Posts Tagged‘revenue’

Are We Really Surprised Mars One is Looking Like Bunk?

Getting humans anywhere in the solar system is messy, difficult and above all expensive. We creatures of flesh and bone have an inordinate amount of requirements that need to be met so we don’t cark it, necessitating a whole bunch of things that our robotic counterparts simply don’t need.Thus manned space exploration missions aren’t usually at the forefront of science, instead they’re done to win over the hearts and minds of the people, inspiring the next generation to continue with these endeavours. I think this is why many of the general public wanted Mars One to succeed even though it was clear from the onset that the project would never deliver on its lofty goals.

MO-Lander  poster Aa

Mars One was announced almost 2 years ago amid a flurry of other Mars related news, something which I’m sure helped elevate its profile above what it would have been otherwise. The idea plays heavily on the romanticized notion of the frontier, that us regular people could be a part of something greater by living at the very edge of human existence. The project made no secret that it was going to be a one way trip and so it took on this idea that it was some kind of noble sacrifice for greater good of humankind. Of course that idea kind of fell apart when they said that the mission would be mostly funded through a reality television series that they’d film as part of it. Not that this discouraged anyone as apparently tens of thousands of people applied for it.

I’ve said before that a one way trip to Mars isn’t a noble idea at all, being selfish more than anything, and the Mars One mission played into the egotistical mindset required by someone who’d want to undertake this mission. Sure there might be some good science done along the way however the way that Mars One was approaching it, which was by using external contractors to do the majority of the heavy lifting, wouldn’t be driving anything forward that wasn’t already well underway. That, coupled with the fact that they really didn’t seem to have any revenue source apart from the TV series (which they never announced a timeline for), meant that it was looking pretty sketchy even before the project got seriously underway.

Now we’ve had one of the top 100 finalists break their silence on the process and the insights he’s given have been pretty damning. It seems that the selection process hasn’t been that rigorous at all with the only things being required so far being the initial video, a questionnaire and a quick Skype call with the chief medical officer. Worst still it appears that making it into the top 100 could be as easy as just giving them money as the selection process is heavily based off the number of points a candidate has which, funnily enough, can be acquire by purchasing Mars One merchandise. The final nail in the coffin is that Mars One appears to have lost its contract with the media company that was going to do the TV series, something which was supposed to bring them the bulk of the $6 billion they’d need.

In all honesty it shouldn’t be that surprising as the writing was on the wall for Mars One from the day it was first announced. I’m always willing to be proven wrong , heck if they managed to pull this off I would’ve shouted their success from the rooftops, but the more we find out about Mars One the less likely it appears that they’ll ever get anything off Earth. Mars One is yet to comment on these recent revelations and I doubt they will as they’re likely hoping everyone will just write this off as one disgruntled participant. I for one am not and I hope you, dear reader, will heed his words carefully.

The Engine Revolution: Free is the New Paid.

I remember when I was a doe eyed teenager thinking that it would be great to make games (I know better now, of course) if I could only afford the fees to get a good engine. You see back then commercial engines were licensed for inordinate sums of money and the technical hurdle of building your own engine was fraught with danger. Over time though that has changed with old engines being open sourced, new products entering the fray and licensing models shifting to be more palatable to those who might not be able to afford huge upfront costs. Today it seems that free is now the way to go as 3 major platforms have just announced that their engines are free for all who want them, opening up a wealth of possibilities to indies and big development houses alike.

Free Game Engines

Unity has been the mainstay of many indie games for quite a while now, enabling many to create games that would’ve otherwise been impossible. They’ve also long been sympathetic to the cause, offering free (but often cut down) versions of their engine to anyone who’d ask for them. The difference between the free and paid tier has been eroded completely with both versions containing all the same features and editor. This is a big step for Unity as there was a definite rift between the paid and free versions, something that was abundantly clear to me when I was tinkering around with it. Now the difference between the tiers comes in the form of additional services and can be had for a measly $1500 (which includes a team license) or $75/month if that’s too rich for your blood. Suffice to say that I think Unity is likely to remain the king of indie engines for a long time now as even the pro tier is well within the grasp of aspiring devs.

