What to Look for in 2016 - Industry Developments to Watch - Extra Credits

as last year was wrapping up James was asked to share his opinion for some of those hot trends of 2016 articles these sorts of predictions are inherently silly and the single best way to stick your foot in your mouth but there were a couple interesting things that caused James to think about that aren't really being discussed in most of those pieces so what the heck let's talk about a few of them here now I'm not making predictions here because I have no idea what's going to happen but there are definitely a few interesting things worth keeping an eye on during 2016 things that have a chance to affect the industry depending on how they pan out they're not the sort of things that we'll see an enormous impact from this year but depending on what we see from them this year we may be able to sus out some of the big things that'll happen in the industry a few years down the line I'm going to start with the one that I'm personally most intrigued by the portable steam machine for a long time I've struggled to see a place in the market for the steam machine there are people who are absolutely going to love it of course but for many of the people who are interested enough in Steam games to pay

for a specialized piece of Hardware to play them well they already have they've picked up a PC that's robust enough that it can do more than just browse the internet and pump out Word documents which means that for a lot of the folks out there they really don't see the point in picking up something that they could easily have just right now by plugging their current device into a TV but the idea of a portable steam machine makes a ton more sense to me I mean there's a lot of PC games out there that would be fun to play on the go but on the industry side it presents an additional benefit it would allow smaller developers to crack back into the portable Market without sacrificing the ability to develop for PC all you'd have to do is make sure that your Min specs are in line with whatever the Baseline steam machine portable is and don't get me wrong I love touchpad games too but this could mean that we finally see a portable Market where it makes economic sense to develop for a controller style device again and one that doesn't have the strictures and Hardware limitations of current Nintendo devices of course much of this depends on how well the built-in steam controller works on the go and whether the initial generation of games for the portable Ste machine managed to build in

a UI setup that's viable on both a standard screen and a tiny handheld one still bringing the diversity and ease of development of the PC market to the handheld space could provide us with a host of experiences we've never been able to get on the go before or it could just tank I don't know next there's two really interesting questions coming out of China to watch this year I think the big one surrounds the rapid acquisition of non-chinese game developers by Chinese companies up until this point there's been an almost Mad Dash for Chinese companies to acquire West developers but I think this year we'll see the natural coalescing of a clearer strategy for how to go about this because there have been some huge successes that have come out of this Mad Dash but also some major failures the Gold Rush phase is clearly coming to an end and I believe we're entering a more strategic more measured phase of acquisition what this refined acquisition strategy will eventually become is unclear but as we watch it begin to come together this year we'll get some idea of both the amount of Chinese Capital available in the future and the amount of control Chinese parent companies expect to have over their

Acquisitions I think a good canary in the coal mine is going to be Riot it'll be interesting to see how hands off 10-cent remains with riot after the 100% acquisition that happened so far despite many articles warning of the influence of Chinese Publishers many of the Chinese Acquisitions have actually remained more independent than companies acquired by major US Publishers like EA and Riot has been so phenomenally successful that there's really no reason for a parent company to Tinker with it so if we see any changes it may be indicative of a shift in thinking about how foreign developers should be managed additionally it's worth watching to see if 10cent tries to better integrate Riot with some of its other services or tries to Leverage The Brand more heavily with toys or films or spin-off games or games on other platforms one of the possibilities for future strategy around many of these Acquisitions is to take developers with a successful game and find additional ways to monetize them without messing with the game itself at all things that your average developer would struggle to do on their own okay second I think China has another potentially major sea change waiting in

the wings for the game industry for years China's had an enormous internal game development market and we've seen this Market affect the rest of the world many of our mobile free-to-play cues have been borrowed from that industry but with the recent lift of the console ban in China comes the question of whether China will aggressively enter the console Market from the software side that could be big watch for the announcement of Chinese console Studios this year and look to see if Chinese console products start to see release if they do it'll be a shot in the arm for the console industry and open up the question of whether Chinese games will stay locked within China or if efforts will be made to localize them and Export them around the globe bringing an interesting new cultural perspective to the world of console gaming sorry I know a lot of this has been business talk but many significant industry changes are driven by business in some way or another which brings me to our last thing this year keep an eye on the mega Acquisitions that happened over the last few years the purchase of Minecraft for 2 A2 billion and King for roughly 6 billion seeing how those have played out

by the start of 2017 is going to be telling just to put it in perspective the combined cost of those two game entities is slightly more than Disney paid to get their hands on both lucasfilm and Marvel that may seem ridiculous to you and I agree but I'm also aware that I could be very wrong here I think this is the year where we'll learn whether or not there's an acquisition bubble happening I believe there is and if I'm right we're going to see the theoretical valuation of a lot of game companies crash over the next few years making it harder both to get funding and to get a good deal on venture capital in the years to come but then again if King manages to control half of the top slots in the Apple Store for most of this year and if Microsoft manages to sell half a billion dollars worth of Minecraft spin-offs and add-ons or if they announce a Minecraft 2 that somehow manages to eclipse the original I may be proven incredibly and happily wrong and we'll all have to rethink what game companies are actually worth anyway I hope that at least makes some of the more innocuous seeming game news a little more interesting this year it'll

be fun to come back to this episode a few Loops of the earth down the road and see if anything came of these possibilities see you all next [Music] week