Games are the obvious the killer app of the mobile marketplace.

- 64% of people who pay for an app also download and play games.

- IOS is by far the most popular content centre with 300,000 APPs which is more than Android, Ovi and Blackberry combines.

- Social networking, weather and maps and navigation are all represented pretty significantly.

Deloitte predicts that in 2012 revenue growth for the social games industry may slow to less than 20 percent.

Deloitte predicts that in 2012 revenue growth for the social games industry may slow to less than 20 percent. This compares to the period 2008 to 2010, when social gaming revenues grew 20-fold (¹⁶²⁾. Slowing growth makes it probable that social games makers will begin experimenting with different business models. Shifting the mix to more advertising and less virtual goods looks likely, and at least some games companies are likely to move away from the hallowed “freemium” model and start charging for games up front, especially for those games with higher production values and complexity.

Social games are online games, typically played within a Web browser via a social network. They typically include light multiplayer elements and asynchronous (not real time) activity. The predominant business model up until now has been freemium: it costs nothing to start playing the game and there is no subscription to pay. Aside from advertising, monetization occurs when players pay for extra content, such as additional virtual artifacts or access to new levels of games.

Social games enabled the addressable market for video games to reach men and women of all ages: effectively anyone with a computer of any description, from a MP4 player and up. One sixth of social gamers are over 60 (¹⁶³⁾. The majority are female (¹⁶⁴⁾. As recently as 2008, the traditional console game player was predominantly male, and aged 18-49 (¹⁶⁵⁾.

Due to their crossover nature, mass market audience, platform-neutrality, and low entry costs for players and developers alike, social games were expected to transform the entire industry. At first, this seemed likely: the easy-to-enter freemium revenue model coupled with social rewards (¹⁶⁶⁾ rapidly proved a compelling combination for hundreds of millions of consumers.

However early growth numbers have proved difficult to sustain. By some metrics, and for some developers on certain platforms, the trend was actually negative in 2011 (¹⁶⁷⁾.The social games user base grew very little over the past two years (¹⁶⁸⁾, even though revenues have continued to grow. Although the percentage varies across games and over time, it appears that only about one to three percent of those playing social games spend real money on virtual goods (known as the conversion rate (¹⁶⁹). Further, the core group of paying users, or “whales” (¹⁷⁰⁾, already provides an outsize portion of social game revenues. 46 percent of one company’s revenue comes from the top one percent of users. This group may be reluctant to up its spend beyond the hundreds, and in some cases thousands of dollars invested per year in their virtual ecosystem.

Social gaming companies can also generate revenues from other sources such as in-game advertising, but at present virtual goods remain the largest piece of the pie. One large social games company gets only five percent of its revenues from advertising (¹⁷¹⁾, and even across the broader industry the average ad contribution appears to be only about 14 percent (¹⁷²⁾.

If the audience cannot be grown, and users are reluctant to play, one approach for social games companies could be to increase the number of titles each user plays or the number of hours they spend on each game. But the average person is already spending almost eight hours per month on even the most popular social networks, and that number has risen only slightly in recent quarters (¹⁷³⁾.

Another approach is to add another layer to the social games business model: pay. This may seem counter to the spirit of social games. But today’s leading social games boast ever higher production values and storyboarding. In other media, and in other gaming sectors, consumers are willing to pay for content that they previously received for free, especially if it is perceived as being of high quality. Pay TV is a prime example of this in traditional media, and in the games sector, enthusiasts already pay for access to massively multiplayer online role-playing games (MMORPGs), or to access the online services for consoles.

Bottom Line

Social and casual games are likely here to stay, but it may prove challenging to increase their share of the total $63 billion global video games market significantly beyond its current two percent¹⁷⁴, if the monetization model remains constant.

Social games’ path to higher revenue may lie in iterating the business model, and charging to play games. Revenue models for social games have been primarily dependent on three factors: increasing the installed base, usually measured as “monthly active users” or MAU; increasing the portion of users who pay for content; and increasing the amount that each user pays. All three approaches are valid, but it may now be the time to add a fourth approach – charging to play at the outset.

The social games sector should also learn from the console gaming industry. Developing strong franchises and quality sequels may not be cheap, but it can be very lucrative. The media title that reached $1 billion in revenues faster than any title in history is not a famous 3D movie about aliens… but a video game from a franchise in its eighth iteration and over eight years old¹⁷⁵. It may be time for the leading social games companies to recognize the much-changed quality of their latest titles and charge for them.

Download the report - Extracting the premium from social games

¹⁶² HIS Screen Digest News Flash: Zynga Preliminary IPO Filing Legitimizes Social Gaming Market, June 30, 2011, http://www.isuppli.com/Media-Research/News/Pages/IHS-Screen-Digest-News-Flash-Zynga-Preliminary-IPO-Filing-Legitimizes-Social-Gaming-Market.aspx

¹⁶³ PopCap/Information Solutions Group, 2011:http://www.infosolutionsgroup.com/pdfs/2011_PopCap_Social_Gaming_Research_Results.pdf

¹⁶⁴ PopCap/Information Solutions Group, 2011:http://www.infosolutionsgroup.com/pdfs/2011_PopCap_Social_Gaming_Research_Results.pdf

¹⁶⁵ 2008 Sales, Demographic and Usage Data, The Entertainment Software Association,http://www.theesa.com/facts/pdfs/ESA_EF_2008.pdf

¹⁶⁶ Exposing Social Gaming’s Hidden Lever, Gamasutra, 8 November, 2011,http://www.gamasutra.com/blogs/TylerYork/20111108/8849/Exposing_Social_Gamings_Hidden_Lever.php

¹⁶⁷An In-Depth Look at the Social Gaming Industry’s Performance and Prospects on Facebook, InsideSocialGame, 24 January 2011: http://www.insidesocialgames.com/2011/01/24/an-in-depth-look-at-the-social-gaming-industry%E2%80%99s-performance-and-prospects-on-facebook/

¹⁶⁸ Zynga Builds Its CastleVille Walls, As Its Facebook Traffic Flattens And Falls, TechCrunch, 27 November 2011: http://techcrunch.com/2011/11/27/towerdefense/

¹⁶⁹ Social Gaming Monthly, Thomson Reuters, September 2011, Rpt. 18160425http://www.industrygamers.com/news/social-games-see-just-1-3-of-playersconvert-to-paying-customers-says-crowdstar/

¹⁷⁰ Zynga’s Quest for Big-Spending Whales, Bloomberg Businessweek, July 2011:http://www.businessweek.com/magazine/zyngas-quest-for-bigspendingwhales-07072011.html

¹⁷¹ This Is Zynga’s IPO Road Show Presentation, Business Insider, 2 Dec 2011:http://www.businessinsider.com/its-out-this-is-zyngas-ipo-show-presentation-2011-12?op=1

¹⁷² eMarketer, Virtual Goods and Currency: Real Dollars Add Up, July 2011 (includes PC-based social game revenues only.)

