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Archive for the category “business”

02 Apr 2013

A Few Quick Notes: GDC2013 Edition

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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.”

Posted in blather, business, Nintendo, Sony and tagged , , , , | Leave a Comment
25 Feb 2013
4 Comments

The Winner-Take-All Game Economy

Last week Sony announced the PS4–the first real salvo in the belated next generation console wars. It all seems so familiar; a new box, mind-blowing new graphics, and an array of launch titles we’ve kind of seen before (Killzone, again?). Also, much like every console transition from the NES to the PlayStation 3, we’ve seen the wholesale destruction of development studios not able to make the transition.

This is evidenced by thousands of layoffs in the traditional game sector, including the implosion of at least one long-running publisher. The standard reasons of not being able to compete with increasing production values as well as the inescapable trap of publisher work-for-hire certainly are partially responsible. Not to mention the mobile disruption that has been detailed on this blog for a few years. However, is something else at play here?

There are two precious resources in the ecosystem of games: money and attention. In previous generations games cost a fixed amount of both–You give me $60 and I give you 10 hours of fun in a box. If a gamer had $500 a year to spend on games, 8-10 games would get that person’s cash–spreading the wealth. In this era, there was a healthy market for mid-range titles in addition to blockbuster hits.

Now, many games are “free” and monetize users by charging for consumable in-game items. Games built on this model are designed to string the player along forever, allowing him to spend a theoretically endless amount of money and time in a single title. One game can consume all of the player’s cash and attention at the expense of most others on the market. The winner takes all.

The finite resources of gamers’ time and money are under increasing pressure from a deluge of free content. How do developers survive in this economy? One way is to build shorter, more intense experiences. Games such as FTL deliver hours of fun in 15 minute chunks. This is bite-sized entertainment gamers can snack on while primarily strung out on an infinite f2p hamster wheel. For many developers it may be futile to compete head on with vastly over-funded startups producing endless time sinks for an increasingly fickle audience. Instead, fit in between the cracks and lure players into your wider ecosystem once you get them hooked.

Posted in business, game design and tagged , , , ,
23 Jan 2013
3 Comments

3 Ways Your Employer is a Tyrannical Dictatorship

When it comes to treatment of employees, many employers operate in ways ranging from authoritarian states to full-blown Communist thugocracies. When you read your employee handbook you may notice at least 3 rights trampled upon that we who live in happening Western democracies take for granted. In the interest of flagrant clickbait, let’s list them:

FREEDOM OF EXPRESSION. A key element of a totalitarian state is the control of information. Although increasingly difficult in the Internet era, it can be done–perhaps via the application of massive social engineering or the occasional public assassination. From the Stasi to the Great Firewall of China, the State has its ways. Same for your employer.

One of the first documents you sign when you get your employee handbook is a Non Disclosure Agreement. This makes sure you can’t reveal any trade secrets publicly. This also means anything you say anywhere (especially on Facebook, Twitter, or a blog) can be held against you. If you enjoy expressing yourself online, you might carefully consider your choice of employment. Do you think I would write a blog post like this if I had a real job?

PRIVATE PROPERTY. The hallmark of most failed states is either a ban of private property or the inability for the rule of law to protect said right. Your employer is no different. As we have discussed before, oppressive Invention Assignment contracts are designed so workers have no ownership of not only what they create on the job but anywhere else. Some employers may even want your sex tapes.

FREEDOM OF MOVEMENT. The Berlin Wall was perhaps the most famous icon of the Soviet Union. Its construction was a massive PR blunder for the Soviets, but also one of the few ways they could keep people from fleeing the State. Box them in and shoot anything that moves. Anyone who has plead with HR to use vacation days or spent some time as a veal in a cubicle anchored to an inefficient 9 to 5 schedule may relate.

I’m the first person to admit there is no substitute for face to face communication. However, there are a lot of cases where people may get more work done in isolation at home or a coworking facility.

Also, if you are a CEO trying to recruit top talent, many prospects may want to stay put. If you really want your ninja rockstar, a telecommuting arrangement may be a good idea. Even local candidates can benefit from flex time. Yet many managers want their programmers to spend 3 extra hours a day in front of a steering wheel instead of a keyboard.

