Disruption was a main buzz word at the 2013 LA Games Conference, now called DMW Games, held April 18-19 at the historic Roosevelt Hotel in Hollywood.
The term was bandied about much in the first two hours of the event.
But the event organizers couldn’t expect the presence of a larger disruption in the form of a bomb scare that played out across the street at Hooters, near the Hollywood and Highland complex. The disturbance failed to disrupt the ongoing reception high above in the hotel’s penthouse. With helicopters soaring above and police cordoning off the much trekked on segment of Hollywood, the hosts joked about the ensuing commotion going down below.
Though the term is often misused, “disruption” is the conversion of ignored consumers into revenue sources. But disrupters or bottom feeders are viable entities such that companies that focus on traditional console hardware and software are attempting to re-shift focus to capitalize on their missed opportunity.
Nanea Reeves, COO if Machinima, says there exists a dismissal of gamers of tablet and mobile games as “casual.” But in fact, as author Raph Koster pointed out, casual gamers are just as hard core about their social games as hard core gamers. They are willing to spend $1000 a month on merchandising and in-game tokens.
As far as raw reach, Facebook games crush console games, according to Koster. Their presence broadens the definition of what a gamer is and is largely responsible for gaming’s penetration outside of the game and into broader culture.
While VP, Digital Publishing Chris Early says his company, Ubisoft, spent 100 million dollars developing Assassins 3, he believes that budgets are getting smaller. This is largely in part to the fact that, as Reeves points out, Clash of the Clans was made for less than 200K, but brings in a million a day.
As described by Pascal Brochier, Senior Vice President, Americas Publishing at EA, his company sees mobile as bringing customers to the brand. For companies to be successful, EA’s evolving model is of flexibility with more options to share and play together, whether it be in the same room or connected with players around the world.
According to an IPSOS survey for Q4 2012, out of the 5.2 million spent in the US on gaming, 81% came from packaged goods. However 44% of overall game time is spent online compared to 38% on consoles. And with EA, extra content including DLC or downloadable content is the largest digital revenue segment.
The shift in game development has already occurred. Michael Pachter, Managing Director, Equity Resarch at Wedbush Securities, said that only 20% of developers are developing games for the next gen Xbox.
But even though 100 million may not be spent in developing their games, independent developers have to set themselves apart from the 3000 plus games available. Without the brand loyalty, they instead have to rely on the mercurial currency called “engagement” to create buzz for their product.
Without an ear to the pulse of the consumer, the results of failure for many will be deafening.