Here's a sampling of just some of the most recent stories.  A lot of reporting around the A/B merger, of course.  Another trend seems to be around the continued expansion of the gaming audience, whether new demographic audiences or serious games.

(apologies - my editing status in WordPress still precludes things like hotlinks, trying to figure out the technical difficulty) 

Businessweek Apr 28: "Tool: Training Games" - Microsoft's ESP toolset for serious games is profiled in a short blurb. –>  

Businessweek Apr 28: "Opening the Wii to wee game developers" - talks about the shift in Nintendo's strategy away from tight developer control to more open development and smaller studios. –> http://www.businessweek.com/magazine/content/08_17/b4081070887317.htm?chan=search

Businessweek April 21: "In Hot Pursuit of a video-game deal" - mostly about the EA/Take 2 battle. –> http://www.businessweek.com/magazine/content/08_16/b4080028214708.htm?chan=search 

Businessweek Games blog Apr 17 (and Apr 28 issue): "Numbers: Video Games: Not just child's play".  Numbers on the growth and changing demographics of the industry.  –> http://www.businessweek.com/innovate/gamesinc/archives/2008/04/gaming_by_numbe.html 

THR Apr 17: "Mainland MMO" - World of Warcraft hits a new high in Mainland China, with 25% increase in peak concurrent users since Oct 4.

Fortune April 14: "Guess who's rewriting the Rules of Gaming?" - lead article in the Technology section, talks about the changing (and growing) demographics of game users, and postulates disruption for large established publishers in favor of smaller developers , social MMOs (Nexon), and, all all places, Target.  Interestingly, it reminded me of the panel back at GDC where Min Kim from Nexon speaker basically smacked down Jack Emmert from Cryptic.  –>  http://money.cnn.com/2008/04/16/technology/leonard_games.fortune/index.htm and http://gametomorrow.com/blog/index.php/2008/02/21/ibm-at-gdc-part-3-the-future-of-mmos/

THR Apri 8: "Game on: Dis plays in China" - Disney plans to buy Gamestar, the China-based games developer. (subscription required) –> http://www.hollywoodreporter.com/hr/content_display/news/e3iec476757724b75704f7105b606e4949f 

Businessweek Apr 7: "The Power of Play", an entire online special report on the Games industry.  This one warrants a separate blog post. –> http://www.businessweek.com/innovate/di_special/20080324thepowerof.htm 

THR Apr 1: "It's March madness for vid gamers" - more good news on the story of games being "recession proof": "…In February, software sales were up 47% year-over-year while hardware sales were up 19%, research firm NPD said." –> http://www.hollywoodreporter.com/hr/content_display/news/e3if3e739fe43eee9a1f7697a32819d3886

THR Apr 1: "Ubisoft ups '08 forecast" - ditto on the recession-proof storyline. –> http://www.hollywoodreporter.com/hr/content_display/news/e3i37a2ec580927b4288e7ce119d5539aef

THR Mar 27: "Game guards" - small blurb about UK proposal to require health warnings on violent games a la cigarettes.  And here we thought Margret Thatcher abolished the Nanny State… 

THR Mar 25: "DHX Shapes Up" - acqusition featuring kids gaming and fitness –> http://www.hollywoodreporter.com/hr/content_display/news/e3i5a42e7f03a5c48fc2d3a91adfb456738

THR Mar 24: "Electronic Arts, Starz race to 'Space' movie" - extending the existing 'Dead Space' game franchise into an animated feature.  (subscription required) –> http://www.hollywoodreporter.com/hr/content_display/news/e3ifcdf91a54bfcc659fd41daa658a0f164

THR Mar 20: "Points slow to come in EA game" - amid an article on the EA/Take-2 takeover battle, a nugget from the NPD Group: "…with NPD Group figures released this week citing February sales of Hardware and software at $1.3 billion, 34% higher than the same month a year ago."  –> http://www.hollywoodreporter.com/hr/content_display/news/e3idcdfd6551bebb6397f67ac6da248aa5b

THR Mar 19: "GameStop Gains" - gamestop's 46% increase in fiscal 4Q profits 

The first, from April 10, writes about how Nickelodeon is developing two casual MMOs. The first a virtual world based on SpongeBob SquarePants, and the second called Monkey World.

The second, from April 17, writes about Cartoon Network prepping it's own casual MMO for this fall, after being delayed twice. This on the heel's of Disney's original property Toontown and their purchase of Club Penguin in 2007.

Is this a trend?

