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Q&A: WildTangent's St. John Talks PC Distribution's Future

Q&A: WildTangent's St. John Talks PC Distribution's Future

January 21, 2008 | By Christian Nutt

January 21, 2008 | By Christian Nutt
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More: Console/PC



In 1995, WildTangent CEO -- and vocal Vista detractor Alex St. John declared that DOS was dead and games for Windows would be in -- and he was jeered.

Now, St. John says the end of the boxed retail channel for PC games may be near, with huge file sizes as the last frontier, and talks to Gamasutra about where his company WildTangent's PC content management system aims to fit in, and how he hopes to help developers become more independent.

Your titles are delivered via the WildTangent Console. Do people not play directly in the browser at all, or just directly on the console?

Alex St. John: The games that we're delivering online - well, the premium titles - aren't browser-based games. They're big executable applications; they can't run from the browser. So you can download them from your browser, and play them on your desktop. You don't need our console to do that.

The reason that you use the console is that it's basically a download manager; so if you have a lot of downloads, or big games that you want to download, it makes the delivery easier, and more reliable, and it happens in the background, and so forth. So it's a nicer way to download games, if you're playing a lot of different content -- which is what people tend to do online.

You don't need our console; you can just download them straight off the web. But if you have the console, it does make surfing a lot of games, and managing a lot of games a lot easier. It's like an Apple iTunes for games: Search, discover, organize your game collection; organize, search, discover your music collection; same thing.

Your website seems to have a lot of what would typically be considered "casual games" on there -- Diner Dash, and those sorts of things. Could you talk about the split of those types of games, and where you're sourcing these types of games?

AS: Well, it's absolutely true that the online distribution business started with a large body of developers making what you call "casual games." The interesting thing is that WildTangent was never a casual games developer. We always targeted young male gamers, arcade gamers.

Our best selling title is Fate, which is a fantasy RPG. So our studios got into the space by producing more hardcore games -- or more "enthusiast games," we call them -- and the rest of the developers targeted more Mom and puzzle games, that sort of thing.

What we found when we started online publishing, for then monetizing all this gameplay, is a readily-available catalog of what you would call casual games. So a vast majority of titles available for online distribution in these kinds of models are principally casual. But what we're finding is, we're focusing on getting all of the next generation console games online, getting the box PC titles online, and getting the next generation MMOs. So, I think you will see our catalog expand dramatically tomorrow, and over the next few months, into what we call "boy games," and traditional gaming genres.

And, certainly, we have a pretty extensive enthusiast catalog now: I think, out of 450 titles, I think we would characterize over 100 of those titles to be enthusiast, and about three 350 in the domain of casual. One of the newest titles we've just launched from Vivendi Universal is Assault Heroes, which is an Xbox 360 game as well, and also we have Battlestar Galactica.

These are classic console games, or new console games, that are clearly going into online distribution. So I think you'll see, over the next year, a lot more of enthusiast content entering this kind of channel.

Those are Xbox Live Arcade titles on the console side; they're not full packaged games. When it comes to large package games, and chunking them up for distribution over WildTangent, how does that work? Do you do it by time? And you said people pay to play it for a certain duration, or is it that thing where they can play as long as they want, as long as they have--

AS: When you're inventing new business models, it's very difficult to find a business model that works well for everybody. The consumer's got to love it; the developer's got to love it; the publishing partners have to love it. And what we found with WildCoins is that they're a really good solution for that.

Because once we've calculated the per-session value of the gameplay -- pick a game, say using something crazy, like Halo 3. If that game's sixty bucks, and it has a hundred value sessions -- or an average of a hundred sessions -- then you know it's sixty cents a session. That's three tokens; seventy-five cents is nothing to people.

So even your highest, most expensive premium-value games are easily converted to a low-cost session model. And then once you know that value, time doesn't matter, and content limits don't matter. Why do I care how much time you're spending playing Halo, if I know that on average you're going to play a hundred times? Right?

I see. Have you conducted research into, say: Someone who buys Halo at the store. Have you done any research into when they go home and what their play pattern is?

AS: Well, we use Halo as an example of the archetypal super triple-A title, so no, not for Halo. But for PC titles, we do. And the math says that across 450 titles from 180 developers, people's session play behavior, that a game holds people's interest for about two to three months on average, and the session of games, on average, is between 60 and 80 sessions, is what a typical game will generate.

Now, you find that that math holds true, even for the triple-A premium titles. The thing that makes online delivery and monetization for the big games hard is not that there isn't a market for them, and it's not that the advertisers wouldn't make those games absolutely from the heartbeat; it's that for a game that is ten gigabytes in size, the fall-off rate for reliable delivery is fairly high.

You lose, for an average game, an average of 70% of the audience for every five minutes that a game has to download. And so, that's why things like the WildTangent Console are absolutely necessary. Because people won't wait that long for their browser to be locked up, engaged in a long download that takes hours of their time. But WildTangent Console, you click a download, it happens in the background, it dings when it arrives, and you can play other games while you're waiting.

So you need very good compression and delivery technologies to make it practical to get those games delivered online. But there's absolutely a market for it, and the publishers for those games are absolutely willing to put them into electronic distribution. Because of the size, they just don't necessarily perform economically as well as smaller, lighter games do, because they have less friction for delivery.

Is it hard to serve the multiple audiences that might be coming to your console, with one console? For example, anyone can use iTunes because they bring their music in, but someone might come to you for Diner Dash and see that some FPS is available, and will say, "This isn't for me," and vice-versa.

AS: Yes. We are launching a new download console for enthusiast gamers this year, that will show just enthusiast titles, and it'll support gamepads. So, right now we put all the content into one general consumer bucket from one UI.

