Saturday, March 29, 2008

Friends: The One About Facebook Edition

I joined Facebook. I resisted for a long time. I like to stay off the grid. I got too creeped out about all the tracking going on and Facebook knowing what I am doing. Sure people go even further and install Google desktop, allowing Google to assign metatags to everything on their hard drive and its ok because "Google does no evil." You won't catch me doing that anytime soon, but I signed up for Facebook.

I signed up because I keep hearing about the apps and how they are the future of games. The companies who make these things are achieving ridiculously large valuations. I also signed up because I thought it would be a good way to promote this blog. So far so good with the first one, I haven't really figured out the second. Some other stuff happened along the way though.

Facebook wants me to tell everyone I know, directly and tangentially, what I am doing right now. It is kind of like twittering, but in my head it makes me feel like my broadcast would be telling people my head is so large as to think they really care about what it is I am doing right now. Then I realize I put an awful lot of time into writing posts like this on my blog which demands a larger time commitment than a pithy phrase on Facebook, so I must have an even more inflated view of my significance than those people telling me what they are doing. I think about doing it, but then paralysis sets in as I realize the thing I type has to be very important. If I am going to broadcast to all of these people, I must say something funny. . . no, profound . . . profoundly funny. I sat and tried to think of something, but couldn't, so I didn't. The blog is much more passive anyways. Especially whey you call them something like "A Tree Falling in the Forest." My blog is not in your face - until I figure out how to do it on Facebook.

The other thing going on is the "friend thing." There is a set of people who I definitely want to connect with. There is another set of people who I would like to connect with, but I don't really know whether they want to connect with me. There is third set of people who I don't want to connect with, but may want to connect with me, but don't know I don't want them to connect with me. Finally, there is a set of people who are on the other side of the door I slam on far side of the bridge I burn at the end of some interactions.

The first ones are easy. I sent those out they sent them back to me, job done. I even found some old friends I have not seen in a while and a business acquaintance which may lead to something. The second set was a bit time consuming. I noodled around the friends lists of my friends and found people who I met once or twice, or would like to know. If I met them a couple times and could pick them out of a line-up, I hit them up to connect. Surprisingly, they all accepted. As interesting as it would be to connect to P Diddy, I did not send the invitation out. The third group is tricky. These people don't know I don't want to connect. I am working on my understanding of what it means to be a "facebook friend" to decide how to respond. In other words, I am spending way to much time on each decision. My mother always told me to pick my friends carefully, but she didn't clarify whether she included facebook friends in the definition. These are people I either don't know, or choose not to interact with for some reason unknown to them. Even in the case of those I don't want to interact with, I have not been a complete flaming asshole to them in public. I just choose passive aggressively non interaction. When these people send invitations it takes way too long for me to respond. I look at the name, I click on the profile, I think about the person, I think about why I have to think about it. I get concerned about rejecting because they may be a nice enough person, I just don't know them and who am I to reject them when they think enough of me to request a link? Then I get concerned about letting everyone into my network. This is shortly before I realize there is really no problem with letting everyone into my network. So, in almost all cases, I accept these connections. The last group is no less troubling. If they send a link request, I obviously didn't slam the door correctly. Should I slam it again? Should I send the person a detailed anecdote long with the analysis for not wanting to deal with them? Should I use the wonders of this new technology to post the story on their wall? If I push ignore, it does not feel strong enough. They don't know they were ignored. They don't know they were rejected. There is not enough satisfaction. I end up not doing anything with those.

Who knew this was going to be another job? It would be nice to end this post with a point. Unfortunately, I don't have one . . . just sharing.

Weekend Alone: Lots of Games Edition

My wife and son are out of town visiting my in-laws this weekend, so I am playing a lot of games. If the connective tissue of the preceding sentence does not bother you when coming from a 42 year-old man than you have issues as well. It could be stunted emotional development, it could be my tenuous grasp on reality, but when left to my own devices, I will lock myself up in a darkened room, turn on the surround sound and stare into my 55" Hidef window to the world of "not my reality."

I decided to pick my head up from hours and hours of Call of Duty 4 multiplayer and see what else is out there. It could also be the feelings of inadequacy engendered by the sound of pre pubescent voices standing over my dead COD soldier yelling "got you motherfucker" . . . a lot . . . and often. . . while I notice their rank is much higher than mine and time committed is orders of magnitude lower.

I dug into a pile which included Turning Point, Devil May Cry 4, Army of Two, Frontline and Turok. Even though some of these were maligned by the critics, and none of them scored even within radio distance Call of Duty, I came to the conclusion of what may be the defining characteristic of the next gen - do we get to call them current gen yet - consoles. 360 and PS3 games are like pizza and sex. Some games may be an awful lot better, but they are all fun.

Turning Point is not Call of Duty. The critics have made the point more than clear. But could it ever not be fun to shoot Nazis? Especially Nazis in New York. I like the flip to third person grapple moves. Did you see the guy falling of the side of the building on the first level? Planting bombs is more interesting than in the MOH series where you are asked to do the same thing. Sure the Nazis aren't so smart, but did you play Airborne? Sit back, shoot some Nazis and stop complaining.

Devil May Cry is an excellent torch bearer for the franchise. The haunting melody sung at the beginning, the slaughter of really cool looking whatever they ares and good battles in a church. The character designs are amazing and drew me in quickly. Who could not like playing a game with Gloria. Battling demons in her low cut, Brittany Spears inspired panty missing, stick to her body all over and cut out up the legs outfit in the middle of the snow. Just in case we don't get the full picture, she flips upside down, spreads her legs in battle and then scoots her backside across the camera in mid air. Gaming, semi hentai goodness wrapped up in an action game.

Army of Two, not a critical darling either, but also doesn't suck. I really like the feeling I get when I go back to pull my buddy up through the hole in the floor. It is not what some game execs characterize as "drag the bitch" escort missions. I really got the feeling we were working together. The distracting fire is a great trick. A bit too effective in the distraction, but should be fixed in the sequel. Finally, could anyone not smile the first time they high fived their buddy. It could get old after a while, but the head bonking is not old to me yet.

Frontline tried really hard and succeeded enough to make me happy. It feels like they tried to be COD and Battlefield all wrapped up in one game. By trying so hard, they got enough of both to be enjoyable. Admittedly I did get a bit tired of running around after smoking cans of whatever those smoking cans were full of, but the missions were well laid out and balanced. I really liked being able to use the RC cars ad helicopters to go after stuff.