Not to be outdone by Unity Unreal announced on the same day that their new Unreal 4 engine, which has had some incredibly impressive demos, is now free to any and all comers.The barrier to entry wasn’t particularly high before, they only charged $19 to get access to the engine and all its source, however that’s enough to stop some people from considering it in the first place. Now you’ll be able to get it everything that program gave you for free and you won’t have to pay a dime until you’re able. The limit on revenue isn’t particularly high though, only $3000 per product per quarter, before you have to shell out 5% of gross revenue something which could be a killer for some devs. Still it’s hard to deny what the engine is capable of producing so it might be an easier sell for more established dev houses.

Lastly Valve has swaggered into the picture debuting their new Source 2 engine and announcing that it will also be free to anyone who wants it. It’s been not-so-secretly released as part of the DOTA 2 development tools for the better part of a year now and by all accounts seems like a really capable next-gen engine. Source 2 appears to be the most “free” of the free engines that have debuted in the past couple days with Valve wanting no money up front for the engine nor any backend revenue should you make it big. However there is the caveat that the resulting game be released on Steam which means all sales on there give Valve their 30% cut although you’d incur this same cost regardless of which engine you used if you sold on Steam. Source 2 is then something of a loss-leader for future sales, a clever move by Valve to bring more developers onto their platform (as if there wasn’t enough already).

With this many options available now developers are now spoiled for choice when it comes to selecting an engine for a game, something you really couldn’t say even a few years ago. Whilst I think Unreal will probably be the least likely one to be used out of the current 3 I think there’s going to be some stiff competition between Unity and Source 2 as time goes on. Unity has the head start in this regard as their tools really are top notch for both novice and advanced developers alike but Source 2 has the potential to turn into something amazing based on the community that Valve seems to develop around every one of its products. The real winner in all of this is us, the gaming public, as it means more games will get made and more concepts will be explored.

Microsoft’s Surface is…Doing Ok? What?

Microsoft’s hardware business has always felt like something of an also-ran, with the notable exception being the Xbox of course. It’s not that the products were bad per se, indeed many of my friends still swear by the Microsoft Natural ergonomic keyboard, more that it just seemed to be an aside that never really saw much innovation or effort. The Surface seemed like an attempt to change the perception, pitting Microsoft directly against the venerable iPad whilst also attempting to bring consumers across to the Windows 8 way of thinking. Unfortunately the early years weren’t kind to it at all with the experiment resulting in a $900 million write down for Microsoft which many took to indicate that the Surface (or at the very least the RT version) weren’t long for this world. The 18 months that have followed however have seen that particular section of Microsoft’s business make a roaring comeback, much to my and everyone else’s surprise.

Surface-Pro-3

The Microsoft quarterly earnings report released today showing that Microsoft is generally in a good position with revenue and gross margin up on the previous quarter of last year. The internal make up of those numbers is a far more mixed story (covered in much better detail here) however the standout point was the fact that the Surface division alone was $1.1 billion for the quarter, up a staggering $211 million from the previous quarter. This is most certainly on the back of the Surface Pro 3 which was released in June 2014 but for a device that was almost certainly headed for the trash heap it’s a pretty amazing turn around from $900 million in the hole to $1.1 billion in revenue just 1.5 years later.

The question that interests me then is: What was the driving force behind this comeback?

To start off with the Surface Pro 3 (and all the Surface Pro predecessors) are actually pretty great pieces of kit, widely praised for their build quality and overall usability. They were definitely a premium device, especially if you went for the higher spec options, but they are infinitely preferable to carting around your traditional workhorse laptop around with you. The lines get a little blurry when you compare them to an ultrabook of similar specifications, at least if you’re someone like me who’s exacting with what they want, however if you didn’t really care about that the Surface was a pretty easy decision. So the hardware was great, what was behind the initial write down then?

That entirely at the feet of the WinRT version which simply failed to be the iPad competitor it was slated to be. Whilst I’m sure I’d have about as much use for an iPad as I would for my Surface RT it simply didn’t have the appeal that its fully fledged Pro brethren had. Sure you’d be spending more money on the Pro but you’d be getting the full Windows experience rather than the cut down version which felt like it was stuck between being a tablet and laptop replacement. Microsoft tried to stick with the RT idea with the 2 however they’ve gone to great lengths now to reposition the device as a laptop replacement, not an iPad competitor.