TEAR DOWN THIS WALL

Some employers are better than others. It seems the worst ones are those with the strictest policies. Indeed, these rules tend to need more enforcement as your organization grows larger. Maybe it’s too large?

Management may be mystified as to why employees don’t last long before hopping to startups or competitors. I imagine much like Soviet apparatchiks were seemingly clueless as to why Soviet citizens risked being gunned down or tortured to hop across Checkpoint Charlie. A dosage of Glasnost, or perhaps entrusting your employees with a taste of freedom might lead your organization to new highs. Otherwise, it might be time for a visit from David Hasselhoff.

Posted in blather, business and tagged ,
27 Dec 2012
5 Comments

2012 Wrap-Up

It’s that time of year again–the obligatory year-end wrap up post. I figure I’d do some bullet points about stuff that happened that may or may not have been foretold by this here blog…along with some other random musings.

Canaries in the Coal Mine

Two new consoles were launched this year–one handheld and the other is the first traditional console release since the mobile disruption. Fortunes are looking bleak for both. The Vita had 3 quarters of dismal sales figures leaving Sony with junk bond status and totally mystified as to why nobody is supporting the last dinosaur at a mammal convention. Nintendo has been spinning the Wii U launch figures, but it’s too early to tell.

Hey, it’s not all bad. ZombiU was a close call for my game of the year pick! I also really like the Vita–there have been some games of astounding quality on it. Too bad nobody is there to play them.

Social Gambling Supernovas

Social games such as FarmVille and its ilk are frequently criticized as nothing more than compulsion-driven skinner boxes. So, it’s no surprise that in an increasingly desperate quest for hockey sticks, 2012 was the year all subtlety was dropped and social gaming companies built straight up slot machines for mobile and social platforms…as previously predicted by this blog.

Social gambling ARPUs are through the roof, but investors are still waiting for the legal structure to change for real-money-gambling to thrive online. Zynga has been loudly proclaiming their interest in the sector since before their disastrous IPO–perhaps because they realize they are far better at optimizing pure compulsion loops than building fun-based games.

Crowdfunding Explodes

By the end of 2012 famous game developers and studios successfully used Kickstarter to fund large independent projects. Sparked by Double Fine’s wildly popular campaign, the frenzy hit its peak with Chris Roberts’ $6.2 million haul for Star Citizen. Some of this may be due to a crowdfunding bubble that may burst when high profile games show up late, or not at all.

The real story here is that investors have largely abandoned the game sector as ZNGA’s IPO left a blast crater that scattered the herd…as previously predicted by this blog. For many, crowdfunding is the only remaining source of financing. What are you going to do–go back to a publisher?

2013?

Next year will be fascinating as we watch Sony and/or Microsoft (and perhaps others) defend against disruption with the introduction of new consoles. Disruption is a force of nature. Fighting it is like fighting earthquakes.

Also, production values on mobile will continue to rise and tablets will continue their breakout as a unique platform…as previously predicted by this blog.

Oh and while we’re at it…

* Best Album: good kid, m.A.A.d. city / Kendrick Lamar
* Best Game: Dragon’s Dogma / Capcom

Posted in blather, business and tagged , , , ,
12 Nov 2012

Panic Consulting Nightmares

In many cases I’m contacted about consulting services when a project is in trouble. Although this panic results in higher contracting rates, this is naturally a red flag. It doesn’t take long to discover why there is such a panic–Nobody listens to anything. In most of these cases I can merely watch a distressed project go down in flames one billable hour at a time.

There are a number of common reasons why consultants are hired:

Immediate Knowledge

Some wonder why consultants charge a premium over the equivalent hourly rate of a salaried employee. The obvious reason is the consultant’s expenses such as equipment, health insurance, and taxes not provided by the client. However, clients are also paying for the accumulated knowledge of the consultant.

You probably have staff just as talented as the consultant. Still, it may take them 3-6 months to get up to speed on a given technology or topic. You need this expertise NOW. This is why consulting is usually short-term. A consultant gives a company a burst of knowledge that they can use inside their organization to get to the next level.

Yes Man

Are you a high level employee of a company whose decisions are overruled by upper management? I’ve seen this rectified by directors hiring consultants who support their position. When the exact same idea is stated by a highly paid external consultant, all of a sudden it’s delivered with authority. Perhaps you’ll get your point across when it comes out of someone else’s mouth.

