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Matchmaker, Matchmaker

Often unnoticed, but never unfelt, matchmaking in multiplayer games forms the invisible core of our gaming experience. In the old days, happenstance determined the characteristics of our neighbors. Maybe one server was labeled “Recommended,” but for the most part players were left to their own devices. If you were lucky, you might discover that mythical “Good Server” which featured players with similar skill levels as yourself. If not, perhaps there was some means of at least balancing the teams occasionally, by forced shuffling or similar. Otherwise, players were left to “self-deport.”

Automated matchmaking has been around for a long time now; long enough to demonstrate both its virtues and its vices. The virtue is, of course, being intelligently matched based on a whole raft of heuristics. The vice meanwhile… is being maliciously matched based on those same heuristics. Gevlon has long warned about overt rigging of games for monetary profit, but we have truly crossed the Rubicon when Activision itself has submitted (in 2015) a patent specific to that purpose.

And it was granted a few weeks ago. Feel free to read the whole patent yourself.

Granted, it isn’t entirely an engine of evil. The patent covers a process in which matches are made on a variety of characteristics. For example:

In another example, if a player has been performing poorly (e.g., getting killed at a rate higher than the player’s historical rate), the scoring engine may dynamically adjust one or more coefficients to match the player in a game that will improve the player’s performance. For example, the player may be matched with easier opponents, matched with better teammates, and/or placed in a game that is more tailored to the player’s preferences (e.g., players that play in games more closely aligned with their preferences tend to perform better).

This sort of balancing matchmaking is not hypothetical – Supercell, makers of Clash Royale – have already admitted in a Reddit AMA last month that there is indeed a “losing streak” pool in which you are placed after X numbers of losses. Why Supercell thinks this is a particularly good idea in 2v2, I do not know. For every person who just happened to statistically fall into a losing streak (e.g. 50% win rate), there are many more who are losing because they are tilted, trying out new decks they have no experience with, and so on. Grouping people this way is a sure-fire method of condemning players to ELO Hell, until and unless they happen to be paired up with truly abysmal opponents. So, in this regard, I prefer Activision’s method of “correcting” winrates.

Of course, the problem with picking winners and losers is when you are selected to be the loser. For every time you are gifted strong teammates to help you out of a losing streak, your opponents are punished by withholding of the same. We all want fair fights, being matched not just on skill levels but progression level too. It’s cruel to have new Hearthstone players face people with dozens of Legendary cards, even if the impartial ladder states they are equivalent players. Actively sabotaging games, though? We want fair fights, but not like this.

That is not even the most nefarious part of this engine, though. The true evil arises in plain text, in an approved US patent application:

In one implementation, the microtransaction engine may target particular players to make game-related purchases based on their interests. For example, the microtransaction engine may identify a junior player to match with a marquee player based on a player profile of the junior player. In a particular example, the junior player may wish to become an expert sniper in a game (e.g., as determined from the player profile). The microtransaction engine may match the junior player with a player that is a highly skilled sniper in the game. In this manner, the junior player may be encouraged to make game-related purchases such as a rifle or other item used by the marquee player.

“Matched” in this case, largely reads as matched against. In other words, the matchmaking system will notice you choosing the sniper role, then placing a more-skilled sniper opponent with a P2W rifle on the other side, for the express purpose of “encouraging” you to also purchase the rifle. It is bad enough having P2W elements in a game generally, but here we have a mechanism by which it can specifically be rubbed in your face. On purpose. To get you to buy shit.

This level of evil is not Google reading your email and popping up ads for dandruff shampoo. This is Google sending Fabio to your workplace to specifically call out the dandruff on your shirt, in front of your coworkers.

Could things get any worse with this patent? Activision is asking you to hold their beer:

In one implementation, when a player makes a game-related purchase, the microtransaction engine may encourage future purchases by matching the player (e.g., using matchmaking described herein) in a gameplay session that will utilize the game-related purchase. Doing so may enhance a level of enjoyment by the player for the game-related purchase, which may encourage future purchases. For example, if the player purchased a particular weapon, the microtransaction engine may match the player in a gameplay session in which the particular weapon is highly effective, giving the player an impression that the particular weapon was a good purchase. This may encourage the player to make future purchases to achieve similar gameplay results.

