The PC is Dead, Long Live the PC

So Valve made an interesting announcement today.

To summarize:

• Steam is coming to the Mac platform, starting in April.
• Valve games, starting with Portal 2, will be simu-released on Windows, Mac, and 360
• Cross-play between Mac and PC is supported
• Purchasing for one platform can mean getting it for both (Steam Play).
• All existing Steam services will work for Mac
• Source Engine is also coming to Mac
• Source Engine code will cross-compile to either Windows or Mac, meaning less re-work in porting

Let that sink in for a minute.  This means a lot more than simply another way to buy Mac games, this is potentially the first step in a complete shift in the computer video game market.  About 60% of all AAA Mac games are published by one company: Aspyr.  That means that with a single business deal, Steam could be fronting a large portion of the entire Mac gaming catalog.  Steam is already easily the dominant digital distribution service for retail titles on PC, and could easily become the dominant force in Mac gaming too.  By making a bet on their future titles, they’re also saying that they see the Mac as a valid platform on it’s own, at least on par with Windows.

We’re moving to a world of digital distribution on the PC (Windows and Mac both).  The benefits to (transparent, non-obtrusive) DRM that becomes available on that channel make this a certainty.  To Valve, this isn’t just about opening a new market segment, this is about consolidating the retail channel under their house, and about continuing to provide further reasons why when you make a PC game, you should integrate with their user services and their social network.  If they’re successful, it means that they’ve abstracted away the OS.  The game will not be defined by what OS it runs on, but on what social network it’s tied to.  You won’t be a Windows Gamer, or a Mac Gamer, you’ll be a Steam gamer.

The Gamer’s Bill of Rights in the Digital Age

When I was at PAX this year, Stardock had this display tuned out akin to the way you see the Declaration of Independence or the Magna Carta shown in museums.  The display was for an initiative they call “The Gamer’s Bill of Rights“, in which they’re trying to get the PC game industry on board with “a set of principles we can abide by to improve the customer experience”.  The current tenants of those principles are as follows:

1.  Gamers shall have the right to return games that are incompatible or do not function at a reasonable level of performance for a full refund within a reasonable amount of time.

2.  Gamers shall have the right that games they purchase shall function as designed without defects that would materially affect the player experience.

3.  Gamers shall have the right that games will receive updates that address minor defects as well as improves game play based on player feedback within reason.

4.  Gamers shall have the right to have their games not require a third-party download manager installed in order for the game to function.

5.  Gamers shall have the right to have their games perform adequately if their hardware meets the posted minimum requirements.

6.  Gamers shall have the right not to have any of their games install hidden drivers.

7.  Games shall have the right to re-download the latest version of the games they purchase.

8.  Gamers shall have the right to user their games without being inconvenienced due to copy protection or DRM.

9.  Gamers shall have the right to play single player games without having to have an Internet connection.

10.  Gamers shall have the right to sell or transfer ownership of a physical copy of a game they own to another person.

Given the recent announcements both by Stardock and Valve on the topic of DRM, I think there are arguably some adjustments to be made.  In the customer report from which that list was pulled, Stardock discusses the issue that the burden is not on publishers to provide mechanisms to sell and transfer digital titles.  I find this highly ironic considering one of the primary features of the new “Goo” system they announced is to do just that.  However, I agree, that the burden is not on the publisher, it’s on the distributor.

Video Games in the 21st century are not like games in the 90s.  Certainly to a large extent today, and ever more so going forward, games will be distributed through the internet, or will at least leverage the internet.  Games no longer exist in a vaccuum, on their own right, but are tied into a larger social platform such as Steam Community or Xbox Live.  As this process continues, it means that when users choose where to buy a game, it is no longer the choice of a commodity, buying the same game from Walmart or from Gamestop.  It’s not even the choice of interface (Do I want to play this game on my console, or on my PC).  When you purchase a game, you are contributing to your personal space within a social ecosystem.  It’s like choosing between MySpace and Facebook. 

What this means is, that for the first time, Distributor/Retailers are now also developers of a social network, with all the benefits and responsibilities thereto appertaining.

This has implications.

In the new world, the existence or lack thereof of a disc is irrelevant.  You are not purchasing a CD - you never were - you were purchasing the right to play that game.  With a CD (at least on a console), you have the ability to easily transfer, or loan your rights to another person.  Stardock is the first, as far as I’m aware, to easily enable this process on games that are purely digitally distributed.  Kudos to them, it will mean competitively, if this is a popular addition in the marketplace, that all the other players will likely have to follow suit.  Score one for the gamer.

