Why Consoles Didn’t Die

Yeah I was wrong. But hey, so were a lot of people. The PS4 barrels ahead with the fastest selling console ever. Microsoft is making a lot of similar but highly qualified statements about the XBOX One which leads me to believe it’s lagging behind significantly. Still, the recent European price cut and upcoming tent pole releases may perk things up.

photo (39)

Regardless, most console doom predictions haven’t come true. This is because Microsoft, and primarily Sony, changed their business models in response to the looming threat from mobile and tablets. If consoles kept going the direction they were in 2008, we would see a totally different story.

What changed?

No more loss leaders.

Consoles historically launched as high-end hardware sold at a loss–but still quite expensive. This peaked last generation with the ‘aspirational’ PS3 debuting at nearly $600 in 2006. The idea behind this business model was that they’d make it up in software sales and eventually cost reduce the hardware.

This time, Sony took a page out of Nintendo’s book and built lower cost hardware that can at least be sold close to breakeven at launch. The downside being that the tech specs are somewhat mundane. Price sensitivity wins over performance.

Dropping the gates.

The tightly gated ecosystem that dominated consoles for decades would have been absolutely disastrous if left to stand. Sony has largely obliterated their gate and gone for a more authoritarian version of Apple’s curated model. Surely the most significant evidence of mobile’s influence on console to date. Microsoft has also adopted this posture with their ID program. The indie revolution is heavily influencing games, and allowing this movement to continue on consoles is a smart move. Especially when fewer and fewer studios can execute at a AAA level.

Users didn’t move.

A lot of analysts mistook stagnant console numbers for lagging demand. It turns out, there really was just nothing else to buy. Despite hype about core games on mobile–that transition has yet to happen. Most titles console players would recognize as ‘core’ games have utterly failed to gain traction on tablets. Core gamers want core games exclusively on console or desktop while reserving mobile for a completely different experience.

Eventually we’ll see a major disruption in how and where games are consumed. It’s going to take longer than one console generation to transform core gamer habits. It also may be too early to tell. After all, we’re only a few months into this generation.

The fact is, the AAA economy isn’t sustainable. Massive layoffs, even while Sony is basking in post-hardware launch success, shows not all is well with the AAA end of the spectrum.

From Bits to Atoms: Creating A Game In The Physical World

Some of you may recall last year’s post about 3D printing and my general disappointment with consumer-grade additive manufacturing technology. This was the start of my year-long quest to turn bits into atoms. Since that time there has been much progress in the technology and I’ve learned a lot about manufacturing. But first, a little about why I’m doing this, and my new project titled: Ether Drift.

Ether Drift AR App

A little over a year ago, I met a small team of developers who had a jaw-dropping trailer for a property they tried to get funded as a AAA console game. After failing to get the game off the ground it was mothballed until I accidentally saw their video one fateful afternoon.

With the incredible success of wargaming miniatures and miniature-based board game campaigns on Kickstarter, I thought one way to launch this awesome concept would be to turn the existing game assets into figurines. These toys would work with an augmented reality app that introduces the world and the characters as well as light gameplay elements. This would be a way to gauge interest in the property before going ahead with a full game production.

A lot of this was based on my erroneous assumption that I could just 3D print game models and ship them as toys. I really knew nothing about manufacturing. Vague memories of Ed Fries’ 3D printing service that made figurines out of World of Warcraft avatars guided my first steps.

3D printers are great prototyping tools. Still, printing the existing game model took over 20 hours and cost hundreds of dollars in materials and machine time. Plus, 3D prints are fragile and require a lot of hand-finishing to smooth out. When manufacturing in quantity, you need to go back to old-school molding.

You can 3D print just about any shape, but molding and casting has strict limitations. You have to minimize undercut by breaking the model up into smaller pieces that can be molded and assembled. The game model I printed out was way too complicated to be broken down into a manageable set of parts.

Most of these little bits on the back and underside would have to be individual molded parts to be re-assembled later--An expensive process!

Most of these little bits on the back and underside would have to be individual molded parts to be re-assembled later–An expensive process!

