While Leipzig might be a brand new town for David Perry, video games, development, and the industry are not.  Perry, a 27 year veteran of the gaming industry lead the panel at the Games Convention Developers Conference yesterday.  His topics ranged from personal history (the PS9 spoof was outstanding), statistics on the current status quo, and important players to look at in developing markets in China, Korea, and India.

Perry’s ‘time capsule’ intro included insight to Perry’s first programming tool – a Sinclair ZX81 with 1KB of memory, right on through to today’s complex media.  He covered the landscape from old media (cassettes) to new (Blu-ray, DVD, etc.) and on to developing storage media (hard drives).  Perry firmly believes that the industry will continue to push towards a global digital distribution outlet, with hard drives being the main storage media.  He did however also highlight another possible step after storage: virtual media.  Perry envisions a world where full games and even processing power wouldn’t be sitting on your desktop or console, but rather a cloud computing scenario where games would be broadcast across the internet.  He also admits that there are problems with this theory, and that today’s internet would maxed and taxed by this scenario, and fast and strong broadband is needed.

Exploring expanding game markets, Perry launched first into China, which has seen 65.9% overall industry growth over the past year.  Perry highlighted China’s must successful publisher Shanda as a benchmark as to where companies in that market are headed.  While Perry was visiting the Shanda offices, he shared a note that lots of team members were playing western videogames in an effort to match the quality seen herein.  While Chinese and Korean titles may not match western quality, they are certainly doing their homework, and should be on par shortly.

Creativity and risk are two key factors that allow eastern publishers to florish.  The free-to-play MMO Dance! Introduced new social systems by simply adding a chat feature, along with reasons for people to keep talking – embarrassing scenarios where players are forced to dance in strange costumes and marriage systems that allow players to look each other up and play together.  While these social additions sport high numbers, Stardoll (19 million members) and Zynga (55 million members), Perry is quick to point out that they lack one crucial component: the viral factor.

Using facebook as a testing ground, Perry highlighted his new Facebook Create a potato app as a viral experiement.  He says that he hopes to identify nodes within the network that will help spread the word about the game (and future viral projects).  He also spoke to Blizzards recent testing and entry into the viral market with their aggressive ‘recruit a friend – get an exclusive mount’ program.  Perry sees this as a failure waiting to happen.

Heading into the final stretch of his presentation, Perry made it clear : Free-to-play models are the future.  This shift will be possible in part by something he calls the “money wall” – the tipping point at which certain consumers will no longer be willing to pay for entertainment.  With consoles ranking in huge entry fees, and the average game cost of $59.99, this “money wall” is already keeping a large portion of ‘potential’ gamers out of the mix.

Perry left us with two scenarios regarding the outbreak of free-to-play models in the western market.  1. A publisher decides to release a major tier 1 game (think Halo, WoW, StarCraft) as a free to play, or…2. The Korean, Indian, of Chinese market begins producing games on the level of their Japanese neighbors like Miyamoto of Hojima, creators who inevitably will realease their games under the free-to-play model which is already strongly in place in the region.  Either of these events would set the ball in motion, says Perry.

While Perry’s presentation went well over the 1 hour time he was given, he managed to present listeners with an insightful view of the gaming industry.  Certainly there will always be those that disagree and see it in 22 different ways, but a growing number of industry experts are echoing, and adding to, Perry’s vision of a free-to-play global economy.  fatfoogoo is preparing for this future today.  What are you doing?