Hearthstone: Heroes of Dailycraft

In Hearthstone, the rewards for daily quests dwarf the rewards for any other in-game activity. You get 40 to 60 gold per day for completing a daily quest. The only other repeatable way to obtain gold is by winning games against real players for 1 gold per win. Thus, a single daily quest is worth at least 40 wins or roughly 80 games, assuming a 50% win rate.

Some players have started complaining about the rate that gold is obtained. They want the 1 gold per win to be increased either directly or through extra rewards for win streaks. Some players have even called for a gold reward for lost games as well. I am not sure how I feel yet on the matter, but I believe there is a good reason why Blizzard chose to set it up this way: World of Warcraft (WoW).

World of Warcraft still has millions of subscribers. Those players are the primary audience for Hearthstone. Because they have to pay money for game time, they spend most of their free time playing WoW over other games. That includes Hearthstone. Blizzard saw this and needed a way to make Hearthstone appealing to that large playerbase.

World of Warcraft is a massive time sink. Most players can put as much time as they have into it and still not do or see everything. If Hearthstone were a time sink like WoW, the WoW players simply would not have the time to get new cards at the same rate as the majority of players, and the majority will definitely be free players. Blizzard has fixed this potential problem by essentially limiting the productivity of your time in-game to 1 or 2 hours every day.

Players can of course play more if they enjoy the gameplay but will get no more good rewards until the next day. Some days a player might be just a few gold away from the 100 to buy a booster pack and decide to play more. Also, as a player increases their collection, there are many more card combinations to try out. However, for most days and most players, there will not be much incentive to play longer after the daily quest is finished.

Hearthstone will not be a typical Blizzard game. Consumers will not pay $60 upfront and get full access. Instead, they will logon a little bit every day slowly collecting about 15 cards per week, or they will pay a little money every month to keep things moving along. It is a typical free-to-play game. If a player wants it to be their primary game, they will need to spend a little money each month to keep the game interesting for long hours. If a player wants to play for free, they will have to play it as a casual game.

For those angry over the game’s monetization, understand why the game is designed this way. If your style of playing does not fit with the styles Blizzard is catering to, there are plenty of other card games that may. For example, Scrolls is a game made by Mojang that goes with the upfront payment model. You pay $20 to get a free deck, and then earn cards at a much quicker pace than Hearthstone.

Definitions: Genrefication

Genrefication is the process by which media like movies, music, and video games are classified. When it comes to video games, this involves categorizing games based on a combination of their gameplay and narrative styles. Some games, such as Tetris, are purely game with no narrative whatsoever. Other games, such as Heavy Rain, are almost entirely narrative. Most games have some combination of both. While the definition is pretty basic and easy to understand, what is interesting are the issues genrefication has created in the game industry.

In the early days when computers and consoles had many technical limitations, it was all about the gameplay. These days we are getting to the point where narrative heavy games are feasible for the big studios to make. Developers now can choose to innovate in story or gameplay. There is a lot of debate within the game industry on whether developers should focus on creating new, interesting stories or new, interesting game mechanics. It is usually very hard to do both. There is just not enough time in most development schedules.

There is debate even from the player perspective. Sometimes a good story is enough. Bioshock Infinite had a great story. Even though the gameplay was not anything new, it was still a fun game to play because of that story. There were a few key player choices in the game that could influence the story too. Story-heavy games are also easier to introduce to non-gamers. If video games are ever to be a serious medium, we need people of all ages playing them. A game that feels like a movie will naturally feel more familiar to non-gamers, and maybe they will branch out to more gameplay-heavy games.

It is possible narrative games will become their own entity separate from traditional games. Perhaps a better name is interactive story. Imagine going to the movies. At certain points, you could vote for what choice a main character would make using a device attached to the back of the chair in front of you. The other people might not always vote for the choice you wanted, so later you could buy the interactive story to view at home and get 100% control over those choices.

Another issue caused by genrefication is getting funding from game publishers. When developers are trying to pitch a new game to publishers, it will many times be turned down immediately if the game does not fit into the clearly established popular genres (Action, RPG, Strategy, Sports, etc.). The publisher’s stance is actually backed up by studies. Games that fit the mold usually sell more than games that do not fit in. Most consumers like their familiar genres and do not want to take chances.

