The video game industry is slowing. I hate to say it but the warning signs were there all along.
- Digital downloads (micropayments) turned the music industry back into a singles business. There’s no way people are paying $16 for a CD again. Similarly, no one wants to pay $60 for a video game anymore. Nor do they want to use a sedentary platform. For $6.99, you can download FIFA Soccer 13 on your iPhone and play wherever you go.
- The last few years people have turned their attention to social networks. People are spending less time playing video games and more time sharing pictures, links, liking and commenting. The most successful video games the past 3 years were developed within Facebook. Zynga soared with games like Farmville and Words With Friends. But today, people have lost interest in those games because Facebook stopped over-promoting them within the newsfeed.
There will always be hardcore gamers but the casual gamer who used to be tied to the PlayStation and high priced games on CD will no longer pay more than $7 for a game on the tablet or Smartphone.
Again, look at today’s music business. The video game industry needs to test a legitimate streaming subscription model.