Game Finances: Success isn’t Big Enough

I was reading Twenty Sided’s article about game budgets:

http://www.shamusyoung.com/twentysidedtale/?p=8310

which got me thinking about what the publisher sees and why. I recently took a course on finance and analyzed 15 years of EA’s financial records, summarized in a 10-page paper about game piracy.

A quick disclaimer: I am not a finance person; I have merely taken a course about finances. I’m also not in any way affiliated with EA. I am probably utterly wrong in my explanation. Going on:

Companies like EA do not usually produce low budget games because they do not materially affect their balance sheet. EA’s balance sheet over the past couple of years is reported in the millions of dollars. If it’s not at least a million dollars, it doesn’t affect the company. Projects such as sequels to existing franchises can easily be spelled out for investors: we expect this many millions of dollars for our investment. We spend one, we get ten out. A “indie” sized project has to be fairly large for the numbers to even make it to that scale – Braid, for instance, was produced for under $300,000 – 0.3 on EA’s balance sheet.

The only way to get a project like that to matter enough to the company is to do a large number of them – let’s say 20 or 30 small games as an aggregate that you can talk about to investors. However, the company also wants a certain rate of return on their investment to greenlight a project – and they will do this by project, rather than in the aggregate. Any individual game in those 20-30 games may have a high degree of risk – you could pump 0.1 million dollars in and lose your investment. They are looking at a picture that says that they will make money or not – they aren’t dealing with a game or the people that work for them anymore. They’re dealing with a pile of money and seeing if they can make it grow. The only reason that they don’t, say, open a bank or a gambling casino or something is because their investors expect that they are going to produce video games. If you’re pessimistic in your math – which I’ve learned you have to be if you’re into finances – then even if each game individually has a 90% chance of success, the aggregate has a very low change of success. It sounds odd, but if you lump them together in a financial pile, I would think that the probabilities would aggregate as well. If 20 out of 30 projects are really successful and the rest flop, the person who sponsored that gets called to task for the 10 failures – they were expecting a certain rate of return.

I’ve found that this way of thinking is a bit odd – “we can’t do it because it’s too small to deal with” – yet the thinking is there. Even with EA’s cash reserves (much larger than needed to operate the company), it’s both too small and too risky to put out a bunch of small niche titles rather than the large blockbusters. Large blockbusters are easier to explain and predict – they don’t make people nervous with large ranges like “this could do less than break even or become successful enough that it barely registers as a number on the balance sheet”. At the end of the day, the question that they have to answer is: “why are we concerning ourselves with something that doesn’t affect our finances?”.

It takes a lot of courage to justify those small projects which the balance sheet doesn’t even see as individuals.

Source Control in Unity3d

I’ve been looking for ways to handle source control with Unity3d without upgrading to the Pro version, which is expensive and limits my options if I want anyone else to work on projects as well. However, perusing answers.unity3d.com tells me that this is a question that has been asked and answered many, many times. I have my Unity3d project set up in my Dropbox account, as is the nearest thing to source control that I’m likely to get for the project. I could put the scripts into git, but that would leave a whole chunk of other stuff floating out there, preying on my uncertainty if it would actually work in source control at all, or if I would merely be creating an extremely large headache for myself.

Dropbox works well for what it does, but there’s many things about actual source control that I want, with the couple that I can think of off the top of my head being:

1. Commit comments

2. Integration with trac, which handles my bug tracking and any documentation that I get around to.

3. Being able to binary-search which revision a bug was created in

I suppose that I do feel some sense of entitlement because I originally got this back when Unity was not free, but I do want a fundamental tool back in my arsenal: without source control, I get extremely uneasy…

Health Care Graph

it took me a minute to figure out that the "United States" line in this is NOT a pointer:

http://blogs.ngm.com/.a/6a00e0098226918833012876674340970c-800wi

Uncanny Valley

BoingBoing has a post about the "uncanny valley" effect not manifesting itself when we're in a situation to meet something like a humanoid robot in person. I won't explain the uncanny valley here – that's a task for Wikipedia:

http://en.wikipedia.org/wiki/Uncanny_valley

The important question of note here is if face-to-face communication of this sort rejects the uncanny valley hypothesis, or if there is so much more detail in person that the realism isn't creepy – the uncanny valley effect needs more detail to be creepy the more data that you have. We notice a lot more in person than we can in a photo or other ways – the reason why important business meetings and the like often take place face to face.

How much detail do you need to re-generate the effect in person? How does it differ for movement, audio, etc.?

