The Magic Test

“People are willing to pay for magic.”

That’s what my friend Brian replied when I told him that no one in Microsoft’s target audience would purchase an Xbox plus Kinect for a minimum price of $300 when they either A) own a Wii already, or, B) can purchase a Wii (with MotionPlus, Wii Sports and Wii Sports Resort) for just $200. Brian, as I frequently must admit, is a perceptive fellow.

People are indeed very willing to pay for magic. They have lined up around the block to pay $500 minimum for a slice of magical iGoodness from Apple. They lined up to watch Avatar in 3D (multiple times.) And they — that is, we — will continue to line up for the products and services that dazzle us, recession or no.

So, if you want to know who “won” E3, perhaps one way to figure that out is to apply a magic test to the products that were unveiled there.

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Aside

I’ve decided to stop posting “articles of interest” and start simply making better use of the content sharing features in Google Reader. GR converts my shared items into a feed, so you don’t need to be using GR to access my shared items; just subscribe to my GR feed as you would to anything else. That said, I highly recommend GR if you aren’t using it already (and apparently my readership agrees — over 70% of you are using GR. Talk about a monopoly!)

For those of you who visit this website regularly but don’t subscribe to the feed, I’ve added links to my GR shared items at the bottom of the left-hand navigation menu on the site.

Portrait of a Facebook Hangover

I’ve been casually tracking the daily active user numbers for the top 40 Facebook game developers for the past six weeks. Why the top 40? Because that’s the quantity displayed by Appdata.com on the first of 200 pages. Why daily active users? Because monthly active user numbers are widely considered to be an unreliable statistic for Facebook games, whereas DAU is, if not perfect, at least more directionally accurate.

I was mostly curious to learn how “hit makers” are faring on Facebook. (The 40th developer on the list has just 200k daily active users, so it’s safe to assume that all the heavy hitters are represented in the top 40 list.) Facebook’s total population has supposedly been growing by leaps and bounds over the past several months — it jumped from 350m “active” to 400m in the three months leading up to February 2010) so theoretically daily active users for the top 40 game developers should be growing as well, if for no other reason than there are more potential customers on the platform. However, it turns out the DAU count is down slightly since March.

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“Amazing Throwing”

For a trip down memory lane, check out this old TV commercial for Super Mario Bros 2:

What I find interesting about this commercial (aside from the cheesiness) is how pure it is. Unlike its predecessor, Super Mario Bros 2 was a game about defeating your enemies by throwing stuff at them as opposed to jumping on them. So Nintendo focused their commercial almost exclusively on that aspect of the game.

If the first Super Mario game was all about “amazing jumping” (as Miyamoto has supposedly said), then the sequel added and focused on “amazing throwing.” The developers got it. The marketers got it. And not surprisingly, the rest of us got it, too.

What’s the essence of your game? Can you say it in a few words? Can everyone else you’re working with say it in a few words?

If not, why not?

The Trials and Tribulations of Summer

For a couple weeks now, I’ve been getting calls from friends in the industry bemoaning their lack of inclusion in the upcoming Summer of Arcade promotion on XBLA. The tone of the calls has varied, but they’ve all shared one thing in common — frustration with Microsoft. As I’ve thought about it, I’ve come to the following conclusion: Summer of Arcade will have to change or, at very least, cease to be Microsoft’s ultimate promotion for the XBLA service.

First, a bit of history. Summer of Arcade was the brilliant brainchild of my good friend, Jeremy Wacksman. It was born of the realization that Microsoft desperately needed something that would draw positive attention to XBLA and make consumers, developers and the press take it seriously (bear in mind, this was during XBLA’s “inevitable misery” phase, when no one had anything good to say about the platform.) SoA served that purpose beautifully; it kicked off XBLA’s “triumphant return” and changed the tone of public conversation from “XBLA is full of crap” to “XBLA is the only place you can find games like Castle Crashers and Braid.” It also established the $15 price point on XBLA — an important and under-appreciated feat.

Dealing with rejection

Summer of Arcade still gives consumers and the press something positive to focus on. Unfortunately, SoA seems to be turning into a net negative for the developer/publisher community. Today, many companies will target a summer release in hopes of making it into SoA and may even choose to hold a finished game in their pockets for several months for that purpose. A couple months before SoA is scheduled to begin, ~five lucky development teams find out their games have been blessed; significantly more discover that they’ve been rejected.

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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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What to make of the iPhone?

Lots of people are talking about the iPhone announcements today. Most relevant to game developers: Apple is putting viral invites, matchmaking, achievements, and leaderboards into the OS; adding the ability to gift apps; introducing a slick in-app ad network called iAds; and (finally!) limited multi-tasking if you possess a 3GS or better. This is an impressive list of features, and as a consumer, I’m pretty excited about it.

