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October 8th, 2021, 12:22
So it turns out you can copy and paste closed captions from youtube into a document: Here is what I cobbled together after deleting timestamps and trying to suss out who was talking.

hello and welcome back to gi live london we are joined right now by another
industry legend who has worked with numerous games publishers on titles such
as knights the old republic 2 fallout new vegas south park the stick of truth
pillars of eternity the out the outer worlds and frankly countless others um
and now owned by microsoft obsidian entertainment remains one of the most
exciting rpg developers in the world in fact branching out of rpgs not just rpgs
and i'm delighted to be joined by the studio head fergus urquhart hello fergus

hello welcome

well thank you no and thanks for that introduction it makes me sound like
maybe more than i am but yeah or i've just survived i don't know i
think maybe that's a little bit of both well yeah well i'm not entirely sure
there's much difference um

well we actually caught up last year i don't if you remember it was uh in the
um it was uh talking about um the fact that you know it was with microsoft at
the time we're doing a few things a few interviews with them
new studios but how and i asked you this back then it's a year later so i'm gonna ask you
it again um how has it been being part of that family

oh it's good yeah no it's i i don't know i and i probably said it last time but
i'll say it again with this is that i think what's great is that when we first
talked with matt booty uh and and his uh chief of staff mary mcguane
uh and then and then phil spencer a little bit after that you know their
whole thing was about like hey this is how it's gonna work you know you're
going to be a studio you get to continue to do what you're doing we want you to continue to be who you are and do what you're doing and we're pretty much going to back off and
let you do what you do uh and that was that meeting was uh july
august august somewhere in there in 2018 um and that is the same that's what's
we've been doing right so it's we get to kind of decide what we're going to do i
mean of course we have to be good i always say we have to be good corporate
citizens we can't say you know what we really need to go to a fight game
in which it's horses versus unicorns right because that's totally in our
wheelhouse so we need to go do that no so um so a lot of it is is matt in
particular you know leaves us to do what we want to do um you know and and and
which has been great and that means we get to focus on the rpgs we'd love to
make yeah well that's i've heard this this is the the hands-off approach that
might have taken to acquisitions generally just please make us great games
and let us know if you need us yeah well i mean that's great to hear i'm really good because there is an acquisition frenzy going on right now developers of all shapes and sizes most of them independent um sort of uh listening to us and watching right now um and there is an acquisition going on right now across the whole industry um

but as somebody who's who's accepted a big offer and i know that you talked about matt you'll be up for being acquisite being acquired like years ago years ago but uh but what advice would you give for studios that are sort of considering either putting themselves in front of a big company or accepting an offer what would you say to them?

you know that's a that's a tough one i so uh the first part is you know is i mean the first office do the math you know i think a lot of it i mean so you know that's one of the things we did is
because you can offers can come in and and you can say does the math make sense
you know what what have you been doing what have you been getting from your
work for hires what can you do your own what's your royalty streams so a lot of
it is just i mean how i've i guess how we and i have run obsidian since we
started and then black isle studios before that is it's a lot of spreadsheets you know i guess it's the unsexy part of game development but um although we do use spreadsheets a lot
for game development too but but for the business side of it um so the first is do the math i think the thing is and then figure out what is your number you know i i you know it's hard to say hey
what you know what can you be bought for um i guess that's the horrible way of
saying it but but a lot of it is is actually that is figuring out what it is that you feel is was is worth your studio because you don't want to like sell your studio and then feel like oh
crap you know like that wasn't worth it or you know and then and then once you and
then i think once you do decide that then if that's the number and be happy
with it right and then and then and move on but i think the other thing is is
obviously there has to be a cultural fit and there has to also be an understanding of what it is
that why they're purchasing you so there has to be very has to be absolute clarity on
that so we were approached by another major publisher uh and i was having
lunch with um one of the one of the one of the main people at the publisher uh
and you know they said well if you ever thought about being acquired i said yeah
of course and and then ultimately what then they said was they said well yeah i
mean we're just having a real hard time hiring people right now and so yeah it would be great to be able just you know buy your studio then we can take all your people and put them on our
projects you know so that's i think no i i guess maybe the number can be large enough and and that would be fine for you but i but i always felt that i i we only want we always wanted to be a
service to our our our people that are people that have been with us and you
know the people have started about when we sold so i guess that's the thing is it's just
understanding you know what's your number understand your finances understand why they're making that decision and then also that like i said it just it does have to be a cultural
fit like you have to be cool being you you have to they have to be people you want to sit down and have a beer with at points in time um and if it's not that then then i think you have to reconsider yeah yeah and i guess if you're a studio depending on the studio
you know working for uh on on a different project that another student might be a great thing you know it might it might be a i mean i've had my own experience of a company being part of a company got bought and i'm not entirely sure they realized what they were buying and i'm
not entirely sure we realized he was buying us and that's where things go really wrong

