Saturday, May 31, 2008

UTA, CAA, Endeavor: You Just Don't Get It Edition

I was traveling yesterday, so I picked up USA Today. It is nice to see the paper telling middle America the future of entertainment, because if it didn't, the country would never know what they really wanted. According to Marco R. della Cava, the country is crying out for television on the Web. Never mind your dual tuner TiVo enabled, surround sounded 60" plasma screened home theater experience, when you want content from the Coen brothers, you are going to watch it in tiny 2 minute segments on your computer. With broadband, you can even make it full screen. You see, in the future, people aren't going to want their content to take advantage of the unique attributes of the interactive, lean forward medium, they will be over the novelties of connections to others, and the mouse and stuff. They are going to want to see the same execution on the new, smaller, screen. Hence our film business' heavy dependance on the language of the stage. Oh yeah, that's right, the film industry does not film plays because it would be stupid.

The agents cited in the article are looking at the web as an outsourcing opportunity. Low cost production, low cost distribution. The funny thing about cheap content, is it looks like cheap content, regardless of the delivery medium. They are trying to bring their industrial revolution models to the information age and it just won't work. They realize the ad rates and the consumer commitment to the property is lower cost as well and they cannot afford to play in small dollar market like the web, so they look for exit opportunities, rather than self sustaining content. Their only opportunity to make sense of the business is to leverage the creator or the content off the web, a feat which is very rare. Andy Samberg grew from the Web, but as Michael Yanover of CAA said in the article, talent is finite and still hard to find, and property migration is even tougher - look at Quarterlife. They are cribbing the venture capital business, but building it around a hit driven model rather than leveragable technology. The Web has great potential to expand their businesses, but they are not looking at it as an end point.

People are turning television off in droves. Audiences are falling. But when people ignore the 150 plus channels on their big screen, it is not for Funny or Die, or Prom Queen and it is not always for the Xbox 360, PS3 or Wii. They are playing Facebook apps ("widgets"), listening to music on Myspace, or starting their own communities on Ning. When they consume filmed or pre-produced entertainment, the repeat visitors are going to Alternative Reality Games ("ARGs") which leverage community, interactivity and various delivery media. They have to. You can only watch so many "America's Funniest Home Video" clips, even if they are made by Will Ferrel. When the agencies look at the web, they see another pipe into the home. When people who came of age with a vibrant Web in place look at the Web, they see a pipe out. They want to use both. The winner in this market will be the one who figures out how to maximize consumer engagement and harness community. Neither will happen from a unidirectional approach. ARGs and widgets are not the only answer but they are sure are teaching us a lot about the future.

Creators like Matt Wolf, Jordan Weisman and Elan Lee build ARGs. You may not be familiar with these names, but you will. Disney knows Matt, he was responsible for the only Emmy in the history of ABC Family when his ARG beat offerings from NBC and CBS last year. Steven Spielberg knows Jordan, he worked with him on the Beast 7 years ago. Rather than spitting content at people and hoping they pass it on virally so after a year, the aggregate viewership is equal to the first ten minutes of Gossip Girl, these guys bring people together around an intellectual property. Consumers of video content spend a couple of minutes watching it and then send it to friend. Consumers of ARGs spend hours upon hours in the ARG world, and bring friends into the experience, building community and value in the IP.

ARGs start with rabbit holes, just like Alice in Wonderland, the first challenge is finding it, the second is succumbing. Some are more apparent than others, but because it is a challenge, people who find them tend to brag, or virally spread word of the ARG. In last season's Heroes, the rabbit hole was on a business card exchanged on camera. In this summer's Hellboy 2 ARG, the rabbit hole was a real life protest and graffiti campaign and the New York Comic Con. Once identified, consumers receive content and story bits via all possible media and in the physical world. Viewers may find pieces of the story in youtube videos, but they will also get Twitter messages, read blogs, find facebook and Myspace profiles, fake websites, and in some cases, even get phone calls or items in the mail. ARG's engage communities in ways no unidirectional media can.

In last year's Emmy Award winning ARG, Ocular Effect, hundreds of members of the audience got together of their own accord, and signed, and mailed in a birthday card to Faith, the lead character, commemorating her fictitious birthday. Faith thanked the audience for the card in a video on her blog, leading to more forum and posting activity from the audience who all felt more deeply invested in the character. More recently, The HETFET community came together spontaneously, and without the urging of the creator, or Universal, the studio behind Hellboy 2, staged Save the Trolls rallies in the real world.

The community forms a "hive mind" around the ARGs and players talk in forums and build wikis telling others how to navigate the ARG. Some these can be seen at The Sky Remains, HETFET. This may sound really complicated, and some some consumers just want to be entertained and don't want to play the game, no problem. During the game, consumers can see the videos online on youtube, or read the blogs from the various participants in the experience. At the end of the experience, the ARGs are often revealed in a walk through, so those consumers who are not interested in playing the game, can be entertained.

The Alternative Reality Gaming Network, tracks on-going ARGs and introduces new ones. Right now, they are tracking a dozen different games under their "What's Hot" section. Some of these are marketing efforts, supporting films like Batman and Hellboy 2, but others are stand alone. They can stand alone better than video content because the medium defines itself as reality emulation, product placements and ads are unobtrusive. Rather than the sidebar ads, or ads preceding content like the Hollywood sites. A blog created soley for an ARG will have ads in the normal positions for an ad. Simulated webcam pickups can integrate consumer products consistent with the character. There is nothing unusual about a girl picking up a coke and drinking it during the video, it happens all the time in real life.

The core difference between an ARG and the videos described in the USA Today article is the treatment of the IP. In the videos, the IP does not exist beyond the video. There is a story-line, written for the specific purpose of a story arc, cut into 10 minute segments. If people like it, more will be made. The ARG approach is something people like Heroes' Jesse Alexander and MIT's Henry Jenkins refer to as "transmedia." While the Hollywood folks are building a single circle, growing in circumference to reach audiences in all media, transmedia folks build a venn diagram of media exploitation, overlapping on the the IP.

The IP exists independent of all media. Each media exploitation is tailor-made for the extant media. Rather than a Coen brothers video releasing on the Web and then being stitched together to show up on television. The Coen brothers IP would be interpreted by an ARG creator and turned into an line experience, the Coen brothers would direct a film or television show, a novelist would write a book, a graphic novelist does a Manga or graphic novel, People magazine covers the production and more. Each element is unique and stands on its own, telling a different story. The consumer need not touch the property anywhere other than the media they love best, but if they so choose, they can enjoy a rich experience by consuming them all. Moreover, each audience segment feels invested.

I went off a bit on ARGs but they are certainly not the only way to wrap your arms around the new opportunity. Social network applications, or widgets are another significant draw from traditional media. As the founders of Social Gaming Network and Zynga reported in the videos in this post millions of people are getting together and playing games inside Facebook, Myspace, bebo and other networks. Sure you say, everyone under 30 loves this shit. Not really, they are on line, but they are playing Scrabulous with their grandparents back home. When someone finds a new game they enjoy, they are able to invite their friends into the game with a simple click, no phone calls, no emails, not even an IM required. As these trusted agents make their referrals, they build out the game companies network. I did not use the last word by accident. SGN and Zynga are not just encouraging word of mouth marketing to point people to a tv show, theater or webisode, their consumers are doing the heavy lifting in the construction of the networks. Unlike the unidirectional video sites, each consumer registers to play the games, and potentially expands the network to each of their peers. The game company serves the game requested to the registrant, but can also apply Amazon-like CRM to introduce new games and advertising through the network, as well as the videos created by the Hollywood folks. Our friends at the agency may argue their ability to use this model in the unidirectional world of their content, but their argument would be tenuous at best.

Funny or Die's viewers may be in the tens of millions in the aggregate, but those are one shot views, disconnected views across the site. SGN claims to have 50 million applications installed, and each one of those is connected. A cable operator would refer say 50 million home are available. It is truly a network, but unlike any network we've seen before. As a consumer if I want to see Ratboy and Stinky Girl, or some other Holywood created video, I find it and click through to their site. If I want to play Scrabulous, I go to MY site. Big difference. The agents can rest assured their unidirectional content will be more entertaining than content created anywhere else, but they can be just as assured they will be delivering through networks owned by other people. They are painting themselves into the same corner they stand in today. All the content, none of the access. If they controlled the channels, we would not have had strikes last year.