This problem has caused a lot of anxiety with developers. They feel like they have no creative freedom. There is a blueprint for making a popular game, and that is what they have to make. It is grunt work, plain and simple. Many developers have given up on AAA games and now make indie games. It is a lot harder financially to pull off, but that freedom can be worth it. Without the big budgets, indie developers have to focus on gameplay innovation, which is great for those developers (and players) that are not interested in the movement to make more narrative-heavy games.

Lastly, is the issue of how useful classifying games into genres really is. As indie games have become cheaper and easier to make, there is an incredible amount of experimentation in game development these days. Some games take elements from many different genres. They cannot be described by a simple genre label. You can read more about this in “The Age of the Hybrid Game Genre“.

The game industry is still young compared to the other media. It will be many years before these issues are cleared up. They may not be in favor of developers either, but it looks like indie games will be successful for years to come. Even indie games are not agreed on though. I will cover this in a later post.

Catering to All Players in MMORPGs

It is much better for developers to specialize their MMORPG for a specific audience, whether it be open world PvP, casual, raiding, etc. However, there are many MMORPGs these days that try to cater to all playstyles. The problem is, none of them, including World of Warcraft, really do it very well. They have all the data to identify the various types of players that regularly play their game. What they don’t do is make content for all those players. MMORPG developers would do a lot better if they follow one simple rule: Every content patch must include content for all the player types that regularly play.

Case Study: World of Warcraft

For the sake of simplicity, I will just identify three player groups: Green, Yellow, and Red. These terms correlate with the more general terms of Casual, Mid-core, and Hardcore but are not the same. After all, a Casual player of World of Warcraft and a Casual player of Facebook games are totally different.

Green players play the game sporadically. These players generally spend the most time leveling characters, doing daily quests, and obtaining cosmetic gear. They will occasionally engage in PvE dungeons and PvP battlegrounds — especially while leveling characters — but they have no long term plans for endgame progression. When a character gets to the maximum level and they have gotten all the goodies from daily quests, they start leveling a new character.

Yellow players represent the in between. Some of these players are in transition from green-to-red or red-to-green but not all. They put a good amount of time in the game and fully understand the game mechanics but for some reason choose not to go further to become red players. Usually, this is because they do not have the time or they find it too tedious. They spend most of their in-game time with dungeons, scenarios, and battlegrounds. They realize they can not get the best gear as raiders and arena PvP players, but they still want to have some progression for their characters over time.

Red players spend the most time in the game. For them, the game has become a hobby. It is what they do. Some people collect stamps; red players play this one MMORPG religiously. They want to be the best. They dream of being number 1 on the PvP rankings or being the first in the world to clear the latest raid. They might never reach those dreams, but every content patch they are ready to put in the time and energy to give it a very hard try. Most of them still have normal lives, a job, kids, etc, but their primary goals are centered around progress in the game. They want those exclusive titles and the best looking gear to show off.

Knowing these player types, an ideal content patch would contain a new daily quest zone, a new dungeon, and a new raid. The green players will enjoy the daily quest zone, the yellow players get a new dungeon to run, and the red players get a new raid to sink their teeth into. Of course there are many other combinations of content that would work such as a new reputation with cosmetic gear for green players, a new battleground for yellow players, and a new arena map for red players. Just add one thing for each “bucket” and your players will be happy.

Blizzard is one of the best in the business, but even they frequently release content patches that do not cater to non-raiders. Part of this is the lack of adapting to a changing playerbase. The WoW playerbase today is much more casual than the WoW playerbase of Vanilla and Burning Crusade. I remember when I started playing, pretty much everyone’s ultimate goal was to get into raiding. That is not the case anymore.

Players have grown up and now have families and jobs. They still like to play but no longer than 2 hours per session. Raiding just takes too long for most of them to be interested in. I believe Blizzard has slowly gotten better at this over the years, but there are still times they forget about the green and yellow players.

Note that I have not considered the PvE – PvP divide. In reality, there are 6 audiences playing the game made up of Green, Yellow, Red PvE players, and Green, Yellow, Red PvP players. I believe it is probably too much to ask to have content for all of those players in each content patch. Just make sure to have one piece of sizable PvE or PvP content for Green, Yellow, and Red players.

