With the recent releases of Apple’s second-generation iPad, Nintendo’s dimension-defying 3DS, not to mention the possible late-year debuts of Sony’s NGP (i.e. PSP2), 2011 is certainly shaping up to be the Year of the Portable. And while these handheld devices may share many of the same characteristics of their home console cousins, it’s one aspect in particular that’s set the world of software development on fire: fast ‘n’ easy digital distribution. Are we seeing the death knell of the retail system as we know it? Or is this the birth of a complex, synergistic partnership that will forever change how videogames are bought and sold…and made?
In this latest edition of PING/PONG, your favorite two windbags try their best to breathe some life into what may end up being the most disruptive assault on the videogame industry yet.
Nintendo’s Garage Barrage
I think its the now-famous quote from Nintendo of America president Reggie Fils-Aime’s that his company is “not looking to do business today with the garage developer,” that’s really the reason we’re talking about the future of these so-called ‘garage developers’ in the first place. I think the real danger here would be to play the type of semantics that could easily trip this discussion into the relative worth and merit of just what constitutes what Reggie is calling “the true independent developer vs. the hobbyist,” and I’m hoping we can avoid that.
I think one of the major reasons we’re all so interested in what Nintendo’s corporate option may be on the subject is due to their leadership position in the market; for decades they’ve ruled the mobile gaming world without much effort, having released successive hardware platforms that have gone on to not only dominate the landscape, but helped introduce input systems and viable technology that has become standard in even the most basic non-gaming hardware. A strong argument could be made that it was their best-selling DS that helped instigate so much of the recent transition from cold, sterile ‘mobile’ PDAs and similar tech to the soft, user-friendly smartphones and likewise similar tech that dominates the landscape today.
But with the introduction of the 3DS – and even 2009’s mini-upgrade the DSi, we’ve seen a very different side of Nintendo; one seemingly prone to rushing unfinished and suspiciously familiar hardware to market without much thought to support it. But it’s really the DSi and its capabilities for digital-download that I’d like to start with, as its that minutely-upgraded DS – complete with SD memory card + internal storage – that seems to portend how Nintendo views the world of digitally downloaded software, and thus, would most influence their worldview over the so-called ‘garage developers’. I know you’re a big fan of the console’s DSiWare platform, John, and I’m curious to what you think about this.
I wouldn’t necessarily say I’m a “big fan” of DSiWare but the platform has some unsung gems inside. It’s Nintendo’s model of making those gems more well known that makes them unsung, I guess. This model speaks to their whole attitude toward digital distribution in general and thus the so-called “garage developers” who are increasingly flocking to that kind of distribution. Let’s keep it real. Nintendo makes their money in retail. Physical distribution and the struggles with ornery retailers is how Nintendo does business. From my eyes, it’s like they see digital distribution as an enhancement to their retail bedrock. It’s a sidekick business model for them, a supplementary one. Retail is the steak, the main course meal, while digital is the appetizer, the garnish. It’s no surprise that they make remarks like this. They have a vested interest in protecting the retail tradition.
When Apple’s iSpys and Google’s cybernetic Androids intrude and try to disrupt this tradition, it puts Nintendo on the defensive. Then much like what happened in the music industry in the 2000s, the intruders send the price range to rock bottom forever changing how music is sold. Sure Wal-Mart and a few other places still sell CDs (in increasingly smaller sections) but the big music store is dead. Those who don’t bootleg go to iTunes instead of the former Tower Records. Nintendo knows the same can happen to them and they are fighting this unexpected revolution on behalf of the old way.
That old way gave power to the big publishers who swallowed up smaller developers and then discarded them when they no longer served their purpose. That old way made it harder for the amateur gamemaker to get their games to the masses without going through one of the big wigs in some way. That old way began to favor the establishment over the upstart and now the upstarts are looking for a new avenue to get their ideas seen. Web gaming gave them an opportunity and so did cell phone gaming. But with Apple’s new platform followed by Google’s Androids, the upstarts have another shot to become more than peripheral players in this videogaming business. Nintendo is certainly no Activision or Electronic Arts but that shot may has well been aimed right at their head. And so comes the infamous comment from The Regginator.
Even if he didn’t mean it explicitly, I think the thing that so many found offensive about Reggie’s ‘garage developer’ comment was the air of entitlement and elitism surrounding it. One might say the wording was deliberate; its well-known cultural trivia that Apple themselves evolved from their ‘garages’, and perhaps this was Reggie’s attempt to get off a zinger at the very company many have taken to calling Nintendo’s successor-to-the portable throne.
