Instant Action, Gamebryo Shut Down

A couple of high-profile companies serving the game industry announced last week they are ceasing operations. Emergent Technologies, which has offered the Gamebryo middleware for a number of years, has decided to liquidate its assets and shut down. Their middleware had been used by many companies, including EA and Activision.

Lou Castle's InstantAction browser-based technology (which allowed to play Secret of Monkey Island, among other things) is also shutting down. They're looking for buyers for their Torque engine. It's too bad, because the idea was pretty cool: You could start playing a game right away without a lengthy download, and you could embed a pretty cool game on a website or a blog.

It's hard to tell from the outside why such efforts fail. Sometimes the idea isn't compelling, or sometimes they just don't have a revenue model that works (or works fast enough to overcome the initial capital outlays). Sometimes it's the structure of the company, or management issues, or just financial overreach.

I'm hoping that some buyers step forward and grab these technologies, because I think middleware is a very important part of the industry going forward. Middleware makes it easier for developers to bring creative game concepts to market and reduces development costs. InstantAction had some very interesting ideas that could bring gameplay to a much wider audience, and offer smaller developers ways to reach an audience and make some good money.

Holiday Fables Told Anew By Nintendo

This will save Nintendo's holiday sales? Ho ho ho!

It's that magical time of the year when fairy tales are told and wishes are magically fulfilled. Which is really the spirit of Nintendo of America president Reggie Fils-Aime's remarks to investors. Money quote: "The holidays are more important to Nintendo than to other manufacturers," he said. "We have a distinct edge when it comes to gift-giving, and it's no doubt because of the familiarity and recognition of both our brand and key franchises." He added, "The Nintendo difference continues to attract new consumers. ... For us at Nintendo, it's full speed ahead."

Yes, he'd like us to recall the golden years of past Nintendo holiday sales... not the harsh reality of this year, when sales are off more than 40% for the Wii. It gets worse: Industry analyst Michael Pachter is predicting a 60% drop in Wii sales for October, and the rest of the holiday season doesn't look much cheerier. Ouch is too mild a word... is there a word for when you take a sword blow to the intestines, or somewhat lower?

Oh, but Nintendo has a solution for the holidays: "From a Nintendo perspective, we have two red bundles in the marketplace that we didn't have last year." Right, of course, how could consumers resist buying a red Wii? I already feel this urge to replace my anemic white Wii with a spiffy new red one. That is, if I could find out where it's been gathering dust in the house while the 360 gets all the action.

I do plan to dust off the Wii and fire it up when Epic Mickey comes out, just so I can see what Warren's been up to. I have no doubt it'll be awesome. I also have no doubt that Nintendo's gonna get stomped this holiday season by people rushing to buy 360's and PS3's. For October sales Pachter expects the Wii to drop 60% to just 205,000 units sold, while Xbox 360 is forecast to grow 58% to 395,000 units sold. Sony's PS3 is expected to dip 17% to 265,000 units. I see no reason for the general pattern to change for the rest of the holiday season.

Ad Solutions For Rest Of Us

If you're looking to promote a book or a game in an inexpensive way, you've probably looked at Google's Adwords program. This is how you buy a listing next to search results, and it's been the source of 95% of Google's revenues. Because it works for advertisers, and they get to control their spending very precisely and see just how much they are making from their advertising. (As opposed to magazine ads, where you generally have only a vague idea of how effective they are, if any idea at all.)

Now there's Facebook Ads, which (not surprisingly) are somewhat similar to Adwords. You get to control how much you spend, and you can pay for clicks or just for viewing. You can send people to your Facebook page or to your web site. With Facebook's enormous audience, this could be worth a lot of business. Especially if you've been building up your social marketing by working a Facebook page and Twitter.

There are some examples to look at on the Facebook Ads site, but here's an article (a hat tip to George MacDonald) that presents some case studies of Facebook Ads usage, showing the range of what's possible. Just as with Adwords, you're limited in the amount of space and words available, but not as limited (Facebook gives you 25 title characters and 135 body text characters).

The best part about both of these programs is that you are in total control of how much you spend, and you get all the information you need to analyze your spending. It should be pretty easy to look at how much you spend, and how much revenue you bring in, and then decide whether or not to expand your ad buy or to stop spending.

Yes, you'll need to work on how you can make these ads as effective as possible... the right wording is crucial. Also, where you bring the customers and how you close the sale is important. The cool thing is you can tweak these variables and see the results, good or bad, almost immediately. There's nothing like feedback to make corrections!

(If you're looking for advice on Google Adwords, there are roughly a bajillion guides to using them out there... at some point I'll post some of my favorites. But there's plenty of advice for those interested in getting the most out of this tool.)

I see these as one of the key marketing tools for the small business marketer -- the author trying to sell an e-book, the developer trying to sell an app, a designer trying to sell an RPG. Once you've got your web site and your products ready to sell, this is how you get that first wave of customers beyond your closest friends. Without spending a zillion dollars on marketing.

3 Key Game Industry Trends

Is this how most game industry executives discover trends?

Several news stories breaking this week show signs of intelligent life in the game industry, and point to the new directions the industry is taking.

Gaming Gets Bigger Worldwide. Sure, this has been happening for a while, but since the beginning of electronic gaming the industry has been built around the United States, Japan, and Europe. If you've been watching, South Korea and China have become huge audiences for gaming and have grown some very large companies. which have been buying up US and Japanese companies. Gaming is spreading beyond these regions, as this study illustrates. The Southeast Asian game market will be close to $1 billion this year, and will hit $1.7 billion by 2014. So far, most  big game successes in that area have been home-grown, but World of Warcraft shows that a US game can do pretty well in an Asian market, thank you very much.