CYA

Let’s say you are about to embark on a risky pivot for your company. The way fabled sociopaths of the Gervais Principle make sure no potential failure sullies their reputation is through the art of blame shifting. A common way to do this is to hire an external consultant to support this new endeavour. When it fails, you can blame him. Why not? He’s not even there by the time the thing explodes. It’s much easier than the traditional route of blaming employees.

As a consultant you are usually brought in with the impression that it’s under the Immediate Knowledge scenario. Often you’ll find you’re actually in one of the other two alternatives. I was recently explaining the business of consulting to someone when she said, “Oh, it sounds like being a psychiatrist!” To which I responded, “Yeah except most of the patients commit suicide.”

Posted in blather, business and tagged , , | Leave a Comment
23 Oct 2012
2 Comments

The Best and Worst Gaming Startup Cities

San Francisco and the Bay Area seems to be the first thing people think of when the word “start-up” is uttered. However, there are successful startups everywhere. In the case of games, it seems a few cities have all the attention for good reason.

THE BEST

Seattle is the secret headquarters of the video game industry. It’s a place where console dinosaurs roam the earth casting a shadow over scrappy little start-up mammals scurrying beneath their feet. Giants of the previous generation are making bold new moves in secret. Not to mention Valve–a company who has consistently been able to capture and monetize disruption–has created some of the greatest games of all time and makes enough dough from Steam to invest in off the wall projects that will usher in another era of money hats for Gabe and his cohorts. Low taxes and living costs in addition to the developer culture of the area make the Pacific Northwest somewhat ideal.

USED TO BE THE BEST

The San Francisco games revolution may be over, but that just means imploding social giants are creating an exodus of talent that will form the next disruptive startups. That is, if they rein in the MBAs from designing games. Real estate prices and intense hiring competition make it tough to staff up a startup, but SF is one of the few places where investors inherently get the f2p gaming business model. Raising money and selling out in this town is still easier than anywhere else on the planet. Although, with Zynga stock well under $3, investment activity in games has started to shrink.

THE WORST

Los Angeles was the capital of the video game industry during the console heyday. When I first moved here in 1997, the boom was just beginning. The result of 15+ years of multi-million sellers has generated a culture of game developers accustomed to AAA cubicle veal pens despite the all-too-common “crunch & dump” cycle of big budget game development and rarely fulfilled dreams of profit-sharing. The entrepreneurial spirit seems vacant in most Los Angeles game developers, despite the raging success of Riot and Benchmark Capital’s winning string of investments. When one of the top Los Angeles start-ups is a shoe rental company, you know there’s a lot of wasted synapses out here.

If there’s anything Indie Game: The Movie showed, it’s that the next big success can come from anywhere. Still, there’s no substitute for face to face communication amongst a core team. This requires a city where like-minded developers can meet and collaborate. Where you choose to set up shop may have profound consequences for your game.

Posted in blather, business and tagged , , ,
03 Oct 2012

Kakao is the new Asian mobile gaming powerhouse

Kakao has leveraged their insanely popular mobile group messaging app, Kakao Talk, to launch a social gaming network called Game Center in Korea. This is similar to Tencent’s strategy of using their Chinese instant messaging network, QQ, to drive traffic to f2p PC games. Yet in the West, Apple’s iMessage seems to have killed off most group messaging startups, and the only one to pursue a gaming strategy released a tower defense game based on Shannon Tweed. No, really.

Kakao has successfully commissioned established game developers to produce high quality games for Game Center. The slickly produced Match-3 game, Anipang, recently rose to the top of the Korean App Store due to its use of Kakao Talk as a viral messaging channel. (It’s also available for Android) Encouraging users to message friends in order to get extra plays, Anipang uses social news update notifications similar to the early days of Facebook games to drive reach. Korean friends of mine have deleted the app from their iPhones to avoid the onslaught of game messages–reminiscent of the bad old days of “Lost Sheep” Farmville spam. Regardless, Kakao has mined a passionate and highly monetizable social network of gamers from Kakao Talk.

With over 55 million users, Kakao may eclipse the size of DeNA’s Mobage platform. It remains to be seen what their plans for the US are. Although Game Center will probably have to be renamed before it launches in the West. I hear Apple can be quite litigious when it comes to their intellectual property.

