Steam, Nintendo, VR, mobile, the metaverse, and the future of games

Video game development is still young and changing rapidly. It is difficult to recognize the industry today from its shape 10 years ago when Polygon was founded.

As with other industries and cultures that are rapidly growing and developing, this industry inspires lots of speculation. Analysts, pundits and investors attempt to anticipate the next big thing or influence the market. A lot of the information is useful. Some of this is absurd.

It can sometimes be difficult to discern the truth from the fiction, the past from the present, the future and what is changing from what remains the same. To that end, here are 10 things you didn’t know, or had forgotten, or might have been misled about the present and future of this business we call games.

1. Mobile games changed everything, but they also didn’t

Polygon image of Apple

Ten years ago smartphones were relatively young and the industry was still reeling from an enormous gold rush. This included a grab for casual gamers and an effort to transfer core gaming onto the ubiquitous new devices. Many predicted the death of consoles; of course, that didn’t happen (although in some Asian markets, like Japan, they were dealt a terrible blow).

The reality was that mobile gaming had a significant impact on the overall market, despite not reducing core gaming. Mobile-only games have struggled with quality-control and business models, but the barriers between mobile and “traditional” gaming are gradually falling — FortniteMobile is just as popular as any other hit, and subscription services such as Apple Arcade or Netflix create amazing collections completely without bullshit monetization.

2. Only video games can create metaverses.

In the past couple of years the tech industry, particularly Mark Zuckerberg’s Meta, has fallen over itself to will a persistent internet reality called the metaverse into being as the supposed successor to the smartphone. None of the use cases have been proven yet — except in games, which arguably birthed the conceptAnd began developing it with the advent of the massively multiplayer game over 20 years ago. Fortnite and RobloxThese fully-fleshed out metaverses have large communities with booming content industries and internal marketing, as well as avatars with legs. There’s no evidence yet that metaverses are a mass-market proposition outside games — or that they need to be.

3. The audience is massively more diverse — and more adult — than it used to be

While this may seem like a basic demographic reality, you’d be amazed at how few people actually grasp its importance. Gaming was traditionally viewed as a pastime for children and young men. That bias still exists, but it’s falling away with increasing speed, even if you choose to ignore the vast influx of older women gamers introduced by the smartphone revolution.

Gen Z and younger players are much more diverse, particularly along gender lines, as they race ahead of the industry’s sluggish attempt to diversify itself. Perhaps just as significant is the steadily increasing age of the average gamer — millennials seem much more reluctant to let go of the hobby than earlier generations of gamers. This poses another, different set of challenges for an industry that is used to catering to — not to say exploiting — an audience with an abundance of free time.

4. VR is not just a trend, it’s the future.

At E3, 10 years ago, I had a surprising meeting with John Carmack, a legendary programmer who was promoting virtual reality and a homemade headset by Palmer Luckey, Oculus founder. It was tremendously exciting; the industry’s next “next big thing” was here. It didn’t take a genius to guess what the only thing anyone would be talking about at the following year’s Game Developers Conference would be.

Source image: Sony Interactive Entertainment| Source image: Sony Interactive Entertainment

VR didn’t fulfill that level of hype (even if Zuckerberg, for one, is still chasing the dream). However, the VR revolution was more than a flash in a pan. VR has become a well-established technology that supports a niche but durable hobbyist gaming community. However, the majority of users seem to be resistant. The same can’t be said for its sister tech, augmented reality, which, in the form of Pokémon GoAlready, a megahit killer app has been found by. What’s the difference? With AR, you don’t need to wear anything on your face.

5. You can’t map esports onto regular sports

Here’s something that has puzzled many observers and tripped up many investors: Why didn’t esports happen? Or perhaps they happened in the wrong manner. Any attempt to make competitive video games’ media presence look like regular sports failed, from TV broadcasts to match reports to geographically based team franchises. To this day, major tournaments are either a marketing extension run by the game’s developer, or a disreputable wild west that makes boxing promotion look unimpeachable.

Instead, esports culture has a symbiotic relationship with — is really just a subculture of — Twitch streaming, which has created a new paradigm for how fans relate to both the pro players and the action itself. In this space, punditry and analysis is meaningless and even the match results don’t really matter; all the audience wants is proximity to skill and relatable personalities, so they can dream about gitting gud or just hang out with a friend.

