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Casual Game Market vs AAA Market

Casual gaming is taking hold of the games market, which for decades was dominated by the AAA game development companies. A research report by the Casual Games Association found that smartphone gaming made up 17 percent of the $75.5 billion dollar global gaming market in 2013 and predicted that market share to grow to 22 percent by 2017. Major game franchises have struggled since the birth of casual, free-to-play games and there is currently a paradigm shift occurring. Here is what the future of casual and hardcore gaming looks like:

Casual Success

Casual gaming has exploded over the last few years as free-to-play titles have claimed a huge slice of gamers' time and attention. Free-to-play and micro-transaction based games are enticing to consumers because they do not carry the large price tag often associated with blockbuster console titles. These game models are equally enticing to game developers because they often have a high return of investment, even though that return is often diffused over time. Venture Beat reports that only the top 47 percent of free-to-play and micro-transaction based games have an average return of more than 25 cents a day per user. While that may seem like a small return, millions of people could be playing a particular casual mobile game on any given day, which means big profits for small development costs.

Many sites exclusively offer free-to-play games, which has created a consumer market with loads of choices. Casual gamers are spoiled for choice and the small or nonexistent price tag on a casual game often draws in players that might otherwise not game at all. As smartphones and tablet device use continues to expand through the global population, casual gaming is sure to see a continued rise in popularity.

AAA Collapse

The future of the AAA gaming franchises looks less rosy. The return on investment for AAA games can be quite small, relatively speaking. Polygon reports that while Ubisoft posted a $48 million dollar profit in 2012, it was only a 3 percent slice of its $1.4 billion dollar revenue. AAA game development teams are often much larger than their casual and indie counterparts, and many have turned to outsourcing basic coding and graphical work to inexpensive third parties to reduce the cost of blockbuster game development. AAA games were once known for extended narratives and providing dozens of hours of single-player storyline, but that may soon become the exception and not the rule.

Downloadable content for big titles is becoming the standard, and many console titles even offer “season passes” that provide the player with free access to all future downloadable content – or in the case of “The Walking Dead” game by Telltale Games, a single year's worth. Pushed by a market that is driven by microtransactions, AAA developers are struggling to find profitability in large games, and seasons passes and inexpensive downloadable add-ons are quickly becoming the norm in the world of console gaming.

This doesn't mean people are moving away from consoles or giving up on the big developers and their franchises. In fact, CNBC reports that half of all XBox One consoles purchased in 2014 so far were bundled with “Titanfall,” a promotion that spelled tremendous success for Microsoft. However, AAA developers may very well go the way of old Hollywood studios – when the cost of developing a piece of entertainment exceeds the possibility of profit, something has to change.

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