Finally, a touch of Turok. Another title which did not make the critics dance with joy. Turok is a very pick up and playable FPS. Despite all the bashing, the game is solid. The mini games did not feel bolted on. They kind of hit like a turn based RTS. When sitting in surround sound and walking through the high grass I could hear creatures sneaking up behind me and it is spooky. When I turn around see the grass moving it creates very real tension. Isn't this why we play games.

I guess from reading this you can see I am not the typical gamer. I play them and just think they are fun to play, not find fault. I could easily write about the aiming problems with Turning Point and Turok, or Dante's continuous running animation which keeps going even when he is against the wall or on the side of a cliff, Army of Two's AI which probably took the short bus to AI school or any number of other issues. I play enough games to see them all. Hell, some of them were even present in Bioshock. But it is more fun for me to just put the game and enjoy it. Why should I ruin my own fun. I have the critics for that.

Wednesday, March 26, 2008

Real Transmedia, The Hills, Lauren Conrad Edition

In a culture like ours, long accustomed to splitting and dividing all things as a means of control, it is sometimes a bit of a shock to be reminded that, in operational and practical fact, the medium is the message. This is merely to say that the personal and social consequences of any medium- that is, of any extensions of ourselves - result from the new scale that is introduced into our affairs by each extension of ourselves, or by a new technology. . . The electric light escapes attention as a communication medium just because it has no “content.” And this makes it an invaluable instance of how people fail to study media at all. For it is not till the electric light is used to spell out some brand name that it is noticed as a medium. Then it is not the light, but the “content” . . . that is noticed.

Marshall McLuhan

I know who Lauren Conrad is. She was right on the cover of Us Magazine in the airport, and I recognized the name. There is no reason for me to know of her. I have never seen an episode of The Hills or her original show, Laguna Beach. She doesn't have a sex tape like Paris Hilton. This knowledge is probably using brain cells which would be much better served holding something else. I know her because Lauren Conrad is a Transmedia property.

Transmedia auteur Jesse Alexander, writes "Transmedia Storytelling extends narrative across multiple platforms: TV, Movies, Cell Phones, Websites, Toys, Video Games, Etc. Reaching new consumers, and immersing existing fans in the world of their favorite franchise. To my knowledge the term was coined by MIT Professor Henry Jenkins." We usually cite examples like Star Wars, Heroes, The Matrix as Transmedia properties. Or course they do transcend their launch medium, but relative to Lauren Conrad, they are synthetic. Lauren Conrad is organic. The representation we see on TV is the representation in the tabloids, is the representation in her fashion line, is the representation we see on entertainment news programs, is the representation in the music videos, is the representation we see in the Laguna Beach video game. Emmy award winning ARG designer,Matt Wolf, got me thinking about this when he pointed out Hannah Montana as another example of Transmedia execution, but even Hannah Montana is a separate entity from her alter ego, Miley Cyrus.

There is a lot of buzz among the studios and game companies about "transmedia" properties or "360" properties. Media agnostic properties with a presence in all media. Not Walt Disney's merchandising from the thirties, but true presence, advancing the story and impacting the viewer in every media. Star Wars was traditionally held up as the paradigm, but its growth was more haphazard than by design. Creators, and their backers don't want to take the risk, or the time, so they are starting to conceive of properties from the design phase with multiple outlets in mind. Each implementation tells a different side of the story using the unique attributes of the extant medium. When done right, it is amazingly lucrative and satisfying to the audience. When done wrong, it turns into a frankenproperty devoid of soul.

The foundation of a Transmedia property is a strong and believable story bible. There must be a universe with a well defined backstory so new story elements and implementations are consistent and justified. This is easily covered by Lauren Conrad, she plays herself in the show. Not like Mary Tyler Moore or Bob Newhart did. Rumor has it, "herself" is assisted by better writers and placed in more interesting situations than we mere mortals, but it is ostensibly, herself. If the rumors are true, you certainly can't blame her. I can think of about 2.5 million situations in my life which would have been improved by better writers. As herself, Lauren Conrad moves seamlessly from the show into the real world while traditional properties must be pushed artificially beyond their primary media through licensing and marketing, or a combination of both. Like these properties, Lauren Conrad has a licensing program - she has clothes - but unlike them, her story moves seamlessly from the television screen to the mainstream media. Perezhilton, Entertainment Tonight, Us Magazine, E Channel, People, The Wall Street Journal, and of course MTV all cover her life, which is the very story line of the show. Us Magazine's cover reported some guy stabbed her in the back. Other outlets, like the San Francisco Chronicle immediately reacted with stories from Lauren Conrad about how the magazine misrepresented her position - isn't there a war to write about? This is story telling.

The Wall Street Journal article provided an illustrative anecdote about the star:
To keep themselves in the spotlight, Ms. Conrad and her contemporaries are willing citizens of a tabloid world. During a recent breakfast interview at an outdoor café in Los Angeles, Ms. Conrad said she suspected a photographer was taking pictures of her from across the street. She declined to move to an inside table. Instead, she looked left and right before taking quick bites of her egg whites. "No one eats pretty," she said.

Less than three hours later, Ms. Conrad sent her breakfast companion an email with a photo attached of her enjoying her eggs. She had found the photo after a Google search. "Haha they always get it!" she wrote.

Ms. Conrad's team monitors the star's symbiotic relationship with the press. It's essential that she hit the hot spots, where tabloid photographers lurk. Yet because Ms. Conrad's corporate relationships benefit from her good-girl image, they want her to go to a lot of parties without partying a lot.

She uses the mainstream media like the rest of use Facebook. When was the last time you saw Mickey on the cover of People. Or Angelina Jolie interviewed as the character she plays in a film? In this case, we have a single narrative extended across multiple media. In his book, Convergence Culture, Henry Jenkins downplayed Mcluhan's position regarding the medium being the message. Technology is not active in the message, it is merely delivering it to the consumer. This is true if you are consuming fantasy. Water, and consumers flow to the path of least resistance. But when the nightly news disseminates your story, which is an extension of your life, the medium becomes the message. More weight is given to a story from an ostensibly credible news source - I am talking about the Wall Street Journal here - than to a character portrayed in a film, or even an entertainment interview about an actor. Her presence hits our culture in a different place than Star Wars or The Matrix. Even the most hardcore fan will acknowledge The Matrix is fiction. However, like a sadly delusional wrestling fan who swears the WWE is a sport, the young teens being weaned from their parents by The Hills, and Lauren Conrad's latest fashion show, just don't know.

