My Week with the PlayStation 4

The next generation has arrived with Sony’s triumphant release of the PlayStation 4. The reviews have all been written–there’s no need to post a huge essay about it. However, it is time for my obligatory quick hardware review.

It’s a nice looking box. The PS4 continues Sony’s legacy of sleek industrial design with a surprisingly tiny and strangely slanted device. It’s small, light, and silent (well, mostly).

The DualShock 4 is the GREATEST CONTROLLER OF ALL TIME! I thought the DualShock 3 was perfect, but Sony has done the impossible and topped it with the DS4–it’s light and fits my hands perfectly. Also, the PS4 can charge the controller while switched off–something the PS3 never managed to do. Now if they can only find a way to turn off the annoying huge LED light while watching Netflix.

The redesigned PS4 dashboard is simple and concise. You’ll learn to appreciate this when you try the XBOX One (review incoming!) It’s easy to navigate–and most importantly, it’s very simple to find, purchase, and play GAMES!

Share Button!

The Share button is genius. With the rise of eSports and Twitch.tv, The PS4 has its finger on the pulse of hardcore gaming with the ability to instantly stream live game video or post screenshots to social networks. I kind of can’t stand watching other people play video games–but I’m sure this will be popular with the vast majority of hardcore gamers that aren’t me. Although–uh, other, uses of the PS4 camera on Twitch may become even more popular.

What about the games? Killzone is gorgeous and has the best campaign of the series–which isn’t saying much. I mention Killzone because there aren’t many interesting PS4 exclusives at the moment. There’s heavy focus on “indie” and downloadable games which are an increasingly important part of the console ecosystem. The harsh development climate over the past few years has left few studios standing that can successfully ship a $75+ million game on a disc.

It’s nice, but rather mundane technology. The PS4 has the hardware edge over the XBOX One–but if you parse the stats, it seems not much more powerful than a mid-range PC. The previous generation shipped with GPUs a little ahead of cutting edge desktop computers, but were also much more expensive. Sony and Microsoft can’t afford to take a big loss on hardware this generation.

I really dig the PS4. Sony’s focus on “indie” and self-published games as well controlling costs is the best move they could have made given the circumstances. With two prominent free2play FPSes launching with the system, it’s clear Sony has adapted to the current market. They made sweeping changes to their business model and hardware strategy that may have successfully fended off disruption from mobile and tablets. The true effects of disruption may be felt later in the cycle when casual consumers fail to show up in the same numbers as before. Regardless, I’m relieved to have another platform to publish games on–as mobile is getting truly apocalyptic.

Game Developers: Don’t Compete, Disrupt.

In the old boxed retail model of games, publishers often waited for an “off year” to capture a hit title’s audience. For instance, a publisher would release a competing open world game the year after a Grand Theft Auto installment to monetize GTA fans who are looking for a similar experience. This successful strategy spawned many hit original properties despite its “fast follow” basis.

Today’s hit games such as League of Legends are constantly updated services and thus never have an “off year.” As discussed in a previous post, we’re in a winner-take-all game economy. Top games consume all of the time and money of their players.

It’s exceedingly expensive to go toe-to-toe with a leading game-as-a-service. Not only do you have to compete with the top game’s deluge of content and social network, but you must overcome the switching cost users bear to move to a new game. A player could have thousands of dollars invested in his League of Legends character. Now you want him to start all over on your new, unproven MOBA?

Competition is possible, but only with deep pockets. The only company posing a distant threat to League of Legends is Valve with DOTA2. Not only have they made an excellent game, but are lavishing massive development and marketing budgets to compete with the frontrunner.

What can you do if you’re not among the most financially successful developers in the world? Don’t compete, disrupt.

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As described in my bible, Clayton Christensen’s Innovator’s Dilemma, disruptive innovation typically arrives in a form that’s lower quality than the established player, but cheaper or more convenient to use for a low-end customer.

This low end customer is not as profitable, and thus not very interesting to big companies. The disruptive product’s quality improves steadily. By the time the threat is noticed by the incumbent, it’s too late. The disruptive competitor is attracting the old guard’s high-end customers.

A modern example might be what the tablet did to the netbook and is now apparently doing to notebooks.

How does one develop a game disruptive to the established players? Is it even possible to do so? After all, there are flaws when you apply the low-end disruption theory to consumer products. Let’s look at few vectors of disruption and how they may work in games.

