Scratching the Surface

Origin created worlds, from the battle-ravaged world of Wing Commander to the spooky space station of System Shock to the involving fantasy world of Ultima. The swift, merciless death of Origin around the turn of the century left the studio a hollow shell of its once great self. Quasi-mythical founders Robert and Richard Garriott were left to wander the earth, like Caine from Kung Fu. The wandering years took them to their own company and, eventually, to NCsoft’s Austin operations, where they preside over the mysterious Tabula Rasa and NC’s other titles. Our writers caught up with the brothers Garriott at a recent conference, seeking insight into the past, present, and future of the MMOG world.

Richard opened with a critique of the present, saying, “You know, if you look at the online games that have come out to date, and it’s almost been ten years since Ultima Online … Frankly, the fundamental game design structure of most that have come to pass is pretty similar to what I consider first generation thinking. There’s been very few groups that have really published a game successfully and then gone on to create a new game having learned the lessons of their first game, if you know what I mean.

“We’ve really only just begun to scratch the surface of what online games can become,” he said, adding, “Most online games have the same fundamental design premise, in contrast to solo games where you get to be the one great hero that saves the world and everything about the game is there to make you believe that. Online games, on the other hand, your life is pretty average,” echoing the famous lament of Star Wars Galaxies players who wanted to be Luke Skywalker, but instead found themselves a nameless farmer on Tatooine. “You know, half the people are higher level than you; half of them are lower level than you.”

The typical game design is still the same as it has always been for first generation MMOGs. “You tend to grind levels; it’s really your whole goal,” he says, capturing the experience in just a few words. “Your play cycle paradigm goes something like this: Your first mission is to go out and fight level one monsters. You go out there to the fields where level one monsters continually respawn and you farm them for XP and a little more weapons or equipment. You go back to town and cash it in and you get sent out to the level two creatures, and then you just repeat this process. That, interestingly, is already compelling enough to have brought in millions of people into the online games race.”

While some are content to rest on that particular design until the end of time, you can sense a bit of dissatisfaction in Lord British when he says, “But, fundamentally, I think it’s not particularly elegant.” Looking to the future, and including his own Tabula Rasa, he sees developers learning from and expanding beyond this model. He continues, “Most of the developers who have built one successful online game realize the error of their ways and now have moved on and said, ‘Okay, what can we do that’s bigger and better than that?’ And so some of these answers, which to me should sound pretty straightforward these days, are things like, as opposed to demanding a level grind where the only way you can feel successful is to be doing it for 12 hours a day, we’ve got to create games where people can have 30 minute play cycles. You get in, you get out, and [you] don’t feel that while [you’re] out, [your] friends are going to level beyond [you] to a point where you can’t even play together anymore.”

The problem with the first-generation model of gameplay is it’s, well, kind of boring. Richard sums it up as, “[You’re] going out in a field and farming/grinding on the same monsters that respawn in the same area again, and when you’re farming, you’re just standing in front of each other seeing who does the most damage over time, if you’ve heard that phrase at all. Most games now even provide you the calculated damage over time, which is horrible. It’s indicative of the fact that the whole point in this game is just to raise that one number, and then you go close your eyes and mash the buttons some more.” In summation, he says, “Horrible, horrible gameplay.”

Not only is the existing model too boring, the ideas on what the genre is – or could be – are frustratingly limited. “There’s the phrase ‘massively multiplayer online role-playing game and sometimes the word persistent thrown in there. If you add all that up, that really narrows the interpretation of what online games can be.” That definition is “way too narrow.” Rather than thinking of “online” as a particular genre, like sports or shooters, “online” should be “a technology. It is the technology to, instead of having AI characters in there to deal with, you have other real people to deal with, and whether you’re doing it socially, or you’re doing it on the same team, or you’re doing it competitively, that’s a tool by which you can now provide entertainment.”