If you look closely, you can see MTV's hand, but in this case, the illusion is better than anything Criss Angel will have in his new show at the Luxor and nothing Vince McMahon could ever dream of. In the name of entertainment MTV has unleashed a new, powerful form of entertainment. Let's cross our fingers and hope they use their power for good.

Tuesday, March 25, 2008

Flashback: Things I learned in Hollywood Edition

I wrote this article a year or two ago to address a break down in Hollywood's distribution driven financial model.  I read it again recently and realized many of the market forces which are creating tension in the film business today are hovering above the game industry.  I thought it was worth reviving. 

Here it is:

Hollywood started as a creator of content; it ended as a gatekeeper over distribution. While it may feel a bit early to identify the end of a multibillion dollar industry, the dream factory perceived by the outside world is long gone and without significant change, the democratization of distribution and production arising from advances in digital technology will make the US steel industry look like a growth business relative to Hollywood. But what technology takes away with one hand can be restored with the other.

In the early days of filmmaking, the producers, directors, cameramen and even talent were studio employees under contract. Over the years, through studio actions and actions of others, including the government, the contract employees went independent. The producers became independent contractors and the actors became free agents. Along the way, studios turned into content venture capitalists, placing seed investments in ideas, which if grown into something interesting, are handed off to independent contractors retained to oversee execution, which is now more often than not, outsourced to a foreign country. The exit strategy is the box office release of a film, followed by a series of subsequent distribution sublicenses – “windows” – in pay per view, cable, home video, network television, etc. The consumer dollar is not earned through the sale of the content, but through the parsing of distribution through the windows. If you want to see the film, you have to pay the party controlling the relevant channel. Much like an investment bank preselling its book in an IPO through its control of distribution, the studios presell, or predict the value of the windows. The risk capital was OPM. Doctors, energy barons, Japanese, Germans and a litany of others who all found eager recipients of financing. Life was good. Then things got digital. Like a window closing on the public market, losing the distribution chokehold killed the exit. Now the investments are starting to look like the ones no self-respecting venture capitalist will ever make, pure content plays.

The studios are not threatened by the peer to peer sharing of content they shout about, but by the Scylla and Charybdis of falling production costs and ubiquitous distribution. Studios lost the ability to internally manufacture their product when they released their costly ties to talent and focused on finance, distribution and marketing. Studios are now merely go betweens for financing and the distribution and marketing is losing significance.  As technology opens more cost effective distribution channels, the large audiences aggregated through broad marketing campaigns are no longer a necessity. The studios reasons for being come into question. Is it any wonder each studios is reducing its output?

When I was at the agency the head of a studio presented a grand and very important speech.

“Stealing music is wrong.” He proclaimed, ”People should not download music on peer to peer networks.”

I wholeheartedly agree. I bought my house with money generated under the umbrella of copyright. Owners should be paid.
"Stealing movies is wrong."   He continued.  Hazzah we replied. 

“Consumers are Tivoing through commercials place in our prime time line up. They are not obeying the contract.”

Whoa, wait a second there. You had me on the first two, but you lost me on the third. I don’t remember agreeing to watch 8 minutes of commercials for every 30 minutes of network programming. There is no contract. The studio head was clearly upset, but for the wrong reason. He was not concerned about a lack of interest in his content he was upset the public was not accepting the package. 
Prior to peer to peer and iTunes, the record companies could put enough filler on a CD to charge people $15.99 to purchase the one song they heard on the radio. Prior to Tivo the networks broadcast a show, and if you wanted to see the show, you had to sit through the commercial. Now people pay extra money to avoid commercials. The public is actually paying more money than ever before for its content, but it is not going to the studios. Equipment and subscriptions like Tivo and iPod capture the money which would otherwise go to studios. If the studios are to stay in business, it is incumbent upon them to figure out how to capture the dollars flowing into the market. Right now, they are looking in the wrong place.

The Vice Chairman of one of the studios called me in for a meeting. I didn’t know why, but I went because he was the Vice Chairman of a studio and I was still at the agency. I thought he wanted to talk about games.  After all, it is what I do. He started the meeting with “How do your clients feel about pirated films?”

“I really don’t think they put much thought into it, my clients make games.” I replied.

“Games are technology. You know about technology. Your actor clients, the agency’s actor clients. How do they feel about it?”

“Well, I certainly can’t speak for the agency or its clients, but it seems to me that if you pay an actor $20 million for a film and they don't have a gross participation, they really don’t care whether people in China pay you or the pirates.”

“Well they should, and we have to shut the pirates down before we turn into the music business.”

After so many years of profiting from an inefficiency in the supply chain, the industry forgot how to make money on its product. The industry must focus on adding value, not closing down distribution. While it stands like the little boy with his finger in the dyke, trying to reestablishing the inefficiency, others are finding ways to entertain the public. Television viewership, box office and DVD sales were all down last year. Internet usage, online purchases, video game and home theater sales were all up.

The technology industry has the answer Hollywood chooses not to listen. Hollywood says “I am going to make something, and you are going to pay me to pass through the toll gate and see the content.” Technology says “I am going to give you something, and then I am going to add enough value for you to want to pay for it.” The difference arises from each industry’s dna. Unlike Hollywood, where people paid for access to content from the start, software was given away for free. Bill Gates wrote an open letter to the industry telling them they should charge for their work and people got mad. As we all know, companies moved to payment model, but the seeds for value based pricing were sewn. If I buy an Oracle seat, I pay for the license, but Oracle profits from my service contract. If I download a Quake demo and like it, I pay to get the whole thing. Payment for services and value that cannot be pirated.

Steve Jobs introduced value in the form of context. He proved people will pay for a guaranty of receiving the song they want, when they want it, and where they want it. Next he showed, people will pay to receive a television show, which is also available for free, so long as it is in the format and at the time they choose to view it. In doing so he dragged the television industry, some say by accident, into a new revenue stream. The consumer is paying for the option of selecting the package. While this flies in the face of the business model espoused by our studio friend above, it provides an opportunity for him to capitalize on his library of content and potentially his new content, while actually making more money on a per viewer basis than first run broadcast. iPod did ok prior to content distribution on iTunes. It exploded after the introduction of content. This is great news for Hollywood.

