Why are modern software companies so bad at selling software? Today I was looking at Scrum tools (or Agile if you prefer), and I was struck by how hopeless some of their websites are. With some of these sites, I am sure that I could increase the sales of most of these companies by hundreds or thousands a year, just through basic principles of sales.

(and, obviously, HOWEVER you design your sales page, you should be using A/B testing to increase sales, conversion, etc. But A/B testing is no panacea: you still need the creativity and understanding to make the “big leaps” yourself)

Example: VersionOne

I’m going to pull out one example (by accident, the first I came across). Many others are much the same.
VersionOne.com

Before we go further, let me be clear what “kind” of customer I am. I’m currently looking for solutions for two commercial setups. One is for tiny projects on a case-by-case basis. This would be 5-seat licenses (worth up to $3000 at VersionOne’s current prices). The other is for a company-wide purchase of up to 30 licenses per annum (worth up to $15,000).

But, at the same time, my last full time job was running development for a large development studio. I was the primary reviewer and purchase-maker for software tools that were 50-person per annum immediately, and meant a commitment of up to 150 within 3 years. I’ve done a *lot* of this purchase-review process, on a lot of software.

My negative reactions to VersionOne’s sales are fairly consistent across the 3 profiles (although the reasons behind that are complex)

Landing page, from Google: the “don’t ask questions, you’re too stupid, just buy instead”, and “we love ourselves, we’re awesome” page

Page: http://pm.versionone.com/Trial_ScrumProjects.html?c-aws=trs&gr-tss&v-029abt&gclid=CNGTgsrEoaICFUcA4wod82WOwg

This has a *concealed* URL, so it pretends to be the front page, but actually lies, and redirects you to this page instead:

Ont this page, your website states it’s a commercial product, yet REFUSES to answer the single most important question: how much does this cost?

There aren’t even any LINKS to finding out about the product. It’s just “buy our product, or piss off”.

This page serves one purpose: lock the customer into a product they don’t want. You are “not allowed” to know the cost, you are only “allowed” to “signup now for a 30-day trial” – you have to commit yourself, and they’ll sting you with a price later, when you have no choice.

Word of advice: merely making something “free, for a few minutes, then I charge you” does NOT lower the customer’s barriers to purchase. For an ultra-long-term product like Project Management tools, it often has the *reverse* effect. The MINIMUM trial for a PM tool is “one project”. Most projects – using new tools – will need several months; 2 week to learn the tool, 10 weeks to run + launch + finish the project. The customer knows this; they know that a “30 day trial” is completely dishonest.

So, we use the navbar, and head to the “Product” page:

Product page: the “Want more info? Oh no you don’t! You’re too stupid, you’re just a customer!”

Page: http://www.versionone.com/Product/

I’ll sum up the stupidity and smug self-satisfied attitude of the person who wrote this page with just one quote, their final bullet point in the top-section:

“Accelerate agile adoption”

[hey! Look at that! I'm so clever - three words all beginning with "a"! They're guaranteed to buy now! I'm so sharp, sometimes I cut myself]

Sigh. Ignoring the “infographic” which has been screen-captured with a font-size of 2pts (i.e. literally physically impossible to read), we try to do something useful with this page: review the product (we’ve given up on pricing, for now – they obviously don’t wany anyone to buy the product, but maybe the product is so good we can force our way past that?)

Product page, part 2: the “we don’t trust you, we’ll spam you with marketing crap”

Page: http://www.versionone.com/Product/

(below the infographic)

Just look at that page. It has literally zero information about the product, yet it’s the “product” page.

Instead, it has paragraphs of marketing crap. There’s no other term for it; let’s look at the first example.

Bullet-point: “Product Planning”

What does this mean? Absolutely nothing. BY DEFINITION, this is a whole website devoted to project-management-planning software used on projects that create products. Why do you repeat this, in such a childish gross genealization, as if it’s a “feature”?

Ah, but … actually, that’s not necessarily true. Scrum is often used on projects that are NOT generating a Product.

So, in fact, this lazy marketing title has already told some of the target-customers: “Don’t use our product. Go away”.

Let’s look at the text underneath the bullet:

“Plan and manage your requirements, epics, stories, and goals across multiple projects, products and teams.”

What is this – Dictionary.com? Why are you patronising me by telling me what you think “Product Planning” means, as an abstract concept? What kind of project manager – or engineer – is so stupid as to not know what it is they do on a day to day basis, and to feel happy that you’re telling them?

I WANT TO BUY YOUR SOFTWARE, NOT LISTEN TO YOUR PHILOSOPHICAL DISCOURSE.

I suspect that the weak marketing person who wrote this copy thought it “looked nicer” to put features into a long sentence. Let’s look at that sentence, from a copy-writing perspective. It has eight separate phrases. EIGHT. The average sentence has 2-4. Concise sentences have 1-2. Waffle has 5 or more. This is a sales page; every sentence should be no more than 3 phrases. EIGHT! NO-ONE is going to pull useful information from that sentence.

Onto another problem with this page, for the customer who comes here: No screenshots. Anywhere.

OK. Take a deep breath. This is a company that, so far:
– wants to deceive us into locking-in to their product
– patronises us intensely
– works hard to hide features (check that “unreadable” infographic)

…but let’s put all that to one side, and drill down into the links from the Product page.

Features (1 of 8): “You can look, but don’t touch AND DON’T LOOK CLOSELY!”

Page: http://www.versionone.com/Product/Product_Planning.asp

Finally, if you follow one of the links from this page, you get to a page that contains some actual, concrete, info about the product. There’s even some screenshots!

Oh. BUT. You are “not allowed” to actually see the screenshots. They’ve been deliberately blurred-out a low-resolution, so that text is literally unreadable and there is NO WAY to judge the product. (NB: this is *after* you’ve clicked on the almost-full-size thumbnails in the page). They are then further blurred (to no purpose except to fit the Web Designer’s fetish for popup images) and embedded in the page.

Overall impression: this company knows it’s own product is not fit for purpose, and will do anything to stop the customer from finding that out until AFTER they’ve paid their money. Whatever you do DO NOT BUY VersionOne’s project-management software.

Final thoughts: First one is free

A decent usability person – or a really good web designer – would make huge sweeping changes to that site.

A flippant starter, something I’d personally try immediately (today): move the “see it; drive it; try it” buttons that hide in top-right of the site to CENTER STAGE, both on the Product page and the Google Landing page.

AND … I’d add a fourth button: “Buy it”.

What? There’s no “buy” link on this site? Yep. I think that eloquently sums up what a poor job this site does of MAKING MONEY FOR THE COMPANY.

(NB: and I *absolutely* would instigate A/B tests to prove – day by day, hour by hour – that my changes were having a noticeable effect on increasing sales to the site. If you don’t do that, then you’re just pissing into the wind. You have no idea, afterwards, whether your changes “worked”. See Sergio Zyman’s book for more…)

Where do these terrible sites come from?

I believe that these often-amateurish websites come from one of two sources (possibly both):

1. Expensive “Web Design” agency that only cared about making it “beautiful” without understanding a single thing about the reality of sales. In the example I run through below, dead giveaways include: Popup images that are only 15% larger than the thumbnails that trigger them; grey-on-white text; very small font-sizes. All those are characteristic of visual designers who know nothing about product sales.

2. A marketing team that’s worked for big corporates (multinational, public companies) and thinks that the most important thing in their job is to “clone” the website of “a real company – you know, like Microsoft”, and pretend to “be like the big boys”. They have no idea why those websites look the way they do, and don’t bother to ask themselves; they just blindly clone it. In the example below, dead giveaways include: 12 pages to describe a simple product where 3 would have been more than sufficient; hiding information at all costs; never committing to a list of features; using “freeform text” instead of simple “bullet points” to describe the product.

IBM, 1964:

How is it that this tiny company of 34 people —including the janitor — can be beating us when we have thousands of people?

…to which Cray reportedly quipped:

You just answered your own question.

(and, incidentally, FUD – a phrase I associated with the 1990’s and linux – apparently dates back to the early 20th century. It puts in an appearance here, in the 1960’s, and lead to CDC winning a lawsuit for $600 million. Nice. Can you imagine someone pulling that one off against Microsoft in the 1995-2005 era? Or Apple, today? I doubt it…)

Three things I have to say on this:

1. Mainstream games industry people question it’s value
2. Yes, of course it was worth it
3. What Would Zynga Do?

Mainstream games industry people question it’s value

I’ve seen a lot of people from the mainstream industry (i.e. consoles, PC games, handheld etc – eerything EXCEPT iPhone and Facebook) incredulous, unconvinced it was worth it. This was the case even with the rumoured $250 million valuation from a month ago (c.f. Nicholas Lovell’s post on that).

There’s also some discussion over at TheChaosEngine (private forum for professionals in the games industry) on the same topic, with similar levels of scepticism about the value.

The main reference points are traditional games companies and their sale prices. That’s where this goes wrong – and it’s symptomatic of something that hampers the games industry: a lack of understanding of the business side of games. For most people in the industry, this doesn’t matter – they’re making games, not selling or funding them. But for the people managing games companies, far too many of them need to get an MBA and learn the essentials of sales, marketing, revenue, and shareholder-value – and how that applies to their own day-jobs.

Yes, of course it was worth it

Reproducing some of what I’ve already written on TCE, since it’s non-public:

There’s three things driving the valuation of PF:

1. A solid business, in business-terms (c.f. Nicholas Lovell’s “6 reasons why Playfish is a steal at $400m”)
2. Quality content-producer, in games / media terms
3. Consistent success, in comparitive terms

Playfish is in the top 3 companies dominating the Social Games sector. They are the ONLY one of those companies that set out to dominate the SG sector – the other two happened purely by accident. PF was architected to take over this sector, and is succeeding at it.

From a game-design perspective, the entire business model for Zynga and SGN has been “keep bailing!”, and they’ve so far bailed faster than they were sinking (where “bailing” means “using marketing and sales ability to make up for severe product deficiency”). That might sound like I’m being derogatory – but compare it to all the “worthy” games companies who bailed *slower* than they were sinking; at the end of the day, who’s the smart one?

But good sales/marketing strategies are easy to dissect and clone, in a way that good content is not.

Part of the demand for PF is that a lot of people look at it and say: this is SGN/Zynga, except they make good games. Yes, they’re not 1st – but any idiot could take PF’s current position, throw $50m of marketing budget at it, and easily surpass Zynga. They will own this market, sooner or later – PF is fundamentally strong where Z is fundamentally fragile. (although Z’s “fragile” is still an order of magnitude stronger than most traditional games companies).

Just to be clear: I have a lot of respect for Zynga and SGN, they’ve achieved a heck of a lot. But they’re sharks. They’ve always been sharks. Comparing to modern standards of game-design, they’ve never had great product. Instead, they’ve been extremely canny, aggressive, vicious, and cash-driven – and they’ve shown how successful and profitable you can be with those things. If someone had asked “how well can you do with a weak content company if you’re exceptional on the business-side?” then these companies boldly step forth and demonstrate that the answer is: “very well indeed”.

But this is a new, novel market. Maybe there’s nothing special about PlayFish?

Well, apart from thriving in a new market against some of the toughest competition in the world, look at the comparitives. Compare PF with – say – Kongregate. That was founded by the ex TD of Pogo after years at Pogo/EA, and was expected to recreate the success of Pogo and expand on it (hundreds of millions of dollars revenue). They’ve fallen a long, long way short. PF was founded years later and is now doing perhaps 20 times the revenue (just guessing based on Kong’s last funding round and how long ago it was).

PF’s success *looks like* it’s “probably” no accident. IIRC (and I haven’t checked, I’m going from memory here, so I might be very wrong) this is the same management team that built and later floated GluMobile. Putting that into perspective:

1. these guys have ridden the wave of an emerging market to create on of the big successes
2. these guys started from nothing and ended up with an IPO
3. these guys then started all over again, from scratch, in a new market … and succeeded AGAIN.
4. …and they did it very quickly

What Would Zynga Do?

This, then, is the million-dollar question: who’s going to buy Zynga?

Zynga have followed a strategy of buying-or-burying every small competitor who came along. As I noted above, despite being rich, hugely successful, and growing fast, they have some internal fragility that PF has never had. Where PF *could*, in theory, get more aggressive, Zynga is already barrelling along flat-out on that front. Where PF has a good reptuation they can trade on, Zynga has a poor one that’s not worth much now PF is part of EA.

If it had been a smaller company that bought PF, maybe – maybe – Zynga could have afforded to try a reverse-takeover to hoist themselves up, and hold on to their top spot in Social Games.

But EA/PF is too complementary a pairing; together, they’re too effective for Zynga to get away with that. Zynga *might* have hoped, with a different competitor, that acquisition by EA would lead to a breaking-up of the company’s value. EA has done this many a time to other acquisitions: small companies vanish when eaten by big ones. But as I noted above (and as Nicholas referred to when claiming that PF’s team could “turn around the tanker” that is EA), PF’s team have enough experience and personal wealth that it is very unlikely they’d disappear inside EA. They *might* retire (despite the golden handcuffs, many EA acquisitions have lead to de-facto retirement of their founders) – but PF is so young as a company that I doubt they’re tired of it just yet.

Looking back at Zynga, this seems to be a company that sees itself as the Alpha Male. I can’t believe they’d settle for second place. So, Zynga needs to be bought. And, unlike PF, Zynga may actually benefit from being dominated by their acquirer (try and wipe out some of that bad reputation; perhaps fundamentally alter the internals of the business, make it into a good content-generator? Where PF is adding Zynga-esque marketing and sales ability, could Zynga add PF-esque content-creation/content-quality ability?).

Who?

I’ve no idea :).

But, looking around, Zynga has greatly underperformed on iPhone. There are a lot of media and consumer giants around that expect to have no problems making lots of money on iPhone. Maybe that would make a good deal, someone already exploring, or set to explore, iPhone, who doesn’t need Zynga, but who could expand Zynga on to iPhone in a huge way. That could even let Zynga save some face in the deal (”there’s nothing about our business approach we wanted to change, it’s just that this was an opportunity to dominate TWO platforms instead of ONE”).

