The Funware Blog @ rmbr

No, I did not make a personal appearance on the Daily Show, but yesterday (6/24/08) saw the show dive into videogames and the political landscape in an unusual and Funware-centric way. Take a look at this Daily Show clip and fast-forward to 4:17:

Jon Stewart (TDS’ affable host) made reference to the McCain Space Invaders/Pork Invaders Game in which you blast pork-barrel spending and can compare the Obama and McCain camps on that issue (I’m sure they readied a Hillary version too). Here’s the game’s embed, for your amusement:

He then proceeded to joke not only about how old the senator appeared to be (by making a lame game, I suppose) but took it a step further and showed us McCain’s abortion-rights game (Pong with fetuses) and Obama’s health care game (FPS with Obama head shouting Yes. We. Can).

Part of the precedence for Funware is the idea that people start - even in jest - conceptualizing games that do more and go beyond the point of pure entertainment. The Daily Show’s satirists took a specific Funware application (the McCain game) and then imagined both how they’d build an anti-McCain game (FetusPong) and a pro-Obama game. They were using game design, though more visual then mechanistic, to get a point across.

The best part: the audience completely understood the meaning that both of the satirical games were trying to convey.

I wrote a special editorial for Gamezebo on the topic of how Facebook  is the Napster of the games industry. Yeah, I know it sounds crazy - but just hear me out. Social Networks are super-extra-mega-major transformative technology platform that really do threaten traditional (online and offline) games. I’m sure you’ll find it interesting, so hop over to Gamezebo and check it out.

More naievete from the Web2.0 press about game design and “ownership”; this time, from MA & Techcrunch about who invented college “Risk” first.

Let’s get a couple of things straight:

• You cannot patent a game design.
• You can trademark many elements of a game (like the board and the name).
• The provenance of most game designs is murky at best.
• Like most art, game designs build on past work, and are - by definition - somewhat derivative. This doesn’t mean that there’s no originality (far from it), but it does mean that there are few purely original game designs that don’t rely - somewhat - on the work of others.
• There are many amazing game designs and game designers. Really good ones rarely resent the work of others, in my experience.
• Time and time again, the games industry has proven that first-mover in game design usually benefits the company in question.

The questions of intellectual property rights and respect in the games industry are profound, complicated and evolving. It’s all too easy to turn this important issue into a “who slept with whom” fluff-piece (sorry, but true!) about some college entrepreneurs laying claim to the design of an ancient war game.

Let’s make this discussion more meaningful. While I work on a new article, you can read these (informative!) articles about games and intellectual property. Or, you can just skip the chaff and go directly to Valleywag. You know you want to.

IGDA IP Rights SIG (Check out their whitepaper)
Game Matters Blog (an oldie but a goodie)
Hey That’s My Game - Gamasutra
Myths about Game Patents
Patent Arcade

As conference season approaches, it’s interesting to read the blog posts and comments of many of my peers on the subject of games & social networks. Some of the posts have been really illustrative, while others have muddied a couple of concepts so fundamental that they call into question the writer’s entire thought process. That was a (mild) exaggeration, but I think you deserve a drill down into some of the key vectors for analyzing the world of “social games”. My talks at CGA:Europe and GDC will cover these topics in greater depth, should you be around for either of those.

There are 2 different kinds of games in the social network context:

• Games that use social networks for distribution or gameplay (Social Games)
• Games that require social networks for gameplay (Socially Connected Games)

Social Games are typically titles whose designs existed prior to the rise of sites like Facebook and Myspace. Poker, Match 3s or Scrabble are examples that have been reinterpreted as Zynga’s Texas Hold ‘em, Rock You’s Ultrablock or Scrabulous by the company of the same name. As a general rule, developers use social networks to do one of two things with these game designs:

• Increase distribution: by building in the ability to do direct address book invitations and forwards, developers make it simple for users to get their games in front of large groups of people, radiating out in circles from the original user. There is also the option of doing paid, direct distribution with companies like RockYou and others where an app rides along with one of their installs…for a fee.
• Simplify Multiplayer and Notifications: Using social network infrastructure as a backbone, messaging, player matching and high score management can be more readily tacked onto an application. This is especially true in MMO-style social networks like Facebook that expose almost all functions to API calls.

