Monthly Archives: October 2007

Licensing IP, the Web 2.0 Way

First: my apologies for using the phrase “web 2.0” in the title of this article. I couldn’t resist.

Anyway, here’s a random idea I’ve been tumbling. Could major IP holders (like Marvel Comics, Fox, etc) work with user generated content services (like Kongregate, XNA Creators Club, etc) to make their IP available to hobbyists and small businesses under explicit terms, in controlled conditions, for a non-negotiable revenue share? If managed correctly, how much profit and “brand excitement” could this generate, and would that outweigh any “sales cannibalization” and/or “brand damage” caused by the community?

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Articles of Interest

Man, wait a couple weeks to write an AoI and the notables really pile up:

CNN explores Second Life’s “real potential” as an experimentation platform (rather than an entertainment experience). Emphasis on ease of use and cost-savings.

As you must already know, EA bought BioWare/Pandemic for $620M (cash) plus $190M in other charges. I think Bioware is (next to Blizzard) possibly the best developer on the planet, thanks in very large part to Drs Ray and Greg — but for that kind of cash, Bioware Austin better be cooking the next WoW.

Sony has announced EyeCreate, a video capturing and editing application for the PS3. IMO, consumers will respond quite well to non-game applications that make good use of console videocams (if the apps are good, of course).

Eye-catching… Activision is launching a cross-platform Guitar Hero community portal on 10/26. Play on a 360, compare your progress with a friend using a PS3 or Wii. The portal offers its own achievement system, “groupies.” The more you play the game, the more groupies you get (but stop playing for too long and you lose groupies — a logical motivator, but one likely to repel less hardcore customers.) There are also tour groups (clans) with private forums, pooled groupies, etc, and tools for creating tournaments. Lastly, there’s a Hall of Fame (inductees will have their own private message board, prizes, etc.) All in all, sounds like a fabulous experience for hardcore fans, and a notable third-party cross-platform milestone.

Hewlett-Packard will include the WildTangent platform with the HP Games Console, included on all new HP consumer desktop and notebook PCs worldwide.

Giant Interactive, a Chinese developer of online games (ZT Online), hopes to raise $735M through a NYSE IPO. Maybe the EA/Bioware deal wasn’t so big after all. *grin*

A year ago, fantasy baseball leagues were sued by Major League Baseball, which claimed that only MLB had the rights to the statistics from MLB games. MLB lost the original suit, and just lost their appeal as well. Makes sense to me — how can anyone “own” historical facts? Anyway, as fantasy gaming continues to grow beyond sports (to celebrities, politics, etc) this ruling will prove important.

A research study has revealed that more and diverse achievements lead to better reviews and stronger sales. Furthermore, games that reward points for online elements generate 50% more sales than those without. (I’d like to see the study, as 50% sounds quite high — but not unbelievable, depending on the definition of “online elements” and “points.”)

Games as Platforms Wrap-up

Kim has already responded to my most recent post with a concise wrap-up. To avoid belaboring things, I’ll do the same.

This still seems to me like a case of “take no chances” vs. “take full advantage of the opportunities.” Kim argues that the FS team is already capitalizing on most of my ideas, but that’s not actually the case. For example, he notes that the FS team already helps third parties advertise, but my whole point was that FS can offer both free venues (as they do now) and premium venues — deriving more revenue in the process. Isn’t that a good thing?

At the end of the day, this is a bit like a liberal and ultra-liberal arguing about politics. We’re both platform fanatics. More to the point, we’re suckers for a vigorous debate. …But you’re still wrong, Kim. 😉

Stay tuned till next time, when we’ll tackle the even thornier subject of peanut butter: “creamy or chunky?” It’ll be a battle royale!

Games as Platforms

Yesterday, I wrote that Microsoft should be doing more to tap the aftermarket for goods and services related to Flight Simulator. Kim, my friend and coworker here, took notice and essentially argued that I was wrong because: A) the 3rd party after-market is good for sales of Flight Simulator, and B) Microsoft could never think of and/or develop most of the aftermarket things that have arisen.

Permit me a bit of grumpiness. I hardly need reminding that 3rd party extensions, especially of the user-generated type, can be very good for business, nor that 3rd parties will think of & do things that Microsoft could not. My point was this: platform monetization strategies (be it for games, websites, or anything else) don’t need to begin and end with “releasing an SDK” or “building a community.” Yes, you can greatly increase the penetration of your platform (in this case, sales of a game) by encouraging 3rd party / hobbyist support of it. And sometimes, you can earn even more by remaining active in the aftermarket. You just need to be smart about it.

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Develop Interview

I was recently interviewed by Develop about XBLA. Part 1 here. Part 2 here. Registered users can download the PDF version here.

Articles of Interest

Penny Arcade highlights SquawkBox, a free plug-in for Microsoft Flight Simulator, which connects virtual pilots with virtual air traffic controllers. Basically a free MMO for aviation addicts, run entirely by volunteers. (Random thought: Flight Simulator may possibly be the least well-monetized of all Microsoft entertainment properties, in that it sells to a cult following that goes on to spend hundreds of hours and hundreds of dollars on after-market products not created by or associated with Microsoft. While commercial and volunteer after-market support is absolutely a good thing, there’s no law that says you can’t play a part in it! The entertainment industry has so much to learn about tapping niche markets…)

Microsoft announced that Bungie is becoming an independent company, but will continue its Microsoft publishing agreement for Halo and other properties. An unusual situation; I’m very curious to see how it works out.

And speaking of Bungie, Halo 3 has dropped to fourth place on the GameFly charts for the Xbox 360 after three weeks at #1. Some have interpreted this as bad news, but I think this is actually a remarkable signal of great franchise health. That is, I’m speculating that the vast majority of 360 owners consider Halo 3 a “must own” and therefore aren’t bothering to rent, even if renting is an option.

Yankee Group issued a report on extremely low Second Life usage, then withdrew the report as questions about its validity arose. As regular readers know, I’m somewhat skeptical about the current incarnation of SL, but it’s only fair to help highlight the report’s withdrawal, since so many popular sites reported on its “findings.” In general, I’ve been pretty unimpressed with Yankee Group coverage of the game industry.

MIT has announced the second annual Futures of Entertainment Conference. This year’s speaker lineup is fabulous: it includes Jesse Alexander (Heroes), Danny Bilson (The Rocketeer), Marc Davis (Yahoo!), Mark Deuze (Indiana U), Raph Koster (Areae), and Tina Wells (Buzz Marketing Group). Check it out!