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.

How long does it take to make an XBLA game, and why?

When I first joined the XBLA team, the conventional wisdom was that most games would take six to nine months to go from greenlight to launch. Today, it’s clear that the range is much wider — anywhere from four months for simpler ports (developed by experienced studios) to well over two years for an original game like Castle Crashers. The average development time has obviously risen, though average dev team size does not appear to have risen so much.

I’d attribute some of the rise in development times to the increased size limit for XBLA games, but the much more significant factors seem to be:

1. There are now many more studios that view XBLA as a venue via which they can make a name for themselves, promote original IP, and generate a non-trivial return on their investment, as opposed to in the early days when participation in XBLA seemed more opportunistic. Many of the studios that we’re working with now are highly motivated to create a standout game.
2. There is now much more competition, in many forms. When XBLA first launched, LIVE users had relatively few options competing for their cash — on Marketplace or in retail, for that matter. But today, Marketplace is swimming with games, DLC, and demos, and retail is overflowing with compelling new and used games. The bar has risen tremendously, and XBLA developers have had no choice but to rise with it — which means putting more time and energy into their games. This seems like the most significant factor, to me.
3. Developers are becoming more and more ambitious in their use of LIVE (both in terms of multiplayer modes, and in terms of stuff like creative use of leaderboards, content sharing, etc.) As any experienced developer will tell you, online features — especially LIVE multiplayer — tend to greatly increase the complexity of a development project. One of my colleagues believes that adding robust LIVE multiplayer mode(s) to a game can increase the development schedule by 50% to 100%.
4. The certification process has often proven to be more of a challenge than many independent developers expected, despite the significant assistance our production and test teams offer in preparing for and managing that process. Developers who have gone through certification once have much less trouble the second time around, but we’re still working with plenty of developers who are new to console game development.

What have those six games taught me?

I don’t like to draw conclusions from six of anything — I don’t consider that a statistically significant pool of information. However, it seems that I was right when I said a “wisdom of crowds” process would not be useful in predicting mega-hits. One of the six games I referred to earlier was Braid. The average participant in my review process predicted that Braid would not be one of the top 50% of games on XBLA, by sales. Only two people predicted that it would be in the top 25% of games!

What I really want to know is if the process helped me avoid red-lighting games that were likely to perform reasonably well (not necessarily become mega-hits) — in other words, if it helped me overcome my own personal blind spots and biases. I’ll need to wait a bit longer to find out, but that’s OK. There’s one thing this job teaches you, above and beyond all else. Can you guess what?

Patience.  ;-)

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?

The sign up process

Here’s how I think it could work. IP Holder, Inc partners with UGC Service, Inc to make its IP (and related art & sound assets, perhaps) available to members of UGC Service. To participate, members of UGC Service must explicitly sign up for the program, which is only available to individuals and small businesses (the definition of “small business” being up to IP Holder.) The sign up process gathers a large volume of data about the signee and requires the signee to explicitly agree to a variety of terms that are defined by IP Holder (such as “this IP cannot be used to promote a political cause, in a pornographic context…” etc. And of course, the revenue share that IP Holder expects.) If IP Holder really wants to be hardcore, credit card information can be required to validate the signee’s identity (and charge her a signup fee, if desired.)

Revenue sharing

As part of the terms of participation, the IP and related assets can only be used within the context of UGC Service, Inc. Why? Because UGC Service controls the ways in which content within its service is monetized (i.e. via advertising delivered by UGC Service and partner companies, or via direct sales or subscriptions driven by UGC Service’s transaction engine.) This ensures that IP Holder will get its share of revenue; in fact, the entire process is automated, such that IP Holder and user never even communicate. If you’ve ever used Google AdSense, you’ll understand how easy this can be — the transaction system simply debits IP Holder’s share before making payouts to the user.

But does this truly guarantee that all revenues will be accounted for? Probably not. Some enterprising user will almost certainly find a way to make money outside the context of the fixed ecosystem. But that probably doesn’t matter unless the user is making a ton of money, in which case, IP Holder will likely notice and can go after them — much as they would anyone else outside the context of this program. If the earnings are small or non-existent, who cares? Is it really going to lead to lower sales of the next AAA game (or movie) based on that IP?

