Systems of Curse and ZAM
The World of Warcraft ecosystem saw the final “big fansite” acquisition this week, with MMO-Champion bought by Curse Inc. Big meaning something that attracts millions of users each month. Curse have been using some of their $11 million of venture capital to buy up a variety of gaming fansites, including many popular WoW sites. But MMO-Champion is significant for 3 other reasons:
- Corporate deal, not the “founder buy-out” traditionally commonplace among gaming fansites. MMO-Champion was previously owned by Major League Gaming, already a multi-million dollar enterprise (by comparison, $46 million funding).
- Completes a duopoly (2 dominant businesses) in the core World of Warcraft “fansite” market – Curse and ZAM. While there are other large businesses and specialist niches on the fringe, none of those appear to be growing into the core WoW market.
- Exposes an intriguing driver of this market structure: Systems costs – the underlying technology and support costs. Intriguing because these were crucial in determining the market structure of far more traditional sectors of the economy, like groceries.
This article analyses the latest acquisitions and discusses the unseen importance of systems costs. Read more of this article »
Optimism
As I write, the United Kingdom is in the midst of a national election campaign. A month during which politicians vie to confuse the electorate with big numbers. Politics is suddenly ravaged by intangibility, because the national economy is unable to sustain the usual tangible proxies for a better life – “more schools and hospitals” – and because the tangible results of fixing that economy tend to be unattractive – “less schools and hospitals”. So the best political strategy is not explaining the consequence of choices in a language ordinary people can understand.
Do you like the sound of £100 million ($150 million)? Can I tempt you with £160 billion? Expressing these figures per person in the population can be useful. The first figure is one bar of luxury chocolate for everyone. Doesn’t sound so big now, does it? The second figure is like everyone having a £2,500 bank overdraft (loan). Strange that, because indirectly, we do.
Unfortunately, applying the economics of household groceries to major items of government expenditure introduces certainty. The idea that one can visit a store where luxury chocolate bars are sold for precisely £1.70. Yet many large elements of government expenditure are akin to ordering a chocolate bar years before it can be eaten, for a price that transpires to be somewhere between £1 and £5.
Larger businesses will be familiar with this concept. It’s called risk. Such businesses are often far more interested in what “it might cost” (£5) than what “it will cost” (£1.70), because what it might cost might lead the business to bankruptcy.
The national economy is chaotic in its complexity, but overall, things should average out. So long as all the assumptions are broadly reasonable: Ultimately some will earn/cost more, some less. Short-term in-balance can be solved by (basically) printing more money, and then down-grading future assumptions until everything is back in balance.
However, this breeds a form of arrogance. A sense that government doesn’t need to consider the possibilities. That we can deliver a radical new policy – that has never been done before – and, in spite of it never having been done before, we know precisely how much it is going to cost. Just like a bar of chocolate.
Unfortunately, assumptions tend towards optimism. On average, projected costs are less than actual costs. This isn’t just a problem for accountants. It means that decisions are taken which do not reflect reality. Potentially leading to a Disneyland scenario, where everything is affordable until after the decision is taken, when suddenly everything has become too expensive. It ultimately challenges the validity of decisions, and in doing so, the moral authority of those that take them.
This article uses the Edinburgh Tram project to demonstrate the inherent uncertainty of large government infrastructure projects. It discusses the role of optimism in planning, and the methods used to reconcile planned optimism with subsequent reality. The article describes how the involvement of the private sector in public projects has evolved over the last 20 years, and the highlights the different time-scales applied to private investment and public choices. It concludes that optimism is not only unavoidable, but necessary. Rather, the true problem lies in tendency of people to demand certainty from the public sector, while accepting uncertainty in the private sector. Read more of this article »
Railways for Prosperity
In the dying years of Margaret Thatcher’s premiership, the United Kingdom government launched a policy document called “Roads for Prosperity”. £23 billion ($35 billion) would fund a network of highway improvements. Schemes that eased capacity constraints on the strategic (primary routes) road network. It was a response to rising car use, and the belief that not providing sufficient highway capacity would damage the UK economy – national prosperity.
