It's time for a reality check.
First, the term "immersive reality" is the kind of loathsome hype to which computer game publishers are notoriously prone. Myst and Riven are "immersive realities"? Actually, they are nothing of the kind: They are adventure games. They did not spring, like Athene, full-blown from the heads of the Miller brothers; they are the products of a long tradition of adventure-game development, starting with Lebling & Blank's Zork (Infocom), continuing through the Infocom and Scott Adams text adventures, through the Monkey Island series and other LucasArts adventure games, through to the present day.
For journalists outside the field, it may have seemed as if Myst were some kind of startlingly original eruption. Actually, if it was innovative at all, it was merely in using the multimedia capacities of CD-ROM. Myst was beautiful. It was not original.
The adventure game as a category happens, at present, to be somewhat out of style. It's far easier to get development funding for real-time strategy games, like Myth and Total Annihilation and StarCraft -- or for first-person shooters like Quake and Unreal -- than for adventure games. But that doesn't mean that adventure games are dead. Categories go through cycles in computer gaming: down today, up tomorrow.
Last year, for instance, everyone and his brother announced that they were developing "massively multiplayer virtual worlds" -- another example of loathsome hype. What they meant was graphical MUDs (Multi-User Dungeons). MUDs have been around for years; they're text-based role-playing games played over a network, with many people online and in the same "world" at the same time. They're fun, and they allow people to socialize online in a more engaging way than straightforward chat. Most traditional MUDs were nonprofit, for-fun operations run on academic computers -- although a few, like Simutronic's Gemstone, were fee-based. The sole insight of the "massively multiplayer virtual world" crowd was that if you added graphics and sound, you could probably get people to pay actual money to play a MUD.
That's what Ultima Online was -- not a staggeringly original departure, but a MUD with pretty pitchers. And a poorly designed one, too. As a result of Ultima Online's well-reported problems, most of the other projects in this direction have been quietly dropped. The graphical MUD was last year's flavor of the year; this year, its name is mud.
Riven, the sequel to Myst, has not been a sales disappointment; its sales to date actually exceed the analysts' predictions. True, it's sold far less well than Myst. That's because Myst was a staggering sales phenomenon never seen before or since -- more than 4 million copies sold at last count. People still debate why Myst did so enormously well -- I have my own pet theory -- but it's almost irrelevant. Of course Riven was not going to sell as well. Sequels never do, and the market conditions that spawned such a monster hit in Myst no longer pertain.
Incidentally, Riven was the bestselling computer game of 1997, despite the fact that it shipped only in the fourth quarter of the year and therefore was only on sale for a few months of the year. Titanic, another adventure game, was also in the top 10 for 1997. I guess that means the category is dead, right?
Let's look at the Last Express, which reportedly took $6 million to develop. If so, it's hard to see where the $6 million went. First, the graphics basically suck. Conversations and interactions with characters involve slow transitions from one static image to another; no video, no animation. The look itself is almost rotoscoped; it feels clumsy and second-rate by contrast to almost every other game on the market at present. And the adventure itself is poorly designed: I defy you to play Last Express for more than 10 minutes without dying -- unless you download some hints from the Internet before you play. Personally, I'd be ashamed to ship a game this weak with a development budget of $1 million, let alone six.
Obsidian? A better effort, here. It is at least visually interesting, and the surreal story is more engaging. But it has severe flaws, too. For one thing, the graphics are so dark it's very difficult to see almost anything in the game -- a fundamental problem for graphics designed on the Mac and transported to the PC, which always displays things more darkly. For another, the surreal nature of the game makes it difficult to keep your bearings -- and harder to solve the puzzles, since "logic" doesn't always apply. Never mind the fact that it was one of the few products Rocket Science shipped before it went under -- and that Rocket Science was notorious in the field for poor project management and throwing too much money around.
The game cost $3 million and sold 80,000 copies -- nowhere near enough to earn a return. But consider the context: Somewhere upwards of 2,000 interactive entertainment titles are published annually; typically, around 100 achieve sales of 100,000 or more. Given the game's severe flaws, 80,000 in sales is quite respectable.
The problem with Obsidian isn't that adventure gaming is dead; the problem was that the developer threw too much money at a second-rate product.
The Curse of Monkey Island was also a sales disappointment, despite being (in my opinion) one of the best games of 1997. But that alone doesn't support the argument. Bob Bates, of Legend Entertainment, one of the most accomplished designers of adventure games, said at the Computer Game Developers Conference this year that his company typically sells 100,000-150,000 copies of the adventure games they release, with overseas sales basically doubling the total number sold. These are perfectly respectable numbers; they're not enough to set the world on fire, but they are enough to keep this category chugging along very nicely, assuming you're not stupid enough to throw a $6 million development budget at an adventure game. (Most computer game titles have budgets in the $1 million-$2 million range.) And it helps, to be sure, that adventure games tend to do rather better overseas than many other gaming styles.
