Eve Online - the future of online games?

Many people ask me why I use Eve Online as a reference for game mechanics, even though most players who tried Eve know it basically is a hardcore game for old farts. Its accessibility doesn't exist, the tutorial still sucks even though it has been revamped multiple times now.

Still Eve Online hit the 500.000 subscriber mark - after 10 years. Compared to World of Warcrafts 11 million Eve must be a failure, right? 10 years and only 500k subsribers?

Well it isn't - as it solely finances CCP's Dust514 f2p PS3 game (thats a lot of abrev right there) and also finances their Vampire game in development.

Why Eve is so important is that it is a sandbox. A nice interview what this means to your player base is found here, and it will push away some of you who might just have thought trying the game:

You will hear that CCP doesn't do anything against scammers or even Ponzi schemes within the game. So beware, space is a dangerous place as its inhabited by the most dangerous creature known to man: himself!

So back to topic: Sandboxes are important as they seem to be a solution to the content dilemma MMO's have. Developers never catch up with the speed of players consuming content. So making a sandbox is an obvious choice.

The funny thing is that MMOs then come around full circle as they started out being sandboxes: Even Ultima Online was one, and one of the best.

The problem is that sandboxes are not understood by many developers. The easiest thing you need to learn is the hardest: let it go. Do not control. Something the designers of todays quicktime event games have a hard time to adapt to. Or managers. Even worse.

PS4: Managing Expections

The new Playstation has been announced and featuring a 8 Core CPU and PC like graphics card many people think why they should buy a PS4 when they got a high end PC already.

Here is the thing: the games on a PS4 will look better than on your PC, even if your specs are better on paper. Why?

Because on the PS4 you can fully utilize the graphic cards power without worrying about backwards compatibility or performance for small machines. You can go all in. On the PC this is not possible.

Want proof? Ask yourself why most XBox360 games look better than many of today's PC games although the XBox is now 6 years old. The reason becomes obvious.

Another thing you should not forget is that the hardware of the PS4 won't change much in the next few years so devlopers can fully commit to its features in the their pipeline, something which is not possible on the PC. Besides the development cycle of 2 years fits much better to a stable platform than on a moving one like the PC.

In other words the still-stand of PS4 hardware specs for the next 5+ years becomes an advantage, not a disadvantage.

Here is the funny quote on the link above: "The games looked amazing, but we’re skeptical that everything was gameplay. A lot of the videos seemed like target videos, examples of what the developers have in mind, rather than actual working games"

It was gameplay, real time rendering. 

Wrong prejudice preconceptions?

India is a huge country with over 1.2 billion people. So we should think its huge for games, smartphones or computers. But it isn't. Mechanics we learn to use to market products no longer work in that country. We wrongly assume that our market mechanics work in countries like India, or Russia, or Brasil. Why is this?

To understand those markets and people you have to understand how they developed.

We have grown up with home computers, then switched to PC, then hooked the PC up to the internet. Then we got smartphones and went online with them too. This is our pattern and this can be used to target us for marketing or to look for similarities when launching products.

In markets like China or India people never had home computers. Or PC's. When the internet came they had to go to internet cafes to go online. This means that they encountered gaming as online only, as those games were default installed and people usually went to those places in groups, i.e. in social groups to play together. That is one reason why online games are so huge in Asia: they never experienced the grand history of single player games.

What else is different? Well if you do not have a computer at home how do you manage the daily tasks where we usually access the internet? Mobile. In India and China the primary access to the internet including search engines are mobile phones. At one time the number of searches on mobile in China was larger than searches on Google - worldwide.

In the days of the smartphone this doesn't sound that strange, but you have to realize that even before the iPhone revolutionized the phone market that the Asians went online with their phones. They had their own standards, search engines and even the UMTS network was implemented sooner than here. I remember a time where I had to rent an UMTS phone for Korea as their phones were already pure digital.

