http://www.3dgamingsummit.com/id36.html

"Global 3D Landscape Panel"

http://www.3dgamingsummit.com/id36.html

"Global 3D Landscape Panel"

The Jaarbeurs Utrecht
Jaarbeursplein
3521 AL Utrecht, The Netherlands

June 3rd and 4th.

Eek, looks like I'm closing up the conference.

http://www.festivalofgames.nl/site/

This is most of our internal team, and we have about the same again in external contractors around the world.

Building nicely...

We learned a lot, researched a lot, and now Playdom has bought the company.

Congrats to Howard and Neil for closing this deal! Congrats to Playdom as these are very talented guys.

Because of my Acclaim experience, I really discovered the need for frictionless gaming, being able to try a new MMO with a single click. Why? As Chief Creative Officer, I very commonly would get 10 new MMO games to try in one day, at one point I was tracking 400 of them! Spellborn was a great example with a 3.5GB download.

It's tough to install all those games from all those companies and get them all running, as many were in beta etc. So that's why Gaikai really got my attention.

That said, I do miss working with the Acclaim team and wish them and Playdom the best.

The latest Nvidia Video Cards have also started to arrive in the warehouse, over 300 at a time.

Our goal is to let you play games using our hardware, so anytime you want to check out a new game it will take just seconds to get it going, and it costs you nothing.

Better still, if you decide to buy any games, the game publisher & developer get 100% of the revenue. This we hope will motivate publishers to really support the idea of letting you try all their games with no friction (no download, no install, no pain and no revenue split needed.)

So I did!

We will be demonstrating many many more games, genres and devices over the next 12 months.

What is Gaikai?

Think of it as a new trial service for video game companies. You can try state-of-the-art games before they are even launched, launching with one click from ANY website (for free), without having to download or install them.

We plan to make it effortless to check out lots of games, on whatever device you have available.

We see a lot of people making game buying decisions now based on viewing YouTube videos. They do this for a few reasons:

(1) They don't always trust what they see in trailers, so they simply need to see it played.

(2) Not all games have demos. (Despite the data showing that 96% of gamers value demos to help make their minds up.)

(3) They just don't find time to register, download, install, patch, play, uninstall just to see if they like something.

We want you to be able to check out every new game that comes out, even if you only have 1 minute of spare time.

We will explain our entire strategy over the next few months.

To be clear, we are not a "walled" gaming service requiring subscriptions, we are a service for publishers to evolve their own digital strategy, to own their own digital customers. We simply provide technology to help them reach a much wider audience than technically possible today.

April 2010

Video Game Briefing April 2010 -

2009 Year in Review

Video Game Briefing January 2010 -

I'm doing a short presentation + QA at the Login conference.

Hope to see some of you there!

Here's the Agenda.

Here's part 2

GamesIndustry.biz just ran an interview on Gaikai.
CLICK HERE

Here's the text:

David Perry isn't the kind of guy to work on just one project at a time, and at this year's GDC in San Francisco, following the reveal of the OnLive streaming games technology, he outlined some plans of his own in that area.

Called GaiKai, the service is intended to be a way for publishers to put games in front of large audiences for set periods in the hope they'll then like what they see and buy it - here, Perry explains more.

Q: Shortly after the announcement of OnLive at GDC this year there was a bit of a backlash of scepticism - a lot of people seem to feel that if technology such as that, and GaiKai, works it'll be a big deal for the internet, not just games... so why isn't Google doing it?

David Perry: Well first of all, does it interest people like Google? The answer is yes, and they were among the very first people to contact me. They're very aware of this kind of technology and its potential impact.

But the question I get all the time is: "Is it possible?" The answer is yes. There's no grey area to it. It's possible. There are two factors - lag, or latency, the speed of light travelling through wires, switchers, routers, how many hops... there are many different ways to talk about it, but basically the question is how quickly can I get my controls to the server, and how quickly can I get my video back?

My personal experience in the US - we have a server where it will finally be in the US - that isn't close to my house, but close enough, and I get a 10ms round trip, so 5ms there, 5ms back. That is so fast, it's not even worth discussing.

If I ping San Jose, which is the length of England, from my house I can do that in 20ms - which is also not worth discussing. You could not feel 20ms. You could argue you can, but really you can't. I spoke to the Guitar Hero guys at E3 and asked them what an acceptable latency for Guitar Hero and they told me 55ms - so that gives you an idea.

Now, we're not intending to run such twitch-heavy games as Guitar Hero, so our goal has been to stay sub-100ms, but we'd like to be 55ms if we can - but we'll use that as a way to work out where to put the servers. So every time we see somebody that's more than that, where they get a crazy ping time, we're going to put servers in that area - and we're going to do that continuously.

And when we think we've got them all, then we'll look at what the highest is then and take it down another layer, and another layer. It's very simple, and that's how the issue with lag works.

If someone, for some reason, had a really bad lag - and you get that if you try to play through a cell phone modem, we'll remove the service. Don't play through a cell phone modem - that's not going to work.

Q: So basically the consumer gets a great experience, or none - it's all or nothing?

David Perry: Yeah. You basically won't even know there was a service available, because we won't have offered it to you - no button will show up, because it won't be a good connection.

But anyway - that's one step. The second part is the bandwidth itself, and how much data you can push. That's where we're really different to OnLive, because we'll be pushing publishers to go smaller - and we're trying to demonstrate that. You don't need to have full screen HD to play a game, you just don't. It needs to be good, but each game has a set size it'll work at, and we suggest that they go as small as they can while still having a great experience - because the audience will be exponential. The smaller you go, the bigger the audience.

That's really our position - I know everybody has the idealistic world... like, wouldn't it be great if all your music was just the same recording as when it was made? On the other hand, I have a whole bunch of mp3s with me, which are heavily compressed but they sound just great to me - but I can carry an awful lot of them with me.

That's kind of our attitude - let's not get crazy about this. Our goal is to deliver games on any sensible bandwidth connection to the biggest audience possible... and I don't want to rule you out because your connection is 1.5mbps. OnLive is looking for 2-6mpbs, and that's a lot to expect.

