Entries from July 2008 ↓

Because of what I have written on here about Sony I have been accused many times of being a Nintendo or a Microsoft fanboy. Nothing could be further from the truth. I only report what I see. And what I see is a Sony that has lost its way.

The facts are very, very simple. In the Playstation one generation Sony had massive global domination, nobody came anywhere near them. In the Playstation two generation Sony were hugely dominant again. Nintendo and Microsoft were minnows in comparison. Then we come to the Playstation three (PS3) generation and suddenly the wheels fall off. Sony are running third and it very much looks like it is going to stay that way. Analysts and fanboys continually promise or hope that a revival in fortunes is just around the corner, but it never comes. So what went wrong:

• The cell processor, this was a huge mistake in many ways. Firstly it cost a fortune in development and putting into production, which is money that needs to be recovered. Secondly it delayed getting the PS3 to market, giving away huge competitive advantage. Thirdly, whilst very powerful, it is a very long way from being optimised for the job of running a console. Overall they would have been better buying an off the shelf generalised processor as they did for previous models and as their competitors did.
• The graphics processor is a lot less powerful than the one in it’s main competitor’s machine. This effectively limits what the PS3 can do, no matter what the CPU and memory are doing. Fanboys blame the developers for being lazy and not putting enough work into PS3 games when the reality is that it is the machine itself that is holding the games back.
• BluRay. The Playstation 3 was used as a Trojan horse to get this technology standard accepted by the world. And at this it has succeeded. But at a terrible cost. It forced the price of the PS3 up sufficiently to stifle consumer demand whilst forcing Sony to absorb massive losses. It is strange that Sony nearly bet the company on this at a time when physical delivery of content is in steep decline. A phyrric victory indeed. If this were not enough, difficulties in putting BluRay into production contributed to the delays in getting PS3 to market.
• The complex architecture of the PS3 makes it very difficult to develop content for. A lot more difficult than for it’s main competitors. This wasn’t helped by Sony releasing development tools that were also greatly weaker than those from its competitors. A double whammy that caused huge problems for games developers worldwide. Many games were delayed because the problems were so great, costing the game developers a fortune and depriving the marketplace of product.
• Sony totally misread the way the market was going. They have clung to their hardcore gamer base and squandered the lead in casual gaming that they had with EyeToy and SingStar. Nintendo have come along with a simpler machine that has massively outsold the Sony PS3 with the simple tactic of providing entertainment that is accessible to a lot more people. With hindsight it looks so obvious, but Sony missed it completely. As a result Nintendo made a fortune and Sony lost a fortune.
• Sony have been stretched for cash. They have made losses. The technology in the PS3 has cost a fortune and they are almost certainly still making a loss on every machine sold. They have been forced to raise new capital and to sell off bits of the company. So they have little room to manoeuvre. They cannot throw money at the PS3 problem. This whilst their two main competitors are rolling in money which they are both using to reinforce their positions.
• Lack of exclusive content. Both competing machines have a lot more exclusive AAA content. This is a massive USP when the reason for buying these machines is to play content on them. Microsoft have invested heavily into a very impressive catalogue of exclusives and have managed to seduce some former major Sony exclusives into becoming cross platform. This alone has caused an immense shift in competitive advantage.
• Sony have messed up very badly with online. This is a real killer and comes from them being a hardware company whilst Microsoft is a software company. So Microsoft understood the importance of online and invested massively in Live. And that investment is paying them back enormously. So they continue to invest and Live is becoming one of the biggest phenomenons ever in gaming. Giving customers a massive USP whilst generating a lot of revenue for Microsoft. And it is growing with almost unbelievable impetus, both in content and in users. The Sony competitor, Home, is still not released after multiple delays and is now several years behind. It will be nearly impossible for Sony to pull back such a huge lead.
• Sony have huge, world class, divisions in many areas. Telephones, Film making, Portable Music (they invented this) and Console Gaming. Yet these divisions appear not to talk to each other. So a potential huge strength has become a weakness. The film division isn’t used to place all their unique IP on the consoles for instance. And outsiders who are less constrained can enter Sony’s markets and win. Hence the iPhone which could and should have been a Sony product yet instead has come from a company, Apple, that just a few years earlier had no stake whatsoever in consumer electronics.

With all that against them it is amazing that Sony have sold as many PS3s as they have. The reason they have done so is because of the impetus of the brand and the loyalty of a large section of their user base. The majority of console users have yet to upgrade to this generation, there is still a huge untapped market of non console households and we have yet to reach the $199 sweet spot when the bulk of sales occur. So there is still hope for Sony, which is what the analysts are grasping for. The problem for Sony now is that the sheer weight of USPs is against them. A gulf that further widened this E3 where Nintendo and Microsoft forged ahead whilst Sony were distinctly lacklustre.

