The Evolving European Video Game Software Ecosystem - The Video Game Industry: Formation, Present State, and Future - page 214

At the same time, new actors are emerging. Internet Service Providers
(ISPs, e.g. AOL), operators (e.g. Orange), application stores (App Store,
Android market), online social networks (e.g. Facebook), online retailers
and game sites (e.g. Gameforge) and mobile phone manufacturers (e.g.
Nokia, Apple) emerge as aggregators in a process of re-intermediation. For
simpler browser-based games, developers may even publish their games
directly, something which is less likely to happen for more complex games.
All in all, the value network is becoming more complex as a result, with
new actors emerging from other industries, battling to establish themselves
as dominant players in the new ecosystem. Figure 11.1 sketches out the
principal building blocks of the entire emerging ecosystem.
Partly a subset of online games, the rapid dif usion of mobile games is
another key trend (Feijoó and Gomez-Barroso 2012). However, it goes also
beyond just being online, in the sense that mobile games of er new opportu-
nities to include wider demographics, ubiquity, personalization and social
and context awareness. In the early 2000s it started to become possible
to download casual games to be used as time-fi llers. The dramatic change
started in 2006-2007, when smartphones with higher computer power,
storage capacity and AV capabilities and mobile broadband with fl at data
rates made mobile games dif use rapidly.
This trend has a number of potentially disruptive implications for video
games, which are further discussed in an accompanying chapter in this
book (Feijoó, this volume). For instance, it appears that, in the mobile
game ecosystem, operators, handset suppliers and application store sup-
pliers counterbalance the market power of the publishers. Also the value
network becomes increasingly complex because of the additional steps
required (as compared to other platforms) to put a game on the market;
this, in turn, provides opportunities for new actors to enter. In addition,
game developers have to adapt to an array of platforms in several lay-
ers of game development. This increases transaction, coordination and
development costs, which in turn leads to some players trying to integrate
and/or control parts of the activities (Feijoó, this volume) in processes of
platformisation where new platform leaders make up gatekeeper positions
(Ballon 2007).
Both of the preceding trends have opened up the video game ecosystem
for new business models and revenue streams . The traditional model of
retail unit sales is now becoming replaced and complemented with, e.g.
monthly subscription-based models; advertising-based models (including
advergames, in-game advertising and portal advertising); pay-per-play (pre-
paid or through micro-transactions); and the sales of virtual items. This
provides opportunities, not the least for game developers, to build relation-
ships directly with customers and for new types of content and games to
emerge (Miles and Green 2008).
Before the advent of online and mobile games, the trend was towards
rising development costs (Kerr 2006). New generations of gaming