Short explanations of the most important terms relating to the business of games.
2.5D: See Isometric 3D.
360° production: An IP which from inception is created for distribution across multiple media platforms at the same time, such as a television programme which is also a game and a mobile application.
3D Games: This refers to several types of gaming. Many games contain 3D environments comprising objects that can theoretically be viewed from all angles. 3D games are also games where players can see a greater depth of field using stereoscopic glasses or without glasses on special layered screens.
AAA (or "Triple A"): A title that has sold or is likely sell in large volume typically in excess of 1m units at retail.
Advance: Sums usually paid to developers by publishers and/or distributors to fund their development. Advances are usually non-refundable and are typically royalty-based.
AI: Artificial Intelligence is technology that seeks to emulate the random and complex nature of human thought, behaviour or movement rather than following a set course of stimuli and responses. A subset of AI is pathfinding, i.e. AI that informs the routes that player and non-player characters take past obstacles in a game environment.
Alpha / Alpha Testing: The term alpha refers to a version of a game that has core gameplay but is neither feature nor Asset complete. Alpha is typically an early stage of a game's development, when testing checks the programme for broad Gameplay quality, and errors/ Bugs.
Analytics / Metrics: The terms Analytics / metrics refer to software that analyses and displays user behaviour within a game. A wide range of proprietary and 3rd party solutions exist, some specialising in particular genres of game (such as MMOGs or Virtual Worlds) or game platforms (such as Social Network Games or Smartphone Games). Analytics / Metrics underpin Data Driven Design.
Angel Funding: Funding for unlisted companies from high net worth individuals.
App Store: Network retail outlet accessed from and selling software for smartphones operated by a wide range of handset manufacturers, OS providers, network operators and other service providers.
ARPU: Monthly average revenues per active user whether paying or non-paying.
ARPPU: Monthly average revenues per paying user only.
Asset: Discrete element of a game’s content such as graphical items in an environment or sound files.
ATI: A leading designer of games oriented 3D graphics technology, acquired by chip-manufacturer AMD in 2006.
Auction / Reverse auction: Varieties of Secondary Markets operated by MMOG providers.
Beta / Beta Testing: The term beta refers to a version of a game that is largely feature and Asset complete. Beta is typically a stage near the end of a game's initial development when testing checks a game for Gameplay quality, and errors/ Bugs. For online games, beta testing is often “live”, i.e. conducted in front of a live audience. Some MMOGs and social network games have remained in permanent live beta for many years, which reflects the fact that they are in continuous production.
Boss: A difficult opponent usually (but not always) found at the end of games’ levels.
Boxed product: Product packaged and sold via retail outlets.
Bug: A software or hardware error. A popular story is that the term was coined in the early days of computing when insects used to clog up large machines causing lengthy stoppages.-
Bundling: Including a unit of software with every unit of hardware shipped for a low royalty rate. Often known as OEM bundling. Bundling on mobile means software that is pre-installed on mobile handsets usually free of charge.
Cartridge: A removable silicon storage medium still used for the Nintendo DS series.
Casual: Games genres featuring light, non-difficult and sometimes short-duration gameplay, predominantly in 2D or 2.5D environments.
Casual console: Smaller games delivered online via services such as Xbox Live Arcade, PlayStation Network or Wiiware.
Cluster: A concentration of games companies on a single location such as Seattle, Montreal, Vancouver and San Francisco.
Collectible Cards: Games based around the collection and use of physical and virtual cards. Such cards are sold in packs (the contents of which are random) and comprise varying levels of scarcity to promote their collectability and trading value. [digital?]
Completion Bonds: Debt instruments occasionally used by games publishers to take development costs away from their balance sheet and transfer development risk onto a third party. An example of completion bonds is Gold Master Funding.
Console: A dedicated video games machine such as the Nintendo Wii, Microsoft Xbox 360 and Sony PlayStation 3 which is played via a television screen.
Core / hardcore: Used to refer to both a type of game that is complex and more challenging, designed for seasoned players (examples include First Person Shooters and role playing games) and the audience that enjoys such games (predominantly male and aged between 15 and 40).
Cross-collateralisation: Where there is a multi-title development deal, the developer would not receive any royalties until the aggregate of the advances for all products in the deal has been recouped, and not on a title by title basis.
Customer Acquisition Cost / CAC: The average cost of acquisition of each customer from the games company’s user base at a given point in time.
Customer Lifetime Value / CLV: The average value of each customer over the duration of their interaction with a game or service.
