STARDATE: 03.06.2001 AD

 
THE GAMING INDUSTRY - WHERE WE ARE

OK. Lets get one thing straight. These days, I am a VERY busy man. I have a project which I have invested a FORTUNE in time, effort and money in, about to ship in the coming months. As such, I don’t have time for distractions.

However, after reading the second part of Brad Wardell’s article over at Avault, I felt the need to chime in with my own thoughts.

While I agree with some of Brad’s points, I feel that there is a bigger picture he may or may not be aware of, and which plays a critical role on how the industry actually turns.

Under the fair use doctrine, I will use excerpts of Brad’s article to support my statements.

Game publishers lie about their sales stats. Not little lies. Whoppers. That game that shipped 500,000 units turns out to only sell 30,000 copies. Most people don’t have access to things like PC Data; that’s where the truth is and in PC Data we learn that games that sell more than 50,000 copies annually are extremely rare (like 1% of the titles released each year on the PC).

There is a big difference between sell-through and sell-in figures. If a publisher states that they shipped 500K units. They may well not be lying. If you want to know how many units actually sold, you’d have to wait until EVERYBODY has reconciled their returns. Here is how it actually works:

• Publisher sends out a sales force to woo the distributors.
• Distributors, depending on the product, publisher’s track record, leverage with the sales force, picks up the product.
• The MSRP price point for the product is dependent on it’s success at retail. More often than not, the retailer will force the publisher to honor its own MSRP or either (a) not pick up the product or (b) pick up less quantities than the publisher desires.
• Distributor picks up the product and will most likely pay the publisher an advance on those units.
• Distributor may or may not force the publisher to spend MDFs (Marketing Development Funds) for the product. This usually amounts to having the product in their catalog, having it at a specific section of the retail store etc. More often than not, you can think of it as pure blackmail and fits every definition of extortion that you can think of. Why? Because retailers no longer make enough money on games (especially PC games) in order to support their operation. So, these MDFs are a mechanism for getting the publisher to pay the distributor to actually carry the product.
• Unless a distributor has taken out something called sales/price protection, the distributor could care less if the product sells or not, depending on how much money they’ve siphoned in MDFs. So what’s SPP then? Usually, its a fancy way of getting the distributor to take a product and never return it under any circumstance. For this, they get a very hefty discount. So, those units that are covered under SPP, if they get returned by a consumer, never goes back to the publisher. Instead, the distributor recycles them and either puts them back on the shelf, or drops them in the bargain bin, depending on the type of complaints. And over time, even those returned games that worked, but were just piss poor, get recycled, go back on the shelf and eventually end up in the bargain bin. And if the distributor gets burned on that gig, guess what happens the next time a publisher submits another product, either from the same publisher or developer? Yep. Payback’s a bitch.

Back to reconciliation. This is the phase where, usually every quarter, the publisher tallies up the units it has shipped, compares them to the returns, and arrives at its actual unit sales of the product. Guess what? PC Data, already notorious for being so off the mark (even though they cite 20% error I think), its laughable, go ahead and publish figures that it relies on the distributors and publishers to provide. For the sake of your own sanity, please read that last line again and tell me if you see whats wrong with this picture. Done? OK. Here’s the deal.

The ONLY way that you are EVER going to get accurate sell-through figures that take into account returns, even with an error rate of 25%, is by relying on ACCURATE info from the two parties most likely to fudge and skew the numbers: the publishers and the distributors. And if any of you think that a publisher is going to tell you that they shipped 500K units, got 450K returns (with or without price protection) and actually only sold 50K of that whizz bang game they hyped for years, spent 3x its development costs on marketing alone, you’re dreaming. For one thing, guess where 90% of those marketing costs go. Yep, to the distributor. Publishers would rather spend $1m on marketing for a game they know is going to tank, than spend 500K of that money on giving the developers more time to actually finish and test the damn thing. Its similar to the brute force approach that some of us developers use in coding complex algorithms. There is a saying that if you dressed it up nice, you could sell ice cubes to Eskimos. Thats the mentality of the marketing push that publishers do. And it rarely fails.

This has detrimental effects on developers because they often go into making a project thinking that their cool game is going to go out and sell 500,000 copies. If they sign up with a publisher, they may get an advance (if they’re lucky, it might even be for over $100,000), but odds are that advance is all you’re ever going to get. Even if your game sells very well, based on the emails I got (and from personal experience) publishers seem to find a way to justify not paying royalties. I’m sure not all of them are that way but a lot of them seem to be. Bottom line, if you make a game and want someone else to publish it, get the maximum advance you can get and assume that’s all you’ll ever see.

