Category Archives: Business
No port in a (financial) storm
It used to be the case that selling your studio to a multi-national publisher was a great way to secure the future of your company. Massive financial resources would be available to a develop to create those great games you had always wanted to make, which would in-turn get major marketing support as the publisher owned the studio and the brand and thus stood to benefit fully from its success.
Unfortunately it seems that publishers are no longer a safe harbour due to the economic tornado that is sweeping the world. Gone are the days when a cash strapped publisher would cancel a few 3rd party games to reduce outgoings and shore up their cash-flow. Today’s multi-national publishers are listed companies with major shareholders to keep sweet and the only way to do that is via sweeping cost reductions. A few project cancellations are no longer enough – now they are required to shed staff in their thousands and close/sell off their own studios in order to reassure their shareholders that strong action is being take to cut costs. THQ have just announced that several studios will be offloaded.
Quote from Develop online article Another studio shake-down at THQ.
“Big Huge Games is the studio that might potentially get the chop, unless a buyer is found, while Heavy Iron and Incinerator are to be turned into independents.”
At least the studios in question haven’t been locked and the staff given their marching orders. But it does take serious planning, considerable finance and a hat full of luck to succeed when an entire studio finds themselves suddenly independent.
Other recent example include Microsoft’s closure of Ensemble Studios (Gamasutra: – Ensemble Studios To Close) and Aces Game Studio (GI.biz: – Microsoft closes Aces Game Studio). However, despite the difficulties caused to staff by sudden redundancies there is a small hint of a silver lining that goes along with the storm, which is the birth of new studios springing up after the storm has passed. Three new studios have been born from the remnants of Ensemble Studios – Robot Entertainment, Windstorm Studios and Bonfire Studios. Hopefully they will all be successful enough to grow and flourish until they become a suitable acquisitions target for a big publisher.
Steve “Snowy” White and the Seven Directors
Deep in the Enchanted Forest stands a lovely little cottage; home to Steve White and the Seven Directors. Steve, known as “Snowy” to his pals, is the sole employee of a game development company Enchantia Software. He’s the sole employee because all seven of the other people working there are Company Directors.
The Seven Directors previously worked for the evil Baron of Manchester but two years ago they ran off into the Enchanted Forest and set up their own game development studio, Enchantia Software, where they could make games without being told what to do by the big boss. Steve is pals with one of the Directors and recently joined the company as a game tester. Unfortunately he isn’t getting to do much testing as the game seems to be spending rather a long time in development (far longer than their Publisher was led to believe) and hasn’t even reached Alpha test yet.
Obviously Steve is only a tester so he is not really qualified to judge but it seems that the Directors spend an endless amount of time arguing over various game features and seldom actually come to a decision. Currently the management team is made up of three programmers who are Joint Technical Directors and four artists – one Art Director, one Animation Director, one Creative Director and a Modelling Director. Unfortunately the one Director they don’t seem to have is a Managing Director (because they are all equal and couldn’t actually agree on who should be the MD – or if they even needed one). In addition they don’t have a properly defined decision pipeline – a process to ensure that decisions actually get made in a reasonable time frame. This is because they all want to be able to make decisions, but none of them want anyone else to be able to make a decision they don’t agree with. As a result all the Directors need to be involved in every decision, even if it doesn’t relate to their job. So, even when a decision does get made, it takes many more person hours than it should and stops people from doing their actual jobs.
Poor management structure means slow or non-existent decision making which will damage your company and your game. There are several possible causes:
1. Trust – put simply partners don’t trust each other enough to let someone (other than themselves) be “in charge”. Instead of focusing on the importance of making decisions they focus on keeping control. You don’t get the best out of an artist or programmer by standing over them and telling them how you would do their job. The same applies to management. You need to let someone do their job, trust them that they will make the best decision they can then have regular but focused meetings to update each other on status and, if necessary, discuss how and why a decision was made.
2. Your management team is missing the necessary skills – there is no one with an obvious management ability and the whole management team know this. In a case like this it is perfectly acceptable to hire someone to be a manager so that everyone else can focus on what they are good at.
