Social Mobile Gaming - Stockholm School of Economics

Social Mobile Gaming
A framework for value creation and business strategy
ROBERTO
HOYOS
MORALES
Master of Science Thesis
Stockholm, Sweden 2010
Social Mobile Gaming
A framework for value creation and business strategy
ROBERTO
HOYOS
MORALES
Master’s Thesis in Media Technology (30 ECTS credits)
at the Media Management Master Programme
Royal Institute of Technology year 2010
Supervisor was Christopher Rosenqvist, SSE
Examiner was Nils Enlund
TRITA-CSC-E 2010:043
ISRN-KTH/CSC/E--10/043-SE
ISSN-1653-5715
Royal Institute of Technology
School of Computer Science and Communication
KTH CSC
SE-100 44 Stockholm, Sweden
URL: www.kth.se/csc
To Teresa and Roberto Sr., who were convinced that nothing worthy would ever come out of those “silly” videogames we were too fond of—but kept them on the Christmas list anyway. In the hopes of respectfully prove them wrong. Roberto Hoyos Morales Spring 2010, Stockholm Roberto Hoyos Morales Social Mobile Gaming A FRAMEWORK FOR VALUE CREATION AND BUSINESS STRATEGY
Social Mobile Gaming A FRAMEWORK FOR VALUE CREATION AND BUSINESS STRATEGY
Abstract ‐ Attempts at sociability and mobility have been made from the outset of gaming, however, for technical and business‐wise limitations, such efforts have not come to fruition. To reconcile the divides on the rapid evolution of gaming and to reduce the risk in emerging media like that of Social Mobile Gaming, a comprehensive analysis of what values a gaming offering can deliver to consumers is required. The result is a framework of values that comes in a layered fashion: those of gaming use immersion as an overarching theme, then they are complemented by the customization values of sociability, and finally, connectivity and multi‐device requirements become a central value for mobility. The role of manageable learning curves and downloadable content is also explored. In studying these values, the configuration map of value‐constellations has yielded publishers and console manufacturers as the most prominent participants of the constellation. Other actors, moreover, can complement the social mobile gaming offer, namely, phone manufacturers and network operators. Keywords: social videogames, mobile gaming, immersion, customizability, interactive entertainment, gaming value‐constellation, console manufacturing. Mobilt Spelande I Sociala Media En ram för värdeskapande och affärsstrategi Sammanfattning: Försök till gemensamhetsskapande och mobilititet i spel har länge gjorts, men resultaten har låtit vänta på sig av tekniska och affärsmässiga skäl. Det krävs därför en övergripande studie av de värden ett spel kan ge konsumenterna för att förstå den snabba spelutvecklingens problem och reducera de inneboende riskerna i nya spelmedia, t.ex. sociala mobila spel. Detta arbete har resulterat i ett ramverk av värden som strukturerats i flera lager: spel med ”immersion” som ett övergripande tema, spel vars värden förstärks av kundanpassat gemenskapsskapande, och slutligen, spel där uppkopplingsbarhet och flerplattformsanvändning blir centrala värden för mobilitet. Rapporten beskriver också den roll hanterbara inlärningskurvor och nerladdningsbart innehåll har. I studien har värdekonstellationernas olika konfigurationer gett vid handen att spelförlag och konsoltillverkare är de centrala aktörerna. Andra aktörer, i synnerhet mobiltelefontillverkare och nätoperatörer, kan därutöver komplettera de sociala mobila spelerbjudandena. Nyckelord: sociala videospel, mobilt spelande, immersion, konsumentanpassning, interaktiv underhållning, värdekonstellationer, konsoltillverkning, TABLE OF CONTENTS 1 INTRODUCTION
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Problem Area
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Purpose and Thesis structure
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Definitions and Delineations
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Expected Contributions
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Methodology
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Background
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2 THEORETICAL SCAFFOLDING
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Value attribution Theory
13 Market systems theory
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Immersion and The Experience Economy Theory
20 Human-Computer Interaction Theory
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CONFIGURING OFFER AND MARKET
Perceived values of the gaming offer
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Main Industry Activities
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Market structure
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4 SOCIAL GAMING
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12 Previous Research
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3 GAMES:
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Nihil Novum sub Sole
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Expansion of Content
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On-Line Gaming Perceived Values
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On-Couch Gaming Perceived Values
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The Mobile Couch
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Constraints
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MOBILE CONTEXT
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6 BUSINESS IMPLICATIONS
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Impact on the Value chain
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7 CONCLUSION
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Possible Critiques
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Immediate implications of Social Gaming
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70 Further Research
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APPENDIX
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REFERENCES
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AND BIBLIOGRAPHY
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79 Other Sources
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1 INTRODUCTION
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This chapter introduces the economic, cultural, and sociological relevance of gaming, and enunciates an undelivered, yet continuously sought objective: that of adding mobility and sociability to games. It seeks to answer three fundamental questions within a technoeconomic framework in which the user is given a central role in value creation. It continues with expected contributions that can be derived from the utilization of such framework. The chapter provides the methodology followed to structure this thesis and wraps up with a brief background of gaming. Not long ago, videogames were the poster child for seclusion and alienation. 1 For F
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the most part they originated as an afterthought of the computing revolution; a nascent but lowly industry. No one would have anticipated that in a few decades its revenue would surpass that of the older, more established industries: gaming is now bigger than Hollywood and bigger than the Recording Industry. Today owning a console can be an accurate descriptor of purchasing power and prosperity, and consumption for this entertainment medium has remained steady despite the recent global financial meltdown. As result, videogames pushed up demand for technologies like surround sounds systems, high definition TV sets and high density storage mediums, among many others. In doing so they changed the setup of living rooms across the world, and have become a cultural phenomenon on their own right. Attempts at sociability and mobility have been made from the outset of gaming, however, for technical and business‐wise limitations, such efforts have failed. Today, this new industry, that of Social Mobile Games, is possible. Right now big actors have jumped into the social networking bandwagon: Social Mobile games are just the next natural step. 2 F
There is disagreement as to whether or not this is a myth. Some propose competition and collaboration are integral part of games, and as such, open to sociability (Newman, 2004). Fair or unfair, the stereotype has remained as a negative label in the perception of gaming. 2 The Economist. “ A world of Connections ” Special Report on Social Networking. Jan 30, 2010 [Jan 2010] 1
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1 1.1 PROBLEM AREA
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That, which Schumpeter termed creative destruction, 3 is present in a large degree in F
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the gaming industry. In order to create value, sometimes some of it must be destroyed, as old technology gives way to new technology. This, coupled with the speed in which the creative destruction occurs, makes the industry very volatile. Every game released into the market has a expiry date stamped on it. The sheer speed in which game development improve, literally year after year, creates an enormous pressure on developers, publishers, and manufacturers to innovate, and to do so in a short time span. An environment like this has created a market space in which financial success for a title is defined in the first critical 3‐6 weeks after its release, where 80% of all sales is expected. For games in which development often takes around 2 to 5 years—and multimillion dollar investments—launch windows are paramount. A game like Call of Duty: Modern Warfare 2 was developed in under $50 million, but allotted a much larger launch budget of $200 million. 4 F
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Failure to meet market demand can effectively bankrupt established actors, as fortunes are literally made or lost in a matter of days. Some industry practices are intended to minimize this risk. For instance, when planning a title release, launch windows are carefully selected. While AAA titles are expected to reach the shelves on the fourth financial quarter (to coincide with the Christmas shopping spree), other titles shy away from big releases, to avoid been drowned out. Examples such as these have defined the gaming industry for better or worse. To reconcile the divides that this rapid evolution has created and to reduce the risk in emerging media like that of Social Mobile Gaming, a comprehensive analysis of what values a gaming offering can deliver to consumers is required. This will benefit both users and entrepreneurs. 1.2 PURPOSE AND THESIS STRUCTURE
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This report analyzes the social dimensions of gaming applied in a mobile setting, and the implications in terms of business strategy. The goals in this research report are three‐fold: Schumpeter, J. “Capitalism, Socialism and Democracy,” 3rd edition, Harper Perennial, 1962. Creative destruction is a concept that describes innovation and progress, specifically radical innovation. 3
4 Fritz, Ben. “ Video game borrows page from Hollywood playbook : Call of Duty: Modern Warfare 2 gets blockbuster treatment,” Los Angeles times, Nov. 18. 2009 [web Feb 1, 2010] HUU
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2 1. To study activity‐type value constellations in the existing gaming industry and a prognosis of that of Social Mobile gaming. 2. To elucidate a theoretical framework of consumer value attribution of games, in particular one with focus on social and mobile considerations. 3. To apply said framework and constellation map to derive practical business considerations and increase consumer value. These aims can be summarized in the following research questions: 1) How is the videogame market configured? 2) Which criteria are important when talking about Social Mobile gaming? 3) How could the above lessons be applied to concrete business situations? To this end, the structure of the report follows three levels: it identifies major actor/activity‐types in the value‐constellation of the gaming industry, then it briefly describes their core functions and the relationships between them. The second level explores the perceived user values around the general concept of videogames, to subsequently subdivide the analysis in the duality of hardware and software, and exploring each underlying element. This is expanded to include social implications. Finally, the values extracted from the previous levels are contrasted to a mobile space to provide business significance of this emerging medium. 1.3 DEFINITIONS AND DELINEATIONS
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This report is mainly structured around value creation, therefore it is user‐centric. The perspective used in this report is that of technology being an enabler for users/consumers to themselves create value. As such, the user is regarded as an engaged and active element in value creation by bundling several products and services into an offering. Through this line of reasoning, concepts like “wireless” are neither restricted to a specific device (such as a mobile phone) or individual operators, nor is it inherently tied to specific hardware or network architectures in place. These factors are taken into account but are not regarded as determinants of market evolution. This was demonstrated by the Betamax vs VHS format war; Betamax was technologically superior for a number of reasons, but the consumer 3 regarded VHS as providing greater value. Technological performance alone is not a guarantee for success. Discussing hardware specifics without a user application context has little or no bearing. Specifications such as “2 MHz processing speed, 16‐bit architectures, 4K RAM, 72K ROM” do not mean much. Any low end mobile phone today has hundreds of times that processing power and memory, but those were the specs of the guidance computer of the Apollo Space Program that put man on the moon, a clear demonstration that the user value of hardware comes from what it is used for, and one of the strongest fundamentals to prioritize consumer value attribution over technical details. For the purposes of this study, videogaming takes a narrow approach: it concerns only electronic interactive entertainment with no explicit monetary rewards ( Figure X
1 ). By this measuring rod, gambling, which certainly counts with virtual electronic X
outlets, is out of the study, as it has clear monetary incentives. Interactivity also sets videogaming apart from contemplative media, such as TV and cinema. The personal computer platform is not considered either in this study, as it is more strongly associated with productivity than entertainment. The PC platform is not designed ex professo for entertainment, as gaming consoles. Besides, ever since the 90s, the gaming market shifted from the PC to consoles, as their computing power increased (Wesley, 2007). Pervasive gaming, which can be described as a GPS‐aided scavenger hunt, while social, is not considered within the study, as it is strongly shaped by locale. The terms game, content and software are used interchangeably to define a gaming title. While a game title often comes as a physical product, it is the platform designed to run it that will be more associated with hardware. The term selected to define this platform is hereon called a console. The console gaming segment is the main focus from which the value constellation map and the consumer value attribution criteria will be derived, because it is a more mature and established industry segment. Given the wide array of titles and hardware platforms, itemization to specific genres or brands is meaningless; a leaf under the microscope does not provide an understanding of the forest. Also, in order to avoid fragmenting game offerings in terms of social groups, the framework to evaluate games and their entertainment value should be genderless and inclusive. Games are not isolated products from the rest of the entertainment spectrum; they are integral part of the living‐room revolution, that which has provided the components for a more immersive 4 experience, and as such, respond to broader consumer preferences, not restricted to age or gender. Figure 1. In order to study games, a “taxonomy” of digital experiences is proposed, note that pervasive gaming and gambling, as well as the PC platform are left of the scope of this study. 1.4 EXPECTED CONTRIBUTIONS
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This report expects to shed light into an emerging new interactive media space as that of social mobile gaming. The scope of the report is ample enough to have a clear picture of the configuration of such space and its actors, and deep enough to obtain practical implications on business strategy. However, in its pioneer ambitions, it also recognizes the need, and certainly begs for, further research on the subject, as it uncovers threads that could be followed by ensuing researchers. Another relevant expected contribution is to provide a method to undertake the study of an emerging media space with enough detail and celerity as to blend the aims of a visionary and the practicality of a planner. 5 It also hopes to increase the academic relevance of the field of interactive entertainment, which was, for a long time, neglected in academic circles. 1.5 METHODOLOGY
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The gaming industry evolves very rapidly ( Appendix 2 presents a compilation of X
