Publisher consolidation is an ongoing story in any form of IP publishing. The competitive advantages of scale are so great and are becoming greater. It is something of an ongoing saga in the game industry too and we are going to see plenty more.
The internet has changed the rules in two ways. Firstly it has focussed all IP publishing (including books, TV, film etc) into a smaller number of big hits. This makes the risk/reward equation ever bigger. We are at the point where a single game can gross a billion dollars at retail, yet most non blockbuster games make a loss. Secondly it has reduced the entry barriers to publishing to nearly zero. Anyone can set up a business with instant global distribution, just put a game on Facebook, App Store, Steam, XLA or any of the other online distribution channels. So now we have around 100,000 active publishers in the world!
I see consolidation in the video games industry now taking four forms.
Firstly I don’t think that mid sized console publishers are a tenable business model any more. They have insufficient titles to spread the risk and if a single iteration of one of their blockbusters bombed they would be in very severe trouble. Take Two and Sega are perfect examples. So these sort of companies will be the subject of M&A activity. They will merge or be taken over so that their IP can flourish within a big enough organisation. Some publishers may well go bust as their accumulated debt becomes too much for anyone to take on. When this happens the IP will live on in the hands of others.
The third form of consolidation will be the small self publishers like those that have sprung up on the Apple iPhone App Store in the last 18 months. 99% of these have no idea about marketing and no idea about finance, so they are currently not going anywhere. However they are a hotbed of creativity and innovation. So those few that do understand marketing and finance will end up owning those that don’t. This is exactly what happened 20ish years ago with home computer game publishing.
The fourth is the acquisition of publishers for their IP by platform holders to give themselves exclusives. This has dropped off in recent times but could become a lot more prevalent when Apple join the home console market.
But it is this third form that can be the most exciting, as we are seeing with Playfish and Zynga. Done just right a publishing startup company could easily go from zero to a billion dollars turnover in just a few years. All you need to do this is the right people following the right business plan.
Games For Soldiers is a brilliant American charity, it: is a non-profit organization dedicated to sending entertainment items to deployed US troops the world over. Primarily we send new and used videogames and videogame consoles.
Obviously it is brilliant if you can help them by sending them any games stuff you may have for them to distribute. But they also need a bit of more specialist help:
Hello,
Games For Soldiers is looking to gain it’s 501(c)(3) status early in
2010. The approximate cost for this is $1,500 (includes incorporation,
IRS documentation and agent fees). I am reaching out to the community
first to see if anyone is willing or able to provide this service
pro-bono, to include filing fees.
Currently, nearly all donations are in the form of games. Any monetary
donations supplement out-of-pocket costs to myself for the shipping of
boxes overseas (each costs roughly $13). As a college student, one can
see how these continued expenses get out of hand quickly.
Fear not, GFS is not going away regardless. Even if we need to put off
the NPO filing, I will continue to operate GFS as I have for the last
year and a half. However, the benefit of gaining this status is that
some companies who currently donate games would also be willing and
able, by internal policy requirements, to offer monetary donations to
offset the shipping costs and allow GFS to donate greater amounts of
entertainment items.
Please forward this message along to anyone you know that may be
willing and able to assist us in this new adventure.
Thank you,
Jesse Williams
Games For Soldiers (.org)
Now giving a helping hand here should be easily within the compass of readers of this blog. So if you are in a position to help Jesse, then please do. If you need an email address, just ask me.
The politics and the rights and wrongs of deployments don’t come into this. These young men are a long way from home doing a dangerous job and they deserve our support.
The inspiration for this piece came from this article in The Times: A man who hacked into accounts to steal virtual characters and their possessions on one of the world’s biggest multi-player online game has been arrested…..Police believe that password details were obtained through a so-called phishing scam where a fake internet page tricks people into handing over their personal information……. “Our first and only concern is protecting our player community as we know the high value players place on their unique accounts,” said Mark Gerhard, chief executive of Jagex Games, the Cambridge-based company that launched RuneScape in 2001.
