Saving Rim, Part 3: NokiaSoft

Blackberry is in the news again, this time for not getting bought by Microsoft.

We all know the story of Blackberry, if not, here’s the recap. An innovative Canadian upstart that captured the cellphone market with QWERTY keyboards and enterprise ready email integration. One of the first true smartphones and choice of business’s all over the world. Like all great things, imitation was the purest form of flattery and Palm and Microsoft began nipping at the champs heals. Finally Apple jumped in and changed the game for everyone.

RIM wasn’t worried though. Perhaps they should have been.

Palm (remember them?) floundered and was swallowed up by HP, then sacrificed to the tablet god. Blackberry began its slow decline right thought its own tablet attempt and face lift. At this point Blackberry was seen as your dad’s phone, sturdy but incompetent in the new world of Facetime and Facebook.  Despite the heavy marketing effort to signal otherwise, RIM could not make up for a lack of R&D and the  giant technological eco-systems from Apple and Google.

Microsoft stalled on a few devices, trying to perfect the Windows phone which they didn’t really do it until they found a partner with Nokia. At that point, Blackberry and Microsoft partnership seemed like a good idea, Microsoft’s RT wasn’t cutting it, neither was Blackberry’s OS system… Palms OS was dead and Nokia’s ancient Symbian was freshly buried.

The Genius of Nokia. The last maker of Dumbphones.

The Nokia CEO made the right call to partner with Microsoft. The developing world is the largest growth market left to conquer. Nokia has the best penetration worldwide and at the price points needed to serve these regions. Blackberry would have always demanded a premium and would have stayed that way to preserve it’s model. So when looking for a partner to grab the #3 market share, Microsoft had two options. A) High value, small segment B) Medium / low value + huge segment, and went with the latter.

Microsoft and Nokia are playing the long game, the global one.

In the end I know Nokia was a better deal for Microsoft’s global plans but as a proud Canadian and a business person, it would have been really interesting to see Microsoft resources reinvigorate Blackberry. I think Microsoft would have gained some fresh perspective and a leg up on their tablet game and found a natural partner for their office suite of software. No one knows what’s next for Blackberry (other then an eventual sale), perhaps Microsoft is so big they will have the cash leftover for a purchase, but I doubt they would want the headache at this time.

Companies with a lot of cash that want to play the cellphone game and market to the business and enterprise sector might see Blackberry as a logical extension of their brand – I’m looking at you Sony.

The Future of Free to Play

What is Free to Play (F2P) all about?

Back in the early days of PC gaming I can remember how coveted game demos were. Magazines often packaged a CD-Rom of current game demos as a value add to give you just enough of a taste to whet your appetite, hook you,  and get you to purchase the whole thing upon going gold (release). Traditional video games for as long as I can remember have hovered around the $50 mark.  Not today, some of the newest, highest production value games are free.

That’s right 0$

If you have the time but don’t have the money you can play a ton of games for free with either ad support or stripped of premium features. Faster game-play, better and additional items and goodies await you for nominal fee.

Getting you to pay for these features is the true goal of Free to Play which is essentially a Freemium model.

Does this work?

Yes , in the mobile space we’ve seen it work with Angry Birds, Plants vs. Zombies, Draw Something and many other titles. One thing they all have in common is the excellent job they do of roping you in.

dsome

Draw Something in particular saw explosive user acquisition initially as everyone with a new smart phone had a friend they wanted to try doodling with, limited selection of colours and all.

The typical strategy of these companies is;

1. Acquire you

2. Retain you

3. Monetize you

Developers know the first 20 minutes are key. If they can achieve this, they will keep you interested for as long as possible and retain your business.

Past, present,  future

back-to-the-future-delorean

In the past a mere taste of a game was enough but with companies competing for user’s time a midst a sea of time killers, what model is guaranteed to generate the most revenue? Can ancillary items like important marketing information for advertising make the game developers more money than the initial cost of the game?

As it turns out, the F2p model does this well and more. By the end of the year , we will see a social enabled free to play game in virtually every genre and internet enabled gaming device. What defines “gaming device”?

Anything with a browser. Use your imagination. In the future expect to see a whole lot more F2P.

Friction is the key

friction

Creating the right amount of difficulty or slow down with just the right amount of ability to progress in the game is what the ultimate free to play games strive for.

