U.S. and the Internet

I was just reading an interesting story that I found quite disturbing. This story says that the European Union is going to challenge the United States for control of the internet. When the Department of Commerce's operating agreement expires on September 30th the EU does not want the U.S. to retain control of the internet. They say that it is unfair that one country controls such a vital means of communication. I believe that the U.S. should retain control for several reasons, the most important being national security. Thanks to the internet the U.S. and many other countries are susceptible to attack through the internet. Hackers and foreign powers have already started to exploit the weaknesses in the infrastructure within the U.S. the last thing we should do is open the back door. Since the United States Department of Defense's DARPA program created the internet they should maintain control of it. The U.S. have been generous landlords and have imposed no restrictions that really change the day to day operations on the internet. It is no longer a military project bit I firmly believe that they should maintain control.

Daft Punk

Check out this cool little sound board from Daft Punk. It mimics their sounds from the song Better, Faster, Stronger. It is also heard in Kanye West's own song. Pretty cool little promotion I think it was put up by Daft Punk's fan club. Here is the link

World of Betas

When a new product is introduced there is always a period of uncertainty for whether it will be adopted or fall by the wayside. This is especially true for technology products. What if you could run a trial for your product? What if you could work out the kinks with your customers before you put the put the product on the market. Welcome to the world of betas.

A beta is a either a closed or open, or both, trial run of the game gaming companies do when they are trying a product out before releasing it. This of course comes after an Alpha testing stage. Which is a closed internal test of the game that uses predetermined testers. These kinds of tests allow companies to work out the kinks in their products and have accurate feedback from the testers. The Alpha version of the game is the raw first copy of a game and the Alpha testers have a great deal of impact on how the game ends up. Through their feedback the game is tailored and fixed into what the finished product will most likely look like.

The Beta test comes after the Alpha. Now the game is mostly done but they need more trials on potential customers. They want data from customer feedback but also technical feedback from these users. This helps fix glitches and errors that might have been overlooked by the Alpha testers. The Beta test allows for a wider trial then the Alpha. Beta tests usually incorporate non industry gamers who might have accounts at places like fileplanet.com or gamespot.com. These gamers are given keys which allow them to access the game and play it before it comes out. They give necessary feedback and get an awesome experience for free and before it comes out officially.

The beta tests usually can go through two phases. First the Beta version of a game will be closed at first. You will need a key as previously stated. Keys can be given out at random to people who sign up or through specific sites or contests. The closed Beta allow the developer to control who is in the Beta. They can pick and choose people or groups that will fit their purposes. It could be for hardware reasons or the fact that a group brings a certain number of players with them. After most of the trial is done through closed beta they can open the game up to open beta. They give out keys for free and let anyone log on and play the game. This is basically a free trial of the game just before it is released.

If the game is good the result of an open beta usually is a pre-invested player base ready to buy the game as soon as it comes out. Betas are usually used for Massively Multiplayer Online games. Here is a link to the Wiki definition of an MMO detailing how cool these virtual worlds can be. Betas are what gamers drool over. They (we) apply tirelessly to these games trying to get in early, get a competitive edge, and to see what games are good. If the game is good after the beta they have a predetermined player base of highly tech savvy people who will be ready to spread the word as soon as the game releases. If this isn't win win for the developers I don't know what is. Free marketing, customer feedback, and it is all free.

I recently got myself a key to the Battlefield Heroes closed Beta through my account on Gamespot.com where I review games. I can't wait to log on and see how the game is going. I am bound by a confidentiality agreement but it should be fun.

Steam Pricing Strategies

Steam uses the same pricing strategies as its brick and mortar competitor Best Buy. They use a fixed pricing strategy. The strategy is very apparent and easy to spot just by looking at the store's homepage. They have all of the aspects of fixed pricing including markups, bundling, and promotional pricing. First off for most consumer products there is a huge markup and for video games, movies, and music. The markup comes from the desire for profits and to offset the production costs.

With video and computer games it is just like every other product. The difference between computer (what steam sells) and video games (what Best Buy and Xbox Live Market Place sells) is that video games are based on a cross-subsides system. Sony and Microsoft spend a lot of money to develop, produce, and perfect their gaming consoles. The production of these platforms comes at a great expense more then they sell for. Where companies make their money back is in the sale of the actual video game. The game while it does take money and time for development of a game, it is being sold on a DVD, which cost about thirty cents. This is not the case for Steam because there is no connection between the computer manufacturers and game developers aside from Microsoft.

