Monthly Archives: August 2013

Big Risk, Big Reward – how video games are no different from Glengarry Glen Ross

The video game industry is an amazing microcosm of capitalism.  Businesses rise and fall.  They invest, research, innovate and create, all with a view to make a few extra dollars and more importantly compete in the marketplace.  Publishers and investors are speculators in the industry merely looking to put their chips on a winning number.  It’s business, pure and simple.  But at the fringe of that you’ve got the guys doing it for the love of the art, the socialists, commies, hippies.  These are the indies that we all know and love, putting their creativity on show for us all to enjoy.  It’s ‘You’ve got mail’ or the original film on which it is based ‘The Shop around the corner’ playing out right in front of our eyes.  People love a good David vs Goliath story and that’s exactly what the industry is giving us at the moment.  We simply can’t take our eyes off of it.

But it would be remiss to think that all parties aren’t doing it for the money.

Video games like any form of entertainment built on trying to capture expendable income and is a highly competitive business with platform holders, publishers and developers all jostling for position on the podium.  And you don’t have to look far to see symptoms of the industry’s fantastic health.   Platforms, in most cases, are loss leaders.  That is they sell the main console hardware itself for a loss, underpinned by an assumption that profits from complementary goods and services will fill the red in the books with black.  And there is plenty of room for recovering any losses incurred in one business unit or area through cross-subsidisation given that in 2012 the video game industry was worth around $78 billion globally according to Reuters.  By way of comparison the International Federation of the Phonographic Industry (IFDA) estimates that the recorded music industry was worth just shy of $40 billion in the same year.

Games are undoubtedly a growing industry and big companies and their shareholders, including platform holders, intend to keep it that way.    Development costs have soared, with one of the latest big releases, Disney Infinity, reportedly costing upwards of $100 million to develop.  It’s a big risk, but a big reward if it hits the mark.  Software is never a guaranteed to be success, and so substantial costs are incurred with selling these products -marketing, messaging, community, public relations.  It’s like a well oiled political machine trying to spread the message that its game is the next big thing.  Sometimes it does, but other times it doesn’t.  Either way it’s business and business is ruthless – celebrating the successes and punishing the failures by studio closures of consolidation.  An agreeable altruistic pastime video games is most certainly not.

And so we see the rise of the Indies, the saviour of creativity, the last bastion of hope for the free developers’ world, the guys sticking it to the man.  These are the people the community hail as the real artists who care about games as a creative outlet and endeavour and are not in it for the money.  The rise of indie developers has defined the tale end of this generation and will define the start of the next, depending on your definition of what an indie developer is, of course.  We’re seeing names of boutique development houses, celebrity indie developers and indie-super groups thrown around at the virtual water coolers that are forums and websites.  Praise and adoration is heaped enmasse to the minimalism, pixel art, environmental storytelling and unique situations and concepts often contained within these low-fi video games.  The indie game has become more than just about ‘indie’ or ‘DIY’, but more about the feel and mentality behind it all.  But the community itself clings on to the commerciality argument as to some way paint these people as the struggling, starving artists – the Vincent van Gogh’s developing pieces of art.  It is in this way that these indie-game fanatics that hold them up as the messiahs of creativity and innovation in pursuit of nothing but the love of the craft. and in doing so present an either/or situation where its the good  versus the bad.

IndieGTM

But are the indie-tragics setting themselves up for a generation of sellouts as the sustainability of these studios and individuals bites their bottom lines and they’re forced to sell themselves or their ideas to the highest bidder in order to put food on the table?  Maybe not.  But the push for self-publishing on both of the major consoles is a clear signal that these guys want to be on more platforms, for more people with the end goal of selling their products to more consumers.  If it were simply about games as a creative outlet their would be no dogged pursuit of removing barriers to entry in certain markets.  Far from a dramatic artistic statement, they just want equality when it comes to the ability to appear on as many storefronts as possible.  And that’s okay.