So I scrapped the idea of using an existing game property. Instead, I developed an entirely new production process. I now create new characters from scratch that are designed to be molded. This starts as a high detail 3D model that is printed out in parts that molds are made from. Then, I have that 3D model turned into something that can be textured and rigged for Unity3D. There are some sacrifices made in character design since the more pieces there are, the more expensive it is to manufacture. Same goes for the painting process–the more detailed the game texture is, the more costly it becomes to duplicate in paint on a plastic toy.

We're working on getting a simple paint job that matches the in-game texture.

We’re working on getting a simple paint job that matches the in-game texture.

So, what is Ether Drift? In short: it’s Skylanders for nerds. I love the concept of Skylanders–but, grown adult geeks like toys too. The first version of this project features a limited set of figures and an augmented reality companion app.

The app uses augmented reality trading cards packed with each figure to display your toy in real-time 3D as well as allowing you to use your characters with a simple card battle game. I’m using Qualcomm’s Vuforia for this feature–the gold standard in AR.

The app lets you add characters to your collection via a unique code on the card. These characters will be available in the eventual Ether Drift game, as well as others. I’ve secured a deal to have these characters available in at least one other game.

If you are building a new IP today, it’s extremely important to think about your physical goods strategy. Smart indies have already figured this out. The workflow I created for physical to digital can be applied to any IP, but planning it in advance can make the process much simpler.

In essence, I’m financing the development of a new IP by selling individual assets as toys while it is being built. For me, it’s also a throwback to the days before everything was licensed from movies or comic books and toy store shelves were stocked with all kinds of crazy stuff. Will it work? We’ll see next month! I am planning a Kickstarter for the first series in mid-March. Stay Tuned to the Ether Drift site, Facebook page, or Twitter account. Selling atoms instead of bits is totally new ground for me. I’m open to all feedback on the project, as well as people who want to collaborate.

How to survive the mobile gaming apocalypse

I was listening to the latest Walled Garden podcast and towards the end they stopped just short of stating what many developers I talk to have been saying–mobile gaming is dead.

Ok, not actually dead. After all, mobile gaming revenue is higher than it’s ever been, and mobile consumption of everything is eating the planet. However, mobile gaming is completely dead as a business model for independent developers and undercapitalized startups.

IAP has become so dominant that there’s really only one somewhat reproducible way to make money in the AppStore: make a hamster wheel f2p game in a handful of established genres and spend tens of thousands of dollars a day on user acquisition to drive traffic to it. Despite many bold experiments, the charts increasingly bear this out.

Republique

This means that some companies with top charting mobile games aren’t actually making a profit as UA costs can eat up most of the revenue. Surely this will produce a shakeout and consolidation in 2014. This is similar to what happened to Facebook games circa 2010 causing a mass exodus to mobile.

Now that mobile is dead, where should you escape to? There are several options.

PC

The PC, and more specifically Steam, remains the platform of choice for those who actually want to charge money for content. There’s a large market for premium games and Steam has loosened their gate with the advent of Greenlight. Some prominent developers have been abandoning mobile for PC with their new projects. Despite PC sales declining in the face of tablets, it makes sense. This is where the paying customers are.

Consoles

A lot has been written here about the impending demise of consoles, but Sony and Microsoft managed to change up their business model and product strategy enough to have early success with both the PS4 and XBOX One. One of the big changes has been the thawing of the gated ecosystem and allowing independent developers to self-publish. Oh yeah, and on the Wii U also.

Next generation console owners are starved for content. There will be many independent successes over the next few years before the channel becomes completely saturated.

VR

On one hand VR is merely a peripheral for existing games, on the other it’s part of an entirely new category of wearable computing and an emerging platform. Oculus Rift is the clear leader with a huge round of investment and development kits widespread. However a glut of VR headsets is on the horizon.

Oculus is building an ecosystem out of their device, but VR content can be distributed through any PC gaming channel. Although, supporting every single headset may be a nightmare for developers–isn’t it time for some kind of standard VR API?