Our agency friends further exacerbate their problems with a continued reliance on a dying model, ad supported television. The sites are sponsor supported. If cable fragmentation hurt network sales and cable is not worthwhile from a revenue standpoint, what do you think web fragmentation will do? Yet, even though none of these applications have shown a significant return, they still rely on sponsors. The widget guys show a myriad of additional revenue streams. They are able to sell digital objects, upgrades, added utility and a ton more things of value to the community. Oh yeah, and eventually, access to their channels to the Hollywood guys.

If the agencies want to profit from the new opportunities, they have to stop thinking evolution and more revolution. Television is a solo experience. A show can build an audience, but it does not build a connected community, and with very few exceptions, the community has no impact on the show. The audience watches, and then shares around the water cooler the next day. The web is about community. Real time community. I can feel impotent in real life, I don't need my computer tell me I have to sit and listen to what someone else has to say. My computer empowers me and let's me join in, my entertainment should as well.

The guys given short shrift at the end of the article see it, we should too:

To the UTA crew the clip is funny — and a source of frustration. Fatal Farm, the L.A.-based duo that produced the video, has resisted UTA's overtures to sign a deal.

"We're working on something right now, and prefer to talk later rather than get distracted," says Fatal Farm's Zach Johnson, 25.

That attitude might seem foolish to some. But it's a sign of confidence that springs from taking a look around at Hollywood's changing landscape.

Just ask the Handsome Donkey gang, whose group meeting places have gone from coffee shops and living rooms to offices within the Disney empire.

"When we first started getting attention, people would say, 'Hey, you've got a great steppingstone into the world of real entertainment,' " Greenberg says. "But from Day 1, we never felt the Internet was some sort of proving ground.

"It's a new platform, period."

Bourne Conspiracy: First Reviews Edition

The first review of Bourne Conspiracy is in, and they confirm, it is not your typical movie game.

As the bold-faced centerpiece of The Bourne Conspiracy, the taut and intense melee combat does a superb job of tying the whole game together. Combat in Bourne puts an almost oppressive pressure on you due to its penchant for brutal impacts and visceral takedowns. Excellent camera-work and lighting show off the beauty of Bourne's graphics engine as well as the designers' keen grasp of photographic and cinematic composition. Film geeks will also appreciate the game's mindfulness of a cinematic concept called "mise en scène": the ability to assemble a scene or shot that takes in all necessary focal points without drawing too much attention to the fact that it's being done -- or, put simply, a attempt to ensure that everything in its correct place, from a visual standpoint. . . .
At around 10 to 15 hours, The Bourne Conspiracy isn't exactly a brief experience, but its addictive and gratifying combat can certainly make it feel so. As visually appealing as the game's graphics are, they are dwarfed by the entrancing core melee gameplay... which is no small feat. Whether or not you follow the films and books is irrelevant to your potential enjoyment of The Bourne Conspiracy, because it so brilliantly communicates the story's themes. The resulting combination of fierce fighting, fantastically integrated interactive cut-scenes and just plain awesome graphics punctuate the sad story of this amnesiac elite operative in a thoroughly entertaining package.

If you prefer mainstream reviews, this comes from The Wall Street Journal:

The game The Bourne Conspiracy, based on the popular spy-noir novels by Robert Ludlum, hopes to build off the fanfare from last summer when the third part of the film series, "The Bourne Ultimatum," hit theaters. The game captures the manic desperation of its titular hero, Jason Bourne, as he attempts to reconcile his past life as an assassin. Conspiracy, to be released June 3 for Xbox 360 and PlayStation 3, relies heavily on ingenuity -- you can use Bourne's instincts to turn parts of your surroundings into weapons. I thoroughly enjoyed dashing through the hallways of foreign state buildings, wildly looking for a fire extinguisher to double as a club or dodging policemen. Conspiracy is also fueled by hand-to-hand combat, a refreshing change from the ubiquity of first-person shooters . . .

Movie-based games can't depart too far from the films that inspired them because they typically reuse the same characters and loosely adopt the same plot. There have been experiments to infuse such games with new content such as Enter The Matrix, but the best games of the genre, such as Bourne, know when to borrow and when to bail.

I haven't seen a review say this sort of thing about a movie game since Chronicles of Riddick . . . also Vivendi.

It comes out on June 3, download the demo now, a million people have, buy on Tuesday.

Thursday, May 29, 2008

Balla Tounkara: Social Gaming Revolutionary Edition

The gentlemen in the video above is Balla Tounkara. He is a 40th generation Kora player. No, it's not a typo, 40th. He plays the Kora because he was "born into it." In the US, where tracing your family back a handful of generations is unusual, an unbroken line of 40 generations is incomprehensible. The instrument is the predecessor to the harp, and the one he plays has his village in Mali painted on the front. The village hasn't really changed much since his ancestors started to play, and neither has the dissemination of the music and message. His family line spread the word of the Kora and makes as many people happy as they can with the music. Mr. Tounkara chose to go to New York, and "platform" his music in the subway. He serves his music to millions of people weekly, as they walk through the subway. If they are engaged by the free sample, they will stay and listen and then they can buy his CD, allowing him to retain them as a customer. If they buy the CD, they may play it in their home, friends will hear it, and based upon this trusted agent referral, they will buy the CD too. He understands from a financial standpoint, the music and his brand have no value until millions of people know it. Once they know of him, it has financial value.

Mr. Tounkara's model is being employed by social game companies, the hottest investment area for video games. They just figured out a way to do it from a location without a urine smell, and it is about the most exciting new development I've seen in a long time.  

The market leaders, Social Gaming Network, and Zynga raised USD 15 million and USD 10 million, respectively, from marquis venture capitalists.    The companies employ an "if we build it, they will come" model to revenue, but, at least from these Kara Swisher interviews, it sounds like Marc Pincus of Zynga knows exactly where he is going.  

Shervin Pishevar of Social Gaming Network did raise more money than I did last week, roughly USD $15 million more, but he lost me when he went buzzwordy.  I trust the business model is better than the interview.   Mr. Pishevar's business includes original IP, an open platform with API's distributed to developers and eventually, and advanced CRM system to match consumers to appealing products.   He hopes to make money through advertising and object sales.   He loses credibility when he starts talking about EA 2.0 and Pixar quality.  He is not really doing either. EA makes tent pole console games and Pixar's pre rendered animation will always be better than his. Neither factor detracts from his company and he should drop them from future interviews. He seems to think his games will eclipse the existing business. He does not seem to realize his "product" is his customer base, he is an ad sale play, not the games. He has said, at peak usage, Warbook, his top game, generates USD 100,000 in sponsorship.

Marc Pyncus makes a lot more sense, maybe it is the media savy which comes along with having handled startups before, maybe it is a better business. He is able to identify his audience, his revenue streams and his games. I may be drinking his Kool-Aid, but I like the reference to the Wii as inspiration for the company. He is recognizing the reason for the Wii's success - the lack of interface - and applying it to the company.  At its core, he is making good games. Good enough for people share with friends.  Good enough for them to be his completely uncompensated sales force.  Of course I am a bit jealous of his action, I played the Wii the same time he did and all I started was a bigger game collection. He is making games which will drive the growth of his distribution channel and at the right time, will welcome existing publishers into the channel. Mr. Pyncus knows, he is making television to the publishing world's film.

In the history of media, every new medium or distribution channel is initially viewed as a threat, until the market realizes it actually expands the existing media. Recorded sound was a threat to live performance. Radio was a threat to the recording industry. Film was a threat to theater. Television was a threat to film. Recording devices were threats to music and television and DVDs were a threat to film and television. In each case, the latter expanded the customer and financial bases of the former. When the distribution is robust enough and the base is large enough, these channels may create the secondary and tertiary windows we are missing today. In some cases, even the primary window.

