October 14, 2022

s13e08: Business models that make you cry; Long-range microwave networks; Home servers; Twitter, But Angrier And In VR

0.0 Context Setting

It's Friday, October 14, 2022 in Portland Oregon and it continues to be unseasonably warm.

We've got... an episode for you tonight! Some more thinking out loud about the videogame industry and its business models (all models are useful, they are only models, probably most of them these days will make you cry), a couple of bits and pieces and honestly a weird bit about VR. Let's go!

1.0 Some Things That Caught My Attention

Touch The Place On The Videogames Industry Business Model Where It Made You Cry

Here is an outside perspective of how the high-level business parts of the videogame industry works now.

Wait, no, let's start with how it used to work.

How it used to work is this:

You (and maybe someone else, if you felt like it) would be in a a place with a computer (at various times, the university computer lab, your bedroom, or... well, that's probably it) and you would write a game.

You would tell other people about it.

You would make a copy of it, by hand.

Then you would sell it, in, I don't know, a ziplock bag and stick it in the post.

After a while, other people might figure out that they could make some money by helping you out with distribution and marketing and all that tedious business of copying disks, so if you were really into it, you'd do a deal with them.

Those people became publishers who worked with the people who were making the games, the developers. Occasionally developers of different kinds (or, perhaps worse, all of the same kind) might band together and then they'd make something called a studio.

A more modern way of describing a games studio might be something like this work of goddamn genius from JoshMLabelle:

We've assembled 100 people with ADHD and 5 people with no soft skills to manage them, and given them a simple goal: make an impossible amount of money. We call it the games industry, and we think it's going to work great (@JoshMLabelle)

I mean. Ouch.

Okay, fine. That works for a while, and then this thing called "casual games" comes along and you get this outfit called PopCap and they're just off to the side and who knows what the fuck Nintendo just did with that Wii and that one game, the tennis game, that everyone played.

People are buying these casual games, though.

And then "social" games come along and there's this Zynga and they appear to be raking it in and they're not making game games, but sure, people are playing them.

Social games kind of threw it all away and upended the business model. The business model was: you want a game, you pay for a game and then you own the game and you're done. End of.

Now the business model was: hey, this crack is free and we're totally not trying to make it addictive because, like, it's fun, right? And it's totally not morally weird that we've got data that shows there's a tiny number of people spending a bunch of money (we'll get to that) and that even better, we'll call them whales -- not because we're frustrated marine biologists or fans of a certain Star Trek film -- but because we know about whales from gambling, a highly regulated industry that in some parts of the world, like the U.S., you're not even allowed to do it online.

So the deal with these social games was that they were free, so you could instantly get a shit-ton of players, if your game was good (sorry, addictive) enough and it also had an r0 of "probably not as worrying as Covid, but these days does it even feel like it matters that much?"

They were free because at this point it was more or less possible to sell things online that a) weren't physical and as a result, or a corollary, b) did not cost that much. Like, starting at I don't know, a buck-ninety-nine. This was partly because Steve Jobs persuaded everyone (but mostly the record labels, who served as a cautionary tale for the entire rest of the media industries) to pay a buck ninety nine or whatever for a single track and showed that it would all even out in the end with the credit card processing companies and fees provided you batched everything up. So! Thus microtransactions were born.

And then Steve came back with one more thing, as he always did, which was the iPhone, and then suddenly mobile games were a thing. Mobile games were -- are -- interesting because they a) completely shot to shit Facebook's social game passive income because suddenly people wanted to play games on their phones, because they had their phones with them, and Facebook for a while was super weird on mobile phones. And then Facebook decided phones were a super big deal before they had their midlife crisis and got super confused about what to do about legs.

I digress.

So mobile games came out and wow did things go a bit wild. They have not stopped being a bit wild. Mobile games also figured out that a pretty good way to make a lot of money is to be a freemium game, so then the game, as it were, was to figure out how to have the biggest metaphorical funnel, i.e. the most players, which you would then convert through some sort of transmutational, I don't know, squeezing process, into as many whales as possible, or as many people spending a buck-ninety-nine at a time.

Meanwhile, to nobody's surprise (I think?) what started as selling horse armor turned into selling hats turned into a gazillion-dollar industry in "selling extra shit". In fact it turned out that "selling extra shit" for a game that's free was a pretty good way of making money.

If you were big enough.

So what to do, now, if you are just two people or just one person who wants to make a game and would like it to be big in some way? You broadly have one problem and on objective:

Problem: Have enough money to finish the game and not, you know, die during the process

Objective: Enough people buy the game that you have a bunch of money to live (i.e. not die) and ideally at some sort of more than minimally viable level where you can thrive, which might also involve getting some breathing room so that if or when you want to make your next game, you make it under slightly less stressful situations than the first time around. I do not need to tell you of, say, the effects of poverty on embryos or children, on matter how resilient they may turn out to be. Resilience is a backup plan, not the plan.

You could solve the first problem, a bit, by doing a Kickstarter, which is doing an end-run around the publishers and getting some money from people who want to buy your game. This is probably good! It can also turn bad, like most things, where your backers might turn out to be entitled shits, and to prevent that you'd need to spend either time or money actively managing their community and kicking anyone out and making clear that shit is not on if or when they behave like an entitled shit, or are abusive, and so on.

If you didn't kickstarter it, then say you would do a deal with a publisher. You are a small indie though, and you are making a Quirky Indie Game, so maybe you find a publisher like Annapurna, who like cats or other pets, or like Devolver, who... well they've got their own thing going on.