• It’s a friendly group of people, and we seem to get along well
• Alex Crouzen picked up Objective C and OpenGL, and Shi Daniels threw together some wall and floor textures. That gave us a very basic “here’s some walls and floors, running in OpenGL, on an iPhone”, but no walking, no movable camera, no interaction, etc. It actually worked! :)
• Brian Green and Wendy Despain (both games industry pros) joined up and did loads of great game-design and plot work. As a group, lead by them, we generated lots of pages of good design – although (my fault) the remit probably wasn’t as well constrained as it should have been
• Lots of good ideas and commentary from the other people in the group
• We setup a private wiki, a 24-hour skype group-chat, and a private google group, and had some pretty good communications going between the active contributors
• I picked up Alex’s code and rewrote the underlying OpenGL stuff (I’m very rusty; haven’t done any OpenGL for > 4 years), but got it integrated with iPhone GUI stuff, so you could use drag gestures to move around the map in 3D, and added some programmatic map generation

Bad news:

• A lot of people (I think more than half, in the end!) had to step back – or even drop out – due to time constraints / external commitments (work, life, etc). Ultimately, through no fault of any individual … our team was somewhat gutted before we’d got beyond the first milestone :(
• …as a result of that, and some mistakes I personally made on the project leadership side, we stagnated, and the project has ground to a halt with too few active coders

It’s not clear where we’ll go from here, but I’m now looking at whether I can take some of the lessons learnt from this and start it all over again, do it better, more simply, and more clearly directed, as a commercial project.

One of the biggest mistakes I made personally is that I tried to do this as a volunteer project – but simultaneously tried to do it unmanaged, Scrum-style. You could fairly argue that this was foolish, given that I’ve run a lot of volunteer projects before, and they have *always* needed huge amounts of vicious, aggressive project management. Not because people are lazy or dumb, but merely because volunteer projects are always the lowest item on people’s list of priorities (way below “day job” and “family”, for instance – which is fair enough).

But I’ve got so used to working this way now (team-based, distributed responsibility, etc) that I ignored my previous experience and actively avoided aggressive PM.

I’m putting together a detailed project plan now – as if I were doing this commercially. i.e. working it out based on me personally paying other people to work on it – it may not be viable / possible, but if nothing else it’s a good practice to plan to that level of diligence. It’s just a theoretical exercise right now, although I’m sharing it with some industry colleagues and some professional coders and artists, seeing if it’s convincing enough for any of them to want to try it.

One of the interesting things I’ve noticed already while writing it up that way is that – if I have to pay people – I’d start with a much smaller team, almost entirely coders, and only bring on other people once we have (*if* we have…) a substantial working prototype. Which is the opposite of how I was taught to make games originally. But it’s exactly how I was taught to do commercial startups. This could be interesting…

PS: here’s a screenshot of one of the first renders:

Casual, assumed, free internet access is now ubiquitous (even if the access itself isn’t as operationally ubiquitous as services assume). I can’t even access half my music collection any more unless I’ve got a wireless high-bandwidth connection available (Spotify). The other half lives on my MP3 player (iPhone) – but is static, unmeasured, unconnected, and unshareable.

This is a problem. Right now, sitting in San Francisco, the city of a thousand broken, crashing, low-bandwidth, pay-per-minute (min charge 24 hours) wifi connections, next door to Silicon Valley, a world center of innovation that only exists because the right infrastructure here and the wrong mistakes elsewhere allowed it to form, it’s particularly on my mind. SF is a great example of what will push the next Silicon Valley to happen elsewhere. A lot of people ought to be worried by that – and doing a little more about it.

In Brighton, my current (temporary) home city, the first repeated free wifi hotspots were set up – as I understand it – effectively as an act of charitable benevolence by “a couple of guys” (looseconnection.com/Josh Russell). They weren’t even rich, or old – just some kids doing something cool, and useful. Anyone could do this. Too few actually do. I’ve heard it suggested again and again (where are the mesh networks that were supposed to be ubiquitous 4 years ago?) by people in the UK – especially in and around Cambridge, in tech the UK’s closest replica of Silicon Valley – but always with excuses about why they aren’t doing it yet, aren’t able to until someone else does something else to make it easier for them. That’s crap. Just do it. Do it this weekend; what better are you doing right now?

Will Apple single-handedly save Wifi? Maybe. It could be the biggest gift of iPhone: that it finally turns the rest of the world on to building bigger, better, and above all FREE, wifi networks. Everywhere. Ironic, considering that’s exactly what will kill the fundamental device that drives the iPhone: the “cell” phone. Does anybody else remember that before we had cell phones we had hotspot phones, back when cells weren’t good enough, and were so expensive to use? So we go full circle, but this time with an ecosystem and a tech interconnection system (API’s, protocols, layers) big enough to support the worldwide rollout of such hotspots (well, and that’s what mesh was supposed to be about, right?)

But why would this happen? It doesn’t make sense … does it?

Skype is a great example. Sadly, it’s also overloaded with additional meaning that clouds the issue – because Skype is an internet app (good) that is mostly about phone calls (bad / confusing the issue).

Skype is now available on iPhone, and it’s a great, highly polished, iPhone App. It *works* (as well as anything can on iPhone – with the current version of iPhone Apple does not allow *anyone* to have their app listen for incoming connections and auto-start, so you can only “receive” Skype calls on your iPhone if you are not using any other app and instead are currently inside the Skype App.

But … the voice part only works over Wifi. This is the concession it took for Skype to be “allowed” on iPhone (NB: Apple allegedly forced the network operators to give away free / flat rate data in return for being “allowed” to sell network-locked iPhones; if Apple had also allowed Skype-on-3G/EDGE/cell network, then they would have caused people to stop paying call charges en masse. Although this is the natural future of cell phones, and everyone knows this, the network operators would probably assassinate Steve Jobs if he tried that today).

So, Skype is – effectively – a “wifi-only” application.

20 million devices cannot be ignored

But wait … there’s more. The iPhone platform has an installed userbase of almost 40 million handsets as of first quarter 2009 (yes, that’s only 20% less than the entire global sales PS3 and 360 combined; the iphone is already one of the top games consoles in the world; Sony (Computer Entertainment) is doomed, and Nintendo’s cash days are numbered, even though they’ll make loads of cash for the next 3 years – the DSi was defunct due to iPhone *before it launched*, so after those few years, the cashflow will drop off / vanish).

But … around half of those are not iPhones, but iPod Touch’s. This is very important to understand: the two devices are compile time identical, and *almost* feature identical. They are more similar than almost any pair of cell phones in the world, even ones from the same manufacturer. And by default all iPhone developers are writing code that runs seamlessly on the iPod Touch – it doesn’t (usually) “break” on iPod Touch if it uses an unsupported iPhone-only feature … rather, that part of the app silently is ignored.

So … nearly all those iPhone developers are actually also iPod Touch developers. Many of them deliberately steer clear of using iPhone-only features. Some of them (myself included) write their apps to cleverly detect whether they’re on an iPod Touch, and work around the limitations (it’s not hard – e.g. if I can’t upload scores to the game server because I’m on a Touch that isnt in wifi range, I save it and upload it next time the phone is online. As a bonus, this makes my games work “better” on iPhone when the iPhone has to go offline, e.g. when it goes on an airplane).

NOT “iphone App”, but “Wifi App”

Back to the point… There aren’t many Wifi-only Apps out there on iPhone … yet.

But there will be. More and more of them. And this summer, when Apple brings out the 3.0 update for iPhone, making ad-hoc discovery much easier (i.e. my phone will be able to auto-detect / find your iphone when they’re in the same room), wifi-local Apps will blossom.

A simple example: real-time fast-action games.

e.g. a Racing Game, that works like this:

1. I persuade you to download the free version
2. We each click on the icon on our own phones
3. The phones magically discover each other, without either of us doing anything, within a couple of seconds
4. We start playing a high-speed racing game – e.g. Need for Speed, or Midnight Club – over the local wifi network
5. The net code works beautifully, there’s no lag, everything updates very fast and smoothly
6. When we finish, the free version you downloaded pops up to say “you played with your friend because he/she had the paid version. If you want to play with different friends, one of you will need to buy the paid version. Click here to buy (one click, instant download)”.

All that is possible, and relatively easy, come summer 2009. You *can* attempt to do it over a 3G network, but it’s hard. But as a wifi-only app it becomes easy. Guess what’s going to happen?

The future of local free wifi

I predicted around 30-40 million iPhone* devices sold by now, and Apple’s 37 million official figure made me look clever (although admittedly it was only a 6 months extrapolation and a 33% error margin I quoted there ;)). I predicted around 75-100 million sold by the same time 2010, and I’ve noticed a lot of other people have come up with the 100 million estimate for 2009 since the official 37 million figure came out.

So, although I think it’s optimistic to expect 100m by the end of the year, I’m confident it’s going to be close. 100m wifi enabled game consoles sitting in cafes, restaurants, bookshops, trains, buses, hotel lobbies, city squares, pubs, etc.

Oh, and don’t forget – that iPod Touch, with no “network contract” to pay for, is a perfect gift for kids. Plenty of people have lined up to tell me that kids can’t afford them; the market research that consistently shows under 18’s as the second largest demographic for iphone* ownership suggest that’s an ill-informed opinion. So there’ll be a lot of those devices sitting in the hands of bored children / used to keep them occupied while parents are doing other things. And we all know how strong a child’s “pestering power” can be.

Monetize local wifi? Screw that; who can be bothered to monetize it when it becomes as essential a driver of custom to your store as having coke/pepsi/coffee on the menu (even though you’re actually, e.g. a bookstore…). Re-think how that affects the “monetization potential” of local wifi (hint: look to the already vast field of *indirectly monetized* Freemium / F2P for inspiration)

So, I’m optimistic. And rather than focus on how “iPhone is going to destroy the cell phone / network operator hegemony, and bring around fair pricing for consumers”, I’m focussing on how it’s going to usher in the long-envisaged era of high-bandwidth, low-latency, high quality console games and apps that focus on the local area. I’m happy with that: I’ve spent almost a decade learning how to make online games for millions of players where the core experience takes place in the local group, so I feel extremely qualified to do well out of this. What about you? What will you be doing with it?

(I’ll do a summary later this week; personally I’m aware of 6 different unique forum threads and several separate bloggers speaking out on the topic, each with their own comment threads – we’re gradually seeing the message spread, which is good. But it also means it’s getting hard to keep up)

One commenter, perhaps playing Devil’s Advocate for those at fault, has repeatedly posed the question: “What would you *like* the IGDA’s stance to be on this topic?”

There are all sorts of reasons that’s a dumb thing to ask, and it essentially misses all the points being made here by the unhappy IGDA members, but I thought it was a good question to answer anyway, philosophically.

Quality of Life for the Games Industry: Adam’s stance on “Crunch”

NB: this is only covering the crunch/working hours/overtime issues; there’s more to QoL than that, but it’s definitely the headline aspect.

(and hopefully you’ll also have a look at Darius’s stance on this and other related topics, since he’ll be standing for election to the IGDA Board next year, and he’s got my vote already ;))

1. the term “crunch” is a euphemism for “unpaid overtime” used largely to disguise the true nature of what’s being described. No-one should ever use the term “crunch”. Everyone should actively encourage others to call it what it is (unpaid overtime). “unscheduled overtime” is NOT an acceptable alternative; it is simply another, slightly less positive, euphemism.
2. no employer gets an opt-out from responsibility for Quality of Life issues, neither charities nor startups. Quality of Life is about the relationship between employee and employer, independent of individual industries, organizations, or projects
3. the company must at all times actively discourage staff from doing unpaid overtime; if the company wishes to support overtime, it should be supporting *paid* overtime only
4. no programmer, artist, or designer should ever stay late in the office “because it’s quieter then, and I can get more work done when everyone else has gone home”; if the office environment is that poor, the company needs to fix it, fast
5. the MOST EFFICIENT (for the company) number of weekly office hours for programmers, artists and game designers lies somewhere between 30 and 50 hours a week.
6. the MOST EFFECTIVE/DESIRABLE (for the employees) number of weekly office hours for programmers, artists and game designers lies somewhere between 20 and 60 hours a week.

Why does this even matter?

Most workers in this industry live to work, instead of working to live; this makes the industry especially prone, and the employees especially vulnerable, to abusive employment practices.

It also means that – handled correctly – most people ought to be happy and healthy. This topic has the potential to improve the lives of thousands of people; that it will almost certainly also improve the quality of the games they produce is a secondary (although highly desirable) side-effect.

Details / explanations

1 – Terminology

Cynically, I’d like to point out that to many young males (the bulk of the workers in the game industry), the term crunch probably initially conjures up images of the painful gym exercises that build the widely desired abdominal muscles.

i.e. the base assumption of an English speaker is that Crunch is something that “hurts now, but is good for you, and in the long run you will appreciate it”.

Actually, I don’t think that’s even all that cynical, looking at the companies that actively use the term: I think they’re extremely happy to have got such a positively-connotated word used as the main term to describe their unethical business practice.

2 – Opt-outs

Several people (such as Erin Hoffman (EA_Spouse) EDIT: my mistake – sorry, Erin! – see comments below) have claimed that startups are “special”; too fragile to be held accountable to the same standards that ordinary companies are held to; that they could never adhere to sane and ethical working practices and remain in business.

As a previous founder, co-founder, or C-level exec in 5+ different startups, and a consultant or external adviser for a further 20+ startups, it is my personal opinion that this is absolutely not true.

Further, I believe it is deeply insulting to most entrepreneurs to imply that they are so incompetent that they need to be allowed to break with ethics or law in order to succeed. The majority of successful entrepreneurs I know are awesomely competent people, and have earnt (*earnt*) their wealth not merely through “having a good idea” but through being better and smarter and wiser than their equivalent salaried employees. They need no leg-up.

Of course, there’s also plenty who simply got lucky. But that’s another story.

3 – Working late in order to work better

There are two issues here.

Firstly, if someone is doing unpaid overtime, the company needs to either reward it or try to persuade them to stop; anything else is unfair. Simply taking the proceeds of the free work and paying nothing in return is perfectly legal (although arguably, since the work falls outside of the contract, if the company’s employment contract isn’t good enough the company could find themselves not entirely owning the output of that work), but unethical.

Secondly, unless the employees have strong legal protection against coercion (both explicit and implicit) then the claim that staff are “voluntarily” working unpaid overtime is often going to be a lie that – in practice – is almost impossible to uncover. A nice, comforting lie, but a lie all the same. I have many times worked with people in the games industry who have openly claimed their unpaid overtime was voluntary – until they buckled from stress a few weeks later, or got drunk, or met up outside the office, and admitted the true reason(s) they were doing it. Generally those were “to keep my job”, “because everyone else on the team says I have to”, or a variant on those. i.e. to satisfy the employer, or to satisfy peer pressure.

