Sunday, May 30, 2010

Raising the Bar: Death of Mediocrity Edition



I went to see Eric Lewis, aka ELEW, a couple nights ago and just like the clip above, he gave it everything he had. He beat the shit out of the piano and by the time he was done, I could not imagine there was anything left in the guy. Eric's career is blowing up right now - search him and you will see - and he deserves it. Quality rises to the top, even if it takes a while. He and I joked about his years of work leading to his "overnight success."

That day I read more about the death the media. Newspapers and magazines are failing, network television is down, film attendance down, all the rest and I could not help but think about the parallels to game sales. These media are not failing, the bar is being raised. With all the choices consumers will not accept mediocrity. Consumers who are assaulted by media from computers, televisions and phones do not want more of the same. So much is free that we must provide value to get their time or dollars. Newspapers that work hard and offer value are thriving. Cable channels like FX and AMC are seeing increased viewership through quality programming that did not exist years ago and as I said before, every high quality game released since September 2009 has done great numbers. I don't have to say anything about Avatar. The common through line is quality. The people behind the success gave them "ELEW efforts".

Moving forward, rather than pointing to dying media or apathetic consumers, let's first ask whether we are providing more of the same or if we made an ELEW effort.

Wednesday, May 26, 2010

J Allard: Class Act Edition




There are far to many "role models" in the world and too few people to really admire. Every sports figure or actor is inevitably held up as a role model and they never fail to disappoint. While their effort to get to their position is admirable, the likelihood of emulating their role is slightly smaller than winning the supper lotto - twice. In the bright glow of these superstars we miss the ordinary guy who makes an ordinary gesture extraordinary. The guy you can really be if you just try hard enough. You have to be born Superman, but anyone can be Batman.

Anyone who has spent time with J Allard knows he is not an ordinary guy, but the act of leaving employment is pretty ordinary these days and exit emails are not often inspiring love letters worthy of publication next to Steve Jobs' famous commencement speech. Actually, I've never seen one. Many compare J to Jobs and in an alternate world where he sat a couple seats high in the organization he may have been him. J is the guy who fought to move the borg onto the internet and envisioned Xbox as the connected box long before anyone thought of game consoles as connected. The connection is what drove Microsoft to the front of this console generation.

With everyone from ZDNET to the Wall Street Journal speculating on his departure, J knew he had access to the world press and he did what so few people do. He used it well. Here is the entire email as stolen from Gizmodo:

Congratulations J. Thank you for your time and I wish you the best in your future endeavors.

