Games Industry 2.0

Those with an interest the indie gaming scene would do well to keep an eye on the music industry.

Oh sure, you say. "Digital distribution killed retail" the obits will read. Happening in music, and will happen for games. So what!? Whether you stand on the "bah humbug!" or "viva la revolution!" side of the argument, there's nothing new to this discussion. It's been going on for years.

But look again. A little closer this time. You'll see there are bigger changes afoot. I'll get to that in a minute. First, let's talk about something else.

I've been bitten by the podcast bug as of late and have been listening to a number of them in the car, on the plane, and at the gym (when I can get my keister out of bed to get there, that is). Adam Curry's Daily Source Code, Rock and Roll Geek Show, ABritAbroad, The Rock Show, and a number of others that I've sampled but once or twice. And if there's one thing I'm gathering through listening, it's that there are more differences from traditional radio here than just the budget applied and the music played.

Digital distribution is only a piece of a much larger puzzle.

Retail is only the end-point of a very complex ecosystem that the music biz has built up over time - largely over the past 50 years. Retail was needed for the actual sale of media, but radio, print, tv appearances, MTV vids, etc, etc - all this informed people what was available, built their tastes for certain content, informed them where they could get it, and pushed them into the record stores to get it. Music Industry 1.0.

Today's digital distribution of music relies largely on that same infrastructure. Sure, you can download from iTunes, but your learned about iPod from Bono in the TV ads and then went there to download your U2 box set. I'd call this is "Music Industry 1.5".

If you look to the podcast scene, you see some of the other pieces of the infrastructure coming into place:

• Podcasts replace radio. And with geographic limitations gone, and with content being time-shifted, it's allowing for a level of micro-niche proliferation that was never possible before. You could do an all-steel-drum, all-the-time podcast and probably find an audience for it. Jeez. RRGS pointed me to WhoreCast - talk about microniche - a podcast by and for sex-workers. Not my cup of tea but fascinating that it's there at all! You can even give your show a name to reflect the niche! How about "There are Jews in Alabama"! Yes, that's an actual podcast!
• Sites like The Podsafe Music Network, Podsafe Audio, and others are providing a place to link artists and podcasters, and in turn link them to users. Plus, they are letting artists retain rights to their content in exchange for a reasonable cut of the action.
• Laws around the world are being tested in ways that weren't imagined when they were authored, and undefined legal areas are being discovered. It's going to be a facinating journey, but painful for some, I'm sure.
• New levels of collaboration are possible. Remember "We are the World" and all the other cloned of relief-for-africa celeb collaborations? Check out Podsafe for Peace. 32 artists from 9 countries collaborated over the web to do a Unicef benefit song. (That they turned out similar syruppy pablum to the celeb ones is beside the point). No flying-in-Michael-Jackson's-Unicorn-before-he'll-perform to deal with either!

I think when the dust settles, we'll see that Music Industry 2.0 doesn't kill 1.5, nor does it kill 1.0. All three will co-exist, though not necesarily happily. There will be cross over in both directions: Mainstream artists using guerilla marketing tactics to market their wares via the 2.0 channels; indie artists that "sell out" for mainstream label record deals, limos, groupies, and trashing hotel rooms. Radio will evolve just as AM wasn't killed by FM, and just as Video didn't kill the radio star (though maim may be a more apt verb). Bloggers are taking readers from the mainstream press and the mainstream press is blogging in reaction.

I beleive when the dust settles, we'll see that Music Industry 1.0 will be humbed a notch or two, but not killed. And Music Industry 1.5 will help keep it alive. Music Industry 2.0 will provide a viable alternative for works that wouldn't make sense elsewhere, and that wouldn't be viable in the 1.0 world. And that means two things: (1) Indie bands, who's prior options were to be starving artists, can actually make a modest (and will need to accept this!) living, and (2) more choice for consumers, which is a good thing.

So what does this have to do with gaming?

I think the *same* *exact* *thing* is happening in the games industry.

Cartridge/disk/CD/DVD Games at Retail: Games Industry 1.0

Digital distribution of existing content, or similar content, from existing players. Same traditional marketing, just distributed online rather than at retail: Games Industry 1.5. Adds a "long tail" but mainly as clearing house. The worlds biggest K-Tel discount rack.

Is today's casual games industry "Games Industry 2.0"? Not quite. Maybe 1.9. A few new genres and price models have appeared. The traditional retailer has been replaced, or at least complemented by, the Big Game Portal (Zone, Pogo, etc). New funding models have started popping up in a few places. And players like Steam, Garage Games, Multiverse, and others are providing the distribution infrastructure/tools. Bloggers are supplanting the gaming press and the press is blogging in reaction.

So what's missing? The last piece of the puzzle, in my mind, is Niche Proliferation. Once we have a way for people to make games that appeal to a very specific audience, and connect them to that audience automatically, then we have Games Industry 2.0.

And 2.0 is already being alpha-tested, if it isn't feature complete yet:

• Steam is a step in the 2.0 direction. That their "niche" is significant enough to be extremely lucrative helps, but it's still a very specific type of audience.
• Jay probably doesn't know it, but his site is very "2.0": A casual games site aimed specifically at game designers, with both a review of the game and a critique of the games aesthetics and mechanics.
• Game Services and Service Clients (Steam, GameTap, etc) are the game & game info distribution equivalent to Podcasts+Podcatchers+RSS - letting the content come to the audience rather than the other way around. The difference of course is that right now every "podcast" in this case needs it's own proprietary "podcatcher".

There are certainly more signs of life than that. I don't think we are far off. The next steps are being laid out for us. You can listen to them on your way to work in your nearest podcast.