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Tuesday, Jan 5, 2010
So...how about that STEAM sale?

There’s a funny quirk to digital distribution that people are starting to pick up on: you make a lot of money by lowering the price of a game for a short period of time. The idea of a temporary sale is called price discrimination, where you take a calculated loss in order to attract a customer who would otherwise never buy a product. An essay on Black Friday Sales by Arnold Kling explains, “If you need something now, you have to buy it whether or not it is ‘on sale.’ But if the purchase is discretionary, you may only buy it ‘on sale.’ The store keeps its prices high ordinarily, in order to pick up profits from the price-insensitive shoppers. The store puts items ‘on sale’ on rare occasions, hoping to pick up profits from price-sensitive shoppers.” Temporarily dropping the price means that you can leverage a lot of product at people who would normally denounce it as too expensive, and you can pull those prices back up to make sure that you don’t lose money to people who would’ve paid full price anyways.


The weird thing about this principle when applied to digital distribution is that a sale will generate enough buzz about a game to make people purchase it even after the sale is over. You effectively create new customers by dropping the price temporarily. Consider the World of Goo experiment where the company announced a “Pay as Much as you Want” sale. A Rock, Paper, Shotgun article by John Walker on the phenomenon noted several interesting behaviors. Minimal cost was $ .01 for the game. You could pay them however much you wanted on top of that. More than twice as many people chose to pay between one and two dollars than those that chose to pay between one cent and one dollar. PR from the sale caused a boost in sales at both STEAM (of 40%) and on WiiWare (of 9%). Both services charged the usual $19.99 for the game and neither offered a physical copy. News websites that noticed the sale reported it as a bargain along with the usual gossip. Profits after one week for an item that had been on the market for a year came in at about $100,000. That’s not even accounting for the numerous benefits of distributing that much product. If World of Goo 2 or a different 2-D Boy project was going to be announced, they would’ve increased potential consumers for that game through simple brand awareness.


A much larger example is Valve’s online service STEAM, which is a digital store, update service, and game client all in one. All STEAM games automatically patch bugs. Once you buy the game, you can download it onto any machine you like and access is controlled through your STEAM account. The process of perpetual value is something that they’ve demonstrated several times over now. A Gamasutra interview with the service’s director Jason Holtman explains, “Traditional retail wisdom says that lower price points are associated with lower perception of value, and price adjustments are only downward over the long term…But in a connected market, you can shift prices up and down, and people don’t care. You can change prices instantaneously. Customers are incredibly sensitive to pricing. You can adjust the price by five dollars, or a dollar, and you can see the demand curve shift.” The interview is about a STEAM sale for Team Fortress 2 which dropped a game normally priced at $19.99 to $ 2.50. Holtman reports that the increase in sales lasted for not only the sale but well into the following weeks. Gamers would buy the product themselves or purchase gift copies to give to their friends, which STEAM allows thanks to its social networking service. He notes that retail sales were generally unaffected. Holtman concludes, “That phenomenon demonstrates a new, somewhat-paradoxical, property of product value in a fully-connected service economy: devoid of the scarcity of goods, a lower-priced product actually increases the overall product’s value, because it increases the size of the community that surrounds that product.”


Making these kinds of sales possible is not just an exercise in putting together an online store and creating fluctuating prices. No one seems to be totally certain how much of the digital distribution market STEAM controls but estimates run from 70% to 40%. Whatever the figure, another Gamasutra article highlights the fact that the second leading competitor to Steam, Impulse, controls about 10% of the market. The competitive spirit came to a head between these companies when Activision announced that one of their most popular FPS titles, Modern Warfare 2, would be wrapped with STEAM. Other distribution channels refused to carry the game. A column by Derek Smart explains their decision better than I could, “Steam wrapped games (with or without third party DRM) can be sold at any ESD (Electronic Software Distribution) site and even on retail discs. What makes this possible is that Valve generates the serial numbers for the product, then gives it to the developer/publisher who then hands it over to the ESD site operator who adds it to their server backend so that each purchase is given a unique key. This is how come you see some Steam wrapped games (e.g. Dawn Of War 2, Fear 2 etc) on Direct2Drive. When the game is installed, the Steam client downloads it and asks for the key. In this case, the authentication is done by Steam servers.” In other words, every single person who buys Modern Warfare 2 for PC has to download STEAM to even turn it on. Faced with the prospect of losing even more customers to the competition, many of these services simply refused to sell the game. Smart concludes his column by pointing out that the decision probably did more damage than good because the game is still just a mouse click away.


