Early this year, Jesse Schell burst onto the consciousness of the gaming public in a keynote speech about the gamification of reality at the DICE Summit. The developer and Carnegie Mellon University professor has long talked about the transformative powers of game technology, but suddenly he became both celebrated and derided for his predictions.
Working as both an educator in CMU's Entertainment Technology Center and as the founder of his own studio, Schell Games, he sees the merging of the theoretical with the real, as he prepares students for tomorrow while working on products today. Schell got his start in games working for Disney; his company, Schell Games, self-publishes titles as well as working with clients such as Bigpoint.
I want to rewind a little bit before we start talking about your keynote today...
...and talk about the reaction that generated from your DICE talk.
JS: Oh, yeah, sure, sure. That was unexpected.
JS: Yeah. I mean, well, so first of all, I didn't know they were going to... I mean, I talk all the time. It was the first time they ended up putting up one of my talks on the internet, and I didn't know they were going to do that. I was just thinking, "Oh, I'm going to talk to these two to three hundred people in the room," right?
You know, DICE is like high-end industry people. You don't want to screw up and do a bad talk there. So, I was incredibly honored I was asked to talk there. So, I'm like, "Oh, I better say something they're going to care about," right? So, I did focus on trying to make something that might inspire people's imagination, but I didn't expect a million views on the internet. That was not expected.
And a lot of discussion.
JS: Yes. I didn't think anyone would care so much. You know, I'm a college professor. I'm not used to people listening to what I say. And it was a topic that people just... it really sparked people's imaginations. Lots of opinions, etcetera, etcetera.
I think it polarized people to an extent, as well.
JS: Yeah. And it was probably designed to do that. I mean, I always find that when I give lectures, the most valuable thing I can do is to get people to think. And I tried to structure it in a way that would cause people to have internal contradictions that they would have to come down one way or another, and it did serve very well that way.
How do you see gamification? Since your talk, there's been a Gamification Summit that's happening soon, and GDC 2011 is covering it in more detail. It's still incipient, but...
JS: There are a lot of people looking at it in a foolish way. Anyone who thinks you can just treat people like little B.F. Skinner characters will be disappointed when they try and make it work, because mostly it doesn't work. What this all points to is how poorly we understand the nature to intrinsic motivation. It's like FarmVille succeeded and no one expected it because we're not good at understanding what intrinsically motivates people, you know what I mean?
JS: And so we're seeing all these people try stuff right now. A lot of people are acting like "Oh, it's easy. I've just got to put points and badges on things!" -- like it's gonna work. That's totally not the case, right? I mean, there are plenty of games out there that people hate.
Anyway, I guess what I'm saying is people are assuming this whole broad area, it's like "Oh, this is all win over here," and really there's a couple narrow paths of win in some areas, and a lot of people are not finding them.
When you say the narrow paths, do you mean there's a narrow potential or that's just been what's uncovered so far?
JS: Okay, so again, there's two ways of looking at it. In terms of actually making every activity as a game, I think what will actually work, what people will put up with in the long run, is very narrow.
However, I think where the real win is when people start to analyze what is it about games that people like, and then to take those elements and weed those into what the experiences they're making in a natural way.
It may be that you've taken some thread that works out of games and woven it into your thing. Your thing has not become a game, maybe, but maybe you've given it an enhanced sense of progress, or an enhanced sense of feedback, or an enhanced sense of camaraderie, things that games do really well, and you're going to, you know, take one thread. I think that's where the real success is going to come from in this space.
And when you say "success," do you mean creative success or potentially even commercial success?
JS: Oh, yeah, creative and commercial success.
They go hand in hand, you think?
JS: They hang out a lot.
I think kind of what happened is that Xbox achievements hit and no one was really anticipating them.
JS: Including Microsoft.
And people didn't think that much further beyond that. This is a new thing and it works amazingly well, and...
JS: Right. They didn't think through the psychology of why they work, right? I mean, people who do Xbox Live are obviously competitive people, and where are they when they're on Xbox Live?
They're in a pool of all the other people who are into Xbox games. And so you have a situation where status, a social standing among competitive males in this pool, is going to matter a hell of a lot, and so suddenly that number becomes very meaningful. Does that mean it's going to work everywhere and for everything? No. No, it really doesn't.
Particularly, these guys are going in with an "I'm here to compete," and here's a competition thing. That doesn't mean it's going to work everywhere, but there are certainly some contexts where that kind of thing works.
And I don't know if you saw Chris Hecker's talk, "Achievements Considered Harmful?"
JS: I'm familiar with it.
You mention intrinsic motivation.
But there's also extrinsic motivation, which is...