But is it really US versus THEM?  Well no, not really.  The approach may be different but the end goal is the same for both groups, to differing degrees.  It definitely can be argued that publishers have moved to a more profit maximising, and often-times risk averse, business model.  This can in some cases lead to less innovation and creativity and more reliance on what the market tells it in wants through sales figures and focus groups.   But with every truth in all of that there is a falsehood. There is no doubt that the independent nature of these indie guys and girls gives them full creative freedom. It is true that they are not held back by profit and lost statements of publishers or shareholders’ needs, but in most cases they are constrianed by the same commercial realities as Electronic Arts, Activision, 2K or SEGA, just orders of magnitudes lower.  Where indies need to only cover the costs of their development plus their costs of living, big commercial businesses have far more riding on what their games bring in.  Shareholders expect dividends and decent prospect for future earnings, as do private investors and equity partners.  Large publishers just don’t have the flexibility to run their operations on the certainty of short term losses, but only the prospect of a long term gain.  And so this pressure trickles down to developers.  It isn’t a loss of creativity it is an economic reality, and one that most certainly isn’t confined to big business in the long-run.  If revenue isn’t covering costs of living or recouping costs of devlopment, one day creativity will make way for smart-business decisions.  And that may mean increasing prices – even in the indie space.

We all love video games because they provide us with escapes from our daily lives, the grind of work and relationships, or an opportunity to experience the fantastical.  An artist will say that they are thrilled at the prospect of the smile on someone’s face, but really like all of us, they are likely looking forward to the big pay cheque when the man and woman all dressed in fur come in and decide that the canvas will look nice above their mantelpiece.  It is nice to think that this is all one big happy family who are doing it for the love of the craft, and that may be the case in some instances.  But the video games industry and its players are driven by the same desires and needs of any other within a capitalist system – and for the most part they’re all just chasing the Glengarry leads toward the next big paycheque.

gggr screen adve

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I’ve finally seen Apollo Justice through to the bitter end

Ace4CovercompI’m a big fan of the Phoenix Wright games, as regular readers will have gathered from my glowing reviews of games one, two and three in the series. But Apollo Justice: Ace Attorney – the fourth game – almost defeated me.

I was keen to complete Apollo Justice ahead of the release of Ace Attorney 5 in the autumn, but there was a point about halfway through where it felt more like a slog than anything vaguely enjoyable. I seriously considered just jacking it in and looking up the ending on Wikipedia.

The game doesn’t start terribly well. It’s set seven years after the last game, and Phoenix Wright has now become a drunken gambler after being fired from his job for allegedly forging evidence. As far as openings go, it certainly has shock value: the superstar lawyer you’ve been playing for the previous 70+ hours has now turned into… well, frankly, he’s an absolute dick. It’s a bit like going to visit your favourite uncle only to find that he now spends his days drinking Special Brew on a park bench and can barely remember who you are. Oh, and he now has a daughter, for some reason.

Phoenix... what happened?

Phoenix… what happened?

Instead, you step into the shoes of the young Apollo Justice, a rookie lawyer who frankly isn’t a patch on the Phoenix of old. Whereas Phoenix would occasionally be nervous in the face of overwhelming odds but always fought through with a steely will in the name of justice, Apollo just hasn’t a clue what he’s doing. It’s a humiliating comedown to step into the shoes of an amateur after being a pro for so long. It’s telling that the high point of the game is getting the chance to ‘be’ Phoenix again right at the end – it made me realise just how much I’d missed him for the rest of the game.

But boy, that high point is a long time coming. After 20+ hours of gameplay, the mysteries of the past are finally revealed and Phoenix is absolved, but in the meantime you have to slog through easily the worst cases of the series so far. In one, a tiny, apparently blind boy who speaks no English and has no motive is on trial for shooting a man with a .45 Magnum that it’s claimed most adults wouldn’t be able to use. If that doesn’t make any sense to you, it’s because it really doesn’t make any sense. Throughout, the writing is flat and sometimes idiotic, the characters are dull, and the prosecutor you face off against isn’t a patch on the previous ones in the series.

