Splitting the iPhone vs DS argument in two

There have been a number of posts about Nintendo vs Apple, the 3DS vs the iPhone, and "99c games vs $40 games". The summary of these posts revolves around two different issues. They get muddled together, and as a result, cloud the argument. This post is an attempt to distinctly break apart the two arguments, such that we might look at each cogently.

Argument A: "Will Apple's 99 cent games destroy the market for Nintendo's $40 games?"

This is indeed a good question, and one to which the answer seems obvious.

On the 'Yes' side, one have only to look at Apple's recent numbers, the excitement around iPhone, and the challenges some have had in trying to maintain traction around higher price points in the app store on that platform.

but...

On the 'No' side, there's an argument that a large development budget can give a deeper, larger, experience. There's also the fact that Nintendo has continued to have success with some titles on the DS. There's also another version of the No answer along the lines of "if you want Mario, he costs $40", in other words, Nintendo's IP is something to consider.

The answer is probably somewhere in between. Undoubtedly the bar will be raised for what people expect to get for more than $0.99, so it will be a challenging sell.

The second argument is distinctly different than the first though. So let us suspend belief for a second, and imagine a world in which all iPhone games cost $40 (or one in which all DS games cost $1 - your call, as long as argument A goes to equal footing)

Argument B goes as follows: "Will 'portable game console' join the list of devices who have been subsumed by the Smartphone?"

Once again, there are arguments for and against, but in my opinion, the arguments are more one-sided.

On the No side: Nintendo continues to innovate (dual screens, stylus, 3D-stereo screen, etc) to stay ahead of the capabilities of the phones (or at least different, if you want to take issue with 'ahead'). Also, there's value to the quality, curated experience a closed, vertical platform like a console provides. And once again, there's Nintendo's IP. Finally, while Nintendo doesn't appear to do this currently, as a closed platform they could choose to sell their hardware below cost as a path to customer acquisition. (Of course phone vendors do this, and there's nothing saying that the same could hold true for an iPod-touch-like device provided it was sufficiently tethered to an app store or iTunes like service.

On the other hand or 'Yes' side of the question, the evidence pointing to an eventual subsuming of the function-specific portable game console by the general-purpose Smartphone doesn't look good for the portables.

When looking at other function-specific devices competing with the general-purpose device, the pile of bodies is pretty high, and growing.

The first category to go was dedicated PDA's. Never more than niche to begin with, these devices begged for communication to begin with. It could be argued that this was less about phones integrating the functionality, and more about the devices lacking the requisite functionality to begin with.

One category of device people started talking about suffering from this phenomena was the GPS. (See here, here, or here's a graph of a couple top GPS vendors where you can see the precipitous drop - even beyond that of the market due to recession, in green - which lines up with Apple's 3GS launch).

GPS is still alive as an electronics category, but it seems clear that the device manufacturers are suffering here and running for high ground in the way of either added niche-valued functionality and automobile OEM sales. whether these run out of runway as well is TBD.

Another category of device with some compelling evidence is that of digital cameras. The following post discusses some data posted from the Flickr blog, about usage statistics for posted photos to the site, as marked by what camera type took them.

The first graph shows the increase in iPhone 3 and 4 uptake vs photog staples at the high end like the Canon... The SLRs hold their own, but the increase in iPhone usage is clear.

The chart further down the page shows the decrease in leading point-n-shoot camera usage in the same period. There's a pretty clear correlation here. This is a classic case of the "Christensen Effect" at work.

I don't know how this will play out. It certainly will be interesting to watch from the sidelines. Developers should be interested, certainly if they are thinking about targeting either platform.

In trying to game it out though, its worth distinguishing what I believe are these two key questions at play. When looking at both together, Nintendo certainly has their work cut out for them. I can speculate about what that might lead to... but that's the subject of another post.

GDC 2011 Trends & Sessions

This year’s GDC was my 18th and I returned from it… spent. Unfortunately I also returned with the dreaded “GDC Lurgy”, the annual disease that spreads when 19,000 sleep-deprived immune-suppressed game developers get together and finger the same touchscreens, and so was knocked out sick for two days this week, thus the late report.

Trends:

It was an interesting GDC this year for one to try to infer industry direction from “sniffing the air” (especially since the olfactory peripheral guys were back this year!). On the one hand, there was a loud and visible emergence/amplification of mobile (iPhone in particular) and social (being almost synonymous with Facebook – which is short-sighted). On the other hand, you had a significant majority of the show (exhibits, sessions, etc) continuing quietly and steadily down the big-budget AAA path. That said, here’s what I took away as trends, as judged by show impressions and conversations.

1. Developers have MANY choices of platforms to target

One takeaway was that given the sheer number of devices playing games today, developers have more choices than ever before in where to focus their game-making efforts. The sheer pace of change, combined with secrecy about numbers from owners of closed platforms as well as successful developers, along with the confusing and/or obfuscated data about new business models (analysts are also having trouble parsing/sizing some of them) means that the choices are daunting, and yet there ARE choices, versus a more limited landscape in the past.

2. Social growth begets social gaming cred

Last year there was a huge amount of interest in Facebook as a game platform, much of that interest perked up by the money that games like Farmville making eye-raising amounts of money. There was also some envy with that, with much of the established industry saying “these weren’t real games” etc. Over the past year, many industry vets have shown up in leadership roles at social games companies, acknowledging that perhaps there’s a real vehicle for game experiences here. To the rest of their nay-saying counterparts, the sentiment was best captured by the yearly “Rant” session, entitled social-gamers rant back. For a poignant, synopisis, view Brenda Brathwaite’s 5 minute rant here.

Note that one of the themes she touched on was an influx of two types of developers into the social gaming scene, the designers looking to explore the medium’s potential, and what she called the “strip miners”, those looking to exploit existing models for maximum revenue and profit. This was also touched on by Scott Jon Siegel’s rant, a transcript of which can be found here.

