The Video Game Industry is Dying!!!

[Bodhesatva]

This isn't literally about the games industry as a whole dying, it's about the stagnation or consolidation of the "traditional" games industry as social and mobile gaming explode around it.

That is the future of gaming: social and mobile gaming. Browser games, the iPhone, facebook games (farmville has nearly 50 million users!), and of course, the DS and Wii. That's where the growth is. Zynga, the market leader in these sectors on the PC, has a market capitalization of 1 billion dollars, and has only been in existance for 10 years: this is an extremely rapid area of growth.

So it isn't just that "Traditional" games are consolidating, it's that other styles of games are exploding in popularity around them. Want another example? Consider this: let's talk about the growth in "Traditional" vs. "non traditional" platform sales. By "traditional," I mean the systems which have been set up to sell the big blockbusters like Final Fantasy, Halo, and Metal Gear Solid.

Compare generations, now, last generation to this one:

Traditional: PS2, GC, Xbox (~200M units sold)
Nontraditional: GBA (~80M units sold)

Traditional: 360, PS3 (~70M units sold)
Nontraditional: iPhone, DS, Wii, (~250M units sold)

Now, I'm sure some will quibble that the Wii is a "traditional" system -- and I'd point out that third parties, the focus of this article, clearly don't agree. They sure haven't treated it like one, at least. And I'm being nice here by not discussing the PC: the PC, 10 years ago, was ruled by companies like Epic, Bioware, and Valve. Valve is still quite healthy, but most of those other "AAA blockbuster" companies are far more focused on the 360 now, with browser/facebook games making up a far larger portion of the PC market than it was before. In other words, the PC is casual-izing, too.

But as a general approximation, I think it shows how things have shifted. Here, I'll give it a more precise definition: last generation, home consoles with a traditional controller and advanced graphics made up nearly 75% of the games market, as we know it. This generation, those systems are going to make up ~25%.

"Traditional" games aren't dying, but they're consolidating -- while "casual" games of all types explode around them.