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Thursday, March 25, 2004

Comments

Dan MacDonald

Hmm yeah, that's what I was gonna say. Great job setting the record straight!

Jeffool

Fable is actually being made by Big Blue Box Studios. I'm not sure of their relationship with Lionhead, legally.

Though I find it interesting that they're even doing B&W2 under a different subdivision of Lionhead, 'Black & White Studios'. While 'The Movies' is being done by the original 'Lionhead Studios'.

But regardless, those guys have a hell of a line-up in my eyes. Fable, The Movies, BC...

Where would something like this fit in?

Brad Collins

I've got a financially solvent indie studio in my hands at the moment, and things are going very well. I've been getting alot of offers from vulture capitalists who all want something for nothing, and these are easy enough to dismiss, but I'm sure there's alot of things out there that I'm still unaware of. What kind of things can I expect to run into in this regard later on? How can I begin to prepare for it? What steps can I take to build security?

Factory

Various thoughts:

The main problem I see with these buyouts is that good teams get lumbered with the inability to be good teams (assuming they stay in Big Company), or the dispersial of good teams (wherein most of the team leaves Big Company).
Perhaps this could be avoided by making a secret deal with your developers to try to stick in Big Company for awhile, all to sneak off and go to a new company that has a employee lineup that is somewhat like the indie before it was bought. But I don't think that Big Company would like this.

Tadhg

Jeffool,

BBB is a satellite studio of Lionhead, as are Intrepid and all the others. They're all part of the one umbrella company, however. I think the idea of satellite-ing is to keep focussed cultures going in each game, sort of like what Scott talks about.

Badman

Hmmm...Ion Storm Austin was owned by Eidos when they made the first Deus Ex, so I don't think it's impossible to make great, groundbreaking games if you're owned by a publisher. I think the problem is that after Deus Ex's phenomenal success, Eidos said to Ion Storm, "Great! Now do it again, quick - we need something to cover our losses on Tomb Raider!"

The article you mentioned described being bought by a publisher as like getting married - it shouldn't be done until and unless both parties are familiar with the deal and have "dated" (done several one-game deals or similar commitments). This has worked well for companies like Naughty Dog and Ensemble.

Scott Miller

Ensemble is another great example of a marriage that's working. But then, other marriages looked strong the first several years, too, like Origin & EA, Westwood & EA, Legend & Infograms/Atari, and Core & Eidos.

However, Dues Ex was under development prior to Eidos buying Ion Storm. Remember, Ion Storm was independent in Romero's day (although Eidos had invested in the company, but not to the point of having any control--they only bought distribution rights for Ion Storm's games), and it was Romero who convinced Spector to join forces, with Romero promising Warren that he could create his own original game, which became Dues Ex.

Jeffool, Tadhg is correct. Lionhead is handling things very smartly by created/funding external studios to create new games. This avoids the problem of having more than one game under one roof, which leads to management distraction, team jealousy, and a split of talent that would be better focused on one project.

(BTW, I hope people here are checking out Tadhg's blog, just click on his name.)

crowdpleazr

I work for a small studio that was recently purchased by EA (NuFX, Inc), and in my opinion it was one of the best things we ever did. Our company was tightly bound to EA, and we developed NBA Street2 and Fight Night 2004, as well as others, during our indie time. We had a lot of crap to deal with during that time because we were a third party and not an internal studio (no source for libs that internal teams had source for was a major one), not to mention never getting proper credit for our work. Now we have a whole slew of resources we can call upon, plus we get more credit for the games we are doing, and less red tape.

While none of the titles we did recently are original titles, they are a hell of a lot of fun, and now that we're part of EA, we look forward to being able to create the same type of titles, without a lot of the extra red tape, and so far it's been all good news (obviously there will be SOME downside, just haven't seen it yet).

While indie developers are important, and original titles are important also, there's also a lot to be said for just making fun games, which EA does regularly. While Black and White may have been an original title, it was far from fun for a lot of people (myself included).

Walter

Well, if you only ever want to make the kind of games EA execs would approve of, then there's clearly no reason not to get bought up by EA if you can make more money by doing so. But you're quite the exception in this industry.

