The story of how our phones became infiltrated with Angry Birds and our social networks by pleas for help down on the farm, is also the story of a creative and cultural industry successfully navigating some of the challenges raised by social media and the advent of free content, according to a new book by Maynooth University researcher Dr Aphra Kerr. Global Games documents the last decade in the industry, which has seen business models that have existed for decades undermined by free online content.
Up until ten years ago, the dominant market strategy of the games industry resembled that of books, music, and films. Independent development companies wanted to secure a publishing deal with a major international publisher and produce a final, physical product on CD. The publisher promoted and distributed the work and the developer would receive royalties once expenses had been recouped.
The highly networked and connected world which has developed in the last decade saw the decline in this model, as consumers became reticent to pay for content. The challenges created by the decline have been well documented with the global music industry seeing as 25% drop in revenues between 2005 – 2015 as a result of a 68% drop in physical sales over that period. However, the games industry responded to the growth and spread of the internet by developing a highly effective free-to-play model, which has not only shown that free content can be sustainable, but can lead to significant growth. The industry was reported to be worth more than €90 billion globally in 2016.
The general characteristics of this model is a reliance on indirect revenue streams, including advertising, product placement, and the use of player data. To this extent the model mirrors that of social media; however, the combination of indirect with direct revenues, mostly from micro-transactions, constitute a novelty that has emerged in the games industry. The facility to gather player data to both inform targeted advertising and, significantly, customise game content to improve monetisation is another novel slant.
Dr Kerr observes: “Revenue and content development strategies based on player generated data were developed for casual games linked into social networks and later for mobile games downloaded as applications or run in a browser. Player generated data provides a partial understanding of the game player, and its use to influence game-playing experience, while not universally welcomed, is increasingly common in content development.”
While the old models were built around restricting content, regulating quality, and maintaining barriers to access, the emergent logic in the industry is now based on an increased emphasis on games as a platform for transnational communities, which increases data flow and adds social and cultural value to the game.
As tools for games production become cheaper and more accessible, we are seeing an increased level of amateur games production, and some games, such as Minecraft, are being designed to encourage player generated content. Broadcast channels like Twitch and YouTube gaming also encourage player development of content, and have afforded game players the opportunity to perform gameplay online as a source of revenue, while also promoting the games.
As Dr Kerr notes, maintaining these communities demands significant investment from games companies: “Successful online games require extensive community support, not only to drive user engagement but also to monitor problematic behaviour. Player-generated content may infringe on intellectual property rights and their behaviour may cause offense or harm to other players.”
As part of their research, Dr Kerr and her fellow researchers immersed themselves in these transnational communities. Discussing her experience, she said: “We observed many examples of very positive community engagement, including online protests on political issues and community tributes to players who had died. However, we also observed some negative examples of interaction, and, if the games industry is to continue to grow at its current rate, then it needs to ensure that its communities are not allowed to become spaces of abuse and harassment.”