GAMESbriefUnpluggedVol1 20freeversion

GAMESBRIEF UNPLUGGED:
VOLUME 1 ON COPYRIGHT, POLITICS AND OPINIONS
NICHOLAS LOVELL
1 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Copyright 2011 by Nicholas Lovell
This work is licensed under the Creative Commons Attribution-NonCommercialShareAlike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
ISBN: 978-1-4466-1370-2 Published in Great Britain by GAMESbrief
For more analysis, opinions and insight, visit www.gamesbrief.com
If you have any comments on this manuscript, please contact nicholas@gamesbrief.com
To buy a physical copy of any of the books in the GAMESbrief Unplugged series, visit www.gamesbrief.com/store
ABOUT THE AUTHOR

Nicholas Lovell is a former investment banker and web entrepreneur who helps games developers become publishers. He also provides strategic and online marketing advice and is a non-executive director at developer nDreams. Clients have included Atari, Channel 4, Channelflip, Dynamo Games, Firefly, (who recently self-published MMO Stronghold Kingdoms), IPC Media, Rebellion and Square Enix. He is the author of How to Publish a Game and blogs about the business of games at www.gamesbrief.com.
ALSO BY NICHOLAS LOVELL
Get the inside track to self-publishing Discover the four key roles of a publisher Learn what YOU need to do get your game to market BUY How to Publish a Game now!
For Andrew Downer A good friend, who will be sorely missed
ACKNOWLEDGEMENTS
There are so many people to thank for their help on GAMESbrief over the past two years that it will be impossible to list them all. Ill have a go. Huge thanks to Kyle Ackerman, Simon Bradbury, Nic Brisbourne, Charlie Burton, Rob Crossley, Stuart Dredge, Sean Dromgoole, Konstantin Ewald, Rob Fahey, Michael French, Kevin Heery, Wil Harris, Paul Gardner, Justin Gaynor, Dan Griliopoulos, Tom Jubert, Tadhg Kelly, Andy Lane, Alan Li, Scott Maclean, Patrick OLuanaigh, Nick Parker, Gill Pritchard, Tony Mott, Ben Parfitt, Ben Rooney, Roy Schmidt, David Sena, Stephen Totilo, James Wallis, Alex Wiltshire. If you helped me out in the past two years, whoever you are, Im enormously grateful. Thank you to all my clients who trust in me, and whose projects are endlessly varied and fascinating. There is nothing like working on live projects to focus your mind. Thank you to all the conference organisers who let me speak. I use those occasions to hone my thoughts, and many of the biggest breakthroughs in my thinking can be traced to specific conferences. GAMESbrief is part blog, part consultancy and part community. I hope to focus on the community part, making it a place where anyone interested in the business of games can gather, share and discuss the opportunities and challenges facing our industry today. To make that happen, I need readers. So thank you to everyone who reads GAMESbrief and is reading this book. You make it all worthwhile. Finally, I have to thank my family. To Catherine, Alasdair and Lucy for putting up with me working from home, working late and working when I should be playing. 7 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Thank you.
PLEASE SHARE THIS BO OK
GAMESbrief Unplugged will be available in many formats. It will be a free pdf, a version optimised for Kindle and other e-readers, a paperback, a hardback and a limited edition hardback. Please share it widely. Tell your friends. And if you like it, please buy the physical or ereader copies (which is the only way I will make money from this) at www.gamesbrief.com/store/unpluggedvol1. I hope to see you for future volumes too.
Nicholas
CONTENTS
About the author ............................................................................................. 3 Acknowledgements ......................................................................................... 7 Please share this book ..................................................................................... 9 Contents ........................................................................................................ 11 Opinion .......................................................................................................... 15 Why I was tempted to discriminate against women ................................ 17 OnLive has only 2 potential customers: Microsoft and Sony .................... 22 Does Gaikai herald another change to Internet infrastructure? ............... 27 There has never been a better time to be a developer ............................ 29 Cognitive surplus reclaiming the energy locked in the sitcom. .............. 34 Two reasons Facebook is about to become bigger than Google .............. 37 Ten reasons microtransactions are better than subscriptions ................. 40 Why its time to stop wondering where should we go from here? ....... 44 Game over, Britain .................................................................................... 45 Stop giving your worst performers 80% of your time ............................... 48 My take on Blizzards RealID campaign: World of Warcraft gamers, please just grow up .............................................................................................. 50 If video games cause violence, there should be a correlation between game sales and violent crime, right? ........................................................ 52 How $4.25m was not enough to save Eternal Earth developer Sparkplay 54 Why the mass market will NEVER be gamers ........................................... 58 The end of the game developer ................................................................ 60 I think I was wrong about the iPad ........................................................... 62 EA Louse, you are no EA Spouse. Your pettiness is shocking .................... 63 Five tips on gamifying your website, before you even begin.................... 66 11 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
What you really learned at school ............................................................ 69 Panoroma investigates games addiction, offers balanced, fair reporting 71 If you believe in Internet freedom, you should hate the DDOS attacks in defence of Wikileaks ................................................................................. 74 Go buy Settlers of Catan. Seriously ........................................................... 76 Copyright ....................................................................................................... 77 Is Constantin Film the stupidest company in the entire world? ............... 79 YouTubes Downfall advice: Contest the takedown ................................. 82 Is criminalising someone for NOT password-protecting their Wi-Fi so wrong? ...................................................................................................... 84 The state of DRM on the PC ...................................................................... 86 US courts find in Googles favour of safe-harbour provisions of DMCA in Viacom case .............................................................................................. 89 Filesharing, copyright and my attempt to change the attitude of the music industry ..................................................................................................... 91 Is EMI as stupid as Constantin Film as it enforces takedown of the Newport video parody? ......................................................................... 96 Maybe EMI arent the bad guys on the Newport / Empire State of Mind takedown after all ................................................................................... 100 Why the very structure of the Internet will destroy copyright ............... 103 Tax credits ................................................................................................... 105 Are tax breaks dooming Canada to second-class status? ....................... 107 Video game tax breaks: Short term gain for long term pain? ................. 110 The case for tax breaks was never really made, says Simple Life Forms Tadhg Kelly .............................................................................................. 115 A developer speaks on why he emigrated to Canada. Hint: Not for tax reasons .................................................................................................... 117
The Scottish Parliament claims copyright over my work. How can this be right? ....................................................................................................... 119 I won. Parliament wont sue me for publishing my own work ............... 122 Seven reasons why the Coalition rejects tax credits for the UK games industry ................................................................................................... 126 Politics and the press ................................................................................... 133 Time to end the dangerous split between ELSPA and Tiga? ................... 135 The Chairman of TIGA changes my mind about a TIGA/ELSPA merger .. 136 Games cause rickets a thorough debunking ..................................... 138 Scientists behind games cause rickets deny a specific link .................. 143 Iain Duncan Smiths Violent Games Controversy: Credit Where Credits Due .......................................................................................................... 147 Rumours of Keith Vazs Malevolence Have Been Greatly Exaggerated .. 149 Salman Rushdie, video games and my letter to the Financial Times ...... 151 We have won the battle.......................................................................... 154 Television is not just for slack-jawed old people waiting to die any more ................................................................................................................ 156 What you need to know about Youth Protection rules for games in Germany.................................................................................................. 158 Surprise development yesterday stops Januarys new Online Youth Protection laws in Germany ................................................................... 164 Books ........................................................................................................... 167 Review of The Black Swan by Nassim Nicholas Taleb ............................. 169 Review of The Big Picture, Money and Power in Hollywood, by Edward Jay Epstein .................................................................................................... 174 Why Outliers pisses me off ................................................................... 176 Review: The amateurish Cult of the Amateur ......................................... 179 The lists........................................................................................................ 185 13 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Top Ten Turkeys from the Noughties...................................................... 187 Ten games businesses that are doomed ................................................. 198 Why I wrote Ten games businesses that are doomed ......................... 209 Ten games businesses that are blessed .................................................. 218 The ten issues that will challenge the games industry in 2011 ............... 232 Glossary ....................................................................................................... 239 Bibliography................................................................................................. 243 List of Figures............................................................................................... 245 List of Tables ................................................................................................ 245 Index ............................................................................................................ 247
OPINION
GAMESbrief is not a news site. I dont try to tell people what is happening; I try to explain why its happening. These posts are part of that analysis, with a hefty dollop of my own opinions. Comments are an important part of a blog, but are difficult to recreate in book form. I have included a link to every post so you can track down the comments if you so wish.
WHY I WAS TEMPTED TO DISCRIMINATE AGAINST WOMEN 1

November 27, 2009 | Nicholas Lovell It may seem odd to be writing about womens employment and maternity rights in a blog dedicated to the business of games, but I make no apology. It is a fundamental issue that has already sparked debate in the technology 2 world and will become more important in games as our industry matures (and as more developers become publishers). Prospect magazine this month carried an article entitled The mother of all paradoxes which produces compelling evidence that generous maternity 3 rights lead to systemic discrimination against women. As a former startup CEO, I fear Prospect is right. The moral case for maternity rights seem clear to me, but if they achieve the opposite effect to that intended, is the conclusion clear cut? And even I as I put forward the arguments, I find that I cant make up my mind, and I need your help.
FAMILY-FRIENDLY EMPLOYMENT LAWS HURT THE EMPLOYMENT PROSPECTS OF WOMEN

Catherine Hakims argument in Prospect can be summed up like this (although I urge you to read it for yourself. The arguments are much more sophisticated and are backed up by more research than I can prcis here. Unfortunately, its
http://www.gamesbrief.com/2009/11/why-i-was-tempted-to-discriminateagainst-women/ 2 See, for example, http://www.guardian.co.uk/technology/blog/2009/apr/23/women-intechnology 3 http://www.prospectmagazine.co.uk/2009/11/the-mother-of-all-paradoxes/ 17 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
behind a paywall a sort-of summary can be found in this opinion column from 4 the Telegraph ): The law penalises employers for not keeping a role open for a woman on maternity leave, while the mother can quit at any time with no penalty. Only about half of women return to their previous jobs, a figure largely unchanged since maternity protection was introduced in the 1970s. Sixty per cent of women signalled their intention to return to work, but research suggests that two-thirds of those that pledge to return had no intention of doing so (I struggle to reconcile this point with the previous one). The impact on businesses can be substantial as women in senior professional and managerial roles cannot always be easily replaced. Evidence from Sweden suggests that family-friendly employment policies have been the cause of the glass ceiling for women, not the solution to it (my emphasis). Onerous maternity protection leads the private sector to systematically avoid hiring women, who then mostly work in the less well-paid public sector. Research has suggested that maternity leave of around three to four months helps womens employment but longer periods lead to what economists call statistical discrimination against women in general.
In short, extending maternity rights can cause sufficient headaches for businesses to prompt blanket discrimination against women, except in the public sector.
MY HIRING EXPERIENCES
As a vice-president at Deutsche Bank, I was involved in interviewing candidates for graduate roles in the Media Corporate Finance division. I am convinced that
http://www.telegraph.co.uk/comment/6622521/Harriet-Harmans-costlyEquality-Bill-wont-do-anything-for-women.html 18 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
I had no gender bias, and the media team had one of the higher proportions of female to male graduate recruits in the division. The thought of maternity issues never crossed my mind. Even if they had, Deutsche Bank could easily have afforded to pay generous maternity rights, although Prospect says that some private sector employers especially in the City take the view that it is cheaper in time and money to dismiss a pregnant woman and pay compensation, so that a permanent replacement can be appointed immediately. As CEO of GameShadow, the thought did cross my mind. We were a small, struggling start-up with limited revenues. I wondered how we could cope if an employee became pregnant. It was not only the financial costs but the whole process and distraction of finding and training a temporary replacement that worried me. I cant say how I reacted, because we didnt get a single female applicant for any of the roles we advertised while I was there. (Why no women applied is a whole different subject for discussion, although since we were looking for technology staff in a hardcore PC gaming website, perhaps its not that surprising.)
THE CHALLENGING PARADOX

I like to think Im socially liberal. I believe maternity leave and working flexibility are something that should be available in a civilised society. (Full disclosure: I have a 12 month old baby; maternity rights have been important to me in the last year). But the entrepreneur/start-up adviser in me is conflicted. Businesses benefit from a diverse workforce (ages, genders, ethnicities) and avoiding any one group eliminates a large pool of talent. But the risk of having a substantial portion of your workforce away on a legally-protected absence, preventing you from hiring and training a replacement or forcing you pay two salaries, is a huge burden to put on any business, let alone one built on such shaky foundations as a startup. 19 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
And if I worry about this, what will less scrupulous business people do? Theyll do what Catherine Hakim warns about and avoid hiring or promoting younger women at all.
WHY THIS MATTERS TO GAME DEVELOPERS

The games industry is maturing. We are no longer an industry that attracts only games-obsessed men whose only interest is coding. Developers are becoming publishers, meaning they need marketers, finance teams, lawyers. In short, they need talent, and many of the best candidates are women. Amongst my clients at the moment, there are women as head of studio and head of marketing. There are women in web design, in core coding, in finance and in art. Our industry is expanding and is no longer exclusively the preserve of men. Companies who have previously only had a few women employees will move towards an equal split. But the issues Ive highlighted above may put them off hiring the best candidates.
WHY THIS MATTERS NOW

(UPDATE: It was pointed out to me that the Equalities Bill doesnt, in fact, include extending maternity rights. I blame Prospect, although it was ambiguous: Her equalities bill follows Swedens lead, where maternity leave has been extended to three years and fathers are forced to take paternity leave.) Harriet Harman is introducing an Equalities Bill that would extend maternity 5 leave to three years. Catherine Hakim warns that this might be detrimental to the prospects of all women, although it may well be beneficial to mothers. Im already worried about the existing legislation. I dont know what to think about this new bill. Will it help more than it will hurt? How do we reconcile
5
http://www.equalities.gov.uk/equality_bill.aspx 20 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
family-friendly policies with the needs of business? How do we attract more women into games, technology and startups when the financial burden could (and I only mean could) be disastrous for an employer. I dont want to start a flame war but I want to open a discussion into an issue that has bothered me for three years now, on which I cant make up my mind. Over to you. *** This post marked a turning point for GAMESbrief. The topic had been bothering me for a long time. I felt it was an important issue but was scared about admitting I had even thought about it. I sat for ten minutes deciding whether to hit the publish button. I am so glad I did. The post rocketed to the top of the most popular list. It was retweeted by nearly 50 people (including Mike Butcher of TechCrunch) and is still the fifth most popular post on GAMESbrief. I now feel that if a post makes me scared to write it, it will resonate with my audience. Ive started to looking for the ideas that make me scared and writing about them. I hope that means that I have raised issues that are bigger and more important over the past 18 months.
ONLIVE HAS ONLY 2 POTENTIAL CUSTOMERS: MICROSOFT AND SONY 6

April 7, 2009 | Nicholas Lovell The analysis and commentary on the OnLive service announced at GDC last month is all missing the point. OnLive isnt aimed at consumers. Its aimed at the only two potential customers in the world: Microsoft and Sony. The big news at GDC last month was OnLive, a streaming video game service that claims to offer top quality games with outstanding graphics instantly through a broadband connection. While the company made a huge impact at the show, the service has met with a great deal of scepticism. Eurogamer ran a two page detailed analysis of the 7 service, concluding that OnLive cant possibly work. Many industry commentators argue that the cost of the server farms required to deliver these games will be impossibly huge and broadband speeds are not high enough to deliver this service.
WHERES THE COMPELLING CONTENT?

Whether or not the technology works (and Im inclined to think that it works at some level), there is a broader question that has not been addressed: the source of compelling content. OnLive boasts that it has the backing of publishers including EA, Ubisoft, Take2, Eidos, Atari, Codemasters and THQ. This seems perfectly likely, since the publishers are trying to investigate a range of digital download options like Steam and Metaboli. Why not also add OnLive to the mix? If the service doesnt take off, no skin off their noses. Its not like they have given an exclusive or anything.
6
http://www.gamesbrief.com/2009/04/onlive-has-only-2-potential-customersmicrosoft-and-sony/ 7 http://www.eurogamer.net/articles/gdc-why-onlive-cant-possibly-workarticle 22 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
And thats the crux of the matter. OnLive has no exclusive content. An OnLive customer can get his games from OnLive. Or he can get them on the PC. Or the Xbox 360. Or the PlayStation 3. To which OnLive would respond But why would he, when he get them all, blisteringly fast, from us? And to which I would answer Because he already does. OnLive is trying to push through a major change in gamer behaviour. Gone is the model of buying a console and then buying games for it when you have the money or the inclination. In comes a monthly subscription analogous to subscribing to cable TV. OnLive wants us to throw out our cash investment in an expensive console or premium gaming PC. To throw out our libraries of games and start over. And the problem is not that it wont make sense for some people. It surely will. The problem is whether it will make sense for enough people to cover the insane capital expenditure to build the network.
BUT SURELY THAT WAS THE PROBLEM WITH SATELLITE TV?

The analogy with pay-TV is a strong one. The capital intensity of paying for or licensing a transponder on a satellite in orbit or building out a cable network makes it a very risky investment. Until the service reaches critical mass, the service haemorrhages cash. This is exactly the problem that Rupert Murdoch had with his Sky satellite service. Until he secured exclusive rights to the Premiership Football League. Suddenly, 40% of the British population found that the only way they could watch key football matches on a Saturday afternoon was to subscribe to Sky. Sky never looked back and currently has over 9 million subscribers in the UK and Ireland.
So all OnLive needs to do is to secure some must-have content that is so compelling that millions of people will have to subscribe to its service, rather than getting their games the old-fashioned way on consoles or via download services like Steam, Metaboli and AWOMO. The problem is that I struggle to think of any gaming content that is anywhere close to the value of Premiership football. The nearest I can think is World of Warcraft. If OnLive could persuade Activision to make WoW an OnLive exclusive, thats up to 11 million players who might be forced to convert. (Of course, many of these players are in China or other territories where they are unlikely to pay for an OnLive subscription). Warcraft generates over $1.1 billion in revenue every year. The mind boggles at the amount that OnLive would have to pay to secure a multi-year exclusivity deal. It would certainly be multiples of the costs of the server farms and infrastructure that so many analysts seem worried about. So even assuming that the technology works, acquiring the compelling content to make the service attractive to consumers may be prohibitive.
IS ONLIVE JUST A MAD IDEA?

So what is Steve Perlman up to? The CEO of OnLive is no stranger to grandiose technologies. In 1995, Perlman founded WebTV, a pioneering combination of a cheap set-top box and a subscription service that streamed Internet access to the television. Two years later, Perlman sold the service to Microsoft for $425 million as part of Microsofts long-term effort to combine the best of the 8 Internet and the best of digital television technology. The service had approximately 50,000 subscribers, valuing each subscriber at over $8,000. In essence, Perlman persuaded Microsoft that it need the WebTV technology to be at the forefront of digital technology, especially as that technology moved to the living room and threatened Microsofts dominance of the PC market.
http://www.microsoft.com/presspass/press/1997/apr97/webtvpr.mspx 24 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Sound familiar?
ITS ALL ABOUT THE EXIT

I dont believe that OnLive is really a consumer proposition. Oh, it will launch, and it will get a few tens of thousands of subscribers. But that is not its purpose. Both Sony and Microsoft (and to a lesser extent, Nintendo) know that the future of gaming is online. Retail boxes will disappear and the vast majority of gaming content will be streamed or downloaded over the Web. Now just imagine if the OnLive technology lived up to its promises; if games could be downloaded and played instantly on a console; and if the breakthroughs are protected by patents. And then ask yourself: which next console would you buy? The one that offered instantly-available high-quality content delivered to an inexpensive set-top box for one low monthly subscription. Or the expensive one that didnt. Microsoft and Sony, its time to get your cheque books out. Let the bidding commence.
DOES GAIKAI HERALD INFRASTRUCTURE? 9

July 10, 2009 | Nicholas Lovell
ANOTHER
CHANGE
TO
INTERNET
Gaikai claims to offer near-instantaneous gameplay of high-end games on low-end consumer hardware. Is this trend going to spell the end of the Content Delivery Networks? In the early days of the Internet, bandwidth was limited. As web pages changed from being primarily text-based to carrying images and other media files, load times increased until the user experience became unbearably bad. The solution for many was to provide local servers close to all the major population centres. Companies such as Akamai mirrored popular sites which reduced the delay in asking for lots of separate files (images, text, ads and so on.) Recently, however, the trend has been for bandwidth-hungry websites to need to send one big file, not lots of little ones. If you are streaming a video or downloading a game, you only need one file, but you want it to come down the fattest pipe you can find. Enter the Content Delivery Networks (CDNs). CDNs, such as Limelight Networks, have a small number of data centres but these are wired up with some of the fattest pipes in the Internet today. It may take a long time (in Internet latency terms) for the request to stream Shrek 2 to reach their data centre, but once the file starts coming down, its blisteringly fast. But Gaikai suggests that they need to reverse the trend towards centralisation and have more points of presence. Perry told Eurogamer:
http://www.gamesbrief.com/2009/07/does-gaikai-herald-another-change-ininternet-infrastructure/ 27 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
OnLive says itll have five datacenters Our strategy is to go much, much more dense than that, Were going to be 10 constantly adding data centres. So if Gaikai (and services like it) take off, the priority will not be to have vast data centres in the Nevada desert. It will be to have small server-farms located near population centres. Its like 2000 all over again.
10
http://www.eurogamer.net/articles/gaikai-cloud-computing-gameplay-thatworks-blog-entry?page=2 28 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
THERE HAS NEVER BEEN A BETTER TIME TO BE A DEVELOPER

July 17, 2009 | Nicholas Lovell Welcome to the second Golden Age of games development. And, wow, is it better than the first one. The first Golden Age of video games started with the first home video game systems and ended in 1983 in a wave of over-expansion, hubris and the rumoured burial of millions of copies of E.T for the Atari 2600. Why was it a Golden Age? It depends on whom you ask. For game creators, it was an era of extraordinary opportunity. New devices allowed new types or artistic expression. A generation of designers were just making art; they were making up the rules of the form itself, because no-one had been there before them. It was a heady, febrile time for developers. For people who think business innovation is as exciting as content innovation and Im one of them - the Golden Age was even more exciting. Disruptive technologies bring vast opportunities to create brand new companies, business and revenues. Most of the companies that we revere today have their roots in the Golden Age.
THE DAWN OF THE PUBLISHER AGE

The Golden Age eventually came to an end. It was destroyed not by the publisher but by a fundamental truth of twentieth century media: it was expensive to distribute content. Its not expensive to create content. Really, it isnt. How much does it cost to create a best-selling album? A novel? Even a great game (World of Goo cost $120,000; Braid cost $180,000)? Across all media industries, the content creators are not the key cost. Distribution is. At an average newspaper, the editorial cost is less than 15% of total costs. An author will generally get a royalty of less than 10% of the cover price of her 29 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
novel. The most successful game of 2009, Modern Warfare 2, cost $50 million to develop but $200 million to manufacture, market and distribute. And thats not including Activisions corporate overhead. Publishing in a physical world is a very challenging activity. The moment that you press the button on the release of a AAA game (or a book, or a movie), you are totally committed. That entire development budget is spent. Its sunk. You now have to spend a huge sum on manufacturing and distribution to get that game into stores across the planet. Having invested all of that money into a game, it would be terrible if consumers didnt buy it simply because they didnt know about it. So sensible publishers double down by investing a multiple of the development budget into marketing. And as budgets go up for both development and marketing, few companies can afford even to participate in this game. The Publisher Age saw the end of the small independent game creator overseeing everything from the idea to the box in a consumers hand. The economics didnt stack up. And so, as the twenty-first century dawned, it looked as if the Publisher Age would be upon us forever. Luckily, the world changed.
BLOOD-SUCKING LEECHES
Publisher-bashing is an easy option. Its also deeply unfair. In the era of physical distribution, publishers deserved to make most of the money. It is hard to arrange for all of yesterdays news to be written, subbed, laid-out, printed and distributed to every newsagent in an island of over 60 million people by six in the morning. Its so hard, in fact, that only a limited number of companies could make any profits at all trying to do it. Its not so hard to deliver that news online. Instantly. Its hard to manage a transmission network of broadcast towers and repeaters to deliver television coverage to an entire nation. 30 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Its not so difficult to upload content to YouTube. It used to be hard to get a game into a consumers hand. You had to manufacture it. You had to distribute it. You had to persuade GAME and their equivalents in every country in the world to stock it and promote it. Distribution used to be very hard and very expensive. It was so difficult, and so risky, that publishers could, and did, take 80% of the revenue - and more of the profits - on the games they financed, marketed and distributed. And you know what, Im not sure that was unfair. They did something that was difficult. Something that no developer could do for themselves. They added value. Those days are changing. Publishers were not blood-sucking leeches when they did something special. Its just that with the arrival of the Internet, what used to be very difficult is now much, much easier.
REACHING A GLOBAL FOOTPRINT

The Internet has made reaching a global audience possible for anyone. A developer can have a global footprint overnight via XBLA, PSN, Steam, iPhone, Facebook, its own website and a bunch of other routes. But just because you can reach an audience, doesnt mean that its easy to do so. Or even that you should try. There are still many occasions when a publisher not only adds value, they are the only sensible way for a developer to bring their game to market, especially if its a AAA title. But the arrival, or perhaps more accurately, the increasing maturity, of the internet has permanently changed the relationship between publishers and developers
OUTSOURCING TO PUBLISHERS
I would like all of you - every person reading this - to take a deep breath and prepare to flip your perspective. Imagine you are looking at an MC Escher painting and where before you only saw black demons, surrounded by empty white space, you are about to see white angels surrounded by black space. Now change your perspective: Publishers dont outsource development to developers; developers outsource publishing to publishers. By flipping the publisher/developer relationship on its head, I hope to help you - the global development community - realise that you have a choice. You can choose who should fulfil the key roles of the publisher: sales, marketing, distribution, and finance. They can be done by you or by the publisher. They can be outsourced to agencies, contractors or freelancers. They can be performed by a platform holder like Sony, Microsoft or Apple. But they have to be done. All developers need to understand these core commercial functions in order to run a successful business - even one that doesnt self-publish. If you are going to self-publish, its absolutely critical that you understand them. After all, you wouldnt outsource your asset creation or motion capture without a pretty good understanding not only of what was involved, but what you wanted to get back.
HOW TO PUBLISH A GAME

Over the next couple of issues, and more frequently on developmag.com, I will be giving you a crash course into the four key elements of publishing a game successfully. My focus will be on digital distribution, building a long-term community and increasing your profits. 32 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
In short, Im going to help you to take back control. There has never been a better time to be a game developer. Now go, make games, and come back next month to find out more. *** This article originally appeared in Develop magazine, and is part of a series of articles on the new world of self-publishing. You can read the full set in GAMESbrief unplugged Volume 3: On social, mobile and self-publishing.
COGNITIVE SURPLUS RECLAIMING THE ENERGY LOCKED IN THE SITCOM.

24 July 2009 | Nicholas Lovell Ive been reading Clay Shirky , a futurologist who spends his time thinking about what fundamental changes the Internet is going to make to our society. And he has come up with the idea of Cognitive Surplus. His argument goes thus: Whenever there is a major shift in society (the Industrial Revolution where millions of agricultural workers migrated to city slums; the post-war affluence that saw millions of people with 9-5 jobs having masses of free-time to fill), there is a dislocation. No one knows how to respond to this massive shift in lifestyle. So they turn to something to fill that void. In the eighteenth century, it was gin, as Hogarth so memorably portrayed in his 1751 print Gin Alley. In the twentieth century, it was the sitcom. The biggest sink, the most humongous absorber of human time that was ever created. The purpose was to stop society from overheating. Millions of people suddenly having to manage their own free time, who knows what they would get up to in that time, and television emerged to fill that void. And boy, did it succeed. Shirky estimates that in the US, American consumers watch 200 billion hours of TV every year. 200,000,000,000 hours. And before you get too smug about American couch potatoes, NOP reckons that while the average American watches 19 hours of television a week, the average Briton watched 18 hours. So were almost as bad. Shirky then starts to think about the way in which the Internet is changing how consumers interact with their entertainment and information sources. He alights on Wikipedia as an example, a wholly user-created resource which has emerged from nowhere in only a few years to be the primary repository of
11 11
www.shirky.com 34 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
knowledge for many people. He estimates that Wikipedia has taken 100 million person hours to make. Which sounds like a lot. But looked at another way, Americans alone could build 2,000 Wikipedias a year if they stopped watching TV. They could build the whole of Wikipedia in a single weekend. In the ad breaks. I dont think that anyone is arguing that consumers are going to give up a TV entirely, but even a shift of 1% in usage patterns is a massive resource. This is the Cognitive Surplus. A great, unharnessed, untapped resource. And the games industry is already harnessing it. World of Warcraft, for example, is simply a world in which the players make the stories. They are shifting from consumers to creators, and Blizzards real role is to give them a sandbox and a range of nudges in the direction of compelling, entertaining gameplay. Much of what the cognitive surplus creates will, inevitably, be rubbish. A gazillion low-quality YouTube videos, pointless captions on LOLcats, yet another Vampire game on Facebook. But in the games industry, where we have a thirty-year history of giving people the tools to tell stories in their own head, this cognitive surplus could be a very big deal. Im not for a moment suggesting that professional game developers are an endangered breed who are at risk from a grassroots revolution of couch potatoes turned games gurus. Quite the reverse: high quality content, environments and stories will still be absolutely critical. But I am suggesting that companies who offer ways to get people involved, whether as participants in an evolving massively-multiplayer story, as voters for 35 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
the top games on Kongregate or by sharing, rating and deriding performances on My Singstar Online, will have access to a free, vast, enthusiastic, (did I mention free?) resource. And they will clean up. *** This opinion piece originally appeared in MCV in 2008.
TWO REASONS FACEBOOK IS ABOUT TO BECOME BIGGER THAN GOOGLE 12

October 5, 2009 | Nicholas Lovell Facebook is on the cusp of becoming the dominant company on the Internet. The company has realised that the web is about so much more than just searchable information, and it is on track to beat Google to be the web company. When Microsoft invested in Facebook at a valuation of $15 billion in October 13 2007 , many people scoffed. (I confess I was one of them). But we were wrong. Facebook is just about to crack two elements that will give it unrivalled power across the Internet.
FACEBOOK CONNECT
The first is Facebook Connect. If you want to comment on this blog, you can sign in via Facebook Connect. Facebook Connect takes your connections with all of your friends away from the closed environment of www.facebook.com and out into the worldwide web. You can play games on your iPhone against Facebook friends. Before long, youll be able to log-in to the majority of websites through Facebook Connect, rather than having to register individually for each one. WHATS IN IT FOR THE WEBSITES? Websites will soon start falling over themselves to implement FB Connect. It reduces the friction that stops visitors from registering. It makes a users interaction with that website appear in the users Facebook stream, which is
12
http://www.gamesbrief.com/2009/10/two-reasons-why-facebook-is-aboutto-become-bigger-than-google/ 13 http://news.cnet.com/8301-13577_3-10286111-36.html 37 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
both a vote of approval and a viral marketing tool. And, pretty soon, users will just expect it. WHATS IN IT FOR USERS? A single login, that you can take with you across the web. Add a comment to a news story and your real friends will see it, and perhaps start a conversation with you, instead of the anonymous trolls who currently inhabit forums. It will be the first step towards the socialization of the Internet and it will be a huge improvement.
FACEBOOK PAYMENTS
But the real weapon for Facebook is payments. It is an open secret that Facebook is building a payments system, and they are clearly working on making sure that they get it right. I cant overstate how important I think payments will be. The first thing it will do is make a lot of money for Facebook. Companies like Zynga and Playfish are making tens, maybe hundreds, of millions of dollars from selling virtual goods on Facebook, and Facebook is getting no direct revenue from that. Yet Zynga and Playfish have to work with many different partners to generate their revenue. When Facebook offers a simple, easy-to-use, standardised payment system, it will make billing much easier and drive usage. But thats only the first part of the story. Let me walk you through a scenario: You buy me a beer. I dont buy you one back so I want to give you a fiver (I live in London. Beers expensive). Under your profile picture will be an option: Send money. I can transfer 5 to you in seconds, with no need for sort codes and account numbers, and Im sure its you, because were friends on Facebook. Now lets imagine that youve never used this modern Facebook payments system. You dont really like it. But now, youve got 5 in it. You could spend 38 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
that money on virtual goods. Before long, Ill bet you could spend it at Amazon or any number of other online retailers. Or you could give Facebook your bank account details and ask them to deposit the 5. And at the same time, theyll ask if it would be OK to take money out of your account in the future if you want to buy something using your Facebook credentials. And Facebook becomes a payment system more global than Western Union, more ubiquitous than PayPal and as trusted as MasterCard and Visa.
YOUR SOCIAL GRAPH AND YOUR BANK ACCOUNT, FOLLOWING YOU ACROSS THE WEB
With these two elements, Facebook has blown Google out of the water. Google helps you find stuff on the web. But with Facebook, wherever you go on the web, your friends and your wallet will come with you. Microtransactions on every site becomes realistic. (Maybe, just maybe, this will allow Rupert Murdochs idea of charging a penny to read a single article on his sites come true). And Facebooks valuation of $15 billion begins to look like it might have been a bargain.
TEN REASONS MICROTRANSACTIONS SUBSCRIPTIONS 14

October 8, 2009 | Nicholas Lovell
ARE
BETTER
THAN
As a developer, making money from games has never been more important. Youre considering (or have already started) making games that you publish yourself. But youre torn between whether you can make more money from subscriptions or from microtransactions (principally the sale of virtual goods). Here are ten reasons to tell you its a no-brainer.
1. MICROTRANSACTIONS ARE USER-LED, NOT DEVELOPER-LED

With microtransactions, the user decides how much they want to pay, and when. You dont have to fret over whether your game is worth 3.95 or 14.95 per month. The user will pay what suits them.
2. THERE IS NO GATE
With subscriptions, you let the user play your game for, perhaps, 30 days. And then you say, abruptly, pay up or git orff my land. Not friendly and not smart. The biggest challenge for a game company is acquiring a customer; you had one but you just kicked them out. That customer aint never coming back.
3. PLAYERS CAN SPEND WHEN THEY WANT TO

When does a consumer want to pay? When hes just been paid? When shes just had a hard day at work? On a Monday (because money at the end of the week is reserved for partying)? More importantly, why should you determine the day that they have to spend? With microtransactions, a user can spend the day after theyve got paid, or
14
http://www.gamesbrief.com/2009/10/ten-reasons-microtransactions-arebetter-than-subscriptions/ 40 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
when they know they havent got a hot (and expensive) date for a week or two, or whatever. Let the user be in control.
4. PLAYERS CAN SPEND AS MUCH AS THEY WANT TO

Bigpoint has some players who spend over $1,000 per month on virtual items. Others, Im sure, spend only a dollar or so. But the key point is that for those players who have lots of money have the opportunity to spend it. With subscriptions, users have a binary choice: zero or, say, $4.99. Theres nothing in between and, more importantly, nothing higher. Imagine how much money you are leaving on the table from your biggest fans.
5. MICROTRANSACTIONS MAKE IT EASY TO KEEP THE GAME FRESH

With micro-transactions, its easy to think of how to refresh the game: add new items. It provides an easy path for development.
6. MICROTRANSACTIONS ARE TRACKABLE

The curse of development is not knowing what users like: its why Lionhead spent so much money on a pointlessly overspecced movie maker within The Movies instead of focusing on the strong and entertaining sim game it came bundled with. With microtransactions, that goes away. You can see what users like because they spend money on it. And then you can adapt the game to make your players happy.
7. MICROTRANSACTIONS ARE FLEXIBLE
Some players like wearable items. Some like power-ups. With microtransactions, you can offer different items for different customers, and 15 endlessly test what works.
8. MICROTRANSACTIONS OFFER A/B TESTING OPPORTUNITIES

Does a pink coat sell better than a blue coat? Do players want bigger swords or better armour? Do players want swords that look good, or do they want swords that are more effective? With A/B testing (nothing more complex than randomly offering half your users one item and half another and tracking conversion rates), you can fine-tune your sales to give better monetization.
9. CONSUMERS HAVE A LIMIT TO THE NUMBER SUBSCRIPTIONS THEY ARE COMFORTABLE PAYING.
OF
Your average human has a short term memory for seven items. Sony has said that most consumers are happy paying for about seven subscriptions. There is a link. A list of more than seven items (actually between five and nine depending on the person) seems endless. Thats because as one item drops out of your shortterm memory, another one drops in. (Thats why to-do lists can make you feel more in control youre removing the tyranny of your short-term memory and can see everything that you need to do). Utilities like water and electricity dont seem to count, but a subscription to Sky does. As does the gym, magazine subs and your subscription to Warcraft. (Mobile phone contracts used to count, but increasingly its seen as a utility for many people).
15
See Free to play gamers will pay for power-ups and self-expression, but not for new content in Volume 2 to see what gamers pay for. 42 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Its easy to see why people wont sign up to a new subscription if they are already feeling oversubscribed. In essence, you need to encourage them to drop another sub to let yours in. Are you really so confident in the power of your marketing that you believe that someone will give up their gym membership in order to play your game?
10. MICROTRANSACTIONS MAKE MORE MONEY

Given the existence of World of Warcraft, this is obviously contentious, since Blizzard is making over a billion dollars a year from WoW. Perhaps it is better to say that for a number of successful games companies, microtransactions have convincingly shown an ability to monetize well. By reducing the barriers to entry, theyve also enabled companies to make higher revenues with lower marketing costs than for subscriptions. And, in many ways, its lower risk, since you have a powerful marketing channel (your free game) with a route to monetization (your microtransactions.)
11. BONUS REASON: CONSUMERS ARE COMING TO EXPECT IT

This hasnt happened yet, but as more and more games go free to play, consumers will expect that. By going down the 30-day trial then subscribe or youre out route, youre alienating customers who have many other choices to satisfy their game playing habits.
WHY ITS TIME TO STO P WONDERING WHERE SHOULD WE GO FROM HERE? 16

April 14, 2010 | Nicholas Lovell Why are startup strategy sessions so myopic? I spend a lot of time with companies thinking about the long-term strategy. And in every case, they start with the wrong question. They ask Where should we go from here? I always answer: I dont know. Why? Because I dont know where you want to go. Its like youve invited me into your car and weve driven to the end of the road and you turn to me and say Which way? You dont get to Manchester from London by picking the most promising direction at every junction. You have a plan. So dont ask Where should we go from here? Ask Where do we want to be in three years time? I think youll find planning becomes much easier when you have a destination.
16
http://www.gamesbrief.com/2010/04/why-its-time-to-stop-wonderingwhere-should-we-go-from-here/ 44 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
GAME OVER, BRITAIN 17

April 20, 2010 | Nicholas Lovell The news last week that Indian company Reliance had purchased a 50% stake 18 in Codemasters got me thinking. My conclusion: Britain no longer matters for games publishing.
AND THEN THERE WERE NONE

Once upon a time, Britain was a global leader. Ultimate Play the Game, Ocean, Psygnosis, Gremlin, Virgin Interactive, Eidos, Codemasters these were global publishers releasing global franchises with British shareholders and generating British profits. One by one, they were gone: Ultimate turned into Rare and was bought by Microsoft in 2002 for $377 million Ocean bought by Infogrames for 100 million in 1998 Psygnosis bought by Sony in 1993 Gremlin bought by Infogrames in 1999 for 21 million Virgin Interactive split up: EA bought Westwood Studios in 1998; Titus Interactive bought the rest in 1999. Eidos bought by Square Enix in 2009 for 84.3 million Codemasters now owned by Balderton and Reliance
BUT WHAT ABOUT NEW PUBLISHERS?

