Entries from August 2007 ↓

This picture is doing the rounds of the gaming industry. It depicts Ian McDiarmid playing the evil Emperor Palpatine in the Star Wars films. However it bears an uncanny resemblance to a long serving games industry person, hence the picture doing the rounds.

So who in the industry do you think this is a dead ringer for?

Brilliant news, this. EA have been caught out editing their entry on Wikipedia and are making weasly excuses to explain themselves. Loads of other companies have also been caught out.

It is interesting that EA chose to erase Trip Hawkins from the pages of history. This is a bit like denying your parentage. More understandable was their deletion of bad staff treatment and the resulting class action. Something they obviously want to gloss over.

To tell you the truth I would have done the same. But not left the trail of evidence. It is important at so many levels to look after the image of the company. If there is a widely used source of information, as Wikipedia is, and you can easily spin that information the way you want, then you are going to. You would be remiss not to.

I am so modest, shy and retiring that I only merit the one Wikipedia mention and I have no need to edit it because it is pretty much spot on. Of course, if it weren’t…

It was the open nature of Wikipedia that allowed EA to do the evil deed and it was the open nature of Wikipedia that found them out. Excellent justice. As a computer/technology firm they should have done it more skilfully; getting caught was a worse indictment than actually doing it.

So have you doctored Wikipedia for commercial advantage? Tell us about it, or anything else you want to say by clicking comments.

In August MTV announced that: “we’re putting well over $500 million behind building our games business across all of the brands in our portfolio.” A sensible move. Ultimately games are going to be far bigger than TV so sooner or later any media company is going to have to make the switch in order to look after the interests of it’s shareholders.

This brings us to the BBC, the largest media company in the world with an annual budget of £4 billion. It has beeen building a storehouse of IP since 1922 and now has many times more than the entire games industry put together. But it has no shareholders.

The BBC is a semi autonomous part of the British state and is financed by our only hypothecated tax. It is run and controlled largely by very intelligent and well educated Oxford and Cambridge graduates. These people have mainly never been in the real world of business and so lean very much to the left politically. Jokers said that the BBC stood for “Blair Broadcasting Corporation” presumably that will now be Brown. The left wing bias of the BBC is hidden because their influence is so all pervading that whatever stance they take is seen to be the middle ground. However they constantly report the American neo conservatives as if they are the devil’s spawn (they could be right!) and they have taken on board man made global warming as some sort of political correctness, not the unproven theory that it is.

The BBC were very internet savvy from a time when Bill Gates was still in denial. They have built a massive and ever growing internet presence that is probably unrivalled by any other content generator and IP owner in the world. They have constantly been at the forefront online and their achievements are outstanding. It is as if they have seen the internet as the replacement for conventional broadcasting and so have invested huge intellectual energy and massive funds to make the switch. It has put them very firmly in the number one position as a global media company of the internet age.

If you have read my article  We are still at the beginning of the industry.  you will know that gaming is set to become bigger than TV, bigger than film, in fact it is set to become the biggest media industry ever. Every existing media organisation needs to be on board to prosper. Many have made their move, MTV being the latest.

So when will the BBC make their move? They have the IP, they have the global marketing presence and they have the brains. But do they have the commercial savvy? Thus far they have lightly scratched the surface of the gaming industry with indifferent results. What is needed is the same strength of purpose that they have applied to the internet. If they used their IP with craft they could open up many whole new genres of gaming and be the catalyst for the industry to finally grow up and realise it’s capabilities.

So, comment away!! What do you think the BBC and other big media companies can and should do?

Looking at how they have acted over their long history you have to say that Microsoft are a monopolistic intellectual property broker. Their products have never been particularly good, just good enough for the job, and usually then only with V3.0 or later. They have achieved their position by skilfully wielding monopolistic power.

Firstly a quick history. Bill Gates dropped out of education to found Microsoft to provide computer languages for early microcomputers. Their big break came when IBM asked them to make an operating system for their forthcoming PC and they craftily built the right to sell it to other people into the contract. Compaq and the other IBM clone makers came along and they bought their operating systems from Microsoft who eventually found themselves with a near monopoly. This they used to lever themselves into the application market, pretty much destroying the incumbents. Bill Gates, famously, didn’t get the whole internet thing and it took all their monopolistic power to get Explorer to destroy Netscape. But they missed the boat completely on search and for once Microsoft were the ones who were walked all over, by Google.

