2007: The Year that Was . . . And Wasn’t

2007 was a banner year for casual games. Traditional video game companies finally woke up to the phenomenon that is casual games and announced they’re joining the bandwagon. More casual games were released on more platforms than ever before. And, according to the Casual Games Association’s (CGA) 2007 Report, casual games is now a $2.25 billion a year business!

But, don’t you go trading in your Nissan Altima for a Mercedes CLK just yet, my casual game industry friends. 2007 was indeed a year of great promise, but for the most part, of it was a year of promise unfulfilled. And we only have ourselves to blame.

Before I go negative, let’s first review what went right in 2007:

  • The casual Wii defeated the hard-core, high octane Xbox 360 and PS3 in the console wars this year. This is the greatest upset victory since Lamba Lamba Lamba beat the Alpha Beta’s in the 1980’s classic film Revenge of the Nerds. 3 of the best selling console games this Holiday season? Guitar Hero 3, Rock Band, and Super Mario Galaxy, all games that appeal to the casual game audience, not just your pimply teenage brother or son.
  • Video game publishers and media companies like Electronic Arts (EA), Ubisoft, Eidos, and Vivendi have announced that they have drank the Kool Aid. EA announced they were breaking their company into 4 divisions, of which one is Casual Games. Viacom announced they were investing $100 million in casual games.
  • The casual games industry is expanding and growing in ways unimaginable just 12 months ago. Casual games are being developed in all corners around the world and production values have skyrocketed. It was just reported last week that the Mystery Case Files games are not just among the best selling games online but also offline, being the 3rd best selling PC game at retail this Holiday season. And finally, we’re beginning to see casual games expand beyond the try-and-buy-it download model, such as Web-based flash games, multiplayer games, and social networking games.

    This is all very good. Unfortunately, the glass is half full.

    Yes, video games publishers have proclaimed that casual games are the next big thing since the pairing of John Madden with video games and football. Too bad their definition of casual games is limited only to games that can be played on the Nintendo Wii and DS.

    Despite all their brouhaha and bravado, not one PC download casual game has come out of a video game studio this year (which is disappointing, since the brilliant Fairy Godmother Tycoon was an EA game, created before EA announced their "focus" on casual games). According to numerous sources, video game companies actually hate selling games online through the try-and-buy model because the margins are not as good online as retail. This, of course, is reminiscent of the concern music companies had about digital distribution and we know how that story ended. But, that is the subject of another editorial.

    It is also true that a lot of casual games were released in 2007 by studios all around the world and production values are much higher today than they were a year ago. But, the sad truth is while a lot of casual games released in 2007 were good, only a very few can be proclaimed as great. At Gamezebo, we often hear the criticism that a lot of games we rate as "3.5." We are working to change this perception, but the fact is that in 2007, a lot of games were produced well enough not to be "2’s" but not fun or innovative enough to be "4’s or above." Hence, 3 or. . . 3.5.

    With rising costs and limited virtual shelf space, creating casual games has become a hit-or-miss proposition. As a result, casual game companies (many of which have to answer to their investors) have released a lot more sequels, many more hidden object games, and very little innovation. There were exceptions. In one week, Dream Chronicles, Azada, and Mortimer Beckett & the Secrets of Spooky Manor were released, heralding the creation of a new casual game genre, Adventure. Build-a-Lot and and Jojo’s Fashion Show provided clever game mechanics around smart themes. But for the most part, 2007 can be defined as the year in casual games where innovation took a back seat to sequels and uninspired me-too products.

    It’s disappointing because this is bad not just for game players who want and expect more, but also the game companies themselves. The least reported story in 2007 is that casual game companies are hurting. While the cost of development has increased, the average price per title has fallen $20 to $10, as more users sign up to discount-driven subscription packages such as GamePass or Big Fish Game Club. As more similar games and sequels are released, the tail (sales over the long term) drops off a cliff.

    At the same time that the high tech and investment press is jumping on the bandwagon proclaiming casual games to be big business, many casual game companies are actually laying off staff this year.

    These market forces that encourage game companies to create the next me-too product should also drive them to take a little risk. Unfortunately, more casual game companies are taking the lazy rather than bold approach, and the result is mediocrity.

    Even web-based and multiplayer casual games, the current darling of the industry, may be set up for a fall in the upcoming year. The primary revenue model for web games is advertising and the US economy is about to enter a recession. What’s the first thing to go in a recession? Answer is, advertising, especially online. We all love to play free Web games online, but if the ad market falters, it’s questionable how developers will make money.

    In the end, 2007 was a good year for casual games, but when you look beneath the hype, the reality paints a more somber picture. The good news is that people like to play casual games and are thirsty for more: more innovation, more fun, more addictive games. The jury is out whether in 2008 casual game companies will rise to the challenge and create great casual games to satisfy their customers or just be content with developing games that are good enough to appease their investors. Whatever path they take will determine whether casual games in 2008 grow worthy of the respect we "earned" in 2007 from our peers.

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