It only has a detrimental effect on three types of developers. (1) the naive (2) the stupid (3) the newbies on the block who just want to see their game published (been there, done that, got the t-shirt)

For one thing, there isn’t a single publisher who will tell a developer that their game is going to sell well. None. What they do is, give you the worst case scenario imagineable. Why? Because doing that pretty much kills whatever leverage you (the developer) has in the negotiations. And if you have a niche title, rather than a mass market one, God help you. Lets not even begin to talk about how the climate has changed, with regards to projects that are in development. If a game is in development by a third party and its not close to Beta or at the minimum, 80% finished and not based on an established formula (read: “me too” clone) its never getting signed. Period. And if it gets signed, it stands an 80/20 chance of getting canned or used as shovelware to get distributors to take it at a lower price, while getting them to take another product at the regular price. Its not uncommon for publishers to ask a distributor to take, say, 5K units of one of their expensive in-house developed game, at the normal price, and then 1K units of another game (most likely a third party’s game) at half price, or even for free. Guess who gets the shaft. Yep. The third party developer.

Here is another example, and the premise is based on one of my contracts for BC3K v2.0. The units are fictional

• Publisher advances you $100K on your product - based on an MSRP of $49.99, which ends up being about $35.00 to the distributor/retailer. From this, you get, say, 20% royalties (if your game is really in demand). This nets you ($35 x 20%) = $7 per unit royalties. Assuming they are not also charging you marketing costs and Cost Of Goods - both of which will reduce your per unit royalty. Now, in order to pay the publisher back that $100K, they have to sell approx 15K ($7 per unit royalties is 14285 units to be exact) units. Right there, you’re already in the hole. Remember that the publisher is NOT going to give you $100K, unless it is at least 98% CONFIDENT that it is going to sell in excess of 15K units of your product.
• Publisher sells 16K units of your game in a quarter. For argument’s sake, lets say they shipped it in November to meet the Christmas mayhem.
• Based on your contract, 45-days from the end of Q1, the following year, they reconcile their accounts. They find that during that Jan-Mar period (yes, more often than not, they get to sit on your money way past the quarter), they had 2K returns on the product. Now it gets bleak. Since they had already paid you on 15K units, and the game has sold 14K units, you don’t get a dime in royalties. You still owe them for $1K units.

• Next quarter comes around. You’re probably broke by now, since, unless you are an in house dev team, the publisher is not bloody likely to pick up your next project. At the end of the Q2 period, the publisher has now sold and reconciled another 6K units - but WAIT!!. You take a look at your royalty statement and you see a new SKU at a different price point. Where you were getting $7 per unit when the game first came out, you now see a new SKU and at a lower price. Those SKUs could end up being a bundle, price protection etc. Whenever you see your royalty statement and there is a new SKU, you’re in trouble.

  OK, so now, the publisher explains that in order to sell the excess units sitting in its warehouse, it had to reduce the price. In doing that, they gave the product to a distributor at a very low cost and probably with price protection, in order to move them. Lets say that second SKU comes in at $2 per unit in royalties. From this 6K units which you had projected to be making $42K, you now have $12K net, due to the reduced MSRP and the publisher’s heavy discount.

• …then there’s that reserve withholding. This usually amounts to 20% of your revenue and gets reconciled twice a year. So, now you are due $10K, but the publisher is going to withhold 20% of it for that quarter, in lieu of projected returns.

  The publisher goes ahead and cuts you a check for $8K in royalties ($10K less the 20% reserve withholding).

  The chances of you ever being reunited with your $2K, is close to zero.

• So, now, all of a sudden, your game has sold 20K units and you were expecting to make $140K - but you end up making (14000 X $7) + (6000 X $2) = $110K. The game cost you two years and $1.5m to develop.

  Do the math.

  And to really put things in perspective, just think how much money Microsoft, Eidos and Fox, respectively blew on Starlancer, (sold about 30K units), Daikatana (sold about 30K units) and Sanity (sold about 15K units), and you’ll get the idea. And this is if you believe the PC Data figures of course. The units could be less.

• Now, two quarters and one bad product later, you are no longer indebted to the publisher. But of course, they probably had the license for about five years and will continue selling your product, especially if they have excess inventory or find that it makes a great bundling incentive. If you’re lucky, during the next four years, you’ll see some residual royalties. But by this time, you’ve most likely forgotten that you even had that product in retail. And remember also that the COG is probably very low, say $1, so, the publisher can still sell the product for as low as $2 and turn a profit for themselves. This is usually the tactic they use when they have a product that can be bundled. All those Gold editions, special editions and similar bundles don’t cost much to manufacture. And since the publisher no longer has to spend marketing dollars, they can push them out, assuming the distributors still take them.

