Speaker 1: Welcome to Tech Stuff, a production from iHeartRadio. Hey thereon
Speaker 1: Welcome to Tech Stuff. I'm your host, Jonathan Strickland. I'm
Speaker 1: an executive producer with iHeart Podcasts and how the tech
Speaker 1: are you? You know, it's a tough time to work
Speaker 1: in the tech industry, unless, of course, you're an executive,
Speaker 1: in which case you probably can't hear how tough it
Speaker 1: is because of the sound of huge bags of money
Speaker 1: hitting your desk. It's drowning everything else out socept maybe
Speaker 1: the demands of your shareholders. But if you're not some
Speaker 1: suit who is laying waste to the ranks of your
Speaker 1: staff in an effort to secure payouts to the folks
Speaker 1: who hold stocks in your company plus a hefty compensation
Speaker 1: package for yourself, times are pretty scary. Now. That's true
Speaker 1: across multiple industries. But today I want to talk a
Speaker 1: bit about the video games sector in particular. Idea came
Speaker 1: to me when I heard about Microsoft, which is a
Speaker 1: three trillion dollar company, and how it was shutting down
Speaker 1: several notable video game studios, which included some that are
Speaker 1: known for a pretty wide spectrum of games. And some
Speaker 1: of those games, yes, were clunkers. They performed less well
Speaker 1: than expected in the market. Games like Redfall, which came
Speaker 1: from R. Kane Austin. That's a notable example of a
Speaker 1: game that was met with a fairly lukewarm reception. R
Speaker 1: Kane Austin would find itself as one of the studios
Speaker 1: that got shut down by Microsoft recently. And to be
Speaker 1: fair to R. Kane Austin, my understanding is that Redfall
Speaker 1: was a project that had a lot of shifting priorities
Speaker 1: that were placed upon the development team. So I'm not
Speaker 1: laying blame here. I think the Redfall was a pretty
Speaker 1: complicated story. I'm not sure that what came out of
Speaker 1: that project was the same thing as what people were
Speaker 1: hoping for when they first started it. Anyway, those cuts
Speaker 1: that Microsoft made, they also included studios that have produced
Speaker 1: games that got a lot of recent critical acclaim. Tango
Speaker 1: GameWorks is one of those studios. I mean it developed
Speaker 1: a game called Hi Fi Rush last year, which released
Speaker 1: to no real announcement, like it was a surprise release,
Speaker 1: and people really clicked with that game, sometimes literally because
Speaker 1: it's a rhythm based game. That was an unexpected pun
Speaker 1: from me. Now, these cuts are really rough, and the
Speaker 1: first thing I really want to say is that I
Speaker 1: hope all the people who have been affected by those
Speaker 1: cuts are able to land on their feet. Because it's
Speaker 1: a really tough world out there for game development, particularly
Speaker 1: among the big studios, which we've seen a lot of
Speaker 1: big companies make some drastic cutbacks. I hope those who
Speaker 1: perhaps have found themselves out of employment are able to
Speaker 1: land a really rewarding gig soon, both professionally rewarding and
Speaker 1: personally rewarding. But today I wanted to talk about what
Speaker 1: might be behind Microsoft's strategy, at least to an extent. Now,
Speaker 1: I want to preface this by saying I don't have
Speaker 1: any special insight. It's not like I was brought into
Speaker 1: the boardroom to talk about these things. The impressions I
Speaker 1: get are similar to those proposed by other outside observers,
Speaker 1: so I'm not also saying that I have a unique
Speaker 1: perspective on this. By far is not unique. If you
Speaker 1: do a search online, you will find countless articles and
Speaker 1: videos of people giving their take on what's going on
Speaker 1: in the industry. But by looking at Microsoft's recent moves,
Speaker 1: I think I can make some general guesses. So, for
Speaker 1: one thing, after many months of trying to close a
Speaker 1: truly massive deal, while regulators around the world were raising
Speaker 1: concerns about it. Microsoft finally acquired another enormous game studio
Speaker 1: called Activision Blizzard, and that was for sixty eight point
Speaker 1: seven billion with a B dollars. Now, it's not unusual
Speaker 1: to see layoffs in the wake of a large acquisition
Speaker 1: or merger because typically you do have overlap between the
Speaker 1: two entities, right, and you say, well, why do we
Speaker 1: want these these roles duplicated. That's bloat, that's unnecessary. So
Speaker 1: we do need to make some hard choices in order
Speaker 1: to run an efficient operation. That stinks for the people
Speaker 1: who are affected. But from a business perspective, you can
Speaker 1: understand that that there's no need to employ twice as
Speaker 1: many people that are needed to do a specific task. However,
Speaker 1: these studios that Microsoft just recently shut down were their
Speaker 1: own individual organizations. They were not part of some heterogeneous whole.
Speaker 1: It's not like Microsoft has one truly enormous room just
Speaker 1: filled with video game developers who are all working on stuff.
Speaker 1: These are largely separate and semi autonomous game studios. They
Speaker 1: just have Microsoft as sort of their parent company umbrella.