Board games

Board games are a cottage industry yet a hot category on Kickstarter. As an example, Sandy Peteresen’s Cuthulu World Combat iOS game Kickstarter failed miserably, but when re-pitched as a board game, it blew past its funding goal. Going from digital to physical presents a lot of new challenges for developers, but does have a dedicated fan base of paying customers. Plus, you can’t pirate a board game!

Facebook / Web

Facebook games ‘died’ in 2010, but are ironically becoming an increasingly common alternative platform for mobile developers. Especially if you have a working web client already, why not put it on Facebook? The problem is the audience is decidedly non-hardcore. Facebook games can still make some money, but for a very specific audience. However, for hardcore games, the open web still remains a viable place to find an audience of paying gamers. Kongregate proves this.

What needs to change in mobile?

The supremacy of f2p and the very few options for user acquisition make the momentum towards free and the companies with enough money to compete in the mobile UA wars insurmountable. Apple could make some changes to the App Store to help support premium games and other alternative business models, however there really isn’t any incentive to do so–Either way, Apple sells phones. It’s difficult to foresee anything but the continuing dominance of f2p and mega-publishers on mobile in 2014. If you have a ton of cash and resources, solving this problem is hard, and thus very lucrative. For the rest of us, plan your strategy accordingly.

How to go to a Conference

With my GDC Taipei Summit talk, I wrapped up a year of touring the world public speaking. It started with my GDC Online talk on iOS and Android development with Unity3D and concluded with a few trips to Asian GDCs with an expanded version of that talk. In between I did a few other presentations, including co-hosting the awards at Casual Connect SF.

Live from GDC Taipei Summit!

I figured I’d share my tips on how to effectively go to a conference as an entrepreneur.

Conferences are about networking, not information

You rarely learn anything at a conference. This is because the vast majority of speakers are shamelessly promoting themselves or their companies. Most lectures are thinly veiled advertisements. Also, absolutely never go to a panel. You’ll hear better conversations in the hotel bar afterwards. Never listen to sober panelists.

Conferences are about who you meet and the connections you can make. The best way to do this is to make yourself highly visible. Which leads to my second point.

Only attend conferences you are speaking at

If you have fears about public speaking, you’re just going to have to get over it. If other people are merely promoting themselves or their companies, why shouldn’t you? Naturally, an effective speaker shouldn’t shill–and if you are obviously self-pimping, you’ll never get invited back to speak. It’s a delicate balance.

Speaking is a great networking opportunity because you also get access to exclusive events such as speaker dinners that allow you to network with others who may be able to unlock some opportunities for you.

Target your audience

Speaking is all about attracting the right audience with the types of people you want to network with. You need to cater your talk to these people. For instance, this year my talk was highly technical. Technical talks are useless for business development purposes as the only people who attend are engineers–the so-called ‘losers’ of the proverbial Gervais pyramid.

If you’re trying to generate revenue for your business, speaking about the “why” and not the “how” of your subject is a better idea. Discussing why something should be done may attract more decision makers and less actual productive people.

On the other hand, technical talks are great for recruiting talent. I know many technical founders that give in-depth engineering presentations so they can recruit candidates from the audience afterwards. But please–don’t end with a “we’re hiring” slide.

Don’t have meetings

Don’t have meetings at a conference. Most gatekeepers and decision makers are merely going to conferences as a paid vacation. (See one of my earliest posts) They’re hovering within a gradient of two states: drunk or hungover–and if not, are intensely focused on getting laid before the end of the show and thus won’t remember anything you discussed. Try to get the commitment to meet them at their workplace after the conference–when they are presumably sober and have no choice but to listen to you.

Those are just some quick tips from years of attending conferences. Have an objective when you go. When someone asks you what you are doing, have a story to tell. If you just aimlessly wander trying to make serendipity happen, it never will. Self promote, and have a mission.

The Future of Physical Retail for Games

The fate of retail is grim. Best Buy is shuttering stores and showrooming threatens to destroy whatever’s left of the physical goods ecosystem. With digital downloads from Steam, the App Store, and the rise of web and social gaming it seems physical retail for games is going the way of the Compact Disc.

