Whither Thou Goest, id Software?
Halo 3 is out, and Half-Life 2: Episode 2 is just around the corner. So now seems a fitting time to post on the company that created the business model for the modern action computer game - id Software.
I’ve been an id Software customer since around 1994, when Doom II came out. Ever since then I’ve watched as they created, dominated, and ultimately ceded an entire gaming genre - that of the first-person shooter. Examining how they’ve innovated not just the products but the entire gaming software business greatly illuminates the innovation process itself - and how a company can ultimately lose the industry they helped create.
Product Innovation - they created the first person shooter, technically, with Castle Wolfenstein but didn’t become really famous for it until Doom. There were three things about Doom that were totally unique. The first person perspective, even with a graphics standard that is by today’s standard primitive, created an immersive, addictive experience. The networking capability ultimately created the cybersport of ‘deathmatch’ (later institutionalized by Quake). And the fact you could take it out for a test drive in demo form created a new business model for gaming companies. In 1996, Quake was the first game of its type to be rendered in true 3-D, pushing the standard for graphics to a new level. Both Doom and Quake were highly customizable - gamers could create new maps and actually hack the source code to create totally different games. Within a few years id developed a reputation for producing the most cutting-edge, engaging gaming software anywhere.
Business Model Innovation - When you bought Doom, it was usually after having downloaded a short demo version of the full game. The additive nature of the gaming experience virtually guaranteed customers would shell out for the full version. They carried this model through the Quake series as well. The demo-full version model has been adopted by the entire gaming industry in some form. And they licensed the core ‘graphics engine’ to other gaming companies.
Networking Innovation - Soon after Quake hit the market, hardware manufacturers started producing enhanced video graphics cards to exploit the capabilities of the Quake graphics engine. As more games were rendered with a 3-D engine, more customers bought the new cards. id helped create the market for third-party video graphics cards and in doing so forged strong relationships with NVidia and Voodoo Graphics. But the big networking innovation id created was with reaching out to and linking with the online community. Thousands of id customers created websites devoted to modifying the game and distributing customer-made maps and modifications. And id employees published personal notes to the online community to further create a connection.
Channeling Innovation - The internet created the ideal channel for id’s product delivery - download the demo, order the full version. Later id relied on traditional retail outlets to sell the full versions but the channel for demo deliveries remains the internet. Fan-based websites maintained libraries of id’s demos and customer-generated add-ons.
Customer Experience Innovation - As I stated above, the first person perspective created an immersive customer experience. This was later enhanced by the addition of the 3-D graphics and high-performance graphics cards. Compared to the ’side scroller’ action games of the consoles, Doom and Quake were a revolution in gaming experience, often compared to crack in addictive qualities. When internet deathmatch was institutionalized by Quake, customers invested countless hours honing their gaming skills. Tournaments were held, champions crowned, results publicized, celebrities created. And the customizable nature of the product endeared the game to highly creative customers eager to make new maps, characters, and worlds of their own.
Branding Innovation - The product, networking, channeling, and customer experience innovations created a powerful brand image for id. Id evoked a strong sense of customer loyalty and emotional connection. Customers became fans, fans created websites devoted not just to the products but to the employees of id Software themselves. John Carmack, the public face of id, was regarded as the greatest graphic engine developer on the planet. New products were anticipated for YEARS in advance of release.
A Changing Playing Field
By 1998 id had achieved total domination of the first person shooter genre and was enjoying the fruits of two streams of income - from the games themselves, and from the licensing of their graphics engines. Up until then the games that other companies developed with id’s engines had been extremely similar to Doom and Quake in gameplay and features. Certainly none had surpassed them. But then Sierra introduced a new title from Valve Software called Half-Life.
Even though Half-Life used the Quake engine, it looked and played nothing like Quake. Valve revisited the fundamental gameplay experience and found it lacking in several areas. In improving gameplay, Half-Life was judged by customers to be superior to Quake II.
Then other companies created their own graphics engines for their own 3-D shooters. Unreal was a game similar to Quake II but had better graphics and a different gameplay experience. Half-Life’s spinoff online game Counter-Strike innovated the deathmatch model to create a totally different competitive environment. Meanwhile id released Quake III, which was eclipsed by Unreal Tournament.
Five years later id released Doom III. This was to be the game that recreated the genre, establishing a new high mark for graphics and gameplay. But when released it proved to be a much nicer looking version of the same game id had always produced - linear, corridor-intensive, confined. Half-life 2 was released the same time, and proved to be a much better game with equally stunning graphics.
id Re-evaluated
So what is id Software? A video game company, or a graphics engine company that uses games as a way of marketing their engine? I am leaning to the latter. Their core competence clearly is graphics engine innovation. Their gaming experience has remained constant for years, while others have concentrated on innovating new and better customer experiences. Valve has evolved Steam from a Half-Life/Counter-Strike interface to a video game sales channel for dozens of software titles, including, ironically, id Software’s.
I believe a fundamental reason for this is that every innovation id introduced - product, business model, channeling, customer experience, branding - was easy to copy. And after establishing themselves id concentrated their innovation efforts on products, while other companies copied and improved everything else id had created.
While others might want to see id concentrate on the newest and most advanced graphics engine, I’d like them to refocus on the other areas. They could create the next great video game business model, invent a totally new gameplay experience, and redefine their brand. I find myself still connected to id Software emotionally - but I’ve yet to experience the newness and psychological immersion I had when first playing Doom and Quake. It would be nice to have that feeling again.
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