I think there are some nuances potentially missing here as well though.  While a secondary market is important, there are also a lot of loans going on, which is not enabled by this system AFAIK.  There is a logical distinction between the person who owns the game, and the person who is currently playing (or allowed to play) the game that is disabled in a system where only the owner of the game is allowed to play it, using their account.  This prevents members of the same household from participating in their own social groups using a single instance of a game (but not at the same time), or from allowing friends to loan each other games, or for any kind of time-limited loans of titles to be made.  I’m not aware of any platform that currently supports these scenarios in any sophisticated way.

Because of the nature of these emerging environments - distributor as social network - it means that in the near future an oligopoly will form around a very small (1 or 2) number of distributors who can build our their community the fastest, with the best features.  Presently the barrier to entry to create a game distribution platform is relatively low, because game publishers treat these platforms as just another kind of retailer - if you’re able and willing to sell their games, and the publisher needs to do little or no work to get on your platform, they’re willing to do business with you.  Providing benefits like piracy protection and metrics (e.g. Steamworks) only sweetens the deal.  As users become ‘locked in’ to a specific network, where all their licenses exist, and all their friends play, and all their status symbols are kept, the barrier becomes more difficult, because in order to create a new platform, you need to shift a significant install base from an existing network.  There will be a Facebook/MySpace of PC-centric gaming platforms, and the race is on, but it’s not clear who that winner will be yet.

Stardock Impulse

I just downloaded Stardock’s new Digital Distribution platform Impulse, and thus far I’m reasonably impressed.

Without getting too far into it, it looks like both Steam and Impulse essentially have a web browser embedded in them, and they use the callbacks from this browser to kick off the downloads process.  Both services allow you to keep a catalog of your games, re-download them as many times as you want, and both services have community elements as well.

Steam has a better catalog of games, and has hooks into various Valve magic such as a Steamworks, and saved games in the cloud (which is awesome).

But Impulse is shiny, and that matters.  I currently use both Quicken Online (at least until my trial expires) and Mint for personal finances, and even though Mint is horribly crippled by not supporting Canadian banks, I still log into it because it’s prettier than Quicken is.  Additionally, Steam has the unfortunate habit of randomly hanging in the middle of downloads, requiring me to stop and restart the download.  This isn’t a show stopping issue, but it’s irritating, and Impulse can capitalize on that.

Web design has moved forward since Steam was launched, and it’s time for Steam to bring some of those design principles to the table.

Get Over the Hardcore

Stardock has built themselves a tidy little market turning around profits that are orders of magnitude higher than their development costs (under a million!).  They’ve done this on the piracy haven that is the PC, and without using DRM.  In the dawning hours, as the industry is starting to realize the potential in casual gaming, I think we can predict a related move:  Getting away from the hardcore gamer.  Trends that begun with the first high resolution FPS in the nineties are beginning to reverse.  I predict in the next 5 years a major shift away from those large budget titles and into a field of much smaller, more innovative and original titles with smaller development budgets, delivered through digital distribution, and appeasing a much broader audience than the twitch crowds.

And I’m looking forward to it.  (On a related note, Dreamfall is getting released on Xbox Originals on Monday!)

Steamworks

Valve has announced a new design platform for PC game design called Steamworks, available free of charge. The suite of tools seems to focus on easing some production-level issues rather than design issues. This includes smoothing delivery of the game through Steam’s retail channel, as well as providing certain frameworks to improve a game so delivered, notably in the multi-player arena.

Most notably in my opinion is the inclusion of hooks for getting play data back from the users once they’ve been launched.  This type of data gathering immensely helps developers get information about how the players are playing their game, and thus to take this data back and use it to improve designs for future titles.

All of this of course depends on the utilization of Steam as the delivery channel, something very few large studios would want to commit exclusively to.  I’ve asked Jason Holtman how well Steamworks would interface with XNA, as these two technologies seem to me to be functionally, if not technically, complementary.  If I hear back from him, I’ll update this page.

Rockstar comes to Steam

Rockstar and Valve announced yesterday that many of Rockstar’s games are now available for download through Steam.  This includes both the Max Payne series and the entire Grand Theft Auto series.  Notably absent is Bully.  Valve continues to do very well for itself, and at this rate, will corner the market in Digital Distribution of PC games.

