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March 28, 2006

The Last Tribal Gathering

Filed under: Thoughts and Rants — Tom B @ 9:23 am

The annual Game Developers Conference (GDC) is many things to many people. A tremendous amount of information gets distributed through the panels and presentations. I huge amount of business get done in private meetings. Developers get their first look at new technologies on the expo floor. And vast quantities of beverages are imbibed at the lounges where old friends meet and new friends are made.

This year the GDC returned to San Jose, after being in San Francisco last year. CMP, the folks who own and run the GDC, have decided that the San Jose location, where the conference has been held for the past 8 years or so (except for last year), will just not handle the number of attendees. So, instead of spinning off the mobile or the “Serious Games” portions of the program, they have pretty much decided that this was the last year in San Jose.

So what. you say…well here’s what. First, developers own the town in San Jose. You can walk up to someone anywhere in town that week and odds are they are a developer there for the conference. As much as I love San Francisco, it’s just not like that there. Three steps out of the Moscone Center and it’s even odds that the person next to you is a bus driver, rather than a developer. And there is no social center in San Francisco either.

The center of all activity at GDC San Jose is the Lobby Bar in the Fairmont Hotel. There are plenty of other saloons in San Jose…one in every Hotel. But the Fairmont Lobby is THE place. It is an institution. Deals get done in the “pit” all day long and socializing goes on til they throw everyone out at closing. Then the cycle starts over the next day throughout the conference. As the week progresses the “pit” gets more and more crowded. Sunday night there were only a few of us there. But we were all veterans and knew, or at least recognized, each other from prior years. I guess you would call us the tribe elders. Night after night more and more people pour into the “pit.” The tribe grows…but still has a recognizable core. By Thursday evening the cacophony of sound is almost unbearable as thousands of game developers all crowd into the only place to be in San Jose. The Fairmont Lobby Bar…the home of the last Great Tribal Gathering of Game Developers.

Next year we will be in San Francisco. There is no one place for folks to meet. There are many. And the GDC will move on to the next stage of its maturation process….from a tribal gathering to just another business conference. I guess this is an inevitable part of the maturation of our industry…but that does not mean I have to like it. So, don’t be surprised if you hear about a bunch of hard core old schoolers renting a bus next year and all heading down to the Fairmont Lobby for an evening of drinking and reminiscing…after all, that why they are called the Fairmont Lobby Lizards!

March 16, 2006

A Public Apology…

Filed under: Thoughts and Rants — Tom B @ 2:22 pm

I must apologize to all of my fellow gamers and developers. Why? Because i failed to carry the banner into the chambers of the Miami-Dade County School board yesterday in opposition to the Wackie Jackie instigate “resolution” to bar RockStar’s upcoming game “Bully.” I could say I was busy preparing for the Game Developers Conference in San Jose next week, or that I was busy with one of the many things I have to get done before I leave. But, the simple truth of the matter is, I just didn’t bother.

The School Bord building is about 2 miles fro my office. I was aware of the pending vote. I know it’s total bullshit and am enraged that they would even consider such a resolution in the first place and most of all, I know it is Wackie Jackie at work here. So, why didn’t I show? Could be middle age malaise, but more likely it was a combination of being worn down by th incredible stupidity of elected officials, especially in the nationally renowned “banana republic” of Miami and no wanting to personally validate this stuff. But most probably, it was simple apathy and good old inertia. So, the next time I go off ranting at gamers for not bothering to stand up and to vote or take a position on important social issues, I’ll look back at this and remember, it’s always easier to bitch about something than it is to get up off you ass and do something about it.

So, again, I apologize for my complete lack of action and will endeavor to do better next time. BTW, the Wackie Jackie resolution was diluted down to “parents should be aware of the games their kid platy and follow the ESRB ratings.” NP there..I guess there are a few sane people on the school board…but theChairman head of the board, Frank Bolanos, is not one of them!

March 10, 2006

At Your Service….

Filed under: Thoughts and Rants — Tom B @ 8:45 am

As many of my long time readers know, I am a lawyer. Some may even know that I am a Federal Court trial attorney. And as you might suspect, I have a reputation at the courthouse for being bombastic in my courtroom presentations…who would have thought that!!! But my outrageous antics go beyond the courtroom.

