Seattle Game Developers and Startups Go Social and Mobile, As Industry Shifts

Heading into the holidays, it seems like a good time to look at what’s going on in the gaming space around Seattle. While the core gaming giants like Xbox, Nintendo, Valve, and Bungie are gearing up for a busy shopping season, the mid-size casual game makers and publishers are actively trying to broaden their audience. Meanwhile, smaller developers and startups are seeing new opportunities in casual, mobile, and social games—especially social games.

Welcome to the increasingly fractured and complicated gaming industry. While the recession has hit everyone, Electronic Arts’ $300 million-plus purchase of London-based Playfish earlier this month was a clear signal to startups that you can build a lot of value around games that are played on social networks like Facebook, MySpace, and Hi5. Indeed, with more than 14,000 games available on Facebook, and more than 20,000 on the iPhone, it seems clear that social and mobile games are a big part of the future.

“Play is transforming,” says Chris Early, the former general manager of Windows Gaming Technology at Microsoft and a veteran of the game industry. “People are looking to a more connected space.” That means not just multiplayer games, he says, but those where you “feel like you’re playing with your friends, in a more social environment.”

So what does that mean for established game companies around Seattle like PopCap, Big Fish, and WildTangent? Last month, PopCap Games raised $22.5 million in its first outside funding round in its nearly 10-year history. The funds are being used to accelerate global expansion and distribution of its games. It sounds like PopCap wants to expand deeper into other platforms and devices—its Bejeweled Blitz is an example of a hard-fought success in the social realm (on Facebook). Meanwhile, Big Fish Games, a leader in the casual space, has revamped its management team, hiring a new chief financial officer and chief technology officer last month.

What these companies—and other prominent players like RealNetworks (RealGames)—are facing is that casual downloadable games on PCs and the Web are not the be-all, end-all for their business. (You can read about RealGames’ recent effort with mobile game developers here.) The gaming experts I’ve talked to say there is increasing pressure to diversify into mobile and social spaces with a variety of distribution methods and game styles. That’s the key to broadening their customer base, especially in the recession.

A company like Redmond, WA-based WildTangent, which has reinvented itself several times … Next Page »

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