3. The Mobile gold-rush continues, but with some sobering of expectations

There was of course a ton of interest in mobile, led by interest in Apple for iPhone & iPad games, and with Android being the only other platform of note. Window Mobile 7 is mentioned as a possible credible 3rd, but that’s it. There is trepidation about Android, as the exciting growth and size of the installed base is tempered by a fragmented platform landscape and less lucrative marketplace. That said, people are developing for it more than sitting on the sidelines. Sentiment seems to be that people are marching ahead but testing their footing as they proceed.

4. AAA games get more ruthless

While there was much excitement about the new areas mentioned above, most established companies were clear about the size of these new markets and the fact that they pale in comparison to the established markets for AAA fare. For example, in Jobs keynote, he boasted of $2B paid out to developers in the almost 3 years since the appstore’s debut. In that same period, depending who’s estimates you listen to, the console business generated >$50B of SW revenue for that same time period (Never mind that the $2B is divided amonst 250,000 apps, giving a mean of maybe $4k/app/ and a median that is likely much, much lower. Aka, a brutal hit-curve fall-off).

However, given that console SW market is not expected to see any remarkable growth, this means that when the pond isn’t getting any larger, the fish start fighting one another for the food. The big fish get bigger, and the medium size fish starve. This means that the console title hit curve will become even steeper, as mega-blockbuster franchises focus on achieving numbers like those we’ve seen lately for CoD, Red Dead Redemption, and their ilk. As they manage their portfolios tightly, $50M titles will manage to get their many-multiple returns (e.g. Call of Duty’s latest incarnation is estimated to have taken in excess of $1B in retail sales). As these mega-blockbusters compete for share of mind and share of wallet, the place the money will come from is the “AA” titles. Those with significant budgets($10-$40M) but falling short in the awareness building, etc. If 2008-2010 saw the demise of the B title, we will start to see some of this same effect on AA titles, making the hit curve even steeper. (Note: here’s a good quote echoing that sentiment from Cliffy B).

5. Early prep for the next-generation of AAA games

Some folk were talking next-generation tech for the next generation of consoles, without being specific about when that might be. Epic Games had a theater presentation going with a demo of their next-generation tech, using a high end PC and triple-SLI high end discrete setup. I’ll leave the dissection of tech up to others (vid of demo here), but suffice it to say that it bolstered my confidence that the next generation of consoles WILL be able to deliver a visual experience that is demonstrably different than the current generation. Perhaps not the same degree of leap of, say, PS2->PS3, but still noticeably different. And as there is clearly a market for $50M+ titles, I’m confident there’s a market for next-gen consoles (and PCs). A rumor was circulating about a next-gen Nintendo console debuting at E3, but I’ve been unable to get any industry confirmation on this. Anyone know better? :-)

6. First warnings on Closed vs Open

Several sessions had industry veterans warning on the long term costs and risks of being subservient to closed platforms. Veteran Trip Hawkins had a ‘rant’ session on this, pointing to the browser as the path to salvation. An even more direct-to-the-point talk was one of my favorites of the conference, from Dan Cook of Spryfox, who’s talk was entitled “How to survive the inevitable enslavement of developers by Facebook”. (Dan promised to post his slides soon to his blog at: http://www.lostgarden.com/)

7. Indies are Hot

In a good way that is. The IGF (Independent Games Festival) was filled with a massive number of REALLY polished and innovative games. Many of these are falling into the category of what Chris Hecker called “AAA Indies”, or in other circles, “Perfect gems”. The idea being that rather than being an all-encompassing experience done on a shoestring budget, that they are games that take a single idea or game mechanic (the ‘gem’) and polish it to perfection.

On the plus side, everyone now considers indie fare as a must-have in their portfolio of titles for their platform, and so between that and the number of platforms, there is no shortage of ways that indies can get games to market. On the down side the level of polish expected means that by and large, indies are expected to develop multi-hundred-k titles on their own dime. Publishers and platform vendors alike are signing deals with these guys, but with mixed results, leading to the same risk aversion we see with AAA games. Budgets like they've normalized for console downloadables around a ceiling of $800k-$1M, and while titles like Spyparty and Limbo are likely sign-ons, titles like Dinner Date (my fave, and described as ‘You play as the subconsciousness of Julian L, waiting for his date to arrive. You listen in on his thoughts while tapping the table, looking at the clock and eventually reluctantly starting to eat...’ are far more risky to fund, but necessary for the medium of games to reach its potential.

8. The Last stand of the handhelds (or is it?)

Lots of talk about Sony and Nintendo’s bets on the NGP and 3DS respectively. While there was also theorizing about the console’s demise in the era of more multi-purpose platforms, there was a general sentiment that the place this battle will first come to a head is in handheld. It can be summarized as follows: “Can a dedicated-function device (3DS, NGP) built on a business model of $40 games, offer a sufficiently compelling experience to justify the cost over a general purpose device (iPod touch, iPhone) with $0.99 games”. To their credit, both Sony and Nintendo are taking this seriously and have very compelling offerings to bring to the table:

- Nintendo: 3D display, dual display, first to market with streaming 3D Netflix (trailers at first), exclusive deal with AT&T for 10,000 free wifi access spots in NA, amented reality games, and of course, a killer IP lineup including Mario and Zelda.

- Sony: High-end HW that should do a killer job on 3D tiles, playstation back-catalog content, a good IP catalog including Metal Gear, etc, also a focus on augmented reality, and a touchpad in back*.

(*Prediction: everyone is undercalling the touchpad on the back of the NGP. I predict this is going to prove to be the controller that finally cracks first-person shooters on handhelds. Every other attempt has sucked)

It certainly will be interesting to watch it play out. My personal hunch is that Nintendo is safe, despite a device inferior to the NGP, based mainly on their 1st party IP. Sony has a harder challenge. They’ll find a market, but I’m doubtful it’ll be large enough to keep the ecosystem aloft.

