A Tree Falling in the Forest

When I was at Eidos I found myself in a room with Avi Arad, then CEO of Toy Biz. It was Toy Fair and he was trying to convince me to let Toy Biz make a second Lara Croft action figure. If you ever saw the first one, you would know why he was fighting a losing battle. Avi told me he wanted Eidos to partner with him to acquire Marvel. Toy Biz was going to buy it out of bankruptcy. The thought was intriguing because the Eidos business plan was partially modeled on Marvel. The prospectus I wrote for the NASDAQ offering in 1996 started with "If Marvel were started today, it would be a game company." Eidos was an IP company which happened to use games to inject intellectual property into the world's psyche. Once injected, we could move them anywhere - and we did with Lara. I spoke briefly about the Marvel opportunity with Charles and we both thought Avi was nuts. In hindsight, Avi was nuts, but he also acquired Marvel and not only turned the company around, but cr...

Thank you again to everyone who is coming to site. For those of you who don't make through the pile of words on the first page, here are the most popular buried posts: GTA MMO Game Objects are Securities OLPC: Negroponte Did A Great Thing The Game Business: The MMO Microsoft Is Cable Microsoft Is Cable Part 2 Blockbuster and Gamefly Are Enablers Gamestop Needs An Intervention What Really Sells What's Up With The Ratings: The Byron Review

GTA IV talk everywhere, including here. Time to take a breath, calibrate, and return. Some mental floss to help with the process: Mark Pesce explains things you never thought needed explaining and how technology fits in. Doug TenNape l can't be explained, but is definitely worth your time.

Apple elevated the tech market by changing our expectations. The company made consumers believe their electronics could be well designed and easy to use. Now it looks like they are changing advertising as well. Apple was always the only technology company to hit the mainstream with a simple, one note marketing message. 1984, the first iMac, iPod, iTunes, they all gave you a focused message in an entertaining way. When it came time for the switch ads, it took thirty seconds to make Windows look foolish. It seems like Lenovo finally got the memo. In their second blast across the bow - the first is here - Lenovo apparently sent this video to its Chinese suppliers. Lenovo really doesn't understand the Apple brand, but the video is fun just the same.

Every once in a while you come across an act of Hypocrisy so egregious, you have to laugh. I read an article on game politics about a mutual fund called The Timothy Plan , which call itself a family of mutual funds offering individuals a biblical choice when it comes to investing. If you are concerned with the moral issues (abortion, pörnography, anti-family entertainment, non-married lifestyles, alcohol, tobacco and gambling) that are destroying children and families you have come to the right place. The Timothy Plan® avoids investing in companies that are involved in practices contrary to Judeo-Christian principles. Our goal is to recapture traditional American values. We are America's first pro-life, pro-family, biblically-based mutual fund group. . The fund issued a press release indicating it would not invest Take Two Interactive because "it is releasing another video game that contains extreme sexual and violent content." Curiously, the release did not mention t...

Even though game budgets are going up and the time to contract with publishers is getting longer, console developers still rely, almost exclusively, on publishers as their sole source of revenue. The same market forces which drove film studios to seek alternative sources of finance are at play in the game business. But the money is not here yet. I started writing this as the first installment of the search for independent money for game developers. VCs are my starting point, because they have been circling the industry the longest, and even made some successful investments over the years. In the middle of writing it I heard Bing Gordon left EA to become a partner at Kliener Perkins, one of the top venture capital firms in the world. If you read N'Gai Croal's faq with Bing, you will see, as a partner in the vc which backed EA, one of the fathers of the game business as we know it is not going to invest in the games we play on the console. When I worked for Cooley Godwa...

