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Is Gaikai going to enable us to play all our games for free?

By on July 8, 2009
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Free seems to be the topic du jour. Chris Anderson’s Free is riding the best-seller charts. And Dave Perry appears to have come out and said that Gaikai enables publishers to give their AAA content away for free. Is this the start of games going the way of music?

Earlier this week, I posted that Gaikai could have a substantial impact on the way in which we experience, pay for and receive video games. I’ve identified two major areas which, if Gaikai (or another similar service) works, it could make a very real difference to the games industry. The first one is:

Publishers will give their games away for free

Gaikai screenshot

Dave Perry says in his recent Eurogamer interview that he does not intend competing with publishers or platform holders. He sees Gaikai as a new distribution mechanism for publishers: “Publishers use our service to get their games onto their websites and they buy our server time to make that possible”.

Which leads to all sorts of intriguing possibilities. Gamers could play a fully featured version of a game on a website. It might be free (surrounded by ads), it might not be full screen. It might be time- or level-limited. But it would be a core game – the type of game that previously could only be distributed in a box.

In other words, Gaikai might encourage boxed-product publishers to make the leap to the freemium model whereby most players play their games for free, but 10-20% pay for them. (Of course, Crytek CEO Cevat Yerli claimed, controversially, that the ratio of legitimate copies of Crysis to pirate ones is 1 to 20, which means only 5% of users paid for their copy of Crysis.)

What are the implications if we do move to a world where most publishers pay Gaikai to stream versions of their games to the publisher’s own website:

  1. Publishers will need to work out how to monetize this free version. Some might consider the marketing value enough. Others might surround it by ads. Still more, especially if they have a portfolion of good quality titles, might offer a low subscription price to get access to all games via the Gaikai system.
  2. Publisher marketing will have to change radically. With gamers able to play the game on the publisher’s website before they buy it, marketing executives will need to move away from focusing on day one sales and work out how to build an audience over time, track conversion and learn all the other web marketing skills
  3. Developers will need to change how they make games. No longer will they be able to have slow intros, tutorials and cut scenes. In the same way that slow-starting movies have moved to in-your-face intros to television shows, games development will have to adapt.
  4. Gaikai particularly threatens the third-party media sites which offer trailers and demos. If you can watch a trailer at IGN or play the actual game at ea.com, which is more attractive?

I still believe, in the short term, that traditional publishers will make most of their from boxes. But as Gaikai starts to offer publishers a cost-effective way to draw users into their orbit and sell games to them, does this mark the end of the “film” model of games consumption and the birth of the “television” model.

Tell me what you think in the comments. And check back later in the week for the second implication.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
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  • Setting aside all technical doubts about these services (this and OnLive), let's assume they work more or less, and look at them purely from the consumer's point of view. I think they claim to offer two principal benefits:
    1 No need to own high-end gaming hardware (making the big assumption that the service is so good that you can get your entire gaming fix this way!)
    2 A different way to pay for content – as you say, possibly free and ad-supported, possibly pay-per-play, whatever.

    (1) is just not that compelling for me (unless you're talking about emerging markets, perhaps) – hardware is incredibly cheap nowadays.

    (2) is the real question. I think this would be really compelling for me as a consumer, although I'd prefer to see it implemented differently – there's no reason why I shouldn't be able to play games via this business model on my own hardware. MS could extend XBox live to make this a first-class way of experiencing games: free download, pay per play, ad supported, whatever. The benefit of doing this is that I wouldn't suffer from the expected controller lag and reduced graphical quality that these streamed games services are bound to have. If MS provided good APIs for doing this, they could make it easy for publishers to develop games that work this way.

    I don't know whether platform holders have held off from doing this because their publishing partners aren't interested in changing their business model? Or whether they just haven't got around to it yet? One possible outcome here is that these streamed services fail, but force the existing platforms to move in this direction, which would be a good thing for consumers.

  • Setting aside all technical doubts about these services (this and OnLive), let's assume they work more or less, and look at them purely from the consumer's point of view. I think they claim to offer two principal benefits:
    1 No need to own high-end gaming hardware (making the big assumption that the service is so good that you can get your entire gaming fix this way!)
    2 A different way to pay for content – as you say, possibly free and ad-supported, possibly pay-per-play, whatever.

    (1) is just not that compelling for me (unless you're talking about emerging markets, perhaps) – hardware is incredibly cheap nowadays.

    (2) is the real question. I think this would be really compelling for me as a consumer, although I'd prefer to see it implemented differently – there's no reason why I shouldn't be able to play games via this business model on my own hardware. MS could extend XBox live to make this a first-class way of experiencing games: free download, pay per play, ad supported, whatever. The benefit of doing this is that I wouldn't suffer from the expected controller lag and reduced graphical quality that these streamed games services are bound to have. If MS provided good APIs for doing this, they could make it easy for publishers to develop games that work this way.

    I don't know whether platform holders have held off from doing this because their publishing partners aren't interested in changing their business model? Or whether they just haven't got around to it yet? One possible outcome here is that these streamed services fail, but force the existing platforms to move in this direction, which would be a good thing for consumers.