Pirate’s Booty

As a faithful nerd, I made haste to get home quickly today to install and play my piping-hot, release-day copy of Blizzard’s new RPG, Diablo 3. Unfortunately, millions of other PC and Mac gamers had the same intentions I did, and the game’s servers were down for maintenance, due to unexpected heavy loads.

While Diablo 3 features a robust single-player game in addition to its multiplayer universe, it does require a constant internet connection to play, even in single-player mode. This helps support battle.net’s drop-in, drop-out co/op mode, and also serves as a convenient form of DRM (Digital Rights Management). DRM is a controversial tool in publisher’s ever-increasing fight against piracy.

Sadly, the combination of the requirement of the game to be in connection with Activision/Blizzard’s servers in order to even play a single-player game left me enjoying the music of Diablo’s title screen, instead of slashing my way through dungeons in search of treasure.

Surely, there must be a better way!

The argument against DRM is that it merely delays piracy instead of preventing it. Pirates will eventually figure out a way around the game’s copy protection, and the legal users, who shelled out hard-earned bucks for gaming’s equivalent of a Box-Office MegaHit!!! are the ones who end up screwed in the end. But PC publishers have seen their market share, shelf space, and revenues drop dramatically with the advent of widespread broadband connections offering quick downloads, and torrent sites cropping up everyday, which let the average Joe illegally download today’s hottest game in hours, just as easily as browsing cat videos on YouTube. Is this the death of PC gaming?

Publishers and Developers aren’t stupid! We don’t like spending thousands of hours of hard work on a product just to give it away. It’s not fair to us, and it’s not fair to the countless players out there who feel there is value in the entertainment games bring. (Thank you!) So what do you see? A massive drop-off in the amount of AAA titles that make it to the PC – once the leader in the entire video games industry! Publishers of the bigger titles have moved almost completely to the console – it’s much harder to pirate there, due to the proprietary media formats and focused OS of the current generation of consoles. Piracy on console DOES exist, of course, especially for the portable devices (Nintendo DS, Sony PSP), but it is far less widespread than piracy on the PC.

Smaller publishers, and even the big boys, have also jumped into the new frontier of Mobile and Social gaming, and its groundbreaking “freemium” model. With “freemium” titles, the game itself is free-to-play. Users spend money on in-game items, such as virtual currency, weapons, outfits, levels, and other game-enhancing devices. Facebook games, led by Zynga, and their proliferation of “-Ville” games, make the majority of their money on IAP (In-App Purchases). Zynga has turned into a powerhouse publisher, with not a single paid title to their name, and little to no piracy woes.

Console games have begun to tap into this growing market as well – Call of Duty has their “Elite” service which offers hardcore gamers enhanced stats, strategies, and content, and EA Sports has done great business with their collectible card in-game purchases. Not only games can be freemium – Microsoft’s Skype, a free chat client, is one of the biggest programs in the world. It offers free users basic voice, video, and text chat, and offers premium users group video, screen-sharing, and other “Pro” features. It’s the “Premium” in “Freemium”.

Back to the PC, Valve Software’s Team Fortress 2, a quite-heralded multiplayer shooter, went free-to-play after several years of being a paid title. The game was supported by a rich library of purchasable hats, weapons, and trinkets, that the majority of players did not purchase. These items were available in-game as random drops, but could be purchased for real money. Only a small percent of players in Free-to-Play games actually purchase items – less than 5%, but with a big enough user base, that translates into some serious revenue for the publisher and developer!

How much revenue? 12 times! TWELVE TIMES! 12x! That’s 6×2! 3×4! 4×3! That’s after making the game itself completely free. Making the game free-to-play ensures that the pirates and legal consumers are on the same page – NOBODY pays for the game, to play at least.

Oh, and that thing about PC gaming dying due to piracy and a shift to consoles? Not anytime soon. PC Games currently make up nearly 50% of the TOTAL video game market share, based on revenue. A big reason for that? A little company called Zynga, and those cute little Facebook games! Zynga alone makes up nearly 5% of the PC market, the majority of which from IAPs!