Other MMORPGs

I have used World of Warcraft as the example, but this rule applies to all MMORPGs. Sure, it takes more work to cater to more players, but is that not what developers want? The more players, the more subscriptions being paid for or the more microtransactions that occur. Developers get more money, players get more content that they want. The number one complaint players have with a MMORPG is lack of content caused by a series of content patches which have no content they are interested in. Most MMORPGs do get regular content updates. The problem is it usually does not cater to more than a small subset of the player base.

As another example, look to Star Wars: The Old Republic. The developers should be releasing content patches that adds something for all three player types. Patch 2.1 mostly just added to the cash shop, a disastrous move overall. Patch 2.2 added content for Red players (more raids) but not Green or Yellow players, not the best content patch for the overall playerbase. Patch 2.3 added content for Green (new daily quests) and Yellow players (new dungeons) but not Red players, better for the overall playerbase but still not perfect.

Their development team did have layoffs, so maybe it is impossible for them to follow this rule every content patch. That could even be the reason they were not able to compete with World of Warcraft. They just did not have enough content in each content patch to satisfy most of the players. Only the most casual players, still going through class stories (the best part of the game), maintained their subscriptions. If EA / Bioware want to compete with World of Warcraft, they cannot release content patches that only serve one segment of players.

This can apply to other MMORPG developers too. Maybe you cannot cater to all of the players in every content patch. Well, at least make sure to cater to two out of three, the majority. When enough players are not getting content, they stop spending their money on it. As a developer, you have to know your audience and cater to them. There are enough alternatives out there. Your players will not stick around.

Predicting the Bottom for World of Warcraft Subscriber Numbers

It seemed inevitable, but World of Warcraft lost subscribers again. According to the latest Activision-Blizzard Conference call, the current subscriber count is now 7.7 million. That is a loss of 600,000 subscribers in three months. A lot of people, myself included, are wondering when the subscriber numbers are going to bottom out and how many subscribers the game will have then.

We know in the last update that WoW lost 1.3 million, bringing it down to 8.3 million subscribers. Now the loss is only 600,000, so about half the loss as before. If that pattern continues, the game will lose another 300,000 in the next three months. That gives us a sequence of 150,000 -> 75,000 -> 32,500 and so on. In a year’s time the game would have around 7.1 million subscribers. However, the next expansion will definitely raise subscribers for a few months after it releases.

I believe Blizzard will release the next expansion pack about 8 months after the last Mists of Pandaria content patch. The last Mists of Pandaria content patch is 5.4, but it has not released yet. It is on the test server though (since June). Judging by past history it will be about 2 months (August) until 5.4 is released on the live servers. Eight months later would put the expansion release in April 2014.

It is July 2013 now and the expansion will be out in April 2014 for a total of 9 months until the expansion’s release. In 9 months, the game will lose 300,000 + 150,000 + 75,000 for a total of 525,000 subscribers lost by the time the next expansion is out. That leaves around 7.2 million subscribers still subscribing. I believe the expansion will add 500,000 to 1,000,000 subscribers for a month or two. Then, the game will either stay flat around 7 million or start losing subscribers again.

I know there are still a lot of active players that love the game, but each expansion is probably going to bottom out further and further just a little bit. The current expectation is that the last expansion will be when characters can get to level 100. That is only two expansion packs. The next expansion pack in 2014 will bring subscribers down to 7 million. The following expansion pack in, I predict, 2016 will bring subscribers down to 6 million. Finally, in 2018 I predict a free-to-play mode will be added to the game, with the subscription option still available.

The Age of the Hybrid Game Genre

We humans like to classify and categorize things into nice boxes. It helps us relate things to one another. It was no surprise then that games developed into genres, a process called “genrefication”. Game designers would have a lot of fun playing a good game, see flaws in the game design, and then want to make their own incarnation to correct those flaws. This process over time, just like in film and music, guided the creation of new games into genres. For many years games were very distinct in which genre they were. Half-Life 2 was a Shooter through and through, as Doom was before it. Times have changed though.

While it is true there has always been a little mixing between genres through the years, at no time before has it been as common as it is today. Almost every day you will see an announcement of a new game that takes multiple elements from the previous distinct genres and makes a new game out of it. You would think this would make the games boring, but I still find hybrid games to be a lot of fun.

