Why Do We Love Genres So Much?
Posted by Jamie Madigan in Articles on February 23rd, 2010
The guys over at Penny Arcade had a great bit where they poked fun at gamers’ obsession with fitting everything into neatly defined genres. The stars of the strip are sitting at a tasting table with Gabe snootily remarking, “This is more of a late eighties platformer, with …Yes, I believe there’s a hint of sim.” To which Tycho replies, “Yes, sim. Quite right. Garcon! More genres!”1
Why are we so obsessed with cramming games into genres and slapping labels on them? Most game reviews will remark on what genre a game fits in if not declare it outright, and if a game refuses to fit properly they’ll create a new genre just for it –witness the rise of the ridiculously named “third person, cover-based shooter” genre a la Gears of War. When I worked at GameSpy, we developed successful “genre sites” like 3DACtionPlanet.com2, StrategyPlanet.com, and SportPlanet.com that focused only on games in those genres. There was considerable internal debate over whether this made a lick of sense, but our ad sales guys loved it because it let them sell more targeted ads relative to a huge, monolithic site that covered everything.

A typical genre breakdown.
Part of the reason for this genre love is that classifying things is human nature. It’s a habit instilled and rewarded early in life, as most toddlers love arranging objects according to shape, color, size, or function. And for good reason: assigning objects to sets builds the neural pathways necessary to develop basic skills in logic, counting, and mathematics. So when little Billy puts Doom and Modern Warfare 2 together, you reward him with a delicious frozen treat.
But there’s more to it than that: genres are useful for what Amos Tversky and other researchers call “elimination by alternatives” decision making3 Richard Thaler and Cass Sunstein elaborate on this concept in their excellent book, Nudge.4 Imagine a simple decision, like say buying a new keyboard for your desktop computer. You’d probably be able to identify all the relevant factors, like your preference for ergonomic layouts, whether or not you want wireless, and price. You can look at the alternatives, take all that into consideration at once, and make your purchase. Fine. Bam. Done. This is called a “compensatory choice strategy” because for any one alternative a single factor (like low price) can compensate for a deficit in another (like lack of wireless support).
But think about something way more complex like renting an apartment. You’ve got a multitude of factors at play –distance from work, rent, lease terms, proximity to public transportation, safety of the neighborhood, square footage, and defensibility in the event of a zombie outbreak, just to name a few. AND you’ve got hundreds of potential apartments to choose from.
In situations like these, people tend to adopt that “eliminations by alternatives” approach I mentioned earlier. You’ll start picking out factors and setting thresholds for them. So you think “Anyplace with fewer than two bedrooms is out. And it has to be within 30 minutes of work. And it can’t currently be on fire.” And so on. This makes the decision manageable and prevents you from stroking out when you try to combine the weights of so many factors in a compensatory manner and simultaneously compare all the alternatives –of which there could be hundreds. And this usually works. The problem is that options that are outstanding on some important factors can get nuked just because they’re just barely on the wrong side of a cutoff for another. Alas, we are but puny humans.
This is a decision-making process that businesses and marketers are eager to hijack, sometimes in ingenious and even helpful ways. Thaler and Sunstein point to paint stores’ use of a color wheel to help you choose colors, as opposed to figuring out the difference between “Eggshell” and “Off White” based on names alone. Or think about going to a bar that boasts “100 beers on tap.” If you look at the menu, they probably don’t have your options listed in alphabetical order because how is the uninitiated supposed to know the difference between “Boddington’s Pub Ale” and “Dirty Dog Hefeweisen?” What any savvy owner of such a bar would do is facilitate elimination by alternative by grouping the beers by more meaningful factors, like taste, body, or color. That way people who dislike, for example, dark beers can automatically discard those options.
In other words, group them into genres.
This is why I think the habit of sorting genres in video games (and movies and music, for that matter) is so hard to shake. When faced with a huge number of possible games to buy, people use simplifying strategies to make that choice more manageable. One such rule may be “I only like role-playing games,” though I suspect less exclusive rules like “I’ll consider anything that’s not a sports game, a flight sim, or a survival horror game” are more common. It narrows the field and lets you focus on other things. Sure, maybe you’re missing out on some great games through this, but at least you don’t have an aneurysm every time you walk through a Best Buy.
Unfortunately I think this is part of the reason that Brutal Legend didn’t do as well at retail as it could: people couldn’t figure out what genre it belonged to. Action? Adventure? Driving? Real-time strategy? It was its own (totally awesome) creation, but because people couldn’t apply a certain decision simplification strategy on it, they missed out.
Footnotes:
- Yeah, I know, I just quoted the Penny Arcade guys just last week, too. I’ll quit for a while.↩
- Yeah, it’s an awkward name, but “ActionPlanet.com” was already taken and the guy wouldn’t sell↩
- Tversky, A. (1972) “Elimination by Aspects: A Theory of Choice.” Psychological Review, 76, 31-48.↩
- Thaler, R. & Sunstein, C. (2008). Nudge: Improving Decisions About Health, Wealth, and Happiness. New York, NY: Penguin Books.↩
The Endowment Effect and Used Game Sales
Posted by Jamie Madigan in Articles on February 9th, 2010
A few years ago I decided that I really wanted a fancy new camera so I could properly indulge my budding interest in photography. Problem was, I didn’t have the cash. But what I did have was a closet literally full of old games I hadn’t played in years and would probably never play again. I think you can guess where this is going.
At first, I was extremely disappointed in eBay auctions I set up. When I set minimum reserve prices1 the games didn’t sell and when I didn’t set reserves I got what I considered paltry sums. Why wasn’t anyone willing to pay what this stuff was worth to me? The fools! Many a person trading used games to places like GameStop probably ask the same question: how come it never seems like they offer a fair price?

Some of the games I was so attached to that no reasonable price could make me part with them. You can't have them!
The reason, I eventually remembered, has to do with what’s called “the endowment effect.” Basically this bias in puny human thinking leads us to over value something literally the second we consider it to be ours. Richard Thaler elegantly illustrated this phenomenon in an experiment involving coffee cups.
One group of Thaler’s subjects was shown coffee cups and asked, “Hey, what would you pay for one of these babies?” A second group was actually given the coffee cups and then asked “Hey, how much would it take for me to buy that coffee cup off you?” The average dollar values from each group were WAY different, with the folks who had been given cups saying that their cups were worth a lot more. In other words, they demanded more to relinquish the cups than they would have been willing to spend on procuring them in the first place. Totally irrational.
Behavioral Economist Dan Ariely provides a more elaborate but cooler demonstration of the endowment effect through an experiment involving students and highly coveted tickets to Duke University basketball games. When Duke’s fervor over its basketball team outstrips the supply of tickets, they are often given out according to a random lottery. One season Ariely contacted those who had won the right to tickets from the lottery and asked how much to buy them. Similarly, he contacted those students who had lost the lottery and asked them how much they’d be willing to pay for tickets if he could find a seller.
Those who had won the lottery demanded an amazing average price of $1,400, while those who did not have tickets offered to pay only an average of $170 to get them. Woah. Endowment effect indeed. Which group do you think is playing the part of GameStop in this example?
Hey, look, you can even watch Ariely explain it himself in this little video:
Done? Okay. There’s more to this phenomenon, though, because other research has shown that the endowment effect is rooted in something deeper: that the object has significance. Let’s go back to my rapidly diminishing game collection. After realizing that I had to overcome the endowment effect, I started pricing things to move. There were, however, some games that I simply could not bring myself to reduce my prices on. These were watershed games in my time with the hobby: Baldur’s Gate II, Half-Life, Quake III, NOLF, Planescape: Torment, and other stuff that I had a real history with. Why couldn’t I part with them the same way I’d parted with the others? I’d still probably never play them again.
It turns out that the endowment effect really gets ramped up the more personally significant the item are to you. This shouldn’t be shocking because we’re all familiar with the concept of “sentimental value.” But what’s really amazing is that not only can that meaning be invoked by your ownership, bit can also be elicited simply be knowing that an item has a history –even if you’re not a part of that history. This is the principle upon which the philanthropic project Significant Objects is founded.2)
The team at Significant Objects buys junk then has professional writers make up elaborate and interesting faux histories for those objects to be incorporated into eBay auctions. Even though the team makes it perfectly clear that the stories paired with these objects are fictional, the results are amazing: an empty chocolate tin sells for $36. A jar of marbles goes for $53. A simple ash tray rakes in $107. Just because framing the objects in terms of its elaborate, personal history makes the buyers perceive it as having more significance and meaning. (And lest you become indignant about such manipulation, allow me to point out that the Significant Objects project donates some of its earnings to charity.)
So next time you try to hawk some of your old games, you should first consider how the endowment effect is inflating your irrational expectations about how much they’re worth. Then try telling a story about your experiences with the game and why it’s important. Maybe you’ll win that glassy-eyed Assistant Manager over with you tale.
Footnotes:
Et Cetera, February 2010
Posted by Jamie Madigan in Uncategorized on February 4th, 2010
And now for some things that aren’t worth a post by themselves, but which I can dump together.
ONE: Hey, did you know that some of the content here is being syndicated by Gamasutra.com and GameSetWatch? You can see my article on loss aversion here, and new stuff will appear bi-weekly. They actually want me to be more verbose there than I normally am here, so the columns posted there may have bonus material.
TWO: You may have noticed that the Google Adsense ads are gone. This is because Google booted me out of the program, denied my appeal, and refused to pay me the $115 that was in my account at the time. Presumably the reason being my article on reciprocity where I half-jokingly asked readers to click on the Google Adsense ads. Apparently they view asking people to click on ads as a “threat to their affiliates,” so let me apologize and do what I can to rectify my past mistake by asking, with the same amount of sincerity, that you to NEVER click on ANY Google Adsense ads AGAIN.
THREE: I come across a lot of stuff on the Internet that I file away for possible future use on this site. Usually what I do is use the Delicious Firefox plugin to tag the post and add it to my bookmarks on that site, along with a note to myself about how it might be used. It occurs to me that people might be interested in seeing these bookmarks, and so you can see my Delicious Bookmarks here. Or, if you prefer, you can abstain by clicking almost anywhere on the Internet except for that link.
FOUR: Speaking of which, I’ve gotten in the habit of posting on Twitter about the more interesting of these articles as well.
FIVE: I have articles currently drafted on the following topics: WoW pricing and the decoy effect, regression to the mean and owning some chumps, The effects of external time cues on perceived fun, MW2 javelin glitch abuse as a prisoner’s dilemma, and the endowment effect on used game sales. Look for them at some point in the future.
SIX: Big thanks to Nicholas, Andy, Hugo, David, and Andrew for donating via the PayPal link. You guys are awesome and I’ve ordered Robert Cialdini’s book Influence: The Psychology of Persuasion from Amazon. I’ve actually read this book before, but lost it and have been wanting another copy to use as a reference since starting this site. So thanks again, guys!
Psychological Flow and Fake Plastic Rock
Posted by Jamie Madigan in Uncategorized on February 1st, 2010
I think most of us have been in “the zone” at one point or another while playing a game. You know what I mean: that trance-like state where things just click and you just can’t do wrong, be it headshot after headshot in a shooter, making jump after perfectly timed jump in a platformer, or pumping out just the right units at just the right rates in a real-time strategy game. Things are challenging enough to keep you engaged, but not too challenging so that you’re able to lose yourself in the game. It’s a great feeling.
Psychologists call this state of mind “flow” and some of them even do it without then adding “…man” in their best hippy imitation. Psychologist Mihaly Csikszentmihalyi1 is one of them, and he identified nine characteristics of psychological flow2:
- There must be a fine balance between the task’s difficulty and the person’s skill
- One’s performance of the task must become automatic, with little if any conscious effort3
- The goals of the task must be very clear
- The activity must provide completely clear, unambiguous feedback about how well the person is doing
- There must be intense concentration on the task
- The person must feel a sense of fragile, finely balanced control
- Ego drops away and the person loses all sense of self-consciousness about what they’re doing
- The person loses track of time
- The activity becomes enjoyable enough to be a reason for its own being
Half of you are probably thinking “Hey, that reminds me of Rock Band!” Right down the the point of losing all sense of self-consciousness and flailing around with your little plastic guitar like a complete moron! The other half of you are probably thinking “No, it’s more like Guitar Hero!” You guys! You’re both right! And indeed, two researchers at Kansas State University had the same thought when they studied flow by having subjects play Rock Band songs and adjusting the difficulty of the game for each person until they hit that sweet spot associated with flow.

Too bad I couldn't find a screen cap of someone playing Pearl Jam's "Evenflow." How awesome would that have been?
Flow is generally seen as a good thing by people experiencing it, and people who experience flow in a work activity are generally much happier with their work and do it better than those who don’t experience flow. The same holds true for games. So to the extent that game designers wish to engender a sense of flow in their games, they can use that list above as a checklist of targets to aim for.
This also seems to present an argument for either adaptive difficulty that scales to the player’s skill or for many more grades of difficulty than the typical easy, medium, and hard. The racing game Forza 3 seems to take this concept to heart, offering a variety of “assists” that allow players to fine tune how much help they need with things like steering, traction, and even breaking around turns. This kind of thing suggests to me that paired with the right kind of feedback and clear goals, Forza 3 can bring a state of flow to more people than another game lacking such features.
Interestingly4 there is also research5 suggesting that flow is both a state and a trait. That is, it may be a state of mind and an experience, but there are also some people who are, by dint of their very special makeup, more susceptible to falling into that delicious state of flow. My guess would be that if you took the top 10% of the fake plastic rock maniacs at Score Hero and gave them something like the Dispositional Flow Scale6 (a tool designed to measure one’s propensity towards flow states) they’d blow the lid off that thing.
Footnotes:
- whose last name sounds like the bad guys in some Wing Commander game but totally isn’t↩
- Fullagar, C. & Kelloway, K. (2009). Flow at work: An experience sampling approach. Journal of Occupational and Organizational Psychology, 82. 595-615.↩
- What psychologists call “low action identification” because they like making up terms for things↩
- Well, interesting to me. Hey, shut up, you guys. Leave me alone!↩
- e.g., Fullagar and Kelloway (2009) again↩
- Jackson, S., & Eklund, R (2002). Assessing Flow in Physical Activity: The flow state scale and dispositional flow scale. Journal of Sport and Exercise Psychology. 24. 133-150.↩
DJ Jazzy Contrast – The Contrast Effect and DJ Hero Renegade
Posted by Jamie Madigan in Articles on January 25th, 2010
Why did Activision take an already expensive game and release an even MORE expensive version without adding a whole lot to it? And what does it have to do with “Ozark wild mushrooms served with a brandy demi glaze?” I’ve got an idea. Let me share it with you.
As you may know, DJ Hero, a relatively new rhythm game from Activision and FreeStyleGames, includes its own controller in the form of a fake plastic turntable. Many gamers thought that the initial price tag of $120 was high, but were outright boggled by the $200 –TWO HUNDRED DOLLAR!– list price on the special “Renegade” collector’s edition that only had a few paltry perks relative to the base model. Why would Activision take an already expensive game and put out an even MORE expensive version?1

$200? Ehh....
They’re stupid? Nope. According to one recent press release, DJ Hero was 2009’s highest grossing new video game IP. So something worked.2 At the very least, the Renegade Edition pricing is an example of what economists call “price targeting” and what author Tim Harford likens to getting turkeys to vote in favor of thanksgiving.3 In essence, Activision is putting the Renegade Edition out there so that people who are cavalier about price self-identify themselves and allow themselves to be sold basically the same product for more money. It’s the same trick restaurants use to find patrons willing to pay more for food when they charge an extra $.80 for a slice of cheese on your burger when it really only costs them a few cents.
But I don’t think that’s the whole story. I think there’s something called “the contrast effect” at work, and I think Eminim and Jay-Z would be appalled.
You may remember the contrast effect from my discussion how the cover art for Borderlands might have gotten approved. Basically it’s a cognitive bias that kicks in when focusing on the magnitude of one bit of information affects your perception of another piece of information. Like a colored tie appearing brighter when it’s contrasted against a white shirt. Here’s an extremely simple example where the same color of gray looks lighter or darker depending on the background it’s contrasted against:

Which circle is lighter? Trick question! They're the same.
This is why I think the Renegade Edition of DJ Hero was put out there: to activate the contrast effect and to make the regular, $120 edition look cheaper in comparison. Man, $200 for a video game? Forget that. I’m gonna be a the smart shopper and only buy the $120 version. What restraint I have! Quick! Somebody congratulate me!
This kind of thing is done to you EVERYWHERE around you, as the following quote from a New York Times story on the science of restaurant menu writing illustrates:
Some restaurants use what researchers call decoys. For example, they may place a really expensive item at the top of the menu, so that other dishes look more reasonably priced; research shows that diners tend to order neither the most nor least expensive items, drifting toward the middle. Or restaurants might play up a profitable dish by using more appetizing adjectives and placing it next to a less profitable dish with less description so the contrast entices the diner to order the profitable dish.”
Those “Ozark wild mushrooms served with a brandy demi glaze” may be the most expensive side dish listed, but the restaurant only listed them first so that the cheaper mashed potatoes, which have a higher profit margin, look more appealing.
If you’re like me, you see attempts at the anchoring effect everywhere once you know about it. Now that you know about it, think back on the last time you saw a regular version of a game advertised next to the collector’s edition. Does the regular one seem so cheap now?
Footnotes:
- DJ Hero Renegade photo credit: j.reed on Flickr.com↩
- But as Joystiq points out, that’s not the same as “most profitable”↩
- Harford, T. (2006). The Undercover Economist. Oxford: University Press.↩
Conan the Loss Averse Barbarian
Posted by Jamie Madigan in Articles on January 21st, 2010
I wrote just the other day about how loss aversion could be used to increase conversion rates on trial games. You can read that article for more details and a neat experiment illustrating the effect, but the gist of it is that people hate to lose things more than they like to gain them. Losing $10 is more painful than gaining $10 is pleasurable because “losses loom larger than gains.”
I kind of hate to dip back into the loss aversion well so soon, but Funcom recently provided such a textbook example that I couldn’t resist. Many players who had unsubscribed from the Age of Conan massively multiplayer game got an e-mail from the publisher stating, in part:
Dear customer,
Thank you for playing Age of Conan.
As part of our maintenance your account is now flagged to have your characters below level 20 deleted as part of maintenance. Please re-activate your account now to ensure that your characters progress and names stay intact.
In other words, “come back or your low level alt1 gets taken out back and shot.”

A Funcom database administrator gets ready to subject your character to "maintenance."
I’d be fascinated to see what this did to Age of Conan’s resubscription rate. If I were in charge of these things at Funcom, I would have randomly separated that mailing list into two groups and sent the above e-mail to the first half. The second half would have gotten something along the lines of:
Dear customer,
Thank you for playing Age of Conan.
As part of our maintenance your account is now flagged to have your characters below level 20 saved as part of maintenance if you resubscribe. Please re-activate your account now to ensure that your characters progress and names stay intact.
And then I would have looked at the differences in resubscription rates between those whose message was phrased in terms of losing their character and those whose message talked about saving it. Which of those two messages would you, as a MMO player, respond to more strongly? My guess would be the former, especially if you weren’t the handsome and well educated person you are on account of reading about loss aversion here.
Note: A combination of this and my previous post on loss aversion appeared on GameSetWatch. Look for more of my writing to appear there in the future!
Footnotes:
- not to mention your bank and your mule characters↩






