Favorite Sessions Attended

I managed to attend a dozen or so sessions. Here are my favorites:

I. Nintendo Keynote: Consisted of 3 sections, each of which was quite interesting:

Part 1: Nintendo background, growth of market, lessons learned

• Iwata gave an overview of his history at Nintendo and lessons learned. Among them that content is king (e.g. He gave the example of having programmed a technically superior game to his counterpart/rival Miyamoto, who’s game contained an Italian plumber named Mario – lesson learned)
• Nintendo has surveyed 5,000 users across all age groups/demos for the past 7 years. Probably an unparalleled insight into gamers. Great graphs showing gamings permeance into culture over time. Bottom line is that the population that isn’t gaming is shrinking and aging over time. Near future will be everyone(!), Google for any of the numerous liveblogs to see the charts.
• Industry quotes echoing some of the trends I mentioned above as to AAA games: e.g. "We’re all playing much bigger gambles, and that’s getting scary” – Mike Capps, Epic

Part 2: Reggie came out to do the infomercial section: 3DS: First to deliver streaming Stereo3D on Netflix (!), Record Stereo Video or take Stereo Pix, AT&T deal to provide 10,000 wifi hotspots for 3DS owners free of charge across US, at airports, malls, etc, Improved digital store, Mario & Zelda titles in the works <-- note how games was the LAST item discussed in the infomercial section.

Part 3: Iwata came back out, talked about Industry concerns. This was a two part thing: ( A) Large games mean increasing specialization; harder to develop talent that sees “whole picture”. Those that do are aging. (B) and this was uncharacteristic of Nintendo: A direct attack on Apple and to a lesser degree, Facebook. Short version goes like this: Closed systems have hundreds of titles, “big app sites” have many tens of thousands – not enough for everyone to make money. Those systems not designed FOR games specifically care more about harvesting the ecosystem than nurturing it. Nintendo cares about protecting value for devs, and value in games (i.e. 0.99c games will lead to low quality fare). It was definitely a defensive attack, but not without an element of truth

II. NG Moco’s Neil Young on why Japan is a leading indicator of the worldwide mobile market

This was a great session for 3 reasons: (1) Half of it was really a back story on how the startup got off the ground up until it’s acquisition, (2) Great insight on the future of mobile, (3) Neil is a great presenter and presented almost half of his talk while impersonating his VCs, one of whom he swears is a shoe-in for Michael Myers “Fat B**tard” character.

Interesting conclusions they reached before re-vectoring the company: Being a mobile games publisher was unsustainable. Back of envelope math: Would need to have 3 titles in top 10 – every day, all year, to be a $20M company – Almost impossible to do. Note that market bigger now, but regardless, decided this was the wrong path to being a multi-billion dollar company. Re-vectored around F2P games, and targeted an acquisition/partnership that would let them broaden the service across platforms and geographies.

Great quote: “In a world where there are more apps than appetite, customer relationship is the real valuable IP”

Hope he posts slides, there was some great info on growth of japanese mobile market as indicator of future.

III. Game Design Challenge: 3 designers face of in designing a game around a given, difficult-to-design-for theme. This year was “bigger than Jesus” a design challenge around designing a game that could serve as a religion. Entertaining, thought provoking. My favorite (and not the winner) was Jenova Chen (of That Game Company) who’s religion was centered on the propagation of ideas, and who designed a meta-game on top of the TED website. Cool concept, and I'm betting he'll get a TED invitation out of it!

IV. Epic Legal Battles: A panel of games-specializing lawyers and legal profs each gave a mini-presentation on areas of pending increased legal activity over the near future. I agree on all counts:

• Collision between Games and Gambling. To the degree that players can get any real-world value out of the game, or get anything of perceived value, you stray close to gambling laws that are deliberately vague. Ticking timebomb? [KP: Yet another reason that the industry needs to continue to lobby for games as art deserving of free speech protection and respect as an artform. Gaming’s esteem by the general populous will determine how it withstands coming under the eye of scrutiny, which it inevitably will]
• Antitrust: Finger pointed directly at Apple and Facebook, but this could apply to any closed platform. Good quote on the idea of filing suit against Apple “you could. It’s like lying down across barbed wire so your friends can then walk over your body”
• Destroying Worlds: When a game is a service, and you find it no longer is profitably, and you want to take it down, you violate a contract you have with the remaining players. Despite whether or not the fine print says you can do so or not, their hearts are in it, and they may want revenge.
• Privacy: We’ve only scratched the surface. The more people put online, the more they’ll care. Also, laws are coming up to speed with the issue and as new laws go into effect, games industry will need to deal with it. Example given of ‘cookie law’ going into effect in EU in May.

V. Social Game Developers Rant. The rant session is always one of the better ones of GDC. See trends II and VI in the trends section above for links to a couple of the better ones.

VI. Moriarty's 'An Apology to Roger Ebert': I’m not sure this was labeled the closing keynote, but it may as well have been. It was a brilliant speech about games, art, culture, and a provocative close to the conference that kicked off hundred email/twitter threads about its ideas. The full transcript is online here:

Recommended iPad apps?

I have it on good authority that Mr Claus may be depositing an iPad under the tree for me on Xmas morn.

When I get it, I have one day to get it set up before taking it on a ski trip for a few days. I'm hoping the blogosphere can save me some trial and error on a number of different app needs. So, chime in to the comments if you can help.

1. Best Feedreader? (Would like it to sync feeds between PC/iPad/iPhone, allow offline viewing, set refresh frequency, etc. I've used RSSBandit and others in the past. Currently using IE8 because I like the Outlook integration, but I'm guessing it's not an option on iPad)
2. Best eReader app? (Would like it to have top-notch typography, support for EPUB and other formats, bonus for PDF support, should be able to keep multiple bookmarks support for annotations and the like)
3. Best document-sync apps? (I'm thinking of apps to let me view and/or edit Word & Powerpoint files off my PC)
4. Best sketching/drawing app? (keeping in mind I'll have a stylus)
5. Best notetaking/sketching/brainstorming app? (e.g. Onenote equivalent)
6. Best GPS app?
7. Best Browser? (Is the stock one sufficient?)
8. Best Wikipedia client? (I use Wikiamo on iPhone - is there something better?)
9. Best magazines/news site apps?
10. Best cookbook-type apps?
11. Best Twitter client/aggregator? (Yes, my opt-out experiment is over and I'll become a Twit in the new year)
12. finally, recommendations on best stylus?

