Reshaping the Games Industry @ GameSetWatch

An interesting piece at GameSetWatch with the author arguing the traditional business model of the games industry is holding it back (I don't see anyone arguing against that) and studios need to change their approach and makeup:

The traditional game industry model -- development studio makes a vertical slice, pitches it to publisher, publisher advances the production funds, owns all the IP, markets and distributes it and then pays a royalty (less the advance) back to the dev studio -- is not really set up to make games, per se.
It's more set up to make game companies. Each game is just a vehicle for the company. We're really talking more about game company development here than game development.
In any conflict between the needs of the development studio and the needs of the game, guess which loses? The game. The game is there, ultimately, to further the development studio's agenda, not the other way around.
Since the company's purpose is to stay alive and operate -- pay overhead and salaries -- the easiest route to do this is to follow the path of least resistance: make sequels; work within comfortable boundaries; don't push it.

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More information.

Its one of the most interesting reads I have had in a long time about games. However, there are two questions that come to my mind.

First, the author argues, that it is the system which shapes the result, meaning, the fact that games are made like software and not like entertainment or like any mundane product makes them less creative. While sure it has some influence on the "sameness" we see, it is also IMO a question of the people making it. And there are just too many involved these days who have a say.

Guy Henkel, one of the creative heads behind Planescape Torment once said, being asked why he stopped to make games anymore, that in the "good old days" one or few people had the freedom to realize their vision; it was up to one creative person, or very few to decide everything. Now, we have hundreds of people and ALL have a say. We have the bean counters who wants their stocks to rise, we have people in all parts of the corporations, we have the press and of course the forums full of vocal fans. But here comes the news: democracy and creativity dont mix! Creativity is usually an act of dictatorship and that bites with our current way of corporate team work and the fashion to "listen to all sides" crap.

No creative genre is a stale and conservative as the gaming genre. Look at what pearls of creative story telling and ideas movies have made, or books, and compare it to the game genre. While sure the system has its flaws, I think it is a lack of will of those who make the games. I heard that all too often about movies too, that too exotic and demaning stuff would not pay, and thats balderdash! You CAN make demanding movies which still pay off and run very well, you just have to WANT it, and same would go for games.

Hi Elikal !

Figured you be where people discuss good rpg games

... back to topic

I would like to add, that this is the reason(coupled with new distribution systems) that we see the rise of indy games. Only problem right now is that gaming industry raised the bar so high , even they are failing to reach it again.

Lots of reasons

There are a lot of things that, I believe, keep game companies from realizing their full potential at this time.

Guy Henkel's synopsis certainly presents at least one of the hearts of the matter: red tape. It isn't news that gaming has become completely corporate. There will always be independent developers, privately-held studios, the Blizzards of the world who make enough billions that they are able to dictate their own destiny into the forseeable future. However, these are the exceptions to the driving forces of this industry, and not the rule. As we've seen, as long as the industry remains corporate, there will be comparatively few titles released in the upcoming years that will really push the envelope and express true originality and creativity.

On the other side of the coin, the rockstar primadonna days of the early-to-mid 90's are over, and rightly so. Too many nonexistant dollars were being spent. Too many people were coming into the industry with a sense of creative entitlement and no sense of economic reality. Creativity was high, yes, but there were a lot of people who were just entirely too big for their britches. Corporate America, while often villainized, likely prevented a massive implosion of the fledgling industry. I wouldn't consider corporate involvment a Trojan Horse as much as I would consider it a double-edged sword.

Corporate executives don't typically go to "gamer's school", play video games, or really have much interest in anything except being able to continue to function as a business. This is completely necessary, and unfortunately it drives some of the industry's most creative personnel away. The creative talents in the industry, I think, largely think of themselves as doing "production work" these days, and don't feel like they're as much a creative force as they are someone who's expected to turn out X amount of work in Y amount of hours. This will always be counter to the environment that most creatives excel in. The great painters of the Baroque period, for instance, aren't noted for the ditches they dug to make ends meet while they painted masterpieces that are still known today.

Corporations have to answer to investors. Investors want to know why they should be putting their money into something that, more often than not, either loses money or is a much smaller return-on-investment than if they were to even, say, play blue chips. Game companies are viewed as a big money risk to investors, and corporations do what they can to assuage those concerns: with flowcharts, piecharts, and chartycharts; they make sequels; they follow successful formulae; they keep their costs as low as possible at the studio level; they cut studios that aren't making hits. That revenue line needs to show a consistent upward swing, or they won't have the money to continue funding their studios. All of this is counter to developing or nurturing a true creative environment.

