This one continues to baffle me. Why is it that none of the three consoles have user ratings on content? Why is it that things that take weeks in the Web 2.0 world take months or longer in the games industry? I suppose I can rattle off a few reasons that would come up in exec meetings:

• It’s too hard to manage the content
• By definition, it means some games are rated badly, and we want to position ourselves as having no bad games
• It’s not in our schedule
• We want to handle our own PR and portfolio
• It’ll piss off publishers
• We have no way of deleting offensive content (!!!?)

While some of these are real concerns, I don’t see this having stopped Amazon. Or Ebay. Or Facebook. I suppose XNA on the 360 addresses these issues, but I still think all content on the 360 should be rated, commented on, tagged, and searchable. And while I’m on my pipe dream I may as well wish for being able to write plug-ins for the dashboard, and that monetization for those plug-ins should be easy. Yes, these are hard legal issues, but I also think it would rock everyone’s world.

Gamesindusty.biz has an awesome article on treating consumers like pirates. I’ve had the unfortunate experience of working with many types of futile DRM my experience in game development, including SecuROM, StarForce, and TryMedia — they all amounted to one simple truth: it doesn’t work.

This is why I love the free-to-play model — it completely obliterates this problem, and blows down almost all barriers to entry. But secure online play isn’t the only option out there — in fact, as the article suggests, it still poses issues to singleplayer games.  The other day my internet connection died, and I wanted to play Portal, but because Steam couldn’t connect, I wasn’t able to.

I also like Stardock’s No DRM, update-by-secure-login method, and ad driven freeware is definitely a viable option. I’m particulary intrigued by the indie music model where bands give out music for free to drive consumers to merchandise and live performances, and I’m wondering if there’s a parallel we can draw in our industry.

Tomorrow, I’m leaving for my first extended vacation since I launched Klei Entertainment in 2005, and I was passing time catching up on some Wired articles. This particular one intrigued me. For the past 5 years, I’ve avoided mobile phone development like the 3D0 for two obvious reasons: carriers hold all the power, and developing on them is a nightmare because of the multitude of platforms.

Reading about Google Android and the iPhone SDK is encouraging, though. Having a decent web browser (albeit without Flash support) is more encouraging still. Already, creating ad supported mobile web apps is possible, and it’s only a matter of time before downloading third-party mobile applications and games becomes easy and not an exercise in frustration; I for one jailbroke my iPod Touch and I’m amazed at the ease of using the Installer application.

I know most readers of this blog are console and PC game developers, but if any of you have mobile experience, I’d love to pick your brain a bit. You know how to reach me!

It’s amazing how a promotion can turn against you. Earlier this year, I went to a home decor store to purchase a gift for my soon-to-be wife. I chose what I wanted, and realized that, lucky for me, it was on sale! Every item was 25% off. However, when I went the cashier, the discount didn’t ring through:

“Aren’t these items on sale?”

“No, I don’t think so”

“But the sign said they are”

“Oh. Right… only one item can be discounted”

“Huh?”

“It’s a discount for only the first item”

“That’s interesting. The sign didn’t mention that at all.”

“Well, this is actually supposed to be a flyer-only sale, and we’re just providing this discount as a service to our customers.”

“I see. (Not really, as it didn’t explain the false advertising). How about I purchase this item, and then the other one, one at a time?”

“You can’t do that.”

“Why not?”

“Because I know you now and won’t let you”

By then, she was getting argumentative, and a shade shy of down right rude. At that point I gave in a took a discount off the larger ticket item, but I found it quite ironic that they managed to irritate me by discounting an item and “providing a service”.

Most of you are probably familiar with the notion of low-end Disruptive Technology. In a nutshell, it happens when products focus on the least demanding, least profitable customers in a market. These customers are largely ignored by the incumbent; they simply aren’t worth chasing with their current business model. However, the new entrants give these undesirable customers a “good enough” product, all the while improving their technology. Eventually, the entrants create more value than is needed for the low-end customers, and the product moves up-market, stealing market share from the incumbent. Because they were forced to innovate and create better value-add with lower costs, the entrants give better value to the encumbent’s mid-value customers, and the encumbents are forced to serve an ever-shrinking high-end market.

The obvious analogy here are AAA console games as the encumbent, but who are the new entrants?

Let’s take a look at what’s happening in our industry at the moment:

The AAA console developer’s dilemma

Often, the incumbent knows about the rise of the disruptive technology, but does nothing about it. In this instance, the reasons are:

1) The cost of switching is way too high. Companies have so much money invested in developing multi-million dollar games that it’s unreasonable to focus their energies somewhere else.

2) Companies do not want to compete with themselves. For example, all three next-generation consoles have a very precarious balancing act to not aggrevate their partners (developers and especially retailers), and thus must treat digital content as more of a novelty than as an alternative to retail games.

3) Business is good. This is probably the number one reason that developers feel no pain at the moment — year-on-year, retail games are making more money; not less.

Looking at the AAA console market’s target market, we see that they target between the mid to the highest performance demands of the consumer.

The Rise of the Free Game

These days, there are so many new business models targetting the lower-end markets that it would take a book to cover them all. I believe many of these are here to stay and will thrive: innovating on interface as the Wii does, for example. Mobile games, as horrible as they are, will continue to improve and will one day be “good enough”.

However, to me one of them sticks out to be particularly promising: the free online game. I believe that there are several key innovations on this type of game that will make it extremely successful.