There’s a slight return to form in the final case, which eventually ties together all the plot lines that have painstakingly been laid down over the rest of the game, but it’s still not a patch on the previous games. Here’s hoping that Ace Attorney 5 marks a return to form.

[As penned in disappointment by Lucius Merriweather.]

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So I’m kinda Disney’s b*tch now

It wasn’t even deliberate, I just did it.  I bought into Disney Interactive’s $100 million-plus gamble, Disney Infinity.  And not just the starter pack, but all the playsets and all the individual characters.  Chuck in a few power discs for good measure?  Why not.  $250AUD later and I had two full bags of Disney Infinity wares.

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The combination of my partiality toward all things Disney and the proven track record of developer Avalanche Studios definitely pulled at my wallet-strings after I narrowly avoided the toy-game craze that is Skylanders (which netted Activision Blizzard a cool $1.5 Billion in revenue).

Honestly, I feel slightly dirty.

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Speechless. How the Last of Us took my breath away

Last-of-us-cover-1024x1024 As the species at the top of the food chain, humans – particularly in the more affluent countries – don’t really know what it is to struggle to survive. We complain about the job we didn’t get, about the price of petrol and food, and about the girl or boy that got away. We even complain about our own ‘brothers and sisters’ seeking refuge to escape persecution or war. But our survival isn’t about life or death, it’s about luxury, wealth and pleasure – and we have forgotten parts of our humanity in the process.The Last Of Us reminds us what it is to be human.

The world envisaged by Naughty Dog is a bleak one. The Last Of Us tells the story of humanity being brought to its knees after the rapid spread of a fungal infection that renders its victims walking dead, with only a few quarantine zones as the last bastions of hope. Those that remain are fighting to survive, scrounging for food and supplies, fighting against their infected foes and turning on each other in a bid to stay alive.

The Last Of Us is breathtakingly stunning. The buildings are crumbling after years of neglect and the trees have overgrown our once great architectural achievements. But the sheer artistry of Naughty Dog’s artists and designers makes this destroyed world beautiful and brimming with detail. These aren’t just kill boxes, or walled environments covered in detailed textures, they are homes and workplaces, restaurants and shops. The world feels real and lived-in, and is stunningly realised. It manages to paint a bleak picture of the world you’re playing in, while still oozing with beauty and an impossible serenity. The frantic moments where you are fighting for your life are masterfully punctuated by stretches of exploration, time for you to stop and take a breath and admire the beautiful world. And you will feel compelled to explore each and every nook and cranny. Each and every location tells a story – the homes that were evacuated in a hurry, coffee still on the table and childrens’ toys on the the bed show the panic at the onset of the pandemic. The people that once lived in these cities may be dead, but the environments have all had life breathed into them by first-class craftsmanship. TLOUss You play as Joel, a battle hardened and world-weary man who lived through the onset of the virus and suffered his own losses in the process. Early in the game he is partnered with Ellie, a sharp-tongued teenager who knows nothing other than life in the quarantine zone. And it is the interaction between these two, an odd-pairing, and the people they meet along the way that brings it all together into one cohesive whole. Ellie in particular left me in awe of how real these characters feel. Born after the event, Ellie is inspiring in her observations of the world she never knew. Her new-found obsession with comic books, her curiosity at pop culture are refreshing – watching her flick through records in an abandoned store is one of the most amazing moments in any video game I’ve ever played. Similarly her dismay at the horrible acts committed by able-bodied and -minded humans against one another are haunting and disturbing reminders of just how bad we can be as a species. But amongst all of this there is this amazing sense of hope emanating from her character. She embodies the side in all of us, admittedly or not, that can see through the horror and the hopelessness to what could be. And it is the way that this hope gradually rubs off on Joel, the hardened survivor of the wasteland, that makes it a jaw-dropping and heartwarming depiction of the importance of relationships in our daily lives.