The markup exhibited on Steam is the standard retail price and is disproportionate to the production cost and is mainly done to allow for profits. Since all Steam really sells is data the only fixed cost that would come from this would be bandwidth. They could sell the products at any price but probably choose not to upset the predetermined market. You can tell products were marketed up later on in their life. For example look at the total cost of this bundle then the price. Before the bundle was created all these products were market up.

Steam also uses bundling to sell products. They bundle old games together with new one and try and sell them off in groups. They usually bundle based on developer selling packages will several games one company has made. Of course Steam also uses promotional pricing to induce purchases when games go on sale. Left 4 Dead at one point was 25 dollars with additional discount for bulk orders. Right now the game is $49.99 on the home page.

While Steam does have the fixed pricing strategy that most retail companies employ they also have elements of free pricing strategies. Valve the company that owns and created Steam does not charge for the actual download of the program. The program itself is free but acts as a storefront as well as the launching application for the games. They also provide free downloads in the form of demo games, videos, trailers, and game modifications. Demos give steam the ability to act like freemium web software or services. Because Steam is free it emulates the two tiered paying program, the program and demos are free while full games still cost money.

What is so efficient for Valve is that Steam doesn't have to distribute any kind of physical property. They have the ability to just send the products they sell over the internet in the form of data. This means they don't have deal with traditional retail problems like storage. Since the digital content is distributed at low cost to many people it has almost no marginal cost.

The specific prices for Steam's products are the same as any traditional retail store. When a game comes out for the Personal Computer platform the standard retail price is $49.99 plus tax. Right now Steam is selling the newest wave and the most successful games at the price of $49.99. FEAR 2, Wanted: Weapons of Fate, Empire: Total War, Left 4 Dead, and Tom Clancy's HAWX are currently being sold on the homepage for the original release price. These games are at their peak price and will only sell for less as time goes on unless they become wildly popular. Previously mentioned Left 4 Dead exhibited popularity and retained its original price.

Pricing for video and computer games changes over time. The games start high and then over time the cost goes down. The life cycle for games on Steam is different then traditional retail. Older games that are long gone from the shelves of Best Buy and GameStop are being sold for 10 to 20 dollars on Steam. Old games from 1999 are being sold because of the amount of popularity they had. Games like Mirror's Edge and Dark Sector, being sold on the home page, were both originally $49.99. Since they weren't tremendously popular and they now cost $19.99 and $39.99. Game prices lower over time but really popular games can keep prices high. Unlike Wal-Mart who lowers prices to clear out old inventory Steam follows the market, keeps old titles at low prices, does promotions, and changes prices for reasons that not include saving space and keeping fixed costs low. Again Steam is free to download as well as numerous demos, videos, and mods.

Since Steam's pricing strategies are pretty much the same as other brick and mortar retailers they would have about the same amount of success. The real draw for Steam users is the ability to play their games on any computer with the Steam client in any location with an internet connection. Their success does not have to be as much as a retail location however because of a lack of the fixed costs most retail locations have to deal with. With over 1.8 million users on Steam they have a captive audience they can sell to without competition. The amount of data that can be gathered through Steam is another thing that could make is profitable on its own. http://store.steampowered.com/stats/

Steam Power

The music industry, film industry, and the PC gaming industry are all having problems with pirating in recent years. The problem has only gotten worse despite developers trying to stop add more security. Online file sharing is not limited to movies, television, and music there are larger and bigger software pirating issues. Entire programs can be downloaded through bit torrents and file sharing. In the end all it comes down to is hacking the program (also known as cracking a copy of a program to another persons computer) or falsifying a CD key.

Profitability has become a problem for companies that choose to manufacture PC games. They just are not selling enough copies because of how easy it is to pirate games. By downloading and replacing several files in a game you can get it to run regardless of if you have the CD. With the increasing problem of pirating and the ease of which that is done on the PC platform developers are starting to migrate. The console platform has become all the rage with Xbox 360, Nintendo Wii, and PlayStation 3 having major success in recent years. PC game developers are claiming its too hard to protect their interests and assets by making products that can be copied and distributed easily without obtaining any revenue.

I inherently prefer computer games because that is where I believe the user has more control via a keyboard and mouse then a controller. I also believe that computer games have the ability to have a higher level or quality through size, complexity, or visual depth. So now that I have briefed you on the problem led me introduce you to what I believe is one of the solutions for the PC gaming industry's problem; Steam Power.

Steam was started by a gaming company called Valve which is a game developer. Steam is a Pure Play retailer for PC gaming that exists only over the internet. Steam is not limited to just selling Valve products, more and more companies like Electronic Arts, Ubisoft, and Rockstar have signed on to allow their PC games to be sold through Valve's Steam retailer. Steam exists solely over internet and has no storefront making it a pure play retailer like Amazon or iTunes.
Steam is basically iTunes for games. What makes Steam so special in my opinion is that I think it can solve the pirating problem for PC gaming.

