Fuzbi LLC

Cross-posted from David’s blog, Game Tycoon.

When I look at Facebook, I see a games platform that has been thoroughly enjoying the “early glory” phase of maturity. Not too long ago, there was guarded optimism about the potential of Facebook to host profitable games, but few good examples of such games. Less than a blink of an eye later, Facebook has become the apple of our industry’s eye.

While most publishers are laying employees off by the hundreds, Facebook-centric publishers are hiring like mad. Savvy conference organizers are rushing to capitalize on audience demand for business venues to discuss social gaming. The inevitable stories of unbelievable growth have, quite predictably, become common-place. Facebook’s platform managers have finally started embracing our industry and contributing to the hype around their platform. And finally, a remarkable number of developers (and even large publishers) have begun to re-orient themselves towards the development of social games.

Facebook’s “inevitable misery”

All of these are classic signs that Facebook gaming’s “early glory” phase is in full swing. You may therefore conclude, with 99% certainty, that Facebook as a games platform is likely within a single year’s reach of the “inevitable misery” phase of its lifecycle. Probably much less than a year, in fact. As I’ve argued before, this does not necessarily mean that savvy developers should begin to look elsewhere — it simply means that there will soon be a large quantity of blood in Facebook’s waters. The victims of that impending blood-bath are listed here, in no particular order:

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This article was originally published by Gamasutra on 12/22/09, and later on GameSetWatch.

In my experience, one of the problems that most seems to bedevil game developers is the problem of timing; specifically, understanding when is the “right time” to begin developing for a specific platform. To understand why this is such a challenge for developers, you need to understand how a games platform tends to evolve.

Here’s the typical scenario: A platform — for example, XBLA, or the iPhone app store, or Facebook — comes into existence. Most people regard the platform suspiciously, for a variety of reasons. It’s an unproven market, for starters. The platform owner’s commitment to growing the platform may be unclear. The pros and cons of working with the platform owner in this context are unknown. There are lots of other platforms to choose from. Etc. Most developers take all this into account and decide to pass on the platform for the time being.

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Cross-posted from David’s blog, Game Tycoon.

I wrote the following brief news analysis for a multi-industry expert network that I joined earlier this year. It’s high-level and not as detailed as I’d like, but I figured some of you might appreciate it.

EA has just acquired social-network games maker Playfish for $275 million, plus an additional $25 million in equity retention arrangements and up to $100 million in additional cash contingent upon future performance. Playfish is one of the top three game developers in this space, the others being Zynga and Playdom (both privately held.) Zynga is widely rumored to be targeting an IPO within a year, leaving only Playdom as a wild card.

Why would EA pay such a large sum for a company that was only founded in 2007? In fact, one could argue that Playfish doesn’t even possess particularly distinctive IP and that its games are easily cloned (as Zynga demonstrated when it created “Cafe World” — a close copy of Playfish’s hit game “Restaurant City.” Cafe World now has 28 million monthly active users on Facebook, as compared to 18 million for Restaurant City.)

The answer is complicated. On one hand, big video game publishers have a history of overpaying for top development studios. But on the other hand, while social-network games may seem like simple things, they are in fact dramatically different from the video games that publishers like EA have built their businesses around. EA is, in part, acquiring expertise.

The traditional big video game publishers rose to prominence in part because they were capable of funding the development of robust, complex, multi-million dollar video games and in part because of their retail marketing and distribution prowess. In short: they are very good at getting people below the age of 35 to pay $30 to $60 for a boxed game that can be enjoyed alone on the couch or at the desk or with friends online. But social-networking games, by contrast, require a completely different product development and product marketing skill set. These games are free to play and generate revenue via optional microtransactions — they must be designed explicitly for the purpose of driving such transactions, as opposed to traditional games which can simply “be fun to play.” Furthermore, the core gameplay mechanic of any good social-network game must encourage players to invite their friends into the game — again, it cannot simply be “fun.” And of course, there’s no retail shelf to position a social-network game on; instead, developers must rely on non-traditional advertising, on the viral mechanics of their games, and on cross-promotion between online games to drive traffic.

