Financial Times has a pretty incredible story on their site, where they say they’re estimating Nintendo is going to be make a profit of $1.6 million per employee.

This makes for an interesting data point in the PS3 vs 360 vs Wii discussion. Sony is saying they’re making a loss of $1.16 billion on PS3 hardware this year and I doubt MS is making a ton on their sales either. So while Wii is certainly the least capable of the boxes (as Bruce is quite happy to point out for some reason), it’s the machine that’s making the profit.

I’m extremely interested in seeing what Nintendo does next. I think whatever they do, it’ll either be a spectacular success, or spectacular failure. Probably depends a lot on what the aging designer thinks they should do next.

(Via Daring Fireball).

Brandon Reinhart has written an interesting piece on innovations in Warhammer online. I’m extremely happy someone is pushing the state of the art forward.

Adam Martin has posted a very thoughtful, interesting piece on game developers and publishers, and how development studios owned by publishers are having hard time due to conflicts in interests. Makes me think where this leaves indie development/publishing houses in general.

Blogging this as a sort of bookmark to myself: Vili Lehdonvirta has published a good post on legitimizing virtual consumption as a reply to an uncharacteristically poor Terra Nova post. Can’t wait to get my hands on his paper.

So… Everyone is blogging about Warhammer open beta being an epic failure in Europe. Given that GOA doesn’t have a very good reputation and that they seem to be screwing around with the Warhammer launch, it’s not looking good. What’s particularly worrisome to me is the explanation of scaling server capacity up only as needed. From a customer perspective, I expect that’ll mean I’ll have to queue to play, and I can guarantee if that happens more then three times without giving me free move to a less burdened server, someone is in for a credit card chargeback.

The server issues coupled with Mythic not being sure if my laptop can actually run the game (GeForce 8600M GT with 512 MB VRAM, runs WoW at 60 fps or so), it starting to feel like Warhammer the game is going to be great, but the technical implementation of the client and server will prevent me from enjoying it. Which is very frustrating, since I really want to play the game, to the point where I’m willing to boot to XP to do it. And that’s saying a lot.

On the hardware requirements side, I have to confess I’m surprised at the minimum spec Mythic has chosen. The current wisdom seems to state one of the reasons WoW succeeded in the first place was the low barrier to entry with the hardware requirements. I don’t know the people in my guild that well, but I’m assuming most of them aren’t the kind of people who upgrade computers to run a game. In fact, very few of the people I ever talked to who play WoW are “hard core” enough to purchase gaming PC’s. People have been hopeful of WAR being the first significant WoW contender but given the game might not run well on many of the WoW player’s machines, this might be a big bump on WAR’s road.

Another interesting aspect that will also affect how well War market adoption is the lack of a Mac client. My personal impression is that Mac owners are more likely to be early adopters than PC owners, and definitely are more likely to recommend products they like to everyone they know. This in turn means that Mac users are more valuable for word of mouth marketing than PC users. This combined with the fact that WoW has lots of Mac players (statistic, anyone, please?) who either can’t play War at all (if no Windows is installed) or need to boot to XP meaning you can’t casually log in (which is totally counter to the Mythic claim of the game being casual-friendly) means WAR will lose a lot of potential early adopter marketing goodwill. And given people form their opinions rather quickly meaning you only get one chance to launch your game, losing the launch game is likely to result in mediocre market performance.

Of course, again, I wish this doesn’t happen. I really want to see WAR succeed. Anyway, I think I’ll wait for a bit and see if I should cancel my pre-order and wait for the dust to settle. If GOA doesn’t get their act together, I can always hit the US servers.

One of the hot new ways to make money with games and virtual worlds is advertising. Or at least that’s what a lot of companies want all game developers to believe. If visit website of any of the in-game ad network providers such as IGA Worldwide or Double Fusion, they have a bunch of press releases out on more and more games including ads, and what a wonderful world has become to the developers.

Nielsen and IGA also published a study in June where they found 82% of gamers didn’t mind contextual ads in games. Curiously Nielsen.com doesn’t have any more information about the study (contrary to the press release) so I don’t know what games and methodologies were used to get the result. I would assume if this was on a racing game, the game would probably feel more real with real ads, so getting such a good result would be quite natural. Had this been about slapping a Coke board on a building in Thunder Bluff, I doubt the score would have been in this league.

Now, it seems the current message being broadcasted to game developers is that putting ads into your game gives you free money. Unfortunately, it’s not that simple. Andrew Chen blogged an excellent piece about maximizing ad revenue a couple weeks back, which specifically deals with what websites can do to get more dough. If you’re doing bulk advertising (banners in any for, be it adwords or video streamed to a medium rectangle), bringing in serious money requires serious volumes, which, if you read Andrew’s posting, changes how you make the money on a given network.

Websites can tackle this by integrating multiple networks of choice, but I as far as I know (and I don’t know much), there aren’t enough of them for in-game advertising to allow for this to happen for games. With relatively little competition, the networks can require exclusive deals, and I’d be surprised if the CPM rates of the networks varied enough to call for this type of an optimization. Further, I’m not sure if too many game developers even think of this level of sophistication when integrating ads into a game, given that most websites don’t probably do this. Anyway, this probably means that the average developer who integrates into the current networks should not expect a fat check in the mail, no matter what anyone tells you.

Talking about economies of scale, part of the reason Google is so darn effective in the online advertising is that they can sell targeted advertising to anyone willing to spend any money at all in ads. Joe Bob’s Auto Garage from Oklahoma can decide to spend a hundred bucks on people searching for local auto dealers and it’s possible. With in-game ads, I doubt getting access to those dollars will come any time soon, which probably cuts off a very significant portion of businesses putting money into advertising. And if your ad dollars come from a small set of big companies, you won’t get a single ad in your game if they don’t happen to like the content. Modern online advertising has a long tail, and the way to cash that is by serving Google Adwords.

Coming to think of it, it might be worth starting a business that offered developers technology that offered compatibility with any in-game ad network and enabled the developers to change the integration on the fly, rather than relying on a single network. This could be the beginning of making smaller scale ad-funded games a lot more viable than today.

Now, even if advertising in games is it’s infancy, there’s movement ahead that might make in-game ads a lot more appealing and lucrative in the future. PlayNoEvil had an extremely interesting speculation about upcoming ad war between Google and Microsoft. Given that games can offer a lot deeper exposure than most websites, if there’ll be disturbances in the force on the web, advertisers might suddenly start to flock to media where ad-blockers and browser incompatibilities are nowhere to be seen. We live in interesting times!

I have hard time believing this. Warhammer Online is selling for the same price in Europe as in the States, once you do currency conversion. Amazon UK price is