We live in the era of self-publishing. Arent the big new companies, active in online and Facebook games, going to be our salvation?
17 18
http://www.gamesbrief.com/2010/04/game-over-britain/ http://www.develop-online.net/news/34372/Indian-games-giant-takesstake-in-Codemasters 45 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Well, the big one was Playfish. And that was bought by Electronic Arts last year 19 for between $300 and $400 million. Jagex? Runescape is a great game, but the company has yet to prove that it can launch more than one game successfully, especially after the MechScape 20 debacle. Mind Candy? As above. Moshi Monsters is a great product, but the company is not a publisher, bringing multiple games to market (and ideally for the purposes of this definition other peoples games.)
DOES THE DEATH OF BRITISH PUBLISHING MATTER?

From one perspective, it doesnt. Its old thinking. We are all publishers now. I 21 publish this blog (and an ebook on How to Publish a Game) . You publish games youve developed, or are thinking about it. There is no place for giant, monolithic publishers. And yet. Publishers give coherence to a creative business. They give new entrants hope. They provide a strong voice in government, in academia, in driving the future of our industry. I dont bemoan the death of old publishers. They are monolithic dinosaurs, proponents of the Digital Economy Act and supporters of anything no matter how futile to prop up their dying business model. But I do worry about the absence of global British success stories. I had high hopes for Playfish, but EA snapped them up before they really got going.
19
See Why EAs acquisition of Playfish was a steal at $250 million in Volume 3 or http://www.gamesbrief.com/2009/11/why-eas-acquisition-of-playfish-isstill-a-steal-at-400-million/ 20 http://www.gamesbrief.com/2009/10/mechscape-cancellation-costs-jagextens-of-millions/ 21 See www.gamesbrief.com/store/buy 46 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
So my clarion call is this: Buck up, Britain. We need more, stronger, global games publishers. We need companies that are worth billions, not snapped up for tens or hundreds of millions. Above all, we need the ambition to build global champions. So, whos with me?
STOP GIVING YOUR WORST PERFORMERS 80% OF YOUR TIME 22

July 5, 2010 | Nicholas Lovell Why does the games industry spend so much time at conferences talking about the technology and not about the people? We spend so much time saying that we are a talent-led industry, but so little time talking about how to get the best out of that talent. Darren Jobling of Eutechnyx just changed that. At the GameHorizon Conference, he told developers to change the way they relate to their talent.
1. GET YOUR BEST PEOPLE TO DO RECRUITING

You know the rule in dating a 3/10 guy will chase a 3/10 girl (unless he has lots of money to improve his apparent rating). The same is true in recruitment. If you get your weak team members to do the recruiting, theyll recruit people like themselves. As Darren says to a 4/10 person, a 9/10 person is pretty scary. So get your 9/10 people to recruit. You might think you cant afford them to spend their time on recruitment, but can you really afford to have any more 4/10 team members
2. GIVE 80% OF YOUR TIME TO YOUR BEST PEOPLE, NOT YOUR WORST
Your worst people take up most of your time. You spend time on disciplinary action or pep-talks or management. You leave the best people to get on with it, because you can. But what if you spent more time with them? What if you decided to schedule time with your best people and delegate the time with your worst.
22
http://www.gamesbrief.com/2010/07/stop-giving-your-worst-performers80-of-your-time/ 48 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Spending time with your best people is energising and invigorating for all involved. Make sure you do it often.
3. HIRE PEOPLE WHO ARE UNTRAINABLE

There are some things that cant be learned. Look for these in interview. These are probably more important than skills that can be trained: Talent Energy If you want something done, ask a busy person Drive set a goal and achieve it Attitude Negative people are disastrous in teams. You can spot them by asking them about their previous employer Integrity
The key to Darrens talk is that your staff is your greatest asset. Talk to them (especially about new games platforms you may find they know more than you do) and, a bove all, make sure that you are getting the best out of your best.
MY TAKE ON BLIZZARDS REALID CAMPAIGN: WORLD OF WARCRAFT GAMERS, PLEASE JUST GROW UP 23
July 9, 2010 | Nicholas Lovell The announcement that Blizzard was about to force its gamers not to be anonymous kicked up a (can I say shitstorm? Yes? Yes.) well, a shitstorm. The BBC calls it a row. CNET calls it a controversy. TechCrunch ran a post 26 entitled When privacy meets hypocrisy: Blizzard Real ID edition. Isnt it time we all grew up? This move is long overdue. The days when it made sense for the Internet to be anonymous are over. A lot of mileage has been made of the battle (and Im hugely disappointed 27 about that Blizzard has now backed down from implementing RealID). Heres what went wrong. Blizzard announced the policy and a whole bunch of childish, Internet trolls hid behind anonymity and pretended it was terrible. A forum moderator who rejoices in the unusual (and highly Googleable) name of Micah Whipple said he was happy to use his real name, and within minutes people had Googled his name and discovered all sorts of personal details on the web. And who were these people who released personal details on the web: cowards hiding behind anonymous names.
24 25
23
http://www.gamesbrief.com/2010/07/world-of-warcraft-gamers-please-justgrow-up/ 24 http://news.bbc.co.uk/1/hi/technology/10543100.stm 25 http://news.cnet.com/8301-17938_105-20010022-1.html 26 http://www.crunchgear.com/2010/07/08/when-privacy-meets-hypocrisyblizzard-real-id-edition/ 27 http://www.gamasutra.com/view/news/29368/Blizzard_Retracts_Real_ID_Fo rum_Policy_Amid_Uproar.php 50 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Dont they get it? This is what Blizzard was trying to stop. The only reason these overgrown d could behave petulantly is because Micah Whipple outed himself before everyone else was outed. So they could bully him with privacy issues while hiding behind anonymity. Take away the anonymity and the stalker can be stalked, the bully bullied, the troll well actually, if you have sense, the troll will just be ignored. But to do this, you have to take away *everyones* anonymity, not just some peoples. And thats where this got out of hand. To be fair, I dont blame Blizzard for backing down given the shitstorm. Its important to listen to your customers, and lots of customers hated RealID. But for me the Micah Whipple example doesnt say anonymity is good. It says quite the reverse. Anonymity is bad, and partial anonymity is the worst of all. Rob Fahey argues the opposite: that anonymity helps those who need to explore their identities in a safe environment (or just not get hit on all the time) 28 by being anonymous. I sort of get that, but think that the downsides outweigh the benefits. So I was hugely excited by Blizzards huge steps to end the anonymity of the Internet, and am deeply disappointed by their retraction. But what do you think? Is anonymity a good thing for the Internet, or do you believe, as I do, that the faster our real identities are the same online and in the real world, the better the Web will be?
28
http://www.gamesindustry.biz/articles/community-chest-editorial (registration required) 51 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
IF VIDEO GAMES CAUSE VIOLENCE, THERE SHOULD BE A CORRELATION BETWEEN GAME SALES AND VIOLENT CRIME, RIGHT? 29
August 6, 2010 | Nicholas Lovell Critics around the world equate video games with crime and the causes of 30 crime. They routinely blame games for being murder simulators or for 31 32 desensitizing our children to violence. If that was true, it would be a very bad thing. Especially as since 1990s, games have seen explosive growth. Research from the Entertainment Software Association in the US shows that 67% of all American households have games, 33 and 40% of all gamers are women. The UK trade body ELSPA (now rebranded as UKIE) says 32% of the entire British population classify themselves as 34 gamers. Are we building up an army of killers? I dont think so Lets look at the numbers. Screen Digest has very kindly provided me with North American software sales since 1990. It shows amazing growth from $2.3 billion in 1990 to $12.9 billion in 2008. Thats 461% growth, or a compound annual growth rate (CAGR) of 10%. If video games cause violence, youd at least expect *some* growth in violent crime wouldnt you?
29
http://www.gamesbrief.com/2010/08/if-video-games-cause-violence-thereshould-be-a-correlation-between-game-sales-and-violent-crime-right/ 30 http://en.wikipedia.org/wiki/Dave_Grossman_(author) 31 http://www.gamasutra.com/view/news/28394/Senator_Leland_Yee_Games_ May_Be_Artful_But_Children_Are_Too_Vulnerable.php 32 For the record, I fully support all efforts to create legally-enforceable age ratings for games. 33 http://www.theesa.com/facts/gameplayer.asp 34 http://www.ukie.info/node/200 52 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Figure 1: Correlation between video game sales and violent crime
Well that not what the chart above shows. Ive plotted the Screen Digest numbers in blue on the right hand axis. On the left are the FBIs official violent 35 crime statistics for the US from 1990 to 2008. Violent crime in the US has fallen by a quarter during this period, a CAGR of -2%. I know (unlike many journalists) that correlation does not equal causation. But if games were corrupting our youth (and adults) into violence, and we have just witnessed a massive explosion in games, you would perhaps expect violent crime to rise when games sales have risen nearly six-fold, not fall by a quarter. Im not saying that there are not some cases where games (like films, books and music) can inspire bad behaviour in impressionable people. But politicians and scaremongers: just look at that chart and tell if you can really believe that games are making our society go to hell in a hand basket. Because thats not what it says to me.
35
http://www.fbi.gov/ucr/cius2008/data/table_01.html 53 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
HOW $4.25M WAS NOT ENOUGH TO SAVE ETERNAL EARTH DEVELOPER SPARKPLAY 36
August 9, 2010 | Nicholas Lovell In an emotional company blog post yesterday, CEO Matt Mihaly announced 37 that Sparkplay has laid off all but two staff and looks likely to go bust. Sparkplay operates Eternal Earth, a free-to-play MMO funded by virtual goods. In February 2008, Sparkplay raised $4.25 million in Series A funding from 38 Redpoint Ventures and Prism Ventureworks. The announcement is obviously terrible news for the company and my heart goes out to founders and staff. Ive been there before, and its not pleasant. But regular readers will know that I am a huge proponent of free-to-play, and seeing a free-to-play games company going bust is something that I would like to look at very carefully, to get the best possible learnings from it. Unfortunately, I dont know anything about the specifics of Sparkplay. (Ill repeat that: everything that follows is WILD SPECULATION). Id love to get some validation from Matt one day. But in the meantime, here are some thoughts that occurred to me.
1. COSTS WERE HIGHER THAN REVENUES

This seems like a pretty likely assumption, given that the company was running out of money. There are many ways that could have happened but here are the two biggies:
36
http://www.gamesbrief.com/2010/08/how-4-25-m-was-not-enough-to-saveeternal-earth-developer-sparkplay/ 37 http://www.eartheternal.com/news/Announcements/some-bad-news 38 http://www.gamesindustry.biz/articles/earth-eternal-dev-secures-425million-funding (registration required) 54 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
CPA > LTV: I teach masterclasses on making money from social games, 39 and this is one of the very few equations I use. In essence, if it costs you more to acquire a customer than the lifetime value of a customer, you will never be profitable. Development / maintenance costs were too high: CPA is a marginal cost. But if the underlying costs of operating a game are too high, then you need a *lot* of users to pay for them. And in an environment where customer acquisition is getting ever more expensive, it can be tough to breakeven.
I think all developers need to focus on these three elements CPA, LTV and ongoing development cost closely to ensure they are on a route to profitability.
2. KILL GAMES THAT ARE UNDERPERFORMING

The success of companies like Zynga is that they launch games cheaply, see if they resonate at scale and then throw money at them. (Note: all things are relative: Zynga probably spends several million dollars on development and marketing at launch these days). But they are also prepared to kill games that dont cut the mustard. Just last week, they shut down Street Racing, which had over 400,000 Monthly Active Users (MAUs). I argued over at Develop that Zyngas decision to shut down 40 Street Racing was entirely rational for a company with much bigger fish to fry. Sparkplay only had one title. If it began to falter, they didnt have other titles to fall back on. This could be a problem in the long run for any company that has only one major title (like Jagex, Mind Candy, Ankama etc). It makes adapt or die much harder when there is only one title that you can adapt.
39 40
http://www.gamesbrief.com/masterclasses/ See Why Zynga is killing off Street Racing in Volume 3 or http://www.develop-online.net/blog/127/Why-is-Zynga-killing-off-StreetRacing 55 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
3. BEWARE FIXED COSTS

Eternal Earth saw falling traffic (at least according to Alexa, which I acknowledge is a deeply flawed tool).
Figure 2: Alexa ranking for Earth Eternal
One obvious interpretation is that Sparkplay scaled down its customer acquisition activity when it became clear that it was running low of money. That could explain the sustained dip in May. More importantly, a games service has a relatively high proportion of fixed costs (with the exception of customer acquisition costs, which are variable). Once the number of users falls below a breakeven threshold for paying for coders, artists, sysadmins and so on, a games company starts becoming lossmaking pretty quickly. That Alexa chart, showing that the company lost 50-75% of its users through the last six months could also explain the financial difficulties. Of course, without more insight into the exact situation of the company, I cant determine the exact causes of this decline. 56 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
4. BE WARY OF INVESTORS
Sparkplay raised $4.25 million in Series A funding. Thats a hell of a lot for a consumer Internet business. In a fabulous post, Dave McClure argues that the costs of launching a consumer internet business are lower than they have ever 41 been. $5 million is the top end of what he thinks people need. Ive warned before about the dangers of taking too much money too early. You can staff up before you have got your business model tested in a cheap, startup environment. All of a sudden you need to deliver what it takes to make a VC happy. It can be difficult to pivot in those circumstances. I even entitled my post on the topic: Seed, Series A, Series B: Why the wrong 42 funding can kill your company.
CONCLUSION
I dont know if any of these issues affected Sparkplay. I do know that free-toplay MMOs are cheaper to launch and easier to pivot than traditional games. On the other hand, it is a competitive market, switching costs are low and CPA is rising fast. There are lessons to be learned from Sparkplays demise. I just wish I knew more to be certain *which* lessons were the key ones.
41 42
http://500hats.typepad.com/500blogs/2010/07/moneyball-for-startups.html See Seed, Series A, Series B: Why the wrong funding can kill your company in Volume 2 or http://www.gamesbrief.com/2010/03/seed-series-a-series-b-whythe-wrong-funding-can-kill-your-company/ 57 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
WHY THE MASS MARKET WILL NEVER BE GAMERS 43

August 31, 2010 | Nicholas Lovell Margaret Robertson pointed me to this article on Scott Pilgrim vs. the World. The article is not about the film, its about the endless carping about the assumed teenage, ADD, geeky males that the film must be targeted at, according to many, many reviewers. The full article is worth a read, but this is the quote that leaped out at me: *I am+ not a gamer. I own a Nintendo Wii, on which I enjoy boxing, tennis, being extremely bad at Super Mario Galaxy, and sometimes even playing Dancing With The Stars (deal with it), in which I have mastered the cha-cha at the professional level. If you are under the impression that this makes me a gamer anywhere except possibly in the sundappled rec rooms of some very rad retirement communities, youre off your nut. The author is a lady named Linda Holmes. This is what she says about herself: Im a woman, Im in my late thirties, I cant handle firstperson shooters, Im afraid of Comic-Con, and I really, really liked Scott Pilgrim vs. The World. Linda IS the mass-market. She plays games. Ive never played Dancing with the Stars, but mastering the professional cha-cha sounds like a commitment to me. I would call her a gamer.
44
43
http://www.gamesbrief.com/2010/08/why-the-mass-market-will-never-begamers/ 44 http://www.npr.org/blogs/monkeysee/2010/08/12/129150813/-scottpilgrim-versus-the-unfortunate-tendency-to-review-the-audience?sc=fb&cc=fp 58 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
But she wont call herself one. When stopped on the street by a market researcher with a clipboard trying to find the elusive mass-market, she wont acknowledge shes a gamer. Im guessing (and only guessing here) thats because Linda thinks that gamers own PS3s and 360s, not Wiis. She thinks gamers play Modern Warfare 2, not Dancing with the Stars. So Linda doesnt classify herself as a gamer. And that makes me think that the casual, mass-market gamer will *never* classify themselves as a gamer. In the same way that I watch movies but wouldnt call myself a film buff. In short, the mass market will never be gamers. But they will all play games.
THE END OF THE GAME DEVELOPER 45

September 20, 2010 | Nicholas Lovell Im calling it today. The end of the game developer. Its an anachronistic term, and Im going to try to stop using it. (Im bound to fail I spent ten years trying to teach anyone who would listen the difference between a developer and a publisher. It used to annoy me so much when investors called Argonaut a publisher or Eidos a games developer.) But those days are gone. Its time to end the distinction. From now on, were all game-makers. All of us. The business types and the creatives. The coders and the artists. The community managers and the business development executives. Were involved in this great endeavour we call making games. I made an impassioned plea for an ending to the fighting, rivalry and distrust between management and developers in response to Jimmy Mulvilles lecture 46 at the Edinburgh TV festival. Luke Halliwell has laid at least some of the blame 47 for RealTime Worlds failure at the door of a silo mentality. And Ive lost track of how many coders pretend that business doesnt matter, or managers that pretend the game artistry and craftsmanship doesnt matter.
45 46
http://www.gamesbrief.com/2010/09/the-end-of-the-game-developer/ See Why creative and business types must mix in Volume 2 or http://www.gamesbrief.com/2010/08/why-creatives-and-business-types-mustmix/ 47 See Lukes comments in Volume 2 or at http://lukehalliwell.wordpress.com/2010/09/15/where-realtime-worlds-wentwrong/ 60 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Sometimes words matter. The names we use and call ourselves. So Im going to try to stop talking about publishers and developers, and talk about game makers instead. Am I mad? (Is there a better term? Im not sure game-maker is the best, but its all I can come up with right now.)
I THINK I WAS WRONG ABOUT THE IPAD 48

October 7, 2010 | Nicholas Lovell Nic Brisbourne over at The Equity Kicker just blogged that the iPad has had the 49 fastest adoption rate of any consumer electronics ever. He said: It took just 80 days to sell 3 million iPads It is currently selling 4.5 million units per quarter That compares with 1 million iPhones in its first quarter and 350,000 DVDs in its first year
But more than that, I think Im wrong because I want one. I was looking at my RSS feeds the other day. Its unsatisfying on a computer (too uncomfortable, too many other things you could be doing). Its unsatisfying on my phone (too small). I thought to myself What I really need is a touch screen device that is easy to use, can show me all of these feeds and thats bigger than my phone. If only someone made such a thing OK, so I havent bought an iPad yet. (My anti-Apple stance will take longer to crack, plus theres that 469 price tag). But for about the first time ever, I think I might buy an Apple product. And if Apple can convert me, I reckon they can convert anyone.
48 49
http://www.gamesbrief.com/2010/10/i-think-i-was-wrong-about-the-ipad/ http://www.theequitykicker.com/2010/10/05/ipads-the-incredible-pace-ofchange-and-tablet-opportunities 62 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
EA LOUSE, YOU ARE NO EA SPOUSE. YOUR PETTINESS IS SHOCKING 50

October 13, 2010 | Nicholas Lovell Yesterday, a number of media outlets reported on the blog post by an 51 anonymous soon-to-be-former employee at EA Mythic called EA Louse. EA Louse attempts to take the moral high ground. His (and I assume its a man) rant begins: I would think myself to be part of some noble cause, like the original EA Spouse trying to save her husband from a 52 hellish work environment at EA. Fat chance. Why? Because EA Spouse was fighting for a noble cause. EA Spouse issued a cri de coeur that difficult working practices were breaking up relationships, families 53 and marriages. If you dont believe me, go and read it. It is an eloquent, carefully explained, rational and heart wrenching plea for a company (and an industry) that is highly profitable to stop treating employees like serfs, to understand the toll that insane crunch rules are taking on real people and their families and to ask for change. EA Louses piece comes across as the I want, I want ramblings of a spoiled, self-indulgent brat. EA Spouse was dignified; EA Louse is petty, mean-spirited and vindictive.
50
http://www.gamesbrief.com/2010/10/ea-louse-you-are-no-ea-spouse-yourpettiness-is-shocking/ 51 See, for example, http://www.develop-online.net/news/36094/Now-EALouse-speaks-out 52 http://ealouse.wordpress.com/2010/10/12/hello-world/ 53 http://ea-spouse.livejournal.com/274.html 63 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
David Jaffes response was typically forthright: What the fuck is it about making games where it brings out the worst, most immature, most obnoxious sides of certain 54 types of people on a team? I agree wholeheartedly. It doesnt have to be this way. There were people who survived the fall of 55 RealTime Worlds (like Luke Halliwell , for example) who wrote thoughtful, 56 insightful posts into their time there, with lessons for all of us. Startups 57 frequently offer no-holds-barred analyses of their failures. In contrast, EA Louses beefs appear to be: I got made redundant. Fair enough. This is a horrible thing to happen to anyone, and I feel terrible for everyone at Mythic whose jobs are on the line. Including EA Louse. He didnt like his bosses. His producer was the saddest excuse for a producer Ive seen. Project managers, studio bosses, marketing people everyone was rubbish at their job. It is a litany of ad hominem attacks. No-one listened to EA Louse: EA Louse and his team would say omg it makes NO sense, but the big bosses made them do it anyway. The game failed, so EA Louse got fired, but the bosses didnt. Maybe fair enough, I dont know.
I have worked with people like EA Louse. People who have no idea of the conflicting pressures of product development, administration, financing,
54
http://criminalcrackdown.blogspot.com/2010/10/my-response-to-ealouse.html 55 Luke blogs at http://lukehalliwell.wordpress.com/ 56 See the entire section dedicated to the fall of RealTime Worlds in Volume 2 or http://www.gamesbrief.com/2010/08/hubris-ambition-andmismanagement-the-first-post-mortem-of-realtime-worlds/ 57 http://www.chubbybrain.com/blog/2010/10/startup-failure-post-mortem/ 64 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
marketing. They have no idea of the big picture. They think they know everything, and that everyone else is a jerk. They are opinionated, ill-qualified know-it-alls who lack humility or understanding. (I appreciate the irony of writing that arrogant, condescending comment about someone Ive never met.) This post doesnt help people avoid the errors of the past (like Lukes RealTime Worlds posts). It doesnt call on EA to change its working practices to save peoples sanity, health and relationships (like EA Spouse). This post doesnt even explain in any coherent way what went wrong at Mythic except the bosses fucked it up. All that I learned from reading it is that EA Louse is a jerk. For the sake of his future employment prospects, I hope that he is never unmasked.
FIVE TIPS ON GAMIFYING YOUR WEBSITE, BEFORE YOU EVEN BEGIN 58

October 12, 2010 | Roy Schmidt This weeks guest post is from Roy Schmidt at Bigdoor , the company that allows anyone to gamify their website. He reckons that before you leap into gamification, you should read these five tips. And I agree. Theres a lot of buzz around gamification recently, and plenty of confusion about what it really means to gamify a site. One thing is clear: Its a lot more than just adding badges to a site. Its about finding the right motivators for your audience and promoting desirable behaviour in an enjoyable way without getting in the way of the core value of your service. So as you start thinking about how to gamify your service, be sure to take a moment to think through the goals of the project rather than just jumping in to a solution that may not be appropriate for you. Here are some things we encourage you to think about when starting a project:
59
1. GET SOME FEEDBACK ON YOUR IDEAS

Its easy to forget to put yourself in the shoes of your users and review your service from their point of view. When it comes to a gamification project, it becomes even more important, especially when you are adding a game layer to an existing service with an established user base. Think about what that transition will be like and plan on addressing questions and negative responses. Try to get direct feedback from your most valuable users and friends who arent afraid to tell you the truth. If appropriate, try to create parallel mechanics that motivate different types of users (some of your users may be
58
http://www.gamesbrief.com/2010/10/five-tips-on-gamifying-your-websitebefore-you-even-begin/ 59 www.bigdoor.com 66 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
motivated by social rewards while others are self-driven by accomplishment only see Bartle for more).
2. FOCUS ON THE KEY ACTIONS

Dont try to boil the ocean right away. You cant create a full World of Warcraft universe around your foodie blog, and your users would hate suddenly being forced into a complex metagame that has nothing to do with restaurant reviews. Identify the key actions you hope to see from your users and find a way to encourage that limited set of actions. If you cant improve results on a few user engagement goals, you will fail miserably trying to implement a huge game layer with tons of complexity. And if you really arent sure, just try with one action. Its a nice baby step to see how users respond and whether or not you are providing the right experience to promote that key behaviour.
3. TAKE THE TIME FOR CONTEXT

Throwing up predefined solutions is a good way to test and iterate, but as you start to see results, you may realize the potential for a custom fit to drive even better returns. If users are presented with a basic badge system, the novelty may work initially but long term success requires a smooth integration authentic to the core experience. If Im visiting your blog about gardening and you reward me with just basic points and random trophies, Ill eventually get annoyed. But if my site participation results in a virtual plant or garden that I can nurture, and my ongoing efforts result in rewards that enhance my experience and promote my blossoming expertise, Im more likely to find a better value in your service.
4. COMMIT TO THE GAME LAYER LIKE A NEW PRODUCT OFFERING

If you think you add some game mechanics to your experience and walk away, then you arent really thinking about your users. Its kind of like expecting users to keep coming back to your news website without updating the homepage content. The users will realize that the game layer is stale at some point unless 67 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
you are proactive about monitoring how it impacts your key user actions and make extensions and enhancements to continue to evolve it for the most involved users. Youre building on the relationship, so be ready to learn from the analytics and adjust and optimize as needed. Be active in support of the tool or it will just become a gimmick.
5. DONT JUMP IMMEDIATELY INTO REDEEMABLE CURRENCIES

If you want to keep things simple and grow as you learn, dont start with a redeemable currency with a promise of vast virtual rewards in exchange. Figuring out the right prices and items takes a lot of planning, so its better to focus on activity and experience points. You can always add the idea of virtual redemption later as you see what it most useful to your users. But if you try to start that way with no clear idea of where it will lead, the whole experience may confuse users and actually might de-motivate their participation. Hopefully this short list will give you some things to consider before you get too far into your gamification effort. Of course there are situations when you should jump into a huge integration where the game layer becomes a core part of the service offering. But weve found that for most, dipping your toes in before diving in headfirst is an effective way to gamify your experience.
WHAT YOU REALLY LEARNED AT SCHOOL

November 26, 2010 | Nicholas Lovell School are churning out the unemployable. Thats the provocative title of Ewan MacIntoshs marvellous blog post about how schools are failing our children, our businesses and hence our entire 60 society. He quotes (were getting a bit nested here), Don Ledinghams summary Alan McCluskey from the Swiss Agency for ICT in education:
61
of
Table 1: The 7 Tacit Lessons Which Schools Teach Children

1. 2. 3. 4. 5. 6. 7. Knowledge is scarce Learning needs a specific place and specific time (lessons in classrooms) Knowledge is best learnt in disconnected little pieces (lessons) To learn you need the help of an approved expert i.e. a teacher To learn you need to follow a path determined by a learning expert (a course of study) You need an expert to assess your progress (a teacher) You can attribute a meaningful numerical value to the value of learning (marks, grades, degrees)
Why am I writing about this in a blog about the business of games? Because we are going through a period of massive change in the games industry and, to quote screenwriter William Goldman: Nobody knows anything
62
60
http://edu.blogs.com/edublogs/2010/11/schools-are-churning-out-theunemployable.html 61 http://edubuzz.org/blogs/donsblog/2006/06/08/utopia/ 69 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
We are all experimenting, playing, creating, exploring and, above all, learning. We are going through a process of learning via doing, of experimenting and failing, of trying and iterating. If we cant do that because we dont know how to learn we are going to get left behind. As Ewan fears our children may be getting left behind. On the one hand, its mad of me to bring this up. I put myself forward as an 63 expert (i.e. the author of How to Publish a Game) , who teaches at specific 64 times and places in disconnected little pieces (i.e. masterclasses ) and I make 65 consulting money because my knowledge is scarce. So why would I tell you that you dont need an expert teacher to learn? The answer is because I believe strongly that what I do is not tell people what to do; I teach people how to learn about social games, or self-publishing or digital distribution. I talk about what is going on and why. I dont have a playbook that clients should follow slavishly. I have a set of frameworks that you can apply to any game, any business, to understand how to make the game more popular, and make more money. In short, I dont teach people answers. I teach them how to learn. Which is why I am so dispirited to learn that schools have stopped doing that.
62
From Adventures in the Screen Trade. If you havent read it, you should. http://amzn.to/fHXK8G 63 Find out more about How to Publish a Game at www.gamesbrief.com/store/buy 64 http://www.gamesbrief.com/masterclasses/ 65 http://www.gamesbrief.com/consultancy/ 70 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
PANOROMA INVESTIGATES GAMES BALANCED, FAIR REPORTING 66

