To Bonus Round Viewers,

I’d like to apologize, because I don’t think I did a good job of explaining what I was suggesting, and the panel quickly turned it into an argument about business models I didn’t suggest and game balance, rather than a fair price for games and the industry’s ability to survive.

Additionally, there were arguments made on the panel against suggestions that were not mine, but somehow I got blamed for: for example Shane suggesting that I would approve of games that shut off if you didn’t pay or paying for prestige. These are not my beliefs and if you watch the panel you can see that I never suggest either and denied that they were good ideas. I want to clear that up.

It is a discussion of industry financial survival that I was brought onto the show to discuss, and it is here that any discussion of what I really believe has to begin.

The first misconception from those that have commented is that the industry can stay as is. The most common comment has been that many gamers like the current model of game pricing. Were the industry in good shape financially right now, then I would agree that there is no reason to change. Unfortunately, this model is not currently working very well and may not support continued game creation. This is not my opinion alone, and I didn’t invite myself to the panel to ask myself these questions. These are unfortunately blatantly obvious facts. Michael Pachter specifically pointed to EA’s recent earnings (or lack thereof) as an indication that something is indeed broken. EA and Activision’s large recent layoffs (Activision after the show’s taping) also point to less AAA games getting made and changes ahead. Losses and layoffs are not a sign of a healthy industry.

Certainly, all of us understand that if a company loses money continually it must either 1) change the way it behaves or 2) cease to be. We can all agree that ceasing to make games is not what we want, so we have to look for a change of behavior that makes the company healthy and profitable so we can all get the games we want to play.

This does not necessarily have to be digital distribution or other payment models. It could be something nobody has thought of yet. But making games at a loss is not a business that can survive so SOMETHING clearly has to change. It is my suggestion that alternate business models and digital distribution are a possible solution.

The second misconception is that I somehow advocate letting people buy their way through games, to get ahead of others through payments, or somehow unbalancing the game, for example by “buying prestige.” Anybody who took this out of the panel was not listening to my continual protests.

I have never believed that game balance should be influenced by cash.

Possibly the most misconstrued (and most unintended) moment was when we discussed WOW gold mining and I conceded that life isn’t fair. This was not a suggestion that games shouldn’t be fair. Nor was it a suggestion that people with money should be able to buy advantage. I was referring to the same unfairness that allows some people to pay $60 for a game while some are unable to afford that pleasure – EVER. That is unfair, so there is already unfairness in the system today. But I would endeavor to make the system more fair rather than stick with the current unfairness. I don’t believe that digital distribution and alternate business models leads us away from that goal. In fact, I believe they may lead us towards it.

To be clear:

I have been a game maker for my entire life and balancing games has been the most important skill I have learned. Over 40 million people have played the games I made and thought my balancing was fair and fun. I am aware that is no less ridiculous to let people buy completion of a level of a game or to buy “prestige” than it is to try to sell them the end of a movie plot before they go into a movie theatre. Furthermore, since many games today are multi-player, unbalancing a game will have tragic results not only for the person buying the advantage, but also for those that did not. In short, it screws up the whole game for everyone.

Buying bullets, buying advancement, buying better guns, and tons of other ideas were shot down by the panel, and those that have commented, but those ideas were never raised by me. It is really easy to rail argue something I didn’t say, but it says nothing about my suggestions.

The third misconception is that while many of the comments have assumed that alternate business models must mean higher costs to gamers on average. We do not know this to be true. I do believe that the model will distribute costs differently, and hopefully a model that is as good for the gamer and better for the industry can be found.

If anything, the current model is not fair pricing. The small number of heavy users for each game get an incredible deal, while the majority of gamers, who are searching for a game they love, can try less games because of the price point. There is a real cost to publishers for multiplayer games in servers and infrastructure, which is unevenly borne by those that don’t play the game as much as those that do. This was not true with the old offline game model, and it is not true with DVD’s. That inefficiency is great for hard core gamers (who of course are overrepresented in the Bonus Round audience) but bad for the industry.
My comments that the industry must take chances and create new experiences, which I was lauded for in the comments in section 1 of this panel, are at direct odds with the current model.

For example, when researching a recent online game I calculated that the highest volume user (who had played 150+ 8 hour days in the games 190 days of release!) was paying less than a nickel per hour. Now of course this was only the highest volume user, but it is insane to argue that this is fair pricing. This user was costing the publisher money based on server and bandwidth costs. Who was paying for this usage? Users that played less and the publisher were paying. That may have been you.
The fourth misconception is that I was suggesting a specific model for specific games.

While a subscription may work for some games (WOW is one), it is not the cleanest or nicest model, and may not fit for many other games. Just a reminder, I never suggested subscription or pay as you go during the panel. And I certainly never suggested your game should “turn off” after a period of time. I don’t like that idea either. Nor was I suggesting that FarmTown’s model would work for any specific game. Every game is different, and every game might need a different solution. But I think there are solutions.

In fact, I was vague on specific implementations not because I don’t have ideas, but because one solution cannot possibly fit all games. There are many, many examples of digital distribution and alternate business models that are better and are working for gamers and game makers, from inexpensive games to full sized games. There are billions of dollars in income in such games with tens of millions of users… some with more users than the biggest console game. Anyone who denies this has not done any research.

I believe that game developers are some of the smartest people on earth. If they spent as much time being creative with business models as they are with content then I think that they would find solutions that made gamers and game makers happier… even those who dismiss the concept without giving it a chance.

PS: If you would still like to call me an idiot directly you can find me at www.facebook.com/thejasonrubin or on twitter at jason_rubin.

Jason

Pulling together our VGA world premieres takes the better part of 6 months, as publishers and developers create custom trailers and assets just for the worldwide broadcast! We hope you enjoyed all the premieres for some of the most anticipated games coming in 2010 and 2011.