If adventure gaming is dead, the publishers don't seem to be aware of it. This year promises a number of high-profile, big-budget releases, including the much awaited Grim Fandango from LucasArts and Gabriel Knight 3 from Sierra Studios.
The simple fact is that people have been predicting the imminent demise of the adventure game at least since 1986, when Infocom fell on hard times and was taken over by Activision. The adventure game is not dead. It will not be dead anytime soon. It has a coterie of avid fans, and while it is not the flavor of the month today, it survives. And fashions change. Who knows but next year the pundits will cry in amazement at its revival.
The problem was never that adventure gaming is dying; the problem is that people had unrealistic expectations for adventure games based on Myst's unreproducible success.
Enough for adventure games. What of online?
According to Lindsay, the future of gaming lies in competitive online play of real-time strategy (RTS) games. He likes Bungie's Myth -- a fine game, to be sure. And RTS is the flavor of the month at the moment. Titles like StarCraft and Total Annihilation have done extremely well -- although plenty of other RTS games have sold miserably. That's absolutely normal in computer gaming; according to received wisdom, 94 percent of all computer games lose money. (I have no idea where that figure comes from, but it's been quoted all over the place -- and it's reasonable, given that 2,000 titles are published annually and maybe 100 top 100,000 units in sales.)
But let's take a closer look at online gaming. Last year, all of the business analysts who follow computer gaming announced that online was the wave of the future. Jupiter Communications claimed it would be a $1.6 billion industry by 2000. Forrester Research claimed $1.6 billion by 2001. Kagan, with amazing precision, claimed $742.8 million by 2000.
The actual results for 1997: Online gaming grossed $97 million. By comparison, the market for boxed computer gaming product was $1.8 billion domestically in 1997.
That alone should nail home the pointlessness of Lindsay's argument. The boxed game industry is big. Online is penny-ante stuff.
What is online gaming, exactly? First we have the old-line online game companies -- Kesmai, which runs Gamestorm, and Simutronics, which runs Play.Net. They got their start running titles for the old proprietary online services -- CompuServe and GEnie. They designed text-based product that relied on a share of connect-time revenues -- and they were both profitable. They both hit big problems when the Internet ballooned to its current monstrous size, when all the online services except for AOL bit the dust and when AOL went to a flat monthly fee.
Why is that a problem? Here you've designed a game that encourages people to stay online as much as possible, because you earn money for every hour they stay online. Then suddenly, AOL doesn't want to pay you by the hour, because it isn't getting paid by the hour. Instead, it wants to discourage service usage, because it gets the same $10 a month regardless of how long people stay online. Gaming stops being a big source of revenue for AOL and becomes a cost sink.
Kesmai and Simutronics have both made the transition to the Web, and run their own gaming services now. Kesmai is still bleeding money, but it's owned by News Corp. and has deep pockets. Simutronics claims to be running in the black, but it doesn't have anywhere near the capital it needs to turn itself into the kind of huge operation the analysts' numbers predict. It's an $8 million a year firm, and growing pretty fast, but that's not going to get us to a $1.6 billion industry any time soon.
Then we have the low-latency mafia: MPath, TEN, DWANGO, HEAT.NET and the like. These companies got capital by claiming they had "solved the fundamental problem of online gaming." The fundamental problem, supposedly, was latency -- the fact that it takes a while to get information over the Net. Your computer draws data off your hard drive in microseconds, but it can be a fraction of a second, or even a few seconds, before you get data from one computer on the public Internet to another.
If you're trying to play a fast-action game like Quake or Myth over the Internet, latency is a big problem. So these services all began with the notion that they'd offer a premium service -- low-latency connections -- and charge by the hour for it. They wouldn't develop original games; they'd let the boxed game publishers do games with Net-play capability, and then people would sign up for TEN or MPath to get a better gaming experience.
The problem is that the business model all these companies relied on just doesn't work. Low-latency matching has become a commodity. For one thing, companies like Bungie have set up their own systems. Bungie.net matches Myth players for free, so why would you pay someone? Few people will pay for this anymore: They've laid out their $50 for a boxed product, they don't want to pay an additional fee to play online, and they don't have to, because too many people offer the service for free.