December 6, 2010 | Nicholas Lovell
ADDICTION,
OFFERS
Like many British gamers, I watched Panorama this evening.
67
(For non-Brits, Panorama is an investigative journalism programme on the BBC that revealed last week, for example, that FIFA is riddled with corruption). Gamers across the Twitterverse girded their loins to be outraged, upset and annoyed that the mainstream media was once again maligning their favourite pastime in an ill-considered, ill-researched attack. Only Panorama didnt (although that didnt stop a kneejerk reaction from gamers). The biggest reason Panorama failed as television was because it was so balanced. It looked for evidence that we have a games addiction problem, and failed to find it. Reporter Rafael Rowe talks to some disturbed teenagers and young adults who became addicted to games. He talks to some parents who struggled with their parenting skills. (One Korean woman said about her Warcraft-addicted son with whom she was attending an addiction clinic: I used to hit him a lot, now we spend time together
66
http://www.gamesbrief.com/2010/12/panoroma-investigates-gamesaddiction-offers-balanced-fair-reporting/ 67 Panorama attempted to show that addiction to games was a major problem. It failed. Utterly. news.bbc.co.uk/panorama/hi/front_page/newsid_9251000/9251687.stm 71 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
That seems to be a parenting problem, not a games one. The son was cured by time spent in the sunshine and on the beach in company with other young people, alongside with structured activities and group interactions.) He got balanced views from the industry and academics about whether there is an addiction problem. Sure, Panorama tried to sex it up by saying that 12 people were believed to have died, globally, as a result of games in the whole of history. To put that into context, 24 people have died of alcohol-related 68 illnesses today, in the UK alone. It tried to paint a picture of people manipulated by evil developers into spending too much time on games (and just wait until they discover social games, which can suck up peoples time AND their money). But it failed. It failed because there is no evidence. It failed because it is not a problem. It failed because, as Rob Fahey has argued, we have won the media battle and editors and producers realise that gamers now outnumber non69 gamers in the UK, making it harder to sensationalise at the ignorant. I may have been more open-minded than many because I read Adrian Hons thoughtful piece on why social games are opening up the door to a whole new raft of potential psychological and social issues which are emerging as the 70 games industry changes. I started worrying about the same issue a few weeks ago, as I worked on my 71 ARM Yourself framework. On Wednesday, my Retention post will be published, talking about how to use key elements of psychological persuasion to influence users to play your game and to spend money on it.
68 69
http://www.statistics.gov.uk/cci/nugget.asp?id=1091 http://www.gamesindustry.biz/articles/2010-11-12-back-to-black-editorial 70 http://blogs.telegraph.co.uk/technology/adrianhon/100006049/a-newbreed-of-computer-games-is-creating-compulsive-behaviour-someone-ismaking-a-lot-of-money-out-of-this/ 71 See ARM Yourself in Volume 3 or http://www.gamesbrief.com/2010/11/arm-yourself-in-a-post-viral-world/ 72 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
There is nothing wrong with this per se. All marketing is about changing peoples minds about your product and making it more desirable. But I found myself thinking that there are some very powerful ways of reinforcing behaviours available to game designers. So perhaps we have to face up to the possibility that the great freedom we have to make great games comes with a responsibility. The Panorama show ended with a po-faced Jeremy Vine saying something like If your teenage son gets violent when you unplug his console, dont panic just visit our website for advice. That is very far from being a biased critique of a hugely successful industry that creates enjoyment for millions. But it is a reminder to us all that we do have a responsibility not to abuse our freedoms.
IF YOU BELIEVE IN INTERNET FREEDOM, YOU SHOULD HATE THE DDOS ATTACKS IN DEFENCE OF WIKILEAKS 72
December 10, 2010 | Nicholas Lovell I dont think I have seen a more stupid bunch of freedom fighters. In defence of Wikileaks, an organisation that calls itself Anonymous has launched Distributed Denial of Service attacks of the basic infrastructure of commerce on the web. Companies like PayPal and MasterCard which are crucial to businesses and shoppers in the run up to Christmas. Why are they doing it? According to a statement circulating online, apparently from Operation Payback, and quoted in the Guardian: "We will fire at anything or anyone that tries to censor WikiLeaks, including multibillion-dollar companies such as PayPal. Twitter, youre next for censoring #WikiLeaks 73 discussion. The major shitstorm has begun." In other words, they want to support openness and independence on the web and to protest against authoritarian government. Way to go, guys. You have done the one thing that has authoritarian governments rubbing their hands in glee. Youve launched an attack on non-combatants, designed to maximise the impact on ordinary people going about their business.
72
http://www.gamesbrief.com/2010/12/if-you-believe-in-internet-freedomyou-should-hate-the-ddos-attacks-in-defence-of-wikileaks/ 73 http://www.guardian.co.uk/media/2010/dec/08/operation-paybackmastercard-website-wikileaks 74 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
The word terrorism is a loaded one (just read the Wikipedia entry on 74 terrorism for how hard it is to get anyone to agree what it actually means). Im not sure I would use it here. But others will. Others who want to regulate cyberspace. Others who want to authorise the routine snooping of our online activities by the police and the military. Those who have been shown to be powerless in the face of these attacks will seek to increase their power. So thanks a bunch, Operation Payback. Your puerile actions will strengthen the resolve of governments across the world to increase their cyber-surveillance. Whatever it was you hoped to achieve by this, I am damned sure you just achieved the opposite.
74
http://en.wikipedia.org/wiki/Terrorism 75 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
GO BUY SETTLERS OF CATAN. SERIOUSLY 75

June 21, 2010 | Nicholas Lovell Im just back from holiday. Two families, young children. So we had to stay in a lot. I brought Settlers of Catan to try out. After a lot of games, were hooked. Its elegantly balanced, rarely takes too long, offers a remarkable variety of strategies and is usually surprisingly close. Its quick to understand but deeply nuanced. I think that anyone designing multiplayer games should play it. And anyone who likes games (which I reckon is everyone who reads this blog), should play it too. You can buy Settlers of Catan from Amazon , or go check out my previous post 77 (and a Wired article) on the game.
76
75 76
http://www.gamesbrief.com/2010/06/go-buy-settlers-of-catan-seriously/ Buy it for yourself at http://amzn.to/ekXjH1 77 http://www.gamesbrief.com/2009/03/settlers-of-catan-the-best-game-evermade/ 76 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
COPYRIGHT
The games industry is facing the piracy issues that have plagued the music industry and are about to engulf the film and book industries. Our current copyright system is struggling to cope with the fundamental changes wrought by digital distribution. The current response of most copyright owners is all stick and no carrot. I believe that the most successful solutions will be new business models. Unfortunately, a number of established media businesses will not survive the transition.
IS CONSTANTIN FILM THE STUPIDEST COMPANY IN THE ENTIRE WORLD? 78

April 21, 2010 | Nicholas Lovell Constantin Film is the company behind Downfall, a reasonably successful German-language movie based on the final days of Hitler. Downfall has grossed 79 $92 million at the box office since it was released in 2004. It has also become one of the dominant video memes on the Internet. Youve probably seen them a bunch of military officers stand in front of the Fuhrer in his underground bunker. Then some of them file out (can you tell I dont speak German?) In the endless succession of parodies, Hitler flies into a rage, not at the loss of World War II, but at being kicked off Xbox Live (4.3 million views), or because no-one told him that Michael Jackson was dead (2.9 million views) or some other current political, social or technological topic. They are often funny, they are well-thought through and they are the kind of viral marketing that marketers can only dream of. So only a mind-numbingly stupid company would kill that viral activity stonedead.
USING THE DMCA ON DOWNFALL VIDEOS

Step forward Constantin Film. According to TechCrunch, Constantin has issued notices to remove Downfall 80 parodies under the DMCA to YouTube and other video sites. Are they mad?
78
http://www.gamesbrief.com/2010/04/are-constantin-film-the-stupidestcompany-in-the-entire-world/ 79 http://www.boxofficemojo.com/movies/?id=downfall.htm 80 http://techcrunch.com/2010/04/19/hitler-parody-takedown/ 79 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
These are not pirates copying the film illegally. These are modern, clever mashups of existing footage with topical news. They make a six-year old, German-language film relevant to a US audience. What financial loss is Constantin making from these parodies? I cant see any. Downfall took only 6% of its revenues in the US. These videos, created by third parties (for free) and distributed globally by YouTube (for free), had the potential to encourage people to watch the original movie on DVD or on a movie channel. It had the potential to create long-term additional revenue for Constantin. Instead, lawyers have heavy-handedly stepped in and claimed that one of the most successful viral campaigns in movie history was, in fact, stealing.
STUPID, STUPID, STUPID

Can you tell how stupid I think this is? Constantin, I respect your right to protect your copyright. It is clearly up to you if you choose to stop all forms of free advertising for a movie that would be long forgotten if it werent the free activities of a bunch of fans. But it shows how little respect you have for your audience; it shows how little you understand the power of the Internet to drive conversations about your movie and it shows why, in the end, the Internet will kill you.
IT COULD HAVE BEEN SO DIFFERENT

So what could they have done? Its not rocket science: Build a YouTube channel of Downfall videos: Encourage people to upload their parodies to a branded Downfall channel. Post a prominent link to getting the movie from Amazon, or Netflix, or wherever Claim the YouTube revenues from Downfall parodies for yourself: If you are the copyright holder, you could claim the publishers share of 80 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
all YouTube revenues from these parodies. You could be making money from other peoples work, legally and above board. (Did I mention that it didnt cost you anything to get these millions of video views?) Build a Facebook fan page for Downfall videos: Cross-link. Share. Promote. Encourage people who have never heard of your movie to watch the videos on Facebook. Use that community to promote future Constantin Films for free. Build your own Downfall webpage: Run competitions for the best video each month and offer prizes. Get director Oliver Hirschbiegel to judge them. (Incidentally, he said that he was in favour of these videos in an interview with New York Magazine, although he added If only I 81 got royalties for it, then Id be even happier. ) The point of the film was to kick these terrible people off the throne that made them demons, making them real and their actions into reality. I think its only fair if now its taken as part of our history, and used for whatever purposes people like Oliver Hirschbiegel
Give me another fifteen minutes and I could come up with a half-dozen ways to make money from these.
YOUR LOSS, CONSTANTIN.

But its your loss, Constantin. We, the Internet, have lost a meme we had taken to heart and loved. You have lost a viral community who could have made you a ton of money. I hope your lawyers were cheap.
81
http://nymag.com/daily/entertainment/2010/01/the_director_of_downfall_ on_al.html 81 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
YOUTUBES DOWNFALL ADVICE: CONTEST THE TAKEDOWN 82

April 23, 2010 | Nicholas Lovell Following the news that Constantin Film has, in my view stupidly, issued takedowns for the many parodies using short clips of its movie Downfall, the backlash has started. YouTube has recommended that anyone who has a video that has been taken 83 down under their Content ID system should dispute the takedown. Mashable has the full story, but it seems that these videos may not have been taken 84 down under the DMCA. Under YouTubes system, if the video creator disputes the takedown, the videos will go straight back up. The original copyright owners will then have to decide if they want to issue a DMCA notice.
ANYONE WHO HAS VIOLATED A COPYRIGHT, LEAVE THE ROOM NOW

The Electronic Frontier Foundation has also fought back. In a new Downfall parody, it pokes fun at Constantin Films and points out that if the company issues improper takedown notices under the DMCA, the EFF could sue the 85 company for big damages. It would be a splendid irony if Constantin Films continued in its misguided attempt to take down fair-use parodies of its film that have provided fantastic viral marketing and was itself successfully sued by the EFF for breaching different provisions of the DMCA, in particular the elements relating to fair use.
82
http://www.gamesbrief.com/2010/04/youtubes-downfall-advice-contestthe-takedown/ 83 http://www.youtube.com/t/contentid 84 http://mashable.com/2010/04/22/hitler-youtube-downfall/ 85 http://youtu.be/PzUoWkbNLe8 82 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
*** As an aside, I quote this comment from Jonty Lovell (yes, hes family): I have just figured it out. Constantin are the cleverest company in the entire world. Before they did this everyone knew the internet Hitler meme. But as of today everyone knows about the movie Downfall from a company called Constantin and there are even new memes about their meme. Perhaps they are smarter than we give them credit for.
IS CRIMINALISING SOMEONE FOR PROTECTING THEIR WI-FI SO WRONG? 86

May 14, 2010 | Nicholas Lovell Of course it bloody is.
NOT
PASSWORD-
Berlins top criminal court yesterday passed this chilling wifi password judgement: Private users are obligated to check whether their wireless connection is adequately secured to the danger of unauthorized third parties abusing it to commit copyright 87 violation Words fail me at how wrong this is. It means that a cafe or a consumer which leaves their Wi-Fi connection open for their friends, their customers, even for the good of society is guilty if anyone infringes any intellectual property over that connection. The fine may only be 100, but that is entirely beside the point. It means that a Wi-Fi connection does not benefit from the common carrier protection that ISPs and telecoms companies use to prevent being prosecuted for aiding and abetting any crime that was organised by phone or email. It puts an onus on the owner of the Wi-Fi connection to police what happens over it. Thats like holding a telco responsible for a terrorist attack because it was arranged by phone. Or a pub landlord responsible for a fight because it started on his premises. Or a car manufacturer responsible for a bank robbery because their car was used as a getaway vehicle.
86
http://www.gamesbrief.com/2010/05/is-criminalising-someone-for-notpassword-protecting-their-wifi-so-wrong/ 87 http://www.msnbc.msn.com/id/37107291/ns/technology_and_sciencesecurity/ 84 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Help me out here: I want to get the clearest, most apt analogy for how stupid this rule to use again and again with politicians and regulators in the UK to stop this kind of woolly thinking affecting judgments based on the Digital Economy Act. So please post your suggestions below. Thanks for helping.
THE STATE OF DRM ON THE PC

May 21, 2010 | Nicholas Lovell I was recently interviewed by Will Porter for PC Zones feature on DRM, and particularly Ubisofts draconian measures. Ive transcribed my bit below. You should read the full article on PC DRM on 88 GamesRadar. Nicholas Lovell, founder of Gamesbrief, is an expert in the business of gaming. We got in touch to find out how increasingly stringent DRM demands are affecting the moneymen of gaming, and just how piracy is changing the gaming were used to.
WHAT DO YOU MAKE OF THE PRECAUTIONS THAT WERE SEEING?
CURRENT
ANTI-PIRACY
Defeating piracy is a fine balance. Publishers need to protect their investment in intellectual property without alienating their paying consumers. Disc-based DRM has had its problems and is always cracked, but its existence is, at best, a deterrent and, at worst, a clear reminder to pirates that they are stealing. Always-on requirements have tipped that balance against legitimate customers. There is no doubt in my mind that pirates now have a better experience than legitimate consumers.
ARE CURRENT PUBLISHER MEASURES TOO DRACONIAN, OR ARE GAMERS BEING TOO SENSITIVE?
Not only are they too draconian, they are bizarre. Steam has shown how you can have a balance between regular authentication checks and the ability to play the game without a permanent internet connection. It seems crazy to me
88
http://www.gamesradar.com/f/drm-necessary-evil-or-consumer-insult/a20100518133549635045 86 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
that Ubisoft didnt emulate Steam, which by some estimates has more than half the market, and instead went for their own draconian system. My belief is that Ubisoft are targeting the wrong metric. They are trying to reduce piracy. I think that theyll succeed, but I also think that theyll reduce their sales. Thats surely not the objective.
IN UBISOFTS POSITION, AND INDEED EAS, WHAT ELSE COULD THEY HAVE DONE OTHER THAN ENFORCE AN ALWAYS-ON INTERNET CONNECTION ON CONSUMERS TO FIGHT PIRACY?
Tim OReilly once said that the greatest issue facing any author is obscurity, not piracy. The same is true for games. Publishers spend a ton of money on promoting their games. For Modern Warfare 2, the marketing and distribution budget was four times the size of its development budget. So there are ways to see piracy as the start of a relationship with a future customer, not theft. Project Ten Dollar, EAs way of rewarding people who buy the original game at retail, is a good example of how to generate revenue from secondhand (and 89 pirated) material. I think its a great use of a new business model to reward legitimate, paying, supportive customers, and not punish them. How else could they do it? Give the whole game away entirely for free, make it small, and charge for DLC. Investigate a virtual goods model (by most estimates, Zynga, the creator of Mafia Wars and Farmville is now more valuable than Ubisoft.) Slash the marketing budget and rely on pirated copies to spread the word about how good your game is, then charge for additional elements. In short, experiment to see how you can add value to your users, not to see what you can take away.
IN WHAT OTHER DIRECTIONS IS PC GAMING EVOLVING AS A REACTION TO THE RAMPANT PIRACY THAT PLAGUES IT?
89
The editor added this sentence this is EAs marketing drive to include free DRM with store-bought games. 87 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
PC gaming is in rude health, yet selling boxed products at retail is in terminal decline. We are seeing games that charge subscriptions, and games that are monetised entirely through virtual goods. Always-on DRM is not wrong per se. Its just a huge mistake to charge gamers a huge premium for their content and to limit their ability to play it in a way that pirates are not limited.
IS THE CHANGE IN PC GAMING A GOOD THING?

Unequivocally, yes. Publishers are obsolete. Their business model evolved when it was incredibly expensive to distribute a game. Publishers became the gatekeepers determining what got made and their focus was on reducing risk. But now we dont need gatekeepers because distribution is so close to free as to make no odds. Sure, we need the skills of a publisher: marketing, finance, etc, but we dont need their risk management any more. Were in the very early days, but in the long term, the changing business model will be fabulous for PC gaming. Its my belief that Ubisoft is hastening this process, by making legitimate, boxed PC games sufficiently unattractive to consumers to drive them away to other forms of PC gaming entertainment. Sometimes, even as an analyst and a former investment banker, the foolishness of big companies makes my jaw drop.
US COURTS FIND IN GOOGLES FAVOUR OF SAFE-HARBOUR PROVISIONS OF DMCA IN VIACOM CASE 90

June 24, 2010 | Nicholas Lovell Viacom and YouTube have been squaring up for a rights battle for months. At stake was more than the $1 billion of damages that Viacom was seeking: it was the very future of user-generated content. According to a report from the Guardian, Viacom alleged that YouTube had built itself into the worlds largest video-sharing site by promoting the unlicensed use of video taken from Viacom cable channels such as MTV, 91 Comedy Central and Nickelodeon. YouTube denied the claim but, more importantly, argued that it had complied with the safe harbor (sic) provisions of the Digital Millennium Copyright Act which requires a host to take down infringing material as soon as they are notified that the material is infringing. Judge Louis Stanton found that YouTube complied with the DMCA. Viacom spent several months compiling lists of infringements. It notified YouTube of the infringements on 2nd February 2007 and by the next business day, nearly all of the videos have been removed from YouTube. This ruling is great news for hosts and for organisations which rely on usergenerated content. Viacom was seeking to increase the burden of regulation and proof for such hosts, which had believed that provided they had robust takedown procedures, they should be safe from lawsuits such as these. Judge Stantons ruling confirms the strength of the safe harbor ruling.
90
http://www.gamesbrief.com/2010/06/us-courts-find-in-googles-favour-ofsafe-harbour-provisions-of-dmca-in-viacom-case/ 91 http://www.guardian.co.uk/technology/2010/jun/23/youtube-wins-viacomlawsuit 89 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
The fact that many of the allegedly-infringing videos were, in fact, secretly uploaded by Viacom staff as part of their marketing activities is unlikely to have helped Viacoms case either.
FILESHARING, COPYRIGHT AND MY ATTEMPT TO CHANGE THE ATTITUDE OF THE MUSIC INDUSTRY 92
July 23, 2010 | Nicholas Lovell This is a lightly edited transcript of a talk I gave at the Westminster eForum on Filesharing, copyright and the digital consumer on 14th July. I was pleasantly surprised by how open the music industry seemed to be towards changing the role of copyright. We are winning. Thank you, Peter. Im Nicholas Lovell, founder of GAMESbrief, and I work in the games industry. A long time ago, I used to be an investment banker. I stopped doing that before bankers destroyed the world so I can safely claim that wasnt my fault. I fear that you wont like some of the things I plan to say today. Ill start by saying that although this a policy and legal conference, I tend to start my thinking by following where the money is flowing and how business models are changing, rather than starting by thinking about the law. My view of the law is that in a democracy it should reflect what the market and consumers want rather being an attempt to proscribe activities that are demonstrably in demand. First, the good news. I dont think that there has ever been a better time to be a content creator. Your ability to reach audiences, to explore new ideas, to spread your message is easier than it has ever been before. The bad news is that I dont think that there has ever been a worse time to be content distributor that, I think, is the heart of the issue we are discussing today. The Internet has reduced barriers to distribution and for most media businesses, distribution was the heart of the business. In most media
92
http://www.gamesbrief.com/2010/07/filesharing-copyright-and-myattempt-to-change-the-attitude-of-the-music-industry/ 91 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
businesses, the content creation is a small part of the costs. In a newspaper, maybe 15% of the costs are journalists creating content. The rest is printing, distribution, ad sales, senior staff not content. In the games industry, Modern Warfare 2, the blockbuster hit of 2009, cost 50 million to develop and 200 million to market, manufacture and distribute. In the book world, authors generally get less than 10% of the cover price in royalties. Broadly, you can say that eighty per cent of the costs of a media business are distribution costs and only twenty per cent are content costs. That isnt going to work any more. The internet has made distribution essentially free. If not free, it has certainly made it cheap. Marketing is still important; discovery is still a big problem. But if you are a band which builds up a big following, you previously had no choice but to pay up to eighty per cent or more of your earnings to do something that used to be very hard: to get your music in front of consumers, in a physical form, and to take their money. That has now changed and the media landscape has altered irrevocably as a result. A previous speaker, a partner at Berwin Leighton, said that when she was young and often chose to spend money on music, one of the reasons was that she wanted to make sure that the artists got rewarded for their work. I think that resonated with consumers, and luckily it still does. You can persuade users to pay lots of money for live gigs, but increasingly you can also get them to pay for special elements like limited edition box sets or some other premium version of the content. I love Mos Defs idea that he cant sell a CD to consumers, but he can charge $15 for a T-shirt that says I bought the Mos Def album and then send the consumer a free copy of the album on CD with the T-shirt. Thats a great illustration of how the consumer mentality has changed. Consumers will pay for status; theyll pay for belonging, theyll pay to express their membership of a tribe and music has always been a very tribal and status-led medium. Music is often about saying Im a tribal follower of Runrig 92 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
(Im not, Im afraid, Peter) and when you can harness that, you can be very successful, as great bands know. In my world of games, weve seen the emergence of a business model around virtual goods. To those people in the room who dont understand virtual worlds and how important it is to be able to, for example, decorate your avatar, Im afraid I dont have time to explain how important and significant virtual goods are. But its a huge thing, and its all about sociability. In many ways, its no different to the real world. You may think that you pay for physical items but consider, for example, a Prada handbag. You might buy one for 5 from a street vendor or an identical one, made in the same factory, for 500 from a Prada store. The main difference is that one is legitimate and one is not. You pay for the premium handbag because you want the social kudos of being able to afford an expensive luxury. Clearly luxury goods still suffer from the counterfeit problem but in the end, since it is all about status, if you have a knock-off version, you are not getting the status. In the music world, if you are a committed fan of OK Go, you want to declare your allegiance to them. Pirating their music is not declaring allegiance; if you spent 300 on a limited edition box set with an exclusive run of only 10,000 copies for 300, thats showing your allegiance. And thats how consumer behaviour has changed. If I were to continue to talk about the bad news, I would suggest you should be very scared by this: my book called How to Publish a Game. Not because of what is in it, but because of the way it came to market. Ive been talking to publishers about getting a book on the business of games written for two and a half years. I have an agent. Ive been trying to go through gatekeepers. Ive been seeking permission. But I run a blog on GAMESbrief which has 10,000 to 15,000 monthly users. Thats enough for me to think that I have sufficient distribution to make a business book viable thats a really important point: you still need distribution. 93 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
But at a big trade show called E3 last year, a bunch of my clients said what we need is a book on self-publishing. So in the last twelve months I conceived it, I wrote it, I typeset it, I marketed it. All myself. The only bit I paid for was a designer to create the cover. In the first six weeks, I have made 80% of what my agent said I would get as an advance from a publisher. For business books, authors rarely receive royalties other than the advance, so I expect to earn significantly more money from self-publishing this book than I would have done through the traditional publishing industry. Just to be clear, How to Publish a Game will never be in Waterstones. I wont get the same kudos from working with a traditional publisher and I will get fewer calls from the BBC asking for quotes because Im not the guy who published a book with HarperCollins. All of those things would be helped by having a publisher, but there is still a role for them. But my main point is that with the destruction of the value of providing distribution for content creators, there is a huge problem for the industry. We were also asked to talk about consumer confusion. Consumers are particularly confused about what they can share. One of my popular blog posts on GAMESbrief is called Are Constantin Film the stupidest company in the 93 entire world? You may be familiar with the movie Downfall. It has a scene where Hitler is in his bunker getting extremely upset about the imminent defeat of the Third Reich. The scene is in German and there is an established YouTube meme where users take that scene and subtitle with, well, just about anything. Steve Jobs on the iPhone 4 reception problems or people complaining about the Digital Economy Act or whatever. Constantin issued a takedown notice for every user-generated clip. They set their lawyers to taking down four minutes of an obscure movie that no-one had previously heard of but which was getting the kind of viral marketing that most
93
See p.68 94 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
companies can only dream of. There are companies out there who would have paid massive bonuses to a marketing agency to get that kind of viral exposure. As an aside, its also almost certainly fair use, since it was only four minutes of a much bigger work copied for parody purposes (Note: a lawyer in the audience pointed out that this is a US legal defence, not a UK one), which means that Constantin may not even have had the right to ask YouTube to take it down. So what you had with Downfall was consumers doing something really cool with cool content, promoting Constantins intellectual property, driving awareness of an obscure movie and they chose to take it down because our current legal structures say that thats what Constantin needs to do to protect its intellectual property. Despite the fact that this kind of value-added sharing is what consumers want and in my view, should be allowed to do. Im getting a red flag here. Ill end by saying that we have two big issues. Distribution is permanently changed and is no longer as valuable as it used to be and secondly consumers are deeply confused about what is allowed and what is not. These are two very big problems for our industries. Thank you for listening.
IS EMI AS STUPID AS CONSTANTIN FILM AS IT ENFORCES TAKEDOWN OF THE NEWPORT VIDEO PARODY? 94
August 11, 2010 | Nicholas Lovell The Newport State of Mind parody video has been phenomenally successful. A parody of Jay-Z and Alicia Keys Empire State of Mind, it is funny, ironic and a great tribute to the 2009 track. So were EMI stupid to issue a takedown notice?
96 95
IM NOT SO SURE
Perhaps surprisingly, I am not convinced that EMI are being as stupid as 97 Constantin Film were when they took down the Downfall parodies. The Downfall parodies were an Internet meme where users took a short clip of maybe four minutes from a movie that ran for 155 minutes and then added 98 captions. The captions covered everything from iPhone App rejections to 99 Susan Boyles surprising second place in Britains Got Talent. It was a short extract, likely to benefit from the parody defence in the US and fair use in many other countries. It was a golden marketing and revenue opportunity that Constantin threw away.
ITS NOT QUITE THE SAME FOR EMI
94
http://www.gamesbrief.com/2010/08/is-emi-as-stupid-as-constantin-film-asit-enforces-takedown-of-the-newport-video-parody/ 95 http://www.youtube.com/watch?v=PLFHDNksCh4 96 http://www.guardian.co.uk/media/pda/2010/aug/10/newport-state-ofmind-youtube 97 See p. 68 98 http://www.youtube.com/watch?v=sVkqbycvuKw 99 http://www.youtube.com/watch?v=_T3ANc2AzQI 96 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
In a thoughtful post, IP lawyer Steve Kuncewicz (working for Halliwells but writing in a personal capacity as all lawyers do), sets out the areas where EMI 100 might be claiming for copyright infringement by Newport: the video the sound recording of the song the lyrics the music
Well, Im no lawyer, but the video is very similar style, while the sound recording and lyrics are totally different. But the music thats just been lifted lock, stock and barrel.
BANG TO RIGHTS
YouTubes basic legal defence is that it acts as soon as it is informed of an infringement. EMI Music Publishing claimed there was a music copyright infringement and asked YouTube to take the Newport parody down. YouTube did so. Its hard to think that YouTube has done anything wrong here. But has EMI? Thats the million-dollar question. Unlike with Downfall, this was no extract: the video runs for the same length and has the same melody. To compare it to Downfall, perhaps you have to imagine someone taking the whole of Downfall except the soundtrack, redubbing it and releasing the re-imagined movie commercially in the cinema. Its hard to call that fair use. (Of course, thats not quite true, since the filmmaker M-J Delaney shot the Newport video with entirely new footage and new performers Alex Warren and Terema Wainwright, but I hope you get my point.)
100
http://ipmedialaw.wordpress.com/2010/08/10/%e2%80%9cnewport-stateof-mind%e2%80%9d-old-parody-issues/ 97 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Legally, it looks to me as if they were within their rights. Morally, many fans and users who enjoyed the parody may not agree. But to me, its the financial question that is most interesting.
COULD EMI HAVE TURNED THIS TO JAY-ZS ADVANTAGE

Right now, EMI (and, by extension, Jay-Z) are looking pretty heavy-handed. A talented filmmaker makes an homage of their music and they squelch it, quickly. That cant be good for their brand. The official video on YouTube has 55 million views. The spoof had had about two million, I think. You could argue that, if YouTube was selling ads against it, then EMI should get its share to give to the original artists. Thats 2 million views x $10 CPM (thats an incredibly generous assumption and probably out by a factor of 10) $1 CPM (still a generous assumption given low YouTube fill rates) x 55% (YouTube keeps the rest) = $11,000 $1,100. So EMI could have claimed a share of that advertising revenue. But EMIs real issue is that it is worried that by letting someone put out the entirety of its tune on YouTube, it would not be able to sell that track again. What if an advertiser chose to use the parody not the original? Would it stop users downloading the iTunes version? What is the financial impact?
MY THOUGHTS
I dont think this is as clear-cut as Downfall. If I were EMI, I would have contacted director M-J Delaney and said Oi! Youre using our copyright, on many levels. We love your work, and would like to promote through all our JayZ channels. But since it is so derivative, and you are climbing on the shoulders of our talent, we want a percentage (50%? 75%? 80%?). Everyone wins. A relatively obscure director gets his her 15 minutes of fame (and the chance to capitalise on it), as do the performers. Jay-Z shows he is able to take a joke. EMI makes more money.
For all I know, thats what happened. And either the director said no or EMIs lawyers couldnt move first. The takedown could even be a negotiating tactic (albeit a heavy-handed one). In the end, if I were EMI, I would be trying my damnedest to have a strategy that says when someone does something cool and viral with some of our content, we want a piece of it, because thats good for everybody, not Shut it down. Right the hell NOW! But thats not how big companies work. Which is why, I fear, they may be doomed.
MAYBE EMI ARENT THE BAD GUYS ON THE NEWPORT / EMPIRE STATE OF MIND TAKEDOWN AFTER ALL 101
August 24, 2010 | Nicholas Lovell You may remember that a pastiche of Jay-Zs Empire State of Mind based on the Welsh town of Newport are you a visit hit the web a couple of weeks ago, got incredibly popular and then was promptly shut down by EMI. Well, it turns out that the bad guy in this story might not be EMI. It might not 102 even be the original songwriters. It might be YouTube.
REALLY? YOUTUBE THE BAD GUYS?

To understand the issue, you need to understand something about the music industry. Its been a while since I covered music, so I may get some of it wrong. Hopefully someone will put me right in the comments. There are two different parts to a record company. Taking EMI as an example, there is EMI the record label and EMI Music Publishing. EMI, the record label, is all about the artist and his or her performances. They manage the artists catalogue, and make money from selling the recordings that the artist makes, among other things. EMI Music Publishing is all about the underlying rights. The lyrics, the music, the whole thing put together. But not the performance.
So, to take one example, the Beatles make money from all the performances of their songs. But only Paul McCartney and the estate of John Lennon make
101
http://www.gamesbrief.com/2010/08/maybe-emi-arent-the-bad-guys-onthe-newport-empire-state-of-mind-takedown-after-all/ 102 http://www.guardian.co.uk/media/pda/2010/aug/11/newport-state-ofmind-youtube 100 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
money from the underlying rights on songs where they are the ones credited as songwriters.
GOT IT. HOW DOES THAT MAKE YOUTUBE THE BAD GUYS?
YouTube runs this nifty service called Content ID. It allows rights holders to claim content that others have uploaded. They claim the ad revenue, can overlay links to iTunes or wherever but also get to support user-generated content. So everyone wins, right? No. YouTube only recognises one rights holder for Content ID: the record label. So EMI the label can claim the revenue from a video that infringes the performance copyright. Only in this case, it wasnt a performance copyright, it was an underlying copyright. EMI Music Publishing is the company that needs to claim the revenues for its songwriters, only YouTube gives it no mechanism to do so. YouTube does acknowledge the music publishing companies as legitimate rights holders, but the only options it gives them is to take the video down or leave it up they have no way of profiting from the success.
103
SO EMI IS IN THE CLEAR?

I dont think it is quite as clear cut as that. There was still the opportunity to negotiate directly with the director and performers to cut some form of commercial deal, (and the Guardian lays the blame for the failure to seize that opportunity squarely on the songwriters themselves)
103
http://www.youtube.com/t/contentid 101 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
But YouTube, in effect, recognises the rights of the label (essentially the performance) in preference to the rights of the music publisher company (essentially the underlying lyrics and music). Those music publishing companies have to defend the rights of their songwriters. YouTube gives them a binary option, with no way of collecting their share of the money. So we can expect lots more of these takedowns as record companies not only fight with YouTube and with consumers, they fight with each other to share the decreasing spoils of music publishing. It wont be pretty. Many thanks to Stuart Dredge for his guidance on this post. Any mistakes are my own hes much more expert than me on music. Follow him on Twitter at www.twitter.com/stuartdredge.
WHY THE VERY STRUCTURE OF THE INTERNET WILL DESTROY COPYRIGHT 104
August 12, 2010 | Nicholas Lovell Regular readers of GAMESbrief will know that I think a lot about copyright. Recently, this quote from John Gilmore leaped out at me: The Net interprets censorship as damage and routes 105 around it. John is a founder of the Electronic Frontier Foundation and a libertarian, but Im not trying to make a political point. Im trying to make a practical one. I think that we all know that the Internet was originally conceived by the US military as a distributed network that could survive having nodes destroyed by Russian nukes (or whatever). This ability to route around damage was central to its concept. And its that self-repairing element that is anathema to censorship. The hardware, the software and the human users are all conditioned to identify breaks in the communication and bypass them.
CAN THE NET TELL THE DIFFERENCE BETWEEN CENSORSHIP AND COPYRIGHT?
Censorship is government stopping citizens from spreading information and content amongst themselves. Copyright is corporations and individual creators (with the backing of law) stopping users spreading information and content amongst themselves. Can the Net tell the difference?
104
http://www.gamesbrief.com/2010/08/why-the-very-structure-of-theinternet-will-destroy-copyright/ 105 http://www.chemie.fu-berlin.de/outerspace/internet-article.html 103 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
I doubt it. Just this week, EMI issued a take-down notice for Newport State of Mind, a parody video of Jay-Zs Empire State of Mind. YouTube complied. You can 106 107 108 109 currently see the video here , here and here on YouTube and here , 110 111 here and here elsewhere on the web. (That last one is in Russia. Good luck, EMI legal eagles.) My point is this: once something is on the web, ITS ON THE WEB. The whole technology and infrastructure is designed to make sure that no-one not Russian nukes, not Chinese spooks, not EMIs lawyers can break the information flow. In that structure, the Net will view any attempt at preventing the spreading of information as bad. It will always find ways to route round restrictions, because it views them as damage. Does anyone really think that copyright can survive this onslaught?
106 107
http://www.youtube.com/watch?v=PLFHDNksCh4 http://www.youtube.com/watch?v=uyoDUoH7BZc 108 Not any more, this one was pulled by the lawyers 109 http://www.kontraband.com/videos/23502/Newport-State-Of-Mind/ 110 http://www.liveleak.com/view?i=cfc_1279995330 111 http://video.tochka.net/208264-newport-ymerodraeth-state-of-mind/ 104 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
TAX CREDITS
Tax relief for the games industry has been a hot topic over the past two years, driven particularly by the generous subsidies offered by several Canadian provinces to games developers. I am one of the few people stating publicly that they are opposed to tax credits. I fear that the tax credits risk ossifying the industry at just the moment that it needs to be nimble and fleet of feet to respond to the pressures of the internet and new business models. Read my arguments, and see if you agree.
ARE TAX BREAKS DOOMING CANADA TO SECOND-CLASS STATUS? 112

July 7, 2010 | Nicholas Lovell The issue of tax breaks for the games industry is a live one. Attractive tax breaks offered by Canada, France and many US states are drawing global publishers to build studios and recruit talent based on tax incentives, rather than broader commercial logic. Britain, which does not offer tax breaks, is falling down the global rankings of games-producing companies from third to either fifth or sixth, depending on who you believe. TIGA, the games development trade body, has been a vociferous supporter of tax breaks for the games industry to level the playing 113 field. But is Canada actually benefiting so much? In the latest Develop 100 2010 survey of the worlds most successful game studios, one statistic leaped out at me: Within Canadian-made games, 82 per cent of product sold is by a publisher-owned studio, no surprise given the many 114 studio investments in the region. Hold on. Are the tax breaks really doing what Canada wants? Are they creating a strong, domestic business with global exports and long-term potential? Or are they just creating a legion of indentured wage slaves who are only attractive to foreign investors because of the generous tax breaks?
112
http://www.gamesbrief.com/2010/07/are-tax-breaks-dooming-canada-tosecond-class-status/ 113 See http://tiga.org/Policy-and-Public-Affairs.aspx 114 See http://issuu.com/develop/docs/develop100_2010 and http://www.develop-online.net/features/881/Develop-100-2010-GfK-ChartTracks-perspective 107 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
WHATS THE LONG-TERM FUTURE OF CANADIAN DEVELOPMENT?

