The video games industry is changing rapidly. Read on to find out how the landscape is changing, and the challenges that lie ahead for the UK games industry.
I once asked a video games professional which technology and market trends he saw impacting on his company over the coming years.
When he answered, he was at pains to distinguish between trends - significant developments - and fads - flavours of the month with a sell-by date.
If events over the past year and the discussions at Develop Conference in Brighton a couple of weeks ago are anything to go by, we can (almost) confirm that social (including online via social networks and social in your living room with the Wii, Kinect and so forth) and mobile gaming are not a fad.
They are not even a trend.
They are the new reality with which video games studios all over the world are having to come to grips.
Triple A spectaculars are not going away, but they are changing too - just look at the Battle.net online and social infrastructure supporting Starcraft 2, the possibilities of user generated content as harnessed in the lovely Little Big Planet, or the innovative co-op features of a personal favourite, Demon's Souls.
The leading player - and media darling - is of course Zynga, the SF start-up which in less than five years has reached a quarter billion users.
According to analysts, is worth between $15 and $20 Billion - more than Activision or Electronic Arts, two traditional 800lb Kongs in games publishing.
Wave of innovation
The games industry has benefited greatly from a new wave of innovation in platforms, genres and business models - social and mobile gaming experiences have expanded its audience by at least an order of magnitude (if not two).
Almost everyone is playing now. Old clichés about 15-35 males blasting aliens away in their bedroom remain true (do count me in), but they are only a part of a growing story.
But as is always the case with disruptive innovation, what is true for an industry (and its consumers) may not be so for the companies (and countries) that dominated before the paradigm shift.
Closures and growth
Over the last year we have seen many studios that specialised in console development go to the wall.
Large publishers are reallocating resources from offline to online.
The UK, a traditional heavy hitter in consoles and offline PCs has seen its fair share of studio closures - most recently Black Rock, Bizarre and Ignition.
At the same time, ambitious start-ups such as Playfish (now acquired by EA) or Mind Candy have leaped into new markets, and are enjoying phenomenal rates of growth.
It's encouraging to see veteran studios such as Brighton's Relentless moving successfully into digital distribution.
Access to the right resources
The big challenge ahead is ensuring that our development sector has access to the resources it needs to resolve its 'innovators dilemma', maximising the gains (and minimising the pains) from the ongoing transition.
- Access to knowledge about what works and what doesn't - which we have supported in the past through our mentoring initiatives. We also hope to learn much from the digital activities of the games consortium of UK developers that we have helped set-up.
- Access to the right skills - In Next Gen, the Independent Review of Skills for the Video Games and Visual Effects Industries that we worked on with Ian Livingstone and Alex Hope, we identified bottlenecks in the talent pipeline for these industries - including problems with the provision of those business skills games entrepreneurs will need to thrive in the choppy waters of the new marketplace.
- A policy framework that improves access to finance and encourages innovation - The Money Game and The Innovation Game, which we published last year, suggested that existing incentive schemes for investment and Research and Development don't reflect the needs and innovation activities of the (relatively) young UK games industry, particularly as it moves into new markets. We put forward recommendations to remove these barriers.
We will be doing our bit to ensure that UK's talented developers have what they need to push the creative boundaries of these new platforms and networks.
They surely have what it takes.