Google Moves to Disrupt TV Gaming Landscape

27 June 2014

At Google I/O, the company announced a fresh new version of its TV and set top box software solution, named Android TV, and in so doing is now fully behind the strategy of driving consumer adoption through games content.

Announced Android TV partners at the autumn launch include Sony, Sharp, Asus and LG. Central to Google's ambition to make more of an impact on the living room is Android TV support and multi-screen features of Google Play Games, the company's gaming community hub and update center. At the same event, it was announced that the scale of Google Play Games following its launch 12 months ago was now in the hundreds of millions, with 100 million new activations in the last six months.

The TV gaming sector is open to disruption

While much has been made of smartphone and tablet disruption of the handheld console market, even with the dramatic increase in the mobile gaming audience and the time spent gaming on other devices, the $15 billion incumbent TV console games sector remains relatively unscathed. Indeed, early adopter sales of both the Sony PS4 and Microsoft Xbox One consoles have been very strong and the recent E3 conference laid out a strong pipeline of content for consoles, which has genuinely excited gamers.

Alternative TV gaming solutions offered to consumers have come in the form of games through set-top-boxes—either simple apps or on-demand streamed games—and Android consoles. None of these other devices or distribution channels has been able to generate any significant ripple of disruption; telco-led IPTV services are constrained to small catchment areas, while Android consoles have suffered with limited adoption due to a lack of compelling content. Services and devices outside of consoles have been niche and incremental to the existing opportunity.

However, it is clear that the TV gaming sector could be more significantly disrupted if one or more of the larger, global technology companies offered the consumer a compelling solution to extend their ecosystems or if Valve was able to bring its Steam platform effectively to the TV screen.

Android TV raises the bar

Following Amazon's Fire TV announcement with some emphasis on games, Google is the next major technology company to make a more considered play for the living room using games with the Android TV platform. The mobile, tablet and payment ecosystem that Google has built through its OS division is reason enough for the console incumbents to take any Android games initiative in the living room seriously. In 2014 alone IHS Technology forecasts that over 1 billion Android smartphones will be shipped.

Beyond the existing scale of the company's Android ecosystem, key to its strategy is the multi-screen and cross-device support of the Google Play Games platform. With its many millions of users and new capabilities, such as saved games features to allow gamers to move from screen-to-screen and continue playing, Google offers a more compelling reason for consumers to extend the Android ecosystem to the living room.

Android TV: Missing cogs in the disruption machine

While it is clear that Google's latest move to bring games apps to the TV offers potential to disrupt the TV gaming landscape, console companies are unlikely to see its core audience eroded any time soon due to their unique offering and roadmap for technological and service development. More likely is that late adopters of consoles—more mainstream or family audiences—could be prompted to experiment with alternative gaming solutions such as Android TV, especially if they have already invested in the Android ecosystem through their smartphones or tablets.

Still, much depends on Google convincing game developers to make games suitable for the big screen when it is not clear of the potential return or upside from such investments. Porting mobile and tablet apps to the TV will not be enough to drive adoption. Likewise the limited control mechanisms that have plagued non-console TV gaming since the start of interactive TV gaming will need to be overcome—Google states that it expects third-party game controllers to be made available following launch, but content will need to be mapped and tested with these new control mechanisms.

As has been the challenge in previous Android based TV platform initiatives, the reliance on third-party CE companies to build the devices, market the products and drive adoption means that adoption is likely to be lumpy and difficult to predict. Additionally, there is likely to be some conflict of interest between specific partners—Sony for example—especially as there has been a more significant onus placed on gaming to drive adoption.

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