Im guessing that the purpose of the Canadian tax breaks is to build long-term value in the economy (not just keep people in jobs, which to my mind is the role of the market, not of government). The question, then, is whether Canadas economy will benefit from the repatriation of profits generated by its local development talent to the coffers of US, French and Japanese companies. After all, a knowledge economy rests on Intellectual Property. And that IP is not being created for the benefit of Canadian companies but for their overseas paymasters.
DOES THIS MATTER?

I think it does. Ask any businessman whether he would be happy to compete on price alone, and he would look at you as if you were mad. Price is a poor differentiator, and a beggar-thy-neighbour one. As soon as high-quality development talent comes on stream in other countries that have lower costs-of-living or better tax breaks, Canada is in trouble. Unless it offers even bigger incentives. For the long term, Canada needs to foster a spirit of entrepreneurialism and IPgeneration that will stay in Canada. It needs to encourage its best and brightest to start new businesses, not to take attractive (and subsidised) jobs with global behemoths. A quick test for you: can you name two global Canadian success stories in games in the last ten year? For these purposes, they need to be well-known to gamers, still independent, and have created intellectual property with a longterm future. Im struggling. Maybe I dont know enough about Canada. Or maybe tax breaks have a hidden, and dangerous, cost. 108 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
VIDEO GAME TAX BREAKS: SHORT TERM GAIN FOR LONG TERM PAIN? 115
July 13, 2010 | Nicholas Lovell Now that the UK Coalition government has nixed tax breaks for the video games industry, perhaps it is time to step back and ask what the objectives of video game tax breaks were and whether they would ever be able to achieve them.
ITS ALL ABOUT CANADA

The UK is reeling from Canadas ascent up the global developer rankings. Despite the UKs track record of development and rich creative heritage, Canada is overtaking us as a developer of AAA boxed products. Canada has generous tax breaks. The logical response is for us to have generous tax breaks. I have two issues with this argument. The first, as I argued last week, is that tax breaks may doom Canada to second-class status. The second, as set out by 116 Jason Della Rocca in GamaSutra , is that it is not all about tax breaks: it is much about infrastructure, education, a benign funding environment and being a good place to run a company. A number of US states have started to offer tax breaks, but without the additional elements seem unlikely to enjoy the success that Canada has to date.
ITS ABOUT PROTECTING JOBS

This, to my mind, is where the argument starts to fall apart. I fear that tax breaks are about protecting *companies*, not jobs. The long term future of
115
http://www.gamesbrief.com/2010/07/video-game-tax-breaks-short-termgain-for-long-term-pain/ 116 http://www.gamasutra.com/view/news/29311/Interview_Jason_Della_Rocc a_On_Breaking_Tax_Breaks_Hold_.php 110 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
games is not in AAA development. There will be a few studios making blockbuster titles for major publishers, but the majority of game development will be online, service-based developers creating games on the web, 117 smartphones, the iPhone and, possibly, downloadable console platforms. These companies are the companies we need to support. We need to help the next generation of games companies, not the last generation. If they cant help themselves, then, in the spirit of Schumpeters creative destruction, they need to adapt or die. The most exciting companies in the UK games sector right now are Playfish, Jagex and Mind Candy. Games like Restaurant City, Runescape and Moshi Monsters are the future of our industry. We need to help them. It is conceivable that tax breaks will help new, innovative companies to create unthought-of business models. It is more likely that they will help entrenched companies whose business models are failing, but who can get the ear of government.
ITS ABOUT THE LITTLE GUY

I dont think I can make the counter-argument any better than Cliff Harris from Positech, the indie developer of Gratuitous Space Battles. Today was budget day in the UK. The Chancellor abolished the plans of the last government to bring in some vague idea of subsidies for UK game developers working on culturally British games. Instead, amongst other things, he reduced the rate of company tax by 1% from next year.
117
See The future of the games industry? Its in three parts in Volume 2 or http://www.gamesbrief.com/2010/10/the-future-of-the-games-industry-its-inthree-parts/ 111 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Im pleased. Even if my games were clearly culturally British, Id have to have applied for the subsidy, no doubt by filling out forms that would take days, then probably have to meet someone and pitch for the subsidy, involving me travelling, then debating and arguing, and hoping that some stuffy civil servant in a suit doesnt assume Im some dodgy shyster just because I wear jeans and work from home. I bet Id never have earned a penny from it, although administering the system would doubtless have kept a few civil servants busy. On the other hand, cutting taxes for all businesses, just makes Positech games 1% more competitive automatically, without any effort involved by anyone. Its the smarter move, in my opinion. This seems to be a minority view, there is much gnashing of teeth by industry spokespeople. Im surprised anyone thought that a pre-election promise to cut taxes would be honored by a different government.
ITS ABOUT FAIRNESS

Canada offers tax breaks. France offers tax breaks. So the UK wants to offer tax breaks. Pretty soon, every economy in the world offers tax breaks. Civil servants are employed keeping score, but the truth is that money that flows from taxpayers via bureaucrats to companies is money that is leaking out of the productive economy. Do we really want to encourage that? Especially when everyone else is doing the same thing. Its just an increased tax burden, not a competitive advantage.
ITS ALL ABOUT THE FUTURE

The tax breaks will be locked in time. They will be relevant to the games market as it is today (or perhaps yesterday) not tomorrow. Can you imagine any 112 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
political party having the will to revisit the tax breaks in the next decade? I cant. That means that tax breaks will be about games in boxes or games as products. They are unlikely to be suited to agile development, to the emergence of the mobile Internet, to service-based gaming, to a world where consoles are a minor player in the gaming universe. Even if they are, can anyone expect them to be relevant in ten years time? Think back to the gaming landscape in 2000 and consider how much has changed from then.
ITS ABOUT GAMES

This, I think, is my final criticism. Tax breaks will, inevitably, administered by civil servants. If you thought that it was bad that publishers were responsible for green-lighting what gets made, can you imagine how much worse it would be if it were civil servants? Tax breaks tend to make companies develop for the government, not develop for the market. And to my mind that is a recipe for poor quality products that no-one wants, and hence commercial disaster.
CONCLUSION
Perhaps you can tell by now that I have some very real objections to tax breaks. Ive kept quiet until now because the industry wanted them, and I have many friends, colleagues and clients in the games sector. I, perhaps cowardly, didnt want to rock the boat (but nor did I lobby against them in private, unlike the 118 alleged activities of some games publishing companies). I disagree with tax breaks in principle. They smack of government belief that they can intervene to stem the tide of free markets changes. I am much more supportive of efforts to stimulate start-up activity and investment, particularly
118
See http://www.develop-online.net/news/35231/Cecil-Cultural-concernsparked-tax-break-doubts 113 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
by helping with training and networking, and much less so of direct involvement in commercial decisions. I fear that tax breaks would have helped the UK in the short term, offering publishers a bribe to place their development in the UK. But in the long-term it does not help us innovate, develop new business models and grow. Like Canada, we will become indentured serfs, dispatching our surpluses to foreign paymasters. The long-term is what matters, not attempting to stem the tide of change. I would rather that the film industry was not subsidised. I would rather that Canada did not offer games tax breaks. But given that Canada does, my preferred solution is to make the UK the best place in the world for small businesses (low corporation tax rates, highly skilled knowledge workers, a creative community), not to offer tax breaks due to special pleading on an industry-by-industry basis. I fear that may make me unpopular in the gaming community.
THE CASE FOR TAX BREAKS WAS NEVER REALLY MADE, SAYS SIMPLE LIFE FORMS TADHG KELLY 119
July 12, 2010 | Tadhg Kelly In a detailed comment in response to a GamaSutra interview with David Braben 120 about the UK governments U-turn on tax break for video games , Simple Life Forms creative guru Tadhg Kelly weighed in with some strong comments. I reproduce them here with permission. Im not sure that its to do with the way that the new government values the games industry per se, but rather the Conservative attitude to government help for industry in general. Politically, theyd actually rather get rid of or reduce the amount of subsidy that flows into the UK film industry, but cant as that would lose a lot of support. However they have effectively ended or closed a variety of regional media development efforts and several other so-called austerity measures. The games assistance should be viewed among the backdrop of all of that activity rather than be seen as a special victimisation. All that being said, the case for tax help for games has never really been properly made and it was a contentious issue. While TIGA and the like argued that it was a natural right (if film had it, why not games) yet the effect of such schemes on other media like film is repeatedly shown to affect the kinds of projects that get greenlit and ultimately make those industries utterly dependent on funding and the politics of funding. This is not something that I think would be a positive for the British industry overall, as the spectre of cultural tests and the like are bad. The reduction in corporate taxation from 28% to 24% is thus more significant because it provides substantial savings of a generalised nature. Its not an
119
http://www.gamesbrief.com/2010/07/the-case-for-tax-breaks-was-neverreally-made-says-simple-life-forms-tadhg-kelly-2/ 120 http://www.gamasutra.com/view/news/29365/Braben_UK_Dev_Relief_Sho uldnt_Have_Been_Classed_As_A_Tax_Break.php 115 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
ultimate panacea but its pretty good and could provide much breathing room for UK publishing in general. Lastly, it could simply be the case that the UK economy is always going to be more conducive to smaller-scale indie development. With the advent of App Stores and social platforms, the cost of publishing neat game ideas is rapidly declining and there is an opportunity for motivated developers to basically reboot the UK industry as a next generation of what used to be called bedroom coding. To add tax breaks into that mix thus seems more of a ploy to prop up the existing mid-sized difficult-to-find-viability companies that have been waning all across the UK in the last few years. And is there really a compelling case for doing that?
A DEVELOPER SPEAKS ON WHY HE EMIGRATED TO CANADA. HINT: NOT FOR TAX REASONS 121
September 9, 2010 | Nicholas Lovell I was reading a GamaSutra article on how the UK is losing out to Canada due to 122 tax breaks. This comment from developer Rob Bridgett leaped out at me: I just dont buy that the migration of developers to Canada, and indeed elsewhere, is linked solely to tax breaks. Speaking from my own experience, as someone who left the UK to live and work in Vancouver seven years ago (not the recipient of provincial tax breaks for games until very recently this year) my reasons for moving to Canada were based almost entirely around quality of life (cost of living / housing / lower crime rates / family friendly culture etc) and the sheer concentration of developers in Vancouver. If the UK could compete on quality of life, then it might be able to offer some allure to developers wishing to make a positive move. UK tax incentives might give the developers a little more breathing room in their operating margins, but (Im being cynical here) I doubt these savings will trickle 123 down to the salary levels of the devs themselves.
121
http://www.gamesbrief.com/2010/09/a-developer-speaks-on-why-heemigrated-to-canada-hint-not-for-tax-reasons/ 122 http://www.gamasutra.com/view/news/30283/Rebellion_CEO_Canadas_Tax _Breaks_Drive_Slow_UK_Brain_Drain.php 123 http://www.gamasutra.com/view/news/30283/Rebellion_CEO_Canadas_Tax _Breaks_Drive_Slow_UK_Brain_Drain.php#comment63755 117 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Its only anecdotal, sure, but its another piece of evidence that suggests that tax breaks are only a small part of the overall picture
THE SCOTTISH PARLIAMENT CLAIMS COPYRIGHT OVER MY WORK. HOW CAN THIS BE RIGHT? 124
October 11, 2010 | Nicholas Lovell A couple of months ago, I asked if I should contribute to the Scottish Parliaments enquiry into video game tax breaks. I decided to contribute, and sent in a submission explaining why I opposed them. You can read that submission (and a dozen others) at the Video Games in 125 Scotland enquiry page. Which is what made this letter that I received on Friday so extraordinary. Inquiry: Video Games Industry in Scotland 8 October 2010 Dear Mr Lovell Thank you for your written submission relating to the Committees inquiry. Once submitted and accepted as evidence, written submissions become the property of the Committee (my emphasis), and it is up to the Committee to decide the manner and timing of its publication or to authorise publication. If you wish to make your submission available to the press or to publish it elsewhere you should contact me and I will put your request before the Committee. The Committee normally, though not always, chooses to publish the written submissions it receives. Written submissions may be published at an early stage via the internet or published at a later stage (in hard copy or on the internet) alongside the Committees report and the record of public hearings. If witnesses
124
http://www.gamesbrief.com/2010/10/the-scottish-parliament-claimscopyright-over-my-work-how-can-this-be-right/ 125 http://www.publications.parliament.uk/pa/cm201011/cmselect/cmscotaf/m emo/video/contents.htm 119 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
are called to a public hearing, copies of their written submissions will usually be made available to press and public at the hearing, and will thereafter be treated as in the public domain. Please be aware that publication will include publishing individuals names, and any personal references which are contained in the submission. This information will be on the internet and will be searchable. However, contact details will be removed. Should you consider part or all of your submission to be private and confidential, please contact us immediately. Alternatively, the Committee may choose to make the written submissions available through the Parliamentary Archives. Material already published elsewhere, which is simply sent to the Committee for information (referred to by the Committee as background papers), will not normally be reprinted by the Committee. I will ensure that you receive the press notices giving details of the inquirys progress, and a copy of the report and evidence once it is published. If you have any queries please do not hesitate to contact me. Yours sincerely I was totally gobsmacked. According to the Select Committee Assistant, simply by the act of sending an email to the Select Committee I automatically and irrevocably agree to assign my copyright to the Select Committee, such that they can prevent me from reusing my own work elsewhere. That cant be right. Nowhere on the page where the Enquiry asked for evidence did they say that 126 this was the case. Nowhere in the Copyright section on the website does it 127 say this is the case. I submitted my proposal via email, so I cant have been
126
http://www.parliament.uk/business/committees/committees-az/commons-select/scottish-affairs-committee/news/video-games-industry/ 127 http://www.parliament.uk/site-information/copyright/ 120 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
caught by what Dr Ben Goldacre calls Bogus Agreements in a web form that I 128 inadvertently accepted. I dont believe anyone should have the right to retrospectively declare that they own my copyright. Ive written to the Select Committee to confirm if thats what they really mean. But what do you think? Is my interpretation right?
128
http://bengoldacre.posterous.com/trying-to-get-the-bbc-to-link-to-journal121 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
arti
I WON. PARLIAMENT WONT SUE ME FOR PUBLISHING MY OWN WORK 129

October 14, 2010 | Nicholas Lovell Last week, I received a letter saying that a House of Commons Select Committee had appropriated the copyright to my written submission to the enquiry into the governments decision not to enact tax relief for the games industry. Today they said that they had graciously decided to let me publish works over which I own the copyright. So I will. In the meantime, I am trying to determine under what law they claim to own my copyright. All they have done so far is point me to some guidelines that tell 130 me they have the right to prevent me publishing their own work.
MY SUBMISSION TO THE INQUIRY INTO THE VIDEO GAMES INDUSTRY IN SCOTLAND

1. 2. The decision not to introduce games tax relief will prove to have been a great boon for the UK games industry. The games industry, like all media businesses, is undergoing a major transition. The old business models, predicated on the challenges of distributing content in physical formats, are collapsing under pressure from the Internet. We are at the start of a new era of games, similar to the emergence of television in the 1940s and 1950s. There will still be successful, tentpole games with large development budgets and huge marketing spend. But the also-ran games, the equivalent of B-movies, will struggle and ultimately die in the face of competition from games on
3.
129
http://www.gamesbrief.com/2010/10/i-won-parliament-wont-sue-me-forpublishing-my-own-work/ 130 http://www.parliament.uk/documents/commonscommittees/witnessguide.pdf 122 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
4. 5.
6.
new digital platforms such as iPhone, Facebook, and download channels on PlayStation, Xbox and Wii. I fear that tax breaks might help the UK in the short-term, but cause substantial long-term pain. It makes the UK compete on a lowest common denominator of price. As countries such as India and China continue to strengthen their gaming expertise, competing on price will only work in the short term: a. Tax breaks misalign incentives. Developers are no longer choosing to design games that consumers want to buy or publishers want to commission; they are making games that tick the boxes that government want to fund. The track record of government picking winners is not strong. b. Tax breaks will divert the best from creating the games business of the future. Britain has successful games companies developing the games businesses of the future. Examples include Jagex (developer of Runescape), Playfish (developer of Restaurant City, bought for up to $400 million in November 2009) and Mind Candy (developer of Moshi Monsters). Tax breaks predicated on the games industry of 2009 are unlikely to help the UK stay competitive as the industry goes through dramatic change over the next 5-10 years. c. Industry specific tax breaks reward those who play the system. Making the UK a good place to do business (lower corporation tax breaks, less red tape) is a better use of public money than specific-targeted breaks that are expensive to apply for and expensive to implement. d. Tax breaks will benefit overseas companies more than British ones. Globally, games publishers are overwhelmingly non-British. Tax incentives might keep jobs in the UK (although, in my view, it would be the wrong jobs), but the majority of the financial benefits would accrue to giant French, Japanese and US publishers. I have written more about my opinions at GAMESbrief. 123 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
a. b.
See Video game tax breaks: Short term gain for long term pain? on p. 110 See Tax relief for the games industry has been a hot topic over the past two years, driven particularly by the generous subsidies offered by several Canadian provinces to games developers.
I am one of the few people stating publicly that they are opposed to tax credits. I fear that the tax credits risk ossifying the industry at just the moment that it needs to be nimble and fleet of feet to respond to the pressures of the internet and new business models. Read my arguments, and see if you agree.
7.
8.
9.
Are tax breaks dooming Canada to second-class status? on p. 105 Ed Balls has also claimed that the demise of RealTime Worlds is evidence of the need for tax credits for the UK games industry. Nothing could be further from the truth. RealTime Worlds was a mismanaged company that failed to understand how the games industry was changing. It raised over $104 million in investment from professional investors, and was unable to make a success of its ambitious game, APB. RealTime Worlds problem was not that it had 131 too little capital; it was that it had too much. The primary needs that the video games industry has are: a. For improved education, particularly in the areas of science and technology b. For a benign environment for starting up and running a business c. I would also be supportive of ensuring that the R&D tax credit regime supports the wide range of original research carried about the games industry. I believe that there could be a role for government in helping different media (games, television, music, publishing, web) to interact, and potentially for some knowledge transfer and training, although my instincts would be to keep this support at a very low level. The parts of the UK games industry that are suffering are suffering because their industry is changing around them. Tax credits would stave off the pain for a while, but it would prevent a much-needed change in structure, attitude, staffing and business models. They would be damaging to the UKs long-term prospects as a games powerhouse.
c.
131
See the entire section devoted to the demise of RealTime Worlds in Volume 125 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
2.
ABOUT ME
Nicholas Lovell is a games industry consultant and analyst. A former investment banker, he writes a blog on the business of games at www.gamesbrief.com and has written a book entitled How to Publish a Game. He has worked with clients including Atari, Channel 4, Firefly, nDreams, Rebellion and Square Enix, and provides advice on the games industry to financial institutions. I write here in my capacity as an independent consultant, and do not represent any clients on this topic.
SEVEN REASONS WHY THE COALITION REJECTS TAX CREDITS FOR THE UK GAMES INDUSTRY 132
November 18, 2010 | Nicholas Lovell I am not a fan of special pleading for an industry. I would prefer a government to work to make Britain a more favourable environment for all entrepreneurs, 133 not just games ones. Ive written my arguments on Gamesbrief before. The Coalition, which supported the tax credit before the election, decided against implementing game-specific tax credits in the Budget, calling them poorly targeted. Now, in a detailed debate in the House of Commons initiated by David Hanson MP (Lab, Delyn), the government has explained why they think they were 134 poorly-targeted. The stated purpose of the amendment that Mr Hanson put forward was: To test with the Minister whether [there] is an in-principle opposition to tax relief for the video games industry. If not is there, in principle, room for discussion, so that it would be possible for him to bring back, at some point, a tax relief that would help to support the video games industry. The answer is clear: the government is not in favour of the principle of this kind of tax relief. (Which does, I admit, make their continued support for film tax 135 credits a little inconsistent).
132
http://www.gamesbrief.com/2010/11/seven-reasons-why-the-coalitionrejects-tax-credits-for-the-uk-games-industry/ 133 See p. 110 134 http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm101108 /debtext/101108-0002.htm 135 http://www.guardian.co.uk/film/2010/nov/17/david-cameron-harry-potterfunding 127 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Ive gone through the debate in detail. Here are, the seven reasons given by David Gauke (Exchequer Secretary to the Treasury) why the government opposes tax credits specifically targeted at the games industry.
1. THERE IS NOT STRONG EVIDENCE OF MARKET FAILURE

The government says: The United Kingdoms video games industry is recognised as a world leader, having produced hugely successful games such as the "Grand Theft Auto" series, and has led to innovations in industries as diverse as defence and health care All that has been achieved without specific Government intervention for the sector through the tax system.
2. THE GOVERNMENT PREFERS ACROSS-THE-BOARD TAX CUTS TO TARGETED ONES

Minister David Gauke said: In that Budget on 22 June, we announced a reduction in the main corporation tax rate from 28% to 24% over the next four years. In doing that, we wanted to show a sense of direction, to ensure that Britain was open for business, and that we were providing lower rates. Our approach is to have a broader base but lower rates rather than targeted intervention, unless there is clear evidence that intervention is the right approach. He also said:
The governments focus must be on providing a strong business environment for sectors across the board, including video games
3. THE GOVERNMENT DOES NOT BELIEVE TIGAS NUMBERS

We have heard the figures quoted by TIGA, but we do not accept the validity of that analysis because we feel that some of the assumptions underpinning those estimates are erroneous.
4. TAX CREDITS DISTORT THE MARKET

As part of David Gaukes examples of why he does not believe TIGAs numbers, he argued that TIGAs analysis assumes that the investment incentivised by the subsidy is entirely additional to the UK economy. He said: In reality, it is likely that the relief will displace investment from elsewhere in the economy, so the net impact on total UK investment could be limited. For example, it is possible that such a tax subsidy would divert investment from more productive sectors to the detriment of the productivity of the UK economy as a whole.
5. UNEMPLOYED DEVELOPERS ARE EMINENTLY RE-EMPLOYABLE

The government does not believe that the demise of a developer means highlyskilled graduates joining the ranks or the unemployable. Certainly, the two people I spoke to most at RealTime Worlds about that studios demise are now re-employed (one in a US film studio, one in the back office of an investment bank). Mr Gauke said that the TIGA analysis makes the assumption that
everything achieved as a consequence of the relief would be additional to the economy. He said: It does not appear to recognise that there would also be displacement, and that highly skilled graduates would not remain unemployed if they did not find work in the video games industry. We are therefore sceptical about the TIGA analysis.
6. THERE ARE TOO MANY SPECIAL RELIEFS

The Office of Tax Simplification announced its list of reliefs and exemptions within the tax system. It was expected there would be about 400 reliefs and exemptions: in fact the number was 1,042. My personal opinion is that tax reliefs are good for accountants, lawyers and pork-barrel politicians. I do not believe that this level of complexity is good for the economy. Mr Gauke is a little more circumspect: Many *tax reliefs and exemptions] play an important role within our tax system I do not wish to decry that but we have to think carefully about introducing new areas of complexity and new reliefs and exemptions, unless there is a strong case for doing so. Members have already made the case for video games, but the Government remains unconvinced.
7. IT WILL BE ILLEGAL STATE AID UNDER EU RULES

To be fair, this appears to be just a timing issue. It is unlikely that EU clearance could be sought and granted before this Bill is passed, in which case tax credits would be illegal state aid.
(Unlike the other points, I dont view this as an -in-principle opposition. It is an administrative issue).
THE GOVERNMENTS POSITION

Mr Gauke summarised the governments position thus: The new clause would create unjustified distortion and complexity in the corporate tax system. We do not think that such an intervention would represent good value for money for the Exchequer or be conducive to providing a simple and competitive tax system. The UK needs a tax system that supports all businesses, because it is the private sector across the board that will drive the recovery. I therefore ask the right hon. Gentleman to withdraw the new clause and new schedule.
POLITICS AND THE PRESS
TIME TO END THE DANGEROUS SPLIT BETWEEN ELSPA AND TIGA? 136
May 18, 2009 | Nicholas Lovell Frontier has just announced that it has joined ELSPA.
137
The developer, famous for Dogs Life and Rollercoaster Tycoon 3 and led by David Braben, says that ELSPA addresses what we as game creators feel are the key strategic issues now facing us, including piracy, ratings and the preowned situation. One of my key themes is that all developers are becoming publishers. With the emergence of the Internet, the line between developers (who create games) and publishers (who finance, sell, market and distribute games) is rapidly blurring. Add in public policy issues like age-ratings and the Byron report which will affect any developer trying to sell direct-to-consumer (for example, if they run flash games or are considering a casual MMO) and you can understand why Frontier has joined up. (Im trying to find out if Frontier is now a member of both the publishers association ELSPA and the developers association TIGA.) The historic split between ELSPA and TIGA is looking ever more anachronistic, even though both organisations do worthy and valuable work. Is it time for British developers and publishers to put aside their differences and merge their trade bodies into one?
136
http://www.gamesbrief.com/2009/05/time-to-end-the-dangerous-splitbetween-elspa-and-tiga/ 137 Since this post was written, ELSPA has rebranded as the Association for United Kingdom Interactive Entertainment, or UKIE for short. 135 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
THE CHAIRMAN OF TIGA CHANGES MY MIND ABOUT A TIGA/ELSPA MERGER

May 18, 2009 | Ian Baverstock One of the joys of writing a blog is the dialogue that takes place in the comments on the site. They spark new thoughts, and even make me change my mind. This response from Ian Baverstock, former chairman of TIGA, to my post on why ELSPA and TIGA should merge is one such comment. The differences between TIGA and ELSPA and their respective memberships are real. The split isn't 'dangerous'; it's healthy. Developers are very different from Publishers in this context. Developers might all be thinking about becoming digital publishers but they are not all going to do it. Even those that do will retain significant work for hire/retail focused development capacity for many years to come. Even when they do become digital publishers, their focus will be global. This is also true for existing development businesses whose customers are mostly non-UK. TIGA remains an organisation representing UK companies that have global market focus; ELSPA is mostly an organisation representing global companies that have (in ELSPA's case) a UK specific market focus. Therefore TIGA is focused on global business issues and those specifically allowing us to compete internationally like overseas subsidies and the supply of skilled staff. ELSPA remains more focused on a domestic market agenda. I could go on about the differences of audience and outlook but there are also large practical issues. ELSPA is very well funded by large companies on a very different basis to TIGA. Within any merged structure, either the smaller development companies would have no voice (through lack of membership fees clout) or the publishers would feel completely shafted by the developers spending their much greater membership fees on development issues. Equality here would mean reducing the amount the publishers spend on their trade body which is hardly a desirable outcome. 136 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
TIGA has worked to bring many issues to the fore that would simply never have happened otherwise. Publishers have a different set of objectives, a different mindset as mostly UK subsidiaries of international companies and, naturally, a different focus. This focus remains largely on retail for very good reasons. To dismiss the entire UK development industry, with its incredible record of achievement, as little more than the larval stage of a bunch of digital publishers seems overly narrow in outlook and perspective. For now, and I think for some years to come, the development sector needs its own strong voice. Being lost amongst the clamour of some very big, powerful companies with a different agenda does not seem like a positive step for the UK's very successful development industry.
GAMES CAUSE RICKETS A THOROUGH DEBUNKING 138

January 22, 2010 | Nicholas Lovell I know I shouldnt get angry when lazy journalist pull a games-bashing story out of thin air, but this one really takes the biscuit. Two senior academics, Professor Simon Pearce and Dr Tim Cheetham have just published a report in the British Medical Journal entitled Diagnosis and 139 management of vitamin D deficiency I do not have had access to the full article, and nor am I a medical practitioner or research scientist with the skills and training to understand its implications. 140 However, I do have access to the same press release that journalists at 141 142 Metro and Times Online have had. And, boy, does that make me angry. Ive posted the entire press release below so you can read it for yourself. The opening paragraph reads: Medical experts have called for Vitamin D to be added to milk and other food products, in a bid to halt a rise in the number of children suffering from rickets. The link to games is contained in two quotes:
138
http://www.gamesbrief.com/2010/01/games-cause-rickets-a-thoroughdebunking/ 139 http://www.bmj.com/cgi/content/extract/340/jan11_1/b5664 140 http://www.ncl.ac.uk/press.office/press.release/item/experts-call-foraction-to-halt-rise-in-rickets 141 http://www.metro.co.uk/news/810028-video-gaming-leads-to-surge-inrickets 142 http://www.timesonline.co.uk/tol/life_and_style/health/child_health/article 6997656.ece 138 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
A traditional UK diet often lacks vitamin D and this could be a big reason for the increasing problem, as well as changes in lifestyle, such as children staying indoors playing computer games. and Simon Pearce, Professor of Endocrinology, said: Kids tend to stay indoors more these days and play on their computers instead of enjoying the fresh air. This means their Vitamin D levels are worse than in previous years. Can you see the problem? The study is focusing on the increased incidence of Vitamin D deficiency and its consequences. Not only is it not a controlled study into games, the abstract lists a range of risk factors, which include: skin pigmentation use of sunscreen or concealing clothing being elderly or institutionalised obesity malabsorption renal and liver disease, and anticonvulsant use
Or to put it another way, people who have dark skin or cover their skin dont synthesise enough Vitamin D from the sun. But these issues, such as being old or fat are risk factors, not causes. And, at best, playing games a lot might be a risk factor. In the Victorian era, long before computer games or televisions, rickets was a huge problem. As Dr Cheetham says: I am dismayed by the increasing numbers of children we are treating with this entirely preventable condition. 139 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
But in the very next sentence, he goes on to suggest a totally different cause. Fifty years ago, many children would have been given regular doses of cod liver oil, but this practice has all but died out. The Guardian (which has a more even-handed approach to the story as befits 143 the home of Ben Goldacre, author of Bad Science ), has more details from Professor Pearce: One of the main reasons for the reappearance of rickets once considered a disease of the industrial poor in 19th century cities is due to the changing ethnic make-up of the population, Professor Pearce explained. Most commonly affected, he said, are those of Asian or African descent who live in northern cities. He has examined cases among young Somali speakers who live in east 144 Newcastle. This survey makes no causal link between games and rickets, or even Vitamin D deficiency. It has identified a significant public health issue of rising numbers of cases of rickets, an entirely preventable disease that was almost eradicated fifty years ago. The potential causes are many, ranging from a changing population ethnicity, the lack of playing fields for schoolchildren, a culture of fear that prevents children playing outside unsupervised or even feckless parents who no longer feed their offspring a teaspoonful of foul-tasting cod liver oil every day. But God forbid that its bad parenting that causes these issues. Lets blame the screen.
143 144
http://amzn.to/hflNVU http://www.guardian.co.uk/society/2010/jan/22/sharp-rise-vitamin-adeficiency 140 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
*** EXPERTS CALL FOR ACTION TO HALT RISE IN RICKETS Medical experts have called for Vitamin D to be added to milk and other food products, in a bid to halt a rise in the number of children suffering from rickets. Writing a clinical review in the latest issue of the British Medical Journal Professor Simon Pearce and Dr Tim Cheetham, of Newcastle Biomedicine, a partnership between Newcastle University and the Newcastle Hospitals NHS Foundation Trust, call for a change in public health policy. Vitamin D deficiency is disturbingly common in the UK and can cause a number of serious health problems, in particular rickets in children. A traditional UK diet often lacks vitamin D and this could be a big reason for the increasing problem, as well as changes in lifestyle, such as children staying indoors playing computer games. Rickets, where children develop painful and deformed bow-legs and dont grow properly is a condition linked with poverty, starvation, Victorian times or those in the developing world not with 21st Century Britain. But it is a very real concern, with several studies showing that numbers are increasing. More than 20 new cases are discovered every year in Newcastle alone. Dr Tim Cheetham, Senior Lecturer in Paediatric Endocrinology at Newcastle University, said I am dismayed by the increasing numbers of children we are treating with this entirely preventable condition. Fifty years ago, many children would have been given regular doses of cod liver oil, but this practice has all but died out. Half of all adults in the UK have Vitamin D deficiency in the winter and spring, and one in six having severe deficiency. This is worse in northern regions and could be part of the reason for the health gap between the north and south.
And the condition has been linked to cardiovascular disease, type 2 diabetes, several cancers, and autoimmune conditions as well as osteomalacia, which is the painful manifestation of soft bones in adults. Simon Pearce, Professor of Endocrinology, said: Kids tend to stay indoors more these days and play on their computers instead of enjoying the fresh air. This means their Vitamin D levels are worse than in previous years. A change in public health policy is required. Health professionals have been slow to deal with this problem, even though we have known about it for a while. Some measures have been taken but the number of patients still presenting with symptoms of vitamin D deficiency shows we have a long way to go. Our main source of vitamin D is sunlight, through skin exposure. But it is also present in a small number of foods: oily fish such as salmon, mackerel, sardines, herring and grannys favourite: cod liver oil. There are several high risk groups who are most in danger from suffering from deficiency including; people with skin pigmentation, those who use sunscreen or concealing clothing, being elderly or institutionalised, people who are obese, and those suffering from renal and liver disease. Prof Pearce added: We believe that a more robust approach to statutory food supplementation with vitamin D, for example in milk, is needed in the UK, as this measure has already been introduced successfully in many other countries in similar parts of the world.
SCIENTISTS BEHIND GAMES CAUSE RICKETS DENY A SPECIFIC LINK 145

