Nº 10 2011 > Technology Watch
The world of video games
Trends in video games and gaming
Video gaming is a fast-moving multibillion dollar global business. “Trends in video games and gaming”, a Technology Watch Report published in September 2011 by ITU’s Telecommunication Standardization Sector (ITU–T), surveys some of the hottest developments and highlights the standardization activities needed to offer consumers a better gaming experience.
Over the past 30 years, video gaming has evolved from single-game units to “massively multiplayer online role-playing games” with millions of players. Today it is a huge media business, with bestsellers generating greater sales revenue in first week than blockbuster films.
Gartner research estimates that the global video game industry — software, hardware and online gaming — will grow from USD 74 billion in 2011 to USD 112 billion in 2015, dwarfing cinema’s total revenue of USD 31.8 billion in 2010. Gartner predicts that online gaming spending will overtake hardware spending by 2015.
From being the domain of boys and young men, the audience for gaming has expanded to include girls, young women, parents and the elderly. As the number of players expands, it will become increasingly important to analyse the effects of video gaming, not only on economic development, but also on society itself.
The need for standards
The traditional video gaming industry has not yet embraced standardization, preferring to restrict players to a specific platform and to sell expensive games. Mobile gaming and social network games are now disrupting this traditional market, but they seem to be establishing similar walled gardens, binding users to particular mobile operating systems or social networks.
This lack of interoperability is not in the best interest of users. As electricity bills rise and homes become cluttered with set-top boxes, satellite receivers and gaming consoles, consumers are hoping for a one-box-fits-all solution.
This would integrate audio and video streaming, gaming and other entertainment features, natural user interfaces and secure payment mechanisms.
To reflect market realities, all gaming-related policy and standardization work must include mobile and social network gaming. Some companies are moving into cloud computing and three-dimensional (3D) viewing. These two areas are already being studied by ITU–T, which is also working to integrate closely related audiovisual technologies. For example, ITU–T Study Group 16 is already taking such steps in the Internet protocol television (IPTV) field, advancing the technology from a television delivery platform to a multipurpose multimedia solution. To incorporate a variety of audiovisual technologies into a single 3D television, ITU will bring together service and content providers, including developers of games, to attempt to standardize communication protocols, toolboxes, middleware and security frameworks.
Terminals and platforms
Video games have come a long way, with terminals often reflecting the state-of-the art in consumer electronics of the era. From single-game units (pong machines) in arcade halls in the 1970s and 1980s, gaming spread to console or computer games transported on ROM cartridges, tape cassettes, discs, CD‑ROMs and DVDs, and to gaming on the smartphone.
Mobile broadband and the growing penetration of smartphones have boosted the gaming ecosystem.
Independent developers and small start-up companies can compete in the market and deliver their games to huge audiences. The latest step is the rise of social network games on platforms with hundreds of millions of users. All this has changed the audience and business models of the gaming industry, as well as the way games look.
Microsoft, Nintendo, Sega and Sony gaming consoles — some of them handheld — have captivated children and intrigued their parents. Over the years, these products have added networking and graphic capabilities to enhance the gaming experience.
Each brand has created its own gaming ecosystem to retain customers. These walled gardens of hardware, games, accessories and online gaming communities tend to make it impossible for consumers to use third-party equipment or just to export scores or achievements from one console to the other.
Computer games have contributed to the success of home and personal computers since the early days. Atari and Commodore, for example, were first successful in the arcade and game console segments, and subsequently introduced 8‑bit home computers for gaming, programming and other applications.
Mobile phones and tablets
In little over a decade, mobile gaming has come to dominate gaming culture. Starting with simple, single-player games embedded in basic handsets, mobile gaming progressed to games on feature phones. Today, in the mobile applications (apps) era, mobile gaming has reached full bloom on smartphones.
The latest smartphones have almost the same processing power and graphic capabilities as dedicated handheld gaming consoles. The communication features, especially mobile broadband, enable gamers to network and interact, to play on websites, and to purchase gaming apps and virtual in-game goods.
The latest financial results from Nintendo and Apple reveal the shift from dedicated handheld gaming consoles to gaming-capable MP3 players (such as iPod Touch), mobile phones (such as iPhone) and tablets (such as iPad).
In the United Kingdom, communications regulator Ofcom reports that almost half of all teenagers own smartphones, half of all households have game consoles, and games are the most popular paid apps. In the United States, games are the most popular category of mobile phone apps, and the average mobile gamer plays 7.8 hours a month. A survey of tablet owners found that gaming was the most popular use for these devices, ahead of web-browsing, e‑mailing or reading.
The rise of app stores has made it easier for developers to list their products, and for users to find and purchase them. But the lack of interoperability between application platforms (Apple iOS, Android, RIM BlackBerry OS, Symbian and others) means that developers have to rework their games using the appropriate application programming interfaces and software development kits.
This is what Rovio Mobile, a computer game developer based in Finland, had to do for Angry Birds, a puzzle game it developed in 2010. Released through the Apple App Store, Angry Birds quickly became a bestseller, and the company then ported the game to other platforms. A total of 350 million downloads had been reported at the time the “Trends in video games and gaming” Technology Watch Report was being written.
Social network games
In social network gaming, Zynga is Rovio’s equivalent in terms of overnight success. Zynga’s portfolio includes FarmVille and CityVille. These browser games are played on social networking websites, attracting 60 million daily active users and 2 billion minutes of play per day. As this article was being written, Zynga was looking to list shares on the Nasdaq stock exchange in an initial public offering that would value the company at around USD 9 billion.
