Fiorella says companies want to keep spending habits up by introducing unusual flavors and giving consumers reasons to buy. Many of the snacks only sell for a limited time or in specific regions. That caters to Japan’s “omiage” or gift-giving culture where consumers are expected to bring back something unique for friends and colleagues when they travel. For example the cherry blossom flavored Kit Kat is only sold in the spring. The potato Kit Kat was only sold in the country’s northern Hokkaido region, an area known for spuds. A nestle spokesman says the limited edition flavors stay on store shelves for average of two months before they’re replaced with new ones. Fiorella says the marketing cycle in Japan is unlike anything in the US.

But similar to something else…

In a Japanese market that is crowded with many choices, Nestlé has managed to carve out a niche for themselves by understanding that the experience of buying a candy is about more than just purchasing a bar of chocolate. Sure, it’s always great to add more flavors, but what’s going on here is more than that. In this case the company is creating a direct response to the desires of their customers, and giving them a reason to use the product in an entirely new way. They’ve turned it into something that can be considered a “good luck charm” by their customers, and fulfill a need that isn’t directly candy related.

This time the man trotting out the moral panic is Michael Arrington, in this post condemning the offers system that games are using for monetization.

Any system with that many users is going to have scams showing up. The mobile phone industry is rife with them, but Arrington doesn’t seem to be *demanding* that the phone companies take care of the problem.

Here’s an example of where I think he crosses the line:

And some users aren’t dumb, either. For every user who gets tricked into some fake mobile subscription, there’s another who can beat the system. That’s where the legitimate advertisers, like Netflix and Blockbuster, get hit. Users sign up for a free trial with a credit card, get their game currency, then cancel the membership and start over. Netflix has a policy of only paying for a user once. But game developers use a complex set of partner chains to launder these leads and try to get them through for payment. Netflix sees an overall lowering of quality and pays less for leads. Game developers, desperate to monetize, then search for ever more questionable offers to make up the difference. In the end, the decent advertisers are out, and only the worst of the worst remain.

Blaming the developers is ridiculous. There are quite a few aggregators integrating these services, and that’s how the majority of developers are making offers available. If there is “laundering” happening out there it would be nice if Arrington had provided actual examples of them occurring.

Telling the people who put these offer into these games that they need to pay attention to what’s happening would be useful. It would also be helpful to do so without pointing fingers and threatening the entire business model with extinction because it’s become large enough to actually have real-world problems. Success has its own responsibilities

Of course it makes sense to police those offers, but Arrington’s screeching histrionics and grandstanding are yet another in an endless series of moral panics that have been levied against the game industry since Laguardia took a sledge hammer to a pinball machine in the 1930s. In the end they’re far more about getting attention for the person making them then helping the “victims”.

I really enjoyed being at the show and giving the talk. Thanks again to everyone who came out.

If you do have any thoughts or questions feel free to post them in the comments. I’m happy to discuss them.

In this article for Forbeshe not only discusses why Amazon’s opaque DRM standards are eventually going to be the device’s biggest hurdle, but also the subtle, but important differences that have made the iPhone work even though it’s a locked down device.

Amazon’s Kindle file format doesn’t provide support for tables or for so-called monospaced fonts, two formatting features that we use heavily in our line of technical books. And there is a viable alternative: Epub, the open format from the International Digital Publishing Forum, is based on the Web’s native format, HTML, and provides full table and font support. This is the first “strategy tax” paid by those who embrace proprietary platforms: They can’t support the needs of every niche and must prioritize their support for mainstream needs.

The single point of purchase was also a non-starter for us, since my fundamental understanding of information marketplaces is that they grow bigger and more lucrative for everyone when there is a rich ecosystem of cooperating players.

If you’re interested in understanding why open standards work for business and growth, it’s worth a read.

All I have to do is consider that I already spend most of my time gaming on a PC. Partly that’s because I’m an old man with a fetish for humming boxes that I built myself, and partly it’s because I want all the other features that a PC offers: instant access to my email, Twitter, screen-grab software, and my own music to replace generic rock track X on racing game Y.

If the 360 does start to support all these things (there’s no confirmation as to whether Last.FM will be able to run in the background as a soundtrack to your games), it’ll become the kind of gaming machine that I want to spend my time with for more reasons than just because it has some games that my PC doesn’t.

It will become a device that has more of the networked infrastructure, and more of the media tweaks and toys that I take for granted as part of my desktop computer.

I think that there’s way more to it than just this. With the Natal Microsoft is planning to re-launch the XBox. And if I’m reading between the lines correctly, they’re essentially going to do what Nintendo did with the Wii, except they won’t even bother to beef up the hardware. They’ll simply bundle the new motion technology in and go on a media blitz. And I think that could work. After all the box will basically be able to do everything from downloading games to playing movies and music off of your home network.

It’s taken a while, but the 360 may finally be the “everything box”.

Wednesday, March 25, 2009
6:30pm – 9:30pm
Hyatt Regency San Francisco
5 Embarcadero Center
San Francisco, CA

There’s more info here.

I’ve posted the slides here.

If other people are your resources when you play a social game, then what is it that lets the user that both communicates and interacts with that resource?

The answer is Status.

And when it comes to Social Games it’s a word with two meanings. Direct status defines player’s position in the world as the game defines it. How many points/levels/gold etc. they have. And then there’s their position relative to the other people playing: relative status.  Both are important in Social Games, but the second obviously has even more importance for social media, because that relative status allows the developer to parse just how much value each user can provide.

A pretty good example of this in action is the standard "X-Wars" games like Mob Wars, Mafia Wars, etc. Because there’s money in having more people playing the game, the developers are mostly interested in using player Status as a way to get more people to become players.

The first kind of relative status is simply being a Facebook friend. The rules of the X-Wars game make everyone on the friend’s list a potential resource for the player. The game will push the player hard to get them to invite them their friends to play the game. The game rewards for converting them, by allowing you to purchase bigger and better stuff. Essentially it’s asking the player to ask their friends whether they would be willing to change their status to help you out, and vice versa.

Ultimately that Direct status can be compared to other player’s on a score ladder, using your direct status to compare it to other people’s relative status.

Get it?

It’s one of the key methods of social communication inside a game, and in MMOs, it’s also one of the key motivators.

Thoughts? Questions? Throw them in the comments below.

"We estimate that around 7 million copies of the GTA IV disc (required for the download) were sold on the Xbox 360, and believe that no more than 5 million of these were sold to members of Microsoft’s Xbox Live service," said Pachter to Gamasutra.

If the market for the expansions is only five million users and the episodes are priced at $20 per download, then Take-Two could at max earn $100 million in revenue from one episode or $200 million from both of the packs to be released in 2009.

That number doesn’t sound so bad, but as Pachter points out, "the addressable market for the downloads is less than half the addressable market for the game itself." Cutting those numbers in half and you have maximum revenue potential somewhere between $50 and $100 million, assuming everyone who could download the content would.

There’s some more number crunching in the article itself, but the short version is the audience isn’t large enough to effectively support the cost of development.

That seems incredibly short-sighted to me.

A lot of the strength of the GTA series has always been built around the perception of the game by its audience. Cool, forward thinking, and cutting edge are clearly all words that describe the franchise.  Even if they’re just building out the content as R&D, as well as a way to maintain the game’s presence in the marketplace it makes a lot of sense to me.

Something that seems expensive in production may still end up being cost-effective marketing in the long run.

Like the software industry that spawned it, Games tend to like to follow trends, running down a new path in search of success long after any genuine creativity has disappeared. But even as we breathlessly reach the end of the road in one direction, a new way is revealed in another direction.

And so it is with Social Gaming.

It’s hot, it’s new, it’s the trend that’s somehow managing to garner precious venture dollars during a time of economic collapse, and to create genuine excitement… But what is it exactly that makes a game “social”?

Yes, it’s about other people. But there’s got to be more to it than just “connectivity”, or “multiplayer”. We’ve had those things for years, and while they’ve been great, it’s hardly spawned a revolution.

Or maybe like “Web 2.0″ we don’t actually need a definition. We’ll just know what it is when we see the investment money start rolling in…

But let’s take a shot at it anyway:

A Social Game is one where other people are an in-game resource for the player.

To be a true social game it needs to be more than just a way to connect people. There has to be a way to use them in your gaming experience so that you’ll actively go out and recruit other people to play with you. It’s viral, because if it isn’t the game wouldn’t be as good.