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Article
Imaginary gaming: hidden influences in
the entertainment software market
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Volume 4 │ Issue 2
How did entertainment software go from being a market
venture that capitalists avoided at all costs, to one where
a single company was able to raise a billion dollars in
investments in just two years?
Author
Chris Bateman Game designer,
philosopher and writer
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Article
F
or most of the 40 year
history of the digital games
industry, it has been an
unattractive option for
venture capitalists, who
have tended to see it as
a high-risk space with
disappointing returns. Yet,
in 2010, social games company Zynga
raised US$480m from investors, and in
2011, they have raised an unprecedented
US$485m in further investments, bringing
their total funding to US$1b. What changed
in the last few years that allowed digital
entertainment software to generate such
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Volume 4 │ Issue 2
frothy investment conditions? Behind the
economics of gaming lies a subtle influence
that has not been fully appreciated until
recently — a significant variation in the
degree of imagination that individuals bring
to their game experiences.
When Nintendo was considering its
options for a new console in the early
2000s, Shigeru Miyamoto, the creator of
Mario and the most successful commercial
game designer of all time, recognized that
it was going to be difficult for the company
to compete with the growing technological
power that Sony and Microsoft were able
to put into the marketplace. Whereas its
Imaginary gaming
rivals were willing to sell hardware as a loss
leader, Nintendo has always insisted on at
least breaking even on hardware; it also
lacks the technical resources of its rivals.
Nintendo decided, therefore, to focus on a
new form of interaction as the basis of its
next device, in the hope of reconnecting
with the mass market audience it had
enjoyed with its first home console, the
NES (Hall, 2005). The result was the hugely
successful Wii, which has sold over 50%
more units than its more powerful (and
more expensive) rivals.
Nintendo’s Wii console and 145 millionselling DS handheld device, which will soon
overtake Sony’s PlayStation 2 as the best-
designed to entertain their own staff, in
the belief that their own employees are
representative of the audience at large.
Nintendo, by not falling prey to this fatal
error, have enjoyed considerable success,
but even they fall short of the astronomical
scale of Zynga’s gold rush.
The revenues in what is termed “social
gaming” — including Facebook games
such as the ones made by Zynga — have
skyrocketed. John Riccitiello, CEO of
Electronic Arts, which used to be the
biggest global software publisher by
revenue prior to the merger between
Activision and Blizzard, has stated that,
while consoles used to be 80% of the
Behind the economics of gaming lies a subtle influence
that has not been fully appreciated until recently – a
significant variation in the degree of imagination that
individuals bring to their game experiences
selling console of all time, demonstrate a
fundamental shift in the market for games.
For the first time, commercial videogames
are truly embracing a wider audience for
games, and as a result are enjoying all the
benefits that a mass-market focus can
bring. As a consultant in this sector, I have
been repeatedly shocked by the number
of companies who make software products
market in 2000, they are now only 40%
of revenues (Brightman, 2011). This
is primarily a consequence of a radical
increase of revenue from social games, not
a fall of revenues in the console space — the
successful console titles, such as ActivisionBlizzard’s Modern Warfare franchise, are
setting new high standards (20 million units
in the case of Modern Warfare 2). However,
the number of successful titles in this space
is receding while the cost of development
continues to rise dramatically. Modern
Warfare 2, for instance, cost US$50m to
develop, and accrued a further US$200m in
marketing costs. The billion dollar revenue
this title has generated seems impressive
but it is almost impossible for competitors
to replicate, and most rival titles flounder
and fail, often at great expense.
In fact, these two marketplaces — the
consoles servicing the gamer hobbyists,
and the social and mobile gaming
companies servicing the mass market for
play — are almost two entirely separate
commercial spaces, although they have
a close connection. As an example of the
interconnectivity between the two, consider
successful social games company Wooga,
which recently raised US$24m in venture
capital investments. Wooga produces
social games that are all highly derivative
of earlier titles released by Japanese
companies: Bubble Island, for instance, is a
direct clone of Taito’s Bust a Move, originally
released as Puzzle Bobble for arcades in
1994. What Wooga has done, and indeed,
what every successful social games
company is doing, is convert the pay-to-play
model of the arcades to a new games-asservice model, in which a game is made
available to play for free but monetized via
microtransactions. The scale of payments
from the perspective of the consumer is
similar to the old coin drops for arcade
cabinets, but the scale of the audience is
radically greater: Bubble Island has five
million monthly active users, for instance.
The outcome can be incredible revenues on
relatively modest initial investments.
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Article
I first began investigating how and
why people play games back in 2002,
conducting one of the first studies in
what is now termed “player satisfaction
modeling.” At the time, I recognized that
there was a radical distinction between the
players who engaged with videogames as a
hobby, and those who dabbled with games
as a diversion. This first study, completed
in 2004, discovered that the difference
between these two groups was largely
expressible in terms of a psychological
measure connected to imagination, known
as “intuition” in Myers-Briggs typology
or “openness to experience” in “Big five”
(Bateman and Boon, 2005). In the years
since this study, I have continued to
investigate psychological factors in play
and have confirmed that imagination is a
significant discriminating factor, one that
in essence separates the two marketplaces
from one another. The gamer hobbyists,
targeted by hardware manufacturers like
Sony and Microsoft, as well as by publishing
corporations such as EA and ActivisionBlizzard, are more imaginative players than
those targeted by Zynga or Wooga.
