By Mychal Kidd

By Mychal Kidd

Wednesday, December 7, 2011

Indie Games


Indie games (Independent video games) are on the rise. This rise seems to coincide with the growth from digital downloads. Because this increasing medium more self-sufficient makers of content can find a market without the overhead of having to create physical copies of a game.  This in turn leads to innovation since these new creators can act within their own creative styles without the influence of a large company that just wants the game to appeal to the largest demographic possible. 

One such vehicle that these games have found is Steam. This client can be easily downloaded to either Mac or PC and offers a large quantity of titles both indie and mainstream. Another way indie games have succeeded is over services like Xbox Live. Here games like Bastion thrive. In its first two weeks after being released on Xbox Live it was downloaded over 93,000 times. And at about $15 a pop that comes out to be almost $1.4 million. However when put up against the more major titles these figures seem pretty insignificant. Games such as Skyrim can come up with numbers double that in the first weekend alone. For Skyrim the exact numbers shows it selling 3.4 Million copies making an estimated $450 million. It would seem that in this scenario goliath is the clear victor especially since it has the edge of both being sold in major retail stores but also over services like Steam. 
 
An article published in 2006 by Make It Big in Games mentions that these smaller games companies will make 30% of the money earned off their game. The same article does explains that this is usually only top selling games so in the example of Bastion this can be a way to make a living for Supergiant. But this only happens after you found success in the market which is usually build failed game after failed game. An article by Opposable Thumbs  references Sequence as such failed game. The game only sold around 2,000 copies becoming a huge flop. Luckily the creators did manage to recoup the cost of development, but that was due to Kickstarter; a campaign that raised $2,600 on an original goal of just $600. But this failure doesn’t stop current new developers from going into business. 

In 2010 Supergiant games revealed their first game Bastion and PAX Prime. This small company describe themselves as, “We’re supergiant in name only. We’re seven people whose headquarters is the living room of a house in sleepy San Jose. But we make for a superstar team. We walked away from our jobs building major franchises for huge publishers to make original downloadable titles for people who love games and their loved ones.” This description of the small company shows that what they lack in size a company can make up in appearance. Here we can see a reemergence of the “mom & pop” type of business that Americans in the fifties were so fond of; a company that cares about games themselves and not the money of a major developer. 

That same feeling can be found outside the digital market with smaller retail stores with less overhead than major chains. When comparing stores like CD Game Exchange and a larger chain like Best Buy the customer will have a very different experience shopping. When walking into a CD Game Exchange you’ll notice a far more casual atmosphere. The customer usually must depend on their own knowledge of the store in order to find the product they’re looking for, and if a customer can’t find something they’ll notice that rather than typing the product title into a computer and automatically having the answer the employee will actually have to walk around the store with the customer as they also try to find it. With CD Game Exchange the customer will also be able to witness the effects of supply and demand much more directly. If the store has an overabundance of a single title each copy will be individually priced lower and lower. In Best Buy it doesn’t matter how many copies of a title they have each will be priced the same. This can create a connection with the costumer because of the more varying stock of products. A costumer will have to visit the store repeatedly to see what’s currently in stock. 

 

Tuesday, November 29, 2011

The Synergy in Your Game

Today’s topic is about synergy between video games and film. A concept through shows like NBC’s 30 Rock America has become more accustom to the word. But if you don’t know what synergy is it can be summed up like this, “The interaction of two or more agents (media organizations or products) to ensure a larger effect than if they acted independently.”

In the gaming industry the synergy can come up in many ways. For example a couple years ago the game Battlefield: Bad Company 2 had a promotion with Dr. Pepper. Basically you would buy a bottle (or more) of the beverage and in return gain a code(s) which you could redeem over a website to get free downloadable content (DLC) for in game use. EA the owners of Battlefield: Bad Company 2 used the same cross-promotion for free DLC with other games like Mass Effect 2 and Dead Space 2 (I’m sure it’s only coincidental that all my examples are sequels).

Another big way for synergy to work in the industry is film. Resident Evil seems to be one of the most successful examples of this happening. This series has made (or is in the process of releasing) twenty games and five live-action films; along with some novels, some comics, some CGI films and loads of other merchandise. Developed by Capcom, the Resident Evil premiered on March 30, 1996 for the Sony PlayStation. Three years late Pre-production for a Resident Evil movie began in 1999 when Sony green-lighted the film. On March 15, 2002 the film would be released. The film was distributed by Screen Gems an American movie production company and a subsidiary for the company of Sony Pictures Entertainment. 