What most games in this category lack in originality, they make up for in improved economics (yay! investors!) and time to market. While it’s not pejorative to say that games with a social network tie-in are boring from a design standpoint, it bears noting that all the recent entrants to this space open themselves up to some obvious competition. For example: Pogo. Why on earth wouldn’t a Pogo-in-Facebook application simply roll over on everyone who’s trying to build a comparable experience in the Blue-n-White? Why don’t the current crop of FB games have the stickiness and recidivism of SuperWall, when we’re professional game makers?

Ah, the philosophical questions of our time. Kant would be rolling over in his grave, I assure you.

Meanwhile a whole crop of folks are busy working on Socially Connected Games, designed with social networks as an intrinsic part of the game design. As a small aside, this is the category where most Funware applications would normally reside, if they were doing their jobs well. And while this seems like an obvious next step for most casual game designers today, the majors are surprisingly silent in this vertical. Some interesting examples of games like these are:

• Likeness - where you play a series of quizzes to determine how you resemble your social network.
• Vampires - where you bite (slap, kick, etc) someone and they do it back to you/to someone else.
• Name That Friend - where you guess which friend has a particular characteristic or said something (extracted from their profile).

In each case above, the designers used the social network intrinsically in the design of their games. Put another way, there would be no effective way to play them without a social network. Yes, email would serve as a messaging system, but it wouldn’t allow the underlying game to be effectively played. It is no coincidence that games like Likeness and Vampires have significantly more regular users than games like Scrabulous or Poker. By making use of the intrinsic network structure, developers leverage the desires and inhibitions of users to get them engaged. Directly.

Now, I’m not the first person to concern himself with this topic. Brenda Braithwaite, Nabeel Hyatt and Scott Siegel have all done excellent jobs of addressing both the taxonomy and mechanics of games in Facebook. I really like their recent discussions on the subject, and they will be driving even more important, directional talks at GDC that you should check out.

In the meantime, I’m curious to hear what you think about the world of Facebook games and where you think they’re headed. I’ll have more to say about the opportunities for Funware in Facebook in short order.

Ok, so let me start off by saying that Macrovision (MVSN) has been very very good to me. They purchased my former company, Trymedia, in 2005 for a pile of cash. The check cleared. So far so good. I also lucked out in that I didn’t have to work a lockup after Trymedia’s sale - which means, in short, that even though I was instrumental in selling my former lover to MVSN, I never had the experience of punching in (or out) there. So everything I’m going to say about MVSN now is from the perspective of a (somewhat) outsider.

Yesterday, Richard Bullwinkle (who, incidentally, went to the same school as me and has an awesome name!) posted the most inane piece of corporate shill-swill I’ve seen on CNet since…well…Tuesday. In a pointless diatribe, he extolled the virtues of a consumer-centric perspective in digital media (check!), the need for open standards (check!) and told everyone that he likes the Beatles (check?). The central thesis of his “blog” “post” was that Apple (whom he exhorts from the perspective of a fanboy) needs to open up its systems to ensure interoperability. This would, eventually, lead to greater consumer satisfaction, he says.

