I’ve been thinking a lot lately about the video game industry, because it’s dramatically different today than it was just a few years ago. Mobile games are pwning – by way of the word free – and in some ways they’re still just getting started. Publishing and distribution have re-structured themselves, and thousands of new developers have come and gone.
As a developer — in particular one who has been in the mobile gaming segment almost since the beginning — I find myself asking: How did we get to where we are now? What is it that we do these days — what is it that we’re creating? Within the structure and limitations of a marketplace, distribution channels and platform providers, we’ve always been free to create — that’s what we do. But how free are we today? How has the cost of that freedom changed? I have a few thoughts.
New World
We’ve indisputably touched down on the new world of digital distribution over large-scale, fragmented device markets. What’s left of the old retail world of physical boxes on shelves — much like video and music — are practically remnants of a bygone era, nostalgic, archaic.
Traditionally, video games have been joined at the hip to advances in graphics; medium and media have been inseparable. But while electronic games are a priori a function of the hardware and software, the medium no longer lives and dies by a 10,000 polygon sword — the heady days of multi-million dollar budgets, huge teams and deep pockets to fund them have been all but been shown the digital door.
We’ll continue to have higher-performing GPUs, smaller footprints and new display technology. We’ll get cheaper devices, more form factors, and we’ll do more and more at the shader level. So stuff like OLED, Oculus Rift VR, rogue consoles and Glass will bring on new ways to experience games. But the fundamentals — the look, feel, depth, mechanics, the gameplay — are no longer a function of technology as much as they are side effects of high-traffic, disparate platforms.
Big productions — some would say quality itself — cannot compete in the new world. While we’ll continue to see small numbers of deeply designed, cinematic-quality games, they’re already outside the general milieu.
New Problem
Where does that leave the rest of gamedom? Today it’s social (Facebook and browser) and mobile games. Tomorrow, it’s mostly mobile games, of which social has begun to be merely a category. And there’s the rub, because the biggest problem we face (also our biggest opportunity) is mobile games.
I’ve said before that the biggest problem in mobile gaming is discovery, but that’s not entirely accurate, because discovery is really a symptom of another problem, the platform. But wait — the mobile platform by itself isn’t actually the real problem either, at least it didn’t start out as a problem. The platform has, for better or worse — in fact for worse — become almost exclusively a function of two things: Free-to-play (F2P), which allows players to play without paying, and what I’ll call (for lack of a better term), Free-to-create (F2C), which is the low barrier-to-entry to mobile game creation and development.
By themselves, F2P and F2C are beneficial, desirable, worthwhile. Together, they may be eating games alive.
F2P
Similar to its grandfather (the game demo), F2P works by enabling players to optimize for a false positive: It costs players nothing to “try” a game to see if they love it; if they’re in love, they will want more, and to get more, they will pay; if they’re not in love, they don’t feel quite so duped, dumped or disappointed.
Of course F2P is more sophisticated than dear old grandpa and relies on a careful in-game monetization plan. Developers must take care to give players the right combination of “free” and “paid” experiences and/or virtual goods. Risk/reward quality, quantity and timing can be very tricky to get right and adds significant costs to development.
It’s similar to a subscription model (some of the first modern F2P games were MMO’s), except you “play as you go” rather than “pay as you go” — in other words revenue is more a function of specific events rather than time. When implemented well, F2P can create a windfall for the developer; when implemented poorly, developers miss crucial opportunities to make money or, on the flip side, players feel ripped off or manipulated.
F2C
F2C, too, is a potentially wonderful thing. The idea is that anyone, with some effort, a tiny bit of money and a reasonable amount of time, can design, develop and deploy her own games. The new developer gets to learn something exciting and rewarding (design and programming), gets the distinction of doing it, and dreams of making a bundle.
The platform gets the benefit of massive amounts of content to sell, theoretically for every conceivable taste, desire or need that billions (yes, billions) of users may have. This makes the platform more popular, draws in new customers, makes current users stickier and encourages all developers (amateur and professional) to compete for consolidation — the vertical slices that emerge from a large-scale, rapidly growing user population.
