Gaming is the New TV

Gaming is the New TV

A battle has been unfolding in recent years as immersive 3D games have declined while casual, social and mobile games have arisen. The industry silos that make the immersive console and PC games blamed their slump on the general economy or console cycles. In fairness, their games are amazing and incredible. The trailers for these games make them look like blockbuster movie releases; how could they possibly go into decline? But this part of the industry has been somewhat in denial about a fundamental market shift away from their offerings. And they should not be surprised, as this change is foreshadowed both by disruptive product theory and by media industry history.

Disruption is always accompanied by a major new feature that the traditional industry or customers did not care about. In our case, we are talking about social interaction. Because we are all seeking social value, consumer media interest has shifted to interactive social media, and away from traditionally passive media that only provided personal amusement. But the other factors that often seem to go along with disruption are rising consumer preferences for simplicity and convenience. This often parallels a decline in the fidelity expected by the public. We’ve seen this in the shift from phones and letters to email, and from email to texting. Texting alone is now a global market in excess of $100 billion and a decade ago nobody would have believed it could happen.

It seems that when a market becomes massive, simplicity and convenience are the driving factors and fidelity goes out the window. In the case of texting, SMS was invented purely as a tool for network technicians to test network presence. It was considered to be too clunky to appeal to consumers. But a mobile phone is portable and the convenience of being able to send a short text message from anywhere at anytime was of enough value to tolerate the clunkiness.

Similarly, there was a golden age for films prior to 1950, when to see anything on a screen you had to go to a movie theater. The best you could do at home was to have a radio, which became the most convenient way to get the news or live events. But for immersive entertainment, for a great show, you had to go to the movie theater. And everyone did. And then television came along. The film and radio industries didn’t really get TV, which, like SMS, had a humble beginning. TV was originally intended for civil defense communications. It was many years before the film industry took TV seriously as either a threat or an opportunity, and the dominant radio companies also underestimated TV. The esteemed leader of CBS, Bill Paley, thought so little of TV that he wouldn’t help his own radio stars make TV shows. Lucille Ball was one of his biggest radio stars but had to separately fund her own production company, Desilu, which of course then proved him wrong.

To watch a movie you had to buy a ticket without really knowing what you were going to see. But TV was free, initially using an advertising business model that was later enhanced with monthly subscriptions and what we now call microtransactions. TV became ubiquitous and the movie industry freaked out, rushing numerous gimmicks to market in the 1950s as they saw their growth vanish. In real dollars adjusted for inflation, the movie theater business has been flat since then, while TV grew into an enormous new business.

We are seeing exactly the same thing today with the shift from immersive hardcore games to casual social games. The latter are free with virtual goods microtransactions. And they are on convenient and simple platforms like Facebook and mobile phones. When you see a trailer for a great movie or video game, it is mind-blowing excitement. And there will always be a market for it. And in the case of film, as with video games, the production budgets are always rising and the amazing immersiveness is only going to get better. But the mainstream shifted to TV and now they are shifting to casual social media like Facebook. For blockbuster films and console games, it is a hits business with high costs and high risks. By comparison, it is not so risky to produce a TV episode, a website or a Facebook game. Fewer companies will survive in the challenging blockbuster category but as with TV we will see a great deal of innovation from small new companies in new digital media that has social value.

About Trip Hawkins
Trip Hawkins is CEO of Digital Chocolate, a top publisher of social applications like Millionaire City, MMA Pro Fighter and Tower Bloxx. A new media pioneer for 30 years, Trip helped define the personal computer at Apple and founded industry leaders Electronic Arts and 3DO.

Leave a Reply