Speaker 1: So one possible reason for these shutdowns is that Microsoft
Speaker 1: just needed to make some cutbacks to decrease the impact
Speaker 1: of this incredibly large transaction they made to acquire Activision Blizzard,
Speaker 1: and so like they like, well, we bought it, we
Speaker 1: got what we said we wanted, but now we need
Speaker 1: to cut back so that it doesn't have as large
Speaker 1: an impact on our balance sheet at the end of
Speaker 1: the year. I'm guessing another reason is that Microsoft is
Speaker 1: pushing toward a game model that has become increasingly popular
Speaker 1: because of its ability to continue to generate revenue after
Speaker 1: a game is released, and that's the games as a
Speaker 1: service approach, and more specifically live service games, which you
Speaker 1: could argue is like a subcategory of games as a service. Now,
Speaker 1: the as a service model is one that's really taken
Speaker 1: hold of tech in general, not just the games industry,
Speaker 1: and that has both good and bad consequences as a result.
Speaker 1: I am not going to make a blanket statement and
Speaker 1: say that all games as a service or live service
Speaker 1: games are bad. I don't feel that way, but I
Speaker 1: will say that a lot of the elements of games
Speaker 1: as a service have had a disruptive and from at
Speaker 1: least some points of view, harmful impact on the industry.
Speaker 1: As a whole. Now as a service model has been
Speaker 1: used for lots of stuff. You have security as a service,
Speaker 1: computing as a service, storage as a service. The list
Speaker 1: goes on and on, and essentially all of these boil
Speaker 1: down to a provider company offering certain services over the
Speaker 1: Internet so that the customer doesn't have to run stuff
Speaker 1: on their own hardware, so instead the customer uses their
Speaker 1: hardware to access this online service over the Internet. That
Speaker 1: can be a huge help if you are launching a
Speaker 1: startup and it's an Internet based business, using some as
Speaker 1: a service stuff can really help you meet customer and
Speaker 1: partner expectations. But you don't have to take on the
Speaker 1: expense and effort of building everything from scratch on your
Speaker 1: own premises, so there is a benefit to this approach.
Speaker 1: With games, things can be a little bit different. Games
Speaker 1: as a service or live service games are ones that
Speaker 1: have a long tail revenue opportunity. The game itself might
Speaker 1: cost money upfront, or it could be a free to
Speaker 1: play title where gamers don't have to spend any money
Speaker 1: to access the game initially. A lot of mobile games
Speaker 1: fall into this category, where downloading the game is free,
Speaker 1: but players are given incentives to spend money on the
Speaker 1: game in return for some sort of in game benefit
Speaker 1: or cosmetic option. Often those games could also be supported
Speaker 1: by advertising. That's pretty typical in a lot of these
Speaker 1: games where ads will pop up. We've also heard recently
Speaker 1: that some Triple A studios have been talking about putting
Speaker 1: ads into games, and that again is not a new thing.
Speaker 1: It's happened in the past, often to disastrous results because
Speaker 1: generally speaking, gamers are not a big fan of that.
Speaker 1: But we're hearing Triple A studios talk about that again
Speaker 1: as a way to continually generate revenue off of a sale,
Speaker 1: So again it's another potential revenue changing strategy for games.
Speaker 1: For some games, players actually see a benefit in this
Speaker 1: arrangement in that the developer will occasionally release new content
Speaker 1: and expand the game itself in some way. So there's
Speaker 1: an incentive to be part of this long tail revenue
Speaker 1: generation system because the game continues to generate value and
Speaker 1: you're not just playing the same thing perpetual. The method
Speaker 1: of extending revenue generation does vary. It could be a
Speaker 1: subscription service. It might be pay for content where you've
Speaker 1: got pay walls that block certain types of content and
Speaker 1: you can't access it until you have paid. There are
Speaker 1: even games that kind of get the derisive label of
Speaker 1: pay to win. Generally speaking, that particular strategy, it's not
Speaker 1: looked upon favorably by most of the people in the
Speaker 1: gaming audience. Pay to win essentially just means that you
Speaker 1: get access to things in the game that give you
Speaker 1: an advantage over other players, and it's typically something that
Speaker 1: you would hear about in player versus player type games.
Speaker 1: You know you're going up against other humans and you
Speaker 1: have paid for advantages that can help offset any imbalance
Speaker 1: and skill you might have against other players. Generally speaking,
Speaker 1: people hate that, but there are a lot of different options.
Speaker 1: But the idea itself is not new at all. It's
Speaker 1: almost as old as video games themselves are. In fact,
Speaker 1: you could argue that the arcade machine model, which predates
Speaker 1: the home video game, that kind of falls in line
Speaker 1: with games as a service. Right, whether you're traditional arcade machine,
Speaker 1: you pay to play, and when your play session is
Speaker 1: over because you know, a ghost gobbled your pacmand three times,
Speaker 1: or you missed one too many centipedes or whatever, you
Speaker 1: got to cough up another quarter, or you got to
Speaker 1: move along. But while that model would work for companies
Speaker 1: that made arcade cabinets, or, to be more accurate, it
Speaker 1: actually worked for arcade owners who would typically purchase an
Speaker 1: arcade cabinet and then use that cabinet to generate revenue,
Speaker 1: with the obvious goal meaning being that you know, you
Speaker 1: make more in quarters than you paid for the machine,
Speaker 1: and it would just take a certain amount of time.
Speaker 1: While that same model would prove a little more elusive
Speaker 1: for the home market. Initially, the way the home video
Speaker 1: game market would work is that a video game development
Speaker 1: company would create a game and then either it would
Speaker 1: publish that game, or it would work with a third
Speaker 1: party publisher to do so, to actually manufacture the game
Speaker 1: and package it and market it and ship it to
Speaker 1: retailers and then hope that the game sells really well.
Speaker 1: I'm not going to dive further into that business model.
