Thanks for the advice, Johnny.
All playtesters were given what I call the "American Idol" speech (all except one group who I wasn't there for, but was a group of brutally-honest fanboys anyway) in which I point out the poor saps who go on American Idol and get torn to shreds and how odd it is that this person didn't have a friend or family member step in to stop them from humiliating him/herself on national TV. We explained that they (the playtesters) were the equivalent of that friend who could save us from bad reviews and whatnot.
We tested by turning the game on and going to either sit down to take notes or sit in the corner and observe. We were doing this in the shared-space office conference room that we have so we didn't have many options when it came to how to perform the playtests. But we basically put the controllers in their hands and said "We can't answer your questions but shout them out anyway." and boy, did they ever.
We did the best we could to subtract ourselves from the equation and most of the playtesters took that to heart by swearing like sailors as if they were truly just alone with their friends. We got a great deal of valuable information from just observing the playtesters or noting their complaints. We added the cooldown to the repel beam based on the fact that one playtester figured out he could button mash and successfully defend his territory (we had talked about adding it already, but this cemented the fact that it would be a necessity). The team menu saw a good deal of enhancement based upon how confused people became when they tried to put more than 2 players into a quarter territory: we made a red X appear over the territory just to make it clearer and changed the tooltip to notify the players that there was a team with too many players in it so the game couldn't begin.
The one thing we didn't do was have extended playtests over a span of a few days, and that was largely because these people were here on a volunteer basis and were getting absolutely nothing in compensation for this service (except some pizza and soda we bought for some groups). In hindsight, we should've have groups come back in repeatedly, but this would be asking people to volunteer more of their time than most would probably want to. I'd love to have game journalists test our games in the future and maybe tradeshows will allow us to do just that (I don't see many journalists coming up to New Hampshire just to test a WiiWare game, heh).
For what it's worth, I think the game is fun, as did the majority of the playtesters and people we showed it to, and we've seen some reviews from other sites that gave it 7s and an 8. The only thing I can conclude is that it clicks with some people and they enjoy it while others don't, and all things considered, it's not surprising. We didn't expect for the game to appeal to everyone.
As far as I'm concerned, making a first game that clicks with anyone at ALL is a home run.
