Imaginary Cogs

Speaking of streaming games, OnLive wants to implement that cloud gaming solution. 720p resolution at 60 FPS — hey, that’s really similar to what Dyack was saying would be possible, huh? I think some people are going to be disappointed, since there’s not much OnLive can do about intermediary network problems, but we’ll see.

This leaves the question of cost. I’m wondering about the cloud computing resources OnLive plans on using. Barring substantial rewrites, the cloud would need to have either high end video cards or something capable of a really good emulation, right? Maybe some custom hardware to provide banks of nVidia/ATI processors? You wouldn’t run this on a standard cloud, because a standard cloud doesn’t provide really good DirectX capacity.

I can’t really speculate honestly because they don’t talk about their pricing model at all. If they charge a buck an hour, then they’re making enough per year ($8,760) to pay for a single desktop-class computer outright. Assume hosting is another couple hundred bucks a month? I don’t know, because I don’t know what their hardware is. Add on headcount for ops, headcount for everything else, a percentage for the game publishers. I don’t think that really adds up well even if you amortize it out over three years. I’m also simplifying, because the majority of computer equivalents won’t be in use 24/7.

$20/month for an all you can eat subscription? There are 720 hours in a month. Say we’re targeting an average of $2/hour for hours played. The average usage for this ought to be higher than 10 hours a month. You’re selling convenience, after all.

$10 for 24 hours in realtime with one game? That’s not going to fly with consumers.

Whoops, I speculated after all. It’s an intriguing question. Steve Perlman has a decent track record, so I can’t assume this is just a publicity bubble. He does seem to be the kind of guy who’ll spend as long as it takes to polish a product. We may be waiting longer than Winter 2009 to see this sucker.

Greg Costikyan wrote a takedown of Denis Dyack’s editorial on cloud computing and gaming. I think Costikyan’s sort of right, but the semantic errors don’t totally invalidate what Dyack’s trying to say. Even if he’s saying it poorly.

I disagree with Costikyan’s definition of cloud computing. He’s basically defining it by example as Amazon’s cloud computing offering, which allows random people to power up remote compute services in a scalable fashion. I agree that right now, there’s not much value in Amazon-style offerings for game companies. (Note: future post on this, because we ought to be thinking about that particular question for a bunch of reasons.) On the other hand, that’s not what Dyack is talking about and his definition is both broader and more accurate.

He’s talking about Google Docs — or hey, Gmail — in the gaming context. Google Docs is absolutely an example of cloud computing. It happens to be the case that the company providing the service owns the computers on which the service runs, but from our perspective, the documents and the software live out there in the cloud.

From a business-speak perspective, Costikyan is talking about IaaS: Infrastructure as a Service. Cloud computing includes IaaS, but it also includes SaaS, or Software as a Service. Google Docs is Software as a Service; it’s a full featured program that mostly runs on servers, with a relatively lightweight client. Dyack’s talking about SaaS.

And yeah, MMOs are in fact specialized versions of SaaS. I’ve been using that line when I interview at non-gaming companies. It makes people more comfortable when I accurately categorize the last six years of my career as working on SaaS, which I find both pleasing and amusing.

On point two, yep. Linear entertainment is not a commodity. That was a cute way for Dyack to say it’s easy to pirate linear entertainment. But Dyack is right about that, even if his terminology was sloppy again.

Point three, however, is where Dyack is wrong, and it’s for exactly the reasons Costikyan outlines. The user’s already spent money on the desktop CPU. It’s less profitable for gaming companies to pay for CPUs to do work that users can already do. Not too complex.

I guess you could argue that freeing yourself from the risk of piracy is worth a certain investment in servers. I’m not sure how high that value really is. The books I’d want to read… probably Popcap, right? Casual browser games are SaaS. Popcap’s games migrate from browsers into standalone games as a matter of course, so that must be a profitable business decision, assuming the Popcap guys aren’t dumb.

Finally, it’s worth noting that Dyack slipped a casual “Imagine if technology allowed us simply to broadcast a video signal (games) at 60fps at 720p through a server” in there. Yeah, I can imagine that. It’s not all that close, if you assume that you don’t want network lag to affect your gameplay. And you don’t. You also want to make sure college dorms can all play your game at once without problems. Etc.

Blizzard has decided that they don’t want anyone making money from writing in-game addons. This isn’t too surprising. In broad strokes, you can go two ways when it comes to your game: you can try and hold onto all the potential profits yourself, or you can open up the ecosystem to others. Either direction has pros and cons.

In this case, if we’re looking for specific addons which may have prompted the action, we gotta start with Carbonite. Carbonite is basically a quest guide with a million other features baked in; it makes it easier to level. Carbonite has two features which distinguish it from older attempts at commercial addons.