Let us return to India. The reason why I use that example is that we operate in free to play business and usually you target people by using Google Adsense or Facebook ads (Facebook has only a 5% penetration - still 62m people though). Now in India when no one is sitting in front of his computer - how do you get them to actually notice your product?

A good friend of mine told me how to target India, and this actually ruined my plans to launch games in India "easily" without leaving my office:

Billboards it is. Can you imagine to fill India with its vast space and huge cities with enough billboards to get noticed? That's tough - close to impossible. So how about mobile? Apple has some problem in India selling their iPhone but so does Samsung.

India still has very strong local providers who tune their services and phones to the populations specific attributes mostly using phone types we no longer use so it will be hard to break through them. To target people through those custom services is even harder. So time will tell.

So that are a couple of reasons why a country with 1.2 billion people isn't a huge gaming market yet. And that also means that rather sooner or later India will explode and be a huge market for all of us. Better be prepared. Otherwise you will miss markets like you did miss Brazil. Brazil you ask? Well ... research yourself, its huge already for online games - it already exploded.

The challenge of going digital

I remember the time when publishers all were looking forward going digital with distribution. "It's here" they said and most of them were too early.

Now as digital is here there is a resistance going digital as they finally realize what it means: it means your product is visible worldwide - all at once - and if its quality is not good enough everyone is going to know about it.

In the old economy retail played a major role. It allows you to control sales by controlling shelf space. If you were good at doing this you could sell a minimum viable number of copies of your games - even if they are under average quality. There is always the 1% impulse buyers.

Now that is gone if you go digital. Visibility is no longer under your retail sales control. Someone else tells his audience whether your product is cool or not. No wonder the big guns try to establish their own digital distribution portals like Origin or U-Play and clone Steam - to control the "digital shelf".

Take a look at Steam: estimated revenues are 1.5b US$ in 2012 excluding micro transactions.

This means Steam is huge. In fact their revenues are larger than most publishers. And this does NOT include item sales! Check out the footprint: Steam is as important as retail. So yes digital is here and publishers are cautious what it really means.

It means it will be harder to get attention as suddenly all products available - worldwide - are fighting for attention. Before only your local markets did, and many smaller companies didn't even enter your home turf. Now everyone can. A good preview how hard it will be to get visibility is the App Store.

"Wait a second - what about consoles?" you might say. Recent rumors and leaks suggests that the next generation console will offer all games digitally and on disc with both offering instant play, with the disc merely replacing the necessary download. This means digital will be 100% there for all games - circumventing retail. And we know that digital trumps retail for many users as you can buy when and whatever you want independent on distance, time and location.

Time runs fast

I can't believe it is only three years ago that Apple announced the iPad. 66 million sold in 2012 alone, the 100th million unit sold in October 2012. The iPad is responsible for the change in computing and even gaming.

It single handily destroyed the Netbook market.

It made the Notebook market suffer.

It changed the gaming market.

 Even my boss carries around an iPad 4 now - 24h a day.

Studies show that iPad gaming happens mostly on the couch and in bed. That iPad players are more core than we might think. That iPad gamer has more disposable income. That console gaming time suffers as soon as there is an iPad in the house hold.

And the best as last: the iPad is the only wife compatible gaming device so far.

And it just has started 3 years ago. How will the tablet market look like in 3 more years? The power of the console in your hands on 8 hours battery on a resolution larger than most monitors in your household.

Update, you should follow Asymco for recent data: https://twitter.com/asymco

I didn't know the iPad outsells the iPhone by performance relative from the start. Amazing.

Video Games and Age

I owned nearly every console there has been including exotic ones like the MB Vectrex. I noticed that with age comes an inability to play certain games.

It started with first person shooters. I was trained with the mouse on PC using AWDS keys for movement. Using a controller was very alien to me and since Halo I am not used to it nor very skilled. So I stopped playing shooters. A pitty as there are many good ones including Halo, Gears of War etc.