Thanks, y'all!

Game Dev Story: A Niche market is you!

Game Dev Story is a fun little iphone sim about running a games studio. I found a lot of developer friends talking about how enamored they are with it.

I found it ironic that I saw Facebook contacts raving about it the same day I saw an announcement that there are now 300,000 apps on the iTunes store.

At that point, iPhone devs constitute an interesting niche market, and selling them this game is kind of our industry's version of shovels-to-miners.

As an aside: Hey Apple! Pro-tip: When you have that number of apps, this is no longer a positive number for your marketing pitch. You are essentially telling devs the store is overcrowded, and your consumers that they may have trouble finding what they want. At this point "lots" will do as a tag line.

5 Reasons Apple could beat Facebook, and 5 Reasons They Won't

[In the interest of trying to do some better crystal ball gazing, I'm trying a new approach to posts where I try to put some rigor into both sides of an argument. I'll tag these as "TechWafflin"]

After Apple's announcement of Ping at their recent love-fest, a number of pundits were quick to claim a war was brewing where Jobs would take on Facebook. Others were equally quick to claim that this wasn't the case, or that if it was Apple would fail.

The most commonly cited reason for the pro-FB sentiment was "Facebook is too big to be beat" (due to critical mass, revenue, momentum, ecosystem, etc). It burns me when people take this position. Yes, Facebook has these advantages, but saying that FB can't be beat is ridiculous. How many times have we heard someone was too big to beat only to have them, well, be beat? AOL, Yahoo, Everquest, Myspace, IBM... people used to say this about General Motors, and years later they needed a taxpayer funded defibrillator.

Anyhow, the fatalist attitude aside, Facebook's momentum and entrenchment are indeed a factor. My previous thinking was that they'd be beat by an entrant quietly addressing a niche with a better product and growing up from under them.

However, the Apple entry got me thinking and I beleive they have a few factors that mean they in fact could take on Facebook and give them a run for their money. Here are five reasons I think that's the case.

5 Reasons Apple could beat Facebook

1. http://www.kimpallister.com/2009/09/its-complicated-or-beating-facebook.html: Apple has ~150M iTunes users and can piggyback a social network into that installed base with an iTunes update. Also, they could offer any number of incentives to connect with friends.
2. The relationship Apple has with those 150M people is already a trusted and trained relationship with a tie to content people care about (music, movies, games...). Another way to think about this is that the majority of those 150M people have asked Apple to keep their credit card numbers on file.
3. The iTunes economy may be bigger than the Facebook economy. Not sure about ad revenue on both side, but one way people should be looking at #1 above is asking ($150 iTunes users * Avg User Yearly iTunes Spend) > (500M FB users * Avg User Yearly FB Spend).
4. Apple has a warchest of $40B. Yes, FB has real revenue and it's estimated to be as high as $2B for 2010, but at the same time, Apple made in excess of that number every two weeks through the last quarter.
5. Apple has a better relationship and level of interest with the developer community. Neither platform has been perfect, but Apple's been improving their policies over time, where FB's recent gaffs seem to show developer satisfaction is pretty low on their list.

OK, now taking the other side...

Again, most people cite Facebook momentum. A factor, but not a given. Top most argument for me is that Apple seem to be doing fine screwing this up for themselves before FB need bother respond. Anyhow, here are five reasons Apple won't topple FB:

1. Ping is shop-centric instead of user-centric. Too much thinking around "how can people help other people BUY", not just "how can people connect and share".
2. Not considering FB's shortcomings: It seems Apple's being a bit lazy, and is launching Ping as nothing more than "its a SN, connected to iTunes". They don't have to look far to find a list of things they could actually do BETTER than FB. Better privacy policy, developer platform or policy, relationship control, or as I've talked about, tracking relationships as nouns rather than adjectives.
3. Arrogance. Just as FB's arrogance could be their downfall, Apple's arrogance could be their guarantee of failure. Saying things like "Privacy is easy", are a clear indicator that they either don't take it seriously or haven't thought about it. Allowing users to view, grok, control, and evolve the exposure of information and content over their entire network is a really hard problem that is not going to get easier.
4. Closed Ecosystem mentality (vs open). It's on their software, their devices and adding features as they see fit. As opposed to a liberal policy embracing 3rd party platform vendors to accelerate your platforms development.
5. Fragmented effort from Apple. To me it seems that simultaneously launching Ping while also launching Game Center is indicative of a fragmented strategy at best, or a complete lack of one at worst. Ideally (for them anyway) Apple would have a SN for their iTunes platform, and then all activity over your SN could be tapped by their music services, game services, etc. Instead we have two different systems?

Looking at the latter list, it doesn't bode well for Apple's attempt. Still Zuckerberg would do well to adopt Andy Grove's mantra, "Only the Paranoid Survive". Apple is a well-armed, credible contender that has bellied up to the bar - it's now just a question of whether it came in looking for a fight.

Thoughts on iPad, Kindle, and future eReaders

On a mail list I frequent, there were two separate discussions about latest offering out of Cupertino, the iPad.

One of these was about how we unwittingly mortgage our future when we favor closed systems over open ones, and the long-term implications this has for consumers as a whole. That's the subject of another post I'll do another time..

The other discussion thread was about the future of eReaders and eBooks. Since someone on that thread was asking and I'd meant to post on the subject for a while anyway, it seemed time to make some notes. I did so, but then let it sit again for a while. Then this past weekend, I found myself on a sailboat in the Sea of Cortez with Craig Mod, author of this fantastic post on Kindle's implications for an e-book future, and that inspired me to dust off the notes and get them into this post.