From: J Allard
Date: May 25, 2010 8:56:08 AM PDT
To: "Robert (Robbie) Bach", Entertainment & Devices Division FTE
Cc: Senior Leadership Team
Subject: Decide. Change. Reinvent.
Decide.
My first job out of college 19 years ago was really something.
The receptionist typed out my visitor badge on an IBM Selectric typewriter at my interview – a reassuringly "high-tech" welcome in 1991. On my first day, I was ushered to an office that I would share with a co-worker and a spare-no-expense, beige Compaq 386sx computer. I fired it up, and my first dialog with this quasi-32-bit powerhouse went something like this:
c:\> ls
Bad command or filename
c:\> ps
Bad command or filename
c:\> man
Bad command or filename
c:\> whoami
Bad command or filename
I was obviously flustered; my new officemate taught me the magical incantation – "wzmail" – which launched an amazing program. Some would describe it as an email client with text editing disabled, but it was actually a time machine that was hardwired to "1982 BBS messaging systems." It connected me via the tangle of wires at my feet to the rest of our world via a protocol called "XNS." XNS, like Latin, I had learned a little about in college but hadn't ever actually experienced it in the real world.
In my first week, I would be asked to do a presentation covering the architecture, milestones and to state my "confidence interval" of the first commercial software project that I would oversee. My command performance was powered by a 3M overhead projector and transparencies I had prepared on the Xerox copier. I was subjected to intense "technical" questioning from the head of my division (a former marketing chief from 80's Apple) in a room filled with dormitory-grade oak furnishings. After surviving this rite of passage, I stopped by my I/O mailbox and was thrilled to receive 200 black and white business cards, which included our corporate Telex number and my very own Compuserve e-mail address. It was apparent after my first week that I was well equipped to set the world on fire.
My first post-college employer? Microsoft.
It was a complete fluke that I even interviewed. The idea of joining a company with more than 100 people seemed terrifyingly stifling to me. My networking, graphics, Unix and Internet passions and background suggested we didn't have a lot in common. The mission of "A computer on every desk and in every home" was ambitious, but ambitious circa 1985. By 1991, it was an assumed inevitability for those versed in technology and its adoption rate.
The ~30 million PCs in the world were dominantly powered by DOS, Lotus 1-2-3, WordPerfect and applications compiled by Borland tools. If you were on a network at the office, it was Novell Netware; if you were connected to the "net," your choice would have been Compuserve over your roaring 1200-baud modem. You'd buy your floppy discs and printer ribbons at a store called Egghead, and a program called TurboTax would have consumers lined up every April. MS-DOS 5.0 had just launched and we were deep in collaboration with the #1 PC maker – IBM - on a powerful new operating system called OS/2 intended to succeed it. I had joined a small team building a Netware alternative on DOS and OS/2 called "LAN Manager."
In spite of all of these warning signs and patterns, I still took the interview. At minimum the experience would serve as good practice for future interviews by more compatible employers. However, my interview experience turned all of my assumptions upside-down and drew me toward this place I've called home ever since.
During every interview, I'd challenge, "‘A computer on every desk and in every home' is quaint, but why stop there?" and the typical response would be along the lines of, "That's just our ante." I liked that... +1 Microsoft.
I'd push a little further and say something like "Don't you see the force multiplier in connecting all of those desks and homes and people together across the Internet?" and they'd say something like "Internet? Is that like Compuserve?" However it was said, these responses activated my flight instinct.
My speedball would be, "Well, why in the hell should I join this company that doesn't have a clue about the Internet when that's the next big thing? It's going to completely change the world! It's what I was put on earth to do! You guys don't get it!" and the calm response would be, "You're right. We don't get it, but it seems that maybe you do. That's exactly why you should come here. Come here and make it happen. Write the job description!"
I couldn't believe it, but it was impossible to dismiss the similarity and authenticity I felt in every conversation. On the flight home, I contemplated these discussions, the passion and IQ of the people I had encountered and their invitation to create my own space to drive a bigger agenda alongside them. It clicked. The "computer on every desk..." rhetoric was a ruse, the real purpose and ambition of these people was much, much broader: "Make the world a better place through technology."
Like every idealistic college hire, this was the unicorn I was looking for. I wanted to do something bigger than me – "change the world!" – with a bunch of people who respected and could augment my superpowers. I had visited the Justice League of Geeks and they had invited me in and had shown me the secret handshake.
The next day, I joined "The Tribe" – a group diverse in perspective, similar in skills and completely, totally galvanized around one central purpose.
Change.
It felt uncomfortably perfect (apart from the awful office décor), so I protected my youthful optimism by mentally deciding I would give it two years and revisit everything then. The almanac reassured me of the NW's snow quality, the traffic was nothing compared to Boston or New York and the promise of free soda, lame-but-subsidized cafeteria pizza, $32k/year and an MS-DOS t-shirt were hard to beat.