There it is, ladies and gentlemen. Activision settled the debate. Because now even in scenarios in which in-game purchases don’t directly increase one’s power (e.g. naked P2W), it’s quite likely that a matchmaking engine engineers a scenario in which you are more likely to win. For having paid. So even “purely cosmetic” purchases can end up becoming de facto P2W.

And much like loot box reward odds, companies will obfuscate the inner workings of their matchmaking systems such that it will be impossible to know either way. Are we to just trust their word that no matchmaking shenanigans are taking place, when they otherwise have every possible economic incentive to do so? Activision is just the first company openly patenting the process, not the first company to use these methods. Who would actually go on record to admit it?

Patent

Actual diagram from the Activision patent.

Do you see now? Do you see it? This is precisely why you should be caring about Consumer Surplus; this is why you should be up in arms about gambling loot boxes; this is why you never act as an Apologist to a game (or any) company. There is a straight fucking line between Oblivion’s infamous horse armor and Activision (et al) literally patenting the rigging of games for cash. And that line is still going lower, and will continue to do so, until acted upon by an outside force.

We are nowhere close to bottom.

The days in which game companies made their money by selling more copies – and thus had every incentive to make the best possible game – is over. Voting with your wallet isn’t going to bring it back either; in the US, where money is speech, the voice of the guy spending $15,000 on Mass Effect 3 multiplayer loot boxes drowns out everyone else.

“You need to understand the amount of money that’s at play with microtransactions. I’m not allowed to say the number but I can tell you that when Mass Effect 3 multiplayer came out, those card packs we were selling, the amount of money we made just off those card packs was so significant that’s the reason Dragon Age has multiplayer, that’s the reason other EA products started getting multiplayer that hadn’t really had them before, because we nailed it and brought in a ton of money. It’s repeatable income versus one-time income.

“I’ve seen people literally spend $15,000 on Mass Effect multiplayer cards.”

When every economic incentive is directed towards Consumer Surplus extraction instead of, you know, improving the gameplay experience… this is what we get. Always-online multiplayer in every game, single-player game studios getting shut down, loot boxes everywhere.

Play stupid games, (pay to) win stupid prizes.

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Blizzard’s Q3 2015 Report

Rather than risking burying the lede, it feels more like there’s a risk of being buried by them.

First, WoW “only” dropped by 100k subscriptions in Q3:

Pump the brakes, kid.

Pump the brakes, kid.

I did not specifically offer a prediction for this quarter last time, and I’m glad I didn’t. Is it weird to say, though, that I’m both surprised and not surprised at only a 100k loss? It is one thing to expect the WoW house of cards to continue collapsing after seeing 1.5 million subs evaporate in the three months prior. But it is also entirely true that there are people still playing the first EverQuest and Ultima Online like it’s 1999. Is there any doubt in anyone’s mind that there would still be people out there playing Star Wars Galaxies or City of Heroes if they could? In that sense, we kinda know already that there will be some kind of baseline level of WoW subscriptions that will always remain. The question is just where that floor is.

Of course, we may never end up knowing where the floor is because Blizzard has decided to stop reporting WoW sub numbers. I pretty much agree with the rest of the internet that this is a rather embarrassing PR maneuver meant to obfuscate the declining success of the game. It’s a shameful, shameful display, Blizzard… how could you sink to the level of EVE Online and FF14’s “lifetime total subscriber” tactics?!

That said, I do find this brave new world of faux news amusing. For example, from the last link:

Instead of subscriber numbers, Activision Blizzard intends to use unspecified engagement metrics.

As the company has pushed toward a “year-round engagement model” with its franchises, it has similarly de-emphasized traditional performance metrics like sales figures. It has never reported sales figures for Destiny, instead relying on “registered users” numbers, sometimes even pairing that with the number of registered users for the free-to-play Hearthstone and reporting a combined number. In its quarterly earnings, Activision Blizzard pointed to “key engagement metrics” for Hearthstone being up 77 percent, but neglected to detail what those metrics were.

