Ate a great meal tonight at Cafe Juanita, went to sleep with my 6-yr old because she asked, then woken up by my wife at 2 a.m. on her way to bed after playing WOW.  So of course I'm up, can't sleep, and feeling somewhat introspective.  I would best describe my mood tonight as very murakami. i'm neither here nor not here, comfortably numb and scared shitless, nostalgic and bursting with a desire to capture this in words. random web surfing while i write this - listening to a local band The Liquid Now which has a very Oasis feel but goes down a tad smoother with little droplets of japan lost inside.  Very much recommend the song "Gone Away" by the way.  Also simultaneously reading some of my poetry on lit.org. which is the equivalent of rereading entries in one's diary. If that doesn't make you nostalgic then nothing can. This year, I am determined to publish a collection, I need to just will it and hopefully my friend can help me in getting it organized. I also need a few great photos that capture the spirit of the writing - actually the tallest order here probably. my photographer friends please take note.

 

should i linger by my bookshelf in further melancholy? shall i play call of duty 4? call up wow and grind till sunup? see what's on the idiot box? hot tub? ah hot tub.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

rhys 

 

 

Anyone who knows much about me knows that I used to run the video game rental business for Hollywood Video nationwide.  I'll say this outright, when it comes to the niche of understanding video game rental as a business, I'm probably one of the few people you could call for advice.  Old habits die hard so today I found myself wandering in to a Hollywood video store out of morbid curiousity as to what they were merchandising lately. 

 

I found 10 bays dedicated to Xbox 360, 6 bays dedicated to wii, and 2 bays dedicated to PS3.  Doesn't that tell you all you need to know right there?  PS3 is in a deep deep hole.  Even the 2 bays of PS3 that I saw had both their bottom rows blocked off because they didn't have enough inventory to fill it up completely.  It was sad really.

 

The store was also clearly in the middle of selling off nearly half of its PS2, Xbox, and Gamecube inventory as used.  Pricing was a mess and all over the place.

 

The accessories endcap business I started was still up and apparently going fine judging from the stock-out situation among those nine high-turning skus.

 

At a quick glance it appears that THQ, Take-Two, and Midway are all rev-sharing.  EA still doesn't seem to be.  It's too bad, clearly titles like Smarty-Pants or Boogie need to be rev-shared at rental if they even want to dream about selling it eventually at Walmart.  Can't remember seeing much evidence of Ubi and Activision though I would expect that they would be rev-sharing today - their smart enough and have the right product.  Predictably didn't see any Japanese publishers rev-sharing - intellectually too hard for them to grasp the argument (no offense guys but when it comes to rental, the Japanese companies do not approach it from a logical place).

 

On another note went to both Fred Meyer's and Target today looking for my charity santa present and once again dropped by the video game section to see if Scene-it: Lights, Camera, Action was available.  Sure enough, sold out in both stores.  So far the only place I have ever found the game in stock is EB Gamestop and even there it was selling.  Awesomeness.  Another game I highly recommend for playing with your younger kids - Viva Pinata Party Animals.  Heck of a lot of fun (not to mention easy achievements).

 

 

When I was down in Georgia after my mother's accident, I was given the terrible task of going to the car yard where my mother's totalled car lay waiting for the scrap heap.  On the way there I stopped by the lcoal post office to put a hold on my mother's mail.  The post office was a single clerk affair, the clerk was also the postmaster. She was a very nice older woman with young grandchildren.  We got to talking about what I do for Microsoft and about video games.  She explained that she would never buy a video game ordinarily but the wii seems fun because it is simple and looks like it gets you off the couch.  Then no later than an hour later, I went to the car yard where the owner was a man in his mid-thirties wearing cowboy boots and a baseball cap.  He was as it turns out a hard core gamer.  The guy that loves Halo for the story, the guy that buys the flightstick peripheral to go along with Ace Combat, and who loves to play Project Gotham Racing.  Neither one of them were rich, you would probably best describe them as loosely in the middle class by income and yet both of them were planning to spend a chunk of their money on video games this holiday.