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console generations). In retrospective, the logic in which milestones occurred is self‐evident; however, foresight is significantly more difficult. The future is always bound to be an inscrutable business, but this do not demerit the need for sophisticated attempts to rein this uncertainty. This research, to a high degree, rests in interviews with leading actors in the field (developers, entrepreneurs, executives) and those around the bullring (journalists, opinion makers, academics). Their forefront insights have all led to the emergence of a pattern that would have been difficult to grasp merely from theoretical standpoints. The principal aim of the interviews was to acquire knowledge on the practical issues facing the industry today, as well as major thoughts on its future from the very actors shaping this market space. There were two rounds of interviews. The first was a series of interviews conducted in the Spring of 2008, as part of a consulting exercise for a prospective gaming entrant to the Swedish market. Most were conducted in a face‐to‐face, controlled environment, in Stockholm. Phone interviews were conducted only when the interviewee was residing abroad and a physical meeting could not be arranged. The second round of interviews was performed in the Spring of 2009. Recordings of other interviews were obtained from the Center for Information and Communication Research group at the Stockholm School of Economics. The choice of interviewees is an attempt to obtain a cross‐section of academy (1 professor of management, 1 professor of social media) and industry (1 CEO, 3 marketing managers, 1 developer, 1 game analyst), and opinion makers (1 journalist, 2 editor in chiefs, and even 1 curator, for an IT museum). In all, there are 12 interviews. The choice was not restricted to gender, though there were no female interviews. For all interviews the author kept notes of the topics explored; the questions being tailored to their specific area of knowledge, grouped along the themes of challenges facing the industry and avenues worth pursuing when dealing with sociability and mobility. Only phone interviews are recorded. This thesis is as well supported in business cases and consultancy reports. They were useful primarily to understand the evolution and major trends of the industry, as well as to provide concrete business figures. Other authoritative sources in the media and industry were continuously being watched to smooth rough edges on 6 the repot every now and then; they confirmed or discarded some ideas. While the sheer volume of media articles, newsletters, mailing lists, press releases, etc., could constitute a report of its own, in the sake of clarity, only the ones most used are sourced. When the list extends considerably for a single publication, the publication is solely sourced as a major acknowledgment. There are three main components for the theoretical scaffolding in which this thesis rests. The first concerns technology. Despite the lack of academic literature specific to gaming, publications pertaining to computer science (i.e. human computer interaction), are used as a good approximation, given the similarities of game development with that of any software product. The second component is found on marketing and business fundamentals of media companies, which are necessary to complement a technoeconomic analysis. The third component concerns the field of mobility. In particular, this thesis follows the spirit of research done on markets‐as‐
networks systems and other constructs to define value. Finally, a good portion of the research rests on raw data. The main source is VGCharz.com, which provided a dataset to study sales volumes across other variables like manufacturers and release dates. It pertains to the public domain. It appears that the great paradox of media companies today is to be highly secretive of their internal figures. Given its high‐risk and volatility, these financial figures are handled close to the chest. To get some understanding of the economics of the industry, aggregated data on volume sales can be used to infer some statements. Because of the explorative nature of this report (social mobile gaming is as much a theoretical construct as it is a business promise) the aim is not for indisputable exactness, but rather, just to “not being that far off.” 1.5.1 NOTES ON PREVIOUS RESEARCH
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This report is an extension of research conducted for Wireless@KTH, a research center that focuses on mobile technology, in Kista, Sweden (Andersson et al., 2010). Under the supervision of Professors Christopher Rosenqvist and Per Andersson, the author could further explore themes encountered during a consultancy exercise for the Media Management course. Professors Rosenqvist and Andersson were invaluable in securing interest from Wireless@KTH in the project, and ultimately, in providing the opportunity for the author to pursue his thesis project. The author, however, acknowledges himself as the sole culprit for both the linguistic and narrative failings of this research, as well as for the arguments put forward here. This enhanced report is no way aiming to be the authoritative and definite source for social mobile gaming, but rather, it hopes to encourage debate. The author is also indebted to Jan Björk, a colleague researcher and self‐declared gamer, for the lively discussions and pointers provided to the author in order to “stick to the 7 topic.” For interviews in which the author could not be present are clearly indicated in the references section. 1.6 BACKGROUND
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1.6.1 MONEY TALKS
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On a global scale the videogame industry is bigger than the recording industry, and it is growing fast. 5 In the US alone revenues from videogames surpass F
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Hollywood’s. It is worth USD$ ~45 billion globally (as of 2009). This, however, is 6
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only the market performance as a whole. A more convincing snapshot of consumer demand can be found on individual title performances. Take videogame and Hollywood titles, for example. One summer blockbuster in particular, [Batman] The Dark Knight, had an opening day box‐office revenue of 67 million dollars in 2008, breaking the previous record held by Spiderman‐3. 7 The game Call of Duty 2: Modern Warfare, by comparison, completely F
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dwarfed this amount: it had sales, in the first 24 hours, of 310 million dollars. This is a feat all the more impressive when taking into account that it occurred in the midst of the worst financial recession since the 1930s. Moreover, the proliferation of consoles can be seen as an indicator of purchasing power and prosperity, as television sets once were. In 2006, 44% of US households owned at least one console. In 2009, 50 million consoles were sold, and the proliferation of consoles rose to 60%. 8 This is partially explained by the fact that the F
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age of the gamer is rising, as the generation of gamers in the 80s is now entering the workforce and have higher purchasing power in turn (Dhar, 2005). 1.6.2 THE LIVING ROOM REVOLUTION
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Gaming has brought a transformation in societal demand for consumer electronics. It has changed the set‐up of living rooms across the world, as it pushed mainstream consumer demand for higher‐performance entertainment devices, like surround systems and high definition television sets, among many others (Rajnikant, 2006). A detailed list of technologies is presented in Appendix 3 . X
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Global Entertainment and Media Outlook: 2007‐2011 (2006p). PricewaterhouseCoopers. “ Hollywood breaks revenue record of $9.68 billion ,” The Boston Globe. [web Jan 06 10] 7 Singer, W. Peter, “ Video Game veterans and the new American Politics ,” Brookings, for The Washington Examiner, Nov 17, 2009. [web Jan 06 2010] 8 Takahashi, Dean. “ Gamer Population Surges ,” GamesBeat, www.games.venturebeat.com , based on Deloitte’s State of Media Democracy Report. [Web 6 Jan 09] 5
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It is not surprising that gaming consoles benefitted from the home computing revolution of the late 70s and early 80s. The most emblematic consoles of that era were the Atari 2600 (1977) and the Nintendo Entertainment System (1983). They both featured the 6502 MOS processor, a relatively cheap but capable CPU. Soon they were to be introduced to households, en masse. However, it a short time span, gaming platforms would demand more and more computing capabilities, turning them from inadvertent electronic free‐riders, to decisive promoters of processing technology. In the late 90s computing processing capabilities virtually exploded. Today, 7th generation consoles like the Playstation 3 feature cutting edge hardware and multi‐core processors. As a subset of processors, graphic cards stand as a category on their own. They are not general purpose processors, but dedicated hardware that optimizes graphical output. They were a significant improvement in the transition from 2D to 3D images, and since then graphic cards are one of the most tangible demonstrations of how gaming shapes electronic consumer demand; ever since the late 90s they have become a staple of videogames, often defining the bare minimum hardware requirements a particular piece of software needs to run in. The early 00s also saw the introduction of high definition television sets into mainstream needs. There were commercial prototypes of LCD as early as 1991, and plasma screens and LCD followed in the next decade. By 2006, LCD television sets have overtaken plasma television sets in overall sales. Games and home theater systems account for a significant fraction of these purchases. Home theater systems represented the possibility of translating the cinema experience to the living room space. Videogames, as an interactive entertainment medium, have expanded this concept to permit higher immersion—the possibility for the user to feel inside the gaming space—and to a greater extent have incorporated home theater systems into their own consoles. Higher definition was not only pursued in graphics, nevertheless; sound also got a boost of its own through surround sound standards. Along with increased graphical and sound capabilities, demand for higher density storage media was increased. Optical disks, like the CD, were a milestone in the complete digitization of entertainment. Improvements, such as the DVD, were adopted by the gaming industry to provide content. However, as games grow more and more complex, more amounts of data require storage. Just recently, Blu‐Ray emerged as a new optical disk standard for high density storage. 9 1.6.3 SHAPING POPULAR CULTURE
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Though games were perceived as having a low cultural status, today a new generation of scholars, with gaming backgrounds of their own, are bringing this medium to the forefront (Mäyrä, 2002). In media, games are already been portrayed as an acceptable form of entertainment, and games themselves into a cultural phenomenon. The Big Bang Theory, among the top 20 most popular primetime shows in the US, 9 heavily references games and F
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videogame culture. Game soundtracks, like those of the Castlevania series of games (by Konami), are becoming available as standalone music products. 10 In South F
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Korea the game Starcraft (Blizzard, 1998) is almost revered as a national sport, with gaming tournaments being televised and capturing a significant amount of viewers, as well as sponsorships from software and hardware giants such as Samsung, Microsoft, AMD, among others. 11 Games, like America’s Army and Gator Six, are the F
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most successful recruiting tools for the United States Army. 12 F
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1.6.4 SOCIAL DIVIDES
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Not everything is rosy in the picture, however. The adoption of videogaming technology has not been uniform along demographic groups (Krotoski, 2004). There has been a generational divide as well as a historical gender divide (Huang, 2008). Videogames have been strongly associated as a male endeavor, though the specific age group has fluctuated between children and young adult populations (Mäyrä, 2002). In the early 80s Nintendo based its corporate strategy to target 8 to 14 year old children. Games for this platform were colorful and appealing to child sensitivities. Competitors, such as Sega tapped the adolescent segment, and capitalized on the “edgier than Nintendo” campaign (Taylor, 1998). As the “Nintendo generation” has grown up, the content of games has changed to suit modern tastes. Themes, storylines, humor, interactivity, and political incorrectness as well, have all pushed the limits in terms of content 13 . Women, as well, are historically underrepresented F
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as videogame users. However, their participation in this new media has been growing steadily (Perez Martín, 2006). Women’s preferences tilt towards role playing games and problem solving scenarios; those that encourage self‐reflection, social interaction and proficiency (Krotoski, 2004). Exploring social interactions is Nielsen ratings for week of December 28 . USA Today. [web Jan 06 2010] World of Warcraft Soundtrack Collection . Amazon.com 11 World Cyber Games. Official website . 12 Singer, P.W., “ War Games ”, February 22, 2010. Foreign Policy. [web March 1, 2010] 13 Thompson, Clive. “ Learn to Let Go: How Success Killed Duke Nukem ,” Wired. December 21, 2009 [web 14 Jan 2010] 9
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10 one of the main motivators for women to engage in online play (Krotoski, 2005). Advancements such as these had closed the gap in the gender divide. SUMMARY
Videogames have taken root on consumer’s purchasing decisions and they now represent a market that rivals—and surpasses—traditional entertainment industries. The growth in this segment not only pushed up demand for higher performance electronics, but also remained steady despite a very adverse economic situation. The outlook is optimistic, as the market continues to grow and the social divides show signs of narrowing. However, this market is volatile, and frayed with risk. Games are easily drown out in the search for an uncertain financial success that is defined in a matter of weeks after a release. For projects than run over years and which hefty costs associated, a miss can potentially bankrupt a company. This risk, along with previous technical limitations have prevented social mobile gaming from taking off. Now it is technically possible, but business limitations still exist. Building user‐centric value attribution framework for social mobile gaming over sound theoretical models and insider’s insights is an attempt to provide a methodology for the study or new entertainment spaces. It is hoped such study can provide concrete strategic advice on how to create value in the emerging medium of social mobile gaming. 11 2 THEORETICAL
SCAFFOLDING
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This chapter presents the most relevant theories, in the fields of marketing and human computer interaction, that best provide a sure‐footing from which to study a social mobile gaming offer. There are three main themes among these theories. The first is that of the experience of immersion. The second is the central role of the user/consumer in creating value. The third is the importance of shifting from an Industrial Organization perspective to a Markets‐as‐networks focus as a better abstraction of what the market configuration is. 2.1 PREVIOUS RESEARCH
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Social mobile gaming is not a mature industry. In fact, it barely exists as a theoretical construct, but the great promise it could provide make any attempt at tapping it worth the effort. Little previous research is done on this area, if at all. A possible explanation is that research is easier in an after‐the‐fact fashion, unearthing evidence and connecting the dots, where the researcher is on more solid ground taking the role of a historian, or a forensic detective gathering evidence. That is the nature of hindsight. Foresight is a different manner altogether. It needs to anticipate events that may or may not happen. One can only approximate, at best. Different pieces of a bigger puzzle can be utilized to form a prototype of what things might look like, and then derive some lessons and possible courses of action. The main theoretical models used in this report are to be found in the fields of computing (chiefly among them, Human‐Computer Interaction) and marketing (i.e. value attribution theory). The common denominator these model possess is that of the consumer as the central element. 12 2.2 VALUE ATTRIBUTION THEORY
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2.2.1 CUSTOMER VALUE
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This thesis report utilizes a specific standpoint when it comes to define “value.” The concept of value is not taken in the context of organizations alone; value is not defined within the boundaries of a company. The preferred definition of value for this thesis work is taken from the perspective of the organization’s costumer. If value would have been the result of an organization’s introspective analysis of a balance sheet, the role of other competitors would be completely ignored. A customer’s perspective on value widens the scope of a product/service to include other actors, in competition and cooperation, since purchasing decisions are heavily influenced by the amount and nature of other offerings in the market. In particular, value is defined by the utility customers obtain from an offering, and therefore, this value is not static, objective and rigid; it varies depending on the context in which an offering is used. To explain how value is dependent of context, a model to derive value from utility is presented by Woodruff (1997), in the form of a customer value hierarchy ( Figure X
2 ). The hierarchy states that the customer has a specific end to achieve by X
acquiring/consuming a product/service (hereon called offering). In some circumstances the specific end has a low level situation use, in which the satisfaction the customer receives from the offering is an immediate result of the attribute of a product (i.e. the detergent performs as expected: the clothes are clean). But the customer objective may become less and less immediate, as the result of an offering can achieve higher, ulterior goals (i.e. Are the clean clothes to be used in a job interview where cleanliness would be synonymous with professionalism? Are they medical garments in which tidiness impede bacterial proliferation? Is the detergent intended to preserve an apparel item for future generations?). 13 Figure 2. Customer Value Hierarchy Model. Source: Woodruff (1997) It might appear that the utilization of different contexts to define value could lead to increased complexity, but this is not the case. In fact, it helps in understanding the transition of games from a mere utilitarian perspective (i.e. how to spend 2 hours cost‐effectively, compared to other entertainment media offerings, like watching a film or reading a book) to a more emotional, subjective dimension (entertainment for the mere ludic joy of an experience). This homogenizes to a large degree the increasing diversity of game genres without the costs of itemizing to individual titles. Another rationale to support a customer‐centric model for value is to use a marketing orientation model (Jobber, 2007). The marketing orientation model is best described in contraposition with a production orientation model ( Figure 3 ). The X
X
production orientation model, according to Jobber, works on two suppositions: the first is that of value as a function of costs, the second in defining a business in terms of a product produced. It can be succinctly summarized in “what we have” and “let the user conform to our final product.” Jobber argues that this focus is ill‐fated, as this models disincentives change, and incentives complacency instead. Moreover, this view fails to recognize that products and services have all sort of substitutes 14 that can be hard to anticipate from such a narrow perspective. The fate of AmTrak, the American Transport company, to spot competition from coaches by being too focused on the “rail business” is a well‐known example. The marketing orientation model, by contrast, focus on customer needs first, and forces companies to adequate their production processes in turn, which include increasing proximity with the customer and keeping a close eye on competition. Change under this model is welcomed, and innovation rewarded. These two premises are the most compelling justification to use a marketing orientation model for a highly innovative and ever changing industry like that of videogames: start with customer needs. Figure 3. Marketing Orientation Model. Customer as the center of value creation process. Source: Jobber (2001) 2.2.2 VALUE CURVES