A Tale of Three Worlds

It was announced earlier today that Activision is merging with Vivendi Games (the interactive entertainment division of Vivendi that includes Blizzard) to create what is now the largest console video game publisher - Activision Blizzard. Jean Bernard-Lévy, CEO of Activision was said to have stated: “Blah Blah Blah, Share-holder value, blah blah significant opportunities, blah blah Growth Prospects”.

Every gaming blog in the world responded with “OMFG… merger… what does this mean for WoW?”.

I’m going to put in my vote for “not really a whole lot”. As far as Blizzard is concerned, despite the fact that their name is now on the publisher as well, it’s really just a changing of the guard above. Blizzard has over and over again proven itself to be massively successful and profitable, and any new executive management would be foolish to screw with that.

This is interesting news, but shouldn’t be really suprising. As in the music and tv/movie industry, video game publishing is what’s referred to as an oligopoly - a market in which there are a relatively small number of firms who control the majority of the market. Oligopolies tend to emerge in areas where the costs and risk are extremely high, but barriers don’t exist due to ownership of capital assets (e.g. telephone, power distribution) or intellectual property (e.g. operating systems). When an industry meeting these characteristics begins, the market is very fragmented, and usually dominated by several start-ups who understand the particulars of that business. As the industry as a whole grows, more traditional investment companies will begin forming merges and buy-outs to conglomerate the small players into a larger, more financially stable whole. We have observed this happening in the music industry with record labels, and in the tv and movie industry with film studios.

Our industry is much younger, but already is dominated by six major publishers: Electronic Arts, Nintendo, Ubisoft, Take 2, Activision Blizzard, and THQ.

What I find interesting is that when you’re in an industry like these three, where the costs to distribute content are so high, and the risks of success equally so - management gets very risk adverse. They’re responsible for profit to shareholders, and they live in a very financial world. As a result, you begin to see trends towards blockbuster hit titles. This is the nature of action movies, highly paid brand name actors, top 40 pop music, sports games and high visual fidelity first-personal shooters. Publishers like these things because they’re safe, and any portfolio requires some safe bets to hedge the rest.

Which isn’t to say the people on the ground floor don’t put their heart and soul into these titles, it’s just that they’re primarily a business construct designed to appease the shareholers, and so creative control is somewhat removed.

Now, here’s the shakeup. What we’re watching unfold in the music industry right now is going to happen to film and is going to happen to tv and is going to happen to gaming. Once upon a time, production costs for music were extremely high, and the distribution channels even more so. Technology has completely eroded the first, and the internet the second, and now an oligopolistic industry is watching their barriers to entry come crashing down. A further kink in the puzzle is that music piracy is rampant, and there’s no real way to deal with that in a model based around selling individual units of content. Every single publisher in the music industry today needs to completely revamp their business model in order to compete, or be destroyed, plain and simple.

Piracy is also rampant in the film industry, although it hasn’t gotten quite as bad as the music industry. As bandwidth availability continues to rise, the film industry will be even more screwed than the music industry is now. The production costs for tv shows and movies haven’t dropped at all, and in fact, for those ultra-safe blockbuster titles, they’re increasing massively every year. The home theatre experience becomes more and more accessible and continues to equal if not surpass the cinema theatre experience in nearly every way. Today it is still possible to throw a quarter of a billion dollars at a blockbuster title and triple your money. That multiplier is shrinking on both sides every year. Television networks are also slowly sliding into irrelevance as it become possible to watch commercial free versions of all the content they deliver through digital delivery. This alternative becomes more popular every year.

Video games are a little further down the road than both of the previous. Production costs for video games are an order of magnitude lower than costs for film production. Additionally, pirating of console games is much harder than pirating music or film because it requires hardware modication of your system - a modification that could be detected by the manufacturer through online connectivity. On the PC side, piracy is a nightmare for traditional retail channels. Digital delivery mechanisms can aliviate this to a certain extent through the use of non-intrusive DRM (such as Steam). Attempts to shoehorn DRM into retail delivered copies of titles (using such abysmal tools as Stardock) has largely met with outrage.

The content sales model is not long-term viable. The internet enables piracy too easily, excessive measures to curtail it harm your legitimate customer experiences as well. Mergers like the one announced today are not exciting. It just means we’ve moved to the next chapter of the same old story. I’ll be excited when I see those top companies merging with companies who know how to change the business model. I want to see reductions in the cost of production, massively if possible. I want to see seamless end-to-end delivery models that enhance the customer’s experience, not detract from it. And I want to see people really innovating what you can do with the content, coming up with brand new genres of gameplay and game mechanics, and for publishers to see those as a necessary portion of a balanced title portfolio as well.