 

The difference being that our favorite postmaster (let's call her Auntie Bee) was going to buy the wii which comes bundled with wiisports and maybe one more title like Mario Party while our favorite car yard owner (let's call him Cooter) was already 7 or 8 games deep into building out his Xbox 360 library with titles like Halo, Ace Combat, Mass Effect, PGR, Gears of War, Oblivion, and Orange Box.  Across their lifetime on these consoles, it is clear that Auntie Bee was only going to pony up to buy another couple of games at best on special occasions like Christmas and Birthdays.  Meanwhile Cooter is probably going to end up with 20 games on the shelf if not more buying maybe 4 or 5 games a year on average.  Neither of them rich as I say, but Cooter clearly represents a higher value video game consumer and the Xbox 360 has them in spades. 

 

This is where the media really falls off the bandwagon with regards to understanding our video game industry and its economics.  Listen up: It isn't just about installed base dummies! Its about how much money you make off of every customer.  It's all good for Nintendo as they can make a good deal of money off the box by itself - but because their customers are so low value there is little money for 3rd party publishers like EA or Ubisoft to make.  For the more hardcore platforms like Xbox 360 and PS3 who lose money selling their consoles and hope to make it all back selling video games - Auntie Bee is just not an attractive proposition - they need Cooter if they want to make money.  When it comes to hardcore gamers like Cooter, he only exists in limited supply and today you can only really find him in large numbers in one place - the Xbox 360.  The PS3 is still too expensive for Cooter to look at.  If I were a publisher, I wouldn't waste my money building an exclusive PS3 game because if you do - congratulations - you've just spent a ton of money with little prospect of making it back. 

Lately there is so much on the plate at work that everything is work in progress and nothing is getting finished at the rate I would like.  This week saw a lot of progress and I am hopeful that what we have of next week will see me catching up on the workload substaintially.  Working on 3 or 4 deals that may or may not happen.  A couple of pieces of "strategery" that may or may not have value.  One deal that must happen quickly.  And lots of P&L modeling work on a very cool prototype project in Japan that is near and dear to my heart.  I have at least 3 messages of "sorry there are no next steps" to deliver.  Possibly a due diligence or even two.  And somewhere in there I got committed into writing up a powerpoint slide for someone about something.  On the positive side, SceneIt? Lights Camera Action came out to very good reviews for the genre.  I finished the 2 deals that enabled this game literally while sitting on the floor this year at D.I.C.E. in Las Vegas.  This was not an easy project given the timeline, the brand new peripheral, and the media licensing issues involved.  A shout out to the wonderful team at MGS, to Xbox Hardware who really delivered fantastic controllers, to our partner Screenlife owner of the SceneIt? brand, and to WXP the developer.  Everyone worked hard to make the game, it wasn't easy, but it was important.  This marks the first time that MGS has put out an adult party game in the trivia genre.  It's getting a very warm reception from core and non-core customers alike and the sell-in to retail is just fantastic.  And may I just say, if you think that this SceneIt? is really great, you ain't Scene nothing yet. 

 

 

Ok it is late and before calling it a day, I felt I had to record the notable news of the day. And this one does not surprise me.  Congrats to our friends at TT. It's a very interesting acquisition.  DC comics / Looney Tunes and Traveller's Tales not to mention Lego and Guinness licenses.  Lego lego everywhere. 12 million units sold are definitely nothing to sneeze at.  Tom Stone, hope you are well.

Did anyone catch this article on Gamedaily BIZ today.

 

Reggie Fils-Aime: Concerns Over Wii Being a Fad 'Overblown'

 

Alright, first of all let's talk about the title of the piece.  Doesn't it imply that concerns over the wii being a fad are partially true? Second what about the total lack of statistics in the piece.  What does "play Wii more now than ever" mean anyway?  I mean I am sure that people are playing more than Wii sports now given that back then there wasn't much else to play.  Now there are several more Ninendo published titles to play.  And that is just the problem.  If you check the NPD data, what is significant is the absence of third party publishers from top of Wii title sales.  Is that a healthy ecosystem I ask you?