This is true even in Europe, where employees have fairly strong legal protection – but in many cases don’t realise the full extent of the protection. Generally speaking, only the inexperienced, younger staff are ignorant of the basic laws here. Within 5 years they normally see at least one friend or colleague go through some situation which uncovers the laws involved, and they gain a basic understanding of what their own rights are, under the law.

4 – Optional isn’t always optional

I’ve worked with many programmers who felt forced to work late hours because of this, and a few artists. I haven’t worked with any designers yet who were *seen* to, but I know plenty who have done it – they simply went home and worked from home instead.

The main reason programmers show up with this problem more than others is that they are entirely dependent upon the tools at their desk to get any work done (software, hardware, office systems, etc). It’s *not* that they are the only ones who work hard and have to concentrate to get good work done!

5 – Efficiency

As far as I know (please correct me!) … no-one currently knows via research what the MOST EFFICIENT weekly office hours are for programmers, artists, and designers in the games industry; the research I’ve read summaries of, and in a few cases read myself, from other industries and anecdotal evidence, plus the experience of skilled game developers, suggest that it lies somewhere between 20 and 40 hours.

Further, the majority of research from other industries and evidence and experience strongly support the claim that values over 60 hours are less efficient than ANY value between 25 and 60 hours.

6 – Quality of output, quality of life

As far as I know (please correct me!) no-one currently knows via research what the IDEAL (for the staff work/life balance) weekly *working* hours are, but assuming 14-16 waking hours a day, i.e. 70-80 waking hours a week, and assuming a work/life split somewhere between 30/70 and 70/30, you get between 21 and 56 working hours per week

Recruitment

In the games industry there are no raw materials of variable quality, there is no variety of base services to build upon; everything that distinguishes one company (and set of products) from another comes solely from the people they hire.

In the games industry there are no raw materials to pay for, there are no service charges. There are only salaries and employee-support costs.

Recruitment is where the studio heads find their hardest problems, and see their biggest successes/failures as the studio grows in size. Eventually, all their own experience and ability at design, marketing, sales, programming, art, etc become subsumed by their ability to attract, recruit, retain, lead, and motivate their people.

Recession

…is the best thing for new game studios to happen in the past 5 years. It’s achieved four things:

1. Removed lots and lots of people from their comfortable jobs, by force
2. …simultaneously…
3. …indiscriminately w.r.t. quality of personnel…
4. …and made even the supposedly “secure” games companies (EA, Microsoft, Sony) suddenly look as fragile and short-term as the riskiest of startups

The VCs have been blogging about the benefits to startups wrought by this recession, and I’ve put it to a couple of them now that, for the game industry, this one – recruitment – is the biggest by far, and each time met with straight agreement. Our industry is very like Management Consultancy: it’s driven by the people. Nothing else matters.

Culture

I’ve worked with a lot of experienced managers who’ve been adamant that “no-one leaves their job because of (too little) salary”. Also with slightly fewer who were convinced that “no-one accepts a job based on salary” (more often, that was rephrased with a rider to be: “no-one good accepts a job based on salary alone“).

In that case, why do people accept / leave a job?

“Culture” is the catch-all term that describes not just the direct environment which people experience each day in the office, but also the emotional and psychological experiences that they go through while there.

It describes how their colleagues think and act – and how those actions effect the individual. But it also describes how the “teams” within the organization think and act, which can often be very different from the people within them. You often see teams of smart people “acting dumb”, or teams of nice people act like assholes when taken collectively. Group think is powerful, very powerful.

But it’s hard, very hard, to really see the culture of a company until you’ve worked there for a couple of years, and in a couple of different divisions, and perhaps a dozen different departments. Which is not an option for most of us. You can work somewhere for just a few months and pick up the culture if you know what you’re doing and really work at it – but even that requires skill and dedication, and can only be done AFTER accepting a job offer.

(this is one of the reasons I posted my Manifesto for a Game Studio online – you can get a strong taste of the culture of my next startup, and decide if you want to work with us, without having to sacrifice a year of working there first)

Reputation

Game industry staff often worry about reputation. The companies (as represented by the senior management) themselves often don’t.

The former care how their organization is perceived, and assume everyone else does too. They assume that a “better reputation” will lead to “more sales”.

The latter have access to the actual sales figures, and have convinced themselves that this is a nice idea but simply not borne out by fact (in some cases this is true, in some it isn’t – but it’s much easier to look at the figures on paper and believe it’s true than to see the flaws in that logic).

But the truth is that it IS important, very important. It’s the external reflection of the internal culture. As such, it’s what most people use to make a decision about whether they want to work there.

Obviously, it varies. The older and more experienced you are, the more you come to use a company’s reputation as a barometer of its culture – and the more heavily you weight this in your decision about accepting a job. The younger, more ignorant staff generally haven’t been burnt by terrible culture, or haven’t yet learned what to look for / avoid in their next employer.

Back to the issue of Recruitment: the biggest successes/failures are going to be from the more experienced people you hire (and, remember – hiring a “bad” person into a senior position is not just a loss, it can easily cause negative productivity, by screwing up lots of other staff who were doing their jobs better before that person arrived and started interfering / roadblocking them / etc).

So … you probably should care about your reputation, somewhat in proportion to the size of your company.

Blizzard

Pre-WoW, Blizzard had an exceptional reputation, for a handful of common reasons (amongst others):

1. Never shipped a game that wasn’t really good fun
2. Frequently invented + defined large sub-genres with their games (Warcraft was one of the first RTS’s, Starcraft created the “truly strategic” RTS genre, Diablo re-invented the hack-and-slash RPG, etc)
3. Publicly talked about “finishing” their games, and then deliberately deciding to spend another whole year (or similar) working on them before shipping, to make sure they were really polished
4. All of their games were best-sellers – i.e. they didn’t just make cool stuff, they made cool stuff that the market appreciated and paid for, too

Now, I’m not so sure. If a recruiter called me tomorrow with an “amazing, once-in-a-lifetime opportunity” to work at Blizzard, my first reaction would be hesitation: would I really want to work at the place that Blizzard has become?

While people have queued up to defend them, the history of their actions against Glider, and now this absurd crackdown on World of Warcraft add-on authors, have left me with a sour taste in the mouth.

In my opinion, using the law to beat over the head people who discover flaws in your basic business model / acumen is the last refuge of those who recognize their own incompetence but would rather not go to the effort of raising their own quality bar. Blizzard seems to be making a habit of it. That’s not encouraging. Ten million paying players for one MMO is great, but … the sales figures of their games were only ONE of those bullets I cited above about Blizzard’s reputation traditionally. Money buys a lot of forgiveness, but not infinitely so.

So … you can go and listen to an iPhone developer, an ex EA person, and an ex Motorola person, and pay for the priviledge, organized by non-developers. The cost is 50% more than you pay to go to world-famous VC/angel/investor networking events such as First Tuesday.

Or … you could go to one of the many near-identical networking + speaker events that are free, and run by real developers. Here are four examples which show that Upcoming, meetup.com – even Facebook and LinkedIn – are your friends here, with loads of stuff going on.

The issue of “how” you organize these things and “what” you provide has been on my mind a lot recently, as we’ve just started a fortnightly one in Brighton (for anyone and everyone interested in commissioning, designing, developing, and launching iPhone apps). I’ve been trying out all the above sites for arranging this (I can write up some notes about the pros/cons of the different sites if anyone is interested). If you can’t find something in your local area … why not start one of your own, all it takes is making a page on Upcoming.com, and emailing the local game / mobile / iphone / OS X developer communities … takes about 30 minutes, max?

Personally, I find the grassroots events organized by people actually making this stuff on a daily basis the far more compelling option. I also find that “special name speaker” events tend to focus on the audience being expected to shut up and listen, rather than share and learn collectively – which isn’t much use to me these days. Unconferences for the win!

Of course, sooner or later, if your event gets popular, you’ll have to start charging because the only venues big enough require large payments, and the organization effort becomes too much to do in your free time. But for the small events? My advice: if it ain’t free, don’t go.

EDIT: if you’re interested in these ideas, have ideas of your own you want to discuss, or are just looking for other like-minded people … I’ve set up a Google Group for this at: http://groups.google.com/group/game-studio-manifesto

30 hour working week

1. 4 days a week, 7.5 hours a day
2. Salaries are 20% below the going rates; we aim to employ 20% more staff than usual for a given project size; cost is the same, output is the same (modulo an output-reduction/cost-increase due to increased overheads/inefficiencies for larger team size)
3. everyone takes the same day off. I’m thinking Friday. Friday sound good? Let’s make it Friday. You know that if you’re in the office, so is everyone else (modulo normal holidays, off-sites, illness, etc).
4. if we ever have to “crunch” and work unpaid overtime, I’m afraid we’ll all have to start coming in 5 days a week. I know, it’s tough.

Self ownership

1. you own your work: no-one will chase you; informing people of your status, and of delays, is *your* job
2. you own your project: everything works on Scrum (where the “team” owns the entire process – no producers, no project managers); NB: if you claim to “know Scrum” or be a Scrum Master, or “have used Scrum” and you don’t understand/believe this team ownership thing, here’s a big fat hint: YOU MISSED THE POINT
3. you own the company: everyone has vested equity (not options) in the company

Mentors not managers

1. increased organizational power is based on your ability to bring others up to your level. It’s based on your contributions to the other individuals. It’s not based on your organizational prowess
2. if you cannot mentor, cannot explain complex/new things simply and clearly … you will not advance in the management chain (you should become a Domain Expert instead!)

Your value is what you are paid

1. This is an implicit assumption in all salary negotiations and performance reviews.
2. It will also be required to be *stated* explicitly in all negotations and reviews
3. If your manager believes you’ve got better, they have to increase your pay
4. If they do not increase your pay, they’re not allowed to give you a positive performance review
5. There is no point in your career where “Becoming a Manager” is a requirement to get your salary any higher; the only benchmark is “can you further increase your usefulness to the company?”

You have a duty to become the best you can be

1. Playing games, during company time, is an expected part of most jobs, since we are a “game development company” and you *need* to know what our competitors are doing
2. Learning new skills, during company time, is an expected part of most jobs, since we’ll always be looking to make use of any “better” new technologies and tools that become available
3. Not going on paid training courses, not increasing your understanding of our industry, allowing your personal skill progression to plateau … makes you sink behind what your peers in other companies are doing, people who would like your job. Get too far behind and we’ll give it to them. You owe it to yourself, as well as all the rest of us, to make sure YOU, as an individual, are constantly getting better, and learning new things
4. The structure of the company is explicitly designed to support as many people as possible to become the best they can be. If in doubt, or in difficult situations where no alternative is “easy”, we will err on the side of helping people to improve themselves.

100% Organization-level transparency

1. knowing what is happening in the organization is a right, not a priviledge
2. knowing the reasoning behind organization decisions is a right, not a priviledge … from the reasons behind a marketing campaign being run the way it is, to the reasons for the product strategy, to the reasons that one particular tech is being used rather than another
3. being informed of the progress of ongoing processes / issues is an expectation, not a priviledge … that means that people working on things are expected to proatively inform the rest of the company what they’re up to
4. transparency overrides privacy (unless forced otherwise by explicit legal requirements)
5. e.g. the salary someone earns is a personal and private matter – but the salary the company pays to each of its staff is not, and every member of the company has full free right to see that info. The company knows additional things – e.g. thanks to tax law, companies may know of other income their staff are receiving – but those are not part of the company, hence they are not part of the transparency

The buck stops with the directors

1. any issue that necessarily has to be handled by an individual, that can’t be handled by the “team ownerships” etc, or e.g. is “sensitive” or a private personnel issue, WILL be handled by a named director instead
2. no manager can accrete decision-making power, unless they are a company director
3. e.g. if too much power is taken away from teams by directors, by accident or device, the directors will become overworked and will have obvious incentive to push decision power back to the teams

Google 20% time

1. Problem: it’s either half a day, 12.5% time, or 1 day, 25% time. I’m not happy with either – one whole day makes things much easier mentally for the person to switch, but I’m afraid that converting it to 25% time and having people available only 3 days in every 7 would be too destructive?
2. As per Google, this is not a right, it’s a priviledge
3. all 15% time projects require sign-off by the person’s direct manager (with appeal to a director)
4. all 15% time projects require monthly status presentations to show what’s been achieved, and the manager has to approve or deny continued work on the project

Team budgets – food; drink

1. every project team has a weekly budget for food, and one for drink, and is expected to on average have one team lunch a week, and one team evening social (with free alcohol) per week

Healthy food; healthy environments

1. the office will not have Cola vending machines, or ChocolateBar vending machines. *If* it has any vending machines, they’ll be majority subsidised – free, or practically free
2. the office will have a surfeit of fresh fruit, renewed every day, starting at or before anyone gets into the office
3. any meeting called before 11am will have some free small fresh food with substantial sugar content (for anyone who missed breakfast. Until they recharge their blood sugar, they’re probably cranky and irritable – and irrational – or simply silent and unthinking, like a robot, and make everyone else suffer because of it)
4. choosing to hold meetings physically outside the office, e.g. in local cafes, and having the company pay for coffees and snacks, is a right, not a priviledge, for all employees

Remote working, and Online Working

1. at any given time, we aim to have a substantial minority of staff working remotely / telecommuting, e.g. around 20%
2. remote workers can expect slightly lower salaries than their full-time equivalents; the company gets more value out of people who are co-located – but it makes all of us work better to have a mix of co-local and remote colleagues, so we welcome the presence of remote workers
3. all employees are required to be online and available *and reactive* on IM during all working hours
4. all development systems and tools will support remote working by default (e.g. remote compilation, remote builds, remote deployment, remote access for all internal systems). This is one of the ways that having remote staff makes our overall operations better: better tested, more robust, more adaptable
5. all employees will have their own password-protected SSH keys stored on a free USB key; all company systems will work on SSH key-based auth; all workstations will be configured to do single-sign-on using the individual’s SSH key – no passwords required

Guards against the unscrupulous

1. all ownership is only part-vested, tied to time served AND ALSO personal performance targets. This will take substantial time to invent/negotiate on a per-person basis (I know, I’ve tried. Sometimes, I’ve given up on it, because it was so much effort. But … in the short and long term, its worth it)
2. managers have more time to look for problematic individuals, as they’re freed of some of their normal duties in other companies
3. teams, being self-owning, have the power and the incentive to reject any failing members. Over time, failing individuals will either change, find teams that do welcome them, or find themselves conspicuously under-employed, making them an easy target for management attention (this does not imply “firing”, it’s up to the management what action they take, but they clearly now have staff they’re paying for and getting nothing from)
4. directors have a lot of burdens of responsibility under this system; they also have a lot more visibility into the company’s status than in a standard company, so more chance to fulfil their responsibilities
5. most of the processes are designed to be self-healing/recovering when encounting unforseen problems: the teams and individuals that do the bulk of the actual *work* are self-owning, the managers whose roles are mostly shepherding are largely disempowered to break anything, any unusual problems fall into the laps of the Directors who already have total legal power to enact whatever is needed anyway, etc.

