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Used Games Are Not the Problem
Jun 25th, 2010 by worldblee

Videogame publishers and analysts are blaming used games for shortfalls in revenue and profit. But the problem goes much deeper than can be explained by any increase in the sales of used games. If people are flush with cash, they will buy a new car. If they’re worried about money, they’re going to buy a used car.

It’s similar with games. Consumers aren’t trying to rip off game developers when they wait a month or three to buy a used copy of the latest hit game—they’re spending less and forcing themselves to wait patiently because a new AAA game is $60, and that money is slotted for rent or food or childcare.

Publishers, led by my friends at EA, have struck back with new pay-for-play access to online features. If you buy a new game, you get a coupon for online play. Buy a used game, and you’ll have to fork over $10 or so for those privileges. Will this slow used game sales? I doubt it. Will it increase revenue for publishers? It will increase DLC sales figures, but it won’t affect the fundamental problem for the industry: there are only so many dollars that can be allocated toward entertainment. The $10 EA takes in from the guy who bought Madden two months after launch is $10 he won’t be spending on NBA Live (sorry, NBA Elite—as one of the guys from the original NBA Live launch, I have trouble letting that one go).

If you try to nickel and dime your customer in a time of financial hardship, you’re endangering your customer relationship over the long haul. In these days of quarterly performance, that lesson is often lost in the boardroom—but ultimately the price will be paid. It will probably just become the problem of a new management team that’s brought in after the current regime is forced out because of declining market share.

A harsh assessment? Most definitely. But I’ve said it before and I’ll say it again: a better strategy is to lower pricing on frontline games. You want to put the hurt on used game sales? Try selling your sports game for $20. Make online play an extra charge, let hardcore fans buy roster packs and extra levels, release limited editions, do what you have to do to extract more value from those willing and able to pay more. But realize that recession is a time to increase market share, not a time to boost profit margins. Maintaining revenues vs. 2008 or 2009 is not going to happen. Publishers will make less money, because there’s less money in the hands of consumers.

If you want to blame someone, blame the financialization of our economy that is transferring cash from the hands of workers into the hands of bankers and other financial wizards who ran up bad bets they expect taxpayers to cover. That’s the real reason people have less money in their pockets for games.

But don’t make the cost of entry so high your customer starts looking for a new door. Like the one to his or her local Gamestop, where they can buy a used copy of last season’s hit game for $40 less than your brand new game. Give your customer a real choice. Put yourself in their shoes and price your games accordingly.

It’s the (Videogame) Economy, Stupid
Mar 3rd, 2010 by worldblee

While games may provide an escape from reality, the global games business is enmeshed in economic reality. A large scale, polished experience like Uncharted 2Dragon Age, or Modern Warfare 2 requires investment, which requires revenue, which requires customers willing and able to pay money. With the current generation of consoles (although more so for Xbox 360 and PS3 than for Wii), revenue has been driven by the $60 list price, roughly three times higher than that of a DVD movie and four times more than a music CD.

That price has started to creep down as publishers realize that anything other than new AAA games won’t sell at $60. EEDAR has a good newsletter on the topic of recent price trends that you can read here. The average list price on Wii is now $40 compared with $50 in 2007 (via EEDAR), which is in line with the trend for previous console systems at this point in the cycle.

However, for PS3/Xbox 360, the average game price has actually risen by 6% compared to what games cost at system launch. When you couple that with declining household income, you have a real problem. There is a long term economic shift happening before our eyes, and there is no expected result we can see that points to an upswing in improved household incomes—which leads to less disposable income available for games.

A year ago, we predicted game publishers would use the economy as an excuse to lay off workers, and this has sadly come true. We also said, “entertainment performs well in recession compared to consumer goods.” This has held true, but the drop in consumer good sales has been so steep that performing relatively well still means a drop in revenue.

This where the story gets political—or at least some will perceive it that way. Why is the world economy faltering? Is it because of drought, natural disasters, low worker productivity, strikes, or war? No. Although war and natural disasters have hit many countries, they have not affected overall output. The economy is suffering because it has been financialized, with resources diverted away from production, workers, and families to a narrow group of financial elite who gamble with the livelihoods of the rest of us.

