Expanding outside of the world of games will become a common move for big publishers, says SuperData's Joost van Dreunen
There are few places in the world tackier than Las Vegas. From the moment you arrive and politely sit through the banter of a chatty cab driver on your way into town, there is a distinct aesthetic that overwhelms the senses.
I can’t quite put my finger on it. It may be the enormous fountains at the Bellagio, or that mini Eiffel Tower. Don’t get me started on that gold, gleaming Trump building. Las Vegas, it seems, is an innocuous collection of dolled-up buildings, piled together in the middle of the desert.
Inside the casinos, there’s a persistent, dull smell of cigarette smoke and thick carpet. Fields of slot machines rattle and blink. Despite being generally eschewed by game designers for their crude mechanics of keeping people in an infinite dopamine loop, casino-style games hold some valuable lessons for the games industry.
ONCE YOU’RE IN, YOU’RE IN
For one, back in the day, gambling tables generated so much revenue that they allowed casinos to offer hotel rooms and buffets for cheap – or even free – to visitors. User acquisition was easy, because who doesn’t like getting a free hotel room? Casino operators reasoned that if people don’t stay at your hotel, they won’t play at your machines and tables, and you’ll go out of business. So it was crucial for the different casinos to maximise their traffic. Over time, this led them to offer increasingly outrageous features and add all types of entertainment to draw in customers.
Casinos also became experts at retention. Their very architecture is designed to be confusing. There are no clocks, no direct sunlight and you can’t go anywhere without having to pass through a large bank of slot machines, each vying for your attention. Every casino offers an abundance of clothing shops, jewellery outlets, souvenir stores, bars and restaurants. There’s a loyalty program for pretty much everything. Keeping people in the casinos, and getting them to spend their money while there, became as important as just getting them to visit in the first place.
You can see where I’m going with this: Las Vegas provides physical evidence of the way underlying economics inform game experiences and design. But here is the lesson in all this: Las Vegas has been changing.
"We often talk about the design, development, publishing and marketing of games as if they exist in complete isolation. Which they don’t."
Joost van Dreunen, SuperData
SIN CITY’S SURVIVAL
The economics of offering hotel rooms for free no longer makes sense. Instead, casinos now seek to offer a complete experience: there are world-famous DJs, spectacular acrobatic performances, celebrity performers and high-brow cuisine – never before had I paid $35 for a plate of spaghetti – all for the sole purpose of entertaining you.
Today, it is the so-called ‘resort fees’ that are the primary source of income and much less so the money earned from games. No longer do one-armed bandits and roulette tables bring in enough to float the rest. The games, while still a big draw, are – at least from a financial standpoint – increasingly less at the core of Vegas.
All too often we talk about the design, development, publishing and marketing of games as if they exist in complete isolation. Which they don’t. Games are highly contextual in every aspect. But what if games themselves become a sideshow?
Consoles, in their bitter battle over the living room, continue to diversify their offering, hoping to one-up each other with unique content. The same can be said for mobile games. Now that the lion’s share of the audience has familiarised itself with the various features of today’s smartphones, they’ve also started to explore non-gaming apps. Games, as we’ve seen repeatedly, are an excellent way to teach people how a new type of device works, what its strengths are and how to operate it.
While this may seem far away, we have already seen several major publishers change their strategy to become more like media companies, offering a wider range of entertainment beyond purely publishing games. EA expanded its universe by formalising its eSports efforts and putting its COO, Peter Moore, at the helm. Activision recently acquired ‘key assets’ from Major League Gaming to further build out its tournaments and competitive gaming branch and, later this year, the firm will release its World of Warcraft movie.
It is too early to claim that games are no longer at the centre of the games industry. But in an industry where marketing expenses continue to rise in tandem with the pressure of having to always come up with something new and exciting, companies will look to diversify. More precisely, big publishers will look to mitigate risk – and, by doing so, are starting to lean on activities and revenue streams that are not just games.