ࡱ> `b_7 1bjbjUU "L7|7|,Bl8LJ2FF\\\\\\tJvJvJvJvJvJvJ$'L GNJ\\\\\J\\J\\\tJ\tJhFXtJ\: WkG(tJJ0JGNNtJ Peer-to-Peer Games By Joe Kuefler Brief History of Peer-to-Peer First Era: The Peer-to-Peer Dark Ages ___________________________________________________________________ In principio erat hominus ad hominum In the beginning there was person to person People talked People plotted People schemed People smoked People drank People played games It was good. ___________________________________________________________________ But this was very limited. Not everyone could meet face to face. Sometimes when you sent a messenger, the messenger got killed. ___________________________________________________________________ Then there was the carrier pigeon Pros: Connected people together over many miles. Text and pictures Cons: Conversations were slow No ability to smoke, drink and play games Pigeon dung ___________________________________________________________________ Then pony express (U.S. Mail) Pros: Connected people over even longer distances. Cons: Same limitations as the carrier pigeon. Current U.S. Mail is slightly slower than carrier pigeons. Postal workers. Second Era: The Advent of Digital ___________________________________________________________________ The telegraph Pros: Used break-through technology: copper wires transmitting Morse code (digital data) Orders of magnitude faster than mail. Cons: Text only Transmission was still synchronous: Send a message Wait a long time (hours, days or weeks) Get a response Go to step 1 ___________________________________________________________________ And then the telephone Pros: Finally, two-way asynchronous communication One could have an argument over the phone Orders of magnitude faster than mail. Its the next best thing to being there. Cons: One could have an argument over the phone More social than the telegraph, but still limited to just voice It may be the next best thing to being there, but it is certain quite a ways from sitting down with some old friends, drinking an old fashion and playing some cards ___________________________________________________________________ Fax and Cell phone The adoption rate of fax machines was phenomenal. Faxes were invented and within a few short years, virtually every business had one. Fax is actually just an improvement of the telegraph: instead of the Morse code representing the English alphabet, the digital data represents dots of ink on a piece of paper. The adoption rate of cell phones was/is also phenomenal. Quick adoption by businesses, then average consumers, now even high school kids. Cell phone is just a marginal improvement over corded phones. Compared to the difference between the pony express and the telegraph, the difference between a corded phone and a cell phone is subtle but that subtly has created an entire industry. Third Era: Internet Era Its all about pipes. ___________________________________________________________________ Email: the first Peer-to-Peer Internet application Email was invented in the 1970s but did not shoot off like a rocket until dialup providers made the Internet a household. The Web (i.e. browsers and web sites) have nothing, technologically, to do with email but they paved the way for it by laying down the pipes for email communication. Today, almost as a consequence of wanting access to the Web, everyone inherently received an email address. Observations about email Email is not about real-time connectivity (like a telephone) Plain text email is just a performance increase on the telegraph Email attachments add a new dimension which sort of combines telegraph and Fed-Ex ___________________________________________________________________ Chat: the second Peer-to-Peer Internet application Chat was also invented in the 1970s but, like email, has only become a recent phenomenon. Its hard to imagine a real business model behind chat (in and of itself), since conversations are typically not something someone wants to pay for Chat could certainly be incorporated into applications which have something else going on ___________________________________________________________________ Whats Next? Continuing along the Communications Theme: carrier pigeons pony express telegrams telephones fax machines cell phones email chat [ fill in the next three blanks to win the prize ] ___________________________________________________________________ Problems with the Communications Theme: Very big players are beating each other up in this converging and turbulent market. There is a collision course between cell phones, PDAs and personal computers this is an intimidating market to falter in. It will take clairvoyance, luck and muscle to win here. ___________________________________________________________________ Alternate uses of the PIPE: The pipes are bigger and faster than ever and getting bigger and faster every year. The Pony Express across America depended on roads (the roads were the pipe). The Pony was replaced by railroad (a new pipe). The railroad was replaced by telegraph wires, then by phone cables. The challenge is to identify several applications which can make use of the pipe in much the same way that the telephone (an application) makes use of phone lines (the pipe). ___________________________________________________________________ A Brief Indictment of Web Communities The basic thrust of web communities (which includes portals, B2C, and B2B sites) is to drive traffic to a site on the Web in order to create a community that would otherwise not be established. The click through revenue model is dead. There can only be a few winners in this category and the cost to compete with the AOL and Yahoo! is prohibitive to entry. Portals that are extremely vertical/specialized will continue to thrive within that vertical space, but broad