Abuse of the IP

Same with other issues. Sure, someone is going to violate the terms and put IP Holder’s IP in a forbidden context. But that’s probably already happening outside the boundaries of this program. It’s probably less likely to happen within the context of this program because users will have explicitly agreed to terms (which has a psychological impact on behavior, even if a minor one.) More importantly, users will have provided all their personal information and credit card number, which might make them think twice about disregarding the terms of usage.

“Devaluation” of the IP

If anything, IP Holder will most likely fear more subtle “abuse” of its IP. For example, what if users extend the IP fiction in ways IP Holder is not comfortable? What if they simply create a lot of crap that “devalues” the IP? These are the same arguments employed against fan fiction and other forms of fan participation in general. And while I think it’s clear that the vast majority of consumers are capable of distinguishing between UGC and professional created media (and do not let the former impede their enjoyment of the latter), I certainly concede that most IP holders won’t feel that way. Nevertheless, it will probably take just one or two companies successfully participating in a program like this before many others jump in. The first one or two companies would probably be “lesser” IP holders — i.e. owners of IP that once had great value, but has become less popular over the years. Or owners of “niche” IP.

Resistance from existing partners

The other major issue will be resistance from existing licensors. If Publisher X is paying $10M a year for the rights to an IP, will they be OK with a program like this? Probably not. It would require time, negotiation, and resolve in order to convince Publisher X that user-created content probably isn’t going to dent the sales of its $10M retail title. In fact, it could even help it (by raising excitement about the IP within the ecosystem, overall.)

So what do you think? What pitfalls am I missing? What opportunities have I failed to mention?

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!

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.

Tapping the aftermarket

Co-opting innovation. When professional 3rd party developers build aftermarket products for a platform, copying (and therefore supplanting) them is generally problematic. As Kim noted to me privately, it sends a strong signal to the world that developing for your platform is not a safe business endeavor. I agree wholeheartedly with this. However, when enthusiasts build free aftermarket products and services for your platform, co-opting those innovations can (in certain situations) be an entirely positive move if done correctly.

In many cases, enthusiasts are simply seeking ways to have fun and/or satisfy their own personal needs (which are being unfulfilled by your business.) They are implicitly pointing out an opportunity and suggesting how to seize it. Sometimes, the best way to take advantage of this is to build a professional version of their work into v2 of your platform, or into a separately-sold expansion. Recognizing the contribution of the creator is very important — you can accomplish this via some sort of relatively small but still meaningful monetary award, placement in the credits, and/or by actually hiring the creator(s) themselves.

Of course, this isn’t always practical. For example, many enthusiast innovations will ultimately have limited commercial potential. But some will be diamonds in the rough, just waiting for polish. There’s a broad theory of “user innovation” that covers all this. If you’re not familiar with it, I recommend checking out this material. (Also this material.)

Help them advertise. Profit-seeking aftermarket suppliers need to advertise, just like everyone else. You can leave them to 3rd party channels (magazines, search engines, etc) or you can create venues for them within your platform (and/or related properties). And of course, charge a fee for doing so. These venues would piggyback or exist in addition to any systems you create to freely promote 3rd party / enthusiast content (i.e. ads that appear above a user-ranked list of content.)

Help them pay the bills. You’ve created a platform, and they’re creating content for it. I’ve asked how you will profit from that content (aside from the after-effects of additional game sales) but I haven’t asked how they will profit from it. You can leave this up to the commercially-oriented third parties (in which case, the smaller guys will probably default to solutions like Paypal; the bigger guys to their usual mechanisms.) Or you can offer third parties a means to sell their content through your platform (again, for a fee.) On the face of it, this sounds like something more appropriate for Amazon.com than a video game, but is that really the case? Much like a game engine that gets reused from project to project, what’s stopping big publishers from creating a 3rd party transaction system that sits alongside their (applicable) games and helps enterprising third parties monetize aftermarket content without turning to Paypal? (Or co-opts Paypal, for that matter?)

Rude and crude

I’m intentionally being somewhat vague because I honestly don’t see much difference, in some ways, between a game as a platform and Ebay as a platform. The only difference is that Ebay is “just” a market, while a game is both a product and a market for other products.

