Why I’m All In On Mobile VR

Last month I released Caldera Defense, a Virtual Reality tower defense game on Gear VR. This is the second Gear VR title I’ve worked on, and the first I’ve built and published from the ground up. (Not including my Oculus Mobile VR Jam submission) Caldera Defense is a free early access demo–basically a proof of concept of the full game–and the reaction has been great. Thousands of people have downloaded, rated, and given us valuable feedback. We’re busy incorporating it into the first update.

Caldera Defense featured on the Gear VR store

Originally I planned to use this as a demo to fund an expanded PC and Morpheus launch version of the game with greatly improved graphics, hours of gameplay, and additional features such as multiplayer and second-screen options.

However, pitching even a modestly budgeted console and PC VR game experience to publishers, or even the platforms themselves, is a tough sell. I’m sure at E3 next month we will see all sorts of AAA VR announcements. Yet, many traditional funding avenues for games remain skeptical of the opportunity VR presents.

Since the Caldera project began last year, mobile VR has morphed into a unique opportunity. With over a million Google Cardboards in the wild and new versions of the Gear VR headset in retail stores worldwide, there will be millions of mobile VR users before there’s comparable numbers on Oculus desktop, Vive, and Morpheus.

Is it possible that mobile VR will be a viable business before it is on PC and consoles? Most of my colleagues are skeptical. I’m not.

The economics work out. Due to the mobile nature of the experience, games and apps for these platforms tend towards the bite-sized. This greatly reduces the risk of mobile VR since assets optimized for mobile are simpler and casual VR experiences require less content to be built overall.

I can make a dozen mobile VR minimum viable products for the same budget of one modestly scoped Morpheus experience. From these MVPs I can determine what types of content gains the most traction with VR users and move in that direction. I can even use this data to guide development of larger AAA VR experiences later.

By this time next year it will be possible to monetize these users significantly, whether through premium content or advertising. It may be more valuable to collect a lot of eyeballs in mobile VR than breaking even on a multi-million dollar AAA launch tile. As we’ve seen in the past, acquiring a huge audience of mobile players can lead to tremendous revenue streams.

Being on the Oculus desktop, Vive, or Sony’s Morpheus deck at launch is an enormous opportunity. In fact, I’m still searching for ways to produce the console and desktop version of Caldera Defense. However, if you lack the capital to produce at that scale, smaller mobile projects are much easier to bootstrap and the upside is huge.

Adult Contemporary Video Games

One of my favorite Combat Jack podcasts of 2014 is when they interviewed legendary hip hop producer, Marley Marl over the Summer.  Marly Marl invented the modern hip-hop sound most take for granted and created the Juice Crew, one of the most important groups of MCs ever.

The Juice Crew

Before producing hit records, Marley had a career as an on-air DJ, starting on Mr. Magic‘s show on KISS-FM in New York.  In the ’90s he went on to host “Future Flavas” with Pete Rock on Hot 97.  Marley Marl was also still producing hit albums for the likes of LL Cool J and Lords of the Underground.

Times change, and Marley Marl isn’t producing music for 20 year olds anymore.  While many DJs desperately hang on to their fading youth, Marley tried another tactic.  He moved over to WBLS which plays old school hip hop for a mature audience.

it just so happens, rap fans in their fourties and beyond have far more disposable income than those in their teens and twenties.  His WBLS show has gone on to be a great success.  It turns out that despite being a youth-powered movement, there’s plenty of advertising dollars in hip-hop appealing to older rap fans.

This got me thinking about video games.

A lot of veteran developers are debating about the decline of AAA games in the face of the disruptive waves of free2play and mobile.  Many gamers in their demographic agree.  If that’s the case, why not appeal to this older audience?

The challenge to monetizing these gamers is that although they have the same taste in games they may have had over a decade ago, their play styles are vastly different due to lifestyle changes.  If you’ve got kids or a demanding job, perhaps you no longer have 120+ hours to spend playing an RPG. However, you might digest the same style of game in shorter episodic bursts on a tablet or smartphone.

Some developers have caught on to this and produce what I call Adult Contemporary Video Games.  A good example is the 1980s pencil and paper RPG, Shadowrun.  Microsoft’s attempt at AAA shooter based on Shadowrun was an abject failure (although I quite liked it).  Five years later, Harebrained Schemes went from a surge of support on Kickstarter for “Shadowrun Returns” to a series of popular mobile and PC downloadable games based on the franchise.

Shadowrun for iPad

This is a smart strategy–delivering content aimed at an older audience on newer devices.  Those of us who grew up not on just the original RPG, but the SNES and Genesis games were ripe for a new entry in the series.  This model has also seen success with Wasteland 2, and surely the upcoming Bard’s Tale sequel will continue the trend.

It remains to be seen if you can develop a new IP targeted at this audience.  A lot of what you hear on Adult Contemporary radio is old artists making new music.  In games it may be the same. So far, the genre seems to bank on nostalgia by resurrecting classic franchises for an older audience on new devices with updated play styles. Especially if you include teh current wave of retro remakes. While some veteran developers excel at creating games for the new mobile f2p masses, others may be more suited for this viable slice of the market.

