Develop 2011: Former Sony exec Phil Harrison says free-to-play will be the dominant business model as industry veterans discuss a service-driven future for games.
Who was there: Miles Jacobson of Sports Interactive, Phil Harrison of London Venture Partners, industry veteran Chris Lee, and David Braben of Frontier Developments.
What was said: Much of the panel’s time was consumed by a wide-ranging discussion on the future of the industry, the way business models are changing, and what current social and technological trends mean for the games industry.
Harrison said that the balance of power is shifting between publishers and developers. Now that developers can get their games out there without a publisher and make money for themselves, they will be able to exert much more control over their products. All they’ll be looking for from publishers are deals for distribution and exposure, rather than funding.
“It’s hard bringing a game to market,” Braben said. “Discovery is going to be more and more of a challenge,” with the proliferation of platforms making the route to market much less obvious than it once was.
Jacobson then weighed in, saying that when a studio finds the right publisher, the power issues don’t matter, but that with the wrong publisher things can be unpleasant. He pointed to Sports Interactive’s time working on Championship Manager for Eidos for one such example.
“The us-and-them relationship that we were in was absolutely horrible. We just shouted at each other the whole time,” he said. This echoed sentiments from Harrison, saying that when developers and publishers work towards a common goal, things become much easier than when goals diverge.
The panel then moved on to the subject of Apple, with Lee stating that “Apple presents a fantastic opportunity for developers.” While “Modern Warfare 3 players aren’t going to forget to go to the shops because they’re playing Angry Birds,” he explained, as mobile devices get more powerful, the likes of Apple could start crowding the traditional AAA space. Braben then went on to point out that bringing in new players and new modes of payment meant the industry was still growing, despite recent poor NPD numbers that seemingly show a decline.
Moving on to economics in general, free-to-play games were addressed. “By and large we’re moving towards a free-to-play business model,” Harrison said, suggesting that all games would work this way in time. Lee was a little more sceptical, suggesting that this might work for some online titles but that the level of investment required for making a traditional console game made this unlikely.
“The industry will change instantly overnight, forever,” when we get a future Call of Duty game on the next PlayStation or Xbox console that’s free at the point of entry, Harrison said. He then claimed that while this wouldn’t happen this year or the next, it’s inevitable, and developers need to be prepared for this sort of business model becoming standard. He also said that the current business model of spending billions on a chipset and then effectively taxing retail products was “over” and that making money off services was the way forward for all the big players.
Takeaway: The industry is changing at a very rapid rate, and no one can really predict exactly where it’s going to go. Free-to-play and freemium models were generally agreed to be the way forward, but exactly what form the games financed by those models will take is anyone’s guess.
Quote: “The sex is much better with Sega. Avoid the blue spikes and you’ll be OK.”–Miles Jacobson on getting out of the publishing relationship surrounding Championship Manager and into bed with Sega.
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