In order to get some insights into the online card game market, I'd like to introduce my imaginary friend Bud. Bud is the VP of Marketing at a nonexistent game publishing company, and he'll be here to provide management perspective on whether we should green-light several potential online game projects. Like most marketing VPs, Bud has committed TRSTS data to memory, and when he says things like "the extreme-sports genre" or "the 18-to-21 psychographic," he does so with conviction.
"Pokemon," says Bud, "has been played by over six million kids in the US. You know Wizards of the Coast, the same guys who designed Magic? Well, they also designed that Pokemon collectible card game. In '98 and '99, kids would beat each other up on the playgrounds for the rare cards. One kid even consented to be burned with a cigarette in order to get a particular rare card. That's how valuable Pokemon is to these kids.
"Now Hasbro bought Wizards of the Coast in late '99. Wizards of the Coast sold those Pokemon trading cards, and they also had the rights to Magic: The Gathering and the old Dungeons & Dragons line." Second or third edition? Bud looks blankly at us and then continues. "A bunch of card games and dice games, right? How much do you think that company was worth?
"It was worth $325 million to Hasbro, that's how much it was worth. Granted, those were pre-recession dollars, but still a nice chunk of change for what basically amounts to a house of cards." Bud smiles; he's been planning that phrase.
"One out of every eight video games sold in 2000 was a Pokemon game. Nintendo says they had revenues of $4.3 billion on Pokemon in 2000. Printing Pokemon cards is like printing cash. The rare cards can go for upwards of $100." I mention that earlier this year, Hasbro wrote off $75 million in inventory obsolescence related to its trading card games, but Bud points to several pages he's bookmarked on Ebay.
"Now I have this idea. It may be a little crazy, but bear with me here, because I'm not as technical as you are. We could create an online game where, instead of buying physical cards, you buy virtual game cards. And you can play with your virtual deck against anyone in the world, on the Internet, twenty-four seven."
What kind of games? "Same kind of games you buy decks and booster packs for now. Magic, Dragonball Z, Pokemon, it doesn't matter, you could develop a game around any license you want. Different cards have different powers, and the games are balanced so that it takes time and money to create the ideal deck. And everything's turn-based, so you don't have to worry about latency. Your testers are always complaining about latency." Bud looks at us for a reaction and gets none.
How do you buy cards? "In an online store. You can buy cards in decks or booster packs. Each pack will have a bunch of common cards and a few rare cards. No retailers, no distributors, no inventory, no returns. All those costs can go to Saturday-morning advertising. I said the Pokemon card game is like printing money, but this is even better. Even Hasbro has the cost of printing its cards. But the cost of goods for virtual cards is zero -- 100% of that money is profit."
Won't kids get the idea that you're selling them a bunch of ones and zeros? Bud looks insulted. "No. There's value here. We'd do some high-quality art on the virtual cards, maybe some 3-D stuff that you could interact with only if you purchased the cards. Even if you bought a physical deck, there's still the problem of finding someone to play with at 2:00 a.m. But there'll be friends and opponents at any hour on the Internet."
Won't people cheat online? "I'm sure your team can make the game servers secure. We can encrypt all communications between the client and the server, can't we? Do server-side checking for hacker stuff? We're into our fourth generation of online games. I have a great deal of confidence in you to get the technology right."
Okay, let's ship it. A company called Genetic Anomalies started building an Internet, turn-based card game in 1997, and they called it ChronX. The game design and the play universe are original but clearly based on standard collectible deck games. The first virtual deck is free; you can buy booster packs for $9.99.
In 1998 the game was signed to The Station at Sony, where it appeared through 1999. In 1999 ZDNet declared the game "Best Shareware Game of the Year."
I recently checked the global ranking table. I count 113 players of ChronX within the past month.
"There's several reasons for the small user base," says Bud. "Did you hear about the game when it came out? I didn't. Two reasons why not. First, there was no major license behind it, and second, there was no retail publisher support behind it. Original content is a risk on any platform, let alone an Internet-only play. I would have a lot more confidence in an online card game if we had a strong license to associate with it. I don't know, Star Wars or Star Trek?"
Okay, let's ship it. Star Trek: ConQuest is the title, and Activision is the publisher. (http://www.conquestonline.com) Genetic Anomalies inserted a totally new theme into the ChronX engine, and in my opinion, they gave the license an appropriate amount of care. The virtual cards are detailed 3-D renderings and the layout and theme of the screens are faithful to the art design of the TV series.
The game released on June 15, 2000, at a price of $29.99. User IDs apparently start at 1 and increment sequentially; they haven't reached 20000 yet. I've been online three times, and I counted a maximum of twenty users online. Most of those twenty told me that they're all sharing the same activation key. The majority were playing a trivia game online and ignoring the card game. If you want to try the game yourself, Fry's and other retailers are currently selling it for $3.
Bud looks a little perturbed. "So Star Trek didn't fly? Well, does Genetic Anomalies have a track record for online hits? Or for card games in general for that matter? And the only big online game Activision has had is Quake 3. A lot of people complained about off-and-on connections to the servers, right? Maybe they don't know how to create a stable network infrastructure and handle the hackers. We need an established team with an online track record. If we overcame those obstacles we'd be looking at hit territory."
Okay, let's ship it. The Star Trek license is the same, but everything else is different: the game is called Star Trek Online CCG, and Digital Deck developed it. Decipher, the same company that owns the rights to the trading card game, currently seems to have the publishing rights to the online game. Digital Deck was founded by Ted Griggs. Ted also co-founded Microsoft's Internet Gaming Zone. He also built a company called Junction that he sold to Cisco. It's fair to say the guy is familiar with gaming security and latency issues. [Update 2003.01.03: The company's Web site now makes absolutely no mention of this technology.]
Digital Deck was designed to be a generic, retargetable online card game, and the first target is Star Trek. The game uses a funky digital signature system called OnlyOne, which ostensibly keeps you from duping the rare cards. The Digital Deck web site says that the system is "secure, robust, fast, scalable, and extensible." It also drops around 3000 files under a kilobyte in size onto your hard drive. Cards come in packs; you pay for packs and online play is free.
I've logged on twice, and I literally could not find anyone to play with either time. An indicator said there were seven other people in the Digital Deck universe, but I couldn't find them.
On August 6, Wizards of the Coast announced that their Magic: The Gathering card game was being extended into an online version. Leaping Lizard is developing it. Leaping Lizard is the same company that brought us Centipede 3-D for the Dreamcast. Chris Green, founder of the company, is a talented guy that knows his 3-D; he was always asking the hard questions when I ran Sega's DTS group.
Wizards of the Coast says the game is coming out no earlier than Q2 of 2002.
"That Magic license is a heck of a lot stronger than Star Trek nowadays for the hardcore gamer," says Bud. "Definitely a lot of potential here; I think the market's matured to the point that it has a decent shot. Do you think we could pick it up?"