His core point is well taken, if banal. We all know that an open, interoperable system that can ensure a consistent (and high-quality) user experience is the holy grail of designers everywhere. Anything less is usually the result of “strategic” thinking (see: NBC vs Apple) or strategic “thinking” (see: Windows Vista, PlaysForSure, etc). What Rocky conveniently forgets is that prior to Apple’s arrival on the music scene, everything *was* open and standards based. There were tons of great choices, most of which could play all the available digital music in the world. That’s because it was the open source community and teenagers that were responsible for the format choice (the MP3) - not the brilliant technical minds at Universal, Sony or Microsoft.  Those “creators” (or destroyers, depending on your perspective) depended on interoperability to win the status game they were playing. In the original Napsterian universe, you were either a god-like figure who’d ripped all his music in 1998 (the giver), or the music explorer, smoking dope and spending hours “playing” Napster to find long-forgotten songs (the receiver). In fact, many people played Napster as a social game - with multiple users in a single physical room enjoying the process of discovering and playing long-forgotten songs. A game of nostalgia, or memory, if you will.
Now the experience of discovering, sharing and exploring music is a lot less fun. To my eye, it seems like a rote shopping (or design) experience. We now do it in private, like it’s somehow dirty or onanistic. But it wasn’t only the free part of Napster and KaZaa that made it fun, it was the basic interaction. We were discovering something. Together. It was a new frontier, and we were cool in our exploration of it: You bring the broadband, I’ll bring the beer. Napster was the original in-room multiplayer Web game. Nowadays, online music is about 1-click shopping (c) and “browse the catalogue”. They’re filling options, maybe. Delicious? Never.

Maybe MusicNation or startups like ConduitLabs have an idea of how to resolve this fundamental disconnect. Perhaps their vision of the connected future spells “Funware” with musical notes instead of letters. They are, after all, run by people I admire and are known to be planning great things. I just don’t know how exactly things will pan out. But one thing I can tell you: the vanguard of this movement won’t be Apple, Microsoft, Google or Macrovision. And it isn’t because of open standards or consumer friendliness that people will rally around the next generation solution for music.

It will be because it’s fun.

I’m not usually one to react to posts generally designed just to be incendiary, but today’s editorial from Michael Arrington on the subject of “The Twice Shy Entrepreneur” definitely hit home. His basic point: He and VCs (like Saar Gur, whom we adore) think that 1999 bubble entrepreneurs are at a disadvantage in this cycle because they’re we’re not being daring enough.

While I can’t comment on the thousands of pitches Saar’s had to sit through, I can only say that he’s a nice guy and that I’m one of those people TechCrunch is talking about. After helping to launch Trymedia in October of 1999, I stuck with the venture through the ups (impossible valuations, hiring 5 “biz dev” people in 4 weeks, signing an equity-inclusive lease for office space) and the downs (letting everyone go, working without pay, listening to inane ‘advice’ from armchair CEOs). We finally sold Trymedia in 2005 to Macrovision, and I can safely say that the overall experience was formative. Anything you do for 6 years will color your perspective on the world, and I’ve become increasingly aware of how Trymedia has affected mine.

Although the ultimate outcome for the company was great, lately I’ve been describing myself as a “depression-era” CEO. This means that I want rmbr to be viable, cash-flow positive, and to build on its strengths. I want to create something that really connects with users and that generates (a ton of) value for all our stakeholders. I also want to change the world. Chris and I agree wholeheartedly on these points. Now, I’m not sure if this means that rmbr is somehow under-reaching, or if we lack the vision and chutzpah necessary to create a billion dollar business, but I can tell you one thing.

I don’t care.

The lesson I’ve learned first hand is that while there are few YouTubes, and even fewer Googles, there are many BigFish Games. These are companies led by visionary leaders, focused on satisfying consumers and obsessed with financial performance - namely, profits. And while I am a huge believer in the value of purely financial investors (those that invest for their specific financial returns in the short/medium term), like VCs, it doesn’t mean that we desire to create a company that solely serves those needs.

One of the biggest lessons I learned at Trymedia was about alignment. If all parties to a deal are aligned, magic can happen. People punch above their weight, they set aside their differences and they share suffering. But when people become misaligned - because of vastly different shareholdings, divergent career paths, or through fundamentally opposed worldviews, very few organizations can stay healthy and functional. Fractures begin to show, people become partisans, and an “everyone for themselves” mentality quickly pervades.