JS: Which is what slapping badges and points and all that certainly is.
And about how that can be de-motivating.
JS: Oh, absolutely, and I think everyone remotely connected to this space should read the book Punished by Rewards by Alfie Kohn. He does a beautiful survey of all the research in that area.
So, Chris -- and again I didn't see his whole talk but I read the summaries and such -- from my understanding, he basically took a very dim view, saying none of this can work because of that. I suspect I'm oversimplifying, and I've certainly met a lot of people who came out of that and said, "See, none of this can work, because of that."
But this is where it gets tricky -- is that intrinsic and extrinsic are tangled in complicated ways. So, for example, I may set up a system of giving out points, right, that's totally extrinsic. And you would say, "Well, therefore, in the long run, it won't work."
Well, but what if me and my friends all kind of get into it, and like we start this kind of social thing about one-upping each other, and we're now doing it not because we care about the points for the sake of the points, but it now becomes like a little social ritual with us, which is intrinsically rewarding?
So, these extrinsic systems can sometimes become an anchor for something that has intrinsic power, and that part is where I think our brains get a little tangled up, because it's difficult to predict and it's difficult to plan for.
There's been a lot of discussion since Facebook shut down the viral channel about moving from beating people with a stick to trying to carrot them into actually wanting to share the game with their friends in the way that we used to share people: volitionally.
And this kind of seems to tie into some of that; a similar psychology, maybe.
JS: No, I think it's true. I think it's true. So, in the early days... [old man voice] The early days of Facebook, almost nine months ago... Back then things were very different because so much of it was a novelty for people. People try anything when it's a novelty.
They didn't understand the rules of etiquette because no one knew them, so people were breaking boundaries all over the place. So, it was really easy to be spamming viral and have it work, and a lot of things are kind of trimming down, and everyone's starting to learn the rules.
So, now you have to find out, okay, what do people really want to do because they like to do it? And there are ways you can do it, but you have to think creatively, and you have to have something someone genuinely cares about.
We're actually experimenting with a few of those at our studio now. We've become very focused on social games. We often say everything we're doing now is about social games because social games aren't going to stay as they are. They're not going to be FarmVille forever. They're going to start to weave into everything else in unexpected ways.
So far, Schell Games has been working on MMOs. The announced projects have been MMOs, so far.
JS: Well, we've done MMOs... So this is the weird part. Let's see... There are unannounced projects I can't talk about. Horrifyingly, there are released projects I'm not allowed to talk about just because of the nature of the contract, but I will say we have done a mixture of... In the past, we've been about 50/50 MMOs and theme park attractions. We've done interactive theme park attractions.
And now, more and more, we've branched out. We're doing DS games. We're doing mobile games. We're very big into multiplatform... So we do a lot of different things partly because I believe in the vision of multiplatform. If you believe in that, you have to do a lot of stuff.
Right. Well, that's the zeitgeist, right?
JS: Well, people talk about it, but who's doing it? Very few companies are really actually executing.
Well, it kind of goes to that slide you put in your talk -- where incremental improvement is disrupted. Everyone's goal was getting better at making games: the PlayStation, PlayStation 2, PlayStation 3 line was linear. And then here came iPhone and Facebook and whatever. And they're still not equipped to handle a lot of them.
JS: Right. You know, the world is still changing. We still haven't figured it out. This is going to be a weird year. Between all the motion platforms in the house, the new emerging mobile platforms. You know, you've got a new Windows Phone and all that stuff. We're going to see a lot of crazy stuff this year. Social games are changing and new ones are coming out. A lot of crazy stuff is going to happen.
For all of those platforms, the ones that are new, obviously, they're a change, and the ones that are quote unquote "old", like Facebook are all evolving pretty rapidly as well.
JS: Yeah, everything is evolving fast. I mean, I saw a great quote... I was just at the Dust or Magic conference, which is a kids-oriented, kids' entertainment and education conference, and someone had a great quote from this girl, like 11 years old.
She was like, "Yeah, I used to play the DS all the time, but why buy one game for $25 when I can buy a ton of them for like a $1 each on an iPod Touch? Duh." Yeah, I guess so...
We're all trying to figure that out. Oh, and then you've got a cloud gaming showing up on top of that. There's a frickin' dark horse if ever I saw one. Watch that shit. That's going to sneak up on everybody because everybody thinks it's a joke... until we're all dead.
You mean OnLive and Gaikai?
JS: Mainly OnLive. Maybe Gaikai is being really sneaky, but mainly OnLive. If OnLive does it well, they'll become the Netflix of games. We'll see if they do it right.