I, for one, am incredibly sorry to see Bullfrog die thanks to EA, and all they ever did was make (extraordinarily) fun games.

remi

I had this strange idea the other day about indie developers.
It's a common assumption that developers who are bought by publishers are restricted innovation wise, because of financial risks. Wouldn't it be great if the PSP became a platform for more innovative titles, maybe the risks are a bit lower on that platform somehow. While later on you can develop proven concepts on PSP across consoles?

JP

"Wouldn't it be great if the PSP became a platform for more innovative titles, maybe the risks are a bit lower on that platform somehow."

The reports coming out of GDC indicate that the PSP is comparable in hardware power to the PS2 (though I suspect that there's at least a bit of marketing bullshit afoot). If it's even close to that, though, then the costs of development - and thus the risks involved - are not going to be significantly lower for the PSP.

Mark Hanna

What about a scenario closer to something 3drealms does:

have two or three indie studios work closely with each other on one game and sponser that themselves?

The only need for the publisher would be to distribute the product, get a smaller percentage of the product while indie developers get a majority of this. I'm not a developer.. but wouldn't something like this work?

Garagegames does something similar like this, why can't more people do something like this..

Mihl

I think the biggest problem is and was the incredible personnel growth rate of indie studios in the years 1999/2000. The publishers had enough money, wanted huge games in a short period of time to hit the market at the right time of the consoles´ lifetime cycles. So most of the studios with one or more signed projects started to hire a huge amount of people.

In 2002 most of the (bigger and smaller) publishers ran into financial problems, and getting a new project signed was harder than ever. So many people had a studio with a lot of people sitting there, 4 preproductions running at the same time, and the managers were chasing publishers to get at least one signed to pay the people. Often these deals were not the best ones. Of course, many of these "managers" were ex-developers, and didn´t want to lay off so many people they hired over the last 2 years.

The now cost-aware publishers wanted more control over the development process, and started to buy dev studios. And every studio owner who was tired of pitching innovative concepts that were rejected, waiting months for a signature, sold his studio.

This is maybe not so true for big and well-known studios like Rage and Westwood, but true for many smaller studios out there, especially in Europe.

So I think keeping the core team small and outsourcing a lot to good specialist teams is the only option for most smaller indie studios, to keep the preproduction costs low and focus then on one big title.

Badman

JP: Two reasons I think the PSP will be easier to make games for:

1. Thanks to Nintendo, people are already used to playing...hmmm, how do I put this? Older-looking? More primitive? Atavistic? Ah, I know - classical games on handhelds.

2. While the PSP is pretty powerful, its lower screen resolution guarantees that you'll hit diminishing returns quickly, so there's no sense in making all your models 10,000 polys with umpteen texture passes.

Dave Wood

Scott,
I hope 3DR never sells out for any amount of money. Money is great and everything, but making games is even better. I'm sure you and George could retire today and never have to work another day in your lives. Where would that leave you though? I doubt your making games for money at this point. You love games and you'll work in this industry for a long time to come. It's in your blood.

I think the main difference between independent developers and huge publishers that gobble up other developers is that smaller developers tend to make games they want to play. The majority of them are making games because they love it. That's not always true of the bigger conglomerates that push the same games out over and over again in a mad rush to market.

steve

It's not really fair to use Valve as an example of an indie, since the company was founded by a Microsoft millionaire. It can afford its indepdendence; most can't.

J McGinn

"It can afford its indepdendence; most can't."

I agree. It's going to get worse before it gets better. How much are game budgets and team sizes going to grow with the next round of consoles? PS2 budgets for example are 4-5 times PSX budgets.

Even if budgets only double (a minimum estimate I think) it's going to be harder to start or run an indie studio.

Jeffool

The term 'indie' is one that has a different meaning to different people. I think by 'independent' thus far we've meant simply not being controlled by a publisher. If by 'independent' we want to mean 'operating under $x', then we're talking an entirely different operation, I feel.

This is why we have movies that are 'independent features', but still have budgets of over a million dollars. And why we can count id software as an independent studio. Of course, id isn't trying to enter the IGF, or anything, and neither is Valve.

Oh, and Tadhg, you should definitely not be ashamed to whore yourself out more. I really ejoyed a lot of your stuff bro. And had I known it was there, I could've enjoyed it earlier. Particularly your article 'Predictions'. Love the idea of consoles being standards-driven. I think that could help developers stay independent.

