Games * Design * Art * Culture

Tuesday, October 31, 2006
Drizzly in Copenhagen
After dealing with end-of-month paymments to developers and getting out a note to VCs yesterday, I left for Newark, taking the PATH train to Newark Penn Station, and the number 62 bus through some pretty dismal parts of Newark to the airport. Total cost of transit, $2.75--you have to figure $50 if you take a cab. As Eric says, I may be Armenian by heritage, but my attitude to money makes me a Scot.

The air was clear taking off from Newark at 6PM; a mass of connfusing lights until suddenly you realize, aha, Bayonne, that must be the Verrazano Narrows, and there's Coney Island. Craning, I managed to spot my apartment building as we flew over lower Manhattan.

As usual, I got little to no sleep on the plane; it was drizzly coming into Copenhagen, so not much to see until the final aproach.

Waiting for passport control, I realized Nick Fortugno of GameLab (designer of Diner Dash) was right behind me in line. Nick is also speaking at the independent games conference tomorrow, at the Copenhagen ITU. Outside customs, we were met by Ene Rasmussen of the MEDIA (which apparently stands for "Measures pour Encourager le Developpement de l'Industrie Audiovisuelle", an EU initiative), who took us to our hotel.

I did my usual first things--find a bank, withdraw some kroner, find someplace to get a bottle of Coke Light--and, taking advantage of the hotel's free WiFi (Scandinavian hotels are great on that--as opposed to a hotel in Vancouver that wound up taking me for close to $100 over the course of four days), am currently trying to stay awake long enough to have lunch with our hosts. And will probably stay up a few hours after that--but not too long, as I have our usual IRC developer chat tonight, at 7PM EST--which is 1 AM here. So I'll try to get some sleep later, and set a midnight wake-up call... Given that one of our developers is in Spain and has been good about accomodating what for him is an insane hour for those meetings, I feel obliged to be a good sport about it as well.

Monday, October 23, 2006
How to Screw the Mobile Operators
When I first started doing online games, there was no Internet. Oh, there was the Arpanet, but it was restricted to academic and government use. If you wanted to make games for a market, you had to go to the commercial online services: CompuServe, GEnie, Prodigy, QuantumLink (later AOL) and the rest.

These services grew by having huge modem farms accessible via lines that were a local call from anywhere in the country, connected to large networked servers on the back end. All the content they provided was developed by the companies themselves, or by third-parties under contract. It was a top-down environment, and they had large hardware costs that they needed to recoup by charging substantial fees to users--$6/hour connect-time, when I first signed up for GEnie.

When the Internet was opened to commercial use, it blew them away in a matter of years (although AOL managed to transform itself into a big ISP and survive). It did so because the economics of the Internet turned those of the COLS on its head. Because any machine could connect to the Internet, providers of content could join at any time, and pay the cost of their own servers. Consumers paid the cost of their own modem connections directly, by contracting with ISPs. $6/hour connect-time turned into a low flat monthly fee, with unlimited access. Consumers benefited immeasurably, because going online became free. Content providers benefited immeasurably, because the COLS no longer served as gate-keepers. The economy and society as a whole benefited immeasurably, because there was a huge increase in the quantity and quality of available content--a revolution that is still in its inceptions.

In the world of mobile phones today, we have something quite analogous to the world of the COLS, only more so. Building a mobile telephony network requires a huge investment in cell towers, bandwidth, and back end network connections, and mobile operators have to charge high fees to recoup the cost of that investment. Although in principle mobile data connections are attached to the Internet, and anyone can put up content, mobile operators also want to extract money from mobile data use, and hence make it hard to reach mobile content except through their own 'decks.' (Try inputting an URL on your phone--it's probably possible, if you have a reasonably recent phone, but good luck figuring out how.)