What’s wild about these services is the degree to which a company can take an old intellectual property, decrease the cost, and then ride the resulting buzz into a new wave of sales when the game resumes the normal price. It works like a perpetual motion machine. Price decreases all the way to the bottom of the wheel, then gets pulled back up as more consumers take interest in the product. A company like Valve is the most likely to reap the benefits of this because they constantly update their games and can justify charging about the same price for very long periods of time. The quality stays the same, only the numbers change.


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Text:AAA
Tuesday, Dec 22, 2009
Thank you for making 2009 such a great year! Here's a few odds and ends you might have missed.

I’m taking a break along with the rest of Popmatters for what’s left of 2009. It’s been great year, and I really appreciate you folks stopping by to read Banana Pepper Martinis. At the risk of looking pretentious, I thought I’d throw up a few links to other websites I’ve worked on while I cook up some new stuff for 2010.


Back in June and March The Escapist published two articles by me, The Parables of Gaming, which discusses religion in games and a more personal piece about going 5 days without the internet. I also helped produce a retrospective on The Warriors for EDGE Magazine, although I don’t think that one is online at the moment. Finally, I participated in a large collection of essays on video games with my particular one being on Bully. The other essays in the book can be read from the right column. Personal favorites of mine from the book were Corvus Elrod’s piece on Ultima Underworld and Nick Fortugno’s essay on Shadow of the Colossus. And although it hasn’t been released yet, I put together a retrospective on Ocarina of Time for the soon to be released Kill Screen.


If you’re up for something long and wordy, I’m in the habit of posting my research papers from law school on my personal blog just because I hate to see them go to waste. A very long discourse on Privacy Rights in MMORPGs along with a brief overview of developing issues in Criminal Copyright Law. They weren’t written for a general audience, so they’re not really oriented around being entertaining. But you might find them relevant to your interests. In that same spirit is a history paper on legal changes after the black plague in England.


I also throw up the things on my personal blog that are too academic or too dense to really be read by someone unless they really want to know something. I did a four part series of essays applying Jungian Dream analysis to video games. You can find Part One here. The rest are in chronological order as I completed them, so just scroll into the later months on the blog. There’s also a piece that explains my basic style and reason for producing these kinds of blog posts along with an explanation for how I find the time to produce all this crap. If you liked the Lester Bangs and Pauline Kael write-ups, I went full Book Nerd and wrote a long essay about what Samuel Johnson would bring to video game criticism, a weird ramble about the ending to Battlestar Galactica along with a prime example of me actually trying to be funny were also highlights.


Finally, I was able to produce some retrospectives on some actual video game critics themselves for Critical Distance. The first was about the ARG Pixel Vixen 707 and her too short career. The second was a lengthy piece on Ten Years of Penny Arcade.


It has been a great year, and I’ve had the chance to work with a lot of great people. Have a great holiday season, and again, thank you for taking the time to stop by and check out the BPM along with the rest of Popmatters.


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Friday, Dec 18, 2009
The first-person shooter has made compromises for consoles and is now flourishing, but the same can’t be said for the real-time strategy genre.

Whenever one compares PC and console games inevitably the subject of controls comes up, paricularly the fact that controllers simply can’t offer the same speed and precision as a mouse. This means certain PC-centric genres, like first person shooters or real time strategy games, must make compromises and concessions in order to compensate when they’re brought to consoles. The first-person shooter has made the necessary compromises, and as a result, the genre is flourishing on consoles, but unfortunately, the same can’t be said for the real-time strategy genre.


Both speed and precision are necessary for any first-person shooter to work. If headshots are instant kills, then the controls must be precise enough to actually allow the player to hit the head, and if our virtual life is on the line, we must be able to hit the target quickly before we’re killed instead. The solution for this issue of speed is rather simple: slow down the game. Halo did this quite well; Master Chief can’t run, and he even walks at a fairly slow pace. Combat is slowed as a result, giving the player extra time to consider his options. Compare an online game of Halo with the still popular PC game Counter-Strike and this difference in speed becomes obvious.