The opportunity cost is so low that, not only do novel games emerge from unlikely, would-be developers, the sheer size of the developer population greatly increases the chance of game content that more closely or clearly taps into current cultural trends and preferences. We’ve seen this numerous times on both iOS and Android already, despite the large number of games made by new developers who didn’t quite put in the effort or time.
F2C + F2P = F2CraP
In the heyday of feature phone games (2001-07), mobile games were mostly P2P (Pay-to-play), developed mainly by professional teams who sold their wares by the dollar or multiples thereof. This was also the case in the early days of smartphone games (2007-09, mostly iOS), even though free apps and games were almost always an option.
The charts were actually more volatile than they are today, because there were fewer games but also because players voted with their money up-front. Developers had to make better games, and a Minimum Viable Product was much more like a late beta than today’s MVP (at best, early alpha). They almost certainly had to do a better job not just with the game design but with copy, screen shots and website support. But they could price their games higher and had a much better chance of being noticed on the deck — they were competing against hundreds of other games in any given genre, compared to thousands today.
Back then, developers watched mobile markets monthly, perhaps daily at launch — much as they had done on other platforms. They tended to use more traditional means of marketing and P&R where possible and affordable, and did their best to score first-party deals with device manufacturers and platform providers. Most developers also had publishing partners who were ready and willing to fund development. The platforms were new and the distribution all-digital, but the old model of publisher-developer worked as it always had.
It’s a complex history and worthy of a much longer post, but suffice to say that both F2P and F2C began to dance. As a few professional developers early on saw the potential for massive amounts of traffic via F2P, their successes attracted more would-be developers into the ecosystem — something that was only possible because of the low barrier-to-entry — F2C.
Amateur game developers and small teams of semi-professional devs flooded the mobile markets with new games (and apps, of course), the large majority of which were, shall we say, less than exemplary. This quickly had the effect of cramming the digital shelves so full that legit P2P game revenue (with few exceptions — most notably Angry Birds and Infinity Blade on iOS) fell off dramatically. So many legit devs fired the only weapon they had at the time: F2P.
And in fact there was a period — practically all of 2010 — when there was an explosion of very good games that would have otherwise been P2P, “for free”. Again in turn and fueled by the lottery winners — a small handful of developers who gathered massive traction through F2P, bolstered by the new mobile gaming press online — players responded en masse to F2P over P2P. The platform essentially trained players to expect — no, demand — free games, while at the same time it trained new developers to expect — no, demand — an F2P (or an F2P/P2P combo) monetization model.
Fast-forward to 2013, where, as of this blog post, we’re a few games shy of 140,000 in the iOS App Store alone (more on Google Play), growing at rate of over 50 games per day, most of which are F2P or have an F2P companion in addition to P2P. It’s an exceedingly large zoo.
The net result of all of this is that, unlike the traditional game industry in which developers must get better to succeed, developers in the mobile ecosystem are more strictly content providers, where the quality of a game is much less important than its random chance of success. While the old world was hit-driven, the new world is more like a lottery. This is similar to what has happened in the video and music industries, who got there faster. The end result is the same: Massive markets have been flooded with massive amounts of sub-par entertainment, and consumers have been trained to expect it.
Where’s the Value? Where’s the Fun? Where’s the Magic?
So where’s the value? For players, it’s an almost endless sea of games streaming to their devices, free to play. It’s a dollar here and a dollar there, and occasionally $29.99 for that special purchase after a dozen hours of casual “commitment” to the game.
It’s hard to tell just how much fun players are having — one remarkable aspect of the ecosystem seems to be the high level of expectations players have in player reviews. Perceived value frequently makes no sense to developers, as players often expect hours of gameplay for a dollar, yet a reliable (small, but reliable) percentage will spend far more money on a mobile game than the $60 they were willing to spend on a triple-A boxed console title that a world-class dev team spent three years making.