The difference between my position and Kim’s is actually quite subtle. Kim is (in my opinion) simply too conservative — he’s afraid to fully capitalize on aftermarkets because, done clumsily, it could cause a 3rd party rebellion. Yes, that risk is definitely there, but I’m not content to ignore an opportunity just because, if handled incorrectly, it could backfire. That’s a recipe for obsolescence.

Kim, you called my post ignorant. I call yours overly-conservative, and perhaps intellectually lazy. The ball’s in your court. ;-)

I have an idea for a web 2.0 game (mmMMMmmm…. buzz words.) It came to me while I was struggling with writer’s block.

“Group storytelling” has been around for a while. The basic idea is: one person starts telling a story, then the next person continues the story in whatever manner they please, with or without regard for the intentions of the first storyteller. I remember telling chain stories in elementary school, and I remember participating in chain stories on message boards (back in the days of modems and BBSs.)

So, imagine Digg.com meets group storytelling. People submit the beginnings of stories. The community votes on the winner. Then people submit subsequent portions of the story, and the community votes on those. Mix, pour, repeat, until the story ends.

This may very well already exist, but I didn’t find anything after a quick web search on multiple permutations of the term (i.e. substituting “chain” for “group” and “writing” for “storytelling”.) So I’ll enjoy pretending that it’s an original idea, even if it probably isn’t.  :-)

What could be done to make the group storytelling experience more interesting? How about weaving in art? Each week, the community could vote on artwork that best illustrates the winning story section from the previous week.

How about adding more game-like elements to the experience? Each story (lasting, perhaps, three months) could be focused around a challenge; some serious, some quirky. For example: hide as many references to fruit in the story. The community could then be encouraged to identify the references. Points for making and finding.

Or the challenge could pit readers against author. For example, imagine the challenge, “write a piece of historical fiction about George Washington, staying (or appearing to stay) as true to history as possible.” Writers score points for sneaking fiction past the community; readers score points for catching falsehoods. (Note — as a writer, I actually prefer the idea of an uncomplicated group storytelling exercise, but I think it might be fun for every third storytelling challenge to incorporate a sub-game like one of these. And of course, the sub-game could unite author and reader, not pit them against one another.)

Anyway, specific examples aside, what do you think?

I stumbled onto an interesting mashup of Halo and Metroid (plus a little Matrix) via Penny Arcade. But the mashup itself, while impressive, didn’t inspire me to write this post. What caught my eye was the commentary on the mashup by its creator, Monty. Let me quote the relevant portion:

One thing that you can’t deny about Halo is that it’s popular. In fact the Halo community is so large that if anything Halo related that surfaces on the web, it gets notice. The movie I submitted here over a year ago that contained a Halo-esque character was wildy more popular than the movie I had submitted more recently despite it being technically better.

It hit me with some minor distaste that the world as it is doesn’t really want new stuff. They want to see new versions of the stuff they already know… Sorta. It could also be viewed in such that with the growing number of characters and stories out there. By trying to sell my own original story with my (somewhat) original characters I am vying for the attention of people who already have well enough to look at. Looking at it that way it’s not so bad that when you think I’m competing against the studios out there that spend a fortune creating stories and characters they’re struggling to sell as well.

As an amateur I can’t really fight standing on the shoulders of already established characters. But it can at least be admired as to what I do with them.

If you can look past the funky grammar, I think you’ll find this to be one of the more elegant insights into fan participation in mass media. Some people co-opt famous IP for love. Some do it for attention. Monty seems to be in the latter category… but that doesn’t really matter.

What matters is that Monty created something entertaining. It benefits him, and it benefits the Halo franchise because it reinforces the franchise’s cultural relevance. And if you happen to be a Metroid fan who has never played Halo (or vice versa), perhaps this mashup will be the thing that finally pushes you to try it out. That’s why we need to support and encourage this kind of participation.

Someday, if I ever transition from the role of distributor to the role of creator, I hope guys like Monty will do me the honor of celebrating my works.  :-)

A partial transcript of the session can be found at GameSpy.com.

The panel exceeded my expectations, for which I have to sincerely thank the panelists. PS. Ray Muzyka is a master of understated humor.

I’m somewhat embarrassed to admit that lately, when someone asks me for advice on building up their community-centric media project, my answer often includes the following question: “What are you doing to drive financial value back to your users?” I say embarrassed because this question invokes tragicomic memories of failed dot-com startups; you know, the websites that paid you money for websurfing (“make pennies per day!”) Or, for that matter, more recent sites that prove the classic pyramid scheme is alive and well.