Come to my session next week at Austin GDC

By the way…On Wednesday, October 10th at 5:35 PM at Austin GDC come see my talk on cross-platform Unity3D mobile games development. Hey, it’s only 25 minutes long. How bad can it be?

Posted in Android, business, iOS, mobile and tagged , , , | Leave a Comment
11 Sep 2012
2 Comments

In Search of…Rage of Bahamut Players

I recently listened to the excellent Walled Garden Weekly podcast about the massively successful collectible card game, Rage of Bahamut. The brave hosts played the game for a while in an attempt to analyze why it has dominated the top grossing charts on both iOS and Android for so long. In the end, they had no idea why.

I thought this episode was hilarious because I recently had the same experience with a friend of mine. We forced ourselves to play this game to understand why it is so successful. We came away from the experience just as mystified as Walled Garden. Is it a masterpiece of mobile gaming? Are we just too old and can’t comprehend this new genre of greatness? Perhaps it’s a combination of the two.

Rage of Bahamut is a collectible card game with no apparent skill involved. The interface appears to be a series of sloppily constructed UIWebViews displaying what looks like a web page from 1996–complete with blinking text. There’s no sound. The gameplay consists of tapping the screen and watching coins fly out of monsters with Skinnerian glee. PvP card battles are automatic and involve no strategy beyond deck construction. You win or you lose.

It’s also very difficult to find out how to spend money in the game–with the IAPs buried deep in the interface. This thing has towered over the top grossing charts for months on end, yet I’ve never met another person that’s ever played it. When Angry Birds was in a similar position a few years back, I knew lots of people who were fans.

I attended the Collectible Card Game panel at Casual Connect this past July to understand the space more. The takeaway was that since Pokemon will never appear on mobile devices, there is a huge vacuum taken up by the absence of that IP. In its void, a ton of CCGs have appeared on mobile targeting the Pokemon player demographic. It was suggested CCGs have 8-10X the monetization of other social games and are the ultimate core game experience for younger gamers. Maybe I don’t know any Rage of Bahamut players because I’m not 14?

Still, where are these people? I never see any coverage of this game on the web other than articles talking about how much money it’s making. It seems that the reason why you might not see a lot of chatter about these games on social networks is because the users are too young to be on Facebook. Instead, they use YouTube to display their lavish card collections. Most of the other social interactions are contained inside the game or DeNA’s social network, Mobage.

Rage of Bahamut appears to be a pure compulsion loop. It’s more like a slot machine than an actual game. The main drive is to collect rare cards and “evolve” them to advanced levels featuring character portraits with increasingly fewer articles of clothing on. Packs of cards in Rage of Bahamut can cost over twice as much as real paper cards for Magic the Gathering or other physical card games. This game is very simliar to Mafia Wars, so perhaps its success shouldn’t be unexpected. However, could something else be afoot?

Noting strange patterns in customer review score distribution and other clues, the Walled Garden podcast seemed to suggest maybe some chart manipulation is involved. I can’t say that thought hadn’t crossed my mind. DeNA made $609 million in revenue last quarter. The top grossing game in the App Store usually brings in about $10-15 million a month. Let’s double that to include Android (which probably is generous). Is it conceivable that in addition to the usual tactic of spending $50,000 a day or more in user acquisition, that DeNA is spending $20+ million a month on buying its own virtual goods to dominate the top grossing charts? With $1.82 billion in sales last year, it doesn’t seem like DeNA would need to do this.

Considering there are tons of other CCGs that are very popular, there’s a large and lucrative market for these games. There are different sub-genres as well. Some require skill similar to Magic or Yu-Gi-Oh instead of being a mere slot machine. I’ve read plenty of enthusiastic Rage of Bahamut reviews from people who are genuinely excited about it. Just watch this video–this guy really gets amped when he’s about to evolve his card to a new level of disrobement. Real people who play this game must exist somewhere. Leave a comment–let me know why you play it.

Oh, and while I’m at it, my referral code is mhk64683 if you want to start playing.

Posted in business, mobile and tagged , , , , , ,
04 Sep 2012
5 Comments

Startup Doping

Startups have a lot in common with professional sports: competition is fierce, intense focus is a requirement, and sometimes one can get ahead with performance enhancing drugs. Just ask Lance Armstrong.