A Weekend at Oculus Connect

I spent this past weekend at Oculus Connect and have just now had the time to process what I saw. For Oculus to go from a humble Kickstarter project a few years ago to a capacity filled conference rife with amazing demos and prototypes by countless developers is mind-boggling. I know I said VR in 2014 is like Mobile in 2002, but the pace of progress is staggering. The maturation path for VR is going to be MUCH quicker. Is it 2005 already?

...and all I got was this lousy t-shirt.

…and all I got was this lousy t-shirt.

As I stated before, Gear VR is the most important wearable platform in the universe. I’ve been developing Gear VR games for a while and am thoroughly convinced this wireless, lightweight platform will have far more reach than VR tethered to your desktop.

The GearVR demo area.

The GearVR demo area.

The apps on display were great, but I even saw a few Gear VR demos from random developers in the hotel hallways that blew away what were officially shown in Samsung’s display area. Developer interest for Gear VR is very high. Once it’s commercially available, a flood of content is soon upon us.

Despite the intense interest in the platform, I spoke to a few desktop and console developers who dismissed Gear VR as a distraction and are ignoring it–which I think is really short-sighted.

It’s true that there may be a division in audiences. Gear VR may be the larger, casual audience while apps built around Oculus’ astounding Crescent Bay platform could be for a highly monetizable market of core enthusiasts. Either route is smart business. Depending on how long you can hold out for customer traction, that is.

Oh, and Crescent Bay…was a revolution. There’s probably not much more to be said about it that hasn’t already–but the ridiculous momentum behind Oculus’ path from the DK1 to Crescent Bay makes me question the competition. Oculus has hired all of the smartest people I know and have billions of dollars to spend on VR R&D–which is their main business, not a side project. Will competitors like Sony really commit enough resources to compete with the relentless pace of Oculus’ progress?

VR in 2014 = Mobile Games in 2002?

The first VRLA Meetup last week was awesome.  The performance capture studio at Digital Domain in Marina Del Rey hosted a series of impressive demos as well as live presentations on the current state and future of VR applications.  The venue could only hold 100 people, but 300 registered.  Mobs of interested VR consumers, developers, and producers had to be turned away at the door.

VRLA winding down. (Photo via John Root)

VRLA winding down. (Photo via John Root)

After this event, it struck me that VR in 2014 is reminiscent of mobile in the early 2000s.  Back in 2002 I attended the first GDC Mobile Gaming Summit.  It was at a jam-packed lecture hall in San Jose where presenters demoed the latest in technology and gave their thoughts on where the industry was heading.

At that point, mobile phone hardware was clunky and primitive.  Most phones were still sporting 80×50 monochrome screens with maybe 100k of RAM available for programs to run.  Even if you were ‘lucky’ enough to have one of these devices, it was nearly impossible to figure out how to download games.

In 2002 almost nobody knew how to monetize mobile games.  The hardware could barely run games anyway.  Yet, these people knew it was going to be a big deal.  The room was filled with excitement and anything could happen.

Since then, mobile gaming has created a huge new audience for games that has disrupted the traditional game industry, forcing a shift in how console games are designed and delivered.  Now mobile gaming is obvious, but back in 2002 there were many naysayers–despite the fact that in Japan iMode had been successfully delivering mobile games since the late ‘90s.

To me, VR in its current state feels the same way.  The hardware is huge and clumsy.  There is some precedent for VR applications stretching way back to the 1990s with Virtuality and Battletech Centers.  And there’s a lot of consumer interest–evidenced by all the successful VR and AR hardware kickstarters in addition to the attendance of VRLA this month.

The top question on everyone’s mind is “how do I make money in VR?”  This was the same question asked by many about mobile in 2002.  Back then, the path was more obvious.  Qualcomm’s BREW and Japan’s iMode already had established billing models for mobile content.  Right now, it’s unknown who will pay for VR experiences and what form they will take. A lot of this is a hardware question. Nobody really knows what the iPhone of wearable gaming will be like–but when it arrives, it will be revolutionary.

These definitely are uncertain and exciting times for this new medium–which makes it much more fun to develop for than established platforms.

Towerfall: The Re-Return of Social Gaming

Social gaming was hot.  Then it ‘died’.  And now it’s hot?  The fact is, video games have always been social.  In the earliest era of computer games there weren’t enough CPU cycles (or CPUs at all!) for AI.  Players had to move everything themselves–Steve Russell’s Spacewar being the earliest example.  But just look classic coin-ops like Pong, Warlords, Sprint, etc.  Same-screen multiplayer was just how things were done.  Arcades in the ‘80s weren’t solely the domain of nerds–a broad spectrum of people showed up and played games together.  Imagine that!

Towerfall

Local multiplayer ruled well into the ‘90s.  Games like GoldenEye, Mario Party, and Bomberman ensured there was always something to do when you had people over your place.  Yet, once Internet multiplayer hit in the early ‘00s, console games became strangely anti-social.  Today when someone comes over my house and wants to play a game with me–well, it’s complicated.  There really aren’t many games people can play together on the market.