So when that merger happens, put it on the front page of Joystiq, and I’ll be reading.

Kindle eBook reader not available in Canada

Yeah, this is off topic, but I when I’m not doing the video game thing, I’m reading books.  I read a LOT of books.

And I would really, really like an e-paper based eBook reader.  So today Amazon launched their new eBook reader, the Kindle.  It’s ugly as fuck, but they have some sweet wireless setup going on.  Unlike basically every other reader out there, the Kindle has a free, EV-DO based wireless network that allows you to browse, buy, and download eBooks from Amazon’s ever increasing collection (they plan to eventually make every book they carry available).  You can also grab newspaper, blogs, RSS feeds, etc.

Great, sign me up.  Take my $400 dollars, I don’t care that your device is hideous, it looks marvelous.  Wait a second, as per usual, Canada gets the raw end of the stick.  Despite the fact that Sprint and Bell Mobility have agreements with each other, Amazon’s Whispernet does not work outside of the 50 US States.

Ever wonder why Canada is a haven for piracy?  Maybe it’s because companies like Amazon, Microsoft, Sony, and Apple - the premiere offerers of digital content - don’t fucking offer their services in Canada.  Remember prohibition?  If there’s a demand for something, it doesn’t matter if it’s illegal, people will obtain it.  And unlike prohibition, under which criminal organizations were still charging money for booze, digital content is free to steal.

I don’t know whether the issues are legal or economic, but once there’s a culture of theft that’s been established for a long time, it’s very difficult to legitimately offer content and expect the people you’ve been shirking in the past to expect to pay for your shit.

Xbox Originals

*sigh*

 Guys, what are you doing?

Look, I’m a PM, I understand that things get cut and you don’t always get to produce what you’d ideally like to produce.  That’s the reality of the situation.  I’m okay with the producer’s logo being a little choppy on the way in.  But if you’re essentially licensing out back catalog IP, is it really that much work to disable menu options that will cause the game to crash?  What if Word shipped with a big red toggle button on the ribbon that said “More Magic” on it. 

Do you really want to field all those calls with the answer that the player is just ’supposed to know’ not to push those buttons.  That’s not a good experience story.  In fact, it’s such a fucking terrible experience that it may threaten the viability of the platform.  I already have way, way too many awesome games coming out right now, I can wait until the mid-winter slump for my third copy of Psychonauts.  Go fix it. 

Even More Digital Delivery

Steam, I still love you, but we’re moving into an open relationship.

After replacing the misbehaving video card in my frankenstein-esque laptop (Replaced the keyboard 3 times, case fan twice, hard drive, batteries, and now the graphics card), I decided to celebrate with a purchase from the bargain bin (Evil Genius, which then proceeded to eat my weekend. I’m a sucker for a short fat guy with a monocle). Having firmly planted myself on the side of the people who make the things I love, I absolutely cannot stand going to GameStop/EB Games/The Den of Despair. If I’m forced to due to exclusive packages, etc., I will always buy games new, even if they cost more, so as to support the publisher and developer. Gamestop’s draconian policies around pre-ordering and the fact that their business model of making massive profits on the secondary market at the expense of the people who actually are responsible for the content they sell makes digital delivery all the more appealing. Unfortunately these same retailers have a lot of power to essentially extort publishers by threatening not to stock their games, or to carry less copies when the publishers try to work around them via the digital route. One gets the impression that there’s a lot of cloak and dagger going on between publishers and retailers.

At any rate, I’ve already purchased every game Steam offers I have any interest in with a metacritic rating above 70. This has led me to Warcry. The deal is similar to Steam, only instead of a client, you download the game installer manually (and unless you have a download manager, potentially multiple times, as browsers don’t like massive file downloads via http). The good side of things is that once you install the game and validate your account with the installation, you’re done, the game acts just like the retail copy does, and no further DRM is in place.

In other news, Microsoft has announced that it’s going to add a new digital delivery service to compliment Xbox Live Arcade. The service entitled “Xbox Originals” will allow players to download through Xbox Live games for the classic Xbox including Psychonauts, Crimson Skies, Fable, and the original Halo (Maybe not as good as Nintendo’s back catalog, but I’ll take it). The service will kick off December 4th.

Looks like I’ll be buying my third copy of Psychonauts. Tim Schaefer must be making matresses out of my money.

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