Category Archives: Industry Issues

The Magic of F2P

No-More-Pirates.jpg

This article was originally published in Game Developer Magazine. It was the fifth in a series of business columns that I am writing for GDM.

The first successful f2p games — aka “games whose primary revenue source were in-game purchases” — hit the market over a decade ago. Now they’re everywhere. They account for 8 of the top 10 grossing games on iOS as I write this. Rumor has it that all the major consoles will support f2p games in the next generation. Even our industry’s most prominent, respected developers (i.e. Popcap, Valve, etc) have begun to embrace the model.

And yet there are still many game developers in the West who have mixed feelings about f2p, worrying that it is “evil” or that it perverts gameplay. But f2p is just a tool, and like any other powerful tool it can be used to create beautiful things or it can be used to create ugly things.

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Lessons from Hollywood

For such a juicy situation, the online debate about Infinity Ward has been pretty dull. A summary, for those who haven’t been following along: 99.99% of people believe that Activision committed a grievous error and is clueless about the value of talent — the other 0.01% of people work for Activision. Either the wisdom of the crowds has revealed itself, or anyone who sympathizes with Activision has been unwilling to speak up for fear of being mocked.

It won’t surprise regular readers of this blog that I’m on the “pro talent” side of the debate. Making great games on a strict schedule is exceedingly hard, and anyone who can reliably manage a team to that end is probably worth their weight in gold. That said, there’s an interesting question to be asked here: if we take for granted that Jason & Vince were worth their weight in gold, is it possible that they were simply demanding “too much” compensation in their ongoing negotiations with Activision (i.e. all the gold, and more on top — leaving too little for Activision’s shareholders?) Or was Activision simply greedy and unappreciative?

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The Death of Lead Gen?

It’s been a while since any given news story caused five different people to spontaneously email me. The latest story to do so is the Techcrunch exposé of scam artists who are working through the popular lead generation services (such as Offerpal) that are used by most major social gaming companies.

The story has already inspired quite a few responses, such as these thoughtful articles by Andrew Chen and Justin Smith, and this entirely predictable response by Mark Pincus, the CEO of Zynga.

My quick two cents: have the lead generation services (and therefore the social gaming companies, and therefore Facebook itself) benefited from the behavior of scam artists? Yes, absolutely. Should the lead generation services immediately do something to address the problem (and if not them, then the social gaming companies or Facebook itself?) Yes, absolutely. Does Facebook “deserve to be sued”, as one of my good friends suggested to me? No, it does not. Does this whole thing prove that social games are a house of cards? I highly doubt it.

Facebook is a popular open ecosystem, and like any other popular open ecosystem, it will be exploited from time to time by unethical people. There is always the argument that Facebook “could be doing more” to police the ecosystem (and in fact, it had already announced a plan to do precisely that as part of larger changes to the platform) but at the end of the day you simply cannot compare Facebook to the Playstation, to Wal-mart, or to any other closed ecosystem. Facebook has an essentially unlimited number of “content partners,” and while it should keep a close eye on the biggest of those partners, it is inevitable that some shadiness will eventually slip past the Facebook Police.

Sony and Wal-mart, on the other hand, have the advantage (and the great burden!) of controlling everything that enters their virtual and/or physical shelves… and they have much smaller shelves. So while I hope that Facebook will indeed do a better job of catching scams in the future, I don’t blame it, and in fact I hope it chooses to emphasize crowdsourcing techniques (i.e. better enabling users to flag and stifle abusive 3rd parties) as much as expanded police squads.

The social gaming companies turned a blind eye to their part in this problem, and now they are catching flack as they deserve. But this will blow over, and lead generation will likely continue to represent a significant percentage of their ongoing revenue. Why? Because at the end of the day, there are legitimate advertisers, content providers, and 3rd party networks with a vested interest in the success of this model. These aren’t all late-night, 1-800-type con-men; these are advertisers like Netflix, FTD, and GAP and product/service providers like Apple, The Wall Street Journal, and The New York Times. The only “house of cards” here is the house that Tattoo Media built.