Used to be, Annapurna or Devolver would then market and sell the game and I don't know, help you get certified or whatever so you could actually sell it on console platforms in exchange for money, that one day, you might get, after your earnout.

But then the money arrived and the business of videogames became a different game. The money arrived in the form of Xbox Games With Gold and Playstation Plus Games Whatever, and latterly, Apple Good Intentions Arcade And Now Kind Of What Are You For, Exactly?

Each of these subscription services are looking for exclusive content because they too want as many paying users as possible. So they might go find you, the developers of a game about being in the cover to a sci-fi book from the 70s, and say hey: here's a shit ton of money, get excited and then over the course of about ten or so years, six of which will be after launch, deliver something really quite brilliant. And then you do that. (This did not happen that way, the sci-fi book cover game was instead a platform exclusive. There was a game about being a cat that was an exclusive, though)

But no! Now what might happen is that you, the little indie studio, might find a nice publisher like Annapurna to sell your game that isn't about a cat to, and then instead of just publishing it as a game, Annapurna might take the ehhhhh kinda-okay-sized crossover hybrid vehicle of cash that's been backed up to their office by Some Videogame Subscription Service, and give you some of it as part of your development deal.

You might get a bit on the backend, after the subscription exclusivity has finished, but who knows? I mean, everyone will tell you that, but really, who can tell?

So. That is the games industry now:

a) fucked up because of how mobile stores work and advertising and how it's super hard to just "get people to pay for something" when everyone else is "giving their shit away for free", when all you want is some people to play your game and also get paid for it

b) are you supposed to partner to a publisher who's just going to be an intermediary to sell it on to Xbox Game Pass Go Don't Collect $200 or Sony PlayStation Plus Extra Premium Super or, weird also-rans Apple Arcade and... Netflix?

I mean for how long are people going to actually publish games for, in the sense that a bunch of people will be able to work on something and then sell it? Or are we totally into a completely different and smaller indie market now?

... but that's the thing -- how does the indie market even work when you've got storefronts like Steam, and... the other ones, and it's a crapshoot in terms of oversupply, luck and having to spend All Your Money Or So Much Of It On Advertising?

Oh wait, it's because, always, in a way, late-stage capitalism. Got it.

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Long-range microwave networks!

IEEE Spectrum has a story on the Trans-Canada Microwave System¹ that caught my attention because, well: networking, infrastructure, details about developing brand new technology for such, hard numbers like the actual number of telephone lines (a radio system of 46 lines in Bell Canada's intercity network in 1952).

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The Webserver That's In Your Home But We'll Figure Out How To Not Make It Creepy, Because It's Yours, Which Means It'll Cost More And Thus Fail In The Marketplace Because Have You Seen The Marketplace Lately

Matt Webb wrote about small, local, visible, physical webservers, sort of making the cloud visible. It made me think of the kind of people who buy NASes that are internet addressable, these things exist in consumer electronics form as products like Western Digital's My Cloud, that I remember being marketed as a sort of "Dropbox, but you control it!", which... is not something many people care about in that way. Webb correctly identifies, I think, all the numerous structural barriers preventing individual-hosted edge network services, not least of which is addressing, and not least least least of which is that until recently, and until the advent of more symmetric last mile delivery, service providers have always been able to offer asymmetric bandwidth tilted in favor of download rather than upload. I don't believe there's this problem (maybe?) with, say, 5G networks (where there's coverage!), but it all hits the same backhaul in the end. In any event, we'd inevitably pay more for the privilege of administering and hosting our own servers in our own physical spaces.

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Twitter, But Angrier And In VR

So I have a Meta Quest 2 now and it's pretty good, in that it's good-enough technically (my wife had a fun time and marveled), don't know if I would've paid the full retail price for it, though. But! There's... still not that much there, there?

I mean, it's one thing for me to do some government digital transformation procurement research in my Horizon Workroom:

It's another for me to have a meeting with people, I have not tried that, I should try that.

No, what I really discovered I wanted (this does not mean I need it, or that it's healthy) was some sort of Twitter client in VR, some sort of

TweetSaber, where I navigate the timeline by cutting tweets in half to music as the relentless firehose of hot takes approaches

I mean, "Twitter, but angrier and in VR" is totally wrong but also feels like it would be fun and at least you'd get some exercise, which as my doctor and therapist and honestly everyone tells me, is good for your mental health? I mean, sure, you can go outside for your walk for your mental health and the movement and sunlight probably helps and the air, but also you can just do one of the three by slicing tweets in half to music?

Things I would do:

• Sure there's your regular timeline you get for free, but in-app purchases for specific shithead timelines, like $1.99/mo to slice Elon's tweets in half to licensed music

Also, why stop there? Why not just set up internet celebrity VR swordfights (apart from swordfights being notoriously hard to do in VR), wholly intolerable and inadequate yet irritatingly monetarily successful youtubers are already not punching each other in exhibition boxing matches, what's not to like about them doing it in VR? It is kind of weird that Meta did not do some sort of "make internet people fight each other or play against each other in VR" influencer campaign instead of what appeared to be very obviously working with Jimmy Trump Enabler Fallon and have him play BeatSaber with celebs and have the audience laugh along, oh the lovable buffoon who ruffled the former President's hair for whom I have lost and continue to have withheld respect as an entertainer.

Anyway. Twitter, but angrier, in VR. It's already a public shouting match, may as well work your arms out at the same time.

Someone get on this. It's worth a laugh, at least.

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Phewwee, that was a day. And a week! It's Friday, so let's call it the weekend.

How have you been?

Best,

Dan