I wonder how the job interview went for the person who writes these press releases. “Why should we hire you?” “I’m 77% better than the other applicants.” “In what way?” “Key ways.” I did end up listening to the entire Investor Call for more Hearthstone tidbits, but the only non-zero piece of news was it achieved its highest quarterly revenue in Q3. So… X+1 > X, at a minimum. I suppose we could extrapolate that Hearthstone is still growing, but without a baseline, we’re back in the weeds.

The lede of ledes though, is Activision Blizzard buying King (aka Candy Crush) for $5.9 billion. Pretty much everyone, everywhere has questioned the sanity of this move, and I’m a bit inclined to agree. King is on the decline, even Activision Blizzard agrees there are no synergies between the franchises, and this move has drained the company’s cash reserves of $4.5 billion down to… next to nothing. We can even envision a scenario is which the WoW movie flops – and that’s a real chance – and suddenly things could start looking unexpectedly grim.

At the same time… you kinda have to look at this from a business perspective. Throughout the Investor Call, Kotick and crew repeatedly stressed how they more or less bought ~340 million mobile customers. The sum total of Activision Blizzard’s exposure to to the mobile space up to this point has been Hearthstone and some Call of Duty apps. Could they build some amazing mobile games with $5.9 billion? Maybe. King is on the decline from its heights, but at least they demonstrated that they were successful at some point. If they can release/steal another hit, or start leveraging the mobile eyeballs to cross-pollinate franchises, this could suddenly seem like amazing foresight.

The other thing to look at? King is based in Ireland, which is famous for its double…. sandwiches. Or was that the Dutch? On top of that, of Blizzard’s $4.5 billion in cash they had prior to this deal, $3.6 billion of it was held overseas. As in, evading US taxes. Spending it this way gets the maximum value purchasing power which they may not have been able to realize any other way. And, of course, it moves Activision Blizzard from having little mobile presence to being a dominate player in the field. Even if King turns into Zynga.

So maybe this deal is a bit better than people think.

Blizzard’s Q4 2013 Report

If you have not already heard the news, WoW has lost gained 200k subscribers in the last quarter, edging back up to 7.8 million subs. This is quite a reversal from last May, when they hemorrhaged 1.3 million in three months.

In a fit of investigative journalism, I went ahead and looked at the investor report. Here are some choice quotes:

In particular, free-to-play games have achieved scale that should now allow us to realize great returns from the investments that we’ve been making in this area. Over the next few years, we plan to introduce at least three potential groundbreaking franchises operating on our free-to-play transaction systems designed to appeal to players across numerous platforms and in numerous geographies. These games including Hearthstone, Heroes of Warcraft, Blizzard’s Heroes of the Storm and Call of Duty online, all have enormous potential.

Personally, this is the first time I’ve heard about a Call of Duty online, but I confess that I don’t follow CoD news generally. Apparently, it is going to be released in China first, but… actually, I don’t know. Surely there will be mainstream releases of the regular CoD franchise every year (even if they go to a 3-year cycle), so perhaps this will be China-only.

When the call got to Mike Morhaime, there were a series of amusing transcription errors. Like this one:

We should use the strength in Q4 for a few factors. The excitement from BlizzCon, seasonality from the holidays and a refresh of the recruit of final program which offer special test inbound to players to bring revenue into World of Warcraft.

…and…

We think that this is a great feature that will make it easier for friends to play together in World of Warcraft. It’s also attractive for veteran players, who have already experienced the level and process multiple times and wants to quickly raise a new character to deal ending combats.

…and…

Entry into a special game mode called Arena can also be purchased with Indian gold or real currency.

So when you face your special inbound test, make sure to use real currency instead of Indian gold to deal ending combats.

The rest of the call was uneventful beyond one final item, of particular note to the skeptics of Blizzard’s “stabilization”:

Okay. And the other part of the question was on the East-West split. So, in Q4 we were slightly down in the East and slightly up in the West.