If you’re not familiar with the concept of financialization, the following graph may help you understand the issue:

GDP share of US financial industry (via Wikipedia)

The so-called booms of the 80s, 90s, and 00 years were not fueled by a growth in consumer income, they were driven by speculative bubbles. And where does the profit from these bubbles go? Into the financial sector, as the chart shows. The most recent boom, that of housing, was fueled entirely by borrowing (for which the taxpayers picked up the tab, shoveling some $13 trillion dollars in aid, loans, and guarantees to the financial sector while the rest of us shared well under $1 trillion in bailout money). Former Assistant Treasure Secretary Paul Craig Roberts describes the issue succinctly:

Unable to maintain their accustomed living standards with income alone, Americans spent their equity in their homes and ran up credit card debts, maxing out credit cards in anticipation that rising asset prices would cover the debts. When the bubble burst, the debts strangled consumer demand, and the economy died.

It’s not a pretty statement, but it reflects the reality we face. And there are no factors lined up to improve the situation. Government spending, the only practical way to pull a country from recession or depression, is being curbed except in the case of military spending. This will likely further contract the US economy. If consumer spending, which constitutes 70% of the US economy declines, the government is the only institution capable of filling the gap. However, the US government shows no signs of investing in the consumer economy as the vast majority of its bailout money has gone to the financial sector.

So where does this economic fiasco leave the gaming business? The best, hottest games will still do well, although the prices will move downward to reflect lower household incomes. If you have a hit, it’s still a good investment to spend behind it, both in development and marketing. And the low end of the market, whether in casual games for social platforms, iPhone games, or used games, is still healthy since people still want to play games (especially if they’re free or cheap!). The economy hasn’t impacted the viability of gaming as a leisure time activity. Where the economy has hit and will continue to hit most deeply is the middle of the market, the games that are good but not driven by marketing and/or buzz to be the ‘gotta have’ games. These games are too expensive to develop for small, low overhead developers, yet they don’t produce the economic return that major publishers are looking for.

If people aren’t really excited about your game, they’re not going to buy it in droves even if you buy a Super Bowl ad. Money is too tight to splurge on titles that are not essential for your videogame library—a rental or used purchase down the line, maybe. But not an automatic purchase even if the reviews are good.

And when people buy fewer copies and/or spend less to purchase each copy of those AA games, that’s bad news for a lot of developers. We see trouble ahead for the ‘middle class’ of game franchises, developers, and publishers alike. Is it time to go big or go small—while abandoning the middle?

If so, we expect this will mean a further siphoning of jobs from the industry with publishers continuing to close developers they own to save on overhead. Continuing to roll out DLC to support existing titles could serve as a buffer for jobs, but most of that DLC will come from teams already employed on the hit games. It can keep the content teams busy while the core design teams are working on the next big iteration, but it’s not likely to serve as a panacea for creative workers.

Things We Can Learn from Blizzard
Sep 26th, 2009 by worldblee

With World of Warcraft, Diablo, Starcraft, and the original Warcraft franchise, Blizzard is not only one of the most successful developers ever; they have a track record for quality that’s hard to match. Why are they so good? Using a recent Gamasutra interview with two development leads as a jumping off point, we’ll look at how Blizzard design principles can be extended—or not—to other games and creative endeavors.

In the interview, six themes useful to developers emerged, and we’ll look at these in turn. From Concepticate’s point of view, these themes can be applied to many creative projects, not just games. (Note: The bulk of this post first appeared over two columns I wrote for the Examiner.com – David.)

1. Endless iteration

“Here’s the secret to Blizzard games, and this is a secret that won’t help any of our competitors: endless iteration. We’ll take something, we’ll put it in the game. Maybe we’ll like it when we put it in, maybe we won’t. We’ll leave it in there for a while, we’ll let it percolate. We’ll play it and play it and play it, and then we’ll come back. We might throw it all out, or we’ll throw half of that out and redo it.