Yet, a strange thing is happening to music–At least in hip-hop circles (where I almost exclusively dwell).

Hip hop is the nerdiest music on earth. Super rap fans will wax nostalgic about who used what obscure sample first, the never ending saga of beef, and even the jacket color a rare 12 inch came in. Many of hip-hop’s biggest fans are obsessive collectors. To the untrained eye, there may be little difference between an episode of Hoarders and a look inside Just Blaze’s apartment.

Regardless, are 12 inch records a relic to be lost in the era of digital downloads as the entire economy shifts from atoms to bits?

The record label, Get On Down, is a product of the deluxe hip-hop album reissue trend from outfits like Traffic Entertainment started in the mid-2000s. These are completely remastered albums with hard to find remixes and brand new liner notes. Since most consumers download, stream, or steal their music, Get on Down needed to create another reason to purchase the product. As a result, they came up with a new formula: including exclusive collectibles with the album.

How about a Biz Markie jigsaw puzzle? An MF Doom Lunchbox? Or this incredible wooden case containing a perfect replica of one of hip-hop’s most prized items, the legendary Purple Tape? It’s like the Ark of the Covenant, except your face won’t melt off when it’s opened. Well, unless you’ve never heard Incarcerated Scarfaces. ‘90s babies prepare.

Get On Down’s production of limited edition collectibles dials right into the obsessive collector gene in hip hop fans. Other labels have similar strategies, such as Chopped Herring’s super limited vinyl pressings from artists both old and new. Fans are spending $40 for a new single and hundreds of dollars on eBay after the limited run expires.

Games can learn a lot from this new era of hip-hop music. The physical disc a game resides on is near meaningless in 2013. Still, that doesn’t mean gamers don’t want physical goods. Activison’s huge success with Skylanders proves that. Disney’s massive bet on Infinity is more evidence. For older gamers, look at the many successful Kickstarter campaigns featuring detailed plastic miniatures. Most people can’t be actually playing the games associated with these figures. They are collecting cool plastic belonging to an artist they like. Sound familiar?

There may be a backlash against digital games and virtual goods leading to an era of limited edition physical goods aimed at a small, but obsessive audience. Fans still want to own a piece of an IP they can touch.

In the past, collector’s editions have come with such ridiculous props as night vision goggles and console skins. It’s time to get serious about physical goods as an integral part of a game’s IP. High quality miniatures is a good place to start. Looking at Get On Down’s product line, you can see how they fit the physical product to match the artist. Each game deserves it’s own carefully crafted set of physical goods.

In the future, physical retail may only be an expensive collector’s edition without a disc–Just an ornate box containing high quality figures and a download code.

Lost Classic: Sega’s Panzer Dragoon Saga

As we come to the conclusion of the longest hardware generation in console history, no doubt some great games will get lost in the shuffle. At this point in the cycle developers have mastered the technology of current platforms. Some of the greatest games of a generation will be released only to be overlooked for a set of shiny new launch titles on the next boxes. It’s a tragedy.

One such game is Sega’s lost masterpiece, Panzer Dragoon Saga for the Saturn. Released in 1998–mere months away from the Japanese launch of the ill-fated Dreamcast–PDS is an excellent RPG most Saturn owners never played. Very few copies of this highly rated game were produced in the West–driving up eBay prices beyond $400 in some cases.

Panzer Dragoon Saga’s combat system

A few years back I was able to callously take advantage of a friend in need when he had to sell his game collection during a move. I picked up his set of rare Saturn games (including Burning Rangers and Shining Force III) for a steal. For years these games sat in a box on my shelf until in a fit of total boredom I decided to play through Panzer Dragoon Saga.

For those who don’t know, Panzer Dragoon was a launch title for the Saturn in 1995. It was the last great original fantasy universe in games, featuring a hybrid of modern technology and fantastic monsters exquisitely detailed by famed French artist, Moebius. It’s really amazing how his awesome concept art comes through in the low-res textures and primitive rendering technology of the time.