Developers would be able to 'get out there' with their ideas, and show their viability without the publishers. Ideally making the publisher focus on the traditional publishing duties to better compete for the business of the newly independent developers.

Not that I ever know what I'm talking about.

Tadhg

Consider myself whored.
Y'all get over and read my blog right now, y'hear?

Scott Miller

When I refer to an independent, I simply mean a studio that is self-owned, rather than publisher owned. I've noticed that the derivative "indie" is often used to mean smaller, garage-style studios, so that may be where some of the confusion occurs.

It seems that most of the independent studios appearing nowadays have rich founders, such as Circle Studio (by Jeremy Smith, former head of Core Design), InXile (by Brian Fargo, former head of Interplay), and Flagship (by Bill Roper, formally head of Blizzard). The rich founder model is about the only way I know to start a new, triple-A independent studio in today's industry.

Nicolas Quijano

For that matter, (and I love GG, so don't go reading stuff into this), the big "Indie with no budget enabler" that Garage Games is was made possible, in retrospective, by Sierra gobbling up dynamix for a whole LOT of money, allowing Jeff T. and cie to start GG, taking a, let's say, quite big calculated risk
So, again, influx of money from the Big "Old" Ones is allowing the smaller fish to fray in the pond with the sharks (little do they know we're piranhas ;))

And Scott, got any other blogs to pimp ? Tadhg is sure a good read :)

Scott Miller

Nicolas, on the right side I list several other blogs, the ones that generally update often and interest me the most. However, if you visit these sites you'll see that most of them link to other game blogs that I have not. But, for the most part, there are not yet too many information-heavy or good commentary oriented blogs for our industry -- if you find any good ones, feel free to list them here.

Scot Le May

Personally I love being true 'indie'. Although yes I dream of one day working at a big pub on massive million dollar projects. I currently love being able to spend as many hours as I wish on one detail and tweaking it until I deem it is perfect. I can work whenever I so choose. I can take great risks with the chance of making a major mistake or a great innovation. I can up the polycounts and recreate the bridge of sighs in full detail and not be second guessed based on direct x 7, 8 system specs. Really I have no-one to answer to except myself. If I choose to spend 2 years creating the perfect multiplayer level, tweaking the gameplay and perfecting the mesh's over and over and over, until I am happy, I can do it. This is usually why 'indie' studios innovate way beyond the big pubs.

Why do i stay 'indie'? Honestly because I love what I do. I am a gamer at heart. I cannot see myself, at this point, creating somthing half perfect. If I won't play it for hours months and years. I don't want my name attached to it. Although like I said previously, I do dream of being at a major development house. At this time in my life, I want to create somthing that leaves a mark, MY MARK.

This is my definition of 'indie' by example.

Mark Ventura

Badman:

I don't know about anyone else, but I would be very suprised if there was no TV-output adapter or functionality for the PSP.

Mark DeLoura

As for the PSP TV-output adapter, guess we'll have to wait and see on that one. But as to the earlier comments on whether the cost of making a PSP game will be similar to a PS2 title, the comments by Chris Charla and Mike Mika at GDC were pretty spot on. The architecture of the machine is very straight-forward, so you'll definitely require fewer engineers. The machine is capable of a nice poly count and has decent texture bandwidth, but with the smaller screen, high poly meshes and detailed textures will be much less important than on a console. I think Chris and Mike said 3-5 engineers and 6-8 artists. I've heard budgets lying around 3x of typical GBA budgets.

Anon

How much would '3x of typical GBA budgets' amount to? US$500,000?

Evan Erwin

I guess you're never going to update, are you Scott?

Too bad, one of my favorite reads getting stale...

Daryl Pitts

3x a GBA budget will put you somewhere around $750K. Sounds about right for a PSP game.

Gordon Gould

It seems to me that the whole industry, developers and publishers alike, would benefit from expanded funding sources. More capital, properly deployed, could equal greater independence for developers, more upside for everyone, and better risk management for the entire industry.

New sources of capital to fund developer-driven titles and/or the developers themselves would ease the pressure on developers who often have to live project-to-project. Additionally, new funding would also help publishers manage their risk a bit better, especially as the industry moves into a new console cycle w/more expensive dev budgets.

My partners and I are working on developing a fund to provide this sort of capital. I recently wrote a piece on a the need for new funding models in the games biz. Pls see http://gould.weblogsinc.com/entry/7325544898821755/ and let me know what you think.

