Joshua Kennon » Video Games

Building a Flour Empire on Super Tycoons

Joshua Kennon — Thu, 20 May 2010 02:20:45 +0000

I have been playing Super Tycoons so much on Facebook and my iPad that I upped my donation to the developers from $150 to $250. I decided that my next focus is on launching a series of grain mills to build a fortune in the flour industry.

Once I’ve paid for the upgrades, which will cost at least several hundred million dollars in the game, I will have a total of 15 operational mills producing 151,200 pounds of flour per day. At $115 per pound, this would add $17.39 million to my in-game net worth every 24 hours.

If I never sold any flour, it would take roughly 20 days to make the commodities leader board because I’d have roughly 3 million pounds credited to my account.

Why Don’t People Realize You Can Do This In Real Life?

Joshua Kennon — Mon, 10 May 2010 06:58:31 +0000

During college, one of Aaron and my closest friends made a comment that still haunts me to this day. I was explaining that if you own a share of The Coca-Cola Company, you actually receive a proportionate cut of the company’s profits on every single can of Coke sold. This makes sense, after all … if a business is divided into 100 shares outstanding, and you own 1 share, you own 1% of the company. If you own all 100 shares, you would own the entire business and get all of the profit, right? For me, this falls into the, “We hold these truths to be self-evident” category.

She looks at me and says, “No. That isn’t true.” Not knowing how to respond, I kind of raise an eyebrow … “What do you mean?” I inquire. “Well,” she responds, “the stock doesn’t really have anything to do with what the company does. Just because I own shares of Coca-Cola doesn’t mean I’m seeing any of the profit from Coke sales down at the supermarket.”

For one of the few times in my life, I was absolutely dumbstruck. I had explained, very carefully, how a company is divided into pieces and those pieces were traded by buyers and sellers. The prices these buyers and sellers is reported each day, but they may or may not be rational so it is up to you to focus on paying a fair price and buying the most dividend income and look-through profit as you can for your money. She still didn’t make the connection and it made me sad because I wanted her to understand that, if you get enough of these “pieces” of businesses that we call shares, and you choose them wisely, you will just sit back and collect cash throughout your lifetime so you can do anything you want.

As I play the Tycoons game on Facebook throughout the day (I just leave it open on a MacBook and periodically go over and play for a few seconds before resuming whatever else it is I was doing), I start thinking about all of the people playing who aren’t financially experienced. Tonight, for example, I bought a chemical plant. That got me thinking … do most people realize they can buy a real chemical plant by purchasing a “share” of Du Pont?

If someone owned 10,000 shares of DuPont, over the past twelve months, they have received a real-life dividend of roughly $16,400 from their share of the profits. Just like the businesses in the game generate earnings to be redeployed, the real world works exactly the same way. Every chemical that leaves the factory is, in effect, working for the shareholder and generating cash flow and (you hope) earnings.

Why do people who enjoy these games get so into them, but never carry those principles over into real life? Do they just not know it is possible? Maybe if a stock broker setup a store where you could walk in, see framed certificates of different companies, and you shopped for them like picking out a lamp, people would get it. They would see the physical checks arrive in the mail each quarter.

French Style Gardens … A Gift to My People

Joshua Kennon — Thu, 29 Apr 2010 01:07:23 +0000

I decided to spend through a lot of the accumulated gold in my treasury from Ngmoco’s We Rule game on the iPad. Following an extensive kingdom redesign, the citizens of my realm can now enjoy French styled gardens. I said it before and I’ll say it again … my munificence knows no bounds

If you have the game on your iPhone or iPad, add Aaron and me. His gamer tag is Gold Mage and mine is treasuryshares.

We Rule by Ngmoco for iPad and iPhone Has a Really Cool Business Model

Joshua Kennon — Mon, 26 Apr 2010 16:21:45 +0000

I’ve been playing We Rule, the new video game by Ngmoco. It is a freemium model, meaning you play the game for free by downloading it from the iTunes store. But to level up faster, you can spend real money on something called Mojo. It is the 21st century equivalent of an arcade game business model with the exception that you don’t have to spend money to enjoy the experience if you are patient. In fact, you could become the greatest ruler of all time without spending a penny.

Here is the Kingdom over which I reign as Sovereign monarch in We Rule, the new iPad and iPhone game by Ngmoco. I am very close to investing an additional 18,000 gold pieces into a stable for my people instead of upgrading my castle, because my munificence knows no bounds.

