costik's blog

Costik Reacts to IGF Awards: Die, Motherfuckers

I am weary. I am tired of being me. I am tired of being the angry middle-aged man of the game industry. I would like to hang it up, like an old coat, and shut it in the closet. But I guess I can't put it aside.

I attended the IGF Awards this evening. In general, I love the IGF. Not unreservedly, of course; it is not without flaw. But it is, by and large, a Good and Fine Thing, and has been instrumental in creating and sustaining independent games as a movement. I was quite looking forward to it.

You can find a video of the ceremony here.

And award winners here, since I'm not actually going to talk about that

My first intellectual discontinuity came when I approached the awards venue and discovered Steve Petersen, one of the designers of the Champions RPG, working to ensure that only VIPs got into the VIP line; apparently my speaker badge authorized me to sit in the VIP area. I elected to sit instead with the plebes.

I was basically okay through most of the proceeds, snarking to myself a bit at the lame scripted "jokes" of the presenters and the intellectual discontinuity created by their adoption of tuxedo and gown. A tux does not say "indie" to me. But I understand that to the average American it says "class," and perhaps this is understandable as some sort of external index of respect.

Cactus, by the way, was perfect.

When the presenters were swept off the stage to make room for some chickie from IGN (that lickspittle shih-tzu of the major publishers that sustains its existence by posting reworded press releases and raving about big-budget releases while providing only occasional and condescending coverage of indie games) I sighed deeply, but reminded myself that the IGF depends on corporate sponsorships, and no doubt had received a nice piece of change from this corporate entity in return for their right to grant, and brand, the IGF's most important award.

After some forgettable blather, we were then subjected to a video, presumably prepared by the sublime idiots at IGN, about what they claimed were the "top five indie games not in the top five indie games." This consisted of short gameplay videos from five imaginary games. These imaginary games were supposedly humorous, but consisted of a) really stupid game ideas, b) implemented in a really stupid way, with c) really stupid graphics. Haha. Indie games are stupid. (At 38:40 in the video linked above.)

Did ANYONE at IGN consider that they were basically totally dissing the games their spokesperson was just about to issue an award to?

Did ANYONE at CMP consider that they had, in exchange for a corporate sponsorship, just set up a situation that totally undermined the gravitas of the event as a whole?

Did ANY of the idiot audience members who tittered at this inane video realize that, in context, it was essentially insulting the whole enterprise of indie gaming?

I stalked from the room in fury.

I was the only person to do so.

I don't like living in my skin sometimes. Apparently, I was the only person in that room filled with thousands who was revolted and offended to the core. I am a fool.

I was about to write: We deserve better. But of course, I created no game last year that I could have submitted to the IGF, so it would be inappropriate for me to take on the mantle of "indie game creator" or to have the temerity to speak for those who are. But I can say they deserve better; they deserve to be treated with a degree of respect, and indeed, the whole structure of the IGF ceremonies, and the prominence it receives within the GDC awards as a whole, and even the noxious tuxedo-and-gown garb of its presenters, is calculated with the idea of promoting a degree of respect.

Why then should CMP, and for that matter IGN, however gormless they may be, think it remotely acceptable to undermine that respect with this jejune, unfunny, disrespectful, noxious, subversive, lame, and repulsive piece of juvenile "humor"?

Ha ha.

Die, motherfuckers.

And so to bed.

Off to GDC

I'm leaving for GDC Monday evening. I'll probably be blogging from there, and I have some games in the hopper to post, but it's possible we won't get to our five for the week, for which I trust you'll forgive me.

I'll be speaking Tuesday afternoon, on a panel on pre-production at the Serious Games Summit, with Lynn Sullivan, Rebecca Stoeckle, and Sonny Kirkley. Just a short presentation from me, the title of which is "Prototype More, Suck Less," which I'll post here after I get back.

Pay with FaceBook and Why Pigs Fly

Will social games go the same way as the casual downloadable market?

Some of the characteristics of the social game market are very similar to those of casual games. There is little marketing and promotion in either market, because social games rely on the viral nature of social networks to spread the word; cloning is already a problem. The audience demographics are similar. Both are typically played in short sessions.

