Book Review: It's Complicated

I've scaled back the book reviews on my blog. Combination of being busy and just being less interested than in the past in doing so. That said, I intend to make a point of adding reviews for books I deem important, and danah boyd's book, It's Complicated: The Social Lives of Networked Teens , is just such a book.

I've had the pleasure of meeting danah through mutual friends and she's one of those crazy smart people that would make you feel woefully inadequate, were she not so personable and engaging. It's Complicated represents the culmination of over a decade's worth of her research into American teens and how they use technology and social media. It is a groundbreaking, nuanced, thorough look at the topic and it's many facets.

The book opens with a discussion on 'networked publics', the virtual spaces created by online participation, and the ways in which these spaces overlap and collide with each other and the real world networks in which we live. It then goes on to discuss the many ways in which youth today use and participate in these networks as part of their participation in society and as part of their growing into adults.

From the closing passage of the book, boyd summarizes why I think the book is so important:

"Growing up in and being a part of networked publics is complicated. The realities that youth face to not fit neatly into utopian or dystopian frames, nor will eliminating technology solve the problems they encounter. Networked publics are here to stay. Rather than resisting technology or fearing what might happen if youth embrace social media, adults should help youth develop the skills and perspective to productively navigate the complications brought about by living in networked publics."

Ultimately, this is a book about modern teenage life in our society, how it differs from the actual and idealized world of their parents' teenage years, and the role that technology does and doesn't play in that difference. It's also about media literacy and how kids and parents are struggling to make use of, and sense of, a shifting landscape of technology that is reshaping how we view our relationships to one another.

I started reading the book as a technology guy looking to learn more about where things were heading. However, I think the side of me that is a father of three will-be-teens-before-you-know-it kids got the most out of it.

Strongly suggested reading for anyone in tech and anyone with kids.

It's Complicated: The Social Lives of Networked Teens

The beginning of the FB decline?

While blasphemous to say so, I've been saying for years that Facebook is not "too big to fail" despite the perceived lock that network effects give them.

Anyhow, an interesting piece I came across recently that might indicate the beginnings of then end. maybe?

The age of the brag is over: why Facebook might be losing teens

Book Review: The Filter Bubble

I got turned onto The Filter Bubble after viewing the author's TED talk on the same subject.

The TED talk gives you main idea, and that's probably sufficient. The book dives into a lot of interesting detail, some of which isn't exactly related to the core thesis, and that's part of the problem I had with it. The idea is sound but the book is a somewhat meandering exploration of the idea... along with other things the author is interested in but that are unrelated.

The thesis is as follows: In order to better serve users, search providers, social networking sites, and other information sources are providing personalized data feeds - feeds tuned to their preferences. As these become our primary sources of information, it results in a feedback loop where we only see what we like, and what we see influences what we like. He borrows danah boyd's analogy of an all-sugar-and-fat diet (it might be what you crave, but it's not good for you), encouraging us to think about ways to eat our digital veggies.

This is not new of course. The advent of television brought about similar paranoia. However, there's no denying that it's true to some degree and the fact that it can be dialed in to each individual user makes it credible. The paranoia is seductive to give into. Even if you don't there's some interesting stuff in the book, though there are also some flaws.

Pros:

• I learned a lot about how modern internet advertising & site personalization work. I'd heard of companies like Axiom but didn't know what they do.
• The book does a good job painting a picture of some possible outcomes of personalized search and personalized advertising (e.g. think of tailored political ads, for example, and the complexities of holding them accountable to telling the truth).
• He does a good job explaining some basic concepts around programming and technology in layman's terms. Not much use to me, but I might think of recommending it more easily to a relative or non-techie friend.

Cons:

• The author delves into a lot of other areas having little to do with 'filter bubbles'.
• Those areas that do are taken too far, and consist mostly of his own 'what ifs', rather than consulting research and/or data on the subject.
• The solutions proposed are weak. Telling people they should try to consume responsibly, out-smart the personalization-bots, etc, all seem like they'll fail and/or fall of deaf ears. Suggesting maybe there could be an ombudsman or some regulation seems like a bit of a cop out without proposing how those might work.

I guess I'd say most will be better off watching the TED talk to get the basic idea, and then reading the book only if they want see how deep the rat-hole goes.

