WE’RE CHASING DOLPHINS

A BROWSER MANIFESTO – PART 14

The industry has worn out old terms like, “hardcore gamer”, “casual gamer” and “whale”. None of them perfectly explains the nature of the emerging digital gamer. Let’s call them dolphins. Why?

Dolphins love to play. They’re curious and intelligent.

Dolphins are social, and happy to play with both friends and strangers.

Dolphins are competitive. They’re carnivores. They’ll kill rivals in fights for territory, just like gamers.

They’re early Internet adopters (they call it “echolocation”).

They prefer casual, short sessions before they come up for air.

As for whales, they are actually just really big dolphins. Or you could say that dolphins are whales that have migrated to Hawaii because it is more casual and convenient. So dolphins may be whales that became more “streamlined” when they decided to join the revolution and play on the web and with their mobile phone.

The dolphin market is going to be huge!

YOUR HEART IS FREE, HAVE THE COURAGE TO FOLLOW IT

A BROWSER MANIFESTO – PART 15

I’ve made the argument that game developers should build tools that allow them to support all platforms and screens from the same R&D thrust.  Among these platforms the open browser is the most critical because it is the one that is not controlled by a giant corporation with a profit motive.

It is always tempting to align with the titans because they are big, powerful, influential and know how to market themselves and their business propositions.  But historically, closed platforms don’t work any better for game developers than the Berlin Wall.  Prior to Nintendo there were many open media platforms including print, painting, photography, film, video, music.  While Philips invented the CD player they widely licensed their patents and charged a mere 6 cents per disc, and allowed complete freedom of operations and expression.  More recently, the World Wide Web was a gift to the public and we’ve seen again how a free, open, competitive platform can flourish.  But Nintendo ushered in a new generation of closed platforms with unappealing license terms for third-parties.  It has always been great for Nintendo, but there isn’t a single great game software company today that was built on the back of Nintendo.  In general, these licenses in the console industry drove up costs, crippled innovation and despite industry growth more than 90% of publishers that bore these costs were wiped out.

Rather than operating like the web or CD, Nintendo has been the reference point for many new closed platforms.  Digital licenses have gotten even worse because the licensors all reserve the right to constantly make unilateral changes, thereby creating a slippery slope for third-party game developers who are at the end of the whip.  Hot new digital platforms with high growth have been as alluring as the Pied Piper, promising developers liberation from publishers and retailers and a chance to be first-movers.  Thousands of developers followed because it seemed reasonable at the time.  Apple, for example seemed generous initially to be raking only 30% of the pot, because Western mobile carriers had been taking 50-75%.  But not enough science or even study of history went into the choice of 30% that has become a de facto standard.  The mobile carriers had failed, so that was not a good reference point.  DoCoMo succeeded by charging only 9%.  Other huge platform successes like the CD and the web were essentially free.  Where is the analysis or evidence that a 30% fee is viable for a third-party industry?  There isn’t any.  Instead we have many examples to the contrary.

Consider that for games, it will cost up to 30% of revenue for the cost of acquisition (also known as advertising, even after averaging this cost down to eCPA as a result of other free traffic sources).  Sales or VAT tax can be another 10% or more.  Server overhead to operate free client-server games can also be 10% or more.  If there is a 30% platform fee a game developer is now looking at variable costs eating up 80% or more of revenue, and they still have to cover product development and overhead costs.  From what I can tell from published industry stats, on many platforms these other costs are 50% or more of revenue so now we’re at 130% for a median performing app.  Given a bell curve distribution and 200,000 apps you’ll still have outliers like Angry Birds and Millionaire City but overall this is not a healthy economic picture for game developers.

Many other companies have simply copied the 30% rate from Apple, justifying it on the simple argument that Apple had set the standard.  Well, I guarantee you that Steve Jobs did not envision the cost structure and business model of today’s games and arrive at the 30% number based on a clear understanding of a win-win scenario that would create a healthy value system for game developers.  Steve Jobs may have been a genius but he never liked the game industry and he never understood it, nor did he care about the needs of game developers.  While we’re currently stuck with the number he made up, there are signs of increasing platform competition as Windows 8 will charge a reduced rate of 20% and Google+ launched at only a 5% fee.  But history has shown that as developers invest and help platform owners become strong, the rates go up.

Game developers need to wake up now and realize that they have too often been willing serfs in feudal kingdoms where they don’t own the soil that they till.  The open browser is the next big game platform.  But even if it wasn’t, it is the one, only and best place for a developer to plant their flag and invest in their future.  Because it is open and free!  Being strong in the browser will create even more synergy if you are also extending your reach with Facebook, Apple, Android and other platforms that you can branch to from the browser.  We can even tolerate their 30% tariffs if our technology leverages product investments to reach all screens and to provide more sources of free traffic.  But freedom for game developers must come first.  If we are free, we can consider a flanking move on a closed platform from a position of strength and we can negotiate with some bargaining power, perhaps even with a collective viewpoint.

There have been other freedom fights in game industry history and we’ve had our William Wallaces.  Activision’s founders were sued by their former bosses at Atari but their bid for independence survived.  Tengen challenged Nintendo but suffered a fatal loss.  I founded Electronic Arts to create a better business model for game developers.  The most important single thing I did at EA was to push my team to reverse-engineer the Sega Genesis so that EA could be liberated from the draconian license agreements that were offered in those days.  I founded 3DO as a bold attempt to help developers and improve the value chain, but 3DO was outflanked by Sony’s deeper pockets.  3DO reduced industry standard console license fees by 70% but Sony put them right back where they had been.  More than 900 companies signed 3DO licenses but they fled to Sony when Sony proved willing to take big losses to build their hardware installed base.  Sony executives did tell me later that they copied many business practices and licensing philosophies from 3DO, which made things better for developers.  With Steampowered.com, Valve pioneered digital distribution at a time when none of the PC game publishers would touch it.  Bigpoint and GameForge pioneered browser games when the mainstream didn’t care.  In every one of these cases, game developers took risks and ventured into unknown territory for the betterment of game developers and the public.  The courage of a few did help grow an industry that can now support a vastly larger number of global game developers.  Today, the open browser gives all game developers a chance to be courageous and help the industry reach for a new age that could be truly golden for game developers, not just for Apple, Facebook and Zynga.

The browser is worth fighting for.  We need to be free.  We are all William Wallaces.  Let’s follow our hearts.

THE REPUBLIC OF GAMING

A BROWSER MANIFESTO – PART 16

THE REPUBLIC OF GAMING

This blog post completes The Browser Manifesto with the notion that Indie game developers can collectively have the power of Zynga if we collaborate to create The Republic of Gaming. United, we are as strong as anyone.

We are entering the age of convenient computing. The browser will become the next big game platform. Core gamers, or whales, will migrate by the millions to this new model and drive a $100 billion market based on free to play games with virtual goods. Distribution principles will be disrupted and some big players will fall while many newcomers succeed on the basis of great new games that use the Discovery business model. There is potential greatness in every game developer that will now have a chance to flourish and stand on its own, if we work together.

We need only recognize the benefits of collaboration and trust each other. We trust the World Wide Web and need to master how we leverage it. The same can be said for Google search, Facebook friends, email lists, ad networks, offer networks, affiliate networks, development tools and innovative partnerships like FreeGameLeaders.Com.

Your heart is free. Have the courage to follow it.

THE DAU IS DOWN

We are in the middle of a tremendous growth phase in the history of the game business and advancement requires astute analysis and brutal honesty.

While an otherwise good overview of 2010, this recent article from Inside Network missed the bigger picture and elements of cause and effect, which led to invalid conclusions.
They try to explain a shift in market share away from the early 2010 Big 5 as the result of the “rise of the Indies” and their “superior game design”. In fact, the entire shift in share is explained byFacebook moving their focus to adding new, 2nd tier Credits partners and nourishing them with free installs.  Many of the companies that got these installs did indeed rise, but fell later when the free traffic ran out.  I’m not saying it was the Indies fault, it’s just a false conclusion to say the Indies are winning or that game design is the cause. The market declined for everyone, but free installs covered the problem for a period of time. Overall, the “other 175” games in the story’s sample have in fact declined in total DAU audience in the last 3 months, from a peak of 48M DAU back in November. It’s even worse if you dig deeper and look at the Top 1,000 games from the Top 200 publishers, which goes well beyond the article’s sample into true Indie territory.  Frankly, since conventional game design thinking does not apply well to Facebook, the results of the Top 200 game publishers have been both random and disappointing with a disturbingly high failure rate that should be scaring the crud out of everyone. Case in point:  Zynga’s biggest 4 rivals from early 2010, despite spending more money and launching more games that were also, presumably, “better designed”, and made with “more experience”, collectively declined from 26M DAU to 13M DAU. This despite the fact that these companies made several acquisitions. Among these “leaders” the only new game gaining any ground recently is Crowdstar’s It Girl which, again, happens to be getting more free Facebook installs than any game in Facebook history.

It is better if we are objective about what is going on, and honestly, about how challenging it is regardless of size. A healthy industry is one in which the ecosystem is fundamentally growing (outside of marketing and exceptional cases), R&D is easily amortized from revenue, margins are good, and marketing investments are positive ROI. Right now, all of these are major challenges. Do not underestimate any of them. Jus’ sayin’. We all have a ton of opportunity ahead but even a Titanic can find an iceberg if there is not enough humble and vigilant attention to detail.

8 Weird Holiday Gift Ideas For Your Music-Obsessed Giftee | As Heard On... - Yahoo! Music

 

It’s never too early to start thinking about holiday gift-giving, especially if you’re like me who always waits ‘til the last minute (I swear this year I’ll get a head start!). While tons of people will post lists of cool, gadgety, box set-y things to get for you fave music fan this year, we’ve gathered eight weird and wild gifts that will make your lucky giftee freak—in both good and bad ways. 'You gotta hear my sick dubstep MeowReMix.' DJ Cat Scratching Pad – Thank you internet. Shaped just like a turntable complete with clever stickers, the cardboard “DJ Felix” record will give your cat a few minutes of claw sharpening pleasure, while giving cat owners hours of “awws”, YouTube video-taking and Instagramming. Admit it; this is really more a gift for the owner than it is for the cat. And the description is a real urbandictionary.com workout: “Kitty is mad pumped to kick it behind the wheels of steel and throw down a dope set of old skool joints, yo! Designed in London, the Cat Scratching Pad enables your furry homeslice to spin some phat, chillout beatz with hella catitude.” Felix da Housecat must be sick of getting these sent to him. $35.00, Uncommongoods.com

Pop Superstars Bum-Rush Retail! Rihanna, Nicki, Bruno, Alicia, Ke$ha, Kid Rock, Zep, and One Direction All Fit to Be Wrapped | As Heard On... (NEW) - Yahoo! Music

 

From the flood of superstar releases hitting stores in late November and early December, you'd almost imagine there's still a viable industry devoted to the making and selling of audio recordings geared toward young people. Yes, Virginia, there is a music business! The two weeks leading up to Black Friday have, as always, been the busiest of the year for new albums. Among the stars who joined the competitive fray with releases just in the Nov. 13-20 time frame: One Direction, Phillip Phillips, Rihanna, Nicki Minaj, Kid Rock, Pitbull, Christina Aguilera, Susan Boyle, Kelly Clarkson, Keyshia Cole, Coldplay, AC/DC, Green Day, Soundgarden, Lana Del Rey, and, just for true old time's sake, Led Zeppelin. But the makeup of the new release bins won't sit unaltered in the weeks that follow Black Friday. Although things won't be quite as busy in early December, music fans can still look forward to post-Thanksgiving product from Alicia Keys, Ke$ha, Bruno Mars, T.I., The-Dream, Wiz Khalifa, Big Boi, and hot country newcomers Florida Georgia Line. Here's our breakdown of some of the season's freshest releases, along with some initial critical and sales reactions to those albums that are already out: ONE DIRECTION, Take Me Home The group's sophomore release just debuted with 540,000 copies, the third-best opening of 2012, trailing only Taylor Swift (who, coincidentally, is said to be dating Harry Styles… again) and Mumford & Sons.  They are, as Yahoo! Music charts columnist Paul Grein noted, "the first boy band in chart history to land two #1 albums in a calendar year." How is it? Rolling Stone's three-star review sees the One Direction glass as half-full: "Their second album rivals the best of Backstreet and 'N Sync when the material pumps…But when it doesn't (i.e., most of the ballads), a certain amount of douchiness creeps in." Entertainment Weekly's C-grade review thought the eight-month wait between releases could have been a bit longer: "Catchy new tracks 'Kiss You' and 'Heart Attack' would've fit right in on March's Up All Night. But the rush shows: Most of Take Me Home is filler with barely enough zip to keep the kids up past dinner." RIHANNA, Unapologetic The dirty sales secret is that Rihanna has always been able to move a lot more singles than album units. But that may change this time, with her seventh album (and fourth November album release in a row). After the first day of sales, Hits estimates that this one will debut with around 250,000 copies, far, far more than she's ever managed in an opening frame to date. So all the seemingly bad publicity generated by her seven-city 777 plane tour obviously had no dampening effect on sales, even if it does cause a few journalists to boycott the album in sympathy with their suffering compatriots on the jet from hell. How is it? Naturally, her defensive duet with Chris Brown has been as effective at drawing critical barbs as it has been as garnering massive amounts of publicity. Said the A.V. Club, "Rihanna's much-discussed duet with Brown, 'Nobody's Business,' forms the rotten core of Unapologetic, a fiery pop album that's unfortunately coated in the icky residue of unearned defiance that has marked Brown's recent output." The Los Angeles Times' two-star review said, "It's a little sickening, because for the first time since the incident, her addressing the complicated issue feels not like a defense of love but a marketing maneuver, a way of turning a negative into a positive." But the same review approvingly notes the album's move further into dubstep territory and contends that "musically, Rihanna has evolved into one of the more forward-thinking pop divas." BRUNO MARS, Unorthodox Jukebox (out Dec. 11) This late entry in the Christmas sweepstakes could be a real December surprise, blockbuster-wise. Mars' highly lauded host/musical guest stint on Saturday Night Live only sweetened the anticipation for a sophomore album that was heralded by the Police-evoking single "Locked Out of Heaven." With genre-spanning star producers like Mark Ronson and Jeff Bhasker on board, it's any fan's guess as to how Mars might be stretching his stylistic boundaries. PHILLIP PHILLIPS, The World From the Side of the Moon The doubly monikered American Idol winner may sell about 150,000 copies of his album during Black Friday week, per Hits' estimates. If so, that would put him behind the 197,000 that previous winner Scotty McCreery bowed with, but well ahead of a lot of other recent champions from the show. He co-wrote most of the songs, though the single "Home" is an exception. How is it? In a B-grade review, Hitfix cites as commercial advantages "his natural, warm growl and the mixed blessing of always sounding like somebody else. Namely, Phillips splits time on The World between Dave Matthews Band rockers and Mumford & Sons roots numbers." EW also cites both Mumford and Matthews—and also gives the album a middling B—but calls it "still the most relevant debut album the Idol machine has cranked out in years." KID ROCK, Rebel Soul If you can't beat 'em, very belatedly join 'em—and Kid Rock has finally signed up with iTunes after being a nearly lone dissenter. That won't hurt sales, which Hits estimates will be in the 160-180K range when first-week results are announced. Kid Rock self-produced this time after having Rick Rubin helm Born Free two years ago, and he also brought more of the missing rowdiness back into the proudly redneck mix, as titles like "Cocaine and Gin" may indicate. He hasn't abandoned his serioso side, though: "Let's Ride" is a war anthem ("Keep your heads up for roadside bombs"), and "3 Catt Boogie" finds the Mitt Romney supporter doing a vaguely libertarian protest song. How is it? A New York Daily News review says Rock seems "seems pale, cranky and small" and bemoans dropping the "looser country-rock direction" of the previous album for "mainline rock" this time. Rolling Stone gave a more enthusiastic three and a half stars to this "sprawling disc of storytelling, pop history and partying." ALICIA KEYS, Girl on Fire (out Nov. 27) Billboard got a preview of the album—as did thousands of fans, when she played excerpts in a Google + hangout two days before Thanksgiving—and said "the album ranges from balladry and bedroom talk to more upbeat, inspirational music, including the Nicki Minaj-featuring title track." Maxwell duets with her on "The Fire We Make," which also includes contributions from neo-bluesman Gary Clark Jr. Frank Ocean co-wrote a track, and other collaborators Emeli Sandé, Bruno Mars, and Babyface. Her last album bowed with a whopping 417,000 copies in 2009. Will as many fans be whipping out their Citi cards this time? KE$HA, Warrior (out Dec. 4) Her single may be called "Die Young," but Ke$ha has to be hoping that won't be what happens to her official sophomore album (or third release, if you count the hybrid Cannibal as an original). Mentor Dr. Luke is back as an executive producer, as are A-level co-producers like Max Martin, Shellback, and Benny Blanco. As for what departures are in stores, "Some will also be excited to know that I don't just do silly white-girl rap," she's said. Though it's not a rock record per se, Ke$ha is claiming T. Rex and Iggy Pop as influences—and though the former wasn't able to make her party, Pop does show up for a duet. She also has a new memoir out— My Crazy Beautiful Life—which, at her age, we can only guess will be the first of many. LED ZEPPELIN, Celebration Day It took five years, but these greats finally managed to put their one-time-only 2007 reunion show out on CD and DVD/Blu-Ray for home consumption. Industry site HitsDailyDouble.com estimates it will sell close to 100,000 when the first week of sales is up. Of course, many fans already saw the film when it premiered in theaters worldwide for a one-night-stand in October. How is it? EW went churlish with a C-grade review, saying "many of the band's crunchiest classics are pitched down to accommodate Robert Plant's aging pipes." Other notices have been more enthusiastic, like the San Francisco Chronicle's, which lauds "the late John Bonham's son Jason filling in on drums, firing on all cylinders, tapping into the vintage stomp and menace of the band's glory years with an unimpeachable set list. The passing of time has made the group sound leaner and more efficient, giving well-worn classics such as 'Black Dog' and 'Kashmir' new life." NICKI MINAJ, Pink Friday: Roman Reloaded—The Re-Up A reissue of Minaj's seven-month old sophomore album adds eight new tracks. And she's taking shots at Mariah Carey and referencing Idol aplenty: "I'll take it, sign on the dotted line/But I'm quick to the check a b---- if she outta line/Shout out Mike Darnell and Nigel/Why these bums so mad that the queen on Idol, huh?" She also reminds everyone that she made the presidential news circuit—"I did a freestyle and got a shout out from Obama"—on the way to weighing in with not-ready-for-the-White-House fare like "I Endorse These Strippers." How is it? The Los Angeles Times offered a three-star review that likes this "re-up" better than the original, writing, "Minaj is at her best when offering acid-soaked tongue lashings." Will Idol producers and contestants feel the same way? KELLY CLARKSON, Greatest Hits—Chapter One That mullet she had on the American Music Awards didn't kill her, it made her stronger. Clarkson put three new tracks on her best-of, two of which are singles—"Catch My Breath" for pop radio and "Don't Rush" for country. You may have seen the former on the AMAs and the latter on the CMAs, where she was joined by duet partner Vince Gill. The just-released collection is foreseen by industry site Hits as selling in the area of 45-50K its first week. GREEN DAY, Dos! (already out) and Tre! (out Dec. 11) The second album in the band's rapidly sequential trilogy just bowed with 69,000 copies, considerably less than the 139,000 that Uno! debuted with in October. Will the third time be the charm when Tre! hits stores just two weeks before Christmas? And will Billie Joe Armstrong, MIA and last reported headed to rehab, make it home, if not back to the album-promoting circuit, for the holidays? How is it? No reports yet on Tre! But Dos! seemed to get about twice as many good reviews as its predecessor. Wrote the L.A. Times, "The good news is that it's a far better record than 'Uno!' In fact, it's an excellent Green Day album — one of its best — a catchy, revealing work… If 'Uno!' seemed to be a closed system, with Green Day working to flex its '90s punk muscles, on No. 2 the group has gone open-source, allowing in a much wider range of sounds and styles." CHRISTINA AGUILERA, Lotus She's not on the upswing. Her last album debuted with 111,000, but this follow-up bowed with a lesser 73,000… and this is her first one since she joined The Voice, proving that mass exposure doesn't always boost sales. It wasn't as if nobody saw it coming, since the lead single from the album, "Your Body," peaked at No. 34. Still, with her show in full swing, it's hard to say for sure that this one couldn't blossom into a bestseller with a hotter single. How is it? In a very mixed review, the New York Daily News criticized her for not doing more vulnerable material in the wake of her divorce. "Even when Aguilera means to shed real blood, the sheer force of her vocals cauterizes the wounds before any red can flow. She's a bully of a singer, pummeling the notes into the ground as she rails in triumph." Yet the paper found her more upbeat material "improved" and said, "Lotus contains some of the catchiest, danciest, and funniest songs of the singer's career." T.I., Trouble Man: Heavy is the Head (out Dec. 18) This one will barely have time to make it beneath Christmas trees, but T.I. seems to have faith that word will not trickle slowly to his audience about his first post-prison album being out. Guests on the obviously Marvin Gaye-inspired album include Cee-Lo Green (on the Pharrell Williams-produced "Hello"), Lil Wayne, Pink, Akon, Andre 3000, and ASAP Rocky. That's quite a coming-home party. THE-DREAM, 1977 (out Dec. 18) Experiencing some déjà vu? The-Dream released 1977 as a free mix-tape in 2011 under his given name but decided to put it out officially a week before Christmas 2012. Reviews were good enough for the project at the time of its unofficial unveiling that fans aren't too upset about being asked to dole out cash for it now, even if that means a further push-back for his next album, already announced under the hard-to-remember title Love IV MMXII... which is probably due for a 2013 name change.

Forex: Euro Extends Losses Ahead of ECB Meeting - ForexNews.com

 

 

Risk-aversion has been the prevailing theme this week, with the Japanese Yen and the US Dollar continuing to outpace their respective counterparts while high beta currencies and risk-correlated assets, in particular the Euro and the S&P 500, have struggled to retain any footing in November. The causes for concern have been two-fold in nature: a worsening European sovereign debt crisis; and the notion that the US fiscal cliff is right around the corner. While these events have stoked demand for safety, in particular lower yielding currencies and precious metals, our focus today is on the European Central Bank, which has its monthly Rate Decision meeting today at 07:45 EST / 12:45 GMT, followed by President Mario Draghi’s press conference at 08:30 EST / 13:30 GMT. The ECB has yet to be active in Italian or Spanish bond markets following President Draghi’s promise to save the Euro via “whatever it takes,” but this isn’t a surprise given that neither country has sought an international bailout yet. With no new measures expected to be announced today and Spain continuing to sidestep the idea of a bailout – something that looks necessary to keep a lid on investors’ fears but will be nothing short of self-mutilation for the Rajoy-led government – the investment climate is looking fragile this morning. Nevertheless, if the market was in true panic mode, there would be a greater shift into the Yen and the US Dollar, with Gold and Silver selling off as well as investors hoards liquidity; this hasn’t happened. Finally, as noted in the technical section below, the S&P 500 has held fairly significant trendline support, and without a catalyst, a further breakdown may be staved off in the near-term. Taking a look at credit, weakness in periphery yields continues to weigh on the Euro. The Italian 2-year note yield has increased to 2.118% (+1.8-bps) while the Spanish 2-year note yield has increased to 3.102 % (+6.1-bps). Likewise, the Italian 10-year note yield has increased to 4.951% (+5.6-bps) while the Spanish 10-year note yield has decreased to 5.770% (+10.7-bps); higher yields imply lower prices. RELATIVE PERFORMANCE (versus USD): 10:30 GMT JPY: +0.23% AUD:+0.06% CAD:+0.02% CHF:-0.13% NZD:-0.17% GBP:-0.20% EUR: -0.22% Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): +0.04% (+0.54% past 5-days)