At my two year checkpoint, things were going along "better than expected." It was simple to extend my commitment - I was charged up by the progress we were making, the friends I had made, the plans we had made together and the culture and purpose that bound us. I even was allowed to expense copies of Snow Crash as a pre-read for team offsites… The unicorn was real!
Then one day it happened.
Someone ruined it all and shattered the fantasy. When no one was looking, some clown had somehow slipped into The Tribe and brought all of the walls crashing down. They shredded our slice of the vision, they scoffed at my offer to collaborate, they committed to a lifetime of obstructionist behavior and to do everything in their power to stop everything our team had worked so hard to do. The gauntlet was laid, "Read my lips, we will never ship TCP/IP in Windows 95." I was shocked. I was shattered.
I stormed out.
I walked out the front door in disgust and went to an 11am movie at Crossroads (the aptly titled, Point of No Return). About 30 minutes in I realized what a whiner and victim I was being and that in a company of 8,000 there were bound to be some misses.
I thought about how I stormed out the front door to my car and how the thought of leaving my cardkey at reception had actually crossed my mind. I walked out of the movie and I sat in my car. I took my cardkey out of my wallet and after concluding that I should lose the ponytail, I told myself, "You idiot. This is your invitation to change the world." I went back to the office and got right back to it.
[In truth, I cranked the Descendents really loud ("You can only be a victim if you… admit defeat") and flamed Herr Clownshoes to a crisp in wzmail, and then I promptly got back to it.]
Since that crappy day 17 years ago, every.single.time I've swiped that damned cardkey I've reminded myself of that invitation from The Tribe and our shared purpose.
I repeat the phrase silently in my head and I take it seriously. It's not about me, it's not about my career, it's not about the project or the product or the profit – it's about the central purpose and obligation we share to change the world and to build stuff that allows our customers and partners to do the same.
With that initial 2 year landscape it would have been very hard to predict what we would accomplish and how we would evolve over the next 2 decades. The 2nd place productivity and DOS company talking about "GUI" I had joined became the unquestioned driver of the PC industry, a networking company, an enterprise company, a communications company, an Internet company, a hardware company, a server company, an entertainment company and true to its heritage, it fuels each of these businesses with amazing software tools.
More important than any of the products, businesses, scale or profit that we've built together, we've helped redefine how people work, how they communicate, how they manage their lives and how they play. That's why I joined The Tribe.
Nineteen years later some things remain the same - the pizza still sucks, the wayfinding/signage in the buildings is hopeless and our business cards continue to lack any sense of expression. But most importantly, that common purpose to use technology to make the world better is still alive and well. That simple little "beep" we experience every day when we swipe our cards remains a reminder for all of us.
Reinvent.
If you've been following along, you probably understand just how difficult it was for me to decide to leave the tribe and explore new territory, but the time has come.
My passion for our cause combined with my obsessive nature has put many of my other interests on hold for a long time. I don't know exactly what tomorrow looks like – but if my focus has been 95% MSFT, 5% life until now, I know that the first step is to flip that ratio around. After wrapping some projects up, I will shift to 95% life and 5% MSFT. With that 5% I'll be working for SteveB on a couple of projects beginning this fall.
In response to the curiosity, no chairs were thrown, no ultimatums served, I am not moving to Cupertino or Mountain View, I did not take a courier job and I require no assistance finding the door. I do know that I'm going to help a couple of friends get their startups going (e.g. The Clymb), I'm planning some races (by foot, bike and off-road trucks), and I'm going to put some energy into my passion for design, the arts and philanthropy. For those of you reporting into one of my organizations, I am committed to working through all of the transition issues and assure you that The Tribe remains committed to the work you are doing and our purpose going forward.
If, at the next juncture, I decide to join a corporate tribe again, this place will definitely top my list. There are a lot of great companies out there doing terrific and meaningful work with better pizza, nicer décor and great implementations of "ls" on the desktops, but The Tribe? No one can touch our talent, our impact or our ambition. We're the only high-tech company with the track record and self-confidence to reinvent ourselves as we have. If you want to change the world with technology, this is still the best tribe out there.
Please, put my headcount and that cardkey "invitation" to good use. Find a college student that claims we don't get it and blogs tirelessly about our lack of agility. Track down an EE that has been focusing on fuel cells and has radical thoughts about power management. Or a social networking whiz who is tired of building little islands that go hot and cold and can't break the mainstream. Hire a designer who's given shape to 2 decades of beautiful automobiles and thinks we can sculpt technology to better connect to users. Infuse them with our purpose. Give them the tools. Give them lots of rope. Learn from them. Support where they take you. Invite them to redefine The Tribe.
Decide. Change. Reinvent.