I felt like I was Joel and by the end of the game I felt like I knew Ellie as well as anyone in real life. I would do anything to protect her, and whenever we were seperated my heart remained in my mouth until I found her safe and unharmed. I felt like I had lived through the nightmarish hell that these characters had to go through just to survive. The places, the situations, the near death experiences, the kills and the loss – they all now sit firmly in my mind as if they were my own memories. And while there are no polaroid pictures or diary entries, that 16 or so hours I spent making my way across a depressing and dilapidated version of the United States of America felt like a burden I had to bear. While the Last of Us is a brilliantly designed game that is moment to moment a blast to play through, the mechanics of the game, the controller in my hand, they were all irrelevant compared to the characters, the places and the story that Naughty Dog has told. The Last Of Us wasn’t a game, it was a journey. And it was a journey that has left me speechless.

[penned in place of words by Sir Gaulian]

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ZombiU: The Scariest Game I’ve Ever Played

zombiu box artI only finished ZombiU a few weeks ago, despite buying it when it came out in November 2012. This isn’t just because it’s hard to find time to play games these days (although I do struggle to fit them in), it’s because I couldn’t play it for more than an hour without wanting to rush round the house turning all the lights on.

It’s easily the scariest game I’ve ever played, and it’s a masterclass in manipulating tension. Whereas Resident Evil specialises in cheap scares to make you jump, like those dogs jumping through that window in the first one, ZombiU creates a sense of palpable dread. You find yourself constantly listening for the ‘ping’ that warns of an approaching zombie, then cautiously shuffling forward in grim expectation of what lurks behind the next corner.

This is a very bad situation to be in. One bite and you're dead.

This is a very bad situation to be in. One bite and you’re dead.

The secret to its tension is that you can die very, very easily. We’ve got used to games like Dead Rising, where zombies can – literally – be mown down with ease, but in ZombiU even one undead Londoner can take you out quite easily. Meet two in a room and the panic starts setting in. Meet three and it’s time to run like hell in the other direction.

Adding to this is the fact that when you die, your character stays dead. Well, undead in fact – when you leap into the body of the next survivor, your first mission is to track down your previous character and retrieve your precious backpack from their undead clutches. You only get one chance to do this too – if you die on your way to retrieve your stuff, it’s gone forever.

It’s refreshing to play a game where death actually means something – all too often it’s just treated as a minor inconvenience in modern games, but ZombiU shows us a different way forward. Not only do you lose all the stuff you’ve worked so hard to attain, you also lose any skills you’ve built up with that character. But perhaps more importantly, you lose the character him/herself. You can’t help but build up a fondness for your avatar, particularly if you’ve managed to keep them alive for a long time, so when the inevitable death comes, it can be devastating (see ‘KAYLA MITCHELL IS DEAD‘).

Oh god, the Nursery. I'm still having flashbacks about this bit.

Oh god, the Nursery. I’m still having flashbacks about this bit.

All of this means that every encounter with a zombie is fraught with tension, and playing the game forces you into a state of heightened awareness as you constantly remain hyper-alert for any sign of possible danger. Ammo is in short supply too, so most encounters involve getting up close and personal with a cricket bat, rather than spraying and praying from a safe distance. All of which leads to dangerously high heart rates, all of the lights being turned on and frequent cups of camomile tea to sooth frazzled nerves.

There are a few rough edges of course – graphically the game can look a bit ‘muddy’, and it could do with a bit of a polish. Still, the dull palette suits the grim atmosphere, and I love the fact that it’s set in London, and mostly in Brick Lane of all places. The plot is a little hokey in parts, but the ‘Prepper’, your guide, is a great character – I’d love to see his role expanded on in a sequel.