On PC I think Tribes Ascend has really nailed it. Great game engine and fun game-play with a ten-year legacy of Tribes players. You can play for weeks to upgrade a couple of your stats but you may be enticed to pay for different weapons sets or customization slots within days.  I expect to see the same thing with Hawken.

tribes ascend

On my phone you will find the excellent AOD army of darkness defense game (based on the movie with the same name). Free to play, spend money on coins if you wish to increase your stats and upgrade units earlier on. I found there to not be enough friction and I was able to beat the game without being tempted to spend any money. Still great fun and I am hoping for a follow-up from this studio, the more cult movie franchises tie-ins the better.

Aod

Another game I recently began playing is Clash of Clans. This game is a turn based city build/defend strategy game with social aspect of being able to join clans and attack other players. With this game the friction is almost too high, I know almost right away this game is going to be frustrating unless I give in to spending some money.

coc

The perfect amount of friction has the player eager to play forward without discouragement while clearly seeing the value of a purchase as an immediate benefit and thus will be compelled to spend a little bit.

The value proposition of these games is tied inherently to the core gameplay mechanics.

In more complex scenarios like Valves, Steam exclusive DOTA 2 game can lead to complex economic systems that are self-sustaining and rely partially on user-generated content to make new items and customize your players load out, sound effects and more. This is a really interesting prospect because of the ability for users to generate revenue, trade and contribute to the creation of its own self-sustaining economy.

Dota-2

The Social Element

We know games like Draw Something and Cash of Clans draw in the friends of users, as does DOTA 2 (I was given 5 invites for the pre-release access). It is widely known that generally people like to play games with friends, and because of this Facebook has been a great game finding and playing platform as web browser technology ploughs forward and better games come through the pipeline.

For those against Facebook, or at least gaming through it and for those publishers not cool with the 30% cut Facebook takes of the profits, there are publishers and independents with their own free to play game platforms.

Leaders

Kixeye, the bad boy of F2P has their own platform built into their website at www.kixeye.com

Kixeyebb

On their website platform you will find their premier titles War Commander and Battle Pirates which are MMORTS style games with true synchronous combat.

Kixeye is a pioneer of hard-core free to play MMORTS (massively multi-player online real-time strategy) style games with social elements and real-time synchronous game-play (instead of waiting for opponent to take a turn, the action happens in real-time on both sides) which is quite the technical feat with approximately 4.8 million users logging in monthly.

Having achieved commercial success through Facebook, Kixeye’s average player spends about 1.5 hours playing War Commander a day, with a 400,000+ DAU (daily average users) count.

As with many free to play games, the friction point of Kixeye games are primarily speed of play with base building taking the majority of the players time unless they choose to buy speed ups or purchase resources which many Kixeye players do. In fact Kixeye has one of the highest ARPPU’s (average revenue per paying users) in the industry at about $0.80 per paying user.

kixeye-900x575--BEPB

Then there are MAU/DAU (monthly and daily average users). This figure is essentially engagement, how many of the monthly users actually come back and play daily? After all, they can only spend money if they are in your game. Kixeye’s War Commander sees a very consistent 1 million active users per week (WAU) meaning they have an extremely high level of user engagement.

Kixeye will hope to repeat this success with a new exclusive F2P MMORPG later this year.

Now that I’ve bombarded you with a few of the industry metrics and bored you to tears lets refocus

Of course there are many more ways to measure your game’s level of success, but making a great game that people want to play has got to be the core you work from. There are more games of varying quality using this free to play model than ever before and likely more games to come. It is conceivable that after the bean counters run the numbers, traditional subscription modeled and $59.99 one time purchased games will become free to play.

My only concern with this trend is that game-play mechanics may not translate well to a free to play model. Critical friction points may be out of alignment with user value perception and result in lost opportunities and players more likely free to stray to another game. With an emphasis on building micro economies as outlined in Gabe Newell’s vision of the industry ( http://youtu.be/PeYxKIDGh8I ) , there is a chance for creating longer running, organic, self-marketed and thus higher revenue producing games in this manner.

There are many games to play and  too little time to play them all. Let quality, variety, game-play and friction separate the wheat from the chaff.

rofl friction

Other free to play browser games can be found at:

www.Kongregate.com

www.wildtangent.com

www.mmobomb.com

If you are interested in learning more about free to play gaming check out:

www.gamesbrief.com

www.appdata.com

www.allfacebook.com

The Return of TableTop Gaming

Settlers_of_Catan

I welcome gaming with friends, it’s a great way to unwind, catch up, and have a few laughs.  Being of the video game generation , I never expected I would revert to board games.

I’ve owned everything from an old Atari computer with Basic and a floppy drive to load games, to a 286’s to Pentiums to the latest multicore systems of today. Along the way were consoles from Sega, Nintendo , Sony and Microsoft.

