Practice 2012: Dan Cook on Generation of Value

Dan Cook, founder of Spry Fox and creator Triple Town and Panda Poet, gave a talk about efficiently generating value for players with the least amount of development time.

Presentation

• Dan is concerned with how games can efficiently add value to the world. The two key terms here are "efficiently" and "value."
• Looking at the cost curve of game development, you can see that games used to take two developers and $40,000 to make a game, but now it takes about 100 developers and $40 to $80 million. Expensive projects have a tendency to be conservative.
• Dan lists technology in order from least expensive to most expensive -- Flash, paid mobile, Steam, free-to-play mobile, console digital, and console retail.
• Dan uses a "development years : quality hours" ratio as a metric for determining value of his games.
• He asks players to give his game a fun score on a scale from 1 to 5. He considers 4 and above as positive, and under 4 to be negative.
• Designers have huge responsibility to create quality play. Dan was determined to keep the development years fixed for his games, but improve quality hours.
• With Bunny, Dan tried to increase value through media. Bunny is a game that's the harvesting portion of a real-time strategy game. The problem with media is that players burn through the evocative stimuli like crazy. Developers end up on a content treadmill, continually making more content so that players will stay engaged with the game. As developers make content, players consume content, and it ultimately results in a 1 dev year : 2 quality hours ratio.
• Bunny was just mind candy for players and it ended up consuming a total of 1227 years.
• With Steambirds, Dan tried to increase value through capital goods. People like "stuff" so create lots of stuff for people to unlock and collect. There is economic value in these goods, as they help players earn more currency so that they can get even more goods. In Steambirds, players earn currency to collect planes which help them earn more currency. The problem with capital goods is that the game ends up with diminishing returns. Each additional plane added less value and the play space of fun was muddied by a lot of goods that were not fun. This results in a 1 dev year : 10 quality hours ratio.
• Dan then decided to "screw it" and use math to reduce the number of capital goods that you needed to add. In Triple Town, players can obtain amazing high level structures, but the road to get there is an exponential curve. As a result, level 30 items take longer than the remainder of the sun's life to earn. While this results in a 1 dev year : 20 quality hours for casual players, it actually negatively creates a 1 dev year : -5 quality hours for players who like to grind.
• This is similar to the story of the origin of Chess. The king offered to buy Chess from the creator. The creator agreed if the king would pay 1 grain of rice for the first square of the board, 2 for the second, 4 for the third, 8, 16, 32, and so on exponentially. The king, not well-versed in math, agreed to the deal. Afterwards, he realized that it resulted in millions of grains of rice, more than the kingdom even had. Enraged, the king executed the creator.
• With Triple Town, Dan wanted to add value through skills, a human capital. Triple Town is a single-player tactics and organizational game. There is a whale player named Stephan who has a 62 million high score. The high skill barrier makes about 90% of players drop off, but for the remaining 10% like Stephan, there's a 1 dev year : 100 quality hours value.
• However, some players write "improving Triple Town skills really doesn't count." They end up accomplishing nothing since the skills don't translate to the real world.
• Dan tried to add more value through status. He implemented a leaderboard to Triple Town. This fundamentally deeply ties to the real world since people want to show off their skills to their friends. This creates a 1 dev year : 150 quality hours ratio for top players, but negatively creates a 1 dev year : -50 quality hours for people with low scores. It intimidates casual players and causes immense psychological stress. Leaderboards help some people, but are killing the rest. Studies have proven that normally smart people act dumber in the presence of "high status" people.
• Finally, Dan stumbled on a value engine when he created value through trade. Capitalism creates value. Trading increases total value of all items since excess items can be traded for wanted items. This is also an transformative act. If a player with hot dogs traded a player with buns, they can both form a more complete item. This is a non-zero-sum act and a mutually beneficial act.
• In Realm of a Mad God, the developers simply added the feature to drop items on the ground. Players themselves created a trading subculture. There was an explosion of emergent cultures from trading norms and languages to unofficial currencies and trading houses. There were also advocacy groups that would lobby for or against changes that the developers were about to make. There were trust networks that were formed to determine which players were fair to trade with.
• The emergence of these subcultures blew Dan's mind. What if we're creating these games wrong? We shouldn't think of them as these packages that we build and release, but as engines and its players as the energy cells that powers the emergence of systems. Realm of a Mad God grew out of a hobby and became a lifestyle, resulting in a 1 dev year : 500 quality hours value.
• Minecraft is a horrible piece of media. It has ugly graphics and a bad plot if any at all, but it's an amazing value generator. The ability to create cultural artifacts, build things out of your own imagination, play with friends, and learn while playing with parents make it a value engine.
• Community generated narrative, or fan fiction, is also a great value engine. It turns out that Bunny, while not a very successful game, had characters that resonated with its players. The players culminated in forums and created a bunch of fan fiction.
• We should think about more engines like creative tribes, sports, governments, and religions. Instead of thinking about game development as Creator --> Content --> Consumer, we should think of them as Creator --> Engine --> Community --> Culture.
• Contents of an engine include building positive relationships, mutual benefit, persistence, specialization, working better with a group, shareable artifacts, and most importantly, non-zero-sum relationships.
• Engines are still games and still need scaffolding. Tweaking culture feels like being a "dictator gardener." You are in control of an autonomous amorphous entity.
• Millions will build communities, culture, and art around our games. We are creating legal systems for these worlds.
• Small studios should not waste time making media or content, but just rule sets. This is an efficient use of both the designers' and the players' time.