This is so sad to see. In the 30 years that it has been going the commercial video game industry has lived in a world of innocence. Developers and publishers were legitimate businesses that sought only to entertain their customers. And game players bought games to be entertained. But now, sadly, this has changed. Three trends have brought a lot of unsavoury people and behaviour to gaming and there are three reasons. Firstly it is now big business, there is a lot of money around so a scam that takes just a small percentage can be very lucrative. Secondly the industry is now global, criminals can be in completely different countries to where they commit their crimes. And thirdly we are all online, everyone has access to everyone.
So what are the dangers:
People who are after your money. This can take lots of forms. From phishing, as in the above example, to people set up gold farming scams. You now really need to have your guard up all the time and be very vigilant about what you do and what information you give people.
Unacceptable online behaviour. Cyber bullying is an very real fact of life and it happens a lot in online games. In fact bullying is a lot more common online than in the real world and it can be very nasty indeed. This is because the online environment is de-humanised, people behave as if they are not relating to other humans, the veneer of civilisation can very quickly disappear.
Paedophiles and other deviants looking for victims. Where better to find kids and build relationships with them than a video game? There have been quite a few reported instances of this sort of grooming but I am sure that it is just the tip of the iceberg. Our criminal justice system is well behind the curve here, technology has left them flat footed.
In game thieves. So you do a lot of work and/or pay a lot of money and you build up considerable in game assets. As in the real world there is envy and there are thieves. They look for any weakness in the game or any weakness in another player and they swoop. And this is not trivial, a player’s in game assets can be worth many thousands of dollars.
The game itself acting maliciously with your computer and what is on it. Virtually all online games put some software on your computer. It can be anything from a simple cookie to a huge proportion of the game. Mostly you (perhaps without realising it) download a client which manages the game within your machine. The problem is that these clients have access to everything else that is in your machine and everything that your machine does. And they do this, mainly to stop cheating and check for the use of bots. But they could just as easily take your credit card details, your email contacts, your Facebook login and all your other passwords etc. If you are using a work computer they could steal sensitive commercial information.
The game publisher doing unethical marketing. They could offer you in game rewards in return for your friends’ contact details then spam your friends. They could run a competition, once again in return for in game rewards, for the best online “review” resulting in praise spam for the game popping up in thousands of places all over the internet. This marketing costs the game publisher nothing but is an abuse of people’s trust and honesty.
Lack of an age policy and child protection. Buy a boxed game and it has an age rating. Go online and it can be the jungle. Games can expose people to all sorts of unsavoury antisocial behaviour. From profanity to discussions of all sorts of sexual perversions and the use of illegal drugs. This is OK for most adults but a developing child’s mind needs some protection. Yet many online games have, effectively, zero child protection.
Then there is behaviour that is unacceptable even to adults. Rabid racism, sexism and homophobia are rampant on the internet. There is no IQ test for logging on, so there is a huge amount of ignorant nastiness out there. Some of which, inevitably, finds its way into video games.
Malicious government online activity and cyberwarfare. We have seen the internet in two countries just about closed down by organised government attacks. Estonia in 2007 and Georgia in 2008. There is an ongoing cyber war between China and the USA known as Titan Rain. Online video games are the perfect mechanism for a government to gain access and control of literally millions of computers around the world.
Finally there are some people who take delight in acting maliciously. Even if it is only one in ten thousand it becomes a lot of people if you have millions of players. We see these malicious sociopaths at work with the creation of computer viruses. Inside a game they can and do wreak all sorts of havok.
When it comes to protecting yourself, your family and your computer from all of this there are some things you can do and some things the game publisher can do.
Be vigilant at all times. A game may be fun but that doesn’t mean that it is safe. Never take anything at face value unless you are very, very sure.
