Ben Cousins, whose business insight I immensely enjoy, granted an interview leading up to his talk at the Free to Play conference in London.  Following a great GDC presentation on the future of consoles, he spoke about platform holders’ resistance to the free to play model and the risks this creates considering the huge investments platforms require. The interview ended with the following line from Mr. Cousins, “I just think the platform holders’ billion dollar investments in new hardware is no longer sustainable.”

If given only a binary ‘yes/no’ choice, I would agree with Mr. Cousins, but I think you can’t count out the platforms completely.  To quote an engineer friend on why he decided to purchase an iPhone rather than an Android, “For better or worse, I came to like the idea of having a small guard dog around my phone at all times.” A closed platform has a gatekeeper and security staff of sorts, standards and controls that have a real effect on the quality for fans and opportunity for developers.

More to the point, I think the question can best be rephrased as is the problem with platforms structural or cultural? Are platforms simply not willing to consider innovation or is their ecosystem just unable to compete with the coming free to play tide?

I think it’s worth considering what consoles do right: they deliver a quality experience that isn’t the highest, but is high enough and saves players the many, many headaches and issues that can come with playing PC games.   Platforms also have done a pretty good job of developing exclusives. I’m not going to say that Halo alone is worth the purchase of an xbox, but I think if you asked me mid-many-a-warthog-jump I would quickly reply “hell yeah!”

There is a cost to the ‘flat’ social games market to be considered as well. The result of a market with instant, near-0 distribution, lower up front costs and ongoing revenue streams is already clear: a flooded market.  There are no lack of console games to be sure, but at least they are few enough that a statistically significant sample of reviewers can give gamers a decent idea of quality via Metacritic. (Not that it’s perfect, but I dare you to find a better relationship mediator between an entertainment business and critics.) 

What I worry about is the day when the market is so flooded that brute force spam like marketing, viral antics, and the occasional hard left differentiation are the only way to cut through the clutter of options. One of my favorite things about the games industry is how it's one of the few entertainment industries where sales are so tied to quality and critical success.  The high entry point of consoles, to quote an old Calvin and Hobbes line, like a cover charge, “keeps out the riff raff.”  

I have to say it is too bad CCP decided to cancel their planned ‘cover charge’ for their upcoming free to play First Person Shooter, Dust 514. I probably would have made the same decision, the market proof behind free to play is simply too strong to mess with it, but as an outsider it would have been nice to see if it worked.

Back of the envelop math can make one think well, free to play is awesome but it will never fund a game with the production values of Modern Warfare because the costs are simply too high. The better question is if that is a function of the market size or monetization rates, that is are there not enough people playing core free to play games or are the people playing not paying enough.  In either case, perhaps a studio with a strong brand like CCP could hurry that nexus along by charging a small fee to start playing. 

Of course, when it comes down to it I bet the conversion rates would be so low that it just wouldn’t work in real life, or at least not fast enough to pay for what was probably a hefty investment.  Still, be nice to see if it would have held up
-Posted by Dylan Tredrea on March 5th, 2012

The Future! With Explosions!
If you’re at GDC don’t forget to stop by Yetizen’s pitch competition on Wednesday at 2pm in Ryby Skye to see Coray Seifert unveil our upcoming Facebook action game!

In what could be a case study for independent development for the next few years or so, HourBlast Games will release “Dueling Blades” for Facebok, iOS and Android in March.  The title is built on the Unity3D game engine and the studio has plans for a Kickstarter campaign to raise funds to (supposedly) game through release. 

The Unity3D engine allows the team to rather easily port the Facebook game to iOS and Android later in the year and HourBlast Games says that kickstarter supporters will get some cool in-game benefits for supporting the project.

 The screen captures look interesting enough (who doesn’t want to beat each other with thick wooden sticks now and then?) and one can only hope this becomes another drop in what will soon become a torrent of core titles on Facebook.  

