Getting Serious About Gaming

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There are no hard numbers on the size of the serious games market, but Digitalmill's Sawyer offers what he says is a conservative estimate of $150 million, excluding traditional "edugames" developed for primary or secondary school education such as Carmen Sandiego and Math Blaster. "My Fortune 500 clients are collectively spending almost $4 million on serious games. Then there are sales of games like Brain Age—eight million SKUs at $20 each—and Dance Dance Revolution, which we estimate 1 in 20 consumers is buying for exercise," he explains. "I think there's no reason it can't be a billion-dollar market within a decade or sooner."

Gaming's New B-to-B Model

To reach the billion-dollar mark, the market will have to overcome the common wisdom that games are inherently not serious. A serious games market will also require game developers to shift from the traditional business-to-consumer model to a business-to-business one. Today when major studios and publishers are approached by companies interested in commissioning, say, an employee-training game based on a successful commercial title, more often than not those studios and publishers decline. Even if the interested company is offering $5 million, it's not worth the gamemakers' time to divert engineers from a commercial title likely to generate hundreds of millions of dollars in sales.

But new business models are developing. Some new companies are focused entirely on serious games, and others are developing hybrid models. In June, 2005, the successful British developer Blitz Games established TruSim, a division focused on creating serious games for the military, health-care, corporate, and education markets. Also last year, Japanese company Square Enix partnered with the publisher Gakken to create a serious games unit called SG Labs. In addition to its two dozen consumer titles, the Seattle-based Zombie Studios has developed training simulators for defense contractors and the Defense Dept. BreakAway Games, in Hunt Valley, Md., has also established a successful hybrid model, as has the Raleigh, (N.C.)-based Epic Games, whose Unreal Engine technology has been used both for professional training projects and for consumer titles.

And as more businesses such as IBM (IBM), Cisco (CSCO), Johnson & Johnson (JNJ), and Alcoa (AA) look to gaming technologies to train their staffs and connect far-flung employees, more traditional studios and publishers seem to be waking up to the opportunity (see BusinessWeek.com, 8/13/07, "The Name of the Game Is Work"). In April, 2007, XOS Technologies announced that it had licensed the core technology behind Electronic Arts' (ERTS) popular Madden game franchise for use in a series of training tools for collegiate and professional football teams. "Soon every major studio will have a serious games person," predicts Sawyer. "So that when, say, [agricultural giant] Archer Daniels Midland's (ADM) training director calls to ask about developing a sales game there won't be a long pause at the other end of the phone."