 

As for "LittleBigPlanet" and "Halo" - well, sure, everyone likes the look of LittleBigPlanet, I don't think there is any way in hell that one will see it coming to the wii ever.  Besides could wii even handle the back end user generated content sharing of do-it-yourself levels that makes the game so cool anyway?  You have to assume that PS3 can, I know very well that Xbox 360 can.  Same goes for Halo of course, don't think for a minute that that property is ever coming to anything that is not Xbox or Windows. No rumor mongers spreading false hope that Reggie has Halo coming to the wii.  Aha ha ha hahahaha.

 

Today - I'm still in the hospital helping my injured mother.  It sucks.  Things I hate: hospitals, rednecks, rough nurses, hospital food, the shitty red mustang from the rental company.  Things I like: the coffee shop in the hospital, wide parking lots, nurses (the nice ones), wireless in the hospital, cellphones.

 

Things I did today from the hospital - redesigned the business model of a potential game, discussed a due diligence, sent out a redline draft of an agreement, sent out a rejection of a pitch. 

 

OK - time to eat dinner.  Coming up in next episode - pictures of the cars in the accident.

 

I was in the middle of a due diligence on a developer today when I got the call that my mother had been in a car accident and was in the hospital.  That pretty much put a kink in my day as I scrambled around to figure out flights to Savannah, Georgia where my mom lives and cancelled my flight back home to Redmond.  Thus I end up here at LAX at midnight.  I came to the check-in counter only to find out that the travel service had booked me on tomorrow's redeye flight.  Ended up having to buy first class to get on an already sold out redeye flight to Atlanta that leaves tonight?!!?!?! Then the gate announces that the pilot misread the flight schedule and was driving to the airport now from San Diego setting our departure time back by 2 hours.  One of those days that nothing seems to go right.

 

But in between all the chaos, I was still paying attention to the due diligence. It is always a pleasure to meet a studio full of talented and passionate people hell-bent on creating the game their way, the way the vision lives in their heads.  A great developer marries vision with an incredible ability to execute and do so relatively on time and budget.  Maybe this is what the average reader might expect from any game developer but sadly it is not so.  Many developers are houses of ambition and little else.  And the studios that lack even ambition are sad places to see indeed.  You know them when you see them. 

 

I know that game development is supposed to be glamorous but when you are on the publisher's side, being an independent developer looks far from glamorous.  The only exception is when you see a great developer having fun doing what they do the way they want to do.  Seeing this, even the publisher drones like myself, take strength, envy and long for something greater.

 

Remember boys and girls who write in everyday with hopes to sell that great RPG or FPS concept that lives in your heads that game ideas are like poetry.  No one will buy them from you and almost no one is interested.  Ideas are cheap and execution is everything.

Anyone read this article in GameDaily?

 

 

Uh, right.  Sometimes I have doubts about N'Gai Croal's knowledge of the game industry.  His analysis sometimes seem to lack depth and I find it dissapointing because I expect better.  For example, is it meaningful to portray an MGS in trouble without seeking out the answer to the most fundamental question: does MGS own the IP rights to Halo, PGR, and Mass Effect?  And FASA, was dissolving FASA a mark against MGS or a prudent management decision?  If MGS owns and thereby controls the IP to Halo and Bungie is still committed to making Halo titles (a sure multimillion dollar paycheck must be hard to walk away from) is there any real change at all in the status quo for Xboxland?  Is Halo 4 coming to the wii?  Do you really think so? If MGS controls the IP to PGR and Mass Effect and those studios are unable to work on those titles going forward, it strikes me that the only issue MGS faces is choosing a great developer to line up against such great IP. 

 

And I think there is a suspicious lack of balance in that N'Gai blogs about MGS' doom without even mentioning that MGS purchased Lionhead and as a result clearly controls the future of the Fable franchise with Fable 2 being a highly anticipated Xbox 360 release. What about Turn10 Studios that MGS owns and uses to develop the multi-million selling exclusive Forza racing franchise?  What about yet another JRPG Lost Odyssey by Sakaguchi that is coming to Xbox 360 courtesy of MGS?

