Genre maturity leads to market consolidation
In past articles I’ve discussed two key concepts. The first is genre addiction and the second is the genre life cycle. These both have major market implications for both individual game developers, but also for the market as a whole.
To briefly recap, genre addiction is the process by which:
Players become addicted to a specific set of game mechanics.
This group of players has a strong homogenous preference for this genre of games, creating a well defined, easily serviceable market segment.
Game developers who release games within a genre with a standardized set of play mechanics are most likely to capture the largest percentage of the pre-existing market.
Over time, the game mechanics defining the genre becomes rigidly defined, the tastes of the genre addicts become highly sophisticated and innovation within the genre is generally punished by the market place.
Genre life cycle is the concept that game genres go through distinct stages of market status as they mature:
Introduction: A new and addictive set of game mechanics are created.
Growth: The game mechanics are experimented with and genre addiction begins to spread.
Maturity: The game mechanics are standardized and genre addiction forms a strong market force. Product differentiation occurs primarily through higher layer design elements like plot, license, etc.
Decline: The market consolidates around the winners of the king-of-the-genre battles that occurred during the Maturity phase. New games genres begin stealing away the customer base. With less financial reward, less games are released.
Niche: A population of hardcore genre addicts provides both the development resources and audience for the continued development of games in the genre. Quality decreases.
What we see here is the consolidation of game designs over the life cycle of the genre. Early examples within a genre tend to have a wildly diverse spectrum of game mechanics that appeal to a broader spectrum of players. As the genre matures, the game mechanics become more standardized and the needs of the genre addicts more homogenized. As the market segment consolidates and standardizes, the majority of the players are well served. They get more polished games that have greater depth. Who could argue that a tightly polished game like Warcraft is a bad thing?
How maturity reduces the number of total game players
Goodbye people on the fringes: The people on the fringes, however, are left out. In the evolution of the RTS genre, there was an interesting offshoot in the form of the Ground Control games. These sported an interesting 3D perspective that was never truly adopted by the mainstream RTS producers. Most players within the identifiable RTS market segment did not enjoy these games and so it was not in the best interest of the game developers to include the innovative features in their designs.
However, some players enjoyed these titles quite a lot. As the mechanics for RTS games become highly standardized, these fringe players were alienated by games in the mature genre. A 2D Warcraft title just didn’t provide the same rewards that this fringe group was looking for.
Some of those gamers left gaming. It may take being alienated from several genres, but eventually a few decided that there were better activities to spend their time on. The market was simply not serving their needs. This shrinks the market.
Goodbye semi-hardcore: The mainstream group, however, fares only a little better. When you recycle the same standardized game mechanics, you put players at severe risk of burnout on a genre. There are only so many FPS many people can play before they don’t want to play them any more. This is less of a problem for the super hardcore players. However, it is a substantial problem for the less hardcore players.
As the less hardcore players burn out on the game mechanics of their favorite genres, they too are at risk of leaving the game market. The result is a steady erosion of the genre’s population.
What is left is a very peculiar group of highly purified hardcore players. They demand rigorous standardization of game mechanics and have highly refined criteria for judging the quality of their titles. With each generation of titles in the genre, they weed out a few more of the weaker players.
This is a completely self-supporting process with strong social forces at work. Players form communities around their hardcore nature. They happily eject those who do not fit the ideal player mold. They defend the validity of their lifestyle with a primitive tribal passion.
There is no internal force within a genre lifecycle that can break this cycle. Only external forces can do the trick. The question is, who would want to break this cycle and who wants to maintain it?
Who genre maturation is good for
Genre maturation is great for the very small minority of AAA developers that can serve the hardcore market. They release titles known as genre kings that are able to address the needs of a large percentage of an existing, well defined segment of genre addicts. Genre kings dominate a particular genre with impressive financial results. The amount of money genre kings such as Halo 2, Half Life, Warcraft, Grand Turismo and other rake in is an inspiration to both developers, gamers and publishers everywhere.
Hardcore genre addicts easily pay for themselves. On average they are willing to spend substantially more on games than the casual or the fringe gamer. When a genre becomes standardized, there is literally an explosion of revenue that comes from successfully tapping into a uniform set of needs. This scalability is a basic attribute of software and is a major mechanic behind hit making in the game industry.
As long as new genres are being created and money gained from better capturing homogenous segments genre addicts is high, the industry as a whole grows with a few fat king of the genre companies taking in the majority of the money.
Who consolidation is bad for
However, when the majority of money and effort is spent on capturing existing markets and not enough is spent on seeding new genres, the natural erosion of less hardcore players begins to decrease the overall market size.
It is easy to ignore this trend. Overall player numbers may decrease in certain genres, but remember that hardcore players spend more and flock to specific games in great numbers. So total revenues keep going up, and the revenues of hit titles keep going up. It seems silly to shout that the sky is falling when there are so many examples of over-the-top success. This is the current state of the American game market.
Only after the trend has been going on for some time does the erosion become too much to ignore. The substantial decreases in the overall revenue of the Japanese market place over the last five years provided a major warning signal. You could easily argue that similar erosion has occurred in the PC market.
People who are less likely to care:
Sony and Microsoft have built strong brands around servicing the hardcore players of existing genres. To say that the sky is falling shows a lack of faith in the hardcore market - that could be very damaging.
Major genre king developers like Blizzard, Valve, Epic and Square. Their bread is buttered. They own the mature genres and will milk them for many years to come.
People who are more likely to care
Companies that serve a diverse user bases: Oddly enough, both EA and Nintendo are in this group. They are broadly diversified such that major trends in industry directly affect their bottom line. Sony is in a bit of a pickle since they fit this definition as well. (Hence they’ll release the Eye Toy, but keep their main controller for the PS/3 as standard as humanly possible)
Companies that value brands over genres: People often look at Nintendo’s releases of a half dozen Mario games a year and assume that they are all clones. In fact, they are typically radically different games across a wide variety of genres. Nintendo gains their value from the Mario brand, not ownership of a specific genre. Brand-based companies rely on the creation of new genres since they can take that brand into the genre for a low risk profit opportunity.
The state of the MMORPG market is currently a very matured market. Sure, when you look at most MMORPG’s their graphics, sound, and gameplay aren’t really that bad. But the problem is that there’s nothing special about any of them. I haven’t seen a feature in an MMORPG that hasn’t been used before since MMORPG’s started. Customizable classes? Those have been there for a long time and they’re not even as ‘customizable’ as they’re implying. The first MMORPG was so customizable that anyone could combine any of the skills or stats they wanted to whether those skills were helpful like magery or completely useless like begging. Races? That’s been there since at least the NES days; it’s nothing new. It’s the same old stuff over and over again just rewritten to ‘look’ different.