Train2Game News: Digital distribution to be 66% of video games market by 2017

Digital distribution will account for two thirds of games industry revenue by 2017. That’s according to a report by DFC Intelligence, which predicts video games software revenues will reach $70 billion by the same year, up from $52 billion in 2011.

The report also suggests that it’ll be the PC games industry that makes up most of the revenue growth, claiming 39% of the market, with consoles on 36% and mobiles on 25%.

“Digital distribution, already widely accepted among core gamers globally, is clearly broadening access to products and driving much of the industry growth,” DFC Intelligence CEO David Cole told Gamasutra, adding that social games might struggle due to not being appealing to ‘core gamers’

“The bottom line is core gamers spend money on products they like and right now the game offerings on sites like Facebook are simply not appealing to that demographics.” he said.

Digital distribution is becoming an increasingly useful tool for game developers, with TIGA CEO Dr. Richard Wilson previously telling the Train2Game Blog that smaller studios should take advantage of it.

“Digital distribution is obviously creates many opportunities for start-up and small studios.”  said Dr. Wilson in an interview recorded at The Gadget Show Live, as four Train2Game student teams competed in Make Something Unreal Live.

“Sometimes they’ll have to rely on other people to help them, distribute or PR their games successfully, but it does give studios a much greater sense of control over their own destinies because they are self-publishing, they are moving towards digital distribution.” he added.

There’s more on digital distribution here on The Train2Game Blog.

What are your thoughts on the potential of distribution? Do you believe that it’ll make up the majority of the market by 2017?

Leave your comments here on The Train2Game Blog, or on the Train2Game forum.

Train2Game interview: TIGA CEO Dr. Richard Wilson on games tax relief – part 2

Train2Game students will be aware that the government announced games tax relief in the March budget, but what does it actually mean? At Gadget Show Live, Train2Game News sat down with TIGA CEO Dr. Richard Wilson who explained in-depth what games tax relief is, the campaign behind it, how it’ll help UK game developers, including Train2Game students, and more.

In part two of our extensive three part interview, Dr. Wilson tells Train2Game News how games tax relief will benefit the UK games industry, and smaller studios in particular, and discusses the benefits of digital distribution. Part one of our interview is available here.

Leave your comments here on The Train2Game Blog, or on the Train2Game forum.

How is games tax relief going to fundamentally improve things for UK game developers?

I’m glad to say the benefits are manyfold. The first benefit is that it’ll create a more level playing field in terms of attracting inward investment into the games industry. Over the last few years the UK has been competing on an unlevel playing field, with our competitors in Canada, the United States, France, Singapore and elsewhere have had tax breaks for games production while the UK hasn’t. Over the last four years we lost 10% of our workforce, we roughly lost around £50 million in investment each year, quite a significant drop.

So, the first thing is it’ll make the competitive playing field for international investment more even. That means that Activision Blizzard , Microsoft, or Square Enix, when they’re looking to invest, they can look at the UK and see that not only do we have a fantastically skilled workforce, but they’ll also see really good tax incentives in place as well. It makes the decision of where to invest much more about the skills of the workforce than the financial incentives.

The second thing is that it will lead to more investment coming into the games industry.  Not just from global publishers, but also from venture capitals, private equity investors who will be looking to invest in the games industry in the UK because of this tax treatment.  Those investors are not only global investors, but also indigenous investors as well, so there’ll be more money coming into the games industry.

The third really good thing is that it’ll enable UK game development studios to take on more staff. The cost of game development, in essence, will be lower next year than it has been for the previous two, by quite substantially. That’s fantastic because UK game development businesses will have more money to spend on hiring more staff and making more games.

I think we’ll also have a further positive effect on learning providers, because they’ll be able to say ‘study games courses and get into the games industry.’ It’s great for Train2Game as a key provider of training for the games industry because so many more students will now have an opportunity to get jobs in the sector.

Then I suppose the final point is that it’ll give more scope for more game development studios to set up and grow. So I imagine many Train2Game students won’t simply want to work in a studio, they’ll want to set up their own businesses. And when you have an environment where you have more people coming into the industry, training and learning and coming into the sector, you now have an opportunity for those students to set up their own companies, which is excellent. So, we’re going to have more investment, more jobs and more studios being set up.

