The Evolving European Video Game Software Ecosystem - The Video Game Industry: Formation, Present State, and Future - page 215

technologies, not the least new consoles (e.g. Wii), and increasingly sophis-
ticated user demand for complex games and advanced interfaces triggered
innovation in content and game software functionality, e.g. increased AI
for non-player characters and more complex in-game physics (Miles and
Green 2008). MMOGs can be regarded as continuing this trend, already
characterized by very high development costs (tens of millions of Euros)
and signifi cant ongoing costs of maintenance, expansion and community
support. This is raising barriers to entry, driving professionalization of
game development and in addition the proliferation of middleware (De
Prato et al. 2010).
On the other hand, the dif usion of the Internet, mobiles and other
platforms (such as Digital TV) opens things up for simpler, often browser-
based, games with shorter development cycles accompanied by new rev-
enue models. Some of these games are distributed and marketed virally
over social networks. Sometimes labelled casual or lifestyle games , they
are easy to play, easy to access (often on dedicated portals or social
networks) and require less time to play. These games are accompanied
by a widening demographic of gamers and are changing the patterns
of play, while at the same time stimulating a related market of associ-
ated advertising (De Prato et al. 2010). They also lower the barriers to
entry on the supply side, both for online and mobile games. However,
as noted by Feijoó (this volume) the abundance of games increases the
need for marketing, which shifts some market power back to publishers
and platform owners.
The video games industry is also converging with other industries, nota-
bly other media and entertainment industries and ICTs. This can be seen
by the wave of new entrants from the ICT sector, not the least following
the trend towards online and mobile, but also in the increasing tie-in of
intellectual property across platforms and dif erent media (sport events and
personalities, fi lms, music performances and media celebrities), as a result
of trying to realize economies' scales and scope, synergies and risk reduc-
tion (Miles and Green 2008).
As a fi nal note, as in many other industries, there is also a long-term
trend of increasing internationalization of the video game value networks.
Major publishers and developers have established subsidiaries around the
globe. In particular, local game developers need to turn to international
publishers for funding game development projects. (See, e.g. Sandqvist, this
volume, for the Swedish case.) There is also a tendency to outsource non-
core development of, e.g. localization and porting of games, adding music
and voice-overs, 3-D object and motion capture, while keeping core devel-
opment in-house (Kerr 2006; Sandqvist, this volume). European developers
are typically outsourcing to, e.g. India or Eastern Europe, to lower devel-
opment costs and alleviate resource constrains (Miles and Green 2008).
Finally, middleware such as game engines are also become more interna-
tionalized (EGDF 2011).