The major difference (so far?) is that there's no equivalent of the portal in the value chain. Social game operators retain a full 100% of the revenues they generate (less a few percentage points for using Paypal or a credit card gateway) -- by contrast to the mere 20% that casual downloadable game companies get from the portals. Coupled with minimal marketing costs, this is a sweet, sweet deal, and it's no surprise the market has engendered such enthusiasm.

FaceBook Needs Revenue

The 100 pound gorilla in the room that no one talks about, however, is whether (or more likely, when and how) the social networks themselves will demand a piece of the action. Mostly, Facebook, MySpace and the others appear to be happy, so far, to have third parties provide services to their users that increase the value of the service to those users -- social games attract and retain users for the network as a whole.

Yet all of the mass-audience social networks have huge valuations that their current level of revenues do not remotely justify. For example, the valuation of FaceBook is currently just under $10 billion. If you accept a p/e (price/earnings) ratio of 20 as typical for a company in the long turn, this implies that FaceBook is expected eventually to earn annualized profits of around $500m. Last year, FaceBook had total revenues of about $400m, of which $150m was from a probably unrepeatable ad deal with Microsoft. FaceBook claims to have reached profitability in 2009, but presumably just barely -- in other words, profits were unquestionably a small fraction of that $400m.

Meanwhile, the major social game providers are all profitable, apparently at a high level, and themselves supporting valuations in the hundreds of millions.

In other words, if FaceBook is to be sustainable at anything like its current valuation, it needs to ramp up revenues quickly -- and the obvious source to tap is all that game revenue.

Enter "Pay with FaceBook"

As it happens, FaceBook has been clear about where it expects its next big addition to revenues to come from; it's from Pay with FaceBook. Pay with FaceBook is a payments system, whereby users buy FaceBook Credits and can then spend them on any service on FaceBook that integrates with the system. Interestingly, there seems to be some confusion, among analysts at least, as to whether this is expected to ultimately be a PayPal killer, or merely a FaceBook-specific virtual currency -- and in truth, the system could go either way. But it's notable that one of the options for purchasing FaceBook Credits is -- tada, PayPal. If FaceBook were planning on competing head-to-head with PayPal, they presumably wouldn't be doing this.

FaceBook executives have gone so far as to say that they expect Pay with FaceBook to double the company's revenues over the course of the coming year, and this is not, in fact, impossible.

But what does it mean for social game providers? Well, of course it means that they can now offer another payments system to their customers, one that a high proportion of their customers, being FaceBook users by nature, are likely to adopt. And another payments system, especially a widespread and easy to use one, will by nature increase revenues.

BUT: Pay with FaceBook charges 30% of revenues to sellers of virtual goods -- and virtual goods are what social games sell.

Payments System or Retailer's Cut?

Now, you can view this in either of two ways: If you view Pay with FaceBook as a payments system, this is extortionate. PayPal and every credit card gateway charges a single-digit percentage for handling transactions, almost always under 5%, typically with an additional per-transaction charge of 25 cents or less. In other words, viewed as a payments sytem, Pay with FaceBook is the single most expensive system available anywhere on the planet (with the sole exception of mobile payments, which are even more onerous, and which is why mobile payments have not taken off).

Viewed as a cost for accessing a distribution channel, however, 30% is pretty reasonable. It's what XBLA, WiiWare, and the iPhone app store take. It's a far better deal than the casual downloadable market offers, where portals and intermediaries like Oberon/i-Play want 80% of the consumer dollar -- and a far, far better deal than developers get in the conventional digital game market, where they typically receive a skinflint 15% of wholesale revenues, entirely recoupable against development advances.

And it is, at the moment, only one, optional, additional payments system; social games can still take credit cards and use PayPal and so on, and aren't even required to integrate with Pay with FaceBook.

And how long will that last?

The Network Owns You

Social network games live and die by the social network. The virality of those networks, the ability to grow big audiences quickly, is the single vital reason social network games are successful -- it's surely not the excellence and intensity of their gameplay. If you are a social network game provider, of course you will integrate with FaceBook credits; the last thing you want to do is piss off FaceBook. If they want you to adopt Pay with FaceBook, of course you do so. Because game developers are not fools, and they know that if FaceBook wants to, it can utterly cripple them. FaceBook is under no obligation to allow third parties access to their network.