“It can be a long time, but it is fun to work on as well. That’s the thing that keeps you going. Multiplayer always works, and the builds are always playable. We’ve played them constantly, and it’s fun. You actually look forward to the weekly play session even though the game is still in progress. That’s what keeps us going, and that’s also why it takes so long. We’ll do it over and over again until it’s just right.”

– Kevin Martens, lead content designer

Analysis: Blizzard gets forever to make their games, right? While most of us are stuck with a constrained development schedule, ship dates that can’t move because of quarterly revenue goals, we need to ask ourselves just how Blizzard can afford that extra development time. Why? Because it works and their games have been successful enough to bankroll the additional months (and years) of development.

No matter how much experience designers have, there’s no better way to prove a point than trying out a feature to see how it works in the game. The proof is in the playing. And this appears to be what Blizzard does—put it in, tweak it, take it out, put it back. It’s not the most efficient way to develop, but if you really want to hone your design, exploration and experimentation are two great tools.

There are certain things you can try out at a low level, using simpler geometry in pure gameplay tests. This is a practice I’ve always encouraged, but for some things—visual design elements, characters, etc.—you need to see them in context. No shortcuts there other than building your 3D elements out of modular re-usable pieces. But in general, the earlier you concentrate on experimentation, the less costly it will be to the development process

What Blizzard does is essentially re-investing their royalty revenue back into game development. Rather than building a whole bunch of different games and hoping one of them takes off, they focus on multiple elements for a single game. If you have a strong concept, this is great. It goes without saying that you want to start with a good concept before you invest heavily in iterating on it…

2. Find the line by crossing it

“[A] Blizzard philosophy that may have been there but may have not been disseminated across the entire company, which is, ‘You find the line by crossing it.’

“I think we’ve gotten really good at that now, allowing ourselves to push things to a point where they go too far, and then you look at them and you say, ‘Oh, okay. Now we know where the line is.’ But if you’re trying to just edge up to the line, you might never find it.

“That’s the goal here, to push things as far as they can possibly go.”

– Julian Love, lead technical artist

Analysis: In today’s clone world where games are sold based on their association with existing titles (it’s GTA . . . in space!), there’s little incentive to dial things up and down, tinkering to see just how far you can push technology, weapon powers, outrageousness, or whatever. It’s safer to take an assumed safe point, perhaps doing some tweaking around it but never straying far from your comfort zone. But let’s face it; with so many games out there, it’s harder to get noticed while playing it safe. Go big, and see what happens. If it works, go even bigger. You’ll see the point where it gets ridiculous and you can reel it back in.

This goes hand in hand with the iteration discussed above, but here we’re talking less about discrete elements and more about the properties of elements—not necessarily trying out a different character or item but seeing how far you can push an existing character or item.

3. Build games you can play for years

Diablo II is still on the PC sales charts every week. Over and over again, you have a big Christmas rush, and it bumps off, but then it’s back on in early January again.

“I think Diablo II is the standard for this kind of game, so largely what we’re thinking about is making sure that we do the series justice—which we feel that we are—and making sure we’re trying to expand the market. Personally speaking, I hunger for a game like this, one that’s going to last for a long time—something we can play for ten years, like Diablo II.”

– Kevin Martens

Analysis: Too often, we focus on providing a game that pays off in the first ten minutes of play to the exclusion of long-term satisfaction. In a corporate world fixated on instant results, this is natural. But even from a strictly financial perspective, Blizzard’s strategy has paid off. Diablo II, as Kevin says above, is still selling nine years after its release date. That one heck of a long tail.

Crafting your game with care and eye to the long term means you will take fewer cheap shortcuts. You will take the effort to fix a weak level rather than figuring most players won’t make it that far into the game anyway.

Games that players keep playing yield not only continuing sales of the core product, but opportunities for add-ons, compilations, special editions, etc. Make one game really well, and your long-term prospects will be better than if you make four average games.

4. Everyone can play

“[E]veryone has a PC, and we try to keep our system requirements down as low as possible. That’s one of the ways that we can make sure to appeal to enough people. Some of the really cutting edge games that come out for PC require a brand new video card and probably more RAM at least, if not a new CPU as well. That’s really rare with Blizzard games. I think that’s one of the reasons we still keep doing well.”