 

Yes publishers undeniably are on a bit of an developer acqusition extravaganza these days.  Certainly the Bioware/Pandemic acquisition by EA for $860M raised more than a few eyebrows. Inside MGS we couldn't stop talking about it when it happened.  It caused as much fuss as the day Nintendo announced the real name of "The Revolution" would be "The Wii".  Anyway, $860m - those kinds of numbers always seemed to belong to companies outside the video game industry.  It was both a shock and a pleasant surprise to see such a high value deal get transacted.  Like your little baby was suddenly all growed up. 

 

Personally, I'm very happy about all these changes in our competitive landscape.  It keeps me on my toes looking for one more elusive and beautiful multi-million seller title for MGS to sign.

 

 

Lately I've started to see reports out of Japan that confirm what I have been thinking about the wii.  According to some reports, up to 60% of wii owners are just letting them collect dust.  They bought them as a novelty and haven't used them since playing wii sports.  This would explain the low attach rate of 2 per box relative to Xbox's attach rate which is more than 3x that.

 

The wii is a fun box, but is it the kind of fun you can't put down?  This is not a knock on the DS.  That is totally NOT a fad.  Is the wii the next EyeToy?

Back when I was at McKinsey, I once had the thought that McKinsey actually WAS the game of Survivor in its rawest and barest sense.  No fake contests, no confessionals, just pure out trying to outwit, outsmart, outlast.  When I headed off for the seemingly greener pastures of corporate life, I quickly relaxed when I realized that I was no longer in the vicious game of Survivor I had become used to.  It's taken me a little while but corporate life suits me to a certain degree, I won't lie.  And it struck me today what reality TV show corporate life most resembles, BIG BROTHER.  You see BB has less focus on survival and more focus on boredom, living in a fishbowl, and politics.  Unlike Survivor, BB is rife with silliness, ridiculous competitions, terrible food - JUST LIKE CORPORATE LIFE!  We fight for ridiculous luxuries like office space on a regular basis.

 

After Hollywood's demise when I was deeply considering what I wanted to do with my life, I actually considered applying for Big Brother.  I thought I would be good at it.  I mean I'm empathic, I observe, I can make alliances, plan strategy.  My wife insists that my general grouchiness when hungry would get me kicked out of the house in the first couple of weeks.  She's probably right.  Anyway, in my application, I got as far as downloading and printing out the application form.  Then I received and accepted a Microsoft offer.  And ironically, here I am, on a neverending Big Brother set of my very own anyway.

I was sleepy until my toddler vomited in her semi-sleep around midnight.  Now due to that I'm kind of cranked up.  Poor girl is sick and despite my love for her, the bed still smells foul. Vomit is vomit regardless right?  In related topics, I heard that Warren G. Harding was in the KKK.  And another mind blowing presidential factoid: Gerald Ford was a male model before becoming president.  I love the internet(s).

 

These days on reality television I am watching with religious fervor Big Brother All Stars, The Contender, and Project Runway.  In desperate moments I watch reruns of last season's America's Next Top Model.  And of course, I shan't forget my favorite TLC show Property Ladder. 

 

I'm loving the new Live Spaces though.  It looks awesome. AND BIGGER.  Though I am no longer in MSN BizDev, I will always have a warm spot for Spaces.  You guys are awesome!

Today I thought that if all one was to know about America was what was presented on TV news, you would think that 25% of the female population of the country was comprised of Asians while Asian comprised only about 1% of the male population.  It's disturbing that in news as in TV sitcoms and serials and Hollywood movies, we asian american men don't seem to exist.