no absolutely i think that i mean you know and because it's bigger and the bigger bigger and bigger the the companies are that are being purchased or even the companies that are
purchasing them i mean there's only so much due diligence both sides can do and
and it also still relies upon uh it still relies upon people being true and honest and and things like that i think one of the things i was really super surprised about going through the
acquisition process was um how sort of archaic it is so that's no this is no reflection like on microsoft's system i think microsoft is super efficient and stuff like that but it's just like we
would just get like it was we were talking about it me and one of the other founders darren we're talking about like hey maybe for our next gig what we need to do is create actually a website that
facilitates acquisitions and so i think that was that was sort of one of the interesting things i think as a part of that because it's sort of this archaic system of due diligence and send us sell
your contracts but i could just say oh i have you know i mean and you know they a lot of times i mean they can figure out if there's contracts that haven't been signed that you that we've
signed that you've not sent but a lot of it is a lot of it is really irrelevant it really just built on trust and and it's it's what you said i mean you can just forget to say something and then that could matter it doesn't matter to you but it matters to them a lot and and it really is these two companies that are just hoping it's gonna work you know and i think i think what we
were serious about and maybe that's the best advice i can give to people that are looking through acquisitions just be up front like don't try to hide stuff like because okay so it's it would suck
if an acquisition doesn't go through but a lot of times i mean a lot of times and this was with microsoft we just ended up talking about all the things i mean there's something uncomfortable in a contract don't worry about not bringing it up because you're worried they're just going to walk away right if if another the other side is going to walk away because of some small point in the
contract you don't understand well there probably would have walked away anyway and so and so a lot of it is it's it's i think it's almost like what you're saying is almost like you're not
going in a little a step deeper than what you're saying it's almost use the acquisition period to kind of learn as much as you can about the other you know as as the other party and a lot of that
is just asking questions sometimes uncomfortable ones um just so you can get to know them make sure you know it's like i guess you're about to get married yes it's like that weird it's like speed dating followed me immediately by immediately by a marriage do you want kids you know let's find this out before you before you put the ring on the finger

zach how many kids i think that's the
other that's the important question


you've worked with obviously you acquired now but you've worked with so many publishers down the years um outside of microsoft and assuming microsoft is the answer what has been
your best experience working witha publisher or a partner?

a um
so i think with publishers a lot in a lot of ways they all bring different things to the table right and so i mean there are there are times that that a working with a publisher is great financially sometimes it's great from a um it puts it puts you you know um it gives you a lot more notoriety
sometimes it's you're learning something you didn't learn before and so i can kind of look at a lot of them you know from a standpoint and if i look at it you know like for instance our first
thing with lucasarts uh and simon jeffrey taking a chance on us to do knights old republic two um that was great both financially and from another notoriety standpoint it was sort of one
of the best pieces of advice that you know ray and greg from bioware gave me
he said because i was still like i don't know do a star wars game and he's like
he goes look they're like i think the word dude was like look dude um was which is sort of uncanadian but still um and uh was look when you walk into a bank and you're looking for that first loan or a bank account you say you're working on star wars everybody knows
what that is and so there was a benefit to that right and so i think for everything every publisher deal and everything we looked at you know we did um there was benefits i mean there's
definitely high points i mean the the marketing and pr of bethesda when they're all behind something is just amazing and they're just like they're all in i mean and that is what's
amazing when you're working with a publisher and they're all in on something um that's incredible um you know mail.ru with armored warfare they gave us the opportunity to try something we've never done before and you know and it it taught us a lot about you know free to play games maybe so much so that you know maybe we don't want to do free to play games
you know and we learned something yeah and um you know and what else um you know and like also like the marketing and pr and business support from take two on the outer worlds again i mean these are publishers giving you know gave us a shot to create an ip and and uh
you know so i think a lot of it is is is that um a lot of it is just is just really like every publisher does have some some something to offer i guess the one thing that i think that has been one of the bigger challenges um in working with a lot of publishers is someone is sometimes actually the
development support so this is an interesting thing of like particularly when you're a young developer maybe your developer that has not been around for a long time or it's just not something you're super familiar with like luckily we came from black isle studios and we
had managed products and and both on the publisher side and the developer side
and so we kind of understood that whole process um but we've had challenges with
some of our our um with a fair number of our of our publishers sort of on the qa
front um it's often a fight and even to the extent that in our contracts we would
often try to get things in our contracts about like hey you know you have to put
this number of qa people on this month and be super specific about it and and
the one thing that publishers don't want to do a lot of times is be specific
which i understand they want to give themselves the the opportunity to to
decide later or make decisions when it makes sense um but i would say that
there are certain things that you know we learned over time like qa
um you know where's our logo going to be on the box you know because if it's not
talked about in the contract it might not be on the box at all or might not
even be in the in the in the you know the thing at the start of the game
um and so um you know so i think that's by to say one of the universe i wouldn't
say across all of our publishers but i would say qa has been a challenge um and then and then when you're not working on a unlike an all-in product for a publisher um it can be super
challenging to get pr marketing support and so you know we that was another
thing we'd often have to be very upfront with and be very pushy on with our with
our publishers