Speaker 1: There is more to it than that. It's a little
Speaker 1: more complicated, but that's the basic idea. But the important
Speaker 1: thing with that business model is that we're really just
Speaker 1: talking about individual transactions. Right. That happened one time someone
Speaker 1: a customer comes up and buys a copy of the game,
Speaker 1: and that sale is the one and only transaction between
Speaker 1: the gamer and the retailer and represents the one purchase
Speaker 1: that matters to the video game developer. Now, that gamer
Speaker 1: might later choose to give their copy of the game
Speaker 1: away to somebody, or to sell it, you know, used
Speaker 1: to someone else, or to trade it into a retailer
Speaker 1: for credit, and the credit would just be a you know,
Speaker 1: a percentage of what the original value of the game
Speaker 1: used to be, and then the retailer would go around
Speaker 1: and sell it for more than that because that's how
Speaker 1: you make money as a retailer, But the video game
Speaker 1: developer and publisher wouldn't see any of that money in
Speaker 1: those transactions, right. The aftermarket leaves those companies out, so
Speaker 1: they only get a slice when it's a sale of
Speaker 1: a new copy of their game to someone. And eliminating
Speaker 1: the aftermarket was really something that was pretty enticing to
Speaker 1: video game companies from the get go. Like it's largely
Speaker 1: been done now because digital distribution is largely the way
Speaker 1: that games are distributed these days. There aren't that many
Speaker 1: versions of games where you're going out and buying a
Speaker 1: physical copy anymore. Heck, a lot of computer systems don't
Speaker 1: even have optical drives, so there's like no physical medium
Speaker 1: you would purchase in order to play on your PC.
Speaker 1: There are exceptions, obviously, there are games where you can
Speaker 1: still buy on cartridge based systems and such, but largely
Speaker 1: we're talking about digital downloads these days. That has really
Speaker 1: cut into the aftermarket, but that's fairly recent. Way back
Speaker 1: in the early eighties, there were already efforts to figure
Speaker 1: out ways to kind of eliminate the aftermarket, because it
Speaker 1: sure would be better for these companies if they could
Speaker 1: convince folks to only buy new copies of the game
Speaker 1: instead of going and purchasing a used copy at like
Speaker 1: a flea market or a retailer or something. And it
Speaker 1: would take some time to essentially achieve that goal, but
Speaker 1: there were some early attempts. One of those had its
Speaker 1: birth way back in the late nineteen seventies, although it
Speaker 1: would not debut until the nineteen eighties, and it would
Speaker 1: involve a home video game console called the in television.
Speaker 1: I'll talk more about that, but first let's take a
Speaker 1: quick break to thank our sponsors. Before the break, I
Speaker 1: mentioned the Intellivision, a home game console. I actually had
Speaker 1: an intelevision, although the one I had I inherited from
Speaker 1: a cousin who had just sort of, you know, was
Speaker 1: going off to college and had given it up. So
Speaker 1: my Intellivision was not a brand new one. It was
Speaker 1: already an obsolete console at that point. But I did
Speaker 1: have probably a couple dozen games, as I recall, although
Speaker 1: the intelevision controller was like almost like a remote control,
Speaker 1: and you would have overlays you could slip into it
Speaker 1: that matched the games that you played. I remember distinctly
Speaker 1: that I had overlays for cartridges I did not own,
Speaker 1: and vice versa. I had cartridges where there was no overlay,
Speaker 1: and I would have to use trial and error to
Speaker 1: figure out what the the different buttons did in that
Speaker 1: particular game. Anyway, the Intellvision was a cartridge based game system,
Speaker 1: so you would typically go to your local toy store
Speaker 1: or electronics store whatever you and you go and purchase
Speaker 1: a new game. Now, back then cartridges cost about thirty dollars,
Speaker 1: but that's in nineteen eighty dollars, so if we adjust
Speaker 1: for inflation, that's around one hundred and fifteen bucks today.
Speaker 1: So just in case you thought video games are too
Speaker 1: expensive these days, you know, some Triple A titles start
Speaker 1: off at seventy dollars a pop. And then go up
Speaker 1: from there if you want a special edition. Just know
Speaker 1: that video games have always been expensive, it's just that
Speaker 1: a dollar doesn't go as far as it used to anyway.
Speaker 1: The folks that in television came up with a pretty
Speaker 1: clever idea. Why not create an add on in which
Speaker 1: players could subscribe to an ongoing service provided by a
Speaker 1: local cable TV company so the players could end up
Speaker 1: accessing encoded games in television would encode the games using
Speaker 1: the FM band frequencies and send those frequencies over cable
Speaker 1: lines because the frequencies wouldn't interfere with all the other
Speaker 1: stuff that was traveling over cable. The players would be
Speaker 1: able to connect their intelevision systems up to their cable
Speaker 1: service using a special adapter. The plug right into the
Speaker 1: cartridge slot of the Intellvision, so it was like it
Speaker 1: was an oversized game cartridge with wire that could attach
Speaker 1: to your cable and to access a game using the service,
Speaker 1: the player would turn their television to a particular channel.
Speaker 1: This would only be available in around a dozen cities
Speaker 1: in the United States, but they could choose from different
Speaker 1: video game titles that would switch out each month, So
Speaker 1: typically there was somewhere between fifteen and twenty games on
Speaker 1: this I saw different versions of that depending on the source,
Speaker 1: and I didn't have access to this when I had
Speaker 1: in television, so I don't really have direct experience with it.