Investigate very thoroughly who you are letting onto your computer before you even look at a game. You are very vulnerable once you start playing so don’t even get into that situation until you have done the research. Google can tell you a lot. Typing in the name of the game followed with key words such as scam and spam can tell you a fair bit.
Total transparency. Don’t deal with anyone who doesn’t tell you about themselves. Their address, their key staff, their ownership. Electronic Arts and Activision tell you this stuff. Don’t go near anyone who doesn’t.
A clear child protection policy. If they haven’t got one then problems are inevitable, for adults as well as children.
24/7 moderation of the game with a simple mechanism for reporting bad behaviour and a response to complaints that is very rapid. This takes dozens of staff so is expensive to do. But you are paying for the game (even with “Free” games) and this is part of what the publisher should provide for your money.
An online security team. They will be looking for gold farmers and bots and they will also be looking for scammers. Done properly this costs millions every year. But it is necessary for your protection.
Open, uncensored discussion. All these games have forums which should enable a full and frank exchange of all the issues relating to the game. If the game owners are censoring discussions or banning legitimate topics it can only be because they have something to hide.
So play safe, have fun and don’t get paranoid. Whatever you do don’t show this article to Keith Vaz or Jack Thompson. They would burst blood vessels.
This makes absolute complete and utter sense. People buy perceptions, not reality. And people are far more concerned about peer pressure than they are concerned about their own judgement.
There is a make of car that is distinctly average. In fact some of the smaller models are not very good at all. Yet it manages to sell extremely well despite selling at a premium price. Because people want to be seen behind the badge. They will pay thousands of dollars in premium to buy just a few dollars worth of chrome and enamel badge. And most people buy silver and grey ones, because that is what everyone else does. All due to the power of marketing. The brand is presented as sporty which is just the image every housewife wants when she does the school run. Customers just don’t realise when they are victims.
If you are a game developer and you tell your mum about the game you are working on then that is marketing. Marketing is any communication. So it is a fact that a game with zero marketing will have zero sales.
Over the years I have never seen a game get the sales that it deserved just for its quality. Yet I have many times seen a game get far more sales than it deserves because of its marketing. And I have also seen many good games fail because of bad marketing.
Just look at the five games I was writing about yesterday. They are virtually identical yet they have massively different numbers of players. The difference is just the marketing. Marketing is more important than the game, this is a self evident truth.
Yet still there are very many game publishers who do not understand this. Many self and small publishers on the iPhone App Store, for instance. There you can see that marketed games sell well, non marketed games sell badly. It has precious little to do with the quality of the game. (Unless it is a total dog).
Now EEDAR has done research in the game marketplace from which they say “Marketing influences game revenue three times more than quality scores”. And actually the difference is even bigger than that, because the scores form part of the marketing!
So there you have it. If you want to sell more games and make more money then send me an email and I will come and sort it out for you!
There are now many hundreds of millions of people playing video games. It is inevitable that many millions of these are great gaming enthusiasts and that many of these want to work in the video game industry. My advice, based on 30 years in and around it, is don’t. And here’s why:
Playing video games is fun, it is entertainment. So you might think that making video games is fun. It isn’t. Not more or less than other jobs. Because that is what it is, just another job.
People who are industry wannabes always say that they want to be game designers. This is because they don’t know how a game is made. In fact there are very few game designers involved. On any development team the main sort of people are artists (of different sorts) and programmers (of different sorts).
Being keen about video games is no qualification whatsoever for working in the industry. Being a good computer programmer or artist is a much better basis. Even better is to be very good at maths. Game companies want people with the skills to make games and being an enthusiast isn’t a skill.
The competition to get into the game industry is fierce because there are so many wannabes. So the industry can be very, very choosy. When I was at Codemasters the minimum degree to get in was a 2.1 and you had to score over 130 in an IQ test.
Because so many people want in the wages are terrible. Similarly qualified graduates going into other industries will typically earn a lot more.