Here we can already see the relationship. People play the game made by Sony, Sony makes money. People see the film made by Sony, Sony makes money. People see the film because they played the game, Sony makes double money. It’s not the hardest train to follow why a deal like this is good for business.

The game itself has made a lot of money in its time. Before the film the first Resident Evil game sold 2.75 million units and an addition 1.35 million units when it was re-released for the Nintendo GameCube in 2002. The sequel which was released in 1998 was even more popular with 4.96 million units sold. The film was also successful making $102.4 million worldwide after spending $33 million to make it. Now when you consider the fact that both the GameCube re-release of the game came out the same year as the film you can see another link between the two products. 

It’s easy to see that even if you were not familiar with the series but saw the film you might go out a purchase this “new” Resident Evil game that has just been released. Or possibly the film might stir up nostalgia for the original game film viewers played eight years before on their PlayStation. Either way it’s safe to say that going to the film most likely acted as advertisement the movie audience paid to watch.

This kind of cross-promotion doesn’t always work. In fact films like BloodRayne, Super Mario Bros. and Final Fantasy: The Spirits Within all lost insane amounts of money. The biggest failure being Final Fantasy: The Spirits Within; after spending $137 million on the film in only made $32.1 million domestically and $85.1 worldwide; Equaling grand loss of around $52 Million. That’s almost twice that of the entire budget of Resident Evil the film. 

It’s hard to know why one film made it and another flopped. Maybe it’s because Sony doesn’t own the complete rights to the Final Fantasy Series and the two haven’t always had the best relationship. And somewhere along the way it takes true synergy to make both products sell. Regardless make sure that before you go see a film about your favorite childhood video game you know that every second you watch is a second the company is trying to sell you something. 

Thursday, November 10, 2011

Microsoft the Machine

In 1975 a little company was formed that would one day become a juggernaut for the multimedia age. Microsoft in its first year had three employees: Paul Allen, Bill Gates, and Ric Weiland. Allen and Gates started the company after making its first project MICROSOFT BASIC for the MITS Altair 8800. MITS (Micro Instrumentation and Telemetry Systems) used BASIC as its operating system and by the end of the year the company made $16,005. Roughly 30 years later Microsoft’s revenue had become $36.84 billion with a staff of 57,086.

Bill Gates once said, "Whether it's Google or Apple or free software, we've got some fantastic competitors and it keeps us on our toes." Which sounds good but when you look at the numbers it would seem that Microsoft tends to walk the line of a monopoly for operating systems. And for the most part it would look like it succeeded in controlling the market. The computer savvy person may have heard of Linux, an operating system that controls around 5% of the market. But this software is a free and open source, meaning that its corporate structure will never rival Microsoft. Another “competitor” for Microsoft is Apple Inc

Microsoft and Apple's competitive relationship is interesting due to the fact that even Apple doesn’t consider its business marketing towards PC users. This is evident to its “I’m a Mac, I’m a PC” marketing. What this means for gamers is that you’ll have to turn to Microsoft for your gaming needs since the history of gaming shows that the PC tends to release titles first before the product ends up on a Mac.

Microsoft is a publicly traded corporation lead by a Board of Directors. These nine men and woman consist of: Steven Ballmer, Dina Dublon, Bill Gates, Raymond Gilmartin, Reed Hastings, Maria Klawe, David Marquardt, Charles Noski and Helmut Panke. These directors oversee sixteen other officers in charge of various committees; some of which deal with software architecture and others with sales in Europe, the Middle East and Africa regions. This just goes to show how Microsoft extends around the world.

Some of these members have an interesting history. For instant Reed Hastings is the Founder, Chairman and CEO of Netflix, Inc. This appointment was in 2007 and even though the service doesn’t use videogames as a product the consumer can still find synergy between the two companies. A big thing about Netflix is its ability to stream media. Netflix streaming has become so big that a study has found that 1/5 of broadband customers use the Netflix instant video service. Microsoft Silverlight is the program used by Netflix in order for its customers to watch streaming movies and television shows. This may not be a problem except for PC users who operate on a program like Linux. It turns out Netflix doesn’t have a Linux compatible player; meaning that the small fraction of people who use Linux are again alienated. 

