it has been a while since I updated by blog - again. Seems this comes in cycles. But life has kept me busy but now, as it settled down, I plan to update more often.
Short recap: 2020 started off nice, my project Homeworld Mobile with Stratosphere Games was developing well in team with Gearbox Publishing. I prepared to move to Berlin, building a new house which took a lot of time from me. Then Corona hit - no travel to cool conferences. I am missing this. November we moved into the new home and been busy with furniture (I hate assembling PAX!) and stuff. Meanwhile Homeworld closed tests shown promise and as we speak we are running the third. I love the team!
Oh, December 3rd 2020 I got married to my love. Main achievement unlocked!
So now 2021 things look bright. New home, Homeworld is going cool, I managed to reduce my clients to two major ones, both are way cool projects, teams and companies. So I got time for them, my project and of course my family.
Stay tuned for updates like "what to think about then your publisher got acquired", "Latest trends in f2p", "What Genshin Impact did to us", "WTF is Google Stadia doing", "Buying spree of companies and why it matters" and more.
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.
I don't like complex setups with PC, cameras etc., so I always want a solution to stream directly from my phone to Twitch, Youtube etc. to make quick analysis of new or older games, like an hour each. Would you be interested in something like this?
I found a little gem of app called Omlet Arcade which lets me stream to Twitch directly from my phone. I would do like bi-weekly streams dissecting a game and explain everything I find - what I usually do for clients. Let me know.
This GiC conference in Poland is a really good one, in case you never heard of it. Excellent speakers, venue, and the attached gamer exhibition draws several ten thousand visitors each year.
about mobile f2p game segmentation. Doesn't sound advanced, but I am not doing the usual segmentation you find on GameAnalytics or other services, I do my own to show that some unusual f2p games simply need to be excluded in your analysis.
If they tape it I will post a video, if not my slides. And btw, Poznan is really beautiful and has excellent food and drinks!
In f2p we use data to make better decisions. Data is magic these days and many companies make the mistake to rely on data too much. The simple reason is that it seems data is easy to read and make decisions upon.
It isn't.
It takes educated data analysts to read data properly. They know the common mistakes of self selection bias or survivors bias, Correlation & Causation or many other data oddities which exist. They also know the validity of the data you try to read, i.e. is the data really solid enough to make conclusions.
And there is this: Data tells you WHAT happened, never WHY.
There is a common misunderstanding that data gives you enough to make meaningful decisions. It does not. Data is a tool to make better decisions, but doesn't replace your experience or the designers knowhow.
The danger which data inserted into our industry is that data seems so easy to read to make conclusions upon that people in your company who are NOT educated in reading data correctly will make decisions based on it. And you don't even know that these mistakes are being made as simply putting data transparent on dashboards for everyone to read is injecting this mistake into your company (thats why I don't support public dashboards inside companies).
It takes specialists to interpret data and present them in a right manner. I learned this the painful way. I saw decisions being made by people who read data wrong. I have seen decisions being made based on data presented by specialists - which was much better.
Why do I think this matters to our future? Because data is the future of everything in our daily lives. Internet companies collect data. Insurance companies collect data. Your phone collects more data about you than you even know about yourself. AI is dependent on mass data and leads to even more data collected. Some governments use data to know everything about you (look at China). Their tech is so advanced including facial recognition that they always know where you are, what you did, what you bought, whom you talked to, online or real life. And if you think China is the only country doing this you are wrong.
Now imagine these Governments like game companies doing the same mistakes I experienced. People not used to reading data correctly will make decisions - wrong ones - influencing our daily life.
Thats why data analysts should be one of the most important jobs we should train - and knowledge about data analyzing should be educated to everyone in our industry (and beyond). Management needs to learn, Designers by default. Train this. It will be the competitional advantage between you and your fellow companies.
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:
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.
2018 was a year full of travel. You will have access to most of my talks which were taped. I also published the ones online for download. So what's coming 2019?
I am busy with two large clients so I actually stopped taking new ones - but I do have partners I can recommend working for you. So don't worry.
I will also cut down my conference visits as I am starting my own mobile game project soon. Watch this space as soon as we can talk about it.
The next conference up is White Nights Berlin. I will talk about the "Lost Art of Immersion on Mobile". Something completely different but its a topic by heart.
