Around a week ago, Nexon America CEO Daniel Kim told Game Industry News:
“Console developers are starting to realize that as well, that unless they make accommodations or think about changing their own business model they're going to quickly go the way of the dinosaurs.”
“(The) console (game industry) has never been a strong contender in Korea in particular because of piracy, and just in terms of the business model it really makes sense… The console guys are starting to realise that, but they also have a challenge in that they have a vested interest in an existing business model of packages. I know it's tough for them to just cut off hundreds of millions of dollars in revenue to say 'OK, we're going to go free-to-play and make our bed here' because that's going to piss off a lot of people who they already have an existing business relationship with.”
The Nexon CEO then makes a reference to the Lost Crusade:
“I understand the challenge but unless they're being aggressively proactive about making that leap – it's kind of like the Indiana Jones, taking that leap of faith – unless you do it there's no other way to continue to grow.”
There has been a lot of debate this week about the free to play model. As I previously mentioned this week, Ubisoft CEO Yves Guillemot also mentioned a high piracy rate and Free To Play as the wa
y of the future. There is no doubt an influence on countries such as China for both pirating and their inability to afford non-Black Market hard copies of the game.
However, SCEA President and CEO Jack Tretton stated:
“I think the opportunity to be in the console business is greater than ever before. [Social and free-to-play] is a business I think a lot of companies are learning is difficult to sustain for the long term. It's an adjunct or it's an add-on, but it's not where gaming is headed. It's an additive diversion. There's a place for social and freemium, but it's not going to replace the business models that are out there.”
Tretton continued discussing many topics including the cyclical nature of the video game business:
“I think it tends to go in cycles. If somebody comes out with a game people enjoy, it draws people to that genre. Shooters have been bigger the past few years… The same thing happens with sports, or RPGs… “
I agree. Zynga stock plummeted since the IPO and people got tired of Farmville eventually. Also, to mention is how Nexon would strengthen its own brand with its self proclaimed best business model.
Take myself for example. When I was younger, I used to watch films such as Blank Check and Richie Rich as those were marketed to me. The scripts are fun and logical for a kid of that age. Later on I was exposed to 2001: A Space Odyssey, Blade Runner, Batman Begins and Pulp Fiction; I wanted to watch more films like those. So after that I used Hulu, Netflix and Fandor to get my brain stimulated.
Another example, the Hollywood “Big 5” Studio system of the 50s compared to now. There were standard conservative films that audiences enjoyed till new visionaries hit. Kurosawa and Rashomon; Rebel Without a Cause; Kubrick; the French New Wave; Conquest of the Planet of the Apes; Sam Peckinpah; the movie brats. All those films were marketed to m Look at the sales for games such as Portal 2 and movies such as Inception. Those will be the main brands of consoles, with occasional breakout hits like Angry Birds.
I say hello consoles, goodbye iPhone games.