14 DAY TRIAL // In what might seem to be a shocking statement, having in mind that the games industry keeps growing, former Sony CEO Chris Deering said that just 30% of the games produced manage to recover their costs, so developers must "explore new models" in order to survive. However, this does not mean that the industry is showing any sign of going down: 2.5 billion potential gamers are estimated for 2011, despite a huge competition from more TV networks, radio stations and so on.
Deering also predicted that the DS, Wii and PS3 platforms would hit an installed base of 500M by that time, with alternative mobile and PC platforms accounting for at least a billion users each. Strange or not, the Xbox 360 console is nowhere to be found in Deering's predictions for 2011 - which makes us wonder whether he knows something we don't.
However, he said that all these numbers would mean nothing by then, since just three out of ten games will recover their production costs from traditional revenue sources. However, smart companies will turn to new income sources in order to cover their losses and make a profit, or improve the already existing ones to generate more cash.
"Something is going to have to be there to make up the difference," Deering said to Develop magazine, citing a "creative use of hybrid online/offline advertising revenue models" as one way to succeed. "These business models must be explored," he added, stating that gambling might be one of them. On the other hand, the downloadable content system proved to be a true money maker as well and there are quite some voices who claim that digital distribution and online play are the future of gaming. So, all we can do right now is wait and see who has a better crystal ball.