The bottom line is that there are no bad guys. The corporation's job is to make money. The studio's job is to make the best game they can. In the corporation's mind, many times the 'best game' is the one the studio did before...the one that sold a couple of million copies. It takes a lot as a studio to pursuade your parent company that making something totally new and exciting is really what should be done. The corporation wants to do things like re-use the engine and as many of the creative assets as possible from the previous title, or at least follow the same formula (after all, it was already successful.) They see numbers, and they don't like seeing another 6-12 months of carrying a studio for R&D. Shortsighted? Perhaps. However, they are under at least as much pressure as the studio to deliver, and there are people sitting behind their desks at corporate headquarters sweating it every day that their studios aren't delivering...their jobs are equally on the line. When they finally get something that delivers (maybe just barely), understandably they want to make as much on that license as possible. The idea of letting the same studio run loose and do it all over again is likely very frightening indeed.

Yes, game publishers can certainly try harder to see it from the studios' side, but it goes both ways. Creative types tend to have ebbs and flows in the amount and quality of work produced when working at true creative capacity, and often times much of it is managed out of the employees by studio management. Studio management has to report to the studio heads which in turn report to corporate, and corporate doesn't want to hear "Well, Bill's not really turning out his best artwork right now." They want, and need, numbers. The corporate climate is not an impossible creative one, but it requires compromise.

Truly, the corporate world has never been one that typically gives birth to expressive creativity; however, once in a while they will roll the dice and we'll continue to see occasional unique greatness emerge from the sea of sequels and games-by-numbers.

I've worked in the creative side of the industry for many years, and the days of a few passionate gamers making a great title are over...production value expectations are too high now. There will always be the next-great-little-game like Tetris and such that will be made by a few people; but as far as creating great gamer experiences, it now takes millions of dollars to meet the standards of 95% of today's gamer. Rolling the dice has become a lot tougher, but look for it when it happens.

Thanks, Michael! Interesting post.

I enjoyed the article and was impressed with the author's knowledge of game making. His take on the filmmaking studio system was also interesting, but I think it was a mistake to compare the two, and that's how he got lost in the end. Nerve and power are good to have, but come on. Those are nice thoughts but not really ideas, not really solutions.

Carter relied on his own good experience, but he would have reached better conclusions if he had compared game development to real estate development. They're the very best example of small businesses run by creative entrepreneurs whose work is entirely project based.

It's the real estate developer's job to conceive the good idea, to produce an actual business plan, arrange financing, get the government approvals, hire the ones to do the actual work (the general contractor) and sell the final product (though they may decide to own and manage instead). There are a lot of people involved in the creation of real estate, but the ones who do that are the true developers.

IMO, the industry might want to pause and consider who the true developers are in game development today. After reading this article, it's a little unclear. But if I had to choose, I'd have to say it's the publishers.

Carter's advice to game makers is valuable but not the right idea for our particular genre, I think. Ours could use a shot of creative new software engineering to produce the kind of game engines that would enable CRPG makers to depict imaginative game worlds that are both realistic and intellectually creative.

Game engine development will undoubtedly follow the money.

My own advice to aspiring CRPG makers is to seek out a different source of financing. Put together a top-notch product plan for your project and hire a consultant to coach you on how to sell it to lenders. Succeeding at that would put you in the position to be a true developer.

Lobotomist said:

Hi Elikal !

Figured you be where people discuss good rpg games

... back to topic

I would like to add, that this is the reason(coupled with new distribution systems) that we see the rise of indy games. Only problem right now is that gaming industry raised the bar so high , even they are failing to reach it again.

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Hey, Master Lobo! Nice to meet ya here, heh.

Michael Dean said:

I've worked in the creative side of the industry for many years, and the days of a few passionate gamers making a great title are over...production value expectations are too high now. There will always be the next-great-little-game like Tetris and such that will be made by a few people; but as far as creating great gamer experiences, it now takes millions of dollars to meet the standards of 95% of today's gamer. Rolling the dice has become a lot tougher, but look for it when it happens.

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95% is perhaps a bit high.

I imagine it's closer to 85-90% of gamers who're primarily concerned with high production values and accessible gameplay.

