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Stop congratulating yourselves over E3 — console makers and publishers are massively missing out on mobile

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Andrew Sheppard is president of San Francisco-based Kabam Studios.

E3 ended yesterday, and even before the conference came to an official close, the mega booths with Time Square-sized displays and rock concert-quality sound systems are already fading from the industry’s collective memory. PlayStation 4. Xbox One. The first batch of next generation $60-a-shot sequels. Many were whispering that they’d seen this cycle before; that it seemed like 2006 all over again. There is one key difference this time ’round — we’re living in 2013.

I predict this year’s E3 will be the last time we see record attendance at the conference and that over the next five years, E3 will struggle to stay relevant in an increasingly global mobile/tablet gaming world. Just as the Consumer Electronics Show (CES) reduced from two gatherings annually to one and Qualcomm has replaced Microsoft as the keynote, so, too, will E3 decline and hopefully evolve. Why? Free-to-play (F2P) mobile games are eating into the market for console games, and mobile game developers simply don’t require city-sized shows to influence the market or reach consumers.

The massive growth of F2P mobile gaming corresponds with one of the most revolutionary periods in the industry since consoles replaced the coin-operated arcade in the early 1990s. In less than two years, Kabam has gone from having no apps in the iOS and Android stores to being a top 10 global publisher and developer. We are proud of this accomplishment and to be joined by eight “new” F2P mobile publishers/developers. The notable omission of traditional game companies from the top 10 list (only Electronic Arts makes the cut) is shocking given consumer spending on iOS games eclipsed handheld “console” games in Q1 2013 . Where are Activision, Ubisoft, Take-Two, and the other industry leaders? Why are these companies’ investors allowing them to sit this platform out?

The hard reality is that mobile gaming is as different from console gaming as console gaming is from coin-op arcade games. Every month, companies submit 6,000 new games to the iOS and Android app stores. A large majority of these games are free-to-play, which means consumers can choose whether they want to continue playing and eventually pay for the game (usually through in-game purchases) they just downloaded. Also, as supported by the Top Grossing rankings, the most successful genres and associated game designs are those that steer heavily into the mobile and tablet use cases in a way that many console games cannot.

I read a lot of articles about how the “science” of F2P gaming is crowding out the ‘art’ of gaming. A good number of console game developers cling to this belief, oftentimes pointing to the meteoric rise and decline of Zynga as proof.  And just like the coin-op game developers before them, this audience misses the point; their personal gaming preferences are no longer representative of the market. The market has moved — and will continue to move — toward free-to-play mobile gaming.

At Kabam, we maintain that F2P mobile game development requires a balance of science and art and that the art is increasingly important given the power of the underlying device. With their dual-core/quad-core processors, powerful GPUs and memory, the iPhone 5, Samsung Galaxy S4, Nexus 4, and other devices match the power of current generation handheld gaming devices and soon current generation consoles. These are muscle cars waiting to be driven fast and furiously by gamers playing such mobile titles as Warner Bros.’ InjusticeGiven the appeal of console-quality graphics, sound, and gameplay, it’s no surprise it’s a top-grossing game on the app store charts.

Looking forward it won’t be long before all publishers and developers come to understand the importance of balancing the art and science of game development. Traditional game developers will need to add science to their mix; F2P mobile game developers will need to add art. Those who make these changes quickly will flourish; those who do not will be selected out via industry Darwinism.

We’ll see who’s leading the F2P mobile revolution in five years. I can’t wait to buy my ticket for E3 Mobile 2018.

andrew sheppardAndrew Sheppard is president of San Francisco-based Kabam Studios.


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