To see how closely this matches the theory, we can start by looking at its history: the early web games targetted the least demanding customers — those who want a small distraction. The experience has horrible — slow connection speeds and poor implementations allowed for only the worst games. The web bubble came and went, and many games that were meant to be never happened.

As the free games gained ground, the first offerings that were successful were still far below the quality of console games (by traditional measures of features and graphics, that is): Neopets, Habbo Hotel, BnB are all examples of this. However, as these companies innovated on their technology, their offerings became more advanced and each new offering met the demands of higher and higher markets: Kart Rider and Gunbound are recent examples. Let’s see how they can do this and still keep a competitive edge:

Key Advantage 1: Initial Cost of Development

Because the games are free, they have the luxury of lower expectations — they could launch faster, and receive input faster, before a large investment is made. Indeed, free online games can launch with an initial investment that is a fraction of the cost (in time and money) of a traditional game.

Key Advantage 2: Better Value for Consumers

Once the game is made, they can quickly test the waters with the consumers. These consumers have an extremely low barrier to entry, so a userbase is quickly built. If the game was successful, they can then build on the success and move up-market, reacting to consumer demand as needed.

The end result is that the game is made with less money, costs less for the consumer, and is more in tune with the demands of the consumer. These games, if built properly, simply give better value to the consumer.

Key Advantage 3: Multiple Monetization Avenues

Whether it be advertising revenue, item selling, market research due to the large user base, or premium subscriptions, free games have a large number of monetization avenues. I’ve complained before that boxed products generally only have one point of monetization, possibly two if downloadable content is sold, but in general this type of upfront costing causes a large barrier to entry that is non-existant for Free Online Games.

When, not If

I think it’s clear that there will soon be a convergence from Web 2.0 companies and Game Development studios in the race to build value in free online games. These games have and will continue to move up-market. Things that can only be done on large budgets today will become available at a discount, or become irrelevant, tomorrow. The key now is to determine how to position yourself to not only take advantage of this new model, but also position yourself to bring unprecedented value to the consumers.

Exciting, isn’t it?

When I built the Skirmish AI for Dawn of War, we had 4 levels of difficulty: easy, normal, hard and insane. The easy difficulty was brain-dead — it built a grunt every once in a while, and sent it your way, making it feel like something was happening. On the normal difficulty, it calculated your current army value and built to about 90% of that value, making the game feel like it was close, but almost always losing to you. On hard, the AI played as hard as it could, and on insane it got a 20% resource boost.

The point is, I tried to make the normal AI play at a level where it felt like you might lose, but almost never did. I don’t believe I quite succeeded (there was often a steam rolling effect — if the player lost a fight, the AI wouldn’t commit suicide to some of its army, so it ended up with a higher army count), but this idea to me is the pinnacle of fun game AI — not one that can wipe the floor with you, although that of course is a very interesting technical challenge.

I constantly push for a larger concentration on the initial user experience, game difficulty being one of them; however, rightly so, these factors are traditionally placed as a “B” feature whereas graphics was placed as an “A” feature. Let’s take a look at how Game Difficulty is starting to become more important by looking at different distribution models:

Distribution: Packaged

In packaged goods, unless the reviews stated the game is ridiculously hard (and even then, who but hardcore gamers read reviews?), a player is going to base your purchase decision off other factors, such as marketing, word of mouth, game play trailers and the like. After purchase, chances are they’ll have a higher tolerance to difficulty, since they’ve already made the purchase.

Now, when you talk about, say, Devil May Cry to a fellow player, are you going to tell them “oh it took me hours to get good at the game, but then it was totally fun”, or are you simply going to say “it was totally fun”? Chances are it’s going to be the latter, because you’ve already forgotten how hard it was to get good at the game.

Distribution: Try & Buy / Free to play

Contrast this to a Try & Buy experience. I remember being very excited that Alien Hominid was coming to Xbox Live Arcade. I immediately downloaded it when it came out, and promptly died over and over again in the first level. Did I purchase the game? Of course not. And you can also expect what my impression of the game is.

The core difference here is the barrier to entry and the barrier to exit. Packaged games have a high barrier on both ends, trapping a user inside. It takes far more effort to attract a new user, but once they have one, keeping them isn’t much of a problem (nor do they care that much if they leave).

Games that are free to play or try, however, have an extremely low barrier to entry, but a proportionally low barrier to exit. Hence, even though it’s easy to attract new users, because they have nothing invested in the game, they’ll quit if their first impression is not overwhelmingly positive. There are lots of different variables to the initial user experience, but difficulty is definitely up there.

This is actually a pet peeve of mine — if I die more than twice in a single level, I’ll probably quit and never play again. So please, make games that feel challenging but actually is almost impossible to lose!

Note: My apologies for the lack of a post last week: my wedding was last Saturday, and needless to say it was a crazy week where even thinking about work was taboo. In fact, I’m still technically on vacation as I write this.

Last Wednesday, the Eets Team released our first Puzzle Pack for Eets: Chowdown. The pack includes about 20 extra levels, and a few cool new items to play with. I started perusing some of the fourms to see what the reactions were. Interestingly, the number one comment was that, although they loved the game, most players never completed the original set of levels we launched with (120 levels).

In other words, we probably gave too much content in the original game, and could have sold the last 20-30 levels as an expansion. In my perfect 20/20 hindsight, this makes quite a bit of sense, considering that it takes hours even for us to complete all the levels in order to record all the official solutions. We gave a ridiculous amount of value for 800 Microsoft points.

I’d be interested if any of you have opinions on how much content is right for a downloadable game.