Debating F2P Monetization

One of the things holding back the evolution of F2P gaming in the West is the understandable discomfort that many Western designers feel about the “aggressive” monetization strategies employed by Asian game developers. For the purposes of this post, I’m defining “aggressive” as the sale of items that impact gameplay and/or speed up a player’s progress, in addition to other, less controversial premium features like aesthetic items and account personalization.

To many developers, the idea of designing a game to be anything other than “fun” is heretical (they may also fear the possibility of offending sensitive players.) Consequently, they either ignore the F2P business model or attempt to create games with relatively tame revenue-generating systems; for example, focusing on the sale of items with aesthetic benefit only, or roping off a portion of the game and hoping enough players voluntarily pay for access.

The irony of these fears should not be lost on anyone who was designing games thirty years ago. Classic arcade titles were explicitly designed to eat quarters over brief, regular intervals, and people of all ages still put up with it. By comparison, modern F2P games are positively generous to players!

All this is why, up until the social game explosion, we heard of so few financially-successful F2P games in the West. The social gaming companies get a lot of credit for leveraging Facebook and for rediscovering the market potential of asynchronous gameplay, but they deserve equally as much credit for realizing that people in the West are not culturally predisposed to hating any game with an aggressive monetization model. As with everything in life, context matters.

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On Vitamin D (notgames)

Several months ago, my wife Eve had a blood test and was subsequently informed by her physician that she was “very” deficient in vitamin D (also known as the “sunshine vitamin” because our bodies naturally generate it when exposed to solar UVB rays.) Since we live in Seattle, where it’s perpetually cloudy for approximately three-fourths of the year, Eve’s deficiency wasn’t too surprising. She started taking vitamin D supplements, and I started doing some research on vitamin D in general. I discovered three important things:

  • A very large percentage of 1st world residents are vitamin D deficient because we spend so much time indoors (and often use sunscreen when outdoors), and,
  • Vitamin D deficiency is linked to a disturbingly wide range of very serious diseases, including cancer, heart disease, autism, osteoporosis and multiple sclerosis, and,
  • Because the “daily recommended minimum” intake of vitamin D is 400 IU (the amount found in many multi-vitamins), many people mistakenly believe that a multi-vitamin is a sufficient source of vitamin D even if, like me, you go weeks at a time without significant sun exposure. Even people who get sun exposure before or after work may not be entirely OK; most UVB radiation penetrates the Earth’s atmosphere from approximately 10am to 3pm. The National Institute of Health recommends 5 to 30 minutes of sun exposure between those times at least twice a week, sans sunscreen, to people who wish to self-synthesize the recommended minimum amount of vitamin D.

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The Magic Test

“People are willing to pay for magic.”

That’s what my friend Brian replied when I told him that no one in Microsoft’s target audience would purchase an Xbox plus Kinect for a minimum price of $300 when they either A) own a Wii already, or, B) can purchase a Wii (with MotionPlus, Wii Sports and Wii Sports Resort) for just $200. Brian, as I frequently must admit, is a perceptive fellow.

People are indeed very willing to pay for magic. They have lined up around the block to pay $500 minimum for a slice of magical iGoodness from Apple. They lined up to watch Avatar in 3D (multiple times.) And they — that is, we — will continue to line up for the products and services that dazzle us, recession or no.

So, if you want to know who “won” E3, perhaps one way to figure that out is to apply a magic test to the products that were unveiled there.

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No More Articles of Interest

I’ve decided to stop posting “articles of interest” and start simply making better use of the content sharing features in Google Reader. GR converts my shared items into a feed, so you don’t need to be using GR to access my shared items; just subscribe to my GR feed as you would to anything else. That said, I highly recommend GR if you aren’t using it already (and apparently my readership agrees — over 70% of you are using GR. Talk about a monopoly!)

For those of you who visit this website regularly but don’t subscribe to the feed, I’ve added links to my GR shared items at the bottom of the left-hand navigation menu on the site.

Portrait of a Facebook Hangover

I’ve been casually tracking the daily active user numbers for the top 40 Facebook game developers for the past six weeks. Why the top 40? Because that’s the quantity displayed by Appdata.com on the first of 200 pages. Why daily active users? Because monthly active user numbers are widely considered to be an unreliable statistic for Facebook games, whereas DAU is, if not perfect, at least more directionally accurate.

I was mostly curious to learn how “hit makers” are faring on Facebook. (The 40th developer on the list has just 200k daily active users, so it’s safe to assume that all the heavy hitters are represented in the top 40 list.) Facebook’s total population has supposedly been growing by leaps and bounds over the past several months — it jumped from 350m “active” to 400m in the three months leading up to February 2010) so theoretically daily active users for the top 40 game developers should be growing as well, if for no other reason than there are more potential customers on the platform. However, it turns out the DAU count is down slightly since March.