The Filter Bubble: What the Internet Is Hiding From You

3 Problems Hiding in Zynga's IPO filing

[I'm not a lawyer nor an accountant. My opinions are mine and not my employers, etc, etc]

Zynga's S-1 filing is really interesting reading. Tech Crunch has a (rather short) post on it here, and VentureBeat has a better post looking at some of the details here. Hit the bullet points on the VB post if you want the TL;DR version, but most of this will leap out at you from the S1 filing anyway. Short version:

• 600M revenue in 2010, almost 4X 2009. $235M revenue Q1 this year alone.
• Profits growing, with revenue (Q1-Q1: 135%), but...
• R&D up sharply (160%)
• marketing costs up (130%)
• but on the plus side, Cost of Revenue (mostly operating costs) up 110%, suggesting they are getting efficient, or benefits of scale, or both

So, all in all they are doing very well, and it certainly looks like a better investment than GroupOn or any of these other crazy IPOs that have people crying bubble.

But hang on a second. It still smells funny. Look at it from 10,000 feet. The company is HIGHLY dependent on one platform/vendor (Facebook), they don't have nearly the revenue or war chest that the incumbent publishers have, etc.

So, I thought I'd read through some of the fine print. I think the S1 doesn't address three important areas:

1. Allocation of R&D costs: Details on R&D are sparse, and the statement just cites increases in headcount, etc. What it doesn't say is whether that's because of a broadening portfolio of games (that would spread risk) or whether individual game title budgets are growing, which would suggest an increase in risk, as each title becomes a bigger gamble.
2. Risks posed by entry of EA and other incumbents: As the major publishers awaken to social games, this could have a three-sided effect on Zynga: (i) R&D costs go up to compete on product quality, (ii) possible loss of MSS as the publishers bring major titles to market, and (iii) user acquisition costs go up as the competition drives CPMs on FB's ad network up.
3. Terms of Facebook credits agreement. To Zynga's credit, they DO call out the move to the Facebook credits system that took place last year, where they went from giving up 2-10% of revenue for payment processing to giving up 30%. However, they didn't just move to Facebook's credit system. They did so after a bit of a fight, and they signed a five year agreement. What are the terms? I'd like to know, for example...

• Do they get preferential ad pricing and/or placement as a result?
• Although signed in July 2010, the S1 states the migration was only completed April 2011, so how much of the revenue from 2010 and 1Q11 was earned at 95 points on the dollar vs 70 points?

With any company, it'd be possible to ask infinite numbers of questions to learn or infer more. In this case though, I think there are at least a couple key things that investors should consider.

Food for thought over your long weekend...

Shh!! 3 Unspoken Lies About Social Games

The inimitable Greg Costikyan wrote an excellent piece for Gamasutra, lambasting Social Games, and claiming that they are in fact not very social at all.

I agree, and thought I'd add two more topics that came up in conversation at Login recently, and in conversations with a couple social games developer friends.

So let's give Greg Credit for calling out the first lie on my list:

Lie #1. Social games are social games. (Truth - they aren't very social at all)

And to this I'll level two more accusations.

Lie #2. Social games are viral. (Truth - they aren't)

Social games are often cited as "viral", or having the opportunity to be so, because of the social network on which they reside. However, short of the early days in which FB allowed apps to spam a user's friends list, this just isn't the case.

Companies like Zynga are rumored to spend many millions on advertising within FB to acquire users, but if the games were truly viral, they would spread on their own, being recommended whole-heartedly by friends via word of mouth.

The fact that few social games have been able to exceed the virality of the average dog-on-skateboard Youtube video - let alone the virality of an Angry Birds - is proof that they aren't viral. (Some examples do come to mind though. Parking wars and Cow Clicker certainly got a lot of watercooler talk.)

Lie #3: Social Game Publishers are building Games, not Products. (Truth - most have little respect for the medium other than as a revenue generator).

I'll cut to the chase: To my knowledge large publishers in this space, like Zynga and Playdom, don't have developer credits listed in their games.

I wasn't able to find them anyway. I had a couple developer friends lament about the fact that there were no game credits and that when they'd asked management at these companies, they'd been told no.

I think that speaks volumes about those publishing these games and what they think of the people working on them, and of their contributions. "It's just a product, and you are just a cog".

There are a few companies out there doing the right thing (I'm looking at you Brenda!), but I fear these are the exception.

With all the excitement around 'Social Games' these days, it's important that we don't delude ourselves about some of the lies being told.

//rant off

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:

Twitter-abstinence experiment over

A couple years ago, when all the intertubers got all hot and bothered over the next wave of technical hullaballoo, namely Twitter, I decided to try an experiment and sit out one round of technology.

Well, it's been long enough and here I am: @kimpall.

Did I learn anything from the experiment?