Next steps

Please help me debug this thing … add your own suggestions, or highlight the flaws in what I’ve written, or point to evidence both for and against the realities of what might work … etc, etc, etc.

Yes. Very much so.

Because when you look at these IGDA-specific events you can see a partial microcosm of the games industry at large, played out on a smaller scale, and more explicitly than in many places.

The massive problems that the IGDA has are the same as some of the problems that pervade the industry. The issues that some commentators (and the IGDA Board!) even now fail to appreciate or understand are the same issues that face studios across the world.

Issues? What Issues?

Is Exploitation part of the American Dream?

IGDA Board Member:

“Mike does it by compensating his employees richly.”

TCE Member:

“No, Mike does it by compensating those employee’s willing to work extended hours at the expense of their own lives, richly.”

TCE Member:

“My favorite was the guy saying “You join a company to make a game… it’s like joining a rock band. Do you think rock stars work 40 hour work weeks when they’re on tour?”

No… they don’t. But we’re not the “rockstars”, you are. You make the money, and we’re the f—ing roadies. F— off.”

Funny. It seems that the boss gets the money, the power … and when the recession strikes, or the budgets were “mistaken”, or bad decisions are made, it’s the employees who lose their “not guaranteed” bonuses, and get “made redundant” … but it’s the employees who should be working 80 hour weeks for the priviledge.

But it’s all OK, apparently, because … you don’t have to work for a living if you don’t want to (at least, if you’re a Studio Director you don’t – you’ve got all that money and all those second homes to live in).

Issue Summary

The Free Market – where anyone can choose freely to buy (or not buy) anything – is a theory, not a real-world model. People need to eat. They need homes. They need … jobs.

It is NEVER valid for a manager to excuse exploitative working practices with the declaration “You chose to work here”; they are still exploitative, and the manager is still morally and ethically wrong.

(where does this end? A proposed pricing model for life-saving drugs is “take the future life earnings of the individual, and charge them close to 100% of that, even though that is several thousand times the cost of manufacture. They should be grateful that we’re giving them the chance to prevent their kids being orphaned and dieing of starvation”. Would you be grateful? Is that how you envision a civilized society?)

When you “stand for” something, you have to actually STAND for it

IGDA Chairwoman:

“I don’t think it’s the role of me, the IGDA, or any other organization to tell an individual what kind of workplace they should choose.”

IGDA Board Member:

“I would not use the model that Epic does and I would not work for a company that does.

I’m fine with Epic recruiting only the folks who want to work long hours and make game dev their life. That leaves thousands of great employees for Kaos and other studios committed to 40-hour work weeks to steal away”

Issue Summary

Beliefs are not something you pick up and set down when it’s convenient; you either believe them, or you don’t.

If you are one of the people running the organization that explicitly describes it’s campaign for “Better Quality of Life in the industry” as one of it’s most important activities, you had damn well better believe it – or resign and make way for someone who does.

Why do so many professionals have so little faith in the IGDA?

TCE Member:

“I’ve gone to the trouble of registering on the forums simply to answer this point. I’m not an IGDA member and with comments like Mr Capps’ being essentially defended by the board I have no intention of joining.”

TCE Member:

“Ignoring the QoL issues involved for a moment, it also unbalances the industry for all well-managed companies, be it clothing or games, who do not resort to such exploitative tactics by creating an uneven playing field for competition.”

TCE Member (?):

“If i’m honest, this is a ridiculous model. Can you imagine trying to source funding, outside of the games industry, on the basis that it might make you rich if everything goes to plan?
…
This is the whole problem with the games industry. I do not understand how anyone can defend this sort of position. It is untenable. Sure occasionally it works but once it has worked it is not a viable method to continue your business around. Its all about risk. Unfortunately you are putting that risk on to your employees and that is wrong.”

TCE Member (?):

“As a slight aside I will also say that the reason I never did and will never join an organisation such as the IGDA is because they cannot change that which the board has a vested interest in.”

Response, from IGDA Board Member:

“I will defend Mike and the others on this board unfailingly because the bottom line is that they are good people who are trying to do good things for the industry.”

Issue Summary

If the IGDA is supposed to make the industry better – a better place to work, a creator of better products, a better contributor to the lives of people who consume the products – then it needs to *improve* the industry.

It is not enough to simply say “it’s a world of free speech, I’ll defend every opinion to the death” – you have to actually have an opinion of your own, and you have to push it, everywhere.

Who does all the work around here?

IGDA Board Member:

“To be frank, the complete lack of support and involvement from the membership has been totally disheartening. Production level developers dropped off of the Taskforce and Roundtable discussions about this initiative at GDC a few years ago were universally empty with a total of 5 individual developers attending all 3 sessions. There were actually more Taskforce members and HR people from studios in attendance that there where individual developers. ”

IGDA SIG Chair:

“people can identify that there’s a problem, but the workers suffering most by definition do not have time to volunteer at anything – let alone something that might get them fired.
…
depending on meetings at GDC… yikes. The people who feel most strongly about this issue are not the ones who can afford to go to that conference (and again, by definition their companies are not paying them to go).
…
I believe we’ve made a real difference in the industry. Maybe not a difference everyone likes or agrees with, but when this SIG started in 2002 nobody would even think to put up a list of “Top 20 Game Writers” on Gamasutra. ”

IGDA Chapter Co-ordinator:

“I do my damn best to make the Boston chapter a useful and good thing for our local community.
…
Here are the basics of the Boston chapter:
…
Here’s what we provide:
…
So, IGDA broken? Sure, in places. IGDA useless? Not in Boston, that much I can say.”

IGDA Chapter Co-ordinator:

“But Jason, we can’t just sit back and say, “Hey, we formed some committees and we’ve scheduled some meetings: come one, come all, time to GET INVOLVED.” That doesn’t work. It never does.

When I was helping grow the Boston Chapter, it wasn’t enough to just hold the meetings and expect people to show. We had to provide incentives. We had to inspire people to show up. For the chapter, that was beer, food, and an informative speaker every month. And even then I had to personally reach out to hundreds of devs and harass them every month just to get them out to their first meeting. The incentives really only helped *retain* attendees.”

Issue Summary

Ah … here’s where I get a little controversial. Here’s the thought I’ve had but never voiced, even to myself, for a long time – it was too close to the bone. But hey, if I’m leaving, I might as well come clean with myself and everyone else.

The SIG Chairs actually do stuff. They make things happen (with very little overt guidance from the central IGDA – instead they have to make it up as they go along). They don’t tend to hold a lot of meetings (although a lot do, it usually very quickly goes nowhere – I know, I’ve made those mistakes myself).

The Chapter Co-ordinators actually do stuff. They run real-world events. They (with very little help from the central IGDA) get people to do things that others talk about, only … they actually get them to *do* it.

The Board?

I’d like to apologise to Tom Buscaglia here, in the interests of fairness, because in this exchange I used him as an example of people saying, not doing – whereas in reality I think the QoL program *is* doing things. So … I’m sorry.

HOWEVER … I suspect that if it were being done by a SIG or a Chapter, it would have been “done” a lot sooner – even if a lot “less well”. Chapters and SIGs live or die by their rapid, substantial results. The wider IGDA doesn’t seem to.

Again, an apology – I don’t know the details of why the QoL stuff is taking so much time, despite Board-level direct involvement, and IGDA’s not inconsiderable resources, and there may well be (probably are!) reasons outside of Tom’s (and the other members) control. But the problem here is that if you take *so* much time over things, maybe you lose more from the delay than you gained by doing it properly. Maybe not. It’s not an easy problem.

The End

I haven’t even broached all the key topics here. For instance, there’s the issue of people in other industries claiming that because *they* routinely work 50 or more hours a week, it’s pathetic of people in the Games Industry to complain about it.

(so what? your work is different, the effect on people’s lives is different, the careers you lead are different. Even if it were all exactly the same … does the existence of your poorly-run industry somehow “invalidate” the suffering in our industry? Of course not)

But I suspect most people have already stopped reading by now :).

This post lays out the IGDA event where (IMHO!) the IGDA’s own Board undermined the IGDA’s most famous public initiative, and what the Board said about the matter when challenged over it.

2008 IGDA Leadership Forum

At a public IGDA event a few months ago, the “2008 IGDA Leadership Forum”, there was a session where two of the 12 IGDA board members (plus one about-to-be-board-member) spoke on the topic of working practices within the industry. The event was specifically about “Studio Heads” – i.e. people who run studios, and their particular insights into running the businesses (the board members in this case were also studio heads).

One of the speakers/board members, Mike Capps, the CEO of one of the most famous game developers (Epic), made some very clear comments about his own thoughts on QoL. You can see the video here (Mike’s comments are at about 21:00).

The video for this event went up a few weeks ago, and a TCE forum member posted a link for comment.

I suggest you watch the video, otherwise you’ll be in no position to make up your own mind and appreciate the issues at play here.

Grossly over-simplifying (read on, there’s a proper summary linked below), Mike’s comments sparked outrage and fury among the professional developers (remember: there are (practically) no fanbois on this forum; you have to be a professional game developer to get in; the vast majority of people there are extremely well informed about the issues within the industry, because they’re actually inside it)

Fixing the IGDA

Discussion on TCE raged on and on about this. The core issues at stake were not new – dismay at studios justifying treating their employees like crap, hope at various ways we can change this/it’s not so bad as it was, the role of the IGDA and other orgs in pushing for change, etc.

But this time was slightly different. Because:

1. The comments were aired at an official IGDA event
2. The IGDA event was the first conference that is wholly owned by IGDA (instead of being attached to a commercial partner’s larger conference, e.g. GDC)
3. Half of the speakers on the panel were IGDA Board Members
4. The IGDA made no attempt to refute/rebut/distance itself from the comments
5. Simultaneously with this forum debate, the IGDA Board Elections were underway, and votes were being taken for the next 4 Board Members to take up 3 year terms starting this year

A lot of (fair, if sometimes extreme) condemnation was levelled at IGDA, both over this series of events, and it’s symptomatic relevance to the bigger, wider problems of the IGDA. These events did a pretty good job of exposing one of the biggest rifts within the IGDA:

What is the IGDA for, really? And does it succeed at that, or fail?

One of TCE’s members felt that there were a lot of good points, and a lot of great examples of just how offensive developers found the IGDA’s actions here. So, he went and asked for permission from each of the members to include their comments in a letter to the IGDA Board; you can see the results here:

http://www.igda.org/Forums/showthread.php?threadid=34741

IGDA Board response

“So long as Epic is honest with their employees about their expectations, I don’t think it’s the role of me, the IGDA, or any other organization to tell an individual what kind of workplace they should choose.” – Chair of the IGDA Board

One of the TCE members, who was not an IGDA member (allegedly because of his lack of faith in the organization), was moved to register on the IGDA site merely to respond, publically:

“IT IS NOT OK, EVER, TO EXPECT PEOPLE TO WORK MORE THAN 40 HOURS A WEEK.

If IGDA is so utterly incapable of seeing this while twittering on about its QoL efforts, it’s a totally lost cause and should disband, or own up to its utter impotence as a vehicle for real improvement of working conditions in an industry that needs that change desperately.” – Brian Beuken

(TCE members generally cheered Brian on, although maybe with slightly differences in the details)

What response did that (and other similar comments) get from the IGDA board?

“We support the initiative of the IGDA, which is to make the industry a better place for game developers, and we all do it in our own way.

Mike does it by compensating his employees richly. I do it by teaching and preaching a 40-hour work week. That said, I will defend Mike and the others on this board unfailingly because the bottom line is that they are good people who are trying to do good things for the industry.” – Another IGDA Board Member

…and there’s a bunch of other commentary from key people in the IGDA or in TCE. Go ahead, read the IGDA forums thread (http://www.igda.org/Forums/showthread.php?threadid=34741). Notable contributions include:

1. The Chair of the IGDA Board
2. Several other Board members
3. The President of the IGDA
4. The Chair of one of the IGDA SIG’s
5. The Chapter Co-ordinator of one of the larger IGDA Chapters

My involvement

The IGDA has three branches: the general (15,000+) members, the Special Interest Groups (Online, Casual, Writers, Accessibility, etc), and the Chapters (city-specific social/meeting groups). Having run one of the SIGs since 2005, I’m now quitting the IGDA over this issue.

I stood for election to the Board this month, and those 15,000 members didn’t vote me in. This means two things.

Firstly, I don’t have the opportunity I’d hoped for to change things for the better as a Board member. I stood for election specifically to make the org more pro-active in not just talking about the things it stands for, but actually making them happen.

Secondly, the membership at large have proven – diplomatically – that they don’t agree. There’s no point fighting for an organization that’s made it so specifically clear that it doesn’t believe in the things that you believe in.

With this issue in particular, if it can’t deal with these issues even internally, it’s got a snowball’s chance in Hell of fixing them in the wider industry.

So … I quit. I’ve got some IGDA commitments at GDC next month, which I’ll obviously see through, but after that, I’m standing down as a SIG Chair, and having nothing futher to do with the organization.

Next…

…why this has wider significance than the internal politics of a single non-profit organization.

IMHO it has added poignancy given the vast layoffs that have taken place across the board in the past 12 months. I’m splitting it into sub-posts so that the people who already know e.g. all the background to where we are now don’t need to trawl through it to get to the commentary.

I bear no personal ill-will to any of the people involved, and I don’t hold their opinions against them; in some cases I strongly object to the things they’ve said as spokepeople of their organizations, and I disagree strenuously with some of the opinions, but none of that makes them bad people. Although it might well make the organizations they represent into “bad organizations”…

IGDA: International Game Developers Association

(http://igda.org)

Formed some 8 (?) years ago, but in reality only really an independent organization for the past 4 (?) years, the IGDA’s vaguely-worded mission is to represent “game developers” in all forms, and make things better for them. It is non-specific whether it stands for “developers” as in “individuals who develop” or “developers” as in “development companies”, although there tends to be an implicit slant towards the former.