When viewed in a compare and contrast mode, anyone in a developer should be looking up from their darkened cube, and away from their monitor, seething with envy and figuring out how to get in.   You can think it, and have it off your desk and playable in weeks or months.  Crunch?  What crunch? 

I saw this in action at DICE. I was standing with a client and we were talking to a small developer. These guys just finished an XBLA title. My client is in the business of making 8 figure console titles.
"We invested our own money and it took a couple of months, but we put the title up on XBLA."
"Yeah, how did it do?"
"So far we have returned about 10x on our investment."
"Yeah, it was cool, but now we want to get into front line console games."
When I got into the business games took weeks and months to build and often had budgets in the 5 and low six figures. People were on and off the title quickly and the thing made it to market. Now it takes years to make a title and huge amounts of money. The social gaming space brings back the best aspects of the game business, with some bonus. Even a year ago, once you made a game, you put it out on the web, planted some seeds and hoped it spread virally. Today, you can make the same game inexpensively and if it is a hit, the community does the work for you much more efficiently. In a matter of days the game can be played by hundreds of thousands of people. Every invitation to play is a trusted agent referral. If it doesn't work, throw it away and start over again. Their entire budget for the company is less than the costs of a single front line console game.

The reliance on the social networks, is really a double edged sword. As a lawyer, I always get nervous when you rely on a distribution channel without a contractual relationship. Sure, there are no contracts for web distribution, but the web is democratic. These guys are operating on a metalayer to the Web. Facebook can arbitrarily decide to bar applications which share between social networks, change advertising sales rules, or buy the market leader and ban everyone else. For support, look what happens to the SEO market every time Google decides to change its page rank formula. The other edge of the sword protects these guys. There are tons, and tons of Facebook apps out there. A lot of them don't work. Non-working and substandard applications killed the game business in the early eighties and they will kill the Facebook app market. You will not accept an app if the last five you used crashed or did not work- as many do today. The game market came back when Nintendo committed to review and approve every piece of software on its platform. Facebook will have to follow suit. The likely beneficiaries, will be the guys who got in early, and branded. These two and to a lesser extent when it comes to games, Rock You and Slide are already in. Of course the market is is still very young, and any new entrant is only one game away from passing these guys, but a "Jamdat." will emerge from the market.

The other issue is revenue.  Facebook itself does not make money.  Eric Schmidt just said Myspace is a disappointment in terms of ad revenue.  Media buyers won't buy until performane is proven. These guys are establishing matrices for the ad buyers to establish value.  Some money may be coming in, but Mr. Pishevar says, they are in tests right now. They also say they are trying object sales.   Object sales work for hardcore gamers, but if you are not really committed to a game, will they work?  With most of Mr. Pincus' audience being 50 year old women, do they have a consumer base?  The poker chips are working in one segment, but does it scale?  It sounds like they are both throwing a bunch of shit up against the wall to see what actually pans out.  Either of these may work, as well as IP rights, channel access and things we can't even think of.  If you look at what Henk Rogers did with Tetris, one game alone may be the answer.  

If your head is spinning as much as mine was after watching these interviews, then go back to the top and listen to some Kor.  It helps. . . . and tell a friend. 

Game Reviewer's Bill of Rights: Treaty Edition

MTV blogger Steven Totilo made some waves with his release of a proposed Game Reviewer's Bill of Rights. I can possibly accept the idea in principal, but I think a treaty is more appropriate than a Bill of Rights. He shouldn't settle for a unilateral grant from the publisher, because what the publishers give, they can take away. Perhaps he should think about a treaty like START, or the Kyoto Accord. Having been on the receiving side of more than my fair share of reviews, I believe a treaty may be welcome.

Developers and publishers may agree with the requests, so long as they are met half way. Placing myself in the position of mediator, those who know me know I am politically oriented enough to handle the task, I could imagine responses to his proposal providing:

Item 1: A final, boxed copy of a game will be provided to a reviewer prior to the writing of a review
Item 2: The review copy of a game will be made available to the reviewer at least a week prior to a game’s release
Item 3: Developers and publishers will not be present while a game is reviewed
Item 4: Reviewers will be given access to a game’s online mode during the review process
Item 5: To be determined — this is a rough draft

Item 1: A final, boxed copy of the game will be provided to a reviewer prior to the writing of a review.

No problem at all, so long as you don't mind reviewing the game after it is released. As mentioned in the article, many times, publishers don't even have final copies of the game until the thing is already on the shelf. You can't get what they don't have. I certainly understand why you want it though. In the effort to share the same experience as the end consumer, you too want the trophy to put on your shelf and manual to ignore. Having the disk alone, even though you got it before you friend, makes your shelf-top pokemon collection of boxes smaller than your friends, and size matters. Of course, some of your less work oriented brethren may want to boxes to use for the actual review, so they can avoid the tedious task of actually playing the game . . . which gets us to our next point.

Item 2: A final review copy of the game will be made available to the reviewer at least a week prior to a game's release.

This sounds fair enough. One small request in exchange, play the game before you review it. There are reviewers out there who think the publishers don't know they didn't finish the game before writing the review. Before you blast me with "I've never written a review for a game I didn't finish," remember, you are asking for an agreement on behalf of your responsible self, and your brethren, who are not always as ethical as you are. We can tell how far you played in the game. Some reviews miss whole feature sets because they weren't revealed until a few levels into the game. Maybe the game was not compelling enough to drive you to the next level, but it is your job. You picked it. That's why they call it work. Sometimes, even game play can be work. Roger Ebert sits through bad movies. If the game is so bad you can't bring yourself to proceed, say it. Don't just go into a free expression exercise about how deeply the game sucks, grabbing random elements from other reviews or the preview you did a few months ago. We get your writing skills are above average, if they weren't you wouldn't be published. Accuracy is good too.

Also assign a reviewer who doesn't hate the genre. They don't have to like it, or be familiar with it, but actively disliking, could taint a review. This most recent review on Destructoid comes to mind. Granted the guy was forced to play for only one supervised hour (see below) but was a review containing these statements really necessary:

Due to the circumstances and the fact that racing games are not my thing at all, this review will be ungraded. . .
Overall, GRiD is something I'd recommend to hardcore racing fans. I am not a hardcore racing fan though. I do not recommend this game to myself, and instead recommend porn.
Dirty, squalid pornography.

I would rather see a Hunter Thompsonesque article about how stupid Codemasters is for only giving you an hour to play the game and expect a review, than an expression of misplaced anger against the game.

Item 3: Developers and publishers will not be present while a game is reviewed.

Sounds fair, so long as the reviewers indemnify the publisher against release of any copies of the game which make it on to the web. You will also guaranty the reviewers' mother, brother, sister, roommate, significant other, neighbor, office mate, drinking buddy or object of their affection whom they are trying to impress with their station in life does not see the game. Mr. Scott points to the piracy concern in the article, but piracy is a broader statement for all the other threats to the secrecy surrounding a title. The publishers like to control the roll out of information. It keeps the press writing stories. You guys always want new stuff for articles. You want to tell the world the game is coming with exclusive coverage a year before release, but then if there are no new features to discuss, you won't cover it again at launch.

I understand, sometimes access to a game is just too exciting not to share. I am also sorry Mr. Scott must suffer for the sins of his brethren, but they do not all share his integrity when it comes to NDAs. Information flow is the reason for the dramatic correlation between very large release, and chaperoned review. The bigger the game, the more likely the leak and the more likely you will see a chaperoned review.

On a side note, think about the first thing you do when you pick up a new game. You try to break it. How far can I run? What happens if I shoot the guy in the face? What do the textures look like up close? You know the drill and don't tell me you don't do it. If I give you a DVD of a film, you can only watch it one way. Slow it down frame by frame and you still won't see anything other than what I intend for you to see. If publishers give you the game to take home you will find errors, glitches, bugs, weirdness. After Q/A on a major release, there is nothing left which will detract from game play but there are probably things subject to being blown out of proportion and misdirecting reviews. As a publisher, it is much better to be there to keep you on track.

Item 4: Reviewers will be given access to a game's online mode during the review process.