In other words, social network games are ultimately in precisely the same position, vis-a-vis the social networks, as casual downloadables are relative to the portals. The social networks are in the whip hand. They are the main providers of value. The social network game providers are like intestinal bacteria; they may help their host, but their survival is entirely at the host's whim.

The Precedent

An important precedent is being set here. FaceBook is dialing itself in for a piece of the social gaming pie. It's a small piece, at present. As social network game revenues continue to soar -- and, as usual, the analysts are predicting beellions and beellions of dollars any day now -- why should FaceBook (and the others) not take a bigger chunk. Why shouldn't the "Pay with FaceBook" option become mandatory? Why shouldn't that 30% become 40%? 50%? Even 80%?

We've seen this before, in the casual downloadable market; initially, the portals took a mere 50% of the consumer dollar. But they realized who was in the driver's seat, and that 50% grew and grew, and the result is the steaming pile of poo that is the casual downloadable market today.

Now, possibly FaceBook and the others will look at the lessons of the casual downloadable market, and realize that to sustain social games they need to sustain a viable business ecosystem, in which developers can continue to profit and in which incentives for innovation are maintained. Possibly, they will say, "Yes, we could grab 80% of all that tasty revenue, but it's a bad move, long term." Possibly, the social networks are corporately wise, morally upright, good and kind. Possibly they'll say "never mind the valuation we need to support, we must do The Right Thing."

Also possibly, pigs will fly.

Genetic engineers are working on the problem today. Honest.

Game Cloning

One of the banes of the casual game and social game markets is cloning; that is, whenever a successful game appears, developers quickly produce games with essentially identical gameplay patterns. Surprisingly, there is far less of a first-mover advantage for the innovator than you might expect, particularly for small game providers cloned by larger and established companies, who can leverage their existing customer relations to grab share of the new game style.

Cloning, of course, means that a gameplay innovator profits far less than he or she might otherwise by launching an original game; and thus diminution of the value of innovation reinforces all game markets' tendency to become repetitive and boring over time.

The prevalence of cloning in social and casual games is particularly interesting, because cloning was also problem in the 19th century tabletop game market -- but is not a particular problem in the conventional videogame market, the mass-market tabletop market today, the hobby games market, or the mobile games market.

What's the reason for this difference?

It is, ultimately, a consequence of the nature of marketing in the different industries. In the casual game market, publishers and developers spend virtually nothing on marketing and promotion, and simply rely on the firehose of traffic that the portals supply. Similarly, in the social game market, very little is spent on marketing and promotion, with developers relying on the virality of social network user communications to attract players. And also similarly, in the 19th century, advertising and promotion was in its infancy, and publishers relied mostly on establishing as many points of sale as possible and hoping that word of mouth would generate sales.

By contrast, the conventional videogame market spends hugely on marketing and promotion; the mss market game market depends on "old faithful" brands and also spends in the millions promoting newly launched games; mobile games also depends on "old faithful" brands like Tetris, and on games that piggyback on the marketing spend for properties licensed from other media; and the hobby games market depends partly on franchises (the tendency of RPG and TCG players to purchase more product for games they like) and partly on author recognition (boardgamers follow designers whose work they like).

In other words, in markets where cloning does not happen, or rarely happens, it is because an innovator can, through marketing, promotion, and establishing a brand synonymous with a style of gameplay, gain a major first-mover advantage. In markets where cloning does happen, marketing and promotion, and the consequence ability to build brand identity, is weak.

Of course, this "weakness" is also in a sense an advantage; in these markets, game providers' profitability is unquestionably enhanced by the fact that they do not have to spend substantially on marketing and promotion. But the downside is that it is hard to establish brand value, which weakens game providers in negotiations with other members of the value chain, and also makes it harder for them to erect barriers to competition and build sustainable and protectible businesses.

Thus, the reliance of the casual downloadable market on portal distribution has proven to be something of a Faustian bargain; it allowed the market to grow rapidly, but it left the portals in effective control of the market, which they used to squeeze the publishers' and developers' margins, and left publishers and developers with little in the way of a sustainable competitive advantage.

Will social games go the same way? I'll post on that another day.