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As Social Mobile Gaming offerings take shape, the concept of new market space is introduced (Kim & Mabourgne, 1999). The idea of new market space can be compared to that of a unique set of offerings the company has as a competitive advantage over market rivals. This competitive advantage is defined graphically in what Kim & Mabourgne term a “value curve” ( Figure 4 ). The set of offerings is X
15 X
com
mpared to other com
mpetitors (w
which reprresent a market m
stan dard) to obtain o
a relaative performance (h
high or low
w). The mo
ore these curves c
loo
ok similar to each otheer, the morre undiffereentiated th
he offering is. It is dessirable thatt these curv
ves look disssimilar, prroviding th
hat the reesulting prroduct is more adv antageous to the con
nsumer and
d the compaany. w
a set of o new critteria, will use u a techn
nique by Kim K
and Social mobile gaming, with bourgne (11999) to add
dress the ““tuning” off its offerin
ngs. Their ttechnique iis based Mab
on ffour questiions: 1) Wh
hat factors should be reduced below the in
ndustry sta
andard? (i.e.. low cost carriers do reduce many m
serviices to ach
hieve comp
petitive priices); 2) Wh at factors can be raissed compaared to ind
dustry standards? (i.ee. in luxury
y items, vice, despiite high prrices); 3) What W
factorrs should b
be eliminatted that quaality of serv
the industry currently c
f
follows? (i .e. businesss class an d diverse fleet for lo
ow cost W
facto
ors can be created th
hat the industry doees not hav
ve? (i.e. carrriers); 4) What learrning manaagement sy
ystems for u
universitie s). Figu
ure 4. Value cu
urves and marrket space. Vaalue curves arre a graphical representatio
on of the way a comp
pany configures offerings to consumerss. A distinct va
alue curve fro
om that of the market create
es a new mark
ket space. Sou
urce: Kim & M
Mabourne (19999)
16 These four questions are also applied to the gaming market. The basic configuration of elements comes from the software and entertainment components of gaming. It is shown that as sociability and mobility are added to the mix, some of these elements need tuning in the value curve. This configuration creates a new market space, but it also has deep repercussions on the gaming industry, as will be shown in this report. 2.2.3 CORE COMPETENCIES
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Tuning value curves and creating new market space are closely linked to the role of strategy, since it defines the specific sustainable difference that is necessary to outperform rivals. Considerations for some of the actors described in this thesis will be outlined. In this regard, the author recognizes the proposals of Michael Porter in the illuminating essay “What is Strategy?” (1996). Core competencies will be the method by which “specialized” activities in the market can be obtained. There will be a natural fit between complementary activities that will configure the initial picture of the participants in the “gaming market map”, as well as the nature of other participants who might jump in when all mobile considerations are in place. 2.3 MARKET SYSTEMS THEORY
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2.3.1 MARKET AS NETWORKS
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This research, and most of the market models used herein, are indebted to the Markets‐ as‐Networks (MAN) approach, in that relationships are a central component to understand market behavior. The decision to utilize the MAN theoretical scaffolding is the result of a self‐evident, practical consideration: the production of a game has become an increasingly complex affair. It will be considered erroneous to encapsulate videogame production (and its market) as a garage‐like operation, if it ever could be considered as so. 14 That this increase in F
F
complexity occurred in such a little time meant that actors from a variety of backgrounds are involved in this industry. The MAN framework is specially tailored to tackle such macro context into a manageable network (Mattson, 1997). In the MAN tradition, competition is not the sole method to understand relationships among firms (Easton, Burrel, & Rothschild, 1993). Cooperation is a theme that is explored among the strategic applications outlined in this thesis project. Ritter et al. (2004) carry on with the continuum between 14 Thompson, Clive. “ Learn to Let Go: How Success Killed Duke Nukem ,” Wired. December 21, 2009 [web 14 Jan 2010] HUU
UUH
17 cooperation/competition and expand it to say that in a complex network, the type of relationships, and the management of the network itself is dependent on the relative power of the actors with one another. This is fundamental to sustain the proposition of a central role of some actors when the gaming network is presented. 2.3.2 VALUE CONSTELLATION
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A useful way to map a complex business environment like that of videogames is to use what Normann & Ramírez (1993) termed value constellation. The added value of this theoretical model is that it portrays the market in a more modern and realistic fashion than that of the industrial organization model. There are 4 main propositions in their reasoning. The first is that any product or service is the result of aggregated economic activities (exchanges in products and services) between myriad of actors. The second proposition states that the distinction between products and services is a vestige of industrial organization thinking, and that modern technology has virtually erased the boundaries between product and service (i.e. the IT and the automotive industry being illustrative). Following this reasoning, a third idea is put forward: that value is not a prepackaged product that is pushed out of an assembly line (a value chain) ready to be consumed; rather, it is the consumer the one who is able to assemble its own value from the company’s offerings (i.e. the IKEA model). The fourth idea permits to wrap all those activities around offerings, and these offerings in terms of activities. Most importantly, it is inferred that the relationships can have a central element in the constellation; that there could be a lone activity driving the rest. There are two shortcomings for this value‐constellation model, however, but both easily surmountable. The first problem is that it requires a high level of itemization for all actors involved; it requires actual naming for individual participants. The second is that it is only a snapshot of a specific point in time; past and future dynamics are difficult to infer. In an market environment like that of gaming, such itemization would not hold the passage of time: the industry landscape can become unrecognizable in a matter of years if one were to assign names in single snapshots. To overcome this, an improvement in the model is used: it maps the market in terms of activity‐types, which is a convenient way to group a series of endeavors without sacrificing consistency. In essence, it is an abstraction, a step back of a full “snapshot,” and it does hold the test of time, as some activities change little over the years, but are merely performed by different companies, which come and go in more frequency than in other, more mature, industries. 18 2.3.3 VALUE CREATING NETWORKS
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Changes in the structure of the value constellation are inexorable, nevertheless. Some of the strategic considerations described further down on the thesis often call for a reconfiguration in the relationship of the activity‐type actors. To accommodate for these changes with any hope of certainty, a model for value‐creating networks, proposed by Kothandaraman & Wilson (2001), is used. The aim of the value creating networks model ( Figure 5 ) is to define the nature of X
X
the interrelationships among three principal components. It assumes 1) that the goal of the companies is creating superior customer value, 2) that each has differentiated core capabilities, and 3) that their relationship is based on those previous elements. Even though the model by Kothandaraman & Wilson is focused on traditional value‐chain production, it can as well be applied to a value constellation. Figure 5. Model for Value Creating Networks. Source: Kothandaraman & Wilson (2001) 19 2.44 IMME RSION AND T HE EX
X PERIEN
N CE EC
C ONOM
MY
ORY
THEO
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Onee of most important i
aspect of videogame
v
es is that th
hey provid
de experien
nces. To und
derstand th
he nature of these experience
e
s the mod
del put forrward by Pine & Gilm
more (19988) is sufficiient to starrt building the theoreetical fundaamentals of o social mob
bile gaming. This model ( Figure F
6 ) is consttituted by
y four elements: X
X
enteertainmentt, education
n, esthetic value and
d escapism.. Pine & G
Gilmore arg
gue that the most desiirable experience is one that encompassses all of them, or at least atteempts to co
over the m ost. This m
model is su
ufficient to undertake the study of user valu
ue attributtion of gam
mes. The main m
takeaw
way is the recognitio
on of the value v
of actiive particip
pation—gaames are part p
of interactive media m
afterr all—and that of imm
mersion. Im
mmersion has been chosen as a one of the most salient concepts und
derlying th
his researcch. To focu
us on imm
mersion, crriteria tak en from Human‐
H
Com
mputer inteeraction ap
pplied to in
nteractive entertainmeent media aare used. Fig
gure 6. The fo
our realms of an experience
e. Source: Pinee and Gilmorre (1998) 20 One of the major lines of reasoning for Pine & Gilmore is that experiences have an inherent business value of their own: as products and services become commoditized, their economic value becomes undifferentiated. In order to increase the value of their offerings and reduce the risk of price‐competition, staging experiences becomes fundamental to provide a service that is memorable, appealing to the senses, and personal. This thesis project also carries on with the idea of sensorial feedback and personal (customizable) interactive experiences to increase the appeal of the gaming offer. 2.5 HUMAN-COMPUTER INTERACTION THEORY
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In order to complement a technoeconomic view, and due to the interactive nature of videogames, concepts from the field of Human‐Computer Interaction (HCI) are needed. These concepts, like that of ubiquitous computing, virtual reality, communication, immersion, heuristics and abstraction, help in the creation of a picture with solid technical fundamentals. Moreover, in line with the theme of the report, these theories also underline the presence of the user as being central to videogame development, echoing the views of the market perspectives outlined previously in this report. 2.5.1 VIRTUAL REALITY VS UBIQUITOUS COMPUTING
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Where do videogames belong? Do they belong to the field of Virtual Reality (VR) or do they belong to Ubiquitous Computing (UC)? On the one hand virtual reality has a focus on simulating the real world through means of a computer (and the corresponding peripherals). As technology and computing power evolve, more and more “realistic” virtual reality environments can be achieved to simulate the physics laws of our world. On the other hand, ubiquitous computing enhances our ability to manage information from the real world, through small, ‘smart’ devices scattered around us, embedded in our spaces, aiding us in our daily lives. VR and UC both share two important similarities: the first is the realization that interaction is seamless, meaning that we are not aware, neither in a virtual reality environment nor in an ubiquitous computing one, of our interactions with technology; we simply know and perform, regardless of the technological platform we interact with. The second similarity between these fields is that they enhance our perception of the world surrounding us (be this virtual or real). VR is all about a sense of awareness of and inside a virtual world, while UC also permits ourselves to achieve a higher level of awareness (we receive information from sensors beyond our biological endowment) of events happening in reality. 21 Their divergence, however, is ontological rather than functional. Mühlhäuser et al (2008) stated it succinctly where they said that “Ubiquitous computing brings the computer into the world; Virtual Reality brings the world into the computer.” It is through this understanding that the position of the user vis‐à‐vis technology is differentiated. Under a UC perspective the user is located at the center of interaction. Those embedded technologies are around people. In a VR perspective users are relegated to the role of peripheral devices of a carefully crafted and simulated computer environment. Bederson et al. (1995) question if games are superimposed or integrated into the real world, only to opt for a middle ground, in which the physical world is augmented by means of a computer, the reasoning being that those “plastic boxes” do take an ever‐growing role in all of our activities—entertainment included. Jenkins (2006) observes that they might as well represent a different, complementary environment, one that has replaced physical spaces out of humanity’s mere practical urge for exploration in an already crowded and reduced physical space. Others, such as McMahan (2003) observe that games tilt towards virtual reality merely by accident, in that computing power made it easy to shift from two‐dimensional to three‐dimensional spaces. When this occurred, they sustain, visual feedback became immersive enough to take a predominant role in game development. The position taken in this thesis work is that videogames stand in the middle of Virtual Reality and Ubiquitous Computing. The reasoning is simple: while videogames share all the immersive capacities of virtual reality, immersion in games is also achieved through elements other than sensorial cues (narrative being the chief example), which are an important distinction of ubiquitous computing. As an addition, games do conform to a human‐computer paradigm that moves beyond the desktop. 2.5.2 IMMERSION AS SITUATIONAL AWARENESS
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The concept of immersion was briefly described in Chapter 1 as the ability for the user to feel that he himself is “inside the gaming space.” This concept also appeared in the business models of Pine & Gilmore (1998), as a desirable—and bankable—
attribute of an experience. Jenkins (2006) has called immersion the “vividness” of an experience brought by gaming. Other authors have defined it as “presence” (Tamborini & Skalski, 2006). All the above definitions convey a central idea. However, for the sake of clarity, this thesis report builds upon a more technical definition of immersion. This model is proposed by Endsley (1995) and is illustrated in Figure 7 . The term immersion is X
22 X
preferred in this report, but the term “situation awareness” can be used interchangeably depending on the level of detail required in a particular context. Figure 7. Situation Awareness Model, detailing the concept of Immersion. Adapted from Endsley (1995). Note the importance of Feedback for situation awareness between user and system. The model proposed by Endsley (1995) describes that the decisions and actions taken when a human interacts with a system are influenced by the nature of the feedback obtained. The feedback provides a sense for the state of the environment in the system. The understanding of such state is itself resting on three elements: perception, comprehension, and projection. That is, they provide information to understand what is happening around the user, cues as to what this information represents, and which goals can be achieved with this information. The situation awareness model is useful to obtain the salient elements that enable immersion. Chief among them is a continuous flow of feedback information, to update the situation awareness as events unfold. The nature of this feedback, is shown in this report, not only caters to sensory information (perception level), it also provides frameworks to understand the current state of affairs (comprehension level) and anticipate future events (projection level). In this regard, narrativity and 23 the level of abstraction in control interfaces, as well as other elements, are considered when studying videogames. Feedback as a concept also strengthens the position of the user being at the center stage. The utility of the feedback is to a great degree dependent on the type of controller (Noyes & Baber, 2001). They argue that discrete‐type controllers, like that of buttons, convey different information compared to continuous‐type controllers, like a steering wheel. This thesis report expands this notion by including a different dimension: that of level of abstraction in interfaces. This will be used to explain that the feedback, and therefore the experience the user receives, as well as subsequent actions and learning‐curves faced, are determined by a high/low abstraction of gaming control interfaces. Other technical elements filter, rather than augment, our interaction. This is especially true for human to human communication, when this communication is mediated by a technological platform. These elements, nonetheless, still provide greater situation awareness than could otherwise be provided in a human to human communication when physical proximity is not possible. An adaptation of the model by McMillan (2002) in Figure 8 is expanded to derive results in mobility, X
underscoring physical proximity X
and gamer interaction, and keeping communication as the central component. It is here shown mainly as an illustration of interactivity among users. Figure 8. Four Models of Cyber‐Interactivity (McMillan, 2002). 24 2.5.3 HEURISTIC EVALUATION