In the future, Richard thinks designers will finally take the step of saying, “Let’s not worry about the model that UO, EQ and WoW have repeated and solidified and refined. How can we now provide these experiences that people will really appreciate and enjoy more?” Is finding those models difficult? “I really don’t think they’re that hard,” he answers, “I just think people haven’t had a chance to turn to them yet.”

While Richard is “Lord British,” the game designer, his brother Robert is the business-focused President of NCsoft-North America. Robert puts it succinctly, “He talks about changing the future in terms of game design. My standpoint is when I look at it in terms of, you know, genre and business model, and where I think companies are going to be taking this.

“Two things. One is, the only successful online game anywhere in the world was roleplaying, but the other is that until recently, there were no companies with more than one online roleplaying game that were successful. Our belief was that: One, we have to really expand the genres to grow the market. The other is that there’s a value to having multiple products within one portfolio.

“And so you might ask how is that going to change things,” he says, beating the question and continuing on. “That’s sort of the impetus behind what we’ve been doing, in terms of trying to develop a whole portfolio of supporting and different products. A long time ago, we looked at the business, and we said churn is the biggest expense for our business, just like a telephone business.” Churn is industry lingo for turnover rate, the number of people who leave a game each month. “If you switch your [phone] carrier, it’s a giant cost and lots of people churn very rapidly. And in the online game space, basically, people churn every ten months.

“So you play it, you like it, you stay for ten months, and then you leave,” he says. Rather than fighting what they saw as an obvious industry trend, NCsoft decided to go a different way and embrace it. “As games become more casual, churn rates go up. So, we knew the churn rates were going up, so we started saying, well, how can we make churn our friend? Because there’s nothing we can really do to stop the fact that churn is going up. Interestingly, if you’re a single product company, you can never make churn your friend,” because people leaving your one cash cow undermines your entire company.

NCsoft’s strategy of diversification not only made the detrimental force of churn into a friend, it also allows them to think of the 800 pound gorilla of the industry as a friend. As Robert said when the name came up, “We view World of Warcraft as a great product for us, and the reason is, they bring a lot of people into this game space, and every ten months, they’re going to churn onto something else. In fact, every subscriber that they have today is probably different, for the most part, than the ones they had originally.” Departing players may leave the genre entirely if the experience was bad, or they may stick around in the online gaming space if they had a good experience. Robert sums up NCsoft’s dilemma as, “We know that churn to Blizzard is bad, because if they lose somebody, they lose somebody. And if that rate goes up, they lose more people. How can we change that?”

The answer proved to be fairly simple. “We felt we’d put a portfolio of products together, which we’ve been doing,” he says, getting into the secret of turning churn lead into subscriber gold. “If we incentivize and then somehow change the probability slightly, that instead of someone stopping playing Lineage and then going to EverQuest, the probability is slightly different that they might go to City of Heroes. And how can I change that probability?

“I can make it easy for people to play within my portfolio,” he says, and details a very simple strategy of working with his customers, rather than trying to entrap them in a single game. “I can give them free trials. I can download things automatically to their hard drive. I can send them advertising from the portfolio. I can send them clips automatically within the portfolio. There’s a whole lot of things that I can do to support a portfolio of products that slightly changes the probability they will stay with us.” Retention is a numbers game. Influence the odds just a few points and you come up big over time. “If you look at the probabilities, if I have changed this, just slightly, churn becomes my friend. As a matter of fact, the higher the churn rate, the more certain I am that I will eventually own everybody.” It’s refreshing to meet an executive that talks like a Bond villain, but with a portfolio of cool games instead of an orbiting space laser. He continues, “So, given that we know churn [will happen], we’ve been trying to design a business that allows for and thrives in that new area. Which is why I think that a multi-product, multi-genre portfolio of products that support each other is going to be valuable in the future.” In other words, even if a player leaves one of their games, Robert wants another game in their portfolio to be appealing, because in the end, all the subscriptions go to NCsoft.