This article is totally speculative. It is about something that Microsoft could do, should do and may well be doing. It is not about the Xbox 360 or the upcoming Xbox 720 (Phoenix?). It is about a totally new machine. A totally new sort of machine.

Firstly it is necessary to understand the concept of server based gaming. We have it already with MMOs and casual gaming on PC. With these your computer does very little work other than running the display, reading your control inputs and talking down the internet. The game itself is running in a big computer remotely sited with many hundreds or many thousands of people playing the game at the same time.

Server based gaming has grown very rapidly in the last few years, far faster than console based gaming. It offers many advantages and few disadvantages. Typically the gaming is paid for with a monthly subscription and by advertising.

The new Microsoft console will be a set top box for server based gaming. Because it will be doing so little work it will be very simple and very cheap to make. So cheap that they will be able to give it away when you take out a subscription for the service. Or charge say $50 for it. Alternatively they may add bells and whistles such as a gesture interface and go very slightly upmarket.

To maximise the experience and mimise bandwidth requirements they will use digital compression technology between the server and the home, with a hardware decoder in the box to uncompress the incoming data.

Microsoft don’t even have to make the box themselves, they can license it out to lots of other people to make. So it could be built into into decoder and video recorder boxes as another function. There could even be no box at all with the electronics incorporated cheaply into the television itself.

And what will you get for your subscription? Firstly a service very much like Live but with server based games. These will vary from noughts and crosses to complex MMOs. And there will be lots of social networking capabilities. And they can add all sorts of other functionality such as home shopping. In fact there is no limit to the possibilities.

Now it doesn’t have to be Microsoft bringing us this. It could be Sony or Nintendo. It could be Samsung or Phillips. It could even be Google. But Microsoft seem to have the most potential and resources to carry this through. And it really fits well with their business model.

The interweb is an amazing thing, open to all it puts the sum of human knowledge at your fingertips. And with blogs, forums, social networking and content aggregators it has opened up it’s amazing power to everyone. The led to a few golden years when people were largely positive and the interweb grew exponentially in richness.

These days are now over as increasingly people abuse the interweb and everything that is in it for their own narrow agenda. Now a world expert university professor can and will be shouted down by an ignorant 14 year old. And there are lots of ignorant 14 year olds in the world and they have lots of spare time on their hands. This alone has led to many valuable contributors walking away from the interweb, they don’t need the abuse.

A good example in gaming is the story aggregation and social bookmarking site N4G which has been truly excellent. In one place you could get a feel for what was happening to gaming news over the whole interweb. This made N4G a very valuable resource for keen gamers, industry professionals and journalists. It was the pulse of the games industry.

Now N4G is broken, taken over by Sony fanboys with a narrow agenda. If an article is submitted that could be considered to be in any way critical of Sony (which is quite easy, the way they have screwed up this generation) they pounce on it en masse, marking it down so it never make acceptance. Obviously any pro Sony stories are massively marked up so they get instant acceptance and rise to the top of the points scoring system. So the whole output of N4G is now massively distorted and has lost it’s value.

Not only that, the Sony fanboys also boost each other’s reputation on the social scoring system and knock the reputation of anyone who does not follow their agenda. So the whole social side is abused, distorted and now pretty much useless. To be fair to N4G, they are aware of this and are fixing it. However the fix inevitably means that the site will be less open and more restricted. A prime example of the Balkanisation of the interweb.

Then there was Fatbabies, a forum for games industry professionals. Lots of non professionals joined and ran amok, shouting down those who knew better in typical fanboy style. The site imploded and the game professionals moved to The Chaos Engine and made the site closed to access by outsiders with membership only by invitation to known industry professionals. So all the immensely valuable content created by these industry professionals can only be seen by themselves. This is typical of interweb Balkanisation reducing the availability of the good stuff to everyday users.

Also look at VGChartz, a potentially useful site with guestimates of industry activity. However it is difficult for anyone to take it seriously because on their front page there is a forum dominated by rabid, ignorant fanboys. Which makes any serious discussion impossible. So they lose credibility and are Balkanised.

And then there is Bruceongames. This site started with an open comments policy but started receiving so much vitriolic abuse from ignorant fanboys that now every comment is held until it is approved, which can be for days when I am travelling. Not only that, I send the abusive comments to Akismet, something the fanboys probably don’t know about. And Akismet progressively closes down that person’s rights on the interweb. So they are less able to be a nusiance in future. But which also means further Balkanisation.

