KH Business Solutions

Like all industries, the MMO game industry follows the business cycle of innovation, saturation and maturation. There was a grand period from about 1997 until 2004 when new MMOs were released with consistent improvement and innovation driving the industry growth. This innovation peaked with World of Warcraft in 2004. As WoW made ever more money, many other games (too many to count) were released as essentially WoW clones with a slightly different story, marginally different graphics, and slight twists in the gameplay.

Many of these newer games did make money, but it was as a result of the growth of the MMO gaming audience, characteristic of a new industry.

This changed in 2008,  as it became obvious that the innovation saturation point has been definitively reached. Games started collapsing on themselves as they lost (or failed to reach) the required critical mass for success. The much-hyped Tabula Rasa was shutdown after a very short life. Other games like The Matrix Online and Shadowbane are also belly-up and formerly subscription-based games like Dungeons and Dragons Online are changing to a Free-to-Play revenue model.

As 2009 progresses, I expect to see a number of other shutdowns of large games along with even more smaller games.

So what is the future of online gaming?

Here is what I as the future of successful MMO games:

1. Focus on the casual gamer. Many people are completely engrossed in their games, playing many hours each day on them. But there are many times more people who would prefer to play a game for a short time when they get a chance. The potential audience is much larger when a game can be enjoyed for as little as 15-30 minutes and does not require daily play.
2. Free-to-Play. Casual gamers are not willing to pay a monthly subscription fee. Many of them may go for a month or two playing very little or without playing at all. Additionally, people are reducing their monthly expenses and game subscriptions are one of the first to go. When a game can be enjoyed for free with in-game enhancements purchased when they feel the need (or have the cash), it opens itself to a much larger audience. MMO games require a critical mass of people. People have more fun in an MMO game when it has a lot of people playing and will be more interested in purchasing from the cash shop when they are having fun. This means that even players who never pay a dime for an MMO still bring value to the game by attracting and retaining paying players.
3. Niche games with unique gameplay. Not everyone wants to play WoW. Not everyone wants to play an MMO that features characters of different races and standard classes running around a fantasy (or sci-fi) world killing beasts for loot. Many people love this type of game, but not everyone. I see games with unique gameplay coming out of this industry shake-down. After playing games for 10 years, they all start to look and act the same. It is time that different ways to play are developed.

These changes will lead to a time of new innovation and a new business cycle. It will cause a lot of new startup companies to be created, as true innovation is very rare in large established companies due to shareholder demands of consistent profits. Many of these will fail, but there will be a couple that will rise above the ranks and be able to produce free-to-play niche MMO games. Look at the Facebook and MySpace games that have come out in the last year.

I see successful MMOs being produced by companies that create a game development platform allowing them to produce many smaller games that will, together, make the companies successful (Zynga is a good example).

It will be very interesting to see and play these new games.

One of the top things to understand about Chinese culture is the importance of “face.” Though reputation, or “face,” is important in the US, it is much more important to Chinese. For example, if a project is experiencing problems (as they sometimes do), a Chinese developer might hide the extent of the challenge to save face. They might say that there is a small delay, but not explain the extent (which might be long) or the reason for the delay in detail.

There are a couple ways to handle such things. One is to become very authoritarian and demand detailed explanations for the delay. Shaming them can be an effective motivator if you need them to work late, work weekends, etc. to get the project back on track, as it can reduce their face which they want to avoid.

Another way is to handle it more delicately by emphasizing how you’re working together with the Chinese developers to please someone else, the client. You can remind them how you both need to look good to the client and that any delays in the project need to be discussed. That will allow you to explain to the client in a way that saves the most face for everyone.

There are two types of face in Chinese culture: mianzi and lian. Mianzi refers to the prestige and authority a person is viewed by others as having. Lian is the view society has of a person’s integrity and moral character.

For example, to avoid causing a loss of mianzi, Chinese will avoid bringing up embarrassing facts in public. Sometimes those embarrassing facts might have an influence on the progress of a project, so the developers will avoid mentioning them. If you sense that something like this might be happening, you should talk privately to one of them and tell them how it is important for the project’s success that you know.

To illustrate the role of mianzi in Chinese culture, there was a big mistake made by the development team in a project we worked on. The client asked for a specific database software to be used, but instead different software was used. The Chinese project manager knew how it was supposed to be done and thought it was done correctly a few weeks earlier, so he was surprised when he found out it was not done correctly. He told me and the client about the problem and I wanted to know which developer was responsible for this so I could better understand how the mistake occurred. This would help us avoid it in the future, along with giving me a chance to reprimand the developer, as I would my American developers.

To protect the developer’s mianzi, the Chinese project manager did not reveal his or her name. He instead emphasized that the individual(s) who caused the problem are not important, but they will work together to fix it as quickly as possible.

This incident also demonstrates the collective group mindset that the Chinese culture has, where actions are seen as being done by a group, rather than by individuals. This is a topic I will cover more in the future.

When difficulties occur, as they do in any software development project, there is no single best response that will fit all situations and development companies. Sometimes an approach that combines the authoritarian and the delicate approaches might be best. In general, I’ve found it better to try a delicate and harmonious approach first, but the culture of some companies require a more direct approach.

Saving face is one of the primary motivators in Chinese culture. Working with someone and allowing them to save or gain face will make them a close ally in completing successful projects. Keeping this in mind when managing or otherwise working with Chinese software developers will help them work with or for you as a harmonious counterpart to your American staff.

The US is both fascinated and fearful of China. We see it as a source of unlimited labor, while we hear of rampant intellectual piracy, fake infant formula, lead paint in children’s toys, and other horrors. Americans want to tap into that labor pool and get our products (both physical and intellectual) made while avoiding all the pitfalls.

This can be done, but it requires a few things on our part.

1. We must recognise and respect that China has a different culture than America or Europe.
2. Though some Chinese try to put out bad and cheaply made products, there are many other Chinese people who pride themselves on doing good work.
3. We cannot think of China as an American colony, a source of cheap labor that we can exploit for our benefit without regard to the Chinese people. Many other nations, including Britain and Japan, have tried to do this and have seen its consequences.
4. Constant good communication is critical. Misunderstandings happen within American companies, so the chance of misunderstanding increases when working with people in another culture.

I will write more about these points and many other aspects of creating software in China in this blog. Stay tuned.