Sunday, May 23, 2010

Transmedia:Not Just Talking About It Edition



Hollywood and gaming's hot buzzword is "Transmedia." The Producers Guild of America recently defined a credit for Transmedia Producer, MIT has a program devoted to it and in a possible sign of jumping the shark, there is even a "bootcamp" for you to pay USD 1,000 to listen to the underlying theory.

But while all these people are concerning themselves with theory, analysis and concern over credits - one of them even includes Prince of Persia in his bio - one guy is just doing it. Jordan Mechner created, designed, produced (and even programmed the first Prince of Persia) video game, received story credit on the film for writing the first draft of the movie script and wrote the completely sold out Prince of Persia graphic novel. This could be seen as another case of measuring success by finding work outside the game business, but Jordan is still working in games. His success lies in his ability not only to create franchise IP that can exist independent of any media, but the talent to maintain integrity across all media.

I would try to explain his role in more detail, but this guy in the New York Times did it much better than I ever could, so I will just wholesale steal his piece and post it here:

A Gamer’s World, but a Dramatist’s Sensibility

By CHARLES McGRATH
THE producer Jerry Bruckheimer likes to say that he can make a movie from almost anything. In his long and box-office-friendly career, he has conjured movies from books (“Black Hawk Down”), from magazine articles (“Coyote Ugly” and “Top Gun”), from the real-life story of a woman who was both a welder and a stripper (“Flashdance”), from a notion tossed around the office (“Hey, let’s make a movie about submarines!” which led to “Crimson Tide”). Most famously, and most lucratively, he has made not just a movie but a franchise, “Pirates of the Caribbean,” from a theme-park ride.

By that standard, Mr. Bruckheimer’s newest picture, “Prince of Persia: The Sands of Time,” which is directed by Mike Newell and stars Jake Gyllenhaal and Ben Kingsley, doesn’t seem much of a stretch. “Prince of Persia,” which opens Friday, is based on a popular video game. You could even argue that video games are what most Bruckheimer movies yearn to be: nonstop action, without the distractions of too much plot or complicated characters. But except for the two “Lara Croft” movies, which may owe their success more to Angelina Jolie than to their Tomb Raider provenance, the track record of movies based on video games is not uplifting. “Street Fighter” was notoriously unwatchable. The official Nintendo magazine said of the film based on Super Mario Brothers: “Yes, it happened. Let us speak no more of it.”

If “Prince of Persia” does buck the odds then part of the credit should go to Jordan Mechner, who created the video game on which the movie is based and wrote the first draft of the screenplay. Mr. Mechner is also a blogger, with his own Web site (http://jordanmechner.com/), and a graphic novelist, with two books coming out at roughly the same time as the movie: “Solomon’s Thieves,” illustrated by LeUyen Pham and Alex Puvilland, the first volume in a projected trilogy about the Knights Templar; and “Prince of Persia: Before the Sandstorm,” illustrated by several different artists, which is a prequel to both the film and the game that inspired it.

He is a sort of a nerd’s nerd, in other words — a Renaissance man in the overlapping worlds of games and comics and now movies. He is the first video game creator to be involved in a subsequent movie version, and he pitched the project to Mr. Bruckheimer by showing him a “trailer” he had put together of clips from PlayStation 2 game footage: lots of wall-jumping and ledge-walking interspersed with shots of a scantily clad princess. Keith Boesky, a video game agent and intellectual property lawyer who helped broker the deal with Mr. Bruckheimer, said recently, “Everybody these days is talking about transmedia, but Jordan is the first guy to actually do it.”

If Mr. Mechner is a pioneer, however, he is also, by video game standards, a bit of a relic. His main claim to fame is two games — Karateka and the original Prince of Persia — that he created by himself back in the 1980s using an Apple II computer, which is practically Stone Age technology. Sitting recently in the basement of Jim Hanley’s Universe — a comic book store in Midtown Manhattan — he explained that he developed Karateka, a martial arts game, while still an undergraduate at Yale. His model was his mother’s karate teacher, whom he filmed in Super 8; using an old technique called rotoscoping, he then traced stills from the movie onto his computer.

“I wanted to create stories that the player would experience by playing instead of watching; it became a bit of an obsession,” he said in a way suggesting that, obsessionwise, he probably hasn’t changed that much. Mr. Mechner, who is 45 and divorced, with two children, is small, intense, a little awkward; his sentences sometimes consist of hesitations followed by bursts of information.