There’s also a heavy focus on cover in many console FPS games: Killzone 2, the Rainbow 6: Vegas games, any Call of Duty, and Gears of War to name a few. Not all of these games have specific cover mechanics, but they all have regenerating health, which encourages the use of cover. The use of cover itself slows down the pace of a game considerably and has the added advantage of making the player more precise as well. Enemies will also get behind cover, which means that they’re usually sitting still and all that the player has to do is train our sights on their cover and wait for them to pop out. Hitting a moving enemy in a console FPS is still far more difficult than it is on a PC, so most console FPS games are structured in a way that makes moving targets less of an issue.


But cover itself doesn’t solve the problem of precision, “auto aim” is needed as well. Auto aim helps make the player more precise by automatically moving the camera towards an enemy, giving players an easier shot. Early console FPS games had a very judicious use of auto aim. Take the classic GoldenEye for example, the use of auto aim was so blatant that your gun would actually turn to shoot at enemies even if the player was standing still. Compare that to the more advanced and elegant implementation in Modern Warfare 2, which uses what is essentially an “auto aim button”. Players hit a button to look down the sights of their gun, a button not in many PC shooters, and if they’re looking at an enemy when they hit this button, the camera snaps to that enemy giving the player a clear shot. Releasing and hitting the button again makes the camera snap to another nearby enemy, giving the player another clear shot. These compromises for speed and precision have made the first-person shooter a viable and massively popular genre for consoles, but the same can’t be said for the other PC-centric genre, the real-time strategy game.


Most RTS games on consoles try to mirror their PC counterparts exactly, and whenever they do, they inevitably fail to effectively translate the experience. Halo Wars, and Command and Conquer 3 try to replicate the genre like this. They both try to keep all the little intricacies of the genre intact, and while both are certainly playable, they’re also still plagued with problems of speed and precision. The control sticks cannot scroll across the battlefield as fast as a mouse can, and if the speed is increased to compensate, then selecting individual units becomes impossible. Command and Conquer 3 made no concessions for the console, but as a result, the controls are overly complicated, requiring players to flick though menus while fighting. Halo Wars makes resource management automatic and confines base building to pre-selected zones, but selecting small groups of units is difficult, especially if they’re off screen. In order to effectively translate the RTS experience on a console, these kinds of minor concessions aren’t enough; the genre must be radically changed. 


In that regard, Brutal Legend is a step in the right direction. The RTS portions of the game are played from a third-person perspective with our avatar being the commander who was once invisible. There is no base building at all. The strategy lies entirely in the units that you train, knowing when to build what kind of soldier and how to best use it. But this new approach brings with it new problems. Because of the third-person view, it’s hard to see what units are selected. The maps are small and your avatar can fly, so speed is not a problem as players can quickly survey the entire battlefield, but a lack of precision is the game’s biggest hindrance. You must be standing next to a single unit in order to select it, which means jumping into the middle of a battle if the unit is in combat, and if the desired unit is in a group, singling out the one that you want is painfully frustrating. There is a surprising depth to the strategy in Brutal Legend, but the lack of precision makes it difficult to take advantage of that depth. To date, there is only one RTS game on consoles that offers players a control interface with the same speed and precision of a mouse: EndWar.


Like Brutal Legend there’s no base building, but there’s also no resource management at least not in the traditional sense. You begin each battle with only three units, and as you take over certain building, you’re allowed to bring in more units. What sets EndWar apart is its use of voice recognition software in place of a mouse or a controller. We’re only allowed a limited number of units out a time, and to select one, we only have to say “Unit X.” We control our army though short phrases that can be issued no matter where the camera is on the map, there’s no need to scroll back and fourth from one unit to another giving orders. Selecting an individual unit is quick and easy, and we can jump around the map by saying “Camera unit X.” The voice recognition is precise and fast, solving both major issues that plague console RTS games. Removing the base and resources altogether complements this new interface as there are fewer menus to worry about, and therefore, fewer phrases to learn. The biggest complaint about EndWar is that the strategy boils down to a game of rock, paper, scissors: helicopter beats tank, tank beats APC, APC beats helicopter with a few other units thrown in for good measure. But as far as interface goes, this kind of radical approach is what the genre needs to succeed on consoles.


