Culture of Instability
Culture is a collection of ideas, beliefs, and values that shape the way a group of people approach the world. Every special group develops its own distinctive culture, and we in the interactive entertainment biz have been establishing our culture for some years now. But one aspect of this culture gives me cause for apprehension: it is founded on instability.
Consider the stability of other artistic and entertainment media. The basic technology and audience for literature has now been stable for five hundred years. Yes, we’ve seen improvements over that time, such as better illustrations, photographs, and cheap paperback books, but these are secondary considerations. The basic milieu has not changed.
Music shows much the same pattern. The fundamental technologies of music have not changed in two hundred years. Yes, we’ve seen continuing improvements, but there’s nothing today that Mozart couldn’t Handl.
Movies are more recent, but again we see a culture that is basically stable. The fundamental technology for movies is a hundred years old, and the last major changes were talkies 60 years ago and color 50 years ago. Since then, the changes have been embellishments. Surely the great directors and actors of the thirties and forties would have no problem demonstrating their greatness in today’s moviemaking culture.
But look how much home computers have changed over the years. Just ten years ago, the typical home computer had an 8-bit bus, a 1 MHz clock, 64K of RAM, a 320x280x2 display, 100K of nonvolatile storage in the form of a floppy disk, and cost $1000 in 1984 dollars. Nowadays, that same $1000 will buy you a 32-bit processor running at 66 MHz, 4 MB of RAM, a 640x480x8 display, and a 200 MB hard drive. By any standard of measurement, that’s at least a thousand times better!
The result of this tremendous increase in the power/price ratio has been a huge surge in purchases of home computers. In 1991, 4 million home PCs were sold, and every year since then, annual sales have increased by about a million units. The installed base of home PCs is estimated to be 30 million units.
Thus, we see two prime sources of change in our industry: ever-improving technology and ever-increasing sales. Such change has been with us (with the exception of a brief downturn in the mid-80s) for fifteen years. And the constancy of change has seeped into the pores of our industry’s culture. Our industry is shaped by it; we expect change. Our projections, our attitudes, our whole way of doing business are dominated by the anticipation of continuing growth.
Specific Mores of Instability
This constancy of change has led the community to embrace two assumptions about the nature of our work, assumptions now so deeply ingrained in the culture that few even notice their existence. The first of these assumptions is that technological change is an intrinsic part of the design process. After all, tomorrow’s hardware has always been so much better than today’s. The subtle effect of this is to exalt the role of technological development to a level comparable or even superior to that of design. The perfect example of this phenomenon is provided by Doom, a product with high technological innovation and no design innovation. The net result of this is an industry that places more emphasis on technical excellence than on design excellence.
The second assumption is more complex, arising from the buying patterns of consumers. There are two groups of customers: aficionados and beginners. The aficionados love Civilization and X-COM, big complex games that provide "deep challenge". The beginners, well, they don’t really know what they want. It has to be big and bright and shiny, something visually impressive but not too difficult in terms of gameplay.
Now, the aficionados are a stable market, but they are relatively few in number. A big hit with them, such as Civilization, might sell some hundreds of thousands of units. Those are impressive numbers, but compared to the installed base of home computers, they leave much to be desired. Most of the sales of entertainment software go to beginners who buy a few games in their first year of ownership, and then appear to refrain from further purchases.
Now, there is nothing intrinsically wrong with these cultural values. All values are a response to environmental conditions. For example, Genghis Khan strictly banned the washing of clothes during rain, an apparent eccentricity until one realizes that the Mongols’ deep-seated fear of lightning led to many drownings. The ban was a reasonable response to environmental conditions. In the same fashion, our values (emphasis on the technological over the design, emphasis on flash over substance) are both reasonable responses to the commercial environment in which we find ourselves.
What happens when change slackens?
But now comes the kicker: what happens when the pace of change flags? Our values, fundamentally based on the historical experience of continuing change, will fail us badly if and when change ebbs.
Of course, we must ask, will change ever fail? Why can’t we just continue marching into the future, with 64-bit busses and 128-bit busses and 512-bit busses, with 8 MB of RAM and 32 MB of RAM and 128 MB of RAM... why can’t this continue? Time was, not so long ago, when people scoffed at the notion that you would ever need more than 640K of RAM. Technological optimists point to the future with pride, noting that the fundamental physical constraints on microprocessor development have not been approached, that there is no reason why RAM costs cannot continue to plunge as they have been doing for two decades.