The whole console thing is a power play by Microsoft to do in the home what they have done in the office. It is a razors and razorblades attitude, just like at Sony. But whilst Sony are a manufacturer of boxes and see the media standard as king, Microsoft are an intellectual property broker and see the software platform as king. When it came to the console Microsoft could have just created a hardware standard for others to manufacture. I am sure that they have considered this many times. However they once tried this and had their fingers burnt, with MSX in the 1980s, so they were forced to make their own hardware this time. A situation which gives them more control and power, which they like.

When they designed the Xbox all Microsoft did was to take a PC and remove the keyboard and the un-needed bits of the operating system. This made it very simple to design and cheap to make, using standard parts. More importantly it was a platform already well understood by the world’s programmers with plenty of tools already available. Microsoft built on this, using their vast software knowledge, to make the Xbox as easy as possible to develop for. This contrasts very strongly with Sony who present developers with challenges with every new platform because they insist on doing the hardware their way.

To give you an example of how unimportant the hardware platform is to Microsoft and how important the software platform is (the reverse of Sony) take a look at Xbox Live. This online software platform cost more to develop than the Xbox did. In fact it could be argued that Xbox live is the real product and that the Xbox console is just an enabling mechanism to create members. Certainly Microsoft have identified this as the critical area in their battle against other gaming platforms and they have invested very heavily to pull out a substantial lead here. And they could be right. Xbox Live could well be what gives Microsoft the near monopoly in the home that they already enjoy in the office.

What Microsoft and Sony do have in common is the ability to throw money made in other areas of their business at the establishment of new game console standards. Both heavily subsidise the retail price of new consoles in the hope of recouping their money later with game sales and online subscriptions. Microsoft are lucky in that their near monopoly on the PC is one of the biggest cash cows ever invented so the $4billion they lost on the Xbox in it’s first four years is insignificant. In fact Microsoft will not see this as a loss, they will see it as the price for buying position and power.

It could also be argued that, in their corpulent middle age, Microsoft have lost the plot and are banging their heads against a brick wall with a flawed strategy. That more nimble and quicker thinking competitors (Nintendo) are just making Microsoft look like a steamroller that is running off in the wrong direction. Certainly, one would think that Microsoft could build more USPs into their product. Further criticism of Microsoft can be made in the way that they have totally missed the Web 2.0 boat.

Personally, I think that Microsoft could end up owning the dominant home gaming platform. But it will take them a lot longer and cost them a lot more money than they ever expected. They have not made life easy for themselves with the way they have done quite a few things. However, Xbox Live could gradually emerge as the gaming standard. I have written in an earlier article how we are still just at the beginning of the gaming industry. This being so Xbox live could grow to be an even bigger cash cow than the PC has been for Microsoft. If I was in charge I would be investing very heavily into making Xbox live the best social networking platform possible, they could build on what they already have to create something very special indeed. Then a 360 would be a must have purchase. And the games would roll out on the back of it. Also I would introduce an Xbox Live phone, this would integrate with the home console games and with the social networking and so would also be an essential purchase. There are infinite possibilities here.

As ever please Comment away. I could be misguided, misinformed, jumping to false conslusions or just plain stupid. Have your say by clicking on the link below.

I remember several years ago Prince Charles said that children should stop playing computer games and read a good book instead. This was very widely reported in the Fox News/Daily Mail type media as if what he was saying was good common sense truth. In fact, as has been proven, he was 100% wrong. The exact opposite is true.

Since the industry started the behavioural experts have been looking at computer game players in an effort to find something wrong. And what do they find? Game players have better hand eye coordination, well this is hardly suprising. They have better problem solving skills, once again you would expect this. They have better social skills, this is the big one, the Daily Mail/Fox News types don’t understand it but anyone who knows anything about games knows it to be true.

