Sunday, February 21, 2010

Response to Bonus Round 402 Section 3

This is my response to those that would refute the thesis I put forward in Part 3 of Bonus Round 402.

Can well known developers, or groups of developers, leave a team (through choice or dissolution), start a new development studio, and get a deal with a top publisher with enough financial backing to make something creative and meaningful in the AAA space and thus prevent the industry from losing diversity in product?

This is the question that I posed, and then suggested that in my opinion the answer is a resounding NO.

Many of the responses I got to this question from the panel and in the forums forget why I posed the question in the first place, and attempt to minimize the question by finding exceptions to the rule and fringe cases. This is useless in refuting the thesis.

For example, I think we can all agree that falling out of a plane at 30,000 feet is deadly. Yet the grandfather of a high school friend did just that in WWII and survived basically unscathed. In fact it is not unheard of. But these exceptions do not mean that falling out of a plane is safe.

To support my argument I will speak in norms and generalities. If the question is relevant and the industry works in the way I suggest the MAJORITY of the time then we do indeed face a problem. I will break the question into four parts, first a sanity check on the value of the question itself, and then three assertions embedded in the question.

Shane is irrefutably wrong in his assertion that recent layoffs in the industry are normal and recurring. Not only has EA layed off a record number of people in the last year, but after the taping of the panel Activision also layed off a large number of people and shuttered multiple teams. The two biggest publishers laying off thousands of people at almost the same time is unprecedented. This is not my opinion, a simple check of past years press releases bear this out.

I do not debate that good developers can leave and sign smaller projects (<15 million dollars for this argument), but those developers are leaving the AAA business rather than doing anything relevant to support creativity in that space. Sure, they might eventually grow to get a shot at something bigger, but since smaller projects also take significant amounts of time this doesn’t solve the midterm problem that I propose lies in the 2-5 year window.

I do not debate that complete teams of independent developers can move around at will and get amazing deals. But if Insomniac, Epic, or Valve moves from one publisher to another then they are not bringing more diversity to the AAA space or replacing the lost teams. They are part of the current diversity already. New teams need to be created to replace teams that have disappeared.

There can be no argument that IF out of work developers (or those that chose to leave) cannot sign new AAA deals then fewer people and fewer teams working on these games will negatively impact the number of these titles released. Fewer titles should also mean less diversity unless somehow the industry simultaneously finds a will to experiment at the same time as it is losing projects. I would find that hard to believe. If anything, teams that remain intact will be focused on “proven” product, especially if they are publisher internal, and not in trying something new.

Thus the question is relevant.

I can quickly dispense with the first part of my question: “Can a well known developer, or group of developers, leave a team (through choice or dissolution), start a new development studio?” I will assume that there is no impediment to doing so. Thus there should be no argument by those that disagree with me so far.

The second part of the question: “can such a developer get a deal with a top publisher with enough financial backing to make something creative and meaningful in the AAA space” is the meat of the discussion.

To simplify this discussion I assume that talented developers will ALWAYS make something creative and meaningful if given 1) enough money and 2) enough freedom to do so. This is certainly not true but I am willing to accept the most generous of arguments against my overall point because this is not where I believe the problems lie.

The crux of my argument is that no publisher will sign a small band of developers, even a very talented one, to build a new team to do a 40+ million dollar title, so their only choice is to join an internal team that the publisher deems could be better led. Thus, even if they get the money, they likely won’t get the freedom. This is not because of any conspiracy against or unfairness towards developers; it is an unfortunate reality of the size and difficulty of building these products. There are hundreds of reasons that these titles are too big for a new team to tackle, but there are some easy ways to look at it.

A new developer would need to build a 120-person team. Hiring quickly, the team might try to find more than a person a day. I submit that this is impossible if quality is to be maintained. Going slowly, the team might grow at a person every 3 days. Possible, but the cost of idle hands, or managing a growing team efficiently while money is being spent on those already hired in that first year, not to mention the lengthened development cycle makes the risk adverse publisher refuse.

Once that team is made, there is a “rhythm,” the complex inter-working of a well built team, needs to be built. My old team Naughty Dog is a great team capable of making a game like Uncharted because they have built up and maintained this rhythm for over a decade and a half, broken if at all only by a transition to new management that we painstakingly strung over 2 years to insure that Evan, the new team leader, would be ready to take over and maintain that rhythm (by this I mean to take no credit for their amazing work on the Uncharted titles after I left). Rhythm involves everything from agreeing on methodology, acceptance of leadership, to existing engines, technical shortcuts, and an internal language. Again, full teams have it. Building it from scratch is really hard and usually takes multiple projects.

Publishers don’t want to pay to build an independent developer, taking the risks as the team is built, to end up having them leave as a complete unit to work elsewhere once the teething pains are over. Independent developers are REALLY hard to build today. I submit that this is a non-starter.

So what about internal? This is the most likely exception that would prove my theory wrong. The money would be there, most of the team is up and running, and they may even have the rhythm needed to make a great title. The publisher is much more likely to make this deal, but would it lead to something creative and meaningful?