Speaker 1: The idea was that you could choose a game available
Speaker 1: on this service and it would tell the terminal to
Speaker 1: accept the game code the next time the cable channel
Speaker 1: transmitted that specific game, so the channel was constantly transmitting code,
Speaker 1: your terminal just didn't pick it up because the terminal
Speaker 1: was only waiting for a specific signal based upon whichever
Speaker 1: game you wanted to play. And once that transmission started,
Speaker 1: the terminal would say all right and would download that
Speaker 1: code into memory on the adapter, and that's where it
Speaker 1: would live. And it was just in memory, volatile memory,
Speaker 1: so once it shut off or once you wanted to
Speaker 1: play a different game, that information would get whited. So
Speaker 1: you wouldn't have access to this title forever, just for
Speaker 1: however long your play session was going. Really so instead
Speaker 1: of going out and buying a copy of the game
Speaker 1: and in television, owner could subscribe to the service and
Speaker 1: pay a monthly fee and then play games that way
Speaker 1: and again. Because the games were just stored in memory,
Speaker 1: they weren't permanently part of the player's library. In television
Speaker 1: called this technology the play cable. Now, this was really
Speaker 1: forward thinking, but you could argue it was two forward
Speaker 1: thinking and it was ahead of its time. Now. According
Speaker 1: to Stuart Schlay of CED magazine, way back in two
Speaker 1: thousand and five, in television was only able to secure
Speaker 1: about three percent of all households that could access this service.
Speaker 1: So while the Intellivision had a decent install base for
Speaker 1: the time, like more than two million units were sold
Speaker 1: by nineteen eighty two, for example, only around six hundred
Speaker 1: and fifty thousand of those even would have access to
Speaker 1: the play cable service. And then of those six hundred
Speaker 1: and fifty thousand, not that many people took the plunge
Speaker 1: to pay four dollars ninety five cents per month to
Speaker 1: actually use it. Now, there were some problems with the
Speaker 1: business model from the get go, because gamers weren't the
Speaker 1: only folks who had to cough up a decent amount
Speaker 1: of money to be part of play cable. Right, you
Speaker 1: had to buy the adapter, and then you had to
Speaker 1: pay a subscription to the service. But the cable television
Speaker 1: providers also had to pay in order to be able
Speaker 1: to use this service. They would have to purchase a
Speaker 1: really expensive computer to run the transmission side of this
Speaker 1: service because it wasn't provided by Intellvision, So the cable
Speaker 1: companies would have to pay like twelve grand for these
Speaker 1: really expensive and particular computer systems. By nineteen eighty four,
Speaker 1: in television had decided to unplug the play cable because
Speaker 1: it just hadn't caught on plus in nineteen eighty four.
Speaker 1: That's obviously after the video game crash of nineteen eighty three,
Speaker 1: the home video game market in the United States was
Speaker 1: in ruins. In other parts of the world it was
Speaker 1: a different story, but the entire market crashed for the
Speaker 1: US in nineteen eighty three. It's what would create the
Speaker 1: opportunity for Nintendo to kind of resurrect that market. But
Speaker 1: for all a good year, it was desolation in the
Speaker 1: home video game space. Computers were kind of taking up
Speaker 1: some of the gaps. Yeah, it was grim. In television,
Speaker 1: games had been getting more complex, and that was also
Speaker 1: part of the problem because the play cable system could
Speaker 1: only support transfers of up to six kilobytes. So as
Speaker 1: games were getting more sophisticated, the play cable couldn't keep up.
Speaker 1: It physically was limited to six kilobytes of data for
Speaker 1: these transfers, so if a game required more than that,
Speaker 1: it would not be eligible for play cable. It just
Speaker 1: wouldn't work. So, no matter what, the play cable had
Speaker 1: probably a pretty limited lifespan. Even if the video game
Speaker 1: market had not crashed in nineteen eighty three, it's unlikely
Speaker 1: that in television would have kept it going that it
Speaker 1: would have remained relevant, So it went could put unless
Speaker 1: you think in television was the only example of an
Speaker 1: early go at the games as a service model. Allow
Speaker 1: me to tell you about the Atari game lie Line
Speaker 1: from a company called Control Video Corporation. So this wasn't
Speaker 1: from Atari itself, but from this CVC company, which interestingly
Speaker 1: was founded by a guy named Bill von Meister, so
Speaker 1: Bill the Mister. He he also co founded one of
Speaker 1: the earliest online services called the Source, so really really
Speaker 1: forward thinking dude. Similar to the play cable, GameLine was
Speaker 1: a product and a service that would let Atari twenty
Speaker 1: six hundred owners connect their console, by this time using
Speaker 1: their phone line with an adapter that would plug into
Speaker 1: the cartridge slot of your Attari twenty six hundred and
Speaker 1: so it was similar to the play cable, but play
Speaker 1: cable obviously connected to cable. Game Line connected to a
Speaker 1: phone line, and so gamelines transmissions were over the telephone
Speaker 1: system instead of cable TV frequencies. Now. According to Dan
Speaker 1: Skelton in the Atari Compendium, this adapter cost forty nine
Speaker 1: dollars and ninety five cents, and that included a year
Speaker 1: of service. I'm not sure how much service was after that,
Speaker 1: but that's not the only fee we'd be talking about,
Speaker 1: because the way game line worked is that you would
Speaker 1: get one of these adapters, you'd plug it into your
Speaker 1: computer and hook it up to your phone system, and
Speaker 1: when you turned it on for the first time, game
Speaker 1: Line would automatically dial in to a particular phone line
Speaker 1: and a computer system, and you would be prompted to
Speaker 1: register your GameLine system and to create a personal identification
Speaker 1: number or PIN, and then you would get to enter
Speaker 1: whichever game you wanted by putting in a three digit
Speaker 1: code that correlated to that specific game, and then that
Speaker 1: game would be sent to temporarily live on the memory
Speaker 1: of the adapter you were using. The adapter you had,
Speaker 1: by the way, also required a nine volt battery to
Speaker 1: remain powered because again it's volatile memory, so if it
Speaker 1: loses power, then the information and is wiped from the system.