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“Amazing Throwing”

For a trip down memory lane, check out this old TV commercial for Super Mario Bros 2:

What I find interesting about this commercial (aside from the cheesiness) is how pure it is. Unlike its predecessor, Super Mario Bros 2 was a game about defeating your enemies by throwing stuff at them as opposed to jumping on them. So Nintendo focused their commercial almost exclusively on that aspect of the game.

If the first Super Mario game was all about “amazing jumping” (as Miyamoto has supposedly said), then the sequel added and focused on “amazing throwing.” The developers got it. The marketers got it. And not surprisingly, the rest of us got it, too.

What’s the essence of your game? Can you say it in a few words? Can everyone else you’re working with say it in a few words?

If not, why not?

The Trials and Tribulations of Summer

For a couple weeks now, I’ve been getting calls from friends in the industry bemoaning their lack of inclusion in the upcoming Summer of Arcade promotion on XBLA. The tone of the calls has varied, but they’ve all shared one thing in common — frustration with Microsoft. As I’ve thought about it, I’ve come to the following conclusion: Summer of Arcade will have to change or, at very least, cease to be Microsoft’s ultimate promotion for the XBLA service.

First, a bit of history. Summer of Arcade was the brilliant brainchild of my good friend, Jeremy Wacksman. It was born of the realization that Microsoft desperately needed something that would draw positive attention to XBLA and make consumers, developers and the press take it seriously (bear in mind, this was during XBLA’s “inevitable misery” phase, when no one had anything good to say about the platform.) SoA served that purpose beautifully; it kicked off XBLA’s “triumphant return” and changed the tone of public conversation from “XBLA is full of crap” to “XBLA is the only place you can find games like Castle Crashers and Braid.” It also established the $15 price point on XBLA — an important and under-appreciated feat.

Dealing with rejection

Summer of Arcade still gives consumers and the press something positive to focus on. Unfortunately, SoA seems to be turning into a net negative for the developer/publisher community. Today, many companies will target a summer release in hopes of making it into SoA and may even choose to hold a finished game in their pockets for several months for that purpose. A couple months before SoA is scheduled to begin, ~five lucky development teams find out their games have been blessed; significantly more discover that they’ve been rejected.

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Lessons from Hollywood

For such a juicy situation, the online debate about Infinity Ward has been pretty dull. A summary, for those who haven’t been following along: 99.99% of people believe that Activision committed a grievous error and is clueless about the value of talent — the other 0.01% of people work for Activision. Either the wisdom of the crowds has revealed itself, or anyone who sympathizes with Activision has been unwilling to speak up for fear of being mocked.

It won’t surprise regular readers of this blog that I’m on the “pro talent” side of the debate. Making great games on a strict schedule is exceedingly hard, and anyone who can reliably manage a team to that end is probably worth their weight in gold. That said, there’s an interesting question to be asked here: if we take for granted that Jason & Vince were worth their weight in gold, is it possible that they were simply demanding “too much” compensation in their ongoing negotiations with Activision (i.e. all the gold, and more on top — leaving too little for Activision’s shareholders?) Or was Activision simply greedy and unappreciative?

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What to make of the iPhone?

Lots of people are talking about the iPhone announcements today. Most relevant to game developers: Apple is putting viral invites, matchmaking, achievements, and leaderboards into the OS; adding the ability to gift apps; introducing a slick in-app ad network called iAds; and (finally!) limited multi-tasking if you possess a 3GS or better. This is an impressive list of features, and as a consumer, I’m pretty excited about it.

As a developer, it doesn’t change my feelings about the platform much. It has been evolving into an ecosystem in which F2P is the most viable business model (as exemplified by Ngmoco) and it will continue to evolve in that direction. In fact, the introduction of iAds will likely accelerate the trend as developers race to compete with one another for a share of ad revenue. When Steve Jobs says of iAds: “This is us helping our developers make money so they can survive and keep the prices of their apps reasonable,” he really means “this will help maintain downward price pressure in the app store, which I love because cheap apps help sell iPhones!” (Btw, was anyone else struck by Jobs’ use of the word “survive?” I think that’s the closest he’ll ever come to admitting that life for developers is rough in the world o’Apple.) And if you’re still not convinced that F2P is the future of Applesville, let me remind you of now-common revelations that anywhere from 60% to 90% of app downloads are pirated.

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My GDC 2010 Slides Uploaded

For those who attended my lecture at GDC and would like to see the slides (which I have annotated for your convenience), please find them here.

If you missed the lecture but are a regular reader of this blog, fear not. Much of the content was based on articles that I have posted on this blog over the past year. The new content pertained primarily to iPad vs. Kindle and some neat new research/data on the Long Tail. Fun stuff!