Hey Buddy, Need a Few Million to Make A Game?
Thump thump thump.
(Is this thing on?)
Greetings from GamesBeat 2009!
During a week that the focus of the industry is dominated by the Game Developers Conference, a few hundred brave souls gathered on the San Francisco University campus to attend a new event put on by the folks at tech blog VentureBeat.
Led by superstar game journalist Dean Takahashi, the GamesBeat idea was to take an executive-level view of the games business, and deliver a one-day conference that lets the suits talk about making money off of games.
And despite the burgeoning recession, the GamesBeat idea appears to have a pulse.
Chris Taylor, Gas Powered Games set the stage during some opening remarks when he pointed out that games sales are up January and February this year, despite the economic decline.
“And that’s so damn cool”
The first GamesBeat panel sat down a group of venture capitalists and drilled them on the market. The consensus? The checkbooks are out for the entrepreneur with the right ideas.
So what do you need to, say, bum a couple million bucks from your friendly VC?
The bad news first:
The money people aren’t interested in your great idea for your World of Warcraft with a scifi twist. No matter how hot a new idea is, VC doesn’t want to invest in a one hit wonders. Jeremy Liew at Lightspeed Ventures pointed out investing in hot concepts is like putting money into a restaurant or nightclub idea when he wants to invest in the next Disneyland. Think the difference between flash in the pan and a global franchise. Big money isn’t just looking for big ideas, they are looking for big returns on their money. And that means long-term properties that dispense money like an ATM.
Boring? To the average gamer only interested in what Gears of War 3 might look like, sure. But understanding how the money flows behind the scenes tells you a lot about where the industry is heading.
So where’s money sniffing around? The panel dropped hints as to the kinds of innovations that have them reaching into their big bags of cash, including:
* New distribution models. Think the iPhone. If you can match customers with content, you have a golden ticket.
* Defensible markets. Why is WoW so big? Because it’s WoW and you’re not. They innovated in the MMO world and now they have a license to print money. Define a product line that lets you control a massive customer base over time and you’ll get VC interest.
* Something social. No one can look at the explosive growth of social networking sites like Facebook and not wonder how to leverage that in games.
* Payment schemes. Back to the iPhone, everyone seems obsessed with how easy it is it to buy stuff from Apple. Making it easy to buy virtual goods and full games opens the gates to customers.
* New angles for monetization. This is biz-speak for figuring out ways to get people to pay for stuff that they haven’t paid for in the past.
* New demographics. Women, families, kids. Anyone who isn’t playing Grand Theft Auto today is a potential customer.
* New markets. The feeling is, the hardcore market is tapped out. Or, at least, it’s dominated by the traditional players. So, what’s left? Health games, games in business and the application of game technology to new areas may not be sexy, but it sounds profitable.
This all might sound terribly dull to people who want to have fun rather than just make money. But don’t despair. Even those cold hearted bottom line folks still love games. They’re just practical about it takes to keep the fun going.
“It starts with a one great game. But doesn’t stop with one great game,” summed Liew.