Category: business

People keep mentioning the UK PC Gamer article on Valve, where they say they have 3 big surprises coming up in the next year or so which will really freak people out.

It amazes me how mediocre peoples guesses have been, as to what the surprises will be. Some suggested Left For Dead 3 or Half Life 3. That would surprise you? Really? You think that is radical thinking outside the box? c’mon.

Here are some things valve could do, that really are surprises.

1) They could convert steam to a subscription model. All current steam games free, to all subscribers. Subscription is $20 a month, a revenue split is worked out with the developers.

2) They could launch a TV or Movie based venture.  Maybe an online streamed TV station based on gaming. They aim to become the #1 global media source for games news.

3) They could strike a deal where steam is integrated into the service pack for windows 7. Steam becomes the new games explorer, installed on every windows PC.

If I was Gabe, I’d be considering all those options, and lots more. Decisions such as ‘what game to make next’ are pretty small fry in terms of the big strategic picture in which valve are now a big part. They took all their Half Life 1 money and spent it to make steam. I expect them to take all the steam money to do another big thing. I’d still like to be surprised though*

*although anything that reduces the open nature of the PC platform would not be a pleasant surprise, for small little indies like me.

It’s good to have big, long term, strategic goals. If positech ever makes £10 million, I’m going to build a BIG wind turbine somewhere.

I went to buy something online today, for about £90. I did a google search and found the cheapest one, and went to the shopping basket to buy…. and then hit a warning saying that the security certificate was issued by an unknown company.

I then stopped. The site didn’t look dodgy, it was still an https connection, it was a boat chandlery store (I was buying an ecofan), it wasn’t selling viagra or heroin. I suspect it was fine, and safe, and the certificate thingy just expired or somesuch.

In the end, I paid an extra £5, and bought it on ebay. I therefore can state, that in my mind, a warning-free buy page from a vendor I have already purchased from, is worth at least £5 to me. (or is it 5% of the purchase?)

We all make decisions like this a lot, and I find the process to be fascinating. I often catch myself making irrational purchasing decisions. Here’s a famous example of what people do:

You go to buy a TV for £200. Just before you hand over your money, someone tells you the same TV is £195 in a store thats a 2 minute drive away. Do you drive to the other store? Most people say no.

You go to buy a book for £6. Just before you hand over your money, someone tells you the book is only £1 in a store thats a 2 minute drive away. Do you drive to the other store? Most people say yes.

Which is bullshit. It’s either worth £5 to you to drive for 2 minutes or it isn’t. This makes no rational economic sense.

We are easily tricked into spending money on stuff that makes no sense. The phrase 90% OFF! will trigger a completely irrational number of sales. The phrase “90% OFF ONLY TODAY!” sells even more. Logically, we should not give a damn what the original price is, or what it will be tomorrow. We should just look at what the product is, and what it is worth to us. But almost all the time, we are manipulated into making irrational purchase decisions.

The worst, most emotional, most irrational purchasing decision I made, was to buy a high spec sony vaio metallic finish laptop which I’m typing this on. It is an overpriced, over-heating and over-specced luxury toy that cost me too much money. I bought it out of pure lust, totally irrationally, about 2 years ago. What’s the most irrational purchase you have made?

I used to publish games sales stats years ago, but haven’t for an age. I thought given its 3 years old, it might be interesting to look at the sales stats for Kudos: Rock Legend. KRL is a sim/management game based loosely around my experiences of being in a garage band. You choose members of a rock band through auditions, put together the songs, buy the equipment, book the gigs, and basically try and go from the garage to the stadium. It’s a 2D sim game I released in 2007, and I sold it both direct, and through some casual portals. The game was not a hit, but it wasn’t a disaster either.

The costs involved in the game were not huge, roughly $3,000, which is peanuts by game production standards, and it’s even pretty darned low by modern positech standards (GSB cost way way way more than that :D). Obviously, that doesn’t include my time, or marketing expenses, and the game took about 6 months fulltime in direct development, plus quite a bit of time post-release to promote and sell it.

