Sunday, September 28, 2008

Can We Be Done with Metacritic?: Critics Edition

I started playing Star Wars: The Forced Unleashed this weekend. I am not a ridiculous fan who rushed out and bought it on the first day of release. I waited until the second day. My son and I sat down together, put the game in the console, and found comfort in the score’s familiar refrain. The game started, and continued, to deliver exactly what we expected. Of course, relative to Metacritic and other critics of the game, our expectations were somewhat low. We were only looking for fun.

The game was not only consistent with the license, but provided a consistently high level of story and performance. In fact it was the first game I played in which the robots were infused with the same life and humor as those of the Star Wars films. Sure there were glitches in the game, but none of them significantly interrupted game play or stopped the fun. Again, the critics are jumping all over these, but lighten up fellas, we are dealing with complex software. When I watched the season opener of The Office, I saw scenes where Michael had no goatee spliced in between scenes where he had one. And the goatee was a plot point in the script. If the show were a game, this continuity error would definitely cost it at least 5 Metacritic points. As a viewer, I really didn’t care. The same can be said of TFU, which received a middling Metacritic score of 73 and blockbuster sell in of 4.3 million with 1.5 million units sold through. Given a choice, I would take the latter over the former. Unfortunately, we just don’t have a choice. While we can all agree Metacritic is garbage, the publishers continue to cite the data as gospel when making business decisions.

Metacritic is a specious aggregation of an already skewed data set. The site, which is wholly owned by Viacom, places three layers of subjectivity, on already skewed data to manufacture a number it can hold out as objective. The editors choose which sites to include, the relative weight afforded the sites and numerical value assigned to the review.

In the case of TFU, the site included those highly regarded critics at The Onion, Middle East Gamers, maxi gamers of portugal and Thunderbolt to assemble the score. While this score is ostensibly supposed to create a foundation for like comparison against other titles, none are included in the recently scored Brothers in Arms, or the high scoring Braid and NHL 09. Consumers and every other business covered by the site find it no more relevant than a David Manning quote, why do we?

The average Metacritic score for the 17 films exceeding USD 100 million is 62.5. These include Hancock's 49, Sex and the City's 53, Iron Man's 79, Indiana Jones' 65 and Wanted's 64. Had it not been for Wall-E's 93 (which is in 5th position) and Dark Knight's 82 - both outliers- the score would have been even lower. The scores had no impact on box office, and the industry just doesn't care. If studios held scores in the same regard as publishers, Will Smith, Angelina Jolie, George Lucas and Steven Spielberg would all be struggling to find their next deal. Fortunately for them, their industry sees the critics for what they are, they are useful in promotion when they say nice things, and are no influence whatsoever in the decision making process. The studios look to revenue, not Metacritic scores.

As much as I like to put all the blame on Metacritic, we also have to look to the underlying critics themselves. I empathize with them. They got into the business because they love games. I am sure the first game they played was a transformative experience. Unfortunately, like crack addicts chasing the rush of their first high, they will never feel the experience again. Their first games imprinted deeply into their virgin minds. It was a time when they viscerally felt Miyamoto perfection and were untainted by awkward, buggy value titles. Pong would entertain for hours and any game was better than passive television. Now, these people play more games in an afternoon than a normal consumer plays in a lifetime. When a highly anticipated game comes along, the pressure to beat other reviews to the web preclude them from sitting back and being consumed by the game. They are constantly looking for the distinguishing feature from every other game they are playing. It is not at all unusual for a critic to have 10 to 15 games piled on their desk awaiting reviews. Play becomes work, which by definition is not fun. During the 4th quarter it can be even more. The calloused game chops lead to statements like this:

Make no mistake, you can have a lot of fun with The Force Unleased” Says Gamepro as it awards a 70.

A complete contrast to G4TV which tells us "The concepts are solid, the story is excellent, and the characters sustain. Aesthetically it is a beautiful piece of work. It's just not all that much fun to play . . . " supporting its 40.

C’mon publishers . . . are you reading this stuff? Why would you pay attention to it in the first place, let alone after it has been run through the obfuscator we call Metacritic. Take a lesson from the film business - there’s something you don’t see me write often – if these guys say something good use it in ad. If they say something bad, it really doesn’t matter, unless you validate it.

Star Wars: They Don't Know How Good They Have It Edition

My son was a huge Star Wars fan. From ages 7 to 9 he was completely consumed and studied every fact. While it blurred the line between home life and the people I encountered every day at work, it was an interesting period. One day, he just lost interest. It was like someone snuck into his room in the middle of the night and changed the chip in his brain. I am confident the interest will come back, so I poke at the memory's corpse every once in a while.

A few days ago we were talking about it and I think I see the problem. I had to wait the better part of a life time to see the whole story. Having been born in 1995, it was just handed to him all at once. There is no appreciation for the wait.