Tell us more about games tax relief will benefit smaller and start up studios?

When we were campaigning for the tax break on games production, we were specifically weighted the proposal to help smaller and startup companies, so we suggested to the Treasury that there should be two levels of tax relief.  One should be a 25% level of relief on any game between £50,000 and £3 million, then a 20% relief for any game with a budget of more than £3 million, so we’ve disproportionally weighted games tax relief on smaller and startup studios.

So in essence, smaller studios will be getting more money, they’ll be getting more money back in tax relief. It’s worth emphasizing that the companies that’ll benefit from the tax relief won’t simply have a lower tax burden to pay, because games tax relief doesn’t just reduce the cost of cooperation tax. If your company is loss making, but your game qualifies for the tax relief, you actually get money back from the Treasury. How cool is that? You actually get money from the government which is brilliant. So, all those startup companies that are unprofitable in year one, or even year two, they stand to get more money from the Treasury they can invest in their studio and make it more sustainable.

This goes hand-in-hand with TIGA encouraging UK developers to distribute games digitally too.

TIGA, to emphasise, is focused on making the UK the best place in the world to do games business and we’re working really hard to help smaller start-up studios. So many of our members now are start-up studios who’ve only been around for a year or two, so it’s really important for us to help those companies.

As part of that process, we have been helping studios through best practice information advice to grow their companies and move towards digital distribution. So we’re very shortly bring out a guide on self publishing which has been co-written by fifteen members of TIGA including people like  Patrick O’Luanaigh from nDreams, Jason Kingsley from Rebellion, companies that are already involved in digital distribution.

Digital distribution is obviously creates many opportunities for start-up and small studios. Sometimes they’ll have to rely on other people to help them, distribute or PR their games successfully, but it does give studios a much greater sense of control over their own destinies because they are self-publishing, they are moving towards digital distribution.  The tax break will help us in that process because it’ll help to create more sustainable studios.

In essence, would you suggest to a Train2Game student studio, say the winners of Make Something Unreal Live, that digital distribution is the best way to attempt to become successful?

I generally think it depends on the circumstances of that particular studio and the type of game they’re making. But I do genuinely believe, other things being equal, it must be better to control and own your own IP and move into digital distribution. That’s the way the market is moving. Retail sales of physical games have fallen for four years in a row in the UK, its digital sales that are increasing.

The trauma that’s taken place at GAME confirms the challenges for physical retailers, and 80% of all the new companies that were set up in the UK last year are making games for digital distribution. The trend in the UK is towards digital distribution, so by and large, I’d encourage the winners of Make Something Unreal Live to go into digital distribution to be a self-publisher and I hope at TIGA we can help them achieve their dreams.

Part three of the Train2Game News TIGA CEO Dr. Richard Wilson is here.  For more information about TIGA and their involvement with Train2Game, see the official website. And for the latest TIGA news, keep reading The Train2Game Blog.

Train2Game news: TIGA CEO urges smaller studios to focus on digital distribution

Train2Game students who wish to set up their own game development studios should focus on digital distribution. That’s according to TIGA CEO Dr. Richard Wilson who was speaking to Train2Game News in a soon to be published interview.

“Digital distribution is obviously creates many opportunities for start-up and small studios.”  said Dr. Wilson in an interview recorded at The Gadget Show Live, as four Train2Game student teams competed in Make Something Unreal Live.

“Sometimes they’ll have to rely on other people to help them, distribute or PR their games successfully, but it does give studios a much greater sense of control over their own destinies because they are self-publishing, they are moving towards digital distribution.”

“The tax break will help us in that process because it’ll help to create more sustainable studios.” said the TIGA CEO.

Dr. Wilson suggested winners of Make Something Unreal Live, Commando Kiwi, pursue a digital business model.

“The trend in the UK is towards digital distribution, so by and large, I’d encourage the winners of Make Something Unreal Live to go into digital distribution to be a self-publisher and I hope at TIGA we can help them achieve their dreams.” he concluded.

The Train2Game Blog interview with TIGA CEO Dr. Richard Wilson at Gadget Show Live will be published this week.

For more information about TIGA and their involvement with Train2Game, see the official website. And for the latest TIGA news, keep reading The Train2Game Blog.