¹⁷³ Nielsen, August 2011: http://blog.nielsen.com/nielsenwire/online_mobile/august-2011-top-us-Web-brands

¹⁷⁴ IHS Screen Digest, IHS Screen Digest, DTTL analysis

¹⁷⁵ The Telegraph, Call of Duty: MW3 breaks $1bn sales record, December 2011  

The fact that professional makers are feeling under threat is not news. There are calls for tax breaks for game makers and novelists, scrambling efforts to lock down (or at least shut up) the Web through legislation. There is even Rupert Murdoch, once champion of antidisestablishmentarianism ideals of publishing, tweeting about why a search engine and mass theft are supposedly the same thing.

They have good reason to feel threatened. The Great Recession has accelerated the process of deconstruction. Nobody wants to invest in professional art in a time when we’ve started to use the word “trillion” in everyday conversations about national debts. Add to this the chorus of devaluation that digital distribution has wrought in all creative fields, the largely hazy arguments surrounding piracy, and cultural trends toward lionizing the past (great for back catalogue sales, not so much for new artists).

To many, it looks like Doomsday. However I think not.

Those Who Know

Creative industries tend to be like clubs. You can get into the club in many ways, but all of them are equally difficult. You’ve put the time in, done the training, had the lucky breaks, struggled and finally made it.

Once you are actually in the club then life is easier. You have a name, you are a part of a network and you work with a lot of the same people year in year out. Members rarely fall out of the club entirely.

I am a member of the games club, for example, through a combination of luck, hard work and some amount of aptitude. I am now in a position where others in the club talk to me (and I to them) and we have a kind of commonality. We are pros. We are “in”. And we are aware that there are so many more people who are not “in” that would like to be.

Perhaps they have an overly-romantic notion of what it’s like but that’s just how it is. All creative fields, from modern art through to advertising have that lustre because people like the idea of making things for a living. In many ways the desire to be “in” is where fans come from. Many fans like to be close to an artist almost as a participant in the creative process. They support the artist, and in a sense support themselves. Those who are “in” understand this, and the good ones encourage others to take the next step and make things of their own.

The Squeeze

However, part of being “in” is the sense that the club can’t get too big, and for many the internet is actually pushing to make the club smaller. Book publishers, for example, no longer offer much in the way of advances. Long-tail services like Netflix and Spotify have such huge libraries that every new artist is competing not just with their peers, but their antecedents also. Distribution may rise but prices fall.

They feel squeezed by piracy. Though they dislike it, many who are “in” quietly believe that they have to keep many more people “out” in order to hold on to what remains. I don’t mean executives etc. I mean established writers, musicians, game makers and so on. We live in a curious age where the freest of thinkers (artists of various stripes) are the ones that want to curtail freedom the most.

Those who are “in” also feel squeezed by something else: Democratisation of tools. It’s bad enough that they have to deal with a loss of revenue, but a reduction of difficulty in getting into the club threatens to increase its size many times over. The future is a world awash with low-rent ebooks, GarageBand music and GameMaker-developed games. Quality will collapse, and there will be no future for the professional any more.

The future, it seems, looks like an amateur hour idiocracy.

Pro-Amateurs

In the startup world, the reduction of barriers is a great boon. You can, for example, assemble a small team and go create a tool that will change the world. As an individual you can create a blog that causes conversations and change. You can develop a game, make music, start a design agency, and all you need is a laptop.

Seth Godin calls the laptop the new factory, and the new age a creative economy where mass production is no longer required. Lacking the previous barriers, we get to see many new kinds of art and entertainment that simply didn’t exist before. We get great new games, novels, rich media ebooks perhaps (Apple may be announcing a tool to that effect tomorrow) and Youtube series.

It’s not amateur in the sense of a lack of diligence, nor is it professional in the sense of those who are “in”. The forces of technology distribution and cheap or free tools creates a space for talent to do what talent wants to do. It creates a class of pro-amateur makers.

A pro-amateur perhaps works on a project as a side-line to her day-job but she treats it seriously. Like any struggling writer, there is the work and the need to pay the rent. The difference is that the pro-amateur then takes her work and distributes it directly. She creates a book, an album, a TV series and just puts it out there. It only really costs her time to do it, and if it works it works. If not, she does something else.

The magic of the internet is therefore this: It substitutes time spent getting into the club with time spent finding fans. Expertise with experience. Legitimacy with audience. Jargon with generosity. And for those with the talent to do it well come the rewards because niche audiences that blossom into tribes exist for almost anything you can think of. No longer is it the time when the frustrated artist with the marionette show has to climb inside the head of John Malkovich to catch a break (see image above). Now he can go global on his own.

It’s a Cambrian Explosion and it is the future-present. Many people will be “out”, as before, but the process of how they get “in” will change. There will be less structure and more aggregation. Less marketing and more marketing stories. Less reliable processes and more productive risks.

For most, those days of a publisher acting as an angel investor to an artist while they hone their craft are over. The publisher can’t afford it and the pro-amateur doesn’t need it.

Instead the new model sees the pro-amateur doing the work of building the market, and then perhaps later a publisher or aggregator cuts a deal with her to scale that operation up. The artist becomes part-business person and so she makes better art. And, in the end, we will all win.

“The Worm has turned”, Jack Nicholson once said in the otherwise-forgettable Wolf, “and it is now packing an Uzi.”

I’m minded of this quote when reading various reactions to the concerted move by the established entertainment industry to stop piracy. It’s not just SOPA and PIPA, but also ACTA in Europe and a variety of national-level legislative campaigns which propose draconian, over-reaching controls to protect content industries at the expense of all others.

