The future of the games industry involves “very large structural investments and structural changes,” predicted Newell. Business continues to grow rapidly, he said, and new models such as free-play offer interesting possibilities for developers and distributors. However, with the near-overnight growth of platforms such as iOS, “the world seems to be moving away from open platforms.”
Content platforms such as Steam, once seen as empowering developers to reach players, are giving way to providers who “view themselves as more rent guys who are essentially driving their partner margins to zero,” suggests Newell. “They build a shiny sparkling thing that attracts users and then they control people's access to those things.”
“I consider Apple to be very closed,” Newell explained, saying many publishers “can't exist in an Apple world because they want 30 percent [of profits] and they don't care that you only have 7 percent to play with.” Asked how this differs from Steam's own model, Newell argued that the commission on content sold through Valve’s platform is offset by the company's free services to developers. He also reminded attendees that Valve welcomes Steam content also being made available on other platforms.
Above: iOS/XBLA success stories like Popcap's Peggle may mask a closed, innovation-unfriendly business model, warns Newell
According to Newell, the success of platforms, like iOS and XBLA, are driven by a “closed” business model, which he calls the “wrong philosophical approach.” He says the trend could one day even broach the physical world of hardware manufacture. “I suspect Apple will launch a living room product that redefines people's expectations really strongly and the notion of a separate console platform will disappear.”
Newell's fellow panelists didn't share all of his views. Warner Interactive's Samantha Ryan argued that “there is a very strong console business and it's going to be around for awhile.” And David Bluhm of mobile developer Z2Live came to Apple's defense: “I would argue Apple's system is very open but very proprietary.”
Oct 12, 2011