I came to this hotel [in Brighton] and jumped on the internet to see what my room connection was. It wasn't great, but it works, so I was able to play the game through this hotel's internet connection, and that's real world. That's what I want - we don't want to tell people they can only play from home, on a really good connection, and that if you're recording HD from somewhere else in the house your internet connection is gone...

We're trying to keep it real. That's our goal.

Q: Obviously there will be a lot of people who have maybe had problems with MMOs and lag, or other core online games - but they've already got their set-up, and they know about games, so are you even going to have to market to those people to persuade them?
David Perry: GaiKai is not built for hardcore gamers - those are the guys that want HD, 60 frames per second, who are happy to sit for an hour and a half, download and install it... that's just not our audience at all - it's trying to reach out to new players, the hundreds of millions of people who never touched Mario Kart but would like to. They don't know it yet, but when they click - they're clicking on games on Facebook, on their iPhone, on MySpace, on Flash games sites - and they haven't experienced games like EVE Online, or Spore, or LEGO Star Wars. They haven't bought a console yet, they're not there yet.

So that's the audience we're going after initially - and it's a very different approach. To them it will be shocking: "Good God, what the Hell is this?" And that's the experience we want people to have.

Q: It's pretty easy to think of the core audience and worry they won't be persuaded, when it's not for them...

David Perry: Absolutely - ultimately, if we can grow an audience, at the end of the day that extra audience brings value to the game. So if a company puts their game out and we can double that audience because of extending that reach into places they couldn't reach, that's more revenue for the company, and hopefully they'll invest more into the game, or future games - that's really a good thing for everybody?

Q: So what's in it for you?

David Perry: It's simple - very easy. Think of it as us selling new players. Imagine you're a game company and you're developing a game, and you really want to get it out there. You have a choice of putting banners all over the internet, hoping that people see those banners and feel they need to buy the game, then go and download it.

Or you can come to us, and for a cost - and we don't know what that cost will be yet because it'll be market-driven... whatever the market's willing to pay will be the cost, for the publisher to get that player to pay. My goal is for the publisher to pay, not the gamer. That's the most important part here - that's a game-changer.

I'm a big fan of free-to-play - I'm the chief creative officer of Acclaim, and I care greatly about how to get people into games on a mass scale, and then convert them once we've got them. I just wrote an article on EA about how they're committed to Free with Battlefield Heroes, Sony's doing great with FreeRealms - there's no question that works. If you can get them to come in and give it a whirl...

I just think it's a game-changer - say you're reading a preview of a game that's about to come out, and the preview is written from the point of view of knowing the person is about to play it while reading the preview. On that window, you design your page so you've got the preview and the game is playing right there. They can click and actually experience the real game - it's pretty cool because it's not the idea of making a portal and trying to get everyone to come to it, but letting the publishers say to a certain website, "Hey, why don't we work together?"

Because everybody you get to play the game, you just saved the publisher money. There's a real synergy there - it's not like they had to pay for every banner to get every single click, you just drove your traffic into their game.

So they'll give you the game for a certain period of time, and they'll have to cover the cost of the servers while people play - and that's what we charge them. If they use one minute of our service, we'll charge them for one minute. If they play for an hour, we charge for an hour - they set how long people can play for, and ultimately they either try to convert them... go to the store and buy the game, download and buy the game... or continue playing - keep streaming, keep playing.

Q: What about the servers? It'll need a lot of hardware across the world - do you start in the US? How many do you need?

David Perry: Well, there are two different approaches - one, you build a network that's gigantic and hope people come, and the other is to build a network based on demand. If you advertise for traffic - imagine I was to go in all the movie theatres, or put banner advertising all over Brighton, for example - and all these people show up, there better be servers for them. If there isn't, then all that peak traffic that came in is going to be wasted.

You can't have that, so you have to build a network that's ready for the peak traffic, and there will be lulls in that traffic, and you'll have servers eating power... it's quite a complex equation. If you were making that order, how many would you order on day one? That's the peak traffic solution, that's what OnLive is going to have to solve.

Q: It sounds like a traditional MMO?

David Perry: It's a little bit old school thinking to be honest, because it's a brute force solution that's very, very expensive. It's going to cost... I don't know.

Q: Even if you're renting space, and not buying outright?

David Perry: Let me give you an analogy - you just signed up to this service and you're paying a subscription now. In that subscription you try to log in during peak, and it says "Sorry, our servers are full" - how happy are you going to be?

Q: That's a cancelled subscription, right there.

David Perry: That's a cancelled subscription, and they can't afford that - it's such a high cost. To get a paying player on the internet costs a lot of money.

So for us we're the exact opposite - we're doing a scaling solution. Say we only have one server in the whole world, and that server can deliver about 3500 new players to a publisher during a month, based on the number of hours, if they do one hour each.

It's going to be up to the player to decide if they want to continue playing that game, but assuming it's good, you'll have a healthy conversion from playing to wanting to continue.

So just like banner advertising on the internet, there's only a certain amount of views available, a certain amount of inventory, and people end up bidding for that inventory - it's how Google works, it's how Facebook works. You bid for inventory - there are 3500 players available, how much do you want to pay? The publishers can decide - it might be too expensive for them, it might be really worth it.

So we then say: "My God, they ordered 10,000... we need more servers." And we just keep on buying servers - but we only buy them based on demand. Why does that work? Because it keeps the cost down for everybody. We have no servers running, and I didn't spend USD 150 million, with the interest on USD 150 million burning away as I hope people are going to show up.

That's basically the model - every time we hit maximum capacity, we order more servers.

David Perry is chief creative officer at Acclaim, and heading up the GaiKai project. Interview by Phil Elliott.

For the people that visit my blog, I wanted to flick through some demos and show the experience under the following conditions:

(1) No installing anything. (I'm running regular Windows Vista, with the latest Firefox and Flash is installed.)

(2) This is a low-spec server, it's a very custom configuration, fully virtualized. Why? To keep the costs to an absolute minimum. We had 7 Call of Duty games running on our E3 demo server recently.

(3) Data travel distance is around 800 miles (round trip) on this demo as that's where the server is. I get a 21 millisecond ping on that route. My final delay will be 10 milliseconds as I just added a server in Irvine California yesterday, but it's not added to our grid yet. (So this demo is twice the delay I personally would get, the good news is I don't notice it anyway.)