The Future of the IGDA

By now, most of you have read about the serious flare-up ignited by Mike Capps at the IGDA Leadership Forum. (For those that haven’t — Mike is CEO of Epic and formerly a board member of the IGDA, and he made some comments which sounded like he was endorsing crunch time and, some would argue, putting down people who reject crunch time.) This has already been covered extensively by the press and debated by prominent IGDA members, so I’m not going to discuss it in depth. I’ll simply say that it’s fair to accuse Mike of being careless with his words, especially given his position in the industry and in the IGDA, but it’s also probably not fair to brand Mike a “management dickhead” or to equate Epic with EA during the “EA Spouse controversy” days. Epic is not EA, and Mike is not someone who views employees as expendable resources. (Epic’s employees don’t seem to feel horribly unappreciated, either; according to Mike, Epic’s voluntary turnover rate averaged around 1.1% from 2006 to 2008. For reference, average tech industry turnover rates, pre-recession, were approximately 20%. Anything below 5% was considered shockingly good for a company with more than 50 employees.)

So anyway, I’m going to sidestep the question of whether or not the IGDA should be taking a hard stand on quality of life issues (which, to be clear, are a big deal to me — I’ve never appreciated our industry’s dismissive attitude towards work-life balance.) That is, frankly, a much less important question than this: what exactly is the IGDA supposed to stand for, and who does it represent?

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The Definition of Lasting Appeal

I’m not as passionate as some people are about video game reviews (and how flawed they may or may not be.) I think there’s clearly room for improvement in the way the average review is conducted, but I also think that the answer to the problem will come in the form of review sites that cater to specific audiences; i.e. the 30+ crowd, or the socially-conservative crowd, etc. That said, I would like to express the opinion that all review sites, in general, should be careful how they incorporate “lasting appeal” into their scoring system.

The inspiration for this post comes from the IGN review of Braid. I’m absolutely not complaining about it — the review was positive and enthusiastic, and the reviewer did exactly what they were supposed to do within the particular constraints of the IGN review system. But IGN’s final score is one of the lowest given to Braid, apparently because Braid lacks “lasting appeal” — one of IGN’s five primary review criteria. IGN appears to define “lasting appeal” as a combination of sufficient game length and replayability. So how about it… does Braid really lack “lasting appeal?”

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Gameplay Patents

I just finished reading Ernest Adams’ latest Gamasutra article, “Damn All Gameplay Patents!” It’s a well-intentioned piece that argues passionately against gameplay (as opposed to technology) patents, and contends that developers should not pursue them under any circumstances. I genuinely appreciate the sentiment that drove Ernest to write this article and agree with much of it, but I feel that some nuance is in order. Consider the following:

Patents are Somewhat Like Nuclear Weapons

In many ways, gameplay patents are like nuclear weapons. They’re expensive to develop, and they engender feelings of fear and mistrust. Put plainly, most of us would prefer to live in a world without them.

Unfortunately, like nuclear weapons, many gameplay patents already exist and are in the hands of many different owners. No matter how passionately we write, those owners will not simultaneously and universally revoke their patents tomorrow. Which means that some companies have nuclear weapons (I mean, patents)… and some don’t.

And just like in the real world, asking the countries without nuclear weapons to avoid developing them rarely works — even with economic perks or threats as incentive. More often than not, the countries that couldn’t afford to develop nukes anyway, or that don’t feel threatened, play along, while those that can/do proceed with development. Witness India, Pakistan, and North Korea.

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Games and Violence

As I mentioned several months back, my friend Ethan Mollick and I are writing a book tentatively titled For Fun and Profit: How Games are Transforming the Business World. As our publisher’s deadline approaches, I’d like to occasionally bounce early draft excerpts off of you all in hopes of getting useful feedback. And, to be honest, I find it difficult to maintain this blog and write my book simultaneously, so I’m cheating a little bit. :-)

My first draft excerpt has nothing to do with business, per se. It tackles the thorny issue of games and violence. Ethan and I feel that we cannot ignore this issue if we want our book to be taken seriously by a broad range of readers. But we also don’t want to get mired in the issue — after all, there are so many other things we need to cover! So we’ve tried to be brief, clear, and to the point. Tell me: did we succeed in getting the point across?