A few weeks ago Eidos ( I can't bring myself to call it SCi) issued a press release indicating it was in takeover discussions with unnamed suitors. Rumor reports pointed to Warner and NBC/Universal. I thought it was a good idea . Then, last week Eidos issued a release indicating the acquisition offer was turned down and the company would need another 55 million pounds to stay alive. Viewing this from the outside, you could either say, Warner and Robert Tchenguiz came in at a bargain price, or, nicely played Eidos. A bit of history. . . Tchenguiz is reported to be the man behind SCi's takeover of Eidos in the first place. In March 2005, Elevation Partners' all cash offer lost out to SCi's cash and stock bid, for the acquisition of Eidos. He purchased a 15 percent stake in the company at the time. The valuation was within spitting distance of the valuation in the deal announced last Friday. Warner, didn't arrive until 18 months later, when it purchased a 10.3...

Stop what you are doing. Stop reading, and go download the Echochrome demo on PS3. The game is full of the "i" word. It is just like Portal without the guns. You know what, it is really nothing like Portal. That is the point. It is like nothing else out there and it is addictive. I read an article once where the author wondered what Escher would have done if he had access to computers. He would have built Echochrome. You know you had an Escher poster on your wall once. Go play.

I am sorry for David Jones and Real Time Worlds, and I am sorry for their investors. Sure, their MMO may be great, but the genre is about to be redefined. I am mixing fact with speculation and predicting future action, so the gaseous belch of speculation which follows may be completely off base, but . . . I wonder if anyone can tell me why GTA IV is not the next evolution of MMO. In the words of my ex Eidos boss, Charles Cornwall, the MMO market is roast duck or no dinner. You are Warcraft, or you are not making money. There are some points in between where people make a nice living, but it is not Warcraft "fuck you" money. It is also hard to imagine the Warcraft killer. Gamers just don't want to leave a game they invested so much time money and effort. Guilds may sniff around a bit, but they talk about the new game in Warcraft. Warcraft can only be trumped with a disruptive model. What happens if about 4 million people to buy your game over the course of a we...

A while back, in the middle of a conversation with N'Gai Croal I mentioned we put games on a par with porn. He liked the comment and asked me to flesh it out. I knew I believed it, but I didn't really know why. I sat down and wrote a piece which N'Gai was kind enough to publish on his excellent blog . If this post seems better than the others, thank N'Gai for editing me. So, thank you to N'Gai, and Here is the post: I once told N'Gai that society at large perceives games much as it does porn. My reasoning is simple: everyone looks, but no one will admit it. You would be just as likely to pick up a woman in the bar and ask her to come home to see your porn collection as you would to invite her back to see your kick-ass gaming set up. The likelihood of either achieving the intended goal is very low, and one would get you slapped before she walked away in disgust. Then again, after thinking it through, I may be wrong. You may be more likely to choose porn. Ap...

Where do these guys come from? This morning a new doom and gloom analyst report came out from Goldman Sachs about the game business. Apparently, for the first time in the history of the business, software sales will peak mid cycle. Thank you for the clarification Mr. Higginbotham. Don't listen to me though, this is what he says: Goldman Sachs analyst Robert Higginbotham has stated that video game sales may have peaked this year. And as one of the biggest beneficiaries of the video game boom, leading retailer GameStop may be negatively affected by a slow down, he said. "We see GameStop shares as poised for a pullback as industry growth remains on a path toward deceleration from its current peak," Higginbotham wrote, according to MarketWatch. Assuming his analysis is correct on the software side, which I will address below, apparently, Mr. Higginbotham does not believe Gamestop will enjoy any benefits from the inevitable price decrease in consoles. As I wrote in the l...

Nikki Finke was kind enough to pick up a post from my blog. In the preamble she described the game Grand Theft Auto IV as “loathsome.” I love Nikki, I love GTA, so I have to address the adjective. I could think of a lot of ways to describe GTA IV. Perhaps “mind boggling in scope,” “unbelievable achievement in game making,” “more technologically complex than the NASA systems that put a man on the moon,” or just “beautiful.” GTA IV will be released on April 29 by a division of 2K Games called Rockstar. The game is actually the sixth installment in the series, all were created by the same core group of people. At the hub are Sam Houser, Dan Houser, and Leslie Benzies. The three men, together with Terry Donovan started Rockstar because they wanted to make games they would want to play. Mario is fun and all, but why couldn’t you turn off the Sopranos, and turn on a game which did not insult your intelligence? Gamers were aging, but the industry still viewed its consumers as e...