The trick is to target some of the remaining 10-15% and invest accordingly. That's how you'll both stay in business and stay creative.

However, you will more than likely NOT get rich in the process, but then I don't really think that's what most creative people are all about.

In my own pathetic way, I'm in the process of making a game that I'd personally want to invest in as a gamer. It's a step-by-step 90 degree CRPG, sort of like the ultimate evolution of the genre started with Dungeon Master. My problem is that I'm not much of a coder - and I'm having to learn everything as I go along. I've managed to make a fully functional engine, with a primitive map editor. But it's still in an extremely early stage.

Anyway, my point is that though my "production values" are incredibly weak - the game will eventually look "ok", because it's not 3D and the tiny audience I have in mind won't have a problem with what will look like a modern Dungeon Master/Eye of the Beholder. It's very much about setting goals that are realistic and understanding your own limits.

Now, I'm alone without a budget, but a small team of - say - 4-8 people with a modest budget could actually accomplish something that would look respectable and as long as gameplay evolution and depth is the focus - the end-result could be relatively lucrative if you don't set your sights too high. It's not impossible for such a team to have an audience of ~20-50K people depending on genre - and such numbers could result in a fair return - enough to stay afloat, anyway. You just have to give up the idea of cinematics, quality voice acting, etc. Also, digital distribution is probably the only way to go. Of course - the pay would have to be peanuts for the first couple of titles, and it would take a while to get to the "profitable" stage.

But there are still thousands of hardcore fans who wouldn't mind paying 20-30$ for a genuine CRPG. Look at what they did with Eschalon, for instance. Doesn't look half bad and it wouldn't take that much more to get into the realm of what I'm talking about.

I hope not, at least.

DArtagnan said:

However, you will more than likely NOT get rich in the process, but then I don't really think that's what most creative people are all about.

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But that's exactly the problem. Who is providing the money? Whether it's a publisher, investor or venture capital they are - almost by definition - money types. They want to make as high a ROI as possible.

Until - or unless - the creative types can finance things themselves, the rest is irrelevant.

Your example of Eschalon (as far as I know) is a part-time garage effort (absolutely no offence intended to Thomas if he's reading this). As soon as we get to a full time professional studio, it gets pretty hard.

With your 4-8 people, that's still 200-400k on basic salaries per year, not including any overheads whatsoever. For a 2 year development, you're going to need $1M+. Who has that? So, still off to a publisher or investor who wants to make money.

Dhruin said:

But that's exactly the problem. Who is providing the money? Whether it's a publisher, investor or venture capital they are - almost by definition - money types. They want to make as high a ROI as possible.

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Except lenders who are only interested in lending. Those just want healthy loans. All they want from you is the interest on the loan.

Michael Dean said:

I've worked in the creative side of the industry for many years, and the days of a few passionate gamers making a great title are over...production value expectations are too high now.

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Say what? The cost of the actual software and hardware needed to develop a game, any game, is cheaper now than it has ever been. Thanks to digital distribution, publishers can be left out entirely and significantly more profits can go to those few passionate gamers.

As for what people expect, production-value-wise, like everyone in the AAA gaming media, you're talking about graphics. Why do I need $10million and a game studio employing 100 people to have great writing in a game? Or responsive AI? Or a fantastic story and an interactive world? Or to do something new and innovative? I don't.

Also, http://www.irontowerstudio.com/forum/index.php

screeg said:

Say what? The cost of the actual software and hardware needed to develop a game, any game, is cheaper now than it has ever been. Thanks to digital distribution, publishers can be left out entirely and significantly more profits can go to those few passionate gamers.

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Theoretically yes. But practically? How many indies are successful without a publisher in the middle? Successful as in "adequately compensated for their investment and their time". Can't be so many.
On a sidenote, did you follow the Amazon / Reflexive thing this week? Many indies are in a rage about it because they were, ahem, not asked what they think about the price cut.

As for what people expect, production-value-wise, like everyone in the AAA gaming media, you're talking about graphics. Why do I need $10million and a game studio employing 100 people to have great writing in a game? Or responsive AI? Or a fantastic story and an interactive world? Or to do something new and innovative? I don't.

Also, http://www.irontowerstudio.com/forum/index.php

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Good to know, but do you want to deny that the overwhelming majority of the market wants high production values? Targetting the biggest possible audience is good business practice. You can't blame anybody for it.
There are certainly niches satisfied with pragmatic graphics, but they are seldomly at the top of the charts.