Question and Answer

• Mods have existed for ages and developers releasing tools like Hammer and the Team Fortress 2 hat system will further instigate them.
• Realm of the Mad God outsourced most of the art to players since pixel art is easy to make. It resulted in a huge net positive since developers get free art and players feel ownership about their work.
• Dan is not concerned about creating short one-off experiences like Dear Esther. However, he thinks the conversation about Dear Esther, in many ways, has more value than the artifact itself.
• Positive psychology has gotten away from the study of "happiness." Hazing is a horrible experience for anyone, but it also has an extremely positive effect on group identity.
• "Fun" is not the only positive value. There's also value in the "potential activity" even if you don't end up doing it. For example, someone can watch a commercial of an outdoorsy person with a hummer and end up buying the hummer without ever going to the woods. But the ability to go to the woods if he decides to is valuable.
• The "big bang revenue model" is to spend a lot of time developing a game, release it, get two weeks of revenue, then see a huge drop off. Developers should look for a constant stream of revenue.

Topics to Make Your Developer Blog Interesting

At the game company that I work for, we've discussed internally about starting a new blog to build our studio brand and more importantly, attract new hires. We've had two brainstorms about topics that we think the blog should cover and as with all brainstorms, many out-of-the-box ideas came from it. Thinking about this more, I think it's not really a big secret about what makes a good developer blog.

To start, who is the target audience of this new blog? I think it can be broken down into three categories. The first are people who have talent but aren't currently in the games industry. To attract this group as hires, we just have to show them why games are the industry to be in. Thankfully, we have so many employees who are passionate about games. We live and breathe games. We should write about why games are important to us. We should show the awesome games we're working on, the amazing art we produce at the company, the fun game challenges we do, and cool tech demos of our game engines.

The second category are people who are in the games industry, but don't have that superstar talent yet. Attracting this group to our blog is easy. We have to educate them. Personally, I only ever spend time reading another company's blog if it's informational or educational. I'm a busy man so I'd only dedicate my time to reading and following a blog if I feel like I can walk away learning something new or thinking about something in a new way.

Fortunately, we have a lot of great talent in our company. Game designers should write about game design theory, dissect a game that they're currently playing, or walk through the reasons they've made a certain decision in our games. Artists should write about art techniques, or about the many iterations of art designs that a single game went through and the reasons why those changes were made. Programmers should write about programming problems they've encountered and the clever solutions they find, or introduce new tools that they started using. Analytics and revenue teams should write about how data drives game design or what kind of UI has been proven to monetize. Producers can write about their experiences with scrum or tips for managing a team.

There is such a breadth and depth of knowledge to be shared. While I understand that many things of the company are disclosed for contractual reasons, close-to-full transparency and sharing of knowledge is the best thing your blog can have. Ronimo, the developers of the fantastic Awesomenauts, has a great developer blog written by the lead programmer that is very transparent about their programming problems, art iterations, and even unreleased game concepts. I'm subscribed to over 600 blogs and this is easily one of my top five blogs to follow.

Finally, the third category are people who have the talent and are in the games industry, but they're just with another company. To attract this group, we have to show them what we offer as a company that others don't. Most certainly, the best thing about the company is that we empower employees to have creative freedom and give them many avenues to express themselves and have their voices heard.