Cycle: Generations of games consoles have typically launched around the same period creating a cyclical pattern of market growth and decline. Such periods have been known as cycles but are becoming less pronounced due to the rise of continual (or counter-cyclical) growth platforms such as PC and mobile.
Data Driven Design: Data Driven Design is the use of Analytics to inform the design of online games, and particularly Social Network Games, often in a live environment. Data Driven Design is used to inform all aspects of an online game, from gameplay, marketing, user acquisition, customer support, pricing and other commercial features.
DAU: Daily Active user.
Developer: A company whose primary business activity is writing (developing) games. Developing games requires a diverse range of artistic and technical expertise including game design, music composition, graphical art/design, AI and programming (coding) ability. Some publishers have in house development teams, some use third party developers. Many developers also have publishing capability, such as distribution, commercials, marketing, support etc, in-house for some or all of their output (depending on the platform).
Design: The rules, structure, learning curve and interactivity that form the heart of a game.
Digital distribution: Software distributed over networks as opposed to via boxed products and retail outlets.
DirectX: The API (application program interface) created by Microsoft for its Windows products and its Xbox consoles. DirectX allows developers to more easily program games for Windows and Xbox by using common hardware and software protocols.
Distributor: A company that distributes boxed game products to retail.
DLC / Downloadable Content: Downloadable content is any content purchased after a full game’s purchase, usually at retail. Examples include packs of virtual goods and additional levels or maps.
DS: Nintendo's handheld console series and current (2011) handheld market leader, updated to include a non-glasses 3D screen in early 2011 (3DS).
Edutainment: Refers to leisure programs that educate as well entertain. e.g.: talking books, interactive encyclopaedias and geographical games.
Emergent Gameplay: Unscripted gameplay that is not designed by a game’s developers that emerges from the patterns of interactions between players, usually seen and encouraged in MMOGs.
Fail Fast: The practice of using analytics to rapidly identify and cancel under-performing titles.
First Playable: An early version of the game, typically following the prototype stage but before Alpha, where the game can be played in a stripped down form to demonstrate core Gameplay components.
Form Factor: The physical properties of a product, i.e. its size, shape etc.
Freemium: The commercial practice utilised by operators of network games whereby some content is provided permanently free of charge and some is only accessed via payment.
Friction: Any step that gets in between a potential customer and the game, equating to lost customers and lost revenues.
Funnel: The steps that a new customer takes from entry towards a predefined goal, such as installation, account activation, registration and purchase. Network games have multiple funnels, all of which are circumscribed by Analytics packages.
Gameplay: The fundamental mechanisms of a game’s Design and user interface that govern all the player’s interactions with the game and make it fun or compelling.
Gamification: The use of gameplay, games community, marketing and analytics techniques in non-games environments.
Generation: A cohort of consoles such as Xbox 360 and PlayStation 3 launched roughly at the same time, typically labelled ‘Current’ and ‘Next’.
Genre: Most games fall conveniently into a specific type or genre of game. Examples include First Person Shooter, role playing and strategy.
Gifting: When players give presents of virtual goods to friends, used as a viral marketing tool for social game operators.
Gold / Gold master: The final version of a game that is ready for shipping to manufacture or release to customers.
Handheld console: A type of video games machine that is small enough to be powered by batteries and is therefore portable. Examples are the Nintendo 3DS and Sony PSP.
Hard Currency: Premium virtual currency bought with real money, of which some games have more than one.
Hardware: See 'Platform'.
In-App Purchasing: Commercial practice used by app and games developers on smartphones to allow players to buy digital content like virtual goods and services from within the app, as opposed to from an App store.
Insourcing: When an Outsourcer’s staff is temporarily based in the client’s offices, providing the benefits of accessibility without being on the payroll
Interactive Television / iTV Games: Games played via set-top boxes rented from cable and satellite television operators. Also called Red Button Games. The latest incarnation of iTV games is IPTV games, which refers to games played via internet enabled televisions.
IP: Intellectual property in game content, brand, or technology, or a combination of the above.
Isometric 3D / 2.5D: A 2D representation that displays the game environment with a 3D perspective but from a fixed camera position, obviating the need for full 3D asset creation and therefore potential lowering development costs.
Java: A programming language used for games development on feature phones as well as, computer browsers.
Kinect: Microsoft’s controller-free motion-based user interface for the Xbox 360.
K Factor / K Co-efficient: A measure of social virality expressed as a fraction equating to the number of new users each newly acquired user recruits on average to install the application using a platform’s messaging channels.
