I hesitate even to use the term "DRM," as I suspect I'll get a nastygram from Cory if I do... But in essence, we need a way to generate unlockable demos and provide unlock codes via email to people. I'm happy to have the DRM aspect as loosey-goosey as possible--indeed, I'd =like= you to be able to install the same game on every machine you own, as that's how CD-ROM software works (albeit if there's a checkdisk, you can only run it on one machine at a time). But I'd prefer that you not be able to email the installer for a game and your own unlock code to everyone you know and let them all play it for free... Ideally, their versions revert to demo mode, and if they like it, they buy. That's called "superdistribution," and that's a great idea.

I've been looking into software solutions for the problem recently, and thought I'd post about it--partially in the hope that someone more knowledgeable than I about this will have thoughts on the best solution.

From my perspective, the ideal solution (which doesn't seem to be on offer) works like this:

1. We install some code on our Linux servers, and make calls to it to generate unlock codes which get automatically emailed to customers when they buy a game. It has to be done in an automated fashion, rather than requiring staff time to authorize every new license.

2. We get an SDK which we can distribute freely to third-party developer partners that lets them integrate with our unlock system.... And which allows them to specify what conditions limit the demo. That is, the demo might be time-limited (60 minutes of play), or it might be limited to some number of levels... We don't want "one size fits all," because games vary, and what makes sense should depend on the game, not on our software provider.

3. It should be dirt-simple for the user, and shouldn't require him to hit the net, ever, once the thing is installed.

4. The cost should be controllable; ideally, this means an annual fee, or a purchase plus annual maintenance fee. Some folks want to charge you every time you sell a product, which can get pricey over time.

5. In a related way, it's bad if we have to spend a lot of money (e.g., hundreds of dollars) every time we add a new development partner or game. That is, if the SDK that lets developers integrate with us has to be bought separately by each development partner, that can get pricey--and the alternative is to have our own internal staff do all this integration (in which case maybe only we have to buy once), and that sounds like a recipe for chaos, given the differences and complexities of different games.

6. And of course, in an ideal world, it works for Windows, Mac, Linux, and various flavors of Java as well as native apps.

7. Finally, we should be able to avoid using the damn thing entirely, if we want to. E.g., in some cases, the demo is different from the final application, and we don't want to require an unlock code for the final application--but some licensing scheme to restrict it from being copied hither and yon would be nice.

So here's what I've looked at so far, and my off-the-cuff thoughts as I've done so:

Softworkz's software_DNA is the single product that seems most clearly geared to this kind of shareware publishing model. They handle different demo styles, it's possible to set your license to allow the end-user to install on up to three machines, you don't have to require a net connection, and it supports Java applets. Not clear on whether Linux and Mac are supported. The authentication server doesn't, however, reside on our backend, but on theirs--and even though we continue to "own the customer," that makes us dependent on them. And of course this structure is why they justify the kicker: they charge you by the sale, 50 cents minimum... Which is frankly a lot of money. Suppose we have a $15 game, of which $9 gets passed on to the developer; that 50 cents is 1/12th of our revenue. That's basically not reasonable. If we do go this route, we will have to reword our boilerplate contract to say that DRM fees (capped at, say, 50 cents) are taken off the top before we share the remainder. Which developers will not be happy with, of course.

One positive point, though; we're members of the Association of Shareware Professionals, and Softworkz offers ASP members a free 100,000 licenses before they start to charge. Which is nice, and it would take us a while to run through that many. But still.

Software Shield's pricing model, at first glance, looks friendlier; they basically charge $900/year plus $700/year mandatory support ($300 in the first year). However, the unlock code generator requires an MS IIS server on the backend--which we could do, but that means a second physical box and a second OS for our backend staff to maintain (we run on Linux). (And half the damn Internet runs on some version of -nix. What's wrong with these people?) Also, it isn't clear how licensing works when there's a third party in the mix--e.g., we want to give Game Developer X an SDK so they can integrate with Software Shield... Do they also have to purchase a license? And if so, at the same level as us or at another level? Cheapest level is $300, and if some poor bastard with a little retro side-scroller that's going to sell 300 copies max at 8 bucks a pop has to pay that, what -is- the point? (Of course, there's always the option of going with a separate demo, and just being naked on the full install.) Anyway, I have an inquiry in to find out more.

Agilis's Easy Licensor is one of a class or products that seems to be geared more toward software vendors for large corporate backend systems than for ESD. As such, the site is mucho indecipherable corporate-speak, but it does appear that it could handle much of what we want to do. And as typical for big-company vendors, there's no damn pricing information. I suppose I should make an inquiry, but it doesn't seem like it's the right thing initially--and there's at least one point I loathe. I have to be running a J2EE backend to deploy it. Mind you, I have nothing against J2EE per se; it's a great environment, for an operation that has to provide, say, a large financial transaction system for an investment bank. But we run Linux, ferchrissakes. I for sure don't want to be buying a Sun Solaris box just to operate a demo unlock scheme.