Cost

World of Warcraft’s plunging subscriber numbers may be showing that Blizzard has fallen victim to Innovator’s Dilemma in the form of free2play competition.

F2p originally meant lower quality, lower commitment, and (supposedly) cheaper-to-play MMOs. Now, all major releases from Western companies inevitably become f2p. The quality bar has risen to where it’s possible to match or surpass the incumbent combined with a dramatically different business model.

Convenience

How about making a game more convenient to access? One way developers are trying is by bringing established PC f2p genres to mobile. The idea is that by making a MOBA simple to play on a tablet, it’s possible to capture a segment of the desktop customer. This ignores the fact that tablet-owning hardcore LoL players are still looking for an experience uniquely crafted for mobile–Not simply a long-session MOBA plopped into an iPad.

The problem when applying business model advice to the games industry is that most are based around solving a problem. The only problem games (and entertainment in general) may solve is boredom. When you aren’t solving a problem or “pain point”, you are selling based on other emotional qualities such a branding or user experience.

Lessons can be applied–but perhaps not literally. Which is fine. Slavishly following any business model or development methodology ends up in the creation of a process cult.

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.

Quick Notes: E3 2013 Edition

WAR!

E3 2013 is over! This was the most exciting E3 in years. GAMES ARE BACK! Sony and Microsoft are putting up a vigorous defense against the cow clickers and hamster wheels that have taken over gaming in the mobile and social era. It was so refreshing to see such a variety of new IPs that are actual games–games based on fun, mechanics, and experience instead of pure compulsion. I’m psyched for the PlayStation 4 and XBOX One. I pre-ordered both during their respective press conferences. A few notes:

Microsoft needs to fire their entire marketing department. Everyone was talking about Microsoft’s DRM strategy and not the games. Microsoft has completely lost control of the narrative and it’s hurting their ability to promote the XBOX One as an actual games platform.

Microsoft’s strategy of promoting the XBOX One as some kind of media center hub is the wrong one this early in the cycle. They need to engage early adopters for a console launch–people such as myself. All we want to hear about are games. Sony smartly focused on games–even if most of them were multi-platform.

The new Sony is poised for victory. Roles seem to have switched this generation, with Microsoft’s XBOX 360 success creating an attitude of arrogance that has led them to a tone-deaf press conference and hostility to so-called “indie” developers. This is the same attitude Sony had when the PS3 launched that caused a huge decline in market share.

Sony has learned from their mistakes and have radically changed their publishing model. They have embraced indie developers and flexible business models as evidenced by two prominent f2p PS4 titles on the show floor. I talked to many talented developers who had PS4 kits but were refused by Microsoft for XBOX One developer access.

Where was mobile? Compared to last year, mobile had a much reduced presence. Many publishers showed mobile titles along with their console slate, but gone were huge booths from GREE and other Asian mobile powerhouses. It was interesting to see tablet and mobile elements blended in to console games, such as in Ubisoft’s awesome demo for The Division. As discussed here before, companion apps have a long way to go–but this was probably the best example to date.

Hardware on the fringe. Lots of niche hardware made noise at E3. Not the least of which was Oculus Rift. With the show floor abuzz with news of the HD version, it seems at least Sony may be investigating supporting it. Microconsoles such as NVidia’s Project Shield (not so micro at $349) and the Oyua made big splashes too. I’m skeptical of the long-term viability of these platforms–although TowerFall convinced me to pre-order my Ouya.

Nintendo? Where was Nintendo? Their decision to broadcast their press conference on Nintendo Direct may have been an error–but perhaps a good strategy since they really had nothing to show that could counteract the massive PS4 and XBOX One announcements. Their booth was heavily attended, but Nintendo was seemingly out of the running. Luckily, they have enough cash to hunker down and weather the storm this generation.

Favorite games at the show. I never really spend much time waiting in line to watch demos or play games at E3, but I did have a few favorites upon cursory examination. Killer is Dead is a spiritual successor to Killer 7 from Grasshopper Manufacture, and looks fantastic. Dragon’s Crown is a gorgeous 2D side scrolling RPG by Vanillaware in the same vein as Capcom’s old D&D coin-ops. Keep your eye on The Order: 1886 for the PlayStation 4. This will be one of THE exclusive PS4 titles to watch.

Anyway, this was a GREAT show. I’m really excited for the next generation consoles. GAMEPLAY IS BACK.

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.