Transition Years

If you read my blogs or listen to my talks you know that I held a talk 2001 where I described the 5 year cycle of the industry (PDF link, note: this cycle is longer)

Generally whenever the old console is aging and the new one isn't here yet several things happen:

  1. Publishers close or fire people
  2. Publishers take less risk and go conservative (sequels, less 3rd party development)
  3. Developers close down as they can't sell their pitches to publishers
  4. Magazines/Media closes as they are dependent on marketing spending

Some explanation here: most console games are sold to owners who own the console for the 1st year. In other words console sales influence the next 12 months game sales volume. On the other hand: less console sales mean less software sales for that reason. Check current console sales history.

So this causes a dire news coverage and you might take the impression away that we are in deep trouble. In fact we are not - we are in the best state we will be in the next 5 years.

The reason is simple: during that time called 'transitions years' the games industry is most creative and usually comes up with some new toys to play with. In the past transision years we had things like 3d hardware, CD rom, DvD, the internet & team based games and MMO's to drive new categories.

This transition we got smartphone/tablet gaming, or going digital generally which allows even small developers to publish worldwide: basically this fixes the problem #3 above for the next transition years, If the developers are adapting.

Transition years usually cause trouble for publishers or developers who do not adapt or do not want to adapt. It happens all the time as some of those companies start to be comfortable what they do and so they lose the lead.

But listen, we are the gaming industry. We live from innovation, from change, from new technology, from new gadgets and devices or software concepts. If you start to stand still and feel comfortable or want to be, then you are in the wrong industry.

Change is good. And 2013 will be the biggest change for our industry we ever experienced. Exactly that is the reason why I love this industry.