Case in point. When I signed BC3K v2.0 with Interplay back in June of ‘98, I didn’t care about the rates, nor did I care about development money (I didn’t ask for any. I didn’t get any). I simply wanted to get the game back out in retail so that I could alleviate the stigma associated with the 1996 release. It was a risk for me and for Interplay. Even based on a worse case scenario, Interplay would have recovered its production costs no matter how bad the game sold. Why? It was a budget title. I think the Cost Of Goods (COG) amounted to like $1.05 or approximately. In my first royalty statement, after returns were reconciled, BC3K v2.0 sold 11.3K units in its first two months of release. There was NO marketing budget to speak of. The game purely sold itself. Thats what happens when your product has brand name recognition - for good, better or worse. The real meat of my deal with Interplay was for my next title; the true sequel to BC3K. The deal gave them a certain time period during which they had the rights. During that period, there would be negotiations in which I would get the big bucks for my next opus.

So, armed with this promise, I took off to design and develop the title that was to become Battlecruiser Millennium (BCM). Not only did the time period for Interplay to make me an offer, lapse, I didn’t get a single nickel from them. Even after the period lapsed and they lost the first rights of refusal, I still coasted along on my own and borrowed the rest of the development money I needed, to develop the product. All I had at the back of my mind was that, the industry had changed and that I wasn’t going to get any money from Interplay, or anyone else for that matter, for the development of a niche title. But I felt that once I had the game at Beta, that I stood a good chance because they wouldn’t be out any money. Between 9/00 and 10/00, they got my Beta CD-ROM. It got bounced around several studios and evaluated. It then got high marks. Interplay decided to pick it up, for what it was, a niche title….and made me an offer that made me laugh so hard, I clean forgot that I was supposed to be pissed. Here I was, deep in development debt, still dealing with a publisher who seemingly broke a promise they made to me, but nevertheless, I took it for what it was. Business.

Interplay didn’t see the future in niche games (after all those space sim duds 14 degrees East has been releasing, can’t say I blame them) and made me an offer that was commensurate with their projections. Lets ignore the fact that the game had now sold (as per my last statement), 5x what it was project to sell. In fact, it sold another 5K units in this last statement. Thats a DOS title developed in 1998 folks. Am I bitter? No. I have nothing but the highest respect for the folks at Interplay, especially my point contact over there. Publishers, even if you’re married to the CEO’s daughter, or playing golf with the VP of product acquisition, are in it for the money. We all are, when it comes down to it. It is up to YOU the developer to go into a deal with your eyes WIDE OPEN and prepare for the worst.

Not all developers are like me and can afford to go it alone, risk everything, put their reps, their lives, their families, their careers and their financial stability on the line. So, they ask a publisher to do that for them. Are you nuts? Why would a publisher want to take on the burden of a developer unless that publisher saw a glimmer that they would make a killing in sales? Taking that $100K advance into consideration, under the worse case scenario, that amounts to about 25K units that the publisher has to sell, before the developer sees another dime. And thats why developers rarely see a penny past their advances. Unless you’re like me and you have the ability to accept and reject offers, you’re not likely to see the bright side of $5 per unit clean, in royalties, in this lifetime or the next. And if you had gone and spent $1.5m on development, hoping to sell 500K units, your team and company are going to fold. Don’t take my word for it. Just look around you and see the consolidation and closures that are going on in the industry.

The industry pretty much know that there is no love lost between me and the press (we’ll revisit this later) and publishers. I had a bad experience with 360 Pacific, who canned my first game because I refused to do a Wing Commander clone. I had a bad experience with Take 2, who shipped my game in pre-Beta. When I went into the Interplay deal, I didn’t go in with the expectations that I was going to get screwed. I went in simply knowing that I was going to get my game re-released under a major label. It also helped that I had some Interplay affiliation, going back to my days with Mission Studios. Which is why, its not good to burn bridges in this industry. So, I did the deal. Of course, back in 1998, Interplay most likely had big plans for me. But then they too got into financial problems, Titus stepped in, the industry changed etc. And, like Xatrix, Volition and other third-party developers who were previously with Interplay, my company, 3000AD Inc, got cut. It’s business folks.

By the same token, I’ve had no problems with Interplay reporting sales and royalties of my product. I only had one incorrect royalty statement, and that was an accounting error because the new person in that department, charged me for price protection. That error was investigated, corrected and I was paid.

If developers don’t get royalties past their advances, its because their game didn’t sell. Sure, there are unscrupulous publishers out there, who would fabricate figures, but if you have a good contract, you can pretty much expose that. I think I read somewhere that GTi owed ID or Epic I think it was, a lot of cash due to creative accounting. I think they paid. If you catch it, they’ll fix it. If you don’t catch it, you deserve to be separated from your money, for sheer stupidity and negligence. Its business. No matter who signs what, there is no cast iron contract. If someone is going to breach it, they’re going to breach it. Period. Threatening legal action usually gets laughed at. Especially when you’re dealing with publishers. They’ll out spend you in a heart beat. However, have a good case, clear cut evidence, then file a legal complaint and they’ll get buried in the PR backlash for years to come. Just ask Take 2. They’ll never be able to shake the BC3K nightmare. Ever. But, had they taken my advice and done what Interplay essentially did, the climate would have been better. Today, guess who gets the major credit for actually getting me back in the game? Interplay. A publisher.