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Text:AAA
Wednesday, Dec 16, 2009
Solving the mysteries of Assassin's Creed II are all about gaining enough height and perspective to put the pieces of a picture all together.

One might observe that the opening few hours of Assassin’s Creed II resemble the pacing of a story told in a still life painting (that is: going nowhere fast).  Blessedly once the player has a larger sense of the picture of the game as its vistas and views unfold, it becomes a canvas much much more vividly alive.


While this metaphor between painting and game might seem just a cute criticism, it is also a rather appropriate one for a game that is set in one of the most fruitful eras and locations for painting in Western history, the Italian Renaissance.  Also, it is notably a game particularly focused on vision and seeing as the game’s protagonist, Ezio, is an assassin who can only get his bearings in the world by scaling buildings to overlook the places in which he will be hunting his prey.  This need translates into one of the major objectives in gameplay. Unlike other open world games, which usually feature a fairly clear sense of the layout of the place that the main character will be residing in through a map in both compass form and/or accessible through a pause menu, both Assassin’s Creed games require the player to uncover the details of such maps by reaching perches noted on a map that is otherwise obscured by a fog of war.  The fog of war is removed when the player figures out how to reach a perch and presses a “sychronization” button that results in a long sweeping camera pan around the city revealing its heights and depths to the player on the main screen but also as it clears away the obscurity of the mini-map.


Renaissance painters are frequently cited as the chief developers of the landscape painting in the history of art, so this camera pan, which has qualities of the landscape painting (revealing the immensity and grandeur of size of human surroundings) seems particularly fitting for this second game in the series.  After all, it is set within this time period. 


The Healing of a Madman

The Healing of a Madman (1494), Vittore Carpaccio

While one might note that landscape painting very often revels in showing the small stature of humanity in relation to their surroundings, art critics have noted the complicated relationship between landscapes and human beings especially as they relate to human power and authority.  The central thesis of Kenneth Robert Olwig’s Landscape, Nature, and the Body Politic is that in landscape painting the viewer discovers that “our environment, conceived of as landscape scenery, is fundamentally linked to our political landscape.” Olwig’s observations concerning the landscape painting that developed during the Renaissance is especially indicative of this correlation between nature and the political.  For instance, he describes the world controlled by a Renaissance prince in terms of how it is viewed as landscape by such a ruler:
One characteristic of that world is that it was observed at neither ground level nor from a vertical point infinitely above, but somewhere in between—a compromise, as it were, between the vertical and the horizontal.  From the vertical axis were taken such elements as pagan gods and goddesses floating in the sky and tableaux showing the unvarying cycle of the season; from the horizontal axis, pastoral landscapes of Virgilian inspiration opening out to the horizon, that is, reaching deep into the recesses of an elongated stage.  The potentate viewed the entire spectacle from a well-placed, elevated seat.  HE was the force that made it all happen and now he could see it all—an essentially harmonious universe—going through its paces before his commanding eye.
Interestingly, in Assassin’s Creed 2 such tableaux’s become the object of Ezio’s studied eye and not that of a Renaissance potentate.  Having to crawl up the walls of Venetian churches or bell towers in Florence, Ezio finds himself at the “top of the world” to study and map the region and its doing.  That so much of Renaissance Italy’s heights are marked by churches and the like, though, is indicative of Olwig’s thesis.  As much of the game suggests, most of the powerful men of this period were directly or indirectly related to the church, and thus, the “elevated seat” of rulers could often be mapped to the elevated steeples and bell towers of the churches of the area and the men who control the knowledge of the world and cosmos that occupy those spaces and would normally then “control” those heights.
Landscape with the Fall of Icarus