Does free-to-play solve all of the piracy fears the gaming industry faces? No. There are some games that simply don’t have monetization methods in place for free titles – the traditional single-player RPG, strategy games, and platformers, specifically, rely on a “closed” experience – the user progresses through a full, linear game, which typically comes with beautiful graphics, an immersive score, and the big budget which comes with beautiful graphics and an immersive score. These titles benefit from a full retail package, at a full price – which is why they have moved completely to console, and haven’t dominated mobile, social, or PC gaming recently. (There are exceptions to this, of course, such as the Elder Scrolls and Fallout series on PC, and the glut of strategy-lite games on mobile).

The real solution to piracy is for humans to never pirate. No stealing, ever. But we know that with a minimization of risk (anonymous clicks vs. holding up a store with a handgun), supreme availability (torrentzarefree, lolz!), and a wide selection of media, software piracy is probably here to stay. The free-to-play solution offers a great benefit for almost every platform and genre. It allows publishers of all sizes to make money, kicks pirates down a notch, and will be here to stay as well!

Do Over or Do Not: Crucial Decisions in Software Re-development

We’ve all had experience creating something new.  It can be daunting, and your instincts tell you to sit down and plan out everything you’re going to do.  Often, though, you come to find that what you have created works, but isn’t really sufficient.  It could be because the specifications have changed, or that people interact with your work in a way you didn’t expect, or simply that you didn’t execute it in the best way possible.  Whatever the reason, the end result is the same – you don’t have exactly what you need.

The core of this problem is complexity.  As a task becomes more complex, it becomes harder to predict the output based solely on the inputs.  Software development is so complex that it is impossible to predict the outcome.  Despite all the planning and designing, the plan is going to change.  Of course, this isn’t news to anyone; it’s a common occurrence, and not only in software.  Life is full of complex problems with complex solutions.  So if making software is a complex process, and everyone understands that complex processes are impossible to predict, why is so much time spent trying to plan and design software?

There are many reasons for an emphasis on planning and design, but the primary cause is a resistance to redo completed work.  Teams don’t want to rework tasks or features because it doesn’t feel like progress, and if a team is not progressing, it’s not succeeding.  To avoid having to redo a task, a team will try to predict exactly what is needed for that task.  But as we’ve all experienced, this prediction is impossible.  Your best effort will only get you close.  A team is better off starting their work right away.  Later, they can take any time they would have used for design to iterate on their initial work.  This time spent on rework will prove to be more efficient because it is happening when the team is more knowledgeable about the task.  The beginning is your least knowledgeable point, so it is the worst time to make plans or designs.

One of our latest projects, Big Win Blackjack, has been a fine example of the value of reworking.  Big Win Blackjack began life as Blackjack Cheater and has gone through several revisions.  Many times during that process we were faced with the choice of reworking a feature to improve it or moving on to the next feature.  For example, our sponsored casino had problems with card layout.  They were not show-stopping issues, but they looked sloppy. To fix these problems, we would have to rewrite the card layout logic.  That’s a scary sounding task, and it meant delaying new features.  But in the end, the game is better off with nicer card layout, and no amount of time spent planning would have come up with a better solution.  In every discussion someone raised the concern that reworking would take too long.  You see, our Blackjack projects were taking longer than we had anticipated, and we wanted to release a new version.  But every time we decided to rework the feature, the result was worth the time spent because we were able to make improvements we never would have anticipated.

I’m not trying to suggest that reworking a feature is always the best option; a decision has to be made for each feature.  But I do believe that the cost of reworking something is almost always overestimated, and that the cost of planning is likewise underestimated.  Don’t be afraid to jump in and start working.  Use your planning time to improve what you’ve done; you’ll most likely know better what needs to be done.

Five Mobile and Tech Predictions for 2012

2011 was a great year for mobile and tech in general.  Free apps emerged as a win-win for publishers and consumers.  Amazon entered the mobile market in a big way.  Apple made it cool to talk to your phone, even without someone connected at the other end.  And Google launched the fastest growing social network in history.  What’s in store for 2012?  Read on to find out.