A big part of the fun in playing a new game comes from learning. That is, learning the rules of the game (the mechanics) and mastering them. A game that mixes elements of different genres involves a lot of new learning. Yes, key parts of it may be pulled mostly intact from previous games, but the entire picture, all the game mechanics together, can take some time to fully grasp. That takes learning.

Right now the most common strategy that developers use is to add RPG elements to non-RPGs. I have already written about this before in “The Proliferation of RPG Mechanics“. In short, it adds more progression to the game, extending the time players spend in the game and increasing the likelihood they will buy DLC down the road. As Shooter, RPG, and Strategy are the dominant genres, Shooter-RPG, Strategy-RPG, and Shooter-Strategy are the most common hybrid genres.

A good example of the Strategy-RPG hybrid is the Fire Emblem series. You play out turn-based tactical battles with units on a map (Strategy), but your units can level-up, get new abilities, and equip items (RPG). For the Shooter-Strategy hybrid, the Rainbow Six series comes to mind. The basic gameplay is like a Shooter, but before the mission starts you can plan the actions that other soldiers in your squad will perform during the mission and give tactical orders in the middle of the mission.

While mainstream developers are hybridizing their games, it is even more common in the indie scene. Because nearly everything is a hybrid, we have gotten to a point where games don’t fit into genres nice and neat. Developers are adding more and more words to the game genre in an attempt to make it clearer. Here’s a quote from the Gun Monkeys page on Steam: “GUN MONKEYS is a Procedurally–Generated, Physics-based, Online Deathmatch platform game”. I believe this is a very minor negative compared to the positives of all this experimentation.

Hybrid games are still a lot of fun to me, but I warn developers not to get too caught up simply repeating this over and over. Those tried and true game mechanics still work — some old mechanics have not even been fully explored yet — but players also want to see all new game mechanics. Perhaps the best combination is an even mix of new mechanics with old mechanics. With the high cost of most games, we want to know a little bit if we will like a game not. Familiar game mechanics will make us comfortable and willing to buy, but we also want a little bit of new.

Tropes vs. Women Does Not Go Far Enough

I have watched the first two videos in the Tropes vs. Women series by Anita Sarkeesian. While I have found it interesting to look at games I have previously played in a different light, this project does not go far enough. This is because it only covers a small portion of the games released.

In both videos Anita stated how the games she explained to have these tropes in them were just some of the examples, but we really need to know how many videos have these tropes compared to all the games released. This would give us a percentage of games with these tropes. Only then would we know if these tropes are so prevalent as to be a problem.

As a hypothetical example, let us say in the non-gaming forms of media, tropes vs. women appear in 50% of all products released. If video games are sitting at 40%, we are actually in a better spot, at least better than the average. If it turned out that video games were above that 50%, only then can we say that tropes vs. women is a problem in video games. You see I am not convinced that it is such a big issue without hard data. A few examples shown in a video is entertaining but does not cover enough to tell us the answer.

I realize that playing every game released to look for these tropes would be too much for a single person, but maybe all games that sold more than 100,000 at retail would be a start. Maybe Anita is already doing this, but I have not found any information on her methodology for picking games to play and study. I have noticed many popular games but also some lesser well known games. There does not seem to be any rhyme or reason so far.

I did not donate to the Kickstarter myself. Actually, it was already over by the time I heard about it. Maybe this video series was not meant to be comprehensive, just an entertaining series to start the discussion on the issue. I do not know. If, however, Anita Sarkeesian’s goal was to prove that tropes vs. women are a problem specific to the video game industry, the Tropes vs. Women series does not go far enough.

Maybe the money would be better spent as part of a university research project. Get a bunch of college graduates to play games and submit information on all the tropes they find. Or maybe even a crowdsourced project. Get gamers to submit the tropes vs. women they experience in games, though there could be problems if players submit false information.

Now, the video series will not be over for a while. I will keep up with them to see if anything changes, but I cannot see a video series possibly covering all the games released. We need hard statistics, hard data that objectively proves there is a problem. Maybe that is part of the problem too. Not everyone agrees whether a trope is bad or not, but that is a much bigger issue.

