Opus131
08-30-2005, 04:03 PM
http://www.escapistmagazine.com/issue/8/3
...
Two years ago, speaking at a conference in the UK, Warren Spector said "The publishers have to die, or we are all doomed" - to cheers. And this year, at GDC, I ranted on the problem - and received a standing ovation.
What is the problem? And is there any way to address it?
The Problem
As recently as 1992, the typical development budget for a PC game was as little as $200,000. Today, if you want a title that will be taken seriously by the retailers - an A-level title - your minimum buy-in is $5m, and $10m for a triple-A title is common. With the next generation of console hardware, the talk is of $20m budgets - not as something that will be unusual, but typical.
...
Today, art assets (not programming) are the main cost driver. As machines become capable of rendering more detailed 3D models in real time, the market demands more detailed 3D models - and models are hand-created by artists using tools such as 3D Studio Max and Maya. All things being equal, a doubling in polygon count means a doubling in the amount of time an artist needs to spend generating the model - and a doubling in cost. Faster machines can push more polygons; more polygons means more cost.
That's the theory, but empirical evidence bears it out. Back in the day, a Doom level took one man-day to build. A Doom III level takes two or more man-weeks.
Now one might argue, of course, that the improvement in graphical quality improves the gameplay experience so much that the cost is worthwhile. But if that's so, why was Doom so rapturously received, such a huge hit? And why do the critics basically agree that Doom III - well, it kind of sucks?
...
... [T]he nature of the market and distribution channel is even more to blame [than the gamer audience without an indie aesthetic]. When a developer goes to a publisher to pitch a title, the publisher does not greenlight it because they play it and say "what a great game!" The developer may not even have a playable demo - but what he will have is a demo reel, a non-interactive visual pitch that may work to get some sense of gameplay across, but is mainly designed to impress the marketing dweebs with the graphics. Glitz, not gameplay, is what sells the publisher.
For that matter, half of the people sitting in on that greenlight meeting are probably marketing suits who think they're in a packaged goods industry, and are a lot more concerned about branding than anything else. Sequels and licenses, good; creativity - that's too risky.
And glitz, not gameplay, is what sells the retailer. Retailers don't have the time to play every title that comes across their desk and, in many cases, they don't play games anyway. They look at a video, they look at the materials provided by the sales guy, they make a decision. And that decision is ultimately based on concerns like branding, how much money the publisher will spend on product placement and stocking fees (what the industry calls "market development funding," or MDFs) - and whether it looks pretty or not.
And finally, there's the industry's attachment to "feature list" marketing. Online play? Check. Dozens of levels? Check. HDTV support? Check. You can often tell a game has nothing new to offer just by reading the backcover text: If it's basically a list of features and numbers (five of this and a hundred of that), you know they've really got nothing to say.
...
Maybe, someday, way down the road, the actual quality of the game will matter to someone - a reviewer, an actual gamer - but you don't even get a chance to get to them if you don't have the graphic right stuff. In other words, gameplay may affect ultimate sales - but it won't get you shelf space.
The reverse isn't true, though - poor gameplay and great graphics will work just fine, as far as the market is concerned. 80% of all game sales occur in the first two weeks that a game is available; all you need to do is blow through your inventory before word of mouth catches up with you. The industry is full of best-selling, lousy games. Can you say "Driver 3?" I knew you could.
In other words: Pretty + bad = financially successful; good + not pretty = fuhggedaboutit. Of course, pretty + good would be nice - but neither the publishers nor the retailers have an incentive to care.
The Narrowness of the Retail Channel
...
In the games industry, you get one shot. You have two weeks. If you haven't achieved sales velocity, you are dead. It's the bargain bin for you, buster. Thousands of games get released each year, they only have facings for 200, and they need the shelf-space for the next piece of over-hyped crap.
...
The result is that the average game (not the industry as a whole) loses more and more money. The publishers make up the losses on the few games that hit.
In other words: There is no room in this industry for niche product. There is no room for creativity or quirky vision. It's hit big, or don't try.
...