Okey dokey. Who are you going to play against? The game hasn't been released. You said you don't want publishers involved when you reviewing, so I guess you will play in your office. Sounds fair, so you will want 60 copies of Resistance 2 a week before it comes out? Of course many reviewer argue exclusive reviews are wrong, so 60 for you, 60 for each of the other 30 or 40 other reviewers. . . I don't see any problem with several thousand copies of the game floating around in the ether prior to release.

I am sure arrangements could be made to play the game in on line sessions, kind of like the late betas of Blizzard games. All you would have to do is agree to certain clearances and playing in a monitored environment, directly in conflict with item 3 . . . I feel myself spinning into a vortex . . . can't get out. . . can't get out. . .

Item 5: To be determined . . .

This category can be filled in during the face to face negotiating sessions on the treaty. . . I can't wait for the meeting.

Wednesday, May 28, 2008

Mainstream View of Gaming: Rock Hero Edition

Nowhere is our inward focus more apparent than this clip from the D conference. Bobby Kotick is introducing Guitar Hero World Tour and Kara Swisher of the Wall Street Journal says of the new installment of the genre creating franchise: "Called Rock Band I think. . ." It is all the same to them.

Check it Out: Way Too Much Time on Their Hands Edition

Every once in a while one of those joke email blasts has something really cool.

Energy Drinks are Worse Than Games: Real Science Edition

A new study indicates energy drinks can trigger the same behavior as other studies say are triggered by games:
In March, The Journal of American College Health published a report on the link between energy drinks, athletics and risky behavior. The study's author, Kathleen Miller, an addiction researcher at the University of Buffalo, says it suggests that high consumption of energy drinks is associated with "toxic jock" behavior, a constellation of risky and aggressive behaviors including unprotected sex, substance abuse and violence.
Imagine the impact of telling a high school guy energy drinks lead to sex. I bet sales will go way down. It's good to be out of the headlines for a second. The drink studies get the benefit of an intelligent interpretation of the data. Rather than equating correlation to causation, they identify the attraction to energy drinks as an indication of personality type.
The finding doesn't mean the drinks cause bad behavior. But the data suggest that regular consumption of energy drinks may be a red flag for parents that their children are more likely to take risks with their health and safety. "It appears the kids who are heavily into drinking energy drinks are more likely to be the ones who are inclined toward taking risks," Miller said.
While this concept is hinted at in some of the game violence studies, it is never spelled out so clearly. The only unanswered question is whether drinking energy drinks while you play Halo will cause more violence, or cancel each other out.

It Was Time for "The Talk": Parenting Anti Piracy Edition

Yesterday I had to have "The Talk" with my son. I walked into my 12 year old son's room the other day and was shocked by what he was looking at on-line.  He found a site loaded with torrents of whole, cracked, console games.

"Dad, isn't this great? Look at all the games we can get for free. How do I get them?"
"You don't, it's stealing."
"No it's not. It's downloading, they are right here on-line."
"Trust me, it's stealing. The food you eat is paid for with money from game sales. You are stealing from us. Do you want to eat tomorrow?"
"Then don't download those games. . . . and tell your friends."

I went through this with him once before.  I was really proud of myself for doing it, and delusional to think it was sufficient.  When he was about 6, my son heard Gordon Lightfoot's "The Wreck of the Edmund Fitzgerald" on a television show and really enjoyed the song.  He wanted a copy of it.  It would have been really easy to go on Kazaa and download the song for him.  It was only one song, but instead, I made a point of getting in the car with him and going to a record store to buy the CD.  We found it in the rack, went to the counter and paid.  I was trying to make music tangible and implant the copyright concept.  It worked with music, and it even worked when he wanted to watch the shaky, hand camera version of Cloverfield the day after he saw it in the theaters, but the concept didn't reach quite to games.  Games are the things he plays for free on line. 

My son would never walk into a store and steal a boxed game off the shelf, but it is hard from him to conceptualize the idea of a downloading games being theft. The Web is full of free to play games and demos and the downloads don't feel an awful lot different than the full versions. Sure, Direct2drive or Gametap's pages may be a bit prettier, but Amazon and Google aren't really all that.   It is our job as parents, and as an industry, teach kids downloading cracked games is wrong.  Fortunately, we have the benefit of lessons learned from other industries.

The music industry's approach to stealing evolved over the past few years. They started by trying to prosecute the worst culprits. It did not really work. The RIAA is made up of the labels, so in essence, the labels were suing their customers. Customers who did not really feel they were doing anything wrong. The industry then moved to anti-piracy methods and download systems more complicated than stealing.  Some, like Sony's even broke your computer.  These didn't work either. Steve Jobs realized the people stealing music were paying more money than ever before to get music, they just weren't paying it to the labels.  He planted his stake where the money was being paid.  When iTunes came along and made it easier to be honest than steal, lots of people went straight. Steve Jobs employed it, but the concept is really a music market adaptation of the Laffer Curve, and it worked.  iPod boxes say "Don't steal music." Sure, it's a bit self-serving, but the labels get the majority of each dollar from Apple. Apple's message was joined by the RIAA with its mainstream anti-piracy campaign.  Someone with a vested interest, took advantage of the market inefficiency, and fixed the market in the process.  Downloads are still a huge problem to the music business because it is hard to get all those animals back in the barn once they have seen Paris, but alternative revenue streams emerged.

The MPAA's members distributed much bigger files than their music brethren. File size and bandwidth constraints provided more time to see how the market was unfolding and focus on more effective tools. Again, piracy is an issue, but it really did not make sense to sue your consumer. Along with embracing easy to use digital distribution, the industry immediately employed an anti piracy campaign. Trailers filled with movies stars and blue collar working folks told the audience file sharing is stealing. Again, the party with the vested interest took action to sustain the industry.  The message got out early and while films are still posted on line, there is a stigma associated with file sharing of films.

When it comes to games, we address piracy issues at a macro level, but not at home. ESA goes after all those nasty boot leg disks coming over the border from China and Russia, they even send cease and desist letters to heavy file sharers, but we aren't really doing anything on the propaganda front.  We must own the hearts and minds of the consumers and stop the action before it happens.  What are we doing to teach our children games are not free? What are we doing to put a face on the victims of piracy? We must start early. As parents, we must teach our children to be aware of illegal downloads. We monitor their on line presence to make sure they are not accosted by porn and predators and we monitor their game play to make sure they are playing age appropriate games, we must also make sure they know the difference between a demo, a free download, and a cracked piece of software. From a very young age they must view the cracked software the same way as they view an item on a store shelf.  As an industry, we should steal one more thing from the film business, the anti-piracy PSA campaign. Let's put a face on piracy and show gamers who they are stealing from. It won't stop them all, and it won't happen over night, but over time, we can win. It worked once before when this guy threw a pebble in the pond:

By William Henry Gates III
February 3, 1976
An Open Letter to Hobbyists

To me, the most critical thing in the hobby market right now is the lack of good software courses, books and software itself. Without good software and an owner who understands programming, a hobby computer is wasted. Will quality software be written for the hobby market?

Almost a year ago, Paul Allen and myself, expecting the hobby market to expand, hired Monte Davidoff and developed Altair BASIC. Though the initial work took only two months, the three of us have spent most of the last year documenting, improving and adding features to BASIC. Now we have 4K, 8K, EXTENDED, ROM and DISK BASIC. The value of the computer time we have used exceeds $40,000.

The feedback we have gotten from the hundreds of people who say they are using BASIC has all been positive. Two surprising things are apparent, however, 1) Most of these "users" never bought BASIC (less than 10% of all Altair owners have bought BASIC), and 2) The amount of royalties we have received from sales to hobbyists makes the time spent on Altair BASIC worth less than $2 an hour.

Why is this? As the majority of hobbyists must be aware, most of you steal your software. Hardware must be paid for, but software is something to share. Who cares if the people who worked on it get paid?

Is this fair? One thing you don't do by stealing software is get back at MITS for some problem you may have had. MITS doesn't make money selling software. The royalty paid to us, the manual, the tape and the overhead make it a break-even operation. One thing you do do is prevent good software from being written. Who can afford to do professional work for nothing? What hobbyist can put 3-man years into programming, finding all bugs, documenting his product and distribute for free? The fact is, no one besides us has invested a lot of money in hobby software. We have written 6800 BASIC, and are writing 8080 APL and 6800 APL, but there is very little incentive to make this software available to hobbyists. Most directly, the thing you do is theft.