That’s why Towerfall Ascension is so interesting to me.  At first I thought it was yet another pixel-art indie game over promoted by Ouya due to a lack of content.  After playing it with others its significance dawned on me.  Finally there’s something to play with other people!  It had been so long since I’d had a local multiplayer experience that it took actually playing it for me to recognize this one fact:  the local multiplayer brawler may very well be where the MOBA was when DOTA was merely a Warcraft III mod.

At GDC I noticed the beginning of this trend.  There were a few Towerfall clones already in progress or on the market.  In fact, some similar games even shortly preceded Towerfall.  Not to mention Towerfall’s release on the PS4 and Steam has been highly successful.  I really think a new (old) genre is born.

 

Unity3D vs. Unreal 4 vs. Crytek: GDC 2014 Engine Wars

GDC 2014 is over, and one thing is clear:  The engine wars are ON!

Morpheus

For at least a few years, Unity has clearly dominated the game engine field.  Starting with browser and mobile games, then gobbling up the entire ecosystem Innovator’s Dilemma style, Unity has become the engine of choice for startups, mobile game companies, and downloadable console titles.

Until now, Unreal seemed unphased.  The creation of an entire generation of studios based on Unity technology seemed to completely pass Epic by as Unreal continued to be licensed out for high fees and revenue share by AAA studios cranking out $50 million blockbusters.

Lately, the AAA market has been contracting–leaving only a handful of high-budget tent pole games in development every year.  Many of those mega studios have started to use their own internal engine tech, avoiding Epic’s licensing fees altogether.  Surely this trend was a big wakeup call.

This year Epic strikes back with a new business model aimed at the small mammals scurrying underfoot the AAA dinosaurs.  Offering Unreal 4 on desktop and mobile platforms for a mere $19 a month and a 5% revenue cut seems like a breakthrough, but it really isn’t.

One of Unity’s biggest obstacles for new teams is its $1500 per-seat platform fee.  When you need to buy 20 licenses of Unity for 3 platforms, things get costly.  Unity’s monthly plan can help lower initial costs, but over time this can be far more expensive than just paying for the license up front.  Even when you add up all the monthly costs for each platform license subscription, it’s still a better deal than Unreal.

Giving up 5% of your revenue to Epic when profit margins are razor-thin is a non starter for me.  Unreal’s AAA feature set creates unparalleled results, even with Unity 5’s upgrades, but it’s that 5% revenue cut that still makes it an unattractive choice to me.

Epic is also aping Unity’s Asset Store with their Unreal Marketplace.  This is absolutely critical.  The Asset Store is Unity’s trojan horse–allowing developers to add to the engine’s functionality as well as provide pre-made graphics and other items invaluable for rapid prototyping or full production.  While Unreal’s Marketplace is starting out rather empty, this is a big move for the survival of the engine.

Unreal 4 throws a lot of tried and true Unreal technologies out the window, starting with UnrealScript.  The reason why Unreal comes with the source is that you have to write your game code in native C++, not a scripting language.  The new Blueprints feature is intended to somewhat replace UnrealScript for designers, but this is completely new territory.  Unreal advertises full source as a benefit over Unity, but source-level access for Unity is almost always unnecessary.  Although, it is possible now that Unreal 4 source is on Github that the community can patch bugs in the engine before Epic does.  Unity developers have to wait until Unity performs updates themselves.

Unreal 4 is so radically different from previous versions, that a lot of Unreal developers may have very good reasons for escaping to Unity or other competing engines.  For some, learning Unreal 4’s new features may not be any easier than switching to a new engine altogether.

Oh, and Crytek is basically giving their stuff away.  At $10 a month and no revenue share, I’m not sure why they are charging for this at all.  That can’t possibly cover even the marketing costs.  I’m not very familiar with Crytek, but my biggest issue with the current offering is Crytek for mobile is a completely different engine.  The mobile engine Crytek built their iOS games with is not yet publicly available to developers.

Which brings me to the latest version of Unity.  I’m sure it’s getting harder to come up with new stuff that justifies a point release.  Still, I need almost none of the features announced in Unity 5.  This is irrelevant as Unity has won the war for developers.  Which is why Unity is moving on to the next problem:  making money for developers.

Unity Cloud is Unity’s new service that is starting as a referral network for Unity games.  Developers can trade traffic between games within a huge network of Unity apps on both Android and iOS.  Unity’s purchase of Applifier shows they are dead serious about solving monetization and discovery–two of the biggest problems in mobile right now.

While other engines are still focused on surpassing Unity’s features or business model, Unity have moved into an entirely different space.  Ad networks and app traffic services may start to worry if what happened to Epic and Crytek is about to happen to them.

Anyone who reads this blog knows I’m a huge Unity fanboy.  But having one insanely dominant engine is not healthy for anyone.  I’m glad to see the other engine providers finally make a move.  I still don’t think any of them have quite got it right yet.

Oh–and in other news, YoYo Game’s GameMaker announcement at GDC, as well as some more recent examples of its capabilities make me wonder why I even bothered to get a computer science degree in the first place!

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.