You don’t even have to go far to see this repositioning in action, the Microsoft website for the Surface Pro 3 puts it in direct competition with the Macbook Air. It’s a market segment that the device is far more likely to win in as well considering that Apple’s entire Mac product line made about $6.6 billion last quarter which includes everything from the Air all the way to the Mac Pro. Apple has never been the biggest player in this space however so the comparison might be a little unfair but it still puts the Surface’s recent revival into perspective.

It might not signal Microsoft being the next big thing in consumer electronics but it’s definitely not something I expected from a sector that endured a near billion dollar write off. Whether Microsoft can continue along these lines to capitalize on this is something we’ll have to watch closely as I’m sure no one is going to let them forget the failure that was the original Surface RT. I still probably won’t buy one however, well unless they decide to include a discrete graphics chip in a future revision.

Hint hint, Microsoft.

RIAA’s Decline Might Be a Sign of Changing Times.

It’s no secret that the digital age has brought on a lot of headaches for content producers and rights holders alike. Where once their traditional business models served them well they have struggled to migrate them to a world where the traditional barriers no longer existed and customers began demanding more from them. Where this demand wasn’t met by legitimate means many turned towards other methods, many of which provided a better service and higher quality product than they’d otherwise have access to. In all honesty it should have come as no surprise to us as this trend has been going on for some 100 years with the rights holders always being brought kicking and screaming into the modern age. However there are signs that they might finally be starting to get it, even if that isn’t directly translating into the product they’re willing to offer us.

RIAA Logo

There’s been a few examples of executives from some high end content producers, like HBO for example, who’ve gone on record saying that piracy isn’t a big concern for them anymore. Indeed many of them are now starting to see piracy as an ancillary marketing tool and indeed there’s been a couple studies that have shown the biggest pirates are among the ones who spend the most on the products they pirate. Unfortunately whilst they might have a positive outlook on what piracy does to them they don’t seem to be warming to the idea of addressing it directly such as providing a service that out-competes the pirates. This is especially true for countries like Australia which are bereft of good, legitimate options which, unsurprisingly, leads to us being some of the filthiest content pirates in the world.

It does seem that this sentiment from some content executives isn’t just hollow rhetoric either as there seems to be tangible flow on effects that I honestly didn’t expect. The Recording Industry Association of America (RIAA), the primary body responsible for pursuing litigation against users who’ve infringed on their member’s copyrights, has recently reported a huge downfall in revenue. Primarily this comes from a decline in membership fees which is a direct result of rights holders no longer wanting to continue their membership with them. Much of their spend has decreased as well with their legal budget declining sharply over the past couple years. I haven’t seen anything stating similar outcomes for the other content associations but I’d assume it’s a very similar picture which is good news for both legitimate and illegitimate consumers of content.

The next step that the rights holders take from here though is what will ultimately determine whether or not they will be able to compete in today’s market. It’s one thing to stop wasting your money on pursuing small cases of copyright infringement here or there and another thing completely to revamp your business model in order to compete against those who are peddling your product illegitimately. For now that second piece of the puzzle is still missing and until the rights holders take a page out of Valve’s book their piracy problems aren’t going to go anywhere. They might not care so much about it now but it won’t take long until some little upstart comes and eats their lunch.

PC Gaming is Back (But Not The Same as Before).

We PC gamers have been in the minority for quite some time now, just over a decade if my memory serves me. Whilst many, including myself, get all nostalgic for the days when the PC was the gaming king, being the de-facto platform for any developer the last decade hasn’t exactly been terrible as a PC gamer. Indeed many of the AAA titles still made the effort to create a PC release, even if it would only account for single digit percentages of their player base. There’s been rumblings about a PC resurgence for some time now, mostly on the backs of the aging previous console generation, but apart from some highly speculative numbers there hasn’t been much more to support this.

That was until today.

Glorious PC Gaming Master Race

DFC Intelligence, a video game and entertainment research/reporting company, recently released a report stating that PC games had overtaken consoles in terms of revenue. Considering that PC games rarely make it into any top sales charts this does seem somewhat counterintuitive but according to DFC much of this revenue is due to an explosion of interest in the MOBA (DOTA2, League of Legends, etc.) genre. Other than that there’s still a healthy mix of your typical kinds of PC games: MMORPG, FPS, RTS, etc. but the resurgence of PC gaming  is almost entirely due to the popularity of MOBA titles. There’s also apparently more overlap between PC and console gamers with the console now being seen more as the secondary system to the PC. All of this bodes well for PC gaming but for long time veterans like myself the PC gaming of today is much different to the one of the past.