January 22, 2010 | Nicholas Lovell Earlier today, a number of newspapers ran sensationalist headlines that claimed a causal link between games and rickets. I tried to debunk the story simply by reading the same press release and publicly-available extract available to the professional journalists at Metro and the Times who wrote this sensationalist and deeply wrong story. (You can read 146 that debunking at Games cause rickets a thorough debunking). But then I thought Id go one better. I contacted the two scientists behind the report: Professor Simon Pearce, Professor of Endocrinology at the Institute of Human Genetics at Newcastle University and Dr Tim Cheetham, Consultant/Senior Lecturer, also at Newcastle University and at the Royal Victoria Infirmary. (You can read the email I sent in full below). Isnt that what paid journalists should have done? They both got back to me within a few hours. Their comments were illuminating. Dr Cheetham said: I understand METRO has said that we have linked computers to rickets, whereas we are actually saying lack of outdoor activity in childhood is a risk for poor D nutritional state. He then added, pretty unequivocally in my view:
145
http://www.gamesbrief.com/2010/01/scientists-behind-games-causerickets-deny-a-specific-link/ 146 See p. 135 143 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
We do not say that gaming causes rickets Professor Pearce confirmed my understanding of his research (set out in the email below) and added: The average age of a child with rickets is around 20 months old: too young to use a keyboard and mouse! He added that staying inside and playing Monopoly or watching television could prevent you getting enough Vitamin D, and there was nothing specific about gaming in the study. But there is an even more important issue here. The study highlights the difficulties of people with dark skin synthesising enough Vitamin D from the British weather. It also highlights the dangers of overzealous parents slapping sunscreen on their children at the first hint of sunshine. What we are trying to say is that the vitamin D status of older kids and teenagers is poor, because they tend to play outdoors less. Other factors that put kids at risk are obsessional use of sunblock; we would like to see sunblock being applied after the kid has been outside for 20 or 30 minutes, not before they leave the house. Nevertheless, sunlight is an imperfect solution as if you are Asian and African ancestry there isnt really enough sun in the UK for your skin to make enough vitamin D, so food supplementation is our recommendation. So there are two really important health messages here, aimed at sunblockobsessed parents and people of Asian and African ancestry. But that was ignored in order to make a sensationalist claim about games. That doesnt just make me angry because it maligns games; it makes me angry that these papers preferred sensation to really important health messages. 144 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
*** Dear Professor Pearce/Dr Cheetham* You may have seen that furore in the press relating to your recent BMJ article and (more likely in my opinion), the press release that accompanied it. Mainstream journalist appear to have taken a single quote (Kids tend to stay indoors more these days and play on their computers instead of enjoying the fresh air) and turned it into the thrust of the article. I am no scientist, and have not had access to the BMJ article. However, my understanding of your arguments is: Rickets is on the increase in the Newcastle area Rickets is an entirely preventable disease that simply needs adequate Vitamin D Adding Vitamin D to milk and other products would be a sensible public health response.
However, I dont see any scientific evidence that: Children who play computer games have a higher incidence of rickets Playing computer games correlates with going outside less, compared with, for example, having two working parents, not having access to playing fields, a culture of fear that discourages children from playing outside unsupervised or a dozen other possible causal factors.
I am keen to write a rebuttal of the sensationalist headlines. I would very much appreciate it if you could confirm that your study focused on the entirely preventable disease of rickets and its causes, together with an appropriate public health response, and that the link between computer games and vitamin D deficiency was never part of the study. Of course, if Im wrong on this, Id also like to know. As a gamer and a parent, if the link is proven, I would very much like to know that and will write about it. 145 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
I look forward to your response. Yours sincerely Nicholas Lovell *I wrote to them both separately, and they answered separately
IAIN DUNCAN SMITHS VIOLENT CREDIT WHERE CREDITS DUE 147

January 26, 2010 | Tom Jubert
GAMES
CONTROVERSY:
Last week Times Online published an Iain Duncan Smith piece, in which the former Tory leader talks about children, and tax and booze and briefly mentions violent video games. The relevant paragraph is this: Innocence, he warns, is being destroyed by childrens television and computer games. We are driving children to lose their childhood, and some video games are incredibly violent, like Grand Theft Auto. They are meant to be 18 but 148 nobody cares what it says on the label. Various gaming sites then went on to sensationalise the story with headlines 149 like MP: Games are destroying childhood. The point of this post isnt to rage at the ever low journalistic standards of some hit-counting gaming websites, but to highlight the fact that a politician has said something broadly fair about games. Every week theres a new story on how games are destroying society a genuinely ignorant story the last thing we need now is to warp the facts in the rare event that anyone says anything constructive. IDSs comment is a brief, possibly even vague element in a general piece blaming parenting, alcohol and even the tax system for societys downfall. What it certainly is not doing is attacking games, or games developers. Its true that violent games exist, and its true that too many children are playing them. That (some) MPs are bothering to get the specifics straight rather than lambasting the entire industry is something we should be applauding.
147
http://www.gamesbrief.com/2010/01/iain-duncan-smiths-violent-gamescontroversy-credit-where-credits-due/ 148 http://www.timesonline.co.uk/tol/news/politics/article6998806.ece 149 See, for example, http://www.vg247.com/2010/01/23/iain-duncan-smithsays-games-are-destroying-the-innocence-of-uks-kids/, and http://dailygamesnews.com/2010/01/iain-duncan-smith-attacks-violent.html 147 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
We can complain til were blue in the face that no one takes gaming seriously, but until we grow up its a battle with only one conclusion. Tom Jubert is a freelance narrative designer, passionate about working on both indie (Penumbra) and AAA (Driver: San Francisco), and about providing meaningful experiences in both. Head to http://blog.tomjubert.com for more.
RUMOURS OF KEITH VAZS GREATLY EXAGGERATED 150

July 8, 2010 | Tom Jubert
MALEVOLENCE
HAVE
BEEN
Not entirely dissimilar to my defence earlier this year of Iain Duncan Smith Im forced to jump to the aid of the man the games press loves to hate.
151
Theres no doubt Keith Vaz has said some entirely idiotic and uninformed 152 things about the games industry , but his latest call for government to better enforce age ratings and prevent 18+ games from falling into childrens hands hardly qualifies as one of them. Develop bills itself as the UKs premier destination for informed industry news and comment. Why, then, it feels headlines like Vaz is back, and games are 153 evil again are necessary to jolt viewing figures is entirely beyond me. Vazs parliament motion reads as follows: *...+ this House notes with grave concern that despite the 18 rating that the most violent video games carry, some children and teenagers are still able to acquire them; [this house] congratulates the work of Mothers Against Violence with regard to their campaign to increase parental awareness of violent games [and] urges the Government to support the promotion of parental awareness of the violent content of video games which are 18-rated; and calls on the Government to urge Pan-European Game Information to
150
http://www.gamesbrief.com/2010/07/tom-jubert-rumours-of-keith-vazsmalevolence-have-been-greatly-exaggerated/ 151 See Iain Duncan Smiths Violent Games Controversy: Credit Where Credits Due on p. 145 152 http://www.mcvuk.com/news/29799/Modern-games-feature-virtual-rapeMP-tells-Parliament 153 http://www.develop-online.net/news/35285/Vaz-is-back-and-games-areevil-again 149 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
take further steps to highlight the inappropriate content of 154 these games for under 18s. Last time I checked, one of the main causes for anti-video games press in the mainstream media revolves around children playing inappropriate games. The movement Vaz is supporting is entirely rational and beneficial for our industry. That one of our major industry voices scaremongering is prompting comments such as Im surprised he didnt try to claim that Violent games are child abuse too. only a matter of time makes us no better than the knee jerk reactions were so often on the receiving end of. Lets all just grow up a little, shall we? Tom Jubert is a freelance narrative designer, passionate about working on both indie (Penumbra) and AAA (Driver: San Francisco), and about providing meaningful experiences in both. Head to http://blog.tomjubert.com for more.
154
http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=41280&SESSION =905 150 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
SALMAN RUSHDIE, VIDEO GAMES AND MY LETTER TO THE FINANCIAL TIMES 155
October 12, 2010 | Nicholas Lovell Salman Rushdie has just written a book for children. Entitled Luka and the Fire of Life, its a fable about a child entering the world of 156 magic to rescue his father. I should admit that I have not read it. All I have done is read the review from 157 Philip Womack in the Financial Times. Philip Womacks primary criticism of the book is what he calls the computer game aspect. He says, for example: Since Haroun (Salman Rushdies first book) was published, computer games have encroached upon the childhood imagination. In a computer game, once you have learnt the necessary skills (usually by pressing some impossibly complex combination of buttons), you can complete a level and thus eventually succeed. They are not necessarily good metaphors for life; although, as Rashid says, they may improve your hand-eye co-ordination (not mine; I couldnt get Lara Croft on to the first level, let alone through it The facile criticism of computer games incensed me. It incensed me so much that I wrote a letter to the Financial Times about it, which they published on 158 Saturday.
155
http://www.gamesbrief.com/2010/10/salman-rushdie-video-games-andmy-letter-to-the-financial-times/ 156 http://amzn.to/e886a6 157 http://www.ft.com/cms/s/0/cb8bd6e4-cce9-11df-9bf0-00144feab49a.html 158 http://www.ft.com/cms/s/0/807b6daa-d332-11df-9ae9-00144feabdc0.html 151 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
My first thought when I read the review was if this is a book aimed at children which carries a computer game metaphor at its heart, why did they ask some technophobic old fogey to review it? Isnt that like asking Jeremy Clarkson to review chick-lit or Jordan to review the latest Martin Amis? Then I did some research and discovered that Philip Womack is in fact 29. So he is not an old fogey. He is just prejudiced and bigoted against video games. The perfect reviewer for Salman Rushdies book? I dont think so. The full text of my letter is below. From Mr Nicholas Lovell. Sir, With reference to Philip Womacks review of Luka and the Fire of Life (Game on, Life & Arts, October 2), I despair at the approach of asking a person who seems to take no joy in computer games to review Salman Rushdies new childrens book, which uses computer games as a central theme. The author claims, for example, that computer games which allow you to progress simply by learning the necessary skills are not a good metaphor for life. I can think of no better metaphor. Computer games encourage commitment, practice, lateral thinking and a sense that if your first approach does not work, try a different one. They are ideal training for entrepreneurs, for independent thinkers, for a future generation where jobs for life are a distant memory and where adults will be expected to change jobs and acquire new skills throughout their careers. James Gee of the University of Wisconsin found that games are embedded with one of the core principles of learning: students prosper when the subject matter 159 challenges them right at the edge of their abilities. Games are perfectly structured to deliver a regime of competence. Prof Gees interest was stimulated when he tried to play a game enjoyed by his six-year-old son. He
159
http://discovermagazine.com/2007/brain/video-games 152 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
said: I hadnt done that kind of new learning since graduate school. You know, as you get older, you kind of rest on your laurels. Perhaps its time Mr Womack started some new learning too. Nicholas Lovell, Director, GAMESbrief
WE HAVE WON THE BATTLE 160

November 18, 2010 | Nicholas Lovell I have just been reading the debate in the House of Commons about tax breaks 161 for video games. It is a surprisingly interesting debate, with contributions from David Hanson (Lab Delyn), Jim McGovern (Lab, Dundee West), Stewart Hosie (SNP, Dundee East), Tom Watson (Lab, West Bromwich East), Charlie Elphicke (Con, Dover), Mark Field (Cities of London and Westminster) and others. I will post another day about the specifics of the debate on tax credits. But the thing that struck me the most throughout the debate was how positive, supportive, enthusiastic and knowledgeable a number of MPs are about the games industry.
DONT BAN THIS SICK FILTH

During the entire debate about video game tax breaks, nobody said Why is the government funding these murder simulators? Keith Vaz didnt stand up and say Games kill, on average, one person every minute in the UK. A government minister didnt stand up and say Games? Arent they just for spotty oiks who cant get girlfriends? Nothing of the sort. The government minister, David Gauke (Con), was at pains to say: There is no sense in which the government is in any way anti-video games or think it is an antisocial issue or anything like that
160 161
http://www.gamesbrief.com/2010/11/we-have-won-the-battle/ See Seven reasons why the Coalition rejects tax credits for the UK games industry on p. 126 154 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
This is an amazing achievement. Massive credit to Richard Wilson and his team at TIGA for helping our politicians realise how important the games industry is both culturally and commercially to Britain. Credit also to UKIE, to the Games 162 Up campaign and to everyone who has interacted with politicians to help improve the image of the games industry. Last week, Rob Fahey declared that we had won the battle with the media. This week, it looks as if weve won the battle with politicians. Well done to us all.
163
162
http://www.develop-online.net/news/30089/Games-Up-campaignprepares-to-lobby-Parliament 163 http://www.gamesindustry.biz/articles/2010-11-12-back-to-black-editorial (registration required) 155 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
TELEVISION IS NOT JUST FOR SLACK-JAWED OLD PEOPLE WAITING TO DIE ANY MORE 164
November 10, 2010 | Nicholas Lovell When I was a child, the television seemed like the apotheosis of entertainment. On a Saturday evening, Id sit around with my brother and my parents watching classic entertainment like The Generation Game, Morecambe and Wise or Game for a Laugh. Wed go to visit my grandparents, sitting in their high-backed, winged chairs, religiously turning on the television to watch Countdown at 4.30 and then theyd stay there, legs out, leaning back on the sofa, as they lives drifted away through ad breaks and idents. I learned to equate television with boredom, a flickering attempt to dull the fear of mortality by pretending, for just a little while, to be truly interested in, well, pretty much anything that was put in from of me. So when I turned sixteen, I left television behind. Television was for the young or for the decrepit. As girls and alcohol and going out and having fun, came crashing into my consciousness, the idea of choosing, purposefully, to lock myself away in a darkened room watching a pale, uninteractive facsimile of life seemed, to me, to be madness. I railed against a medium that discouraged thought or action, where problem solving was something someone else did, where my participation involved nothing more than stabbing an idle finger at the bottom of the remote. Why watch Gardeners World when I could be in the garden, amongst the plants and the leaves and the flowers. Why waste time with Countdown when I could do a crossword puzzle myself that taxed my brain. Why watch dull whodunnits when I could read, or play Broken Sword or The Puzzle of Monkey Island, games that test my mental faculties and challenged me to the edge of my abilities, a proven way of helping people learn and develop.
164
http://www.gamesbrief.com/2010/11/television-is-not-just-for-slack-jawedold-people-waiting-to-die-any-more/ 156 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
I, in my self-righteous arrogance, thought that television existed for children who knew no better and slack-jawed old people, waiting to die. So imagine my surprise when someone told me about all the programmes that exist in a multi-channel environment. I thought multi-channel meant 4. Programmes that contain drama and narrative, suspense and story. Programmes that enable me to interact with the screen and not simply be invited to turn off my brain and lie comatose on the sofa, my mental faculties as dulled as a dead-drunk mother in Hogarths Gin Lane. Sure some of the stuff I see on the television is rubbish. But some is genius. It turns out I was wrong. Television is no just one type of content, catering for simpering morons, any more than all books are, or all films, or all video games. There are programmes like The Wire, Sherlock, How to Look Good Naked and The Thick of It. There are shows that bring a nation together, like Downton Abbey, The X-Factor and Strictly Come Dancing. Hell, even some soap operas seem pretty good. It turns out that making ill-informed, prejudiced, narrow-minded assertions about a medium based on an understanding formed twenty years ago and a perverse desire to refuse to participate in one of the largest segments of our entertainment landscape is a bad idea. Whod have thought it? *** In case you missed it, this is satire, prompted by Harry de Quettevilles bizarre 165 piece in the Telegraph today.
165
http://www.telegraph.co.uk/technology/video-games/8120850/Black-OpsIm-only-answering-the-call-of-duty.html 157 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
WHAT YOU NEED TO KNOW ABOUT YOUTH PROTECTION RULES FOR GAMES IN GERMANY 166
December 17, 2010 | Konstantin Ewald This is a guest post from Konstantin Ewald, partner at Osborne Clarke , a law firm with a strong games practice. Since this post was written, two German states failed to ratify the law. The situation is currently unclear, as Konstantin explains in a subsequent guest post.
167
COMPLEX NEW RULES FOR 2011

With some of the strictest youth protection rules in the world, German video games can be quite different from those sold in other countries. Human opponents become Androids and red blood is turned into green lubricant. And, of course, swastikas are out. Too much violence in a game and it is listed, which means you cant advertise or allow customers to register online without first physically checking their ID cards. The latest reform of online youth protection regulations will come into effect on 1 January 2011 (Important note: in a surprise turn of events, two states 168 failed to ratify the reforms, putting them on hold) . The reform has everything you would expect from the Germans: strict and complex, but ultimately logical. Importantly, the reform should help game providers looking to publish games in the German market.
WHATS CHANGING AND WHATS NOT?

The German youth protection system has two branches, the Youth Protection Act (YPA) and the State Treaty on Youth Protection in the Media (STYPM). The
166
http://www.gamesbrief.com/2010/12/guest-post-what-you-need-to-knowabout-youth-protection-rules-for-games-in-germany/ 167 www.osborneclarke.com/ 168 See Surprise development yesterday stops Januarys new Online Youth Protection laws in Germany on p. 151 158 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
reforms impact the STYPM part of the rules and there are two areas that will be of particular interest to online game providers. Firstly, the changes are designed to create more suitable rules for providers of online content by taking into account the increasing convergence of online and offline media. The aim is to make it easier for parents to assume their individual responsibility. Secondly, binding age ratings will make an appearance in the online world for the first time. These are currently only available for offline media. Providers will be encouraged to make their offerings compatible with youth protection software that parents can install on their home computers.
THREE TYPES OF RESTRICTED CONTENT

German youth protection rules and criminal law distinguish between three types of games content: There are games considered inappropriate for a certain age group, or even inappropriate for all minors. These games receive an age rating. Where these games are available online, technology or organizational measures must be taken to prevent children accessing them. Games can also be considered youth endangering. This means they are more than just inappropriate for minors. They are considered liable to impair a young persons sound development and education. These media, which typically include FPS or other action games with a somewhat detailed depiction of violence, blood and gore, are listed by the Federal Department for Media Harmful to Young Persons (FDMY). This means they can only be sold to adults, cannot be publicly advertised, cannot be sold in stores where minor have access, and cannot be made available online unless the provider ensures that only adults are granted access. Finally, some games are altogether prohibited in Germany. This includes games sporting excessive levels of gore and violence, or displaying symbols of anti-constitutional organizations like the Nazi 159 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
swastika or the SS runes. These games cannot be advertised, imported, sold or made available online. Breaches of any of these content restrictions carry administrative fines, and in the case of youth-endangering or prohibited content, even criminal sanctions (see below for details).
ONLINE AGE RATINGS: FOUR DEGREES OF VOLUNTARY SELFCONTROL

While access restrictions apply to both offline and online content unsuitable for a particular age group, binding state-approved age ratings are currently only available for content distributed on physical data media. This excludes online games. It is the providers sole responsibility to evaluate its content and implement the appropriate youth protection measures risking fines or even criminal liability if the authorities take a different view. The new STYPM introduces a graduated range of age rating mechanisms for online content. Game providers can opt for the scheme that best reflects their individual flexibility and legal security needs. Age ratings are strictly voluntary for any online content, with one exception. If a game is distributed on a physical medium carrying an age rating, the same age rating must be displayed if the game is also distributed digitally. For any other online content, providers desiring an age rating may: 1. 2. 3. 4. rate their content according to their own standards rate their content using the rating standards of a recognized selfcontrol organization charge a self-control organization with age rating, or have a government authority approve the age rating established by a self-control organization.
The level of protection and the consequences of any mistakes (i.e. too generous rating of sensitive content) differ considerably. 160 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Table 2: Age rating options in Germany

(2) Provider (1) Provider rating using rating self-control standards (4) (3) Self-control Governmentorganization approved rating rating Authorities must involve with self-control organization, intervention against provider is second step only, no fines Yes
Authorities can intervene Authorities can Administrative & impose intervene, but control of age fines if ratings ratings no fines are inappropriate
Rating is legally binding, no intervention or fines
Can media be Yes listed?
Yes
No Unlikely, good legal defence arguments
Criminal liability
Yes
Yes
Yes
Specific rules apply for sections of a website including user-generated-content, like the forums and chat systems accompanying most MMO games. These areas can receive age ratings, but the provider must ensure that any content inappropriate for the relevant age group is immediately removed.
CONTROLLING ACCESS: INVISIBLE LABELS

Determining the appropriate age group for online content is only the first step. Content providers need to act on the age rating and take appropriate steps to keep out anyone too young to play. Currently methods for restricting access include age verification and blocking routines or disabling access to the content altogether between 6am and 10pm German time.
The new STYPM provides a new strategy to control access to restricted content. In the future, it will be sufficient to include invisible labels on websites that can be read by filter software installed on customer PCs. Unlike with traditional selective access procedures, the responsibility to use and correctly configure such filters will be with the parents and not with the game provider. The invisible content labels are based on a key-and-lock principle. Parents can set the youth protection filter software to a certain age level. Only websites that provide the right digital key can pass the filter and will be displayed.
YOUTH PROTECTION BREACHES

Breaches of youth protection law carry different sanctions and can have civil law consequences. It is a criminal offence to give children access to youth endangering content online or offline. The same applies to any distribution of prohibited material. Breaches of the access restriction requirements for agerated content carry administrative fines of up to EUR500,000. In addition, any breach of the rules is considered an act of unfair competition, allowing competitors and watchdog organisations to issue costly cease & desist letters or even court injunctions.
PRACTICAL CONSEQUENCES
Age ratings are voluntary under the law. However, the market might make them mandatory. Websites without age rating labels have a very high risk of being blocked out by client filtering software. To ensure highest range and visibility of websites targeted at young customers, it is therefore essential to have an age rating system. Game providers should seize this opportunity and review the design of their entire web offerings. If a page otherwise suitable for all ages contains one element of content unsuitable for children like an advertisement promoting the latest shooter game on a website the rating for the entire page will go up, hiding it from parts of its intended audience. 162 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
The revised STYPM provides for some quite complex mechanisms, and many details are still unclear.
SURPRISE DEVELOPMENT YESTERDAY STOPS JANU ARYS NEW ONLINE YOUTH PROTECTION LAWS IN GERMANY 169
December 17, 2010 | Konstantin Ewald This is a guest post from Konstantin Ewald, partner at Osborne Clarke, a law firm with a strong games practice. Games publishers operating in the German market do not now have to apply substantial new German Online Youth Protection laws, which were originally due to come into force in January 2011. In todays surprise development, the widely anticipated new laws hit a stumbling block in the German legislative process. The new laws would have resulted in widespread obligations for providers of online content regarding age verification and tagging of content for different age groups. These new laws are now on hold indefinitely.
WHY?
Germanys federal structure means the Prime Minister of every federal state and each state parliament have to give their approval to ratify the new laws. Although the new laws have already been ratified by every prime minister and all other parliaments, the state parliaments of North-Rhine-Westphalia and Schleswig-Holstein surprised everyone at the last minute by not approving the new laws. While North-Rhine-Westphalia denied its approval, Schleswig-Holstein removed the topic from todays agenda. This is a de facto denial as it was the parliaments last meeting of the year and the ratification process cannot now be completed within 2010 as required.
169
http://www.gamesbrief.com/2010/12/guest-post-surprise-developmentyesterday-stops-januarys-new-online-youth-protection-laws-in-germany/ 164 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
WHAT HAPPENS NEXT?

Games publishers must now wait and see how the federal states deal with these unexpected decisions. As the new laws finally failed and no alternative is currently on the stocks, the federal states will have to start intensive and time consuming discussions on new drafts. Even if the federal states can agree on a new treaty within a short amount of time, the adoption will again require ratification of every prime minister and every federal state. At the moment it is unclear how long this process will take and when a new treaty will be presented. We expect the principles of selfregulation and self-rating as described in our recent briefing note to remain 170 untouched by upcoming new drafts.
IMPLICATIONS FOR PUBLISHERS

With the rules unchanged, Games publishers will obviously have no legal obligation to change the way they publish on the web with regards the protection of minors. As the new laws would have resulted in even more extensive obligations and significant legal uncertainties, online publishers can be relieved for the moment. At the same time, however, they should not forget that the current legal situation already requires effective protective measurements for minors. These requirements have not been softened by the failure of the new regulation. Therefore publishers still have to choose between technical access limitations and broadcasting times to prevent minors from inappropriate content. As the new treaty could not present a workable technical solution for implementation of protective measurements, we hope that upcoming new drafts will contain better and more compromising proposals.
170
http://www.osborneclarke.com/publications/sectors/digitalbusiness/insight/2010/germany-reforms-online-youth-protectionrequirements.aspx 165 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
BOOKS
REVIEW OF THE BLACK SWAN BY NASSIM NICHOLAS TALEB 171

November 6, 2008 | Nicholas Lovell Could there be a better time to read The Black Swan, Nassim Nicholas Talebs 172 enjoyable discourse on probability and humanitys blindness to it? Its a book that teaches you how to avoid or even better, to profit from once-in-a-generation events. Like the credit crunch, the meltdown of the global financial system, toxic assets and US Secretary of State from Wall Street letting a bank that is too big to fail go to the wall.
FOOLED BY RANDOMNESS
The majority of this great book is devoted to explaining the source of blindness. Taleb argues that we are pre-programmed to see causal links where none exist because it was an evolutionary advantage. In our evolutionary past, we would confuse the two statements most killers are wild animals and most wild animals are killers, because, if we stopped to think to think about it, we would have been eaten by a lion. Evolutionary success means that snap judgements, faulty logic and tunnelling on sources of uncertainty and risk has been bred into all of us. Unfortunately, the world has evolved faster than us, into a globalised, interconnected community where hugely improbable events can have farreaching consequences. These events are what Taleb christens Black Swans.
THE WORLD IS FULL OF BLACK SWANS

A Black Swan is an event which is highly improbable (i.e. very rare), has an extreme impact and given our need for narrative causality, has retrospective (not prospective) causality. Taleb notes that a Black Swans very unpredictably
171
http://www.gamesbrief.com/2008/11/review-of-the-black-swan-by-nassimnicholas-taleb/ 172 http://amzn.to/hlhjEA 169 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
makes it paradoxically more likely. For example, if 9/11 had been predicted, society would have taken precautions (such as fitting locks on cockpit doors) that might have prevented the attacks. This is not to say all Black Swans can be prevented. If 9/11 had been averted, something else may have been taken place. What? I dont know. This is the heart of Talebs thesis. That the great human need for causality, narrative and meaning has led us to frame the world as a controllable, malleable model. Targets of his opprobrium include historians, experts (particularly in risk management) and particularly what he calls the Great Intellectual Fraud, the Gaussian distribution or Bell Curve. The Bell Curve is singled out because it fools us into believing that as an event or occurrence deviates further from the mean, the lower the likelihood of such an event or occurrence and the lower its impact. This is true for, for example, human heights, where a single Robert Wadlow measuring 811 does not appreciably change the mean, but not in human wealth, where the presence of a Bill Gates or Roman Abramovich changes the average substantially. Taleb argues that because humans like narrative and scientific methods and predictability, the Bell Curve blinds us to reality: it not only denies the significance of improbable events, if fools us into a false sense of security where we believe that they can, to all intents and purposes, be disregarded. The Black Swan was named from the observation that Old World naturalists were convinced that all swans were white following millions of observations of white swans; it took just one sighting of a black swan in Australia to convince them that they were wrong. One of Talebs most useful and illuminating recommendations is that if you have a theory (about anything), once you have made a handful of confirmatory observations, you should stop look for confirmation and start looking for disconfirmation instead. The logic being that observing another white swan after the first half dozen merely proves that some swans are white: you should instead be looking for a different colour swan to disprove your theory that all swans are white. Taleb convincingly shows that this trait of seeking evidence of what we already believe, rather than seeking counter-arguments, is a key culprit in the blinkered and restrictive vision that stops us from seeing risks and probabilities as they really are. 170 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
THE NARRATIVE FALLACY

Taleb also argues that the narrative fallacy, our vulnerability to overinterpretation and our predilection for compact stories over raw truths, contributes to our blindness. For example, consider the following two sentences and determine which you think is more likely: Joey seemed happily married. He killed his wife. Joey seemed happily married. He killed his wife to get her inheritance.
To most people, the second sentence seems to be more likely, to make more sense. And yet there have been many reasons why Joey killed his wife. By restricting the cause to only one, we have reduced the likelihood of it being true, while increasing our own perception of the likelihood. This narrative fallacy leads us to underestimate the likelihood of extremely unlikely events that do not have an obvious causal chain or fit our current view of the world. Historians are singled out because of their need to look for causality. Taleb does not write off the study of history, nor does he deny the value of it in understanding human civilization. But he argues strongly that history unfolded as it did because, well, it just did. A series of random events (wars, plagues, natural disasters or merely the failure of two people to meet in the street) interacted in a series of random ways. There is a causal chain, but only because we are here at the end of it. For Taleb, historians could argue endlessly over why the world was not destroyed in a thermonuclear war in the 1980s; he would argue that if the world had been destroyed, we wouldnt have been here to seek the causal chain, and that is probably due to a series of lucky happenstances.
HOW TO BENEFIT FROM THE BLACK SWAN

Having broadly set out why everything we think about probability is wrong and having argued that modern financial risk management, being Gaussian (i.e. based on the bell curve), is utterly unsuited for the realities of a world where the unpredictable happens every decade or so, the recent financial crisis being 171 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
a case in point, Taleb sets out his strategy for benefiting from the Black Swan. He starts by pointing out that not all Black Swans are negative: penicillin, the Internet, the Harry Potter books. These are all Black Swans. So Taleb seeks to maximise his exposure to positive Black Swans while minimising extreme negative risks. The clearest example of what Taleb would seek to avoid is being a lending bank: exposed on the upside only to a few percentage points of interest, but on the downside to the Black Swan of a global meltdown. This is the misnamed low or medium risk, because it is only low risk if you assume that Black Swans dont exist. But they do; its just impossible to model or predict them. Instead, he would put 80-85% of his investments (time or money) into the safest place possible, such as Government Bonds. The remainder would be put in the riskiest ventures possible: venture start-ups, biotech, mining stocks. Or for a writer, into maximising the chances of success, by networking, writing lots of books, putting proposals in for screenplays, plays, novels or whatever, because, as legendary screenwriter William Golding put it nobody knows anything about why a piece of popular entertainment becomes a hit. In other words, avoid the Bell Curve fraud of thinking that you are limiting risk by being in the middle of the road. Here you are maximising your exposure to negative Black Swans with limited upside. Instead, absolutely avoid risk wherever possible unless it carries the potential for a positive Black Swan. And be prepared to lose everything that you invest in pursuit of these positive outcomes. Which is why you should put the majority of your net worth into government bonds. There is one element throughout the book that grates, and grates hard. Taleb is smug to the point of wanting to biff him on the nose about having been a practitioner, not an academic. He was not a practitioner, he was a trader. He put his theories into practice alright, but in the rarefied atmosphere of hedge fund speculation and proprietary trading. He is dismissive of people who run successful businesses as being generally lucky. Having worked in the City and in real businesses myself (admittedly Internet start-ups, which are still not exactly real businesses), I would argue that running a business is being a 172 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
practitioner, whereas taking big bets on the basis of your probability theories is more ballsy than being a theorising academic but it is, at the end of the day, still closer to academia than reality. And to be fair to Taleb, his greatest praise for practitioners of uncertainty is reserved for the military, a class of thinkers that is rarely lauded by philosophers and yet seem to be the most comfortable with the idea that since so much of the world is unknowable, our job is to work out how to operate in a random world, not frame it in conceptual and inevitably flawed models. This is a timely book that explains why this unprecedented crisis was inevitable (it was just the where, when and what that could not be predicted). Black Swan is not only supremely relevant, if offers a new and practical way of looking at the world. *** You can buy The Black Swan from Amazon.com (http://amzn.to/gxP5Xr) and Amazon.co.uk (http://amzn.to/hlhjEA)
REVIEW OF THE BIG PICTURE, MONEY AND POWER IN HOLLYWOOD, BY EDWARD JAY EPSTEIN 173
April 15, 2009 | Nicholas Lovell The Big Picture: Money and Power in Hollywood is billed as the story of the 174 real magic behind movie making: how the studios make their money. It mostly succeeds, but if fails by being in thrall to the movies themselves, rather than the studios and conglomerates that make them.
GOOD IN PARTS
There are three core parts to the book: A fascinating insight into the power-structures, history and objectives of the six companies that dominate the movie business (described by Epstein as the Sexopoly) which demonstrates the myriad ways in which the movie studios ensure that they maximise their revenues at the expense of other partners. A description of the movie-making process from idea through greenlighting to pre-production, principal photography and postproduction that covers the same ground as (but without the wit of) William Goldmans seminal Adventures in the Screen Trade A concluding section that analyses the non-financial drivers of the movie industry (politics, power, self-esteem) while simultaneously predicting the rapid decrease in importance of movies to the business of Hollywood.
THE SEXOPOLY
173
http://www.gamesbrief.com/2009/04/review-of-the-big-picture-moneyand-power-in-hollywood-by-edward-jay-epstein/ 174 http://amzn.to/g5iyGs 174 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
I recommend this book highly for the Sexopoly, a biting analysis of the business of Disney, Paramount (Viacom), Warner Bros. (Time Warner), Fox (News Corporation), Sony and Universal (NBC Universal). Epstein is strong on the ways in which the opaque internal systems of the studios, referred by insiders as a financial blackbox and dubbed by Epstein the clearing house, exist to ensure that the studios retain the maximum amount of cash possible. For example, for the movie Gone in 60 Seconds star Nicolas Cage had a contract with Disney that entitled him to 10% of all video revenues. The distributor, Buena Vista, sold $198 million of videos and DVDs, suggesting that Cage was due $19.8 million. In fact, Disney was only paid the industry-standard video royalty of 20% from Buena Vista (despite Buena Vista being a 100%-owned subsidiary of Disney). According to Cages contract therefore, he was only due $3.9 million. This idea of internal transfers, black-box accounting and intentional opacity is the clearinghouse, and it is the secret of the success of major studios. In a lesson that games development studios should take to heart, Epstein quotes a character from a David Mamet play summing up what he learnt about Hollywood: there is no net. Or to put it another way, whoever pays the accountants, controls the net. Unless you pay the accountants, or are megastar-style powerful, you are likely to get the raw end of any deal. If you are more interested in the making of movies, Adventures in the Screen Trade is better and the third section, while interesting, lacks the precision and analysis of Epsteins unique insight into the financial makeup of the sexopoly. *** You can buy The Big Picture from Amazon.com http://amzn.to/hGFKVs and Amazon.co.uk (http://amzn.to/g5iyGs)
WHY OUTLIERS PISSES ME OFF 175