The fundraising method is particularly interesting though one has to wonder how long this type of development will be sustainable.  While Facebook games currently can be bootstrapped, as the technology races forward and the platform expands one can reasonable expect that the technological and creative resources required or a marketable game will only increase.

As a result, it’s a bit of an anxious irony for core gamers like ourselves who see so much promise in Facebook games.   It’s probably only a matter of time until the development costs creep above the point of bootstrapping, crowd funding or even angel investment (typically up to $1,000,000) and we’re back to huge teams and begging publishers for 8 figure budgets. 

In the meantime, we'll be keeping close tabs on Facebook games like Dueling Blades and seeing how they navigate the waters of this huge, but crowded market as an independent developer. 

Facebook games is certainly still very casual centric.  The market is only going to get bigger though and as a result bigger and better core games are sure to arrive.  Which leads me to wonder, what happens when you can start blowing stuff up and bleeding out on Facebook?

Blaming media for people being crazy or crappy is a time honored tradition.  It was only a few hundred years ago that legions of English people were being tortured and killed because they just want to translate the bible into English.  Our parent’s parents freaked out because of comic books.  Unfortunately even our own peers still propagate the ‘dangers’ of media usually via image problems or violent video games.  Apparently they miss the ironic of positing that ‘other people’ can’t handle the media without being under the influence to make bad or dangerous decisions while at the same time being influenced by something they learned of from the media, not peer reviewed studies.

The point of this post isn’t to rehash all that madness, just to try and predict when it will happen with Facebook games when core titles start arriving on the platform.   I’m willing to bet when it does happen, it will arrive with extra vitriol and vigor because of the ubiquity of the platform and the tendency for young kids to simply lie about their age in order to access the service.   I can see ‘family’ activis’s website now about the tens of millions of underage kids ‘only a click away from gore, violence and suggested sexual perversion.’ 

Facebook has already been taking plenty of hyperbolic heat for kids using the platform. Though Facebook’s rules say you have to be 13, apparently kids have figured out you don’t really have to tell the truth.  (Pay no mind to my decades long internet record of being over 18 almost as long as my father). 

The good news is that no matter what the public’s reaction to violent video games on Facebook the constitution remains a firewall for the far majority of the reactionary mob’s proposals.   It’s almost to the point where I would say that the game industry really doesn’t need to worry about it, because the courts will take care of it for us.  That’s not entirely true, but I’ll go as far as saying that any activist calling for legislation regulating video games is so far away from anything that is constitutional it can reasonably said the only reason they are doing so is self-promotion.

Facebook’s use by practically every kid in the US will give these activists a juicy new target though and I wonder if Facebook will, can or even maybe should embrace a few controls to prevent kids from playing violent video games.  I don’t really see how it would be possible though, because at the end of the day everything is just a fake over 18 profile away.

Either way I can’t wait.  Facebook is a promising platform and core games will take social games only towards more awesomeness.  Plus most of the activists are so self-promoting they are more entertaining than effective, so it makes for good Daily Show fodder.  Let’s just hope we don’t have to endure too many ‘villes’ before it happens. 

It’s so easy to hate on Zynga and their quest to seemingly take over the world, one slightly-consented-to-wall-post at a time.  They’re rich, they're successful, and like so many rich, successful companies they can’t help doing some things that are creatively annoying (really, another resource management game?) or just downright dickish (demanding back stock options from long time employees).  

(On the flip side, it’s also easy to hate on the haters, who are playing a Facebook game for FREE after all…)

The New York Times excellent blog “DealBook” has a great story about the culture at Zynga, driven by the MBA and former Wall Streeter at the top, Mark Pinkus,* that made me reflect on my own exotic business experience and how that’s helped me make business decisions in games and technology.

The Times post features some strong criticism of Mark for the hard-edged meritocracy that Zynga seems to have.  The article suggests the meritocracy that has helped drive Zynga’s leadership of the Facebook game market may also be its undoing. Mr. Pinkus seems to love his spreadsheets and it appears he applies them to his employees just as much as his products.

