Victims of Success?

It’s no secret that computer gaming is big business. Last year, sales and rentals worldwide totaled more than $14 billion. And this year, that figure is expected to top $16 billion.

What may not be so obvious are the dramatic changes rippling through the gaming industry as a result of its unprecedented success. Indeed, as the stakes have risen, so has the competition among game companies to meet the growing expectations of sophisticated players with increasingly powerful gaming platforms.

Until now, many game developers have spared little time, money, or effort developing code to deliver innovations to a hungry audience. One recent example is The Getaway, the newest game from Sony Computer Entertainment Europe, which took 3.5 years and some $8 million dollars to complete (see "Character Driven," April 2003, pg. 14). Unfortunately, except for companies with resources to burn, the days of building games from the ground up with proprietary programming are rapidly drawing to a close.

The problem with the roll-your-own approach is that producing ever richer and more realistic gaming experiences requires ever more resources. But the retail cost of games hasn't increased to support the added development expenses, nor have production cycles expanded to accommodate the extra development time required.

"Game development is changing," says Samantha Staples, principal of Acacia Research Group. "The focus now is not just on bringing a hit title to market; it's on bringing a hit title to market within budget and on time. Increasingly, publishers are going to insist that game developers concentrate on business goals and not just bragging rights."

Does this mean that game developers must halt innovation and crank out me-too releases using assembly-line practices, just to satisfy production deadlines? Not necessarily. A growing number of developers have adopted a strategy to deal with this dilemma. By licensing the middleware—that is, the graphics, rendering, and game engines; the physics and AI modules; the network engines (for online games); and the like—they can use these programs as a foundation on which they can build unique new gaming experiences.

In fact, middleware is the fastest growing segment of game development tools. According to a new study from Acacia Research Group called "Middleware for Interactive Entertainment," just 18 percent of game titles released in 2002 used middleware. But its adoption will rise at a compound annual growth rate (CAGR) of more than 25 percent through 2007, when it will be used in the development of some 63 percent of titles. At the same time, revenues generated from middleware will rise at a CAGR of nearly 35 percent, from $16 million in 2002 to more than $72 million in 2007.

It's time for developers to abandon the practice of reinventing the wheel just for the ego gratification that goes with it. We don't need new custom middleware code for every new game, although those who focus on developing such tools for the gaming industry may find a robust demand for their goods and services. What we do need are more compelling game plots, more engaging play, more imaginative environments, and more complex characters. Game developers would be wise to use the opportunity that their thriving industry provides, rather than fail to adapt and fall victim to their own success.