Alternate Reality Games (ARG) SIG: A “Special Interest Group” of the IGDA

(http://igda.org/arg)

Formed in 2005 by myself and 10 other people, our mission is even more vaguely worded :). But something along the lines: provide fora and support for ARG developers to meet each other, learn from each other, share ideas and advice, discuss developments in the industry, and generally just meet and talk to like-minded people.

IGDA Board Elections: 2nd Feb 2009 to 24th Feb 2009

(http://www.igda.org/board/elections.php)
The Board consists of 12 elected volunteers, who each serve 3 years, with 4 of them re-elected each year (so there are always 3 tranches of directors at any one time).

This year, I put myself up for election. I felt that despite all the good things IGDA was doing, it was failing in a couple of key areas to do with its role in the wider world of game development. It needed to get a lot more pro-active. It needed to stop just talking about what people should do, and do more to make them, and help them, to get there. Too many people have no idea what the IGDA is, even in a vague sense, and I wanted to fix that too.

TCE: The Chaos Engine

(http://www.thechaosengine.com/)

An internet forum that – unusually – is private, and enforces reasonably strict membership criteria. You must be:

• A professional employed in the games industry
• Not a manager
• Work in the “making games / shipping games” part (i.e.: not PR, not HR, not Finance, etc)
• Not a journalist

In essence: it’s a place for people who actually make games, with all the attendant joy and suffering, to talk freely with other knowledgeable people, without the presence of rabid fanbois who know nothing about what they’re talking about, and without the constant fear that an unscrupulous manager or HR drone is reading your every word and looking for excuses to fire you.

The stage has been set … read on to What Happened?

At the end of my commentary on the formation of NC West, I added almost as an afterthought a little comment about Europe and the MMO industry:

there’s a gaping hole in the MMO sphere. For someone bold enough to step into that hole, you could “own” Europe’s online gaming industry for the next decade.

Since I wrote that, surprisingly many people have commented on it both by email and in person, either along the lines of “look who else missed the opportunity” (Jagex, Ankama, Bigpoint, Gameforge), or along the lines of “yeah!” (count me in) … or both.

So, I wonder: what *would* it take, right now? If you have ideas, post them here. I’ll be at GDC in 3 weeks time, and I’d be more than happy to pitch this as a credible plan, if you come up with a comprhensive-enough plan. It’s a lot more expensive than any of my own humble plans, but in many ways I find it a lot easier to justify, financially. And I’m not even trying (it’s just a game for me right now, idly imagining what I’d do, if I were Jagex, or Ankama, or Gameforge, etc).

Wishlist time. Over to you, Dear Readers…

The form is pretty brief, so I wrote some personal notes on what I’ve just submitted (so I don’t forget if/when they accept the talk!). It just occurred to me that a large percentage of my blog posts are, essentially, about Leadership in companies (anywhere) and the game industry (specifically). So, I’d be interested in any comments on this skeleton outline.

1. it changes your reputation
* your reputation is the biggest influence on your hiring-applicants
* your business is based mostly on people (games industry specific!)

2. it changes your collective happiness
* unhappy people do different things: cause problems, stop working, stop caring, suicide-by-cop
* happy people: … be the best tehy can be

3. culture is formed by perception
* it’s not what you say, it’s what you are NOTICED to be doing

4. internal and external culture
* they improve and sink independently
* …but one can pull the other up (or down)

5. changing culture
* very steep change-curve == very hard, but then … very sudden massive improvement
* starts with: who are you going to fire?
* c.f. “perception” of belief, not the statement of it

6. cultural “tells”
* what does your employent contract say?
* what is “a manager” in your org?
* how are projects structured in terms of people + human-roles?
* how much do you pay?
* what does the man-on-the-street think you are?
* what do you do when times are hard? (hard questions, hard problems, hard money problems, etc)

7. shining examples
* e.g. this

8. flaming failures

Anyway, advert over. He’s posted an interesting challenge: want money for a startup? Right. You have to publish the entire business plan, and let everyone else copy it. If – as many people are fond of saying – it’s implementation that matters, not the idea, then this shouldn’t be a problem for you. But it may bring wider-world benefits to everyone else, intangible virtuous-circle stuff.

I will invest money in businesses presented here on this blog. No minimum, no maximum, but a very specific set of rules. Here they are:

1. It can be an existing business or a start up.
2. It can not be a business that generates any revenue from advertising. Why ? Because I want this to be a business where you sell something and get paid for it. Thats the only way to get and stay profitable in such a short period of time.
3. It MUST BE CASH FLOW BREAK EVEN within 60 days
4. It must be profitable within 90 days.
5. Funding will be on a monthly basis. If you dont make your numbers, the funding stops
6. You must demonstrate as part of your plan that you sell your product or service for more than what it costs you to produce, fully encumbered
7. Everyone must work. The organization is completely flat. There are no employees reporting to managers. There is the founder/owners and everyone else
8. You must post your business plan here, or you can post it on slideshare.com , scribd.com or google docs, all completely public for anyone to see and/or download
9. I make no promises that if your business is profitable, that I will invest more money. Once you get the initial funding you are on your own
10. I will make no promises that I will be available to offer help. If I want to , I will. If not, I wont.
11. If you do get money, it goes into a bank that I specify, and I have the ability to watch the funds flow and the opportunity to require that I cosign any outflows.
12. In your business plan , make sure to specify how much equity I will receive or how I will get a return on my money.
13. No mult-level marketing programs (added 2/10/09 1pm)

PS: I love Mark’s attitude that comes across in his blog. E.g. in one of the first comments to this blog post:

Would you be open to reviewing pitches on your blog and then details privately?

From MC> No. This is an open source opportunity. Not a pitch Mark opportunity

But in terms of the surpise? No. I find there is no surprise here. There’s IMHO two major things going on.

1. Clean up the mess created last summer in Europe

From yesterday’s announcement:

“The European office is transitioning to have a stronger focus in marketing and sales”

Last Summer, they made redundant the entire Development division of NCsoft Europe. Traditionally, in games, you have Development and Publishing. In online games you have a third major wing: Operations/Support.

Publishing and Ops have to be / should be local to the country(ies) where they are being sold – it makes things much cheaper, and it makes things more successful, as the staff are actually immersed in the culture and timezone of the people they’re selling to or serving.

I was a little surprised when the Dev division was cut that it wasn’t done cleanly. As Scott points out “Hey, management? You’re doing it wrong”. If you get rid of Dev, then certain other things HAVE to happen:

1. Get rid of all Dev-sub-depts in their entirety – including things like QA, that “can” have a foothold on the side of both Ops and to a lesser extent Publishing. If you’re actively *cutting* dev, then that QA dept (as an example) is an abandoned outpost that will get left to rot, politically speaking, and you can guarantee it will be starved and eventually killed (or die of hunger)
2. Get rid of a large chunk of Publishing and Ops that are *not* part of Dev, but are co-supporting of them. If you had a Dev division, you would have built up extra resource in those areas; that resource is now under-utilized. If you’ve had to do something as brutal as destroying your Dev division, you clearly are desperate enough that you need to be making those cuts as well

NCsoft Europe did *some* of the above – but clearly not all. I’m not expecting you to tell from the headcounts (that would take some effort with LinkedIn, or buying beers for a few people after work) – there’s an easier way: look at what “departments” still had staff. Once the redundancies had completed, there should have been *no-one left* in a bunch of departments that – in fact – were left with a handful of lost, abandoned, individuals.

Going back to that press release, what it really meant was:

“The European office has finally implemented the strategic plan from last Summer, so is transitioning toeffecting immediately have a strongerpure focus in marketing and sales”

Cutting Development in 2008 meant one thing: NCsoft Europe was now purely an off-shore Publishing division (coincidentally, back to its historic roots). In the games industry that means you are (in decreasing order of importance): Sales, Marketing, Localization. You’ll be lucky to keep anything in teams like QA because there’s no need for QA to work hand in hand with sales teams – they could be located anywhere (unlike QA + dev, which really need to be colocated). In some companies, with the number of people remaining relatively small, the CEO’s would have left the abandoned people to sit in their jobs not being very useful, while the management got on with bigger issues of trying to do whatever the strategic plan was that they were doing. But that couldn’t happen for NCsoft, for reason 2 (see below).

PS: I like to believe that the reason it took so long for this week’s cuts (in Europe) to happen is largely that the exec team in Brighton were trying hard to keep as many good people within the company as possible. I don’t know Geoff Heath (the CEO) well, but he’s always come across as genuine and proactive in his concern for his staff. The rest of the exec team also – whatever their faults and failings – have tended to put a lot of effort into “looking after” their people, whether or not it’s worked.

2. Convert the overall company to “how it should have been run back in 2001″

Last summer’s re-organization in NCsoft America was all about giving total control of the non-Asian subsidiaries to ArenaNet. Reading news articles etc, I do occasionally wonder how many people grokked what had happened. A quick summary…

All this waffle about becoming “a unified organization under NC West”, and the reporting by bloggers and journalists that this was “consolidating” the subsidiaries and offices (they were already consolidated, you know) … what a load of crap. Follow the money, guys: who has the power now, and what unites those people? And if the answer is “nothing”, then ask yourself: who stands to benefit from an exec team comprised of individuals that are likely to be in conflict?

Look at the Directors of NC West:

1. Jeff Strain – Co-founder of Arena.Net, Director of Arena.net
2. Chris Chung – Director of Arena.Net
3. Pat Wyatt – Co-founder of Arena.Net, Director of Arena.net
4. David Reid – only started working at NCsoft 2 months ago

Notice a pattern?

So NCWest was simply a handing over of the reins of power from the OSI Mafia (ex-Origin people such as: Robert Garriott, Richard Garriott, Peter Jarvis, Starr Long, etc) to the Arena.Net Directors (the only one who stayed behind was Mike O’Brien, who now runs Arena.Net).

Remember that Korea acquired not one but two studios early on in North America: the first was Destination Games, which developed the tragically failed Tabula Rasa, and the second was Arena.Net, which quickly (note) developed Guild Wars, then a bunch of expansions, and is now well on the way to shipping Guild Wars 2.

This is “acquire experienced and skilled American game-developer Directors, and get them to run our non-Asia subsidiaries … attempt 2″.

Which should also point out something pretty obvious (to me at least): Chris Chung has a heck of a lot riding on the success of the revamped NCWest. ArenaNet’s top team has to show that it can do what the Origin team failed to do. They’ve been waiting in the wings all this time, implicitly saying “we could do better than that”, and now they have to prove it.

He’s / they’re re-arranging the entire company to fit with “how we would have done it in the first place if we’d been given the chance” (or something like that).

Doing it Better

I have two criticisms of what’s going on, and neither seems to be shared by the general press. Which either suggests I’m very wrong, or I’m very right. Your choice. Guess which one I’m going for :).

1. Too slow

If you’re reforming a company, do it lightning fast. If you’ve been at that company, playing the politics, for 5 years, you ought to have a battle plan in mind well in advance of being “officially” given the reins. There are always reasons that you “cannot”, from the operational to the legal.

But I’m sure that’s what they said to Lou Gerstner at IBM, and he proved wrong, when he fired the entire middle management, worldwide. I bring up this piece of history regularly, because it’s an excellent reference point: if one of the biggest, most bureaucratic companies in the world can do “the unthinkable” then what excuse does everyone else have left for not going far enough themselves? The redundancy pay-outs cost IBM so much money they booked a sudden loss that year greater than the GDP of entire nations. But they did it.

The “what would we do if could break the rules…?” game was one I played at NCsoft quite a bit; I needed to second-guess what would happen, given the long lead times of any development, organizational, and tech issues, if/when failing teams, projects, and managers got cancelled (as they did). Lots of other people were playing it too. It’s much scarier to actually have to put your thoughts into practice and risk being wrong, so some “more serious” prep may be needed when push comes to shove, and some paralysis is understandable (but still not acceptable). But with all the time we had, the extra due diligence shouldn’t have been necessary. Courage of convictions and all that. I’ve become a fan of moving as fast as possible (although even at NCsoft I still had crises of confidence and over-analysed some of the risky situations, and was fortunate to work with better people who simply said “stop worrying, run with what you’ve got, it’s planned more than well enough already”).

2. NC Europe is screwed

NCsoft had the opportunity to create a giant of the MMO publishing world in Europe; Europe is screaming out for it and just needs a banner to rally behind – and a visionary exec team to say “we’re going to turn Europe into an online gaming powerhouse”.

Europe is a bigger market than the USA (by some 30% or more).

Europe has no multi-title successful MMO developer or publisher.

The UK alone has a lesser but comparable level of mainstream game developers and output of titles to the US (UK currently 4th in the world behind Canada).

So … the development industry is here, less so the publishing industry (although there’s a lot of mid-sized publishers spread through Europe), but there’s a gaping hole in the MMO sphere. For someone bold enough to step into that hole, you could “own” Europe’s online gaming industry for the next decade.

Missed opportunity? Hell yeah.

At the end of the day, I eventually realised that NCsoft won’t do it for one simple reason: Korea still probably doesn’t quite understand how they managed to go so badly wrong with the Garriott brothers as the founders and owners of NCsoft North America, and wouldn’t dare risk another, independent, self-managing, ambitious subsidiary *anywhere* in the world. The Asian subsidiaries are all kept on a very short leash and get practically no independence from the Mothership (in Seoul) at all – the whole western conceptualization of subsidiaries is already anathema to the Koreans.

If anyone out there is interested in taking over Europe like this, drop me a line. I’d love to join in.

As he says, it’s an “interesting” challenge. Oh, yes. He invited me to blog about it (yes, I know – it’s a way of avoiding paying consultancy fees, but what the heck), so here’s some thoughts. At least this way I can record/archive some of what its like to be a recent Graduate before I get so old that I completely forget where they’re coming from.

(I’m not a recent grad, but I’m not yet old enough to have forgotten being one)

Where do you start?

In the past, I’ve seen people start with the management team. Then move on to the senior staff (hey, he’s got 10% of the company to play with), decide who’s needed, fit them to potential projects, etc. And finally – working with all of those people in place – finding and hiring all the Grads.

But … my first inclination would be to play to the strengths and weaknesses of the majority of your staff. In a brand-new startup with a team that don’t know each other the influence of each individual on the overall success/failure is disproportionately strong. Over time, as things become more settled, influence starts to becom proportional to seniority, experience, and knowledge. But not initially.

i.e. in this case the graduates.

Graduates

In my experience, graduates everywhere (including at least some parts of Asia, although I’ve mostly experienced Koreans not Chinese) are young, naive, eager, foolish, and fearless.

Specific universities mould their grads into having a very different set of characteristics, but assuming you’re picking bright, interested people, then those 5 are always present no matter where they schooled.

