Video Game Development: The Third Generation

1. Video Game Development: The Third Generation Kevin Bachus Chief Executive Officer Nival Interactive

2. Video Game Development: The Third Generation Kevin Bachus Chief Executive Officer Nival Interactive

3. Извините!

7. Actual, Unretouched Image!

8. Actual, Unretouched Image!

9. Actual, Unretouched Image!

10. The Third Generation of Game Development

11. Three Generations • United States and Western Europe • Japan • Eastern Europe and Asia Why? – Quality vs. Cost

12. Costs vs. Revenue: Hit Game

13. Perceptions of Russian Developers • Pros: • Very bright, very well educated • Inexpensive, compared to US and Western Europe • Extremely good at certain types of games • Cons: • Difficult to communicate with: distance/language • Concerns about political/legal environment • Limited console experience, limited quality • Extremely good at certain types of games.

19. United States

20. United Kingdom

21. Japan

22. Nival Interactive

23. The Way Forward: Creating Global Content

24. Europe 21% USA 40% Japan 39% Why Care? Source: NPD/ChartTrack/Famitsu

25. Best-Selling Games for 2005: USA Source: NPD

26.  Best-Selling Games for 2005: UK Source: ChartTrack

27.      Best-Selling Games for 2005: Japan Source: Famitsu

28. Genres Source: NPD/Screen Digest/Famitsu

29. 50% 6% 8% 7% 6% 40% 13% 12% 8% 9% 12% 10% 30% 4% 12% 20% 29% 29% 27% 26% 26% 10% 19% 0% 2000 2001 2002 2003 2004 2005 Top 10 11 to 20 21 to 30 The “80/20 Rule” Percentage of Total US Game Sales Represented by the Top 30 Titles Source: NPD

30. Four Basic Drives • To Acquire • To Bond • To Learn • To Defend

31. Relevance! Innovative games tap into an audience’s aspirations to deliver experiences they want to have! Listen to the audience!

33. The Paradox of Innovation • Innovation is not art … and art is not necessarily innovative. • Different is not the same as innovative. in·no·va·tion (n.)1. The act of introducing something new.2. Something newly introduced.

34. Five Keys to Successful Title • Quality is evident throughout • Truly differentiated, not just different: consumers see that it’s fresh and unique • Built with a specific audience in mind • Accessible and relevant to that audience: not afraid to take the “right” risks • Delivered “on-time” and “on-budget” • Word of mouth makes it a “must have”

35. Global Content Checklist • Has a very powerful, very specific vision • Can be described very simply and very clearly • Starts with story, character and action, not with setting • Evokes strong emotions • Steals the tools and grammar of other media to enhance impact • Can be described without reference to other products

36. Take Destiny Into Your Own Hands

37. Introducing “Nival 2.0” • USA-based company • US management team • US creative talent • US point of contact for publishers • Access to US capital for expansion/acquisition • Russian development talent • High quality, low cost • Extremely talented and experienced • Demonstrated track record and history of production • Scalable to meet production requirements

38. Nival Management Structure

39. Nival Studio Structure

40. What Does This Mean? • More responsive to publisher requirements • Studios have more autonomy • Experienced western creative talent helps ensure worldwide commercial appeal • Creative and technical talent integrated with teams to help train and develop production capabilities • Able to raise money outside of CIS

41. Key Lessons Learned • Experienced management team with industry credibility is critical to get deal flow • Development studio with established track record is essential to satisfy publishers • U.S. game development community has consolidated in California – particularly in L.A. • Company must be able to support higher costs of production and “white” transactions • Must have a unified structure: One happy family!

42. Questions?