Video report asks: Are video games dead?

A two-part series called “Video Games are dead” on DigitalTrends.com examines the increasingly moribund state of the console video game industry, pointing out that video game sales have been falling for months – including a big drop in July.

But the real, less sexy title of the video should be “Video games as we traditionally have known them are dead.” Console games may be dead, but there are a whole bunch of new formats — including online-based games — that are doing just fine.

The show, produced by the online game news program Players Only on DigitalTrends.com features interviews from some of the industry’s top developers and analysts. Among them are analyst Michael Pachter of Wedbush Morgan, developer Chris Taylor of Gas Powered Games, Mike Capps and Cliff Blezinski of Epic Games, Brian Crecente of Kotaku, Jesse Divnich of EEDAR, and Lorne Lanning of Oddworld Inhabitants. Yours truly makes an appearance in part 2, which was released this morning.

The video addresses the theme of industry transition that we’ve written about a number of times. The $60 game played on a dedicated console is under attack as new forms of competition emerge. That competition includes cheap used games and web sites that offer online games where you can play for free and only pay for virtual goods a quarter or so at a time. It also includes games played on demand as users tap into high-speed services of companies such as OnLive, Otoy and Gaikai. And it includes the new landscape of games played on mobile devices such as the iPhone, where games are either free or cost 99 cents.

Will the game industry make a comeback as the recovery starts, or will these new kinds of competitors continue to eat away at the core industry’s sales? Lanning, co-founder of Oddworld Inhabitants, says of the $60 video game, “In five years, it will be like trying to find vinyl” records. Here’s a link to part one and today’s part 2 video is embedded below. The videos aren’t that long, and they’re a good recap of the key issues facing the game industry today. http://www.ooyala.com/player.swf

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