EA is stable for a different reason: It is big. More than double the revenues of Activision, its closest competitor. EA has the broadest, most diverse portfolio of anyone.
And they know it. And they're the villains in this piece, because they're the ones who keep raising the budgets and the costs. Everyone else has to stretch to keep up. Raising the development bar has, for more than a decade, been a conscious corporate strategy for EA, a means of squeezing out less capitalized competitors.
...
Ten years ago, you [the independent developer] had a couple of dozen plausible places to take a game. Today, you're lucky if you have six.
And when you pitch them - those increasing budgets breed conservatism. Ten million dollars is a lot of money to risk. The publishers are averse to risking it on anything they don't view as a sure thing - or as close as they can come to one, in this uncertain world.
That's why you get sequel after sequel. That's why any crap media license gets a game (Dukes of Hazzard, anyone?). The promotional spend by the movie studio is viewed as a way of generating interest in the game without additional cost to the game publisher.
...
Pressures on developer margins are also intense; it's very hard to negotiate a developer royalty over 15% today. And there's increasing use of middleware - which has the problem that all games start to look the same, because they share the same engine.
And everything has to be a brand.
I was at the Games & Mobile Conference (a small one, in New York) two years ago, when Edmond Sanctis, then COO of Acclaim, said something I could not believe he'd said in public (and that made me want to throttle the living daylights out of him, of course). He said, "There's no point in publishing a game unless there's a brand attached to it."
Do you buy games for the brand? Or the gameplay?
Of course, maybe there's a reason Acclaim is dead.
...
Does anyone seriously think anyone other than Will Wright could have gotten EA to publish a game like The Sims? And actually, EA tried to kill The Sims many times before it was finally released.
...
The truth is that unless your last name is "Wright" or "Miyamoto," the odds of getting anything innovative published today are nonexistent. In fact, the only thing you can get funded is something that's based on a license or part of a franchise (can you say "Coasters of Might and Magic?"), and incrementally innovative at best.
Does this mean that developers self-censor, not even bothering to bring their best ideas to publishers because they know they don't have a prayer of getting sold?
You bet your ass.
...
So being a developer is creatively frustrating - but from a business perspective, it sucks worse. If you are relying on publisher funding, you are highly unlikely to achieve a royalty rate of more than 15% (which is based on wholesale price less MDF - typically more like 7% of the actual consumer dollar). And your entire $5m budget (or whatever) is recoupable against your royalties. Thus, to recoup that advance, you need unit sales of well over a million.
In other words, barring a miracle, you will never see a dime beyond your initial funding. And no, you will not make a profit on the funding alone, unless you cook the books, because the publishers want to make damn sure that every dollar they spend winds up in assets on the disk. And since you are utterly reliant on them for both money and access to market, they have the leverage to ensure that it does.
...
Publishers are increasingly willing to kill projects midway - or even after going gold. The cost of advertising and promotion can double the total cost - and if they don't have confidence in the game, there's no point in throwing good money after bad.
Basically, as an independent developer in the games industry, you're just ****ed. Back in the day, a company like id could generate a surprise hit, rake in the royalties, and buy its own independence - ... But it's virtually impossible for that to happen today - both because royalty rates even for established developers are under pressure, and also because you don't get to own your own IP. You'll sign it away just to get published, and as far as the publishers are concerned, that's non-negotiable. If Doom were to happen today, the id-equivalent wouldn't own it - the publisher would. And if id got obstreperous, they'd just have the next version developed by someone else.
In other words, not only are business conditions harsh for developers - but there is no upside. Your only possible win, in fact, is to develop enough of a rep that a publisher buys you out. And then, more likely than not, the publisher guts you. Goodbye Origin. Goodbye Microprose. Goodbye Westwood. Goodbye Kesmai.
...
We Have to Blow This Up
...
What do we want? What would be ideal?
A market that serves creative vision instead of suppressing it. An audience that prizes gameplay over glitz. A business that allows niche product to be commercially successful - not necessarily or even ideally on the same scale as the conventional market, but on a much more modest one: profitability with sales of a few tens of thousands of units, not millions.