"When we started building 'FusionFall,' 'Toontown' was the only kids MMO," notes [Chris Waldron, the game's executive producer]. "Since then, we've seen a proliferation of MMOs targeting the same young demographic as ours, including 'Pirates of the Caribbean,' 'RuneScape,' and even social games like 'Club Penguin' and 'Habbo Hotel.' So, yeah, it's getting crowded out there and there are many more in the works so it's getting even more crowded."

http://www.ibm.com/developerworks/blogs/page/rawn

'…In a real-world military system, leaders assume that teamwork is a given. They never had to face the idea of a "democratically-organized" army as in an MMOG. That is a much harder proposal in terms of setting up teamwork. '

Money quote:

"…The old industry formula for success was simple: license a popular movie or sports title and then crank out slightly updated versions of Madden NFL or James Bond year after year. But that approach, developed in large part by EA, isn't working now. Sales are flagging, and gamers are losing interest…"

The missed point is that this is Electronic Arts being caught in its own success of turning a key licensed franchises into ongoing blockbusters. As Hollywood only too well knows, going down the sequel path might lead to good revenues in the short term but wears out the audience pretty quick. This isn't the entire industry - just look at the MMO chart I linked to a few days ago. It's the business press taking the easy story of extrapolating the travails of the 800-pound gorilla as a cypher for the entire industry.

EA's hostile bid for Take-2 Interactive is another interesting angle that could have been covered.  If you're quoting John Riccitiello (EA's Chief Executive) as saying "I am just stomping down on the boring sequel idea…", then why didn't the authors question how the takeover bid might be reinforcing EA's old model of buying/extending existing IP vs. directing investments towards new IP projects like Dead Space?

The better story would have asked that question.  Or have interviewed any of the attendees at last year's Hollywood and Games conference. Cross-pollination is old news; Star Trek and McDonalds were doing that in the 70s with the Klingon Happy Meal. The new news is how technology and social media are changing how IP from one media is stretched and morphed into new channels that take full advantage of that new media's unique capabilities while still retaining enough elements from the initial creative outlet that it's recognizable to the audience. And how the traditional sequential release windows ("first film, then game, then sequel film, then game…") are turning into simultaneous AND asynchronous multiple experiences that allow a single franchise to engage different audiences they way they want to be engaged.  That would have been a far more interesting story to me.

Maybe that's why I liked the book "Convergence Culture" by Henry Jenkins so much. 

Here's just one example: what about a look at how content owners are stretching the boundaries of what games really mean? Rather than a rehash of yet another deal to turn a film into a game (or vice versa), why not look at how ABC solidified it's Lost franchise with an Alternate Reality Game like The Lost Experience?

World of Warcraft, to no great surprise, continues to dominate, but others are starting to appear, notably Tabula Rasa (http://www.rgtr.com/index.html), Lord of the Rings Online (http://www.lotro.com/), and Vanguard: Saga of Heroes (http://vgplayers.station.sony.com/).  Which means the Fantasy RPG is still the dominant theme.  I wonder how that will all change when the long, long, loooooong-awaited Spore (http://en.wikipedia.org/wiki/Spore_(video_game)) finally arrives later this summer.

Left to Right, Joaquin Madruga (IBM), Johnny Chung Lee (CM), Barry Minor (IBM) 

At the show we demonstrated two infrared (IR) LED tracked displays. The first was a target scene, similar to Johnny’s, that we created in 3dsMax and the second was a 7 million triangle China town scene created in Maya by our partners at Threshold Studios (Thanks Threshold!!). The target scene was easily ray traced on a single Linux Playstation3 but the China town scene required some real horsepower so we deployed six QS21 Cell blades and rendered it remotely using a GigE connected blade center.

Head tracking produces a very unique virtual window effect where the monitor appears to be a portal into a virtual world. The user wears a pair of IR LED equipped safety glasses which are tracked using an IR camera attached to the Playstation3. As the user moves, the view relative to the screen is computed and ray traced in real-time producing a strong motion parallax 3D effect. The next step for this technology will be passive head tracking using face tracking technology like that demonstrated by Richard Marks in the Sony booth at GDC 2008. What we need now is a passively head tracked 150” plasma with ray traced visuals at 120 frames/sec!!

iRT Head Tracking Video (YouTube)

iRT Head Tracking Video (Quicktime 28MB) 

Forgot to post some pics of the IBM booth at GDC two weeks ago; that's what you get when you go right into another set of meetings in Los Angeles without too much breathing room.

Here's our video loop.  I'll be posting it to the website shortly.  My favorite is still the clips from CCP's EVE Online.   