• It's not the end of the world to be off the grid, or at least off the latest medium/tech. In fact, plenty of young, tech-savvy, innovative people are not on Twitter or Facebook, and yet they manage to thrive. Imagine that, twittees!
• Twitter, like Facebook, can be a serious timewaster and ADD magnet, if you let it (at least it seems that way)
• On the other hand, it seems a killer app at conferences
• While I don't need to be abreast of every meme to the very minute, it does seem like there's a lack of reliability of the more relevant memes leaping off of Twitter and onto the less ephemeral blogosphere. Some do, some don't.

So, I'm on it, but I will aim to have some goals while using it. I'll try to keep time-wasters to a medium (try...)

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.

Slush(y) Fund: Piggybacking Bits on Atoms

Someone put this on my radar on Facebook today:

Zynga and 7-Eleven partner to bring game content to ice cream, Big Gulps

Short version is: Buy ice-cream, comes with a code, redeem code in-game for virtual items.

Gimmicky, right? Wrong. Brilliant. OK, why?

I wrote some time ago (wow, 3 years ago!) about how kids "connected toy" products like Webkinz and other entrants were bundling services with a toy.

The most brilliant thing about this is not that "you get a game with the toy!" or vice versa. The way to view it is that the physical product allows the virtual item sale/subscription/etc piggyback on a channel that the customer understands. And if that gets you over the hurdle of a massive number of customers not having credit cards or being afraid to type them into a browser, then it's well worth the cost of the plushy (or in this case slushy).

I'll bet that we're going to see piggy-back revenue models like this (you can call it a promotion, or a bundle) are going to grow significantly.

One way to accelerate it would be to think about ways to remove the friction of having to enter a lengthy code while in front of the PC. Maybe it's texting the code from your mobile to automatically credit your account, or a unique bar code you hold in front of your webcam?

Anyhow, it will be interesting to see how well this does for Zynga. I'm betting it's going to be copied a lot

App demonstrates Facebook privacy pains

Following up on my last post, a friend developed this:

http://youropenbook.org/

Go there and type a few keywords in that you figure people might want available to friends like "parole officer" or "DUI" or "Lost my virginity". I'm certain most of these people have an idea this is being made available to the world.

Also, danah has another awesome post on the subject.

Thoughts on the Facebook privacy outrage

Many are expressing a lot of angst about Facebook's privacy policy changes over the recent months. Here's some essential reading on the subject:

Matt McKeon has done an awesome bit of data-viz porn on the subject to help folks grok how FB's policy has changed over time. You can go play with it here. (As a bonus, Paul L pointed out to me how Matt's released source to the app to do this). Here's a snapshot:

If the above gives you the 5-second dump on what's changed, then the incomparable Danah Boyd's lengthy post on the subject will then let you simmer on the implications. Danah is one of the smartest people I know of looking at what SN's mean to people and how society is being shaped by them. Her post is essential reading for everyone. Period. So are a number of the posts she links to.

Talk of course has turned to whether there is an alternative to FB, and whether they've overplayed their hand. People are looking to alternatives and wondering whether someone can use this as an opportunity to topple the unstoppable giant*. A fave underdog in recent days is Diaspora, a Kickstartr-funded project that used the angst to raise $145k in 12 days (from >4000 people, 9 of which gave over $1k) - that's a lot of protest money.

*which is silly. How many times have we heard "no one can stop the unstoppable (yahoo, GM, Microsoft, Everquest, Genghis Khan, etc)"?

The idea of an alternative with more user-centric privacy controls is interesting, as is the idea of a distributed network like Diaspora's attempting.

My own opinion is that if people really start leaving FB in droves, or if regulators start getting heavy-handed (Danah points out that they are sniffing around), then FB can choose to dial back their policies. They'll be OK on this front if they do so soon enough.

It won't matter though. I still believe that FB is going to collapse under their own weight - and by that I mean the narrow, limited way in which they link people, and the band-aid solutions they have to add on to try and work around this. As I've pointed out at length before, the problem is that Facebook doesn't understand the difference between an adjective and a noun.

Design Outside the Box: Jesse Schell (DICE-10-Post2)

My favorite talk from Dice 2010. Getting lots of press around the blogosphere. It was really bold, and the Mitch-Headberg-esque delivery didn't hurt either.

Some of it was a bit out there, but the overall message was to have an open mind to how far we have to go, just how broad gaming is going to get, and to think outside the (console) box.

