Friday, July 1, 2011

Escape from the black hole

In recent entries I covered how CCP had little choice but to try and restore customer trust pronto, before the monetization failure cascade they've thrown themselves into proves terminal.

We have to assume a week's worth of clue-by-four bashing by the community and media, then a bit of quiet time with the CSM drove that point home, or the whole discussion is moot, and it's time for a postmortem.

Obviously, neither the CSM nor anybody (but possibly their major shareholders and creditors) can force CCP to do what is suggested below, and :teamawesome:'s reluctance to admit to any mistake or fault is  the stuff of legends.

Thus, the only question now is whether CCP prefers to die in a freakish gasoline accident, or surrender to reason, and live to fight another day.

"If there is anything that this horrible tragedy can teach us, it's that a male model's life is a precious, precious commodity. Just because we have chiseled abs and stunning features, it doesn't mean that we too can't not die in a freak gasoline fight accident. "


The first step into the program
…is admitting you have a problem.
Whatever is happening to CCP, they brought on themselves, not just by being spectacularly inept at strategizing and propaganda in the past few months, but by creating the initial conditions for those shortcomings to potentially prove fatal to the company.

Once upon a time, CCP set out to build a game catering to a very hardcore, dedicated, confrontational and self-selecting species of players. Against all odds, they largely succeeded.
As a result, EVE's user community shows a very strong sense of ownership of the playground, is prepared to act with purpose when it deems necessary, and routinely outwits and outguns CCP in the metagame of PR and crowd control. [If you fail to see how that could backfire, please click the pic above.]
At the end of the day, not only do EVE players pay for CCP's rent, they are in a position to dictate the agenda and expectations of investors and creditors about EVE's parent company.

Flash-forward to now, where CCP's single biggest problem is their being in denial about the very nature of their own product, and insisting on a mass-market makeover attempt that is entirely unrealistic, and from a business standpoint, self-destructive.

Everything points to CCP trying to turn EVE into an impulse-buyer addiction machine, in pursuit of the fabled riches of F2P, P2W, WGS and content-by-the-meter, and they're happy to trade their current niche customer base for a speculative crowd of ready-to-shear consumers.
All vet bitterness and el33tism aside, this warrants the 'are you for real ?' response of the players, who happen to know first-hand that EVE makes for a terribad ride on the 'displease no one' route, because it's a bitch of a game, whose sole appeal lies in its spunk and quirkiness.

Mainstreaming EVE is, simply put, akin to force a racing sloop into the role of a ferryboat: you'd have to sit far inland and away from the docks to even contemplate the idea.

Bullets and points.

Yesterday I highlighted what I reckon are regretfully inevitable steps to be taken asap, if CCP is to rebuild said trust, and I'd like to expand on that a bit. 

1 • Come clean.

Over the past few years, CCP has been growing more defensive and wary of its own players. Being careful around rabid nerds is prudent, but CCP is way too nervous around their fans, which are trained (by EVE itself) to smell fear. Protip: it's not good.
The only way out of that is to cut through the piles of botched damage control and insultingly clumsy spin attempts that have been the norm ever since the T20 incident, once and for all.

The truth will set you free, but first it will piss you off.

How CCP could ever dream this macrotransactions/P2W plan would work out is beyond me, but no matter how embarrassing or vexing the truth behind the monetization frenzy, CCP must lay it out on the table. Anything short of full disclosure will leave them vulnerable to more damning leaks and exposure (which will happen).
Frox Niston 
The CSM is the perfect conduit to handle that. Call EVE TV in, sit the CSM and CCP brass in the lunch room, and stream a live Q&A for as long as takes, until the CSM and community are content they got all the answers they need, and believe what they hear.
Will it butthurt ? Quite a bit, for sure. It will also make for insanely great PR, provided CCP manages to get out of bullshit mode — if just for a moment, even around the hour 5 mark, it will be worth it.
Besides, it's not like CCP had anything to lose at this point: not to ham-fist it, but they have no face left to save by now, and they're down and bleeding out as it is.

Catharsis is needed on both sides, I reckon. The players obviously need some sort of special gesture to mark a turning point in CCP's attitude, and I suspect once they start to unbottle, CCP staffers will feel a weight come off their shoulders, possibly allowing them to move past the unease and re-connect with their player base.
It won't be all peaches and sparkly ponies after that (see 'Shake hands', below), but it will lay the groundwork for a healthy coexistence, which is worlds better than what they have now.


2 • Pay the price, in blood.

