Market Evolution

As a specific market ages, it grows and changes based on the slow but inevitable increases in the amount and variety of content it consumes. This concept is fairly straight forward: any individual within a given market will, over time, learn what they like and dislike and change their consumer behavior accordingly. In response, suppliers recognize these shifts in consumer behavior and address them as they see fit. However, when does a large market mature to the point that it begins to split into 2 or more different markets based on different trajectories in what its consumers are demanding? With the emergence of gaming as a standard part of popular culture and the past decade’s large influx in new gamers, we are in the beginnings of seeing history repeat itself as these new consumers begin to understand what they want out of games, potentially upsetting suppliers who can’t keep up with this change.

As mentioned earlier, the concept of a market aging and evolving is a very straight forward one and the game industry is rife with examples of this behavior. At their most basic, these market evolutions take the form of evolving genres. A game will get released that, even if not a completely original work, draws in an audience that will treat the game and its variety of features as completely new. Overtime, this game will continue to grow a larger and larger audience as it begins to age and eventually stagnate. What we are left with is a large group of consumers who now have a basic vocabulary and understanding of certain mechanics split between those that are either completely satisfied and those that are left with a small taste of what they truly want. Those that are completely satisfied will do one of two things: continue playing that particular game until they eventually become burned out or leave completely since their particular desire has been satisfied for the time being. However, things get much more interesting with those that were left with but a taste of what they truly want.

It is from this group that we tend to see extremely heated and passionate debates about what the original game did right and what it did wrong. As with anything that comes down to a matter of taste, there will never be a true consensus on what the game did right or wrong. However, we now have new consumer markets that are hungry for a product that doesn’t exist yet. This will drive suppliers to begin producing new games based off the original in an attempt to capitalize on and cater to these new markets by changing what was felt lacking. It is from the forming and aging of these markets that the game industry as a whole creates, refines, and grows genres.

However, there is an extremely important detail about all of this: growth of genres based on aging markets tends to create more complex systems. Because you are dealing with catering to a market that felt something lacking in the original game, the response from suppliers to this problem will almost always correctly be to add what was missing. The market had the basic game, but they hunger for more. Better stories, better graphics, more options to play the game with others; the amount of ways they feel the game should grow are near endless. The point is that something was lacking that left them not 100% satisfied as consumers.

Now, the game industry has been dealing with these market growths for years and it is often because of this aging process that we have the more traditional core gamer base. We have many fan bases that have been around for decades that know and are experienced with what they like, whether that be JRPGs, FPS, RTS, Shoot’em’up games, etc. But, overtime, these market bases evolved smaller and smaller as they aged and lost people along the way who finally found that one game that left them 100% satisfied and nothing new can compare. This drove many suppliers to seek new consumers and, boy, did they strike gold. Between Nintendo’s marketing push behind the DS and Wii to Apple making smart phones a near standard of living in certain countries; more people than ever before now play and enjoy games. Now, we have tons of new markets filled with people learning what they like about games.

However, these markets are not going to stay young forever. People are already learning what they like and we are about to see the rise of a new, more traditional core gamer. We see sequels to games like Farmville and Angry Birds and already see debates on if these evolutions were the right or wrong thing to do by the market that consumes them. These markets will encounter the exact same things that the older more traditional market has seen during the rise of games like Doom and Street Fighter.

Soon, companies targeting these new markets will predict where consumer tastes are going next. Will a deeper craving for complexity and strategy be conducive to newer economy models like freemium? Will we see a potential merging of the older more traditional core gamer market with that of these newer markets when common ground is found regarding the level of desired complexity? Will the potential shrinking of off-shoot markets be large enough to even warrant still going after them? All I can say is that things are about to get a lot more interesting and am personally excited to see what new types of games and genres these aging markets will bring about.