Landscape with the Fall of Icarus (1558), Pieter the Elder Bruegel

That Ezio climbs to these heights himself is indicative of his character as assassin and general troublemaker.  In attempting to figure out his bearings and to suss out the mysteries that underlie the landscapes (both their physical space but also the political realities that the cities represent and that he will involve himself in) before him, Ezio takes it upon himself to share the perspective of the vertical and horizontal worlds controlled by his opposition.  That Ezio is capable of surviving on the rooftops is suggestive of his challenge of those normally “seated” there to view the spectacle.  He wants to be able to view this spectacle too.  He may be able to wrest control of the heights, or at least, do so long enough in game terms to understand the lay of the land beneath him, what treasures and objectives that it holds (again, in game terms, since the mini-map provides information on collectibles and mission starting points).  In this sense, the game mechanic of revealing maps by climbing towers in order to understand how to proceed next is emblematic of the narrative, as those physical spaces represent the political world that Ezio needs to map and wreak havoc upon.

Thus, landscapes serve both the interests of this political narrative as well as the interests of uncovering the mysteries of power in the game.  Ezio is constantly trying to see the order of the conspiracies that underlie the hidden power structures that have embedded themselves into the landscape.  Be it in unraveling the mysteries of the Codex or by locating the glyphs that also mark the heights of these politicized buildings, the mysteries of Assassin’s Creed II are all about gaining enough height and perspective to put the pieces of a picture all together.  Climbing towers to fully come “to know” the landscape beneath him becomes a metaphor for fully coming “to know” the grounds under which power lies.  To climb to these heights is to rebel and to attempt to see as a potentate or a god might, which is ironically exemplified by the artifact of power that so many are seeking in both games.  The apple of Eden involves coupling the concept of rebellion against authority with knowledge, thus, overcoming one’s lowly stature as mere mortal and becoming powerful “like a God.”  While taking on such authority through knowledge is warned against in the traditional views of this story, the man that so comfortably scrabbles over rooftops and cornices, the assassin Ezio, simply seems less afraid of a fall.


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Text:AAA
Tuesday, Dec 15, 2009
How well can a complete amateur guess the progress of the game industry?

Predicting the direction that the game industry is headed is something of a dubious talent to most people who play games. The most successful analysts like Michael Pachter are impressive because they have to predict how well a game is going to sell and consequently a company’s profit margins. There are deadlines by which their predictions must come true and a specific moment where you can say that they were wrong. An in-depth article at Kotaku by Tori Floyd explains that the job requires crunching a lot of sales data, how many consoles were in the market at a given time, and then guessing how a similar game will do under the current circumstances. Pachter made a lot of impressive educated guesses in 2008, like the overall profit increase of the industry from 2007 or the precise date of the PS3 price cut. The average response when a gossip blog like Kotaku posts this stuff is to point out that obviously a four hundred dollar console is going to have to drop in price to be realistic, but knowing when to tell an investor to buy or sell stock does take skill.


Beginning with that caveat, back at the start of 2009 I decided to write a blog post predicting what the tech trends would be in 2009. Since people make money by predicting this stuff, I thought I’d score myself to see how an amateur did. This should not be confused with really doing anything useful or comparable to someone like what Pachter has done. Identifying a social need and concluding that someone will fix it takes about as much skill as bouncing a ping pong ball into a pool. My background in this field is a Business Law class that I got a C in, a long conversation with a drunk broker, and re-reading the portion of Freakanomics that explains how the crack cocaine industry works. So, how well did someone like me guess the year 2009 would play out in video games?


Overall Prediction: Functionality is going to be the defining trend of successful consoles.


Basically, I argued that the consoles and gaming devices that do things besides just play games are going to do a lot better than traditional platforms. I’m going to say this proved true. The I-Phone and I-Pod Touch are dominating in sales. Apple has so far moved about 21.4 million of the things with literally thousands of apps and games going on the market every day. While quality control is a bit lacking, this trend has produced several decent multiplayer games and one gaming masterpiece. That’s a lot of ground to cover in two and a half years for a new platform with what is essentially a new interface.


Compare that to the PSPgo, which has only moved about 28,000 units in Japan. The device does nothing but play digital games. The DSi, on the other hand, has moved 10.17 million units. It’s also got a camera, decent Wi-Fi, and supports SD cards. While Nintendo is right in claiming that this isn’t meant to compete with the I-Phone, it’s definitely a respectable replacement for an I-Pod Touch.