Here are some terse notes in case you prefer that to the video version or would like to read my commentary [in braces]

--

I want to look at Facebook and how that's only the start of how things are going to go broader than we can imagine, but first some basic facebook math [he really means some humorous facts but they get the point across]

"FV>T" - there are more Farmville players than total Twitter accounts - Facebook is BIG

"LG>DP" - Lead gen (credit card offers, netflix sub signups, etc) are bigger than direct payment. [Note there was no mention of the controversy around these] -Facebook is STRANGE

"EA - 1500 FTE + PF - 300M = WTF!?" - EA minus 1500 full time employees plus playfish acquisition for $300M all in the same day = WHAT THE HELL!? - Facebook is TERRIFYING

Facebook is Big, Strange, Terrifying. But Terrifying really means unexpected.

Lets step back and look what else was unexpected.

Mafia wars - Imagine hearing the proposal "I'm going to do a text-based Mafia game and make $100M"?!

Club Penguin - Kids subscription MMO?!

Wii - Majority of the room did not predict their MSS leadership

Wii Fit - A billion dollars alone!!!

Guitar hero - $70 ASP and a plastic guitar - Entire new genre

Webkinz - Stuffed animal subbed Virtual World

Xbox acheivements - metagame & social network (outside the game, bigger than any one game)

Lots of psychological tricks in the above:

Club Penguin: free to play - eventually kid asks parent for $6. Virtual currency accumulates but can be used so they 'stretch' the amount the kid nags parent for the $6 until in. I call this the 'elastic velvet rope'

WebKinz: Every stuffed animal has always -to a child- contained an imaginary "magical" version of that animal that talks and moves and does stuff. WK lets kids actually SEE that animal. [There's some validity to this assertion, but I think it's far simpler than that: Kids like VW's, and the stuffed animal moved the subscription into a physical format the parent understands (buy a stuffed animal at retail)]

Mafia wars: Text based mafia game - phsycology is that it uses your real friends. I am better than U and I'll spend money to prove it.

We all do game design, but how many people are Brainstorming and researching new psychological locks and keys like the ones above.

What else do all these have in common: THEY ARE ALL IN SOME WAY BUSTING THROUGH TO REALITY!!!! [This is a really good observation]

Taps into a bigger trend [references "Authenticity: What Consumers Really Want" - I'll have to read it]

TV has gone to 'reality TV', people value 'authentic' products (made with 'real' juice. organic food, etc). [While I think the organic food parallel was a stretch, he's onto something here. One could view the indie game trend through this lense and say "people like Braid partly because it came from Jon Blow's heart, not from Vivendi's management committee and focus group data]

We live in a bubble of fake bullshit. We are rebelling against that.

People are not looking at tech as the enemy here, but as a to how we can use to cut back into reality.

What about tech convergence?

Tech convergence is total bullshit. Every device everywhere will have games of all different kinds. Tech DIVERGENCE!

[I love this part]

BUT! I have an iphone. That breaks your divergence point! Bah! I claim it is the Pocket Exception Law

Pocket Exception: Swiss army knife.

Like a swiss army knife, it does everything (not necesarily perfectly) but fits in your pocket.

If someone gave you a 24" swiss army knife that had a butcher clever, a spatula, knife, fork, spoon, etc, and said here is the ideal device for your kitchen, you would say bullshit.

And THIS is why everyone hates the iPad.

[Fuck ya! Awesome]

Lots of examples of games pervading the real world:

fantasy football

geo caching

simpsons scavenger hunt on TV [clues embeded across different shows. TV Network metagame!]

darpa red balloon hunt

weight watchers

[HOLY BALLS! -->] Ford Hybrid dashboard display has a green leafy plant on it. The better you drive to conserve gas, teh more the plant grows. There's a f***ing tamagochi built into my Ford Hybrid!!!

Professor Lee Sheldon has built an RPG for his students where instead of giving out grades, he gives out XP and they level up through homework assignments, good test scores, etc.

Sensors are happening - DSi, Natal

We are on road toward disposable technology

[lengthy example of a fictional future where divergence leads to all devices connected to metagame...]

teeth brushing - +10

cornflakes +10

+45 take the bus to work

REM implant

+200 got to work on time

implant tattoo - tattoville adsense

lunch dr pepper - +500 for five in a week

shopping +100 for buying organic

did you practice your piano +50 points

kindle 3.0 - eye tracking

achievement unlocked for finishing 500 novels

However, when I realize my 500th novel was some piece of drivel... and that my grand-kids and their grand-kids will be able to look up what my 500th novel was... well, maybe I should change my behavior and read something more ambitious, something more worthy...