December 7, 2009 | Nicholas Lovell Malcolm Gladwells Outliers was one of the must-read books of 2008. The 177 178 latest oeuvre from the author of The Tipping Point and Blink , it took aim at celebrity biographies that claim to help us be more successful by following the inspiration of our heroes. And it pisses me off. The central thesis of the book that our environment and background play a large part in our success I completely subscribe to. But Gladwell goes one step further. In fact, he goes several steps further into the realms of predestination and fore-ordination. In some ways, this is an important book. For example, Gladwell argues persuasively that 50% of people in the world are discriminated against. And its not the 50% that you think. He means anyone born in the second half of the academic year. In Outliers, he puts forward compelling arguments that academic and sporting achievement is closely correlated with being born near the start of the academic year. Gladwell posits a theory that this is avoidable: teachers and parents start to identify and encourage bright or sporty children when they are as young as five. This is mistaken because the children born in the early part of the academic year may not be more talented than their younger classmates; they are just older. By the time the age difference evens out (say, by the time they are ten), the older children have had more praise, more attention and more access to facilities, cementing the discrimination forever.
176
175 176
http://www.gamesbrief.com/2009/12/why-outliers-pisses-me-off/ http://amzn.to/hAP0WG 177 http://amzn.to/i6rZdi 178 http://amzn.to/erKNjO 176 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
If this is true, its a travesty, and educationalists the world over should be working out what to do about it. But elsewhere in the book, this determinism becomes more pernicious. Gladwell argues that, for example, the ideal background to have to be a successful computer entrepreneur was to have been born in 1954-1955. And he lists all those successful entrepreneurs who were: Bill Gates, Paul Allen, Steve Ballmer, Eric Schmidt, Scott McNealy. He does the same for successful corporate lawyers in New York. The ideal background was to be Jewish, born in 1930 and to have parents in the garment trade. He produces a list of many such people who were partners in very successful law firms. I dont dispute Gladwells facts (although I question his methodology). I do dispute his conclusions. Perhaps you will permit an aside here. When I was at university, a theologian friend of mine first introduced me to the Christian doctrine of predestination. Broadly, God is omniscient, so your path through this life is known. This made me declare, in a teenage way, that if my every action was mapped out already, and I had no control over my life, my life has no point and I should just kill myself now. The Church, however, realised this was a problem and added a get-out clause: free will. God knows what youre going to do, but you still have to decide to do it. For me, the free will get-out clause isnt enough. I cant believe in predestination. And perhaps that explains why Outliers offends me so royally. Gladwell argues, over and over and over, with sufficient examples to feel compelling (but not statistical analysis), that our world-view is flawed.
Business leaders, sportsmen, academics. We cant learn anything from reading their stories except that their success was rooted in, nay inevitable due to, their backgrounds. Which is utter tosh. Those people worked hard. Other people, with similar backgrounds, didnt work hard and werent successful. Gladwell also argues that success is not about talent; its about opportunity. And I acknowledge the point that opportunity matters. I believe that civilized societies should work to give as many people as possible the opportunity to be successful. But then they have to work hard. And fail. And try again. They have to strive and struggle. To argue that they are merely products of circumstance is to belittle their achievements. And more than that, it is to dissuade another generation of entrepreneurs to strive and struggle themselves. Which is why it pisses me off. *** You can buy Outliers from Amazon.com (http://amzn.to/hwn7tn) and Amazon.co.uk (http://amzn.to/hAP0WG)
REVIEW: THE AMATEURISH CULT OF THE AMATEUR 179

October 26, 2010 | Nicholas Lovell The Cult of the Amateur is Andrew Keens polemic at the rise of content on the 180 web that is uncontrolled by traditional media companies . Halfway through it shifts from a reasoned defence of the status quo to a shrill, tabloid style attack on the Internet. Screaming Ban this sick filth" may get you tabloid support, but it is no way to argue about the future of media. I didnt enjoy reading The Cult of the Amateur by former Web entrepreneur turned digital anti-fanboy Andrew Keen. Maybe its because I am one of the digital utopians who Andrew derides. I confess it: I believe that the Internet will be as great a force for good within society as the steam engine and the printing press. Maybe its because Im not the target demographic. Its aimed at traditional media companies who want to feel reassured that Web 2.0 companies are evil, and that governments should step in to protect declining industries. But mainly its because halfway through, Andrews arguments about the dangers that amateur content poses to traditional media business models peter out. Instead, he rails against pornography, against online gambling, against social networks and against Internet addiction. I wonder if there is an Internet critics version of Godwins Law. maybe I should coin one:
181
If there isnt,
Lovells First Law of Internet Criticism: In any conversation about the role of the Internet in society, the likelihood of
179
http://www.gamesbrief.com/2010/10/review-the-amateurish-cult-of-theamateur/ 180 http://amzn.to/f6Wkdg 181 http://en.wikipedia.org/wiki/Godwin's_law 179 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
abandoning reason and by resorting to but we must protect the kids approaches one. Not that Im saying we shouldnt protect the children. Far from it. But this argument is equivalent to saying There were 2,671 children killed or seriously 182 injured on Britains roads in 2009. We should ban all cars. OK, its not quite the same, but I was expecting a shrewdly argued jeremiad, according to the New York Times. Instead I got the shrill ranting of a Daily Mail column. Which was, as you can imagine, disappointing. So does he have a point? Personally, I dont think so. Why not? Lets look at some of Andrews arguments.
THE INTERNET IS KILLING JOBS

Andrew rails against the way that people who make professional content are losing their jobs. At no point does he consider that it may, in fact, be that the Internet is making something that used to be difficult distribution easy. In other words, the Internet is putting content distributors out of work in the same way the combine harvester put sickle-wielding peasants out of work or the steam engine put wagon drivers into unemployment. Does anyone really believe this was bad for society in the long run?
THE INTERNET TELLS YOU WHAT YOU ALREADY KNOW

Andrew argues that Google is useless because: it just tells us what we already know. He never addresses the point that for all ordinary citizens to have access to what someone knows is an incredibly valuable outcome.
182
http://www.access-legal.co.uk/legal-news/road-safety-and-childpedestrians-lu-2864.htm 180 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
The inequitable distribution of knowledge used to be a very real problem. Only those who could afford $1,600 for an encyclopaedia had access to it. Now anyone can use Wikipedia. That spreading of knowledge is an amazing, wonderful thing. (And if you splutter that the expensive Encyclopaedia Britannica, written by experts and very expensive was somehow better, read 183 this peer-reviewed research that challenges that assumption).
THE INTERNET IS ALLOWING US TO CONSTRUCT OUR OWN VERSION OF THE TRUTH

This is true, but twas ever thus. Andrew quotes Marshall Poe writing in the September 2006 issue of the Atlantic "We tend to think of truth of something that resides in the world. The fact that two plus two equals four is written in the stars But Wikipedia suggests a different theory of truth The community decides that two plus two equals four the same way it decides what an apple: by consensus. Yes, that means that if the community changes its mind and decides that two plus two equals five then two plus two does equal five. The community doesnt have such an absurd or useless thing but it has the ability. This strikes me as being as being so wilfully blinkered as to be painful. I studied history at university. The thing that was drummed into us, over and again, was that we had to understand the bias of the sources. Everyone writes with a purpose. Everyone. They have an agenda (even if they are not aware of it). It might be private, it might be political, it might simply be to defend their worldview. But any historian knows (unlike Marshall Poe, who
183
http://news.bbc.co.uk/1/hi/technology/4530930.stm 181 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Im afraid I dont know, but that quote makes him sound like a simpleton) that truth is a variable quality, one that is usually determined by the victor. There is no such thing as objective truth. In the UK, if you read the Guardian, you get different truth than if you read the Telegraph. In the US, Fox News tells a different narrative of the truth from the New York Times. Unlike Andrew Keen and Marshall Poe, I believe that the Internet is a force for good because the truth is not determined by a small coterie of powerful media barons. If the erosion of that unelected power is a consequence of the cult of the amateur, bring it on.
KIDS ARE STUPID

Keen argues that we are all becoming credulous; that we believe anything we read on the Internet, even though it hasnt been edited and fact-checked. I believe the reverse. I believe that the Internet is training us not to believe what we read whether that be in the Internet, on paper or on TV screen. This is a good thing. For too long, we have believed whatever we were peddled. We believed something just because it was in a book. Well, David Icke has a book. Scientologists have books. New age quackery has books. The fact that it was in a physical book used to lend an air of authenticity to rumours, myth and speculation. If the Internet makes all of us think harder about what we read all the time that may use up some of our scarce time, but I dont care. It is a great thing for society.
AND THERES MORE

Andrew gives no credence to the idea that Web 2.0 tools can help great content rise to the top. He defends journalists as if they are paragons of virtue
not scurrilous, scaremongering, press release rehashers. many examples of both types in the world).
184
(Obviously there are
He defends the status quo of inefficient distribution, of self-appointed guardianship of truth, of protecting those few who make it past the barrier of obscurity and generate massive economic rents. I disagree with almost everything he says. But in the end, the thing that made me throw the book down in disgust was this quote, from a section on sexual predators and pornography on social networks: What concerns me are all the offenders out there who are undetected because they have never been convicted. Andrew Keen is a dystopian. So much so that he is prepared to throw out the presumption of innocence that has underpinned civilized society for centuries. In Keens worldview, we are all children. We need to be protected from raw views by the trusted, guiding hand of our elders and betters. We should be scared of innocent people because they havent been convicted yet. The Internet is full of new ideas, so wouldnt it be better if we didnt have to think, didnt have the opportunity to discuss. If we left the control of content in the hands of big business. I actually found myself getting angry while reading this book. Which I guess means The Cult of the Amateur is a good polemic. But if you want a balanced reasoning of how the Internet is changing society and media, in my view for the better, you will have to look elsewhere. *** You can buy The Cult of the Amateur from Amazon.com (http://amzn.to/eyHHnc) and Amazon.co.uk (http://amzn.to/f6Wkdg)
184
See Games cause rickets a thorough debunking on p. 135 183 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
THE LISTS
TOP TEN TURKEYS FROM THE NOUGHTIES

January 12, 2010 | Nicholas Lovell At the end of last year, we saw a lot of lists of best games of the decade. But we didnt read about the turkeys. The games that really flopped. The games industrys equivalent of Waterworld. Or Ishtar. Or Heavens Gate. Im not just talking about games that were bad. There are lots of those. Im talking about games that took down companies. Some of them were never released. Some of them came out and no-one cared. Some of them even made decent sales just nowhere near enough to cover the costs. And all of them were costly for someone. Several of them destroyed companies. Some destroyed careers. Others were, in my view, brave and sensible gambles that didnt pay off. So there is some schadenfreude in this list. But also a great deal of respect. Because you cant make great games without taking risks. (Hell, if Id finished this at the end of 2009, I could have written you cant have Christmas without turkeys. Does that work as a metaphor?) Anyway, here it is then. My top ten turkeys of the last decade.
MALICE, ARGONAUT, 2004

Argonaut was a poster child for Britsoft for 20 years. Founded in 1982 by a precociously young Jez San (who received an OBE for his services to the games industry in 2002), the company was best known in its early years for Starglider on the Atari ST/Amiga and Starfox on the Super NES. The company took VC money from Apax in 1996 and floated in 2000. The company then developed a reputation for working on character-based games: Croc, Harry Potter, Catwoman. 187 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
But it was Malice that caused Argonaut the biggest headache. Touted as one of the most impressive games on the Xbox prior to the launch of the console, it was used as a tech demo for the new platform and was due to be published 185 by Microsoft Game Studios. Then the bad news started. Gameplay redesigns. A switch of publisher to Vivendi Universal Games. A rumour that the game was going to be hold back for the launch of the unannounced Xbox 2. Then, in May 186 2003, Vivendi Universal Games canned it. Argonaut was a big developer by this stage (over 200 people, if memory serves). The Malice cancellation coincided with the canning of another project (Orchid) and commercial challenges over Catwoman. The writing was on the wall for one of Britsofts founding companies. Malice was eventually published by Mud Duck in North America and Evolved 187 Games in Europe to mediocre reviews. Two months later, Argonaut called in the receivers.
2: HELLGATE: LONDON, FLAGSHIP STUDIOS, 2007

Flagship Studios was founded in a blaze of publicity in 2003 when the team 188 behind Diablo quit Blizzard to go it alone. Their first (and only published) project was Hellgate: London. Set in a postapocalyptic London, the game was an action role-playing game not dissimilar to Diablo, but in 3D. The game launched in October 2007. It was a PC-only title and failed to live up to (admitted extremely high) expectations. As Bill Roper, CEO of Flagship Studios put it in an interview with PC Zone:
185 186
http://www.digitaltrends.com/gaming/malice-and-orchid-are-canned/ http://www.totalvideogames.com/Malice/news/Malice-Officially-Canned4074.html 187 See http://www.metacritic.com/game/xbox/malice 188 http://www.bluesnews.com/cgi-bin/articles.pl?show=686 188 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
we simply tried to do too much with the gameVista, DirectX 10, being both a single-player boxed product and a multiplayer online game, a simultaneous launch in seven languages across Europe, the US and South East Asia, and creating our own fully-featured online destination on top of 189 all that. He all but admitted that the game was released before it was ready in order to meet its committed release date of Halloween. A Metacritic score of 70 didnt set the world on fire. Flagship then had to go out and find new publishers for projects from a studio that had taken four and a half years to launch its first game (with a huge budget) on a single platform. A tough call. In the end, they couldnt. 1UP covers the whole story brilliantly in an interview 190 with Bill Roper. But a summary could read like this: A team from a hugely successful, well-funded company went independent and tried to build the best game they possibly could. It cost too much, had too big a scope and was full of bugs. They learned a lot but the process of learning was too expensive. Flagship Studios filed for bankruptcy in 2008.
3. MAJESTIC, ELECTRONIC ARTS, 2001

Majestic didnt deserve to be a turkey. And Electronic Arts doesnt deserve to be pilloried for it. But a much hyped game that lost Electronic Arts between $5 and $7 million died on its arse.
189 190
http://www.computerandvideogames.com/article.php?id=183206 http://www.1up.com/do/feature?pager.offset=0&cId=3169356 189 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
The game was innovative, alright. An Alternate Reality Game (ARG), Majestic didnt take place on a single platform. Instead, the game was a conspiracy theory played out across multiple media including special websites, instant messenger, phone and email. Players were drawn into a science fiction thriller and EA was going after the War of the Worlds thing, referencing Orson Welles famous radio version of War of the Worlds that caused some listeners to believe it was real. The game wasnt helped by 9/11. Since it involved players being drawn into a web of conspiracy that could be confused with potential terrorist action, EA suspended the game temporarily after the attacks. But the real problem was that although the game was critically praised, players 191 wouldnt pay for it. 800,000 people started to register for the game, but only 192 71,000 completed the registration. That number fell to 15,000 who were actually prepared to pay for it, paying either $9.95 a month or, later, a flat fee of $40 for a retail copy with unlimited online play. As a CNN headline on Majestics demise put it: PC gamers demand something different, then promptly reject it.
4: TOMB RAIDER: ANGEL OF DARKNESS, CORE DESIGN, 2003

Angel of Darkness marked the point at which Eidos demise as an independent publisher became inevitable. Ever since Lara Craft burst onto our screens in 1996, she had been the darling of the media. And the stock market. It seemed as if whenever Eidos share price wobbled, all the company had to do was announce a new Tomb Raider and the stock would surge. But there came a point when relying on a tired franchise, poorly executed, would no longer rescue them. And that point was with Angel of Darkness.
191 192
http://www.gamecriticsawards.com/2001winners.html http://money.cnn.com/2001/12/19/technology/column_gaming/ 190 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
The game was released in 2003 to poor reviews. Metacritic has an average 193 score of 52. GameSpys review read Paying $50 for a bad game sucks. 194 Paying $50 for an unfinished bad game sucks even more. The game shipped on 30 June 2003, the last day of Eidos financial year. If the company released the game on that day, it could recognise the initial orders as revenue in the 2002/03 financial year. If it failed, then it would not meet its financial targets for the year. So the game was released and critically panned. Over the next two years, Eidos finances became progressively worse until eventually a bitter takeover battle led to acquisition by SCi and the departure of most of the management responsible for Angel of Darkness. Core Design was sold to Rebellion and Crystal Dynamics took over development duties for Tomb Raider: Legend. Eidos never fully recovered and was acquired for 84.3 million by Square Enix in February 2009.
5. DAIKATANA, ION STORM

John Romeros Ion Storm started with a bang. Founded in a blaze of publicity in 1996, the companys slogan was Design is Law. Daikatana was originally planned to be released in time for Christmas 1997. It was based on the Quake engine, and early advertising consisted of a blood red poster with the words John Romero is about to make you his bitch. But when id Software showcased the much-improved Quake II engine, Ion Storm realised that it would need to upgrade. The switchover, and a range of design challenges, led to delay after delay. Daikatana was finally released in June 2000, over two and a half years late.
193
http://www.metacritic.com/games/platforms/ps2/tombraidertheangelofdar kness 194 http://uk.ps2.gamespy.com/playstation-2/tomb-raider-the-angel-ofdarkness/5982p1.html 191 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Gamers werent convinced the wait was worth it. A buggy game with sidekicks (touted as an innovation) who more often caused you hindrance than helped 195 and uninspiring enemies achieved an average rating of 53. By this time, Eidos is believed to have invested over $25 million in the studio. And they called it a day. Eidos closed the Dallas Ion Storm office in 2001. The full story is covered brilliantly in Masters of Doom: How Two Guys Created an Empire and Transformed Pop Culture by David Kushner, which I highly 196 recommend.
6: TABULA RASA, NCSOFT, 2007

It pains me to include this title because Richard Garriott is a personal hero of mine. The Ultima series of games from Origin Systems were the seminal games of my childhood and Ultima Online is one of the only MMOs I have ever become immersed in. Electronic Arts acquired Origin Systems in 1992. The relationship between Richard Garriott and the corporate structure at EA was not a happy one (see Brad King and John Borlands Dungeons and Dreamers for a great insight into Origin/EA, as well as the early days of id Software.) In March 2000, Richard 197 quit. He founded Destination Games, which partnered with NCsoft to launch new massively multiplayer games. Richard helped out on City of Heroes & City of Villains but, in 2007, Tabula Rasa was the first game released by his new company. Tabula rasa means clean slate in Latin, a fresh start for the man who was instrumental in the creation of the RPG genre and then the MMO genre. And Tabula Rasa was nothing if not ambitious.
195
http://www.gamerankings.com/pc/197031-john-romerosdaikatana/index.html 196 http://amzn.to/eZBxxK 197 http://amzn.to/eRS9PL 192 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
A new and innovative combat system. Cutting-edge graphics. Even a brand new 198 language. The game cost an estimated $69 million of NCsofts money. And the gamble didnt pay off. Tabula Rasa did OK. Not spectacularly, not terribly. But it had cost a lot a make and, like all MMOs, had substantial ongoing costs. NCsoft took only fifteen 199 months to declare the Tabula Rasa experiment over and close the game. At least 120 people were made redundant from NCsoft, and the entire Western 200 operation was re-organised. Richard and NCsoft remain in dispute over his allegedly forced departure from 201 the company. And it all makes me very sad.
7: HAZE, FREE RADICAL/UBISOFT, 2008

Free Radical had a very strong pedigree. The core team worked at Rare on classic N64 titles like GoldenEye and Perfect Dark. Then they founded Free Radical and developed Timesplitters. Things were looking good for the Nottingham-based developers when Ubisoft commissioned them to develop Haze, a first-person shooter set in a world 202 where the army pumps its soldiers full of narcotics to help them fight better. The game was first announced at E3 in 2006. It was to be a multi-platform release (PlayStation 3, Xbox 360, PC) in summer 2007. It was not to be.
198 199
http://www.koreatimes.co.kr/www/news/tech/2010/01/129_34883.html http://www.massively.com/2008/12/01/ncsoft-clarifies-its-rationale-forclosing-tabula-rasa/ 200 http://www.gamesbrief.com/joblosstracker/?victim=35 201 http://www.gamepolitics.com/2009/05/06/richard-garriott-sues-nc-softover-millions-stock-options 202 http://amzn.to/gyGftW 193 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
The game slipped to winter 2007. The 360 and PC skus were dropped. The game was eventually released 12 months late in May 2008 to mixed reviews 203 (Metacritic average: 55. ) Reviewers acknowledged the ambition of Free Radicals design, but it was let down by glitchy graphics, shallow characters and weak story. Six months later, Free Radical filed for administration with the loss of 140 jobs. Crytek, the German developer, acquired the rump of Free Radical and renamed 204 it Crytek UK. After the acquisition, Karl Hilton, now managing director of Crytek UK, blamed 205 the complexity of the PS3 for Hazes shortcomings. Whatever the reason, Haze was the last title that Free Radical developed.
8: DRAGON EMPIRES, CODEMASTERS, NEVER

It seems a bit challenging to put a game in this list when it never saw the light of day. But Dragon Empires was the game that brought Codemasters to its knees, and ultimately saw the end of the involvement of Codies founders the Darling brothers. Dragon Empires was incredibly ambitious with high-quality graphics in a massively-multiplayer online game consisting of player versus player clan action across 100 lands spread over 5 empires. The title was announced in 206 September 2001 with a release date of Q2 2002. The date slipped.
203 204
http://www.metacritic.com/games/platforms/ps3/haze?q=haze http://www.gamesbrief.com/2009/01/140-jobs-go-at-free-radical/ 205 http://www.develop-online.net/news/32590/PS3-technical-issueshampered-Haze-development 206 http://www.gamezone.com/news/09_20_01_01_46PM.htm 194 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Codemasters showed prototype code at E3 2003, with a release date of September that year. Then spring 2004. Finally, in September 2004, Codemasters announced the end of the project. Codemasters development director Gary Dunn said: Unexpected obstacles with the server code, in particular our ability to serve clients at a scale which would have 207 permitted us to launch the game as an MMO. Because of the delays, Codemasters undertook a six-week review of the viability of the project; ultimately, it was decided that it would take too much time and cost too much money to fix the problems. Its hard to estimate how much Dragon Empires cost. But a full team for 4-5 years does not come cheap. Balderton Capital bought a 40% equity stake in the company in 2005. By June 2007, Balderton had acquired 100% of the company, ending the Darlings 208 involvement in the company they founded in 1986.
9: ENTER THE MATRIX, SHINY/ATARI, 2003

Can a game that sold five million units really be a turkey? If it still doesnt make money, it can. Enter the Matrix was designed to integrate with The Matrix Reloaded, the second movie in the Matrix trilogy. Both game and movie suffered from a disjointed plotline that required viewers/players to participate in both to make sense of the story.
209
207 208
http://www.rpgamer.com/news/Q3-2004/090704b.html http://www.gamesindustry.biz/articles/darlings-sell-codemasters 209 http://www.gamesindustry.biz/articles/atari-full-year-revenues-fall-despiteenter-the-matrix-success 195 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Reviews werent great (Metacritic: 62) and despite Enter the Matrixs sales figures, Atari still reported a thumping great loss of $38.6 million in the financial year to March 31 2004 (or a profit of $766,000 if you include a one-off dividend the company received.) Tellingly, Atari did not renew its option to make two further games based on the Matrix franchise. While its possible that Atari simply didnt have the cash resources to make further AAA titles, its also possible that the licence terms were so onerous that the company didnt make a profit even on a title that sold five million units. And given the critical battering that the films and the game received, perhaps it was a wise decision. Either way, Atari founder Bruno Bonnell was forced out as CEO in November 210 2004. Atari has been in almost-permanent restructuring ever since, with five 211 chief executives in the last five years. And while Enter the Matrix is not entirely to blame, it is symptomatic of the whole sorry saga.
10: DUKE NUKEM FOREVER, 3D REALMS/TAKE 2, NEVER

Could any list of turkeys omit Duke Nukem Forever? Duke Nukem Forever has been in development since 1997. Originally announced as a sequel to the 1996 title Duke Nukem 3D, endless slipped released dates led developer 3D Realms to announce in 2001 that it would be released when its done. Duke Nukem has seen multiple engines (Apogees in-house Build, id Softwares Quake II, Epics Unreal, then further in-house adjustments), several publishers (GT Interactive, Gathering of Developers, Take Two Interactive) and endless
210 211
http://uk.gamespot.com/news/6157072.html Bruno Bonnell was actually the founder of French company Infogrames which merged with Atari and rebranded. 196 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
new features and ideas. 3D Realms has claimed that it has invested over $20 212 million of its own money in the title, over and above any publisher advances. Its hard to give the ins and outs of Duke Nukems decade of development hell in a short space. Wikipedia makes a decent fist of it so I would recommend you 213 check that out if youre interested. But the end game is that after a decade of teasers and trailers, Duke Nukem Forever officially became vapourware. Take Two announced that it owned the 214 rights to Duke Nukem Forever but that it would not fund it , and 3D Realms 215 laid off almost all of its staff in May 2009. Duke Nukem Forever may hold the record for the longest development schedule of any game in history. It may be some time before anyone challenges that record. *** Thats it. The top ten turkeys of the Noughties. Are they any you disagree with? Any others that should be in here? Should I have squeezed Ubisofts Avatar tiein into the list at the last minute? Let me know your thoughts.
212
http://ve3d.ign.com/articles/news/48496/3DR-Spent-20m-On-DNF-DeniesAllegations-Reveals-New-Duke-Game 213 http://en.wikipedia.org/wiki/Duke_nukem_forever 214 http://news.bbc.co.uk/1/hi/technology/8037688.stm 215 http://www.gamesbrief.com/2009/05/3d-realms-shuts-down-duke-nukemstatus-unclear/ 197 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
TEN GAMES BUSINESSES THAT ARE DOOMED 216

October 6, 2010 | Nicholas Lovell When I wrote my post-mortem of RealTime Worlds, brave.
217
some people called me
I thought I was cowardly, given that I only expressed my concerns after the company went into administration. And its very easy to carp with hindsight. I did say that APB risked being an epic fail a year ago, but I very much hedged my 218 bets. So Im going to stick my neck out. Im going to name ten games businesses or projects that I think are in trouble without some radical changes. Not all of these will fail: Ill be wrong about some; others will change course. What I am saying is that I have concerns about the strategy, opportunity or market for these companies. I have not had access to any of these companies. If anyone wants to set me straight on any facts I have got wrong, do feel free to get in touch. And if you disagree with any names, or think Ive left out some important ones, let me know in the comments.
1. CODEMASTERS
Codemasters is riding high on the strength of a UK #1 in F1 2010 , but I feel that on a global stage it is a low-ranking games publisher that has lost its way.
219
216
http://www.gamesbrief.com/2010/10/ten-games-businesse-that-aredoomed/ 217 See the entire chapter devoted to the demise of RealTime Worlds in Volume 2 218 As above, or http://www.gamesbrief.com/2009/06/dave-jones-apbmassive-success-or-an-epic-fail/ 219 http://www.mcvuk.com/news/41070/UK-CHARTS-F1-takes-pole-position 198 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
The company has a successful racing studio, is a provider of publishing services to MMOs owned by other people and operates a casual games portal. It is not a global leader in any of these areas, and will continue to be squeezed from all sides. I believe that this current industry transition from boxed products to services will make it impossible for a boxed product publisher without a strong portfolio of AAA games to survive. I dont believe that Codemasters has that portfolio, and it will struggle to adapt fast enough. It ought to identify what it is good at, and do that really well. Im not sure thats what Im seeing.
2. MINICLIP
Miniclip used to be the darling of investment bankers everywhere. I never had a meeting with one where they didnt mention this company with awe. Unfortunately, at just the moment that Miniclips arrogance peaked, the market transformed around them. Miniclip was one of the most successful online games portals in the world. The company was instrumental in the early success of Club Penguin and Runescape and deeply resentful that they didnt share in the rewards when those companies were acquired or invested in. I even heard (although this is uncorroborated) that Miniclip was asking for equity stakes in companies whose games they distributed, so bitter were they in their belief that Miniclip was the fundamental reason for the success of those browser-based games.. Miniclip showed shockingly poor timing these increasingly aggressive negotiations started just as two things emerged that jeopardised its very future: Facebook as a rival form of distribution and virtual goods as a better
type of revenue than advertising. (You can read more on my views on portals in 220 The Death of the Portal. ) Im not sure that Miniclip is doomed, but I think that its glory days are behind it. The era when a portal with many users and an advertising sales force could dictate terms to developers is gone. Miniclip will probably survive, but the likelihood of an exit for hundreds of millions of dollars is vanishingly small.
3. MILO 221
OK, this one is now a no-brainer, since they cancelled him last week. But my notes for this post (which has been in gestation for several months) read: Pointless Overblown Unlikely to see commercial release
222
In some ways, I think this is a shame. Milo is closer to scientific research than game development: he was about doing something just to see if it could be done, not because it made any logical sense. The games industry has lost that spark, that desire just to do something to see if it could be done, that can-do attitude that spawned Asteroids and Doom and iShoot. On the other hand, I think Milo made no sense. He was an over-promise to consumers, he was a distraction from Kinect and, in the near term, a gaming dead-end.
220
See Volume 3, under Distribution, or http://www.gamesbrief.com/2010/07/the-death-of-the-portal/ 221 Milo was a technology demo for Microsofts Kinect device, showcasing an artificial intelligence 12 year old boy who was intelligent and responded to your actions and words. The whole project was a little creepy. 222 http://www.eurogamer.net/articles/2010-09-23-rumour-project-milocancelled 200 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
I dont think hell be missed.
4. VIRGIN GAMING
I saw the announcement about the launch of Virgin Gaming and thought to myself not again. When will investors learn that betting on yourself in a video game is nothing like tournament poker or a friendly wager on a game of golf? Gaming is so dependent on skill that betting on yourself is, frankly, stupid, unless you are one of a handful of top players in the world. Every time a new one of these pops up, I quote Tom Jubert writing in the GameShadow blog: Gambling works because its based on luck. No matter how aware of the growing hole in our pockets, we keep playing because were addicted. Were addicted to the chance we might win big with the next set of cards. In an FPS, as some investors may not realise, success is heavily based on skill. That means if youre a loser, youre a loser theres no chance of ever making it big. As a result, the weaker players dont bother, while the stronger have no 223 one to compete against. And its not as if there havent been others: Tournament.com: went bust in November 2007 224 Kwari: went bust in June 2008 Prizefight: disappeared
223 224
http://blog.gameshadow.com/?p=62 http://www.gamesbrief.com/2008/06/is-kwaris-demise-the-nail-in-thecoffin-for-skill-based-shooters/ 201 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Titan Gaming: raised $1m in May 2010, although I remain sceptical about their prospects.
Why do these businesses keep getting funding? As I said in my post on the Titan funding, I think its because the majority of investors are alpha males, who believe that everyone wants to back their skill with cash (which is, after all, 225 the primary job of an investor). I just think that theyre wrong.
5. TRION WORLDS
Dear Lars Buttler, senior management and investors in Trion, I applaud your ambition. Your desire to revolutionize the way connected games are designed, developed, and delivered is wide-ranging and farreaching. Unfortunately, while you were busy investing $100 million in your revolution , a bunch of other people went and revolutionised the way online games are designed, developed and delivered. And its not in the way that you expected. Jagex made Runescape a game with ten million users and a million 227 subscribers in a browser. Unity democratised the development of browser games. Bigpoint proved that you could generate revenues of tens of millions of Euros or more from a business based around free-to-play and virtual goods.
226
225
http://www.gamesbrief.com/2010/05/more-alpha-male-investors-throwmoney-after-tournament-gaming/ 226 http://www.develop-online.net/features/1000/MMO-money-MMOproblems 227 http://www.gamesbrief.com/2010/04/free-doesnt-work-try-telling-that-tojagex-making-38m-from-one-free-game-runescape/ 202 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Meanwhile, RealTime Worlds proved that an ambitious MMO based on an 228 understanding of the games world anchored in 2005 doesnt work. I may be wrong about you. You may have fully understood the changing dynamics of online gaming, learned the lessons of RTWs demise and Dungeon 229 & Dragons Onlines Damascene conversion to free-to-play. You may have a game that combines a World of Warcraft killer with a Runescape killer. But I fear, like a First World War general, you are fighting the battles of a previous century. And you are about to get bogged down in the Somme. Im sorry. Love and kisses, Nicholas
6. ONLIVE
Is this cheating? The failure of OnLive seems so inevitable it seems lazy to include it in this list. The company is trying to create a subscription service to access product-style games. Just as the market is changing to have fewer AAA titles, OnLive wants to charge us to have access to its service, and then to buy the games. (UPDATE: Since I first drafted this, OnLive announced it was 230 dropping the subscription charge. I think this is a good move, but I imagine it blows a hole in their financial projections.) As I argued in April 2009 , OnLive needs to gather all of the most-have content into its service in order to be competitive. That means getting EA and Activision and Square Enix and Disney and Warners content into their system. (Getting Sony and Microsofts content is a whole different ballgame).
231
228 229
See The Demise of RealTime Worlds in Volume 2 See http://www.tentonhammer.com/node/82128 on Dungeons & Dragons Online 230 http://www.next-gen.biz/news/onlive-game-service-to-remain-free 231 See OnLive has only 2 potential customers: Microsoft and Sony on p. 33 203 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Then they have to persuade legions of core gamers to drop their fanboy console allegiances and switch en masse to a subscription service. And it has to make them ignore the risk that if OnLive goes bust, all of their games disappear. And they have to do all of this when new business models free-to-play games, games as a service, microtransactions are coming to the fore. So far, I dont think its been going well. OnLive has dropped a core revenue 232 233 stream. Its had to give up equity in order to secure distribution in the UK. 234 Its struggled to convince sceptical pundits. Meanwhile Gaikai, with its lean startup approach and less-grandiose claims seems to be making progress with a business model that is flexible, scalable 235 and doesnt require retail distribution. A year ago, I said that OnLive only had two potential acquirers: Sony and Microsoft. If I were the investors in OnLive, I would be hustling for the door.
7. CCP
CCP are the Icelandic developers of Eve Online, the mind-bogglingly intensive MMO set in space. It has committed fans, a strong revenue stream and has been running Eve successfully since 2003. How can I possibly think the company is doomed? Well, to be truthful, I dont think it is. I think it has a perfectly good future as a lifestyle business (I dont think its sellable though thats a topic for another post).
232 233
http://blog.onlive.com/2010/10/04/onlive-just-play-for-free/ http://bit.ly/eHqoyv 234 http://arstechnica.com/gaming/news/2010/01/onlive-demoed-lag-graphicsare-a-problem.ars 235 http://www.eurogamer.net/articles/gaikai-cloud-computing-gameplay-thatworks-blog-entry 204 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
But Dust 514, on the other hand, theres a product thats doomed.
236
I used to be an investment banker and one of the first rules drummed into me was this: If you are going to advise someone to make an acquisition, suggest buying a business they understand in a new country, or a new type of business in their own country: buying into a new sector in a new country is a recipe for disaster. The people at CCP are experts at building a free-form space game with a subscription model on the open architecture of the web. Dust 514 is a first-person shooter. On a console. With a never-done before connection between a console world and a PC MMO. Its wildly ambitious but also, in my view, totally pointless. The integration between the console game and the PC-based MMO will be as unnecessary and expensive as the film maker in The Movies or the customisation features of APB. It will be hugely difficult to implement, actually subtract from the gameplay experience and cause CCP endless headaches. I was terrified when I saw the presentation of the game at a conference earlier this year. Every fibre of my being screams that CCP is over-reaching wildly. I hope that Im wrong.
8. 38 STUDIOS
Is it cynical of me to say that the main reason Ive put 38 Studios in this list is *because* the Rhode Island Board of Economic Development has approved a 237 $75 million loan to the company?
236
http://www.ccpgames.com/en/products/dust-514.aspx 205 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Regular readers will know that I believe that governments should not be giving 238 tax breaks to risky commercial enterprises such as game developers. They certainly shouldnt be giving them to business investing in highly-speculative, unlikely-to-succeed activities like creating a World-of-Warcraft-beating MMO. To compound my scepticism, 38 Studios is the baby of Curt Schilling, a 239 celebrated Red Sox baseball player. Could the kudos of rubbing shoulders with a famous sportsman have influenced the Rhode Island bureaucrats? (To be fair to Mr Schilling, he is clearly a committed MMO player who loves the market; I nevertheless fear that, like Trion above, 38 Studios is pursuing an old model, with taxpayers money). In the end, launching a new MMO is a massive bet. Im pretty safe in betting that it will fail. A very few new MMOs succeed massively (only World of Warcraft leaps to mind). A few fail spectacularly (Tabula Rasa, APB). Others just drift along (Age of Conan, Champions Online, Star Trek Online). The odds of being a success in launching a traditional MMO are stacked against you. Far more likely is that you will lose your shirt. Even a jersey as celebrated as that worn by Mr Schilling.
9. GAME
Picking on a retailer seems a bit mean. Its like finding a fat kid lying in the dirt, having been pushed over by the cool kids, and kicking them. Just because you can. But I believe that there might be a future for a dedicated games retailer. They just need to look very different from how they look now.
237
http://www.projo.com/news/content/38_Studios_vote__07-2710_JIJB71G_v18.3dd3796.html 238 See Video game tax breaks: Short term gain for long term pain? on p. 110 239 http://en.wikipedia.org/wiki/Curt_Schilling 206 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
The challenge facing games retailers is simple: in the future, there will be fewer products for them to sell. Games are going increasingly online (and mainly as services, not as digital downloads). There are fewer AAA releases and many fewer single-A releases. Console cycles are lengthening. The primary reason for a specialist games company to exist to sell games is disappearing. There is a silver lining. For some time to come there will be physical consoles and devices to connect humans to television screens. These need a retailer. There will be AAA blockbusters, and they need a place to showcase their product. There will be some people who prefer to pay for online content by going to a store and handing over cash rather than using a credit card online. But to succeed in this era requires reinvention. It requires making stores into appealing destinations in their own right (much like the need to reinvent the physical cinema in the 80s and 90s). It requires a mentality shift from being product-centric to being customer-centric. And it requires the rapid shedding of many stores and staff, because there is no way to sustain a shop (or two) on every High Street. It is not yet game over for GAME and other specialist retailers. But they only have one life left.
10. CALL OF DUTY SUBSCRIPTIONS