I also run a great forum for artists, it is a friendly and supportive community for practicing artists. Yet a full 50% of people who join do so with a narrow agenda of promoting their goods or services and are mostly not even artists. This, obviously, is very damaging to the community. So I have been forced to make the rules stricter and to implement them more thoroughly in order to protect this great community. And once again it Balkanises the interweb a little more.

So every time the interweb is abused it leads to a reaction to prevent future abuse. Which means putting limits and restrictions down. The fanboys damage themselves because what they can get out of the interweb is being continuously throttled as a reaction to their stupidity.

This makes life very difficult for the online marketeer. Blogs and forums will be attacked by idiots which means that they need stricter rules and policing which reduces their quality and usefulness. Community liaison continually come up against agressive fanboys with a narrow agenda shouting down anything they don’t agree with. It is a changing reality that makes things a lot less Web 2.0 and a lot more like the we talk you listen days of old.

• Well it is an earthquake of a news story. The whole gaming interweb is on fire over this one and the Sony fanboys are going apoplectic. Yes Final Fantasy XIII is going on the Xbox 360 and it looks amazing. Hardly surprising when you consider that Square Enix are in business to make money. But a major coup for Microsoft as they chip away at the Sony exclusives whilst building their own formidable catalogue of Xbox 360 only games. Expect Metal Gear Solid to go 360 soon. The balance of USPs moves inexorably further in Microsoft’s favour. The industry analysts must be having kittens.
• Music is coming to console gaming in force. We already have the successful Guitar Hero and Rock Band franchises. But soon we will have Microsoft Lips with motion sensitive microphone and iPod/Zune compatability. And from Nintendo, Wii Music looks like being the next Wii Fit, giving them a whole new demographic this coming Christmas.
• Online is replacing physical distribution at a dizzying pace. Far faster than any analyst predicted or the industry expected. Xbox live now has over 12 million new members with a new member joining every 5 seconds. And they have spent over a billion dollars on the site. But remember, this is still just the beginning.
• GTA is coming to the Nintendo DS and promises to very quickly become one of the most pirated games ever. The brand is big enough for T2 to make a profit from the game. But still far more people will be paying stolen copies than legitimately owned copies.
• Logistep catches peer to peer software thieves by pretending to be a peer. It then has all the IP addresses of users computers that automatically offered a game. Using whois they know how to prosecute. And this is what they are doing with many hundreds of prosecutions. Unfortunately Swiss law is lagging behind the technology which is causing a few problems. But these are bound to be solved and yet more game stealing criminals will feel the long arm of the law.
• Both Sony and Microsoft have made announcements to put far more films and TV content on their consoles as downloads as they both strive to become entertainment hubs. This leaves the Wii out in the cold with it’s lack of hard drive and HDTV. Nintendo will need to act soon if they do not want to be left behind.
• Jack Tretton of Sony says that the much delayed Home service will be worth the wait. The problem they have is that with each delay Microsoft Live stretches out a further lead. In content, in technology, in users and in income. Even after Home comes out Sony will be left with a mountain to climb.
• BT in Britain to invest £1.5 billion in high speed fibre optic broadband. About time too. The Koreans are years ahead of us. Copper cables coming into houses have finally reached their limit. We need to grasp the nettle worldwide and rewire with optical fibres. The interweb is the most important infrastructure of our time.

Here we are talking about sites like Digg (236 million annual visitors) and Reddit. They tend to combine social networking with story aggregation. And as the web has filled up with so much rubbish they have taken on an important role. They give the users the information they want far more accurately than search engines do. If you have a story that is good enough, like cream, to rise to the top then getting it onto these sites is incredibly important. They reach vast audiences.

It is easy to find the most important social networking sites because their logos lurk at the bottom of every artice on world class sites like the BBC (this alone tells you just how important they are). You will even find some at the bottom of this article. But to make life easy for you here is a list of 75 for you or one of your minions to flog your way through, enjoy:

In an interesting news item it was revealed that outside investors had risked $184 million in virtual worlds in the first quarter of this year and $161 million in the second quarter of this year. Giving an annualised rate of over $600 million dollars a year. This is actually understated considerably as many deals are not visible. Also remember that this is just what outside investors are putting in. The industry itself is also investing heavily in this area so the total spend on virtual worlds development is massive. But much of this spend will be money thrown away.

Virtual worlds have two features that make so many people want to risk so much money. I have seen this myself having been involved with The Realm, an old school 2D MMO and with Dragon Empires, one of many abortive attempts to get a slice of the MMO pie.

The first feature is that virtual worlds can be a license to print money. Not just a bit of money, not even lots of money. We are talking about immense amounts of money. World of Warcraft, the monster that dominates the marketplace, generates several million dollars of revenue every day. Human greed means that there are a lot of people who would like a slice of this. For many even a small slice would do.