"Do you think you ever want to watch Star Wars again?"

"Mmmm maybe."

"I thought you didn't like it anymore."

"Eh." I am learning that 12 year olds are mostly monosyllabic. I think it is a conservation of energy thing.

"So you do like it?

"Yeah. But you always want to sit down and watch all six movies in one sitting." It came with the intonation usually reserved for questions about going to the dentist.

"yes . . . . so. . . ." I was confused. How could you question this kind of day.

"Why do you we have to watch them like that?"

"Because we can."

Tuesday, September 16, 2008

Something Think About: In Game Ad Edition

Kind of lazy, I admit, but I saw this in Brandweek today:

-By Mike Beirne

Just how effective is that Burger King ad in the game NFL Street? Marketers have often wondered. Considering that more than a third (36%) of gamers actually bought, talked about or sought information about a product after seeing an ad in a videogame, per Nielsen Games, a case can be made that they are very effective.

Not long ago, advertising within videogames was looked upon as an exciting new venue to attract a "lost boys" demographic that had stopped avidly watching TV. However, the excitement wore off for some as the ROI for such an unit was difficult to prove.

Looking to get a temperature check among today's gamers, Nielsen Games polled 534 active videogame players last month on Brandweek's behalf (both are units of Nielsen). Of those surveyed, 11% said they purchased a brand that was advertised in a game. Some 19% said they talked about it after seeing an ad and 10% said they recommended the product. Eleven percent said they sought more information. (While no direct comparison rates were offered against other forms of media, 1% of consumers exposed to direct response advertising eventually buy the advertised product.)

Coke was most recalled by the Nielsen panel, then Nike, Burger King, Axe, Pepsi and Pontiac. "Burger King's goal is always to engage gamers in the BK brand through a medium they love," said Brian Gies, vp-marketing at Burger King, Miami. "Throughout, it's been about knowing the target audience [young adult males] and finding relevant ways to reach them through great consumer experiences."

Burger King isn't using games to sell Whoppers, but to pursue what it calls "extended brand interaction." The fast feeder has advertised in top sellers like NFL Street, provided players hidden codes to access the "Burger King Challenge" in Need for Speed and inserted the King into Fight Night. The creepy King served as a corner man that players can pick for their fighters. The company also creates its own proprietary games for the Xbox. Activision's Guitar Hero series was the most popular game among participants who remembered specific advertisers, followed by Need for Speed, the Madden football series, Grand Theft Auto titles, the NCAA Football series and Tony Hawk games.

Global spending for in-game ads is hovering below $200 million, per the Yankee Group, Boston. It will approach $1 billion by 2011. This figure matters to the videogame sector, but is chump change for a $3 trillion ad industry.

In-game ads primarily have been a brand awareness play, but recently publishers have cast the medium as a direct-response vehicle. Electronic Arts is working to add more interactivity to its PC games. For example, a player could click the space bar to stream a trailer of a movie advertised within a game.

"Marketers want consumers to buy their products, that's why they're in the advertising model to begin with," said Manny Anekal, EA's global director of ad operations. "If the in-game message is clear and nonintrusive . . . you will see more consumer change or actual purchase [as a result of interactive ads]." There are as many as 16 in-game ad formats, said Michael Goodman, Yankee Group's director of digital entertainment. They include interstitials before and after playing, placement while a different skill level loads and sponsored cheat codes. For gamers who recalled ads, "the vast majority indicated that it did not adversely impact their experience," said Brad Raczka, marketing manager for Nielsen Games.

Still, the medium serves mainly as an awareness-builder versus a trigger to buy, said Goodman. "You have to recognize where the consumer is at that point of time. They're not looking to buy a Coke or fast food." But with males 18-34 spending 15% of their time playing, in-game ads are an opportunity that can't be ignored, said Justin Townsend, CEO of New York in-game advertising agency IGA. "It's not supposed to be directly in your face for advertising purposes; it's trying to be part of the consumer's experience every day."

Wednesday, September 10, 2008

Gamestop Needs an Intervention Part 2: WTF Edition

I am a bit behind the times, but I just read gamedaily's interview with Gamestop's new CEO and it kind of made me feel icky in my tummy. This guy is in charge of about a third of the video game sales and he is not on our side. His positions on digital distribution and used games make him sound either delusional, or like an ostrich with his head in the sand.

BIZ: What are your thoughts on the digital distribution options that connected consoles are introducing to gamers today? Do you see today's gamers bypassing retail one day, as music consumers currently do with iPods and iTunes?

DD: The first digital distribution was Napster and it was illegal. Let's just start there. The software publishers are afraid to death of piracy. Once a full game is lying on a hard drive, there's the potential for piracy. Aside from the games, the bandwidth, etc., our studies have concluded that the network won't be in place to do digital distribution of full games until 2020 to 2025. And that's using today's size, but as consoles get more powerful, games get bigger. Right now, a 30GB game with your best T1 line is about 72 hours to do it.

