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Hawkins: Apple and Nintendo changed business, for worse

Tue 08 Mar 2011 9:02am GMT / 4:02am EST / 1:02am PST
GDC 2011Development

EA founder and Digital Chocolate CEO sounds off at dev licences, App Store

Trip Hawkins, founder of EA and CEO of Digital Chocolate, took digs at both Apple and Nintendo during his a session at GDC last week, telling listeners that Apple was over-stimulating supply to the App Store and bemoaning the introduction of development licences by Nintendo.

The rant was part of a 'Social Developers Rant Back' session at the San Francisco event, which also featured luminaries Brenda Brathwaite, Scott Jon Siegel and Chris Hecker.

During his ten minute section, Hawkins rounded on Apple for over-crowding the market place, effectively dis-encouraging quality development for the platform by not helping to promote good titles well enough.

"A few months ago the local newspaper here had a story about what an incredible job Apple was doing, and isn't Apple amazing - they generate a billion dollars in revenue for developers," Hawkins recalled.

"They do such a great job for developers! And that's not all, Apple customers are happy because they have 250,000 applications to choose from, isn't that incredible?

"C'mon. If you're a self respecting journalist, how can you go to sleep without bothering to do the math? You take a billion dollars, you divide it by a quarter million you get... $4000 dollars each. Do you see the problem with that? That doesn't even pay for a really good Fussball table!

"So we have these platforms where there's too much supply, and then everybody wonders why there's a discovery problem but they can't leverage that because there's no curation. How is anyone supposed to find out what's good? How are they supposed to find it? How is anybody supposed to be able to scale?"

The session was a largely light hearted affair with some serious messages behind it, but Hawkins was the only speaker to address the concrete issues of the supply chain for social and mobile developers.

"Some of these platforms are really tough, for a whole variety of reasons. If you can't figure out how to make a healthy eco-system, it's not going to be a great business for developers to be employed in," Hawkins continued.

"This is what we need to be concerned about if we want to deliver great experiences for the public and be able to unleash our creativity."

Apple wasn't the only target for Hawkins' anger, either. The executive also berated Nintendo for its introduction, many years ago, of the concept of development licences for hardware, which Hawkins believes put the nail in the coffin of free and open development.

"We used to have a free and open games business, and then Nintendo came along and introduced a thing called a licence agreement. There's a whole lot of companies these days that have basically copied that model. How's that going for us? Well, let's take a look.

"It might be okay if the markets are really growing. There are, for example, a lot of Android devices being sold, but how about revenue on the platform, how much is that growing? Not very much.

"Some of these platforms are actually shrinking in terms of customer activity and revenue, and that's really concerning. So if we're gonna get involved in a community ourselves and chose a platform, these platforms have a tremendous responsibility to grow their market fast enough to justify our support."

The full transcript of Hawkins' rant is available in the GamesIndustry.bizblog section. More transcripts from the session are coming later this week.

21 Comments

Simon Smith
Producer/BizDev

10 1 0.1
So Trip criticised Apple for allowing open development with no quality control and then criticised Nintendo for doing the opposite - creating dev licences WITH quality control? Huh?!?

Posted:3 years ago

#1

Andrew Goodchild
Studying development

1,199 317 0.3
Ok. So he's saying it's too easy to get an app on the appstore, so Apple should restrict it, but by restricting it years ago Nintendo were villians. And people copying Nintendo is crappy, but an open platform like Android is not good becuase the money's not there.
I'm really not following what this guy actually wants.

Posted:3 years ago

#2

Tom Keresztes
Programmer

632 223 0.4
@Andrew,

Apple asks for $99 and proof that you do exist. Apart from a couple basic (and ambiguous) rules, you are set to go. For Nintendo, you have to pay for a devkit, plus some other licensing fees, skyrocketing the licensing costs to 20K+ (in USD).

Posted:3 years ago

#3

Tony Coles
Account Manager

9 2 0.2
I think Trip is calling for balance, if you can consider Apple and Nintendo as polar opposites.

Posted:3 years ago

#4

Adam Campbell
Studying Games Technology

101 0 0.0
You can't please everyone..

Posted:3 years ago

#5

Andrew Goodchild
Studying development

1,199 317 0.3
@Tom. He criticises Nintendo for introducing licences, and getting rid of the open development culture. Apple nearly has an open development, if it was as open as what he criticises Nintendo for abolishing, there would be more saturation than there is now.

Perhaps if every time someone made a cool videogames company in the late 70s or early 80s they hadn't sought an exit by going public as soon as they could, Trip and Nolan would have had more control over what the industry had become.