While he might be out for industry domination, he still talks a lot about taking care of his customers. “Our goal as a company is to develop a relationship with the customer, so that we can provide them value that they’re willing to pay for. It doesn’t matter what that looks like beyond that statement,” he says. “The great news is that once you’ve gotten over the hurdle of developing that relationship in the first place, like getting their credit card number, which is the hardest step … it is now more convenient for them to stick with you than it is to go other places. Why do you think people buy from Amazon? It’s because one click does it all.” Robert sees Amazon as “totally trustworthy,” which also happens to be his goal with NCsoft. He wants the company to be “a totally trustworthy place that you can go that has great products and, if you don’t like it, no problem. You can get your money back. We want to find the way that people are most comfortable with.”

Instead of building a model and hammering players into it, he’s taking a different approach and embracing the business paradigm the customers want. “We don’t care if it’s ‘you buy an episode and then there’s never recurring billing,’ we don’t care if that is ‘the whole game is free and instead you buy virtual property.’ We don’t care if it’s a subscription-based game, and we don’t care if someone invents yet another business model. They’re all fine.” He uses the Korean parent company for an example, saying, “They’re launching what is called NC Coin, which allows us to do micro-billing. You’ll be able to play arcade-style games for a quarter.” It’s ironic that a super-progressive online games giant might be able to revive the sputtering arcade model. They’re also working on “a product coming out that’s basically going to allow you to play for a certain amount of time, up to a certain level, and you can play all the way through the game. But if you want the super-uber swords and the higher level experience and upper-level dungeons, then you can pay a small subscription fee, five bucks a month, or something like that. So, basically, [it will be] a fairly simple game that people can get into and have a good time, play a lot, and once they feel like they’re getting really good value out of it, then they can pay more to actually have upper-level stuff.”

Since he raised the issue, and since it’s the talk of the industry of late, we had to ask. Virtual property: Good, bad or ugly? Richard fielded that one with an unexpected answer, saying, “Well, I think first of all, it’s inevitable,” taking a moment to comment on the legal ramifications before getting back to that “inevitable.”

“What I mean by inevitable, I think the definition of value has something to do with the amount of human labor that goes into the creation of something. Gold is hard to find, therefore it’s more expensive. Aluminum is pretty easy to mine, so it’s pretty cheap. People invest a lot of time in getting gold or things of high value in a virtual world. It makes sense that that has real world value. Therefore, of course, secondary markets will exist to allow people to shortcut that work and reward cycle,” he says, showing a remarkable grip of economics and human nature without the high dudgeon so common among game designers on this issue.

“I buy virtual gold all the time,” he says, adding, “I have no problem with it. I’m a supporter. I understand that my position on this is different from our sole corporate perspective. But anyway, I participate in it.”

With the accompanying PR rep in need of medical assistance, he shifts his perspective back to that of a publisher and developer, saying, “That being said, as a developer and as a publisher, there is a real big legal problem associated with the sale of virtual property. As long as what we’re selling for our subscription fee is access to our service, and all we’re warranting is that, oh, you’ll be able to play, whatever that means. It doesn’t matter what rules we change about how you play.” He uses a simple example, saying, “It doesn’t matter if somebody comes up to you and says, ‘Hey, I’ll give you two gold for that incredibly valuable sword that I’ll convince you is valueless,’ and you sell it to them, and then find out tomorrow that, in fact, it was worth a gazillion gold pieces. None of those things matter, because what we’re selling is entertainment opportunity.

“As soon as we are involved at all in the sale of a sword,” he begins, sounding like this is a scenario they’ve gone over a time or two. “Suddenly, if its value changes because we change the rules, suddenly if it gets lost because of a technical glitch, if you get bilked out of it by some other character in the game, all those things suddenly mean that our company is exposed legally to that transaction, like it would be in the real world with a real sword. If you sell somebody a rusty sword that disappears, you’re in trouble. If you sell a sword and charge ten times what it’s really worth, you’re in trouble.