Unless everybody on the top floor of CCP HQ has been smoking crack, it seems likely the urge to introduce dubious income generating schemes without regard for general business sanity stems from a (perceived or real) urgent need for moar monies by CCP.
There aren't ten possible causes for that:

  • CCP, at the behest of its major shareholders has been prodded into hyping growth and revenue potential in view of some cash-out scheme like an IPO or a sell-out to some major company.
  • CCP needs a cash infusion, and fast, to carry on with Dust/WoD development, and depends on making potential creditors or current investors hard for CCP by painting very optimistic figures of projected revenue for 2011-2012.
  • CCP has been cooking the books like crazy, and much less than 360k subscriptions are really paid for by actual customers, the rest being covered by CCP and hidden as Operating Expenses and R&D, meaning their burn rate is way worse than 10 million USD annual, and they can't keep the ponzi scheme going without an elephant-sized helping of cash.
At least that's the most sensible explanations for the recent AtAllCostsByAnyMeansKillYourHorse 'strategy'… Regardless, hype-based cash-injection plans are busted now, thanks to the PR shitstorm CCP just reaped.
The only hope of damage mitigation for CCP's investors and creditors is to bring the company in the black mom'n'pop style, lest they're prepared to cut their losses and sell for a song (if they can find a sucker to buy that melon).

Looking at the bright side. 
Assuming CCP is not running a straight-on ponzi scheme (I'd give that a 74% vote of confidence and make it my working assumption for now), EVE on its own still looks like a nicely profitable operation, with enough earning capacity to fund projects like Carbon and possibly Incarna above and beyond EVE operations and iterative development expenses.

What can not be realistically funded from EVE ongoing revenues alone is two AAA games, one being a full-fledged MMORPG with a yet-to-figure income model. Once again, the options are limited, and something must give.

Based on 2010 published figures, CCP burns through about 63 million USD vs 53 million income, and shows a 6.5 million operating profit by filing 16.8 million in salaries as capitalization (sic). [Also of note is a whooping 9.8 million in marketing, a figure that's probably going up in 2011, like most other expenses, but we'll get back to that.]

At this writing, CCP has five major projects on the workbench, each of which costs money:
  • EVE (ongoing development and operations)
  • Dust 514 (development)
  • WoD MMO (devlopment)
  • Carbon (core technology below EVE and presumably everything else to come)
  • Incarna (avatar/graphics engine for WoD, using EVE as testbed)
Only one of those is generating income in the short term, to which the development costs associated with Dust 514, WoD and Incarna bring no added value as of yet, despite CCP attempts at shoehorning Incarna into EVE as a 'core feature' (which so far amounts to creative accounting, at best).

"Axe Twilight, Dust and Incarna tomorrow, and odds are we make money not just in the books but in the bank, too."
[Anonymous Coward — CCP employee] 

Without going that far, something has to be done to bring expenses in the ballpark of revenue, and it opens an opportunity to regain some level of credibility with the spacenerds crowd:

At a time where EVE players have been given every reason to believe CCP is ready to "suck their customers dry and leave their shriveled corpses by the side of the road", slaughtering one of the rival siblings may be the single best way for CCP to prove EVErs its commitment to the continued development and success of EVE.

It goes beyond nerdrage-induced bloodlust, as CCP and the community will share both the memory and the responsibility for that sacrifice, which may very well be the price to pay to earn back the trust and loyalty CCP squandered over the last couple years.
EVE players have learned by now that every time they've forgiven CCP for screwups and breaches of trust, they've only made the company bolder and more confident it could get away with anything, and bullshit their way out of trouble with dev blogs about integrity, excellence and other e-honor nonsense.

CCP was delusional in thinking their feeble spin-fu fooled the players, yet the players were fools, indeed, for thinking CCP would learn from simply being called out and admonested: not until it fears for its very existence will CCP learn not to bite the hand that feeds it.
As an added bonus, the CCPers who care most for EVE and its community may get a chance to shine.

One for the team… anyone ?
All reliable indicators point in the same direction regarding Dust 514: CCP is too deep in already to back down without potentially fatal consequences. Not being privy to the details of their partnership with Sony, I can't say for sure, but I suspect SOE would have no qualms suing CCP into oblivion, were they to default on whatever Faustian pact they're bound by.

White Wolf, though, sits at the other end of the spectrum, being wholly-owned by CCP (or 'merged' if you want to be nice about it), and while the WoD MMO can depend on an established and eager Vampire fanbase to help reach profitability (if it's even half-decent), it's also the easiest branch to trim to balance the books.

EVE and Dust are designed to benefit from each other as they share IP and brand recognition. Dust has the potential to reach to a different and much larger audience than EVE, thanks to its (hopefully) pick up'n'play experience, while leveraging EVE's e-cred of hardcore-ness and extr3me sandboxery, the latter offering a natural end game option to the most eager of Dust players.

Whether axing/pinning WoD would be enough to keep both EVE and Dust on track financially, I obviously can't say, but the opportunity cost seems bearable, assuming Dust 514 starts making decent money fast enough after launch, and launch happens before 2014.

3 • Shake hands.

This is the tricky part, really — the rest is merely painful.
Once CCP has repented and bled a pint of blood for the cause (see what I did here ?), time will come to carry on, and make the best of this second chance, both for CCP, EVE players, and the games.

