Book Review: Screw Business As Usual

I'm a big Richard Branson fan-boy, and really liked his first book, Losing My Virginity (which I highly recommend). Since then, I've given a few of his other books a try. I gave Screw Business as Usual a try this week. It was very quick to get through so I thought I'd post a short review.

The book is about the idea that capitalism can, in addition to pursuing the goal of making money, attempt to do good.

On the plus side, it covers a number of interesting cases, some of which are Virgin enterprises, others just ones Branson has come across. It's a wide enough variety to give some creative food for thought, but little is provided in the way of detail if someone wanted to do some analysis of real cost/benefit, or map to their business to see how it differs, etc. Still, they are inspirational stories.

Another negative is that a number of his examples consist of things akin to 'I saw a problem. I called up Nelson Mandela, Desmond Tutu and Bill Gates and we got together and decided to start a foundation'. Some have complained that this is name-dropping. I don't think that's the case, so much as it's just the circles he travels in. However, the few examples that are along these lines aren't really helpful for anyone looking to do good with their business.

In any case, it's a good read with some unique perspectives that some will get value from. Start with Losing My Virginity though, as I think it's a better read.

Screw Business as Usual

OK it's over, but was it really a "Revolution"?

Here is a Good article by Tadhg Kelly that many others have linked to this weekend. While it's good and nails a few of the key trends at play, there's a couple things in the article that don't sit well with me. I'm not sure I can do much better, but here are a few points to consider.

Tadhg points us to the recent goldrush(es) around Social and Mobile games, specifically naming 5 trends (social customer acquisition, a 'price crash', distribution at scale, game metrics focus, and lower development cost (for mobile and social), and then goes on to knock on why each of those is coming to an end.

While he's correct about all five, it's the way they are lumped together that makes me a bit uncomfortable. In some areas they are trends affecting different areas entirely, in some areas with overlap, but by casting them all as part of this single "revolution", it's somewhat misleading.

In saying Social Stopped Working, he's correct that easy, exploitive viral channels were closed, and that customer acquisition costs went up - but it's unfair to dismiss social-viral potentiality altogether. e.g. Its a bit unfair to say that Words With Friends winning over Lexulous is entirely due to customer acquisition spend. There are design elements involved that make WWF a game with higher potential of distribution (e.g. they were quicker to add push-notification of turns, and have an end-game mechanic that leads to active-games growth)

His points about cost-of-entry going up (in terms of cost of acquisition and the points he makes about production costs) are right on the money, and are typical of any maturing market. We saw this happen in PC Casual, XBLA, heck, I remember a time when people used to say "4 guys in a garage can do it relatively cheaply!" about PC first person shooters. There's nothing new here. However, when lumping together to social vs mobile categories - what I view as two separate gold rushes with overlapping but different timelines and trends - it confuses the discussion somewhat.

In any case. It's a good article. The trends are real and should be considered when thinking about how they'll effect your business. And in the end, any attempt we make to classify them as a single market, or single trend or a single 'revolution' are all just definitions we're artificially placing on these things anyway. I'm reminded of the Richard Feynman quote:

"...although we humans cut nature up in different ways, and we have different courses in different departments, such compartmentalization is really artificial, and we should take our intellectual pleasures where we find them."

So it is here that any distinction we make into different compartments is artificial - models for us to try and understand the changes afoot. We should take lessons where we can find them, be they pleasurable ones or otherwise.

Book Review: Business Model Generation

Business Model Generation is described as a tool to help imagine and craft new business models through use of  something called the "business model canvas", a framework for analyzing business models and considering "what if..." type questions around potential different models.

The book is very pretty. It seems cut from the same cloth as Slideology and others like it. Lots of pictures, pages with sparse text and varied typographical styles. This makes the book easy, even a pleasure, to proceed through, and the concepts easy to internalize.

Two complaints I have don't necessarily mean you should shy away from it, but take them into account. First, the book is too lightweight on, well, details around business models. It would be nice to see a few case studies where it at least went to business plan level. Its easy to imagine thousands of business models, but whether they'll fly or not, well, you need to put some numbers behind them. Secondly, where there are case studies, they are all after the fact. It would be nice if they picked examples of businesses they'd worked with so they had the before-after case, including how the process was used to dream up the new model, what worked, what didn't, etc.

These complaints aside, it's still an interesting book. I think it would be of most use as a framework for a group exercise. Say if you and a few collaborators are trying to do a brainstorm on new business models.

So, if with that in mind the book still sounds interesting, by all means pick it up. Just keep in mind that the detail work is left as an exercise to the reader.

 Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers

Revolution-era pragmatists

Recently when I reviewed "The Best in Technology Writing 2010", I mentioned that Clay Shirky's piece on the radical revolution/reformation of the newspaper industry, 'Thinking the Unthinkable' was one of my favorites.

