Game Theory with Scott Steinberg: Episode 1

Battered and bruised by plummeting sales, the video game industry staggers on, steadily losing ground at retail. When will we finally wake up and realize that things have irrevocably changed? From social network games to motion controls, iPhone apps, 3D games and cloud computing, the modern gaming business isn’t just virtually unrecognizable. It’s also being completely reinvented courtesy of new concepts like digital distribution and free-to-play titles with each passing day. In the first of a multi-part series, the field’s biggest names reveal just how long and hard the road to redemption remains, and why things will never again be the same.

Welcome to episode one of new PC and video game industry show Game Theory: It only gets better from here.

What the critics are saying:

“An intelligent and entertaining look at the games industry through some of the brightest minds in the business.”  -Sid Meier, Director of Creative Development, Firaxis Games

“The smartest take on the video game industry.” – Trip Hawkins, Founder, Electronic Arts and Digital Chocolate

“An absolute must-see!” – David Perry, CEO, Gaikai Inc.

“Asks all the right questions.” – Todd Howard, Executive Producer, Bethesda Softworks

“Finally a game industry web show that is well worth my time – features relevant topics, a smart host and all the right industry voices.” – Randy Pitchford,  CEO, Gearbox Software

About Scott Steinberg
Scott Steinberg is CEO of strategic consulting and product testing firm TechSavvy Global, and a noted keynote speaker and business expert. Hailed as a top tech expert and parenting guru by critics from USA Today to NPR, he’s also an on-air analyst for ABC, CBS and CNN.

13 Comments

  1. Great concept for a show, and I’m excited to see it, but are there any plans to build a podcast RSS feed that I can subscribe to to automatically pick up new episodes and watch them on my TV?

  2. Wonderful video. I just stumbled across this site via a Kotaku link and am really enjoying what I see and read. This video in particular speaks volumes about things that are going to/ have to change in the gaming industry. I hope to see more stuff like this.

  3. Q1: Talk about a broad question. What games are we talking about? Does this assume Modern Warfare 2 is played by a majority of grandmothers/tween girls? Is this question focusing on traditional “hardcore” games, or casual/social games?

    Even so, watching the video it seems the industry celebs are eating a big bag of wtf. Because hardcore/console/traditional games have such long production cycles, it takes a long time before big companies react to the changing market/audience.

    On the other hand, when you have a game like Farmville built in 5 weeks, and then developed/supported based on what users are doing (all through robust metrics/data mining tools), you can react much quicker to the changing face of your audience.

    ******

    Q2: The numbers are all that matters. Design should be by the numbers- A/B testing, data-mining how the players are playing. If you have two kinds of virtual items for premium currency, 90% of users are buying item 1, and only 10% buying item 2, you know where your money is coming from. And you know that you should make more kinds of item 1 and not waste dev time (= money) on item 2.

    *******

    Q3: I still won’t pay $60 for a new IP (that isn’t backed by a massive hypemachine). I’ll play a new IP if its free. However I probably won’t put money into the game unless I really really like it.

    ********

    I get a cookie for answering these questions, right?

  4. Indeed a Podcast feed would be very nice, specially if available on iTunes.
    The content of the show is awesome, the market from the point of view of the developers and the comparations with the cartridge era really gave me a new view of this generation 🙂 keep the good work!

  5. Can’t wait for more episodes. This is great insight into whats happening to the industry, I love the fact that its coming from some of the biggest names in gaming.

  6. Scott,

    Are you really a professor?

    Good video, guys. Maybe an HD camera in your future?

    The format of “talking heads” with minor b-rolls isn’t that interesting. You need to get these guys in their own element at their offices/homes talking about specifics. All this big picture talk is exciting, but ultimately means nothing if we don’t understand how the industry is evolving.

    I’m sure you’re doing that. I just wanted to type it.

    I can’t wait for your episodes on the philosophy and physiology of gaming. How it affected my generation that grew up playing Atari’s to now. Then the younger generation growing up playing games on their phone.

    You guys want help?

  7. Wow, love this video. As a high school student wanting to study video game development in college, this series will be immensely helpful to me. I’ll be sure to keep watching. Kudos.

  8. Very good show you guys have there and I van;t wait for the next episode.I just wanna say I’m very happy and pleased that we (as in hardcore and casual informed gamers) are finally have a site that talk about the mind-blogging issues about the industry at the moment all around the clock.I’m mainly listening to the podcasts of Invisible Walls & Bonus Round @ Gametrailers , Kotaku Talk Raidio @ Kotaku, and Epic Battle Cry @ EpicBattleCry to hear about such issues going on now in industry for a few days of week and I enjoy that, but I wish it could be everyday matter that gamers talk about all day around(for those who want to). It seems like at about the time most 17-20 years old who are going to a gaming college to learn about game development and game-related majors come out of college, there will be a whole new era awaiting us outside, which I see as exciting. We’ll be like the creators and developers in ’84 (which is what Will Wright said) coming out to a new playground ,finding new activities to do.

    Q1:
    It is still gear toward the young male demographic because that is where the majority of the money is being made. If the industry tips over to the feminine side, we would see the same thing happen too. But the main reason I think I see this happening is because it seems that the young male demographic is the outer bull eye section in the marketing perspective while the dead-center bull eye is everyone altogether.It is companies like Zynga that are now realizing this and have adapted their strategy to target it now and are now successful.

    Q2:
    I’m not really sure how to the answer the question ,but I see it as not everything has a “one size fits all” kind of aspect to it and the industry has to realize it.The numbers do matter but to a certain extent. If your game is good for the target audience its geared to, it should sell well to that category of people who like that playing style. If you have a average fan base of gamers who are supportive to your franchise, the number’s game shouldn’t get on your nerves because you know that your dedicated gamers will give word of mouth information over social networks to spread your game over the net.It’s just that the industry has to mix things up and experiment to find the solution to the sales number problem.