Posted:3 years ago

#6
Its exactly the point I have been making on the AppStore for a while now: the total revenue is peanuts, and even more so when you look at the total number of developers / apps. Its fine for indies - but its a fail for commercial devs (i.e. companies that need $5m-$10m/yr to survive).

Posted:3 years ago

#7

Tom Keresztes
Programmer

632 223 0.4
@Andrew,

Apple does not have the same strict publishing rules as Nintendo (LOTcheck), Sony or Microsoft, while Apple is less restrictive, only a few generic terms. They are no longer accepting iFart-like apps, though :)

Posted:3 years ago

#8

Andrew Goodchild
Studying development

1,199 317 0.3
@Tom. Yes I never argued anything different. What I pointed out is that he moans that apple aren't restrictive enough, & moans about Nintendo bringing in restrictions in the first place. Then if you read the whole speach, after moaning that the Appstore is so over saturated, claims the answer is browser based. Which is surely more saturated and harder to stand out.
He is saying he wants something really open, not very restrictive, but with less things allowed on it. He is contridicting himself every few sentences. If Apple started being more selective, encouraginging fewer quality titles, he could accuse them of following Nintendo's example.

Edited 1 times. Last edit by Andrew Goodchild on 8th March 2011 2:05pm

Posted:3 years ago

#9

Mihai Cozma
Indie Games Developer

123 34 0.3
I think things will just evolve over time. Now every major player wants its own platform so it can control it and get some cut of the work of others. The "App Store" term, while not very new as a concept because it has been done before here and there, was relatively unknown until a few years ago. Now everybody is doing app stores, even Intel (a hardware company???!!!). A lot of developers, especially small ones, will get rich during the uprising of these app stores, others will fall, but over time things will get right and mature, like it happened with everything in this industry.

Posted:3 years ago

#10
Apple doesn't have a top rated section as far as I can tell?

Posted:3 years ago

#11

Steve Peterson
West Coast Editor

96 58 0.6
Trip is not saying that open development is bad; it's great that Apple allows anyone to develop for a minimal cost. What's not great is their store, which has no curation, untrustworthy user reviews, and nearly nonexistent tools for finding apps. Developers are free to put any old tag they want on their games, which is why if you look in the RPG category (for instance) 95% of what you find are social games that bear no resemblance to what we call an RPG on a console or a PC. The only thing worse than iTunes is the Android Market.

Something more like Amazon would be better, where user ratings are reviewed, tools like "Users who bought this also bought" are very helpful, and other features make it easier to find what you need.

The biggest problem for the iTunes store and the Android Market is getting your product found; they provide little to no help, oversight, or quality control. Apple's attitude is hey, we put up the store shelves, the rest is up to you. Sooner or later I hope they put more effort into the store, because bare floors and walls, plain wooden shelves with minimal signage and poor lighting in a store stocking 350,000 separate products is not a store that's maximizing its revenue.

Posted:3 years ago

#12
Trip Hawkins of course knows best..After all, the 3do was a huge succes...

Now that I think about it, the 3DO required a license fee. A small one, but still.

Edited 1 times. Last edit by Jan Joost Van De Hoef on 8th March 2011 3:57pm

Posted:3 years ago

#13

Mario Tommadich
Technical Requirements & Compliance

32 28 0.9
Well, I think he has a point but I believe he is ignoring the bigger picture. I agree that Nintendo's licensing fees could repell small businesses that try to establish themself in development. Apples approach on the other hand can be compared to a waterhole in the desert, that has space for 5 animals around, but there are 100 waiting in line for water.
However, either approach has it's pros too.
Nintendo protects consumers and investors from fraudulent or weak companies that might go belly up during development or after release, also they provide excellent support and development hardware, which certainly has it's value too. Apple on the other hand simply promotes an easy way to get into development although this easy way might not be the most rewarding.

It is up to each developer to decide which way to go. Make excellent software and you will get your slice of the cake regardless if you make software for Nintendo or for Mobile Phones.

Edited 1 times. Last edit by Mario Tommadich on 8th March 2011 5:00pm

Posted:3 years ago

#14

Jim Webb
Executive Editor/Community Director

2,210 2,049 0.9
Thank you, Jan. I was going to point that out myself.

Trip knocks on Nintendo for establishing the licensing business model and then uses it himself with the 3DO. And if a better business model for consoles existed, why didn't he or any of the dozen other console manufacturers over the years since the NES do so?

