“Two Billion Gamers”

by

I’ve been meaning to write a post about cloud gaming for a while now – there’s a rather long draft sitting in my editor from several months ago (hope I can dust it off and ship it), back when Google generated some headlines with the Assassin’s Creed Odyssey streaming beta.

Anyhow – the topic picked up again the past couple of weeks, this time with Microsoft Xbox making some bold proclamations.

I for one, wholeheartedly welcome the “two billion gamers” concept, that apparently Microsoft has been talking about for at least a year now. This is an audacious vision and easy to rally around. (Tooting my own horns a bit – 3 years ago I wrote about the path to a billion MAU game… coincidentally also in a post about Microsoft.)

The problem for me, with Microsoft’s stated strategy, is there are certainly competing paths to this vision, and Microsoft’s version is (of course) based on what’s feasible for Microsoft. However as an independent observer I do feel other paths are more likely to realize this goal.

What do I mean by this – consider Microsoft’s industry position in the various gaming platforms:

  • PC – clearly Microsoft still is a dominant platform holder in the PC segment with the Windows platform. However the entire Wintel ecosystem is structurally challenged, and have been eclipsed/leapfrogged by mobile in most areas of personal computing. That puts a serious cloud over the future prospects of PC gaming, which remains one of the core niche cases for PC hardware
  • Console – Xbox unfortunately is an also-ran this gen
  • Mobile – Microsoft has tried in earnest, but failed, to establish its own mobile OS. Android and iOS have won, in various ways. Mobile has also turned out to be the majority growth driver of the entire gaming industry and its rapid ascension has toppled the old world order (see the rise of Chinese developers that I’ve frequently written about on this blog)

Given this set of circumstances, it is logical for Microsoft to attempt to change the basis of competition – namely, to bet all-in on cloud gaming as a disrupter to established platform advantages, and go to a Post Platform world. To be clear, it faces obvious challenges:

  • At least so far, the stringent network requirements (especially latency for good feel) means cloud gaming remains a mature markets play, and thus dramatically limits the addressable audience. (For the two billion gamers vision to be achievable – markets like China, India, Indonesia and the Philippines must be unlocked, and at a rough glance cloud gaming faces severe hurdles in those markets)
  • It is not yet clear how other platform holders (i.e. Sony, Nintendo, Apple, Google) will react. Will they allow 3rd party devs to utilize Microsoft’s solutions on their platforms, and to what extent? For example, if a game is streamed onto iOS, can it thus bypass the App Store 30% revenue cut? Thus it’s unclear what exactly the value proposition is being offered to game developers (some will no doubt try)

And this now leads to the competing paths part I alluded to earlier. In the emerging markets I mentioned above – China, India, Indonesia, Philippines, Vietnam, Thailand etc. – there is already a single platform with the clear runway to two billion gamers: mobile. Thus it seems more probable that Supercell or Tencent can ride the mobile gaming evolution to serving two billion gamers faster than Microsoft or Google can with a cloud gaming solution.

This is a much belabored point – but North America truly is a mobile laggard and that biases the industry on its mobile perspective. So much so that when one of the biggest western publishers, Activision Blizzard, talk about “mobile is a top priority”, it inevitably invites players to complain and mock the company for being out of touch with its player-base. (Some of that criticism is deserved, but not all.) Still, I give Blizzard plenty of kudos for sticking to the mobile priority vision, and I suspect they will bear some surprisingly good fruit in the not too distant future.

One last random tidbit that’s worth mentioning in this free-flow post: Vivo announced a fairly affordable ($450) high-end gaming phone, iQOO, last week. It sports a top of the line Qualcomm Snapdragon 855 chipset, but what’s more interesting to me are the gaming specific hardware features – the two bumper buttons (when you hold the phone in landscape mode) is a significant gameplay upgrade for games such as PUBG Mobile. I’ve long clamored for a mobile controller peripherals push by the platform holders such as Apple – building it directly into the device is also a great path. I expect more Chinese phones to add such features – and these Chinese brands just so happens are generally doing well in all the aforementioned emerging markets. (Sadly, I expect Apple to be quite a laggard here as well.)

This example is to say – the mobile gaming ecosystem continues to rapidly evolve, and there are signs of further movement upmarket. (Speaking of which – the foldable phones by Huawei and Samsung, while unlikely to be more than proof-of-concept demos this year, speaks to interesting mobile hardware leaps in the next few years.) So if “two billion gamers” is the only metric to pursue – my money would be on mobile to hit it first.

Supercell’s challenge

by

Supercell’s CEO Ilkka Paananen published an open letter / annual outlook that had some fantastic and honest discussions of his company and its products. I don’t know if gamers would care too much, but as a fellow game developer, I loved it, and had some points to comment.

Before I dive in, a meta recap of Supercell – thanks to Finnish financial reporting rules, it has had to file annual reports and thus its performance has been in the public’s view. I cobbled together the below graph using a bunch of news reports over the past years:

The narrative is pretty straightforward: after truly explosive business growth during 2012-2015, Supercell has gone into a period of decline. At the same time, the company has steadily added headcount, showing it is confident in its long-term future. (By all accounts it is still a very light-asset company, having less than 300 full-time employees. Just for comparison – Blizzard pulled in $2B in revenue in 2017 as well, and its headcount is easily 10x Supercell’s.)

Back to the letter: the thing that struck me was in discussing the business operations, how much focus was related to China:

One of the really big steps we took in 2018 was that we decided to start building a game studio in our Shanghai, China office. In the early days of Supercell, I thought that we would always be a single studio company – just to keep things simple. But I changed my mind when I got to know the Chinese games industry better. I admire how the best developers in China think about social game play and also how much new quality content they bring their players every month. There is definitely a lot us Western developers can learn. Our goal with this new studio is exactly the same as with our studio in Helsinki: create games for the global market, games that are played for years and remembered forever. We feel like this is a unique opportunity to bring together the best of two different worlds.