So in other words, a lot of the gain came from NA/EU rather than the people paying pocket change in China.

And that’s basically it. Morhaime mentioned that he’s expecting some weaker numbers in Q1 2014 given how they won’t have the BlizzCon boost anymore nor any new content, but is otherwise hopeful that the level 90 boost will drive some ex-player engagement. It doesn’t do anything in particular for me though, at least right now, but we’ll see.

Ouch. WoW down another 1.3 million

As reported by MMO-Champion, the subscriber total was 8.3 million at the end of the quarter, a loss of 1.3 million subs since Q4 (which had its own 400k loss). For those keeping track at home, Blizzard had 9.1 million subs back on August 3rd, 2012, during an eight-month lull of zero content at the end of Cataclysm, i.e. pre-Mists of Pandaria. That is a net loss of 800k this expansion – with a 1.5 million sub rollercoaster in the middle – and the lowest subscriber count WoW has had since 2007.

By the way, RIP to MMOData.net, which has not made an update in nearly nine months now. How can we pontificate without graphs? Sigh.

I went and signed up to listen to the investor report as there was not a transcript available, wondering where MMO-Champ got the rest of those bullet points. Plus, you know, Press™:

Nothing could go wrong with this.

Nothing could go wrong with this.

To save yourself 38 minutes, just trust me when I confirm MMO-Champ got all the relevant information.

What did interest me though was hearing how ultra-conservative Activision Blizzard is. I mean, that sort of thing isn’t a particular trade secret, but when Bobby Kotick explained that the company wasn’t interested in the mobile sphere because the Top 10 titles change every year, I cocked an eyebrow. Call of Duty and WoW still have a lot of viable milking years ahead of them, but this is the same company that gushed about their $1 billion Skylanders franchise that didn’t even exist two years ago. If CoD: Ghost ends up pulling a Warfighter along with the further expected losses (their words) in WoW subs, you can almost imagine a scenario in which they conserve themselves right off a cliff by the end of this year.

But, alas, the money machines continue unabated.

Finally, I sort of chuckled at this part of the WoW presentation:

  • There has been less engagement by casual players.

Well… yeah. What did they imagine would happen when you release one of the most alt-unfriendly expansion in the history of the game? And then proceed to put everything behind a triple-gate of dailies and rep, all but remove leveling dungeons (only to put them back), and then essentially stop all production of 5m dungeons for the rest of the expansion? Oh, and don’t get me started on the continued embarrassment of no-pop servers languishing.

At this point, all I’m really interested in is Hearthstone (as hopefully a cheaper Magic: Online) and maybe Bungie’s new game; Titan has been too much of a cocktease for too long to even get a rise out of me anymore. Otherwise Activision-Blizzard might join the ranks of EA as a big-budget publisher who only produces one title that I am remotely interested in, with all the “risky” indie ventures soaking up the money I leave on the table.

And as Doone points out, that’s probably the best thing for everyone involved.

Closer Look: Blizzard’s Q4 2011

When we last left our intrepid heroes in Q3 2011, WoW had lost 800,000 subscriptions and the following four salient points were made in the earnings call:

  • Majority of the sub loss is occurring in the East.
  • Implicitly, the difficulty of Cataclysm content was the cause of sub losses.
  • Expect some (more) “aggressive” World of Warcraft marketing.
  • Patches are more about recapturing the recently churned.

I suppose the holiday box sale and Annual Pass count as aggressive marketing, but let me not get ahead of myself. If you want to read along from home, Seeking Alpha will hook you up.

1. Is Bungie not working on Titan?

Eric Hirshberg from Activision Publishing buried this gem 25 paragraphs into vapid gushing of COD and Skylanders:

Looking further out, we continue to lay the foundation for our new universe from Bungie, one of the world’s best developers. Bungie continues to make incredible progress on what we expect to be a genre-defining new IP that will provide us with tremendous new opportunities and which remains one of our key strategic growth pillars for the future.

