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Casual Connect 2010

Two weeks ago I had the pleasure of attending Casual Connect in Hamburg, Germany. I try to attend one or two conferences a year as a way of stimulating thoughts and new ideas. Traditionally, I’ve made a yearly pilgrimage to the O’Reilly ETech conference but as it wasn’t on this year I’ve been forced to look around. Freshly back from Casual Connect I must say that it was great to attend a conference whose focus wasn’t the web and reinforces that the games sector has lots to learn from the web industry and vice versa.  Here are some of my top line thoughts:

•       The casual games sector is under considerable pressure as a result of the broader structural changes in the games business.

•       The largest strategic threat to the casual games sector comes from social games that are eroding both audience and revenues.

•       Another threat results from the lower barriers to entry, particularly in the smartphone sector and the resultant pressure on pricing.

•       One of the barriers of the casual sector reacting to these changes in the market is problem is casual publishers and developers neither have the expertise or experience to run games as a service.

•       Given these problems I expect to see consolidation in the casual games sector with some of the more successful companies merging to take a large slice of a declining sector.

Despite being a conference dedicated to casual games there were many interesting discussions around social games. Here are some thoughts I thought worth mentioning:

•       Although Playfish and Zynga dominate the nascent social games sector there is a network of smaller companies operating in their shadow. While not generating the revenues of the big two they are quietly profitable. These smaller companies tend to exploit Playfish and Zynga’s weaknesses in localisation and focus on Facebook publishing games on the less popular social networks.

•       There was a general consensus that the social games will concentrate more on engagement (session time) rather than viral hooks in the future. As the numbers of games on social networks increase viral hooks will need to be better targeted and perhaps companies will rely on more traditional online marketing techniques.

•       Recommendation has been a cheap and powerful method of user acquisition for early movers in the social games sector. However, there is concern how much recommendation the social graph can handle before users feel it’s becoming ‘spammy’.

As well as discussing social games themselves there was inevitable Facebook discussion. Many of these points have been made on other blogs but I thought the following were pretty unique:

•       Facebook credits wallet will become a major digital payment platform in the next 18 months. While developers may lose c.30% to FB there is a hope that increased audiences and conversion will push profits up.

•       Facebook should have the benefit of learning from some of Apple’s failings in this sector. There is an underlying developer backlash towards Apple’s App Store with many developers saying that the App store is not viable from a financial perspective.

•       If Facebook does introduce its own payment platform the effect will be dramatic on the virtual goods sector. This would be akin to the introduction of a standard virtual currency allowing consumers to make comparisons across titles (e.g $1 here buys you X while $1 there buys you Y). This will inevitably price pressure into the virtual currency economy.

•       Just like the App store Facebook credits will lower the barrier to publishing commercial social games. This will see an overall increase in volume of titles, competition and further downward price pressure.

 

In-game campaigning

Barack Obama is so down with the kids. His campaign is now advertising on Xbox games.

Players of the Burnout Paradise game had spotted the Obama ads, and chatter has grown about them online. It has now been confirmed that they were paid for by the Senator's presidential campaign.

Virtual meat sticks

So, there we are trying to convince BBC Wordwide to create a virtual world for one of it's super brands. Endless discussion, business cases, 5 year projections, meetings and cajoling. The brand is ripe for expansion and everyone knows it - the audience would love to engage in new and deeper ways. We know that because they're already doing it.... on other peoples' sites. But the lights are stuck on amber...

So you can understand my upset I am when I stumble across Spicy Town. Spicy Town, as I'm told by Slim Jim's PR agency, is a virtual world for "people who want to explore their spicy side." Given that the Slim Jim is the US answer to the Pepperami it would have been more appropriate to create a virtual garage forecourt where you can contemplate the minutes you have left before contracting a horrific human / bovine illness.

I've been told Spicy Town, is a "wild place where people can create a unique alter ego that’s a little aggressive, insane, adventurous, and mischievous." Once you've created your Spicy Side avatar, you can "challenge other users to real-time rumbles, talk smack, or just hang out in the immersive digital Spicy Town where you can cruise around and break mailboxes, spray paint walls, and collect Slim Jims to unlock new spicy moves and annihilate unsuspecting Spicy Side residents."