If the wages are bad then the working conditions are worse. Crunch is a widespread practice in the industry. Huge numbers of hours of unpaid overtime.
Career advancement is typically very, very slow. This is because most of the jobs are at a similar level, programming and creating art.
The work itself is often tedious, repetitive and boring. It is a hard slog to create all the dots that you see on the screen. There really are lots of better and more interesting jobs in the world.
Job security is awful. Companies routinely get rid of people as the work flow fluctuates. No matter how good you are it is ridiculously easy to find yourself out of a job.
The training industry has jumped onto exploiting the wannabe. Lots of colleges and universities have jumped on the bandwagon. There are now hundreds of supposed game industry courses in the UK. Yet amazingly only 6 of these are accredited by Skillset! There are now more people in training for the video game industry than there are in the industry. The vast majority of these people are wasting their time and money.
Game companies are mainly not very well run. This is because it is an immature industry and the management skills and practices are just not there. It is much, much nicer working in an organisation that is run properly. Which you are far more likely to find outside gaming.
The industry is firing, not hiring. Lots of game studios have closed, many have shed jobs. Electronic Arts alone is shedding 1,500 people. There are lots of very good, very experienced game developers who can’t get a job. Against that newbies don’t stand a chance.
The proof, as they say, is in the pudding. And over the years I have seen lots and lots of people leave the video game industry. They move to other industries where the work is better, they earn more money, they get promotions and they have job security.
If after all this you are still determined then I have some advice. Don’t train for the video game industry. Instead train to get a very good qualification that the game industry needs but which you could use in other industries. Maths and physics are the prime examples. There is a huge shortage of graduates in these subjects, so you would be far more attractive to a game company. Good artists and C++ programmers are more common, so less valued. But they are still both qualifications that can be used in many industries.
I opened one of the first computer stores, Microdigital in Liverpool, in 1978. So I was in a good position to see the rise of Apple to dominate the personal computer (PC) market. I even visited Apple in Cupertino in California and was offered the UK distributorship. So this put me in the front row as they built up to own the market, then threw it all away.
Apple computers were well made, came with excellent documentation and were easy to use. All of which was not necessarily true of the competition. Apples were also expensive but were worth the extra. They became a bit of a cult, a fashion item, as well.
The big strength of Apple computers was that the software and the hardware came from the same company, so they worked. The resultant dominance in the early 80s was such that other PCs might as well not have existed. Apple had a virtual monopoly. Then along came Microsoft’s MSDOS and changed the rules. Here was a standardised operating system (and consequential applications) that would run on machines from many hardware manufacturers. So the hardware manufacturers had to compete against each other on price and features. And it was war.
The result of this war was the survival of the fittest, rapid evolution that improved the breed. And Apple was left well behind looking underpowered and overpriced, they could not even vaguely get near competing with the MSDOS machines. So Apple’s market share collapsed and they fell back to serving niche markets such as pre publishing. In just a couple of years they went from near monopoly to sideshow.
And history could very well be repeating itself. Substitute Personal Computer with Smartphone. And substitute MSDOS with Android. Otherwise it is the same. Apple dominate the consumer smartphone market with the iPhone. The hardware and the software come from the same company and it works. It is a fashion item, a bit of a cult. Android, however, is available to all hardware manufacturers. Most of them are developing models that use it. So they will have to compete against each other on price and features. It will be war with rapid evolution improving the breed. Already the Samsung i7500 looks better featured than an iPhone.
Some may think that the tens of thousands of applications on the App Store make the iPhone entrenched. But remember that these were put together in a little over a year, so Android can do the same in a year. Just as Apple’s dominance of PC application software was quickly overcome when the MSDOS computers arrived on the scene in big numbers.
