Tag Archives: Video games

Disruptive technologies and long term impacts III

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As I discussed yesterday, disruptive technology’s impact can be mitigated by extensive networks. So how do these networks form? Well, they can be formed by movement of employees, which can lead to an exchange of tacit knowledge as well as increasing the likelihood for a collaboration. For instance, my roommate’s employer has asked if his former professor would like to collaborate with them. This would lead to a direct knowledge flow from a large university in the US to a public-private research organization in the NL which would then diffuse to that organization’s partners. These networks can help reduce uncertainty through an ability to acquire additional skills sets which are not currently possessed within an organization.

The networks can be built through previous collaborations, suggests of a previous intermediary organization, such as a publisher in the video game sense. Or there could be other forms of collaboration such as licensing technologies like the Quake/Unreal engines in video games. This allows for a full knowledge transfer of technology from one organization to another through formal methods. However, the reason for adopting one technology over the other could come down to a single employee which used to use one or the other technology at a previous job.

Now, how do these impact long term innovations and economic growth? I haven’t talked about that at all. It’s not exactly straight forward. In some ways, as you can see from the network diagrams yesterday, these disruptive technologies have clearly lead to an explosion of growth within the video game industry. This is most likely why it’s over a multi-billion dollar a year industry. Extensive networking and collaboration at the beginning of a new generation of technology is good for the console maker and the consumer as it leads to a faster ramp of video games. See the graph below:

So, these networks help expand the options for consumers and lead to growth in the industry. Disruptive technologies are really good for the economy. Otherwise, we’d see a steady decline in prices and demand for products as people will already have them. In the example of video games, there are other drivers forcing the continued evolution of console technology, such as competition with the PC gaming platform, as well as continued expectations of better graphics and better game play. While there are a lot of people that scoff at the consoles, they do drive expectations for better graphics. People get tired of the same visual representation of their football teams. They want to see the graphics improve, the physics engines improve. Basically they need a continued improvement of technology to meet these expectations. These in turn help push the boundaries of PC games as well.

This is a fairly rosy picture of this march forward. There’s no concern for intellectual property, any licensing that is being done is obvious. I don’t expect this to continue. Which brings us back to the software patenting issue. We all know it’s a horrible thing.

References:
Vaan, Mathijs de, “Interfirm Networks and firm performance in the face of technological discontinuities” 2010 Druid conference

Disruptive technologies and long term impacts II

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Yesterday I discussed how disruptive technologies can drive our economy through creating new opportunities. However, it can obviously have some very negative impacts at the firm level. Let’s look at consoles again. First, as most of us are aware, there are only three major console manufacturers in existence. There have been a pretty steady number of console makers since the 90’s however the players have changed. Sega and Nintendo were the biggest players when I was young, however this shifted to Sony and Nintendo in the mid 90’s with the N64 and Playstation. The console makers are only half of it though. Without publishers, like EA, game developers, like Bungee, the gaming industry would die.

The people impacted by the changing in consoles are not just the console makers themselves, but also the publishers and the developers. In fact, it could be argued that the different platforms (consoles and PC) make it as difficult or more difficult for the developers. Some games the console makers want specifically for their console only. This cuts into the potential profits of a game developer. Additionally, there are difficulties of learning how to program for the new systems. Not all game developer or publisher is going to get early access to the new console. This makes it very difficult for them to actually compete with other developers, which do.

In a pretty cool paper (Vaan, 2010) that looks into the survival rate of developers and publishers after a disruptive change, they investigate the role of a networks. Below is a time series of network changes. Which show that the closer you are to the center of the network increases survival rate.

Network of video game developers (Vaan, 2010)

These networks are important outside of the video game industry as well. In my next blog I’ll go into more details about the importance of networks in surviving new technologies.

References:
Vaan, Mathijs de, “Interfirm Networks and firm performance in the face of technological discontinuities” 2010 Druid conference

California VS. Video Games (Video games won!)

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In 2005 California enacted a law which would have made it illegal to sell extremely violent video games to minors. Much in the same way that it’s illegal to sell Hustler to a minor. The video games version of the RIAA, the Entertainment Software Association (ESA), objected to this, with the support of many different organizations like the RIAA, MPAA, ACLU and many big players in software, like Microsoft and Activision. However, there’s more history to this case than first meets the eye. You have to go back to the initial ruling on pornography to really understand what’s at stake here and how this ruling could impact the gaming industry.

