International Research Recruiting: Making Easy Money

On Monday, I wrote about the unemployment debit-card scandal, based on articles by Janelle Ross and Kate Berry. But Berry’s article has been down since Tuesday, replaced by a placeholder saying only that “an updated version of this story will appear soon”. And the state of California, in particular, was extremely unhappy with Berry’s coverage. So today I had a long conversation with the Californian department of employment development, trying to understand exactly what’s going on there.

The conversation was a bit frustrating, because the questions I was asking weren’t fully aligned with the answers they wanted to give. The Californians were very keen on telling me how much better their debit cards are than the old paper-check system — something I completely agree with. And they’re also very proud of the fact that it’s possible to use their debit cards without incurring any fees. That’s great, too.

Where we part ways is the issue of direct debit. California has a lot of unbanked people – 1.2 million, by one count. Many of those people are eligible for unemployment and disability benefits, and it’s important to do well by them. For those people, the debit card is great. On the other hand, there are 37 million people in California as a whole, and seems a little bit silly, to me, to design the entire unemployment system around the unbanked, when the unbanked are massively outnumbered by people with bank accounts. After all, the whole point of unemployment insurance is that you get it when you’re laid off from your paid job. And if you have a paid job, you’re very likely to have a bank account.

It’s my contention that if you have a bank account, then it’s a no-brainer that you should have your unemployment or disability benefits paid directly into that account by direct debit. But none of the Californians were inclined to agree with me on that front. “Our focus on everything we put out is to tell our claimants how to avoid fees,” said Sabrina Reed, project director for the electronic benefits project, talking about things like the nine-minute YouTube video explaining how to use the debit card. The direct-deposit part of the video starts at the 6:40 mark, where it presents direct debit as “another option”; we then cut to a woman holding a newborn who says that “with a new baby it was a good option for us to do direct deposit, because it’s hard to go to the bank”.

At no point does the state of California ever come out and say that direct deposit is a good option; it’s just an option, offered to those who would like to take advantage of it. “Many people like the convenience of using the card,” Reed told me. “People who are savvy enough to use direct deposit sign up for direct deposit.” When I asked whether, in the interests of education, it might be a good idea to encourage Californians to sign up for direct deposit, she replied by saying that “you’re making a presumption we’re not making”.

Let me rewind here for a second. In my original post, I quoted Berry’s article which in turn quoted representatives from both California and BofA, talking about the fact that California does not offer direct deposit. The truth is that direct deposit is an option — but you always have to get a debit card, and then if you want direct deposit, you need to work that out not with California but rather with BofA. And BofA has no incentive to make the direct deposit option easy or convenient or attractive — because BofA makes all of its money from the retained balance on the debit cards, and from the interchange fees it gets when those debit cards are used. If you set up direct deposit so that there’s no balance on the debit card and you never use the card to buy anything, then BofA won’t make any money off you.

Reed understands that BofA will never push the direct-deposit option — but she also sees no reason for California to push it, either. In fact, she says, people getting Californian unemployment benefits “have a better debit card process than you and I have with our banks”. And she came up with a clever example of why someone with a bank account might not want to transfer all the money over using direct deposit: if that person had a third-party ATM on their street corner, then it might be cheaper to withdraw money from that ATM using the California debit card, rather than using their bank’s ATM card. “It’s a personal choice for every individual,” said Reed. “While direct deposit may be convenient for one person, it may not be for another.”

Now it’s easy to be a bit suspicious of California’s motives here. The state has entered into a revenue-sharing plan with Bank of America, under which BofA remits back to California some percentage of the total unspent balance on the debit cards each period. The fewer people using direct debit, the more money Bank of America makes — and the more money California makes, too. The money isn’t huge — it’s about $10 million a year. But if direct deposit was easier, or was encouraged more, then California might have to start paying BofA to run this scheme, rather than getting a multi-million-dollar rebate every year. (Reed is a huge fan of high interchange fees, and hates the Durbin amendment, even though benefits debit cards were exempted from it: it’s “ultimately going to hurt the taxpayer”, she says.)