So it happened that a game was released in 2011 my game industry buddies still talk about today. Rarely does this happen. Usually we go on and talk about the latest shiniest new releases. But this game tends to stick around for many - although some of my friends hate it, can't even understand what the fuzz is about.

Of course I talk about Dark Souls.

A game I would love to play but can't. I tried on my PS3 and failed due to controller incompatibility with my hands and brain. Then I had hope that the PC version helps as it supported mouse and keyboard. No, it doesn't help either.

So there it is - the game I would love to play and experience the fascination my friends have - but I can't as my hands simply don't work with the controllers.

So the question I pull out of this is: are controllers like the XBox 360 one coming of age? Is the future generation which is not trained to D-pad, analog sticks and omg 10 buttons dying? Are we forced to play games with touch even if they don't work with touch? Is history repeating itself and genres are not as popular anymore as before simply because they don't work on new formats? (happened to RTS as they don't work on consoles)

The "Bottomless Bag" problem

The bottomless bag is an item from World of Warcraft and refers to a classic D&D item called "Bag of Holding" which could store items larger than its own size. Even Eve Online has containers which store more than their own size.


When designing online games there are certain limitations you have to be aware of like data base size. Databases tend to grow over time when operating an online game. This growth is not bad unless you hit a certain limit where maintenance of that database takes simply too long and can shut down a game for a day.

So why do databases grow? Because designers are lazy and too generous.

Let me give you an example: the in game mail in Settlers Online.

In Settlers you can send mails to other players. you can also attach items to mails and send stuff around. You get your rewards from certain quests via mail with the items attached. You get your trades via mail and you get some event items or gifts via mail.

Over time you stack up considerable amounts of mails in your inbox. Multiply this by thousands of players and your mail database can explode to immense proportions. This is made worse as "deleted" mails aren't usually deleted but only flagged as being deleted (there are reasons for this).

The reason for the exploding database? Because the designer was to generous: he gave you unlimited mailbox space!

So here it is: limit the users mailbox space. But how?

Expiration Timers
This method was made popular by MMO RPG'S like World of Warcraft. You attach a timer to a read mail (note "read!") and the mail gets deleted after that expiration timer (usually days or weeks). This self cleans the mail box of read mails.
Problem: assume there is an item attached: do you delete that mail as well? That's a no go.
If your answer is no then I attach a crap item to all my mails so they never get deleted - exploiting your system.
So what now?

Mailbox hard limit
If you limit the mailbox to lets say 50 mails, what do you do with mails being sent after the mailbox is full? Delete? What about mails with important items attached like compensations or trade? Exception? Then you can exploit the system - again.
So no mailbox hard limit. What then?

Auto Accept & Expiration Timers
So lets say we use expiration timers and auto accept items attached to expired mails. Where do we put those items? Into the users inventory? What happens if that is full? Oh god, why can't the world be easier.

Aftermath
Of course there are solution which will fit your needs. But I just wanted to explain that this simple designers decision not to limit the mailbox can have dire consequences to your game operations.
And fixing this problem can cause a myriad of additional work for your programmers, designers or even support.

Take Away
Generally do not give anything out for free in an online game. Not even mailbox space. Or number of items you can collect. Or number of horse you can have. Or anything - only if the player invests time, skill or money - yes money.
Limit numbers is a key design decision to any mechanic which involves "gains" in an online game.
The positive side effect is of course that you can monetize those limits suddenly by loosening the limit for paying players. Why not pay for larger mailbox sizes? Or inventories (which many games do already) or even pay for having the ability to collect more treasure maps than anyone else.

p.s.: the easiest solution to the mail problem is not to limit the mailbox but to incentivize the user to delete mails himself - like Ultima Online did to clean up their database from trash items.

The World will end as we know it - in 2013

I mean the game industry world - the one we are used to. The one with PC games being niche, the one with consoles being the big revenue makers. Where there is only one MMO RPG dominating the world. Where games are usually all around the big IP's of the top publishers - on console.