(4) This server is not hosted by a Tier 1 provider, just a regular Data Center in Freemont California. Also, I'm not cheating and using fiber connections for our demos. This is a home cable connection in a home.

(5) We don't claim to have 5,000 pages of patents, we didn't take 7 years, and we do not claim to have invented 1 millisecond encryption and custom chips. As you can see, we don't need them, and so our costs will be much less. ;)

(6) We designed this for the real internet. The video compression codecs change in realtime based on the need of the application (or game), and based on the hardware & bandwidth you have. (For Photoshop we make sure it's pixel perfect.)

(7) Our bandwidth is mostly sub 1 megabit across all games. (Works with Wifi, works on netbooks with no 3D card etc.)

(8) If you hear any clicks, they are coming from my wireless headset microphone. I won't use that next time I promise. :)

(9) I made a few video cuts using Windows Movie maker to cut out dead air. Like Need for Speed has far to many menus with loads & delays between them. So I tried to keep the pace up so you see plenty of demos

(10) I keep getting asked what operating system we use. We are completely OS agnostic, some demos come from Linux, some come from Windows and will ultimately support streaming from MAC servers too.

Publishers, you know how to contact me if you want to be in our Private Closed Beta. (There's no work involved.)

Investors, just ping me on info@gaikai.com if you feel you can add strategic value to this project.

Service providers, we have all our needs covered, but if you want to contact us for some reason, again just use info@gaikai.com

Gamers, we want closed beta testers, especially if you live in California, so please sign up at www.gaikai.com Please add a note that you live in California.

We are not in competition with any other streaming company or technology, our business model is entirely different. I will be talking about it more during my up-coming speeches at video game conferences. (Develop this month, and GDC Europe are the next two.)

Our goals are really simple, to remove all the friction between hearing about a game and trying it out, to help reduce the cost of gaming, to grow video game audiences, to raise the revenue that publishers and developers can earn, and (most importantly) to make games accessible everywhere. If the iPhone App store has taught us anything, when you make it easy to check things out, you get a billion downloads.

I look to sites like Kongregate.com, I made a list of their most popular Flash games and just that first page of hits had 61 million plays on it. There are an estimated 20,000 Flash game sites on the web. That's a TON of players looking for great content! We can supply all that content with a single click.

The professional games industry has never had acess to those countless millions of clicks, but now they do:

Gaikai Technology Demo (JULY 1, 2009) from David Perry on Vimeo.

Backup Video Link
Faster Video Link - NOT HD

UPDATE:
Eurogamer did a technical review of OnLive and really beat them up, and they offered to review our tech. So we embraced this, and here's the article: CLICK HERE

(They also get into the business model a bit.)

We are listening to the questions, and our next video will cover all the key points.

I will be talking about the tech at Develop, we don't have UK servers set up yet, but we do have an offer... The top 4 publications (by audience) that contact us can come and try our tech (first hand). We just need you to be within driving distance of Amsterdam or Irvine, CA. We simply want you to be able to say with complete confidence "it's real!"

Thanks everyone for the support! This blog video has been watched over 100,000 times now on YouTube and Vimeo!

If you want to sign up for the beta, here's a direct link: CLICK HERE.

I had a damn good time in his arcade, check out the stuff it had: CLICK HERE

There were always celebrities there, Marlon Brando was staying there for a while (this was when he was really ill and was there to escape the media), Brett Ratner (Director - Rush Hour / X-Men) was there just hanging out.

I was given complete free roam, and took advantage of it, I've played his arcade machines, been on all his rides, I even fired up his go-karts, and drove his bumper cars (while listening to Michael Jackson music turned up to 11.)

As I wandered around, I walked into his movie theater and watched him play with his kids, he was an amazing father to them. I watched him quietly from the shadows at the back, he had no idea I was there. They were watching the Three Stooges but had given up on that and instead were just having fun. Anytime anything turned serious, he'd fight it, one time his chef was cooking me something, and he walked in. He saw that the chef had turned the news on the TV, and he said to the chef, "Please turn that off, this is why people come here, to get away from all that." I guess the point is that he was always surrounded with the pressures from the real world, but was trying hard to provide an escape, not just for himself, but for everyone else too.

I hated that people would say negative stuff about him as they had never met him.

I was invited back a few times and always saw interesting things, like the road would be blocked as they were exercising an elephant, my wife came up and fed his bear. I made some dumb mistakes too, like he was totally into magic, so I showed him that leviation trick but got the angles wrong, he didn't say it was the most lame magic he'd ever seen, but you could tell he was thinking it, as then he started talking about David Blaine being a friend of his. Let's just say, I gave up on the magic.

Our discussions lead us to plan for him to release his next music album as a video game FIRST, then as an album. This would have introduced many new players to video games. He was incredibly interested in the idea, and we got quite far down that road, working on the story, mechanics etc. We were excited about the press potential, I remember saying to him, "Oprah never talks about video games", to which he replied, "Oprah is a friend of mine". This was a theme I learned, he had so many friends, and actually spent time with them all. It was really impressive.

So I feel lucky to have spent time with him, I think the music industry lost a major part of its history yesterday, I know his children will be devastated, and for people like me that spent time with him, that got to see the "real" guy, (outside of his celebrity) the world lost a really great person too.

David Perry.

OH, one other thing, I have another quick Michael Jackson story from the other side... I used to know the head of security for Wembley Stadium in the UK. He gave me one of those reflective security staff jackets to wear so I could go anywhere I wanted. So I went to see tons of famous acts (Madonna, David Bowie, Prince, everyone), and literally would stand at the side of the stage and watch the show. I did this with Michael Jackson, and it was the worst show ever! Why? Well everyone kept bloody fainting! "Mister!!! My girlfriend just fainted, help me save her, PLEASE!" I spent most of the concert carrying sweaty-crushed-passed-out women to the medical crews. I'd NEVER seen that many at any concert before. There are tons of great bands out there, but it's a whole new level when your fans can't remain conscious! He rocked.

David Perry.
www.gamedesignbook.org

Twitter: www.twitter.com/dperry

If you review books for websites, you can apply to the publisher to get a review copy.