He is running our biggest retailer, but doesn't understand the market forces operating in his favor. Or maybe he just won't talk about them publicly. This guy is the proverbial little boy with his finger the dike. He is trying to hold his position as toll taker between consumers and publishers, while pressure is building on both sides of the wall. Consumer and publishers both want direct downloads. This model is currently failing Hollywood because, as he correctly points out, technology circumvents distribution chokeholds. The game industry is tracking a few years behind music and television, but there are definitely cracks forming in the dike. Poor Mr. Gamestop CEO does not realize placing his finger in the dike will not stop the leaks. He believes bandwidth the impediment to game downloads, but it’s not. Publishers want to put games on line, but can’t for fear of alienating the retail channel, and hardware manufacturers can’t allow it for fear of losing the opportunity to sell at retail. Once this fear is allayed, the market for game downloads will flood into existence like music and television before it.

Gamestop, Wal-Mart, Target and all the retailers hold shelf space over the heads of the publishers and console manufacturers. If publishers undersell or consoles allow full game downloads, the retailers won't stock them. It's their only weapon. When we look back to the music industry, downloads were initially slow, but a billion downloads starting happening overnight. When Apple made it easy, a billion sales happened over night. The adoption curve was so steep it all but bent over on itself. Television is following the same adoption curve, and there is no reason to believe games won't follow the same curve. The impediment is not technological, and it is not a problem waiting for a breakthrough, it is artificial, and will disappear on its own. Today, publishers and the consoles need retail to get hardware into market, but as we move to the back half of the console cycles and there 50 million plus of each console in the home, expect to see more direct downloads of whole games. Once it happens, Mr. Gamestop CEO is going to get very wet. Like Sony music who kept trying to come up with new CD encryption and NBC who tried to leave iTunes, he will realize, you can't stem the tide. The publishers will go direct, because they can. He tries to make an argument he publishers will make less money direct, but unlike his store, they will get paid for every unit sold on the console.

BIZ: Do you feel threatened by the lower cost digitally distributed games offered to consumers?

DD: I would argue that the average value of a current generation game is about $20. We will give $1 billion out to consumers this year, who will use that money to buy new -- not used -- games. Consumers have been conditioned that their video games have residual value, just like a car. The real cost of a game today isn't $59 but $39. Nothing that has been digitally distributed retains the same value as a retail version; it's always less. Let's say a retail game is $39. Microsoft and Sony are the gatekeepers for their consoles. And if you're a third party that should scare the hell out of you because that's the only way to get to your customer. They'll take 10 to 15 percent. Video game publishers sell me games today for $48 wholesale. If they go direct to the customer they'll probably get about $30 for them. They'll get less for the game if they bypass retail.

If games are really worth USD 20, why is he paying USD 48 to get them - because he sells them a lot of times. As I addressed in an earlier post, his used game policy drive the value of the game to USD 20. Games do not have a value of USD 20. Games in Gamestop have a value of USD 20. If publishers got paid on each download sale, something which does not happen at Gamestop, not only would they more than make up the difference, they would maintain the higher price. He also tries to argue used games are a sales driver, but the argument just doesn't hold up.

BIZ: What are your thoughts to those in the publishing business who say used game sales are hurting the games industry?

DD: I do talk to many publishers about this. We will give out $1 billion worth of credits that will be used to purchase new video games this year. New games in the U.S. this year will be $10 to $12 billion, so 8 to 10 percent of the total dollars used to buy new games this year will be from currency from GameStop's trade-in program. What we see is that consumers want to buy new games, but they don't have the cash because our trades go up as our new game sales go up. They're using trade-ins to buy games because more money is going into their gas tank. It's a source of currency that helps drive the video game business. I think the argument that it competes with the new games is false. Imagine what new car sales would be like if you couldn't trade in your old car.

Used game credits are stored value held by Gamestop. The contribution of the stored value credit toward the new game puts the new game into the stored value system. The publisher gets paid once on the transformation, but then the game becomes currency in the Gamestop system. Once in the system, the unit is sold an unreported number of times. The total Gamestop currency grows with games in circulation, and each unit of growth removes value from the publishers. Mr. Gamestop CEO assumes used games are only used for acquisition of new games. They are not. One billion dollars worth of credits are used to pull the games off the shelves the first time, but how many times are other used games sold? There answer, is enough to generate about another USD 2 billion in revenue. The publishers don’t get paid on those. Gamestop has a 50% margin on used games, much better than the 21% margin on new games. According to their SEC filing, 44% of their gross profit is attributable to used games and on a unit basis,53% of all game sold are used. If the industry generates USD 12 billion next year, Gamestop’s game sales, based on market share would account for USD 4 of those 12 billion dollars. My math skills aren’t so great, but this would mean USD 2 billion in sales are attributable to used games and publishers are only paid on 2 billion for new games, with an additional billion in stored Gamestop value going toward new games. Consumers are actually subsidizing Gamestop’s inventory with used game returns. Even if we assume every purchase made with credits comes from someone who would otherwise not purchase the game - major leap of logic - game publishers still lose 2 billion dollars a year.