And there is NO such thing as …get the maximum advance you can get. You can tell a publisher that you have this kick-ass tech, the game is 80% complete, you’re out $1m in dev costs, and therefore you want $250K in advances. If they return your call, you’re lucky. At the end of the day, once you go into a deal with the false notion that you need a publisher to release your game, you’re screwed. And if you truly need the money, well then, ask all those small developers who got bought out, how they’re doing….if you can find them, that is. A publisher could care less how much YOU have spent on the game to date. All they care about is how much THEY are going to make. Can’t say I blame them. It is brutal - but its business.

If you don’t sign up with a publisher and do it on your own, things get even grimmer: Getting a title onto the shelves is very difficult. As if to help me with this column, our game, The Corporate Machine, which has had (so far) universally positive reviews from magazines and gamers, is currently the 8th most popular game download on download.com. It has thousands of people currently playing each other on our Stardock.net game service every day but was rejected for distribution by Navarre (one of the few remaining retail distributors). The reason? The graphics aren’t fancy enough. The reason why the graphics aren’t “fancy?” Because it’s a business strategy game, so we have to make sure the program will run on a P-100 without any problems (when you make a niche title, you can’t leave any potential players out unless you have a really good reason). Only in the game industry would potential sales volume be relegated to a secondary position (the graphics are simplified in order to increase sales). In our case, The Corporate Machine is what we’re using to set up channel partners, distribution agreements, etc. This way when our main gaming project, Galactic Civilizations, is ready, we can get it out into the channels quickly (luckily it has “fancy” graphics).

There are several problems right here.

Signing up with a publisher is only grim if you need the publisher’s money to get your game out. I don’t see why this should be any different from taking your used car to a dealership and getting $5K for it. As opposed to putting an ad in the paper, dealing with the call backs, with the people coming to look at the car, and if you’re lucky, getting $7K, which just happens to be $1K short of the car’s book value. EVERY industry that relies on a middle man (publisher), has to deal with this notion. Why should the game industry be any different? Even in the motion picture industry, you can’t make a film and get it into theatres without a middle man. Your choice of middle man depends on the quality of the film, the audience and the middle man’s aspirations as to how much money they’re going to make off your film. Its business.

If you feel so bad about it, sell the game yourself. If you were able to even get a game developed, then you should be able to get money together and sell it online or direct - especially in this day and age. There is NO plausible reason why a developer should feel that they NEED a publisher to sell their game, unless they want advances from the publisher or they want to sell a ton more units than the product is actually worth. Some developers simply tell you that they just don’t want to deal with the biz side of things. Well, there’s always that. Look at Mike Wilson and the whole G.O.D premise. What happened in the end? They ended up going to Take 2. A publisher. What happened to Phil and the Pop Top crew? They sold the company to, yep, you guessed it, Take 2. Its all about choices. No matter WHAT you read in the press release, the underlying reason is ALWAYS about money. I read Phil’s blurb in a CGM article about why he sold the company to Take 2, I just chuckled to myself. Not out of disrespect for Phil, of course, but as to the premise that people who are reading some of this stuff, really don’t know what goes on behind the scenes. Phil didn’t want to deal with the business of running a business, and he sells the company to Take 2? What happened to hiring a business manager, like countless other developers do. e.g. ID?

And again, the issue with Navarre is one I have already visited. If they were being paid MDFs and also had good rates, I can almost 100% guarantee that if you had dog poop in the box, they’d sell it. EVERYONE is in it for the money, none of these people give a DAMN about whats in the box. Why should they? If the product gets returned, you (publisher/developer) are the one left holding the bag anyway. The whole graphics issue about the game, is simply a way of saying, “…no thanks, we’ll pass”. It happens everyday and should come as no surprise. Its business.

Case in point: I remember asking Interplay for $500K in advances. And that was when I actually had a product and which had already been evaluated and received high marks. Bear in mind that even at a worse case scenario projection based on the fanbase and existing units, BCM would probably sell 50K units in North America, generating a gross of about $2.5m on a $49.99 MSRP; of which Interplay recovers approx $1.75m net from the retailers. And from this net, not taking marketing into account, I would have been paid about $450K in royalties. Thats not even close to my development costs. So, right off the bat, I was asking Interplay to guarantee me 50K units in sales, under the assumption that somewhere out there, were 50K gamers who are going to go out, buy the game and not return it. In this current industry climate? Even if you knew your fanbase, like I know mine, it sure as hell is a major stretch.