3. The founders don’t understand the difference between management and ownership. Management is a job just like artist or programmer. A good manager’s job is to enable the team to get their work done – to decide what is really needed to achieve the companies aims and what they can do without. Ownership is just that. You own a share of the company in return for the investment you put in, when the company started, and the risk you took. For that you (hopefully) get a financial reward in the future if the company is successful and is sold to a publisher. Just because you own the company that doesn’t mean you need to be a Manager/Director. In fact your shares may be worth a lot more in the future if you let someone else do the managing while you get on with what you are good at/enjoy.
Image used in this post courtesy of Kelly Hamilton at junglestudio.com
More useless information on Digital Downloads
In a recent piece on Gamesindustry.biz (Sony claims 14 million active PSN accounts // News) Sony announced that there are now 14 million active PSN accounts and that between them they have downloaded over 273 million pieces of content.
“pieces of content” could of course refer to paid for content such as games, themes etc or free content such as demos or videos or any other give-aways. Much like the press releases from Microsoft which talk about the “average number of game downloads” – but don’t tell you how many of those downloads were converted into sales – this latest piece of information can be filed under U.
Moral rights, porn star Tera Patrick and Saint’s Row 2
Intellectual Property Rights (IPR) aren’t something most people think about in relation to porn. However that is exactly what I thought about when I read this article, published by Kotaku (Saint’s Row 2: Porn Starlet Tera Patrick Joins Saint’s Row 2). The porn st…. sorry adult star Tera Patrick has been appointed “Special Producer” for the THQ published game Saint’s Row 2 – much to the embarrassment of some members of the development team, Violition (www.volition-inc.com).
Now don’t get me wrong, I am as sick as the next guy and am happy to keep staring at naked ladies until they find the drill hole and block it up. In addition to liking naked women I also like games and films and beer and animals. (The latter burnt just enough that they stop moving then smothered with bar-b-q sauce). What I don’t like is stupid and lazy marketing people who think that the best way to sell me a game (or any of the other things I like) is to dangle Tera Patrick, or any other porn star, in front of my face. Tera Patrick isn’t really a producer (special or otherwise) on the project. She doesn’t have any involvement in the development of the game and the game isn’t about Porn so her use in marketing Saint’s Row 2 is completely gratuitous. Saint’s Row 2 is about Gangs – would anyone seriously think that it would be good marketing to use a porn star to promote The Godfather or Gangs of New York? All this does is tell me that, in addition to being lazy, these marketeers have no understanding of why people buy games and have no respect for for either the customer or the developers that make the games.
So what does any of this have to do with Intellectual Property Rights? Well, in addition to the more commonly discussed IPR such as Copyright and Trademarks there are another set… Moral Rights. No I’m not talking about anti-sin, placard waiving Republicans. Moral Rights are the rights of a author not to have their work distorted, mutilated, or modified in a way that would prejudice the author’s honor or reputation. Something that they could certainly claim is happening as a result of this marketing campaign. Of course they will almost certainly have had to sign a development contract with assignes/waives any such rights but that doesn’t make it acceptable, it just means that unfortunately they can’t do anything about it.
Poker vs Blackjack
While catching up on my reading I came upon a post entitled Bluff on Pierre-Alexandre Garneau’s blog. The topic was the concept of bluffing in games with a mention of one of my favorite games of the moment, Texas Hold ‘em Poker. Now oddly I used to hate Poker, almost as much as I hated negotiating Publishing contracts. In Texas Hold ‘em Poker you can’t see all the cards the other players have in their hand. I always preferred Blackjack because you got to see the cards you were playing against.
Then one day something strange happened. I suddenly started to enjoy negotiating contracts and playing Poker, exactly because I couldn’t see all the cards. I realised that when negotiating a contract you aren’t the only person who can’t see all the cards and, just as in Poker, it’s far easier to negotiate on a set of weak cards if people can’t see them. Of course that isn’t much use to you unless you also realise that Publishers actually want developers to negotiate. Sure, the first draft contract that a publisher sends out come from the draw marker “for idiots” – but that only applies if you actually sign it. Publishers are in business to grow their business and if that means taking advantage of a developer that doesn’t know better then that is what they will do. It’s nothing personal, just business. However Publishers are also smart enough to know that their business will do better in the long run if they don’t work with too many idiots.
A developer who negotiates a better deal for themselves (better than the “idiots” contract at least) will be less likely to make stupid mistakes, hopefully more financially stable and at least stay in business long enough to finish developing their game. So, if you want to do well in the development business, better break out the cards and start practicing your Poker.