A total of five Panzer Dragoon games were produced, with the third one being Panzer Dragoon Saga. PDS was a diversion from the original games, mixing the world exploration and character development of a JRPG with the series’ signature rail shooting action.

Plenty of blogs and reviews have waxed nostalgic about this game, so I’ll keep it short. The overworld exploration elements are very basic with simplistic puzzles and low-detail landscapes. The storyline is derivative and delivered with pixelated full motion video–remember, this is back when Cinepak was hot. Where the game really shines is in the combat system.

Combat in PDS consists of a flying shooter sequence similar to the original Panzer Dragoon. Your dragon is engaged in an endless flying combat encounter for the duration of the sequence. You can wait while charging your meter (leaving you vulnerable) to unleash powerful attacks or strategically choose to strike, using a combination of guns, lasers, and special skills. Positioning is important, as some monsters have weak spots only visible from certain perspectives.

Another interesting wrinkle is how your dragon evolves through the course of the game depending on how you treat it. This evolution provides you with new combat skills and lets you decide which form to use before encounters. If you get wiped out in battle, try it again with a different form and set of skills. Granted, this is rarely used as the game is kind of easy.

It’s kind of amusing to read about the “massive” development of PDS. At the time, the game’s 2 year development cycle and 40 member team seemed immense. Today, AAA games can sometimes have staff numbering in the thousands, development times of well over 5 years, and pre-marketing budgets of over $100m. Sadly, PDS ended up being Team Andromeda‘s swan song. They were later folded into Sega Sports Japan which currently makes forgettable sports games featuring Mario and Sonic. A true atrocity.

Although some parts of the game would have to be fleshed out to keep up with modern JRPG standards, Sega would be doing this generation of gamers a favor by producing a 3DS remake. Until this unlikely event, you owe it to yourself as a true nerd to play through Panzer Dragoon Saga–If you can find a copy at a reasonable price.

How To Know If You Are Suffering From Dunning-Kruger

The Dunning-Kruger effect is a plague that strangles the progress of humanity. It is the fact that those who suck overestimate their ability, while those who don’t underestimate their ability.

Dunning-Kruger is what keeps money flowing to the confident and inept, only for these funds to be set ablaze in a bonfire of incompetence. Once the fire is out, a new flame burns as the cycle repeats. Those who possess true skill often do not have the self confidence to start their own fire. Perhaps this is why we don’t have our flying car.

How do you know if you suffer from Dunning-Kruger? By definition, nobody really knows; both parties are oblivious. The key is in the second element of the hypothesis: those who lack skill fail to recognize it in others.

If you’ve been responsible for a direct hire, how did that person turn out? If you’ve recommended people for jobs, how have they performed? Perhaps the only way to recognize if you are a Dunning-Kruger sufferer is to use this test to see whether you can identify true skill in others.

How do I fare? After a cursory assessment of candidates I’ve interviewed and people I’ve recommended for positions, I think I’ve got a pretty good track record. The majority of the individuals and firms I’ve recommended to others have done exceedingly well at their jobs. Also, my reservations about those I’ve interviewed have been largely proven true–At least when dealing with my own area of expertise.

I like to say that I’m just smart enough to know I’m a complete idiot. But, when it comes to Dunning-Kruger, It’s not enough to be humble. You could be faking it.

National Caramel Popcorn Day

Tech has become rather boring lately. It’s quiet. Too quiet. We’re ripe for disruption at some point. Until that happens, let’s focus on something important: like caramel corn.

Did you know April 6th is National Caramel Popcorn day here in the US?

Those who follow me on Instagram may have noticed my penchant for Japanese snacks. Whenever I visit Japan I try to stop in as many kombinis as possible to experience the latest in snackery. In fact, one of my most popular YouTube videos is a mere walk-through inside Japanese FamilyMart.

To mark this important event, I figured I’d write an ode to my favorite Japanese snack, Tohato’s Caramel Corn.