Squeek said:

Except lenders who are only interested in lending. Those just want healthy loans. All they want from you is the interest on the loan.

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And your house if the project is no success. Unfinished games don't count as securities.

tough times

It's good to see the back and forth here.
When I was working on Fallout 1, very few people saw in the game what we saw. Even at the time (when it was going to be called Wasteland 2 and then GURPS somethingorother), what we were developing was considered to be largely for a niche market. The "hit" that was Fallout would make a financier smirk.
These days niche titles just don't get funded.
Games -even the bad ones- just aren't developed for a few hundred thousand dollars, so collateral-based private funding is just a dream (unless you're already rich.)
So, it leaves trying to find and work with an open-minded publisher. They exist, but their pockets aren't deep, and in most cases they're barely getting by day-by-day, if they're not already defunct.
The publishers who are "making it", therefore, understandably balk at taking an unproven license and putting money into it. Why should they, when they can make The Sims: Party Like This License Will Never Die for a song and a dance, and its projected sales surpass anything that your niche title will?
It's painful, and it's pain that many of us who work in the industry (and have never gotten remotely rich doing so), deal with every day we try to stretch our wings and make something different. The people who control the money which pays the unfortunately necessary salaries don't care about different...they care about proven sales.
Anyway, I've put no forethought into what I'd be writing here tonight, I'm just babbling: so I'll wrap it up. I wish it were as inexpensive to develop an A+ title as has been suggested. However, even when the designers, programmers, and artists are working for peanuts, it's just not that cheap. It all adds up, and it takes very deep pockets to finance a labor of love...even when you're not spending the money to stick in the flash and glitz...ask the Troika guys.

Great discussion!

I am artist , working in internet industry. Never really made it to AAA gaming production, although it was my dream. Now, not anymore.

The whole entertainment industry have gone to the dogs. And the same is seen almost across the whole pallet. Games and blockbuster films are hurt the most. Cause they 1: Raised bar to high , 2: Now cost to much to produce

The people controlling money are dull and unimaginative , they even dont go to piss if they dont check statistic charts.

I personally decided that i dont care. Professionally my work is aimed at lowest common denominator user , so i serve shit.

I am more than ready to give graphic and animation help for mini projects, indies...i dont care about money

Only way now is the indies.

Dhruin said:

With your 4-8 people, that's still 200-400k on basic salaries per year, not including any overheads whatsoever. For a 2 year development, you're going to need $1M+. Who has that? So, still off to a publisher or investor who wants to make money.

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Very important point ... and one I think is very much missed too often. Once you add on any benefits, insurance, an office with basic utilities and hone/internet, getting hardware and software for employees, and so on, that first year has to be close to $1M for an 8 person team.

Very interesting discussion here.
Having worked on the bad (that is, the rather non-creative publishing and reviewing) side of the business for a few years, I know how much it stifles creativity be encouraging all the wrong things.
However, I strongly doubt the movie model is any better for creativity. Aside from the fact that sequelitis and emphasis on superficial elements dominate there as much as here, the movie business thrives on stardom and is all about he right connections for a reason. Not the most creative people will turn their ideas into celluloid but the most driven and ruthless. While drive is good, it does not make the most innovative entertainement products, particularily games.
I would hate to work in such an enviroment, where I would spend much of my time and energy working my connections just to make sure I would be signed for another short term stint at a project.
For me, I still cherish the possibility to sign up for a job at a smallish company, bcome part of a good team and be able to apply some creativity along with my skills even if I am not the vaunted senior designer.

Gorath said:

And your house if the project is no success. Unfinished games don't count as securities.

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This is the crux, I think. It's the spot where fantasy often meets reality, apparently, and gets stopped dead in its tracks. It was the author's point, I think, when he talked about the difference between financing a project vs. financing a business.

Even a conservative lender, like a bank, will give strong consideration to making any loan that will be secured with a home. And that's why real estate developers have an easier time getting financing.

But it's a big world out there.

Here's an example of a client with whom I've done a lot of business. A brilliant hardware engineer and his wife, another brilliant hardware engineer, both working for Texas Instruments came up with a great idea. They recruited an even smarter coworker and jumped ship to start their own business.

What they had in mind was pure math. They wanted to design DSP cores differently (pure black magic pertaining to digital signal processing) and sell them as intellectual property.

Try going out and getting a bank loan for that.