Personal Projects

They thrive on being given their own little projects that are their total responsibility. I think this is driven by two things, certainly in tech. Firstly, a fear of becoming the invisible cog in a giant machine that all adults have appeared to be to them, at a time when they’ve only recently found themselves and found their own uniqueness.

Secondly, I think most grads find University is the first time they start to experience personal responsbility, a move away from the family, no longer entirely dependent upon (and sheltered by) their parents. Some people become very independent during uni, others only just dip their toes in the water while there. In most countries, uni straddles the age of majority, and grads find themselves starting to be treated as adults by their society – one of the biggest parts of which is the expectation that they will take personal responsibility.

Clone Wars

I think a lot of people in this situation feel tempted to embark on a clone of a known game. The idea is that this will make up for the lack of experience by obviating the need for decisions on key game design and implementation issues: you don’t have to think, you just just play game X an extra time and “do whatever they did”.

That can work. As a recent example: so far as I can tell, it’s what a lot of the early F2P Chinese developers did – cloned Korean F2P games and just tweaked the “shallow” content (story, plot, theme, geographical location, etc – all the non-programmatic stuff). They’ve all done very well out of this.

However … as soon as market expectations ramp up, cloning becomes extremely difficult. You cannot afford to get “stuck” because you can’t figure out “how” the original game achieved something. With a team of veterans, you have an encyclopaedia of knowledge of techniques in their heads, and usually for each trick the original developer used at least one person on your time already knows that one. Where that doesn’t work, all your veterans each have a bag of tricks and hacks and band-aids that they can use to fudge it; nothing will slow them down for long.

(incidentally, China is probably well into the secand wave of MMO development by now, meaning that new studios there have no chance of doing the “clone + make lots of money” route; the developers that did that are now worth billions of dollars, and they’re already pushing the minimum quality bar up very, very high)

In the end, I think cloning is a bad fit for a bunch of grauates. If you get the timing just right, they’re a very cheap workforce to do it with, and they have too little self-esteem to object (see below). But at any other time, it plays on their weaknesses, and invalidates a lot of their strengths.

What graduates are good at

Grads are great for churning out large amounts of repetitive content. To them, everything still has a newness and freshness that makes even boring tasks interesting (up to a limit). This is partly why they get so “abused” by companies “eating them, chewing them up, and spitting them out”: they’re a cheap but skilled labour force. The mistake a lot of companies make is that grads are also smart enough that they see what’s happening. They’ll eat dirt for a while, having decided that it’s a fair exchange for the work experience and the knowledge they’ll gain both immediately and later.

I think a lot of companies are surprised that despite being more willing to eat dirt than other workers, grads also tend to rebel much sooner. In their minds, it’s a contract, and if the company doesn’t hold up its side of the bargain, they can easily go elsewhere and try again. Older workers have ties (families, fear of finding an equal new job, etc), but grads are both too young and too inexperienced to have picked those up; they can leave easily (or believe they can).

(IIRC South Korea has an interesting take on this: the grads can’t leave, by law, at least in the game development companies. Many of them are avoiding doing their National Service by working at a “critical industry” company instead – if they quit, they’d have to take up their NS place and run around in the freezing cold shooting at each other. Although it only buys the companies 2 years of immunity per grad, I’m sure that has been a huge boon to the SK tech industry)

Grads are also great at innovating, especially in stupid ways. They don’t have wisdom, so they don’t know that stuff won’t work, and will happily do it. Older/maturer grads start to develop suspicions that things might not work, and still charge ahead, but with some doubt; younger ones don’t even realise there’s a possibility of failure.

It’s a bit like an early hand-made gunpowder cannon. It can be a total disaster. And it can rarely be channelled, certainly it can’t be aimed with precision (by definition, the grads ignore the channelling efforts of their managers). But it can be pointed in vaguely the right direction…

Grads also don’t mind having their feel pulled out from under them so much. Upheaval and U-turns by management can give more senior staff cause for fear, especially those that have experienced incompetent management in the past. Where your management is strong, and gifted, and making a difficult decision to U-turn early in response to new realisations / better understanding of the situation, you can end up having to put a lot of work into allaying the fears of panicked workers. (of course, many good management teams underestimate the need for this, blindly expect their staff to trust them implicitly (ha!), and cause an even greater panic, and/or catalyse individuals into becoming the worst of themselves. Then they fire some of their best people, naively thinking they’re getting rid of the worst).

I’m not saying Grads enjoy this, just that they handle it much more easily (although some love it – it’s giving them *even more* of that all-important “real-life work experience” and the coveted “industry knowledge”).

Middle Management

A little story: when I was the CTO at one startup, the majority of our first fifteen or so employees were doing their first or second ever full time job. If I’d had the choice, I wouldn’t have done it that way. Not because of complaints about the people (people are great or terrible largely independent of their level of experience), but because the *collective* lack of experience made the overall team a lot less effective and a lot more fragile than it should have been.

(by the way, this story doesn’t reflect well on me :). I’m sharing it in the spirit of “let’s all try to avoid making mistakes like this in future, shall we?”)

One recurring issue was that the CEO would complain at length of the pointless waste-of-time crap his staff were getting upset about. He’d bemoan that these were tiny issues, that happened all the time, in all companies, and why were we obsessing over them so much? I objected greatly to this attitude w.r.t to our staff, that it was their fault and that they were weak and stupid to get upset – and that their distress was an irrelevance, and to be publically belittled and privately ignored. With hindsight I think that incited me to overreact on plenty of occasions, but … leaving aside the sentimental aspects, he had a good point.

This went on for many months, and at the time I could think of lots of things that could explain why these issues came up – and pointed to ways of solving or avoiding them – but the recurring thought was always: we wouldn’t even see these issues if more of our team had had more real-life working experience. I think we both agreed on that, too. In the darkest hours, he even muttered about considering firing the entire company and hiring an entirely new staff, of similar size, but of “better, more mature” people. If I remember correctly, we’d fallen way short of targets so he was under a lot of stress and just wanted all these organizational problems to “go away” so he could focus on the stuff he loved, the product design and the marketing.

I don’t think that company ever really managed to sort it out, at least not for several more years, just going by the quantity and quality of people that resigned or were “let go” (whether that means redundancies, firings, or whatever) over the years.

I had some vague ideas for solutions at the time – I could see that the problems were catalysed by the attitudes of the most senior people in the company, starting with the CEO, flowing through (and added to by) myself and the rest of the management team, and then down through everyone’s social and professional relationships to encompass the whole company. It was clear that even the best of people couldn’t always refrain from “putting the boot in” when crap flowed to them, making a bigger ball of crap for the next person along. It was subtle and pervasive – no one individual felt that he or she was responsible for what was happening, because their contribution was so small. But that’s the beauty of a team, isn’t it? The whole is more than the sum of the parts… In the end, I decided (amongst other things) that if we couldn’t reform from the very top down, we’d never be able to break out of the vicious cycle. I tried different ways to get the CEO to change, and tried to change myself, and worked hand in hand with some of the other C-level staff that felt similarly about the need for a top-down change, but I just wasn’t good enough to make it all stick. So in the end, I quit, just before the next funding round closed. Wherever the company was going to go with this new money, I no longer felt I could be part of it.

Over the years since, having seen other situations both earlier and later in companies’ and teams’ lifecycles, I’ve come to suspect that the solution might have been less diffcult than I’d thought. That all it needed was one simple thing: Respect. Easy to say, not so easy to visualize and enact, of course. In a company – a startup especially – that means: Complete transparency, Trust, Faith, and (this one was a killer at that particular startup) self-doubt whenever you find yourself disagreeing with your peers.

At that startup, I saw over and over again people with huge amounts of experience – in some cases decades’ worth – being laughed at and ignored by people with none. In the other direction, and no less forgivably, I saw people assume up front that their colleagues were “too stupid” to understand the task at hand and so go out of their way to hide the very existence of it from them. Plus plenty of other activities that ranged between those extremes. At the time, I objected to these things on a general professional level (and sometimes on a personal one); I even managed to fire someone who was a particularly strong offender – but I did it too late, and too slowly. What I didn’t fully appreciate, I think, is quite how *directly* critical it was to the overall wellbeing of the studio itself; I thought it was just one (particularly emotive) aspect amongst many.

And it was lead by the CEO. It got so bad that the management team ended up having two weekly meetings: one official one with all the C-level staff, and another, secret one preceding that one, with the same people – but without the CEO. It was an open secret. All the staff knew about it, except for the CEO, of course. It was a combination of damage limitation on our part, and playing him at his own game (he liked to play us all off against each other, whether deliberately or accidentally, drawing attention away from himself). So, we’d share critical info that we needed but he was refusing to disseminate. We’d prep each other so we could provide a united front on difficult company issues that we knew he’d try and twist into an emotional issue and wriggle out of, or belittle. We’d even occasionally select a fall-guy from among ourselves, someone to put up a strawman argument on new issues, because we’d found it was one of the most effective ways for him to accept suggestions and solutions that weren’t his idea: if he had the opportunity to first demonstrate his own authority by putting someone else down. I still don’t know if anyone ever told him about those meetings, although I’m sure someone must have sooner or later.

Obviously, there’s more, but that’s where this story ends. Any new company of Graduates is (I sincerely hope!) going to have a much more clued-up CEO. But, tempting as it may be to read the story and think it was all the CEO’s fault, it’s dumb to think that one man could control a whole company so completely: there was a collective problem as well. And IMHO it mostly came from the inexperience and insecurities and uncertainties of many of the staff. If so, then the tendency will be there for similar problems to develop, and fester, with any large body of inexperienced staff. The middle management for the new company need to read this story as a parable of an extreme situation they must never get anywhere close to (just to be clear: I’m not singling out non-managers as the problematic ones here – the senior management at that startup included people who were doing their first job too).

They need to not only rise above it (that’s enough to be effective as a company, but not enough to stop the rot setting in, as I think we found out) but also have to step in early and often to prevent bad habits and bad cycles forming. I think we were all too hopeful and happy in our jobs early on to feel enough fear and forsee how much “the little things” were in danger of snowballing; sure, we might have got lucky, it might not have happened – but the risk was big enough, and the outcome severe enough – that we should have snuffed it out right at the start.

That’s going to be a tough job. You have to act a lot more like parents and a lot less like colleagues some of the time. Again, with hindsight, I guess this makes a lot of sense – didn’t I just say at the start that recent Grads are still only half stepped away from their parents, or perhaps even less? Why should it be a surprise that they’re going to need more parent-like support than people in their thirties, forties, and fifties?

And, in contrast to the startup I described, I would hazard that I’ve seen at least one company where the most senior management were more than capable of it, but their middle management were not. It took longer for things to go wrong, it was a gentler slide, but a similar set of problems eventually engulfed them. So it’s going to be doubly hard for the guys running the show: it’s not just “can you do it?” but “can you be sure that the people who are reporting to you are themselves doing it, every day?”.

Projects

Go for the stuff that allows open-ended innovation, and large amounts of creative content. That’s what Grads are great for, in the abscence of anything else.

Make sure – above all – that you have a thriving “internal incubation” system, where everyone – and I mean “everyone” – gets to work on purely explorative internal game designs at least one month per quarter. Perhaps have 50% of your staff at any one time working on non-milestone-driven pre-production experimentation. Kidnap a Google software engineer and bribe them into telling you in detail exactly how the infamous 20% time works (and doesn’t) – don’t rely on the rumours – and work out how you too can afford to sacrifice so much of your time to apparently “pointless” work.

Because until you’ve got your company established, and some of your grads have found their natural places both professionally and within your specific company, you need to do everything you can to keep from killing their spirit and optimism. If you lose that, especially for a new company, you’re screwed. With such inexperienced staff you have very little else to stack the odds of success in your favour. You’ll produce unimaginative, weak games, and the way this industry works, everywhere, your first game is more important to your future than any other single game you do.

Wrap up

That’s enough free consultancy for now. I haven’t said anything about team leaders (lead coder, lead artist, art director, etc), nor about the mix of skills to look for in hiring the Grads themselves. But I think there’s more than enough meat in what I have said to keep you all going, and to give me new things to think about for the next few years.

When we made Perplex City, the Alternate Reality Game, I learnt a lot of basics about VM just from going out there and trying so much new stuff on a week-to-week basis. It was a small startup, so (at least at first) everyone got involved in everything, and you got to see the things that crashed and burned in as much detail as the ones that shone like gold (this was before the company grew enough that people started covering-up the failures).

Viral Marketing is so much abused both as a phrase (used meaninglessly) and in production (used to spam people’s addressbooks) that it’s become a dirty expression these days.

But it’s an essential part of the New Wave of strategies for designing, making, and selling computer games profitably. Anyone hoping to be successful at challenging the industry’s Stone Age reliance on “big budget, bigger teams, binary hit-or-miss, massive risk” approach needs to understand and adopt VM.

The Science of Marketing

Marketing is a science, plain and simple. It’s more scientific than almost any other part of modern business. Even accounting is less science-based than Marketing (did you know that most Accounting isn’t based on laws and mathematics but on hand-waving, “do whatever you want so long as you can invent a jusification for it”, and arbitrary principles that get changed frequently by the governments?).

If you haven’t already, get yourself a copy of Sergio Zyman’s “The End of Marketing as We Know It”. It’s aimed at busy marketing people; it’s a short, easy to read, book. There’s no excuse for anyone not to finish it. He explains neatly the “marketing IS a science, it’s just that lots of people don’t realise this” concept. The “end” he refers to is the end of people treating it as an art-form – because anyone approaching it scientifically is already wiping the floor with those who don’t.

(Sergio was the Marketing Director for Coca Cola. Right or wrong, it’s an interesting read)

Myths of Viral Marketing

• Usability / Low barriers to entry of the product are essential
• It has to be easy to spread virally
• There has to be benefit to each user the more people they share the product with

None of that is essential. So, arguably, none of it is important. It’s very similar to making a hit AAA video game, because if you screw up everything else, it doesn’t matter, so long as:

you provide something that the individuals perceive to be of a value that will make them look good to their friends

If you like, think of it as the “critical decision point” within the Viral Loop concept. That single value-judgement, in the mind of the consumer, is what drives your Loop into a virtuous circle, or into a vicious one. It provides a base percentage chance of the product spreading; everything else at best modifies that percentage up or down, but cannot overwrite it completely.