Doesn't matter today if it's good or bad. It's just wrong!

Halo 3: blurring the real and imaginary

Halo 3 was another game that broke box office records for the launch of a computer game and challenged the year's top earners in terms of traditional Hollywood entertainment. While it doesn't have the narrative complexity of Bioshock or GTAIV it does push the idea of serious gaming or the significance of video games, particularly when we look at the ad campaign.

For the campaign, Bungee created a diorama that's currently touring the US. It celebrates and records the final fight. Here is the official 90 seconds spot used as one of the launch assets of the media campaign:



While breathtakingly emotive and creative it was the follow on BBC documentary style ads that generated the most attention and controversy. Breaking from the convention of man cannons and pounding soundtracks these ads are a simple, elegant take on the effect of the battles surrounding the Halo series with an elderly veterans reminiscing about their experiences fighting alongside Master Chief. Although no different to a film like Saving Private Ryan, It was the tugging on heart strings for what was only a video game that generated the controversy. Video games is a medium that enjoys commercial success above meta-critical and cultural appreciation of the medium itself.

Games: future trends

From my presentation to BBCW this week where I summarised the current economics of the game industry and possible trends.

By 2010, the worldwide video game market should grow to $46.5 billion [PWC]

GTAIV sold six million copies in it's first week far surpassing top album debuts [NYT]

World of Warcraft now has 10 million subscribers [RW Web]

Spending on advertising within video games in the U.S. is expected to increase from $295 million in 2007 to $650 million in 2012 [eMarketer]

The casual game industry is a USD 2.25 billion a year market, currently growing by 20 per cent annually [Games Industry Biz]

Given these numbers I expect the following trends to emerge:

• games will largely become free delivered over IP
• monetisation through in-game advertising, sponsorship and virtual goods will grow rapidly but not reach the profits currently reached by disc sales
• MMOG will grow in popularity and extend in the the casual games market

Disney Interactive Studios: games overview

Thinking about how Disney have organised their interactive and digital operations. Recently Disney merged a divergent portfolio under the single division called Disney Interactive Studios, Inc. They are charged with self-publishing and distributing a broad portfolio of multi-platform video games and interactive entertainment worldwide. Previously, video games have been licensed or developed by Disney Interactive Studios, which fells under Disney Consumer Products. Meanwhile, online games such as Toontown and Pirates of the Caribbean were created by the Walt Disney Internet Group.

Disney Interactive studios seems themselves as both a developer and publisher of games.

Disney have been extremely active in establishing themselves as a global developer. Through a combination of start-up and acquisition they now have a stable of seven development studios crossing a range of platforms, genres and territories. Previously, DIS concentrated on developing games for Disney licences but now increasingly focused on creating new brands that can transfer over into Disney's TV and movie branches.

• Propaganda Games: Canadian based studio founded in 2005. Developer of next-gen Turok game.
• Avalanche Software: acquired by DIS in 2005 they have developed for a number of Disney licences including Hannah Montana and Chicken Little. Based in Salt Lake.
• Climax Racing: specialist racing studio offshoot of the UK based Climax group acquired by Disney 2006. Re-branded as Black Rock Studios.
• Fall Line Studios: based in Salt Lake and a sister company to Avalanche. Specialise in development for Nintendo (DS & Wii).
• Junction Point Studios: founded by gaming legend Warren Spector and specialising in fantasy and roll playing. Based in Austin, Texas, acquired in July 2007
• Gamestar: Chinese based game developer founded in 2002 and acquired by DIS in April of this year. China is becoming a major game outsourcing destination for companies seeking to lower their costs.
• New Horizon Interactive: Developed Club Penguin and purchased by Disney in 07. Specialises in producing and maintaining MMOGs

Key People

• Steve Wadsworth
• Graham Hopper
  

Not everyone likes computer games

Fantastic news that David and Richard Darling, co-founders of game developers Codemasters, were both made Commanders of the Order of the British Empire for their services to the computer games industry. I was a massive fan of BMX Simulator, Jet Bike simulator and Micro Machines. Not only we're they wonderfully addictive and innovative but I'm sure Jet Bike was where I first heard computers simulate speech. Sure the Queen's grandchildren were instrumental in her enjoying a good frag-fest.

