To the Next Level: Gaming’s Future Unfolded, by Rui Guedes

To the Next Level: Gaming’s Future Unfolded

Written by Rui Guedes, Board Member at APVP (the Portuguese Videogame Producers Association)

In the ever-evolving tapestry of gaming, we stand on the brink of change, it’s inevitable. Economy, history, and society all run in cycles of change and consolidation, and gaming is no exception. Having been a part of this industry for the last decade and half, I’ve witnessed its growth in all forms and formats, from pixelated adventures to lifelike experiences that captivate millions, silly flying birds and fruit that absolutely must be sliced. As a developer, educator, and board member of APVP, I’ve had the unique privilege of observing this evolution from various angles. Today, I share with you my thoughts on where we’re headed next.

Virtual Reality (VR) and Augmented Reality (AR): Beyond the Screen

VR and AR are not newcomers to our industry, but their potential is only now being fully realized. Imagine games that not only take you to other worlds but overlay fantastical elements onto our own. This technology is set to redefine immersion, making the player an active participant in the game’s narrative. Educational applications are vast, from historical recreations to interactive science labs, making learning an adventure.

Let’s take a closer look at the promise and fulfillment of each technology. Back in 2013 I heralded VR as the next greatest revolution in gaming, since the immersion and the sensations were unbelievable, the potential to enhance certain gaming experiences was tremendous. However, as the technology developed and matured, I also realized quite soon why VR wouldn’t become a mainstream hit like mobile gaming. The primary barrier is the headset. While mobile phones are versatile tools for communication, time-telling, application use, and more—with gaming as an added feature—a VR headset is designed specifically for entertainment purposes. This limitation, where the headset is only useful for entertainment or certain applications and isn’t wearable throughout the day for other tasks, represents a significant hurdle. People need to stop and take the time to “suit up”. It occupies the same “slot” as a console or a PC game, thus competing with them. Not an ideal situation.

On the other hand, AR presents a more seamless integration into our daily lives. The potential uses for AR are endless, ranging from entertainment to industry, healthcare, and tourism. The concept of overlaying additional information on reality to enhance or “augment” it is not only appealing but also promises ubiquity. If there comes a device, much like the smartphone, that everyone uses for multiple functions and that can also run games, we’re looking at the single most monumental innovation since the mobile revolution. Mobile brought portability and a unique interaction with the device through gestures, AR can potentially offer a whole new way of interacting with the world itself. Game designers and creators will be able to explore new deeper and more immersive experiences that don’t require wearing a specific device for that single purpose (you will be wearing something you always wear – like a smartphone).

AR has the potential to redefine not only the future of video games but also the future of multiple industries, especially the software industry. It promises to introduce tools and forms of entertainment that will be deeply engaging, convenient, and universally beneficial. However, this all depends on the hardware market’s evolution. As of now, AR for entertainment is seen as a novelty due to the inconvenience of current AR games on inadequate current devices such as smartphones or pass-through headsets such as Quest or Vision Pro, while existing adequate hardware being either clunky to wear or prohibitively expensive. Nonetheless, this path could be pivotal for the future, indicating that while AR might not have fully arrived, it’s certainly on a road that merits attention.

Artificial Intelligence (AI): A Game Changer

AI’s role in gaming is twofold: creating more realistic non-player characters (NPCs) and tailoring gaming experiences to individual players. AI can analyze a player’s style and adapt in real-time, offering challenges that are neither too easy nor too hard. This personalized gaming experience could revolutionize how we play and develop games.

However, besides the utopian visions of character and NPC creation by game designers, AI presents itself as an invaluable tool for production. The use of AI enables teams to access results faster due to quicker information retrieval, whether it’s fact-finding for a video game, understanding how to apply a formula for whatever, or performing visual explorations of character concepts. Nonetheless, this is not the ultimate solution, and entire teams will not be replaced by a game designer and a toolchain of AIs, at least not in the near future. Observing how technology evolves, it’s clear that AI has and should have a place in the workflow of every studio, which is not a negative development. The use of AI tools can allow teams to operate more efficiently at all levels.

In the hands of seasoned professionals, these tools are game-changing, enabling faster and more efficient execution. For junior members, tools need to (and should be) be tailored to assist both in learning and professional growth. This concept may seem problematic at first, especially in terms of employment. However, it actually fosters a shift in production methods that could address some of the industry’s enduring issues, such as crunch time practices and poor project planning, which in turn can lead to studio operations becoming more stable and as consequence,  steadier employment.