    Q3:
    I’d have to say my habits have change dramatically. I really don’t play as much as I used to. Instead I find myself talking to others about the industry, checking out new gaming news and playing a couple of triple A titles here and there. Over this past year, I’ve been going back into the past and playing old games like Zelda,Portal and other classics to see what gave them this unique approval of greatness/flawless masterpiece under most gamers.Im playing online games for free and buying less $60 games because I feel like the price needs to come down to $15-$20 bundles like Steam because money is really hard to get now a days and everything is getting expensive because of the economy. Publishers need to adjust for this time of age, and maybe that means going free on some games and using micro-transactions as a revenue.

  9. Amazing show! Keep up the great work! Hope to see it on iTunes so I could take it on the go.

  10. On to this week’s assignment…

    Q1:
    Part of it is the industry being (as you demonstrated in your video) slow to react. Non-(teenage white boy) have been playing games and all flavors of it for a long time.

    Women, non-white people, older men, etc. have been playing games from FPS to casual games to MMORPGs to classics such as King’s Quest from Sierra. However, those that do, do it for the love of gaming, not because they feel particularly welcome or considered as a target audience for games. Think about it : somebody other than a white male want to play a FPS, how many choices are there in the AAA titles that gives them a choice to play a black male (with similar values or depiction than a white male) or a woman (that is not reduced to eye candy or objectified in such a way that the reward/trophy/object of bragging rights for finishing the game is getting to see her naked)?

    However, there is also a self-fulfilling prophecy in there : games are made for the teenage white boy because they sell very well in that demographic. Most publishers do not market the games to other demographics because the benefit would be marginal (or so they think). The problem being that if the game wasn’t made specifically for the teenage white guy, it *would* have more demographics interested to buy it (witness the Wii phenomenon and most social games) but big players don’t dare trying to make games targeted to the other, recently more vocal, demographics because of the paradigm shift the industry is going through.

    So it goes: Games made for teenage white boys -> marketing towards teenage white boys -> marginal sales to other demographics -> less revenue than could have been made if the game targeted a larger audience -> big players thinking that “other” demographics just don’t play X style of game -> big players afraid to take a risk on the “other” demographics -> games made for teenage white boys -> other demographics going elsewhere for their entertainment.

    Q2:

    Expert opinion does have its place, but sometimes, somebody with a new perspective can help the industry (and us consumers) go through this paradigm shift more easily and less painfully.

    Q3:

    In 2000, I had just come back to gaming and was going through a few oldies (King’s Quest series, J-Bird, Ms. Pacman, etc.). Still, it was something to do when there was nothing else to do (just like opening a magazine at the dentist’s or turning on the TV outside of scheduled series-watching).

    In 2005, my husband picked up Guild Wars in early May. I played an alt on his account for a while before getting my own.

    In 2007, Guild Wars was still where I was, while my husband tried other games (WoW, console games, etc.).

    Now? I’m still playing Guild Wars and waiting for GW 2. I may get an iPhone this year (if they fix the antenna issue) or next year. That could change some of my gaming habits.

    I did, very briefly, try social games on Facebook but I found the time investment and the obligation to return everyday very unappealing. Guild Wars, from ArenaNet, goes outside the two major business models you see in MMOs these days : it’s free to play (no subscription) and whatever you can buy in micro-transactions doesn’t make you more powerful. It can give you more choices (more storage space, more alts, some collector weapons that are just as good as any you can find rather easily in the game, name and appearance changes) but nothing in there, by itself, can make you into a better player or a better-armored one.

    I haven’t taken a close look at DDO’s free-to-play model yet, but if I ever get burned out of GW and still want to play games (both haven’t happened at the same time yet), I may yet try it and see.

  11. I’d never pay a subscription fee to play Modern Warfare 2 online.

  12. Interesting show though not saying anything I hadn’t heard before.

    Of the topics discussed, I’m most interested to see if what Pachter is hinting at happens.

    As someone who these days mostly buys bigger games for their online multiplayer component this is of particular interest to me as from my point of view, that unending multiplayer experience is what I’m paying my £40 ($60) for. My most recent purchase was Starcraft 2 and haven’t really touched the singleplayer. I just find it much more engaging to play with/against other ‘real’ people.

    SINGLEPLAYER = $30, MULTIPLAYER = $5 a month (???)
    I think we could see the physical split of single and multiplayer parts of games. Maybe you pay $30 for your 6-10 hour ‘campaign’ and then a monthly $5 for playing the online aspects. That would come to $60 for a year and more if you took it into a 2nd year.

    Its difficult – While in principle I can see the fairness in this sort of model, I’d have to agree with Brad that if they started charging for Modern Warfare 2 tomorrow, my copy would be on eBay the day after.

    My gaming habits these days are roughly split into 2.

    1 – I’ll pick up a good range of the titles that come out (retail and downloadable) as long as they’re interesting and have something new to show me (think: Arkham Asylum, Demon’s Souls, Shadow Complex, Red Dead Redemption, etc.), but I might only devote say 10 hours to each (or less) and…

    2 – I also have a collection of games I play online which I never really stop playing, some of which are several years old).

    I think this behaviour might alter pretty radically if I suddenly had to start paying above and beyond the initial investment I’ve made in those games.

  13. I love the large mega games.. I pride my collection of over 40 on both PC and PS3.. but I think there does need to be a change.. I will always buy the big blockbuster games, I hate to see one of my favorite studios die. I also am in school to join in on the gaming industry because it is a passion I have had my whole life.

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