It’s easy to hate on that.  I’ll even go so far as to say a great deal of the ‘hate’ is well-grounded. But I have to let you in on a secret, I’m a (mostly) reformed Meritocrat so I totally understand where he is coming from.  As a manager, there is something beautifully liberating about just following the data. The data allows you to talk past much of the, well, bullshit and complaints that staff can and totally do bring up all the time.   

The first time I ran a company, instilling a meritocracy was a life (if not company) saver.  Of course,  it’s too easy to rely on the beauty of theory and miss what makes a company special, not just profitable.

The first company I ever ran was a small tourism outfit in Prague that had some success but was stagnate with no growth. The company was completely reliant on a few key partners to send nearly all our customers.  It was a party business and fit for a reality TV show, so the staff of the tired company were predictably drug addicted, lazy, illegally employed and completely bereft of incentive to do anything other than show up, more or less on time, every day to get trashed, high and/or naked with our customers.**

I was given responsibility for the company and the first thing I wanted to do was fire everyone.  I wanted the owner and myself to start over and build it up from scratch, right, as a pure sales organization.  The owner was hardly interested in putting in hours though (after all, that’s why paid me enough to leave technology for a year and sponsor my work visa). He also didn’t want to deal with the backlash from the staff and Prague tourism community.  I got to fire a few people but many had to stay.  I was just going to have to deal with them.

I had to find a way to make the old staff work with the new staff, and ensure the new guys didn’t end up like the old. The golden solution was a meritocracy.  Compared to other jobs in the Czech Republic we paid our staff very, very well and I decided that only people who earned it would be on our schedule.  I created a pretty simple system with the new team’s input and it worked like a charm. 

The business tripled in size in only a few months and lots of other great KPI’s grew, but let me focus on perhaps a different metric: what I called my ‘daily dose of bullshit.’  I’m not talking about random events that come up (we had those in spades), I mean the stuff that happens every day. The stuff that you can’t help but become convinced will never, ever go away no matter what you do.

1. Entitled idiots asking for work because they have a friend
   An ‘English teacher’ (90% of the time) friend of someone, would call me asking for ‘a couple shifts.’  No, they can’t or won’t promote. No, they aren’t interested in really doing any work, but yes, they will hang out and hand out a few beers if we pay them 4x the rate of Starbucks baristas. Of course, they’re a friend of someone, so if you treat them the way they should be treated, you’ll have yet more bullshit to deal with.
2. Crappy Staff asking for more shifts
   It was never the people who deserved it who asked.  It was always well-timed though, after their one good day in a month.  Often included was a diatribe about why the managers and/or bartenders at the places we work with love them so much, as if that had an impact on our bottom line.  Often, they would add something about some meeting (with no result or follow up of course) they had with some potential partner that would, of course, be a game changer. 
3. I’m too smart to work
   'I have 2 degrees from top-30 schools (or I’m a high school drop out with ‘real life’ experience). I have 15 letters of recommendation (some of which are real) dating from back when I was in high school.  I can’t sell anything or promote your business, but I have lots of great ideas and I even took an accounting course once.  You should hire me, but no of course I’m not going to stand in the square and hand out flyers like everyone else has to do, I’m too valuable for that kind of work.'

You know what solved all of that? No, not a baseball bat and a long, rusty metal staircase.  A meritocracy.  You sell, you get shifts. You don’t sell, you don’t get shifts. It wasn't that simple. I gave people plenty of room to have their ups and downs, but the message was clear: this is a team of people who get shit done.  

Now mind you, those calls and requests never stopped.  I was still peppered with the requests, if not downright demands, on a daily basis from people inside and outside the organization for work they didn’t deserve. Now though, instead of having to address all their petty bullshit, I would just point at the policy and say ‘participate like everyone else, or I’m sorry, I can’t take work away from people who have a clear record of growing our business.’

