Category Archives: Business

Getting to Know Others

Being social has always come natural to me. I enjoy meeting random people and hearing their stories — be they potential business partners, friends of friends, or my taxi driver of the moment for that matter. My parents like to tease me for striking up long conversations with the waiters at restaurants, which has, on more than one occasion, resulted in the swapping of contact information. :-)

One of the more pleasant consequences of my extroversion is a fairly robust professional network — this was true even before I joined Microsoft, and is certainly more true today. Some people have noticed this and asked me what my “secret” is. I’m always tempted to say something snarky, but rather than be unkind let me attempt to take the question seriously for a moment. I’ve never really had a “method”, but after thinking about it for a little while I came up with the following self observations that might be useful to the network-challenged among you:

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Articles of Interest

Even BioWare can stumble when it comes to community management. Takeaway: few people are better candidates for extensive training than your community managers! (Also: do not try to tell Star Wars fans what does and does not happen in their universe…). But as I knew it would, BioWare ultimately did the right thing by its community. :-)

MadWorld, the “blood soaked” action title once identified by IGN as one of the most anticipated Wii titles, which nicked an 82 metacritic score, has sold just 66,000 copies in the US. I don’t claim to know why. Perhaps the reason is that if you like this sort of game, you’re likely to be already playing one or more competing titles on your Xbox 360 or PS3 — which you prefer for action titles, perhaps, thanks to the online service and/or better graphics? Or perhaps hardcore gamers have simply stopped paying attention to the Wii? I didn’t closely follow Madworld’s release, so I don’t know if it was poorly launched, and thus, if such speculation is off-base. What do you think? Meanwhile, here come predictions that EA will dominate the Wii games market in the near future. (Note: many of EA’s upcoming titles are family-friendly and/or based on known IP, and thus not comparable to Madworld.)

Raph tells an insightful story about an Easter Egg hunt game in Metaplace: “There’s no reward in this game, there’s no winner or loser, and there’s no endgame. Yet even during testing, I had to tear myself away, and when put into Metaplace Central, average session length for the day went up 50%. But… in some sense, it’s a crummy game.”

Soren shares some of Sid Meier’s fundamental game design rules. A good read!

Alice discusses some of the work that she has been doing with Channel 4: “In sum: find talent, identify the key areas, find a fun angle, sow many seeds, and give the growing ideas as much sunlight as possible. Be useful. Make people smile, and give them something helpful to their lives. Public service gaming is fantastic.”

There’s more to life than games:

Wise words from Seth Godin: “People don’t reply when you [email] them a resume, because it costs too much to do that ten thousand times… Stamps are underrated. Friction rewards intent and creates scarcity.”

Articles of Interest

GDC always makes for a big Articles of Interest! Let’s get to it:

The subscription-based MMO market grew by 22% in Europe and North America in 2008. Revenues reached $1.4B. WoW, of course, represents the bulk of that amount.

Quite the avalanche of news around OnLive, the new digital distribution service that will supposedly make consoles (and indeed, clients in general) irrelevant. Dean Takahashi kick-started things with the most enthusiast writeup I’ve ever seen published by a professional game journalist on ANY subject. There was plenty of followup; the two best articles I’ve found are a positive take on the implications of a service like OnLive (not necessarily OnLive itself) by Soren, and an article by Richard Leadbetter that challenges the technical feasibility of OnLive on multiple fronts. Both are very worth reading. My take? OnLive is awesome — revolutionary even, if it works as well as claimed. But I’ve spoken to several gifted engineers who I trust, and none of them believe it. Conclusion: OnLive is probably cranking up the hype in hopes of leveraging it to sign key partnership deals and to raise funds that will enable the company to eventually turn the hype into reality. But who knows… maybe my sources (and Leadbetter) are wrong. I really doubt it, but maybe.

Another sign that the economy hasn’t hit the games industry too badly: over 17K people attended GDC, just shy of last year’s numbers. (Great job, Meggan!) Kim has been kind enough to identify some of the best things at GDC this year — check out his writeup.

Nintendo is proving that it is ready to take DLC & Wiiware seriously by adding SDHC support to the Wii and by making it possible to launch games directly from a SD or SDHC card — no more shuffling!

For those of you who appreciated my post on long-lead PR, Seth Godin has some related advice. “The idea of a ‘launch’ and press releases and the big unveiling is nuts. Instead, plan on the gradual build that turns into a tidal wave. Organize for it and spend money appropriately. The fact is, the curve of money spent (big hump, then it tails off) is precisely backwards to what you actually need.”