Of course Steve Jobs and Apple, having been there before, may have the answer this time. They need to entrench their position, which they are doing by going to multiple air time providers in each territory and by going to new territories. But Android will be doing all this too. They need to very rapidly advance their hardware technology. There is plenty of room to do this, the iPhone has a rubbish camera and no OLED screen, for instance. And the iPhone operating system has lots of room for improvement. But Android will be doing all this too.
Apple are moving on from the iPhone with a tablet device and probably a home console. Maybe this is their strategy. Don’t compete, move on.
The one saving grace that Apple have here is their brilliant marketing. In fact, to me, Apple are a marketing company first and a technology company second. Compare and contrast that with Google who have a trail of great products that have failed due to poor, almost non existent, marketing. But Android is different because it doesn’t need Google marketing, it will be marketed by all the handset manufacturers and air time providers. Companies like Vodafone, Sony Ericsson, Sprint Nextel, Samsung, Motorola, LG, Toshiba and Garmin. Formidable, isn’t it?
Now for the gaming perspective. The iPhone and App Store have produced the biggest flowering of gaming creativity in history. In terms of range of products they have left every other platform behind. However the business model employed here is easily copied. So we are moving into a new age where the iPhone game publishers will maximise their profitability by going multi format. Develop for Android, iPhone, PSP, DS and possibly PC simultaneously and reap the marketing benefits. It makes sense.
You may think that with tens of millions of bloggers and millions of forums that we live in an age where there is a free flow of knowledge and information. That you can go to Google and get a balanced and rounded view on any subject by reading the results of a search. And you would be very wrong.
The mechanism for the wholesale denial of free speech is the English libel system. Here are some of the factors at play:
A plaintiff can sue you for libel and make a whole list of grievances. They don’t have to prove that any of these are the truth. It is up to the defendant to disprove each claim to the standards required by a court. So the whole system is weighed very heavily in favour of the plaintiff.
Going to court to defend a libel claim is immensely expensive and there is no legal aid. Many cases now get to over a million pounds in legal fees.
Libel tourism is a reality with plaintiffs now making London their city of choice when they want to take action because the libel laws here are so repressive. This alone should tell you that there is something wrong.
Once you realise the above you can see what the mechanism for suppressing free speech is.
A company does a Google search to see what is written about it on the internet.
The company gives a list of all the stuff it doesn’t like (whether it is the truth or not) to an English solicitor.
The solicitor writes letters to all these websites threatening legal action.
The solicitor also writes to the website hosting company threatening legal action.
The owner of the website and/or the owner of the hosting company immediately remove the content, they have no option because of the financial consequences of the threat.
The internet is censored and no longer tells the truth.
This mechanism works for getting the truth off the internet as well as lies, because it is not tested. The authors and site owners are in no position to defend their content. And once the content is removed it is removed for the whole world. So a heavy handed bully in London will deny free speech in America, Canada, everywhere.
This mechanism is now being used on a massive scale. Solicitors in London are making a very nice living by processing large numbers of these threatening letters. Vast amounts of internet content is being removed. And of course it is the bad guys, the people with something to hide, who use this mechanism most. So the world is denied the knowledge that it most needs for people to protect themselves.
What is deeply ironic is that the blogs and forums that are being acted against have a built in reply mechanism. So when somebody sees something that they think is wrong then they can say so. This happens millions of times every day. These sorts of websites are far closer to a conversation in a pub than they are to the printed newspapers that the libel laws were intended for. So all sides of an argument can be discussed.
And so to Bruceongames. The success of this blog means that it now comes near the top in many Google searches. And I am often saying what I think about companies. (In law this is called fair comment and is allowed). So I have been threatened with libel action now by two companies. Evony and Train2game. Evony are taking the action in Australia because it is almost the same as English law (and there is a reciprocal arrangement for collecting judgement) but I have the added inconvenience of trying to defend myself on the other side of the planet. Train2game seem to have succeeded in removing a lot about themselves from the internet. I have also temporarily removed my article about them, even though it is 100% truthful, whilst I consider the implications. Another successful censoring of the internet.
