Issue link: http://digital.copcomm.com/i/8034
■ ■ ■ ■ Business M iddleware targeted at the electronic entertainment industry has evolved in recent times from a set of products focused on helping game developers automate graphics and animation to a full suite of prod- ucts for automating tasks ranging from graph- ics to character intelligence. Meanwhile, the companies making middleware for interactive entertainment have broadened their reach to include many more platforms outside of game consoles and PCs, including mobile phones, PDAs, and set-top boxes for interactive televi- sion (ITV), and some are now reaching into new markets, such as Blu-ray disc players and automation in the fi lm industry. According to fi ndings in Acacia Research Group’s “Middleware for Interactive Enter- tainment 2009,” spending on game middle- ware will continue to be slow in the fi rst half of 2010, with publishers and developers remain- ing reticent about spending. However, spend- ing will pick up when the video game pipeline revives in the second half, when investment in new projects returns. As nervous as they are, developers and publishers will need to have new games in the pipeline. T ey cannot delay development indefi nitely. Spending in the ITV segment also will re- main slow for the fi rst half of the year based on the saturation of the digital set-top box upgrade market in mature markets and low- er price points in emerging digital television markets. Mobile middleware spending will increase as the demand for smart phones with much more sophisticated hardware make gaming and other entertainment applications more accessible on mobile devices. Overall spending on middleware for elec- tronic entertainment will increase at a com- pound annual growth rate of 9.3 percent, from approximately $1.3 billion at the end of 2009 to just over $2 billion at the end of 2014. Console/PC It is no secret that the electronic entertainment industry has suff ered along with the broader economy over the past 18 months. T e slow- down in the video game business has had a ripple eff ect, making it much harder for indus- try suppliers to generate revenue growth. Un- fortunately, it will take some time for video- game developers and publishers to increase spending on middleware products. T e outlook for spending on game middle- ware is sketchy for the fi rst half of the year. T e lull is primarily driven by cancellations and delays experienced in mid- to late 2009 in developing new games for consoles and PCs. It does not help matters for middleware pro- 36 March 2010 Trinigy’s Vision game engine can be used to create entertainment for a range of platforms. viders that the industry is mid-cycle between console launches; this, coupled with reluc- tance to invest heavily in game development, has left the pipeline relatively dry. While both Sony and Microsoft are releasing new control- ler technology in 2010, which will require new games that take advantage of both the Motion Controller and Natal, respectively, the lead-up is still nothing like a console launch. T ese delays mean that the growth in spend- ing on middleware will remain slow through 2010. If new consoles are delayed longer than their typical seven-year launch cycle, that will push a return to fast growth even further out as game developers wait to invest in new tech- nology until they have access to development programs for new consoles. Casual gaming is having a huge impact on console and PC gaming. Earlier in the decade when casual gaming was taking off , the theory of most game developers and publishers was that casual gaming would be additive. Core revenue from the hard-core immersive gaming sector would remain the bread and butter of the industry, and casual gaming would add to that revenue. In an economy where consumers walk away from a $60 console or PC game and eagerly buy up a $10 casual game, developers and publishers are looking at casual gaming to generate revenue that previously came from hard-core games. Casual game revenue was not supposed to replace hard-core game rev- enue, but for many publishers it has. T is has left middleware out in the cold in many cases. Casual games just do not need all the bells and whistles of a hard-core game, the sector where most middleware providers have been focused for a long time. However, the news is not all doom and gloom. T ere are several things on the horizon that will push game middleware back into the kind of growth territory expected of nascent technology industries. At some point, game console makers will launch new platforms. T e new platforms may not be developed on the typical launch schedule, but the advances