Microsoft and Sony after E3

If you remember my last post about Microsoft and Sony, I mentioned Microsoft might focus on games at E3 to make up for not showing much of them at the initial Xbox One reveal. Microsoft did just that yesterday at E3. Their E3 conference was almost entirely about the games. They did not mention Kinect really at all, and none of the TV show stuff was mentioned. Sony focused on the games mostly too, but they also announced some non-gaming features like being able to rent and digitally buy TV shows, movies, and songs. If that were it, I would put both companies even for who will win the first round of the new console generation. However, there are two big issues that are favoring Sony.

Ever since the Xbox One reveal event, gamers have been criticizing Microsoft left and right for the online connection requirement and for essentially banning used games. Until yesterday, no one was sure exactly how Sony would treat used games. They had said it would be up to publishers, which I believed to mean the console had the technology to ban used games, but it was up to each publisher to make the decision for each of their games. Well, Sony announced that there is nothing in the console against used games, and the console does not require an internet connection. This is huge plus for core gamers. Sony has a leg up over Microsoft, but it gets worse for Microsoft.

Both Microsoft and Sony announced the prices for their new consoles. The Xbox One, $500, and the PS4, $400. That is another huge boost for Sony here. I believe both consoles are using roughly the same hardware, so Sony is definitely taking a big hit here. That is going to greatly increase their installed base compared to Microsoft, and Sony hopes those gamers will buy enough games to make up for that loss. If you remember the last generation of consoles, the most popular PS3 model cost $500, and the most popular Xbox 360 model cost $400. Microsoft and Sony have truly switched places this eighth generation.

I think this is very bad for Microsoft. We can already see from history what happened to the PS3 after trying to own the living room, but it could be even worst for the Xbox One. The Wii U was also going for a wide audience and mostly failed. Sure, the Xbox One will have better graphics and more exclusives for the core gamer, but that $500 cost is a huge deterrent. Right now, PS4 appeals to the core gamer, Wii U appeals to the gamer family (young couple with kids), and tablets/smartphones appeal to the casual gamer. That does not leave much for Xbox One.

As always, Microsoft could make changes over time. Even though the Xbox One is $100 more, I still think the used game and require online are the bigger issues. People just do not want anything getting in between them and their games. Relaxing their stance on those issues and some price cuts could even things up again.

My Time as a Volunteer Game Master

A lot of players in MMOs think it would be cool to be a game master. Well, I got that chance for about a year a while back, and now I am sharing my story. The year was 2003. My console of choice, the GameCube, was not living up to my expectations. I felt like I was always waiting for the next game to come out that would end up getting delayed or cancelled. My PC had become outdated. I did not have the money to buy a different console or a new PC. I still loved gaming though.

As I got bored with my existing game library, a friend told me about a free online game called Mu Online. I liked some things about that game, but its importance is that it introduced me to the Asian MMO beta. I had never really known there were free betas online before. I ended up trying out many of them including Kal Online, Knight Online, and Risk Your Life. These games really were not that great, but I could not afford the subscription MMOs. I did not even know an MMO could be better.

Risk Your Life was a game made by a Malaysian company. It had many of the same characteristics of other Asian MMOs, but shortly after I started playing, I heard there was an American company that was going to publish the game for America. That company was Planetwide Games. They created a website with some forums, and I started posting while I continued to play the Malaysian version. I was excited at the possibility of better connection quality to the servers located in America and a better translation into English (Asian translations were pretty bad).

The Closed Beta for the American version was delayed many months. Finally, the first invites went out in the summer of 2004. I remember anxiously waiting to see if I would get a beta invite. I did not get in the first few rounds but did get an invite by the end of the week. At this point I quit the Malaysian version and just played this Closed Beta. I truly wanted it to be a good game. I became more active on the forums and sent in bug reports whenever I found one. The Closed Beta was three or four months. Then, it was time for Open Beta.

Some of the beta testers had suggested a helper system. They had played other MMOs where veteran players could assist others in the game and on the forums. Those players got a special title for other players to recognize. Planetwide Games liked this idea, so they created the Guide system. This happened just at the beginning of Open Beta. As I had been active on the forums and submitting bug reports, my application to be a Guide was accepted. All of the Guides got the “Guide” title in front of their name on the forums and in the game.

I had a lot of fun as a Guide just helping people out. I learned as much as I could about all the classes, character stats, game environments, and more. Whenever someone asked a question in the global chat, I wanted to be the first to answer it. At some point the company decided to add some volunteer Game Masters. These would be like the employed Game Masters but with fewer in-game powers. Naturally, I applied the first chance I got. I was accepted a few months later. Now I could help other players in a more official capacity.

