A Moment of Silence at the End of Winter

In the last few days there have been at least three notices of MMO or virtual world projects shutting down.  It’s hard for me not to see these as indicators of the generational change in the now-traditional “heavy” MMOs/worlds:  Stargate Worlds, There.com, and Vivaty — all very different takes on the previous age of MMOs/VWs, are gone or going away.

They’re doing so in an online game/world/app market that is growing faster than we can track — just not where they are.  Not to be unkind (any effort in this area deserves some respect), but one way to look at these worlds is that they are the very finest in hand-made carriages for the elite set — right about the time cheap autos are rolling off the assembly line.

But looking forward as well as back just a few years (as I wrote in 2007 about the potential for a “Virtual World Winter“), it may be that this isn’t the depth of winter, but its end.  In December 2007 I wrote:

While I’m still bullish on virtual worlds and MMOGs for a number of reasons, that doesn’t mean we won’t necessarily go through a deep winter before we find spring again.    I’m often asked about what comes after World of Warcraft?  Can this market be sustained?

I think we have the answer; as usual, it’s no — and yes.

Better Revenue Forecasting for Social Games

One of the great things about social games is that there continues to be a wealth of information available that makes their business case much less uncertain than for other kinds of games.

As one example, Lisa Marino, Chief Revenue Officer at RockYou, gave a presentation at GDC on Monetizing Social Games that’s well worth reviewing.  Lots of good stuff in her slides, and in particular she provides some fascinating data on daily revenue per DAU.  This is a much more precise set of numbers than monthly revenue per MAU.  Measuring per DAU allows for better accounting of the initial fast rise of most successful social games (when DAU can be a very high percentage of MAU), ongoing engagement (how often your players return), churn, long-term drop-off, etc.  

Company Culture and the 90-minute 15-minute Meeting

Company culture is a funny thing.  It’s as essential to the success of any company as anything else, and yet typically gets little serious attention.  We may think about it now and again, but in most companies it happens when no one is looking; there are always seemingly more important things to worry about. The popular wisdom is that the company culture is a reflection of everyone in the company, but most of all of the CEO’s and others leaders’ strengths and weaknesses; for better or worse I believe that’s true (and any company leader should be humbled a bit by that, I think).  Certainly culture is an emergent effect that’s difficult to control. And yet I believe strongly that it has an effect on the kinds of products we produce and how we feel about the experience afterward.

(Hmm, no pithy question or call-to-action here; I’m interested in what makes company culture work – read on, and please add your thoughts!)

One More: Integrating Design, Virality, and Monetization

In a gracious reference to one of my posts, Aki Jarvinen makes a great point about viral design: it can’t be tacked on at the end of creating the gameplay.  Like monetization (my point earlier), virality has to be integrated in, or else what you end up with is a Frankenstein’s monster kind of game, where the discrete parts do not play well together.

One Winner or Many? How the Business of Social Games May Be Differently Different

In a recent Technorati post, “The End of Social Gaming As We Know it?” there’s an interesting quote from Keny Yager at MorrisAnderson: “I think we are still in the wild, wild west of the social media experiment. There is going to be one winner and 100 losers.”

I hear this kind of thing a lot.  The first part is certainly true; the games industry is in a period of fast expansion and evolution — breathtaking even for an industry used to rapid change.  The second part seems to be based on a lot of industry history, where there’s typically been a king-of-the-hill reality: for those games depending on retail sales, the top few make all the money, and the rest go begging.  In MMOs, there was a broader base – at least prior to World of Warcraft, back when crossing the 100K player gap meant you were successful.

But there’s good evidence that social games (as a broad category) are different right down to the structure of the marketplace – they’re not just different as games, they’re differently different, requiring a new way of looking at design, development, production, funding, customer relationships, and overall commercial success.  If you look at social games developers from the point of view of a standard (venture) investor, then there are likely to be one or a few big winners – companies with billion dollar valuations.  But that misses most of the picture, like the proverbial iceberg.

In Praise of Ethics and Money, Part 2

Here’s my thesis: when you allow game design to be separate from monetization design, you divorce design from creative control – and the game experience inevitably suffers.  Oddly, this separation has been the case for so long in our industry that (outside of the scruffy indie crowd) we’ve all sort of accepted this as just the way things are.  Going the other route, making monetization an integral part of design, can lead to scamming your players – or to experiences they see as inherently valuable.

And unfortunately, this separation has led to a sort of ivory-tower entitlement on the part of many designers: “let me design the perfect immersive experience, and I’ll let the mercenaries deal with extracting money from people so we can get paid.”  I believe this is the source of a lot of the squawking now about ethics and monetization – yes, we should behave ethically in all our dealings; but designing gameplay to support monetization is not inherently unethical!  And even more unfortunately, I think it’s led us to largely forget or ignore the possibility of creating experiences for which unethical scamming is entirely unnecessary.

In Praise of Ethics — and Money, Part 1

There were a few topics that bubbled up at this year’s GDC and in follow-up blog posts:

• The impact of social games as something more than a fad
• General disdain for Zynga as a game developer, if not as a money-printing machine
• Game designers having to confront monetization in and as design

The first is exciting; the second is predictable, deserved and unfortunate.  The third is inevitable, and not nearly as unwelcome as many seem to think – I believe this is actually an important victory for game designers.

I’m going to cover this in two posts: ethics first, then monetization-as-design.

GDC Trends: Anxiety and the bandwagon. Also, hats.

From the first day at GDC – I’m mainly attending the AI Summit and Social Games Summit.    Every year I watch and listen for trends, to get the vibe of where the game industry is and where it’s going.  Thus far, I’ve seen a few things – an unnerving anxiety, a fast-rolling bandwagon.  And hats.

GDC Week & Predictions

Like a lot of others, I’m heading to GDC today.  I’m mainly going for a couple of summits, some meetings, and to see people who are good friends whom I see once or twice a year.  It’s a bit of an odd sort of relationship, as it feels sometimes like a deadly serious meeting of circus clowns.

Anyway, I’m not going for the talks (and am not giving one this year)… and so I have pretty low expectations of anything significant coming out of them.  But as this is also sort of the beginning of the game-year, I thought I’d take a few minutes for some pre-GDC predictions for the conference and for the rest of the year – social games, MMOs, 3D, AI, the works.

The Mysterious Revenue Gap

One of the big questions with people looking at social games is, “sure they have lots of people playing, but how much money do they really make?”  The amazing thing is, there’s actually data available on the web to answer this.  For once entrepreneurs and other game developers aren’t left completely in the dark trying to figure out what they may reasonably make on their game.  And this data identifies not only a great revenue stream, but an interesting gap.

It turns out that the question isn’t whether these games are making money – the question is, why aren’t they making significantly more?  In fact there are similar games making as much as 5x or 10x more than social games currently are.  So why the gap?