Regular readers will know that I expect educational gaming to eventually grow to be bigger than recreational gaming. We consume an immense amount of education throughout our lives and the classroom method, which is currently the main formal education system, is woefully inefficient. We already have the technology to do massively better.

Gaming is brilliant for learning because it has the task/reward cycle which comes naturally to the human brain. Additionally, as I have said in previous articles, because educational games are on computers they track the student’s progress, so there is no need for exams.

Smart.fm takes this one step further. It tracks the student’s progress and presents material at the optimum moment for the most efficient learning process according to the Ebbinghaus Curve. Their system of spaced rehearsal ensures the absolute most efficient absorption of knowledge over time. Take a look and you will see that it is individually tailored by feedback loop and that it uses computer processing power to apply the science. This whole methodology would be simply impossible in a classroom but is straightforward for a video game to achieve.

To me it is immensely frustrating that we have the means to massively improve our formal education system yet we persevere with the archaic relic that is the classroom.

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England’s libel laws are unjust, against the public interest and internationally criticised – there is urgent need for reform

Freedom to criticise and question, in strong terms and without malice, is the cornerstone of argument and debate, whether in scholarly journals, on websites, in newspapers or elsewhere. Our current libel laws inhibit debate and stifle free expression. They discourage writers from tackling important subjects and thereby deny us the right to read about them.

We the undersigned, in England and beyond, urge politicians to support a bill for major reforms of the English libel laws now, in the interests of fairness, the public interest and free speech.

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There are many ways you can view Google. Firstly there is this large group of people sitting on a campus, each with a brain the size of a planet coming up with amazing ideas that advance humanity and all of these people as wealthy as Croesus because of their stock options.

A second view is of a company with enough money in the bank to buy a couple of countries but which only has one revenue source, and that is under threat from several directions.

The third view is from that of being a consumer. Google has some pretty neat free products, without which the internet would be less rich. And they have pushed the technology to make all their competitors perform better.

Just as there are more than three views of Google, so there are at least four major problems they have to address. The first is that their sole big contributor to wealth is search advertising. They also have YouTube, which they bought and which is big, but not profitable. Gmail is also a success, but again not a massive earner. Then they have the failures,  Lively was a 3D virtual world which is now canned, Knol is an online knowledge competitor to Wikipedia that hardly anyone uses, Wave is a new way of communicating which is not taking off and Reader is another failed idea. There are loads more: Orkut, Video File, Catalog, Answers, Web Accelerator, X site, Checkout, Viewer, Voice Search, Coupons etc etc.

The thing is that most of these would have worked if Google had understood marketing. They seem to think that just because their original search succeeded as a result of product excellence it means that everything else will do the same. And they are very wrong. They need to communicate with the outside world a lot more effectively. Which brings us to their latest failure, Buzz. This social networking product was tested rigorously by the thousands of genii in the Googleplex till it was perfect. But when released to the real world it suffered an immediate disaster because of its disregard for privacy.

Their second problem, and the one most relevant to gaming is that computing and the internet are moving away from being desktop PC dominated to being mobile phone dominated. Over the next few years the production of smartphones will ramp up to a billion units a year. So processing power and an internet connection in people’s pockets will become ubiquitous throughout the developed world. In much of the undeveloped world there will be a jump from nothing straight into smartphone based computing. Google’s revenue depends on the desktop PCs that will soon be very much second best, they are yet to demonstrate a convincing business model to monetise this move to smartphones.

The third problem is that their flagship product, Google search, is becoming less relevant as people’s internet usage changes. Social networking is now more important. Facebook has now beaten Google for weekly page views in America. And Facebook can often provide a richer and more rewarding browsing experience than search can.

Number four is that their competition are wise to them now. Google search won purely because it was vastly better than the alternatives. For years nobody tried to take them on seriously with a better product. But now with Bing we have something that is actually considered better in several key areas. So people are moving to it in ever increasing numbers. And when it comes to mobile operating systems, Google made their Android open source. Nokia retaliated by making their Symbian operating system (which has about 40% of the smartphone market) also open source, in one of the biggest commercial give aways of all time. So for the first time Google is having to take on equal competition, which is not good for Google because they lack the marketing clout of these competitors.

