Archive for the ‘Game Industry’ Category

How did I do with my 2009 predictions?

Year end prediction posts are tons of fun.  Let’s see how I did with last year’s post.

  1. Correct. Champions and Free Realms both launched. Those were both smaller than the big launches of 2008 (Age of Conan and Warhammer), and I expect they will end up being smaller than next year’s Star Trek Online launch.
  2. Wrong. The console version of Champions Online never came out. I hear it’s because of difficulties working out revenue sharing and certification details with Microsoft, not because of any technical challenge. We’ll see if it actually comes out in 2010.
  3. Wrong. Has there been a single large MMO announced in 2009?  Carbine, Trion, Red 5, 38 Studios, and Zenimax certainly haven’t announced anything.
  4. Wrong. Nope. Nobody bought Turbine. Atari did buy Cryptic, which is almost the same thing.  Maybe I should be more vague in the future.
  5. Correct?  Upper Deck University launched, but hasn’t had much traction. Are there other kid’s MMOs that launched in 2009?  Wizard 101 from King’s Isle launched at the end of 2008 and had an excellent year in 2009. What does that mean for my prediction? No idea.
  6. Correct, sort of. Both Microsoft and Sony decided to launch gestural control devices instead of whole new consoles. They are trying to get some more mileage out of their investment in the current generation. Project Natal has had a lot of buzz, but no dev kits have shipped as far as I know. The PS3 motion controller has been a little more under the radar.  Both of these devices are expected to ship in 2010.
  7. Hard to say. Maybe we’ve hit bottom, maybe we haven’t.  Ask me in two years.
  8. Wrong. Oh so astoundingly wrong.  Between Layar and Junaio’s launches, tons of marketing campaigns, and lots of concept and research videos, AR has had a year full of hype. Those see-through displays I was so excited about in January didn’t happen, but on the smartphone/magic lens front there has been quit a bit happening.
  9. Hard to say. Did Microsoft start an MMO in 2009?  They didn’t announce anything.  Wonder if they’ll announce it before they cancel it.
  10. Wrong. At least I haven’t heard of one.  Lots of indy games made lots of noise in 2009, but none of those were XNA games.
  11. Correct?  iLike’s firesale to Myspace is one. going away is arguably another, though Metaplace lives on as a company, at least for a while. Geocities counts too, I guess.  The trouble is the “have heard of” qualifier. Most web startups are completely unknown outside of Silicon Valley
  12. Wrong. There has been no SOE reorganization fallout visible from the outside. The Agency lost the head of its studio, but the game seems to live on.  DC universe is going fairly well from what I hear.
  13. Correct.  Mythic merged a bunch of servers.  Then they laid off a bunch of people. Then EA kicked out Mark Jacobs. Then EA laid off more people.  It has been a tough year over there. I hope everyone lands on their feet.

So for the year, that’s five correct predictions, six incorrect predictions, and two unmeasurable predictions.  Not such a good year to see the future.

The biggest thing I missed is the way mobile is heating up.  The App Store is a couple years old at this point, but it really exploded in 2009.

What about you?  Did 2009 turn out like you expected?