I don’t buy Mr. Gamestop’s residual value argument either. Sure I look at depreciation when I buy a car, but I’m not buying a car from Gamestop. I am buying a game. Moreover, the auto industry makes money from used cars through the sale of parts and dealers make money through service. Game publishers make money once, on the sale - at Wal-Mart and only sometimes at Gamestop. Which brings up a good point. Wal-Mart has roughly the same market share as Gamestop, but there is no game trade in. They do the volume, at full price without the subsidy. Gamestop didn’t create the concept of residual value, they created the concept of the cheap game. When you buy a game at Gamestop, it goes something like this:

“Oh I see you are buying Super Death Ray Auto Blaster 17.” says the counter guy. “You know its an “M” rated game.” Gamestop did have a 94% compliance rate in the most recent FTC study.
“Would you like to buy it used. You can have a [10 to 50%] discount.”
“But it ust came out two days ago.”
“I know, but we got some back, you can get a discount and it’s guaranteed to work.”
The consumer hears “Would you like a kick in the balls or this nice shiny game?” Mr. Consumer, who already decided to purchase the game and not rent, buys the used game. He would be stupid not to.

Mr. Gamestop CEO please be straight with us. You figured out a way to make money without paying for inventory. That’s cool, it’s the American way. While its self defeating in the long run, in the short term you will make money in a crack dealer kind of way. Please don’t insult our intelligence though. In reality you are not any different than the dude selling bootleg Batman DVDs on Canal Street in New York, you just have a bigger table. And don’t delude yourself, those publishers and consoles who say they like you, they do, because you are selling 33% of their product. Let’s see who shows up at your birthday party once your market share falls. I have a sense you will lose some support. If you want to take a look at the Ghost of Christmas future, talk to your counter parts at Circuit City and Toys R Us. They used to have your market share too.

Tuesday, September 9, 2008

Party Conventions: Politics Edition

I never wrote about politics before, and I am certainly not qualified to do so. However, as I sat and listened to the vilification of the American Dream, I needed a place to vent. In this election cycle, Horatio Alger and Warren Buffet are being replaced by aspirational figures like out of work factory workers and single moms. Don’t get me wrong. I want to see job growth in America and support for people in difficult situations, but helping and aspiring to be are completely different. These guys are both saying it is bad to be rich - USD 75K per year in the case of Obama. It is bad to be a big corporation, like the ones who supply jobs. It is bad to be a special interest group – those people who speak on behalf of minority interests, which would otherwise not have a voice in government. It is all propaganda intended to create a bad guy, a target for anger. A way to focus those bitter feelings we heard about. Through these statements, both parties seem to be asking me to figure out who is most qualified to be the next President of the United States, so on that basis, I guess I am as qualified as any one else. Certainly as qualified as Lindsay Lohan, who chose to share her views with the world.

My biggest disappointment is out of a country of 300 million people, these are the best we can do. When politics was left in the hands of the few inhabitants of the smoke filled rooms, we got Thomas Jefferson, Abraham Lincoln, Franklin Roosevelt, Teddy Roosevelt, John F. Kennedy and Ronald Regan. Sure there were some dingers in between, but when the parties’ candidates started to be chosen by the people, we ended up with the telegenically strong, mile wide and inch deep presidencies of Bushes 1 and 2, Clinton and now, Obama or McCain. Mark Pesce gave a great presentation and wrote a great piece about Hyperpolitics. He expands this idea much better than I ever can, but in short, the smoke filled rooms, often put forth candidates who had some relevance to the issues. Upon introduction to the country at large, they were able to court voters the best way they knew how and using the best methods of the day. Maybe we keep ending up with the choice between the lesser of two evils, because we are being marketed to, and not spoken to. We don’t really know what either candidate stands for, and whatever they stood for during primaries is thrown out in favor of more centric positions to draw from the other person’s base. This is why the votes are just about evenly split on a national basis.

The good news, is despite all the railing against Bush, we really can’t go very wrong with either guy. The President really does not have a lot of power. Our middle school social studies class taught us about checks and balances. Cursory review of the newspaper and some Washington oriented reports teach us about the budget process and earmarks. For example, the candidates are talking about the budgets for when they are in office, but they are already set by the last administration. A commitment to no budget increases means there will be no increase over the automatic increases contained in the budgets. No increase means on a little increase. The promises on earmarks are about as useful. The President does not have a line item veto and earmarks, by definition, are the riders stuck on the bills they want to drive through Congress. As much as we like to blame Bush for the war in Iraq, Congress agreed with him. Right now Congress is controlled by the Democrats, but because they don’t get along with the President, when measured by legislative activity, they have been one of the least active Congresses in history.