1. 3-6 Months of BS iPad 3 Rumors

Blah blah blah, retina display!  Blah blah blah, $299!  If your job is to analyze tech companies for an investment bank, you probably don’t know shit about the iPad 3.  Until Digitimes gets the real info from the supply chain in China, give it a rest.  Ditto for iTV, or whatever it may be called, only add 6 months to the timeframe.

 2. Android Tablet Relevance

First, a quick peek at some internal Mobile Deluxe stats for Android and iOS tablet usage.  In Solitaire Deluxe, we allow unlimited game play in the Solitaire Arcade section and monetize with in-game banner ads.  Analyzing the number of ad impressions generated by device size is a good way to get a feel for the relative usage of phones versus tablets.  On Android, only 6% of our ad impressions come from the tablet range.  On iOS, fully 30% of our ad impressions come from the iPad.  So, Android tablets are lagging very far behind.

Why is the tablet ratio important?  Because tablet users over index  in engagement.  The tablet form factor is better suited to situations that can allow for longer play sessions.  How often do you see someone in line at the grocery store pull out their tablet and play a few minutes of solitaire?  Never.  But you do see people on their smartphones while standing in line, riding in an elevator or various other micro-play situations.  Tablets are more of a couch device, used in parallel with other media such as TV.  Also, tablet users are typically more affluent, so they would be more likely to spend money on IAP.

Google’s iPad killer notwithstanding, no one Android tablet is going to prove to be the iPad’s equal.  The good news is that one doesn’t need to.  As with the handset segment, the sum of the Android tablets can combine to compete with the iPad.  The Kindle Fire and other low priced 7″ tablets will provide a significant boost to the tablet ranks in early 2012.  If the larger tablets can find a way to add a little more oomph to their sales figures, the overall numbers should be solid.  More devices = more revenue for publishers.

BTW, if Google really wanted to provide an iPad killer to Android consumers, they would help get ICS rolled out to more devices, more quickly.  The OS experience is the main area where iPad rules the roost.  The hardware form factor for the full sized Samsung Tab was perfect in my eyes.  If the UI worked like iOS, it would have been an equal device.

3. Twitter Transitions to a Media Platform

John Battelle nailed it in two posts.  Twitter is the most interesting of the social media companies, primarily because it is still so undeveloped.  I use Twitter almost like an RSS feed to scan for important news and tech articles.  I also use Twitter to communicate with friends and converse with colleagues.  When I get really brave, I click on the trending topics just to see how creative one can get with the English language.  Twitter has a multitude of facets and can be used by different people in different ways and still remain part of the unique Twitter experience.

In John Battelle’s second post on the Free Radical nature of Twitter, he plants a very interesting seed in the last three sentences.  The transparent and egalitarian nature of Twitter allows for conversations that could not otherwise happen.  Sure, there’s about a .001% chance that Bill Gates will respond to your tweet, but there’s a much better chance that Alton Brown will.  Twitter drips with the potential to evolve into something even better.  I can’t tell you exactly how, but I would bet that Twitter will end 2012 looking a lot different than it does now.

4. Mobile Publisher Consolidation

Mobile 1.0 went through a consolidation phase in the mid 2000’s and reached a level of relative maturity with a handful of major players (Gameloft, Glu, EA, Dchoc) dominating the space.  The combination of smartphones, free apps and open markets (iOS and Android) has created the Mobile 2.0 games space.  There are now a significant number of independent iPhone and Android publishers that consistently get multiple games to the upper echelon of the Top Grossing chart.  EA, Gameloft and Glu are still big players, but they do not dominate the way they did when Verizon’s Brew deck and AT&T’s J2ME deck were the biggest streams of revenue around.