So, when you have a brand name recognized game such as the BC series, which has sold in excess of 200K+ units worldwide, coming from someone like me, who has actually shipped two commercial titles through mainstream publishers worldwide, facing an uphill battle to part publishers from their money, what chances do you think the newbies on the block, stand? None. Zero. Zilch. Don’t take my word for it - go ask those mod authors (e.g. the developers of Gunman Chronicles), how much money they’ve made for their troubles. Guess how much Interplay offered to give me. Let me tell you this; you know that ballpark figure we’ve all come to know and love? Well, Interplay must’ve lost their way to said ballpark, cuz it wasn’t even close. Guess what I did. I walked away from the deal. Thats right. I walked. And you know what, it had NOTHING to do with the advances, my previously dealings with Interplay etc. It had to do with basic math and what I WANTED. Why would I, who have gone out and spent my own money, borrowed what I didn’t have etc to do the project, give my 90% completed title to a publisher, so that on shipping, I was still in debt and not bloody likely to see the rest of my money until sometime after a quarter, once returns had been reconciled? What the hell was my company supposed to financially survive on, during this four and a half month period when the game was out there, being supported by me (not Interplay), patched, promoted etc? Even if it did sell 100K units during that quarter, THEY [publishers] still have YOUR [developer] money. And if you don’t have a cast iron contract that has EVERYTHING laid out, no matter how many financial projections you do, based on clearing, say $8 per unit in royalties, you’d be lucky to see the bright side of $4 per unit when you get your royalty statements. The first thing thats going to throw you in the royalty statement, is the appearance of a whole bunch of SKUs, all of which do not bode well for you, since they would most likely have been sold at reduced prices. But I will leave this for another discussion.

Its business. And you don’t have to like it. If you don’t like it. Don’t sign.

The fact of the matter is that, projections don’t mean squat in the general scheme of things. And when it comes to publishers, developers aren’t bloody likely to make money. Period. Even the primaries who are now parts of The Collective, are leaking money. The amount of money that a product makes, is relative to the amount of money spent on it, coupled with the company’s operations until they actually ship another one. More often than not, one product pays for the other. In the end, you never get out from under. Starlancer was a retail flop. Look where Freelancer is. Daikatana was a retail flop, look what Deux Ex (which I’m betting lost money), ended up being, in contrast. The Thief series didn’t sell all that well. But hey, why not do a Thief 3? Yeah, thats a good idea. Lets do Thief 3, sans the Looking Glass Studios core team who folded shortly after Thief 2 shipped. Guess who’s bright idea that was. Yep, the publisher. No slight to the capable Warren Spector and his Ion team of course. The fact is, everyone on that dev team is going to get their pay checks and bust their ass to make Thief 3 a top seller. Because if they don’t, they’re gone. Period.

The point of all this? Publishers, not developers, control this industry. And when, as a first or third party developer, you go to a publisher with a project, you’re in their world now. So, why complain? If you don’t like what publishers are doing, release your own damn game. Or better yet, go out and find a job on a dev team. If you were talented enough to do a game that you felt was worthy of a publisher’s dollars, then you can damn well find a job and save yourself the aggravation.

Nowadays, the per unit COG (Cost Of Goods) for a PC product, comprising of a box, CD-ROM, and 50 page manual, is about $2.00. And even lower, depending on the quality of the box. Faced with this math, you would think that a developer who has spent money on a title, would manufacture, say 10K units at a cost of $20K. At the end of the day, after selling direct, at an MSRP of say, $30, when all other miscellaneous costs have been reconciled, you’d probably clear about $20-$25 per unit and without the headaches. Compare that to the revenue stream from a publisher. In fact, you never have to even see the inventory. There are literally dozens of fulfillment centers which will handle the turnaround, including returns. I should know, because for BCM, I already have this route in place. The reality you are then faced with is: Do you know your fan base (if there is such a thing)? Do you have faith in that fan base? Do you have enough faith in the product? If the answer to all these three is not a resounding YES!!, then you’re best going the brute force approach and go sign with a publisher. This way, fan or not, they’ll push boxes. Even if you toss crap at a wall, some of it is bound to stick. So, if you don’t want to risk selling 10K units on your own, you can go find a publisher who is going to actually take your product and try to throw 20K units into the retail channel. All you have to do then, is hope that 10K of it sticks. Good luck. You’re going to be needing it.

Just the other day, I, again, turned down a deal. This time, with Macmillan Software. It wasn’t a bad deal. So, don’t get me wrong. I’m sure that there are developers who have a product worthy of retail distribution, who would sign it. I just have specific requirements and as such, REFUSE to budge and/or compromise. Without going into detail, it pretty much was similar to the Interplay deal, but it paid me royalties more frequently, I had a lot more control over how my product was handled. The only problem is, I’d rather have a publisher/distributor, owe me less money, than more money. Once you find yourself in a situation where the other party ends up keeping the bulk of your money for an extended period, forcing you to spend a mandatory percentage on marketing, which amounts to quite a portion of your derived income etc, you start to think very seriously.