In other words, today we have two competing models of how to build big communications networks: The decentralized Internet model, with open connectivity and in which each participant in the network bears its own costs, and the centralized "carrier" model in which infrastructure is built out by a single large provider that needs to extract large rents from users of the network in order to recoup its costs.

The explosive growth of the Internet, and the dramatic changes it has wrought in virtually every area of business and society, are clear indications that openness and a shared cost structure are greatly preferable to the carrier model--but the carrier model for mobile grew up before IP technology was widespread, and now commands a degree of economic power and regulatory protection that will make it difficult to dislodge.

It is even possible to dislodge it?

I think it not only possible, but inevitable--the only real question is on what timescale.

We already see the changes happening in wireline telephony. Services like Skype and Vonage are forcing wireline carriers to introduce equivalent fixed-price monthly services that carry voice over IP for those who already subscribe to broadband; and on the backend, the change from circuit-switched calls to IP is reducing the cost of carrying calls, so that these reduced prices are supportable. The cost of calling is trending toward zero, and the old regime under which calls to Stockholm could support vastly higher charges than calls to Sheboygan has already gone away. This is seriously bad news for incumbent wireline carriers, but unless you are a shareholder in one of them, you really shouldn't care; consumers benefit greatly, and this is simply another example of what Schumpeter calls the creative destruction of capitalism.

Mobile is a harder nut to crack, however; it's fairly straightforward to move wireline voice from one network (proprietary and circuit-switched) to another (open and IP-based). It's another to build out a network of wireless stations that provide adequate global coverage for mobile telephony. And even though your call may be IP-based from the tower to which your phone connects to the tower that connects to your recipient, your phone is typically tied to a particular carrier, with a particular wireless networking standard, and this gives the operators the leverage to continue to charge high fees for mobile calling (and data) at present.

Let us imagine how an Internet model might work for mobile telephony. Suppose you could buy a box you could hook up to your broadband connection that was the equivalent of a mobile base station, providing coverage for a kilometer around. Suppose moreover we had a business model in place that encouraged you to keep this base station open to use by others, rather than encouraging you to encrypt and protect it--perhaps you receive a penny or two per minute for calls placed by others, a reduction of your own wireless bill. Many of us would then choose to buy such a station, to ensure excellent wireless connectivity in our own homes, and we'd rebuild the Internet in a wireless context, with small investments by businesses and individuals rapidly extending a lower-cost wireless network across the planet.

Of course, most participants in the current mobile value chain would have little interest in that. Back-end hardwire providers like Nortel and Alcatel/Lucent and Ericsson would lose market share to Cisco, as station-to-station traffic moves to the conventional Internet; mobile operators would suffer the same fate as the fixed-line telephony providers.

But there is one piece of the value chain that would benefit: handset manufacturers. Today, Nokia, Samsung, Motorola and the rest sell primarily through operators, and have to kowtow to them--but in a more Internet-like world, they would sell direct to consumers, be able to implement features the operators may not approve of, and be able to capitalize more directly on their brands. Whether you're placing your mobile call through a locally-provided base station or a conventional operator, you still need a mobile phone. And Nokia (or whomever) will be happy to sell it to you.

How do we get there from here?

The first step is the WiFi phone. But not the WiFi phones you're being offered today.

A lot has been written about WiFi phones, because the potential is obvious; in my home and office, there's a WiFi network, and I'm already paying for the broadband connectivity. At home, at least, my wireless coverage sucks (and has ever since 9/11 and the destruction of the base stations that gave me the best connectivity). It would be great if I could use my own WiFi connectivity to place calls.

And I could, at least if I were to spring for an expensive phone with WiFi connectivity that my carrier offers (like the PPC-6700--I'm a Sprint customer, god help me). BUT--I wouldn't actually benefit.

Oh, I'd benefit by having a better signal in my home. But you see, the way the operators want to implement WiFi telephony is to benefit themselves, not you. Over Sprint (or any other operator's network), if you have a WiFi phone, you can use your local WiFi connection to ensure that you have a good connection--but you are still charged the same amount for any call you place. That's right, you pay for the phone, you pay for the bandwidth, you pay for the hardware that receives your call--and you pay just as much as if you were using their bandwidth and their base station.