Whilst I knew that the MOBA genre had seen a massive amount of growth in recent times, mostly due to League of Legends, I had hardly thought it was enough to push PC revenues past that of consoles. This is mostly likely due to the incredible number of monthly active users that the top 2 MOBAs have with 67 million League of Legends and 6.5 million DOTA2 players respectively. Compare that to say Call of Duty which has 40 million and it’s easy to see why the PC platform would be making a resurgence, especially considering that their free to play nature usually means a reliable revenue stream. Hell I avoid most free to play games like the plague (and even I do play them rarely do I spend any money on them) but DOTA2 has managed to make me part with a decent chunk of cash over the 1600 or so hours I’ve spent with it. I know I’m not unique in this either but it does say something about what the PC platform has become.

Those of us who wished for the second coming of PC were looking for it to become the primary development platform, the one all developers targeted first. Whilst the consolization of PC games has improved significantly (and is likely to get even better now that consoles and PCs share the same underlying architecture) I still think that the trend is unlikely to change any time soon. Whilst the PC as a platform might be bringing in more revenue than consoles it’s primarily limited to a single genre, one that’s already dominated by 2 massive titles. In terms of AAA title development I get the feeling that consoles are still the prime target for developers, at least those who are playing outside of the MOBA space. I’d love to be wrong on this but it really does look like these numbers are skewed by the phenomenon that is League of Legends more than PCs in general.

Still this could be the catalyst required to vault the PC platform back to the top, especially considering how blurry the lines are now between consoles, PCs and even mobile (to some extent). Most of us PC die hards have made our peace with our console brothers but there’s always that lingering desire to want the platform you prefer to be the one on top. Realistically it doesn’t matter as long as you get to play the games you want to play but that competitive spirit that’s instilled in you from the time when you get your first gaming platform is hard to let go.

Don’t Turn me to AdBlock.

I’m probably one of the few geeks that doesn’t try to aggressively block all the ads that come to them via the Internet. I don’t find the majority of them intrusive to my browsing, especially if they’re the typical Google text blocks that sit nonchalantly beside the other wall of text that I’m staring at. Even the video ones, well mostly the ones on video sites like YouTube, are pretty tame and if they’re overly long you’re usually able to skip them after 10 seconds or so. My primary reason though is that I know that these ads support the websites that they’re on and the least I can do is let them show them to me.

I often get asked why I don’t run ads here on The Refined Geek. For the most part it’s laziness as the way I want to show ads isn’t exactly simple to set up. If I was going to show ads now I’d only want to show them to a subset of my readers (people coming here from searches and those who haven’t commented) and there’s no simple solution for that. Additionally right now I’m not really getting enough visitors to justify it as hosting this blog is cheap and I’m not exactly struggling financially. Once I reach a certain threshold of readers though you might see ads that are there to keep the site running, but that’s a little way off for now.

However recently I’ve noticed a trend with the ads that get presented to me. They’re all the damn same.

Now I do a lot of Googling, almost all of it when I’m logged in under my Google account. This means that Google knows quite a lot about me, enough to serve me some pretty targeted ads. In the past they’ve actually been helpful in tracking certain things down, especially if I’m looking to purchase something. However lately I’ve noticed that for certain sites I’m only getting served the exact same ad over and over again. This isn’t a caching issue or anything like that because it follows me between work and home. The most annoying part of it too is that I’m getting products advertised to me that I was already interested in buying or have already bought.

I have 3 examples of this which is what has made me think there’s something more to this than just dumb luck. The first I noticed a couple months back when I did a search for synthetic diamonds, wanting to see how far they’ve come in the past couple years. Now on certain sites all I’ll get is an ad for a particular online diamond store, over and over again. The second was for the GoPro HD Hero 2, a great little camera that I’m looking to take with me when I do Tough Mudder in just over 6 weeks. The third and final one is for Fat Gripz, an exercise accessory that came recommended to me from my brother in-law. I’d say about 50% of the ads I see online are these and they’re getting to the point where I want to block them entirely.