Pixar makes great movies, and when coupled with Disney marketing, they perform exceedingly well. Hollywood has libraries of desirable content, and despite jettisoning all its employee talent; the execution and oversight talent still resides largely, and for a short period, uniquely in this city. The studios will clearly not figure out the new business models on their own. They need the help of the technology business. The reception should be welcome, as the technology business learned years ago that people buy hardware for what you can do with it, not the hardware. The industries need each other and the digital revolution brings them closer together than ever before. So after all these years of false starts and unhappy marriages, can’t we all just get along?

Monday, March 24, 2008

Check It Out: Wired Magazine Indie Game Highlight

Chris Kohler wrote a piece over at Wired's blog about an indie game which conveys emotion and has an innovative business model. A lot of good things in a single sentence. Indy, emotion from a game and new business model.

Check it out: Graveyards Story

R-E-S-P-E-C-T: OLPC Negroponte Edition

On September 4, 1995, Larry Ellison introduced the idea of an inexpensive, thin client appliance he called the Network Computer. In 1996 he launched the first Network Computer, with models as low as $300, thus fulfilling his earlier promise. The product was met with a universal, deafening yawn from the buying public and slowly faded from view. Ellison saw the still born product as a success. His idea of a sub thousand dollar computer was so strong, the entire computer industry seized the opportunity and collectively lowered the price of entry level machines, and created dedicated devices like Blackberrys, thereby growing a new market. He was not the one to make the market but the market was made. The statement sounded arrogant and a bit crazy, until it happened again.

Nicholas Negroponte spent the last three years in hell, doing something he really didn't have to do. He is the son of Greek shipping magnate for god's sake. He could just retire as the quirky, genius founder of the MIT Media Lab and live happily ever after. Instead, he did something great. Negroponte wrote many columns and articles about a problem, the digital divide. Most of the planet is un wired, and falling behind, creating a social, moral and economic catastrophe. Once he told us about the issue, he could have stopped there, Al Gore got a Nobel Prize for drawing attention to a critical issue, but he did not. He did something about it. In November 2005 he announced he would build a $100 laptop for the world. The laptop would address many of the issues touched on by Negroponte in the early days of his Wired Magazine column. Issues like lack of power - it has a crank generator, lack of wired infrastructure - it builds a mesh network with other OLPCs and even be durable enough for children. Production began 2 years later in November 2007. The press was happy to point out the price was $200, rather than $100 and production did not ramp up as quickly as had been announced. Well MSM, I'm sorry we only cured the cancer and the athlete's foot remained. This is an amazing accomplishment for any startup.

During the interim period Negroponte tirelessly traveled the world promoting the OLPC and trying to get countries to sign up to use the computer. He took no compensation during this period. He met with some success, some failure and surprisingly, competition. No major computer hardware company ever saw Cambodian, South American or African schools as a market growth opportunity, until Negroponte pointed it out. As a result of his identification of the market and articulation of a pathway, Intel entered with the Classmate, and other companies have announced computers at competitive price points. This is where the PR campaign broke down.

Rather than welcoming the companies to the mission and welcoming the other companies, Negroponte viewed them as predators. He could believe in his heart of hearts the OLPC is the best solution and the Intel offering will establish a legacy infrastructure which will harm the developing world. He could believe Intel and the others are merely trying to enter the markets to later take advantage of them. He could just be overly sensitive from the exhaustion arising from too much traveling. Regardless of the reason, it is time to end the battle.

The press is reporting some delays in the manufacture of the OLPC and other issues within the company. Negroponte recently stepped announced a search for a CEO. No one ever said he was an operator. Even he said he is not an operator. Visionaries rarely are. I understand the newsworthiness of underlying OLPC story, and the reasons it is reported as it is, but the guy accomplished an awful lot in the past three years and should be recognized for it. He drove the world to recognize a need and act on it. Even if industry is acting against him. Ultimately, because of him, the OLPC mission stated below, will be fulfilled:

"OLPC is not, at heart, a technology program, nor is the XO a production any conventional sense of the word. OLPC is a non-profit organization providing a means to an end—an end that sees children in even the most remote regions of the globe being given the opportunity to tap into their own potential, to be exposed to a whole world of ideas, and to contribute to a more productive and saner world community.

Bravo Nicholas Negroponte.

Sunday, March 23, 2008

Genius: Out Appled? Edition

[DISCLAIMER: This post was written by a dyed in the wool, multi mac owning, even still has two newtons, bordering on stalkerish, Apple fan, on his Macbook Air.]

No one can argue Steve Jobs' position as the greatest showman of our time. In case you want to try, talk to Sky Dayton who launched an amazingly innovative phone against the iPhone. Don't remember, that's the point. Apparently, no one told Lenovo.

They were working on "The Perfect Laptop" for a number of years when the Air beat them to market by a couple of weeks. They did some preliminary PR which did not get Apple-like attention, but now, with the ad posted above, they fired a shot across the bow. They think their features will show their computer is better. They don't know Steve.

As Apple owners our computers contain, and do, only the things Steve says they should. Steve provides for us. Steve did not think our screen should open flat. It opens to an angle which is probably a metaphor for beauty in a long forgotten culture, but I will approximate it to be 270 degrees. I don't know the value of opening to a complete 180, but Lenovo has it and the Air does not. They showed it in the ad. Steve said I do not need and optical drive. I was skeptical when he told me I did not need a floppy on my iMac. Everyone else had a floppy. Steve was right. I didn't miss it and neither does the rest of the industry today. Today Steve tells me I don't need an optical drive. It hurt a bit at first. Admittedly I purchased the methadone equivalent USB Superdrive, but it's working. Lenovo sticks its proud optical drive tongue out in the ad. They have one. Just in case the picture is not enough, the text points out 2 more USB ports than my Air, and call my computer hot air. Fighting words if I ever heard them.

The ad worked. I am writing about it, and so are a ton of others. An apple like pick up for a PC ad. Very, very unusual. Will it work on the sales side? Probably not. Air buyers are buying a statement. X300 buyers are buying a good traveling work computer. There aren't enough ads to change this mildly sexy, not evenly remotely artistic workbook into a statement.