Perception is EVERYTHING

Let me repeat that statement, with some hilights:

you provide something that the individuals perceive to be of a value that will make them look good to their friends

In case that’s *still* not obvious enough (shrug; there’s so much misinformation and prejudice around VM that I’ve found its often hard to get through to people, past their cynicism, skepticism, and revulsion…):

1. it DOES NOT MATTER what *you* think; it only matters what goes on in the CONSUMER’S mind
2. …it doesn’t matter what ANYONE thinks; this revolves around “what WILL my friends think of X” – and that is OFTEN misaligned with “what the world thinks about X”, “what *I* think about X”, or even “what I would like my friends to think about X”
3. Even that is just a stepping-stone to, or a vector for: “what will my friends THINK OF ME”
4. VM is not about your product
5. VM is not about your brand
6. VM is not about “a need, satisfied” (although it can be, coincidentally)
7. VM is about a personal conversation between two people you’ve never met (and never will) in which your product just happens to be a convenient bargaining token to help one of them get more sex (or popularity; which can ultimately be converted back into: more sex)

Great; but how does this theory help *in practice*?

Need to Know: Viral Loop

If you are not intimately familiar with the VL, and understand how to use it, and how to improve it, etc … go read Andrew Chen’s introduction to Viral Loops.

Some things you need to internalize for yourself about VLs:

1. You determine the VL through *analysis*, not wishful thinking: you make your product FIRST, you make the GUI FIRST, you make the website FIRST … and then you sit down and look at it and ask “So … what’s the VL here? And how could it be better?”
2. The VL is a list of percentages, and spread-factors: each one is the “probability that someone will progress to the next point” and “the number of people it will spread to, IF it spreads”.
3. Maths can predict the future, with VLs: you multiply all the bits together, and run a recursive mathematical analysis … and Maths can accurately predict the “maximum number of people this will spread to”, and the minimum, etc etc. This is awesomely powerful. It’s also quite tricky Maths, but a good spreadsheet can do surprisingly large chunks of it for you. (hint: it’s the same basic problem as working out “with the current rate of interest, how much money will I have in X years?”; solutions for this kind of thing are built-in to most spreadsheet software)
4. …especially when you monitor the “actual, observed, percentages” and put them back into your analysis. This is not guesswork: it’s a science. And the science of recursive growth has been studied for centuries, and it’s extremely well known and understood by now.
5. The VL tells you “how much things will grow, given the virality”; they tell you nothing about how things will grow in other ways (e.g. marketing campaigns, good PR, etc) – you still have to do ALL the traditional marketing analysis and planning, and merge it in to your VL as the “total number of current consumers” (which will change each month as your traditional marketing brings in big chunks of new people on its own)

Need to Know: Exploitation is a gimmick

VM got a bad name very early on when it was used to spread utter crap “non-products” to huge numbers of people. It got a reputation for being vapid and meaningless and a cynical abuse of the consumer.

Well … wake up and smell the roses. The same thing happens *every* time someone discovers a new vector for marketing. It happened recently with the iPhone platform, with a wealth of mediocre rubbish making its authors millions of dollars of revenue. The goldrush is always bright and alluring, but brief and ultimately empty, and when it goes, it implodes in an instant.

If you think VM will “save” your crappy product, forget it. You’re about 10 years too late. Make a decent product, and try again.

Myths … revisited

OK, I lied: those myths aren’t “irrelevant”. At least … they *are* irrelevant up until the moment you get your core VL working, and growing successfully.

But … once you hit that point, they suddenly become very important, as they provide low cost ways of making big positive changes in the overall success of your VL.

Just don’t forget that they are not the VM itself: e.g. don’t get so obsessed with “ease of use” that you suck out the part of the product that was making the consumer look good to their friends.

(I’ve seen that happen. More than once)

Putting VM into Practice

The best starting point I can see for a VM campaign is to look at the conversations. This is nothing new; Marketing in general is often described as being all about the relationship of the consumer with the brand – and specificially about the conversations the consumer has with other people … the ones that mention the brand.

To shape your VM strategy, think about the conversations people might have about your product.

Then throw them away, and remember the core point in this post; think of the conversations people might have that would make them seem cool, clever, funny, interesting, and attractive to their friends. And work out ways that *the idea of* your product could help those conversations.

Remember: the idea of the product may be more important *to the conversation* than the utility of the product itself. Not to the actual sales that you make – they still need *the product* to be the most important. So, be wary … this is where a lot of the abuse starts – the realisation that you can spread a product without it actually even doing anything. But what’s the point of spreading a useless product? Everyone may know your name, but if they hate you, and won’t buy it, you’re no better off.

Once you have your conversations, look at how – physically – someone could do virtual product placement of your product within the conversation.

For instance, if I’ve got an iPhone app I’m telling my friends about, and they think it sounds interesting, I need to pull out my phone and *instantly* show them the cool stuff. Not fiddle around with menus and crap – my friends getting bored and just nodding with fixed smiles to humour me.

But then again … if its not an app I would show you that flippantly, or if it’s something that only one friend would want to see but would bore the rest of them, and I’d want to carry on talkin to everyone else about something else … maybe I’d rather hand you the phone and let you see for yourself how it works, and I want there to be lots of menus, and patient explanations, so that I don’t have to stop talking to re-engage with you.

And think carefully about the sorts of things that make anyone more popular, more often:

• Impressing a group of people, all at once (huge social value right there), rather than just an individual
• Making people laugh
• Telling people about themselves
• Making one member of a group look good / clever / attractive to everyone else
• Being generous; giving people something of value, for free
• Improving people’s lives in small but memorable ways (making things easier, the little things more than the big ones)

And things not to do:

• Bore people
• Exclude people
• Devalue people (spamming addressbooks? BAD IDEA. Funny example recently: Ed Castranova got de-friended for viralling his contacts with a mail that said they weren’t important enough for him to read their emails … unless they paid him, per email, in Serios. FAIL!)

And … well, I’m sure you get the idea. Really, this is all about helping your consumers to be the most popular that they can be. You can say that’s a cynical, and “bad” thing, but at the end of the day … what’s so bad about making people happy?

PS

This post is all Andre’s fault. We were talking about Social Games, and some experiments I’ve been doing recently with iPhone development. Particularly about how I’m about to quietly launch something fun but very simple, with some basic viral hooks, and see what happens. We got to talking about how and why it would / would not work, and what ideas I had for tweaking it in EITHER outcome.

If you have an iPhone, and want to be on the initial invite list, email me. Even if I know you’ve got one (its hard to remember who has and hasn’t; and you might get an invite anyway if I misremember you as having one. Oops).

(NB: my experience on the publisher side is pretty short, just a year spent working with Thomas and Diane as one of the people doing due-diligence for them on the incoming pitches, and doing milestone-reviews on the signed projects that were in-development.)

Picking a couple of their points to add to:

2. Show Passion

I want to hilight the part about not trying too hard to “tell the publisher what they want to hear”.

Every publisher is (potentially) going to make huge sweeping changes to your proposal long before they even put it before the internal funding review committee. They assume this. They will listen to your first pitch, and will already be thinking about places it needs changing, and how they’re going to work with you to improve those.

What does this mean?

It means that you need to go in with a strong, clear, unapologetic design, and not be afraid that it is “not the right thing” in lots of small and not so small ways. Yes, check that the 30-second description is of interest to them, i.e. the most core essential aspects, but don’t worry about the rest – they’ll tell you what’s wrong, and give you the opportunity to change the bits they don’t like.

Unless you can read their minds, don’t try to second guess what they want to hear. IME, many developers are a lot worse at second-guessing the publisher than they believe themselves to be. (modulo the large number of old-hands who’ve done this lots of time and really can second-guess – but they wouldn’t be reading the article anyway :)).

In the end, this means that when the publisher mentally strips away the bits they expect to change, there’s nothing left, because you were too timid in staking out what you wanted to do. And – quelle surprise! – they quickly lose interest in you.

3. Show Prototypes

IMHO in your prototype (and partially in your pitch) you’re going to be judged on a broad range of things. Whether the game is fun is only one of them. In particular, I’ve seen people ignore too many of these, or go the other way: try and prove everything, spending vast amounts trying to write practically an entire game as their demo. Inevitably, when you show a publisher a seemingly complete game they’ll want changes made, if nothing else just to justify their own creative involvement, and so the vicious circle of spiralling costs starts.

Main things I remember looking for / at (off the top of my head):

1. you know what a computer game is (this isn’t facetious; I mean do you know what a normal game menu is like? do you know what the “standard” control system is for your genre of game? do you know the difference between a good game and a bad one? etc)
2. you know how to make games from an implementation POV (”ability to deliver” is almost everything in this industry)
3. you know how to cut features brutally to achieve a shippable (the same reason as above, except that this one deals with the many times that you are prevented from delivering by external factors you have no control over – and so you have to somehow change the rules of the process in order to make it work anyway)
4. you are good at accepting direction and showing that you did what was asked without twisting it…
5. …or that you’re so much better at game design, marketing, implementation, production, and delivery than the publisher that they’re never going to need to impose direction upon you
6. you have a proposal / idea that is somehow unique
7. your output is consistently good in each core discipline (i.e. you’re not noticeably much worse at one of them): art style, novel game ideas, core gameplay, user-interfacing / usability, implementation / stability, technology, production/timelines/delivering what you say you will (you’d be amazed how many people shoot themselves in the foot by making promises to the publisher BEFORE even signing a contract, and then fail to deliver on them! That’s a great way to guarantee you won’t get signed)
8. irrespective of what your people have done before, this particular set of them working together as a team is going to “gel” well

Depending on your situation some or all of those are already self-evident based on your portfolio of previous work as a team. Up to you to work out which may be weak or non-obvious. It’s great to get independent industry people (friends at other companies, for instance) to tell you what is not obvious to *them*.

Then you decide which of these “things we have but aren’t self-evident (so we need to show them explicitly)” or “things we don’t have (so we need to give some confidence that we WILL have them, or will make up for it somehow)” you’re going to deal with in your pitch, and which in your prototype(s). Again, up to you what goes where, but a good rule of thumb is to show something in the way that’s least effort for you to show convincingly. Don’t kill yourself trying to convince on every point and ignoring the cost-of-producing-it – remember you’re not getting paid for any of these prototypes.

Above all, remember that a prototype is wasted money. There is no way that you will ever get paid for prototyping, no matter how you look at it, unless th emoney is arranged before you even start making the prototype. No publisher will say “I love it – here’s the dev contract … oh, and I see you’ve spent lots of money getting this far. Here’s some free cash to ease the pain you’ve faced the last 6 months”.

On the subject of money: cost is negotiable. Many of those other items are not. If you’re not competent to make a game it’s going to be much harder to correct further down the line than if you’re simply asking too much money and we have to renegotiate a contract with you. Sure, contract negotation may seem difficult and expensive to YOU, but it’s practically free to US. But “hiring additional programmers into YOUR teams, and firing some of your incompetent staff” is a very long way from being cheap, easy, or desirable for us.

IMHO, you’re better off – initially – getting the above things to look good even at the cost of going in with a request for funding that is much more than the publisher wants to see.

5. Timing

1. pitch everyone early, but arrange to meet them late, so that they all synchronise at the END not the START
2. aim to get down to a shortlist of publishers you’re talking to as a “round 2″ AFTER meeting all of them once, and tell publishers you’re cutting down the list. No publisher likes to be “wasting their time” talking to a team that’s talking to 20 other publishers and is very likely to sign with someone else, but knowing they’re on a shortlist won’t hurt (their egos) so much.
3. perhaps non-obviously, sometimes f your pitch is weak, it can help if there’s no-one else you’re talking to, so the publisher feels they have the luxury of taking time over you. If they like you it might give them time to work out a way they CAN work with you
4. conversely, if your pitch is strong, get everyone pitched ASAP preferably all in the same week. Pitching at GDC is probably a great start. But getting publishers lined up to speak to you all at the same time is, as noted, pretty tricky
5. find out what the lead times are for the publishers you’re interested in, and fit yourself within them. Each will be different. If they don’t happily and eagerly tell you this, you’re possibly talking to the wrong staff at the publisher and need to get yourself a better contact, fast – the “right” people will tend to be very upfront about this, because it wastes their time if you come to them with a too-fast or too-slow set of expectations
6. ditto each will be different for different “templates” of project. Some random templates are:
   • AAA $20m+ project
   • AAA $2m+ project
   • Casual project
   • Online project
   • 3year+ proejct
   • 2year+ project
   • 1yr+ project
   • …etc

NB: that’s varying in some cases by genre, in some cases by cost, in some cases by development time.

The key thing here is that a publisher is typically a tree-hierarchy of decision makers, with local territories having discretion up to a certain size/time/cost before they have to defer to a more senior person / territory. Just like bank managers and arranging overdrafts / loans, back when the banks gave large discretion to local managers: sometimes you *can* get someone to approve over their normal limits if you’ve got something amazing, but mostly it helps to match your pitch/project size to the seniority / buying power of the individual person at the publisher who you’ve got the relationship with and who’s sold on your game.

How many people play online games globally in 2008?

A simple answer

…and with a quick mental calculation I estimated 1 billion *unique registered accounts*. (I’ve been tracking and calculating this stuff a lot recently). That wasn’t good enough – they wanted something to put in a press release, so they wanted a methodology and verifiable data.

So, I went and did the calculations properly, and found:

There are approximately 1.5 billion unique registered accounts (virtual players) of online games around the world in 2008.

They still needed to see the methodology and the figures, of course … here goes!

Some … wrong … answers

Someone at Techcrunch claimed last year that “217 Million People Play Online Games”, by misusing the research that they were referring to. You only have to follow the link to the *press release* of the actual research to see how wrong that is.

The research merely claimed that 217 million people visit a selection of American and European websites that have content that talks about online games, and which *in some cases* actually have some web-games on their site.

The majority of online games were not included in the research. The figure isn’t particularly useful on its own.

A simple question?

The first thing to realise is that there’s no sensible way of answering the question literally. A couple of years ago, Raph Koster did an updated version of the explanation for this problem (it needs updating again by now to take account of how the industry has continued to evolve since he wrote that last version). If you haven’t read it, and want to understand the details of why people argue this stuff endlessly, go have a quick look at his post.

But there is a sensible way we can re-phrase the question to become one that we CAN answer:

How many unique virtual identities are there that are playing online games this month?

Virtual Identity … what? No, that’s not what I wanted to know about

Actually, maybe it *is* what you wanted to know about.

In the real world, we never actually count people for anything (except if we’re physically smuggling them past Border Control, I guess); instead, we count Identities: verifiably unique records that each correspond to no more than one person.

