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

The video game industry is young, and it changes very fast. In some ways it is almost unrecognizable now from the shape it took just 10 years ago, when Polygon was born.

Like other fast-growing, fast-developing industries, cultures, and art forms, it inspires a lot of speculation, as pundits, analysts, and investors try to predict the next trend or commandeer the current bandwagon. Much of this is valuable. Some of it is nonsense.

Sometimes it can be tough to sort the myth from the reality, the future from the fad, and the stuff that really does change from the stuff that always stays 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

Image: Apple via Polygon

10 years ago, smartphones were still relatively new and the industry was in the grip of an almighty gold rush, split between a grab for new casual players and an attempt to move core gaming onto these 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).

What actually happened was a half-prophecy, and a kind of best of both worlds; mobile enormously expanded the total market for video games without significantly shrinking core gaming. Mobile-only games have struggled with quality-control and business models, but the barriers between mobile and “traditional” gaming are gradually falling — Fortnite is as much a mobile hit as anything else, while subscription services like Apple Arcade and Netflix curate brilliant collections, completely free of bullshit monetization.

2. Video games are the only successful 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 concept and began developing it with the advent of the massively multiplayer game over 20 years ago. Fortnite and Roblox are fully fleshed-out metaverses that have vast communities and booming internal marketing and content industries, plus avatars that have 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

This one seems like an obvious demographic fact of life, but you might be surprised how few people truly grasp it. Gaming is traditionally understood as the pastime of children and (very) 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 finally more than a fad, but much less than the future

Ten years ago at E3, I took a surprise meeting with legendary coder John Carmack, who was trumpeting the reemergence of virtual reality, along with a homebrew headset made by Oculus founder Palmer Luckey. 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.

Graphic: Polygon | Source image: Sony Interactive Entertainment

VR didn’t fulfill that level of hype (even if Zuckerberg, for one, is still chasing the dream). Nor did the new wave of VR prove to be just a flash in the pan, however. VR is now a mature technology supporting a durable, if niche, hobbyist gaming scene. But the mass audience seems markedly resistant to it. The same can’t be said for its sister tech, augmented reality, which, in the form of Pokémon Go, has already found its megahit killer app. 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 rather, why did they happen in the wrong way? 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 is going to matter, but not for a long while

The next big thing most likely to actually 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. After a few false starts, cloud-based gaming is here and it works pretty well, notwithstanding the humiliating failure of one tech giant to persuade anyone to care. That said, it will be a long time before it becomes as ubiquitous as streaming video and audio.

Photo: Justin Sullivan/Getty Images

There are a few reasons for this. Cloud gaming makes most sense on mobile, but Apple is suspicious of it bypassing its game store and its 30% cut, so it is withholding its support on iOS. (Google is more equivocal when it comes to Android.) For smaller games, cloud makes no sense at all, as streaming them for hours consumes far more data than downloading them would, and modern phones are often powerful enough to run them. Most importantly, the demands on internet infrastructure are far greater than for other media, and it will be a long time before a good experience can be guaranteed in most locations.

The convenience and lack of requirement for specialist hardware will most likely win out eventually. Until then, the potential for gaming subscription services like Game Pass will probably be held back too — the two seem inextricably linked. Certainly, Google Stadia has proven that nobody wants an ownership model for streamed games.

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

Games journalists have been told many times that YouTube would render them irrelevant, and yet here we still are. Video is a natural medium for games, and YouTube became a space for celebrity culture to develop adjacent to gaming, which has been a net positive for diversity and accessibility in the gaming space. 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 budgets and scope of AAA productions are getting out of control, and publishers are having to be even more selective and risk-averse in what they take on.

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 (Stray being a recent example), while distribution through stores like Steam, the Nintendo eShop, and itch.io has never been easier. Away from the big beasts, the games industry actually now more closely resembles its 1980s roots than at any time since: democratized, enthusiast, creative, and nimble.

9. The console war is over, and Steam won

Don’t mistake me — consoles are not dead, nor will they die anytime soon, while competition between Sony, Microsoft, and Nintendo remains virile. But, 20 years ago, no one would have predicted that a software platform made by Valve would not just save PC gaming but rival the consoles in its own right. Steam has 120 million monthly active users, which is 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.

Steam is now too big to ignore, and everyone publishes there, including Sony and even Microsoft, which has its own PC storefront. 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 the exception to every rule, including these ones

This is the truism about games that would have held water 10, 20, even 30 years ago. Nintendo does its own thing, ignores every trend, and swims against every tide. 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. Its version of disruption is to find new ways to sell cheap, 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 knows how to make good game hardware and software, and how to sell those things together. It’s the oldest trick in the book, and it will never go out of style. Never, ever, ever bet against them.