Perhaps the difference between the old guard and the new can be simply summarized as experience. And while it might seem to some that our Bubble 1.0 experience makes us meeker, perhaps its simply that we know enough this time around, to make sure everyone is aligned correctly. Our vision:

• We want to hire teams that believe in the product as much as the stock options.
• We intend to build products that serve real consumers rather than just the valley.
• And we insist on working with investors that care about companies and products as much as we do.

If this makes me/us old, so be it. Our intention is to rewrite the way that people interact with photos using games - and to pioneer the Funware category by driving broader adoption in the market. The time for our ideas is now - bubble or no.

Maybe thirty (three) is the new twenty (four) after all.

PaidContent.org is reporting that Activision and Vivendi have agreed to merge and create a company worth 18.9 Billion that will, reportedly, have the highest margins in the games industry.

WoW. That (World of Warcraft) is precisely what this is all about. In fact, this merger is proof-positive of what I’ve been saying for the past year: the core videogame business is lame. And by lame, I mean “on its way to pasture”. In fact, I’m not the only person that agrees. The WSJ reports that Activision’s CEO, Robert Kotick even said that the success of WoW made them want to get into online games, but they couldn’t figure out how. The emphasis is, obviously, mine.

Geez, guys. So, you couldn’t figure out what everyone in Asia (and most of Facebook’s users) already knew: that the future of games is about pervasive experiences that play across platforms and market segments? That if my mom and I can’t both find something interesting the “platform”, that it’s not much of one after all. So, in order to get a piece of that pie, you combine two of the largest and (already) top-heavy game companies into one entity. Why aren’t you buying Three Rings, or Nexon or another company with “new” mojo, instead of one that is, frankly, resting on its laurels and that has only one (albeit huge) hit on its hands?

The truth is that even WoW, with its millions of players, is a niche product. And while it’s a successful niche, you can’t build a $19Bn business on it. What you need are smart, directional moves in the direction of broad game experiences: casual and Funware both. You need to do things like hire the powerful and amazingly talented Kathy Vrabeck to run your casual game division - as EA did, and make a real commitment to the future of gaming.

The upshot here I suppose is that this merger will only hasten the demise of the core gaming sector. With one less competitor, AAA game development costs approaching $10M, and a continued lack of creativity/brain drain in the biz, it’s only a matter of time before even the least cynical 17 year old XBOX360 owner decides that they’ve had enough and start playing indie games.

So congratulations to everyone who made out well in the deal, and all my friends who stand to profit. I’m really looking forward to this next round of competition in the core game space, because it’s going to be brutal and prove an important point about large, creative organizations: they rarely never maintain their edge.

Chris Anderson, in his generally interesting Long Tail blog, made an intriguing - if slightly uninformed - post today that I thought worth responding to.

Now, Chris is a smart guy, and he’s done lots of important things for the tech industry as a whole. This includes coining important phrases like Long Tail, and editing magazines like Wired. But when it comes to game distribution issues, he just doesn’t understand.

I helped found a company called Trymedia Systems, the first successful company in the digital game distribution space. At one time, Trymedia powered almost the entire universe of downloadable game options, and, working with our partners (Yahoo, AOL, BigFish, etc) helped provide the infrastructure that’s enabled downloadable games to flourish. We started at the height of the boom (1999) and sold in 2005 to Macrovision, enduring a lot of pushback (”Gamers want to feel the physical CD in their hands”), pain (a big chunk of time unpaid during the downturn) and progress (More people play games on the web than any other channel).

But Anderson really misses the point about digital distribution. The marginal cost of a disc-based game is already very small - <$2/box for most, on an MSRP of $50. That doesn’t equate to a ton of costs that can be repatriated to the consumer. And, let’s be clear about something very important: games that are free-to-play/item based make significantly *more* money than most of their disc-based counterparts - when you look at an overall ARPU basis. And while most MMOGs (including Funware apps like rmbr) have a baseline free version, our business is absolutely predicated on the idea that people will pay for various items, powerups and features that are locked without a monetary contribution. This is nothing like the business model employed by most Web startups, because we really don’t give the game away for free, even though it *looks* like we’re doing that to the uneducated observer. We finely tune our online MMO products to wring the maximum revenue from each user - and that’s something the games industry is positively expert at doing.

