Next-Gen Opportunities Market Growth New Franchises New Genres
Virtuous Circle Market Growth Source: Deutsche Bank
New Franchises, New Genres Console Power Handheld Power Calculation Power (not to scale) 1972 1983 1994 ~2006 1 st console Odyssey 4D games Network AI Cine-quality Next-Gen Consoles Sony PSP NintendoDS 2D games NES Gameboy 3D games PS2, Xbox, GCB Dreamcast PS One
There’s Still Huge Potential Less than 1/3 own consoles. 30% in 3 countries. 15% in “shoulder” markets. Primarily “twitch” genres.
Market Growth Current-Gen Warning Signs Current-Gen Warning Signs Market plateau New Franchises New Genres Financial stress
Console Market Plateau Source: Informa Media SW sales ($millions)
Financial Distress Bankruptcies at publishers & developers. Fewer, bigger titles are bad. Discuss.
Financial Distress, Causes of SCOPE (#s of bitmaps, textures, models, audio & source files) Jan ‘00Today 40,000 10,000 Scope Tripled BUDGET ($ millions) Jan ‘00Today ~ $10 ~ $3 Costs Tripled UNITS NEEDED FOR DECENT RETURN Jan ‘00Today ~ 500,000 ~200,000 Risk up 2.5x
Next-Gen Ups the Ante Console Power Calculation Power (not to scale) 1972 1983 1994 ~2006 1 st console Odyssey 4D games MMO AI Cine-quality Next-Gen Consoles 2D games NES Gameboy 3D games PS2, Xbox, GCB Dreamcast PS One Scope increase Est. Scope increase
Structure Amplifies Risks Population segments that were traditionally the main customers of core genres are shrinking in 2 of 3 key markets.
Controlling Risk Code Re-use On-target viewing and editing Asset Re-use Productivity increase Schedule predictability C & O Lower-cost platforms = stable cash flow
Skills & Supply Shortage Cinematographers Level Designers Character Animators Modelers C & O
Cinematography Technique Control data density. Guide player emotions. Challenge: skill shortage.
Real Characters & the Uncanny Chasm “Emotional response to an entity's appearance and motion doesn't increase steadily as the entity becomes more human-like. “Just before true human characteristics are achieved, there’s a large dip called the "uncanny valley", where beings such as zombies, mutants, and almost-human aliens live.” Dr. Masahiro Mori A zombie. Really.
Story – New Communities of Fun Is this Fun? Communities with different frames of reference. New interpretations: Tragedy Comedy Love Opportunity: 70% don’t own a console! C & O