One, it’s aimed at a profitable market. Quest guides and gold-making guides are real business these days — and the companies behind them get bought for real money. Nobody’s successfully selling how to raid guides for money —

Quick digression. Raiding is a group experience; WoW leveling is not. WoW raiders are fairly likely to have at least semi-clued friends. It’s very easy for a solo WoW player to lack such friends; thus, leveling guides have a bigger market. Interesting unanswered question: will Blizzard’s efforts to make raiding more casual result in a bigger market for commercial raiding guides? Digression ends.

— so yeah, RDX didn’t make enough money to keep the developer working on it.

Second, Carbonite went for a free/premium model, with the free version showing ads in-game. I suspect that’s a bigger reason for the change than one might suspect. One addon showing advertisements is no huge deal, albeit annoying. When a majority of your addons are doing it, the user experience is negatively affected.

However, if ads were all Blizzard was worried about, the policy would be different. Blizzard clearly wants to control the monetary space around their game, and why shouldn’t they? They created the platform; they should get to profit from it in the manner they choose.

The best example of the opposite approach is Linden Labs and Second Life. The Lindens go all in with an explicit definition of their product as a platform, which is accurate. They want to sell a basic service that third parties can build on, and their basic service is pretty well tuned for that purpose.

That approach does work. For a traditional Diku-style MMO, however, you’d open yourself up to worries about RMT; once you open the door to micropayments, people start getting agitated.

I don’t actually think that’s an attitude likely to last. I’m old enough to remember when people thought advertisements on the Web were an abomination. Heck, I’m old enough to remember when people thought the Internet should never be used for commercial purposes. We pay for tickets to sporting events, and we don’t freak out when the ticket has an advertisement on it. We pay a monthly fee for cable service, but premium channels still have advertisements.

I think by making this change Blizzard’s actually opened a few doors. Intelligent eloquent people are making voluble arguments against the new restriction. Mostly the one about donations. A couple of popular addons are going to go away, and everyone’s going to know it’s because Blizzard said you can’t charge money/ask for donations. If you liked QuestHelper or Outfitter, there’s a decent chance you’ll be biased towards those arguments.

So while it’s probably not a reasonable transition for WoW, what if the next game Blizzard publishes comes with an iPhone style App Store? Blizzard would get a few nice effects there. First, they’d take — say, 20% of the revenue stream. I pulled that out of my hat; if I were doing ops for Blizzard I’d run the numbers and be smarter. I don’t know if Blizzard logs the addons a player uses, but if I were in charge over there they would, so let’s assume they do. You could make a pretty good stab at the size of the stream.

Second, they’d have a lot more control over the addons available, but no more control than they wanted to have. Again, c.f. Apple. There are a million low-class fart apps for the iPhone; it doesn’t reflect on Apple’s quality. On the other hand, if Blizzard wanted to screen out crap, they could.

Third, the classic problem of distributing addons could be solved. A lot of WoW players rely on addons and feel like they can’t play well without them. On a big patch day, old addons break. Addon sites tend to die under the load of millions of players trying to get addons at once. This is, like it or not, part of the WoW experience. Making it better is a relatively small win, but it’s a win.

The traditional arguments against Blizzard control of addons are workload and responsibility. Curse shows 3,727 addons. WoW Interface shows 2,122 standalone addons plus 459 in the Featured Projects section; they do sort out obsolete addons. This is not a crushing workload. It’s probably one person.

Responsibility is a bigger problem. It’s not so much responsibility to the players — they’ll understand that addon quality isn’t certified. The problem is the need to present a sane relationship to your developers. The key word I kept sneaking in up above: “platform.” WoW’s UI API has been fairly stable, but it’s also always been very clearly and aggressively prone to change. Running it as a platform doesn’t mean you can’t change it. It does mean you have to manage the community better.

In particular, it would be nice if addons didn’t potentially break every time there’s an update to the game. This is a bigger workload than screening submissions.

Still. QuestHelper is about to be cancelled. It has been downloaded, from Curse alone, over 20 million times. There have been around 100 updates, so let’s divide that 20 million by 100, assuming that every user has downloaded every update. 200,000 people have downloaded QuestHelper from one site. Maybe it costs two bucks in the hypothetical store. 20% to Blizzard is $80,000 over the course of the last two years. That’s not pure profit, of course.

I’m cheating, because at a brief glance QuestHelper is the most downloaded addon on Curse. I’m also cheating because on the one hand, I’m being conservative and assuming that each user downloaded the addon 100 times; on the other hand, I’m assuming each download would have been a sale. Who knows? If I were Blizzard I’d have better numbers and be able to do better math. Perhaps the revenue share should be 30%. Maybe it doesn’t make sense at all.

I sort of doubt that you can entirely turn addons into a profit center. But they aren’t supposed to be a profit center — they’re a tool to make the game easier to play and more attractive. If you can make them stickier, you enhance the game, and letting people have a monetary stake in the success of your game is a marketing win.