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The concept of value curves described above, in the Value Attribution theoretical framework, required the addition/subtraction of elements, which would then confer a unique market position to a certain company offering. In order to avoid arbitrary emergence of elements (Which of those to choose? And why?) the use of heuristics becomes necessary. Heuristics, in the field of software, are empirical rules intended as roadmaps for development. Heuristics are conceptually closer to guidelines than to actual, enforceable rules. Their non‐mandatory status is derived from the fact that they intend to aid, rather than coerce development of a certain project, and thus, are nor constituted and neither are regarded as standards. They are simply a way to make evaluations—one among many—of a software development process, particularly for user interface design. A set of the most famous heuristics, those proposed by Nielsen (1994), are simple rules that propose consistency, standards, documentation (among other elements) to aid the user, who is the central and main beneficiary of such guidelines. However, games are not task‐oriented environments (such as a webpage), but rather, are experience‐oriented environments (Schaffer, 2008). To utilize Nielsen heuristics directly in the evaluation of games would not completely result in a correct diagnosis. Desurvire et al (2004) propose four main fields to evaluate the playability of a videogame ( Figure 9 ). These four elements are game play, X
X
mechanics, story and usability. Game play deals essentially with a general sense of user empowerment in the environment. It evaluates, among others, consistency, clear goals, but also level of immersion, and possibility of customization. Game story also follows the same theme of empowerment, in the user ability to make sense of the world he/she is playing in (Is the story interesting? Is there emotional involvement? Which are the story outcomes?). Mechanics, in particular, focuses on intuitiveness and accessible learning curves. The fourth element, usability, is chiefly concerned with the feedback the user receives from the game and its quality. These considerations are taken into account when evaluating what a social mobile experience might address. 25 Figure 9. Heuristic Evaluation for Playability (HEP). Source: Desurvire et al (2004) SUMMARY
The main theoretical models used in this report are to be found in the fields of computing (chiefly among them, Human‐Computer Interaction) and marketing (i.e. value attribution theory). Both theories set the user at the center of value creation processes. Such perspectives bring into account the need of abandoning industrial organization perspectives in favor of markets‐as‐networks (MAN) perspectives. MAN theories conform to a better abstraction model that studies changes over time and competition (as well as cooperation) in value constellations. Because a market as competitive and innovative as that of videogames has constant pressures to change, a value constellation approach using activity‐types instead of “name‐
tagged” actors is favored. The concept of value is defined as the utility customers obtain from an offering, which varies depending on the context of such utility. For some, this utility can have a low level situational use; for others, utility is a stepping stone for ulterior goals. A flexible hierarchy of value helps homogenize the increasing diversity of game genres without the costs of itemizing to individual titles. The specialized activities found in the gaming market space provide a unique configuration of offerings for the consumer. However, as sociability and mobility are studied in contraposition to gaming, new offerings and activities are integrated to the constellation while others are ʺtunedʺ to create a different value curve in turn, depending of the nature of the relationships of the actors in the value chain. 26 The salient feature that such value curves provide is the achievement of immersive experiences. Immersion is defined as the ability for the user to vividly feel their presence inside a gaming space. This situational awareness requires adequate sensorial and cognitive feedback to aid the user understand, comprehend and project future courses of action for a gaming experience. Finally, in order to gauge the adequacy of an immersive experience, a heuristic evaluation approach to gaming is required. Heuristics are general guidelines to suggest adequate usability of interfaces. For this thesis report in particular, heuristic perspectives are used to evaluate the ʺplayabilityʺ of a videogame, and as a result, increase its value in the eyes of consumers. 27 3 GAMES: CONFIGURING
OFFER AND MARKET
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This chapter attempts to provide a detailed set of criteria to evaluate a gaming offer. The user perceived overarching value of gaming is that of immersion. It also maps out a value constellation of the gaming market space. The central activity‐
types in this configuration are console manufacturing (which orchestrates much of the hardware side of the industry), and publishing (which oversees the software side). In order to understand the desirable traits that videogames should have, several questions become relevant: How do consumers evaluate gaming experience? Which factors are there in the gaming decision process? To that end it is imperative that any attempt at outlining the framework of thought to evaluate videogames be integrated from the bottom‐up; analyzing first which are the salient elements in gaming (as a general term), and then move up to include social criteria, and finally contrasting them to the mobile dimension ( Figure 1 ). X
X
The reason to explore gaming and the social elements of it first (instead of adding mobility before sociability), is to anchor the perspective to the user point of view, as we move towards mobility, which has specific technical constraints of its own. Doing it the opposite way, from mobility to gaming, or from mobility to sociability would have constrained the analysis to a production‐oriented mentality; that is, extracting lessons on the basis of what can technology provide, instead of the more pertinent question of what would the user find valuable. This requires a broader and more inclusive view of value. This exploratory research recognizes two criteria: First, that mobile social gaming is a fledgling industry; it is as much a theoretical construct as it is a packaged product. Second, that a more matured an established industry segment (the stationary console segment) is needed to anchor the thoughts when extracting lessons. 28 3.1 PERCEIVED VALUES OF THE GAMING OFFER
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The literature that was reviewed for this thesis report has eased the identification of immersion as an overarching theme of the gaming offer (McMahan, 2003). Specific criteria to study games and their capacity for immersion comes in the form of heuristic evaluation, regardless of the duality of hardware and software in which games are procured in the market. An expanded set of criteria is proposed in Figure X
10 . X
Figure 10. Perceived values of gaming. When it comes to the hardware elements of a game, there is a particular focus for sensory feedback—be it haptic, auditory, visual—, as well as the level of abstraction in the control interface. The quality of sensory feedback is directly tied to the performance of the electronic devices that provide sound, video and haptic—
physical—responses. The level of abstraction in control interfaces refers to the degree by which a peripheral’s purpose and functioning is transparent to the user (a peripheral shaped as a skateboard has a more evident purpose than a set of buttons with respect to a skateboarding gaming title). In the software side, the immersion inducing elements that are of most relevance are a good narrative (a story that is compelling), and how seamlessly the software integrates the functionality of hardware, as well as enhances its use in intuitive ways. 29 3.1.1 VISUAL FEEDBACK
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Evolution in the graphical prowess of gaming is aided primarily because of the increase processing power of the console chips, as they moved from 8‐bit towards more complex architectures. Game design was abstract and rudimentary because of hardware limitations, but increased computing power made it logical to move away from abstraction in favor of realism (Wolf, 2003), as is shown in Figure 11 . Demand X
X
for faster processing power itself was in a great degree pushed by gamers ( Appendix 3 ). By the end of the 90s this was further aided by the inclusion of X
X
dedicated graphical cards. Today 7th‐generation consoles have more than one processor cores, in order to present visually appealing environments. The direct effect to the gaming experience was that of increasing the potential for immersion, as the capability to replicate textures, light effects and motion/collision rules, higher resolution, among others, was significantly improved. This, in tandem with higher capacity disks and home theater systems, created a demand for high definition television sets. Figure 11. Comparison of graphical prowess. 3.1.2 AUDITORY FEEDBACK
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Photorealism, however, is not the only way to enhance gaming experience. Increased computing power not only allowed games to move from the gritty‐high pitched sound that distinguished the 8‐bit architectures to the high fidelity they enjoy today. Videogames have incorporated full orchestral work from acclaimed composers, and many a time the score content is unbundled from a videogame and purchased in music stores in the form of a regular record. 30 Ambience is also increased through the use of voices and faithful sound effects to stir emotions directly. It was a natural step when in the mid 90s, standards such as Dolby and DTS home theater sound formats allowed for 360° ambience sounds. Auditory feedback is not circumscribed to a surround sound system, however. Further auditory cues for events happening in a gaming space can be conveyed through a controller. The Wii console does this by integrating a small speaker to the wii‐mote, the Wii’s controller. This has the advantage of differentiating actions for specific users and providing targeted feedback that a surround system cannot deliver, particularly in multiplayer modes. 3.1.3 HAPTIC FEEDBACK
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Advancements such as the rumble pack (introduced in 1997), a vibrating device attached to a Nintendo 64 controller, made it also possible to the user to increase his awareness in a game via force feedback. It became an industry standard within one console generation. Vibration was a simple method in which gaming events (acceleration, stress, recoil, collisions) could be conveyed to the user. The most common haptic feedback today is integrated into the controller, despite originally being envisioned as a peripheral to the controller. The attempts to enhance situational awareness were not circumscribed to rumble peripherals. There were others, like a vest that simulated bullet impacts in first person shooter games, but were not commercially successful at the time. 3.1.4 LEVEL OF ABSTRACTION IN CONTROL INTERFACES
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Immersion can also be aided by the way a user relates a control interface to the intended effects or actions that will subsequently occur in a game. The less interface abstraction the control interface has, the more intuitive will be to relate to and utilize the interface ( Figure 12 ). X
X
Figure 12. Increased level of abstraction in control interface. 31 As the complexity of activities within a game increases, the inclusion of more buttons comes as a natural step. The simplistic nature of gameplay in the early stages of gaming (two‐dimensional movement, jump and hit commands, menu selection, and pause) was abandoned in favor of more complex gameplay, and more activities were added in turn. First person shooters have benefited tremendously from an increased level of abstraction in control interfaces. The set of activities performed in this type of games (shooting, crouching, jumping, weapon selection, secondary weapon selection, object throw/pick up, and a long list of etceteras) requires not only increased button usage, but in turn pronounces the learning curve required to adapt to the game play, setting a learning curve barrier for un‐
experienced gamers. It is precisely this barrier in the level of abstraction of control interfaces, the one used as a major criterion to separate hardcore vs. casual gamers. In fact, the Wii phenomenon in 2006 can be partly explained by the efforts of Nintendo to make gaming controls less threatening, and to make the learning curve more accessible to audiences not traditionally gamers. It also helped that the controller was the cheapest component to upgrade (Wesley, 2008). The popularity of certain genres, however, made it attractive for the creation of specialized peripherals, that were not general‐purpose types like a standard controller, but which reduced abstraction in the controller interface. This include, but are not limited to, driving wheels, including braking pedals; light guns, or zappers; skateboards; power pads, which are basically rugs; drum and guitar pads, etc. Music rhythm games, in particular, have successfully exploited the lower level of abstraction a control peripheral can provide to enhance game immersion. But just as there have been milestones, there are also precipitous failures, like the Nintendo Power Glove and the Sega Activator, early attempts at motion controls that failed to entice consumer interest because of clumsy interfaces. The forefront in innovations is also moving away from buttons to integrate camera controls and pointing devices (Sony’s motion “wand,” and Microsoft’s Natal, which are expected to hit the market in 2010:Q4). To the extent that these provide immersion, the gaming experience is bound to widen its consumer base. 3.1.5 CONSOLE DESIGN
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Esthetic design of a console plays a role in consumer preferences as well as business strategy. During the 70s and early 80s, in Japan consoles had flashy colors and toy‐
like shapes, meant to attract child audiences (some even came with Robots, to enhance the infantile appeal, and get prominent shelf‐space). In the aftermath of the gaming crash of 1983 consoles were turn to grey, to associate themselves with the 32 productivity furor that surrounded personal computing and the Macintosh in 1984. It was later that the consoles acquired a dark, aggressive look that became the staple of gaming, along with rugged edges. Just recently, in order to underline the message of sociability (upbeat, positive mesage), consoles adopted the white color as an optimistic visual cue, and soft rounded shapes. 15 F
3.1.6 OTHER SPECS
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Technical specs are also fundamental in shaping consumer preferences. When it comes to console capabilities, there are two major camps in gaming: one favors graphical prowess while the other favors control interface. The repercussions in business strategy are tangible when looking towards the path Nintendo has taken vis‐à‐vis Sony and Microsoft. While the former has taken the path of late generation components to rein in costs (in graphical capabilities and control interfaces), Sony and Microsoft have opted to go head to head to provide cutting‐edge components, driving up production costs for hardware, but also development costs for software, as development of a game becomes more expensive the more complex the hardware required to run it becomes. 3.1.7 NARRATIVE AND INTELLECTUAL PROPERTY
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Gaming is not just the ludic substance‐less activity that was the staple of the 70s. Games prior to the crash of 1983 had simple storylines (the highlight been Galaga‐
style, shoot’em all games). For the most part, the user filled the gaps in narrative (“paratroopers just landed and are up to no good”). Shigeru Miyamoto, a game designer from Nintendo, recognized this vacuum and created some of the most memorable franchises in the gaming industry, and this was performed, in his words, by “learning from Tolstoi and Shakespeare” to create a context in which games could occur (Super Mario Bros. for instance was developed in the tradition of medieval literature: a peripatetic knight in shining armor rescuing princesses from evil dragons). Creating complex characters and interesting storylines proved very successful (Wesley, 2008). The enduring popularity of Nintendo’s characters is a testament to that remark. A good narrative is a powerful immersion element. A story that is coherent, believable, that the user can identify with, enhances the reality of the experience. Plots and cut‐scenes they all add to this dimension. Simplistic good vs evil has evolved into factions so complex, and with legitimate motivators of their own, that Kemp, David. “ The New Game in Design: Collaboration and the creation of the Xbox 360 .” Core77, Industrial Design. 15
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33 the videogames have spawned books and movies to expand particular storylines. But as important as this, is the intellectual property in which they rest. Intellectual property (IP) is more relevant when the game overlaps others media genres: whether it imports characters from novels, sports, or movies, a motivated fan base will always find more attractiveness in a story that is captivating. For some years, the main publishers in the industry relied in titles based on strong IPs. 3.1.8 INPUT INTERFACE
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There are other immersion inducing elements on the software side. Software has a functional and a esthetic role in gaming. The functional role concerns the productive utilization of hardware—to get the most out of a console’s hardware. The esthetic role works the other way around: to provide the most attractiveness given current hardware limitations. Software also needs to productively enhance gameplay. Any game designer today has to take into account the number of buttons/d‐pads/finger‐sticks/other peripherals that represent the input interfaces. This whole set then needs to have a meaningful raison dʹêtre, in order to make gameplay transparent. Software adds profundity to hardware operation. For example, it provides different responses from pressure sensitivity that could not otherwise be achieved strictly hardware‐
wise, among other functions. Moreover, software harmonically integrates the different input commands in a coherent, intuitive experience (triggers are used for shooting, d‐pads used for camera movement, finger‐sticks for displacement, shoulder buttons for secondary weapons, etc.). 3.1.9 OUTPUT INTERFACE
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The capacity of a game hardware to convey realistic graphics, physics laws and attractive design are also enhanced via software. The umbrella for this set of software operations is called a game‐engine. The engine is in charge of rendering graphics, textures, light affects; control the movement and collision behavior of objects; the engine also integrates music and sound effects seamlessly given certain triggers; it handles camera control; and, overall, takes charge of the entire gaming performance. 3.1.10 EFFICACY + EFFICIENCY
