I trained as an accountant for six year with Moreland and Partners in Liverpool, then ran a computerised book keeping company they had set up. This made me aware of the upcoming revolution of home computers. So I begged and borrowed till I had enough money to open Microdigital, one of the first ever computer stores, in Brunswick Street Liverpool, in July 1978.
To start with there wasn’t much to sell really. The Nascom 1 home computer gradually came on stream. A Z80 home computer kit with 2K of RAM for £200 (a lot of money in those days) with over a thousand solder joints. Obviously most customers couldn’t get theirs working so I hired an engineer and set up a set price repair service. Pretty soon faulty Nascoms were raining on us from all over Britain.
Then the Apple 2 arrived. About £1200 with 20K of Ram and a cassette interface. £425 for a disk drive when it appeared. But a proper usable computer at last.
We made a lot of money from selling books, they all came from America then. I was eventually buying them by the ton from an American wholesaler and selling them by mail order all over the world.
Two big bulk commodities made us a lot of money. The first was short run audio cassettes, the standard storage for home computers for nearly a decade. I had these manufactured by the tens of thousands. We even had a special carton manufactured for shipping them out in tens. The second were 16K x1 DRAM chips, which I bought in odd batches from the manufacturers and sold to a world hungry for memory.
To quench our thirst for knowledge we had all the books, we also got all the American magazines as soon as they came out. And the relevant academics for Liverpool University sometimes seemed to be living in the shop. But there was a shortage of knowledge for our customers so we set up a magazine, Liverpool Software Gazette, to try and plug it.
I went to America quite a lot, by necessity, as they were ahead of us in the home computer revolution. On one visit to Apple, still then a relatively small company, they offered me the UK dealership! I also went to the American computer stores and came across the first commercial home computer games. These were for the Apple and consisted of a cassette or disk in a polythene bag with a piece of paper with the instructions on. All completely homebrew.
I brought the games (and much else) back from America which, with everything else we were doing, made Microdigital the centre of excellence for home computing. People made long trips just to visit us, from all over Europe as well as the UK. And people wanted to work for us, so we were able to pick good people. People who then gained a lot of knowledge from the environment. Here are just a few of them:
Paul Fullwood. Went on to be VP Head of Studios at Hasbro and Microprose, Professor of Video Game Techn0logy at Abertay University and is now SVP Business Development at Heatwave Interactive.
Andrew Sinclair. Went on to Imagine, Ocean and US Gold. Then lectured at Liverpool John Moores University. Now owns Bullwinkle Enterprises, an IT company that designs and develops servers and software for an open environment.
Carl Phillips, left to join Microsoft when they first set up in the UK.
Graham Jones. Left for a world in senior management in the IT industry.
Eugene Evans. Went to Bug Byte, then Imagine and Viacom. Now Senior Director of Marketing, EA | Mythic Entertainment.
There are more, but my memory is hazy. As you can see it was a talent incubator, we were all young so worked and played pretty hard. What we did put Liverpool on the map of the home computer and then the video game industries. They were the best of times and so much happened that a book could quite easily be written about it. I get interviewed by students working on thesis and dissertations about the early industry, so all is not lost.
In this game the player has to manage a worldwide outbreak of a new influenza virus, before it turns into a pandemic. In cooperation with one of the worlds leading virologists Dr. Ab Osterhaus from the Erasmus MC in Rotterdam, Ranj is developing a serious health game with the goal to increase the awareness and the level of knowledge about viruses and the complex way viruses spread and evolve.
In the old 8 bit days we had fanzines, badly printed A5 bundles of enthusiasm. And a breeding ground for journalistic talent. Now we have the web fansites, which are much easier to set up and keep running so there are far more of them than there ever were fanzines. This rampant proliferation has forced them to cover narrower ground, so whereas a fanzine could cover an entire gaming platform fansites tend to specialise, often to just one game.
The problem with fan sites is that they can tend to be anarchic and out of control. To be telling you (and the world) everything you should be doing about the game and generally slagging off your business. In fact many see that the more militant they are the more successful they will be. You could spend a fortune on solicitors trying to keep some semblance of order, and still fail.
The answer is to engage with these people. You want them inside your tent pissing out, not outside your tent pissing in. You will never be able to control them, they will always publish things that you don’t like, but you can make their behaviour a whole lot less unacceptable.
The simple technique is to reward good behaviour. With something like an accredited fansite scheme. They undertake to keep to a code of behaviour that isn’t too onerous but which cuts out the worst excesses. In exchange they get fansite toolkits of great assets, they get occasional access to key people and they get listed and linked on your website. A lot of carrot to keep them behaving. The whole relationship is managed by your community marketing team. You have a win win situation.
