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What Business Are You Really In?

The great railroad companies failed because they thought they were in the railroad business, whereas they were really in the transportation business. Some video game companies think they're in the technology or film business: big mistake.

An example I used with computer networking students about "what business you're really in" is the failure of the great railroad companies (Santa Fe, Union Pacific, NY Central, etc.).  The great railroad companies dominated late 19th century business; past the middle of the 20th, most were bankrupt.  This happened because they thought they were in the railroad business, when they were actually in the *transportation* business. 

When the transportation business changed (trucks and good roads, airplanes) and railroads became much less important, they lost out.  My point to networkers is that they're in the communication business, not the networking business.

How does this apply to games?   Some video game companies apparently think they're in the technology business, when they're actually in the entertainment business (even the ones making "serious" games will prosper if those games are also entertaining, as for example "America's Army"). 

I think this can be applied to the Sony vs. Nintendo console competition.  Sony thinks technology, Nintendo thinks entertainment  (also applies in handhelds, it appears).  (And this should have been obvious to Sony, because the *really* good technology, PCs, doesn't make it as a major game platform compared with the whimpy consoles.) 

As another example, many people called "Crysis" a technology demo, but a poor game.  The management of the company decried piracy for a failure to sell the game in expected numbers, but the real reason might be that it wasn't much of a game.

To move down one level of complexity, some video game companies think they're in the story-telling business, or even more specifically in the movie-making business, when they're really in the video game business. 

Video games are not like movies, and stories are not the most important component of most video games.   (See  At one time in the video game industry, film-maker wannabes published "games" that were more cinematics and cut-scenes than games, and that turned out to be a failure.

So we see proposals to treat video games, and video game production, the same way films are treated.  I think this is a mistake.  Every industry finds its own way of doing things.  Trying to pretend you're something else is very likely to end badly.

This is the difference between saying "we should do such-and-such because that's how the film industry does it", and "the film industry has a different way of doing such-and-such, and we can adapt it this way because it makes sense."  If it makes good sense, do it.  If it just happens to be how some model does it, forget it.

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