Besides Netflix Microsoft has its hand in the pockets of at least one major banking company. Charles Noski is the Vice Chairman of Bank of America Corporation. This relationship is troubling since in 2006 Microsoft was voted to be a company at the bottom of the list of trusted electronics brands. This is odd considering that its operation systems account for over 80% of the market. Combining a company that owns the market that is not trusted with ties to one of the biggest banks in the United States screams bad news. It might not be too long before we are all hailing out Microsoft overlords.

Tuesday, November 1, 2011

Video Game Ads

In any media industry it’s all about getting your product to the consumer. And of course advertising is the way to do that. A single cross-platform game can spend huge amounts of money on advertising. Battlefield 3, a military first person shooter owned by EA, has spent $45-$50 million before the game’s release date. But spending money isn’t the only way a game like Battlefield 3 gets advertised.

Much like Hollywood films are reviewed by critics before their release, games are reviewed the same way. This can be done in the style of a hands-on article, or in a more numeric fashion for example a Metascores. Like movie reviews this can be a way to spread awareness through word of mouth about how great a game is to increase its sales before the game is even released. In the case of Battlefield 3 it has been reported that EA may have withheld copies of the game in order to boost the games score resulting in a greater number of “Day One” sales. If an allegation like this is true than it is a blatant attempt of the gaming industry manipulating their consumer without their knowledge.

In today’s market in-game ads seem to be the next big thing. This is where a game can inflict on the player an ad that occurs in the game world, for example a billboard that reads McDonalds or a truck with Coca-Cola logo painted on the side. The current budget for in-game ads in the gaming industry is $3.1 billion. And by the year 2016 analysts have determined it’s going to be closer to $7.2 billion
However, other reports from Microsoft say they’re abandoning in-game ads. Even if this process is abandoned the synergy between products is currently in games. There have even been studies to show that in-game advertising is more effective than television commercials.

Something unique about gaming culture is that gamers will actually pay to be exposed to advertising. What I’m referring to are gaming convention like the Tokyo Game show or Gamercon. I’ve even had the “pleasure” of both working and attending a convention in Seattle called the Penny Arcade Expo (or PAX Prime). This massive gathering in nerdom contains tabletop gaming, panels from members of the industry and wall-to-wall advertising. 
Battlefield 3 was there with their game demo, a military decorated Humvee and a $20,000 tournament where players could play levels from the game before it was released. Of course as it turns out no one got to walk away with twenty grand but I witnessed a young women walking away with what looked like a brand-new PC under her arm. The gaming convention is further proof that people across the world are willingly exposing themselves to advertising even at $35 a day.

But besides the game franchises as well-known as Battlefield there were more games being promoted at the event than you would have time to experience in a single day. Some of these games were complete unknowns but so prominently displayed that you would have expected they were announcing the Second Coming. The most prominent was a game called Fire Fall, a free-to-play online game. 
Fire Fall had banners and demos just like all the others but as you entered the main expo hall you were greeted by an enormous screen that seemed to take up the entire room while blasting the game’s trailer on repeat. This relates back to advertising since these “free-to-play” games gain income from advertising to turn a profit. Furthermore pointing out that even with the title of free the consumer is still being exploited by exposing them to advertising.

Most likely the reason gamers want to expose themselves to this kind of mass advertising is so they can gain a sense of being part of the industry as a whole.They can't all be developers or play-testers but they get to experience it before most of the world does.

And all of this exposure to in-game ads could mean further manipulation of consumers. Imagine playing a video game filled with ads. In this game you die and have to repeat the same level over and over, basically forcing yourself to spend hours staring at let's say a McDonald’s ad. No matter how much willpower someone has after that much time staring at an ad they might just get up and get a burger.  These ads can be seen to use gamers as a audience commodity. In which gamers are being sold to advertisers.

Thursday, October 20, 2011

The Console Wars

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Video games are a huge part of mass media in the United States with 67% of all households playing video games. And if you thought that number is due largely in part to the youth of America I have some bad news.  In 2010, it was discovered that 49% of gamers are between the ages of 18 to 49. That means that the people who play the games for the most part have the income to buy them.