So while the examples I've run through thus far seem like escape into a game, may be possible that it will inspire us to be better people.

[Amen!]

Playfish's Smart Move in the Facebook Gold Rush

This is a good piece on why Playfish sold itself to EA.

New markets (for game makers or anyone else), the successful ones anyway, tend to turn into gold rushes. Someone takes a chance, stakes a claim, hits gold, and then in come the hordes of followers that heard about the guy that got rich with only a mule, a pan, and the clothes on his back.

In recent years we saw a casual games gold rush, a console downloadable (lead by XBLA) gold rush, an iPhone gold rush, and now it's "Wagons, Ho!" for the Facebook gold rush.

With each of them, the market achieves an equilibrium over time as competition increases faster than consumer spending does, and eventually you get to the same place as the rest of the games industry: A hit driven business in which a minority are profitable, a very small minority are extremely profitable, and the majority go bust trying to get to the top end of the curve.

What *differs* though, in how these markets evolve, is the tactics taken as the marketplace crowds. The strategies available are the same across all of these, but which is the right one, tactically, varies by platform.

They are:

1. Lowball on price: The PC casual download biz eventually went this way, and many are trying this tactic on the iPhone, but I believe it's a fools game, and some of the others below will turn out to be the real winners for that platform.
2. Out-Innovate: This one is easy. Go invent an awesome game mechanic/biz model/etc, that no one else has thought of, and that everyone loves and finds addictive. Oh, and make it hard to imitate. Easier said than done. The problem with this one is that there's no clear path.
3. Spend your way out of the clouds: Spend on development, spend on marketing, etc. Build a better looking title, get pretty screenshots, and then go pound the pavement to get more ink/photons than the other guy. (We saw many XBLA titles go this way as budgets went from $100k to $1M)
4. Out-Brand: This is another flavor of spending your way out of the clouds. Specifically, license IP/Brands, from games or elsewhere, can help your title stand out in a crowded space. This works especially well with a less scrutinous audience (doesn't necessarily mean hardcore, could mean just more price or time sensitive).

The interesting thing about the Playfish acquisition is that they pretty clearly are claiming that #4 is going to be the strategy of choice for Facebook, and I have to believe they are right.

Dropping price doesn't work because the FB games are mostly free/freemium. Innovation is risky everywhere (better to be 'fast follower'), and increasing the game budget... well that will happen, but it's not clear where it ends, or if FB games are ready for Unreal engine license.

So that leaves out-branding, and as the article points out, the EA acquisition gives Playfish the financial resources with which they can go do this, plus a great set of connections at EA with their own IP and licenses from other EA partners.

[note, of course you'll see ALL the above strategies employed in each of these markets, but there will be majority gravitation toward one or two at any given time]

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)

"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.

Playfish CEO misses the point of FB Connect

This caught my eye (via Alice): 'Playfish CEO unsure of Facebook Connect'.

Speaking in a panel at the Develop Conference 2009, Playfish CEO Kristian Segerstrale as revealed he is yet to be convinced by the prospect of the Xbox 360's forthcoming social networking service, Facebook Connect.

"I'm not too sure about social networking and Facebook integration on the Xbox 360, because not everyone has one, [snip] Social Networks do open up games to a far wider audience, but it has to be just a click away, and you don't want to have to buy a 360 just to get at it."

Hmm... has he even USED a 360?

One of the more groundbreaking elements of the 360 was that it shipped with a social network, Xbox Live. FB Connect is about building bridges between customers existing social networks, not starting a new one.

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.

"Lawyers" for 63 points!

Well, they finally did it, Scrabulous is down. The following message gives a hint:

"Scrabulous is disabled for US and Canadian users until further notice. If you would like to stay informed about developments in this matter, please click here."

US & Canada is of course the territory covered by Hasbro's copyright on the Scrabble game. EA licensed that property and launched Scrabble for Facebook earlier this month. My guess is that someone had a "pull it down by end of July, please" notice and well, it's the end of the month.

LATimes has more detail here.

Mattel, who has Scrabble rights for rest of world, is suing the Scrabulous developers in India (where they hail from) and has launched their own game for folks in their territories.

They will of course win, and we'll be stuck with two versions of scrabble for different regions, and an inability to play with friends overseas.

Hasbro, Mattel and EA win. RJ Software loses. However, there are other casualties. The end user loses, and Facebook loses. However small a stain on their service this might be, it's still a loss: A social network app that bifurcates the members of the network. It's unfortunate there couldn't be a more win-for-all solution that came out of this.