BoingBoing:

http://www.boingboing.net/2010/01/21/does-the-uncanny-val.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+boingboing/iBag+(Boing+Boing)

Comes With the Console

I was just reading an interesting post by Bruce Everiss, of Bruce on Games (http://www.bruceongames.com):

http://www.bruceongames.com/2010/01/15/some-very-strange-pronouncements-from-microsoft/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BruceOnGames+%28Bruce+On+Games%29

He references the director of XBox product management, who said that there is no need to launch a new console any time soon:

<blockquote>The second worrying pronouncement comes from David Hufford, senior director of Xbox product management, who was also at CES. He told the Guardian: "There is no need to launch a new console, because we’re able to give this console new life either with software upgrades or hardware upgrades like Project Natal. The Xbox 360 was designed for a long life, and I don’t even know if we’re at the midpoint yet."</blockquote>

Bruce then goes on to say that due to Moore's Law, the assertion that Microsoft can just ride on what it has is false, because it won't be able to keep up in terms of processing power:

<blockquote>This is in total denial of the beating heart of game platform history, Moore’s Law. This says that the number of transistors that can be put on a chip doubles every two years. So, for a given price, a game console can double in power every two years.</blockquote>

Beyond this assertion, there is one other simple reason that they can't depend on this: Natal hardware does not come with the XBox 360. Developers are much less likely to develop for Natal because the market that uses Natal hardware is quite small. This feedback loop ensures that not many people will use or develop for Natal until a critical mass has been reached.

This is the same reason that the Wii and Gamecube before it had a bunch of games that supported more than two players: the system supported it out of the box. Developers and producers could rely on the cost of entry to have more than two players playing their games to be quite low – all your friend would have to do to play is bring more controllers. Contrast this to the Playstation, where an adapter was needed to have more than two players play at once.

How can Microsoft fix this? Release a new console which has Natal and other things that you want games to use as standard equipment. If it's not standard, it won't be developed for nearly as much.

VVVVVV

In short: VVVVVV is an amazing game which you should play. Why?

It takes one mechanic and explores it well. It's only controls are left, right, and flip gravity. You will die quite often by colliding with virtually anything, but this is mitigated by the fact that you're usually retrying about 1-5 seconds wirth of gameplay every time that you die. Checkpoints are extremely frequent, and thus makes the levels (two of them in the demo) into a series of mini-challenges, as opposed to the "now I have to play the last 3 or more minutes over again" that you see in a lot of old-style platform games.

Try it on Kongregate:
http://www.kongregate.com/games/TerryCavanagh/vvvvvv-demo

Official site here:
http://thelettervsixtim.es/

"I message", perverted

When I was taking the leadership class for grad school, they taught what they call the "I message" for helping resolve conflict and open communication about a topic. Its format is simple:

I feel ______ when you _______. I would prefer that you do _______ instead.

It is simple, direct, and does its best not to provoke defensiveness.

I saw a similar message featured on TV a few days ago. The format was very similar, but crucially flawed. It read:

It bugs me when you _______. I would prefer that you do ______ instead.

This replaces the "I feel _____" with an opening that puts the other person on the defensive, which makes it very hard for them to listen to what you have got to say. It also limits the flexibility of the statement, as it only conveys annoyance.

The takeaway: small differences in word choices, body language, or similar issues can completely throw off what you're trying to accomplish. Be careful with your words.

Now Posting with Posterous

I'm now trying to post to my blog with Posterous. This is therefore a test.

Metaplace Service Shut Down: Spectating as Alderaan Dies

Today, I learned that the Metaplace service (but, as the staff is quick to point out, not Metaplace the company) is being shut down as of January 1, 2010.  They have not generated a critical mass of users to make it a feasible business proposition.

I was first introduced to Metaplace a couple of years ago, and quickly started posting on the discussion boards and was eventually invited into the alpha test. The potential within Metaplace is amazing, and the people that I was privileged to meet when I was invited to their offices are very smart, dedicated, passionate people. They live and breathe this, and as hard as it is for us as the users, it’s much harder still for the staff centered around the community that Metaplace is. I hope to keep in touch with everyone I’ve come to know there (Twitter and Facebook updates help).

Watching the conversations go on in Metaplace and the shock that was generated left me feeling like Obi-Wan when Alderaan was destroyed: a million voices cried out, and then were silenced. The last part of that quote – “and were silenced” can only apply to the worlds, never the people.

I’m looking forward to what Metaplace becomes; as sad as this day is, it is time to look forward, even as we hold our connections to the past.

Negative Feedback Loop

Quick note: similar to these goggles:

http://arstechnica.com/news/2009/08/jakks-pacific-makes-at-home-night-vision-cheaper-better.ars?utm_source=rss&utm_medium=rss&utm_campaign=rss

have a simple negative feedback loop for the space combat game: double
damage and/or range, but:

1) Alert your presence to everyone in a large radius
2) Take double damage yourself
3) Enemy missiles do not have any lock-on time (because of the excess
radiation that you’re spewing).