They did not have any backend tools for the GMs, so every day I would log in with my GM account and announce that I was available to help with any problems. Everything was done through in-game whispers. I became an expert at managing whispers with multiple players at once. If I could not solve a player’s problem with my limited GM powers, I would contact one of the employed GMs to handle it. We opened up a free IRC chat for players to get tech support. I would have that in the background. When I heard the little sound that someone had posted something, I would tab out to help there. It was a lot of fun “GMing” for many months.

I did get bored eventually. None of us volunteers got any money. We did get unlimited free access to the game when it launched though, but it was not enough for me. Some good GameCube games had come out by then, and I was done. It was 2005 now. I quit my volunteer position that summer.

Those who know their video game history know that World of Warcraft came out at the end of 2004. Planetwide Games went with the same model as WoW. You had to pay $50 for the box. The first month was free, but then you had to pay $15 per month. I thought it was a mistake to charge the same amount as WoW. I knew by then that Risk Your Life did not compare. It did not stand a chance. Its only hope was to have a discounted subscription.

To shore up interest, the company attempted to do a player vs player tournament with an unprecedented prize of $1 million. This grabbed many headlines, but the game engine was not in any shape to prevent the eventual hacking and exploits that occurred from all the people eyeing that money. The tournament was cancelled after thousands of people had bought the game for that sole purpose. Within a year the game was shutdown.

A game failing is not a happy ending, but I value those memories. I got a chance to see what it is like “on the other side”. My Game Master account being hacked was a big wake-up call on security, how not to trust random people online to be who they say they are. I am always skeptical now, always watchful. It also gave me an interest in the game community. I chatted a bit on forums before that, but ever since I like to get more involved. I do not want to just sit on the sidelines. I give feedback in the hope that the games will be better. I have this blog to give my opinions on the game industry.

Definitions: Network Effect

Definitions is a new series of posts on definitions of terms used in the game industry. These will range from slang that game players tend to use on forums to more formal terms that industry insiders use. Some of these are generic terms that can apply to other things, but I will explain what they have to do with gaming. I will also try to focus on words and phrases that are not so clear cut, words in which you cannot always infer the meaning just by context.

So network effect. While this is a term used in business in general, in the game industry it is usually a property that applies to Massively Multiplayer Online games (MMOs), which includes free-to-play games, but can also include non-MMOs. The basic idea when it comes to games is that the more players a game has — its player base — the more enticing it is for new players to sign up. Once a game gets a sizable player base the network effect can be such a big lure that the game balloons into a behemoth, popularly named an “800 pound gorilla”.

Big populations result in the network effect that the virtual world feels more alive. The main reason to play MMOs is because of the social connections you make. You do not just want to conquer the world by yourself. Unless other players can see it, all that work is meaningless. You want to work with a team to make progress, and then be able to show off that progress to other players you meet.

Large populations also have other network effects. One example is dungeon queues. World of Warcraft with 8 million players is generally going to have shorter queues than Rift with 1 million players. There are that many more players looking for a group. You are bound to find a set of matching players in a shorter time. When it comes to the in-game economy, large populations ensure stability. Inflation will not be an issue. Stable prices make it easier to learn the value of various items and not get ripped off.

It goes even beyond this to things outside of the game itself. A popular game is likely to have lively forum discussion and many bloggers writing about it, so you will always have interesting topics to read and discuss with others. There may even be professional sites with paid writers and video producers. External websites might do contests related to the game to feed off some of the game’s popularity.

It is important to note that game design can have a big effect too. World of Warcraft requires one tank, one healer, and three DPS characters to start a dungeon. If the balance of players is not right, you can have scarcity of certain character roles. The dungeon queues are then longer. League of Legends, on the other hand, does not enforce character roles in the queues. Queues to join a multiplayer game in League of Legends will always be shorter than Warcraft’s dungeon queues.

So far I have only written about how network effects improve the gameplay, but they also pull in players through their social connections. If you have a choice between two games, one all your friends are playing, the other, none of your friends are playing, you will pretty much always pick the one that has your friends. There can be other circumstances too, such as a popular celebrity professing their love for the game. If they are not being paid to say that but truly love the game, some of the celebrity’s fans might join the game in response.

