The Real Numbers Behind AT&T’s Price “Increase”

Jan 19 2012

It has been interesting to watch the reaction to AT&T’s price “increases” today – interesting in that most of the chatter on AT&T’s rate increase focuses solely on prices going up.  There really is a bigger story there:

 First, the increases:

AT&T Data Plus 300MB: $20 for 300MB
AT&T Data Pro 3GB: $30 for 3GB (up from $25)
AT&T Data Pro 5GB: $50 for 5GB, with mobile hotspot / tethering

The lowest tier is $5 higher (33%) but comes with 300MB instead of 200MB (50% more).  The net effect is a reduction in the cost per 100MB from $7.5 to $6.66. If my math is right, that’s about an 11% decline.

The middle tier also rises $5 (20%) but comes with 3GB instead of 2GB (50% more).  So the cost per gigabyte actually dropped $2.50. A net reduction of 20% per GB.At the high end, the rate has actually dropped by $5 from $55 to $50 (see this price chart from PCMag just a few months ago). That’s a 9% decline.

Most of the coverage I have seen mentions the rate increase only in the lower and middle tier. I suspect the reason nobody is commenting on the higher tier in most of the coverage is because it contradicts the “rates are rising” storyline.  Why let facts get in the way of a good article, right?

The price drop for heavier users, and the fact that you are paying less for the equivalent amount of bandwidth, is largely unreported. I guess it just doesn’t fit with the established narrative that telecom companies are out to take more money but not improve service.

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Why Skylanders is the Future of Gaming, and Why that Terrifies Me

Dec 28 2011

For Christmas, Santa brought my son a video game called Skylanders: Spyro’s Adventure.  The game, aimed at 8-12 year olds, is amusing to play and T2 and I have spent a fair amount of time blasting our way through the Skylander universe.  What’s fascinating about the game, however, is the mechanics behind it.  The way the game operates is, I believe, the future of gaming.  Let me tell you why…

The Portal

Skylanders is based on series of character tokens that enter and exit the world via a power portal. Game characters are sold as action figure tokens – the dragon in the image below.  To select a character in game, you simply drop a new token on the portal.  The switch is instant, negating the need to change classes or restart chapters.  Simply swap out your token and a different character appears on screen.

Skylanders Power Portal

The characters come in eight different series – air, earth, fire, water, life, undead, tech, and magic.  Each series has, at present, four different character tokens, for a total of 32 different playable characters.

As your characters progress in the game, their stats, powers, and equipment are stored locally on the token.  Take your favorite token to a friend’s house, drop it on his portal, and play with all the same characteristics you had on your own.

More importantly, however, you can drop your token onto his portal regardless of whether you have the same game system.  You play Xbox but your friend plays PlayStation?  Doesn’t matter.  You can play head to head or cooperatively with your tokens on the other platform.

Why this Game is Important

There are several factors at play that mark this game as a critical marker in video game evolution.  For some time now, the concept of downloadable content has been seen as the great future of gaming.  The console would simply be a storage platform for games and future releases and expansion packs would be delivered via the Internet.  That model is flipped on its head by Skylanders, but it is also complemented by it.

The downloadable content model simply continues two inherent flaws in the console model.  The restrictive nature of consoles is such that you can only play with friends on the same console. I can’t play Call of Duty with my nephew because he has a PS3 while I prefer Xbox.

If we play split screen on his system, none of my achievements carry over to my own console.  Making my character portable, as Skylanders has done, divorces my game play from the console.

In addition, Skylanders has created expansion packs as tokens as well.  For instance, the Pirate Seas expansion (below) includes a pirate ship token that unlocks additional playable content.  Like the character tokens, those expansion worlds exist separately from the console.

Skylanders Pirate Seas Expansion

If I take my token to a friends machine, we can play the expansion even if he hasn’t purchased it.  When I take it home, the expansion goes with me.

The folks at Activision have made great efforts toward solving the digital rights management issue by making your content token based.

The Big Problems With Gaming

The main flaws in the gaming experience today are the lack of console interoperability, the lack of character portability, and the means by which content creators can protect their product.  With Skylanders, Activision has addressed all three.

The ability to keep chatracters separate from the game, to unlock expansions with a token rather than the console, and to move both freely between platforms will be a model more game manufacturers adopt.