Speaker 1: So you wanted to create a pen for every person
Speaker 1: in your household because, as it would turn out, the
Speaker 1: service would grant a user unlimited plays on their birthday.
Speaker 1: So if you made a pen for everyone and the
Speaker 1: dog in your family, you could use that specific pen
Speaker 1: to log into the service on the respective person or
Speaker 1: animal's birthday for unlimited plays. You know, hack the system,
Speaker 1: is what I'm saying. Like the play Cable game lines
Speaker 1: lineup would change month to month, and it would include
Speaker 1: new games as well as, you know, really the most
Speaker 1: popular titles that were on the service. They also put
Speaker 1: out a magazine that informed customers about which titles would
Speaker 1: become available in the upcoming month. Games could be played
Speaker 1: only a limited number of times before they would get
Speaker 1: wiped from memory. At that point, you could choose to
Speaker 1: download the code again or access the code again, but
Speaker 1: it would be for another charge, another fee, and we're
Speaker 1: typically talking about one dollar per title. So for a
Speaker 1: dollar you could play titles on the service for up
Speaker 1: to eight times or so before they would just disappear
Speaker 1: from your cartridge. The instruction manual for the device argued
Speaker 1: that the limit was only on game plays, not the
Speaker 1: time spent while playing, which means if you're really good,
Speaker 1: then you could play all night. Because it doesn't matter
Speaker 1: that it's only for eight plays. You're a master gamer.
Speaker 1: You're going to breeze through this game and have a
Speaker 1: great time, and you're not going to die every three seconds.
Speaker 1: If you were to take a break during your game session,
Speaker 1: the manual stress that you should only turn off your television,
Speaker 1: but not the Atari console, nor should you remove the
Speaker 1: cartridge from the game system or else the play session
Speaker 1: would terminate early before all the plays had been exhausted. Now,
Speaker 1: I'm sure, when compared to arcade machines, which were typically,
Speaker 1: you know, twenty five cents per play, this could seem
Speaker 1: like a bargain. You would get twice as many plays
Speaker 1: as your typical arcade machine for the same amount of money,
Speaker 1: eight plays for a versus four. But then I would
Speaker 1: say for it to be a real bargain, I would
Speaker 1: argue Atari games would have to be at least half
Speaker 1: as good as the kind of games you could find
Speaker 1: in the arcade and as a former Atari twenty six
Speaker 1: hundred owner, I can assure you the Atari games, even
Speaker 1: the really good ones, were not as good as what
Speaker 1: you could find in an arcade. They just weren't, not
Speaker 1: graphically and most of the time not gameplay wise, even
Speaker 1: though there were some true bangers on the Atari twenty
Speaker 1: six hundred. To this day, I think River Raid and
Speaker 1: Pitfall are some of my favorite games for my childhood,
Speaker 1: but I don't think they were better than what you
Speaker 1: could find in the arcade. Now, this company, CBC, had
Speaker 1: some hurdles that were pretty hard to overcome, and one
Speaker 1: of the biggest is that the larger game companies that
Speaker 1: were making titles for the Atari refused to license their
Speaker 1: games to CVC so they could carry those games on
Speaker 1: their service, and this left out a lot of really
Speaker 1: important companies like Atari itself would not sign on. Neither
Speaker 1: did Activision or Mattel or Parker Brothers, and there were
Speaker 1: some others that held out too, and that kept the
Speaker 1: library of games that were available on the game line
Speaker 1: system pretty limited to games that had less appeal. You know,
Speaker 1: these weren't necessarily bad games, although I'm sure there were
Speaker 1: some of those too, but they were not the games
Speaker 1: that had the best marketing and the largest demand among
Speaker 1: Atari twenty six hundred owners, so that was a big
Speaker 1: challenge for game Line. Now, it's possible that these bigger
Speaker 1: companies were working on their own competing service ideas and
Speaker 1: that's why they held out. They didn't want to contribute
Speaker 1: to a company that would then become a competitor. This
Speaker 1: is kind of like the Netflix story. Right when Netflix
Speaker 1: started to stream movies, it started to run into issues
Speaker 1: getting licensing agreements with different studios because the studios would
Speaker 1: prefer to hold out and have their own operated service
Speaker 1: rather than allow their stuff to be carried by a
Speaker 1: potential competitor. But the whole thing would become moot anyway,
Speaker 1: because again, the nineteen eighty three video game crash happened,
Speaker 1: and a lot of the smaller third party companies that
Speaker 1: were creating the titles the game Line was relying upon
Speaker 1: they went belly up. That disaster trickled down to GameLine
Speaker 1: and CVC itself, so the service did not last much longer.