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Some elements cannot be evident to the user, but they must be transparent. It is taken for granted that a game must be bug‐free (objects should not pass through walls), and that it can perform effortlessly (it won’t freeze when objects clutter the screen). The more robust is a game to prevent and recover from errors, and the 34 more capable is of sustaining a high performance load, the more uninterrupted gameplay will be. It is often taken for granted, but if overlooked it can severely damage the quality of a game, and that of the parent console. Poor quality design in the game E.T., the extraterrestrial (which featured an annoying set of bugs impossible to recover from), represented the demise of the Atari 3600, and contributed significantly to the videogame crash of 1989. 3.2 MARKET STRUCTURE
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Having outlined the criteria used to evaluate a gaming experience, it is necessary to have a picture of the market configuration to see how likely, or under which constraints, these criteria will be met. The typical value chain model to illustrate the gaming market ( Figure 13 ) is X
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insufficient to explain the complexities of the gaming industry space. The model is reminiscent of the production orientation model illustrated by Jobber (2007) and the nineteenth century Industrial Organization mindset. This model is certainly useful to explain some of the most salient aspects of the industry (developing, publishing, distributing and retailing), and as such serves as a “rough cut.” However, as explained before, gaming is not an isolated entertainment offering that popped out of the blue in its current form. It does change. Moreover, the link with the software industry is not casual: it shares many of its practices because they, software and gaming, in fact overlap with each other. Developing consoles for household consumption came as a natural step of the computing revolution. It is logical that reconfigurations of the market space will be inevitable in the future. Figure 13. Rough approximation to a ʹgaming marketʹ picture. 35 The proposed new value constellation ( Figure 14 ) attempts to provide finer X
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granularity. In doing so, it acknowledges, in line with Porter’s thought on core competencies, that activities have become specialized, that business‐to‐consumers relationships are not the only scenario when it comes to consumer products, and that actor‐types from other industries do provide input to the value constellation. The end result is a better abstraction for a decidedly complex set of aggregated activities, especially when taking into account that many actors have used more than one hat as decades have gone by. This dance of masks and veils would be unmanageable if actors were itemized and analyzed individually—some doesn’t even exist anymore. This is why activity‐types rather than actors are preferred to described the videogame value constellation in Figure 14 . X
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Figure 14. Gaming Value Constellation, and improvement from the gaming value chain. 36 3.3 MAIN INDUSTRY ACTIVITIES
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A videogame is as much hardware as it is software. The gaming value constellation reflects this by merging activities from software production (the actual game as the output) and hardware manufacturing (the cartridge/disc, the console itself and its peripherals). Some companies combine one or many activities, depending of their core competencies and corporate missions, as well has history. Historically, developers, publishers and console manufacturers are different entities, but as the industry grew it became commonplace that publishers acquired studios or that console manufacturers became publishers (Krishnan, 2005). 3.3.1 CONSOLE MANUFACTURING
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The activities around the console manufacture are central in the hardware section of the constellation, as those are the ones that create most of the frameworks in which development will take place. These include: Licensing deals, capital outlays, market research, research & development (R&D), and production. The costs of creating a console are huge (years of research and development, user testing, mass scale production, etc.), and the life cycle of the console lasts anywhere around five to ten years, on average, depending of the extent of a game library and the console’s backward compatibility for games of previous console iterations. An industry paradigm has been to adopt the razor‐blade model of selling consoles with little or no profit. It may take years for manufacturers to achieve profitable economies of scale (i.e. millions of consoles and a large user base buying an extended library of games). Therefore, successful user acceptance of a console can make or break a company (i.e. SEGA being the prime example of a manufacturer retreating from the console manufacturing market due to failing fortunes). Moreover, the consolidation in the industry creates a high capital barrier to entry. The actual production of the consoles and controllers is outsourced to electronic companies in Indonesia, China, Taiwan, Japan and Singapore, under the brand name of the main 3 console manufacturers. These companies build anything from chip boards, cd‐roms, accessories, etc. It is uncertain how much of the manufacturing remains in‐house and how much is outsourced. In fact, it is rather difficult to evaluate the actual production costs for a given console. Manufacturers usually resort to specialize firms to provide analysis of their competitor’s electronic systems, in order to extract design choices, manufacturing techniques and component costs. 16 F
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The Economist. “ The Business of Dissecting Electronics : The Lowdown of teardowns.” Jan 21 st 2010. [web Jan 28 2010] 16
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37 Console manufacturers work closely with electronic component manufacturers. Sony, for instance, after years of being a components supplier for Nintendo, seized the opportunity to use its extensive expertise in the electronics area to enter as a console manufacturer on its own with the Playstation (Wesley, 2008). It became a successful platform, effectively gaining the upper hand in the console manufacturing space for an entire console generation. This “surreptitious” entrance of Sony into the console manufacturing space solidifies the rationale for including “peripheral activities” into the value constellation, that otherwise could not have been spotted using an industrial organization approach. As such, manufacturers need to continually monitor industry trends. They are very involved in consumer electronics showcasing (The Electronic Entertainment Expo ‐ E3 being one of the rallying events of the year for hardware and software). As of 2010, most of the hype in console manufacturing is centered around 1) graphical innovation and/or 2) controller research. Another way for a manufacturer to reap an additional revenue is through development licenses, in which the manufacturer approves of the development of a game by a third party, for which it could charge 10%‐15% of the retail price. The door swings both ways, however, as a publisher, in turn, can license a game for the manufacturer to develop and pay only 5% of the retail price. In these deals the manufacturer gets significant control, not only of the development of a game in order to ensure quality, but also gets to dictate strict control policies in the distribution of titles—lest be forgotten that oversupply was the demise of Atari, and almost killed the industry itself, back in 1983. 3.3.2 PUBLISHING
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The importance of the manufacturing is mirrored in the software side, via the publishing activities. These include, but are not limited to, funding, marketing, and content seeking. Design, packaging, pricing and advertising take a primordial role for the publisher. Because of limited shelf‐space, and a big catalog of games, marketing is primordial to create and maintain brand awareness. Because of the high uncertainty that accompanies the release of a title, it is not unusual for marketing budgets to greatly surpass entire development costs, especially for AAA titles. The industry has informally set a standard for volume sales, being over one million units sold the unofficial mark by which to judge a title’s eventual success, but figures may be far higher for AAA titles. To address such uncertainty, often publishing entails large financial outlays. Publishers finance software development either via in‐house studios or subcontracting third‐party studios. Because of this, they get a high degree of say in development over studios. EA strategy, for example, is to have several 38 development projects in the pipeline. If certain milestones are not reached in software development, some projects are terminated. This reduces overall development costs for the company. However, such level of control is often resented by developer studios, which renounce creative freedom—often bundled with an original intellectual property—for financial security. Acquiring bankable Intellectual Property (IP) has made publishers to seek content in media like film, print (novels, comic books) and even toy lines. Activision, for one, is a company that has centered itself around established intellectual property (IP), like movies and successful game franchises. Electronic Arts has a strong sports division, signing exclusive deals with the NFL, the sports commentator John Madden, and movies as well. Usually licensing content represents 10% of a videogame’s retail price. Other practices are more controversial, among these, is the yearly release of titles for a particular franchise. It is controversial because it can generate brand fatigue among consumers, due to the relatively high number of titles in the market during a short period of time. Highly popular franchises are susceptible to this practice due to their initial favorable appeal among the general public, but risk being diluted as a brand, as Guitar Hero and the Tony Hawk series, both by Activision‐
Blizzard, sadly exemplify. Sports games are also in this category of yearly releases. One area that deserves special attention is that of pricing. Game title retail prices have remained largely stable (adjusted for inflation). Why haven’t they gone up or down? A possible interpretation is that an increase of prices would drive sales down. A hardcore (and more dedicated) fan base might be willing to fork the increased amount, but other casual segments are more price sensitive. Also, volumes have gone up, which also reduces the incentive to increase the price. An unofficial “benchmark” to judge a title’s success is 1 million copies. The industry has also been reluctant to drive costs down because of uncertainty to meet the bottom line. Any price alteration most likely will impact the publisher more than any other actor. A short term recoup of sales is preferred, and no other publisher has driven the cost down, which could evidence a tacit oligopolistic behavior. There are exceptions to this pricing rule, of course. In particular, sports game titles, which are released yearly, tend to suffer dramatic price reductions in a shorter time than other titles. 39 3.3.3 DEVELOPING
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The developer’s dilemma has been to operate as an independent studio, or be part of a publisher. Given the long development phase and high‐risk once a game title hits the shelves, studios usually end‐up being acquired by a major publisher. Deals vary: some are royalty based, others through advancements. Some of the activities of a developer are the following: •
•
•
•
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Idea Pitching Story creation (Character Design, Intellectual Property) Graphics design (artwork, rendering) Sound creation (orchestration, sound effects) Engine codification (Light Phenomenology, Movement and Physics Rules, Artificial Intelligence) Because of the enormous costs involving the development of a game ( Table 1 ), and X
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the development timeframes lengthening with every console generation (a typical game today takes anything from 2‐5 years to develop), studios are forced to act as advertising agencies to pitch their ideas to a publisher. In cases where the idea is an original IP, the rights to the IP are surrendered to the publisher, and the studio becomes a contractor. Game Cost Development (Milestones) In USD Year Amount Inflation adjusted 1980 100,000 ~260000 1996 (5 Gen) 1 million 1.4 million 2000 (6th Gen) 5‐7 million 6‐8 million 2007 (7 Gen) 15 million ~15 million Table 1. Videogame production costs. Sample milestones. Note the geometric increase of costs in every generational transition. The complexity in game design is also present in game storylines. This requires bigger development teams of artists and experts to create a game. In the late 90s a game could be developed by a handful of people, but in the wake of the 21st century teams are numbered in the dozens, each with specialized functions. 17 Massive F
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Entertainment’s World In Conflict, a strategy war game, even went the extra mile to Thompson, Clive. “ Learn to Let Go: How Success Killed Duke Nukem ,” Wired. December 21, 2009 [web 14 Jan 2010] 17
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40 hire historians and other experts to realistically recreate late 90s weaponry and vehicle technologies of both NATO and Warsaw Pact countries. Specialized teams also handle artwork and design. Graphical innovation, perhaps more than any other element, increases development costs. Those richer, more detailed environments require entire art teams to create. Rendering, which is the generation of graphics from the console into the screen, also makes it necessary to acquire powerful software. Sound itself has become more complex, to the level where entire orchestration work is needed in a game (i.e. renowned Hollywood composer, Hans Zimmer, created the score for Call of Duty: Modern Warfare 2). Engines are development tools for gameplay, in control of graphical rendering, incorporating sound effects, physics laws (lighting, collision, movement), artificial intelligence, and hardware performance (processing threading). It is hard to set a boundary between game and engine, since both are ultimately one and the same. However, the engine itself is also used as a way to obtain additional revenue, in that it can be licensed for use in other different games. However, for the most part, engines serve to showcase a game (or vice‐versa). All the above has increased development costs. 3.3.4 DISTRIBUTION
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Both, hardware and software, make shared use of distribution and retailing, which are the activities needed to get their physical products to the end consumer. Distribution, in the most operational level refers to the actual shipping and warehousing of consoles and games. There are, nonetheless, licensing deals for companies to serve as distributors for the publishers. They buy in volume, and as such, get significant discounts. Software distribution has allowed the creation of another channel, e‐distribution, to connect directly to consumers. All the major software manufacturers, by virtue of this channel have created their online communities. Though attempts to connect consoles to the early web were made during the 90s, widespread network access and high speeds have made it now commonplace. The industry has evolved fast to adapt itself to this challenges. A few years ago, connecting a console to the web was unheard of, or faced considerable practical limitations. Today, e‐distribution has allowed for the increased lifecycle of a game, in that services are now deployed to maintain the relevance of a title. Before consoles were capable achieving connectivity, maintenance of a game virtually ceased after it was released. Today this has changed to include other services, like the release and maintenance of new map levels, to entice a gamer to keep playing a title, well after it has been released. 41 3.3.5 RETAILING
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This link is the one the user interfaces with. Retailing can be done in specialty stores (Gamestop, Toys‐R‐Us) or in mass retailers (Wal‐Mart). Because they assign shelf‐space, their influence is important. Physical restrictions in shelf‐space requires careful consideration on which games to assign the most preferable space. They also handle consumer service, sales, and warranties. Despite being the last element in the link, retailing has had big influence on the industry, as it can potentially hold a veto power for promoting games, and usually keep 15% to 20% of the retail price. Retailing has come under threat from e‐
distribution, and this will be expanded in following chapters. SUMMARY
Which are the perceived values that user sees in a videogame? As an answer, the overarching value of gaming is immersion. This is defined as the enhancement of the gaming situational awareness—for a user to vividly feel the gaming experience—
via software and hardware. The salient elements of software are compelling narratives and productive and aesthetic use of hardware capabilities. The hardware most salient elements are those that provide a higher quality of sensory feedback (haptic, visual or auditory) and provide lesser abstraction in control interfaces. The software and hardware division of the offer is also mirrored in the mapping of the value constellation activity‐types, where manufacturing and publishing become central to all the activities along this network. 42 4 SOCIAL GAMING
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Attempts to add mobility and to exploit sociability in game devices have been tried before, however, mobile gaming today is almost exclusively a single player experience. This chapter studies the perceived values of social gaming, and tries to find an overarching theme for it. 4.1 NIHIL NOVUM SUB SOLE
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Social mobile gaming is not a new phenomenon (see Figure 15 ). Portable devices X
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were introduced as early as 1989 and have remained in consumers’ Christmas lists ever since. Obvious limitations were that of processing power and battery life. However, the use of cables forced players to play in physical proximity. This created another layer of obstacles that constrained the potential for social mobile games. Today new portable devices, with computing power that dwarfs their predecessors, longer battery life, and wireless capabilities, have not delivered the full potential of a truly social mobile offer. Two decades since its outset, mobile gaming is still very much a single player experience. Tapping the social will require a re‐examination of what makes a good gaming offer through the eyes of consumers. Figure 15. Social Mobile attempts as early as 1989. 43 Now that the necessary elements for a vivid gaming experience have been laid out, it is relevant to notice that this does not solely happen in the individual sphere of single player gaming. Immersion does not imply isolation. When referring to social games, therefore, is relevant to define it broadly as several people simultaneously playing the same game with each other. When other players are added to the game landscape, they for themselves can enhance the perceptual elements of gameplay (Vorderer et al., 2006). The sharing of a experience then, builds over the gaming value of immersion, but adds some of its own. Chief amongst them is the possibility of customization. 4.2 CUSTOMIZATION