A few years back there was an independent developer by the name of Robert Pelloni, who made headlines in his quest to single-handily develop and publish a role-playing game (Bob’s Game) on the DS, thereby achieve a lifelong dream of becoming an ‘real’ publisher. He documented his process online, going through the hurdles to become a ‘certified’ Nintendo publisher and even modifying his private business to accommodate their wishes. Needless to say, his application for development was rejected and an ‘official’ version of Bob’s Game on the DS was not meant to be.
To me, this is the defining example of where I agree/disagree with Nintendo’s position on hosting independent developers on their platforms. On one hand, by being selective about what software they allow also assumes some responsibility on their part; hence, no AO-rated or pornographic titles alongside Mario and Donkey Kong. Furthermore, Mr. Pelloni wasn’t an innocent victim in all this. He was clearly mentally unstable, having took his ‘crusade’ to the physical world and even launched ‘attacks’ on Nintendo’s stores to protest their decision. The actual merits of his game notwithstanding, he appears to be a prime candidate for the type of hobbyist developer that Reggie was referencing.
On the other, the burden of such a self-imposed responsibility shouldn’t be leveraged against those lacking the established cred of their corporate peers. It’s almost a Catch-22 for those looking to join the realm of the establishment; incorporate business licenses, physical street offices, certified tax-ids, insurance, etc., the list of what a ‘real’ developer should have goes on an on. But do any of these things actually lead to bigger and better games? They certainly lead to faster and quicker production of games, no doubt, but not necessarily better. Where’s my cookie-cutter?
Certainly larger, multimillion-dollar development studios aren’t without their individual blemishes, and I’m sure tucked away deep inside the cubicles of [insert-developer-studio] you’ll find several individuals whose personal lives and personalities make Mr. Pelloni’s look tame by comparison. I can see politics at play here, but it wasn’t always this way, at least not during the heyday of what some might call the Golden Age of independent development. I’m talking about the days before the market crash of ‘83 nearly caused the extinction of the videogame industry as a whole. A time when developers (usually in teams no bigger than two, sometimes less) had to resort to serendipitously ‘hiding’ their names inside the very games they made, accessible only with trick movements or other secretive methods – the first digital Easter Eggs!
Whew, catch your breath there, Mr. Universal. About the elitism of Reggie Fils-Aime’s “garage developers” comment, it’s certainly not the best look. Good games can come from anywhere whether it be some well-established corporation loaded with bank or some hobbyist typing up code in his bedroom working a day job. It doesn’t do a company with shaky 3rd party support any good when it comes off—as Black folks say—saditty and seemingly stuck up like this. But it only reminds me of Nintendo’s entry into this business versus the others who make up this industry.
Regardless of how Nintendo started in 1889 as a playing card company, Nintendo was NOT from the garage in the early videogame era of the 1970s. Then-President Hiroshi Yamauchi was at the time a 50-year old gray-haired established buttoned-down businessman not some young scruffy-haired kid striving for a dream. In the 1960s videogaming was an exclusive hobby of the MIT set. Nerdy college kids with an idea who weaved through the technical difficulty producing a novelty to share and trade with friends. Nolan Bushnell (Atari) along with Ralph Baer (Magnavox Odyssey) transformed this imaginative pastime into a business in the 1970s yet that 1960s dreamer spirit still survived. When Bushnell allowed Atari to become a part of Warner Communications in 1976, an exploitative corporate spirit ran parallel to imaginative spirit of the hobbyists. Despite the efforts of the idea-men in that “Golden Age”, that overwhelming exploitation led to the destruction of the business in 1983. And that in turn led the way for this old Japanese businessman to set things straight.
When Yamauchi’s Nintendo rewrote the bible on how the videogame business should be run in 1985 via the NES, it shifted the industry’s capital from America where it was born to Japan where it still is today. They ended the ‘Wild West’ ‘anything goes’ atmosphere that speculators thrived in and the dreamers were incapable of stopping. Everything about Nintendo was about structure, control, and professionalism. The Nintendo Seal of Quality was their golden stamp of approval to assure discerning customers that they were dependable and responsible. Dreamers existed within Nintendo’s walls but those walls were owned by the sober serious mind of Yamauchi. Nintendo became the Law and Order of the videogame industry and in the process saved the industry from itself. Unlike one-time collaborator Rareware, Nintendo was never part of the UK bedroom home computer developer scene that Codemasters was a part of. Nintendo was never a pack of youngsters eating Top Ramen and drinking store brand sodas trying to make a hit from their garages. These guys came to America already having a factory and a sizable brick and mortar headquarters. Naturally, their perspective on how the industry should run will be different.