i mean i don't i don't know about to ask you do you have examples of things that
were challenging but i don't want you just like that's like criticizing your colleagues well i can you know what i can do so i can give sort of so so it's odd so um longer on neverwinter nights
too um uh uh and i'm not going to protect the names to uh to protect or change the names to protect them but but it's more of like we were working with atari neverwinter too and and we were having a challenge on the qa front now we were able to sort of work together on a solution which was we then actually created our own qa department here like we actually at one point had 30 or maybe even as many as 35 people in qa just working on everyone rights too and
that was the solution there because they were having a challenge with getting enough qa people um so that's a good example um trying to think like other things um you know i mean some of other stuff i mean you know i would say i mean again i don't want to be mean about this but like dungeon siege three was a challenge from the standpoint of pr and marketing i mean
the great people but often you know there was differences of opinions on how to market and pr it and you know different like the game is this butwe're gonna we need to mark it in pr
like this um and uh and also you know there's other projects i'm trying to think about my head
um i don't know um we're just you know you're just you're just getting fractions of time of
someone who's working on six other projects and you know which is which i've always you know my argument sometimes to other publishers have always been okay so you're gonna go
you're all in for i don't know let's talk about our older project 15 million dollars on this game
um and it's going to cost you another 50 million dollars get it on the shelf but you are you know you have an associate pr person on it has five other projects and you're paying them fifty thousand dollars so you're saying ten thousand dollars a year is your is your is your the way to
protect your 30 million dollar investment and you know i would try to say that from time to time i i can't say that it was successful but but at least it it it brought it down to numbers
which sometimes helps i've spoken to some interest i've spoken to some big developers down the years that partnered with a publisher that i was surprised by like i think a remedy for instance and control with 505 games like surely you could have gone with any of the big companies and their reasoning was that you know yes we could but we'd probably be a b title in their lineup
and they wouldn't know yeah a title in this company's lineup so and there was a there's a benefit to perhaps going with a slightly smaller publisher where you're a bigger player than um than uh
than the other way than going for a big company just because they've got a big name they may have a big marketing department but how much of that department is going to be dedicated to
your title is is the sort of thing that you have to find out i guess yeah and i think part of it is just don't don't do things that are probably going to get yourself yelled at like i think the thing is is that i mean you know i think going back you know when we first started in city and talking to ray greg
from bioware i mean you know i was already having arguments with them you know when we were i'll use quotations when i was managing them at the the black gala days no we were
working together they obviously they didall the work but we did a lot of the pr marketing but again their goals our agendas were aligned but not completely and so you know they very quickly start to have their own pr marketing people you know and then we develop that over
time as well and i think that that and and that does create can and create a certain amount of friction between the publisher and because the publisher often says hey we're paying for this
we're in control of it we need to do all the stuff which is fine and it's notlogically wrong but when they then aren't don't have the people that are actually doing it you know you in essence you're doing something for the benefit of both party you know both the publisher and the developer but the publisher gets mad because they're not doing it but you have to do it anyway i mean that's that's the thing that we figured out you just have to do it yeah well it's interesting because it'seen
i don't know if you noticed this i hope there's been a lot of transparency on on social media i think on twitter in particular where game developers are sharing their publisher contracts publicly i don't think this happened back in the day what do you make of that you know i don't know i mean first off um

i mean back in the day i would have been worried about getting sued because the contracts are all considered confidential and you sign a confidentiality agreement right but there isn't i mean in particularly i would say amongst the development community there's a certain amount of like a lot of us do talk about the general terms of our agreement so so if i never felt like if i needed to know something about a contract you know i could or i could find what what is the i forgot what they would what is the when i'm not the going rate but what is the current terms that are acceptable in contracts