The normally-placid geek industries, which prefer to make stuff rather than lobby, are nettled to such an extent that key figures are declaring that it’s time to saddle up. That it’s time to lobby and cajole on issues like relaxing copyright and patents for real rather than talk about it. That it’s time to, as Paul Graham wrote last Friday, kill Hollywood.

So do you want to take up the call?

First, not all entertainment is the same, nor should it be. Though certain sections of the games industry like to over-inflate the story power of games (because of emotional validation and legitimacy issues), they tend to be less interesting as stories than most books or films. This is fine, and not a judgement on any medium. It’s a reflection on how attention span works and what the brain can reasonably be expected to focus on at any given moment.

Second, stories are important. Again, this is not a value statement to disenfranchise any other kind of art (including games) but just an observation. Stories are retold from generation to generation with new signifiers and emotions. Stories teach wisdom and activate the art brain’s wider sense of perspective and theme. This is why as long as there has been language there have been tales, epics, sagas, myths, allegories and so on. They serve an important function in understanding who we are.

Third, stories are universal. They take many forms, but the plots, themes and struggles that they reflect do not change. A story as old as Gilgamesh still has relevance in the modern world, but it has to be translated into the communication form of the day. Not many people really read epic poetry any more and its mode of communication seems arch in a time of multimedia experiences and diversity. Yet when it is translated for them, they get it.

All of which means that the story will live forever and not be subsumed or supplanted by games (or vice versa). However that offers no guarantee regarding specific modes of expression.

…But Movies Might

There are already plenty of relic genres of storytelling. Opera, for example, largely survives on the life support of grants, while the novel seems to exist in a permanent cycle of death and resurgence every three years depending on whether there’s a Harry Potter in play or not. New technologies offer the possibility of doing interesting new things (such as Apple’s new iBook software) but that comes at the expense of other forms.

It is simply about attention span, and the worldwide collective amount of it that can be devoted to one activity over another. It is also about cost, although not the freeloading that the various content industry lobby groups like to paint it as. It is instead about the sense of feeling over-charged, over-handled and controlled. To watch or listen to many forms of content today requires having multiple solutions, publishers who want business from the viewer and so on.

It is also about relevance. Movies used to have a power to define generations, but that has drifted away as the industry started to spend ever more money on process. Many Oscar-winning films are such heavily internal conversations with other movie makers (such as The Artist) that the public barely relates. While at the same time many of the giant summer spectacles are more about emotional validation than exploration.

All of which means that movies might die. Perhaps to be replaced by better television (in the United States, television writing has been considerably sharper than film writing for over a decade). Perhaps to be replaced by Youtube, with series like The Guild. The point is that movies as we understand them do not have some inherent right to exist just because they have existed. It is up to movie makers to make movies worthy of attention, cost effective and relevant once again, which they seem unwilling to do.

Silicon Valley Doesn’t Really Get Culture… Yet

To Valley geeks, everything is a solution to a problem. Graham’s post outlines a future which looks like some sort of more sophisticated Zynga. For many gamers, that shows a devaluing of the qualitative aspect of entertainment and reflects a wider sense that the tech community frequently doesn’t get games. It understands them as behavioural systems and engines perhaps, but not so much on the grander ambitions.

Entertainment industries have a long history of not behaving like other industries because they do not solve problems. They make magic, bottle it and sell it, and the process has rarely been easily repeatable. Nonetheless the Valley is on the move, sick of dealing with contra-evolutionary protectionism from an industry that it regards as corpulent and uninterested in change. It is actively interested in forcing that change because it is to the benefit of the technology economy and the economy of ideas. Y-Combinator is looking to fund startups that promise better ways to entertain. YouTube wants you to make shows, Apple wants to connect iTunes to your TV set and so on.

They may not grok the finer points, but they’re willing to disrupt it anyway and are looking to games to do the disrupting. Games, after all, are increasingly the home of the freemium model of entertainment payment and clear demonstrations of the willingness of fans to pay for the things that matter to them. As I’ve advocated in this blog before, other media have much to learn from this model but seemingly don’t want to. They would rather lament.

This creates a lot of possibilities. You should be paying attention.

An report by the Computer and Communication Industry paints a interesting story on the recession defying power of various media industries to grow despite tough macro economic conditions. All media formats including games are seeing buoyant growth driven in part by mass market Internet and smart device adoption.

The Computer & Communications Industry Association released a study it commissioned, “The Sky is Rising,” by Mike Masnick, who writes about technology policy for Techdirt and is founder and CEO of Floor 64. The economic report on entertainment over the past decade found that the entertainment industry grew 50 percent while consumer spending on entertainment also increased.

Some findings:

• Using numbers from the US Bureau of Labor Statistics, the study charts how consumer spending on entertainment as a percentage of their household income rose 15 percent from 2000 to 2008.
• BLS data also show entertainment sector employment also grew 20 percent during that last decade and 43 percent for those identified as independent artists.
• According to MPAA, box office revenues grew 25 percent from 2006 to 2010 from $25.5 billion to $31.8 billion.
• Data from PricewaterhouseCoopers and iDATE show that from 1998-2010 the value of the worldwide entertainment industry grew from $449 billion to $745 billion.
• From 1999 to 2009 music concert sales in the US tripled from $1.5 billion to $4.6 billion
• Consumers’ choices growing as more movies are produced jumping from 5,635 films produced globally in 2005 to 7,193 in 2009.

“By any measure, it appears that we are living in a true Renaissance era for content. More money is being spent overall. Households are spending more on entertainment. And a lot more works are being created,” wrote Masnick in his report.

CCIA President & CEO Ed Black said having numbers like this to illustrate the state of the market for the entertainment industry helps when crafting policies based on complaints from the entertainment industry about their profits and whether the Internet is helping with new distribution models or killing the industry.

“The numbers paint a quite a contrast from the vision of doom and gloom the entertainment industry has pointed to lately. Having a more clear picture of the economic successes and challenges of the content industry will help lawmakers around the world as they consider policies like increased copyright enforcement. We can hope future proposals will be more proportional to the scope of the problem and not designed to subtract from one industry’s bottom line to potentially add to another industry’s profits. Statistics like this report could help everyone better determine both what types of policies are actually needed and what approach is likely to be effective,” said CCIA President & CEO Ed Black.

