Opinion: The five smartest games businesses

The games industry is in a state of flux right now, with new business models - such as digital distribution – emerging, and new go-to-market strategies emerging as social networking begins to replace TV as the premiere source of information for consumers.

With that in mind, below is Games and Buisiness’ five smartest gaming companies. This list was decided on a number of factors, but the main criteria were: Agility, or the ability to react to market trends, and show a clear vision for the future; Technology, the willingness to take risks and push the envelope – as finding successful new ideas is key in finding new customers; and finally Goodwill, or building a successful and loyal customer base – critical for long term sustainability.

5) EA

EA has performed a remarkable turnaround over the years. From having a lowly reputation as a publisher that would drive its franchises literally into the dirt, it has left that dishonourable award to its chief rival, Activision, and has instead won the hearts of the gaming faithful. New IPs such as Boom Blox, Dead Space, and Mirror’s Edge have won the gaming community over, and the acquisition of Playfish demonstrated that EA is keen to broaden its reach further.

The publisher has become the dominant force in sports sims with the likes of Tiger Woods and FIFA soccer, seeing off hearty competition (such as PES) with an aggressive release schedule that has left just enough time to craft quality titles, and has been one of the few publishers to find success on the iPhone, without needing to undercut the price of its games to the $0.99 mark.

4) Sony

Of the three console makers, Sony seems to have the most sound vision of the future. While Nintendo is content creating innovative, but ultimately short-sighted entertainment units, and while Microsoft has hedged its bets on something that may well not happen (Kinect and cloud computing), Sony has experimented. The PSPGo didn’t sell well, but it was an experiment on Sony’s part – it guessed that the industry would be heading to a physical-media free world of digital distribution.

That same experiment has meant that, should the PSP2 come, Sony will have learned from previous mistakes and got the jump on its competition – and all indications are that it guessed right.

3) Rockstar

Over the years, Rockstar has done a remarkable job of constantly redefining what ‘epic’ should be in the world of videogames. With budgets now exceeding $100 million, the company cannot necessarily afford to be too experimental – producing games of that scale are in themselves a risky proposition, but it has come up with a formulae that is continually bringing in new fans.

Couple this with a solid online and DLC strategy that consumers are willing to pay for, and you have a company that, despite taking literally years to create new games, would seem to be one of the few remaining that can afford to focus mainly on creating retail blockbusters.

2) Zygna

Zygna can almost be put forward as the videogame industry equivalent to Facebook or Google. Building momentum in almost a completely organic fashion, the company almost single-handedly created a new genre of game, and has indeed changed the very face of the casual gaming scene.

Zygna management clearly had the same vision as Nintendo did with its Wii and DS consoles – rather than attempt to unseat the incumbent ‘hardcore’ gaming crowd, this perky little (not so little now) startup instead decided it would find a whole new, untapped minefield of gamers. The only question hanging over its future is whether it can continue to stave off the competition, now that just about everyone is looking at social gaming as a viable business model.

1) Square Enix

Only Nintendo can claim to compete with Square Enix when it comes to game franchise and character creation. Between Final Fantasy, Dragon Quest, Chocobos, Slimes, goods shops, soundtracks and themed bars, the publisher has created a mythology around it that had it take out a huge percentage of Japan’s favourite characters in a recent issue of famed Japanese magazine, Famitsu.

And, while many criticisms are levelled at Square Enix for milking its franchises a step too far, it has proven on multiple occasions that it is willing to experiment. It has embraced digital download games on all consoles (and the iPhone), in a big way. It acquired Eidos to give it a more solid foot in the door to Western markets, and it is actively looking at casual gaming as the next frontier. Square Enix is remarkably adept at adapting to market trends, and finding new avenues to market for its franchises.

Honourable Mentions:

Nintendo has a rabid fan-base, and has successfully won back a massive market share through simple, but innovative technologies. Yet there are lingering concerns over whether Nintendo’s vision (and R & D investments) will allow it to retain relevancy as the other two big players, Sony and Microsoft, look to find new online delivery technologies and have their consoles link up with a broader range of devices.

Activision certainly deserves props for approaching the games industry as a business. While gamers are a little turned off by its cold efficiency, Activision clearly has a vision that sees the gaming industry continue to blossom into a form of entertainment business that rivals cinema and music.

Apple has a very light touch to the gaming industry itself, but it has created two platforms, in the iPhone and iPad, that have successfully cannibalised a large amount of money that might otherwise have gone into more mainstream gaming formats.

Finally, we’re yet to see how it will perform, but OnLive has all the trappings of a visionary product. Taking a technology that is fast becoming the dominant delivery mechanism for enterprise IT, cloud computing, OnLive has successfully brought it to a home entertainment medium. It all depends how many subscribers it can pick up from now, though.

No comments:

Post a Comment