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Thought I'd repost this here -- a summary of my thoughts on the situation with Eve and CCP that continues to unfold. Originally posted at Quarter to Three:

I've played Eve since beta (with a few breaks here and there) and this sort of thing has happened before -- people threw shitfits over T20 and other such scandals, but for me the big difference with this is that it is getting such traction, snowballing so fast, AND -- most importantly -- it is so one sided. There are very few people trying to defend CCP at this point, especially after it was confirmed that the newsletter was the real deal, when before there's always been a fair number of people defending game changes (like removing jump bridges or the carrier changes or sovereignty changes or whatever).

I think, after the last year, people are just sensing a real change in the way CCP is running things. I don't think anyone is under the delusion that CCP doesn't want to make money, but the problem is that it seems like CCP has changed from being focused on making money through providing a strong game attracting players through word of mouth and customer loyalty to making as much money as possible while they churn and burn the player base. They've forgotten the lessons Eve should have taught everyone else -- that starting small and building your numbers slowly is the way to go, that making a game focused on providing a quality experience players can't find anywhere else is the key to maintaining profitability. The last year has shown that CCP seems to be more concerned about using Eve as a means to an end, milking it for as much cash as they can so they can get Dust and WoDO out the door, rather than making Eve a good product with a loyal following that brings in consistent revenue. Between the "18 months" fiasco of last year, the $99 dollar licensing fee for community tools, the completely underwhelming delivery of Incarna which has been hyped for more than half a decade, and now the completely two-faced discussion of microtransactions (if you can call a $70 monocle a "microtransaction) and their relation to gameplay, CCP just seems to be making a series of decisions that are completely contradictory to how the game was being run until around 2008-2009.

Even the tone at this year's FanFest seemed completely off to me, very different from the two years previous. Everything was focused on how great they were as a company, but the discussion of how this was good for Eve and good for players almost seemed to be an afterthought. The Permaband video this year wasn't about how awesome Eve was, it was about how much bank CCP was pulling down. The party was swollen with Icelandic locals to the point that a lot of Eve players just felt unwelcome at their own party, and left a bad taste in the mouths of a lot of the players. Instead of FanFest being a celebration of Eve and focused on how great the Eve community is (and it is great, despite the backstabbing and vitriol you sometimes see on forums and in game), it was more like a party CCP threw to show off. It was really disappointing, and I say that as someone who thought her first FanFest was literally one of the best experiences of her life.

I've poured a lot of blood, sweat, and tears into Eve over the last 6 years. Eve has been the only MMO I've ever been interested in playing because it was the only one that seemed to be committed to delivering on the promise of the genre, making a true virtual world, and I know there are people at the company that still see that kind of promise in the game and want it to be all the things that people imagined for it. The problem seems to be that the money men have become the ones in charge -- and the same way Bobby Kotick and his people from the packaged goods industry turned Activision into a CoD and GH churning machine, they seem to be turning CCP into a company focused on squeezing as much money out of the player base in the short term without regard to the company's long term profits or reputation. For a company like CCP, which basically got its start by winning the hearts and minds of its players by building a strong brand and a player-focused game, and thrived on word of mouth and good press, this seems like suicide. I don't even understand a lot of their decisions from the "get money above all else" standpoint -- surely you'd sell more than ten times as many of those monocles at $7 than you would at $70. That's what's just baffling.

The newsletter is problematic because, at least to me, it clearly comes across as an attempt to socialize an idea that may be very unpopular among the rank and file in the company. If you look at it, the people on the pro-MT side are Principal Game Designers, Lead Game Designers, Directors of Content...people in management who are going to be driving those policies. Who is speaking against it? One person who is in the Research and Statistics group. If it was meant to provoke discussion, it is not providing a very balanced view, or a feeling that dissenting opinions are going to be welcome -- so either it's a very poorly made internal publication or it's piece of propaganda, neither of which reflects well on the company.

And then to see Pann's post that started that thread completely ignore the newsletter is even more baffling. When the problem with your image is that people think the company is lying to its customers, why would you ignore what is clearly the root of the problem? It is only going to reinforce the belief that you are being disingenuous. At least acknowledge it, even if you have to say "a further statement on that issue will be forthcoming." I just don't get it.