And then later:

One of our goals this year is to get better at creating more content for our players. This is a more interesting challenge to us than you might think. On one hand, we like our small team sizes because we believe that is one of the reasons we’ve been able to produce innovative games with fun core gameplay. On the other hand, there is only so much content a small group of people can do, no matter how talented they are or how hard they work. Anyway, we’ve concluded that this is something that we need to get better at. How do we keep the small team sizes that are so important for innovation, while getting much better at serving you, our players, with more content?

We have now made the first few steps to improve this. One, we’ve partnered with some talented external studios who will be helping us to build more and better content. Two, we have invested more into tools & technology that will help us create content more efficiently. And three, we have slightly grown the size of the live teams (but only the live game teams) to be able to serve all of you better. What all of this means for a game like Brawl Stars, for example, is more brawlers, more skins and more environments being added more frequently.

China wasn’t mentioned in the two paragraphs above, but IMO was an essential driver of the underlying business challenge facing Supercell. When Mr. Paananen wrote “I admire how the best developers in China think about social game play and also how much new quality content they bring their players every month,” I do believe this was not just paying lip service to his Chinese competitors, but an actual admission.

Chinese developers work crazy hard (“996”), are not afraid to throw bodies at problems (some of the biggest mobile games in China often have dev + live teams of 300-500 people), and the industry has spawned a sophisticated production eco-system. What’s most noticeable is the clear production quality upgrade that I’ve talked about in the past, which is funded by a maturing value chain of outsourcing shops and specialized vendors. This enables Chinese games to afford to engage players with a seemingly endless stream of content at free or low price-points – gameplay modes, cosmetic items, quality upgrades to legacy content etc.

In the face of this, Supercell’s games, despite often having superior & innovative gameplay, just look like demos; and the aggressive monetization of power ironically becomes a particular point of frustration for Chinese players. I say ironic – as Chinese players have no qualms monetizing for power, it is the transparent design, limited by content shallowness, that players complain about.

Thus, Mr. Paananen’s comments about trying to strategically tackle content production, while maintaining the company’s small size (and the benefits that comes with being small). In my view this is not a nice-to-have initiative – if Supercell wants its games to succeed in China, which it seems to, this is a strategic imperative. Otherwise, Supercell games will be confined to a niche audience in China (and the business outlook limited), as it cannot retain the mass audience due to losing the content war to its Chinese market peers. If Supercell can achieve a breakthrough here – it will be the kind of boost it needs to reclaim growth.

2018 year in review

by

This post is unfashionably late by a week, but anyhow, here are a few major themes for 2018 in my view.

Chinese apps conquer the world

Hard to resist the hyperbole, but 2018 saw some incredible progress for Chinese apps’ global ambitions. To be sure, the biggest successes were predictably from emerging markets (very notably, India), but apps like Tik Tok, PUBG Mobile, and Knives Out have taken formidable positions (and sizable revenue) in developed markets such as US and Japan.

To pontificate on this, I believe the following factors play a role in this outcome and ongoing trend:

  • Relative lack of investment from American competitors in these emerging markets, due to perceived lack of infrastructure and low consumer spend. There’s also the question of business model fit, where Silicon Valley’s dependence on ads performs poorly in emerging markets
  • Chinese devs’ openness to hustle as needed and over-invest (willing to be inefficient but highly effective). The Chinese playbook is to try everything and see what sticks – but do it in lightning speed, which requires a high upfront investment1. This is also against a backdrop of a tightening home market (and for games, a regulatory freeze that signaled the arrival of winter), where “going overseas” is more than ever a strategic imperative for more and more businesses
  • A potential mindset advantage – unlike American companies which (stereo-typically) prefer a “one-size fits all” approach to global opportunities (and which often really means, built for the North American market, and hoping it is compatible with other markets), Chinese devs have seen how this did not work (for US products) in China. 2 They also likely more deeply understand the value of empowering the local team to make big decisions3

The beginning of the end, of the PC (x86) platform

Another hyperbole, it may seem (or a massive understatement, depending on which sectors/markets you look at), but consider the following that happened in 2018:

  • Intel’s significant ongoing woes with its 10nm manufacturing processes, in contrast with TSMC’s 7nm process that has already seen mass commercialization (e.g. Apple’s A12 Bionic chip)
  • Windows on ARM is now a thing, and Mac on ARM is on the horizon too with project Marzipan

Both of these are symptoms of the gravitational pull of the mobile ecosystem. Specifically for the PC gaming sector, I’d say these are alarming long-term signals –

  • There is a non-trivial likelihood that x86 stops being a consumer computing platform, wholly replaced by ARM in a convergence form factor like the Surface
  • x86 gaming may survive as a standalone high-end market, but will face hostile underlying hardware economics (not unlike, say, DSLRs)
  • PC gaming could possibly survive the demise of the x86 platform, but it likely will be a massive blow to legacy content: many games from the past few decades may become unplayable (cloud gaming could be a solution there, but cloud gaming has its own critical dependencies)

At this point we have to pause and say, what are we even talking about when we say “PC gaming”? It’s not up for much debate that the underlying Wintel platform has been disrupted, but if keyboard+mouse lives on as an input paradigm, is that all that’s needed for “PC games” to live on?

It of course is not as simple as that – the migration away from x86 will be painful at the execution level for developers and end-users. Add to this mix tremors in the distribution (Discord and Epic becoming publishing platforms, and initiating a race to the bottom in rev-share), and the next few years look quite turbulent and interesting.