At this stage it is time for an anecdote. London Taxi drivers are usually ex servicemen, ordinary soldiers, who must know every street in London and the quickest way between any two locations. This is a huge amount of data to store in a brain and each journey requires a big lot of processing power. Before they get a cabbies license they have to pass a very tough exam called the “knowledge”. In preperation they spend a year driving round london on a small motorcycle. Any visitor to London will be familiar with the sight of these trainee taxi drivers. Now the interesting thing is that they have measured the size of the brains of these people. And they get physically bigger during the year. Yes, your brain is not what you were born with, it adapts as necessary and can become more powerful if it needs to.

So let’s compare books and games. Firstly books are a passive, one way device. You just slowly absorb the printed data on the pages. Games are interactive, a two way process. Secondly books are a very slow way of transferring data into a human brain, games are several fold quicker because they use moving images and sound. Thirdly books are positively antisocial, they are a solitary vice, unlike gaming which is mostly social in a variety of different ways. Fourthly books have a very weak reward structure whereas games have a rich and varied reward system. Fifthly books are limited in their content by physical constraints, games, because they can be connected to the internet, have the potential to access virtually all human knowledge. Sixthly and finally books are limited in that you slowly download the data from them in a linear sequential manner, this is not how the human brain and life in general work, gaming has huge and total non sequential capabilities which make them vastly more rewarding and really speed up the rate at which the human brain can absorb data. In fact gaming puts you in the position of a London taxi driver in a way that books never could, they give the brain a far more thorough workout. The fact that the subject matter of most games is currently very limited is a problem that the industry is only just scratching the surface of and will be the subject of another article. For the moment this is one area where books have games beaten.

Over time it is inevitable that the use of books will decline in favour of gaming. In fact the very nature of what we understand as gaming will change enormously. The capabilties of gaming machines are so vast that it will take generations to realise their potentials.

So what do you think? Use the comment box below, you can tell me how wrong I am if you want.

Once again this is a story I was involved in so I will try and be as modest as possible!

In the mid 1980s the games platforms of choice were 8 bit home computers made by Sinclair and Commodore which used audio cassettes as media. Piracy was endemic so the industry responded with “budget games” which were priced at £1.99, so they were hardly worth copying. However the operating margin of the publishers was wafer thin.

I was at a new publisher called Codemasters, in charge of marketing, with a budget of slightly above zero which I spent mainly on PR and trade advertising. We created a brand with the consistent message that these were in fact full price games and that the only thing “budget” about them was the price. This was largely true with the “simulator” series written by the Darling brothers and the “Dizzy” series written by the Oliver twins being the most famous. We succeeded in getting 12 different Dizzy titles to number one in the Gallup charts. Jim Darling used his considerable business skills to make the whole thing work. We shovelled immense numbers of cassettes out of the door but it was not immensely profitable at such a low pricepoint.

Now for an anecdote within an anecdote. At that time the magazines added value by covermounting game cassettes. I persuaded the Oliver twins to let us covermount one of the Dizzy titles on the best selling Sinclair magazine which in those days had a circulation of several hundred thousand. The idea was to build the Dizzy brand and we expected the covermount to kill retail sales dead so we obviously chose a title that had been out for a few months. We were wrong, after the magazine came out the retail sales of the game went up! What had happened is that the covermount had introduced the game to new people and they liked it so much that they wanted a “proper” version of the game. £1.99 was little resistance so they were quite happy to go and buy a games they already had.

So, back to the main story. Eventually we decided to try putting our prices up but we were very nervous about losing sales. So we came up with a crafty plan. In those days there was a constant stream of titles, so one month we told the world that the new titles were going to retail at £2.99 from then on. But the crafty thing is that we told all our trade customers that the trade price would remain the same for the first month. So they made a huge amount more profit. So they bought them like crazy. And the new, higher priced titles dominated the top of the charts. Just before the end of the month we rang round and told our customers it was their last chance at the old trade price and they filled their socks so we dominated the charts even more. Of course after these had sold through they had to re order at the new price and as we dominated the charts they had no option. The £2.99 price point was established and we had increased market share on the price increase.

