GTA IV: From Franchise to Platform

There’s really so much good commentary on the game business in this one post, it’s not only worth a click but also a bookmark.

“The game business quantifies critical reviews and assigns scores., which also aggregates reviews for film, television, books, DVDs and music, is the game industry Q rating. The value of the property you are trying sell, as well as the ability to sell at all, is directly related to the Metacritic score of your last title. The Godfather is the only film with a perfect 100 on Metacritic. Today, GTA IV joins The Godfather in the 100 club (The 100 was for the PlayStation 3 version, the Xbox 360 scored slightly lower at 99). This is significant for a lot of reasons. First, GTA IV will have the critical praise of The Godfather, but it will have the box office of Titanic. While the direct relationship is not as unusual as film, it is still somewhat unusual in our business. In terms of the score, to give you a better idea of what a 100 really means, the highest average score for a publisher in 2007 was Nintendo’s 75.

[From Nikki Finke’s Deadline Hollywood Daily » GTA IV: Is The Game Really That Good?]

Craigslist and Why Contracts Matter

So eBay sues Craigslist for what appears to be a legitimate shareholder rights issue, and Craigslist responds by saying they won’t talk about the specifics except to say this:

Sadly, we have an uncomfortably conflicted shareholder in our midst, one that is obsessed with dominating online classifieds for the purpose of maximizing its own profits.

[From craigslist blog » Blog Archive » Complaint Department]

Kedrosky more or less nailed the narrative on this, as confirmed by the Craigslist blog today. Craigslist is basically saying that it doesn’t matter what agreements they were obligated to, that their only obligation, legal or otherwise, is to their mission.

The seeds for this dispute go back to 2004 when it was a former Craigslist executive who sold his shares to eBay, as opposed to the company itself. This no doubt has been a thorn in their side since then, as Newmark himself said then:

“I made a gift of some equity in craigslist to a guy who was working with me at the time,” Mr. Newmark wrote on his Internet blog ( “I figured it didn’t matter, since everyone agreed that the equity had only symbolic value, not dollar value.”

While no one will ever confuse Newmark for a “greedy rat bastard capitalist” (as I was called the other day in the parking lot at Bucks, well not the rat bastard part but called a capitalist, really), the degree of naiveté that started with the assumption that the stock would never have any value to the circumstances that led up to this lawsuit is kind of shocking.

It may well be that Kijiji is at the heart of the dispute and that the recently launched eBay classifieds service could have violated a section of the shareholder agreement. It may also be that eBay had nefarious objectives when they bought the stake in Craigslist originally. All of these factors may be in Craigslist’s favor, but if it’s true that the Craigslist Board of Directors met in secret and engaged in a sham stock reorganization where the sole purpose was to dilute eBay’s stake in the company and trigger a provision that prevented eBay from electing a Director to the Board, and then inserted a poison pill into the bylaws, well then Craigslist is wrong.

If Craigslist asserted the Kijiji violated their agreement, then they should have disputed that in public and through the appropriate legal channels. While Craigslist will certainly win the PR battle, if the facts are as eBay asserts well Craigslist will lose the legal battle.

Shareholder agreements are contracts that determine what rights various parties have and the process through which disputes are defined and then resolved. These agreements matter and while the public may discount them based on biases they hold, but in a court of law it is black letter law.

LinkedIn: We’re Selling Ads For $75 CPM

Yeah, I don’t doubt that LinkedIn is selling such a high CPM, but the problem for them is that I just don’t spend a lot of time in LinkedIn so the opportunity to lever up that CPM is limited. I’d bet that the average time spent when compared to other social networks is low, which means there is less ad inventory. This is something they should be concerned about because I’m right in their sweet spot for a target market and I rarely spend but more than 10 minutes a month in LinkedIn. How much you want to bet that LinkedIn acquires a social networking company in the next year?

Having said all that a $75 CPM is really impressive.

Since LinkedIn knows the professional histories of its users, and can target sales execs, c-level managers, or certain industries, we can imagine high ad rates for advertisers looking for a business niche. Still, we have a hard time believing this is an average CPM for LInkedIn. But we don’t have a hard time believing that LinkedIn’s average CPM crushes that of Facebook, MySpace and other social networks who routinely struggle to get CPMS above a buck.

[From LinkedIn: We’re Selling Ads For $75 CPM – Silicon Alley Insider]

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Are Games Bigger Than Movies?

Here’s a good account of the games vs. movies debate:

“We can also look from the standpoint of gross mischaracterization of fact. Most of the articles are qualified by the ‘box office’ limitation. Games sales are bigger than box office receipts. As my law professors used to say, ‘true but trivial.’ How many of those articles explain box office receipts are 8%, or less, of total revenue arising from an investment in a film property. The box office, at best, is nothing more than an indicator of the downstream revenue. A film makes money in the theater, then it makes more money in the pay per view window, then on DVDs, then on cable and on down the line. This is why movie studios refer to the launch of a film as the launch of an ‘equity.’ The same can be said of the music industry

I’ve made the statement at times that games are bigger than movies, all the while fully aware that it wasn’t a totally fair comparison given the fact that a game is a $50 ticket vs. $8 for a movie ticket. I’m not sure that this alone makes the market for movies that much bigger because movies are constrained by several factors, the biggest of which is that a feature film has a relatively short shelf life in big money distribution (theatres, international, DVD) while games can go on for several years.

Even taking into account the fact that the trendline is far more telling than the snapshot of the market size at any one point, I’ll refrain from making this comparison in the future.