Predictable mobile clones, and unpredictable market adoption

For the last theme, I want to go back to the world of Chinese mobile games. 2018 was a year that continued themes I wrote about previously, where every genre conceivable had an earnest mobile clone effort. The thesis is simple: Chinese players prefer the mobile platform, so every game globally that has a fresh idea on PC/console was ripe to be taken to mobile.

What was dramatically unpredictable, was just how strong the appetite was. Going back a year, even with the benefit of having played Netease’s first stabs at mobile battle royale, I would have said this genre has severe adoption constraints on mobile, mostly centered around the input. Oh how wrong I was. Also the sheer audacity of Tencent’s playbook – to launch 2 competing licensed PUBG mobile games simultaneously – surely invited many a raised eye-brow. Now all of that feels like ancient history – more players globally play the battle royale genre on mobile than on all other platforms combined, and it’s probably not even close.

But if this were just about PUBG Mobile, which I feel I have talked about ad nauseam, it wouldn’t be a theme. There is more – Identity V, and LifeAfter (both by Netease) took concepts from relatively niche games Dead by Daylight and Rust, and successfully launched them to a wide Chinese mobile audience. The market performance of these games, despite clear technical drawbacks (in particular for LifeAfter), shows a huge appetite for “fresh gameplay”.

The other side of this coin also bears a mention: Chinese game devs, in particular the large in-house studios of Tencent and Netease, now have well-rehearsed processes to quickly assemble and deploy large-sized teams (100s of devs) against opportunities deemed strategic. This means that any game that does not have a mobile strategy, regardless of how irrelevant the original devs believe mobile to be for them, will quickly (3-6 months) have a mobile clone if they stumble across success. (In this regard, single-player AAA games, especially those strongly narrative driven, remain relatively safe from clones.

This is why, despite western gamers’ loud protests, Blizzard et al must march towards mobile – it’s not just about profit-seeking; in many ways it’s about long-term business viability.

  1. One gaming example is King of Glory‘s Battle Royale mode, which if I were to guess took 100 devs a few months of work; it did not gain market traction, but I don’t doubt that the studio would make the same bet again. ↩
  2. Example: PUBG Mobile has not only different store-fronts for North America vs Japan, but also different content. ↩
  3. For more on this point, Kai-Fu Lee expands on it at length in his book AI Superpowers. ↩

Dug up an old framework

by

The following was an application of a framework (“8 sources of competitive advantage”) I learnt from my favorite class in business school. I wrote this as a personal exercise one month after I joined Riot Games, back in August 2011. It was intended as a quick review of Riot’s company strategy.

Reading it today, I definitely get a “I was wet behind the ears back then” vibe; but the framework itself I regard as a classic, and intend to reference in an upcoming post – hence posting this.

Executive Summary

Riot’s current strategy can be summarized as:

  • Free to play, gaming-as-a-service business model aligns product development with revenue generation
    • Traditional competitors such as EA are not well-aligned on this, and shrink-wrapped software sales model is outdated
  • Direct distribution to own the customer and capture value
  • Constantly pushing for bigger market presence and economies of scale
    • Tencent relationship helps greatly in this regard, as China is one of the biggest online gaming markets
  • Vertical integration – we develop the game as well as the online platform

Major challenges I see:

  • The free-to-play model can be replicated. Many competitors are already catching on
  • There is nothing inherently unique about what we are doing (the other bullet points above). Valve has built Steam into a major distribution platform in North America; many companies have bigger market presence / scale. It seems we have been successful so far simply because we were the first to try the free-to-play biz model on a hardcore game, and we leveraged an existing community-created game franchise (the DotA map on Warcraft3)

Sources of Competitive Advantage In-depth

Brand

I recently read The Curse of the Mogul, and I tend to agree with the author that in the media industry context, brand is usually overhyped especially when the products are “discrete” titles (hit-driven business). To the extent that Riot can build successful game franchises (such as Call of Duty or Warcraft), brand can have an effect on initial traction with consumers; overall however it is hard to see consumers developing loyalty to the company as opposed to the specific game. And relative to some of the major incumbents, especially Blizzard and Valve, Riot definitely does not enjoy an advantage in brand.

That being said, Riot has gone out of its way to accommodate players and listen to the community. We take pride in our community our interaction, and believe we show a human face which makes our brand distinctive. I’m not sure how this will change as we continue to grow – it is easy for a company of 20 people to be very personal with its customers, but hard for a 500 person company.

IP

One type of IP that has value, which I’ve already mentioned above, is the creation of successful content franchises such as Call of Duty. Such content enjoys copyright protection and has demonstrated to have value in terms of driving consumer purchases. The most successful franchises such as Super Mario Brothers have enduring economic value and can generate decades of cash flow.

Another type of IP that has economic value is proprietary technology, such as a 3d engine. Some studios such as Valve generate revenue by licensing their engines. To my knowledge Riot has primarily focused on leveraging off-the-shelf technology (with some proprietary development on top of open-source software), so I don’t think the company has any advantage in this regard. And in a broader sense there seems to be enough choices for developers (I need to research this further), so it is unlikely any company can develop a significant competitive advantage by owning such IP.

Another form of IP may be creative talent – i.e. the ability to come up with ideas for games that have commercial appeal. However human assets can be bought, so I don’t think this can be a competitive advantage for any one company over an extended period of time.

Market presence / distribution

In The Curse of the Mogul the author argued that EA came to prominence by building up a superior distribution channel. However, with the advent of online distribution, the barriers to entry in distribution have been significantly lowered for all players. Riot Games itself has now completely bypassed the traditional physical distribution channels (although the product was at one time available as shrink-wrapped software at GameStop).

Overall, there is still competitive advantage to be gained through controlling a strong distribution, usually in the form of an online service with a large user base. Valve has demonstrated the value of its Steam service, and has repositioned the company’s entire business model (from originally a developer to now a distributor). However barriers to entry are continuously eroding with cloud services providers (e.g. Amazon) making it easier and easier to launch web services. Riot’s own success proves that it does not take too much time / resources to build up a highly demanded, directly distributed service.

