Letting Gamers Be Developers

Microsoft is inviting the 10 million members of its Xbox Live online community to create games for the platform

by Cliff Edwards

Nothing about video games is more important than amassing high scores, and the industry as a whole has garnered more than its share of impressive ones over the past year: Bigger receipts than both Hollywood and the music industry. Casual games sales topping $1 billion for the first time. The Guitar Hero franchise reaching the $1 billion mark. Nintendo becoming the second-biggest Japanese company, thanks to its hit Wii console.

Yet none of those achievements has calmed the fears percolating at this year's Game Developers Conference in San Francisco that the industry may soon start shooting blanks when it comes to creating the next hit games.

With development costs now topping $20 million for many new games, studios realize they must make them more intuitive and easy to use if they are going to attract enough of the mainstream audience to turn a profit. Problem is, they can't make them too simple because that's a kiss of death with core gamers, whose word of mouth is so critical to creating a profitable buzz.

Join the XNA Creators Club

The proposed solution? Let the masses create games for the masses.

Microsoft (MSFT), participating in its first keynote since the software company unveiled its Xbox console at the show five years ago, is inviting the 10 million members of its Xbox Live online community to develop and share their own games for the platform. "The time has come for the games industry to open its doors to all game creators, enabling anyone to share their creations with the world," said John Schappert, corporate vice-president for Xbox Live, in a keynote announcing the new XNA Creators Club on Feb. 20.

With seven user-created games available immediately through Microsoft's service, the announcement trumps Nintendo's plan to do the same with a new program, WiiWare, that was announced last year but doesn't launch until May 12.

An Evolving Model

The gaming industry's business model used to be much simpler. Major studios such as Electronic Arts (ERTS), Activision (ATVI), and Ubisoft typically begin developing new games for the current market-leading console, then begin working on other versions. Or sometimes they cut an exclusive deal with another platform that's seeking a marketing edge.

Because of that, Microsoft, Nintendo, and Sony (SNE) routinely spin monthly sales figures from industry tracker NPD Group to their best advantage.

But these days, the Wii, Xbox, and Sony's PlayStation 3 all boast unique features that are too hard for developers to ignore. Nintendo has its motion-sensitive controller that mimics hand and body movements. Microsoft has that large online community and server infrastructure. And PlayStation 3 comes with a Blu-ray drive, which means extra capacity for more intricate games in addition to high-definition DVDs, as well as a built-in Internet connection that lets gamemakers sell updates directly to users.

Innovative Interfaces and Game Play

But the moves by Microsoft and Nintendo to spur more casual game development are just one step in a trend that's likely to bring ever-more innovative ways to make gaming easier and more intuitive. One small company at the GDC show, San Francisco-based Emotiv, demonstrated an example of where the industry may be headed with a $299 headset called the Epoc.

Instead of requiring users to operate a game with keypads and handheld controllers, the Epoc reads the neural patterns of the brain, even capturing users' emotions and facial expressions, explains company President Tan Le. A simple teaching program can be incorporated in games to monitor your brain activity as you are told to think about a certain action on the screen. Once the pattern is recorded, that specific action can be triggered by the same thought process during a game. Emotiv plans to bundle the headset with one game during the holiday season, and says it's working with several major developers to deliver more in the months to follow.

While analysts say Sony is poised to make a come-from-behind grab for the No. 1 spot in console sales over the next five years with the PS3, the outsize success of the Wii and games such as Rock Band and Guitar Hero have demonstrated the popularity of new interfaces and casual game play.

The resulting drive to exploit these trends has made it more important for the studios to offset their development costs by creating casual games that can grab a larger share of the mainstream audience. "They're really figuring out that success requires being able to offer a full range of games that appeal to the whole family, not just the hard-core gamer," says David Cole, principal analyst at game industry tracker DFC Intelligence.

Edwards is a correspondent in BusinessWeek's Silicon Valley bureau.