My PS3 has mostly become a Netflix machine connected to projector for large screen low definition movie watching and most of my gaming has shifted to free to play browser and steam games on the computer or *gasp Iphone.

My quad core workstation has a beefy video card if I need to push some frames but my 2010 MBP follows me to the couch and has become my companion.  When I burn out from watching all these glowing screens, I revert to my love of reading on my non backlight e-ink Kobo Touch.

So here I am with all this electronic technology never expecting to actually enjoy a board game again.

As a child I had my fill of Monopoly, Scrabble and Clue with family and friends before video games completely eclipsed these. The Original Social Games.

With my friend’s encouragement and frankly no choice but to play with them, I was coerced into becoming a Settlers of Catan player. A simple game of resource management, dice rolls and every changing strategy and diplomacy. Simple yet nuanced.

Sitting around the upside-down cork-board at my friends bachelor pad with four others to play a board game seemed weirdly anachronistic at first. Probably because we were used to playing Quake 3 over the internet on our own servers from the comfort of our own homes. When we were in the room together Gears of War was usually the choice for split screen cooperative play on massive projector screens.

Remember the poker fad from a few years ago? That was probably the only other analog experience we had as a group.  Interacting on a competitive level with your friends without the intermediate of technology is a shockingly refreshing experience. No need for to be mic’ed up on Ventrilo to hurl some insults, just say what’s on your mind, no need for emoticons, your face will do.

Then there are the “Feelies”, with Settlers of Catan, physical objects such as roads, settlements and cities are little plastic pieces with an air of quality and metaphysical as well as real weight to them as they get placed on the board.

Differents-Boards-settlers-of-catan-521934_1157_768

A particular arrangement of roads and cities popping off the board in physical space becomes somehow more striking as a symbol of attrition, perhaps as intimidating as scouting an enemy nuclear silos in StarCraft or a fleet of Protoss carriers coming your way. The development cards which you can buy as tech tree like skill boosters in many games, sometimes stack up to grant extra points or powers like taking all of one resources out of your friends hands (the monopoly development card).

My question is, with the resurgence of board games like Settlers of Catan, are we going to see a new half digital – half physical mash up of the genre?

Let’s look at another classic board game, Monopoly – consider all the different versions and interpretations of it. Pretty cool, but you need a new set for each one. I don’t know many board game hoarders with multiple versions of the same game. Personally I have a Star Wars version of Monopoly, but that’s it.

With newer multi touch interfaces, tougher glass like Corning’s Gorilla Glass 2, and a decrease in screen costs as they scale larger and larger, it only seems logical that we will see a shift towards rediscovering board games in the digital realm.

Sure we’ve all seen the crappy digital versions of classics like Monopoly where you pass the tablet around to the next player, but something is lacking in the experience. Since all board games are turn based , passing along the screen from player to player kind of works, but it also kind of sucks, there no central focus for the group, the experience is numbed without the central source of attention and without seeing what individual players do as they are doing it. Worst of all, these experiences are made more ethereal without the presence of Feelies in your hand or on the board

So we lack holographic technology, but we have tablets that are foresee-ably going to be cheap and large enough to cover an average coffee table, powerful enough to display high end graphics, be connected to the internet and playback sound effects.

But the digital versions of the board games suck compared to playing the real thing!

As 3D printers come online, and new NFC technology gets even cheaper, old and new school game designers and hardware developers have an opportunity to do digital board games right. Half physical with printed pieces tagged with NFC (near field communication) codes for software identification and half digital with animation, sound and the ability to load infinite variations of game sets, brands, publishers, spin offs, mods, and more. Imagine playing a Settlers of Catan version modded out based on HBO’s series, The Wire (I’ve given some thought to it)

Everything that’s great about software gaming brought together with physical intermediary of game pieces to tie the experience together in a corporeal and social setting.  I think we are still a few years away, but we will start to see some leaders emerge with a standard sized multitouch tablet and a great viewing angle that will become the standard delivery method for these games. What pieces you can’t get sent in the mail or purchase from your local hobby stores will become 3d printable downloadable designs that will carve itself a niche with a new set of hobbyists, artisans and hackers to push the community forward and eventually make it mainstream.

Check out the links below to see one of the emerging leaders (Epawn) in this upcoming market.

http://youtu.be/wcqKR1OihSY

You can clearly see from the video the benefits of the digital experience being brought to the analog turn based gaming age, move a piece, and watch the animated attacks flow over gorgeous textures!

