The cycle of arrogance

Readers of my blog are familiar with my industry cycle articles. It basically describes a regular cycle which shakes up the industry whenever the consoles upgrade to the next entry. The Playstation 5 and the new XBox have been announced for second half of 2020 - welcome to the transition year.

If you want to read up my posts in the recent years on this blog about the cycle simply search for this word on the top left of this site.

One attribute of console cycles I have never written about is the cycle of arrogance. It means that whoever dominates the current cycle is getting arrogant in the next, forgetting what put him there in the first place - leading to wrong or often strange decisions.

These decisions will make it hard to third parties to develop on the new leading platform during the first 2 years. They will focus on big names & brands first, or their own first party titles. What also happens is that they underestimate the competition leaving holes for them to enter.

So expect the number 2 and 3 (Microsoft & Nintendo) to be more open to new developers, titles and approval processes while Sony will make it harder.

A sign to prove this? There is an internal shakeup at Sony management level where many of the key people who were developer relations or in charge of external titles were fired and replaced. This strangely isn't in the news as usually these key managers are known to developers of all sizes but not to the press or the public.
Still, as a developer, you should be worried if you bet on releasing soon on Sony PS5. You won't.

And as usual before transition years if you run a developer you should have been prepared and found alternative revenue sources or platforms. Did you? I hope you did. As this isn't anything new to the industry, its a cycle with similar attributes and effects to the industry.

And no, backwards compatibility won't help ;)

Publishers fireing people all over

You heard the news. Activision fires 800 people despite best year ever in terms of revenue. Arena.net, the operator of Guildwars, seems to get large layoffs. EA will fire a lot of people from their Australian studio (For Americans: that's near the Hobbit place, not the one in the Alps).

Longtime readers of my blog know why this happens now. Others can read my 6-year-old entries here:

https://teut.blogspot.com/2012/11/transition-years.html

https://teut.blogspot.com/2014/03/transition-years.html

Let's take the Activision case. Why fire 800 people when you had a record year? The reason is, you don't fire people due to the current year's results, but what you see in your forecast of the next. If you look at Activision's portfolio for 2019/2020 there is a large gap of original titles. Even Blizzard, part of Activision, said there is no new Blizzard game coming for a while. So the next one or two years will look bleak for Activision. That's why you optimize your company and fire the bottom 10%.

I am not defending this, I am just explaining. The one thing you can blame Activision is that they knew this is coming, its poor planning (and letting Bungie leave, wtf?).

Activision needs to invest their best teams into the next console generation. As the current one will drop in revenue in terms of software and the new one won't do much at first that gap is what we call transition years. EA is very experienced in this and already cut off workforce last year and will continue this year. If you google back into 2012 you will notice the same happened.

This transition year might not be as bad as the previous ones though as the rumored backward compatibility of the next generation, the Switch and the mobile market might buffer some of the previous revenue losses.

Microsoft takes a dangerous path

If you have followed Microsoft since the release of Windows 10 and the XBox One you might have noticed a fundamental shift in strategy. Not many realize what the reasons are.

The first step was pressure for their prices of Windows. Others started to give away their OS for free, mainly Apple, and mobile does the same. So Microsoft gives away Windows 10 for free for all Windows 7/8 and Vista users. This hurts their financials but the important goal of Microsoft is different: to regain control of their OS ecosystem. The PC is as big as it is because there is a whole industry making money with it. Software, Hardware, Services, you name it. Without it the PC wouldn't have taken over the world. And all these industries make money without Microsoft seeing any share of the revenue. None.

Over time this ecosystem became fractured. In countries where the average salary is low pirate copies of Windows dominated. Locked out of updates they also locked themselves out of software that requires certain Windows versions or updates.

So one goal was to unify their ecosystem making it easier to regain control.

Two things made this possible:

First: the app store which they implemented poorly (ask developers trying to sell or update, its a nightmare) and where they try to mimic the mobile app stores or Apples (which btw failed as well, ask Companies trying to sell over the Mac OSx App Store).

