Sunday, January 30, 2011

Perfect Video Game Business Model

There's a blog I like to read from time to time. It's Bruce on Games. It's generally full of good insight or at least thought provoking matter, and is a healthy reading when it comes to thickening your brainstorming card deck. Still, like with many other insiders, they seem to lack something quite crucial about reality, something which means that no matter how hard they may try, their vision of the situation, their perspective, is just too narrow, perhaps too biased.
Here I present such an example: Gambling as a video game business model.

The eternal problem of selling a video game as a stand alone package is that it can and will be stolen. If people think that they can get away with stealing then they will, so the level of theft can easily reach the high nineties in percentage terms. In other words often very few users of your product are actually paying for the work that you have done.

The way round this is alternative business models, so the customer is forced to pay in a different way. These can include online games with a monthly fee, pay per play, sale of in game items, advertising or sponsorship, etc etc. All these and more are being used successfully and the industry continues to experiment in order to find viable ways to be rewarded for their work.

When I was Head of Corporate Affairs at Codemasters working for the Chairman, Jim Darling, we were fully aware of the blight of software theft on the business and often discussed ways round it. One idea was online gambling, where we made money from people betting within the game.


[Jez San OBE]'s online gaming company, PKR, is a huge success.

Ok. That's what I call missing the point. Entirely.

With gambling, he has essentially found a way to make money online with "some kind of game", but it's not the same as having found a new business model to make traditional video gaming more profitable, or profitable again.
Surely, this brings us back to the question of piracy, for which it's generally blotted out that the prime issue is economy; in that the middle class, or whatever remains of it, lives on ever ballooning debts and has been getting poorer and poorer decade after decade, with industries being destroyed and reassembled overseas.

It's quite tragic, in fact, that the electronic based industries, more open to piracy and therefore seemingly more fragile, paradoxically seem to be those which are so under-involved in economics and politics. It's like kids who have never grown. It's distressing.

Clearly, there are obvious primary priorities between putting £60 in a game or in your kids' clothes and food. It just boils down to that. Multiply salaries by ten for everybody, while keeping the same value on goods as it is now, and you'd solve a huge part of the problem. This money exists, we know where it went, and it's not in the people's pockets (clue: it's called Kapital and Banksters).
There would be minimal inflation, because the amount of money is already there, it does not need to increase, so prices wouldn't go up, purchase power wise, but keep stable (commercial laws could help). Primary resources costs wouldn't skyrocket either: they can't, "we" already produce too much. A slow down of the consumption would be a prime directive. Improving quality and durability would force industries to focus on more sustainable development (and I can't tell you how much I'm very cautious with this, as it's currently used to push the world in a direction which is nothing sustainable at all, and only used to allow authorities to peek into people's lives a bit more).

Again, all the money is already there, the amount does not need to change. It just needs to end in different hands. The mere fact that the money supply grew, prices climbed, yet income didn't really follow pretty much proves this. What hasn't worked one way won't work the other way just because income is increased to the levels it should have been at now ... let's just muse about the lack of income recalibration that hasn't occurred over the last two or three decades, relative to the hording inflation - where are we know? Yeah, good job. You've been stolen. Ouch.

Piracy gives the illusion that there's a massive loss of money, while in fact a great many people who acquire illegal copies would have never paid for it to begin with.
The problem with this illusion, which is nothing more than a fallacious argument often repeated ad nauseum every two weeks by editors complaining about lost sales, is that it also makes creators think there's a viable industry there to work in, and therefore they decide to make games.
So while in any other industry, a lack of sales couldn't be blamed on "piracy" but the simple fact that people don't have much money left to buy your stuff, in the video game industry, this silly corporate talk is entertaining a lie that keeps acting like a siren, until the ship crashes, unavoidably.

The other reason video game workers and consumers don't seem that much involved in politics or syndicalism of any sort is because of the dumbed down infantile culture that permeates so many studios which share the mental leftovers of the Internet bubble: cool kids working at Google and just sort of living their dream, having the political, historical and economical culture of a shrimp.

But no. The real deal is that people wouldn't bother pirating games if buying legal copies was not a problem. When I mean problem, the real one is not about the game's price, but people's income. It's a subtle difference, but it has a lot more to do with psychology than with cold equations.
You can lower your price as much as you want, you won't change much if the people still get the impression that the world's damn unfair and a few lucky bastards rack millions while you're left with a few pennies at the end of the month once you've paid all the bills. Case: the massive piracy on smartphone apps.

What we're seeing about piracy is so obvious because Internet enhances all, and the pseudo crisis of 2007 is only the peak of the iceberg, something that's been going on for longer than that.
So all those schemey over complicated new business *solutions* are no solutions. They're just painting, coating, but the core is still rotten and not getting any saner. Those so called solutions are even more silly because they complicate matters, while people beg for simplicity and a sense of liberty. Subscription, DLC, etc. All that is shit. Oh but wait, people actually want that shit. They're so stupid that they beg for it. Their empty lives drive them to waste their money on "virtualities" which are even more anti-productive than cigarettes.
It's no surprise that within such nihilistic societies, people are ready to pay for the likes of WoW, which by all means is not that much of a game but rather another job which just alienates you by exploiting psychological backdoors and giving you little reward at all in return.

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