Game Developer Funding Events

This is the first post of an ongoing list of game developer funding events, to keep more explicit track of the frequency of non-traditional game-related funding (usually by VCs) that’s going on in the industry. I’m not including Kickstarter events at this point (would be too much of a timesuck) and the list is not meant to be definitive by any means — it’s just a few bits here and there that show up on my daily webtrek, which includes excellent resources like VentureBeat’s Deals Channel. The list is only for actual game developers or studios.

August 2012

Company: Innovative Leisure
Funding SourceHummer Winblad
Amount: Undisclosed Seed round
Summary: Seamus Blackley is “focused on building games for ‘the new arcade’ of iOS devices”. Team includes Ed Rotberg, creator of Battlezone; Owen Rubin, creator of Major Havoc and Space Duel; Rich Adam, creator of Gravitar and co-developer of Missile Command; Ed Logg, co-creator of Asteroids and Centipede; Dennis Koble, creator of Touch Me and Shooting Gallery; Tim Skelly, Cinematronics arcade game designer; and Bruce Merrit, creator of Black Widow. [Source: VentureBeat]

Company: Funium
Funding Source: Family Odyssey with participation from angel investors
Amount: $1.8m
Summary: Funium originally raised $1.2 million in 2011 to build Family Village, which became available in pilot mode in June 2012. [Source: VentureBeat]

July 2012

Company: Social Point
Funding SourceIdinvest Partners and other funds including BBVA and Nauta Capital
Amount: $7.4m
Summary: Founded in 2008. Several social games in the last 18 months including Social Empires, Social Wars and Dragon City. Over 15 million MAU as of June 2012. [Source: MarketWatch]

Company: Phoenix Guild
Funding Source: Unnamed VCs, YouWeb
Amount: $1.1m
Summary: Founder Jason Citron (of Aurora Feint fame) said, “It seems obvious to me that core gamers are moving from PCs to other devices and tablets,” and Phoenix Guild’s goal is to provide great core games on those new platforms. [Source: TUAW]

 

Critical Path

Critical Path is a video project recently announced by Artifact Studios. The website has a slew of interview snippets with many of the game industry’s best-known game developers and is worth checking out.

Supposedly the project will end up as a single documentary that combines all of the interviews into a film about gaming as a whole. Their tagline is, “Explore the art, philosophy, politics and psychology of video games with some of the medium’s most influential designers and visionaries”.

Clicking around on several of the interviews is a bit more of a snooze than I would’ve anticipated, but some are interesting. I hope the project doesn’t end up as an industry-congratulatory or “thoughtfully informative representation” type of piece. Hopefully they’ve gathered some informed opinions on the current chaos in the industry and how digital distribution and discovery (or lack thereof) are transforming everything.

Racing to the Bottom in Flatland

Racing to the Bottom in Flatland

Like a lot of Americans, my wife and I love movies. I’d say we’re above average film consumers, due in no small part to my love of theatre and film from an early age, as well as her years as a performance artist documenting much of her work on video and/or film.

So a few years ago when we first signed up for streaming movies via NetFlix, we were excited. At the time we were renting a house with a Blockbuster less than a mile away and had plenty of DVD options for re-viewing, but the idea of thousands upon thousands of movies at our fingertips every month, for less than the price of a single DVD or a couple of movie tickets, had us salivating.

We wound up streaming fewer movies than we anticipated, and it was a reminder of the power of perceived value as well as a lesson on the deceptive nature of choice. After the first couple of months the routine degenerated into:

Wife, in the kitchen, working on some incredible dish for dinner (she’s a serious gourmet cook): “Honey, what do you want to watch?”
Me, on the sofa already, flipping through all the crap on cable: “Oh, I dunno. What are you in the mood for?”
Her: “How about something on Netflix?”
Me: “I’ll check.”
Her, five minutes later: “How’s it going?”
Me: “Well, say, are you in he mood for something in particular?”
Her: “Oh not really, whatever you’d like.”
Me: “Maybe a campy 80’s flick.”
Her: “Sure!”
Her, ten minutes later: “So, are you finding anything?”
Me: “Hmmm, well, there’s a bad Tom Cruise movie, nah, I’m not in the mood. How about Willow? Oh, wait we have that on DVD, right?”
Her: “I believe so, but anything’s fine for me. I could maybe go for a disaster movie.”
Me: “Ok, that’ll work.”
Her, 10 minutes later, dinner’s almost ready: “So are you finding something?”
Me: “Well I don’t know, not really. There are plenty of action and disaster flicks. What do you think about Woody Allen?”
Her: “That’s not exactly an action movie. But sure, ok. Anything’s fine at this point.”
Me: “Alrighty, let me just look a little more.”
Her: 15 minutes later, after one or two more rounds of Q&A: “Dinner’s ready. What are we watching?”
Me: “Yeah, hmmm. Nothing’s really jumping out at me. Why don’t we catch up on Stewart and Colbert instead?”

This was the script for many an evening until it dawned on me that I was horrible, like most people, at choosing from too many options. The movies were all right there. There was an image of a movie poster, a star rating, a description, more info on the film if I wanted to view it. It wasn’t difficult to decide but the number of choices, low cost and easy access made it impossibly difficult. And it was Flatland (double entendre intended) — the structure of the presentation was not designed to lead me to a decision, it was all there in a single dimension of indistinguishable value.

My realization was not novel — there are a ton of complex psychological, sociological and cultural fractures in the bedrock of choice, some of which are discussed in books like The Paradox of Choice, The Tipping Point and more recently, The Myth of Choice (which was, by the way, written by Kent Greenfield, who hails from my hometown in Kentucky and was a couple of years ahead of me in school. Kent is a brilliant thinker and the real deal).

Choice, and in particular the relationship between choice and value, can be so tricky. For example, I know that if have to get up off my arse, get in the car, drive to Blockbuster, browse physical shelves, pay several bucks for a movie, then bring it home with the understanding that I’d better return it tomorrow or be penalized, I’m going to damn well watch the movie, and probably enjoy (or hate) it more. I will value the movie more (even if I don’t like it), because I had to give more to get it.

Perhaps the most important thing about the physical store is that it’s not Flatland. There are plenty of cues in an intuitive 3D world guiding my decision. As I walk the aisles, glance at posters, watch previews on LCD screens, browse end-caps, consider specials, drill-down by category and alphabetical then read the backs of boxes, I am continually operating in a sort of risk/reward environment at a granular, unconscious level. I have to put physical and mental effort into finding a movie, but it (usually) doesn’t feel like work. There is a natural discovery mechanism in play.

In the digital/virtual world of Netflix, discovery is more complicated and less intuitive. My instincts are muddied by a 2D world of flat images in a layout that poorly mimics the real world. The trade-offs between effort, choice and value are less clear. In terms of risk/reward, I start out risking little as I navigate a Flatland of seemingly endless choices. As time goes on, I realize that time is what is at risk. Choices have less value to me. Quality (the reward) becomes more and more important in order to mitigate risk. But my choice, or expected choice, has less and less value the more I risk because the choices are all flatly presented without curation or authority. It’s almost recursive, and instead of a race to a top choice, it’s a race to the bottom. If I pick something, it’s because my need to see any movie now outweighs my desire to be delighted by a particular movie.

The same is true for non-traditional games — games that are delivered digitally and have no real world discovery process (aside from word-of-mouth). This is just about everything in gaming right now except for the big-budget, massive IP-holding holdouts, on consoles and some PC games, in the traditional retail space. Discovery is truly a Flatland, for all the same reasons as streaming videos. It’s a race to bottom in terms of choice, but perhaps even more interesting, content — the games themselves — have also been racing to the bottom.