Second the data mining. Windows 10 is a data leak for users. Microsoft collects tons of data and spies on you everywhere. They want the same power Google has. And yes I bet the NSA is happy as Microsoft is known to collaborate with them - a unified ecosystem is so much easier to spy upon. But that seems to be ok now and the NSA drama isn't popular anymore.

Now they announced to unify the XBox one and PC gaming ecosystem as well. In other words if Microsoft locks down game sales to their App Store only the world will experience drama. And yes they can do this. Its their eco system. Valve is worried as this attacks Steam directly and they saw it coming, hence their effort with Steam machines. Check interviews with Valves CEO.

Tim Sweeny, founder of Epic, maker of the Unreal engine, has clear words for this danger:

http://www.theguardian.com/technology/2016/mar/04/microsoft-monopolise-pc-games-development-epic-games-gears-of-war

If you ask developers working for Microsoft or you have sources inside Microsoft the situation is even more dramatic. Under the new lead games no longer are a priority. In fact Microsoft was thinking to get rid of their XBox department but the fear that competitors might buy out the things was big. So they integrated it into their other department which dreams about having a Settop box under your TV (note that movies etc are their priority, not games). If you read the history of the original XBox this fight was inside Microsoft years ago.

So here it comes. Microsoft will force all PC's to install Windows 10 by giving it out for free and stopping support for all other versions.

Microsoft will force all Software vendors to go through their App Store taking a share.

This includes games. Good bye Steam.

Next the Xbox One will be a PC Settop box soon instead a dedicated gaming platform. Including hardware updates - which leads to the fact that it will fail bad as somehow Microsoft forgot why initially consoles failed (Atari VCS time) and why the ecosystem worked when Nintendo changed it.

In the end PC gaming is in danger. In fact all of the PC is. As its strength was its open Software and Hardware ecosystem. Microsoft starts to copy Apple - in a bad way. Again no innovation. Just bad copies.

Dire future under the new Microsoft lead. Do not complain when it happens. As I Teut you so.

The WiiU CPU sucks - NOT

A recent anonymous post is making its rounds on social networks from a disgruntled developer:

http://www.eurogamer.net/articles/digitalfoundry-2014-secret-developers-wii-u-the-inside-story

While its worth reading make note that you can replace the word "WiiU" with any console in the past. Working on new consoles sucks. Launches are always messy. Some remember that Xbox development kits where Apple Macintoshes. Imagine that.

The point about the CPU clock speeds in the article is a bit extreme and wrong. Recent trends basically move more and more work into the GPU of your computer.

Wolfgang Engel, the "Shader God" of this industry (among others responsible for Lara Crofts Hair in Tomb Raider), explained it to me like this:

"GPUs move into the direction of CPUs since 2007. They become more general purpose. Fortunately they have a multi-core / multi-threading model that is very efficient and much easier to use.
On a fundamental level the difference between a CPU and GPU is the type of data they work on. GPUs work well on lots of similar "small" data sets while CPUs can work on more generic data. It turns out that games have a lot of those small data sets and that in general they became more common over the last 20 years with large amounts of data generated by computers.
So what we are seeing is that the importance of CPUs decreases in game consoles and the importance of GPUs increase. GPUs take over more and more CPU tasks. 
This is why the XBOX One and PS4 have -compared to the PC market- rather slow CPUs but quite fast GPUs."

No reason to complain about low clock speeds of your CPU, simply learn proper shader language and do your work there. And that is where the major difference lies from the last generation of consoles: when the PS3 and Xbox 360 was designed the GPU's weren't developed with that general purpose architecture. Now they are.

Sidenote: as all three consoles use AMD chips as GPU's they basically define the GPU and Shader standard to come. I wouldn't buy nVidia shares now...

Edit: and more developers speak out:

http://nintendoenthusiast.com/news/3rd-party-wii-u-developers-speak/

Microsoft is losing one advantage on Xbox One

Microsoft is stupid sometimes. Well maybe more often than we like. Microsoft introduced the internet to consoles. The Xbox was a good start and they made it really good on the Xbox 360. Yes, they screwed up their interface and shop over time, but still it was much better compared to their counterparts Sony or Nintendo.

