A couple of days ago, an article was posted on gaming site Gamasutra regarding the state of the retail videogame industry. The analyst writing the feature didn't have much good news. Retail gaming sales is still taking a nose dive and, in the worse case scenerio, we can expect revenues in 2012 to come down to the same levels we saw while in 2005. The writer indicates that this was the time of the DS launch, but before the 360 launch and my memory confirms this.

In a way, this isn't very surprising. Right now, we are missing the number one factor/driver that lead to the heady days of 2008 when games were flying off shelves. The time when even music retailer HMV was diversifying into selling games (but they no longer do, thanks to the downturn). Three factors after 2005 contributed to the claim that gaming was surpassing the movie industry:

1) The launch of the Nintendo Wii
2) Guitar Hero/Rock Band
3) Modern Warfare (the game, not real life)

All three items contributed to the growth of the gaming industry from 2006 to 2008 and that main factor is... the casual gamer! The Wii was the most influential driver of this with it's family friendly collection and motion controls (now grandma can play!). This was closely followed by the music gaming phenomenon (now anyone can be a rockstar!), which brought in all kinds of interest from non gamers to the point where Activision was forced to milk and eventually destroy the genre. And finally, we have the start of the Modern Warfare franchise in 2007. Though MW isn't exactly a 'casual' game, it did bring in a lot of people who normally don't play to buy a 360. A lot of people I know own a 360 just for that one series (and maybe a Gears of War or a Forza). Now everyone can be a bad@ss killer, yay! That's sarcasm, by the way.

So the video game down turn we're seeing now, I believe, is simply these casual gamers leaving the industry as we know it. Wii sales are on the decline, the music genre is on life support and even Modern Warfare's numbers have peaked. Basically, sales are down because there are simply less grandmas, rockstar hopefuls and wannabe soldiers of fortunes around to float the boat. Where did they all go? That's easy. Mobile and social games, of course! Pretty much all of the casual stuff from Nintendo down to a few matches of Call of Duty just comes down to a little bit of entertainment here and there, when you're bored, or when there are people over that need to be entertained for just a few minutes. And most of these needs can be satisfied by apps and Facebook games. The idea is that if you're bored, just fire up the phone for a bit, and if your house guests are bored, they can fire up their phones. Yes, sarcasm, but the gist is real.

So we are now heading back down to 2005 levels, when games on the shelves were snapped up by gamers looking to play - not just for a few minutes, but for a few hours. It's not so bad. Maybe this will get Nintendo to go back to making some 'real' games for a change. Actually... no... the future is pretty bleak even from here.

What's the difference? Well, back in 2005 and prior, if you want to make games, the consoles (and PC) is the only game in town. If you want to play any decent games, there are only a few places you can go. This isn't true anymore. Now you can get different types of games just about anywhere. A dedicated machine (or a gaming PC) is entirely optional. It seems that every time I visit Gamasutra, this or that talented game maker left this or that publisher/studio to form his or her own company making.... mobile and social apps! Top tier talent everywhere are leaving the traditional landscape for a place where the hours are less, the pressure to please the publisher non existent, and where one can control one's destiny. This is some attractive proposition, not to be underestimated.

What's going to happen in the future? Unless the mobile and social grasses turn out not to be so green, there will simply be fewer and fewer people making console games. More specifically, BIG, console games, games like Uncharted, or Infamous, which require teams of hundreds. And to be honest, what is a console without your big console games?

I really hate to say this, but I predict that this is the beginning of the end of the gaming world as we know it. The writing is on the wall. Console games will never go away entirely. But we might get to a point where a decent console title will be hard to find. Not just because it's expensive to make, but there will be noone making them.