Sadly though, it looks like a sequel isn’t forthcoming, which is an absolute crying shame. ZombiU is one of the most innovative and clever games of this generation, and by far the scariest. Here’s hoping that if or when sales of the WiiU turn around, Ubisoft might reconsider its rash decision.

(As penned in terror by Lucius Merriweather.)

Buy ZombiU for Wii U from Amazon.

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Applying the concept of economic scarcity to F2P

I respect the current models designed to monetise free-to-play games. They use that ol’ chestnut concept of ‘opportunity cost’ to encourage players to internalise the value of their time, and convert that into revenue for the publisher – that is if their time is worth more than the price set for goods and services in game, they’ll plonk down some cash and be on their way.  It is a system that obviously works so well that it has become the industry norm.   But diminishing returns are setting in, some of the bigger free-to-play developers and publishers are struggling to reach the heights of profit they have in the past, and players are using free-to-play as just that.  Something that is absolutely free.

It’s time for a change.  Opportunity cost has run its course, and so its time to employ another one of those brilliant economic concepts to try and get the money flowing again.

The problem with these free game economies is that they aren’t closed.  They are effectively infinite in supply of goods, as long as demand for those goods keeps coming.  This means that prices for those goods don’t shift even if there is a great shock in demand.  ‘Resources’ and the goods therein are, whether it be loot drops, resources required to tend to crops or lives are all in infinite supply and largely only restricted by arbitrary rules placed on the player.  This leads to a situation whereby most players won’t convert into revenue unless the condition whereby their time or progress in the game is worth more than their valuation of the cost to purchase those commodities, and outside of this there is no real disadvantage to staying ‘free’.  This may only be a small proportion and for those with ample time, or low value of progress in the game, there is never an incentive to move away from the notion of free entertainment.

Having a model that eliminates this endless supply would be a decent way to remove this constraint.  We have grown accustomed as players to in-game economies that are not reflective of how markets work in the real world.  But what if a free-to-play video game economy was entirely closed and subjected to resource and item scarcity?  That is that the in-game economy including items and factors of production, are bound by the same rules and restrictions that face markets in real life.  New in game progress can only be ‘produced’ if the factors of production are available, and as the number of players participating in the game increases, so too does scarcity.  Free suddenly becomes more expensive.

So how do you monetise that?  Well the simplest way would be to follow a pretty standard model of providing benefits by way of greater ‘efficiency’ or ‘productivity’.  In the real world the Cobb Douglas production function in its simplest form includes a variable that embodies increases in production not related to capital or labor inputs – defined as total factor productivity.  Generally it is taken as a proxy for innovation, technological change or advancements, or other measures of increased efficiency. By playing with this concept it may be possible to provide the incentive to pay in order to increase a player’s overall personal ‘economy’.   Whether that incentive is a permanent increase in the player’s in-game efficiency, a temporary advantage, or giving players access to a new and unconstrained market in order to ‘import’ goods to sell in the the free-to-play arena.  The aim though is always the same – giving players a way to be comparatively more efficient within a constrained environment.  If well-designed and compelling that efficiency gain will drive progress, the game’s equivalent of revenue.

By imposing scarcity into a closed in-game economy you can remove some of the problems that are starting to plague free to play developers.  Falling revenues and low conversion are likely to continue to be the biggest risk facing developers and finding a new way to price F2P will become an increasing focus for many looking to provide a greater return to investors.  I am a firm believer that a game must be appealing, fun, to a consumer in order to get them playing – spending after all is a function of demand, which is a function of consumer preferences.  A game can’t change a player’s preference, but it can appeal to it. And this should always be the aim of monetization.  While the above idea is abstract, inconsistent and absolutely incomplete, it does point of some of the flaws of current free to play models, and attempts to address them by applying real world economics.  Something needs to change for the industry to remain sustainable, and a scarcity-based model is as good a place as any to start.

Sir Gaulian is an economist by trade and has a serious thing for auction and pricing theory.  Follow him on twitter @oldgaulian and keep the discussion going below.

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