If you have any friends that teach at colleges that have video game design courses, please give them this info to get an instructors sample copy.

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BOOK:
ISBN 13: 978-1-58450-668-3
ISBN 10: 1-58450-668-7

FOR IMMEDIATE RELEASE
Contact: Aaron Rose
Acclaim Games
aaron@acclaim.com

Acclaim Games Announces the Official Release of
"The Chronicles of Spellborn" MMORPG

Los Angeles, CA (April 23, 2009) - Acclaim Games is pleased to announce the official release of The Chronicles of Spellborn MMORPG (Massively Multiplayer Online Role Playing Game). To celebrate the official launch, Acclaim will offer all players a free 2 week premium subscription, along with the introduction of a new credit card payment option for added convenience. With the official release, players are invited to join the fun in one of the most innovative MMORPG's on the market featuring a unique real-time combat system that truly sets the game apart!

Acclaim now offers a new credit card payment option to easily purchase premium subscriptions online using a major credit card! With the addition of this new purchase option, players have the option of buying premium subscriptions with either a major credit card or Acclaim Coins, the universal virtual currency used for all Acclaim games. Those who purchase with Acclaim Coins can also take advantage of the special introductory discount pricing, offered for a limited time only.

To commemorate the release, a special launch promotion will be available from April 23 to May 7 offering a FREE 2 week premium subscription for all new and existing players giving everyone a chance to evaluate the game and experience the unique real-time combat system of Spellborn. New players must register between April 23 and May 7 to get the free subscription.

"We meet with the gamers every week to discuss Spellborn, they tell us the fighting system is the most amazing thing about the game. The idea being that your 'moment-to-moment' control during battle, mixed with your own custom skill deck gives endless possibilities. To see a smart level 5 player take down a level 15 player is something that SHOULD be possible in MMOs, and is something that really good players deserve to be able to do!", says David Perry the USA Director for the Spellborn Project.

Once players download and install the game for free, they can choose between a PvE (Player vs Environment) server called "Dorzhan" and a PvP (Player vs Player) server called "Deiquonril" for a more intense combat experience.

In all regions, Spellborn will be a "Freemium" game, with a Free to Play zone and a required premium subscription service in order to access the full game past the Free to Play zone. The Spellborn game client is completely free to download and install from the official website. For game updates check the website http://spellborn.acclaim.com or follow the Spellborn twitter at http://twitter.com/tcos

Acclaim will provide Spellborn game service to players in North America, South America, United Kingdom, Albania, Andorra, Australia/New Zealand, Bosnia & Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Italy, Israel, Latvia, Lithuania, Malta, Moldova, Poland, Romania, Serbia & Montenegro, San Marino, Slovakia, Slovenia, Spain and Turkey.

Download the game client: http://spellborn.acclaim.com/downloads.html

What Lies Hidden, Must Be Found
In The Chronicles of Spellborn players enter an impressive online game world containing scenic landscapes, majestic cities and the remnants of a shattered world. Alone or with a party of friends, PC adventurers step into a fantasy realm consisting of varied shards: habitable pieces of the destroyed world floating in the magical Deadspell Storm. Those who want to prevail in the involving combat of The Chronicles of Spellborn need to apply their mighty arsenal of skills actively with mouse and keyboard. Battles with bloodthirsty creatures, intelligent hostile factions and other human opponents in Player vs. Player battles are waiting. An innovative and tactically challenging combat system with third-person shooter-like controls and a unique rotating Skill Deck provides a breath of fresh air amidst the more traditional MMORPGs. Thanks to a largely extended Unreal Engine 2.5, The Chronicles of Spellborn boasts stunning 3D graphics, spectacular effects and countless elaborate details. More information, images, videos and a beta registration-form can be found on the official website: http://spellborn.acclaim.com

About Acclaim Games
Acclaim is a revolutionary company with a familiar name. Three years and 8 million registered users ago, former Activision CEO Howard Marks purchased the Acclaim name looking to revive one of the video game industry's former giants. With the help of renowned game director David Perry, Marks succeeded. Today, Acclaim offers some of the finest in multiplayer online gaming while using a new, free to play business model. Acclaim strives to offer its users a fun, community-oriented experience with a selection of titles ranging from casual browser games to hardcore MMOs. To learn more, visit www.acclaim.com.

What do I mean? Well the point is that Pirate Bay (and it's use of bittorrent) was generated from a bunch of smart people finding a convenient way to share files, and do you really think that will ever end? This decision will slow down the "overt" sharing but it's an impossible battle to win. It's like Sony when they release new firmware updates for the PSP handheld because hackers keep breaking the previous one. After countless firmware updates, at some point you accept that this battle is going to go on forever. Jail-broken iPhones being another example. It's actually impressive to last a full 24 hours before the next crack happens.

Blu-ray movies are already cracked and freely available on the internet. I'm sure they are all over the Usenet by now. Luckily for us, we are an interactive medium so we have a chance of control.

So what can you do to change the video game piracy paradigm? People are trying... For example, China, where Piracy was a massive problem until they switched to server based games. That stops it stone cold. I personally am investing my money into game streaming, hoping that it will give people a dramatically cheaper choice, and (for pirates) be way more convenient than having to download, burn, install, fix drivers and patch (then worry about malware.)

Media companies waste countless dollars, manpower and sales trying to fight that system, so ultimately the attorneys are the only winners.

The REAL way to beat piracy is to focus on "convenience", "quality", "access". I once heard a speech about the "right price" for music. That's a price where you'd rather pay for the quality, proper meta-tags, "The Real Thing" etc. That's nearly what iTunes offers, but it's too expensive (as the speaker said after his analysis), and so the first company to actually work out that "not worth piracy" price, will suddenly make piracy "inconvenient". You don't have to agree, but it's an interesting idea.

Downloading a Blu-ray movie would be a total pain, and you would only get the video stream, not all the other "features" on the disc, so again, there's a price that people would pay for "The Real Thing", even when offered a free (reduced experience) online.

I don't expect media companies to consider this option, they will keep charging more and more and more and more (just like the video game industry is doing), the prices will continue to rise, and piracy will be fuelled. I call it the "money wall" and we just keep making it higher, making the barrier-to-entry worse and worse. It doesn't require an MBA to see that's not a good strategy.