So I returned from a long week at E3 filled with meetings mostly with developers.  I spent the first three days in meetings and managed to carve out about 4 hours on Friday to go down to the floor and actually see the show.  All in all the general feeling was a positive vibe to Nintendo Wii despite the terrible name and a general disappointment with what Sony showed.  The fanboys will work hard to spin it but a $600 price for the full PS3 is a lot to pay.  I was amazed at Microsoft's announcement that the next Grand Theft Auto would not be exclusive to the PS3.  That in addition to Microsoft's much lower price point and 160 games available by Christmas tells me that Sony is going to be fighting an uphill battle in the U.S. this time out.  No doubt in my mind that brand loyalty to Sony is strong and a library of backward compatible PS2 games will push many gamers to shell out the extra bucks for a PS3 but Microsoft has a much improved chance of getting all the undecideds in the market and there will be a lot of them.  Additionally, developers will have had an extra year to optimize their games to the capabilities of the Xbox 360 so even comparing Madden side to side 360 to PS3, Sony's version came out looking last gen to me.  It will take Sony a full year before their next generation games start looking as good as Xbox 360's. 

 

As fars as games are concerned, I thought Gears of War so far lived up to its promise and Crackdown looked over-the-top and fun.  I'm a huge Animal Crossing fan so of course I'm looking forward to playing Viva Pinata.  My surprise was in talking to the Bioware guys about Mass Effect, how deep and immersive that game looked. I'm a story man myself and I like branching storylines and dialogue choices in my games.  Especially compelling in that unlike the "good"/"evil" duality of KOTOR, Mass Effect is more morally ambiguous and complex for those of us that realize that real life doesn't reflect George's view of the world (Lucas and Bush I guess).

 

On the Sony side, I was impressed with the simplicity and fun of Singstar and on PS2 Okami looked great.  I also had a chance to play Nintendo's Wii and had a great deal of fun using the new controller for tennis and golf.  I tried 3 different shooter type games and found that the controller was surprisingly clumsy.  Clearly Nintendo has work to do to refine shooting and sword-fighting or the Wii will really find itself challenged.  Accuracy in those types of games is extremely important.

The first thing I heard when I shuffled into work yesterday morning was a colleague who used to work at Nintendo and now works at Microsoft outside my office door laughing while telling someone about Nintendo's new name for the Revolution.  As everyone knows, they have decided to call it the "Wii".  ok.

 

Given my employer it should be no secret that I support the Xbox 360 and want my platform of choice to destroy Sony and Nintendo in this generation.  So, of course, on one hand I am delighted that Nintendo has decided upon this moniker for its next generation console.  It is a terrible name which also happens to mean "to urinate", "small penis" and just plain "small".  It is such a terrible name in fact that it willl cost a fortune in brand advertising for Nintendo to turn it into something positive and wonderful.  I am sure Reggie is already sweating the details of how to brand "Wii" positively.  It's as if Nintendo HQ in Japan decided that they needed to cripple their next generation console out of the starting gate.

 

On the other hand, I felt sorry for Nintendo for choosing this name.  I really rather liked where Nintendo was going with their next gen console.  I was becoming anxious of the reputation that the Revolution was developing. I was feeling like maybe Nintendo was back with the magic fairy dust.  I liked that they were scaling way down on power, lowering costs, and trying to bring something new to the party.  Then their HQ in Japan chose the name "Wii" against, I am sure, the protest and better judgement of Nintendo of America.  (Come on Reggie is no fool).  I feel sorry for my friends who work at Nintendo who have to work with the friction this name creates. Good luck guys!

 

Let's face it there are bumbling innovators and enlightened innovators.  Steve Jobs at Apple is the poster boy of enlightened innovators.  The man knows what he is doing and why he is doing it.  He doesn't always succeed but his track record is impressive.  Nintendo is a great innovator too.  They are great innovators to be sure but they are bumbling innovators.  They are innovators in the way that only companies who are completely out of touch with market reality can be.  God bless Nintendo, they are different because the world looks very different from Osaka and in the end their R&D dollars may show the rest of us a way to new markets, new genres, and new game experiences. 

 

Personally, if they had asked me, I would have named their console "Nirvana" imagine how cool the Nintendo Nirvana sounds.  It means nothingness and peace and bliss and perfection.  At least, it has no negative connotations.  At least it doesn't mean "piss".  Some game industry pundits are trying to tease out the genius in this name.  Surely they say, Nintendo knows something we don't.  Surely, their decision comes from a place of wisdom.Guys, you are being too kind to Nintendo.   I can tell you that Nintendo HQ shot this name from the hip.  They chose it because it plays well in Japan and they didn't give a shit if we liked it in America or not.  So like it. If you can.

