[a]list summit: Dave Perry On How Gaikai Changes The Games Business

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The games industry is at a crossroads – the problem is that there seem to be many different roads to take. It’s not just about digital vs. retail. The economics of making games has changed and mobile/smartphone gaming, social and Facebook gaming, online, free-to-play are all providing developers with new opportunities.

The real goal, however, is to be ubiquitous, to reach everyone, and Gaikai can conceivably make that a reality. At the [a]list summit in beautiful Napa, California last week, industry veteran and Gaikai founder David Perry explained the need for Gaikai and how the business works.

He noted that digital is clearly gaining importance. People initially laughed at Zynga for betting everything on Facebook, but they doubled down on digital on Facebook and look at them now. More recently, GameStop bought Kongregate, because it recognizes the need to be a part of the digital revolution too. Perry added that game companies need to get out of the mentality that 10 million sold is a great number. “How do we go from being happy about selling 10 million to selling 50 million ” he questioned. Part of the answer lies in the “try before you buy” mentality, which he stressed is present in just about everything (music, movie clips, books, furniture, software demos, etc.)

He added that the games industry, except for Zynga, has not done well to play along with this consumer mentality. He said that it led to the terrible Sony patent, which details “degradable” game demos {link no longer active}. The idea, which to our knowledge hasn’t come to fruition yet, would essentially strip away features in the game over time. Perry joked that the patent is pure “garbage” and he asked Sony, “Have you lost your minds?”

Why is Perry so passionate about the demo idea? Well, that’s exactly the model that Gaikai employs. Gaikai, with a single click from a user, lets you try out games. Essentially, instead of asking gamers to go to the game, Gaikai is bringing the game to where gamers are. Gaikai thinks publishers will love it, because you just “let the game sell itself.” He noted that a service like Steam requires endless clicks and legal agreements before you can even download a game, and then it has to ask you to check tech requirements. It’s putting a “big wall in front of the mass market,” he said.  And it’s not just Steam – most services are providing the same laborious experience.

And retailers can benefit from the system too. Imagine being able to instantly try out a game on Best Buy’s or GameStop’s website, and then with a bar that appears at the top of the page, you can buy the full title. You’ve never left the retailer’s site and impulse buyers are not interrupted. And eventually, once he has enough servers across the U.S., that buy button will allow the player to simply stream the whole game, rather than purchase a download or physical copy.

Speaking of servers, Perry really trash talked the competition in this regard. He said OnLive is trying to serve the entire U.S. with just three data centers, which he says is impossible. He added that Gaikai is going to launch in about 60 days with 15 data centers and he’s aiming to get to 50 data centers in the U.S. With the backing of Intel, Limelight and Triplepoint Capital, he has no worries about hitting that goal either. He boasted, “We can build the biggest network in the world.”

The other nice thing for publishers is that they own all of their players – they keep 100% of the sales. What Gaikai is selling is simply “server time.” Perry said he’s shooting for a goal of 300 million minutes purchased each month.  Also, failed acquisitions are not that detrimental either because it’s just server time. If a player tries out a game for 2 minutes but doesn’t convert to a sale, that’s just 2 cents down the drain. Early responses from publishers have been positive, and EA has already signed up with all its major franchises going forward.

To use Gaikai, all a publisher, retailer or other site needs to do is include one small line of javascript, which simply checks to see what server is nearby the user. It’s also a great business model to encourage partners through affiliates, because the Gaikai games will be completely embeddable and sharable. Affiliates who participate in this program will get a 50/50 split on revenues.