They found a wealthy individual who was doing business as a VC company (who was an old client of mine). He was impressed and gave them $10 million dollars and a committment for another $15 million.

They were in the exact same boat as an indie game developer. They didn't know anything about starting a business. All they had in the beginning was a great idea for something they wanted to create. And their costs were nearly identical. Most of the money they needed was to pay for salaries.

Their business was risky too. They didn't put up their homes as collateral. They convinced someone that the risk was worth the potential reward. They found a daring investor who fell in love with their idea.

Now he was also a hardware engineer and made his money with his own startup (that he ultimately sold for $2 billion, iirc). So he could relate.

Instead of going to a bank, maybe indie game makers should be asking wealthy individuals, maybe ones who made their money in applications software development, for the loans they need.

txa1265 said:

Very important point ... and one I think is very much missed too often. Once you add on any benefits, insurance, an office with basic utilities and hone/internet, getting hardware and software for employees, and so on, that first year has to be close to $1M for an 8 person team.

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I'm not saying it's trivial or easy - and it would require a certain kind of individuals. This wouldn't be a regular type paid job with insurance, it'd be from the heart and on faith. You'd be working with your own personal computers and most likely from the home of a team member. Also, I'm by no means talking about an A+ title - I'm talking about a low-to-middle market modest title - especially for the first outing. Something like Fallout - only with a higher resolution and more than 256 colors. You see, everyone is obsessing over 3D graphics with a ton of effects - but they're forgetting that 2D graphics can still look very good - as long as it's done with reasonable competence. It's MUCH easier to make the kind of step-by-step engine I'm making look good, than if I were to attempt a real 3D engine. That would look like crap - because I'm no 3D artist. Again, it's about not being boxed-in by the standards of today. Another advantage of any kind of 2D tile engine is that it will perform well on pretty much all hardware.

There are tons of 3D pre-rendering artists out there who're willing to prove their worth, and because of the 2D tile-engine - it's feasible for one person to do the art with the tools available today.

I'm not wrong to suggest almost every member of RPGWatch would pay for a new Fallout, only with higher resolution and more colors? If the gameplay was evolved - you'd be able to live without cinematics and even the top quality voice acting. Remember this is a 20-30$ title.

Anyway, the 8 person thing was just a number. With the tools available today, even 3-4 people could make something really special, so long as they stay within their restrictions.

What I'm really talking about are people who're willing to work for basically nothing while doing their first project. Without investors, they'll need some kind of job on the side - like I have whilst working on my own pet project.

But then again, if an investor was able to look past getting a big return - and was at heart interested in actually making a great game, then things might not be so grim. But you don't go to a bank or an EA style publisher for that - for they are basically institutions of greed. You have to look around for the rare breed of wealthy and imaginative people - whether actual publishers or not. They're not exactly abundant - but I have no doubt they exist if you look hard enough.

It'd probably be a crappy short-term deal, but in the long-term - after being established - profit would be within reach. Especially if you do a few expansions on a 6 month basis - and with the right tools, this is very feasible. Certainly for the kind of game I have in mind.

So long as you don't make crappy products and stick to genuinely improving your game with expansion content - you'll be building a name for yourself in the process.

This is very much like the old style "basement development" that everyone claims is dead and gone. But with the tools of today - like XNA from Microsoft - you can do really amazing things within a relatively short period of time. The market might be primarily casual - but that still doesn't "magic away" the hundreds of thousands of hardcore players still around.

The problem is - again - one of attitude, and naturally investors are more inclined to oppose the idea of "art" over "business" because they're only there to get a big profit, if at all possible. But it's sort of a disease to focus only on the short-term gains. If you're willing to take a risk and invest in something that could be profitable in the long-term, then maybe it's not such a bad deal afterall. The problem is you HAVE to accept that profit will always be modest. Then again, profit is profit - and we've seen what happens to ever expanding empires throughout history, haven't we.

Keep in mind that this is coming from a danish guy - and our culture isn't quite as saturated with the capitalistic obsession and mindset present in the US. We're getting there - sadly - but because of our system of welfare and absence of real poverty, we're not quite so worried about making it big. This is just my subjective perception, of course, and there are plenty of exceptions.

I see what you're saying, but when you look at 'volunteer teams', such as those who work on 'mods' or 'total conversions' they tend to take too long and fall apart before release. It is because there is a basic need for an adult to have income to survive.