Posted:3 years ago

#15

Haven Tso
Web-based Game Reviewer

255 8 0.0
Also with Wii Nintendo get laxed on that issue and is immediately flooded with complaints of shovelware on Wii. It really is a situation that not everyone can be pleased.

The issue with Apple is that as long as the numbers look good they've done their jobs. It is the number that looks staggering for consumers and think "hey they have a lot so must be good". How many general consumer will spend time to check how the numbers came and what do they represent? For Apps store, Android Market even Blackberry World, PSN and XBox Live Arcade, at this point it is a pure number game and who can flash out the biggest number.

Posted:3 years ago

#16

Tony Johns

520 12 0.0
I think the licinsing moddle was made after the 1984 Videogame Market Crash when Nintendo finally sold consoles on North America that recovered the market.

Not all of Nintendo's practices are perfect, but to say that things were allot more open and better before those days may not have known what hell it was like during the carsh where Atari had lost control of publishing control of games on their hardware.

I was not even born when the crash hit the north american market, I was born in the end of 1984 and was only just 2 or 3 when I first saw Super Mario Bros.

But from everything I heard from people from back in those days...it was a tough time to even make any money with videogames.

And if nobody could make money to support their developer teams...then it is almost an end of an industry.

I do think that Trip Hawkins is only a little dissapointed because of the 3DO not being a success back in the early 90s.

However he may be right about the Apple iPhone games...too many games all at once is not good business practice if people are not able to afford the games or are able to find which games are good for their tastes.

Posted:3 years ago

#17
I think it's important to focus on the last part of what he says because I believe it is true. The browser is going to set things free in a big way in 2011, in ways that aren't completely expected.

Posted:3 years ago

#18

Jim Webb
Executive Editor/Community Director

2,210 2,049 0.9
Cal, to me the browser has been a big gaming platform for years already. I've been playing "Angry Birds" type games for quite some time on my browser so this whole "Angry Birds" breakout on the Apple Store just seemed way overblown to me.

Overall, I've not seen much done in the Apple Store that either already hasn't been done or can't be done on the browser.

Posted:3 years ago

#19

Galen Tucker
Owner

13 0 0.0
Mr. Hawkins has an interesting perspective, but like most of us, it's taken entirely within the context of his own place in a regional segment of the global industry. yes, straight line calculations of profit would indicate a best case mean of $4000 per game in the iTunes store. Now, if you live in Southern California you better be living with your Mom who has enough money to carry you if that's all your dream job is going to bring in. However, by the same token, there are quite a number of places in the world were $4000 exceeds the average annual income of a trained IT developer by a factor of 8+. Success, like everthing else, cannot be measured out of context. (not that I'm going to imply that the iTunes store or any other is paying a normalized distribution of revenue :) ).

Mr. Peterson (poster above) seems to have hit on a great analogy for the iTunes store... I'll sum up his description as ... Costco :) Yup, welcome to a nearly bare warehouse with a base annual cost to get in (be it iPod/iPad purchase or iPhone subscription) and a unholy host of products for you to find on your own. (it's little wonder Apple and Costco couldn't get on the same page... they're 2 sides of the same coin :) ).

As for browsers setting things free, well, as the song says, "freedom is just another word for, nothing left to lose..." Until we nail 3-5 good (easy to use, accessible to devs, etc...) ways to monitize browser games (a casual dominated market with customer pricing expectations already set lower than iTunes... at free (as in beer)) then I still feel like browser based games are good portfolio builders, but not great revenue earners (like any gambling house... only ones who always make money is ... the house :) ).

Lately I've been seeing digital download as both more viable and a better model than traditional retail. At least on "open" platforms. You don't have to under-cut your own product pricing, you don't have the "magic end-cap - 6 month - hit or be gone" retail pressures, (in fact quite the opposite, new customers can find old games and buy them just as easily at 4 yrs out as day 1 - yes that means better support ... but I think the game industry has that coming anyway), and so on. Disney seems to concur with my analysis (rightly or wrongly). *shiver*

Just my thoughts,

Cheers,

Galen

Posted:3 years ago

#20

Curt Sampson
Sofware Developer

564 278 0.5
The irony, of course, is that with the SNS and gaming guys having smashed into each other at full speed, and now sorting out the mess, nobody's bothered to implement the social networking tools we need for decent game reviews.

An SNS is perfect for building a transitive graph of trust with each node having a value function for each neighbour. Set up something like this and the review issues will clean themselves up* as those who want to play games and those who want to game the review system partition themselves into separate networks.

*Yes, I know I'm probably being far too optimistic about this. What the heck, it's just a comment on the Internet.

Posted:3 years ago

#21

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