Past failures and frauds aside, there’s clear evidence that creating economic opportunities for users can result in big bucks for businesses. This has long been obvious outside the entertainment industry — eBay, Google (adSense), and Amazon (Marketplace) all make a ton of money by riding the efforts of users. But in entertainment, many people remain fundamentally opposed to sharing the wealth. Why bother, they ask, when users aren’t demanding it? (see MySpace, YouTube, etc.)

Not Yet Is Not Never

Users aren’t demanding it yet. But then, they haven’t had many high-quality choices. And the choices that they do have are hobbled by network effects — specifically, the powerful network effects of competing giants like YouTube, for example. It’s very difficult for a startup to make headway against an established community site in the short-term. But positive network effects are not a permanent guarantee of dominance; competing platforms with new and improved features can eventually build critical mass. (Skype, anyone?)

Lottery, Anyone?

And users don’t need a community that promises riches to all. In fact, a system that delivers just a little to everyone may be worse than a system that creates a few notable winners. It’s kind of like the lottery: as long as one in a million customers get rich, the rest of us keep hoping against hope. Second Life is like that. Most users, even most users who make the effort, don’t ever earn much real money. But it doesn’t matter, because Ansche Chung (the first “Second Life millionaire”) is on the cover of Newsweek… a golden beacon to capitalistic users everywhere.

The way I see it (at least in the USA), it’s part of our cultural genetic makeup to desire financial rewards for our efforts. There’s nothing more American than an entrepreneurial drive for cold hard cash. Sorry, mom. Sorry, apple pie.

I’m Not Forgetting Self-Expression or Social Forces

I’m not discounting the importance of reputation and self-expression. These are powerful social forces that help drive successful online communities, and that will never change. I’m just wondering what the next generation of online juggernauts will look like, and what they’ll do to steal marketshare away from Web 2.0′s victors. I’d be willing to bet that at least some of the future winners will learn to share the wealth.

PS. Given my occupation, I should note that while this all clearly applies to the latest generation of “game portals” that purport to aggregate user-generated games, it doesn’t apply quite so clearly to games in general. There’s a big difference between inviting users to a blank slate (i.e. MySpace) and inviting users to generate maps or art for a full-featured video game (i.e. Gears of War.) That said, I can even imagine a scenario in which, for example, revenue from dynamic ads is shared with the creators of multiplayer maps. But that’s a topic for another day.

PPS. I notice that my friend Sam just wrote a similar post (about a specific site called Metacafe). Check it out.

Last week was an interesting one for enthusiasts of user-generated content.

“You” rock

Time Magazine named “you” (as in everyone) the person of the year. Not surprising, but notable in a “cultural signpost” kind of way. Do “you” feel good about yourself yet?

You rock (with a little help from Microsoft)

Microsoft officially launched XNA Studio Express and the Creators Club, then followed with a number of interviews that declared an unambiguous commitment to UGC. Just a few short years ago, most people in this industry thought that users were good for nothing more than their wallets (plus the occasional UG multiplayer map.) Now Microsoft is dedicating real resources to helping regular people make video games from scratch.

You rock, in a capitalist-kind-of-way

A player-created (virtual) corporation in the MMOG Eve Online announced that it would be going public. That’s right: selling shares for what amounts to about $75K — not on NASDAQ, but selling shares all the same. Not a milestone in terms of value (virtual “property” has sold for greater amounts, even in Eve Online), but a conceptual milestone all the same. And how would shareholders in this Eve corporation feel about Raph Koster’s views on virtual property rights?

Chris Rock thinks you rock

Actually, Conan O’Brien thinks you rock, but I couldn’t resist the name game. They’re both comedians. Sorry…

O’Brien (like many other TV personalities) recently discovered what it means to have a “comedy dialogue with the audience“. An off-hand comments about, ummm, masturbatory marine life snowballed into a website featuring thousands of user-generated submissions in the same vein. Like Steven Colbert, Conan has discovered that a well-framed 15-second joke can generate thousands (perhaps millions) of dollars in subsequent eye-ball revenue… all thanks to dedicated fans.

What about pet rocks?

