Technology & AI

Gaming: Get Ready for Virtual Reality

A panel at Stanford GSB's Future of Entertainment Conference describes how we'll soon spend as much time in a virtual world as the real one.

April 01, 2004

| by Laurie Vaughan

We’ve played Super Mario, The Sims, and EverQuest. But are we ready for the metaverse?

It’s getting ready for us.

“Ten years from now, we’ll be spending as much time in the virtual world as the real one. We’ll log in to a metaverse created by game developers, where we’ll explore and play in a personalized way,” Microsoft Home/Entertainment VP Peter Moore told a Business School audience in April.

“Released from the normal world, our avatar — a holographic image of oneself — will be right there in the lounge,” he said. “We’ll meet up with friends, drive to clubs. There’ll be game arcades, shops, and millions upon millions of people with whom to interact.

“And every night, stories will be told. We’ll be telling our own stories, the stories of our lives.”

That’s the heady future of electronic games, according to a panel of industry leaders who shared visions and worries at this year’s Future of Entertainment Conference held April 3.

In the meantime, innovations like wireless control and voice control will give people new ways of playing existing types of games, predicted Jeff Brown, VP for corporate communications at Electronic Arts.

Electronic games, he said, “are the only form of entertainment where we cede authorial control to the user.” By 2010, players will determine most of the challenges and plot twists from their experience. “The AI [artificial intelligence] is going to be just that much better,” said Brown. “It won’t be like the movie you walked out of because you didn’t like the ending — you’ll get to decide the ending.”

Already, pubescent gamers may be turning their backs on the box office. Mark Jung, MBA ‘87, CEO of the newly merged IGN/GameSpy, noted that 13- and 14-year-old boys now spend more time playing electronic games than going to movies.

Most gamers today aren’t kids, however. As the industry has matured, large numbers of players have, too. The demographic sweet spot now, said Brown, is a man of 27 — about the same age of the average console owner. “It’s no longer all about boys in their bedrooms,” said Moore, “any more than it’s about a cute Italian plumber in overalls.”

Recent figures show videogames are a $10 billion industry in the United States. In a business with such apparent promise, are there looming problems, bubbles that could burst?

Absolutely, the panelists said. The gaming industry, like any action hero, must negotiate obstacles in order to fulfill its destiny.

Obstacle 1: Rising costs, short life cycle. A video game is typically made for seven different platforms (computer, console, etc.) and distributed in three major North American markets, said Doug Lowenstein, president of the Entertainment Software Association. Yet its life cycle on the market may be only six weeks. That’s one shot at success, with a very expensive bullet.

How expensive? Making a next-generation immersive role-playing game might cost $20 million to $30 million, said Moore. The figure is lower for sports games, “where you can keep the engine going a few years,” he said.

Introducing a new video game is a big risk for all but the biggest companies with the greatest volume, said Jung. He compared it to releasing a movie to a box office window, where sell-through has to pass the break-even point. “How long can you go on building games and losing money on every single game? Where are you going to recoup profit?” With titles already priced at up to $59, mass-market players seem unlikely to pay more for any but the most spectacular games.

“This is where I get to apologize to [Professor] George Foster for skipping his class,” Jung added. “Because cost accounting is actually really important, and in this industry, it is screwed up.”

Obstacle 2: Piracy. The industry is essentially shut out of 90 percent of the world-regions like China, Russia, Eastern Europe, and the Middle East, where the black market predominates. Opening up these markets with effective international laws and firm enforcement is “a big, long-term challenge,” said Lowenstein. “But it offers hope of building more volume for more titles in far more markets than we’re able to compete in now.”

Obstacle 3: Talent pipeline. “Our biggest problem right now is [finding] talent — in particular, executive producers who have background in both engineering and art and all the other things you need to do to make video games,” said Brown. “That is a very, very scarce commodity, and I do not see the pipeline to fill it.”

Moore, lamenting the “sequelization” of the industry, added, “We’re starting to live a little bit vicariously through other people’s IP [intellectual property]. When I look at the reliance on the Harry Potters, the Lord of the Rings, the James Bonds, the Terminator 3s, I worry that the creative juices are drying up, that we don’t have the creativity, maybe, that Nintendo started many years ago, when everything was your own IP.”

The people making games today are, for the most part, the same people who’ve been making them for the past 10 years, observed Lowenstein. “Where’s the new thinking coming from? If we don’t innovate,” he said, “we’re going to grow more inward; we’ll go the way of the comic books.”

Brown brought up a trend in his organization that could spawn a new breed of game maker. Electronic Arts, which successfully franchises many Hollywood blockbusters, has begun hiring scriptwriters, producers, and executive producers of such movies to help create the games. “When they get done and they understand interactive,” Brown suggested, “what’s to say that the next thing they do isn’t going to be [an entirely original] game property with that hybrid sensibility and great storytelling?”

Obstacle 4: Cultural backlash. “We have some extraordinarily violent content today,” acknowledged Lowenstein, who has successfully negotiated regulatory challenges in the past. “In five to 10 years, it will be almost indistinguishable from reality. If you get to a point where the people you’re killing in these games look like your friends, we may face a renewed threat to our medium.”

The industry is known for its clear-cut rating system, designed to inform parents as well as players. “Our message has been all along that it’s the responsibility of the parent to manage that interaction in the home,” Moore noted.

Brown, calling himself an absolutist, questioned the distinction between watching someone get killed in a Tarantino movie and watching it happen in a video game. His take on the threat of a renewed backlash: “I think the only thing that would heat the issue up again would be the question of how many people are doing this instead of watching television. And then, my prediction for the next 10 years would be: Get ready for a lot of TV news documentaries on how video games are screwing up your kids and you’ve got to get them back to watching TV.”

Will there be television in the metaverse?

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