The President is our face to the world. Sure Obama and McCain will present different faces, but despite the BBC poll, I really don’t see one as being better than the other. Both are not Bush and that is what the world cares about.

According to Google, I have been fortunate enough to have visitors to this blog from 91 different countries and territories. For those of you outside the United States, let me fill you in by letting you know the two major political parties in the United States held their conventions, back to back, the past two weeks. While the number of active voters is significantly lower, people were interested enough in the candidates' speeches to generate a rating almost as high as the final episodes of American Idol. The conventions are a political version of E3 in the old days. All the decisions are already made, and there are no surprises. It is just a phallus waiving opportunity between the parties. For me it is kind of a fun time to see how the Democrats are going to snatch defeat out of the jaws of victory. The election is happening at a time when the Republican president has one of the lowest approval ratings in the history of the office, and all the Democrats have to do, in theory, is put someone on the ticket with a heart beat and a warm handshake. Sounds easy, but they failed to do it last time.

As a devoutly undecided, non-partisan voter, there are really only two general factors weighing on my decision. First their position on the roll of government in my business, and second their position on abortion, but not necessarily for the obvious reasons. Sure there are other issues, but these are the places where the President will exert the most power.

The Vice Presidential choice weighs heavily on the decision. It is used to counterbalance the candidate and retain someone to be the bad cop. I am not really into the politics of the whole thing but it is a consideration because VPs replaced 9 of our 43 presidents. With a 20% chance of this person being our next president, they are worth a look. Obama picked Biden. He is an interesting choice. I see the painfully obvious counterbalancing of the ticket. Obama is young, Biden is old. Obama has little experience in Washington, Biden has a lot. Obama has a full head of hair, Biden has plugs. I shouldn't talk about the implants or the face lift, we don't vote based on appearance. Once I get beyond the superficial, I really don't see the choice. Biden ran for president on his own a number of times and no one seemed to care - or notice. Through his Senatorial service and position on the Foreign Affairs committee he has traveled a lot and met a bunch of foreign leaders, but so have Bono and Angelina Jolie. He has not been in a position of authority, or met with them when they thought he could actually do anything.
McCain took the same superficial approach as Obama. He went for the polar opposite. He’s old, she’s young. He is scary and robotic, she is a former beauty pageant participant. He is middle of the road, even viewed as liberal by some on the Republican right, her views could make Pat Buchanan look like a liberal. Some think McCain made the decision to gain the Hillary Clinton voters, but I don’t think they were so superficial as to think they would. They wanted her act and Middle America is eating her up. It’s not surprising. Snappy one liners? Check. In your face comments? Check. Supporting pregnant teenage daughter? Check. They nominated Roseanne to be Vice President of the United States. We kept her show on the air for ten years, why wouldn’t we put her in office for eight? Based on the percentage chance of migration to the head office, the decision creates a consolidated candidate and for my analysis, their views are weighed in with the views of their proposed boss.

On the VP choice, I would have to fall on Obama’s side. I can’t in good conscious support someone who feels creation theory should be given equal stature in schools to evolution. Who knows, creationists - excuse me - intelligent design theorists, may be right, but it is a religious ideology. Despite temporary lapses, our forefathers made a decision long ago to separate church and state. My kid is in a public school, his curriculum should not be colored by a religious agenda. I can’t even look at the experience issue. Figuring out what experience makes you a good president is kind of like when they tried to find relevant backgrounds for acrobats in The Right Stuff. There is no good training.

Getting into the issues, it’s kind of hard to figure out where the candidates stand on most issues. If I take a step back, you can glean an idea from the generalities coming out in the speeches and Obama sure knows how to do the speech thing. The spectacle of a stadium full of people listening to the political speech is something I am not used to seeing in the United States, or in a democratic country for that matter. I thought those scenes were reserved for epic 8 hour Castro speeches, or the ones with burning effigies. He is unquestionably the holder of once in a generation attention commanding charisma. His oratory skills enable him to capture the audience and inspire with his words, a very important skill in a country where decisions are made based on sound bites and the all important acceptance speech must fit into the time allotted on prime time national television. His modern day "two chickens" in every pot couldn't help but appeal to almost every American. Better health care, better education, freedom from foreign energy reliance, an independent Iraq and the whole rest of the candy store.