Prediction #1: Having Netflix on your console is going to move a lot of units.


True. Xbox 360 sales have been going strong all year, and I think it’s fair to say a great deal of credit goes to how easy it is to watch movies through the internet service via console. Microsoft believed this enough to create an exclusivity contract for the service that Sony found their way around. I’m not going to claim that the very strong years that both Xbox 360 and PS3 had is totally thanks to Netflix. People have finally figured out how to do something on the PS3 besides guide nukes and calculate quasars, so the price drop and impressive games for PS3 this year obviously deserve a lot of credit. More interesting is that the one console that does not offer any media functions whatsoever, the Wii, has seen a steep sales drop this year.


Prediction #2: Something like streaming or a tiered commercial service has to come along that is easier and more efficient than what a pirate has to go through.


The jury is still out on this one, but the first steps for implementing something like the above were announced. I’m not going to pretend that I have any idea how cloud computing specifically works, but On Live is basically promising to give me access to games that will play on a low end PC with great graphics and speed. Even the people stealing games have to cough up the money for a machine that can run them decently. Early reports have been positive but the service only works if you have a great internet connection. Given the choice between dealing with torrents and mucking about with a stolen game’s code, the average person is probably going to opt for the live service since it’s the same bandwidth either way. You don’t beat pirates, you just offer something that takes less effort than stealing a game.


I’ll also add that the problem that I identified, paying for sixty dollar games, has been addressed by brief sales on STEAM and other ways to maintain long tail viability. Price drops happen sooner than ever with games, particularly ones that are sold online, because there is no resale loss. This is an enormous topic, one that will get its own post next year.


Prediction #3: Developers will begin to experiment with the sixty dollar pricing model by making games episodic. These will sell.


True. This had already been going on by the time that I wrote this. Siren: Blood Curse was an interesting experiment on the PS3 and TellTale Games have both been going strong for a while. I’m giving myself this one because several more AAA episodes came out this year featuring purely episodic content that have all sold well. The Lost and the Damned and The Ballad of Gay Tony are both doing well despite being console exclusive.  Though, I haven’t found any exact numbers for Fable 2’s episodic release, however, giving away the first episode for free is a bold step in the right direction. All of TellTale’s products have also done well this year. The social need basically works like this: starting a game that takes 100 hours to beat is a bit like starting a giant book. It’s perfectly doable; it’s just intimidating. Breaking such a game up into chunks ensures that the player will hang on until the end and consequently be a lot more satisfied with the product.


Prediction #4: DLC is and will continue to be used by companies to make more cash out of pre-existing IP.


True. DLC sales for CoD 5 are now over 45 million. I don’t really know if that’s because people like shooting Nazi zombies or that they actually used the other maps, but that’s still a lot of easy money. Almost every major release is offering DLC that can be bought right when the game is released. Dragon Age actually has NPCs that sell it to you in game. Companies now even use DLC to help boost pre-order sales by offering you a free piece of junk in-game.


I also did a lot of jabbering about maintaining the viability of multiplayer games by using DLC to keep the game changing and vibrant. I would’ve used ODST as proof of this but they decided to turn it into a full blown game. I have a feeling that you’ll be seeing even more of this in 2010 when companies are trying to make do with what they’ve got in a tough economic climate.


Prediction #4: Forum Games are going to be increasing in popularity and you really need to dump all of your money into a company making them.


Holy s*** was I right about this one. The top game on Facebook in August of 2009 was Farmville at 56 million users. That easily beats WoW’s 11 million. A game about raising a fake dog even beats WoW on Facebook. Of course, none of this is going to matter once Civ Facebook comes out. I’m going to go out on a limb here and say that you ought to invest in that. Actually, that’s not really going out on a limb.


Like I said at the start of the post, most of this stuff is obvious. I don’t have access to any hard financial data and just pulled together a weird variety of articles for my sources when producing this piece. People in forums make this same point when video game analysts are discussed, but it’s easy to just complain in the comments section. The only real way to prove it is to have someone make a bunch of predictions and then a year later see how many they got right. Either I’m really good at predicting future trends in the game industry, or it was never very hard in the first place.


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