2009 was a rather bad year for the gaming industry?one that isn?t really used to bad years. All the early bluster about videogames being ?recession-proof? sounded increasingly hollow as the industry tottered under the effects of declining sales, studio closures, pay cuts and lay-offs. Microsoft laid off over 5,000 employees. EA jettisoned 11% of its workforce. THQ cut its payrolls by 25%. Even mighty Nintendo saw declining sales for six straight months?something that has never happened since the launch of their iconic Wii console in 2006.
Yes, 2009 wasn?t pretty, but the industry firmly believes that the worst is over. Obviously, the gaming industry?s recovery is closely linked to the recovery of the global economy?but there are many other reasons for the boffins to be optimistic about 2010.
First, though console hardware sales are expected to start plateauing as the market becomes saturated, revenues from software are expected to see a significant increase this year. 2009 was a remarkably weak year in terms of true blockbuster game releases (although it was redeemed somewhat by Modern Warfare 2 and New Super Mario Bros towards the end of Q4). The line-up for 2010 has gamers dizzy with anticipation. Each of the major consoles will see a flagship release this year (Super Mario Galaxy 2 for Wii, Halo: Reach for Xbox and God of War 3 for PS3), and with a slew of other AAA titles (Mass Effect 2, Bioshock 2, Gran Turismo 5) backing them up, software revenues this year look set for a dramatic rise. Add the upcoming PC blockbusters Diablo 3 and Starcraft 2, and the continued strong showing of the late releases from 2009, and things begin to look really good.
This is also the year when Sony and Microsoft begin to challenge Nintendo?s monopoly over the motion-controller market. When it introduced the now ubiquitous Wiimote controller back in 2006, Nintendo changed the rules for the gaming industry?exploding into completely new target segments and exponentially growing the size of the videogames market. Sony and Microsoft were caught napping, and ended up fighting for the smaller, more saturated ?hardcore? segment while millions of new gamers gleefully lapped up Wii, which ended up outselling Xbox and PS3 combined.
Now Sony and Microsoft are finally getting into this game, hoping to get a chunk of the huge number of casual gamers?kids, women, families?that Nintendo currently targets. While Sony?s offering looked rather uninspiring, reminding us of a Wiimote clone combined with Sony?s own PS2 eye-toy gadget, Microsoft?s much-hyped Project Natal has the potential to be just as revolutionary and influential as Wii was. When Microsoft demonstrated their ?controller-less? gaming system at E3 last year, people were blown away. Using a true motion capture system, the control scheme allowed gamers to translate their real-life gestures such as punching, kicking, ducking and jumping into the game environment. It also featured voice recognition and face recognition systems, offering gamers a completely new, immersive gaming experience.
If Natal makes a strong debut, backed by a good selection of games that use the technology, it could turbo-charge videogame sales just like Nintendo did with Wii, for very similar reasons. Wii is already the favourite party device in millions of households, and Natal takes the same concept to even greater levels and will theoretically appeal to an ever-wider market than Wii.
Of course, a huge and often ignored reason for Wii?s spectacular success was its price. Wii was launched at $249, while Xbox 360 was priced $399 and PS3 a ridiculous $599. Natal needs to be priced right if it is to revolutionise the industry, as opposed to ending up as an indulgent novelty for the privileged few. Of course, unless it is widely adopted, developers won?t be interested in making games for it, and it will die a natural death. As of now, Microsoft has announced no pricing details for Natal.
Digital distribution platforms such as Valve?s Steam, Microsoft?s Games on Demand and Apple?s App Store have also matured into viable distribution models?ensuring that thousands of titles can continue to sell, without depending on the vagaries of physical retail. This has already opened up the market for independent developers who are too small to take the retail route. Hundreds of such developers putting out quality games translates to millions of dollars in revenue that was previously unavailable to the industry. Digital distribution also helps large publishers keep their catalogues alive, enhancing their revenues significantly from titles that were simply not worth retailing physically. A strong software line-up, the arrival of exciting motion-control systems, and digital distribution becoming mainstream are three chief reasons why the gaming industry is all set to bury the ghosts of 2009 and look forward to 2010.
The author is game designer and gaming journalist based in Mumbai