based communities that appeal to the mass market are a tough business to be in right now. Frankly, this puts most Web plays at risk and under increasing scrutiny. But, dont throw the baby out with the bathwater, that is dont throw Internet investments out with the Web. ___________________________________________________________________ Using the Internet to Connect Disbanded Communities Human beings are social by nature, which means they form communities. Some of these communities are so successful that the friendships outlast the organization from which they sprang (like fraternity brothers trying to keep in touch after people are married and moved to the four corners of the world). Instead of using the Web to create artificial (and consequently weak) communities, lets use the Internet to rewire these communities that have only disbanded because of logistics. ___________________________________________________________________ Examples of Disbanded Communities: Fraternity brothers/sorority sisters who want to keep in touch Families (brothers, sisters, parents, cousins) who are out of the nest and spread out Other college associations (faculty, school clubs, general friendships) War buddies (WW-II, Korean, Vietnam) who want to keep in touch Corporate communities that persist after the groups disband (examples: Interleft comprised of ex-interleafers, Segwent comprised of ex-Segue folks, etc.) Rotary, Kiwanas, VFWs, Shriners, Elks, etc. Other Social groups which can no longer meet face to face ___________________________________________________________________ Having Something to Say Peer to peer applications (like the telephone and email) can connect people together who are physically separated. Its the next best thing to being there. Both email and the telephone, however, require you to have something to say. A pick-up game of soccer, billiards or poker (if it were logistically possible) establishes an environment that is stimulating and social even when no one has anything to say. Would you only show up to dinner in your home if you had something to say? ___________________________________________________________________ Alternatives By making use of the pipe (the Internet), can we create applications that: Are social in nature Will spread naturally (organically) through friends Will offer us a sustainable and viable revenue model Introducing Peer-To-Peer Games ___________________________________________________________________ Hallmarks: Emphasis on social/intelligence-driven games, not high-res carnage: card playing, bingo, board games, etc. Ability to play for money and come out ahead (when you win). Plug-in interface with the ability to script your games and design robots that play for you (like stock trading programs). Low bandwidth requirements (designed for 56K dialup) 99% peer-to-peer, very little central server involvement (probably less than an email server) ___________________________________________________________________ Revenue Model: A certain percentage of people (1-5%) will want to play for money. We hold the ante in escrow and disburse the earnings, minus a small escrow fee. By far, most of the money (90-99%) is dispersed to the players. Contrast this to a casino which ends up with most of the money at the end of the day, thereby making Casinos very controversial. ___________________________________________________________________ Target Market: The first demographic to seed the application into is clearly the senior citizens who currently have the highest adoption rate of ISP accounts and new PCs and who typically enjoy playing cards. After that, the application will find its own way through the world, singling out those who play cards ___________________________________________________________________ Competition: The existing online card gaming community is not much of a competition. All of them are offered as free services in order to increase the pageviews on their sites (MSN, Yahoo, Excite, etc.). We would be pulling people away from these communities by giving them a simpler, bannerless application which is not tied to a portal. If the portals begin to hurt, we could offer them branded versions of the application. Eventual competition is the Casinos themselves, although it will be a cake walk for many years until they take notice. ___________________________________________________________________ Risks: Government Interference Government interference after success has snowballed is inevitable The government will inevitably claim that it is illegal to conduct this business because it feels it is missing out on a revenue stream that should be taxed. This risk can be mitigated by offering the users a year-end summary of their loss or earnings for tax purposes and instructions for reporting it on the 1040. In the worst case scenario, we could get caught reporting their earnings (or loss) to the federal government and/or withholding income tax. We could also distance ourselves from the gambling issue by claiming that we are merely offering an escrow service and take a small fee for this service (which is true). ___________________________________________________________________ Gambling Addiction If we are ethically concerned about gambling addiction or concerned about negative press with regard to such, we could offer features in the game that allowed people to maintain a gambling budget and managed how they are doing with respect to that budget. The data behind this feature would (of course) be local to their PC and not stored in a central location where it could be stolen. Peer-To-Peer Games CONFIDENTIAL, Joe Kuefler Page -  PAGE 10 #C0u7 =  ! \hqzJM*U#KOSz + / !"""$$b%h%&&:(I((())",A,:/M/0011 1 10J j0JU>*5\6]]#$CDEkl /=J^kl01u & F01#/0t/?@Ade 7 = G k  & F & Fk z   ! 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