Let’s Get Casual, Casual!

It seems that Twisted Metal developer Eat Sleep Play is now about to relinquish its console development aims and now plans to focus solely on developing casual games for the iPad 2 and iPhone.

I talked a few days ago about the complications of blaming the likes of Zynga for the recent troubles in cloning and copycat games. That remains true. Zynga are not the root cause of problems – their rampant growth over the past couple of years is a symptom of deep-rooted and much more pressing matters within the industry, where the law is an ass and is treated like a donkey for the most part.

But with more and more studios focusing on the Casual Gaming market, perhaps we should also be reminding people that this is also not a sign of a healthy industry.

The problems are twofold. One, is the suggestion that casual gaming is cheaper and more profitable than traditional console and PC gaming development cycles. Whilst this is admirable and understandable from the viewpoint of a CEO focused on profit over creative drive, it also undermines why the casual gaming market has grown in recent years; the cheaper costs allowed entry to smaller independent games developers of only a few people, who brought with them new ideas and new approaches. As more and more large-scale development studios enter the market space, it may become much harder for smaller studios with little track record to enter it, as licencing and marketing costs spiral upwards to capitalise on the entrance of these much larger studios. The place where it became possible to compete on ideas and quality of product alone may end up nothing more than a carbon-copy of the traditional gaming market. This will end up damaging both the casual gaming market and the traditional gaming market equally, so why don’t the likes of Nintendo, Microsoft and Sony sit down with studios and ask them why they’re abandoning their platforms, and if it is purely monetary (as I suspect is the main reason), they may have to work with studios to lower things like licencing fees, the costs of development kits and such forth.

The other problem is the sheer number of studios entering the Casual Gaming market with claims to be “dedicated” to it. As companies do their best to capitalise on the current trends of the day, they have become painfully unaware of the crowded nature of the market. Casual Gaming is currently the most valuable real-estate in the industry, but equally since everyone wants to move there, more buildings and spaces are being built to accommodate the numbers. This may sound like a good thing – and it is, to a certain degree, as the sign of a healthy market is in its growth. But like all things in this world, you can have too much of a good thing; as more and more studios and developers try to cram into this space, the competition between them raises exponentially too. And whilst having all this attention is great, it also dilutes the net worth of the market. We already know the likes of Zynga and Gameloft are built on pretty shaky business logic; their net worth having dropped dramatically in recent years. As more and more chime in to obtain a slice of the pie, the customer base equally has to rise to meet that demand for sales. If the customer base remains static, or falls for any period of time, the size of the pie shrinks; and that will mean some will be unable to get a large enough slice to remain in the market. If they have no other business obligations, or ideas, or investments to ride them through these potentially rough patches that often come when least expected, you will see many studios disappear altogether – unable to meet their wages, their overheads and bills.

I genuinely have no real issue with casual gaming; the only thing I will say is that many companies are faking it. They profess to be “indie” when they are nothing of the sort – with a net worth that exceeds the million marker, and associates that allow them to exist within a space, their worth much appreciated and drawn upon by the likes of Apple, Facebook and Android. True indie studios will be the ones who suffer; those who have been the driving force of this revolution of the gaming market will be the ones who face the highest price, and whose entry will be once again relegated and phased out, left to the PC market where they can compete in a relatively neutral arena.

So is Casual Gaming a bubble that can burst? Absolutely.

I mentioned the pie analogy. I’ll expand on it briefly. You have 1000 studios competing for an average audience of 43 million users. If we’re talking an average here, that is 43,000 users more or less for each studio. Now let’s bump that up to 5,000 studios. In that case, the average user per studio ratio drops to 8,600. 10,000 drops that to 4,300. And so on.

Now, I know this is oversimplifying so don’t bitch just yet. Some studios will attract larger numbers, such is the way of the world. But you will still need people to want to obtain your product, which is why a law of averages can apply here. You need to know there are enough people out there to buy your product – otherwise you’re throwing money into a business that can’t attract the figures needed to break even.

Which means that the market has to grow in users as well as those providing content. If the consumer base doesn’t grow in line with the expectations placed upon it, and with the number of studios trying to get a slice of the action, then profits will drop and many will end up struggling to make ends meet. Couple this with the excessive upgrading of platforms and devices, and you have a fractured, complicated market that is fraught with challenges and booby traps for the uninitiated, the unwary and the plain greedy.

Which leads us back towards the console industry; where costs are indeed high and entrance into its ranks fraught with challenges. But it is a predictable, safer world as well, the hardware can exist and remain competitive for up to ten years allowing a less stressful period of development and the costs are, by and large, also predictable. Obtaining 500,000 sales or even a million sales for a good product is not unheard of – and in any business, that’s a pretty healthy market to exploit.

But when it comes down to money – it is expensive. And challenging to maintain quality and content on a consistent level. This might be why so many are downsizing and trying to muscle in on a market that has seen Zynga become worth $7billion.

But have many of them left it too late? If we look at the MMO market, the only recent success story is Rift – which has grown to 2 million users. This is in the face of World of Warcraft, stubbornly clinging to over 10 million users. The Old Republic has claimed 1.7 million, but surveys and census reports have shown the actual figures still playing the game may be no more than a quarter of that figure. Still good – but hardly something EA and BioWare would want to shout about (when Mass Effect 3 is released and the need to maintain a united front is over, I suspect there will be some serious issues coming to the forefront over this).

But this misses the point again. The likes of Final Fantasy XI existed with 500,000 users for years, and made profits. You don’t need 10 million users, or 2 million users, if your game is developed sensibly and can exist and remain competitive and content-driven for that kind of period of time. Profits can be made on smaller budgets, if the industry can be smart and inventive enough to make use of smaller concepts and ideas.

The issue the casual market has is that it is being treated as some kind of miracle cure for the stagnant, unintuitive nature of the console markets. And yet, as Zynga and many others are proving, the casual market space is just as guilty of this, if not more so, than the industry so many are willing to idly discard in favour of something new. As they focus on smaller ideas, they may indeed save money and cut costs – but that is no guarantee of success, because success does not come with a cast-iron guarantee.

By placing all their eggs in one basket, many will find themselves running from their problems only to eventually be confronted by them once more. If the problem is monetary, then the development world needs to lay down firm instructions to Sony, Nintendo and Microsoft to keep tech at a certain level for a more extended period of time. They need to renegotiate the contracts and licencing arrangements that allow them to make games for consoles. They need to look at their own costs – and ask if internal restructuring and more intelligent use of staff and product can provide an answer. If the problem is ideological – then this is only going to emphasise the problem, rather than provide a new and wondrous solution.

Whatever the real reasons, the casual market space is becoming over-populated by those willing to make the games… but if the actual market doesn’t grow with it, many of these developers who changed tact to get into this market may wish, in the end, that they had stayed put in the first place…

Go figure.

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