What are your thoughts on Dr. Wilson’s advice on digital?

Leave your comments here on The Train2Game Blog, or on the Train2Game forum.

Train2Game news: TIGA report highlights importance of network gaming to UK studios

Train2Game’s independent awarding and examination body, and representative association of the UK games industry, TIGA, has revealed that 80% of UK game developers are focused on developing games with online or network integration.

That’s according to TIGA’s news report, ‘Making Games in the UK Today: A Census of the UK Developer and Digital Publishing Sector.’ It reveals that the majority of UK game developers are working on mobile, MMO, social or online gaming, and that just one third of UK developers now produce games which are exclusively sold via traditional retail.

The key findings of the TIGA report are as follows:

  • 71 per cent of start-ups between 2008 and 2011 are focused exclusively on network gaming, while 10 per cent work on both network gaming and retail. Just 19 per cent of these new UK games development businesses work exclusively on retail gaming.
  • Across the British games industry as a whole, 67 per cent of British games companies now work either exclusively or in part on network gaming.
  • Network gaming is projected to grow at 21 per cent every year between 2009 and 2015 (versus retail gaming which is falling by over 3 per cent per year over the same period).
  • Network gaming grew in 2010 to represent 44 per cent of the global video games software market.
  • 80 per cent of new start-ups between 2010 and 2011 are independent developers.

The findings are based on a survey conducted by Games Investor Consulting in 2011 of 75 per cent of the UK’s games businesses.

“TIGA’s new research shows that in the UK digital distribution is in the ascent and retail is in sharp decline.” said TIGA CEO Dr. Richard Wilson, who addressed Train2Game students at last November’s Train2Game & Epic Game Jam.

“Four-fifths of new UK game companies are working exclusively or in part on network gaming, such as mobile, massively multiplayer and social gaming. TIGA wants to see a flourishing developer and digital publisher sector, with rising numbers of start-ups and growing sustainable studios and declining business mortality rates. The rise in network gaming offers the opportunity to achieve these objectives.” Dr. Wilson added.

Chairman of TIGA’s Self-Publishing Committee and MD of nDreams Patrick O’Luanaigh also welcomed the findings of the report, arguing online gaming could potentially provide great opportunities to UK studios.

“For too long developers have laboured under the traditional ‘give your IP away, never see royalties’ model. So TIGA strongly supports the trend towards online gaming and self-publishing.” he said.

“Online gaming can deliver greater company stability and revenue sustainability for studios. This is because studios can circumvent traditional publisher business models and build relationships directly with customers. Network gaming businesses can create original games, retain their IP and attain greater financial stability. O’Luanaigh continued.

“TIGA will help indie developers and digital publishers to take advantage of the shift towards self-publishing and network gaming. As part of this process, we will shortly publish the TIGA Guide to Self-Publishing which will provide useful expert advice for start-up studios. By helping start-ups navigate the challenge of self-publishing (and co-publishing), TIGA will help to realise its vision of making the UK the best place in the world to do games business.” The nDreams MD concluded.

For more information about TIGA and their relationship with Train2Game, see the official TIGA website.

So Train2Game, what do you make of the report? Is it essential for developers include network options in games now?

Leave your comments here on The Train2Game Blog, or on The Train2Game forum.

Train2Game news: EA’s Origin has 9.3 million registered users

Train2Game students might be among those using Origin, EA’s digital distribution service, which the publisher claims now has 9.3 million users.

The number would make EA’s Origin about a quarter of the size of rival digital distribution service Steam which has more than 40 million users.  EA also claim that the service has generated $100 million in sales in its first 12 months of operation.

EA are using Origin to generate sales for popular titles such as Battlefield 3 and Star Wars: The Old Republic which aren’t available to purchase or play through rival service Steam. Mass Effect 3 will be an Origin exclusive for those looking to purchase it digitally, unlike the previous two games in the series which were available to buy through Steam.

Capcom, Warner Bros and THQ are among publishers that are backing EA’s Origin, allowing their games to be purchased through the service, while Trion Worlds, CD Projekt RED and Paradox Interactive are also among its supporters.

The Train2Game Blog has previously reported that EA are committed to increasing output for digitally distributed games, and these stats seems to suggest the publisher is moving in the right direction.

