Demis and I recently went to the Game Developer's Conference in San Jose, where Demis gave a talk entitled Level of Detail AI, which included our first ever public demonstration of Republic: The Revolution. We assumed that it would be in one of the small rooms in the main conference centre in front of a couple of dozen people. Imagine our surprise to find that it was in fact in the San Jose Civic auditorium, a 5000 seater hall over the road. I've never seen Demis nervous before but unsurprisingly I think even he felt some trepidation at the thought of talking to upwards of a thousand people.

After the talk Demis took part in a panel discussion on one of those perennial conference favourites pitching the PC versus consoles and asking whether the former is dead as a games platform. It was a great honour to be included as it featured some of the industry's leading lights - Trip Hawkins, Sid Shelley, Phil Harrison and Ed Fries among others. It's a well-trodden (and slightly misleading) topic, but the debate was lively.

Overall my thoughts were that GDC as a show is changing. Whereas before it was very much an academic gathering of developers and their ideas, it has now been sucked into the commercial calendar, a place where developers hawk latest their games about and compete for position within an increasingly star-struck industry. It's a beauty contest - code-wise, at least. The overall vibe was conspicuously bad this year, compared to the triumphalism of the last few years. The industry's going through one its cyclical blips and a lot of developers are going out of business. The show began with the news that EA had canned Ultima Online and sacked over a hundred people and this cast a long shadow over proceedings.

I've also been to several other conferences over the few months focusing on the excitement over games for phones. It's hard to know what's real and what isn't right now; the phone industry is doing its best to woo game developers but the consistent message from both network providers and phone manufacturers is that there's no money to fund this. Inevitably, discussions founder on this. I recently bumped into my old boss at Wireplay, Kevin Piper, who's heading up 3G at BT and he had some shrewd insights into this market. Right now the simple truth for developers is that making mass market, community based games with fundamentally limited and unreliable technology is very hard. That's not to say impossible though and there are already some interesting results. We've done some work with a small Finnish company called G-Cluster and I recently went to see them in Finland. I was amazed at the coolness of some the stuff they've achieved already, particularly by the noisy game of multiplayer Quake we had, played on iPacs whilst eating reindeer in a Laplander restaurant. I think we might have disturbed the other diners.

Work continues on our game Republic: The Revolution and the hard graft and long hours are now showing tangible rewards. The country's capital Berezina looks ever more lifelike every time I see it, as the programmers put more detail into the simulation. Small changes make visible differences; the people now have a number of different walking animations, some strolling, some walking briskly or some just dawdling. People smoke cigarettes whilst peering languidly at the sunset through designer sunglasses, as others pop into shops and come out again weighed down with shopping. Despite the number of times I've seen this I'm still mesmerised by the illusion of sentience. The skyline is particularly beautiful and I can imagine that some people will be content to simply watch the passage time as people go about their daily routines untroubled by the Machiavellian schemes of players.

Demis, the Lead Designer and Martin, the Senior AI Programmer have been engaged in some interesting discussions about what actually makes people tick. What do people care about? What makes them support Fascist X or Trade Unionist Y? Getting this right underpins the success the game. After a few lively exchanges they decided that everyone in the game would have views on the following issues: government, religion, political philosophy, morality, economics, violence, ethnic tolerance and international relations. Players attempt to exploit and manipulate these views to gain one of the three different resources - Fear, Money and Influence - produced by every prole. These can then be used to power bigger, better actions, all the way up to coup d'etats, mafia hits and rigged elections.

One of the joys of simulation games is the unpredictability and emergent gameplay and we've started to see some very odd things happening. The other day we set off an action that orders Viktor, a Priest, to give a soapbox speech in the town square. As he started ranting, one of the crowd broke ranks and tried to attack him. We assumed it was a bug as we hadn't programmed this; we later found it was because the prole was violently opposed to homelessness, the theme of Viktor's particular speech. This was both exciting and a little unsettling - It felt mildly like being in that Mary Shelley novel.

Time has finally come to leave our lovely office and it barely seems credible that we moved in two years ago. There are now forty-three of us and we've run out room. The Board room went yesterday as we attempt to squeeze yet another new team member in. We briefly considered sacrificing the games room but decided there'd be a popular revolution if we did (apposite, but inconvenient). Life imitating art? Not if I can help it...