Perry also noted how Gaikai and the digital model will drive new advertising opportunities and allow brand marketers to get more creative. For example, he said first to play exclusives could be worked out for certain retailers or websites, and this could be done before a game is even complete; this in turn could drive up early pre-order numbers. The bottom line, he said, is that “every cent you spend marketing with Gaikai, someone is experiencing your game.”  And really, what other marketing efforts can provide a publisher with that kind of exposure

[a]list summit: Nolan Bushnell Talks Future Of Gaming

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From a pure games business perspective, David Perry of Gaikai gave perhaps the most interesting presentation at last week’s [a]list summit in Napa, California, but it was Atari founder Nolan Bushnell who made the most entertaining speech. Bushnell, who earlier this year rejoined Atari on its board of directors, reminisced about his past and the early days of the industry, but he quickly moved on to talk excitedly about all the big technologies on the horizon, which may or may not make it into games.

He began by joking, “Do I want to be this retro-focused historical fossil?” He added that his kids always remind him of how “lame” he is. He then proceeded to briefly detail the history of games and Atari – Atari started in 1970, Pong arcade released in ’72, in ’75 consumer Pong ships, ’77 Atari 2600 VCS ships. Interestingly, while Atari shipped 15,000 Pong machines, other companies made knockoffs and shipped 160,000 units, so Atari only had under 10 percent market share. The answer, he said, was to out innovate everyone else – a lesson that no doubt can be applied to today’s game market as well.

Before moving on, he also joked that it’s the first time he’s been able to make a Powerpoint presentation with the Atari logo, because Powerpoint didn’t exist last time he did anything for Atari.

Bushnell then talked about the diversity of economic models in today’s game industry, and how smartphone gaming will take over all mobile games. He’s personally a huge iPhone and iPad fan, and earlier in the day, when mingling among the [a]listers, he was showing off some of his favorite iPad apps on his own shiny iPad.

The technology he’s really excited about though is augmented reality, which he said will be “massive.” Because the phone can recognize where you’re pointing it, you could, for example, go into a store and quickly get info on screen overlaying the image of the item and providing you with useful info on the product. This sort of augmented reality could be used for some very interesting game applications in the real world, and creative brand marketers could no doubt have a total field day with it.

He also highlighted GPS aware games and plugged his own son’s company, Dopple Games, which he half jokingly said he’d sell to Google for $1 billion.

Bushnell believes that bioimplants will play a large role in gaming’s future as well, and he illustrated several examples, such as wearing contact lenses with chips that can provide augmented reality, and he said that games and robots would ultimately merge.

Coming back to Atari, Bushnell said that keys to success were a focus on innovation, but also that the workers were irreverent. “We were wiling to mess with people,” he said. He really didn’t care how things were done, so long as they got done – “abandon process, focus on outcomes,” he said. He stressed that Atari was a meritocracy, and the wages from the people who were laid off were used to fund the raises for Atari’s best workers.

In the follow-up Q&A session with the attendees, Bushnell also talked about how Pong became so successful. He said that “people at leisure are incredibly stupid.” They apparently lose 10-25 IQ points, he said, so you should never give them too much credit. Additionally, Pong had the advantage of appealing to women, because of women’s fine motor skills they could beat men at the game, and it made it very exciting for women to challenge men and even beat them. It was the perfect date game, he said.

Looking back, however, Bushnell does have some regrets. He never wanted to sell Atari. “I was stupid,” he lamented, “I sold completely because I didn’t understand Wall Street.” He said he knew Atari needed to raise more money, and he thought that they needed to look at a strategic investor. He also confessed that he was “tired” and he typically gets “5-year ADD” with any of his companies. He said he simply gets bored with each venture after 5 years. “In retrospect, I really wish I hadn’t sold it,” he said about Atari.

Game Characters Ubiquitous In Any Language

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The ubiquitous nature of certain game images can truly transcend language. Take the below ad for French mobile company SFR, which includes images clearly based on Halo, Mario Kart, Tony Hawk, Guitar Hero and Street Fighter, along with a cutesy platformer character and a puzzle game reference.

{video link no longer active}

Avatar 2 And 3 Might Be Filmed Back-To-Back

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While Avatar looks to return to theaters again at the end of August, James Cameron is still being bombarded with questions about the sequel. In fact, his first concern is a much more low tech one: getting the novelization right.

