Feb 172011
 
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A stark warning about the finances of the games industry has been aired at the Edinburgh Interactive conference.

The sector had suffered “significant disruption” to its business model, Edward Williams, from BMO Capital Markets told the industry gathering.

“For Western publishers, profitability hasn’t grown at all in the past few years and that’s before we take 2009 into account,” he said.

By contrast, he said, Chinese firms were still seeing improved profits.

What makes the difference between Western firms and Chinese developers was the way they went about getting products to players.

Western publishers, said Mr Williams, still relied on the traditional develop methods of putting a game on a DVD and then selling that through retail channels.

Chinese developers focussed primarily on the PC market and used direct download, rather than retail stores, to get games to consumers.

Those Chinese developers were also helped by the low number of console users in South East Asia which meant developers there did not have to pay royalties to console makers.

Future models

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