Economies of scale

Economies of scale do play an important role in web services. Google enjoys a major cost advantage due to the large scale of its infrastructure. In online game services, Blizzard gains both engineering experience (IP) and a cost advantage due to the scale of World of Warcraft. However, the rise of web services providers like Amazon may again be reducing the relative economies of scale of any particular vendor, again reducing barriers to entry in this regard.

In the high performance gaming sector that Riot competes in, companies still need to own and build out their own server infrastructure, often with a lot of proprietary technology developed. This means that this will continue to be an area where a company can gain some competitive advantage.

Economies of scope

Economies of scope exists both across different sub-markets of gaming (the different platforms – console, PC, handheld, mobile) and at a macro level across related markets (movie tie-ins, merchandising, e-sports related revenues if any, etc.) For the first kind, it is common to see a title released for both PC and console, so there seems to be a lot of overlap in the underlying development assets; while economies of scope from developing for both mobile / handheld and a bigger screen (PC / console) seems to be very limited because of the dramatic difference in technical capabilities and playing experience.

For the second kind, it seems that few video-game companies have created a lasting model to extend its games to other product categories such as movies and merchandising. LucasArts comes to mind as probably the only company with clear gaming and film content synergy, and that also originated in film first.

Network effects

Network effects are a major and well-documented source of competitive advantage for players in the video-game industry. Console platform owners profit from the two-sided market of developers and consumers. For each game, the developer also tries to create same-side network effects – more players playing means even more players wanting to play.

With the arrival of the social web and the rise of digital distribution, developers increasingly have the potential to become platforms themselves, in a couple of different ways: the first as exemplified by Valve’s Steam service, is a new digital distribution platform; the second as exemplified by Zynga, is an advertising medium for advertisers thanks to Zynga’s massive (and well profiled) user-base.

As everyone recognizes the value of network effects, we can foresee fierce competition to build up and own it. One main strategic challenge for Zynga and many other social gaming companies is exactly over this – whether they own their network effects, or does Facebook retain ultimate power over the consumers. And for the distribution platforms, we can also foresee a fragmented landscape, if not only because of the underlying hardware fragmentation (consoles, PCs, mobile etc.) and the respective hardware platform owners’ stakes.

In the case of Riot, we try to have strong ownership over our players. One of our strengths is our community management. But I can foresee a major challenge in future when the industry moves away from the PC platform to newer platforms that have major platform owners (e.g. Apple with tablets). Then we will face similar challenges as Zynga does with Facebook over ownership of the underlying network.

Access to capital

In the console space, access to capital could pose some barriers to entry, thanks to the platform owners’ platform rules. At the other end of the spectrum, the rapidly growing mobile gaming market has almost not barriers to entry from a capital perspective. PC is somewhat in between – hobbyists can develop and distribute games via the Internet very easily, but they are competing with big budget titles from the likes of Blizzard, and a lot of games are still sold via physical retail.

Regulation

The industry is lightly regulated in general. There is a self-regulating ratings bureau (ESRB) that imposes some limitations on content, and platform owners may impose their own regulations (e.g. Nintendo’s long-term stance on games being “family-friendly”).

In certain regional markets, the situation is more hairy. In China and Korea game content needs to pass government approval, and is prime ground for corporate sabotage (blocking out a competitor via the government). Riot’s connection with Tencent helps greatly in this regard, but it only applies to the China market.

Games from my childhood (2)

by

 

This is part of a free-flow series writing about the games that left my mark on my childhood. Previous post.

Back to China

My family returned to China in early 1995. This was a peculiar time to be a teenage gamer. Windows 95 would drop soon, but it would be another couple of years before I adopted it (driven by an insatiable desire to play Diablo). I was very happy with MS-DOS, and I knew my way around it reasonably well (at least for the purposes of playing video-games).

My memory is fuzzy, but those few years in China before Windows 95 was my prime years of playing classic DOS games of the early to mid 90s. To be clear, I didn’t have a great supply of games – it would be the occasional pirated compilation CD that would have hundreds of random games (many of which were the shareware version), or the random 3.5″ floppy disk (or even the rare 5.25″ disk, if my memory serves). I’d run some rudimentary antivirus check on the disk – if it returned a positive, I’d be much dismayed, but occasionally tempted to select “kill the virus” and then run the program anyway.

Those were also the years where I battled with the various quirks of DOS gaming. The first issue was EMS / XMS memory format – to run a particular game, I’d often have to reboot into the correct format, and sometimes a game wouldn’t run no matter what I tried. And then there were the numerous setup configs – DMA / interrupts and such, and it would often be a trial and error process to get any sound working (the 386 my father bought in the UK had no sound card; I believe the 586 he got in China did). Sometimes things would only half work – my entire play experience with Syndicate was without sound effects and only background music, and it would be years later that I realized how much I missed out 1. But more on Syndicate later.

Koei games

Let’s talk about Koei games – for a Chinese teen growing up in the 90s, Koei was absolutely a huge developer. A lot of this obviously is due to the Romance of the Three Kingdoms series (which is still running, the latest being the 13th version), but Uncharted Waters 2 was also a massively influential game.

Romance of the Three Kingdoms 3

This was the entry that I played the most (probably around the years 1995-97), and have the fondest memories of. Even at the time, this was a dated entry – the game was originally released in 1992, and by the time I got to it, 4/5 were already out. But, this was the copy I got ahold of (on 3.5″ floppy I believe), and I remember my PC couldn’t run 5 for reasons likely related to EMS/XMS memory.

