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Binary is back in the video game industry – not for coding, but for development strategy, with the emphasis on super hits or indie games, with not much in between. Launch stores or subscription services on any of your consoles right now, and you’ll find the latest triple-A pricing menu gracing the homepage or independent critical darlings that have found their niche audience, but not much in between. An industry that grossed nearly $ 140 billion in 2020 alone has overlooked one of its most important markets: the middle.
A wave of mid-market games often follows the launch of a new console, and now we’re at the start of a new wave that represents a $ 42 billion opportunity. (For the purposes of my dissertation here, I’m referring to games that cost $ 9- $ 35.) From 2008 to 2012, iOS became mainstream and triple-A tentpole games reigned supreme. Meanwhile, the “niche” mid-market faded from retail stores as direct downloads to consoles and Steam took hold. Since 2012, free-to-play has appeared on mobile with the “niche” or “genre” titles that constituted the middle market, and the development of HD games has become excessively expensive.
The huge gaming audience has established diverse tastes as evidenced by the success of Steam and the introduction of the Epic Games Store. Bigger publishers don’t see enough shareholder return to justify lower budgets and potentially lower revenues, even when a title is a hit. India cannot afford to focus on its own main platform and often lacks enough shipping capital, know-how and experience to know how to make the investments necessary to successfully release their title.
Who will succeed in this category? We already have proof that the middle market can be very successful, like Devolver, Maximum, Deep Silver, THQ Nordic, Jagex, etc. The best question might be which development strategy will lead to disproportionate success – and I believe the answer is cross play securities. Among Us is a great example of games with intermediate prizes, enhanced by cross play.
Not only is the middle market the most strategically sound place to invest, it also represents one of the most creative and fertile landscapes in the industry. Often, mid-market development teams are smaller, with 20 to 40 strong employees, working with budgets that are only a fraction of the budget of a triple-A title.
Successful games require a massive investment of time and money, creating anxious publishers who need huge returns with each stock to appease shareholder expectations. On the other end of the spectrum, there are the independents who have little funding – and more often than not modest returns – with creators who prioritize art over wide (or sometimes even narrow) appeal. Between the bloated environment of megahits and independent arthouse, there is a slew of great games waiting to be created … and played, right in the middle.
Targeting the mid-market opens up a whole new world for publishers, allowing them to focus on passionate fans of genres residing outside the triple-A bell curve. Double-A games don’t have to be everyone’s favorite. world and can instead focus specifically on dedicated audiences. By avoiding the successful publishing model, a mid-market publisher can create original, distinctive and creative games while managing consistent profits.
At the same time, middle market titles can and often do become huge hits. Battle royale doesn’t come from a triple-A game. Instead, it came from modders like Brendan Greene or Dean Hall who had the creative freedom to paint outside the lines and create a gripping, gripping game without the creatively oppressive requirement to appeal to massive audiences. When genuine creativity is released from the obligation to generate massive financial returns, this is often when the real magic happens.
While much of what I have said so far has been true for years, there are two factors that make the middle market particularly lucrative to this moment. First, the excitement over the launch of a new generation of consoles and the rise of PC games only exacerbates the booming publications, leaving an even more pronounced gap between triple-A games and games. independent.
But more importantly, the emergence of crossplay technology makes it possible to discover significantly larger audiences. The math is simple: Games that let people play with their friends on any platform will have a larger built-in audience than those that don’t. Perhaps more importantly, cross-connectivity enables broader, more frequent, and more authentic human connections, which are especially important during this time of pandemic isolation.
Based on this, it is clear that cross play is the greatest force multiplier coming into the video game industry from the second controller.
So far, enabling crossplay has been limited to big budget titles, but its potency will be even more pronounced as it enters the mid-market. Multiplayer games have substantial player bases, which triple-A games can easily generate. But for small games, this player base is much more difficult to acquire, especially when players are spread across up to four separate platforms. By combining the player bases of all of these platforms and implementing cross-play technology early on in a title’s lifecycle, many more games will reach that tipping point of sustainability and profit.
The ability to play with friends on all consoles created a real need and expectation among gamers, which increased user engagement and subsequently resulted in a greater impact on in-game monetization. Take Epic Games : With its implementation of cross-play in Fortnite, the developer and publisher found that the average monthly income per user who played their battle royale game was 365% higher than non-gamers. So what does all of this mean? Well, just that greater engagement with cross play gives developers the opportunity and the freedom to stay creative and keep releasing new content for gamers to enjoy on a regular basis.
Audiences are going to seek even more personal and diverse content as we deepen this generation of consoles, and the current $ 42 billion mid-market opportunity will only grow. By offering more distinct titles, publishers targeting the middle market will be able to grab the attention of a triple A audience while avoiding the same risks assumed by big-budget developers. Add cross-play features to the mix and you’ve got the best of both worlds: creative and engaging mid-budget games that draw huge potential audiences and generate outsized financial returns.
Jake Hawley is the Founder and CEO of TLM Partners Inc., a technology and executive outsourcing firm whose clients include 2K Games, EA, Microsoft, Rockstar Games, Skydance, Sony, Starbreeze, Nomadic VR, RedPill VR and Warner Bros.
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