(This post consolidates lessons published in the O.C. Register and the “Inside Innovation” blog.)
World of Warcraft sceneBlizzard Entertainment, the envy of the computer game industry, has learned 11 lessons on innovation that can help almost any business. Irvine-based Blizzard used these innovation methods not only to create the world’s most popular massively multi-player online game, World of Warcraft, but also to keep the game fresh and challenging for more than 10 million players. Because many of those customers pay $15 a month to continue playing, Blizzard’s ongoing creative achievement is worth more than $1 billion a year in revenues, not counting the multi-millions it tallies from its other games, such as StarCraft, Diablo II and Warcraft III, plus trading cards, comic books, etc. This combination of creativity and profitability is much of the reason for the upcoming merger of game company Activision with Blizzard’s parent company, Vivendi Games. The new company, to be called Activision Blizzard, will be valued at about $18.9 billion. The following lineup of innovation lessons emerged from a video game conference, an interview, and several experts’ comments. Blizzard executives discussed the company’s innovation processes during the D.I.C.E. video game conference last month in Las Vegas. Then, in early March, World of Warcraft lead producer J. Allen Brack explained his teams’ work methods during an interview at Blizzard’s new headquarters in Irvine. I also invited several business and innovation experts in Orange County to comment on how Blizzard works and how it and other creative enterprises such as the Walt Disney Co. innovate to keep their customers interested.
1. RELY ON CRITICS Blizzard welcomes criticism – seeks it, in fact – both during game development and after the launch, when games need to be fine-tuned and freshened up. In a process that is common for software companies, an alpha test provides crucial pre-release feedback from company employees. When the game software is ready, Blizzard moves to a beta test involving a limited number of outside players. Blizzard plans a beta test of its upcoming Wrath of the Lich King expansion pack for World of Warcraft, but hasn’t announced when it will begin. In addition, tens of thousands of Blizzard subscribers sign in to the game’s Public Test Realm area to test and give advance feedback on patches, upgrades and revisions for the current version of World of Warcraft. World of Warcraft scene“Seeking out customers’ viewpoints and criticisms is an ideal way for businesses to align products and services to what their customers want,” said Ardelle St. George, intellectual property attorney and chairman of the Orange County Innovation group. Innovation educator Marty Wartenberg of UCI Extension and the ZB Global Design Center in Carlsbad said, “It is very useful when developing your design and product to have third-party objective folks review and critique the design.” “The idea is that colleagues will not be completely honest and critical with the participants present,” he said. “It would be much healthier if folks could take well-meaning and constructive criticism as a chance to improve the product or service. Unfortunately human nature tends to resist. This is a challenge to overcome in the business world.” Mike Morhaime, Blizzard CEO and cofounder, said criticism is important, but it’s hard to take at first, as he recalled from tests of Blizzard’s early game The Lost Vikings. “We thought the game was good enough, but Brian Fargo of Interplay took it home and played it, and had lots of feedback,” Morhaime said. Fargo wanted all the Viking characters to be redrawn so they wouldn’t look so similar, which the game team didn’t want to hear. “It means he really cares,” Morhaime told them. “When I digested it, I thought, ‘Hey, these are good comments.’ “
2. USE YOUR OWN PRODUCT At Blizzard, that’s an easy demand, since the product is a game that’s fun to play. Game developers should find a new job if it they can’t enjoy playing it and, in the process, spot ways to make it better. “We’re all fans. We all play,” said Brack, who averages 15 hours playing World of Warcraft each week. At home after quitting time, he often plays his high-level World of Warcraft character for four hours, taking notes on what works and what doesn’t, he said. The next day at work, he meets with team members to discuss the problems he found. In some industries, taking on the role of the customer “is referred to as ‘eating your own dog food,’ ” Wartenberg said, “actually using your product before subjecting the consumers to what may be an ill-conceived and poorly designed product.” “In the theme park business (Disney and others), they have a phase in their development life cycle called ‘Family and Friends.’ This occurs right after the state regulatory body approves the event or attraction and before the general public gets to ride your new attraction. This gives the design folks the chance to see how normal or non-involved people react,” he said, “a final chance to make changes prior to opening it up.”