Saturday, March 22, 2008

Gaming Press: Parody Edition

Sometimes these things just write themselves. Check out the cover of the most recent edition of Gamepro. Can you find something that is not a sequel? Did I miss the memo saying no one is originating IP anymore? I get why publishers see sequels as risk mitigation, but game press?

Friday, March 21, 2008

R-E-S-P-E-C-T: Ubi Edition

According to Stephen Totilo's blog, multiplayerblog , the Gamestop/Ubi Haze promotion has been cancelled. In fact, it was never meant to be. Ubi PR told Stephen the announcement was the result of a miscommunication and it was rectified.

Ubi has among the best, if not the best internal development in the world. They are supplementing it with external developers like Free Radical on games like Haze. They respect their product enough to jump in and rectify a situation like the Gamestop promotion. There are publishers out there who would not have made the correction. Sounds like the product deserves our respect too.

Good job Ubi!

Tuesday, March 18, 2008

Game Objects Are Unregulated Securities

Trading of in game objects is a controversial topic among MMO players. Some feel it degrades the game, others believe it levels the playing field. Regardless of your side of the debate, everyone can agree on the size of the object exchange market. It is massive and growing. It all seems sort of innocent, until you think about the nature of the objects being sold. Some kind of Darwinian aversion to incarceration led me to the conclusion we are trading unregulated securities.

My law degree made me think about it like a lawyer. Law degrees are kind of like herpes that way. I don't practice anymore, but it pops up at the most inconvenient moments and I start thinking like a lawyer. My corporations professor, Hugh Friedman taught us how difficult it is to actually spot a security, but gave us the definition contained in the United States Code. "SECURITIES - An investment in an enterprise with the expectation of profit from the efforts of other people." Here is another definition I found on line: "Securities are documents that merely represent an interest or a right in something else; they are not consumed or used in the same way as traditional consumer goods. Government regulation of consumer goods attempts to protect consumers from dangerous articles, misleading advertising, or illegal pricing practices. Securities laws, on the other hand, attempt to ensure that investors have an informed, accurate idea of the type of interest they are purchasing and its value." The definition is intentionally broad and is meant to apply to a lot of things, to protect a lot of people. Interests in condominiums, farm animals, land and oil rights, have all been determined to be securities. The definition is the foundation of the Securities Act of 1933, sometimes called the "truth in securities law" and the Securities and Exchange Act of 1934, which established the Securities and Exchange Commission and sets out filing requirements and trading regulation. Both were established in response to the events leading to the stock market collapse of 1929. Prior to these acts, anyone could sell stock to anyone and there were no reporting obligations or restrictions on insider trading or proxy solicitations. In other words, it was a lot like buying and selling game objects on today.

Like the things traded on the floor of the NYSE, game objects come in different flavors. They sell options, debentures, bonds, stock, derivatives and commodities, we sell land, characters, clothing, weapons, genitals and other stuff. Like most things analyzed through the legal prism, a spectrum emerges. At one end of the spectrum are games designed around ownership and exchange. In Second Life, people are encouraged to purchase "land" and build. Based on the information provided by Linden Labs, the purchaser can reasonably believe the plot purchased will be persistent and will have value. There is even plenty of PR addressing potential for appreciation in value. At the other end of the spectrum are games like WOW which purport to bar trading in objects. Some turn a blind eye, others take aggressive action, but trading happens in all of these games. These games have EULAs - those wordy things you button through at registration - explaining how in game objects are owned by the publisher, not the consumer. You can't sell what you don't own, so there is no real exposure. Right? Wrong. A security is a representation of an interest in a corporation or another object. A right to use. You are transferring your right to use the thing owned by the publisher. So even if the publisher is not creating the market, a market nonetheless exists and liability should lie with party creating the market. If value is being exchanged, consumers must have access to all the information relating to the value of the purchase. In these markets, we do not.

Placed in the best of light, with no implied wrong doing, I may buy a Sword of Fire on IGE, Live Gamer, Playspan, or one of the other exchange sites. In the worst of light, I may be someone completely unfamiliar with MMOs who bought real estate in an on line game because I read an interview with a company officer where he talked about all the money being made by speculators in his game. I make a value determination based on information available to me at the time. If there are no reporting requirements, we create fertile soil for fraud. Outside these markets, you will never find a more wretched hive of scum and villainy. We must be cautious.

If you think I am way off base here, ask yourself these questions. Would my purchasing decision be different if I knew every registrant, including me, would have the very object I am purchasing inserted in their inventory the next day? How about if a new armor was about to be introduced which would render my weapon impotent? What if the game was going to be shut down in six months? Three months? Would I have deposited my money in the Second LIfe bank if I knew regulation was coming down? What if the guy who sold me the object knew these things and I didn't? What if the exchange, who has a financial interest in each transaction knows? Is it really any different than 1929?

My modest proposal to all those politicians who feel the compulsion to legislatively attempt to restrict what has been proven over and over again to be protected first amendment speech is to forget about the hopeless crusade and make a name for yourself by doing something useful. Take a look at on line object exchange and be the person who cleaned up the market. Let's establish and enforce reporting and listing requirements on the publishers and the exchanges. It's time.

Monday, March 17, 2008

EA Take-Two: What About the Citizens?

In a further expression of his city state model, John R. told the BBC Rockstar is a "rockstar." BBC story. This is a nice sound bite, but I think he is taking the whole city state analogy too far, or maybe not far enough. The power of the city state is derived from its citizens. The same can be said of a game developer. Every night the company's assets ride down the elevator, or in the case of a game developer, go to sleep under their desk.

John tells the BBC " What we are attracted to is what we value in our own studios: great developers and great intellectual property." But I don't think he really knows what a developer is. In the same interview he said "If the wrong guy walks out, we have an issue to deal with, But we don't stop making games." He does acknowledge his respect for Sam and Dan Houser and Leslie Benzies, but he also said he had no fear that the value EA placed on Take Two would be damaged if they left. These men are not the producers of the property, they are the life blood. People make games, companies don't.

While giving lip service to the concept of the city state he is espousing the attitude which led to the demise of Westwood, Origin, Bullfrog and all the other studios named in his DICE mea culpa. If Sam, Dan and Leslie leave, the others who believe in them will leave as well. The only thing left will be a studio called Rockstar. Sound familiar?