In 2009, it was calculated that the United States video game industry made $10.5 billion in revenue. This money largely comes from games in two groups: computer games earning $.5 billion and games played on consoles earning $9.9 billion. For such a young industry it’s fascinating to point out that there is already an oligopoly in the field. It was in the 70s that improvements in computers made the gaming industry possible and by 1989 Nintendo already had 90% of the market. A feat that is doubly astonishing: from 1977 – 1990 Nintendo only released two types of consoles: the Color TV Game series and the Nintendo Entertainment System/Nintendo Family Computer (U.S./Japan). But since then the video game console war has split into three groups: Xbox, PlayStation and Nintendo.

These three companies are owned by global superpowers. Xbox is owned by Microsoft, which in 2006 owned 96.97% of the market for operating systems. PlayStation is owned by Sony which has its hands in just about everything in mass media: music, film and television.  Nintendo is privately owned but even without an umbrella corporation the gaming company has the ability to thrive.  This oligopoly of the three companies can affect the consumer when it comes to pricing the hardware. For example if all companies feel that no price reduction is planned for the future then all companies will continue to keep their price fixed. 

At the same time this competition between the three companies has lead to some crazy innovations in the industry. In 2006 when Nintendo’s Wii’s motion control came out Nintendo was able to tap new markets; putting the other companies at a disadvantage.

For so long the console industry was seen as only targeting younger males but with the Wii there were reports of nursing home patients playing Wii bowling. An article by BusinessWeek tackles the topic of Top 11 Video Games for Fitness. It’s hard to believe that there are video games that promote fitness at all let alone a top 11.

After 4 years of Nintendo exploring this new demographic PlayStation released the Move and Xbox released the Kinect. And if you think this is 4 years too late for the other companies to have any sort of innovation on this type of technology you’d be wrong. In the case of the Kinect there is research under way to use its capabilities to help the blind see.  Not only can you get healthy now playing video games but it might “cure” your disability. 


Developers in the gaming industry can be broken up into three categories. 1st party developers are simply developers that are more vertically integrated. Meaning they both make, publish and provide the sole hardware for the game. We can see this in Nintendo’s business model the most with franchises like Mario or Donkey Kong. This type of development makes it easy for the company to do cross promotional games like Mario Kart since they own the rights to all intellectual properties. 2nd party developers tend to also make games solely for a certain console but these developers are independently owned. 3rd party developers are a little different in the fact that they’ll make cross platform games. Meaning they’ll make a game that will usually be released simultaneously for Xbox, PlayStation and Nintendo. 

Consoles aren’t the only way the video game market is growing, there is also growth in mobile device gaming. With yet another new market comes even more profit. Altogether it is estimated that by the end of this year the gaming industry will earn $74 billion and by 2015 may reach $112 billion

Gaming culture seems to be an ever-evolving thing. What was once two paddles and a pixel has become a plethora of genres that anyone no matter the age can enjoy. This means that as consumers we are at the mercy of what these companies want to sell us. And although in the end the individual will choose what to buy our choices can be slowly shaped by the developers. For example the upcoming game Mass Effect 3 will use the Kinect “…to ‘augment’ the experience.” Although the device is not necessary to play the game fans of the series will have to purchase the Kinect if they want the full experience of the game. And in purchasing the device that a fan of 3rd person shooters may have never needed before the individual is being shaped.

Consoles aren’t the only way the video game market is growing, there is also growth in mobile device gaming. With yet another new market comes even more profit. Altogether it is estimated that by the end of this year the gaming industry will earn $74 billion and by 2015 may reach $112 billion.

Gaming culture seems to be an ever evolving thing. What was once two paddles and a pixel has become a plethora of genres that anyone no matter the age can enjoy. This means that as consumers we are at the mercy of what these companies want to sell us. And although in the end the individual will choose what to buy our choices can be slowly shaped by the developers. For example the upcoming game Mass Effect 3 will use the Kinect “…to ‘augment’ the experience.” Although the device is not necessary to play the game fans of the series will have to purchase the Kinect if they want the full experience of the game. And in purchasing the device that a fan of 3rd person shooters may have never needed before the individual is being shaped.