– Kevin Martens, lead content designer

Analysis: Blizzard’s emphasis on low barriers to entry goes beyond the hardware requirements for their PC games. While Blizzard games appeal to hardcore players, they’re not difficult to get in and play. Seriously, who can’t play Diablo? There are strategic elements to the game, but the basics of clicking on the map to move or clicking on a character to attack it could not be simpler. World of Warcraft is the same way: there’s plenty to do in the game, but the basics are idiot-proof.

This philosophy is not going to shock anyone with its originality, but it bears repeating: the more players you invite into your game experience, the more will be able to enjoy it. The more you shut out, the more you limit your audience.

5. Make everything as awesome as the most awesome parts

“One of the reasons we keep retooling the Barbarian stuff—some of the Barbarian skills were done a long time ago—is because as we added a new class or added higher level skills in, we did something else that was more awesome. And part of the Blizzard design is that if something is too awesome, we generally try to make everything else as awesome as opposed to pulling that one back.

“That’s one of the reasons that the iteration takes a while, but it’s also one of the reasons why everything is over the top. The example about art—you find the line by crossing it—applies to the design as well. You make things way cool, smashy, explodey—everything. Then you pull it back a little bit, for balance reasons more than anything.”

– Kevin Martens

Analysis: The efficient way toward getting your game noticed is to have a few really cool or innovative features—a new cover mechanic, a new way to use the controller, or a great story premise, for example. Raising the rest of the game to match the high points? That takes a lot of dedication and work. This tip is not for the faint of heart.

But if you can get your team focused on a kind of friendly competition, you can raise the stakes of the development. When engineering does a great job, challenge the art team to do the same. When one character looks great, challenge the other character artists to match the level of quality. The only thing to watch is overemphasizing things that don’t matter—objects that do not matter to the player should not get as much attention as ‘foreground’ issues that are central to the game’s premise and gameplay.

6. Every voice matters

“It doesn’t even have to be within your area of expertise. If I have an idea for a spell effect, I can go right to Julian and say, “Hey, what if the guy did this and ice went out his spine and blah blah blah?” and vice versa. Anyone. QA guys come in and offer brand new class ideas. It’s very open-ended. It’s the good ideas that come to the top. It doesn’t really matter where they come from.”

– Kevin Martens

“Even in QA, we have a core value that says every voice matters. Literally, every voice. Anybody, even sometimes outside the company—you listen to what they’ve got to say and consider it, which is exactly how we got to a new form of [the Barbarian's skill] Whirlwind. Even though it wasn’t the message we wanted to hear, there’s something to it.”

– Julian Love

Analysis: Every developer says they do this. The question is whether or not they take it seriously. Not having worked with Blizzard, I don’t know if they do this as well as they used to, but it’s a critical component of company culture to encourage.

Without naming names, I used to work at a large publisher. It wasn’t like every game we made was great, but feedback could move across channels and come from anywhere. QA people were encouraged to criticize products and share ideas, and eventually the QA guys would become assistant producers or product managers and move up from there. They had started where they heard directly from customers (QA guys worked on customer support as well), and they carried that forward into their careers. When the company got so large and successful that people at the bottom couldn’t contribute anymore, the company started to go downhill.

Listen to what everyone says—a person’s title doesn’t mean they can’t have good ideas about things not in their job description. It doesn’t mean that everyone has great ideas, just that you should listen to the ideas themselves without worrying where they come from.


Does Take-Two’s Bioshock Delay Presage Greater Quality?
Jul 14th, 2009 by worldblee

One of the most frustrating things about working in the gaming industry is the focus on quarterly results. Time after time we’ve seen games that needed more polish released to fit their slot in the quarterly revenue queue. When one title gets pulled in to ‘save’ one quarter, another game has to be accelerated to fill out the next quarter. And so the vicious cycle goes.

It’s not a phenomenon unique to games, of course. The corporate obsession with quarterly revenue, which drives stock prices that drive executive compensation, crosses most industries. And that’s to the detriment of customers and the long-term health of the companies and their workers. The true worth of any company is in the quality of its products and the strength of its relationship with its customers. Neither of those factors is represented in short-term economic returns.