Take a look at this ARPU chart. This is average revenue per user for a string of MMOGs. Does any regular “free” website get this kind of revenue? Does any non-porn web property even come close? Remember, these are averages, and the normal distribution is that most people don’t pay.

The reality of downloadable games is that you’re lucky if 1% of the people who download your demo convert into paying users, and the distribution in MMOs - while better - still doesn’t suggest that 70% of lookers turn into buyers. So, we make due in all corners of the online business by getting some ad revenue where we can, selling subscriptions to those that will buy, and selling our product (be it virtual real estate or a CDRom) to those that are really passionate about what we make.

But let’s be honest. There are no free rides in games - and no partners/investors willing to pay $15Bn for a games company that doesn’t make money. So, until then, I guess we’ll just have to make do with our focus on revenue and engaging users.

Twitter, PerezHilton, Facebook, Webkinz, Swivel.

The web is awash in shallow experience. Not bad, just shallow. I was thinking today about what kind person the web (as a whole) reminded me of most.

Sometimes it’s a vixen, filled with lust, avarice and a dangerous curve behind every patent leather fascia. Occasionally it feels a bit more like a pleated-front khaki’d, thirty something, non-descript, investment banker/vc guy with a geeky pedigree and strange vacation habits.

But mostly, the web reminds me of a 12 year old girl. Not just any 12 year old, but the kind parodied in Mean Girls, Heathers or Legally Blonde (before the transformative montage). I know, the characters in those movies are 16(ish) - but we’ve just gone through a period of intense maturity inflation, and 12 *is* the new 16.

What I mean to say is that our web experiences today are shallow, self-referential and absolutely detached/cold. Consider Twitter for a second. Not to take anything away from it, but can you really call sending a one sentence statement about the current state of your kimchi fermentation ‘communication’? Are we reaching out and touching someone? You don’t even get to really respond: “Oh, my kimchi’s doing great - glad to hear yours is too”. And, even though you can respond, you rarely do - because the Twittttt is not an actual invitation for discourse - it’s a statement. It’s socratic instead of somatic. Similar things can be said about Facebook. Are the people we connect with there really “friends”? To be fair, some of them certainly are (especially the ones made without meeting on the site) - and I’m sure Facebook exposes whole new modalities for interaction, but does it move your friendships forward? You know, even “Knocked Up” moved my relationship forward (the subject of another, more personal post I’m sure)…so why can’t Facebook?

I’m genuinely surprised when pundits and researchers are themselves surprised to find that the bonds between Facebook (or MySpace or Hi5 or Friendster) friends are not as strong as in real life. Really? You don’t say. Poking someone, biting them or even…dare I say it…Super Poking them is not the same as sharing an experience, a moment or a laugh. In short, the web experience of today lacks emotion - and without that essential aspect of our humanity, it misses something.

You see, I want to feel: Happiness, Sadness, Excitement, Elation, Disappointment, Anything. I crave human contact and the (inter)personal growth the comes from it. But the last time I shared a real, transformative emotional experience with someone, it was in person. And so it was the time before that. And the time before that.

This is one of the myriad of web issues we’re trying to fix with rmbr. Oh, Chris and I are driven people to be sure. We don’t just want to make a great photo game experience for everyone, we also want to make the web pop with shared emotion and growth. It’s a tall order, to be sure. But we know that when we combine the raw emotional power of photos with meshed social networks and really personal tools for interaction (such as our doodling or multi-player gaming areas), we can transcend the banal limits of the web, and really get people to emote, share and grow together.

So, Heather…let’s get this emotive show on the road. The rmbr beta is just around the corner.