Two articles were published in the last few weeks that feature video game companies. The contrast between them illustrates ongoing trends and tensions within the industry.
One of the articles, published in The New York Times, is a feature by Caitlin Kelly on Ubisoft, which is based in Montreal and has been around for almost 30 years. They are, according to the article, the fourth largest in the world, and they make major video games such as Far Cry and Assassin’s Creed for a variety of platforms. Far Cry 3, for example, is available for the X-Box, PlayStation, and a PC. These games are major investments, for both the company and the consumer. For the consumer, the games retail for around $50 and require either a dedicated console – an investment of several hundred dollars – or a PC powerful enough to handle the games’ graphics. Learning to be comfortable with the complicated controls that these games require is also an investment – of time if not money – on the part of the player. For the company, developing one of these games requires around 50 million dollars and many months, if not years, of work on the part of hundreds of employees. The article highlights the work of a sound designer who creates the sound effects and mentions the work of the actors who play out sequences from the games so that their movements and facial expressions can be filmed by motion-capture cameras and used to animate the game. It takes a rather large village. World-wide, Ubisoft employs around 7,500 people in more than 20 offices.
Developing these games is a very high-risk business that has, traditionally, been hit driven. The companies often rely on sequels and established genres because they think they’ll have a better chance of succeeding and making back that huge investment. However, there are some winds of change a-blowing. The sale of consoles, as well as the console-based games that Ubisoft’s business is largely based on, are reported to be declining. Part of this is no doubt due to the fact that both Sony’s PlayStation and Microsoft’s X-box are, well, old. Gamers are turning their attention to the new versions of the consoles, which are reported to be coming out within the next year or so. However, this isn’t the only problem. As Kelly’s article on Ubisoft notes,
An example of a company that makes games for those smartphones and tablets is King Games, a Stockholm-based company that was featured in the April 27 issue of The Economist. When the article was written, it had the most popular application on Facebook and the top-grossing app in Apple and Google’s stores, a casual game called Candy Crush Saga. Candy Crush is essentially a version of Bejeweled – line up three of the same type of candy, they disappear and your point total rises. This is a “casual” game – a game that has simple rules, is fast to learn and play and, when done well, is strikingly addictive. Candy Crush is a free download and supports itself with ads. Other casual games cost a dollar or so –considerably less than the $50 list price for Ubisoft’s Far Cry 3. King started with web-based casual games, supported by advertising. According to The Economist, they moved on to Facebook a year ago, in April 2011, and to mobile a bit later in July. The increase in users has been dramatic – from 300 million times a month when they were web-only, to 16 billion now.
These are two very different approaches, in terms of both game-play and business models. It’ll be interesting to see how much of the playing field (and wallet share) the candy crunchers and angry birds and robot unicorns can seize from the likes of Jason Brody, and Master Chief, and Marcus Fenix.