What about the guys who re-sell Altair BASIC, aren't they making money on hobby software? Yes, but those who have been reported to us may lose in the end. They are the ones who give hobbyists a bad name, and should be kicked out of any club meeting they show up at.

I would appreciate letters from any one who wants to pay up, or has a suggestion or comment. Just write to me at 1180 Alvarado SE, #114, Albuquerque, New Mexico, 87108. Nothing would please me more than being able to hire ten programmers and deluge the hobby market with good software.

Bill Gates
General Partner, Micro-Soft

Guitar Hero: Jump the Shark Edition

When I was at Eidos we got calls all the time to move Tomb Raider to new platforms. We didn't because we did not want to damage the brand by giving consumers something less than they came to know and love on the console. Sure, it happened later, but did you see Eidos' financials when they made the decision? Is this thing going to capture the magic of the console version? Was it the pushing buttons part we loved, or the looking ridiculous to anyone watching?

The good news is you don't need as much musical ability as you do to play this one from Ubi:

Jam Sessions: Producer Walkthrough.

Wednesday, May 21, 2008

Ownership: Have Your Cake and Eat it Too Edition

I know this sounds kind of preachy but the issue won't go away.  It rears its head in every deal. The most common "deal breaker" issue is ownership. I hear it over and over again from both sides. Publishers and developers alike consider ownership as binary. You either have it, it or you don't. This is just not the case.

My realization came from a September 1997 Forbes Magazine Article sidebar
Lucas may own The Empire Strikes Back and Return of the Jedi outright, but Spielberg virtually owns the cash flow from The Lost World and Jurassic Park.
Read it again and you will quickly get the point. When it comes to the IP, Lucas owns everything, Spielberg "owns" nothing, and they are both billionaires who control their IP. To put it in game terms, Scott Miller owned Max Payne, Sony owned Jak and Daxter, Scott Miller and Jason Rubin are both rich. Owning IP is much different than owning a pair of shoes.  In law school they taught us ownership is like a bundle of sticks. There is a stick representing the right to use, another representing the right to modify, another still is the right to receive revenue, and so on. The number of sticks and fragmentation is actually infinite. Both sides should only worry about the sticks they need and leave the others alone as motivation. 

Lucas owns Star Wars because he put his own money up to make the films and sought only distribution from studios. It was important to him make only what he wants, when he wants - including Jar Jar. If Empire Strikes Back failed at the box office, he would have been bankrupt. Spielberg gambles as well, but he plays with house money. His partner studios invest in his films and give him the same freedoms as George Lucas.  Even though Spielberg does not own E.T, Universal cannot make a dollar without giving him a piece of it. More significantly to many game developers, they cannot make another E.T., or Jurassic Park or other Spielberg feature, without his permission. 

Both scenarios work, but a developer must consider what they really want to do with their lives. From a revenue standpoint, Lucas' receives a majority of the revenue and exercises a majority of the control over his properties but bears more downside risk and infrastructure cost. Spielberg receives a smaller cut than his studio partners (of course he is an owner of his partner Dreamworks), but has no downside risk, no infrastructure cost and works on more projects.  Some may view Spielberg as having the worse financial deal, but in practicality it all balances out. Because the studio partner makes a majority of the revenue, they are more inclined to push a Spielberg project. Given the choice between a high margin opportunity, and a low margin opportunity, it is natural, reasonable and good business sense, to pick the high margin opportunity.   Lucas must support his own market and find ways to motivate the studios to support him.  It is easy with Star Wars because it is pre sold, new projects are harder. In the publishing world we see this when internal projects are given distribution preference over affiliate label products.

Back to video games.  When a publisher says "we want to own the IP" what they are really saying, is we are investing an awful lot of money and effort in this property and we don't want it to walk out the door with you after launch, and if you think we are going to bid for it on the open market, you are nuts.  They are also saying a bit of "we don't want you to devalue the property through inconsistent exploitation in other media." It would suck for us if you kill the franchise character in a feature film. When the developer says "we want to own the IP," what they are really saying is "we want to benefit from thing we create." We don't want you to fuck it up with a bad sequel or derivative work. We don't want you to terminate our agreement and have someone else finish it badly. We don't want you making a bad movie and ugly action figures. What they are probably not saying is "we want to build every sequel and version of this game for the next 20 years." Fortunately, the publisher and developer positions are not mutually exclusive.  The sticks can be allocated to meet all objectives. 

The publisher's position is actually good for the developer. In every case, the publisher acting in its own interest has more market impact than a developer. In most cases, the publisher wants the people who created the property to remain involved.  They understand the creator knows the property better than they ever will and if the creator demands involvement, the publisher will not object. To the developer, involvement includes, the right to participate in sequels (financially and development if they so choose), creative control over the property regardless of development involvement, and if the developer is in a position to do so, management of ancillary rights. In a best case scenario, the developer will secure a reversion in the property if the publisher decides not to publish any more.

Some may argue IP ownership is imperative to maximize the value of a developer for a sale. Simply untrue.  While IP ownership does enhance value and can achieve a significant amount of money on a sale, an equal number of developers have sold at equal or higher value based on track record and technology, without IP ownership.   

The moral of the story . . . stop worrying about ownership, think about what is important and close the deal.

NY Times: Voice Actor Compensation Confusion Edition

The New York Times just ran an article about voice actors in games. The Times makes it sound like Michael Holick, the voice of Niko Belic is unhappy with his deal, and the part of the quote working its way through the blogosphere makes it sound worse. The whole quote paints a mildly different story. Here is the whole quote:
“Obviously I’m incredibly thankful to Rockstar for the opportunity to be in this game when I was just a nobody, an unknown quantity,” Mr. Hollick, 35, said last week over dinner in Willamsburg, Brooklyn, shortly after performing in the aerial theater show “Fuerzabruta” in Union Square. “But it’s tough, when you see Grand Theft Auto IV out there as the biggest thing going right now, when they’re making hundreds of millions of dollars, and we don’t see any of it. I don’t blame Rockstar. I blame our union for not having the agreements in place to protect the creative people who drive the sales of these games. Yes, the technology is important, but it’s the human performances within them that people really connect to, and I hope actors will get more respect for the work they do within those technologies.”

I get it. It sucks to have that much money woosh by your head. When it happens, you feel it. But the guy is not disparaging the company or the deal he chose to take to make the game. He also happens to be blaming the wrong people; and The Times, is making a non-story into a story by garbling facts.

The game business is no different than any other form of entertainment, and the actors make the decision to participate, or not, of their own free will.  The Times makes a critical mistake of comparing apples to donkeys. The reporter writes:
Had this been a television program, a film, an album, a radio show or virtually any other sort of traditional recorded performance, Mr. Hollick and the other actors in the game would have made millions by now. As it stands, they get nothing beyond the standard Screen Actors Guild day rate they were originally paid.
This is not true. The writer is confusing revenue participation with residuals. If this were a film, and he is an actor, he would only make additional money if he was powerful enough at the outset to secure a gross participation.  If it were television, he would receive the union rate - less than he received for his work on GTA - until the show goes into reruns, sells into syndication or sells on DVD. Mr. Holick, appearing in his first film or tv show, would receive nothing beyond his day's pay. The money the writer is referring to comes from residuals. Residuals come from downstream exploitation windows. The second run of the television show, the radio play, cable sale. He does not get paid on the first run. In games, there are no downstream windows. The first run is the only run. The same run for which John Favreau received a flat fee on Iron Man. When it comes to additional revenue from the primary release window, Favreau, like Holick, is S.O.L. It is the deal he made when he signed.  Now, are Favreau and Holick going to make the same deal the next time? Probably not. 