I revisited it recently, and really liked the observation made in the following passage:

Revolutions create a curious inversion of perception. In ordinary times, people who do no more than describe the world around them are seen as pragmatists. While those who imagine fabulous alternative futures are viewed as radicals. The last couple of decades haven't been ordinary, however. Inside the papers, the pragmatists were the ones simply looking out the window and noticing that the real world increasingly resembled the unthinkable scenario. These people were treated as if they were barking mad. Meanwhile the people spinning visions of popular walled gardens and enthusiastic micropayment adoption, visions unsupported by reality, were regarded not as charlatans, but saviors.

When reality is labeled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en masse. This shunting aside of the realists in favor of the fabulists has different effects on different industries at different times. One of the effects on the newspapers is that many of their most passionate defenders are unable, even now, to plan for a world in which the industry they knew is visibly going away.

He is writing about newspapers, but the above passage could be speaking about any large incumbent (or group thereof) in any industry undergoing radical change. I've seen it at Intel and Microsoft dozens of times, and I confess to having played the role of accuser and accused at different times.

Dan Cook's GDC 2011 Platform Power Session

As promised, Daniel Cook (who is beyond smart, and who's blog you should lap up every drop of) posted his GDC slides and speaker notes.

It's a REALLY good presentation. Talks about the issues with closed "walled garden" platforms in many ways that I've discussed here before, but Daniel formalizes the rules and stages in a fantastic way. Must read.

Here they are:

Gdc 2011 game of platform power

View more documents from Daniel Cook

Book Review: the Master Switch

Tim Wu's The Master Switch: The Rise and Fall of Information Empires is one of my favorite books of the past several years. It is a deeply insightful and ultimately important work, and should be on everyone's reading list, especially those in any part of the computing, communications or entertainment industry.

More on why I feel so strongly about it in a second, but first, since a picture is worth a thousand words:

I can't think of a book I've dog-eared this much since I was in school. There were a ton of points I wanted to mark and reference in future talks or articles.

In The Master Switch, Wu takes a look at the history of the telephone, film, radio, broadcast television, and cable television industries, to show how all of them exemplify The Cycle. The Cycle being that between an open period following the invention of a new information medium, and the closed period that follows as a few economic giants gain control over that medium. His presentation of these histories is as entertaining as it is educational, and I found myself glued to the page.

This is not strictly a historical text though. All of these case histories serve both to define the rules by which the cycle occurs, and also to warn of its costs to societies, and to innovation.

He then goes on to look at the last great information empire battle: The battle for the Internet. As Wu puts asks it, "Which is mightier: the radicalism of the Internet, or the inevitability of The Cycle?"

Those of us raised in recent times, and on the openness of the Internet and in the era of Google, Microsoft and Amazon, may take it for granted that the open horizontal platforms inevitably win. However, as Wu shows in the cycle, the vertically integrated conglomerates and the owners of infrastructure are remarkably resilient in their ability to tame those that would rock their boat. Also, he shows us that often enough, those that free prisoners from one market are soon tempted to forge chains of their own. Apple of course being a great example here.

If anything, the first line of defense this book offers us is education. An ability to recognize the elements of the cycle at work should be important for all of us. Secondly, Wu offers a prescription for a "constitutional solution". This is meant not in the sense that he'd have us modify the US constitution, but rather that a balance of powers could be struck between members, with sufficient but not over-reaching regulation from bodies such as the DOJ and FCC.

If there's one downside to the book - and it's a small one in an otherwise masterful work - its that the work is extremely US-centric. Some reference is made to Europe, and there is the occasional mention of PRC, but that's it. I would have thought it worth a lengthy discussion about how, for example, the entertainment industries are using international copyright treaties to entrench their favorite policies in foreign countries' laws, and then in turn to use that as precedent to influence US law.

This minor complaint aside, this is a must read work for our day and age.

EA Buys Playfish

From Techcrunch today:

Electronic Arts closed it’s anticipated acquisition of social gaming startup Playfish for $275 million in cash. An additional $25 million in stock will be set aside for retaining the top talent at the startup, and another $100 million in earnouts are part of the deal as well if the business hits certain milestones. So the total value of the deal could amount to as much as $400 million when all is said and done.

Wow. $400M is a lot of money. Social games are clearly the hot ticket right now, so it makes sense for EA to jump in, but one has to wonder if that's money well spent.

The stock & earnout will retain the people for some time, which is I'm sure a big part of why they acquired the company.

Still, the titles are cheaper to develop, and there doesn't (as of yet) seem to be the same IP loyalty that there is in hardcore games (are there Farmville fanboys out there dissing Mafia Wars?).