The original Prince of Persia, which came out in 1989, now seems almost touching in its primitiveness, closer to Pong than to Gungrave or Steel Battalion. It’s in only two dimensions, and the animation is jerky and sketched in. (Mr. Mechner’s model this time was his brother, whom he filmed jumping off walls near their home in Chappaqua, N.Y.) But, unusual at the time, the game had a plot of sorts, beyond the usual overcoming of obstacles that gets the player to the next screen, and in the prince it had a character Mr. Mechner hoped the player would actually care about. “I wanted a game where if you missed and fell too far, it would really hurt,” he said, adding that where characters like the Super Mario Brothers were weightless and stylized, he wanted his to be flesh and blood.

Mr. Mechner, who when he wasn’t programming took some courses in film history at Yale, compares the early days of video games to the days of silent film and says that he had to learn some of the same storytelling lessons as, say, Georges Méliès, the French special effects pioneer.

Prince of Persia: The Sands of Time, on which the movie is based, came out in 2003 and was a reimagining of the whole franchise, which in the age of Halo and Grand Theft Auto had come to seem antique. Instead of just Mr. Mechner at his computer there was now a whole team of animators, actors, programmers. The game has a clever do-over feature, an important element in the movie plot, in which the player gets to stop time and rewind it, and what Mr. Mechner calls a “Double Indemnity”-like narration, which doesn’t become entirely clear until the very end.

Mr. Mechner’s greatest asset as a moviemaker, in fact, may be that his sensibility is as much a dramatist’s as a gamer’s. Mr. Boesky, who was also involved in the “Tomb Raider” deal, said the original movie proposal included just a single paragraph of back story, while Mr. Mechner had a 20-minute pitch of new, nongame-related narrative. It could have been a story from “1001 Nights,” with an aging king; a Shakespearean relationship among three princes, one of them adopted; an evil vizier; a beautiful, tart-tongued princess; and a magic dagger. “We’ve had other game people come to us, but Jordan had a nice, worked-out story and interesting characters,” Mr. Bruckheimer said from London, where he was promoting the film.

“What appealed to me,” he added, “was the whole arena. There haven’t been very many movies set in that period.”

The movie imagines a medieval, pre-Islamic Persia — part historical, part fantasy — and centers on the prince’s quest to expose his father’s assassin, win the trust of the suspicious princess Tamina and keep the mysterious sands of time, which control history itself, from falling into the wrong hands.

“Jordan has gobbets of really cool detail,” Mr. Newell, the director, said. “He knows all about the ancient Persian texts; he can tell you what the Silk Road was like and how it felt going from the desert to a great river valley.”

Mr. Newell, best known for “Donnie Brasco” and “Four Weddings and a Funeral,” is not the first person who comes to mind when you think of big-budget action directors. “I’ve worked with huge numbers of people before, but they were all schoolchildren,” he said, referring to one of his more recent projects, “Harry Potter and the Goblet of Fire.” When Mr. Bruckheimer first approached him, he added, he deliberately did not mention that “Prince of Persia” was based on a video game, which was probably just as well, because Mr. Newell had never played one. “I tried to do it,” he said about the Prince of Persia game, “but I kept falling into the bloody revolving knives.” So he asked some of his assistants to play the game for him, and, he recalled, “they would spend half the time sneering at my incompetence.”

From the script Mr. Bruckheimer sent him, Mr. Newell said, it was clear that the movie wanted to be “a great three-ring circus of entertainment,” and that’s what “Prince of Persia” tries to be. The movie, especially in the trailer, does not disguise its video game origins: there are lots of scenes of a very buff Mr. Gyllenhaal running, jumping and climbing as if embarked on a rigorous parkour workout. And yet, game elements aside, “Prince of Persia” is almost a throwback, a swashbuckling yarn that owes something to the “Indiana Jones” movies and even more, perhaps, to “The Thief of Baghdad.” It’s a movie so old-fashioned that if it didn’t have a video game tie-in, no one would make it nowadays.

Mr. Newell said that he “cherry-picked” from the game, especially from its visual details. “I’d say, ‘That armor is really good, let’s talk to the costume designer,’ or ‘Those swords are really cool, let’s have some of those.’ But the notion of a characterless, emotionless, mechanistic story, which is what you almost inevitably get in a video game — that was never in the cards for me.”

In making the movie, he explained, he found himself drawing a lot on films that had meant a lot to him when he was young, especially “Ben Hur” and “Bad Day at Black Rock.”