For news on digital distribution and downloads, see The Train2Game Blog.

So Train2Game, what are your thoughts on Origin’s stats after a year? Do you use the service?

Leave your comments here on The Train2Game Blog, or on the Train2Game forum.

[Source: Develop]

Train2Game news: Obsidian Chief Writer on digital distribution and ‘stabbing the used game market in the heart’

Fallout New Vegas DLCTrain2Game students will be highly aware of the rise of digital distribution, and Obsidian Chief Creative Officer Chris Avellone believes digital is good for game developers and good for the games industry, especially if it can help stop second hand game sales.

Avellone has over 20 years experience of writing and designing RPGs with titles under his belt including Fallout 2, Star Wars: Knights of the Old Republic II, Neverwinter Nights 2 and most recently, Fallout: New Vegas.

“I love digital distribution. For one thing, being environmentally conscious, I really appreciate that we’re not making more boxes and shipping them and creating all that waste. It’s better just to download the game through Steam and not have to have all that packaging.” he told Industry Gamers.

However, it isn’t just the green factor that Avellone sees as a positive of digitial distribution, he also believes it allows game development studios to be more flexible thanks to not having to rush towards deadlines.

“One of the things I enjoyed with Fallout: New Vegas was that digital distribution of the DLC made things more flexible in terms of getting the content done. You didn’t have to worry about production times for discs, and so you could take an extra week if you needed that to get things right.” said Avellone.

The Fallout: New Vegas writer also added, with some aggression, that digital distribution can kill off second hand games.

“Of course, one of the greatest things about digital distribution is what it does to reduce the used game market. I hope digital distribution stabs the used game market in the heart.” he said.

The Train2Game blog has previously reported on the extensive advice the game design veteran has given on getting into the games industry.

So Train2Game, what are your thoughts on Avellone’s comments on digital distribution? Does it help game developers? And will it ‘stab’ the second hand games market?

Leave your comments here on the Train2Game blog, or on the Train2Game forum.

[Source: Industry Gamers]

Train2Game news: Indie devs have “far more opportunities these days” say Team 17

Train2Game students looking to form their own indie studios will certainly be buoyed by this; there are more opportunities than ever to break into the industry thanks to digital distribution.

That’s according to Yorkshire based Worms developer Team 17, who’ve been in the game development business for over 20 years.

“I actually think there are far more opportunities these days overall. If we were only talking about PSN, XBLA and Steam I’d tend to agree, but with the whole mobile and browser side thrown in, it’s bigger and better than the late ’80s.” Team 17 Managing Director Debbie Bestwick told The Guardian when asked if there are comparisons between today’s digital market and the bedroom coding days of the late 1980’s.

And Bestwick believes the rise of mobile gaming, on the iPhone in particular, means it’s actually easier for prospective game developers – such as Train2Game students – to enter the market.

“Digital distribution has removed manufacturing and physical distribution costs; hence the entry point is so much lower these days than back then” she said.

“If anything, the App Store reminds me more of the whole shareware scene in the ’80s, just shaken up and organised, and it is a great place to be.”

And in more good news for Train2Game students, the Team 17 Managing Director is optimistic about the future of the British game industry, “because right now we’ve got more platforms, bigger audiences, more direct to consumer sales channels and lower entry costs than ever before for all indie developers.”

“Our traditional market has changed forever with the introduction of smartphones, social gaming and digital store fronts” added Bestwick.

So Train2Game, what are your thoughts on Bestwick’s comments? Do you believe it’s the best time there’s been to be an indie developer? Is self-publishing a model you can see yourself following?

Leave your comments here on the Train2Game blog, or on the Train2Game forum.

[Source: The Guardian]

Train2Game news: Sony – ‘Time still not right’ for download only consoles

Train2Game students will be aware of the growth of digital distribution in the games industry, with games available to download via services including Xbox LIVE, PSN and Steam.

And while the Train2Game blog has previously reported that some believe future consoles won’t use discs at all, Sony don’t believe this will happen any time soon.

“We believe, for some consumers, the time is [right], but for other consumers, the time is still not [right],” SCE Worldwide president Shuhei Yoshida told Edge in an interview about the PlayStation Vita

Sony officially revealed their new handheld console at E3 earlier this year.