In 1964 a movie called “the Lovers” a French movie was banned in Ohio, because Ohio deemed it obscene. Ohio also fined the owner of the theater where the movie was shown. The owner took Ohio to court over this ruling. In this case the court decided this movie was not obscene, and that Ohio was violating the First Amendment of free speech. This case is where the phrase, I can’t tell you what it (pornography) is, “but I know it when I see it” comes from. One of the Supreme Court Justices, Justice Peters,  had decided against a hard and fast definition, but declared that this movie was ok.

Fast forward nine years and you run into another case against California. In this one a guy name Miller was selling sexually explicit material through a magazine. In this case an actual test was created to determine if the material was obscene or not. This test is the basis for the California law signed into effect in 2005.

If this law had gone into effect, it was halted with an injunction, it would have had a chilling effect on the video game industry. So, we know that it’s steadily gotten more difficult to buy violent video games since the 90’s because of the ESRB (Entertainment Software Rating Board) placing ratings on video games. This is similar to what happens with movies. The major difference is that it is up to the reseller to determine if they want to carry a product with the M rating or not. Effectively what this law would have done is to turn the M from the equivalent of an R rated movie into an NC-17 or X rated movie. This would devastate the First Person Shooting (FPS) industry as well as many other games, such as fighting games, some real time strategy and most likely role playing games as well.

We got lucky. The court ruled that Video games are protected by the First Amendment. The results from the Justices were interesting. While the ruling was 7-2, it could have easily been 5-4 if the law had been written differently. The majority, 5 of the Justices, argued that California had been unable to prove that video games were different enough from books, movies, television and other media to justify this law. Thus they ruled it was violating the First Amendment. The two other Justices, Roberts and Alito, argued that the law was too vague and thus, if narrower the Justices would have sided with California.

The dissenting Justices argued that minors have different kinds of free speech, and they claimed there is not much difference between binding and murdering a women and binding and murdering a topless woman. Using this argument is basically saying that it’s obscene to create this kind of art.

There were also discussions on the science used in this case. Which claimed that the more interactive nature of video games make them more dangerous to children developing minds than any other sort of entertainment.

Now that you have some understanding of this case what does it all mean? Well, first, in a way, this legitimizes video games as a type of art. We all have felt that they’ve been art, but now officially the Supreme Court of the US (SCOTUS) has agreed and given video games the protection they deserve. Second, this prevents any other state from attempting to pass a law similar to the California law. It’s also clear from the way that the Justices ruled on this decision that even a narrower ruling would have gone in favor of the video game industry. This is a really good thing, as it means that it’s unlikely another state will try to challenge this ruling with the current Supreme Court.

What other implications does this have? Well, it clearly says that as a culture we feel that violence is inherently different than sex. We have made it clear with this ruling that the US is willing to accept graphic violence as non-obscene while sex is. This is interesting itself. The initial ruling on obscenity, and the 2005 California law, state that what is culturally acceptable defines obscenity. With this ruling we are saying that violence is acceptable in media.

Other observations, while the SCOTUS ruled that there isn’t a difference between video games and books and movies, I can’t help but still see that there is. Some in books, such as A Song of Ice and Fire (ASOIF), would never be allowed in movies are video games because of the sexual content. However, a young impressionable mind can more easily pick up one of these books than they could pick up a movie or video game with the same content. I started to read ASOIF when I was 13, it would have been extremely difficult for me to actually be able to see a movie that had the same amount of sex and violence. Now, I’m not saying that it should have been easier, but that’s because of my parenting more than anything else. As a matter of free speech, I personally don’t see any difference between the word and the picture. The picture just requires less effort to understand or see the scene. This is not a reason to segregate a section of material. Additionally, in Lawrence Lessig’s Code 2.0 he describes an author that writes stories that are violent and sexually violent towards women. This author was arrested and charges were pressed against him. He was acquitted as he was protected under the first amendment. We need to be aware that no matter how much we don’t like these images or words that we can’t make them illegal. Our founding fathers fought for our freedom to allow us these rights.

So, video gamers rejoice! We have won a great victory, one that will hopefully set a precedent which will protect video game writers, artists, coders and everyone else involved long into the future.

Happy Gaming!

Further Reading:
http://kotaku.com/5795472/video-games-defeat-california-in-supreme-court-battle-over-violent-video-games
http://kotaku.com/5678354/all-you-need-to-know-about-this-weeks-violent-video-game-case-in-the-us-supreme-court
http://arstechnica.com/gaming/news/2011/06/us-supreme-court-strikes-down-video-game-law-on-first-amendment-grounds.ars?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+arstechnica%2Findex+%28Ars+Technica+-+Featured+Content%29
Actual Ruling: http://www.supremecourt.gov/opinions/10pdf/08-1448.pdf