In the same week, two stories about cloning are making various rounds. One involves Triple Town, a neat puzzle-sim game from Spry Fox, being cloned on the iOS App Store. The other story involves Zynga (predictably) first offering to buy and then copying Tiny Tower. Both have resulted in the original inventors calling out the clone for what it is in public.

Should anything be done?

Is It A Clone?

Since the case of Dungeons and Dragons versus Palladium in the early 80s (if not well before), copyright has tended not to cover gameplay but instead its expression. So branding, appearance, trademark, level layout, music and so on are all copyright, but inventions like a new game action are covered by patents. And patents are expensive.

Larger companies therefore have an incentive to copy from smaller companies, but change what they copy to avoid infringement. And they do so all the time. Even the companies that we regard as nice guys crib from the competition regularly in all fields in an ideas-versus-execution vein.

Often the question of just how cloned a clone is is just a matter of degrees and a willingness to go to court. Sometimes the copies become so pervasive and multiply that they coalesce into a whole genre, whereas at other times the copies rise and fall, leaving the original largely intact. Sometimes a clone wins if its owners are able to overwhelm the original’s distribution. Sometimes the clone manages to get purchase on a new platform early.

At a gut level cloning just feels wrong to many, yet at the same time it is often from aping the competition that new games are born. In the online age especially this becomes a complicated issue, as a game may well start out as a copy but then evolve into its own entity. Many behaviourist games (such as social games and gambling games) follow this path almost as a matter of course. They consider it good practise and lean development.

Yelling About It

When Spry Fox expressed their dissatisfaction over Yeti Town, it hit Twitter and other social networks. When NimbleBits felt aggrieved by Zynga’s game, they took to the social airwaves to express that dissatisfaction and the story was picked up by TechCrunch.

There is no effective defence against cloning, but while another company may copy your product they can’t copy your voice. Your tribe can become very motivated by the injustice and take to the airwaves to say so. This has an effect in the market that may not become immediately apparent, but persists. You seem more awesome and they seem more shallow. Increasingly so as social media becomes involved.

These sorts of moves may seem ineffective, but they just take time to work. While the average muggle doesn’t particularly care and will play the first version of a game to cross their path, fringe gamers do care. Authenticity matters, and it does no good to be silent. If you invented it, say so. If the clone copied copyright-able elements (like level structure or art), sue. Don’t be meek, don’t be invisible.

What Winning Looks Like

It’s important to understand what winning looks like. It is not always about being biggest, and to get swept up in a revenge-kick is dangerous. To be biggest is to be a different kind of company with different priorities and a different marketing story, and is that what you really want?

While Farm Town might claim that it had a legitimate claim to all of the players that FarmVille subsequently found, I suspect this is not true. Zynga may not be the most creative of organisations but they do know how to spend money on customer acquisition ($120m spent last year apparently) and it all likelihood those were customers that were otherwise out of reach.

Winning is also often about patience. PopCap had to watch as the entire world cloned Bejewelled but they just kept at it, making the best version of the game and putting it into every platform. Slowly it reacquired a dominance and loyalty that the clones just couldn’t match.

On an even more epic scale, Apple (once inspired by Xerox to make a great product, only to find it rather more closely inspired by Microsoft and losing a dozen years in lawsuits in the process) is now the biggest technology company in the world. It just kept leading, telling its story and proving it was better. Ditto for James Dyson, Nintendo and many more.

Don’t let the clone corrupt your intent. The worst effect that a clone can have is to compromise a creator, make her cynical and resentful. Clones happen just as sure as night follows day, and sometimes they are from big boys or untouchable companies in China. Equally, sometimes they are homages.

Whatever the reason, don’t let it faze you. As with piracy, getting lost in the realm of what you think you’re owed is both a fool’s errand and a sad enterprise. Keep seeding, keep making awesome things and keep telling your story. Stay true.

PS

If you have 2700 people on staff, you really should be able to muster up an idea between you. Seriously guys.

I believe that games are an art form that defines the twenty first century. However, compared to some other art forms, they are somewhat conservative. They may be loud and violent, or quiet and serene, yet the kinds of worlds and roles that they offer are often recognisable and safe. Rarely do we see games that confront society as well as being fun to play.

Instead they tend to play it straight, focusing on the authenticity of escapism, the rewards and the gameplay. Their role, it seems, is to escape existing culture rather than define it.

Can games define new culture? Are they able to be edgy? Can we foresee a day when the ideas within a game cause discussion and debate much as a controversial play might? Are games capable of radicalism?

Authenticity

Talent shows like The X-Factor use cover versions of songs because the audience will connect with them. Established Marvel characters are prime fodder for superhero movies because they hold significance for an audience that used to read those comics. Literary novelists often use allusions to long dead authors because those allusions mean something for critics and scholars of the form.

This kind of connection is called a signifier and it invokes emotion by association. Signifiers are characters, symbols, quotes, names or other aspects of previous works from which an audience can recognise and infer meaning.

Some works become signifiers when many do not. Why is Star Wars relevant, but not Battle Beyond the Stars? Why do orcs and elves endure and not a thousand other fantasy races? When you describe someone as ‘chaotic neutral’, why does that trigger instant recognition when many other roleplaying games have their own alignment systems? Why are vampires perpetually cool, but ghosts are often lame?

Sometimes it’s because a work manages to break new ground and define a genre for all the rest to follow. Tolkien, for example, set the template for high fantasy and his orcs, elves and dwarves have reappeared in countless other books ever since. More commonly it’s because a work taps into self identification and affirmation. We see some part of ourselves reflected in it, and that gets past our usual filters. It holds resonance, which makes it a powerful potential tool for artists to use.

Yet while some arts have a rich tradition of using signifiers for irony or radicalism, games are usually straight-laced. Mario doesn’t really do irony, and many a story-driven game is a po-faced and belaboured affair. Perhaps they need to be that way.

Does Skyrim attract such interest because its audience has seen many swords and sorcery movies and wants to take part in that fantasy? Absolutely. Do they want that fantasy to be a radical departure from those roots? Probably not. They want to be warriors and wizards, go on quests and kill dragons.