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Customization is a convenient way for the user to find its own way on the game and also to relate to the gaming environment at a preferred pace (after all, no human being is alike in tastes and skills). A natural step for adjustments occurring within the confines of a game is to redefine the game itself, and adjust it as a whole, by customizing its content to create a unique offering—one that can be shared. An outline of customization elements is presented in Figure 16 . X
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Figure 16. Customization element map. 44 4.2.1 COOPERATION / COMPETITION
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Among the motivations to engage in videogames are the desires for exploration, collection, achievement, and many others, but also, those of competition and cooperation (Klug & Schell, 2006). One element that appears naturally is the human desire to rank her skills (problem‐solving, motor skills, etc) against others. Leader boards and the desire to beat and set scores was the one motivator when games lacked simultaneity. But cooperation and competition are also, to various degrees, customizable in a gaming experience: cooperative multiplayer gaming opened the door for competitive play (counter multiplayer). Multiplayer gaming has added the convenience of customizing game difficulty by virtue of human support, or hardening the difficulty by having human adversaries. However, games are not entirely about competition. As developers have introduced more and more levels of cooperation into their titles, games have offered specialized and differentiated capabilities to individual gamers, and with it, the incentive to cooperatively use these capabilities in team work. The game World in Conflict, which depicts a hypothetical full war between NATO and Warsaw Pact countries, separates game experience into categories, reminiscent of a paper‐rock‐scissors game: the ability for a player to use either armored tanks, air and artillery support, or infantry. These abilities heavily rely on team play for the team’s survival, as a team with more balanced capabilities and organization stands better chances of survival than a team that does not exploit a cooperative, organized strategy. 4.2.2 GAMEPLAY CUSTOMIZATION
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Game mechanics is a balancing issue. The use of such mechanics provides the player with the tools by which he can develop his/her own style and the pace of his experience. In the case of music rhythm games, the selection of guitar or bass is more than a trivial choice, it represents a personal style and the possibility to successfully pursue it in the game environment. In first‐person‐shooters this is evident in weapon selection, which would influence subsequent level completion (a shotgun, which its high firepower but limited range will yield a different gameplay than an accurate sniper rifle but limited slower aiming time). Upgrades can also be a factor in establishing different scales of customization. They become even more of a gameplay balancing factor when they allow the user to form specialized units in a group. Games that are in development have pushed customizability a bit further to include a narrative that is dependent on the user’s actual choices in the game (for example, a game that progresses differently depending on the goals achieved, the time spent, the characters met or killed). 45 4.2.3 COSMETIC CUSTOMIZATION
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Being capable of personalize a character/avatar in a social gaming environment in order to distinguish it from others is also an important factor in social gaming. Moreover, it permits the user to relate to the character. This is particularly important as a source of revenue for the industry, since the out‐of‐the‐box offering (the game title) can be complemented by add‐ons (maps, garments, tools, vehicles). Cosmetic customization (apart from functional upgrades) has proven to be a source of significant revenue for gaming industries, as this content is purchased by a fan base large enough to sustain the profitability of a title. This fan base need not be large in absolute terms, in fact, some games reach profitability with as little as 10% of the community actively spending on a title. 4.2.4 SESSION DURATION
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Playing in a social context has an impact on the requirements of time. Some games require a substantial commitment in time in order to become attractive for all parties involved (like a raid in World of Warcraft, which often can take hours to accomplish), while others require a shorter commitment in drop‐in/drop‐out time to keep the interest of the players. A long commitment period is exemplified again by games like World of Warcraft, which are subscription‐based. The subscription increases the likelihood of a user investing time on his character, as well as to the fact that, while playing with others, minimum time spans are needed to build a reputation, join a group and develop proficiency at teamwork. Other games, like those found in board games, require a smaller drop‐in/drop out time. A user can expect a certain game lobby to have players available to play with, and a game session to be measured in the minutes, not hours. 4.3 EXPANSION OF CONTENT
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A physical product (cartridge/disk) has inherent space limitations that potentially do not completely offer enough content to satisfy the preferences of a gaming group. This limitation is overcome by downloadable content to extend the offer of the physical product ( Figure 17 ). X
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46 Figure 17. Downloadable content, note how the shared interest zone expands in a social model. An example can clearly illustrate this situation for the case of, say, music rhythm games: Gamer 1 has a set of musical preferences of his own (in this case represented by the light blue circle in Figure 17 ), which could encompass anything from pop, X
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rock, disco, blues, jazz, etc. Gamer 1 then invites a friend, Gamer 2, over to play music rhythm games. Gamer 2 has a different set of musical preferences—no human being is alike—than his friend (Gamer 2’s preferences in dark blue). They, however, share a set of genres, groups and songs (called a shared interest zone). This particular set of tracks will be the ones they will play and enjoy together, given the ones available at the disk they are playing with (in gray). However, the disk (or cartridge) only contains a limited number of songs they both share and like. This limits the gaming experience to few instances. In order to maximize their common enjoyment, they are offered the possibility to download more tracks. So they do, and by doing so, the content fulfills their desire to share a more pleasurable experience. 47 4.4 ON-LINE GAMING PERCEIVED VALUES
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Further exploring the interaction between players, the social gaming experience can be divided into two: on‐line and on‐couch. In the case of on‐line gaming, there are four pillars in which it rests when it comes to value‐creation. These are: community, player interaction interface, performance, and matchmaking. Those of the on‐couch experience are: manageable learning curves, potential required peripherals, handicaps, and overlapping of interests. 4.4.1 COMMUNITITY
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The community is the driving force of social gaming. In can be dissected in three factors: Size, dedication, and grouping patterns. The size of the community aims to reach a self‐reinforcing critical mass. A dedicated fan‐base large enough can assure further integrations to the community. This became relevant as on‐line services influenced purchasing decisions and players were able to play with one another in coordinated fashion. Dedication is also a factor to take into account, since building a social relationship (any community) requires commitment in time and resources. Of the most successful franchises to date, World of Warcraft has benefited from the dedication of the consumer fan base to develop a subscription based‐model. Under this model, a monthly subscription is required to have access to the gaming servers (which hold the user profile and status, as well as maps, and access to other players). Grouping patterns also shape how a community is perceived. Some people prefer to play in small cliques while other people prefer to participate in large communities. Social Networking, which deals with the issue of how to make friends and how closely‐knit the relationships are, is an activity to which social gaming can provide access to. But how do this actors interface with each other? 4.4.2 TECHNOLOGY FILTERING COMMUNICATION
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Given that an on‐line space can be considered a “virtual world,” the issue of how communication occurs here is raised. It has been explored that on‐line interaction requires any communication between gamers to be filtered by technology. This requires the integration of peripherals to bridge this gap, either through voice communication, or through webcams and text. As part of customization—an integral feature for social gaming—the transmission of emotions is indispensable for a more complete social experience. Emoticons and avatars fill this gap. 48 4.4.3 PERFORMANCE
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On line social gaming puts pressure on underlying hardware architectures by requiring acceptable levels of stability and performance. Just like software needs to provide solid, bug‐free experiences, information between parties must not be disturbed. Distance and traffic volume can affect the transmission speed of information, leading to unresponsiveness due to lag. These delays in information exchange disrupt gameplay, either because it desynchronizes activities (the player might attempt to attack an object that is not already there), or drops off a player (effectively killing him by a disconnection). 4.4.4 MATCHMAKING
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As important a fact as performance is the ability for players, when in opponent settings, to find adversaries of the same weight‐class, so to speak. A user who finds himself overpowered by more experienced players might not enjoy gaming to the fullest, as this leads to frustration and subsequent abandonment of the game. On the other hand, unchallenging adversaries, pertaining to a lower level of expertise, might find the gaming experience devoid of attractiveness, and will leave as well, due to boredom. 4.5 ON-COUCH GAMING PERCEIVED VALUES
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On‐couch gaming, which enhances the balancing needs of the various individuals in a group, requires manageable learning curves, handicaps and intuitive controls to accommodate differences in the gaming expertise of players. They also need a common ground in tastes to have a starting point for a gaming experience. It has been referred to social games occurring in physical proximity as on‐couch games. The metaphor succinctly captures the physical proximity of the players as well as the togetherness factor of the environment in which gaming occurs, which is different from on‐line gaming. The perceived overarching value of on‐couch gaming is also customization, but one following particular demands: the need for manageable learning curves, the potential for required peripherals, handicap customization, and overlapping of interests. 4.5.1 MANAGEABLE LEARNING CURVES
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The driving appeal of on‐couch games is the people playing them. The fastest a group of people understand the mechanics involved in the game, the easier it is to adapt to the gameplay. In an on‐line environment it is assumed experienced players will find their way at their own pace, but in an on‐couch setting, the pace must find 49 the players, as they all encounter the game in unison. If the controlling interfaces and game mechanics are daunting the level of interest of gamers is decreased substantially. A manageable learning curve, through simple, less abstract interfaces and relatable game mechanics, is required so that the focus be the social experience of gaming. This should not imply simplistic games. After all, learning how to play a game does not instantly equates it with its mastering (chess is the primordial example of simple rules, but complex mastering). However, the easier it is for players to get a basic understanding of gameplay, the more likely it is for them to continue playing the game after the initial encounter with a game. It can be described best by a scouting principle, which states that the speed of a column is as fast as the slowest moving element of it. In some cases, games come bundled with peripherals, which further reduce the learning curve to acquire a functional level of expertise to play a game, so do handicaps. 4.5.2 HANDICAPS
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This is the on‐couch equivalent of matchmaking. In on‐couch games chances are that participants invited over do not master the game with the same expertise as the host (which is assumed as the owner), therefore, in order to provide comparable performances while permitting customization, a little boost through the use of handicaps is needed. 4.5.3 POTENTIAL REQUIRED PERIPHERALS
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Additional control interfaces are often needed to, 1) reduce the level of abstraction in control interface in a game (playing a guitar with a keyboard might not be as enjoyable), 2) integrate more players. It has been explained that a reduced level of abstraction in control interfaces makes the peripheral’s function in a game more evident to the user, which otherwise would have to learn “which is the right button” for any given action. By obviating the connection between an activity and a peripheral, the potential put‐off effect is reduced. Screen real state also limits in the number of players for a single session. Music rhythm games have proved the screen limitation can be dealt with through the use of complementary peripherals: microphone, guitars, drum pads, etc. while at the same time using screen time collectively, without it being split. 50 4.5.4 OVERLAPPING OF INTERESTS
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A very important factor in determining the success of on‐couch gaming is the interest overlap in all the participants. The more they all as a group can relate to the content they are playing with, the more enjoyable the gamer experience. This is similar from the downloadable content model ( Figure 17 ), in that the incentive to X
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maximize the overlapping of interests can be addressed through the expansion of content. SUMMARY
The mobility and sociability potential of games has been recognized almost from the outset of videogames. The proposed solutions have not yet delivered the expected results. Despite overwhelming advance in technology for the past two decades, mobile gaming is predominantly a single player experience. Just as immersion is the overarching theme for gaming, sociability encompasses customization. Customization not only concerns the capacity of in‐game adjustments, it also expands the content itself through downloadable content. Downloadable content overcomes the limitation of a physical offering and makes it more personal, while also increasing its social appeal. On‐line social gaming distinguishes itself for having every human communication filtered by technology. This requires good performance of network hardware and interfaces that overcome the limitation in communication. On‐couch games are different to on‐line games in that the gamers’ interaction with each other is not filtered by technology. To address simultaneity and lowering of learning curves, peripherals have been created. While they can be simply the aggregation of existing controllers, an important role for specialized games is that they can lower the abstraction of the control interface to make their use more transparent to the user. Handicaps also address the different levels of expertise between players, just as matchmaking was a balancing factor for on‐line games. 51 5 SOCIAL GAMING
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Another vantage point in which a social gaming experience can be studied, be this on‐line or on‐couch, is the ease of mobility (or lack thereof) in physical space, this has specific implications for social games. It has been studied that communication between parties of a social environment is different depending on how filtered by technology their interaction is. In an on‐line environment, there is a 100% communication filtering by technology ( Figure 18 ). In X
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an environment where no communication filter exists within the social group given their physical proximity, the proposed term is on‐couch gaming—nothing is off‐line any more—as a more relatable metaphor. That the human interaction is filtered by technology does not mean this interaction is diminished. While the need to utilize headsets, webcams and a keyboard do not encompass the complexity of human communication, technology can aid in the efficient management of human interaction when groups grow big in number. Therefore, a theoretically limitless number of players can participate together, in organized fashion. This advantage does not exist when the interaction is based on physical proximity, as it becomes a cacophony, and groups tend to become unmanageable to act in unison. The definition of mobility is left rather loose: it encompasses not only portability and accessibility, but also denotes wider effects on social structures, and value (Andersson et al, 2007). Mobility to the user is translated in the ability to escape the physical limitations imposed by the console. Ease of mobility in physical space also defines social games as a second dimension. A gaming experience is called stationary if it has difficulty in moving in a physical space ( Figure 18 ). Pairing ease X