Indie Distribution Options Get Better. Indie games have struggled to find an audience, mostly relegated to Flash game aggregators like Kongregate. Now this article shows that options are increasing; EA Partners has signed up three indie developers to bring their titles to Xbox Live Arcade (XBLA), Playstation Network (PSN), and PC. It's a validation of those three games, of course, but also a message to indie developers that there is a wider market available they can reach even without the capital or experience necessary to navigate the process a Microsoft or a Sony will put you through. This also benefits EA, of course, by cutting them in on a revenue stream and helping identify good developers EA might want to acquire at some point in the future.

The Big Publishers Get Smarter. One example of this trend is the above item, where EA shows they are aware of things happening in the business and taking advantage of their strengths. An even better example is this article about comment's THQ's Brian Farrell made at an investor meeting in New York. He's planning to launch one of their AAA upcoming titles at $39.99 instead of $59.99, and hopes to make more money by selling DLC. He sees the important thing as building an audience for the title, which he can then monetize for years. Obviously it's easier to do that by selling the title at a lower price point, especially in a market environment where game sales are lagging. I think we'll see more publishers try this, and go to even greater lengths to build an audience for a title. We'll also see more different ways to monetize game development, through free-to-play and subscription options. I think the $60 price point is looking increasingly unsustainable for most titles, and we'll see fewer of those high-priced units in the future.

These trends offer some hope against the relentless drumbeat of poor sales numbers. There are going to be plenty of changes, though, so keeping ahead of things is even more vital for marketers.

Hasbro Brings 3D to iPhone/iPod Touch

Viewmaster 2010?

Yeah, you read that right. Hasbro. Not exactly a cutting edge technology company, but you have to give them credit for thinking big. They must have looked at the iPhone market, and the excitement over Nintendo's upcoming 3DS with the 3D display, and said "What if we could combine the two?"

This is their answer. My3D, a device that lets you slide in an iPod Touch or an iPhone, and it sells for $30. Of course, you'll need 3D content, which they're hoping will be games (some free), TV and movies, and perhaps even virtual excursions into aquariums and the like.

Gee, maybe they can redo some old Viewmaster collections and put them up as apps.

OK, perhaps you're sensing some skepticism on my part. Good catch... I think that putting something up to your face like that for more than a few moments will get real old, real fast. And how exactly would you control a game when the iPod is inside the case? Throwing your head around? What do you do when the phone rings? No amount of marketing will save a bad idea, and this is one of those cases. How bad it is depends on how much money Hasbro throws at it, which I hope for their sake isn't a lot.

I don't think this will take over the world. Remember, you heard that prediction here first.

Kinect the Dots

Kinect allows you to feed Wiimotes to virtual children?

Will the Kinect sales surge fade before I run out of puns? You can but hope...

While there have been some weird (Kinect is racist because it doesn't see dark-skinned people) and disturbing (Kinect is eavesdropping on you and broadcasting your private conversations!) news reports about the Kinect, generally the early buzz is positive. Early reports had Kinects selling out at Gamestop.com and Target.com, while even some brick-and-mortar locations sold out in the first morning of availability.

Of course, the cynical marketer in me wonders how much of that is Microsoft manipulating things by not shipping a whole lot of Kinects right away. You can always say you haven't ramped up manufacturing as rapidly as you had hoped... and it sure is nice to have reports of product shortages popping up in the media, creating more demand. Besides, Christmas shopping hasn't begun in earnest yet... plenty of time to stock the stores before Black Friday hits.

Still, interest in Kinect is high, as a survey by Black Friday.com found that interest in Kinect as a holiday gift was exceeded only by the iPad. Microsoft has upped its forecast for Kinect sales, expecting to move 5 million of them over the holidays.

A British survey had somewhat different results for Kinect. While the iPad was still the number one item on holiday shoppers' minds, the Kinect only hit 5%. Apparently it's because the Kinect requires 6 clear feet of space for full functionality, and perhaps many places in the UK don't have that kind of space around where the console lives.

I'm glad to see Kinect demand high, though I wonder how much of that is being eaten from Wii sales rather than just reaching the current Xbox audience. The real test will be in 2011, once the initial "cool new device" enthusiasm dims. Will Kinect become an important part of the Xbox experience, penetrating the installed base? Will Kinect become a big enough sub-market that developers will spend extra time and money supporting it? Will Kinect drive more Xbox 360 sales at a time in its life cycle when it could sure use a boost? Numbers coming in next spring will tell us a lot more.

Microsoft needs to evangelize the Kinect hard among developers if it expects these kinds of things to happen. Developers will only support it if it's relatively easy to do, and they believe that supporting Kinect will provide an ample return on their investment. Microsoft needs to sell a lot of Kinects to make that happen. I think one of the key factors is whether or not Microsoft can get Kinect adopted for uses other than games. Can Kinect become a cool high-tech home feature by controlling more than just an Xbox game? Microsoft, get busy and answer that one.

Indie Games Win Xbox Live Victory

Breaking news... Microsoft has moved the Indie games category back into the games section on Xbox Live, after the tar and feathers were being prepared. Interestingly, this was done quietly, and not with a PR blast... even after Microsoft tried to defend the original move out of the games category.

Kudos to Microsoft for responding so quickly to an obvious mistake. A press release would probably be a good idea in order to put Microsoft's reasoning on the proper slant, at least from Microsoft's perspective.