you know i could always find them out so they didn't need to be public um i think it's i think it's interesting that people are sharing them the only thing the only thing is is that i think that
may be interesting to people in general but maybe not as much to other developers other than some very few points like when i think about a contract and this is the advice that i give to people like like this contract you might have to sign a contract that's 60 pages which is just ridiculous that they have to be 60 pages but look in the end it all matters you know what are you getting paid how are you getting paid what are your royalties what's your earn out like how do you get your royalties not just the amount but like at what point do you get them you got to spreadsheet it out um you gotta understand your termination you gotta understand what you own and don't wn coming out of this you understand you know um
you know understand how you're going to be um credited you know where your logo
is gonna be there's like a list of like i don't know eight or ten things that i think all that really matters in those contracts because in the end with a lot of the contracts i mean a publisher
really doesn't want to terminate because you know they really don't want to have to take you to court they really don't they don't really none of them really think they're ever going to get their
money back if it goes bad um and so um and so a lot of it really is it's the things that are going to matter in the long term you know is really you know and about like how you like i said how you get paid and how your royalties work so i think it's cool that that that they're getting shared and and i think the point of though is maybe is really the understanding of what is um

i would say the market rate there's a word that the the m a the merger and acquisitions people use about contracts i can't think of what it is right now but it's basically what are the going rates for things you know is is 12 and a half percent of gross what people are getting paid right now
is it you know orgas you know i mean i heard back in the day of course that you know it signed a contract with activision for like i don't know 45 percent of gross or it was no it wasn't
that but it was like 47 of gross or something something crazy i'm like holy crap like how's anybody making money i mean other than it of course but um but i think that i think a lot of that is is um yeah that's what i said i think it's just the it's just what it's the interesting thing that people sharing stuff is understanding what what maybe is the going rates of things right now um i guess we're also we're all so many small publishers starting up i guess it's useful for them like you may think it may be a bit critical of them but it's actually quite useful i guess to have click if you've been shamed even if you've not been named you know if your contract has been put out and it's like and he's like oh i didn't realize that was wrong you know it was uh it's it's it's and then you get to correct it i guess yes yeah yeah well you read them i mean i i i had i have this thing of where i read all our contracts i know that sounds like a really silly statement to make but i know a fair number of people who don't always do a good job of reading their contracts and i have made some legitimate errors like like i don't like hundreds of thousands of dollars used losing licenses errors um in contracts before that i missed it the lawyers missed it even though i read it although you know a couple times it's because i made this mistake of the contract that starts versus the contract that ends is going to be very different and and so i of course had read the contract six times and then i didn't do this my my normal thing is when it's the last version of a contract that we're supposed to sign i go old school i print it out i get a red pen and i literally sit in a quiet room and i make myself read every single word because something could have changed you know like there was this thing where a license got lost was someone introduced this and like and slash or to a sentence and i read it and everybody read it and other side read it well then the license got transferred to a different party and the different party that read it and oh what it mean what it really means if you really do the grammar is this so you don't actually get these three properties you only get this this or this right and so then there was a big argument and all that kind of stuff so but i think the end with contracts here you just you just you got you got to read the all of them you got to read them you got to read them got to read them

well i i that's some wonderful advice already um it's really great um i think those people find this super interesting um but well i guess but i'm gonna sort of deviate away from publishing and sort of contract just just for one i guess this might be our final question because i'm aware of the time but there's there's there's a lot of new opportunities opening up in games for developers to consider and i know that
you uh obsidian part microsoft must you know involved in almost all of them i
suspect like subscriptions streaming there's new consoles and all sorts um what do you think are the key areas that perhaps independent teams should be should be keeping an eye on paying
attention to make a good game?