This latter point is critical. The top social-network game developers have become very effective at driving players from their existing games to their new games. This means that they are essentially capable of helping any new title reach a critical mass of players almost immediately, and for “free.” From that point forward, if the game is designed well enough (i.e. if it is highly viral and good at engaging and retaining players), it will succeed.

So why did EA purchase Playfish? Because EA’s game designers are not accustomed to building games that focus mainly on viral design or on monetization via microtransactions. Because EA’s marketing people are not intimately familiar with the techniques necessary to market these non-traditional games to these non-traditional audiences. And because Playfish offers an established network of players that future games can be cross-promoted to. Of course, it certainly doesn’t hurt that Playfish is rumored to already be generating $50 million a year in revenue. Lastly, Playfish was likely the “cheapest” of the three established game developers in this space.

One could certainly argue that it would have been cheaper for EA to spin up one, two, or even three independent studios and charter them with experimenting in the social-network game space (especially if they’d had the foresight to do so two years ago.) Eventually, one studio would have hit on a successful formula, just as Playfish did. And perhaps other major publishers, such as Activision, should be considering such a strategy. But EA’s acquisition of Playfish certainly makes sense… it simply remains to be seen whether they overpaid or not.

Cross-posted from David’s blog, Game Tycoon.

It’s been a while since any given news story caused five different people to spontaneously email me. The latest story to do so is the Techcrunch exposé of scam artists who are working through the popular lead generation services (such as Offerpal) that are used by most major social gaming companies.

The story has already inspired quite a few responses, such as these thoughtful articles by Andrew Chen and Justin Smith, and this entirely predictable response by Mark Pincus, the CEO of Zynga.

My quick two cents: have the lead generation services (and therefore the social gaming companies, and therefore Facebook itself) benefited from the behavior of scam artists? Yes, absolutely. Should the lead generation services immediately do something to address the problem (and if not them, then the social gaming companies or Facebook itself?) Yes, absolutely. Does Facebook “deserve to be sued”, as one of my good friends suggested to me? No, it does not. Does this whole thing prove that social games are a house of cards? I highly doubt it.

Facebook is a popular open ecosystem, and like any other popular open ecosystem, it will be exploited from time to time by unethical people. There is always the argument that Facebook “could be doing more” to police the ecosystem (and in fact, it had already announced a plan to do precisely that as part of larger changes to the platform) but at the end of the day you simply cannot compare Facebook to the Playstation, to Wal-mart, or to any other closed ecosystem. Facebook has an essentially unlimited number of “content partners,” and while it should keep a close eye on the biggest of those partners, it is inevitable that some shadiness will eventually slip past the Facebook Police.

Sony and Wal-mart, on the other hand, have the advantage (and the great burden!) of controlling everything that enters their virtual and/or physical shelves… and they have much smaller shelves. So while I hope that Facebook will indeed do a better job of catching scams in the future, I don’t blame it, and in fact I hope it chooses to emphasize crowdsourcing techniques (i.e. better enabling users to flag and stifle abusive 3rd parties) as much as expanded police squads.

The social gaming companies turned a blind eye to their part in this problem, and now they are catching flack as they deserve. But this will blow over, and lead generation will likely continue to represent a significant percentage of their ongoing revenue. Why? Because at the end of the day, there are legitimate advertisers, content providers, and 3rd party networks with a vested interest in the success of this model. These aren’t all late-night, 1-800-type con-men; these are advertisers like Netflix, FTD, and GAP and product/service providers like Apple, The Wall Street Journal, and The New York Times. The only “house of cards” here is the house that Tattoo Media built.

Cross-posted from David’s blog, Game Tycoon.

