Suttree.com: Casual Games, Social Software by Duncan Gough

Casual Games are moving on, then. When the three next-generation consoles finally launch, they will offer an online service with microtransactions. The Xbox360 has its’ Live Arcade section, and the Wii and PS3 have both added support for microtransactions and, by extension, episodic content. The most alarming thing that spirings to mind is that the big companies, with big IP, will use microtransactions and episodic content to kick the sequel conundrum around much longer, and for far greater revenue that they are able to do now..

So how does this affect Casual Games? Consoles are muscling in on Casual gameplay but not neccasarily Casual Games. They are, quite cleverly, selling more stuff to the same people all over again. In fact, they’re selling old stuff to the same people all over again. Microtransactions, community and online support in each of the three consoles has opened up a brand new revenue stream to a growing, more mainstream audience. A revenue stream which is being filled with retro games, clones, match-three puzzles, and so on. Sony, Nintendo and, leading the charge, Microsoft have found a way to keep gamers within their systems. They’re using Casual Games to lock in players who quit a hardcode sports/sci-fi/fantasy game after a couple hours of frantic gaming. Rather than walk away, gamers can now unwind with an ‘easy to play, difficult to master’ game which they’ve got a copy of thanks to the try-before-you-buy business model. A business model that, in the Casual Games world, has poor conversion rates (1 - 2%) but in the Xbox Live arcade, has conversion rates of 10 - 20% purely because customers have bought virtual currency that they can’t spend on anyting else and probably can’t refund without a fight.

So, where do Casual Games go next? Will they make the move to mobile and accept their position as a secondary stream to a mainstream console/PC game? Will they move to set-top boxes, used by TV companies to bring back dwindling television audience, perhaps by marrying the quiz/puzzle/match-three genre to short bursts of interactive viewer activity (play a round of bejewelled in 60 seconds and the award your best score to the on-screen contestant you want to win). Or will they move away from the try-before-you-buy business model and shack up with the in-game, embedded ads, or even the item model.

Personally, I think that the Item Model is the long term bet, but two to three years away and part of a package of payment options. It needs another poster child outside of Puzzle Pirates (with its’ subscription only shard and its’ free-to-play, pay-for-extras shard called the Dubloon Oceans) and, more recently, Habbo Hotel. In the meantime, advertising in any form will continue to be the most reliable option, embedded into the game or online and around the offline game community. And then there’s skill gaming, gaming for money, the honest dark horse. Would the Microsoft consider opening up games bought from Live Arcade and placing a bartering system around them? Beat my best score and earn credits? That would change things considerable, but I doubt it’ll happen.