Serious Games, Serious Play

An Industry Overview

Presented by:

Michael CaiVP Research, Games and

Technology at Interpret

August 22, 2012

Key Discussion Points Overall landscape of the serious games

industry Growth dynamics in different industry

segments Market opportunities and challenges in

various sectors Cost for developing serious games How the industry is currently addressing

measurement and effectiveness

Methodology

Study Specifications

Survey Methods Telephone interview & E-mail survey

Timing July/August 2012

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Study Participants

Interviews with ExpertsAt least 10+ years in industry

Hold positions such as:

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Sector Composition

The experts’ experience covers all the major categories

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Defining the Market

The Serious Games Landscape

Defining ‘Serious Games’

Common Themes:

However…

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Defining ‘Serious Games’

“There’s a tech answer and a marketing answer.”

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Opportunity Today vs. Three Years Ago

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Acceptance outpacing adoption

Acceptance

Adoption

Serious Games

“I don’t expect an upswing as the industry as a whole is still pretty much in its growth stage, but there has been much greater improvement in the profile.”

Opportunity Today vs. Three Years Ago

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• Stigma of ‘game’ is vanishing

• Gamers getting older

• Traditional ways of training, education not working

• Games seen as valid substitutes

• More powerful technology

• More tools available

Reasons Acceptance is growing:

• The economy

• Growth is niche-specific

• Employers hesitant to spend on the workplace

Opportunity Today vs. Three Years Ago

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Reasons Adoption is falling behind:

Size of Industry in Revenue

“The answer to that question is very elusive, difficult to pin down. It’s hard to

find research on the subject.”

“There are indicators of growth, but it’s difficult to quantify.”

“It’s all about definition. Should Bejeweled count, since it’s known to reduce stress? Or Wii bowling, for all the benefits in nursing

homes.”

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Revenue Generation

Direct

Revenue generated by the game itself

Indirect

Revenue not generated by the

game itself• Grants• B2B contracts• Corporate sponsorship

• Licensing software/ subscriptions

• Microtransactions(in virtual worlds)

• Games for marketing (used as assets to sell something else)

• Sales training (improvement in sales efficacy)

• Process optimization (process efficiencies gained)

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Growth Sectors

Agreement that there is:

Growth inHealthcare

Growth inMilitary

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Growth Sectors

Differing opinions for Education and Corporate

• Games lack production value

• Designers don’t know how to make educational games

• Government/institutional involvement is growing

• More money than ever

• Economy causing frugality• Less likely to spend on innovations such as games

• Game feature usage (leader boards, etc.) growing

• Companies have the budgets

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Growth Trajectory

“Much bigger” in the next 5 years due to:

As gaming becomes the norm, barriers to entry get lower

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More gamersMore platforms

Costs and Timing

The Serious Games Landscape

Average Cost of Game/Sim

HUGE variation depending on sector and sales model

Education

Healthcare

Corporate

Government

$1M$500K$0

Fixed Grants; Phase 1 $90K, Phase 2 $750K

Range $30K-$500K; Average $65K

Subscriptions; Bundles $5K-$10K

Licenses; Per Classroom

~$100

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Average Length of Development TimeFor all sectors, more complexity = more time

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Education

Healthcare

Corporate

Government

3 mos.

6 mos.

3 mos.

2-3 yrs.

Variables Impacting Cost

Complexity Assets

# of Platforms Desired

Music/Audio

Graphics Labor

3D Testing

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Acceleration in Cost?

Some say Yes, some say No

• Level of complexity has increased

• Trying to make things simple actually costs more

• Cost of labor has grown

• More off-the-shelf tools available

• Licenses are cheaper

• Barriers of entry are lower

Yes, making games is more

expensive!

No, making games is getting cheaper.

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Types of Metrics

Industry Challenges

Marketing, Game Development, Measurement

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Getting More Industries and Schools to Use Games to Teach

Consider first:

Position I: Providing Proof

Publishing documentation that serious games do achieve desired training or educational outcomes

Offering evidence of cost effectiveness, particularly in comparison to other methods of training and learning

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Getting More Industries and Schools to Use Games to Teach

Position II: “Stealth Mode”

Removing the stigma associated with the word “games” or taking it out of the name entirely

Hiding “games” within the words “activity” or “learning module”

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Getting More Industries and Schools to Use Games to Teach

Making Games More EffectiveFocus on the end user

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Understand end user

requirements

Appeal to all types of end users

Educate end users

• Avoid being “chocolate-covered broccoli”

• How do people want to play (PvP, PvE, etc.)?

• The game has to make sense to the user

Games vs. Sims vs. Virtual WorldsAnalyze the task/information that needs to be taughtDon’t be afraid to combine!

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“Generally speaking, though, training games need to have a very strong simulation component while mere educational titles may indulge on a more traditional gaming experience.”

Making Games More EffectiveInherent to the game must be:

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Design MechanicsGames need to promote learning through their very mechanics, i.e., the act of playing = learning

Point SystemMust assign points for participation, rewards; giving feedback, motivating, building a relationship

StickinessPay attention to the psychological effects, find out what motivates people to play

Making Games More Effective

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However, the following pose challenges to innovation:

Dearth of Talented Designers“Good developers are usually lured to big studios or become indies… dedicated serious games companies might not find it easy to get the right talent.”

CostsComplex design and realistic simulations are not cheap. Also, some institutions are dependent on government funding.

Making Games More EffectiveAnd the biggest criticism:

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Need for MeasurementAren’t enough tools that are proven to actually measure the effectiveness of a game; progress is slow on that end.

Improving Marketing to Increase Buyer Interest

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Emphasize Outcomes• Market the outcomes being achieved, make the focus of games secondary

Positive Press• Publish more success stories to improve category’s image, show positive side of games

Future Opportunities

Research Inspires… More Research

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The Ideal Trade Group

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Key Questions Raised by Our Experts

What are the

parameters of

the serious

games market?

Is it a

fragment of

something else?

Where do mobile games fit in?

Is one country ahead of the game?

Where do opportunities lie beyond the usual suspects?

Does terminology matter?

THANK YOU!

Useful Links:

www.seriousplayconference.comwww.seriousgamesdirectory.comwww.seriousgamesassociation.com

Contact:

sbohle@seriousgamesassociation.com