The folks at >play gave Scott some free passes for the Laughing Squid community, and I was one of the lucky recipients. The >play website suggests that they were going to focus on the more creative side of online content, but a lot of what we heard was business models. I went to the morning panel on digital economies and virtual worlds, but it didn’t do much for me. A lot of stuff they discussed I already knew (people will buy and trade items in online environments, Asian users love tricking out their avatars and will pay micropayments to do so) and the new stuff was just numbers I’m sure I could have read in articles. I shouldn’t have been surprised; for one, it was put on by UC Berkeley’s Haas Business School, and two, in the mini social network they used, one of the fields was “I’m looking to get help with…” and whereas other people talked about their internships or pet projects or careers, I was inclined to say I needed help with getting my 44th level priest through Uldaman.
Below are my notes from the digital economies panel. They are not professional at all, so be forewarned.
Moderator Scott Banerji apparently had a problem with video games and he had to sell his worldly possessions before he broke the habit.
Lots of numbers about how many people are playing games and how huge the market is.
There’s a dark side (ooooooooooooooh): 28-yr-old guy in China played Starcraft for 50 hours and died, so China is putting a limit on online time.
Introducing the panelists:
- Jeff Graber: Yahoo!, leading Yahoo! Games. 23 million unique users, “we rulez,” entered mobile space, about to leave Y!Games and heading up a start-up. Before this, he led EA business in China, starting up a company called Muse Corp., similar roots to Linden Labs. Started in VC.
- Jeff Lind: Development Director at EA, part of Sims Online team. EA does $3 billion of revenue a year, so they also rulez. Interested in online stuff in the mass market, though EA is a long way from
- Nancy MacIntyre: Sen. Director of Marketing @ LucasArts, helps run Star Wars Galaxies. LucasArts sees online as the biggest opportunity. “2000 development jobs opening in the next 5 years, hint hint.”
- Philip Rosedale: CEO/founder of Linden Labs, who make Second Life, which is not a game but a tech platform and “country.” Buying and selling objects made by users creates an economy that rivals some real countries. $3 mil
- Susan Choe: “newbie in gaming industry” – COO of NHN – an internet game portal in Asia. Has noticed that in the space of free gaming, users are more than willing to offer up micropayments to enhance their experience and how they present themselves in the online space.
Everyone is talking about how much money is going through their stuff. This is starting to sound awfully financial. Main talking points:
- Social ramifications of the growth of video game market
- Digital economies
- Business models
The Economist asked: “Are video games evil?” People are putting in tons of hours into these things.
Jeff G: No, not inherently, but we have a responsibility.
Jeff L: You’re seeing the birth of a new medium. When movies had violence in them, there was hysteria. Every medium goes through this, where society has to figure out what it’s for and what’s going on. There’s a line where you either grew up with video games or you didn’t, and the people in power didn’t. Anything that’s popular will have people that go nuts over it. As younger gamers get older, the hysteria will die down because we understand it better. Illinois made it illegal to sell an M-rated game to a minor.
Phil, can you describe the economy of Second Life?
Phil: The platform makes it easy to make a bunch of things, which you can buy and sell to other users. Clothing, jewelry—big business in the game. Hundreds of thousands of dollars in transactions per month, but each transaction is only a dollar or so. Differences to the real world; there’s no resource scarcity, and the supply is only limited by user creativity. We keep an eye on commerce, and do the same thing that the federal reserve does and have a system for selling currency for real dollars, letting them monitor exchange rates. Incentive programs, adding dollars to the economy, to prevent the exchange rates from tenting up. Second Life is exactly like reality in the way the economy works. Real-world knowledge of economy is applicable.
Susan, in Korea, NHN is one of the most successful companies. What components of game design and online identity compel people to enter your online universe?
Susan: I’m not a game designer, …. [lost focus because I got pinged on messenger]… Keeping the flow of new items going means never mastering the game. the webboard games are not just multiplay, they have items as well. Women will stop to talk to each other to ask, “Hey! How’d you do that?” and they’ll trade secrets, whereas men just want to play and become more powerful. An anecdote about father/son experience playing online game where dad was the warrior and the son was the sorcerer watching his dad’s back. There’s a new style of parent that will play games.
Nancy: There’s a new paradigm of families that play online games together.
(reminds me of my “you’re mom’s tanking?” story.)
Nancy, can you talk about PC/console integration?
Nancy: That’s a little bit of a hard question to answer. MS’s new OS will affect Xbox Live, which will make it more interesting to play online games, and together with people on PCs. With MMOs, the challenge is making a game for the console that’s enjoyable to play without being able to type. We’re not quite there yet.
Jeff L: …something
Jeff G: MS is way ahead on the online side with X360.
[…more distractions on messenger…]
Jeff L: Console games usually produces a canned, very slick user experience that works quite well in the mass market.
[…more distractions on messenger…]
Susan: Casual gamer numbers are going up!
[…more distractions on messenger…]
Susan: Cross-platform gaming growth will depend on the titles put out and what will appeal.
Add ons and downloadable content, talk about it:
Jeff L: ……[something. Damn messenger.] Distribution models will take time for full adaption. People still by books and CDs despite other digital distribution methods. But people will pay money for content.
Susan: I agree, but the ability to download additional levels/items/etc to your game means game play is enhanced and people will play games longer. That could become the norm on the console side. Halo 2 did well with this.
Various: Business models for online content distribution are shaky… since everyone can do this, it’s hard for businesses to function on old models.
Going to SMS’ed-in questions.
Who owns virtual property?
Phil: Games usually take the approach of “if it’s in game, we own it.”
Jeff L: You’re not just creating games, you’re creating online economies and communities and you have a responsibility for keeping people invested.
[More talk, more messenger]
[Something about Cyworld but the chatroom hosted by play_conference is jumping and man, this is why I don’t usually have chat open in meetings.]
[They’re not talking about much new. Assigning dollar amounts to ingame items will always piss some people off, the market is ready for more virtual environments, etc.]