FIFA 12 attempts to be a faithful recreation of the experience of football with as much authentic detail as possible. Gran Turismo is as realistic a reproduction of car racing as can be managed. Wii Sports is exactly what it sounds like. The Total War games aim to capture the actual historical spirit of the eras in which they are set, not some spin on them. Rock Band is all about you getting to let your inner Trent Reznor loose.

This desire for authenticity places many games at the back of the cultural queue. They use their source signifiers to recreate an experience that players have already seen, whether in a movie or on TV. The appeal of the game is all to do with enabling a fantasy, not defining a new one. These players don’t want an re-imagined Star Wars MMO that deals with societal issues. They want the one with lightsabers and TIE Fighters, just like they saw at the movies.

Fringe Gamers

Sales of failed experiments like Brutal Legend, Beyond Good and Evil or Psychonauts seems to back that authenticity assertion, and it even explains the success of Mario, Zelda and a number of other heritage franchises. Like the players’ relationship to Star Wars or football, they are early games that players encountered in their youth when they had no expectations. They have just as much value as signifiers today as those from any other medium.

But I think the authenticity argument is only true at a particular scale. While the majority of players relate to games with an authenticity-first mind-set there is an undeniably strong streak of players who are interested in games as an art form in their own right. It doesn’t make sense to spend $50m on a game for this audience, but at a smaller scale ($0.5-$5m perhaps) they are very viable.

It’s a little bit like the soft division between blockbuster and fringe audiences seen in many arts. The people who read airport novels versus those who avidly read specific genres. The people who watch Les Miserables versus those who go to the Edinburgh festival. The people who love pop music versus those who dig Ani DiFranco. Each works at an appropriate scale.

My rough guess is that 10% of console and PC gamers, but probably less than 5% of mobile and 1% of casual or social gamers are fringe gamers. That translates to a market size of maybe 20 million worldwide across all formats. They are fewer in number than the overall market but also much more likely to be interested in and try new games.

A common trait of fringe gamers is that they appreciate irony, playfulness and knowing subversion of the norm. They are the sort of players who love Castle Crashers, for example, or the works of Jeff Minter. They get a kick out of the comedy elements of Fable and hold designers like Tim Schaeffer close to their hearts. In Britain they fondly remember many retro games like Jet Set Willy or Hover Bovver. Around the world they are the types of player who dig Minecraft.

Games like Limbo, Bastion, Ico, Amnesia, SPAZ, Insanely Twisted Shadow Planet, Rez and many more are more than just authenticity-led. They are experimental, humorous and exploratory, but often quite knowing. A game like One Chance, Alien Hominid or Portal is built for an audience with a past rather than a blank slate audience who never cared.

The fringe carries its own associations with it, which makes the games that work within it a sub-culture quite different in tone to the blockbuster. Developers like Tale of Tales exist wholly within the fringe and make games that most players would find oblique. So the downside of the fringe is that while it is more experimental and certainly influences bigger games, it is often inward-looking and self-referential.

‘Fringe’ is a large but loose label. It includes various sub-groupings that label themselves ‘indie’ (though not all, as indie itself means many things). They are simply those players who are interested in games beyond face value authenticity, regardless of form or format. The fringe is therefore the most likely breeding ground from which radical games could emerge.

Where Is Gaming’s Radicalism?

At various times through history novels, plays, songs and other forms of art have caused riots. Stand up comedians have incited crowds, statues have created controversies and poems have been the seeds of revolutions. While the western world is arguably jaded, we still see this effect played out in the media. Controversial dramas, breakthrough albums and more form an important part of the discourse of ideas and generate hot debate in various quarters.

That, in essence, is what I mean by radicalism. Radical works are distinguishable from other works in that they don’t just make you laugh or think. They incite something. They chime with their audience emotionally, often divisively, and take many forms. They can be creative, social or political. They shock with a purpose, and subvert signifiers to do so.

Unlike the flat recreation of authenticity or the ironic interpretation that is a common feature of the fringe, radical works deliberately turn signifiers on their head. Like the Sex Pistols album cover for God Save the Queen, the whole point is to catch the audience off guard.

Some game developers attempting to be controversial make immature and tasteless nonsense like Postal or Rapelay. These kinds of game are not radical, just cynical, and the only kind of rage that they induce in public is a generalised fear of games poisoning young minds. Age rating arguments, videogame addiction, Hot Coffee and so on are common staples of a reactive sector of the media which fears games in much the same way as parents in the 1950s feared comic books.

That’s about as far as it goes though. We never see a public reaction to anything else about games. Nobody riots because of what a game had to say about them as a person, and no game has ever incited a revolution. Games tend to fall into the same trap that most geek culture does, which is to be ignored most of the time.

However, unlike geek TV, games don’t often use this opportunity to explore radical ideas. Buffy the Vampire Slayer deals with issues of death, loss and sexuality in a way quite unexpected for a genre show. Torchwood has a gay leading protagonist. Fringe (the TV show) has a lot of quietly positive (or at least non-negative) things to say about drugs. Star Trek showed the first inter-racial kiss on television and broke new ground doing so.

Games tend to be self-conscious about being confrontational. Games like Amnesia are so melothaumatic that it’s hard to take them seriously, while others like the visually stunning Journey or Shadow of the Colossus are certainly beautiful, but escapist. (Not that there’s anything wrong with that per se).

Self Censorship

While there is no Comics Code Authority of the games industry, different platforms often exercise some level of censorship which, in turn, affects the kinds of games that get made and the kinds of ideas that developers feel comfortable with.

Issues that the rest of geek culture happily explores, like politics, race, sexual orientation and other themes are often held at one remove in the games industry for fear of backlash. You are welcome to create a gristly shooter, but not to use the n-word. You can show gory corpses, but any suggestion of sex must be off screen. You can permit players to construct their own gay relationships within games, but avoid creating deliberately gay protagonists.

Even soft satire is often not permitted. When Molleindustria released Phone Story for the iPhone (which caricatured mobile phone manufacturing) Apple banned it. Had they banned a film or album from iTunes simply because it was critical of Apple, it would have been a big deal. However games are considered a second class citizen of the arts when it comes to this sort of thing.

It’s hard to see how a radical videogame might make it to market because the industry is prone to weeding radicalism out, and there is little hue and cry from players. Developers, publishers and platform holders often dislike the idea that their game will cause a fuss and so they tone down, ban or anaesthetise content that might cause offence. Some might say this is good because games are supposed to fun rather than serious, but I think this misses the point.