Scott Miller incubates
Video Game news site Gamedaily.com has a story up here about an apparent new IP incubator company to be founded by Scott Miller of 3DRealms and Jim Perkins, a former SVP of GT Interactive. The story is based on the brief existence of a web site (now showing just a logo) for a company called Radar Group. The story states that “Radar Group is an original IP incubator that will aim to take video game projects into cross-media properties such as films, TV shows, novels and toys.” The story goes on to quote more from the site regarding the company’s plans with “We build into our original, co-created IP the hooks to make for both a great game and a great film.”
Hmmmm now Scott Miller is obviously a smart guy and thinks this is the way to go but personally I can’t remember a “cross media” project that has been a meaningful success. By that I mean a project designed to be successful across multiple media, instead of taking a success from one media and moving it to another. It takes a lot of passion, dedication and hard work to make a great creative product, be it a film, comic, game or book. Trying to make a game, which is also suitable for a film (or vice-versa) is adding an extra level of complexity to an already difficult creative process. Designing a game to include elements because they are suitable “hooks to make for both a great game and a great film” is a quick way to dilute creative vision and make the creative process harder. In the 20 years I have been in the industry I have been pitched a multitude of cross media projects designed to be a great game/comic/film. None of them ever succeeded.
Cross media products are a bad way to make creative products…. of course as business people love the media convergence concept such a business model is are a great way to attract investment.
Take-Two’s poisoned power pill.
According to a Reuters’ report here the computer games publisher Take-Two has instituted a severance plan for employees (both executive and non-executive level), which would be activated in the event of them being fired following any purchase of the company. Obviously Take-Two are a caring company with their employees best interests at heart and the fact that this “poison pill” would make the company more expensive to purchase is just a convenient bonus. The plan would give all non-executive employees the equivalent of six months salary as severance… with the executive staff getting up to 1.5 times salary and bonuses for 18 months and all at zero cost to Take-Two.
The plan is part of Take-Two’s attempt to avoid being gobbled up by the ever hungry Electronic Arts (EA) following the latter’s February 25th announcement of a $2 Billion bid for the Grand Theft Auto publisher. Further steps include an attempt to bolster share-holder confidence (and push up the share price) by publicising the companies successes, with an announcement of historical sales to date for a host of Take-Two’s top titles (see gi.biz story).
Of course no corporate take over these days would be complete without a few stockholders suing someone or other. Regardless of how the takeover plays out someone somewhere is bound to think they haven’t earned as much as they should from their shares and sue someone…. anyone… in an attempt to get more. This is more fun than any soap currently showing on TV so we can only hope it will make it to a second season.
Game Industry Links ++
Veteran games marketing man Bruce Everiss has posted a fairly exhaustive list of Game Development related web sites. Below is Bruce’s original list (which he has kindly given permission for anyone to repost) plus some additional sites I use on a regular basis. Please share and enjoy.
Here I will list a whole pile of websites that are useful to the game industry professional. Some I have mentioned before, but putting them all in one place is pretty convenient. This is information overload.
N4G is a game news aggregator. The stories can be submitted by anyone but are vetted for relevance, commented on and scored for popularity. This gives an excellent news snapshot with the added advantage of measuring the level of public interest.
MCV is the website of the British video game trade newspaper. Lots of information relevant to everyone in the trade. They will send you a daily digest.
Gameindustry.biz is the online only competitor to MCV. They will send you a daily newsletter.
Gamerankings, like the title says, is an amazing compendium of game information centred around their reviews. An essential tool.
Metacritic is a more sophisticated game ranking with the individual scores weighted according to their credibility.
VG Chartz, lots of useful guestimated facts and figures. The site is dragged down by a puerile fanboy forum.
Some great development blogs. Find out what the people who actually make the games have to say. This is the gold standard for informed industry comment.
ELSPA is the main UK trade industry organisation. Their main concern is political lobbying which is why the UK government is so good towards the game industry.
How to get lots of money given to you for moving your video game business to Quebec. This site is much visited by European companies!!
Popurls is a metasite of metasites so gives you a breathtaking overview of the internet on one page. So informative that it is addictive.
Geekipedia is Wired magazines’ brilliant guide to our technology age. Essential education for many.
Develop, the online site for the game development community magazine.