Then came the masterstroke. We told our trade customers that the retail price on our entire back catalogue was going up to the new price point of £2.99 from a certain date, but that they could continue to buy at the old trade price for a month after that date. They saw a second opportunity to make a killing and sales of our back catalogue shot up. Many of them re-entered the charts, which we then had total domination of. Once again they filled their socks with massive orders just before the deadline. And once again they had no option but to keep on buying at the new trade price once they had sold this stock. Some of these older games went on to make more profit for us at the higher price than they had at the lower price.

In those days the charts were compiled by Gallup and our market share as a publisher peaked at just over 27% of the total UK all formats chart. In fact it was probably higher as we used a lot of channels that our competitors didn’t (we put thousands of racks into all sorts of retail, for instance) and which weren’t measured by Gallup. Obviouly our competitors followed by putting their prices up but they did not do it with the same guile so they lost the opportunity to use it as a tool to attack our market share.

Codemasters became a lot more profitable. We had vastly increased sales, but more importantly, our profit margin had multiplied several fold because our costs remained the same. The company was less than a year old at this stage and this move on price consolidated it’s position as one of the major British publishers.

So what do you think of this? You can use the comment feature to let everyone know.

As a company Sony is completely different to Nintendo and Microsoft. Sony is a manufacturer of boxes containing electronics which has a strange obsession. Once upon a time they were the “in” brand with good looking kit that worked well but now they are looking a bit middle aged and have missed out on major market areas and been convincingly outperformed by newer kids on the block such as Apple, Nokia and Samsung. Sony own a lot of technology and are a fully vertically integrated manufacturer. They own everything from chip factories to retail shops.

Being a box manufacturer Sony is very welcoming of third party content, being just a box manufacturer they really desperately need to have other people make this content in order for people to want to buy their boxes. It was this emphasis on third party development that made the games industry what it is today. Sony wanted as much different content from as many different publishers and developers as it is possible to produce. It doesn’t bother them if there are (by example) four different rally games that all do the same thing, let the market decide what it wants. This policy worked amazingly well. The games software industry grew enormously and Sony walked all over Nintendo. Virtually all the major games publishers owe their current position to Sony.

Sony’s strange obsession is media formats. Gillette can make a loss selling their latest razor because they make such enormous profit on the blades that only they make for that razor. Sony try to do the same with electronics, hence their love of games consoles. Famously they lost the video recorder war between Betamax and VHS which has scarred their action and thinking ever since. In a move that they thought would give them the upper hand they invested hugely to become a major content provider (publisher) in both the record and the film industries. This investment was intended to prevent Sony media formats falling on their face ever again. It hasn’t.

When Sony designed the original Playstation they fitted it with a CD drive, a media that they had jointly developed with Philips.  For PS2 they fitted a DVD drive, but this time they were a smaller player in the consortium that created the media so now they are using PS3 as a Trojan Horse for the Blueray standard which they jointly own with Panasonic. The PS3 (alongside the Sony film studios) is the front line of their battle against the HD DVD standard of their competitors. It is worth noting that the companies that have outperformed Sony at making boxes in recent years, Apple, Samsung and Nokia, have no interest whatsoever in media standards. It could be argued that their lack of such an obsession has given them clearer minds to give the customers the boxes full of electronics that they want.

I was at E3 when the PSP was launched with Sony’s latest attempt to create a new media standard, the UMD drive. Nintendo launched the DS at the same E3 and when I told some of the Codemasters directors that I thought that the DS would be the most successful of the two devices they laughed. Sony was at the height of their PS2 pomp and could do no wrong. So we wasted lots of money putting the wrong sort of games onto the PSP whilst putting nothing on the DS. A clearer understanding of the two companies may have prevented that mistake.

Sony’s obsession with media standards could end up making them come third in the current console generation war. By using an expensive Blueray drive and an expensive Cell processor (another new Sony standard) they have created a console that costs a lot more to make than it’s competitors’ consoles whilst at the same time not being appreciably better. If they had just wanted to make a good console, without any political influence from the rest of the company, Sony could have created something that was both better and cheaper to make. They really have shot themselves in the foot.

So there we have it. Sony is a manufacturer of boxes with a strange obsession. Am I right or is there more to this? Post your comments if you think so.