I should note at the outset of this hefty list of ideas that not all of them are mine. I stand on the shoulders of (blogging) giants. Craig's and a number of other good posts that stimulated ideas are listed at the end of this post.

Also, I should note that I don't own a Kindle or an iPad. I very much wanted a Kindle (I'm a display technology afficionado and it uses e-Ink!) but opted to hold out because after using a friends a few times, I was disappointed by how much more it *could* have been. In the case of the iPad, the same is true to a lesser degree - it's got the Apple magic - but I feel it still misses as an e-Reader.

So, here I present some ideas in the hope that I can contribute to the conversation and someone will build a better mousetrap (maybe better cheese for the mousetraps is a better metaphor?)

What purpose do books serve?

They serve as many different things to different people. They are containers for ideas: communicating them in a fashion that is both broadcast from author to community and one-to-one conversation between author and reader. They are social objects: Giving a book as a gift or loaning one to a friend says something about both parties and the relationship between them - and augments that relationship in a way - the book is both adjective and verb in that sense. They are part of one's identity: Think of the proudly displayed library many people have.

In this sense, the Kindle seems to have only thought about the book as 'idea container'. As Craig pointed out in his post, there's a whole topic of form vs formless content that isn't addressed well. But beyond this, Amazon and Apple and their ilk are treating the book like it's a thing to be consumed, but no attention is payed to the social aspect. What if I want to share the idea I learned with others, or disagree with it, or debate it? The Nook considered the idea of loaning/gifting books to friends and then did the best they can dealing with publisher licensing silliness, but even then they only thought of it in very limited context.

A clearer example can be found in comics. Scott McCloud said that much of the magic in comics happens in 'the gutter' - the space between the panels. People are excitedly talking about comics on iPad, but mostly about how they might improve (animate, annotate) what is displayed in the panels or the way the panels are displayed. Who's trying to re-think and improve the space between the panels?

How do we consume books?

The e-Ink solutions aimed squarely at the chief complaint about reading on screens - that it's harsh on the eyes. LCDs and CRTs (remember those?) emit light, and which has to contend/compete with whatever environmental lighting is being reflected off the display. the e-Ink solutions depend on using (reflecting) environmental light. Like the dead-tree versions, you can't read them in the dark. Conversely, they work great in direct sunlight where LCDs don't.

Still, this seems like the tip of the iceberg when it comes to making the electronic page as readable (or more readable) than paper. Is there an equivalent of ClearType? Can the rendering of fonts be done differently based on reader viewing angle? Could a camera determine your reading angle and do perspective correction on text so that it appears perpendicular regardless of reading angle (Anisotropic ClearType)? Can the reader use an accelerometer and/or camera to do image stabilization like video cameras do, for readers on a bus or train? Can the bezel have built-in lighting that shifts based on viewing angle (an intelligent booklight)? Maybe tracking with eye movement?

Also, I don't know the specifics of the e-Ink technology causing it, but the "XOR-ing" of the display on page refresh is just horrific. That has GOT to go. At the surface it looks like something solveable with software (and by throwing more memory & compute at the problem) - tracking the state of the framebuffer, comparing the existing one to the desired result, and only spinning the pixels you need to (is spinning the right term for eInk pixels?)

We also consume books differently based on location (at least sometimes). Can geo-location play a role here? If the device sees I'm in bed, default to the novel I was reading last night before falling asleep. And then use the camera to sense if I've fallen asleep and power the device down.

Books and Geolocation

I'd like to see books annotated (by author, editor or crowdsourcing) with geographic data relating to events of passages). Let me walk the streets of London or Paris and follow the paths of characters of favorit books. Conversely, when I'm in a location I find interesting, maybe let me inquire about what books have taken place there in whole or in part. My iphone or ipad should beep when I walk past a location and give me a bit of trivia related to books I've read, much as a friend would; "Hey, this is where that shootout took place in that murder mystery you finished last month".

Social Networks and eReaders

I'm not sure I can think of a form of media that cries out for social network integration more than print. People get very attached to books, and even at the most basic level make a fairly significant time commitment to them. And yet consuming books is usually a solitary act. The book club lets people share the experience, but by constraining when they consume the books and when they discuss them. Forums aren't good at connecting people through existing relationships and you need to find the forum rather than it finding you.

A few ideas of what I'd like to see here:

• Let me layer my some or all of my reading on top of *ALL* my existing social networks. I might want to share my sci-fi reading with everybody, my kids' books with my local PTA and also family, and my business reading with my linkedin group.
• Virtual book clubs are an obvious idea. One could imagine extending this to having discussion topics around particular passages - supported by annotations people make while reading (more on this later).
• Group together findings based on these networks and reading histories ("of the group of you that agreed with this passage, we find you evenly divided on whether you agree on this related work...")
• Let the author engage in conversations directly with the reader if they so choose. "What did you mean by this section here?", "This passage moved me!", etc.
• Let me select a ~100 character quote from a book and automatically tweet it to friends with the source and a shortened URL to the book itself.

Of course authors and readers engaging in conversation leads very quickly down two paths of discussion. First is just how "fixed" a book should be. The second is that of business models. More on these in a moment.

Finally, there's a whole other line of thinking we could explore if all social networks weren't fundamentally broken. I did a lengthy post on this a while back, but the short version is that a relationship is a noun not an adjective.

The living book

The idea of an ebook leads inevitably to a collision between the living nature of information on the Web, and our traditional idea that books are fixed expressions of ideas. There won't be one answer as to the question of what the right hybrid is between these two views. I would like to see though, a few things evolve out of it.