Tohato is a rather hip Japanese snack company with a small array of products. Although, they do have a few other treats that I like, their Caramel Corn product seems to be the flagship.

The original Caramel Corn flavor is just that: caramel flavored corn snacks with peanuts. Keep in mind this isn’t caramel corn as we are used to in the West; caramel coated popcorn. No, these are U-shaped corn formations saturated with some kind of artificial caramel substance.

A piece of Caramel Corn

A piece of Caramel Corn

Much like Japanese Kit-Kats, the amazing minds at Tohato have produced a number of weird and wacky flavors, including limited edition exclusives. Despite the fact that these flavor breakthroughs aren’t based on caramel and the corn merely exists as a vehicle for artificial flavoring, they are still marketed under the “Caramel Corn” banner.

I often reminisce about the Summer of 2010 when Tohato released Ramune flavor Caramel Corn. Ramune is a Japanese soft drink similar in flavor to Sprite. Ramune Caramel Corn came in an unearthly glowing blue hue and tasted like a mutant Froot Loop. It was glorious.

Here’s a photo of my latest haul during a recent trip to Nijiya Market in West Los Angeles. I can’t read Japanese, so the fun of discovery involves trying to guess what the flavor is from the packaging and then tasting it.

Glory.

Glory.

For those less adventurous, you can Google Translate Tohato’s Caramel Corn page. Looks like they have a limited edition boiled egg flavor! I need to track that down. Unless one of my Japanese readers might want to send me a pack. You never know, Brick Buddies is big in Japan.

A Few Quick Notes: GDC2013 Edition

Before we get started, vote for evolve.la

Blatant plug!–please vote for evolve.la in the My LA2050 grant contest. I’m in the running to build a social gaming experiment that will attempt to analyze social media activities of Los Angelenos to determine how they want the future of Los Angeles to look. I need your votes to get evolve.la off the ground! We now continue with your irregularly scheduled blog post.

GDC 2013 Rundown

GDC has become increasingly irrelevant over the past 5 years or so as influence has moved away from the realm of cloistered AAA console game teams and to so-called “indie” developers and the disruptive platforms of mobile and social. Because of this, you can get much better information having conversations with other developers. I spent most of GDC talking to people–you can always watch the good presentations on the GDC Vault.

The trend for 2013 is an industry wide panic over free2play. Presentations and panels worried over whether f2p games are ethical and how the game industry is supposed to survive through this disruption. Considering this is a conversation game developers have been having since 2009, it just goes to show how long it takes for GDC to catch on to major trends.

“Indie” developers were the big celebrities this year. So much so that formerly closed platforms from Nintendo and Sony bent over backwards to encourage garage developers to create content. Nintendo greatly loosened requirements for their development program and even revealed HTML5 support for the Wii U. Sony eliminated concept approval. This shows there are some radical changes ahead for the next generation–Changes I suggested years ago on this blog.

The biggest star of the show was Oculus VR. The wait time to try the Oculus Rift headset grew to over 2 and a half hours by the final day of GDC. I got in to see it and came away hopeful, but unimpressed. The current prototype headset is uncomfortable, but I didn’t spent much time adjusting it. The display resolution is low, causing a screen door effect. When I turned my head, the screen smeared to the point where I couldn’t see anything.

These problems are being addressed. They showed me the physical part for the new screen–the retail version of Oculus will fix the resolution and latency issues. The current kit is strictly for developers and mega-nerdy early adopters. It’s pretty neat for a $300 prototype, but far from a finished product.

I was more impressed with Infinite Z’s zSpace virtual holography system that was on display at Unity3D’s booth. It costs over 10X what Oculus does for no apparent reason. Still, being able to draw 3D splines in thin air and look around them was really cool.

Overall, GDC had a lot of opportunity on display as far as new devices, markets, and tools–but a lot of uncertainty on how to actually make money producing games.

Favorite Quotes of GDC

  • “Cokeheads are better than publishers.”

  • “They said they’d publish my game if I turn it into a Skinner-box.”

  • “The reason why you won’t close the deal is because you’re too competent.”