Casual Connect: Wildtangent CEO On The Fall Of Console Gaming

Author: by Jen Steele, Michael Zenke

At last week's Casual Connect event in Seattle, Wildtangent CEO Alex St. John offered attendees a vision of what the games industry would look like in some 12 years time. Gaming in the year 2020 was the topic at hand, and the evolution of current trends seemed to be the main focus of St. John's talk. As has become his recent mantra, the CEO began with what might be his boldest declaration: that by 2020 the concept of console gaming will be extinct. In St. John's mind this is the last generation of successful console systems. The cost involved in creating these systems is simply too great, in the executive's mind, and even the current (relatively successful) generation won't recover the initial investment required to get it going. Moreover, St. John sees the current 'graphics arms race' as coming to an end. The production value of a game will soon be the leading differentiator, rather than simply how it looks. Most interestingly, the CEO sees the console market falling as a direct result of the online gaming market. Someday, he predicts, the shelves and shelves of console games at retail brick-and-mortar stores will be replaced by a rack of the online currency cards used to fund in-game transactions in massively multiplayer games. In short, he believes the gaming marketplace will be dominated by persistent online worlds. While these types of games are gaining popularity across the globe, St. John believes that the growing influence of nations such as India, China, and Korea to be the real causative factor. The US gaming market is, in his worlds "stagnant", with money "just shifting around." The gaming business of tomorrow, then, is online and free to play. If it's genuinely compelling content, if it truly entertains a playerbase, the content will be consumed organically and a revenue stream will present itself. According to St. John, this method is "eating" the old business model alive. Said the CEO, “As soon as you hook some of these younger demographics in an MMO, they won’t buy a box game again." The result is already visible, as traditional media companies scramble to join the Blizzards and Turbines of the world in online world publishing. Quipped St. John, "Disney wouldn’t have invested 200 million to build Club Penguin, but they paid 700 million like little bitches.” Growing more serious, the executive reiterated: “They will buy them or die. If you want to get rich, learn how to make these community games.” Overall, this kind of marketplace is going to lead developers to stop constantly ratcheting up the production value on games. When a good game can be made for not very much money, the incentive simply isn't there to have drastic graphics capabilities. This will ultimately lead to a reversal of the current industry doomsaying, with the dominance of PC gaming. In St. John's mind, the PC is a clearly superior gaming device - especially since everyone has one. The prevailing model will be to, again, make the games free to play and supported by ads or modest subscription fees. Free to play titles will get players interested, but the biggest boon to the model may be the fact that it end-runs around software piracy. Advertising and microtransactions will then ultimately be the revenue streams of future games. St. John closed on that note, clarifying that these two types of payment work hand-in-hand with how customers now want to access their content. Ala carte, for free, online, and on their own terms.