Why is this? My explanation is that both Nintendo and Sony are Japanese and in Japan the Internet never took off as big as in the western world. Online games never played a major role. The reason I guess is that PC's aren't used at home much due to space restrictions. Japanese people access the internet through their mobile phone. So they had all sorts of online services much sooner than we had. They already had full internet functions when UMTS was still in development in the western world.

If you look at how Nintendo handles the internet it can't get any worse. You add friends by using cryptic numbers like 435132. They claim to protect their kids customers. Sure. That can't excuse the bad online experiences you have with their club Nintendo or their eShop. If you ever tried to buy software there, recover your password or even link new devices you know what I am talking about. Abysmal user experiences.

Sony had the same problem for a long time but patched up their systems over time. Still it is odd that when you login the PlayStation Network on your PC and click on an advertised title to buy it you are redirected to their shop and need to LOGIN AGAIN. Besides only accepting credit cards (no point cards available) they have a decent collection of movies and TV series on top of their game offers.

The PS4 is slightly better in this regard but you see the Japanese style Internet of the 2000's working on all ends. I was surprised that Sony has the lead in live streaming over TwichTV on the PS4 while the Xbone feels like a closed system currently.

And that is my point: Microsoft is losing their big advantage they once had: The internet, online games, connectivity. And Sony is catching up fast. While Nintendo still doesn't understand how the internet works Sony is implementing features fast. Besides Twitch they offer now streaming services for PS3 games through their GaiKai aquisition. If that works well or not doesn't matter, what matters is that Microsoft must speed up their operating software development and store offers, otherwise they will continue to lose against Sony.

The Story about "M.U.D.S."

Whenever I refer to that game I need to explain that I don't mean muds (as in Multi User Dungeons) but M.U.D.S. which stands for Mean Ugly Dirty Sports. Yeah we were creative with product names these days :)

As mentioned in previous posts we worked with a team called Golden Goblins. Due to restructurings we moved most of the team to our main offices in Düsseldorf including my favorite artist/creative Hartwig Niedergassel (see previous posts). He was the backbone of the design but note that all team members contributed a lot to the design on that project. Holger, Volker, Hartwig and me were the creative section so to say.

During these days a team was small, so having 2 programmers, one designer/artist and further 2 programmers for the conversion (Gisbert Sigmund for Atari ST, Jörg Prenzing for C64) was luxury and made this project one of the most expensive we did: 500.000 DM (about $250.000). Doesn't sound much but compared to the less than 100.000 we payed for Katakis ...

Anyway this project is another story of "if this went well I would be rich & famous" stories - this time a CEO of Lucas Film was the culprit. Uh oh. Yes, Lucas.

So we started the project. The idea was born as Grand Monster Slam had a large fan base and we wanted to expand on that setting - and we didn't have a sports game. So we came up with the genre mix of team manager & action sports part.

Remember: Games had a resolution of 320x200 these days 

The Campaign Map 

60fps scrolling on PC!

We envisioned one city where you buy your team players on the slave market from various races and you competed against other teams in that city or traveling teams.

The lead format was PC (unusual for those days in Germany) as it was targeted for an US audience. The 2 programmers made wonders happen on PC on the technology side: we were able to do a 60 fps scrolling on the sport action part - on EGA/VGA cards! Awesome during those days. 

When the game was presentable I traveled to the US to show it to partners if we can get a distribution or licensing deal done, the game was designed for an US audience after all. One company loved the game so much they wanted it exclusively - worldwide. The company was Lucas Film Games (now called Lucas Arts, sold to Disney). And let me tell you this: back during the days if Lucas Film wanted you you didn't say no. You simply went for it - all in.

So they assigned a producer to us called Noah Falstein. Yes, that Noah, great guy, creator of Sini Star, Koronos Rift, and the  Indiana Jones adventures! He made really good suggestions and added a campaign to the game: instead of one city we should feature multiple ones, each being a league with the last city being special - the end game, the finals so to say.