CCP thrived on being as open and honest with the player base as it could be in the early days, and had a lot of customer interaction up and down the management chain. Obviously, as the company grows, that becomes infeasible, and no one wants to see another T20 debacle. But CSM exists for a reason, and CCP appears to have completely cut them out of the loop, and I don't understand why -- or rather, the only reason I can see why they would do it just makes them look like cowards. I don't think most of the player base is so opposed to MT to completely rule it out, and I don't think most people have anything against CCP making more money from Eve, as long as the health of the game is maintained. If CCP wanted to have an open and honest discussion of microtransactions, up and down the spectrum, I am sure that would have given them a great deal of ire, but I can almost guarantee that it would have gone better than hiding their true intentions from the player base until it was too late. Now they've not only lost the lunatic fringe, they lost the trust and goodwill of the players who may have been uneasy with microtransactions but were willing to work to a solution that benefited everyone. The loss of that trust and goodwill is something that will hurt CCP more than any number of ragequits, because the more they make it look like nothing they say can be trusted, that the CSM is as much of a sham as its biggest detractors claim, and that they are focused only on what they can squeeze out of the game in the short term, no one is going to buy an apology or any sort of reforms as anything more than damage control, not a sincere effort to make things better.

And in the long run, that's bad for the game. And that's bad for those of us who really love it, even if we don't have time to play as much anymore, because we want to see it succeed and show that there's a better way to do business than the churn-and-burn model.

As my parents would say, I'm not angry; I'm just disappointed.
Yesterday, Deirdre pointed me to this article by Dan Amrich, a former games journalist that does PR for Activision now, about Bobby Kotick (CEO of Activision) and his infamous, oft-cited quotes on the game business that have made him a bit of a pariah to many gamers.  Dan tries to make the point that most of the comments Kotick is pilloried for were taken out of context and that Kotick isn't the evil, RoboCop-style corporate executive he's made out to be.

This has also popped up for me recently because I have declined to join the Starcraft 2 bandwagon, despite the encouragement of my brother and a number of my friends, partly because I really don't want to support Activision these days, and Kotick is a large part of that.  While he tries to make the point that Kotick was taken out of context and that what he was saying wasn't as bad as it is made out to be, I'm going to have to disagree and say that the context really doesn't help it all that much.

Let's just take a look at them again and I'll show you what I mean.  I encourage everyone to go read Amrich's original article so you get the full context; I'm going to try to summarize it here, but just to make sure you get both sides of the argument you should read the full context.

"Take all the fun out of making video games."

The first quote Amrich goes over is this one:

Jeetil Patel, Deutsche Bank Securities - Analyst
"What do you think the retailers' willingness these days is to hold inventory on the video game side? Are they building positions today or are they still very reluctant and very careful of how they are buying?"

Bobby Kotick, Activision Blizzard, Inc.
"I don't think it is specific to video games. I think that if you look at how much volatility there is in the economy and, dependent upon your view about macroeconomic picture and I think we have a real culture of thrift. And I think the goal that I had in bringing a lot of the packaged goods folks that we brought in to Activision 10 years ago was to take all the fun out of making video games."

"I think we definitely have been able to instill the culture, the skepticism and pessimism and fear that you should have in an economy like we are in today. And so, while generally people talk about the recession, we are pretty good at keeping people focused on the deep depression."

Dan tries to point out that this is all about the financial side of the video game business.  "Taking the fun out of making video games" was a joke that fell flat and what Kotick really means in this quote is that he wants people to treat the video game business as just that -- a business.  That's all well and good, and I agree -- it is a business.

The problem is that the video game industry is not anything like the "packaged goods" business.  Video games are not soft drinks or toothpaste.  The product they are probably most similar to is movies, as describe in the article at Squaremans, "They Know It Doesn't Work".  And, unfortunately, it seems like Kotick is driving video game production to the same place where movies are now (but more on that later).

The second paragraph is really what makes me crazy though.  I understand the idea of saving for a rainy day, and sticking to budgets, and remembering that there are always going to be bad times and you need to make sure you are ready for them.  That's all well and good, and I can't blame him for that.  However, "keeping people focused on the deep depression" and cultivating a culture of skepticism, pessimism, and fear sounds like a good way to make everyone of your employees, especially at the low level, constantly worried that they will lose their job and be cut from the company.  From Kotick's point of view, I can see what he thinks -- they'll produce their best work because they're afraid if they don't, they'll get canned.

The problem is, that is a shortsighted strategy (which is the problem I have with Kotick in general).  That doesn't make people want to do good work for you -- it makes people want to work just good enough to not get fired, and as soon as a better opportunity comes along, for a company they want to work for, you lose them.