“Avatar 2… we’re still working on deals. We don’t start the movie until we get the deals worked out. I’m making notes. I’m not sitting idle,” Cameron said. “But really, what I’m working on primarily is the novel. I never had a chance to get the novel done while we were making the movie, and I always intended to. I didn’t want to do a cheesy novelization, where some hack comes in and kind of makes s–t up. I wanted to do something that was a legitimate novel that was inside the characters’ heads and didn’t have the wrong culture stuff, the wrong language stuff, all that.”

One major possibility, however, for the next Avatar is to film the next two movies back to back. Given the amount of CG work involved (reducing the acting load) and Cameron’s breakneck schedule, the decision could be more economical. “The way these back-to-back productions fall apart is that you’re trying to do two live-action films back to back, and you’re working on it for a year and a half, shooting. Everyone is dead. It’s not humanly possible. This type of film, it absolutely would work, said Cameron.

Source: MTV

Pearl Examines Korean Game Market

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Pearl Research has released their Online Games Market in Korea study. Companies like Nexon, NHN and Neowiz have been performing very well, growing their revenue by over 50 percent in 2009.

FIFA Online 2 from EA was the top online title in July 2010, boosted by the World Cup. Hybrid subscription MMOs with micro-transactions are also expected to be experimented with in future and StarCraft II is expected to help the market to expand, with Pearl ultimately forecasting the region to reach $2 billion by next year.

Curfew Enacted In U.K.

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Channel 4 has launched a new game for web browsers called The Curfew. Reminiscent of V for Vendetta, it involves a totalitarian regime in Britain.

The game has you trying to bring down the corrupt authority by talking to four different individuals. The Curfew was developed by Littleloud under the direction of Alice Taylor and written by Kieron Gillen.

Check it out at thecurfewgame.com/.

Verizon iPhone ‘A Done Deal’ Says Insider

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The eventual release of a Verizon compatible iPhone is among the most persistent rumors in technology. There is mounting evidence, however, that the fabled device will finally release by January.

“Component purchases and manufacturing starts don t typically reveal strong links to individual handset OEMs. But in some cases components have a DNA which is traceable through the supply chain. For example, iPad rumors became much more concrete when we knew Apple was procuring large LCD screens,” writes Steve Cheney. “For typical refreshes of GSM-based iPhones (the model that works on AT&T’s network), suppliers and component product families remain fairly consistent between models.  But a Verizon compatible iPhone would be CDMA-based, which would make its DNA distinct from other iPhones and traceable through the supply chain.”

“Sources with knowledge of this entire situation have assured me that Apple has submitted orders for millions of units of Qualcomm CDMA chipsets for a Verizon iPhone run due in December,” added Cheney. “This production run would likely be for a January launch, and I’d bet the phone is nearly 100 percent consistent with the current iPhone 4 (with a fixed internal insulator on the antenna).”

“I can’t say with 100 percent accuracy that an iPhone will hit Verizon store shelves in January, but all of the signals point that way, and it would give Verizon’s CEO some interesting things to talk about in his CES keynote (though he may have to refrain as CES comes before Apple’s typical January keynote). I may be proven wrong, but based on my history dealing with components and selling to Apple, a Verizon-compatible iPhone looks to be a done deal,” he concluded.

Source: TechCrunch

Kinect Bundle With 250GB Hard Drive Indicated

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Right now, only one bundle for the Kinect has been announced with an Xbox 360 that features 4GB of internal storage. Eagle eyes, however, have spied a listing for another bundle on the side of the box pictured for the 4GB bundle.

This new bundle will have a 250GB hard drive, a glossy finish, and a headset included. A notation also says that the hard drive includes game and demos.” It is unknown if a copy of Kinect Adventures will be included, though it seems likely given the fact that the game is bundled with all other versions of Kinect.

Source: Joystiq