This game was old enough that the mouse was an optional input – all menu items could be accessed through keyboard shortcuts. Still, it had gorgeous music (that evolved based on your progression), great art (despite the low pixel count, all the character portraits felt vivid), and the ultimate empire-building fantasy sandbox based on the ultimate IP for Chinese players. My copy’s game editor also had 3 max-attribute (every stat was 100) character slots, so these duly became my 3 top lieutenants (I think I created them to be my children, and I spent a lot of time naming them). A typical game for me would be starting in a city in a relatively peaceful (distant) location, and I’d spent years leveling up my city and slowly expanding locally, all the while major battles were being fought elsewhere. I think that says something about my personality even as a kid.

The other thing was mentioning was, this series’ success absolutely shows the value of IP – to me Koei’s various history simulations share strong gameplay similarities, and the player is really just choosing the fantasy setting. I remember briefly playing Genghis Khan as well as Nobunaga’s Ambition (which has many fans in China as well), but unable to get into either of them.

Random side note – I remember Koei got into some PR trouble in China due to its World War 2 Pacific Theater simulation. It got some prime time CCTV coverage, and the report was about a studio in Tianjin that was translating the game into Chinese complaining about the game being fascist.

Uncharted Waters 2: New Horizons

I started playing this game in junior high (it must have been 1996 or 1997), after hearing about it from a friend in the same class. He copied it to me on 3 floppy disks. Again, this was a very dated game by then – it originally released in 1994 – but this did not deter me from absolutely falling in love with it.

I believe this game/series is not prominent in the west – at surface level, it has been described as derivative of Sid Meier’s Pirates!. That’s a shame – there’s something magical about this game in how it captures the spirit of adventure and exploration, and my friends and I found it captivating.

I had a lot of handholding playing this game – I had a detailed guide from a popular PC magazine (Popsoft – 大众软件), so I wasn’t so much as exploring on my own as following a proven path, but that didn’t dampen my sense of achievement one bit. Later on to skip the grind, I’d also hex-edit the binary save-files, though I discovered the game has some way of detecting that edits have been made. Normally, a save-game that has reached an end-game milestone would have an asterisk next to it, but if you edit a save-game and then reach end-game, the asterisk would not be assigned. Another fun interaction from hexediting was when I gave myself an item that is only used in the end-game “cinematic” – when it showed up in my inventory, the description was a funny line to the effect of “how did this get here?”.

It’s not hyperbole to say Uncharted Waters 2 was the best world geography class I ever had. It introduced the world to me, literally, and above all else it was a deeply romantic game: it was open-ended, and the 6 different playable characters had very distinct motives / objectives that was not all about fighting / naval conquest (build a trading empire; complete the world map; discover lost treasure). Even though the graphics and presentation were simple, the mind would fill in the blanks, and I would experience these vivid experiences. Even to this day, I can recall the burst of relief and joy when successfully docking at a port after encountering a storm.

(To be continued.)

  1. On the flip side, I do have the Syndicate soundtrack burnt into my memory. ↩

Games from my childhood

by

I’ve been on the beach (literally) in Hawaii this past week for some much needed time with family and away from work. Unfortunately, it’s been hard to take my mind off work, and I’ve been tempted to do some soul-searching on the industry and career I’ve chosen. This post is a personal reflection on how video-games were a big part of my childhood.

UK years

As a boy I lived 3 few years in UK before relocating to Beijing, where I spent my teen years. Thus my early gaming history has a rather British flavor. My parents, like most education-minded Chinese parents, refused to buy me a console1. My father was very into PCs though, and splurged on a desktop 386.

In these years in the UK, despite my nonstop nagging, my parents only bought me 3 game disks: SimCity 2000, Terminator 2, and a compilation disk Award Winners that included Sensible Soccer, Jimmy White Whirlwind Snooker, Elite, and Zool.

For a 12-year old, SimCity 2000 was immensely educational. I still remember the manual itself being over 100 pages (if not 200), and written like a long essay. It was surprisingly engaging given its open-ended nature – perhaps I spent a lot of time playing it, simply because I was allowed to by my parents2.

The Terminator 2 game was supremely forgettable – a bland, weird mix of a few different arcade mini-games thrown together loosely based on scenes from the movie. If anything, it did teach me the lesson that IP-licensed games do not by themselves warrant my time and attention, and on the contrary is likely bad. There was a silver lining: in the game packaging there was a booklet that had reviews / intros to dozens of other games, and some of these games were legit classics such as various Sim-games,  Populous, Mega Lo Mania (this was a series of discount titles from a budget publisher – it’s telling that to an undiscerning consumer I chose the movie tie-in game instead of any of the actually great games). I must have read that booklet a dozen times.

From the compilation disk, I played Jimmy White Whirlwind Snooker the most while I was still in the UK. I was watching a lot of snooker back then – BBC would prominently cover it (and other British sports favorites such as cricket and rugby). I also remember a TV show on video-games inviting Jimmy White to play against the AI version of himself. Elite I played the least, which is a shame given its stature in video-games history – but I really was too young to comprehend it (and enjoy the fun combination of exploration and trading), and I struggled to do basic things such as successfully docking my spacecraft. My only memory of Zool is the vast amount of Chupa Chups lollipops in the game – I guess product placement does work!