If Kotick wants to keep good talent in the future, he needs to realize that you can't lead by creating fear, uncertainty, and doubt within your own employees, especially in an industry driven by creative talent -- at least not for very long.  You certainly can't lead by trying to screw over the people working for you who create the best-selling games of all time.  Whether or not the allegations by ex-Infinity Ward employees are true, one thing is clear -- Kotick lost the talent that created games with billions of dollars in sales for Activision.  If the allegations of the ex-Infinity Ward employees are true, he actively drove them out of the company by creating a hostile environment; however, even if Activision's claims are true, and West and Zampella were actively trying to break their contract and wiggle away from Activision, Kotick still failed to be a good leader, in convincing them that Activision was the best place for them to be.

"You know, if it was left to me, I would raise the prices even further."

The following quote is from an Activision earnings call:

Tony Gikas:
"[...] And a second question, if you don't mind, just your comfort level regarding pricing of some of your new games that have some expensive controllers and any feedback that you had from retail as we move through the holidays. Thanks, guys."

Mike Griffith:
"[...] On the pricing, we've had for all of our launch titles in the back half of this year, some of which contain peripherals, as you point out, very strong retailer acceptance and support for all parts of our plan, including our merchandising plans, our marketing programs, and our price points."

Bobby Kotick:
"And Tony, you know if it was left to me, I would raise the prices even further."

Amrich points out that from the audio, Kotick is clearly making a joke and laughing at himself -- and goes so far as to admit that it's probably not a very good joke in a recession when people are trying to save money.  Okay, fair enough.  It's a joke, and a bad joke, and everyone does that from time to time.

Here's the problem though; not only does it portray an insensitivity to the penny-pinching consumer, and make him seem like he's completely out-of-touch, it's an example of a guy who just doesn't seem to understand why people think he's horrible for the industry.  If it was a one-off joke that went sour, okay.  But the problem is that it fits a pattern of behavior where it makes it seem like he's trying to wring every last cent out of consumers with the least cost to himself; this quote came at a time when Modern Warfare 2 was going to be coming out $10 more expensive than the vast majority of other AAA titles (on PC anyway) and even worse if you were in the UK, while dramatically reducing the functionality of the product.

As a CEO, a significant portion of your job responsibility is effective communication -- you are the face of your company for many people.  I have to imagine that reinforcing a bad perception is probably not a very good idea -- and I have to wonder if anyone can actually tell Kotick that he might want to be a little more careful with his language in the future.

Bobby Kotick only wants exploitable franchises

This is the quote that bothers me the most:

Jeetil Patel - Deutsche Bank

"[...] Why are you de-emphasizing some of the kind of lesser known brands and focusing on the bigger franchises out there? Is it industry that is causing that or do you think it is more strategy on your part that seems to be [winning] big? I kind of want to understand the dynamics there."

Robert A. Kotick

"With respect to the franchises that don't have the potential to be exploited every year across every platform with clear sequel potential that can meet our objectives of over time becoming $100 million plus franchises, that's a strategy that has worked very well for us. It's something that we have been very disciplined about and so while there are lots of promises for a lot of these products that we had in the portfolio, I think generally our strategy has been to focus, especially given the increase in development expenditures on the products that have those attributes and characteristics that we know if we release today, we'll be working on 10 years from now. And that has been -- you know, narrow and deep has been essential to our strategy of how you expand operating margins. The difficulty in establishing new franchises or unproven franchises as we have seen over the last 20 years, that is one of the great challenges of the business and I think that you have a less than accepting and tolerant retail environment.

Amrich's response seems to be that "exploit" in this context doesn't mean what people think.  Yes, that's probably very true.  That's not the problem I have with this quote though.  What Kotick is basically saying is that he only wants to spend money on developing "sure things," and then developing them as much as possible.

This takes us back to something I said about the first quote.  Video games are not packaged goods.  Video games are a creative enterprise where a "franchise" will only get you so far if the game is crap.  Once again, I'm going to point back to that Squaremans article: each game eventually has to stand on its own and at the end of the day you can't just say "only make the games that will be blockbuster successes."  Eventually, people will get tired -- they will not keep buying every Guitar Hero game that comes out.  When the series started, it was a new and inspired idea, and a great party game -- the problem is that if you just keep churning out new games that offer nothing new but more songs, eventually people will decide they have enough songs and just stop buying them.  You can already see this trend with Guitar Hero sales.