It is this lack of marketing understanding that is Google’s biggest weakness. Their world view is technology driven whilst the real world is marketing driven. Steve Jobs at Apple understands this and is happy to release weak technology (no Flash or multi tasking on iPhone for instance) with strong marketing, knowing that it works commercially.

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I have written about this before, but now some commentators have had their $0.02 worth, so I thought I would revisit the topic.

Game executives and financial people all over the world must be looking at how quickly Modern Warfare 2 romped to a billion dollars at retail and thought to themselves “I want some of that”. They are deluded and misguided even thinking about it and here’s why.

• There are too many AAA games in the market. Not slightly too many. Vastly too many. And most are making a loss. Just look at the accounts of the big publishers. The ones whose AAA titles miss the mark are making very big losses.
• There are too many publishers trying to churn out AAA games. We need more industry consolidation so that the production pipeline comes under some sort of control. At the moment Darwin is at work and some publishers who are structurally incapable of making a profit in the current market will find themselves subject to major externally exerted change.
• AAA games now cost far too much to make. The PS3 and 360 have HD that requires far more content to be hand crafted. So their games consume several times more man hours than previous generation games. Publishers are getting round this to an extent by making some games a lot shorter, but the public are not stupid. Next generation platforms will have the power to run a lot of middleware, considerably reducing the effort needed to make a game.
• Competition from other gaming platforms. The original Playstation had the market to itself. Now the typical gamer has many platforms to spend their time and money on. Facebook, iPhone, DS, MMOs etc. The average gamer is now promiscuous with their attention.
• To generate a hit that is profitable requires global marketing and distribution resources. And a huge investment in that marketing. Modern Warfare 2 spent more on marketing than some publishers’ entire budget for a AAA game. This is a big boys game at the top table and very few have the resources to play.
• Brand dilution. Executives see a game succeed so they just rush in and pillage the brand to make money. Meaningless sequels geared up for maximum exploitation are not the long term road to success. To get it right just look at Nintendo, who are one of the few game publishers on planet earth who understand managing a game brand properly. Their management of their key brands is a lesson that the rest of the industry refuses to learn.
• Customers who enjoy your game without paying you for it. Piracy and secondhand sales can often be bigger than legitimate purchases. Will Activision even bother putting Modern Warfare 3 on PC? And if they do, how will they protect their IP?
• Stupid game themes. Interactive computer based entertainment has infinite possibilities, the human imagination is the limit of what can be achieved. So what does the industry give us? Shooting. Then more shooting, then yet even more shooting. Can they not see how limited and stupid this is? Once again look at Nintendo for inspiration. They manage to run some of the biggest AAA gaming brands on earth without shooting in them. Or look at other entertainment media like books, television, the theatre, even the cinema. They all have shooting, but not the incessant, mindless glut that the gaming industry is currently serving up.
• Too little of retail revenue gets back to where the value was created, in development and marketing. A AAA console retail game has to give the retailer their retail margin, also in many territories give their distributor their cut, then there are the logistics costs such as warehousing and transportation, the game has to be manufactured so there is plastic and cardboard to pay for, finally there is the platform holders’ substantial cut. Not much left for those who have done most to earn it.
• Games have a very short tail. This is getting a little better with Downloadable Content (DLC) but it is still pretty bad compared with music and film which have multiple revenue streams providing income for years. Decades in some cases.
• There are far, far better things for a game company to do with their money, brands and human resources. Obviously I am not going to tell the world here and now, when I can actually get paid for the knowledge. Read the nearly 800 articles on this blog and you might get a bit of an idea.

So there you have it. At the current state of the current platform generation AAA games are a very dangerous place to be investing, unless you happen to own one of the handful of “dead cert” global blockbusters.