As a developer, it doesn’t change my feelings about the platform much. It has been evolving into an ecosystem in which F2P is the most viable business model (as exemplified by Ngmoco) and it will continue to evolve in that direction. In fact, the introduction of iAds will likely accelerate the trend as developers race to compete with one another for a share of ad revenue. When Steve Jobs says of iAds: “This is us helping our developers make money so they can survive and keep the prices of their apps reasonable,” he really means “this will help maintain downward price pressure in the app store, which I love because cheap apps help sell iPhones!” (Btw, was anyone else struck by Jobs’ use of the word “survive?” I think that’s the closest he’ll ever come to admitting that life for developers is rough in the world o’Apple.) And if you’re still not convinced that F2P is the future of Applesville, let me remind you of now-common revelations that anywhere from 60% to 90% of app downloads are pirated.

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My GDC 2010 Slides Uploaded

For those who attended my lecture at GDC and would like to see the slides (which I have annotated for your convenience), please find them here.

If you missed the lecture but are a regular reader of this blog, fear not. Much of the content was based on articles that I have posted on this blog over the past year. The new content pertained primarily to iPad vs. Kindle and some neat new research/data on the Long Tail. Fun stuff!

Aside

Turbine’s D&D Online is generating 500% more revenue since adopting a complementary free-to-play model. Interestingly, the revenue spike is driven in part by a doubling of paying subscribers — a nice demonstration of how blended revenue models for online games can be particularly profitable.

Facebook will be taking a 30% cut from developers who use its Credits virtual currency, claiming that “early testing has shown that users paying with Facebook Credits are significantly more likely to complete a purchase than the average Facebook user.” 30% is an unsurprising percentage for Facebook to begin with because the bar has been set there by so many other digital platforms; most developers are unlikely to object as a result. I, on the other hand, would rather not forsake 30% of my revenue if I don’t have to (but then, I wouldn’t be surprised if Facebook eventually forces everyone’s hand by proactively merchandising titles that use Credits…)

Apple has banned thousands of apps containing adult content from the App Store without warning. With each passing day, this platform feels more like the “worst of both worlds” — i.e., all the disadvantages of an open platform (like too much competition, piracy, etc) and all the disadvantages of many closed platforms (remorseless management, poor merchandising, etc.) The emergence of successful F2P games in the App Store may be exciting, but it strikes me as a silver lining.

Wiiware reportedly generated $59m in 2009 (30% growth of 2008)… which doesn’t make me much more excited about the platform. Note that only one original WiiWare game apparently earned more than $2m in revenue in 2009, and that’s the incomparable World of Goo. And the next runner up may actually be well below $2m — it isn’t clear from the report.

Nice Gamasutra editorial on crunch. I liked this line: “In film and television, if an early treatment was suddenly plunged into full production, it would be considered a catastrophic failure of the development process. In the game industry, when a fledgling creative vision is suddenly staffed with talent, it’s considered ensuring success. This is a fundamental fallacy in our thinking.” I agree with the author on vertical slices: nice risk management in theory, but in practice an amazingly fun but crude-looking prototype is more valuable.

Offerpal and Amazon (via Mechanical Turk) have joined forces to essentially turn every single F2P game into a crowdsourcing game.

There’s more to life than games:

Brilliant satire: if the practice of journalism were like the practice of medicine in the United States

IGDA Board Elections

I decided to run for the board of the IGDA this year. As part of that process, I was asked to write a “candidate position statement” and answer some questions, all of which I have copied below. (This material is also available on the IGDA website.)

If you are an IGDA member, I would really appreciate your vote. The poll is open now and closes on February 28th.

Candidate Position Statement:

I am running for the IGDA Board because I believe the IGDA is faced with a vital problem: many people in our industry can’t see why they should join or actively participate in the IGDA. It’s easy to understand why. First, our industry‚Äôs most prestigious publications and conferences are operated by other organizations. Second, our government lobbying is led primarily by the ESA. And lastly, the tangible benefits of IGDA membership – other than the recent health insurance offering – are unclear to many people. I believe that lack of progress on these fronts will jeopardize the IGDA and undermine its ability to tackle issues its members care about, such as quality of life and credit standards.

We — that is, *all* game developers, not just the large companies that comprise the ESA’s membership — need an organization that represents our interests and enhances the creative and business opportunities available to each of us. But we will never reach that goal without first building an organization whose value to potential members is self-evident. When people can’t see the value in paying $48 bucks for an annual membership, you know something is wrong.

If elected, I will focus on increasing the tangible value of IGDA membership. I’d like to ensure that content from the excellent IGDA Leadership Forum is freely available to all members, not just those who can attend the event. I’d like to enhance the ties between the IGDA and GDC to the extent that it benefits IGDA members. I’d like to grow programs, such as the IGDA’s webinar series, that bring useful business and legal information to IGDA members worldwide. And lastly, I’d like to explore the creation of additional benefits like the IGDA’s new group health plan; for example, a group legal plan.

In my time as portfolio manager of Xbox LIVE Arcade and as a consultant, I’ve had the pleasure of meeting many game developers. What has differentiated those that succeed from those that struggle is a combination of skill, luck, access to information, and the ability (and opportunity) to promote themselves. The IGDA can’t give developers luck, but it *can* open their eyes to common stumbling blocks, teach them about business, enhance their networking opportunities and help improve their skills. It can reduce the financial burdens that developers face and arm them with the tools they need to succeed… and increase its own legitimacy in the process.

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