D.I.C.E. convention finished up today with some pretty interesting lectures on games and media and I ran into an acquaintance Ichiro Otobe from Square Enix and fellow McKinsey alum.  Introduced Ichirot to Prashant of MGS and also ex-Mckinsey.  We had dinner and talked about Xbox360 launch, the Japanese market, and directions in the game industry.  Had a few ideas related to work, can't discuss here. Good to run into him. 

 

Was going to work from the resort but wouldn't you know it their "business center" didn't have wireless access.  So I hopped the last shuttle for the airport and here I am 2 hours early sitting on the floor like a fucking college student waiting for a redeye.  My flight boards at 10 pm. At least I have my ipod and my laptop with FREE wireless access. 

 

Really sappy notes for myself today:

1. Read that new Jared Diamond book on civilization collapse

2. Get prepared for valentine's day - ideas????????

3. Take better care of my health

4. Get cracking on developing my IDN domains

5. Be thankful for my beautiful wife and daughter, for the health of my mom, for working in the game industry, for not completely missing the opportunity in the IDN domain market.

 

So the launch of the updated Spaces finally happened.  I am happy to have played a part in that I was the bizdev guy who made the deal with Amazon on behalf of Microsoft.  I love Karen's first implementation of this feature in the booklist.  Spaces roadmap will now call for implementation across other kinds of lists so that will be awesome to see.  If you are wondering where the link is the go become an Amazon associate, they have buried it a bit just click "Settings" see "Space Settings" and go toward the bottom and you will see the link to signing up. 

 

Everything is running a little slow post launch but I am sure they will get that corrected soon.  Enjoy the Amazon feature guys, it is so much better than my dull old booklist!

I haven't been writing much the past week because I have caught a gold fever.  Sequestered away in my messy little home office, I have been panning for gold, dot gold, in the form of IDN domain names.  Japanese ones naturally.  I have slept little and dreamt too much.  More on this sickness later, right now, I've got to get back to the mine or bed either one.

 

Here is the full story:

1. the web is currently only an english web - all addresses are in english only.

2. since most of the world doesn't speak or write english fluently, most people are pretty dissatisfied with the web. (if you actually doubt me here than you really need to sit down with yourself and realize how stupid you are)

3. microsoft, my employer, has been sadly complicit in hindering the growth of the internet by failing to enable their browser to support multi-lingual domain names for years and years (i.e. www.占い相談.jp (use Mac or FireFox browser only) which means "fortune telling consultation in japanese).

4. BUT IE 7.0 release and Vista will fix all that with full IDN support and it is coming out this year!

5. ICANN which is the body that runs the domain name system has stepped up efforts to enable the multi-lingual www using IDNs (which means International Domain Names).

6. Many many people are starting to mine the next Domain Name goldmine by signing up for these new IDN domains and claiming their stake in online real estate.

7. My focus and competency is in Japanese and I invest in both IDN.com and IDN.jp domains. I will list a few that I own below for reference.

8. I have a great registrar I use in Japan that is now running a 2 for 1 sale which I have benefitted from. (if readers are interested go to this site to find out more and sign up.  They are a small outfit but they have really gotten the job done for me with great customer service)!

 

A few of my many many great and valuable domains! 

占い相談.jp "fortune telling consultation"

歌手画像.JP "pictures of singers"

パソコンゲーム.JP "PC Games"

サッカー用品.jp "Soccer Equipment"

スキー用品.jp "Ski Equipment"

スノボー.jp "Snowboarding"

 ドイツ車.jp  and ドイツ車.com "German Car"

 

 

 

Ok I am biased because she shares my daughter's name but Mari in Tokyo writes one of the best damn blogs on the planet. I am so impressed at how pure, real, and accurate is the depiction she presents of Japan, Tokyo, and everyday life there. And of course the fact that like me she is a Love Psychedelico fan does not hurt. Read her here.