(eyeball time: 3.0 minutes but you might read faster…but if you check the cool video links which take forever to load…god only knows… you are on your own…)
e3 los angeles 2010
dea is LIVE FROM E3 in la
the dea skinny on what’s happening:
http://www.e3expo.com
in case you didn’t get the tweet, e3 is the big momma of all industry gaming shows in the usa. every major game developer, hardware platform provider and distributor shows up at this huge industry show in los angeles each year to show their wares. this week, we attended e3 and notice several longer term patterns in the video game industry. overall e3 looks like a 1950s automobile show in detroit. mostly all men with scantily clad blonde barbie dolls doing demos. ironically, women are the fastest growing segment of the gaming market but the testosterone geeks don’t get this in the industry. (check out www.womeningamesinternational.org) and because we are americans, the shooter/killer games rule. but there are amazing new directions starting to emerge (check out the flower video and interview with kellee santiago, ceo of thatgamecompany in our video gallery…that is where it is going!)
what is most notable also was the absence of zynga, the popular facebook provide of social networking games like farmville, mafia wars, etc. this show is very old school, mainstream industry, brought to you by the entertainment software association.
also duly noted as missing-in-action were all the mobile game players – publishers and cell phone, tablet and mobile device industry players. just not there and they represent the fastest and largest gaming platforms out there…according to the un’s itu, there are nearly 5 billion mobile phones worldwide. and not a single vendor of note at e3!
1. major publishers continue to take names and kick ass with mega titles in hd
you need to see the new games being rolled out..they look like movies you control. take the time and click on some of the links…(the commercials are a pain but the demo’s worth it) the use of hd tcnology makes old time game look obsolete. we are on the primitive edge of full simulation machines. check out lucas star wars II: force unleashed, (you remember the film maker…now games are his main activity), activision’s call of duty: black ops, or square enix’s the third birthday (featuring a new woman here ala lara croft but realistic). Yeah, they are all killer games but that misses the point about the technology and the direction simulations are taking. reality is really real these days…
2. user interface experience is morphing
ok, so the big headline at e3 is microsoft’s xbox 360 release today of its new interactive user interface called kinect (project code name “natal”). this is redmond’s answer to nintendo’s wii interface except it is more revolutionary….no devices! users simply move in front of the set and infrared sensors pick up movement and are incorporated into the game. it is pretty primitive today but one can see where this is leading. sony playstation 3 is appealing to hard-core gamers with 3d technology although the jury is still out on 3d displays (due to side effects of headaches, etc.) and tv content producers and networks are dragging their feet on 3d programming which will affect adoption. but these are the first primitive steps into immersive user experiences at low price points (kinect is $150) and have deep implications across all industries for applications involving interactive use experiences from product sales and customer experience to education.
3. the network is the game not the box now
“the network is the computer” sun microcomputer’s then-ceo and founder scott mcnealy prophetically stated well over 30 years ago. well, it is true now. the game console is slowly going the way of the doodoo bird. even giant activision get 70% of it net operating profit games from non-console games. new companies are rolling out network device independent online gaming platforms where you simply buy a subscription for multiple gaming experiences, much like buying a movie ticket. check out onlive.com for an example of one of the new players….and they are cross-promoting with at&t…why? because scott mcnealy was right. online gaming has HUGE implications for network providers as well as all pc and chip makers…
4. the asians are doing amazing things but the gringos don’t get it (as usual)
ironically, the biggest publisher at e3 is a korean company named nexon. they dwarf everyone else in terms of users and represent the future of the gaming, social networking, promotion, advertising, micropayments, branding and the attendant infrastructure for years to come. how big? try this: today microsoft brags it has 20 m users worldwide on xbox 360. nexon has a huge portfolio of “free to play” games (you play free games and make small payments of $1-3 us for accessories like clothing, cars, etc.) one of their games, dungeon fighter has 200 million subscribers and 2.5 million simultaneous users. their second biggest title maple story has 100 million subscribers with 1.5 million simultaneous online users. american game executives right this off saying it is china which is in one time zone and doesn’t matter. hey dudes, the world is flat and nexon is making billions of dollars and growing exponentially in a market whee us gaming was down 10% – 20% and it wasn’t the recession that did this. wake up and smell the coffee you auto-centric americanos. to dismiss this under the banner of different cultural adoption and usage patterns misses the point completely. you need to get out more and see the world. something is going on and you don’t know what it is…ok…rant over…you get the point. asia is driving gaming innovation ni this space. check out tainengmiao.com, d2home.com, and cddmb.cn to get a sense of this. there is a major game industry in chendu, sichuan province and all over china, as well as nexon’s native korea.
the stakes:
huge. billions. and the biggest thing is that the us gaming industry is a laggard. there are major opportunities in all segments for layers within the traditional gaming inustry and outside it….advertisers, sponsor, hardware and communications infrastructure and more…in all the categories above.
the dea takeaway:
1. major publishers continue to take names and kick ass with mega titles in hd
the increased use of high rez image and motion means major opportunities not for just chip makers like intel, amd, and nvidia, but also for all processor-related industry players at the hardware level. for network service providers it is a double edged sword..more revenues for more bandwidth-management players like cisco (good) but more major capital spending for players like telcos such as verizon, at&t, sprint, t-mobile, etc. (bad for telcos but good for cisco). for content players like major film studios, there are obvious trans-media tie-in’s and licensing plays (see “prince of persia” piece we did on this). ditto for brands, advertisers, etc. and there are myriad niche service and digital advertising integration lays as well too numerous to go into here.
2. user interface experience is morphing
this area is very exciting and has deep implications for game industry developer and hardware and chip manufacturers. but the largest and most interesting opportunities lie in adapting his technology for new customer experience and cross-industry applications. imagine an atm or online service experience where you interact virtually as one of a set of optional user interfaces. microsoft’s kinect (based on the root words ‘connect’ and ‘movement’) says it all. citibank already uses video conferencing at its drive through branches. this could be the next wave and applied for many net-based interaction applications. 3d…not ready for prime time.
3. the network is the game not the box now
game over. the net wins. if your business is console based, those thin, cloud-based client interfaces spell the inevitable day your consoles will not be needed except as game controller interface hardware devices and that, my friend, is a zero-margin business over the long haul. with all respect to everyone from activision to ubisoft, get in gear to transition. this has radical implications for our product distribution strategies. now you can go distribute directly over the net to millions of subscribers worldwide like nexon already does and cut out your distributors! it is a scary world out there! the network providers need t be ready for this growth and for mobility, in particular.
4. the asians are doing amazing things but the gringos don’t get it (as usual)
hey, get out and get educated. book a trip to china, korea, japan, and india. ’nuff said. monitor developments in these countries even if it is difficult and things look too “hello kitty” for you at times. hey, we told you about nexon. this is truly where the innovation is taking place, not the usa. we will try and help there also.
for more information, please contact us at 512.825.6866 to discuss the issues more fully and the specific impact & implications to your business. it’s free!
Tags: 3d gaming, activision, amd, dungeon fighter, es, gaming, kinect, lucas games, maple story, microsoft natal, nexon, ntl, nvidia, sony playstation 3, star wars, the third birthday