How Emergence Changes The Business Model

December 24th, 2013 — 10:23pm

In this final post on emergence in games, I want to talk about how emergence impacts the business model.

Discovery

Emergent games are inherently social.  The more emergent a title is, the higher the volume of novel content generated by the players:  there are more surprises, more varied progress, and more opportunities for self expression.  As a result, there’s not only more to share, but more that players want to share.

Just look at The Sims:  that product has more shared content than almost any other on the planet despite being single player and lacking built in viral hooks.  Or Minecraft, a game with no marketing budget and a ridiculous amount of commerce and distribution friction.  Giving players interesting things to share — and by interesting I mean things that appeal to non-players — dramatically increases the native viral coefficient for the product and reduces the cost of discovery.

Player Life Expectancy

In previous posts I’ve noted that emergence increases the possibility space for players, which in turn increases their engagement (by reducing the pattern matching problem and increasing the likelihood of finding something interesting to play).  Greater engagement increases player life expectancy, and players who play longer are more likely to monetize.  The data Kongregate has data been sharing the last few years is particularly compelling on this point.

Development Expense

Launching a live service-based product puts you on the content creation treadmill:  you’re in a race with your players to author content faster than they can consume it.  That’s a very expensive proposition for most games if they want to maintain player engagement (it’s not enough to re-skin content or re-purpose mechanics since players will have already pattern matched the play dynamics).

In an emergent game every tiny bit of new content combines with all the old content, refreshing it and exploding the possibility space all over again.  Balance issues aside, both initial and ongoing content creation costs are small and manageable.

The Business of Play

So emergence lets us use the underlying mechanics of the game itself to drive discovery, increase player life expectancy, and reduce development expense.  That’s a much better approach to long term sustainability than optimizing LTV > CPA and trying to re-capture players in another game when they churn out.  In fact, emergence allows us to re-think core assumptions about how we make games.

Our industry is in the business of selling experiences through play.  Traditional game companies make products with a finite life, and they offer players more play by creating new products.  This approach comes with some inherent problems:

  • A short product life cycle means the threshold for success is high.  You need a large audience to return enough revenue to cover expenses, which in turn drives up customer acquisition costs.
  • It’s very difficult to find this level of repeat success, so companies use portfolio strategies to offset risk.  This raises the success mark even higher, since now a few hits have to cover a bunch of duds.
  • Milking the hits you do find can help, but sequels only take you so far (see Eidos and Tomb Raider as one of many examples).  These product lines get tired over time, due in part to the small possibility space that offers little in the way of new play.

This is what we call a hit-driven business, because if you fail to keep making hits, you die.

With emergence, you offer players more play in the same product.  There is more play in one emergent game than in 100 traditional games.  I’m being arbitrary with that ratio, but my point is that the possibility space is so large players never run out of interesting things to do.   As a result:

  • These games last forever.  A long product life cycle requires a smaller audience to generate the same return, thereby reducing customer acquisition costs and making less competitive niche genres viable.
  • With a long product life and a large possibility space, you have a lot of flexibility to adapt your product.  You take multiple shots on goal with one game, not many.  That’s less expensive than building new products until one hits.
  • Games of this type stay fresh for a very long time — there’s less risk of player attrition due to product exhaustion, and there’s no need for sequels.

You have to re-prioritize many of the metrics we use for evaluating success if you’re going to build products this way, but if you’re willing to take the long view emergence can get you out of the high risk hits business and into a safer, more sustainable model for making games.

 

The entire series on emergence can be found here:

Games Have An Attention Problem
Attention and Emergence
Emergence and the Build-Try-Fail Loop
Key Challenges Creating Emergent Games
How Emergence Changes The Business Model


38 comments »

38 Responses to “How Emergence Changes The Business Model”

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    How do you see action games (shooters especially) evolving through emergence?

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    Shooters are an interesting case, because you already have a culture of modding that evolved from players taking things into their own hands and making the games more emergent than they were originally intended (i.e. providing greater variety in environments using the basic building blocks available).

    Nevertheless, shooters have plenty of pieces to work with, from gear to environments to the players themselves. Take weapons, for example. Rather than think up a bunch of novel weapons for players to try, break down the respective attributes into parts and let the players themselves come up with interesting combinations and uses. A few discrete parts are easy to learn and the permutations can be almost endless, particularly if the behaviors associated with each part are orthogonal.

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