The biggest gaming trends of 2012 | VentureBeat

It?s time to look back on the biggest trends for gaming in 2012. These are the macro oceans where the micro companies swam. If you?re guiding a game company, it?s always good to know whether you?re moving with the tide or against it.

In contrast to our article on the biggest game stories of the year, these aren?t individual events affecting a single company. These trends surfaced multiple times during the year with different companies. But the patterns were similar and, when viewed as a group of related events, they signaled something larger happening. We?ll try to explain why these trends mattered.

Mobile becomes the major platform to target

Mobile game companies were once too small to be noticed. But with more than 821 million smartphones and tablets selling this year (according to market researcher Gartner), the mobile game market is too big to ignore now. New devices like the iPad Mini will only make the this market more interesting.

Rovio hit the big time with more than a billion copies of Angry Birds downloaded (it launched Angry Birds Star Wars, pictured at top, this year). Zynga shifted gear in a big way into mobile games, but so far it hasn?t been able to extend its dominance in Facebook games to mobile. With a wide-open market up for grabs, everybody is entering it. That includes entertainment giants such as Disney, which had five No. 1 hits in the past year, as well as established mobile leaders such as Electronic Arts and Gameloft. Joining the party is a raft of new startups. It?s also increasingly common to see established companies such as King.com test their ideas on social networks?and then launch the successes on mobile.

Companies are following the users, with 44 percent of people now playing mobile games. ?Mobile first? is becoming a more common strategy, and 42 percent of game startups are now focused on mobile gaming. In this environment, getting lots of users matters as does monetization strategy. No longer can developers rely on just getting lucky. But getting repeat hits is a great challenge. If your company hasn?t expanded into mobile, you may have a new chief executive officer soon.

Crowdfunding revives midsized developers

A slowdown in venture capital funding (in the wake of Zynga?s market crash) meant that developers had to get money from somewhere. Many of them turned to Kickstarter, the crowdfunding site that allowed them to raise money from fans. The site churned out millions of dollars in funds for midsized developers who couldn?t get money from publishers. These developers ? from Tim Schafer?s Double Fine Productions (Schafer is pictured right) to Brian Fargo?s inXile Entertainment ? had big fan followings that allowed them to tap the crowd.

The amount of funding raised was impressive, with Ouya leading the way at $8.3 million for its Android-based game console. But there were plenty of Kickstarter campaigns that failed. In all of 2011, game companies raised $3.6 million on Kickstarter. In 2012, more than $50 million had been raised as of August. The success of Kickstarter led to new game-focused crowdfunding sites such as Gambitious and Gamesplanet Lab. Chris Roberts tried a hybrid of a Kickstarter campaign and a fundraiser on his own site for Star Citizen. If these crowdfunding methods take off, developers will have more alternatives beyond traditional game publishers when it comes to funding their creative visions. Crowdfunding could disrupt venture capitalists, or at least keep them more honest.

Game studios cut back as the console cycle comes to an end

Retail game sales fell at double-digit percentages compared to the previous year for practically every month of 2012, and that was the case even though 2011 sales weren?t anything to brag about. Nintendo recognized the pattern and launched its Wii U console just in time. But Microsoft and Sony waited, and that has made life tough for a lot of traditional game studios.

Layoffs were the result. Job cuts spread far and wide, hitting companies including Microsoft, Glu Mobile, Foundation 9?s Backbone Entertainment, EA-BioWare, PopCap Games, Trion, Petroglyph, THQ, Sega, and?Blizzard Entertainment.

The game industry has always been about winners and losers. These companies cut their losses and positioned themselves for the road ahead.

Cloud gaming has a mixed year

OnLive carried the flag for cloud gaming for many years. In 2010, it launched a cloud gaming service that?would allow people with low-end computers to play high-end games that were processed in a data center and then streamed as videos to the players? screens. The cloud would allow players to log into their games from anywhere and play as long as they had a good Internet connection. OnLive beat its milestones and surprised the skeptics for a while, but it?hit the wall in August, running out of money. The company changed hands and suffered a big setback.

Fortunately, rival Gaikai managed a great exit, selling out to Sony for $380 million.?By year end, CiiNow revived hopes by raising money from Advanced Micro Devices for its cloud gaming software, aimed at heading off some of the problems that OnLive encountered. Playcast took cloud gaming services into international markets, and Big Fish Games launched a casual cloud gaming service.

Gamification pumps up

Gamification is defined as using game-like mechanics to increase the engagement of nongame mechanics. Market researcher Gartner warned that 80 percent of gamification efforts could fail.?But that rate isn?t so scary considering the percentage of games that fail. But the fact that Gartner cared about gamification at all was a sign of growing awareness.

Many hope that gamification will catch on big time in the enterprise. Consulting firm?Capgemini offered a big endorsement?when it said it would help companies gamify their sales and other processes. Gamification services firm Badgeville scored $25 million in funding as its business took off. As more corporations adopt gamification, the culture of game playing will spread far and wide. It could also take off in fields such as?sales, marketing, web design, fitness, and?education. Gamification is cutting through the hype, and it could gather further momentum in the coming year as long as companies stay focused on real business.