Speaker 1: In fact, you could see why it wouldn't because you
Speaker 1: suddenly had this glut of Atari twenty six hundred cartridges
Speaker 1: on the market and they were at insane markedown prices,
Speaker 1: so you could go out and scoop up a dozen
Speaker 1: or more cartridges for like twenty bucks, and then you
Speaker 1: would have the cartridges, you could play the game as
Speaker 1: many times as you wanted all day, and you wouldn't
Speaker 1: have to worry about spending a dollar on just eight
Speaker 1: plays or whatever. So game Line's business model was entirely
Speaker 1: undercut by this industry crash. Now, that was not the
Speaker 1: fault of CBC, and as time would show, the idea
Speaker 1: of creating a service rather than focusing on just a
Speaker 1: game would continue to be a goal for the industry. Okay,
Speaker 1: we've got so much more to cover. We're going to
Speaker 1: be back after a quick break to thank our sponsors. Okay.
Speaker 1: So that was the sad tale of the play cable
Speaker 1: from in Television and game Line from Atari. But there's
Speaker 1: still more early attempts we could talk about. Nintendo itself
Speaker 1: had such a service. It was called the Stela View
Speaker 1: or Sateleeview, I guess because it's after satellite. But this
Speaker 1: service was only in Japan and it was during the
Speaker 1: Super Nintendo Entertainment System era. Subscribers to the Stelaview service
Speaker 1: would get access to more than one hundred games using
Speaker 1: an SNS Super Nintendo Entertainment System and add on an
Speaker 1: adapter that could access these games via satellite as the
Speaker 1: name suggests, and they could also access other stuff too.
Speaker 1: It wasn't just games. You could actually use your SNS
Speaker 1: to do stuff like read magazine articles and other media,
Speaker 1: which is kind of cool, Like it really predates the
Speaker 1: era of consoles, video game consoles becoming media centers, right.
Speaker 1: Microsoft really stressed that when the Xbox three sixty came out,
Speaker 1: really the Xbox One, I should say the Xbox One
Speaker 1: was where the media center stuff really became front and center,
Speaker 1: to the point where Microsoft kind of alienated the gaming
Speaker 1: crowd as a result of that. Anyway, the teleview service
Speaker 1: only lasted a few years before Nintendo withdrew support for
Speaker 1: it due to some corporate shenanigans between it and a
Speaker 1: company called st Giga or I don't know if it's
Speaker 1: Saint Giga, but it is big S, little t period,
Speaker 1: all caps Giga. Anyway, this company operated the actual satellite
Speaker 1: service and Nintendo in this company got into some corporate
Speaker 1: disagreements and ultimately Nintendo decided that it was done, and
Speaker 1: once it left, Giga continued to operate the service for
Speaker 1: a little while, but without Nintendo's support it was unsustainable.
Speaker 1: So apparently, even before this corporate relationship soured between the
Speaker 1: two companies, the service had a pretty limited rollout. I
Speaker 1: mean again, it was just in Japan, it wasn't outside
Speaker 1: of that market, and it was an expensive subscription, so
Speaker 1: you know, not that many gamers were necessarily in a
Speaker 1: position where they could even subscribe in the first place.
Speaker 1: And it also came to a time when the next
Speaker 1: generation of consoles was coming out, So why would you
Speaker 1: spend more money to play games on the previous generation's
Speaker 1: consoles when a new one is right on the horizon. Meanwhile,
Speaker 1: competitor Sega created a service that harkened back to the
Speaker 1: play cable system from in television. They introduced the Sega Channel.
Speaker 1: So like the play Cable service, the Sega Channel relied
Speaker 1: upon the cooperation of cable television carriers and Sega Genesis
Speaker 1: owners could use an adapter to connect to this service
Speaker 1: through their cable provider, so each month, players would be
Speaker 1: able to try out somewhere between fifty and seventy titles
Speaker 1: a month as options. Various sources disagree on exactly how
Speaker 1: many titles were available, so I can't give you a
Speaker 1: firm number. I saw one that said, definitively it was
Speaker 1: seventy and another that said, definitively it was fifty. Whether
Speaker 1: these are both true and at different times it was
Speaker 1: different numbers, I don't know, because I never had a
Speaker 1: Sega Genesis, but these games changed out month to month. However,
Speaker 1: the timing on this launch was terrible because the Sega
Speaker 1: Saturn debuted essentially the year after Sega Channel went live,
Speaker 1: and since the Sega Channel was for the Sega Genesis,
Speaker 1: the previous generations console, that was not ideal. Plus, the
Speaker 1: subscription fee was something like fifteen dollars a month, and
Speaker 1: there was a twenty five dollars activation fee at the
Speaker 1: very beginning anyway, so not that many gamers were eager
Speaker 1: to spend a recurring fifteen dollars a month to play
Speaker 1: games on the previous generation hardware. So just a few
Speaker 1: years after its debut, the Sega Channel fizzled out. The
Speaker 1: strategy for the services I mentioned so far mostly revolved
Speaker 1: around granting players access to games that otherwise they could
Speaker 1: just go outside and buy right like. These were games
Speaker 1: that also existed in cartridge or disc form so you
Speaker 1: could go to your store and buy a copy. So
Speaker 1: really these were for people who wanted to try out
Speaker 1: games but didn't necessarily have the money to commit to
Speaker 1: making a full on purchase. It was really a lot
Speaker 1: like the video rental model, you know, where you would
Speaker 1: go to a place like like Blockbuster and rent a
Speaker 1: movie as opposed to going out and buying a copy
Speaker 1: of it, because you know, you didn't have to go
Speaker 1: and get a physical copy of that and purchase it.
