Conventional wisdom tells us that, in the event of a zombie
apocalypse, we have two options: Collect as many weapons as
possible -- the explosive kind, preferably -- and stage a futile,
dramatic last stand, or, alternatively, make a run for it -- a
desperate (and inevitably fruitless) search for someplace safe.
This topic is frequently explored in video games. Last year's
The Walking Dead
won numerous game-of-the-year awards, while
remains an icon of the genre, having spawned nearly two dozen game
titles and four Hollywood productions, with a fifth on the way.
But while zombie business may be booming, game companies are facing
an apocalypse of their own, as the cloud, social media, and mobile
computing combine to wreck what used to be a pleasant suburban
The first victim was game developer
(OTCMKTS:THQIQ). It filed for bankruptcy late last year, and
) followed suit several months later.
(TYO:9684), best known for its
series, landed deep in the red for fiscal 2012, as it restructured
itself toward smartphones and tablets.
(TYO:7974) reported its first annual loss in 30 years, and
) recently announced that it was
laying off 10% of its workforce
, citing "priorities in new technologies and mobile."
The gaming industry has always been cyclical -- Atari and Nintendo
have weathered any number of cycles -- but things have gotten worse
for the old guard, as console systems like Nintendo's Wii fall out
of favor. Console sales
fell 21% last year
, and while there's no hard proof that the rise of mobile and
social gaming is responsible, it's clearly the elephant in the
True to script, console manufacturers are preparing for a showdown,
and arming themselves to the teeth. Nintendo kicked off a new
generation of gaming consoles --
the eighth, if anyone's counting
-- when it released the Wii U last November.
) new Xbox is rumored for a summer release, and
) PlayStation 4 should be available by Christmas.
These consoles will bristle with technology. They'll be socially
connected, and built around online connectivity. Controllers will
be wireless -- this is the mobile era, and that means batteries,
baby -- or in the Wii U's case, a controller/tablet hybrid,
complete with touchscreen. They'll run PC hardware and surf the
Web; and if that's something you'd rather not do with thumb
buttons, the Xbox will feature motion detection, so perhaps you can
pantomime your next Twitter post.
Game developers are taking the other tack, and running for safety,
but rarely finding it. EA brought some of its more popular games to
social networks, only to ditch them earlier this year.
) has dominated social gaming for years, and even with top hits
, the company has never made real money at it. The rapidly-growing
mobile market is no safe haven either,
given how stingy
mobile users are with their wallets. Rovio's
is, by far, the most successful game on mobile platforms, having
reached a billion customers, but the franchise only earned $70
million last year, half of which came from merchandising. The
company also claims it produced 50 failures before landing its big
hit - a success rate that would sink most larger developers, whose
success has always depended upon large budgets and lavish marketing
PC gaming remains healthy and
continues to be a growth market
, but it, too, is wrestling with the following question: What will
happen to this premium industry when the world is overrun by cheap,
throwaway mobile apps? Computer games have traditionally offered a
more substantial and user-differentiated experience, but this is
changing as developers move toward subscription models and
"always-online" -- ie, the cloud -- not because it's better for
consumers, but because it keeps their wallets open and cuts down on
each require a network connection. Both games suffered major
debacles at launch due to the demand placed on company servers, but
the larger issue may be that, whereas earlier generations of these
games still run today -- and remain quite popular -- the current
crop will die out when they are no longer supported, or become
defunct when users no longer pay for them. They're no less
ephemeral or disposable than something that costs $.99 on
(AAPL) app store.
Remarkably, the two most popular paid games on mobile are
. After 30 years of upselling customers on new technology, more
buttons and better graphics, the video game industry is under siege
from products that died last century.
It's a good plot, but from the looks of things, the ending won't be
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