Storm8/TeamLava, Backflip, Tiny Co, Pocket Gems and some other companies are under the mainstream consumer radar, but kicking butt and making serious money.  Storm8 has pulled at least one $1MM IAP day.  Backflip has seen DragonVale hang out in the Top 10 Grossing apps since its launch in mid-September.  However, a lot of these companies find themselves in a no-man’s land, where they make too much money to be a value acquisition for a big publisher, but not enough money to IPO or pull a JAMDAT.  Top tier independent publishers will be looking to acquire smaller publishers to grab market share and bulk up.  The second tier of indie publishers are still profitable and growing, but not to the extent of the top tier.  These are the publishers most likely to be snapped up by the Zyngas and Googles (and Storm8s and Backflips) of the world.  They have tremendous growth potential, but are still in the $20MM – $50MM valuation range.  Patents, tech advantages and scalability will be the key differentiators for the second tier of publisher.

5. User Acquisition for Mobile Takes Center Stage

Now that (almost) everyone is on the same page and cranking out free apps, the game has shifted to acquiring as many users as possible for as cheaply as possible.  Apple and Android only promote a limited amount of apps each week.  Publishers are responsible for driving their own traffic, for the most part.  User acquisition channels (Ad networks, Pay-Per-Install providers) are getting more and more crowded.  More demand for users means that User Acquisition prices are bound to rise.  Monetization enablers will still play an important role, but I expect to see a steady stream of new entrants to the user acquisition game.  Expect to see the mobile-specific game networks (OpenFeint, Mobage, Papaya, Playphone) tout the size of their user base and the ability to drive installs as key features.

Another trend to watch for in 2012 is an increase in the number of branded free apps.  Free has eliminated the barrier to entry for downloading an app, but it is still tough to get noticed in today’s massive marketplaces.  Brands can provide a differentiator that will pull users into an app.  Smurf’s Village was the first app to show the power of applying a good brand to a complimentary style of gameplay.  The results were spectacular.  Family Feud & Friends has been climbing within the Top 100 Grossing and is now a consistent Top 25 performer.  It will be interesting to see which brands are able to pair up with the correct gameplay styles and make an impact.

5 Key Factors for Deciding to Make Your App Free

Have you checked out the list of Top Grossing apps in the Apple App Store recently?  Besides some flash-in-the-pan specialty app for ornithologists, 6 of the top 7 top grossing apps are free.

Apple App Store Top Grossing

For close followers of the mobile industry, that’s no surprise.  In a previous post last October, I pointed out the impact that free apps were having on the App Store.  The Facebook model of free apps with in-game transactions is now dominating mobile as well.  Why?  As counterintuitive as it may seem, it’s possible to make more money when you give your app away for free.  Possible, but certainly not guaranteed.

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Free App Impact on App Store’s Top Grossing Games

Update: Between the writing and publishing of this entry, Ngmoco blew up.  First came the rumors, then the facts. That’s $400 Million worth of proof that Free-to-Play apps have a huge future on the Apple App Store!

Looking for a measure of how much impact Free-to-Play games are making on the Apple App Store? As Finger Gaming noted last week, free apps occupied 5 of the top 10 iPad top Grossing spots. And last Friday afternoon around 4:30pm PST, 12 of the Top 50 Highest Grossing iPhone Games were free. This is not a huge shock, given the runaway success companies like Zynga and the artist formerly known as Playdom are seeing with the free model on Facebook and MySpace. But it is great to see free apps successfully competing against branded juggernauts such as Madden, FIFA, Bejeweled and Final Fantasy in the Apple App Store.

Check out the list of free titles in the Top 50 Grossing iPhone Game Apps (10/01/2010 at 4:30PM PST):

CityStory TeamLava
We Rule Ngmoco
Haypi Kingdom Haypi
Zombie Farm Playforge
Coin Push Frenzy Freeverse
Original Gangstaz Rock Addmired
Millionaire City Digital Chocolate
Tap Fish BayView Labs
We City Ngmoco
Farm Story TeamLava
We Farm Ngmoco
Pocket Frogs NimbleBit

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GS60 Game Development

For mobile games, like just about anything else, getting your project done efficiently and on time is essential for success. At GOSUB60, we’ve decided to implement the agile framework known as Scrum to improve our development process, and thus increase our efficiency. Scrum has been used in software development for about 15 years, but it has only recently come to the games industry. I thought it might be useful to examine how Scrum applies to developing mobile software, and the ups and downs of our transition to this process.

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