GDC 2011 Trends & Sessions

This year’s GDC was my 18th and I returned from it… spent. Unfortunately I also returned with the dreaded “GDC Lurgy”, the annual disease that spreads when 19,000 sleep-deprived immune-suppressed game developers get together and finger the same touchscreens, and so was knocked out sick for two days this week, thus the late report.

Trends:

It was an interesting GDC this year for one to try to infer industry direction from “sniffing the air” (especially since the olfactory peripheral guys were back this year!). On the one hand, there was a loud and visible emergence/amplification of mobile (iPhone in particular) and social (being almost synonymous with Facebook – which is short-sighted). On the other hand, you had a significant majority of the show (exhibits, sessions, etc) continuing quietly and steadily down the big-budget AAA path. That said, here’s what I took away as trends, as judged by show impressions and conversations.

1. Developers have MANY choices of platforms to target

One takeaway was that given the sheer number of devices playing games today, developers have more choices than ever before in where to focus their game-making efforts. The sheer pace of change, combined with secrecy about numbers from owners of closed platforms as well as successful developers, along with the confusing and/or obfuscated data about new business models (analysts are also having trouble parsing/sizing some of them) means that the choices are daunting, and yet there ARE choices, versus a more limited landscape in the past.

2. Social growth begets social gaming cred

Last year there was a huge amount of interest in Facebook as a game platform, much of that interest perked up by the money that games like Farmville making eye-raising amounts of money. There was also some envy with that, with much of the established industry saying “these weren’t real games” etc. Over the past year, many industry vets have shown up in leadership roles at social games companies, acknowledging that perhaps there’s a real vehicle for game experiences here. To the rest of their nay-saying counterparts, the sentiment was best captured by the yearly “Rant” session, entitled social-gamers rant back. For a poignant, synopisis, view Brenda Brathwaite’s 5 minute rant here.

Note that one of the themes she touched on was an influx of two types of developers into the social gaming scene, the designers looking to explore the medium’s potential, and what she called the “strip miners”, those looking to exploit existing models for maximum revenue and profit. This was also touched on by Scott Jon Siegel’s rant, a transcript of which can be found here.

3. The Mobile gold-rush continues, but with some sobering of expectations

There was of course a ton of interest in mobile, led by interest in Apple for iPhone & iPad games, and with Android being the only other platform of note. Window Mobile 7 is mentioned as a possible credible 3rd, but that’s it. There is trepidation about Android, as the exciting growth and size of the installed base is tempered by a fragmented platform landscape and less lucrative marketplace. That said, people are developing for it more than sitting on the sidelines. Sentiment seems to be that people are marching ahead but testing their footing as they proceed.

4. AAA games get more ruthless

While there was much excitement about the new areas mentioned above, most established companies were clear about the size of these new markets and the fact that they pale in comparison to the established markets for AAA fare. For example, in Jobs keynote, he boasted of $2B paid out to developers in the almost 3 years since the appstore’s debut. In that same period, depending who’s estimates you listen to, the console business generated >$50B of SW revenue for that same time period (Never mind that the $2B is divided amonst 250,000 apps, giving a mean of maybe $4k/app/ and a median that is likely much, much lower. Aka, a brutal hit-curve fall-off).

However, given that console SW market is not expected to see any remarkable growth, this means that when the pond isn’t getting any larger, the fish start fighting one another for the food. The big fish get bigger, and the medium size fish starve. This means that the console title hit curve will become even steeper, as mega-blockbuster franchises focus on achieving numbers like those we’ve seen lately for CoD, Red Dead Redemption, and their ilk. As they manage their portfolios tightly, $50M titles will manage to get their many-multiple returns (e.g. Call of Duty’s latest incarnation is estimated to have taken in excess of $1B in retail sales). As these mega-blockbusters compete for share of mind and share of wallet, the place the money will come from is the “AA” titles. Those with significant budgets($10-$40M) but falling short in the awareness building, etc. If 2008-2010 saw the demise of the B title, we will start to see some of this same effect on AA titles, making the hit curve even steeper. (Note: here’s a good quote echoing that sentiment from Cliffy B).

