The Money Game

Change in industry is normal, and expected. It’s also sometimes difficult to digest. I read the other day an opinion piece in the New York Times that described the economy, firms, and jobs with the metaphor of a vertical parking structure, wherein the seats in the cars are jobs, and the cars come and leave over time, reflecting the changing nature of most industries. When new technologies are rolled out, as with the printing press and other automation, or perhaps there is an external motivating force, such as Craigslist competing with newspapers for classified ad space, large changes occur.

For example, the digital gaming industry has mostly trended from the difficult, graphically simple arcade games of the 80’s to ones that are more programmatically complex, yet increasingly accessible to casual players, migrated from a physical to cloud-based, downloadable format, a one-time payment model to one of repeated transactions, and a single screen, offline experience to an environment where ads can be targeted to players and their contacts across devices.

Proxy wars aren’t just for governments and corporations. People pay to play in a lot of mobile games, and often need to spend ever more to keep up. Games have changed so much that it’s now possible to infuse a game with money, and let it basically play itself. This is where the model just totally loses me as a customer – but apparently many others feel differently as digital gaming generated US $61 billion in 2015, an increasing percentage of which comes from these sorts of games.

An example is ‘Mobile Strike’ where you pay real money to upgrade fighting units, and destroy those of other players. Winning is directly correlated with how much you spend on the game. In the past, consumers paid for everything up front, and publishers had to fix any bugs that existed pre-release as there was no chance to offer patches, updates, or free downloadable content for physical software cartridges or discs, running on hardware that lacked internet connectivity or was hampered by slow data speeds.

In the era of fast data, repeating transactions, and permissions which allow software companies to collect myriad data on players’ behavior, it has enabled targeted, programmatic ad services to get in on the game. While this could be good news for bottom lines, I think that it could be problematic for the game industry as a whole, or at the very least for my and many others interest in the future of the medium.

One company I’ll point to is Valve, in Bellevue, Washington. They have created several revered titles including the Half-Life, Portal, Counter-Strike, and DOTA series of games. However, they haven’t had a new AAA release in a few years, as they haven’t needed to. Micro-transactions for games they have already released, and the 30% cut they take of game sales on their popular Steam service have generated more than enough revenue for them.

While I don’t begrudge them that, I and many others worry that the pursuit of money already has, and will continue to erode the incentives companies have to make immersive, ambitious experiences in the first place. If the winds change and consumers no longer find as much value from multi-transactional gaming, it could make for a worse perception of the gaming industry as a whole and less choice and variety for players.

Virtual reality is a new exciting frontier in gaming in this day and age. With it comes a lot of new opportunity to advertise – Facebook owns Oculus, for instance. What if they couple Facebook ad data with what you see in the headset in a way that disturbs your immersion? It’s up to the industry to show some restraint here, and I hope they don’t go so far as to introduce more low energy, lame advertising than already exists to gaming. Otherwise, the best of user experiences could be overshadowed by unrelenting, tonedeaf messaging.

Industries are obligated to change, but we shouldn’t rush to grow and lose sight of good health in the process. I hope that riches for developers can go hand-in-hand with richness of user experience.

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