AGC Talk: Raph Koster's "The Age of Dinosaurs"
Raph Koster gave his talk at AGC to an eager crowd and made lots of waves
On the second day of the AGC, I was assigned to cover the renowned industry guru of MMO Games, Raph Koster’s presentation, “The Age of Dinosaurs.” With Dana quipping that it would be right up my alley, me being in the “Dinosaur” age group. Ouch, score one, Dana!
“Fat Wookies should be able to belly-dance,” Raph Koster commented. “That was my last business decision made.”
By comparing the game industry to the dinosaurs, Koster warned a room full of game developers and media that the environment is changing rapidly and that they were doomed if they could not adapt.
According to Koster, the game industry has evolved into mega-ton slow moving dinosaurs and have specialized themselves into a situation whereby they cannot respond quickly to the changing environment.
To illustrate, he showed the game “manual” for Pong.
“A total of 79 bytes,” said Koster, “including carriage returns,” stressing his point by saying that was the entirety not only of the instructions but the strategy guide as well. In comparison, the manual for GTA: San Andreas is over 1400 pages long.
Games have grown exponentially in size, as has development costs. Again to illustrate, he showed the rapt audience that adjusted for inflation, over the last 12 years, the budget for creation of a game has gone up by 22 times, the data included in a game has grown 40 to 150 times, yet the industry has only gotten six times better at making the content.
He cited the specialization – dedicated 3D graphics cards, surround sound, high resolution graphics, single player experience and narrative games.
“We’re specialized into these things,” he said, “and these are vulnerabilities when things change.”
Koster cites a study that showed that most gamers and game developers fell within the Introvert segment of the Meyers-Briggs Personality Quotient, of which, he tells as an aside, applies to only 19% of women. Basically, game developers were developing games for people like themselves.
“Games are a niche. Like poetry is a niche. Niche-y, niche-y, niche-y, niche-y.”
What is worse, he tells us, is that in all Media, hits are getting rarer. A hit in the “I Love Lucy” days of television pulled 75% of viewers. In today’s sea of choices, a mere 15% in considered a hit. In response to the vast choices, retailers with limited shelf space are required to make choices. To whit, they will only stock the best selling games, and that is the niche that game developers are fighting for and have evolved into fighting for.
Koster compared games to other media in what he called the Content Industry. Books, music, movies and games all go through the same life cycle. There’s a funder, a creator, an editorial gate, a publisher, a distributor and finally a re-user. That is… if it can be re-used. Unfortunately, the re-use market for games is terrible. By re-use, Koster is not talking about re-play value or re-sale of the game, but what else the game can do in terms of creating revenue for the creator. Books may be easily adapted into other media such as audio-books, movies or plays. Movies can be sold again as DvDs, may spawn a TV series, but games? A movie… maybe.
In this day of one hit wonders, Koster told us that the genre kings were the trumps of the industry and it could only go downward from there, and that the MMO genre was already trumped by WoW. In his opinion, no one’s going to be able to do to WoW what WoW did to EQ.
He then showed a graph of the 100 top selling games of all time which was dominated by The Sims, followed by Diablo II and then by World of Warcraft. Followed immediately by a graph showing games which were not sold in the retail space but by digital distribution, showing that Runescape, Habbo Hotel and Gaia Online all eclipsed WoW on a trailing 30 day usage.
What was further telling was that those games were not designed or targeted toward the “core gamer.” He also mentioned the study by Parks Associates which showed that there were more than just the Power and Casual gamers out there in the market.
Having built his case, Koster informed us that the Meteor has already hit. The price of content has dropped for the consumer whereas the cost of making and delivering that content has risen for the producer. The average consumer wants something for nothing. That has happened with the music industry, now it’s happening with movies, television and games. The game developer has to find other ways of making their money, not block themselves into the retail box/shelf space, locking in subscribers, targeted at Power gamers model.
So where are the mammals in this scenario? Koster informs us that the mammals will be the ones that are built for digital distribution – with leaner implementation. The ones that aim at a different market; that utilized the web in the way that it is going, that utilized social networking.
“Content is not worth a damn. What is of value is the relationship between the consumer and the producer,” said Koster.
He stressed that game developers should want re-use value. To be able to ding the consumer over and over again, to merchandize, find other venues for making their money.
“You don’t want to be the Beatles, you want to be the Grateful Dead. Band tee-shirts may be the money maker, not the records.”
In an example related to the industry, he mentions that McDonalds has distributed 150million NeoPets in their Happy Meals. What then, Master Chef?
Who then are the mammals to watch?
Koster gives us a few that he believes are on the right track to adaptation and survival – Web-based MMOs such as NeoPets, Indie MMOs such as Runescape that emphasize social worlds and user generated content, Aggregation – “Mining the Long Tail is where you want to be,” said Koster, Media companies merging online elements into their content, Entirely web-based publishing/distribution
“Lifestyle Marketing” is the current buzzword and that is where the money is, claimed Koster. “Sell them the tee-shirt.”
This is my take on this exceedingly interesting presentation. Indeed, fat Wookies need to learn to belly-dance.
Notes: All slides from the presentation should be available on http://www.raphkoster.com/ by Monday.
In a study released August 29, 2006, Parks Associates revealed that their study showed there were six distinct segments in the gamer population, not just Power Gamers & Casual Gamers
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