• Give the author the ability to dynamically update books - and provide the reader with the ability to know about that change. A hybrid of footnotes and edit history like you see on wikipedia. One could imagine examples where the original version might be a matter of preference (say a novel or poem) and examples where this history is itself informative (say views on String Theory in a physics text).
• Citations and references to papers could now be forward-looking, not only backward.
• There are whole classes of types of annotations that could be imagined. Imagine a progress-slider on an equation to show it's derivation as a step by step animation. Or a time-line slider for a murder mystery that would let me leap around the text. Or a social graph or family tree of all the characters in Neal Stephenson's Baroque Cycle, etc. Of course each of these things could be author-driven or crowd-sourced/authored by fans.
• Books could evolve to leverage web-based application platforms. Letting someone view a location in a book (say Normandy beach on D-day) and let the reader get a first person look at the landscape involved in the story.
• There's room for a whole meta-game around books, reading and an individual or social network's collectively library. Xbox Live acheivements for the librarian set. Better yet would be to have an open platform for building meta-games. Think of teachers making scavenger hunts through the texts of their students are assigned.

Business Models

This is where my biggest beef is with both the Kindle and the iPad. They are razor-n-blade models. Closed systems that insist that the use of the device comes with the use of THEIR store on THEIR terms.

This has a host of issues not the least of which is a lack of competitive pricing for consumers "buying" books. More important to me is that it comes at the cost of hindering (or at least, not encouraging) innovation in the areas of stores, books, business models and licensing terms.

Beyond that, there's a long-term cost to society of allowing these closed models to become the prevalent ones. They become codified in our laws as the norm (DMCA, ACTA, etc). But that's the subject of the other topic post I alluded to earlier.

I beleive there's a real opportunity here for someone to get into the device game while opening the platform to all comers commerce-wise. Google, perhaps? PC OEMs? Microsoft?

Whether closed or open though, I'd like to see flexibility offered to publishers and authors to experiment with different licensing schemes and business models. Cory Doctorow has ranted about this a number of times (1,2)

Discovery

Here again, both devices have made attempts at improving discovery. Amazon through their recommendation engine and Apple largely by following in Amazon's footsteps. This is something but it so little compared to what could be done here. Don't show me what other people bought - show me what they bought and LIKED. Don't show me what just ALL other people bought, but those that share similar sentiments regarding books we've both read.

DRM

In short, it's ass. I get why it's happened, but at least let authors/publishers opt out of it so that someone can show that maybe the sky won't fall. This isn't just about portability between readers and devices, though that's part of it. The fact that I can't cut and paste text is extremely frustrating.

I want the ability to share annotations with friends and a network at large, I want to highlight sections of text (not just the text, but it's context as well) and flick them off to google to flag for further learning/reading, or flick them off to a workspace where I'm working on a presentation.

In summary

It's clear that these devices offer benefits over the traditional book, despite having a long way to go to equalling the dead tree's readability. That's to be expected given that we've been working on 'version 1.0' for hundreds of years.

While they improve readability though, I hope they'll also start to work on improving the things a paper book CAN'T do.

Further reading

Here are a few posts I highly recommend reading (if pressed for time, choose them over this post):

• Books in the age of the iPad, Craig Mod, March 2010: A ton of thoughts on layout, typography, and purposes books serve. Among other things I thank him for crystalizing in my mind the idea of "Formless" vs "Definite" content, a concept I'd been thinking about but couldn't nail down the way he did. His follow-up piece is also must-read.
• Random Thoughts about the Kindle, Seth Godin, June 2008: First of his two posts riffing on what Kindle is and what it could be. Money quote: "Kindle does a fine job of being a book reader, and a horrible job of actually improving the act of reading a book"
• Reinventing the Kindle (part II), Seth Godin, February 2009: His second post on the subject, conceived mainly while wearing his marketing hat, with a sprinkle of 'how could social networks make this better'.
• In addition, it was Dave Edery who opened my eyes to thinking of the Kindle as a game platform, which of course it can and will be.
• Also, this presentation summarizing Portical's research project into the usage of books and ebooks had a few ah-ha's that make it worth reading.
• Additional fuel the the fire from Cory Doctorow's many posts on the Kindle and the iPad. Many of them related to the other topic I alluded to above, but some of which pertain to things I'd very much want in an eReader. (1,2)

Steve Jobs shows his REAL thoughts on iPhone development

I'm long overdue to write up a post on the iPhone, appstore and closed-vs-open platforms. This isn' t it.

In the meantime though, Dave wrote up some thoughts on the announcements from Apple recently, and *brilliantly* caught something Jobs said that most folks seem to have missed:

Jobs, in speaking of the addition to an advertising revenue model to the platform, said

“This is us helping our developers make money so they can survive and keep the prices of their apps reasonable,”

To which Dave asks:

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.

Bravo! What a catch. Quelle choix de verbe! "Survive" indeed!

What Amazon/Macmillan brawl means for games

Late last week, Amazon and book publisher Macmillan got in a scrap. Macmillan demanded higher prices for it's ebooks on Kindle, and Amazon responded by pulling all books (digital and posthumous tree varieties) from it's store.

BoingBoing has a post going with updates [in which the discuss the fact that Amazon caved eventually].

A more detailed post describing one view of the battle that is really at play, can be found on (awesome) author Charles Stross's blog, here.

In it, he describes what is going on is really a more significant chess game in which Amazon and Apple (and the publishers for that matter) are trying to re-define the supply chain as it shifts to digital, and hoping to capture a bigger share of the pie as that happens:

The agency model Apple proposed -- and that publishers like Macmillan enthusiastically endorse -- collapses the supply chain in a different direction, so it looks like: author -> publisher -> fixed-price distributor -> reader. In this model Amazon is shoved back into the box labelled 'fixed-price distributor' and get to take the retail cut only. Meanwhile: fewer supply chain links mean lower overheads and, ultimately, cheaper books without cutting into the authors or publishers profits.

Amazon are going to fight this one ruthlessly because if the publishers win, it destroys the profitability of their business and pushes prices down.

The way I see it, as I commented on Stross's blog, is that Amazon is trying to use their strengths to squeeze suppliers out of a greater share of margin, while Apple is instead going to give suppliers a decent margin to get them favorable terms which they can use to deliver better end user offerings. This in turn they can use to try and win market segment share.