He quickly added: “Of course, everyone’s taste is omnivorous, and that’s by no means the only kind of movie I liked. I’m the kind of guy who’s only really happy when it’s Hungarian, in black and white, with subtitles.”



Thursday, May 20, 2010

Battle Royale for the Living Room: Google v. Microsoft Edition



A few days after the Googletv announcement and the press is still looking at this is a battle of Apple v. Google. It is certainly a lot of fun to watch the snipes go back and forth between the two companies but their battle is WWE - only entertainment. The real battle for the living room is between Microsoft and Google and Apple does not even have a horse in the race. Despite their clear market dominance on the set top, Microsoft continues to maintain a stealth position relative to mainstream press.

I recently spoke with a senior executive at Microsoft - real Microsoft not the game guys - and he was talking about their competition. He said they accept losing out to Apple because Apple makes cool pieces of hardware and that is just not what Microsoft does. However, those Google guys are a different story. Google is a bunch of engineers with the same drive, the same intellect and the same strategic goal of world domination. They are scary. The guy was proven right today when Google announced Googletv and jumped into the "who can be better cable than cable battle." Sure the video looks like a Simpsons parody of a real product, but Google is throwing down the gauntlet and challenging what until today, was Microsoft's clear path for control of the living room.

Googletv appears to have a very slick interface and perhaps even more accessible than MIcrosoft's fantastic Live interface. It is the kind of thing even a mom can figure out. But the video ignores little things like DVRs, Xbox and PlayStation. - and this is where Google falls down. Google assumes the market thinks like them and we will all dump what we have for something incrementally better. It is easy to do when you are moving from one search engine to another, hard when you fighting dustbunnies behind the entertainment center while you look for an extra socket.

Google thought consumers wanted to be able to sit at their desk and order a a cool phone direct from Google. They didn't, and the program was dropped after a few months. Google now believes consumers are unhappy with their existing set top boxes and will buy a new one to get pretty much the same service as they have today. When in reality, people just don't like to buy extra boxes to plug into their televisions without a good reason. Xbox and Playstation sell for the games. Cable boxes are rented to get more channels. Even TiVo is a pretty hard sell and has not achieved game console level success. The only set top device to achieve game console success is a game console. Googletv has partners who are building them into televisions and offer the convenient option of buying another box to plug into that extra HDMI port you don't have on your TV. Kind of the same strategy as 3DO, Phillips CDI, TiVo and others who licensed technology to hardware partners over the years and have not been able to generate the numbers achieved by dedicated platforms. While they fight to change consumer behavior, they are playing catch up to Microsoft's 40 million plus installed boxes and however many DVR's and cable boxes with painfully similar functionality already out there. There is no reason to anticipate anything other than a slow install ramp while Microsoft continues to add features, content and easier interface through Natal - you didn't really think the thing was for games did you?

It would be really neat to see a competition heat up between Microsoft and Google, distracting them from Sony, and allowing Sony to take over games while the battle ensues for set top box supremacy. Unfortunately, Googletv will look more like Nexus One.


Tuesday, May 11, 2010

AAA Games are DEAD?: Not Dead Yet Edition





You thought I was going to write about West and Zampella. If I did, I would probably say something positive, like “it is great the guys were recognized and like Activision's hire of the Visceral guys without a specific team or project in mind, EA is putting its money where its mouth is and truly recognizing talent.” If I were to say something negative I would say “this was EA's tat for Activision's tit in hiring the Visceral guys and we are all merely pawns in a giant pissing match between two over grown adolescent companies.” I could also reference Activision's complaint, and if true, wonder what kind of numb nuts representative would fly his client up to meet with a competitor while the client is still employed and in line to receive a very large bonus? But everyone else is talking about these things and its been analyzed and interpreted by more people in more directions and than an Allan Greenspan speech. While it is always fun to provide commentary on the wildly entertaining albeit completely unproductive intercorporate sniping, let's just get back to games. Let us cross our fingers and hope everyone follows through. If they do, West, Zampella, Schofield and Condrey will all get paid and we will get some great new games. Big games. Big games initiated at a time when many publishers said they were dead.

