Videogame companies look to reach new audiences to branch out, explore new concepts, and, of course, to generate even more revenue. But no one developer or publisher has discovered the silver bullet for market growth, though big strides has been made. The question is no longer “Who?” or “Where?” but the almighty and all-encompassing “How?”
Certainly the most buzz-worthy attempt at expanding the videogame audience has been the motion control movement. Ever since Nintendo introduced the Wii back in 2006, developers and publishers (mostly just Nintendo) have continued to push the technology. Sony and Microsoft even got in on the action last year with the PlayStation Move and Kinect.
Microsoft’s Kinect has been especially successful since its release in November 2010. It was even recognized by the Guinness World Records when the device sold eight million units in its first 60 days. But a closer look at statistics indicates a downward trend. Last month Microsoft said it has sold more than 10 million Kinect sensors, meaning only two million units have been sold in the past five or six months.
Obviously the holiday season is a more successful time for companies, and every new device has a bit of a honeymoon period, so to speak. But a quick look at the Nintendo Wii shows that motion control may not be untouchable over a significant period of time. In December 2010, approximately 2.6 million Wii units were sold. That sounds like a great number, but it’s actually a 32 percent drop-off compared to the previous year.
An even more alarming discovery made in 2008 revealed that Wii users weren’t purchasing many games for the system. Xbox 360 and PlayStation 3 owners were buying 4.6 and 4.7 games per year, compared to 3.7 for Wii owners. Going after a market lacking in repeat customers complicates matters. And with the Kinect’s lackluster lineup, who’s to say that the peripheral won’t face a similar situation in the coming years?
So motion control may not be the end-all for trying to reach a larger videogame market, but one program seems to be on the right track. Those of you currently enjoying Steam’s magnificent summer camp sale certainly know that to be the case.
Speaking of Steam, here’s a platform that has become incredibly huge over the past few years. Estimates reveal that the service controls 70 percent of the overall digital distribution market. Just last year Valve announced that there are more than 30 million Steam accounts, and sales increased 200 percent during the 2009-2010 period.
Those are some impressive numbers, but even more noteworthy is the effect digital distribution has on overall videogame sales. In 2010, 24 percent of videogame sales were based on the digital format. That translates to $3.8 billion, and is a four percent increase from 2009. These numbers show there is an important market that would rather download a game from home instead of leaving the house. Even Gamestop, a videogame retailer, has a digital download section on its website. That doesn’t mean downloadable games will dominate the industry over the next few years, but it could indicate a changing of the guard at some point in the future.
But perhaps the fastest-growing trend in the videogame industry currently is the free-to-play model. Two of the biggest MMORPGs on the market, City of Heroes and World of Warcraft, now have free-to-play systems in place. Even Valve hopped on board by doing the same with Team Fortress 2 just a short while ago. The financial focus now shifts to micro-transactions and exclusive content, and it looks like it may be a route worth taking.
After going free-to-play in 2009, Dungeons & Dragons Online attracted one million more players. Executive Producer Fernando Paiz said it took the game “to a new level.” Lord of the Rings Online followed suit the next year and found similar success, tripling its revenue over a four month period.
These statistics seem to indicate that introducing a free-to-play model brings in a much larger audience. By having no immediate financial obligation, players are more inclined to invest their time into the game. Then when they’re ready to take the next step and access exclusive content, they’re more willing to open their wallets. Dungeons and Dragons Online and Lord of the Rings Online are just two examples, but if other games can replicate that success, it could very well be the key to expanding the videogame audience to a whole other level.