The mark of quality?

The mark of quality?

If there’s any upside to the economic downturn it’s that gaming companies are taking advantage of the fact their quarterly and annual revenue in 2009 is going to be down anyway, so why not look to maximize titles for 2010. Take-Two got into the act big time yesterday, delaying not only the highly anticipated Bioshock 2 but Mafia II, Max Payne 3, and Red Dead Redemption until calendar 2010. EA has also made noise the past couple years about increasing product quality and shipping games ‘when they’re ready’. (That’s quite a different philosophy than I experienced when I worked there, believe me.)

The sad truth is that the economy won’t be picking up anytime soon. While press reports endlessly hype ‘green shoots’ and any positive data they can turn up, the fundamentals don’t support any true recovery. A lot of government money has been pumped into the banking system but it’s not reaching consumers. Unemployment continues to rise, wages are decreasing, and consumer wealth has decreased by a whopping 13 trillion dollars since the latest bubble began bursting.

For game developers and publishers this means you need a quality game to succeed in the marketplace. The old hype machine and channel stuffing won’t get the job done. Having their rose-tinted glasses removed by economic reality is making game purchasers ever savvier. Whether they actually read game reviews, hear from friends on Twitter and Facebook, or just ask the GameStop salesperson if the game is any good, they’re demanding good value for their hard-earned dollars before they commit to a game. And if they want it, they may wait until they can get it used—or just rent it in the first place. Only if they really want to play it longer than a weekend will they pay $60.

Sales numbers, which are expected to be down substantially when the new NPD report comes out tomorrow, are showing publishers the stark reality of this. And if it means that games get a proper gestation cycle for development then it might, just maybe, be worth it. These days you have to look for positives where you can get them.

Demo Play: A Step in the Right Direction
Jun 15th, 2009 by worldblee

In an interview with USA Today, Shigeru Miyamoto revealed this week that Nintendo is planning to add a new help feature to Super Mario Bros. Wii. Called ‘Demo Play’ (for now), it will allow the player to choose to let the CPU play his or her character through a difficult part of the game.

Its a me, Mario, and I can play as myself now!

It's a me, Mario, and I can play as myself now!

Here’s USA Today’s summary of the feature:

Beginning with the upcoming New Super Mario Bros. Wii (due this holiday season), players will be able to pause a game during a particularly difficult level and let the game take over to complete the level. Press a button at any time to resume playing. This will help reduce barriers of entry for new or younger players – without purchasing a strategy guide or resorting to websites that list cheat codes.

The response from the fan boys of the gaming community was typically harsh. On GameSpot’s article on the topic a user named Koopatrol summed up the hardcore response to the feature:

I understand games are supposed to be fun, but what happened to skill? Gamers are supposed to face challenges they can’t get through.

For young male gamers his attitude makes sense. Games mean different things to different people and for core gamers the challenge is a huge part of the fun. Saying they beat a tough game is a badge of honor and they don’t want n00bs to be able to say they got through a game if they used Demo Play for all the hard parts.

But for the gaming industry, Demo Play is a belated recognition that most of us, particularly the ‘maybe’ gamers that Nintendo is trying to reach, want to have success when playing a game. We play games for fun and missing a tricky jump ten times in a row is not fun–it’s frustrating. Most of us get plenty of frustration in the rest of our lives; we game for entertainment more than the challenge factor.

If we followed the logic that more difficult games are more fun, why not remove the user interface and let the user type in code on a command line to launch the game? Or make them play blindfolded?

The challenge for developers is most of us are core gamers. We recognize that our games should be accessible but since they’re accessible for us, we don’t see the problem. “This game is easy,” we say, casually zipping through a level that we’ve played a hundred times by the time it’s reached alpha.

But the gamer playing through the game the first time at home often encounters problems not anticipated by the development team. He or she may not know the level boss is vulnerable to fire and that he needs to equip the flamethrower he found on level two to have a chance of victory. If the player can watch Mario navigate through the level properly, he may be able take control and rip through the level himself after seeing how it’s done–or perhaps he just wants to see what the next level looks like and is happy to never go back and replay the difficult section.

