For most people who grew up with games, getting the latest title generally meant queuing up at the shop to grasp that shiny box in your mitts. To a large extent, this is still true, but equally many games are now being played without the user ever touching a plastic container, or browsing an instruction manual. Xbox Live Arcade, the PlayStation Network and Nintendo Wii Store are all growing in prominence, but also
Facebook,
Apple's iOS,
Google Android and OnLive are fast coming front-and-centre. So what does this all mean? Is games retail as we know it about to die a slow death?
Well, UK revenue from sales of software, hardware and accessories
was down 13% in 2011, at £2.52bn, but it's rather premature to call in the bailiffs. Instead, we are seeing a step change in the industry, in which the old model of publishers making boxed products and selling them to customers (via retailers) is being challenged by new routes to market. Developers are increasingly 'cutting out the middle man' and taking their games direct to the players. Digital Spy investigated how Finland is at the cutting edge of the latest innovations in video gaming distribution.
Finland has one of the fastest growing games industries in the world, increasing its revenues from 105m euro in 2010 to 165m euro last year. Famous Finnish studios include Max Payne and Alan Wakedeveloper
Remedy Entertainment and social games maker Playfish, which was bought by
EA in 2009 for £160m. But what has most dramatically put the country on the map is
Rovio, the company that became a multi-million dollar behemoth on the global success of Angry Birds.
So how has this tiny Nordic country of just 5.4m people become such a player on the global gaming scene? Well, perhaps the situation is best summed up best by Timo Koski, the late chief strategist of Finnish mobile phone giant
Nokia in the 1970s and '80s. Koski once said that when an aspiring US inventor opens his door, he sees the biggest technology market in the world. But when a Finnish entrepreneur does the same thing, all he sees is snow.
This witty adage demonstrates that developers and technologists in Finland have had to work harder to innovate. A studio like Rovio would have had little chance to challenge the video games giants in the days of purely physical products. But the new means of digital distribution on mobile, social networking and online allow the firm to compete. For example,
Zynga - the US maker of Facebook games such as Farmville and CityVille - recently floated on the stock market, attracting a value that made it the third-biggest American games company based on stock market value, just behind EA and
Activision.
Ville Vesterinen is the co-founder and chief executive of
Grey Area, the Finnish developer behind Shadow Cities, an iOS game that turns mobile maps into real-time battlegrounds. The game is essentially an MMOPRG, involving two teams of players fighting a fantasy war for territory, engaging in weekly battles to earn XP, unlock spells and take more of the map.
"What we have done is combined mobile gaming with the real world," said Vesterinen. "Shadow Cities pushes what games are in the modern age by turning the world around you into a battleground." Vesterinen feels that we are now seeing a "paradigm shift" in the way games are delivered, as the previous concept of purchasing a boxed product in a shop increasingly feels outmoded for many people. The same trend is being seen across music, film and TV; users have sophisticated devices such as smartphones and tablet computers that are always connected to the web, and they expect to access entertainment, content and games on them.
Speaking at a recent event arranged by Nokia in London, Vesterinen said that a crucial part of gaming on these new digital platforms is the concept of shared emotions. He pointed to the most watched non-music video on
YouTube, a short clip called 'Charlie bit my finger...again', featuring a baby biting a boy's finger, which has been watched a staggering 394m times. It seems strange that such a simple video should attract such attention, but Vesterinen feels that is missing the point.
The video is popular because it connects to such a broad range of people, in whatever way. This, says Vesterinen, is what is making some online games work. With Shadow Cities, he said that location is the "shared anchor" that brings people together, but also crucially keeps them playing. "They form relationships through the gameplay," he said. "There is regional rivalry between people, which makes it feel alive and real. They can level up, unlock spells and keep competing in weekly battles. But it is the social that brings them together."
The success of Finland's gaming industry has not gone unnoticed by investors. Rovio recently attracted $46m of fresh investment and
Supercell, creator of the Gunshine browser-based game, has pulled in $15m. A note should be made here, though, to the support from the Finnish government, which has very much got behind the industry and offered significant funding grants for new projects, as well as tax credits. This fact provides further evidence for the case brought by UK games industry trade body Tiga, which has consistently lobbied the British government to introduce support for our studios to help them compete with other state-backed global industries.
That gripe aside, there are many things the world can learn from Finnish innovation. Supercell chief executive Ilkka Paananen said that Finnish studios were given confidence by the success ofAngry Birds, which he feels "raised the bar" for everyone. Gunshine is free role playing game available through browsers and Facebook, in which players come together to form clans, fight battles and conquer bases. It has a heavy focus on social interaction, a feature many games are now embracing as it makes players more engaged and also more likely to purchase additional content (something particularly important in free-to-play titles). But also, such an open user experience throws up some interesting player behaviour trends.
Paananen gave an interesting example of this in Gunshine. When the RPG came out of public beta last year, the players who had already become fans decided to celebrate the landmark with a party. With no input from Supercell, they gathered in a place called The Pirate Bay nightclub (which Paananen noted has no other function in the game than decorative) and had a virtual knees-up. They got together, they chatted, they pole danced (!), and even used spells that they had paid for to liven up the atmosphere. "Here's the key point - we did not design that in the game," Paanenen noted. "It was the users who invented it. They created it and it was a social experience."
Remedy Entertainment is one of the more established studios in Finland, having sold 10m physical units over the years, generating $500m in revenue. Alongside blockbuster releases likeMax Payne and Alan Wake, the studio has also joined others in embracing the new digital platforms.
The company offers the Death Rally combat racing game on iOS devices. Despite being priced at just 99 US cents, Death Rally recouped its original investment in just three days and has since generated $1m in revenue from its 3m players. The studio is so keen on digital distribution that it has opted to release the next instalment in its flagship franchise,
Alan Wake's American Nightmare, exclusively on Xbox Live Arcade.
Aki Järvilehto, executive vice president at Remedy, said that digital distribution is having a "major impact" on the industry as it is enabling studios to "do things that were not previously thought possible". He said that studios previously viewed the publishers as their customers, but they are now increasingly fostering direct relationships with the consumers of their games.
Independent developers now no longer need to bow to the whims of the publishing overlords, and can self-publish new titles with considerably-reduced upfront costs and hassles. Järvilehto noted, for example, that getting games on Android is a "single-click process" in some cases. There are issues that must be beared in mind with developing for digital platforms, such as that average playtime of Facebook games is only 3.4 minutes and many people would baulk at paying more than £2.99 for a mobile game, but Järvilehto feels that the more level playing field makes up for these drawbacks.
"People tend to vote with their wallets on the Apple App Store," he said. "Ad campaigns have a major impact on physical sales, but it's not the same for the digital channels. Its more about getting to the top of the Apple charts, and the only way to do that is by making a kick-ass game that people buy, update and recommend to others. As an indie developer, that is a really great thing."
External Reference: www.digitalspy.co.uk