Every law suit is instigated by the filing of the suit, followed by the Service of the Complaint and Summons (summoning the party into court) by a process server. In US Federal Court any non interested party over 18 can serve process on a party. That means anyone who is not one of the litigants or their employees or employed by my firm, including family members. I have had two game related suits where a took special pleasure in using some rather creative service.

The first was a case I had against Infinium Labs back in 2001, the creators of the often maligned as “vaporware” Phantom Game System. My Client, WhosWe Studios is one of the top Flash programmers in the world. Lots of award winning stuff. They had cut a deal with Infinium to do he company web site, the phantom web site and also the user interface for the console itself. The deal called for WhosWe to devote a minimum of 80% of its personnel to the job and they were to be paid in excess of $100k a month in cash and stock warrants or options. WhosWe did the work but Infinium was not paying. So, after a genuine attempt on our part to settle, we had no choice but to file suit in Federal Court. And because as its creator, WhosWe owned in IP rights to the original graphic works on the sites and Infinium had publically asserted that they owned ths IP, under Florida law we had a good case for Civil Theft of Intellectual Property which allowed me to bring into the suit the two then principles of the company, let’s call them Tim and Bob.

Service of process on the company was easy…all companies are required to have a company agent who accepts service of process for them. Iindividuals, on the other hand, must be served personally by handing it to them or by service someone who lives with them at their place of residence. I knew where Tim lived, so that was not a major problem. But Bob’s address was listed as being in the Midwest somewhere (him mom’s house I think) but I knew he was living at Tim’s house. In order to secure solid service on Bob I would need to get him personally…but how?

As luck would have it Infinium, located on the west coast of central Florida at the time, was ramping up for the release of the Phantom (one of many such ramp ups!) and was going to do a demo at th IGDA Orlando Chapter meeting. So, I called up a client of mine Ian, an out of work developer, and asked him if he wanted to make a few bucks by serving Bob.. He said sure. So, after the representation, Ian walked up to Bob in front of a room full of people and asked him his name, Bob said, “Yes.” And Ian followed perfectly by handing him the law suit and saying, “You’ve been served!” Sweet. I ran into Bob at the DICE conference a few years later after the matter had been resolved and bought him a drink. After all, business is business and there’s no reason to take these things personally!

The second one involves Gizmondo…hey! that’s another much maligned hardware product often referred to a vaporware…is there a pattern here? Gizmondo had breached a contract with my Client, Hand Held Games, and we needed to drag them into court to get things resolved. The problem there was that Gizmondo, though owned by a US company, is based in England. Service of process across international borders is not only tricky but expensive. But, I’m a clever boy. So I decided that the best was to get this done was to serve a corporate officer while on US soil. But how would I ever got that done…then the light went of…E3! Yep, last years’s E3 had a huge booth touting the Gizmondo device and all the cool games it had. And, of course, the executive officers of Gizmondo were there through the show to sell their wares. I had them.

So, I contacted a great private investigator in LA and provided him with a copy of the law suit, summons and pictures of Steve Carrol, the Gizmondo executive that needed to served. And within a day we had him! I will long remember the feeling of satisfaction strolling through the Gizmondo booth with my client and friend, Tom Fessler, the President of Hand Held Games a few hours after we had confirmed service of the suit…sweet. Who says litigation isn’t fun!

Til next time…GL & HF!!!

March 1, 2006

The Good News About Digital Distribution

Filed under: Game Law Articles — Tom B @ 4:06 pm

Last year at GDC, I met the guys from Tripwire Interactive. They had just put their studio together from the team that created the Red Orchestra mod that won the “Nvidia $1,000,000 Make Something Unreal” contest. Their mod had also garnered a bunch of “Mod of the Year” awards. Since they needed my legal help, but were tight on cash, we worked out a deal where I agreed to represent them for a percent of revenue. Sort of like an agent, but at a much lower percentage.

I do this from time to time with teams that I really believe in. And, I had even done a similar deal with Trauma Studios, the creator of Desert Combat, the prior year’s “Mod of the Year.” So, it seemed fitting. (Hmmmm…I wonder who got “Mod of the Year” for 2005?)

There was a great deal of interest in the commercial version of the game from several publishers including Midway. And we worked for months trying to close a deal. But eventually it became apparent that even though the folks on the product acquisition side were very interested in the game, the marketing folks were not going to green light the deal because their retail buyers had not heard of the game and would not put in significant initial orders necessary to minimize their risk. So, no deal.

