Dungeons & Dollars

Dungeons & Dollars
Death to the Games Industry, Part I

Greg Costikyan | 30 Aug 2005 12:00
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We're only talking about the best-selling PC title of all fucking time.

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.

There are a lot of very bright and creative people in this field - no lack of them. But business realities trump passion every time.I'm going to bring up that Scratchware Manifesto quote again:

"An industry that was once the most innovative and exciting artistic field on the planet has become a morass of drudgery and imitation"

Doesn't sound so naïve now, does it? And we've only talked about the imitation aspect - you can talk to EA_Spouse about the drudgery.

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.

Developers live from contract to contract - and if they don't land the next contract, they're out of business. Happens all the time. It's happened to me, in fact, and I'm hardly alone: Work like a dog, get to gold master, have a party to celebrate - and file for unemployment.

In fact, you may not even get to gold master. 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 fucked. Back in the day, a company like id could generate a surprise hit, rake in the royalties, and buy its own independence - today, they're sitting pretty, they aren't reliant on publisher funding because they have the resources to fund their own development, they own two franchises, and they're in the catbird seat when it comes to negotiating leverage.

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.

Why This is Bad
I'm one of the rare gamers over 35. That's because, unlike most people my age, I was exposed to games as a teen. When I was a teenager, there were two sorts of games in this country: conventional board and cardgames, which I played enthusiastically as a child, and the board wargame. (Yes, I predate D&D.) I was a wargamer, a hardcore gamer before there was such a thing as a home computer.

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