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of mobility along with human interaction results in the emergence of the mobile couch, a metaphor to explain a possible materialization of social mobile gaming. 52 Figure 18. Another vantage point to study the two social experiences, their intersection highlights the multi‐device nature of the mobile couch. Inspired on the cyber‐activity model by McMillan (2002). 5.1 THE MOBILE COUCH
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5.1.1 IMMERSION AND CUSTOMIZATION
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Not all immersion‐inducing elements can be successfully translated into the mobile sphere. Particularly video and audio get drastically limited (one cannot transport a 50” screen). Until technology becomes truly portable, the rest of the immersion‐
inducing elements—haptic feedback, intuitive controls and compelling narrative—
become critical for social mobile gaming. Because social mobile gaming will mean that games can be played on the home or “on the go,” games require a greater flexibility in terms of session duration. Also, the potential for spontaneous social interaction stresses out the need for customization in the content of a game, either through downloadable content, handicaps or other modifications. 53 5.1.2 CONNECTIVITY
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Social mobile gaming would come more natural to a specific device if there was a virtual hub, or community layer, attached to that brand. Users are more likely to buy a game if they see their friends playing it as well. The possibility to play with others, invite them to the games, or joining theirs, is a must for any social mobile game in the future. This will require complete wireless coverage, putting pressure for broadband operators, but also increasing the traffic in their networks, something that is attractive to them. The speed of interconnectedness between players is an important factor regardless of the game being played on‐line or on the mobile couch ( Figure 18 ). How long X
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does it take to set up a connection between devices or join a game on the internet? In the example of two people finding themselves in the bus ride, it is important that the game set up be as quick as possible, otherwise the bus ride might be over before the game even started). 5.1.3 INTERFACE INTEGRATION AND FINGER REAL STATE
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Convenience is the main rationale behind portable devices. Portable means it can be moved easier from A to B when compared to others. Weight and size are important variables that have explained the design and ergonomics of these gadgets. Laptops were designed to make computing “on the move,” and they have become smaller and smaller. Mobile phones have also followed that trend (from the brick‐sized devices of the 90s), and while they could certainly become as tiny as a coin, to be operated by people across age groups, sexes and cultures, they had to be built between the boundaries of a human hand. But their components do not. The quick technological advancement (Moore’s law) also pushes prices down and sizes low. As they have done so, more components have been integrated into the devices themselves (cameras, microphones, wireless capabilities, operating systems, memory, batteries). In a stationary environment, the integration of interfaces is not required: interfaces can be purchased as peripherals. In a mobile environment all interfaces are often integrated into the device. Creating small devices represented sacrifices, nonetheless: memory and computing power were the necessary sacrifices made in order to create devices that could be conveniently small to be moved around. As a result, games for these platforms were designed to run in underpowered systems, with low memory. The constraints that were imposed on designers as a result brought about simple games with low‐definition graphics and simple objectives. 54 5.1.4 MULTI-DEVICE COMPATIBILITY
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While the stationary on‐couch gaming experience is centered around one device, with multiple users attached to it, the same might not hold true for the mobile couch. The physical restriction in size of the mobile device itself is not conducive for several people to interact with it simultaneously. For reasons of limited finger real state and interface integration, the mobile couch has historically been a multiple device experience. From the perspective of a gamer a downside of this is the fact that individual copies of the software will be needed by each player and that they need to have a device compatible with each other, in all likelihood, of the same brand and product family. This could have a negative effect on sales of the device, as the perceived value is lessened. 5.1.5 THE VALUE CURVES OF SOCIAL MOBILE GAMING
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It was explained in chapter 2 the importance of unique value curves for an offering as novel as that of social mobile gaming. The following chapters explored the components of immersion and customizability that enriched the heuristic approach. Finally, this chapter outlines specific constraints for social mobile gaming. In light of these and the technique by Kim & Mabourgne to create new market space, how is a value curve for social mobile gaming plotted? Which elements need to be created or eliminated? Which others require to be offered higher than the industry standard, or lower? This study focused mainly in the first two questions (what to create and eliminate). The actual tuning of those elements (to either set to high or low) will be left to others to ponder. The genre—and indeed the content—of a given videogame title will have to have different demands than those of other titles. This study aimed to create a framework of value attribution, but it eschewed individual grading of itemized genres and titles for the sake of simplicity and consistency: an averaged criteria would be meaningless. Creativity cannot be hostage to a number determining its worth. Instead, this thesis report leaves to others a general framework to use when evaluating their own offerings. How much they differ from others, or how much the offerings are alike, is the main goal. This takeaway can be best explained as tuning the elements of an offering to find value; using the metaphor of music, it is like equalizing an offering’s settings ( Figure 19 ). X
55 X
Figure 19. Equalizing the settings of an offering to find value. Not all of game genres and titles should share the same settings. However, the criteria to evaluate the sociability and mobility is standard. 5.2 CONSTRAINTS
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5.2.1 POWER SUPPLY
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Stationary gaming is limited physically by a large degree in the power supply. Consoles require connection to an outlet. To create continuous energy supply without relying in alternate current, battery use becomes crucial. The year 1989 saw the release of the first handheld devices: the Nintendo GameBoy and the Atari Lynx. While Atari had the technological edge (16 bit console and LCD color display vs Gameboy’s 8‐bit, monochrome screen), Nintendo saw higher value in better battery performance (Taylor, 2008). The decision to use relatively underpowered chip architectures and monochrome screens increased battery life. The user base would prove them right and the Lynx handheld was shortly abandoned. 5.2.2 CONNECTIVITY
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Stationary consoles, for the most part, rely in Ethernet adaptors and fixed line infrastructure (cable, DSL). This limits the gaming console to a physical locale. Mobile devices, using wireless connections have no such limitation, but have others of their own. The problem facing mobile devices today are bandwidth and coverage. If “mobile gaming” appeared to be perpetually on the verge of “taking off,” but never fully doing so, was to a large degree because the user was never fully aware how much will mobile services charge traffic usage. Internet traffic generated by games faced potentially high and uncertain costs to the end consumer. Today, convergence in the telecoms industry has permitted 1) wireless services replacing fixed line services, 2) wi‐fi coverage in public hotspots, households, 56 businesses 3) increased traffic in networks (Andersson et al, 2007). It follows that a more convenient pricing scheme, such as flat internet fees, becomes an avenue worth pursuing for mobile game design in order to increase traffic usage. 5.2.3 INPUT INTERFACES
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Mobility‐wise speaking, peripherals are a non‐issue for stationary consoles. Mobile devices are often pocket‐sized because of convenience. Full guitar and drum pads are difficult to replicate in appropriate sizes; it would be cumbersome to carry them around. Still, they are necessary to reduce the level of abstraction of the tasks performed and/or permit easier immersion into the game. Nintendo has utilized a stylus and smaller versions of the console peripherals in clever ways (the user can hold the DS handheld device as he would a guitar. The controller itself attaches to the base of the device, with the same buttons as the console version, but without the neck). They often are the result of adapting console peripherals to the mobile sphere, but there are instances in which this did not necessarily happen, they VirtualBoy being the prime example. 5.2.4 OUTPUT INTERFACES
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Even while all TV sets are output interfaces, not all output interfaces are TV sets, or screens (an image could be beamed directly to the human brain for that matter). However, today TV sets are a limiting factor when comparing home consoles and handsets. Home consoles had the advantage to use whatever output interface (TV set) is available at home (cathode ray tube tv, plasma, LCD, etc.) while mobile devices must integrate their own. Integrating their own has made difficult the adoption of standards (screen sizes and resolutions varies not only across manufacturers, but within name brands as well). Designing with different resolutions in mind has definite implications for gaming, as there is the conundrum of sacrificing unused screen size or sacrifice image portions (often with useful game statistics). The incentive for game designers will be to have games played in as many devices as possible. Overcoming output interface limitations will work not only in game designers favor, but also that of manufacturers. 5.2.5 STANDARDS
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The problem of standards that plague output interfaces (screen sizes) is compounded when it is translated to the realm of software. Home console manufacturers seek the inoperability among their systems (and Xbox game cannot be played in the PlayStation, and vice versa). They have translated this practice into 57 their gaming platforms (PSP portable and the DS) but many more handsets can potentially be gaming platforms. Mobile phones, in fact do have games on them. The user base is big enough to be target by a major studio. In order for this to be an attractive offer, interoperability is desirable. There are simply too many devices available, and to code games (software) individually for each has represented a considerable barrier for publishers to fully embrace this market. Some technologies, like the JAVA Virtual Machine, had jumped into the fray to achieve a standard of functionality between different hardware architectures, however, virtual machines sacrifice computing power and memory, and are severely limited graphics‐wise. Standardization across platforms, however, does not seem unlikely. It already occurred in the computing industry during the 80s. SUMMARY
Electronic filtering of communication between players defines the border between on‐line an on‐couch gaming. There is a 100% filtering of communication between players in an on‐line gaming setting, but this does not mean the interaction is diminished. On‐couch gaming, while having no communication filter between players, is limited to a given set of players in simultaneous gameplay. This is due to limitations in screen size, hardware capabilities and human cognitive capabilities. Among the cognitive limitations are that of simple organization. Hardware limitations are that of finger real state. For convenience, devices are created with only one user in mind; it is difficult to operate a device with more than one player. This, coupled with the trend for increase integration of interfaces into single devices, has made the mobile‐couch a primarily multi‐device endeavor. When sociability is put through the looking glass of mobility, other issues arise, mainly those of full connectivity and connection set‐up ease, as well as standards to increase compatibility of devices, which are a pre‐requisite for a successful social mobile gaming experience. But as moving towards mobility brings benefits, there are also impediments that require tradeoffs. Balancing the immersion losses of surround audio and high definition graphics with stronger narratives and intuitive controls and better sensory feedback is a way forward. There are others, like the improvement of virtual hubs to allow games to become social networking outlets. However, the value curve of social mobile gaming will ultimately have different a plotting for individual game titles and genres. 58 6 BUSINESS
IMPLICATIONS
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What are the implications of immersion, customizability and connectivity in terms of business strategy? Are there any effects on the value constellation? This chapter attempts to study new configurations resulting from these questions, as well as power shifts that can potentially emerge. It has become evident that the inclusion of mobility factors into social gaming not only expands the framework by which to evaluate social mobile gaming. There are also immediate repercussions to social mobile gaming as an industry. Moreover, there are changes in the fundamental dynamic of actors with each other that result in the inclusion of other participants. 6.1 IMMEDIATE IMPLICATIONS OF SOCIAL GAMING
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6.1.1 SERVICES INCREASE GAME LIFECYCLES
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Entertainment has become very much a software endeavor. That videogames share the software analogy is not incidental. In terms of revenue, the services surrounding a product are as important as the product itself. That is why videogames were defined in this thesis as an offering that encompassed the duality of product and service. The history of console gaming portrayed videogames as being a “release and forget” affair. Once games were released to the market there were few incentives for their continued support, and their lifecycle was in turn very short. Chiefly among the reasons was that it was difficult to upgrade, or modify in any way, a cartridge or disk other than to release a different product—just like software itself. The inclusion of services changed this, however. Services started very timidly, in fact. Games, particularly those suited for social interaction, like strategy games such as Starcraft (a pioneer in this area), were bundled with access to on‐line battle spaces. These spaces became popular in time, 59 to the point that they became a central development feature in itself, and not a tangential curiosity. The inclusion of such services, which highlighted the untapped potential of sociability, demonstrated that the lifecycle of videogames could be lengthened considerably. The videogame industry shares this conundrum with Hollywood: the enormous diversity in titles and offerings makes it very difficult to get a hold of consumers attention and shelf‐space. Games are easily drown out. It is not uncommon for a game to face a lifecycle averaging 1 year. After this point the price for a game title is significantly reduced. However, the lifecycle can be increased with other services, not restricted to on‐line spaces for social interaction or competition. Content itself (add‐ons, patches, upgrades, etc.) could be easily added. 6.1.2 SOCIAL GAMES AS DRIVER OF SALES
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The mere addition of sociability to a game augments its appeal to a prospective user. A game that today is lacking multiplayer modes simply risks oblivion. The reason is that sociability prolongs the relevance of a game, by creating an initial community, and successfully maintaining consumer retention. This business value builds upon the critical mass factor. Simply put, the more people conform a community, the easier the incentive for prospective entrants to become members of the community. It is social pressure at its best: is best to join because people are joining. Herein lies the attractiveness of communities like World of Warcraft, in that it facilitates the interaction with many players around the globe, 24 hours a day, every day. Not always the community gravitates around a game. It can work the other way around, as existing social networks expand their offers to provide gaming space for its users. Whichever the scenario, it is clear that the value is not merely on the user, as the individual, but in the aggregated fashion of users. The strength is in the numbers. 6.1.3 IMMERSION AND CUSTOMIZABILITY DRIVE COSTS UP
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Every generational transition see game development costs to double or triple. 18 F
F
Table 1 illustrates the geometric increase for representative game titles. Computer X
X
graphics and animation, special effects (like Hollywood) drive up the costs of development (Wesley, 2007). Other immersion elements like sound and haptic feedback, as well as narrativity, have also been expanded rapidly. As a result, developing teams increased and have become very specialized, crafting a game 18 Crossley, Rob, “ Study: Average dev costs as high as $28 million ,” Jan 11 2010, Develop On‐Line. [web Feb 1] HUU
UUH
60 over an extended—and extending—timeframe. Console manufacturers also face steep costs for the development of new hardware to accommodate for immersion. However, development costs for games vary depending on the console platform in which they run. Development for the Wii, for example, is cheaper, because the system is underpowered compared to the Xbox or the Playstation. Development costs for this console could represent anything from a quarter up to a half of the cost of developing for the high‐end consoles (Wesley, 2007). But immersion alone is not the only reason. The more flexible and customizable a game offering is, the more expensive its development becomes. Multiplayer and cooperative modes have become central to a game development, often defining gameplay itself. The need for more content (in terms of story, maps, teammate inclusion) sets a new standard for game development. The costs for maintaining an on‐line service and downloadable content also need to be taken into account. This includes server clusters and the services around them (maintenance, support, customer service, etc.). 6.1.4 SOCIAL GAMES PROMOTE DOWNLOADABLE CONTENT