Time will tell if it was a good call, but it certain does seem rash, especially with all of the kerfuffle around questionable sources of social game revenues. (Interesting meta-level piece on the same issue here)

Protesting Pachter's iPod Publisher Plea

Michael Pachter is normally a pretty rational guy as far as analysts go. However, I found his quotes in this piece on GamesIndustry.Biz to be strangely off the mark.

In the piece, Pachter claims that publishers are at risk of spoiling their own party, so to speak, by publishing games on iPhone and iPod Touch at prices lower than those they command on other platforms. He states,

"Putting well established franchises such as Madden on the iPod Touch for USD 10 cheapens their value, he explained. "Whether it's the same experience or not, and it's not, why would I ever spend USD 60 for Madden if I can get it for USD 10 on my iPod Touch?"

He goes on to state that this contributes to the risk of the iPod Touch displacing the DS (and one would assume PSP as well),

"It's a serious threat to pricing. And once people start to look at this as a substitute for the DS for smaller kids, for 12 and unders, then you're going to train a whole generation of 12 and unders that this is a perfectly acceptable gaming experience at that low price point."

I believe his line of thinking here is seriously flawed. I beleive this for three reasons:

1. Different platforms merit different pricing. I'm surprised at the first quote. Madden on PSP today retails for under $40, vs $60 on PS3 or 360. By his line of thinking, why would anyone buy the $60 version? The reasons are that the experiences *are* different, the consumer may own a particular platform and not be swayed to another for an individual title, and the economics of each platform is different (dev cost, distribution costs, etc). To take it to the extreme, There's a version of Prince of Persia on cell phones that doesn't go far in displacing the $60 console version, despite selling only for a couple dollars.
2. Meritocracy in the market. Pachter seems to claim that kids playing on an iPod touch won't 'move up' to other platforms as the previous generation did from GBA to DS/PSP/Home consoles. First, I'm not sure this platform graduation is anything but myth. If true though, the reason the gamers would 'move up' is because the next platform would offer a higher quality experience and or different content to suit their changing tastes. If other handhelds, or home consoles for that matter, can't offer a superior experience to the Ipod Touch, then they will fail - and should fail. On the other hand, if they do offer a superior experience, then they should be able to charge for it. If Nintendo or Sony can't compete on their own merits, it's not up to EA to prop them up - and if they do, then they should be compensated in a way that lets them lower the price of titles to better compete.
3. No man, nor publisher, is an island. The Appstore, while not an open platform*, is certainly more open than the controlled, curated, catalog of titles available for handhelds. What that leads to is the tens of thousands of apps that we've seen show up on it, and I'm not sure that any publisher, even EA, refusing to publish on it is going to make any difference whatsoever. [I suppose that a cartel of publishers could agree in unison to boycott the platform, hoping that absence of ANY big-name content would poison consumer interest in the device. This has happened in the past with things like music labels boycotting Napster, or (IIRC) movie studios with betamax - however, its legality is questionable, the games publishers aren't organized in such a fashion, and there's enough of an indie community that I don't think this would work anyway]. In any case, the publishers seem to be faring fine while still charging a premium for their IP (see the top grossing list)

I guess what has me so bent out of shape is that it sounds so much like the death knells of the music industry. "$0.99 downloads will kill us all! What will become of our glorious CDs?"

People kept making music. People are going to keep making games. Whether to adapt to change is up to you, but don't expect the market not to change because you don't like the way it's changing.

Make excuses or make money, your call.

Four Pointers on the Future of Games

I read a number of posts over the past week or two that opened my eyes. Here they are:

1. Dan Cook's 'Flash Love Letter' series of posts (two so far: one, two. With more coming soon) on Flash games, the opportunity for premium flash games, how to monetize them, existing (flawed) feedback systems when distributing through portals, etc. His blog has always been gold, but this series of posts shows that he understands this space better than almost anyone who's writing about it. Much of it applies to all digital distribution and not just Flash games.
2. Raph's liveblog of the AGDC panel on monetizing online games: Free-to-play biz model experts discuss successes and stats around different tweaks on the biz model and how it's evolving. I remember when I first worked in casual games, being surprised about how scientific (in the sense of hypothesize-->test-->measure-->analyze results) the business was compared to traditional big-budget retail games. This group takes it up a notch. A must-read.
3. Alice's post on Smokescreen. Smokescreen is an online game that aims to educate teens about issues involved with their online activities, like identity, privacy, security, etc. By all means go play it - at least see the first mission through. It will challenge both what you think is possible in an 'educational' game, and in the quality of production possible in a publicly-commissioned game. On the latter note, I'm not sure what the budget was here, but its clearly NOT your $50k flash game. It's polished, rich, and deep. It doesn't take much to extrapolate a few years out and think about what it means when your games have to compete with free-to-play, $10M+ budget titles funded by your taxes.
4. This GamesIndustry.biz post on Bobby Kotick's comments about 'untethered' Guitar Hero. Kotick has done his share of talking out of his rear, but this is not one of those cases. The idea of a stand-alone SKU of guitar hero, connected to a dedicated service, is not as ludicrous as you might first think. Music games are a phenomenon and there are still a lot of households without consoles. If some of the people who shelled out $250 for a Wii did so to buy 'the Wii sports machine', then I don't see why this wouldn't hold for people that want GH or Rockband but don't own one of the big 3 consoles. And if this is a route for publishers to connect directly to their customers without console holder as middleman? Hmm..

