Entries from February 2008 ↓

A group of experts was brought together at GDC this week to discuss what the future holds for video gaming. On the panel were:

• Neil Young. General Manager, EA LA.
• Phil Harrison. Head of worldwide studios, Sony.
• Ralph Koster. Lead designer on Ultima Online and Star Wars Galaxies.
• Peter Molyneux. Boss of Lionhead.
• Chris Taylor. Dungeon Siege creator.
• David Perry. Video Game consultant.

Their universal opinion was that the future lies online with server based games. As has been covered here several times. All you need at home is a connection, a TV and an interface. It makes gaming a lot cheaper because there is no physical product, no distribution chain and no expensive home hardware. The only weakness of this business model that they discussed was latency on the net which can affect action games.

They seemed to think that consoles as we know them are only an interim gaming solution and that already the web is far bigger and more important for gaming than consoles are. And that with the coming upgrades to Flash it would be the next big platform, though there still isn’t a working business model for Flash games.

 Here are some articles about the meeting covering it in far more detail and well worth reading:

• Gamasutra and again.
• Next Generation.
• Gameindustry.biz.
• QJ.net
• BBC

OK, now the following is all supposition and guesswork, so don’t hang me for it in three years time. Also if you have any thoughts on this please add them as comments. This could be a fun debate. What I will do is take each of the three main home consoles in the order that I think that they will be replaced. I will write a quick paragraph about where they are up to this generation. Then a paragraph about what they may possibly do next.

First a massive supposition. Let’s regard the ideal life of a console as ten years with a new generation every five years. Giving the manufacturer a two model range at any one time.

The Nintendo Wii is really just a GameCube 1.5. It has become the fastest selling console of all time because of a brilliant gesture interface, because of some very clever software and mostly because of amazing marketing that has broadened the game playing demographic. Hardware wise it is very much last generation with no hard drive, no HD TV support and the weakest online offering of the three consoles. It was launched to the public in November 2006, so it is just 16 months old. It has probably sold over 20 million units.

Of all three manufacturers Nintendo has the most evolutionary approach to design. So I see their next console as being Wii 1.5. They will probably need to add a hard drive as the industry moves to a downloaded content business model and they will have to support HD TV. It could be given a new model name or just be called Super Wii (very likely) and will be relatively inexpensive to manufacture. It will be backwards compatible with the Wii to take advantage of all those amazing games and it will be announced within 18 months. The existing Wii model may well remain in production to give a two model range. It would be left as a $199 or even $149 entry level model.

The Microsoft Xbox 360 is not part of a two model range because Microsoft did not own the rights to the CPU and GPU in the original Xbox so could not drive costs down. The 360 was first of this console generation to market in November 2005 and has sold over 16 million units. It was designed with great care to be economic to manufacture and undergoes a complete internal redesign every year. Microsoft has learned their lesson and own the rights to the main chips.  When they integrate the CPU and GPU they will be able to sell it very cheaply indeed. $199 or even $149 for the base model, and still make a profit on each one sold. In fact when you look at the 360 it was almost designed to be the cheaper model in a two model range. It wouldn’t surprise me at all if this was Microsoft’s strategy. This machine has by far the best online support with Xbox Live, it is impossible to overstate how important this will be in the future of gaming.

Using our 5/10 year model the Xbox 3 is due in the shops in November 2010. But I think it will be earlier. Firstly because there will be room for it in a two model range and secondly because first mover advantage worked so well for Microsoft last time. It will have a sophisticated gesture interface. With this machine Microsoft has to make a major philosophical decision. Do they want users to store their content on a hard drive on the machine itself or on a remote server as favoured by Google? The remote server has the massive advantage of potentially going to a business model where you pay for what you play, not for ownership of the game. And the added advantage that the consoles can be manufactured more cheaply, which is useful in a retail price war. But maybe broadband won’t be fast enough for Microsoft to make this move with this generation, it is expected to be an adequate 60 Mbit/s by 2012, but that may be too late.

The Sony Playstation PS3 was launched in November 2006, over six years after the launch of the PS2, delayed by technology problems with it’s Cell CPU and BluRay disk drive. It forms part of a two model range with the PS2, which still sells very well. About 10 million PS3s have been sold worldwide despite it’s predecessor being the dominant console of it’s generation. This poor performance was caused by the very high retail price which was a consequence of all the new technology it used. Also it is difficult to develop games on which has been a major stumbling block in giving the customers the games that they want. And Sony showed some less than optimum marketing behaviour.