I hope you are all sitting down when you read this, and you may want to close your doors so no one sees you reading this insider secret. I am about to share something shocking and secret: Game publishers are reactive. No, really, they are. We all think their halls are teeming with forward thinking entrepreneurial executives chomping at the bit to take advantage of the free reign they are given to sign deals with developers and designers of innovative and ground breaking games - but they are not. They know what makes games great and love to talk about it – shortly before they talk about all the reasons their company would never buy those games. Unfortunately these heroes and heroines are lorded over by the evil bean counter run forecasting department who must be able to empirically prove that a Natal driven game about a four headed penguin who farts missiles will move 8 million units in 2014. When in reality, if Mr. Forecasty pants was able to make these kinds of predictions accurately he should be making a billion dollars working for a hedge fund rather than sitting in a windowless office making phone calls to game buyers and poring over NPD reports that only come close to approximating the sales of games when the installed base was smaller, the games were worse and the world was in the worst recession in eighty years. Because the greenlighters are fighting last year’s war, game starts – I’ve never heard those words put together before but they say it on the news all the time when referring to housing – were down dramatically in 2008 and 2009 and were on the verge of confirming a self-fulfilling prophecy. Here is my favorite publisher response of the past year. It came up in connection with a small budget/high quality XBL/PSN game, you know, the thing they are all saying they want now:

“The good news is we love the game.

“Great, when do we start?”

“Well, there is more to the story.”

“Ok”

“We feel the game is exactly the type of game we want to play and has the hooks and originality we have not seen in any other pitch.”

“Great, so do you want to send a short form or a full agreement.”

“Well, we can’t do that. You see there is nothing else like it on the market.”

“I know, you just said that.”

“With nothing else on the market, we can’t benchmark it for a forecast.”

“But you should not have to. You said this is what you want to play and you have not seen anything like. The budget is exactly what you asked and you break even after selling about a dozen units or something.”

“I know, but we still have to build a model, supported by sales of similar product.”

“So how are things selling on XBL/PSN.”

“Well, that’s another problem. The numbers aren’t released, so all we can do is use the information we have from developers and a bit from our own sales to try to triangulate sales. We think we are accurate though.”

“So you are taking the forecasting requirements of the high budget, heavy market testing, high risk sector of the market and applying it to the low budget, hard not to break even, throw shit against the wall and look for a break out opportunity?
“I think that sums it up fairly”


They started down this course because a very rough 2008 and 2009 led many publishers to believe the market for big games is gone. Going into the end of last summer, they were saying there is no more demand for USD 60 shiny disks and we have to focus on the smaller, sound bite like, short attention span XBL/PSN games consumers are buying. This coupled with the growth of freemium and facebook games and a publisher mindset that success on the various platforms is mutually exclusive, slowed game starts to a crawl, when in reality, the different platforms are complimentary distribution channels not businesses. Rather than seeing them as a threat, we should get down on our knees and kiss the feet of these platforms, before rising to thank our lucky stars for their acting as the crack vendor in the school yard. Providing the gateway game to tens of millions of people who did not know they liked to play games they are opening vast new markets for us. 83 million people are playing a bit of Farmville. They are checking their farms, gaining status, p’wning their friends – in their own special way – and starting to get hooked. They are getting that little rush of control in their otherwise uncontrollable world. Given the right opportunity, they sill step it up to a flash game, maybe a bit of Wii fit and some Wii sports with the kids. Before you know it they are mainlining Halo multiplayer and justifying their lost weekend in Mass Effect. Like film relative to stage plays and television relative to films, these channels provide an opportunity for market expansion, not cannibalization. Publishers were flat out wrong. The success of these platforms was not the cause. The fall off in sales in 2008 and early 2009 was not because the people didn’t want big games. It was because they didn’t want bad games. Publishers were only off by two letters, but it was very hard to see.

After years of consistent and persistent growth and profit based on the massive installed base of a single console, we entered a period of confusion. As much as I like to say history just keeps repeating itself in the console cycle, this time it did not. Historically, one player got to one million units first, declared dominance and rode out the rest of the console cycle. Anyone who tried to sell an Xbox only title in the last cycle, or Gamecube before that, knows that what I am talking about. Nintendo
stood alone with NES. Sega grabbed and older audience and dominated with Genesis. PlayStation handed N64 it's lunch and PlayStation 2 made Xbox all but non-existent to publishers. In this cycle Wii took an early lead, but consumers did not buy software. 360 jumped ahead in the US but PlayStation was relevant, and some times surpassed 360 in Europe - and Japan disappeared from everything. For the first time publishers could not pick a clear winner. Once they decided to develop for both, they found it was really, really, really hard. Not really hard like making games for other consoles was hard. Hard like making Italian trains run on time hard. Publishers were forced to make the most expensive games ever, on more skus than ever before, into a still very small base – all while they thought consumers did not want them.