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Celebrity

A hot topic among game designers today is: should designers aspire to celebrity (of the kind possessed by famous movie directors and producers) and if so, how? Raph Koster frequently talks about this, and I believe his rationale is fairly solid. But Raph, who does a good job of reaching out to the community (via his book, press interviews, conferences, and blog), is still completely unknown to the vast majority of human beings who regularly play video games (much less humanity in general.) For that matter, even our most beloved industry icons (like Miyamoto) are basically unknown outside the enthusiast market.

Since I singled out Raph, I should note that he doesn’t always talk about individual celebrity. His use of the term seems to extend to corporate brands (i.e. what Rockstar aspires to in every regard, from their name to their products.) But it’s hard to turn a corporate brand into anything even remotely resembling a mega-celebrity brand (i.e. Steven Spielberg). Across all entertainment industries, there are few examples to aspire to.

So if a celebrity-level corporate brand is generally out of reach, and some of our most outspoken and engaged/engaging game designers are still unknown outside hardcore circles, what can be done to harness the celebrity power that designers and companies crave?

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Potential Liabilities Faced by MMOG Developers

Terra Nova just posted an article about a recent change in Second Life that has effectively devalued the property of many SL denizens. The article quotes a lawyer who cites established legal precedent to explain why Linden Lab (developer of SL) may be at legal risk in this (and related) matters. The basic argument: LL gave users good reason to think that some virtual land plots are worth more than others, so LL can be held liable for actions that devalue the land, no matter how many waivers users agree to when playing SL.

This is just one of the many unresolved legal issues popping up for MMOGs, and especially MMORPGs. I couldn’t find a good, succinct list online, so I’ve compiled one:

  1. What happens when one player steals another player’s property?
  2. What happens when players generate content that infringes upon the copyrights or trademarks of real-world companies? (Here’s an example other than City of Heroes). For that matter, what happens when one player copies another player’s work? Can they sue each other, and/or the developer?
  3. What happens when players (especially underage players) engage in “legally indecent” acts? Can EA (developer of Sims Online) be sued for letting a ten-year old operate a virtual brothel? Can it be sued by players who suffer real financial damages at the hands of a virtual mafia?
  4. Can developers be sued for impeding free market forces that generate real monetary value for players? (An especially interesting question, given that those forces are the key to many other potential liabilities on this list).
  5. What forms of gambling are permissable in an MMOG? Is it really legal for me to play slots in Second Life, given that SL currency has real world value?
  6. Do players have a right to free speech and expression? Can game EULAs contain (and developers enforce) a morals clause, like those in some employment contracts?
  7. At what point (if any) does a developer become liable for failing to prevent players from harrassing other players? What constitutes sexual harrassment?
  8. If virtual property has tangible value, how badly does a player need to violate a game’s EULA before a developer may evict them… without compensation for their virtual property?
  9. Can players use legal means to prevent the deactivation of an MMOG, or to force developers to open source a game prior to deactivation? (i.e. to protect the value of their property?)

I wonder how long it will be before the first in-game court system pops up in an MMOG….

PS. If I’ve missed any notable legal demons, don’t hesitate to comment.

Game Developers’ Bill of Rights

Eric Zimmerman has published a “Game Developers’ Bill of Rights” on Gamasutra.com. The bill is based on the Creator’s Bill of Rights, which was written for comic developers in 1988.

It begins with article #1: “The right to full ownership of what we fully create.” The other rights derive from this one, including final say over creative, distribution, licensing, and marketing matters. In other words, ultimate control.

Zimmerman quotes Greg Costikyan, who once argued that developers should retain the rights to their games “because they fucking should.” Points for succinctness, but not much else. In any industry, when you take money from an investor to fund an embryonic venture, the investor usually ends up owning the venture. There are two ways around this:

  1. Fund the venture on your own to start, then negotiate for more control based on your initial, demonstrable success.
  2. Become respected enough that you can negotiate for control rights from the very beginning of the venture process.

As an entrepreneur and small business owner, I wish things weren’t this way, but they are. Why not focus on practical solutions to developers’ problems? Working towards greater solidarity would be a good start. Support of digital distribution initiatives would be another.

Ultimately, a developer is free to negotiate their own deal — or to walk away from an “unacceptable” offer. A publisher that does business with an inexperienced developer is taking a big risk… which explains (however unsatisfyingly) their ownership demands. Do I think publishers abuse their control? In many cases, yes. Are they wrong to negotiate for ownership in the first place? Probably not.