Playstation 4 should come in 2011 according to our model. I think that this will be the earliest that it will appear and that 2012 is more likely. This because the PS3 is still so undeveloped as a product in the market, it has a long way to go. Also Sony doesn’t have a lot of money to go sooner, a console launch can cost billions. And the year or two (or even three) delay after Xbox 3 allows them to use Moore’s Law to create something very special indeed.

So (and remember that this is rampant speculation) it will be Super Wii first followed fairly closely by Xbox 3 then a gap till PS4. All three machines will be even more webcentric, will be backwards compatible (maybe going back more than one generation), will have sophisticated gesture interfaces and will almost certainly be integrated with hand held consoles. According to Moore’s Law they could have four times the power of the current generation.

In the past I have described the platform holders as evil because of the business model they force on the world and how the current AAA game development and publishing business is flawed and, ultimately doomed. Also the need for more user generated content has been addressed continually. Now Microsoft have answered all these concerns and more in what can only be described as a stroke of genius. Someone at Microsoft really has got their head screwed on properly when it comes to understanding games and the internet. This is amazingly good news.

What it means is that anyone in the world can write a game using the powerful and easy to use XNA tools. That game can then be published in the new Live Community Games section of Xbox Live. It will become like a Youtube of games with, one day, many thousands of games available.

At one stroke Microsoft have removed all the barriers to game development and more importantly to game publishing. We will have a flowering of innovation and creativity beyond anything the game industry has ever seen before. Probably beyond what any creative industry has ever seen before. The last explosion in gaming creativity was the bedroom Sinclair Spectrum coders in the 1980s (we have been going downhill creatively ever since), this will be thousands of times bigger. The possibilities are infinite.

So now all those tens of thousands of frustrated wannabes who think that game designing is the ultimate career can go and become game designers, there is nothing stopping them except the need for a lot of hard graft. And all the keyboard warriors who rant about what games the industry should do can now go and do it themselves. I can see lots and lots of gaming professionals who have a day job with a big developer now working at home in the evenings to develop their own games, realising ideas that their bosses have never allowed them to do.

All this would be impossible if gaming were still wedded to the cardboard and plastic game distribution model. We are in the middle of a revolution where this is totally replaced with online digital distribution, which offers a whole array of advantages, as we are increasingly seeing. Which makes the Blu-ray victory in the media war look increasingly phyrric.

Also in the middle of all the excitement of the announcements Microsoft let a big secret slip. They said that in the future XNA will be available for Zune. So now we know. Zune will evolve into a mobile gaming platform. It will be connected to the internet and it will use Xbox Live. Exciting stuff.

In the console wars this announcement gives Microsoft an immense advantage as they put more clear blue water between themselves and their competitors. This is the sort of advantage that won’t sell a thousand consoles tomorrow, but that over time will create a compelling case for Xbox 360 (or Xbox 3) ownership.

Of course this is Microsoft’s to screw up. How they go about implementation and how they react to inevitable problems will be critical. This whole thing can be very big. Or it can be truly massive. Let’s hope that the people who implement this have the same genius and insight as the people who created it.

• Doctors use Wii Games for Physical Therapy. A nice positive story that shows the ever expanding use of games. Also a prime example of unintended consequence.
• Just how embarassing can you get. A Microsoft demonstration Xbox 360 at GDC gets RRoD. The man from the BBC sees, films and reports it. The story spreads like wildfire on the internet. This is about as big a marketing disaster as you can get. It is going to cost Microsoft a lot of sales. They really should come public now with the problem and what they are doing about it.
• $1 billion is too cheap. So says a VP of Epic in response to the rumour that Microsoft are going to buy them for this amount. There are plenty of good reasons why Microsoft would want Epic. But would they be able to get better value than they did with, say, Rare?
• Amazon to launch digital game distribution system? This makes a lot of sense. They have a huge customer base, they understand IP products, they can see that plastic and cardboard distribution is going to die and they know how to market a big catalogue on the web.
• PS2s for $99. In the Target sale. Here we see one of the advantages of a two model range. And it is strange to think that in just 5 years the current top end consoles will be in the bargain bin.
• The best game industry analysts are only 60% correct. You are far better getting your background knowledge here. Already several predictions have come true.
• Microsoft working on next version of Xbox live. Frankly it would be surprising in the extreme if they weren’t. There are areas in the existing offering that could be a lot better and there are a whole ream of features that need to be added. Plus there is engineering it to work with a forthcoming version of Zune.
• Brain controlled video games. For $299 and goes on sale this year. Imagine Brain Training with this!

