Money, Technology, Timing Have Vexed Cable's Game Attempts

MSOs, Programmers Often Wiped Out Trying to Bring Gaming to Cable
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This week's Multichannel News "Game Over" cover story pinpoints cable's failure to capitalize on the latest videogame phenomenon: letting viewers watch videogame players do their thing. 

Actually, the cable industry has missed countless  videogame opportunities for decades, even as the latter has grown to rival (in revenue) the motion picture industry, a lifeblood of cable viewing.  For multiple reasons, cable and videogames have not found a way to meld. From PlayCable and Interactive Network, through the Sega Channel and the Time Warner Cable's "Full Service Network," to Buzztime, G4TV and Zodiac Interactive, cable operators and programmers have flirted with videogames for more than three decades.  Invariable the "Game Over" message popped up because of inadequate technology, financial  disparities and bad timing in the twitch-speed world of interactive gaming.

Many of the videogame visions were closely tied to cable's unending promises of "interactive TV," dating back to the late 1970s when Warner Cable offered multiple choice quizzes as part of its pioneering QUBE system.  Time-Warner Cable kept its faith in videogames, which were a feature of its very expensive Full Service Network test in Orlando in the mid-'90s. The high-quality, high-speed games in that venture relied on a high-priced Silicon Graphics set-bottom box (too hefty to put atop a TV set). More recently, Comcast tried to leverage the popularity of videogaming - especially among the desirably 18-34 year old male audience - via its G4 channel.  Even that "network" has quickly devolved into an online Website with very limited linear distribution. 

Invariably, the starry-eyed developers - both serial entrepreneurs and established companies -   hoped to mesh the $46 billion global videogame juggernaut with cable's distribution capabilities.  They quickly found that cable's "star"-configured architecture posed problems for delivering the most popular games; the system latency simply couldn't keep up with the speed of game play.  Deeper problems - notably the hurdles (spelled c-o-s-t) of putting sufficient processing into set-top boxes - have also stymied programmers, who created complex plans for bringing games to cable.

On the financial side, cable operators have predictably been loath to dedicate channels to games, when higher value programming was available.  Visionary John Malone - both in his stints at Tele-Communications Inc. and at Liberty Global - has invested in numerous game projects, ranging  from play-along services such as Interactive Network to download videogame delivery systems (the Sega Channel). But even Malone's alleged magic touch has not been able to bring games to cable successfully. 

Moreover, cable's timing has often been miserable when it comes to videogames.   The Sega Channel (which was co-owned by TCI, Time Warner Cable and Sega of America when it debuted in 1993) was focused on downloading about 50 games per month to homes that had a Sega Genesis console. The problem was that the 16-bit gaming device was about to be eclipsed by Sega's own 32-bit Saturn console.  An added barrier was the cost to operators:  MSOs were leery of the $180 price for an adapter they'd have to supply to every home, a sum that was hardly offset by the $25 activation fee and their share of the $13 per month subscription premium. At its peak, the downloading service reached about 250,000 subscribers, but numbers dropped steadily and in July 1998, Sega abandoned its channel.

Several omens of this disconnected relationship between the cable and videogame industry actually surfaced more than a decade earlier as both cable and videogames were booming onto the media landscape.  Jerrold Electronics, a major supplier of cable hardware, teamed up with toymaker Mattel to make Mattel's Intellivision videogame console accessible to cable customers via a special adapter.  The "PlayCable" service downloaded about 20 games per month to the console via an FM band within the cable signal. Software spurted downline through a carousel cycle. Jerrold's parent company, General Instruments, supplied the microprocessor at the heart of the system.

When PlayCable debuted commercially in 1981,  Mattel and Jerrold predicted it would have one million subscribers within five years.  In 1983, when they pulled the plug, there were barely 20,000  customers.

Even more perplexing was the situation within the Warner Communications empire of that era. Many observers at the time expected that when it acquired the then-dominant Atari videogame console/software business in the late '70s,  Warner would integrate videogames into QUBE, its interactive cable technology that was just rolling out. There were some slight attempts to do so. But look at the business plan developed by an Atari corporate task force in 1981.  It conceived a vision for "advanced consumer telecommunications products and services" that would allow "Warner Communications a unique means of entry into an industry which cannot help but impact the company's broad business purposes."  Although the document describes the "convergence" of telecom and data services, and presciently identifies mobile, home automation and entertainment opportunities, nowhere in the 133-page proposal is there any reference to the capabilities of the Warner Cable systems as a component in that envisioned expansion. 

The  "AtariTel" concept quickly evaporated, doomed after Warner unloaded Atari in 1984. QUBE disappeared soon thereafter.

Hardened Hearts

Those early stumbles may have hardened the hearts of cable overlords to the potential of videogames in their business.  But it did not discourage games promoters from their dreams of cable deals.  And with the hype about "interactive TV" in the pre-Web era of the late '80s and early '90s, dozens of game concepts emerged, many of them 20th century predecessors of today's "second screen" projects.  Interactive Network offered play-along versions of professional and college football games, baseball and other sports events plus series ranging from Wheel of Fortune and Jeopardy! to L.A. Law, Murder She Wrote, and American Gladiators.  Its investors included TCI, NBC, Gannett, Cablevision Systems and Nielsen.