By now it should be pretty clear that the next “pet rock” (and indeed, the next media landmark) will someday be as likely to appear on YouTube (or the equivalent) as it is in a media conglomerate’s back room. So what’s a conglomerate to do? Or, for that matter, a video game console maker, publisher, or developer?

IMO, the answer lies in the twin forces that drive UGC: the desire for self-expression and/or recognition. These seem like such basic things, but we’re barely scratching their surface right now.

Self-expression is limited by the tools and network available to users. We seem to have solved the network problem (though full-3D UG worlds like Second Life are still choking on bandwidth and processing constraints.) However, many UGC tools remain too crude or far too complex for the average person to enjoy. The companies that effectively tackle this problem (within as “limited” a context as a game or as “broad” a context as a platform) will have a real advantage.

Self-expression is also limited by the rights given to users. As long as companies are afraid of “losing control” over their IP and/or brands, they will dampen the creative potential of their fans. Which is OK while everyone is being paranoid, but that won’t last forever. So remember: most consumers appreciate the difference between UGC and corporate content, even if most marketing executives do not. Consumers simply require an effective filtering system in order to find the content they’re looking for (and to avoid the content they dislike.)

Finally, self-expression and recognition are limited by identity platforms. Take Xbox gamertags and gamerscores as an example. These have proven to be remarkable platform innovations, despite their simplicity. Gamers go to incredible lengths to increase their gamerscore, despite the fact that it has little tangible consequence (outside the realm of personal and social satisfaction.) To what lengths would gamers go if their identity was more than just a name, static picture, reputation rank, and score? More to the point, how could their enthusiasm be channeled into applications that enrich the community as a whole? To some extent, we already know the answer to those questions: just take one look at MySpace, Second Life, etc…

I suspect that, like Microsoft, Nintendo has begun to recognize the possibilities, as the Wii now facilitates self-expression of a sort via “mii” avatars. But again, both Nintendo and Microsoft are still just scratching the surface. There’s room for so much more….

PS. If this hasn’t bored you to tears, see my post on Viva Piñata. It’s all related.

Today my buddy Rhys called me out for criticizing Viva Piñata a couple weeks ago, then playing it for significantly more time than I initially intended. (I’d have kept my indulgence a secret, but the Live achievements system sold me out.) So I’ll admit it: I’ve played Viva more than any other 360 game I own. So sue me.

Many other people have written detailed descriptions of why they like this game, so I’ll pass. Instead, I’d like to focus on what I think the Viva Piñata franchise could become, and what that means for gaming in general. In short: I’d like to see Viva Piñata 2 (assuming it’s ever made) focus more on self-expression and social networking.

Right now, the gardens I’ve created are entirely constrained by utility. They don’t look the way I want them to — they look the way they must if I’m to climb the devilish ladder devised by the designers at Rare. (As much as I enjoy the landscaping features of the game, I don’t want to spend time decorating, only to undo my work when progress demands an oak tree instead of the apple trees I already planted.) I’d like to think that there’s a better balance between self-expression and gameplay progression, though I suppose RAM is ultimately the limiting factor (i.e. how many different garden features can be displayed simultaneously on screen.)

Of course, it wouldn’t be my blog if I didn’t mention user-generated content. If another customer created a decorative waterfall and shared it with the community, I’d download that sucker in a heartbeat. I’d even pay out some of the chocolate coins I’ve worked so hard to collect. And that could be the start of a promise-laden virtual economy…

Right now, the main way I interact with others is to send them my piñatas. To heck with that — I want to visit my friends’ gardens personally. Ideally, the gameplay would change when I’m a “visitor” vs. “owner” (though shared ownership of gardens would be an especially nice feature.) And if two players happen to be “in” the same garden at the same time, it would be wonderful if gameplay shifted (subtly or otherwise) to reflect their mutual presence. But that’s more of a nice-to-have in my giant and complex list of “musts.” ;-)

This commentary is focused on Viva Piñata, but the core philosophy behind it applies to many game franchises. As people spend more and more time in virtual spaces, their hunger for meaningful self-expression and companionship within those spaces is only going to increase. After all — humans beings are social creatures; we’re simply not hard-wired to sit alone in front of a TV or monitor for weeks at a time (my adolescent behavior notwithstanding.) We crave acknowledgement, acceptance, and companionship as much as we crave various forms of stimulation, and video games need to deliver on that.