Anyone developing an original IP for XBLA, PSN or Wiiware should take note of LucasArts’ Lucidity. Why should you take note? Because Lucidity is a truly delightful game that unfortunately showcases two of the most common “big mistakes” made by developers and publishers on XBLA. If the leaderboards are any indication, Lucidity’s sales are suffering as a result.

First, it’s worth recognizing how many things Lucidity gets right. It is beautiful, distinctive, and offers an original gameplay mechanic that actually works. Many game developers will never manage to create something that meets all three of those criteria in their entire careers. And many developers, with such a game on their hands, might assume that their success is all but assured.

There’s just two problems. If you’ve been reading this blog for any significant period of time, you already know one of those problems: insufficient marketing. Lucidity was unveiled mere weeks before it was released. No time to build consumer awareness. No time to woo the press. Nothin’.

The other problem is the game’s unforgiving design. (I won’t say the game’s “difficulty”, as something can be difficult without being unforgiving.) Lucidity lacks a checkpoint system, and that combined with a few other design issues causes the game to quickly become a punishing experience. This is apparent to players even in the demo.

It’s no accident that most modern platformers are more forgiving than their ancestors. While many XBLA and PSN users enjoy a stiff challenge, their patience is ultimately limited. Don’t let the success of a few insanely challenging retro titles fool you — those games have generally succeeded because of nostalgia, not because today’s gamer longs for the relentless butt-whooping of old.

1) Come up with a meaningful value proposition for your game. 2) Craft a gameplay experience that emphasizes that value proposition and that accommodates as many players in your target demo as possible. The latter can almost always be accomplished without noticeably diluting the gameplay experience. 3) *Repeatedly* communicate the value proposition far in advance of your game’s launch. –> These are the fundamental tricks of our trade.

PS. A year ago I wrote an article on game difficulty that is relevant to this post. The comments on that post were solid, too.

Cross-posted from David’s blog, Game Tycoon.

Film Victoria was kind enough to publicly share the video of my keynote at the Digital Distribution Summit in Melbourne. You can find it here.

Quick summary: I focus mainly on what it takes to successfully pitch your XBLA/PSN/Wiiware/Steam game to a publisher or platform-holder. If you haven’t already endured too many talks on this subject, I think you’ll enjoy the video. I’ve gotten an unusually large amount of good feedback about it!

Oh, and in case you’re wondering, when I ask “are you all right?” in the first few minutes of the talk, it’s because some poor guy fell on his face at the back of the auditorium. I, ummm, probably should have let someone else — someone NOT delivering a keynote at the time — ask after him.  :-}

Cross-posted from David’s blog, Game Tycoon.

If you are developing an original IP for XBLA or PSN, or hope to develop one someday, this post is for you.

Given the sales estimates being reported by Gamasutra (see these helpful examples), given what I’ve heard from individual developers as of late, and given the relative strength of established IP on the platform to date, I estimate that in general, no more than nine truly original IP-based games will succeed in any given year on XBLA. This is obviously a rough guesstimate at best; there is certainly the possibility that you will see more (or less) hit original-IP based titles in any given year. But even if I’m off by a few, you’ll see shortly that it doesn’t matter for the purposes of this post.

Now assume that approximately four (or more) of those original IPs will be successful partially because they are high quality, but partially because they are king-made by Microsoft. They might be included in the annual Summer of Arcade promotion. They might support a new 360/LIVE platform feature and be showered with tremendous dashboard and press exposure. They might be internally developed by Microsoft Game Studios. And the list goes on… (I would have included winning the Dream Build Play competition, but it seems like Microsoft is now keeping the winners in the Indie Games Channel.)

Now assume your original IP is not king-made. Darn!