It didn’t happen. Neither the threat to prosperity, nor the policy:
- Environmentalists rallied against the few early projects (famously turning the Newbury Bypass and Twyford Down into civil battlegrounds) – road-building became politically negative, rather than positive.
- There was never really enough money in national budget to fund the policy – increasingly obvious as the UK economy dipped into the recession of the early 1990s.
- Even with the policy, roads would still be built slower that road traffic was growing – it was not possible to “build your way out” of the problem. It’s worse than it first seems, because new roads generate additional traffic growth, requiring more road capacity, generating more traffic…
The legacy was apparent in Tony Blair’s first Labour administration (or more accurately, John Prescott’s, the minister who led the transport and environmental agendas in the late 1990s): Much greater emphasis on sustainability, local projects, and use of forgotten modes, like buses and shoes.
Now, step forward 20 years to 2010.
The Secretary of State for railways and other transport, Lord Adonis, announces plans for a new high-speed rail line between London and Birmingham. At least £15 billion ($23 billion) for the first phase, rising to £30 billion with extensions further north. (Read those figures with caution – the costs of the previous West Coast Mainline upgrade project increased so much that nobody could remember how low the initial estimate was.) Inflation means that the cost of this latest rail project is only about half the (real terms) cost of Roads for Prosperity. But Roads for Prosperity proposed thousands of miles of highway, across many different locations, compared to a few hundred miles of railway track between a few large cities. And “Railways for Prosperity”, as I’ve corrupted the latest proposal, doesn’t have the pretence of strategy.
Politically it’s work of genius – the benefits flow to the political class (who tend to use trains), especially those living in increasingly marginal electoral territories in the West Midlands and North-West of England. Meanwhile, the Peoples’ Republic of Great Missenden (and soon likely every other other community near the route) is up in arms because the totalitarian regime they likely never voted for, has decided to build a railway – without the local station necessary for them to commute to London. I exaggerate, but only slightly.
Forget the “high-speed” aspect of the title. Operationally, the need is to increase capacity (see the box below). Make space for more trains on one of the busiest railway lines in Britain. More capacity creates more redundancy in the system, which makes it easier to recover from operational problems, and so makes trains more reliable. From bitter personal experience as a passenger, I suspect reliability is worth more than speed here. Of course, “better reliability” sounds a lot vaguer than “30 minutes faster”.
Read beyond the concrete, and the talk is all about “economic growth”, and “jobs”, and.
It’s at times like this that I want to pick up a shotgun and blow my brains out. 20 years later we’re back where we started. And nobody seems to have noticed.
This article uses historic examples to question the strength of the relationship between transport and the economy. It highlights the political biases towards railways, and their funding. The article explains why grand transport projects remain popular, when their overall impact on problems is often minimal. Rough analysis is presented that demonstrates the futility of building new railways – the 21st century reality, that we simply cannot afford to continue enlarging our transport networks in response to increased passenger demand. Finally, a stark comparison is made between communications and “transport” policy, which questions the validity of spending 15 times more on a new railway, than on a core element of “digital” inclusion. Along the way, the article clarifies a few popular misconceptions, from the influence of Unionism, to the impact of “integration”. Read more of this article »
Nation of Adoration
World of Warcraft’s seasonal holiday events temporarily reduce player interest in fishing. It’s always been the case, but the decline in fishing seems to be becoming more extreme over time:
The graph’s y-axis is the percentage decline in page views at El’s Extreme Anglin’ from the 7 days before each event, to the first 7 days of the event. Pageviews are a good proxy for overall angler interest. El generates hundreds of thousands of page views each week, so even small changes are significant. The x-axis orders events by date, from January 2008. The axis isn’t scaled correctly to show time, but holidays are fairly evenly distributed throughout the year. Events are shown by green dots, with a shortened date (month and year) and the name of the event.
The data is expressed as a percentage of the previous week, because while interest in fishing “waxes and wains” from year-to-year, changes week-to-week are normally minor.
