As an adjunct to last week's flippant post about the development team who put themselves up for (unsuccessful) auction with online trading site eBay, we thought we'd outline some alternatives to the traditional funding models for interactive entertainment. Why alternative models? Well, as most everyone can see, the games industry - while consistently demonstrating a bullish trend - has unsettlingly settled into a quagmire of uninteresting titles reliant upon sequels and hackneyed ideas. If the target audience of teenage boys are losing interest, surely there's a need for an alternate funding scheme which would allow for innovation whilst not breaking the bank and sending over-worked employees into early retirement?
Continue reading for Part 1: Advertising, the Hollywood Model and Episodic content distribution.
1. Advertising in Games As uncomfortable as it makes many gamers, opening up the computer games platform to big corporates as a way to get eyeballs on brands can be a very lucrative trade-off for developers. Digital luddites argue including billboards or product sponsors into virtual environments breaks the immersive quality of gameplay - and certainly this is true if the advertising is implemented in an obtrusive or nonsensical way - but those thousands of dollars could provide a cushion for an ailing developer and may be a lifeline for a future, more innovative project. Immersion could even be increased, as appropriate advertising may enhance the agency of the player. As Keith points out in an earlier gamesblog post:
With costs of producing games likely to sky-rocket in the Next Gen era this sounds like the perfect way to meet those spiralling budgets. The worry is, if large corporations do start to fund games in this way, how long before they're censoring content? How long before fast food giants and global supermarket chains are saying, "We'll give you $5 million to develop Doom 5, but, hey, we can't have all that violence, our shareholders won't approve and it contravenes our passionate support of family values..."
For advergaming in practice, see Massive Incorporated's impressive portfolio.
2. The Hollywood Model This is the approach we touched on last week, in which employers hire talent on a contractual basis. This saves the development company from spending big bucks on retainers between projects, when they have to keep an entire workforce in the money until a commissioning publisher gives a green light. You can imagine that millions goes down the drain.
I'm particularly familiar with this approach because I'm a freelancer myself, albeit in the "medja" and not in games development. Still, I appreciate the pitfalls and benefits because I've experienced them firsthand. Unfortunately, the benefits do fall in the favour of the employer; however, there are good points about being a contractor, as well.
Development talent can focus and stream skills, rather than becoming okay at quite a few subjects as the development tide turns in their company. (There is a danger, though, that this may pigeonhole some employees.)
Developers can get experience at a number of companies, which means that they'll have more games under their belts than with the traditional model. The constant flow of employees should also establish a cross-industry code of practice, thus increasing the quality of life in an environment which rapidly chews up and spits out its most able and experienced workers. Furthermore, contractors would be able to charge for overtime, unlike full-time employees.
The upsides for companies include saving cash on retainers, reducing costs on employee tax and benefits and having the ability to pick and choose teams to work with. They'd include individuals, but would also quite often include groups. If this model took off, there would be loads of four and five person companies/teams who would be hired as a unit and would work together. You'd also be able to outsource jobs to cheaper regions.
The Hollywood Model isn't just a philosophical exercise dreamed up at industry conferences; the critically acclaimed Stubbs the Zombie was developed under these conditions, and according to the Hollywood Reporter, the benefits seem immediately obvious:
...if all the work on "Stubbs" had been done in-house, it would have required a full-time staff of 65-70. Instead, his 12 employees began 18 months ago and spent six to eight months to plan the project. Then, outside contractors took another six to eight months to build the assets. And now the internal team is filling another six months assembling it. All told, contractors accounted for about 75% of the work hours. As a result, the project cost 35% less to produce than if it had been produced entirely in-house.
Of course, there is still a danger that budgets could skyrocket with this plan, as game development freelancers realise just how much it costs to do their own taxes.
3. Episodic and downloadable content There is a reason why two or three years ago every games developer worth its mettle was suddenly working on a Massively Multiplayer Online Game: the ongoing production and distribution of online content costs substantially less in the long term than one-off releases, and the revenues just keep on giving. In some cases, they last much longer than a battery-operated mechanical bunny; Ultima Online has been going since 1998.
The bulk of the cost in the development of any MMOG or episodic title is in the initial planning and implementation. Once the technology has been worked out, the assets developed, the design established and the title released, the majority of employees can move on to greener pastures, leaving a core skeleton crew of community managers, writers, designers, programmers and artists to move the content forward. All that's required of the player is a hard drive, a broadband connection and a subscription fee. Even better; there's no costly packaging to shell out for.
It's not just limited to downloadable PC games, as Steve Boxer explains in Technology from a few weeks ago:
...at the recent Game Developers Conference in San Jose, Nintendo president Satoru Iwata announced that the Revolution, its next-generation console, will feature a download service including a library of games from Sega's 16-bit Mega- Drive console, while Sony's head of development, Phil Harrison, demonstrated an iTunes-style song download service for the company's SingStar karaoke game.
Microsoft's already in on the act, offering new missions and other content via its Xbox 360 marketplace.
It's a pretty dangerous practice, as the initial investment (say, 80%) goes towards the first episode. If that one is rubbish, companies won't get the cash back via the remaining downloadable sequences - as in the business model - as no one will spend their money on duff content.
The killer app for this distribution model will be the release of Half Life: Fallout. Episode 1 launches at the end of next month.
Tomorrow, independent distribution and public broadcasters.