These tools are particularly beneficial for indie and midsize studios, as they can significantly enhance quality and production levels without dramatically increasing cost structures. For larger studios, the opportunity lies in optimization and efficiency, maintaining team sizes while boosting project quality without escalating costs, a critical issue currently.

AI is here to stay, not only in developing clever NPCs and using LLMs to enrich video game dialogues but also in creating new and potent production tools for all roles within the production pipeline. These tools can help professionals excel and studios explore new boundaries for their collective creativity.

The Indie Revolution: A Creativity Catalyst

Indie games have exploded, challenging mainstream titles with innovative gameplay and storytelling. This renaissance of creativity shows no signs of slowing down. It’s a testament to gaming’s power as an art form, and its future will undoubtedly be shaped by these bold visions.

And yet, it is a challenging time to be an indie developer. The economic context is harsh, with funding scarce, and the industry facing an existential crisis. There’s a growing awareness of the problem of escalating production costs versus returns on investment. AAA games in particular, are struggling, as the production costs are so high that the sales required to turn a profit are becoming increasingly unfeasible. This exacerbates the competitiveness in an already competitive market, leading to massive layoffs across the industry and a significant drought in funding. Smaller to mid-size studios, most of them indie, are severely affected.

On the flip side, this crisis may also represent an opportunity. The current state of affairs, being neither sustainable nor logical, has highlighted that the gaming industry for years has suffered from a lack of planning, organization, and structure at management level, the fallacy of nine pregnant women gestating a baby in one month being a common one. This has led to a culture of crunch time, toxic workplace practices, and other unprofessional behaviors. In the current adverse context, managers are forced to work in a highly structured manner, within time and budget constraints—akin to practices in other industries – without any room for clumsy or misguided ideas. This change could enable studios to create great experiences for players while ensuring the process is also enjoyable for those involved.

What does this mean for indies? The opportunity is clear. As larger studios streamline, there is an influx of seasoned talent into the market. This can lead to cross-pollination, either by experienced individuals bringing their knowledge to smaller, upcoming studios or by them joining forces to create new studios and release new games. However, for a couple of years, the economic environment may be harsh for companies not prepared to work efficiently and sustainably, many will not see it through.

Another factor to consider is the industry’s renovation cycle. It has been observed that largely successful studios tend to absorb other studios, leading to consolidation. Eventually, these companies grow so large that they become publicly traded, and consequently creatively stagnant, as they are unable to take significant risks in order to satisfy shareholders. This calcification can lead to their decline, paving the way for new giants. The opportunity lies in this transition, where newcomers have the chance to define the market, establish niches, and enact change. Ironically, the creative downfall of existing studios presents a secondary opportunity: larger studios, in an effort to innovate, may acquire smaller, up-and-coming studios. If well-executed, this can result in a mutually beneficial relationship, where the smaller studio gains resources to grow and thrive, and the larger studio stays relevant. We are in such a pivotal moment right now.

For indies the future is as it ever was: an eternal roll of the dice, with high stakes and even higher gains. The key modifier being now the ability to work in a focused and professional fashion, to make the best of scarce financial resources.

Conclusion: 

Much could be said about the future of gaming. A book could indeed be dedicated to discussing the impacts of the new free-to-play trend combined with the game-as-a-service approach, and how microtransactions influence that balance. We could delve into the role of emerging markets and their trends, examining how they shape the design of new games. A case in point is the success of miHoYo’s Genshin Impact, which showcases the potential of catering to both global and local audiences.

There’s also a noticeable shift from the epidemic of hyper-casual games to mid-core and casual games. Developers have reached the conclusion that the current cycle of hyper-casual development is not humanly sustainable, and the market is already saturated with such games. This pivot reflects a broader reevaluation of game development priorities and market strategies.

Furthermore, we could ponder whether the metaverse will continue to be a significant trend or if it was a collective hallucination spurred by the global lockdown during the pandemic. Similarly, questions surround Web3 and the entire NFT movement: Are these still the future of gaming, or has the industry moved beyond these concepts? The viability of play-to-earn models also remains a topic of debate.

Despite these numerous questions and possibilities, which far exceed the scope of this short article, one thing is clear: Gaming is the most complex and exciting form of entertainment known to humanity. It stands as one of the largest industries today, with the unparalleled capacity to influence billions of people worldwide. Never before have we had a form of interactive entertainment that can educate and reach so many individuals simultaneously.

As game developers, we bear the responsibility of using this reach to provide positive and enriching experiences to our players. It’s our duty to explore themes of right and wrong, good and evil, to foster critical thinking, individuality, and a positive outlook on life in general. While not all games are suited for this purpose, we have an obligation to strive towards these goals.