While making great strides in addressig these flaws, Activision has also created fairly attractive game collectibles.  As long as they maintain support for previous generations of character, as the develop additional Skylander games, these collectibles can become a lasting investment in the games you own.  I just wish my character from the the first Fable could have been carried forward into future Fable frachise games.

In addition, the tokens are relatively attractive figures in their own right, making your collection equally interesting as a long term collectible.

It’s not often that I am truly impressed by game innovation.  I find most experiments of this nature to be fairly uninspired.  In this case, however, I think Activision may have scored a big win.  I expect to see other games employing the same mechanics – likely in the very near future.

Why that Scares the Hell Out of Me

While I am very impressed with the game and the token system, I am also a bit nervous about it.

As I mentioned, there are 32 playable characters across the Skylanders universe, a handful of “special” character exclusives only available at some retailers, and two expansion packs.  Each character token costs about seven bucks.  Buy the game starter kit (with the portal, disk and three characters) and you’re out $60.  Many in-game items require accessing locked areas that can only be opened by characters from a particular series.  The minimum investment to have enough characters to open all areas is another 5 tokens or $35-40.  To collect all the characters, you would be north of $200.

That’s probably not a big deal when you consider the typical cycle of a game, the expansion packs, and other DLC.

A token scenario for a game like Call of Duty could look significantly less complex.  For instance, having a token that could carry a single custom loadout would allow you to port your best class to a friend’s console.  That could also allow you to carry the experience and weapons you gain back from that console to your own.  It would still allow Activision to sell additional classes as tokens, however.

If token based characters and content catch on, and I think they likely will, it could make gaming a more expensive proposition for the hardcore gamer or collector.

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The Case for Student Loan Reform, But Not How You Think…

Oct 26 2011

So President Obama is in Denver today talking about how to ease student loan debt.  In yet another example of the politics of big government, he’s expected to reduce the amount students would have to pay per year (implementing a cap at 10% of salary) and push for forgiveness of debt at 20 years rather than the current 25.

The amount of student debt in the US is massive; over a trillion dollars currently.  Americans currently owe more in student loan debt than they do on credit cards.  The Stafford Loan, for instance, allows students to borrow up to $57,500 as an independent (with no parental support).  Students often compound commercial and federal loans into enormous sums of money – often under the assumption that they’ll be able to find work upon graduation.

Now before you suggest that’s the problem, look again.  The Labor Department for September of 2011 shows an unemployment rate of only 4.5% for those with a college degree.  So an inability to find jobs doesn’t seem to be the norm for graduates.

So we have people investing in their education, and rightly finding work after graduation.  Should be no problem, right?

No.  The problem is two-fold.  The average student debt for 2011 graduates is $22,900.  Since many graduates will have less or even no debt, the numbers among those who took loans is likely significantly higher.

The average salary of 2011 graduates entering the workforce is only $36,866.  Payscale.com provides a handy list of the average annual salary by degree.  It shows the salary for history, sociology, anthropology and others typically starting in the mid-30s and topping out ‘mid-career’ around $60,000.  Based on regional differences, in reality, you have students graduating who may have more debt that they can possibly make – even at Payscale’s “mid-career” salary level.

If we’re going to make changes to how that debt is repaid, we should also make changes to how it is accumulated.  The entire practice of student loans should be reformed in two significant ways.

Capping Student Loans

First, student loans should be subject to the same earnings litmus test that applies to other credit, but more strictly.

Credit cards, home loans, and other consumer debt limits are typically predicated on your ability to repay that debt.  Amex doesn’t hand out black cards to college kids with no income for good reason – they have little ability to repay.  Home loans, at least in theory if not in practice, require you to prove income before you can qualify for more home than you can afford.

Student loans have none of that. Student loans rarely take into account the potential future earnings of the student.  As mentioned, students frequently compound loans.  The problem is it becomes very easy to accumulate more debt than your future earnings will accommodate.

Student loans should be capped at no more than the average annual salary for a student with that degree.  If a student is likely to make no more than $32,000 with a degree in social work, they shouldn’t be allowed to accumulate loans of $57,500 or more.  By capping total student loans for that degree at $32,000 (combining both direct federal and commercial) and applying the administration’s 10% annual limit for repayment, most student loans should be paid off in significantly less than the twenty years proposed for forgiveness (low-interest rates being assumed).

It is inexcusable that students are allowed to graduate carrying debt nearly as high as, or higher than, their ‘mid-career’ earnings.

Restrictions on Student Loan Usage

Often students take out more loan than they need for tuition and books in order to cover living expenses and other incidentals.  Any credit expert will tell you that putting meals and perishables on a credit card is a terrible idea as the interest increases the cost of those items many times over by the time it is paid off.  Student loans have no such restrictions, and unless things have changed dramatically, there are no caveats against using loans this way.

Stafford Loans, as just one example, carry restrictions that the money is too be used for tuition, books, room, board, or “other education related expenses.”  So what qualifies, exactly?  It’s hard to say.  A search for “Stafford Loan Eligible Expenses” turns up absolutely nothing from the Department of Education on the subject, and the FAQs many schools host have that vague “other” language.  Apparently a used car is an education related expense, as are sneakers, iPods, or anything else.

Since the schools typically hand you a check or direct deposit the funds, there is really no telling what those expenses might be.

If we want to help students who are looking at debt based on future earnings, the least we should do is bring these restrictions in line with sound financial advice.  Allowing students to rack up debt on things Big Macs and tennis shoes is ridiculous.  The education system should limit the way these funds are expended so they cover actual school expenses.  The school should not be in the business of doling out excess funds to 18 year-olds for discretionary spending.

Just recalling my own college experience, I can tell you the day loan excess was disbursed was like a Roman orgy.  The only thing “school related” about the spending were the excuses for why you couldn’t make it to that 8 a.m. class the next morning.

By making these two simple changes, student loan debt might actually be used in accordance with the goal of getting an education.  It would, at the very least, ensure that degree in social work doesn’t come with a debt you’ll never be able to repay.

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Overriding Autocorrect Dictionary on iOS 5

Oct 13 2011

I had heard that iOS 5 would allow you to override the autocorrect dictionary.  That feature alone would make the upgrade worthwhile to me.  After downloading the latest OS, I went looking for the edit function.

I found a number of references to adding international keyboards, but those weren’t doing the trick for my outdated 3GS.

I did, however, discover the trick.  Here’s the easy way to override your dictionary on even the oldest phones.

First, choose Settings -> General -> Keyboard:

Below “International Keyboards,” you will see “Shortcutss”:

Hit “Add New Shortcut”:

Now enter the word you find iPhone continually correcting as both the phrase and the shortcut:

(iPhone changes “hell” to “he’ll”, which I find highly annoying.)

Hit save, and iOS will never correct that word again.

 

That’s it.  No international keyboards. No hoops.

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A La Carte for Video Games

Sep 22 2011

Last night I tweeted something mostly to mock the “free culture” movement that doesn’t want to pay for anything.  Since I mostly play the multiplayer versions of video games, and rarely spend any time at all with the storyline, I made the following comment:

A la carte for video games! Why should I have to buy the storyline just to get the multiplayer?

Since then, it occurred to me that there is a larger point to be made from that idea.  Everyone agrees that a disk based video game industry is on the way out.  As next generation consoles include more drive capacity, broadband speeds continue to rise; and optical drives fall aside in favor of downloadable content, the idea of a straight download model makes sense.

As delivery changes, the options for sales grow.  Services like OnLive, Steam and the Xbox Live Arcade clearly illustrates that streaming or direct to drive game delivery are models that work.  Given the removal of physical constraints that accompany disks, there is little reason game companies couldn’t provide three versions of a game – multiplayer, storyline, and a combo pack.

If they did, people like me would never buy the storyline again.  I simply don’t find the storyline game all that interesting.  Linear games are boring affairs and open-world can get just as tedious.  Multiplayer is infinitely variable depending on the opposition.  Campers (those cowardly rat bastards) aside, human players make a more interesting game.

If I could buy just the multiplayer for half the cost of the combo pack, I’d buy a lot more games.  My total contribution to the industry wouldn’t drop, but it would be spread out across a wider array of companies.  I suspect a lot of people would do the same.

The possibility of owning a larger library of games I would play (multiplayer) and keeping my drive from being all crudded  up with storyline crap, appeals to me.  I hope the game developers will realize the options available to them and consider breaking up the product.

That said, I’m not about to demand FCC acton to regulate game companies to make that happen.

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