Ah, and then there was Sensible Soccer. Years later I would shamelessly ditch it for EA’s FIFA series (from 98 onwards), but this was easily the football game I played the most growing up. It was not love at first sight – I repeatedly tried to get into this game, and failed, due to the controls and the lack of any meaningful tutorial. Indeed, it was not until I was a year or more in Beijing that I accidentally stumbled upon a basic comprehension of the controls – a light tap of spacebar was a directed short pass, while a press was a long pass / shoot; after shooting you can continue to hold direction keys to apply spin. The game had a mesmerizing pace when you chain short passes together, and the simple yet elegant ball physics3 allowed for what seemed like endless varieties of emergent gameplay – you can have spectacular long range banana shots from outside the box, or you can do a diagonal pass from the wings and attempt a dramatic forward-leaping header. After finally getting a hang of it, I quickly turned this game into the ultimate football fantasy fulfillment engine. I would vigorously create fictional leagues of my imagination, and my team (“Beijing United”) would be comprised of not only my friends and I, but also some characters I made up that I got surprisingly attached to – for example, I still recall a Mr. Tony Klinsky, of unknown (Eastern?) European origin, that was a key central midfielder to my 4-4-2. (I was number 11 and the star forward, of course.)

(To be continued.)

  1. The only sustained console exposure I had was going to my neighbor’s place to play the Sega Game Gear. I remember playing Sonic the Hedgehog 2 and Batman Returns. ↩
  2. Years later, I would buy the collector’s edition of SimCity (2013) out of nostalgia, only to never play it past the first 15 minutes. ↩
  3. Unlike FIFA, where the ball “sticks” to the player in possession, in Sensible Soccer it seems the ball is always free-moving and thus dribbles are hard. ↩

God of War (2018)

by

Some quick thoughts on the new PS4 exclusive God of War. This is my first play of any game in the franchise (was on xbox 360 last gen, and before then was in China during console ban era), so I’m looking at it with only a superficial understanding of the lore and no gameplay experience.

The high review scores (3rd highest reviewed all-time PS4 game, was tied for 2nd initially) are not surprising. This is best recent example of a game playing squarely within the constraints & definitions of a single-player AAA experience – super high polish, beautiful world and graphics, satisfying combat, and engaging narrative. Of these points, the narrative may be the least accomplished – it’s kind of a road-trip plot1 with a very limited cast, but it does quite a lot with this little material. (I found it especially hard not to love many of the side characters.)

Indeed, from a production standpoint the whole game is a great example of exercising constraint. The insane polish and presentation is achieved through tightly managed scope2 – small number of enemies, smart level design which reuses and builds upon lots of areas3, and relatively cheap optional content that adds lots of gameplay hours through difficulty.

This may not sound like high praise, but I found myself totally immersed (and going into an obsessive “I must beat this boss” mode for a lot of the optional content, spending hours on a single encounter) despite not finding any part of the game groundbreaking. You could argue, perhaps superficially, that everything God of War has to offer has been done before – there are clearly strong elements of other modern video-gaming giants such as The Last of Us, Uncharted, and Dark Souls / Bloodborne. But it is darn impressive how well put together the whole thing is, and how it reinvigorates a perhaps outdated protagonist (and commercially sets the scene for a big new series of games).

If there’s anything to nitpick, my only complaint was the game’s collectibles design felt at odds with its narrative goals. Unlike games such as Uncharted, where collectibles were a pure achievement goal (for the completionists), the hidden treasures in God of War unlock abilities or represent rare gear. Therefore there is strong motivation for even the gamer who just wants to have a good story to poke and run around the levels, to try to find every nook and cranny. At times this breaks the immediate flow of the narrative (at a tense bit of the plot, yet here I am backtracking because I spotted in the distance a chest I missed earlier). At a meta-level, it also created a disconnect for me in the main plot vs the side content: I was aggressively tackling some of side content, which was much more challenging in combat, so that by the time I got back to the main plot, I was clearly over-geared and none of the intricately staged combat designs were remotely challenging. This is clearly a minor issue to a great game, though it does showcase the inherent tradeoffs to any design system.

  1. And it’s easy to call out the resemblance to The Last of Us. ↩
  2. It’s probably way more chaotic in the actual production, and lots of painful decisions, but alas such is the development of video-games. ↩
  3. but avoids feeling too repetitive by “designing vertically” – i.e. you are in an existing area, but there’s a new shortcut or an alteration of the terrain ↩

Why navigation apps suck (a product thought exercise)

by

A departure from the usual games-related posts. This is a extremely tactical post (and frankly, quite crudely refined notes) about a bunch of product thoughts I had.

I live in the west Los Angeles metro area and have roughly a 10-mile daily commute. My work hours are quite flexible (thanks Riot Games!), which means I can side-step some of the notorious LA traffic, but not all of it. In practice this means I have a 30-min commute in the mornings, and in the evenings it’s usually 40 minutes, but can easily go to an hour. In the rare instances where I had to stay late (say, 9pm), it’s a 15-20 minute breeze on the freeway home, which makes it tempting to stay late, but usually I’m out of the office between 6-7:30pm.

That’s a long-winded context to say I do quite a bit of driving, and I have tried various navigation apps and do somewhat care about the user experience.

The TL;DR of my current ranking of the apps / services I could use:

  1. Google Maps
  2. Waze
  3. Apple Maps
  4. My car’s built-in navigation

Having said that, I’m not satisfied with any of them, for various reasons, and it was the thought exercise I did (while driving) about their various flaws that I’d like to explore a bit in writing. 1

The primary reason I say “navigation apps suck,” is that they have clear areas of improvement on a number of dimensions, which I’ll talk about one by one.

The suggested routes are good, but are often perceived to be not the best, especially in shorter, local commutes, such as my daily commute.

I originally worded this as “objectively not the best routes,” but upon reflection felt that is not knowable. But anyhow: what I mean by this point is as a frequent user I have a strong perception that the default route recommendation I get is solid, but there are better options not discovered.

The reason I have this perception is as an experienced driver of my own commute route, I’ve explored various routing options and have established a baseline ranking of my options. Thus nowadays when I do a navigation, more often than not it’s just to gauge the general road conditions, and I will self-navigate using my baseline route (and ignore the recommended route). Then at the end of my trip, I’ll compare my result (arrival time) vs the original estimate with the recommended route. My not-so-rigorous comparisons have reinforced my perception that the algorithms are not ideal and my personal route is just as good or better.

