Monday, January 19, 2009

The Golden Age of Iteration

In the golden age of the video arcade, during he late seventies and early eighties, games like Pac Man, Asteroids, Centipede and Defender were gold mines. A single $3000 arcade machine could collect more than $1000 a weekend in quarters. This new gold rush attracted quite a few prospectors. Many of these “wanna-be” arcade game creators lost their shirt in the rush to release games. A manufacturing run of 1000 arcade machines requires a considerable investment; a poor game burned into these machines would return little on that investment.

Faced with millions of dollars of potential investment, arcade game developers sought to insure that the best possible game software was developed. Games themselves cost less than a single arcade box, so it was highly cost effective to throw bad games out and try again and again before committing to manufacturing hardware. As a result, game software development was highly iterative. Executives would fund a game idea for a month of development. At the end of the month they would play the game and decide whether to fund another month or move to field testing.

Companies like Atari would field test a game idea by placing a mocked up production machine in an arcade along-side other games. Several days later they would count the quarters that the machine collected and — based on the money collected — decide whether to mass produce the game, tweak it or cancel it outright. Some early prototypes were so successful that their coin collection boxes overflowed and led to a failure of the hardware!

This iterative approach help fuel the release of consistently high quality games from companies like Atari. The decline of Atari and the market in general in the mid eighties was caused by the larger proportion of inferior games released due to dropping hardware costs (through the introduction of cartridge based consoles). The financial “kill gate” of distribution cost disappeared and so did much of the disciplined iteration that insured better games.


Noel said...

If that was the Golden Age of Iteration, then I'd say we're entering the Renaissance of Iteration. The situation you described is exactly what's happenning now with iPhone games (and hopefully other lower-cost platforms with downloadable console and PC games).

The main difference is that bad games aren't thrown out, but they're thrown to the App Store just in case they stick. That approach won't work for companies that are trying to develop a name for quality though. Fun times!

Clinton Keith said...

Do you think that the lack of a quality filter is going to hurt? Does it make it more difficult to a good new app to stand out from all the chaff?

Anonymous said...

I would agree with the above comments and put it a little more formally: before the filters on games were mostly internalized to the company, now they're externalized to the consumer. So instead of an early 80's arcade with 10 or 20 quality games, you have thousands of games but most are derivative or crap.

However, the flip side of this is that with the present-day distribution methods, a game scales up to popularity much better, with the only limitation being accessibility - browser-playable is best, then online portals(Steam, iPhone, XBLA, Gametap), and lastly a tie between standalone downloadable and retail. (The effort required to play a retail console game is less than the effort to play a AAA PC game, but a downloadable game is typically a faster install than a boxed one.)

Playing to this market means something a little different from the arcade, as well - instead of a focus on quarter-munching, making it "viral" or otherwise memorable so that it cuts through the noise can be the make-or-break factor.

Ron said...

Clint, great blog entry, fantastic startig place for a discussion.

The lack of a quality filter is going to hurt, just not the way you think.

In the 80s, only major manufacturers could produce games. As Clint points out, with cheaper manufacturing costs, barriers to entry were lowered, and they were lowered further when consoles arrived. Now studios could concentrate on the software without having to worry about the hardware to run the games.

These days, a 'studio' can be some person that downloaded a SDK for the iPhone, Android or whatever may be their OS of choice.

Look at the guy who wrote iShoot, 16000 downloads in one day ( A one man studio.

As Noel said, everybody can just toss their game into the iStore or Market and see what sticks. Most will fail, but the hot games will survive-- the internet grapevine will see to that.

So, this virtually non-existant barrier to entry hurts the big game companies the most. Even the most cost-efficient studio cannot produce a game as cheaply as some guy writing mobile apps in his spare time after he's done with his day job.

Granted, a game like iShoot isn't the same as playing Medal of Honor, but these smaller games nibble at the edges, much like cable companies ate away at the Big 3 TV networks.

Clinton Keith said...

Great points!

>So, this virtually non-existant >barrier to entry hurts the big
>game companies the most. Even
>the most cost-efficient studio >cannot produce a game as
>cheaply as some guy writing
>mobile apps in his spare time >after he's done with his day

Agreed. However, the big companies might still have a few advantages:

- They can spend more $$ on marketing. Will we see national ads for iPhone apps/games?

- Although they can't compete on small apps, the iPhone can run some fairly sophisticated apps/games that would still take a couple dozen people years to create. That's the case with other hand-held apps.

It's definitely an exciting platform. I'm watching how Noel and my pals at Appy Entertainment do.

Ron said...

Oh, no doubt that the big companies have far more $$ to use on marketing and things like that. ...and big desktop/console games like Medal of Honor/Rock Band/whathaveyou cannot really be compared to iShoot.

However, can the big studios compete with the one-man shops in the mobile market? The big companies have a much higher production cost to recover.

Lots of people at my office have iPhones. The gamers among them are not rushing out to spend $$ on games, they will get the cheaper games. They were telling me that there are so many games in the App Store that they can always find something interesting for free or maybe a buck. THAT's what the big companies are up against.

I have no idea how big an effect the small outfits are having on big companies, I have no clue how the overall gamer population breaks down among desktop, consoles, arcade and mobile games (obviously there is overlap).

It would be interesting to see how the numbers break down.

Clinton Keith said...

>However, can the big studios
>compete with the one-man
>shops in the mobile market?
>The big companies have a
>much higher production cost
>to recover.

They both seem to have their challenges. The market has yet to shake out and provide a good business model for either. Noel's PowerOfTwo company was a good example.