More generally, if you have a bank account, of course you should sign up for the direct-deposit option. The whole point of having a bank account is that it’s the single place through which all your transactions flow, and people on unemployment or disability benefits generally get most of their income from those schemes. The debit card can’t be refilled by anybody other than the state of California — in no sense is it an alternative to a bank account. The money on the card should be used to avoid overdraft fees; it should not simply sit unused on the card.

Reed gave me a long explanation of why it makes sense to California to outsource the direct-deposit function to BofA, and I’m pretty much convinced on that front. I do believe it’s cheaper and more efficient for California to outsource these things than to try to do them itself. But I also believe that if California wants to do right by its claimants, it should ask them to provide their bank account details when they sign up for benefits, and tell BofA to sign them up for direct deposit as the default option.

By all means give people the option to opt out, and to keep their benefits on a prepaid debit card if they’d rather do that or if they don’t have a bank account. But the opt-in system that California has setup seems designed to minimize the number of people who will use direct debit. As does the distinct lack of any documentation from California saying that direct deposit is a really good idea. The money arrives automatically in your bank account, a good two or three days earlier than it would in the bad old days of paper checks. You don’t need to keep close track of how much money may or may not be on your debit card at any given time. And you can keep all your money in one place, give it to someone else by writing a check, and enjoy all the other conveniences of having a bank account. Prepaid debit cards are all well and good, but bank accounts are always better.

In fact, if California really wanted to do right by its claimants, it would force BofA to give them a bare-bones, no-fee bank account rather than just a debit card. The bank account would come with a debit card, of course. But you could add money to it whenever you wanted, without incurring any fees — something which apparently is illegal with benefits cards. California has more than 2 million claimants receiving some $100 million per day: that gives the state a lot of negotiating power to get what it wants. And it’s a little sad, I think, that what California turned out to want was a way of maximizing interchange fees for BofA and for itself.

Editor’s note: This review contains some story spoilers.

Call of Duty Modern Warfare 3 delivers what it promises for gamers. It’s an epic first-person shooter combat game with all of the drama and action of a Hollywood war movie. Because the developers solidly executed their mission for the third time running, this game will likely be one of the biggest-selling titles of the year. I’ve played it through and it didn’t disappoint me. To me, it’s one of the contenders alongside Uncharted 3: Drake’s Deception for the best game of the year.

Activision Blizzard has mastered the very difficult job of giving Call of Duty fans a new blockbuster game every November, with plenty of multiplayer play to keep them busy for much of the year. Modern Warfare is the crown jewel property within the Call of Duty series; it focuses on first-person combat in the modern era. In the first-person shooter genre, this game is as big as it gets. At the current rate, Call of Duty games are generating more than $1 billion in revenues for parent company Activision Blizzard. Analysts expect this title to sell more than 20 million units, beating last year’s record-setting Call of Duty Black Ops.

The grudge match with Battlefield 3

Modern Warfare 3 is going head-to-head this fall against Electronic Arts’ Battlefield 3. While Battlefield 3 sold 5 million units in its first week, the analysts expect that Modern Warfare 3 could outsell it by 2 to 1.

I played Battlefield 3 all the way through and I did so while heavily medicated. Indeed, what started as the flu turned into walking pneumonia for me. I wasn’t supposed to be doing anything but rest. But there was no way I wasn’t going to play both Battlefield 3 and Modern Warfare 3 all the way through as soon as possible. That’s what gamers do as a kind of self-sacrifice for the greater cause.

I didn’t think the overall Battlefield 3 experience was quite as bad as our reviewer, Sebastian Haley, described. He definitely nailed the first-day server issues as inexcusable. And Sebastian was right on the money about what was weak about Battlefield 3: weak characters, a so-so story, and poor storytelling when it comes to drama and tension. Sebastian is tough, but he’s got keen insights.

I had fun playing infantry, tank, and air battles in Battlefield 3 because they weren’t the same as Call of Duty. I can see EA’s path of improvement with its first-person shooters. But in the end, I had to favor Modern Warfare 3. Battlefield 3 may be more realistic, but it just isn’t nearly as fun to play as Modern Warfare 3.