This may or may not seem a non sequitur, but I have always entertained the notion that the Bungie acquisition might have had something to do with Blizzard’s Titan development. Why?

Let’s look at the entrails. First, both Joe Staten and Rob Pardo have been playing it coy as recently as 2 years ago about Bungie working with Blizzard. But we also know that Bungie’s secret project “Destiny,” is slated as a sci-fi MMOFPS that is, quote, “WoW in space.” If you have a tinfoil hat handy, things can get even more bizarre when you consider that Ensemble Studios was working on a Halo MMO to directly compete with Blizzard… that was code-named Titan. And when Ensemble Studios was disbanded, several ex-members joined Blizzard. And now Bungie is here with a 10-year contract, making a brand new MMOFPS IP to be a “strategic growth pillar” for Activision Blizzard at the same time Blizzard is making a “casual” new-IP MMO that isn’t supposed to compete with WoW… that is code-named Titan.

Technically a lot of this is old news, and the earnings call did not reveal anything new either way. But in reading that paragraph under the Activision Publisher heading, it occurs to me that it is entirely possible that we could see two new, separate MMO properties out of Activision Blizzard even with WoW still sucking most of the oxygen out of the MMO room. In some respects, that outcome is crazier than Titan turning out to be a Blizzard-Bungie joint MMO.

2. Around 1 million Annual Passes sold… in the West.

Another initiative that has been very successful is the World of Warcraft Annual Pass. This program was announced at BlizzCon this past year. Under its terms, players who commit to being a World of Warcraft subscriber for 1 year will get a free copy of Diablo III, unique digital items in World of Warcraft, and other benefits. To date, we have signed up more than 1 million players in the West for the World of Warcraft Annual Pass.

The more I think about that number, the crazier it ends up being. While the Annual Pass appears to be non-binding (your access to D3 will simply go away), can you otherwise imagine another MMO who can count on 1,000,000 Western subscription accounts being locked in for 12 months? That would make SWTOR automatically profitable for an entire year.

3. Mists of Pandaria information out on March 19.

Some of you may have seen recent news about the upcoming World of Warcraft expansion, Mists of Pandaria. Last week, we began inviting global press to visit our office to get a hands-on look at the game. The press visit will take place next month, and our players will be able to read the latest news on the game on March 19. We’re looking forward to showcasing the game to our community and collecting more feedback as we prepare for the upcoming beta for Mists of Pandaria.

By the way, that means there is an automatic 1 million beta-testers for Mists, yeah?

4. Chuck Norris was super effective!

Neil A. Doshi – Citigroup Inc, Research Division

Mike, I was wondering if you could provide us a little more detail around the subs for World of Warcraft. What was the impact from some of your marketing efforts? And then how many subs did you add from Brazil? And if you have any comments on trend that you could share with us, that would be great.

Michael Morhaime

Okay. So we were very pleased with the results of the marketing initiatives in Q4. The Chuck Norris spot was very effective. We’ve got over 29 million views of the spot on YouTube. And I think, just looking at how well the subscribership held up during our most competitive quarter ever, we’re very happy with that. Engagement of the player base is very strong. We do not break down regional. We do not provide regional breakdown of subs, but we’re off to a good start in Brazil. And I don’t have any detail on churn.

Nothing to add to that.

As reported everywhere, WoW did implicitly lose another 100,000 subs in the quarter. There have been a lot of “See? Not dying!” posts over in the MMO-Champ and WoW Insider comments, but it’s worth pointing out that A) if someone unsubbed for SWTOR, then they won’t count as “missing” until January, e.g. Q1, and B) WoW launched in Brazil this quarter, as noted above. There are several more high-profile MMO launches coming this year, and let’s not forget that everyone is stuck with Dragon Soul until Mists actually launches… which could be six months from now, or more.

In any event, sub numbers really only matter to me in the context of having objective data by which we can interpret future design philosophy, and MMO player desires by extension. If Blizzard’s reaction to losing 1.8 million subs is to make the game easier, then we can assume that they believe a hard game is why people left.

It’s crude, it’s imperfect, but it is all we really have as armchair game designers.