The Next Billion-dollar Opportunity in Gaming

Billion-dollar opportunity: “Make good games and stop making crap”

GameSpot reported discussion that is taking place today at GDC. The “next big thing”, according to investors, was “the Internet”. They saw opportunities in casual games, digital distribution, and massively multiplayer games. Basically the investors were saying that there’s unexplored possibilities in gaming and Internet. I’d recommend checking out that GameSpot story for details.

What I think there was a particularly interesting statement after that article. One GameSpot member commented:

I have an idea for the next billion dollar opportunity……MAKE GOOD GAMES AND STOP MAKING CRAP!!!!!!!!!

I think this guy really hit the nail. No amount of technology can replace the key strength that must be done properly: the games must be worth playing.

What about Nintendo Wii?

While it’s true that the foundation must be “good games” I think there are billion-dollar opportunities out there – that would combine the technology and good games. For example, I think Wii game platform has tremendous possibilities to become THE console that’s found from everybody’s room. How? Well, I think the same way as PC casual games are coming extraordinarily popular: by giving indies tools to start making games for Wii. Casual games were not done by big companies. Casual games were first started by witty individuals, and now big companies are seeing the opportunities and jumping in the casual bandwagon. Those witty individuals that have made games 10 or 20 years already have laid the foundation for shareware games, that’s now being growing casual games business.

Secondly: Wii is great example of a gaming platform where people would enjoy playing casual games. Indies want to do casual games. If Nintendo counts 1+1 here, they’d see that it might make a lot more than 2.

And the next thing: Wii doesn’t require great graphics since the idea is to have fun games that benefit from the use of Wiimote – that’s exactly what indies can do. Indie games rely on innovation, not on fancy graphics.

Last point: budget. One-man studios (or teams with developers located globally) don’t require pouring millions and millions dollars in a lengthy development. Indies can create games with a shoestring budget, and when games are small the development cycle can be much shorter (especially when working full time) compared to AAA titles that might takes years to get finished.

Nintendo has a billion-dollar opportunity in their hands, and it is up to them if they want to take their cut from the growing casual game money pile. The problem is that they need to act fast. If they announce Wii development kit for the public after 2-3 years, somebody else will have used the opportunity. Somebody like Microsoft.

Microsoft Xbox and Casual games?

I personally think MicroSoft is taking a wise step (and has took for some years now), and has couple of good advantages that will give them advantage over other major players.

First of all, Microsoft has figured out that there are good casual games, and they are providing free or inexpensive tools for anybody to create games for Xbox. This will help more indies to support their system. See more information about XNA.

Secondly, they are cooperating with major players in the casual field: GarageGames. GG provides an engine that can help developers make games for PC and Xbox – and again this helps bringing more developers to make games for Xbox.

Xbox and PC have lots of similarities. I think this is a good advantage since now Microsoft can provide tools that can be used to make games for both PC and Xbox 360. Now those familiar with PC development won’t have a big barrier to make games also for Xbox.

When they put all things together, get critical mass doing games for them – Microsoft might have an advantage over other competitors. An advantage that’s tough to beat.

I’m quite confident we will see major players stepping in and bringing new possibilities that will change the market rules. Internet and digital distribution will play a role in this era, but so will casual games, indie developers and players.

Now we just need to wait to see when that happens.

Juuso Hietalahti