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Monthly Archives: July 2009

Watch a tiered payment model in action

Just after I posted about a tiered model for fan supported video games, Techdirt has unveiled a tiered model of its own.  In order to prove that this tiered model can work, Techdirt is offering a variety of options, selling books, t-shirts, music, and at higher prices, the opportunity to have your business plan reviewed and even have Michael Masnick work for you. For $100,000,000, you can shut down Techdirt for a year. I wonder if there are any copyright maximists pooling their resources. Which tier do you like best?

Valve reveals possible future of game development

Value has revealed a great understanding for the way technology is changing the video game industry. Instead of getting mad about piracy and used game sales, the company recognizes it needs to give fans a reason to pay and support their products. Valve launched one of the first digital distribution systems for the PC and supports a thriving modding community and has played with a variety of game prices including special free weekends (which led to higher retail sales).

Valve managing director Gabe Newell thinks another future business model for video games can be fan-funded games:

One of the areas that I am super interested in right now is how we can do financing from the community. So right now, what typically happens is you have this budget – it needs to be huge, it has to be $10m – $30m, and it has to be all available at the beginning of the project. There’s a huge amount of risk associated with those dollars and decisions have to be incredibly conservative.

What I think would be much better would be if the community could finance the games. In other words, ‘Hey, I really like this idea you have. I’ll be an early investor in that and, as a result, at a later point I may make a return on that product, but I’ll also get a copy of that game.’

So move financing from something that occurs between a publisher and a developer… Instead have it be something where funding is coming out of community for games and game concepts they really like.

Several musicians and labels are showing this fan supported model can be quite successful, providing a business model that ensures the creators get paid and fans get something worth paying for.

Musicians like Jill Sobule found great success offering a tiered system of fan support where fans paid different amounts for different rewards including $10,000 to sing on the album (which someone paid). Game developers can offer many useful and scarce products to entice fan support from test early builds of the game, add their voice or likeness to a character, create a monster, access to design documents, art books, and creator Q&As.  All of these are already offered by many game developers after development.

The numbers are more than scalable, even for blockbuster games.  $50, less than the price of most console games, from 100,000 fans would raise $5,000,000, more than enough for a quality game.  More popular developers could easily raise more.  And developers might even keep costs down by getting rid of their retail marketing costs and allowing fans to contribute to the game’s development.  Valve itself released Counter-Strike, a fan-modification of Half-Life, at retail.  That fan modification, released for free online has sold more than 9 million copies.

A blockbuster game budgeted at $20 million could be built off $20 from 1 million fans.

The best part – since the game development is already paid for, piracy is no longer an issue.  The fans who paid received extra benefits and the ability to support the game’s creation. Anyone who downloads the game for free has the chance of becoming a fan and supporting the next game. This model encourages the game to be spread to as many people as possible. Not everyone will pay, but the more that play it, the more people who might contribute.

Problem solving, marketing, and Bing

Microsoft’s newest rebranding of its search engine (is this the 3rd?) is coupled with an $80 million marketing campaign and an assortment of TV ads.  These TV ads follow the conventional marketing tactic: define a problem and present a solution.  Problem: Search doesn’t work, offering the wrong results for your query. Solution: Bing, the first decision engine.

But that problem doesn’t exist.

Microsoft’s incredibly annoying ads (and I liked the weird Seinfeld ads) are better suited for the late 1990s when search really didn’t know what words went together or how to best serve results. Now, search works pretty well.

If I search for breakfast or lcd vs. plasma, I get results for breakfast food and which kind of TV to buy (even without putting TV in the search query). This is the same on Google, Yahoo, and yes, Bing, and has been true for about a decade.  So Microsoft’s trying to solve a problem that doesn’t exist.

Mostly, Microsoft’s massive marketing campaign did more to impress the press and investors, who did their part to claim Bing was winning or posing a real threat to Google, which has been shown not to be the case. At best Bing is just a more publicized version of Windows Live. Let’s remember, Google became Google with no marketing at all (and only started advertising a little last year). Having good products helps.

Hulu shoots itself in the foot over and over again

Hulu has been highly praised for its sleek design and vast amounts of commercial content, stifling nay-sayers by bringing competing networks together to share content and audiences. But these networks can’t seem to understand how important convenience is to attracting customers away from piracy and file-sharing.

I already wrote about Hulu getting into a technology pissing contest with Boxee, trying to prevent the media center software from making it more convenient to watch Hulu.  This was likely meant to prevent consumers from watching Hulu on their televisions.  Now Hulu has blocked the PS3 web browser and the Windows Mobile Skyfire browser from viewing Hulu content.  None of these browsers changed Hulu content – all the advertising was still in place.  Hulu likely is blocking these sources simply to give the content providers more control – and allowing them to use the television and mobile phone as addition revenue streams.  But this hurts everyone. Consumers loose the convenience of Hulu and go back to piracy (where they can download and watch content however they choose) or they find other content served in their preferred medium. Hulu looses audience and spends resources hurting consumer value rather than increasing it.  Consumers can’t be forced into consuming content like the networks prefer. Giving the consumers choice is the only way to compete and grow.

Now that I’m working, I need to find that life balance

I have found a wonderful job as the I.T. Manager for Leslie Hindman Auctioneers. In addition to managing all the computers and email, I will be managing the website and social media strategy for the company. 

The blogging that I hoped would get more regular after finishing graduate school has now taken another productivity hit.  As I learn my job, I’ll find that balance that gives me time for the important things in life, namely video games. And once I’m done doing that, I’ll try to find time to blog.