As I said above, these are four must-read posts. A lot of hints as to where we'll be going over the next decade are to be found in there.

'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.

Kudos to the DLF!

OK, imagine you work at a big company. Like any big company, there's a push to make the quarter's numbers, to grow the customer base, to retain existing customers, to increase market segment share, etc.

Now imagine you want to propose to your management chain that you want to work on something that won't bring in revenue, will require effort, will make it easier for customers to defect to competitor's services and products, and that you'd like to do this across the entire range of the company's products and services. How do you think that'd go over? Like a fart in space suit, that's how! Right?

Well, a team of Google engineers labelling themselves the Data Liberation Front (a play on the Life of Brian skit) did exactly that, got it approved, and in doing so, proved that Google's still got some don't-be-evil juice left in it after all. From their announcement:

Many web services make it difficult to leave their services - you have to pay them for exporting your data, or jump through all sorts of technical hoops -- for example, exporting your photos one by one, versus all at once. We believe that users - not products - own their data, and should be able to quickly and easily take that data out of any product without a hassle. We'd rather have loyal users who use Google products because they're innovative - not because they lock users in. You can think of this as a long-term strategy to retain loyal users, rather than the short-term strategy of making it hard for people to leave.

We've already liberated over half of all Google products, from our popular blogging platform Blogger, to our email service Gmail, and Google developer tools including App Engine. In the upcoming months, we also plan to liberate Google Sites and Google Docs (batch-export).

Awesome. Way to go DLF and way to go Google.

Arcades

Took the kids to a 'fun center' arcade style place this weekend.

It's been some time since I set foot in an arcade.

I was not surprised to see that many of the titles were several years old and that turnover isn't as rapid as it used to be.

I was surprised (though I guess I shouldn't have been) to see how many titles were licensed/ported versions of PC and console games from the big publishers. EA's Nascar, Ubisoft's Blazing Angels, etc.

I'd be curious to know how much revenue the publishers make from the arcade ports/licensing. What used to be the main event for video games is an afterthought, I'd guess.

PAX'09 thoughts

I did a whirlwind trip up to PAX yesterday, leaving at 5:30 for the 3hr drive up to seattle, and arriving home at around 11:30. Six hours in the car wore me out, but well worth it for what I compressed into the remaining time.

I hang my head in shame and say this was my first PAX. When I was living up in Seattle I had schedule conflicts that kept me from attending the past couple of them. Decided I'd make the effort this year and was glad I did.

Some quick thoughts on the event, with a few topics requiring lengthier posts later.

The event itself: Wow. PAX has grown up. I think the E3 Supernova helped them get escape velocity, and now even with E3 making a comeback, PAX remains a big deal. We'll wait to see attendance numbers, but it felt like a 10k+ attendee event.

If you haven't been, I'd describe it as follows: GDC is the nerdy kid you knew in high school. E3 was his Jock older brother who drove a Chevelle and got all the chicks and gave him wedgies. PAX was the middle brother who listened to GWAR, wore combat boots, played D&D and smoked weed while doing it, and who mom and dad didn't really mind skipping out on the family reunion. :-)

There are panels and other sessions at the event but they aren't the point of the event itself, which is really a mix of game/geek culture celebration, fan-fest, and game companies exhibiting their goods to the hardest of hardcore gamer fans. Oh, and there's a pretty big lanfest and some board gaming thrown it for good measure.

Talks: I only attended two talks and a keynote, but I'd say that the fact that these aren't the main focus of the conference, and the quality is indicative of that. Not that the ones I attended were bad, but the quality varied, showing that it was largely up to the individual moderating the panel. (Vs GDC which scrutinizes talks and speakers to quite a degree).

I attended a panel on 'game developer parents' that had a number of industry veterans who are also parents (and two of whom were former co-workers of mine), who were supposed to discuss issues around games and parenting. I'd say it was 10% that, and 90% anecdotes about their kids, which would be ok except that those were half sage advice and half boasting about their offspring. mildly disappointing.

