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May 7, 2012, 3:11 p.m.
Business Models
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Super Mario, cub reporter: Jesse Schell on what the game industry could teach the news industry

The game designer and thinker says there are a number of parallels between the disruptions facing both industries.

Take a look at the video game industry, and it’s hard not to think of journalism.

Both built themselves up by controlling their distribution platforms — whether that meant a game console or a newspaper’s printing press — in ways that made competition difficult, maintained pricing power, and generated lots of profits. And both are now being disrupted by “good enough” new competitors that use more open development platforms (the web, the modern app store), run on carry-everywhere mobile devices, and are much, much cheaper. What The Huffington Post is to your local daily, 99-cent Angry Birds or free-to-start Farmville is to the $59 Playstation console game.

Just as the Internet has fundamentally disrupted how we think about journalism, it has deeply rattled the video game industry. We aren’t just seeing a dramatic change to how games are played — on a platform like Facebook rather than on a single-function console like Nintendo, for example — we’re seeing a shift in who is making games in the first place. Sound familiar?

To start to think about the parallels, I caught up with Jesse Schell, CEO and creative director of Schell Games, who teaches at Carnegie Mellon’s Entertainment Technology Center. You may also know him from his widely shared 2010 lectures about what he calls the Gamepocalypse, our increasingly gamified reality. The idea is that as games become ubiquitous, they also become more like reality — you can play with your Facebook friends rather than against a computer, or create an avatar that looks like you on the Wii, for example.

“Historically, going back thousands of years, games are a social thing you do with your friends,” Schell said. “We got into a kind of thing for a while where all of the sudden computers made it so people were playing Solitaire a lot. Now that we have networking, people’s game playing behaviors are reverting to what they’ve always been. They’d rather play with their friends.”

He sees the barriers between gaming and reality dissolving — partly because we’re inherently drawn to games, but also because he sees a growing desire for authenticity in an increasingly virtual world as the lines between fantasy and reality are blurred.

So what does any of this have to do with journalism? First, there’s the idea that a desire for authenticity is not limited to gaming. In a 2010 lecture, Schell said he sees people placing increasing value on what’s real — everywhere from reality TV to organic groceries — as the manifestation of a need for authenticity.

All this is happening as barriers between professionals and amateurs are deteriorating, which complicates the question of authenticity in a disrupted industry. Put it this way: If the news industry can’t even agree on what makes a person a journalist, what are the new ways that news consumer will decide what’s real and what’s credible?

“Now that journalism is a much more participatory medium, anybody can step up and say, ‘Here’s my opinon about this now,'” Schell said. “The question is who can we believe? Who can we trust? No one has yet come up with a system that quantifies credibility.”

That’s a dicey proposition, for some of the same reasons that ratings-based fact-checkers can stir such controversy. What would a credibility quantifier look like? Who would judge — or build the algorithm to judge — what’s credible versus what isn’t?

Schell envisions a tightly integrated news operation and social network. “I think there’s a real opportunity for any company that owns both a social network and a news system,” he said. “Whoever owns a social network has the ability to control how you present yourself. If, let’s say, Facebook owns a news system of some kind, and Facebook decided it was based on how you interacted with the news system then it was going to be able to determine, ‘yeah, you are a sports expert,’ or ‘you are an expert on Kuwait’, or ‘you are an expert on whatever.’ And then when I put a post up saying, ‘I think Kuwait is screwed,’ if I can also put up an approved badge that I’m a Kuwait expert, that means something. If The New York Times had bought Facebook, they’d be in a good place right now.”

The idea calls to mind Amazon giving reviewers a special badge for using their real names, or Twitter offering those blue check-marks to verify accounts as official. And it’s worth noting that in Schell’s example, it’s the individual — not the news brand — that’s ranked for credibility.

But none of this gets at the big, enduring business-model problem that the journalism industry faces. Just as the Internet decimated ad revenue in the traditional newsprint model, Facebook games and mobile apps blew up the video game industry’s traditional retail model. Yet the gaming industry is finding workarounds that haven’t emerged in journalism.

We have the advantage of being able to do all of these crazy business models,” he said. “So like we’ve gotten into this whole space of free-to-play models, where they’re free but if you want to succeed at the game, you want to purchase in-game resources. It’s less obvious to me that it can translate into journalism.”

What can translate, though, is a sense that a sustainable future for the industry will require a multifaceted approach to distribution. The idea that, as Digital First Media editor-in-chief Jim Brady put it, there isn’t going to be a silver bullet — only shrapnel.

“People are trying a zillion different ways of getting people to pay for games, this whole multiplicity,” Schell said. “Many different ones are working well in different contexts. You know, we’ve got everything from 99-cent games to the free-to-play model to subscription-based games. Electronic distribution has allowed for more niche games, and the same thing is true in journalism.”

A critical step, Schell says, is turning the question of how we get people to pay into why people are willing to pay. In other words, what do you need to do — as a video-game developer, a newspaper publisher, etc. — to get someone to rationalize spending money on your product?

In a 2010 lecture, Schell said it’s first about getting someone to spend time on it. If you spend enough time doing something, you will start to believe it has value. (Why else would you be spending your time on it?) If you believe something is valuable, you’re more willing to pay for it. If you pay for something, that reinforces your belief that it’s valuable, and so on.

Schell put it this way: “Who does brainstorming for new psychological locks and keys? Not very many people do that, and that’s something worth thinking about.”

Super Mario image by BlueHouseBurning and Jesse Schell photo by Official GDC used under a Creative Commons license.

POSTED     May 7, 2012, 3:11 p.m.
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