However, not everyone in positions of power and authority are so enlightened. As games become more financially successful and popular the charges levelled against them grow louder. Although often based on an outdated understanding of what gamers do when they sit down to play I thought it would be useful for my ongoing research into GTA that I aggregate some of the more aggressive and prevalent anti-games organisations and spokespeople.

The Mothers Against Videogame Addiction and Violence organisation

Over the weekend, I stumbled apon an absolute gem of a website called MAVAV (Mothers against videogame addiction and violence). This is a group of collective mothers that in the intrest of their childrens safety try to spread warnings about violence in videogames and the possibilty of addiction. The reason I like this website so much however is just how over the top it is. They are firm supporters of Jack Thompsons crusade against gamers and will back him even on his most wild of claims. Here are some of the real corkers from the facts page:

Video games are proven to prevent proper development of social interactive skills which is needed for a happy enjoyable life. Gamers who pick up a controller very early in their lives are the most prone to life long burdens such as long term depression and sadness.

Psychological studies have proven that, even the most casual teen gamers are affected by video games and suffer from low self esteem issues compared to their more athletic and social peers. The studies also revealed, younger gamers were more likely to become lifetime addicts and social outcasts.

Perhaps their best work can be found under Resources. If you're trying to diagnose a bout of video game addiction in your brood look no further than their school report card:

A typical report card of a gamer:

English	Poor
Mathematics	Excellent
Science	Poor
Social Studies	Poor
Typing Class	Excellent
Physical Education	Poor

National Institute on Media and the Family

According to it's website The National Institute on Media and the Family is "the world's leading and most respected research-based organization on the positive and harmful effects of media on children and youth". Unlike MAVAV it seeks to monitor and report on all media it deems harmful to children and families. Led by Dr. David Walsh it has emerged as one of the most prominent critical voices directed at the video games industry. As an organisation it has been heavily involved in lobbying US politicians and retailers to protect children from killographic and sexual content.

NIMF is perhaps best known for its publicity and community outreach arm MediaWise. Yearly they offer a video game report card provides a snapshot of the interactive gaming industry with a focus on issues related to the welfare of children and teens. The 2007 report highlights incluide how "complacency on the part of retailers and parents, appears to have caused a backslide in ratings awareness and enforcement" and "irresponsible" public libraries and churches resorted to using video game tournaments with popular Mrated (Mature) video games, like Halo 2 to attract younger people.

Lion and Lamb Project

Although now disbanded, the Lion & Lamb Project was an initiative by American parents, providing information about the effects of violent entertainment, toys and games on children's behaviour. Daphne White, L&LP director was instrumental in lobbying congress for tighter regulation of computer games in May 2003.

Some useful quotes relating to GTA

If someone on the street offered to teach your children to decapitate their enemies, physically abuse women, and assassinate world leaders, you would probably call the police. But when a video game manufacturer provides the same 'service', many parents are actually paying for their children to get a tutorial in violence and depravity. And instead of calling the police for help in many popular games your kids will be killing police.
State Rep. Fred Morgan (R-Oklahoma City), The Muskogee Phoenix 12/5/05

Nine times out of 10, when you're blowing people's chests open with hollow-point bullets, you aren't playing as a terrorist or criminal. No, you're playing as a cop, a soldier or a special-forces agent -- a member of society's forces of law and order...yet anti-gaming critics didn't really explode with indignation until Grand Theft Auto 3 came along -- the first massively popular modern game where the tables turned, and you finally played as a cop-killing thug. Why weren't these detractors equally up in arms about, say, the Rainbow Six series? Because games lay bare the conservative logic that governs brutal acts. Violence -- even horrible, war-crimes-level stuff -- is perfectly fine as long as you commit it under the aegis of the state. If you're fighting creepy Arabs and urban criminals, go ahead -- dual-wield those Uzis, equip your frag grenades and let fly. Nobody will get much upset.
Clive Thompson - The Bad Lieutenant - Wired 11.21.05

GTA: the numbers

As I continue my research into place and GTA continues I thought it would be interesting to aggregate and share some of the numbers. Financial and business metrics are easy to come by. Reliable statistical and numerical data on engagement and depth need to be sought out.