If you go back and read the press around the Activision Blizzard merger, you see Bobby Kotick talking about conversations with Mike Morheim. He spoke with him, talked about how things would work out and the importance of Blizzard. In other words, made sure he would keep him. It is scary when I point to Activision for evidence of good behavior, but this should show how extreme John's statements are.

John, isn't it time to pick up the phone and call the boys?

Sunday, March 16, 2008

More Sequels

I complained about mainstream press coverage of our business. I complained about publishers banking on sequels. Now it is time to bitch about gaming press and their obsession with sequels. You could say they have to because there is nothing else coming out. Thankfully, this is not the case.

I was on my way home from presenting an original IP to a slew of publishers. Some talked about the problems of launching a new IP, but all are interested in following up. As I entered the airport I started to think it may not be as bad as I thought. Maybe the industry was looking for new IP after all. Then I got to the newsstand. I picked up the latest issue of Gamepro. The cover featured all of the great games for "08, every title was followed by a number. Rainbow Six 2, Final Fantasy XIII, Gears of War 2, Bioshock 2, GTA IV, GT 5, God of War 3, Resistance 2 and probably a few others. I bought the magazine, something no one outside the business or not already inclined to buy a game would do, and checked to see how piss poor the state of the industry must be to merit a cover full of sequels.

Inside were some new screenshots from The Bourne Conspiracy - which the magazine actually said was good, Patapon, which the magazine drooled all over as something they could not put down and introduced a completely novel game play and a few other new franchises they were pretty excited about. None were strong enough to earn a cover. On the other hand, I found statements full of nothing about God of War 3, Gears of War 2, Bioshock 2, Resistance 2, Lost Planet 2 and just about every other title featured on the cover. There was nothing new, but they all earned a cover.

If our own media does not respect us enough to support new properties, how will anyone else? Gamepro guys, don't you want to see something new? There is a lot of great new stuff out there. Some are even squeezed into the sidebars of some of your pages. How about showing a little more love? You may just find the love you get is equal to the love you give.

Wednesday, March 12, 2008

Gamestop Needs an Intervention: Part 2

Gamestop's disease is worsening (in rehab parlance we call it a disease, not an addiction.) They started by taking games back in trade, moved to giving higher in store credit and today announced they will be mainlining games. Their balance sheet was fattened selling games multiple times and only paying the publisher for the first sale and they need more. It is a great business model . . . in the short term. I have to think they may be overfishing these waters. As a top retailer, the decreased revenue from this practice eventually hits the publishers and impacts budgets.

Now, Gamestop Canada is offering in store credit of the full purchase amount for return of a pre ordered copy of Haze within the first week of purchase. Is there some way to look at this other than as flipping the bird to Ubisoft and Sony? Gamestop will increase pre orders, but will also guaranty a healthy supply of used games for resale to all but the hardest core of gamers. Even though Haze has multiplayer, the hardest core pre order types will play through the game in a week and happily return it to the store just in time for the not so core gamer to pick it up. The friendly counter person will sing the familiar "would you like to buy that used?" refrain and Gamestop significantly expands their margin on AAA title.

Ubi, are you going to say anything?

Wednesday, March 5, 2008

It's Just Not Right: Independent Developer Edition

The numbers are killing the independent game developers.  Not the numbers in the budgets, the numbers in the titles. Take a look at the top selling games for last year, each title ended with a number. This year's most anticipated titles end with 4s and higher. Like the film business, rising costs and expense management mentality moved the game business from one of innovation to one of risk mitigation. The problem is exacerbated by the influx of soda and soap sellers into positions of power.

When presented with a product, the first thing a publisher does is look for a benchmark. What does this product look like? If it looks like something good, we can build a plan around the budget and then give it to the sales guys. The sales guys can go out into the market and ask the buyers if two years from now they would be willing to buy something that looks like the thing that sold really well last christmas. Sounds pretty efficient. . . . if you are selling a new brand of tampon.

Another model, as articulated by Robin Kaminsky of Activision at DICE, is to identify a hole in the market. For example, they noticed racing is popular, but there weren't enough racing games out there. They could buy Bizarre Creations and enter the category in a meaningful way. This can in fact work out, if you don't want to disturb the status quo. When Take 2 took over Bioshock, was it because they identified the market need for an Ayn Rand inspired shooter in a distopic future? How about Namco, did they identify an unmet demand for a big sticky thing rolling through piles of garbage? And Activision themselves, they definitely saw the demand for people who were tired of playing air guitar empty handed - after the market spoke and bought a ton of product Harmonix spent 9 years trying to make. 

Trip Hawkins did not make Madden Football because there was a "hole in the market" for football simulation. He made it because it was going to be fun to play with his friends. Eidos did not need a focus group to figure out men may like to watch Lara Croft's backside for 30 hours. Sam Houser did not do a marketing study to see whether gamers would want to live on the wild side in an open world. These are some of our biggest franchises and their titles are known today as the thing that comes before the number.  They were made when people built on gut. None would make it through a marketing group today, and each would need some type of running demo, funded by the developer.  In case you are not tracking, the developer is the guy without money.  I am sure these risk mitigation techniques make sense to the legions of MBA's who are doing their best to commoditize a once creatively driven business, but how long is the consumer going to hang in there?

When I got into the business the deal cycle between games was a couple of weeks. A developer finished a game, lifted their heads from work and went out for the next deal. Now the cycle can take 6 months or more. If the developer lets the team go after a game, the publishers won't sign because the team is not ready to go.   That means burn rate without revenue.  Moreover, publishers want to see working demos, proofs of concept. More burn rate without revenue or commitment.  They ask for these further risk mitigating elements because they enter into every negotiation, and every deal like they are committing to build the fucking pyramids. The reality is, they are not.

First risk mitigator: A developer who has completed one or more hit games, building on the same or largely the same technology is highly likely to finish the game. Additionally, the likelihood of a hit is high.  I understand publishers shying away from new technology.  They should, and no developer should be stupid enough to walk into a publisher saying they are going to build a new PS3 engine at the same time they are building a game.  But if they already built it. . .