The issue has less to do with technological capability than with human need and convenience. For example, there is no technical reason why we could not produce passenger automobiles capable of traveling at 200 mph. However, we don’t do this because a) for most trips, 55 mph is fast enough; and b) most drivers cannot handle extremely high speeds safely. The lack of technological constraints is therefore irrelevant to the true needs of the consumers.
Much the same process is already at work with home computers. Consider the curve of technological growth of word processing software. The steepest growth came in early and mid-80s. First came the basic word processors, little more than text editors. Then came proportional spacing on dot-matrix printers, and some minor text-dressing (underlining, bold printing, and so forth). Then came the Macintosh with WYSIWYG word processing, and then the laser printer. But since then we have seen few major improvements. The fact is, word processors of today have more computer resource available to them than ever before, but there just isn’t much more that people want. I use Microsoft Word quite heavily, and yet I’m perfectly happy with version 4.0, and see no need to upgrade to the current version, 6.0.
The same process is at work with many other areas of personal computer use: spreadsheets, databases, painting programs: sure the software could be made better, but there just isn’t much demand for it.
I’m not saying that home computers will not continue improving; I’m instead saying that the growth curve is dictated not only by technological constraints but also by user needs, and those needs will probably be adequately satisfied before the technological limits are reached.
I think the best comparison we can make is with the VCR, the most recent high-tech electronic entertainment device to bust into the mass market. The early VCRs were rather clunky, and over the years manufacturers came up with a variety of doodads and geegaws to improve their performance. But eventually they settled down to a standard level that meets most people’s needs. Sure, there are super-duper VCRs with a million buttons that the technophiles love, but they’re a small part of the overall market.
In the same way, the home computer must eventually settle down to a standard configuration that pretty well satisfies most people’s needs. That may not happen in two years, or even five years, but it will probably happen within ten or twenty years.
Even more likely is the eventuality of home computers achieving market saturation. Right now, we’re in a growth phase, with more and more home computers being sold every year. But there are only 90 million households in this country, and the day will come when just about everybody who can afford a PC already has one. When that day comes, the market will shift from new sales to replacement sales, and the economics will change dramatically.
The entertainment software industry (as it is currently structured) will be hardest hit by this change. Remember, most sales of entertainment software go to new buyers within six months of their initial hardware purchase. When there are no more new buyers, there will be no more entertainment software purchases. To be sure, it won’t be that extreme there are still the games aficionados to keep the industry going. But, unless the industry changes its stance, the big money will drop out of the marketplace once the market is saturated. "Been there, done that" could be the epitaph for the industry.
How much time is there before we reach market saturation? Not long indeed. 1994 sales of home computers look to be about 7 million units, and 1995 is projected at 8 million. If you extrapolate the sales curve linearly, then by the year 2000, we’ll be selling 13 million home computers a year and will have sold more than 70 million machines into the home. That seems awfully close to saturation to me. Thus, we’re talking about market saturation in five to ten years.
The essential truth here is that growth cannot continue forever. Someday the curve will start to level off, and when it does, our values will leave us ill-equipped to survive that new and different environment. We can quibble about how much time we have before the heady days of growth end, but there can no question that the end will come.
The Change from Instability to Stability
So how do we manage this change of market environments? It should be obvious that the two core values (technical excellence over design excellence, and flash over substance) will have to go by the wayside someday. We don’t need to heap abuse on these values they are perfectly appropriate for market conditions today. But at some point we will need to replace these core cultural values with a set of values better suited to the environment in which we will find ourselves when stability does settle in.
What will these new values be? That’s hard to say. We can certainly guess their outlines. Imagine a world ten or twenty years hence, when home PCs have stabilized at some fabulous level of power and price (a Cray-1 the size of a thimble packed in every box of Cracker Jacks). Everybody is hooked up to the network, communicating far faster than they can articulate cogent sentences.
In such an environment, the ability to squeeze a few extra cycles out of the machine will be a useless skill. When you’ve got several teraflops/second on call, saving a flop or two will not gain you much. Thus, technological excellence will no longer be a primary skill. Its obvious replacement will be creative excellence.
The other big change, arising from the shift from a one-shot marketplace to a steady-state marketplace, is harder to call. Certainly the demand for flash will diminish, but that doesn’t mean that flash will disappear. Surely interactive entertainment will focus more on substance, on character development and story value, but these are vague terms that don’t tell us much.
The one thing of which we can be certain is this: the curve of growth cannot rise exponentially forever. At some point, it must begin to level off. And when it does, the values that have served us so well during exponential growth must be replaced by new values.