NEMOG: New Economic Models and Opportunities for digital Games

Lead Research Organisation: University of York
Department Name: Computer Science

Abstract

The digital games market is an enormous and fast-growing industry with extraordinary impact, particularly on young people and increasingly on other segments of the population. The importance of the UK games industry (3rd largest in the world) was underlined in the Chancellor's Autumn statement (5th December 2012), which confirmed substantial tax reliefs for the digital games industry, saying that "the Government will ensure that the reliefs are among the most generous in the world". Enthusiasm for digital games is underlined by a 2012 Forbes magazine article suggesting that, by the age of 21, the typical child has played 10,000 hours of digital games.

How can we harness widespread enthusiasm for digital games to contribute to advances in society and science in addition to economic impacts? For example, we can test economic theories by analysing the artificial economies in online games, or we can improve the motor skills of recovering stroke patients by using games based on motion detection devices such as the Wii controller, Kinect or simply the mobile phone.

In this proposal we will bring the UK digital games industry closer to scientists and healthcare workers to unlock the potential for scientific and social benefits in digital games. The numbers of games sold and the numbers of game hours played mean that we only need to persuade a small fraction of the games industry to consider the potential for social and scientific benefit to achieve a massive benefit for society, and potentially to start a movement that will lead to mainstream distribution of games aimed at scientific and social benefits.

In order to do this we need to understand the current state of the digital games industry, by engaging directly with games companies and with industry network associations like the Creative Industries Knowledge Transfer Network. We have a group of 12 games companies and 9 network organisations, all of whom have pledged their support, to get us started. Then we need to build simulation models that will allow us to investigate what might happen in the future (e.g. if government policy were to encourage the development of games with scientific and social benefits).

We need to conduct research into sustainable business models for digital games, and particularly for games with scientific and social goals. These will show us how businesses can start up and grow to develop a new generation of games with the potential to improve society.

Every action in an online game, from an in-game purchase to a simple button push, generates a piece of network data. This is a truly immense source of information about player behaviours and preferences. We will explore what online data is available now and might become available in the future, investigate the issues around gathering such data, and develop new algorithms to "mine" that data to better understand game players as an avenue for making better games, societal impact and scientific research.

It is an ambitious programme, but the potential benefits if we are even partially successful could have a huge impact on children, science and wider society.

Planned Impact

Beneficiaries of the NEMOG project will include:

Parents, Game Players and Wider Society: Large and growing numbers of people are playing digital games with unprecedented enthusiasm. The NEMOG proposal aims to increase the social and scientific value obtained through playing games, by understanding and developing appropriate business models and by mining "big data". In so doing we are tapping into enormous reserves of cognitive power. The potential benefits here are cultural (e.g. to raise awareness in important areas such as environmental change), scientific (e.g. to conduct experiments which use artificial economies to test economic theory), social (e.g. to educate) and therapeutic (e.g. to understand how we can use games to increase mobility in stroke patients).

The Digital Games Industry: NEMOG brings together members of the mainstream (recreation-oriented) digital games industry, with scientists, healthcare workers and members of the nascent scientific- and social-goal-oriented digital games industry. By doing this alongside a study of business models and environments we aim to engage entrepreneurs in this fast-moving industry, building profitable games which are more squarely aimed at achieving scientific and social goals. The data mining tools developed during NEMOG will allow increased understanding of game players, which can increase profitability of mainstream games as well as those games aimed at social and scientific goals. The digital games industry achieved a major coup in securing tax breaks in the Chancellor's December 2012 Autumn statement - so that the environment is ripe for accelerating growth in the UK and NEMOG can provide a further catalyst.

Other industries in the Digital Economy: Digital games provide an important indicator of the business direction of the broader media industries: a 2011 ESRC/IPO report highlights that "the singularity of the digitally native games sector contrasts with the relatively traditional music and television sectors and may point the way to the future." Sector analysis, predictive simulation models, new business models and data mining tools aimed at the digital games industry will likely have a broader impact in showing potential future directions for film, music, TV and online digital media industries.

Policymakers in the Digital Economy: Sector analysis, predictive models, new business models and case studies will provide new tools for our creative industry network partners to lobby government to provide an environment conducive to digital games in general, and to those aimed at scientific and social goals in particular.

Economists, Ecologists/Biologists, Computer Scientists, Media researchers and others interested in the potential for mining gameplay and purchasing data from digital games to reveal large-scale preference and behaviour information will benefit. Another related commercial area that will benefit from such understanding is sales and marketing for the wider economy, particularly as an ever-larger fraction of the UK's GDP (over 8% in 2010 and growing fast) is transacted online.

The researchers in the NEMOG consortium will become rounded generalists in business and problem analysis with an excellent understanding of the creative industries. The postdoctoral researchers (and associated PhD students) will then be of great value to the digital economy, either by continued research efforts, or by joining organisations within the digital economy.

Publications

10 25 50
 
Description Our research has shown that the Standard Industry Classification (SIC) codes do not currently adequately represent the digital games industry despite its large (£3bn) contribution to the UK economy. We have performed a detailed analysis of both the evolution of business models in the industry and the sustainability of companies within it. These have informed a policy brief we prepared to work with the major industry organisations in this area to influence changes to the current SIC codes.