We run a weekly brainstorm meeting where we tackle design challenges a project is facing. Every employee can attend the meeting and throw out ideas, no matter how crazy or farfetched they are. As we always say, there are no bad ideas in the brainstorm. We have an idea submission process where any employee can submit a snippet of a game idea and then a dedicated team develops a prototype of the idea in two weeks. If the idea is great, it might even turn into a full-production game for the world to play. We also run annual game jams where the entire company steps out of their everyday roles and get inspired to make off-the-wall games. Not many game companies give their employees the channels to have their creativity expressed, so that is definitely a strength of ours that we can expose.

Kickstarter Stories

With Double Fine's Kickstarter success, the website has become the go-to place for aspiring game developers to fund their ideas. This panel, held at Polytechnic University and moderated by Katherine Ibister, discusses the pros and cons of the website, as well as the process of raising funding through Kickstarter for game projects.


Introductions

• Michael Astolfi is the game designer of Blindside, an audio adventure with no graphics and played entirely with sound. The game went up on Kickstarter with a pledge of $7,000 and was funded with twice the amount.
• Michael Consoli is the game designer and developer of Against the Wall, a Unity3D game where you navigate up an infinite wall of large bricks. You can extrude bricks from the wall to jump on them and colored bricks come with specific limitations or power ups. The game was funded with $8,400 on Kickstarter.
• Alex Thomas of Stoic is the game designer of The Banner Saga, a viking-based adventure game with role-playing elements, interactive dialog, and turn-based strategy combat. Stoic is made up of former Bioware employees. They formed in January 2012 and pledged for $100,000 on Kickstarter. They overshot their goal with $720,000 in funding.
• Wade Tinney, CEO of Large Animal Games and NY chapter coordinator for IGDA, is about to launch a Kickstarter campaign for Nomsters. Large Animal Games started in 2001 and has developed over 100 games. They typically work with a publishing partner, but they want to develop their own individual IP. Nomsters is an iOS and Android game built in Unity3D by a 5-man team over the last couple of months. The game has a pinball-meets-pool mechanic with various ball-shaped characters.
• Cindy Au, community director for Kickstarter, was also in attendance at the panel. Kickstarter launched in 2009 and has recently been huge for the games community, funding up to $20 million for games. It is a good place to test ideas and find out immediately if there's an audience for your game.
• Jerry Hultin, president of Polytechnic University, provided a keynote before the discussion began. NYC gives angel funds for the right idea and about $100 million of venture money goes into technology. He believes gaming is good for education and sees big markets for it in India and China. Only 2% of India get educated and he wants engineers and game developers to solve that problem. Polytechnic University started building the Game Innovation Lab in 2006 and in the near future, NYU will move all its gaming departments to Brooklyn.

Panel Discussion

• Why choose Kickstarter? For Blindside, the developers started on PC/Mac but wanted to add gyroscopic controls, which requires an expensive license from Unity, so they turned to Kickstarter to get extra funding. Wade wanted freedom from publishers for Nomsters. In general, all panelists agree that Kickstarter allows you to see if you have an audience for your game before you build it. Use backers as a marketing tool and gauge the success of your product. Publishers usually spend money to find that out, but Kickstarter allows you to do it at almost no cost. 
• Are there additional purchasers for the games after release or has everyone who's interested in the game already contributed to the project in Kickstarter? Cthulhu Saves the World was funded on Kickstarter for $6,800 but sold 300,000 copies after launch, so there's a good chance there's an additional audience not involved in the Kickstarter.
• Against the Wall had a playable alpha build when the Kickstarter campaign started. This was to prove to backers that he can make a game, even without industry experience. The game was covered by the press, namely Kotaku, and was able to get funded.
• The Banner Saga's campaign highlighted the fact that the developers were industry professionals and they were able to get more press from that.
• What are some general tips for starting a Kickstarter campaign? Be prepared to talk openly about your project and support the campaign. Constantly updating your backers with news chews up a significant amount of time. Set up your own forums after the campaign has ended so you keep your community talking about the game.
• Do they have fears of product failures and not living up to backer's expectations? Social pressure from backers is very motivating. Also, backers can change their commitment to the project at any time.
• To run a Kickstarter campaign inevitably means putting an unfinished game out to the public. Do they have concerns of people stealing the ideas and beating them to the market? Making the game public is pretty much putting it on the market first. If you come out with the idea first, even in this manner, people would support you. It's not a big worry concerning other game developers stealing your ideas. Most developers already have a road map of games in their pipeline and it's too expensive to shift gears.
• There are instances of Kickstarter projects where the creator backs their own campaign to get through the threshold for funding. Getting covered by the press is extremely important to drive people to the campaign. How do you get press and increase discoverability of your projects? According to the panelists, the community and friends are more important to the virality of the campaign than the press. Also, having zero backers is validation that the game idea is not very good.
• If the project is not funded, you can still talk to your backers. You won't get backer reports like a funded project would, but you still have contact with your dedicated base.
• How do you put a freemium game on Kickstarter if the model is that you pay upfront for the game? The Banner Saga and Nomsters are both freemium games. Nomsters will offer backers a package with in-game currency and no advertisements.
• What are the panelists' favorite Kickstarter rewards? Usually a physical prize or the chance to be in the game. However, when you offer a physical prize, keep in mind that it would eat up a bunch of your funds. The prize that people crave is involvement in the game development process.
• What are common mistakes of Kickstarter campaigns? Overshooting and setting high goals are common mistakes. You have to be realistic about what you need and be patient. You need to frame what the interesting thing about your game is and make sure to tell a story to the audience. Present yourself; you are your greatest asset.