Radical comedy like Brass Eye is funny, while God Save the Queen is both a radical statement and a great tune. While short-sighted gatekeepers stand in the way, games will probably remain stuck as authentic simulators or fringe experiments. However that may, and should, change.

While I don’t expect Apple to change its stance any time soon, Molleindustria were able to create an Android version of their game. While I faulted LA Noire for many game design reasons, the inclusion of chilling crime scenes (including hunting a serial sexual predator, complete with victims) showed that it’s possible to push the boundaries of acceptability.

Neither are what I would class ‘radical’ yet, but it feels like we’re getting closer. If the reins are relaxing, and platforms like the HTML5-fuelled open web can be allowed to monetize (through Google Checkout perhaps) without interference then maybe this will be the time when radical games really come into their own. Wouldn’t that be something?

Experimenting with new interaction is important. Without it, we would never fully explore new interfaces. And yet, new ways of controlling games often feel forced.

The developer reinvents how to jump by tying it to the release of a button rather than pressing it. She crafts a system for issuing orders to units through complicated gestures rather than selection and clicking. Weird controls turn perfectly natural actions into arcane ones, forcing players to re-learn skills for no good reason.

Developers (particularly indies) seem to assume that clever interaction is the key to making great games. Sometimes it is. Mostly it’s the opposite. Standardised interfaces form over time for a reason, and running counter to them is usually bad game design.

Standardised Controls

A typically hilarious segment on Top Gear traced the history of car controls, starting with the earliest horseless carriages. The first cars were controlled using bizarre arrangements of gears and levers until 1916 when the Cadillac Type 53 was invented. It proved the inspiration around which all modern cars now follow, and to this day there is little variation on that template. Why? Why stick with an imperfect design from 90 years ago rather than reimagining it?

When a device is brand new there is significant delight in learning how to use it, both for developers and users. After a while, however, users form a template understanding of what it is and does and they dislike changing that understanding without good reason.

When an interface becomes good enough to provide robust interaction with few major downsides, expert users consider it a waste of their time and a test of their patience to re-learn a skill that they have already mastered. A driver does not want to re-learn how to drive every time he buys a new car. A chef does not want a new way to activate a hob when the one he knows works well enough. An office worker does not want to have to learn how to use Microsoft Word all over again.

With games it’s similar. There is a difference between the mind-set of the novice and the expert, and you mistake them at your peril.

Old Rope is Still Old Rope

When a player picks up a Guitar Hero controller and figures out the basics, this interaction feels delightful. It’s a brand new skill, and mastering game dynamics (a.k.a. fun) based on new skills is often exhilarating. One of the defining features of founderworks, in fact, is that they teach a brand new skill.

Tetrist developers (especially tetrist indie developers) often consider their games to be founderworks (when they are not) and over-estimate the value of the physical skill that their game teaches. They assume that the audience will approach their work with the mind-set of the novice, but this is generally not the case.

Some developers have even taken to messaging the player at the start of the game asking them to play without preconception (such as Amnesia begging players not to play game to win). Players can’t really be expected to do that. They bring all the games that they have maximally mastered with them when they play a new one, and indie audiences in particular tend to have played many more games than the average muggle.

Muggles buying a Kinect might approach it as novices, but players who buy the new Battlefield or Call of Duty don’t approach a new game set in that perspective with fresh eyes. They immediately sense when the controls are weird and the feel is wrong and they judge it there and then. Some players (particularly self-conscious types like bloggers, other developers, reviewers or students) will push through that feeling, but many won’t.

Experts want the skill that they already have to be enhanced, to gain new mastery in dynamics with which they are already familiar, and to enjoy the experience on a higher level. They have expectations.

Redesigning controls that don’t need redesigning often seems like money for old rope. Once the expert player has had a chance to familiarise himself with your unique controls, he realises that the underlying skill is actually very ordinary. The game is not imaginative, and instead the developer is covering the lack of imagination in pretence.

That sensation is why many fans often respect, but don’t really get excited by, indie games. They see through the disguise.

If in Doubt, Standardise

Does your game need to teach a new physical skill? I mean a really new one, not an old one done in a different way? Is it appearing on a platform whose conventions are not yet locked down? If not, if you are making a game to work on a standard platform like a console or PC, then standards are your friend.

Stop and think about why you would want to annoy players rather than enable them to have fun. Your players have already played a game or three in their time and an interested fan is a valuable customer over the long term, so work with fan expectations before you confound them. That’s how you win their love.

Teach them a whole new way to suck eggs, however, and they will not be so kind. Good enough is often better than perfect because it’s what players already know, and that gives them confidence.

Isn’t that a good thing?

Traditionally, labelling a game niche is a sideways way of implying that it’s trapped in a ghetto. It invokes a sense of smallness, where games that are strictly for hobbyists struggle to survive.

In an industry that used to want to eclipse Hollywood, maybe that was a justifiable attitude. However in the age of single-franchise publishing, niches are really important. They are where tribes of engaged players come from, and if you want to change the world then a niche is where you need to start.

Interest Graphs

A social graph is your list of friends, family, colleagues, contacts and friendlies. It also describes how those people are connected, with you as the central node and everyone else branching out from you.

While we all have social graphs containing hundreds of people, our interest in what’s going on in their lives generally only extends as far as broad common denominators like news of births, deaths, engagements or marriages. Beyond those categories, our interests become much more about relevance to us. So lots of friends will like and respond to your wedding photos, but most won’t look through all 100 of your holiday snaps and comment on each unless that holiday is relevant to them.

Most people don’t share many common interests across their entire social graph. Rather, their graphs break down into many smaller groups of friends with whom they share some interests, and some (especially family) with whom they share none at all. Friends in your social graph who share an interest with you probably share it with friends in their own graphs too, and some friends in your social graph become friends because you encountered each other through a common interest rather than a common friend.

And so, through interests, groups of friends and strangers interconnect in ways that their social graphs do not capture. Instead they form interest graphs, also known as niches.

The primary difference between a social graph and an interest graph is that a person is not the central node of the network. Instead, the central node is a topic (which may sometimes be the public image of a person, such as a celebrity). Topics might be as broad as pop music or as narrow as Lady Gaga. They are frequently interconnected and loosely hierarchical, so broad topics contain many narrow topics. Heavy metal fans encompass the niche of Anthrax fans, for example.

