Friday 9 December 2011

The Economist special review: video games (Part 2)

This article was first published in The Economist on 9th December 2011

The business of gaming

Thinking out of the box: consoles are no longer the only game in town

THE IDEA BEHIND video games used to be simple. Nintendo, Microsoft, Sony, Sega and others sold consoles at a loss and made their money from the boxed games they produced for them. The punters, mostly young technophile men, bought the games from a shop, played them for a few weeks and then put them away.

Those customers are still around, but they have been joined by a plethora of others. New, more casual sorts of games are being picked up by a mass audience that would previously not have played at all. “In the past few years two things have changed,” says Mr Moore of Electronic Arts. “The first is the proliferation of platforms [on which to play games], and the second is that it’s become so much easier to call yourself a gamer.”

So the industry has branched out into a bewildering variety of sub-sectors and niches. At one extreme, companies in the traditional sector are still charging $50 or $60 for high-end console games with ultra-realistic graphics and cinematic game play. At the other, a shoal of smaller firms is developing simpler, more casual games aimed at a much larger and more diverse group of customers. In between, a mix of established firms and start-ups are testing new ways to develop games and new business models for selling them.

The Economist special review: video games (Part 1)

This article was first published in The Economist on 9th December 2011.

All the world's a game

Video games will be the fastest-growing and most exciting form of mass media over the coming decade, says Tim Cross

IN NOVEMBER 2010 “Call of Duty: Black Ops” was released. Fans in many countries queued round the block to get their hands on a coveted early copy. A lucky few had won tickets to invitation-only release parties which were broadcast live to viewers across the internet. The event had been advertised on billboards, buses and television for weeks. Chrysler even produced a commemorative version of its Jeep. In the event the reviews were mixed, but no matter: the publishers, Activision, notched up worldwide sales of $650m in the first five days. That made it the most successful launch of an entertainment product ever, and people kept buying. A month later the total stood at over $1 billion.

“Black Ops” is not a film or a book: it is a video game. For comparison, “Harry Potter and the Deathly Hallows Part 2”, the current record-holder for the fastest-selling film at the box office, clocked up just $169m of ticket sales on its first weekend. “Black Ops” stole the crown from its predecessor in 2009, “Call of Duty: Modern Warfare 2”. The latest instalment, “Modern Warfare 3”, released on November 8th, set a record of its own with $750m in its first five days.