WildTangent's Alex St John

If you believe all those things there's an interesting opportunity to take advantage of that, because in the wake of the console business dying and the gaming business moving online, there's the opportunity... The opportunity if you're the developer is to learn how to make those kinds of games because the traditional publishing world for developers isn't a very exciting place. You get to be a wage slave for a large publisher and work on large teams for projects you don't really control and you don't get rich easily doing that.

The thing that was great about the early days of the game industry was that you could get some software and a team of motivated people, break out a game and keep them independent and the internet has re-enabled that opportunity for a lot of people. It's exciting to go "Hey, you know, the market's going to change dramatically because of all this online content and all of you folks have the opportunity to build stand-alone gaming businesses."

The thing that's interesting about the position WildTangent has in the market in the US especially is that with the transition online, the main barrier to delivering a game for the PC is that it's an unstable environment for a new game. Games that were shipped six months ago weren't tested on this Dell PC and that's always been a barrier to prove the PC business, as has been system compatibility.

WildTangent runs the game publishing service in the US for every major PC OEM, so if you buy a new PC from HP, Dell, Compaq, Toshiba, Gateway this Christmas in the US, they'll come with a Wild Tangent games console on it, and you can think of a Wild Tangent games console as being an Apple iTunes for games.

It's a download client that allows people to search and discover games content. There are hundreds of games from all sorts of different publishers: MMOs, flash games, downloadable games, it's got everything in it, and everything on any given PC that you find it on has been tested for those PCs.

So if I go into a game like Battlestar Galactica, on the info page [it says] "This game is compatible with this PC" and I know that before I even download and play it. This technology solves that basic problem with PCs, as in going "Yeah, PCs have loads of thermometer configurations [but] how do you make sure the content and the experience works reliably?"

If I had been a consumer buying this game in the box for USD 20 in retail, I could look at the edge of the box and get a list of system requirements and I'd have to know whether the system requirements for my machine met those. Now you and I are gamers, we know that, but most people don't know that and so they often have the disappointing experience of taking the box home and then... it doesn't work, so they don't have the money and they're pissed off. In this environment they haven't even downloaded the game, they've spent no money and they know immediately whether it's going to work or not.

Yes.

It's just going to be the content change because the business model is so different that persuading the guys who have a huge investment to making console games to put their console games out in a very different business model will take some time - so there is a transition in the market for the big publishers.

They're willing to do it, we're getting the deals but what they'll say is "This makes us really nervous, can we just delay putting it there a little bit so we see what happens, until the games have been out for three months there?" There'll be a transition for the market, for the traditional publishers to see this channel as being comparable or competitive to putting a game on a Wii or an Xbox.

The distribution is in place, the business model is in place, the media sales are in place, it's really going to be, what someone's going to ask is, show me the games that I hear are really exciting over there, here as well. So that is what is going to take a little ramp up, is getting all the content in.

I think that it will probably take a couple of years before we really get to the point where everything's out and people go "Yeah, this is the equivalent or a very good alternative channel".

A large portion of the online world are people who are playing to relax, they're not young, male gamers like the average arcade gamer was. When they survey women, they say "I play to relax; not to get all wound up and tense like guys do". So the business model is different online because what we want to do is not actually to put pressure on the users through the currency system, we want to say "You know what? If you pay a token or two tokens, it's all you can eat. You can be satisfied, play all you like."

The game's job is to drive the user through scores and the game play is to drive people's intensity level. So, you won't necessarily find more arcade-like game design where people are designed to pump quarters in because the business model doesn't work that way. What you'll find is that content will have to have a much higher replay value than traditional boxed games... The game needs to be highly addictive, that means this play needs to really hook you and keep you playing.

So games need to be designed to have much higher addiction value and much higher replay value, whereas a boxed game needs to have more brand value, it's got to have Spiderman or the Hulk on the cover to sell it. Online you need to move to games that have a tendency to generate a lot more "Well I just can't stop playing it" and so there is a difference in game design.

The analogy is the difference between making Titanic the movie and the Dave Letterman TV show. Both of them, on video content, are usually popular but they're addictive and compelling in very different ways because they're designed for different business models. Dave Letterman's designed to get you to turn him on every night at 11pm for two hours every day for 365 days. Titanic was designed to make you pay USD 10 for a movie ticket and sit you in the theatre for three hours with a crowd of people and then that's the end of its business model.

It's a very different value proposition that they formulate to, so when you take Titanic the movie and put it into the television medium, it's a little bit of an unnatural act and that's fair, we recognise that. It's not that it doesn't have a place, clearly HBO in the US, people have pay-per-view to watch movies, but that's not the dominant media. So - will consoles have a place in the online world, will they be able to make money? Yes. Will the games stay the same in that environment? No they will ultimately be displaced by the MMO, which have a higher addiction and replay value.

Piracy is a really interesting subject - console gamers spend more time playing PC games but they spend one third of the money on the PC. One reason for that is that the content is free on the PC because it's easily pirated but that's another way of saying that the business model on the PC has to be different. For example: if the games were free, sponsored by advertising, then what would the value be to a pirate in pirating it?

The business model is wrong and consumers are finding a way around it... It tells you that you need much greater security on the PC but that would contradict the free market and openness of the PC platform, and I think that's one of the strengths of the PC, or you've got to say "The business model doesn't work". The people sending those letters are blaming the consumer for getting their media for free in an open environment rather than saying "Hey our business model's f*cked, come up with a better one".