The DeanBeat: Game industry predictions for 2013

Even though I have a terrible track record for predicting the future, I find making predictions irresistible. It’s such an exciting time in the game industry that just about anything can happen. Things that I never thought would occur — such as Apple dominating in the sheer number of games on its platform — have now come to pass. The industry is full of disruption and change, from the smallest startups to the biggest companies, as the digital revolution sweeps through the industry. We are, after all, in the crossover era, when game companies invade new platforms. With so much change, the predictions become harder, but they’re also more fun to make.

We’re looking forward to announced games like Grand Theft Auto V and unannounced (but likely) titles such as Call of Duty: Modern Warfare 4. But many of these predictions below go beyond the impact of single launches. (Check out how I did with last year’s here). I have tapped some of our staff for help with them. And please vote for your favorites in our poll (in the web version of this story) and leave comments. Also, check out where we’ve been in the past in our predictions about the road ahead in gaming.

Mobile gets bigger

This trend isn’t a bubble. The growth of smartphone and tablet gaming is an inexorable trend. It’s a no-brainer that it will gather momentum in 2013. Mobile games account for 42 percent of all new game investments, according to investment bank Digi-Capital. Mobile devices are growing fast throughout the world, and we’ll soon have multiple billions of devices that are capable of playing games. Every company is adapting to this change by launching new versions of mobile titles, and many startups are focused on a “mobile first” or “mobile only” strategy. So far, nobody dominates this market.

Hardcore online games will match the quality of console games

Games like League of Legends and Hawken have shown that it’s possible to create great free-to-play hardcore online games as downloadable titles. Soon, you might be able to play these without downloads thanks to better browser technologies (such as WebGL or Chrome Native Client), which make use of 3D graphics hardware on a computer without the need for plug-ins. When the better rendering technology gains traction, then one of the last quality barriers will fall between online games and console titles. The ability to play high-end web games without delays will neutralize the advantage that console companies have had in the home. It will lower the cost of distribution and democratize gaming further. But once this new web publishing platform is more evenly distributed across the development community, the focus will have to be on making better games, not shoveling more out.

The battle royale for gaming will commence

To deal with the invasion of hardcore online titles, console makers will have to respond with something exciting and new. It’s going to be a world war of gaming in 2013 as big players duke it out. Traditional console makers Nintendo, Sony, and Microsoft will go to war with the likes of Apple, Amazon, Samsung, and Google. Microsoft has already set up a broader entertainment network on Xbox Live, but it could lose that position if it maintains its current high subscription fees and a dearth of free-to-play titles.

Apple and Google in particular may not launch “consoles” per se. Rather, if they compete in gaming, it will be an accidental byproduct of a strategy to compete for the hearts and minds of consumers on whatever platform they use. Those companies haven’t designed specifically for gamers, but their platforms have been ideal for developers and publishers trying to reach larger audiences. An Apple television would naturally be a platform for games. The newcomers will use free or 99-cent titles — as well as technologies that transfer images from a smartphone or tablet to a TV — as their wedge into the console space. We’ll see a battle for the living room like never before. And this battle royale will happen on all platforms wherever they’re used.

Microsoft and Sony will both announce and launch their next-generation systems

Chasing the Nintendo Wii U, Microsoft and Sony will announce their new consoles at E3 2013 in June, and at least one of them will introduce the new machine in the fall of 2013. Microsoft may not launch in 2013 since it has a leadership position now. But it shouldn’t try to milk that position and should instead get out ahead of its new challengers such as Apple and Google. Sony has more motivation to get into the market sooner since it came in third place in units sold in the last generation. But developer activity suggests that Microsoft is moving ahead faster with a broader group of allies.

Introducing a new console isn’t just a matter of willpower. It’s the result of mobilizing a whole ecosystem of suppliers, partners, developers, and publishers to support the effort. So while it may be a no-brainer to introduce sooner, the console makers may be forced to wait until 2014. They will also have to build their consoles around a new innovation, such as much better gesture controls, to make the gameplay more magical than it is today.

And if Sony and Microsoft know what’s good for them, they’ll embrace cloud gaming to reduce the cost of their consoles and deal with backward compatibility. And they will give users plenty of options for free-to-play, platform-agnostic gaming. (GamesBeat writer Kat Bailey is a fan of this idea.) They will both embrace free-to-play and cloud gaming. Any new console will thus have to be a hybrid of tradition and the new digital platforms. (Dan “Shoe” Hsu, the editor-in-chief of GamesBeat, fed me a version of this prediction.)

Nintendo’s Wii U console will fail

So far, the Wii U is selling out, but not in astounding numbers. And while games such as ZombiU are fine, they’re getting weak reviews on Metacritic. In fact, the highest rated game on the Wii U this season is Mass Effect 3: Special Edition, a retread of a game that has already been available on the Xbox 360 and the PlayStation 3. This isn’t the right way to launch a brand new console. While initial supplies may sell out, what will happen three months or six months from now as the novelty wears off and gamers await better-looking titles on the upcoming consoles or the PC?

Nintendo embraced the consumer love for tablets with its tablet-like controller, but that hasn’t put a dent in demand for tablets. In the context of a more competitive industry with multiplying choices, I don’t see the Wii U as a survivor. The best thing Nintendo can do is cut the price, and that’s never been a winning formula for long-term success. I’m hoping Nintendo surprises us, but I am not counting on it.

