Let’s Not Eliminate the Game Publishers Just Yet…

Posted by Rampant Coyote on April 18, 2013

You’d think, as a guy who has been a self-proclaimed “indie evangelist” for years before indie games were cool (wait, we can’t be cool!), that I’d be an enthusiastic chorus for an article entitled, “Why Publishers Stand Between Us and Better Games.”

Maybe a few years ago I would have been. And I generally don’t disagree with the the overall perspective, and I appreciate his enthusiasm, but I guess I’m a little cautious on his analysis, which suggests that publishers are the problem and that indie (esp. Kickstarter and other crowdfunding options) is the cure.

Risk Aversion

I’m all for indie and bypassing the publishers. And I agree that the big money in the games industry is choking off creativity. I disagree that it’s the desire for profit that’s killing the creativity.  Really, that’s a dumb point. I think the profit motive is the source of a ton of creativity. Sure, many game designers do what they do – and experiment – for the sake of the art more than cash. I mean, if I was in it for the money, I sure wouldn’t be making niche old-school style RPGs. I think if I “charge myself” minimum wage, Frayed Knights: The Skull of S’makh-Daon will never be profitable. But of course, I’d like to do better than that, and this desire is the source of a lot of the improvements in the sequel.  Necessity is the mother of invention.

I don’t think the problem is the desire for gain, it’s the fear of loss. It’s a well-known phenomenon called “loss aversion.” If I give you $100, and then say there’s a 50% chance that I’ll take it away from you, you will react much more strongly than if I simply tell you there’s a 50% chance of me giving you $100.  In either case, the mathematics are exactly the same – there’s a 50% chance that you’ll be $100 richer. But emotionally, you’ll take a lot stronger measures to avoid losing the bonus $100 than to secure the gain of $100. That’s irrational behavior, but it’s how humans are wired.

So when you’ve got games with budgets in the mid-eight figures (in U.S. dollars), there’s a crapload of money on the line.  So as a publisher, you are gonna need to sell a couple million copies of a AAA game in the first week just to avoid losing money. While you certainly want to sell more than that – 8 million or more if you can pull it off – you will take every effort to avoid doing anything that could put that initial 2 million copies sold at risk. If there’s an option that is equally likely to decrease sales or increase sales by the same amount, it will probably be refused due to this psychological effect.

But this is probably not the biggest factor. It really comes down to the fact that AAA titles ride the ragged edge of budget vs. potential. Two million sales at full price just to break even is a lot. A fifty million dollar budget is a lot riding on success or failure of a project. And this probably doesn’t account for the money dumped into other projects that were cut before they saw the light of day, or the other projects that – in the end – couldn’t break even. In the AAA world, the winner (of the month) takes home all the marbles, so that level of competition keeps driving the price point up.  So the publishers desperately need a good mega-hit or two every year just to stay in business. It’s a vicious cycle, and it’s hardly unique the the games biz. You could say it’s simply a fact of life as this kind of business matures, and the publishers represent one approach that has evolved to adapt to it.

As the battle between the titans rises into ever thinning atmosphere, they leave more room at the lower tiers for alternative approaches.  Like crowdfunding, self-funding indies, etc. This is the area that excites me, and yes – it’s the area where greater experimentation can be taken, because the risk-to-reward ratio isn’t quite as high.

It’s a fallacy to believe that all the innovation is happening on the indie side, or that AAA can’t take risks (they do by their very creation!). It’s not, they do, and while the innovations on the AAA side may get a little buried in otherwise low-risk conventional gameplay, there are cool new ideas coming out of AAA all the time, too.

Publishers are Good For Indies

But I have a suspicion that part of the reason this is such fertile ground is because we’ve got these giant publishers slugging it out in the distance. We indies reap indirect rewards from this. We get to take advantage of new technologies developed specifically to support the “bigshots” in the industry. The market grows in part because of their titanic marketing campaigns. Many of us received part of our training in game development from ‘paying our dues’ in the games industry. And as much as we put a premium on innovation, none of us like reinventing the wheel, and we borrow freely from what has been extensively (and expensively) researched, developed, and promoted at the high-end.

And there are direct benefits as well. If an equitable arrangement can be reached, I’m all for publishers using their mighty marketing and distribution resources to make money off of the indies. Why not? If it’s a win-win for both sides, we’re golden! It doesn’t invalidate the “indie” label if publishers come in after-the-fact to play the traditional role of simply marketing and distributing a title. The real problem is that big publishers tend to have an enormous advantage in negotiations, and have proven quite willing to use this to roll developers in the past. While it worked to their short-term advantage, I believe it caused a hostile environment in the longer term, and I expect that’s where a lot of the schadenfreude comes from as the big publishers currently struggle.

So I’m not really into the “down with publishers!” thing. Their stranglehold over the industry that they enjoyed through most of the 1990s and the early 2000s is largely over, and I’d like to see it stay that way. Sure, most of my gaming time nowadays is spent playing either indie titles or old-school classics, but I still enjoy the occasional good ol’ straight-up AAA romp that rides the formula to perfection.

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