What am I, stupid? When I'm at home, I'll use Skype, thanks. When you want to offer a deal that benefits me, I'll consider it.

Okay, so that trick doesn't work. Is there another way?

Sure; Nokia could offer a WiFi phone that uses Skype or Vonage or whatever for your home connection, but switches to a carrier when away from WiFi coverage, and they could offer it tomorrow. Well not quite; figure 3-6 months for retooling production lines and getting it into consumer outlets. But pretty damn quick.

Why don't they? Because the operators forbid it. Nokia (and the others) sell phones primarily through operator outlets, and none of them wants to piss off Vodafone, and if they tried it, Vodafone and Sprint and whomever would say "we don't allow that model of phone to connect to our network," so it would be stuck connecting to your local WiFi only.

So. Here's my proposal for how to screw the operators in the short term--and ultimately bring about the Internet-like distributed mobile network we know we want in the long-term.

Sell me an unlocked GSM phone. (I choose GSM, even though it's an older technology, because it's also a more open one.) Engineer the phone so that the SIM card (a small chip in the phone that identifies it to the wireless network) can be hot-swapped--that is, pulled out of the top of the phone without opening it, and changed for another. (Typically, phones are designed so you have to open them up, and remove the battery, to change the SIM card.)

Sell it to me as part of a package that includes a box I connect to my cable (or DSL) modem, via a standard Ethernet cable, that creates a short-range GSM signal.

Include a SIM card that allows me to connect from my phone to that box, and uses Skype or Vonage or whatever for the actual transmission of calls from my IP address to the terminating handset.

Then, since the phone is unlocked, when I leave home, all I have to do is swap out my 'local' SIM card, replace it with a Cingular or T-Mobile SIM card, and Bob's your uncle.

I have the cheap, local telephony I want; the manufacturer sells me a nice pricey package that includes the base station, the SIM card, and the phone; Cingular need never know, because I just sign up for their free phone, yank the SIM card out of it and stick it in my better one; and the end of the operators begins.

Of course, you won't sell it at the Cingular or Sprint store; you'll sell it at Wal-Mart.

Later on, you can upgrade the home package from GSM to CDMA2000--or WiMax. Or whatever.

Now... A hardware manufacturer can't do this alone. They'd need a deal with, say, Skype. And with major retailers, like say, Carphone Warehouse.

Nokia, Finland. Skype, Estonia. Carphone Warehouse, Germany.


Friday, October 20, 2006
11/1 (tentative) Chat: Are Games Art?
Update: RESCHEDULED. Due to a schedule conflict for one of the guests, we're rescheduling the chat--tentatively for the following week at the same time and day. I'll update again when the time is nailed down.

Join us on Wednesday, Oct. 25 for a chat with on the subject of games and art with Henry Jenkins, Jesper Juul, Marc LeBlanc, and Eric Zimmerman.

Channel: #gamesandart
Time: 6PM PST, 9PM EST, 2 AM GMT

See our page on how to get on IRC.

More About the Topic:

Hideo Kojima says "If 100 people walk by and a single person is captivated by whatever that piece radiates, it's art. But videogames aren't trying to capture one person. A videogame should make sure that all 100 people that play that game should enjoy the service provided by that videogame. It's something of a service. It's not art."

And Roger Ebert says "To my knowledge, no one in or out of the field has ever been able to cite a game worthy of comparison with the great dramatists, poets, filmmakers, novelists and composers... for most gamers, video games represent a loss of those precious hours we have available to make ourselves more cultured, civilized and empathetic."

Contrariwise, Henry Jenkins says "Computer games are art—a popular art, an emerging art, a largely unrecognized art, but art nevertheless... The time has come to take games seriously as an important new popular art shaping the aesthetic sensibility of the 21st century."

