Online Only – Video games surviving the recession

By Andrew Swan

The next few years are going to be very interesting for the video game industry. Amid uncertain economic times, gaming has continued to generate substantial sums of money and part of this success comes from sophisticated business operations. But what can be expected for the industry in the future?

The University of Calgary’s Association for the Management of Information and Operations in conjunction with the Calgary Council for Advanced Technology and Digital Alberta held an event called “The Future of Gaming: Opportunities in the So-called ‘Recession Proof’ Industry” on March 18.

With about 100 in attendance, “The Future of Gaming” touched on hardware and different types of games.

The first speaker was Rahul Sood, Hewlett-Packard’s Global Voodoo Business Unit chief technology officer and founder of Calgary-based VoodooPC.

Amid the economic hardships, Sood emphasized that Sony and Microsoft’s model of creating high-end hardware technology that loses money on every sale is all but dead. This unsustainable technology model is going to become a problem as companies must start making money on their console systems- a process that can take years to accomplish.

Along with foreshadowing the decline of the console titans, Sood had a lot of praise for Nintendo’s Wii console and handheld DS. Not only has Nintendo been successful- it is the only console maker of the big three that makes money on each console sold- their vision to get people off of the couch is paramount. Sood said that getting gamers is the next step in gaming.

U of C drama and game design professor Dr. Jim Parker also spoke and focused on “serious games” that have a purpose other than pure entertainment.

Parker said these games are important in healthcare and military training, as well as carry great capacity for advertising. In 2004, $83.6 million was spent on in-game advertising. By 2012, this figure is expected to be around $2 billion according to Parker.

Parker was followed by president and CEO Steve Shatford. Based in Calgary, Shatford’s game design company focuses on innovative and casual games. With the rise of the casual-oriented Wii console, games that are both entertaining and easy to play are going to be a stalwart of the industry for years to come.

“The future is going to be in small applications and webgames and casual gaming,” said fourth-year economics student Mark McLarty, who attended the event. “People are going to want games that they can jump into and get right into it and not spend hours and hours learning how to play.”

Shatford said digital distribution will be the most important distribution method of games in the future. Retail stores like EB Games and Best Buy are still successful, but digital distribution directly to consoles and computers is going to be the preferred method.

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