And, of course - creator control of intellectual property, because creators deserve to own their own work.
...
Two years ago, speaking at a conference in the UK, Warren Spector said "The publishers have to die, or we are all doomed" - to cheers. And this year, at GDC, I ranted on the problem - and received a standing ovation.
What is the problem? And is there any way to address it?
The Problem
As recently as 1992, the typical development budget for a PC game was as little as $200,000. Today, if you want a title that will be taken seriously by the retailers - an A-level title - your minimum buy-in is $5m, and $10m for a triple-A title is common. With the next generation of console hardware, the talk is of $20m budgets - not as something that will be unusual, but typical.
...
Today, art assets (not programming) are the main cost driver. As machines become capable of rendering more detailed 3D models in real time, the market demands more detailed 3D models - and models are hand-created by artists using tools such as 3D Studio Max and Maya. All things being equal, a doubling in polygon count means a doubling in the amount of time an artist needs to spend generating the model - and a doubling in cost. Faster machines can push more polygons; more polygons means more cost.
That's the theory, but empirical evidence bears it out. Back in the day, a Doom level took one man-day to build. A Doom III level takes two or more man-weeks.
Now one might argue, of course, that the improvement in graphical quality improves the gameplay experience so much that the cost is worthwhile. But if that's so, why was Doom so rapturously received, such a huge hit? And why do the critics basically agree that Doom III - well, it kind of sucks?
...
... [T]he nature of the market and distribution channel is even more to blame [than the gamer audience without an indie aesthetic]. When a developer goes to a publisher to pitch a title, the publisher does not greenlight it because they play it and say "what a great game!" The developer may not even have a playable demo - but what he will have is a demo reel, a non-interactive visual pitch that may work to get some sense of gameplay across, but is mainly designed to impress the marketing dweebs with the graphics. Glitz, not gameplay, is what sells the publisher.
For that matter, half of the people sitting in on that greenlight meeting are probably marketing suits who think they're in a packaged goods industry, and are a lot more concerned about branding than anything else. Sequels and licenses, good; creativity - that's too risky.
And glitz, not gameplay, is what sells the retailer. Retailers don't have the time to play every title that comes across their desk and, in many cases, they don't play games anyway. They look at a video, they look at the materials provided by the sales guy, they make a decision. And that decision is ultimately based on concerns like branding, how much money the publisher will spend on product placement and stocking fees (what the industry calls "market development funding," or MDFs) - and whether it looks pretty or not.
And finally, there's the industry's attachment to "feature list" marketing. Online play? Check. Dozens of levels? Check. HDTV support? Check. You can often tell a game has nothing new to offer just by reading the backcover text: If it's basically a list of features and numbers (five of this and a hundred of that), you know they've really got nothing to say.
...
Maybe, someday, way down the road, the actual quality of the game will matter to someone - a reviewer, an actual gamer - but you don't even get a chance to get to them if you don't have the graphic right stuff. In other words, gameplay may affect ultimate sales - but it won't get you shelf space.
The reverse isn't true, though - poor gameplay and great graphics will work just fine, as far as the market is concerned. 80% of all game sales occur in the first two weeks that a game is available; all you need to do is blow through your inventory before word of mouth catches up with you. The industry is full of best-selling, lousy games. Can you say "Driver 3?" I knew you could.
In other words: Pretty + bad = financially successful; good + not pretty = fuhggedaboutit. Of course, pretty + good would be nice - but neither the publishers nor the retailers have an incentive to care.
The Narrowness of the Retail Channel
...
In the games industry, you get one shot. You have two weeks. If you haven't achieved sales velocity, you are dead. It's the bargain bin for you, buster. Thousands of games get released each year, they only have facings for 200, and they need the shelf-space for the next piece of over-hyped crap.
...
The result is that the average game (not the industry as a whole) loses more and more money. The publishers make up the losses on the few games that hit.
In other words: There is no room in this industry for niche product. There is no room for creativity or quirky vision. It's hit big, or don't try.
...
EA is stable for a different reason: It is big. More than double the revenues of Activision, its closest competitor. EA has the broadest, most diverse portfolio of anyone.