The actors have a choice to participate in the game or not. The deal is made clear at the outset. When I was at the agency I was called into a talent agent's office to speak with an academy award winning actress. She was much prettier in person, I guess its why she's an actress:

"My brother was in xxxxxx game, and it sold millions of copies and he received no back end." She said.
"Yeah, the game business doesn't pay a back end on games."
"Well every actor should get a back end."
"Yes they should" said the guy who commissions revenue from actors who are not receiving back end payments
"Why don't they?"
"Well, xxxxx with your brother's voice sells 5 million units. xxxxx without your brother's voice sells 5 million units."
"I don't care, actors should get back ends."
The conversation told me this actress would not be available for game work. For every one of her, there is another actor who likes games and is willing to do the work.  They gladly take the flat fee to participate in the game. I heard one story of an actor who felt he was so overpaid for the work he did on a hit title, he took the publishing staff to dinner with the relatively modest amount of money he was paid. 

Actors do sometimes have leverage to secure a back end in the game, but like the actors who receive gross participation in a film, it is because their participation will sell units. Bruce Willis was rumored to receive equity in Activision, in addition to a significant back end for the never released Apocalypse game. He co-created the property, lent promotional assistance and committed to his likeness in the game. There were also rumors of back ends for Pierce Brosnan in Bond, and curiously, Jean Reneau in Onimusha 3. The fact these deals stand out shows the rarity, but they happen. They are rare not because the publishers are unwilling to pay, but because the actors were let down by SAG in their core business, film, not the game business. You notice, two of the three deals had no related film. 

Name actors are most often used in film based games. Publishers secure the license to make a film based game from the studio producing the film. Upon execution of its agreement with the actor, the studios generally receive likeness rights for all ancillaries from lunch boxes to games. The likeness rights pass to the publisher as part of the license fee. The actors are often surprised to receive a call and an offer to work on the game. Their agent will look at the offer - a fraction of their pay for the film - and ask for ten times as much. The publisher will explain the actor can participate, or choose to have their likeness voiced by a sound-a-like. I think you know how the conversation turns out.

So thank you New York Times for bringing all of this to light. What it says to me, is Michael Holick can appear in a video game and get his picture in the New York Times, just like if he were in a film. In a glass half full kind of way, it is another sign games are going mainstream.

Pride of the Yankees:It's Never Been Easier to Do Good Edition

I received this email from talented musician and all around great guy Dan Navarro this morning:

Those of you who know me probably know my 28-year partner in Lowen & Navarro, Eric Lowen, was diagnosed in March 2004 with the degenerative, incurable, paralyzing, fatal neuromuscular disease ALS, aka Lou Gehrig's Disease. Though most people with ALS die within 3-5 years, he is still singing and we are still touring. We also have a new album, called "Learning To Fall", releasing in a couple of months on our own label, Red Hen Records.

Last November, Eric and I gathered 30 or so people whose lives have been affected by ALS -- PALS (People With ALS), their families, friends, supporters and caregivers -- to sing on the recording of the title track of our new album. The song "Learning To Fall", written by Eric Lowen and Preston Sturges (son of the famed 1940s film director) chronicles Eric's struggle with ALS and life as he's known it.

Among the friends was Five For Fighting's John Ondrasik, who last year launched a website devoted to promoting charitable causes and generating click-through donations for those causes. The site is, named after his similarly titled hit song.

The event was captured by METal brother Mark Waldrep and his wife Mona, and recorded by Grammy winning producer and engineer Jim Scott (Tom Petty, Dixie Chicks, Foo Fighters, Wilco, Sting) at his private studio in Valencia. The resulting music video is currently featured on Ondrasik's site, and will be, indefinitely.

When you view the video, you log a credit that earns the benefited charity -- in this case, Augie's Quest, an ALS support and research group associated with the Muscular Dystrophy Assn -- a buck or so for each click. You can also donate directly to the central clearinghouse, the California Community Foundation, if you so desire. But this is NOT a request for a donation, and you need not donate to be of help. Just give the video a view and you willmake a difference.

Thanks so much for listening, guys. Hope you enjoy the vid, and the music. The album will be out in July, and I'll have copies available then for anyone who wants one, or MP3 or AAC downloads even sooner, if that's your cup.


Tuesday, May 20, 2008

Check it Out: Bourne Consiracy Trailer Edition

This is game play. The fight system was created with Jeff Imada, fight coordinator for the Bourne films. Its fun

Watch the trailer today, buy the game June 3.

More at Bournethegame

California Game Legislation: Shame on Yee Edition

California State Senator Leland Yee wants to protect California's children. Unfortunately, his zealotry is somehow interfering with the fact receptors in his brain.  Senator Yee was one of the primary sponsors of the California Assembly Bill 1179. The bill was approved by Governor Schwarzenegger but found unconstitutional by the California Supreme Court. While the court found a compelling interest in protecting our children, the law was not narrowly tailored.  Had Senator Yee done his homework, he would have seen there is no definitive evidence of a causal link between video games and violence, and an effective system is in place to prevent children from purchasing M rated games. 

Senator Yee portrays the law as being simple. You will be punished if you sell a violent video game to children.  That doesn't sound so bad. Most of us probably even agree.  The question is how we define violence.  If we can't clearly define it, we don't know how to comply with the law. If the threat of prosecution hangs over our head, we will place as much space as we can between what we believe the law means and what we are willing to develop, publish or sell. The United States Supreme Court calls this a chilling effect.

Senator Yee's bill described a violent video game as:
 (d) (1) “Violent video game” means a video game in which the range of options available to a player includes killing, maiming, dismembering, or sexually assaulting an image of a human being, if those acts are depicted in the game in a manner that does either of the following:
(A) Comes within all of the following descriptions:
(i) A reasonable person, considering the game as a whole, would find appeals to a deviant or morbid interest of minors.
(ii)  It is patently offensive to prevailing standards in the community as to what is suitable for minors.
(iii) It causes the game, as a whole, to lack serious literary, artistic,political, or scientific value for minors.
(B) Enables the player to virtually inflict serious injury upon images of human beings or characters with substantially human characteristics in amanner which is especially heinous, cruel, or depraved in that it involves torture or serious physical abuse to the victim. . . . Pertinent factors in determining whether a killing depicted in a video game is especially heinous, cruel, or depraved include infliction ofgratuitous violence upon the victim beyond that necessary to commit the killing, needless mutilation of the victim’s body, and helplessness of the victim
You can see the whole text here. I think it is more difficult to find any T or above game which could not be molded into these factors.   Without a bright line test, a court must impanel a jury and determine whether a video game in question is violent.   It seems to me, the best thing to do would be to form an organization which can draw members of the community together to review games and determine whether they are fit for minors.   The organization would be able to place a standardized designation prominently on the packaging so parents and store owners would know which games should be withheld from minors.  Oh yeah, we have one of those.  The ESRB. According to an interview with Senator Yee doesn't like the ESRB. 
I think there’s two major problems with the ESRB (the rating board): one is that there is a conflict of interest. The money that is used to sustain their particular activity is paid by the industry — the industry that that board is supposedly trying to regulate. So long as you have that conflict of interest, there’s no way that anyone’s going to believe that these rating scores are going to be objective.
Number two, the ratings are not valid; because the way in which you determine those ratings is that you get a snippet of these particular video games. The industry will provide you with some of the information that causes one to rate in a particular way.
I can understand Senator Yee's concern. The organization should look more like the MPAA, the film ratings organization which Senator Yee has never questioned.  According to their site:
The Motion Picture Association of America (MPAA) serves its members from its offices in Los Angeles and Washington, D.C. On its board of directors are the Chairmen and Presidents of the six major producers and distributors of motion picture and television programs in the United States. These members include:
Paramount Pictures Corporation;
Sony Pictures Entertainment Inc.;
Twentieth Century Fox Film Corporation;
Universal City Studios LLLP;
Walt Disney Studios Motion Pictures; and
Warner Bros. Entertainment Inc.
Wait a second, the industry regulates itself? That makes me go "hmmmm."

The second issue really is a major departure from other media and has been tested. Publishers attest to the accuracy and completeness of their submissions. If the submission are not representative of all content the ratings will be changed and the publisher will be sanctioned. We all saw this happen in the Hot Coffee incident. When the community found disabled code in the game, which was not disclosed as it was never intended to be seen and reasonable steps were taken to remove it from the game, the ESRB revoked the rating and issued warnings within days of the first report.  The publisher immediately provided stickers for existing games, accepted returns and issued a revised version of the game.  The system works.