As a complete outsider to how these navigation algorithms work, I do have a few hypotheses why the recommendations are “just ok” instead of “great”:

  • Road conditions change very dynamically, and there is a delay between “now” and the data used to run the algos. i.e. how “real-time” is real-time traffic data. I’ve not done any digging into this, but if the lag is material enough (say 5-10 minutes) it would make a difference for the 30-min commuter like myself
  • Different roads have different probabilities of disruptions, as well as how resilient they are to these disruptions. While highways have much higher throughput at optimal operations (big arteries), I feel local roads are much more resilient to single accidents, because there are lots of alternative routes (veins) that can absorb sudden fluctuations. I have a very amateur suspicion that navigation algos are over-weighting an estimated faster time via a major highway (say, 5 mins faster than local) vs the likelihood of that estimate being severely disrupted by a new accident
  • Depending on the resolution/fidelity of the traffic data, the same stretch of road may have totally different travel times for 2 different travelers. I’m speaking about the difference between lanes, and I have a very specific example with the below screenshot:Going north-south on Sepulveda Blvd through the LAX airport area, the speed at which you can pass through this stretch of road is wildly different based on whether your destination is LAX (the top dotted circle is the ramp going into the airport) or the 105 freeway (the bottom dotted circle), or going through (further south on Sepulveda. You may be sitting in the top circle for 15 minutes to crawl into LAX, or you may have gone past this entire arrow in 5 minutes (if you stay on the left-most lane). Again, without knowing the resolution of the data, I suspect at least some of these navigation apps are using averages, which will degrade the recommendation a lot – Waze for example, will never recommend me this route, even though it is almost always better (measured by a faster arrival time vs. their original recommendation, and their own estimated time as I travel along this route is always higher by 5-10 minutes).

Improvement suggestions: I don’t have any, except what must be obvious ones – get better, higher resolution data; and doing probabilistic analysis as part of the recommendation (what’s the worst that could happen if the user follows this route?).

Route optimizations seem to undervalue the difficulty of the route, most egregiously routes that need lots of left turns

Again, this is first and foremost a perception, but I do have some evidence, especially with the below example that’s basically a bug IMO:

In this stretch of road in commuting hours, Google will generally recommend the green line vs the red line, however this route is actually not possible – the dotted circle is an impossible turn (you need to merge 3/4 lanes to get to the left turn lane, and you have no space to make the merge).

More generally, navigation apps seem to far too often recommend difficult maneuvers which are dangerous and also likely end up costing a lot of time: e.g. left turns in busy intersections with no traffic lights, or crossing a major street with no traffic lights. While Waze has a preference setting specifically about this (and is default ON), in practice I feel Waze still does the most crazy routes that feel like they ignore the difficulty of actual execution.

Improvement suggestions: offering preferences is a start (more on this in the next point), but probably overweighting “safety / ease / fewer maneuvers” over “raw fastest route” (vs how they are currently weighted) is a start.

This is quite touchy-feely, but routing algorithms seem to ignore the comparative pleasure of otherwise comparable options, e.g. is it more enjoyable to sit in bumper to bumper traffic on the freeway or a windy local route (with lots of lights / turns)?

The above header pretty much sums it up. Recognizing that drivers have totally different profiles, and therefore going beyond the absolute “avoid highways / toll-roads” settings, and perhaps offering them ways to tweak their experience to their style, could result in higher satisfaction.

In some ways this is just expectations management: giving an option, for example, that says “prefer local to freeways, even if it means an X-minute delay” (X could be customizable) anchors users’ expectations, and also gives them a sense of empowerment – that was an explicit trade-off they opted into.

  1. Another way to title this post would be, “why it’s hard to build a great navigation service – product analysis from an outsider.” ↩

2017 year in review

by

Going to try to talk about the 3 most interesting themes I felt, reflecting on the past year. As always, these themes take a heavy China perspective.

The rise of PUBG and the even bigger rise of mobile PUBG-likes

Globally in gaming, PUBG was the biggest breakout success of 2017, coming out of left-field (what are chances of a modder partnering with a Korean studio to successfully launch a global title?), and achieving impossible heights. If you said at the beginning of a year that a Korean PC game would break 3M PCU on Steam (and easily dethrone Dota2 as king of that platform), everyone (and especially all the industry insiders / experts) would have laughed. And yet this is exactly the appeal of the industry – what seems like ludicrous ideas can completely transform the landscape in a brief amount of time.

I wrote about what I thought made PUBG such an appealing experience; the follow-up to this success story is even more noteworthy though. In the brief span of a couple of months, a horde of Chinese mobile PUBG-likes were launched, and a couple of them, Rules of Survival and Knives Out (both from Netease) also hastily released global versions. These games have performed surprisingly strongly in key markets globally – Knives Out has over 100M registered users and 20M DAU (majority of which is from China, of course), while Rules of Survival has some 50+M registered users (and performed better than Knives Out in the US).

If you had a chance to try any of these games, you will see that they defy all common (western) notions of what a mobile game is. They are janky and hardcore, and are almost literal ports of the PC PUBG experience. It’s easy and (to a large extent, fair) to deride/dismiss these games as copy-cats; but that doesn’t answer the question of why they are so successful (e.g. who’s playing these games? Lots of people across a far broader demographic than PC gamers, it turns out), and what PUBG should do.1

Chinese mobile games’ huge production quality upgrade

The production quality upgrade of top Chinese mobile games is something that has been a steady evolution, but it has hit me in the head recently just how big the improvement has been, even compared to a couple of years ago.