And from the point of view of just designing a great UI that makes it easy to discover games? One console works great for that. However, if you want the consumption experience to be more console-like -- like the TV console-like -- we're coming up with a new UI for the console that allows people who are more "boy gamers" looking for a certain type of game experience, to consume and discover content that way.

It's more branding than technology, I would think.

AS: It's branding, and it's presentation. So you will see us providing better presentations for different gaming demographics, like enthusiasts, but fundamentally the technology is the same -- a game is just a big application you have to deliver.

You talked about working with Vivendi to bring some of their games to WildTangent, and you also talked about how this is somewhat of an alternative to traditional publishing, but have you been working with any developers of large-scale projects, to be able to deliver them?

AS: Yes. We're talking with a number of what you would consider "famous, big-name developers" for taking their content online. I think you're going to find some big-name titles released for pure online distribution -- as well as boxed titles released very quickly -- in the next year or so.

So you're talking about games that have never come out before in a box on a shelf.

AS: That's correct.

And these would be what you would consider to be a full 'game experience' of a traditional format.

AS: You know, I was the guy in 1995 who stood in front of the game development community and said: "DOS is dead. It's never going to be a gaming platform again; everyone's going to move to Windows." I got jeered! It was incredible at the time, because that seemed like just a crazy suggestion, that everyone would make games for Windows.

"Out of your mind! Windows is a disaster for making games!" And so I've been doing this a long time now, and I think the only thing to say is that, for the PC business, it may be that the boxed retail channel is virtually dead -- or is about to be dead -- and that almost all PC titles within the next five years will move to online distribution models. The economics behind doing that are so overwhelmingly powerful that it's hard to imagine much of the traditional boxed space business being left.

Console will take longer, for a variety of reasons, but I think it's fair to say that if you look at the PC game business: In '99, the PC game business was a two billion dollar software business; it had shrunk to less than a billion dollars by 2005, with two-point-two billion dollars moving toward subscription and advertising models. So World of Warcraft now generates more money in subscription revenues than all boxed PC sales combined!

And once that's happened to the market, you realize that there's no stopping that transition; it's going to go right up to the net. So all the Mah-Jongg and Bicycle, everything that you and I used to play that was in a box, that was called 'casual', it's all vanished from the shelf space.

The only thing that's left is games so huge in size, so vast, that they're still hard to deliver to most people because of bandwidth limitations. And that problem is changing fast. And once it does, I think those last, vestigial boxes will disappear in the PC space.

Now, here's the difference: Ordinarily I'd be paying for [playing a game.] A game might be four tokens to play, but here, I can play for free. There's the ad supporting it, from Honda. The game's in the background, installing itself automatically. Any time I want to, I can click past the ad and play.

You actually don't have to watch the whole ad?

AS: As long as the game's ready to play, then off you go. And that ad unit alone, even without watching it, pays for that session, on average. It makes more money than trying to charge you cash for it. So if you'll spend a buck, that's great, but an advertiser will pay more than you will to play that game, on average.

So in your business model, is there a way for the person to 'own' a game?

AS: Yeah, you can just buy it. And you just own it, and it's in your account. We send you the discs! We custom-burn the DVDs for you, so just like you can custom-burn your own music CDs, you can custom-burn your own game CDs with us. So we ship thousands of CDs a day of people custom-burning game discs. It's just a better model. So if this game did not work on this machine, it wouldn't even be presented on the console; it would check the hardware...

That's good, because I heard a statistic this year -- and I can't remember off the top of my head who said it, but -- the top 50 PC games in 2006, I believe, had 42 different sets of recommended system requirements. Saying, basically, it's very difficult to get people to even comprehend...

AS: It's ridiculous. So, what happens is, there are two interesting things that have changed: that very, very few games actually exceed the system requirements of any new PC. Any new PC that you buy has better graphics capabilities than an Xbox 360, or any next generation console, for the most part. So, most games will work fine on all new machines shipping.

In fact, most games will work well on almost any machine that shipped in the last three or four years. Second: What the console will do is it detects system requirements, and will either mark games as incompatible and tell you what you need, or not even present them in the catalog if they're not...

Is that the current download console, or just the new one?

AS: The current console is everything I just described.

You're working both with publishers to present their pre-existing content in a new way, though your console, but you said you're also working with developers to present original games. Doing original games that are just going to be delivered through WildTangent? Or are they also going to be available on, say, Xbox Live?

AS: They'll be available everywhere. So, a beautiful thing that's happened is that publishers, developers, can distribute their own content now. So they can go make a great game, and they can do their own deals for online publishing; they can put it on their own website, to their own audience, and monetize it. They can do their own distribution deals.

The only thing that a developer needs these days is the initial capital and resources to build the game. All the marketing and distribution that comes from a traditional publisher, they don't necessarily need. Really, what a publisher is, is going to be a VC for big, expensive titles.

So a publisher's role is going to be relegated to the big, high production value stuff. There's going to be a whole market created by smaller developers, where they have the resources to self-fund medium production games, and they won't need traditional boxes -- they'll be online, without them.

And they'll be able to distribute them through new business models. And companies like WildTangent will enable them. Because we'll provide the channel, the monetization, the advertising revenue that makes the commercial part of the game. All they have to do is make a great game, and I can probably make it money in distribution. So there's going to be a tremendous resurgence of game developers being able to be independent companies, producing great content, and feeding themselves. And I think that's a really exciting trend in the market.

The interesting thing, from a consumer point of view, is being able to play all these premium games for free, or a very small amount of currency, in a flexible way. And the cool thing for developers is that they'll have a much more independent access to their own revenue channels, and be able to monetize their own games with online distribution. And because companies like WildTangent exist to power them with currency and advertising, we may help make them independent.


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