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Social games also have a concrete business application for revenue stream acquisition, as they enhance the likelihood of buyers purchasing downloadable content. This was shown in previous chapters. The nature of this content can range from cosmetic enhancements (avatar garments, etc.) to functional upgrades (maps, weapons, tunes, etc.). The specific social incentive is to provide content that cannot be conveyed due to the physical limitations of a cartridge or disk to complement a shared interest zone ( Figure 17 ). Moreover, downloadable content can be utilized to X
X
better gauge consumer demand for a title as a whole, or its constituent parts. Downloadable content and the expansion of it in a game does not automatically signal the failure of a title to meet consumer demand; it does not mean that the original content itself is a handicap. In fact, the entire business model of a game can be built in such a way that downloadable content represents most, if not all, of the actual value for the title. This is the strategy followed by Little Big Planet, developed by Media Molecule, in which cosmetic customization elements, maps, and other enhancements are not restricted to minor tweaks, but are the actual core of the game itself. Downloadable content can open the door to alter the rigid pricing behavior for game titles. What is the boundary between delivering digital “extras” to delivering a full game? Doing so would eventually relegate physical game production, packaging, and distribution to entire digital channels, thus reducing costs along the 61 constellation, and ultimately reducing the price itself. Such changes in the value constellation will be explored below. 6.2 IMPACT ON THE VALUE CHAIN
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As the videogame offerings move toward a service oriented model in order to lengthen the lifecycle of game—which should be remembered emerged as an attempt for sociability—digital channels acquire a preeminent role. The addition of such channels underlies new activities (and actors) into the value constellation. The most salient activity is that of network operation, as services lead to increase traffic in the network, be this wireless or fixed‐line. Among the services in this new configuration are the continuation of an on‐line service like the one pioneered by Battlenet (by Blizzard), as well as a virtual hub much like that of Xbox Live (by Microsoft), a sort of über‐lobby in which not only profiles can be stored, but retailing can be performed as well. The inclusion of network operation activities strengthens the relationship between manufacturer and publisher as both provide greater support for continued shelf‐life of a game ( Figure 20 ). X
X
62 Figure 20. Digital channels made it necessary to include network operations to sustain the role of services in videogames. There is a natural fit for network operators with manufacturers and publishers to become more closely linked. The model by Kothandaraman & Wilson clearly illustrates precisely how such relationship can be based on their complementary core competencies to create more value. E‐distribution allows these three actors to control licensing, and virtual shelf‐space. The benefit for network operations is increased traffic in carrier networks. Console manufacturing benefits with the obtainment of transaction fees, and publishing can claim the remaining revenue. On the other hand, there is a power shift from consumers and retailers to the network operators. For the consumer, the choice of network service becomes limited if network operators strengthen their relationship with manufacturers through exclusivity deals for their platforms. The perceived consumer disadvantage, however, is offset so long as the user experience is improved. If quality of service can be raised through a contractual relationship between the manufacturer and the network operator then the end‐user should not be negatively 63 affected. Telia did precisely this kind of exclusivity deal for the iPhone and obtained in return access to new customers. Retailers face dwindling sales of game titles and consoles, as devices move from physical to digital storage, which might represent a negative impact if the market for peripherals is their sole domain left. This could be exacerbated by network operators bundling their offers with mobile phones, and start selling gaming hardware themselves, not just consoles but peripherals as well, an additional dent into retailers spaces. The benefits of such emergence of network operators and the correspondent power shifts need not be disruptive, as threats are often opportunities in disguise, as explained below. 6.2.1 A PLAUSIBLE NEW ACTIVITY: PHONE MANUFACTURING
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Mobile phone manufacturers can potentially be left out of the equation because they donʹt have the framework of gaming in mind when developing games. Nokia’s N‐Gage is a clear reminder of a failed attempt to incursion in gaming. It has not been the only one. As has been explored, mobile phones have had hardware‐centric limitations that impeded interoperability, as far as games are concerned. While software‐based attempts tried to narrow this gap, like that of the JAVA virtual machine, it reduced the quality of immersion and performance substantially. This difference in architectures (screen sizes, processors, control interfaces) has made it difficult for developers and publishers to actively support a hardware device. However, mobile phone companies can liaison with platform owners, such as Sony for instance. Gaming companies can complement their offers with mobile phone companies’ expertise in phone capabilities ( Figure 21 ). It will certainly take the X
X
gaming industry to paths worth taking, in light of the increasing importance that social mobile gaming represents. 64 Figure 21. A plausible n
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he shelf‐lifee of a videogame titlee. Howeverr, immersion and cusstomizabiliity can forr themselvees also pussh costs 65 up. The aim of photorealistic graphics is among the leading causes for this, but not the only element. Fortunately e‐Distribution represents a new avenue to rein in costs and possibly move away from rigid pricing strategies. But there are other impacts on the value constellation. As network capabilities are pushed to the limit to provide solid, undisruptive on‐
line experiences, the emergence of network operators into the value chain is a natural step. This emergence need not be disruptive. In fact, it naturally marries the hardware and software components of gaming with those of connectivity. The tripartite nature of social mobile gaming is based upon the integration of distinct core‐competencies of publishers, manufacturers, and network operators, as only technological convergence can allow. There are, certainly, power shifts from retailers and consumers towards the new emerging actor types. The analysis suggests, mobile social gaming is inclusive for other types of actors, like phone manufacturers, to take the industry to a new level. At the end of the day, it should be the user the one to benefit mostly by these changes in the value chain. This is expected in an increased quality of service and a more convenient offer; one that has proven an elusive promise, even while attempts at social mobile gaming were first performed decades ago, in the always serious business of gaming. 66 7 CONCLUSION
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There were three research questions that this thesis report sought to solve: 1. How is the videogame market configured? 2. Which criteria are important when talking about Social Mobile gaming? 3. How could the above be applied to concrete business situations? Considering the highly secretive nature of the gaming industry, and the fact that social mobile gaming is as much a theoretical construct as it is a packaged, marketable product, the results support the conclusion that this thesis project achieved its aims. It is paradoxical that media companies do not communicate openly their operations. Secrecy is shared by electronics companies as well. For those businesses that gravitate around videogames, where media and electronics overlap, the problem is exacerbated. Simple, specific questions become hard to answer (What is an acceptable sales volume to break‐even? How are sequels decided upon? How does a game title price is broken down to each of the actors in the market?). Studying supply chains to map market actors, for example, becomes daunting. In light of the enormous volatility of the industry, fears are easy to understand. Therefore, the researcher is forced to adopt the role of a detective to grasp past and present: analyzing historical data, collecting published sources in newspapers, digging on press releases or company reports, and at times, tracking sales data whenever available. It is easier for the actors in the gaming industry to talk about the future, for two reasons: First, because general trends are easier to spot and elaborate upon, as they are not perceived as compromising industry positions. Second, and most important, because there is no better way to elucidate the future direction of the industry than that of obtaining the impressions and thoughts of the leading actors shaping it. Their forefront insights are invaluable to relate their concerns and aspirations, and with them, those of the industry as a whole. Their analysis might be right or wrong, but theirs are the decisions that matter at the executive level. Still, having all the facts about the industry to map all actors in the market, is bound to be an ephemeral achievement: actors come and go. The landscape of industry changes in a short time span. Within a console generation—around five to ten years—some practices of the industry have almost become unrecognizable from 67 previous generations. This has forced the analysis to focus in industry activities, rather than actors, which is not an orthodox value constellation analysis, but it is heavily indebted to a markets‐as‐networks school of thought, however. Another point of contention is that social mobile gaming is not yet a reality, nevertheless, attempts to achieve it are found in the early stages of the industry. Apart from some caveats, it is technically feasible to accomplish it today. Which caveats and what is missing conform the second and third questions of this research, respectively. The above being said, the main theoretical models were to be found, from a business perspective at least, in the fields of marketing in general and the organization of markets in particular. The thesis is also supported on theories on value attribution and core competencies. Due to the technical nature of videogames, theory from human‐computer interaction (and mobility) come to complement a technoeconomic view of the videogame market that puts the user as the central element in determining an offering’s desirability and utility—value, for short. The result was a market configuration based on core competencies that focuses in competition as much as cooperation. This distinction not only uncovers the immediacy of the core activities of publishing and manufacturing over the gaming industry, but also, it opens the scope for the inclusion of peripheral activities (like those of component manufacturing and network operation), from other industries; the ones from which gaming originally evolve, and perhaps, the ones to which it is headed. This creates a richer picture of the gaming industry, one that captures its complexity and dynamic. Another result was the discovery of the tripartite nature of social mobile gaming: immersion, customizability and connectivity. All of these are umbrella terms to describe specific goals that game development (and the services that come with it), aims to achieve. Immersion, defined as the user’s situational awareness, was found to be the overarching theme for the concept of gaming. Customizability related to the ability to personalize a social experience. They were later contrasted to mobility and the theme for the resultant mobile‐couch was connectivity. Multi‐device integration came as well as a corollary. All the above was useful to create a framework that could be tuned further when evaluating an itemized gaming offer. Finally, the third result led to specific implications about the nature of the value constellation itself and the videogame market. The first is that the business value of videogames comes from the product itself as well as from the services surrounding it, which not coincidentally were the result of the inclusion of sociability to their offering. The second is that sociability is a motivator to extend the limitations of the physical product, via downloadable content. Both implications share an important 68 feature: they are accomplished through digital channels. It then came naturally that network activities would fit in the value constellation for social mobile gaming. Such inclusion no doubt represents potential power shifts in which retailers can bear the brunt of the negative effects. Overall, however, the panorama should create more value that the one it destroys. A final configuration is proposed, and this came not as naturally, but it is plausible nonetheless: the inclusion of activities around phone manufacturing to the value constellation. There are precedents of mobile companies attempting to enter the gaming space. Their failures should be understood from the perspective of core competencies (or lack thereof). As gaming becomes more and more complex, the inclusion of new actors that complement other’s competencies and strengthen their relationships with each other should be a bliss. Judging from the model, it is not farfetched for this to occur. If this research is to move beyond mere diagnosis to take a prescriptive stance, it will center its claims in improving immersion and customizability in videogames, to tackle the existing divides in the industry (gender and generational alike). A friendlier interface represents and expanded user base. This research considers that in the pursuit of higher performance, some elements have been overlooked in detriment of the user. Specifically, it will request focus on the development of elements that do not accelerate the “arms race” that the industry has created in the search for photorealism. Actions like this will reduce development costs across the board, and in turn, release some of the pressure that high volatility entails. Even further, increasing customizability services represents a lengthening of the shelf‐life of a game title. This also helps in reducing risk. It is difficult to visualize what the future will be like. It is a tragic endeavor because it is extremely tempting yet it is doomed to inaccuracy. It is beyond this paper how social mobile gaming will look like, if it can only lay out the criteria necessary to take into account for its development, it will accomplish enough. There are no trivial attempts in a business as serious as that of videogames. 7.1 POSSIBLE CRITIQUES
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The primary challenge that this thesis could face is the fact that social mobile gaming has not materialized into a concrete business offering, and therefore, it is difficult to assess the validity of the market configuration and the general framework of value attribution. This was evident in the utilization of the console videogame market history as an anchoring paradigm. However, it provided the best approximation available. The results of the analysis, in turn, should reflect 69 sufficient robustness to adequately fit console gaming as well as what social mobile gaming should represent. Any alternative would be too speculative and open to controversy. That is why the report follows a staggered fashion: studying sociability on top of gaming and mobility on top of sociability, the order being arranged to limit carelessness. A second possible critique is that the study avoided itemization of genres and titles. While undertaking such study would add to the specificity of the thesis report, it misses the benefits of a framework to study the nature of the offering itself. This need not be a handicap unless it attempts to resolve specific divides among clear social groups, like 18‐24 year old females in massively multiplayer on‐line role playing games, or senior citizens engaging in genres that improve their mental acuity. A third critique is the general nature of activities rather than actors into a value constellation, and therefore, the impossibility to derive tailored advice to specific companies. This research acknowledges this as rather unorthodox, as it does not fit entirely within a value‐constellation paradigm. Yet, it followed the practical reasoning that discouraged itemization: it made analysis agile while conserving the core takeaways; it was not supposed to be a case study, which has requirements of its own. 7.2 FURTHER RESEARCH
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In line with the previous statement, further research is required to fill the gaps in specificity that this research could not provide. Questions such as which concrete actors are best positioned to play an eminent role in the shaping of social mobile games can best be answered through case studies that utilize the value attribution framework for a company’s offerings. This thesis report looked at a value attribution framework that was not subject to gender or age, under the reasoning that entertainment offers mainly compete for people’s time, rather than other sociological considerations. However, further studies are encouraged to prove if these considerations yield a different subset of elements than those outlined here—or confirm them. 70 APPENDIX
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Limitations of Physical Medium Situation How this is solved Non‐On‐Line Solution
on‐line Game Code Shortcomings Patch Product Recall Expand Non‐gameplay content
Add‐Ons N/A Expand Gameplay content Download Extra Expansions Missions User Generated N/A Content Provide Development Platform Appendix 1. Limitations of Physical Medium. Appendix 2. Console Lifecycles and introduction dates for seventh console generations. 71 Appendix 3. Technologies which demand was facilitated by videogames. 72 Comparison of Stationary and Mobile Gaming STATIONARY MOBILE Power Supply Continous AC Autonomous Battery supply Connectivity Ethernet Cable Wireless Connectivity Input Interface
Bulkier Smaller Weight ~3 KG <1 KG Output Interface
TV Set (screen) Limited screen size, non‐standard Processing Power High Low Memory High Low Price Expensive Cheaper S I Z E Appendix 4. Comparison of Stationary and Mobile gaming consoles. Mobility sacrifices hardware performance. 73 REFERENCES AND
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Dataspelsbranschen The Economist Wired Brookings VGChartz.com 79 Social Mobile Gaming
A FRAMEWORK FOR VALUE CREATION AND BUSINESS STRATEGY
80 TRITA-CSC-E 2010:043
ISRN-KTH/CSC/E--10/043--SE
ISSN-1653-5715
www.kth.se