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So at long last the day has come, I don’t use a mobile phone very much. And when I do I don’t use the extra features, I don’t even text. I bought my trusty Nokia 6300 when it first came out and it is just about perfect. In fact all the Nokia phones I have bought over the years have been good. And every non Nokia phone less so. There is a reason they tend to have a 40% market share.

The thinking behind the move is to use the new phone as a web browser and email terminal. To carry the internet in my pocket.

After much looking at the market (and not being swayed by fashion) my new smartphone is a Nokia 5800. And there are some very good reasons why:

• It has multitasking. I cannot believe anybody selling a general purpose computer that isn’t. Non multitasking is a primitive restriction from our historic past.
• It supports Adobe Flash. You know, the industry standard for moving images on the internet.
• The battery is removable and replaceable. So I can carry a spare, charged battery in my pocket. And replace any batteries that get tired in their old age.
• It has a very nice form factor. Ergonomic in the hand and relatively light. Some smartphones are far too wide to actually comfortably use as a phone.
• No keyboard. Thought about this and concluded that the smaller size when you go without is advantageous. If I find I am inputting a lot of text then maybe my next phone will need one.
• High resolution screen. 640 x 360 is more than some offer.
• 2 cameras. One on each side, so you can videophone. How cool is that?
• When using the satnav the (free) maps download into the phone. So you can use it on the plane! And it doesn’t eat up expensive airtime when you are navigating.
• Swappable memory on Micro SD cards. And web rumours say that the 32MB cards work.
• Carl Zeiss autofocus camera with flash, autofocus and zoom.
• It’s a Nokia, so all the actual telephone functions such as signal strength, network compatibility, global roaming, voice quality etc will be spot on.
• Frequent firmware upgrades. The 5800 is a vastly superior phone now to the one they released just over a year ago. They even increased the processor clock speed in one upgrade!

There’s loads more, but those are the big ones. I have bought the phone outright so can put it on any service I want and upgrade as and when I feel like it. Smartphones are going to drop massively in price this year and the operating systems are going to become a lot more capable. But, as before, I won’t be swayed by fashion and will only replace the 5800 when there is a very good reason to do so.

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The stupid British government is misspending a fortune. One example is forcing climate change propaganda down our throats. Mainly to justify hitting us with more and more “green” taxes. And part of their propaganda effort was a video game.

According to the Tax Payers Alliance: “The Yigal Allon Educational Trust received a grant of £49,480 to produce a “fun and engaging multi-player computer where the player’s role is to decide on local environmental policy, and interact with other players to decide global policy…………The report says that 1,048 active sessions (games with at least one player) created between July 2007 and April 2008. That implies that the project cost around £47 in grant funding per game played…..”

Under this government the British video game industry has gone from being third in the world (behind America and Japan) to almost certainly sixth (behind Canada, Korea and China). One of the main reasons for this decline (which has cost the country many billions) is government ignorance, ineptitude and apathy. Especially compared with more enlightened governments elsewhere. One example was the tax regime that they devised for the film industry (reflecting the risk and financing problems) which has been a great success. But which they did not extend to the game industry which was beset with identical problems. Yet they can throw money away at misguided propaganda when it suits them

There is a solution to this problem. Shortly there will be a general election and we can vote in a better regime (it can hardly be worse, can it?) and this interview with Ed Vaizey gives us some idea what to expect.

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For very many years Electronic Arts were the biggest game publisher on earth. They have an income of billions every year and they employ thousands of people all around the globe. EA are very important indeed for the video games industry. But they are no longer undisputed number one. The marriage of Vivendi and Activision, fed by the cash cow that is World of Warcraft, with mega hits like Modern Warfare and Guitar Hero and very ably led by Bob Kotick are now probably established at the top of the heap, especially when it comes to profit. (Amazingly they were bankrupt in the early ’90s.)

