits are actually greater than those of Sony or Microsoft). With their forward-thinking strategy and intelligent business tactics, Nintendo is positioning themselves for a revolution in the gaming world. They've seen the future and are ready to pounce.

Nintendo's Ideas
Nintendo practically created the video game industry we see today. Most Nintendo innovations became industry standards -- the d-pad, analog sticks, shoulder buttons, etc. Nintendo's ideas are laced deeply within the gaming subconscious and they hold a fuzzy nostalgic corner of many gamers' hearts.

But it's this nostalgia that hurts Nintendo. It's a natural part of life to grow up and want to distance yourself from your parents, your crib, your favorite He-Man blanket. You want to become independent and shun all things related to your childhood. Nintendo games became one of those things. And the characteristic style of many Nintendo games -- simple, colorful, and let's face it, somewhat kiddy -- hasn't given them any leverage in the minds of maturing gamers.

Nintendo's Strategy

Nintendo has always maintained their target audience is everyone, not just gamers. Their first step toward this was the Nintendo DS, a device that begins to remove the gap between player and game. For the well-initiated gamer, moving an on-screen character and manipulating a virtual world with a d-pad is better than second nature. However, these skills must be learned just as we learn to play the piano or to eat burritos without making a mess. Many seasoned gamers take it for granted that they are quite skilled at using a control mechanism that has little to do with real-world movements.

Enter the Nintendo DS and Nintendo's latest slogan: "Touching is good". The touch screen interface allows gamers to touch the game and affect the world on-screen. In games such as Yoshi Touch and Go, players actually draw platforms, toss eggs and manipulate the world around Yoshi by touching the screen. An interesting twist: we now control the world around the character rather than the characters themselves. And by directly touching, not using a symbolic button for an action.

This is slightly odd for some gamers, but they adapt quite quickly to the new ideas. The biggest bonus for Nintendo is that even the most technologically incapable person can pick up a stylus and go. It's a natural way to play a game.

Nintendo's Future
Nintendo has played a smart move by stepping to the side and allowing Sony and Microsoft to play "my numbers are bigger than your numbers". As they battle for the same small market, Nintendo begins picking up new customers. The casual gamer and non-gamer who previously ignored video games as "geek food" turn an interested eye.

Before the NES, avid video gamers were almost non-existent. Nintendo turned them onto gaming with simplicity and style. Now, when video gaming hits its next phase of evolution, Nintendo is ready to do it again. There are as many skeptics as there are hecklers, but Nintendo knows gaming. It couldn't be any simpler than that.

Human beings love to play. It's only natural that computers, even in their early days, were used to make games. Entire machines were eventually made that were dedicated to video games alone.

From the inception of video games in the 1970's to the crash and resurrection of them in the 80's, video games have been a quiet part of the modern world. The future of video game entertainment is wildly different than today's picture. Yes, technology will increase to allow for more realistic games. Stories will get better, games will become more involving and intricate. But not everyone can handle that. The hardcore gamer of today grew up with simpler entertainment. Tossing something infinitely more complex in front of a new gamer's face will leave confused looks, grumpy gamers, and bankrupt companies.

The future of video games can be found in diversity. Two of the big three console makers are focusing on more complex technology with a bewildering amount of features. That's fine for anyone who cut their teeth on the Atari 2600. But for the casual gamer unfamiliar with the loads of precursor technology, they aren't going to want to put the time into learning HOW to game just to PLAY games. It's the result of rapidly advancing technology, and it's coming to a head.

A new video games boom is about to occur. With the market saturated in sequels, stamped-out clones and other filler titles, even veteran gamers are starting to scratch their heads and wonder what else is out there. Developers such as the industry veteran Nintendo, realizes that the market must open its arms to a wider audience in order to survive. And how to you invite more people in? By giving them something they can understand. By giving them a piece of technology that doesn't make them feel stupid. By giving them something they can have fun with.

Fun. That's how the industry began. That's what it is for most gamers today. But that's what it will be for all the n00b gamers of the future.

Thanks for reading Video Games Go Boom. Hopefully your head is filled with strange ideas and a new view on the world you call home. Now all you have to do is sit back and play some games and wait for the revolution.


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