When it comes to fixing problems, Obama wants to roll up his sleeves and get involved. Hands on, get to work kind of guy. He suggested paying for his plan through tax increases - which are likely to happen with either candidate - but also suggested windfall profit taxes, government investment in clean technologies, government provision of health care, stricter CAFE standards and revision of NAFTA. I already knew he didn’t like me. My career choices, like most of my video game brethren, took me out of his target demographic and placed me into the bad guy pool of people who should be taxed. But more significantly, he doesn't like Adam Smith either. I find it hard to believe, when he is the guy who said this:

“I believe that America's free market has been the engine of America's great progress. It's created a prosperity that is the envy of the world. It's led to a standard of living unmatched in history. And it has provided great rewards to the innovators and risk-takers who have made America a beacon for science, and technology, and discovery…We are all in this together. From CEOs to shareholders, from financiers to factory workers, we all have a stake in each other's success because the more Americans prosper, the more America prospers.”

Basic economic theory says you tax the things you don’t want to see, and relieve taxes on the things you do want to see, the market takes care of the rest. He is saying he does not want to see oil companies profit, ok, but with this, he is also saying he does not want to see oil companies have incentive to grow. The windfall tax will only be passed on to the consumers through higher costs at the pump. The companies will still make the same profit, it is the consumers who will suffer. If you want to do something effective, give the oil companies incentives to develop clean energy. Those are not in place today. As far as wind fall profits. Adam Smith answered it already. Oil consumption went down when gas prices went up. Gas prices hit exceeded the point consumers were willing to pay, and they stopped buying gas. Oil companies responded, and lowered the price. It works. The same holds true of CAFE standards.

President Ford introduced the CAFE standards in response to the oil crisis in the seventies. He set a goal for auto manufacturers to achieve a 27.5 MPG average across manufacturing lines. The auto industry met the challenge and achieved the goal. It was also caught flat footed and opened the door for foreign competitors to enter the market with the cars their consumers had been demanding for years. Some suggest the industry is in the position it is today because of the CAFE standards. Obama supports raising the standard again when the consumers already spoke. The auto manufacturers made SUVs because people wanted them. With rising gas prices, people are dumping SUVs and the auto manufacturers are responding with more efficient cars. No CAFE changes, but the industry is self-correcting. Adam Smith was right again.
Finally, Obama wants to invest my tax dollars – remember, I am the one with the increase – into new technology development and technology incubators. Great idea - for the private sector. If I am investing, I want equity. Moreover, once something is done by the government, it becomes lowest common denominator. The government is the place I go when no one else will invest in my. This kind of stuff makes the scary old man look good.

McCain did not give the speech Obama did. His challenge was somewhat different. He had to show potential voters he is alive. In short form he comes off as an angry old man. But given some time, at Saddleback College, and now at the convention, he changes from the nasty old uncle everyone hates to straight talkin’ grandpa who has seen it all. It’s no surprise he addresses all the same issues as Obama, the surprise is how close their views actually are. McCain is going to make the country a better place to. He obviously saw the positive response Obama was getting from this “change” thing and incorporated into his program. He is going to drive change as well. An interesting proposition from the guy who voted in line with “he who shall not be named” 90% of the time. McCain wants to fix health care, drive toward energy independence, put teeth in CAFE standards and strengthening of NAFTA. The good part is he doesn’t want to role his sleeves up and do it, he wants to make it easier for us to do it.

Incentives make the relevant party choose to do the things you want, without paying for them to do it. The companies know they save money and build value by investing in clean tech. Incentives build value and jobs in the private sector without using my tax money. He even wants to award a USD 300 million prize to the person with the best battery technology. Ok, the last one is kind of wacky but you can’t blame a guy for trying.

McCain addresses CAFE standards as well. He doesn’t want to change the number, he wants to add teeth to the system. Today’s manufacturers make a decision to meet the standards or pay a penalty, which is passed through, to the consumer. McCain wants to make the penalty real. Not great, not so bad.

Like Obama, McCain doesn’t like me much either. He says he is not going to tax me, more – he probably will – but all of his plans are for people in the same financial situation as Obama wants to help. He also says he won’t cater to special interest groups. He and Obama both call them a bad thing, but by definition, they speak for the underrepresented who otherwise would not have a voice. Obama does want to protect union membership and union actions, but does not like special interest groups. I don’t know if I know the difference, but I guess he does.

The government’s role is really determined how far gone we believe we are. Obama’s green technology job creation investment, and incubators sound eerily similar to Roosevelt’s New Deal. Much of the New Deal was later found to be unconstitutional, but it pulled the country out of the Great Depression. Nothing short of these actions would have worked. McCain’s incentive driven strategy is more line with the Reagan program which effectively pulled the country out of the Seventies malaise and teed up the prosperity of the Clinton years. I may be a bit of an optimist, but I think we are closer to 70’s malaise than ‘30s meltdown. On this one, I have to fall on the McCain side. Obama, and most of Congress never ran a business, how do they know where to invest, and how to measure success? They just don’t. I like McCain’s stay out of my business.