And there’s no reason the player should have to replay a level time and time again–games are not a competitive sport unless you’re actually playing by choice in a tournament or other competitive venue. The more we force players to conform to a standard of expertise to play a game, the more we limit our audience.

From Concepticate’s point of view, features such as Demo Play are long overdue (and it’s no surprise that Nintendo is the company bold enough to break the mold; they’re #1 right now for a reason). Reducing the barriers to entry helps more people to discover the magic of interactive entertainment. And for those who decry Demo Play as turning gaming into passive entertainment, watching a game is part of the fun. How many times have you watched a friend play a beautiful game and been entertained? Sharing the experience is much better than playing alone and if having some training wheels helps your friends or family join in the fun–and if you don’t want to use the feature don’t activate it. But I have a feeling that even the most core gamers will be tempted to use it if they fail repeatedly in certain situations–they may eventually wonder how they got along without it.

However, there is a downside to Demo Play of which we should all be aware. If you have an autopilot function players can use as a crutch, designers may be tempted to not hone play mechanics and level design as much as they might otherwise–in crunch time it’s inevitable that certain things get less attention than is ideal. If you know players can get around a tough section you may be more likely to think it’s OK to leave more fiendishly difficult gameplay scenarios than you would if autopilot was not an option. Demo Play should be an option for less skilled gamers; it shouldn’t mask poorly conceived gameplay. If people are using Demo Play in a level you need to ask yourself: are they unskilled or is this level just not fun enough?

That caveat aside, we’re looking forward to getting to the next level in Super Mario Bros. Wii even if our gameplay skills are not up to par. Knowing that Demo Play will be an option makes us more eager to open the box and start playing.

Judgment Day
Apr 21st, 2009 by worldblee

I don’t want to play Wii Fit right now. My weight is up a few pounds and if I step on the Balance Board Wii Fit will tell me that I’m moving in the wrong direction from my weight goal of a 22 BMI—and I don’t want to get chastised.

Wii Fit, preparing to judge me

Wii Fit, preparing to judge me

Has the fear of being judged by a PC or video game ever kept you from buying or playing it? If so, you’re not alone. Whether it’s perceived difficulty, fear of multiplayer competition (online or offline), or any numerous ways of being shamed, most of us don’t want to play games that are going to make us look or feel bad.

(Of course, there is another class of gamer who seeks out tough challenges so they can affirm their gaming skills. They’re often referred to as hardcore gamers. This post isn’t about them. It’s about the rest of us.)

For teams working on games, whether from the development or business side, having a strong sense of how much hand-holding and challenge your audience wants is critical. There’s an old adage that to determine game difficulty, have your team play through the game and then take what they call ‘easy’ mode and set it as ‘hard’ mode, making two easier modes below it for normal gamers. That’s not a bad rule of thumb in terms of level design and AI tweaking, but it doesn’t take into account how the player is treated for what the game perceives as success or failure.

If the player character dies and it’s ‘game over’, then you’ll have a brutally difficult game that only hardcore, old school gamers will want to play. If there’s no way you can fail in the game (whether through the character dying or some other metric) then you have a game that hardcore gamers will hate—but other audiences may appreciate.
But between outright success (you beat the whole game) and failure (you’re dead; game over) lie a multitude of smaller outcomes. How you communicate to the player in these smaller outcomes is every bit as important as the philosophy for winning and losing.

Going back to Wii Fit, the animation that plays when you achieve less than two stars for an event (showing your avatar slumped over in defeat) was really hard for my wife to get over. It almost made her stop playing the game altogether. And when did she see it most? Right at the beginning, before she got better at the games, at the time when she needed her confidence boosted. If she hadn’t really wanted to improve her balance, she would have walked away from the game. Anecdotal evidence suggests that few Wii Fit owners play very long after their purchase, and I would posit that the game’s negative feedback plays a factor in this (the abysmal amount of time it takes to get in and out of an activity, coupled with the lack of a real ‘career’ mode are others, but that’s a discussion for another day).