Are games art? If not, why not? And if so, why? Is thinking of games as art useful or actually a hindrance for game developers? If games are art, what should our aspirations for the form be?


Henry Jenkins is the Director of the MIT Comparative Media Studies Program and the Peter de Florez Professor of Humanities. He is the author and/or editor of nine books on various aspects of media and popular culture, including the recently published Convergence Culture: Where Old and New Media Collide.

Jesper Juul is a video game theorist and an Assistant Professor in video game theory and design at the Center for Computer Game Research Copenhagen. He is author of Half-Real: Video Games between Real Rules and Fictional Worlds and numerous articles about games, and his prestigious and influential blog is The Ludologist.

Marc LeBlanc is a twelve-year veteran of the game industry. At Looking Glass Studios, he was a core contributor to several award-winning games, including the Thief and System Shock series. In collaborationn with Andrew Leker, he developed Oasis, the 2004 Independent Games Festival Game of the Year in the web/downloadable category.

Santiago Siri is an Argentinean game designer whose work includes Football Deluxe and Utopia (forthcoming). He works for Three Melons, an advergaming firm that offers innovative branding through games. He is also a writer and theoretician, and his blog, Games as Art, is a resource for all members of the game community.

Eric Zimmerman is a game designer and academic exploring the theory and practice of game design. He is the is the co-founder and CEO of gameLab, a game development company based in New York City. He is the co-editor of several works in the field, including Rules of Play, a seminal study of game design technique.

Wednesday, October 11, 2006
The Shift to Digital and the Paperback Revolution
My Dad was Ian Ballantine's lawyer.

You probably don't know who Ian Ballantine was, but you should.

Ian Ballatine practically created paperback publishing in the United States. He began with Penguin USA, bringing the British publisher's innovative line of paperbacks to the US.

Then he founded Bantam Books.

And then Ballantine Books (now a division of Random House, I mean, Bertelsmann USA).

And not incidentally (for me and for many of you, I suspect), Ballatine Books was the first major US publisher to publish novel-length science fiction--and his wife, Betty Ballantine, was the first major editor of book-length science fiction, and had a big role in bringing the genre to mass market attention.

I'm mentioning this because of my last post; I think there are some dramatic similarities to what happened in paperback publishing, and what is going to happen in digital distribution of games.

You see, the boilerplate contract that every publisher used back in the 50s and early 60s--in other words, when there was no such thing as paperback publishing--said that the publisher controlled subsidiary rights, and that the author would receive 50% of the proceeds from the sale of such rights.

This meant that when paperbacks appeared, paperback publishers had to go to the conventional hardcover publishers, and make deals. They'd pay something for the rights to the book, and the author got 50%, and the hardcover publisher got 50%.

This didn't last long.

Agents quickly awoke to the fact that hardcover publishers were in the business of publishing hardcovers--and you could pretty easily sell the hardcover rights to one publisher, and the paperback rights to another, and keep 100% of both sales.

That, of course, led to the consolidation of publishing, with companies merging so they had both paperback and hardcover divisions in the same firm, and could bid on both rights at once.

What we're seeing in games at the moment is a legacy issue; digital distribution didn't exist up until recently. So conventional publishers control those rights, and want a piece of it, and the end result is that the developer is at the end of a chain that's even longer than the value chain for conventional retail, and wind up with even less of the pie.

I believe--or at least, like to think--that developers will realize that they don't have to settle for this--that if a conventional publisher wants a game, they want it because they think they can achieve a reasonable ROI through conventional distribution channels, and the smaller amount they might earn through digital distribution isn't germane. And that you can extract digital distribution from those negotiations, and sell digital rights to someone else for more money.

Not that we have a lot of upfront money to spend right now.

But on the other hand, we offer 60% of the consumer dollar. Not 6.3%; not 9%. Six zero. An actual majority.