50 things I never need to hear at another conference

  1. Korea is the future. They are five years ahead of us and where Korea goes, the rest of the world will follow.  (I have been hearing this for at least five years. )
  2. Free to play with micro transactions is the one true business model.
  3. Client downloads are death.
  4. We must look beyond the core gamer audience and embrace more casual players.
  5. Women are 50% of the audience.
  6. Don’t trust the client, it is in the hands of the enemy.
  7. You game is a service.
  8. MMOs are hard. No, they’re really really hard. Seriously. You can’t possibly imagine how hard they are.
  9. Runescape is the second biggest MMO and is the one you should really watch.
  10. Club Penguin is huge and is the one you should really watch.
  11. Lineage is huge in Asia and is the one you should really watch. (These days it’s actually more likely to be ZT Online or some other game in China.)
  12. Flash is the best platform to build your MMO on.
  13. Web games are cheesy and no core gamer will ever play them.
  14. Rudy’s has the best BBQ in Austin.  No, County Line is better.  Are you kidding me?  It’s obviously The Salt Lick.
  15. The game industry is bigger than Hollywood.
  16. Triple-A MMOs are a dead end. WoW is impossible to compete with.
  17. Game X is going to take the top spot from WoW.
  18. Games cost so much to make now that the industry is about to collapse under its own weight.
  19. MMOs are just like MUDs and you should all learn the lessons MUDs learned X years ago.  (To be fair, I don’t think I’ve actually heard this one in a few years.)
  20. All of these things happened in UO. Why won’t you people learn from UO?
  21. The community around your game is incredibly important and you should take care of them.
  22. Your players have no idea what they want. Don’t believe anything they say.
  23. Forums are very important.
  24. Don’t believe anything you read on forums.
  25. Launch is just the beginning. The real work comes after launch.
  26. Metrics, metrics, metrics.  Record everything!
  27. Don’t record too much with your metrics. Too much data is just as useless as too little data.
  28. Some people spend CRAZY amounts of money via micro-transactions
  29. MMOs on consoles are the Next Big Thing.
  30. Casual games are going to save the PC market
  31. MMOs are going to save the PC market
  32. My background in economics tells me…
  33. WoW is a wonderful thing for the industry because of the way they expanded the market.
  34. WoW has set expectations so high that you can’t make an MMO for less than X million dollars. (Where X>=30)
  35. Person X is a jerk. Let me tell you this funny story about…
  36. Company Y is so clueless that they will never put out a successful game
  37. Fantasy is where it’s at! MMOs just don’t work as well in other genres.
  38. Fantasy has been done. Players want us to move on to other genres.
  39. There’s so much money to be made in Asia! Just make sure you internationalize your game first.
  40. Gamers in Asia demand click to move so they can smoke while they play.
  41. Players are going to trade stuff for real money no matter what you do. You might as well embrace it.
  42. RMT causes huge amounts of fraud.
  43. Gold spam is impossible to stop.
  44. Our startup is the next big thing in MMOs.  Just look at this giant pile of money we raised!
  45. Game development is all about iteration. Waterfall doesn’t work.
  46. There’s this guy named Richard Bartle who proposed dividing players into four types…
  47. You can’t use scripting languages in games. They’re way too slow.
  48. Writing all your code in C++ is stupid.
  49. Launch early, launch often.
  50. You only get to launch once.
This year it was obvious to me that I’ve hit the Austin GDC level cap. Fortunately that means I have moved on to the conference elder game and learn far more interesting things speaking and engaging in deep hallway conversations.
What about you?  What things are you sick of hearing in conference presentations?

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GameStop vs. Digital Download and The Innovator’s Dilemma

It stuck me recently that GameStop might be falling victim to The Innovator’s Dilemma. This book, published in 1997, a model of why a company that is at the top of its industry can fail to maintain their dominant position in the face of disruptive innovation. If you haven’t read the book, I highly recommend it. This summary does a good job of explaining the premise of the book, so if you haven’t read it, go read the summary and come back. The rest of this post attempts to apply the model outlined in the book to the situation GameStop (and other niche game retailers) face with respect to digital download.

The argument that digital distribution is a disruptive technology is an easy one to make. It disintermediates retailers, distributors, and manufacturers, by letting publishers and developers by through a single layer of middlemen (in the form of Steam, Impulse, or Direct2Drive) or even directly to their customers. Digital distribution also removes the sharp shelf-space restrictions that keep a game’s shelf-life artifically low and allow game sales to enjoy a long tail. Numbers are hard to find, but digital distribution has also been accelerating in the past few years. 

Part of the Innovator’s Dilemma model predicts that established players will be able to enjoy significant revenue growth by retreating from low-margin and low-volume markets as those fall to the invading technology. GameStop’s last two quarters are the best they have ever been. However, one part of GameStop’s business has been in serious decline over the past several years, and that is PC games. That is partly due to an overall decline in PC games in general, but it is also to the fact that PC games can’t be repurchased and sold as used like heavily DRMed console games can. This resale of games accounted for 23% of the company’s revenue last year, and that number is increasing. According to the Wall Street Journal, used game sales account for 42% of GameStop’s gross profits.