Interest graphs also frequently have factions who dislike or dispute each others’ point of view. Anthrax fans may hate Slayer fans despite their common ground. Indeed they may hate Slayer fans more than they hate Lady Gaga fans, precisely because they have some commonality.

Interest graphs usually form communities, and some venues for communication are more active than others. The Minecraft Facebook Page typically has a new post every 3 days and will have hundreds of comments under each. On the other hand, the Minecraft Subreddit has only 80,000 readers but they share nearly 600 images, links, videos and thoughts every day.

Niches and Tribes

The key point for those who are inclined to pooh-pooh niches and aim for the mainstream is to realise that there is no longer such a thing. There are only larger and smaller niches. They each have their own pre-defined interests and world view, and yet they are the gateway to wider success.

Niches are always either growing or dying. Dying niches are often fans of relic genres and commonly have an older demographic. A dying niche doesn’t grow, evangelises only within itself and slowly shrinks as members leave. A growing niche, on the other hand, embraces change and its members evangelise about their interests outside of the community. So it attracts new blood.

Niches are the birthplace of tribes. A tribe is a movement of fans that emerges from within a niche with the energy to re-order everything. Tribe members have a cause, a story to tell (your marketing story) and a passion to tell it. They do your marketing for you, attracting more and more fans through their enthusiasm.

Tribes can evolve from either growing or dying niches. They sometimes flame out, complement or eat their original niche depending on circumstances. Some tribes massively outgrow the niche from which they emerge. Others remain a small part of a larger scene. Sometimes tribes that come from niches are reincarnations of older ideas in new forms. At other times they are sub-divisions of an existing niche formed for ideological reasons. Ideological tribes are usually the hardest to grow.

As niches are the breeding ground for tribes, so tribes are the seeds of new niches. A niche is essentially the grouping that remains after the initial energy of the tribe has worn off and a social structure evolves in its place. Once a niche is formed then it the best opportunities lie in pushing some members into becoming a new tribe. And around it goes.

Affirm, Then Push

People do not buy games just for something to play any more than they only buy clothes just for something to wear. Often they do, but when their interests are involved they also buy these things to reaffirm their identity.

When you buy an XKCD T-shirt (see above) and wear it proudly, you are both clothing and saying something about yourself. ‘Look’, you are saying, ‘I understand quirky science jokes’. And when someone reads that T-shirt and chuckles you know that you have a connection. Equally, when others – including people in your social graph – do not then you know they are T-shirt muggles.

The dynamic of how and why that works is pretty complicated, but it’s important to bear this in mind: When working with a niche it is vital to get on its wavelength before you push it toward forming a tribe. Tribe leaders are often members of niches because they understand the niche at a level that an outsider can’t. This means you either need to already be an insider or take the time to become one. Otherwise you will seem like (and in fact be) a fake.

When you understand who the niche members are and what motivates them, then you can figure out what their chief cause is. All niches have causes, abut these are not to be confused with niggles. Niggles are aspects of the niche’s favourite game that annoy players or test their tolerance, but not enough to make them leave.

Building a slightly better World of Warcraft is merely addressing niggles with that game, and has failed on numerous occasions. Many games have attempted to steal audiences from one another over the years by appealing to tolerance niggles with USPs, only to fail. They fall prey to their own lack of ambition.

A cause is more fundamental than a tolerance niggle. It is a major departure from the original game or genre that adds a whole new dimension or takes away another. Counter Strike players playing the demo for Battlefield:1942 and discovering the joy of vehicles is an example of a cause. It was a major departure from the standard setup of the first person shooter, which offered significantly different thaumatic experiences, yet FPS fans could grasp what it was at the same time.

The cause is aligned with where some people in the niche want to go next, but is rarely directly expressed. It is the answer to the question ‘Wouldn’t it be awesome if you could…’, and the niche knows it when it sees it. Answering that question where you need to push.

Why You Need a Niche

When I wrote about finding games for your players, I suggested a to-do list starting with ‘Find a tribe’, but on reflection what I mean is that you should become an insider in a niche.

A better to-do list is:

1. Be or become an insider in a niche
2. Find out what its chief cause is
3. Build a platform (as in a website or blog) to talk to that niche. 
4. Talk to them a lot. Push for the cause. Expect resistance.
5. Build a community. This aids formation of a tribe.
6. Build a game that speaks to the tribe
7. Give the tribe the means to evangelise about the game

And keep doing that. If you launch cold into a platform without the advantages of great timing, a huge advertising budget or a platform story, your game will probably sink without trace.

Even if you do have those things, you will probably end up permanently yelling at the top of your lungs for attention while customers remain unfazed. Doing that can eventually work, but it’s hard to keep that kind of enthusiasm going. On the other hand if you have a niche in mind then it gives you something to build toward, a core of customers who are preferentially interested and who might well mushroom into a tribe.

The key to smart business these days is getting your customers to do your advertising for you, but if you want them to do that then you have to go to them first. So if you find yourself looking at a game design and asking ‘Isn’t that a bit niche?’, consider that it might not be niche enough.

Niches are where greatness begins.

(Today’s image comes from XKCD. You can buy the T-shirt and show everyone that you get the joke here.)

The social games industry sprung back into the news last week after a quiet few months with the exciting revelation that Google+ had officially opened up its games business. Offering a clean design, an attractive financial package and even a hosting solution, it seems like it could be the next hot ticket platform.

But is it?

Google’s Offering

Here’s a quick summary of the key differences between Google+ and Facebook (for games):

• G+ will levy 5% of the sale price of virtual goods compared to Facebook’s 30%.
• Games are presented as a primary option in the main G+ interface. Facebook’s are not so immediately visible.
• G+ games are presented with a clear storefront showing featured games. Facebook has no storefront and relies on users discovering games through friends or advertising.
• G+ users can find their previously played games from the storefront. Facebook users can find them from the home page through an expanded list.
• G+ has, as yet, no advertising.
• G+ also has, as yet, no publically viewable metrics of game usage. Facebook does, which makes analysis of trends easier.
• G+ will apparently offer hosting for games on Google’s own servers. Facebook does not.
• G+ games seem to have a larger canvas area to play with, around 930px wide. Early games are not using this yet, so many games are appearing with large grey borders on each side.
• Notification feeds seems to be more formally separated from the main feed (For example, game invites, high score boasts) and have no front page presence in G+. Facebook’s are intermixed.
• Facebook games can cross-publish to other players’ walls. G+ games don’t seem to have an equivalent ability.
• The Google+ presentation is, on the whole, very clean. The Facebook presentation tends to be more cluttered/noisy.