I’m not sure. Would they get a chance to do something creative? Maybe, but I suggest that the first project is more likely to fix a team that is building a franchise title. Even if this is not the case, the very fact that they are joining an existing team weakens the argument that this is a source of NEW development ability. They are replacing a team, not adding to them. What about all the layed off developers? In any event, it isn’t exactly the panacea of creativity we were looking for.

Thus, it is not a question of talent, but rather a question of real world risk and practicality that would keep even the most well intentioned publisher and developer from signing a deal that risks enough money to do something creative and meaningful as an independent. And as an internal replacement, what is the real impact? Maybe I am stating the problem too forcefully, and joining an existing internal team to improve it and make something creative greatly lessons my thesis. Maybe, but I love the industry and I wouldn’t want to hang my hat on this as its future.

The fact that seemingly independent developers started by legends in Japan form all the time is a red herring. There are lots of reasons for these seemingly independent developers in Japan, much of it stemming from the strict seniority and pay structures inside Japanese companies, but one thing they do not usually lead to is new creative talent in the business. Most often, the same developer works with the same team for the same publisher. Hardly a counterpoint.

The third and last part of my question is: “can this happen enough that it will prevent the industry from losing diversity in product?” This is the most ignored part of the discussion. The entire point of asking the question was the impact on the industry AS A WHOLE. If one or three exceptions to the rule exist, but a dozen indeed follow my prediction, then the industry has a NET loss of development teams and a NET loss of diversity of product. I would still see that as a problem.

Coming up with Miyamoto-san, Will Wright, or a few others as exceptions is not a counter-argument. Miyamoto-san might certainly be the man to survive “jumping out of the plane”. But besides the ludicrousness of suggesting that Miyamoto-san would leave Nintendo, the fact that he might do so and would immediately get hired by another publisher does not refute the argument that this not the case for the vast majority of developers that create the backbone of the thesis.

Of course, a really successful developer might self finance. That is extremely rare and won’t have a large impact on the thesis. There are certainly some who can, but the number is extremely small. Again, they would be the exception and not the rule, and they are probably already making independent games.

What happens to the business if the vast majority of developers cannot sign new deals as I propose? That is the reason I proposed the question, not whether the rules apply to every last person in the development community.

In fact, through no malice on the part of publishers, developers, or anybody else, I think we do indeed have the problem I proposed. I believe that less AAA titles will be started in the next year, and a few years from now that will be felt on the shelf. I am neither pessimistic about the industry, angry at anybody or anything, or otherwise guided by any ill will towards gamers or the business. I am simply making a prediction that I believe to be true. I have no ability to control the outcome, and I would not wish for my opinion to bear out if I was. In fact, I hope I am wrong.

And finally, to those that pointed to the fact that I said on the panel that I couldn’t get a deal as proof that this was “all about me” are utterly missing the point. I was saying am the only one on the panel who has been out in the real world talking to publishers about making AAA games. Other developer(s) may prove me wrong (and I hope they do!), but with no disrespect to my fellow panelists, they have no actual experience to back up what they were saying.


  1. Your reasoning sounds pretty spot-on to me, and since it's 2:30AM right now and I've just come off an eight-hour writing bender, I'd be loath to argue even if I disagreed with you. But if I may take a different perspective here for a moment:

    Clearly, we're speaking in general terms here. Hideo Kojima forming his own studio fresh off Konami's payroll or Bungie reincorporating as an LLC aren't exactly representative of the type of thing that you're talking about. Nevertheless, I have a notion that we won't necessarily need miracles like that to endure this crisis of creativity - something that more idealistic young whippersnappers like myself have seen brewing on the horizon for some time.

    The boundaries of the AAA space have gotten fuzzier in recent years. It used to be that there was a mainstream commercial industry and an indie scene, and the lines were pretty well drawn. But lately we've seen a few games that, at least ideologically, rest somewhere in between. Portal, ODST and Battlefield 1943 are essentially AAA games built to scale, maintaining high production values at close to A budgets. I submit that projects of that size, built below the $10 million line and selling for $30-40 a copy, can mitigate risk, permit more developer freedom and maybe give us a creative shot in the arm if made in sufficient numbers.

    I'll leave my argument there, as I've already written a wall of text and I don't want to use your blog as a soapbox. Thank you for your candor, Jason!

  2. GKokoris, I agree with your points.

    Bungie is a great example of a successful breakaway of a full team. That, along with their obvious talent, will allow them to get funding for big projects. This isn't a hypothetical like Miyamoto-san leaving Nintendo, it is a case study. However, to date, such full team moves to independence, with the agreement of a publisher, are almost unheard of.

    However, this may be the model for the future and a way to mitigate or negate what I have suggested. As I said in the blog, nothing would make me happier than being wrong.

    The space has broadened, and Valve is a great example of a success at bringing out less expensive, experimental titles out and then capitalizing on this success by bringing out bigger sequels. I said this in my blog... <$15mm deals are certainly possible.

