The Funware Blog @ rmbr

I was recently catching up with the (excellent) New Scientist magazine, when I read a fascinating interview with the researcher John Ioannidis. He has pioneered work in the analysis of experiments and authored a landmark study from 2005 called “Why Most Published Research Findings Are False”. You can read the abstract and full report at the NIH here. While his work mostly deals with epidemiology and medical research, there are some findings and hypotheses that are super relevant to a startup as well.

Among other notes, Ioannidis observed that since researchers typically first conduct a small study, then seek grant money for a larger assay, it might be difficult to raise that capital if the initial results were negative or equivocal instead of hugely positive.  So, as someone setting out to prove a hypothesis (and it’s always prove, never disprove), you’re incented to structure your first course of inquiry (and result) to maximize excitement right out of the gate.

It occured to me when I was reading the article that the valley’s tech startup model is entirely built on this premise. You take  a small lug of cash and do something quick and exciting with it. If your first result is mind-blowingly awesome, people throw money and resources at you and you move forward. Anything less, and you find yourself reconsidering your vision, capital structure and partnerships (even friendships). Failure is spelled with a small ‘f’ in Web2.0 speak (or maybe just as failr) - and any business without immediate traction is in trouble.

As a general rule, it’s tough to argue with the success of the model, though it does make you wonder about the self-referential nature of the products that have risen to prominence on its back. For every Google - an unquestioned winner in the mass market - there are 10 tech industry “hypemachine” startups with a dense following in the 408,650 and 415. Witness Twitter or Mint - both of which are exciting companies, but with followings that barely scratch the surface of the markets they play in (messaging and finance). Ask 10 people in the valley what they think of those players, and you’ll find a ‘fait accompli’ attitude pervades; “Twitter has won the short messaging war”. Geez, I didn’t even know that we had gone to war in the first place.

Like all other businesses, our success or failure is ultimately determined by consumer behavior: time, enthusiasm and money. The central premise of professional investment capital is the ability to predict the future outcomes of promising, young startups - but I wonder if we’re too enmeshed in our own sphere (drinking our own Kool Aid, as it were) to be able to distinguish things that average people like (Photobucket) vs things that tech nerds like (Flickr).

About 12-18 months from now we’ll be able to clearly distinguish the wheat from the chaff. I, for one, am excited to see what happens.

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At the Game Developers Conference this week, we’ve been fortunate to attract a fair amount of interesting attention. Here are a few, select items from the press and blogs so far:

VentureBeat
The Industry Standard on our Unveil
Gamasutra on my Casual Game Talk
Gamasutra on my Virtual Worlds Talk

I’ll keep updating you with interesting new items as they emerge.

On Monday and Tuesday of this week, I had the pleasure of giving two talks at GDC. One at the Virtual Worlds Summit, and one (as a speaker/panelist) at the Casual Games Summit. While I have had the fortune and pleasure of giving many talks over the years, it seems that my Monday discussion struck a real nerve here at at the show. Since then, I’ve been inundated with people that want to talk about the transformative nature of Funware and how the games industry is on the move.

So I thought I’d post copies of my talks to the site, since many of you have asked for them. Feel free to download and enjoy the presentations to your heart’s content. It was my sincere pleasure to share my ideas with you.

Worlds in Motion Talk PDF
Casual Game Summit Talk PPT

This past week I had the pleasure of visiting Amsterdam for the CGA Europe:West conference and tradeshow - dedicated to the Casual Games Industry. It’s really an awesome love fest for our business - and a great place to learn, network and heartily debate the future of Casual Games. Or at least it is if you’re not running a 100 degree fever! Doh!

Despite feeling completely run down, I soldiered on and managed to give a presentation so good, so on-the-money, that I feel good even talking about it today. Ok, I was a bit sweaty, but the topic (The Future of Casual Games) could get anyone riled up.

I spoke about the need for the casual games industry to look beyond the traditional definition of a game and to think about how Funware signals the arrival of a ubiquitous gaming culture. Games are going to be integral parts of all aspects of society - not just as the (rightfully artistic) distractions that they are now.