Wins

Most of my industry friends and clients immediately noticed that 5% figure. Many of them are already finding Facebook’s 30% a real stumbling block, especially when they also have to fund the cost of their own hosting. So 5% makes them immediately happier.

The possibility of Google-run hosting is also interesting, depending on the cost. On Facebook there are essentially two failure points for games: Facebook itself and your cloud hosting. This causes a lot of lag or even a lack of service if one or the other is down. So in theory having your game on the Google stack where G+ also lives should be more robust and faster.

Another positive is the storefront (as shown in the image at the top of this post). As I wrote about a few weeks ago, one of the reasons Facebook is no longer an interesting platform is the lack of a storefront to talk about new games, which is why it has become stale and dominated by Zynga. In theory (depending on how Google manages that storefront) G+ is more capable of promoting interesting apps and so keeping the ecosystem vital and less beholden to a few super-developers.

The larger canvas is also welcome. Facebook games have often had very cramped interfaces, and are surrounded by distractions. This makes it harder for developers to establish deeper engagement with players. Interestingly, and possibly in response to the Google threat, Facebook has recently announced that increased canvas size is also coming soon to its platform.

… And Losses

One downside is that the various mechanisms that social game makers use to acquire or retain users in Facebook are much more curtailed in Google+. G+ keeps games within their own area, and doesn’t have any advertising space in the main interface yet.

This means that G+ is more reliant on users noticing the games feed that appears under the storefront, and the game notifications (including invites) in the menu on the left. When Facebook took similar steps at the end of 2009 to shut down the abuse of viral channels by developers it killed growth. So much so that Facebook had to turn those channels back on.

The problem with hiving notifications off to such an extent is that players don’t really care about the social side of social games nearly as much as the industry imagines they do. Unless notifications are actually in players’ faces, they rarely notice or think to go find them. At the same time this creates a tension for other players that don’t want to be bothered by social network spam.

Likewise the lack of an advertising space in the interface impedes acquisition and retention. A company like Zynga, for example, doesn’t just use social advertising to tell new players about their wares: They also advertise to their existing audience as a way to remind them to come back and play. This helps Zynga to overcome the significant usage blindness that the Facebook interface induces, and the G+ interface too.

Together, these issues mean that the G+ interface is incredibly reliant on the storefront to drive users. In essence Google have created a social network with many advantages, but with the marketing structure of the iOS app store. Whether the two can play well together is an unknown that will magnify as more games come into the channel.

Early Birds

Google+ is only open to a few key already-established developers like Popcap, Zynga and Wooga. This is a very significant issue for the platform for two reasons, one short term and the other long.

In the short term, G+’s game selection looks awfully familiar. The platform story of Google+ can’t just be that it’s another Facebook. It needs to be more adventurous than that, and different (especially desirable) game content is the primary way to do that.

The long term reason is that as established developers figure out how to maximise G+ in a relatively protected environment, it increases the likelihood that one or more of them will become the dominant force in the platform permanently.

At first glance that may not seem like an issue. An established developer brings the skill in making successful social games, and so can help Google solve the major issues with the platform. However if it carries on long enough then what will happen is that one or more third party content providers will be powerful enough to dictate the future of the platform. As has arguably happened to Facebook games because of the might of Zynga.

The console industry has known this for a long time, and it is a source of unending tension between first party (platform holder) ambitions and the contradictory needs of almost-as-powerful third parties. Third party publishers often have ambitions that are at odds with those of platforms because they are looking beyond just one platform. They want to be able to be cross-compatible across many platforms, offering as uniform a software experience as possible, but for a platform that can be a death sentence.

In the console industry this often resulted in games created with middleware that look identical across all platforms and which tended to behave sluggishly in comparison to exclusives. That’s why Sony, Microsoft and Nintendo all work hard to get exclusive killer apps. Exclusives draw users to a platform like nothing else and make it the place to play.

G+ currently does not have any exclusives in its arsenal. It has a lot of me-too content which could just as easily be on any one of a dozen other platforms (and in many cases is). Zynga Poker, Bejewelled and Angry Birds are just not going to get it done because everybody’s played them to death already. The risk of having such commonplace content is thus that Google+ may end up looking an also-ran platform.

Audience Fit

Perhaps the most important question is whether Google+ turns out to have a different flavour of community than Facebook. It seems to me that it will.

Just as Gmail tends to attract more of a certain kind of savvy, web-engaged user than Yahoo or Hotmail do, I suspect that G+ is the same. There is something about how and what is used for that has a sophisticated air (particularly the focus on Circles) and for many that will seem a bit complicated, just as threaded mail still is for your average used-to-Outlook user.

G+ is essentially a social network for smart people. If so, I think this means it will not beat Facebook in terms of raw user numbers, but it will have more engaged users. It will also attract a smarter class of gamer, and this will mean that the audience fit for game content will be different.

A game like Horse Saga will not easily find an audience in Google+. The viral hooks which use appointment-driven gameplay will find it more difficult to gain traction when those channels are less available, and the subject matter will probably not sit well with the audience. However a game like Realm of the Mad God, which would struggle on Facebook, might do very well.

G+ might also prove to be a better venue for the simultaneous style of social games that Raph Koster foresees. It has integrated video chat and a generally better chat client than Facebook, and both developers and creative people are already toying with its capabilities in new and interesting ways. With Google+, you might finally have an effective way to play Dungeons and Dragons with all your old college buddies even though they’ve moved abroad.

How awesome would that be?

Conclusion

Google+ is not a second Facebook, and it’s unlikely to ever be so. It probably won’t be a social network for your mother or a self-advertising tool like Twitter. Instead it looks like a social network that geeks and other assorted smart people will get.

That’s if Google handle it right. There are a number of challenges, most especially that of making their API available to developers soon, and then working with them to develop some special content that defines the platform. Handle it wrong and it will be dead long before it has a chance to be interesting.