Nintendo may laugh off this issue since they’ve sold a boatload of Wii Fit units and it doesn’t cost them money if no one sticks with the game for long. But what if you’re selling your game through online trial? If you have any missteps in user feedback during your trial you’re not going to make any sales beyond the hardcore gamer—you can kiss that larger potential market goodbye.

This is a factor I’m facing right now with a client developing games for the casual market, and I get on my soapbox about it on a weekly basis. We’re taking it seriously both in terms of the game’s challenge, especially early on, and in how we provide feedback to the player. Any lost sale that occurs during the game’s trial takes money of their pocket, and ultimately, out of mine too.

If we in the game industry are serious about expanding the games market, we need to take a hard look at how we provide positive motivation that encourages success and keeps players gaming—and also how we let people know they can play better without making them feel rejected. If we keep doing things they we did in the past there’s a chance we’ll someday end up like the music CD market: facing declining sales and relevance.

The Recession vs. the Console Cycle
Apr 7th, 2009 by worldblee

Game publishers and developers have been laying off workers right and left. Game stocks are depressed. EA, Activision Blizzard, and THQ, among others, have announced quarterly losses. But game sales are not down—in fact, US sales were up 19% in 2008 compared to 2007.

The old adage says that entertainment performs well in recession compared to consumer goods. And it’s true. While I wouldn’t want to launch a pricey new console in today’s economy, there is a vibrant market for quality games.

Recession advertising

Recession advertising (and yeah, I am linking to a stock image)

Let’s look at our situation in 2009 compared to the environment of 2005-2006 when the Xbox 360, Sony PlayStation 3, and Nintendo Wii launched. During that period game publishers and developers faced a falling curve of demand for PlayStation 2 and Xbox titles while the market for so-called ‘next-gen’ titles had yet to materialize. That meant that R&D costs were up while revenue for titles based on that R&D investment was still low.

You’d think that the stock prices for game publishers would have been lower during that time, wouldn’t you? But if you look at the record you’ll see that companies like Electronic Arts had a robust stock price of around $60, more than three times its current price of $15-20 per share.

So what is going on?

One factor is that the large publishers haven’t created healthy studio systems on par with the Hollywood studios of days of yore. They want a large staff around when it’s time to make a hit game, but when production is done they want those costs eliminated, pronto.

And as publicly traded companies their CEOs and Boards of Directors answer to shareholders (including themselves) who want to see stocks go up, up, up. At the hint of financials that are not rising at a healthy clip—and remember that while industry numbers were up, the numbers at individual companies were not necessarily as healthy—their answer is to cut costs. Capitalism doesn’t care if profits come from rising incomes or cost cuts; profit is profit.

So that means layoffs for internal development teams and a continuing reliance on outsourcing for development. This will bring development costs down since external studios pay their workers less and offer fewer benefits than the big US publishers, especially if they’re located in countries with lower living costs and/or government tax subsidies. It also lowers fixed costs since you’re only paying people when they’re working on a project, and if the contract is milestone-based, you’re only paying if you’re getting the game you want.

This means the situation for creative workers is worse now than it was in the last platform transition even though the market for games is larger now than it was then. The economic meltdown gives game companies a plausible reason to cut their staffs while slowing salary growth or even implementing wage reduction. Because we’re at the point in the cycle were console technology is well known and game development risks are lower, publishers don’t need as much experienced talent as they would if they were preparing to launch PS4 titles. Thanks for your help; don’t let the door hit you in the ass on your way out.

This is not to trash game publishers; they’re merely acting in what they perceive are their interests. But for creative workers and for game developers it offers opportunities as well as challenges. If you’ve saved your pennies and can subsidize starting up quality IP that appeals to a sizable audience (remember the Concepticate adage of the right game with the right message for the right customer at the right time) you are in the driver’s seat, no matter what’s happening with game publisher stock prices or the overall economy. Know what your partner on the other side of the table is thinking, make sure your business case is sound, and seize your opportunity.

And should you fail, you can always go back and work for the man when the next generation of consoles comes around. This business goes in cycles and your experience will still be needed.