Apparently, some audience members agreed. And while I don’t expect anything more than a couple of stimulating conversations as the upshot of my work, someone told Jessica that my talk was worth the conference’s price of admission all by itself.

A compliment like that really sticks with you, especially if you’re someone who feels that they live/die by the quality of their communication. And, it has healing properties not unlike those of chicken soup. Ah, positive reinforcement - how we love thee.

Want to see my slides? Check out the CGA Website for the content to be posted or reach out to me and I’ll send you a copy.

And, check out my talks at GDC - they sort of continue where the CGA dialogue leaves off!

Friends: after many months of waiting (it’s only been 4, but it feels like *forever*) rmbr is finally available for open registration.

You can avail yourselves of the site’s features to share and play with your photos in exciting new ways. We’ve also recently launched our newest game - PhotoPsychic.  We hope you’ll enjoy playing it with your friends.

Drop us a line if you have any questions, ideas or comments!

Susan Wu of Charles River Ventures and the GDC have selected rmbr as a finalist for the first annual “Startup Launchpad” at GDC. We’re super excited to be in the illustrious company of the other finalists (there are only 4-5 of us), and we’ll be sharing our product vision on Friday, Feb 22 at the GDC. If you’re interested in attending, the session info can be located here.

We’d love to see you if you’re going to be at GDC.

Jessie Scanlon of Businessweek has written an excellent and incisive article about rmbr and Funware. It just launched in the Innovation and Design section of the site, and you can take a look at it here.

Ok, so the sales data is out for 2007, and it’s freaking awesome!

The games industry in the US recorded a whopping 43% increase year over year from 2006 (admittedly a bit of a sideways year) and 2007. And - even more encouraging - the increase was felt across both hardware and software, boosting the industry overall in a slumping economy.

I remember that when I took my first games industry job, I had a lengthy conversation with my then bosses about how we seem to defy economic logic, posting revenue increases when the economy goes down (and even when it seems to be skyrocketing). What is it about games that makes them free of the usual economic constraints? Some theories:

• Games are a better value than other kinds of media, giving consumers significantly more hours of gameplay per dollar than any other category.
• Games are ascendant, grabbing users from all other kinds of media (and the concomitant advertising dollars), and this is independent of the macro-economic cycle. Put another way, this is a major, 20,30 or 50 year long cycle of growth that we’ve only recently begun.
•  The “Games Industry” is very broad. Unusually, our industry includes hardware, software, services and B2B products (like advertising, developer platforms, etc), so it’s really more like 3 or 4 different verticals all lumped together (casual game download sales and movie licensing revenues have very little in common).
• Console wars are the equivalent of a major stimulus package. With billions of dollars at stake, console manufacturers and their software partners pump a ton of cash into the game economy to ensure the success of their new ventures, effectively greasing the wheels of the category.

I’d love to hear your thoughts! Dean Takahashi has a good take on the issue (from the “why 2007″ perspective).

And the best part about all of it: these figures don’t even take into consideration the extraordinary growth being seen in new verticals (e.g. casual MMOs) or international markets. In short, perhaps, the best is still yet to come. Here’s to an even better 2008 - led by Funware enthusiasm, no doubt.

Oh, and as a small aside. 2 years ago at E3, Cal Morrell and I had a little wager.  I said the Wii would win this round of the console wars. He said “no freakin way”. Apparently, we’re both a smidge right, although his prediction that it would be the PS3 was certainly off. The Wii handily outsold in terms of total units, but the XBox was the cash king in 07. My further prediction: the Wii continues to grow its unit lead this year. Care to double down, Cal?

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.

Wendy Bounds, award-winning author and columnist for the WSJ has been playing around with rmbr a bit - and she likes it. Take a look at her excellent article for Independent Street. And, if you haven’t been actively reading the IS column, and you have an interest in emergent business, you really should give it a whirl! It’s awesome.  Her perspective is very much grounded in reality, and it’s great to read about so many interesting new startups.

Happy New Year to all - here’s to an awesome 2008!