All Change

Who plays video games, and where do they play them. These are two facets of a traditionally unimaginative industry that have been undergoing significant, disruptive change over the last three years. The disruption has come in part from one company’s decision to gamble all by choosing innovation over convention, and in another part from general advances in technology that have organically thrown up a whole new class of competitor.

The first of these two disruptions is the Nintendo Wii, which during its development was already considered in many quarters to be dead on arrival. And yet it succeeded magnificently. Though some of that success can be attributed to its innovative interface, the bulk of it was due to the creation of a new customer segment normally excluded by the games industry. Nintendo shifted the rules of competition by selling video games to a previously untapped customer base (the general population), and thereby wrong footed both Sony and Microsoft. For a long time these latter two companies treated the Wii with derision, even as Nintendo first caught, and then surpassed its’ rivals sales figures. Both Sony and Microsoft recently unveiled their own motion sensitive systems of control, and in doing so finally acknowledged the fact that they had been out thought.

For Nintendo, nothing less than a market-changing concept was going to prevent their demise in this round of the console wars; the momentum amongst the last generation of consoles was very much with the PS2 and XBOX. Common wisdom had always been that it was processor power first and foremost that fuelled sales; this is the strategy that Microsoft and Sony followed, centred on the needs and wants of ‘hard core gamers’ (who I always imagine to be thirty somethings still living in their parent’s basements, though that may be a little unkind). Nintendo bucked these conventions by doing a number of things in complete contrast. It released a relatively underpowered, cheap console, with an interface not moulded around the fist person shooter (the staple diet of the hard core gamer), and complemented by games that appealed across the ages and sexes. Microsoft and Sony sneered; the hard-core gamers decried the Wii to be a toy. But suddenly people with a previously fleeting interest in gaming (i.e. most people), began picking up the Wii wand and playing tennis or going bowling. The game changed, and Nintendo soared ahead (though whether they stay ahead is an entirely different matter).

The second disruption has gone one-step further than the Wii, as it impacts not only who plays, but also where they play. Gaming on mobile phones has really come of its own recently, and is suddenly looking like an increasingly interesting and lucrative market. A few years ago the proposition of playing video games on a mobile telephone was fairly ludicrous (space invaders at best). But since then there have been substantial advances both in processor power and screen size, making this a very viable gaming platform. I have both a Wii and an XBOX, but it has been a while since either has seen any use; the simple reason is that I do not have time to tether myself to the television anymore. And yet I have been able to snatch several minutes every day to play on my iPhone, an experience that has been more than adequate for a casual gamer such as myself. There are now a number of mobile phone games out there that are perfectly acceptable substitutes for their console equivalents; this should start to ring alarm bells for console makers and traditional gaming houses. The same customer satisfaction for a quarter of the price, at a place and time of my choosing; this is the value proposition of mobile gaming.

There is almost little point in owning a dedicated portable console anymore; why spend extra on hardware, and then also spend further on over priced games that are already available on a device that is always in your pocket? Clearly Sony agrees with this; their recent release of the PSP Go is a defensive move aimed squarely at the iPod Touch/iPhone platform. Even the traditional software houses appear to be finally taking note of the mobile market, though at this time it is the newer, smaller companies such as Gameloft and Firemint that are firing the imagination.

It is an exciting time to be a player in this industry, and it is an even more exciting time to be a consumer. Upcoming technologies such as Microsoft’s project Natal are giving a glimpse of the future, and it looks compelling.