Level: A discrete area of a game, usually completed by a challenge such as a difficult opponent, or by a narrative conclusion. Levels are also milestones in a role-playing game’s player character’s progression.
Levelling / levelling up: Progression of the player character in a game, usually of the role-playing genre. The most common mechanism is a player’s character acquiring experience points, eventually passing thresholds, which release new skills and access to more powerful virtual items.
LMOG: A limited multiplayer online game, as distinct from a MMOG which can up to several million concurrent players, LMOGs are games designed to allow between 2 and 256 concurrent players.
MAU: Monthly Active user.
MMOG: Massively multiplayer online game, a game that is designed to support 256 or more concurrent online gamers and is run as an ongoing games service (for which a subscription or other payment mechanism is employed).
Microtransactions: The sale of Hard virtual currency which is used by players to buy digital content such as virtual goods and services.
Middleware: Technology that helps development of a game and runs in real-time as players play the game. An example is the games engine Unreal Engine 3.
Mobile Social Network Game: A fully-featured social network game played on mobile phones.
Mod: A discrete addition to an existing game created by volunteer developers.
Molehill: Pre-launch title of Adobe’s Flash update which includes support for hardware-accelerated 3D in the browser.
Motion sensor gaming: A way of controlling a game that uses a simplified controller activated by motion or even dispenses with the controller altogether using cameras and other movement sensors.
Move: Sony’s motion-based user interface for the PlayStation 3.
(A) Multiple: A chain of retail stores.
Multiplayer Game: A game that is played by a number of people either against each other or in co-operation with each other. This is as distinct from a single-player game in which the user plays against the computer/console/mobile device etc. See LPOG and MMOG.
Network Game: A catch-all to describe all forms of gaming that uses networks such as online, mobile and interactive TV gaming.
Nvidia: A leading designer of games oriented 3D graphics technology.
OEM: Original Equipment Manufacturers are computer (and other technology) hardware companies.
Offers: A hybrid commercial model that bridges between Hard Virtual Currency and bounties paid by advertisers for lead generation, typically giving players premium currency in return for signing up to an offer.
Offshoring: Outsourcing to third party service providers located overseas.
Operating Systems: The software upon which all other programs run, containing programming routines that are needed to run the computer and otherwise would have to be included in each new program used. PC OSs are dominated by Microsoft whilst console OSs are proprietary. Mobile is dominated by Android (Google), iOS (Apple), RIM and Windows Mobile.
Optimisation: Steps taken to improve network and particularly social games’ performance often in terms of various Funnels identified by Analytics.
Outsourcing / Outsourcer: The use of third party service providers. Outsourcing of discrete areas of a game’s development (such as low-level art and animation) became commonplace in the mid 1990s.
Overages: Royalty payments received or paid after the royalty advance (normally used to cover development costs) has been recouped.
Physics: Technology that defines the laws of physics as they operate on objects within a game including collisions and gravitational effects.
Platform: Also known as hardware and format, this is the type of computer/console that a program or game can be played or used upon. For example the PC is one type of platform and the Sony PlayStation 3 is another. Most platforms need specifically written programs, thus one game might need to be re-written as many as five times to be played on five platforms. A platform is also a framework for 1st and 3rd party applications, an example being Facebook.
PlayStation series: Sony's series of games consoles, started in 1995 with the original PlayStation and succeeded by PlayStation 2 (2000) and PlayStation 3 (2006). The first 2 PlayStations dominated their respective Cycles, setting industry sales volume and longevity records.
PlayStation Portable (PSP): Sony's first portable games device, sporting a large colour screen and multimedia capabilities, the PSP launched in late 2004/early 2005 and compete directly with Nintendo's DS range of handheld devices. A version which eschewed media with download only software, the PSPGo, was introduced in 2009 but was discontinued in Japan in March 2011. A new PSP (codenamed NGP) is due to launch at the end of 2011.
Plug-in: A browser add-on that requires an initial download and installation approval process. An examples is Unity 3D.
POS: Point of Sale i.e. a retail shop floor.
Porting: Converting software to run on another platform, an example being porting an iOS game developed for iPhone to Android.
Premium Versus Free Divide: The ratio of game content and features accessible to free players versus paying players in freemium online games. Also a function of the distribution of Soft and Hard Currencies.
Primary market: Sale of virtual goods and services by a publisher direct to players using microtransactions.
Project Finance: A broad category of financing specifically for games production rather than for the companies involved in the games production.