Second risk mitigator:  Publishers always put a provision in their agreements allowing termination for convenience.  The payments upon termination vary, but generally run from payment of current milestone to payment of a few milestones in the future.  They do not need a reason to terminate.  They can terminate because they don't like the lead designers socks - don't laugh, I saw it happen.   So if they sign a $20 million game, they are not signing a $20 million game.  They are signing a month to month deal to keep track on the games progress and see if they want to keep building it.  If they think it takes a wrong turn, they can cancel it and give it back to the developer.  Worst case, they write off development, best case, the developer reimburses them.  I have seen both happen.   I am not advocating buying every opportunity or reducing the scope of developer due diligence.  I am saying to mr. experienced product guy, if your gut tells you this game will be fun and the developer has a track record, fuck the sales dude and go with your gut.   Start a long and lean pre production process.  For a relatively small amount of money you can see if the game comes together.  If it looks good, staff up and build.  If it does not, you are not out very much money. 

There are many things to avoid from Hollywood, there are however some lessons to be learned. Hollywood will pay a nominal amount of money for an option  to purchase a lot of properties. They will then invest money into what we would call pre production, they call development, to see if the property goes somewhere.  If it does, they invest heavily and build.  If it does not, they let it revert or sell it off.  Not rocket science, but it is a great response to escalating production costs.  There is no reason we cannot apply this model.

If we continue in this stasis and only give lip service to original IP, not only will we make boring games, but we will stifle the industry's growth.  The publishers are also unwittingly giving rise to a competitive market.  The same market forces that drove the independent film business and related financing are at work in the game business.  Independent financing is starting to come together and will create an opportunity for original IP.  But it is slow coming.   Once it is established, new franchises will be built, and will cater to the familiar publisher refrain "let someone else be successful and I will buy it at a premium.  It is worth the premium to not lose money on development."   Sound business practice. . . for tampons. 

In the mean time, I am afraid we may see more pairing of press releases, like these: 

Iron Lore Entertainment won the award for Best New Studio at the Game Developers Conference (GDC) 2007.

The New Studio award recognizes the outstanding achievement of a "new" game development studio and the obstacles it overcame in releasing its first publicly available game in the year 2006.

and the second, which came about a year later:

It is with great regret that we must announce that as of the close of business Tuesday, February 19, 2008 Iron Lore Entertainment has ceased active game development.  Several unrelated events occurred which resulted in Iron Lore being unable to secure funding for its next project.  

Tuesday, March 4, 2008

TED Conference: If Gamers Ruled the World

I just got back from the TED Conference. I am not going to try to describe the experience, there are tons of articles and posts all around the web that do it much better than I can. All I can say is that it is mental floss. It is an opportunity to hear and think about things I would otherwise not consider, and in many cases have the opportunity to consider. It also provides a new perspective, frankly a kaleidoscope to use when viewing my own little world. Fixated as I am, it always comes back to games.

To most of the world, games are considered to be well below porn when it comes to cultural contribution. They are only played by kids and they are all violent. This was confirmed at the conference. When I raised the subject of games with people like inventor, Dean Kamen; Jeff Skoll (Participant Media, producer of Charlie Wilson's War, An Inconvenient Truth, Murderball and others), Tony Robbins, and many other of the attendees, the unanimous response was "We don't work with games because they are all violent." The good news is that without exception, every one of them was open minded and surprised by the quality of rating system, the average age of the gamer, the number of non-violent games, and the opportunity to utilize game grammar to meet their objectives. While they are open minded, the industry is so stigmatized, no one would ever take the time to look at games. When I picked up Ian Bogost's new book "Persuasive Games: The Expressive Power of Video Games" in the TED Bookstore, the counter person told me I was the first to buy it. Ironically, the back cover of the book reads " Videogames lack the cultural stature of 'legitimate' art forms because they are widely perceived to be trivial and meaningless." The statement is absolutely accurate, and that is why no one is reading the book! The issue lies in the media.

For perspective, I am going to write about the TED Conference, as if gamers ruled the world.

"Monterrey, California- The TED Conference commenced today in Monterrey. The 24th meeting of thought leaders brings experts from a multitude of disciplines. David Perry, well known for action games ranging from Earthworm Jim to The Matrix, Louis Castle, who's work extends from the RTS world with the seminal game Command and Conquer to his current project Boom Blox with Steven Spielberg, Bing Gordon, one of the founders of powerhouse publisher, Electronic Arts and Robin Williams whose voice once appeared in a game are all in attendance. The conference also played host to Garrett Lisi who quite possibly discovered the unifying theory of physics and some guy who found the Titanic."

Kind of sucks doesn't it. While it strongly resembles a US news outlet's anemic coverage of world events, no one would stand for it. So why do we accept this from the mainstream press? Our biggest stories of the last year are EA making an offer to buy Take Two for a relatively insignificant amount of money in the world of media. Even there the news points to potential improprieties by Zelnick Media. Vivendi and Activision merging - yawn. Halo 3 made a lot of money - balanced by Halo 3 is really violent and M rated. GTA is bad. Mass Effect has porn - later corrected in a footnote. Bully makes kids beat each other up. As a result, no one bats an eye when a state legislature tries to restrict sales of games or penalize retailers.

I spoke with Chris Anderson, Editor of Wired Magazine, not the guy with the same name who runs TED, about media coverage of games. I am paraphrasing here, but he said they are all gamers are Wired and they cover games well. I suggested Wired was not the foundation for my point - it is not, we get respectful, accurate reporting from the magazine - it is the rest of the world who focus primarily on the bad bits. He feels media coverage is fine, the game industry is growing. Sure politicians try to do bad things, but there are always stupid politicians trying to do stupid things. Wow, I feel much better.

The reality is we are an easy target and sometimes nice plaything. If they media wants something flashy, the can use some of our images to spice up a story. If the media wants to beat on entertainment, we are the easiest target. Music and film lobbies bite back. Music and film buy ads in their publications. We don't, and we can benefit from both. The media will not correct itself. But through efforts of The ESA, the ECA, our interactions with mainstream press, and our marketing spends, we can change the stories. If we work very hard, we may be able to ascend to the status of porn, in our lifetimes.

Sunday, March 2, 2008

L.A. Marathon

In an act on a level of heretofore incomprehensible hubris, I decided to enter the L.A. Marathon. One of the final speakers at the TED conference said that sports are to war as pornography is to sex. I was never very good at those statements on the SAT, but I figured that one out. Today, 25,000 runners and I, went to war. I made it through to the other side. This places me in a very elite club that is limited to only a five figure number of people that includes kids under 12 and adults over 80. Many of whom finished before me. I am, however, proud to say that if I had entered the 90 and over class, I would have won my class.