"The situation between CCP and the EVE player base is so rotten… salvaging the relationship requires more than CCP getting their act together and catering to their base: they'll have to learn to actually speak the truth when they have unpopular news to break, and to ensure the buy-in of their stakeholders.
When you have only one product on the market, and all your customers belong to a single, opinionated community, you don't alienate that community, and you recognize they are, indeed, stakeholders.
The love story is over, there's no pretending otherwise: it's time to move on and learn how to be 'just friends'."

EVE doesn't need to grow to 5 million customers and treat them like braindead popcorn gobblers to be good bizns for CCP — exactly the opposite.
  • EVE has a reputation for being hardcore, challenging, and epicly sandboxy.
  • It also has a reputation for cheating devs, haxploits, botched ergonomics, inconsistent design (and now, attempting to ransom its users).
Only one of these sets is made of stuff that needs fixing.

Were EVE the total sum of CCP's product line, its extreme aspects could be limiting, business wise, but as a mythos locomotive for a wider franchise, it's precisely what it should be: the narrow end of the wedge, making way for the softer, larger pieces. [Mixing metaphors to the power of :awesome: I am.]

Figure the EVE out.
With EVE's role clearly defined and followed through, CCP could save about 4 million bucks yearly on marketing alone. EVE is enough of a drama engine and media-magnet that it could keep growing its userbase by 15% yearly without a dime spent on advertising, provided the word-of-mouth was good more often than not.
When Dust is ready to roll out, it can piggyback that fametrain to supercharge the bang for every advertising buck thrown at its promotion.

The way to achieve that is simple: focus on making what's already in game work as it should, and ban SCRUMM from the game design floor. …also get people on the game design floor.

As stated repeatedly (not just by me): rapid-iterative design and agile programming is good for balancing rockets, not sovereignty warfare. 
EVE needs a holistic master plan, and this plan needs to be run by the community, the CSM, and re-drawn until it's deemed workable and beneficial to the game as a whole.
Only then is it worth coding.

Tool up, work smart.
Create (or buy) a decent and accessible way for players to report bugs with feedback, tracking and rewards for bughunters built-in. Commit HR to QA.
Add a tiered 'crowd sourcing' toolset to figure what players need/want the most added next, have them pledge ISK to weigh the votes (you should put that to a vote, too).
You don't want to design by committee, or rule the game through universal suffrage, but taking advice and co-opting ideas from people who know your game better than you do is not surrendering to the mob, or admitting incompetence: it's being a smart game designer.
When you need a wheel, don't try to grind the angles off a square: get a wheelmaker aboard.

Integrate Dust and EVE at the design level.
You know you want Dust players to fight on planets, and somehow tie that to EVE sovereignty system: great !
Now iron out the precise game mechanics and rules before you code anything.

Let my people go.
I understand CCP fancies itself a family, I understand you have an elder's circle "the magic nine" (or something). That's cute, but it's time to send some of them chase rabbits on the farm upstate. As much as I like quirky clubs, being ginger and having a name with a lot of consonants is not a good benchmark for aptitude: give them an associate producer plaque, pick up their pub tab and wipe out their access pass to the srs bzns floors at the HQ, you'll thank me later.
Also, contrary to documentation and sex, bad economists are worse than no economists. Having statisticians, economists and academics on board is a GoodIdea™, but I suspect you'd be better off with gun-for-hire consults than your village idiot (hit me up for pointers if you don't know who to hire).


In a few words: stop fearing your community, embrace the fact you depend on each other (but you more than they), and accept once and for all you do have mutual ownership of the playground, in different capacities.

ttfn, but more to come.


[PSupdate: no, I have nothing against WoD, and I reckon it could make a great game, if done right, something CCP obviously can't manage in its present state of disarray.]


  1. Too tired by CCP to carry on... but anyway, that is hell of a post.

    Very good reading.

  2. +1 Great read in the morning with a nice cup a coffee.

  3. Don't hesitate to google+1 or check the Moar! tickbox at the bottom of posts you like.
    As pointed in the article, I believe in user-driven metrics (to a point).

  4. I think I was a bit turned off with the conspiracy theorist parts of this post, but the ending seemed sensible, anyway.

    In any case, I hope they do follow through with their stated commitment to even more open-ness. We had quite a bit of open-ness with Incursion- it's rather dumbfounding that they clammed up for Incarna like this so soon after.

  5. @ Stormhawk: for any of it to be a conspiracy theory, I would have to believe CCP is being intentionally ebil.

    I don't, generally, as most of the mistakes they make they wouldn't, if their decisions weren't informed more by incompetence than malice.
    One possible caveat would be if they were effectively contemplating a cash-out scheme.

    In any other hypothese, CCP's interests (if they know what is good for them) are aligned with EVE success, which in turn depends on providing a 'good game', consistent with what the players have come to expect/demand from EVE.

    So when they screw up, they're not intentionally screwing us and the game, it's just 'emergent gameplay'. ;)

  6. Sorry- guess I was assuming. Just the wording in some places irked me a bit.

    Thanks for the clarification- I'll read your blog a bit closer later, with less subconscious intent to find fault in the wording.