As for the magic, it’s difficult to find high-quality mobile games that care much about classic game design — out of such a huge number of titles, few seem to bother with the tenets of good design: Meaning, mastery, skill/learning, flow, risk/reward balance and so on. Whether this is good or bad is yet to be seen — “magic” may be changing its meaning.
For developers — professional or otherwise — the value is hard to peg. While it’s most certainly a race to the bottom, it’s starting to converge toward a crossroad between Big Scale/Big Data and Little Production. Publishers rarely fund anything that isn’t a sure bet, trendy, or derivative (this is not uncommon in traditional games, either, but’s it’s far more prevalent in mobile); not surprisingly, it’s been reported that the large majority of mobile developers make one game and go out of business within a few months.
For the exceptions — the lottery winners and those in it for the long haul — they’re having to completely re-think not only game design but how they fundamentally run their businesses. As Trip Hawkins said in Dean’s recent article, “There really ought to be an institute for studying virtual economies… It’s about thinking about your game like you’re the merchandising manager at Bloomingdale’s. Once you have made a game that has good lifetime value, then you can afford to buy marketing.”
Well into my second decade in the industry, I haven’t met anyone yet who I think could picture themselves as a merchandising manager at Bloomingdale’s, any more than I can. No offense to merchandising managers, but the image doesn’t quite lend itself to fun, or magic, to the kind of people who write shaders, master 3D modeling or lie awake at night creating puzzles in their heads for a living.
I hope I’m wrong, and I see the potential for a return to high-quality games as well as new ways of discovering games. If we can solve the discovery problem, understand the scale much better and reset player expectations a bit, we may see a return to an industry that enables developers to really create, and players to really play.
In fact we must solve these problems. Nothing is F2P forever, and the irony of F2C – that thousands of game developers who were free to create just a few years ago probably are working at Bloomingdale’s these days, maybe as merchandising managers — is unbearable.
Fabulous write-up from Dean after he moderated a panel on mobile monetization at the GDC this year. The room was packed even though it was up against other, much sexier sessions.
As Dean correctly notes, that’s a solid indicator that the toughest problem in mobile gaming is discovery and monetizing F2P games. Here are a couple of money-quotes:
It’s all about sustaining an audience that has a natural tendency to peter out after a few weeks. One chief executive at our Mobile Summit joked that the best strategy a game company can pursue, if it has a hit game, is to shut down and not try to do another one. That’s because the hardest thing is to keep a string of hits going.
The good thing is that the winners in mobile monetization can produce billion-dollar games. The bad news is that it feels like a lottery. For the rest of the companies in mobile, there is hope if they can just hang in there.
We talk about this all the time — it’s a lottery. We used to call it “hit-driven” but that term seems archaic now. Welcome to the new Lotteconomy.
This looks promising. Great devs behind it. And DeNA. And Unity. I hope this game gets serious traction along the road to higher mobile quality games. They’ve been touting their control scheme as a major feature and, although it’s not exactly brand new or 100% unique (we were experimenting with one-finger-rotate and touch-move FPS controls back in ’09 — players were not quite ready for it then), it’s the right approach at the right time with the right team.
I couldn’t get Silas Warner out of my head yesterday (The Digital Antiquarian – a fabulous blog — has an absolutely wonderful write-up on him, do go read it if you’re at all interested in the history of video games).
I worked with Silas back in the early ‘oughts, at Analog Devices, long after his legendary work at Muse Software. I use the word “work” loosely, since we were on different teams (Silas was focused on bringing our audio product, SoundMax, to Playstation, while my job was SoundMax tools for PC and online). I didn’t interact with Silas more than a handful of times, but I can confirm that he was indeed one-of-a-kind, with an exceedingly bright mind.
While I’m 6’4″ myself, Silas was an imposing physical presence at almost seven feet tall. He was only a few years older than I am today, but suffered from kidney disease, diabetes and arthritis. He didn’t get around very well, and when he spoke, it was clear that his body was making it very tough on him. He seemed to be in constant pain.
