Simulation's Perfect Storm

ExperiencePoint, May 24, 2006

In any industry, it is the combination of felt needs and appropriate solutions that produce a vibrant marketplace. Until recently, the business game industry had neither in sufficient supply. At best, the simulation market was a peripheral blip on educators’ radars. Affordable solutions were produced by hobbyists. More robust, professional simulations were the purview of management consultancies and cost millions to develop and deliver.

The picture today is quite different. In fact, the confluence of several forces is driving the increased demand and subsequent availability of simulation games for business education:

  1. The Video Game Industry: Digital fun is big business! Worldwide video game software and console sales surpass $30B annually. And the traditional stereotype of the average user has proven inaccurate. Indeed, a typical video game player is 30 years old and socially functional. Nonetheless, recent years have seen sales soften in this market of core constituents and video game makers are exploring new strategies to bolster the bottom line. One strategy receiving particular attention is the development of “serious games”.
  2. The Serious Games Movement: In the past two years, the intertwined themes of ‘learning’ and ‘video games’ have been explored in the popular works of academics, business thought leaders, and pop culture analysts. The “Serious Games” movement was born from a desire to leverage video game makers’ skills in educational applications. Chief among the new products are high fidelity business simulations – games that are meeting the increasing need for rapid Executive Development.
  3. The Need for Rapid Executive Development: In the next 4 years, 25% of the workforce will reach retirement age. By 2016 the number will reach 50%. The looming “experience gap” necessitates swift and meaningful action by organizations to avert a crisis in the coming decade. Because simulation games accelerate time-to-competency, they will play a critical role in Executive Development. Concurrently, the traditional barrier to simulation’s broader uptake – cost – is slowly eroding with the advent of new technologies.
  4. New Technology: Online games are available to users worldwide. This simple fact dramatically changes a business game developer’s calculus – access to such a broad user base with minimal administration and marketing costs enables offering products at lower per participant price points. And with respect to custom simulations, the vanguard of business game development companies have produced a variety of game ‘templates’ that can be inexpensively populated with an organization’s unique industry/company data, best practices, and management wisdom.

This perfect storm requires one final catalyst – the “Killer App” – a business game so indispensable, it achieves rapid and universal uptake.

Like most disruptive technologies, the “Killer App” business game is already here in disparate pieces and its synthesis is on the near horizon. And upon arrival, it will come to define the next generation of business simulations for Executive Development.

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