On September 24th, Raph Koster (on his first trip to Japan!) gave a talk at Tokyo University as part of the foreign game design session of the CoFesta Game Industry Seminar. 4Gamer has complete coverage of the talk in Japanese, but Livejournal user Jaerik was kind enough to translate.

Koster took an inventory of the audience, getting a census on their professions. After asking for a show of hands from sales and marketing pros, he quipped, "could you folks leave the room and come back later?”

Koster reflected on his past work as a pioneer of the essential MMO -- lead designer of Ultima Online, chief creative officer and Lead Designer for EverQuest II and Star Wars Galaries. That being said, he asserted, “I don’t believe the future of the industry lies in the way large companies develop games anymore.” The current business, he said, is focused on the gamer as consumer and has unconsciously fixated on catering to their preferences, without attention to the increasingly obvious fact that the "core" market is only one small part of a larger world.

He pegged another problem with the industry as it stands -- since the 80's, the scope of game content has increased in some cases by a factor of 150, with the average development budget over 22 times larger than back then. It's analogous, Koster claimed, to the film industry, wherein with projects so large and pricey, a "blockbuster" opening becomes a business essential, complete with enormous marketing campaigns with the aim of recouping production budgets. The result? A vicious cycle hostile to new and risky ideas.

But the advancements of communication technology has begun to poke holes in the approach -- word of mouth carries plenty of weight in an era of instant messaging and mobile communication, and Koster adds that young people seem to have become mistrustful of mass media, in favor of social networking and ligthweight web portals. Despite the strength of the retail game market in the U.S. and Europe, Koster believes that more than half of the industry's revenue will eventually come from casual and downloadable game content.

Moreover, Koster's much-championed user-generated content will be an extension of this trend, he predicts, adding that we'll soon see the game industry start to reflect the more than 50,000,000 people Koster says participate in generating their own content through blogs and websites. And, he continues, Web 2.0 concepts are the key to moving the game industry into the future.

The result? Users with an invested self-interest will raise the bar for the entire market, and the online products model as an adjunct will avoid expensive stockpiling problems with a focus on more long-term niche markets

“We tend to believe that the content makes the game, but this is not true. Rather, the system should be the game," Koster says. He concluded with his tips for the game design of the future: Good things come in small packages. Large things are expensive and fail easily; cyclical metrics are the way; large design docs are a nearly complete waste of time; use digital distribution aimed at niche markets; add user-generated content, leverage the role of individual fame to establish lifestyle image through associative branding, and have an open platform.

[Via Raph Koster's Website]