Tales of the Rampant Coyote

Adventures in Indie Gaming!

That Sound You Just Heard Was the Other Shoe Dropping on the Heads of the Publishers

Posted by Rampant Coyote on September 20, 2012

Congratulations! You have won. “You” meaning gamers and independent (not necessarily indie) game developers.

This has happened, according to Forbes. Publishers have tried to use developers with a reputation (in this case, Obsidian) as false-fronts for Kickstarter campaigns. The interesting part about the article? It’s “Publishers.” Plural. I sincerely doubt these were big, AAA publishers. As amusing as it would be to imagine UbiSoft asking Obsidian with hat-in-hand to help them scam some funding. But still…

Sadly, the ethics (or lack thereof) don’t surprise me too much. Through mainly second-hand knowledge, I’ve come to expect some pretty shady dealings from this particular class of publisher. But that’s not the twisted thing. Here’s the mind blowing part of it:

You’ve basically got publishers begging developers for funding.

Think about it.

Okay, now… again, considering some second-hand stories I’ve heard about the lower echelons of publishers, this isn’t overly surprising either. I’ve heard of some truly bizarro offers in the past to indies that left said indies scratching their heads and asking, “Ummm… we take all the risk, do all the work, and then… you do WHAT, exactly, for your lion’s share of the profits?” They were like the world’s worst vanity-press.

But this really signifies something even bigger. In the past, publishers were able to dominate the coveted middle ground of the game industry landscape – and by extension, gatekeepers and squabbling lords of the industry – because they controlled three critical factors:

1. Funding – the publishers had the money to fund game development.

2. Marketing – the publishers knew how to market and sell games. Developers rarely did.

3. Distribution – Duplicating disks or cartridges was expensive, as was packaging, and publishers could take advantage of economies of scale. Plus, they were the gatekeepers to the distributors, which was the key to getting into the stores.  And that was largely the most practical way of getting your game into the hands of customers (even the shareware phenomenon Doom didn’t sell nearly as many copies as the more traditionally published-and-distributed sequel).

Well, the digital distribution age has really made #3 pretty dang wobbley. It’s not just indie games, anymore. Physical media sales still dominate, but it’s been steadily eroding over the last several years.

Indies have been forced to learn and do marketing themselves, but publishers still (usually) have the solid upper hand there.

But now #1 – funding – is changing. With developers like DoubleFine, InXile, and Obsidian pulling in serious cash – albeit nowhere near AAA cash (yet) – for promises and a reputation, and smaller indies often pulling in reasonable amounts for their projects, there are now even more alternatives to the two historical standbys, publisher funding and “bootstrapping.”

Leg #1 of the traditional game publishing model tripod is beginning to get kicked out from under it.

No, this doesn’t mean the end of publishing as we know it. At least not for a while.  I’m not expecting EA or Activision to file bankruptcy anytime soon on account of this. The new distribution and funding methods we’re seeing now are basically  a market reaction to a combination of enabling technology and processes, and a pretty crappy system that was in place for decades that inadequately served developers and customers. Some lighter traffic is getting re-routed around the (deliberate) bottleneck. But these “smaller games” with lower budgets are exactly the business of the smaller publishers, and they are the first layer to get shed as their traditional way of doing business is becoming obsolete.

I will once again invoke the words of EA’s Vice President of Corporate Communications Jeff Brown in 2005, speaking on the rising entry costs to participate in the games industry on the advent of the (then) new generation of consoles, “It is now impossible to ‘Blair Witch’ this business.”

Awesome prognostication, Jeff. As for my own attempt to do the same: In a few years, will the traditional publishing model actually become a secondary approach to getting your game to market? I have a tough time imagining it, but at this point I can’t rule it out.

Go, indies!

Filed Under: Biz, Indie Evangelism - Comments: 5 Comments to Read

  • LateWhiteRabbit said,

    Oh, man, I wish Obsidian would name names. Really call out the publishers who tried this stupid and tactless manipulation that counted on developers being stupid. I can see why Obsidian hasn’t named names (after all they have no idea whether Kickstarter will be a sustainable model for their business in the future) but man that would be some crippling press.

    I see the crowd funding model as a release valve to the “budget bubble” that was ever increasing on AAA game development. I was honestly expecting something of a crash in the market instead, but this is much better.

    It returns games to their old budget numbers of several hundred thousand to a million or two dollars, and at the same time vets ideas directly with the public. It also, provided, the developer stays within their crowd funded budget, means their game immediately breaks even. Everything else afterward is pure profit. Not a bad position to be in, since even if the game doesn’t sell well, you still aren’t in crippling debt or the red, but are sitting, even if barely, in the black. It’s sustainable game development that doesn’t risk your company’s future on ever roll of the dice.

