Every day I take the train into New York, I see more and more people with their heads bent over some handheld device, playing games. This is not just an anecdotal phenomenon: global video game sales were $52 billion in 2011, and DFC Intelligence projects that number is expected to increase to over $70 billion in 2017. Compare this to music, which only generated $16.6 billion worldwide in 2011, and it will give you an idea of where consumers increasingly are investing their entertainment dollars.

And as my fellow commuters can attest, what makes this trend even more interesting is the rapid growth of online gaming, including mobile games for phones and tablets. This means a glut of gaming products have hit the market, and you need more than a good idea to be successful. When DEV evaluates companies for our portfolio, there are the things we always look for, such as a solid team with a great track record and an innovative concept that can scale as a business. For gaming, we are focused on several issues that we think increase the likelihood of success: marketing strategy, unique design for the platform, immersive experience, and a vision for a larger business beyond the first releases.

Getting Noticed

Every month, General Assembly in New York hosts a Gaming Meet-Up that features some of the best independent developers in the city. Typically there are one or two demos each night that blow everyone’s minds. These are invariably casual games that were developed for iOS by a small team and are on their way to an Apple App Store launch. So far, so good, but then comes the hard part: how to let people know that a great game has arrived.

This is not a minor issue. Each year, the App Store ingests hundreds of thousands of new entries. Only a handful are highlighted in the store, and even fewer go on to reach a mass audience. In fact, most never see the light of day, which is why over 250,000 app store titles are currently dormant, meaning they have had virtually no activity for an extended period of time. So assuming the game is great to start with, “getting noticed” is the single most important barrier that initially separates failure from success.

There are a variety of marketing strategies to tip the scales in your favor, and we look at these closely when evaluating game concepts. For example, you can attach your game to a known brand. This could be a physical product, a movie, or a celebrity. However, this approach must be managed carefully so the game doesn’t just become an incidental component of a much larger brand marketing campaign. If your game is topical, you can tap a hot news event or trend that is getting broad coverage in the media. Whatever the approach, the game concept must be tightly coupled with the method of marketing it.

Designing for the Medium

Console games use a variety of controllers such as handheld devices, mock guitars, steering wheels, or motion sensors and are usually displayed on a big screen with a sound system. The player is in a particular location, usually seated at a distance from the screen. The menus, navigation, and graphic detail are all optimized to support the gameplay setting. Console game developers have consciously designed their games from the ground up to be consumed in a particular manner.

Tablets are emerging as the new medium of choice for gaming. It is projected that tablets will outsell laptops by 2015, and gaming is already established as the most popular tablet activity. The latest tablets have all the right ingredients for gaming: very high resolution displays, significant storage, and computing power that rivals a game console. We can expect to see continued rapid advancements in tablet technology as consumer investment in the medium grows.

Just as console game developers meticulously built products for the console setting, the next generation of tablet game developers must design for their medium. They have an enviable toolset to work with that includes a portable form factor, GPS, touchscreen navigation, a camera, a microphone and connectivity through Wi-Fi and wireless. The innovative game designs will take full advantage of these features.

Immersing Your Audience

Players of games like Bioshock Infinite or Far Cry 3 are used to mind-numbing graphics and a gameplay experience that draws them so deeply into another world that they become oblivious to their real-life surroundings. The best games have complex storylines with a variety of missions that engage players and hold their interest for hours. It is the anticipation of this experience that prompted gamers to line up and spend $400 million on Call of Duty in the first 24 hours of its release.

On the other hand, casual games currently dominate tablets and phones. They are well-suited to filling free moments using a portable device when you are on the go. It is no accident that titles such as Angry Birds and Words with Friends have become so popular, and they will continue to fill an important niche.  But as the universe of tablets expands, the bigger opportunity may be in highly produced games that are deeply immersive and capitalize on the unique features of a mobile device.

For the most part, casual games have moved to the freemium model. A baseline game is offered for free to encourage downloading of the app. The player can then add premium features for a small fee. However, little has been done so far to build a business around console-style games for the tablet. There are a few initial entries such as Infinity Blade, but the real explosion in triple-A games is just ahead of us. This will change the economics of tablet gaming. Players may not be willing to pay the $60 they shell out for console games, but $10 should be a reasonable price point for eight hours of immersive tablet gameplay.

Building a Business

Everyone has a game-changing app that, with a little investment, will bring riches. Well, maybe not everyone, but you get my point. A business can have an app but rarely is a single app a business. Ask Rovio how many games fell flat before they scored a hit with Angry Birds. They were formed as a mobile game studio in 2003, but the Angry Birds phenomenon didn’t occur until 2010, so the answer is, “a lot!” Now, Rovio is a multi-dimensional media company that includes broadcast media, merchandising, and publishing.

The successful players in gaming will have a broader strategy than developing an individual app or game. They will have a comprehensive business concept that targets a specific audience, type of game, production method, revenue model, and marketing approach. They will build a company that over time carves out an identifiable niche and supports both the hits and misses.

It is also worth noting that being in the game business doesn’t just mean forming a game studio and developing a roster of game titles. There is a wide assortment of businesses that are key components of the gaming ecosystem from development  and promotional tools to ecommerce and advertising  platforms. In the gold rush years of Red Dead Redemption, it was the purveyors of mining tools that consistently made all the money.

A great game experience is just the start. When companies are ready for outside capital, they will need to prove they have more than the “cool” factor. Marketing strategy, design sensibility for both the platform and the user experience, and a vision for growth are all things DEV sees as critical elements for success. How are you going to grab the attention of those MTA commuters or the kids at Game Stop the first time, and then maintain that engagement through the next release, and the next, and the next, and the next?

- Alan McGlade