As last year was wrapping up,
James was asked to share his opinion
for some of those "Hot Trends of 2016" articles.
These sort of predictions are inherently silly
and the single best way to stick your foot in your mouth.
But there were a couple of interesting things
that caused James to think about
that aren't really being discussed about in most of those pieces.
So what the heck,
let's talk about a few of them here.
(intro)
Now I'm not making predictions here because I have no idea what's going to happen,
but there are definitely a few interesting things worth keeping an eye on during 2016.
Things that have a chance to affect the industry depending on how they pan out.
They're not the sort of things that we'll see an enormous impact from this year,
but depending on what we see from them this year,
we may be able to suss out some of the big things things that'll happen
in the industry a few years down the line.
I'm gonna start with the one
that I'm personally most intrigued by,
the portable Steam Machine.
For a long time I've struggled to see a place in the market for the Steam Machine.
There are people who are absolutely going to love it, of course.
But for many of the people who are interested enough in Steam Games
to pay for a specialized piece of hardware to play them,
well, they already have.
They picked up a PC that's robust enough
that it can do more than just
browse the internet and pump out Word documents.
Which means that for a lot of the folks out there they really don't see the point
in picking up something they could easily have just right now
by plugging their current device into a TV.
But the idea of a portable Steam Machine
makes a ton more sense to me.
I mean, there's a lot of PC games out there
that would be fun to play on the go, but on the industry side it presents an additional benefit.
It would allow smaller developers to crack into the portable market
without sacrificing the ability to develop for PC.
All you'd have to do
is make sure your main specs are in-line
with whatever the baseline Steam Machine portable is.
And don't get me wrong,
I love touchpad games, too,
but this could mean that we finally see a portable market
where it makes economic sense
to develop for a controller-styled device again
and one that doesn't have the strictures
and hardware limitations of current Nintendo devices.
Of course, much of this depends on how well the built-in Steam controller works on the go
and whether the initial generation of games
for the portable Steam Machine manage to build in a UI setup that's viable
on both a standard screen and a tiny handheld one.
Still, bringing the diversity and ease of development
of the PC market to the handheld space
could provide us with a host of experiences
we've never been able to get on the go before.
Or it could just tank.
I don't know.
Next, there's two really interesting questions
coming out of China to watch this year.
I think the big one surrounds
the rapid acquisition of non-Chinese game developers
by Chinese companies.
Up until this point, there's been an almost mad dash
for Chinese companies to acquire Western developers.
But I think this year we'll see
the natural coalescing of a clearer strategy
for how to go about this,
because there have been some huge successes
that have come out of this mad dash,
but also some major failures.
The gold rush phase is clearly coming to an end
and I believe we're entering
a more strategic, more measured phase of acquisition.
What this refined acquisition strategy
will eventually become is unclear,
but as we watch it begin to come together this year,
we'll get some idea of both the amount of Chinese capital available in the future
and the amount of control Chinese parent companies expect to have over their acquisitions.
I think a good canary in the coal mine
is going to be Riot.
It'll be interesting to see
how hands-off Tencent remains with Riot
after the 100% acquisition that happened.
So far, despite many articles warning of the influence of Chinese publishers,
many of the Chinese acquisitions have actually remained more independent
than companies acquired by major U.S. publishers like EA.
And Riot has been so phenomenally successful
that there's really no reason
for a parent company to tinker with it.
So, if we see any changes,
it may be indicative of a shift in thinking
about how foreign developers should be managed.
Additionally, it's worth watching to see
if Tencent tries to better integrate Riot with some of it's other services
or tries to leverage the brand
more heavily with toys, or films, or spin-off games, or games on other platforms.
One of the possibilities for future strategy around many of these acquisitions
is to take developers with a successful game
and find additional ways to monetize them
without messing with the game itself at all.
Things that your average developer
would struggle to do on their own.
Ok, second:
I think China has another potentially major seachange
waiting in the wings for the game industry.
For years, China's had a enormous internal game development market
and we've seen this market affect the rest of the world.
Many of our mobile free-to-play cues
have been borrowed from that industry.
But, with the recent lift of the console ban in China,
comes the question of whether China
will aggressively enter the console market from the software side.
That could be big.
Watch for the announcement of Chinese console studios this year
and look to see if Chinese console products start to see release.
If they do, it'll be a shot in the arm for the console industry
and open up the question
of whether Chinese games will stay locked within China
or if efforts will be made to localize them and export them around the globe,
bringing an interesting, new cultural perspective
to the world of console gaming.
Sorry, I know a lot of this has been business-talk,
but many significant industry changes
are driven by business in some way or another.
Which brings me to our last thing.
This year, keep an eye on the mega-acquisitions
that happened over the last few years.
The purchase of Minecraft for 2.5 billion and King for roughly 6 billion.
Seeing how those have played out by the start of 2017
is going to be telling.
Just to put it in perspective,
the combined cost of those 2 game entities
is slightly more than Disney paid
to get their hands on both Lucasfilm and Marvel.
That may seem ridiculous to you and I agree,
but I'm also aware that I could be very wrong here.
I think this is the year where we'll learn
whether or not there is an acquisition bubble happening.
I believe there is and, if I'm right,
we're going to see the theoretical valuation
of a lot of game companies crash over the next few years,
making it harder both to get funding
and to get a good deal on venture capital in the years to come.
But then again, if King manages to control half of the top slots
in the Apple store for most of this year,
and if Microsoft manages to sell half a billion dollars worth
of Minecraft spin-offs and add-ons,
or if they announce a Minecraft 2
that somehow manages to eclipse the original,
I may be proven incredibly and happily wrong,
and we'll all have to rethink what game companies are actually worth.
Anyway, I hope that at least makes some of the more innocuous-seeming game news
a little more interesting this year.
It'll be fun to come back to this episode
a few loops of the Earth down the road
and see if anything came of these possibilities.
See you all next week.