Smart TV games will finally become a reality

This prediction crystallizes several of the trends already mentioned. Apple still hasn’t introduced its television. If and when it does, apps will come to the connected TV, nicknamed the Smart TV, in a very big way. But while Apple may eventually validate this trend, the market won’t wait for one company. In the meantime, Google will keep pushing on Google TV. Manufacturers like LG, Samsung, and Vizio are pushing hard on cloud gaming on the TV, where all you need to play is a web connection and a game controller. Ouya hopes to enter this market with a $99 box in the spring that will move Android games onto this same screen.

The business model enabled by apps on the TV is very attractive for consumers. Free-to-play or 99 cent apps may be good enough for a lot of players, particularly if there is a path to high-end hardcore games as well. Gesture or voice-recognition technologies will add novelty to the Smart TV gaming experience. Given the option to forgo the expense of $60 games and $300 consoles, many consumers are likely to prefer playing unified apps on TVs that can also be played on tablets and smartphones. That could ignite a huge wave of gaming consumption.

Gesture technologies will take off

Motion-sensing technologies like the Nintendo Wii remote, Microsoft’s Kinect for the Xbox 360, and the Sony PlayStation Move were just the start. Intel calls the new era of gestures “perceptual computing.” Controlling a game or computing device with your hands, body, or voice could become much more accurate in the next generation. Kinect’s accuracy trailed off if you got too close to the TV. But startups such as Softkinetic have demonstrated that gestures work well just inches away from a laptop’s webcam now. This helps make general computing easier just as touch screens do with Windows 8. But the possibilities for gaming become much more interesting with precise technologies that can detect small finger movements as well as the activity of everyone in a room. And these gestures don’t have to be limited to PCs or consoles. They could also be integrated over time into smartphones and tablets. Intel itself promises to launch perceptual computing in 2013.

First-person shooter games will grab market share on tablets

Based on what I’ve seen so far of The Drowning (pictured right), which is being developed by Scattered Entertainment and will be published in 2013 by DeNA’s Ngmoco, I’m convinced that first-person shooter games will finally take hold on tablets. The Drowning has a clever gesture-based user interface that works with touch screens — something that shooters haven’t done well so far. If you tap two fingers on the screen, your weapon will fire at the midpoint. Tap one on the screen, and your character will move to where you tap. And swipe the screen to turn your characters head. It’s simple, and it is just one example of how the multibillion-dollar shooter business could make its way onto tablets. And it means that mobile games will be playable without a game controller.

The game controller will become the king maker

Startups like PrimeA (maker of Moga controllers) and Green Throttle Games want to turn the humble game controller into something more important. They can do so if the above trend doesn’t work out so well and gamers prefer to play their mobile games with traditional handheld controllers.

Green Throttle is creating a cool user interface app that allows you to use its controller to play Android apps on a TV, connected to your smartphone or tablet via a HDMI cable. (If better Wi-Fi technology comes along, this will get easier to do.) With controllers used in this way, Android games can invade the realm of the $60 console game. The controller could blast a hole through the barrier between two segments of the game market.

The barriers will come down between real-money gambling and social casino games

Likewise, the barriers are coming down between real-money online gambling and social casino games, where the winnings are merely virtual casino chips.

Startups like Betable enable social casino games to be converted to real-money online gambling in territories where it’s legal. Zynga is counting on changes in U.S. laws to enter the real-money gambling market, but it will launch in the crowded United Kingdom market first. Facebook has also embraced real-money gambling by allowing Gamesys to launch such games in the U.K.

This will set up a clash. The social casino game operators have the biggest games like Zynga Poker but the lowest revenues per paying user. Online gambling firms make a lot of money from relatively few heavy gamblers.

But marrying the two businesses will make it much easier for the online gambling firms to recruit potential high rollers for low costs. Meanwhile, U.S. states and the federal government are loosening the restrictions on online gambling. This trend may take years to play out, but it will gather more momentum in 2013.

eSports will take off

Gaming has been a professional sport for a while, but with releases such as League of Legends from Riot Games, it is gathering momentum. Rising in parallel with this trend is the livestreaming of games enabled by Twitch, which has been integrated into the online shooter Planetside 2 (pictured right). Community has also become a much bigger deal in ensuring the success of a game, according to gamer social network Raptr. That’s because the improved engagement that comes with promoting the community around a game leads to higher awareness, revenues, and profits.

ESports have been growing in countries such as China and South Korea, but Major League Gaming, WCG, and other leagues are offering bigger prizes and more venues for gigantic tournaments. And it’s no surprise that Activision built livestreaming, shoutcasting (narrated games), spectating, and league play into Call of Duty: Black Ops II. Gamemakers should already know that you don’t just milk your users. Give them what they want, and they will pay you back many times over. Let’s hope that more companies are going to learn the lesson: It’s the community, stupid. (GamesBeat writer Rus McLaughlin suggested a version of this prediction.)

Gamification will continue to spread the influence of games

Gamification, or the use of game mechanics to increase engagement in nongame applications, is the path to spread game thinking far and wide. It has applications in everything from fitness devices that encourage you to exercise to enterprise applications that reward you for completing tutorials.

Badgeville, Big Door, and Bunchball are providing the services for all kinds of companies to embrace gamification, either by rewarding consumers and employees with achievements or leading them to compete with rivals through leaderboards. A lot of these efforts will fail as many games do. But the ones that are done right could lead to a big expansion in engagement and usage. Gamification is in its hype stage, but the reality will start setting in during 2013 as to what works and what doesn’t. And it will carry the flag for gaming into all circles of business.