At GDC, Qualcomm announced the launch of the Zeebo console, which is intended for emerging markets such as Brazil, Russia, India, and China. Zeebo has positioned itself as a piracy-free alternative to traditional consoles because all content is downloaded via 3G wireless. Zeebo is also much cheaper than its next-gen competitors, but also appears to be pretty underpowered even in comparison to the Wii. From what I’ve seen, most forum posters from target markets like Brazil seem totally unimpressed. They’ve pointed out that a PS2 is no more expensive but is significantly more powerful (and has a better library of games that they can pirate!) They’ve also pointed out that 3G is currently unreliable, even in some major urban areas. There were other criticisms; bottom line, I’m not seeing the excitement yet.

Information about the sales of XNA Community Games is finally coming to light. There is at least one game that has sold nearly 10k units for $31k revenue (Word Soup), but most games appear to be doing far worse. The sales of certain key titles, like DBP winner CarneyVale Showtime, have not been announced yet so perhaps there is more to this story. That said, it appears that the interface and merchandising challenges facing XNA Community Games have really stunted its early growth — I’d expect to hear much more about “big winners” early in the life of an ecosystem that has benefited from so much overt promotion and community interest. That was certainly the case with XBLA and with the iPhone.

Sony is offering to match the development costs of qualifying independent PSN games in return for their exclusivity. Sony will also aid in design and marketing, and will not claim ownership of the game’s IP. An inevitable (but educated) move, given the competition from XBLA.

Facebook and MySpace social MMO YoVille has reached 7.8M monthly active users, monetized via microtransactions and banner advertisements. Two months ago I’d never even heard of YoVille

Interesting excerpt from a new book, “Team Leadership In The Game Industry.” I enjoyed the case studies.

There’s more to life than games:

Someone made a song about Paul Krugman (the Nobel Prize-winning economist and editorialist for the New York Times.) This part alone makes the whole thing worth listening to:
I mean, don’t you have some influence?
Why aren’t you secretary of the Treasury?
For God’s sake, man, you won the Nobel Prize.
Timothy Geithner uses TurboTax.

Console Game Prices

Lots of buzz today about Gabe Newell’s DICE Summit keynote. Gabe noted that price promotions on certain games on Steam have dramatically lifted sales. He emphasized that when Left 4 Dead was recently discounted by 50% (to $25), the discount increased sales by 3,000%. He added, “We sold more in revenue this last weekend than we did when we launched the product” and claimed that brick-and-mortar sales were unaffected by the Steam promotion. Gabe concluded that video games are probably too expensive, in general. (There was more to the presentation, including some comments about the evils of DRM, but I’m more interested in focusing on the pricing stuff right now.)

A couple of caveats, before I write anything further. #1: Gabe is one of the smartest people in this industry, and he has much more experience than I do. I’m not questioning his intelligence or judgment in any way, but I’m also not foolish enough to believe that his keynote statements encompass the sum total of his thoughts on this matter. More importantly, I’m not foolish enough to believe that Gabe is without agenda. He clearly wants to sell games for a lower price (for one very obvious reason related to the retail ecosystem, in particular.) This keynote presentation was an opportunity for Gabe to advance his agenda, not to share the full scope of his thoughts on pricing strategy or on Valve’s unique position in the industry.

Caveat #2: In my gut, I’ve long suspected that many console video games may in fact be over-priced (at their launch and later on in the life-cycle.) But I don’t know for sure, partially because the data that is needed to prove this assertion simply does not exist in sufficient quantity yet, at least to my knowledge. More on that… now.

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Wisdom, Deferred

Back in August 2007, I wrote the following about the XBLA 1st party (aka MS-published) title review process:

I’ve put systems in place to hopefully help reduce the risk of my own tastes (or lack of vision) from polluting the portfolio. I can’t really discuss the details, but they include a sort of “wisdom of crowds” feedback loop, in which indie submissions are screened and rated by a group of my colleagues within Microsoft (who are asked NOT to discuss the submissions with each other before rating them — mainly to avoid group-think.) The wisdom of crowds can make my forecasts more accurate, and it can help compensate for any subconscious biases I have. Unfortunately, what I don’t believe it can do is help me identify future mega-hits (i.e. “the next Geo Wars“.)

The process I referred to in that post actually kick-started in March of 2007, so it’s been about 18 months since I started changing the way that the XBLA team reviews incoming submissions from independent developers. If you had asked me way back then when I expected to be able to judge the results of the process change, I would have said “a year from now, at the latest.” Turns out, I would have been way off. A year and a half later, only six games that we have reviewed under the new process have launched on Marketplace. Many of the games greenlit in the few months following March ’07 are still in development and/or finally nearing release.