- Improving Game Marketing: The Game Purchase Process From A Consumer’s Point Of View. An interesting paper.
Some incredibly incisive commentary on game marketing and game quality.
David Perry’s game industry map gives a geographical perspective to the whole industry.
MMOGCHART is the standard industry reference for what is happening in the MMO world.
The Chaos Engine, the private forum for game industry development professionals. Absolutely essential reading if you want to know what is going on.
Videogame journos network. Does exactly what the name says.
SoftPressRelease.com. Blast your press release out to the waiting press at low cost.
A good list of game developers and publishers with links to their websites and product lists.
There is enough information there for even the keenest budding game industry professional. Please add any great industry sites you may know using comments. Bloggers and journalists feel free to copy this anywhere you want.
My additional sites include
- Game Developer Magazine US based magazine focusing on game development.
- Gamedev.net a website dedicated to game development with an excellent forum.
- Indiegamer forums A great place to discuss issues relating to indie game dev/publishing.
- TIGA UK game developers trade body.
- ANGILS For those interested in serious games.
Stupid reason #4 – “Most of the games today are rubbish – I’m sure I can do better”
Of all the stupid reasons to set up a development company (or even to just try and get a job in the industry) #4 is one which crops up far too often. The logic behind it seems to be that a huge percentage of games that reach the market are badly made, unoriginal, poorly tuned rubbish and so there is a space in the market for a start-up dedicated to making good games. The assumption seems to be that there are a huge number of developers out there who make games based on bad ideas or simply don’t care if their game is good and thus it will be easy for a new team to come in and do well.
In my experience that is almost never the case. I have worked with a many, many different teams on a wide variety of product types including original games, conversions and licensed games and in almost every case the developers care deeply about the game they are making. So, if developers start out with the best intentions for the games they make, how come so many games end up being lackluster? Could it be that making great games is actually rather hard? Could there be a reason for all the poor games out there beyond just “the design was poor”? Actually I can think of 10 reasons just for starters….
The following are all problems I have seen first hand:
- The publisher doesn’t pay on time. This results in the developer being unable to hire/buy on time. If this happens once you can usually get away with it but all to often it can be a repeating problem. The resulting delays from this mean that the final product isn’t as good as it should be. – The usual solution to this is to make the team crunch to catch up but crunch doesn’t actually improve the game as fatigue and low morale just create new problems. The correct solution (which is seldom if ever done) is to negotiate for more time/money on the project in order to undo the damage.
- Business dictates deadlines. If you are making a game in your spare time (or you are a multi-millionaire) you don’t need to worry about deadlines. If you are expecting an investor/publisher to pay you to develop a game then it is a business and there will be deadlines. Being creative on a deadline is difficult because something that seems like a great idea, once implemented, may not turn out to be as good as expected. If you are fixed to a deadline (either due to limited financial resources or a publishers need for a 4th quarter release) then you have just “wasted” a chunk of your limited time that you will never get back. This is actually one of the most common reasons for less than stellar games. When too many ideas fail to pan out the games quality drops significantly. Unfortunately in the harsh world of business it is actually better for a publisher to ship a bad product, rather than not ship one at all, so the game goes out rather than being held back for improvement.
- Design is overly ambitious and there is no editing. It’s a designers job to make the best game possible and that often means that the design has to be overly ambitious. That is fine if you have unlimited resources but, as per point 2 above, that is seldom the case. This means that in order to get the game done within time/budget something must be chopped from the game. Editing out features is a tough process and it takes a disciplined team to do it well. Features need to be prioritised and progress needs to be tracked so that the team know when the remaining work exceeds the remaining time/budget. This normally requires a good producer with a strong relationship with the designer/team. Failure to properly prioritise means that features which should be lower priority get implemented and then time runs out before features that would make the game better (thus should be higher priority) can be implemented.
- Changing hardware platforms. The birth of a new console platform or the poor performance of an existing platform can mean that a publisher/developer needs to change horses mid-stream. Jumping from one hardware platform to another will result in at least some work being wasted. If the jump isn’t properly managed (schedule and budget adjusted) then the wasted time will impact on eventual product quality. Worse still….
- Unstable/unfinished hardware and tools. New console hardware platforms are often released to developers before the hardware/development tools are final. The on-going changes and instability make development less efficient. The resulting mistakes/problems during early development often snowball to cause more severe problems at the tail end of development and quality suffers.