Speaker 1: You didn't even need a physical copy at all. You
Speaker 1: would just download the stuff onto the memory of the
Speaker 1: adapter or whatever. But then we would see developers move
Speaker 1: to create games specifically to tap into a recurring subscription
Speaker 1: revenue stream and bypass the whole physical copy or having
Speaker 1: it being available in some other format entirely. They said, well,
Speaker 1: this model is going to work, but only if we're
Speaker 1: not making it an alternative to just going out and
Speaker 1: buying the game. So we're going to change tracks a
Speaker 1: little bit, because subscription service and live service these are
Speaker 1: two terms that are related, but they're not necessarily synonymous.
Speaker 1: I want to first mention a game called Air Warrior,
Speaker 1: which I had never heard about until I had researched
Speaker 1: this topic. Air Warrior was a flight combat simulator game
Speaker 1: released by a company called Kesmi in nineteen eighty seven.
Speaker 1: You could argue this was an early MMOG with actual graphics.
Speaker 1: So MMO stands for massively multiplayer online and g stands
Speaker 1: for game. And there's a lot of different MMOs. Right,
Speaker 1: There's MMO RP, which I would argue are probably the
Speaker 1: most famous massively multiplayer online role playing games, but there
Speaker 1: are a lot of games that are massively multiplayer online games.
Speaker 1: The case with Air Warrior was, you know, it was
Speaker 1: a game with very primitive graphics. It actually had graphics.
Speaker 1: It was an early MMO that had graphics that was
Speaker 1: pretty incredible. And this is in the late nineteen eighties
Speaker 1: where not many people even had dial up modems at
Speaker 1: that point, and those who did often had dial up
Speaker 1: modems that had a pretty low bad rate, which meant
Speaker 1: you couldn't make a really, you know, deeply sophisticated game.
Speaker 1: It just wouldn't be a good experience because the transmission
Speaker 1: speeds would be far too low. So this was like
Speaker 1: a monochromatic wire frame air combat simulator. The eighties saw
Speaker 1: some really early MMOs besides Air Warrior. Ones that came
Speaker 1: out before Air Warrior, but those were text based, so
Speaker 1: they were often dungeon crawlers called MUDs, which stands for
Speaker 1: multi User dungeon. These are descendants of early text based
Speaker 1: computer games, stuff like the Old Old Old Zork series
Speaker 1: or Hitchiker's Guide to the Galaxy or Leather Goddess of Phobos.
Speaker 1: Those are the ones I think of when I think
Speaker 1: of the text based adventure games. Air Warrior was different.
Speaker 1: It was a game with real but primitive graphics, and
Speaker 1: to play Air Warrior, gamers had to subscribe to a
Speaker 1: service and they paid a fee of around eleven dollars
Speaker 1: an hour to play this game online. So there was
Speaker 1: a dedicated but small fan base for this game, not
Speaker 1: really surprising considering the limitations of the game and the
Speaker 1: expense that went along with it. The first computer role
Speaker 1: playing game to really tap into this model was arguably
Speaker 1: Never Winter Nights. This debuted as part of America Online's offerings.
Speaker 1: So AOL's business model was essentially to charge users by
Speaker 1: the hour for accessing online services. So it benefited the
Speaker 1: company to create features on their service that were compelling
Speaker 1: and you know, sticky for lack of a better word,
Speaker 1: It's really not that different from how social platforms like
Speaker 1: TikTok and Facebook use algorithmic strategies to keep people on
Speaker 1: those apps for as long as possible to drive engagement.
Speaker 1: It's the same idea, what can we offer that is
Speaker 1: compelling to our customers so that they keep using our
Speaker 1: services and drive up the amount of money they owe
Speaker 1: us in that per hour charging. So Never Winter Nights
Speaker 1: was part of this strategy. It was based off the
Speaker 1: Forbidden Realms mythology of the Dungeons and Dragons game. It
Speaker 1: also followed in the footsteps of some computer role playing
Speaker 1: games or CRPGs, not Internet based ones, but just computer
Speaker 1: based ones, like Pool of Radiance. By the way, that
Speaker 1: was one of my favorite games as a kid. Pool
Speaker 1: of Radiance I thought was a truly brilliant adaptation of
Speaker 1: Dungeons and Dragons rules andthologies, and I loved playing it.
Speaker 1: AOL initially introduced two different tiers of pricing for game
Speaker 1: sessions on Never Winter Nights. If it was during an
Speaker 1: off peak hour, you would be expected to pay five
Speaker 1: dollars an hour. For play sessions during peak service, that
Speaker 1: would double to ten dollars an hour in order to
Speaker 1: be able to play this game. Later on, AOL would
Speaker 1: switch the game to be a free to play option
Speaker 1: in the overall subscription service of AOL, so you didn't
Speaker 1: have to pay extra just to play this game. It
Speaker 1: was part of the overall offering, and that moved to
Speaker 1: free to play is also something we would see a
Speaker 1: lot more of in the next decade and a half
Speaker 1: or two decades or actually three. I am in denial
Speaker 1: about how long ago the nineteen nineties were because to
Speaker 1: think about it is really disheartening when I realized how
Speaker 1: much of my life was in the nineties a decade.
Speaker 1: As it would turn out anyway, Never Winter Nights would
Speaker 1: would sun at by the late nineties. It didn't stick
Speaker 1: around forever. Obviously, AOL itself transformed quite a bit throughout
Speaker 1: the nineties, so it is no longer an active thing.