It will be very interesting to see how this plays out over time now that there is (real) competition in the ebook space.

What's interesting for anyone in the games business is that the same issues and tactics come into play in games, and you can see how people's positions shift over time. [e.g. MS offered 70 points to developers when they were trying to build a platform (XBLA) and win MSS (vs other consoles) but over time as the business stabilized and it was clear they had a winning platform, we saw the temptation to put the squeeze to that 70 point handover.]

It'll be worth watching what happens in the ebook space (as well that of music, movies, etc), as the same sorts of battles are being fought across all of them. Developers and publishers will do well to watch whether there are mistakes in other spaces they can perhaps avoid. For example should they make move to ensure competition, even at the expense of a more lucrative deal in exchange for exclusivity?

It's not the size of your installed base, it's how you use it

This was an interesting graph up on Joystiq, contrasting the growth of installed base between platforms.

While interesting, it's not exactly intellectually honest. For one, the iphone saw a lot of hardware refresh with the same customers upgrading to the 3G/3GS,so some of those are repeat users. Yes, it's still units sold, but for purposes of installed-base discussion, this is relevant.

For another thing, if you are going to talk "consumer tech", then you need to look at other cell phones, DVD players, etc. If you are looking at game platforms, then include the gameboy, the Windows PC. etc. Not sure any of these numbers would beat that curve, but it's worth including (though this example shows that the GBA beat the Wii's growth curve in its first 10 quarters. hmm...). Finally, the attach rate and SW ARPU would also be apple to oranges.

Still, even with all these caveats, it's an interesting chart to consider.

'top grossing' appstore list challenges assumptions

The iphone appstore added a 'top grossing' filter to the 'top paid' and 'top free' lists (which were based on units only.

Some of the takeaways are going to challenge conventional wisdom, which is that (a) there's a $1-2 sweet spot where impulse buys propel you to riches, and (b) that originality and innovation will be rewarded.

Some things to note on the list:

• Only 5/25 are $1.99 or less, and only 1 of those is a game (Battlebears).
• 14/25 are games. Just over half, despite a huge glut of game titles in the appstore overall
• 5/25 are priced $29.99 to $99.99 (Utilities, GPS apps...)
• Brands rule: Of the 14 games, 10 are around recognizable IP (Madden, Scrabble, Uno, Tetris, Bejeweled, Sims, Need for Speed, Dexter, Monopoly, Civilization). More than ever, brand matters when you have limited time and space to influence purchase decision.
• Publishers rule: EA has 6 of the top grossing apps. Gameloft has 4.

They don't state if this is the current week only, or cumulative lifetime gross, though I beleive it's the former, or the list would be far more stagnant.

This approach isn't perfect. Why should an app's large gross revenue be an indication of whether I want it or not? And like any of the lists, it can be gamed (a publisher could, say, purchase a bulk number of applications to prop up their own numbers).

Still, it's another perspective, and thus interesting.

So, if you are a small indie developer, what do you do?

• Develop remarkable product. There's a lot of competition, and if you don't have something special, and you don't have a publisher's marketing budget, then nothing's going to help you.
• If you don't have a recognizable brand, then at least develop an intuitive name. (I'll post a presentation I did a couple years back at the Montreal Game Summit on this subject, but the challenge I discussed in that presentation was about the casual games space where the same limited shelf space, attention time, etc, exists: You have a fraction of a second to get someone to determine if your game is something they might like. "Magic Gem Collapse", "StuntBike", etc) Oh, and don't make the name one that is so long it gets cut off in the app store list! Looks like approx 24 characters is it. Unbeleivable how many people blow that one.
• Lobby Apple HARD for a Sundance Channel style indie games list. You want a store where you don't have to compete with EA. Then work with the dev community, press, and Apple to make it cool for people to buy games there. Both hard tasks, but the alternative is competing with EA, and last I checked, that was hard too :-)
• Build community on the web, use your community to market outside the appstore. Use the community to game the app store itself. Lots of people experimenting here, but the idea is to get escape velocity and get your app into orbit (aka on the prominent lists). One idea might be to offer a PC version for some amount of time before, offer a code for an extra level for people that buy the game, provided they buy it during the introductory week. Get them on a mail list for when launch is going to happen, and then when it does, get them to go buy, mail them invite codes they can mail friends to get a discount or free extra level or something.

It starts with building a great game, but now more than ever, that's only the beginning. In a limited shelf-space world (and don't kid yourself, Digital Distribution doesn't fix this, it only changes the rules a bit), marketing matters more than ever, especially for the little guys.

WTF laptop displays; and my reluctant bowing down to Steve Jobs

I mentioned a little while back that we bought Alisa a new laptop. Well, that was the first of three.

We first bought a Sony VIAO, which was a nice, sleek, $800 machine. However, the glossy screen was impossible to use in our house. Returned the laptop to Frys (on day one of our snowstorm a while back, but that's another story).

So we start shopping for laptops with non-glossy, matte finish screens. You can't find them. They pretty much all switched to the new glossy screen. The exceptions being the $2700 17" macbook pro, which offers it as a $50 add-on, and a number of the mini 10" things, neither of which met our needs.

Further complicating the problem is the non-standard terminology around this. Some refer to the glossy display as non-glare, but that's exactly the opposite depending on your lighting conditions. More on this in a minute.

So our second purchase was via the internet, and it was a Lenovo Ideapad, also around $800, but offering a non-glare screen. Surprise, it's a glossy one. Returned to manufacturer.