I attended Ron Gilbert's keynote which was humorous and moving, but not mind-blowing or anything (like say, Will Wright's Siggraph keynote)

I attended a legal issues in games panel, with a variety of legal folk around the industry. Was suprised when they asked "how many people here are lawyers or law students?", and had like 40 people raise their hands! This panel was better run (but not excellently run) and covered a number of timely topics, with the panel offering opinions on each. A few of which were:

• The "Edge" trademark hullaballoo: Tom Buscaglia had to tread lightly around this one because of Langdell's IGDA involvement, etc. The short version of the opinion was that trademarks and copyrights have their place and people have a right to defend them. In this case, both parties have behaved very poorly from the outset and dug themselves into a hole.
• The project Entropia Banking license thing (my question to the panel on this one was what their impressions where, and whether they subscribed to the theory that eventually all MMOs are banks, and regulation is inevitable): At least one panelist agreed with the theory, and two expressed sentiment that the Entropia thing in particular was a good thing, shows games offering more, growing up, etc.
• SW Patents: The usual lawyer-speak about "ya better file 'em!", but Tom B had a good answer to an audience question/comment about SW patents being evil, etc. He made the point that (a) the patent portfolio isn't the problem nearly as much as poor scrutiny of claims at the USPTO, and (b) a patent portfolio is something that can serve as collateral to borrow against with banks, and that Harmonix in particular did so against their patent portfolio and used that cash to survive a tight spot before their big hit. i.e. While there are plenty of examples of patent trolls, this is a counter example of patents saving what otherwise would never have become Guitar Hero.
• First amendment/free speech vs regulating violent games, etc. Good precendents set now with universal defeat of these initiatives across more than a dozen states. Sign of games success and also their growth into a major media. "they join the club of art forms across history that have been feared and attacked in similar ways: movies, rock music, etc"

The show floor:

A mix of exhibitors from the major publishers (EA, Ubi, etc) and HW vendors (Sony, MS, Intel, Alienware) but with a disproportionately high number of indie studios meeting their fans and selling merch. (Twisted Pixel, Dofus, The Behemoth, many others).

Trends:

Cosplay: Wow there was a lot of it. Plenty of galleries online.

Indie Games: Lengthier post on this later, but there's both good and bad here. The "indie game" meme has caught up with publishers, and so they are nabbing up titles whereever they can. Good to see guys getting funded, but this results in muscle put behind these titles and ups the pressure for higher polish etc. As an example the quality of some of the showcase titles in the Xbox Indie games (formerly community games) was fantastic, but these are looking like multi-month, multi-person team titles, and it's not clear that these games can generate the numbers on that channel to justify the investment. Not picking on MS, this is a problem across the board about which I'll post a lengthier piece when I get some time.

Some photos in my next post.

"It's complicated" - or - Beating Facebook made easy

Occasionally, I'll see this on someone's Facebook profile and it always gives me a chuckle:

I find it ironic that FB gives this as an option to describe your 'relationship status', while they give no such distinction for relationships themselves, and relationships (aka 'friends') are the currency upon which FB is built. For that matter, this is true of all social networks.

Relationships are indeed complicated, and yet they aren't treated as such by these services.

I preface this post by saying that I have never worked for a social networking service, nor have I designed or built one, nor have I ever had source code access to one's inner guts.

Despite this, I have the intertube blogger bravado to state that (a) all of today's social network services are fundamentally broken, and (b) I know how to fix them. I'll also explain why I think this is going to come to a head over the coming year or two.

First, the problem. There are three components to it, two of which really just complicate the first primary issue.

First: Relationships are things, not properties of things.

I believe today's SNs are defined with connections between people being just that, connections. In database parlance, you have a table of properties describing an individual, one of which is a link to a table of 'friends', where this is a list of pointers/IDs of other individuals in the SN.

What that means is that the relationship itself is just a pointer connecting two people. But relationships are more complicated than that aren't they? As a hint, when we discuss relationships we often use nouns, not only adjectives. More on this in a minute.

Second: Not all relationships are created equal.

They certainly aren't all "friends". Of course, if all you've got is a pointer, then you've limited how much you can differentiate between relationships. At least LinkedIn uses the more generic and neutral "Connections". At least this is a term that comes with less baggage.

Third: Having this flaw in the initial design results in kludgy solutions to resulting problems that may cripple the SN.

Software design flaws are, like many things, easier to see in hindsight. In the case of database design, one clue is the amount of bandaids. We see this happening today with FB's kludgy filtering tools. I want this person to be part of this list or that list, etc.

The current 'lists' approach that FB is using is basically a kludge that lets you segregate 'friends' into a couple different groups (e.g. personal friends vs work friends). I'd imagine that each pointer now has an added field of 'type' and this is used to filter functionality ('what kind of friend is this? the kind that receives only this kind of spam but not that kind').

This will only work so long though, and the more people want to overload functionality (what if I want another type, or I have friends I want to be in both lists, etc), the more the bandaids will become cumbersome to handle and for users to manage.

The solution:

As I hinted above, I beleive there are some clues in the grammar used.

For starters, Treat relationships as nouns, which means they are entities and constitute another table in the database design of the social network.