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A Scrabulous Postmortem

The word “postmortem” assumes wry overtones when preceded by Scrabulous, the once-popular Scrabble clone on Facebook. The latter, as you’re all no doubt aware, is basically dead now — snuffed out by Facebook at the requests of Hasbro and Mattel. More than a few people have written about this, but I was looking for a thorough summary of the facts/issues and couldn’t find it, so I decided to write one of my own.

Shortly before Scrabulous was terminated, it had 500k active users a day according to TechCrunch. (I’ve seen other articles citing up to 700k daily actives at one point or another, but it seems that those numbers may have been temporary spikes associated with spikes in press coverage.) Interestingly, this suggests that Scrabulous’ growth was starting to fade, as the game already had 500k daily users back in December 2007. So, while it’s probably safe to assume that Scrabulous had more room to run, it’s optimistic (at best) to believe that the game was anywhere near the bottom or middle of its S curve. But this isn’t really the point I’m hoping to make; I just thought it worth noting that some of the Scrabulous hype (“they’re on the verge of 1m daily users!”) had gone a bit over-the-top.

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Kongai

(I’ve been sitting on a bunch of posts, being too lazy and/or preoccupied to clean them up, insert hyperlinks, and publish them. I finally summoned the will to get them out this morning. Here’s the first.)

If you haven’t already done so, I recommend checking out Kongai, a digital trading card game designed by David Sirlin and publicly released on Kongregate a couple months ago. David, for those of you who don’t know him, is the guy rebalancing Street Fighter for XBLA/PSN (and a very thoughtful designer, in general.)

Kongai is a well-designed card game, but what’s remarkable about Kongai is not necessarily its gameplay, but how Kongai is positioned within the larger context of Kongregate. Kongai cards are awarded the same way LIVE Achievements are – in reward for accomplishing explicit challenges in the various games found across Kongregate. (Actually, Kongai cards are more like Pogo Badges, because Badges are awarded for time-limited challenges, unlike LIVE Achievements, which are hardcoded to a game prior to its release and which never expire.) Having played Kongai for a while now, I can personally testify to the allure of virtual awards that have concrete value in a playable metagame in addition to the “status value” of normal Achievements!

There are quite a few portals and networks claiming to offer “Achievements 2.0”, but Kongai is the first thing I have encountered that feels even remotely advanced enough to merit such a claim. Gamasutra published an article on the design of Kongai, if you’re curious to learn more.

Activision Blizzard

Ah, irony of ironies. Two days after EA CEO John Riccitiello claimed the game industry is no longer ripe for mergers, Activision and Vivendi Games announced their intent to merge into Activision Blizzard. (Wonder twin powers, activate! Form of known IP! Form of Warcraft!)

Analysts will flutter, of course. But when they hype dies off, what will this ultimately mean for the game industry?

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Lions, Tigers, Free Games… Oh My!

I’ve been compiling a list of “free game types” in preparation for my GDC Lyon lecture. When I look at the list on a single page, its breadth and depth are a bit stunning. There’s already a mountain of free game content out there, and the mountain is growing fast.

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Working Without A Crystal Ball

Note: I think this post may be interesting to anyone creating, investing in, or distributing games (regardless of whether or not they are Xbox Live Arcade games.) However, I needed to ramble through some seemingly tangential stuff to make my point. Please bear with me. :-)

XBLA portfolio management is a complex thing… I’m one part cat-herder, one part traffic cop, one part talent scout, and one part “quality control.” (The latter part is especially tricky… who wants to be the guy who turned down Katamari because “the art was weak”, or one of the eight publishers who turned down Harry Potter because “the writing could use polish.”) I approach these roles with a healthy dose of humility (and even anxiety), knowing that at any moment I could become “the moron who turned down [fill in the blank].” Unfortunately, the longer I hold this position, the more likely that becomes!

Trying not to be a moron

So I’ve put systems in place to hopefully help reduce the risk of my own tastes (or lack of vision) from polluting the portfolio. I can’t really discuss the details, but they include a sort of “wisdom of crowds” feedback loop, in which indie submissions are screened and rated by a group of my colleagues within Microsoft (who are asked NOT to discuss the submissions with each other before rating them — mainly to avoid group-think.) The wisdom of crowds can make my forecasts more accurate, and it can help compensate for any subconscious biases I have. Unfortunately, what I don’t believe it can do is help me identify future mega-hits (i.e. “the next Geo Wars“.)

Continue reading