5. Early prep for the next-generation of AAA games

Some folk were talking next-generation tech for the next generation of consoles, without being specific about when that might be. Epic Games had a theater presentation going with a demo of their next-generation tech, using a high end PC and triple-SLI high end discrete setup. I’ll leave the dissection of tech up to others (vid of demo here), but suffice it to say that it bolstered my confidence that the next generation of consoles WILL be able to deliver a visual experience that is demonstrably different than the current generation. Perhaps not the same degree of leap of, say, PS2->PS3, but still noticeably different. And as there is clearly a market for $50M+ titles, I’m confident there’s a market for next-gen consoles (and PCs). A rumor was circulating about a next-gen Nintendo console debuting at E3, but I’ve been unable to get any industry confirmation on this. Anyone know better? :-)

6. First warnings on Closed vs Open

Several sessions had industry veterans warning on the long term costs and risks of being subservient to closed platforms. Veteran Trip Hawkins had a ‘rant’ session on this, pointing to the browser as the path to salvation. An even more direct-to-the-point talk was one of my favorites of the conference, from Dan Cook of Spryfox, who’s talk was entitled “How to survive the inevitable enslavement of developers by Facebook”. (Dan promised to post his slides soon to his blog at: http://www.lostgarden.com/)

7. Indies are Hot

In a good way that is. The IGF (Independent Games Festival) was filled with a massive number of REALLY polished and innovative games. Many of these are falling into the category of what Chris Hecker called “AAA Indies”, or in other circles, “Perfect gems”. The idea being that rather than being an all-encompassing experience done on a shoestring budget, that they are games that take a single idea or game mechanic (the ‘gem’) and polish it to perfection.

On the plus side, everyone now considers indie fare as a must-have in their portfolio of titles for their platform, and so between that and the number of platforms, there is no shortage of ways that indies can get games to market. On the down side the level of polish expected means that by and large, indies are expected to develop multi-hundred-k titles on their own dime. Publishers and platform vendors alike are signing deals with these guys, but with mixed results, leading to the same risk aversion we see with AAA games. Budgets like they've normalized for console downloadables around a ceiling of $800k-$1M, and while titles like Spyparty and Limbo are likely sign-ons, titles like Dinner Date (my fave, and described as ‘You play as the subconsciousness of Julian L, waiting for his date to arrive. You listen in on his thoughts while tapping the table, looking at the clock and eventually reluctantly starting to eat...’ are far more risky to fund, but necessary for the medium of games to reach its potential.

8. The Last stand of the handhelds (or is it?)

Lots of talk about Sony and Nintendo’s bets on the NGP and 3DS respectively. While there was also theorizing about the console’s demise in the era of more multi-purpose platforms, there was a general sentiment that the place this battle will first come to a head is in handheld. It can be summarized as follows: “Can a dedicated-function device (3DS, NGP) built on a business model of $40 games, offer a sufficiently compelling experience to justify the cost over a general purpose device (iPod touch, iPhone) with $0.99 games”. To their credit, both Sony and Nintendo are taking this seriously and have very compelling offerings to bring to the table:

- Nintendo: 3D display, dual display, first to market with streaming 3D Netflix (trailers at first), exclusive deal with AT&T for 10,000 free wifi access spots in NA, amented reality games, and of course, a killer IP lineup including Mario and Zelda.

- Sony: High-end HW that should do a killer job on 3D tiles, playstation back-catalog content, a good IP catalog including Metal Gear, etc, also a focus on augmented reality, and a touchpad in back*.

(*Prediction: everyone is undercalling the touchpad on the back of the NGP. I predict this is going to prove to be the controller that finally cracks first-person shooters on handhelds. Every other attempt has sucked)

It certainly will be interesting to watch it play out. My personal hunch is that Nintendo is safe, despite a device inferior to the NGP, based mainly on their 1st party IP. Sony has a harder challenge. They’ll find a market, but I’m doubtful it’ll be large enough to keep the ecosystem aloft.

Favorite Sessions Attended

I managed to attend a dozen or so sessions. Here are my favorites:

I. Nintendo Keynote: Consisted of 3 sections, each of which was quite interesting:

Part 1: Nintendo background, growth of market, lessons learned

• Iwata gave an overview of his history at Nintendo and lessons learned. Among them that content is king (e.g. He gave the example of having programmed a technically superior game to his counterpart/rival Miyamoto, who’s game contained an Italian plumber named Mario – lesson learned)
• Nintendo has surveyed 5,000 users across all age groups/demos for the past 7 years. Probably an unparalleled insight into gamers. Great graphs showing gamings permeance into culture over time. Bottom line is that the population that isn’t gaming is shrinking and aging over time. Near future will be everyone(!), Google for any of the numerous liveblogs to see the charts.
• Industry quotes echoing some of the trends I mentioned above as to AAA games: e.g. "We’re all playing much bigger gambles, and that’s getting scary” – Mike Capps, Epic