“There’s a line there that I think, once a game developer has chosen to go across, you just have to prepare your content to expect that. That is not what the current designs are designed for,” he says, echoing RedBedlam’s Kerry Fraser-Robinson. “Anytime you’re selling items, you expect a certain amount of data integrity in backing that up. You go to an airline, for example, and you buy even a $50 ticket on Southwest. You show up at the airlines and they say, ‘Hmm, looks like we lost your ticket; guess you’re going to have to buy it again.’ You’re going, ‘Wait, that’s not fair. You can’t just lose my ticket.'”

Disclaimers aside, though, Lord British says he’s “very interested in creating games that have virtual items that are sold just outright for real money, and skip the front end. As an enthusiast, I think it makes a great deal of sense, but it has to be backed up with all the rest of the banking backdrop, which most of the people doing these early ones are not [doing]. The only people I think are going to succeed these days, out of the few companies that are selling items and stuff, tend to be small companies who are not worried about losing their portfolio, or they’re in Hong Kong or China, where you can’t sue them anyway, or they work through other people and just sort of connect people. They’re trying to protect themselves from being able to be sued. I’m really interested in seeing how the Sony [Exchange] works out, because they are obviously a major company and they’re backing it up. I don’t know that they’ve had any real problems, but probabilistically, they are going to when they lose something substantial, and how they back that up, I’m really wondering.”

The problem with a legal solution, when it comes to the virtual property issue, according to Richard, is, “We know the people who run IGE, and they are so well-protected, you wouldn’t even begin to know who to sue.” Robert adds some perspective from his end of the business – trying to find a way to confront overseas sellers – saying, “The copyright laws are different over there. Plus, try suing someone internationally, and the expenses are astronomical. Plus, there’s companies that provide service for companies that provide service for companies that provide services for the little person sitting in a shack in the middle of nowhere that happens to have a computer. Try going through that. It’s ridiculous.”

Shifting the conversation to Asia, Richard gives us a bit of insight into the Asian gaming culture. “Using Lineage as a touchstone,” he says, “And Korea and Taiwan, where 20 percent of the population of those countries are active subscribers to Lineage today … that level of penetration is approaching things like Coca-Cola, and when you have that amount of penetration, of course you are going to see the cross-section of life issues that show up. That’s why, occasionally, a press report comes out about how in Asia, some guys in a massively multi-player online game got in the real world and killed each other. Well, it’s like 20% of the population [of the country] is in this game. Out of five people, someone is going to commit suicide. In fact, it’s probably a low rate, so people should probably play this game so they don’t commit suicide. They probably have a more fulfilled life than those that are not playing.”

Is 20% penetration realistic for the United States? Richard says the outlook is hazy. “Possible? Of course, it’s possible. Is it reality? Who knows. No one in their right mind is predicting that sort of thing. But on the flip side, though, every year that I’ve been in this business, [they’ve said] that the market is surely saturated by now, surely it won’t grow again. It started with Ultima Online. The sales predictions for Ultima Online were 15,000 units prior to its release. Then, of course, 50,000 people paid us to become part of the beta testing cycle, which immediately told people that the predictions were a little off. And, of course, it was the fastest selling PC game in history at the time, and it outsold all the previous Ultimas by a factor of five or ten. Even then, people were like, ‘Oh, that’s because Ultima‘s got a hardcore fan base of 20 years, and surely this isn’t going to be repeatable by anything other than something like an Ultima,’ and then, of course, EverQuest comes out and does about twice that.” It’s a familiar picture, one where, “each year, there is the latest and greatest, which brings in another few hundred thousand to million people, and now WoW, which has a couple million people, and each time it just gets bigger and bigger.”