Here's one of our intrepid demoers, Barry Minor, right beside our Exanet pedestal,  which has a storage virtualization software tool to help manage all those game and code assets during development:

This demo garnered the most traffic: Interactive Ray Tracing.  A very cool use of the Cell-BE processor to create a real-time rendering solution.  Using infrared sensors on regular glasses, you can move through the picture as if it were a real window (in this case, I think it's a view into a scene from an upcoming film from Threshold Studios, "Food Fight!").  You can actually see the scene change in real time as if you were looking at it, like craning your neck to a corner to see what's outside the viewing range of a straight-out view.

Finally, our two remaining demoers on our "Deploy" ped, from PlaySpan and Aria Systems, who work with IBM to provide online companies with in-game and in-world commerce and billing services.

The next question had the same "it depends" response: are MMOs going cross-platform, launched on PC and consoles at the same time?  But a pattern started to emerge: Jack Emmert from Cryptic taking more, uhm, shall we say "evangelical" viewpoints with the others, especially Ray Muzyka (BioWare) defaulting to: "start with the game, then go where the audience is, and that will determine which platforms to use.

The next question set off the fireworks: "Micropayments: a viable North American business model?".  Jack was adamantly opposed to micropayments giving plenty of personal examples of how subscriptions are valuable to him (cable, phone, etc.) and that micropayments would never be a viable model.  When Min Kim (Nexon) dryly retorted "well, it's 85% of our business model and we seem to be doing fine" the audience erupted in applause.  The remaining dynamic for that exchange were pros and cons of different models, and ultimately a panel agreeing that many bizdev types are too quick to jump onto the "micropayments is THE model!" bandwagon and it goes back to first things first: what is the game, who is the audience, THEN decide the right business models that best work with that specific environment. 

The next question looked at the growing cost of MMO development, with the panel seeing a bifurcation of the market into blockbusters and low-budget.  Each studio discussed how they deal with that, but one thing I think they missed was that this is the model Hollywood has been operating under for decades, especially since the rise of the Independent Film movement.  There's definitely something they could learn from that experience, but there wasn't one mention of how Hollywood's been dealing (and NOT dealing) with this issue.

THe panel was then opened up to audience questions.  The first was whether SciFi as a genre could be successful as Fantasy, with Bioware speaking for the entire panel when they said: "go back to the game.  Have a great idea and it won't matter the genre.  Before StarWars, scifi was viewed as a niche film genre, afterwards EVERYONE wanted to produce a scifi film".

The next question was a rambling thing about UGC and rights and value; the panel didn't understand it and neither did I…and with 5 minutes left in the session took that as my exit cue. 

It's certainly the right direction to be going in.  But at this stage I get the impression the major publishers are only populating it with their back-catalog and other older offerings, partly because of the technology limitations I mentioned but also because they're still testing the waters of digital distribution.  They'll have to ramp up quickly and get top titles fast, otherwise they're not that different from GameTap. 

Today was supposed to start with a Macrovision session on digital distribution, but the speaker never showed, so it was quality time with my coffee and Starbuck's Yogurt Parfait instead.

I next managed to get a seat at the jam-packed Ray Kurtzweil keynote address.  Last time I was in that room was for the Direct Marketing Association's 2007 show which had Richard Branson (of Virgin fame) as the speaker.  He's a very low-key, almost deadpan, public speaker but the audience was still very much entranced with this clearly brilliant mind.  He has a  gift for the understated joking aside, starting with his opening about how "games" in an unfortunate name for the industry given it's real value (a telephone conversation is "virtual", but does that make a verbal agreement over the phone any less real than one in person?  Of course not…so why do we treat games and virtual world interactions differently?")

To set up the topic, what was Games: The Next 20 years, he took a look back.  He observed that 95% of innovative projects fail because their timing is off.  One reason for that off timing is that growth is exponential, not linear, and our thinking processes are based on linear evolution ("there's something in the corner of my coming towards a certain spot…it'll get there in 20 seconds and I better not be in that spot…this is good for cavemen, not for us").  When we look at innovation and pace of change as an exponential function, the overall paradigm shifts become relatively easy to predict.  He then showed plenty of examples: over the past 40 years there's been a billion-fold increase in computing price/performance.  And that pace is accellerating: there will be another billion-fold improvement over the next 25 years.

The result is a democratizing of communications, tools of creation, and tools of production.  Example: his own Kurtzweil Reading Maching for the blind, in 1979 was the size of a washing machine.  You now have a much more powerful version on a smart phone.

So what's the implication for Games?  Well, if it takes >6months to design a game, you need to design it for where the technology/market WILL BE, not where it is now, otherwise it'll be obsolete by the time it gets launched.  Things like computing devices disappear by 2020, replaced by embedded computing in eyeglasses, clothing, mobile devices, etc.  

Definitely lots of food for thought, and not even sure what that means yet.   One of those thinking exercises perfect for quality time with a coffee and yogurt parfait.