    Valve also has the advantage of digital distribution, with its increased profit margins, and alternate pricing models (often bundling) to help it push these titles. As I said on the panel and in a previous blog, I believe those changes away from a fixed price box lead toward a healthier industry.

    Valve's success point to the possibility that changing the model as I suggested on the panel in Section 2 might eventually disprove my theory of where we are heading in Section 3.

    The industry is fluid, I hope we flow in a positive direction.

  3. To highlight your last sentence, it is interesting to me how the game industry has an overabundance of armchair analysts, and by this I am including the gaming press.

    Random people viewing surgery from an operating theater would not be asked to comment authoritatively on the benefits of one tool over another, or the efficiency of a suture, or the bureaucracy of a hospital. At best they can comment on if a scar is very noticeable on the patient after surgery.

    My point being it is all terribly superficial. No matter how many books on Nintendo and Atari corporate history I read, no matter how many years I read press releases and play games in a Beta or Shipped state, I have not seen the machine from the inside. How can being able to attend industry events improve that level of insight? All PR is a front, no matter how much schmoozing and candid conversations occur.

    More gaming press move from commentary to development than the opposite, yet commentators and pundits have the lion's share of volume when speaking about the industry. But despite years of experience around the industry's perimeter, their opinions mainly reflect my own: is an end product of a certain quality and value to be worth my recreation time?

    We the readers like to think of the gaming press as industry insiders, but at the core I think they are just a slightly bigger stakeholder that, like myself, wants to benefit from what the industry produces.

  4. Thanks for your comments Brackynews.

    I'm going to argue against myself and say that I am not a AAA developer right now either, though I certainly know how the game was played and have a pretty good idea how it is played right now.

    I think that if I have value it comes from the fact that I am NOT indeed head down making a game, but rather have been talking with many developers and many publishers because I have the time to and because right now, I am on no team.

    Think of an X-NFL player who comments on the game. Certainly, a playing quarterback knows more about what is going on in the locker room and on the field of his or her team than the old, pudgy, balding, player sitting in the comfortable benches yammering on. But at the same time, this player, who can talk to ALL the coaches, and not just his coach, and who has the time to look at his industry as a whole instead of running to practice may actually have a perspective that the players, the fans, and the press never could.

    I can only hope try my best to fulfill that role without the old, pudgy and balding part.

  5. Didn't David Jaffe and Dylan Jobe Leave large teams formed independent studios? David got a deal for 3 games. Platinum Games?? Monolith Soft??

  6. Another topic that you touched upon in a different segment of that Bonus Round (even though it's not what this particular blog post is dedicated to) is the micro transactions as a potentially very successful business model for gaming industry. You talk about the success of Farm Ville.

    The counter argument to that was (and Shane Satterield talked about that later in the following Invisible Walls episode) and Farm Ville audience is not the Modern Warfare audience. I tend to agree with that, but would like to mention the newly formed team Riot Games that are following the exact same model you described on that Bonus Round. At this moment they have over 1 million downloads, just signed a distribution agreement with a publisher in Southeast Asia, hiring more people, and don't seem to have any intention to stop. They seem to have enough revenue flow to actively support their audience with new content and frequent patches and updates.

    I guess my point is that this is the example of a much more "hardcore" game than farm ville following this model. Certainly, it's only been 6 months since the game's official release, but I really hope that what you said will become the new model as that would bring something new (and hopefully more profitable for the developpers) to the industry.

    P.S. I'm not in any way related or paid to by the Riot Games, but am a big fan of what they are doing and hope more companies will follow in their footsteps.

  7. Lance,

    I also posted a blog explaining my thoughts on alternate payment methods. It was a few before this.

    I get the point that the FarmTown model won't work for all games. It is hard in a minute or two to make a complex suggestion, but what I was trying to say on Bonus Round is not that every game needs to be like FarmTown (that would indeed be ludicrous), but rather that every game can benefit from digital distribution and the accompanying freedom to set its own pricing model.

    Some titles might choose to stick with a fixed price. Using digital distribution they would still get significant improvements from in margin from a reduction in retailer cut and the removal of returns (and price protection) - without raising the price of games.

    Other titles might be more creative.

    I believe that, as time progresses, more games would get creative because variable pricing fits usage patterns better than a fixed price for the majority of users.

    I hope to explain this in a blog soon. I've been busy.

  8. Hey Jason, love your views on a lot of these things and was wondering (when you have some free time) will you make a blog post about the situation over at InfinityWard? It's basically WHAT you guys talked about, Geoff even mentioned the two that got fired by name and asked, "What would happen if they both left IW". So now your reasoning will be put to the test. Just wondering what you think will/should happen.

  9. Lucas, I hope for everyone involved in the IW situation that it resolves itself quickly and amicably. If there is one thing I do know, its that lawsuits suck for everyone involved and don't help at all with the business of making good games.

    I also hope that I am wrong about lead developers ability to break away and start new teams to make AAA games (rather than end up leading an existing internal team for someone else). People misinterpret my belief that it is difficult to do so with a desire that it be that way. I hope the ex-IW guys prove me wrong. Nothing would make me happier.

    I wish them the best of luck!