By Kyle Kulyk

There’s a shift currently underway in the videogame industry, a shift that developers and publishers alike are watching descend on them like a village watching the slow approach of a lava flow. The game industry is changing and old business models that have served their purpose for the past decade have started to lose their appeal as prospectors coming down out of the mountains of mobile and browser based games with pockets full of gold and tell tales of untapped veins of revenue for those brave enough to take on the risks of the journey. However more than a few of these prospectors have disappeared into those mountains and their bones now serve as chin rests for cougars, lazily licking their chops in anticipation of the next fool to come stumbling into their lair waving a lazy port of a flash game for the Android marketplace. Metaphors aside, what does the current popularity and growth of mobile and browser based games mean to the existing console markets?

Having recently attended the Canadian Games Developer conference, a reoccurring theme throughout many of the presentations was the current change in the industry away from older business models. During the Facebook panel it was opined that console gaming was dying and certainly this is a sentiment we’ve heard echoed before. Peter Vesterbacka of Roxio games (makers of Angry Birds) also recently commented that console games were dying, and that the existing model of charging $50-60 for videogames days were numbered.

It was during these talks and listening to the musings of other developers in the room that I was left with three distinct impressions. The first was that I disagreed. The second was that many of the traditional developers either don’t know what to make of the surge in browser and mobile games or simply don’t see how it affects them. The third is that I was the enemy.

While the games industry as a whole is fairly supportive of indie development studios, it seems to me to be a dismissive sort of support. We’re invited along but rather treated like the little brother of the games industry. When mentioning indie development studios I was often treated to a pat on the head and a “You’re an indie developer? Good for you!”

Indie developers generally tend to be small and unheard of. They focus mainly on niche titles that traditionally are ignored by mainstream gamers but that is changing and it is here that we’re seeing explosive growth in the industry. It is also why we could be viewed as the enemy of the console games market. Unity3D’s CEO, David Helgason, in his keynote speech referred to it as the “democratization” of the video games machine. For the first time, indie development studios have the tools, and more importantly the market, to develop their games and get them in the hands of hungry gamers without the multimillion dollar budgets and traditional publishing deals that kept their titles from widespread distribution in the past. It is this ability to develop, self publish and market their own products via social media that have some developers and publishers scratching their heads wondering what they should do, if anything, while they are cut out of the loop.

Will this lead to the death of the console game market as some have suggested? As a console gamer, I certainly don’t think so. To explain, let me quickly summarize my view of the current console market.

Certainly there’s been a fair amount of coverage by those noting a decline in games sales across North America in the past couple of years, but far from that signalling the overall death knell for the console market, I view it as simply part of the cycle. The Wii’s initial popularity took many analysts by surprise but now that the novelty has worn off, Wii sales have begun to taper off.

Microsoft’s Xbox 360, with its hardware issues always struggled to maintain positive growth while the company suffered billions in losses in the division responsible for the Xbox. The 360 often saw year over year declines before price cuts would temporarily boost sales. Microsoft finally has been able to get the price of manufacturing the console down and recently scored a big hit with the release of their camera add on – the Kinect, luring away many of Nintendo’s market with their family friendly, motion games. It remains to be seen if this surge will be sustainable or if the Kinect will also gather dust next to the Wii in family rooms in a few months time. Meanwhile, with Microsoft focusing their energies on the bounty that Kinect has provided, the concern is the “core” gamers who have supported the console are being left out as popular exclusives that were once the main draw of the console have slowed to a trickle.

That leaves Sony’s PS3 which many in the media had criticised as being slow out of the gates but in reality has performed much better overall on its time in the market then the Xbox 360, but not as well as its predecessor. Despite a high initial price point relative to the other consoles and the worst economic downturn since the 30’s, the Playstation 3 has handily outsold the 360 head to head in worldwide sales in its time on the market and has steadily increased growth and install base to the point where it has nearly overtaken the 360’s overall lead due to the 360’s extra time on the market. Recent financial reports from Sony have shown not only are PS3 sales steadily increasing in contrast to the spikes and dips Microsoft’s 360 has struggled with, but software sales have also shown year over year growth of nearly 30%. With rumours of a price cut to the magical $199 mark mounting, developers such as Capcom have recently projected an unprecedented surge in PS3 software sales. Certainly the PS3 has shown it can deliver the goods in terms of family friendly fair, motion games with their Playstation Move accessory, console reliability and Blu-Ray while delivering excellence in their overall software line-up. It certainly appears that in the console market, slow and steady can win the race and the PS3 shows few signs of slowing worldwide.

So with the Wii and 360 still pulling in the gamers, Kinect at least temporarily striking a chord with families, the Wii2 on the horizon and the PS3 seemingly on the verge of a price cut that could see the powerful console in more homes than ever is console gaming really doomed? Is browser based and mobile games the future as some have suggested?

As one who enjoys console games and develops mobile games for a living, not a chance. If anything, the explosion of browser/mobile games will bring more gamers into the fold as they reach out to those that are new gamers and those that may be old gamers that have lost their way and leave them wanting more. It is the consoles that will then fill the need for bigger and better things. The videogame market is big enough to sustain both worlds. I feel as a result of the popularity of smaller games we may see an increase in the downloadable games market on the consoles as “medium” sized games will nicely bridge the gap between mobile games and “core” games while allowing developers the creative freedom that big budget titles can often constrain. I do not believe it will come at the expense of the traditional console games.

With any luck the explosion in the mobile and browser games space will be a good thing for the entire industry and I certainly hope our small studio can be part of that. As a business model for success in the mobile/browser market may be elusive at the moment it seems unlikely to me that this marketplace will supplant the console game market anytime soon. However, I don’t think it should be dismissed either. Hopefully, we’ll surprise you.