The only other conference fixed so far is Devcom right before Gamescom. I do not know if I go to GiC or Digital Dragons in Poland yet - we will see. GDC USA isn't a place for me since years, although I have been on the first 10 since it started (yes, 1988 onwards) and triple-A and console aren't much for me these days although I am helping on a AAA f2p title at the moment. There is also the fact that the advisory board of GDC USA keeps ignoring my submissions, which is strange to experience when most other conferences fight about me but GDC isn't. Well, their loss.
So, if I visit other conferences which topic would you love to see? Let me know. I have covered so many that I might have lost track what you want to hear or learn about.
Casual Connect Serbia, October 1st to 3rd
Doing my Lootbox talk, maybe they tape it so I can post the video. I am also hosting a fireside chat with Patryk from Vivid, details see link above. Looking forward to this one, as I love Casual Connects.
GiC Poland
A week later I am in Poznan, Poland, to visit GiC. It is an awesome conference with high-quality talks, come to get some and see my talk where I try to design an f2p game in 45 minutes on stage.
I do remember back when I launched Panzer Elite in 1999 - a WW2 simulation, but tanks. The same year over 30 (!) flight simulations were released - each one trying to hit the gold mine.
And this wave of followers to hit games was repeated over and over again. Why don't they learn? Remember the MOBA fiasco? A grave of games in the past years. So here goes another:
Consoles selling sub $200 (minus the Pro's) - entering last half of their cycle. 2019 will be hard for larger studios. So be prepared that publishers turn conservative not signing risky or expensive products next year as they already invest heavily in the next generation (it already shows this year).
So please, either split your studio into sizable teams working on multiple lower budget products or resize - yes, this means downsizing is a valid strategy.
Take the free advice, it happened before and will happen again.
The over 10-year-old talk describing the cycles can be found here:
I feel honored. Really. And yes its one of my career highlights I designed, with my own company Wings Simulations I sold in 2000. And it had a tremendously long shelf life and still can be found today sometimes for €5-10. The long shelf life is due to the community - and because we gave the source code of the entire project to them. That was a first back then ...
As written in my last post the Loot box controversy is still active - and getting worse. It is interesting to follow the press, customers outrage, and publishers answers. Battlefront II and their loot box system even created the most downvoted thread ever on Reddit.
The main reason is that players paying $60+ for an AAA title do not feel eager to be forced to pay via MTX to gain significant important items or unlocks in the game. So EA responded by lowering the needed "grind" to unlock important characters by 75%.
See, that's where the problem lies. Users paid upfront and expect the complete game. They don't want to pay to unlock content (and let's not forget day 1 DLC's). The rule of F2P that content has to be free all the time was violated somewhat. That's one point, that they didn't implement the Loot Boxes right.
My second point is one I said often during my talks when Loot Boxes came up, like here:
If you add Loot Boxes as MTX you admit your normal monetization system failed - unless your core mechanic of the game is Loot Boxes. Like Hearthstone. Clash Royale. Or Puzzle & Dragons. You will notice that these games never came up during those discussions. Or why do Overwatch Lootboxes do not spawn that controversy? Think about it.
Basically, EA admitted their AAA retail flat fee model of $60 for an AAA game is declining, isn't making enough money to return a sizable profit so they add MTX.
Many games did this but EA of course brutally forced the MTX system on their game going over the top - while other games do it more wisely - as you should do too. Check out GTA V and their online Revenue, or even Assassins Creed IV Black Flag where I was part of the design team of the MTX system. They never had the backlash EA is feeling.
There are signs on the horizon that the old AAA model is dying. PC revenue is rising but most of that us on the F2P or MTX side, the AAA revenue is not growing compared to previous years. Even console $60 sales are stagnant to previous years or growth curves of previous generations.
It has come so far that AAA publishers contact me to teach them how to implement MTX correctly so the community accept it and it still raises revenue.
So AAA games feverishly try to adapt f2p methods to raise their profits to cover the ever-increasing development costs - and most of these teams never worked in F2p. They need help. Call me if you need to educate your teams. You can add MTX to your AAA title which players actually love to engage in. Loot Boxes aren't the answer. Believe me. Been there, done that.