If Kotick gets his way, he seems to only want Activision to produce games that can be cranked out every year like clockwork.  In the short run, I'm sure this will be great for Activision -- Guitar Hero, Call of Duty, and other games of that ilk can crank out billions of dollars in sales before they sputter out.  Not only does this disappoint me as a consumer though -- I really love seeing games that do new and interesting stuff, like Portal -- in the long run, this is going to hurt Activision.  New franchises aren't going to come out of thin air, and your old ones will eventually grow stale, especially when you crank them out every year and seem to chase away the talent that gave you them in the first place.  What will Activision do when Guitar Hero and Call of Duty eventually burn out, or get superseded by a product made by a company with a more innovation-friendly development process?  It can coast a long time on WoW income, I suppose, but eventually, someday, that will come to an end too.

I suspect Kotick's answer would be that he'll simply buy a studio making another game he can exploit as a profitable franchise -- but after the whole debacle at Infinity Ward, how many studios are going to see Activision's umbrella as a good place to take shelter?  Blizzard, I suspect, has been lucky enough to retain a lot of autonomy simply because WoW is such a cash cow -- but when the creators of the #1 selling game of all time can get the shaft, they still have to be a little nervous.  I would be, anyway.

I don't want to see the video game industry turn into the parody of the film industry you see in a lot of 80s movies, with "Rocky 17" in the theatres.  Unfortunately, with people like Kotick at the helm, it seems like that is likely what we'll end up with -- endless strings of sequels of declining quality.  Thankfully, unlike the film industry, the video game industry is not limited by the number of theatres -- bad games can't chase good games out of the market, especially as digital distribution becomes more and more prevalent.  That means that it's less likely people will continue to buy sequels just from inertia -- which is a good thing for the industry, but bad for companies that think they can survive by simply milking franchises to death.

So, to bring this all back to Amrich's assertion, that Bobby Kotick is only seen as the bad guy because his quotes have been taken out of context, I have to respectfully disagree.  It's not a few verbal gaffs that make people think Kotick is a bad guy, it's his whole style of management and what it means for the hobby as a whole.  I can't disagree that he's been great for Activision's bottom line, at least for now, but if he continues down the road he's on, I think our hobby -- and Activision with it -- will suffer.

Is "free" the way to go?

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No doubt, if you've been watching the news about MMOs recently, you've heard about Dungeons and Dragons Online's new business model.  From that article, it certainly sounds like game's fortunes have taken a turn for the better as a result.  I've heard a lot of people embracing this free model, and recently at FanFest CCP made it clear that Dust 514 is going to be free to play, with a microtransaction model.  Is this the way to go with everything?

I'm not sure.  The idea of getting a better deal if you pay more causes a reflexive hiss from me, because I'm not a huge fan of the idea that if you are better off in real life you should be better off in a game.  I don't like RMT at all for a similar reason, but I realize that it's impossible to completely eliminate.

On the other hand, I have no problem buying a game, and then buying an expansion for it that gives me more content with a normal game, like Sins of a Solar Empire or Dawn of War.  How is that any different?  Well, I think in the case of an MMO it strikes me as a way to increase peer pressure to pay more.  If I want to go to one of the extra dungeons in DDO now, I have to buy it to stay with my friends.  That's the same problem I have with World of Warcraft and similar MMOs, where you have to buy an expansion in order to get 10 extra levels or go into the new area -- only now, you have to do it more often in order to keep up.

Of course, the counterpoint to this is that you may pay less for all those little microtransactions every month than you would with a subscription.  That's a fair point, but the problem still remains.  When I play an MMO, I want to be on an even keel with the other players, and I don't want to have my play with my friends segregated because I don't want to sink a bunch of extra cash into the game.  The free expansion model is something that attracted me to Eve (aside from the actual gameplay elements).  I've been thinking about how you'd translate that model into Eve, and I admit I'm having a hard time thinking of anything that I'd be satisfied with that would also be a valid funding model.

Pay extra for access to nullsec regions?  Pay extra for the skills to use tech 2 items?  Then suddenly it becomes something you have to pay for to compete (and Eve is nothing if not a competitive game) or to go where your friends are, and neither option really appeals to me.  Paying real money for tech 1 BPOs?  That sounds like the model they are using for Dust, and it actually doesn't sound too bad -- but I think those BPOs are going to be wildly expensive, because I don't know that there are really that many in the game (well, and there's a bunch already out there that people got for free), which sounds like it's not going to be a good funding model from CCP's point of view.  Ultimately, I think Eve's current model suits it best -- a subscription model to keep everyone "fair," despite the fact that multiple accounts or PLEXs can give you an advantage, with additional fees for things that don't give you any real game advantage, such as getting a new character portrait or transferring characters between accounts.  Anything they added to sell on a microtransaction basis would have to be similar -- new clothing patterns or building designs for Incarna, for instance -- or I suspect a large portion of the player base would be upset.

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