Yesterday, I read the Exxon-Mobile stock report and I found myself obsessively checking my crop harvest time so I didn’t lose the investment I made in seed planting. We Rule by Ngmoco is addictive and fun. It isn’t like most games I play, so it is outside of my usual realm of experience.

The cool thing is that most of my friends and family are now online playing so we trade between the kingdoms, making us both richer and more vibrant (clearly the game developers at Ngmoco read Adam Smith!).

If you want to download the game, just get We Rule from the iTunes store for your iPhone or iPad and you can add both Aaron and me. His gamer tag is “Gold Mage” and mine is “treasuryshares” without the quotes, obviously.

I Beat Final Fantasy XIII Tonight

Joshua Kennon — Tue, 23 Mar 2010 03:13:56 +0000

Don’t worry – I’m not going to give away any spoilers (or the images of the final bosses other than the one everyone has already seen), but suffice it to say, I owned Final Fantasy XIII tonight. I took a break from going over the insurance policy renewals for the businesses, which are due soon, and reviewing some of our year-end dividend tax reports from the brokerage firms before sending them to our (amazing) accounting firm. I kept saying, “I’m only going to play for a few more minutes.” Then, I realized I was only a few battles away from the end and had to complete the game.

The cool thing is, as with Fable 2, the end of the plot is not the end of the game. Final Fantasy XIII goes on long after you beat the final antagonist. In fact, the final level of the crystarium doesn’t even become available until after you’ve successfully completed the final boss. There is an entire world left to explore, including far tougher enemies. I will get to that but for now, I’ve gotten Final Fantasy XIII out of my system and can return to getting everything prepared before Jocelyn’s visit next week. (She has informed Aaron and me that we cannot work very much at all, meaning we have to do everything in advance.)

Barthandelus, Lord Sovereign of the Cacoon fal'Sie bears an interesting resemblance to some of the imagery used in the book of Revelation. There is also another fal'Sie that is taken from a Persian myth involving a tyrannical god that tortured his servants and was destroyed by a group of saviors. I think the Japanese video game makers were well steeped in the literary tradition of apocalypse. (I hate to use the word in that context since it literally means "an unveiling" or "to reveal" and NOT "the end of the world" but most people don't know that so Webster finally bowed to it and now uses it in that context, so whatever ...)

15 Hours of Final Fantasy XIII

Joshua Kennon — Mon, 22 Mar 2010 06:41:23 +0000

I played Final Fantasy XIII for approximately 15 hours this weekend. I’m up to roughly 42 or 45 hours on the game and it is amazing thus far. It’s more of an interactive movie than anything else, but I’m really into it (which surprised me). I think it’s because we’ve been getting so much work done lately that I needed a break. Yet, I just had to keep leveling up the crystalium.

First Impressions of Final Fantasy XIII

Joshua Kennon — Wed, 10 Mar 2010 20:39:12 +0000

As promised, I took the afternoon to play Final Fantasy XIII with the new collector's edition player guide, which is hardbound and really well done. The game is shaping up nicely thus far. I'm excited to see what the future holds.

I’ve played Final Fantasy 13 for roughly five or six hours now and it’s starting to get good. The only concern I have is that it is feeling really linear. Part of the magic of the franchise is being able to take 20 hours and go do side quests, level up and get hidden summons, etc. I hope they haven’t taken that out because it took far too long to get this title on the market and after the utterly forgettable Final Fantasy XII, it would mean that Square-Enix is nothing compared to what it once was (I talked about this in the article on Mistwalker Studios).

Blue Dragon, for example, rocked my world. The story and plot get going deeper and deeper and you were pleasantly surprised in every sense of the word. I hope Final Fantasy XIII can capture that same plot depth. We’ll see …

Final Fantasy XIII Is Released Tomorrow

Joshua Kennon — Mon, 08 Mar 2010 19:54:42 +0000

Final Fantasy XIII is released tomorrow. I'll still update the blog (probably) but the business activity is halted for the week. Although, I know myself, I'll probably end up going into my investing office and playing on the television there because I had one put over the fireplace for CNBC but is more often used for taking a break in the middle of the afternoon.

When I tell you that the first stage of financial success is having control over your time, this is what I mean …

When I was a kid, the worst thing in the world was getting a video game for your birthday (ahem, Chrono Trigger), and then waking up the next morning early so you could play it before leaving for school. All throughout the day, it’s all you could think about because the characters would be calling to you … what happens next in the plot? You run home after school and play all day.

Tomorrow, Final Fantasy XIII is released. I’ve been playing the series since I was in fifth or sixth grade and Final Fantasy VI (then called III in the United States) was released and Ruby took me to the mall and bought it for my birthday. Nearly two decades later, I have a copy of Final Fantasy XIII for XBOX 360, along with a collector’s edition of the player’s guide in hardbound copy, set for delivery.

Now, I don’t have to go through that excruciating dread of going to school or the office when I’d rather be home playing the game. I’ve informed everyone that I am not to be disturbed for the week. Why? I’m going to sit in front of my beautiful high definition television at home, turn on the fireplace, and play the game undisturbed. As I progress in the game, I’ll still be collecting dividends, rents, royalties, and profits in real life because of the decisions I made years ago. I explained how terrifyingly similar my path to wealth was to the same one used by players making money in Fable 2.

I think the thing that probably makes or breaks any Final Fantasy series game, besides plot of course, is the battle system.

Aaron has informed me that he will be taking the week off to play the game, although he still plans on going to work in the mornings to get some things done that he wants finished.

This is a perfect example of everything I’ve been trying to teach my friends, family, and readers for years. Financial success is being able to do what you want, when you want, and still afford the things you desire. I get closer and closer each day to where I want to be, but I have had total control over my time my entire life – I’ve never had to work for anyone else because of my excessive habit of saving so much of my income.

Started Final Fantasy XI on XBOX 360

Joshua Kennon — Thu, 22 Oct 2009 17:16:48 +0000

Following several attempts to get into the game when it was first launched in 2004 and later, around 2006, I finally began seriously playing Final Fantasy XI about a week ago after beating Blue Dragon. I’m on the Alexander server and have been building my character as a Black Mage. So far, I’ve soloed on my own in the Windurst area and I’m about to hit Level 19. It’s time to get into some plot but I wanted my character to be strong enough to enjoy myself when playing. Aaron’s been playing, too, and we sometimes level up together.

I realize the game is getting older, but there are still 500,000 registered players and 2,000,000+ registered characters. It’s actually gotten me really excited about Final Fantasy XIV, which is also going to be an online, as well. It’s going to be a nice distraction when I need to take a 30 minute break from the company in the middle of the day.

How to Make Money in Fable 2 – Or, How I Made My Fable 2 Character a Millionaire in a Few Days Without Cheating

Joshua Kennon — Wed, 19 Aug 2009 08:01:31 +0000

It’s remarkable that the same concepts that allowed me to be effectively retired by my mid-twenties allows me to frequently become rich in video games. That’s the nature of compounding. It is a law, exactly like gravity.

This weekend, Ashly and Ian drove in from Columbus to visit – they are thinking about relocating to this area next March so that she can work with us on the businesses and he can work as a nuclear engineer at a nearby facility. Right now, she’s a risk mitigation analyst at a well-known bank, so her skills would be a useful addition to the staff.

Anyway, as we were out having Chipotle and Coldstone, we stopped by a nearby video game store and went in just to see if anything was new. I came across a game called Fable 2 and, having seen the preview of the original fable on the XBOX 360 Live service, it interested me. Long story short, I picked up about $100 worth of games and merchandise, figuring I’d get to play them when I had time. Given the fact we’ve quintupled the number of e-commerce sites under our control in the past six months, that seemed like a long, long time away, frankly.

Um. No. As Aaron et. al., made the Julia Child beef bourguignon recipe, Ashly suggested I start playing the game (I’d grown hesitant when I realized it was rated M, which I incorrectly assumed was used only for grotesque violence). None of us had any idea what we were getting into when we turned on the console.

The Premise of Fable 2
The premise of Fable 2 is simple. As in life, every choice you make influences the quality of your soul and the outcome of your journey. Your choices are pretty much like those that every man and woman has when they are born – be good by giving money to orphans, helping those in distress, donating clothes, charging below-market rent to those in poverty, and working to rid the world of evil, or you can be evil by murdering innocent people, having unprotected sex and catching STD’s, terrorizing cities, gambling, stealing, sacrificing people … you name it.

When I say there are practically no limits, I mean it, even in details that are absent in other games such as growing fat if you eat too much food or your character’s sex life (e.g., you can raise a family, go the church (in the game, “The Temple of Light”), and become known as a prude, or you can have homosexual orgies, get drunk, and vomit in the town square after a night of pub games during which you amassed large gambling debts). Before I continue: For those who think games like this are offense, that’s irrational and unjustified. We, as humans, have these same choices in life. It’s called free will. Why is it okay for us to have the God-given right to self-determination in the physical world, but demand punishment for software studios that do the same in virtual ones? It’s a mental malfunction to think like that.

Sometimes You Just Have to Accept Who You Are – And I’m a Capitalist
The first three days I played Fable 2, I did nothing but work in the game, earn money to buy real estate and businesses, and then for the rest of the time, didn’t need to exert any effort because I was able to live off the dividends generated from these assets. It mirrored the precise course of action I followed in my own life beginning with my decision to become an investor when I was ten years old.

Here was my plan for becoming a millionaire without cheating …

Secrets to Making Money in Fable 2

1. When you first begin the game, get a job as a blacksmith.
The blacksmith job is the most difficult way to make money in Fable 2 but when you start out, it is the most readily available. Work your way up to a 5 star Blacksmith until you’ve earned roughly $50,0000 to $60,000. If you’re any good, you can do this in a couple of hours at the most and even then, it shouldn’t be that difficult.

2. Buy a few cheap houses and then the Pants! store
By purchasing a couple of intelligently selected houses and the Pants! store just off the city square, you can earn a base rate of $450 per 5 minutes in real world time. If you do this before you go to bed, you can wake up the next day, go to work, and come home 24 hours later to find that your character has amassed roughly $129,600. As in life, by using your earnings to first buy cash generating assets, you can save decades of work later.

3. Use the earnings to buy the pub, blacksmith shop, and some more houses.
The pub and the blacksmith shop will boost your earning capacity substantially, doubling or tripling the amount of gold you make every 5 minutes of real world time. At this point, you can proceed with the game and use your excess cash to buy additional real estate and businesses as money becomes available. The next store on my list would be the furniture shop so you can buy furniture to improve your rental units, increasing the rent you earn.

4. Viola! By the third of fourth day of playing the game, money will never again be an issue.
By following this recipe for making money in Fable 2, you shouldn’t have to work another day in the game. You can avoid the misery of spending hours upon hours pounding out swords, cutting woods, or pouring drinks. It’s very much like real life. If you spend your teenage years, twenties, and thirties buying up cash generating assets, you don’t need to worry because there’s a constant stream of cash that comes into your life with very little additional effort on your part.

This is no different than me owning stocks in high dividend companies or private businesses such as our e-commerce sites. In the time it took to write this blog entry, my character on Fable 2 made roughly $42,623. As we speak (so to speak), my money is earning dividends and interest, my companies are generating sales throughout the world, and the assets the businesses owns are appreciating. It’s just not that hard.

Maybe I enjoy Fable 2 so much because, like my character, I had to basically start with nothing other than what God gave me in terms of intelligence. I was the first to graduate from college in my family, the first to really own any stocks or other investments, the first to write a book, the first to move away from home (as in, halfway across the continent), the first to … okay, you get the idea. As a result of my past, the idea of anyone starting from scratch and building a fortune resonates powerfully within me.

Mistwalker Studios Might Just Eclipse Square Enix

Joshua Kennon — Sat, 15 Aug 2009 06:16:20 +0000

Lost Odyssey by Mistwalker Studios

For a long time, I wanted to be a video game programmer. When I was still in elementary school, I saved up the $200 or so dollars for an entry-level version of Microsoft Visual Basic, went to trade shows to buy software on 5″+ floppy disks, and worked on creating my own version of the original Legend of Zelda in Microsoft Basic. At some point, however, my obsession with finance overcame everything and the idea of sitting in a skyscraper, reading stock reports, and compounding money for the sheer joy of building something eclipsed the video game dream. The reason was simple: I realized that if I achieved the empire on the financial side, I could someday just buy or establish a video game company. If I became a low-level code monkey, on the other hand, I couldn’t have the other. It was a case of having my cake and eating it, too. Perhaps I should have known my idea of fun was spending hours playing Duck Tales on the original NES, shuffling Uncle Scrooge around the world to acquire treasure.

Looking back, Squaresoft, and later Square Enix after the merger, released a series of games including Final Fantasy, Chrono Trigger, and Kingdom Hearts that eclipses nearly ever other development house in terms of pure quality and fan obsession. The only notable exception would be Nintendo, which owns the original hall-of-fame franchise covering Mario, Luigi, Bowser, Samus Aran of Metroid fame, Link and Zelda from The Legend of Zelda, and Donkey Kong. The problem with Square Enix is that it seems like the last unbelievable game that was released under its banner was Final Fantasy X. That was nearly ten years ago. I was in college. That should put it in perspective.

Instead, Hironobu Sakaguchi, the original creator of the Final Fantasy series launched a new studio called Mistwalker with the backing of Microsoft. He got the veritable genius composer Nobuo Uematsu to write the soundtrack for the studio’s two releases, Lost Odyssey and Blue Dragon. I’ve been playing my way through both games over the past six months and there is no question that the quality of Mistwalker’s work far exceeds that of Square Enix, with the exception of the Kingdom Hearts series. In fact, it feels like Mistwalker is more Square Enix than Square Enix is.

Blue Dragon by Mistwalker is one of the best games that has ever been made.

What scares me is that my family and I used to buy Squaresoft / Square Enix games on the power of the brand name alone. We didn’t even need to know what the game was about or the plot, we simply knew if we bought it, we wouldn’t be disappointed. That isn’t the case any longer. The franchise value of the brand has gone down (I wrote about this concept in Profiting from Franchise Value at my Investing for Beginners site at About.com). Instead of releasing one or two unbelievable games that will change the genre, it seems like they are attempting to pump out as many derivative-based titles as possible. I can’t even count the number of releases that have been hyped under the Final Fantasy name for systems such as the DS or PSP. Wouldn’t it be better to create a handful of classics than a long stream of mediocre non-events?

The great thing about capitalism, though, is that someone, somewhere, will create a work of pure art and the market will reward them for it. I truly hope Square Enix doesn’t fall into mediocrity. But if I were forced to bet on it, my money would be on Mistwalker Studios right now. I really do wish the firm were publicly traded so I could get a look inside the operations.

Video Game Sales Fall for 5th Straight Month and Wall Street Blames … the Recession?

Joshua Kennon — Fri, 14 Aug 2009 09:15:35 +0000

It's not about the economy ... it's all about the games.

According to an AP Article, sales of video games have plunged 29% year-over-year and Wall Street is concerned that it is proof the video game market isn’t as recession-resistant as everyone believed. Seriously. That’s the crap that’s coming out of these news rooms. News flash: Look at the game release schedules. Last year saw a host of relaunches of various Final Fantasy titles, new version of the Civilization franchise, another installment of Harvest Moon, and the updated Soul Calibur. Nothing really exciting has been released for six months. The real action comes in the back half of the year.

My household spends a lot of money on video games. We have virtually every system imaginable and we are big RPG and action players. Right now, I’m working my way through Blue Dragon and Aaron is in the middle of Lost Odyssey, both released by the Mistwalker company setup by the genius behind the Final Fantasy series. We aren’t spending any money on games now. That will change when Aion – The Tower of Eternity is released.

You have the new Madden coming out on August 14th, Wolfenstein on August 18th, Halo 3 ODST on September 22nd, and Assassin’s Creed II on October 17th, just to name a few. The video game industry does not follow the same pattern as furniture sales or theme park admissions. It is all about the games. If a new Final Fantasy was released tomorrow, I don’t care if I hadn’t paid my electric bill and needed to come up with money to eat dinner, I’d find a way to get my hand on the title.

Aion Tower of Eternity

It’s only 1/10th as Expensive as the Movie on a Per Unit of Time Basis
Why? Hour for hour, video games represent the single greatest value for your money. A good RPG, for instance, will require you to play for at least 100 hours. I typically level my characters up, maxing all of their stats out so I can dominate. If you pay $50 for a game, that’s $0.50 per hour of entertainment. Compare that to a 2 hour movie where you pay $10 for admission, costing $5.00, or 1,000% more per unit of time. That assumes you don’t get popcorn, a Coke, and some Reese’s peanut butter cups which are, of course, absolutely required.

People who don’t understand a market should not be allowed to write about it. It is almost as bad as Tech Ticker on Yahoo Finance, which is, in my personal opinion, the single worst source of financial or investing advice that has ever been sponsored by a major media company. It takes all of my resolve not to hurl things at the screen when those idiots open their mouth. It’s a fairly good bet that we are doing almost exactly the opposite of what they say at any given time on the webcast. The civilization would be much improved if the plug was pulled on that monstrosity they call financial journalism. Again, just my personal opinion.