Senator Yee shares his enthusiasm with Federal Senators Matheson and Terry.  You see, the cause is so important, the three Senators cannot let the facts interfere with the goal. Senator Terry admitted his lack of diligence in an interview on Gamepolitics. Senator Yee took a different tact. In his Gamecyte interview,  he acknowledged the facts, but chooses to ignore them.

Alex Mejia from Corona, CA asks, “Considering even the FBI has statistics that show that the crime rate is dropping, even when games such as Grand Theft Auto have increased in popularity, what proof is there that violence in games causes violent tendencies?”

Just because the statistics somehow indicate that there is a drop in violence does not mean that somehow, we have not found a relationship between these ultraviolent video games, and violent tendency along with children. One has to ask the question: when we were looking at some of the statistics about ten, twenty years ago, you didn’t hear about Columbine shootings; you didn’t hear about college students shooting and mowing down a number of their fellow students; you didn’t hear about – in San Francisco, a couple days ago — a first grader, bringing a gun onto campus. It is these kinds of data that suggest that the ultraviolent video games are being used, looked at, practiced by kids, and then during daylight, or during other times, that they actually practice these kinds of behavior.

The Senator acknowledges crime is going down as game popularity is rising. End of story right? Wrong. He points to Columbine and other shootings. Apparently Senator Yee did not read the court ruling in the Columbine families case against the video game publishers, among others. The court found no evidence of causation linking video games to the tragic shooting. In fact, the court not only failed tofind a compelling interest in protecting children from video games, it found restricting game sales could actually harm children:
To shield children . . . from exposure to violent descriptions and images would not only be quixotic, but deforming; it would leave them unequipped to cope with the world as we know it. 
If I were Mr. Yee, I would not use the Columbine example again. His other references are scary, deplorable, horrible and every other way you can think to describe hideously ugly and wrong things. We must deal with these issues. These are the result of a myriad of wrong and unfortunate events. Troubled children, poor parenting, psychological issues, community failure, random acts and more. They are not the result of video games. While the research either proves this point, or fails to find a link, Senator Yee chooses to ignore research which does not comply with his view.

Timothy Anderson, from Minneapolis, MN, references a book called Grand Theft Childhood in which two Harvard graduates conducted an apparently large-scale study that showed that there was no link between violent video games and violent behavior. What is your response to this?

I haven’t read the study and all that; but in all the psychological literature, there has been a consistent reporting of a correlation between playing these games and violent behavior, so that is undisputed. The question has always been whether or not there is a cause and effect – and when there is a preponderance of these correlational data that suggest a relationship between these ultraviolent video games and violence itself, that we err on the side of safety; we err on the side of our children; and we treat them as causal relationships. And that is the reason why, in a number of jurisdictions, they have used that information to argue why in fact we should ban the sale of these ultraviolent video games to our children.

No one can disagree with the need to err on the side of safety. But this is only one of the many studies Senator Yee has not reviewed.  The preponderance of correlational data is manufactured in Senator Yee's mind. The data is not clear and does not provide enough support to impair the First Amendment of the United States Constitution.  Even with a lack of clear data, Senator Yee's argument may have merit, if no other action is being taken. However, effective action is being taken. The FTC's Secret Shopper Survey found retail to refuse sale of M rated games to minors 80% of the time. Gamestop refused the sales 94% of the time.  This is up from an overall industry score of 15% compliance in 2000.  The trend line is impressive and shows effectiveness. 

Senator Yee's bill will create a chilling effect on one of California's largest employers, alter the content available to consumers and tie up the court system with useless cases, but he hasn't taken the time to consider the facts. Where is Steven Colbert when you need him?

Monday, May 19, 2008

EA Agrees with me: EA is Really Smart Edition

I have been writing a lot about EA lately, and I don't want this to be all EA all the time, but I should note when they are really smart, like in their perspective on the recent withdrawals from The ESA. I agree.

Sunday, May 18, 2008

EA's Qs: Metacritic Harsh Dose of Reality Edition

It looks like Wall Street wasn't as excited by John Riccitiello's Jerry McGuire moment as I was. The stock is down over 10% since the announcement. The daily stock price is not the be all end all, and every CEO will tell you they do not let the stock price dictate corporate decisions, but stock hits make access to capital harder, making things like purchases of Take Two relatively more expensive. The decline is probably more attributable to the losses disclosed on last week's earning call, or the expiration of the Take Two tender offer, but the guidance of no quarterly guidance coupled with likely delays did not help. I say “likely delays” even though the company didn't he was very specific about products slipping from a quarter but staying in the fiscal year. Spore in the first quarter of 2009 would still be a fiscal 2008 release.

The point I highlighted in the earlier post, was the commitment to quality against a backstop of the objectively measurable deliverable. Wall Street loves predictability. The game business hardly has any. EA committed to improve quality and endeavored to provide a measure for improvement. At first blush, to me at least, Metacritic made sense.I always knew the numbers were kind of squishy, but it kind of made sense.   Higher critical scores mean higher quality and like I said above, companies are not managed to stock price. Well. . . they are not managed to daily stock price, but they are managed to maximize shareholder value, or long term stock price.  Before we become the only form of entertainment in history to allow critics to influence the creative process, let's consider the source.  The Metacritic score is not a valid measure because it is indicative of neither quality or sales.

On its face, John’s reference to Metacritic seems to make sense. The underlying theory for the site draws upon the wisdom of crowds. A popular anecdote of crowd wisdom is attributed to Sir Francis Galton. In 1906 he held a contest at a county fair to guess the weight of a cow. The guesses of livestock experts varied widely, and none were close. The average of the guesses made by a 1000 people in the crowd came within a single pound. The same experiment has been repeated over and over with jars of jelly beans. The theory is accurate when all data is given equal weight.  When it comes to critics, you should be able to put all critics in, good and bad, and the average should be the right score. The right score, meaning the best objective indicator of quality and quality means sales. Unfortunately, Metacritic injects subjectivity into the equation.

Some people indicate there is a correlation between Metacritic scores and sales. They go so far as to identify a correlation between scores and market value. From my gut, I call BULLSHIT. The timing is way off. Metacritic scores post on the date of release. Sales forecasts and analyst reports come from channel checks at launch. Ask Michael Pachter whether it was the Metacritic score, or call to Wal Mart which gave him better insight into the success of Bioshock.  Moreover, orders are placed well before Metacritic scores are calculated and are clearly not influenced by the scores. Orders are influenced by a buyer’s review of the game, the publisher’s marketing commitment to the game and the publisher’s pipeline of future titles. The hundred million dollars in movie marketing money will drive more orders than than a 90 for Psychonauts. If the big marketing budget is coupled with a product from the company about to release Call of Duty 4 - even better. Large marketing, strong publisher pipeline, means large order. If those buyer commitments are big, projected revenue increases and with it, projected marketing, sometimes leading to incremental orders, most of the time leading to stronger consumer awareness and therefore stronger sales. All of these events occur while Metacritic still has an N/A next to the game. In case it is hard to visualize, think of a John Woo choreographed gunfight where the buyer and the sales guy each has a gun to the other's head and free hand on their balls and the camera starts spinning faster, and faster around the scene.

You don't have to believe me though, listen to Metacritic’s founder. In an interview earlier this year:

Have you heard of specific instances where a Metacritic score has affected the sales of a game - for better or worse?

Not specifically. Of course friends and users of the site have informed me that they haven't purchased games (or seen movies or bought albums) with low Metascores, but I've never been told by a publisher or developer that they've been able to definitively make a causal connection between poor sales and low scores from my site.

