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CAN CLOUD GAMING REALLY WORK? Heads in the cloud


Cloud gaming is on the horizon – but what does it mean for the industry? Top bosses from publishing and retail forecast what trends we can expect to see as the technology catches on


Brian Farrell CEO of THQ


Richard Hilleman


Electronic Arts’ chief creative director


David Perry


CEO of cloud gaming service Gaikai


Tony Bartel


President of US retail giant GameStop


How do you hope to monetise cloud games? Is the traditional retail model suitable, or should companies look at episodic games, micro-transactions and so on? Richard Hilleman, Electronic Arts: Our current experience is that the App Store model is essentially in freefall. That increasingly people in that context need to pay in-game versus out of the game. The good news is that our experience with DLC has been that if we do those strategies successfully, that we get payment rates that are far superior to almost everybody else in the online commerce space.


David Perry, Gaikai:We currently have a strategy that offers many ways to monetise. All we do is charge to manage the servers, then it’s up to the publisher to charge whatever they like. It’s their customer; it’s their revenue. They can come up with all kinds of methods. If it’s subscription-based, that’s fine, or


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they pay for a certain amount of time. And they actually set that pricing in real-time, so we’re not involved at all in the pricing discussion.


Tony Bartel, GameStop: I define cloud gaming as anything that is distributed digitally and enhances the gaming experience— whether that’s a full game download or the sale of DLC. What you’re going to see in a cloud gaming world is first DLC, which is easily monetisable. It’s already a multi-billion dollar business. We see DLC growing from a $3bn global category today, to a $6.4bn category by 2014. That’s a 24 per cent per annum growth rate. That’s a very attractive category to grow in.


Do you see core games coming to tablets and mobile devices in the next few years? Is this something publishers should be excited about? Brian Farrell, THQ: There are already a lot of games on tablets and mobile devices built with





The performance of mobile devices is increasing at an exponential rate and over the next five years they’ll become comparable to your home consoles.


Brian Farrell, THQ


hardcore gamers in mind, and that trend is only going to grow. One of the most exciting things about the increasing capability of mobile devices is how we can build out a digital ecosystem, delivering core games that extend the experiences with associated console or PC games. The performance of mobile devices is increasing at an exponential rate and over the next five years they will become comparable in capabilities to your home consoles, and that’s an incredibly exciting frontier for THQ and other publishers.


Perry: It turns out every TV, every Blu-ray player, and every tablet that’s made today has a video decoder chip in it is ready for cloud gaming. The device becomes a window on a server somewhere else doing much more powerful things than anyone would want to buy. So you can buy a $1,000 TV but make use of a $2,000 computer elsewhere – all that takes is a video decoder chip.


July 15th 2011 15


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