It was fair. It was simple. It was beautiful.  It required some balance in implementation (grilling people on having a bad day is just being a dick) and a slight fix to allow people to still work on commission if their numbers dropped too low for too long, but it totally worked, and the business still uses the same system to this day.   

The problem is: making a great Facebook Game isn’t promoting a club party.  Inspiring a kid who ran out of his parents’ money while backpacking around Europe is not the same as inspiring a designer or a programmer.  As tempting and alluring a meritocracy can be, there are severe limitations that become quite dangerous the more complex and creative your work gets. 

So Mr. Pinkus, I totally get it. But there’s more than just the data. If only it was that easy. *sigh*

*Mark gets some points for naming the company after his dog.  That’s pretty awesome.    

**Nothing wrong with that sometimes, but it’s the dose that makes the poison. 

Coray outlines the tenants for designers to create a great social game.  While some gamers are understandably unsatisfied with the current options in the Facebook game market, it's a new market and investors and customers alike are still figuring out their expectations.   Games without a clear and specific price point are fantastic opportunity for a variety of reasons, but the reasons why this model is attractive for investors and customers are naturally at heads with each other.  Investors want the highest return with the lowest risk and customers want the highest quality experience at the lowest cost.

Of course, as an independent developer one has to appreciate monetizing your games.  It’s important not to forget that for investors one of the draws of Facebook games, or games ‘on the cloud’ in general, is the fact that they solve the issue of piracy that was taking a huge cut from the bottom lines of major releases. 

As much as I truly believe Coray’s tenants are not only the foundation for a great experience for gamers- as well as a better path to sustainable value for investors, I can appreciate the driving forces behind the games that are more of a grind.  Developing games is a daunting business for everyone involved.  Companies large and small come and go because they are just so difficult to make and there is so much risk involved.  Facebook games are relatively cheap wagers at huge, ongoing, income streams. The economics just lends itself to printing as many products as possible, throwing them into the market laced with heavy, proven monetization mechanics and seeing what sticks.  

In some ways it’s akin to learning a few jokes and buying 1 decent outfit, then going out and just hitting on every girl you see every waking hour.  It may not be classy, but if it was a huge bar with 750 million people in it- eventually you would get a ton of results.  

Like most things in life, market opportunities and challenges often stem from the same well.  The social market is 'flat' and easy to enter creating a hyper competitive atmosphere where the safest best is creating and monetizing viral channels, and hard. The key to success isn’t merely reaching the market, but reaching a critical mass of initial players.

It may seem quaint, but time was half the challenge was just getting your product to market. The system was inefficient and one could argue, unfair, but the fiefdoms had a way of handling quality: a gentleman's agreement. When John Ford wanted to make what turned out to be the masterpiece, The Quiet Man he had to go to a so called b-studio, Republic Pictures to get the passion project funded. The deal came at a price of course, the studio agreed only under the terms that Ford also made the more mainstream, though also quit good in its own right, Rio Grande. 

In a closed off market, you can work the major and minor players who decide who can go to market. Facebook is as 'flat' as it gets though, so you have to either dominate or cut through the clutter.  So far this has mostly happened by aggressive marketing driven by aggressive monetization.

Thankfully, this is the video game industry. And I'll stack our crap to gold ratio up against any other entertainment industry any day. Investment is pouring into Facebook games and the experiences are only going to get better. CLE is certainly betting on it!

-Dylan Tredrea, COO

In this recent post  on gamasutra, I try to summarize a way forward for Facebook game designers based the core tenants of what a great Facebook game should be.  Facebook games are clearly going to be a huge market for a good while, but monetizing free games can be a tough balance for developers with anxious investors.  I think many fans would agree some titles grind gamers for their Facebook coin a tad too much.

This post outlines 4 steps I think designers can take to deliver a great gaming experience while still paying the bills.  The Facebook game market is still young in ways and as technology races forward higher quality games are bound to take the platform to the next level. 

-Coray Seifert, CEO