Discovery is a huge problem in the industry right now. Because mobile devices and digital distribution have eclipsed the traditional retail game business, we’re struggling to understand it all – fundamentally because our game-playing customers have too many choices and, for all the reasons above, this causes the perceived value of the content to do down. But the kicker is this: lower perceived value results in lower profits, which in turn results in lower-quality content. It’s a race to the bottom.

Discovery has become the domain of companies with enough money to sell content in Flatland. Since there is little hierarchy or thoughtful segmentation at point of purchase (not said lightly, by the way, because this is a huge problem to overcome), it’s like going into the physical store with a row of titles a mile long, one end-cap and the “best-sellers” shelved within the first 20 feet. Few customers will walk a mile to discover something new; more important, the sheer size and number of titles devalues the entire shelf.

As noted in Jeremy Liew’s recent post, Discovery is the problem in gaming, game design is incrementally improving and we are starting to see bigger budgets and somewhat higher quality, while distribution continues to be easy (the rote barrier-to-entry is still low, and the industry is not competing on distribution). But as Jeremy indisputably states, the outcome of easy development and distribution has been a massive explosion in the number of games.

Can quality keep up with quantity? The industry competes on discovery, but it does so in Flatland. So its methods have inevitably involved larger and larger marketing and PR spends, bigger brand spending, internal and external cross-promotion, [over] extending IP and game re-skinning, and certainly paid acquisition. Since every one of these things require deeper pockets than most developers have, not surprisingly the industry has begun to consolidate into a network of discovery-focused “publishers”. This is not too different from the traditional industry except the emphasis is on the publishers’ ability to segment and cross-promote by increasing the size of their catalogs very, very quickly. This makes sense, since discovery at the platform distribution level is so ineffective (unlike a traditional retail store). Therefore a big catalog is critical to overcoming the inherent obstacles in Flatland.

For developers, this has resulted in an unprecedented lack of funds from a growing number of non-traditional publishers who simply don’t have the business model to finance development. This new breed of publisher is looking to plug content into their pipeline without the more traditional dose of production help,  putting most of the risk into the hands of the developers, who must figure out how to fund from other sources. In Flatland, they’re a better choice than being buried on the shelf a half-mile down the aisle, but the extra risk leads to cutting corners on quality. In the short-term at least, this means the quality curve will continue to look more like the rolling hills of Tuscany than a profile of Half Dome.

While the problem of discovery is thorny and there are no easy answers, at Kineplay we’re continuing to research the viability of location, specifically location-based and map-based discovery mechanisms for games, and we believe location (ironically, as a better, non-Flat virtual substitute for the real world) is a promising solution. Location also has the built-in benefit of enabling content to be re-skinned or re-themed based on physical coordinates, which is a way to differentiate extended content and might help bridge the gap between where we are now and high-quality gaming.

Whatever the solutions that present themselves over the next several years, the industry (and its customers) can’t keep racing to the bottom in a Flatland which, ironically, has no real bottom.

Augmented Kinectality

From Next at Microsoft, this is a must-see:

And this is an even muster see (the real-time custom emitter that tracks morphology, in particular, is super cool):

OMGZynga

GamesBeat has a nice quick interview with Dan Porter and David Ko about Zynga’s reported $200m acquisition of Draw Something OMGPOP. Grats to both companies, but $200m does seem a bit pricey. I guess if you’re Zynga — with “3,000 people working on games” and you “can’t make every hit” (this is an innocuous but weird thing to say, Dean), it’s simply market share/conquest, which makes the validity of the number less relevant.

Ah, consolidation. It’s so utterly human and happens to every industry. My co-founder, Laddie Ervin, and I spend a lot of time talking about it. I think this acquisition is important enough to be a data point on the consolidately mobile and social gaming curve.

FAIL: Virtues of a Programmer

In the second edition of Programming Perl, Larry Wall famously outlined the Three Virtues of a Programmer:

1. Laziness — The quality that makes you go to great effort to reduce overall energy expenditure. It makes you write labor-saving programs that other people will find useful, and document what you wrote so you don’t have to answer so many questions about it.