Death of the Movie Theater

We always talk about how the game industry imitates the movie industry, from cutscenes to product placement to its maturation, but I think the converse is true when it comes to the future of the movie theater. Earlier today, I went to see 10,000 BC, which is #1 at the box office, and I was surprised to see how empty the movie theater was. Where was everyone? Were they at home playing Smash Bros.? That was a reasonable prediction seeing as how games were replacing movies as people's favorite past time. The release of Halo 3 led to the worse month in box office sales since 1999 and Hollywood is already afraid that Iron Man would lose ticket sales to Grand Theft Auto 4.

Sitting in a half empty theater for a big budget movie made me think that the movie theater is going to go the way of the arcades. By that, I mean movie theaters will start to die out until they adopt gimmicks that cater to a niche audience and leave them barely alive. Back when Street Fighter 2 came out, arcades were booming. Everyone was at the arcades... it was the cool place to be. But over the years, arcades lost their audience and many started closing. I remember frequenting five different arcades in my city and now there's only one left. But what made the arcades die out and why are movie theaters following the same path?

There are three main reasons. The first is because the home experience became much more competent and eventually exceeded that of the arcades. In the beginning, arcade cabinets provided superior hardware and the console ports often had less features or were downright terrible. But when console ports became equal to their arcade counterparts and eventually started including more features, the arcades lost their appeal. Likewise, in the movie industry, high-definition television and surround sound systems have been infiltrating homes, providing a very high quality experience that rivals the movie theater.

When arcades realized that they were losing to consoles, they started introducing gimmick-based hardware to differentiate themselves. Thus came the age of Beatmania, Dance Dance Revolution, and all those other games that make you work up a sweat to have any fun. Now that the Wii, Playstation Eye, and Rock Band are paving the way for gestural gameplay at home, I don't see any point for arcades to still exist unless they come up with another big innovation. With the movie industry, my prediction is that they'll need to rely on gimmicks as well to stay alive. Expect to see more movies coming out on IMAX 3D and new stuff like interactive, vibrating seats that we normally see as amusement park rides.

The second reason why arcades died is that people grew out of them. Arcades were a great place to play against strangers and meet other gamers, but now we have the Internet and online gaming for that. Not to mention that meeting people at the comfort of your own home is a better experience than being surrounded by lots of smelly, sweaty nerds in a dim-lit room. Likewise, watching a movie on your big screen HDTV from your couch is a more comfortable experience than having the guy behind you constantly kick your chair while someone up front is talking on his cellphone. By the way, despite how empty the 10,000 BC theater was, I still managed to get a group of commentators, a crying infant, and a jerk with a laser pointer.

Finally, the third reason is because the consoles were getting media as quickly as the arcades were. At one point, you had to wait forever for your favorite arcade game to get a console port and most of the time, you weren't even sure if there was a console port coming. But then console ports became only a few weeks wait and eventually, consoles became the premiere launch platform for every game. We're seeing the exact same thing in the movie industry. Lots of movies are direct-to-DVD while movies that are released in theaters get a home port much sooner than before. In fact, Atonement just came out on DVD and Blu-ray, while the theater next to where I work is still showing it. Something like that never happened two years ago. It further proves my point that the movie theaters are going to diminish like our beloved arcades.