While similar in appearance to casual games, social games use social connections and customer data (supplied by Facebook or other social network sites) as part of the game. Social games appeal to players who want to compete with their friends or chat or flirt while playing. Entry costs for social game developers are low, and viral distribution over social network sites can quickly reach hundreds of millions of users.
Educational video games
The purpose of educational video games for children or adults is to teach users about a chosen subject, expand existing knowledge or assist in acquiring a certain skill. Educational games are developed by educationalists and psychologists, as well as game developers.
DreamBox Learning, an educational start-up, sells licences for its web-based Adobe Flash maths application to schools and parents. The game adjusts to the skill level of the child, automatically adapting its sequencing, speed, level of difficulty, and the number and type of hints given.
The Nobel Prize Foundation has set up a website with educational games for young and old, covering topics such as the immune system, lasers and DNA.
One often-cited example of gamification is Foursquare, a location-based social network that allows users to “check-in” at businesses (including restaurants and shops). Each check-in awards the user points and trophies (“badges”). Business owners can register their venues and offer rewards to loyal visitors.
Another example is the multi-sensor watch developed by Basis, a San Francisco-based company, which monitors fitness level by measuring heart rate, body temperature and movement. Gamifying the process by rewarding the user for a certain caloric burn can help motivate the user to stay in shape.
Gaming technology standards
Most casual games for mobile platforms and the web are built on Adobe Flash or other proprietary formats. A new competitor is the HTML5 open standard format drafted by the World Wide Web Consortium and the Web Hypertext Application Technology Working Group. The HTML5 standard adds multimedia and graphic features to the hypertext markup language on which the web is built. An attractive feature of HTML5 is that it runs on any device with a modern web browser.
ITU–T’s Primetime Emmy Engineering Award-winning encoding standard H.264 is used to compress clips on YouTube, as well as the high-definition content on Blu-ray Discs and high-definition television. Although H.264 is the most common format, it faces competition from WebM, a format sponsored and promoted by Google.
Cloud computing and the “anything as a service” (XaaS) paradigm both have considerable influence on gaming. Games played on the web — especially via social networks — require huge computing power. This is often achieved through a mix of data centres and cloud computing. For example, Zynga adds around a thousand servers per week to deliver a petabyte (a million gigabytes) of data.
Games-on-demand service providers such as Gaikai, OnLive or Otoy aim to shift the computing power required to play games out of homes and into their data centres. Instead of buying gaming consoles or game discs, consumers can subscribe to an always available service. Games are streamed — like a YouTube video clip — to a computer, a mobile device, or a proprietary low-cost gaming box that can be connected to the television. Some consumer electronic manufacturers have even started integrating the software into their television sets and DVD players.
Today’s networks are not engineered to enable simultaneous cloud gaming for all. Bandwidth requirements, latency and response (distance to consumer) are all crucial in enabling cloud gaming to deliver a quality of experience equal to that of traditional gaming consoles.
To survive the market disruption threatened by cloud gaming services, GameStop — a video game retailer with more than six thousand stores worldwide — has acquired an online gaming service and a digital game distribution business.
On 19 April 2011, Sony Computer Entertainment shut down its systems and servers after detecting unauthorized activity in the PlayStation Network and in Sony’s online gaming services. The personal data of 100 million customers were exposed, including credit card information of 12 million gamers. During the outage, which lasted almost a month, gamers were unable to download new content or compete online. Sony estimates that it lost USD 171 million in revenue. In the following two months, Nintendo and Sega had to admit to and apologize for similar security breaches.
Security is a major area of concern in standardization efforts related to cloud computing. These efforts are spread across a growing number of organizations, forums and consortia, including the ITU–T Focus Group on Cloud Computing.
Motion-sensing and natural user interfaces
Nintendo’s Wii console, launched in 2006, put motion-sensing capabilities into gaming consoles. The Guinness World Records lists Microsoft’s Kinect, a natural user interface for controller-free gaming, as the fastest selling consumer electronics device, with 8 million units sold in the 60 days after its launch.
The future with 3D
Spurred by the success of three-dimensional films (such as “Avatar” in 2009) and television (such as the FIFA World Cup in 2010), game developers are enhancing their best-sellers to offer a three-dimensional experience to users.
The wearing of special spectacles, required by stereoscopy, is a barrier to the acceptance of 3D displays for everyday use. But no additional eyewear is required with autostereoscopic display technologies. Mobile devices including portable game consoles, smartphones and tablets are already moving to 3D. Nintendo’s 3DS console was launched in early 2011 and features a 3.5‑inch autostereoscopic display.
Standardization efforts for 3D involve ITU, as well as the Society of Motion Picture and Television Engineers, the CEA, DVB Project, HDMI Founders and others. For instance, an extension of ITU–T H.264 (multiview video coding) was selected by the Blu-ray disc association for the distribution of 3D content, and 3D support will be included in the successor to H.264. Also, ITU–T Study Group 9 is working on 3D video quality assessment, and ITU–T Study Group 16 has drafted a technical paper on applications for 3D IPTV. Meanwhile, the ITU Radiocommunication Sector (ITU–R) is addressing digital broadcasting of 3D TV in Question 128/6 and has published a report on the features.
This article is adapted from “Trends in video games and gaming”, a Technology Watch Report written by Martin Adolph of ITU’s Telecommunication Standardization Bureau (TSB). Technology Watch Reports assess new technologies with regard to existing ITU–T and other standards, and the likely implications for future standardization. Technology Watch is managed by the Policy and Technology Watch Division of TSB. This report and other Technology Watch Reports are available at http://itu.int/techwatch