The Red Orchestra Deal

Fortunately, as part of the contest winnings, Tripwire had an Unreal Engine 2.5 license. So, although they did not get the whole million dollars for winning (the total prize money in products, engine licenses and cash totaled $1,000,000 over the entire contest), they had an engine and some cash. So, they put what they had into finishing the game however they could. We continued to look for a publishing partner and began discussing the digital distribution possibility.

We looked into a bunch of digital distributors including IGN Direct 2Drive, Trymedia’s Digital River Distribution network, GarageGames and Valve’s Steam. I assumed that Steam was limited to only Source Engine games and that there was no way the Valve would want Red Orchestra, a WWII FPS game made with Unreal technology, competing against Valve’s own Day of Defeat. But to his credit, John Gibson, the head of Tripwire got in touch with Valve anyway. To my surprise, the folks at Valve were not only interested, they were straightforward and easy to work with. A real pleasure. So, in short order we had our digital distribution deal in place.

Of course, with a digital distribution deal, there is usually no big marketing push from the distributor like there is with a big publisher. But, through Steam we would be selling into the hardcore FPS gamer market. And as a result of the Valve deal, Red Orchestra got solid editorial exposure in major PC game publications, including two page “preview” articles in PC Gamer US and UK. The buzz from the Valve deal resulted in a retail distribution deal with Destineer as well. No advance. But access to the retail distribution channel and a solid chance to succeed. And most important, no need to give up the IP rights to the game.

That means Tripwire has a chance, maybe not a big one, but a chance to retain the IP to a franchise that they built. And that means long term IP value to the company. And it was the digital deal that made it all happen. So, Tripwire Interactive’s Red Orchestra: Ostfront 41-45 is set for release in March 2006 via digital distribution on Steam followed by retail as soon as the media gets manufactured, through the retail pipeline and into stores. Wish them luck!

The Digital Distribution Advantage

Once the digital deal is in place, a retail publisher is in a much less advantageous bargaining position, especially where it comes to IP ownership issues. Digital distributors, at least for the present, have no interest in obtaining IP ownership for the games they distribute. The so-called casual games, or “Pop Games” as I like to refer to them, have been building this model in the PC market for several years. And with the present broadband penetration, the download of full-blown PC games is a reality. I recently purchased F.E.A.R. digitally, and that’s an over 1GB game, unzipped. And we all know of Valve’s success with distributing its games via Steam.

Digital Distribution for Console Gamers

Up until now digital distribution has been something unique to the PC market. But the Xbox Live Arcade (“XBLA”) is changing all that. The size of the game that can be downloaded on XBLA is limited to the size of the 64MB memory card, which limits things somewhat when compared to PC downloads. But it is a huge potential market. Of course, access is also an issue.

If access to the XBLA pipeline gets clogged with aggregators who are already XBLA certified, we could potentially end up with some of the same issues we have now with the retail channel. For example, although MS has no interest in game IP ownership, at least one of the XBLA aggregators is looking to acquire IP rights to the games it distributes through XBLA. But hopefully this one distributor is an aberration and there will be enough less greedy options for developers to just go elsewhere. After all, the marketplace is a great influencer of predatory policies like this.

The big question is, will the PS3 and Nintendo Revolution also have a digital distribution capability? I suspect they are considering this right now since XBLA is doing a brisk business and leaving this potential market open to a fierce competitor like Microsoft could be a huge blunder. So, it is at least possible that Sony and Nintendo will also do some sort of digital distribution in their next gen consoles. And they may even do it better that MS.

The Bottom Line

So, I have become a believer in the digital distribution of games. The developer’s royalties are usually two to four times greater than what they are in a traditional publisher deal. This means you can sell fewer units and get by and if you get a hit, you get much more return, even at a significantly lower price point. Also, in most cases the developer retains the IP. This help builds long term value in the studio, something you cannot get otherwise unless you develop some sort of patentable technology or other licensable tools and technology while your making your game.

The digital distribution model also opens the door to pure funding deals that do not involve publishers who, frankly, charge much more than the value of the money for the funding they provide. But most important, digital distribution means more ways to get your games directly to the players with as little “middle man” action as possible. That has always been the great promise of the Internet and it’s great news for developers. Heck, higher royalties, you get to keep your IP and direct access to your user base. It’s hard not to believe.

Till next time, good luck, have fun and I’ll see you at GDC!

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