The dreamers had a shot at realizing their vision on how the videogame industry should work and that was the personal computer. Today, the PC retail market is basically dead except for Blizzard’s games. Many of those dreamers like Trip Hawkins (founder of Electronic Arts and the 3DO) left the PC behind for the consoles THEMSELVES in the early 90s. Today he grumbles about Nintendo looking at the window from the outside in. Yet after all these years Nintendo somehow keeps their vision of how the business should be and succeeds with it. I’m sorry but I have to lend a little more ear time to the one who took on the conglomerate behemoths and won. I have to pay a little more credence to the one who has proven themselves to be successful by doing things their own way. I don’t see layoffs at Nintendo. I don’t see yearly losses and need to monetarily subsidize consoles at Nintendo. Somehow they get people to buy a bunch of little bitty cards and discs and make a pretty good living. Maybe, just maybe, their vision on how the industry should work is correct.
Nevertheless, I don’t think it does them any good to even hint of elitist attitudes. Apple is giving them the fight of their life and they will need as many on their side as possible. For every Bob’s Game there is a Cave Story, Blast Works, and World of Goo. They can have many more games like that by reexamining their policy on giving out development kits. Every professional was an amateur once after all. To echo your earlier commentary, it’s a Catch-22. By letting every Thomas, Richard, and Harris gain access to your magic is basically giving away the store. That secret recipe is the source of their success and it should be valued. But by putting up all these barriers, it prevents the potentially good to shine on your platform. I understand very well Nintendo’s aversion to the flaky and untrustworthy knowing their history in this business. But good ideas should always trump those filters to access. If they can’t go to you, they WILL go elsewhere and then compete against you. And Apple is waiting on them with open arms.
We’re no longer living in the theoretical ‘what if’ world, but the genuine article. Would games like Angry Birds and Tiny Wings have been developed under Nintendo’s supposedly ‘repressive’ and limiting system? Rovio CEO (Angry Birds developer) Peter Vesterbacka certainly doesn’t seem to think so, but in keeping with his avian theme, he could be counting his digital chickens before they hatch. While Nintendo has seemingly launched an ‘attack’ aimed squarely and the growing field of mobile developers (i.e. Apple’s) and Rovio may be prematurely discounting the need for consoles in the future, that hasn’t stopped the two from working together; Angry Birds is planned to hit Nintendo’s 3DS eShop in the near future, having already nested quite nicely inside Sony’s growing digital ecosystem.
Speaking of Sony, I think every major publisher/developer should take a few lessons from their initial dalliance with digital-only distribution, namely the ill-fated PSPgo + PSN platform. Charging full retail prices for UMD, box, instruction manual, non-transferable copy-only games didn’t quite fly with just about anyone. The perceived cost of manufacturing and distributing your boxed retail game – most of which is missing from digital copies – was never disentangled from the source. I see this vestigial (over) pricing system in play with many traditional console developers trying to sell their digital wares in newer non-Nintendo, non-Sony markets. Square-Enix is probably the biggest offender, as their pricing models are regularly the most expensive (and most mocked) in Apple’s iTunes Store.
But its their prerogative to sell their products at whatever price they choose, and the market of fans and consumers will bear their decisions out. To bring this discussion to its logical and most welcome conclusion, I think its important to bring up another now-famous quote from Nintendo’s Reggie, in which he claimed that Rovio’s best-selling Angry Birds (priced at $.99 in the iTunes Store) was “under-priced”. But the game is also completely free in the Android Marketplace, and upwards of $2.99 on Sony’s PlayStation Network. The disparity in pricing what could reasonably be called the most popular game in the world is fascinating to me, as it represents the best and most compelling look at what happens when software itself becomes a commodity; Nintendo can choose to price their games however they wish, as they have the luxury of also controlling the hardware they’re played on.
The rise of so-called ‘garage developers’ is really the rise of independent developers, which in truth means independence from an establishment that has until now enjoyed full control over the walled-garden of home console entertainment. Nintendo may feign concern over this apparent breach into their maintained Garden of Eden, but for a company so famously associated with the advantages of their beloved Blue Ocean strategy, it comes across a little presumptuous. After all, what kind of message would a company whose mascot is the very definition of the ‘working man’ himself be sending if they didn’t let a few more people in the garage to play?