Product was not bad for lack of trying. It takes a while to figure out how to build to a new console. When one of my clients was developing a launch title for N64, they described the first slate of titles as "waffle products." Like the first waffle out of the iron, they would be a bit burnt on one side, a bit under cooked somewhere else, and probably leave a bit of itself in the iron. You could say the same thing about PS2 and Xbox titles. After one round of development, publishers and developers understood what they were facing and started to crank out titles of an even consistency. But then we hit this generation.
My best description would be apple fritter. It is the king of donuts and the complexity overlord of the donut case. The creation of one apple fritter has no correlation to the next. You have to balance dough, apple volume, timing, and oil temperature just right to make the perfect fritter. There is no consistent shape, no format and not even a hole to make sure cooking is even. One factor out of balance, and you are off - not by a little, but a lot. Burnt outside, uncooked middle, too thin, clumped glaze, so many things can go wrong. They can even all happen on a single fritter.

With a few exceptions that were rewarded with outlier status sales, the first games were not great – in fact many were bad - and more expensive than prior generations' games. Publishers responded to the lack of interest by reducing marketing budgets. Consumers responded by not buying them in droves. Publishers extrapolated 2008 and 2009 market data and determined console games are dead. They had to rethink the types of games they were making because people did not want what they were making. Sure GTA and COD Modern Warfare sold, but that was because they are franchises, or so they thought. September 2009 provided a hint of what was confirmed Q1 2010. These games did not sell because they were franchises, they sold because they were good. Consumers expected value for the dollars spent and they raised the bar. When publishers released a great game and told them it was out there, it sold well. Not just well, but really well. Arkham opened their eyes at the beginning of the fourth quarter. Then Call of Duty:Modern Warfare 2, Assassin's Creed 2, Darksiders, God of War 3, Final Fantasy XIII, Bioshock 2 and Battlefield Bad Company 2 all turned a profit. They are all high quality titles. Fortunately, reactivity operates in both directions. Publishers who stepped out of the market two years ago - three Japanese publishers have not commissioned a game from an external developer since November 2008 - are starting to get back into the market and almost all publishers are engaging developers in discussions surrounding big game development. Unfortunately consumers will have to wait because the shift does not help the empty 2011 or 2012 slates.

Publishers are not dealing with an educated consumer. The audience is smarter and communicates better than ever before. Game quality is identified immediately and rockets around the social networks at the speed of light. They are forcing publishers to step up their game and it is good for all of us. Publishers are reacting to an educated consumer. After being beaten over the head in 2008 and again in 2009, they realized it is better to spend the same amount of money on fewer better games than to throw a bunch of shit against the wall. Trying to profit from a low budget bad game is akin to pissing money down a rathole. James Cameron understood our consumer when he raised money for Avatar. He was successful because he convinced his investors of the need.

“I was really impressed by their understanding of the business, that there is so much competition these days for people’s leisure time that you have to create something you won’t find on TV, on computer games, the Internet, to draw audiences into the theater,” [Avatar Investor] Clayton says. “This wasn’t purely a creative process for them, like it is with some producers. Jon and Jim absolutely understood the need to cater to audience tastes.”


Let’s hope the trend continues and publishers realize games are entertainment luxury goods. We’ve now seen big investment rewarded with big sales in this cycle. Sony showed us they could make a profit on USD 44 million spent on God of War and the publishers of the other titles mentioned in this post could not have spent an awful lot less. If you read the posts on this blog about distribution, marketing, used games and everything else I whine about you know there are plenty of things to be fixed, but in spite of all of these short comings, wise publishers will be back in the money – somewhere around 2013.

Coming Soon – why publishers are so very, very wrong about Xbl and PSN . . . . .