The models software tools we have developed for understanding the often convoluted business of developing and selling games have been used at an investment event which we organised, where three large investors (with £150 million to invest) came together with a number of UK games companies. Three conversations between investors and games developers were initiated through this event.

We have also explored the change in the value chain caused by crowdfunding and how this can be used by game developers when preparing for a crowdfunding campaign - with these outcomes just published in a leading business research journal.

The NEMOG project also explored the new opportunities for digital games created by the ability to now capture high granularity data on player's actions in game. We have extensively surveyed and promoted the potential of using this data to answer questions of social and scientific importance. As an output we seed funded two games with clear educational and scientific impact (The Last Bumblebee and Shallow Seas) and raised over £700,000 in further funding from InnovateUK for a mobile game that will help reduce the impact on the 200,000 residents of the city of York by the 7 million annual tourists that visit.

Whilst exploring the datasets available from our commercial partners, we developed methods for clustering playstyle and predicting disengagement. The latter has now been used by two independent game studios to inform the design of their latest games and the former is beginning to influence the design of the game's AI.

NOTE: from 2018 submission the research and impacts from this project have been picked up by Digital Creativity Labs (EP/M023265/1), Creative Media Labs (AH/S002839/1) and the IGGI Centre for Doctoral Training (EP/L015846/1 and EP/S022325/1) and - so further developments will be reported through this route.
Exploitation Route The findings of the NEMOG project could be used to help new companies attempting to enter the games industry to maximise their chance of survival, raise funds via crowdfunding and understand the ecosystem of business models used in the industry.

In addition, the work on game data mining has at all times aimed to be game independent, allowing the methods of clustering playstyles and predicting disengagement to be applied to a wide range of games. This could potentially improve the game's design and lead to increases in player retention and, therefore, profit for the company and enjoyment of the players. Conversations are ongoing in these areas with a number of companies including Electronic Arts, Team17 and Microsoft. The work on data mining is also providing a new direction of research in understanding behaviour in areas such as psychology research - and we have active and fruitful collaborations in this area with psychologists at the university of York.
Sectors Creative Economy,Digital/Communication/Information Technologies (including Software)

URL http://nemog.org/
 
Description We achieve cultural impact through the use of our tools to further the cultural medium of digital games, Economic impact through investment and through using anaytics for game retention, societal impact through educational games and through games which assist with tourism in the city of York, and policy impact through our work with the industry SIC codes. TIGA and UKIE, the two largest bodies representing the UK games industry, alongside Game Republic which represents the Yorkshire games industry, have considered the outputs of the NEMOG proposal (and attended several NEMOG events) and are using it as part of their attempts to change the SIC codes associated with the games industry (which result in significant underestimates of the industry's size and importance to the UK economy). We have brought games companies and investors together and provided models to facilitate their conversations. Our survey of existing uses of gameplay data have heavily influenced the design of the games we have funded and the one supported by InnovateUK funding. Whilst the work on game data mining (clustering playstyle and predicting disengagement) has had an impact on the design of games by three indie companies and led to a placement of a PhD student at a game development company for three months. This work has led to strong collaborations with many UK games companies, particularly through students funded via the IGGI centre for doctoral training, and has underpinned game analytics as a tool for behavioural research in psychology, and potentially in economics. Many of the "key findings" are intimately connected to impacts, so that section also discusses some of the impacts of the key findings. 2018 Submission: the NEMOG funding contributed to a collaborative Innovate UK bid to develop a game with 5 industry partners with York and Cass to influence tourist behaviour around York. The game was released in beta in Aug 2017 with learnings from this release feeding into future design of games. NOTE: from 2018 submission the research and impacts from this project have been picked up by Digital Creativity Labs (EP/M023265/1), Creative Media Labs (AH/S002839/1) and the IGGI Centre for Doctoral Training (EP/L015846/1 and EP/S022325/1) - so further developments will be reported through this route.
First Year Of Impact 2013
Sector Creative Economy,Digital/Communication/Information Technologies (including Software),Education,Culture, Heritage, Museums and Collections
Impact Types Cultural,Societal,Economic,Policy & public services

 
Description Centre for Doctoral Training in Intelligent Games and Game Intelligence
Amount £5,589,505 (GBP)
Organisation Engineering and Physical Sciences Research Council (EPSRC) 
Sector Academic/University
Country United Kingdom
Start 04/2014 
End 09/2022
 
Description Digital Creativity Hub
Amount £4,039,831 (GBP)
Funding ID EP/M023265/1 
Organisation Engineering and Physical Sciences Research Council (EPSRC) 
Sector Academic/University
Country United Kingdom
Start 10/2015 
End 09/2020
 
Description ESRC Northern Doctoral Training Centre
Amount £96,800 (GBP)
Organisation Economic and Social Research Council 
Sector Public
Country United Kingdom
Start 10/2016 
End 10/2020
 
Description Urban Living: Integrated Products and Services.
Amount £38,770 (GBP)
Funding ID 53482 - 399250 
Organisation Innovate UK 
Sector Public
Country United Kingdom
Start 10/2015 
End 10/2017
 
Description ISMCTS and Data Analytics from Spades - AI Factory - Peter Cowling 
Organisation AI Factory
Country United Kingdom 
Sector Private 
PI Contribution Developed novel algorithms deployed in a game.
Collaborator Contribution Provided significant amonts of game data, access to software (£180k), and time - consultancy, events, advocating DC Labs (£50k over 4 years).
Impact Algorithms deployed in a game with 6.5 million + downloads. Publications: 2 journal papers, 3 conference papers.
Start Year 2011
 
Description Annual NEMOG Symposium 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact The annual NEMOG Symposium has become a well attended networking and outreach event for the project. We have routinely attracted over a hundred participants to every event, leading to lively discussions and helping to focus our ongoing research on topics of key interest and impact on the games industry.
Year(s) Of Engagement Activity 2014,2015,2016
URL http://nemog.org/event/nemog-symposium-2015
 
Description Conversation Article: Why Tech Giants are Investing millions in AI that can play video games 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Published article summarising the investment going into AI by large tech companies, including google deepmind, the achievements and progress they have made and the significance of it, with the link back to research in DC Labs.
Year(s) Of Engagement Activity 2017
URL https://theconversation.com/why-tech-giants-are-investing-millions-in-ai-that-can-play-video-games-8...
 
Description Digital Creativity Labs Launch Event 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact High Profile Launch event for Digital Creativity Labs. 144 people attended, with a 50/50 split between academia and industry/ 3rd sector organisations.
Keynote from BBC Click's Kate Russell, combined with a panel and demonstrations of 20 research projects.
Generated 25 leads for follow up, increased twitter following by 130 followers and increased subscriptions to DC Labs newsletter.
Press coverage from York Press, Creative England and Radio coverage from York Business Hour (see other entries).
Year(s) Of Engagement Activity 2016
 
Description Game Jam York - 2013 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach Local
Primary Audience Undergraduate students
Results and Impact 40 students and academics came together for 48 hours, forming teams to develop games, which were judged by an industry panel. It resulted in increased awareness of the games research going on at York and better connections with the student community.

It was run as part of the Global Game Jam with sites participating around the World.
Year(s) Of Engagement Activity 2013
 
Description NEMOG Investment Event 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact The activity focused on bringing together investors interested in the video games industry and regional video game development companies looking for exciting funding opportunities. The three investment companies (RSM International, Coccoon Networks, and Northstar Venture) pledged £150m potential funding opportunities.

To facilitate the process NEMOG researchers developed a software application that allows companies, through a series of questions, to profile their business model, and allow them to communicate it more effectively to the investors. 13 profiles were created and all representatives from these companies were invited for private talks with the representative of the investors, to explore potential partnerships.

At the end of the event, at least 3 video-game companies were invited to continue talks for exploring potential investment.
Year(s) Of Engagement Activity 2016
URL http://nemog.org/event/nemog-games-investment-networking-event-newcastle-gateshead-01092016
 
Description NEMOG Launch Event 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact The project launch included talks by leading games industry figures and an introduction of the team and the project to a wide range of attendees from both industry and academia.
Year(s) Of Engagement Activity 2014
URL http://nemog.org/event/nemog-launch
 
Description NEMOG Symposium 2016 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact Final event for the NEMOG project, run in conjunction with Game Republic, attended by many of the games industry.
Keynote by Anders Drachen, with presentation on the outputs of the project and exhibition of NEMOG, DC Labs and IGGI demonstrations.
Video produced which summarises the event and the project.
Follow up enquiries fed into DC Labs.
Year(s) Of Engagement Activity 2016
URL http://www.nemog.org/event/nemog-symposium-2016
 
Description NEMOG Symposium highlights 
Form Of Engagement Activity A broadcast e.g. TV/radio/film/podcast (other than news/press)
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact Video capturing the outputs from the NEMOG project, the final event and feedback from industry partners.
Year(s) Of Engagement Activity 2016
URL https://www.youtube.com/watch?v=in_g6xWij7w
 
Description Peter Cowling attended UKIE Westminster reception (with Matt Hancock MP and others) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact I was invited to a UKIE-hosted reception at Westminster - providing an opportunity to talk about our research to people at Westminster including Noirin Carmody (chair of UKIE), Lynne Kilpatrick (civil servant - Head of Video Games and Creative Industries Skills) and many from the games industry.
Year(s) Of Engagement Activity 2017
URL https://ukie.org.uk/event/2017/10/16/westminster-games-industry-day
 
Description York Business Hour Radio Interview 
Form Of Engagement Activity A broadcast e.g. TV/radio/film/podcast (other than news/press)
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Public/other audiences
Results and Impact Radio Interview with Vicky Hodge about the NEMOG project and DC Labs which came from DC Labs Launch event.
Year(s) Of Engagement Activity 2016
URL http://businesshour.podbean.com/e/york-business-hour-programme-10-gaming-and-dc-labs-business-traini...