Relationships have attributes. They have a history, a beginning and end, different properties describing what they do/don't entail, and those evolve over time. e.g. Bob and Susan went to school together but only met in their 4th year, became co-workers later, belong to the same church, etc. These are the 'adjectives' that describe the relationship. Relationships can also be assymetrical.

There are verbs too. Certain actions or activities that are part of a relationship.

I'd imagine there'd be a couple ways of implementing this. Tables for different relationship types, or a huge table sparsly populated at the outset. The choices of how to implement this will present tradeoffs between complexity, storage requirements, possibilities, etc.

At the end of the day, there will be some sweet spot in the tradeoffs that will provide the right mix of expanded functionality vs ease of use and storage/compute burden.

I'll also guess what the main pushback is going to be:

(1) The compute and storage requirements will explode! The answer to this one's easy. Tough! Both are getting cheaper, so pick the right entry point and run with it. (Remember when everyone thought Gmail was crazy for offering unlimited storage?)

(2) It will be difficult and cumbersome for people to manage: Agreed. One approach might be to pre-populate defaults people can override, or to start with a basic 'connection' and a peel-the-onion approach through both management over time and learning through history.

It may be complicated, but that doesn't mean people don't want to make sense of it.

There are three reasons why this is going to come to a head.

First the collision/connection of social networks is going to lead to a need for additional filtering/segregating, and this is going to result in a lot of bandaids for SNs that aren't built to handle this need. We've all read stories about someone's FB photos being seen by coworkers, etc. This is only going to get more complicated as people's FB feeds get seeded with their Xbox gameplay achievements or their WoW guild's political chat. The bandaids may snap.

Second, this connection of social networks is only entering its first phase, a phase where individual identities are linked (e.g. My Xbox Gamertag and my FB profile). I beleive this will enter a second stage where other entities in the SN may be shared, like the relationships themselves.

For example, today (or when the FB/Xbox integration ships anyway), I have to belong to both SNs and then tell them both that this gamertag is linked to that FB profile. However, what if I want to be friends with someone on FB when I don't have a FB account at all, but DO have an Xbox Live account? Not possible with the current bandaid solutions, but possible if relationships are tracked separately.

There's a third reason this is going to come to a head, one that arguably going to be an issue sooner than the above one. This is that people will desire more than a 1:1 mapping between identity and persona. Today, most SNs assume that your persona is your online representation of your identity. (In fact, one can argue that one reason FB stole a lot of thunder from MySpace is that it had a looser coupling between identity and persona but thats the subject of another post). However, on some MMOs, someone (one identity) may have multiple characters they play (personas).

The clash between identity and persona is going to messy on a number of fronts. In some contexts (FB, linkedin, paypal, etc) we look for identity to be real-world concrete. In others (say, playing a frilly kitten-girl in a korean MMO) someone may be looking for anonymity. Worlds collide, etc. All the more reason we provide people with tools to manage these things, rather than just labelling everyone 'friend'.

Anyhow, as these three reasons become real issues, there's an opportunity to offer a better type of SN, and beat Facebook at their own game, by being the 'next-gen social network'.

Claiming that there's an opportunity to stop the Facebook juggernaut seems like blasphemy, but people's loyalties are fickle on the Internet. The list defeated undefeatables (MySpace, Everquest, Friendster...) is long. FB is no more immune than any of them were, and the coming problems and opportunities as SNs collide may be the disruption that allows someone else to better serve people's needs.

I'd like everyone to just get along as much as the next guy, but the first step toward that might be in admitting that we're not all friends. It's more complicated than that.

Rock Band Network: Marketing Tool or Moneymaker?

This...

Attention Bands, Studios, and Labels:
Create. Play. Get Paid.
The Rock Band Network is Coming.

Coming Soon - Use our tools to author playable tracks. Upload and submit your tracks for review by the Rock Band Creators community. Approved tracks become available in the Rock Band Store and on the Xbox LIVE Marketplace*, and you get a cut of every purchase

Is just awesome.

It's interesting that they took the route of offering a cut of track purchases, when they could just as easily have claimed that tracks serve as a promotional tool for sales of the tracks on iTunes, etc, which they are.

Either way, its cool to see. It will be interesting to see how this evolves. In addition to laying out tracks, if music artists could add new character choreography, awards, avatar costumes, maybe involve fans in doing different RB track layouts and picking the best ones, etc.

It'll also be interesting if one of the 'doing RB tracks as money makers' and 'doing RB tracks as marketing tools for the music' intents becomes dominant.

Games & The New Negroponte Switch

Great presentation from Matt Jones, lead designer at Dopplr and principal at design firm Schulze & Webb. It's a mind-expanding look at the transition of services into things and things into services he calls The New Negroponte Switch. Great read.

View more PDF documents from schulzeandwebb.