- Learning curve for new console platforms. Regardless of the stability of a hardware platform there is always a learning curve when a developer starts their first project on a new platform. The team need to learn the best way to use the hardware and often need to develop/redevelop tools and technology. This means they will be running at reduced efficiency for part of the development schedule. Unless this delay is balanced by more time/resources it will impact on final quality.
- Late delivery of hardware/software. Essential hardware or middleware may be complete but isn’t delivered on time (see point 1 for reasons why)
- Lack of ability in critical areas of the dev team. Taking code and art and level design and audio and combining them into a whole is a complex balancing act. A great game needs great code, art, design, audio and production. Finding staff who excel in each of these areas can be tough and if one area of the team isn’t up to the job the end product will suffer
- Lack of publisher support for the developers vision. Creativity is a subjective issue and if a publisher doesn’t support a developers vision it can lead to delays in approvals, changed decisions, design U-turns etc. There are a host of reasons why a publisher may not support a developers vision but the results are the same. Indecision and delay, which impact the quality of the final project.
- Poor management at the developer. Many developers are started by talented and creative individuals with little or no management ability or business experience. It would be nice if just being good at development was enough to succeed in business but it isn’t the case. When faced with tough decisions it isn’t unheard of for inexperienced managers to make the wrong choice and that can seriously impact on the smooth functioning of the team and the eventual quality of the game.
Conclusion
The above are just the first 10 reasons that I could think of. I know there are many others and many of the above can be broken down into sub-sets (there are many different reasons why a publisher might not pay on time). So, if you are an individual looking to break into the games industry in order to “make a difference” you will find that few, if any, of the causes of poor quality games are solvable by just one person. Likewise, if you are a team of developers looking to strike out on your own and start a company dedicated to great game play; be warned that a large percentage of the problems you will face can’t be solved by writing code or creating great art. Their solutions lie in the fields of person management, contract negotiation, publisher liaison, business planning etc. If your not equally strong in those areas as you are in actual development then chances are you will be one of the many, not one of the few.
Warm up North
I attended the inaugural Northern Exposure gaming conference yesterday, which took place at York Racecourse. The event was organised by North-based games networks GameHorizon and Game Republic and was focused on the future of games publishing and the impact of digital distribution. There were a number of interesting and lively talks given by a variety of speakers including:
Hugh Mason, (Pembridge Partners LLP) “Apocalypse? Success strategies for disruption and chaos:”,
Mark Morris, (Introversion), “Introversion Software: 6 Years, 4 Games and still playing with Pixels”
Martyn Brown, (Team 17) “Global Worming”
Ed Bartlett, (IGA Worldwide) “Generating Revenue”
George Bray, (MumboJumbo), “Go Casual or Go Home”
For me, the most interesting points were George Brays comments regarding the conversion ratio of the casual game Luxor on Live Arcade (5% of demo downloads converted to sales). Compare this to the norm for casual games, which George stated was between 0.5-1.5% and it seems that Live Arcade is a good place to sell casual games. However, if you compare it to the conversion ratio for Team 17s latest Worms outing (600,000 downloads, 200,000 sales – 33% conversion ratio) its clearly an even better place to sell non-casual games.
The one day event wrapped up with a very lively panel session in which traditional publishing went head to head with upstart indie/digital self publishing. After three rounds the fight was ajudged a draw. Standard publishing deals will continue and retail will not die any time soon, but digital distribution and indie self-publishing is on the up and will make up an increasingly important part of the business mix, especially for small indies.
Aftermath: The event itself was followed by a socialising/networking (drinking) event at the nearby Pitcher and Piano. I made the sensible choice of moving on from their to a local curry house for a civilized meal with Charles Cecil (Revolution), Darren Jobling (Eutechnyx), James North-Hearn (Sumo) and a number of the more sensible attendees. Charles Cecil’s jacket, on the other hand, went on a drinking spree with Martyn Brown (Team 17), Joe Lewis & Paul Smith (Strawdog Studios), Sean Crooks (3rd Dimension Creation), Graeme Boxall (Blast) and a number of others until three in the morning. The jacket was last seen floating off down the river Ouse (there is every chance that someone was wearing it at the time).
Quote of the morning after “[i'm] never drinking anything passed to me by Martyn Brown again!”