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Precious Comments By Game Industry Executives, #19 In A Series

“Zynga is not a very subtle company, are they?” — anonymous

Eric Schiermeyer, a co-founder of Zynga, an online game company and maker of huge hits like FarmVille, has said he has helped addict millions of people to dopamine, a neurochemical that has been shown to be released by pleasurable activities, including video game playing, but also is understood to play a major role in the cycle of addiction.

But what he said he believed was that people already craved dopamine and that Silicon Valley was no more responsible for creating irresistible technologies than, say, fast-food restaurants were responsible for making food with such wide appeal.

“They’d say: ‘Do we have any responsibility for the fact people are getting fat?’ Most people would say ‘no,’ ” said Mr. Schiermeyer. He added: “Given that we’re human, we already want dopamine.”

Eric Schiermeyer
Part Of The Problem, Zynga
From a New York Times article about addictive technology

And Now, The Finger Pointing

Boston Magazine has a recap of the 38 Studios meltdown, cast as some kind of dinner theatre, with Curt Schilling the amiable and clueless family patriarch who just holds his head in his hands sadly at a kid’s softball game wondering

and the just and the unjust alike were trapped in the onslaught of taxpayer funding

why his company blew up.

No really. That’s not from the dinner theatre metaphor, that’s from the actual story.

Back at the softball field in Dracut, Schilling is still having trouble fathoming what happened. “I’ll find myself in the middle of the day, just aching,” he says. He concedes that he’d promised his employees 60 days’ warning if the money ever looked like it was going to run out, but argues that the situation was moving too fast for him to keep sending updates. “It wasn’t that I didn’t want to tell anyone,” he says, “it’s I didn’t know what to say.”

Note to Curt: being in that position is why your job title was Chairman and not, say, Director of Responsibility-Free Fun Stuff.

No new actual material facts in the piece, but lots and lots of context: the author of the infamous “it is in the company’s interests that we fire everyone immediately, get out” letter turns out to be Curt’s uncle, for example. And surprisingly a lot of ex-38 Studios execs talked to the author, on and off the record, mainly to point out that Curt Schilling did not have the most realistic expectations. (You don’t say.)

The most damning part, however, came from Hamlet-On-The-Softball-Pitch himself:

“The game wasn’t fun,” he says, unprompted, beside the softball field. “It was my biggest gripe for probably the past eight to 12 months.” Visually, Copernicus was stunning, but the actual things you could do in the game weren’t engaging enough. The combat aspects especially lagged. Schilling — who never wavered in his belief that the game would be great — says the MMO was improving, but after six years, it still wasn’t there. When Schilling walked around during lunch hour, he says, nobody was playing Copernicus’s internal demos. They were all on some other game.

Most outside the industry will read that and think “well, damn. It wasn’t fun, they failed!”

Most inside the industry will read that and think that Curt Schilling knows so little about making games that he actually expects people who work on a game for 12 hours a day to play it – even though it’s unfinished and most projects don’t actually become fun until the last sprint of development – on their one free non-working hour.

The Week The Music Died

It’s hard to overstate how difficult this week was for what remains of the MMO industry.

First off,  Bioware took an axe to the Old Republic team. No official numbers on how many were let go, but most people I’ve talked to put the total bloodletting at somewhere in the neighborhood 0f 200 people… 40% of the studio.  This after EA went through contortion after contortion trying to first boost then mask subscriber numbers (at one point giving most players a free month of time) finally coming out and saying that the most expensive game ever produced (my initial estimate of $150m  was at least $50m low) wasn’t really that important and why are you people so interested in it anyway? So, a retrenchment of the team, which never really underwent the usual post-launch pruning, was inevitable.

You’d think the loss of 40% of the team working on the highest profile MMO release of the year would be hard to top, but hand it to Curt Schilling, he stepped up to the plate without fanfare, knocked it out of the park, into the bleachers, and  straight into the record books with a company explosion so painfully drawn out and mismanaged that it may have poisoned the well for anyone ever considering investing in an MMO company. Lest you think I’m exaggerating, let me direct you to a press conference by the esteemed Governor of Rhode Island trying to explain the mystery of role playing game sell-through, team burn rate, and why those games are so sexy and violent, anyway. Or just check any media source in Rhode Island or Massachusetts, with people with no connection to gaming other than, you know, paying taxes, furious that they, through the state, apparently now are on the hook for $90 million dollars to pay, among other things, a cool $1.4 million to R. A. Salvatore to come up with synonyms for the word “drow”. (At least, until the company collapsed, at which point Salvatore, as a stakeholder along with Rhode Island taxpayers, lost any hope of being paid.) Coincidentally, that is also close to what 38 Studios paid the state of Rhode Island this month in lieu of paying the people who worked there.