More to come on gaming as I follow-up this article with a look at the free to play market and the future of casual gaming.

How to Save RIM: Part Two (Saving the Canadian Dream)

Instead of writing a eulogy for Research In Motion, I would rather focus on some ideas that might save the brand.

Perhaps it’s because I’m on optimist, or because I’m a hopeful Canadian entrepreneur and recent grad of Royal Roads University‘s Bachelor of Commerce program that I can’t help but think of ways to save “The Canadian Dream”.

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RIM stands out as one of the few high tech Canadian start-ups to play with the giants of a major industry and was actually winning for quite some time.

Mostly it represents great possibility to me of what can be accomplished from north of 40.

We also happen to share the birthplace, Waterloo, Ontario.

So how do we rescue RIM? Let’s examine the current market and some key players;

Apple

Has more cash than most nations on earth right now, a coveted brand and very good reputation for quality products. A tribal following that is gaining steam year over year and ability to out innovate and win patent wars that crush competition.

Where they are now with the iPhone is similar to where Blackberry was probably 7 or 8 years ago.

They seems to be erecting barriers as they attempt to claim the leadership in the market.

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Courtesy of http://www.comscoredatamine.com/2012/04/android-captures-majority-share-of-us-smartphone-market/

Google

The internet giant. The only entity still bigger then Apple and possibly more influential. Swallowed Motorola for patents, it’s Android OS pervades low cost tablets and a litany of cell phone that range in quality, perhaps peaking with offerings from HTC and Samsung.

Also gaining popularity and prominence – Apples number 1 threat (hence the Motorola acquisition – they seem to be prepared to play IP chess with each other for the next while).

Coming up third but still a major threat to the previous two’s market share is Microsoft.

Microsoft

Seems to be playing a game of catch up with its competitors, but should not be overlooked, is still a powerhouse. Think about how late it entered the gaming console market with the Xbox and yet now outsells the previous king of entertainment, Sony. The sleeping giant is waking up.

Microsoft is doing everything right these days. Not quickly, but right. They are taking time to reinvent their brand, working with more hardware vendors to compete with Apple’s consistency.

Their alliance with former cell phone heavyweight champ Nokia could pan out to be a very strong player. How?

Nokia is already a well-established communications brand – they only lacked a useable modern operating system. Windows mobile fixes this. Windows 8, Surface tablets and cloud services (Skydrive) form a very competitive and robust ecosystem that only Apple can match at this time.

Back to Basics

There is where we come back to RIM, without focusing on mistakes they have made, is there any way for them to compete with any of these giants? Is they brand worth anything anymore?

Yes.

Perhaps to a smaller set of business users that require higher level security, high quality communications and did I mention security?

The cloud is going to be an ethereal and magical place where many new computing experiences are to be had, until the first time a serious business reliant server gets hacked, then it will be terribly frightening.

Perhaps the R&D and acquisition budget at RIM has run dry, so my previous article about pioneering battery life tech may not be realistic at this point. But they can still focus in on their core competencies.

The Fix

How many models of Iphone are there for sale? Pretty much 1 (2 now), and the previous iteration at any given time?

Why does RIM have 17 models!!?

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Many of them hardly look different. Who are they building these things for?

Reign it in guys, you need 2 phones, tops.

Who is your market? It’s not kids, it’s not grannies, and it’s not even teens anymore. Come back to centre. FOCUS on your target market, your core competency.

Business people.

Make it attractive to have one, make it the BENZ of cell phones for business people but most of all make it functional, make it an ESSENTIAL tool.

Consolidate your 17 designs into 1 or 2 which focus on the business user’s needs (yes I’m going to come back to battery life).

Perhaps a larger screen, a superior keyboard, class leading security, a cloud service for documents and perhaps MS Office Mobile, built in.

This is where a strategic play can be made. Business people still love Microsoft products (admit it, you’re excited about Office 2013)

A partnership between RIM and Microsoft to meld the Windows platform onto RIM hardware would expand MS’s mobility presence, as well as draw more business users back to Blackberry.

A new Playbook could be made as a Surface tablet, which I will write about later in the month as I think it is poised to become the king of tablets.

So there you have it, RIM + Microsoft = the rebirth of mobile business domination.

Either that or Rim goes the pay of Palm, and that would just be sad.

Case Analysis

Hey World (specifically Victoria, BC Canada).
So it looks like I will be the live case writer for the RRU sponsored Case Competition. If you or anyone you know has a business they would like worked on by a 100 bright business minds, you need to get in touch with me!