shockwave.com: The next big thing?

July 26, 1999
by Pat McClellan

As we go about our daily work as developers, about the only reason we generally think about Macromedia is related to tech support... getting answers to our questions about various quirks or bugs. Beyond that, we want to know about new products and new features in Director. And for the most part, that's what most Director developers really want to hear about from Macromedia at UCON. So a lot of people were bewildered when all Macromedia seemed to want to talk about at UCON was their new business venture, shockwave.com.

With all the cheerleading and emphasis on shockwave.com at UCON, I heard a lot of developers complaining that the focus wasn't on developers. There's much truth to the charge that UCON should probably be called P-CON (Press Conference), but in fact, you just have to read between the lines to see the significance to developers.

If you missed it, here is the press release which was issued on the first day of UCON.

In part, that press release says...

shockwave.com is a new personal online entertainment center. A business of Macromedia, Inc., shockwave.com delivers a new form of online entertainment by combining groundbreaking new media technology, exciting and original personalized content, and the ability for consumers to create and share entertainment. In partnership with major entertainment, Web distribution and technology leaders, shockwave.com features cartoons, music, games, and an animated greeting card "creation engine" that can be experienced only at www.shockwave.com.

This is news that should excite every 14 year-old online gaming addict, right? But why should you or I care? Isn't this just a facelift on ShockRave? Does this have any impact on what you do?

If you rely on Macromedia's tools for your work, this does have an impact on you -- though it's not necessarily the new shockwave site, but rather the paradigm shift and enabling technologies which are meaningful to your business. This indirect effect is particularly significant if you never expect to make a consumer game.

Why Did They Do It?

The first question to think about is "why?" Why would Macromedia create a whole new business unit to do what seems like a re-run of ShockRave? I'll play armchair analyst to make some guesses.

I think the fact that this has been announced as a "new business" with a CEO (not a Macromedia VP in charge) from Disney makes it pretty clear that Macromedia wants to get a piece of the internet get-rich-quick that is so prevalent. I fully expect to see a spin-off IPO for shockwave.com as soon as possible. As a software company, Macromedia's stock fortunes are tied to a product cycle... and how many versions of Director can they release in a year? On the other hand, billions are being paid for hot new internet companies which have proven nothing except that they can lose millions of dollars while attracting visitors. Macromedia is an old company, so they can't be "the next big thing". They can, however, spin off shockwave.com if and when it becomes "the next big thing." If they spin it off, its stock prices can soar -- unencumbered by the rest of Macromedia's software business.

The Developers' Perspective

ShockRave has been very successful at pulling in a decent audience to play games for free. The business model was based on making advertising revenue for getting people to the site. The longer they play and the more people show up, the more money in ad revenues. But, there are a couple of problems with that model.

First, many pundits are saying that the ad-revenue business model of the web is very weak and has a limited life expectancy. Competition for impressions, an overabundance of inventory (unsold banner space) and limited proof of effectiveness have all contributed to driving banner prices WAY down. This is a problem for any ad-financed content site. However, a second problem is more significant to Macromedia's situation. The ad-revenue business model assumes that the specific content on the site has little value of its own. That content is simply a means of targeting eyes to the page. That's not a great message for Macromedia to be endorsing when their tools are used to make that content.

Let's make some analogies. On ShockRave (the current ad-revenue site), the shockwave games there are like re-runs of Baywatch or The Brady Bunch. They fill the space in between the ads and you don't have to pay for them. This is bad for developers because from a developer's perspective, many of these games are as engaging as Sony Playstation games. And consumers PAY for playstation games... so why can't they pay for our Shockwave games? That appears to be the thought behind shockwave.com.

Although not completely clear -- and certainly not tested, the concept is that people will be able to play some games for free online, but then pay for additional capabilities and other games for download. They're supposedly working out the details to enable "micro-transactions" where users can pay as little as a dollar for additional levels of a game. I guess the thought is to make it more like an arcade -- an arcade with a download center.

Under this model where users are paying for the games, Macromedia has to deal with consumer psychology. People are used to playing online games for free, so how do you get them to pay and feel like they're getting something for their money?

Let's go back to the Playstation or Sega example. When you pay for one of these games in a store, you go home with the cartridge. Although the game is nothing more than computer code, it's in a tangible state: the game cartridge. You pop the cartridge into your game player console and you're off. And as a consumer, you feel like you have something for your money. So how can Macromedia get people to think about Shockwave games in the same way?

Shockwave Remote and Shockmachine

On the same day that Macromedia announced shockwave.com, they also announced some new technology for Director/Shockwave. If you haven't hear about them, read this press release about the Shockwave Remote and Shockmachine.

This is your brain on Shockwave

Basically, the free Shockwave Remote (pictured above) allows people to download and save dcrs (Shockwave movies) and play them back from their own system anytime. There are VCR-type controls for playing back any of the five favorites which you have saved. If you want to save more than 5, you can buy the Shockmachine -- a more feature packed player which allows users to save as many games, puzzles and animations as they want. The Shockmachine also allow the games to be zoomed up to full screen.

Each of these new "devices" is essentially a Director projector which plays Shockwave Movies in a Window (MIAW). No huge leap in technology there... you've been able to do that. However, with the release of Director 7.02, you can now have non-rectangular MIAWs. This is evident in the Shockmachine, which appears as a non-rectangular control panel. This characteristic makes it seem more like a "device" and less like a software application. With the Shockmachine, the Shockwave titles which you download appear as "cartridges" which are stored in carousels and can be inserted into the player. The graphic representation is very clearly supporting the paradigm where Shockwave content is equated with real-world game cartridges. This is good for developers.

Show Me the Money!

How does the revenue flow from user to Macromedia to developer? Who gets what and when? How fast can we all get rich? Unfortunately, nobody knows right now. This is a new business model and my understanding is that the initial developers involved in shockwave.com have a variety of contractual arrangements. Like many internet businesses, they appear to be figuring things out as they go.

If you've been making your living on corporate work, dreaming of the chance to work on games or entertainment... now's your chance. This new paradigm allows people like you and me -- regular developers with no ties to a game company -- to develop games with some possibility of distribution. It's kind of like we're all independent film makers and you can think of shockwave.com as Sundance.

However, the real significance of this new shocked paradigm need not involve shockwave.com at all. There's no reason why you can't create your own "cartridges" and distribute them on your own site. So maybe you're not a game-type person... maybe you create corporate training stuff instead. OK then, why not create that training as a series of modules -- each distributed as a cartridge? These can be played back using the nifty little Shockwave Remote. And you can change the entire look of the Shockwave Remote so that it has your design and your client's logo on it. (This customization is referred to as "skins".)

Opportunity Knocking?

The Shockwave Remote, Shockmachine, and shockwave.com will change things. Change offers opportunity for those who embrace it and are open to the possibilites.

Patrick McClellan is Director Online's co-founder. Pat is Vice President, Managing Director for Jack Morton Worldwide, a global experiential marketing company. He is responsible for the San Francisco office, which helps major technology clients to develop marketing communications programs to reach enterprise and consumer audiences.