So, again, I walked. And you know what, when its all said and done, I would have cleaned $16 per unit, easy. But thats assuming I had blind faith in a third party’s ability to sell my product after spending my marketing dollars. A third party who knows nothing about my fan base or to what audience my product caters. If all I wanted was to push boxes, BCM would have been released under this label and you would have been reading the press release by now. Instead, I bit my lip, walked and went for a non-traditional route. This basically cut out the middle man COMPLETELY - gave me 100% control over my product and its earning potential and had me, again, as with the Interplay deal, relying on the product to sell itself and putting ALL my faith in my fan base and my product. Regardless of what you think of me, one thing I’ve always maintained is that, I believe in my product and my fan base. Neither has let me down yet. This deal, is certain to raise some eyebrows once it is announced later this week.

So you see, though Brad paints a bleak picture of publishers, distributors etc, he fails to acknowledge the fact that, they, like us [developers], are in it for the money. As such, they have to have FAITH in the commodity in order to sell it. If they don’t have this faith, then you have to PAY for it. As I said, go spending MDFs and see how much wonders that works for you. Heck, spend enough, and you’ll even have your own pile of dung, right smack in the front of the store. Your MDF dollars at work.

But if you don’t get your title into retail, then getting media coverage becomes much trickier. Game magazine editors are human beings and let’s face it, getting a shrink-wrapped box in the mail is going to send a much better signal to an editor than sending a home burned CD-ROM. If you want your game to get covered, you better have a shrink-wrapped box (unless you want to be one of those token 22% reviews in PC Gamer). It’s subconscious, but we all expect good games to have a nice box and a nice manual. It’s human nature.

This is mostly where I have a problem with Brad’s article. We have had this argument on the Usenet. In the end, I ended up getting killfiled. Again, let me point that this is Derek Smart we’re talking about. I’ve been the whipping boy for the media, back when my first game flopped (thanks to Take 2) and to this day, the odd jab comes and goes. As such, I never have cut them slack. Ever. But, my games do get coverage in ALL the mainstream media. And that was even when I didn’t have a game to speak of. It boils down to this: If the media do not determine that the game and or the premise thereof is news worthy, its not getting covered. Period. Whats so wrong about that? Where does it say that the media has to cover EVERY game every released? The statements Brad makes above are insulting at best, to the media. I have NEVER sent a boxed product to the media for review. Ever. In fact, all those BCM previews you see all over the Internet and in the print media, are single CD-ROMs, hand written by me. In fact, some of them have a Post-It note with some basic directives. I personally burn the CD-ROM, stick it in a padded envelope and shove it in the mail.

This, again, goes back to my earlier point, you have to believe in the game. I believe in my game and even if I sent it out on 100 diskettes, I have full confidence that by the time the person on the end is done playing it, they’re going to WANT to cover it, forgeting the pains of diskette swapping during install. Sure, Take 2 probably sent out boxed copies of BC3K to the media (that was back when I had no control over anything, let alone my own product) - look how that turned out.

I, along with my product, were being covered by the media back when I was always at war with the media. I still disagree with some of them behind the scenes, but not for anything blatantly obvious as why they don’t cover my game. Come on, its not like I’m the industry’s last hope for survival. Its about THE GAME. If the game is not worthy of coverage, its not going to get covered. Period. The media folks, are indeed human beings and prone to mistakes. But where does it say that your product has to be presented in any particularly manner in order to get covered, or its going to get trashed? Thats just ludicrous and bitter. Sure Brad would like to see one of his products on the cover of CGW, as would the dozens of other developers whose products have sold so many units, the 75K units of Entrepreneur look like giveaways. But guess what? Those products never did get the cover. And when they did get covered inside the mag, they probably got trashed, to boot. And there is a very good chance that the product actually showed up at the media office in a press kit or in a plain old CD-ROM.

Case in point: The April issue of CGW (yes, the one that I’m in *g*), has space games on the cover. There is NO mention of BCM, even though the jury is already out that (1) it pretty much buries I-War 2 (2) Freelancer is, but a distant memory and now not due out until 2002 (3) Star Wars Galaxies is like Star Wars, but without the stars (if you’re reading the FAQ, that is) and (4) Bridge Commander, is, well, from Larry Holland, so there’s hope here. Not a peep about BCM. Those mags have almost a month to two months lead time on issues and it takes time to get stuff together. In the end, the once almost crowned prince of the space sims, Freelancer, got to share a page with BCM. Under normal circumstances, Freelancer would have been the most blatantly featured, instead of that point-and-click-this fare that is Westwood’s Earth & Beyond. The reason? The industry has moved on. The media write about whats going to sell and what stands out on the rack. Notice the tagline for E&B on the cover, and how it is separated from the other titles on the left of the page. The Westwood separation and that fact that it got the cover, is the premise of the mag. Its whats going to stand out on the shelves. Its Westwood. They reek of track record. They have an established rep. All the ingredients that made space games (a genre everyone said is dead, stagnant or dying), the cover of CGW.

