Computer Game Publishing (an overview)

Computer game software publishers are the “television networks” of the computer & video game industry. They commission and pay for the development of a game that is created by a developer, in much the same way that a television channel would commission a television production company to create a TV program. The publisher is instrumental in deciding which products will reach the market, on which formats and at what time of the year. (This control is mainly by way of the fact that they have the finances to fund the majority of projects). Most will create an ongoing publishing plan, which lists the product genres and formats the publisher will seek to bring to market. However, due to the fluid nature of the industry, this plan usually undergoes constant appraisal and modification (a polite way of saying that product delays are rife forcing publishers to change their plans).

In addition to commissioning titles the publishers will also handle the PR/Marketing of the title, the production and also arrange distribution to ensure that the games get onto the shelves. PR and marketing requires them to arrange previews, reviews, adverts, demos and other assorted promotional activities. Production covers the creation and manufacture of the physical components (box, CD/DVD, manual etc.) while distribution requires that they negotiate deals throughout the country/world to ensure that their games get onto the store shelves.

A publisher may work with independent developers, part/wholly owned developers or may even source products from other publishers to fulfil their publishing plans. Funding developers to create games incurs the biggest risk but provides the greatest potential reward. Licensing products (usually ones that have been published in other territories) from other publishers provides for reduced risk but lower returns.

Product types – From a publisher’s point of view there are three main types of product; licensed, conversion and original.

A licensed
product is a game based on an intellectual property, which the publisher owns or has licensed the rights to – this is often a major movie, a cartoon (or other) character, a toy, book, TV show or other similar property. Usually the publisher will seek out a developer and commission them to produce a game based on the licensed property, although this is not always the case. Some developers will acquire a license in order to provide an incentive to a publisher to sign their game and in some unusual conditions developers and publishers can work together to target a license. Westwood Studios (at that time owned by Virgin Interactive Entertainment) identified Blade Runner as a license they would most like to develop and worked with Virgin Interactive to secure the license.

The main motivation for publishing licensed games is the recognition factor. A blockbuster movie or well known character license will be easily identified by customers, which will result in increased sales. In addition the game (if it is published within a reasonable time frame) will benefit from the advertising and cross promotion associated with the film etc.

The downside for licensed games is the cost of acquiring the license, usually a large upfront fee and an ongoing royalty. There is also the risk due to the fact that the license fee often has to be paid well before the title has become a big hit. Timely release of the product also creates pressure on the developer to deliver a game in a reduced time span. This can result in the game being rushed out and of generally poor quality. The fact is that both licensed products and good games sell. If you have a licensed product which is also a good game (Die Hard Trilogy, Dune II, most of the Star Wars games), it will sell more than either a bad game with a license or a good game without a license. Unfortunately as long as bad games with licenses attached continue to sell (“Oh no they killed the game play”) publishers will continue to churn out below average products.

An original game, as the name suggests, is based on an original concept. The majority of these ideas are created by independent developers who then seek to get the game signed by a publisher. Some internal development studios (publisher owned studios) do develop original games, or a mixture of original, licensed and conversions, but many publishers prefer that these riskier products are developed by external developers. A growing number of developers are seeking bank or VC funding in order to develop (or part develop) their products prior to finalising a publishing deal. The advantage of this for the publisher is that their risk is reduced as the product is closer to completion and easier to evaluate.

The advantage of an original game, over a license is generally one of cost. There is no license fee to pay and no ongoing royalty (to the licensor), which means that the cost to bring the game to market is lower and the percentage of profits that go into the publisher and developer’s pockets is larger. In addition the subsidiary rights (book, film, toy, comic, TV show etc.) remain with the creator (or the publisher, depending on their agreement). A number of original products have been licensed for toys, TV, films etc., including Earthworm Jim, Doom, Tomb Raider, Mario and a few others.

The downside is that an original game must sell on its own merits. Its game play, sound, music and graphics will have to sell the product, along with a good marketing campaign. It is difficult to predict the final quality of the game and thus its success in the market. However massive success of original products such as the Red Alert, Tomb Raider and Zelda help to encourage Publishers to invest in these products.

A conversion is a quite simply a game that has been created on one format and then ported (copied) from one format to another. Most products, either original or licensed, are produced on a lead format. This is usually the machine best suited to the games style or aimed most closely at the games target market. The Publisher will then seek to produce versions of the game on as many formats as possible in order to target a larger slice of the overall market, to make the best use of the marketing spend and to reduce the per unit cost of development by reusing the assets created for the lead version.

Depending on the publisher’s faith in the title they may commission the game to be produced on multiple formats in parallel, or they may wait to see how the lead format develops before commissioning additional conversions.

Finding product – The acquisition process

While most licensed products and conversions are commissioned by the publisher (they have already made a commercial decision to produce such a title) original games usually enter the publishing lineup via the acquisition process. If the developer and publisher have an ongoing relationship then the publisher’s main contact with the developer will be a producer. Usually the developer will discuss future ideas with the producer, who in turn will pass on these concepts to the publisher. Those developers that do not have an existing relationship will need to go through a more formal acquisition process. [See the feature “The acquisitions process” for more details].