So for me the only thing that really happened with the Pirate Bay legal decision is that this will slow down "public" piracy a bit for a short period of time, until the next method surfaces (with absolutely no traceable central command, nobody makes money off it, nobody to sue), comes along. Will this happen? Of course it will, it's a certainty!

Our industry has very smart people too, and so if anyone can get this right, our industry can. But the solution isn't to fight in courts, or to play "revision ping pong" with hackers, it's to move forward and design convenience, quality and access at a mass market price. That's what will get people to pay, even if there's an inferior pirate version available on some dodgy website.

At Acclaim.com, ALL our games are free to play, you only pay if you fall in love with the game. For me, there is no better business proposal for the gamer. Secondly, if file sharers share Acclaim game files, they actually save us money (as we don't need to pay for delivery bandwidth). We have ZERO piracy, and file sharers our are friends!

My message is simple, look where the industry is going, and get on that train. Or, set up a direct deposit account with your attorney, so they can rack up thousands of hours pretending to protect you from these scary "Pirates!".

No lawsuit will make them go away, and continuing to raise prices is just throwing fuel on the fire.

I remember seeing Michael Moore get hit with the question of piracy on his work, and his response was kinda surprising:

Anyway, to be clear, I think our industry focus should be on generating new business models, new ideas, and move with the times. We have a unique advantage over static media and are just one step away from being the #1 form of entertainment.
In a weird, twisted way, the pirates of static media (movies & music) are going to help get us there.

For those that follow Acclaim's progress, it's a good update.

An Interview With The Founder And CEO Of Acclaim

We had a chance to interview Howard Marks, the founder and CEO of Acclaim, a developer and publisher of free-to-play online games largely focused on the audience in the western hemisphere. We believe that a shifting user preference toward the social and connected experience will likely drive the popularity of free-to-play and multi-player gaming, especially with the younger generation, which does not view gaming as a solo experience limited to consoles. The company is not seeing any impact of the slowing economy, which may reflect the resiliency of online and free-to-play gaming, and also, the apparent nascent stage of the opportunity.

KEY POINTS:
• Acclaim is a developer and publisher of online games, with over 10 million registered users, mostly from the U.S. and Europe. The company offers its games as free-to-play and monetizes through virtual goods sales and in-game ads.
• Given the broad demographic of the gaming audience and the shifting user preference from traditional media to online games, Marks expects in-game advertising to emerge as a sizeable market opportunity.
• While the older players in western countries, who grew up playing console games, may find free-to-play, PC, and multi-player gaming a different experience, the younger generation, which grew up on the Internet and is used to the connected social experience, such as Facebook, Twitter, etc., is much more comfortable with the multi-player gaming, free-to-play, and virtual goods model, driving the popularity of free-to-play multi-player online games, in our view.
• We view favorably the frictionless and scalable model of online gaming that relies on acquiring players through viral or word-of-mouth marketing, which we believe strengthens community bonds among players and ultimately helps to promote the longevity of the games.
• According to Marks, the company seems to be benefiting from the slowing economy, which may represent the resiliency of online and free-to-play gaming and the apparent nascent stage of the opportunity.

Can you explain Acclaim to investors?

Howard Marks, Founder and CEO, Acclaim: In 2005, we purchased Acclaim assets with the goal to restart it as an online game company based on a free-to-play model. Currently, we have close to 10 million registered players. We have a few types of games; we have hardcore massively multiplayer online game targeted toward young males, and we have browser-based games that are targeted toward a broader demographic. We are also developing our own browser-based game using Flash. And the first one is being released, called Rockfree. We have another one called Prize Potato, which is on Facebook right now, and a couple more games, one is called Kogamu and the other is called Acclaim Poker.

What is your business model?
Howard: All our games are free-to-play and we plan to monetize them through selling virtual goods and ads.

What is the current revenue split from various streams and where do you see that trending over the next couple years?
Howard: Advertising model is dependent on economic conditions. Longer term, I think that there'll be some significant opportunities to get brands to target our consumers because brands will have a hard time finding their audience on TV, radio, or prints, given the declining popularity of traditional media amongst the younger generation.

Who is your primary target audience?
Howard: It depends on the game. Just like a TV network targets a broad audience through a variety of shows, we target a different audience through a variety of games. The download MMO games are hardcore, certainly 90% men, usually teenage boys and young adults. The browser-based games target different demographics. We have games just for girls. We have games like Rockfree, which will be probably 50-50 boys and girls, teenagers, and young adults. Currently, about 75% of our revenue comes from the hardcore market, but we expect that to change with new games that we are launching now.

Can you talk about the geographies that you target?
Howard: We are 65% U.S. Half of the remainder is Europe; the other half is the rest of the world.

What is the typical ARPU on your games?
Howard: It depends on the game; the monthly ARPU for hardcore games is generally $25 to $45, and for the browser games, is $10 to $15.

How big could this market be for Acclaim?
Howard: Well, it's pretty simple to calculate. Look at the size of the videogame market and then look at the size of the TV market. What's interesting with online games is that we cover both. We're more of an online media company. To understand our potential, look at the value of Google! Now, where do people spend most of the time online? Is it on searching for things or is it entertaining themselves? If it's entertaining, then our industry is worth more than what Google is worth. So we think the potential is pretty big.

What are the secular drivers for online games, and free-to-play, ad supported, and virtual goods models?
Howard: A big size portion of the ad market is going to go towards us because the consumer is changing their habits. As they change their habits over time, like they did with the record industry, that's where you capture the value. So we're already seeing a transfer of value from the traditional media, like TV to games. With video games, it was hard to capture user behavior post the game sale; with online games, it is very easy to capture and that will drive the advertising sale on games.

As for the virtual items model, it is about changing consumer preferences. A lot of old gamers, who grew up playing console games, may not be comfortable with this model, but the younger generation is very comfortable with it. We have already seen the changing consumer preferences transform businesses like Facebook and Twitter. We have already seen success of the model in Asia, where online games has become a quite significant industry compared to TV and music.