Aladdin is another vendor that seems geared toward software vendors for large corporate environments; indeed, their main product is a USB dongle to verify that you have the right to use a piece of software. No effing way. However, two products--HASP TT plus HASP SL--would do what we want. There is, of course, no pricing information. I have an inquiry in, but my guess is that their model makes little sense for us.

Sentinel is yet another "big corporate vendor," and as with the other such, their site is basically impenetrable. But from what I can tell, the end-user apparently requires a continuous net connection for authentication purposes. Meaning if you're on the plane with your laptop, you couldn't play a game you'd legitimately paid for. Screw that.

Silicon Realms's solution at first glance looks great--$299 fixed fee! But ah, there is certainly a kicker here, too; the back end unlock-code generation scheme is operated by Digital Rivers, and you have to sell via Digital Rivers to use it. Digital Rivers is basically a white label ESD vendor, and takes a substantial chunk of revenues on each sale. This isn't a bad deal for an individual shareware vendor--but it makes no sense for Manifesto. And presumably that $299 has to be paid by each third-party developer who works with us... I don't think so.

And finally, there's ESDNow, a Dutch company. They offer a bunch of things, including stuff we don't need (like hosting and an ecommerce solution, not to mention handling VAT), but their unlock scheme might work... Hard to tell from the site. But again I have an inquiry in.

And that seems to be about it...

Any thoughts or comments are welcome.
posted by Greg at 5:39 PM

Johnny Wilson will be blogging at Game Gospel; essentially, he's been cobbling together reviews and articles about some games we want to offer, and I figured we should put them out there ahead of time. They'll eventually be reformatted for the Manifesto Games site, but for now, you'll find some timely discussion of at least the sorts of games he likes--strategy games, for the most part.

Eleanor Lang, our publicist, will be blogging at Comrade Lang's Little Red Blog. Ellie is mostly a Eurogamer (though also a Civ fantatic), and to give a sense of her street cred as a publicist, she both did the launch tour for the Vertigo line of comics, and acted as both editor and publicist for the Del Rey Impact line that reprinted a whole series of seminal SF novels for a modern audience. She'll be talking about her publicity efforts, as well as her views on other parts of Manifesto's business efforts.

Finally, I should mention Jeff Tunnell's Make It Big In Games; Jeff was a co-founder of Dynamix and founder of Garage Games, is utterly committed to the independent games movement, has been walking the walk longer than I in this regard, and has important and interesting things to say. And to provide a tenuous link to my last post, Jeff revealed recently that he drives a Geo Metro. Me, I take the subway.
posted by Greg at 2:11 AM

Okay, this is just too weird.

Stefan Eriksson, former executive for Gizmondo, apparently crashed his $1m Ferrari while street racing on the Pacific Coast Highway. Actually, he claims he was a passenger, that someone named "Dietrich" was driving, but "Dietrich" ran off before the cops arrived. Which is helpful, as Eriksson's alcohol blood level was high enough for a DWI charge--but of course there's no law against being a drunk passenger.

Eriksson apparently left Gizmondo last October when Aftonbladet (a Swedish newspaper) revealed that he was convicted in 1993 and 1994 on counts of financial fraud and counterfeiting, and was at the times considered the brains behind the Uppsala Mafia, a local criminal gang. (Sweden has a Mafia? Who knew.)

Gizmondo is owned by Tiger Telematics, based in Florida; Gizmondo Europe is now bankrupt, and the US version teetering. At its peak, Tiger Telematics had a market cap of almost $1B (you read the right), but its 1 year return at the moment is -99.193% (you can't make this shit up).

Fuck me, crime does pay. Fucker drives a Ferrari? And where were Gizmondo's investors when a basically pre-revenue company was compensating execs at a level that they can afford Ferraris?

Quasi-hilarious nonetheless.
posted by Greg at 9:21 AM

The mobile games industry has a problem. Although it has grown rapidly and continues to grow, surveys show that in Western markets, fewer than 5% of potential customers have ever downloaded and installed a mobile game. Yet we know that more like 60% of the population does play games of one kind or another; clearly, a much larger portion of the population could be induced to buy mobile games, if they knew about them, could find them easily, and could share information about them. At present, this is too hard.

Let's consider some use cases.

Suppose I'm a mobile game publisher, and I want to promote my games to consumers. However I do that--advertising, PR, whatever--it's difficult or impossible to tell them how to get my games. The navigation path to find a particular game is going to be different on Cingular than on Verizon--never mind Vodafone or Sonera. At present, I'd need to have teeny tiny text in my ad with navigation paths for five or six operators, and that's in US markets alone.

Suppose I'm a gamer, and I find a mobile game I like and want to tell a friend about it--or better yet, provide him with a link to the demo in an SMS, or even buy a copy for him. But I'm using a Nokia phone, and he's using a Samsung phone, so the version of the application on my phone won't work on his--and worse, I'm on Cingular and he's on T-Mobile, so I can't tell him how to find the game on his operator's deck, and if I wanted to buy him a copy, there's no effective way to do so (and no scheme to share whatever revenue that might generate between the two operators).

How would an "ISMGN" solve this? It wouldn't alone, but it would allow publishers and operators to build the tools to solve the problem.