And they know it. And they're the villains in this piece, because they're the ones who keep raising the budgets and the costs. Everyone else has to stretch to keep up. Raising the development bar has, for more than a decade, been a conscious corporate strategy for EA, a means of squeezing out less capitalized competitors.
...
Ten years ago, you [the independent developer] had a couple of dozen plausible places to take a game. Today, you're lucky if you have six.
And when you pitch them - those increasing budgets breed conservatism. Ten million dollars is a lot of money to risk. The publishers are averse to risking it on anything they don't view as a sure thing - or as close as they can come to one, in this uncertain world.
That's why you get sequel after sequel. That's why any crap media license gets a game (Dukes of Hazzard, anyone?). The promotional spend by the movie studio is viewed as a way of generating interest in the game without additional cost to the game publisher.
...
Pressures on developer margins are also intense; it's very hard to negotiate a developer royalty over 15% today. And there's increasing use of middleware - which has the problem that all games start to look the same, because they share the same engine.
And everything has to be a brand.
I was at the Games & Mobile Conference (a small one, in New York) two years ago, when Edmond Sanctis, then COO of Acclaim, said something I could not believe he'd said in public (and that made me want to throttle the living daylights out of him, of course). He said, "There's no point in publishing a game unless there's a brand attached to it."
Do you buy games for the brand? Or the gameplay?
Of course, maybe there's a reason Acclaim is dead.
...
Does anyone seriously think anyone other than Will Wright could have gotten EA to publish a game like The Sims? And actually, EA tried to kill The Sims many times before it was finally released.
...
The truth is that unless your last name is "Wright" or "Miyamoto," the odds of getting anything innovative published today are nonexistent. In fact, the only thing you can get funded is something that's based on a license or part of a franchise (can you say "Coasters of Might and Magic?"), and incrementally innovative at best.
Does this mean that developers self-censor, not even bothering to bring their best ideas to publishers because they know they don't have a prayer of getting sold?
You bet your ass.
...
So being a developer is creatively frustrating - but from a business perspective, it sucks worse. If you are relying on publisher funding, you are highly unlikely to achieve a royalty rate of more than 15% (which is based on wholesale price less MDF - typically more like 7% of the actual consumer dollar). And your entire $5m budget (or whatever) is recoupable against your royalties. Thus, to recoup that advance, you need unit sales of well over a million.
In other words, barring a miracle, you will never see a dime beyond your initial funding. And no, you will not make a profit on the funding alone, unless you cook the books, because the publishers want to make damn sure that every dollar they spend winds up in assets on the disk. And since you are utterly reliant on them for both money and access to market, they have the leverage to ensure that it does.
...
Publishers are increasingly willing to kill projects midway - or even after going gold. The cost of advertising and promotion can double the total cost - and if they don't have confidence in the game, there's no point in throwing good money after bad.
Basically, as an independent developer in the games industry, you're just ****ed. Back in the day, a company like id could generate a surprise hit, rake in the royalties, and buy its own independence - ... But it's virtually impossible for that to happen today - both because royalty rates even for established developers are under pressure, and also because you don't get to own your own IP. You'll sign it away just to get published, and as far as the publishers are concerned, that's non-negotiable. If Doom were to happen today, the id-equivalent wouldn't own it - the publisher would. And if id got obstreperous, they'd just have the next version developed by someone else.
In other words, not only are business conditions harsh for developers - but there is no upside. Your only possible win, in fact, is to develop enough of a rep that a publisher buys you out. And then, more likely than not, the publisher guts you. Goodbye Origin. Goodbye Microprose. Goodbye Westwood. Goodbye Kesmai.
...
We Have to Blow This Up
...
What do we want? What would be ideal?
A market that serves creative vision instead of suppressing it. An audience that prizes gameplay over glitz. A business that allows niche product to be commercially successful - not necessarily or even ideally on the same scale as the conventional market, but on a much more modest one: profitability with sales of a few tens of thousands of units, not millions.
And, of course - creator control of intellectual property, because creators deserve to own their own work.