The Game is the Message
Mar 12th, 2009 by worldblee

Before I started working in the videogame industry, I had the common artist’s conception of marketing: that it consisted of lies disseminated by weasels. There certainly is some of that in the worst marketing campaigns, but good marketing has neither of those elements. Good marketing amplifies the truths that exemplify a game, and a clear product vision can make a good game better.

A game’s identity shouldn’t be something that’s tacked on after the fact to try to sell it. The game’s identity should be agreed on at the start, and while events–a great new gameplay innovation, resources leaving the project, a competitor coming out with a similar vision, etc.–can alter it, everyone working on a game should know the game’s identity all the way through the process.

An example of this is the EA SPORTS brand. Along with its catchphrase of, “If it’s in the game, it’s in the game,” I and a lot of people working on the games and brand internalized this as, “everything you love about sports, in a box.” If you were working on a hockey game, you knew that scoring, fighting, and smack talking fit in the game. Other things that might appear in the real-life sport–long periods without a score, playing for a tie, favorite teams that never, ever win the Stanley Cup–obviously didn’t belong in the game. That clarity made game development simpler since most of us were on the same page from the get-go. This is not to say that all EA SPORTS games were great (they weren’t), but they were better than they would have been if we had conflicting visions.

Contrast that with a game that sprang into existence to fill a revenue hole, exploit a game engine, or capitalize on an existing genre (and we’ve all worked on at least one of those if not all three). The programmer thinks he’s making one game, the producer another, and the executive a fourth. Meanwhile, the product manager is struggling to come up with a vision that all parties will approve.

Publishers have tried to alleviate the situation with  development milestones that require signoff by multiple shareholders, and that’s a step in the right direction (although process is not a substitute for organic agreement). But how about the independent developer that is trying to make a great sci-fi game based around rhythmic fighting. How does the developer ensure their vision makes it all the way through the publishing chain to their potential customers?

I believe the answer is that a) they can enlist the help of someone like myself to craft an identity that includes a strong positioning statement and strategic marketing document supported by audience metrics and backed by the game’s feature and development plan, or b) hunker down and work on said documents themselves. You don’t need to spend a lot of money if you’re willing to put in a lot of work and research on your own–marketing is not rocket science (and if it is, it’s of the vinegar-and-baking-soda variety).

The alternative is plowing ahead and throwing yourself on the mercy of your publisher. But, like a band that signs a bad contract with a record label, this gives away a key component of your identity, and your destiny. If you put in the effort to create a coherent vision from the get-go you’ll always be in a stronger position.

The Tao of Marketing
Mar 10th, 2009 by worldblee

Ying-yang symbol

I didn’t come to marketing from a marketing background; I was just a writer and editor who kept getting promoted. After a few years I eventually got a mini-MBA marketing course on EA’s dime that gave me some good retroactive training, but I’ve always tried to keep things as simple as possible when handling the marketing side of a game launch.

My general philosophy is this:

The right product with the right message for the right customer at the right time.

If you have all four of those elements working together, you will have something special. Of course, the hard part is knowing when you’re on the right track and then executing and communicating your concepts successfully. To judge whether I’m on the right track I use all data (hard and soft) I can get my hands on, previous experiences, and my gut as I interpret the who, what, where, and why of the intended customer or player. It’s a lot easier to state in a blog entry than it is to execute it in real life, no doubt about it…

I had to give a talk once to a group of Berkeley MBAs so I broke this down a little further to stretch things out before I got to examples of videogame launches:

Natural Simplicity

  • The right game with the right message for the right audience…
  • Keep It Simple, Sugar

Effortless Action

  • Know where you’re going and you can get there
  • Keep your messages in harmony
  • Many paths lead to the same goal

Spontaneity

  • …at the right time
  • Remain open to positive changes

Compassion

  • Listen to your customers
  • Look at your situation from the point of view of your customers (and your partners)

Let me add in closing one thing that I preach constantly, which is, “Don’t be afraid to fail.” I’ve learned a lot more from my failures than my successes. You want to control the scope of your risk when you’re on shaky ground–don’t bet the farm the first time out–but you’ll never have a great comeback if you haven’t failed first.

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