We finally settled on the out-going model Macbook Pro, which I got for $1700, cause hey, once you are spending that kind of money you might as well buy the loaded model. It's a *very* sexy machine, but still, it's like a $700 premium over the equivalent model PC. Is there no one that can do an effective copy of their design at a cheaper price? *sigh*

Anyhow, here's my take on the display thing:

• Glossy screens have a glass-like, smooth finish.
• Matte screens have a dull finish, like a piece of frosted glass.
• Matte screens are aweful in places with a high degree of very bright ambient light. The most obvious of which is outdoors, or any place where you are close to a lot of windows letting in the outdoor light from numerous directions (a single window 20' away could be considered a directional light). So, outdoors, coffee shops, etc.
• Glossy screens are great where you have high ambient light, OR, where you have a small number of directional lights (like a desk or ceiling light) that might cause a reflection but you can position the laptop accordingly.
• The problem with glossy screens is that many office environments, or houses such as mine, have a large number of ceiling lights. This makes it difficult to position the laptop in any way that doesn't end up with at least one or two very bright mirror-like reflections distracting you from your work. In these environments, a matte display is far better.

Anyhow. Think about where you are going to be using it before you buy it.

Not sure why the sudden industry shift to the smooth ones, but my hypothesis is that (a) they for some reason they are cheaper, (b) the show well at retail (where there are a large number of lights, but they tend to be really high up. Also you don't tend to work for an extended period at the machine at Best Buy), and (c) maybe more people are using their laptops at starbucks, outside, etc. :-)

In searching for the matte display, I found I'm not the only one to have the complaint. There are even some places that will "matte" (yay verbification!) your glossy display for a couple hundred bucks. The image below from the site I just referenced illustrates the point quite nicely.

 

The iPhone's killer app

Adam keeps giving me a hard time about my lack of iPhone. I honestly don't want one that bad. Not sure I'd trade it for my given phone even if free. It's a great web browsing device, but there are things I don't like about it as a phone.

Now, on the other hand, I saw this yesterday.

Full Throttle on the iPhone might be worth suffering with a phone I don't like! :-)

Ooma OOBE, and Apple packaging perversion

A few months back, Vlad and I attended an entrepeneur event in Seattle. Michael Arrington was one of the speakers. He mentioned having a give-away token for a free Ooma, which he'd give to the first person that approached him for it after the session. Vlad was that person, and since he couldn't use it for some reason, he gave it to me.

Ooma is a one-time-purchase device that gives you VOIP phone service over your broadband with no monthly charges, no long distance charges in US, a broadband voicemail box, etc. Your regular household phone(s) plug into it, and then you use the phone as you would normally.

You could view it as a hardware device purchase, or you could view it as a lifetime subscription option to phone service. Spend a few hundred now, no phone bill later (or forever).

I filled out some online forms, and a couple months later, after I'd forgotten all about it, a big honkin box arrived in the mail.

I still haven't hooked it up (for reasons I'll get into later), but I did want to talk about the packaging.

The gizmos (the Ooma, and an an auxilliary 'scout' device) each arrived in a very attractive, very HEAVY, glossy cardboard box.

This is what the devices look like.

Anyhow. The box is super thick, with a cover that is five sides of a cube and slides off of another five sided cube to reveal a felt-covered plastic 'holder' for the OOMA, which conceals the AC adapter, cables, etc. There's a also a large glossy manual and quick-start guide.

The thing this made me think of is just how much everyone has been influenced by the Apple out-of-box experience ('OOBE'). I've heard (sorry, have never purchased an Apple product), the Apple OOBE described in near-fetishist, near-religious, fashion by those that have bought their products. It's clear that others are aspiring to capture the same type of feeling.

Ooma's not the only culprit. I've purchased a couple Zune's and they are definitely mimicking the same thing. Xbox360 as well to a lesser degree.

It does make me wonder about a couple things:

• How soon before this backfires with the environmental movement? Others have learned a lesson here (Barbie was an example featured in Fast Company recently).
• What's the cost of the packaging, and could the savings be passed on to the consumer?
• Again, borrowing from teh Barbie example, could the packaging be practical? Why not sell Zune's or Ipod's packaged in a leather or rubber protective case - an accessory people often buy anyway?

Food for thought.

As for the actual device - I'll let you know how it goes after I actually plug it in. :-)

For those that are curious, here's a shot of the ports on the back.

The iPhone tipping point

OK, clearly my previous post was wrong and burning tablets have been popping out of bushes, as the hype behind the JesusPhone (aka the iPhone) seems to be justified. I have quite a number of friends that picked one up this weekend and the flurry of mail I've received is heavily laden with things like "sexy", "its like holding the future", "rules changing", "requiring pants-changing", etc.

I haven't looked too closely at the device (already seen a couple floating around the MS cafe this morning, before 8am even!) nor at the service & sign up. However, for all the stuff I read yesterday, one thing stood out:

Signup happens through Apple.

That is the single biggest thing about this entire launch. It fundamentally changes the rules of the game between device vendors and carriers - nay - between the tech industry (new guard) and the telco industry (old guard). Similarly to how iTunes, over time, changed the rules between the big music labels and the online services, only overnight, and more dramatically.

It took a pretty sexy device and a religious user base to get the telcos to sell their soul, but AT&T has done so. And after making a deal with the devil, I'm not sure there's any going back for them.

iPhone Odds and Oddities

Seems the blogosphere's abuzz with the imminent release of the iPhone. The hands-down coolest thing I've seen on this is that one of the internet betting sites has published odds for a bunch of iPhone release possibilities. A few examples:

Consumers are reported camping out waiting for an iPhone—3/1
Initial iPhones get recalled—30/1
iPhone sells at least 12 Million units in 2008—5/6
Apple’s stock jumps at least 10% in value in regards to the price on 6/30/07—1/2
Consumers pay at least three times the original price ($1,500) on ebay—2/1
The screen breaks/cracks like Apple’s first-generation nano (iPod)—150/1
There are mass reports of the battery life being less than the promised 8 hours—10/1
Someone is trampled while trying to get an iPhone—20/1
iPhone spontaneously combusts—150/1

Mass reports of battery life issues occur with EVERYTHING THAT HAS A BATTERY, so I'd give this one more like 1/10 :-)

No odds on Steve Jobs saying "BOOM!" during the release event.