Chris Mottes CEO of independent Danish developer Deadline Games has given a very interesting interview. In it he rails against the current industry business model and how it stifles the industry. Firstly he mentions the huge cost of entry that I have mentioned before on here:

“[The cost] just to develop the concept to a point where publishers will take an interest is huge.” Factor in the “safety net of having your own technology”, as Deadline does, “and that increases the cost incredibly. By the time you’re presenting a project [to prospective publishers] on a next-gen platform you’re spending at least a couple of million dollars as a studio.”

It is fairly obvious that this huge barrier stifles innovation by making everyone risk averse. Two million dollars is a lot to lose on a concept if nobody is interested in publishing your game. He then goes on to point out, quite rightly, how the film industry has a much more mature view and that it is surprising that the big publishers haven’t adopted it:

“The fact that more and more publishers are becoming publicly traded would have meant that publishers would start to see the sense, as the film industry did many years ago, in having independent developers that are actually profitable and have a good chance of surviving.”

You can see what he is talking about when you look at how many independent developers have gone out of business or sold out. The numbers are quite frightening. He reinforces his view with the following:

“I have to worry about the fact that this industry is so immature commercially that it sticks hard and fast to a model which crushes the innovative independents forces. “

This is so true and harms the industry and the customer. We need innovation to go forward. He concludes with how he would like to see the industry go forward:

“As entertainment products become more and more complex and commercially onerous you need to build models that allow for the existence of those independent forces that create the IPs”

It is a great interview and I recommend that you read it in full. The fault, ultimately lies with the platform holders. They have created a publishing world that favours blockbuster sequels and film tie ins. Whilst what the industry need is to mature and give our customers a wide range of entertainment experiences. This can only come from innovation and experimentation, yet our business model doesn’t allow for this. So everyone loses.

In 2000/1 at Codemasters I was involved in the marketing of an excellent fantasy combat game for the PC called Severance Blade of Darkness, from the Spanish developer Rebel Act Studios, which launched to some fantastic reviews and accolades. The game soon found it’s way on to millions of keen game player’s PCs, it became popular with mod makers and attracted a cult following. Yet we sold very few of the game. Nearly every player was using a pirated copy downloaded from the internet. So Rebel Act got no royalties and went bust. And the PC community deprived itself of future great games from this talented studio.

So it came as no surprise to me to read that the PC game Riccochet Infinity has a piracy rate of 92%. Quite simply, if you are a publisher of PC games, it is best to regard all potential customers as thieves. Not just ordinary thieves, but skilled and crafty thieves who will apply a lot of knowledge and work to stealing your game. In fact there are people who work in the games industry who crack the protection on games for a hobby. Just how stupid can you get?

We live in an age were many millions of people get away with stealing  (6 million in the UK alone) . And they think nothing of it. They get all their entertainment for free. They download games, music and films at will. They use a technology called bit torrent on peer to peer networks to steal anything and everything that they want. To give you an idea of the scale of the problem, 80% of all internet traffic is now torrents.

It is difficult to make a PC game these days and get your money back. So now there are obviously a lot less PC games made, the PC gamer has destroyed the market by not paying for something he uses.

What has happened on PC has also happened on PSP, so very few games are now being written for it. The DS is just going the same way. It can happen to any gaming platform. Once it is cracked most people will not pay for games, they would rather steal. It happened to Playstation One and it could happen to Xbox 360 or Playstation 3. A multi billion global market could just disappear in a matter of months.

So it is nice to see that the British Government have got it right for once. The only way to stop torrents is with the help of the ISPs. So the government want IP thieves to receive a three stage warning from their ISPs. The last stage of which involves cutting their internet connection. And really this is the only way forward.

If torrents aren’t stopped then the recorded music industry and the movie industry are dead. With nobody paying for their entertainment there will be no money for that entertainment to be made. It is that simple. With games we have access to technologies such as server based gaming which should be 100% thief-proof. It needs to be.

So Sony have won the format war for HD TV content distribution. The Blu-ray disk has beaten HD DVD to become the new standard. The first Sony media victory since the Microfloppy of 1982.

But it has cost Sony dear. Difficulties mass producing Blu-ray drives in 2005/6 delayed the PS3 getting to market. And when it did the high cost of the drives compared with DVDs contributed to Sony having to charge a premium price for the console, which stunted sales. These factors may possibly result in Sony coming third in this generation of the console wars. For certain they haven’t dominated like they did in the last generation with PS2. A very high cost to pay.

Meanwhile Microsoft did not build an HD drive into the Xbox 360. This enabled them to get their console to market more quickly and for a lower price. So they have maintained a significant lead over Sony in this generation of console. By having the HD drive as an external add on Microsoft hedged it’s bets. It didn’t bother them or effect them commercially whichever format won. They would just make external drives using whichever format won. And so they will.

Of course none of this has any impact on Nintendo. They, quite literally, are playing a different game.