I Choose You, Calcium!: Comment on My Grant Proposal

So, I submitted a proposal to the Macarthur Foundation's Digital Media and Learning Competition for funding to create a game called Elemon. You can read and comment on the proposal here.

The basic idea is this: Pokemon players memorize a wealth of information about pokemon -- type, attacks, what they evolve into, and all that. Why not harness the proven learning characteristics of the game and its sequels to teach players something real?

Elemon is in one sense just a Pokemon reskin -- except that the "monsters" are based on the elements, "type" translates into element type ("noble gases are powerful against alkali metals!"), and combat stats derive from things like atomic number and valence number. In other words, you learn stuff by playing that might actually be useful in your chem class.

The idea is to release it as a free Flash game through major Flash game portals, and develop it for not a huge amount of money with talent from South America (hello, Patrick).

This is a competition, and there are hundreds, maybe thousands, of entrants, and a relatively small pool of capital for Macarthur to distribute. I'm not sure on their selection criteria, but since they're allowing comments, my guess is that positive comments don't hurt, so I'm doing the ethically dubious thing of urging you to comment on the proposal. You probably have to register for the site first, though.

I don't actually expect this to happen, but I think it's a cool idea in any event. And it would be fun to work on.

costik on Another Castle

I was interviewed on a NY-area podcast devoted to games, Another Castle, last week. Link to mp3 is here; and previous episodes, including interviews with Anna Anthropy, Mark Essen, Wade Tinney, Heather Chaplin, Jesper Juul, Eric Zimmerman, Frank Lantz, and Richard Rouse III are here.

Pax Britannica Images

I've been working on a 2nd edition of Pax Britannica for a couple of months now (ongoing discussion on Boardgamegeek here).

One of the things I like about the modern world is the easy of access to visual resources -- not all public domain, of course. But for a test this weekend, I decided it was otiose to continue using the money from Axis & Allies (and anyway I was running out of bills toward the end-game), so produced my own game money. And I wanted it to look period, so I found a reproduction of the "white" Bank of England five pound note that was used from the late 19th through early 20th century, and had Karen take it into Photoshop to modify it, producing:

...with variants for 1, 10 and 20 pounds, printed on differently tinted paper.

Similarly, I've replaced the "colonial office income table" of the first game with cards for each of the Great powers; a pound amount, with some appropriate legend ("The Chrysanthemum Throne allocates for colonial ventures" for Japan) on the front, and the country name and an appropriate image on the back:

That's an official portrait of Kaiser Wilhelm, of course. Britain has Victoria; France the famous painting of Marianne leading the revolutionaries; the US a period tinted postcard image of the Statue of Liberty; Japan the Meiji Emperor; Russia the Czar Alexander; Italy King Umberto; and Austria-Hungary, the King-Emperor Franz Joseph.

Plus, there's a wealth of vector-graphic images of flags, including historical ones, through Wikimedia and Creative Commons (though I haven't found a good one of the Spanish royal flag), and even a nice illustration of HMS Dreadnought:

Fear the Boom and Bust

A Hayek vs. Keyes Rap. Nothing to do with games, but nice to see technology put to a use that isn't brain-dead.

Junta discounted

Junta is $13 on Tanga at the moment, which is an excellent deal.

2010 IGF Reviews

Many 2010 IGF finalists are not yet available to the public -- with games that intend to have some kind of commercial release, it's common to submit to the IGF while the game is still under development. And we don't generally review games that you can't actually play, since that, you know, kind of subverts the site's title. But we've reviewed all that you can play as of the present, and I'll update this page when other games are released and we review them, to point to those reviews. But at present:

Seamus McNally Grand Prize
Rocketbirds: Revolution
(N.B.: A playable version of Super Meat Boy is not yet available, but here's our review of Meat Boy, its freeware precursor.)

Excellence in Visual Art
Rocketbirds: Revolution

Excellence in Audio
Rocketbirds: Revolution
(N.B.: A demo of Shatter is available on the Playstation Network, but we also don't normally review console titles.)

Excellence in Design
AaaaaAAaaaAAAaaAAAAaAAAAA!!! -- A Reckless Disregard For Gravity
Star Guard

Nuovo Award
Envirobear 2000
Today I Die

Technical Exellence

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