So again, very unsurprisingly, Electronic Arts have issued more bad financial results. They lost $82 million in the quarter ended 31 December (the best time of year for video games!). Their stock price took another hit. They can’t blame the industry, big global publishers like the aforementioned Activision, and also Ubisoft have done very well indeed. Even Sega have managed to get themselves back into profit. I have written about EA’s problems on here before. Repeatedly.

So what is going wrong?:

• The market for all entertainment IP (including films, television and books) is polarising into blockbusters and niche. Everything else is a potential loss maker. The most successful publishers are those who have geared themselves to the new reality.
• This generation of HD home consoles have awful business models to develop for. Basically making a game costs far, far too much. Several times the cost of games for the previous generation. The root of this is that HD games need a massive amount of content which is still largely hand crafted. The next generation of platforms will have enough power to run lots and lots of middleware so development costs should drop back to sensible levels. In the meantime we are stuck with the PS3 and 360 and they are causing a lot of problems.
• The Wii has been a black hole for many third party publishers. Their fault. They mostly haven’t made the games that Wii owners want to buy. Just look at the Metacritic for Wii to see this. Electronic Arts on the Wii published NCAA Football 09 All-Play (Metacritic 49), Celebrity Sports Showdown (Metacritic 50), NBA Live 09 All-Play (Metacritic 51), G I Joe: The Rise of Cobra (Metacritic 51) and many other such gems that should never have seen the light of day.
• There is a trend on the more casual platforms for developers to self publish. This removes discipline from the market, especially on price. The job of a publisher is to provide editorial control, finance and marketing. Self publishers tend to use the price mechanism as their main marketing tool. Done competitively this rapidly collapses the viability of a platform. Electronic Arts have not taken the grip that they should have, thus allowing upstarts like PopCap to gain traction. Also they were late on the scene for emerging platforms, such as Facebook.
• Electronic Arts’ marketing still seems to be largely based on that of the 1960s detergent companies with expensive broadcast advertising. Their customers’ lifestyle habits have moved on and EA seemingly haven’t moved with them. Marketing now is far more about one on one, two way communication.
• Electronic Arts is very corporate. This is expensive and not necessarily the best way to run a large organisation, no matter how good the man at the top is. Far better to take a lesson from Alfred Sloan and break it up into semi autonomous profit centres with individual bosses who live and die by the sword and who are far more receptive to their customers.

It is not all doom and gloom. The losses are less than they were. The management are cutting out the non block buster games. EA moved away from licensed products so have built up the beginning of a portfolio of good IP that they actually own. There are huge economic advantages of scale in publishing, which positions EA very nicely indeed. The world’s consumers will spend more on games in the future than they are now. The next generation of home consoles will reward those with enough clout to invest heavily in middleware.  And EA do have some excellent employees.

So where does the future lie? I still think that EA are a prime M&A target. They would make a perfect acquisition for Microsoft to give them ammunition in their console wars against Sony and Nintendo. And they would also be a perfect fit for Apple, if and when Apple launch their own home gaming console. To both of these companies EA would be far more valuable than it is for its current stockholders. And both of them have the cash sitting in the bank to buy EA with ease.

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The older I get the more cynical I become about awards and rewards, did Barack Obama win the Nobel peace prize because he wasn’t George Bush, or was it for waging several simultaneous wars, using Predators to commit attacks in friendly countries, supporting a toxic Israeli regime and leaving the CIA to trample on human rights? The latest BBC Sports Personality of the year award went to a professional soccer player near the end of his career who doesn’t even play for his national side any more, when we also had Olympians and the world F1 driving champion, amongst some very highly achieving sports people, eligible. And, having looked at the latest new year’s honours list, even the awards the government hands out sometimes look very shaky.

So it is with the video game industry. I remember receiving awards on behalf of Imagine in the early 1980s, so they have been going nearly 30 years. And they very often seem to go to the wrong recipient. In fact they often look as if they are the measure of belonging to the right clique or cabal rather than having anything to do with actual achievement.