And if you are wondering where the relevance to games comes in:

Xbox Live, OnLive: Products becoming services

Figureprints, (and one could argue Guitar Hero): Services becoming products.

And to his point about Thingfrastructure, and products and services that are resiliant and self sustaining, this is a challenge games are going through now. Games are increasingly being developed as services, but sold and marketed as products - as things.

When someone "buys" a downloadable game, do they always understand that they've bought *access* to it through a service, and that should that service go away, so might their game? For a parent buying a Webkinz stuffed animal with a coded tag, do they understand that they've bought a limited-time access to a service?

These are challenges we'll have to face going forward. The innovation is good, but its important that people aren't mislead along they way.

The most significant thing at E3 2009

Well, another E3 behind us, and not just any E3. This was E3 born again. Following on the heels of the Supernova E3 and Dwarf Star E3, this was, I guess, the Phoenix E3?

As this E3 fades, we’re left with the deluge of announcements and demos to digest. It’s an interesting thought exercise to consider which are the more significant ones. Which might have the biggest long term impact, might tip the scales in the console wars, open the market to new audiences and revenue streams, etc.

There were lots of game announcements, lots of them exciting, but none so *different* as to warrant the label of ‘game changer’.

There were no wild-card disruptive entrants like we saw at GDC with OnLive’s announcement.

There were of course the keynotes from Microsoft, Nintendo, and Sony.

Sony’s got a new handheld to continue to duke it out with Nintendo on that front, and Nintendo continues to add titles and some new capabilities to their handheld. Nothing really groundbreaking on that front.

Judging from the press, most people believe that the biggest news out of E3 is that MS and Sony have played their cards on the motion control front. Microsoft with some 3D camera tech to compete with Nintendo’s Wiimote, and Sony has a wand that kind of straddles both the camera and wand camps. That is big news to be sure, but not terribly surprising.

The biggest question on the motion controller front will be what it means for developers and publishers. Big budget productions necessitate cross-platform development, or at least favor it. Certainly between PS3 and Xbox360 (and PC) we see a lot of cross-platform publishing. It will be interesting to see how and if titles can map to the very different motion controls between those platforms and Nintendo’s, and whether any of them get short-changed as a result of a lowest common denominator approach.

But I don’t think that’s the most significant of the E3 announcements. I’m going to go out on a limb and say that the most significant item out of E3 was this:

The announcement of Facebook and Twitter support within Xbox Live (Nintendo had a similar announcement around the DS, so they get some credit too).

Why do I believe this is such a big deal? Bear with me…

I’d posit that the fundamental promise to customers that the previous generation of consoles offered was “High quality games that Just Work”. High quality 3D games like those that were available on PC, with a console’s level of quality control and usability.

I’d also claim that for the current generation of console, at least for the 360, the promise grew to “High quality games that just work *together* within a social network”. Build your network of friends who also own 360s, and get a level of experience works *between* titles. Sony and Nintendo have both played their own version of catch-up on this front, to a point.

As 360’s installed base and capabilities have grown, so have the Network Effects. The utility of a network grows with its users (a function in this case of the installed base and the amount of time users spend on their 360s which is in turn a function of capabilities). Again, similar to what was available on PC years earlier (if you were using IM, Gamespy, etc), but with console level quality control and usability.

Fast forward to today, and one the most significant thing we see happening on the PC is with the “walled gardens” of social networks – each of which have become platforms for software development. These social networks have realized that the same network effects that grow with customer base can hold true for their platforms and their services as well. The value of a network increases if it becomes permeable to other networks.

Initially this manifests itself as the users needing to belong to both social networks, and allowing them to verify the connection between their two identies. E.g. This is my Facebook profile, this is my Flickr account and yes, you may speak to each other so that I might let my FB friends see my Flickr pics. Flickr becomes more valuable to me, and Facebook becomes more valuable to me and my friends.

But this first step is still kludgy, requiring an identity on both social networks. More recently, we are seeing some of these social networks becoming sources of trusted identity credentials. Note that I can now login to Dopplr by using OpenID. I can log in to FriendFeed using OpenID, GoogleID, or my Facebook credentials. Examples exist on the forefront of gaming too. For example, Metaplace allows login with six different identity providers.

To borrow an analogy from SXIP’s, Dick Hardt's Identity 2.0 presentation, this is analogous to the drivers license in the real world. When I go home to my native Montreal, I don’t have to have a Quebec driver’s license. If pulled over, say for turning right on a red, I can show my Oregon drivers license because the government of Quebec is implicitly stating “we trust Oregon as an issuer of credentials and will accept these credentials at face value for this transaction. Now here’s your ticket, ‘sti.”

If the promise of previous generations was “games that just work”, and the current that “games work with each other”, then the promise of the NEXT generation will be this: That true next-gen game platforms will comprise services that *just work* with one another.