You told me Schell Games focuses on branded content. Game developers, in the sense of I think who has formed the core of the industry for the last while, and continues to form a lot of the core industry, might be surprised to hear that you're focused on branded content exclusively.
JS: Not exclusively. I'm just saying it's one of things I think is going to be important. I'm looking at growth areas. When you look at the future of social games -- how are social games going to be different than they are today? -- one of them is going to be branded content.
Because the same cycle happens with every game platform. The platform comes out, and it's got all new IP, fancy new stuff that no one's ever heard of, and then gradually people put their toe in the water and start to put branding on it, right?
And then eventually, more or less, my observation is about 50 percent of revenue seems to come from branded content in the long run. Well, look at social games right now. What percent is branded content? Very little.
I think those people are not sure what's the right way, blah blah blah. They'll start experimenting, and I think it will go there. So, in terms of growth areas, I think it's a growth area.
We're used to hard cycles. Consoles lasted a certain time; everyone knew when they were starting, everyone had a basically good idea of when they were ending, and that's all they really had to plan for.
JS: Right. No, the whole downloadable thing is disrupting everything, and no one quite knows how it's going to end up. I mean, I remember having these arguments in the mid-'90s at Disney. We made this big argument that everything is going to be downloadable.
"Hey, stupid. Why aren't we doing anything downloadable because that's where it's all going to go?" And some wise old person there said, "I understand what you're saying, but keep in mind that we keep finding ways to make the discs bigger, and we keep finding ways to fill them."
Now, in order to make accurate predictions, you have to figure out like how big can the discs get, how big is our capacity to fill them, and how does that curve relate to the growth and whatever happens with your bandwidth curve? Because there will be a certain point where you're like, "Yeah, no. I'm not going to wait three days to download a game."
And storage, too.
JS: Right. Right. And I don't have the RAM for it. So, there's complicated questions like, "Will it all go the way of music?" I suspect the answer is no because music, it's like no. A song is four minutes long, and you can throw more bits at it, and it does not sound any better. But games, it's not that way. So, exactly how it turns out is mysterious.
Though in some ways it's surprising because the traditional game industry had this sense that games always look more and more realistic and get better and better. And then what are the most popular games in the world? It's Facebook with Flash and simplicity.
And even the Wii was retrograde from that perspective.
JS: Well, and the error, I think, that people think about, is they assume... They think of games like a car that's driving from town to town. "Where's it going next?" It's like, no, it's not a car that drives you from town to town. It's a thing that like is blossoming out, radiating in all directions.
So the answer is just like, "Yeah, eventually it's going everywhere." Just like "In what order?", right, is kind of the question. Which means it can be going in two directions at once. That's what we're seeing, so...
And now I want to talk about, get to actually, your keynote at Unite, which was quite interesting and thought-provoking.
JS: I was scared to death because it was new material, and I'm always scared of new material. I'm like, "Is anybody going to care?" I was imagining an audience full of people tapping their watch. "I really want to know about the 3.1 Unity features? Can we get this over with?" But people did seem kind of interested.
I look for opportunities to give talks to make me think about new things. They asked me to do this keynote, and I'm like "What should I talk about?" They're like, "I don't know. You tell me." And I'm like, "Oh. What's important about Unity?" And I had to think about that a little bit.
Partly, like the multiplatform part is important, but as I kept coming back around to it, I think Unity really will be the birth of... it has the potential, if it gets scale -- and in fact, I'd love if you would put this in your article because I forgot to mention it on stage; I was a little shy about mentioning IT exactly -- the most important thing for Unity is to get scale, to get installed in every browser.
[CEO] David [Helgasson] ought to be paying a penny to every developer who causes a new install to happen, right? At his rate of 2.5 million installs a month, it would only cost him 25 grand. Yes, 25 grand a month, and developers would be excited about it. "Ooh, how can I crack this new market, because I'll get a bounty from David?"
Anyway, so scale is going to be important for the, and once they get it and they have multiplatform, I think they are best positioned to be the place of experimentation and growth for AI characters.
Specifically them because of the talent pool that's working with it, or because of the audience targets, or what?
JS: For a number of reasons. Because Unity's home is likely to be mobile and web. It's more centered on mobile and web than it is, say, on game consoles, and mobile and web are more suited to things that aren't necessarily games, right?
If you have a character that's like happening on a game console, he's going to stay the game console guy. But if you've got a character doing cool stuff, you know, in your games on your PC or on your phone, it's not hard for him to start then giving you the weather or the times at the movies or whatever.