Sure, I could’ve fired off a few indignant emails to George Jones. But instead, I just smiled at the notion that, there, on the cover, were five games, some of which were most likely going to bomb. Badly. I particularly chuckled at the degradation of the Freelancer status, especially since what they’ve been trying to do with Microsoft’s millions, and almost four years, we’ve done for pittance, with a virtual crew and in under twenty-four months. And there, again, was the underdog, I-War2 which is going to have to put up quite a fight to stay afloat, now that Infogrames has sanctioned its evolution to an action game. (The same issues I had with BCM, back when Codemasters evaluated it, gave it high marks, but indicated that it needed to be an action game in order to compete with I-War2 and Freelancer. Of course, since there was no way in hell anyone was talking me into turning my game into an action game, take a wild guess at how that one ended.)

At the end of the day, I was happy that my genre got coverage, let alone the cover of CGW.

The point is, believe it or not, there is a media war going on out there, and we’re [developers+gamers] all casualties. Deal with it. The press will cover what the readers want. You get to hear this all day long. Just two weeks ago, I was having this same conversation with a mag editor about giving BCM the cover : “We would love to give you the cover Derek, BCM is a kick-ass game, but the fact it, the space genre is a stagnant one right now. And with your title being a niche and all, it won’t have as much cover appeal on the stands, to the person who doesn’t know about it.” Normally, I’d be livid. But guess what? It makes perfect sense. I literally grew up in the media, after dropping in from seemingly out of nowhere, and I’ve seen the rise and fall of many a print mag. I have fans and foes in the media, but I don’t begrudge their right to want to make money. Heck, we’re ALL in it for the money, when it comes down to it. At the end of the day, we all get our turn. Even niche titles get coverage in print mags.

But thats the problem right there, the very premise that is a niche title, is its own bane. When PC Gamer ran that whole controversial Gaming Gods cover, how much consternation did that one cause? heh, Stevie Case exits the gaming biz proper, Alex Garden won’t get star status until he actually ships a game that MANY people end up buying; and if American McGee wants to have a regular pay check, he’d better convince EA that there’s life after Alice. So you see, the media, just like us developers, who couldn’t finish a game on time to save our lives (screw the pay checks), get to do blatantly foolish things like that cover. To do a cover like that, you’d want to get ALL the people who actually MAKE a game. You know, those little known guys like, the artists, the modelers, the sound guys etc. The TEAM that actually creates a product worthy of retail distribution. But no, lets put a bunch of primaries on the cover of our mag and hope they end up being the next John Carmack, Will Wright, Peter Molyneux, Larry Holland, Sid Meier, etc - all the while forgetting that these people the newbies on the block aspire to be, started out back when the industry was about FUN and GAMES. Now its about EGOS and PAYCHECKS.

Like us developers, I have faith in the print and online media’s ability to screw up. It never fails. But nevertheless, I for one, as much as I would like to jump on the media bashing bandwagon, do not subscribe to the notion that the media will trash a game because of its packaging or even because they want to trash a game in that issue, while sucking up to the publishers. These are the issues that Brad and I argued feverishly over on the Usenet. And I am quite disappointed to see those same feelings echoed in his article. My first game, BC3K, has been trashed in almost EVERY gaming magazine on the planet. When Jeff Green from CGW came down here, I showed him my catalog of EVERY gaming mag that I have ever appeared in. Yes, he was a tad surprised that I would even keep the good with the bad. So, I just want to get that out of the way before people start accusing me of sucking up to the press. In fact, in the May issue of CGW, they took a jab at me again. And in the April issue, I’m on the cover, and in a four page article. How can you call that biased? I guarantee you that if I ship BCM and it ends up being crap, even though ALL the press previews so far have been positive, they’re going to bury me….no, they’re going to try and bury me.

The fact is, you reap what you sow. And if there are two developers in the industry who know, first hand what that feels like, its Derek Smart and John Romero. One would add Richard Garriott to this equation, but thats a whole different story. Fact is, what you don’t know, you don’t know. Good luck Lord British - we love yer man!!

Your only hope to sell large quantities of your game presently is to get it into retail. It’s that simple. If your product isn’t in retail, you’ll be lucky (very lucky) to sell 10,000 units of your game. In fact, based on the email I received, most of the game developers sold fewer than 1,000 copies of their title; many sold less than 100. Admittedly, these products weren’t necessarily going to give Blizzard any competition but even the lamest card game is going to sell a few thousand units if it gets into retail.

…and the problem is what? If you put a crappy game into the retail chain, it’s not going to sell. Again, it comes down to knowing your market and/or your fan base. If you have a game that a select group of people are going to buy, no matter how many stores have it, they’ll go to the place where they can find it.