And remember that many fansites are a con trick. They are set up to get free games and goodies and to get the fanboy site owners closer to the publisher/developer. With the minimum amount of work they can get away with going into the site. So there is a job that needs doing of sorting the wheat from the chaff, which is a dynamic thing as these sites often get rapidly worse or rapidly better.
This is a very sensible and valid subject for discussion. Unlike books and films, which are purely sedentary, games require input. With the introduction and vast popularity of gesture interfaces, led by the Wii, the scale and nature of possible game inputs has changed drastically. Sometimes requiring substantial effort.
We have Wii Sports as being one of the best selling video games of this generation. Equally striking has been the uptake of the balance board and Wii Fit. And all the “me too” shovelware from myriad lemming publishers trying to cash in.
And it is not just the Wii. Games like Guitar Hero and Dance Dance Revolution have brought much physical activity to other consoles.
Of course the gesture interface genie is well and truly out of the lamp now with Microsoft and Sony following Nintendo’s lead, in Microsoft’s case with a greatly technically superior proposition. So the future of gaming is well and truly the gesture interface. Which is a good thing as it is more natural for users and vastly more immersive, which is the holy grail of what we do.
So games will take more effort. There will be games that are specifically designed to do so. But all games will, by the very nature of the interface, go in this direction. Games will be simulating real (and unreal) world environments and real world physical activities. Tomb Raider will reward athleticism.
Meanwhile in the real world children are wrapped in cotton wool and not allowed out, because it is well known that there is a paedophile hiding behind every lamp post. So children are getting less and less exercise and so childhood obesity in the West isn’t just common, it is prevalent.
This means that if junior spends two hours a day playing games on his/her gesture interface then it is going to be their main form of exercise for the day. Add to that busy parents using gaming as a catharsis for all the woes in their lives, young professionals using gaming instead of the gym and pensioners using it to increase both their life quality and life expectancy and we have a lot of people getting their exercise from video games.
So there is a very real chance that in the West, at least, video gaming will become the main source of exercise. Which is ironic when you see video gaming being demonised by idiots for exactly the opposite.
I was actually in at the very beginning of this in the late 70s and early 80s. Back then if you wrote a game you had to manufacture, market and distribute it yourself. You became a publisher because there was no other way to market. This is what happened at Bug Byte and Imagine in Liverpool, the owners of the companies were, initially, the guys that wrote the games. Once you were up and running, other game writers, who couldn’t be bothered with all the publishing work, came to you and asked if you would handle their stuff too. This was the beginnings of our industry.
So what do game publishers actually do?:
Provide finance for the entire industry. This is not just paying studios, in stages, to develop a game. It is also the publishing costs which can often be far, far more. For one top console game the total cost is now into the tens of millions, so this isn’t insignificant. However, some development studios make the big jump to self financing their work, then they own the IP and can choose how it is published.
Take the risk. This is a pretty big job, especially for current generation console games, most of which don’t make a profit. This is partly why many of the world’s biggest publishers are making losses just now whilst the industry booms.
Market the game. It is a simple fact that with zero marketing a game will have zero sales. The game industry is a very young and fast changing industry so much of its marketing is inefficient and over expensive. Which means that many publishers aren’t doing a good job here, another reason for their losses. However what marketing expertise there is in the industry resides mainly with the publishers.
Create and build brands. A lot of the industry for a long time just piggy backed other people’s brands, so had no equity in their IP. We used films, books and celebrities. And it wasn’t good. Now the industry is growing up and nurturing its own brands with some startling successes (GTA) and a lot of painful growing pains.
Physically manufacture, warehouse and distribute inventory. Logistics. This is a huge pain. Vast amounts of plastic and cardboard are used to move digital information around the world. The problems boggle minds. Just getting the timing of everything and the inventory levels right is impossible, it will always go wrong. So retailers are out of stock of one game whilst another game is remaindered in the discount bin.
Manage the whole industry. People only buy consoles to play games. The games are everything. And the publishers have total control over the games. So they have total control and power over the industry. So they decide what happens, how it happens and when. A big responsibility and, to be fair, they tend to try and act for what they perceive to be the good of the industry. We don’t have any significant Enrons yet.
The most important thing about the traditional game publishing business model is that there are enormous competitive advantages of scale. The bigger you are the easier it is to run your business, if you much smaller than the biggest players then you simply cannot compete. This is why we have seen so much publisher consolidation, the laws of economics mean there should only be a handful of global publishers. It is what happened to film and recorded music.
However events are not just conspiring against global publishers, they are conspiring against publishing per se.