Bobby Kotick was asked by the Wall Street Journal what one thing he would change about his company if he could snap his fingers and make it happen. His answer: I would have Call of Duty be an online subscription service 240 tomorrow.
240
http://online.wsj.com/article/SB10001424052748703509404575301231400 042578.html 207 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
I can see why. World of Warcraft is a subscription service and is generating a billion dollars a year. I can see why Activision would like to build the same with Call of Duty. Of course, they are very different beasts. World of Warcraft offers a myriad of play styles from crafting to guild membership, from exploring to raids. The flexibility of a first person shooter is, frankly, much lower. We saw what happened when RealTime Worlds tried to turn Counterstrike into an MMO. We saw what happened when Richard Garriott tried to build a new 241 approach to MMO fighting with Tabula Rasa. Converting Call of Duty into an online game sounds very tough to me. There is one massive caveat here: Im talking about the Western world. I think that there is potential to offer Call of Duty with a totally different model in China and other territories where piracy is dominant. So Im not saying that there wont be a Call of Duty Online service anywhere in the world. I just dont think it will be successful in the West.
241
See Top Ten Turkeys from the Noughties on p. 182 208 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
WHY I WROTE DOOMED 242
TEN
GAMES
BUSINESSES
THAT
ARE
October 11, 2010 | Nicholas Lovell Last week, I wrote a post called Ten games businesses that are doomed. It was very popular (90 retweets and rising; it has already made the Top 5 most popular posts on GAMESbrief ever). It was republished on Kotaku where it 243 spawned over 500 comments. It also attracted some flak. Not from the companies, but from people who thought either that this article should not have been written, or that it should not have been republished on Kotaku, or that my motives were, well, suspect. Alec Meer, in particular, wrote 244 this polemic against my post on Rock, Paper, Shotgun. So I thought I would explain why I wrote it. Like the original list, these reasons are not ranked.
1. BECAUSE I NEEDED TO WRITE IT

When I stopped being an investment banker, I promised myself that I would stop telling people what I thought they wanted to hear, rather than what I really thought. I was actually pretty good at second-guessing how to massage the egos of CEOs (which is an important part of winning mandates), but after a while, it becomes very tiring.
242
http://www.gamesbrief.com/2010/10/why-i-wrote-ten-games-businessesthat-are-doomed-2/ 243 http://kotaku.com/5657970/10-games-businesses-that-are-doomed 244 http://www.rockpapershotgun.com/2010/10/08/cheer-up-that-doomedgames-list/ 209 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Not least because you have to spend your time remembering not what you thought about an acquisition, but what you said you thought about an acquisition. Since 2008, I have just told the truth. And its been very, very refreshing. Ive been able to express my views openly. Ive got more new clients. I dont have to try to remember what I said. Ive been able to say what I really think. Every one of the businesses or projects on this list is something that when I saw it, or read about it, or have been asked about it, I thought there are big flashing alarm bells over their heads. I had a little list I was keeping of projects or companies that worry me. Many of these companies particularly worried me because so many of them were getting extensive and uncritical press coverage because they were well-funded, or ambitious, or had good heritage. Just like RealTime Worlds.
245
After a while, that list wormed its way into my brain until I just had to write it up.
2. TRAFFIC
I would be lying if I said I wasnt interested in the traffic. Of course I am. I write a blog. However, my stock-in-trade, the one thing that people read GAMESbrief for (and hire me as a consultant, which is one of the main ways I pay my bills) is to provide analysis. Hit-chasing with shoddy analysis does me no long term favours; quite the reverse. Michael French of Develop tweeted:
245
See The Demise of RealTime Worlds in Volume 2. 210 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Perhaps the big thing for me is that whereas the best 10 flops from Jan was full of detail, the 10 biz ones isnt. I accept that criticism. One of the reasons that my post lacked detail is because there are no details when being forward-looking, only estimates, opinions and guesses. I hope to rectify some of that over the next few weeks by writing some more in-depth analysis of the companies in that list. I confess that traffic was in my mind when I wrote the post. But it wasnt at the forefront because chasing traffic at the expense of reputation would be a very short-sighted strategy for me.
3. BECAUSE ITS HOW INVESTORS THINK

One of the things that few people outside the City or Wall Street understand is that investors dont care about what just happened. They care about what is going to happen. (This is particularly true for investors in publicly-listed companies, but is still relevant across the full range of public and private investors.) I have lost count of the number of times games executives at publicly-listed companies have said to me: I dont understand it: we announced our revenues were up 10%, profits up 20% and the share price fell. What do they want? Blood? (To be fair, this is usually not the very top tier of management). This is what I always answer: What you did versus last year is irrelevant. What matters is how you are doing against what the market expected. The market expected your revenues to be 211 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
up 20% and profits up 40%; they had already priced that expectation into your share price. When you missed your forecasts, they punished the share price. At this point, the executive says: But we never forecast a 40% increase in profits And I say: No, you didnt. But the market did, and you didnt do a good enough job of managing expectations. Now you are paying the price by seeing your share price fall. The executive leaves shaking his head at how the market is foolish, and I find myself staggered how little many executives understand how the stock market works. So why does that matter here: because investors are being fed the wrong expectations. Breathless reports about the imminent prospects of massive success at these companies in the specialist or the generalist press excited by the groundbreaking nature of the games or the fact the companies have raised oodles of money respectively give investors the perception that these businesses are guaranteed sure-fire hits. So when the company fails, with no-one pointing out the risks in advance, the investment community are horrified. Because investors hate surprises.
4. BECAUSE *NOT* TALKING ABOUT THESE POTENTIAL FAILURES IN ADVANCE IS BAD FOR THE ENTIRE INDUSTRY
This, for me, was the clincher. This was why I took a deep breath and pressed Publish even though I was very scared. Big failures that are not predicted will frighten vast swathes of investors away from the industry. 212 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
I watched Dave Jones keynote at the Game Horizon Conference in 2009 and 246 thought the project was doomed (although I was too chicken to say so). A game designer whom I was sitting next to (and whose views I respect enormously) said: We all know its not a matter of if this fails, its a matter of when. Dont we? I agreed, and did nothing. The industry did nothing. Investors put a further $21 million in to a project many of us thought doomed. And we did nothing. (To be fair, I have it on very good authority that the specific investors in RealTime Worlds not only they knew the risks they were taking, they were comfortable with them. Many investors take a portfolio approach to their investments and these investors encouraged RTW to bet the farm, knowing that the company would either hit it out of the park or fail.) Across that list of ten game businesses that I posted, there are many that I think will fail. If they do I dont want investors to put a big black line through the games industry on their list of interesting investment sectors. I want them to go Oh well, that company was doomed a while back. We were expecting that failure; it doesnt mean we want to pull back from investing in games. In short, by making investors aware of the risks in games and the companies or projects that my gut, experience, insight and analysis tell me are in danger, I hope that I improve the prospects of the entire games industry.
SOME MEA CULPAS

OK, those were some good reasons that I wrote the post. Time to admit to some less honourable points.
246
See Dave Jones APB: massive success or an epic fail in Volume 2. 213 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
I USED THE EMOTIVE WORD DOOMED I did. And you clicked on it. If Id said Ten Games Businesses that need to revaluate their strategy or Ten games businesses that might face challenges in the future, many fewer people would have clicked. That was traffic chasing. But I wanted people to read my blog post. And it worked. I DESCRIBED THEM AS GAMES BUSINESSES Milo isnt a business. Nor is Dust. Nor is a Call of Duty subscription model. I toyed with calling it Ten games projects that are doomed, or Ten games things that are doomed. But I write about the business of games. So I took a simple shortcut. It was a little misleading, but the best word I could come up with to capture everything I wanted to talk about. I PUT CODEMASTERS AT #1 The list wasnt ranked, but I numbered it. That was for ease of reference, but it was a mistake. I did put Codemasters first on the list to draw people in, but not because it is in the most trouble. I DIDNT HAVE HARD FACTS I agree with Michael above. This post was much more a subjective opinion piece than many GAMESbrief pieces. But Ive been following the games industry for 15 years. Ive worked with publishers, developers and investors. Ive run my own business. I like to think that I have a good gut instinct for what will work and what wont. I try to layer over that rigorous intellectual analysis. This post had a higher proportion of gut over intellect, I grant you. 214 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
But I still stand by it. ITS NOT ABOUT THE GAME Finally, and in a way that will upset many games journalists, none of my comments in that post were about games themselves. I hesitate to say this, because of the ammunition it might give my detractors, but I said Id be honest, so here goes. I rarely consider the quality of game. I am not a publisher. I dont have my eye on the pulse of what sells and what doesnt. I dont spend my time playing a vast array of games so that I can determine what will be successful. Like investors, I dont evaluate games. I evaluate companies. When I ran Lodestar Partners (an investment boutique that just advised games companies), I used to visit developers in their studios. They would usher me in, offer me coffee, settle me on a comfy sofa and ask me which of their games I wanted to see. I said: None of them. My favourite game of all time is a game called Jagged Alliance 2. Its a fiendishly-inaccessible, isometric, squad-based tactical strategy game (pretty similar to X-Com in style). Its sales didnt exactly set the world on fire.
I am currently playing Darkwind. Its a fabulous indie game, coded by a single guy, which offers turn-based car combat in a post-apocalyptic world. There are currently only about 1,000 of us playing it. In the entire world. (BTW, if this seems like your thing, check it out at www.dark-wind.com. If you sign up give my reference code 6571 I get a free months subscription. If you like the 80s tabletop game Car Wars, youll love Darkwind) My point is that people dont hire me to judge the commercial potential of a game. They expect me to understand the commercial potential of a games company. I make my living helping people make money out of games. That means helping publishers understand new ways of making and distributing games, of helping developers self-publish or discover new ways of creating and charging for cool content, and helping investors know where to get the best returns from investing in games. The quality of a game is not a good indicator. Just to be clear, I am not saying that the quality of a game doesnt matter. Far from it. Few companies can survive with a string of poor quality products. I am saying that I am not qualified to judge the quality of a game. But I am well-qualified to judge the quality of a business model, a management team, a company strategy, a diversification. I do care about there being great games out there. Its just that my focus is on helping create great companies that will deliver them.
247
SO WHAT DO YOU THINK?

247
http://www.dark-wind.com/ My subscriber ID is 6571. If you sign up, I get a free months subscription 216 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
I wrote my post for the reasons outlined above. Alec had his reasons for not liking it (and I accept that kicking a project on the basis of a few screenshots at a presentation is a bit harsh). But I still think it was an important post to write, and I stand by it. Is Alec right? Should this stuff have been better left unsaid? Let me know.
TEN GAMES BUSINESSES THAT ARE BLESSED 248

October 20, 2010 | Nicholas Lovell Last week, I wrote a post entitled Ten games businesses that are doomed.
249
I got a lot of feedback, much of the youre very brave variety. I had to defend 250 my reasons for posting , and I was challenged to write about 10 games businesses that excite me. So here goes. My ten games companies that are blessed. This is my list of companies that are doing interesting things. I expect them to be successful, or important, or I am simply applauding them for trying. Investors, gamers and pundits should be watching them. My ten companies have a distinctly European flavour: Im British, and Europe is what I know. If you know companies you think I should be watching from North America, Asia or anywhere, do let me know. Like the previous list, the numbering is for convenience only. They are not ranked in order.
1. MIND CANDY
Making a mass-market MMO that appeals to kids is tough. There is a lot of competition from the likes of Club Penguin and Free Realms, not to mention games on DS and traditional toys. Mind Candy has taken this market head-on, and taken it by storm. After a rocky start (not least investing heavily in an alternate reality game, Perplex City,
248
http://www.gamesbrief.com/2010/10/ten-games-businesses-that-areblessed/ 249 See p. 194 250 See p. 205 218 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
which didnt set the world on fire ) CEO Michael Acton Smith pivoted the business to focus on the kids market by launching Moshi Monsters. A year ago, I blogged that Moshi Monsters had hit a tipping point and reached 252 six million users. The good news for Michael and his crew is that the success has continued. As the chart below shows, Moshi Monsters is rapidly heading towards 30 million registered users. (Yes, I know registered users are not a great metric, but currently its all Ive got)
251
Figure 3: Moshi Monsters registered user growth
Mind Candy views the Moshi Monsters website and subgames as the heart of the brand. But it is branching out to offer its biggest fans other ways of interacting with Moshi: books, trading cards, Moshi Bandz, an iPhone app, gift pack, a magazine, toys. These are all out already or imminent. Mind Candy is backed by Index Ventures (who were also investors in Playfish) and is going from strength to strength.
251 252
http://en.wikipedia.org/wiki/Perplex_City http://www.gamesbrief.com/2009/11/the-tipping-point-how-moshimonsters-hit-exponential-growth-and-has-topped-6-million-users/ 219 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
If anyone (including me) bemoans the death of the British games publisher, just point to Mind Candy and say There is a great British success story. This one will fly, and fly.
2. KINECT 253
Microsoft and Sony have a problem. Nintendo tore up their playbook. The playbook for competing in the console manufacturing space was clear: Launch a console Hope you get dominant market share If you dont, launch a new console that is more powerful than your competitor to kick-start a new console cycle. It worked very well until someone at Nintendo read Blue Ocean Strategy. While Microsoft and Sony fought in the bloody, shark-infested waters of highspec consoles, Nintendo sailed in search of clear water. They found it with the Wii, a low-spec, low-cost, profitable hardware console. As Nintendo President Satoru Iwata said: I could give you our technical specs, as I know youd like that, but I wont for a simple reason: they dont really matter. The time when horsepower alone made all the 255 difference is over. Over seventy-five million units later, it looks as if Iwata-san was right.
254
253 254
You can buy a Kinect at http://amzn.to/fyewYy http://amzn.to/9uI4VH 255 http://uk.cube.ign.com/articles/522/522559p1.html 220 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
That left Microsoft and Sony scratching their heads. How do you compete with a platform which is less advanced than their existing offerings? The playbook says launch a new platform, but consumers clearly dont want more power at least not in enough numbers to justify the investment. So they decided to bring the red ocean to Nintendo. Sony, perhaps fitting for an organisation filled with engineers, decided that it would make a Wii-mote, but better. I think this will struggle. Making the PS3 more like a Wii might, possibly, stop a PS3 owner from buying a Wii. But thats not the point the real challenge now is to persuade Wii owners to buy PS3s. Which is why I think Microsofts approach is better. Kinect may be ambitious. 256 Kinect may require that you tidy your large living room before you play it. Kinect may be a hands-free innovation that arrived four years after Nintendos innovation. But it is an innovation. It allows different ways of playing a game. It is, I think, squarely aimed at a younger market. And every so often, my formal analysis gives way to gut instinct. I watched the 257 Kinectimals video below , and I wanted to buy it for my son. (Hes only two, so hes too young. But it wont be long.) Nothing has made me want a Move. Kinectimals has made me want a Kinect. Which is why its on this list.
256
Microsoft has removed the video where a number of technical experts from the Kinect team tell you to tidy your large living room to get the best results. 257 See http://youtu.be/Zs2x3jFTb2E 221 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
3. APPLIFIER
What is the biggest problem facing independent developers trying to break into Facebook gaming? Traffic. For the past two years, Facebook has been consistently shutting down the viral channels, trying to shift companies efforts from viral marketing to spending 258 cash on Facebook ads. The existing large players Zynga, Playfish, Playdom, 6 Waves et al. can cross-promote between their games. But where does that leave independent startups trying to break onto the platform. Enter Applifier. Founded by serial entrepreneur Jussi Laakkonen, Applifier brings the crosspromotional strength of a Zynga to the independent developer. Applifier currently boasts 100 games, reaching 55 million monthly players. It operates a walled garden policy at the moment, because, as Jussi puts it: A core goal of Applifier is to ensure that the games found on the cross promo bar are of high quality and that the user experience is consistent. For these reasons we are keeping the network invite-only for the time being. We are always looking at ways to expand the network because a great selection of games makes it more appealing for the players, so I want to encourage independent social game developers who have quality games that are growing to get in touch 259 with us!
258
http://www.allfacebook.com/facebook-developers-see-dramatic-drop-intraffic-following-removal-of-notifications-2010-03 259 http://www.socialgamesobserver.com/interview-with-applifier-founderjussi-laakkonen-704 222 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
The revenue model for Applifier is still not clear, and I dont care. Applifier fills a clear market need; developers I know who have worked with it have been very positive; and Jussi has the right entrepreneurial spirit. Applifier is definitely one to watch.
4. ZENIMAX
Regular readers might be spitting their coffee out right about now. A traditional publisher? One that releases games when theyre ready? A small publisher in the era of blockbusters? Yep. Zenimax is all of those things, and I still think it is going to do very well. This has required a certain amount of mind-changing on my part. I have been very focused on the new type of games social, persistent, free-to-play and was convinced that AAA development was in real trouble. I have now refined that view. AAA development will survive. There will just be fewer players, making bigger 260 titles, with larger budgets and wider audiences. Just like Zenimax does. The company now has an enviable studio of household names (amongst gamers) under its umbrella. These include:
260
The Elder Scrolls series, including Morrowind and Oblivion Fallout (acquired in 2004) Doom Quake Prey (acquired in September 2009)
See The future of the games industry? Its in three parts in the publishing section of Volume 2.or http://www.gamesbrief.com/2010/10/the-future-ofthe-games-industry-its-in-three-parts/ 223 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
It owns Bethesda Softworks, id Software and Arkane Studios. In short, Zenimax has become an independent powerhouse. To extend a movie analogy, it has perhaps become a Miramax, a purveyor of high-quality, mature-rated, independent games. The movie analogy makes sense. Many of Zenimaxs board members come from the movie industry and its associated advisers. The company intentionally makes high-quality, blockbuster titles, with little that is derivative or simply annual iterations of a franchise. It raised $300 million in 2007 from Providence 261 Equity Partners, a major investor in the media industry, in October 2007. It 262 raised a further $150 million from Providence in October 2010. Even more reassuringly, from my point of view, the use of proceeds in the second tranche of investment did not include the terrifying phrase to finance massively multiplayer online games (MMOGs). So I see Zenimax as an independent studio, modelled on the great film studios and with executives at the helm who understand how that model works, backed with nearly half a billion dollars of firepower from an investment fund with $22 billion under management, that owns three highly respected development studios and four global games brands, all wrapped up with an appetite for strategic acquisitions and producing high-quality content. If that isnt the type of company that ought to flourish in the new AAA market, I dont know what is.
5. RED LYNX
Red Lynx are the Finnish developers of XBLA hit Trials HD. A self-publishing sensation (although technically the game is published by Game Studios), Trials
261 262
http://www.zenimax.com/news_pressrelease10.25.07.htm http://www.zenimax.com/news_pressrelease10.06.10.htm 224 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
HD has achieved sales of over one million units in just over a year on the 263 market. Outspoken (albeit softly-spoken) CEO Tero Virtala has been open about Red 264 Lynxs operations. He has revealed sales data that many keep secret; he has 265 admitted to leaking the code for Trials HD to torrent sites , albeit with key online functionality stripped out; he even admits to being a management consultant at PwC before taking over as CEO in 2002. The reason that Red Lynx is in this list is because it has been a start-up success. The company has experimented in many different areas; it has released over 100 games on platforms including the web, N-gage, iPhone, mobile devices in general, PC, Mac, NDS, PSP, interactive TV, and XBLA. In short, it has innovated, experimented, pivoted and finally alighted on a development and publishing strategy that works for it. It is developing new games and new downloadable content for its existing content. Red Lynx is just the kind of developer that I expect to thrive now that the 266 games industry is fragmenting into three.
6. ANKAMA
If ever there was a company that had got transmedia right, it is Ankama. The company was originally founded in 2001 as a web agency. In 2003, they launched Flash-based MMO Dofus as a beta version. By April 2010, the 267 268 company had 30 million paying players , 250,000 peak concurrent users 269 and estimated revenues of 40 million .
263 264
http://www.redlynx.com/index.php?id=493 http://www.gamasutra.com/php-bin/news_index.php?story=25381 265 http://www.escapistmagazine.com/news/view/95961-Developer-LeaksOwn-Game-to-Pirates 266 See The Future of the Games Industry? Its in three parts? in Volume 2 or 267 http://www.eurogamer.net/articles/ankamas-world-article 225 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Ankama has expanded Dofus into many different media: Anthony Roux, our creative director and co-founder, is a very passionate creator and wanted to expand the universe of Dofus using various media. The idea was always to tell a different part of the story, i.e. to explore the life a specific character, or a different part of the universe, meaning that the story is not told again in a different way, but the 270 universe actually expands with each new media. The transmedia expansion includes magazines, comics, events (where 2030,000 Dofus fans attend) and further games. I understand that each expansion has to be profitable on its own merits. Ankama, like Jagex and CCP, has been independent, created its own world and created a massively successful video game that few core gamers even know about. If for no other reason, that makes Ankama one to watch.
7. CHILLINGO
Putting Chillingo on this list so soon after ngMoco was acquired for $400 271 272 million may reek of opportunism. Well, yes, indeed there is some of that. But this British publisher of iPhone games has had some real successes.
268 269
http://www.slideshare.net/ICOPartners/gfg-2010-f2p-in-europe http://www.gamesbrief.com/2010/04/correction-ankama-are-making-40million-in-revenue/ 270 http://www.worldsinmotion.biz/2009/10/interview_ankama_talks_dofus_a. php 271 See the mobile section of Volume 3 for an analysis of this acquisition 272 Although Chillingo was acquired for $20 million only a week after I wrote this post. 226 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Not just Angry Birds, by any measure a fly away success. Not just Cut the Rope.
273
But seven #1 games in the past two years, many of which are powered by the Crystal SDK, providing social features and cross-promotion that help drive 274 traffic. I had feared that Chillingos success with Angry Birds was more luck than judgement, and that it was really Rovios success. (Rovio is the developer of Angry Birds). But the opportunity to use Crystal to cross-promote titles (in the same way that Applifier does for Facebook games) is at the heart of Chillingos value. Seven #1s and the recent success of Cut the Rope are evidence of this value. Im not sure where I think Chillingo should go next. But with ngMoco out of the market, and the other big iPhone publishers being in-house (like EA Mobile) or public (like Gameloft), I would have thought that a number of buyers are eyeing the company. {(In fact, Chillingo was acquired by Electronic Arts for $20 million barely a week after this post was published)}
8. INENSU
Im going out on a limb here, since dont even know what Inensu does. But I do know that if you take the mother of Singstar (Paulina Bozek), take her through 275 an intense learning experience at Atari and then give her own startup to focus on the next generation of social games for web and mobile something exciting is likely to happen. And its going to happen in the areas of music and fashion (my guess is that something game-like is involved there too).
273
http://games.venturebeat.com/2010/08/13/angry-birds-sells-6-5m-unitson-iphone-and-flies-to-new-smartphones/ 274 http://www.crystalsdk.com/ 275 http://www.develop-online.net/news/34567/Paulina-Bozek-quits-Atari 227 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Sure, this is not based on analysis. Inensu is not in this list based on facts and stats. But a lot of investing is about backing people, and backing your gut. My gut tells me I should watch Inensu closely. (Oh, and their webpage says that they are hiring).
9. IPAD
When I wrote my notes, this was looking like a wildcard view. Me, the archproponent of open and an Apple anti-fanboy, putting forward the iPad as a platform to watch. In that time: The iPad become the fastest-adopted consumer device ever It is selling 4.5 million units a quarter If the iPad is counted as a PC, calculates Deutsche Bank, Apple has gone from fourth to first place in US computer sales in just six 277 months
276
So now it turns out that the iPad is one of the most successful pieces of consumer hardware ever invented and Apple is about the largest company on the planet, with a market capitalisation in the mid $200-billion range, up 100fold since Steve Jobs returned in 1997. Talk about a comeback. I think that the iPad is here to stay as a browsing device, as a gaming device, as a game-changer. I wonder when well see the first investment in an iPad-only games developer.
276
http://www.theequitykicker.com/2010/10/05/ipads-the-incredible-pace-ofchange-and-tablet-opportunities 277 http://www.ft.com/cms/s/0/8e3d0b7e-db07-11df-a87000144feabdc0.html?ftcamp=crm/email/20101019/nbe/MediaInternet/product (paywall) 228 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
10. ACTIVISION
It may not seem like a big deal to put Activision on this list to you. But to me, its a huge decision, and the most substantial reversal of opinion Ive made in a long time. For the past two years I have been cheerleading Electronic Arts for grasping the 278 nettle of reducing headcount, investing in social games and turning the super 279 tanker around to navigate the waters of the new games industry. Ive been down on Activision because it doesnt seem to care. Its been fixated on boxed product games. It has been resting on the laurels of the worlds largest subscription MMO (World of Warcraft, for those asleep at the back). Its been milking its franchises on an annual basis and having the occasional 280 massive spat with its development talent. But Ive changed my mind. Ive changed my mind because, if you buy my argument that the industry is splitting into blockbuster AAA franchises (like movies) and persistent, free to play, online worlds (like television), you dont need to be good at both. Excelling at one business type is more than enough to be successful. After all, Sony Pictures does fine without a television station. Thats not to say that everything is rosy at Activision. The Infinity Ward spat didnt help. The Guitar Hero franchise may be stalling. World of Warcraft is going strong but will soon face tough competition from The Old Republic and Guild Wars 2, either of which might snaffle enough users to dent profitability.
278
http://www.gamesbrief.com/2009/11/1500-jobs-to-go-at-electronic-artsas-it-replaces-traditional-games-with-social-games/ 279 See The future of the games industry? Its in three parts and the posts on Electronic Arts in Volume 2. 280 http://www.guardian.co.uk/technology/gamesblog/2010/apr/28/gamescontroversy 229 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
But I no longer think that Activision is strategically doomed. They are doing what they know how to do: outspending the competition on development and marketing to have a dominant position in blockbuster, AAA games. And that is a sustainable, long-term business.
11. NDREAMS & 12. CHANNELFLIP

I chose not to put nDreams and Channelflip in the list because I have equity or advisory roles with both these companies. But I do think they are ones to watch. Both were featured in the 2010 Guardian Tech Media Invest 100 as companies who have demonstrated innovation and creativity over the past 281 year. nDreams makes games and virtual goods on platforms ranging from PlayStation Home to the web to Facebook and the iPhone. The company launched the first alternate reality game on PlayStation Home, Xi, is currently 283 running an ARG starring Lewis Hamilton and funded by Reebok and has, quietly, become a very successful publisher of virtual goods and virtual spaces in PlayStation Home. Channelflip is trying to change the way we consume television on the web. It produces made-for-the web TV shows, funded by advertisers, like David 285 286 Mitchells Soapbox and Harry Hills Little Internet Show. Both are very exciting, but I left them of the list to avoid accusations of conflict (and, of course, Channelflip is not a games company).
284 282
281 282
www.guardian.co.uk/tech-media-invest-100/top-100-technology-innovators www.ndreams.com 283 www.secretlewis.com/ 284 http://www.channelflip.com/ 285 http://www.channelflip.com/david-mitchells-soapbox---series-2/#insummary 286 http://www.channelflip.com/harry-hills-little-internet-show/#official-trailer 230 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
CONCLUSION
So there you have it. Ten companies that are blessed, or ones to watch, or whatever you want to call it. Who have I missed? Who doesnt deserve to be in here? Let me know.
THE TEN ISSUES THAT WILL CHALLENGE THE GAMES INDUSTRY IN 2011
January 18, 2011 | Nicholas Lovell Forecasting is a mugs game. The games industry is changing so fast that new issues are popping up all the time. Yet we could all predict that Bobby Kotick will anger gamers by referring to games as products, that publishers will rail against the second-hand market for denying them revenue and that a dozen independent developers will be bought by publishing giants, only to be shut down three years later. In a spirit of adventure, Edge has attempted to predict the biggest issues that will face the games industry in 2011.
IF YOU WANT TO GAME ON THE GO, BUY A SMARTPHONE

2010 was the year in which traditional handhelds lost their way. The PSP Go 287 struggled. The DS saw software sales fall 19%, according to Arete Research. Publishers struggled to make profits on the traditional handhelds. All thanks to the iPhone. The rapid emergence of the iPhone as a gaming platform since 2007 has been extraordinary. It is not as powerful as the dedicated handhelds but the ease of purchase, the ubiquity and the very low prices have created a new market that turned the old handheld market upside down. Everything is not rosy for the iPhone, though. It looks as if the iPhone will be eclipsed by smartphones using Android as the operating system of choice by 288 the end of 2010 . The proliferation of smartphones is bad news for gamers who hope for a resurgence of the fortunes of handheld devices, this is bad
287
This research was not widely publicised, but I was given permission to quote
it.
288
http://www.fiercemobilecontent.com/story/comscore-android-surges-235us-smartphone-market/2010-12-06?utm_medium=nl&utm_source=internal 232 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
news. Developers who have adapted to the particular economics of developing for iOS are likely to prefer working with Android to increasing their support for the PSP or DS. Nintendos 3DS, due to launch in Japan in February 2011, is one ray of hope for core gamers. But more likely is that your mobile gaming in 2011 will be a smartphone. The challenge is that with a fragmenting smartphone market, you will have to make a choice over which platform to back.
THE BIG GET BIGGER AND THE SMALLER DIE

2010 saw Call of Duty: Black Ops achieve sales of $650 million in five days, a 289 record-breaking amount. Yet analysts like Screen Digest predict that the peak year for boxed games was 2008, and we will see year-on-year decline from now on. The reason is that while the biggest games are thriving, the middle market is being squeezed. If your title is not a global, must-have blockbuster, it is struggling to get gamer attention when there are so many alternative, low-cost channels such as PSN, XBLA, Facebook and iPhone. (Before you argue that plenty of gamers still prefer AAA console titles to cheaper fare on other platforms, consider this: the difference between a game being profitable or being loss-making can be only a few tens of thousands of units. The threat to middle-tier games is not from everyone stopping buying them; its from enough people to stop buying them such that publishing them becomes unprofitable). Expect to see fewer titles released in 2011 - although the good ones may well be very successful - and watch out for smaller publishers to hit financial difficulties.
INDIES WILL THRIVE

One positive trend for gamers is that digital distribution channels have made it possible for games from innovative indie developers to thrive. Think Angry
289
http://investor.activision.com/releasedetail.cfm?ReleaseID=531581 233 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
Birds from Rovio on iPhone (10 million units and rising). Minecraft from oneman band Markus Persson (which was making $350,000 per day at its peak) or Joe Danger from Hello Games. If you like games that are less than mainstream, 2011 will be a good year for you.
RETAILERS WILL STRUGGLE

The challenges facing retail are the flipside of the market changes that are helping indies. With fewer blockbusters and more content sold digitally, there is less need for retail than ever before. The ongoing marketing push behind Kinect and Move will help, as will the launch of the 3DS, but the truth is that retail has not adjusted to the new world of games that prizes ongoing relationships with customers over pushing products. Independent retailers will be particularly hard hit, because they struggle with the online activities that are now a pre-requisite for retailing success. Expect to see a steady trickle of store closures and bankruptcies in 2011.
THE ERA OF THE WII IS OVER

Sales of software for Nintendo platforms are plummeting. Arete Research estimates that sales of Wii software fell 14% in the first nine months of 2010. When the Wii was launched, it was heralded as ushering in a new era of casual gaming, when the world and his mother would be playing games. It is true that your mother is now playing games. However she has chosen to play on Facebook or on her phone, not on the Wii. Its cheaper, its easier to play for a few minutes and its where her friends are. It is too early to declare Nintendo RIP, and the company has a great track record of zigging when others zag, but 2011 will be a tough year for the Wii.
CASUAL/SOCIAL GAMES WILL DRIVE NEW ADDICTION FEARS

In 2010, the BBC broadcast a Panorama show trying to show a new creeping threat in our midst: gaming addiction. They failed to produce any compelling evidence beyond a few hackneyed anecdotes of gamers dropping out of university due to their Xbox habit. More importantly, they missed the biggest addiction story: the rise of casual gaming. The new breed of casual games doesnt just absorb time, it absorbs money. The freemium business model of games like Frontierville, Smurf Village and Dark Orbit enable some users to spend hundreds, even thousands, of dollars on a single game. When the tabloid press get wind of this, theyll search until they find someone who satisfies the headline How I spent my child allowance on a virtual Smurf.
YOULL SPEND MORE ON A SINGLE GAME THAN EVER BEFORE

Publishers have a new strategy for making money with a title. It involves moving away from just selling a standard boxed game and moves into the world of customer segmentation. Many games already come with a Collectors Edition. There will be more Collectors Editions, and more games will launch with several different versions. Downloadable Content (DLC) will also become de rigueur as publishers seek to both capitalise on the upfront development and marketing investment in a game and stop you from taking your original disc down to your nearest retailer as a trade-in.
3D TAKE UP WILL BE SLOW, AND EXPENSIVE

