Balloon-Class Problems

If you’ve ever played with balloons, you know tangibly how the elasticity of the balloon is a key characteristic.  Until you’ve filled it to the breaking point, you can squeeze one part of a balloon, and the filling just moves to another part.  I use this as a shorthand to describe the class of problems where there is a fixed amount of work that has to be done but multiple resource allocations that can handle it.

For example, when I was working at THQ, the accounting/finance department rolled out a new purchasing/reimbursement software package.  It was a high-end package from a company that worked with a lot of big, enterprise-level companies, and it could handle everything from requisitioning a dev kit to making milestone payments to filling out expense reports.  We spent days getting trained on how to use this software, from lowly QA folks all the way up to the VP level, and I’m sure that it made things much easier for the accounting/finance department by eliminating policy violations at the input level.  However, at the same time, it shifted that work from the accounting/finance folks to everyone else in the company.  The overall amount of work didn’t change; it just got pushed around and re-distributed.  The productivity numbers for accounting/finance probably skyrocketed, because they had (knowingly or not) drafted everyone else in the company to help do their work.

Tools development is a classic balloon-class problem.  Whenever you run across work that is highly repetitive, is executed according to well-known rules, and will take a lot of hours to do by hand, it is natural to look at tools-based solutions.  You can do a simple algebraic cost-assessment on this kind of work (artist/designer time saved per unit times number of units minus tools developer time); you can even get into a finer calculus involving the cost differential of programmer time vs. artist/designer time, throwing in variables for debugging, interface improvements, and other iterative aspects of toolchains.  At the end of the day, though, you are re-distributing work, and more often than not, there isn’t a clear “win-win” scenario because the marginal difference isn’t significant in the face of all the other work that has to be done on a project.

As a project manager, you constantly have to assess, balance, and re-assess the effectiveness of your resource allocations.  Balloon-class problems are a real headache because they tend to muddy the waters rather than bringing clarity.  So, when I recognize a balloon-class problem, one of the first things I look at is where the best match is between the workflows of the people who will have to do the work and the type of work that is required.

For example, populating levels with enemies is a common balloon-class problem in RPG’s.  You’re never really going to be able to eliminate the designers from population (not if you want solid gameplay), but it is a tedious, repetitive task, and optimizing your toolchain so that your designers can focus on refining gameplay rather than simply implementing it can be a huge win. However, when push comes to shove, I would rather have my designers implement and refine the populations rather than develop a toolset that can populate automatically, for the simple reason that the designers need to be hands-on with all of the gameplay experiences.  Particularly when you’re trying to develop large amounts of content, the natural inclination is going to be to go for systemic, broader solutions, but your gamers are better served by less content that is better tuned over more content that is systemically, programmatically generic.

At the same time, designers are generally creative people and want to be problem-solving and creating in interesting ways, not doing the same rote tasks over and over.  If you can afford to support them by providing appropriate tools so that they can spend more time raising the quality of the content you have rather than churning out content from scratch, you would be well-advised to do so.  But, in a pinch, give the work to the people who are best suited to achieving the best result.

Designers craft gameplay; accountants can run numbers and policies better than anyone else.  As a project manager, you have to know when to ask your team to swallow the bitter pill, even when they think there is a better solution, especially when that better solution is just redistributing the work rather than substantially reducing it.

Working with China: Scale

One of the most difficult challenges of working with China (or trying to work in China) for Westerners is the sheer scale of the population.  It took a good year of getting hand-fed strategic and marketing analysis to really start to wrap my head around the implications.  Obviously, I can’t cover that much territory in a simple blog post.  Instead, here are some practical insights that may help you get oriented.

  • PCU not DAU.  For Western developers, DAU (Daily Active Users) is a valuable statistic, particularly in companionship with something like ARPDAU (Average Revenue Per Daily Active User) because you can use the two to get an overview both of traffic and revenue.  In China, the key stat is PCU (Peak Concurrent Users) because that determines how many servers you need to be running, and knowing that enables you to scale quickly.  In the Western casual/social games space, a DAU of over a million is a top game.  Top games in China (Dungeon & Fighter, League of Legends) are running 2+MM PCU.  If you need to run a quick conversion, your PCU is likely to fall somewhere between 5% and 10% of your DAU; that’s a ballpark figure, good for back-of-napkin calculations.  Obviously, if you’re publishing in China, you’re going to want a more specific read on your PCU as well as a solid sense of your per-server user capacity.  While they’re both measures of activity, it’s an apples and oranges situation.  Make sure you understand how the numbers will translate.
  • China is not homogeneous.  In the US, there are two major metropolitan areas that are considered to have over 10MM population (LA and NYC); in China, there are over 20, and growing.  One of the ways that Chinese developers and publishers look at this dynamic in China is to separate major Chinese cities into a variety of tiers.  Tier 1 cities are places like Shanghai and Beijing: large populations, well-developed infrastructure, ubiquitous broadband access, etc.  Tier 2 cities, like Chengdu, are still huge (in Western terms), but the standards and costs are lower.  For example, in Chengdu, you can hire English-speaking developers for 10-20% of what they cost in Shanghai.  That’s just the difference between Tier 1 and Tier 2; obviously, by the time you get to Tier 4, you’re in another ballpark entirely.  While there are certainly large disparities in terms of cost of living and broadband access in the US, the scale of difference in China is much higher.  You need to understand how your partners and/or audience fit into this structure.
  • Broadband in China is still a growth market.  Until recently, the growth in users of broadband was still in the double digits year-over-year in China.  While it has dropped below 10% now, these are still massive numbers.  There are more users of Tencent’s QQ messaging system in China (400+MM) than there are people living in the United States.  Even at 8% growth, and considering just QQ users, that’s 32+MM new users of the internet every year.  These are people who have no experience with the internet and don’t have any expectations about what playing games on the internet means.  In the West, part of the reason why everyone is flowing into the tablet/smartphone market is that they’re showing the potential for multiple years of double-digit growth, but the scale of basic broadband users in China challenges even those numbers.  The rate of growth in China is starting to tail off, which is why a lot of Chinese companies are looking at other growth-oriented markets, but it is still a force to be reckoned with.
  • Whales in China rival Whales anywhere else.  It’s definitely true that in a user-to-user comparison, your average user in the West is going to be worth more (i.e. have more expendable capital) than your average user in China.  At the top end of spending, though, China is right up there.  It is not uncommon for top items in MMO’s in China to require investment of over 100K USD in addition to the time required; in fact, time can be purchased in China, as labor is so cheap that among the elite, you can hire people to literally play your games for you.  This is not some sketchy, fly-by-night power-leveling service; you can hire people to come into your home, use your equipment, play solely on your account, and abide by all the terms of service.  Particularly in the more Western-facing cities, there is so much capital flowing through them that there are no practical barriers to spending money as fast (if not faster) than in the West.  The so-called Great Firewall of China does not stop the high-spenders, as they can just VPN tunnel out.  If anything, the Chinese gaming market tends to be more ruthless in its monetization for whales, with individual users supporting entire guilds so that they can dominate in the virtual space of their choosing.

I’ve kept this at a very 10,000 foot view because you need to do your own due diligence and deep-dive to understand the marketplace if you’re going to do business in China.  As I’ve said previously, your partners are essential to helping you understand the situation on the ground.