Finally we get to the question of abortion. While the issue, is very important, it is more of a barometer than a focus. The issue provides insight into the candidate’s perspective on The Supreme Court. The Supreme Court determines the meaning of the laws established by Congress. Their most controversial, and best-known decision is Roe v. Wade. Appointing a Supreme Court Justice is the most powerful thing a president can do. The appointments live on for years after the president leaves office and color the law for generations. Right now we are at a critical time in the life of the court. We are about evenly split on liberals and conservatives, but the grasp of liberals is tenuous. Republicans say they look for strict constructionists. That’s code for people who will overturn Roe. The right to choose was found not in the Constitution, but in the penumbra, or shadow of the right to privacy. A strict constructionist, like Alito, Scalia or Thomas, would not recognize the right because it is not in the document. They say justices like Ginsburg “legislate from the bench” when they find human rights which are not specifically written in the 200 plus year old document. As she says, the document was written at a time when “We the people” did not include her. Women were not allowed to vote. John Roberts who is one of the most respected and intelligent jurists of our time and Kennedy who assumed O’Connor’s seat as the swing vote, hold the court in place. The delicate balance will be upset with the next retirement from the court. Justice Stevens is 88 years old and has been on the bench since 1975. Breyer will be seventy this year. Alito and Roberts are still in their fifties. This is scary.

I point to Roe, but it is not only Roe, which will be impacted. Search and seizure, privacy rights, affirmative action, taxation, and just about everything you can think of as a citizen of this country will be impacted by the decision. Those guys on the right are the ones who intervened in the Florida election and have interesting perspectives on torture.
When asked which justice they would not have nominated in the Saddleback interviews, the candidates each responded predictably. Again, for Saddleback, this was a Roe litmus test. Obama focused on Thomas and Scalia. He said Thomas was not a strong enough “Jurist or legal thinker.” Thomas now has almost twenty terms under his belt for Obama to consider. The real reason he would not nominate him, or Scalia is their interpretation of the Constitution. These guys will overturn Roe.

Predictably, McCain chose the other side of the bench. Ginsburg, Souter, Breyer and Stevens. He is much more straightforward than Obama, maybe because the audience is on his side, when he speaks the code words. He tells the pro life audience, in code, he will overturn Roe.

Even though he did not say it as well, on this one, I have to come down on the Obama side. These appointments are for life, and the thought of moving from a court defined by O’Connor’s balancing and Rehnquist’s firm hand to a one sided conservative forum just doesn’t sit well.

In summary, there is no clear winner for my vote. Lots of people have already decided, especially on the west side of Los Angeles, but I keep waffling. It could be effective marketing on their part, and it could be my seemingly genetic inability to commit. Either way, we are now in the last 2 minutes of the game, and a lot of stuff is going to happen before I have to make the final decision.

Monday, September 8, 2008

One World One Tech: Heresy Edition

I haven’t had a chance to write in a while because I’ve been traveling for my day job. By the time I get back to my room or on the plane I have absolutely no interest in blog building. So the following rambling dialogue has been rolling around my head without an outlet. It came out quickly and as my fingers channeled the semi coherent thoughts to the keyboard, they provided a gossamer thin filter of relevance and form when perhaps a steel sieve would be more appropriate. Please excuse the energy burst.

A common thread certainly emerged from the publishers. Games cost a lot, and they take a really long time now. Sure assets are expensive, but one of the biggest costs today is technology, and everyone is building it.

Recently, a bunch of game industry luminaries kicked the idea of a one console future. They said it was too hard to manufacture for of a lot of different platforms. Their right, it is hard, but their conclusion is stupid. Trip Hawkins knew this when he allowed Joe Montana Football to built on Madden tech. He needed a competitor in the market. The competition among the consoles not only gives us hardware advances on a regular basis, but it amortizes the expense of market growth across multiple companies. Growth fueled by in store promotion, price cuts to consumers, marketing dollars to publishers and other promotions. Do you see a lot of innovation coming out of your phone company? Why would we want to relegate the console to the status of appliance? Let’s take a step back and look at the enabling technology, not the hardware. Let the consoles compete at the hardware level, like television do, but let’s get enough people behind the technology to force them to modify their consoles to meet our needs.

Every publisher incurs redundant costs. When I try to explain the game development process to every Hollywood executive who wants to know whey games are so expensive, I start by asking "what if we started every film production with a discussion of how we are going to build the camera?" It seems kind of silly but it is what we do in games. Sure there is middleware and Mark Rein is going to chime in and tell me Unreal can build every game while it cures cancer and cures the subprime problems, but whether we are talking about Unreal, Gamebryo, Tech 5 or EA's announcement today of potential licensing of the Spore engine, it isn't really middleware. At best, it should be called quarterware and quite possibly tenthware, at a time when the industry needs something it can call Panavision. Even publishers who license middleware are building the same accessions as others already built and are encountering the same issues encountered by other publishers. Is it better to spend twice as much money to get half the solution you would have if you worked together?