3D has long been heralded, and for some 2011 will be the year that 3D makes it into the home. It will be expensive (perhaps over 1,000) and consumer adoption will be slow. If you are amongst the first to make the jump, dont expect lots of games optimised for your 3D setup for a while.
THE CONSOLE WILL BECOME AN ENTERTAINMENT BATTLE GROUND, NOT A GAMES ONE
In 2010, the PlayStation 3 ceased to be a gaming device. Research from the Nielsen Company shows that only 49% of time spent using the PS3 was spent 290 on gaming. The figure for the Xbox 360 was 62%. The rest of the time was spent watching DVDs or streamed movies, listening to music or surfing the web. It has long been said that video game consoles were destined to be the central entertainment hub in our living rooms. 2011 may be the year in which this finally comes true. Expect many more efforts to persuade use to consume nongaming content on your consoles as platform holders launch new varieties of music, film and other streaming or download services.
HUGE FOCUS ON TABLETS AS NEW DEVICES

The iPad is a new category of computing device. It has had the fastest adoption rate of any consumer electronics device ever. It took just 80 days to sell 3 million units, which is three times faster than the iPhone managed. It is 291 decimating the netbook market , and looks like it may herald a new era of lean back, personal computing. Tablets are a new type of light-touch entertainment devices. 2011 will be see continued growth in the installed base, companies being formed to focus exclusively on tablets and games that take advantage of the large size of the screen. The tablet market is still incredibly young, so there will be some missteps along the way, but 2011 will be the year of the tablet.
290
http://blog.nielsen.com/nielsenwire/online_mobile/game-consoles-edgecloser-to-serving-as-entertainment-hubs/ 291 http://www.macworld.co.uk/blogs/index.cfm?blogid=8&entryid=3247413, http://www.eweekeurope.co.uk/news/netbook-market-share-bows-to-appleipad-10270 236 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
NOBODY KNOWS ANYTHING

The most-likely-to-come true prediction for 2011 is that something that no-one predicted will emerge and take us all by surprise. While we wait for the unexpected, these are the issues that will vex and delight gamers in 2011. Happy gaming.
GLOSSARY
A/B testing
Ad Server
Affiliate marketing
App
AppStore ARPU
ARPPU
Also known as split-testing, A/B testing involves testing two small changes to your website or game on a live service and measuring which performs better. A web tool such as OpenX or DoubleClicks DART that intelligently delivers multiple advertising campaigns spread over time. Affiliates are third-party websites which refer users to your site in return for a payment (on a CPC or more usually a CPA basis). They are often managed through Affiliate Networks such as Commission Junction or TradeDoubler. If you are referring gamers to a site such as Amazon or iTunes that sells your own game, you can register and become an affiliate yourself, generating additional revenue (typically 5-10% of the sales generated) from sending traffic to the site. Currently means an application for smartphones such as the iPhone and Android, as distinct from a web page accessed from a mobile phone. Apples online store for applications for the iPhone. Average revenue per user. A metric borrowed from the mobile industry, it shows how much the average user spends. Typically a monthly, rather than a yearly, figure. Not to be confused with ARPPU. Average revenue per PAYING user. Confusion between ARPU and ARPPU is rife. In a free to play game, there may be many millions of users, but only a percentage of them pay. Most games companies quote ARPPU, but many observers multiply ARPPU by total number of users to get revenue. To calculate revenue, they should multiply EITHER ARPPU x number of paying users OR ARPPU x total users x conversion rate. 239 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
CAC CANSPAM Churn CPA
CPC
CPI
CPM
CPT DAUs DLC
Customer Acquisition Cost, also known as CPA. The US Act of 2003 that regulates the sending of commercial email in the United States. The percentage of customers who leave a service every month/year. Cost Per Acquisition/Action. An online advertising model whereby an advertiser pays a publishing website a cash amount every time the website refers a consumer to the advertisers website and the consumer takes a specified action. It may include filling a form or registering, but the most common is making a cash payment. For example, EVE Online will pay $7 every time a referred user becomes a subscriber. It is also used by game developers and web publishers as a key metric to understand how much it costs them to acquire a customer from all of their marketing sources. Cost Per Click. An online advertising model whereby an advertiser pays a publishing website for each click on a link. Googles AdSense program is based around CPC. Cost per Install. An online advertising model, currently mostly confined to the iPhone, where developers/publishers pay a fee for the successful installation of an app. Cost per Mille (or Thousand). The primary measure of advertising cost across all media (including television, radio, print and web). It measures that cost per thousand views of an advertisement. In an online context, it refers to the cost of a thousand impressions of a single banner. Cost per Thousand. See CPM. Daily Active Users. Downloadable Content. Generally, I suppose this would mean any content that has been downloaded. In practice, it appears to mean additional content that can be downloaded (whether for free or for a payment) for boxed products. Examples include the infamous horse armour for 240 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
eCPM
EIS F2P Freemium
Free To Play GaaPy GaaSy Geo-targeting IP Match Three
MAUs Metacritic
Meta tag
MMO
Oblivion or additional content for Burnout Paradise. Effective Cost Per Thousand. A method of comparing a CPC/CPA campaign to a standard CPM campaign. By aggregating the total amount of CPC/CPA revenue and dividing by the number of impressions served, you can calculate the effective CPM. Enterprise Investment Scheme, a UK government initiative to encourage investment in early stage businesses. Free to play. See Freemium. A business model whereby you give your core game away for free and charge users for premium services or virtual goods. Also known as F2P. See Freemium. A game as a product. A phrase coined by me in How to Publish a Game A game as a service. A phrase coined by me in How to Publish a Game Showing content, usually advertisements, only to people in a specific country. Intellectual Property. Also stands for Internet Protocol. A game mechanic where players combine three or more similar items to make them disappear. Bejewelled is a classic example of a match three game. Monthly Active Users. A website that aggregates review scores for games, films and music to give a blended average score. The exact algorithm of weighting is not revealed, but Metacritic is a good guide to the general reception of a game. A meta tag holds data about the content of a web page in the <head> section. Often associated with effective SEO, but no longer as effective as it once was. It is good practice to have good keyword and description fields, but good quality page design is more important for SEO than playing games with meta tags. Massively-multiplayer online game. 241 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
PSN Publishers
Registered users
Remnant
Smartphone
SEM SEO
Triple A Unique (visitor)
user
XBLA XBLIG
PlayStation Network. In games, blood-sucking leeches who have no place in the future of digital distribution (according to David Lau292 Kee). In web advertising, publishers generally means websites, such that a developer talking to an advertiser about his browser-based game will be referred to as a publisher. An oft-quoted but generally useless metric for online businesses. A successful web business needs active users, and that is best measured by Unique Users. Advertising that is sold for low rates, typically through networks. It is known as remnant because advertisers buying from a network dont know exactly which sites their ads will be displayed on, and so they pay a lower CPM or CPC rate. Any of the new generation of advanced mobile handsets such as the iPhone, the Palm Pre or the Android operating system. Search Engine Marketing. Paying money to appear in the search rankings on sites such as Google, Yahoo and MSN. Search Engine Optimisation. The process of driving traffic to your site by ensuring that key search phrases are included in the text of your website. A premium selling title, targeting at least 1 million units. A unique user or unique visitor is the standard audience measurement unit on the web. It typically means a unique individual who has visited a website in the last 30 days, counted only once no matter how many times they visited. Some sites use different time frames (2 weeks, 3 months) for their uniques. Xbox Live Arcade. Xbox Live Indie Games.
292
How to Publish A Game, p. 20 242 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1
BIBLIOGRAPHY
Anderson, Chris. Free, the Future of a Radical Price. Random House, 2009. http://amzn.to/hLqDtO Anderson, Chris. The Long Tail: How Endless Choice is Creating Unlimited Demand. Random House, 2006. http://amzn.to/gqG703 Chan Kim, W and Mauborgne, Rene. Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Harvard Business School Press, 2005 http://amzn.to/g9Hd92 Chatfield, Tom. Fun, Inc. Virgin Books, 2010. http://amzn.to/eXUpWT Cialdini, Robert. Influence: The Power of Persuasion. Harper Collins, 1984. http://amzn.to/gOCE0B Donovan, Tristan. Replay: the History of Video Games. http://amzn.to/9BxClD Epstein, Edward Jay. The Big Picture: Money and Power in Hollywood. Random House, 2006 http://amzn.to/g5iyGs Gilmore, James and Pine, Joseph. Authenticity: What Consumers Really Want. Harvard Business School Press, 2007. http://amzn.to/els9kX Gladwell, Malcolm. Tipping Point. Abacus, 2001. http://amzn.to/i6rZdi Gladwell, Malcolm. Blink. Penguin, 2006. http://amzn.to/erKNjO Gladwell, Malcolm, Outliers. Penguin 2009. http://amzn.to/hAP0WG Goldman, William. Adventures in the Screen Trade. Abacus 1996 http://amzn.to/fHXK8G Keen, Andrew. The Cult of the Amateur. Nicholas Brearley, 2008. http://amzn.to/f6Wkdg Kent, Stephen. The Ultimate History of Video Games. Prima Life, 2002. http://amzn.to/eh6fFS
King, Brad and Borland, Jonathan. Dungeons and Dreamers: The Rise of Computer Game Culture from Geek to Chic. McGraw-Hill Osborne, 2003. http://amzn.to/eRS9PL Krug, Steve. Don't Make Me Think!: A Common Sense Approach to Web Usability. New Rivers. http://amzn.to/gLLkvd Kushner, David. Masters of Doom: How Two Guys Created an Empire and Transformed Pop Culture. Piatkus Books, 2004 http://amzn.to/eZBxxK OLuanaigh, Patrick. Game Design Complete. Paraglyph Press, 2005. http://amzn.to/dPlPt0 Price, David. The Pixar Touch: The Making of a Company. Vintage Books, 2009. http://amzn.to/eY5Ook Schell, Jesse. The Art of Game Design: A book of lenses. Morgan Kaufman, 2008. http://amzn.to/hxcJAL Shirky, Clay. Here Comes Everybody. Penguin, 2009. http://amzn.to/f0Ozlv Taleb, Nassim Nicholas. The Black Swan: The Impact of the Highly Improbable. Penguin 2008. http://amzn.to/ga4tgS Tavris, Carol and Aronson, Elliot. Mistakes were Made (but not by me). Pinter & Martin, 2007. http://amzn.to/buwn5w
LIST OF FIGURES
Figure 1: Correlation between video game sales and violent crime .................. 53 Figure 2: Alexa ranking for Earth Eternal ........................................................... 56 Figure 3: Moshi Monsters registered user growth .......................................... 219
LIST OF TABLES
Table 1: The 7 Tacit Lessons Which Schools Teach Children ............................. 69 Table 2: Age rating options in Germany .......................................................... 161
INDEX
3
38 Studios ....................................... 205 3D ................................................... 235 3D Realms ....................................... 196
6
6 Waves .......................................... 222
Arete Research ....................... 232, 234 ARG ..............See alternate reality rame Argonaut ......................................... 187 calling in receivers ...................... 188 Arkane Studios ................................ 224 ARM Yourself .................................... 72 Atari ........................................ 195, 227 Atlantic, The .................................... 181 avatar ................................................ 93
B
Bad Science ..................................... 140 Balderton Capital .............................. 45 investment in Codemasters ........ 195 Ballmer, Steve ................................. 177 Baverstock, Ian ............................... 136 Beatles, the ..................................... 100 Bell Curve ........................................ 170 Bethesda Softworks ........................ 224 Big Picture, Money and Power in Hollywood, The ........................... 174 Bigdoor ............................................. 66 Bigpoint..................................... 41, 202 Black Swan, The .............................. 169 How to benefit from ................... 171 Blink ................................................ 176 Blizzard ............... 43, 50, See Activision blockbusters ........................... 207, 229 Blue Ocean Strategy ....................... 220 Borland, John .................................. 192 boxed games ................................... 233 middle market being squeezed .. 233 Bozek, Paulina ................................. 227 Braid development budget .................... 29
A
A/B testing ........................................ 42 AAA games ...................... 207, 223, 229 budget .......................................... 30 peak ............................................ 233 Activision ........................ 203, 208, 229 addiction ................................... 71, 235 Adventures in the Screen Trade ..... 174, 175 Age of Conan .................................. 206 age ratings ...................... 149, 158, 164 Allen, Paul ....................................... 177 alternate reality game .... 190, 218, 230 Android ........................................... 232 Angry Birds.............................. 227, 234 Ankama ..................................... 55, 225 anonymity ......................................... 51 Anonymous ....................................... 74 Apax ................................................ 187 APB ......................................... 205, 206 Apogee ............................................ 196 Apple......................................... 62, 228 Applifier .......................................... 222
Bridgett, Rob ................................... 117 Brisbourne, Nic ................................. 62 Buena Vista ..................................... 175 business models.............................. 204 traditional media ........................ 179 Buttler, Lars .................................... 202
C
Cage, Nicolas................................... 175 Call of Duty ..................................... 207 subscription to............................ 207 Call of Duty: Black Ops .................... 233 Canada .................................... 110, 117 damaged by tax credits? .... 107, 125 quality-of-life .............................. 117 Car Wars ......................................... 216 casual games................................... 235 CCP.................................................. 204 CDNs ..... See content delivery networks Champions Online ........................... 206 Channelflip ...................................... 230 Cheetham, Dr Tim ................... 138, 143 response to rickets claim ............ 143 Chillingo .......................................... 226 City of Heroes & City of Villains ....... 192 Clay Shirky......................................... 34 Cliff Harris opposition to videogame tax credits ............................................... 111 Club Penguin ........................... 199, 218 Codemasters ..................... 45, 194, 198 cognitive surplus ............................... 34 Collectors Editions ......................... 235 common carrier ................................ 84 consoles .......................... 207, 220, 236 as entertainment devices ........... 236 Constantin Film ..................... 79, 82, 94
content delivery networks ................ 27 Content ID ................................. 82, 101 copyright ..................................... 82, 91 and Scottish Parliament. ............ 119 and the Scottish Parliament ....... 122 definition .................................... 103 infringement ................................. 97 performance ............................... 102 underlying lyrics and music ........ 102 why it won't work on the Internet ............................................... 103 Core Design ..................................... 190 cost per acquisition ........................... 55 Counterstrike .................................. 208 CPA ................. See cost per acquisition crime correlation with video games ....... 53 Crystal Dynamics ............................. 191 Crystal SDK ...................................... 227 Crytek acquisition of Free Radical.......... 194 Cult of the Amateur, The ................. 179 Cut the Rope ................................... 227
D
Daikatana ....................................... 191 Dancing With The Stars .................... 58 Dark Orbit ....................................... 235 Darkwind......................................... 216 Delaney, M-J ..................................... 97 Della Rocca, Jason ........................... 110 Destination Games ......................... 192 Develop ............................. 33, 149, 210 developers AAA ............................................. 110 end of ........................................... 60 indie.................................... 116, 233
management ................................ 48 development budgets ................. 29, 30 digital distribution ............................ 22 Digital Millennium Copyright Act .....See DMCA digital rights management ................ 86 Disney ..See Walt Disney Company, The distribution digital .................................... 27, 203 physical ................................... 31, 91 DLC............. See downloadable content DMCA ................................................ 79 safe harbor ................................... 89 Dofus............................................... 225 Doom .............................................. 223 Downfall ..........................79, 82, 94, 96 downloadable content .............. 87, 235 Dragon Empires .............................. 194 Dredge, Stuart ................................ 102 DRM ......See digital rights management Duke Nukem Forever ...................... 196 Duncan Smith, Iain .......................... 147 Dungeon & Dragons Online ............ 203 Dungeons and Dreamers ................ 192 Dunn, Gary ...................................... 195 Dust 514.......................................... 205
Elder Scrolls ..................................... 223 Electronic Arts............. 45, 46, 203, 229 acquisition of Chillingo ............... 227 acquisition of Origin Systems ..... 192 failure of Majestic ...................... 189 Project Ten Dollar ......................... 87 Electronic Frontier Foundation . 82, 103 Elphicke, Charlie ............................. 154 ELSPA ...................................... See UKIE EMI.................................................. 100 Music Publishing ................... 97, 100 record label ................................ 100 Empire State of Mind ...................... 100 parody of ...................................... 96 Enter the Matrix.............................. 195 Epic ................................................. 196 Epstein, Edward Jay ........................ 174 Equalities Bill ..................................... 20 Eternal Earth ..................................... 54 Eutechnyx ......................................... 48 Eve Online ....................................... 204 Ewald, Konstantin ................... 158, 164
F
F1 2010 ........................................... 198 Facebook......................................... 233 bigger than Google ....................... 37 impact on Miniclip ...................... 199 shutting down viral channels ...... 222 valuation....................................... 37 Facebook Connect ............................ 37 Fahey, Rob ................................ 72, 155 Fallout ............................................. 223 Farmville ........................................... 87 Federal Department for Media Harmful to Young Persons ........................ 159 Field, Mark ...................................... 154
E
EA Louse ........................................... 63 EA Mythic .......................................... 63 EA Spouse ......................................... 63 Edge ................................................ 232 education .......................................... 69 EFF . See Electronic Frontier Foundation Eidos .................... 190, See Square Enix acquisition by Square Enix .... 45, 191 and Ion Storm ............................. 192
filesharing ......................................... 91 Financial Times my letter in ................................. 151 fixed costs ......................................... 56 Flagship Studios .............................. 188 Fox .................................................. 175 Fox News .................................... 182 Free Radical .................................... 193 Free Realms .................................... 218 free to play failure of Sparkplay ...................... 54 free will ........................................... 177 French, Michael .............................. 210 Frontier ........................................... 135 Frontierville ..................................... 235 funding Series A ......................................... 57
G
Gaikai ........................................ 27, 204 GAME Group plc ....................... 31, 206 game makers .................................... 60 GameHorizon Conference ................ 48 gamers mass-market ................................. 58 games addiction .............................. 71, 235 age ratings .................. 149, 158, 164 and politics ................. 147, 149, 154 as learning tools ......................... 152 as metaphor for life .................... 152 as services .................................. 207 boxed.......................................... 110 browser-based ........................... 202 businesses that are blessed ........ 218 businesses that are doomed ..... 198, 209
cause rickets ....................... 138, 143 don't cause rickets...................... 144 facile criticism ............................. 151 indie............................................ 233 investors' attitudes to ................ 211 on consoles ................................. 207 publishing ................................... 223 restricted content in Germany ... 159 retailing .............................. 206, 234 skill-based ................................... 201 violence in .................................. 147 Games Up campaign ....................... 155 GameShadow .................................... 19 GamesRadar ..................................... 86 gamification ...................................... 66 Garriott, Richard ..................... 192, 208 Gates, Bill ........................................ 177 Gathering of Developers ................. 196 Gauke, David ........................... 128, 154 Germany ................................. 158, 164 Gilmore, John .................................. 103 Gladwell, Malcolm .......................... 176 Goldacre, Ben ................................. 140 Golden Age of video games first ............................................... 29 second .......................................... 29 Goldman, William ........................... 174 Google......................................... 37, 89 Great Britain ..................................... 45 Gremlin ............................................. 45 acquired by Infogrames ................ 45 GT Interactive ................................. 196 Guardian, The ................. 140, 182, 230 guest post ..........66, 147, 149, 158, 164 Guild Wars 2 ................................... 229 Guitar Hero ..................................... 229
H
Hakim, Catherine .............................. 17 Halliwell, Luke ................................... 60 Hamilton, Lewis .............................. 230 handhelds ....................................... 232 Hanson, David ......................... 127, 154 Haze ................................................ 193 Hellgate: London ............................. 188 Hello Games.................................... 234 Hill, Harry ........................................ 230 Little Internet Show .................... 230 Hilton, Karl ...................................... 194 Hirschbiegel, Oliver ........................... 81 Holmes, Linda ................................... 58 Hon, Adrian ....................................... 72 Hosie, Stewart ................................ 154 How to Publish a Game..................... 93
J
Jaffe, David ....................................... 64 Jagex ....................46, 55, 111, 123, 202 Jagged Alliance 2 ............................ 215 Jobling, Darren .................................. 48 Jobs, Steve ...................................... 228 Joe Danger ...................................... 234 journalism ............................... 138, 143 Jubert, Tom ..................... 147, 149, 201
K
Keen, Andrew ................................. 179 Kelly, Tadhg..................................... 115 Kinect .............................. 200, 220, 234 Kinectimals...................................... 221 King, Brad ........................................ 192 Kongregate ....................................... 36 Kotaku ............................................. 209 Kotick, Bobby .................................. 207 Kuncewicz, Steve .............................. 97 Kushner, David ................................ 192 Kwari ............................................... 201
I
Icke, David ...................................... 182 id Software ..............191, 192, 196, 224 Index Ventures................................ 219 indie developers ............................. 233 Inensu ............................................. 227 Infogrames ........................................ 45 intellectual property ................. 86, 108 Internet freedom .............................. 74 investors attitude to games ....................... 211 Ion Storm ........................................ 191 iPad ................................... 62, 228, 236 sales of ......................................... 62 iPhone ............................. 232, 233, 236 games ......................................... 226 Iwata, Satoru .................................. 220
L
Ledingham, Don ................................ 69 Lennon, John................................... 100 lifetime value .................................... 55 Limelight Networks ........................... 27 Lionhead ........................................... 41 Lodestar Partners............................ 215 Lovell, Jonty ...................................... 83 Lovells First Law of Internet Criticism .................................................... 179
LTV ........................... See Lifetime value Luka and the Fire of Life .................. 151
M
MacIntosh, Ewan .............................. 69 Mafia Wars ....................................... 87 Majestic .......................................... 189 Malice ............................................. 187 Mamet, David ................................. 175 marketing budgets......................................... 30 massively multiplayer online game .See MMO Masters of Doom: How Two Guys Created an Empire and Transformed Pop Culture ................................. 192 maternity rights ................................ 17 Matrix Reloaded, The...................... 195 McCartney, Paul ............................. 100 McClure, Dave .................................. 57 McCluskey, Alan................................ 69 McGovern, Jim ................................ 154 McNealy, Scott................................ 177 Meer, Alec ...................................... 209 Metro ...................................... 138, 143 Microsoft .. 203, 220, See also Xbox 360 as acquiror of Onlive .................... 22 investment in Facebook ............... 37 Microsoft Game Studios ......... 188, 224 microtransactions ............................. 40 Mihaly, Matt ..................................... 54 Milo................................................. 200 Mind Candy..........46, 55, 111, 123, 218 Minecraft ........................................ 234 Miniclip ........................................... 199 Mitchell, David ................................ 230 David Mitchells Soapbox ........... 230
MMO................203, 204, 205, 208, 229 failure of Sparkplay....................... 54 failure of Tabula Rasa ................. 192 operated by Codemasters .......... 199 Modern Warfare 2 ............................ 87 development budget .................... 30 Morrowind ...................................... 223 Mos Def ............................................ 92 Moshi Monsters ........ 46, 111, 123, 219 Move ...............See PlayStation 3: Move movie industry and PlayStation 3 ........................ 236 and Xbox 360 .............................. 236 business model ........................... 174 Movies, The ............................... 41, 205 Mulville, Jimmy ................................. 60 music industry .................................. 91 Mythic ............................ See EA Mythic
N
narrative fallacy .............................. 171 NBC Universal ................................. 175 NCsoft ............................................. 192 nDreams ......................................... 230 New York Times, The ....................... 182 Newport State of Mind ............. 96, 100 News Corporation ........................... 175 newspapers....................................... 30 ngMoco ........................................... 226 Nielsen Company ............................ 236 Nintendo ......................................... 220 3DS ............................................. 234 Wii ...................................... 220, 234 Nintendo 3DS .................................. 233 Nintendo DS ............................ 218, 232
O
OReilly, Tim ...................................... 87 Oblivion ........................................... 223 Ocean................................................ 45 acquired by Infogrames ................ 45 OK Go ................................................ 93 Old Republic, The ............................ 229 OnLive ....................................... 22, 203 operational gearing .......................... 56 Origin Systems ................................ 192 Osborne Clarke ....................... 158, 164 Outliers ........................................... 176 outsourcing to publishers ................................. 32
Positech .......................................... 111 press ....................................... 138, 143 Prey ................................................. 223 Prism Ventureworks ......................... 54 privacy .............................................. 50 Prizefight ......................................... 201 Project Ten Dollar ............................. 87 Providence Equity Partners investment in Zenimax ............... 224 PSP Go............................................. 232 Psygnosis........................................... 45 acquired by Sony .......................... 45 publishers ......................................... 45 death of British ............................. 46 declining role ................................ 31 obsolescence ................................ 88 outsourcing to .............................. 32
P
Panorama ................................. 71, 235 Paramount ...................................... 175 parenting .......................................... 72 PC Zone ............................................. 86 Pearce, Professor Simon ......... 138, 143 response to rickets claim ............ 144 Perlman, Steve .................................. 24 Perplex City ..................................... 218 Persson, Markus ............................. 234 piracy ................................................ 86 Playdom .......................................... 222 Playfish ................38, 46, 111, 123, 222 PlayStation 3 competition with Wii .................. 220 Move .......................................... 221 PlayStation Home ....................... 230 PlayStation Network ................... 233 Poe, Marshall .................................. 181 Porter, Will........................................ 86
Q
Quake.............................................. 223 Quake II software engine.................. 191, 196 Quetteville, Harry de ...................... 157
R
Rare................................................. 193 RealID................................................ 50 RealTime Worlds ..... 198, 203, 208, 210 Rebellion purchase of Core Design............. 191 recruitment ....................................... 48 Red Lynx.......................................... 224 approach to piracy...................... 225 Redpoint Ventures ............................ 54 Reebok ............................................ 230
Reliance ............................................ 45 Restaurant City ....................... 111, 123 retailing ................................... 206, 234 Rhode Island Board of Economic Development loan to 38 Studios ....................... 205 rickets ..................................... 138, 183 Robertson, Margaret ........................ 58 Romero, John .................................. 191 Roper, Bill ....................................... 188 Rovio ............................................... 227 Rowe, Rafael ..................................... 71 Runescape..........46, 111, 123, 199, 202 Runrig ............................................... 92 Rupert Murdoch ............................... 39 launch of BSkyB ............................ 23 Rushdie, Salman ............................. 151
social games.............. 72, 222, 227, 235 tapping the cognitive surplus ....... 34 Sony ........................................ 203, 220 as acquiror of Onlive .................... 22 movie business ................... 175, 229 Sparkplay .......................................... 54 Square Enix ............................... 45, 203 Stanton, Judge Louis ......................... 89 Star Trek Online .............................. 206 State Treaty on Youth Protection in the Media ................................. 158, 164 Steam ................................................ 87 Street Racing ..................................... 55 STYPM .......... See State Treaty on Youth Protection in the Media subscriptions ..................... 40, 207, 229 number a consumer will pay ........ 42
S
San, Jez ........................................... 187 Schilling, Curt .................................. 206 Schmidt, Eric ................................... 177 Schmidt, Roy ..................................... 66 school what you really learned at ............ 69 SCi takeover of Eidos ........................ 191 Scientologists .................................. 182 Scott Pilgrim vs. the World................ 58 Screen Digest .................................. 233 self-publishing............45, See Volume 3 Settlers of Catan ............................... 76 Shiny Entertainment ....................... 195 Simple Life Forms............................ 115 Singstar ........................................... 227 Smith, Michael Acton...................... 219 Smurf Village................................... 235
T
tablets ............................................. 236 Tabula Rasa ..................... 192, 206, 208 Take 2 ............................................. 196 Taleb, Nassim Nicholas ................... 169 tax credits ....................... 110, 124, 206 arguments against ..... 110, 115, 122, 124, 127, 154, 206 Canada................................ 107, 125 coalition opinion ................. 127, 154 developer employment prospects ............................................... 129 distrust of TIGA's numbers ......... 129 government preference for general tax cuts ................................... 128 illegal under EU rules .................. 130 ill-equipped for transition .......... 123 market distortion ....................... 129 misalign incentives ..................... 123
MPs' interest in .......................... 154 my submission to the Scottish Parliament.............................. 119 no market failure ........................ 128 reward global companies not British ones ....................................... 123 reward those who play the system ............................................... 123 too many special reliefs .............. 130 Telegraph, The ........................ 157, 182 television ........................................ 156 theology .......................................... 177 TIGA .................107, 115, 135, 136, 155 merger with UKIE ............... 135, 136 Time Warner ................................... 175 Times, The ....................... 138, 143, 147 Timesplitters ................................... 193 Tipping Point, The ........................... 176 Titan Gaming .................................. 202 Titus Interactive ................................ 45 Tomb Raider, Angel of Darkness ..... 190 Tomb Raider: Legend ...................... 191 Tournament.com ............................ 201 trade associations ................... 135, 136 transmedia ...................................... 225 Trials HD ......................................... 224 Trion Worlds ................................... 202 turkeys .................................... 187, 208
acquired by Microsoft .................. 45 Unity ............................................... 202 Universal ......................................... 175 Unreal software engine.......................... 196
V
Vaz, Keith ................................ 149, 154 Viacom ...................................... 89, 175 lawsuit with YouTube ................... 89 video game sales 1990-2008 .................................... 52 violence correlation with video game sales 52 Virgin Gaming ................................. 201 Virgin Interactive .............................. 45 acquired by EA/Titus .................... 45 Virtala, Tero .................................... 225 virtual goods ..................................... 93 impact on Miniclip ...................... 199 similarity to designer goods ......... 93 virtual worlds PlayStation Home ....................... 230 Vitamin D deficiency ....................... 139 Vivendi Universal Games ................ 188
W U
Ubisoft ............................................ 193 digital rights management ........... 86 UKIE ................................ 135, 136, 155 merger with TIGA ............... 135, 136 Ultima Online .................................. 192 Ultima series ................................... 192 Ultimate ............................................ 45 Wainwright, Terema ......................... 97 Wall Street Journal, The .................. 207 Walt Disney Company, The ..... 175, 203 Warner Bros. ........................... 175, 203 Warren, Alex ..................................... 97 Watson, Tom .................................. 154 Web 2.0 .......................................... 179 WebTV .............................................. 24
Westminster eForum ........................ 91 Westwood Studios ............................ 45 Whipple, Micah................................. 50 Wi-Fi protecting by password ................ 84 Wii............................. See Nintendo Wii Wikileaks ........................................... 74 Wikipedia .................................. 35, 181 Wilson, Richard ............................... 155 Womack, Philip ............................... 151 World of Goo development budget .................... 29 World of Warcraft 43, 50, 206, 208, 229 addiction to .................................. 71
Kinect................................ See Kinect XBLA ................................... 224, 233 Xi 230
Y
Youth Protection Act............... 158, 164 Youth Protection rules ............ 158, 164 YouTube ................................ 31, 79, 97 Content ID ............................ 82, 101 lawsuit with Viacom ..................... 89 YPA................ See Youth Protection Act
Z X
Xbox 360 competition with Wii .................. 220 Zenimax .......................................... 223 Zynga ............................ 38, 55, 87, 222

GAMESbriefUnpluggedVol1 20freeversion

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

GAMESbriefUnpluggedVol1 20freeversion

Uploaded by

Copyright:

Available Formats

GAMESBRIEF UNPLUGGED:

VOLUME 1 ON COPYRIGHT, POLITICS AND OPINIONS

1 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

Copyright 2011 by Nicholas Lovell

ISBN: 978-1-4466-1370-2 Published in Great Britain by GAMESbrief

For more analysis, opinions and insight, visit www.gamesbrief.com

If you have any comments on this manuscript, please contact nicholas@gamesbrief.com

2 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

ABOUT THE AUTHOR

ALSO BY NICHOLAS LOVELL

3 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

For Andrew Downer A good friend, who will be sorely missed

5 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

8 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

PLEASE SHARE THIS BO OK

9 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

12 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

14 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

15 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

WHY I WAS TEMPTED TO DISCRIMINATE AGAINST WOMEN 1

FAMILY-FRIENDLY EMPLOYMENT LAWS HURT THE EMPLOYMENT PROSPECTS OF WOMEN

http://www.telegraph.co.uk/comment/6622521/Harriet-Harmans-costlyEquality-Bill-wont-do-anything-for-women.html 18 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

THE CHALLENGING PARADOX

WHY THIS MATTERS TO GAME DEVELOPERS

WHY THIS MATTERS NOW

http://www.equalities.gov.uk/equality_bill.aspx 20 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

21 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

ONLIVE HAS ONLY 2 POTENTIAL CUSTOMERS: MICROSOFT AND SONY 6

WHERES THE COMPELLING CONTENT?

http://www.gamesbrief.com/2009/04/onlive-has-only-2-potential-customersmicrosoft-and-sony/ 7 http://www.eurogamer.net/articles/gdc-why-onlive-cant-possibly-workarticle 22 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

BUT SURELY THAT WAS THE PROBLEM WITH SATELLITE TV?

23 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

IS ONLIVE JUST A MAD IDEA?

http://www.microsoft.com/presspass/press/1997/apr97/webtvpr.mspx 24 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

25 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

ITS ALL ABOUT THE EXIT

26 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

DOES GAIKAI HERALD INFRASTRUCTURE? 9

http://www.gamesbrief.com/2009/07/does-gaikai-herald-another-change-ininternet-infrastructure/ 27 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

http://www.eurogamer.net/articles/gaikai-cloud-computing-gameplay-thatworks-blog-entry?page=2 28 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

THERE HAS NEVER BEEN A BETTER TIME TO BE A DEVELOPER

THE DAWN OF THE PUBLISHER AGE

REACHING A GLOBAL FOOTPRINT

31 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

HOW TO PUBLISH A GAME

33 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

COGNITIVE SURPLUS RECLAIMING THE ENERGY LOCKED IN THE SITCOM.

www.shirky.com 34 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

36 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

TWO REASONS FACEBOOK IS ABOUT TO BECOME BIGGER THAN GOOGLE 12

http://www.gamesbrief.com/2009/10/two-reasons-why-facebook-is-aboutto-become-bigger-than-google/ 13 http://news.cnet.com/8301-13577_3-10286111-36.html 37 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

39 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

TEN REASONS MICROTRANSACTIONS SUBSCRIPTIONS 14

1. MICROTRANSACTIONS ARE USER-LED, NOT DEVELOPER-LED

3. PLAYERS CAN SPEND WHEN THEY WANT TO

http://www.gamesbrief.com/2009/10/ten-reasons-microtransactions-arebetter-than-subscriptions/ 40 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

4. PLAYERS CAN SPEND AS MUCH AS THEY WANT TO

5. MICROTRANSACTIONS MAKE IT EASY TO KEEP THE GAME FRESH

6. MICROTRANSACTIONS ARE TRACKABLE

7. MICROTRANSACTIONS ARE FLEXIBLE

41 Buy a physical, Kindle or iBookstore copy at www.gamesbrief.com/store/unpluggedvol1

8. MICROTRANSACTIONS OFFER A/B TESTING OPPORTUNITIES

10. MICROTRANSACTIONS MAKE MORE MONEY