The explanation behind this is mostly likely that these are the highest paying ads that the site can display when I visit the site. The way AdSense works is that advertisers bid for the space by putting up their cost-per-click price and then Google will show the best ad for the slot. The diamond store, GoPro and Fat Gripz likely have high CPCs due to their products having a decent margin in them (Fat Gripz especially) and thus they can afford to pay a lot more than others to get the same advertising space. Still you’d think after I’ve seen the ad 100 times and not clicked on it they’d get the idea and start rotating out other ads, but that doesn’t seem to be the case.

This is mostly just me whining about something that’s not much of an issue but as someone who’s trying to be a good netizen I feel like I’d hope my experience wouldn’t be bad enough to turn me to blocking them completely. Reddit et. al. gets this with many of the ads being rotated out for thank you pictures for those of us not running ad block. It’s not much but it does go a long way to help stem the flow of people to using things like AdBlock Plus. For now I’ll probably leave everything as is but if this trend continues I’ll soon be joining the ranks of my ad-block brethren.

PC Gaming: Retaking The Crown?

Make no mistake, in the world of gaming PCs are far from being the top platform. The reasoning behind this is simple, consoles are simply easier and have a much longer life than your traditional PC making them a far more attractive platform for both gamers and developers a like. This has lead to the consolization of the PC games market ensuring that many games are developed primarily for the console first and the PC becomes something of a second class citizen, which did have some benefits (however limited they might be). The platform is long from forgotten however with it still managing to capture a very respectable share of the games market and still remaining the platform of choice for many eSports titles.

The PC games market has been no slouch though with digital sales powering the market to all time highs. Despite that though the PC still remains a relative niche compared to other platforms, routinely seeing market share in the single digit percentages. There were signs that it was growing but it still seemed like the PC was to be forever relegated to the back seat. There’s speculation however that the PC is looking to make a comeback and could possibly even dominate consoles by 2014:

As of 2008, boxed copies of games had paltry sales compared to digital sales, and nothing at all looks to change. During 2011, nearly $15 billion is going to be attributed to digital sales while $2.5 billion belong to boxed copies. This is a trend I have to admit I am not surprised by. I’ll never purchase another boxed copy if I can help it.

The death of PC gaming has long been a mocking-point of console gamers, but recent trends show that the PC has nothing to stress over. One such trend is free-to-play, where games are inherently free, but support paid-services such as purchasing in-game items. This has proven wildly successful, and has even caused the odd MMORPG to get rid of it subscription fee. It’s also caused a lot of games to be developed with the F2P mechanic decided from the get-go.

The research comes out of DFC Intelligence and NVIDIA was the one who’s been spruiking it as the renaissance of PC gaming. The past couple years do show a trend for PC games sales to continue growing despite console dominance but the prediction starts to get a little hairy when it starts to predict the decline of console sales next year when there doesn’t seem to be any evidence of it. The growth in the PC sales is also strikingly linear leading me to believe that it’s heavily speculation based. Still it’s an interesting notion to toy with, so let’s have a look at what could (and could not) be driving these predictions.

For starters the data does not include mobile platforms like smart phones and tablets which for the sake of comparison is good as they’re not really on the same level as consoles or PCs. Sure they’ve also seen explosive growth in the past couple years but it’s still a nascent platform for gaming and drawing conclusions based on the small amounts of data available would give you wildly different results based purely on your interpretation.

A big driver behind these numbers would be the surge in the number of free to play, micro-transaction based games that have been entering the market. Players of these types of games will usually spend over and above the usual amount they would on a similar game that had a one off cost. As time goes on there will be more of these kinds of titles that appeal to a wider gamer audience thereby increasing the revenue of PC games considerably. Long time gamers like me might not like having to fork out for parts of the game but you’d be hard pressed to argue that it isn’t a successful business model.

Another factor could be that the current console generation is getting somewhat long in the tooth. The Xbox360 and PlayStation 3 were both launched some 5 to 6 years ago and whilst the hardware has performed admirably in the past the disparity between what PCs and consoles are capable of is hard to ignore. With neither Microsoft nor Sony mentioning any details on their upcoming successors to the current generation (nor if they’re actually working on them) this could see some gamers abandon their consoles for the more capable PC platforms. Considering even your run of the mill PC is now capable of playing games beyond the console level it wouldn’t be surprising to see gamers make the change.

