Channels are the future

Three years ago, when the buzz was all about the next iteration of home gaming consoles, I wrote that game consoles as we know them are going the way of the dodo. It just doesn’t make sense trying to create cutting edge hardware and trying to divine what features will carry that piece of hardware for the next unknown number of years. Given the rapid pace of change in this industry, and the multi millions needed, console development was simply not in the cards for 2010.

Here we are, three years on and the trends have played out pretty much as expected. Consoles are now on track to appear around 2014, but will there be anything beyond that? The question isn’t if consoles are moving toward extinction, the question is when. As of now we have four device players in the game space; Sony, Microsoft, Apple, Google. Yes, there is Steam, Facebook, etc, etc, but they run on a device controlled by one of the mention companies so let’s set them aside for the time being.

 I find the road blocks between me and the games I want to play to be a nuisance. “Sorry, that’s an (xbox, ps3, iOS) exclusive.” Why do I have to choose? Do you want to choose? Of course not! People are always looking for a way to make life easier and remove the hassle of any given action. So, if hurtles to experiencing a game are a nuisance, then eliminating that nuisance would be a big win for the end user, and it would be easier and cheaper for developers.

The answer is to circumvent these roadblocks. The answer is dedicated channels.

A dedicated channel gives everyone, on any device I choose, access to the content of the provider. Use Netflix as the example. If I go to my PS3, there is a Netflix channel. I look at my phone, and I have a Netflix channel there too so I can continue watching my program wherever I might be. I have a Netflix shortcut on my laptop. Now, imagine if that that was the EA logo instead (or Ubi, or Nexon, or Sega). As a user, I have a degree of faith in that icon already.

As a publisher, I have tighter grasp of my marketing budget and I can cater the landing page to the device being used to visit my channel. I have little concern for the devices coming down the pipe. I also needn’t share my profits with anyone. Well, eventually at least. For the foreseeable future, I want to put that channel on the new crop of devices, meaning that the Apple, Sony, and Microsoft will still get their cut. However, how long will that grip hold? The input device is still a major factor to deal with, but if that can become a moot point, what do the hardware manufacturers offer?

With the announcement of the Microsoft Surface last week, it really dawned on me that Channels are the way of the future. Sure, the Windows 8 version will be touchpad like, but it’s also a PC and the PC world is open. If Microsoft could potentially have an xbox channel on the surface, why couldn’t any publisher have a channel? The cost and benefit argument of creating my own channel would far outweigh the cost and benefit of being funneled through Microsoft. The same can be said for Sony. Even Apple starts to become a questionable destination. Sure, they are a massive force at the moment, but windows 8 allows me to just create a channel and boom, all revenue is mine why would I want to give anything to Apple? Then, as other devices become the source for better content, the allure of the closed Apple system could begin to tarnish in the mind of the consumer.

This isn’t simply going to be a games industry phenomenon. IF I’m HBO, why do I want to give cable and satellite providers a piece of my pie? As televisions become more capable, why would I not simply put a direct channel to my content on their home screen? Indeed, I want that HBO logo on the home screen of everything from phones to refrigerators!

This is what users have wanted for years. They want to choose the content they want without the extraneous content that justifies the excess cost of service.

So what if I actually make stuff? What if I am someone like Sony, in that I make televisions, PC’s, etc. Being we want things easier, the remote is a beloved thing. The tablet and smartphone is the remote control of the future. The ability to be controlled through an app will be a must for home entertainment soon. So, if I buy a Sony TV I can then maybe I get exclusive access to the Sony channel of content. Is it worth it for Sony? Maybe.

So, how far off is this change? For whatever reason, five years seems to be the cycle for big changes in the games industry. The last big revolution was 2009, when we saw Facebook gaming really explode. 2014 will bring the new console offerings, which will likely resemble what we have now but with features that will start to leverage cloud gaming. Not long after that, the transition to channels will begin; Maybe 2015 as a new method of delivery from publishers on these new systems. Then, not long after that, the need for console style hardware will quickly fade as people begin to ask why they need such a device.

But what about the little guy?

If there is one area where the independent or small developer suffers, it’s in the area of marketing. Marketing is a key element to any small business success, and an independently developed game is just that. It’s a small business. Independent developers either neglect marketing their games, or are simply unable to market them effectively. That leaves success to faith on the word or mouth. So, the independent will need to get on some type of channel as well. A Kongregate channel maybe?

So, how would the money work? Well, for an independent channel, I see them offering the channel for free and then taking a percentage of sales of the games they represent, leaving financial models for the individual developers to deal with. Would the big publishers do the same? I think so. Without the middle men to share profits with, the cost of each individual game will drop and they will leverage micro transactions even more.

I could be completely wrong. This is black magic fortune telling at best. I’m just conveying what I see as the obvious extension of current trends. Time will tell.