Speaker 1: There would be other games with the name Never Winter Nights,
Speaker 1: but they are not directly connected to this early MMO RPG. Also,
Speaker 1: it wasn't initially that massive, you know, the two MS
Speaker 1: Stanford massively multiplayer, and at least initially Never Winter Nights.
Speaker 1: While multiplayer was not massive, I think the servers were
Speaker 1: limited to around fifty players at a time. Later on,
Speaker 1: I think it expanded, but it didn't start out as
Speaker 1: being truly massive, despite getting the name MMO RPG. But yeah, never.
Speaker 1: Winter Nights was an early example, and other MMORPGs would follow.
Speaker 1: There was Meridian fifty nine that was the first MMOORPG
Speaker 1: with graphics rendered as three dimensional objects instead of just
Speaker 1: two D icons or sprites. Meridian fifty was a game
Speaker 1: that had a flat rate subscription fee, so you didn't
Speaker 1: pay by the hour, you paid by the month, and
Speaker 1: the servers from Ridy and fifty nine were also limited.
Speaker 1: They could support fifty players per server, so you could
Speaker 1: argue the first M didn't really apply for that one either. Also,
Speaker 1: if the server you wanted to play on was really popular,
Speaker 1: you would find yourself unable to connect, which could be
Speaker 1: really frustrating. You'd have to just keep trying and hope
Speaker 1: that someone had either quit their play session or lost
Speaker 1: a connection, and you just take it. But yeah, it
Speaker 1: was a somewhat of a limited experience and it would
Speaker 1: only last for a few years before Sunsetting as well.
Speaker 1: Lots more MMORPGs would follow. Ultima Online was a big one.
Speaker 1: I actually remember when Ultima Online launched because I was
Speaker 1: at a convention and Richard Garriott, the guy who created
Speaker 1: the Ultimate series, was there and was introducing people to
Speaker 1: an early build of Ultima Online. So they had an
Speaker 1: instance running where we got a chance to kind of
Speaker 1: just see where the game was in development. It was
Speaker 1: an incredible experience because usually you don't get that kind
Speaker 1: of insight. That's a really rare thing unless you happen
Speaker 1: to be, you know, someone who's already in the industry.
Speaker 1: Otherwise you just don't get that kind of access. EverQuest
Speaker 1: was a really big, popular early MMO RPG that depended
Speaker 1: upon the subscription service. EverQuest two would continue that, but
Speaker 1: the powerhouse of the entire industry was World of Warcraft
Speaker 1: and still is World of Warcraft that's still going on today. Obviously,
Speaker 1: games of this nature didn't stop with World of Warcraft.
Speaker 1: It's not like that came out and then you'd never
Speaker 1: heard about any other MMO RPG. There are others out there.
Speaker 1: You know, there's Fallout seventy six, which is just you know,
Speaker 1: a few years old at this point, Elder Scrolls Online,
Speaker 1: Final Fantasy fourteen, a Realm Reborn, and tons of others exist.
Speaker 1: So those games go on and on, with the idea
Speaker 1: being that players will occasionally get new content that keeps
Speaker 1: them invested in the gameplay, and in return, they will
Speaker 1: continue to subscribe to the service, or, in the case
Speaker 1: of free to play games, they will be tempted to
Speaker 1: spend real world money on things that will enhance their
Speaker 1: online experience in some way, and that prospect would find
Speaker 1: its way into other kinds of games outside of RPGs.
Speaker 1: It would also be boosted by a trend toward requiring
Speaker 1: players to have a persistent Internet connection in order to
Speaker 1: play the game at all, even a game that did
Speaker 1: not have some sort of online component to it, and
Speaker 1: that would complicate things. We'll pick up there in our
Speaker 1: next episode to continue to talk about games as a
Speaker 1: service and live service games and why this move is
Speaker 1: changing the industry. A lot of people feel that it's
Speaker 1: changing the industry for the worst, that it's not it's
Speaker 1: not a good thing. And certainly there are practices within
Speaker 1: live service games that are predatory and exploitative and just
Speaker 1: not good for the consumer, and they tend to feel
Speaker 1: very cynical and crass and short sighted. But there are
Speaker 1: also ways of doing live service games that even if Ultimately,
Speaker 1: you're talking about ways to continue to generate revenue from
Speaker 1: your game. Don't feel predatory. So we're going to talk
Speaker 1: more about this in our next episode. We've got plenty
Speaker 1: of other examples to talk about, and developments and evolution
Speaker 1: of the business model to take into consideration to kind
Speaker 1: of see how we got to where we are now
Speaker 1: and why some people in the industry say stay alive
Speaker 1: till twenty five, meaning twenty twenty five, because twenty twenty
Speaker 1: four so far has been a really tough and scary
Speaker 1: year for people in the games industry. Okay, we're going
Speaker 1: to wrap up here for now. We'll be back on
Speaker 1: Wednesday to talk more about this. And I hope all
Speaker 1: of you out there are well. I hope none of
Speaker 1: you are struggling with any concerns about your living because
Speaker 1: I've been there and it sucks, and I hope that's
Speaker 1: not the case for you. I hope you're flourishing and
Speaker 1: doing way better than I am, because I want to
Speaker 1: see y'all succeed and to just have a wonderful life.
Speaker 1: That's my desire. Because I'm a SAP. That's it for me.
Speaker 1: I'll talk to you again really soon. Tech Stuff is
Speaker 1: an iHeartRadio production. For more podcasts from iHeartRadio, visit the
Speaker 1: iHeartRadio app, Apple Podcasts, or wherever you listen to your
Speaker 1: favorite shows.