But in the U.S., we have not seen the level of success with the virtual goods model as we have seen in Asia?
Howard: I think that in Asia, they have all these cafés that already download the games and prepared the PCs pretty nicely and ready to go. They didn't have a videogame market because there was too much piracy, so there was a latent demand that was being not met. Online game satisfied the demand and made it convenient for consumers to go to the cafés and spend money on a per-hour basis to play those games. And then Korea invested a lot more money than we did on a per-capita basis to connect the fast Internet into the homes. We're going to come around to it. We are a matured Internet market right now. Game section is still a little bit immature. But we have already seen some hints of the success of the model in the U.S., for example, Club Penguin. We need a few hit free-to-play games and we'll sell plenty of it.

How do you acquire new users?
Howard: It has to come virally. If you buy them, they're expensive, and most of the time, not profitable. So you have to work on the viral nature of the game, get to be a well-known brand, get a reputation, get the community engaged to go out to their friends to invite them. A lot of the companies that have raised cheap money go out and spend money on marketing, but that doesn't make money. Look at the success stories of internet, how much money Google has spent on marketing, zero; eBay, PayPal, Facebook, MySpace, all have spent zero dollars for customer acquisition.

Who are your competitors currently and then who do you think could be your competitors potentially?
Howard: I don't think that competition matters because we are at a very early stage of a very big market and it doesn't seem like a winner-takes-all market. There are game companies like Jagex, Nexon, Activision-Blizzard, some Chinese companies. But most of the media companies and most of the videogame companies are not involved.

What's the reason that companies like Electronic Arts or Activision have not been so much behind this free-to-play model?
Howard: For one, it is too small for them. These are much bigger companies and they don't want to waste their time on a game that would generate $5 million a year. They'd rather spend the effort on a game that will sell $200-300 million. Secondly, I think they have a business model friction issue with the retailer that is not easy to solve. There's going to be definitely a revenue mix change for the retailer, which I don't think the retailers are too happy about. But it's unavoidable. Look at music and look at what they were doing in music 10 years ago and look at what they're doing today. I think the videogame industries are probably going to experience the same thing.

What is your secret sauce? What part of your business is difficult for anybody else to replicate?
Howard: The brand is hard to replicate. We have a good team, a senior team. Most of the companies in this space are newcomers. There are a lot of Asian companies who are bringing the Asian business model here, but they don't have the recognizable brand. We're also making our games; we're going to continue to license, but we think that owning your own IP overtime is pretty important.

How might this current economy be impacting your business?
Howard: I think in a very strange way, it's actually a benefit for us. Because money is tight, consumers may not spend as much this year as they did in previous years, so they will look for things that are better-suited for their current economic time, and our business model, free-to-play, is pretty well-positioned.

How big is Acclaim and how fast is it growing?
Howard: We are currently eighty people. We think we will double our revenue every year. But, it could slow down, it could accelerate, it could be a hit. Hits do make a big difference when you have a hit. At the end of the day, you have to look at our industry as operating content, but when you have a hit, everything changes.

When you look out the next three years, what do you see as big challenges for you guys?
Howard: The challenge is to stay focused, operate the business with good business sense. Don't go crazy. If the hit doesn't come, that's okay. Our model is designed to work well without hits. So that's our strategy.

In the next three years, do you see Acclaim as a standalone private company, as a part of any bigger platform, or do you see it as a public company?
Howard: We don't have a strategy. Look at what happened to YouTube or what's going to happen to Twitter in the next few days. It's hard to predict. I think as a strategy, an independent private company makes sense; a public offering makes sense if there's a market out there for us. But I suspect that the market is not pretty closed right now, and for a short period of time, there is not going to be an opportunity.

So I guess it's the biggest book ever published on Game Design. Or maybe the heaviest.

What is it? It's really a reference to brainstorm new ideas from. Really. If you take time with it, I promsise it will help you generate new game ideas, characters, weapons, quests, puzzles, etc.

It's NOT-FOR-PROFIT, so we want the readers to help edit this into Edition 2, so we have a website for that:

http://www.gamedesignbook.org/

The more money it makes, the more it gets given to colleges around the world.

Available at: Amazon.com

This year, I hosted a lunch at GDC with:

Will Wright - EA
Warren Spector - Disney
Rob Pardo - Blizzard
Neil Young - NGMOCO
Brian Fargo - inXile

Gary Whitta (veteran game reporter) was our moderator

(from Gamasutra - By Chris Remo)

During a fast-paced luncheon panel held during Game Developers Conference, notable industry veterans discussed a variety of current gaming trends, including social gaming, changing attitudes towards pricing, and cloud computing in the context of the recent OnLive announcement.

Assembled at the Gamasutra-exclusive event were Warren Spector of Junction Point, Neil Young of ngmoco, Will Wright of Maxis, Rob Pardo of Blizzard (or “the U.S. Mint,” as moderator Gary Whitta joked), Dave Perry of Acclaim, and Brian Fargo of inXile.

The event was kicked off by recounting a recent Nolan Bushnell quote disparaging social gaming: "Social is buying someone a drink. Sitting in a dark room in your underpants talking to someone might seem social, but it's not cool."

He then turned to Pardo, who manages "maybe the largest group of people in their underpants in the world."

Pardo said social gaming is "becoming a cooler and cooler thing to do," pointing to all the people who have met in World of Warcraft and ended up maintaining real-world relationships -- even up to marriage. "It's too bad the media continues to paint it in a certain way," he said. "A lot of [players] have families, have kids, play with their kids. ...Look at all the stuff with the Wii. It's the same with massively multiplayer games, or social games. ...It's becoming more acceptable."

"But is that a real relationship?" asked Perry.

Responded Pardo, "Sometimes it's more real. When you're at a bar, what are you talking about? When you're online, you're sharing a hobby with someone."

"Who cares what you're talking about, if you're getting something out of it?" asked Wright.

Wright called for a "broader definition" of social gaming, saying that all kinds of shared game experiences can be social, be they intentionally so or not.

But "is it a change for the better or worse?" challenged Whitta.

"To me, the biggest shift is that in the past, most of the social gaming has been with people you don't know. There's now the dynamic with Facebook, that it's with people you do know," said Fargo. He gave an example of getting into Facebook games initially, simply because he wanted to beat the high scores that had appeared on his friends' pages.