Part 2: Reggie came out to do the infomercial section: 3DS: First to deliver streaming Stereo3D on Netflix (!), Record Stereo Video or take Stereo Pix, AT&T deal to provide 10,000 wifi hotspots for 3DS owners free of charge across US, at airports, malls, etc, Improved digital store, Mario & Zelda titles in the works <-- note how games was the LAST item discussed in the infomercial section.

Part 3: Iwata came back out, talked about Industry concerns. This was a two part thing: ( A) Large games mean increasing specialization; harder to develop talent that sees “whole picture”. Those that do are aging. (B) and this was uncharacteristic of Nintendo: A direct attack on Apple and to a lesser degree, Facebook. Short version goes like this: Closed systems have hundreds of titles, “big app sites” have many tens of thousands – not enough for everyone to make money. Those systems not designed FOR games specifically care more about harvesting the ecosystem than nurturing it. Nintendo cares about protecting value for devs, and value in games (i.e. 0.99c games will lead to low quality fare). It was definitely a defensive attack, but not without an element of truth

II. NG Moco’s Neil Young on why Japan is a leading indicator of the worldwide mobile market

This was a great session for 3 reasons: (1) Half of it was really a back story on how the startup got off the ground up until it’s acquisition, (2) Great insight on the future of mobile, (3) Neil is a great presenter and presented almost half of his talk while impersonating his VCs, one of whom he swears is a shoe-in for Michael Myers “Fat B**tard” character.

Interesting conclusions they reached before re-vectoring the company: Being a mobile games publisher was unsustainable. Back of envelope math: Would need to have 3 titles in top 10 – every day, all year, to be a $20M company – Almost impossible to do. Note that market bigger now, but regardless, decided this was the wrong path to being a multi-billion dollar company. Re-vectored around F2P games, and targeted an acquisition/partnership that would let them broaden the service across platforms and geographies.

Great quote: “In a world where there are more apps than appetite, customer relationship is the real valuable IP”

Hope he posts slides, there was some great info on growth of japanese mobile market as indicator of future.

III. Game Design Challenge: 3 designers face of in designing a game around a given, difficult-to-design-for theme. This year was “bigger than Jesus” a design challenge around designing a game that could serve as a religion. Entertaining, thought provoking. My favorite (and not the winner) was Jenova Chen (of That Game Company) who’s religion was centered on the propagation of ideas, and who designed a meta-game on top of the TED website. Cool concept, and I'm betting he'll get a TED invitation out of it!

IV. Epic Legal Battles: A panel of games-specializing lawyers and legal profs each gave a mini-presentation on areas of pending increased legal activity over the near future. I agree on all counts:

• Collision between Games and Gambling. To the degree that players can get any real-world value out of the game, or get anything of perceived value, you stray close to gambling laws that are deliberately vague. Ticking timebomb? [KP: Yet another reason that the industry needs to continue to lobby for games as art deserving of free speech protection and respect as an artform. Gaming’s esteem by the general populous will determine how it withstands coming under the eye of scrutiny, which it inevitably will]
• Antitrust: Finger pointed directly at Apple and Facebook, but this could apply to any closed platform. Good quote on the idea of filing suit against Apple “you could. It’s like lying down across barbed wire so your friends can then walk over your body”
• Destroying Worlds: When a game is a service, and you find it no longer is profitably, and you want to take it down, you violate a contract you have with the remaining players. Despite whether or not the fine print says you can do so or not, their hearts are in it, and they may want revenge.
• Privacy: We’ve only scratched the surface. The more people put online, the more they’ll care. Also, laws are coming up to speed with the issue and as new laws go into effect, games industry will need to deal with it. Example given of ‘cookie law’ going into effect in EU in May.

V. Social Game Developers Rant. The rant session is always one of the better ones of GDC. See trends II and VI in the trends section above for links to a couple of the better ones.

VI. Moriarty's 'An Apology to Roger Ebert': I’m not sure this was labeled the closing keynote, but it may as well have been. It was a brilliant speech about games, art, culture, and a provocative close to the conference that kicked off hundred email/twitter threads about its ideas. The full transcript is online here: