Sep 122006

Presented by AFTRS LAMP. How are virtual worlds developing and what are the opportunities for media creatives?

Luke Carruthers is a games developer who runs a company called Imaginary Numbers in Sydney. The company creates online games and their first title Tactica Online is a fast-moving strategy RPG set amidst conspiracy and intrigue of Da Vinci’s world.  Luke Carruthers’ first company, Magna Data, was founded in 1993, and went on to become one of Australia’s most successful early Internet service providers. Sold in 1999 for A$16 million, it was noted for its innovative services, including operating one of the country’s first DSL broadband networks. Since then he has founded three more companies, all focused on the Internet and telecommunications market, including Inter-touch, an in-hotel network operator recently acquired by NTT DoCoMo for US$70 million, and Alterna Telecom, which provided wholesale PSTN switching services and was acquired by RSLCom in 2002. Secretary of the Internet Industry Association from 1995 to 2001, and joining the board of the Game Developers Association of Australia in 2005, he has also worked with numerous government and industry bodies aiding in the development of the legislative and regulatory framework for the telecommunications, media, and entertainment industries.

Summary of the presentation

Using World of Warcraft and Second Life as examples at both ends of the spectrum of social online games Luke talks about environment design, demographics and game-play competitive structures of these services. He differentiates between role playing competitive games and sand-box environments of virtual worlds and talks in great detail about the motivations of game players and the social drivers of MMORPGs. Luke also addresses issues of self-policing and trust based social networks that spring up naturally in these environments referring to the griefers who try to upset the narrative/gameplay of other and the groups of guardians that try to reduce this irritation. In contrast he talks about the virtual world of Second Life as a game with no rules, goals or driving narrative. The economics and the fact that upto 50% of inhabitants of ‘worlds’ tend to be more socially outgoing females as opposed to the 15-30% in ‘games’ are used as part of the differentiation discussion. Luke talks about the way players communicate in worlds and how games such as Final Fantasy XI one has english and japanese speakers thrown together and how emotes and symbols are used more in those cases.

Luke then talks at length about the film/game business and production cross overs and how now films like Avatar is being created as a film and online game simultaneously. With costs of $64 mill for WoW the budgets are similar to major features with around $60mill in profit each month. He says that games took 20 years to reach a $10bill industry in the US whereas film took 90 years to get to the same level. The skills required for games creation are similar to film fx and in the US film students have a lot more game ‘education’ than in Australia. Luke sayd that this money is made mostly throught the dominant model of subscription and pays for the designers, producers, artists and programmers that form the four divisions of most games publishers. An interesting aspect of MMORPG production is the cultural differences in that Final Fantasy for example, which is predominantly and Eastern game, has around 75% passive cinematics (or linear video) and 25% actual interactive gameplay. He talks about the potential cross over in skills between traditional film and game production citing cinematographers, writers, composers, set and production designers have a role to play, whereas editors are more focused on the cinematic creation. Luke suggests it is only in the past year or so that how a scene is presented to the player is important and that is promising for traditional film creators especially lighting design which is going through enormous growth at the moment.

Luke finishes this insightful presentation by talking about the future and how AI will take a more dominant role as the next generation of SIMs type games come to the fore and emotional expression, realistic body language and character/personality will mean it becomes harder and harder to tell the difference between human or machine controlled avatars. The final element of the talk is about the ethical, control and moral dimensions of game access as well as the things Luke sees will make the difference between games and film blur to the Nth degree.

AFTRS Sydney 5 Sept 2006 – Time 57:46. Click to listen

All LAMP podcasts are also published through the iTunes store.

This presentation was highly interactive with lots of questions and has been edited to provide reasonable continuity.

Audio edited and processed by Gary Hayes.

Jul 202006

Business Planning for New Media © Rachel Dixon 2006.

The first of 8 podcasts recorded live and unedited during the LAMP lab on Milson Island, Sydney in July 2006 – in front of the eight teams and ten mentors developing emerging media projects.

rachel dixon“If you rely on government funding for your projects, marry someone rich, because you haven’t got a career, what you’ve got is a series of accidents”.

Rachel delivers many wise words about business practises and exploitation for new media projects with a focus on Australian Media referring to the Digital Content Industry Action Agenda – “…not what the government can do…what industry can do for itself…we have got a lot of cottage industries, and a lot of really good ideas and it is really hard to find money for those ideas”.

She talks in length about how to turn projects and ideas into real and sustainable businesses – by looking at a multitude of business aspects including investment opportunities, tax concessions, working for fees, having real value in the online element, co-productions, budgets, partnerships, subscription models, advertising, membership and sponsorship.

Rachel also talks about the development of the brand and the importance of being higher up the aggregation chain, controlling the portal rather than individual elements of content. In terms of getting investment you have to prove that your online element is ‘sticky’ and will grow traffic and members. She says you have to be prepared to be in for the long haul if you want to initiate a membership model and cites Habbo Hotel and other MMORPGs that have critical elements of personalisation and customisation of your virtual space. Making payments, particularly micro ones, easy for the user is also a way to drive revenues and suggests that many online businesses fail because they put too many hurdles in the way of making payments.

She moves on to cover many of the legal issues surrounding the IP in your project and how to make sure you have sustainability by really owning the idea/format, you have limited liability and also how most of this depends on the fact that you have assignments – which will generate residual IP. A new development in emerging media, particularly contribution services such as YouTube is the EULA (End User License Agreement) and how this both protects your idea but also the service provider rights to submitted content.

Finally Rachel talks about the international perspective, how to manage your format or idea in overseas markets and how to be realistic about your budget if the millions of markets of hundreds are very tightly niche’d. After all this if you get an investor be prepared to give away up to 49% plus and pay attention to the mix of partners in case of shift in allegiances.

All LAMP podcasts are also published through the iTunes store.


In addition to a career as an award-winning filmmaker, Rachel has been a developer, publisher and marketer of interactive media since 1993. In July 2004 Rachel joined Massive as General Manager. The company’s multi-award winning work extends across Web and Internet development, intranets, broadband, interactive television, wireless content, DVD, and advertising, film and television. Rachel is also a director of Handshake Media Pty Ltd, one arm of which is a consultancy advising on strategic development and marketing in new media, I.T. and telecommunications.

In 2004 Rachel was appointed to the Strategic Industry Leaders Group of the Commonwealth Government’s Digital Content Industry Action Agenda. She currently chairs the export subcommittee of the Group. Rachel is a director of the Australian Centre for Advanced Computing and Communications (ac3). She is also on the National Executive of the Australian Interactive Media Industry Association (AIMIA). Rachel was a founding director of FIBRE Pty Ltd, a telecommunications company servicing the film, television, interactive media and games industries. Rachel is a past director of several other government and private sector multimedia organisations, and has worked as a senior executive in interactive media and film finance for several government bodies.

Sydney 5 July 2006 – Time 47:34. PDF (116k) of presentation
Click to listen

Audio edit, description and mp3 prep/post  – G Hayes