Further, since people are doing non-game things on their mobile and on their web, there will be opportunities to use Unity for non-games there because to have meaningful 3D characters, you need an ubiquitous 3D solution, and it will be there. And then further, it's got multiplatform, so if you want these characters to follow you throughout the day... So, there's a lot of reasons, I think.
You know, you talked about 10 technological areas that need to improve drastically to make this possible...
JS: Well, yeah. Ten things that are gradually making this vision happen, yeah.
You know, it starts to sound a little cyberpunk when you bring it all together towards the end. It starts to sound a little bit like a Neal Stephenson novel, I think.
JS: The world starts to sound... Do you remember in Snow Crash the part where they go to see the librarian, and he's got this really cool thing. It's a globe that you can like turn and zoom in and stuff and see anywhere in the world with any map in the world, and we all read it in, what, 1990 [ed. note: 1992] was when Snow Crash came out, something like that.
I was like, "Man, that's cool. I wish we'd have that." Now we all have it in our pocket. We're beyond where he was. He had to actually go to some dude's house in order to see this thing. We all have that crap in our pocket now. So, yeah, that's where the world is going.
It's interesting that you brought up Milo, and I thought you were very honest about Milo, which was good because otherwise the audience would've rolled their eyes.
JS: Yeah. No, I didn't want to be a jerk about it, but it's also too easy to dismiss Milo because there is some fakery in it.
More than "some".
JS: Right. Without a doubt. But, you know, hey, PT Barnum. You expect PT Barnum to stretch the truth, whatever. The important part is the vision that I think Milo represents, and they really put some bold work into that, more than like any AI lab I've ever seen do.
I heard some really facile dismissiveness about Milo from day one. Someone said like, "Why would I want to interact with an 8-year-old boy?" and I'm like, "You're not even looking at the potential here." [laughs]
JS: Well, it's like the same people... "I don't want to wave my hand. I don't want to get off my couch and play a video game. Oh my God." Right? I remember... I won't name names, but there were a number of industry people who were publicly dismissive of the Wii when it came out, and it's easy to be in your niche and like "I like the things in my niche. You're doing something not in my niche. It seems stupid." But the world is big, and there's room for lots of things.
So, your company is pretty small still, right?
JS: Yeah, 55 people.
Okay, that's bigger than I thought.
JS: It depends on your point of view.
You seem to have an eye toward these potential really future developments. You're talking about Milo, that's like Microsoft-level R&D for that kind of tech.
So, you can't participate in this stuff as...
JS: Not so easily at the company. We can make select choices. I mean, it's even tougher for us; we don't have any investment or investors or anything. We hunt our own meat, as it were. We got out and get contracts with companies, partnerships, and publisher-funded development, and we try and take and profits we're able to take and do our own development, which is a slow path because, you know, how many people can I possibly put on them? Not very many.
But it's not always like "Oh my God. I see this distant future vision. Let's start building it now." It's more like it's useful to look out there because you're like "Oh, it's going to be going here. You know what? Let's pick this one over this one because it's in that direction, and it will get us a little closer."
And so part of it is part of the reason why we started to get a little more aggressive with Unity because a lot of people are dismissive of Unity. "Oh, it doesn't have the install base." And I'm like "Yeah, now. But let's get good at it now so we're ready when it goes big." And at the school, I get to do all kinds of crazy things because I still teach at the school. And my obligation at the school is to prepare the students for the future. Preparing them for the present is of little use.
Your company can't necessarily afford the kind of R&D that Microsoft could. At the end of MIGS, they had a panel of Montreal studio heads, and there was a question about "Can these big studios innovate?" And the answer the big studios came back with, and I may be oversimplifying here, was "No, we can't. Indies have to do that." Do you think that like when we get these collaborative tools, such as Unity's new asset store, we can actually sort of speed up the evolution process?
JS: I think it will speed up the evolution process. I don't know if you know the book The Rational Optimist. It's a magnificent book. It's sort of mind-blowing because mostly when people talk about the future, they talk about doom and gloom and how bad everything will be.
And this book's about "No, nothing has ever gotten worse. Everything has always gotten better forever and ever." Poverty has continued to go down. Crime has continued to go down. Standard of living has gotten better. Pollution has dropped.
On and on and on, everything gets better and better, and he draws all the lines about how everything gets better, and that's exciting.
But then he goes deeper, like "Why is this?" And his answer is that human beings do one thing that none of the animals have figured out how to do, and that's to trade stuff. No other animal will even try it. And because of that, it means that one person can specialize in something and become great at it, and it benefits all of us, right?
And the more people there are, the better everything gets for everybody, because more people are specializing in everything. Anyway, blah, take that, bring it to the Unity store, and now everyone can specialize and easily share their stuff for everybody. Everything gets better for everybody.