It’s telling to me that Rovio’s Vesterbacka talks trash about Nintendo’s “$49 pieces of plastic” saying consoles are dying yet still wants to do business with those consoles. If digital was the way to go and the old consoles are dinosaurs, then stay on iOS and Android. But despite all of that huff and puff, it goes to show that consoles are still relevant and still a money-making opportunity for gamemakers. The truth is a smart developer will maximize every avenue to get his/her game seen (and thus bought). It makes me happy that Apple and Google are providing another environment for expressing great gaming ideas like, say, Tiny Wings. I will NEVER begrudge that. The more avenues available the better. What I worry about is the long-term fate of the business if Apple’s model became the ONLY model in which games can be sold.
This is not the videogame hobby. This is the videogame BUSINESS. That 1960s spirit I talked about earlier still exists and will always exist. There are still those who make games just for the sake of making games. They create and then share with their friends only getting paid in compliments and kudos. But when it comes to business it’s about making sure people can continue to make a decent living in this trade. Understanding this, I sympathize with Nintendo’s President, Satoru Iwata, and his words about “value” at the recent Game Developers Conference. If $1 becomes the norm for game pricing, does it also commoditize the developers who make those games in the long run?
Videogaming ain’t like music. iTunes is only one place out of many you can listen to music. But to play a videogame, you must interact with that particular platform. You can’t just drive down the street and have people on the sidewalk see and hear your game as you pass. I also find it interesting that even after 10 full years of iTunes’ existence most of the artists featured there are backed by major record labels, the equivalent of the videogame publisher. You would think that there would be a indie music renaissance thanks to iTunes helping to replace retail-purchased CDs as the mainline way of buying music. Complaints from record label-backed Kid Rock as well as some independent music artists like The Flashbulb about their paltry payment from iTunes show that going all digital is not necessarily the utopia it’s advertised to be. While there are still many problems in the old retail tradition, it still remains the main way to boost a videogame company’s revenues (and hopefully profits). As Sony found out with the PSPgo, digital distribution brings as many problems as it does solutions. How to properly price the downloadable games to profit? How to advertise games from a closed system to the open public?
One of the biggest problems resembles a catastrophic one from nearly 30 years ago. With game prices dropped by default to increments of $1 or $2 and a wide open App Store with virtually no limit of game content to choose from, wouldn’t this one day lead to a biblical flood of poor software? And wouldn’t that flood of crap eventually turn off potential customers leading to yet another videogame market crash? Shovelware is bad on the existing consoles now but there is only so much space available to display it. In a digital marketplace, the space is as endless as the provider’s network allows. Copycats, then lazy copycats, then cheapo cash-in after cheapo cash-in that would take customers hours to browse through due to the overabundance of choices. The good stuff may get increasingly buried by the junk until it is unfairly lumped in with that trash. Eventually it becomes a cesspool that nobody makes money in—good, bad, or indifferent. Just like the Crash of 1983. Like I said videogaming is not like music. The song says You Can’t Stop The Music but the videogame CAN be stopped and it has been before. It is a much more fragile industry by far that needs nurturing and caretaking to ensure its longevity.
There must be some middle ground here. Console game prices (and game console prices) are getting too high and are squeezing the customers too tight in the pocketbook. Digitally distributed game prices are too low and in time won’t allow the gamemakers to be able to make a decent living in their chosen profession. FREE is the best price for ME, the Customer, not $1 or $2. Try $0, that’s best on my wallet. The HIGHEST price is the best price for THEM, the Business, not $40 or $60. Try (Dr. Evil pinky) $1,000,000, that’s best on their fiscal sheets. But I don’t want these hard working people to be slaves so I’m willing to pay a tribute in appreciation for their efforts. Likewise the business understands that in this Pyramid of Life most people have low modest incomes so they’re willing to price their wares fairly to maximize the amount of people who can buy them. Where the balance is between these extremes is the issue of debate.
It’s understandable that the small indie developers want to escape the pitfalls of this old system and flock to an environment where they can control more of their own destiny. But they must think about the long term health of this business. Will they ultimately destroy their ability to earn once videogaming becomes commoditized? It’s not a foodstuff or natural resource people use every day. It’s a low-cost luxury that people have the option of passing on. And it’s understandable that well-established Nintendo wishes to protect their bread-and-butter from the uncertainties the new system will bring. But they must think about the disruptive competition in the short term. Will Nintendo render themselves obsolete by refusing to adapt to change? The Sony PlayStation’s $50 black discs ended Nintendo 64’s $70 gray cartridges forever. Going higher when a strong competitor’s on the lowball will not help Nintendo maintain control of the market. For both’s sake, the garage guys and the headquartered honchos had BETTER do business with each other. Their futures may depend on it.