Oh brave new world, that has such deal terms in it.

Non-ironically, this time.

Gamespot and Digital Distribution
So Gamespot announces its digital distribution offering, and GameDaily somewhat inanely muses, "It will be interesting to see what kind of publisher support the new GameStop service gets going forward."

The answer is: This is Try Media's 'white label' offering branded for Gamestop. It isn't "Gamestop's new service;" they've just made a deal with an existing digital distribution operation to brand it with their brand. Gamestop is passing off control over what games get on their online service to Try Media, abrogating their role as a product filter for gamers. Gamestop will have no role in negotiating with publishers, or even in determinining what product they will have available to offer; that will be up to Try Media.

Now, let's parse this a little.

Is this good for GameStop? In the short term, yes: with very little effort, they get a digital distribution site up and operating, with a deep inventory of product (mostly older titles from major publishers and casual games). In the long term, it means they are missing a bet--they're passing off a substantial piece of the consumer dollar to TryMedia, instead of building their own, competitive operation. Try Media must be cock-over-hoop about this; they've just sterilized one of the largest potential competitors, by getting in bed with them.

Is this good for TryMedia? Oh. OhGODyesYEsYESSSILOOVEEYOU...aaaGGHH!!

Is this good for developers? Hahahahah. Ahah. Heh.

Let us take a typical development deal; publisher gets everything they can scare up, less, say, 15% of net to the developer. In a brick-and-mortar retail environment, in an ideal world, that means retailer gets 20%, plus some MDF dollars that come off the top before the developer gets paid, so maybe more like 40%, so the developer actually gets 15% of 60% of the consumer dollar, so like 9%. (Recoupable against advance, of course.)

Now let's enter the brave new world of electronic commerce.

I am not, of course, privy to the details of the deal between Try Media and Gamsespot. But there really isn't an equivalent of MDF, so let's say Gamespot has negotiated a deal whereby they get 30% of the consumer dollar, with the rest going to TryMedia.

I would guess that TryMedia wants, oh, 40% of what's left over, so that means they pass on 60% of 70% to the publisher, so 42%.

Who passes on 15% of 42%, or 6.3% to the developer.

So the developer, who was being royally screwed at 9%, is now earning 6.3%

Oh brave new world, that has such deal terms in it!

Monday, October 09, 2006
Austin Games Conference is Borged
CMP takes over the AGC. (They already run GDC.)

An idiot commenter says "Well, the GDC is a pretty good conference but everything else including the Austin Game Conference, is pretty low rate so really not much news. As long as the conference keep happening, it's fine with me."

Mind you, I love GDC, but it's a zoo. And since they apparently are keen on trying to replace E3, will become more of one. I liked the Austin Game Conference because it was smaller but high quality, and you could actually talk to people. This makes it no longer on my "need to go" list.

But of course, my idea of the perfect conference is talking with Raph Koster, Steve Meretzky, and Hal Barwood over a nice bottle of Malbec and a bowl full of peanuts in my living room.

Next Gen Games Aren't Expensive! Honest!
Epic Games VP dismisses claims that next-gen games need big budgets.

Ah... Hah. Gears of War clocks in at a low, low $10m!

And here we were getting all het up at the thought that next-gen games would be $20m. Whew. What a bullet dodged. Why, at that tiddling amount, you can do anything and find a market!

I'm thinking of a word. Two syllables. I run around with my fingers pointing out the top of my head. Then I make like I'm waving a cape. Bull. Bull! Right.

Then I squat down and mime taking off my trousers and wipe my...

Ah. You got it.

Molyneux's Advice
Lionhead boss Peter Molyneux has called for a major rethink of the way game development contracts are negotiated, describing the current system as being "completely flawed" for independent studios."

You think?


"He also warned independents not to get pulled into the 'spiral of doom' - signing a new project in order to get funding for an unfinished game, and repeating this exercise until the studio goes out of business."