i mean i mean i'll talk i'll go into more of it but i think i think the thing is is like there are opportunities for specific things you know i remember oh i can't remember his name i can i can
see his facebook i remember his name of like gave this great speech about how there was this emerging opportunity in making games for the for the for the kindle and i don't mean the
kindle like android version of the kindle i mean the actual like paper kindle thing and and and and it was super compelling and i'm like i should think about this i mean you know and then and of course there was no market for that actually you know what i mean i think he did make
some money on it but um uh but i don't think many people did so i think the first thing i mean it really is is is the game right it's just focusing on the game and then as it relates to all the opportunities it really are business opportunities like do you want to make a connect game do
you want to make a game that that is good for streaming like do you like netflix has an agenda you know microsoft has game pass playstation has gold you know i mean and playstation focuses on these the titles i don't know i mean it's funny when i think about all that
stuff and and all the things that are out there to do like a part of it is it really is it's sort of like what do you want to make what are you good at making and it's sort of like like we could say i mean like forget that we're a developer that's been around for a long time we said okay well we want to do subscription service okay well then how do we like are we making the outer worlds better by making it a subscription service are we making our kind of rpg or do we want to make
something very different grounded i'm not trying to plug but i mean grounded is an example of something different right like it it bore out from a hey people like survival games we like survival games let's try to make a survival game you know and of course it i wish i i wish i could there as
there was a much larger you know way of explaining like like how do we come to our decisions but um i'm really taking not much longer of a conversation down to its parts but i mean i mean obviously then we then we explored it right we looked at the numbers and we looked at
that but it's like i guess i think and then for us it's always just been like like like we want to make what we want to make and then and then how do we make sure those are successful right it's looking at you know with grounded it's looking at like why is rust successful why is why is the forest successful why is um um why is uh lonesome dark did i say that right um the one in the cult one and the one that's in the cold um you know why have these all been why have these all been successful you're watching the gdc speeches you know and just going okay then i think the thing then really your question of opportunity for developers is is then to go okay because that's a i don't want to call it a marketing or pr decision or or a business decision but it's like okay so we have this thing we like it we love it we can make it awesome

now like if we went to you know if we went to facebook and put it on the quest to like does the game fit do we still feel good about it and because we can make it cool for them they'll give us an
opportunity right so that's so you know i mean so it's like for me a lot of those decisions come down to like it's it's almost like a a sales marketing and pr decision um in the end it's about so you build the game and then and then explore the options that you that that and there's a lot of options out there now right yeah and that's that's the exciting thing is you can go to facebook and put it on the quest too you can go to xbox and see if it will go on the game pass and you can
go to do ps now or you can do um maybe not but stadium so you know you can do you can go in these sort of there's so many different directions you can go in i guess that's um but you don't don't start from that point is that what you're saying i think

i think don't start from the point i mean start from this i mean obviously in the end if you're a new developer and you want a gay game publish just get a game published right and then and then
you know but but it can't be this um you know sometimes i say it don't don't have it be like a game that you're being made as if you're like you're like controlling a marionette what i mean by
that is is like you know you need your fingers in it you don't need to be kind of like well i i feel i i want to make it like well facebook wants a game that's like this so we're just gonna like we're gonna go make that now that is a business right like in essence that's just weight work for higher development business and if you want to do that go for it right you know so i guess a lot of it is is where do you want your business to go you know i mean do you want to establish yourself then go find those opportunities you know if you want to then establish yourself and then go make your own thing um then follow that strategy so in essence a lot of it is is is the it is a i guess in the end probably changing what i'm saying i mean these decisions on kind of where to take your
product is sort of a is a company strategy for how you want to establish yourself you know if your ip is important like you just care about like um your characters in your world and stuff like
that unless about the game then you can it could be a vr game it could be a mobile game it could be this it could be that i don't know i just also look i just look at like how did all the people that i i um respect establish themselves you know and so for me it's always like i always look at like rpgs so what are all the different ways that people have established them so with rpgs and what did they do you know and so and i and maybe it's i don't know maybe it is a a uh it is not a not the cool thing to say but like i don't find that they focused on at the time they didn't focus on platform they didn't focus on they didn't focus on sort of distribution platform you know distribution systems or stuff like that they either this is the game we're gonna make now
now on the flip side i mean they did partner or and as we have in the past you would partner with a console manufacturer you know who believed in your product you know maybe that goes back to what we're talking about before is like when you work with a publisher who's all in so i guess that's the thing you know maybe it goes circles all the back if you're interested in these and
you feel like you can be successful with one of these new one of these different options you know whether it's monetization or it's like game passes or other kind of you know subscription-based stuff you know then you find a partner who's going to be all in on your game you know maybe that's you know that's why i'm saying maybe but i that feels like probably the way that you need to you would need to you know need to go after it

brilliant well i'm very very aware of the time and that was excellent and i could actually pick your brains for ages but thank you so much absolutely happy to do it it's always like to talk to you and i can't wait to see more of avowed and the outer world too and i've enjoyed grounded and i'm a big fan so it's it's pleasure to talk to you um that's it for this session for those of you with tickets just join us in just a moment where we'll be holding a private developer q a with valve for everyone else i'll see you in just over an hour where i'm talking to the playstation ceo and president jim ryan thank you for watching.
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