"So you're saying we've found a way to monetize peer pressure," said Wright, generating laughter around the room. "Look at kids playing Pokemon, which is really a dreadfully boring experience," said Wright -- much of the enjoyment comes from sharing Pokemon with other players, and discussing the play experience.

Spector suggested to Pardo a paid World of Warcraft service that would allow players who find themselves totally in sync to actually meet each other using real contact information. "You could prove or disprove ESP in about six hours," he joked.

He also spoke on the time benefits of asynchronous multiplayer, as is common in Facebook games. "I'm really wrestling with the fact that we're this high-engagement medium...but we're also a high-commitment medium. It takes so much time," he said. "I tend to focus on single-player experiences and empowering players to own a story, but even there I'm trying to find a way to reward players for low commitment. I don't want players to have to give me their whole lives to enjoy what I do. ...I want games in smaller chunks."

"That's old school back to the way people used to develop personal relationships -- with correspondence," Wright pointed out. "That was asynchronous in nature."

Whitta offered that that is actually less social, because there is no direct interpersonal communication.

"But consider how long a session is going to last," Wright responded. "You might play a game over weeks, and during that you can still communicate."

"I'm not sure I agree that Facebook play is drop-in, drop-out," Young said, guessing that their core users are as "hardcore as anyone. ...There's probably an interesting mapping you could put against humans. There are core humans that get addicted to certain things, and will throw tons of time and energy at it," as well as those all across the rest of the spectrum. "I think it might be a misconception that the way all Facebook games are played is asynchronous."

Wright noted that asynchronous designs can inherently accomodate that entire spectrum -- from a focused half-hour, to weeks for a single game. Spector noted that he actually likes it when his opponents aren't online as he takes his turn -- because when they are, he ends up sucked into it for longer periods of time.

"I've actually become more antisocial," Fargo admitted. "In a weird way, I find that...we become more antisocial as we spend more time on this. ...If you watch kids today, they don't pick up the phone that much. They don't physically socialize with each other."

He and Wright then joked about communicating with their own families asynchronously with Facebook and IM, even when relatively close.

Spector apologized for teasing Pardo about World of Warcraft, but followed up by describing how amazing it is that his own wife now has a 40-year-old housewife friend in Europe, purely because of meeting people in World of Warcraft.

Still, Spector added, he wishes MMOs had a wider range. "I think what we need to do is change their content," he said. "I am so sick of games being, 'Is the guy going to get an axe in the head? ...Is it going to be a demon? ...Is there going to be an alien coming out? ...I think the kind of fantasies we provide aren't helping."

"I love fantasy," he noted, "but I don't love that that's all we do. ...Give me something a little different. ...When I think about the future of this business, I'm so heartened by the stuff in the IGF boot, because at least people are trying something different."

"I'm sure half the people in this room have played the men's urinal test," interjected Wright, to several seconds of silence followed by explosive laughter, after which he explained an online test that grills men on "restroom etiquette." "Most men ace this test, and most women get 50 percent," he said, because men have learned experience using urinals.

"We can make games about the real world that are interesting, surprising," he said. "We can make games out of everyday life."

Said Young, "It feels like there's a pretty high correlation of new interesting things coming out of a new generation of game makers that are just thinking dramatically differently than we are. ...People who...grew up with our medium are just more willing to fully explore it."

Fargo responded: "At a certain level, we also get trained. When we stray outside the boxes of fantasy or science fiction, you're going to get smacked down and you're not going to get a payback for it. ...[Blizzard] are the kings of knowing what works. Why did [Blizzard] pick high fantasy? ...There's a good reason, and it's not because Blizzard isn't clever. Having been on the development side, a lot of these young guys, if I were to pitch their titles to EA, would it have been picked up?"

"But you're defining games by a single dimension," argued Young. "You're often defining things by the subject matter and content. You do'nt just have to be progressive in the content. You could be progressive in the game design. ...Our audience, certainly the younger demographic are not seeing the exact same way we saw them. They can intuit them differently."

"If it were really creative, and played really well, it could work," said Perry, to which Young noted, "Yeah, it's called Portal."

Perry went on to say that he is concerned that this industry frequently tries new things without actually putting the proper effort into them to make them fully executed.

"I think we sometimes value innovation too highly," said Pardo. "I feel like we preach that so much...and we really don't teach lessons of execution enough. It's not necessarily that there are a lot of fantasy games. I don’t think that's so much the problem as that there are a lot of bad fantasy games." He pointed to Nintendo as a company that is “always nailing the execution,” which Blizzard tries to do as well. “You get rewarded for that,” he said.

“In my heart, I know you’re right, and I think I’ve always undervalued execution and overvalued innovation,” Spector said, “and I’ve tried to modify my thinking. ...You have to focus on execution. ...I just say, ‘Look, we’re still a novelty-driven medium.’ People have to see one thing they haven’t seen before. In the past I would have said, ‘Do everything! Go!’ Now I just say, ‘Find one thing.’”

“At the same time, you’ll have people going up into new realms, dropping new stakes into there,” said Wright. “You almost need low-quality games that are pushing that envelope. ...Then people go further on. You need a balance of both to keep the industry healthy.”

Said Spector, “Many of the games coming out of the indie movement arne’t crazy original titles...they’re almost like commentary on the games that have come before. They’re built on, say, a lifetime of playing platform games,” referring to Braid. “They’re deconstructing our games.”

“It’s like we developed this language we had to learn as non-native speakers,” said Wright. “They grew up with that language.”

Whitta then moved on to a new topic: cloud gaming, particularly pointing to the recent OnLive announcement of remote game processing streamed to PCs and televisions.

“Would it change what you do?” asked Whitta.

“Not in the least,” answered Wright.

“Completely,” countered Spector. “How could it not change the way you do business?”

“On the creative game design side, aside from some latency issues, I don’t see why I can’t be delivering the same experiences [I already do],” Wright said.

Spector started throwing out examples of episodic content and serialized content: “You have to think about narrative differently -- if you’re creating a serial narrative...that’s a totally different experience.”

Latency issues were raised, but Young noted that cable companies “want nothing more” than to fix those issues, if indeed the technology can add new audiences and revenue streams.

