Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Wednesday, March 23, 2005

Games Industry vs Simulation Economy

BW on Eidos/Elevation and the innovation squeeze on developers. I think this piece gets it all wrong - sure, development costs are high and rising. But the industry's problems are structural, not technological - limited revenue streams, short product life-cycles, artifical obsolescence and distribution scarcity, all of which ultimately result in marketing (and to a lesser degree, development) cost spirals.

I think the growth of dev costs relative to expected revenues, which is probably a more insightful way of looking at the issue, is a function of these fundamental structural issues, which are already forcing innovators to radically innovate and find more efficient, less risky, and less long-term capital-intensive business models (viz SecondLife, MMORPGs, Habbo Hotel).

Here's a related Beeb piece, talking about how the UK develops great games, but because it hasn't been a b-model innovator, gains are flowing overseas and the dev side of the industry in the UK is shrinking fast.

-- umair // 1:49 PM // 0 comments


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