In the real world, one ID does not equal one physical person, even though it is “approximately” that way (bear in mind that even governments have so far proved incapable of legislating + enforcing that concept, despite having tried for the last few thousand years).

In the online world, the concept of Identity is abstracted. This is all the fault of “computers” and especially “programmers” and “database vendors”, who couldn’t cope with the amount of info required to fully represent a single Identity (and as time went on many realised that they did not want to). They cheated. And so, from the earliest days of the internet (and before – back in the days of BBS’s), everyone has had multiple ID’s.

On average, each of you reading this probably has something like 200-300 separate online identities. On average, each of you reading this probably BELIEVES you have something like 2-3 separate online identities. Factor of 100 difference (have fun counting them…).

Those virtual identities are the lifeblood of online services. They are countable, they are serviceable – and they are uniquely and individually chargeable (even when several of these identities may represent just one real-world human: if the identities are separate, then you can charge multiple times, and many people really do willingly pay several times over!)

Many of those identities are “inactive”, and unlike people, the corpses of Virtual Identities do not naturally rot and disappear, they live forever – and can be brought back to life at any moment by the owners. They’re all real – they are still verifiably there – so for now we’re going to count all of them.

(personally I prefer counting “active identities within the past month”, but more on that in a later post. Counting in billions is fun for now…)

How many virtual identities play online games?

Start with the big guns, going from their own official announcements.

Individual games: 400m

Kart Rider = 160 million
Habbo Hotel = 100 million
Neopets = 65 million
Maple Story = 57 million
Club Penguin = 20 million
Runescape = 10 million

+ others I didn’t bother looking up

Subtotal: 412m

Publishers who declare registered directly: 1200m (or 800m)

Then add in the big publishers, going from their official announcements

9You = 120m
Acclaim = 3m
Bigpoint = 30m
CDC Games = 140m
CJ Internet = 23m
Disney = 12m
Gameforge = 60m
Gamania = 10m
GigaMedia = 9m
Gpotato = 2m
HanbitSoft = 8m
K2 Network = 16m
Mattel = 11m
Moliyo = 7m
NCsoft = 2m
NeoWiz = 7.5m
Shanda = 700m (*)

(*) (note: using the active and paying ratios below, this would be approx 150m or 300m, which is such a huge difference (and stands out as massively anomalous compared to industry standard – even for other Chinese operators) that I’m going to treat it with extreme suspicion and go with 300m instead)

Subtotal: 1158m (or approx 800m if we downgrade Shanda by 400m)

Publishers who declare active or paying: 100m

Then add in the big publishers who declare “active” or “paying” accounts instead of “registered”:

As well as just general industry knowledge on this stuff, I have official figures from half a dozen publishers that let me calculate Registered:active or Registered:Paying ratios, so from averaging those I get conservative multipliers of approx:

Registered / Active = 4
Registered / Paying = 40

Gaia = 24m (6m active)
Giant Interactive = 68m (1.7m paying)
NetDragon = 14m (3.5m active)

Subtotal: 106m

Facebook + Web gaming = 200m

Then look at the big Facebook games-publishers, and the online gaming sites from the comScore study:

Yahoo Games = 53m
MSN Games = 40m
Miniclip = 30m
EA Online (inc. POGO ?) = 21m
SGN = 40m
Zynga = 55m
…
Others (from comScore report) = 78m

Subtotal: 173m

Final tally

There are approximately 1.5 billion registered identities in online games in 2008

How many “real people” is that? Well, as noted above, the percent of registered accounts that are active is around 25%, so I would guesstimate (really really rough figures now!):

There are approximately 375 million people in the world who play online games.

The theoretical current maximum playerbase for a subscription MMO would be somewhere in between those two figures (plenty of people pay for 2, 3 – or as many as 10 – accounts, as Raph noted).

The theoretical current maximum playerbase for an F2P game would be the bigger of the two figures, obviously.

WoW (World of Warcraft) still has a long way to go, people…

Exclusions – what did I miss?

There are plenty of operators that are not counted in the above which run games in countries not often associated with online gaming (e.g. Vietnam, Russia, etc) – and yet their figures are significant (I’ve been tracking them for a while and they’re growing very fast).

I didn’t bother including them because even in aggregate right now they probably wouldn’t be able to shift that 1.5b figure any higher.

There are also some who are using a combined service only part of which is games, e.g.

Tencent = 350m users of the IM client which integrates many online games

…which I haven’t included at all. Feel free to take my headline figure and add that on! (and add back in the 400m accounts from Shanda that I discounted / didn’t believe)

Background

Roughly a month ago Jussi Laakkonen published a list of $350 million invested in year 2008 into virtual worlds, casual MMOs, and casual & social games. Based on US-centric sites, it missed out the majority of European deals. So, inspired by Jussi’s excellent idea, I then posted my own list of European deals I’d been tracking (which also included some extra things on the fringes of Jussi’s initial set). We decided that the right thing to do would be to put those lists together.

The extra things I’d been tracking were mainly in MMO investments, technology vendors, and support services (e.g. payment providers). I also wanted to add in mobile gaming (especially in light of what’s happening with the iPhone, the iPhone investment fund, and the Blackberry investment fund). These are the areas I’ll be looking into more in the future.

Analysis on T=Machine

I’ll be doing some followup posts over the next couple of days, Jussi’s zooming ahead with his – check out his blog to keep up with his comments too.

Followup posts will all be tagged under “jussi vc deals europe”

Jussi’s Analysis

Jussi’s posted a great summary of the core data.

The data

The data on VC investments has been collected from publicly available sources including but not limited to

* VentureBeat
* PaidContent
* Virtual World’s Management
* Avista Partners’ video game briefing
* TechCrunch
* CrunchBase

The data was gathered by Jussi Laakkonen and Adam Martin. The data is most accurate for year 2008. Year 2006 and earlier years have been only covered sporadically and typically only for companies that have received follow-up funding in years 2007-2008 (IIRC the European data is complete from the end of 2005 onwards, as it started from around the time of Mind Candy’s first announced funding). The data is provided AS IS and the authors make no warranties or guarantees about its accuracy.

Download the spreadsheet:

* Excel format
* CSV format
* HTML format

1) Make it look fun and interesting and seemingly inclusive:

“MiniBar is a social evening in East London which offers people a chance to snaffle some free beer while discussing p2p, Creative Commons, web applications, social networking and general Web 2.0 (3.0) mayhem & fandango.”

2) …but require that signup has to be done in two separate places for two “halves” of the event:

“You can come at 5pm … You need to register separately here for this part.”

3) …and make the location a Secret, known only to the special few:

“Location
This location is shown only to members”

4) If someone attempts to signup for the (free) event, deny them, and demand 250 letters explanation (no more! don’t you dare go over 250 chars!) for why they are important enough / l33t enough to be allowed to come:

(the way meetup.com works, I can’t access this page from cache to copy/paste the text, sorry – you’ll just have to take it from me that it’s pretty abrupt, demanding you justify yourself without offering anything in return, or any kind of explanation of WHAT you are supposed to write, or WHY)

5) Finish your event description with not one but TWO content-less/broken links, and describe them as “more info”. For bonus marks: forget to hyperlink one of them:

“More Info at: OpenBusiness.cc and barcamp.org/minibar”

(the first domain there is hotlinked to: http://www.openbusiness.cc/minibar/)

NB: http://www.openbusiness.cc/minibar/ == a empty webserver directory on a webserver allegedly running Apache version 1.3.39 (!) – not impressive for a web/internet event.

NB2: http://barcamp.org/minibar == a webpage with adverts for 50 odd totally unrelated items, e.g.

“angled bob hair style
black braided hair styles
jc penny free shipping
trendy hair style
victoria secret free shipping”

(yes, really – Victoria Secret and JC penny. For a supposed BarCamp about startups and internet companies. Um … OK.)

I guess that’s another Web 0.1 example, then…

“As children develop, they make greater and greater efforts to adapt to reality, rather than distorting reality, as in make-believe play.”

The implication, contextually, was that ultimately as a child becomes an adult, their reality becomes fully adapted, and no longer distorted. That might not be the intended implication, but it’s interesting: I’ve been fighting against this since, well, since forever, really. And spending your life constantly distorting reality it seems to me is neither a bad thing nor a limiting thing.

Because it trains you to be good at two things: seeing how you might change reality, and believing that you CAN change it.

At one end of the spectrum, distorted realities make it much easier for you to visualize what is “possible” instead of what is merely “probable”, and that’s the essence of spotting opportunities.

Entrepreneurship and Seeing Change

(good) Entrepreneurs are constantly seeing new ways to “change the world” in ways both small and large. Often the change is small, but the effects are large, or vice versa. It’s often said that “you cannot teach Entrepreneurship”, and while I beg to differ, I have experience of actually trying it, and huge experience of arguing the concept with people. Mostly, the argument against the teachability of entrepreneurship is rooted in the inability to “make” people “become able to” see Opportunities.

I think one of the primary differentiators for having/not having that ability (irrespective of whether it can be taught) is the extent to which you see:

The world as it is

as opposed to

The world as it could be

and even

The world as I would like it

Looking at the Entrepreneurs themselves:

• Good entrepreneurs, in my personal experience, see the world always as It Could Be.
• Bad ones usually see it as They Would Like It To Be.
• Great ones ALSO see it as They Would Like It To Be
• Non-entrepreneurs see it As It Is

…with the difference between Great Entrepeneurs and Bad Entrepreneurs being mainly that the former *also* see the world As It Is, and hold the two visions in their head at all times, simultaneously.

Because the Great Entrepeneurs, while constantly (many times a week) spotting things that They Would Like It To Be, also – constantly – imagine how they might transform the world As It Is, usually by a series of steps, into that target. The Bad ones simply employ the tried-and-tested Hope plan:

1. Have Idea
2. ?
3. Profit

…which – let’s be honest here – occasionally works (usually if you simply get massively lucky with timing / outside events).

Entrepreneurship and Effecting Change

Why are some people better able to see how to make their desired changes come true?

I believe it’s largely driven by two skills. Firstly, the obvious one highlighted above – that the more practice you have of thinking about how you might change reality to fit what you want it to be, the better you will be at that process.

“Better” here means that you will

• have more ideas for each transform in the chain
• be better at recognising “good” and “bad” transforms
• process suggested transforms – and transform-chains – more rapidly (quick accept/reject)

The second skill is believing in yourself and your ability to change the world. Often, the successful changes that Entrepeneurs effect are surprising to most people – they question how that could even be possible – while *in practice* not being so difficult to achieve. Usually, this is because normal people see only the beginning and end of a sequence of changes.

To take a simple example that illustrates the kind of “impossible” being “possible” given some clever changes that I’m talking about, look at Freeserve. (NB: this is based on my memory of events more than 10 years ago, much of which I found out 2nd or 3rd hand, when trying to understand how Freeserve had achieved something that had eluded all the other ISPs – so take this as an example in theory, it may not be accurate in practice! Incidentally, there seems to be VERY little public history on Freeserve, how it started, and how massively it changed ISP / internet access in the UK – I’d be interested if any readers have seen any articles / interviews about the details of its inception?)

Freeserve … the first “free” ISP in the UK

When Freeserve was created in the UK providing “free internet access” in the 1990’s, it seemed impossible. They even provided a cheap local phone number that could be used anywhere in the country – so it was cheaper on your phone bills than calls to your subscription ISP!

Ahem. Except, it wasn’t the cheapEST kind of local phone call, it was partway between an “ultra-local” call (very cheap) and a “national” call (expensive).

And, in an unprecedented move, Freeserve had managed to get the telephone company to give them a share of the revenue from that particular phone number. For reference, at the time, if you wanted to get revenue from the telco for running a phone number, you had to get a number on the “very expensive” plan, where the telco would charge the consumer as much as 10 times the cost of an already expensive national-call.

Of course, given the huge volume of calls that then went through to that number, the telco made a huge profit out of the scheme – so it worked out in their best interests, and everyone profited. (although I have no idea how this was negotiated, or whose idea it was – and “persuading a telco to change their revenue model” is itself a problem I’d usually classify as “impossible”, so I’m guessing there was another, similar, chain of small changes that lead to this being acheived).

About two years before this all happened, I was working on a project to create a new ISP, and I’d got as far in breaking down the steps as to see that you HAD, somehow, to find a way to remove the “dual-billing” model from consumers (pay once for internet access, pay twice for the per-minute, uncapped (!) phone call too). I didn’t have the confidence to believe it was possible, and after running through some fairly crazy ideas (including looking into internet access via broadcast radio for downstream, and home modem for upstream), I gave up and moved on. With hindsight, at the time, I realised that I’d have hit upon the change-the-telco idea within another couple of months, and that I’d have had a clear year to find a way to ACTUALLY get a telco to change, and still be able to launch before Freeserve.

(for the record, that event finally kicked me into realising that the world-changing ideas I had all the time, and thought through as often as multiple times a day, were actually all realisable (potentially). Many people I know, potentially good entrepreneurs both older and younger than me, still don’t believe the world can be changed to their tune, they can only see the world As It Is)

How to … Influence People

This is a big topic; whole books have been written on it! (OMG!!1!!!!0).

But just to select ONE of the most powerful weapons: imposing a personal view of reality onto the reality you find, and living and acting as though your view of reality is the real one, and keeping at it until everyone else gives in. The real beauty of this being that if the only differences between your reality and the real reality are the beliefs of people, then it becomes a self-fulfilling dream.

This is basic sales-technique: it’s usually more effective to sell people on a shared belief than it is to sell them merely on a bunch of facts and leave them to guess for themselves whether those facts are real or not. But it takes a particular kind of personality to be good at imposing their desired reality (if that’s all you do, it tends to come across as mere bullying), and also at making it stick.

IMHO, people who spend more of their time adapting reality are much better at the “making it stick” part.

Conclusion

So, ultimately, one of the things that makes a great Entrepreneur is huge practice with very much NOT adapting to reality, but instead adapting reality to their own ends. And it helps in ways beyond the obvious (spotting new opportunities).

If you want to be a great entrepreneur, I’d recommend you start dreaming more, and make your dreams more vivid and concrete, and try to change the world to fit them, rather than the other way around.

PS: from reading this post, all of which has been written between going from that slide of the presentation to the next, you may come to think that it can take me a long time to read a presentation. You’d be right. This is partly why I’ve taken to transcripting in real time every conference talk I attend (and usually publishing them on this blog) – the smallest comment can spark off so many thoughts that I miss the rest of the talk, and it’s a way of giving me a chance to hear the whole talk.