Here are the sales stats: (click to enlarge)

The total income from the game is $51,174.43. That probably sounds pretty good. I’m sure peoples immediate response is “$50k for 6 months is $100k a year! But it is not so. Deduct the $3k, then deduct at least another $3k marketing/ads. Now deduct roughly 10% for payment processing and bandwidth. Now another 20% in corporate tax. That’s… less. Don’t forget the post-sales means it’s more than 6 months anyway.

But the good news is that long tail. Looky at the far right. The game continues to sell a few copies each month. If you have 10 games like that, then you are making a living (not an awesome one, but not a bread-and-water one either). KRL is not a whizz bang 3D game, so it doesn’t age quite as badly as most games will. I suspect in another years time it will still be earning 60-70% of what it does now.

KRL is not a huge ambitious mega-project like GSB. A single dedicated coder can do a game like that in a reasonable length of time. If you want to know what it’s like, try the demo.

And to anticipate some questions:

Yes, it is in retail in russia, I recall that making a few thousand dollars. It also made a few thousand on the casual game portals, although my cut is tiny.

The game is not on steam, they have only accepted one of my games (GSB). It is on sale through impulse, but doesn’t sell hugely there. I’d say how much, but their reporting is down right now :(

Have you seen this?

http://www.wired.com/threatlevel/2010/08/lineage11-addiction/

Craig Smallwood, the plaintiff, claims NCsoft of South Korea should pay unspecified monetary damages because of the addictive nature of the game. Smallwood claims to have played Lineage II for 20,000 hours between 2004 and 2009. Among other things, he alleges he would not have begun playing if he was aware “that he would become addicted to the game.

Now clearkly, the internet world is awash with people saying “what a dumbass, its not like they forced him to play!” and “thats like suing mcdonalds for being fat”. But it may not be…

Is he addicted? This is 10 hours a day for 5 years. That’s pretty heavy usage, when holding down a job too. That’s getting home at 6pm, and playing to 4AM every day 365 days a year (ok, more time available on weekends, but still…).you bet he is. But the big question is are NCSoft to blame? People talk in glowing terms about ‘addicting gameplay’ (grates teeth… we say ADDICTIVE), it would be a brave defence lawyer that tried to argue that making a game addictive was not a core element of MMO design. The entire business model relies on you coming back every month to pay again.

Ok, so that’s fair enough, making a product good enough to encourage replay is fine, hardly criminal. However there is something magical about an MMO that *may* mean that courts take this stuff seriously:

They know how addicted he is.

They know in exact detail that account X logs on 10 hours a day for 5 years**. If it’s a micro-payment MMO, then KNOW that one guy has spend >$50,0000 a year (or whatever). This is totally different to the store that sells alcohol to an alcoholic for cash, they don’t know how much he drinks.

I don’t think the case has merit, and I agree with a lot of the criticism of it, but in these days where companies show adverts to test-subjects inside MRI scanners, and people get better every year at crafting more elegant skinner-boxes dressed up as facebook games, I wouldn’t be at all surprised to see judges mandate that all MMO games need to have systems in place to prevent people getting this bad. The industry will complain it’s being held to a higher standard than alcohol or other addictive pruchases, btu I suspect the court system will argue that only the games industry has the technical capability to regulate against true addiction. Addiction isn’t a topic for mockery. I’ve known people addicted to heroin (scary stuff), I’ve known people who used to smoke now and then, casually, and clearly just didn’t have whatever gene makes nicotine addictive. I’ve drunk a hell of a lot in my youth, but bounced out of it before sliding into addiction, as various friends did. Something that you personally can take or leave is another persons crippling addiction, and we shouldn’t dismiss them as idiots because we don’t share the exact genetic makeup that gives us that same vulnerability.

It’s an interesting story to follow, in any case.

(don’t yell at me. I’m not saying that NCSoft are guilty, or the guy should win. I’m saying there are real issues here, and the industry needs to look at them sensibly)

**I know it could be a shared account, but it could still raise a flag. If its the same character being used, without logging in or out, it’s pretty safe to say the same person is behind the keyboard.