From the Movie Model to the Television Model

I'm probably the only person in the world who doesn't download music. I don't own an mp3 player, as I still have a bulky CD player in the side pocket of my winter jacket. But every single person I know downloads music and none of them does it through legal channels. I try to convince them otherwise, but to no avail. "Look at those stars," they tell me. "They're rich despite all the piracy that's going on."

Sure, the rock stars are rich because they still make a lot of money selling concert tickets. But the production houses, the ones who spend the money doing the promotions and making the artists look good, lose millions of dollars each year due to piracy. As with any big production house, they would stop taking risks and start cutting the not-yet-famous, upcoming bands -- the bands that a lot of my friends listen to. Despite my efforts to convince them to the light side, piracy is here to stay. Evidently, it's incredibly hard to compete against free. But the music industry isn't going to die. The music industry is going to change. Perhaps it would react the same way the Korean music industry reacted to piracy and saturate music videos with advertisements. Perhaps we'll see a lot more licensed soundtracks in other media. Or maybe they'll use video games like Guitar Hero and Rock Band as platforms to sell music.

The video game industry is dealing with a similar situation. Developers are wary of the rampant amount of piracy on the PC platform, as evidenced by recent reports of piracy on Call of Duty 4 and Crysis. As such, many companies are moving development towards consoles as they generally have much less piracy; that is until all the modders and pirates move onto the console platforms. But like my predictions of the music industry, I think that video games have to take a similar approach to respond to this problem in any successful manner. They will need an increase use of advertisements.

I see that a few companies are already taking this path. EA's Battlefield Heroes will employ their new "Play 4 Free" model, in which the game will be available free for download with revenue generated from advertising and micropayments. Since in-game advertisements would look out of place in Battlefield's World War II setting, the advertisements will be used in the menu screens before matches. Likewise, Id Software is releasing their web-based Quake Live under their "freemium" category, which will use in-game advertisements for revenue. Finally, Blizzard's Starcraft II, while not free, will also be using advertisements to maximize revenues.

Advertisements have always been detested by players, but if they're playing a high production game for no cost, I don't think they would mind adverts at all. Nevertheless, I'm not convinced that a couple of ads in-game or in the menus are enough to cover the cost of making these big games. The fact of the matter is this approach is too similar to the film model, in which advertisements are shown before the movie starts and in-film adverts are subtle enough to be completely ignored. Films do not make much revenue from their ads, so why would we expect games to do so while using the same model? Advertisements need to be more blatant for them to work.

The web is a good example of this. Every standard website you go to has banner ads, usually an image or some interactive flash that is displayed at the top of the page and on the side. We've become so familiar and accustomed with this that we've learned to completely ignore it. This was the subtle approach. Nowadays, most websites employ more blatant techniques such as pop-up ads, hover ads, or interstitial ads where you sometimes randomly load a web page displaying nothing but a large advertisement.

Interstitial ads are very much like television commercials, as they obtrusively interrupt your experience. But people can still enjoy a website with interstitial ads and people can still become immersed in a television show with commercials. Can video games adopt a television model and still provide an immersive experience? What if we put one-minute commercials during loading screens or better yet, at cliffhanger moments during the storyline much like what television does? The advertisement would certainly be more effective, but would it remove the player from the virtual world so far as to ruin the entire game? I don't have answers to these questions, but I'd like to think that in-game commercials could work.

Drawing more from the television parallel, I think it would be interesting if consoles adopted a cable channel model. Even though the PC gaming industry is in disarray, so much that a PC Gaming Alliance was formed to remedy the situation, there is one massive exception to the rule known as Blizzard's World of Warcraft. Blizzard is making a fortune from this game not because of the number of copies it's selling, but the number of subscribers it has, which at last count was 10 million. This is a crazy idea, but what if players can subscribe to a game channel of their favorite company? For example, I can subscribe to a Capcom channel, where I pay a monthly fee to receive all their new games at no additional cost at an episodic magnitude and frequency. I'm not proposing this as a replacement to our current model, but as an alternative. Analogously, the television industry both airs their series and releases their shows on DVD.