BizPunkMitch Lasky's blog

This week I spent a day at Dean Takahashi’s GamesBeat conference (where I did a panel with some sharp investors from other venture firms) and two days at the Game Developer’s Conference (including a solo session in the business track — slides posted here). Didn’t get a chance to see many GDC sessions, given all the meetings and presentations, but I was able to see a couple, and walk the floor and check out what was on display at GDC. I also caught up with many old friends and colleagues over the course of my time there, and met with a number of entrepreneurs.

I went to my first GDC in 1993. Literally, the entire game developer community fit into a single banquet hall in San Jose that year. The next year, the “old timers” (Chris Crawford, Ernest Adams, etc.) were both lamenting and celebrating the explosion of newbies. They asked for a show of hands at dinner in ’94, which indicated that about half the attendees were at their first GDC. Fifteen years later, with the demise of E3, GDC is now the pre-eminent show on the domestic calendar. This year’s GDC was certainly as well-attended as any show I can remember.

What’s great about GDC is that despite the huge surge in attendance, it still feels like a “gathering of the tribe” and the speakers are still remarkably forthcoming and candid about their craft — you rarely feel like you are sitting through a sales pitch when you attend a technical session. I always learn more at GDC than any other conference.

There were a couple of big trends in evidence that I think are worth mentioning:

1) Digital Distribution: between the massively-hyped OnLive launch, the Qualcomm-backed Zeebo, the large number of MMO’s and casual game plays, the frothy (and mostly misplaced and uninformed) attention given to iPhone/iPod Touch, and the frequent lamentations about long development times and huge budgets for traditional console and PC games, digital distribution was clearly the trend of the show. It seems to me that the old-line publishers are way out of position on this one. I predict that you’ll see a strange detente between retail and traditional publishers (maybe a trade-off on used games vs. digital distribution) as they circle the drain together.

2) Virtual Goods: with advertising on an apparent decline as a way to monetize free games, a worry about how many online subscriptions an average user is willing to take on, and a yawning gap between the retail price points and free-to-play ARPU, virtual goods has emerged as the “white knight” business model for games. Easier said than done. I heard that Don Choi from OGPlanet gave a great presentation on the actual mechanics of virtual goods, but I sadly missed it (Don worked for me as a business development executive at JAMDAT before returning to Korea — he’s a very smart guy).

3) The Economy: not what you’d think. It was really the profound lack of visible concern about the economic melt-down that was so startling. Attendance was up. The “job fare” aspect of GDC seemed to be in full swing. Certainly the venture appetite for games is not what it was two years ago, but I got the distinct vibe that the industry expected to make it through the down-turn, with most job losses hitting the big publishers rather than the indy/next-gen developers.

4) Hardware Transition: again, significant by its general absence from the discussion. We’re 4 years into this cycle, and historically at this point we would have been obsessing about Xbox vs. PlayStation vs. Wii, speculating about hardware and who was getting early access to dev kits, etc. I heard none of that. I saw a lot more MMO-enabling technology than console-enabling ones. It begs the question whether there will actually be a transition in the traditional sense. With the X360 and PS3 already moving well in the direction of being living room set-top boxes and home media hubs (with music, online services, Netflix, etc.), could we possibly see a disc-less PS4 from Sony?

Comments - 3

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  2. S. Foust

    Digital distribution is a favorite topic of mine. I’m curious, do you think this is a market with significant barriers to entry? Steam has really taken hold and has been rapidly gaining marketshare recently, but I wonder whether some new upstart couldn’t come in an revolutionize the space and quickly usurp the first entrants. It seems like the infrastructure required to be successful, while not easy to replicate, is not as capital consuming as establishing and maintaining a legitimate real world distribution mechanism through retailers.

    I also wonder whether you predict the large publishers moving aggressively to develop their own online digital distribution platforms or if you see them outsourcing that to third parties like Valve.

    Virtual property is another great topic in games. I have seen more companies moving toward this model or trying to find some way to monetize their games without charging for them. I suspect the logistics are pretty complex, and I wonder whether increasingly attributing a recognizable real world value to digital products will have some pressure on the terms in end user license agreements. I wonder if it becomes harder to say a person has no property interest in the in-game items when the person has spent a couple grand acquiring them.

    And, for the record, Go Arsenal!

  3. Thank you very much for your kind words. You can find my GDC PPT on Side Share (

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