GTA Business / Financial Impact

• Take Two said that as of May 31, it has sold 11 million GTA IV units to retailers and around 8.5 million units to consumers [Next Gen]
• GTA IV released on April 29 for Xbox 360 and PS3 and sold 6 million units globally in its first week [Next Gen]
• GTA IV generated over $500 million at retail in it's first week [Next Gen]
• Take Two estimated more than 8.5m copies of 'GTA 4' were sold by the end of May [Next Gen]
  
• GTA: San Andreas from 2004 is the top-selling game in the U.S of all time with 9.43 million units sold [NextGen]
• The GTA franchise shows up on the top 10 selling games of all time three times [NextGen]
• The release of 'Grand Theft Auto 4' sent US sales of gaming hardware and software equipment up 47% in Apr, compared to the same month in 2007 [NPD]

Engagement

• In the first week, more than 2.3 million people played Grand Theft Auto IV on Xbox LIVE [Gamescore]
• Grand Theft Auto IV set a new record for time played, with the average gamer spending more than four hours playing the game on LIVE in the first week alone [Gamescore]

Liberty City

• In terms of pure landmass its Liberty City in GTA IV is roughly three times as big as the version in GTA III [GTA]
• Liberty City in GTA IV took three years to design and build [GTA]
• During the research phase of GTA IV the production team took around a quarter of a million photos of NYC [GTA]
• Every street in GTAIV has a name [GTA]

Ambient Controllers

Bespoke, playful controllers for console games have exploded onto the marketplace ever since Harmonix released the first Guitar Hero game in 2005. Although not the first, the  five-button, guitar-shaped controller, designed uniquely for the game became a huge success, both critically and commercially and a cultural phenomenon. It set the tone and direction for future development with games like Buzz, Rock Band and probably even the Wii and it's slew of accessories and controllers.

Thinking, as I have been recently, about how the BBC might use the Wii's internet channel to develop a Dr Who game I wondered how you could enhance the experience with the aid of BBCW's merchandising team. Again, Dr Who seems like the most potent example.

BBCW already produces the Doctor's Electronic Screwdriver as a children's toy. Sure, it features cool sound effects, faux chrome styling and a laser but wouldn't it be wonderful if, in the vicinity of a games console it became a controller.  Instead of developing a custom controller with a game, deliver a controller as a toy that could be played with in a traditional way or in an enhanced way as a custom controller.

The Geography of Grand Thef Auto

Every spare moment since April 29th has been spent playing and thinking about GTA IV in anticipation of putting together a paper on the geography of Grand Theft Auto.

The latest instalment takes you back to Liberty City boasting an increased level of realism; so much so in fact that the design fanaticism involved in it's creation is already legendary.

Despite this apparent increase in credibility, these environments are not re-creations of real urban locales, but rather reixed, hybridized cities fashioned from popular culture's myths around American geography.

With GTA being one of the moist culturally significant video game franchises in history it begs some serious questions about whether or not the tools and philosophies we've developed for decoding real cities and space are applicable. Are there new ways of looking at 'half-real' spaces that will help us better understand the cultural impact of Liberty City and perhaps games more generally.

Still early days but I'm currently reading the following:

• Nate Garrelts' The Meaning and Culture of Grand Theft Auto (McFarland, 2006)
• Jesper Juul's Half-Real: Video Games Between Real Rules and Fictional Worlds (MIT Press, 2005)
• David J. Leonard's article Not a Hater, Just Keepin' It Real (Games and Culture, Vol. 1, No. 1, (2006)
• Soraya Murray's High Art/Low Life: The Art of Playing Grand Theft Auto (PAJ, Journal of Performance and Art, May 2005)
• Zimmerman and Salen's The Game Design Reader (MIT Press 2006)
• Le Gates and Stout's The City Reader (Routledge 2007)
• Henry Jenkins on Why Grand Theft Auto Should Be Taught in Schools?
• Kurt Squire's From Content to Context: Videogames as Designed Experience

Any other suggestions or recommendations would be welcome.