6. Cloud gaming will be important, but only for a short time

Next big thing that is most likely to happen? Be the next big thing is probably cloud gaming (or streaming, but we’ll call it cloud gaming to avoid confusion with Twitch streaming). But maybe “next” is a stretch. Cloud-based gaming works well after a few shaky starts. It will take a while before cloud-based gaming becomes ubiquitous like streaming audio and video.

Photo: Justin Sullivan/Getty Images

These are just a few of the reasons. While cloud gaming is most convenient on mobile devices, Apple has expressed concern about it using its 30 percent cut and bypassing its app store. As such, it withholds support for iOS. Google’s Android policy is more uncertain. Cloud is not a good option for smaller games. Streaming them over long periods of time consumes much more data than downloading them, and many modern smartphones are powerful enough to handle them. The most important thing is that the internet infrastructure has to be maintained in order for a satisfactory experience to be possible.

Most likely, the convenience of using standard hardware and the lack of need for special equipment will prevail. Until then, the potential for gaming subscription services like Game Pass will probably be held back too — the two seem inextricably linked. Google Stadia proved that no one is interested in an ownership model of streamed gaming.

7. YouTube created a celebrity culture around games, but it won’t replace games media

Many times, games journalists were told that YouTube would make them obsolete. Yet we are here. YouTube is a great medium for video games. It has also become an area for celebrity culture, which has had a positive impact on accessibility and diversity within the gaming industry. But it turns out that not all forms of reporting are suited to the video format, while others are made untenable by YouTube’s broken business model.

There’s a common denominator between YouTube and “traditional” games coverage in recent years, and that’s a turn away from the industry and toward communities of players. That’s where the action is — and there’s no doubt that YouTube helped shift that focus.

8. Games have never been more expensive and difficult to make — or cheaper and easier

It’s a frequent lament — often made by big publishers and platform holders as they raise their prices — that, as technology advances, games get more and more complex and expensive to make. It’s certainly true that, at the top of the market, there’s an arms race (or death spiral?) Where the scope and budgets of AAA productions have gotten out of control and publishers must be more cautious and less risk-averse about what they do.

Image: BlueTwelve Studio/Annapurna Interactive

Yet look past these, and the much-missed “disappearing middle” of mid-budget productions, and you’ll find an industry where small teams have access to tools that allow them to make surprisingly visually rich games (StrayRecent examples include Steam, Nintendo eShop and itch.io, while distribution has never been more easy. The games industry is now closer to its 1980s roots, which are democratized and enthusiast-driven, as well as creative and agile.

9. Steam has won the console war.

Don’t mistake me — consoles are not dead, nor will they die anytime soon, while competition between Sony, Microsoft, and Nintendo remains virile. Twenty years ago, nobody would have believed that Valve’s software platform would save PC gaming and rival consoles. Steam boasts 120 million active monthly users. This is far more than PlayStation Network. It’s also more than the lifetime sales of PlayStation 4 or Nintendo Switch. Within a couple of years it could easily eclipse PlayStation 2’s all-time record of 155 million.

It is impossible to ignore steam at the moment. Everybody You can find a variety of publications there. The platforms of the future aren’t hardware-specific; consoles aren’t going anywhere, but they’re only part of any picture, and open platforms like PC and mobile have a gravity that can’t be denied. That’s where players are, and where everybody will go to find them… Well, almost everybody.

10. Nintendo is an exception from every rule.

It is a fact about many games that were in use 10-20 years ago. Nintendo is a company that does what it wants, doesn’t care about any trend and swims against all tides. Nintendo doesn’t publish on Steam, doesn’t care about VR, has pretty much lost interest in mobile, and largely ducks out of the AAA arms race. This company is looking for new and cheaper ways to distribute old technology. This has led it to a place where it can turn a life sim about home-decorating animals into Japan’s best-selling game of all time and the global hit of the pandemic. Nintendo has mastered the art of making good games and selling them as a whole. It’s the oldest trick in the book, and it will never go out of style. You should never, ever, ever place a bet against them.