Cracking open these walled gardens is going to be difficult. Its one thing to allow the ‘linking of identities’ like we saw announced with Live/Facebook this week. Its quite another to have those services trust the identities issued by other services as the users sole credentials, especially for facets where financial transactions are concerned. It will happen though.

Initially, I believe we’ll see the consoles requiring *their* identity system being a user requirement, but other more open web services allowing sign-in with these credentials. E.g. “sign in to your Flickr account using your Xbox Live credentials. This might grow to add billing-type transactions (e.g. instead of today’s creation of a separate billing relationship with Netflix, why not just ‘click here to join Netflix and have it deducted from your Xbox Live points’. While the mechanics and politics of such things will take time, the appeal of providing more paths to the cash register is strong.

Most important though, will be the network effects realized. The move announced at E3 will see Xbox Live, Facebook and Twitter each becoming more valuable to customers as a result of the bridges between them.

Some developers and publishers have worried about the increased power that the ‘walled garden’ platform owners might yield as these services grow to encompass everything from development to distribution. I can’t think of a better antidote to that than a realization that tearing down the walls may increase their value. It will take a long time for this to happen, but this year’s E3 marked an important first step.

Nice resume. Now about your lack of startups...

Good article in favor of buy-vs-build and how it’s getting mixed with hiring-vs-acquiring. Gist of the article is the merger of the following three quotes:

1) “Like everything else in technology, the cost of starting a startup has decreased dramatically. Now it's so low that it has disappeared into the noise.” PLUS

2) “When companies buy startups, they're effectively fusing recruiting and product development.” EQUALS

3) “companies that acquire technology will gradually learn to go after earlier stage startups. They won't necessarily buy them outright. The solution may be some hybrid of investment and acquisition”

It's an intriguing article and makes for some interesting food for thought if you interpolate beyond where the author has taken it. For example:

• If an ever increasing number of undergrads start their own companies, how long before it's just *expected*? Part of the min requirements? It wasn't so long ago that "I wrote and shipped an indie game" or "I ran a fan site for an MMO" was an attention-getter on a resume. Today, standard fare. Maybe one day you can't even apply for that MBA program without at least 1 startup under your belt.
• If it becomes something that everyone is doing, then the min bar will be starting a SUCCESSFUL startup. Of course, those people may not want to be hired or acquired at all. Makes for a nice feedback loop there.

Hmm...

(Of course, while the cost of starting web-based businesses may be dropping, there are still many industries that are pretty capital-intensive, in which case this may apply less.

Olfactory peripherals: This smells a bit familiar...

There were a few links around the web last week mentioning a research project out of University of Birmingham called "Scent Delivery System" or SDS. The researchers claim to have developed a system that allows some games (in their case, HL2 and Farcry mods) to deliver scents to the player after hitting certain trigger points. 

Some game sites linked to this as if to say "look what's right around the corner" (the researchers claim it could be gaming reality 2-3 years from now) and others to say "not so much".

Anytime there is new tech proposed, of any kind, there are enthused supporters and - usually outnumbering them ten to one - naysayers. As a general rule they are both wrong. The tech usually becomes feasible at some point, way beyond when the supporters claimed, and far enough out that the naysayers can claim they didn't beleive in it happening... then.

What surprised me about this round of 'smell-o-rama' write up was two things:

First, that the writers discussed how it could enhance realism, but none of the articles I saw discussed how it might enable new modes of gameplay. (Actually, I guess that shouldn't suprise me, but it disappoints a bit).

Second, that none of the write-ups discussed that we've been here before. About eight or nine years ago, a company called Digiscents was showing a prototype device and SDK at GDC (2001, IIRC). I got to play some of the game demos with the prototype and while I was skeptical for a bunch of reasons, I was still impressed. Many people think Digiscents' demise was an indication of the market's reaction to their tech, but I don't think we'll know, since the dot-com implosion dried up much of the venture funding at that time too.

But this post isn't about Smell-o-rama for games, and whether or not that could or should happen. 

My first point here is that when looking at new forms of technology, whether it be olfactory peripherals or the iPhone or whatever, and not asking "will it work with todays games?", though that might help deployment, but rather we should be asking "what has not been possible in games, that perhaps now can be?"

My second point is that like in other things, we should learn from history. Whether it be history of a particular piece of tech like in this case, or general models learned from elsewhere in history of technology deployment. 

[Update: Here's a great archived post from Internet Retailer from March of 2001 on Digiscents, their deal with RealPlayer to add scent to web pages, their deal with P&G. Ah... the bubble. :-)

My name is Ali, I'm your friendly pirate today.

As I'm prone to posting references to business models in other industries, I cannot help posting this link to a cool story on NPR about the business of Somali pirates.

Not sure how this applies to the game industry, but I had to link to it anyway.

via BoingBoing