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MIGS Keynote: A Broken Business Model
Posted by Maggie Greene at 6:30 AM on November 23, 2008
The Montreal International Game Summit recently wrapped up, and keynote speaker David Braben of Frontier Development really took the industry to task on everything from the business model (broken!) to retailers (killing longevity of games!) to the 'online myth' of the next gen consoles. He makes some interesting points, though I'm not at all convinced of the veracity of some of them. Here's his take on the retail model:
Despite declining stock value, Giant Interactive — the company behind the intriguing MMO 
Dave Perry, founder of Shiny Entertainment, sat down with Valve's Gabe Newell to talk about how to shoehorn your way into the industry — and what's the industry going to look like in a few years, anyways? Are game degrees a waste of time? Is specialisation going to be the name of the game, as in film ? And how can you avoid shooting yourself in the foot when trying to get said foot in the door? On specialisation, Newell had this to say:
Gamasutra has an interesting — if dry — analysis of a variety of sales figures from Nintendo's investor presentation. While targeted towards a particular audience, the variety of graphs and pie charts illustrate what's going on in the global marketplace: handheld and console sales, as well as first- and third-party software sales, shed light on how Sony, Microsoft, and Nintendo are doing across the board. Of particular interest are the figures on the European market, which tends to be difficult to get a grasp on:
Gene Hoffman, CEO of Vindicia (a billing and fraud protection company), has some words of wisdom regarding the headache that is billing and payment for MMOs — be they the more 'traditional' subscription model or the free to play model. Obviously, there are benefits and downsides that come with each model, and companies are constantly trying to negotiate a balance between profit and player happiness. Even the vaunted subscription model comes with its own problems and a variety of structures within that model:
Leigh Alexander has a nice piece up on what she calls the "dysfunctional family circle of game industry, game media, and game consumer," focusing on the whys and wherefores of the 'hype cycle,' hot (sometimes misleading) headlines, and a culture of jaded consumption. There's been a lot of talk of the problems of game 'journalism' lately, but Leigh's piece is particularly well-written and reasoned. Are we dealing with a chicken or the egg question?: 
A gold farming/money laundering ring in South Korea has been accused of moving somewhere in the neighbourhood of $61 million from Korea to China (with the help of real money transactions). According to PlayNoEvil, they made false purchases to a Hong Kong paper company to move the money, which is what eventually led to their arrest. In addition to the ring leaders, an additional 11 people were arrested:
Are video games the movies of our current economic slump? In an article wittily titled, "In Tough Economic Times, Video Games Console", NPR writer Laura Sydell explores the similarities between the growing popularity of video games in mainstream culture with the movie boom that occurred during The Great Depression in the 1930's, at time when a weary nation turned to nickel theatres to escape the grim realities of the economic climate. She compares the relatively steady sales of movie tickets to the ever-expanding gaming market, with software sales up 43 percent from this time last year.
Compared to a lot of esoteric ruminations on game design, Ernest Adams' little essay on 'the dao of game design' is remarkably grounded and to the point. The question of how to make a game that players — not just the designer — would want to play is an obvious one; perhaps more obvious is the fact that a designer needs to know what they're trying to convey (though, considering the muddled end products we're sometimes presented with, perhaps some designers don't pay enough attention to the 'message'):
In totally unsurprising news, China's game market continues to climb — numbers just posted for the second quarter of 2008 show an 11.2% increase over first quarter, and a nearly 66% increase from the same quarter last year (!). In terms of market share, Shanda leads the pack with a 17.9% share, with other big companies hovering below that.
