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National Security Reform Program Full
Spectrum Welfare: How Taxpayers Paid for One of the Nation's Most
Profitable Video Games The video game market is booming, and now it's receiving investment capital from an unlikely source: The U.S. Army (Army). The Army recently paid more than $5 million to create a video game to teach troops urban combat. The final result was a best-selling video game that has become a cash cow for the game's developers but left the Army with a sub-par training tool. Full Spectrum Warrior was born out of the Army's desire to provide cost-effective immersive training aids to its soldiers. In 1999, the University of Southern California's Institute for Creative Technologies (ICT) was created explicitly for this purpose. Since its inception, ICT has called on the experience of USC faculty and Hollywood talent to build computer simulations of urban combat scenarios to help troops improve leadership and decision-making skills. A Cash Cow
for Hollywood Video Game Developers The Army's search for a game developer capable of creating cutting-edge training simulations led them to California, where Simulation, Training and Instrumentation Command (STRICOM) officials hoped to draw on the state's high-tech prowess in the game-making industry, as well as the creative talents of Hollywood. According to Cornelius Sullivan, Vice Provost for Research at USC, the Army conducted a thorough search before settling on ICT.1 The head of ICT, Jim Korris, was the chief author of a proposal for a series of increasingly sophisticated training aids that could help prepare American soldiers for urban combat, and the Army awarded ICT $45 million to fund various projects starting in 1999 and continuing through 2004. As part of that contract, the Army paid Sony Picture Imageworks (Sony), Pandemic Studios, and their partners at ICT $5.4 million to develop an urban combat video game for Microsoft's Xbox gaming system. The game, which was eventually titled Full Spectrum Warrior, received increased attention from the military after 9/11 and the ensuing war in Afghanistan. Full Spectrum is an Army term that refers to the full spectrum of military operations, from construction to support to active combat. It includes those duties performed in Kosovo while conducting a peacekeeping mission as well as those utilized in clearing Fallujah of enemy combatants. An example of the diverse operations depicted in the game is a mission entitled "Election Day," where soldiers must maintain security at polling stations in the face of locals who shout "no voting," and call U.S. troops "American pigs," and "capitalist pigs." To make the game a reality, ICT chose Future Combat Systems, LLC, a partnership of Sony Pictures Imageworks and Pandemic Studios. Sony brought its experience in creating artful digital imagery and animation to the project, while Pandemic drew on its own extensive experience in the gaming industry that included the creation of real-time strategy games like Dark Reign 2 and Battlezone II.2 The subcontract between the University of Southern California and Future Combat Systems stated that the Army, through ICT, would pay Future Combat Systems $4.44 million for the game's development, and USC would put $450,000 worth of its own resources into the project. Additionally, Future Combat Systems partners Pandemic and Sony agreed to expend $2.5 million of their own money to bring the game to fruition.3 Later, after the Army received its version of the simulation training aid, FCS approached game producer THQ, Inc. to prepare the game for commercial sale. THQ added cinematics and other flashy features, promoted the game and released it on the Xbox platform. Full Spectrum Warrior, the commercial game born of this effort, has grossed roughly $50 million from the sale of approximately one million units which retail for $50 a piece.4 Sony will release a Play Station 2 version of Full Spectrum Warrior in the spring of this year. A Massive
Investment with Limited Return to the Army, Taxpayers Full Spectrum Warrior is, by all accounts, an excellent commercial video game. It earned the E3 Games Critic Award and received first place, tied with The Sims 2, for Best Strategy/Simulation category at the 1UP "Best of" Awards Show. The game is replete with absorbing environments that let you hear the pound of your squad's footsteps as they run for cover, the buzz of flies hovering over dead enemy combatants, and the light rattle of gun shots emanating from distant alleyways. However, according to Sony employees and documents obtained by Taxpayers for Common Sense, the developers' desire to make the game more marketable to commercial customers was at the expense of functionality for the Army. The development team's focus on impressive graphics compromised important features required by the Army. The game's eye-popping graphics hog most of the Xbox's processing power, leaving less available for the creation of a realistic setting. An Army official declared the game to be unsatisfactory after looking at it midway through the project, prompting an ICT representative to write "we have a huge problem on our hands."6 Despite these early concerns by Army officials, there are no indications that anything was done to address them. Andrew Paquette, an art director on the project who has since been fired by Sony, argues that the game's environments are poor reproductions of those that soldiers might actually face in the Middle East. Glass doors on shops and businesses are all opaque and windows are all either opaque or boarded up, regardless of location. Soldiers are unable to enter most buildings to root out enemy combatants or take cover from incoming fire. In the buildings one can enter, rooms are largely bare and not subdivided as one might expect, and there are no landings between stories, as is common in Middle Eastern architecture. Troops cannot climb higher than the second story, so the game cannot simulate situations where enemies are attacking from both above and below. According to Fred Lewis, retired Rear Admiral of the U.S. Navy and President of the National Training Systems Association (NTSA), the two most crucial elements of an effective training aid are immersion and believability. He said that a virtual training aid that depicts opaque doors, flights of stairs with no landings between floors and limited access to many buildings represents a training tool of limited value.7 Those in charge of the game's development have made similar comments. Lieutenant Colonel James Riley, chief of tactics at the Infantry School at Fort Benning, Georgia, was one of the project's primary overseers, responsible for the game's development. Being clear to emphasize that the training aid was not a complete failure, Riley noted that the game is "incredibly shallow," and that it has a "very limited set of situational challenges to put the guys through." Riley described the game's limitations as "tradeoffs," arguing that what was missing in the project was sufficient funding and cooperation among developers, instructors and end students.8 Moving the
Goalposts Colonel Riley also argues that Full Spectrum Warrior was "designed as an experiment to see if simulation technology can make a better soldier. We had the best of intentions." Previously, he says, the Army used white boards and Power Point presentations, and video game simulation technology is, in his words, "a more effective, better, exciting way to train leaders." Riley argues that the product "achieved the objective of the study," even if it doesn't continue to meet the needs of the Army.10 However, according to Sony employees and Army documents, the Army had anticipated that Full Spectrum Warrior would be employed to train troops, not simply to evaluate the feasibility of simulation based training. Even Colonel Riley indicated that the Army had hoped that Full Spectrum Warrior could be used as a training aid for the squad leader. As Riley put it, the Army wanted a "robust tool to be able to train." The Army "saw tremendous potential" in this technology, and "thought the residual benefit [of the game's development] would have been a useful [training] tool." While Full Spectrum Warrior may have succeeded as a demonstration of technology, it clearly failed as a functional training tool. Riley concludes: "What we wanted was a home run, and what we got was a single - and probably a broken-bat single." Documents obtained by Taxpayers for Common Sense further support the idea that Full Spectrum Warrior was intended to be used for training purposes. The original research proposal, written by Jim Korris and others, stated that Full Spectrum Warrior would provide "realistic, authentic training." Meanwhile, Josh Resnick, President of Pandemic Studios, in an interview in December 2001, said, "In the very near future, I see recruits being issued fatigues and a copy of our game."11 Currently, only the Infantry School at Fort Benning is using Full Spectrum Warrior. The game is used to introduce trainees to concepts such as how a fire team and an infantry squad work in an urban combat scenario. Colonel Riley does not foresee any future use for either Full Spectrum Warrior or any newer versions of the game.12 History of
Video Simulated Training In the late 1990s, the United State military started to invest heavily in video training games because as the video game industry began to flourish, the military realized that many of their simulators were inferior to video games that could be bought at Wal-Mart. Reports at the time found that most officers had not commanded troops in battle, which prompted an intense effort to use new computer technologies to create training aids. Another important factor in this change of focus was the fact that the average age of the 500,000 troops in the Army is 20. The Army decided that most of their troops would rather play a video game than read a book on Army doctrine. Some of these training aids have been highly effective. For example, Full Spectrum Command (FSC), another ICT product designed to help officers direct an entire company, was praised by Colonel Riley.15 Similarly, Richard Lindheim, Executive Director of the ICT, was quoted in a recent Military and Aerospace Electronics article stating that soldiers have backed ICT game-based technology. Troops argue that this kind of technology has "truly helped make them better and more responsible soldiers," Lindheim said.16 Even foreign militaries have begun to recognize the potential of simulation training aids and, specifically, ICT's work. The government of Singapore recently ordered a tailored version of FSC. Training simulations are now big business: the Pentagon spends more than $4 billion a year on simulation, including war games, software, video games, and equipment.17 Private industry is well aware of the shift in training tactics endorsed by the Pentagon, and has responded with an increasing number of products to meet the military's needs. More than ten companies specializing in virtual training aids were recently invited to ply their wares to congressional staffers in a bid to garner increased congressional funding. While the staffers examined the life-like graphics and had the opportunity to fire a replica M-16 into a projected image of a street, company representatives talked eagerly about their products, displaying barely guarded hopes that they would be able to benefit from the Department of Defense's new enthusiasm for products like theirs. A Catastrophic
Contract But, the government's contract with ICT for the development of Full Spectrum Warrior had limited oversight and did not guarantee taxpayers the best possible return on their investment. Through a fixed-price contract, the Army shouldered at least 60 percent of the game's development costs, even though FCS stood to reap enormous profits from the game. According to Paquette, private financial backers of similar products are normally entitled to significant royalties in addition to being fully reimbursed for their research and development outlays. ICT itself will receive 5 percent of the game's net profits for their part in the game's development and, according to documents obtained by Taxpayers for Common Sense, ICT's coordinating efforts earned it roughly $1 million from the Army. Yet, the U.S. government receives neither reimbursement nor royalties for its $4.4 million investment. Although Future Combat Systems partners Pandemic and Sony agreed to expend $2.5 million of their own money to bring the game to fruition,18 internal company documents and budget sheets did not describe these contributions in any detail, and Taxpayers for Common Sense's inquiries into the matter were ignored by Pandemic Studios. In addition to footing the bill for development of Full Spectrum Warrior, the Army has to pay an Xbox licensing fee to Microsoft for every copy of the game that is delivered to them. It is common practice for the manufacturers of gaming platforms to charge game developers such fees as a way to recoup losses they incur on selling the hardware at low or even negative margins. Finally, the Army has failed to take advantage of Pandemic's use of the Army's name to promote Full Spectrum Warrior. In other cases, if a licensed symbol figured prominently in a video game, the proprietor of the symbol would receive a roughly 12 percent royalty, with the mention of the Army itself in an advertisement being worth, perhaps, six percent.19 Despite Failures,
ICT Still Prospers Yet, on November 20, 2004, the Army awarded ICT a new five-year, $100-million contract. The latest round of funding is intended to help ICT further its research into similar computer-based training instruments, such as artificial intelligence, immersive audio, and computer graphics that will enhance the effectiveness of the Army's training regimen. The contract will also enable the Institute to launch ICT Works, a new commercial applications division.21 Moreover, Dr. Wilkinson stated that interest in ICT's work stretches beyond the Department of Defense, to various other branches of government.22 According to Sullivan, neither the original five-year, $45 million contract nor the recent $100 million deal, which is the largest research grant ever received by USC, were awarded through a competitive bidding process.23 Rather, ICT was selected by the Army from a short list of research institutions capable of bringing together the computer simulation know-how and Hollywood expertise needed to create a realistic and forward-thinking training aid.24 ICT has also received support from a number of legislators on Capitol Hill looking to support their districts. Oklahoma Senators Don Nickles and James Inhofe placed a $5 million earmark for ICT in the fiscal year 2005 Defense Appropriations bill for simulation training at Fort Sill. The money will fund the Joint Fires and Effects Training System (JFETS), which has garnered praise from soldiers and military brass alike. The JFETS program is touted by officials at the facility as a program that could make Fort Sill "BRAC-proof," referring to the upcoming round of base closures which aims to shut down unneeded military installations that cost the government roughly $7 billion every year. Conclusion The Army should reevaluate its investment strategy on products that have potential commercial profitability. Products that are likely to be highly profitable in the private sector should require less investment by the government, relying instead on future profits to motivate industry contractors. The federal government could also contractually request a royalty on commercial sales in order to recoup some of their investment. Taxpayers for Common Sense is concerned that ICT's newly awarded $100 million contract could be partially squandered on other "broken-bat single" initiatives if there isn't a significant increase in federal oversight. The Department of Defense Office of the Inspector General should conduct an independent investigation of ICT's financial management, problems with past ICT contracts, and Army oversight of the contracts. The Defense Department should take further precautions to ensure that it is receiving a high quality product not only from its primary contractors, but also from subcontractors who are paid with taxpayer money.
1.
Sullivan, Ccornelius. Telephone Interview. January 18, 2005 |