A lot of space is spent on this blog observing the habits of cokeheads. This time I’m not talking about what fuels the Eyes Wide Shut toga parties of Silicon Valley dealmakers. The utility of the white horse amongst the investor class is well documented.

This is about the drugs developers are on. After all, cocaine isn’t really useful for those trying to get work done. Marty Scorsese learned that in the ’80s. Instead, a lot of startup entrepreneurs are using drugs such as Adderall or Provigil to stay focused and productive for long stretches.

Although Provigil was developed for sleep disorders including narcolepsy and sleep apnea, I’ve heard of people who have used it for “clarity of thought” instead. Some are doing Provigil to get more “in the zone” for long stretches of programming. In fact, the most popular off-label use for Provigil is to eliminate the need for sleep.

It certainly sounds intriguing to have 12 unbroken hours of clear concentration. However, does this really give you any kind of advantage when you need to work on your product for months before launch? So you had a good day of zen-like focus. Congratulations, the next sprint has a full product backlog. In fact, many issues blocking you or your startup from success have little to do with how many hours you work.

I know people who have been prescribed Provigil for ADHD and report it’s a life-changer. For some, Provigil is far more effective than other drugs and has very few side effects. It definitely has a legitimate use.

Another favorite drug of startup culture is Adderall. Naturally, a drug whose off-label use is for focus and concentration when studying would find its way into start-ups to fuel coding marathon sessions. Observing as a third-party, Adderall seems to increase focus–but that doesn’t mean you will focus on the right thing. You might spend 10 hours counting every fiber in your carpet instead of re-writing your PHP back-end to node.js. If you have problems seeing the forest from the trees, being hopped up on amphetamines will make it hard to see the leaves from the branches.

Adderall messes with the brain’s reward centers to achieve its effects. What makes Provigil work is a mystery. What are the long-term effects of using these drugs? Provigil in particular hasn’t been around long enough to know. Sure, you might fix a few showstopper bugs and shave a week off of your release schedule. You’ll feel pretty stupid when we discover years from now that you dissolved your liver in the process.

Posted in blather, business and tagged , , ,
15 Aug 2012
1 Comment

Video Game Companion Apps

The so-called “companion app” is becoming a common marketing tool for console game publishers. The idea being that you extend the game’s brand to mobile to create awareness of your upcoming console release, or to further build upon the IP. Perhaps the earliest example is Microsoft’s Fable III Kingmaker location-based game for iOS. You could play Kingmaker without the console game, or transfer currency earned in the app to Fable III on the XBOX 360. Last year we had the Deus Ex QR Missions scavenger hunt game. More recent ones include EAs Mass Effect 3 Datapad, Capcom’s Pawns Unleashed / Compendium of Wisdom for Dragon’s Dogma, Starhawk Uplink, Battlefield 3′s Battlelog, and the Soul Harvest location-based game released as part of Darksiders II’s marketing effort.

The idea for a console game companion app is inspired by the fact that most of the target audience has a tablet or smartphone. The obvious question is, instead of putting a companion app on mobile why not put the actual game there? The answer is usually irrelevant, as dinopubs are preventing the game from being on a platform where the audience actually is. Strategies such as this can at least partially explain the AAA publisher slide.

MMOs have a long history of companion apps. Perhaps the earliest example is the iPhone app made for Champions in 2009–although now they are commonplace. Companion apps make a lot of sense for MMOs since the world is alive when you are not playing. An app is a perfect way to perform housekeeping duties on your character or check in on what’s going on while you are away from your desktop machine.

Since most console games aren’t persistent, there’s no reason to run an app to keep up to date on what’s going on. Nothing is happening while your console is turned off. In their current form, console companion apps make more sense as a marketing tool. Put out the app well ahead of the game’s street date and allow the user to unlock content and advance his character before the game comes out. It can be useful as an advertisement and a place to build a community around your game.

Microsoft’s SmartGlass initiative at E3 is evidence that they are serious about this “second screen” experience. Their XBOX Live iOS app is actually quite good, and shows they are putting some effort into this. A smart approach for next generation consoles is to have companion apps part of a core strategy. As for the promotion of individual games–I haven’t seen any companion apps chart very well on the App Store. Nor have any publishers reported companion apps having any positive impact on sales. The killer companion app has yet to be made.

Posted in business, mobile

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