Steam like Amazon and iTunes fight against more traditional retailers like Best Buy and GameStop, but also against other pure play retailers on the web. Steam's web business model is like iTunes, the merchant model that is a bit vendor selling products that are sent by being compiled into bits of data and transmitted to you through the internet. What makes Steam better then both iTunes and other pure play gaming retailers is the availability and mobility of their platform. You can access all formerly purchased products at any time from any computer with Steam. iTunes only downloads to a designated computer and provide no backedup history of purchase.

What makes Steam so great is that it is more then just a pure play online merchant. The site is also a progam that you download. This is Valve's Steams competitive advantage, it acts as a base program launcher for all your games. The site's store and community is basically the same as in the program but just an extension. Steam is just like iTunes because it is a program and player that is a vendor and not just a website. Steam also has aspects of a community business model through its social networking properties. It gives users access to a user generated community.

Everyone who buys or plays games through Steam must have an account. A user can log into his account on any computer with Steam. From that profile the user can download and play any game that he has bought or registered with Steam onto any computer. This is the reason that I think the solution to piracy is in this program, everyone is registered. All of this helps to feed the Steam user community and provide plenty of metrics to calculate success in sales. The Steam user community is like social networking for gamers. There are user created groups, user profiles with personal gaming information, like what are the users recently played games and how long has he played, friends can also be displayed.

Since everything is digital and interconnected, it all can be tracked by Valve to evaluate Steam's success and profit viability. Using Steam and other web analytics Valve can learn how long users play games they have bought, what they look at in the store, and anything else they could want. Steam provides a platform for gaming and a community which makes it easy to quantify results because people are usually on in one respect or another. Even in the user is not playing a game they usually log into Steam and it runs in background. The main metric I would use is tracking the length of time that users who bought games from Steam played them, also the general amount of time spent in games makes users easy to profile. You can also look at time played, what games people looked at in the store versus actually purchasing it. Those kinds of percentages can really help companies refine sales techniques even online.

This program can be the solution to the piracy problem because it registers everyone. All games sold are registered with a specific user account. One account can only be active on one computer at a time. There are no CD keys to enter no companies to register with Steam allows you to download, update, and play. This is the future for PC gaming retail sales in my opinion.

Ethics? Haha I don't think so

I assume there will be several other posts on this topic but I have to put my 2 cent in.
On February 4th Facebook made a unilateral change to its Privacy Policy and Terms of Service agreement. The social networking site changed the legalese on their site to essentially claim right to all user posted content on their site forever. The gist was that even after deactivating your Facebook account your content, information, and pictures would still be at their full disposal to do what they please. For further reference I have found off of Fox News' site Facebook's exact words on the subject.

"You hereby grant Facebook an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings or (ii) enable a user to Post, including by offering a Share Link on your website and (b) to use your name, likeness and image for any purpose, including commercial or advertising, each of (a) and (b) on or in connection with the Facebook Service or the promotion thereof."

The founder and CEO Mark Zuckerberg says this change was only made to "enhance the user experience" but that isn't the whole story, it never is. Zuckerberg stated in his blog post that the changes were made in response to some issues about who controlled content on and linking to their site. If a way for them to clarify what they control on their site is to claim ownership to everything posted then they went a bit far.

There are numerious issues related to copyrighted material on the internet. This is just one of the many early privacy disputes that will end up occuring. Companies like Facebook are just trying to gather as much information up as possible before someone notices. Unfortunately for Facebook people did notice and thanks to public outcry they were force to revert to their old TOS agreement for time being. The ony reason a public outcry worked was because Facebook has not been bought yet. If Google had come in and changed things around I don't know if they ever would have reverted. Facebook's change in agreements said that they had an international fully paid licence to users content. This goes well beyond protecting themselves, they tried to issue themselves a proprietary licence for all content on their site. They wanted unconditional ability to do anything with your picture or what you said to your friend, is this the kind of world were living in?

Yes it is. In todays world information is power and access to the number of consumers Facebook has is considered gold. Companies want increasing amounts of data from all sources on everything from sales to consumer psycho-graphics. Sites like Facebook will be primed sources in the future if they can spin the appropriate amount of legalese in their Terms of Service agreement. What is next are they going to change privacy policy and start tracking peoples every move on their site, on the internet?

The new frontier for legal issues is the internet with its file sharing capability and everyone depositing their personal information on at least one internet site. Ownership of content, privacy rights, copyrights and licensing issues have become the main points of contention for companies on the internet.

