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TGS 2011: Wada and the paradigm shift of gaming’s future

Thursday, 15th September 2011 18:20 GMT By Brenna Hillier

Square Enix’s Yoichi Wada turned visionary in his TGS address this morning, telling the industry to climb the mountain of games tech diversity rather than fall. Brenna Hillier reports from Tokyo.

Wada at a glance

Joined Square in 2000.

Became president and CEO in 2011.

Chairman of CESA and VC of Digital Content Use Promotion Conference.

Instrumental in 2009 Eidos Interactive acquisition.

Satoru Iwata’s impassioned anti-smartphone tirade at GDC 2011 foreshadowed a grim reception for the largely disconnected, markedly conservative 3DS. Nintendo has become something of a byword for the Japanese games industry’s reputation for facing firmly backwards towards the glorious past.

What a sharp contrast with Yoichi Wada’s opening keynote to the Tokyo Game Show 2011. The Square Enix president and CESA chairman was strictly business, bypassing nostalgic hyperbole in favour of presenting some cold, hard facts – with all the graphs pointing up, not down.

Drawing on his long history with gaming, Wada scoffed at naysayers who believe the “traditional” industry markets are dying, leaving no place for the Japanese giants of triple-A development.

“There is a revolution,” he said, then pointing out: “Along with this revolution, the market itself is expanding.”

A new kind of gamer

Wada didn’t deny the changes wrought by new kinds of gaming, openly admitting that user’s willingness to invest in dedicated gaming machines has dropped as multifunction devices like smartphones have become better platforms for gaming.

Beyond that, the new gamer, growing up in spheres far from those of the last major hardware cycles, doesn’t understand the kinds of games built for these paradigms. The kid who kicks off with the instant gratification of Angry Birds doesn’t want to spend hours learning to use the twin sticks, or figure out the state-swapping of RPGs, Square Enix’s own forte.

This new kind of gamer, whose first experience with gaming may have been the gorgeous 3D graphics of a casual smartphone title like Infinity Blade, doesn’t recognise the benefit of increased processing power in dedicated consoles. This new kind of gamer doesn’t see the point in lashing out on hardware for one purpose only, and doesn’t want to pay a premium on a game up front, but set their own value as they play.

Geology

But Wada’s acknowledgement of the massive growth and importance of emerging markets didn’t ring a death knell over traditional gaming platforms and models.

He argued instead that the appearance of new kinds of gaming is history repeating itself: the first generation of games, arcade cabinets, asked players for a coin every time they wanted to play, even though that experience might last only a few minutes. When Nintendo introduced NES, an affordable purchase for ordinary families capable of playing multiple games, those who had been unwilling to outlay that one hundred yen coin hopped on board.

The industry veteran showed a graph of gaming markets over time, which formed a striking resemblance to a strata map of an improbably sharp mountain.

Approaching the mountain, we find at its roots a few bumps and hillocks – the arcade scene. When we stare upwards to its peak, the spike of smartphone gaming, we can’t but acknowledge that there’s a lot more rock – precious cash money – in the latter than the former.

But if we could cut a cross-section of this bizarre geography, we’d find those arcade roots extending right through to the mountain’s core – still the same low lumps and bumps, but existing continuously over time.

Other forms of gaming haven’t replaced that market – they’ve added new markets on top, layers upon layers. Whether businesses are interested in pursuing those rewards is obviously a different question, but Wada’s point is that the boom of freemium, smartphone and cloud gaming doesn’t spell the end of triple-A development – just its end as the premiere, highest-grossing aspect.

In time, Wada seemed to suggest, something else will come along to subsume even the latest trend – another layer of sediment, if you will – which, thanks to ever-increasing mainstream interest and growing wealth, will prove even more dauntingly spiky than the current peak.

The argument doesn’t rest on NES alone – Wada pointed to several revolutions over the past few decades, including the introduction of multimedia-enabled consoles and PCs, motion controls, handhelds, and online play – and more importantly, he didn’t suggest traditional companies should take his words as permission to close their eyes, cover their ears and keep making the same old games.

“The driving forces have changed,” he said of the games industry. “We have to accommodate this new generation.”

The Future

That’s something large publishers are well equipped to do, more so than platform holders who can value add all they want, but will struggle to stay relevant in an increasingly hardware-agnostic world.

“The competition maybe won’t be between hardware platforms,” Wada continued. “The cloud is a real revolution.”

He added: “[Consumers already make] a lot of investment in devices. I have two PCs, I have a smartphone, I have such huge processing power with all these devices added together.

“If we could concentrate such processing power on the cloud – and if we had better communication powers, we’d have a paradigm shift.”

Not one to shy away from speculation, Wada made some bold claims about the next major steps in gaming beyond the seemingly inevitable shift to cloud gaming, positing holographic visuals and brain-machine interfaces.

But whatever new driving forces shape the games industry, developers and publishers can and will adapt, as they have on each successive wave of change.

“You need to see what kind of gameplay experience you can provide,” Wada said. “What do customers see as value in games? We’re seeing a shift.”

Decades later, Wada noted with some humour, we’ve returned to our roots. Just as in the arcade, players are once again willing to pay as they play, forking out micro-transactions and subscriptions depending on how much satisfaction they find in gaming.

The executive urged developers and publishers to take these new values into account, and to find ways to make games that offer an experience which cannot be reproduced – a value-added experience.

Like Iwata’s notoriously reactionary keynote earlier this year, Wada’s presentation was a response to the feeling of gloom coming out of both Japanese and western press with regards to Japanese development.

But rather than ask us to apply the brakes and give him time to catch up, Wada showed himself more than ready to leap on board, and to see his peers along for the ride.

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4 Comments

  1. Ireland Michael

    This is all well and good, and I completely agree with what he’s saying… but Square Enix is not exactly a company whose games have been particularly diverse or innovative in the past few years – most of them have been derivative, uninspired schlock.

    “We have to accommodate this new generation.”

    And how exactly are you doing this, Square? By releasing tacky rhythm action games on the 3DS with grainy cutscenes from past Final Fantasy games?

    #1 3 years ago
  2. G1GAHURTZ

    How many years have you been using that picture of Wada?

    #2 3 years ago
  3. daytripper

    what a great read, brilliant stuff.

    #3 3 years ago
  4. Freek

    “Yes, the industrie changing. Oh and by the way here’s another totally traditional JRPG that we spent 8 years making while still not inovating one little bitt of it.”

    #4 3 years ago

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