Social casino games spread like wildfire

Social casino games gained traction this year, fueled by investor speculation that such games could benefit from the coming legalization of online gambling in the U.S. There are a lot of barriers to be overcome in this quest, but that didn?t deter the hopeful.

Zynga has the largest social casino game with Zynga Poker, with 31 million monthly active users. But it got a lot of company after the Justice Department unexpectedly broke down one barrier when it ruled a year ago that online gambling could be legal in the U.S. as long as states passed laws permitting it. In January, IGT paid $500 million for Double Down Interactive, a social gaming company with only 70 employees.

After that, dozens of new startups received funding for their social casino and sports-betting games. Analysts report that social casino games will generate?$1.6 billion in revenue?this year, and that will steadily grow over the next several years.?Betable has cut deals?with five social casino game companies to convert their titles into real-money gambling games. The company tracks more than 2,000 social casino games worldwide. Zynga?s stumbles slowed down the enthusiasm, but Facebook embraced the trend too when it allowed Gamesys to launch a real-money gambling Bingo game on Facebook in the United Kingdom.

Zynga?s crash took some of the air out of this bubble, but many are still betting that online gambling will give a big boost to the social casino game companies, and visa versa.?Zynga itself is betting big?on online gambling, and?so is Facebook. We?ll find out next year if this trend has staying power.

Online triple-A games gain critical mass

When League of Legends debuted in 2010, it started a revolution that drew hardcore gamers away from their consoles to play an online battle arena game. It grew and grew, and publisher Riot Games was acquired by China?s Tencent for nearly $400 million. The hardcore online tank-battle game World of Tanks, published by Wargaming, grew by more than 27 million players this year to more than 45 million by the end of 2012. Those titles were helped along by livestreaming on Twitch, and they developed big followings among fans who played the games in eSports tournaments.

That made everybody stand at attention. New hardcore online game companies such as Meteor Entertainment, the publisher of Hawken,
have jumped on the opportunity. More promising hardcore online titles are on the way from companies such as Rumble Entertainment, Crytek, and others. These?are the games that will give $60 console titles a run for their money, and they may prove very disruptive in the long run.

Not all the hardcore titles have caught traction. Microsoft?s Flight simulation game didn?t catch hold as a free-to-play title, and it came crashing down to earth.

MMOs go free to play

Massively multiplayer online games lived off the subscriptions of gamers for years. World of Warcraft soared past 12 million?subscribers in 2011. But in 2012, gamers warmed up to the attractions of free-to-play games, where users play for free?and pay real money for virtual goods. No longer were they willing to pay $10 or $15 a month. One after another, the marquee?MMOs moved to free to play.

These included Dungeons & Dragons, Everquest, Vanguard, Star Trek Online, and others. Blizzard made the first 20?levels of World of Warcraft available as a free-to-play title. And even Star Wars: The Old Republic, developed over six years?at a cost of more than $200 million, was forced to go free to play. World of Warcraft has slipped to 10 million subscribers,?and it may not be long before it too will have to go the same route. The competition in the online world is stiff, and it?remains to be seen if the free-to-play gamers will spend enough to make these games viable. But there?s no turning back.

Third party game publishing migrates to mobile

To increase their chances of getting a hit amid a sea of mobile games, publishers are setting up more third-party services in order to scoop up the talented developers who prefer to work on the outside. As its core casual games market slowed down, Zynga moved fast to set up?third-party publishing?for both social network and mobile games. Its slate of titles included midcore titles such as Row Sham Bow that were outside of Zynga?s core focus.

Third-party alliances were a popular way to make strategic moves. Activision moved into mobile by setting up a third-party mobile game publishing platform operating in a partnership with Flurry.?Red Robot Labs?(founders pictured right) set up a publishing operation based on its successful location-based mobile gaming platform.?Playsino?set up a third-party operation for casino games. TinyCo, Tapjoy, and many others also set up similar platforms.

The pattern reflected the need to diversify beyond a company?s core development teams. The third-party publishing made sense for developers who wanted to stay independent but take advantage of a partner?s distribution reach. This third-party publishing is a great way to play the field and play it safe at the same time.

Gaming goes global

Peter Relan, the chairman of incubator YouWeb and its portfolio company CrowdStar,?argued?that companies could reach billion users by leveraging social, mobile, and international game markets. Many other game leaders realized that, and 2012 was the year when they expanded far and wide beyond the usual international markets. Gaming took off in Brazil, Russia, China, and India. But the market in Turkey and the Middle East gave rise to strong companies such as?Peak Games.

Japan?s Gree and DeNA expanded into the West, spending heavily on acquisitions. By the end of the third quarter, DeNA was generating $627 million in revenue per quarter, so it had lots of cash to throw around. Tencent, the huge social media company in China, expanded into the West by taking a stake in Epic Games, the creator of the Gears of War console series. And likewise, industry leaders like?Electronic Arts?took their games into China via relations with Tencent.

Companies that go global have an extra leg to stand on when times get tough. Zynga failed in Japan. Had it succeeded, it might have withstood the financial storm that struck when its core Facebook market slowed.

Source: http://venturebeat.com/2012/12/28/the-biggest-gaming-trends-of-2012/

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