Upstart indie game company Ouya has made serious waves with its self-titled game console. The under-development system wants to be an open gaming platform, built around freemium games running on Nvidia's Tegra3 platform. According to the project's popular Kickstarter page, the Ouya will cost $99, but won't be ready until at least March 2013.
Despite the hype, however, there are some serious questions about whether the game industry can support another living room console, and whether gamers are looking for more set-top boxes to plug into their TVs.
Rich: Fact: more than 45,000 backers have pledged a total of $5.8 million toward the development of the Ouya game console via Kickstarter (disclosure: I'm one of them). The company has also announced service partnerships with OnLive, and content providers like Square Enix, and the creators of the Fallout and Call of Duty franchises.
No one has suggested that the Ouya will replace an XBox 360 or PlayStation 3, much less the coming next-generation consoles. But with Nvidia's powerful Tegra 3 graphics chip in both the Ouya and the similar, Android-powered WikiPad, these devices can generate graphics on par with or better than any iOS game. For millions of people, that's good enough.
Dan: I'm excited that people are excited about developing indie game hardware. At the same time, these devices fall under my definition of a "solution in search of a problem."
Is the public crying out for another set-top box that plays games? Or another handheld game console? The answer, in both cases, is no. Ouya has certainly generated a reasonable amount of attention on Kickstarter, a funding platform currently enjoying a reputation as a cool place to find and develop unique ideas. But, the main reason many of the projects on Kickstarter are on there is because they have no rational business plan, and therefore can't attract traditional investors. Kickstarter's main claim to fame right now is a couple of massive success stories, Double Fine and Pebble, neither of which are anywhere close to a shipping product.
Rich: So would it be fair to label you a "Kickstopper?" With respect to the Ouya and the Wikipad, "sell lots of cheap hardware" isn't much of a business model. Taking a cut of software sold over your device, however, seems more viable. The openness of the Ouya also presents opportunities. Exposing your architecture has its risks, of course, but Boxer8 is also giving the hardware and software developers the chance to experiment. It's not unreasonable to think that experimentation could end up rewarding everyone.
Dan: I have no doubt the people behind Ouya are sincere in their desire to break the big three stranglehold on console gaming, but for a platform that will be entirely software-dependent, I don't see a big $50 million AAA game coming its way, or even much in the way of well-known existing properties. A just-announced partnership with streaming game service OnLive (which I'm a big fan of) adds some traditional games, but it isn't exclusive content, and OnLive is practically everywhere now, including its own set-top box, any laptop or desktop, and Vizio TVs. Heck, you can probably build OnLive into a toaster.
Rich: Partnerships and exclusives are important. Wikipad's partnership situation looks murky now that Sony has scooped up its previously announced partner, Gaikai. Ouya actually has one exclusive, though. Robert Bowling, former Call of Duty creative director, has a new studio called Robotoki. They've promised an Ouya-only prequel to their forthcoming Human Element game.
What I like about the Ouya is that its open architecture gives its community the ability to generate its own exclusive content, as well as exclusive functionality. Microsoft, Nintendo, and Sony can throw millions at in-house development and proprietary IP, but inviting users to hack around on the hardware or the root level of the software? Not a chance.
Dan: If the Ouya ever sees the light of day (I won't use the loaded term "vaporware"), it'll be primarily for open-source evangelists, freegans, and anyone sufficiently anti-Apple/Sony/Microsoft, etc.
The proposed "freemium" game publishing model isn't the kind of thing that produces hardware-selling killer apps -- its most successful example to date is probably FarmVille. Ouya has raised more than $5 million already, which is impressive, but that's not much when it comes to developing, manufacturing, marketing, and distributing a new piece of hardware.
Despite my skepticism, I really do want to see projects like this succeed. Here's my modest proposal: Ouya should drop the $99 buy-in and give the hardware away as a loss leader, taking a cut of freemium transactions or perhaps offering branding across its interface and social networking features. If you want to really disrupt the entrenched video game business, that's how you do it, give away the razor to get in the door, and make it up on the blades later on.