While all this was happening, 38Studios employees were kept completely in the dark. Their first warning was when payroll checks stopped showing up in their bank accounts. The final warning was a dismissal letter showing all the compassion of Ayn Rand towards welfare recipients.

And that’s just what’s on the public record so far. The rumors that have been surrounding this total collapse/clusterbomb have made the above look like a case study in business management. Insurance plans unpaid for months (and literally uncovered by pregnant women informed by their doctor that their insurance expired) ensuring that the newly laid off employees are disqualified for COBRA and liable for pre-existing conditions with new plans, relocation/home sales packages so badly mismanaged that ‘beneficiaries’ turned out to be liable for two mortgages and back taxes due to lack of payment, the list goes on.

Through all this, the 38Studios employees have shown an unbelievable loyalty to Curt Schilling himself. From everything I’ve heard, publicly and privately, Curt Schilling is a great guy, generous to a fault, and a gamer way back before it was ever considered cool much less a path to wealth, and has sunk over $30m of his own cash into the company.

However, Schilling is also a very wealthy man (over $114m over the length of his career), and a political conservative who has consistently demanded that government not be involved in the private sphere, except where he is involved. There is a word for that and it isn’t “great” or “generous”, it is “ragingly hypocritical“. But even beyond that, Schilling failed the 400 people who depended on him.

I’m told that most of the people affected by the Old Republic layoffs had plenty of warning what was about to happen, specifically because during a company meeting Greg Zeschuk, one of Bioware’s founders and the studio head, was honest and forthright about the challenges facing the company and what his people could probably expect. When faced with the prospect of failure, he stepped up and said hard things that no doubt hurt him deeply and personally, because his people were owed that much.

Schilling did not. Instead he continued to squander what little operating capital the company had left to it trying to continue drawing public taxpayer money into what by that point could almost be considered a Ponzi scheme, while keeping the vast majority of his employees completely unaware of how final the situation was.

Loyalty matters, but character also matters. And in this case, Schilling’s failure of character has damaged an industry, to the point where it may be years before we see another investment in MMOs. I am loathe to link to anything said by the possibly sentient Michael Pachter, but even a stopped watch is right twice a day. The MMO industry in general is in deep trouble this year, and Schilling this month pile-drived it even further into the concrete.

I have nothing but sympathy for the now-unemployed former colleagues of Schilling at 38, and I know from my own time working in the trenches that many of them will violently object to much of what I have said here. But I think the direction that our industry is going – the incredible amount of money wasted by EA on what was essentially a roll of the dice that came up 2 and 3, and the even more incredible display of massive hubris and utter incompetence on the part of Schilling and his management team, is killing the very concept of massively multiplayer gaming.

Addendum: Steve “Moorgard” Danuser, creative director and the self-described “Czar of Amalur” has a different perspective: it’s all the Governor’s fault.

We just needed a little more help, and we thought the state would have our backs on that,” said Steve Danuser, one of the creative minds at Curt Schillings 38 Studios.  “We thought the governor was an ally. It didn’t turn out that way.”

“We’ve really loved it here…we bought homes, we’ve helped the businesses in the area,” said Danuser.

“The governor has turned his back on a lot of taxpaying Rhode Island citizens who work here and it’s unfortunate because we had a lot of great people who wanted to contribute to Rhode Island and now they can’t.”

The “Czar of Amalur” says he has a few questions for the governor.

“Why did you do it? Why didn’t you help us?” asked Danuser. “He (the governor) said a lot of things, he’s broken confidentiality. He’s done a lot of things to materially hurt us and I don’t understand it.”

My comment on the above: Um.

Old Republic Has More Subscribers Than You Do (Unless Your Name Is Bobby Kotick)

Industry analysts expressed surprise at this news

It’s official: per CFO Eric Brown, during an earnings conference call, SWTOR is making a lot of money, with 1.7m subscribers (which Brown went to an unusual effort to quantify correctly as a mix of paying customers and customers with billing information entered but still on free trial) and over 2m sell-through (copies sold to actual customers as opposed to sitting on store shelves).

Brown said EA was actually able to add a lot more users on a per-server basis, thanks to some technical improvements. He also noted that about 40% of the units of the game sold during the quarter went over the company’s Origin digital-distribution channel, which is not tracked by market researchers such as NPD.

“This has been the most rapid scaling of an MMO ever, based on our research,” Brown commented.

EA stock rose sharply as a result, pleasing Hutts everywhere. SWTOR is now firmly in place as the #2 MMO, in both earnings and subscribers. It’s now up to Bioware to follow through on that with retention.