An operator knows what kind of phone you have. At present, if an operator carries a game, it carries different builds of that game optimized for the different phones on its network, and is smart enough to ship you the build that works for your phone. That's a start, and it means that our ISMGN doesn't have to specify a particular SKU; it just needs to uniquely identify the title.

If we had an ISMGN, publishers could advertise a game, providing that identifier. In principle, then, operators could build a system that would allow you to go to their game deck, input that identifier, and be taken to the card that allows you to download that game.

Similarly, publishers could build facilities into games to enable viral marketing, by allowing you to SMS a friend, and including the ISMGN in that SMS automatically. Or by providing you with access to the ISMGN, allowing you to do so outside the application.

In other words, an ISMGN would enable both viral and publisher-to-consumer marketing. And it needn't be complicated: something like JMD-12345. The three characters identify the publisher, the digits uniquely identify the game (five characters give us 1m possibilities, and I'll be astonished if any publisher ever produces more than 1m games).

Of course, you'd need an independent body to assign and monitor the allocation of ISMGNs, allowing operators and publishers to access a database of such. Perhaps this is something the Mobile Entertainment Forum could take on.
posted by Greg at 9:50 AM

It never ceases to amaze me that the industry as a whole always "puts on a happy face" regardless of how things are actually going. Fastest growing entertainment industry in the world! Bigger than Hollywood (if you add up hardware, software, and rentals and compare that total to box-office alone)! Bigger and better and forging gloriously into the future!

Meanwhile, EA, historically the strongest company in the industry and generally regarded as its best managed, saw a 31% drop in net revenues in 2005 and is laying off 5% of its workforce. Atari suffered heavy losses and its future is in doubt, and Majesco is threatened with NASDAQ delisting because it now has under $10m of stockholder equity. Square Enix saw a 67% decline in revenues, and Activision a 30% drop in profits. Even THQ saw an 11% decline in revenues in Q4 05 over the previous year. It seems like only Capcom and Ubisoft are doing well at the moment. (Well, and Vivendi, but that's purely on the basis of one unrepeatable event--World of Warcraft).

In general, the benchmark numbers of the industry were up 6% 05 over 06, a rate of growth that in most industries would be considered excellent news, but is disappointingly slow for ours. And Michael Pachter, the industry's most quoted analyst, is actually projecting a 3% decline over the course of 2006 (although he's optimistic about 07 and 08 when the console transition will be complete).

And indeed, the conventional industry wisdom at the moment is that the current time of troubles are largely they result of Xbox 360 shortages, the notion being that consumers are holding off on purchases of games until they get a wifty new device, and since Microsoft has been screwing the pooch in terms of getting enough boxes onto the shelves, there isn't enough installed base of 360 users to generate adequate sales on that platform yet. And yes, previous console traditions have also produced hiccups.

Naturally, I disagree: Japanese videogame sales have slid more than 40% from their high (which was in 2001), and I believe we're starting to see that trend moving to the West. When even Wall Street analysts (Pachter again), who are not exactly highly attuned to what gamers are saying to each other, start to wonder whether people are getting bored with franchise titles, you start to think that just maybe what developers have been telling each other for years is starting to filter into the public consciousness.

More on Take Two

I wrote about Take Two's trials some time ago; now, it's rumored, Elevation Partners is looking to take them over. That's the Riccitiello/Bono vehicle that created the Bioware/Pandemic superstudio, essentially giving two high-profile (and qood quality) studios access to enough capital to continue development without publisher funding even as next-gen budgets soar. A combination with Take Two would be interesting, but is a potentially difficult one; on the one hand, if you can do your own publishing and distribution, you can retain a higher chunk of the consumer dollar (and even if nothing much else at Take Two is with the powder to blow it to hell, DMA [oops, I mean Rockstar North] is another first-rate studio). (Bloviations by Rockstar publicists and ignoramuses notwithstanding, GTA is not "developed in New York" but in Edinburgh, Scotland. Rockstar New York is just suits.)

But on the other hand, Bioware and Pandemic have existing publisher contracts, which they would either have to fulfill or get out of, possibly at considerable expense. So the short-term gain is likely to be minor. And in general, Elevation has been grooming Bioware/Pandemic as a possible IPO candidate down the road, and adding a (failing) publishing operation to the mix makes the message to investors a whole lot messier. I suspect that a Bioware/Pandemic/Take Two combination would support a lower p/e than Bioware/Pandemic alone. Of course it would be a much larger operation, so the total capitalization might well be higher. And of course, this could conceivably be a back-door route to public market exposure; structure it as a merger into Take Two, with Elevation getting a big chunk of post-merger equity, and presto, you are already public.

The Decline and Fall of the Independent Developer...

Continues. Now even Lionhead is in buy-out talks, which would be a shame. Sure, Molyneux overpromises and underdelivers, but at least he tries to do innovative work, and if Lionhead is crammed into the usual studio system, you have to assume he won't be indulged in future.

At this rate, it looks pretty obvious that, barring some miraculous change in the industry's business model, there just aren't going to be any high profile independent developers left in a few years' time.

So, uh, yeah. Let's work for a miraculous change in the industry's business model.
posted by Greg at 3:42 PM