I suspect that the other major reason for GameStop’s withdrawal from PC games is that digital downloads have made their strongest inroads on the PC. Steam is selling tons of AAA games, and casual and indie games are sold primarily online at this point. The company is not mounting much of a defense in the market where its competition is strongest. They will likely lose the console market the same way, since I would be shocked if the next generation of consoles (Xbox 720, Playstation 4, and Nintendo Puu) didn’t include large hard drives and the ability to download full sized titles as easily as on a PC.

GameStop is making the choices they are because that is what is demanded of them by their customers and investors.  As a multi-billion dollar public company the tiny digital sales available five years ago would have just been a distraction from meeting their growth goals. That allowed Valve and others to get experience and partnerships that give them a huge head start in the the digital distribution space. Just in the past 18 months Steam has picked up titles from EA, THQ, and Sony Online Entertainment. These major publishers join Activision and Take-Two that joined the service a few years ago. In fact, GameStop was reportedly so upset at how much THQ was favoring Steam that they temporarily refused to offer pre-orders of Dawn of War II. (Or at least that was the rumor.) All the while, the biggest complaint that most of GameStop’s customers have is that it doesn’t give them enough for a used game. By and large their customers are quite happy with the company.

Broadband penetration in the US has increased from 4.4% to 50% in the past 9 years. At this point the extensive selection available for download is primed to combine with the relatively new viability of large downloads and drive GameStop completely out of the PC game business. I believe the same thing is likely to happen for console games within the first two years of the next generation of consoles. Within ten years the dedicated video game store will have gone the way of the travel agent, cable driven earthmover, and walled garden internet service provider. 

Or at least that’s now it seems to me as a retail outsider and recent convert of The Innovator’s Dilemma. What do you think?

The first “real” MMO

This morning I read a post by Dusty Monk where he described the forces that were working to push the Halo MMO toward “WoW in Space”:

For me personally, this was probably one of the most conflicting parts of working on Titan.  Don’t get me wrong — I’d wanted to work on an MMO for as long as long as I’ve been in games, and this was the dream game of a lifetime.  But while there were a few of us that had played MMO’s before WoW, by far and large, as the team grew, most of the people on the team had never played a single MMO before WoW.  This led to a dilemma that the entire team struggled with throughout the lifetime of the project.  And it’s a dilemma I think every team out there that’s designing an MMO today has to struggle with,  and the actual point of this post, which I’m only just now actually getting around to:

 How much do you copy the genre leader?

Dusty’s actual question is a good one, but that isn’t what really caught my eye.  You see, while we were building Pirates of the Burning Sea we had a similar dynamic to our team.  World of Warcraft came out two years after we started, so nobody had played it. Instead we had one designer who figured that the MMO genre started with EverQuest where most of the rest of us pegged that event at some earlier game. This guy refused to acknowledge Ultima Online as a “real” MMO despite its hundreds of thousands of subscribers and massive success. He thought even less of the games that came before it: The Realm, Meridian 59, and the thousands of MUDs.

For my part, I saw Ultima Online as a logical next step from the MUDs I played in college in the early 90s. I was pretty far gone into a couple of TinyMUCKs back then.  (I just checked and I do, in fact, still have my wiz bit on PegasusMuck.) When called on to date the start of the MMO I usually give two answers: UO was the first commercial success. MUDs (starting with MUD1, I guess) were the origin of the design genre. To me the distinction is important because of all the ways that MUDs break when your playerbase is counted in the tens of thousands instead of hundreds. UO was really the first game to deal with that kind of scale in the design, so it was the first “real” MMO.

It shouldn’t surprise me that there are people working on MMOs today that consider World of Warcraft the first real example of this kind of game.  It has thirty or fourty times the number of subscribers that EverQuest had at its peak. That increase changed the dynamics of the game just as much as the previous 30-40x jump made EverQuest and Ultima Online different from the games that preceeded them.  My only fear is that this will drive more companies into direct competition with WoW (and the $40 million plus games that are intended to compete with it) instead of toward building a nice tidy business aimed at a niche of 100,000 to 300,000 players who are craving something different.

What is your answer when you are trying to come up with the first real MMO?