The illegal downloading of music is a major issue on the internet but privacy policy is right up there. People's right to keep their information to themselves is at odds with the very companies they patronize. These companies want to know anything and everything about you so they can better sell you their products. Today databases are a valued commodity and your information could be in one of many for sale to the highest bidder or for whoever can afford to pay.

There is even a crack down on illegal downloading in Sweden. An expert testified on behalf of the major music publishers in the United States. He blamed pirating and sharing for the nine billion dollar drop in sales over 7 years for the major record companies. The site "Pirate Bay" is being sued for breaking Swedish copyright law. Illegal downloading is at the forefront of this conflict over ownership on the internet. The music companies are seeking around thirteen million in damages from the people that run Pirate Bay.

Who owns what is a big deal on the internet today with all of the sharing and collaboration going on there can be doubt as to who has the rights to certain material. These issues have started the legal battle over the internet and its effect on copyrights, trademarks, and patents. When referring to something found on the internet it could have travel through many people before reaching the user. These gray areas have allowed file sharing sites to get away with limited amounts of illegal downloading before getting suit or shut down. The future will hold some interesting challenges to a persons right to privacy on the most public medium yet.

Pick your shoe

Both of these companies are trying to capture the idea of mass customization by allowing the shopper to design athletic shoes online. NikeID was the first website that allowed people to customize shoes. There is no real premise behind the idea for Nike, Puma went with Mongolian BBQ. Their premise for shoe design is that your a chef creating the perfect meal and the shoes you design is the equivalent to a good meal. Nike went with the straight forward approach in just letting people cross right over from regular shopping to designing a shoe. The transition works well because many of Nike's shoes are offered in the NikeID customizer.

The Puma creation tool is different. It allows you to select from three different shoe types and then start customizing from there. While Puma may have some cool and original design options i believe that since Nike offers more styles of shoes that it is a better choice for designing your own shoe.

The type of website design for the two companies is basically the same. While they look different they are both flash intensive having a load time required, the organizational layout is also the same. The two website also share a similar format. They both are colorful and well designed flash sites and work well and provide a very positive user experience.

With Nike the idea of designing your own shoe seems to fit in with the experience. It is like a usual extension. You can actually be looking though shoes not on NikeID then see one pre-made that is and ID product. You can load that design, then change one thing, and purchase. Puma you can select pre-made styles but still only on three shoe styles. Nike offers more options for the experience. The Puma design in my opinion feels tacked on as something that might not be around forever. NikeID seems to be pretty standard now on their website. Mongolian BBQ does not inspire me to go design a shoe. For me the process could take weeks to decide on a final product. With a name like Mongolian BBQ why should I expect Puma to keep their designer up indefinitely.

While the websites of these two companies are both generated by their own designers the ability to design your own shoe is an example how internet companies are trying to become more web2.0 with user customization. These companies realize that user generated content could be the future of the business.

This push towards mass customization is the latest idea for companies that are trying to give their customers what they want, and more importantly something original. While the customer experience might be completely different on the two different sites you have to look at what is the same. Besides aesthetics the sites are almost identical. The customization option, the flash intensive sites, the breakdown of sports, these are all similarities between the Puma and Nike websites.

The Nike site also allows the user to do something very cool that the Puma site cannot, save your shoe with a background as an image that can be used as a background. This is an easy way to save your shoe without registering. You just save the image and you have your shoe design saved on your computer. This extension is one of the features for the Nike site.

I believe that the Nike site is better due to that you don't need to leave the web page via a link to design the shoe. Everything is right in front of you when looking at the NikeID site. The Puma site links you over to another page, opening another window. I feel the design of the Nike site just meshes with NikeID and it all works together to provide a great web experience for the user. Also NikeID allows you to customize more then just shoes, there are options for custom made t-shirts and backpacks, options which Puma does not have.

The visual design between the two sites is radically different. The features and options and the breakdown of foot ware shopping are the same but the face they present is different. I prefer Nike's site because of the well designed box formula they have. Everything is contained in the center of the screen and each different item is separated into its own box in the design. With the vibrant colors and high quality images it really does look like a quality rendering. The Puma site is mostly white space with a side bar menu and a few centralized buttons on the screen. While the colors work very well together and the site is not poorly designed but it does not have the "POP!" that the Nike site does, just jumping off the screen into your face. Plus Nike has Kobe as a celebrity endorser in a very entertaining video. They beat Puma hands down.

Dell was 0ne 0f the first companies to offer such wide options for personalization. People can design personal computers and have them shipped to their door. This personalization represent the idea that people want some options in buying their products, they want choice.