The fact that you see games that you perceive to be crappy, does not necessarily make them so. As elite gamers, we cannot assume that every game that shows up in the top 20, that is not to our liking, is crappy. For example, Rollercoaster Tycoon is a good game. The Sims is ground breaking - and as advanced as my AI experience and knowledge is, you just cannot discount what Will Wright and the crew did in that game. Who would’ve thought that it would sell in such numbers? How many of us discounted Diablo II or Command & Conquer 2 as more of the same? When you see crappy games in the top charts, you should think about what I said about throwing crap at the retail wall and hoping some of it sticks. It doesn’t apply to all titles, but believe me, more often than not, it applies to a good portion. The good thing is that, one day, these same people buying, for example, Deer Hunter, are going to grow up and want games that are more challenging. Games have become more work than fun - and right there is the problem. This is why casual games sell such large numbers. You can still do a fun, high-end game, like my games, but they are never going to sell anywhere near the numbers of casual games. Which is why most of the industry is leaning toward casual games. Thats where the bulk of the money is. If any games in my Battlecruiser series, sells more than 250K units in that title’s lifetime, I’ll be very surprised, to say the least.

Case in point: The exclusive deal I signed with Electronics Boutique, puts BCM in their retail chains and online store. You won’t find it anywhere for ninety (90) days. In fact, I was warned, by another party trying to make their case so that I would sign with them, that if I did do this exclusive deal, that I would kill my game’s sales potential and most likely alienate the other retailers. Well no shit Sherlock. Since when did I care? Here’s a shocker for you. If you have 10K people you know are going to buy your game, even if you sold it direct or via a single store, as long as those 10K people know where to buy the game, you’re still going to sell 10K units. But if, on the other hand you just want to toss crap into retail and hope that some of its sticks - sure, do your best to get it into retail. The more stores you toss it into, the more likely you are to sell a copy of a crappy game to some poor fool who is going to be too busy to return it or who goes and buys from a store that doesn’t accept returns. Either way, you get to sell one more unit. And gain one more person to flame you for selling them a bad game.

The good news is that the PC game industry is about to change dramatically thanks to the Internet. As the Internet proliferates and people become more comfortable buying games online, things will get much better. As if on cue for the next article, Amazon.com is getting into the action by having games that you can order, download and receive the box later – that is the “Wave of the future.” When millions of titles are sold off the net each year, then the retailers will lose their clout, and the game magazines will have to actually cover offerings that aren’t at retail. That may mean coverage of the latest Blizzard expansion pack, but it will mean gamers will see a lot of coverage of lots of other titles as the playing field will be evened out a bit. So what it will mean is that there will be a lot more games that sell more than 10,000 units but probably fewer that sell more than 200,000 units because there will be more products to choose from. I think that, overall, sales will go up because the instant gratification issue. (If I could go to EA’s website and simply purchase and download one of their games right now, I would. I’m bored and want to play something but I’m too lazy to drag my rear to the local mall to buy something.) But how will this affect game design, game distribution and the publisher/developer relationship? How will games be distributed?

Brad, I don’t know if you noticed this, but, uhm, the Internet happened a long time ago. And for argument’s sake, lets just assume you’re talking about Electronic Software Distribution (ESD) and how the high speed Internet assists in this regard. Well, even when you purchase utilities online, you have to store it somewhere. I buy a lot of stuff online (I even recently bought your Object Desktop product) but I still copy them to a JAZ disk for storage. There aren’t a lot of savvy folks on the net - and you put too much faith in the ability of Joe Gamer to exercise his right to common sense. If good ol’ JG had any common sense, he won’t buy a single game, regardless of who wrote it, without first playing a demo based on the Gold code. And you want JG to do what? Buy a game online, install it, play it AND remember to copy it off his hard drive for safe keeping, in case he has a system crash? LOL!!! You can’t even get JG to install the latest drivers for his video card and you want him to do WHAT?!?

Lets face it, the Internet and ESD aren’t going to change anything. The retailers aren’t going to lose any clout. The publishers are going to keep paying retailers to throw crap at the retail chain wall and hope that some of it sticks and you’re never going to get a game on the cover of any gaming mag, let alone ship one under the ESD method, that sells more than your own 10K estimate. Sure, the industry is changing alright, but not in the direction that you think its changing in. The only changes are in the consolidation of all the players who actually make this industry turn. As long as developers need money from publishers and distributors need money from publishers and JG continues to spend his money on crap, this vicious cycle is NEVER going to end.

….and we don’t have to like it, either. There are lot more ways to skin a cat. There are ways to circumvent the system IF you have a GOOD product. The gaming industry, like ANY other, is about survival of the fittest. If you have a good product and a fan base, you will survive, get media coverage, and live long enough to prosper.

If you don’t, you’re going to die. Period. Its business. Its our industry.