Some notable games that illustrate this:

  • Netease’s Onmyoji, launched at the end of 2016 and which is currently in closed beta for North America, is a game that screams “look at my shiny anime art style and impressive VO featuring top Japanese voice talents!”
  • Honor of Kings’ (Arena of Valor in the west) 60fps update, which launched in January 2017, completely changed the game’s experience. It’s as impressive a visual update as, say, Apple’s rollout of Retina displays IMO
  • Honkai Impact 3: anime-style ARPG, from a Shanghai-based studio

What these games represent is the coming of age of Chinese studios: these teams have mature dev and art pipelines, and have established processes that support large scale development on mobile. By large scale, I mean 200+ headcount projects (such as the Tencent mobile PUBG games in development), which I dare say I can’t think of one western dev at this scale on mobile.

And furthermore – these large teams all have launched numerous projects, so they have gone through trial by fire. So I think Chinese studios have a firm lead here just by virtue of accumulated experience.

The success of the Switch and what it means for mobile

In more general gaming, the Nintendo Switch also heavily outperformed versus expectations, largely driven by strong first-party titles such as The Legend of Zelda: Breath of the Wild.

What I personally found amusing, was the player raves around the mobile benefits of the Switch – e.g. Mario Kart parties during lunch-break at the office. Not to take anything away from Nintendo building a great experience – but this is exactly the type of thing that Chinese gamers have enjoyed for years on mobile, with core multiplayer games such as Honor of Kings.

If you were to compare the Switch with an iPhone (or top of the line Android), the only real advantages (from developers’ perspective) the Switch enjoys are 1) physical controller 2) Nintendo first-party games 3) premium pricing for games which players have accepted. For 2 & 3, it’s hard to see that change given app store dynamics and Nintendo’s interests, but 1) is an area where I could see some material changes.

I know in some ways this sounds backwards, but I believe firmly that controller peripherals offer a major opportunity to elevate core gaming on mobile. This is a classic multi-sided chicken & egg problem: without strong adoption of controllers, games have little interest to support/demand them; without great games, controllers can’t sell. I wouldn’t be surprised to see some shift arising from China – there are already some interesting controller plays at small scale, such as this brand of controllers with dedicated software optimizations for playing Honor of Kings / Rules of Survival.2

  1. PUBG’s China publisher, Tencent, is not sitting around to find out – it has not 1 but 2 PUBG-licensed mobile games in production. ↩
  2. So far this is still janky, as these hardware players don’t have official support and have to operate in a grey-market fashion in terms of how they integrate with the games – a bit like the jailbreak app days on iOS. ↩

Why PUBG is Fresh

by

PUBG (PlayerUnknown’s Battlegrounds) is without a doubt the breakout PC game of 2017. Even though it’s just in early access and offers only one map (and plenty of bugs / missing features), it has established itself firmly in the world of competitive online multiplayer games.

As a relatively late adopter of the game, I’ve put in 60 hours in the game in the last 3-4 weeks, and feel I’ve had enough exposure (and luckily half a dozen Chicken Dinners) to put down some rough thoughts on why the game feels so fresh and is doing so well.

I’ll start by admitting I’ve not played the earlier Battle Royale style games (the ARMA / H1Z1 mods, or titles like The Culling), so I lack insight on what PUBG does better. Having said that, the base “Battle Royale” gameplay can be seen as an addictive mix of Roguelike single game progression and a tactical PVP shooter.

The Roguelike elements:

  • Randomized flight path = a different starting game state per run
  • Randomized loot = varied progression per run
  • Punishing perma-death for a single run = high emotional intensity (even if actual gameplay is slow)
  • 100-player PVP, general expected outcome for any run is “you lost” = very high emotional spikes when you do get the chicken dinner; not a lot of grief when you lose, in addition to the desire for “one more turn”

The tactical shooter elements:

  • Map is fixed = strategy and mastery via learning the map
  • Weapons variety + huge map with varied landscape= mastery curve of different weapons in varied combat scenarios (close quarters, open fields, hills etc.)
  • 2 / 4-player squads mode + revive mechanic = teamwork / coordination mastery

I also want to talk specifically about the game’s pacing:

  • The game has strong emotional intensity (you could die at any moment in 1 sec), but given the map’s size the mid game pacing is usually very slow (if you survived any hectic early-game chaos, which is the player’s choice)
  • This slow pacing is not boring in either solo or group modes, as in solo it plays on the player’s feeling of isolation, while in group mode it creates an opportunity for players to chat. This is actually fairly key for the game’s social experience (a team looting together and swapping gear is a good bonding experience), and helps with the game’s learning curve for new players (who are most likely introduced by friends)
  • The pacing downtime is also ideal for streaming as it gives streamers plenty of moments to interact with their viewers, which is a core part of the streaming experience
  • And ultimately, this pacing is very much at the player’s discretion – the player can choose for an exciting early-game by jumping into a high traffic spot, and can be on the offensive during mid-game hunting for kills as opposed to camping. And furthermore, PUBG side-steps the entire experience of “garbage time” in an online PVP game (e.g. a one-sided stomp in LoL or Overwatch, which you still have to play out), as the game is over when you die and you can immediately jump back into the matchmaking queue

Additionally, some thoughts on 3rd person vs. 1st person perspective:

  • While I understand high-skill competitive players’ complaints about 3rd-person being unfair (campers gain information without putting themselves at risk), it also makes the game feel much more accessible to new players (as a viewer on twitch summarized, it lowers the skill-ceiling while raising the skill-floor)
  • The devs are introducing 1st-person servers, which is an “easy” experiment to try (and shows they are listening to their audience), but this could be high risk in terms of fragmenting the game’s identity. What I mean by this is PUBG in its current form is not an esports title, and it doesn’t have to be – WWE is not sports but is entertaining, popular and commercially successful. If the devs start focusing on making the game more balanced for competitive play, it may hurt some of the organic fun that makes it fresh in the first place