Scott Steinberg: The Rules of the Game

The funny part about being a video game consultant and analyst is being repeatedly asked which industry trends are valid and of lasting concern. The irony being, of course, that from social to mobile, free to play to cloud computing, the answer is essentially all - just look at how they're reshaping the industry with each passing day. Sales of physical games may be down 9 per cent to $5.06 billion as of 2010 according to the NPD Group.

But as the six-figure success of titles like Frictional Games' Amnesia, CityVille's 100 million-strong players (garnered in just under 40 days) and both Steam and Xbox Live Arcade's continued growth prove, the future is now. Digital distribution is real. Microtransactions are real. Apps, indie titles and streaming games on smartphones, TVs and Blu-ray players? All are here, and becoming increasingly capable of sustaining growing business concerns. (Trends like widespread set-top 3D gaming and static in-game ads - not so much.)

Needless to say, all present consumers with a level of choice, affordability and entertainment options never before witnessed, and which add new levels of complexity to the equation for prospective games industry titans. To wit, it's no longer enough to compete with market leaders - you're also competing for a dwindling share of users' interest and spare time.

Every industry insider worth their weight in PlayStation Move wand controllers is well aware of this, naturally. But what's surprising is that so few have yet to wrap their heads, let alone day-to-day business operations, around what the paradigm shift means from a functional perspective. Not only must games now be designed to play to platforms' individual strengths (ie social sharing, constant connectivity, and the ability to serve bite-sized in-game purchases on-demand) and titles' core features instantly communicable in under five seconds.

Designers, developers, artists and programmers must all learn to think like marketers, and consider how every game feature can monetize, extend a title's life and promote its continued relevance from before day one. Today, it isn't enough simply to scrap it out with best-in-class products such as Call of Duty: Black Ops, World of Warcraft: Cataclysm and Red Dead Redemption. With more players committing a larger share of both their budget and off-hours to top-tier titles, and so many free or cost-conscious alternatives (available any time from a multitude of gadgets) steadily eroding player loyalty, adding continued value and excuses to stay top of mind are imperative.

Even the best-known brands must now face the reality of having to operate as services, not products that begin, not end with what's in the box, and offer regular content expansion, constant gameplay iteration and/or user-created content. Each new game improvement not only adds incremental value and builds user trust. It also serves as a fresh player temptation, PR/marketing hook and - especially in the case of social network or smartphone games which issue regular updates - reminder why it's worth giving your game a glance.