Here is a summary of the race:

Start Line: I am crowded into a mass of flesh largely made up of people I would never otherwise see. Some, like the guy with the teardrop tattoos on his face and the elegant script on his neck, would not have crossed my path by conscious choice - on both our parts. But today, these are my comrades. We are staring a common enemy in the face, and we are one. Everyone is smiling and shaking hands.

Mile .5: Feeling great. I am glad I drank those seven 12 oz Red Bulls, three 16 oz Rockstars, 2 energy gel packs, muscle milk and six hour energy drink before the race. I feel great. I just wish I could turn the bass down on my iPod because the drum noise is over powering. Oh, that's my heart.

Mile 1: Are you fucking kidding me? It is only mile one? I take a swig of the super carb heavy replenishing juice. It should kick in soon.

Mile 3: I ran behind a tree and peed. Feel much better, but my ankle brace is too tight and my calf is starting to cramp. I wear the brace for an achilles tendon injury that happened a couple months ago. At about 40, my body went into debug mode, issuing regular fault warnings for parts of my body that never showed issues before. This ankle thing is one. I look around at my comrades running through the streets and see their various supports, band aids and implements. Their courage gives me strength.

Mile 7: There is someone holding up a board covered with gobs of vaseline and screaming "Vaseline, Vaseline." I don't know why he is there and doing this, but run on the other side of the street. Over the course of the race I will see many more of these guys. I think it is a cult.

Mile 12: MAN DOWN! Right before the medical tent a guy limps to the curb and sits down. He could not make it to the tent. Two men yell "Medic" - actually they yelled "Doctor" but it does not sound as dramatic. The doctor did not come to him, so two runners picked him up under his arms and helped him walk to the tent. He was put on a stretcher and evaced away. Over the course of the race there were a number of touching moments. I saw kids in school groups helping other kids with pats on the back and voices of encouragement, people pulling gels, and sprays out of secret pouches in their running gear to help other runners in need and even runners helping other runners to stretch. This war analogy makes sense.

Mile 13: Wow, I finished 13 miles. Shit, I have 13 to go.

Mile 15: Maybe I started out a bit fast. Not feeling so great. The drums aren't playing in my head anymore, but that only means they are no longer providing a cadence for my head. Hey, there's the Colosseum. I think about my wife and son standing at the end of the race and it takes me to the verge of tears. It is either exhaustion, or an unmitigated emotional connection. I think it is the latter. I trudge on.

Mile 18: The race starts at the foot of Universal Studios, goes up through Hollywood, moves through Korea Town and over to East L.A. At least I think so. In my myopic view, anything without a beach is East L.A. I am pretty sure this is the place though, as none of signs are in english and pinatas are hanging in front of the stores. People are lining the streets, handing out oranges, bananas and water. I reach into the pouch hanging on my back and pull out a scientifically balanced gel which amazingly, has the consistency and taste of Castor Oil even though it is made from nothing found in nature. Maybe an orange would have been a better choice.

Mile 20.5: I didn't know there was a combination Hoffbrau House and strip club in East L.A. Men and women are standing in front handing out little cups to the runners. Every other cup along the way is either water or gatorade. As I see every runner in front of me spit out contents, I realize it is beer. What a generous man that Sam is to give away all that beer.

Mile 22: Only four miles to go. I run more than that every day. Unfortunately for me, I don't run 22 miles before the four I run every day. I feel like those guys on the Discovery show about Everest. They only have 100 feet to go, but it can take hours, and even be too far to go. Four miles looks like a whole other marathon. I know running in the streets of L.A. is not summitting Everest, but dear reader, have you ever done either?

Mile 23: We are running up the sixth street bridge. Who in the right mind would think this is a good place to run up hill? My pace slows to very, very tiny steps. Very small people who cannot be more than 8 are passing me. Easily. My comrades are falling. Some are lying on the sidewalk. Others are slowing to a walk. More are stopped, bending over at the waste with hands on knees, resting in the manner my hockey coaches told us to never do on the ice. Young officers run by yelling encouraging words of support "less than a 5k left." You can do it.

Mile 24: I am approaching the banner for mile 24. My Nike + is way out of sync. It says I have already run 26 miles. I trust it. I love it, it supports me more than the city of L.A. It is telling me I have worked hard enough. "Enough is enough" it shouts. But war is hell. I can't let my comrades down. I must finish, even though they moved the finish line. I look up at the banner and fantasize it says "25" instead of "24." I am losing my mind. Shouldn't I care more about 26?

Mile 25: I push the power song button on the iPod. "What song do you want to hear?" comes from Skynyrd's live concert performance at Atlanta's famous Fox Theater. "Freebird" the audience responds. "I can't hear you." "Freebird" I could not agree more. The guitar refrain starts. This is no bullshit recording, it is the fifteen minute version. My feet start to move and my pace quickens to just under 7 minutes. I have no idea where that came from. Skynyrd is more energizing than exer gel. I fast forward because I have less than 15 minutes to go. I am crossing 6th Street on Los Angeles. I realize the race ends at 5th and Flower, so I am close. Wait, we are crossing 7th. Fellas, we are going the wrong way. What are you thinking. My feet are channeling Skynyrd and despite the exhaustion and golf ball in my calf, my feet are moving faster. The crowd is starting to build on the sidewalks and I am alone on the street, in my head. The cheers for the runners lifts my pace another notch. I am running at a six minute pace and quickly come up on the Mile 26 banner.

Mile 26: I would have kissed the banner if I could. Skynyrd gets into the hyper paced guitar riff near the end of the song. The crowd cheering and the music pumping drive me to a sprint. I look down at the iPod and I am sprinting at a pace in the mid 5's. Only two 10ths of a mile to go. I can stretch this kick to the end. Hubris alert, this time in my chest. It is going to explode. The debug sends an overload warning. Thoughts of this being a very bad place to have a heart attack at 42 run through my head. Skynyrd drowns them out. I take it down a notch, raise my arms, and cross the finish line.

The race is over. We made it through to the other side. My comrades' efforts encouraged me to make it through to the other side. They inspired me, they supported me, and now they are in my way, standing between me and my wife and son waiting in the family reunion area.