Which brings us to this year’s MCV awards. The process is as transparent as mud: MCV will take soundings from the industry and consider any direct lobbying from retailers, suppliers or general readers before announcing a set of Finalists on Friday, February 26th. The winner is voted for by the Judging Panel, which will consist of around 100 highly regarded industry executives taken from all sectors of the business.

I am sure the winners will be very happy with their awards.

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There is no doubt whatsoever that downloading and playing a game that should have been paid for is theft. The perpetrator is benefiting from another person’s labour that has a commercial price which has not been paid. The fact that with digital content you do not need any materials to manufacture a copy is totally irrelevant. It is still theft and the people who download games without paying are thieves.

And it is theft on a grand scale. The current orgy of online IP theft is the biggest outbreak of mass stealing in the history of humanity. Tens of millions of people are stealing because they think they can’t be caught.

Earlier this month I wrote this article about $304,149,300 stolen from Activision, the reaction has been quite amazing. This article in TechDirt criticises me and takes the tone that it is perfectly acceptable to steal games. This is a professional journalist biting the hand that feeds him. Does he not realise that the people who spend their lives working on games need to be paid? And has he not seen the damage that game theft has repeatedly done to the games industry?

Here are some of the pathetic comments that people made to the TechDirt article:

I download games because I want to know if its worth spending money to own the game. Give us more demos and I’ll download less! (maybe)

Amen! I can’t wait until these overpaid nancy boys quit whining and realize that their customers are no longer going to tolerate a company stealing money by providing little value for a high price. Then again, they have politicians in their pockets, so why should they? I say, fire all the top executives that have made any mention of ‘stomping out piracy’ and elect all new politicians (preferably younger than 60) into office. Next, we need to formulate some teaching tools that a kindergartner could follow so that the remaining executives can understand the current technologies.

I downloaded MW2 out of spite alone. I specifically did so because they chose not to support dedicated servers. Meanwhile, it’s a lot easier for my downloaded copy to play on the dedicated servers that people made on their own, than it is if I were to buy a legit copy.

This is the problem now, developers make a game for every platform, and dont change it much from the console version for the PC – instead of taking advantage of the power and better capabilities of the PC. Its not worth the time to even bother if its a direct console port.

If the marketers decided to treat their customers respectfully, offering a product that was actually worth full price on the PC, or offered it at the price it was actually worth, they wouldn’t have a “piracy” problem.

The problem is that while piracy can be traced partly to the “blackbeard” torrent users who just want something for nothing, it can also be traced to attitudes and decisions of the company that released the IP.

And then there were the comments that people made to the original article on here:

Sorry Bruce, but they dug their own grave on this one and you need to get off your soapbox and try to find the REAL reason piracy exists.

You sir are confused.
Nothing has been stolen.
The original is still there .

Nothing is stolen.
If it was the police would be involved…….
………We all tread on thin ice so we cannot point fingers.
Let he that has not ,throw the first stone.
nobody, i thought so.

COD:MW2 isnt too great anyway. Yes it is a good game,if you can overlook the pathetically short single player mode, and the ridiculous regenerating health system (why does everything have to be dumbed down
nowadays?), and invincible allies…………

Further, saying that it’s stealing because somebody’s enjoyed the fruits of others’ labor without paying is questionable. You want to go down that road? How about not watching the commercials for a television program? Every time you get up to go to the bathroom or skip past them on your DVR, YOU ARE THEN ALSO STEALING. I suggest you call the authorities and turn yourself in.

I have pasted my dictionary’s definition of the word “theft”. Note that “every part” bit, as long as the copyright holder still has access to their work then it has not been thieved.

Damn pirates. If it weren’t for them, maybe MW2 wouldn’t have bombed at retail?

If customers are treated with respect, they’ll purchase your content. If you treat them with contempt, they won’t.

