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A videogame developer can be an individual or company that creates the software for computers or videogames. They are not to be confused with videogame publishers. Publishers usually fund the developers and are in charge of marketing and distribution of the games (Stibbe 2005, p.64). Often, a publisher may have in-house development units, which are referred to as in-house developers.
There are also the third-party or independent developers. An independent developer designs original games, programs them and sells them for a royalty to publishers. Importantly, it retains ownership of the intellectual property in the characters and game designs, so sequels can be created. However, this level of independence is increasingly rare in the industry where publishers generally have more bargaining power over the creative and business aspects (Stibbe 2005, p.64).
Large developers are able to developed games for multiple platforms. These may include console-based systems such as Sony Playstation 2, Microsoft Xbox, Nintendo, handhelds and PC games. The smaller developers usually specialized in a single platform.
Developers play an important role in the videogame industry. Their support for console manufacturers can have a major influence in the consoles’ success (Woolley, S. 2005).
When Sony launched its first PlayStation, it was able to draw key developers like Namco Inc. to design games for its console. This marked the beginning of a strong run of popular videogames for the PlayStation, and is believed to be one of the important contributing factors for Sony’s eventual dominance as market leader (Luh 2003, 118).
With the proliferation of licensed products such as movie tie-ins and sequels, developers are facing criticism regarding the lack of original content. For example, Electronic Arts (EA) generates 50 per cent of its turnover from sequels, franchises and licenses that it can reproduce on an annual basis. The increased cost of game development and the need for publishers to generate a consistent revenue stream has contributed to a finance and support system that is risk-averse and cautious (Newman 2004, p.46). Developers and publishers are likely to concentrate resources on fewer games and choose predictability over creativity (Stibbe 2005, p.64).
The new generation of videogame consoles from Sony (PlayStation 3)and Microsoft (Xbox 360) poses new challenges for the developers. The average development cost for a blockbuster videogame these days is already in millions of dollars, with 10 million no longer unusual. The complexity, and therefore costs, of making games is likely to increase in order to match the new technological specifications of these consoles. Many of the small, independent developers may be forced to consolidate or be acquired in the new gaming environment (Lewis 2005, p.126).
Alternatively, small developers may still be able to seek out niche markets in this highly competitive environment. One way is to specialize in developing games for lower-end systems such as hand-held devices like the PlayStation Portable.
Developers can also concentrate on making budget-priced games for the current or past generation consoles. The past generation systems usually get passed down to younger siblings and children, and the budget-priced games can attract a broader demographic. With the combines installed base for PS2, Xbox and GameCube at 53 million units in the US alone, there is a ready market for these games targeting children, family or casual gamers. In additional, the dropping cost of hardware prices is likely to widen the market for current generation consoles and games (Lees 2005, p.88).
Nintendo could also provide a lifeline for small developers. Nintendo seem to have conceded the high-end of the market to Sony and Microsoft and is focusing instead on making less expensive games and devices (Lewis 2005, p.126). Its next generation console, the Revolution, is believed to have modest hardware capabilities compared to its competitors. This could provide a niche market for small developers that cannot afford the huge budget required for PS3 and Xbox 360 development (Sheffield 2005, p.4).
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Choo KeeFong 23:13, 27 Oct 2005 (EST)