The consumer is ahead of us on this one. They are looking for fun over feature set. Not games to make you cry hyperbole, just fun. Until very recently, game marketing, and green light decisions were technology driven. We would write the number of animations per character were on the box right next to the number of weapons. Until recently, there were great distinctions between games in these areas. Today, everyone builds out the same basic technology feature set, they just attack it from different directions. Sure some are prettier than others, and some work better than others, but is all there. Kind of like Howard the Duck and Star Wars, same team, same tech, but one worked a bit better than the other. Consumers don’t really care about tech, they care about what you, as a creator/publisher do with it. They consume entertainment based on entertainment. I’ve been watching the promotion for the return of Heroes, and not a single ad mentions the number of new weapons, powers or explosions. The writers put a new story in the same environment and the same tech they already built. Ed Del Castillo of Liquid Entertainment believes the tidal change in games occurred with Bioshock, Assassins Creed and Mass Effect. These games were reviewed and promoted based on story and experience, not feature set. Just like Howard the Duck or Meet Dave, technology alone will not sell a game.

Consumer expectations have led us to commoditize the feature set, but not the enabling technology. Game developers and publishers still build to the same feature set from a bunch of different directions. Not only is it adding tremendous time and expense to products, but the products released are waffle products. A little over baked in some areas and under cooked in others. In looking at Mercenaries 2 reviews, I see the inevitable comparisons to GTA. Even though the critics seem to like GTA better, they still say there are some things Mercenaries did better, and others GTA did better. The distinctions are based on technology. Both games were late because of technology, and both compromised based on time and expense. I would guess both encountered similar issues. What would happen if the leading developers and publishers joined in building a true middleware standard for the industry?

I know, I know. First reaction is “technology is proprietary, we are not going to share.” But think about it. No matter how bitchin’ your technology is, haven’t you ever looked at another publisher’s tech and thought about how it would improve your game? What if we are able to slice off a material portion of the tech development time and expense because it was amortized across the business? What if you could spend your time building assets and fun rather than tech? Do you really like engineers anyway? I’m kind of kidding on the last one. Sure, we are not going to get all the way there, but in an open source world we would get a lot closer than we are today. Your engine is pretty cool and useful when only you are supporting it, but how cool would it be if the whole community supported it. We already see the difference in trajectory between Criterion who did not release source and Epic who did. And accessibility to technology alone does not a great game developer make. Take a look at the film industry. Uwe Boll has access to the same tech as Steven Spielberg, has it helped him? With the creative power available today, technology is moving from the forefront of product differentiation and becoming a set of tools.

The next argument is going to be the console manufacturers. You are going to tell me they won’t support industry efforts. This comes from the knowledge of how we got here. The consoles purposely make it difficult to port. Graphic pipelines, memory management, it’s all different. They want you to make a decision early on to make the product better for one than the other. This is a game they can play with a disparate publishing community. So long as we don’t work together, they can play us off each other. Their tactics change when they see a hardware mover. Especially when the other guy embraces it. GTA, Microsoft paid to get it. Unreal, both invested in making the thing work because a lot of games were being built on it. The Industry Engine, if enough publishers are behind it, they will support it, and compete for the better integration.

We would also gain a valuable human resource benefit. The talent pool is very shallow. Schools are starting to put programs in place for game jobs, but most graduates are in a better position to learn a new position than contribute to the company. Once they learn the systems and tools of their first benefactor, they are very well suited to work at that company. Other companies use different tools and tech, and if they leave, there is a pretty steep learning curve. When I moved between law firms, policies were different, but the job was the same. Move between studios in Hollywood, same thing. You are going to tell me games are different, but they are no very different from the special effects industry. The industry is transitory, and talent moves across companies on permanent and temporary basis all the time. The tools and tech are fixed and shared the talent is not. When ILM has a big job, they call down to WETA, and borrow some people. Can you imagine Actard calling Ubisoft? “Hey we need more World War II stuff, can you send some of those Brothers in Arms guys?” Can you imagine hiring a guy, other than a concept artist, who can walk in, sit down, and contribute from day one?

This is all kind of a pipe dream. It requires a fundamental shift in so many of the practices we love. But there are baby steps to be taken. Maybe it is a new company, maybe it is Mosaic-like foundation, but something can start to organize, codify and document engines currently in use and accessions being built to today’s middleware. The only cost of access would be contribution. When you say you want to hold on closely to your cool bit of AI, re read the part of this post about the benefits of sharing. Linux and Mosaic both grew from sharing, and both created profitable companies on the periphery. As of today Red Hat is worth 3.6 billion dollars.

The only question is "Who's in?"