That made the product larger than intended and was the primary reason that the game cost 500k in the end. Time was great, working with Lucas was awesome, we even visited the Skywalker Ranch, had a preview of the latest Indiana Jones movie in George Lucas private THX cinema - on the farm. Even saw original light sabers and met Stephen Spielberg. We all were Star Wars fans, so working for the creator took us to new motivation levels we never experienced before.

More screenshots of MUDS: http://hol.abime.net/2528/screenshot

Skywalker Ranch building where the Games department was

All looked well that we, our little German team, were creating the next big hit from Lucas Film Games, worldwide! We would be famous! We could do more games for Lucas! Awesome!
But again fate had a different idea how to proceed in that story.

Lucas Film decided to make their games department a profit center (until then it was not profitable) and changed their name later to Lucas Arts. For that restructuring the CEO at that time cancelled all external projects to save costs - including ours. 

Oh well, shit happens, but we knew that form my prior sales pitch travel to the US we can find another - IF that CEO wasn't keen on saving his image. He was sure MUDS would be a smash hit but was forced to cancel the contract to to economic reasons - so he tried to make sure that no one got the project! He used his connections to tell everyone in the US publishing scene that the title was shit, the team was impossible to work with and the title would never be finished anyway due to technical challenges. I mean, who would touch a title anyway which Lucas Arts cancelled for those reasons?

Yes, he did that. Covered his ass. Made it impossible for us, a German small publisher to sell the title to a major US publisher - by simply spreading lies.

So we only found a minor one (we had Europe covered ourselves). When MUDS shipped on 2 Floppy Disks (1.2 MB total!) in 1990 it sold pretty well, over 86.000 just in Germany. Despite the large budget we proved everyone wrong who claimed MUDS would be a disaster: it was profitable and one of the very profitable games the publisher did - for a long time as it created a huge following and created a wonderful long shelf-life.

MUDS is one of those titles where I still get fan mail today. If you can configure a 32bit DOS Box it still runs today perfectly and the whole game is only a 1.2MB email attachment.

Side Stories: 
We put the whole team and our boss Marc Ullrich as the slave trader into the games slave market where you purchased your team players. Our boss was not amused as this screenshot with his face was very popular in magazines. Btw Teut wasnt that bad of a player in MUDS:

When Lucas switched development leads one of them became a godo friend of mine, Tony Garcia. We still are in contact these days and he had a great career spanning founding Microsoft Games, working at EA and now is Vice President at Unity3d USA.

When we visited SkyWalker Ranch it was forbidden to take any photos  Secretly we took some and were proud to have them with us. But the camera with the film was stolen from our rental car 2 days later :( So no photos exist of our visit :( 

The ceo who told lies about the project had to leave Lucas some time later and vanished into the depth of the industry. I don't even remember his name, but he had a talent selling things.

Thank you Heiko Klinge for remind me: M.U.D.S had digital sound output through the standard speaker. At that times the speaker could do just "beep". MUDS was one of the rare games doing digitized stuff using speaker only as AdLib cards were expensive these days and Sound Blaster not even released.

Bad opinion II

So it continues. It comes around every couple of years that industry professionals claim it is a good idea for Nintendo to get rid of their hardware business and write their games for all platforms. Mario on PS4, iPad etc. They think it is a good idea.

Some things they forget:

Nintendo is a Japanese company. They are patient as an elephant. They don't care if they lost one generation of consoles, hey, its just 5 years.

Nintendo is a rich company. Valued billions, having billions in cash reserve. In fact it is one of the richest companies of Japan.

Mario, Zelda, Pokemon etc are the high value IP's which cause people to buy Nintendo hardware.

Nintendo always innovated the consoles, controllers and systems with Sony & MS following their lead.

Compared to Sony and Microsoft Entertainment Nintendo had profitable console generations. MS did not. Sony did not.

Why should they bother about other platforms? Nintendo often enough stated that they do not see MS or Sony as competitors. They merely see bicycles, girls and TV as competition as they steal entertainment time from their consumers.

German article on Krawall.de mirroring my opinion:
http://www.krawall.de/web/Wii_U/special/id,65290/

And a video / Statement with the same position:
http://www.gametrailers.com/videos/uujebd/the-final-bosman-what-about-nintendo-