All of the low-latency companies are scrambling for a different model. MPath is going for advertising support; others are trying a flat monthly fee; others are developing proprietary games. On Monday, DWANGO closed all its U.S. operations, although DWANGO Japan, chosen by Sega as the online carrier for Internet play using its forthcoming Dreamcast console, will continue operations. This is the first of the major low-latency carriers to bite the dust, but it won't be the last.
And then you have companies like Microsoft and Sony -- large technology companies trying to build "destination" sites for gamers like the MSN Gaming Zone or The Station@Sony.Com. They offer simple games for free (Hearts and Spades and game matching on the Zone, Wheel of Fortune Online and Jeopardy Online for the Station). They sell ad space for the free area. And then they have a fee-based area for games specifically designed for online play -- not, as with Myth, solo-play games with a Net-play version bolted on.
They aren't making any money, either.
And finally, you have the massively multiplayer virtual world crowd: Meridian 59, and Ultima Online and the forthcoming Everquest and Asheron's Call. Ultima Online claims to be operating in the black now, despite its well-publicized problems. Maybe so, but I'd be surprised if the overall project is profitable at this stage. And no one else has made this work.
But where does Myth fit in this picture?
For the boxed game manufacturers, online play has become a marketing point, another box to check off, another thing to add to your sales spiel when you call on the buyer for CompUSA. Real time, yup. 3-D, yup. Online play, yup. But the boxed game manufacturers earn no revenue from online play. They get about 50 percent of the $50 you lay out when you buy the game, and that's all the sugar they'll ever see. Yes, they want you to play the game online, and decide it's hot, and tell all your friends so they'll go out and buy the game, too -- but it costs money to support everyone who's playing the game online. Server farms and T1 lines don't come free.
So for the boxopoly, online play is an expense -- unless they unload the cost of supporting it on someone else, like MPath or the MSN Gaming Zone, as many do. Bungie.net is a nice service -- free support for Myth players -- but it's not making Bungie money. Quite the reverse.
This is no model for building an online games industry. It's a model, ultimately, for companies discouraging their customers from playing online, because supporting them costs bucks and there's no continuing revenue stream. Myth is not the harbinger of the future; rather, it's illustrative of why online gaming is screwed, and why it's not going to be that glorious $1.6 billion industry in the near future.
Nor will online-play of real-time strategy games be the mainstay of the online games industry when it does become big. The strength of online gaming is in communication -- something Lindsay recognized when he called chat "the killer app" of online. But RTS, like first-person shooters, is a fast-paced genre -- so fast that in-game chat and negotiation is virtually impossible. Pause to engage in a discussion with another player for a minute or two, and you'll find yourself hard-pressed to continue with the war. RTS as a genre was developed initially for solitaire play at home, and it is best suited to play in that mode. It can be shoehorned into Internet play, but it is not ideally suited to it. Myth and Age of Empires -- the two RTS titles best suited for Internet gaming -- are still, fundamentally, solitaire games with wires welded on. Internet gaming, when it does explode, will be based around approaches that are specifically designed to take advantage of the medium's greatest strength -- communication -- rather than compensate for its disadvantages of latency and bandwidth.
So what's the online games industry? It's the old-line online firms, holding on by the skin of their teeth. The low-latency start ups, running short of venture capital and thrashing about looking for a business model that works. The graphical MUDs, either marginally profitable or losing money. And the boxopoly, doing what it's always done, selling expensive boxes with plastic disks in them, becoming more sophisticated about their multiplayer versions, but still looking at online play mainly as a way of avoiding having to program expensive artificial-intelligence opponents -- and as yet another cost of marketing and support.
What it isn't is a booming industry. It's a struggling one -- a thousand business plans chasing venture capitalists who placed their bets on the low-latency firms, have been burned and are now a lot more interested in technology plays than entertainment.
1998 won't be the year that online gaming takes off. Nor 1999. Indeed, just as Brazil is the country of the future, and has been for more than a century, it may be that online gaming is the wave of the future -- and always will be.
Meanwhile, the much maligned adventure game -- a brief novelette's worth of story, a slim Dover paperback of puzzles and a million dollars of computer graphics -- chugs slowly along, not the main driver of the gaming industry but a nice little auxiliary engine. It's responsible for two of the top-selling games of 1997, in a list otherwise notable for the presence of huntin'-and-fishin' games and computerized versions of classic board games. Not so shabby, all things considered.
So which one's dead and which one's booming? Neither. The adventure game is puffing when it runs upstairs and worrying about its gut. And online's in the incubator, while the doctors confer in worried tones about its low birth weight. The one has years to go and miles to travel before the grave -- and the other has a lot to learn before it's a brawling adolescent.