3. MAKE CONTINUAL IMPROVEMENTS Criticism of the Vikings game “was our first painful iterative process,” Morhaime said, “and it’s happened with every game at Blizzard.” Multi-disciplinary “strike teams” repeatedly critique the latest version of each game in progress. “We do it every couple of weeks,” said Rob Pardo, senior vice president of game design, in the panel discussion with Frank Pearce, executive vice president of product development. “It’s possible to go too far,” Pardo said, “and that’s what Frank and I are supposed to keep charge of. We’re trying to make great entertainment projects, not perfect ones. If we wanted to make perfect ones, we’d never be finished.” St. George added, “Making continual improvements is a must for all types of goods and services. A competitive advantage can be attained from attention to improvement, innovation and detail.” “In many industries, near perfection is the goal,” Wartenberg said, “whether we call it Zero Defects or Six Sigma (one error in 3.14 million) this is very true of the biotech/pharma community as well as those in aerospace, where human life is at risk. The emergence of process improvement methodologies in many of our local companies, (Lean, Six Sigma, Theory of Constraints, etc) attest to the fact that management recognizes that reducing errors, improving reliability and eliminating scrap are worthwhile and quickly drop to the bottom line.” World of Warcraft scene
4. GO BACK TO THE DRAWING BOARD Blizzard Entertainment will throw out unsuccessful work rather than try to salvage a fatally flawed plan. “We come up with a lot of great ideas, we talk about them, we implement a lot of art and game play, and then we go ‘… that kind of sucks,’ said Pardo. “So do we do a re-boot, throw out everything — or do we make the call to cancel a game if there’s no realistic restart to do? It’s one of the things that makes us infamous for never hitting a release date, but it’s part of ‘gameplay first,’ ” a key principle at Blizzard. “The Back to the Drawing Board concept has applicability across all industries,” said innovation educator Wartenberg. “Start over if a product is not turning out right.” “The idea that we have spent so much so we should just keep going is a bogus one. If it’s the wrong approach, past spending should not be part of the decision process,” he said. Wartenberg outlined a Phase Gate method for developing products, which establishes a standard procedure for cancelling projects that aren’t working out. “At each gate, the decision to stop, go or modify should be made based on achievement of specific identified points. (Will meet market window? Design-to-unit production cost is within profitability range? Customers will want it? Etc.) Some large product companies refer to the decision at each gate as the ‘Kill Switch,’ even though it’s not called that in their official documentation,” he said.
5. DESIGN FOR DIFFERENT KINDS OF CUSTOMERS Blizzard designs its games to appeal to a variety of customers — players from different cultures, in different settings, and with different personalities and experience. In the recent panel discussion, Blizzard executives focused on how the company tailors its games for multi-national audiences — after making mistakes based on game developers’ inexperience with different cultures. Frank Pearce, executive vice president of product development, told of a Japanese panda character that an artist drew for Warcraft III. “He drew this Samurai panda. Turns out the Japanese and the Chinese aren’t big fans of each other, and the Chinese people objected to this animal of theirs being dressed in Japanese garb. So we had to change it,” Pearce said. CEO Morhaime added, “Living here in the United States, we kind of had a North American focus. We had to catch ourselves when we weren’t considering that we have players all around the world.” Pearce explained a variation that Blizzard adopted to allow players to experience World of Warcraft in commercial game parlors, especially in Asia. “People don’t just play the games at home. They play the games in game rooms in China and Seoul, where it’s a totally different payment model, too. It comes down to, if you want to be successful globally, you have to think about what markets you want to go into.” “One thing we do is send game charges to the account you play on, not to your computer. It’s a small thing, but it really helps people play in that game room environment,” he said. World of Warcraft lead producer Brack said his teams focus on making sure the game appeals both to high-level and to low-level players. That’s part of what game developers think about when they make plans for new dungeons, new raids and new monsters, he said. To improve the game’s appeal to experienced players, Blizzard is planning to add 10 additional experience levels as part of its upcoming Wrath of the Lich King expansion pack, he said. The top level, which is currently 70, will increase to 80, he said. In addition, Blizzard will give players new ways to customize characters, including new hairstyles, he said. That’s aimed at increasing the game’s appeal to “social players,” including many women, who are interested in creating a unique look for their characters, he said. World of Warcraft scene
6. THE IMPORTANCE OF FREQUENT FAILURES “One of the mantras that a large software development company uses is ‘Fail Often, Fail Fast,’ ” Wartenberg said. “As Alan Mullaly said when he led Boeing Commercial Aircraft, ‘We celebrate mistakes; bring them into the open, because we can’t help fix what we don’t know about.’ ” To show Blizzard’s devotion to this principle, CEO Morhaime and other executives listed the titles of canceled games Blizzard had worked on: Nomad, Raiko, Warcraft Adventures, Games People Play, Crixa, Shattered Nations, Pax Imperia, and Denizen. “We don’t have a 100 percent hit rate. We just cancel all the ones that aren’t going well,” Morhaime said. “Failure begets success,” intellectual property attorney St. George said. “Many successful companies and CEOs have noted that their best successes have come from failures. The lessons learned from failures will provide the stepping stones for the next innovation.”