Games get special treatment. Equating the game to an X rated flim, the City of Chicago decided to stop a bus promotion for Grand Theft Auto IV. A transit authority representative said: Over the years, GTA transit ads have come under fire in other cities as well. In 2006 Boston Mayor Thomas Menino and others forced the Massachusetts Bay Transit Authority (MBTA) to pull ads for GTA Vice City Stories. The transit chief there justified his decision by issuing a policy which equates M-rated games with X-rated movies. I am not going to get into the First Amendment issue, because it is complicated and others will do it better. I am also not going to talk about the comparison of M to X, which is just wrong, because many are addressing that as well. I just want to do a quick comparison. Here is the banned GTA ad: Here is a campaign for the Sopranos: The content of the Sopranos ad is more graphic than the one for GTA IV, and the content of the show is more graphic than GTA IV. The Sopranos ...

You can buy the anime on iTunes. In the fall, you can play the game.

Games are constantly being attacked for sex and violence - even though we have none of the first, and strictly control the second. Politicians, media, parents and crazy lawyers all attack the industry with a broad brush, sweeping kids together with adults, and M rated games together with E’s. The industry is diverse enough to accommodate Mario and Snake Plisken but the media and politicians still portray our market as one for children. The average aged gamer, who is 33 years old , probably enjoys playing Mario, but he also wants to play some Halo, a bit of GTA, some Call of Duty and a touch of Zelda. Just to place some perspective on the market, I pulled some information from The Entertainment Software Associatio n and the list of the top selling games from Next Gen . According to The ESA, eighty five percent of the games sold in 2007 were E, E10 or T. This equates to the G, PG and PG13 ratings in the film industry. The rating system is administered by a self imposed oversight...

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According to the Daily Mail, Eidos is in discussions with NBC Universal and Warner for an investment or acquisition. UK reporting requirements differ from those in the US and announcements of potential acquisitions of public companies must be made very early. I left Eidos in February of 1999 and have not owned a share in the company since 1999 - I wish I could say I have not owned a share since 2000, but I will save the discussion for another post. Eidos earned the tag "beleaguered" in front of its name. From about 2000 to 2005 when the game market was growing a rapid clip, Eidos market cap fell from over 1 billion dollars to under $100 million. There was a blip in the last couple of years when it looked like SCi was going to turn them around, but after running up as high as 700 million dollars, a string of quarterly losses drove market cap down to where it is today, at a slightly elevated 106 million dollars. The game publishers seem to have turned their backs on th...

The game analysis business is very competitive. They like to make important or controversial announcements to get some ink. As we see in the graphic I stole from Kotaku's " Analyzing the Analysts " post, historical accuracy does not seem to be an impediment to their continued pronouncements. But sometimes, analysts askew wild statements like "EA will postpone GTA IV" or "iPhone is not a viable gaming platform" in favor of an appearance of real live analytics. In this case, UBS's Ben Schachter established a premise, supported by a bunch of numbers to predict GTA IV sales. Unfortunately, he ignored some facts. Why cloud the model with real world facts, when your predictions can be so much more accurate without them? Schachter says the performance of GTA IV should be measured by tie ratio to the installed base. This is a great addition to the universe of video game analytics. Really. It is the first time I have seen it incorporated into t...

I have been reading the back and forth between writers and game designers sparked by Adam Maxwell’s gamasutra article . There is no shortage of vitriol or cultural elitism on either side. At one extreme, designers are saying writers are never useful or necessary, on the other writers are talking about the weakness of games stories. Did anyone realize in between calling each other morons and useless, they are not even talking about the same thing? Before the sides can work out their differences, they have to be within shouting distance of the same topic. Once they address each other, everyone will agree writers are a tremendous help to games, but they are a single element and their contribution will not make or break any game. I come to the party from the somewhat unique perspective of someone who both hired and represented writers to work on games. In these roles and from playing a lot of games – a lot of games – I learned there is one truism, a great game with a shit story is ...