The major trends which we have seen in 2012 surfacing which will be even stronger in 2013 are:

Crowd Funding
It is an additional source for money. And as most people know in the gaming industry - money is the #1 problem of all developers. So this is an alternative. Not the best, but it is in addition to what we already have. And it also is able to fund games which are under the threshold of publishers - this means single man games, small teams, games with budgets of less then 1 million.
Of course there are the big million budget funded games - but those will be the "AAA" of kick starter. The important thing is not the money or that users decide which games are being made - the important thing is that the industry will see a new source of creativity from that funding. This impulse is desperately needed as otherwise CoD 10 and Fifa 2014 and Halo 5 and xyz 10 are all the same again and again.

Digital Distribution
It took long enough. We had hoped it will happen back in 2000 but the internet bubble bursting destroyed our master plan. Finally digital distribution has a break through and I expect this to quickly push into the console space as well.
There are more games being sold on digital platforms than on retail. Add it up. You will come to the same conclusion. Note I said "most" as in numbers, not in revenue. That will follow. Quickly.
What does this mean? It means retail becomes secondary, not the major platform anymore. The time as we went to stores to get games are over. Amazon does the rest of the death push of retail - but games will be a niche shelf space pretty soon. - if consoles push digital.

'Mobile' as major game space
I put mobile in quotes as studies shows that the main space people play mobile games is the couch or bed - so its not really "mobile". Still Smartphones and iPads will push the games market to bigger segments as even the console market. Even now the mobile market is the only one where western game makers have even access to all Asian markets. Note that consoles don't exist there and most western online games (the only one popular on PC) do not have a single chance of being published there. But hey, now even Asian's play single player games - but on mobile.
Why is Asia so important for mobile? Because it doubles, nearly triples the revenue potential of games on the devices with no major investment. This is huge. The Asian games market is so big that we (in the west) have not even a glimpse of its power.
So will mobile destroy consoles? I think it will push aside handheld gaming as we know it but AAA console games will stay - at least for the next generation. But as more and more developers find it easier to publish on mobile the creativity and cool games might move away from consoles to tablets.

Free to Play
F2p seems saturated 'they' say. I hear that often but always shake my head. F2p has just started and shows some saturation - but only in spaces where big companies are located and all their copy cats - as those copy cats don't know how to enter the f2p market but to copy the lead publishers - and of course fail ;)

Believe me: there are many game genres and types still to be published successfully as f2p as big as League of Legends or even World of Tanks. There is still plenty of space. Want proof? Which publisher would have accepted a Counterstrike type game with World War II tanks and persistent development? NO ONE!

Of course now they say "yes of course it works". But before? Nah, they wouldn't even have gotten an appointment.

So there is lots of space. The primary reason is being online: when you got the world internet population as potential customers it is easier to reach a critical mass to be profitable then in retail or any other publishing platform.

Online - Persistent
Games have shown that if they are online (even if only basic asynchronous) and persistent that the success doubles easily. The recent example of Clash of Clans and Hay Day shows that also on mobile it is a pre-requisite for huge success potential.
So the time of Fantasy MMO RPG's might be over, but hey, the time for online MMO's just has started!

Conclusion
If you want to be on the ride combine all four from above. Do a tablet/PC online persistent crowd funded free to play title.

Cheers, Teut

Metric (design) (marketing)

In a time where most of the entertainment happens in the internet there is a craft creeping up the companies which is tied into metrics. Companies love metrics. Why? I explain below.

First: if you read this you are being tracked by Google. It just so happens that blogger.com is owned by Google and they just look at you where you came from before you read this and where to go when you leave. They also like to peek around your previous visits what you did there and save from which country and provider you came, and which OS, resolution etc. you were using. Don't worry though, the info is anonymous, so they don't actually know "its you". Its all about statistical analysis.

