Former Sony executive Chris Deering recently stated at the Edinburgh Interactive Festival that only three in ten games will ever make enough money to break even, much less see a profit.
Kicking off this week’s Festival, Deering delivered his keynote and served up some juicy predictions for the gaming industry. Based on his findings and correlations drawn from Screen Digest and other industry sources, Deering expects that by 2011, there will be 2.5 Bn potential gamers worldwide. Traditional gaming platforms such as the DS, Wii and PS3 are expected to have a base of 500m by 2011, with alternative mobile platforms and gaming PCs splitting the remains with a billion users each.
Looking at the numbers, Deering warned that “traditional revenue sources will not be sufficient to fund games development” and as the market grows, studios must seek alternative revenue sources now in order to avoid becoming obsolete.
Citing the growth of new players to the market; mobile network carriers, cable, satellite, and DSL providers all working towards a ‘competitive array’, this competition is only going to get stiffer.
“Something is going to have to be there to make up the difference,” he said, citing a “creative use of hybrid online/offline advertising revenue models” as one key way to succeed. “These business models must be explored.”
Deering went on to cover areas and trends that he believes will sustain a 2.5bn person market. On the development end these include WiFi, lighting and voice recognition, massive game worlds, cinema-real presentations. On the player end; microtransactions and in game advertising topped Deerings list. He also covered user generated and user enhanced games.
Perhaps planting a new seed, Deering also went on to unfold his vision of another potential revenue source; gaming. “Gambling will become a source of development funding,” said Deering. “Perhaps not directly, but this area can provide some sources of income which eventually be directed back to the developer.”
Prior to his appointment as president of Sony Europe, Deering served as the head of Sony Computer Entertainment Europe during the launch of the original PlayStation, PlayStation 2 and PSP, which gave him significant knowledge of Sony’s internal and external development strategies. He resigned from Sony in 2005.
Tags: business models, Chris Deering, dsl providers, Edinburgh, gambling, game worlds, gaming pcs, gaming platforms, massive game, microtransactions, mobile platforms, network carriers, PlayStation, revenue models, revenue source, revenue sources, sony executive, traditional gaming, WiFi, Wii