However, at least two major publishers have conducted comprehensive statistical surveys through which they've been able to draw a correlation between high metascores and stronger sales (and vice versa), but with a much tighter correlation in specific genres of games than in others. (emphasis added)
One of the publishers he refers to is Activision, and the studio was highlighted in Nick Wingfield’s, September 2007  article  pointing to Metacritic's correlation to sales.
Activision Chief Executive Robert Kotick says the link was especially notable for games that score above 80% on Game Rankings, which grades games on a 1-to-100 percentage basis, with 100% being a perfect score. For every five percentage points above 80%, Activision found sales of a game roughly doubled. Activision believes game scores, among other factors, can actually influence sales, not just reflect their quality.
Despite it falsity, this meme grew and was embraced by the industry, until Robin Kaminsky, head of Global Brand Management for Activision repeated quote and corrected the meme in her DICE talk this year. (The whole thing is up on line and you should watch it, it is very good.)  She provided the context for the quote. It seems Metacritic scores are one factor in determining sales. She explained high Metacritic scores, coupled with strong marketing and sell in, mean high sales. The findings were supported by a break down of high scoring products in 2006 and 2007. Two thirds of the 18 products scoring 90 or above sold less than 2 million units, the break even point for a USD 20 million product. Only 2 products would sell in excess of 7 million. The largest grouping of products, 7, would sell less than a million. In case this is not persuasive enough, we can look at the other side of the score box. Until Call of Duty 3, the highest selling Call of Duty was Finest Hour with over 4 million units sold and a Metacritic score of 76. We can also look to Mario Party 8's score of 62 or Wii fit's score 80 for a product which retailers cannot keep on the shelf - did anyone think a pasty, sofa sitting, 24 hour a day controller holding, dark room sitting, Mountain Dew drinking, talking to d3vi1b0y007 through Xboxlive, breaking only to see Iron Man critic was going to give a fitness title a 90?

If Metacritic worked as objectively as Sir Galton’s analysis of every piece of data, we would quite possibly have an indicator of quality, and therefore an accurate measure of our gaming cow. Sadly, it does not. Metacritic does not include the entire data set, only those selected by Doyle:
This overall score, or METASCORE, is a weighted average of the individual critic scores. Why a weighted average? When selecting our source publications, we noticed that some critics consistently write better (more detailed, more insightful, more articulate) reviews than others. In addition, some critics and/or publications typically have more prestige and weight in the industry than others. To reflect these factors, we have assigned weights to each publication (and, in the case of film, to individual critics as well), thus making some publications count more in the METASCORE calculations than others.
I get why he does it, and he likely had the best intentions, but it doesn’t work. The critical view is subjective. Doyle's determination of the critic's value is also subjective. So we are really getting a third generation facsimile of a subjective view of the quality of a title. If you factor in the uncertainty of the gallant, but flawed effort to convert A to F scales to numerical equivalents, Sir Francis Galton would certainly call foul.

Doyle justifies elimination or moderation to guaranty reviews from the best reviewers. Even this doesn't really make sense. If you really think about it, the most likely consumer of a review is uninformed, the mainstream buyer. The people who bought GTA IV at midnight knew they were going to buy it and knew it was coming out. The person who buys only one game a year may consider the same factors as the Entertainment Weekly or Variety reviewer in their purchasing decision. By limiting the reviews to hardcore gamers, we are further restricting accessibility to the market and putting one more lock on the door to our mother’s basement where we all sit and play games. Worse still, once Doyle injects himself, the service becomes an observational study of game scores and not Galton’s objective measure. It should be noted, Doyle never said it wasn’t, but people who utilize the date must understand, they are seeing his analysis of market data, not an objective measure.

As pointed out by Scott Miller in his book Developmental Research Methods:
A . . . general problem [of observational studies] is observer bias. Expectations researchers bring to research can sometimes bias their results, moving outcomes in the direction of what was expected or desired. In observational study the danger is that observers may see and record what they expect to occur, rather than what actually happens.

A study by Kent, O'Leary, Diament and Dietz (1974) provides an example. . . . The findings of the Kent et al. study suggests one way to reduce the probability of observer bias: Make the scoring categories as specific and objective as possible. The greater the leeway for interpretation in scoring, the greater the opportunity for the observer to inject their own biases.
Metacritic not only injects its own interpretation for the scoring, it determines the very field from which it will draw. Do you think there is any conscious or unconscious bias prior to a games release? Is the next GTA going to be good? Is the next movie based game going to bad? If I know GTA is going to sell a billion, do I consider whether a higher Metacritic score will influence Take Two to use it in their ads, thereby elevating my brand? How about if it gets a perfect score and the media -which loves measures and lists - uses my score as a new angle on the game? I am not saying any of this happened, but we can certainly see the potential. Of course, the scores are kept within a margin by the market. If a bad games scores to highly, the site will lose credibility. But if the 1up score in the 20s is ignored, a game could earn a few more points and the site maintains credibility. The value of being embraced by the CEO of the number one publisher in the industry as a standard? Priceless.

The observational influence is not limited to the observer. The observed are influenced as well. 
The behaviors recorded in an observational study may be a function of any number of antecedent or contemporary factors. One factor we do not wish to have influence the behavior, however, is the mere presence of the observer. Yet the presence of the observer, and the concomitant knowledge that one is being observed may alter behavior in various ways.
Post Metacritic reviews seem to have more outliers. Critics know they will get attention if they give a shockingly low review of a game. They also know they will get more clicks if they are the lowest review on Metacritic than one of many in the fat part of the bell curve.  There was always influence from the publisher's pipeline, now there is additional influence from Metacritic.  Critics may be inclined to appeal to Metacritic, the weaker the pipeline, the stronger the Metacritic influence.  If the publisher has a strong pipeline, the reviewer not only caters to the publisher, but can gain disproportionate influence by appealing to Metacritic. Being a Metacritic reviewer is like being a Nielson family, only better because the publishers know who you are.  Doyle has said Ben Fritz of Variety is not considered for Metacritic scores, do you think he is going to get any exclusives?

So, back to the Jerry McGuire moment. I guess we really shouldn’t rely on the Metacritic as an indicator of quality or shareholder value. Quality should be measured the old fashioned way, sales. For this thought, I go back to an interview given by a really smart guy last February:
EA's Riccitiello wants to avoid the trap of just pursuing a good Metacritic score, a mindset he said frequently leads to too much executive meddling.

"The process often gets in the way more than it helps," he said. "That sort of circus has unfortunately sort of defined our company for too long. And it's not a good process.". . . 

That's one view, but Riccitiello has another: "You don't cash Metacritic, you cash checks."

Friday, May 16, 2008

ESA: The Last Person Out Please Turn Off the Lights Edition

Lucasarts left The ESA today. It looks like Activision and Vivendi's withdrawal triggered the cascading effect suffered by E3 a few years back. The first pickle out of the jar is always the hardest.

I am sure Lucas's reasons for withdrawal were sound and the decision was thoughtful, perhaps The ESA is not what it used to be post Doug, but are we throwing the baby out with the bathwater? I stand by my earlier statement regarding the need for an industry organization charged with the responsibilities espoused by The ESA. Our business does not provide adequate lobbying at State or Federal level and we suffer for it. It is easy to see the anti game legislation and piracy issues which drew the publishers together to form The ESA, but what about the other issues which could be addressed through a stronger lobby? H1b visas, tax benefits provided by competing territories and who knows what else because no one is doing it? Now we see publishers are willing to withdraw if they do not get the service they want, but what will bring them back to a unified organization?

I am not advocating staying with The ESA if it no longer serves its purpose or merits the associated cost. I am however wondering what the withdrawing publishers are doing to build the organization which will merit their membership. I like to see all publishers involved in the organization and providing check and balances. Something new should be established as a smaller ESA may be worse than no ESA at all. If more publishers leave and an ever shrinking ESA lingers beyond its welcome in a HIllary Clintonesque manner, the remaining publishers will enjoy a disproportionate voice under the guise of an industry organization - ever get one of those BSA letters from the organization which is not mostly Microsoft? As The ESA membership fees are based on revenue, and Activision, Vivendi and Lucas left, EA, Ubi and Take Two's voices got louder. Granted these companies will agree on very few things, but the more withdrawal the closer this particular organization will come to a single publisher agenda. Worse yet, two organizations will divide the focus and impact of the organization.

It is impossible for any publisher, including the ones who withdrew to argue the necessity of an industry organization. So fellas, what's next?