Yoshida said that current internet connections mean that it’s not yet time for a console to go digital only. This is despite Sony attempting a download only console with the PSP Go.

“So we believe the time is still not right to go download-only as a platform. Some PS Vita titles, like Uncharted: Golden Abyss, will be close to 4GB in size, which could be too large to download for consumers who do not have a fast broadband connection.”

Yoshida added that some consumers will appreciate being able to go to a retailer and pick up a physical copy of a game.

“Also, some consumers like shopping in retail stores, talking to knowledgeable store clerks, buying and playing games on the spot. We do not want to remove that capability from consumers.”

Sony are also aware that downloads haven’t taken off in every part of the globe.

“There are consumers in parts of the world – this is a global device – where the digital model has not yet fully been embraced,” added SCEE CEO Jim Ryan.

Last month, the Train2Game blog reported that Crytek don’t believe that the industry is ready for digital distribution via cloud gaming.

So Train2Game, what are your thoughts on Sony’s remarks about digital distribution? Can you see consoles going download only?

Leave your comments here on the Train2Game blog, or on the Train2Game forum.

[Source: Edge via Industry Gamers]

Train2Game news: Ninja Theory – Triple A doesn’t let developers take risks

Train2Game blog readers may have seen a post last month in which Ninja Theory Creative Chief Tameem Antoniades praised the ‘digital revolution’ and the creativity it brings.

Perhaps understandably, he also believes that the traditional Triple-A retail model is in fact harming creativity in the games industry.

“If you’re paying 60 bucks for a game, you want it to give you everything under the sun,” Antoniades told Gamasutra.

“It seems like Hollywood’s got much more diversity than the games industry has. And I don’t know exactly why this is, but I suspect it’s the publishing, retail model of 40 pounds, 50, 60 bucks a game doesn’t allow players to take chances with their money.

“It doesn’t allow publishers or developers to take risks. And the only way you can be sure to sell to someone is to sell them something familiar.”

As previously reported by the Train2Game blog, Ninja Theory’s Enslaved: Odyssey to the West was critically well received, but failed to make the impact needed at retail. As a result, the game won’t be getting a sequel.

However, the Ninja Theory chief believes that innovative games do sell, but the current retail and publishing model makes it difficult.

“I think that ultimately innovation does sell, and messaging is needed,” he said.

“But somehow there’s not enough diversity, I think, in our business models to create interesting, alternative games. At least on the triple-A side of things, the top end market. You’re not seeing very high end innovation happening.” Antoniades concluded.

Yesterday, the Train2Game blog reported that Bioware believe mobile games do let game developers take risks.

So Train2Game, what are your thoughts on Antoniades comments? Is the traditional retail model and the need to be successful stifling creativity in the games industry?

Leave your comments here on the Train2Game blog, or on the Train2Game forum.

[Source: Gamasutra]

Train2Game news: Consoles will continue to be the ‘gold standard’

 

Train2Game students will be aware about the huge increase in digital gaming over the last few years, with smartphones, Steam and as seen at the Eurogamer Expo, OnLive, all giving consumers ways of downloading or streaming games.

And as reported by the Train2Game blog, some have even speculated that there will eventually be no place for traditional consoles.

However, retailer GameStop believes that consoles are very much here to stay and for a long while yet.

“We continue to believe that the console is a strong platform and will continue to be the gold standard” GameStop President Tony Bartel told Industry Gamers

And he believes that digital content will become an increasingly important area for consoles.

“People will begin to digitally download first a lot more downloadable content. Eventually, full games will become more relevant to some consumers who want to do that”

“Then we think that streaming will continue to grow. As you get additional bandwidth, we think that it’s going to become more prevalent over time, which is why we’ve invested in it.” Bartel concluded.

The increasing importance of digital to consoles echoes comments made by THQ CEO Brian Farrell. As reported by the Train2Game blog, he believes future consoles won’t use discs and this will only be a good thing for game developers.

Meanwhile, Crytek believe that the games industry isn’t quite ready for an all digital cloud gaming way of working.

So Train2Game, do you believe consoles will always be a part of gaming? Or does the rise of digital mean that they have limited time left in the spotlight?

Leave your comments here on the Train2Game blog, or on the Train2Game forum.

[Source: Industry Gamers]