Why is imagination such an important
factor? To find an answer to this, I perused
the literature but could find nothing in
the scientific studies thus far. However,
I came across a theory in philosophy of
art by Professor Kendall Walton that was
particularly apposite to this question.
According to Walton’s theory, artworks
such as paintings, novels, movies can be
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Volume 4 │ Issue 2
best understood as games of make-believe,
similar in nature to the kinds of imaginary
games children play. Just as a toy gun or
a hobbyhorse serves as a prop in a child’s
game of make-believe, so a painting, a novel
or a movie serves as a prop in an adult’s
game of make-believe. The latter dictate
more of the experience than the child’s
toy, but the same imaginative process is
central to both experiences (Walton, 1990).
Walton’s theory was ideally suited for an
adaptation to digital entertainment, and I
have spent the last couple of years working
on an extension to the make-believe
theory of representation that includes
games of all kinds, including videogames
(Bateman, 2011).
Between my player satisfaction studies
and philosophy of art, an explanation for
the difference between the two markets
for entertainment software can be offered.
The gamer hobbyists, those that primarily
play console games, are more imaginative
players and are a relatively small proportion
of the population as a whole. They
actively enjoy science fiction and fantasy,
are willing to learn new kinds of games,
and in some cases actively seek out the
challenge of doing so. They want their
games to work their imagination, to offer
them new experiences beyond the familiar.
Conversely, the players of social games
are typically less imaginative individuals,
seeking their entertainment within familiar
contexts. It is no coincidence that Zynga’s
most successful title, FarmVille (a design
Imaginary gaming
The success of social gaming rests not only
on the opportunity to leverage the huge
networks of players provided by social
media channels, but also on a careful
restraint in terms of the kind of makebelieve being offered
descended from an original Japanese
game, Harvest Moon, originally published in
1996), is based around farming, an activity
conceptually familiar to everyone.
The influence of differing powers of
imagination on the commercial fortunes of
games is evident not only in the difference
between the services offered in the social
gaming space and the products offered in
the console marketplace, but also in the
degree of success enjoyed by individual
titles in the latter. It is not coincidental
that first person shooter titles, of the kind
epitomized by Modern Warfare, began to
enjoy significantly higher sales figures when
they represented contemporary contexts
instead of science fiction settings. The
1997 Nintendo 64 title GoldenEye 007 sold
eight million units on the back of its James
Bond spy license, while its rival first person
shooter Quake II sold just a million units
with its science fiction branding, despite
intense attention from the specialist press.
Modern Warfare is perhaps the pinnacle of
this trend — even with incredible marketing
expenditure by its competitor, ActivisionBlizzard’s franchise has been able to outsell
Microsoft’s science fiction shooter franchise
Halo precisely because its “real world”
setting has wider appeal. It requires less
imagination to pretend to be a modern
soldier than it does to pretend to be a
futuristic space marine, and that distinction
ultimately has commercial consequences.
Of course, imagination is not the
only aspect of player satisfaction that is
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Article
pertinent to the economic fortunes of the
entertainment software market. Tolerance
for frustration, for instance, which may
relate to testosterone levels (Bateman
and Nacke, 2010), appears to be another
significant factor distinguishing games
such as Modern Warfare from games such
as FarmVille. The mass market for games
doesn’t just choose games requiring less
imagination, but games requiring less
persistence. Nonetheless, the success
of social gaming rests not only on the
opportunity to leverage the huge networks
of players provided by social media
channels, but also on a careful restraint
in terms of the kind of make-believe being
offered. Familiarity, as in any marketplace,
is a powerful commercial selling point
when dealing with the mass market. For
videogames, part of that appeal rests in the
lower demands of imagination offered by
recognizable settings, and the significantly
larger target audience that implies.
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Volume 4 │ Issue 2
Imaginary gaming
Chris Bateman is a game designer,
philosopher and writer, best known for
the games Discworld noir and Ghost
master, and the books Game writing:
narrative skills for videogames, 21st
century game design and Beyond game
design. Chris runs International Hobo, a
leading consultancy in market-oriented
game design and narrative operating
out of Manchester, UK. He has worked
on dozens of digital game projects over
the last 15 years for almost all the
major publishers.
Graduating with a Masters degree in
Artificial Intelligence/Cognitive Science,
he has since pursued highly acclaimed
independent research into how and why
people play games. In 2009, he was
invited to sit on the IEEE’s (the world’s
largest professional association for the
advancement of technology) Player
Satisfaction Modeling task force, in
recognition for his role in establishing
this research domain. His most recent
player model, BrainHex, is based upon
neurobiological principles published in
his paper Neurobiology of play, and the
BrainHex test has been taken by more
than 70,000 people.
His latest book is Imaginary Games,
which adapts Professor Kendall Walton’s
prop theory to digital and other games,
providing a robust argument which
demonstrates not only that games are art,
but that all art is itself a kind of game.
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