I’ve sworn to myself that I’ll never, ever buy an Activision title, ever again. (Barring, of course, any and all Blizzard-Activision titles, because Blizzard is 100% deserving of my support). That (put whatever expletive you want here) CEO of Activision disses the gaming community as a whole; it’s only fair that he suffers the consequences. Not to mention MW2 is WAY overpriced, and if that CEO would’ve had his way entirely, it would’ve probably been twice as expensive. Same goes for Spore, simply because their draconic DRM “protection” is a slap in the face to people who bought the game, and it’s not even that well-made.

the trouble is, due to the combined ease and inexpence of both fast downloading, and mass digital data storage, piracy has become so easy and prevailant that it’s an easy target for companies to blame when looking for an excuse to explain away their lack of sales, or for justifying their extortionate prices.

I love this bit, Bruce “Explain their low morality to them and the harm they do….”
Can we do the same thing to ‘investment’ bankers, realtors, solicitors, accountants, big Pharm,……

There is more, but you get the idea. The thieves use a range of excuses to justify their stealing to themselves. And there is a big lesson for the industry. The thieves are barbarians at the gate, looking for any opportunity to destroy everything we have built, the proof is in the quotes above. Any lack of vigilance and they will be through the gate, destroying all before them, as they have so many times before. Against this you need to make your business model as tight as possible against these thieves. Be proactive against them. And always remember that you may have to abandon a well established platform tomorrow because the thieves have destroyed it as a viable target for games.

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Before we start I do know all about Golden Eye, the exception that proves the rule. This was made by Rare at the height of their pomp yet ironically  by a very inexperienced team there. It sold over 8 million copies back in 1997 and is considered a seminal game in the development of video gaming as a media. But one success in 30 years of trying does not make video games spun off from films a good idea.

Compare and contrast Golden Eye with Avatar from Ubisoft, this has turned out to be a very damp squib which is very rare from Ubisoft, who are perhaps the best performing publisher in this generation of game consoles. Yet it is based on what is already one of the highest grossing films of all time. And they did everything right. But still they would have done better commercially if they had used their resources to produce a game from one of their existing properties.

So why do games made from films do so badly?

• Films, like the books they are so often derived from, are sequential media. One frame follows the next in an unbroken sequence from beginning to end. This sequence is used to tell a story, usually in the time proven three act structure. Games however are non sequential and often don’t tell a story. Instead the best games allow the player enormous latitude to do what they want, when they want. The most non linear games are called sandbox games, Elite being one of the all time classics and Grand Theft Auto being a massively successful current franchise.
• The film industry sees video games purely as just another form of merchandise for the film and another income stream. Their priority is getting people into movie theatres and getting them to buy DVDs. They may pay lip service to video games but the reality is that their concern is secondary at best. In fact the film company should be paying the game publisher to make the game, not vice versa as it is now. The game is valuable marketing for the film.
• Films are not interactive, you sit down and get comfortable and then the film is imposed on you, you have no influence whatsoever over events. Video games are the exact opposite, they are very highly interactive, the player directly influences events on screen. So one is a passive media, the other is an active media. Also films are totally lacking of the fundamental mechanism of games where the player is rewarded for their success.
• Perceptions. Because of its history, star structure and ubiquitous marketing the film industry is perceived as being bigger and more important than the video game industry. It isn’t. The biggest grossing first week of an entertainment property was a game, Modern Warfare 2, the second biggest was also a game, Grand Theft Auto IV. The biggest games now do half a billion dollars in their first week. And Modern Warfare 2 has already gone on to gross over a billion dollars, something that only 5 films have ever managed to do. World of Warcraft has outgrossed every film in history.
• Huge difference in development timetables and philosophy. A film spends a long time in pre and post production. Actually shooting the footage is immensely expensive for every day, so is compressed into as short a timeframe as possible. Mainstream console games contain vastly more human labour than films do. A large and highly skilled team will spend two years or more working long hours to generate the content. There is (wrongly) very little pre or post production. So when a film and a game work together for a simultaneous release there are massive problems. Tellingly the Golden Eye game was release two years after the film.

So there we have it, games and films need completely different creativity and content, they are like oil and water. And it works both ways. Films made from games are pretty rubbish too.

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