I guess this all comes back to money, though. How can people make a living in these environments?
JS: That is really hard. I mean, when you’re talking about race to the bottom economics, which is what we got... I mean, I remember when the iPhone came out, people were like, "Oh, it's awesome. You should quit your job and do this and sell it for $9.99. I mean $7.99. I mean $4.99. I mean, it's actually $2.99. Well, okay, it's 99 cents and everyone wants me to give it away for free."
And, yeah, so, like you've got that race to the bottom economics, which is scary. What it means is the only way you can succeed is by doing something dramatically unique and different. A lot of people are going to lose money, but some people aren't, and it sure is good for the consumer.
Well, that goes back to the 12-year-old girl who doesn't want her DS anymore, right?
JS: Right. But, you know, honestly, look at the DS. I mean, cost of manufacture. If you're a developer and you want to make a DS cartridge, you've got to drop between $4 and $12 to Nintendo -- "Here, Nintendo" -- just to manufacture a cartridge. If you don't sell it, that's too bad. You don't get that money back, right?
So, there's that. Then there's the money that goes to the retailer, and then there's the money that, you know, goes for endcaps and all of that. And by the end of it, you're really talking about like a $7, if you're lucky.
Like, there's $7 or $5 that you might get a shot at, but it's probably going to get eaten up because you made too many or you didn't make enough. And then, so from an indie dev point of view, a $30 game maps to something like an $8 game, and it's the same from the dev point. Now, the bitch of it is the marketing. The marketing is the part that no one understands yet the right way to market in these spaces.
That's what makes it hard for indies, the marketing. It's like buying a lottery ticket. Like "Well, I hope everybody finds out about my game."
I mean, Bigpoint's come out in public and said, "You know, in general, we spend seven times on marketing what we do in development," which like for most indies is like "What? I'm sorry, what? I'm lucky if I can spend one seventh on marketing that I did on development." [Ed. note: Bigpoint is the publisher of Schell Games The Mummy Online.]
There's been a lot of debate over whether the sort of core games market -- what we thought of as the games market, up until very recently -- is going to become a narrower piece of the overall gaming pie, right, because of market expansion.
Do you think that it's actually going to shrink as time goes on? Or is it just going to look smaller in comparison to the broad and expanding world?
JS: I have a suspicion, and I don't know. This is a hard thing to think about. Sometimes I think the revenues will shrink, because with all this other stuff happening, it's going to pull some people who were core gamers, who were like "You know what? I played core games because I kind of like these games, but once I see these other ones, actually, I'm not as core as I thought." And so I think there may be a little bit of drifting out. And then secondly, the $60 price point starts to come down.
But on the flip side of that, if you're hardcore, you'll spend a lot of money. I mean, Bigpoint tells stories of individuals who drop $10,000 on one game... So, you have to kind of scratch your head and say, "Which one makes the more money?" It's hard to know.
But I don't think it will go up there, that's what I'll say. I don't think it will go up. It may stay the same-ish. It may diminish. I don't think it's going away. I think it's going to end up somewhere between, if I had to guess, somewhere between 60 to 90 percent of where it is, if I look at it five to 10 years down.
Activision has talked about wanting to, with a certain licking of the lips, monetize Call of Duty the way that WoW is monetized, not the way that Call of Duty is currently monetized, which is, you know, discs and DLC. And that could fundamentally change the whole landscape. There are already people who play Call of Duty for a year until the next Call of Duty comes out, which is a problem for people who are trying to sell other games to begin with.
JS: Yeah. Right. And the question is, does the psychology of that kind of gameplay match the WoW psychology well enough that it's going to work? The real interesting experiment, I think, right now, is The Old Republic, the Star Wars MMO that's coming out.
Because here you have an experiment in a really expensive game with branded content, and it's going to be subscription-based, and it's luscious in terms of what it has in it.
If that tanks, oh my gosh. That will be kind of a warning sign for like the whole world. But if it does really well, that's yet another kind of signal. The outcome of that game will have a lot of influence on the industry.
It's often pointed out that WoW did all these things that, at the time, people reacted "Ooh, are you really doing that in an MMO?" and then it became so successful. Things like taking away these genre constraints that popped up in the early days of MMOs, like punishing players for death, or being very solo-focused.
These were seen as bad ideas until WoW did them, and suddenly they were not bad ideas. They were very good ideas, and now everyone recognizes it.
Seeing if The Old Republic can make heavy single-player-esque content work in the context of an MMO with all that BioWare stuff, that will change the paradigm of what people think is possible again.
JS: Yeah. I watched the Disney guys experiment with some Pirates