2. Impatience — The anger you feel when the computer is being lazy. This makes you write programs that don’t just react to your needs, but actually anticipate them. Or at least pretend to.

3. Hubris — Excessive pride, the sort of thing Zeus zaps you for. Also the quality that makes you write (and maintain) programs that other people won’t want to say bad things about.

Besides the humor, anyone who has seriously slung code for a living connects with the three virtues. Programmers very often do have a wonderful kind of procrastinately excitable arrogance that enables them to do remarkable things. I like to say, “A programmer is both the laziest and hardest-working person on the planet — nobody works harder to find the easiest way to do something.”

But when it comes to the job of interviewing, the three virtues are dangerous. I hate to think of all the mistakes made by companies who let untrained programmers interview candidates; if you could convert all those missed hires to ROI, it would most certainly scare the crap out of the CTO. But it’s still prevalent, and not just at the usual suspects like Google and Facebook. It’s alive and well at startups, too.

Maybe it’s getting worse. Over the last several months I’ve heard more complaints than usual from engineering friends and associates about their interview experiences. And Glass Door seems to be full of stupid code problems and bad experiences from interviewees. It’s always the same: A small team of one or more programmers show up to conduct an interview. They’re a little late, somewhat nervous and dispense with small talk as if it’s a virus. They’re not into answering questions about their company, can’t talk in detail about what they’re working on, and need to look at their phones whenever possible.

Then it comes: Ye olde academic probleme. It’s a fairly rote, perhaps even difficult, [typically] algorithmic problem that has little or nothing to do with their day-to-day software engineering. In fact it’s a safe bet that the programmers giving the problem couldn’t work it themselves if they’d hadn’t recently played with it. To top it off they want you to code it up on a whiteboard (or worse, over IM/video chat).

It would be laughable it wasn’t so bad for the job seeker — and if it wasn’t so bad, ultimately, for the company looking to hire (especially startups).

First off, it’s patently absurd to ask a programmer to code something on a whiteboard. Design? Sure. Program flow? Fine. Basic approach to solving a problem? Okay. But solving an academic problem, on-the-spot, with pseudocode? Ridiculous. Programming is as much art as science and programmers need time to think, write, run and debug problems, especially difficult ones. They need to be in the zone — comfortable, engaged, with their tools and libs (and functions they stopped re-writing years ago that they now simply copy and paste) by their side. This is the case for every programmer I’ve ever worked with, from CS majors to Phd’s to the self-taught liberal arts majors, dropouts and homegrowners with no formal education.

Second, the code problem(s). Just why are they so academic? Other than maybe someone who is fresh out of college with no substantive personal code base, who among us actually rewrites a sorting algorithm from scratch,  or revisits an LRU cache problem for fun, or proudly displays our awesome linked list skills, or spends our evenings re-hashing time complexity for that old Connect Four or Game of Life problem from school? (Note: I’m not suggesting that time complexity isn’t super-important, but you don’t have to know how to write the Wikipedia article on Big O to understand it). But even if you know the problem ahead of time, can you really code it up nice and sweet, in something resembling workable code, in 10 or 15 minutes — in an interview, on a whiteboard? (Especially if you’re already coding for a living every day anyway?)

I could go on but you get the point. I’ve interviewed lots of programmers over the years and I’ve never put them through the above rigamarole. The best code test is given to the programmer before the interview, basta. The best evaluation is looking at real code that compiles. The best person for the job is almost always the engineer who is a great general problem-solver — he or she is far more valuable than rote language skill or recent exposure to a specific problem or class of algos, for example. Sure there are exceptions and times when you need more of a code-chimp — a trained warrior — than anything else, but 99% of the time you need wizards and mentalists and thieves. Those are the guys and gals who get things done, are constantly improving, and who work with or without a paycheck. You just have to teach them how to be good interviewers.

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