    All that being said, I can’t help being a bit disappointed by Obsidian’s Kickstarter project. I mean, these are the guys that gave us Arcanum! Planescape: Torment! And the first IP 100% their own appears to be a fairly generic high fantasy setting. Seeing the map they posted significantly dampened my enthusiasm – lots of towers, keeps, and vales. And the information that the races include humans, elves, and dwarves (No! Really?!) just makes me groan a little. I don’t see how they can mix up ethnic groups enough to give me something I haven’t seen before. Why not come up with their own totally unique races and not contribute to the long sad line of Tolkien ripoffs? They have the talent for it….

    I don’t dislike high fantasy – I grew up reading dozens if not hundreds of books in the genre, playing all the games, rolling the dice with friends in generic fantasy worlds – but that’s the problem. I know every fantasy trope by heart. Hell, at this point I know all the trope subversions by heart. I’m an “explorer” or “experience” type of player. I revel in novelty. And fantasy hasn’t been novel to me for a very long time. When Tim Cain said “I’m looking forward to doing my first pure fantasy RPG” I involuntarily frowned.

    I have faith in the team that Project Eternity will be amazing, but I can’t help but sigh at missed opportunities for doing an RPG in not just a unique setting for THEM, but a truly unique setting not seen much in games. They have one of the best creative teams EVER and some of the best writers in the industry. I just feel they could have come up with a higher concept.

  • Brian 'Psychochild' Green said,

    Well, given that Kickstarter is mostly a marketing exercise at this point, that second leg is pretty rotten at this point as well. If publishers were to run KS campaigns for developers, that would be a way for them to become relevant again, I think.

    I also have to agree with LateWhiteRabbit above. A bit sad that a noted developer with a long pedigree finally gets out from under the thumb of publishers, only to pitch something that sounds so utterly mundane. Maybe they’ll reveal some cool stuff later, or perhaps the market just isn’t ready for some actual originality.

  • Rampant Coyote said,

    I suspect they were being cautious for their initial foray. Yeah, I know… “risk aversion” is supposed to be for the big guys, but they are taking the risk already with going with something that sounds more like it’s going in the Infinity Engine style of game. Sadly, these days, that’s ‘pushing boundaries’ quite a bit on its own. Maybe if that proves successful they’ll start pushing the boundaries in another direction.

  • Anon said,

    This is why you shouldn’t contribute to Kickstarters of giant reputation developers.

    Did you watch the Obsidian video?

    They already have a huge staff, huge offices, and clearly massive investment.

    They don’t need Kickstarter to get this game made. Not by a longshot.

    They are guilty of doing exactly what the publisher asked them to do, they are just keeping all the benefits for themselves.

    This is not what Kickstarter was supposed to be about.

  • Rampant Coyote said,

    I respectfully disagree, having been a member of a larger, high-rep developers a few times in the past and knowing how much they struggle to (A) get contracts, and (B) get the chance to make the kinds of games they really want to make. While it’s quite possible Obsidian has money in the bank to burn, a lot of times these companies are working contract-to-contract, and don’t have more than about two or three months of full payroll in the bank. Something like this would amount to something like having a smaller contract – smaller, but worth more risk because they can keep 100% of the back-end revenues.

    As a customer (or Kickstarter contributor), I take a pretty selfish attitude. “What’s in it for me?” I’m a little more hesitant to take a risk on someone I’ve never heard of, someone without a pedigree and a proven track record for delivering. I’ve seen a few Kickstarter projects that sounded like they were made by some professional slacker with big ideas and zero clues. I would NOT have contributed to the Ouya campaign, for example, if it was by a bunch of guys fresh out of college with no experience in the games industry or at putting together & marketing hardware. That would have been crazy, unless said guys had something a bit more tangible to prove themselves. But I still wouldn’t know if they knew how to complete the project on time and on budget.

    It doesn’t take a huge track record, and I’m willing to back smaller projects with inexperienced teams if it’s clear they’ve done their homework and have an awesome idea.

    Another bonus of doing Kickstarter with known entities with a “rep” is that they’ll be very protective of their reputation. I have no doubt that the InXile guys will do absolutely everything in their power to deliver – including taking out bank loans and kicking in their personal funds (Brian Fargo’s already pledged $100k to the project from the get-go) and working crazy hours to get Wasteland 2 done, and done relatively on-schedule, to preserve their reputation. That’s something I’m willing to stake money on. And I have. 🙂