Prototype: Proof of concept, typically the first version of a section a game created to demonstrate a game’s potential, often in advance of financing.
PSN: The network games service for Sony’s PlayStation and PSP platforms comprising both games (e.g. multiplayer gameplay and games downloads) and non-games services (e.g. catch-up TV services and music streaming).
Publisher: A company that actually oversees the manufacturing, distribution and marketing of a game to consumers. Publishers are the primary source of financing for console and handheld games development. However, many network games developers self-publish, undertaking the distribution and marketing roles normally conducted by a third party publisher.
PvP: Player versus player, a type of multiplayer gameplay in which players compete head to head with others.
R&D Tax Credits: A tax break given by the UK government for expenditure on novel or innovative products.
Real-time: The process of computing a task immediately rather than via pre-preparation or at a deferred stage.
Rendering: The process of creating graphical objects and scenery via computer generation.
SDK: Software Development Kits are tools used by developers to write games for specific platforms.
Secondary market: Sale of virtual goods and services by players to other players using microtransactions.
Serious Games: Games where entertainment is a secondary goal typically behind education. Examples include simulations for military training and games used in the classroom. Serious games are different to gamification, in that they involve the development of complete games.
Sinks: Items or services on which virtual currency can be spent.
Social Networks: Platforms for apps and services using the Social Graph such as Facebook.
Social Gaming: Multiplayer games with social graphs on social networks and mobile phones, as well as MMOGs and Virtual Worlds. Social gaming is commonly used with the more narrow definition of games on social networks.
Social Graph: The interconnection of users’ contact networks on social networking sites such as Facebook.
Soft currency: Virtual currency earned in-game as opposed to purchased with real money.
Split Testing: Also known as A/B testing, this optimisation practice trials different versions of a game’s design, marketing, support or commercial features with multiple user groups in a live environment and uses Analytics to assess which performs best.
SKU: Shop Keeping Unit. Industry term that helps differentiate one game title into its different incarnations on several platforms.
Stereoscopic: Where an image or scene is presented differently for each eye allowing a true 3D perspective. Some head-mounted displays offer stereoscopic vision to increase the effect of being in an artificially created environment.
Streaming Games: A technology, AKA Games on Demand, which allows games to be streamed in real-time via a broadband connection to games devices whilst not actually transferring the whole game. Some streaming games services need to cache substantial proportions of a streamed game on a local hard drive to function effectively whilst others simply stream video and control interfaces. Several generations of this technology have been launched, the latest being renamed Cloud-based Gaming.
Subscription: A regular payment that unlocks all or part of a game’s content.
Texture: Textures are 2D skins that are wrapped around a 3D frame too allow, for example, a polygon head to have facial expressions portrayed upon it.
Tie Ratio: Number of software units sold for every console purchased.
TIGA: UK games development industry trade body.
Tools: Games development technology that assists with a game’s production but does not run in real-time as players play the game. An example is the art and animation tool 3DS Max.
Trade Capital: Commercial funding arrangements with games companies such as publishers.
UGC: User generated content.
Unity 3D: A 3D games engine and development environment for PC and smartphone, which is distributed on PC as a browser plug-in with 45m browser installs worldwide and 400,000 registered developers (as of May 2011).
UKIE: UK Interactive Entertainment, the UK games industry's primary publisher trade body with a membership of over seventy publishers, distributors and academic bodies.
Viral marketing: A huge variety of marketing tools used by online games companies since the 1990s to persuade players to recruit their friends.
Virtual currency: A currency given or sold by the operator of an online game to players, sometimes spanning multiple games within the operator’s portfolio. Many operators use more than one virtual currency. See Hard and Soft Currency.
Virtual Goods and Services: Items, abilities and added value services provided by games operators to players that are free or premium. See Premium Versus Free Divide, and Freemium.
Virtual World: A massively multiplayer online world where gameplay plays a secondary role to socialisation and self-expression.
Wii: Nintendo's games console and successor to the Gamecube. The Wii launched in late 2006.
Work For Hire: Games development undertaken by independent games developers working on IP owned by 3rd parties, usually publishers, from which they see low or no post-advance revenues.
Xbox series: Microsoft's games console series originally launched in November 2001. A successor, Xbox 360, was launched in 2005.
Xbox Live: The network games service for Microsoft’s Xbox 360 console comprising both games (e.g. multiplayer gameplay and games downloads) and non-games services (e.g. movie downloads and online TV services).
Xbox Live Arcade: A component of the Xbox Live service which allows players to download and buy Casual Console titles.