“How many game designers here feel like they are significantly constrained by hardware here?” asked Wright -- and none of the assembly answered in the affirmative.

“I don’t know what, ten years from now, we’ll be able to do,” Spector explained. “Right now, I don’t feel contrained. But we shipped Ultima 6, and it required 10 megs, thinking, ‘Nobody has a hard drive that big.’ Then CD-ROM drives came out, and we said, ‘We’re never going to fill this!’”

Pardo said that Blizzard spends a lot of time designing experiences that work equally well on low- or high-spec systems -- and cloud computing would remove the need for those worries.

Spector suggested that even a constraint like latency issues could introduce a new creative constraint that could lead to new and interesting design avenues.

“In the old PC days, it was very difficult for the average person to get a PC,” said Fargo, “and then, on comes cartridge -- plug it in, you’re done.” He said he’s concerned more with matters of accessibilities than matters of technological ability. “For me, if the cloud makes it more easy for the average person to play something, that’s when it becomes important.”

“Games are going to become far more browsable than they were before,” said Wright. “Imagine you could just be flipping channels, but flipping games instead. ...In some senses, it’s going to have to make our games a lot stickier. ...In two seconds, I could be flipping to Crysis, instead of your boring game with a lot of backstory I have to read,” he said, vaguely in Spector’s direction.

“So it would completely change the way you design your game,” declared Spector in response, to considerable laughter.

Whitta then interjected again, noting the statement by a GameStop executive claiming a threat to retail from digital distribution is potentially upwards of a decade away.

“That’s because he’s reselling everybody else’s software,” said Young.

“When’s he going to go to congress and ask for a bailout?” asked Spector.

Wright recalled the rise of CD-ROM software, which was extremely slow for about eight years, before it suddenly exploded. “We’re almost at the steep part of that curve” with digital distribution, he estimated.

Whitta asked Young how he deals with the changing attitudes towards pricing, partially as a result of digital distribution, where people sometimes consider even tiny price points more money than they are willing to pay, since there is so much free content by comparison.

Young then referred back to ngmoco’s strategy for iPhone game Rolando, which will receive a slate of free content on a regular basis, followed by a paid sequel, with its own new free content, and so on. “It’s kind of like a proxy for building a service around your intellectual property,” he said. “What we’re trying to do is build a relationship for customers. ...After that 12 months, we’ll end up making as much or more money than a DS or PSP game developed over a longer life cycle,” with the added benefit of getting more feedback from customers along the way.

“When we did The Sims Online, our primary customers were 12-year-old girls,” Wright said -- and those consumers had no access to credit cards to purchase digitally-distributed content. “But these same people had no problem buying expansion packs every three months. ...The expansion packs became voluntary subscriptions.”

Whitta mentioned price points again by pointing back to the release of Braid, which released to outcry over its comparatively high price point relative to many other Xbox Live Arcade games.

Pardo warned against listening too much to those vocal critics -- WarCraft III had been the company’s most successful game to date with no added subscription, but World of Warcraft ended up blowing that game’s sales out of the water, even with a much higher investment.

“There’s a big difference in terms of the difference between free software and premium paid software,” Young added, noting that Rolando sold at $10 for two months before it was brought down to $5.99. “We wanted to bring it down to 7.99, but Gameloft were fucking up the market by bringing their prices down.”

“It’s absolutely our long-term agenda to make sure the average revenue per user for games on the iPhone goes up over time,” he went on. “It’s a very nascent business -- it’s very new and very fresh. ...The iPhone business is kind of this super-heated version on the old industry that’s iterating really, really fast. I would say the jury is still out about how pricing is going to work on the device. ...The market sets the price.”

Spector pointed out that, even now, with a twenty-dollar bill, people can go out and buy any kind of entertainment -- buy an album, buy a book, see or buy a movie -- but they can’t buy a game.

“I can buy twenty games,” said Young.

“It’s remarkable how wide the variety of opportunities is,” Spector acknowledged, noting that there are now is now a huge number of types of business in the games industry -- as opposed to mere years ago, when pretty much everyone “was the same kind of business.”

As the final question, Whitta asked what the participants would like to see in gaming hardware going forward.

Said Perry, “I’m getting concerned that the console manufacturers will turn into followers, that they’ll end up just trying to check the boxes that Apple has already checked for them. ...We’re still following.” He asked the other attendees what they would do if they were put in the position of delivering the next platform experience.

“Maybe they’re done,” offered Young. “Something that’s been interesting to me from the Apple experience...I kind of expected Apple to function as a first party...in the way first parties typically function,” but he noted that that ended up not being the case -- there were fewer quality control mechanisms in place than in a traditional console environment. That initially concerned him, but he explained that he now appreciates that that has opened up to the door to many new developers who are becoming invested in making games but would not be able to get a foot in the door elsewhere.

“I’m getting pretty tired of doing firmware updates every time I turn on my PlayStation 3,” said Perry.

“But the firmware updates are always rubbish,” Young added, comparing the PS3’s firmware updates to the iPhones, with the latter being significantly more impactful.

Whitta asked Young to elaborate on his comment that “maybe they’re done.”

“Sometimes companies go away. Sometimes industries go away,” Young offered. “Sometimes they reach the end of their dominance.”

“Removing barriers to the creation of content, removing barriers to the consumption of content” is the proper goal for platform holders, Spector said. “In terms of the pool of potential developers, there are pools of thousands of people who want to make games. Get out of their way.”

Pardo suggested that companies like Sony and Microsoft look to Nintendo and work on improving their input devices, saying that Blizzard chooses not to put their games on consoles because they would just end up being “crappy ports.” He added, “If they don’t come up with a way to come up with new forms of gameplay, and new mechanics, than there is no point in giving us new hardware, because then it’s just about cloud computing.”

“This is going to make or break [console companies] this time around,” Perry warned. “I’m not aware they’re really putting a big amount of effort into finding out what the people who are making the games [want].”

“I think they’re so focused on the all-in-one device...I’m not sure they’re actually thinking about the games that are actually going to come out,” Spector said. “It seems kind of crazy.”

“I’d love to see what you guys do with the Wii,” he said to Pardo, to which the Blizzard exec smiled and raised his eyebrows, but stayed silent.