I was smitten by his reputation and brilliance but repelled by his presence and suffering. I wish I’d been a real friend to him, as if through friendship I could have somehow brightened his day or eased his suffering in some tiny way. He died just a few years later in 2004, a man who achieved great things despite life-long illness and difficult odds. I missed a chance to learn from him and an opportunity to practice compassion and empathy, perhaps making something better of my own character in the process.
Silas, here’s to you – may you glitter as stardust, wherever you are.
Wonderful video of a few famous failures:
People only ever really riff on failure if they later became successful — failure isn’t very interesting unless it leads down the same path as success. Success stories are inspiring, especially if you’re failing (or have recently failed) at something. To wit, they are motivational, hopeful, empathetic.
They are also oversimplified quantizations of reality that tend to resolve to somewhat predictable buckets of low and high points. They are more story than anything else, and story is a most addictive form of crack-cocaine-for-the-soul for us human-types — it’s pretty much wired right into us.
Ultimately I find the most interesting (and most difficult) thing about failure and success is how they are redefined when they’re happening. Success is a standard and failure is a function of success that, well, failed. But the standard is often redefined, by re-writing the function to, well, not fail. The real heart of the success/failure thing is not the story as it unfolded but as it unfolds. It’s a matter of granularity. Be in the moment, and the dichotomous, binary Hollywood film script you use to analyze your life fades away, unimportant. Be in the moment, and you steer your ship up top, on deck, instead of down below with a compass and a map. Be in the moment, and you get better at trusting yourself. Be in the moment, and do.
This just in from GamesBeat. I hate when a write-up probably missed its own point. Quote:
[Kiloo chief creative officer Simon] Moller believes that this works because it pools knowledge and skills. Sybo worked as animators on a previous Kiloo project, so everyone knew they had development skills. Kiloo, on the other hand, understood the free-to-play model and how to implement it in the game.
Puh-lease. My guess is that co-development was key because the financial risk was spread out. That makes way more sense than pooling knowledge and skills — if it were just about the talent, one company would have probably contracted the other as WFH.
I’m disappointed by Marissa Mayer’s decision, as reported by AllThingsD’s Kara Swisher, to ban all remote work at Yahoo. While there could be real justification for this move, the way it broke — through a memo from Yahoo’s head of HR, Jackie Reses — is a smoking gun for a case of company process replacing trust. Form suggests function.
Presumption: Yahoo identified a problem with the productivity of remote workers. This may be a big presumption, since it’s possible that no problem was identified and the move was good old unwarranted assumption. This happens all the time and has as much to do with individual philosophy as it does legitimate qualitative experience. I don’t really have a hard time imagining that meeting:
CEO: “We have how many people working remotely, again?”
HR: “Hundreds or more.”
CEO: “Well that doesn’t make any sense, we have to all pull together to make Yahoo the best Yahoo ever! We can’t have a bunch of hoos off running around with all us yas back here at the office! We didn’t do that at Google!”
HR: “Then the question is, do we accept lower productivity by allowing remote work, or do we increase productivity by banning it?”
But let’s give Mayer credit where credit is due and presume there was legit data behind the decision. There would have been data presented to her by her lieutenants showing that remote workers in various departments were less productive than their in-house counterparts. The data would have been mapped to ROI in some form and backed up by the research camp that suggests that working from home is less productive (as opposed to the camp that touts remote work — there is plenty in both camps). The whole thing would have been properly spreadsheeted and powerpointed.
At that point Mayer could have either asked HR to make the bill into law (presumably what she did) or ask her managers to target the specific employees whose productivity was down and bring them into the office to see if they improve. Making law was the easy way out — it was a common case of adding a process instead of identifying areas that needed trust. The other way — to fix specific problems with productivity and trust within the organization — would have involved more time, effort, follow-through and data mapping.