Scott Miller

Good article, Gordon. There have been numerous dev studios trying hard to find new sources of funding, and few have succeeded. Publishers appear to have a noose around the industry right now.

FWIW, I wrote an article to an industry mailing list (packed full of leading developer and publisher representatives) in Jan. 2002, that I'll repost here, even though it inlcudes introductory text that will be of no interest to people here:

~~~~~

Three, four, and five years ago practically every studio in this area was making a game based on an IP owned by the studio itself. It used to be that several developers from existing studios could break off and easily find publisher interest and funding, even for original projects in which the studio would retain ownership of the IP. Boy how things have changed.

Now, it seems most studios work on properties that a publisher owns or controls (i.e. Activision controls the Star Trek brand within the game industry). Nowadays, it's about impossible for an independent studio to get publisher interest in an original game project--especially if the studio wants to maintain ownership of the IP they're creating. Ain't gonna happen. In this way I think the game industry has become much like the movie industry.

The exception is the financially independent studio. But there are few of these left, like Id, Epic, Valve, Lionhead, 3D Realms. Help me out, I cannot think of any others! (Remedy, though, thanks to stellar success of Max Payne, is about to be in this group.)

Side note: 3D Realms (a.k.a. Apogee--we're the same company), Id and Epic all sprang from the shareware industry, bootstrapped without investors, and are among the most successful independent developers remaining. Valve started with a very wealthy owner from the early Microsoft days, and so was financially independent from day one. Likewise with Lionhead's owner, Peter Molyneux, who sold Bullfrog to EA.

Okay, background complete...here's the gist of my message:

The current climate makes it nearly impossible for the vast majority of studios (those with financial independence) to make an original game in which they retain IP ownership. Publishers are reluctant do fund such a project. And for good reason, the track record shows that most original games by independent studios fail. But the fact remains that for an independent studio to become highly valuable, it needs to create and own its own IP(s). By highly valuable, I mean US$80 million plus--for example, MSoft bought Ensemble studios for $100 million because Ensemble owned the Age of Empires IP. Without owning that IP, Ensemble may have been worth $80 million less. (Case in point is Activision's purchase this week of Gray Matter, the studio that made Return to Castle Wolfenstein, for stock currently worth less than 3.5 million--mere peanuts for Activision. But that's because Gray Matter didn't own a valuable IP--had they owned the Wolf brand then their price would have been 15 - 25 times higher.)

But something interesting has happened. A few of the financially strong, independent studios I listed above have become what I call, über-developers. This means they help third-party studios, who are not financially independent, make original games in which the publisher does not own or control the IP.

For example, my company, 3DR, has been doing this all throughout the 90's (going back to Id Software in 1990). Our most recent success is helping Remedy develop Max Payne. In late-1996, when this project started, we took Remedy's original concept for a game, then called Dark Justice, and helped shape a new game concept centered on a character-based design, and we made sure the game had all the hooks needed to succeed. We also poured $2 million of funding into the game. Funding was later picked up by Godgames and Take-Two, and I think the project's total cost was around $4.5 million.

Max Payne took four years of development. A publisher would have never given Remedy this amount of time, or total funding. It was only because 3DR shielded Remedy from all the publisher BS, such as the desire to get the game out before it was truly ready, that they were able to make the game the way it needed to be made to practically guarantee it becoming successful.

3DR is also helping another studio in much the same way on an unannounced project. In effect, 3DR acts as a shield, protecting smaller studios from publisher pressure and tactics, aiding with the design and positioning of these games, funding them when necessary, and making sure that these games get time to properly cook before being taken out of the oven.

In the last couple of years I've seen some other independent studio doing the same thing. Id, for example, is working with a local developer to create an original game property. Lionhead is working with Big Blue Box on Project Ego. I wonder how long before Valve and Epic follow suit.

The bottom line is that this has become one of the very few ways left for up-and-coming studios to create an original game based on an IP that they own or co-own. Publishers practically refuse to do sign these projects anymore. (Or maybe someone, I hope, can show that I'm wrong.)

As time goes on and Epic and Valve and others catch on, I think we'll see the über-developer model grow, perhaps become a breeding ground for original games, and a place where smaller studios have a real chance to become one of the financially independents.

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