7. MOVE QUICKLY, IN PIECES “In today’s rapidly moving market, the only way to get products out is to use various rapid prototyping methods to build products or services and try them in controlled pilot groups and then change as you go along,” Wartenberg said. “A new concept in software development – dubbed ‘Agile’ methods, which includes techniques called Scrum, XP, etc – basically forces developers to build in small increments, review with the clients and continually iterate the design until the customer is satisfied.” At Blizzard, small teams focus on narrow elements of the game. For example, different teams of artists specialize in trees, rocks, the game environment, and monsters, said lead producer Brack. Multi-disciplinary “strike teams” serve as critics of how the different aspects of the game work together. Raman Unnikrishnan, dean of the College of Engineering and Computer Science at CSU Fullerton, said: “With entertainment software and online services, it is all about understanding what the gamers want and then proceeding to incrementally deliver that unmet need. The developers cannot follow a traditional waterfall style development (First requirements, then design, implementation, verification and finally maintenance) because they have millions of software users whose allegiance depends on the ability of the software developer to deliver new user-demanded features quickly and reliably.” Quick work doesn’t mean that Blizzard will introduce a game before it’s ready, said Blizzard PR representative Bob Colayco. As evidence, he noted the release date of Diablo at the end of December 1996. Because Blizzard insisted on getting the game right, it missed the entire holiday shopping season, he said. Diablo was a critical and sales success, proving to Blizzard that getting the game right was more important than meeting a deadline with a flawed product.
8. STATISTICS BOLSTER EXPERIENCE “Innovation and player behavior have to be the focal point of Blizzard’s business model,” said Don Hicks, executive director of the AEA high-tech trade group in Orange County. “I am certain they have figured out how to monitor and measure player behavior, and have outlined an innovation process.” When Blizzard’s game designers sit down to figure out whether a game can be improved, they have more to go on than just their personal game-playing experience and other players’ comments. Statistics also help Blizzard find ways to make games more enjoyable. Many statistics are automatically generated, such as what kills the most players and what is killed most by players, Brack said. That helps game designers determine whether the game’s various monsters and classes of characters are fairly balanced. Class designers hold regular meetings to decide whether to adjust the strengths of different classes to keep the game fair, Brack said. World of Warcraft scene
9. DEMAND EXCELLENCE OR YOU’LL GET MEDIOCRITY “We could ship a sub-par game, but ultimately it hurts the brand. We should ship it when it’s ready or we shouldn’t ship it at all,” said Pearce, the executive vice president of product development. “It’s an issue of making sure we’re not risking long-term gain for short-term benefits.” Brack added: “That’s a core value of Blizzard, not a luxury that it can afford now that it’s bringing in so much revenue.” “Living with mediocrity can be the downfall of a company or service firm,” said St. George. “There are many companies that have learned this lesson through failed product lines and even company closures. Requiring or demanding quality and excellence is a must for all companies and service firms.” “Demanding excellence is a tough call, as it often requires that we accept ‘good enough’ to meet tough shipping schedules. The concept of ‘perfect’ is one that most cynical employees will laugh at,” Wartenberg said. “But one of our local companies, QLogic in Aliso Viejo, has that exact title posted through out their facility – a big sign saying ‘Perfection: Our Clients Demand It.’ “If you ask for excellence or perfection, you many never get it, but you will sometimes get something approaching it – and mostly will get good enough. If you ask for good enough, however, you will never get anything approaching excellence and will often get below-average results. People tend to rise to meet expectations,” Wartenberg said. Wrath of the Lich King scene
10. CREATE A NEW TYPE OF PRODUCT Blizzard was one of the pioneers in a new category of game – massively multi-player online role-playing games. In addition to Blizzard’s original product line – the game software itself – the company created a new type of product line by selling ongoing subscriptions for online access to the game, said Unnikrishnan at CSU Fullerton. “Blizzard remains ahead of the competition because the company was able to parlay its strength in one game format to create an online service, which created a whole new product line and different type of revenue stream,” he said. In Asia, where gamers typically play World of Warcraft in Internet cafes, Blizzard uses a variation on monthly subscriptions, which wouldn’t work well in that setting. Instead of subscribing with a monthly payment, gamers purchase prepaid cards. In addition, in China Blizzard has licensed World of Warcraft to the publicly traded entertainment company The9, which also runs other online games. Sketch of new Taunka warrior
11. OFFER EMPLOYEES SOMETHING EXTRA Working at a computer-game company can be fun, but that’s not the only type of company that can benefit by providing employees with more than just a paycheck. Any innovator needs something beyond just monetary incentives. “One advantage that Blizzard Entertainment has over many product organizations is the high degree of ‘fun factor.’ For young programmers, getting paid to develop what you love doing anyway is ideal,” Wartenberg said. He added, “The trick is how to take the techniques that are so successful for Blizzard into other industries. It’s relatively easy in the life science field, in that the companies can replace fun with a deep sense of purpose and high societal value of the products delivered. For many engineers and life scientists, this is what drives them and allows them to work on very long-term projects without getting too discouraged.”
Tags: blizzard, Engineering, News, Tail