What sales figures don’t tell us however is what the platform of choice will be for developers to release on. Whilst the PC industry as a whole might be more profitable than consoles that doesn’t necessarily mean it will be more profitable for everyone. Indeed titles like Call of Duty and Battlefield have found their homes firmly on the console market with PCs being the niche. The opposite is true for many of the online free to play games that have yet to make a successful transition onto the console platform. It’s quite possible that these sales figures will just mean an increase in a particular section of the PC market while the rest remain the same.

Honestly though I don’t think it really matters either way as game developers have now shown that it’s entirely possible to have a multi-platform release that doesn’t make any compromises. Consolization then will just be a blip in the long history of gaming, a relic of the past that we won’t see repeated again. The dominant platform of the day will come and go as it has done so throughout the history of gaming but what really matters is the experience which each of them can provide. As its looking right now all of them are equally capable when placed in the hands of good developers and whilst these sales projections predict the return of the PC as the king platform in the end it’ll be nothing more than bragging rights for us long time gamers.

Why Epic is Wrong About Mobile Gaming.

The world of mobile gaming is a curious one. It’s roots date back well over decade but it’s only really come into its own in the past few years as smartphones became capable enough and there were platforms available to support it. The industry blossomed on the backs of the small and independent developers who took advantage of the low barriers to entry to be able to release their games on the platform and is now a multi-billion dollar industry. As a traditional gamer I was a bit sceptical that it would amount to anything more than just another time waster platform, my opinion only changing after buying Infinity Blade which I thoroughly enjoyed. Still I’m a firm believer that the mobile platform, whilst definitely a successful industry, is not killing other platforms as you just can’t recreate the same experience on a tablet or handheld as you can with a PC or a console.

Of course the large game developers and publishers are concerned about how what the future of their business will look like. With mobile gaming carving out a good chunk of the games industry in such a small amount of time (about 6.4% of all games industry revenue) and social networking games grabbing about the same it really shouldn’t come as a surprise that they might be worried about it. Recently Mike Capps, president of Epic who create the Unreal engine, went on record saying that the flood of 99 cent games was killing them:

“We have not been this uncertain about what’s coming next in the games industry since Epic’s been around for 20 years. We’re at such an inflection point. Will there be physical distribution in 10 years or even five? Will anyone care about the next console generation? What’s going on in PC? Can you make money on PC if it’s not a connected game? What’s going on in mobile?

“If there’s anything that’s killing us [in the traditional games business] it’s dollar apps,” he lamented. “How do you sell someone a $60 game that’s really worth it … They’re used to 99 cents. As I said, it’s an uncertain time in the industry. But it’s an exciting time for whoever picks the right path and wins.”

If you take into consideration the vast majority of people who play games on their phones don’t play games on other platforms¹ then it makes sense that you can’t sell them a $60 game because the platform just isn’t suited to that kind of title. Sure people may spend a good chunk of time playing games on their mobiles (rivalling the amount of time spent on more traditional titles) but it’s in no way comparable. Most of the time spent on mobile games is done in fits and bursts as the platform is aptly tuned to, rather than the long continuous sessions that PC and console gamers are more accustomed to. In essence if you’re a traditional game developer or publisher looking to push your wares onto the mobile market you’re not going to be building the same kind of products, nor are you going to be charging the same price.

Additionally the mobile gaming industry is in no way killing any of the other platforms. Consoles are by far the kings of the industry bringing in over 40% of the total revenue with PCs still making up a good 20% (and is even growing despite the heavy competition). Sure mobile games have brought some disruption to the industry and have given pause to many developers and publishers who are trying to gauge where the industry is heading. Frankly though if you think that there’s no future left in the classic $60 titles then you deserve to go out of business, since the industry figures just don’t support that view.

I do agree with Capps’ claim that we’re at an inflection point where the games industry is facing quite a few fundamental changes. Just like the music and film industries before them though they will need to adapt to these market changes or face dying a slow death as they attempt to shoe horn their business models into the new world. I do believe that the games industry is far better poised to adapt and innovate with these market disruptions than their more traditional media outlets were and that was proven by just how fast mobile gaming caught on as a mainstream phenomenon. Still mobile gaming is a long, long way from killing off the traditional gaming sector and realistically it has a lot of growing up to do before it would ever have a chance at doing so.