Richard contrasts the U.S. to Asia, saying, “The thing that [is] unique about Asia, compared to the U.S., are things like broadband penetration, because they are densely populated areas. There are things like, in Korea, for example, game machines were banned up until recently because of a holdover from World War II that they didn’t want to import Japanese console machines. If you’re a gamer in Korea, you’re a PC gamer, not a console gamer, and those kinds of things drive it to a uniquely rapid and high point. Fundamentally, over the long haul, there’s no reason to think that culturally, as we’re all becoming one world – because we really are blending even our gameplay styles, where it used to be all PvP over there and all PvE over here, and slowly those things are coming together.”

In the long term, he says, “It’s reasonable to think [in] the U.S., like Asia, it will be incredibly common for people to play online games. What we call online gameplay will also be very different. Over there, all online gameplay is very hardcore, while over here, the online gameplay is much more casual. Pretty soon, [it’s] all going to develop until there’s more and more online capability, and the big MMOG games are going to sort of downgrade.” Richard sees a future where the boundaries and genres as we think of them now are blurred. “It’s going to be hard to differentiate between what is an offline game and what is an online game. They will have all sorts of mixed components. When you really look at even an online game, and what you can do with instanced adventures where you basically go off and do your own thing, really, that’s a single-player game or light multiplayer game that you’re playing in an online game. You’ve got online games that look like single- player games, so you can ‘win’ them, and you’re going to have single player games that look like online games, so you can take your friends. So, really, this whole business is going to merge together and be a giant business and that, combined, will have the sort of penetration rate we’re talking about.” We bring up his earlier comments, about no one in their right mind saying these things, and he retorts, “Did I ever say I was in my right mind when I started it?”

The console market will pick up, but, “not in the way, I think, people predict. Another thing I hear all the time is online games capped. Another thing I’ve heard since I started is the death of the PC. It’s still dying. It’s been 30 years now and it’s still dying. They ship more high-end PCs every year than game machines. So, here’s my take on online games on consoles. If you think about what consoles do great – and by the way, I left my cell phone in my bag, but I even play online games on my cell phone now – they’re going to be great at different things.” He cites Parappa the Rapper as the last console game that got him very excited, “Which speaks to his mental level,” cracks Robert, as only siblings can.

Unphased by Robert’s wisecrack, Richard plunges on, “The great games, in my mind, on consoles, tend to be games where I sit on the couch, the monitor is well away from me, the user interface device is very simple, the play session is incredibly short, and if you’re socializing, it’s actually better to socialize with people on this side of the screen.” Perhaps he’s familiar with rubbing a friend’s – or a sibling’s – face in ultimate triumph. “And, yes, if the AI on the other side of the screen was really human, then it might be better. And if the experience is light enough, like I’m here to shoot them, then it might be compelling. But on the other hand, I think what the PC does is far better. It [has] games where the experience you want to have with that person or what’s beyond the screen is deeper than something I want to shoot at. In which case, you look at the personal computer. You generally are sitting upright in the chair, where you’re comfortable for longer periods of time. The types of interfaces you have, including the keyboard or much more traditional or diverse input variations, your face is much closer to the screen, where you’re pretty much almost putting your face through into the virtual world.”

“I think the more in-depth online games will always be favoring the PC,” he says. “The social online games. The first-person shooter, combat-oriented ones might very well be at least as prevalent, if not maybe more prevalent, long-term, on a console. And you’ll have even different experiences that would be more like what we’d call Animal Crossing, that might even be the most popular on my cell phone, where it’s literally just a pick up, 30 seconds to five minutes at the most, thing you do on your cell phone.” Before we could get him in much more trouble, the newly- resuscitated PR rep was busy shuffling the brothers away. As a closing, Richard added a thoughtful, “The platforms really kind of define the games that will be best to play on them,” and though he admitted he wasn’t in his right mind earlier, there really is something to that. We said our goodbyes and left them to go back to the land of Austin where they build worlds once again.

Shannon Drake and Julianne Greer collaborated on this article. Shannon can typically be found here at The Escapist or at WarCry.com, while Julianne is [I]The Escapist[/i]’s Executive Editor.