The Soviet Union was a command economy. Here’s how it worked: Want to open up a restaurant? Ask the government first. Want to publish a book? Ask the government first. Don’t ask the government? We’ll throw you in a gulag and add you to the 10+ million death toll of Soviet Communism. With a ghoulish group of unelected tyrants managing the ambition of every Soviet citizen, naturally not a whole lot of innovation creeped out from behind the Iron Curtain.
Much like the economy of Soviet Russia, most of the console game content ecosystem is ruled by gatekeepers. These individuals are similar to Soviet bureaucrats, except they have been tasked with the low impact activity of approving content instead of executing teenage gymnasts when they fall off the parallel bars in the Olympics.
The process of getting content by a gatekeeper is time-consuming and unpredictable. After begging and pleading to get licensed for developing and publishing on one of the major console platforms, your game must go through many layers of approval.
To start, a game’s basic concept must be approved or otherwise re-worked to the pleasure of the gatekeepers. This is the first of many approval or “greenlight” sessions. On some platforms the game may be cancelled at any time when a corporate apparatchik decides your content is no longer appropriate. Can you imagine pouring millions of dollars into a game only to have it cancelled by some clueless cube-dwelling gatekeeper after it hits beta? Who would invest in such a business?
Not many. This is one reason why investment in mobile and social gaming is hot, and there is very little capital raised for console development. When I speak of console, this includes downloadable games such as those on PlayStation Network or XBOX Live Arcade.
Let’s contrast this with mobile or social. Got a game or app idea? Just start developing. When you have something usable, throw it out there and see what happens. Take the results of your release, refine your idea or kill it.
This is Customer Development–the process of identifying valid customers for your product and developing in small chunks to quickly iterate in response to user behavior. You can’t do this when the mere ability to release your product is determined by the opinions of a few people at the platform mothership. The fact is, gated platforms break the customer development loop.
This dooms gated business models to be left in the dust when platforms that allow lean startup style development innovate rapidly to meet customer demand and tastes. You can already see the start of this with the sagging console market over the last few NPD reports, massive layoffs in the traditional console sector, and huge valuations and acquisitions of social and mobile gaming companies on the rise.
Yes, channels such as the AppStore, Facebook, or Android Market aren’t totally open. However, as long as you play by the rules you can pretty much do what you want. It’s true–the rules change and can be somewhat arbitrary. But there’s nothing stopping you from starting development today.
Not all is well in social gaming, however. Facebook is in danger of nuking its ecosystem with heavy-handed enforcement of its constantly changing and vaguely detailed policies. After recent events such as LOLApps getting force-choked by Lord Zuck for seemingly minor infractions, Facebook may need some help in learning how to foster a healthy app developer ecosystem in the long-term.
Facebook is closing off the platform and acting more and more like a gatekeeper every day. Whereas, in some ways console platforms are opening up. Microsoft’s XBOX Live Indie Games featuring a menu of community approved independently developed games is a big step forward. Recent speculation on Microsoft’s efforts in porting Silverlight to the XBOX360 has suggested a possible AppStore model is planned. The dinosaurs are evolving. (Well, at least one of them)
Apple is nowhere near as heavy-handed in its enforcement of rules–and Apple’s rules are far more explicit. A healthy and profitable balance has been struck between open catalogs and gatekeeping in the AppStore. Perhaps Lord Zuck can take a cue from Emperor Jobs before permanent damage is done.