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GDC 2009: Growth Opportunities in a Down Economy

This year’s GDC is expecting well over 14,000 attendees, at the Muscone Convention Center in San Francisco. This has become the epicenter of world game development, a gathering of game designers, producers, sponsors, and the tech companies that support them.

Ngmoco founder Neil Young discusses the iPhone's influence.

written by Chris Harz, Ed.D.

This year’s GDC is expecting well over 14,000 attendees, at the Muscone Convention Center in San Francisco. This has become the epicenter of world game development, a gathering of game designers, producers, sponsors, and the tech companies that support them. The venue is friendly (formal wear is a clean black T-shirt), with over 2,000 volunteers to help gamers navigate through the huge show.

The very large ($25 billion+) gaming industry is one of the few that has not taken a major hit, and there appear to be major new opportunities out there for aspiring gamers and animators. The first major presentation at the show today was by Neil Young, founder and CEO of Ngmoco, who presented “Why the iPhone Just Changed Everything” to an SRO crowd. Neal speaks with some authority—his company recently received a second round of funding, for $10 million in venture capital (when was the last time you heard that expression?), 9 months after it opened up shop, an expression of the market’s confidence in this new gaming segment. Neil, who used to work for Electronic Arts, already has several successful titles out, including Dropship and Topple. He cautioned his audience to not believe the haters that don’t believe the iPhone can compete with Nintendo DS or the Sony PSP, because its total features are more than a match for those, and “the iPhone is connected, it’s always on, and always with you.” He noted that it was features, not resolution or technical specs, that let the DS beat out the PSP.

In the past, US telephone companies choked the mobile game market, by letting very few games onto their phones and taking very high cust (30%+) of the revenues. The iPhone bypasses all that—anyone with $100 for an SDK can develop a game for it, and multiplayer games will play elegantly on it via 3G or WiFi. Games can be distributed via Apple stores (online or bricks-and-mortar) or other online venues, which could explain why nearly 6,000 games have been released since the iPhone App Store opened last July.

Neil recommended integrating the native features of the iPhone (such as VoIP, camera, and micropayments) into gameplay. For instance, Ngmoco’s First Person Shooter, LiveWire, allows players to invite friends to join them online, and enables them to buy additional levels of gameplay.

He noted that getting a publisher for an iPhone game is still a good idea, to help publicize it and make it stand out from the rapidly increasing number of such games. He also cautioned developers to remember that the lifecyle of an iPhone game is much shorter than that of PS3 app. He recommends having keeping games fresh with lots of updates—his company will release 20 new levels for Rolando until Rolando 2 is released in June.

John Rizzo talks about the new console Zeebo.

Another major new opportunity was presented by Mike Yuen of Qualcomm and John Rizzo of Zeebo. The Zeebo is a new gaming console that’s been getting a lot of attention as it joins Wii, Xbox and PS3 in the market. The company (partially funded by Qualcomm) is shooting for an emerging market—during the next decade over 800 million people will enter the middle class just from the BRIC countries (Brazil, Russia, India, and China); within those 10 years, about a billion new consumers for games will emerge. John Rizzo highlighted two major factors for this market: a) these consumers will be able to spend hundreds, but not thousands of dollars for games; and, b) regular releases of game DVDs by a publisher in these countries will not work, as piracy is rampant (John showed photos of entire neighborhoods selling pirated DVDs in these countries). He showed a typical family in India, with a TV set, but no computer or broadband connectivity.

Zeebo’s answer is to provide a platform that is affordable ($199 this year, probably much less in the future), as are the games targeted for it—about $10-$12 each. A Sony PS3, in contrast, costs around $1,000 in Brazil, for example, and pirated games run around $10. Games for the Zeebo will be delivered by high-speed 3G wireless connectivity, which he said was available in over 80% of the markets targeted. The consumer thus has the choice of buying an inexpensive game console and ordering games (and other online content) from the comfort of home.

The Zeebo will roll out in Brazil next month. In addition to playing games, it also serves as a router/modem for the home, so the consumer can keep it turned on perpetually and hook up TV sets, computers or other devices to its wireless Internet access. Zeebo is looking for game developers worldwide to provide games to what they see as a brand-new market of over 200 million homes. Since the console (which contains a Qualcomm phone chipset) does not have the power of a PS3 or Xbox (though, John pointed out, these consumers are not expecting or demanding that level of resolution), the company recommends that games be relatively simple and inexpensive, in the $100K-$350K to create or repurpose. Judging by the sheer number of games that are being sought and the billion-person market, this should promise to be a major opportunity for animators and game developers in the years to come.

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