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Business Physics

Microsoft’s Windows juggernaut is collapsing as it tries to support 20 years of applications and becomes more complicated by the minute. Meanwhile, Windows has outgrown hardware and customers are pondering skipping Vista to wait for Windows 7. If Windows is going to remain relevant it will need radical changes.

[From Gartner: Windows collapsing under its own weight; Radical change needed | Between the Lines |]

I’ve been watching the the Microsoft Vista saga unfold with much curiosity, not because I wish them to fail or am enjoying their quagmire status at the moment, but because this is a classic innovators dilemma moment.

Windows has been fantastically successful for Microsoft to date but I don’t think anyone would seriously argue that Vista has met with external or internal expectations, was much later to market than Microsoft would have liked, and in many ways is looking like a dinosaur just before the meteor breaks into the atmosphere.

Ironically, the coolest stuff that Microsoft was planning, like WinFS, are all the things that got dropped as Vista lurched forward to a release data. A lot of people, me included, are looking at Vista and questioning why I need or want it when it requires more hardware, has an irritating security model, and doesn’t have the hardware support that XP has. In other words, if it’s just incrementally better than XP why should I care?

Apparently a lot of people are asking Microsoft to keep XP on store shelves. In a new version of old coke vs. new coke, there is a petition circulating asking Microsoft to Save XP. Currently there are 111,000 signatures on the petition.

While it’s probably easy to point to their screwed up pricing strategy and a less than compelling feature set and steep hardware requirements as primary obstacles, it is far more likely that they need to go back to the drawing board altogether and break apart the server and desktop versions, quit insisting on every DOS program going back to 1984 being compatible, and, please, focus some development resources on building out applications that are included with the OS that are actually useful.

Lastly, Microsoft is going to be toast if they continue on the path of 5 year development cycles. If an automobile manufacturer can go from a concept drawing to design to engineering to manufacturing to dealers in 18 months, why can’t a software publisher? Microsoft has created an impossible position for themselves through their strategy of bringing everything forward with them when business physics would suggest that speed and mass are incompatible attributes without a tremendous amount of horsepower, something that Microsoft, like all companies, has a finite amount of.

The Internet is a Series of Tubes

It’s frightening to see that smart people, e.g. judges, can’t seem to figure out how the web works yet are responsible for establishing legal precedent and making laws.

Even though meta tags are regularly ignored by search engines, and not visible to average site visitors, this ruling says that other company’s trademarks in you meta tags will leave you exposed to trademark infringement lawsuits. Amazing.

North American Medical Corp. v. Axiom Worldwide, Inc. docket number 06-01678 CV-JTC-1 (PDF) doesn’t specifically say if the trademarked terms were in the keywords meta tag, description meta tag or some other meta tag. But the ruling is that Axiom, who used North American Medical Corp’s trademark in their meta tags, is in violation of trademark infringement. The specific keywords were “Accu-Spina” and “IDD Therapy,” and Axiom, at one point, ranked well for those terms in Google.

[From US Court Rules Trademarks In Meta Tags Can Constitute Infringement]

SAP’s Community Experiments

UPDATE: Jevon pointed out that the links require reg… I’ll check into that because I thought that these were all public.

SAP Global Marketing invited a bunch of people to participate in a meatspace and virtual space community event this week. There’s lots of good stuff going on, indeed, I am finding the blog postings, presentations, and other materials to be really interesting.

This is a great example of how a company can use online community spaces to enhance and involve participation from a wide range of people.

In my copious spare time <g> I have been writing a blog on the Plexus site called “A Former Insider’s Guide“.

The Technology Doesn’t Matter

Imagine what the adoption curve for books would be if the conversation about books dealt with typesetting and font intricacies and the compelling features of a particular kind of binding.

Shirky has a remarkable ability to put a skewer through a million things and get to the essence of the broader question that isn’t even articulated: “social tools aren’t interesting until the technology becomes boring.”

As Clay Shirky recently remarked on the Colbert Report, so it must be true, “social tools aren’t interesting until the technology becomes boring.” And more to the point “the social effects are more important than how the technology works.” This might be disconcerting to people in the technology business an hopefully they come realize they aren’t in the technology business. But we are still in the early stages of social software. Case in point is how we still using the rudimentary language of features. Like “wiki” or “blog” or “social networking.” Techcrunch posts and Facebook apps are a constant stream of feature porn.

[From Plexus Beta: Collective Genius: The Technology Doesn’t Matter]

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Man Machine Failures Plague Heathrow Terminal Opening

Heathrow’s Terminal 5 opened yesterday with a resounding thud that left travelers and employees stranded and BAA and British Airways officials red faced and shamed. This is as much a failure of man as it is the systems that have been designed and implemented.

There is simply no excuse for employees not being able to log on, baggage systems not synchronized with baggage handler actions, insufficient parking for employees, and a traveler information system that failed and then ground to a halt with literally thousands of travelers in the terminal.

Rumor also has it that the much talked about biometric system that fingerprints travelers wasn’t blocked by regulators but because the system failed to work in the days approaching the launch. Seriously, BAA (the airport operator) can’t really expect anyone to believe that government regulators who knew about the system while it was being considered, designed, and then implemented, waited until the days leading up to the terminal opening to say “no dice”.

All I can say is that my strategy to avoid Heathrow for connection and destination flights will remain in force. If I’m connecting I’ll fly into Frankfurt and if I need to be in London I’ll get a direct flight to Gatwick instead. It also makes me wonder if London is really able to pull together the massive logistics challenge that is the modern day Olympics.

Computer glitches and other problems plunged London’s Heathrow airport into chaos for a second straight day on Friday, causing British Airways to cancel numerous flights.

[From British Airways Cancels Heathrow Flights Amid Computer Chaos — Heathrow Airport — InformationWeek]