That latter statement is my opinion; I fully expect a lot of fans will see it the other way around. I’m actually glad that these two games have come out so close to each other, as they will provide sharp comparisons and contrasts for gamers on the different roads that developers can take in making these kinds of games. When one game’s servers are down, gamers will have the option of jumping to the other one. Competition is a good thing, and I think both of these games are better for it. I suspect a lot of people will be like me and play both games all the way through.

The single-player campaign for Modern Warfare 3 wraps up a story that began in 2007 with the first in the Modern Warfare series, Call of Duty Modern Warfare. That game took the series out of World War II and brought it to a whole new level of serious single-player and multiplayer modern-day combat. That move completed the game’s shift to “epic realism,” which Activision chief Eric Hirshberg says is striking a balance between real world authenticity “where this could be happening” with the unbelievable, Hollywood style epic moments that seem like they’re out of the movies.

Hirshberg also says that Call of Duty games are unique in delivering an “ultimate adrenaline rush.” You play it with white-knuckles and it shakes you up. The games are also easy to learn and hard to master. And Call of Duty games are primed to run at a first-person speed, or 60 frames per second, Hirshberg said. For the most part, he’s right. The game stands apart based on those claims.

Battlefield 3′s console versions ran at the slower speed of 30 frames per second, and the difference was noticeable. While Call of Duty’s physical effects, such as destructible environments, aren’t as good as Battlefield 3′s, the graphics are really quite good and playable. Only Battlefield 3′s graphical quality on the PC stands far above Modern Warfare 3′s. Still, I usually keep an eye out for graphics flaws, and I didn’t see anything horribly out of place in Modern Warfare 3.

Controversy comes again

It seems like it is pretty hard to make a game about modern warfare without being controversial. New Yorkers will certainly cringe at seeing their skyline in ruins in the game, and Parisians will bemoan the flames on the Eiffel Tower. Londoners in particular will be quite upset with this game.

The new game has controversial elements in it, just as the prior games had. In this title, you can choose whether to see them or not, just as you could (after a patch was installed) on Call of Duty Modern Warfare 2. Two years ago, Modern Warfare 2 drew widespread criticism because the user could participate in a civilian massacre at a Russian airport. This time, the disturbing scene isn’t so interactive and it is much shorter. In it, you see a child and her tourist parents killed after a truck stops nearby, explodes, and spreads poison gas throughout London. Movies have scenes like this all of the time to drive the emotion of war and violence home. But Activision Blizzard catch hell for including the scene, particularly from the mass media that doesn’t play games. For hardcore gamers, this scene fits with the disturbing portrait of war in the age of terrorism that the game series paints so well.

This year’s game is the third installment in the Modern Warfare series with the Call of Duty Brand. The first, Call of Duty 4 Modern Warfare, debuted in 2007 with an unrelenting focus on the horrors and action of modern combat. The second title debuted in 2009 with Call of Duty Modern Warfare 2, which at the time became the best-selling game of all time. That title was succeeded by Call of Duty Black Ops (set in the 1960s onward), which sold more than 20 million units and also became the biggest seller of all time. Analysts are predicting that Modern Warfare 3 will be the biggest title yet.

Thankfully, the gutting of Infinity Ward with the departure of its founders (in an ongoing dispute with the parent company) didn’t hurt this game. Infighting over royalties tore the team apart and nearly pushed the game off schedule, but Activision Blizzard pulled in the reinforcements, enlisting developers from Infinity Ward (more than half the staff stayed to work on it), Sledgehammer Games, Treyarch, Beachhhead Studios (which worked on the Call of Duty Elite social network) and Raven Software. With more than 500 developers to tap, the team finished the title on time for today’s launch. By using multiple studios and staggering their work across multiple years, Activision Blizzard can feed rabid fans a new major game every year, without sacrificing quality. Activision Blizzard may well have put off some future projects, but it managed to finish Modern Warfare 3 — without major glitches.

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