A related term to network effect is critical mass. When a game reaches critical mass, it has hit the point wear the perceived value of the network effects outweighs the cost of the game or subscription. This is the point where the game just takes off and dominates the industry. World of Warcraft was a fairly popular game even at launch, but it was not until 2006 that it really took off. This was the time when non-gamers started being pulled into the game by their friends. It was common to meet players who had never played any game before World of Warcraft.

World of Warcraft is the historical 800 pound gorilla, but more recent games have also skyrocketed from network effects. Within the F2P world, League of Legends and World of Tanks dominate. Both are team-based games with a mix of strategy and tactics. Both games have reached the point where people are signing up because so many of their friends play. In the traditional console business, the Call of Duty multiplayer shooters have had this distinction for many years. If you are buying a shooter for multiplayer, you may as well get the one that most of your friends are playing, so you can play together.

This does not mean game design can be ignored. The base game has to be good for it to ever have a chance of becoming an 800 pound gorilla and benefiting from network effects. The existing players in the game better be having fun or they will just quit. The longer you can give them fun experiences, the  higher the chance they will invite friends to play the game. Even if those new players do not spend any money, they are livening up the game world and reducing queue times for the paying players.

Microsoft and Sony Have Switched Places

Like most of the game industry, I have been following the announcements of the new consoles, PS4 and Xbox One. I am always excited to see what the new consoles will be like, but this time I had a sense of déjà vu. Strangely, Sony with the PS4 seems to be following Microsoft’s footsteps with the Xbox 360. Likewise, Microsoft with the Xbox One seems to be following in Sony’s footsteps with the PS4. Let us compare and contrast.

At the beginning of the seventh generation, Sony was going for that central media hub vibe. It was not just going to be a gaming console, but the most important device connected to your TV. It supported many more codecs and file formats than the Xbox 360 did. This culminated with the “It Only Does Everything” marketing campaign. We all know how that turned out. Without good exclusives, the PS3 just did not sell very well. The $600 price tag did not help either, but it was the lack of games that really set it back.

Microsoft was doing just the opposite with the Xbox 360. It was a game console firstly, a multimedia device only secondly. Achievements, game parties, and more were all features to enhance the games. Other multimedia features like HD-DVD playback were planned, but the core was games. Early in its live the Xbox 360 had the most exclusives, especially the unexpected hit of Xbox Live Arcade. The strong initial sales gave Microsoft such a huge lead, it took years for Sony to catch up.

However, something changed in these two companies towards the end of the seventh generation. Microsoft started heavily pushing features like sports and TV show streaming, social network integration, and other “apps” that are not associated with games. Sony started going back to their roots and focusing on the games again. Since 2010 the PS3 has had more exclusives than the Xbox 360. Sony also became more friendly with indie developers, going as far as seeking out indie devs specifically to make exclusive games for their PlayStation Network.

Now we come to the present. Microsoft is going after the general audience with cable TV streaming, SmartGlass, and real-time NFL fantasy football. Meanwhile, Sony is going after the core gamer with easy sharing of game screenshots and videos and a more open digital marketplace for indie developers. The company philosophies and marketing strategies have almost completely switched.

I do not think this bodes well for Microsoft. Sony had a lot of trouble getting people to buy PS3 consoles for years. The high price was a big deterrent, but the bigger problem was that the PS3 just did not have exclusives to get people to buy it instead of the cheaper Xbox 360. This time around Microsoft is looking to replace your cable box with an Xbox One. Then, they hope you will latch on to other Microsoft products like Windows 8 that have similar interfaces.

This is a very risky strategy. I just do not see Microsoft succeeding here. Sony is poised to take control of the eighth generation in consoles, and Microsoft will be the one playing catch-up. Could this spell doom for Microsoft? It is too early to tell. They are already suffering from low Windows 8 sales. The Surface did not sell all that well either. If the Xbox One sells low, things are not looking good for Microsoft at all.

Of course this could all change at E3 in June. Maybe the focus at E3 for Sony’s PS4 will be all the multimedia features it offers and not much about the games. Since Microsoft announced the multimedia features already, maybe they will focus on the games at E3. Then, both companies are roughly equal with full-featured packages. If this does not happen though, Microsoft and Sony have truly switched places.