Well nice advice... There's an alternative?

"The secret is to negotiate, up front, a contract which gives you the power to call down more money if neccessary."

Uh... huh. Possibly you can do this if you are Peter Molyneux. My experience is more like, we need another $250k to complete, the publisher balks, our investors have to be persuaded to stump up the money themselves on the grounds that they lose the whole ball of wax if they don't.

Sure, underbidding and then hoping to whine a great deal to persuade the publishers to throw good money after bad is typical, if completely unethical, business practice, but actually getting, IN WRITING, that they'll supply additional money if necessary? Good luck...

"He warned against signing away intellectual property rights, stating, 'As an independent developer, your IP is your bargaining power. If you sign it away or license it... You are signing away your freedom in the future.'"

Completely true. But how much actual negotiating leverage does a typical independent developer have?

Yes, Peter, it's broken. No, Peter, advising a developer to hang tough in negotiations doesn't solve the problem, because in most cases this leads to no deal. How many developers are more than supplicants?

Saturday, October 07, 2006
Process Intensity
At one of the earliest (C)GDCs I listened to Chris Crawford lecture about what he called "process intensity." In an article for the Journal of Computer Game Design, he later revisited the subject, and wrote:

    "Process intensity is the degree to which a program emphasizes processes instead of data. All programs use a mix of process and data. Process is reflected in algorithms equations, and branches. Data is reflected in data tables, images, sounds, and text. A process-intensive program spends a lot of time crunching numbers; a data-intensive program spends a lot of time moving bytes around."

In his lecture, one of Crawford's points was that computers (then) had far better ability to crunch numbers than to store data. As an example, consider the game-map for a board wargame: a typical such game has over 2000 hexes, each of which can contain a variety of terrain types; figure a byte per hex. Each of the hex sides can also contain terrain--roads, bridges, rivers, and so on. Each hex-side is shared by two hexes, so there are 6000 or so in total, and figure you need a byte for each of those too--so to represent the game-map for a board wargame, you need 8K.. If you're working on, say, a 48K Apple II, you've already consumed a big part of your memory budget. You're better off trying to create a game that exploits the strength of computers--the ability to crunch numbers--instead of trying to work around its weakness--the ability to store data.

read more>>

Exhibit 1 in "The Seamy Side of Gaming"
Some years ago, Rusel DeMaria and my partner Johnny Wilson wrote a book called High Score--something of a coffee table book, but the best insider's view, to date, of the history of the game industry. I like it--but, reading it with a degree of personal experience and cynicism, you also have a clear sense that this is the "happy happy, fun fun" version of our history--that, in other words, there's quite another book to be written on the same subject that delves into the scams, unethical behavior, and outright fraud that's been a big part of our history from the inception. Call it "Silicon Babylon," perhaps, although the unrevealed scandals of our past have more to do with greed than depraved behavior. Possibly more of that side of our heritage will come out in future years, when the actors involved have less to lose.

The Gizmondo saga, of course, is practically sui generis. And it's nice to have Wired's resources, and the ability to assign a reporter to dig it out.

A fun read.

Friday, October 06, 2006
No Comment.

Thursday, October 05, 2006
NY Tech Meetup
So I gave a brief presentation about Manifesto Games at the New York Tech Meetup tonight--about 500 people in attendance. This isn't an 'investor pitch' setting, but more like, "show local techies something cool." Went pretty well, I think.

If you're interested, you can grab the presentation here.

Sunday, October 01, 2006
The Professor on Shivah

Brian Moriarty comments on The Shivah.

Damn. We may not have a lot of customers yet, but by god, we have the right customers.

Manifesto Promo
I've uploaded some small 125x125 promo images for Manifesto Games (example in the left column).

If you'd like to help spread the word about Manifesto Games, please feel free to grab them and add them to your site, blog, My Space page, whatever--and enclose them in a link back to us. And thanks!

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