¹I tried my darnedest to find some solid numbers on this and couldn’t find anything substantial. I stand by the sentiment though as from my personal viewpoint the vast majority of people who are mobile gamers are solely dedicated to that platform and don’t play games anything else.

 

Multi-Platform Development: Wise or Chumptastic?

Choosing a target platform when you develop an application is a big decision as your choice will influence many design decisions, make certain tasks easier and relegate some things to the realm of the impossible. For those of us with a managerial bent this dilemma is usually solved with a simple cost/benefit analysis, I.E. which of these platforms can net us the greatest revenue for the smallest cost? Usually this comes down to how large a particular user base of a platform is (although that’s not everything, as I’ve pointed out) as that translates into the largest number of potential sales. However the advent of application distribution channels such as the App Store and Xbox LIVE Marketplace has complicated this metric somewhat, especially for those developers making it on their own.

For large development houses the biggest market still appears to be the way that many of them gauge which platform to target first. One of the greatest examples of this is Call of Duty: Modern Warfare 2 as it owes its success to its beginnings on the PC. However the lack of dedicated servers angered the PC crowd who thought that their omission was a travesty against them and that their outrage was enough to sway Infinity Ward to change their minds. However if you took a look at the sales numbers PC copies of the game accounted for a  very small percentageof their overall sales putting that platform squarely in the minority. The developers rightly (from a managerial perspective) ignored the complaints as the additional work to develop the requested features would have far outweighed the potential sales that they could have derived. Still they catered to 3 platforms simultaneously as the opportunity cost for cross development for them was low thanks mostly to code portability between the Xbox and PC.

When you switch over to the other end of the spectrum the cost vs benefit analysis takes on a different form. You see in large organisations you have the benefit of being able to hire on people with the various skill sets required to develop a product for a targetted platform. If you’re lashing out on your own you are faced with the choice of either developing for what you know or training yourself up on the platform that you wish to target. Whilst most skilled developers won’t take long to become proficient when you’re looking to generate income every moment you spend not developing product is a sunk cost. Logic then dictates that you stay with what you know first before attempting to branch out into other areas lest you waste a significant amount of time developing a product that doesn’t suit your target platform.

You can see this kind of behaviour quite clearly in the mobile development space with a mere 2.6% of Android and iPhone developers having it both ways:

The answer (approximated in the graphic below) surprised us: of the nearly 55,000 mobile developers in our database over 1,000 (1,412, to be exact) had already publishedapps on both iOS and Android. This represents more than 3% of the published iOS developer population, and nearly 15% of the published Android developer group.

Despite the impressive total, we worried that it would be too easy for the fanboys on both sides of the aisle to dismiss these numbers as a crackpot minority. So we dug a little deeper, using our AppRank methodology to stack rank this cross-platform developer group based on the total volume and quality of coverage they’d received among the leading tech blogs worldwide.

Anecdotally the pattern I’ve seen is that most cross platform applications actually have their roots in a single platform. Take for instance the indy smash hit Braidwhich made its debut on the XBox LIVE platform. Whilst it was initially planned for a Windows release it took quite a while for it to make it to that platform. It has also made it onto the PS3 but not until long after it had proven success on 2 other platforms. My inkling is then that many of these cross platform developers started out as single platformers and as they had success in one they decided it was worth their time to attempt another one. Few, if any at all, would attempt to do more than one platform right from the get go.

So the question remains, is cross platform development actually worth it? For people like me probably not initially. The additional work to create a product for multiple platform not only increases the initial amount of work required it will also increase the on-going maintenance time for each of the individual versions. It seems like the best idea is to write and polish your application on your platform of choice and then, should you find success, begin the process of porting it over. This goes double if you’re looking to make some cash off a platform as the sunk costs of development and reskilling are one of the quickest ways to kill a potential revenue stream before it’s fully realized.

Twitter, Promoted Tweets and You.

Let me just come right out and say it: I like Twitter. Granted I only really got involved with it in the first place as it was a useful little bit of glue logic that let me cross post my blog onto Facebook with a minimum amount of set up. Whilst I was on honeymoon on Turtle Island it became the perfect one-way communication channel to the wider world, where I could send a 140 character summary of the day back to the real world and then be done with it. More recently I’ve been knee deep in Twitter’s API and have come to love it for the sheer simplicity it offers, ensuring that the first bit of code I deem “done” is always my Twitter integration. Still I’ve always had a skeptical eyebrow raised as to how these guys are going to capitalize on their endeavour, seeing as they are the 12th most visited site in the world.