And given the bridge over troubled interwebs on which Yahoo is teetering, it’s a not a stretch to see that going the quicker, easier corporate-initiative route might make some sense. There are too many Yafish to fry as it is and Yahoos need to buck up and they still have a hundred more Yagenda items to get through and all that. But I can’t quite go there — too often companies make broad, easy strokes when detailed sketches are needed to draw forth real change, make direct impact and build and maintain trust. Productivity has a hard time springing forth from large-scale process alone, and Yahoo’s decision in this case sure seems like a little red flag. They have enough of those already.
I was in South Carolina recently with a client and we got into a discussion about our first jobs and what we learned. I grew up on a farm in Western Kentucky so I had plenty of jobs from an early age. But I consider my first real gig to be a small sign-painting business in high school. It started when I got a shot at designing and painting the facade for the first video arcade in town, “Time Out”. The project required me to work with highly-opinionated people, manage others and make a tight deadline no matter what.
Once I’d done the main design work (the logo in the photo) and was ready to begin the paint job itself, I discovered almost immediately that I was in over my head — I had less than a week to complete the work (you can’t see it in the picture but there was about a 40 ft. wide x 15 ft. tall wall that had to be hand-painted with over a dozen colors according to my meticulously drafted proposal) and be ready for the weekend grand opening. I quickly acquired a co-founder — my friend Rick who I’d known since first grade — who was happy to join up. Rick was trustworthy, artistic and smart. We finished the job ahead of schedule.
The experience was a perfect fit with my growing passion for video games. I ended up spending a good portion of the paycheck in the arcade itself, one quarter at a time — and I’ve always wondered if the owner knew he’d get most of his money back. But it wasn’t long before people in town noticed the fancy logo at the new “hi-tech” arcade. I was thoughtful enough to make sure the owner had some makeshift business cards I’d put together in case anyone asked, and over the next couple of years I managed to snag several other local design/painting jobs. It was all part-time, hit-and-miss kind of stuff, but I kept it going and was able to save some of the money for college, learn how to manage my time, keep customers happy and balance Maker with Manager.
But most important, I learned I had to hustle. Since my work was always on display, I knew I couldn’t slack off on a job or it was over. I got my first tiny taste of running a hit-driven business — where I was only ever as good as my last product — in a small rural town in Kentucky, drawing logos and painting signs.
If you’re interested in the kinds of transitions taking place in the video game industry, this Matt Chat interview with Chris Taylor is required viewing. The interview was at the end of January; within weeks Chris killed the Kickstarter for Wildman and Gas Powered Games was acquired by Wargaming.net. Chris is one of the greats, and it’s wonderful to know that Gas Powered will continue on in some form. But, wow — what a ride.
In this small but interesting (puffy, but interesting) article in December, Flurry summarizes at the end:
In an industry that has historically been considered more artistic and subjective, connected devices and the ability to rapidly iterate on already shipped titles has ushered in an age of science and measurement. In short, data has enabled the “gamification” of the mobile industry.
Are we in fact becoming an industry of measurement scientists? Have we evolved (or devolved?) from the lesser demons of art? Are we now Big Data Gamificating Analysts? Is that which is a game now that which is gamified?
Probably. But it’s temporary. We won’t annihilate a medium that has relied on tenets like story, delight, mastery, learning and fun.
Right now, Big Data is the story we’re creating as we grapple with Big Scale. We need it, it needs us, and while the industry caters to a massively social mobile gamified bulletin board, a sophisticated marketing machine and a pseudo-altruistic tech behemoth, we can catch our breath and devise new, sticky ways of interactive Show and Tell.
It’s important to see this period as a transition and not real change. There are many artists, programmers, designers and producers in the business who are struggling to find their place, do their work and create delightful experiences for massive numbers of on-boarding gamers in the noosphere. The numbers truly are staggering. And we saw it coming. But the scale at which we’re operating is more difficult and complex than we could have possibly imagined.
How do I know we’re transitioning rather than changing? I don’t. But I feel it — not an easy thing for my data-loving mind to express. More important I know that many in our industry feel it, too, even those who are at the crest of the Big Data Wave, even as they hone novel ways of gathering and scrutinizing every little noo in the noostream.