So how did Nintendo do? There’s no question there was much more for the hardcore Nintendo gamer at E3 2009, including the shock announcement of Metroid: Other M — probably the best kept secret in any of the first party briefings. Add in Mario Galaxy 2, the first hints at a new Wii Zelda (which was mentioned the next day at a Miyamoto roundtable), and a 2D Super Mario Bros for Wii, and Nintendo certainly has a lot of games in the pipeline.

Here are my thoughts on the briefing:

STAGECRAFT: The cramped Club Nokia stage combined with high-placed teleprompters made it look like the Nintendo executives were talking to the heavens for most of the briefing. Still, Nintendo always delivers the quickest (75 minutes) and most polished E3 briefing. This year’s show was no exception.

GOOD THINGS COME TO THOSE WHO WAIT: For most of the briefing hardcore Nintendo fans were up in arms. Half way through the presentation I was getting Tweets like “This is worst than last year!” But then, in the final 10 minutes, Reggie saved the show with Mario Galaxy 2 and Metroid: Other M. Before I knew it, the positive Tweets were flowing, such as “Give Reggie a bear hug for us hardcore guys!”

CHECK YOUR FACTS: When discussing Wii Fit, Cammie Dunaway said that with 15 million sold, the Balance Board now ranks alongside other home systems in terms of worldwide installed base. What system is she referring to? While the Wii Fit numbers are impressive, both the PS3 and 360 are beyond 15M sales worldwide.

SPECIAL ACHIEVEMENT AWARD: You have to give props to Reggie and Cammie for actually playing games during their briefing. Rival execs just read prompters, but the two Nintendo figureheads actually picked up controllers and played their products.

STRANGEST SEGUE: From Cammie Dunaway: “We admit we haven’t quite figured out how to move [Mario] into a fourth dimension. But that number, 4, that’s the key to Mario’s next surprise.” Is this a hint that the next Wii will include a water sprayer to add 4D effects to your Mario experience?

ELEPHANT IN THE ROOM: Nintendo spent ample time hyping up the multiplayer in New Super Mario Bros. for Wii….but conveniently forgot to mention that there is no online multiplayer support.

ELEPHANT IN THE ROOM, PART 2: Reggie said, “”Third party publishers are drawn to opportunity. And right now there’s no opportunity larger than Nintendo.” The only problem? Third parties can’t seem to crack the opportunity and make non-Nintendo games a blockbuster hit on the Wii or DS.

BIGGEST OMISSION, PART 2: When Iwata revealed the Wii Vitality sensor he only showedphotos. But apparently there is a video of a Vitality Sensor demo, which Iwata showed to some European press behind closed doors. He edited the video himself on the plane trip over from Japan.

MOST OVERSHADOWED GAMES: Nintendo is getting into user-created content in a big way. Both Minis March Again: Mario vs. Donkey Kong and Warioware: DIY encourage user creativity, but the message seemed to be lost during the briefing.

BEST LINE: “I’ll be honest, I read the blogs too.” — Reggie, as he began to introduce the “hardcore” section of Nintendo’s briefing with Dead Space, The Conduit, and Metroid: Other M.

WHAT NINTENDO DOESN’T WANT YOU TO CALCULATE: Sure there are some big first party Wii games in the pipeline, but the vast majority are coming in 2010 like Sin and Punishment 2, Endless Ocean, Super Mario Galaxy 2, and Metroid: Other M. The second half of 09 looks very light for hardcore first-party games.

MOST QUESTIONABLE GREENLIGHT: C.O.P THE RECRUIT from Ubisoft for the DS. With GTA: Chinatown Wars off to a slow start, does Ubisoft really think it can be successful with a new original GTA knock-off on the DS?

ONLY IN JAPAN: Where’s the news on new Wii Channels for the US? Japan has been rolling out new content like the Wii No Ma video channel and even a channel to order Pizza online. But Reggie didn’t even mention Nintendo Channels during the briefing.

BEST REVEAL OF E3: The setup for the Metroid: Other M trailer was brilliant. Reggie didn’t give up the surprise with his introduction, and it took a good 10-15 seconds of the trailer before it was clear a new Metroid game was afoot. Bravo!

Little did I know that half a decade later I’d meet Dimitri again — albeit this time in virtual form.

Molyneux is a big idea guy. And Milo (renamed from Dimitri for legal reasons) is his most ambitious and riskiest concept to date. It’s a natural outgrowth of the artificial intelligence-driven creatures in Black & White and the dog in Fable II. But those AIs were supporting characters in a larger game world. Milo (or Milly if you select a female) is the game.

What inspired Molyneux to build Milo? Dimitri, who’s now in college, sees Peter as a role-model. Over the years, as Peter spent more and more time with Dimitri, he began to reflect on his own childhood and the choices he made growing up. How would Peter’s life have changed if he made different choices? It’s a question we all ponder at some point.

Milo, I expect, will give us a chance to re-examine our own choices by guiding a young avatar through life. He will ask questions, seek advice, and, if the technology works, form a bond with the user.  And when I refer to the technology, I’m talking about the AI – not the Natal camera.  Milo has been in development for years and the camera support was only just added in the past 5 months.

Here’s what makes me the most curious about Milo: What limits will Peter place on the game’s choices and the character’s actions? It’s one thing to slap around a creature in Black & White to condition him, but what will the tolerance be for such extremes in a game like Milo? Peter has already said there will be limits.  But could your Milo end up being a criminal?  Could he mistakenly drown in that beautiful fish pond?  Or, will Milo go off and meet a girl (or boy) at school, live happily ever after, and forget to come back and visit you?