This information gathering is used by business intelligence to judge their strategies. But here is the catch. Metrics tell you WHAT happened, but rarely WHY it happened.

Again: WHAT happened. Is this enough to base your strategy upon? Hardly. Without understanding the WHY you might be completely wrong. You might be obsessed with the difference of correlation and dependence. This gets even pro's confused when they see data, so don't worry if you mix those two up all the time.

Why do I write this? Because here is an excellent article about why marketing might be so mislead by metrics right now. Go ahead and read it, its excellent:

http://www.nytimes.com/2013/01/06/opinion/sunday/can-social-media-sell-soap.html

And as promised above here is my explanation why companies love metrics: because for the first time their suits understand what's happening - every single day-

Yes, you read that right. Often in the past marketing did some magic and was great, but management didn't really understand the fundamentals. The same was with game design in the past. It was considered sometimes black magic why certain game designers always seem to hit the good stuff. A mystic. Now with online games you clearly can see what element sucks and which rocks. Its all in the numbers.

But did you notice here what I did write above?

Let me quote myself from above: "their suits understand what's happening"

But not WHY. Think about it. This will change how companies operate in the next few years. Its already happening and the metric companies lead the pack. You have to go with them and hopefully teach them that people who know WHY are still important.

Cheers Teut

Numbers - from end of 2012

8 Million
The number of Angry Birds downloads on Christmas eve December 24th

30 Million
The number of Angry Birds downloads between December 22nd and 29th

17.4 Million
The number of new Smartphone/Tablet devices activated during Christmas, up from 6.8 Million last year

50 Million
The number of new smart devices activated between December 25th and January 1st

328 Million
The number of total apps downloaded on Christmas eve.

1 Million
The average daily revenue of Supercell with only 2 games in the iOS Appstore

453.000
The number of Minecraft sold aross all platforms on a single day on December 24th (thats more than lifetime sales of most PC #1 hits)

5 Million
The number of Minecraft sold lifetime on XBLA

5 Million
The number of Minecraft sold on Smartphones/Tablets

627 Million
Last quarter revenue of DeNA with an operational profit of 254 million

30 Million
The number of active users in all Bandai games combined - only in Japan on social networks. This was "only" 10 million in January 2012, that is 3x more in just under a year - in Japan only.

Yes, the industry is changing. If you still believe the next 5 years will be similar to the PS3/XBox360 Generation then it is time to wake up.

Sources: Flurry, Notch, Rovio, Business Insider.

My choices - person of the year

See below!!

All three have one thing in common: They changed the industry - worldwide. All three come from Scandinavia, in fact two from Finland. Ask yourself - WHY.

If you find the answer let me know. I wish to learn.

HAPPY NEW YEAR!!!

Cheers Teut

And my finalist - persons of the year

Is the team behind this company and games:

Supercell Company Info

My persons of the year #2

As they are serveral in this case I simply merge them into one:

Rovio Management

My game industry persson of the year #3

My personal Game Industry - MVP

Markus_Persson

What I would love to see from Apple in 2013

I am an Apple fanboy. In fact I have been since 1985 when I wrote my thesis for my school on a Fat Mac. I own several Apple devices, from iPhones, Macbook Air's and iMacs to iPads.

I am mostly happy with all the devices but of course there is room for improvement. Let me tell you what I would love to see from Apple in 2013:

iPad Mini with Retina with cheaper 3G Versions
I love the form factor of the Mini but I also understand that they had to release it non retina first to give the larger iPad a distance in improvement. Now I bet they release a Mini with Retina this year, but I wonder what they will give the lager iPad in return? Time for a 256GB version for Audio freaks?
I also would love to have 3G with a smaller price tag. Yes, you can go WiFi or tethering with your iPhone, but just turning on your iPad and immediately surf the net is wonderful.

More Regular iMac Updates
The iMac is a key device for Apple's desktop customer and in fact is the best windows 7 machine I ever owned. Yes, I do run Windows 7 on it for games due to my job. I even upgraded the graphics card in mine although Apple doesn't officially support it.

So I did order the new 27" iMac but I wish they would release a new one year by year so I can keep up with most recent PC technology.

Bring back dedicated GPU's for Air's
I love my Air as I have the last one with a dedicated GPU. It runs games still better than the most recent model from Apple. Either the next mobile i5 has a far better GPU or they should add an optional GPU to the model so I can run games decently :)
Otherwise the Air is perfect as it is.

Stretched iPhone 4S with 5's CPU
Yes this one sounds odd. But imagine: you take an iPhone 4S, put in the advanced CPU/GPU of the iPhbone 5 but stretch the 4S display diagonally without changing the resolution. This means larger screen for touch but the App's still work as the resolution didn't change.

Sounds odd? Well, maybe adding a phone with earphones only to the iPad Mini would do the same trick.

OS 7
I wish the next OS for the Phones/Pad's would get a revamped UI. Some things are still odd to use like switching off Bluetooth or WLAN all the time, or the inconsistency in some user interfaces (pull down to refresh isn't working everywhere).
I get the feeling that the programmers don't have the time to lean back, relax and think about what they are doing due to the year by year release pressure.

Advanced Camera
The camera on the iPhone 5 is very good. In fact the iPhones pushed the camera tech for smartphones far ahead than any other manufacturer.
But I think its time to rethink how those cameras work as the thickness (thinness?) of the phone doesn't allow better lens or sensor technology. Re-position the camera, or make it ejectable or use a 90° inverted light reflector might be helpful to use larger lenses and thus light conditions for the camera sensor.

Trends coming from 2012

2012 has been a great year for the gaming industry despite being a transition year. Transition year means that the old consoles don't sell as well as they used to and overall revenue from game sales in this time period declines. Also huge investments are being taken into the next generation of console and this is so expensive that many publishers go conservative with their current releases - usually ending up in sequels.

But usually during that time creativity runs rampant outside the large publishers and many new trends are born in that time!

So let's see what has been game changers in 2012:

Crowd Funding: smaller developers find money in the end consumer instead investors. This is cool as that money is "eaiser" to get than from publishers. This can be a good thing for experienced developers and a bad thing on not so experienced ones, as publishers usually share a lot of experience in professional production.
Nevertheless some projects on Kickstarter would never have seen the light if the players wouldn't have pitched in pre-release!

"Mobile" consoles: Smartphones and specifically the iPad have emerged as strong platforms for a multitude of games. Be it indie games or full fledged online MMO's; if you have a hit on the smart devices you can make a lot of money only compared to full fledged online games usually only found on PC's.
It seems that smartphone & tablet gaming is a disruptive force and will take market share from portable consoles and other gaming devices, eventually even consoles. Research has shown that households with tablets spend far less time on their dedicated gaming consoles than before.
The important thing here: the new devices allow smaller developers create and publish games worldwide without any outside help. The publisher model seems to be outdated for a lot of products but AAA projects. We will see tremendous new game formats coming from those devices!

Sandbox: MMO's came from sandbox (see Ultima Online or Eve Online) and seem to go full circle back to be sandboxes. Why the sudden popularity? Because sandboxes seem to solve one problem: the content race. Online game developers can't create content fast enough to satisfy their customers so they look for alternate ways.
Sandboxes are one way doing it, but only using sandboxes might alienate some players who at least need some guidance through the world. Not everyone has the urge to create his own fortune, some players want a red line guiding them.
For recent sandbox development check out Archage or Black Desert Online videos on youtube. Everquest III is also rumored to be sandbox only as well as Theralon a "true sandbox MMO", from the developers of Runes of Magic. And lets not forget Minecraft, the game of the year Dishonored or GTA V which is being released 2013.
The ultimate sandbox seems to be in development at Blizzard, which project Titan is rumored to be a sandbox where players can even play smithies or bankers in cities.

Perma Death: DayZ started it all; the player can die and actually lose everything. For older human beings who grew up with classic MMO's like Ultima Online you might remember that this is where online games came from.
Since World of Warcraft care-bear is modern, as you can't lose anything. The only game which kept Perma Death in the game is Eve Online. You can even lose your most precious skill level when you aren't careful with your clone.
So why is perma death suddenly modern again? The new XCOM, DayZ and even ZombieU offer game modes where the player really is afraid when he dies as there is game progress to lose.

And exactly this is what the latest wave of games bring back from memories: if you ever played a game where are left with shaking hands when you died - then you will miss that feeling forever. Games creating excitement, Adrenaline - its time that this kind of game play makes it back into the industry and I personally welcome this!

Meanwhile you can read the Top 50 defining games industry quotes.

Update: Read this too http://direcritic.com/2012/12/24/best-emergent-trends-and-other-things-of-2012/

CCP Dust 514 and Eve Online

(warning, contains some fanboy talk from Teut)

One of my favourite bloggers of Eve Online Jester Trek wrote an article about Dust 514 and CCP. He is right of course but still writes an "if CCP finds an audience for Dust 514". He still has hope.

Let me explain what Dust 514 is: it is a f2p Sci Fi first person shooter on PS3 connected to the Eve Online Universe.

Let me decloak (eve insider!) that sentence:

f2p: Free to play, the first of CCP. They never did a successful f2p business strategy.

SciFi: Niche, few female players, i.e. less reach. But for f2p you need to maximize reach to get revenue. Risky genre and setting for f2p.

FPS: CCP never did a FPS. Many people think developing an FPS is easy, but if it was there would be more successful ones besides Halo, CoD and Bf. Oh did I mention this FPS runs on console?

PS3: Yes, Playstation only. This means more restrictions in terms of technology. Oh did I mention this is the first console game of CCP? Did I mention that this is also the first f2p title on PS3? And Sony's payment systems really suck, i.e. less revenue as f2p live from a variety of payment systems?

Connected: This is the interesting thing. No one ever did something like this. If this works great, if not major fail as it is the ONLY innovation Dust has. But: it never has been done before = risk.

So there are a lot of risks there and I see no mitigation from the side of CCP. Knowing the history of CCP they often fly blind until they get a community backlash and then fix it. If they fly this tactic then Dust 514 will fail really fast - and might even hurt Eve Online, their only cash cow which currently pays for all of this.

And what do Eve Online players get in return while CCP spends all money on Dust 514? Shiny new graphics and some new ships. Thats all.

Wake up Eve Online players, CCP fools you currently with shiny graphics and no new game play.

Guest article - I coudn't have said it better

http://kotaku.com/5970519/weapons-of-mass-disruption-2-why-is-almost-every-video-game-suddenly-free

Read. Discuss.

Cheers Teut

About Numbers, missreads, marketing

In the times of online games you will encounter various numbers from press releases, shareholder or financial reports or interviews. The problem with these numbers is that teams can be easily irritated by them as per se it is very hard to compare them.

Lets use the most famous example: Users. How many users does an online game has? Lets check one of those misleading news:

http://www.gamesindustry.biz/articles/2012-11-22-warface-has-5m-russian-users

Only by reading the small print you will notice they mean registrations, not users. This number is useless as it means either their marketing did a good job or the game is out for a long time and collected millions of registrations. This number does not tell us how many users are actually playing, i.e. how good the game really is.

Takeaway: be careful with "Users". Most press releases mean registrations, rarely you get active users.

Active users is a problem in itself as the definition isn't standardized either. And usually it doesn't show whether you mean daily or monthly. Monthly of course is higher as it simply states how many users have been playing in the past 30 days and therefore is being used by marketing quite often.

ARPPU usually means average revenue of paying users. You take your revenue of a specified time and divide it by the paying users during that time frame. See, I mention time frame. Again, any ARPPU is misleading as it doesn't give you the time frame measured. As ARPPU tends to go up with the lifetime of users or the game you must have a reference time. Usually you should ask for monthly ARPPU.
As by definition ARPPU should give you the number of spending's on average of your paying users per months.
Usually when you see ARPPU numbers they try to take the highest number they have, which might be life time value. Useless.

CCU or PCU is misleading too. CCU means concurrent users or how many users are online at any given time. As you can see "time" is a variable which the word CCU doesn't define. So what does it mean, average CCU or peak concurrent users? Oh wait, that's PCU. And what kind of skill is it when CCU is very high? That your software architecture can hold it and your hardware is scalable?
And if World of Tanks claim a PCU record of 400.000 "on one server" is this really the case considering the maximum number of players in one game can be only 16 30?
Of course the 400.000 users were logged in and can exchange data in the lobby, but "online" as PCU is a number which doesn't tell you anything, does it?

The one thing 400,000 PCU tells you is the scale of operations and the number of active users. Usually 25% of your active users are online during peak times, so you can judge from 400.000 PCU that they have 2.5 million active users minimum in Russia (note the 400.000 was Russia only).

It also means that Russia is their key territory as other areas does not seem to have these high PCU's.

Want a good, real CCU? Check this out:

It shows the average CCU load on Eve Online since 2006. And in that game all are online in one world (but not on one hardware of course). I just logged in to find 52.000 53000 pilots online = PCU (16th of December 2012 as Sunday evenings usually are busiest).

Conversion rate: usually a percentage of your active users who pay. On Facebook 1-3% is considered normal, on all other f2p games 5-15% is considered the norm. But % of what? Active users? If you read all the way down here you already know that there is enough room for manipulation on that number alone.

The easiest way to manipulate that number is to take lifetime payers vs. current actives, which raises the conversion rate. Or you only take your active users but delete the "tourists", i.e. the users who register, login and leave as they don't like what they are seeing. Just this makes the conversion look really good in most games.

This small excursion into the world of metrics just should give you a key learning: do not believe the hype, think about what you read. Compare. Ask.

Merry Christmas if we don't post beforehand!

Transition Years

If you read my blogs or listen to my talks you know that I held a talk 2001 where I described the 5 year cycle of the industry (PDF link, note: this cycle is longer)

Generally whenever the old console is aging and the new one isn't here yet several things happen:

1. Publishers close or fire people
2. Publishers take less risk and go conservative (sequels, less 3rd party development)
3. Developers close down as they can't sell their pitches to publishers
4. Magazines/Media closes as they are dependent on marketing spending

Some explanation here: most console games are sold to owners who own the console for the 1st year. In other words console sales influence the next 12 months game sales volume. On the other hand: less console sales mean less software sales for that reason. Check current console sales history.

So this causes a dire news coverage and you might take the impression away that we are in deep trouble. In fact we are not - we are in the best state we will be in the next 5 years.

The reason is simple: during that time called 'transitions years' the games industry is most creative and usually comes up with some new toys to play with. In the past transision years we had things like 3d hardware, CD rom, DvD, the internet & team based games and MMO's to drive new categories.

This transition we got smartphone/tablet gaming, or going digital generally which allows even small developers to publish worldwide: basically this fixes the problem #3 above for the next transition years, If the developers are adapting.

Transition years usually cause trouble for publishers or developers who do not adapt or do not want to adapt. It happens all the time as some of those companies start to be comfortable what they do and so they lose the lead.

But listen, we are the gaming industry. We live from innovation, from change, from new technology, from new gadgets and devices or software concepts. If you start to stand still and feel comfortable or want to be, then you are in the wrong industry.

Change is good. And 2013 will be the biggest change for our industry we ever experienced. Exactly that is the reason why I love this industry.