The second feature of virtual worlds is that they can do a lot of things that could not have been done before and which cannot be done any other way. The potentials are infinite and massive. An example is the virtual world of Baghdad that all US personnel “play” before being sent there. This doesn’t just teach the physical layout of the place, it also teaches the reactions and behaviour of the local populace and the threats and problems that will be encountered in the real world. Having played this personnel arrive on the ground already up to speed and more able to do a good job from day one. You can extrapolate this idea to an infinite nuber of areas of human activity.

So we have this seductive combination of infinite possibilities and huge revenue potential. No wonder so many people are risking so much money.

But there are a problems. When you write a conventional game the development staff hand over the gold master and go to the pub. Job done. With virtual worlds creating the initial product is just the beginning. It needs constant tweaking, updating and expansion.

One reason for this is “churn”. If there is a competing product or products, and there always is with public products, you will constantly lose customers to it. So you have to constantly give your customers more and better things just to minimise customer loss. The same applies to marketing. This needs to be constant just to replace the customers who have been lost. So for development and marketing an MMO is a never ending treadmill.

Then there are the technical problems. Part of the virtual world lives on a massive server and part (sometimes very little) lives on the user’s computer. These two parts have to work together. Then the server has to run a consistent playing environment to hundreds or even thousands of people at the same time. And all this has to be scalable to many different servers around the world. This is technically and managerially very demanding. Which is partially why most virtual world development hugely over-runs on both development time and budget. And why so many are launched on the public in an unfinished state.

With virtual worlds MMORPGs are the most seductive for investors because they appeal to the greed impetus most. However non MMORPG virtual worlds can make a good investment if you are a monopoly supplier to a corporation or the military. There is no doubt that virtual worlds will play an ever increasing role in many facets of our daily lives.

In the real world many MMORPGs are still born, canned often after many millions of investment. Those MMORPGs that do see the light of day often never make a profit. These are the realities of this sector.

So virtual world investment is only for the very brave. Even proven experts with a track record have failed (Ultima Online, Asheron’s Call, Anarchy Online, Earth and Beyond, The Sims Online and so many more). And the numbers involved in failed virtual worlds each year are almost impressive as the revenue figures for the few that actually work commercially. Far more projects fail than succeed.

Everyone knows that this is Microsoft Windows Solitaire, installed on hundreds of millions of PCs and being played by hundreds of thousands of office workers and airline passengers right now to relieve the boredom. Intended originally by Microsoft to humanise the Windows interface, literally “to soothe people intimidated by the operating system”, it grew in importance as a training tool for the then unfamiliar WIMP (Windows, Icons, Menus, Pointer) way of doing things that today we take for granted. 

There are now three different Solitaire versions installed with Windows. In fact they are the first, second and third most popular games in the world in their own right! In order of current popularity they are Spider, Klondike and Free Cell. Many major corporations now de-instal these games, so great is the productivity loss attributed to employees addicted to playing them instead of working.

Spider is a two deck version of the game and is a relative newcomer to Windows, first coming with the Plus pack for Windows 98 and now with Vista, ME and XP. (Unsuprisingly the Vista version has several major bugs.) Played with real cards it was, famously, the favourite of US President Franklin D. Roosevelt.

Klondike (the original and most famous Windows version) was developed in 1988 by then intern Wes Cherry, who famously received no financial benefit from his work, half the card backs were designed by his then girlfriend Leslie Kooy. The card deck itself was designed by Macintosh pioneer Susan Kare. It was release as part of Windows 3.0 in 1990.

Freecell as a game is much easier to complete. It was invented in the 1960s by a then 10 year old Paul Alfille, in 1978 he had coded it on to a mainframe. And then it went viral. Alfille sold the rights to Freecell to the University of Illinois, but Microsoft never paid the university any royalties. It was first included with Win32s, then with Microsoft Entertainment Pack Volume 2 and then the Best Of Microsoft Entertainment Pack before it was made a part of Windows 95 and has been a fixture in Windows ever since.

So Microsoft never paid a cent for the IP rights to Freecell, Spider has no IP rights to buy and they acquired the code for Klondike for free. It is amazing that the most played game in the world has this history. Especially compared to the many millions that game publishers still pay for celebrity and film rights to brighten up otherwise lacklustre games.

And now there is a gold rush of companies putting solitaire on the latest darling of game publishing, the Apple iPhone. Ambrosia Software’s Mondo Solitaire, Acid Solitaire from Red Mercury, Gameloft Platinum Solitaire, Maverick Software Yulan Mahjong Solitaire and four more. Yes, the Apple App Store is launching with no fewer than eight different publisher’s take on solitaire, with doubtlessly many more to come. And it is hardly surprising that so many people have had the same good idea at the same time. It is the world’s most played game.