All the events included last at least 7 days. Where one holiday runs concurrently with another event (for example, the “Lunar Festival” and “Love is in the Air” often clash), only the first event in the sequence is included. Interest in fishing also changes dramatically in the month new content is added, so events that clash with major fishing patches have been excluded (Noblegarden 2008 with patch 2.4, Hallow’s End 2008 with patch 3.0.2, and Noblegarden/Children’s Week 2009 with patch 3.1). Winter Veil is also excluded: The period leading to Christmas is particularly unusual – first students stop studying and have a lot of time to play, and then many players stop playing to spend time with family. This causes large changes in activity from week-to-week, which makes it hard to isolate Winter Veil in the data.
Only 12 separate sets of data can be compared. There is one out-lier – Midsummer 2008 – perhaps the early stages of Wrath of the Lich King testing may have caused a small traffic spike in the week before? The pattern shown on the graph is not certain. But I’m growing confident that events are increasingly impacting on fishing activity.
But why? Read more of this article »
Iterative Video Development
The internet allows products and services to be rapidly improved based on user feedback. So rapid, that iterative design should become the primary method of designing internet-based services. Not just as an Agile-like method of working, but as a method of specifying the product itself.
Partly it isn’t because creators haven’t adjusted their methods to match the new technology – we’re still wedded to a single start-to-finish process, with one outcome at the end. Partly it isn’t because feedback can be hard to gather and digest, and even hard to act upon.
An iterative method has become one of the defining characteristics of how I like to write, organise, and present text on the internet. At least, beyond this domain. But until now, I’ve struggled to apply it to internet-based video.
This article introduces internet-based iterative design, and uses YouTube’s “Hot Spot” analysis to show how we can start to apply an iterative approach to video and movie-making. Read more of this article »
Do You Fish in Real Life?
This article analyses the transfer of fishing activity between the physical and virtual worlds.
Do You Fish IRL? In Real Life. I dislike the phrase, because it implies that everything else is unreal. Yet many virtual environments trigger the same human emotions as the physical world. Very real indeed.
If you search US Google for the term “fishing guide“, the first result may surprise you. It doesn’t help to catch any of the 30,000 species of fish found on planet earth. And its author has bright pink hair.
This isn’t just a neat party trick. Nor an indication that I should write a real fishing guide. Nor a failing of Google’s search index: Google is directing such a generic search to a game-specific website because the search engine thinks that the majority of people searching for a “fishing guide” are looking for a World of Warcraft fishing guide. (The box below provides evidence.)
Perhaps, within the online sphere, virtual fishing is as important as conventional fishing? The caveat, “within the online sphere”, is crucial: Physical world anglers generally aren’t sat in front of a computer screen, while World of Warcraft anglers are. However, the internet is still widely used to find information about offline pursuits: The US Angler Survey found that 42% of those surveyed primarily learn about fishing from websites – more popular than print media. (The survey is presumably biased, because anglers that use the internet are more likely to complete an online survey – but still indicates the internet is a fairly important source of information for physical world anglers.) Of course far more people search for generic terms like “fishing” than anything WoW or guide-related. So game-related search does not dominate as much as it may first seem.
Searches for “fishing guide” are not the only way online anglin’ is merging with offline.
As the remainder of this article demonstrates, World of Warcraft anglers are up to 3 times more likely to fish in the physical world than the wider population: If you enjoy fishing “for real”, you are more likely to fish virtually than other players. This implies that the fishing activity transfers directly between the physical and virtual worlds. Read more of this article »
De-Analysing Blizzard’s Starcraft 2 Marketplace
Earlier in 2009, Blizzard announced a non-commercial World of Warcraft add-on policy, which caused much discussion. Today at BlizzCon, Rob Pardo (illustrated) introduced the Starcraft 2 Marketplace: A future (after the game’s launch) system that would allow independent development teams to create custom “premium maps” for the game, and make money from them. That’s precisely what World of Warcraft add-on developers cannot do. So what’s changed?
Why Create a Starcraft 2 Marketplace?
Pardo stated:
“If you create a really cool map, with all original content, that’s awesome, you can put it up onto the service [Battle.net], and actually make money on your map.”
Blizzard is prepared to share a “portion” of the revenue if you create your own Intellectual Property, and don’t simply re-use their property. Seems reasonable.
