HA3 Task 3 - Financial, Industry and Market Trends

Trends within the Games Industry:

Over the years, there have been many trends within the games industry. These are where certain things such as technology and certain games have influenced and become a staple and commonly appearing part of the games industry. One such example would be motion control. When the Nintendo Wii was released, it was revolutionary (this was referenced in the Wii's original name 'Revolution'). It had never been done on a commercial level before, and the additional factors such as the low cost of the Wii, and its family friendly nature,  caused it too sell incredibly well,  and is still now, one of the best selling consoles in the history of the industry.




Another example of a Games Industry trend is VR. This is a recent trend, and it is being regarded as the next major step the games industry will undertake. Devices such as the Oculous Rift have been submitted to intense scrutiny by the industry at large and despite its high pricing and flaws, it is considered the first step in the conversion of the industry to Virtual Reality integration at large. Virtual reality is often showcased at events such as E3 and high profile gamers such as you-tubers demonstrate and play virtual reality for their channels.

Other trends include Game Genres. One example of this would be Survival Sand Box. This trend began when Minecraft became commercially successful. The industry, especially the indie sector, realized the concept of Minecraft was the next big thing, and that they could potentially gain success from a similar game. Minecraft clones such as Cube World and Total Miner were seen entering the market in the hopes of gaining part of Minecrafts success.

Market Trends:

Market Trends are generally, what the consumers like and buy. A market trend in the games industry, could be gamers buying open world games more so than other genres. This could be reflected in sales figures, or even profits. Trends could also be a game series release schedules. A primary example of this would be the Call of Duty and Fifa series. They are guaranteed to release every year and this has become a well known trend in the video game market. Due to their popularity, they make lots of profit and sell really well. Even games in the series that are decided by common consensus to be inferior to the rest of the series sell well, for example Call of Duty Ghosts sold 19 million copies by February 2014 despite being regarded as the worst in the series.

This shows that the industry adapts to the popularity of a franchise, which indicates trends can change within the industry. Some of the highest selling games include Tetris, at the top with 425 million copies sold for the 2006 version of the game;followed by Wii Sports at 82 million and then Minecraft at 72 million. Each of these highest selling games has started or featured a trend market wise during the industry. Tetris started a whole range of 'Tetris clones', such as Welltris and Hatris, Wii sports started the popularity of motion control in gaming, and Minecraft started the sandbox survival craze that started when it gained popularity with similar games being developed such as Fortress Craft and Castle Miner which were designed borrowing heavily off Minecraft.. Each of these highest selling games have started a market trend and have influenced both developers and the consumers to make similar games and buy similar games respectively.

Financial issues within the games industry:

Financial planning within the game industry is important for many reasons. Firstly, a modern AAA game release costs millions to create. If the company is to make a profit or to stay financially afloat, they have to distribute the money within a game project suitably across all aspects. It is dangerous in the industry to put most of its budget into advertising that wows  and draws in the industry, only to not have enough money to create an equally impressive game. This seems to be commonplace within the industry these days, with games like Destiny focusing on advertising campaigns taking up most of the financial budgets.

Another problem with the industry financially, is that developers make the least money overall. Due to this, financial planning is paramount if the developers want to make as much money as possible, and if its the case of an indie game, if they are to make any money at all. To help with financial planning, a games company can use a budget. A budget is arguably the safest way to plan the financial aspects of a game project ahead of time, and to get a plan of how the money within a project will be distributed over the course of the development process.

A budget can allow the developers to have an idea of how much money is needed to make a profit and if possible, the target profit set at the beginning of the course. A budget should be constantly monitored across the development process, to see if it is either too little or too much for the project, and if it is saving and/or making money for the project in the long run.

There are a few business models that the industry uses to gain a profit. One such model is Digital Distribution. If products are released digitally, it saves money, because they do not have to pay for manufacturing, store placement, shipping and disk distribution. This allows for greater profit. Gaming in general on the internet is free, and to gain money, certain companies such as Blizzard have introduced subscriptions into their games like World of Warcraft. This was used for Elder Scrolls Online, but it was later dropped.

Gaming has become more social due to social networking sites such as Twitter and Facebook allowing games on there to offer micro transactions. This allows the increase of digital distribution and enhances its popularity among developers. Due to mobile gaming's easy to access nature and cheap prices, it is the most popular gaming format.


Sources:
https://en.wikipedia.org/wiki/List_of_best-selling_video_games#All_platforms
https://en.wikipedia.org/wiki/Call_of_Duty:_Ghosts