Note to IP holders: My friendships matter, your boundaries don't.

I've blogged plenty about the ongoing Scrabulous debacle (e.g. here, here, and here), but have to comment on the latest.

RealNetworks (who hold the PC rights to Scrabble for outside US & Canada) have released Scrabble for Facebook, but only for users outside US & Canada).

Let's ignore for a second that Scrabulous is still available on Facebook, and has the momentum of being the incumbent.

There's a really good example here of how the IP issue is going to poison the property's chance of success.

There have already been examples of online games where players were unhappy about being unable to play on the same overseas servers as friends. This however, is much worse. Here we are talking about a social network and applications that are looking to complement (and leverage) existing connections between people. Connections that previously haven't had to worry about distinctions like what country they may reside in.

If EA (the US rights-holder) ships Scrabble for US & Canada Facebook users, and Hasbro manages to shut down Scrabulous, users will be the loser here, having to figure out with whom they can play, out of their friends list.

Hasbro has the opportunity here to offer a superior offering (see my last post on the subject) to the incumbent, and possibly acquire their user-base in the process. Instead, they'll have partners offer two crippled versions because they did their licensing with an antiquated view of the world.

[Update: I was reminded that the rift goes beyond the digital world, as Hasbro has rights in the US, and Mattel in rest of world. Still the point still holds, their IP rights are going to restrict adoption and push users toward another game entirely.]

Ugh. Just seems so broken.

Permission-Based Marketing and The 3 Rules of Facebook Game Design

I had a moderately-cocktail-infused epiphany during a dinner discussion at the game developers conference today that I wanted to jot down before it fades from memory.

The conference has had its share of discussions about Facebook as a game platform, whether the opportunity will crystallize to a business worthy of the hype, and about how design for Facebook as a platform would differ from games on other platforms.

During said dinner discussion, lots of examples - a few good, many bad - were cited and discussed. Out of that discussion, I extracted what I'll claim here to be the Three Rules of Facebook Game Design.

Rule #1: Facebook games must engage the player at two levels: Peripheral Notification and Invitation, and Directly Engaged Gameplay.

Directly Engaged Gameplay is the player playing your game. It might be in a flash window, it might be scattered about the facebook users page, it might be elsewhere. The point is that the player is directly spending time doing the various things you want him/her to do. All your traditional game design rules apply here.

Peripheral Notification and Invitation is all of the various feeds that the game spits into their updates (and that of their friends! More on this in a moment).

The main point here, is that there are TWO distinctly different levels of engagement. In the former, they are spending time playing your game. In the latter, they are spending time "checking Facebook" and may want to know what's going on, but that's it. Which brings me to Rule #2.

Rule #2) Peripheral Notification and Invitation == Permission Based Marketing.

If you don't get this, go read a required amount of Seth Godin and come back when you are done.

When the player is not engaged directly in gameplay, then EVERY interaction your game has with them via feeds and the like, is textbook permission-based marketing. Before they've signed up for the game, you are asking permission to have them engage with your game for the first time. Upon install, you should be asking permission to have them spam their friends (and assume the answer is no), when they are players and you feed them news about goings on in the game, you are asking their permission to have them come play your game.

ASKING not INSISTING.

Consider the two following hypothetical feed snippets:

JoeShmo just assailed your castle. Click here to defend it before all your villagers die.

vs

JoeShmo just assailed your castle. It survived but several villagers did not. Click here to survey the damage, and to stealthily plot your revenge.

The former tells someone who's logged on that they MUST go play now, whether or not they have time. The latter invites them to play, but doesn't insist on it. To someone taking a 10 minute break at work, the latter is far friendlier.

3) The game doesn't need to live on Facebook.

Perhaps the more controversion of the 3 rules during tonights discussion, I postulated that if you observe rules 1 and 2, then there's really nothing necesarily better about the "game" itself being in a window on the Facebook page of that user than in a separate window, a downloadable EXE, etc. there are certainly issues around what kind of data you are trying to export or whether you can export it, what the client tech is and whether it's as ubiquitous as Flash, etc. The point though is that there isn't anything inherently BETTER about it being on the users Facebook page. The value in the facebook element resides in the opportunity to do permission based marketing to engage with the player outside the core game, and in being able to exploit the friend relationships between friends, provided that 'exploit' still respects the permission-asking element. Once you come to that conclusion, then you can have the Facebook-game-design discussion about ANY game title (Assassin's Creed, The Sims, WoW, etc)