The SC2 Marketplace is intended to allow parts of the mod‘ community to evolve from amateurs to professionals. “Fan made” maps were acknowledged as an important way to keep Starcraft alive – over time, players shifted from Blizzard-made maps to fan-made maps. But maps (Pardo used Warcraft 3 as an example) still tend to use Blizzard’s game assets (such as art textures), because creating original content takes a lot of effort. And passion alone does not pay the bills. By allowing map authors to earn money from popular maps, those people would be able to fund the creation of their own, original game assets.
There’s a real sense that Blizzard lost the chance to nurture and (commercially) gain from innovations within “their game engine”. Rob Pardo again:
“The Tower Defense maps came out of the Warcraft 3 community. And now you see Tower Defense in the PlayStation store…”
Earlier in the day Stompalina tweeted about the similarity between Battle.net (Blizzard’s community platform) and Steam (Valve’s community platform). And she’s not wrong.
Both companies are unusual. They have both escaped from the traditional publisher-funded business model that underpins most major (non-casual/Flash) game development and distribution. Valve’s Steam originally gained popularity from games like Half Life, but has now become a method of distributing games written by others – everyone from small college/”garage” projects, to mainstream titles, like Total War.
Valve is already ahead of Blizzard in constructing a social-gaming platform, even though Blizzard was there first, and should understand the media better (from developing World of Warcraft). So perhaps opening up Starcraft as a semi-commercial platform for third parties is a new strategy in that race?
Why Not Create a Marketplace in Other Games?
Competition with the wider gaming industry does not explain why Blizzard are so unwilling to adopt a similar approach within their other games. Some of us (and I include myself) would like to do this within World of Warcraft. I have previously demonstrated that WoW has a huge pool of talent among its players, and that pool of talent is increasingly reluctant to work within WoW because it has become afraid to make money. Something which we now all seem agree is required to support major (time-consuming) projects.
It is possible to create original IP within WoW. Technically this would be more difficult within a MMOG, because players that don’t buy your content, still need to interact with those that do. But there are creative methods of working round those limitations.
One possibility is that Starcraft 2 is a new product, which is politically (within Blizzard’s decision-making process) and technically (programmed to be supported from the outset) far easier to impose a new strategy on. And we might eventually see a more relaxed approach in Azeroth.
My fear is that World of Warcraft is being treated differently because its brand is to valuable at this stage in its life-cycle.
Shrewd observers will note that Blizzard have started “doing the Star Wars thing” with the WoW brand: The revenue directly from the game gradually becomes less important than all the merchandise and franchise opportunities. Soft drinks and Trading Card Games were just the beginning…
The problem for “fan-based” projects is:
- Franchise and license opportunities are not available to “the little guy”. They’re not the large businesses Blizzard look for.
- If you sell a license it has to be worth something. So a “fan project” cannot co-exist with a franchised project that it (often inadvertently) conflicts with.
There have been several examples over the last year where conflict has arisen. Unfortunately, I’m not able to publicly discuss all of them. Suffice to say the legal threats are very real: Suddenly one finds one’s self liable for lost earnings of the franchisee and Blizzard. That’s almost certainly more money than you have – few people are prepared to risk bankruptcy.
On the Road to Damascus
If Blizzard have had a change of heart, will anyone trust them? Sadly the answer is yes. Not least because individuals tend to confuse the company with its products. And the corpses of all those fallen add-on developers decay fast.
A marketplace doesn’t fit Blizzard’s culture – somewhat secretive, protective, and controlling of its work. But Blizzard seem very similar to Apple. And Apple have managed to sustain a very successful iPhone store, full of applications created by independant developers. If both parties benefit, these uncomfortable partnerships can thrive.
Perhaps there is hope after all?
Postscript
The following day, in an interview with DirectTV, Rob Pardo was asked this question directly: Why Blizzard are endorsing commercial SC2 mods, while they have just outlawed commercial WoW mods? His reply was:
“We’re not making money from the people that are doing third party things for WoW. It’s not really allowed to go out and make stuff around WoW without licensing it from us. It’s really us just protecting our Intellectual Property.”