For the most part they’ve been doing what most start ups do initially, venture capital funding rounds. Whilst there’s no exact figures around we do know they’ve got upwards of $70 million dollars in 3 separate funding rounds (with an additional $100 million rumoured to be in the works too). Couple that with the cash injections from Microsoft and Google to include tweets in their search results (to the tune of $25 million) the guys at Twitter really aren’t strapped for cash by any stretch of the imagination. However without some strategy to actually monetize the service they provide that money will only last so long before they have to close up shop. The usual strategy here is to try and find a large company to buy you out (ala Youtube, what you thought it was profitable?) which in the case of Twitter there would be no shortage of potential suitors.

However it seems that Twitter isn’t your traditional up-start start-up and have figured out a monetization strategy that seems rather familiar:

Earlier this evening, we broke the news that Twitter was about to launch its new ad platform. The news has just been confirmed: moments ago, the New York Times published a report detailing the new platform, which is officially being called “Promoted Tweets”. Update:  AdAge has published a report as well.

Here are the details outlined in the articles:

  • As we previously described, the new system serves up ads based on keywords in Twitter search queries.
  • Promoted Tweets will appear at the top of the search results page, with small text indicating they were sponsored. The Times piece notes that companies could use this to combat negative tweets (they can place a positive tweet at the top of the page)
  • A Promoted Tweet isn’t guaranteed to stay afloat for a long time — if the tweet isn’t tracking well in terms of replies, clicks, and a number of other metrics Twitter is calling “resonance”, it will be pulled, and the advertiser won’t pay for it.
  • One ad will be shown at a time
  • Initial ad partners include Best Buy, Virgin America, Starbucks, and Bravo
  • Advertisers will be paying on a CPM basis initially, with plans to adjust the model once Twitter can better gauge how people are engaging with Promoted Tweets

Anyone who’s tried to make some cash on the Internet can recognise what this basically amounts to, it’s Google’s monetization strategy all over. For the uninitiated there are two sides to Google’s (largest) revenue stream: AdWords and AdSense. The former is basically a market for advertisers to buy advertising space on certain keywords which could appear on Google’s search results or web pages running AdSense. Payment is done on a cost-per-click basis so in essence you only pay when someone clicks through. AdSense is the other side of the equation which is the system where publishers can reserve space on their web sites for advertising which Google then populates based on the keywords it finds on the website. If you go back and take a closer look at Twitter’s ad system you’ll notice how similar they look.

Honestly though I’m not suprised. Unlike small time players that can get away with slapping some advertising on their blog and calling it a day it doesn’t really scale up to the size of something like Twitter. Sure they’d make a fair amount out of it but it would be peanuts compared to them actually going out directly to advertisers and cutting deals directly. With their initial partner list showing some rather big names you can see that this has probably been bubbling away in the background for quite some time and shows a lot more promise than some of their other monetization ideas did.

The system itself apparently is already in full swing for a lucky few (see here for how they roll out new features, its quite cool) and seemed to coincide with a bit of a revamp of their landing page. The reaction hasn’t been all that positive but you’d expect that. It seems some of the twitterati (or tweeple, as I like to call them) assigned a kind of indy rock band persona to Twitter and when they finally decided to “sell out” it comes as a massive shock. However I believe it will be a very short lived outrage as even the closest competitor identi.ca has no where near the same amount of traction that Twitter does. Additionally should there be a mass exodus from Twitter you can guarantee the other services will look to monetize like Twitter as quickly as they can in order to cope with the increased traffic they’d receive. You can only run on venture capital for so long before the benefactors start looking to get their slice of your service’s pie.

Personally though it’s a bit of a non-event. It won’t change the way I use Twitter and since I’m not exactly a big shot on there I’m not going to be looking to capitalize on this new advertising medium. It’s good to see Twitter finally coming up with a solution to their monetization problem and I’m sure the VCs are rubbing their hands together with glee at the prospect at finally getting something back for the untold millions they’ve pumped into the Internet’s latest starlet. I’m very keen to see how this affects their bottom line, and time will tell if this will turn Twitter into another advertising giant like their big daddy Google.