Ultimately, the shuttered company faced a patent showdown with TCI.  Interactive Network founder/CEO David Lockton (who is now creating an advertising second-screen application, WinView) reflects that TCI and other MSOs didn't appreciate that the game revenue stream (up to $20 per month) could "threaten their ability to control revenues."  Adding to the MSOs' dismay were subsequent investors, such as NBC, which received warrants that would dilute the value of the early investors' stakes.

(There is some irony, of course, in the flow of history. Most TCI systems and NBC are now under the umbrella of Comcast, which has its own videogame and entertainment biases.)

Perhaps the closest cable has come to the videogame mainstream was Comcast's G4 network (also known as g4techTV), which took over the channel of geek-centric TechTV. G4 featured a line-up of shows about multiplayer game competitions, reviews of new software and hardware, tips and cheat codes on videogames.  Its slow death over the past 18 months reflects the symbiotic situation: too boring for the target audience, which meant too paltry for the anticipated advertisers.

Buzztime, a trivia game service that was born from the bar-and-restaurant entertainment offerings of its parent company NTN Communications, adapted its quick quizzes for cable in the early 2000s. The in-band virtual channel  focused on short-form content that cable viewers could play while waiting for a show to begin. A multiplayer version enabled subscribers to play against other homes within the same system; Buzztime's casual game structure did not suffer from system latency.  Buzztime also developed "pass-the-remote" software, enabling people watching the same TV set to compete against each other by sharing the remote control when their turn came. From a marketing stance, it hoped to cross-promote its brand between the "hospitality" sector and the home. (Disclosure: the author sat on the NTN Buzztime board of directors during the early and mid-2000s.) 

Buzztime's first affiliate was Susquehanna Cable.  That relationship encouraged Comcast to sign up and offer Buzztime on its Baltimore-area systems for a few years. Time Warner Cable also carried the Buzztime games.  And Scientific-Atlanta invested in the company in an effort to add value to its STBs, with games becoming an application along with news and weather.

But as Dan Sweeney, a veteran cable sales executive who handled Buzztime's cable deals, points out, the cable operators were more interested in developing video-on-demand in that era.

Even Microsoft, during its long and costly "Microsoft TV" courtship of the cable industry, tried to find a way to port games to the Xbox 360 as a virtual STB. It was an idea that faced substantial skepticism  from cable operators who were skittish about content going through any other set-top box than the ones they controlled.

Disconnect: Speaking Different Languages to Different Audiences

Despite all of the attempts to bring videogames to cable, the two industries have rarely seen eye-to-eye because of technology, financial and compatibility differences.

Dr. Christopher Weaver cites the "cultural divide between games people and transmission people" (i.e. cable operators). Weaver is a former NCTA Science/Technology vice president (early 1980s) and subsequently the founder and former CEO of Bethesda Softworks, one of the world's largest developers of role-playing, racing, simulation and sports videogame software ("The Elders Scrolls," "Terminator," "Fallout" plus drag racing and the Wayne Gretzky hockey series).

Now co-director of the Center for Creative Learning at the Massachusetts Institute of Technology, Weaver focuses on the differences between "the imagination of the design and programming" world and the capacity/network control mentality of technical and engineering managers.

He also acknowledges the varying objectives of audiences.

"The reason people watch videogames is to learn how to play better," Weaver explains.  That works in "turn-based games" such as poker or quizzes, when each player makes a consecutive move, he adds.  Weaver says  that the training value is now becoming apparent in real-time action games, which is why Amazon's timing in its Twitch acquisition is so valuable. 

"People have always wanted cheat sheets," Weaver adds. "They want to get good at playing, and they want someone to teach tem the tricks for success."

Toying with Games

As the videogame torrent flooded the media market in the 1990s and early 2000s, cable networks tried to find a connection.  HBO, MTV, Showtime, Nickelodeon and others explored ways to bring gaming under their canopies - never with notable success.

As recently as 2005, ESPN contracted with games developer Zodiac Interactive (via its newly launched Zodiac Branded Games subsidiary) to develop ESPN-branded games for digital STBs.   The sports-themed, single-screen interactive games were intended to integrate ESPN personalities with programming that ranged from football, basketball and boxing to auto-racing.

The long-running  Game Show Network (GSN) has often toyed with interactive gaming, enabling viewers to play along.  In fact, its founding leader in 1992, Sony Pictures Entertainment  President Mel Harris, often mentioned Sony's expertise in gaming, well before Sony's PlayStation products ascended in the console game world.  Sony, which still has a controlling 58% interest in GSN, has not been particularly aggressive in connecting its videogame and TV game shows lines of business - another reminder of the barriers between fiefdoms within huge corporate empires (especially struggling ones such as Sony is today). 

At the cable TV conventions of 1992 and '93, you could hear the pitches from the simultaneously unveiled "Game Show Channel" (backed by Sony Pictures Entertainment and United Video Satellite Group) and the "Game Channel" (a spin-off from the Family Channel, formerly known as the Christian Broadcasting Network).  Both intended to leverage reruns of prime time and syndicated TV game shows.

With the growing appeal of online games - including MMOGs (Massively Multiplayer Online Games) - cable operators are facing a new challenge.  Their broadband circuits are appealing to gamers while the game-less linear channels look boring in comparison.  Cable's role as a carrier - with the concomitant issues of prioritization and revenue optimization - will pose new hurdles for operators who have been doing a decades-long dance with the videogame world.

Game On?  Or Game Over?   The experiences of the past 30 years suggests the only answer that has been the pattern.

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