The cost of making games is, in many cases, coming down. This is partly down to better tools, libraries and middleware. It is also down to the far smaller scale of product required for many platforms, including some of the big ones like XLA and XNA. Which means that we have returned to the age of the bedroom coder, or to loose affiliations of a few people working together on a project. This has become massive. There are now more games being developed this way than in formal studios.
With the above the risk has come right down. You make a game in your spare time, if it works you buy a fast car and a holiday, if it doesn’t you just shrug your shoulders and try again. Which is exactly what happened in the old 8 bit days. I know, I was there!
Platform proliferation. This has really crept up on us. About a decade ago there were two viable platforms, the Playstation and the PC. Now there are lots. Xbox 360, PS3 and Wii, each of which is multiple platforms because of the online offerings. Xbox 2, PSP, DS, iPhone, Android, nGage and of course the PC, which is also now mutiple platforms with casual gaming, MMOs, portals, boxed games etc etc. A big global publisher just cannot do it all any more, they have to cherry pick.
Product proliferation. It used to be very simple, there were a handful of genres and it was easy to keep up and publish a stream of releases into each one. Now we have total fragmentation, an infinity of genres. Just look at the thousands of iPhone games to see how diverse and sometimes bizarre gaming has become. This has left the big global publishers dead in the water, they don’t understand what is going on and even if they did they are too slow witted and cumbersome to do anything about it.
Marketing has changed and much of it is now free or nearly free. The traditional big publisher marketing model of throwing millions at television advertising is outdated, inefficient and an immense waste of resources. But they continue because of inertia and because they know no better. These days we have something called the interweb and with no money (or very little) and a little time you can run a very effective global marketing campaign. And the smart people are. Popcap is a prime example.
Digital distribution. This is the big one. Without plastic and cardboard it is difficult for publishers to justify themselves. As we have seen with iPod, once you remove physical inventory most games come to market without a publisher. This leads to an explosion in creativity as tens of thousands of new games appear that a publisher would never have given the time of day to.
Brands. The publishers have actually been mostly very bad at creating and building brands. It is a new thing to most of them and they don’t know what they are doing a lot of the time and it shows. Individuals can build brands too. They often have in history. All it takes is an instinctive feel for the brand experience they are creating, the brand image they are presenting to the world and the brand values they need to maintain and they have cracked it. The Oliver Twins did this with Dizzy.
So, as you can see, the big global publishers look like a threatened species. Everything is conspiring against the reasons for their very existence. So expect another period of rapid change. Publishers who adapt quickly away from plastic and cardboard and who learn how to profit from genre and platform proliferation will survive. Those who hang on to the old business models of physical stock, AAA blockbusters and TV advertising will go the way of the Dodo.
This is going to be absolutely fascinating. When it comes to absolute simulation of motor racing the best game in the world, by a huge margin, is rFactor on the PC. But add in a bit of arcade elements and the two daddies are Gran Turismo and Forza Motorsport. We have moved, in this generation, to a market where you tend to have one massive game in each genre with the “me too” games selling far less successfully than before. But these two games are different because they are platform exclusives, GT5 is only on the Sony Playstation PS3 and FM3 is only on the Microsoft Xbox 360. And they are both due out in Q4 ’09. So we have war.
GT5 is the latest game in the biggest selling Playstation franchise of all time with over 50 million sold. It is famous for featuring a huge number of cars and for absolutely amazing graphics. This fifth edition is due for release on 1 October 2009 and has been under development for many years. For the first time (other than as a test) it features online play, with 16 cars. Also for the first time it will have vehicle damage, a weakness of previous versions.
The original Forza Motorsport was Microsoft’s answer to the GT series, had a Metacritic of 92% and a GameRanking of 93%. It is famous for it’s realistic physics engine and had vehicle damage right from this first version. FM2 introduced online play with 8 players and sold 5 million units. Forza 3 is due for release on October 27 2009 and has over 400 different cars and over 100 different circuits.
So we have a unique situation. Two of the biggest game brands there are going head to head on different platforms. The importance here is not the number of sales that each of these games gets. It is how many machines each of them sell, because these are two of the biggest system selling titles there are. Lots of people have been waiting for GT5, for instance, before buying their PS3. And lots of people who have one of these consoles will end up buying the other one as well, just to play one of these games. These two games will increase the installed bases of both consoles significantly.
So which will win? They both will of course because they are platform exclusives. But Gt5 should win on the sheer content of the game and the huge amount of polish it has received. FM3 will win online because the Xbox 360 is a far better online platform and because they have solid previous experience in this area.
And the biggest winner is gaming. This is what we want, massive global brands of the very highest quality. Brands that are comparable with the very best that the film and other media industries can produce.