You’ve got approximately five chances left to turn a serious profit on your XBLA game. You’ve worked endless hours and paid yourself peanuts, all in the name of making a great game. You’ve taken the time to create a decent demo experience. Still, it feels like you’re forgetting something… but what could it be? Frustrated, you decide to take a night off and have some fun at PAX. But when you walk through the main entrance, it hits you:

Twisted Pixel, showing off The Maw, Splosion Man, and their upcoming title, Comic Jumper	Slick Entertainment, showing off upcoming title, Scrap Metal
Ankama Games, giving private demos of upcoming title, Islands of Wakfu	Klei, showing off the upcoming title, Shank

You spent so much time developing your baby that you forgot to get out there and talk about it… but the competition didn’t! There were at least six different XBLA development shops parked right by the main entrance! Handing out toys. Showcasing their games. Kissing hands and shaking babies. (Or is it the reverse? You’re so distraught that you can’t remember!) And for many, this isn’t their first conference. The Behemoth… what conference do they not go to? And Twisted Pixel… those wacky guys never cease to charm the public with their adorable Maw plushies.

You play a few demos and grudgingly admit that these guys are making pretty decent games, too. A pit forms in your stomach as you realize that you might be screwed. But hey, that won’t happen. Marketing is bullshit, right? Quality always wins, Right?

Right.

Cross-posted from David’s blog, Game Tycoon.

I’ve been meaning to post a followup to my Develop keynote on digital distribution, and was reminded to do so by Raph, who lately has been speaking his mind about the realities of the Long Tail (good stuff — worth a read.) Raph also highlighted a report that Zynga is spending millions of dollars advertising its games and wisely predicted that new digital ecosystems will eventually be “much more hit-driven” as marketing and development budgets escalate. Raph’s right, as he frequently is, but I have one minor correction to make: the new digital ecosystems already are remarkably hit-driven! Put more bluntly: the people who thought the Long Tail would promise the end of hit-driven market dynamics were completely wrong (both about the nature of digital distribution and about the companies that digital distribution benefits.)

With rare exception (see my comments on niche markets at the end of this article) the Long Tail primarily benefits platform holders and the creators of hit content, not the broader creative community. Of course, I’m talking about financial benefit here; one could easily argue that the social benefits of digital distribution touch a far greater number of creators and consumers, and the social benefits are what make digital distribution truly wonderful. But that’s a story for another blog post.

It turns out that the hits get *bigger*

As many prominent journalists, analysts and scholars have recently argued, it turns out that hits are no less important in the new Long Tail world. Lee Gomes noted in the Wall Street Journal that in 2006, Amazon.com still derived 75% of its book sales from just 2.7% of its titles. True, 2.7% of 3.7 million books is nearly 100 thousand books — a great deal more than the total offered by any brick and mortar store — but that doesn’t change the financial situation for the authors of the other 3.6 million! Gomes also noted that, wherever he looked, hits remained vitally important to a given ecosystem (or in his words, “iTunes looks like Billboard, not some paradise of niches.”) And research by Anita Elberse, a professor at Harvard Business School, has shown that in some “Long Tail markets,” success has begun to concentrate in progressively fewer best-selling titles, and worse, that independent artists have actually lost share to major labels. And via Raph, another recent research study with similar findings: of the 13m songs for sale online last year, 10m never found a single buyer, and 80% of all revenue was generated by less than half of one percent (.004) of all songs.

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Cross-posted from David’s blog, Game Tycoon.

The Wii is a funny thing. When it comes up in conversation, half the time I find myself arguing with people who claim it’s just a fad. The other half the time, I’m arguing with people who seem to think that Nintendo is beyond reproach or that anyone who criticizes the Wii simply can’t see past their own hardcore biases.

I think the fundamental issue at play is far more subtle than “the Wii is a fad” vs. “hardcore gamers don’t get it.” You can’t rationally argue against Nintendo’s success at this point… too many units of the Wii and games like Wii Fit have been sold to call this a fad. And you can’t deny that the Wii was a strategically brilliant move on Nintendo’s part. At the same time, it’s troubling to see how many people — casual OR hardcore — are allowing their Wii to collect dust. Why is that the case?

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Welcome to the new website of Fuzbi LLC. There’s not much to see here yet, but that will change eventually. Meanwhile, feel free to send a note via the contact form, below: